IRVINE, CA - Netlist , Inc. (OTCQB:OTC:NLST) has entered into a definitive agreement for a securities offering expected to generate $15 million in gross proceeds. The transaction includes the sale of over 13 million shares of common stock, along with Series A and Series B Warrants to purchase additional shares. Roth Capital Partners serves as the exclusive placement agent for the offering.
The Series A Warrants, priced at $1.30 per share, are immediately exercisable and will expire five years post-issuance. The Series B Warrants, with an exercise price of $1.10 per share, are also immediately exercisable but will expire 100 days after issuance. The offering is anticipated to close around October 14, 2024, contingent on customary closing conditions.
Net proceeds from the offering are slated for general corporate purposes, including working capital. This move comes after a shelf registration statement on Form S-3 was filed with the U.S. Securities and Exchange Commission on July 24, 2024, and declared effective on August 14, 2024.
The offering is made through a prospectus supplement and accompanying prospectus included in the shelf registration statement. These documents will be obtainable on the SEC's website upon filing.
Netlist is recognized for its innovation in memory and storage solutions, with patented technologies contributing to the advancement of artificial intelligence and computing. The company's strategic efforts are aimed at enhancing its intellectual property portfolio and market presence in a competitive industry landscape.
This news release also contains forward-looking statements regarding the intended use of the net proceeds and the expected closing date of the offering. These statements are subject to risks including potential delays in the closing and changes in market conditions.
The information provided is based on a press release statement from Netlist, Inc. It does not constitute an offer to sell or a solicitation of an offer to buy any securities, and no sales will occur in jurisdictions where such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
In other recent news, Netlist Inc. has experienced significant developments, including a considerable increase in Q2 2024 revenue, which reached $36.8 million. These earnings are largely attributed to two major legal victories and a robust product roadmap that focuses on AI memory technologies. The company won a $303 million patent infringement case against Samsung (KS:005930) and a $445 million case against Micron (NASDAQ:MU), both of which are anticipated to positively impact future earnings.
Netlist also announced the outcomes of its Annual Meeting of Stockholders, which included the re-election of Chun K. Hong to the company's Board of Directors and the ratification of Macias Gini & O'Connell LLP as its independent registered public accounting firm for the fiscal year ending December 28, 2024.
The company concluded Q2 with a cash balance of $36.4 million and forecasts a moderate increase in revenue for the next quarter. Despite the recent legal victories, it is anticipated that Micron will appeal the $445 million verdict. Netlist is also expecting significant market adoption of its flash-based CXL product, although this may still be one to two years away. These are some of the recent developments surrounding the company.
InvestingPro Insights
Netlist's recent securities offering comes at a time when the company is experiencing significant growth, as evidenced by InvestingPro data. The company's revenue growth stands at an impressive 63.46% over the last twelve months as of Q2 2024, with a remarkable quarterly revenue growth of 267.39% in Q2 2024. This robust growth trajectory aligns with Netlist's strategy to bolster its working capital and general corporate purposes through the $15 million offering.
Despite the strong top-line performance, Netlist faces profitability challenges. The company's adjusted operating income for the last twelve months as of Q2 2024 is -$18.48 million, with an operating income margin of -15.05%. This context underscores the importance of the current funding round in supporting Netlist's ongoing operations and growth initiatives.
An InvestingPro Tip highlights that Netlist's stock price is significantly below its 52-week high, currently at 46.46% of that peak. This could suggest potential upside for investors, especially considering the company's growth metrics and recent capital raising efforts. Another InvestingPro Tip notes that analysts have set a fair value of $4 for Netlist's stock, substantially higher than its previous closing price of $1.38.
For investors seeking a deeper understanding of Netlist's financial health and market position, InvestingPro offers 13 additional tips, providing a comprehensive analysis to inform investment decisions in this dynamic tech company.
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