What changed in this filing

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Item 1. Financial Statements

2021-06-08 compared with 2020-12-09 · 136 added, 193 removed, 464 unchanged (41% of the section changed)

29 unchanged sentences

Preference shares, $ 0.00045 par value per share, 20,000,000 shares

authorized and no shares issued and outstanding at October 31, 2020 and

authorized and no shares issued and outstanding at April 30, 2021 and

January 31, 2021, respectively

Ordinary shares, $ 0.00045 par value per share, 200,000,000 shares

authorized at October 31, 2020 and January 31, 2020, respectively;

35,072,089 shares issued and outstanding at October 31, 2020;

authorized at April 30, 2021 and January 31, 2021, respectively;

36,273,343 shares issued and outstanding at April 30, 2021;

shares issued and outstanding at January 31, 2021

8 unchanged sentences

(in thousands, except share and per share data)

Three Months Ended October 31,

Nine Months Ended October 31,

Three Months Ended April 30,

Cost of revenue

6 unchanged sentences

Loss before income taxes

Provision (benefit) for income taxes

Provision for income taxes

Net loss per share attributable to ordinary shareholders:

4 unchanged sentences

(unaudited, in thousands)

Three Months Ended October 31,

Nine Months Ended October 31,

Other comprehensive income (loss), net of tax:

Net unrealized gains (losses) on investments

Other comprehensive income (loss), net of tax

Three Months Ended April 30,

Other comprehensive loss, net of tax:

Net unrealized losses on investments

Other comprehensive loss, net of tax

Comprehensive loss

8 unchanged sentences

Issuance of shares through employee stock purchase plan

Stock repurchase

Stock-based compensation expense related to stock awards granted to employees and consultants

1 unchanged sentence

Balance--April 30, 2021

Issuance of shares through employee equity incentive plan

Stock-based compensation expense related to stock awards granted to employees and consultants

Net unrealized gains on investments - net of tax

Balance--July 31, 2020

Issuance of shares through employee equity incentive plan

Issuance of shares through employee stock purchase plan

Stock-based compensation expense related to stock awards granted to employees and consultants

Net unrealized losses on investments - net of tax

Balance--October 31, 2020

Ordinary Shares

3 unchanged sentences

Issuance of shares through employee stock purchase plan

Stock repurchase

Stock-based compensation expense related to stock awards granted to employees and consultants

Net unrealized gains on investments - net of tax

Net unrealized losses on investments - net of tax

Balance--April 30, 2020

Issuance of shares through employee equity incentive plan

Stock-based compensation expense related to stock awards granted to employees and consultants

Net unrealized gains on investments - net of tax

Balance--July 31, 2019

Issuance of shares through employee equity incentive plan

Issuance of shares through employee stock purchase plan

Stock-based compensation expense related to stock awards granted to employees and consultants

Net unrealized gains on investments - net of tax

Balance--October 31, 2019

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(unaudited, in thousands)

Nine Months Ended October 31,

Three Months Ended April 30,

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization

6 unchanged sentences

Prepaid expenses and other current assets

Other non-current assets

Accounts payable

2 unchanged sentences

Deferred revenue

Lease Liabilities

Operating lease liabilities

Other long-term liabilities

Net cash provided by operating activities

Net cash provided by (used in) operating activities

Cash flows from investing activities:

2 unchanged sentences

Maturities of investments

Purchase of property and equipment

Net cash provided by (used in) investing activities

Purchase of tangible and intangible assets

Net cash used in investing activities

Cash flows from financing activities:

1 unchanged sentence

Proceeds from exercise of stock options and employee stock purchase plan

Payment for intangible asset

Net cash provided by financing activities

Payment for intangible assets

Net cash provided by (used in) financing activities

Net increase (decrease) in cash, cash equivalents and restricted cash

4 unchanged sentences

Supplemental disclosure of noncash investing and financing activities:

Unpaid liabilities related to intangible and fixed assets additions

Unpaid liabilities related to tangible and intangible assets additions

See accompanying notes to condensed consolidated financial statements.

24 unchanged sentences

Actual results could differ from those estimates.

On an ongoing basis, management evaluates its estimates and assumptions, including those related to (i) the collectability of accounts receivable;

(ii) write down of excess and obsolete inventories;

(iii) intangible assets and goodwill;

(iv) the estimated useful lives of long-lived assets;

(v) impairment of long-lived assets and financial instruments;

(vi) warranty obligations;

(vii) the valuation of stock-based compensation awards and financial instruments;

(viii) the probability of performance objectives achievement;

(ix) the realization of tax assets and estimates of tax liabilities, including reserves for uncertain tax positions;

and (x) the recognition and disclosure of contingent liabilities.

On an ongoing basis, management evaluates its estimates and assumptions, including those related to (i) write down of excess and obsolete inventories;

(ii) the estimated useful lives of long-lived assets;

(iii) the valuation of stock-based compensation awards and financial instruments;

(iv) the probability of performance objectives achievement;

and (v) the realization of tax assets and estimates of tax liabilities, including reserves for uncertain tax positions.

These estimates and assumptions are based on historical experience and on various other factors which the Company believes to be reasonable under the circumstances.

2 unchanged sentences

Actual results could differ from these estimates under different assumptions or circumstances and such differences could be material.

The Company also assessed the impacts of COVID-19 on the above accounting matters as of October 3 1 , 2020 and through the date of this report.

The Company also assessed the impacts of COVID-19 on the above accounting matters as of April 30, 2021 and through the date of this report.

While it is difficult to quantify the impact of COVID-19 , the future magnitude and duration of COVID-19, as well as other associated factors, could r esult in material negative impacts to the Company’s condensed consolidated financial statements in future reporting periods .

3 unchanged sentences

A significant disruption in the operations of one or more of these contractors would impact the production of the Company’s products which could have a material adverse effect on its business, financial condition and results of operations.

A substantial portion of the Company’s revenue is derived from sales through one of its distributors, Wintech Microelectronics Co., Ltd., or Wintech, which serves as its non-exclusive sales representative in Asia other than Japan, and directly to one ODM customer, Chicony Electronics Co., Ltd., or Chicony.

A substantial portion of the Company’s revenue is derived from sales through one of its distributors, WT Microelectronics Co., Ltd., formerly Wintech Microelectronics Co., Ltd., or Wintech, which serves as its non-exclusive sales representative in Asia other than Japan, and directly to one ODM customer, Chicony Electronics Co., Ltd., or Chicony.

Termination of the relationships with these customers could result in a temporary or permanent loss of revenue.

8 unchanged sentences

The Company does not hold or issue financial instruments for trading purposes.

The Company performs ongoing credit evaluations of its customers and adjusts credit limits based upon payment history and customers’ credit worthiness.

The Company performs ongoing credit evaluation of its customers and adjusts credit limits based upon payment history and customers’ credit worthiness.

The Company regularly monitors collections and payments from its customers.

Financial Instruments

On February 1, 2020, the Company adopted Accounting Standards Update (ASU) No.

The Company adopted Accounting Standards Update (ASU) No.

2016-13, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, using the modified retrospective transition method.

Under this new guidance, the Company recognizes credit losses based on a forward-looking current expected credit losses (CECL) model instead of the previous incurred loss model for financial instruments, including accounts receivable.

Measurement of Credit Losses on Financial Instruments in fiscal year 2021.

As a result, the Company recognizes credit losses based on a forward-looking current expected credit losses (CECL) model, including accounts receivable.

The Company’s accounts receivable are recorded at invoiced amount less an allowance for any potentially uncollectible amounts.

3 unchanged sentences

The Company classifies these investments as “available-for-sale” (AFS) securities.

Instead of the previous "other than temporary" impairment model, the Company now estimates the expected losses whenever a security’s fair value is below its amortized cost basis.

The Company estimates the expected losses whenever a security’s fair value is below its amortized cost basis.

The expected loss is computed at an individual security level using the discounted cash flow method with the effective interest rate on the purchase date.

3 unchanged sentences

The non-credit-related portion of the loss is recognized in Accumulated other comprehensive income in the condensed consolidated balance sheets.

The cumulative effect adjustment upon the adoption on February 1, 2020 was immaterial.

The credit-related losses and associated allowance amount from the Company’s financial instruments were not material as of October 31, 2020, respectively.

The credit-related losses from the financial instruments were not material for the three months ended April 30, 2021 and 2020, respectively, and the associated allowance amounts were not material as of April 30, 2021 and January 31, 2021, respectively.

Restricted Cash

Amounts included in restricted cash represent those required to be set aside to secure certain transactions in a foreign entity.

As of both October 31, 2020 and January 31, 2020, restricted cash was immaterial.

As of April 30, 2021 and January 31, 2021, restricted cash was immaterial, respectively.

The following table presents cash, cash equivalents and restricted cash reported on the condensed consolidated balance sheets, and the sums are presented on the condensed consolidated statements of cash flows:

October 31, 2020

April 30, 2021

January 31, 2021

October 31, 2019

April 30, 2020

January 31, 2020

2 unchanged sentences

Restricted cash

Total as presented in the consolidated statements of cash flows

Total as presented in the condensed consolidated statements of cash flows

The Company records inventories at the lower of cost or net realizable value.

3 unchanged sentences

Once inventory is written down, a new accounting cost basis is established and, accordingly, any associated reserve is not released until the inventory is sold or scrapped.

There were no material inventory losses recognized for the three and nine months ended October 31, 2020 and 2019, respectively.

Noncancelable Internal-Use Software License

There were no material inventory losses recognized for the three months ended April 30, 2021 and 2020, respectively.

Software Licenses

The Company accounts for a noncancelable on premise internal-use software license as the acquisition of an intangible asset and the incurrence of a liability to the extent that all or a portion of the software licensing fees are not paid on or before the license acquisition date.

The intangible asset and related liability are recorded at net present value and interest expense is recorded over the payment term.

The Company expenses the cost of purchased software that is to be sold, leased or otherwise marketed as part of a product until the technological feasibility of the product has been established or where the software has an alternative future use.

Once the technological feasibility of the product, to be externally marketed, has been established or where the software has an alternative future use, the Company capitalizes the cost of purchased software until the associated product is available for general release to customers, at which point the capitalized cost is amortized on a product by product basis over the remaining estimated economic life of the product.

The Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases in fiscal year 2020.

7 unchanged sentences

The renewal options are included in the ROU and liability calculation if it is reasonably certain that the Company will exercise the option.

The Company's finance leases were immaterial as of October 31, 2020 and January 31, 2020, respectively.

The Company's finance leases were immaterial as of April 30, 2021 and January 31, 2021, respectively.

Revenue Recognition

The Company adopted ASC 606, Revenue from Contracts with Customers in fiscal year 2019.

As a result, the Company recognizes revenue when control of its goods and services is transferred to its customers.

In accordance with ASC 606, Revenue from Contracts with Customers, the Company recognizes revenue when control of its goods and services is transferred to its customers.

Revenue recognition is evaluated through the following five steps:

21 unchanged sentences

Because payments received do not correspond directly with the value of the Company’s performance to date, for fixed-price engineering services arrangements, revenue is recognized using the time-based straight line method, which best depicts the Company’s performance toward complete satisfaction of the performance obligation based on the nature of such professional services.

Revenues from engineering service agreements were not material for the three and nine months ended October 31, 2020 and 2019, respectively.

Revenues from engineering service agreements were not material for the three months ended April 30, 2021 and 2020, respectively.

Timing of revenue recognition may differ from the timing of invoicing to the Company’s customers.

1 unchanged sentence

The Company’s contract assets are primarily related to satisfied but unbilled performance obligations associated with its engineering service agreements at the reporting date.

As of October 31, 2020 and January 31, 2020, the contract assets for these unbilled receivables were not material.

As of April 30, 2021 and January 31, 2021, the contract assets for these unbilled receivables were not material.

The Company’s contract liabilities consist of deferred revenue.

1 unchanged sentence

This deferred revenue is expected to be recognized over the course of the contract when products are delivered for future pricing below the weighted average selling price of the contract.

For the three and nine months ended October 31, 2020 and 2019, the Company did not recognize any material revenue adjustment, respectively, related to performance obligations satisfied in prior periods released from this deferred revenue.

As of October 31, 2020 and January 31, 2020, the respective deferred revenues were not material.

Additionally, the transaction price allocated to unsatisfied, or partially unsatisfied, purchase orders for contracts that are greater than a year was not material as of October 31, 2020 and January 31, 2020, respectively.

For the three months ended April 30, 2021 and 2020, the Company did not recognize any material revenue adjustment, respectively, related to performance obligations satisfied in prior periods released from this deferred revenue.

As of April 30, 2021 and January 31, 2021, the respective deferred revenues were not material.

Additionally, the transaction price allocated to unsatisfied, or partially unsatisfied, purchase orders for contracts that are greater than a year was not material as of April 30, 2021 and January 31, 2021, respectively.

The Company also elects not to disclose the value of unsatisfied or partially unsatisfied performance obligations due to an original expected contract duration of one year or less and elects to exclude amounts collected from customers for all sales taxes from the transaction price .

3 unchanged sentences

Research and development costs are expensed as incurred and consist primarily of personnel costs, product development costs, which include engineering services, development software and hardware tools, license fees, costs of fabrication of masks for prototype products, other development materials costs, depreciation of equipment and tools and allocation of facility costs, net of any research and development grants.

As of October 31, 2020, there was approximately $ 1.3 million of grants recorded in prepaid expenses and other current assets and approximately $ 2.4 million of grants recorded in other non-current assets in the condensed consolidated balance sheets.

As of April 30, 2021, there was approximately $ 1.4 million of grants recorded in prepaid expenses and other current assets and approximately $ 1.6 million of grants recorded in other non-current assets in the condensed consolidated balance sheets.

The Company records income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in its financial statements or tax returns.

17 unchanged sentences

Diluted earnings (losses) per share is computed by dividing net income (loss) available to ordinary shareholders by the weighted-average number of ordinary shares outstanding during the period increased to include the number of additional ordinary shares that would have been outstanding if the potentially dilutive securities had been issued.

Potentially dilutive securities include outstanding stock options, shares to be purchased under the Company’s employee stock purchase plan, unvested restricted stock and restricted stock units.

Potentially dilutive securities include outstanding stock options, shares to be purchased under the Company’s employee stock purchase plan and unvested restricted stock units.

The dilutive effect of potentially dilutive securities is reflected in diluted earnings (losses) per share by application of the treasury stock method.

Comprehensive Income (Loss)

Comprehensive income (loss) includes unrealized gains or losses from available-for-sale securities that are excluded from net income (loss).

Comprehensive income (loss) includes unrealized gains or losses, net from available-for-sale securities that are excluded from net income (loss).

Recent Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes.

The amendments in this ASU simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740.

The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance.

The amendments are effective for public entities in fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

Early adoption is permitted.

The Company did not early adopt and believes the adoption of this new guidance will not have a material impact on its consolidated financial statements and disclosures.

In January 2020, the FASB issued ASU 2020-01 - Investments - Equity securities (Topic 321), Investments - Equity method and joint ventures (Topic 323), and Derivatives and hedging (Topic 815) - Clarifying the interactions between Topic 321, Topic 323, and Topic 815.

The amendments in this Update improve the accounting for certain equity securities upon the application or discontinuation of the equity method of accounting and clarify the scope considerations for forward contracts and purchased options on certain securities.

The amendments are effective for public entities in fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

Early adoption is permitted.

The Company did not early adopt and believes the adoption of this new guidance will not have a material impact on its consolidated financial statements and disclosures.

In October 2020, the FASB issued ASU 2020-08 – Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable Fees and Other Costs.

The amendments in this Update clarify that for each reporting period, to the extent that the amortized cost basis of an individual callable debt security exceeds the amount repayable by the issuer at the next call date, the excess (that is, the premium) shall be amortized to the next call date.

The amendments also clarify that securities within the amendments shall have explicit, noncontingent call options that are callable at fixed prices and on preset dates at prices less than the amortized cost basis of the security.

The amendments are effective for public entities in fiscal years beginning after December 15, 2020, including interim periods within those fiscal years .

The Company is required to appl y the new guidance on a prospective basis as of the beginning of the period of adoption for existing or newly purchased callable debit securities .

Early adoption is not permitted.

The Company is currently evaluating the impact of the adoption of this new guidance on its consolidated financial statements and disclosures .

In October 2020, the FASB issued ASU 2020-10 – Codification Improvements.

The amendments in this Update contain improvements to the Codification by including disclosure guidance in appropriate disclosure and ensuring that all guidance that requires or provides an option for an entity to provide information in the notes to financial statements is codified in the Disclosure Section of the Codification.

The amendments are effective for public entities in fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

Early adoption is permitted.

The Company did not early adopt and believes the adoption of this new guidance will not have a material impact on its consolidated financial statements and disclosures.

Financial Instruments and Fair Value

3 unchanged sentences

All of the investments are classified as available-for-sale securities and reported at fair value in the condensed consolidated balance sheets as follows:

As of October 31, 2020

As of April 30, 2021

Amortized Cost

19 unchanged sentences

Total cash equivalents and marketable debt securities

As of October 31, 2020, there were no debt securities with unrealized losses for more than twelve months.

October 31, 2020

As of April 30, 2021, there were no debt securities with unrealized losses for more than twelve months.

April 30, 2021

January 31, 2021

3 unchanged sentences

Total cash equivalents and marketable debt securities

The contractual maturities of the investments at October 31, 2020 and January 31, 2020 were as follows:

October 31, 2020

The contractual maturities of the investments at April 30, 2021 and January 31, 2021 were as follows:

April 30, 2021

January 31, 2021

3 unchanged sentences

Total cash equivalents and marketable debt securities

The unrealized losses on the available-for-sale securities were primarily caused by fluctuations in market value and interest rates as a result of the economic environment.

Upon adoption of ASU No.

The unrealized gains and losses on the available-for-sale securities were primarily caused by fluctuations in market value and interest rates as a result of the economic environment.

In accordance with ASU No.

2016-13, Financial Instruments-Credit Losses (Topic 326):

2 unchanged sentences

The non-credit-related portion of the loss is recognized in accumulated other comprehensive income in the condensed consolidated balance sheets.

The credit-related losses of the Company’s financial instruments were not material for the three and nine months ended October 31, 2020, respectively.

The credit-related losses were not material for the three months ended April 30, 2021, and 2020, respectively.

The following fair value hierarchy is applied for disclosure of the inputs used to measure fair value.

6 unchanged sentences

The fair value of the Company’s investments in other debt securities are obtained based on quoted prices for similar assets in active markets and are classified within Level 2.

The following tables present the fair value of the financial instruments measured on a recurring basis as of October 31, 2020 and January 31, 2020, respectively:

As of October 31, 2020

The following tables present the fair value of the financial instruments measured on a recurring basis as of April 30, 2021 and January 31, 2021, respectively:

As of April 30, 2021

(in thousands)

13 unchanged sentences

Total cash equivalents and marketable debt securities

Inventories at October 31, 2020 and January 31, 2020 consisted of the following:

October 31, 2020

Inventories at April 30, 2021 and January 31, 2021 consisted of the following:

April 30, 2021

January 31, 2021

3 unchanged sentences

Property and Equipment, Net

Depreciation expense was approximately $ 0.6 million and $ 0.7 million for the three months ended October 31, 2020 and 2019, respectively.

Depreciation expense was approximately $ 1.9 million and $ 2.1 million for the nine months ended October 31, 2020 and 2019, respectively.

Property and equipment at October 31, 2020 and January 31, 2020 consisted of the following:

October 31, 2020

Depreciation expense was approximately $ 0.6 million and $ 0.7 million for the three months ended April 30, 2021 and 2020, respectively.

Property and equipment at April 30, 2021 and January 31, 2021 consisted of the following:

April 30, 2021

January 31, 2021

8 unchanged sentences

Intangible Assets, Net

The intangible assets primarily consist of $ 4.1 million of in-process research and development (“IPR&D”) from the acquisition of VisLab S.r.l., or VisLab, in June 2015 and $ 13.3 million of noncancelable software licenses, net of amortization expense.

The intangible assets primarily consist of $ 4.1 million of in-process research and development (“IPR&D”) from the acquisition of VisLab S.r.l., or VisLab, in June 2015 and $ 13.2 million of software licenses, net of amortization expense.

Acquired IPR&D is capitalized at fair value and the amortization commences upon completion of the underlying projects.

Once research and development efforts are completed, the corresponding amount of IPR&D is reclassified as an amortizable purchased intangible asset and is amortized over its estimated useful life.

As of October 31, 2020, there was no IPR&D amortized.

As of April 30, 2021, there was no IPR&D amortized.

The Company will determine the project incorporating the VisLab IPR&D to be completed when a related chip begins mass production to address the level 3 and above advanced driving assistance systems markets.

The Company enters into certain internal-use noncancelable software license agreements with third parties from time-to-time.

The Company enters into certain software license agreements with third parties from time-to-time.

The software licenses consist of noncancelable on premise internal-use software and software with alternative use that is to be sold, leased or otherwise marketed as part of a product.

The licenses have been capitalized as intangible assets, and the corresponding future payments have been recorded as liabilities at net present value.

As of October 31, 2020, $ 5.8 million was recorded in accrued and other current liabilities and $ 7.2 million was recorded in other long-term liabilities in the condensed consolidated balance sheets.

The carrying amounts of intangible assets as of October 31, 2020 and January 31, 2020 were as follows :

As of October 31, 2020

As of April 30, 2021, $ 5.6 million was recorded in accrued and other current liabilities and $ 4.2 million was recorded in other long-term liabilities in the condensed consolidated balance sheets.

The carrying amounts of intangible assets as of April 30, 2021 and January 31, 2021 were as follows :

As of April 30, 2021

As of January 31, 2021

7 unchanged sentences

In-process research and development

Internal-use software licenses

Software licenses

Total acquired intangible assets

During the nine months ended October 31, 2020, there was approximately $ 10.1 million of fully amortized software licenses retired.

The amortization expense related to software licenses was approximately $ 1.7 million and $ 1.3 million for the three months ended October 31, 2020 and 2019, respectively.

The amortization expense related to software licenses was approximately $ 4.8 million and $ 3.9 million for the nine months ended October 31, 2020 and 2019, respectively.

The estimated future amortization expense of these software licenses as of October 31, 2020 is as follows:

October 31, 2020

The amortization expense related to the software licenses was approximately $ 1.5 million and $ 1.5 million for the three months ended April 30, 2021 and 2020, respectively.

The expected future amortization expense related to these software licenses as of April 30, 2021 is as follows:

April 30, 2021

(in thousands)

2 unchanged sentences

IPR&D is required to be tested for impairment at least annually in the fourth fiscal quarter or sooner whenever events or changes in circumstances indicate that the assets may be impaired.

There were no intangible asset impairments for the three and nine months ended October 31, 2020 and 2019, respectively.

There were no intangible asset impairments for the three months ended April 30, 2021 and 2020, respectively.

Accrued and Other Current Liabilities

Accrued and other current liabilities at October 31, 2020 and January 31, 2020 consisted of the following:

October 31, 2020

Accrued and other current liabilities at April 30, 2021 and January 31, 2021 consisted of the following:

April 30, 2021

January 31, 2021

6 unchanged sentences

Total accrued and other current liabilities

The timing of SoC development progress and payments to outside foundries resulted in fluctuation of the accrued product development costs.

The decrease in employee compensation liabilities was primarily due to $ 6.7 million of annual bonus paid in March 2021, of which $ 2.1 million was paid in cash and $ 4.6 million was settled with restricted stock units.

The Company has entered into various operating leases for its worldwide office facilities.

The operating lease expense was approximately $ 0.8 million and $ 0.7 million for the three months ended October 31, 2020 and 2019, respectively.

The operating lease expense was approximately $ 2.2 million and $ 2.2 million for the nine months ended October 31, 2020 and 2019, respectively.

The Company's short-term leases and finance leases were not material as of October 31, 2020 and January 31, 2020, respectively .

During the three months ended April 30, 2021, the Company extended its Shanghai office lease for an additional three years beginning December 1, 2021 to November 30, 2024 .

The Company accounted for this extension as a lease modification and recorded an increase to the operating lease right-of-use assets and corresponding operating lease liabilities of approximately $ 1.7 million, respectively, in the condensed consolidated balance sheets.

The Company also signed a separate lease for additional space for its Shanghai office for a period of 40 months starting from August 1, 2021 through November 30, 2024 and will record an operating lease right-of-use asset and corresponding operating lease liability in the condensed consolidated balance sheets upon commencement on August 1, 2021.

T he total estimated future undiscounted cash payments for this additional lease are approximately $ 1.7 million.

The operating lease expense was approximately $ 0.8 million and $ 0.7 million for the three months ended April 30, 2021 and 2020, respectively.

The Company's short-term leases and finance leases were not material as of April 30, 2021 and January 31, 2021, respectively .

Supplemental cash flow information related to leases is as follows:

Three Months Ended

Nine Months Ended

October 31, 2020

April 30, 2021

(in thousands)

1 unchanged sentence

Supplemental non-cash information related to lease liabilities arising from obtaining right-of-use assets

As of October 31, 2020, the weighted average remaining lease term is 4.41 years, and the weighted average discount rate is 4.43 percent.

Leased assets obtained in exchange for operating lease liabilities arising from lease modifications

As of April 30, 2021, the weighted average remaining lease term is 4.20 years, and the weighted average discount rate is 3.82 percent.

Future minimum lease payments for the lease liabilities are as follows :

October 31, 2020

April 30, 2021

(in thousands)

3 unchanged sentences

Other Long-Term Liabilities

Other long-term liabilities at October 31, 2020 and January 31, 2020 consisted of the following:

October 31, 2020

Other long-term liabilities at April 30, 2021 and January 31, 2021 consisted of the following:

April 30, 2021

January 31, 2021

8 unchanged sentences

After completion of the Company’s initial public offering in 2012, a total of 20,000,000 preference shares, with a $ 0.00045 par value per share, were authorized.

There were no preference shares issued and outstanding as of October 31, 2020 and January 31, 2020, respectively.

There were no preference shares issued and outstanding as of April 30, 2021 and January 31, 2021, respectively.

Ordinary shares

As of October 31, 2020 and January 31, 2020, a total of 200,000,000 ordinary shares were authorized.

On February 1, 2020, the Company added 1,521,252 ordinary shares to the ordinary shares reserved for issuance, pursuant to an “evergreen” provision contained in the 2012 Equity Incentive Plan, or EIP.

As of April 30, 2021 and January 31, 2021, a total of 200,000,000 ordinary shares were authorized.

For the three months ended April 30, 2021, the Company added 1,599,634 ordinary shares to the ordinary shares reserved for issuance, pursuant to an “evergreen” provision contained in the 2012 Equity Incentive Plan, or EIP.

Pursuant to such provision, for each fiscal year, the number of ordinary shares reserved for issuance under the EIP is automatically increased by a number equal to the lesser of (i) 3,500,000 ordinary shares, (ii) four and one half percent ( 4.5 %) of the aggregate number of ordinary shares outstanding on January 31st of the preceding fiscal year, or (iii) a lesser number of shares that may be determined by the Company’s Board of Directors.

On February 1, 2020, the Company added 422,570 ordinary shares to the ordinary shares reserved for issuance, pursuant to an “evergreen” provision contained in the Amended and Restated 2012 Employee Stock Purchase Plan, or ESPP.

For the three months ended April 30, 2021, the Company added 444,343 ordinary shares to the ordinary shares reserved for issuance, pursuant to an “evergreen” provision contained in the Amended and Restated 2012 Employee Stock Purchase Plan, or ESPP.

Pursuant to such provision, for each fiscal year, the number of ordinary shares reserved for issuance under the ESPP is automatically increased by a number equal to the lesser of (i) 1,500,000 ordinary shares, (ii) one and one quarter percent ( 1.25 %) of the aggregate number of ordinary shares outstanding on such date, or (iii) an amount determined by the Company’s Board of Directors or a duly authorized committee of the Board of Directors.

As of October 31, 2020 and January 31, 2020, the following ordinary shares were reserved for future issuance under the EIP and ESPP:

October 31, 2020

As of April 30, 2021 and January 31, 2021, the following ordinary shares were reserved for future issuance under the EIP and ESPP:

April 30, 2021

January 31, 2021

6 unchanged sentences

On May 29, 2020, the Board approved an extension of this program for an additional twelve months ending June 30, 2021 .

Since the inception of the Company’s repurchase programs in June 2016 , a total of $ 275.0 million has been authorized, and a total of 4,011,595 shares have been repurchased for approximately $ 175.8 million in cash.

There were no ordinary shares repurchased in the three months ended April 30, 2021.

Repurchases may be made from time-to-time through open market purchases, 10b5-1 plans or privately negotiated transactions subject to market conditions, applicable legal requirements and other relevant factors.

1 unchanged sentence

The repurchase program is funded using the Company’s working capital and any repurchased shares are recorded as authorized but unissued shares.

As of October 31, 2020, there was approximately $ 49.0 million available for repurchases under the repurchase program through June 30, 2021.

As of April 30, 2021, there was approximately $ 49.0 million available for repurchases under the repurchase program through June 30, 2021.

Stock-based Compensation

The following table presents the classification of stock-based compensation for the periods indicated:

Three Months Ended October 31,

Nine Months Ended October 31,

Three Months Ended April 30,

(in thousands)

4 unchanged sentences

Total stock-based compensation

During the three and nine months ended October 31, 2020, approximately $ 1.9 million and $ 2.8 million of stock-based compensation expense was accrued in the accrued and other current liabilities in the condensed consolidated balance sheets, respectively.

As of October 31, 2020, total unrecognized compensation cost related to unvested stock options was $ 3.1 million and is expected to be recognized over a weighted-average period of 2.37 years.

During the three months ended April 30, 2021, approximately $ 1.7 million of stock-based compensation expense was accrued in accrued and other current liabilities in the condensed consolidated balance sheets.

As of April 30, 2021, total unrecognized compensation cost related to unvested stock options was $ 3.3 million and is expected to be recognized over a weighted-average period of 2.41 years.

Total unrecognized compensation cost related to unvested restricted stock units was $ 139.2 million and is expected to be recognized over a weighted-average period of 2.31 years.

The following table sets forth the weighted-average assumptions used to estimate the fair value of stock options and employee stock purchase plan awards for the periods indicated:

Three Months Ended October 31,

Nine Months Ended October 31,

Three Months Ended April 30,

Stock Options:

13 unchanged sentences

Outstanding at January 31, 2021

Outstanding at October 31, 2020

Exercisable at October 31, 2020

Outstanding at April 30, 2021

Exercisable at April 30, 2021

The intrinsic value of options outstanding and exercisable is calculated based on the difference between the fair market value of the Company’s ordinary shares on the reporting date and the exercise price.

The closing price of the Company’s ordinary shares on October 31, 2020 was $ 54.67 , as reported by The NASDAQ Global Market.

The closing price of the Company’s ordinary shares on April 30, 2021 was $ 97.49 , as reported by The NASDAQ Global Market.

The intrinsic value of exercised options is calculated based on the difference between the fair market value of the Company’s ordinary shares on the exercise date and the exercise price.

1 unchanged sentence

Unvested at January 31, 2021

Unvested at October 31, 2020

As of October 31, 2020, the aggregate intrinsic value of unvested restricted stock units was $ 168.8 million.

Unvested at April 30, 2021

As of April 30, 2021, the aggregate intrinsic value of unvested restricted stock units was $ 255.4 million.

Net Loss Per Ordinary Share

The following table sets forth the computation of basic and diluted loss per ordinary share for the periods indicated:

Three Months Ended October 31,

Nine Months Ended October 31,

Three Months Ended April 30,

(in thousands, except share and per share data)

3 unchanged sentences

The following weighted-average potentially dilutive securities were excluded from the computation of diluted loss per ordinary share as their effect would have been antidilutive:

Three Months Ended October 31,

Nine Months Ended October 31,

Three Months Ended April 30,

Options to purchase ordinary shares

Restricted stock and restricted stock units

Restricted stock units

Employee stock purchase plan

The following table provides details of income taxes for the periods indicated:

Three Months Ended October 31,

Nine Months Ended October 31,

Three Months Ended April 30,

(in thousands)

Loss before income taxes

Provision (benefit) for income taxes

Provision for income taxes

Effective tax rate

The income tax expense increased for the three and nine months ended October 31, 2020, as compared to the same periods in the prior fiscal year, primarily due to a decrease in the proportion of profits generated in lower tax jurisdictions as well as an increase in non-deductible stock-based compensation.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), P.L.

116-136, was passed into law, amending portions of certain relevant US tax laws.

The CARES Act includes a number of federal income tax law changes, including, but not limited to:

1) permitting net operating loss carrybacks to offset 100% of taxable income for taxable years beginning before 2021, 2) accelerating alternative minimum tax credit refunds, 3) temporarily increasing the allowable business interest deduction from 30% to 50% of adjusted taxable income, and 4) providing a technical correction for depreciation related to qualified improvement property.

The CARES Act also provides for an Employee Retention Credit, a fully refundable payroll tax credit for certain eligible employers, and the ability for all eligible employers to defer payment of the employer share of payroll taxes owed on wages paid for the period ending December 31, 2020.

The Company has preliminarily evaluated the impact of the CARES Act and does not expect it will have a material impact on the Company’s condensed consolidated financial statements.

The Company recorded an income tax provision of $ 1.3 million and $ 1.1 million for the three months ended April 30, 2021 and 2020, respectively.

The increase in income tax expense was primarily due to a decrease in the proportion of profits generated in lower tax jurisdictions, partially offset by a $ 3.4 million increase in the U.S.

federal research tax credit as well as an increase in tax benefits from excess stock-based compensation deductions.

The Company files federal and state income tax returns in the United States and in various foreign jurisdictions.

9 unchanged sentences

These assessments can require considerable estimates and judgments.

As of October 31, 2020, the gross amount of unrecognized tax benefits decreased by $ 16.1 million to $ 27.0 million.

The decrease was primarily due to changes to our uncertain tax positions from adjustments arising from tax return filings.

As of April 30, 2021, the gross amount of unrecognized tax benefits was approximately $ 27.8 million.

If the estimates of income tax liabilities prove to be less than the ultimate assessment, then a further charge to expense could be required.

1 unchanged sentence

The Company does not anticipate significant changes to its uncertain tax positions during the next twelve months.

On July 27, 2015, the United States Tax Court issued a decision (“Tax Court Decision”) in Altera Corp.

Commissioner , which concluded that related parties in a cost sharing arrangement are not required to share expenses related to share-based compensation.

The Tax Court Decision was appealed by the Commissioner to the Ninth Circuit Court of Appeals (“Ninth Circuit”).

On June 7, 2019, the Ninth Circuit issued an opinion that reversed the Tax Court Decision.

On July 22, 2019, the taxpayer requested a rehearing before the full Ninth Circuit and the request was denied on November 12, 2019.

On February 10, 2020, the taxpayer filed a petition to appeal the decision with the Supreme Court of the United States which was denied on June 22, 2020.

The denial of the request by the Supreme Court did not have a material impact to the Company’s provision for income taxes.

Commitments and Contingencies

3 unchanged sentences

The Company regularly issues purchase orders to independent contract manufacturers which are cancelable upon agreement between the Company and the third-party manufacturers.

As of October 31, 2020 and January 31, 2020, total manufacturing purchase commitments were approximately $ 37.1 million and $ 35.9 million, respectively.

These purchase orders typically provide the Company with flexibility to cancel, reschedule or adjust requirements based upon business needs but the Company may incur certain costs depending on the production stage of the products.

As of April 30, 2021 and January 31, 2021, total manufacturing purchase commitments were approximately $ 67.6 million and $ 48.2 million, respectively.

The Company also reviews and assesses the need for any expected loss liabilities on quarterly basis for all products that it does not expect to sell for which it has committed purchases from suppliers.

As of April 30, 2021, there was no material loss recognized in the condensed consolidated balance sheets from adverse purchase commitments.

Indemnification

3 unchanged sentences

It is not possible to determine the maximum potential amount of liability under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances that are likely to be involved in each particular claim.

The Company has no t made payments under these obligations, and no liabilities have been recorded for these obligations in the condensed consolidated balance sheets as of October 31, 2020 and January 31, 2020, respectively.

The Company has no t made payments under these obligations, and no liabilities have been recorded for these obligations in the condensed consolidated balance sheets as of April 30, 2021 and January 31, 2021, respectively.

Segment Reporting

4 unchanged sentences

The following table sets forth the Company’s revenue by geographic region based on bill-to location for the periods indicated:

Three Months Ended October 31,

Nine Months Ended October 31,

Three Months Ended April 30,

(in thousands)

2 unchanged sentences

Total revenue

As of October 31, 2020, substantially all of the Company’s property and equipment, net, was located in the United States, Asia Pacific region and Europe with approximate net amounts of $ 1.6 million, $ 2.5 million and $ 1.0 million, respectively.

As of April 30, 2021, substantially all of the Company’s property and equipment, net, was located in the United States, Asia Pacific region and Europe with approximate net amounts of $ 2.4 million, $ 2.4 million and $ 1.5 million, respectively.

Major Customers

The customers representing 10% or more of revenue and accounts receivable were Wintech and Chicony, which accounted for approximately 62.3 % and 17.6 % of total revenue for the three months ended October 31, 2020, respectively, and accounted for approximately 60.4 % and 17.4 % of total revenue for the nine months ended October 31, 2020, respectively.

The customers representing 10% or more of revenue and accounts receivable in fiscal year 2020 were Wintech and Chicony, which accounted for approximately 63.2 % and 15.7 % of total revenue for the three months ended October 31, 2019, respectively, and accounted for approximately 59.2 % and 17.8 % of total revenue for the nine months ended October 31, 2019, respectively.

Accounts receivable with Wintech and Chicony were approximately $ 11.2 million and $ 9.9 million as of October 31, 2020, respectively.

The customers representing 10% or more of revenue and accounts receivable were Wintech and Chicony, which accounted for approximately 63 % and 16 % of total revenue for the three months ended April 30, 2021, respectively.

For the three months ended April 30, 2020, the customers representing 10% or more of revenue and accounts receivable were Wintech and Chicony, which accounted for approximately 63 % and 15 % of total revenue, respectively.

Accounts receivable with Wintech and Chicony were approximately $ 17.0 million and $ 11.3 million as of April 30, 2021, respectively.

Subsequent Events

On May 29, 2019 , the Company’s Board of Directors authorized a program to repurchase up to $ 50.0 million of the Company’s ordinary shares through June 30, 2020 .

On May 29, 2020, the Board approved an extension of this program for an additional twelve months ending June 30, 2021.

On May 25, 2021, the Board extended the repurchase program for another 12 months through June 30, 2022 .

The repurchase program does not obligate the Company to acquire any particular amount of ordinary shares, and it may be suspended at any time at the Company’s discretion.

As of June 7, 2021, there was approximately $ 49.0 million available for repurchases under the repurchase program through June 30, 2022.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements