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Friday, March 24, 2023

Netlist, Inc. (OTCMKTS: NLST) Powerful Runner as DRAM Patent Battles Heat up in Texas (More on Q4 Year End Results & 912 Seminal Patent)

Netlist, Inc. (OTCMKTS: NLST) continues to move higher with power rocketing up towards $3 per share and leading the OTCQB most active list on several million USD in dollar volume per day. The Company will report its financial results for the fourth quarter and full year ended December 31, 2022, before 9:30 a.m. Eastern Time Tuesday Morning. Management will also host a conference call at 12:00 p.m. Eastern Time. NLST has a storied history of big moves skyrocketing to over $10 per share with virtually the same share structure as it has now during summer 2021.   

As Netlist’s revenues continue to rise exponentially recently topping the $150 million per year mark, the Company has three pending patent battles against Google, Samsung, Micron; of which the latter two are both in Texas (6 DRAM patents) similar to the $640 million patent case against sk hynix. In December Netlist won the markman hearing against Samsung with the trial date set for mid-April. As Netlist continues to WIN, the upside is enormous as the aggregate of the multiple infringement lawsuits Netlist is pursuing could very well yield among the largest patent infringement settlements in history and we could see multiple resolutions in 2023. More on that below. We will be updating on NLST when more details emerge so make sure you are subscribed to newsytrends.com by entering your email below. 

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Netlist, Inc. (OTCMKTS: NLST) headquartered in Irvine, California,  Netlist provides high-performance solid state drives and modular memory solutions to enterprise customers in diverse industries. The Company’s NVMe SSDs in various capacities and form factors and the line of custom and specialty memory products bring industry-leading performance to server and storage appliance customers and cloud service providers. Netlist licenses its portfolio of intellectual property including patents, in server memory, hybrid memory and storage class memory, to companies that implement Netlist’s technology. 

Netlist holds a valuable intellectual property portfolio with at least 130 patents issued and pending U.S. and foreign patents, many seminal, in the areas of hybrid memory, storage class memory, rank multiplication and load reduction. The Company developed its portfolio of patents over many years of bringing disruptive new products to market. With state-of-the-art, wholly owned, ISO- and OSHAS-certified manufacturing and testing facilities in Suzhou, China, Netlist’s strategy is to leverage its unique board-level intellectual property with a thorough understanding of semiconductor building blocks and system-level applications to deliver performance, cost, and time-to-market advantages to OEMs. Netlist invented the NVDIMM almost a decade ago and since then, it has shipped over 500,000 units, more than every other supplier combined. Netlist holds over 27 issued and pending patents on the technology, many of which are seminal covering the fundamental architecture of NVDIMM.  

The Company is led by CEO C.K. Hong, who brings over two decades of high-tech management experience to Netlist. He most recently served as President of Infinilink, a DSL equipment manufacturer, and as executive vice president of Viking Components, Inc. Prior to that, he spent 15 years with LG where he held various senior management positions in the U.S and Korea. Netlist is doing big numbers after experiencing exponential growth over the past few years; in Q3, 2022 Netlist reported revenues of $34.4 million up 29% over $26.7 million for the same period last year as the Company continued to execute on both its product and licensing strategies. Year to date revenues in Q3 were $140 million compared to $66 million for the same period in 2021.

Netlist | LinkedInAs Netlist product sales continue to see exponential growth, the other more exciting part of the Company’s business is its patent infringement lawsuits against Samsung, Micron, Google and others such as MPWR. The financial prospects of Netlist patent infringement lawsuits are so significant many have said they could potentially rival some of the biggest in history such as Intel vs VLSI Technology (2021) – $2.18 Billion and Pfizer vs Teva Pharmaceuticals (TEVA) & Sun Pharma (2013) – $2.15B. In June 2020 Netlist was victorious in a 12-year battle in the patent courts against Google. A 3-judge panel at the US court of appeals, in a unanimous rule 36 decision, upheld the decision of the lower court and found in favor of Netlist. Google “Waived” their appeal rights to SCOTUS and the 912 patent was reissued with 78 claims upheld.  

Following that NLST won against SK Hynix in a deal that included a $40 million signing bonus, a $600 million dollar supply agreement at advantageous terms, a patent sharing agreement that gives netlist access to Hynix portfolio of 5000 patents free of charge, and now Hynix is Netlists partner. Also, Netlist won an important court decision in their favor in the Google case however as Samsung had supplied the patent-infringing memory modules to Google, the Judge decided things could wait while the court in the Netlist-Samsung case decided if Samsung had violated Netlist’s patent. More recently Samsung filed an amended complaint against Netlist which was dismissed and as the Company stated: “The partial dismissal means Samsung cannot pursue a separate action on the patents Netlist first asserted in Texas, and now cannot carry out its alleged obligation to protect Google from the ‘912 Patent in Delaware.”   

On December 16, NLST announced the United States District Court for the Eastern District of Texas (the Court) issued a claim construction order in Netlist’s Texas action against Samsung (Netlist, Inc. v. Samsung Electronics Co. Ltd., et. al., EDTX Case No. 2:21-cv-00463-JRG). The Court held the claim construction hearing on November 4, 2022, largely adopting Netlist’s arguments for a number of important claim terms at issue. Following those arguments, the Court acted in alignment with its tentative ruling when issuing the final written Order. The case is currently set for a pretrial conference on March 27, 2023, with the jury trial beginning on May 1, 2023. Netlist plunged 40% over two days in October after the Samsung ‘912 IPR patent trial was instituted. The Patent Trial and Appeal board ruled that there’s a reasonable likelihood that Samsung will be able to establish that claim 16 of the ‘912 patent is invalid. However, it now looks as if Netlist will win this case.

From the article at IAM from 6 Jan: “USPTO Director Kathi Vidal has greeted the turn of the year with a flurry of director review decisions on inter parties reviews of cases including VLSI and Netlist. Just this week, Vidal issued a sua sponte director review in response to Netlist’s request that a precedential opinion panel look at a Samsung IPR instituted in November. In doing so, she also stayed the underlying IPR proceedings. The case involves Netlist’s memory module decoder patent 7,619,912 C1. Netlist CEO Chun K Hong told IAM in an interview that the ’912 patent has survived seemingly “endless scrutiny”, adding that, since the America Invents Act came into effect in 2012, it was found valid by an examiner (twice), confirmed valid by the PTAB (twice), and ultimately found valid by the Federal Circuit in 2020. Despite those claims, Samsung’s latest IPR was instituted. The patent could involve revenue from memory products in the tens of billions of dollars, according to Hong. 

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The NLST road map to fruition…………Litigation Roadmap Feb 15th 2023 (rev 25) 

On the Reddit subreddit NLST u/HedgeAppleJoe posted:  

This is everything that has to be done in the 463 Case in Texas before April 17th. Wow!! Maybe Samsung will sharpen their pencil and settle. 

February 13, 2023, No Change Serve Pretrial Disclosures (Witness List, Deposition Designations, and Exhibit List) by the Party with the Burden of Proof Case 2:21-cv-00463-JRG Document 236 Filed 02/10/23 Page 3 of 5 PageID #: 31010-4 

February 17, 2023, No Change *Response to Dispositive Motions (including Daubert Motions). Responses to dispositive motions that were filed prior to the dispositive motion deadline, including Daubert Motions, shall be due in accordance with Local Rule CV- 7(e), not to exceed the deadline as set forth in this Docket Control Order. Motions for Summary Judgment shall comply with Local Rule CV-56. 

February 27, 2023, No Change Serve Objections to Pretrial Disclosures; and Serve Rebuttal Pretrial Disclosures 

March 6, 2023, No Change Serve Objections to Rebuttal Pretrial Disclosures 

March 10, 2023, No Change File Motions in Limine. The parties shall limit their motions in limine to issues that if improperly introduced at trial would be so prejudicial that the Court could not alleviate the prejudice by giving appropriate instructions to the jury. 

March 13, 2023, No Change *File Notice of Request for Daily Transcript or Real Time Reporting. If a daily transcript or real time reporting of court proceedings is requested for trial, the party or parties making said request shall file a notice with the Court and e-mail the Court Reporter, Shawn McRoberts, at shawn_mcroberts@txed.uscourts.gov. 

March 20, 2023, No Change *Notify Court of Agreements Reached During Meet and Confer The parties are ordered to meet and confer on any outstanding objections or motions in limine. The parties shall advise the Court of any agreements reached no later than 1:00 p.m. three (3) business days before the pretrial conference. 

March 20, 2023, No Change *File Joint Pretrial Order, Joint Proposed Jury Instructions, Joint Proposed Verdict Form, Responses to Motions in Limine, Updated Exhibit Lists, Updated Witness Lists, and Updated Deposition Designations 

(This date was Changed and moved up from April 3rd) March 20, 2023*If a juror questionnaire is to be used, an editable (in Microsoft Word format) questionnaire shall be jointly submitted to the Deputy Clerk in Charge by this date. 

(This date was changed and moved up from May 1st to) April 17, 2023, Jury Selection – 9:00 a.m. in Marshall, Texas 

On February 14 Netlist announced it will report its financial results for the fourth quarter and full year ended December 31, 2022, before 9:30 a.m. Eastern Time on Tuesday, February 21, 2023. Netlist will host a conference call at 12:00 p.m. Eastern Time on February 21, 2023. Netlist encourages participants to pre-register for the conference call. Callers who pre-register will be given a unique PIN to gain immediate access to the call and bypass the live operator. To pre-register, click here. For those who would like to join the call but have not pre-registered, they can do so by dialing +1 (412) 317-5443 and requesting the “Netlist Conference Call.” A live webcast and archived replay of the call can be accessed in the Investor’s section of Netlist’s website.

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Currently trading at a $500 million market valuation NLST os is 233,663,197 shares outstanding. Netlist has a strong balance sheet with $43 million in cash and restricted cash, $77 million in assets vs. $38 million in liabilities and the Company does not dilute the stock. Netlist has been reporting one record breaking quarter after another as the Company’s semiconductor business has more than doubled over the past year. The upside on Netlist is enormous as the aggregate of the multiple infringement lawsuits Netlist is pursuing could very well yield among the largest patent infringement settlements in history and we could see multiple resolutions in 2023. We will be updating on NLST when more details emerge so make sure you are subscribed to newsytrends.com by entering your email below.

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Disclosure: we hold no position in NLST either long or short and we have not been compensated for this article.

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  1. Great snapshot of where this company is right now. The short-term prospects appear to be outstanding, but the long-term prospects might be even better. Netlist has proven they develop cutting edge technology and they continue to bolster their engineering expertise and collaborative agreements with other market leaders. Absolutely great future ahead!


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