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
|
|
95110
|
(Address of principal executive offices)
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(Zip Code)
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Title of each class
|
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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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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 16.
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Item 1.
|
Business.
|
•
|
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.
|
•
|
Color Gamut:
DCI-P3 has a 25% larger color gamut than Rec.709.
|
•
|
Frame Rate:
Most movies are available in 24 or 25 frames per second, a rate at which the human eye still perceives judder, but cannot identify individual still images or frames and sees a video instead. Mobile devices on the other hand have displays that run at 60 frames per second, and TVs commonly display 120 frames per second - frame rates at which the eye perceives smooth motion. In addition to the display frame rate discrepancy, the transmission rates vary based on various factors such as available bandwidth. Standard frame rate conversion requires the original content frames being repeated or dropped in order to match the frame rate of the display. This causes the video to appear to judder. Judder is a common problem in video systems and occurs when there is a sudden jump or discontinuity in motion from one frame of a motion video sequence to the next. This can be caused by content being created at a frame rate per second that is too low, or the original content frames are being repeated or dropped in order to match either a transmission standard or the playback frame rate of the display.
|
•
|
Resolution:
Finally, TVs have achieved 4k resolutions (3840x2160) and mobile devices commonly achieve 2560x1440, and while some content is available in 4k resolution, most movies are only available in FHD or HD resolutions (typically 1920x1080 and 1280x720 respectively).
|
•
|
Smartphones.
Smartphones have become a popular choice for many consumers. CCS Insight estimates that almost 2 billion smartphones will be sold in 2019, accounting for 88% of all mobile phones sold in 2019. 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.
|
•
|
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.
|
•
|
Halo Free MEMC
. Our proprietary Halo Free 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.
|
•
|
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.
|
•
|
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.
|
•
|
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.
|
•
|
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 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.
|
•
|
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
43%
,
48%
and
63%
of revenue in 2016, 2015 and 2014, 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
57%
,
52%
and
37%
of total revenue in 2016, 2015 and 2014, respectively.
|
•
|
Integrators
.
Integrators are OEMs 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;
|
•
|
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 or failure to meet expectations as to our future financial performance;
|
•
|
changes in or failure to meet 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.
|
•
|
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;
|
•
|
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
|
|
77,000
|
|
Various dates
through
March 2020
|
California
|
|
Administration;
engineering; sales
|
|
19,000
|
|
December 2018
|
Taiwan
|
|
Customer support; sales;
operations; engineering
|
|
16,000
|
|
Various dates through November 2017
|
Oregon
|
|
Administration
|
|
5,000
|
|
December 2019
|
Japan
|
|
Sales; customer support
|
|
3,000
|
|
January 2019
|
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 2016
|
High
|
|
Low
|
||||
Fourth Quarter
|
$
|
3.49
|
|
|
$
|
2.17
|
|
Third Quarter
|
3.29
|
|
|
1.77
|
|
||
Second Quarter
|
2.48
|
|
|
1.55
|
|
||
First Quarter
|
2.58
|
|
|
1.22
|
|
||
|
|
|
|
||||
Fiscal 2015
|
High
|
|
Low
|
||||
Fourth Quarter
|
$
|
3.89
|
|
|
$
|
2.21
|
|
Third Quarter
|
6.33
|
|
|
3.40
|
|
||
Second Quarter
|
7.13
|
|
|
4.12
|
|
||
First Quarter
|
6.18
|
|
|
4.30
|
|
•
|
NASDAQ U.S. Benchmark TR Index
|
•
|
NASDAQ OMX Electrical Components and Equipment Index
|
Item 6.
|
Selected Financial Data.
|
|
Year ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Consolidated Statements of Operations Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue, net
|
$
|
53,390
|
|
|
$
|
59,517
|
|
|
$
|
60,923
|
|
|
$
|
48,118
|
|
|
$
|
59,710
|
|
Cost of revenue
|
28,322
|
|
|
30,224
|
|
|
29,142
|
|
|
21,708
|
|
|
29,862
|
|
|||||
Gross profit
|
25,068
|
|
|
29,293
|
|
|
31,781
|
|
|
26,410
|
|
|
29,848
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
19,036
|
|
|
24,644
|
|
|
25,296
|
|
|
20,664
|
|
|
20,757
|
|
|||||
Selling, general and administrative
|
13,770
|
|
|
14,453
|
|
|
15,434
|
|
|
13,883
|
|
|
14,944
|
|
|||||
Restructuring
|
2,608
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total operating expenses
|
35,414
|
|
|
39,097
|
|
|
40,730
|
|
|
34,547
|
|
|
35,701
|
|
|||||
Loss from operations
|
(10,346
|
)
|
|
(9,804
|
)
|
|
(8,949
|
)
|
|
(8,137
|
)
|
|
(5,853
|
)
|
|||||
Other expense, net
|
(406
|
)
|
|
(446
|
)
|
|
(493
|
)
|
|
(405
|
)
|
|
(412
|
)
|
|||||
Loss before income taxes
|
(10,752
|
)
|
|
(10,250
|
)
|
|
(9,442
|
)
|
|
(8,542
|
)
|
|
(6,265
|
)
|
|||||
Provision (benefit) for income taxes
|
355
|
|
|
320
|
|
|
518
|
|
|
328
|
|
|
(571
|
)
|
|||||
Net loss
|
$
|
(11,107
|
)
|
|
$
|
(10,570
|
)
|
|
$
|
(9,960
|
)
|
|
$
|
(8,870
|
)
|
|
$
|
(5,694
|
)
|
Net loss per share - basic and diluted
|
$
|
(0.39
|
)
|
|
$
|
(0.42
|
)
|
|
$
|
(0.44
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
(0.31
|
)
|
Weighted average shares outstanding - basic and diluted
|
28,276
|
|
|
25,088
|
|
|
22,766
|
|
|
19,816
|
|
|
18,252
|
|
|
December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Consolidated Balance Sheets Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
19,622
|
|
|
$
|
26,591
|
|
|
$
|
17,926
|
|
|
$
|
20,805
|
|
|
$
|
13,404
|
|
Working capital
|
16,545
|
|
|
21,796
|
|
|
11,470
|
|
|
15,163
|
|
|
10,508
|
|
|||||
Total assets
|
30,857
|
|
|
43,842
|
|
|
34,144
|
|
|
36,744
|
|
|
29,541
|
|
|||||
Long-term liabilities, net of current portion
|
2,074
|
|
|
2,773
|
|
|
3,570
|
|
|
2,878
|
|
|
3,776
|
|
|||||
Total shareholders’ equity
|
19,049
|
|
|
26,376
|
|
|
15,684
|
|
|
18,942
|
|
|
14,668
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operation.
|
|
Year ended December 31,
|
|
2016 v. 2015
|
|
2015 v. 2014
|
||||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
$ change
|
|
% change
|
|
$ change
|
|
% change
|
||||||||||||
Revenue, net
|
$
|
53,390
|
|
|
$
|
59,517
|
|
|
$
|
60,923
|
|
|
$
|
(6,127
|
)
|
|
(10
|
)%
|
|
$
|
(1,406
|
)
|
|
(2
|
)%
|
|
Year ended December 31,
|
|||||||||||||||||||
|
2016
|
|
% of
revenue
|
|
2015
|
|
% of
revenue
|
|
2014
|
|
% of
revenue
|
|||||||||
Direct product costs and related overhead
1
|
$
|
26,376
|
|
|
49
|
%
|
|
$
|
29,843
|
|
|
50
|
%
|
|
$
|
28,402
|
|
|
47
|
%
|
Restructuring
|
1,784
|
|
|
3
|
%
|
|
—
|
|
|
0
|
|
|
—
|
|
|
0
|
|
|||
Inventory charges
2
|
(28
|
)
|
|
0
|
|
|
199
|
|
|
0
|
|
|
267
|
|
|
0
|
|
|||
Licensing costs
3
|
—
|
|
|
0
|
|
|
—
|
|
|
0
|
|
|
146
|
|
|
0
|
|
|||
Other cost of revenue
4
|
190
|
|
|
0
|
|
|
182
|
|
|
0
|
|
|
327
|
|
|
1
|
|
|||
Total cost of revenue
|
$
|
28,322
|
|
|
53
|
%
|
|
$
|
30,224
|
|
|
51
|
%
|
|
$
|
29,142
|
|
|
48
|
%
|
Gross profit
|
$
|
25,068
|
|
|
47
|
%
|
|
$
|
29,293
|
|
|
49
|
%
|
|
$
|
31,781
|
|
|
52
|
%
|
1
|
Includes purchased materials, assembly, test, labor, employee benefits and royalties, all of which are related to sales of IC products.
|
2
|
Includes charges to reduce inventory to lower of cost or market and a benefit for sales of previously written down inventory.
|
3
|
Includes direct labor costs and allocated overhead associated with licensing agreements.
|
4
|
Includes stock-based compensation and additional amortization of a non-cancelable prepaid royalty.
|
|
Year ended December 31,
|
|
2016 v. 2015
|
|
2015 v. 2014
|
||||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
$ change
|
|
% change
|
|
$ change
|
|
% change
|
||||||||||||
Research and development
|
$
|
19,036
|
|
|
$
|
24,644
|
|
|
$
|
25,296
|
|
|
$
|
(5,608
|
)
|
|
(23
|
)%
|
|
$
|
(652
|
)
|
|
(3
|
)%
|
|
Year ended December 31,
|
|
2016 v. 2015
|
|
2015 v. 2014
|
||||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
$ change
|
|
% change
|
|
$ change
|
|
% change
|
||||||||||||
Selling, general and administrative
|
$
|
13,770
|
|
|
$
|
14,453
|
|
|
$
|
15,434
|
|
|
$
|
(683
|
)
|
|
(5
|
)%
|
|
$
|
(981
|
)
|
|
(6
|
)%
|
|
Year ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Employee severance and benefits
|
$
|
2,618
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Write off of assets
|
1,744
|
|
|
—
|
|
|
—
|
|
|||
Other
|
30
|
|
|
—
|
|
|
—
|
|
|||
Total restructuring expense
|
$
|
4,392
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Included in cost of revenue
|
$
|
1,784
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Included in operating expenses
|
2,608
|
|
|
—
|
|
|
—
|
|
|
Year ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Interest expense and other, net
|
$
|
(406
|
)
|
|
$
|
(446
|
)
|
|
$
|
(493
|
)
|
|
Year ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Provision for income taxes
|
$
|
355
|
|
|
$
|
320
|
|
|
$
|
518
|
|
|
Payments Due By Period
|
||||||||||||||||||
Contractual Obligation
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
||||||||||
Operating leases
|
$
|
5,167
|
|
|
$
|
2,329
|
|
|
$
|
2,646
|
|
|
$
|
192
|
|
|
$
|
—
|
|
Payments on accrued balances related to asset financings
|
418
|
|
|
418
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Estimated purchase commitments to contract manufacturers
|
9,226
|
|
|
9,226
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
1
|
$
|
14,811
|
|
|
$
|
11,973
|
|
|
$
|
2,646
|
|
|
$
|
192
|
|
|
$
|
—
|
|
1
|
We are unable to reliably estimate the timing of future payments related to uncertain tax positions and repatriation of foreign earnings; therefore, $1.9 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 8, 2017
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
19,622
|
|
|
$
|
26,591
|
|
Accounts receivable, net
|
3,118
|
|
|
5,988
|
|
||
Inventories
|
2,803
|
|
|
3,266
|
|
||
Prepaid expenses and other current assets
|
736
|
|
|
644
|
|
||
Total current assets
|
26,279
|
|
|
36,489
|
|
||
Property and equipment, net
|
3,793
|
|
|
6,543
|
|
||
Other assets, net
|
785
|
|
|
810
|
|
||
Total assets
|
$
|
30,857
|
|
|
$
|
43,842
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
1,734
|
|
|
$
|
2,944
|
|
Accrued liabilities and current portion of long-term liabilities
|
7,860
|
|
|
8,528
|
|
||
Current portion of income taxes payable
|
140
|
|
|
221
|
|
||
Short-term line of credit
|
—
|
|
|
3,000
|
|
||
Total current liabilities
|
9,734
|
|
|
14,693
|
|
||
Long-term liabilities, net of current portion
|
194
|
|
|
831
|
|
||
Income taxes payable, net of current portion
|
1,880
|
|
|
1,942
|
|
||
Total liabilities
|
11,808
|
|
|
17,466
|
|
||
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, 28,885,795 and 27,764,208 shares issued and outstanding as of December 31, 2016 and 2015, respectively
|
394,296
|
|
|
390,520
|
|
||
Accumulated other comprehensive income
|
10
|
|
|
6
|
|
||
Accumulated deficit
|
(375,257
|
)
|
|
(364,150
|
)
|
||
Total shareholders' equity
|
19,049
|
|
|
26,376
|
|
||
Total liabilities and shareholders' equity
|
$
|
30,857
|
|
|
$
|
43,842
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenue, net
|
$
|
53,390
|
|
|
$
|
59,517
|
|
|
$
|
60,923
|
|
Cost of revenue (1)
|
28,322
|
|
|
30,224
|
|
|
29,142
|
|
|||
Gross profit
|
25,068
|
|
|
29,293
|
|
|
31,781
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development (2)
|
19,036
|
|
|
24,644
|
|
|
25,296
|
|
|||
Selling, general and administrative (3)
|
13,770
|
|
|
14,453
|
|
|
15,434
|
|
|||
Restructuring
|
2,608
|
|
|
—
|
|
|
—
|
|
|||
Total operating expenses
|
35,414
|
|
|
39,097
|
|
|
40,730
|
|
|||
Loss from operations
|
(10,346
|
)
|
|
(9,804
|
)
|
|
(8,949
|
)
|
|||
Interest expense and other, net
|
(406
|
)
|
|
(446
|
)
|
|
(493
|
)
|
|||
Loss before income taxes
|
(10,752
|
)
|
|
(10,250
|
)
|
|
(9,442
|
)
|
|||
Provision for income taxes
|
355
|
|
|
320
|
|
|
518
|
|
|||
Net loss
|
$
|
(11,107
|
)
|
|
$
|
(10,570
|
)
|
|
$
|
(9,960
|
)
|
Net loss per share - basic and diluted
|
$
|
(0.39
|
)
|
|
$
|
(0.42
|
)
|
|
$
|
(0.44
|
)
|
Weighted average shares outstanding - basic and diluted
|
28,276
|
|
|
25,088
|
|
|
22,766
|
|
|||
|
|
|
|
|
|
||||||
(1) Includes:
|
|
|
|
|
|
||||||
Restructuring
|
$
|
1,784
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Stock-based compensation
|
190
|
|
|
196
|
|
|
262
|
|
|||
Additional amortization of non-cancelable prepaid royalty
|
—
|
|
|
(14
|
)
|
|
65
|
|
|||
(2) Includes stock-based compensation
|
1,600
|
|
|
1,927
|
|
|
2,441
|
|
|||
(3) Includes stock-based compensation
|
872
|
|
|
1,798
|
|
|
2,599
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net loss
|
$
|
(11,107
|
)
|
|
$
|
(10,570
|
)
|
|
$
|
(9,960
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign pension adjustment
|
6
|
|
|
(6
|
)
|
|
112
|
|
|||
Tax effect of pension adjustment
|
(2
|
)
|
|
1
|
|
|
(19
|
)
|
|||
Total comprehensive loss
|
$
|
(11,103
|
)
|
|
$
|
(10,575
|
)
|
|
$
|
(9,867
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(11,107
|
)
|
|
$
|
(10,570
|
)
|
|
$
|
(9,960
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
3,466
|
|
|
4,263
|
|
|
4,514
|
|
|||
Stock-based compensation
|
2,662
|
|
|
3,921
|
|
|
5,302
|
|
|||
Write off of certain assets to restructuring
|
1,744
|
|
|
—
|
|
|
—
|
|
|||
Reversal of uncertain tax positions
|
(170
|
)
|
|
(323
|
)
|
|
(270
|
)
|
|||
Deferred income tax expense
|
22
|
|
|
23
|
|
|
89
|
|
|||
Other
|
47
|
|
|
53
|
|
|
72
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
2,870
|
|
|
(1,340
|
)
|
|
113
|
|
|||
Inventories
|
179
|
|
|
(368
|
)
|
|
(1,235
|
)
|
|||
Prepaid expenses and other current and long-term assets, net
|
(166
|
)
|
|
163
|
|
|
2,253
|
|
|||
Accounts payable
|
(1,210
|
)
|
|
(210
|
)
|
|
1,827
|
|
|||
Accrued current and long-term liabilities
|
101
|
|
|
346
|
|
|
(1,446
|
)
|
|||
Income taxes payable
|
27
|
|
|
195
|
|
|
429
|
|
|||
Net cash provided by (used in) operating activities
|
(1,535
|
)
|
|
(3,847
|
)
|
|
1,688
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
(2,144
|
)
|
|
(3,012
|
)
|
|
(2,861
|
)
|
|||
Purchases of licensed technology
|
—
|
|
|
(55
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
(2,144
|
)
|
|
(3,067
|
)
|
|
(2,861
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Payments on line of credit
|
(3,000
|
)
|
|
—
|
|
|
—
|
|
|||
Payments on asset financings
|
(1,367
|
)
|
|
(1,767
|
)
|
|
(3,013
|
)
|
|||
Proceeds from issuances of common stock under employee equity incentive plans
|
1,077
|
|
|
990
|
|
|
1,307
|
|
|||
Net proceeds from equity offering
|
—
|
|
|
16,356
|
|
|
—
|
|
|||
Net cash provided by (used in) financing activities
|
(3,290
|
)
|
|
15,579
|
|
|
(1,706
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
(6,969
|
)
|
|
8,665
|
|
|
(2,879
|
)
|
|||
Cash and cash equivalents, beginning of period
|
26,591
|
|
|
17,926
|
|
|
20,805
|
|
|||
Cash and cash equivalents, end of period
|
$
|
19,622
|
|
|
$
|
26,591
|
|
|
$
|
17,926
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for income taxes, net of refunds received
|
$
|
437
|
|
|
$
|
366
|
|
|
$
|
213
|
|
Cash paid during the year for interest
|
139
|
|
|
104
|
|
|
193
|
|
|||
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Acquisitions of property and equipment and other
assets under extended payment terms
|
$
|
—
|
|
|
$
|
765
|
|
|
$
|
3,381
|
|
|
Common Stock
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Accumulated
Deficit
|
|
Total
Shareholders'
Equity
|
|||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||
Balance as of December 31, 2013
|
22,006,932
|
|
|
362,644
|
|
|
(82
|
)
|
|
(343,620
|
)
|
|
18,942
|
|
||||
Stock issued under employee equity incentive plans
|
1,213,602
|
|
|
1,307
|
|
|
—
|
|
|
—
|
|
|
1,307
|
|
||||
Stock-based compensation expense
|
—
|
|
|
5,302
|
|
|
—
|
|
|
—
|
|
|
5,302
|
|
||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,960
|
)
|
|
(9,960
|
)
|
||||
Foreign pension adjustment, net of tax of $19
|
—
|
|
|
—
|
|
|
93
|
|
|
—
|
|
|
93
|
|
||||
Balance as of December 31, 2014
|
23,220,534
|
|
|
369,253
|
|
|
11
|
|
|
(353,580
|
)
|
|
15,684
|
|
||||
Stock issued under employee equity incentive plans
|
806,174
|
|
|
990
|
|
|
—
|
|
|
—
|
|
|
990
|
|
||||
Equity offering
|
3,737,500
|
|
|
16,356
|
|
|
—
|
|
|
—
|
|
|
16,356
|
|
||||
Stock-based compensation expense
|
—
|
|
|
3,921
|
|
|
—
|
|
|
—
|
|
|
3,921
|
|
||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,570
|
)
|
|
(10,570
|
)
|
||||
Foreign pension adjustment, net of tax of $(1)
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
||||
Balance as of December 31, 2015
|
27,764,208
|
|
|
390,520
|
|
|
6
|
|
|
(364,150
|
)
|
|
26,376
|
|
||||
Stock issued under employee equity incentive plans
|
1,121,587
|
|
|
1,077
|
|
|
—
|
|
|
—
|
|
|
1,077
|
|
||||
Stock-based compensation expense
|
—
|
|
|
2,662
|
|
|
—
|
|
|
—
|
|
|
2,662
|
|
||||
Other
|
—
|
|
|
37
|
|
|
—
|
|
|
—
|
|
|
37
|
|
||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,107
|
)
|
|
(11,107
|
)
|
||||
Foreign pension adjustment, net of tax of $2
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||
Balance as of December 31, 2016
|
28,885,795
|
|
|
$
|
394,296
|
|
|
$
|
10
|
|
|
$
|
(375,257
|
)
|
|
$
|
19,049
|
|
|
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
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Actuarial income on foreign pension obligation
|
$
|
27
|
|
|
$
|
28
|
|
Accumulated transition foreign pension obligation
|
(17
|
)
|
|
(22
|
)
|
||
Accumulated other comprehensive income
|
$
|
10
|
|
|
$
|
6
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Accounts receivable, gross
|
$
|
3,150
|
|
|
$
|
6,048
|
|
Allowance for doubtful accounts
|
(32
|
)
|
|
(60
|
)
|
||
Accounts receivable, net
|
$
|
3,118
|
|
|
$
|
5,988
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at beginning of year
|
$
|
60
|
|
|
$
|
301
|
|
|
$
|
315
|
|
Additions charged (reductions credited)
|
(28
|
)
|
|
9
|
|
|
2
|
|
|||
Accounts written-off, net of recoveries
|
—
|
|
|
(250
|
)
|
|
(16
|
)
|
|||
Balance at end of year
|
$
|
32
|
|
|
$
|
60
|
|
|
$
|
301
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Finished goods
|
$
|
1,707
|
|
|
$
|
2,174
|
|
Work-in-process
|
1,096
|
|
|
1,092
|
|
||
Inventories
|
$
|
2,803
|
|
|
$
|
3,266
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Equipment, furniture and fixtures
|
$
|
10,070
|
|
|
$
|
9,847
|
|
Software
|
6,295
|
|
|
8,226
|
|
||
Tooling
|
5,714
|
|
|
5,810
|
|
||
Leasehold improvements
|
2,337
|
|
|
2,337
|
|
||
|
24,416
|
|
|
26,220
|
|
||
Accumulated depreciation and amortization
|
(20,623
|
)
|
|
(19,677
|
)
|
||
Property and equipment, net
|
$
|
3,793
|
|
|
$
|
6,543
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Accrued commissions and royalties
|
$
|
2,427
|
|
|
$
|
2,220
|
|
Accrued payroll and related liabilities
|
2,169
|
|
|
2,419
|
|
||
Accrued interest payable
|
2,078
|
|
|
1,754
|
|
||
Current portion of accrued liabilities for asset financings
|
389
|
|
|
1,241
|
|
||
Accrued costs related to restructuring
|
60
|
|
|
—
|
|
||
Reserve for warranty returns
|
28
|
|
|
49
|
|
||
Other
|
709
|
|
|
845
|
|
||
Accrued liabilities and current portion of long-term liabilities
|
$
|
7,860
|
|
|
$
|
8,528
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Reserve for warranty returns:
|
|
|
|
|
|
||||||
Balance at beginning of year
|
$
|
49
|
|
|
$
|
105
|
|
|
$
|
329
|
|
Provision (benefit)
|
6
|
|
|
(24
|
)
|
|
(195
|
)
|
|||
Charge-offs
|
(27
|
)
|
|
(32
|
)
|
|
(29
|
)
|
|||
Balance at end of year
|
$
|
28
|
|
|
$
|
49
|
|
|
$
|
105
|
|
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, 2016:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
17,960
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,960
|
|
As of December 31, 2015:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
25,343
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25,343
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cost of revenue — restructuring:
|
|
|
|
|
|
||||||
Tooling and inventory write offs
|
$
|
1,679
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Employee severance and benefits
|
105
|
|
|
—
|
|
|
—
|
|
|||
|
1,784
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Operating expenses — restructuring:
|
|
|
|
|
|
||||||
Employee severance and benefits
|
$
|
2,513
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Licensed technology and other asset write offs
|
65
|
|
|
—
|
|
|
—
|
|
|||
Other
|
30
|
|
|
—
|
|
|
—
|
|
|||
|
2,608
|
|
|
—
|
|
|
—
|
|
|||
Total restructuring expense
|
$
|
4,392
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Balance as of December 31, 2015
|
|
Expensed
|
|
Payments
|
|
Balance as of December 31, 2016
|
||||||||
Employee severance and benefits
|
$
|
—
|
|
|
$
|
2,618
|
|
|
$
|
(2,558
|
)
|
|
$
|
60
|
|
Other
|
—
|
|
|
30
|
|
|
(30
|
)
|
|
—
|
|
||||
Accrued costs related to restructuring
|
$
|
—
|
|
|
$
|
2,648
|
|
|
$
|
(2,588
|
)
|
|
$
|
60
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Domestic
|
$
|
(11,881
|
)
|
|
$
|
(11,675
|
)
|
|
$
|
(10,858
|
)
|
Foreign
|
1,129
|
|
|
1,425
|
|
|
1,416
|
|
|||
Domestic and foreign pre-tax loss
|
$
|
(10,752
|
)
|
|
$
|
(10,250
|
)
|
|
$
|
(9,442
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
55
|
|
|
$
|
55
|
|
|
$
|
55
|
|
State
|
2
|
|
|
2
|
|
|
—
|
|
|||
Foreign
|
276
|
|
|
240
|
|
|
374
|
|
|||
Total current
|
333
|
|
|
297
|
|
|
429
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Foreign
|
22
|
|
|
23
|
|
|
89
|
|
|||
Total deferred
|
22
|
|
|
23
|
|
|
89
|
|
|||
Income tax expense
|
$
|
355
|
|
|
$
|
320
|
|
|
$
|
518
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
77,357
|
|
|
$
|
73,903
|
|
Research and experimentation credit carryforwards
|
11,849
|
|
|
11,688
|
|
||
Foreign tax credit carryforwards
|
3,575
|
|
|
3,884
|
|
||
Deferred stock-based compensation
|
1,705
|
|
|
2,623
|
|
||
Depreciation and amortization
|
1,241
|
|
|
1,800
|
|
||
Reserves and accrued expenses
|
623
|
|
|
606
|
|
||
Capital loss carryforwards
|
—
|
|
|
358
|
|
||
Other
|
438
|
|
|
490
|
|
||
Total gross deferred tax assets
|
96,788
|
|
|
95,352
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Foreign earnings
|
(327
|
)
|
|
(376
|
)
|
||
Other
|
(269
|
)
|
|
(317
|
)
|
||
Total gross deferred tax liabilities
|
(596
|
)
|
|
(693
|
)
|
||
Less valuation allowance
|
(96,079
|
)
|
|
(94,524
|
)
|
||
Net deferred tax assets
|
$
|
113
|
|
|
$
|
135
|
|
|
2016
|
|
2015
|
||||
Uncertain tax positions:
|
|
|
|
||||
Balance at beginning of year
|
$
|
1,863
|
|
|
$
|
1,646
|
|
Accrual for positions taken in a prior year
|
(126
|
)
|
|
135
|
|
||
Accrual for positions taken in current year
|
257
|
|
|
299
|
|
||
Reversals due to lapse of statute of limitations
|
(108
|
)
|
|
(217
|
)
|
||
Balance at end of year
|
$
|
1,886
|
|
|
$
|
1,863
|
|
Interest and penalties:
|
|
|
|
||||
Balance at beginning of year
|
$
|
129
|
|
|
$
|
226
|
|
Accrual for positions taken in prior year
|
7
|
|
|
9
|
|
||
Accrual for positions taken in current year
|
19
|
|
|
—
|
|
||
Reversals due to lapse of statute of limitations
|
(62
|
)
|
|
(106
|
)
|
||
Balance at end of year
|
$
|
93
|
|
|
$
|
129
|
|
Year Ending December 31,
|
|
Software licenses
|
|
Operating leases
|
|
Total
|
||||||
2017
|
|
$
|
418
|
|
|
$
|
2,329
|
|
|
$
|
2,747
|
|
2018
|
|
—
|
|
|
1,732
|
|
|
1,732
|
|
|||
2019
|
|
—
|
|
|
914
|
|
|
914
|
|
|||
2020
|
|
—
|
|
|
192
|
|
|
192
|
|
|||
|
|
418
|
|
|
$
|
5,167
|
|
|
$
|
5,585
|
|
|
Less: Interest component
|
|
(29
|
)
|
|
|
|
|
|||||
Present value of minimum software license payments
|
|
389
|
|
|
|
|
|
|||||
Less: Current portion
|
|
(389
|
)
|
|
|
|
|
|||||
Long-term portion of obligations
|
|
$
|
—
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net loss
|
$
|
(11,107
|
)
|
|
$
|
(10,570
|
)
|
|
$
|
(9,960
|
)
|
Weighted average shares outstanding - basic and diluted
|
28,276
|
|
|
25,088
|
|
|
22,766
|
|
|||
Net loss per share - basic and diluted
|
$
|
(0.39
|
)
|
|
$
|
(0.42
|
)
|
|
$
|
(0.44
|
)
|
|
Year Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Employee equity incentive plans
|
4,982
|
|
|
4,248
|
|
|
4,346
|
|
|
Number of
shares
|
|
Weighted
average
exercise
price
|
|||
Options outstanding as of December 31, 2015:
|
3,057,120
|
|
|
$
|
2.98
|
|
Granted
|
704,750
|
|
|
2.34
|
|
|
Exercised
|
(450,028
|
)
|
|
1.83
|
|
|
Canceled and forfeited
|
(30,458
|
)
|
|
4.95
|
|
|
Expired
|
(775,682
|
)
|
|
4.65
|
|
|
Options outstanding as of December 31, 2016:
|
2,505,702
|
|
|
$
|
2.46
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
Range of exercise prices
|
|
Number
outstanding as of
December 31,
2016
|
|
Weighted
average
remaining
contractual
life
|
|
Weighted
average
exercise
price
|
|
Number
exercisable as of
December 31,
2016
|
|
Weighted
average
exercise
price
|
||||||
$0.60 - $1.97
|
|
668,317
|
|
|
3.11
|
|
$
|
1.06
|
|
|
468,317
|
|
|
$
|
0.67
|
|
2.00 - 2.36
|
|
537,470
|
|
|
0.98
|
|
2.32
|
|
|
529,534
|
|
|
2.33
|
|
||
2.37 - 2.95
|
|
553,136
|
|
|
4.50
|
|
2.59
|
|
|
102,032
|
|
|
2.86
|
|
||
2.98 - 3.48
|
|
589,778
|
|
|
0.82
|
|
3.33
|
|
|
589,278
|
|
|
3.33
|
|
||
3.89 - 8.56
|
|
157,001
|
|
|
1.12
|
|
5.19
|
|
|
143,566
|
|
|
5.17
|
|
||
$0.60 - $8.56
|
|
2,505,702
|
|
|
2.30
|
|
$
|
2.46
|
|
|
1,832,727
|
|
|
$
|
2.48
|
|
|
Number of
shares
|
|
Weighted
average
exercise
price
|
|
Weighted
average
remaining
contractual
term
|
|
Aggregate
intrinsic
value
|
|||||
Vested
|
1,832,727
|
|
|
$
|
2.48
|
|
|
1.22
|
|
$
|
1,257
|
|
Expected to vest
|
553,285
|
|
|
2.42
|
|
|
5.19
|
|
242
|
|
||
Total
|
2,386,012
|
|
|
$
|
2.46
|
|
|
2.14
|
|
$
|
1,499
|
|
|
Number of
shares
|
|
Weighted average grant date fair value
|
|||
Unvested at December 31, 2015:
|
918,676
|
|
|
$
|
5.62
|
|
Granted
|
1,572,519
|
|
|
2.21
|
|
|
Vested
|
(529,926
|
)
|
|
4.40
|
|
|
Canceled
|
(262,769
|
)
|
|
5.04
|
|
|
Unvested at December 31, 2016:
|
1,698,500
|
|
|
$
|
2.93
|
|
Expected to vest after December 31, 2016
|
1,433,081
|
|
|
$
|
2.93
|
|
|
Year Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Stock Option Plans:
|
|
|
|
|
|
|||
Risk free interest rate
|
1.37
|
%
|
|
1.52
|
%
|
|
1.64
|
%
|
Expected dividend yield
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
Expected term (in years)
|
5.00
|
|
|
5.00
|
|
|
5.00
|
|
Volatility
|
74
|
%
|
|
68
|
%
|
|
73
|
%
|
Employee Stock Purchase Plan:
|
|
|
|
|
|
|||
Risk free interest rate
|
0.20
|
%
|
|
0.28
|
%
|
|
0.22
|
%
|
Expected dividend yield
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
Expected term (in years)
|
1.12
|
|
|
1.10
|
|
|
1.02
|
|
Volatility
|
84
|
%
|
|
89
|
%
|
|
82
|
%
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Japan
|
$
|
44,186
|
|
|
$
|
50,436
|
|
|
$
|
36,062
|
|
Taiwan
|
5,095
|
|
|
5,909
|
|
|
8,266
|
|
|||
China
|
1,616
|
|
|
765
|
|
|
5,761
|
|
|||
Korea
|
963
|
|
|
942
|
|
|
3,256
|
|
|||
Europe
|
634
|
|
|
611
|
|
|
2,609
|
|
|||
U.S.
|
84
|
|
|
167
|
|
|
3,656
|
|
|||
Other
|
812
|
|
|
687
|
|
|
1,313
|
|
|||
|
$
|
53,390
|
|
|
$
|
59,517
|
|
|
$
|
60,923
|
|
|
Year Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Distributors:
|
|
|
|
|
|
|||
All distributors
|
43
|
%
|
|
48
|
%
|
|
63
|
%
|
Distributor A
|
24
|
%
|
|
31
|
%
|
|
29
|
%
|
End Customers:
1
|
|
|
|
|
|
|||
Top five end customers
|
82
|
%
|
|
83
|
%
|
|
60
|
%
|
End customer A
|
53
|
%
|
|
47
|
%
|
|
22
|
%
|
End customer B
|
8
|
%
|
|
13
|
%
|
|
13
|
%
|
End customer C
|
8
|
%
|
|
8
|
%
|
|
10
|
%
|
|
Quarterly Period Ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
2016
|
|
|
|
|
|
|
|
||||||||
Revenue, net
|
$
|
11,167
|
|
|
$
|
12,580
|
|
|
$
|
13,656
|
|
|
$
|
15,987
|
|
Gross profit
|
3,592
|
|
|
6,415
|
|
|
6,557
|
|
|
8,504
|
|
||||
Income (loss) from operations
|
(8,486
|
)
|
|
(1,336
|
)
|
|
(960
|
)
|
|
436
|
|
||||
Income (loss) before income taxes
|
(8,585
|
)
|
|
(1,443
|
)
|
|
(1,059
|
)
|
|
335
|
|
||||
Net income (loss)
|
(8,642
|
)
|
|
(1,560
|
)
|
|
(1,242
|
)
|
|
337
|
|
||||
Net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
(0.31
|
)
|
|
(0.06
|
)
|
|
(0.04
|
)
|
|
0.01
|
|
||||
Diluted
|
(0.31
|
)
|
|
(0.06
|
)
|
|
(0.04
|
)
|
|
0.01
|
|
||||
2015
|
|
|
|
|
|
|
|
||||||||
Revenue, net
|
$
|
14,392
|
|
|
$
|
15,078
|
|
|
$
|
16,570
|
|
|
$
|
13,477
|
|
Gross profit
|
6,967
|
|
|
7,234
|
|
|
8,278
|
|
|
6,814
|
|
||||
Loss from operations
|
(3,238
|
)
|
|
(2,455
|
)
|
|
(1,201
|
)
|
|
(2,910
|
)
|
||||
Loss before income taxes
|
(3,345
|
)
|
|
(2,560
|
)
|
|
(1,306
|
)
|
|
(3,039
|
)
|
||||
Net loss
|
(3,364
|
)
|
|
(2,796
|
)
|
|
(1,243
|
)
|
|
(3,167
|
)
|
||||
Net loss per share - basic and diluted
|
(0.14
|
)
|
|
(0.12
|
)
|
|
(0.05
|
)
|
|
(0.11
|
)
|
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 by First and Second Amendments thereto (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).
|
|
|
10.1
|
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). +
|
|
|
10.2
|
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). +
|
|
|
10.3
|
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). +
|
|
|
10.4
|
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, 2012). +
|
|
|
10.5
|
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). +
|
|
|
10.6
|
Pixelworks, Inc. Amended and Restated 2006 Stock Incentive Plan, Terms and Conditions of Option Grants (incorporated by reference to Exhibit 10.9 to the Company's Annual Report on Form 10-K filed March 8, 2012). +
|
|
|
10.7
|
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). +
|
|
|
10.8
|
Pixelworks, Inc. Amended and Restated 2006 Stock Incentive Plan, Terms and Conditions of Restricted Stock Unit Award. (incorporated by reference to Exhibit 10.8 to the Company’s Annual Report on Form 10-K filed on March 4, 2015).+
|
|
|
10.9
|
Summary of Pixelworks Non-Employee Director Compensation. (incorporated by reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-K filed on March 4, 2015). +
|
|
|
10.10
|
2012 Executive Employment Agreement dated and effective November 2, 2012, by and between Bruce Walicek and Pixelworks, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 6, 2012).+
|
|
|
10.11
|
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). +
|
|
|
10.12
|
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). +
|
|
|
10.13
|
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). +
|
|
|
10.14
|
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). +
|
|
|
10.15
|
Employment Agreement with Stephen Domenik dated February 1, 2016 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 2, 2016). +
|
|
|
10.16
|
Offer Letter with Todd A. DeBonis dated December 9, 2015 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 2, 2016). +
|
|
|
10.17
|
Separation and Consulting Agreement with Bruce Walicek dated February 1, 2016 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on February 2, 2016). +
|
|
|
10.18
|
Change of Control Severance Agreement effective January 4, 2016, by and between Pixelworks, Inc. and Todd A. DeBonis. +
|
|
|
10.19
|
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).
|
|
|
10.20
|
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).
|
|
|
10.21
|
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).
|
|
|
10.22
|
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).
|
|
|
10.23
|
First Amendment to Office Lease Agreement, dated April 16, 2013, by and between CA-The Concourse Limited Partnership and Pixelworks, Inc. (incorporated by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K filed on March 4, 2015).
|
|
|
10.24
|
First Amendment to Lease, dated July 1, 2013, by and between Durham Plaza, LLC and Pixelworks, Inc. (incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K filed on March 4, 2015).
|
|
|
10.25
|
Second Amendment to Lease, dated May 18, 2016, by and between Kalberer Company and Pixelworks, Inc.
|
|
|
10.26
|
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 9, 2011).
|
|
|
10.27
|
Amendment No. 1 dated December 14, 2012 to the Loan and Security Agreement dated December 21, 2010, by and between Silicon Valley Bank and Pixelworks, Inc. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed December 20, 2012).
|
|
|
10.28
|
Amendment No. 2 dated December 4, 2013 to the Loan and Security Agreement dated December 21, 2010, by and between Silicon Valley Bank and Pixelworks, Inc. (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed December 9, 2013).
|
|
|
10.29
|
Amendment No. 3 dated December 18, 2015 to the Loan and Security Agreement dated December 21, 2010, by and between Silicon Valley Bank and Pixelworks, Inc. (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed December 22, 2015).
|
|
|
10.30
|
Amendment No. 4 dated December 15, 2016 to the Loan and Security Agreement dated December 21, 2010, by and between Silicon Valley Bank and Pixelworks, Inc. (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed December 19, 2016).
|
|
|
10.31
|
Form of Addendum to Change of Control Agreement for Officers (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on May 23, 2014). +
|
|
|
10.32
|
Advisory Agreement between Pixelworks, Inc. and David J. Tupman dated July 30, 2012 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 4, 2014).
|
|
|
21
|
Subsidiaries of Pixelworks, Inc. (incorporated by reference to Exhibit 21 to the Company's Annual Report on Form 10-K filed March 5, 2014).
|
|
|
23
|
Consent of KPMG LLP.
|
|
|
24.1
|
Power of Attorney (see page 74 of this Form 10-K).
|
|
|
+
|
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 8, 2017
|
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 8, 2017
|
|
|
|
||
/s/ Steven L. Moore
|
|
Vice President, Chief Financial Officer, Secretary and Treasurer (Principal Accounting and Financial Officer)
|
|
|
Steven L. Moore
|
|
|
|
March 8, 2017
|
|
|
|
||
/s/ Richard L. Sanquini
|
|
Chairman of the Board
|
|
|
Richard L. Sanquini
|
|
|
|
March 8, 2017
|
|
|
|
||
/s/ C. Scott Gibson
|
|
Director
|
|
|
C. Scott Gibson
|
|
|
|
March 8, 2017
|
|
|
|
||
/s/ Daniel J. Heneghan
|
|
Director
|
|
|
Daniel J. Heneghan
|
|
|
|
March 8, 2017
|
|
|
|
||
/s/ David J. Tupman
|
|
Director
|
|
|
David J. Tupman
|
|
|
|
March 8, 2017
|
|
|
Exhibit
Number
|
Description
|
|
|
3.1
|
Sixth Amended and Restated Articles of Incorporation of Pixelworks, Inc., As Amended by First and Second Amendments thereto (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).
|
|
|
10.1
|
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). +
|
|
|
10.2
|
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). +
|
|
|
10.3
|
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). +
|
|
|
10.4
|
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, 2012). +
|
|
|
10.5
|
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). +
|
|
|
10.6
|
Pixelworks, Inc. Amended and Restated 2006 Stock Incentive Plan, Terms and Conditions of Option Grants (incorporated by reference to Exhibit 10.9 to the Company's Annual Report on Form 10-K filed March 8, 2012). +
|
|
|
10.7
|
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). +
|
|
|
10.8
|
Pixelworks, Inc. Amended and Restated 2006 Stock Incentive Plan, Terms and Conditions of Restricted Stock Unit Award. (incorporated by reference to Exhibit 10.8 to the Company’s Annual Report on Form 10-K filed on March 4, 2015).+
|
|
|
10.9
|
Summary of Pixelworks Non-Employee Director Compensation. (incorporated by reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-K filed on March 4, 2015). +
|
|
|
10.10
|
2012 Executive Employment Agreement dated and effective November 2, 2012, by and between Bruce Walicek and Pixelworks, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 6, 2012). +
|
|
|
10.11
|
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). +
|
|
|
10.12
|
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). +
|
|
|
10.13
|
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). +
|
|
|
10.14
|
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). +
|
|
|
10.15
|
Employment Agreement with Stephen Domenik dated February 1, 2016 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 2, 2016). +
|
|
|
10.16
|
Offer Letter with Todd A. DeBonis dated December 9, 2015 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 2, 2016). +
|
|
|
10.17
|
Separation and Consulting Agreement with Bruce Walicek dated February 1, 2016 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on February 2, 2016). +
|
|
|
10.18
|
Change of Control Severance Agreement effective January 4, 2016, by and between Pixelworks, Inc. and Todd A. DeBonis. +
|
|
|
10.19
|
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).
|
|
|
10.20
|
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).
|
|
|
10.21
|
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).
|
|
|
10.22
|
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).
|
|
|
10.23
|
First Amendment to Office Lease Agreement, dated April 16, 2013, by and between CA-The Concourse Limited Partnership and Pixelworks, Inc. (incorporated by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K filed on March 4, 2015).
|
|
|
10.24
|
First Amendment to Lease, dated July 1, 2013, by and between Durham Plaza, LLC and Pixelworks, Inc. (incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K filed on March 4, 2015).
|
|
|
10.25
|
Second Amendment to Lease, dated May 18, 2016, by and between Kalberer Company and Pixelworks, Inc.
|
|
|
10.26
|
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 9, 2011).
|
+
|
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.
|
|
Executive
Todd DeBonis
|
|
By:
|
/s/ Steven Moore
|
|
/s/ Todd A. DeBonis
|
For:
|
Bruce Walicek, CEO
|
|
|
1.
|
As-Is.
Tenant accepts the Premises in as-is condition with the following work provided by the Landlord:
|
a.
|
Professionally shampoo the carpets and touch up paint within the Premises.
|
b.
|
Repair light fixtures in the kitchen.
|
c.
|
Replace all malfunctioning soffit light fixtures within the Premises.
|
2.
|
Section I, Term of Lease: This Section is hereby amended such that the current term of the Lease will continue through December 31, 2019, regardless of when the actual Commencement Date occurred. The definition of the term “Expiration Date” shall hereby mean and refer to December 31, 2019.
|
3.
|
Section K, Base Rent Adjustment: Effective January 1, 2017, Section 1.1(K) of the Lease is hereby deleted and replaced with the following:
|
4.
|
Section L, Base Year: The base year of the Lease is modified as follows:
|
5.
|
Section O, Security Deposit:
|
6.
|
Extension Option: Tenant shall have one (1) option to extend the lease for a three (3) year period. The rental rate for the option period shall be at fair market rates. Tenant shall notify Landlord of its intention to extend the lease no later than six (6) months prior to the end of the then-current lease term. All other terms and conditions in Section 5 of the First Amendment to Lease, dated July 1, 2013 will remain in effect.
|
LANDLORD
|
|
TENANT
|
Kalberer Company
|
|
Pixelworks, Inc.
|
By: /s/ Patrick Gortmaker
|
|
By: /s/ Steven Moore
|
Its: President
|
|
Its: VP & CFO
|
Date: May 18, 2016
|
|
Date: May 18, 2016
|
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 8, 2017
|
By:
|
|
/s/ Todd A. DeBonis
|
|
|
|
|
Todd A. DeBonis
|
|
|
|
|
President and Chief Executive Officer
(Principal 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;
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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:
|
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.
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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;
|
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
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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.
|
Date:
|
March 8, 2017
|
By:
|
|
/s/ Steven L. Moore
|
|
|
|
|
Steven L. Moore
|
|
|
|
|
Vice President, Chief Financial Officer,
Secretary and Treasurer (Principal Financial Officer)
|
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/ Todd A. DeBonis
|
|
|
Todd A. DeBonis
|
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
Date:
|
|
March 8, 2017
|
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 (Principal Financial Officer)
|
|
|
|
Date:
|
|
March 8, 2017
|