UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 8-K
______________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of
Report (Date of earliest event Reported): March 4,
2021
MOSYS, INC.
(Exact
Name of Registrant as Specified in Charter)
000-32929
(Commission
File Number)
(Commission File
Number)
Delaware
|
77-0291941
|
(State or
Other
Jurisdiction
of Incorporation)
|
(I.R.S. Employer Identification Number)
|
2309
Bering Dr.
San
Jose, California 95131
(Address of
principal executive offices, with zip code)
(408)
418-7500
(Registrant's
telephone number, including area code)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
|
Trading
Symbol(s)
|
Name of
each exchange on which registered
|
Common
Stock, par value $0.001 per share
|
MOSY
|
The
Nasdaq Stock Market LLC
|
Indicate by check
mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 (17
CFR
§230.405) or
Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR
§240.12b-2).
Emerging growth
company [ ]
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. [ ]
Item
2.02. Results of Operations and Financial Condition.
On
March 4, 2021, MoSys, Inc. (the “Company”) issued a
press release announcing its financial results for the three and
twelve months ended December 31, 2020. A copy of this press release
is furnished as Exhibit 99.1 to this report. The press release
should be read in conjunction with the cautionary language
regarding forward-looking statements, which are included in the
text of the release.
In addition to disclosing financial results
calculated in accordance with U.S. generally accepted accounting
principles (“GAAP”), management also presents
information regarding the Company’s performance over
comparable periods based on operating expenses (research and
development and sales, general and administrative), operating
income (loss), net income (loss) and net income (loss) per share,
exclusive of stock-based compensation, restructuring and impairment
charges and a one-time deemed dividend. Because management
discloses financial measures calculated without taking into account
these items, these financial measures are characterized as
"non-GAAP financial measures" under Securities and Exchange
Commission rules.
Stock-based
compensation charges represent non-cash charges related to equity
awards granted by the Company. Although these are recurring charges
to the Company’s operations, management believes the
measurement of these amounts can vary considerably from period to
period and depend substantially on factors that are not a direct
consequence of operating performance that is within
management’s control. Thus, management believes that
excluding these charges facilitates comparisons of the
Company’s operational performance in different periods, as
well as with similarly determined non-GAAP financial measures of
comparable companies.
The
Company’s non-GAAP financial measures exclude deemed
dividends. In April 2020, the Company completed an offering of
common stock (the “Offering”). As a result of the
Offering, the exercise price of 1,845,540 common stock purchase
warrants issued in a public offering of securities completed in
October 2018 was reduced from $6.00 to $2.40 per share. The Company
accounted for the warrant exercise price adjustment as a deemed
dividend, which increased the net loss attributable to common
stockholders for the twelve months ended December 31,
2020.
The
Company’s non-GAAP financial measures also exclude
restructuring charges related to reductions in workforce and
associated operating expenses to reduce net loss and cash burn and
to realign resources. The Company has incurred restructuring
charges in prior periods and may do so in the future, and such
charges should be considered in evaluating the performance of the
Company and its management. However, management believes that
presenting financial measures that exclude these charges
facilitates comparisons with the Company’s ongoing operating
results as well as those of other companies in its business
sector.
Adjusted EBITDA is
GAAP net income (loss), as reported on the Company’s
consolidated statements of operations, excluding stock-based
compensation, restructuring and impairment charges, interest
expense, depreciation, the provision (benefit) for income taxes and
the one-time deemed dividend.
Management and the
Company’s board of directors will continue to analyze the
historical consolidated results of operations and comprehensive
income (loss) (revenue, research and development expenses, selling,
general and administrative expenses, operating income (loss), net
income (loss) and net income (loss) per share) and adjusted EBITDA
to assess the business and compare operating results to the
Company's performance objectives. For example, the Company's
budgeting and planning process utilizes these non-GAAP financial
measures.
The
Company discloses these non-GAAP financial measures to the public
as an additional means by which investors can assess the Company's
performance and to identify the Company's operating results for
investors on the same basis applied by management. The non-GAAP
financial measures disclosed by the Company should not be
considered a substitute for, or superior to, financial measures
calculated in accordance with GAAP, and the financial results
calculated in accordance with GAAP and reconciliations to those
financial statements should be carefully evaluated. The non-GAAP
financial measures used by the Company may be calculated
differently from, and, therefore, may not be comparable to,
similarly titled measures used by other companies. The Company has
furnished reconciliations of the non-GAAP financial measures to the
most directly comparable GAAP financial measures in the press
release furnished as Exhibit 99.1.
Moreover, although
these non-GAAP financial measures adjust expense, they should not
be viewed as a pro-forma presentation reflecting the elimination of
the underlying share-based compensation programs, which are an
important element of the Company's compensation structure. GAAP
requires that all forms of share-based payments should be valued
and included, as appropriate, in results of operations. Management
believes these expenses are a material part of the Company's
operating results.
The
information contained in this Current Report on Form 8-K and
Exhibit 99.1 hereto shall not be deemed “filed” for
purposes of Section 18 of the Securities and Exchange Act of 1934,
as amended (the “Exchange Act”), or otherwise subject
to the liabilities of that section, nor shall it be deemed
incorporated by reference to any filing under the Securities Act of
1933, as amended, or the Exchange Act, except as expressly set
forth by specific reference in such filing.
Item
8.01. Other Events.
On
March 4, 2021, the Company paid $1,554,173 to the holder of its
senior secured convertible notes due August 15, 2023 (the
“Notes”) and fully paid the outstanding balance of the
Notes.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits.
Press Release by
MoSys, Inc. dated March 4, 2021
SIGNATURE
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
|
MOSYS,
INC.
|
|
|
|
|
|
Date: March 4,
2021
|
By:
|
/s/ James W.
Sullivan
|
|
|
|
James W.
Sullivan
|
|
|
|
Vice President of
Finance and Chief Financial Officer
|
|
MoSys, Inc. Announces Fourth Quarter 2020 Financial
Results
SAN JOSE, Calif., March 4, 2021 – MoSys,
Inc. (NASDAQ: MOSY) (“MoSys” or the
“Company”), a provider of semiconductor solutions that enable fast,
intelligent data access for cloud, networking, security and
communications systems, today announced
financial results
for the fourth quarter and fiscal year ended December 31,
2020.
Fourth Quarter 2020 Financial Results
Total
net revenue for the fourth quarter of 2020 was $1.6 million,
compared with $2.0 million for the previous quarter and $2.3
million for the fourth quarter of 2019. Product revenue for the
fourth quarter of 2020 was $1.4 million, compared with $1.8 million
in the previous quarter and $2.1 million in the year ago period.
The sequential and year-over-year decrease in product revenue
reflected decreased shipments of Bandwidth Engine® and LineSpeed™
products due to customer transitions and delays in customer
programs.
Gross
margin for the fourth quarter of 2020 was 68%, compared with 66%
for the third quarter of 2020 and 59% for the fourth quarter of
2019. The sequential increase in gross margin was primarily
attributable to the increase in royalty revenue, which has no
associated cost.
Total
operating expenses on a GAAP basis for the fourth quarter of 2020
were $2.0 million, compared with operating expenses of $1.9 million
in the previous quarter and $2.0 million in the fourth quarter of
2019. Total non-GAAP operating expenses, excluding stock-based
compensation expenses, for the fourth quarter of 2020 were $2.0
million, compared with $1.9 million in the third quarter of 2020
and $1.9 million in the fourth quarter of 2019. A reconciliation of
GAAP results to non-GAAP results is provided in the financial
statement tables following the text of this press
release.
GAAP
net loss attributable to common stockholders for the fourth quarter
of 2020 was $1.0 million, or $0.29 per share, compared with a net
loss of $0.7 million, or $0.20 per share, for the previous quarter,
and a net loss of $0.7 million, or $0.31 per share, for the fourth
quarter of 2019.
Non-GAAP
net loss for the fourth quarter of 2020 was $1.0 million, or $0.27
per share, compared with a net loss of $0.6 million, or $0.18 per
share, in the prior quarter and a net loss of $0.6 million, or
$0.29 per share, for the fourth quarter of 2019. Adjusted EBITDA
for the fourth quarter of 2020 was a negative $0.9 million,
compared with a negative $0.5 million in the previous quarter and a
negative $0.5 million for the fourth quarter of 2019.
At
March 4, 2021, the Company had cash and investments of
approximately $11.6 million. In March 2021, the Company fully paid
the outstanding balance of its convertible notes
payable.
Management Commentary
“2020
proved to be a challenging environment with the COVID-19 pandemic
contributing to delayed customer programs, as well as constraints
in both sales and the supply chain,” stated Dan Lewis,
MoSys’ President and CEO. “Despite customer product
transitions and inventory reductions, as well as production delays
on new programs, we continued to execute on our business plan and
made significant progress on multiple fronts. We broadened our
product offerings, announcing the availability of our Graph Memory
Engine (GME) search accelerator IP for Intel and Xilinx FPGAs and
introduced our quad-partition rate (QPR) memory devices. In
addition, we added new sales channels through Arrow Electronics and
DigiKey Electronics for our Accelerator Engine and LineSpeed IC
products and have already seen new design win opportunities result
from these relationships.
“While
still early in the new year, we have significantly improved our
financial position through an offering of common stock in February
2021 combined with the exercise of common stock warrants. The net
cash contribution from these activities was $9.3 million, and we
used $3 million of these proceeds to fully pay our outstanding
convertible notes and become debt free, other than a PPP
loan.
“Going
forward, our product development efforts remain focused on
expanding our Virtual Accelerator Engine (VAE) IP product offerings
and supporting application-specific design win proposals with our
FPGA, cloud network accelerator and server appliance partners. We
expanded the sales pipeline for our VAE technology during the
fourth quarter and expect to sign an initial production license
with a lead IC customer in the first half of 2021. We also intend
to make additional investment in our VAE development and partner
activities to accelerate time-to-market and increase our
competitiveness and ability to support partner applications and
related design-win opportunities.”
Mr.
Lewis concluded, “To date, our operations team has
successfully managed increased lead times and minimized the impact
from industry shortages. We will continue to closely monitor
industry developments and manage our inventory accordingly. We have
begun fulfilling initial production orders of Bandwidth Engine to
our new application delivery customer, and we expect this new
demand, combined with increased demand from a major networking
customer, will drive a return to IC revenue growth beginning in the
second quarter.”
Business Outlook
The
Company expects total net revenue for the first quarter of 2021 to
be in the range of $1.4 million to $1.6 million.
Use of Non-GAAP Financial Measures
To supplement MoSys’ consolidated financial statements
presented in accordance with GAAP, MoSys uses non-GAAP financial
measures that exclude from the statement of operations the effects
of stock-based compensation, impairment of
goodwill and deemed dividends.
MoSys’ management believes that the presentation of these
non-GAAP financial measures is useful to investors and other
interested persons because they are one of the primary indicators
that MoSys’ management uses for planning and forecasting
future performance. The press release also makes reference to and
reconciles GAAP net income (loss) attributable to common
stockholders and adjusted EBITDA, which the Company defines as GAAP
net income (loss) before interest expense, income tax provision,
and depreciation and amortization, as well as stock-based
compensation, restructuring and impairment charges and a one-time
deemed dividend. Management believes that the presentation of
non-GAAP financial measures that exclude these items is useful to
investors because management does not consider these charges part
of the day-to-day business or reflective of the core operational
activities of the Company that are within the control of management
or that would be used to evaluate management’s operating
performance.
Investors are encouraged to review the reconciliations of these
non-GAAP financial measures to the comparable GAAP results, which
are provided in tables below the Condensed Consolidated Statements
of Operations. The non-GAAP financial measures disclosed by the
Company should not be considered a substitute for, or superior to,
financial measures calculated in accordance with GAAP, and the
financial results calculated in accordance with GAAP and
reconciliations to those financial statements should be carefully
evaluated. The non-GAAP financial measures used by the Company may
be calculated differently from, and therefore may not be comparable
to, similarly titled measures used by other companies. For
additional information regarding these non-GAAP financial measures,
and management’s explanation of why it considers such
measures to be useful, refer to the Current Report on Form 8-K
dated March 4, 2021 that the Company filed with the Securities and
Exchange Commission.
Forward-Looking Statements
This press release may contain forward-looking statements about the
Company, including, without limitation, the Company’s
expectations regarding the impact of COVID-19 and industry supply
shortages on its business, its anticipated total net revenue for
the first quarter of 2021, the timing of a first production license
for its Virtual Accelerator Engine IP and the Company’s 2021
revenue trend. Forward-looking statements are based on certain
assumptions and expectations of future events that are subject to
risks and uncertainties. Actual results and trends may differ
materially from historical results or those projected in any such
forward-looking statements depending on a variety of factors. These
factors include, but are not limited, to the
following:
●
a lack of working
capital to aggressively fund product development and
growth;
●
the timing of
customer orders and product shipments;
●
risks related to
the COVID-19 pandemic, including public health requirements in
response to the outbreak of COVID-19 and the impact on the
Company’s business and operations, which is evolving and
beyond the Company’s control, members of the Company’s
management team or a significant number of its employee base
becoming ill with COVID-19, changes in government regulations and
mandates to address COVID-19 that may adversely impact the
Company’s ability to continue to operate without disruption,
a significant decline in global macroeconomic conditions that have
an adverse impact on the Company’s business and financial
results and component shortages and increased lead times that may
negatively impact the Company’s ability to ship its
products;
●
customer
concentrations;
●
ability to enhance
our existing proprietary technologies and develop new
technologies;
●
achieving
additional design wins for our IC products through the acceptance
and adoption of our IC architecture and interface protocols by
potential customers and their suppliers;
●
difficulties and
delays in the development, production, testing and marketing of our
ICs;
●
reliance on our
manufacturing partners to assist successfully with the fabrication
of our ICs;
●
availability of
quantities of ICs supplied by our manufacturing partners at a
competitive cost;
●
ability to make our
new VAE IP products commercially available and achieve customer
acceptance of these new proprietary technologies;
●
level of
intellectual property protection provided by our patents, the
expenses and other consequences of litigation, including
intellectual property infringement litigation, to which we may be
or may become a party from time to time;
●
vigor and growth of
markets served by our customers and our operations;
and
●
other risks
identified in the Company’s most recent Annual Report on Form
10-K filed with the Securities and Exchange Commission on March 17,
2020, as well as other reports that MoSys files from time to time
with the Securities and Exchange Commission.
MoSys
does not intend to update publicly any forward-looking statement
for any reason, except as required by law, even as new information
becomes available or other events occur in the future.
About MoSys, Inc.
MoSys,
Inc. (NASDAQ: MOSY) is focused on Accelerating Data Intelligence
and provides both silicon chips and IP solutions to enable fast,
intelligent data access and decision making for a wide range of
markets including cloud networking, security, 5G, SmartNIC, test
and measurement, and video systems. MoSys’ Quazar family of
high-speed memories and the Blazar family of Accelerator Engines
are memory integrated circuits with unmatched intelligence,
performance and capacity that eliminate data access bottlenecks to
deliver speed and intelligence in systems, including those scaling
from 100G to multi-terabits per second. MoSys’ Stellar family
of Virtual Accelerator Engines includes software, FPGA RTL and
RISC-based firmware to accelerate applications and are portable
across a wide range of hardware configurations with or without
MoSys silicon chips. More information is available at: www.mosys.com.
Bandwidth Engine and MoSys are registered trademarks of MoSys, Inc.
in the US and/or other countries. The MoSys logo, LineSpeed,
Quazar, Blazar and Stellar are trademarks of MoSys, Inc. All other
marks mentioned herein are the property of their respective
owners.
(Financial Tables to Follow)
Contact:
Jim Sullivan, CFO
MoSys, Inc.
+1 (408) 418-7500
jsullivan@mosys.com
MOSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Revenue
|
|
|
|
|
Product
|
$1,383
|
$2,144
|
$5,933
|
$9,377
|
Royalty and
other
|
213
|
150
|
862
|
709
|
Total net
revenue
|
1,596
|
2,294
|
6,795
|
10,086
|
|
|
|
|
|
Cost
of Net Revenue
|
518
|
942
|
2,329
|
3,931
|
|
|
|
|
|
Gross
Profit
|
1,078
|
1,352
|
4,466
|
6,155
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
Research and
development
|
1,071
|
951
|
3,989
|
4,182
|
Selling, general
and administrative
|
974
|
1,053
|
4,028
|
4,016
|
Impairment of
goodwill
|
-
|
-
|
-
|
420
|
Total operating
expenses
|
2,045
|
2,004
|
8,017
|
8,618
|
|
|
|
|
|
Loss from
operations
|
(967)
|
(652)
|
(3,551)
|
(2,463)
|
|
|
|
|
|
Other expense,
net
|
(62)
|
(34)
|
(229)
|
(117)
|
Net
loss
|
$(1,029)
|
$(686)
|
$(3,780)
|
$(2,580)
|
|
|
|
|
|
Deemed dividend for
warrant exercise price adjustment
|
-
|
-
|
(392)
|
-
|
Net
loss attributable to common stockholders
|
$(1,029)
|
$(686)
|
$(4,172)
|
$(2,580)
|
|
|
|
|
|
Net
loss per share
|
|
|
|
|
Basic and
diluted
|
$(0.29)
|
$(0.31)
|
$(1.32)
|
$(1.19)
|
|
|
|
|
|
Shares
used in computing net loss per share
|
|
|
|
|
Basic and
diluted
|
3,554
|
2,178
|
3,167
|
2,165
|
MOSYS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
|
|
|
|
|
|
|
|
Assets
|
|
|
Current
assets:
|
|
|
Cash, cash
equivalents and investments
|
$5,889
|
$6,353
|
Accounts
receivable, net
|
701
|
1,175
|
Inventories
|
599
|
968
|
Prepaid expenses
and other
|
668
|
472
|
Total current
assets
|
7,857
|
8,968
|
|
|
|
Property and
equipment, net
|
121
|
197
|
Right-of-use lease
asset
|
303
|
156
|
Other
|
17
|
78
|
Total
assets
|
$8,298
|
$9,399
|
|
|
|
Liabilities
and Stockholders’ Equity
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$76
|
$218
|
Deferred
revenue
|
15
|
166
|
Short-term lease
liability
|
201
|
166
|
PPP note payable -
current portion
|
244
|
-
|
Accrued expenses
and other
|
1,300
|
1,155
|
Total current
liabilities
|
1,836
|
1,705
|
|
|
|
Convertible notes
payable
|
3,092
|
2,858
|
PPP note
payable
|
335
|
-
|
Long-term lease
liability
|
103
|
-
|
Total
liabilities
|
5,366
|
4,563
|
|
|
|
Stockholders'
equity
|
2,932
|
4,836
|
|
|
|
Total liabilities
and stockholders’ equity
|
$8,298
|
$9,399
|
MOSYS, INC.
Reconciliation of GAAP to Non-GAAP Net Loss and Net Loss Per
Share
(In thousands, except per share amounts; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
net loss attributable to common stockholders
|
$(1,029)
|
$(686)
|
$(4,172)
|
$(2,580)
|
Deemed dividend for
warrant exercise price adjustment
|
-
|
-
|
392
|
-
|
Stock-based
compensation expense
|
|
|
|
|
- Research and
development
|
22
|
27
|
101
|
108
|
- Selling, general
and administrative
|
38
|
37
|
156
|
155
|
Total stock-based
compensation expense
|
60
|
64
|
257
|
263
|
|
|
|
|
|
Impairment of
goodwill
|
-
|
-
|
-
|
420
|
Non-GAAP
net loss
|
$(969)
|
$(622)
|
$(3,523)
|
$(1,897)
|
|
|
|
|
|
GAAP
net loss attributable to common stockholders per share, basic and
diluted
|
$(0.29)
|
$(0.31)
|
$(1.32)
|
$(1.19)
|
Reconciling
items
|
|
|
|
|
- Deemed dividend
for warrant exercise price adjustment
|
-
|
-
|
0.13
|
-
|
- Stock-based
compensation expense
|
0.02
|
0.02
|
0.08
|
0.12
|
- Impairment of
goodwill
|
-
|
0.00
|
-
|
0.19
|
|
|
|
|
|
Non-GAAP
net loss per share, basic and diluted
|
$(0.27)
|
$(0.29)
|
$(1.11)
|
$(0.88)
|
|
|
|
|
|
Shares
used in computing non-GAAP net loss per share
|
|
|
|
|
Basic and
diluted
|
3,554
|
2,178
|
3,167
|
2,165
|
MOSYS, INC.
Reconciliation of GAAP and Non-GAAP Financial
Information
(In thousands; unaudited)
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of GAAP loss and adjusted EBITDA
|
|
|
|
|
GAAP
net loss attributable to common stockholders
|
$(1,029)
|
$(686)
|
$(4,172)
|
$(2,580)
|
Deemed dividend for
warrant exercise price adjustment
|
-
|
-
|
392
|
-
|
Stock-based
compensation expense
|
|
|
|
|
- Research and
development
|
22
|
27
|
101
|
108
|
- Selling, general
and administrative
|
38
|
37
|
156
|
155
|
Stock-based
compensation expense
|
60
|
64
|
257
|
263
|
Impairment of
goodwill
|
-
|
-
|
-
|
420
|
|
|
|
|
|
Non-GAAP
net loss
|
(969)
|
(622)
|
(3,523)
|
(1,897)
|
EBITDA
adjustments:
|
|
|
|
|
Depreciation
|
39
|
37
|
143
|
185
|
Interest
expense
|
70
|
56
|
243
|
220
|
|
|
|
|
|
Adjusted
EBITDA
|
$(860)
|
$(529)
|
$(3,137)
|
$(1,492)
|