IRVINE, Calif., April 17, 2017 /PRNewswire/ -- Netlist, Inc.
(NASDAQ: NLST) ("Netlist" or the "Company"), today announced that
its Board of Directors has adopted a short-term stockholder rights
agreement (the "Rights Agreement") under which its stockholders
will receive a dividend in the form of preferred stock purchase
rights (the "Rights"). The Board of Directors adopted the
Rights Agreement in connection with the Company's ongoing patent
infringement proceedings against SK hynix Inc., a South
Korean-based memory semiconductor supplier, in the U.S.
International Trade Commission and in the U.S. District Court for
the Central District of California. All rights issued under the
Rights Agreement will expire twelve months after the date of its
adoption or, if earlier, upon the final resolution of the SK hynix
proceedings.
C. K. Hong, Chairman of the
Company's Board of Directors, stated, "The purpose of this
short-term rights agreement is to disconnect the Company's current
market capitalization from any potential damages calculations and
settlement negotiations that may develop in connection with the
Company's patent infringement litigation against SK hynix. The
Board of Directors feels it is important to guard against any
coercive or unfair attempts to acquire the Company that may arise
in connection with the SK hynix proceedings and to ensure that all
stockholders have the opportunity to realize the long-term value of
their investment in the Company."
In general terms, the Rights restrict any person or group from
acquiring beneficial ownership of 15% or more of the Company's
outstanding common stock (including, for these purposes, certain
derivative securities) after the date of this announcement, which
may block or render more difficult a merger, tender offer or other
business combination or takeover attempt of the Company without the
support of the Netlist Board of Directors.
Pursuant to the Rights Agreement, one Right will be distributed
for each outstanding share of common stock held by stockholders of
record as of the close of business on May
18, 2017. Each Right entitles the holder to purchase a
unit (each, a "Unit") consisting of a fraction of a share of
the Company's Series A preferred stock having economic and voting
rights similar to one share of the Company's common stock. The
Rights will become exercisable only if a person or group (subject
to certain exceptions) acquires beneficial ownership of 15% or more
of the Company's common stock. In that situation, each holder of a
Right (other than the person or group triggering the exercise of
the Rights) will be entitled to purchase, at the then-current
exercise price, a number of Units (and, in certain circumstances,
other consideration) having a value of twice the exercise price of
the Right (a 50% discount). Subject to adjustment as set forth in
the Rights Agreement, the exercise price is $6.56 per Right, which equates to an aggregate
market value of the Company's outstanding securities, assuming full
exercise or conversion of all outstanding derivative securities, of
approximately $500 million.
Stockholders are not required to take any action to receive the
distribution of their Rights. Until the Rights become exercisable,
they will not be evidenced by separate certificates and will trade
automatically with shares of the Company's common stock. The
adoption of the Rights Agreement will not be a taxable event and
will not have any impact on the Company's financial reporting.
BRG Valuation Services, LLC is serving as financial advisor and
Morrison & Foerster LLP is serving as legal advisor to the
Company in connection with the Rights Agreement.
Further information about the Rights Agreement can be found in
the company's Current Report on Form 8-K filed with the Securities
and Exchange Commission on April 17,
2017 and in the "Summary of Rights" contained in the
"Investors" section of the Company's website, www.netlist.com.
About Netlist
Netlist is a leading provider of
high-performance modular memory subsystems serving customers in
diverse industries that require superior memory performance to
empower critical business decisions. Flagship products NVvault® and
EXPRESSvault® enable customers to accelerate data running through
their servers and storage and reliably protect enterprise-level
cache, metadata and log data by providing near instantaneous
recovery in the event of a system failure or power outage.
HybriDIMM™, Netlist's next-generation storage class memory product,
addresses the growing need for real-time analytics in Big Data
applications and in-memory databases. The Company holds a portfolio
of patents, many seminal, in the areas of hybrid memory, storage
class memory, rank multiplication and load reduction. Netlist is
part of the Russell Microcap® Index. To learn more, visit
www.netlist.com.
Safe Harbor Statement
This news release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are statements other than historical facts and often
address future events or the future performance of the Company.
Forward-looking statements contained in this news release include
statements about the Company's ongoing patent infringement
proceedings against SK hynix, including litigation and settlement
strategies, damages calculations and any connection or relationship
between these matters and the Company's market capitalization. All
forward-looking statements reflect management's present
expectations regarding future events and are subject to known and
unknown risks, uncertainties and other factors that could cause
actual results to differ materially from those expressed in or
implied by any forward-looking statements. These risks,
uncertainties and other factors include, among others: the status
of the SK hynix proceedings and the timeliness in which they will
progress; the status and progress of settlement negotiations in
connection with these proceedings, if any such negotiations
develop; SK hynix's strategy, plan or approach with respect to
these proceedings or any potential settlement thereof; risks
relating to the Company's business and general industry, economic,
political and market conditions that may impact its market
capitalization; risks associated with calculating damages in the
context of patent infringement proceedings; uncertainties regarding
the results of a settlement, adjudication or other resolution of
these proceedings, if any, which may produce damages or settlement
amounts that do not meet the Company's expectations or may not be
resolved in the Company's favor at all; and other risks associated
with litigation generally. These and other risks and
uncertainties are described in the Company's annual report on Form
10-K filed on March 31, 2017, and subsequent filings with the
U.S. Securities and Exchange Commission it makes from time to time.
Given these risks, uncertainties and other important factors, undue
reliance should not be placed on these forward-looking statements.
These forward-looking statements represent the Company's estimates
and assumptions only as of the date made, and except as required by
law, the Company undertakes no obligation to revise or update any
forward-looking statements for any reason.
For more information, please
contact:
Investors/Media:
Brainerd Communicators, Inc.
Mike Smargiassi
NLST@braincomm.com
(212) 986-6667
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SOURCE Netlist, Inc.