Netlist (NLST) - Samsung settlement (8/5/26) and what comes next

SAMSUNG: https://www.reuters.com/world/asia-pacific/netlist-samsung-settle-patent-disputes-new-five-year-memory-deal-2026-08-05/ https://www.sec.gov/ix?doc=/Archives/edgar/data/1282631/000110465926090641/tm2622153d1\_8k.htm 5-year Global settlement and license signed August 5th: \- Samsung pays **$239mil** upfront gross (before fees, after fees \~$200mil) \- Quarterly royalties of up to **$32.9mil** gross (after fees \~$27.5mil/qr) \- Netlist may purchase up to **$300mil/year** of DRAM and NAND products for five years \- **ITC cooperation** agreement, where Samsung was the major defendent, now they will be actively cooperating with Netlist per the deal. \- **Samsung acquires 10mil** shares of netlist for a nominal cost, 5year staged lock up Samsung lost $303mil and $118mil to Netlist in 2 separate cases and was heading into an ITC evidentiary trial where it faced exclusion orders that would cut them out of the US market. 20days after ITC instituted a second investigation, Samsung settled. This is the first Netlist agreement with a recurring royalty. That's huge. That's structural change. Netlist moves from a litigation story into a contracted, near 100% margin income. The next 2 catalysts we are waiting on is re-licensing with SK Hynix and a settlement with Micron. SK Hynix: SK Hynix's 2021 agreement with Netlist was $40mil upfront, and a $600mil supply agreement over 5 years (Apprx. $120mil/yr supply for netlist). That deal ended April 2026 and we are awaiting a pending renewal. Both parties have continued the commercial relationship while a renewal is negotiated. The Samsung deal now sets a public benchmark for terms, reasonable to expect upfront cash, quarterly royalties, and a renewed supply component. Micron: May 2024 jury verdict: **$445,000,000**, with **willful infringement** found on both the '912 and '417 patents, exposing Micron to enhanced damages up to $1,340,000,000. The district court denied Micron's post-trial motions in June 2025; the appeal is pending at the Federal Circuit (case 2025-1936). Micron is now the only one of the big three without a license, and Samsung, formerly its co-defendant, is contractually obligated to assist Netlist in future ITC proceedings. Combined: (speculation) We are looking at upwards of $300-$450mil in upfront payment in cash, $170-$250mil in annual royalties, $400-$550mil in supply agreement, and possibly more equity stakes from Micron, Samsung, and SK Hynix. Netlist: Q2 2026 net income was $1,400,000 because IP legal fees hit $16,753,000, nearly double Q1's $8,974,000. With Samsung settled, that spend drops sharply. Royalty income is near 100% margin. The earnings picture changes fast.