05/06/2010 - Pursuant to an Order of the United States District Court for the Central District of California, Southern Division, a hearing will be held on September 30, 2010, at 8:30 a.m., before the Honorable David O. Carter, United States District Judge, at the United States District Court, Central District of California, Southern Division, Ronald Reagan Federal Building and United States Courthouse, 411 West Fourth Street, Santa Ana, California 92701, for the purpose of determining: (1) whether the proposed settlement of the claims in the Litigation against the Defendants for the sum of $2,600,000 in cash, plus accrued interest, should be approved by the Court as fair, reasonable, and adequate; (2) whether, thereafter, this Litigation should be dismissed with prejudice as set forth in the Stipulation of Settlement dated February 16, 2010 (the Stipulation ); (3) whether the Plan of Allocation is fair, reasonable, and adequate and therefore should be approved; and (4) whether the application of Lead Counsel for the payment of attorneys' fees and expenses incurred in connection with this Litigation should be approved.
10/09/2007 - The first action originally filed in the U.S. District Court for the Southern District of New York was transferred out to the U.S. District Court for the Central District of California in September 2007. The action was refiled in the Central District of California on October 9, 2007.</p>
<p align= justify >According to a press release dated May 28, 2007, Netlist, its underwriters, and certain of the Company’s officers and directors are charged with including, or allowing the inclusion of, materially false and misleading statements in the Registration Statement and Prospectus issued in connection with the IPO, in violation of the Securities Act of 1933.

The Complaint charges defendants with failing to conduct an adequate due diligence investigation into the Company prior to the IPO. In particular, the Complaint charges defendants with failing to reveal to shareholders, at the time of the IPO, that Netlist was already witnessing adverse effects of an oversaturated computer memory market. This, despite the fact that defendants knew or should have known that the Company had no strategy to allow it to minimize adverse market conditions, contrary to prior representations in road-show presentations to analysts and investors prior to the IPO, and media interviews immediately following the IPO.

On April 16, 2007, after the close of trading, the truth about Netlist was revealed, including the fact that the problems which existed at the time of the IPO would result in extremely disappointing results for the first quarter of 2007. Defendants admitted that the Company was performing well below guidance, that earnings would be almost 75% lower than previous forecasts, and that expenses were higher than expected. This, after defendants and other Company insiders liquidated over $6.5625 million of their personally held shares in connection with the IPO.

The complaint further alleges that as a result of this news, Netlist’s stock price collapsed the following trading day. Shares of Netlist fell almost 30% in a single trading day on huge volume of 1.783 million shares — falling to approximately $4.29 per share — and amounting to a decline of almost 40% compared to the November 2006 IPO Offering price, and a decline of almost 70% compared to Netlist’s trading period high of more than $12.00 per share.

Similar, purported class action complaints have also been filed in the U.S. District Court for the Central District of California on behalf of purchasers of Netlist, Inc.