Filing summary
Entity and period: The supplied filing is MoSys, Inc.’s unaudited Form 10-Q for the three months ended March 31, 2015—not a Peraso Inc. filing as indicated in the request metadata. Verify the intended company before relying on this summary.
Business context
MoSys develops and sells fabless semiconductor integrated circuits for networking and communications markets, including Bandwidth Engine and LineSpeed products, and also receives royalties from licensed intellectual property. Management said the company’s future profitability depends on growing sales of its IC products; no design-win customer had yet begun full production of systems using those products.
Financial results
| Metric | Q1 2015 | Q1 2014 |
|---|---|---|
| Net revenue | $0.776 million | $1.332 million |
| Gross profit / margin | $0.539 million / 69% | $0.755 million / 57% |
| Operating expenses | $8.507 million | $8.851 million |
| Operating loss | $7.968 million | $8.096 million |
| Net loss | $7.965 million | $8.087 million |
| Loss per share, basic and diluted | $0.15 | $0.16 |
| Operating cash used | $7.009 million | $6.337 million |
Revenue fell 42% year over year: product revenue declined 69% to $0.180 million, while royalty and other revenue declined 21% to $0.596 million. Gross margin improved mainly because royalty revenue, which carries no associated cost, made up a larger share of revenue. R&D was $6.893 million and SG&A was $1.614 million. Dollar amounts are in U.S. dollars.
Financial position and liquidity
At March 31, 2015, cash and cash equivalents were $7.020 million and short- and long-term investments totaled $33.663 million; management reported combined cash, cash equivalents, and investments of $40.7 million and working capital of $32.8 million. Total assets were $67.557 million, current liabilities $2.598 million, and stockholders’ equity $64.714 million. The filing does not report a separate debt balance; disclosed liabilities include operating obligations and other liabilities.
Cash used in investing activities was $11.094 million, primarily reflecting transfers from cash into investments and not a reduction in overall liquidity. Financing provided $22.013 million, including approximately $21.5 million net proceeds from a March public offering of 14.375 million shares. Shares issued and outstanding increased to 64.639 million at quarter-end, from 49.793 million at year-end.
Outlook, risks, and notable items
- Management expected cash expenditures to exceed receipts in 2015, but believed available cash and investments would fund requirements for the foreseeable future. It cautioned that sufficiency was not assured through the point of positive cash flow and that additional capital might be needed.
- Management expected R&D expense to fluctuate and said second-quarter 2015 mask-tooling and fabrication costs for next-generation Bandwidth Engine products would significantly increase R&D expense.
- Revenue is exposed to product shipment levels, timing and variability of royalties, and customers’ ability to bring products incorporating MoSys technology to market. One customer generated 60% of Q1 2015 revenue; two customers represented 80% of period-end receivables.
- MoSys had paid Credo Semiconductor $4.6 million for development and related costs and was entitled to reimbursement of $4.2 million from product gross profits, subject to the agreement’s terms; after reimbursement, gross profits are to be shared equally.
- Contractual obligations totaled $6.944 million, including $4.130 million in operating leases, $2.312 million in software licenses, and $0.502 million in purchase commitments. The filing reported no material legal proceeding believed likely to materially harm financial position or results.
- Management reported disclosure controls and procedures were effective as of March 31, 2015, with no material change in internal control over financial reporting during the quarter.
Investor verification points
- Confirm whether the intended filing is MoSys, Inc. or Peraso Inc.; the supplied filing identifies MoSys.
- Assess the effect of the share offering on dilution and runway, and compare subsequent cash burn with management’s liquidity outlook.
- Track whether design-win customers enter production, product shipments increase, and revenue concentration declines.
- Verify the timing and scale of the expected R&D increase and progress on Credo-related products and reimbursement.
- Review the latest filing for changes in customer concentration, contractual obligations, and any need for additional financing.