Mosys Earnings 2020-09-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

10-Q 1 mosy-10q_20200930.htm 10-Q mosy-10q_20200930.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark one)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 000-32929

MOSYS, INC.

(Exact name of registrant as specified in its charter)

Delaware		77-0291941
(State or other jurisdiction		(I.R.S. Employer
of Incorporation or organization)		Identification Number)

2309 Bering Drive

San Jose, California, 95131

(Address of principal executive office and zip code)

(408) 418-7500

(Registrant’s telephone number, including area code)

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days. YES ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of outstanding shares of the registrant’s common stock, par value $0.001 per share, was 3,553,184 as of November 5, 2020.

MOSYS, INC.

FORM 10-Q

September 30, 2020

TABLE OF CONTENTS

PART I —	FINANCIAL INFORMATION	3

Item 1.	Financial Statements (Unaudited):	3

	Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019	3

	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2020 and 2019	4

	Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2020 and 2019	5

	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 4.	Controls and Procedures	24

PART II —	OTHER INFORMATION	24

Item 1.	Legal Proceedings	24

Item 1A.	Risk Factors	24

Item 6.	Exhibits	26

	Signatures	27

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

MOSYS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)

	September 30,			December 31,
	2020			2019
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	6,921		$	6,053
Short-term investments		—			300
Accounts receivable		790			1,175
Inventories		713			968
Prepaid expenses and other		359			472
Total current assets		8,783			8,968
Property and equipment, net		86			197
Right-of-use lease asset, net		352			156
Other		17			78
Total assets	$	9,238		$	9,399
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	80		$	218
Deferred revenue		—			166
Short-term lease liability		201			166
PPP note payable, current		171			—
Accrued expenses and other		1,233			1,155
Total current liabilities		1,685			1,705
Convertible notes payable		3,092			2,858
PPP note payable		408			—
Long-term lease liability		152			—
Total liabilities		5,337			4,563
Commitments and contingencies (Note 4)
Stockholders’ equity
Preferred stock, $0.01 par value; 20,000 shares authorized; none issued and outstanding		—			—
Common stock, $0.001 par value; 120,000 shares authorized; 3,553 shares and 2,179 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively		3			2
Additional paid-in capital		245,488			243,281
Accumulated deficit		(241,590	)		(238,447	)
Total stockholders’ equity		3,901			4,836
Total liabilities and stockholders’ equity	$	9,238		$	9,399

The accompanying notes are an integral part of these condensed consolidated financial statements.

MOSYS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(In thousands, except per share data)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2020			2019			2020			2019
Net revenue
Product	$	1,803		$	1,037		$	4,550		$	7,233
Royalty and other		168			169			649			559
Total net revenue		1,971			1,206			5,199			7,792
Cost of net revenue		677			407			1,811			2,989
Gross profit		1,294			799			3,388			4,803
Operating expenses
Research and development		972			1,097			2,918			3,231
Selling, general and administrative		955			1,059			3,054			2,963
Impairment of goodwill		—			420			—			420
Total operating expenses		1,927			2,576			5,972			6,614
Loss from operations		(633	)		(1,777	)		(2,584	)		(1,811	)
Interest expense		(70	)		(54	)		(181	)		(164	)
Other income (expense), net		(4	)		30			14			81
Net loss		(707	)		(1,801	)		(2,751	)		(1,894	)

Deemed dividend for warrant exercise price adjustment		—			—			(392	)		—
Net loss attributable to common stockholders	$	(707	)	$	(1,801	)	$	(3,143	)	$	(1,894	)

Net loss per share attributable to common stockholders
Basic and diluted	$	(0.20	)	$	(0.83	)	$	(1.03	)	$	(0.88	)
Shares used in computing net loss per share
Basic and diluted		3,546			2,171			3,037			2,161


Other comprehensive income, net of tax:
Net loss	$	(707	)	$	(1,801	)	$	(2,751	)	$	(1,894	)
Net unrealized gains on available-for-sale securities		—			—			—			1
Comprehensive loss	$	(707	)	$	(1,801	)	$	(2,751	)	$	(1,893	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

MOSYS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(In thousands)

								Accumulated
					Additional			Other
	Common Stock				Paid-In			Comprehensive		Accumulated
	Shares		Amount		Capital			Income		Deficit			Total
Balance as of December 31, 2019		2,179	$	2	$	243,281			—	$	(238,447	)	$	4,836
Issuance of common stock for release of awards		20		—		(1	)		—		—			(1	)
Exercise of pre-funded warrants		116		—		2			—		—			2
Stock-based compensation		—		—		68			—		—			68
Net loss		—		—		—			—		(1,405	)		(1,405	)
Balance as of March 31, 2020		2,315		2		243,350			—		(239,852	)		3,500
Issuance of common stock for release of awards		1		—		—			—		—			—
Sale of common stock, net of financing costs		1,218		1		1,618			—		—			1,619
Deemed dividend for warrant exercise price adjustment		—		—		392			—		(392	)		—
Stock-based compensation		—		—		66			—		—			66
Net loss		—		—		—			—		(639	)		(639	)
Balance as of June 30, 2020		3,534		3		245,426			—		(240,883	)		4,546
Issuance of common stock for release of awards		19		—		(1	)		—		—			(1	)
Stock-based compensation		—		—		63			—		—			63
Net loss		—		—		—			—		(707	)		(707	)
Balance as of September 30, 2020		3,553	$	3	$	245,488		$	—	$	(241,590	)	$	3,901


								Accumulated
					Additional			Other
	Common Stock				Paid-In			Comprehensive		Accumulated
	Shares		Amount		Capital			Income		Deficit			Total
Balance as of December 31, 2018		2,148	$	2	$	243,022			—	$	(235,867	)	$	7,157
Issuance of common stock for release of awards		9		—		(1	)		—		—			(1	)
Stock-based compensation		—		—		(4	)		—		—			(4	)
Net income		—		—		—			—		10			10
Balance as of March 31, 2019		2,157		2		243,017			—		(235,857	)		7,162
Issuance of common stock for release of awards		5		—		—			—		—			—
Stock-based compensation		—		—		119			—		—			119
Unrealized gain on available-for-sale investments		—		—		—			1		—			1
Net loss		—		—		—			—		(103	)		(103	)
Balance as of June 30, 2019		2,162		2		243,136			1		(235,960	)		7,179
Issuance of common stock for release of awards		16		—		(3	)		—		—			(3	)
Stock-based compensation		—		—		84			—		—			84
Net loss		—		—		—			—		(1,801	)		(1,801	)
Balance as of September 30, 2019		2,178	$	2	$	243,217		$	1	$	(237,761	)	$	5,459

The accompanying notes are an integral part of these condensed consolidated financial statements.

MOSYS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Nine Months Ended
	September 30,
	2020			2019
Cash flows from operating activities:
Net loss	$	(2,751	)	$	(1,894	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		121			148
Stock-based compensation		197			199
Impairment of goodwill		—			420
Accrued interest		181			164
Other		(5	)		(11	)
Changes in assets and liabilities:
Accounts receivable		385			729
Inventories		255			(67	)
Prepaid expenses and other assets		174			448
Accounts payable		(138	)		(105	)
Deferred revenue and other liabilities		(35	)		(257	)
Net cash used in operating activities		(1,616	)		(226	)
Cash flows from investing activities:
Purchases of property and equipment		(14	)		(62	)
Proceeds from maturities of short-term investments		300			925
Purchases of short-term investments		—			(1,567	)
Net cash provided by (used in) investing activities		286			(704	)
Cash flows from financing activities:
Proceeds from PPP note		579			—
Proceeds from sale of common stock, net of financing costs		1,619			—
Net proceeds from exercise of pre-funded warrants		2			—
Taxes paid to net share settle equity awards		(2	)		(4	)
Net cash provided by (used in) financing activities		2,198			(4	)
Net increase (decrease) in cash and cash equivalents		868			(934	)
Cash and cash equivalents at beginning of period		6,053			7,104
Cash and cash equivalents at end of period	$	6,921		$	6,170
Supplemental disclosure:
Issuance of convertible notes in settlement of accrued interest	$	234		$	187
Fair value of warrant exercise price adjustment considered as deemed dividend	$	392		$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

MOSYS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. The Company and Summary of Significant Accounting Policies

MoSys, Inc. (the Company) was incorporated in California in September 1991 and reincorporated in September 2000 in Delaware. The Company’s strategy and primary business objective is to be an IP-rich fabless semiconductor company focused on the development and sale of integrated circuit (IC) and related software and firmware products.

The accompanying condensed consolidated financial statements of the Company have been prepared without audit.

The condensed consolidated balance sheet as of December 31, 2019 has been derived from the audited consolidated financial statements at that date. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) have been condensed or omitted in accordance with these rules and regulations of the Securities and Exchange Commission (SEC). The information in this report should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in its most recent annual report on Form 10-K filed with the SEC.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) necessary to summarize fairly the Company’s financial position, results of operations and cash flows for the interim periods presented. The operating results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 or for any other future period.

Basis of Presentation

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. The Company’s fiscal year ends on December 31 of each calendar year.

Risks and Uncertainties

The Company is subject to risks from, among other things, competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, limited operating history and the volatility of public markets.

COVID-19

The global outbreak of the coronavirus disease 2019 (COVID-19) was declared a pandemic by the World Health Organization and a national emergency by the U.S. government in March 2020. This has negatively affected the U.S. and global economy, disrupted global supply chains, significantly restricted travel and transportation, resulted in mandated closures and orders to “shelter-in-place” and created significant disruption of the financial markets. The full extent of the COVID-19 impact on the Company’s operational and financial performance will depend on future developments, including the duration and spread of the pandemic and related actions taken by U.S. and foreign government agencies to prevent disease spread, all of which are uncertain, out of the Company’s control, and cann

Price	2.44	EPS	-1
Shares	2	P/E	-3
MCap	5	P/FCF	-24
Net Debt	-6	EBIT	-2
TEV	-1	TEV/EBIT	0
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-09-30	Filed 2020-11-10
10-Q	2020-06-30	Filed 2020-08-12
10-Q	2020-03-31	Filed 2020-05-08
10-K	2019-12-31	Filed 2020-03-17
10-Q	2019-09-30	Filed 2019-11-13
10-Q	2019-06-30	Filed 2019-08-13
10-Q	2019-03-31	Filed 2019-05-15
10-K	2018-12-31	Filed 2019-03-12
10-Q	2018-09-30	Filed 2018-11-06
10-Q	2018-06-30	Filed 2018-08-08
S-1	2018-05-24	Public Filing
10-Q	2018-03-31	Filed 2018-05-11
S-1	2018-01-04	Public Filing
10-K	2017-12-31	Filed 2018-03-12
10-Q	2017-09-30	Filed 2017-11-14
10-Q	2017-06-30	Filed 2017-08-10
10-Q	2017-03-31	Filed 2017-05-12
10-K	2016-12-31	Filed 2017-03-30
10-Q	2016-09-30	Filed 2016-11-09
10-Q	2016-06-30	Filed 2016-08-09
10-Q	2016-03-31	Filed 2016-05-10
10-K	2015-12-31	Filed 2016-03-15
10-Q	2015-09-30	Filed 2015-11-06
10-Q	2015-06-30	Filed 2015-08-07
10-Q	2015-03-31	Filed 2015-05-11
10-K	2014-12-31	Filed 2015-03-13
10-Q	2014-09-30	Filed 2014-11-07
10-Q	2014-06-30	Filed 2014-08-08
10-Q	2014-03-31	Filed 2014-05-12
10-K	2013-12-31	Filed 2014-03-14
10-Q	2013-09-30	Filed 2013-11-08
10-Q	2013-06-30	Filed 2013-08-08
10-Q	2013-03-31	Filed 2013-05-03
10-K	2012-12-31	Filed 2013-03-12
10-Q	2012-09-30	Filed 2012-11-07
10-Q	2012-06-30	Filed 2012-08-09
10-Q	2012-03-31	Filed 2012-05-09
10-K	2011-12-31	Filed 2012-03-15
10-Q	2011-09-30	Filed 2011-11-09
10-Q	2011-06-30	Filed 2011-08-08
10-Q	2011-03-31	Filed 2011-05-10
10-K	2010-12-31	Filed 2011-03-15
10-Q	2010-09-30	Filed 2010-11-03
10-Q	2010-06-30	Filed 2010-08-13
10-Q	2010-03-31	Filed 2010-05-12
10-K	2009-12-31	Filed 2010-03-26

8-K	2020-11-06
8-K	2020-08-06
8-K	2020-07-15
8-K	2020-06-25
8-K	2020-05-13
8-K	2020-05-07
8-K	2020-05-05
8-K	2020-04-17
8-K	2020-02-20
8-K	2019-11-06
8-K	2019-08-27
8-K	2019-08-23
8-K	2019-08-06
8-K	2019-05-24
8-K	2019-05-09
8-K	2019-04-15
8-K	2019-02-20
8-K	2018-12-28
8-K	2018-11-06
8-K	2018-10-12
8-K	2018-10-02
8-K	2018-09-21
8-K	2018-09-14
8-K	2018-09-13
8-K	2018-08-13
8-K	2018-08-13
8-K	2018-07-25
8-K	2018-05-10
8-K	2018-02-26

EX-31.1	mosy-ex311_7.htm
EX-31.2	mosy-ex312_6.htm
EX-32.1	mosy-ex321_8.htm

MOSY 10Q Quarterly Report

Mosys Earnings 2020-09-30