SecProbe.io

September 12, 2006

Mail Stop 6010

Chun K. Hong
President and Chief Executive Officer
Netlist, Inc.
475 Goddard
Irvine, CA 92618

Re: Netlist, Inc.
  Registration Statement on Form S-1
  Filed August 18, 2006
           File No. 333-136735

Dear Mr. Hong:

We have reviewed your filing and have the following comments.  Where
indicated, we think you should re vise your document in response to these comments.  If
you disagree, we will consider your explanation as to why our comment is inapplicable or
a revision is unnecessary.  Please be as deta iled as necessary in your explanation.  In
some of our comments, we may ask you to provi de us with information so we may better
understand your disclosure.  After reviewing th is information, we may raise additional
comments.

Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our comments or on any other aspect of our
review.  Feel free to call us at the telephone numbers listed at the end of this letter.

General
1. Please confirm that any preliminary prosp ectus you circulate will include all non-
Rule 430A information.  This includes the price range and related information
based on a bona fide estimate of the public offering price within that range, and
other information that was left blank thr oughout the document.  Also, note that we
may have additional comments after you file this information.

Chun K. Hong
Netlist, Inc.
September 12, 2006 Page 2

Fee Table
2. If you are calculating the fee based on ru le 457(a), the fee table should include the
amount of shares to be registered and the proposed maximum offering price.
Prospectus
3. Please provide us a copy of the graphics  you intend to use in your document.
4. Please tell us how the graphics do not lead investors to believe that you manufacture integrated circuits or printe d circuit boards.  Also tell us how the
manner that you depict the products in th e graphics accurately  represents their
proportionate contribution to your business.

Table of Contents, page i
5. You may not disclaim responsibility for your  disclosure.  Please revise the last
paragraph on page i accordingly.

Prospectus Summary, page 1
6. Refer to the first paragraph of your disclo sure here and on page 7.  Please tell us
where you have incorporated documents by reference into this prospectus and what authority permits you to incorporat e such disclosure into a prospectus
included in registration statement on Form S-1 for an initial public offering.
7. Please tell us the criteria you used to determine which customers to name in your
summary and on page 52.  Also tell us  whether you named all customers who
satisfy those criteria.
8. Please clarify the phrases “form factor” and “pla nar design.”
9. Please highlight in the summary your reliance on  the server market.

Netlist, Inc., page 1
10. We note your objective on page 2 to de velop non-volatile memory.  If your
current products consist only of volatile memory, please say so in clear, direct
language that explains what  volatile memory is in a prominent section of your
summary.

Chun K. Hong
Netlist, Inc.
September 12, 2006 Page 3
Special Note Regarding Forward Looking Statements, page 23
11. Please remove the reference to statutory provisions that do not apply to initial
public offerings.

Use of Proceeds, page 24
12. Please disclose the approximate amount of proceeds intended to be used for each identified purpose.

Overview, page 30
13. Please clarify the nature of the issues you mention in the last sentence on page 30.

Capital Resources, page 41
14. Please discuss the reasons for the refina ncing of the convertible debt of $950,000
and the trends in cost of cap ital from the refinancing.
15. Please discuss the loan covenants you had violated and the reasons for the
violations.
16. With a view toward disclosure, please te ll us whether your obligation to issue $4
million in equity by March 31, 2007 expires upon your initial public offering.

Industry Background, page 45
17. Please provide us with copies of the indus try reports you cite on pages 45 and 46.
Clearly mark the relevant sections that  support the data you have included in your
prospectus and the page numb er of your prospects where such data has been used.
Also, tell us whether the s ources of the cited data have  consented to your use of
their names and data and whether any of  the reports were commissioned by you or
prepared specifically for your use.
18. Please provide us with independent s upport for your claim on page 49 that you
believe that you “have established a reput ation as a technology leader in the
design, development, and manufacture of hi gh performance memory subsystems.”

Manufacturing, page 53
19. Please describe how your manufacturing pr ocesses invoke the environmental laws
mentioned on page 18 and clarify whether you are in compliance with those laws.

Chun K. Hong
Netlist, Inc.
September 12, 2006 Page 4
Intellectual Property, page 55
20. Please discuss the duration of your material patents.

Facilities, page 56
21. With a view toward disclosure, please tell us the status of your China facility.  Do
you know the size or location?  Will you own or lease?

Management, page 57
22. It appears that your CFO also is a partner at another firm .  If so, please add a risk
factor to describe the effect of a part-time CFO.  Also indicate the amount of time he devotes to your company.

Director Compensation, page 60
23. Please disclose how you will determine the exercise price of the option grants.

Employment Agreements, page 64
24. Please describe the connection of your employment agreement with your CFO to
your agreement with Tatum.  Also disc lose the option grant provision of the
employment agreement.

Related-Party Transactions, page 67
25. Please disclose the date of the loan to Mr. P. K. Hong.
26. Please tell us why Mr. P. K. Hong is not identified as an executive officer on page
57.
27. Please file the agreements mentioned in this section.
28. Please include disclosure in this section for each of the past three years.  For
example, we note the full-year disclosure about Mr. P. K. Hong is limited to 2005.  We also note the transactions mentioned in Note 7 on page F-23.  See instruction
2 to Regulation S-K Item 404.

Chun K. Hong
Netlist, Inc.
September 12, 2006 Page 5
Other Transactions, page 68
29. Given your cash balance, please tell us  how you will pay the bonuses to your
affiliates without the proceeds of this offering.  If you will use the proceeds for this purpose, please revise the “Use of Proceeds” disclosure on page 24 accordingly.
30. In the selling stockholders ta ble, please clarify how you have reflected the options
mentioned in this section.

Principal and Selling Stockholders, page 69
31. Please disclose the natural person who has voting or investment power for the shares held by Serim Paper Manufacturing.
32. Please tell us whether the se lling stockholders are broker-de alers or affiliates of a
broker-dealer.
33. With a view toward disclosure, please tell us when each of the selling shareholders acquired the shares to be sold in this offering.  Also please tell us the
amount of consideration paid.
34. Please include a row in the table for Mr. Skaggs.
35. Refer to footnote 2.  Please clarify how you will allocate a partia l exercise of the
option.

Voting Rights, page 71
36. With a view toward disclosure, please confirm whether your disclosed majority
voting rights on “all actions” incl udes director elections.

Federal Estate Tax, page 78
37. You may not disclaim responsibility for your  disclosure.  Please revise the first
and second sentences of the second paragraph accordingly.

Penalty Bids, page 81
38. Please clarify what you mean by presales.

Chun K. Hong
Netlist, Inc.
September 12, 2006 Page 6
Financial Statements

General
39. Please update the financial statements wh en required by Rule 3-12 of Regulation
S-X.

Balance Sheets, page F-4
40. Revise to include a pro forma balan ce sheet (excluding effects of offering
proceeds) presented along side of the hist orical balance sheet giving effect to the
conversion of the convertible preferred stock and conve rtible notes payable and
add a related footnote which describes the pro forma presentation.  Also, to the extent the conversion of the preferred stoc k and notes will result in a material
reduction of earnings appli cable to common shareholders (excluding effects of
offering), pro forma EPS for the latest year and interim period, if applicable,
should be presented giving effect to the conversion (but not the offering).

Note 2 - Summary of Significant Accounting Policies, page F-10

Fiscal Year, page F-10
41. Please revise the financial statements a nd all related tables and disclosures to
identify the actual dates on which your fis cal periods end.  Similarly, present audit
reports that opine on financ ial statements as of and for the periods ended on the
actual dates on which your fiscal periods end.

Revenue Recognition, page F-12
42. Please expand to further clarify why your revenue recognition practices for product sales of high performance memory subsystems and sales of excess inventories are appropriate under SAB Topi c 13A.   For instance, describe what
you consider to be pervasive evidence of  an arrangement, clarify how you obtain
customer acceptance and describe any post-shipment obligations.  Please also clarify the nature and extent of any signi ficant differences in sales terms between
sales of memory sub-systems and sales of excess inventory;  and, explain how
those differences, if any, are consid ered in your revenue practices.
43. Please tell us about the terms and conditions of sales of products, including excess inventories, to distributors .  Show us that your revenue  practices for transactions
with these entities are appropriate.

Chun K. Hong
Netlist, Inc.
September 12, 2006 Page 7
44. Please expand to describe how you are notif ied that inventory has been “pulled”
from a hub for use by a customer.  Explai n how you manage that inventory to
ensure that sales are recognized  in the appropriate periods.

Stock-based Compensation, page F-13
45. We see that accounting for stock-base d compensation was significant to your
results of operations prior to the adoption of SFAS 123(R) .  Please tell us about
and expand to describe how you determined the fair value of your common shares for intrinsic value purposes.   Please address the valuat ions at the dates of any
significant transactions, such as the st ock compensation charge in 2003. Explain
why you believe your estimates are appropriate.
46. Please tell us how you measured expected st ock-price volatility in periods prior to
the adoption of SFAS 123(R).  Explain the reasons for the significant decrease in
expected volatility between 2003 and 2005.  Also, clarify the nature of and reasons for any changes in your methods  and assumptions upon adoption of SFAS
123(R).
47. We see the significant difference between fair and the intrinsic value charges for stock-based compensation in 2003 where the intrinsic value charge significantly
exceeds the fair value charge.  Please further explain to us how the underlying
amounts were measured and describe the reasons for the unus ual relationship.
48. Please tell us why the pro forma stoc k-based compensation amount for 2005 is a
reduction of the reported net loss totaling $354,000.

Note 7 – Convertible Notes Payable, page F-23
49. Please tell us and disclose how you estimated  the fair value of the preferred shares
underlying the convertible notes at issuance and at each modification.
50. Please tell us why the accounting for the conversion options of the various notes is appropriate under SFAS 133.

Item 16, Exhibits and Financial Statement Schedules
51. Please include updated accountants’ consents  with any amendment to the filing.
52. Please file complete exhibits with all attachments completed.  For example, we note the blanks in the at tachment to exhibit 10.10.

Chun K. Hong
Netlist, Inc.
September 12, 2006 Page 8
Item 17.  Undertakings
53. Please note that due, in part, to the la nguage of Securities Act Rule 430C(d), the
undertakings included in Regulation S-K Item 512(a)(5)(ii) and 512(a)(6) should
be included in filings for initial publi c offerings.  Please revise your filing to
include those undertakings.
As appropriate, please amend your regist ration statement in response to these
comments.  You may wish to provide us with marked copies of the amendment to expedite our review.  Please furnish a cove r letter with your amendment that keys your
responses to our comments and provides any requested information.  Detailed cover
letters greatly facilitate our review.  Please understand that we may have additional
comments after reviewing your amendmen t and responses to our comments.
We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Act of 1933 and that they have  provided all information investors require
for an informed investment decision.  Since the company and its management are in
possession of all facts relating to a company’ s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.
 Notwithstanding our comments, in the ev ent the company requests acceleration of
the effective date of the pending registration statement, it should furnish a letter, at the
time of such request, acknowledging that:
• should the Commission or the staff, acting pursuant to delegated authority,
declare the filing effective, it does not foreclose the Commission from taking any
action with respect to the filing;
• the action of the Commission or the staff,  acting pursuant to delegated authority,
in declaring the filing effective, does not relieve the company from its full
responsibility for the adequacy  and accuracy of the disclosure in the filing; and
• the company may not assert staff comment s and the declaration of effectiveness
as a defense in any proceeding initiat ed by the Commission or any person under
the federal securities laws of the United States.
 In addition, please be advi sed that the Division of En forcement has access to all
information you provide to the staff of the Di vision of Corporation Finance in connection
with our review of your filing or in response to our comments on your filing.
We will consider a written request for acceleration of the effective date of the
registration statement as a confirmation of th e fact that those reque sting acceleration are
aware of their respective re sponsibilities under the S ecurities Act of 1933 and the
Securities Exchange Act of 1934 as they rela te to the proposed public offering of the

Chun K. Hong
Netlist, Inc.
September 12, 2006 Page 9
securities specified in the above registration statement.  We will act  on the request and,
pursuant to delegated authority, grant acceleration of the effective date.
We direct your attention to Rules 46 0 and 461 regarding requesting acceleration
of a registration statement.  Please allow ad equate time after the filing of any amendment
for further review before submitting a request for acceleration.  Please provide this
request at least two business days in a dvance of the requested effective date.

You may contact Praveen Kartholy at ( 202) 551-3778 or Gary Todd at (202) 551-
3605 if you have questions regarding comments on the financial statements and related
matters.  Please contact Tom Jones at (202)  551-3602 or me at ( 202) 551-3617 with any
other questions.

Sincerely,

       R u s s e l l  M a n c u s o
       B r a n c h  C h i e f

cc (via fax): James W. Loss