MOSYS, INC. (NASDAQ:MOSY) Files An 8-K Costs Associated with Exit or Disposal Activities
Item 2.05. Costs Associated with Exit or Disposal Activities.
On April 7, 2017, MoSys, Inc., or the Company, committed to
effect a reduction in the Companys workforce and associated
operating expenses, net loss and cash burn. The Company will
primarily focus its resources on producing and selling its
existing products, and will substantially curtail new product
development. The Company will reduce headcount by up to 60% with
the majority of the reductions occurring in its Santa Clara
facility. The Company anticipates that it will fully implement
the planned reductions by the end of the second quarter of 2017.
As a result of these reductions, the Company expects to incur
approximately $0.6 million of charges for severance benefits and
other one-time headcount termination costs. The Company expects
that substantially all of these charges will be recognized and
paid during the second quarter of 2017. The Company expects to
realize approximately $6.0 million of savings for personnel costs
(salaries and benefits) on an annual basis from the headcount
reductions.
At this time, except as disclosed above, the Company is not able
in good faith to make a determination of the estimated amount or
range of amounts to be incurred for each major type of cost nor
the charges and future cash expenditures associated therewith.
The Company will file an amendment to this report after it makes
a determination of such amounts.
This Item 2.05 may contain forward-looking statements about the
Company, including, without limitation, the timing of
expenditures related to the workforce reduction and anticipated
cost savings. Forward-looking statements are based on certain
assumptions and expectations of future events that are subject to
risks and uncertainties. Such statements are made in reliance
upon the safe harbor provisions of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of
1934. 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 timing of planned expense
reductions, the timing of customer orders and product shipments,
our ability to enhance our existing proprietary technologies and
develop new technologies, achieving necessary acceptance and
adoption of our IC architecture and interface protocols by
potential customers and their suppliers, difficulties and delays
in the development, 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,
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 MoSys most recent report on form 10-K
filed with the Securities and Exchange Commission, as well as
other reports that MoSys files from time to time with the
Securities and Exchange Commission. MoSys undertakes no
obligation 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.
Item 3.01. Notice of Delisting or Failure to Satisfy a
Continued Listing Rule or Standard; Transfer of Listing.
On April 7, 2017, the Company received three deficiency
notification letters from the Listing Qualifications Department
(the Staff) of The NASDAQ Stock Market (Nasdaq).
The first letter provided notification that the Company no longer
complies with the audit committee composition requirement under
Listing Rule 5605(c)(2). Previously, on July 14, 2016, the Staff
notified the Company that it was eligible for a cure period,
through June 24, 2017, to comply with Rule 5605(c)(2) due to the
fact that there was one vacancy on the Companys audit committee.
However, due to the resignation of Tommy Eng from the Companys
board of directors effective April 1, 2017, the Companys audit
committee is comprised of only one independent director, and
therefore, the Company is no longer eligible for the cure period
described in the Staffs July 14, 2016 notification letter. Under
Rule 5605(c)(2), the Company has 45 calendar days to submit a
plan to regain compliance. If the Companys plan is accepted, the
Staff can grant an extension of up to 180 calendar days from the
date of the letter to evidence compliance. If the Staff does not
accept the Companys plan, the Company will have the opportunity
to appeal that decision before a Nasdaq Hearings Panel (Panel).
The second letter provided notification that the Company no
longer complies with Nasdaqs compensation committee requirement,
as set forth in Listing Rule 5605(d)(2)(A). Nasdaq Listing Rule
5605(d)(2)(A) requires a listed company to have a compensation
committee comprised of at least two independent members. Chi-Ping
Hsu, a former independent director and member of the Companys
compensation committee, resigned from the board of directors
effective February 28, 2017. As a result, the number of
independent directors on the Companys compensation committee was
reduced from two to one. The second letter also states that the
Company will be provided: (i) until the earlier of the Companys
next annual shareholders meeting or February 28, 2018 or (ii) if
the next annual shareholders meeting is held before August 28,
2017, then the Company must evidence compliance no later than
August 28, 2017. If the Company does not regain compliance during
this period, then the Staff will provide notice that the Companys
securities will be subject to delisting. At such time, the
Company may appeal the delisting determination to a Panel. The
Company would remain listed pending the Panels decision. There
can be no assurance that, if the Company does appeal a subsequent
delisting determination by the Staff to the Panel, that such
appeal would be successful.
The third letter provided notification that the Company no longer
complies with Nasdaqs independent director requirement, as set
forth in Listing Rule 5605(b)(1). Nasdaq Listing Rule 5605(b)(1)
requires a majority of the board of directors of a listed company
to be comprised of independent directors, as defined in Rule
5605(b)(1). As a result of Tommy Engs resignation from the
Companys board of directors effective April 1, 2017, the Companys
board of directors is no longer comprised of a majority of
independent directors. The third letter also states that the
Company will be provided: (i) until the earlier of the Companys
next annual shareholders meeting or April 2, 2018 or (ii) if the
next annual shareholders meeting is held before September 28,
2017, then the Company must evidence compliance no later than
September 28, 2017. If the Company does not regain compliance
during this period, then the Staff will provide notice that the
Companys securities will be subject to delisting. At such time,
the Company may appeal the delisting determination to a Panel.
The Company would remain listed pending the Panels decision.
There can be no assurance that, if the Company does appeal a
subsequent delisting determination by the Staff to the Panel,
that such appeal would be successful.
These notifications have no immediate effect on the listing or
trading of the Companys common stock, which will continue to
trade on The Nasdaq Capital Market under the symbol MOSY.
Item 5.02. Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
On April 10, 2017, Thomas Riordan notified the Company of his
resignation, effective April 10, 2017, as the Companys Chief
Operating Officer and Executive Vice President.
Item 8.01. Other Events.
Director Resignation
Effective as of April 1, 2017, Tommy Eng resigned from his
position as a member of the board of directors of the Company and
from all committees of the Companys board of directors citing
personal reasons. As a result of Mr. Engs departure, the audit
committee of the Companys board of directors has two vacancies,
which the Company will endeavor to fill by its 2017 annual
meeting.
Other
On April 12, 2017, the Company issued a press release announcing
a revision of its operating plan. A copy of the press release is
furnished as Exhibit 99.1 hereto.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description |
| 99.1 | Press Release by MoSys, Inc. dated April 12, 2017. |
About MOSYS, INC. (NASDAQ:MOSY)
MoSys, Inc. (MoSys), together with its subsidiaries, is a fabless semiconductor company focused on the development and sale of integrated circuits (ICs) for the high-speed networking, communications, storage and computing markets. The Company has developed approximately two IC product lines under the Bandwidth Engine and LineSpeed product names. Bandwidth Engine ICs integrate its 1T-SRAM high-density embedded memory with its integrated macro function technology and a serial interface protocol resulting in a monolithic memory IC solution optimized for transaction performance. The LineSpeed IC product line consists of non-memory, high-speed serialization-deserialization (SerDes), input/output (I/O) physical layer (PHY) devices with clock data recovery, gearbox and retimer functionality, which convert lanes of data received on line cards or by optical modules into various configurations and/or ensure signal integrity. MOSYS, INC. (NASDAQ:MOSY) Recent Trading Information
MOSYS, INC. (NASDAQ:MOSY) closed its last trading session down -0.04 at 1.94 with 22,934 shares trading hands.