Filing summary
Entity and period: The supplied filing is MoSys, Inc.’s Form 10-K for the fiscal year ended December 31, 2019, filed March 17, 2020. This does not match the request metadata identifying Peraso Inc.; verify the issuer before relying on this summary.
Business context
MoSys describes itself as a fabless semiconductor company selling high-speed networking ICs and licensing intellectual property. Its primary product line was Accelerator Engine ICs; it also sold LineSpeed PHY products and legacy technology licenses. The company expanded its target markets during 2019 to include video, test and measurement, and computing. It reported 23 employees at year-end and relied on third parties for fabrication, assembly, packaging, and testing.
Financial results
| Metric | 2019 | 2018 |
|---|---|---|
| Total revenue | $10.086 million | $16.600 million |
| Product revenue | $9.377 million | $15.053 million |
| Royalty and other revenue | $0.709 million | $1.547 million |
| Gross profit / gross margin | $6.155 million / 61% | $10.254 million / 62% |
| Operating loss | $2.463 million | $10.826 million |
| Net loss | $2.580 million | $11.409 million |
| Cash from (used in) operations | $(0.651) million | $0.335 million |
Revenue fell 39% year over year, primarily because of lower Bandwidth Engine shipments, completion of final Bandwidth Engine 1 shipments in the first half of 2019, and reduced shipments to some large Bandwidth Engine 2 customers. Royalty and other revenue decreased 54%, partly reflecting the absence of a one-time license and services arrangement. The 2019 net loss was substantially lower than in 2018, when a $12.856 million goodwill impairment charge contributed to results; 2019 included a $0.420 million non-cash goodwill impairment charge. Research and development expense was $4.182 million and SG&A was $4.016 million in 2019.
Liquidity, debt and capital resources
At December 31, 2019, cash and cash equivalents were $6.053 million and short-term investments were $0.300 million, compared with $7.104 million in cash and no short-term investments a year earlier. Current assets were $8.968 million and current liabilities were $1.705 million. Operating activities used $0.651 million of cash in 2019; cash and cash equivalents declined by $1.051 million during the year.
Convertible notes payable were $2.858 million at year-end. The notes bear 8% interest, are secured by company assets, and mature August 15, 2023. The company paid interest in kind, including approximately $0.112 million of additional notes issued in February 2020. Management said available liquidity should cover working capital and capital expenditures for at least 12 months, but also expected 2020 cash expenditures to exceed receipts and anticipated needing additional capital. There is no assurance financing will be available on acceptable terms.
Outlook, risks and unusual items
- Management expected Bandwidth Engine 2 to remain the primary revenue source through at least 2021, while royalty revenue was expected to decline in 2020 and later periods.
- Initial Software Accelerator products were expected to be available for licensing in the first half of 2020. Management expected R&D expense to remain consistent and SG&A to increase in 2020 as sales and marketing efforts expanded.
- Design wins may take 18–36 months to reach volume shipments and may not produce meaningful revenue. Revenue was concentrated: four named customers accounted for 74% of 2019 revenue, and four customers represented 85% of year-end receivables.
- Key operating risks include ongoing losses and potential financing needs; dependence on a single wafer foundry, TSMC; product and customer acceptance, including adoption of the GigaChip interface; customer concentration; and limited resources for next-generation IC development. The filing notes that the company’s 1T-SRAM technology is unavailable below 40 nm and that it lacked funds for anticipated next-generation development costs.
- The filing identified potential COVID-19-related supplier, customer, travel, and demand disruptions. It also disclosed a 1-for-20 reverse stock split in August 2019 and adoption of the new lease standard, which added lease assets and liabilities to the balance sheet.
- The company reported effective disclosure controls and effective management-assessed internal control over financial reporting as of year-end. The auditor issued an unqualified opinion on the financial statements and stated it was not engaged to audit internal control.
Important facts for investors to verify
- Confirm the issuer: the source is MoSys, Inc. (ticker MOSY), not Peraso Inc.
- Review the full audited statements and notes, including the convertible-note terms, security interests, and February 2020 interest-note issuance.
- Assess whether customer design wins convert to production revenue, especially given the 2019 shipment decline and customer concentration.
- Verify liquidity and funding plans against the company’s expected 2020 cash outflows and stated need for additional capital.
- Check subsequent filings for actual Software Accelerator launch and licensing progress, COVID-19 impacts, and any changes in Nasdaq listing compliance.