NetList Inc (NLST)

[Sampall]

Here's your link to dilution starting on page 19 of Form DEF 14A filed on June 24th:

https://www.sec.gov/Archives/edgar/data/1282631/000104746920003838/a2241889zdef14a.htm

Background: Our Current Capitalization

As of June 9, 2020, with respect to our common stock, there were:

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176,481,802 shares issued and outstanding;
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13,010,012 shares issuable upon exercise of outstanding warrants, all of which were exercisable as of such date at exercise prices ranging from $0.11 per share to $1.00 per share;
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13,471,562 shares issuable upon conversion, at a conversion price of $1.25 per share, of $16,839,452 in outstanding principal and accrued interest as of such date under an outstanding convertible note;
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2,000,000 shares issuable upon exercise of an outstanding warrant, all of which will become exercisable at an exercise price of $0.30 per share upon our redemption of such convertible note;
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6,916,758 shares issuable upon exercise of outstanding stock options, 5,678,938 of which were exercisable as of such date;
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2,777,719 shares issuable upon vesting of outstanding restricted stock units;
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2,404,072 shares reserved for issuance pursuant to equity awards we may grant in the future under the Equity Plan, which amount is subject to annual increases pursuant to the terms of the Equity Plan; and
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21,250,025 shares and 33,221,115 shares reserved for issuance pursuant to the purchase agreements dated June 24, 2019 and March 5, 2020, respectively, between Netlist and Lincoln Park Capital Fund, LLC.
Based on the above capitalization information, only 28,466,935 shares of our currently authorized common stock remained unissued and unreserved and available for future issuance as of June 9, 2020.





Possible Adverse Effects if this Proposal No. 3 Is Approved

If this Proposal No. 3 is approved by our stockholders, the Board would generally be able to issue the additional authorized shares in its discretion from time to time without further action by or approval of our stockholders, subject to and as limited by the rules and listing requirements of the OTCQX or any other then applicable securities exchange and the requirements of all applicable law.

Approval of this Proposal No. 3 could have the following adverse effects:

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Increased Potential for Dilution. If approved, this Proposal No. 3 would result in our Board's ability to issue the newly authorized shares of our common stock in the future in its discretion and without obtaining further stockholder approval. Because our stockholders do not have preemptive rights with respect to our common stock, they would not have preferential rights to purchase any additional shares we may issue in the future. Consequently, any issuance of additional shares of our common stock that is not pro-rata among existing stockholders would increase the number of outstanding shares of our common stock and decrease the ownership interest of our existing stockholders, as well as their percentage interest in the voting power, liquidation value and book value of our common stock. Depending on the terms of any such issuance, this dilution could be significant. In particular, in light of the current low per share market price of our common stock, our stockholders may experience material and substantial dilution if we complete an equity financing in the near term. For example, assuming a sale price per share of $0.20, which was the closing sale price per share of our common stock as reported by OTCQX on June 9, 2020, and also assuming we complete an equity financing that involves our issuance and sale of shares of our common stock and no other securities (such as, for instance, warrants or convertible notes), we would need to issue and sell 50 million shares of our common stock in order to obtain gross proceeds of $10 million. However, because we do not
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