On November 21, 2011, Netlist, Inc. (the "Company") entered into a Sales Agreement (the "Sales Agreement") with Ascendiant Capital Markets, LLC (the "Sales Agent"). Pursuant to the Sales Agreement, the Company may offer and sell shares of its common stock (the "Shares") having an aggregate offering price of up to $10,000,000, from time to time through the Sales Agent. The sales, if any, of the Shares under the Sales Agreement will be made in "at the market" offerings as defined in Rule 415 of the Securities Act of 1933 (the "Securities Act"), including sales made directly on the NASDAQ Global Market, on any other existing trading market for the Shares or to or through a market maker.
The Shares sold in the offering will be issued pursuant to the Company's effective shelf registration statement on Form S-3 (Registration No. 333-177118) previously filed with the Securities and Exchange Commission (the "SEC"), in accordance with the provisions of the Securities Act, as supplemented by a prospectus supplement dated November 22, 2011, which the Company filed with the SEC pursuant to Rule 424(b)(5) under the Securities Act.
The Sales Agent is not required to sell any specific number or dollar amount of Shares but will use its reasonable efforts, as the Company's agent and subject to the terms of the Sales Agreement, to sell the Shares offered, as instructed by the Company. Actual sales of Shares will depend on a variety of factors to be determined by the Company from time to time, including (among others) market conditions, the trading price of the Company's common stock and determinations by the Company as to the appropriate sources of funding for the Company.
The Sales Agreement provides that the Company will pay the Sales Agent a fee, not to exceed, in the aggregate, 3.5% of the gross sales price of any Shares sold through the Sales Agent. The Sales Agreement contains customary representations, warranties and agreements of the Company and the Sales Agent and customary conditions to completing future sale transactions, indemnification rights and obligations of the parties and termination provisions.
The Company intends to use the net proceeds from any sales of Shares in the offering for general corporate purposes. The Company's management will have significant flexibility in applying the net proceeds of this offering. Until the funds are used as described above, the Company intends to invest the net proceeds from this offering in interest-bearing, investment grade securities.
This Current Report on Form 8-K shall not constitute an offer to sell or a solicitation of an offer to buy any Shares, nor shall there be any sale of the Shares in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
