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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Pixelworks Inc | NASDAQ:PXLW | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.02 | 1.65% | 1.23 | 1.22 | 1.23 | 1.34 | 1.22 | 1.25 | 1,344,679 | 18:26:19 |
☒
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ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Oregon
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91-1761992
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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226 Airport Parkway, Suite 595
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San Jose
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,
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California
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95110
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, par value $0.001 per share
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PXLW
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The Nasdaq Global Market
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Large accelerated filer
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☐
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Accelerated filer
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☒
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Non-accelerated filer
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☐
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Smaller reporting company
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☒
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Emerging growth company
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☐
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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Item 1.
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Business.
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Market
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Products
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Mobile (Smartphone, Gaming, Tablet)
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Visual processors and software
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Home Entertainment (TV, PVR, OTA, Projector)
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XCode® transcoding solutions and visual processors
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Content (Creation, Remastering, Delivery)
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TrueCut® platform for content creators/video providers
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Business and Education (Projectors)
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Visual processors
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•
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Contrast and Brightness: Almost all movies available to consumers today use the "Rec.709" ITU standard format. This format defines brightness levels up to around 100 "nits" (a standard measure of brightness), whereas HDR TVs are five to ten times brighter, from 540 nits upwards. Most mobile devices support over 400 nits and sometimes over 600 nits.
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•
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Color Gamut: DCI-P3 has a 25% larger color gamut than Rec.709.
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•
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Frame Rate: TVs commonly display at 120 frames per second (120 Hz) and up to 240 Hz on more sophisticated higher-end models. Mobile devices are not far behind with displays that run at 60 to 90 frames per second. Some of the newest, flagship smartphones now have displays that run at up to 120 Hz.
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•
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Resolution: TVs have achieved 4k resolutions (3840x2160) and mobile devices today can achieve up to 3440x1440 resolution, and while some content is available in 4k resolution, most movies are only available in FHD or HD resolutions, which is typically 1920x1080 and 1280x720 respectively.
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•
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Smartphones. Smartphones have become a popular choice for many consumers. International Data Corporation ("IDC") estimates that 1.52 billion smartphones will be sold in 2023. The resolution of smartphone displays is growing, while the color gamut and contrast is moving toward DCI-P3 and HDR. These improvements in displays actually exacerbate the quality issues of video playback, a growing problem as users increasingly use their smartphones as their primary form of video consumption.
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•
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Tablets. The line between tablets and smartphones is becoming increasingly indistinct as more tablets are offering mobile connectivity and are now available in sizes similar to those of smartphones. Tablets offer broad appeal to consumers. With the display being the salient component of smartphones and tablets, and the rapidly increasing use of these devices for video consumption, we believe that the incorporation of video display processing is the next logical step.
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•
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Consumer Products - OEMs and Original Design Manufacturers ("ODMs") design products for the consumer electronics segments.
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•
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OTA - Over the Air applications for single, dual, and quad streaming requirements. End users who want to either "cut the cord" or supplement their service offerings.
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•
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IP Streaming - Network streaming devices capable of content portability, and support for your own screen (phone and tablet devices), deployed by service operators.
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•
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Customer retention
|
•
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Reduced use of network bandwidth for free OTA channels
|
•
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One menu that provides aggregation of Linear, Video-on-Demand, OTT, and OTA content
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•
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Reduced monthly fees related to lower re-transmission fees
|
•
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MotionEngine® MEMC. Our proprietary MEMC technology significantly improves the performance and viewing experience of any screen by addressing problems such as judder and motion blur. Unlike competitive solutions it also reduces halo effects that are a byproduct of MEMC. Halos are objectionable blurred regions that surround moving objects as the MEMC algorithms try to reconstruct missing image data caused by the concealing and revealing of objects as they pass over or behind one another. Removing halos dramatically improves image quality and is of particular importance on high-resolution displays where artifacts become more visible.
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•
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Advanced Scaling. As display resolutions continue to increase, there is a need to convert lower resolution content to higher resolution in order to display content properly. With the latest wave of high-resolution displays, the quality and quantity demands of scaling have increased significantly. Artifacts become more noticeable on these types of displays as they distract from the realism effect. In addition, with the availability of high resolution content lagging behind the availability of high resolution displays, high-quality scaling is required to ensure high resolution displays do not suffer when compared to Full-HD displays of the same size. Our advanced scaling is designed to ensure that up-conversion of lower resolution content is of the highest quality in maintaining the fidelity of image.
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•
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Mobile Video Display Processing. We have developed innovative video display processing solutions, that are designed to optimize power consumption for mobile devices. Beyond MEMC and advanced scaling, these mobile solutions provide the kind of improvements in color, contrast, sharpness and de-blur that are currently only found in high quality TVs today. Furthermore, this technology can reduce system power consumption and extend battery life.
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•
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Transcoding/Decoding. Digital Delivery forms the bulk of not just video content, but all internet bandwidth today. However, throughout the entire chain from inception to consumption, there are multiple variations in bitrate, resolution, and codecs used for both audio and video. Transcoding is a fundamental technology used throughout this pipeline that leads to moving pictures viewed on TVs and mobile devices. The XCODE family of ASICs has enabled many devices within this pipeline, from the racks in some service providers all the way down to the home user watching broadcast OTA TV on a smartphone. XCODE technology provides solutions that deliver UHD Blu-ray PVRs with capability of transcoding recorded content suitable for viewing on smartphones. The technology supports today’s broadcast standards, such as ATSC 1.0, DVB/T/T2/S/S2, ISDB/T/S, and ADSB and is scalable to support upcoming broadcast standards such as ATSC 3.0.
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•
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SDR to HDR Conversion. UHD video has standardized on a technology known as HDR to deliver higher dynamic range content. This has resulted in several competing HDR deployments like HDR10, HLG and HDR10+ with support by multiple industry giants. Our HDR conversion technology can not only convert between SDR (Standard Dynamic Range) and HDR10, it can also convert among HDR10, HLG and HDR10+ solving an interconnectivity problem between content formatted in one HDR format to Display devices that supports a different HDR standard.
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•
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ImageProcessor ICs. Our ImageProcessor ICs include embedded microprocessors, digital signal processing technology and software that control the operations and signal processing within high-end display systems. ImageProcessor ICs were our first product offerings and continue to comprise the majority of our business. We have continued to refine the architectures for optimal performance, manufacturing our products on process technologies that align with our customers’ requirements. Additionally, we provide a software development environment and operating system that enables our customers to more quickly develop and customize the "look and feel" of their products.
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•
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Video Co-Processor ICs. Products in this category work with an image processor to post-process video signals to enhance the performance or feature set of the overall video solution (for example, by significantly reducing judder and motion blur). Our Video Co-Processor ICs can be used with our ImageProcessor ICs or with image processing solutions from other manufacturers, and in most cases can be incorporated without assistance from the supplier of the base image processor. This flexibility enables manufacturers to augment their existing or new designs to enhance their video display products.
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•
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Transcoder ICs. Our Transcoder ICs include embedded microprocessors, digital signal processing technology and software that control the operations and signal processing for converting multiple bitrates, resolutions and codecs to provide bandwidth efficient video transmissions based on industry standard protocols. Our transcoder technology allows for single, dual and even quad streaming solutions for OTA products. Like our other ICs, we have continued to refine the architectures for optimal performance, manufacturing our products on process technologies that align with our customers’ requirements. Additionally, we provide a software development environment that enables our customers to more quickly develop and customize their products.
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•
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Distributors. Distributors are resellers in local markets who provide engineering support and stock our semiconductors in direct relation to specific manufacturing customer orders. Our distributors often have valuable and established relationships with our end customers, and in certain countries it is customary to sell to distributors. While distributor payment to us is not dependent upon the distributor’s ability to resell the product or to collect from the end customer, our distributors may provide longer payment terms to end customers than those we would offer. Sales to distributors accounted for 44%, 44% and 47% of revenue in 2019, 2018 and 2017, respectively.
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•
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Direct Relationships. We have established direct relationships with companies that manufacture high-end display systems. Some of our direct relationships are supported by commission-based manufacturers’ representatives, who are independent sales agents that represent us in local markets and provide engineering support but do not carry inventory. Revenue through direct relationships accounted for 56%, 56% and 53% of total revenue in 2019, 2018 and 2017, respectively.
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•
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Integrators. Integrators are OEMs who build display devices based on specifications provided by branded suppliers.
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•
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Branded Manufacturers. Branded manufacturers are globally recognized manufacturers who develop display device specifications, and manufacture, market and distribute display devices either directly or through resellers to end-users.
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•
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Branded Suppliers. Branded suppliers are globally recognized suppliers who develop display device specifications and then source them from integrators, typically in Asia, and distribute them either directly or through resellers to end-users.
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Item 1A.
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Risk Factors.
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•
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difficulties in managing international distributors and manufacturers due to varying time zones, languages and business customs;
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•
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compliance with U.S. laws affecting operations outside of the U.S., such as the Foreign Corrupt Practices Act;
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•
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reduced or limited protection of our IP, particularly in software, which is more prone to design piracy;
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•
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difficulties in collecting outstanding accounts receivable balances;
|
•
|
changes in tax rates, tax laws and the interpretation of those laws;
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•
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difficulties regarding timing and availability of export and import licenses;
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•
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ensuring that we obtain complete and accurate information from our Asian operations to make proper disclosures in the United States;
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•
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political and economic instability;
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•
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difficulties in maintaining sales representatives outside of the U.S. that are knowledgeable about our industry and products;
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•
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changes in the regulatory environment in China, Japan, Taiwan and Korea that may significantly impact purchases of our products by our customers or our customers’ sales of their own products;
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•
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outbreaks of health epidemics in China or other parts of Asia, including COVID-19;
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•
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imposition of new tariffs, quotas, trade barriers and similar trade restrictions on our sales;
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•
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varying employment and labor laws; and
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•
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greater vulnerability to infrastructure and labor disruptions than in established markets.
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•
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reduced end user demand due to the economic impact of any natural disaster;
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•
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a disruption to the global supply chain for products manufactured in areas affected by natural disasters that are included in products purchased either by us or by our customers;
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•
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an increase in the cost of products that we purchase due to reduced supply; and
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•
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other unforeseen impacts as a result of the uncertainty resulting from a natural disaster.
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•
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difficulties in hiring and retaining necessary technical personnel;
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•
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difficulties in reallocating engineering resources and overcoming resource limitations;
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•
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difficulties with contract manufacturers;
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•
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changes to product specifications and customer requirements;
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•
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changes to market or competitive product requirements; and
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•
|
unanticipated engineering complexities.
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•
|
stop selling products using technology that contains the allegedly infringing IP;
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•
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attempt to obtain a license to the relevant IP, which may not be available on terms that are acceptable to us or at all;
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•
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attempt to redesign those products that contain the allegedly infringing IP; or
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•
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pay damages for past infringement claims that are determined to be valid or which are arrived at in settlement of such litigation or threatened litigation.
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•
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actual or anticipated fluctuations in our operating results;
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•
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changes in or failure to meet expectations as to our future financial performance;
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•
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changes in or failure to meet financial estimates of securities analysts;
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•
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announcements by us or our competitors of technological innovations, design wins, contracts, standards, acquisitions or divestitures;
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•
|
the operating and stock price performance of other comparable companies;
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•
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issuances or proposed issuances of equity, debt or other securities by us, or sales of securities by our security holders; and
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•
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changes in market valuations of other technology companies.
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•
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if the number of directors is fixed by the board at eight or more, our board of directors is divided into three classes serving staggered terms, which would make it more difficult for a group of shareholders to quickly replace a majority of directors;
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•
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our board of directors is authorized, without prior shareholder approval, to create and issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to acquire us or to effect a change of control, commonly referred to as "blank check" preferred stock;
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•
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members of our board of directors can be removed only for cause and at a meeting of shareholders called expressly for that purpose, by the vote of 75 percent of the votes then entitled to be cast for the election of directors;
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•
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our board of directors may alter our bylaws without obtaining shareholder approval; and shareholders are required to provide advance notice for nominations for election to the board of directors or for proposing matters to be acted upon at a shareholder meeting;
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•
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Oregon law permits our board to consider other factors beyond stockholder value in evaluating any acquisition offer (so-called "expanded constituency" provisions); and
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•
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a supermajority (67%) vote of shareholders is required to approve certain fundamental transactions.
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Item 1B.
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Unresolved Staff Comments.
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Item 2.
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Properties.
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Location
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Function(s)
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Square Feet Utilized
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Lease Expiration
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China
|
|
Engineering; sales;
customer support
|
|
36,000
|
|
Various dates
through
October 2022
|
Toronto
|
|
Engineering; administration
|
|
10,000
|
|
March 2027
|
California
|
|
Administration;
engineering; sales
|
|
10,000
|
|
September 2024
|
Taiwan
|
|
Customer support; sales;
operations; engineering
|
|
16,000
|
|
Various dates through November 2020
|
Oregon
|
|
Administration
|
|
5,000
|
|
December 2024
|
Japan
|
|
Sales; customer support
|
|
3,000
|
|
January 2021
|
Item 3.
|
Legal Proceedings.
|
Item 4.
|
Mine Safety Disclosures.
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
Item 6.
|
Selected Financial Data.
|
|
Year ended December 31,
|
|
2019 v. 2018
|
|
2018 v. 2017
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
$ change
|
|
% change
|
|
$ change
|
|
% change
|
||||||||||||
Revenue, net
|
$
|
68,755
|
|
|
$
|
76,554
|
|
|
$
|
80,637
|
|
|
$
|
(7,799
|
)
|
|
(10
|
)%
|
|
$
|
(4,083
|
)
|
|
(5
|
)%
|
|
Year ended December 31,
|
|||||||||||||||||||
|
2019
|
|
% of
revenue
|
|
2018
|
|
% of
revenue
|
|
2017
|
|
% of
revenue
|
|||||||||
Direct product costs and related overhead 1
|
$
|
32,587
|
|
|
47
|
%
|
|
$
|
35,116
|
|
|
46
|
%
|
|
$
|
35,984
|
|
|
45
|
%
|
Amortization of acquired developed technology
|
1,192
|
|
|
2
|
|
|
1,192
|
|
|
2
|
|
|
497
|
|
|
1
|
|
|||
Stock-based compensation
|
367
|
|
|
1
|
|
|
324
|
|
|
0
|
|
|
243
|
|
|
0
|
|
|||
Inventory charges 2
|
102
|
|
|
0
|
|
|
(31
|
)
|
|
0
|
|
|
184
|
|
|
0
|
|
|||
Inventory step-up and backlog amortization
|
12
|
|
|
0
|
|
|
475
|
|
|
1
|
|
|
1,965
|
|
|
2
|
|
|||
Restructuring
|
—
|
|
|
0
|
|
|
—
|
|
|
0
|
|
|
—
|
|
|
0
|
|
|||
Total cost of revenue
|
$
|
34,260
|
|
|
50
|
%
|
|
$
|
37,076
|
|
|
48
|
%
|
|
$
|
38,873
|
|
|
48
|
%
|
Gross profit
|
$
|
34,495
|
|
|
50
|
%
|
|
$
|
39,478
|
|
|
52
|
%
|
|
$
|
41,764
|
|
|
52
|
%
|
1
|
Includes purchased materials, assembly, test, labor, employee benefits and royalties.
|
2
|
Includes charges to reduce inventory to lower of cost or market and a benefit for sales of previously written down inventory.
|
|
Year ended December 31,
|
|
2019 v. 2018
|
|
2018 v. 2017
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
$ change
|
|
% change
|
|
$ change
|
|
% change
|
||||||||||||
Research and development
|
$
|
26,018
|
|
|
$
|
22,881
|
|
|
$
|
21,427
|
|
|
$
|
3,137
|
|
|
14
|
%
|
|
$
|
1,454
|
|
|
7
|
%
|
|
Year ended December 31,
|
|
2019 v. 2018
|
|
2018 v. 2017
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
$ change
|
|
% change
|
|
$ change
|
|
% change
|
||||||||||||
Selling, general and administrative
|
$
|
21,202
|
|
|
$
|
19,953
|
|
|
$
|
20,450
|
|
|
$
|
1,249
|
|
|
6
|
%
|
|
$
|
(497
|
)
|
|
(2
|
)%
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Employee severance and benefits
|
$
|
398
|
|
|
$
|
714
|
|
|
$
|
1,920
|
|
Facility closure and consolidations
|
—
|
|
|
750
|
|
|
—
|
|
|||
Total restructuring expense
|
$
|
398
|
|
|
$
|
1,464
|
|
|
$
|
1,920
|
|
|
|
|
|
|
|
||||||
Included in operating expenses
|
$
|
398
|
|
|
$
|
1,464
|
|
|
$
|
1,920
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Other income
|
$
|
425
|
|
|
$
|
225
|
|
|
$
|
190
|
|
Interest income
|
327
|
|
|
296
|
|
|
141
|
|
|||
Interest expense
|
(158
|
)
|
|
(369
|
)
|
|
(455
|
)
|
|||
Gain on debt extinguishment
|
—
|
|
|
1,272
|
|
|
29
|
|
|||
Discount accretion on convertible debt fair value
|
—
|
|
|
(69
|
)
|
|
(196
|
)
|
|||
Fair value adjustment on convertible debt conversion option
|
—
|
|
|
—
|
|
|
(743
|
)
|
|||
Total interest income (expense) and other, net
|
$
|
594
|
|
|
$
|
1,355
|
|
|
$
|
(1,034
|
)
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Provision for income taxes
|
$
|
453
|
|
|
$
|
448
|
|
|
$
|
493
|
|
|
Payments Due By Period
|
||||||||||||||||||
Contractual Obligation
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
||||||||||
Operating leases
|
$
|
6,572
|
|
|
$
|
1,810
|
|
|
$
|
2,314
|
|
|
$
|
1,755
|
|
|
$
|
693
|
|
Estimated purchase commitments to contract manufacturers
|
6,380
|
|
|
6,380
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other purchase obligations and commitments
|
1,310
|
|
|
262
|
|
|
524
|
|
|
524
|
|
|
—
|
|
|||||
Payments on accrued balances related to asset financings
|
1,090
|
|
|
507
|
|
|
583
|
|
|
—
|
|
|
—
|
|
|||||
Total 1
|
$
|
15,352
|
|
|
$
|
8,959
|
|
|
$
|
3,421
|
|
|
$
|
2,279
|
|
|
$
|
693
|
|
1
|
We are unable to reliably estimate the timing of future payments related to uncertain tax positions and repatriation of foreign earnings; therefore, $2.3 million of income taxes payable has been excluded from the table above.
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk.
|
Item 8.
|
Financial Statements and Supplementary Data.
|
|
/s/ KPMG LLP
|
|
We have served as the Company’s auditor since 1997.
|
|
Portland, Oregon
|
March 11, 2020
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
7,257
|
|
|
$
|
17,944
|
|
Short-term marketable securities
|
6,975
|
|
|
6,069
|
|
||
Accounts receivable, net
|
10,915
|
|
|
6,982
|
|
||
Inventories
|
5,401
|
|
|
2,954
|
|
||
Prepaid expenses and other current assets
|
1,689
|
|
|
1,494
|
|
||
Total current assets
|
32,237
|
|
|
35,443
|
|
||
Property and equipment, net
|
4,608
|
|
|
6,151
|
|
||
Operating lease right of use assets
|
5,434
|
|
|
—
|
|
||
Other assets, net
|
1,267
|
|
|
1,132
|
|
||
Acquired intangible assets, net
|
2,704
|
|
|
4,208
|
|
||
Goodwill
|
18,407
|
|
|
18,407
|
|
||
Total assets
|
$
|
64,657
|
|
|
$
|
65,341
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
818
|
|
|
$
|
2,116
|
|
Accrued liabilities and current portion of long-term liabilities
|
8,692
|
|
|
10,256
|
|
||
Current portion of income taxes payable
|
164
|
|
|
263
|
|
||
Total current liabilities
|
9,674
|
|
|
12,635
|
|
||
Long-term liabilities, net of current portion
|
982
|
|
|
1,017
|
|
||
Operating lease liabilities, net of current portion
|
4,212
|
|
|
—
|
|
||
Income taxes payable, net of current portion
|
2,260
|
|
|
2,299
|
|
||
Total liabilities
|
17,128
|
|
|
15,951
|
|
||
Commitments and contingencies (Note 13)
|
|
|
|
||||
Shareholders' equity:
|
|
|
|
||||
Preferred stock, $0.001 par value, 50,000,000 shares authorized, none issued
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value; 250,000,000 shares authorized, 38,434,488 and 36,937,458 shares issued and outstanding as of December 31, 2019 and 2018, respectively
|
436,122
|
|
|
428,903
|
|
||
Accumulated other comprehensive income
|
12
|
|
|
15
|
|
||
Accumulated deficit
|
(388,605
|
)
|
|
(379,528
|
)
|
||
Total shareholders' equity
|
47,529
|
|
|
49,390
|
|
||
Total liabilities and shareholders' equity
|
$
|
64,657
|
|
|
$
|
65,341
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue, net (1)
|
$
|
68,755
|
|
|
$
|
76,554
|
|
|
$
|
80,637
|
|
Cost of revenue (2)
|
34,260
|
|
|
37,076
|
|
|
38,873
|
|
|||
Gross profit
|
34,495
|
|
|
39,478
|
|
|
41,764
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development (3)
|
26,018
|
|
|
22,881
|
|
|
21,427
|
|
|||
Selling, general and administrative (4)
|
21,202
|
|
|
19,953
|
|
|
20,450
|
|
|||
Restructuring
|
398
|
|
|
1,464
|
|
|
1,920
|
|
|||
Total operating expenses
|
47,618
|
|
|
44,298
|
|
|
43,797
|
|
|||
Loss from operations
|
(13,123
|
)
|
|
(4,820
|
)
|
|
(2,033
|
)
|
|||
Interest income (expense) and other, net (5)
|
594
|
|
|
1,355
|
|
|
(1,034
|
)
|
|||
Gain on sale of patents
|
3,905
|
|
|
—
|
|
|
—
|
|
|||
Total other income (expense), net
|
4,499
|
|
|
1,355
|
|
|
(1,034
|
)
|
|||
Loss before income taxes
|
(8,624
|
)
|
|
(3,465
|
)
|
|
(3,067
|
)
|
|||
Provision for income taxes (6)
|
453
|
|
|
448
|
|
|
493
|
|
|||
Net loss
|
$
|
(9,077
|
)
|
|
$
|
(3,913
|
)
|
|
$
|
(3,560
|
)
|
Net loss per share - basic and diluted
|
$
|
(0.24
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.11
|
)
|
Weighted average shares outstanding - basic and diluted
|
37,851
|
|
|
35,959
|
|
|
31,507
|
|
|||
|
|
|
|
|
|
||||||
(1) Includes deferred revenue fair value adjustment
|
$
|
—
|
|
|
$
|
52
|
|
|
$
|
93
|
|
(2) Includes:
|
|
|
|
|
|
||||||
Amortization of acquired intangible assets
|
1,192
|
|
|
1,192
|
|
|
497
|
|
|||
Stock-based compensation
|
367
|
|
|
324
|
|
|
243
|
|
|||
Inventory step-up and backlog amortization
|
12
|
|
|
475
|
|
|
1,965
|
|
|||
(3) Includes stock-based compensation
|
2,545
|
|
|
2,466
|
|
|
1,648
|
|
|||
(4) Includes:
|
|
|
|
|
|
||||||
Stock-based compensation
|
3,737
|
|
|
2,893
|
|
|
2,352
|
|
|||
Amortization of acquired intangible assets
|
312
|
|
|
404
|
|
|
168
|
|
|||
Acquisition and integration
|
—
|
|
|
—
|
|
|
2,460
|
|
|||
(5) Includes:
|
|
|
|
|
|
||||||
Gain on debt extinguishment
|
—
|
|
|
(1,272
|
)
|
|
(29
|
)
|
|||
Discount accretion on convertible debt fair value
|
—
|
|
|
69
|
|
|
196
|
|
|||
Fair value adjustment on convertible debt conversion option
|
—
|
|
|
—
|
|
|
743
|
|
|||
(6) Includes benefit related to tax reform
|
—
|
|
|
—
|
|
|
(343
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net loss
|
$
|
(9,077
|
)
|
|
$
|
(3,913
|
)
|
|
$
|
(3,560
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign pension adjustment
|
(7
|
)
|
|
(6
|
)
|
|
14
|
|
|||
Unrealized gain (loss) on available-for-sale securities
|
3
|
|
|
(2
|
)
|
|
—
|
|
|||
Tax effect of foreign pension adjustment
|
1
|
|
|
3
|
|
|
(4
|
)
|
|||
Total comprehensive loss
|
$
|
(9,080
|
)
|
|
$
|
(3,918
|
)
|
|
$
|
(3,550
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(9,077
|
)
|
|
$
|
(3,913
|
)
|
|
$
|
(3,560
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Stock-based compensation
|
6,649
|
|
|
5,683
|
|
|
4,243
|
|
|||
Gain on sale of patents
|
(3,905
|
)
|
|
—
|
|
|
—
|
|
|||
Depreciation and amortization
|
3,837
|
|
|
3,555
|
|
|
3,577
|
|
|||
Amortization of acquired intangible assets
|
1,504
|
|
|
1,596
|
|
|
665
|
|
|||
Reversal of uncertain tax positions
|
(124
|
)
|
|
(19
|
)
|
|
(191
|
)
|
|||
Accretion on short-term marketable securities
|
(94
|
)
|
|
(44
|
)
|
|
—
|
|
|||
Deferred income tax (benefit) expense
|
45
|
|
|
(62
|
)
|
|
4
|
|
|||
Inventory step-up and backlog amortization
|
12
|
|
|
475
|
|
|
1,965
|
|
|||
Gain on debt extinguishment
|
—
|
|
|
(1,272
|
)
|
|
(29
|
)
|
|||
Discount accretion on convertible debt fair value
|
—
|
|
|
69
|
|
|
196
|
|
|||
Fair value adjustment on convertible debt conversion option
|
—
|
|
|
—
|
|
|
743
|
|
|||
Other
|
(3
|
)
|
|
11
|
|
|
71
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
(3,933
|
)
|
|
(2,342
|
)
|
|
(554
|
)
|
|||
Inventories
|
(2,459
|
)
|
|
(531
|
)
|
|
1,378
|
|
|||
Prepaid expenses and other current and long-term assets, net
|
2,172
|
|
|
110
|
|
|
650
|
|
|||
Accounts payable
|
(1,304
|
)
|
|
675
|
|
|
(2,063
|
)
|
|||
Accrued current and long-term liabilities
|
(3,686
|
)
|
|
(2,890
|
)
|
|
4,206
|
|
|||
Income taxes payable
|
(14
|
)
|
|
(146
|
)
|
|
898
|
|
|||
Net cash provided by (used in) operating activities
|
(10,380
|
)
|
|
955
|
|
|
12,199
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchases of available-for-sale marketable securities
|
(10,856
|
)
|
|
(8,177
|
)
|
|
—
|
|
|||
Proceeds from sales and maturities of marketable securities
|
10,050
|
|
|
2,150
|
|
|
—
|
|
|||
Proceeds from sale of patents
|
4,250
|
|
|
—
|
|
|
—
|
|
|||
Purchases of property and equipment
|
(2,629
|
)
|
|
(2,096
|
)
|
|
(2,484
|
)
|
|||
Purchases of licensed technology
|
(521
|
)
|
|
—
|
|
|
—
|
|
|||
Payment associated with sale of patents
|
(345
|
)
|
|
—
|
|
|
—
|
|
|||
Cash received in connection with acquisition of business
|
—
|
|
|
—
|
|
|
1,901
|
|
|||
Net cash used in investing activities
|
(51
|
)
|
|
(8,123
|
)
|
|
(583
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Payments on asset financings
|
(826
|
)
|
|
(1,874
|
)
|
|
(1,673
|
)
|
|||
Proceeds from issuances of common stock under employee equity incentive plans
|
570
|
|
|
1,683
|
|
|
3,004
|
|
|||
Payments on convertible debt
|
—
|
|
|
(2,220
|
)
|
|
(1,000
|
)
|
|||
Payments on line of credit related to acquisition
|
—
|
|
|
—
|
|
|
(4,046
|
)
|
|||
Net cash used in financing activities
|
(256
|
)
|
|
(2,411
|
)
|
|
(3,715
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
(10,687
|
)
|
|
(9,579
|
)
|
|
7,901
|
|
|||
Cash and cash equivalents, beginning of period
|
17,944
|
|
|
27,523
|
|
|
19,622
|
|
|||
Cash and cash equivalents, end of period
|
$
|
7,257
|
|
|
$
|
17,944
|
|
|
$
|
27,523
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for income taxes, net of refunds received
|
$
|
547
|
|
|
$
|
657
|
|
|
$
|
160
|
|
Cash paid during the year for interest
|
142
|
|
|
501
|
|
|
418
|
|
|||
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Acquisitions of property and equipment and other
assets under extended payment terms
|
$
|
934
|
|
|
$
|
501
|
|
|
$
|
3,558
|
|
Value of debt converted into shares
|
—
|
|
|
2,646
|
|
|
329
|
|
|||
Value of shares issued in acquisition
|
—
|
|
|
—
|
|
|
16,975
|
|
|
Common Stock
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Accumulated
Deficit
|
|
Total
Shareholders'
Equity
|
|||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||
Balance as of December 31, 2016
|
28,885,795
|
|
|
$
|
394,296
|
|
|
$
|
10
|
|
|
$
|
(372,011
|
)
|
|
$
|
22,295
|
|
Stock issued under employee equity incentive plans
|
2,001,782
|
|
|
3,004
|
|
|
—
|
|
|
—
|
|
|
3,004
|
|
||||
Stock-based compensation expense
|
—
|
|
|
4,243
|
|
|
—
|
|
|
—
|
|
|
4,243
|
|
||||
Other
|
—
|
|
|
44
|
|
|
—
|
|
|
(44
|
)
|
|
—
|
|
||||
Issuance of stock for acquisition
|
3,708,262
|
|
|
16,975
|
|
|
—
|
|
|
—
|
|
|
16,975
|
|
||||
Debt conversion
|
55,248
|
|
|
329
|
|
|
—
|
|
|
—
|
|
|
329
|
|
||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,560
|
)
|
|
(3,560
|
)
|
||||
Foreign pension adjustment, net of tax of $4
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||
Balance as of December 31, 2017
|
34,651.087
|
|
|
418,891
|
|
|
20
|
|
|
(375,615
|
)
|
|
43,296
|
|
||||
Stock issued under employee equity incentive plans
|
1,851,018
|
|
|
1,683
|
|
|
—
|
|
|
—
|
|
|
1,683
|
|
||||
Stock-based compensation expense
|
—
|
|
|
5,683
|
|
|
—
|
|
|
—
|
|
|
5,683
|
|
||||
Unrealized loss on available-for-sale securities
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Debt conversion
|
435,353
|
|
|
2,646
|
|
|
—
|
|
|
—
|
|
|
2,646
|
|
||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,913
|
)
|
|
(3,913
|
)
|
||||
Foreign pension adjustment, net of tax of ($3)
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
||||
Balance as of December 31, 2018
|
36,937,458
|
|
|
428,903
|
|
|
15
|
|
|
(379,528
|
)
|
|
49,390
|
|
||||
Stock issued under employee equity incentive plans
|
1,497,030
|
|
|
570
|
|
|
—
|
|
|
—
|
|
|
570
|
|
||||
Stock-based compensation expense
|
—
|
|
|
6,649
|
|
|
—
|
|
|
—
|
|
|
6,649
|
|
||||
Unrealized gain on available-for-sale securities
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,077
|
)
|
|
(9,077
|
)
|
||||
Foreign pension adjustment, net of tax of ($1)
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
||||
Balance as of December 31, 2019
|
38,434,488
|
|
|
$
|
436,122
|
|
|
$
|
12
|
|
|
$
|
(388,605
|
)
|
|
$
|
47,529
|
|
|
Year Ended
|
|
Year Ended
|
||||||||||||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Previously Reported
|
|
Correction
|
|
Revised
|
|
Previously Reported
|
|
Correction
|
|
Revised
|
||||||||||||
Interest income (expense) and other, net
|
$
|
647
|
|
|
$
|
708
|
|
|
$
|
1,355
|
|
|
$
|
(1,647
|
)
|
|
$
|
613
|
|
|
$
|
(1,034
|
)
|
Total other income (expense), net
|
647
|
|
|
708
|
|
|
1,355
|
|
|
(1,647
|
)
|
|
613
|
|
|
(1,034
|
)
|
||||||
Loss before income taxes
|
(4,173
|
)
|
|
708
|
|
|
(3,465
|
)
|
|
(3,680
|
)
|
|
613
|
|
|
(3,067
|
)
|
||||||
Net loss
|
(4,621
|
)
|
|
708
|
|
|
(3,913
|
)
|
|
(4,173
|
)
|
|
613
|
|
|
(3,560
|
)
|
||||||
Net loss per share - basic and diluted
|
$
|
(0.13
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.11
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.11
|
)
|
|
December 31, 2018
|
||||||||||
|
Previously Reported
|
|
Correction
|
|
Revised
|
||||||
Accrued liabilities and current portion of long-term liabilities
|
$
|
14,823
|
|
|
$
|
(4,567
|
)
|
|
$
|
10,256
|
|
Total current liabilities
|
17,202
|
|
|
(4,567
|
)
|
|
12,635
|
|
|||
Total liabilities
|
20,518
|
|
|
(4,567
|
)
|
|
15,951
|
|
|||
Accumulated deficit
|
(384,095
|
)
|
|
4,567
|
|
|
(379,528
|
)
|
|||
Total shareholders’ equity
|
44,823
|
|
|
4,567
|
|
|
49,390
|
|
|
Year Ended
|
|
Year Ended
|
||||||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||
|
Previously Reported
|
|
Correction
|
|
Revised
|
|
Previously Reported
|
|
Correction
|
|
Revised
|
||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net loss
|
(4,621
|
)
|
|
708
|
|
|
(3,913
|
)
|
|
(4,173
|
)
|
|
613
|
|
|
(3,560
|
)
|
Change in accrued current and long-term liabilities
|
(2,182
|
)
|
|
(708
|
)
|
|
(2,890
|
)
|
|
4,819
|
|
|
(613
|
)
|
|
4,206
|
|
Net cash provided by operating activities
|
955
|
|
|
—
|
|
|
955
|
|
|
12,199
|
|
|
—
|
|
|
12,199
|
|
|
Software
|
Lesser of 3 years or contractual license term
|
|
|
Equipment, furniture and fixtures
|
2 years
|
|
|
Tooling
|
2 to 4 years
|
|
|
Leasehold improvements
|
Lesser of lease term or estimated useful life
|
|
Purchase price
|
|
|
$
|
16,975
|
|
|
Less net liabilities assumed:
|
|
|
|
|||
Assets acquired:
|
|
|
|
|||
Cash and cash equivalents
|
1,901
|
|
|
|
||
Accounts receivable
|
968
|
|
|
|
||
Inventories
|
3,175
|
|
|
|
||
Property and equipment
|
964
|
|
|
|
||
Other assets
|
1,562
|
|
|
|
||
Identifiable intangible assets
|
6,730
|
|
|
|
||
Liabilities assumed:
|
|
|
|
|||
Accounts payable
|
(1,736
|
)
|
|
|
||
Accrued liabilities and other current liabilities
|
(2,832
|
)
|
|
|
||
Revolving bank loan
|
(4,046
|
)
|
|
|
||
Convertible debt
|
(6,485
|
)
|
|
|
||
Other noncurrent liabilities
|
(1,633
|
)
|
|
(1,432
|
)
|
|
Goodwill
|
|
|
$
|
18,407
|
|
•
|
We performed a valuation of the convertible debt. We assigned $4,762 of the purchase price to convertible debt, consisting of the contractual amount of $6,068 offset by a debt discount of $1,306, and $1,723 to the embedded conversion feature. No other features of the debt were assigned value at the Acquisition date.
|
•
|
We performed a valuation of acquired intangible assets. We assigned $5,050 of the purchase price to acquired developed technology with estimated lives of 5 years or less, $1,270 to customer relationships with estimated lives of 3 years or less, and $410 to backlog and trademark with estimated lives of 2 years or less. ViXS had no in-process research and development.
|
•
|
We recorded an inventory step-up of $2,191 to record inventory at fair value. We recognized $12 in 2019, $424 in 2018 and $1,755 in 2017 within cost of goods sold as the inventory was sold. The inventory step-up was fully recognized as of December 31, 2019.
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Accounts receivable, gross
|
$
|
10,938
|
|
|
$
|
7,003
|
|
Allowance for doubtful accounts
|
(23
|
)
|
|
(21
|
)
|
||
Accounts receivable, net
|
$
|
10,915
|
|
|
$
|
6,982
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Balance at beginning of year
|
$
|
21
|
|
|
$
|
47
|
|
|
$
|
32
|
|
Additions charged (reductions credited)
|
2
|
|
|
(26
|
)
|
|
15
|
|
|||
Balance at end of year
|
$
|
23
|
|
|
$
|
21
|
|
|
$
|
47
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Finished goods
|
$
|
1,630
|
|
|
$
|
1,577
|
|
Work-in-process
|
3,771
|
|
|
1,377
|
|
||
Inventories
|
$
|
5,401
|
|
|
$
|
2,954
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Equipment, furniture and fixtures
|
$
|
8,494
|
|
|
$
|
9,536
|
|
Tooling
|
6,552
|
|
|
6,552
|
|
||
Software
|
6,428
|
|
|
5,444
|
|
||
Leasehold improvements
|
1,392
|
|
|
1,350
|
|
||
|
22,866
|
|
|
22,882
|
|
||
Accumulated depreciation and amortization
|
(18,258
|
)
|
|
(16,731
|
)
|
||
Property and equipment, net
|
$
|
4,608
|
|
|
$
|
6,151
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Developed technology
|
$
|
5,050
|
|
|
$
|
5,050
|
|
Customer relationships
|
1,270
|
|
|
1,270
|
|
||
Backlog and tradename
|
410
|
|
|
410
|
|
||
|
6,730
|
|
|
6,730
|
|
||
Less: accumulated amortization
|
(4,026
|
)
|
|
(2,522
|
)
|
||
Acquired intangible assets, net
|
$
|
2,704
|
|
|
$
|
4,208
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Accrued payroll and related liabilities
|
$
|
3,440
|
|
|
$
|
4,428
|
|
Operating lease liability, current
|
1,545
|
|
|
—
|
|
||
Accrued commissions and royalties
|
663
|
|
|
900
|
|
||
Current portion of accrued liabilities for asset financings
|
483
|
|
|
748
|
|
||
Accrued interest payable
|
397
|
|
|
403
|
|
||
Deferred revenue
|
146
|
|
|
96
|
|
||
Accrued costs related to restructuring
|
66
|
|
|
200
|
|
||
Liability for warranty returns
|
10
|
|
|
13
|
|
||
Other
|
1,942
|
|
|
3,468
|
|
||
Accrued liabilities and current portion of long-term liabilities
|
$
|
8,692
|
|
|
$
|
10,256
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Deferred revenue:
|
|
|
|
|
|
||||||
Balance at beginning of period
|
$
|
96
|
|
|
$
|
418
|
|
|
$
|
—
|
|
Revenue deferred
|
511
|
|
|
610
|
|
|
418
|
|
|||
Revenue recognized
|
(461
|
)
|
|
(932
|
)
|
|
—
|
|
|||
Balance at end of period
|
$
|
146
|
|
|
$
|
96
|
|
|
$
|
418
|
|
Liability for warranty returns:
|
|
|
|
|
|
||||||
Balance at beginning of year
|
$
|
13
|
|
|
$
|
17
|
|
|
$
|
28
|
|
Provision
|
5
|
|
|
9
|
|
|
2
|
|
|||
Charge-offs
|
(8
|
)
|
|
(13
|
)
|
|
(13
|
)
|
|||
Balance at end of year
|
$
|
10
|
|
|
$
|
13
|
|
|
$
|
17
|
|
|
Cost
|
|
Unrealized Gain (Loss)
|
|
Fair Value
|
||||||
Short-term marketable securities:
|
|
|
|
|
|
||||||
As of December 31, 2019:
|
|
|
|
|
|
||||||
Commercial paper
|
$
|
2,487
|
|
|
$
|
—
|
|
|
$
|
2,487
|
|
U.S. government treasury bills
|
2,249
|
|
|
1
|
|
|
2,250
|
|
|||
Corporate debt securities
|
2,236
|
|
|
2
|
|
|
2,238
|
|
|||
|
$
|
6,972
|
|
|
$
|
3
|
|
|
$
|
6,975
|
|
|
|
|
|
|
|
||||||
As of December 31, 2018:
|
|
|
|
|
|
||||||
Corporate debt securities
|
$
|
3,238
|
|
|
$
|
(2
|
)
|
|
$
|
3,236
|
|
U.S. government treasury bills
|
1,841
|
|
|
—
|
|
|
1,841
|
|
|||
Commercial paper
|
992
|
|
|
—
|
|
|
992
|
|
|||
|
$
|
6,071
|
|
|
$
|
(2
|
)
|
|
$
|
6,069
|
|
Level 1:
|
Valuations based on quoted prices in active markets for identical assets and liabilities.
|
Level 2:
|
Valuations based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
|
Level 3:
|
Valuations based on unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions.
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
As of December 31, 2019:
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
1,307
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,307
|
|
Short-term marketable securities:
|
|
|
|
|
|
|
|
||||||||
U.S. government treasury bills
|
2,250
|
|
|
—
|
|
|
—
|
|
|
2,250
|
|
||||
Commercial paper
|
—
|
|
|
2,487
|
|
|
—
|
|
|
2,487
|
|
||||
Corporate debt securities
|
—
|
|
|
2,238
|
|
|
—
|
|
|
2,238
|
|
||||
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2018:
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
13,388
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
13,388
|
|
|
Commercial paper
|
—
|
|
|
250
|
|
|
—
|
|
|
250
|
|
||||
Corporate debt securities
|
—
|
|
|
249
|
|
|
—
|
|
|
249
|
|
||||
Short-term marketable securities:
|
|
|
|
|
|
|
|
||||||||
U.S. government treasury bills
|
1,841
|
|
|
—
|
|
|
—
|
|
|
1,841
|
|
||||
Corporate debt securities
|
—
|
|
|
3,236
|
|
|
—
|
|
|
3,236
|
|
||||
Commercial paper
|
—
|
|
|
992
|
|
|
—
|
|
|
992
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Operating expenses — restructuring:
|
|
|
|
|
|
||||||
Employee severance and benefits
|
$
|
398
|
|
|
$
|
714
|
|
|
$
|
1,920
|
|
Facility closure and consolidations
|
—
|
|
|
750
|
|
|
—
|
|
|||
Total included in operating expenses
|
398
|
|
|
1,464
|
|
|
1,920
|
|
|||
Total restructuring expense
|
$
|
398
|
|
|
$
|
1,464
|
|
|
$
|
1,920
|
|
|
Balance as of December 31, 2018
|
|
Adjustment
|
|
Expensed
|
|
Payments
|
|
Balance as of December 31, 2019
|
||||||||||
Facility closure and consolidations
|
$
|
360
|
|
|
$
|
(360
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Employee severance and benefits
|
—
|
|
|
—
|
|
|
398
|
|
|
(332
|
)
|
|
66
|
|
|||||
Accrued costs related to restructuring
|
360
|
|
|
(360
|
)
|
|
398
|
|
|
(332
|
)
|
|
66
|
|
|
Year Ended
|
||
|
December 31, 2019
|
||
Operating lease cost
|
$
|
2,496
|
|
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash flows from operating leases
|
2,697
|
|
|
Leased assets obtained in exchange for new operating lease liabilities
|
1,440
|
|
|
Weighted average remaining lease term (in years)
|
4.97
|
|
|
Weighted average discount rate
|
5.49
|
%
|
Operating Lease Payments
|
|
||
Years ending December 31:
|
|
||
2020
|
1,810
|
|
|
2021
|
1,170
|
|
|
2022
|
1,144
|
|
|
2023
|
933
|
|
|
2024
|
822
|
|
|
2025
|
308
|
|
|
2026
|
308
|
|
|
Thereafter
|
77
|
|
|
Total operating lease payments
|
6,572
|
|
|
Less imputed interest
|
(815
|
)
|
|
Total operating lease liabilities
|
$
|
5,757
|
|
|
Year ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
IC sales
|
$
|
66,250
|
|
|
$
|
74,247
|
|
Engineering services, license and other
|
2,505
|
|
|
2,307
|
|
||
Total revenues
|
$
|
68,755
|
|
|
$
|
76,554
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Other income
|
$
|
425
|
|
|
$
|
225
|
|
|
$
|
190
|
|
Interest income
|
327
|
|
|
296
|
|
|
141
|
|
|||
Interest expense
|
(158
|
)
|
|
(369
|
)
|
|
(455
|
)
|
|||
Gain on debt extinguishment
|
—
|
|
|
1,272
|
|
|
29
|
|
|||
Discount accretion on convertible debt fair value
|
—
|
|
|
(69
|
)
|
|
(196
|
)
|
|||
Fair value adjustment on convertible debt conversion option
|
—
|
|
|
—
|
|
|
(743
|
)
|
|||
Total interest income (expense) and other, net
|
$
|
594
|
|
|
$
|
1,355
|
|
|
$
|
(1,034
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Domestic
|
$
|
(16,072
|
)
|
|
$
|
(3,843
|
)
|
|
$
|
1,516
|
|
Foreign
|
7,448
|
|
|
378
|
|
|
(4,583
|
)
|
|||
Domestic and foreign pre-tax loss
|
$
|
(8,624
|
)
|
|
$
|
(3,465
|
)
|
|
$
|
(3,067
|
)
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
||||
Research and experimentation credit and deduction carryforwards
|
$
|
67,648
|
|
|
$
|
65,868
|
|
Net operating loss carryforwards
|
47,779
|
|
|
53,415
|
|
||
Depreciation and amortization
|
1,956
|
|
|
1,420
|
|
||
Reserves and accrued expenses
|
1,785
|
|
|
1,348
|
|
||
Deferred stock-based compensation
|
1,134
|
|
|
884
|
|
||
Foreign tax credit carryforwards
|
719
|
|
|
928
|
|
||
Other
|
1,434
|
|
|
320
|
|
||
Total gross deferred tax assets
|
122,455
|
|
|
124,183
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Other
|
(1,300
|
)
|
|
(319
|
)
|
||
Total gross deferred tax liabilities
|
(1,300
|
)
|
|
(319
|
)
|
||
Less valuation allowance
|
(121,005
|
)
|
|
(123,672
|
)
|
||
Net deferred tax assets
|
$
|
150
|
|
|
$
|
192
|
|
|
2019
|
|
2018
|
||||
Uncertain tax positions:
|
|
|
|
||||
Balance at beginning of year
|
$
|
2,504
|
|
|
$
|
2,444
|
|
Accrual for positions taken in a prior year
|
(14
|
)
|
|
(91
|
)
|
||
Accrual for positions taken in current year
|
188
|
|
|
160
|
|
||
Reversals due to lapse of statute of limitations
|
(109
|
)
|
|
(9
|
)
|
||
Balance at end of year
|
$
|
2,569
|
|
|
$
|
2,504
|
|
Interest and penalties:
|
|
|
|
||||
Balance at beginning of year
|
$
|
82
|
|
|
$
|
68
|
|
Accrual for positions taken in prior year
|
28
|
|
|
21
|
|
||
Accrual for positions taken in current year
|
2
|
|
|
3
|
|
||
Reversals due to lapse of statute of limitations
|
(27
|
)
|
|
(10
|
)
|
||
Balance at end of year
|
$
|
85
|
|
|
$
|
82
|
|
Year Ending December 31,
|
|
Software licenses
|
||
2020
|
|
$
|
507
|
|
2021
|
|
333
|
|
|
2022
|
|
250
|
|
|
|
|
1,090
|
|
|
Less: Interest component
|
|
(79
|
)
|
|
Present value of minimum software license payments
|
|
1,011
|
|
|
Less: Current portion
|
|
(483
|
)
|
|
Long-term portion of obligations
|
|
$
|
528
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net loss
|
$
|
(9,077
|
)
|
|
$
|
(3,913
|
)
|
|
$
|
(3,560
|
)
|
Weighted average shares outstanding - basic and diluted
|
37,851
|
|
|
35,959
|
|
|
31,507
|
|
|||
Net loss per share - basic and diluted
|
$
|
(0.24
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.11
|
)
|
|
Year Ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Employee equity incentive plans
|
3,419
|
|
|
3,349
|
|
|
3,879
|
|
Convertible debt
|
—
|
|
|
—
|
|
|
371
|
|
|
Number of
shares
|
|
Weighted
average
exercise
price
|
|||
Options outstanding as of December 31, 2018:
|
603,355
|
|
|
$
|
2.52
|
|
Granted
|
33,484
|
|
|
3.91
|
|
|
Exercised
|
(80,542
|
)
|
|
0.61
|
|
|
Canceled and forfeited
|
(10,687
|
)
|
|
2.63
|
|
|
Expired
|
(12,126
|
)
|
|
3.50
|
|
|
Options outstanding as of December 31, 2019:
|
533,484
|
|
|
$
|
2.87
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
Range of exercise prices
|
|
Number
outstanding as of
December 31,
2019
|
|
Weighted
average
remaining
contractual
life
|
|
Weighted
average
exercise
price
|
|
Number
exercisable as of
December 31,
2019
|
|
Weighted
average
exercise
price
|
||||||
$2.00 - $2.00
|
|
3,500
|
|
|
2.53
|
|
$
|
2.00
|
|
|
2,917
|
|
|
$
|
2.00
|
|
2.46 - 2.46
|
|
350,000
|
|
|
2.01
|
|
2.46
|
|
|
342,708
|
|
|
2.46
|
|
||
2.67 - 4.52
|
|
135,984
|
|
|
3.15
|
|
3.23
|
|
|
80,814
|
|
|
2.93
|
|
||
4.56 - 6.05
|
|
44,000
|
|
|
2.62
|
|
5.14
|
|
|
31,042
|
|
|
5.14
|
|
||
$0.60 - $6.05
|
|
533,484
|
|
|
2.35
|
|
$
|
2.87
|
|
|
457,481
|
|
|
$
|
2.72
|
|
|
Number of
shares
|
|
Weighted
average
exercise
price
|
|
Weighted
average
remaining
contractual
term
|
|
Aggregate
intrinsic
value
|
|||||
Vested
|
457,481
|
|
|
$
|
2.72
|
|
|
2.07
|
|
$
|
589
|
|
Expected to vest
|
70,871
|
|
|
3.77
|
|
|
4.01
|
|
28
|
|
||
Total
|
528,352
|
|
|
$
|
2.86
|
|
|
2.33
|
|
$
|
617
|
|
|
Number of
shares
|
|
Weighted average grant date fair value
|
|||
Unvested at December 31, 2018:
|
2,564,254
|
|
|
$
|
4.16
|
|
Granted
|
1,917,514
|
|
|
3.81
|
|
|
Vested
|
(1,222,127
|
)
|
|
3.87
|
|
|
Canceled
|
(147,215
|
)
|
|
4.37
|
|
|
Unvested at December 31, 2019:
|
3,112,426
|
|
|
$
|
4.06
|
|
Expected to vest after December 31, 2019
|
2,855,953
|
|
|
$
|
4.06
|
|
|
Year Ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Stock Option Plans:
|
|
|
|
|
|
|||
Risk free interest rate
|
2.47
|
%
|
|
2.68
|
%
|
|
1.85
|
%
|
Expected dividend yield
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
Expected term (in years)
|
5.00
|
|
|
5.00
|
|
|
5.00
|
|
Volatility
|
66
|
%
|
|
74
|
%
|
|
75
|
%
|
Employee Stock Purchase Plan:
|
|
|
|
|
|
|||
Risk free interest rate
|
2.05
|
%
|
|
1.97
|
%
|
|
1.09
|
%
|
Expected dividend yield
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
Expected term (in years)
|
1.05
|
|
|
1.06
|
|
|
1.07
|
|
Volatility
|
65
|
%
|
|
51
|
%
|
|
65
|
%
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Japan
|
$
|
53,628
|
|
|
$
|
67,330
|
|
|
$
|
66,041
|
|
China
|
10,213
|
|
|
5,079
|
|
|
2,117
|
|
|||
U.S.
|
3,105
|
|
|
1,815
|
|
|
1,697
|
|
|||
Taiwan
|
1,597
|
|
|
1,619
|
|
|
6,841
|
|
|||
Korea
|
108
|
|
|
427
|
|
|
987
|
|
|||
Europe
|
104
|
|
|
284
|
|
|
2,166
|
|
|||
Other
|
—
|
|
|
—
|
|
|
788
|
|
|||
|
$
|
68,755
|
|
|
$
|
76,554
|
|
|
$
|
80,637
|
|
|
Year Ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Distributors:
|
|
|
|
|
|
|||
All distributors
|
44
|
%
|
|
44
|
%
|
|
47
|
%
|
Distributor A
|
28
|
%
|
|
34
|
%
|
|
27
|
%
|
End Customers: 1
|
|
|
|
|
|
|||
Top five end customers
|
77
|
%
|
|
82
|
%
|
|
79
|
%
|
End customer A
|
49
|
%
|
|
50
|
%
|
|
47
|
%
|
End customer B
|
12
|
%
|
|
9
|
%
|
|
2
|
%
|
End customer C
|
4
|
%
|
|
10
|
%
|
|
9
|
%
|
|
Quarterly Period Ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31 1
|
||||||||
2019
|
|
|
|
|
|
|
|
||||||||
Revenue, net
|
$
|
16,648
|
|
|
$
|
18,027
|
|
|
$
|
18,057
|
|
|
$
|
16,023
|
|
Gross profit
|
8,472
|
|
|
9,376
|
|
|
9,347
|
|
|
7,300
|
|
||||
Loss from operations
|
(3,460
|
)
|
|
(2,321
|
)
|
|
(2,444
|
)
|
|
(4,898
|
)
|
||||
Income (loss) before income taxes
|
541
|
|
|
(2,217
|
)
|
|
(2,374
|
)
|
|
(4,574
|
)
|
||||
Net income (loss)
|
133
|
|
|
(2,448
|
)
|
|
(2,306
|
)
|
|
(4,456
|
)
|
||||
Net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
0.00
|
|
|
(0.06
|
)
|
|
(0.06
|
)
|
|
(0.12
|
)
|
||||
Diluted
|
0.00
|
|
|
(0.06
|
)
|
|
(0.06
|
)
|
|
(0.12
|
)
|
||||
2018
|
|
|
|
|
|
|
|
||||||||
Revenue, net
|
$
|
15,292
|
|
|
$
|
19,251
|
|
|
$
|
21,472
|
|
|
$
|
20,539
|
|
Gross profit
|
7,802
|
|
|
9,534
|
|
|
11,237
|
|
|
10,905
|
|
||||
Income (loss) from operations
|
(1,294
|
)
|
|
(2,450
|
)
|
|
431
|
|
|
(1,507
|
)
|
||||
Income (loss) before income taxes
|
(157
|
)
|
|
(2,410
|
)
|
|
519
|
|
|
(1,417
|
)
|
||||
Net income (loss)
|
(433
|
)
|
|
(2,442
|
)
|
|
431
|
|
|
(1,469
|
)
|
||||
Net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
(0.01
|
)
|
|
(0.07
|
)
|
|
0.01
|
|
|
(0.04
|
)
|
||||
Diluted
|
(0.01
|
)
|
|
(0.07
|
)
|
|
0.01
|
|
|
(0.04
|
)
|
Item 9.
|
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
|
Item 9A.
|
Controls and Procedures.
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
|
Item 9B.
|
Other Information.
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
Item 11.
|
Executive Compensation.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
Item 14.
|
Principal Accounting Fees and Services.
|
Item 15.
|
Exhibits, Financial Statement Schedules.
|
(a)
|
1. Financial Statements.
|
(a)
|
2. Financial Statement Schedules.
|
(a)
|
3. Exhibits.
|
|
|
Exhibit
Number
|
Description
|
|
|
2.1
|
|
|
|
2.2
|
|
|
|
3.1
|
|
|
|
3.2
|
|
|
|
3.3
|
|
|
|
4.1
|
|
|
|
4.2
|
|
|
|
4.3
|
|
|
|
10.1
|
|
|
|
10.2
|
|
|
|
10.3
|
|
|
|
10.4
|
|
|
|
10.5
|
|
|
|
10.6
|
|
|
|
10.7
|
|
|
|
10.8
|
|
|
|
10.9
|
|
|
|
10.10
|
|
|
|
10.11
|
|
|
|
10.12
|
|
|
|
10.13
|
|
|
|
10.14
|
|
|
|
10.15
|
|
|
|
10.16
|
|
|
|
10.17
|
|
|
|
10.18
|
|
|
|
10.19
|
|
|
|
10.20
|
|
|
|
10.21
|
|
|
|
10.22
|
|
|
|
10.23
|
|
|
|
10.24
|
|
|
|
10.25
|
|
|
|
10.26
|
|
|
|
10.27
|
|
|
|
10.28
|
|
|
|
10.29
|
|
|
|
10.30
|
|
|
|
10.31
|
|
|
|
10.32
|
|
|
|
10.33
|
|
|
|
10.34
|
|
|
|
10.35
|
|
|
|
10.36
|
|
|
|
10.37
|
|
|
|
10.38
|
|
|
|
10.39
|
|
|
|
10.40
|
|
|
|
10.41
|
|
|
|
21
|
|
|
|
23
|
|
|
|
24.1
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1*
|
|
|
|
32.2*
|
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
101.LAB
|
XBRL Taxonomy Label Linkbase Document
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
|
+
|
Indicates a management contract or compensation arrangement.
|
*
|
Exhibits 32.1 and 32.2 are being furnished and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise stated in such filing.
|
|
|
PIXELWORKS, INC.
|
||
|
|
|
|
|
Dated:
|
March 11, 2020
|
By:
|
|
/s/ Todd A. DeBonis
|
|
|
|
|
Todd A. DeBonis
|
|
|
|
|
President and Chief Executive Officer
(Principal Executive Officer) |
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ Todd A. DeBonis
|
|
President and Chief Executive Officer
|
|
|
Todd A. DeBonis
|
|
(Principal Executive Officer)
|
|
March 11, 2020
|
|
|
|
||
/s/ Elias N. Nader
|
|
Vice President and Chief Financial Officer (Principal Accounting and Financial Officer)
|
|
|
Elias N. Nader
|
|
|
|
March 11, 2020
|
|
|
|
||
/s/ Richard L. Sanquini
|
|
Chairman of the Board
|
|
|
Richard L. Sanquini
|
|
|
|
March 11, 2020
|
|
|
|
||
/s/ Amy Bunszel
|
|
Director
|
|
|
Amy Bunszel
|
|
|
|
March 11, 2020
|
|
|
|
||
/s/ C. Scott Gibson
|
|
Director
|
|
|
C. Scott Gibson
|
|
|
|
March 11, 2020
|
|
|
|
||
/s/ Daniel J. Heneghan
|
|
Director
|
|
|
Daniel J. Heneghan
|
|
|
|
March 11, 2020
|
|
|
|
||
/s/ David J. Tupman
|
|
Director
|
|
|
David J. Tupman
|
|
|
|
March 11, 2020
|
1 Year Pixelworks Chart |
1 Month Pixelworks Chart |
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