MOSYS, INC. (NASDAQ:MOSY) Files An 8-K Results of Operations and Financial Condition

MOSYS, INC. (NASDAQ:MOSY) Files An 8-K Results of Operations and Financial Condition

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Item 2.02. Results of Operations and Financial Condition.

On March 29, 2017, MoSys, Inc., or the Company, issued a press
release announcing its financial results for the three and twelve
months ended December 31, 2016. A copy of this press release is
furnished as Exhibit 99.1 to this report. The press release
should be read in conjunction with the statements regarding
forward-looking statements, which are included in the text of the
release.

In addition to disclosing financial results calculated in
accordance with U.S. generally accepted accounting principles
(GAAP), management also presents information regarding the
Companys performance over comparable periods based on gross
margin, operating expenses (research and development and sales,
general and administrative), operating loss, net loss and net
loss per share, exclusive of stock-based compensation,
restructuring and impairment charges, and amortization of
intangibles. Because management discloses financial measures
calculated without taking into account these items, these
financial measures are characterized as “non-GAAP financial
measures” under Securities and Exchange Commission rules.

Stock-based compensation charges represent non-cash charges
related to equity awards granted by the Company. Although these
are recurring charges to the Companys operations, management
believes the measurement of these amounts can vary considerably
from period to period and depend substantially on factors that
are not a direct consequence of operating performance that is
within managements control. Thus, management believes that
excluding these charges facilitates comparisons of the Companys
operational performance in different periods, as well as with
similarly determined non-GAAP financial measures of comparable
companies.

Amortization of intangible assets results from the value recorded
for a license the Company retained to patents sold in 2011. The
amortization does not represent operating expenses ordinarily
incurred by the Company with respect to its primary business
activities of selling integrated circuits. Thus, these charges
are excluded from the Companys non-GAAP financial measures to
provide another basis for evaluating and comparing the Companys
performance for the three and twelve months ended December 31,
2016.

In the first quarter of 2016, the Company effected a reduction in
workforce and associated operating expenses, net loss and cash
burn and to realign resources, as the Company had substantially
concluded development of new products, including its third
generation Bandwidth Engine IC product family, and has brought
these products to market in 2016. Substantially all of these
restructuring charges were paid in the first quarter of 2016.

As of December 31, 2016, the Company concluded a triggering event
had occurred due to the Companys reduced market capitalization,
lower than forecasted earnings in 2016 and declines in future
projections and assumptions. The Company performed an interim
step one assessment to identify any possible goodwill impairment.
The first step of the impairment test indicated the goodwill
carrying value was greater than the Companys market value. The
Company performed step two of the impairment test and determined
that the goodwill was partially impaired. As a result, a non-cash
impairment charge of approximately $9.9M was recorded during the
three months ended December 31, 2016. The impairment charge has
been presented within the consolidated statement of operations
and comprehensive loss.

Management and the Companys board of directors will continue to
analyze the historical consolidated results of operations and
comprehensive loss (revenue, gross margin, research and
development expenses, selling, general and administrative
expenses, operating loss, net loss and net loss per share),
excluding stock-based compensation, charges for amortization of
intangibles and restructuring and impairment charges described
above, to assess the business and compare operating results to
the Company’s performance objectives. For example, the
Company’s budgeting and planning process utilizes these non-GAAP
financial measures, along with other types of financial
information.

The Company discloses these non-GAAP financial measures to the
public as an additional means by which investors can assess the
Company’s performance and to identify the Company’s operating
results for investors on the same basis applied by management.
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. The Company
has furnished reconciliations of the non-GAAP financial measures
to the most directly comparable GAAP financial measures in the
press release furnished as Exhibit 99.1.

Moreover, although these non-GAAP financial measures adjust
expense, they should not be viewed as a pro-forma presentation
reflecting the elimination of the underlying share-based
compensation programs, which are an important element of the
Company’s compensation structure. GAAP requires that all forms
of share-based payments should be valued and included, as
appropriate, in results of operations. Management believes these
expenses are a material part of the Company’s operating results.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.

Description

99.1

Press Release by MoSys, Inc. dated March 29, 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 00.00 at 2.45 with 84,344 shares trading hands.

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