Netlist, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except per share amounts)

Three Months Ended

Six Months Ended

June 29,

June 30,

June 29,

June 30,

2019

2018

2019

2018

Net sales

$   5,512

$  8,426

$ 10,617

$ 17,305

Cost of sales(1)

5,108

7,944

9,934

16,444

Gross profit 

404

482

683

861

Operating expenses:

Research and development(1)

565

783

1,155

1,791

Intellectual property legal fees

1,093

1,388

2,588

3,599

Selling, general and administrative(1)

2,004

1,585

3,977

3,276

Total operating expenses

3,662

3,756

7,720

8,666

Operating loss

(3,258)

(3,274)

(7,037)

(7,805)

Other expense, net:

Interest expense, net

(258)

(133)

(530)

(280)

Other expense, net

(2)

(10)

(5)

Total other expense, net

(260)

(143)

(531)

(285)

Loss before provision for income taxes 

(3,518)

(3,417)

(7,568)

(8,090)

Provision for income taxes

1

—

1

—

Net loss

$ (3,519)

$ (3,417)

$ (7,569)

$ (8,090)

Net loss per common share:

Basic and diluted

$   (0.02)

$   (0.04)

$   (0.05)

$   (0.09)

Weighted-average common shares outstanding:

Basic and diluted

140,773

91,685

139,906

87,073

(1)  Amounts include stock-based compensation expense as follows:

Cost of sales

$          7

$         6

$        14

$        12

Research and development

45

56

96

136

Selling, general and administrative

145

111

429

266

Total stock-based compensation

$      197

$     173

$      539

$      414