SAN JOSE, CA / ACCESSWIRE / November 11, 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 financialresults for the third quarter ended September 30, 2021.
Third Quarter 2021 Financial Results
Total net revenue for the third quarter of 2021 was $1.3 million, compared with $1.2 million for the previous quarter and $2.0 million for the third quarter of 2020. Product revenue for the third quarter of 2021 was $1.2 million, compared with $1.0 million in the previous quarter and $1.8 million in the year ago period. The sequential increase in revenue compared with the previous quarter reflected higher shipments of Bandwidth Engine® IC products, partially offset by reduced royalties from 1T-SRAM licensees.
Gross margin for the third quarter of 2021 was 72%, compared with 62% for the second quarter of 2021 and 66% for the third quarter of 2020.
Total operating expenses on a GAAP basis for the third quarter of 2021 were $2.7 million, compared with operating expenses of $2.5 million in the previous quarter and $1.9 million in the third quarter of 2020. Total non-GAAP operating expenses, excluding stock-based compensation expenses, for the third quarter of 2021 were $2.5 million, compared with $2.4 million in the second quarter of 2021 and $1.9 million in the third quarter of 2020. Both GAAP and non-GAAP operating expenses included transaction costs related to the Company's proposed business combination with Peraso Technologies Inc. of $0.4 million and $0.8 million for the three and nine months ended September 30, 2021, respectively. 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 for the third quarter of 2021 was $1.7 million, or $0.20 per share, compared with a net loss of $1.2 million, or $0.18 per share, for the previous quarter, and a net loss of $0.7 million, or $0.20 per share, for the third quarter of 2020.
Non-GAAP net loss for the third quarter of 2021 was $1.6 million, or $0.18 per share, compared with a net loss of $1.7 million, or $0.25 per share, in the prior quarter and a net loss of $0.6 million, or $0.18 per share, for the third quarter of 2020. Adjusted EBITDA for the third quarter of 2021 was a negative $1.5 million, compared with a negative $1.7 million in the previous quarter and a negative $0.5 million for the third quarter of 2020.
At September 30, 2021, the Company had cash and investments of $21.2 million.
Management Commentary
Dan Lewis, President and CEO of MoSys, commented, "Our total revenue increased 14% sequentially, driven largely by a 19% increase in product revenue, and product gross margins improved to 69% during the third quarter. We secured multiple new design wins for our ICs during the quarter in new markets and further expanded our pipeline of customer engagements. Additionally, we continued to closely manage our supply chain to meet customer demand, and, with our increased customer order lead times, have visibility well into 2022. Based on our current backlog and visibility, we expect revenue to increase sequentially over the next few quarters, as one of our customers continues to ramp production on its new product using our Bandwidth Engine ICs.
With regard to our Virtual Accelerator Engine IP, we:
- continued to make IP deliveries and progress with our licensee prospects;
- broadened our partner ecosystem with the inclusion of Achronix, as an additional FPGA provider supporting our Stellar Packet Classification IP;
- will present at the Intel FPGA Technology Day on December 9, 2021; and
- are working with a leading FPGA provider, with whom we expect will soon begin actively promoting our packet classification and Graph Memory Engine (GME) IP in conjunction with its FPGA solutions.
Also, in September, we entered into a definitive agreement for a business combination with Peraso Technologies Inc., a global leader in the development of 5G mmWave silicon devices ("Peraso"). We have scheduled a special meeting of stockholders to be held on November 23, 2021 to vote upon the business combination. Our board of directors and management believe that the proposed business combination will provide significant long-term value to our stockholders and will offer increased scale that will be mutually beneficial to both companies. We encourage our stockholders to vote in favor of the business combination at the special meeting."
Business Outlook
MoSys expects total net revenue for the fourth quarter of 2021 to be in the range of $1.5 million to $1.7 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, gains on extinguishment of debt 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, gains on extinguishment of debt 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 to be filed on November 12, 2021 that the Company filed with the Securities and Exchange Commission.
Important Additional Information Filed with the SEC
In connection with the proposed business combination between MoSys and Peraso Technologies Inc., MoSys filed a proxy statement with the Securities Exchange Commission on October 18, 2021. The proxy statement was mailed to MoSys' stockholders on or about October 25, 2021. This communication is not a substitute for the proxy statement or any other documents that MoSys may file with the Securities and Exchange Commission or send to its stockholders in connection with the proposed transactions. BEFORE MAKING ANY VOTING DECISION, MOSYS URGES INVESTORS AND STOCKHOLDERS TO READ THESE MATERIALS, THE PROXY STATEMENT, AS MAY BE AMENDED, CAREFULLY AND IN ITS ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT MOSYS, THE PROPOSED TRANSACTION AND RELATED MATTERS.
You may obtain free copies of the proxy statement and all other documents filed or that will be filed with the Securities and Exchange Commission regarding the proposed transaction at the website maintained by the Securities and Exchange Commission at www.sec.gov. The proxy statement is available free of charge on MoSys' website at www.mosys.com or by electronic mail at [email protected]. Investors and stockholders are urged to read the proxy statement and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed transaction.
Participants in Solicitation
Under SEC rules, MoSys, Peraso, and their respective directors, executive officers and other members of their management and employees may be deemed to be participants in the solicitation of proxies of MoSys' stockholders in connection with the proposed business combination. Investors and security holders may obtain more detailed information regarding the names, affiliations and interests of MoSys' directors in its Annual Report on Form 10-K for the fiscal year ended December 31, 2020, which was filed with the SEC on March 18, 2021, and the proxy statement filed with the SEC on October 18, 2021. These documents can be obtained free of charge from the sources indicated above. Information regarding the persons who may, under SEC rules, be deemed participants in the solicitation of proxies to MoSys' stockholders in connection with the proposed business combination is set forth in the proxy statement for the business combination.
Non-Solicitation
This press release is not a proxy statement or solicitation of a proxy, consent, or authorization with respect to any securities or in respect of the proposed business combination and shall not constitute an offer to sell or a solicitation of an offer to buy the securities of MoSys or Peraso, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
No Offer or Solicitation to Sell
This communication is for informational purposes and is not intended to, and shall not, constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Forward-Looking Statements
This press release may contain forward-looking statements about the Company, including, without limitation, the Company's expectations regarding its supply chain constraints, its anticipated total net revenue for the fourth quarter of 2021, its 2021 and 2022 revenue trends, its relationships with FPGA providers and its proposed business combination with Peraso. 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:
- working capital to aggressively fund product development and growth;
- the ability of MoSys and Peraso to obtain stockholder approval for the business combination and related transactions;
- 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;
- lengthy sales cycles;
- 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 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 SEC on March 18, 2021, and the proxy statement filed with the SEC on October 18, 2021, as well as other reports that MoSys files from time to time with the SEC.
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 semiconductor and IP solutions that enable fast, intelligent data access and decision making for a wide range of markets including cloud networking, security, 5G networks, 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 its Packet Classification Platforms for LPM and ACL-based applications embedded in ASICs and FPGAs. This IP accelerates applications and is 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, 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
[email protected]
MOSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts; unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
Net Revenue | ||||||||||||||||
Product | $ | 1,210 | $ | 1,803 | $ | 3,405 | $ | 4,550 | ||||||||
Royalty and other | 127 | 168 | 438 | 649 | ||||||||||||
Total net revenue | 1,337 | 1,971 | 3,843 | 5,199 | ||||||||||||
Cost of Net Revenue | 376 | 677 | 1,315 | 1,811 | ||||||||||||
Gross Profit | 961 | 1,294 | 2,528 | 3,388 | ||||||||||||
Operating Expenses | ||||||||||||||||
Research and development | 1,281 | 972 | 3,662 | 2,918 | ||||||||||||
Selling, general and administrative | 1,398 | 955 | 3,756 | 3,054 | ||||||||||||
Total operating expenses | 2,679 | 1,927 | 7,418 | 5,972 | ||||||||||||
Loss from operations | 1,718 | ) | (633 | ) | (4,890 | ) | (2,584 | ) | ||||||||
Other income (expense), net | 4 | (74 | ) | 602 | (167 | ) | ||||||||||
Net loss | (1,714 | ) | (707 | ) | (4,288 | ) | (2,751 | ) | ||||||||
Deemed dividend for warrant exercise price adjustment | - | - | - | (392 | ) | |||||||||||
Net loss attributable to common stockholders | $ | (1,714 | ) | $ | (707 | ) | $ | (4,288 | ) | $ | (3,143 | ) | ||||
Net loss per share | ||||||||||||||||
Basic and diluted | $ | (0.20 | ) | $ | (0.20 | ) | $ | (0.63 | ) | $ | (1.03 | ) | ||||
Shares used in computing net loss per share | ||||||||||||||||
Basic and diluted | 8,676 | 3,546 | 6,812 | 3,037 | ||||||||||||
MOSYS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
| September 30, 2021 | December 31, 2020 | |||||||
| Assets | ||||||||
Current assets: | ||||||||
Cash, cash equivalents and investments | $ | 18,033 | $ | 5,889 | ||||
Accounts receivable, net | 749 | 701 | ||||||
Inventories | 1,153 | 599 | ||||||
Prepaid expenses and other | 694 | 668 | ||||||
Total current assets | 20,629 | 7,857 | ||||||
Long-term investments | 3,203 | - | ||||||
Property and equipment, net | 89 | 121 | ||||||
Right-of-use lease asset | 155 | 303 | ||||||
Other | 18 | 17 | ||||||
Total assets | $ | 24,094 | $ | 8,298 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 144 | $ | 76 | ||||
Accrued expenses and other | 1,562 | 1,300 | ||||||
Deferred revenue | 162 | 15 | ||||||
Short-term lease liability | 163 | 201 | ||||||
PPP note payable - current portion | - | 244 | ||||||
Total current liabilities | 2,031 | 1,836 | ||||||
Convertible notes payable | - | 3,092 | ||||||
PPP note payable | - | 335 | ||||||
Long-term lease liability | - | 103 | ||||||
Total liabilities | 2,031 | 5,366 | ||||||
Stockholders' equity | 22,063 | 2,932 | ||||||
Total liabilities and stockholders' equity | $ | 24,094 | $ | 8,298 | ||||
MOSYS, INC.
Reconciliation of GAAP to Non-GAAP Net Loss and Net Loss Per Share
(In thousands, except per share amounts; unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
GAAP net loss attributable to common stockholders | $ | (1,714 | ) | $ | (707 | ) | $ | (4,288 | ) | $ | (3,143 | ) | ||||
Deemed dividend for warrant exercise price adjustment | - | - | - | 392 | ||||||||||||
Stock-based compensation expense | ||||||||||||||||
-Research and development | 103 | 25 | 178 | 79 | ||||||||||||
-Selling, general and administrative | 46 | 38 | 136 | 118 | ||||||||||||
Total stock-based compensation expense | 149 | 63 | 314 | 197 | ||||||||||||
Gains on debt extinguishment | - | - | (627 | ) | - | |||||||||||
Non-GAAP net loss | $ | (1,565 | ) | $ | (644 | ) | $ | (4,601 | ) | $ | (2,554 | ) | ||||
GAAP net loss attributable to common stockholders per share, basic and diluted | $ | (0.20 | ) | $ | (0.20 | ) | $ | (0.63 | ) | $ | (1.03 | ) | ||||
Reconciling items | ||||||||||||||||
-Deemed dividend for warrant exercise price adjustment | - | - | - | 0.13 | ||||||||||||
-Stock-based compensation expense | 0.02 | 0.02 | 0.04 | 0.06 | ||||||||||||
-Gains on debt extinguishment | - | - | (0.09 | ) | - | |||||||||||
Non-GAAP net loss per share, basic and diluted | $ | (0.18 | ) | $ | (0.18 | ) | $ | (0.68 | ) | $ | (0.84 | ) | ||||
Shares used in computing non-GAAP net loss per share | ||||||||||||||||
Basic and diluted | 8,676 | 3,546 | 6,812 | 3,037 | ||||||||||||
MOSYS, INC.
Reconciliation of GAAP and Non-GAAP Financial Information
(In thousands; unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
Reconciliation of GAAP loss and adjusted EBITDA | ||||||||||||||||
GAAP net loss attributable to common stockholders | $ | (1,714 | ) | $ | (707 | ) | $ | (4,288 | ) | $ | (3,143 | ) | ||||
Deemed dividend for warrant exercise price adjustment | - | - | - | 392 | ||||||||||||
Stock-based compensation expense | ||||||||||||||||
-Research and development | 103 | 25 | 178 | 79 | ||||||||||||
-Selling, general and administrative | 46 | 38 | 136 | 118 | ||||||||||||
Stock-based compensation expense | 149 | 63 | 314 | 197 | ||||||||||||
Gains on debt extinguishment | - | - | (627 | ) | - | |||||||||||
Non-GAAP net loss | (1,565 | ) | (644 | ) | (4,601 | ) | (2,554 | ) | ||||||||
EBITDA adjustments: | ||||||||||||||||
Depreciation | 16 | 39 | 51 | 121 | ||||||||||||
Interest expense | - | 70 | 30 | 181 | ||||||||||||
Adjusted EBITDA | $ | (1,549 | ) | $ | (535 | ) | $ | (4,520 | ) | $ | (2,252 | ) | ||||
SOURCE: MoSys, Inc.
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