x
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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)
|
|
(I.R.S. Employer
Identification No.)
|
|
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224 Airport Parkway, Suite 400, San Jose, CA
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|
95110
|
(Address of principal executive offices)
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(Zip Code)
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Title of each class
|
|
Name of each exchange on which registered
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Common Stock
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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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x
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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 1.
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Business.
|
•
|
MEMC (motion estimation/motion compensation).
Our proprietary MEMC technology significantly improves the performance and viewing experience of large advanced LCD panels by solving problems such as motion blur and judder. It also supports significant digital TV trends such as 3D, LED backlight local dimming (both edge-lit and full array) and 240Hz and higher frame rates. Additionally, our MEMC technology improves video performance in non-TV applications such as video conferencing, 3D gaming and projection.
|
•
|
2D to 3D conversion.
Our proprietary 2D to 3D conversion technology offers 3D display systems the ability to provide a sense of depth to existing 2D content and displays it in 3D. Given the limited availability of native 3D content and virtually unlimited 2D content, this technology is a cornerstone for any 3D display system.
|
•
|
Networking
. Our networking technology enables the same video stream to be networked across multiple displays, for applications such as connected video projection and digital signage.
|
•
|
Digital keystone correction.
Our technology provides enhanced keystone and image correction performance for digital projection systems, particularly for “short throw” projectors which must project clearly at severe angles due to space limitations.
|
•
|
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 such as projectors and high-resolution flat panels. 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.
|
•
|
Video Co-Processor ICs.
Products in this category work in conjunction with an image processor to post-process video signals in order 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 by a display manufacturer 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.
|
•
|
Networked Display ICs.
Our Networked Display ICs allow the same video stream to be networked across multiple displays, for example to connect projectors in different classrooms or to enable networked streaming of video in digital signage applications. Our Networked Display IC combines video sharing capabilities with video image processing, wireless connectivity and Internet connection to ensure high quality, multi-source video output and enhanced value to our projection display customers.
|
•
|
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
69%
,
61%
and
51%
of revenue in 2011, 2010 and 2009, respectively.
|
•
|
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
31%
,
39%
and
49%
of total revenue in 2011, 2010 or 2009, respectively.
|
•
|
Integrators.
Integrators are original equipment manufacturers who build display devices based on specifications provided by branded suppliers.
|
•
|
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.
|
•
|
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.
|
Item 1A.
|
Risk Factors.
|
•
|
difficulties in managing international distributors and manufacturers due to varying time zones, languages and business customs;
|
•
|
compliance with U.S. laws affecting operations outside of the U.S., such as the Foreign Corrupt Practices Act;
|
•
|
reduced or limited protection of our IP, particularly in software, which is more prone to design piracy;
|
•
|
difficulties in collecting outstanding accounts receivable balances;
|
•
|
changes in tax rates, tax laws and the interpretation of those laws;
|
•
|
difficulties regarding timing and availability of export and import licenses;
|
•
|
ensuring that we obtain complete and accurate information from our Asian operations to make proper disclosures in the United States;
|
•
|
political and economic instability, particularly in the PRC;
|
•
|
difficulties in maintaining sales representatives outside of the U.S. that are knowledgeable about our industry and products;
|
•
|
changes in the regulatory environment in the PRC, Japan, Taiwan and Korea that may significantly impact purchases of our products by our customers or our customers’ sales of their own products;
|
•
|
outbreaks of health epidemics in the PRC or other parts of Asia;
|
•
|
imposition of new tariffs, quotas, trade barriers and similar trade restrictions on our sales;
|
•
|
varying employment and labor laws; and
|
•
|
greater vulnerability to infrastructure and labor disruptions than in established markets.
|
•
|
reduced end user demand due to the economic impact of any natural disaster;
|
•
|
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;
|
•
|
an increase in the cost of products that we purchase due to reduced supply; and
|
•
|
other unforeseen impacts as a result of the uncertainty resulting from a natural disaster.
|
•
|
difficulties in hiring and retaining necessary technical personnel;
|
•
|
difficulties in reallocating engineering resources and overcoming resource limitations;
|
•
|
difficulties with contract manufacturers;
|
•
|
changes to product specifications and customer requirements;
|
•
|
changes to market or competitive product requirements; and
|
•
|
unanticipated engineering complexities.
|
•
|
stop selling products using technology that contains the allegedly infringing IP;
|
•
|
attempt to obtain a license to the relevant IP, which may not be available on terms that are acceptable to us or at all;
|
•
|
attempt to redesign those products that contain the allegedly infringing IP; or
|
•
|
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.
|
•
|
actual or anticipated fluctuations in our operating results;
|
•
|
changes in expectations as to our future financial performance;
|
•
|
changes in financial estimates of securities analysts;
|
•
|
announcements by us or our competitors of technological innovations, design wins, contracts, standards, acquisitions or divestitures;
|
•
|
the operating and stock price performance of other comparable companies;
|
•
|
issuances or proposed issuances of equity, debt or other securities by us, or sales of securities by our security holders; and
|
•
|
changes in market valuations of other technology companies.
|
•
|
our board of directors is divided into three classes that will begin serving staggered terms at the 2012 annual meeting of shareholders, which will make it more difficult for a group of shareholders to quickly replace a majority of directors;
|
•
|
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;
|
•
|
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;
|
•
|
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;
|
•
|
Oregon law permits our board to consider other factors beyond stockholder value in evaluating any acquisition offer (so-called “expanded constituency” provisions); and
|
•
|
a supermajority (67%) vote of shareholders is required to approve certain fundamental transactions.
|
Item 1B.
|
Unresolved Staff Comments.
|
Item 2.
|
Properties.
|
Location
|
|
Function(s)
|
|
Square Feet Utilized
|
|
Lease Expiration
|
|
China
|
|
Engineering; sales;
customer support
|
|
48,000
|
|
Various dates
through
May 2013
|
|
California
|
|
Administration;
engineering; sales
|
|
23,000
|
|
June 2013
|
(a)
|
Taiwan
|
|
Customer support; sales;
operations; engineering
|
|
16,000
|
|
Various dates through November 2014
|
|
Oregon
|
|
Administration
|
|
5,000
|
|
November 2013
|
|
Japan
|
|
Sales; customer support
|
|
4,000
|
|
Various dates
through
January 2013
|
|
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.
|
Fiscal 2011
|
High
|
|
Low
|
||||
Fourth Quarter
|
$
|
2.42
|
|
|
$
|
1.80
|
|
Third Quarter
|
2.55
|
|
|
2.03
|
|
||
Second Quarter
|
3.51
|
|
|
2.24
|
|
||
First Quarter
|
3.72
|
|
|
3.30
|
|
||
|
|
|
|
||||
Fiscal 2010
|
High
|
|
Low
|
||||
Fourth Quarter
|
$
|
3.91
|
|
|
$
|
3.15
|
|
Third Quarter
|
3.62
|
|
|
2.62
|
|
||
Second Quarter
|
5.78
|
|
|
2.98
|
|
||
First Quarter
|
5.87
|
|
|
2.97
|
|
Item 6.
|
Selected Financial Data.
|
|
Year ended December 31,
|
||||||||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
||||||||||
Consolidated Statements of Operations Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue, net
|
$
|
64,609
|
|
|
$
|
69,529
|
|
|
$
|
61,093
|
|
|
$
|
85,164
|
|
|
$
|
105,980
|
|
Cost of revenue
|
34,242
|
|
|
37,366
|
|
|
33,798
|
|
|
42,963
|
|
|
59,273
|
|
|||||
Gross profit
|
30,367
|
|
|
32,163
|
|
|
27,295
|
|
|
42,201
|
|
|
46,707
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
22,906
|
|
|
22,810
|
|
|
20,075
|
|
|
26,512
|
|
|
38,792
|
|
|||||
Selling, general and administrative
|
15,266
|
|
|
15,167
|
|
|
13,745
|
|
|
17,945
|
|
|
25,437
|
|
|||||
Restructuring
|
—
|
|
|
94
|
|
|
235
|
|
|
1,589
|
|
|
13,285
|
|
|||||
Amortization of acquired intangible assets
|
—
|
|
|
—
|
|
|
—
|
|
|
164
|
|
|
359
|
|
|||||
Total operating expenses
|
38,172
|
|
|
38,071
|
|
|
34,055
|
|
|
46,210
|
|
|
77,873
|
|
|||||
Loss from operations
|
(7,805
|
)
|
|
(5,908
|
)
|
|
(6,760
|
)
|
|
(4,009
|
)
|
|
(31,166
|
)
|
|||||
Interest and other income, net
|
1,380
|
|
|
886
|
|
|
12,338
|
|
|
11,979
|
|
|
2,483
|
|
|||||
Income (loss) before income taxes
|
(6,425
|
)
|
|
(5,022
|
)
|
|
5,578
|
|
|
7,970
|
|
|
(28,683
|
)
|
|||||
Provision (benefit) for income taxes
|
141
|
|
|
(5,395
|
)
|
|
(877
|
)
|
|
(8
|
)
|
|
2,237
|
|
|||||
Net income (loss)
|
$
|
(6,566
|
)
|
|
$
|
373
|
|
|
$
|
6,455
|
|
|
$
|
7,978
|
|
|
$
|
(30,920
|
)
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
(0.40
|
)
|
|
$
|
0.03
|
|
|
$
|
0.48
|
|
|
$
|
0.55
|
|
|
$
|
(1.92
|
)
|
Diluted
|
$
|
(0.40
|
)
|
|
$
|
0.03
|
|
|
$
|
0.47
|
|
|
$
|
0.55
|
|
|
$
|
(1.92
|
)
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
16,330
|
|
|
13,442
|
|
|
13,318
|
|
|
14,399
|
|
|
16,069
|
|
|||||
Diluted
|
16,330
|
|
|
14,384
|
|
|
13,687
|
|
|
14,410
|
|
|
16,069
|
|
|
December 31,
|
||||||||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
||||||||||
Consolidated Balance Sheets Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
15,092
|
|
|
$
|
16,872
|
|
|
$
|
17,797
|
|
|
$
|
53,149
|
|
|
$
|
74,572
|
|
Short-and long-term marketable securities
|
—
|
|
|
12,969
|
|
|
13,062
|
|
|
10,168
|
|
|
44,385
|
|
|||||
Working capital
|
13,210
|
|
|
8,072
|
|
|
25,359
|
|
|
61,947
|
|
|
112,360
|
|
|||||
Total assets
|
36,377
|
|
|
52,414
|
|
|
56,078
|
|
|
91,732
|
|
|
161,916
|
|
|||||
Long-term liabilities, net of current portion
|
5,690
|
|
|
5,635
|
|
|
26,703
|
|
|
73,250
|
|
|
151,871
|
|
|||||
Total shareholders’ equity (deficit)
|
17,800
|
|
|
13,931
|
|
|
13,073
|
|
|
4,711
|
|
|
(8,027
|
)
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operation.
|
|
Year ended December 31,
|
|
2011 v. 2010
|
|
2010 v. 2009
|
||||||||||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
$ change
|
|
% change
|
|
$ change
|
|
% change
|
||||||||||||
Revenue, net
|
$
|
64,609
|
|
|
$
|
69,529
|
|
|
$
|
61,093
|
|
|
$
|
(4,920
|
)
|
|
(7
|
)%
|
|
$
|
8,436
|
|
|
14
|
%
|
|
Year ended December 31,
|
|||||||||||||||||||
|
2011
|
|
% of
revenue
|
|
2010
|
|
% of
revenue
|
|
2009
|
|
% of
revenue
|
|||||||||
Direct product costs and related overhead
1
|
$
|
33,383
|
|
|
52
|
%
|
|
$
|
34,629
|
|
|
50
|
%
|
|
$
|
30,630
|
|
|
50
|
%
|
Amortization of acquired developed technology
|
—
|
|
|
—
|
|
|
1,050
|
|
|
2
|
|
|
2,336
|
|
|
4
|
|
|||
Inventory charges
2
|
289
|
|
|
0
|
|
|
1,543
|
|
|
2
|
|
|
518
|
|
|
1
|
|
|||
Other cost of revenue
3
|
570
|
|
|
1
|
|
|
144
|
|
|
0
|
|
|
314
|
|
|
0
|
|
|||
Total cost of revenue
|
$
|
34,242
|
|
|
53
|
%
|
|
$
|
37,366
|
|
|
54
|
%
|
|
$
|
33,798
|
|
|
55
|
%
|
Gross profit
|
$
|
30,367
|
|
|
47
|
%
|
|
$
|
32,163
|
|
|
46
|
%
|
|
$
|
27,295
|
|
|
45
|
%
|
1
|
Includes purchased materials, assembly, test, labor, employee benefits, warranty expense and royalties.
|
2
|
Includes charges to reduce inventory to lower of cost or market.
|
3
|
Includes restructuring, stock-based compensation and additional amortization of a non-cancelable prepaid royalty.
|
|
Year ended December 31,
|
|
2011 v. 2010
|
|
2010 v. 2009
|
||||||||||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
$ change
|
|
% change
|
|
$ change
|
|
% change
|
||||||||||||
Research and development
|
$
|
22,906
|
|
|
$
|
22,810
|
|
|
$
|
20,075
|
|
|
$
|
96
|
|
|
0
|
%
|
|
$
|
2,735
|
|
|
14
|
%
|
•
|
Compensation expense increased $1.1 million primarily due to annual merit salary increases;
|
•
|
Depreciation and amortization expense increased $0.8 million due to intellectual property and engineering software tool additions; and
|
•
|
Non-recurring engineering and outside services expense decreased $1.3 million due to the timing of development activities.
|
•
|
Compensation expense increased $1.2 million as a result of:
|
•
|
the elimination of a Company-wide salary reduction that was in effect during the second and third quarters of 2009;
|
•
|
an increase in the number of research and development employees; and
|
•
|
annual merit salary increases granted during the year.
|
•
|
Depreciation and amortization expense, software maintenance expense and expensed equipment and software increased $0.7 million as a result of an increase in engineering software tools, and our purchase of additional equipment during 2010.
|
•
|
Non-recurring engineering and outside services increased $0.6 million due to an increase in new product development.
|
|
Year ended December 31,
|
|
2011 v. 2010
|
|
2010 v. 2009
|
||||||||||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
$ change
|
|
% change
|
|
$ change
|
|
% change
|
||||||||||||
Selling, general and administrative
|
$
|
15,266
|
|
|
$
|
15,167
|
|
|
$
|
13,745
|
|
|
$
|
99
|
|
|
1
|
%
|
|
$
|
1,422
|
|
|
10
|
%
|
•
|
Compensation expense increased $0.7 million primarily due to annual merit salary increases;
|
•
|
Stock compensation expense increased $0.3 million; and
|
•
|
A general decrease in most other expense categories as the Company focused on cost management.
|
•
|
Compensation expense increased $0.7 million as a result of:
|
•
|
elimination of a Company-wide salary reduction in effect during the second and third quarters of 2009;
|
•
|
an increase in the number of sales, general and administrative employees; and
|
•
|
annual merit salary increases granted during the year.
|
•
|
Travel related expense increased $0.3 million.
|
|
Year ended December 31,
|
|
$ change
|
||||||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2011 v. 2010
|
|
2010 v. 2009
|
||||||||||
Gain on sale of patents
1
|
$
|
1,600
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,600
|
|
|
$
|
—
|
|
Gain on sale of marketable securities
2
|
264
|
|
|
1,397
|
|
|
—
|
|
|
(1,133
|
)
|
|
1,397
|
|
|||||
Interest expense and other, net
3
|
(484
|
)
|
|
(511
|
)
|
|
(522
|
)
|
|
27
|
|
|
11
|
|
|||||
Gain on repurchase of long-term debt, net
4
|
—
|
|
|
—
|
|
|
12,860
|
|
|
—
|
|
|
(12,860
|
)
|
|||||
Total other income, net
|
$
|
1,380
|
|
|
$
|
886
|
|
|
$
|
12,338
|
|
|
$
|
494
|
|
|
$
|
(11,452
|
)
|
1
|
In the first quarter of 2011, we sold certain patents and related rights and materials for proceeds and a net gain of $1.6 million. All of the patents were originally obtained by us during our June 2005 acquisition of Equator Technologies, Inc., and the underlying technologies pertain to markets that we no longer pursue.
|
2
|
Realized gains on the sale of available-for-sale marketable securities.
|
3
|
Consists of interest expense, interest income and amortization of debt issuance costs. The decrease in 2011 is primarily due to a decrease in interest expense and amortization of debt issuance costs attributable to the repayment of our convertible subordinated debentures (the “debentures”) in the second quarter of 2011.
|
4
|
In 2009, we repurchased and retired $44.9 million of our debentures for a net gain of $12.9 million.
|
|
Year ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Provision (benefit) for income taxes
|
$
|
141
|
|
|
$
|
(5,395
|
)
|
|
$
|
(877
|
)
|
|
December 31,
|
|
$ Change
|
||||||||||||||||
|
2011
|
|
2010
|
|
2009
|
|
2011 v. 2010
|
|
2010 v. 2009
|
||||||||||
Cash and cash equivalents
|
$
|
15,092
|
|
|
$
|
16,872
|
|
|
$
|
17,797
|
|
|
$
|
(1,780
|
)
|
|
$
|
(925
|
)
|
Short-term marketable securities
|
—
|
|
|
12,366
|
|
|
9,822
|
|
|
(12,366
|
)
|
|
2,544
|
|
|||||
Long-term marketable securities
|
—
|
|
|
603
|
|
|
3,240
|
|
|
(603
|
)
|
|
(2,637
|
)
|
|||||
Total cash and marketable securities
|
$
|
15,092
|
|
|
$
|
29,841
|
|
|
$
|
30,859
|
|
|
$
|
(14,749
|
)
|
|
$
|
(1,018
|
)
|
|
Payments Due By Period
|
||||||||||||||||||
Contractual Obligation
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than
5 years
|
||||||||||
Operating leases
1
|
$
|
2,450
|
|
|
$
|
1,747
|
|
|
$
|
703
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Payments on accrued balances related to asset purchases
|
4,037
|
|
|
1,828
|
|
|
2,125
|
|
|
84
|
|
|
—
|
|
|||||
Estimated purchase commitments to contract manufacturers
|
6,189
|
|
|
6,189
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
2
|
$
|
12,676
|
|
|
$
|
9,764
|
|
|
$
|
2,828
|
|
|
$
|
84
|
|
|
$
|
—
|
|
1.
|
The operating lease payments above are net of sublease rental income of $0.3 million and $0.1 million for the years ending December 31, 2012 and December 31, 2013, respectively.
|
2.
|
We are unable to reliably estimate the timing of future payments related to uncertain tax positions and repatriation of foreign earnings; therefore, $3.2 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
|
|
Portland, Oregon
|
March 7, 2012
|
|
December 31,
|
||||||
|
2011
|
|
2010
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
15,092
|
|
|
$
|
16,872
|
|
Short-term marketable securities
|
—
|
|
|
12,366
|
|
||
Accounts receivable, net
|
4,557
|
|
|
4,487
|
|
||
Inventories
|
4,107
|
|
|
4,858
|
|
||
Prepaid expenses and other current assets
|
2,341
|
|
|
2,337
|
|
||
Total current assets
|
26,097
|
|
|
40,920
|
|
||
Long-term marketable securities
|
—
|
|
|
603
|
|
||
Property and equipment, net
|
7,366
|
|
|
5,830
|
|
||
Other assets, net
|
2,914
|
|
|
5,061
|
|
||
Total assets
|
$
|
36,377
|
|
|
$
|
52,414
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
4,428
|
|
|
$
|
4,804
|
|
Accrued liabilities and current portion of long-term liabilities
|
8,247
|
|
|
8,983
|
|
||
Current portion of income taxes payable
|
212
|
|
|
282
|
|
||
Short-term line of credit
|
—
|
|
|
3,000
|
|
||
Debentures currently payable
|
—
|
|
|
15,779
|
|
||
Total current liabilities
|
12,887
|
|
|
32,848
|
|
||
Long-term liabilities, net of current portion
|
2,467
|
|
|
2,061
|
|
||
Income taxes payable, net of current portion
|
3,223
|
|
|
3,574
|
|
||
Total liabilities
|
18,577
|
|
|
38,483
|
|
||
Commitments and contingencies (Note 7)
|
|
|
|
||||
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, 17,966,170 and 13,566,021 shares issued and outstanding as of December 31, 2011 and 2010, respectively
|
346,923
|
|
|
336,254
|
|
||
Accumulated other comprehensive income (loss)
|
(67
|
)
|
|
167
|
|
||
Accumulated deficit
|
(329,056
|
)
|
|
(322,490
|
)
|
||
Total shareholders’ equity
|
17,800
|
|
|
13,931
|
|
||
Total liabilities and shareholders’ equity
|
$
|
36,377
|
|
|
$
|
52,414
|
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Revenue, net
|
$
|
64,609
|
|
|
$
|
69,529
|
|
|
$
|
61,093
|
|
Cost of revenue (1)
|
34,242
|
|
|
37,366
|
|
|
33,798
|
|
|||
Gross profit
|
30,367
|
|
|
32,163
|
|
|
27,295
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development (2)
|
22,906
|
|
|
22,810
|
|
|
20,075
|
|
|||
Selling, general and administrative (3)
|
15,266
|
|
|
15,167
|
|
|
13,745
|
|
|||
Restructuring
|
—
|
|
|
94
|
|
|
235
|
|
|||
Total operating expenses
|
38,172
|
|
|
38,071
|
|
|
34,055
|
|
|||
Loss from operations
|
(7,805
|
)
|
|
(5,908
|
)
|
|
(6,760
|
)
|
|||
Gain on sale of patents
|
1,600
|
|
|
—
|
|
|
—
|
|
|||
Interest expense and other, net
|
(484
|
)
|
|
(511
|
)
|
|
(522
|
)
|
|||
Gain on sale of marketable securities
|
264
|
|
|
1,397
|
|
|
—
|
|
|||
Gain on repurchase of long-term debt, net
|
—
|
|
|
—
|
|
|
12,860
|
|
|||
Total other income, net
|
1,380
|
|
|
886
|
|
|
12,338
|
|
|||
Income (loss) before income taxes
|
(6,425
|
)
|
|
(5,022
|
)
|
|
5,578
|
|
|||
Provision (benefit) for income taxes
|
141
|
|
|
(5,395
|
)
|
|
(877
|
)
|
|||
Net income (loss)
|
$
|
(6,566
|
)
|
|
$
|
373
|
|
|
$
|
6,455
|
|
Net income (loss) per share
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.40
|
)
|
|
$
|
0.03
|
|
|
$
|
0.48
|
|
Diluted
|
$
|
(0.40
|
)
|
|
$
|
0.03
|
|
|
$
|
0.47
|
|
Weighted average shares outstanding
|
|
|
|
|
|
||||||
Basic
|
16,330
|
|
|
13,442
|
|
|
13,318
|
|
|||
Diluted
|
16,330
|
|
|
14,384
|
|
|
13,687
|
|
|||
|
|
|
|
|
|
||||||
(1) Includes:
|
|
|
|
|
|
||||||
Additional amortization of non-cancelable prepaid royalty
|
$
|
441
|
|
|
$
|
84
|
|
|
$
|
251
|
|
Stock-based compensation
|
129
|
|
|
60
|
|
|
20
|
|
|||
Amortization of acquired developed technology
|
—
|
|
|
1,050
|
|
|
2,336
|
|
|||
Restructuring
|
—
|
|
|
—
|
|
|
43
|
|
|||
(2) Includes stock-based compensation
|
845
|
|
|
437
|
|
|
464
|
|
|||
(3) Includes stock-based compensation
|
1,037
|
|
|
707
|
|
|
540
|
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(6,566
|
)
|
|
$
|
373
|
|
|
$
|
6,455
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
5,114
|
|
|
4,537
|
|
|
4,607
|
|
|||
Stock-based compensation
|
2,011
|
|
|
1,204
|
|
|
1,024
|
|
|||
Gain on sale of patents
|
(1,600
|
)
|
|
—
|
|
|
—
|
|
|||
Reversal of uncertain tax positions
|
(967
|
)
|
|
(6,194
|
)
|
|
(1,819
|
)
|
|||
Gain on sale of marketable securities
|
(264
|
)
|
|
(1,397
|
)
|
|
—
|
|
|||
Amortization of debt issuance costs
|
31
|
|
|
74
|
|
|
124
|
|
|||
Other non-cash tax expense (benefit)
|
26
|
|
|
(26
|
)
|
|
—
|
|
|||
Deferred income tax expense
|
23
|
|
|
247
|
|
|
68
|
|
|||
Amortization of acquired developed technology
|
—
|
|
|
1,050
|
|
|
2,336
|
|
|||
Amortization on marketable securities
|
17
|
|
|
98
|
|
|
24
|
|
|||
Gain on repurchase of long-term debt, net
|
—
|
|
|
—
|
|
|
(12,860
|
)
|
|||
Other
|
11
|
|
|
52
|
|
|
59
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
(70
|
)
|
|
1,132
|
|
|
530
|
|
|||
Inventories
|
751
|
|
|
1,300
|
|
|
(1,177
|
)
|
|||
Prepaid expenses and other current and long-term assets, net
|
875
|
|
|
1,117
|
|
|
931
|
|
|||
Accounts payable
|
(399
|
)
|
|
(3,106
|
)
|
|
3,389
|
|
|||
Accrued current and long-term liabilities
|
(274
|
)
|
|
(303
|
)
|
|
(2,377
|
)
|
|||
Income taxes payable
|
546
|
|
|
479
|
|
|
672
|
|
|||
Net cash provided by (used in) operating activities
|
(735
|
)
|
|
637
|
|
|
1,986
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Proceeds from sales and maturities of available-for-sale marketable securities
|
12,961
|
|
|
17,485
|
|
|
13,195
|
|
|||
Purchases of property and equipment
|
(2,636
|
)
|
|
(1,795
|
)
|
|
(1,481
|
)
|
|||
Proceeds from sale of patents
|
1,600
|
|
|
—
|
|
|
—
|
|
|||
Purchases of licensed technology
|
(100
|
)
|
|
(480
|
)
|
|
(102
|
)
|
|||
Proceeds from sales of property and equipment
|
11
|
|
|
6
|
|
|
2
|
|
|||
Purchases of available-for-sale marketable securities
|
—
|
|
|
(16,964
|
)
|
|
(15,110
|
)
|
|||
Net cash provided by (used in) investing activities
|
11,836
|
|
|
(1,748
|
)
|
|
(3,496
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Repurchase of debentures
|
(15,779
|
)
|
|
—
|
|
|
(31,532
|
)
|
|||
Net proceeds from equity offering
|
8,327
|
|
|
—
|
|
|
—
|
|
|||
Net proceeds (payments) from line of credit
|
(3,000
|
)
|
|
3,000
|
|
|
—
|
|
|||
Payments on asset financings
|
(2,760
|
)
|
|
(3,015
|
)
|
|
(2,161
|
)
|
|||
Proceeds from issuances of common stock
|
331
|
|
|
201
|
|
|
18
|
|
|||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
(167
|
)
|
|||
Net cash provided by (used in) financing activities
|
(12,881
|
)
|
|
186
|
|
|
(33,842
|
)
|
|||
Net change in cash and cash equivalents
|
(1,780
|
)
|
|
(925
|
)
|
|
(35,352
|
)
|
|||
Cash and cash equivalents, beginning of period
|
16,872
|
|
|
17,797
|
|
|
53,149
|
|
|||
Cash and cash equivalents, end of period
|
$
|
15,092
|
|
|
$
|
16,872
|
|
|
$
|
17,797
|
|
|
Common Stock
|
|
Accumulated
Other
Comprehensive
Income (loss)
|
|
Comprehensive
Income (loss)
|
|
Accumulated
Deficit
|
|
Total
Shareholders’
Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance as of December 31, 2008
|
13,508,127
|
|
|
$
|
333,974
|
|
|
$
|
55
|
|
|
|
|
$
|
(329,318
|
)
|
|
$
|
4,711
|
|
||
Stock issued under stock option and stock purchase plans
|
123,530
|
|
|
18
|
|
|
—
|
|
|
|
|
—
|
|
|
18
|
|
||||||
Repurchase of common stock
|
(228,600
|
)
|
|
(167
|
)
|
|
—
|
|
|
|
|
—
|
|
|
(167
|
)
|
||||||
Stock-based compensation expense
|
—
|
|
|
1,024
|
|
|
—
|
|
|
|
|
—
|
|
|
1,024
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
6,455
|
|
|
6,455
|
|
|
6,455
|
|
||||
Unrealized gain on available-for-sale securities, net of tax of $0
|
—
|
|
|
—
|
|
|
1,003
|
|
|
1,003
|
|
|
—
|
|
|
1,003
|
|
|||||
Pension adjustment, net of tax of $11
|
—
|
|
|
—
|
|
|
29
|
|
|
29
|
|
|
—
|
|
|
29
|
|
|||||
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
7,487
|
|
|
—
|
|
|
—
|
|
||||
Balance as of December 31, 2009
|
13,403,057
|
|
|
334,849
|
|
|
1,087
|
|
|
|
|
(322,863
|
)
|
|
13,073
|
|
||||||
Stock issued under stock option and stock purchase plans
|
162,964
|
|
|
201
|
|
|
—
|
|
|
|
|
—
|
|
|
201
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
1,204
|
|
|
—
|
|
|
|
|
—
|
|
|
1,204
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
373
|
|
|
373
|
|
|
373
|
|
||||
Reclassification of unrealized gain upon sale of available-for-sale securities
|
—
|
|
|
—
|
|
|
(944
|
)
|
|
(944
|
)
|
|
—
|
|
|
(944
|
)
|
|||||
Unrealized gain on available-for-sale securities, net of tax of $26
|
—
|
|
|
—
|
|
|
47
|
|
|
47
|
|
|
—
|
|
|
47
|
|
|||||
Pension adjustment, net of tax of $(14)
|
—
|
|
|
—
|
|
|
(23
|
)
|
|
(23
|
)
|
|
—
|
|
|
(23
|
)
|
|||||
Comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
(547
|
)
|
|
—
|
|
|
—
|
|
||||
Balance as of December 31, 2010
|
13,566,021
|
|
|
$
|
336,254
|
|
|
$
|
167
|
|
|
|
|
|
$
|
(322,490
|
)
|
|
$
|
13,931
|
|
|
Stock issued under stock option and stock purchase plans
|
202,649
|
|
|
331
|
|
|
—
|
|
|
|
|
—
|
|
|
331
|
|
||||||
Equity offering
|
4,197,500
|
|
|
8,327
|
|
|
—
|
|
|
|
|
—
|
|
|
8,327
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
2,011
|
|
|
—
|
|
|
|
|
—
|
|
|
2,011
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
(6,566
|
)
|
|
(6,566
|
)
|
|
(6,566
|
)
|
||||
Reclassification of unrealized gain upon sale of available-for-sale securities, net of tax of $(26)
|
—
|
|
|
—
|
|
|
(229
|
)
|
|
(229
|
)
|
|
—
|
|
|
(229
|
)
|
|||||
Unrealized gain on available-for-sale securities, net of tax of $0
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Pension adjustment, net of tax of $(1)
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
(6,800
|
)
|
|
—
|
|
|
—
|
|
||||
Balance as of December 31, 2011
|
17,966,170
|
|
|
$
|
346,923
|
|
|
$
|
(67
|
)
|
|
|
|
$
|
(329,056
|
)
|
|
$
|
17,800
|
|
|
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
|
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Interest expense
|
$
|
(468
|
)
|
|
$
|
(500
|
)
|
|
$
|
(640
|
)
|
Amortization of debt issuance costs
|
(31
|
)
|
|
(74
|
)
|
|
(124
|
)
|
|||
Interest income
|
15
|
|
|
63
|
|
|
242
|
|
|||
|
$
|
(484
|
)
|
|
$
|
(511
|
)
|
|
$
|
(522
|
)
|
|
December 31,
|
||||||
|
2011
|
|
2010
|
||||
Accumulated net unrealized holding gain on available-for-sale securities
|
$
|
—
|
|
|
$
|
231
|
|
Accumulated transition pension obligation
|
(37
|
)
|
|
(48
|
)
|
||
Actuarial loss on pension obligation
|
(30
|
)
|
|
(16
|
)
|
||
Accumulated other comprehensive income (loss)
|
$
|
(67
|
)
|
|
$
|
167
|
|
|
December 31,
|
||||||
|
2011
|
|
2010
|
||||
Accounts receivable, gross
|
$
|
4,918
|
|
|
$
|
4,886
|
|
Allowance for doubtful accounts
|
(361
|
)
|
|
(399
|
)
|
||
Accounts receivable, net
|
$
|
4,557
|
|
|
$
|
4,487
|
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Balance at beginning of year
|
$
|
399
|
|
|
$
|
428
|
|
|
$
|
542
|
|
Reductions credited
|
(10
|
)
|
|
(29
|
)
|
|
(75
|
)
|
|||
Accounts written-off, net of recoveries
|
(28
|
)
|
|
—
|
|
|
(39
|
)
|
|||
Balance at end of year
|
$
|
361
|
|
|
$
|
399
|
|
|
$
|
428
|
|
|
December 31,
|
||||||
|
2011
|
|
2010
|
||||
Finished goods
|
$
|
1,203
|
|
|
$
|
2,232
|
|
Work-in-process
|
2,904
|
|
|
2,626
|
|
||
Inventories
|
$
|
4,107
|
|
|
$
|
4,858
|
|
|
December 31,
|
||||||
|
2011
|
|
2010
|
||||
Software
|
$
|
8,411
|
|
|
$
|
8,273
|
|
Equipment, furniture and fixtures
|
7,776
|
|
|
7,420
|
|
||
Tooling
|
2,786
|
|
|
2,085
|
|
||
Leasehold improvements
|
2,688
|
|
|
2,628
|
|
||
|
21,661
|
|
|
20,406
|
|
||
Accumulated depreciation and amortization
|
(14,295
|
)
|
|
(14,576
|
)
|
||
Property and equipment, net
|
$
|
7,366
|
|
|
$
|
5,830
|
|
|
December 31,
|
||||||
|
2011
|
|
2010
|
||||
Accrued payroll and related liabilities
|
$
|
2,638
|
|
|
$
|
2,365
|
|
Current portion of accrued liabilities for asset financings
|
1,753
|
|
|
2,601
|
|
||
Accrued commissions and royalties
|
1,407
|
|
|
1,139
|
|
||
Accrued interest payable
|
520
|
|
|
358
|
|
||
Reserve for warranty returns
|
439
|
|
|
723
|
|
||
Other
|
1,490
|
|
|
1,797
|
|
||
Accrued liabilities and current portion of long-term liabilities
|
$
|
8,247
|
|
|
$
|
8,983
|
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Reserve for warranty returns:
|
|
|
|
|
|
||||||
Balance at beginning of year
|
$
|
723
|
|
|
$
|
304
|
|
|
$
|
593
|
|
Provision (benefit)
|
(8
|
)
|
|
1,132
|
|
|
269
|
|
|||
Charge-offs
|
(276
|
)
|
|
(713
|
)
|
|
(558
|
)
|
|||
Balance at end of year
|
$
|
439
|
|
|
$
|
723
|
|
|
$
|
304
|
|
|
December 31,
|
||||||
|
2011
|
|
2010
|
||||
Accrued liabilities for asset financings
|
$
|
2,000
|
|
|
$
|
1,314
|
|
Payroll and related liabilities
|
154
|
|
|
165
|
|
||
Deferred rent
|
114
|
|
|
302
|
|
||
Other
|
199
|
|
|
280
|
|
||
Long-term liabilities, net of current portion
|
$
|
2,467
|
|
|
$
|
2,061
|
|
|
Cost
|
|
Unrealized
Gain (Loss)
|
|
Fair
Value
|
||||||
Short-term marketable securities:
|
|
|
|
|
|
||||||
US government agencies debt securities
|
$
|
5,513
|
|
|
$
|
3
|
|
|
$
|
5,516
|
|
Commercial paper
|
5,747
|
|
|
—
|
|
|
5,747
|
|
|||
Corporate debt securities
|
1,104
|
|
|
(1
|
)
|
|
1,103
|
|
|||
|
$
|
12,364
|
|
|
$
|
2
|
|
|
$
|
12,366
|
|
Long-term marketable securities:
|
|
|
|
|
|
||||||
Equity Securities
|
$
|
348
|
|
|
$
|
255
|
|
|
$
|
603
|
|
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, 2011:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
9,111
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,111
|
|
As of December 31, 2010:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
10,933
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,933
|
|
Certificates of deposit
|
200
|
|
|
—
|
|
|
—
|
|
|
200
|
|
||||
U.S. government agencies debt securities
|
—
|
|
|
5,516
|
|
|
—
|
|
|
5,516
|
|
||||
Commercial paper
|
—
|
|
|
6,947
|
|
|
—
|
|
|
6,947
|
|
||||
Corporate debt securities
|
—
|
|
|
1,605
|
|
|
—
|
|
|
1,605
|
|
||||
Long-term marketable securities
|
603
|
|
|
—
|
|
|
—
|
|
|
603
|
|
||||
Total
|
$
|
11,736
|
|
|
$
|
14,068
|
|
|
$
|
—
|
|
|
$
|
25,804
|
|
|
Year Ended December 31,
|
||||||
|
2011
|
|
2010
|
||||
Lease termination costs:
|
|
|
|
||||
Balance at beginning of year
|
$
|
291
|
|
|
$
|
408
|
|
Expensed
|
—
|
|
|
94
|
|
||
Payments
|
(172
|
)
|
|
(211
|
)
|
||
Balance at end of year
|
$
|
119
|
|
|
$
|
291
|
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Domestic
|
$
|
(8,175
|
)
|
|
$
|
(6,725
|
)
|
|
$
|
4,376
|
|
Foreign
|
1,750
|
|
|
1,703
|
|
|
1,202
|
|
|||
Domestic and foreign pre-tax income (loss)
|
$
|
(6,425
|
)
|
|
$
|
(5,022
|
)
|
|
$
|
5,578
|
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
55
|
|
|
$
|
(178
|
)
|
|
$
|
55
|
|
State
|
3
|
|
|
(150
|
)
|
|
20
|
|
|||
Foreign
|
60
|
|
|
(5,314
|
)
|
|
(1,020
|
)
|
|||
Total current
|
118
|
|
|
(5,642
|
)
|
|
(945
|
)
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(3
|
)
|
|
92
|
|
|
—
|
|
|||
State
|
1
|
|
|
155
|
|
|
—
|
|
|||
Foreign
|
25
|
|
|
—
|
|
|
68
|
|
|||
Total deferred
|
23
|
|
|
247
|
|
|
68
|
|
|||
Income tax expense (benefit)
|
$
|
141
|
|
|
$
|
(5,395
|
)
|
|
$
|
(877
|
)
|
|
December 31,
|
||||||
|
2011
|
|
2010
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
64,930
|
|
|
$
|
65,111
|
|
Research and experimentation credit carryforwards
|
12,384
|
|
|
11,444
|
|
||
Foreign tax credit carryforwards
|
4,931
|
|
|
5,260
|
|
||
Deferred stock compensation
|
2,728
|
|
|
2,360
|
|
||
Depreciation and amortization
|
2,385
|
|
|
2,373
|
|
||
Capital loss carryforwards
|
1,648
|
|
|
1,849
|
|
||
Reserves and accrued expenses
|
992
|
|
|
1,495
|
|
||
Other-than-temporary impairment of marketable securities
|
—
|
|
|
373
|
|
||
Other
|
475
|
|
|
1,854
|
|
||
Total gross deferred tax assets
|
90,473
|
|
|
92,119
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Foreign earnings
|
(679
|
)
|
|
(553
|
)
|
||
Other
|
(320
|
)
|
|
(240
|
)
|
||
Total gross deferred tax liabilities
|
(999
|
)
|
|
(793
|
)
|
||
Less valuation allowance
|
(89,009
|
)
|
|
(90,866
|
)
|
||
Net deferred tax assets
|
$
|
465
|
|
|
$
|
460
|
|
|
2011
|
|
2010
|
||||
Uncertain tax positions:
|
|
|
|
||||
Balance at beginning of year
|
$
|
2,625
|
|
|
$
|
7,186
|
|
Accrual for positions taken in a prior year
|
265
|
|
|
95
|
|
||
Accrual for positions taken in current year
|
28
|
|
|
1
|
|
||
Reversals due to lapse of statute of limitations
|
(663
|
)
|
|
(4,657
|
)
|
||
Balance at end of year
|
$
|
2,255
|
|
|
$
|
2,625
|
|
Interest and penalties:
|
|
|
|
||||
Balance at beginning of year
|
$
|
949
|
|
|
$
|
2,276
|
|
Accrual for positions taken in prior year
|
188
|
|
|
210
|
|
||
Accrual for positions taken in current year
|
17
|
|
|
—
|
|
||
Reversals due to lapse of statute of limitations
|
(304
|
)
|
|
(1,537
|
)
|
||
Balance at end of year
|
$
|
850
|
|
|
$
|
949
|
|
Year Ending December 31:
|
|
||
2012
|
$
|
1,747
|
|
2013
|
590
|
|
|
2014
|
113
|
|
|
|
$
|
2,450
|
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Net income (loss)
|
$
|
(6,566
|
)
|
|
$
|
373
|
|
|
$
|
6,455
|
|
Basic weighted average shares outstanding
|
16,330
|
|
|
13,442
|
|
|
13,318
|
|
|||
Dilutive effect of employee equity incentive plans
|
—
|
|
|
942
|
|
|
369
|
|
|||
Diluted weighted average shares outstanding
|
16,330
|
|
|
14,384
|
|
|
13,687
|
|
|||
Net income (loss) per common share
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.40
|
)
|
|
$
|
0.03
|
|
|
$
|
0.48
|
|
Diluted
|
$
|
(0.40
|
)
|
|
$
|
0.03
|
|
|
$
|
0.47
|
|
|
Year Ended December 31,
|
|||||||
|
2011
|
|
2010
|
|
2009
|
|||
Employee equity incentive plans
|
3,728,302
|
|
|
1,650,320
|
|
|
1,500,767
|
|
Conversion of debentures
|
—
|
|
|
215,976
|
|
|
356,309
|
|
|
Year Ended December 31,
|
||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||
Cash paid (received) during the year for:
|
|
|
|
|
|
||||||
Interest
|
$
|
265
|
|
|
$
|
401
|
|
|
$
|
620
|
|
Income taxes, net of refunds received
|
484
|
|
|
(48
|
)
|
|
196
|
|
|||
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Acquisitions of property and equipment and other
assets under extended payment terms
|
$
|
2,598
|
|
|
$
|
4,400
|
|
|
$
|
2,966
|
|
Unrealized gain on available-for-sale securities
|
—
|
|
|
47
|
|
|
1,003
|
|
|
Number of
shares
|
|
Weighted
average
exercise
price
|
|||
Options outstanding as of December 31, 2010:
|
2,895,118
|
|
|
$
|
5.27
|
|
Granted
|
713,000
|
|
|
3.20
|
|
|
Exercised
|
(60,611
|
)
|
|
1.09
|
|
|
Cancellations and forfeitures
|
(70,329
|
)
|
|
3.05
|
|
|
Expired
|
(62,906
|
)
|
|
11.43
|
|
|
Options outstanding as of December 31, 2011:
|
3,414,272
|
|
|
$
|
4.85
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
|||||||||||||
Range of exercise prices
|
|
Number
outstanding as of
December 31,
2011
|
|
Weighted
average
remaining
contractual
life
|
|
Weighted
average
exercise
price
|
|
Number
exercisable as of
December 31,
2011
|
|
Weighted
average
exercise
price
|
|||||||
$0.21 - $0.75
|
|
663,544
|
|
|
6.19
|
|
|
$
|
0.62
|
|
|
570,047
|
|
|
$
|
0.62
|
|
0.76 - 2.50
|
|
565,849
|
|
|
5.28
|
|
|
2.11
|
|
|
418,347
|
|
|
2.13
|
|
||
2.51 - 3.25
|
|
475,999
|
|
|
3.70
|
|
|
3.12
|
|
|
283,768
|
|
|
3.12
|
|
||
3.26 - 4.00
|
|
1,054,460
|
|
|
4.42
|
|
|
3.40
|
|
|
404,092
|
|
|
3.37
|
|
||
4.01 - 49.50
|
|
654,420
|
|
|
3.51
|
|
|
15.08
|
|
|
633,540
|
|
|
15.41
|
|
||
$0.21 - $49.50
|
|
3,414,272
|
|
|
4.63
|
|
|
$
|
4.85
|
|
|
2,309,794
|
|
|
$
|
5.74
|
|
|
Number of
shares
|
|
Weighted
average
exercise
price
|
|
Weighted
average
remaining
contractual
term
|
|
Aggregate
intrinsic
value
|
||||||
Vested
|
2,309,794
|
|
|
$
|
5.74
|
|
|
4.65
|
|
|
$
|
1,148,144
|
|
Expected to vest
|
934,772
|
|
|
2.97
|
|
|
4.55
|
|
|
197,122
|
|
||
Total
|
3,244,566
|
|
|
$
|
4.94
|
|
|
4.62
|
|
|
$
|
1,345,266
|
|
|
Number of
shares
|
|
Weighted average grant date fair value
|
|||
Unvested at December 31, 2010:
|
40,000
|
|
|
$
|
4.26
|
|
Granted
|
218,000
|
|
|
3.19
|
|
|
Vested
|
(40,000
|
)
|
|
4.26
|
|
|
Cancellations
|
(23,800
|
)
|
|
3.06
|
|
|
Unvested at December 31, 2011:
|
194,200
|
|
|
$
|
3.20
|
|
Expected to vest after December 31, 2011
|
190,466
|
|
|
$
|
3.20
|
|
|
Year Ended December 31,
|
|||||||
|
2011
|
|
2010
|
|
2009
|
|||
Stock Option Plans:
|
|
|
|
|
|
|||
Risk free interest rate
|
1.97
|
%
|
|
2.11
|
%
|
|
2.24
|
%
|
Expected dividend yield
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
Expected term (in years)
|
4.66
|
|
|
4.60
|
|
|
5.00
|
|
Volatility
|
92
|
%
|
|
92
|
%
|
|
84
|
%
|
Employee Stock Purchase Plan:
|
|
|
|
|
|
|||
Risk free interest rate
|
0.15
|
%
|
|
0.33
|
%
|
|
0.33
|
%
|
Expected dividend yield
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
Expected term (in years)
|
1.06
|
|
|
1.10
|
|
|
0.50
|
|
Volatility
|
52
|
%
|
|
94
|
%
|
|
137
|
%
|
|
Quarterly Period Ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
2011
|
|
|
|
|
|
|
|
||||||||
Revenue, net
|
$
|
14,700
|
|
|
$
|
15,690
|
|
|
$
|
17,391
|
|
|
$
|
16,828
|
|
Gross profit
|
6,572
|
|
|
7,419
|
|
|
8,456
|
|
|
7,920
|
|
||||
Loss from operations
|
(3,257
|
)
|
|
(1,792
|
)
|
|
(1,167
|
)
|
|
(1,589
|
)
|
||||
Loss before income taxes
|
(1,559
|
)
|
|
(1,932
|
)
|
|
(1,256
|
)
|
|
(1,678
|
)
|
||||
Net loss
|
(1,468
|
)
|
|
(2,058
|
)
|
|
(1,083
|
)
|
|
(1,957
|
)
|
||||
Net loss per share - basic and diluted:
|
(0.11
|
)
|
|
(0.13
|
)
|
|
(0.06
|
)
|
|
(0.11
|
)
|
||||
2010
|
|
|
|
|
|
|
|
||||||||
Revenue, net
|
$
|
18,692
|
|
|
$
|
18,665
|
|
|
$
|
18,027
|
|
|
$
|
14,145
|
|
Gross profit
|
8,656
|
|
|
8,647
|
|
|
8,294
|
|
|
6,566
|
|
||||
Loss from operations
|
(571
|
)
|
|
(863
|
)
|
|
(1,003
|
)
|
|
(3,471
|
)
|
||||
Loss before income taxes
|
(699
|
)
|
|
(642
|
)
|
|
(814
|
)
|
|
(2,867
|
)
|
||||
Net income (loss)
|
4,602
|
|
|
(1,015
|
)
|
|
7
|
|
|
(3,221
|
)
|
||||
Net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
0.34
|
|
|
(0.08
|
)
|
|
0.00
|
|
|
(0.24
|
)
|
||||
Diluted
|
0.32
|
|
|
(0.08
|
)
|
|
0.00
|
|
|
(0.24
|
)
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|
Item 9A.
|
Controls and Procedures.
|
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
|
|
|
3.1
|
Sixth Amended and Restated Articles of Incorporation of Pixelworks, Inc., As Amended (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed on August 9, 2004).
|
|
|
3.2
|
Third Amendment to Sixth Amended and Restated Articles of Incorporation of Pixelworks, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed on August 11, 2008).
|
|
|
3.3
|
Second Amended and Restated Bylaws of Pixelworks, Inc. (incorporated by reference to Exhibit 3.3 to the Company’s Annual Report on Form 10-K filed March 10, 2010).
|
|
|
4.1
|
Reference is made to Exhibit 3.1 above (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1 declared effective May 19, 2000).
|
|
|
4.2
|
Third Amended Registration Rights Agreement dated February 22, 2000 (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-1 declared effective May 19, 2000).
|
|
|
10.1
|
Form of Indemnity Agreement between Pixelworks, Inc. and certain of its Officers and Directors (incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-1 declared effective May 19, 2000). +
|
|
|
10.2
|
Form of Indemnity Agreement between Pixelworks, Inc. and each of the members of the Board and Steven Moore, the Company’s Chief Financial Officer (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 2, 2010). +
|
|
|
10.3
|
Pixelworks, Inc. 1997 Stock Incentive Plan, as amended (incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement on Form S-8 filed on June 21, 2005). +
|
|
|
10.4
|
Pixelworks, Inc. Amended and Restated 2010 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on May 12, 2011). +
|
|
|
10.5
|
Pixelworks, Inc. 2001 Nonqualified Stock Option Plan (incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement on Form S-8 filed on May 31, 2001). +
|
|
|
10.6
|
Equator Technologies, Inc. 1996 Stock Option Plan, as amended (incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement on Form S-8 filed on June 17, 2005). +
|
|
|
10.7
|
Pixelworks, Inc. Amended and Restated 2006 Stock Incentive Plan (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-8 filed on July 16, 2010). +
|
|
|
10.8
|
Pixelworks, Inc. Amended and Restated 2006 Stock Incentive Plan, Terms and Conditions of Restricted Stock Awards (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on May 7, 2009). +
|
|
|
10.9
|
Pixelworks, Inc. Amended and Restated 2006 Stock Incentive Plan, Terms and Conditions of Option Grants. +
|
|
|
10.10
|
Pixelworks, Inc. Amended and Restated 2006 Stock Incentive Plan, Terms and Conditions of Director Stock Unit Awards (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on November 4, 2010). +
|
|
|
10.11
|
Pixelworks, Inc. Amended and Restated 2006 Stock Incentive Plan, Terms and Conditions of Restricted Stock Unit Award (incorporated by reference to Exhibit 10.11 to the Company's Annual Report on Form 10-K filed March 9, 2011). +
|
|
|
10.12
|
Summary of Pixelworks Non-Employee Director Compensation (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on November 4, 2010). +
|
|
|
10.13
|
2009 Executive Employment Agreement dated May 11, 2009 and effective April 1, 2009, by and between Bruce Walicek and Pixelworks, Inc (incorporated by reference to Exhibit 10.13 to the Company’s Annual Report on Form 10-K filed March 10, 2010). +
|
|
|
10.14
|
Form of Pixelworks, Inc. Senior Management Bonus Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 31, 2009). +
|
|
|
10.15
|
Offer letter dated June 22, 2007 between Pixelworks, Inc. and Steven L. Moore (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed August 9, 2007). +
|
|
|
10.16
|
Change of Control Severance Agreement dated May 11, 2009 and effective April 1, 2009, by and between Pixelworks, Inc. and Steven L. Moore (incorporated by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K filed March 10, 2010). +
|
|
|
10.17
|
Change of Control Severance Agreement dated November 20, 2008, by and between Pixelworks, Inc. and Hongmin (Bob) Zhang (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed November 20, 2008). +
|
|
|
10.18
|
Change of Control Severance Agreement dated November 22, 2008, by and between Pixelworks, Inc. and Tzoyao (T) Chan (incorporated by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K filed March 10, 2010). +
|
|
|
10.19
|
Change of Control Severance Agreement dated December 27, 2011, by and between Pixelworks, Inc. and John Lau. +
|
|
|
10.20
|
Repatriation Agreement dated December 27, 2011, by and between Pixelworks, Inc. and John Lau. +
|
|
|
10.21
|
Amendment to the amended and restated Employment Agreement by and between Pixelworks, Inc. and Bruce Walicek (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 24, 2012). +
|
|
|
10.22
|
Amendment to the Amended and restated Change of Control Severance Agreement by and between Pixelworks, Inc. and Steven Moore (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 24, 2012). +
|
|
|
10.23
|
Form of the Amendment to each Change of Control Severance Agreement by and between Pixelworks, Inc. and Tzoyao “T” Chan, John Lau, and Hongmin (Bob) Zhang (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on February 24, 2012). +
|
|
|
10.24
|
Intellectual Property Sublicense Agreement dated March 30, 1999 between VAutomation Incorporated and Pixelworks, Inc. (incorporated by reference to Exhibit 10.9 to the Company’s Registration Statement on Form S-1 declared effective May 19, 2000).
|
|
|
10.25
|
License Agreement dated February 22, 2000 between Pixelworks, Inc. and InFocus Systems, Inc. (incorporated by reference to Exhibit 10.10 to the Company’s Registration Statement on Form S-1 declared effective May 19, 2000).
|
|
|
10.26
|
Office Lease Agreement dated December 2005, by and between CA-The Concourse Limited Partnership and Pixelworks, Inc. (incorporated by reference to Exhibit 10.42 to the Company’s Annual Report on Form 10-K filed March 13, 2006).
|
|
|
10.27
|
Office Lease Agreement dated September 10, 2008 and commencing December 1, 2008 by and between Pixelworks, Inc. and Durham Plaza, LLC (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on November 7, 2008).
|
|
|
10.28
|
Loan and Security Agreement dated December 21, 2010 by and between Silicon Valley Bank and Pixelworks, Inc. (incorporated by reference to Exhibit 10.26 to the Company’s Annual Report on Form 10-K filed March 7, 2011).
|
|
|
10.29
|
Agreement dated as of February 8, 2012, by and among Pixelworks, Inc., Steven R. Becker, Matthew A. Drapkin, BC Advisors, LLC, a Texas limited liability company, Becker Drapkin Management, L.P., a Texas limited partnership, Becker Drapkin Partners (QP), L.P., a Texas limited partnership; Becker Drapkin Partners, L.P., a Texas limited partnership; BD Partners IV, L.P., a Texas limited partnership, and Bradley Shisler (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed February 10, 2012).
|
|
|
21
|
Subsidiaries of Pixelworks, Inc. (incorporated by reference to Exhibit 21 to the Company's Annual Report on Form 10-K filed March 7, 2011).
|
|
|
23
|
Consent of KPMG LLP.
|
|
|
31.1
|
Certification of Chief Executive Officer.
|
|
|
31.2
|
Certification of Chief Financial Officer.
|
|
|
32.1*
|
Certification of Chief Executive Officer.
|
|
|
32.2*
|
Certification of Chief Financial Officer.
|
+
|
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 7, 2012
|
By:
|
|
/s/ Bruce A. Walicek
|
|
|
|
|
Bruce A. Walicek
|
|
|
|
|
President and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ Bruce A. Walicek
|
|
President and
|
|
|
Bruce A. Walicek
|
|
Chief Executive Officer
|
|
March 7, 2012
|
|
|
|
||
/s/ Steven L. Moore
|
|
Vice President, Chief Financial Officer, Secretary and Treasurer
|
|
|
Steven L. Moore
|
|
|
|
March 7, 2012
|
|
|
|
||
/s/ Richard L. Sanquini
|
|
Chairman of the Board
|
|
|
Richard L. Sanquini
|
|
|
|
March 7, 2012
|
|
|
|
||
/s/ Steven R. Becker
|
|
Director
|
|
|
Steven R. Becker
|
|
|
|
March 7, 2012
|
|
|
|
|
|
/s/ Mark A. Christensen
|
|
Director
|
|
|
Mark A. Christensen
|
|
|
|
March 7, 2012
|
|
|
|
||
/s/ Stephen L. Domenik
|
|
Director
|
|
|
Stephen L. Domenik
|
|
|
|
March 7, 2012
|
|
|
|
|
|
/s/ C. Scott Gibson
|
|
Director
|
|
|
C. Scott Gibson
|
|
|
|
March 7, 2012
|
|
|
|
||
/s/ Daniel J. Heneghan
|
|
Director
|
|
|
Daniel J. Heneghan
|
|
|
|
March 7, 2012
|
|
|
|
||
/s/ Bradley J. Shisler
|
|
Director
|
|
|
Bradley J. Shisler
|
|
|
|
March 7, 2012
|
|
|
|
|
|
/s/ Bruce A. Walicek
|
|
Director
|
|
|
Bruce A. Walicek
|
|
|
|
March 7, 2012
|
•
|
Cumulative Exercisability. To the extent that the Option is vested and exercisable, the Grantee has the right to exercise the Option (to the extent not previously exercised), and such right shall continue, until the expiration or earlier termination of the Option.
|
•
|
No Fractional Shares. Fractional share interests shall be disregarded, but may be cumulated.
|
•
|
Minimum Exercise. No fewer than 100 shares of Common Stock (subject to adjustment under Section 11 of the Plan) may be purchased at any one time, unless the number purchased is the total number at the time exercisable under the Option.
|
•
|
Incentive Stock Option Status; $100,000 Value Limit. The Grant Notice indicates whether the Option is intended as an Incentive Stock Option (within the meaning of Section 422 of the U.S. Internal Revenue Code) or a Nonqualified Stock Option. If the Option is intended to qualify as an Incentive Stock Option and the aggregate fair market value of the shares with respect to which Incentive Stock Options (whether granted under the Option or otherwise) first become exercisable by the Grantee in any calendar year exceeds $100,000, as measured on the applicable Award Dates, the limitations of Section 5.2 of the Plan shall apply and to such extent the Option will be rendered a Nonqualified Stock Option.
|
•
|
a written notice stating the number of shares of Common Stock to be purchased pursuant to the Option or by the completion of such other administrative exercise procedures as the Administrator may require from time to time,
|
•
|
payment in full for the Exercise Price of the shares to be purchased in cash, check or by electronic funds transfer to the Company, or (subject to compliance with all applicable laws, rules, regulations and listing requirements and further subject to such rules as the Administrator may adopt as to any non-cash payment) in shares of Common Stock already owned by the Grantee, valued at their fair market value (as determined under the Plan) on the exercise date;
|
•
|
any written statements or agreements required pursuant to Section 16.1 of the Plan; and
|
•
|
satisfaction of the tax withholding provisions of Section 10 of these Terms.The Administrator also may, but is not required to, authorize a non-cash payment alternative by notice and third party payment in such manner as may be authorized by the Administrator, or, subject to such procedures as the Administrator may adopt, authorize a “cashless exercise” with a third party who provides simultaneous financing for the purposes of (or who otherwise facilitates) the exercise of the Option.
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•
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other than as expressly provided below in this Section 5.3, (a) the Grantee will have until the date that is 3 months after his or her Severance Date to exercise the Option (or portion thereof) to the extent that it was vested on the Severance Date, (b) the Option, to the extent not vested on the Severance Date, shall terminate on the Severance Date, and (c) the Option, to the extent exercisable for the 3-month period following the Severance Date and not exercised during such period, shall terminate at the close of business on the last day of the 3-month period;
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•
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if the termination of the Grantee's Continuous Status as an Employee or Consultant is the result of the Grantee's Involuntary Termination, death or Disability, (a) the Grantee (or his or her beneficiary or personal representative, as the case may be) will have until the date that is 12 months after the Grantee's Severance Date to exercise the Option (or portion thereof) to the extent that it was vested on the Severance Date, (b) the Option, to the extent not vested on the Severance Date, shall terminate on the Severance Date, and (c) the Option, to the extent exercisable for the 12-month period following the Severance Date and not exercised during such period, shall terminate at the close of business on the last day of the 12-month period. “Involuntary Termination” means that the Grantee's Continuous Status as an Employee or Consultant has ended by the Company's choice, not the choice of the Grantee, and that the Company has made that choice for reasons other than (i) Grantee's own failure to perform his or her duties to the company's satisfaction, or (ii) the Grantee's own bad conduct. However, If the Grantee is party to an agreement with the Company that contains severance conditions and includes a specific definition of the term “Involuntary Termination,” that specific definition will control.
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Pixelworks, Inc.
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Executive
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/s/ Bruce A. Walicek
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/s/ John Lau 12/27/2011
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Bruce Walicek
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John Lau
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TO:
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John Lau
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FROM:
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Bruce Walicek, Chief Executive Officer
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Cc:
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Steven Moore, Chief Financial Officer
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Canny Ko, Senior Manager, Human Resources
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Personnel File
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RE:
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Repatriation Agreement
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/s/ John Lau
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12/27/2011
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John Lau
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Date
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/s/ Bruce A. Walicek
|
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12/27/2011
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Bruce A. Walicek
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Date
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Chief Executive Officer
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|
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1.
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I have reviewed this annual report on Form 10-K of Pixelworks, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date:
|
March 7, 2012
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By:
|
|
/s/ Bruce A. Walicek
|
|
|
|
|
Bruce A. Walicek
|
|
|
|
|
President and
Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Pixelworks, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
March 7, 2012
|
By:
|
|
/s/ Steven L. Moore
|
|
|
|
|
Steven L. Moore
|
|
|
|
|
Vice President, Chief Financial Officer,
Secretary and Treasurer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By:
|
|
/s/ Bruce A. Walicek
|
|
|
Bruce A. Walicek
|
|
|
President and Chief Executive
Officer
|
|
|
|
Date:
|
|
March 7, 2012
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By:
|
|
/s/ Steven L. Moore
|
|
|
Steven L. Moore
|
|
|
Vice President,Chief Financial Officer
Secretary, and Treasurer
|
|
|
|
Date:
|
|
March 7, 2012
|