x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
OREGON
|
|
91-1761992
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
226 Airport Parkway, Suite 595
San Jose, California
|
|
95110
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
|
¨
|
|
Accelerated filer
|
x
|
Non-accelerated filer
|
¨
|
|
Smaller reporting company
|
x
|
Emerging growth company
|
¨
|
|
|
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock
|
PXLW
|
The Nasdaq Global Market
|
|
|
|
|
|
|
Item 1.
|
||
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
|
|
|
|
|
Item 4.
|
||
|
|
|
|
|
|
|
|
|
Item 1A.
|
||
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|
|
Item 6.
|
||
|
|
|
|
Item 1.
|
Financial Statements.
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
17,346
|
|
|
$
|
17,944
|
|
Short-term marketable securities
|
6,566
|
|
|
6,069
|
|
||
Accounts receivable, net
|
5,853
|
|
|
6,982
|
|
||
Inventories
|
3,018
|
|
|
2,954
|
|
||
Prepaid expenses and other current assets
|
2,828
|
|
|
1,494
|
|
||
Total current assets
|
35,611
|
|
|
35,443
|
|
||
Property and equipment, net
|
5,409
|
|
|
6,151
|
|
||
Operating lease right of use assets
|
5,658
|
|
|
—
|
|
||
Other assets, net
|
1,700
|
|
|
1,132
|
|
||
Acquired intangible assets, net
|
3,826
|
|
|
4,208
|
|
||
Goodwill
|
18,407
|
|
|
18,407
|
|
||
Total assets
|
$
|
70,611
|
|
|
$
|
65,341
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
2,647
|
|
|
$
|
2,116
|
|
Accrued liabilities and current portion of long-term liabilities
|
13,780
|
|
|
14,823
|
|
||
Current portion of income taxes payable
|
440
|
|
|
263
|
|
||
Total current liabilities
|
16,867
|
|
|
17,202
|
|
||
Long-term liabilities, net of current portion
|
700
|
|
|
1,017
|
|
||
Operating lease liabilities, net of current portion
|
3,900
|
|
|
—
|
|
||
Income taxes payable, net of current portion
|
2,342
|
|
|
2,299
|
|
||
Total liabilities
|
23,809
|
|
|
20,518
|
|
||
Commitments and contingencies (Note 14)
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock
|
—
|
|
|
—
|
|
||
Common stock
|
430,907
|
|
|
428,903
|
|
||
Accumulated other comprehensive income
|
19
|
|
|
15
|
|
||
Accumulated deficit
|
(384,124
|
)
|
|
(384,095
|
)
|
||
Total shareholders’ equity
|
46,802
|
|
|
44,823
|
|
||
Total liabilities and shareholders’ equity
|
$
|
70,611
|
|
|
$
|
65,341
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Revenue, net
|
$
|
16,648
|
|
|
$
|
15,292
|
|
Cost of revenue (1)
|
8,176
|
|
|
7,490
|
|
||
Gross profit
|
8,472
|
|
|
7,802
|
|
||
Operating expenses:
|
|
|
|
||||
Research and development (2)
|
6,472
|
|
|
4,463
|
|
||
Selling, general and administrative (3)
|
5,460
|
|
|
4,614
|
|
||
Restructuring
|
—
|
|
|
19
|
|
||
Total operating expenses
|
11,932
|
|
|
9,096
|
|
||
Loss from operations
|
(3,460
|
)
|
|
(1,294
|
)
|
||
Gain on sale of patents
|
3,905
|
|
|
—
|
|
||
Interest income (expense) and other, net (4)
|
(66
|
)
|
|
972
|
|
||
Total other income, net
|
3,839
|
|
|
972
|
|
||
Income (loss) before income taxes
|
379
|
|
|
(322
|
)
|
||
Provision for income taxes
|
408
|
|
|
276
|
|
||
Net loss
|
$
|
(29
|
)
|
|
$
|
(598
|
)
|
Net loss per share - basic and diluted
|
$
|
(0.00
|
)
|
|
$
|
(0.02
|
)
|
Weighted average shares outstanding - basic and diluted
|
37,247
|
|
|
35,183
|
|
||
|
|
|
|
||||
(1) Includes:
|
|
|
|
||||
Amortization of acquired intangible assets
|
298
|
|
|
298
|
|
||
Stock-based compensation
|
95
|
|
|
66
|
|
||
Inventory step-up and backlog amortization
|
12
|
|
|
122
|
|
||
(2) Includes stock-based compensation
|
661
|
|
|
595
|
|
||
(3) Includes:
|
|
|
|
||||
Stock-based compensation
|
933
|
|
|
539
|
|
||
Amortization of acquired intangible assets
|
84
|
|
|
101
|
|
||
(4) Includes:
|
|
|
|
||||
Gain on debt extinguishment
|
—
|
|
|
(1,272
|
)
|
||
Discount accretion on convertible debt fair value
|
—
|
|
|
69
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net loss
|
$
|
(29
|
)
|
|
$
|
(598
|
)
|
Other comprehensive loss:
|
|
|
|
||||
Unrealized gain on available-for-sale securities
|
4
|
|
|
—
|
|
||
Total comprehensive loss
|
$
|
(25
|
)
|
|
$
|
(598
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(29
|
)
|
|
$
|
(598
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Gain on sale of patents
|
(3,905
|
)
|
|
—
|
|
||
Stock-based compensation
|
1,689
|
|
|
1,200
|
|
||
Depreciation and amortization
|
913
|
|
|
826
|
|
||
Amortization of acquired intangible assets
|
382
|
|
|
399
|
|
||
Reversal of uncertain tax positions
|
(31
|
)
|
|
—
|
|
||
Accretion on short-term marketable securities
|
(24
|
)
|
|
—
|
|
||
Inventory step-up and backlog amortization
|
12
|
|
|
122
|
|
||
Gain on debt extinguishment
|
—
|
|
|
(1,272
|
)
|
||
Discount accretion on convertible debt fair value
|
—
|
|
|
69
|
|
||
Changes in operating assets and liabilities, net of acquisition:
|
|
|
|
||||
Accounts receivable, net
|
1,129
|
|
|
189
|
|
||
Inventories
|
(76
|
)
|
|
135
|
|
||
Prepaid expenses and other current and long-term assets, net
|
(666
|
)
|
|
(2,378
|
)
|
||
Accounts payable
|
519
|
|
|
725
|
|
||
Accrued current and long-term liabilities
|
(2,198
|
)
|
|
(3,828
|
)
|
||
Income taxes payable
|
251
|
|
|
(19
|
)
|
||
Net cash used in operating activities
|
(2,034
|
)
|
|
(4,430
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Proceeds from sale of patents
|
4,250
|
|
|
—
|
|
||
Purchases of short-term marketable securities
|
(3,417
|
)
|
|
—
|
|
||
Proceeds from maturities of short-term marketable securities
|
2,950
|
|
|
—
|
|
||
Purchases of property and equipment
|
(1,655
|
)
|
|
(150
|
)
|
||
Purchases of licensed technology
|
(521
|
)
|
|
—
|
|
||
Payment associated with sale of patents
|
(345
|
)
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
1,262
|
|
|
(150
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of common stock under employee equity incentive plans
|
315
|
|
|
233
|
|
||
Payments on asset financings
|
(141
|
)
|
|
(345
|
)
|
||
Payments on convertible debt
|
—
|
|
|
(2,220
|
)
|
||
Net cash provided by (used in) financing activities
|
174
|
|
|
(2,332
|
)
|
||
Net decrease in cash and cash equivalents
|
(598
|
)
|
|
(6,912
|
)
|
||
Cash and cash equivalents, beginning of period
|
17,944
|
|
|
27,523
|
|
||
Cash and cash equivalents, end of period
|
$
|
17,346
|
|
|
$
|
20,611
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid for income taxes, net of refunds received
|
$
|
192
|
|
|
$
|
294
|
|
Cash paid during the period for interest
|
29
|
|
|
256
|
|
||
Non-cash investing and financing activities:
|
|
|
|
||||
Value of debt converted into shares
|
$
|
—
|
|
|
$
|
2,644
|
|
|
Common Stock
|
|
Accumulated
Other
Comprehensive
Income
|
|
Accumulated
Deficit
|
|
Total
Shareholders'
Equity
|
|||||||||||
2019
|
Shares
|
|
Amount
|
|
||||||||||||||
Balance as of December 31, 2018
|
36,937,458
|
|
|
$
|
428,903
|
|
|
$
|
15
|
|
|
$
|
(384,095
|
)
|
|
$
|
44,823
|
|
Stock issued under employee equity incentive plans
|
605,911
|
|
|
315
|
|
|
—
|
|
|
—
|
|
|
315
|
|
||||
Stock-based compensation expense
|
—
|
|
|
1,689
|
|
|
—
|
|
|
—
|
|
|
1,689
|
|
||||
Unrealized gain on available for sale securities
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
|
(29
|
)
|
||||
Balance as of March 31, 2019
|
37,543,369
|
|
|
$
|
430,907
|
|
|
$
|
19
|
|
|
$
|
(384,124
|
)
|
|
$
|
46,802
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2018
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance as of December 31, 2017
|
34,651,087
|
|
|
$
|
418,891
|
|
|
$
|
20
|
|
|
$
|
(379,474
|
)
|
|
$
|
39,437
|
|
Stock issued under employee equity incentive plans
|
495,686
|
|
|
233
|
|
|
—
|
|
|
—
|
|
|
233
|
|
||||
Stock-based compensation expense
|
—
|
|
|
1,200
|
|
|
—
|
|
|
—
|
|
|
1,200
|
|
||||
Debt conversion
|
435,353
|
|
|
2,644
|
|
|
—
|
|
|
—
|
|
|
2,644
|
|
||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(598
|
)
|
|
(598
|
)
|
||||
Balance as of March 31, 2018
|
35,582,126
|
|
|
$
|
422,968
|
|
|
$
|
20
|
|
|
$
|
(380,072
|
)
|
|
$
|
42,916
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Accounts receivable, gross
|
$
|
5,891
|
|
|
$
|
7,003
|
|
Less: allowance for doubtful accounts
|
(38
|
)
|
|
(21
|
)
|
||
Accounts receivable, net
|
$
|
5,853
|
|
|
$
|
6,982
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Balance at beginning of period
|
$
|
21
|
|
|
$
|
47
|
|
Additions charged (reductions credited)
|
17
|
|
|
(2
|
)
|
||
Balance at end of period
|
$
|
38
|
|
|
$
|
45
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Finished goods
|
$
|
1,578
|
|
|
$
|
1,577
|
|
Work-in-process
|
1,440
|
|
|
1,377
|
|
||
Inventories
|
$
|
3,018
|
|
|
$
|
2,954
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Gross carrying amount
|
$
|
23,019
|
|
|
$
|
22,882
|
|
Less: accumulated depreciation and amortization
|
(17,610
|
)
|
|
(16,731
|
)
|
||
Property and equipment, net
|
$
|
5,409
|
|
|
$
|
6,151
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Developed technology
|
$
|
5,050
|
|
|
$
|
5,050
|
|
Customer relationships
|
1,270
|
|
|
1,270
|
|
||
Backlog and tradename
|
410
|
|
|
410
|
|
||
|
6,730
|
|
|
6,730
|
|
||
Less: accumulated amortization
|
(2,904
|
)
|
|
(2,522
|
)
|
||
Acquired intangible assets, net
|
$
|
3,826
|
|
|
$
|
4,208
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Accrued interest payable
|
$
|
3,205
|
|
|
$
|
3,079
|
|
Accrued payroll and related liabilities
|
2,809
|
|
|
4,428
|
|
||
Accrued royalties
|
2,757
|
|
|
2,791
|
|
||
Operating lease liabilities, current
|
2,213
|
|
|
—
|
|
||
Current portion of accrued liabilities for asset financings
|
607
|
|
|
748
|
|
||
Deferred revenue
|
186
|
|
|
96
|
|
||
Liability for warranty returns
|
13
|
|
|
13
|
|
||
Accrued costs related to restructuring
|
—
|
|
|
200
|
|
||
Other
|
1,990
|
|
|
3,468
|
|
||
Accrued liabilities and current portion of long-term liabilities
|
$
|
13,780
|
|
|
$
|
14,823
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Deferred revenue:
|
|
|
|
||||
Balance at beginning of period
|
$
|
96
|
|
|
$
|
418
|
|
Revenue deferred
|
275
|
|
|
270
|
|
||
Revenue recognized
|
(185
|
)
|
|
(346
|
)
|
||
Balance at end of period
|
$
|
186
|
|
|
$
|
342
|
|
Liability for warranty returns:
|
|
|
|
||||
Balance at beginning of period
|
$
|
13
|
|
|
$
|
17
|
|
Charge-offs
|
—
|
|
|
(4
|
)
|
||
Provision
|
—
|
|
|
2
|
|
||
Balance at end of period
|
$
|
13
|
|
|
$
|
15
|
|
|
Cost
|
|
Unrealized Gain (Loss)
|
|
Fair Value
|
||||||
Short-term marketable securities:
|
|
|
|
|
|
||||||
As of March 31, 2019:
|
|
|
|
|
|
||||||
Corporate debt securities
|
$
|
2,740
|
|
|
$
|
3
|
|
|
$
|
2,743
|
|
Commercial paper
|
1,983
|
|
|
—
|
|
|
1,983
|
|
|||
U.S. government treasury bills
|
1,839
|
|
|
1
|
|
|
1,840
|
|
|||
|
$
|
6,562
|
|
|
$
|
4
|
|
|
$
|
6,566
|
|
|
|
|
|
|
|
||||||
As of December 31, 2018:
|
|
|
|
|
|
||||||
Corporate debt securities
|
$
|
3,238
|
|
|
$
|
(2
|
)
|
|
$
|
3,236
|
|
Commercial paper
|
992
|
|
|
—
|
|
|
992
|
|
|||
U.S. government treasury bills
|
1,841
|
|
|
—
|
|
|
1,841
|
|
|||
|
$
|
6,071
|
|
|
$
|
(2
|
)
|
|
$
|
6,069
|
|
Level 1:
|
Valuations based on quoted prices in active markets for identical assets and liabilities.
|
Level 2:
|
Valuations based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
|
Level 3:
|
Valuations based on unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions.
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
As of March 31, 2019:
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
9,038
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,038
|
|
Short-term marketable securities:
|
|
|
|
|
|
|
|
||||||||
U.S. government treasury bills
|
1,840
|
|
|
—
|
|
|
—
|
|
|
1,840
|
|
||||
Corporate debt securities
|
—
|
|
|
2,743
|
|
|
—
|
|
|
2,743
|
|
||||
Commercial paper
|
—
|
|
|
1,983
|
|
|
—
|
|
|
1,983
|
|
||||
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2018:
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|||||
Money market funds
|
$
|
13,388
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,388
|
|
Commercial paper
|
—
|
|
|
250
|
|
|
—
|
|
|
250
|
|
||||
Corporate debt securities
|
—
|
|
|
249
|
|
|
—
|
|
|
249
|
|
||||
Short-term marketable securities:
|
|
|
|
|
|
|
|
||||||||
U.S. government treasury bills
|
1,841
|
|
|
—
|
|
|
—
|
|
|
1,841
|
|
||||
Corporate debt securities
|
—
|
|
|
3,236
|
|
|
—
|
|
|
3,236
|
|
||||
Commercial paper
|
—
|
|
|
992
|
|
|
—
|
|
|
992
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Operating expenses — restructuring:
|
|
|
|
||||
Employee severance and benefits
|
$
|
—
|
|
|
$
|
19
|
|
Total restructuring expense
|
$
|
—
|
|
|
$
|
19
|
|
|
Balance as of December 31, 2018
|
|
Adjustment
|
|
Balance as of
March 31, 2019
|
||||||
Facility closure and consolidations
|
$
|
360
|
|
|
$
|
(360
|
)
|
|
$
|
—
|
|
Accrued costs related to restructuring
|
$
|
360
|
|
|
$
|
(360
|
)
|
|
$
|
—
|
|
|
Three Months Ended
|
|
|
March 31, 2019
|
|
Operating lease cost:
|
629
|
|
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
Operating cash flows from operating leases
|
674
|
|
Weighted average remaining lease term (in years):
|
3.71
|
|
Weighted average discount rate:
|
5.75
|
%
|
Operating Lease Payments
|
|
||
Nine months ending December 31, 2019
|
$
|
1,847
|
|
Years ending December 31:
|
|
||
2020
|
1,878
|
|
|
2021
|
1,215
|
|
|
2022
|
756
|
|
|
2023
|
624
|
|
|
Thereafter
|
513
|
|
|
Total operating lease payments
|
6,833
|
|
|
Less imputed interest
|
(720
|
)
|
|
Total operating lease liabilities
|
$
|
6,113
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
IC sales
|
$
|
15,074
|
|
|
$
|
14,556
|
|
Engineering services, license and other
|
1,574
|
|
|
736
|
|
||
Total revenues
|
$
|
16,648
|
|
|
$
|
15,292
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Interest expense
|
$
|
(166
|
)
|
|
$
|
(288
|
)
|
Interest income
|
100
|
|
|
57
|
|
||
Gain on debt extinguishment
|
—
|
|
|
1,272
|
|
||
Discount accretion on convertible debt fair value
|
—
|
|
|
(69
|
)
|
||
Total interest income (expense) and other, net
|
$
|
(66
|
)
|
|
$
|
972
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net loss
|
$
|
(29
|
)
|
|
$
|
(598
|
)
|
Weighted average shares outstanding - basic and diluted
|
37,247
|
|
|
35,183
|
|
||
Net loss per share - basic and diluted
|
$
|
(0.00
|
)
|
|
$
|
(0.02
|
)
|
|
Three Months Ended
|
||||
|
March 31,
|
||||
|
2019
|
|
2018
|
||
Employee equity incentive plans
|
3,265
|
|
|
3,423
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Japan
|
$
|
13,461
|
|
|
$
|
13,344
|
|
China
|
1,862
|
|
|
927
|
|
||
United States
|
714
|
|
|
590
|
|
||
Taiwan
|
518
|
|
|
170
|
|
||
Korea
|
60
|
|
|
211
|
|
||
Europe
|
33
|
|
|
50
|
|
||
|
$
|
16,648
|
|
|
$
|
15,292
|
|
|
Three Months Ended
|
||||
|
March 31,
|
||||
|
2019
|
|
2018
|
||
Distributors:
|
|
|
|
||
All distributors
|
27
|
%
|
|
37
|
%
|
Distributor A
|
22
|
%
|
|
22
|
%
|
End customers:
1
|
|
|
|
||
Top five end customers
|
82
|
%
|
|
80
|
%
|
End customer A
|
56
|
%
|
|
53
|
%
|
End customer B
|
16
|
%
|
|
7
|
%
|
1
|
End customers include customers who purchase directly from us, as well as customers who purchase our products indirectly through distributors.
|
|
March 31,
2019 |
|
December 31,
2018 |
||
Account X
|
52
|
%
|
|
34
|
%
|
Account Y
|
23
|
%
|
|
54
|
%
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
Three Months Ended
|
|||||||||||||
|
March 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
Revenue, net
|
$
|
16,648
|
|
|
$
|
15,292
|
|
|
$
|
1,356
|
|
|
9
|
%
|
|
Three Months Ended March 31,
|
||||||||||||
|
2019
|
|
% of
revenue
|
|
2018
|
|
% of
revenue
|
||||||
Direct product costs and related overhead
1
|
$
|
7,794
|
|
|
47
|
%
|
|
$
|
7,016
|
|
|
46
|
%
|
Amortization of acquired intangible assets
|
298
|
|
|
2
|
|
|
298
|
|
|
2
|
|
||
Stock-based compensation
|
95
|
|
|
1
|
|
|
66
|
|
|
0
|
|
||
Inventory step-up and backlog amortization
|
12
|
|
|
0
|
|
|
122
|
|
|
1
|
|
||
Inventory charges
2
|
(23
|
)
|
|
0
|
|
|
(12
|
)
|
|
0
|
|
||
Total cost of revenue
|
$
|
8,176
|
|
|
49
|
%
|
|
$
|
7,490
|
|
|
49
|
%
|
Gross profit
|
$
|
8,472
|
|
|
51
|
%
|
|
$
|
7,802
|
|
|
51
|
%
|
1
|
Includes purchased materials, assembly, test, labor, employee benefits and royalties.
|
2
|
Includes charges to reduce inventory to lower of cost or market and a benefit for sales of previously written down inventory.
|
|
Three Months Ended
|
|||||||||||||
|
March 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
Research and development
|
$
|
6,472
|
|
|
$
|
4,463
|
|
|
$
|
2,009
|
|
|
45
|
%
|
|
Three Months Ended
|
|||||||||||||
|
March 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
Selling, general and administrative
|
$
|
5,460
|
|
|
$
|
4,614
|
|
|
$
|
846
|
|
|
18
|
%
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Employee severance and benefits
|
$
|
—
|
|
|
$
|
19
|
|
Total restructuring expense
|
$
|
—
|
|
|
$
|
19
|
|
|
|
|
|
||||
Included in operating expenses
|
$
|
—
|
|
|
$
|
19
|
|
|
Payments Due By Period
|
||||||||||||||||||
Contractual Obligation
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
||||||||||
Estimated purchase commitments to contract manufacturers
|
$
|
7,107
|
|
|
$
|
7,107
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating leases
|
6,833
|
|
|
2,511
|
|
|
2,728
|
|
|
1,240
|
|
|
354
|
|
|||||
Other purchase obligations and commitments
|
1,310
|
|
|
262
|
|
|
524
|
|
|
524
|
|
|
—
|
|
|||||
Payments on accrued balances related to asset financings
|
832
|
|
|
659
|
|
|
173
|
|
|
—
|
|
|
—
|
|
|||||
Total
1
|
$
|
16,082
|
|
|
$
|
10,539
|
|
|
$
|
3,425
|
|
|
$
|
1,764
|
|
|
$
|
354
|
|
1
|
We are unable to reliably estimate the timing of future payments related to uncertain tax positions and repatriation of foreign earnings; therefore, $2.3 million of income taxes payable has been excluded from the table above.
|
Item 4.
|
Controls and Procedures.
|
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 China, 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 China 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;
|
•
|
Failure to realize the anticipated benefits of the acquisition of ViXS;
|
•
|
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 6.
|
Exhibits.
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1*
|
|
|
|
|
|
32.2*
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Exhibits 32.1 and 32.2 are being furnished and shall not be deemed to be "filed" for under the Securities Act of 1933, as amended (the “Securities Act”) or 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 or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language contained in such filing, except to the extent specifically stated in such filing.
|
|
|
PIXELWORKS, INC.
|
|
|
|
Dated:
|
May 10, 2019
|
/s/ Steven L. Moore
|
|
|
Steven L. Moore
Vice President, Chief Financial Officer,
Secretary and Treasurer
(Duly Authorized Officer and Principal Accounting and Principal Financial Officer)
|
1.
|
As-Is.
Tenant accepts the Premises in as-is condition with the following work provided by the Landlord within 30 days of the effective date of the Base Rent Adjustment is Section 3 below, January 1, 2020:
|
a.
|
Professionally shampoo the premises carpet. Landlord will professionally shampoo the premises carpet annually through the Term of the Lease.
|
b.
|
Touch up paint 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, 2024, regardless of when the actual Commencement Date occurred. The definition of the term “Expiration Date” shall hereby mean and refer to December 31, 2024.
|
3.
|
Section K, Base Rent Adjustment: Effective January 1, 2020, 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: January 31, 2019
|
|
Date: January 30, 2019
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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(s) 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
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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
|
5.
|
The registrant's other certifying officer(s) 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:
|
May 10, 2019
|
By:
|
/s/ Todd A. DeBonis
|
|
|
|
Todd A. DeBonis
|
|
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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(s) 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(s) 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:
|
May 10, 2019
|
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:
|
May 10, 2019
|
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:
|
May 10, 2019
|