Business context and reporting period
The supplied filing is MoSys, Inc.’s Form 10-K for the fiscal year ended December 31, 2020, filed March 18, 2021—not a quarterly report. This conflicts with the request metadata identifying Peraso Inc.; the summary below reflects the filing text provided.
MoSys develops and sells fabless semiconductor products and licenses related intellectual property, focused on high-speed memory and data processing. Its main products included Accelerator Engine ICs, LineSpeed PHYs, and a newly introduced Virtual Accelerator Engine (VAE) software/IP line. The company reported 24 employees at year-end.
Financial performance and position
| Metric | 2020 | 2019 |
|---|---|---|
| Total revenue | $6.795 million | $10.086 million |
| Product revenue | $5.933 million | $9.377 million |
| Royalty and other revenue | $0.862 million | $0.709 million |
| Gross profit / margin | $4.466 million / 66% | $6.155 million / 61% |
| Operating loss | $3.551 million | $2.463 million |
| Net loss | $3.780 million | $2.580 million |
| Net loss attributable to common stockholders | $4.172 million | $2.580 million |
| Basic and diluted loss per share | $1.32 | $1.19 |
| Cash used in operating activities | $2.591 million | $0.651 million |
- Revenue fell about 33%, driven mainly by a 37% decline in product revenue. Management attributed lower shipments to customer transitions and inventory reductions, as well as completion of final Bandwidth Engine 1 shipments in the first half of 2019.
- Gross margin increased to 66%, partly because royalty and other revenue—which generally has no associated cost—increased. Research and development expense was $3.989 million and SG&A was $4.028 million.
- Cash and cash equivalents were $5.889 million at year-end, down from $6.053 million; 2019 also included $0.300 million of short-term investments. Total assets were $8.298 million and stockholders’ equity was $2.932 million.
- Year-end liabilities included $3.092 million of convertible notes, $0.579 million of PPP borrowing, and $0.304 million of lease liabilities. The convertible notes carried an 8% rate and were secured by company assets.
- The $0.392 million deemed dividend from a warrant exercise-price reduction increased the loss attributable to common stockholders; it did not increase reported net loss.
Material changes and subsequent events
- Product revenue declined from $9.377 million to $5.933 million, while royalty and other revenue rose from $0.709 million to $0.862 million. Legacy 1T-SRAM royalties represented 12% of 2020 revenue, versus 7% in 2019.
- Operating cash use increased to $2.591 million from $0.651 million. The company raised $1.619 million net from an April 2020 stock offering and received a $0.579 million Paycheck Protection Program loan.
- In February 2021, MoSys sold 1,487,601 shares at $5.00 each for approximately $6.8 million net proceeds. It also received approximately $2.48 million from warrant exercises. The company reported that it repaid the convertible notes in full in March 2021.
- Common shares outstanding were 3.554 million at December 31, 2020; the filing cover reports 6,133,719 shares outstanding as of March 12, 2021.
Outlook, risks, and unusual items
- Management expected IC revenue to increase in 2021, but also warned that COVID-19 was expected to negatively affect 2021 revenue, without quantifying the impact. Longer supplier lead times had been experienced, although the company reported limited production disruption in 2020.
- The company expected 2021 cash expenditures to exceed receipts and anticipated needing additional capital. It described its cash sources as sufficient for working-capital and capital-expenditure needs for the foreseeable future, while emphasizing financing uncertainty and potential dilution.
- MoSys expected research and development and SG&A expenses to remain approximately flat in 2021. It began offering VAE products for license in 2020 and expected production licenses to begin in 2021; successful commercialization remains uncertain.
- Key risks include persistent losses and cash burn, customer and receivables concentration, long design-to-volume sales cycles, dependence on third-party manufacturers and sole foundry TSMC, and limited financial and product-development resources. The company stated that its 1T-SRAM technology is unavailable below 40 nm and that it had no plans to continue the Accelerator Engine product roadmap.
- In 2019, the company recorded a $0.420 million goodwill impairment; no goodwill impairment was recorded in 2020. The 2020 audit identified the warrant exercise-price adjustment as a critical audit matter. The financial statements received an unqualified audit opinion; management reported disclosure controls and internal control over financial reporting effective as of year-end, while the auditor did not provide an internal-control audit opinion.
Most important facts to verify
- Confirm the issuer identity: the filing is for MoSys, Inc. (ticker MOSY), not Peraso Inc.
- Review audited financial statements and cash-flow trends, particularly increasing operating cash use and the company’s stated need for future financing.
- Reconcile customer concentration disclosures: the filing lists customer shares of 37%, 22%, 10%, and 10% for 2020, while another passage describes the three largest customers as 66% of revenue.
- Confirm the completion and terms of the February 2021 equity offering, warrant exercises, and March 2021 repayment of convertible notes, including resulting dilution and remaining obligations.
- Track 2021 revenue, VAE licensing and production adoption, COVID-19 and supplier effects, and the status of PPP loan forgiveness.