Netlist (NLST) 10-Q 10 Nov 20 2020 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Sep. 26, 2020	Nov. 05, 2020
Document And Entity Information [Abstract]
Entity Registrant Name	NETLIST INC
Entity Central Index Key	0001282631
Document Type	10-Q
Document Period End Date	Sep. 26, 2020
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Entity Current Reporting Status	Yes
Current Fiscal Year End Date	--01-02
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		195,951,317

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 26, 2020	Dec. 28, 2019
ASSETS
Cash and cash equivalents	$ 14,287	$ 8,966
Restricted cash	3,200	2,750
Accounts receivable, net of allowances of $255 (2020) and $61 (2019)	4,203	3,672
Inventories	4,521	3,496
Prepaid expenses and other current assets	297	627
Total current assets	26,508	19,511
Property and equipment, net	199	286
Operating lease right-of-use assets	218	968
Other assets	1,377	1,376
Total assets	28,302	22,141
LIABILITIES AND STOCKHOLDERS' DEFICIT
Accounts payable	8,053	9,134
Revolving line of credit	3,388	2,990
Accrued payroll and related liabilities	665	740
Accrued expenses and other current liabilities	454	793
Current portion of long-term debt and note payable	389	412
Total current liabilities	12,949	14,069
Long-term debt	16,426	15,793
Operating lease liabilities		498
Other liabilities	111	144
Total liabilities	29,486	30,504
Commitments and contingencies
Stockholders' deficit:
Preferred stock, $0.001 par value—10,000 shares authorized: Series A preferred stock, $0.001 par value; 1,000 shares authorized; none issued and outstanding
Common stock, $0.001 par value—450,000 shares authorized; 195,951 (2020) and 169,539 (2019) shares issued and outstanding	195	169
Additional paid-in capital	191,741	179,086
Accumulated deficit	(193,120)	(187,618)
Total stockholders' deficit	(1,184)	(8,363)
Total liabilities and stockholders' deficit	$ 28,302	$ 22,141

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 26, 2020	Dec. 28, 2019
Accounts receivable, allowance for doubtful accounts	$ 255	$ 61
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	450,000,000	450,000,000
Common stock, shares issued	195,951,000	169,539,000
Common stock, shares outstanding	195,951,000	169,539,000
Series A Preferred Stock
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	1,000,000	1,000,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Condensed Consolidated Statements Of Operations
Net sales	$ 10,212	$ 6,116	$ 35,749	$ 16,733
Cost of sales	8,875	5,666	30,477	15,600
Gross profit	1,337	450	5,272	1,133
Operating expenses:
Research and development	731	583	2,083	1,738
Intellectual property legal fees	784	979	2,257	3,567
Selling, general and administrative	1,816	1,747	5,994	5,724
Total operating expenses	3,331	3,309	10,334	11,029
Operating loss	(1,994)	(2,859)	(5,062)	(9,896)
Other expense, net:
Interest expense, net	(139)	(245)	(437)	(775)
Other expense, net	3	(4)	(2)	(5)
Total other expense, net	(136)	(249)	(439)	(780)
Loss before provision for income taxes	(2,130)	(3,108)	(5,501)	(10,676)
Provision for income taxes			1	1
Net loss	$ (2,130)	$ (3,108)	$ (5,502)	$ (10,677)
Net loss per common share:
Basic and diluted	$ (0.01)	$ (0.02)	$ (0.03)	$ (0.07)
Weighted-average common shares outstanding:
Basic and diluted	192,257	148,058	179,154	142,624

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Stockholders' Deficit - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Balance at Dec. 29, 2018	$ 139	$ 169,355	$ (175,166)	$ (5,672)
Balance, shares at Dec. 29, 2018	139,283
Stock-based compensation		342		342
Exercise of stock options		16		16
Exercise of stock options, shares	43
Restricted stock units vested and distributed, shares	340
Common stock issued on conversion of Iliad Note	$ 1	374		375
Common stock issued on conversion of Iliad Note (in shares)	1,042
Net loss			(4,050)	(4,050)
Balance at Mar. 30, 2019	$ 140	170,087	(179,216)	(8,989)
Balance, shares at Mar. 30, 2019	140,708
Balance at Dec. 29, 2018	$ 139	169,355	(175,166)	(5,672)
Balance, shares at Dec. 29, 2018	139,283
Net loss				(10,677)
Balance at Sep. 28, 2019	$ 154	173,979	(185,843)	(11,710)
Balance, shares at Sep. 28, 2019	154,097
Balance at Dec. 29, 2018	$ 139	169,355	(175,166)	(5,672)
Balance, shares at Dec. 29, 2018	139,283
Net loss				12,500
Balance at Dec. 28, 2019	$ 169	179,086	(187,618)	(8,363)
Balance, shares at Dec. 28, 2019	169,539
Balance at Mar. 30, 2019	$ 140	170,087	(179,216)	(8,989)
Balance, shares at Mar. 30, 2019	140,708
Stock-based compensation		197		197
Exercise of stock options		6		6
Exercise of stock options, shares	19
Tax withholdings related to net share settlements of equity awards (in shares)	(92)
Issuance of commitment shares	$ 1	(1)
Issuance of commitment shares (in shares)	818
Common stock issued on conversion of Iliad Note	$ 1	224		225
Common stock issued on conversion of Iliad Note (in shares)	724
Net loss			(3,519)	(3,519)
Balance at Jun. 29, 2019	$ 142	170,513	(182,735)	(12,080)
Balance, shares at Jun. 29, 2019	142,177
Stock-based compensation		243		243
Restricted stock units vested and distributed, shares	409
Tax withholdings related to net share settlements of equity awards		(39)		(39)
Tax withholdings related to net share settlements of equity awards (in shares)	(130)
Issuance of commitment shares	$ 8	2,449		2,457
Issuance of commitment shares (in shares)	8,394
Common stock issued on conversion of Iliad Note	$ 4	813		817
Common stock issued on conversion of Iliad Note (in shares)	3,247
Net loss			(3,108)	(3,108)
Balance at Sep. 28, 2019	$ 154	173,979	(185,843)	(11,710)
Balance, shares at Sep. 28, 2019	154,097
Balance at Dec. 28, 2019	$ 169	179,086	(187,618)	(8,363)
Balance, shares at Dec. 28, 2019	169,539
Stock-based compensation		206		206
Restricted stock units vested and distributed, shares	362
Tax withholdings related to net share settlements of equity awards		(32)		(32)
Tax withholdings related to net share settlements of equity awards (in shares)	(135)
Common stock issued on conversion of Iliad Note	$ 2	(2)
Common stock issued on conversion of Iliad Note (in shares)	1,529
Net loss			(1,542)	(1,542)
Balance at Mar. 28, 2020	$ 171	179,258	(189,160)	(9,731)
Balance, shares at Mar. 28, 2020	171,295
Balance at Dec. 28, 2019	$ 169	179,086	(187,618)	$ (8,363)
Balance, shares at Dec. 28, 2019	169,539
Exercise of stock options, shares				200
Net loss				$ (5,502)
Balance at Sep. 26, 2020	$ 195	191,741	(193,120)	(1,184)
Balance, shares at Sep. 26, 2020	195,951
Balance at Mar. 28, 2020	$ 171	179,258	(189,160)	(9,731)
Balance, shares at Mar. 28, 2020	171,295
Stock-based compensation		164		164
Tax withholdings related to net share settlements of equity awards		(10)		(10)
Tax withholdings related to net share settlements of equity awards (in shares)	(63)
Issuance of commitment shares	$ 10	2,751		2,761
Issuance of commitment shares (in shares)	9,781
Net loss			(1,830)	(1,830)
Balance at Jun. 27, 2020	$ 181	182,163	(190,990)	(8,646)
Balance, shares at Jun. 27, 2020	181,013
Stock-based compensation		212		212
Exercise of warrants	256
Exercise of stock options		28		28
Exercise of stock options, shares	200
Restricted stock units vested and distributed, shares	438
Tax withholdings related to net share settlements of equity awards		(61)		(61)
Tax withholdings related to net share settlements of equity awards (in shares)	(136)
Issuance of commitment shares	$ 14	9,399		9,413
Issuance of commitment shares (in shares)	14,180
Net loss			(2,130)	(2,130)
Balance at Sep. 26, 2020	$ 195	$ 191,741	$ (193,120)	$ (1,184)
Balance, shares at Sep. 26, 2020	195,951

Condensed Consolidated Statem_3

Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019
Cash flows from operating activities:
Net loss	$ (5,502)	$ (10,677)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	112	132
Interest accrued on convertible promissory notes	227	332
Amortization of debt discounts	159	401
Non-cash lease expense	385	417
Stock-based compensation	582	782
Changes in operating assets and liabilities:
Accounts receivable	(531)	429
Inventories	(1,025)	548
Prepaid expenses and other current assets	340	(7)
Accounts payable	(1,081)	(977)
Accrued payroll and related liabilities	(75)	(129)
Accrued expenses and other current liabilities	(505)	(483)
Net cash used in operating activities	(6,914)	(9,232)
Cash flows from investing activities:
Acquisition of property and equipment	(25)	(70)
Net cash used in investing activities	(25)	(70)
Cash flows from financing activities:
Net borrowings (repayments) under line of credit	398	(778)
Proceeds from issuance of long-term debt	637
Payments on note payable	(424)	(376)
Proceeds from issuance of common stock, net	12,174	2,457
Proceeds from exercise of stock options	28	22
Payments for taxes related to net share settlement of equity awards	(103)	(39)
Net cash provided by (used in) financing activities	12,710	1,286
Net change in cash, cash equivalents and restricted cash	5,771	(8,016)
Cash, cash equivalents and restricted cash at beginning of period	11,716	16,652
Cash, cash equivalents and restricted cash at end of period	$ 17,487	$ 8,636

Condensed Consolidated Statem_4

Condensed Consolidated Statements Of Cash Flows (Parenthetical) - USD ($) $ in Thousands	Sep. 26, 2020	Sep. 28, 2019
Reconciliation of cash, cash equivalents and restricted cash at end of period:
Cash and cash equivalents	$ 14,287	$ 6,386
Restricted cash	3,200	2,250
Cash, cash equivalents and restricted cash at end of period	$ 17,487	$ 8,636

Description of Business

Description of Business	9 Months Ended
	Sep. 26, 2020
Description of Business
Description of Business	Note 1—Description of Business Netlist, Inc. and its wholly-owned subsidiaries (collectively the “Company” or “Netlist”) provides high-performance modular memory subsystems to customers in diverse industries that require enterprise and storage class memory solutions to empower critical business decisions. The Company has a history of introducing disruptive new products, such as one of the first load-reduced dual in-line memory modules (“LRDIMM”) based on its distributed buffer architecture, which has been adopted by the industry for DDR4 LRDIMM. The Company was also one of the first to bring NAND flash memory (“NAND flash”) to the memory channel with its NVvault non-volatile dual in-line memory modules (“NVDIMM”) using software-intensive controllers and merging dynamic random access memory integrated circuits (“DRAM ICs” or “DRAM”) and NAND flash to solve data bottleneck and data retention challenges encountered in high-performance computing environments. The Company has introduced a new generation of storage class memory products called HybriDIMM to address the growing need for real-time analytics in Big Data applications, in-memory databases, high performance computing and advanced data storage solutions. The Company also resells NAND flash, DRAM products and other component products to end-customers that are not reached in the distribution models of the component manufacturers, including storage customers, appliance customers, system builders and cloud and datacenter customers. Due to the ground-breaking product development of its engineering teams, Netlist has built a robust portfolio of over 130 issued and pending U.S. and foreign patents, many seminal, in the areas of hybrid memory, storage class memory, rank multiplication and load reduction. Since its inception, the Company has dedicated substantial resources to the development, protection and enforcement of technology innovations it believes are essential to its business. The Company’s early pioneering work in these areas has been broadly adopted in industry-standard registered dual in-line memory module (“RDIMM”), LRDIMM and NVDIMM. Netlist’s objective is to continue to innovate in its field and invest further in its intellectual property portfolio, with the goal of monetizing its intellectual property through a combination of product sales and licensing, royalty or other revenue-producing arrangements, which may result from joint development or similar partnerships or defense of the Company’s patents through enforcement actions against parties it believes are infringing them. Netlist was incorporated in June 2000 and is headquartered in Irvine, California. The Company has established a manufacturing facility in the People’s Republic of China (“PRC”), which became operational in July 2007. The Company operates in one reportable segment, which is the design and manufacture of high-performance memory subsystems for the server, high-performance computing and communications markets. Liquidity The Company incurred net loss of $2.1 million and $5.5 million for the three and nine months ended September 26, 2020 and $12.5 million and $17.1 million for the fiscal years ended December 28, On June 24, 2019, the Company entered into a purchase agreement (the “2019 Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which the Company has the right to sell to Lincoln Park up to an aggregate of $10 million in shares of its common stock over the 36-month term of the 2019 Purchase Agreement subject to the conditions and limitations set forth in the 2019 Purchase Agreement (see Note 8). On March 5, 2020, the Company entered into another purchase agreement (the “2020 Purchase Agreement”) with Lincoln Park, pursuant to which the Company has the right to sell to Lincoln Park up to an aggregate of $20 million in shares of its common stock over the 36-month term of the 2020 Purchase Agreement subject to the conditions and limitations set forth in the 2020 Purchase Agreement (see Note 8). On April 23, 2020, the Company entered into an unsecured promissory note with a principal amount of $0.6 million through Hanmi Bank under the Paycheck Protection Program (“PPP”) (“PPP Loan”) administered by the Small Business Administration (“SBA”) and established as part of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) (see Note 5). Inadequate working capital would have a material adverse effect on the Company’s business and operations and could cause the Company to fail to execute its business plan, fail to take advantage of future opportunities or fail to respond to competitive pressures or customer requirements. A lack of sufficient funding may also require the Company to significantly modify its business model and/or reduce or cease its operations, which could include implementing cost-cutting measures or delaying, scaling back or eliminating some or all of its ongoing and planned investments in corporate infrastructure, research and development projects, business development initiatives and sales and marketing activities, among other activities. While the Company’s estimates of its operating revenues and expenses and working capital requirements could be incorrect and the Company may use its cash resources faster than it anticipates, management believes the Company’s existing cash balance together with cash receipts from revenues, borrowing availability under a bank credit facility (see Note 4), funds available to be raised from the Lincoln Park arrangements (see Note 8) and funds raised through the debt and equity offerings, will be sufficient to meet the Company’s anticipated cash needs for at least the next 12 months.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 26, 2020
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	Note 2—Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ended December 28, 2019, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 10, 2020 (the “2019 Annual Report”). In the opinion of management, all adjustments for the fair presentation of the Company’s condensed consolidated financial statements have been made. The adjustments are of a normal recurring nature except as otherwise noted. The results of operations for the interim periods are not necessarily indicative of the results to be expected for other periods or the full fiscal year. The Company has evaluated events occurring subsequent to September 26, 2020, through the filing date of this Quarterly Report on Form 10-Q and concluded that there were no events that required recognition and disclosures, other than those discussed elsewhere in the notes hereto. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Netlist, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Fiscal Year The Company’s fiscal year is the 52- or 53-week period that ends on the Saturday nearest to December 31. The Company’s fiscal year 2020 will include 53 weeks and ends on January 2, 2021 and its fiscal year 2019 included 52 weeks and ended on December 28, 2019. The first three quarters of fiscal year 2020 each includes 13 weeks and the fourth quarter includes 14 weeks. The four quarters of fiscal year 2019 each included 13 weeks. Unless otherwise stated, references to particular years, quarters, months and periods refer to the Company’s fiscal years ended in January or December and the associated quarters, months and periods of those fiscal years. Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results may differ materially from those estimates. Recently Adopted Accounting Guidance In the first quarter of 2020, the Company adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) (“ASU 2018-15”), which amends the accounting for implementation, setup, and other upfront costs in a hosting arrangement that is a service contract. The adoption of ASU 2018-15 did not have an impact on the Company’s condensed consolidated financial statements. In the first quarter of 2020, the Company adopted FASB ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which removes, modifies, and adds various disclosure requirements on fair value measurements in Topic 820. The adoption of ASU 2018-13 did not have an impact on the Company’s condensed consolidated financial statements. Recently Issued Accounting Guidance In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes , which eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. This ASU also clarifies and simplifies other aspects of the accounting for income taxes. The ASU will be effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years and early adoption is permitted. Certain amendments of this ASU may be adopted on a retrospective basis, modified retrospective basis or prospective basis. The Company is currently evaluating the impact this guidance will have on its condensed consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity . This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity's own equity, and also improves and amends the related earnings per share guidance for both Subtopics. The ASU will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years and early adoption is permitted. The Company is currently evaluating the impact this guidance will have on its condensed consolidated financial statements. Fair Value Measurements The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. The Company categorizes each of its fair value measurements in one of those three levels based on the lowest level input that is significant to the fair value measurement in its entirety. · Level 1 – inputs are based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis. · Level 2 – inputs are based on quoted prices of similar instruments in active markets, quoted prices for identical or similar instruments in market that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3 – inputs are generally unobservable inputs for the asset or liability, which are typically based on management’s estimates of assumptions that market participants would use in pricing the assets and liabilities. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. The Company’s financial instruments consist principally of cash and cash equivalents, restricted cash, a revolving line of credit, PPP Loan and convertible promissory notes. Cash equivalents consist of short-term investments with original maturities of three months or less and restricted cash consists of cash to secure standby letters of credit (see Note 4). The carrying value of these instruments approximates their fair value due to their short-term nature. The fair value of the revolving line of credit, the PPP Loan and convertible promissory note is estimated by using current applicable rates for similar instruments as of the balance sheet date and an assessment of the credit rating. The carrying value of the revolving line of credit as of September 26, 2020 and December 28, 2019 and the PPP Loan as of September 26, 2020 approximates fair value because the interest rate yield is near current market rates for comparable debt instruments. The fair value of the convertible promissory note is estimated by using a discounted cash flow analysis using borrowing rates available to the Company for debt instruments with similar terms and maturities and is classified in Level 2 of the valuation hierarchy. The carrying value and estimated fair value of the secured convertible promissory note as of September 26, 2020 were $14.7 million and $12.2 million, respectively. The carrying value and estimated fair value of the secured convertible promissory note as of December 28, 2019 were $14.6 million and $11.7 million, respectively. Other Significant Accounting Policies The Company’s other significant accounting policies were reported in the 2019 Annual Report and have not changed materially from the policies previously reported.

Supplemental Financial Informat

Supplemental Financial Information	9 Months Ended
	Sep. 26, 2020
Supplemental Financial Information
Supplemental Financial Information	Note 3—Supplemental Financial Information Inventories Inventories consisted of the following (in thousands): September 26, December 28, 2020 2019 Raw materials $ 911 $ 1,052 Work in process 20 25 Finished goods 3,590 2,419 $ 4,521 $ 3,496 Net Loss Per Share The following table shows the computation of basic and diluted net loss per share of common stock (in thousands, except per share data): Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Numerator: Net loss $ (2,130) $ (3,108) $ (5,502) $ (10,677) Denominator: Weighted-average common shares outstanding—basic and diluted 192,257 148,058 179,154 142,624 Net loss per share—basic and diluted $ (0.01) $ (0.02) $ (0.03) $ (0.07) The table below shows potentially dilutive weighted average common share equivalents, consisting of shares issuable upon the exercise of outstanding stock options and warrants using the treasury stock method, shares issuable upon conversion of the SVIC Note and the Iliad Note (see Note 5) using the “if-converted” method, and the vesting of restricted stock awards (“RSAs”) and restricted stock units (“RSUs”). These potential weighted average common share equivalents have been excluded from the diluted net loss per share calculations above as their effect would be anti-dilutive (in thousands): Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Weighted average common share equivalents 14,278 16,120 13,526 16,212 Disaggregation of Net Sales The following table shows disaggregated net sales by major source (in thousands): Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Resales of third-party products $ 6,883 $ 5,180 $ 24,146 $ 13,725 Sale of the Company's modular memory subsystems 3,329 936 11,603 3,008 Total net sales $ 10,212 $ 6,116 $ 35,749 $ 16,733 Major Customers and Products The Company’s net sales have historically been concentrated in a small number of customers. The following table sets forth the percentage of net sales made to customers that each comprise 10% or more of total net sales: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Customer A * * Customer B * Customer C * * * * As of September 26, 2020, four customers represented 27%, 19%, 11% and 10% of aggregate gross receivables, respectively. As of December 28, 2019, one customer represented approximately 25% of aggregate gross receivables. The loss of the significant customers or a reduction in sales to or difficulties collecting payments from these customers could significantly reduce the Company’s net sales and adversely affect its operating results. The Company mitigates risks associated with foreign receivables by purchasing comprehensive foreign credit insurance. The Company resells certain component products to end-customers that are not reached in the distribution models of the component manufacturers, including storage customers, appliance customers, system builders and cloud and datacenter customers. For the three and nine months ended September 26, 2020, resales of these products represented approximately 67% and 68% of net sales, respectively. For the three and nine months ended September 28, 2019, they represented approximately 85% and 82% of net sales, respectively. Cash Flow Information The following table sets forth supplemental disclosure of non-cash financing activities: Nine Months Ended September 26, September 28, 2020 2019 Common stock issued on conversion of convertible note payable and accrued interest $ — $ 1,417

Credit Agreements

Credit Agreements	9 Months Ended
	Sep. 26, 2020
Credit Agreements
Credit Agreements	Note 4—Credit Agreement On October 31, 2009, the Company and Silicon Valley Bank (“SVB”) entered into a credit agreement (as the same may from time to time be amended, modified, supplemented or restated, the “SVB Credit Agreement”), which provides for a revolving line of credit up to $5.0 million. The borrowing base is limited to 85% of the eligible accounts receivable, subject to certain adjustments. As of September 26, 2020, the borrowings under the SVB Credit Agreement bear interest based on the Wall Street Journal “prime rate” plus 2.75% and mature on April 30, 2021. The SVB Credit Agreement requires letters of credit to be secured by cash, which is classified as restricted cash in the accompanying condensed consolidated balance sheets. As of September 26, 2020 and December 28, 2019, (i) outstanding letters of credit were $3.2 million and $2.8 million, respectively, (ii) outstanding borrowings were $3.4 million and $3.0 million, respectively, and (iii) availability under the revolving line of credit was $0.1 million and $0.2 million, respectively. On April 12, 2017, the Company and SVB entered into an amendment to the SVB Credit Agreement to, among other things, obtain SVB’s consent in connection with the Company’s rights agreement with Computershare Trust Company, N.A., as rights agent (see Note 8), and make certain administrative changes in connection with the Company’s funding arrangement with TR Global Funding V, LLC, an affiliate of TRGP Capital Management, LLC (“TRGP”) (see Note 7). For all periods before April 20, 2017, all obligations under the SVB Credit Agreement were secured by a first priority security interest in the Company’s tangible and intangible assets, other than its patent portfolio, which was subject to a first priority security interest held by Samsung Venture Investment Co.(“SVIC”) (see Note 5). Certain of these lien priorities were modified in April and May 2017 in connection with the Company’s establishment of a funding arrangement with TRGP for certain of the Company’s litigation expenses in connection with certain of its legal proceedings against SK hynix, Inc, a South Korean memory semiconductor supplier (“SK hynix”). On May 3, 2017, TRGP entered into an intercreditor agreement with each of SVIC and SVB, and on April 20, 2017, SVIC and SVB entered into an intercreditor agreement with each other (such intercreditor agreements, collectively, the “Intercreditor Agreements”). Pursuant to the terms of the Intercreditor Agreements, SVB’s security interests in the Company’s assets have been modified as follows: SVB has a first priority security interest in all of the Company’s tangible and intangible assets other than its patent portfolio and its claims underlying and any proceeds it may receive from the SK hynix proceedings; a second priority security interest in the Company’s patent portfolio other than the patents that are the subject of the SK hynix proceedings; and a third priority security interest in the Company’s patents that are the subject of the SK hynix proceedings (see Note 7). The SVB Credit Agreement subjects the Company to certain affirmative and negative covenants, including financial covenants with respect to the Company’s liquidity and restrictions on the payment of dividends. As of September 26, 2020, the Company was in compliance with its covenants under the SVB Credit Agreement.

Debt

Debt	9 Months Ended
	Sep. 26, 2020
Debt
Debt	Note 5—Debt The Company’s debt consisted of the following (in thousands): September 26, December 28, 2020 2019 Secured convertible note, due December 2021, including accrued interest of $1,457 (2020) and $1,233 (2019), respectively $ 16,457 $ 16,233 Paycheck protection program loan, due April 2022, including accrued interest of $2 639 — Notes payable — 412 Unamortized debt discounts and issuance costs (281) (440) 16,815 16,205 Less: current portion (389) (412) $ 16,426 $ 15,793 Secured Convertible Note On November 18, 2015, in connection with entering into the JDLA with Samsung, the Company issued to SVIC a secured convertible note (“SVIC Note”) and stock purchase warrant (“SVIC Warrant”). The SVIC Note has an original principal amount of $15.0 million, accrues interest at a rate of 2.0% per year, is due and payable in full on December 31, 2021, and is convertible into shares of the Company’s common stock at a conversion price of $1.25 per share, subject to certain adjustments, on the maturity date of the SVIC Note. Upon a change of control of the Company prior to the maturity date of the SVIC Note, the SVIC Note may, at the Company’s option, be assumed by the surviving entity or be redeemed upon the consummation of such change of control for the principal and accrued but unpaid interest as of the redemption date. The SVIC Warrant grants SVIC a right to purchase 2,000,000 shares of the Company’s common stock at an exercise price of $0.30 per share, subject to certain adjustments, is only exercisable in the event the Company exercises its right to redeem the SVIC Note prior to its maturity date, and expires on December 31, 2025. The SVIC Warrant was valued at $1.2 million, based on its relative fair value, and was recorded as a debt discount. The Company also recorded $0.2 million of debt issuance costs as a debt discount for professional services fees rendered in connection with the transaction. These amounts are being amortized to interest expense over the term of the SVIC Note using the interest method. For the three and nine months ended September 26, 2020, interest expense related to the amortization of the issuance costs associated with the liability component was not material. The effective interest rate, including accretion of the SVIC Note to par and amortization of debt issuance costs, was approximately 3.4%. As of September 26, 2020, the outstanding principal and accrued interest on the SVIC Note was $16.5 million, and the outstanding SVIC Note balance, net of unamortized debt discounts and issuance costs, was $16.2 million. In connection with the SVIC Note, SVIC was granted a first priority security interest in the Company’s patent portfolio and a second priority security interest in all of the Company’s other tangible and intangible assets. Upon issuance of the SVIC Note, the Company, SVB and SVIC entered into an Intercreditor Agreement pursuant to which SVB and SVIC agreed to their relative security interests in the Company’s assets. In May 2017, SVIC, SVB and TRGP entered into additional Intercreditor Agreements to modify certain of these lien priorities (see Note 7). Additionally, upon issuance of the SVIC Note and the SVIC Warrant, the Company and SVIC entered into a Registration Rights Agreement pursuant to which the Company is obligated to register with the Securities and Exchange Commission, upon demand by SVIC, the shares of the Company’s common stock issuable upon conversion of the SVIC Note or upon exercise of the SVIC Warrant. The SVIC Note subjects the Company to certain affirmative and negative operating covenants. As of September 26, 2020, the Company was in compliance with its covenants under the SVIC Note. Unsecured Convertible Note On August 27, 2018, the Company entered into a Securities Purchase Agreement with Iliad Research and Trading, L.P. (“Iliad”) (the “Iliad Purchase Agreement”), pursuant to which the Company issued a convertible promissory note in the principal amount of $2.3 million (“Iliad Note”) with an original issue discount of $0.2 million. The Iliad Note bore interest at an annual rate of 8% and would mature on August 27, 2020, unless earlier repurchased, redeemed or converted in accordance with its terms. During the year ended December 28, 2019, Iliad fully-converted the outstanding principal and accrued interest on the Iliad Note to shares of the Company’s common stock as follows: (1) $1.9 million of the outstanding principal and accrued interest on the Iliad Note to 7,778,270 shares of the Company’s common stock at the Redemption Conversion Price and (2) $0.5 million of the outstanding principal and accrued interest on the Iliad Note to 1,388,890 shares of the Company’s common stock at the Lender Conversion Price. As a result of these conversions, as of December 28, 2019, there were no outstanding principal and accrued interest on the Iliad Note. Paycheck Protection Program Loan On April 23, 2020, the Company entered into the PPP Loan with a principal amount of $0.6 million through Hanmi Bank under the PPP administered by the SBA and established as part of the CARES Act. The PPP Loan bears interest at 1.0% per annum and matures on April 23, 2022 with the first six months of interest and principal payments deferred. The amount borrowed under the PPP Loan is guaranteed by the SBA and is eligible for forgiveness in an amount equal to the sum of the eligible costs, including payroll, benefits, rent and utilities, incurred by the Company during the 24-week period beginning on the date the Company received the proceeds. The PPP Loan contains customary events of default, and the occurrence of an event of default may result in a claim for the immediate repayment of all amounts outstanding under the PPP Loan.

Leases

Leases	9 Months Ended
	Sep. 26, 2020
Leases
Leases	Note 6—Leases The Company has operating and finance leases primarily associated with office and manufacturing facilities and certain equipment. The determination of which discount rate to use when measuring the lease obligation was deemed a significant judgment. Lease cost and supplemental cash flow information related to operating leases was as follows (in thousands): Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Lease cost Operating lease cost $ 141 $ 158 $ 446 $ 476 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases 141 155 442 450 Right-of-use assets obtained in exchange for lease obligations Finance leases — — — 96 Lease modification to decrease ROU assets — — 365 — For the three and nine months ended September 26, 2020 and September 28, 2019, finance lease costs and cash flows from finance lease were immaterial. Supplemental balance sheet information related to leases was as follows: September 26, December 28, (in thousands) 2020 2019 Operating Leases Operating lease right-of-use assets $ 218 $ 968 Accrued expenses and other current liabilities $ 235 $ 511 Operating lease liabilities — 498 Total operating lease liabilities $ 235 $ 1,009 Finance Leases Property and equipment, at cost $ 96 $ 96 Accumulated depreciation (29) (14) Property and equipment, net $ 67 $ 82 Accrued expenses and other current liabilities $ 19 $ 18 Other long-term liabilities 51 65 Total finance lease liabilities $ 70 $ 83 Weighted Average Remaining Lease Term (in years) Operating lease 0.6 2.1 Finance lease 3.5 4.3 Weighted Average Discount Rate Operating lease Finance lease Maturities of lease liabilities as of September 26, 2020 were as follows (in thousands): Fiscal Year Operating Leases Finance Leases 2020 (remaining 3 months) $ 120 $ 6 2021 120 22 2022 — 22 2023 — 22 2024 — 5 Total lease payments 240 77 Less: imputed interest (5) (7) Total $ 235 $ 70

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 26, 2020
Commitments and Contingencies
Commitments and Contingencies	Note 7—Commitments and Contingencies TRGP Agreement and Related Intercreditor Agreements On May 3, 2017, the Company and TRGP entered into an investment agreement (the “TRGP Agreement”), which generally provided that TRGP directly fund the costs incurred by or on behalf of the Company in connection with the Company’s first action in the U.S. International Trade Commission (“ITC”) and its U.S. district court proceedings, but excluding all other proceedings (all such funded costs, collectively, the “Funded Costs”). In exchange for such funding, the Company agreed that, if the Company recovered any proceeds in connection with the funded SK hynix proceedings relating to certain patents, it would pay to TRGP the amount of the Funded Costs paid by TRGP plus an escalating premium based on when any such proceeds are recovered. In addition, pursuant to the terms of a separate security agreement between the Company and TRGP dated May 3, 2017 (the “Security Agreement”), the Company granted to TRGP (i) a first priority lien on, and security in, the claims underlying the funded SK hynix proceedings and any proceeds that may be received by the Company in connection with these proceedings, and (ii) a second priority lien on, and security in, the Company’s patents that are the subject of the funded SK hynix proceedings. The TRGP Agreement and its amendment do not impose financial covenants on the Company. On January 23, 2020, the Company and TRGP entered into an amendment to the TRGP Agreement to alter the recovery sharing formula related to claims against SK hynix for alleged infringement of the Company’s patents. In connection with the TRGP Agreement, in May 2017, TRGP, SVIC and SVB entered into the Intercreditor Agreements. Pursuant to the terms of the Intercreditor Agreements, TRGP, SVB and SVIC have agreed to their relative security interest priorities in the Company’s assets, such that: (i) TRGP has a first priority security interest in the Company’s claims underlying the funded SK hynix proceedings and any proceeds that may be received by the Company in connection with these proceedings relating to certain patents, and a second priority security interest in the Company’s patents that are the subject of the funded SK hynix proceedings, (ii) SVIC has a first priority security interest in the Company’s complete patent portfolio and a second priority security interest in all of the Company’s other tangible and intangible assets (other than the Company’s claims underlying and any proceeds it may receive from the SK hynix proceedings funded under the TRGP Agreement), and (iii) SVB has a first priority security interest in all of the Company’s tangible and intangible assets other than its patent portfolio and its claims underlying and any proceeds it may receive from the SK hynix proceedings funded under the TRGP Agreement, a second priority security interest in the Company’s patent portfolio other than the patents that are the subject of the SK hynix proceedings funded under the TRGP Agreement, and a third priority security interest in the Company’s patents that are the subject of the SK hynix proceedings funded under the TRGP Agreement. The Company consented and agreed to the terms of each of the Intercreditor Agreements. Legal expenses incurred by the Company but paid by TRGP pursuant to the terms of the TRGP Agreement are excluded from the condensed consolidated financial statements. During the years ended December 29, 2018 and December 30, 2017, the Company excluded legal expenses of $1.8 million and $10.2 million, respectively, as a result of TRGP’s payment of these expenses under the TRGP Agreement. No further legal expenses will be paid by TRGP under this agreement. Any settlement or other cash proceeds the Company may recover in the future in connection with the funded SK hynix proceedings may be reduced by the aggregate amount of legal expenses excluded by the Company as a result of TRGP’s payment of these expenses under the TRGP Agreement, plus the premium amount due to TRGP under the terms of the amended TRGP Agreement at the time of any such recovery. Litigation and Patent Reexaminations The Company owns numerous patents and continues to seek to grow and strengthen its patent portfolio, which covers various aspects of the Company’s innovations and includes various claim scopes. The Company plans to pursue avenues to monetize its intellectual property portfolio, in which it would generate revenue by selling or licensing its technology, and it intends to vigorously enforce its patent rights against alleged infringers of such rights. The Company dedicates substantial resources to protecting and enforcing its intellectual property rights, including with patent infringement proceedings it files against third parties and defense of its patents against challenges made by way of reexamination and review proceedings at the U.S. Patent and Trademark Office (“USPTO”) and Patent Trial and Appeal Board (“PTAB”). The Company expects these activities to continue for the foreseeable future, with no guarantee that any ongoing or future patent protection or litigation activities will be successful, or that the Company will be able to monetize its intellectual property portfolio. The Company is also subject to litigation based on claims that it has infringed on the intellectual property rights of others. Any litigation, regardless of its outcome, is inherently uncertain, involves a significant dedication of resources, including time and capital, and diverts management’s attention from other activities of the Company. As a result, any current or future infringement claims or patent challenges by or against third parties, whether or not eventually decided in the Company’s favor or settled, could materially adversely affect the Company’s business, financial condition and results of operations. Additionally, the outcome of pending or future litigation and related patent reviews and reexaminations, as well as any delay in their resolution, could affect the Company’s ability to continue to sell its products, protect against competition in the current and expected markets for its products or license or otherwise monetize its intellectual property rights in the future. Google Litigation On December 4, 2009, the Company filed a patent infringement lawsuit against Google, Inc. (“Google”) in the U.S. District Court for the Northern District of California (the “Northern District Court”), seeking damages and injunctive relief based on Google’s alleged infringement of the Company’s U.S. Patent No. 7,619,912 (the “‘912 patent”), which relates generally to technologies to implement rank multiplication. In February 2010, Google answered the Company’s complaint and asserted counterclaims against the Company seeking a declaration that the patent is invalid and not infringed, and claiming that the Company committed fraud, negligent misrepresentation and breach of contract based on the Company’s activities in the Joint Electron Device Engineering Council (“JEDEC”) standard-setting organization. The counterclaim seeks unspecified compensatory damages. Accruals have not been recorded for loss contingencies related to Google’s counterclaim because it is not probable that a loss has been incurred and the amount of any such loss cannot be reasonably estimated. In October 2010, Google requested and was later granted an Inter Partes Reexamination of the ‘912 patent by the USPTO. The reexamination proceedings are described below. In connection with the reexamination request, the Northern District Court granted the Company’s and Google’s joint request to stay the ‘912 patent infringement lawsuit against Google until the completion of the reexamination proceedings . On January 31, 2019, the PTAB, in response to Google’s rehearing request, denied rehearing of the PTAB’s previous decision upholding the validity of claims in Netlist’s ‘912 patent. On April 16, 2019, Google filed an appeal to this decision. On June 15, 2020, the United States Court of Appeals for the Federal Circuit affirmed the PTAB’s previous decision upholding the validity of claims in Netlist’s ‘912 patent. Inphi Litigation On September 22, 2009, the Company filed a patent infringement lawsuit against Inphi Corporation (“Inphi”) in the U.S. District Court for the Central District of California (the “Central District Court”). The complaint, as amended, alleges that Inphi is contributorily infringing and actively inducing the infringement of U.S. patents owned by the Company, including the ‘912 patent, U.S. Patent No. 7,532,537 (the “‘537 patent”), which relates generally to memory modules with load isolation and memory domain translation capabilities, and U.S. Patent No. 7,636,274 (the “‘274 patent”), which is related to the ‘537 patent and relates generally to load isolation and memory domain translation technologies. The Company is seeking damages and injunctive relief based on Inphi’s use of the Company’s patented technology. Inphi denied infringement and claimed that the three patents are invalid. In June 2010, Inphi requested and was later granted Inter Partes Reexaminations of the ‘912, ‘537 and ‘274 patents by the USPTO. The reexamination proceedings are described below (except for the reexamination proceeding related to the ‘537 patent, which have concluded with the confirmation of all of the claims of such patent). In connection with the reexamination requests, Inphi filed a motion to stay the patent infringement lawsuit with the Central District Court until completion of the reexamination proceedings, which was granted . On April 16, 2019, Inphi filed an appeal to the PTAB’s January 31, 2019 decision upholding the validity of claims in Netlist’s ‘912 patent. On June 15, 2020, the United States Court of Appeals for the Federal Circuit affirmed the PTAB’s previous decision upholding the validity of claims in Netlist’s ‘912 patent. ‘912 Patent Reexamination As noted above, in April 2010, June 2010 and October 2010, Google and Inphi submitted requests for an Inter Partes Reexamination of the ‘912 patent by the USPTO, claiming that the ‘912 patent is invalid and requesting that the USPTO reject the patent’s claims and cancel the patent. Additionally, in October 2010, Smart Modular, Inc. (“Smart Modular”) submitted another such reexamination request. On January 18, 2011, the USPTO granted such reexamination requests, and in February 2011, the USPTO merged the Inphi, Google and Smart Modular ‘912 patent reexaminations into a single proceeding. On March 21, 2014, the USPTO issued an Action Closing Prosecution (“ACP”), an office action that states the USPTO examiner’s position on patentability and closes further prosecution, and on June 18, 2014 the USPTO issued a Right of Appeal Notice (“RAN”), a notice that triggers the rights of the involved parties to file a notice of appeal to the ACP, each of which confirmed the patentability of 92 of the ‘912 patent’s claims and rejected the patent’s 11 other claims. The parties involved filed various notices of appeal, responses and requests, and on November 24, 2015, the PTAB held a hearing on such appeals. On May 31, 2016, the PTAB issued a decision affirming certain of the examiner’s decisions and reversing others. On February 9, 2017, the PTAB granted the Company’s request to reopen prosecution before the USPTO examiner and remanded the consolidated proceeding to the examiner to consider the patentability of certain of the pending claims in view of the PTAB’s May 31, 2016 decision and comments from the parties. On October 3, 2017, the examiner issued a determination as to the patentability of certain of the pending claims, which were found to be unpatentable. On June 1, 2018, the PTAB reversed the Examiner and found the pending amended claims to be patentable. On July 2, 2018, Google requested rehearing of the PTAB’s decision. On January 31, 2019 the PTAB, in response to Google’s rehearing request, denied rehearing of the PTAB’s previous decision upholding the validity of claims in Netlist’s ‘912 patent. On April 16, 2019, Inphi and Google filed an appeal to the ‘912 patent decision. On June 15, 2020, the United States Court of Appeals for the Federal Circuit affirmed the PTAB’s previous decision upholding the validity of claims in Netlist’s ‘912 patent. Accruals have not been recorded for loss contingencies related to the ‘912 patent reexamination proceedings because it is not probable that a loss has been incurred and the amount of any such loss cannot be reasonably estimated. SK hynix Litigation On September 1, 2016, the Company filed legal proceedings for patent infringement against SK hynix in the ITC (the “First ITC Action”) and the Central District Court. These proceedings are based on the alleged infringement by SK hynix’s RDIMM and LRDIMM enterprise memory products of six of the Company’s U.S. patents. On October 31, 2017, the Company filed additional legal proceedings for patent infringement against SK hynix in the ITC (the “Second ITC Action”) based on the alleged infringement by SK hynix’s RDIMM and LRDIMM products of two additional U.S. patents owned by the Company. In all of the ITC proceedings, the Company has requested exclusion orders that direct U.S. Customs and Border Protection to stop allegedly infringing SK hynix RDIMM and LRDIMM products from entering the United States. In the Central District Court proceedings, the Company is primarily seeking damages . The First and Second ITC Actions are no longer pending and the parallel Central District Court infringement proceedings are currently proceedings pending further order of the court. On March 17, 2020, Netlist filed legal proceedings alleging patent infringement against SK hynix in the U.S. District Court for the Western District of Texas based on the infringement of Netlist U.S. Patent No. 9,858,218 and U.S. Patent No. 10,474,595 by SK hynix RDIMM and LRDIMM memory products. The case has been assigned to the Hon. Alan D. Albright and is Case No. 6:20-cv-00194-ADA. The Markman hearing in this case is scheduled for March 2021 and the trial is scheduled for December 2021. On June 15, 2020, Netlist filed a second round of legal proceedings alleging patent infringement against SK hynix in the U.S. District Court for the Western District of Texas based on the infringement of Netlist U.S. Patent No. 10,217,523 by SK hynix LRDIMM memory products. The case has been assigned to the Hon. Alan D. Albright and is Case No. 6:20-cv-00525-ADA. The Markman hearing in this case is scheduled for March 2021 and the trial is scheduled for December 2021. Other Contingent Obligations In the ordinary course of its business, the Company has made certain indemnities, commitments and guarantees pursuant to which it may be required to make payments in relation to certain transactions. These include, among others: (i) intellectual property indemnities to the Company’s customers and licensees in connection with the use, sale and/or license of Company products; (ii) indemnities to vendors and service providers pertaining to claims based on the Company’s negligence or willful misconduct; (iii) indemnities involving the accuracy of representations and warranties in certain contracts; (iv) indemnities to directors and officers of the Company to the maximum extent permitted under the laws of the State of Delaware; (v) indemnities to TRGP, SVIC, SVB and Iliad pertaining to all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with transactions contemplated by the applicable investment or loan documents, as applicable; and (vi) indemnities or other claims related to certain real estate leases, under which the Company may be required to indemnify property owners for environmental and other liabilities or may face other claims arising from the Company’s use of the applicable premises. The duration of these indemnities, commitments and guarantees varies and, in certain cases, may be indefinite. The majority of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential for future payments the Company could be obligated to make. Historically, the Company has not been obligated to make significant payments as a result of these obligations, and no liabilities have been recorded for these indemnities, commitments and guarantees in the accompanying condensed consolidated balance sheets.

Stockholders' Equity

Stockholders' Equity	9 Months Ended
	Sep. 26, 2020
Stockholders' Equity
Stockholders' Equity	Note 8—Stockholders’ Equity Serial Preferred Stock The Company’s authorized capital stock includes 10,000,000 shares of serial preferred stock, with a par value of $0.001 per share. No shares of preferred stock were outstanding as of September 26, 2020 or December 28, 2019. On April 17, 2017, the Company entered into a rights agreement (as amended from time to time, the “Rights Agreement”) with Computershare Trust Company, N.A., as rights agent. In connection with the adoption of the Rights Agreement and pursuant to its terms, the Company’s board of directors authorized and declared a dividend of one right (each, a “Right”) for each outstanding share of the Company’s common stock to stockholders of record at the close of business on May 18, 2017 (the “Record Date”), and authorized the issuance of one Right for each share of the Company’s common stock issued by the Company (except as otherwise provided in the Rights Agreement) between the Record Date and the Distribution Date (as defined below) . Each Right entitles the registered holder, subject to the terms of the Rights Agreement, to purchase from the Company, when exercisable and subject to adjustment, one unit consisting of one one-thousandth of a share (a “Unit”) of Series A Preferred Stock of the Company (the “Preferred Stock”), at a purchase price of $6.56 per Unit, subject to adjustment. Subject to the provisions of the Rights Agreement, including certain exceptions specified therein, a distribution date for the Rights (the “Distribution Date”) will occur upon the earlier of (i) 10 business days following a public announcement that a person or group of affiliated or associated persons (an “Acquiring Person”) has acquired or otherwise obtained beneficial ownership of 15% or more of the then‑outstanding shares of the Company’s common stock, and (ii) 10 business days (or such later date as may be determined by the Company’s board of directors) following the commencement of a tender offer or exchange offer that would result in a person or group becoming an Acquiring Person. The Rights are not exercisable until the Distribution Date and, unless earlier redeemed or exchanged by the Company pursuant to the terms of the Rights Agreement (as amended on April 16, 2018, April 16, 2019 and August 14, 2020) will expire on the close of business on April 17, 2024. In connection with the adoption of the Rights Agreement, the Company’s board of directors approved a Certificate of Designation of the Series A Preferred Stock (the “Certificate of Designation”) designating 1,000,000 shares of its serial preferred stock as Series A Preferred Stock and setting forth the rights, preferences and limitations of the Preferred Stock. The Company filed the Certificate of Designation with the Secretary of State of the State of Delaware on April 17, 2017 . Common Stock The Company has one class of common stock with a par value of $0.001 per share. On August 7, 2020, the Company’s stockholders approved an amendment to the Restated Certificate of Incorporation to increase the number of shares of the common stock authorized for issuance from 300,000,000 to 450,000,000. 2019 Lincoln Park Purchase Agreement On June 24, 2019, the Company entered into the 2019 Purchase Agreement with Lincoln Park, pursuant to which the Company has the right to sell to Lincoln Park up to an aggregate of $10 million in shares of its common stock subject to the conditions and limitations set forth in the 2019 Purchase Agreement. As consideration for entering into the 2019 Purchase Agreement, the Company issued to Lincoln Park 818,420 shares of its common stock as initial commitment shares in a noncash transaction on June 24, 2019 and will issue up to 818,420 additional shares of its common stock as additional commitment shares on a pro rata basis in connection with any additional purchases. The Company will not receive any cash proceeds from the issuance of these additional commitment shares. Pursuant to the 2019 Purchase Agreement, on any business day and as often as every other business day over the 36-month term of the 2019 Purchase Agreement, the Company has the right, from time to time, at its sole discretion and subject to certain conditions, to direct Lincoln Park to purchase up to 400,000 shares of its common stock, with such amount increasing as the closing sale price of its common stock increases; provided Lincoln Park’s obligation under any single such purchase will not exceed $1.0 million, unless the Company and Lincoln Park mutually agree to increase the maximum amount of such single regular purchase. If the Company directs Lincoln Park to purchase the maximum number of shares of common stock it then may sell in a regular purchase, then in addition to such regular purchase, and subject to certain conditions and limitations in the 2019 Purchase Agreement, the Company may direct Lincoln Park to purchase an additional amount of common stock that may not exceed the lesser of (i) 300% of the number of shares purchased pursuant to the corresponding regular purchase or (ii) 30% of the total number of shares of its common stock traded during a specified period on the applicable purchase date as set forth in the 2019 Purchase Agreement. Under certain circumstances and in accordance with the 2019 Purchase Agreement, the Company may direct Lincoln Park to purchase shares in multiple accelerated purchases on the same trading day. During the nine months ended September 26, 2020, Lincoln Park did not purchase shares of the Company’s common stock under the 2019 Purchase Agreement. The Company controls the timing and amount of any sales of its common stock to Lincoln Park. There is no upper limit on the price per share that Lincoln Park must pay for the Company’s common stock under the 2019 Purchase Agreement, but in no event will shares be sold to Lincoln Park on a day the closing price is less than the floor price specified in the 2019 Purchase Agreement. In all instances, the Company may not sell shares of its common stock to Lincoln Park under the 2019 Purchase Agreement if that would result in Lincoln Park beneficially owning more than 9.99% of its common stock. The 2019 Purchase Agreement does not limit the Company’s ability to raise capital from other sources at the Company’s sole discretion, except that, subject to certain exceptions, the Company may not enter into any Variable Rate Transaction (as defined in the Purchase Agreement, including the issuance of any floating conversion rate or variable priced equity-like securities) during the 36 months after the date of the 2019 Purchase Agreement. The Company has the right to terminate the 2019 Purchase Agreement at any time, at no cost to the Company. 2020 Lincoln Park Purchase Agreement On March 5, 2020, the Company entered into the 2020 Purchase Agreement with Lincoln Park, pursuant to which the Company has the right to sell to Lincoln Park up to an aggregate of $20 million in shares of its common stock over the 36-month term of the 2020 Purchase Agreement subject to the conditions and limitations set forth in the 2020 Purchase Agreement. As consideration for entering into the 2020 Purchase Agreement, the Company issued to Lincoln Park 1,529,052 shares of its common stock as initial commitment shares in a noncash transaction on March 6, 2020 and will issue up to 917,431 additional shares of its common stock as additional commitment shares on a pro rata basis in connection with any additional purchases. The Company will not receive any cash proceeds from the issuance of these additional commitment shares. Pursuant to the 2020 Purchase Agreement, on any business day and as often as every other business day over the 36-month term of the 2020 Purchase Agreement, the Company has the right, from time to time, at its sole discretion and subject to certain conditions, to direct Lincoln Park to purchase up to 400,000 shares of its common stock, with such amount increasing as the closing sale price of its common stock increases; provided Lincoln Park’s obligation under any single such purchase will not exceed $1.0 million, unless the Company and Lincoln Park mutually agree to increase the maximum amount of such single regular purchase. If the Company directs Lincoln Park to purchase the maximum number of shares of common stock it then may sell in a regular purchase, then in addition to such regular purchase, and subject to certain conditions and limitations in the 2020 Purchase Agreement, the Company may direct Lincoln Park to purchase an additional amount of common stock that may not exceed the lesser of (i) 300% of the number of shares purchased pursuant to the corresponding regular purchase or (ii) 30% of the total number of shares of its common stock traded during a specified period on the applicable purchase date as set forth in the 2020 Purchase Agreement. Under certain circumstances and in accordance with the 2020 Purchase Agreement, the Company may direct Lincoln Park to purchase shares in multiple accelerated purchases on the same trading day. During the three and nine months ended September 26, 2020, Lincoln Park purchased an aggregate of 13,748,158 shares and 23,400,122 shares of the Company’s common stock for a net purchase price of $9.4 million and $12.2 million, respectively, under the 2020 Purchase Agreement. In connection with the purchases, during the three and nine months ended September 26, 2020, the Company issued to Lincoln Park an aggregate of 431,798 shares and 560,588 shares of its common stock, respectively, as additional commitment shares in noncash transactions. The Company controls the timing and amount of any sales of its common stock to Lincoln Park. There is no upper limit on the price per share that Lincoln Park must pay for the Company’s common stock under the 2020 Purchase Agreement, but in no event will shares be sold to Lincoln Park on a day the closing price is less than the floor price specified in the 2020 Purchase Agreement. In all instances, the Company may not sell shares of its common stock to Lincoln Park under the 2020 Purchase Agreement if that will result in Lincoln Park beneficially owning more than 9.99% of its common stock. The 2020 Purchase Agreement does not limit the Company’s ability to raise capital from other sources at the Company’s sole discretion, except that, subject to certain exceptions, the Company may not enter into any Variable Rate Transaction (as defined in the 2020 Purchase Agreement, including the issuance of any floating conversion rate or variable priced equity-like securities) during the 36 months after the date of the 2020 Purchase Agreement. The Company has the right to terminate the 2020 Purchase Agreement at any time, at no cost to the Company. Warrants Warrant activity for the nine months ended September 26, 2020 is as follows: Weighted Number of Average Shares Exercise (in thousands) Price Outstanding as of December 28, 2019 15,010 $ 0.62 Granted 175 0.20 Exercised (300) 0.11 Expired (1,099) 1.00 Outstanding as of September 26, 2020 13,786 0.59 During the nine months ended September 26, 2020, the Company issued 255,813 shares of its common stock upon the cashless exercise of 300,000 of its warrants.

Stock-Based Awards

Stock-Based Awards	9 Months Ended
	Sep. 26, 2020
Stock-Based Awards
Stock-Based Awards	Note 9—Stock-Based Awards As of September 26, 2020, the Company had 1,794,072 shares of common stock reserved for future issuance under its Amended and Restated 2006 Incentive Plan (“Amended 2006 Plan”). Stock options granted under the Amended 2006 Plan generally vest at a rate of at least 25% per year over four years and expire 10 years from the grant date. RSAs granted under the 2006 Plan vest annually on each anniversary of the grant date over a two-year term. RSUs granted for employees and consultants generally vest semi-annually from the grant date over a four-year term, and RSUs granted for independent directors fully-vest on the grant date. Stock Options The following table summarizes the activity related to stock options during the nine months ended September 26, 2020: Weighted- Number of Average Shares Exercise (in thousands) Price Outstanding as of December 28, 2019 7,357 $ 1.17 Granted 600 0.47 Exercised (200) 0.14 Expired or forfeited (853) 0.80 Outstanding as of September 26, 2020 6,904 1.18 Restricted Stock Awards and Restricted Stock Units The following table summarizes the activity related to RSAs and RSUs during the nine months ended September 26, 2020: Weighted- Average Number of Grant-Date Shares Fair Value (in thousands) per Share Outstanding as of December 28, 2019 3,066 $ 0.52 Granted 625 0.47 Vested (1,064) 0.47 Forfeited (90) 0.42 Outstanding as of September 26, 2020 2,537 0.53 Stock-Based Compensation The following table summarizes the stock-based compensation expense by line item in the condensed consolidated statements of operations (in thousands): Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Cost of sales $ 1 $ 6 $ 8 $ 20 Research and development 63 67 154 163 Selling, general and administrative 148 170 420 599 Total $ 212 $ 243 $ 582 $ 782 As of September 26, 2020, the Company had approximately $1.6 million, net of estimated forfeitures, of unearned stock-based compensation, which it expects to recognize over a weighted-average period of approximately 2.4 years.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 26, 2020
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ended December 28, 2019, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 10, 2020 (the “2019 Annual Report”). In the opinion of management, all adjustments for the fair presentation of the Company’s condensed consolidated financial statements have been made. The adjustments are of a normal recurring nature except as otherwise noted. The results of operations for the interim periods are not necessarily indicative of the results to be expected for other periods or the full fiscal year. The Company has evaluated events occurring subsequent to September 26, 2020, through the filing date of this Quarterly Report on Form 10-Q and concluded that there were no events that required recognition and disclosures, other than those discussed elsewhere in the notes hereto.
Principles of Consolidation	Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Netlist, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Fiscal Year	Fiscal Year The Company’s fiscal year is the 52- or 53-week period that ends on the Saturday nearest to December 31. The Company’s fiscal year 2020 will include 53 weeks and ends on January 2, 2021 and its fiscal year 2019 included 52 weeks and ended on December 28, 2019. The first three quarters of fiscal year 2020 each includes 13 weeks and the fourth quarter includes 14 weeks. The four quarters of fiscal year 2019 each included 13 weeks. Unless otherwise stated, references to particular years, quarters, months and periods refer to the Company’s fiscal years ended in January or December and the associated quarters, months and periods of those fiscal years.
Use of Estimates	Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results may differ materially from those estimates.
Recently Adopted Accounting Guidance	Recently Adopted Accounting Guidance In the first quarter of 2020, the Company adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) (“ASU 2018-15”), which amends the accounting for implementation, setup, and other upfront costs in a hosting arrangement that is a service contract. The adoption of ASU 2018-15 did not have an impact on the Company’s condensed consolidated financial statements. In the first quarter of 2020, the Company adopted FASB ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which removes, modifies, and adds various disclosure requirements on fair value measurements in Topic 820. The adoption of ASU 2018-13 did not have an impact on the Company’s condensed consolidated financial statements.
Recent Accounting Pronouncements	Recently Issued Accounting Guidance In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes , which eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. This ASU also clarifies and simplifies other aspects of the accounting for income taxes. The ASU will be effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years and early adoption is permitted. Certain amendments of this ASU may be adopted on a retrospective basis, modified retrospective basis or prospective basis. The Company is currently evaluating the impact this guidance will have on its condensed consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity . This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity's own equity, and also improves and amends the related earnings per share guidance for both Subtopics. The ASU will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years and early adoption is permitted. The Company is currently evaluating the impact this guidance will have on its condensed consolidated financial statements.
Fair Value Measurements	Fair Value Measurements The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. The Company categorizes each of its fair value measurements in one of those three levels based on the lowest level input that is significant to the fair value measurement in its entirety. · Level 1 – inputs are based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis. · Level 2 – inputs are based on quoted prices of similar instruments in active markets, quoted prices for identical or similar instruments in market that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3 – inputs are generally unobservable inputs for the asset or liability, which are typically based on management’s estimates of assumptions that market participants would use in pricing the assets and liabilities. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. The Company’s financial instruments consist principally of cash and cash equivalents, restricted cash, a revolving line of credit, PPP Loan and convertible promissory notes. Cash equivalents consist of short-term investments with original maturities of three months or less and restricted cash consists of cash to secure standby letters of credit (see Note 4). The carrying value of these instruments approximates their fair value due to their short-term nature. The fair value of the revolving line of credit, the PPP Loan and convertible promissory note is estimated by using current applicable rates for similar instruments as of the balance sheet date and an assessment of the credit rating. The carrying value of the revolving line of credit as of September 26, 2020 and December 28, 2019 and the PPP Loan as of September 26, 2020 approximates fair value because the interest rate yield is near current market rates for comparable debt instruments. The fair value of the convertible promissory note is estimated by using a discounted cash flow analysis using borrowing rates available to the Company for debt instruments with similar terms and maturities and is classified in Level 2 of the valuation hierarchy. The carrying value and estimated fair value of the secured convertible promissory note as of September 26, 2020 were $14.7 million and $12.2 million, respectively. The carrying value and estimated fair value of the secured convertible promissory note as of December 28, 2019 were $14.6 million and $11.7 million, respectively.
Other Significant Accounting Policies	Other Significant Accounting Policies The Company’s other significant accounting policies were reported in the 2019 Annual Report and have not changed materially from the policies previously reported.

Supplemental Financial Inform_2

Supplemental Financial Information (Tables)	9 Months Ended
	Sep. 26, 2020
Supplemental Financial Information
Schedule Of Inventories	September 26, December 28, 2020 2019 Raw materials $ 911 $ 1,052 Work in process 20 25 Finished goods 3,590 2,419 $ 4,521 $ 3,496
Schedule Of Computation Of Net Loss Per Share	Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Numerator: Net loss $ (2,130) $ (3,108) $ (5,502) $ (10,677) Denominator: Weighted-average common shares outstanding—basic and diluted 192,257 148,058 179,154 142,624 Net loss per share—basic and diluted $ (0.01) $ (0.02) $ (0.03) $ (0.07)
Schedule Of Potential Common Shares Excluded From The Diluted Net Loss Per Share Calculations	Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Weighted average common share equivalents 14,278 16,120 13,526 16,212
Schedule of Disaggregation of Sales by Major Source	Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Resales of third-party products $ 6,883 $ 5,180 $ 24,146 $ 13,725 Sale of the Company's modular memory subsystems 3,329 936 11,603 3,008 Total net sales $ 10,212 $ 6,116 $ 35,749 $ 16,733
Sales from external customers	Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Customer A * * Customer B * Customer C * * * *
Schedule Of Supplemental Disclosures Of Cash Flow Information And Non-Cash Financing Activities	Nine Months Ended September 26, September 28, 2020 2019 Common stock issued on conversion of convertible note payable and accrued interest $ — $ 1,417

Debt (Tables)

Debt (Tables)	9 Months Ended
	Sep. 26, 2020
Debt
Schedule Of Long-Term Debt	September 26, December 28, 2020 2019 Secured convertible note, due December 2021, including accrued interest of $1,457 (2020) and $1,233 (2019), respectively $ 16,457 $ 16,233 Paycheck protection program loan, due April 2022, including accrued interest of $2 639 — Notes payable — 412 Unamortized debt discounts and issuance costs (281) (440) 16,815 16,205 Less: current portion (389) (412) $ 16,426 $ 15,793

Leases (Tables)

Leases (Tables)	9 Months Ended
	Sep. 26, 2020
Leases
Schedule of lease cost and supplemental cash flow information relating to operating leases	Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Lease cost Operating lease cost $ 141 $ 158 $ 446 $ 476 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases 141 155 442 450 Right-of-use assets obtained in exchange for lease obligations Finance leases — — — 96 Lease modification to decrease ROU assets — — 365 —
Schedule of supplemental balance sheet information	September 26, December 28, (in thousands) 2020 2019 Operating Leases Operating lease right-of-use assets $ 218 $ 968 Accrued expenses and other current liabilities $ 235 $ 511 Operating lease liabilities — 498 Total operating lease liabilities $ 235 $ 1,009 Finance Leases Property and equipment, at cost $ 96 $ 96 Accumulated depreciation (29) (14) Property and equipment, net $ 67 $ 82 Accrued expenses and other current liabilities $ 19 $ 18 Other long-term liabilities 51 65 Total finance lease liabilities $ 70 $ 83 Weighted Average Remaining Lease Term (in years) Operating lease 0.6 2.1 Finance lease 3.5 4.3 Weighted Average Discount Rate Operating lease Finance lease
Schedule of maturities of operating lease liabilities	Fiscal Year Operating Leases Finance Leases 2020 (remaining 3 months) $ 120 $ 6 2021 120 22 2022 — 22 2023 — 22 2024 — 5 Total lease payments 240 77 Less: imputed interest (5) (7) Total $ 235 $ 70
Schedule of maturities of finance lease liabilities	Maturities of lease liabilities as of September 26, 2020 were as follows (in thousands): Fiscal Year Operating Leases Finance Leases 2020 (remaining 3 months) $ 120 $ 6 2021 120 22 2022 — 22 2023 — 22 2024 — 5 Total lease payments 240 77 Less: imputed interest (5) (7) Total $ 235 $ 70

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	9 Months Ended
	Sep. 26, 2020
Stockholders' Equity
Schedule Of Warrant Activity	Weighted Number of Average Shares Exercise (in thousands) Price Outstanding as of December 28, 2019 15,010 $ 0.62 Granted 175 0.20 Exercised (300) 0.11 Expired (1,099) 1.00 Outstanding as of September 26, 2020 13,786 0.59

Stock-Based Awards (Tables)

Stock-Based Awards (Tables)	9 Months Ended
	Sep. 26, 2020
Stock-Based Awards
Schedule Of Common Stock Options Activity	Weighted- Number of Average Shares Exercise (in thousands) Price Outstanding as of December 28, 2019 7,357 $ 1.17 Granted 600 0.47 Exercised (200) 0.14 Expired or forfeited (853) 0.80 Outstanding as of September 26, 2020 6,904 1.18
Schedule Of Restricted Stock Awards	Weighted- Average Number of Grant-Date Shares Fair Value (in thousands) per Share Outstanding as of December 28, 2019 3,066 $ 0.52 Granted 625 0.47 Vested (1,064) 0.47 Forfeited (90) 0.42 Outstanding as of September 26, 2020 2,537 0.53
Schedule of Stock-Based Compensation Expense	Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Cost of sales $ 1 $ 6 $ 8 $ 20 Research and development 63 67 154 163 Selling, general and administrative 148 170 420 599 Total $ 212 $ 243 $ 582 $ 782

Description of Business (Detail

Description of Business (Details) $ / shares in Units, $ in Thousands	Mar. 05, 2020USD ($)	Jun. 24, 2019USD ($)	Sep. 26, 2020USD ($)$ / shares	Jun. 27, 2020USD ($)	Mar. 28, 2020USD ($)	Sep. 28, 2019USD ($)	Jun. 29, 2019USD ($)	Mar. 30, 2019USD ($)	Sep. 26, 2020USD ($)segment$ / shares	Sep. 28, 2019USD ($)	Dec. 28, 2019USD ($)$ / shares	Dec. 29, 2018USD ($)
Number of reportable segment | segment									1
Issuance of commitment shares			$ 9,413	$ 2,761		$ 2,457
Net loss			$ (2,130)	$ (1,830)	$ (1,542)	$ (3,108)	$ (3,519)	$ (4,050)	$ (5,502)	$ (10,677)	$ 12,500	$ 17,100
Exercise price of warrants (in dollars per share) | $ / shares			$ 0.59						$ 0.59		$ 0.62
Outstanding principal and accrued interest											$ 412
2019 Purchase Agreement
Purchase Agreement Term		36 months
2019 Purchase Agreement | Maximum
Issuance of commitment shares		$ 10,000
2020 Purchase Agreement
Purchase Agreement Term	36 months
2020 Purchase Agreement | Maximum
Issuance of commitment shares	$ 20,000

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Details) - Secured Debt [Member] - USD ($) $ in Millions	Sep. 26, 2020	Dec. 28, 2019
Carrying value of convertible note	$ 14.7	$ 14.6
Estimated fair value of convertible note	$ 12.2	$ 11.7

Supplemental Financial Inform_3

Supplemental Financial Information (Schedule Of Inventories) (Details) - USD ($) $ in Thousands	Sep. 26, 2020	Dec. 28, 2019
Supplemental Financial Information
Raw materials	$ 911	$ 1,052
Work in process	20	25
Finished goods	3,590	2,419
Inventories	$ 4,521	$ 3,496

Supplemental Financial Inform_4

Supplemental Financial Information (Schedule Of Computation Of Net Loss Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended						9 Months Ended		12 Months Ended
	Sep. 26, 2020	Jun. 27, 2020	Mar. 28, 2020	Sep. 28, 2019	Jun. 29, 2019	Mar. 30, 2019	Sep. 26, 2020	Sep. 28, 2019	Dec. 28, 2019	Dec. 29, 2018
Basic and diluted net loss per share:
Numerator: Net loss	$ (2,130)	$ (1,830)	$ (1,542)	$ (3,108)	$ (3,519)	$ (4,050)	$ (5,502)	$ (10,677)	$ 12,500	$ 17,100
Weighted-average common shares outstanding, basic and diluted	192,257			148,058			179,154	142,624
Basic and diluted net loss per share	$ (0.01)			$ (0.02)			$ (0.03)	$ (0.07)
Weighted average common share equivalents	14,278			16,120			13,526	16,212

Supplemental Financial Inform_5

Supplemental Financial Information (Disaggregation of Net Sales by Major Source) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Net sales	$ 10,212	$ 6,116	$ 35,749	$ 16,733
Resales Of Third Party Products
Net sales	6,883	5,180	24,146	13,725
Sale of the Company's modular memory subsystems
Net sales	$ 3,329	$ 936	$ 11,603	$ 3,008

Supplemental Financial Inform_6

Supplemental Financial Information (Major Customers and Products) (Details) - customer	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019	Dec. 28, 2019
Sales Revenue, Resale of Products
Concentration Risk [Line Items]
Concentration Risk, Percentage	67.00%	85.00%	68.00%	82.00%
Accounts Receivable | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration Risk, Number of Customers			4		1
Customer A | Sales Revenue, Product Line | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration Risk, Percentage	14.00%		15.00%
Customer A | Accounts Receivable | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration Risk, Percentage			27.00%		25.00%
Customer B | Sales Revenue, Product Line | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration Risk, Percentage	21.00%	13.00%		11.00%
Customer B | Accounts Receivable | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration Risk, Percentage			19.00%
Customer C | Sales Revenue, Product Line | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration Risk, Percentage		10.00%
Customer C | Accounts Receivable | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration Risk, Percentage			11.00%
Customer D | Accounts Receivable | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration Risk, Percentage			10.00%

Supplemental Financial Inform_7

Supplemental Financial Information (Schedule Of Supplemental Disclosures Of Cash Flow Information And Non-Cash Financing Activities) (Details) $ in Thousands	9 Months Ended
	Sep. 28, 2019USD ($)
Supplemental Financial Information
Common stock issued on conversion of convertible note payable and accrued interest	$ 1,417

Credit Agreements (SVB Credit A

Credit Agreements (SVB Credit Agreement) (Narrative) (Details) - Silicon Valley Bank - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 26, 2020	Dec. 28, 2019
Line of Credit Facility
Borrowing capacity as a percentage of eligible accounts receivable	85.00%
Maximum borrowing capacity	$ 5,000
Outstanding borrowings	3,400	$ 3,000
Availability remaining	$ 100	200
Rate plus "prime rate"	2.75%
Letter of Credit
Line of Credit Facility
Outstanding borrowings	$ 3,200	$ 2,800

Debt (Schedule Of Long-Term Deb

Debt (Schedule Of Long-Term Debt) (Details) - USD ($) $ in Thousands	Sep. 26, 2020	Dec. 28, 2019
Debt
Notes Payable		$ 412
Unamortized debt discounts and issuance costs	$ (281)	(440)
Debt outstanding	16,815	16,205
Less: current portion	(389)	(412)
Long-term debt	16,426	15,793
Senior Secured Convertible Note Due December 2025
Debt
Debt outstanding, noncurrent portion	16,457	16,233
Accrued interest	1,457	$ 1,233
Paycheck Protection Program Loan
Debt
Long-term debt, gross	639
Accrued interest	$ 2

Debt (Narrative) (Details)

Debt (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	Aug. 27, 2018	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019	Dec. 28, 2019	Apr. 23, 2020	Nov. 18, 2015
Long-term debt
Number of shares which may be purchased under warrant		13,786,000		13,786,000		15,010,000
Exercise price of warrants (in dollars per share)		$ 0.59		$ 0.59		$ 0.62
Interest expense		$ (139)	$ (245)	$ (437)	$ (775)
Debt outstanding		16,815		16,815		$ 16,205
Outstanding principal and accrued interest						412
Proceeds from issuance of long-term debt				637
SVIC Warrant
Long-term debt
Number of shares which may be purchased under warrant								2,000,000
Exercise price of warrants (in dollars per share)								$ 0.30
Fair value of warrants		1,200		1,200
Senior Secured Convertible Note Due December 2025
Long-term debt
Face amount								$ 15,000
Debt outstanding, noncurrent portion		$ 16,457		$ 16,457		16,233
Interest rate (as a percent)								2.00%
Debt conversion price (in dollars per share)								$ 1.25
Effective interest rate		3.40%		3.40%
Debt, net of discounts and costs		$ 16,200		$ 16,200
Unsecured Convertible Note Due August 2020
Long-term debt
Face amount	$ 2,300
Original issue discount	$ 200			$ 200
Interest rate (as a percent)	8.00%
Iliad Note
Long-term debt
Additional conversion of principal and accrued interest						$ 1,900
Additional conversion of shares						7,778,270
Conversion of principal and accrued interest						$ 500
Conversion of shares						1,388,890
Paycheck Protection Program Loan
Long-term debt
Face amount							$ 600
Interest rate (as a percent)							1.00%

Leases - Lease Cost and Supplem

Leases - Lease Cost and Supplemental Cash Flow (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Lease, Cost [Abstract]
Operating lease cost	$ 141	$ 158	$ 446	$ 476
Operating cash flows from operating leases	$ 141	$ 155	442	450
Finance leases				$ 96
Lease modification to decrease ROU assets			$ 365

Leases - Leases Supplemental Ba

Leases - Leases Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Sep. 26, 2020	Dec. 28, 2019
Lessee, Lease, Description [Line Items]
Operating lease assets	$ 218	$ 968
Operating lease right-of-use assets - extensible list	us-gaap:OperatingLeaseRightOfUseAsset
Accrued expenses and other current liabilities	$ 235	511
Accrued expenses and other current liabilities - extensible list	us-gaap:AccruedLiabilitiesCurrent
Operating lease liabilities		498
Operating lease liabilities - extensible list	us-gaap:OperatingLeaseLiabilityNoncurrent
Total	$ 235	1,009
Total operating lease liabilities - extensible list	us-gaap:AccruedLiabilitiesCurrent us-gaap:OperatingLeaseLiabilityNoncurrent
Property and equipment, net	$ 199	286
Accrued expenses and other current liabilities	$ 19	18
Accrued expenses and other current liabilities - extensible list	us-gaap:AccruedLiabilitiesCurrent
Other liabilities	$ 51	65
Other liabilities - extensible list	us-gaap:OtherLiabilitiesNoncurrent
Finance Lease, Liability	$ 70	83
Total finance lease liabilities - extensible list	us-gaap:AccruedLiabilitiesCurrent us-gaap:OtherLiabilitiesNoncurrent
Finance leased assets
Lessee, Lease, Description [Line Items]
Property and equipment, at cost	$ 96	96
Accumulated depreciation	(29)	(14)
Property and equipment, net	$ 67	$ 82

Leases - Weighted Average Remai

Leases - Weighted Average Remaining Lease Term (Details)	Sep. 26, 2020	Dec. 28, 2019
Leases
Weighted average remaining lease term - Operating lease	7 months 6 days	2 years 1 month 6 days
Weighted Average Remaining Lease Term - Finance lease	3 years 6 months	4 years 3 months 18 days
Weighted Average Discount Rate - Operating lease	6.10%	7.90%
Weighted Average Discount Rate - Finance lease	5.10%	5.10%

Leases - Maturities of Lease Li

Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands	Sep. 26, 2020	Dec. 28, 2019
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
2020 (remaining 6 months)	$ 120
2021	120
Total lease payments	240
Less: imputed interest	(5)
Total	235	$ 1,009
Finance Lease, Liability, Payment, Due [Abstract]
2020 (remaining 6 months)	6
2021	22
2022	22
2023	22
2024	5
Total lease payments	77
Less: imputed interest	(7)
Total	$ 70	$ 83

Commitments and Contingencies (

Commitments and Contingencies (Litigations and Patent Reexaminations) (Details) $ in Millions	Oct. 31, 2017patent	Sep. 01, 2016patent	Sep. 26, 2020claimpatent	Dec. 29, 2018USD ($)	Dec. 30, 2017USD ($)
Commitments and Contingencies
Legal expenses excluded as a result of TRGP's payment of these expenses under the TRGP Agreement | $				$ 1.8	$ 10.2
Inphi Litigation
Commitments and Contingencies
Number of patents claimed to be invalid			3
912 Patent Reexamination
Commitments and Contingencies
Number of claims rejected | claim			11
SK Hynix Litigation
Commitments and Contingencies
Number of patents infringed upon	2	6

Stockholders' Equity (Narrative

Stockholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	Apr. 17, 2017	Sep. 26, 2020	Sep. 28, 2019	Aug. 07, 2020	Dec. 28, 2019
Serial Preferred Stock
Preferred Stock, Shares Authorized		10,000,000			10,000,000
Preferred Stock, Par or Stated Value Per Share		$ 0.001			$ 0.001
Preferred Stock, Shares Outstanding		0			0
Number of Rights Authorized for Each Outstanding Share of Stock	1
Number of Shares Issued when Right is Exercised	0.001
Purchase price per share	$ 6.56
Number of Days Rights are to be Distributed	10 days
Minimum Beneficial Ownership Percentage for Rights to be Distributed	15.00%
Common Stock
Common stock, par value		$ 0.001			$ 0.001
Common stock, shares authorized		450,000,000		300,000,000	450,000,000
Proceeds from issuance of common stock		$ 12,174	$ 2,457
Exercise price of warrants		$ 0.59			$ 0.62
Series A Preferred Stock
Serial Preferred Stock
Preferred Stock, Shares Authorized		1,000,000			1,000,000
Preferred Stock, Par or Stated Value Per Share		$ 0.001			$ 0.001
Stock-Based Compensation
Shares available for issuance	1,000,000

Stockholders' Equity (Common St

Stockholders' Equity (Common Stock Purchase Agreement) (Details) - USD ($) $ in Thousands	May 06, 2020	May 05, 2020	Sep. 29, 2019	Jun. 24, 2019	May 08, 2020	Sep. 26, 2020	Jun. 27, 2020	Sep. 28, 2019	Sep. 26, 2020
Assets Sold under Agreements to Repurchase [Line Items]
Aggregate amount						$ 9,413	$ 2,761	$ 2,457
2019 Lincoln Park Purchase Agreement
Assets Sold under Agreements to Repurchase [Line Items]
Commitment shares				818,420
Repurchased shares									0
Purchase Agreement Term				36 months
Threshold Percentage of Common Stock to be Sold			9.99%
Period After Purchase Agreement Not to Enter into Variable Rate Transaction			36 months
Terminated Agreement Cost			$ 0
2020 Lincoln Park Purchase Agreement
Assets Sold under Agreements to Repurchase [Line Items]
Aggregate amount		$ 20,000
Commitment shares	1,529,052
Additional commitment shares	917,431
Repurchased shares						13,748,158			23,400,122
Repurchase of common stock price						$ 9,400			$ 12,200
Stock issued common stock						431,798			560,588
Purchase Agreement Term		36 months
Threshold Percentage of Common Stock to be Sold					9.99%
Maximum | 2019 Lincoln Park Purchase Agreement
Assets Sold under Agreements to Repurchase [Line Items]
Aggregate amount				$ 10,000
Additional commitment shares				818,420
Threshold Number of Shares of Common Stock to be Issued				400,000
Threshold Value of Shares of Common Stock to be Issued Under Single Purchase				$ 1,000
Threshold Percentage of Number of Shares Issued Under Regular Purchase to Purchase Additional Amount of Common stock				300.00%
Threshold Percentage of Number of Shares of Common Stock to Purchase Additional Amount of Common stock				30.00%
Maximum | 2020 Lincoln Park Purchase Agreement
Assets Sold under Agreements to Repurchase [Line Items]
Threshold Number of Shares of Common Stock to be Issued		400,000
Threshold Value of Shares of Common Stock to be Issued Under Single Purchase		$ 1,000
Threshold Percentage of Number of Shares Issued Under Regular Purchase to Purchase Additional Amount of Common stock		300.00%
Threshold Percentage of Number of Shares of Common Stock to Purchase Additional Amount of Common stock		30.00%

Stockholders' Equity (Warrants)

Stockholders' Equity (Warrants) (Details) shares in Thousands	9 Months Ended
	Sep. 26, 2020$ / sharesshares
Class of Warrant or Right [Line Items]
Warrants Outstanding, Beginning Balance | shares	15,010
Warrants Granted | shares	175
Warrants Exercised | shares	(300)
Warrants Expired | shares	(1,099)
Warrants Outstanding, Ending Balance | shares	13,786
Outstanding, Weighted-Average Exercise Price, Beginning balance | $ / shares	$ 0.62
Weighted-Average Exercise Price, Granted | $ / shares	0.20
Weighted-Average Exercise Price, Exercised | $ / shares	0.11
Weighted-Average Exercise Price, Expired | $ / shares	1
Outstanding, Weighted-Average Exercise Price, Ending balance | $ / shares	$ 0.59

Stock-Based Awards (Narrative)

Stock-Based Awards (Narrative) (Details)	9 Months Ended
	Sep. 26, 2020shares
Amended 2006 Plan [Member]
Stock-Based Compensation
Shares available for issuance	1,794,072
Rate of vesting of options granted	25.00%
Vesting period of options granted, in years	4 years
Expiration of vested options, period from date of grant	10 years
Vests annually on each anniversary | Restricted Stock | 2006 Plan
Stock-Based Compensation
Vesting period of options granted, in years	2 years
Vest semi-annually | Restricted Stock | 2006 Plan
Stock-Based Compensation
Vesting period of options granted, in years	4 years

Stock-Based Awards (Schedule Of

Stock-Based Awards (Schedule Of Stock Option Activity) (Details) shares in Thousands	9 Months Ended
	Sep. 26, 2020$ / sharesshares
Number of Shares
Options outstanding, Number of Shares, Beginning Balance | shares	7,357
Options granted, Number of Shares | shares	600
Options exercised, Number of Shares | shares	(200)
Options expired/forfeited, Number of Shares | shares	(853)
Options outstanding, Number of Shares, Ending Balance | shares	6,904
Weighted-Average Exercise Price
Options outstanding, Weighted-Average Exercise Price, Beginning Balance | $ / shares	$ 1.17
Options granted, Weighted-Average Exercise Price | $ / shares	0.47
Options exercised, Weighted-Average Exercise Price | $ / shares	0.14
Options expired/forfeited, Weighted Average Exercise Price | $ / shares	0.80
Options outstanding, Weighted-Average Exercise Price, Ending Balance | $ / shares	$ 1.18

Stock-Based Awards (Schedule _2

Stock-Based Awards (Schedule of Restricted Stock Awards) (Details) shares in Thousands	9 Months Ended
	Sep. 26, 2020$ / sharesshares
Number of Shares
Balance nonvested, Number of Shares, Beginning Balance | shares	3,066
Granted, Number of Shares | shares	625
Vested, Number of Shares | shares	(1,064)
Forfeited, Number of Shares | shares	(90)
Balance nonvested, Number of Shares, Ending Balance | shares	2,537
Weighted-Average Exercise Price
Balance nonvested, Weighted-Average Grant-Date Fair Value per Share, Beginning Balance | $ / shares	$ 0.52
Granted, weighted-average grant date fair value | $ / shares	0.47
Vested, Weighted-Average Grant-Date Fair Value per Share | $ / shares	0.47
Forfeited, Weighted-Average Grant-Date Fair Value per Share | $ / shares	0.42
Balance nonvested, Weighted-Average Grant-Date Fair Value per Share, Ending Balance | $ / shares	$ 0.53

Stock-Based Awards (Schedule _3

Stock-Based Awards (Schedule of Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 212	$ 243	$ 582	$ 782
Unearned stock-based compensation	1,600		$ 1,600
Expects to recognize over a weighted-average period			2 years 4 months 24 days
Cost of sales
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	1	6	$ 8	20
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	63	67	154	163
Selling, general and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 148	$ 170	$ 420	$ 599