GSI TECHNOLOGY INC 10-Q

Item 1. Financial Statements ​ GSI TECHNOLOGY, INC. ​ CONDENSED CONSOLIDATED BALANCE SHEET S ​ (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ March 31, ​ ​ ​ 2020 2020 ​ ​ (In thousands, except share and per share amounts) ​ ASSETS ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents $ 44,022 $ 51,506 ​ Short-term investments ​ 12,067 ​ 15,061 ​ Accounts receivable, net ​ 4,282 ​ 6,330 ​ Inventories ​ 4,273 ​ 4,282 ​ Prepaid expenses and other current assets ​ 1,655 ​ 1,934 ​ Total current assets ​ 66,299 ​ 79,113 ​ Property and equipment, net ​ 7,632 ​ 8,119 ​ Operating lease right-of-use assets ​ ​ 970 ​ ​ 617 ​ Long-term investments ​ 8,655 ​ 4,117 ​ Goodwill ​ ​ 7,978 ​ ​ 7,978 ​ Intangible assets, net ​ ​ 2,372 ​ ​ 2,489 ​ Other assets ​ 134 ​ 128 ​ Total assets $ 94,040 $ 102,561 ​ LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ ​ Accounts payable $ 1,292 $ 1,184 ​ Lease liabilities, current ​ ​ 534 ​ ​ 498 ​ Accrued expenses and other liabilities ​ 5,247 ​ 6,578 ​ Total current liabilities ​ 7,073 ​ 8,260 ​ Income taxes payable ​ 333 ​ 620 ​ Lease liabilities, non-current ​ ​ 463 ​ ​ 142 ​ Contingent consideration, non-current ​ ​ 3,948 ​ ​ 3,898 ​ Total liabilities ​ 11,817 ​ 12,920 ​ Commitments and contingencies (Note 9) ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity: ​ ​ ​ ​ ​ ​ ​ Preferred stock: $0.001 par value authorized: 5,000,000 shares; issued and outstanding: none ​ — ​ — ​ Common Stock: $0.001 par value authorized: 150,000,000 shares; issued and outstanding: 23,641,426 and 23,229,286 shares, respectively ​ 24 ​ 23 ​ Additional paid-in capital ​ 44,092 ​ 40,176 ​ Accumulated other comprehensive income ​ 43 ​ 71 ​ Retained earnings ​ 38,064 ​ 49,371 ​ Total stockholders’ equity ​ 82,223 ​ 89,641 ​ Total liabilities and stockholders’ equity $ 94,040 $ 102,561 ​ ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 2 Table of Contents ​ GSI TECHNOLOGY, INC. ​ CONDENSED CONSOLIDATED STATEMENTS OF OPERATION S ​ (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Six Months Ended September 30, ​ ​ ​ 2020 ​ 2019 ​ 2020 ​ 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In thousands, except per share amounts) ​ (In thousands, except per share amounts) ​ Net revenues $ 6,659 $ 11,740 $ 13,280 $ 24,759 ​ Cost of revenues ​ 3,547 ​ 5,172 ​ 7,118 ​ 9,948 ​ Gross profit ​ 3,112 ​ 6,568 ​ 6,162 ​ 14,811 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ 5,659 ​ ​ 5,833 ​ ​ 11,484 ​ ​ 11,428 ​ Selling, general and administrative ​ 2,606 ​ ​ 2,658 ​ ​ 5,526 ​ ​ 5,535 ​ Total operating expenses ​ 8,265 ​ 8,491 ​ 17,010 ​ 16,963 ​ Loss from operations ​ (5,153) ​ (1,923) ​ (10,848) ​ (2,152) ​ Interest income, net ​ 80 ​ ​ 215 ​ ​ 194 ​ ​ 420 ​ Other expense, net ​ (96) ​ ​ (5) ​ ​ (104) ​ ​ (63) ​ Loss before income taxes ​ (5,169) ​ (1,713) ​ (10,758) ​ (1,795) ​ Provision for income taxes ​ 62 ​ ​ 55 ​ ​ 549 ​ ​ 98 ​ Net loss $ (5,231) $ (1,768) $ (11,307) $ (1,893) ​ Net loss per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic $ (0.22) $ (0.08) $ (0.48) $ (0.08) ​ Diluted $ (0.22) $ (0.08) $ (0.48) $ (0.08) ​ Weighted average shares used in per share calculations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ 23,617 ​ 22,975 ​ ​ 23,529 ​ ​ 22,791 ​ Diluted ​ 23,617 ​ 22,975 ​ ​ 23,529 ​ ​ 22,791 ​ ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 3 Table of Contents ​ GSI TECHNOLOGY, INC. ​ CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS ​ (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Six Months Ended September 30, ​ ​ ​ 2020 ​ 2019 ​ 2020 ​ 2019 ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) ​ Net loss $ (5,231) $ (1,768) $ (11,307) $ (1,893) ​ Net unrealized gain (loss) on available-for-sale investments ​ (53) ​ 14 ​ (28) ​ 65 ​ Total comprehensive loss $ (5,284) $ (1,754) $ (11,335) $ (1,828) ​ ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 4 Table of Contents ​ GSI TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ Comprehensive ​ Retained ​ Stockholders' ​ Shares Amount Capital Income (Loss) Earnings Equity Three months ended September 30, 2020 ​ (In thousands, except share amounts) Balance, June 30, 2020 ​ 23,607,773 ​ $ 24 ​ $ 43,269 ​ $ 96 ​ $ 43,295 ​ $ 86,684 Issuance of common stock under employee stock option plans ​ 33,653 ​ ​ — ​ ​ 170 ​ ​ — ​ ​ — ​ ​ 170 Stock-based compensation expense ​ — ​ ​ — ​ ​ 653 ​ ​ — ​ ​ — ​ ​ 653 Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (5,231) ​ ​ (5,231) Net unrealized loss on available-for-sale investments ​ — ​ ​ — ​ ​ — ​ ​ (53) ​ ​ — ​ ​ (53) Balance, September 30, 2020 ​ 23,641,426 ​ $ 24 ​ $ 44,092 ​ $ 43 ​ $ 38,064 ​ $ 82,223 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended September 30, 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, June 30, 2019 ​ 22,898,188 ​ $ 23 ​ $ 36,462 ​ $ 14 ​ $ 59,583 ​ $ 96,082 Issuance of common stock under employee stock option plans ​ 154,285 ​ ​ — ​ ​ 799 ​ ​ — ​ ​ — ​ ​ 799 Stock-based compensation expense ​ — ​ ​ — ​ ​ 642 ​ ​ — ​ ​ — ​ ​ 642 Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (1,768) ​ ​ (1,768) Net unrealized gain on available-for-sale investments ​ — ​ ​ — ​ ​ — ​ ​ 14 ​ ​ — ​ ​ 14 Balance, September 30, 2019 ​ 23,052,473 ​ $ 23 ​ $ 37,903 ​ $ 28 ​ $ 57,815 ​ $ 95,769 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ Comprehensive ​ Retained ​ Stockholders' ​ Shares Amount Capital Income (Loss) Earnings Equity Six months ended September 30, 2020 ​ (In thousands, except share amounts) Balance, March 31, 2020 ​ 23,229,286 ​ $ 23 ​ $ 40,176 ​ $ 71 ​ $ 49,371 ​ $ 89,641 Issuance of common stock under employee stock option plans ​ 412,140 ​ ​ 1 ​ ​ 2,508 ​ ​ — ​ ​ — ​ ​ 2,509 Stock-based compensation expense ​ — ​ ​ — ​ ​ 1,408 ​ ​ — ​ ​ — ​ ​ 1,408 Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (11,307) ​ ​ (11,307) Net unrealized loss on available-for-sale investments ​ — ​ ​ — ​ ​ — ​ ​ (28) ​ ​ — ​ ​ (28) Balance, September 30, 2020 ​ 23,641,426 ​ $ 24 ​ $ 44,092 ​ $ 43 ​ $ 38,064 ​ $ 82,223 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six months ended September 30, 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, March 31, 2019 ​ 22,320,156 ​ $ 22 ​ $ 33,462 ​ $ (37) ​ $ 59,708 ​ $ 93,155 Issuance of common stock under employee stock option plans ​ 732,317 ​ ​ 1 ​ ​ 3,148 ​ ​ — ​ ​ — ​ ​ 3,149 Stock-based compensation expense ​ — ​ ​ — ​ ​ 1,293 ​ ​ — ​ ​ — ​ ​ 1,293 Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (1,893) ​ ​ (1,893) Net unrealized gain on available-for-sale investments ​ — ​ ​ — ​ ​ — ​ ​ 65 ​ ​ — ​ ​ 65 Balance, September 30, 2019 ​ 23,052,473 ​ $ 23 ​ $ 37,903 ​ $ 28 ​ $ 57,815 ​ $ 95,769 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 5 Table of Contents GSI TECHNOLOGY, INC. ​ CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW S ​ (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended September 30, ​ ​ ​ 2020 ​ 2019 ​ ​ (In thousands) ​ Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ Net loss $ (11,307) $ (1,893) ​ Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ ​ ​ ​ Allowance for doubtful accounts and other ​ (24) ​ (7) ​ Provision for excess and obsolete inventories ​ 230 ​ 136 ​ Non-cash lease expense ​ ​ 305 ​ ​ 315 ​ Depreciation and amortization ​ 707 ​ 727 ​ Stock-based compensation ​ 1,408 ​ 1,293 ​ Amortization of premium (discount) on investments ​ 17 ​ (14) ​ Changes in assets and liabilities: ​ ​ ​ ​ ​ ​ ​ Accounts receivable ​ 2,072 ​ (142) ​ Inventory ​ (221) ​ 504 ​ Prepaid expenses and other assets ​ 273 ​ (753) ​ Accounts payable ​ 108 ​ 60 ​ Accrued expenses and other liabilities ​ (1,863) ​ (1,352) ​ Net cash used in operating activities ​ (8,295) ​ (1,126) ​ Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ Purchase of investments ​ ​ (11,339) ​ ​ (8,810) ​ Maturities of short-term investments ​ 9,750 ​ ​ 10,110 ​ Purchases of property and equipment ​ (109) ​ ​ (94) ​ Net cash provided by (used in) investing activities ​ (1,698) ​ 1,206 ​ Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ Proceeds from issuance of common stock under employee stock plans ​ 2,509 ​ ​ 3,149 ​ Net cash provided by financing activities ​ 2,509 ​ 3,149 ​ Net increase (decrease) in cash and cash equivalents ​ (7,484) ​ 3,229 ​ Cash and cash equivalents at beginning of the period ​ 51,506 ​ ​ 42,495 ​ Cash and cash equivalents at end of the period $ 44,022 $ 45,724 ​ Non-cash investing and financing activities: ​ ​ ​ ​ ​ ​ ​ Purchases of property and equipment through accounts payable and accruals ​ $ 13 ​ $ 25 ​ Operating lease right-of-use assets exchanged for lease obligations ​ $ 658 ​ $ 1,228 ​ Supplemental cash flow information: ​ ​ ​ ​ ​ ​ ​ Net cash paid for income taxes $ 799 $ 218 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 6 Table of Contents ​ GSI TECHNOLOGY, INC. ​ NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ​ (Unaudited) ​ NOTE 1—THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ​ Basis of presentation ​ The accompanying unaudited condensed consolidated financial statements of GSI Technology, Inc. and its subsidiaries (“GSI” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission. Accordingly, the interim financial statements do not include all of the information and footnotes required by GAAP for annual financial statements. These interim financial statements contain all adjustments (which consist of only normal, recurring adjustments) that are, in the opinion of management, necessary to state fairly the interim financial information included therein. The Company believes that the disclosures are adequate to make the information not misleading. However, these financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2020. ​ The consolidated results of operations for the six months ended September 30, 2020 are not necessarily indicative of the results to be expected for the entire fiscal year. ​ Significant accounting policies ​ Except for the changes in disclosure requirements for recurring and nonrecurring fair value measurements and changes in goodwill impairment testing, which were updated as a result of adopting new accounting standards, there have been no material changes to our significant accounting policies that were disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2020. ​ Risk and uncertainties ​ On March 11, 2020, the World Health Organization announced that COVID-19, a respiratory illness caused by a novel coronavirus, is a pandemic. COVID-19 has spread to many of the countries in which the Company, its customers, suppliers and other business partners conduct business. Governments in affected regions have implemented, and may continue to implement, safety precautions which include quarantines, travel restrictions, business closures, cancellations of public gatherings and other measures as they deem necessary. Many organizations and individuals, including the Company and its employees, are taking additional steps to avoid or reduce infection, including limiting travel and working from home. These measures are disrupting normal business operations both in and outside of affected areas and have had significant negative impacts on businesses and financial markets worldwide. ​ The Company continues to monitor its operations and government recommendations and has made modifications to its normal operations because of the COVID-19 global pandemic. The Company has instituted many preventative measures and is regularly evaluating those measures and others as it continues to better understand its current and future operating environment. Except for the Company’s employees located in Taiwan, the majority of its employees are working from home around the world, and productivity remains high. The Company has maintained a substantial portion of its manufacturing operational capacity at its primary manufacturing support facility located in Hsin Chu, Taiwan where the Company’s suppliers are located and where all of the Company’s products are manufactured. Since the outbreak of COVID-19, aside from the lengthening of lead times for wafers and assembly services, the Company has experienced minimal impact on its manufacturing operations in Taiwan. Final testing of the Company’s products is conducted in house. Shipping and receiving operations are being maintained by a skeleton crew with minimal impact. The Company’s revenues have been and are expected to continue to be impacted by changes in customer buying patterns and communication limitations 7 Table of Contents related to shelter in place restrictions that require a significant number of its customer contacts to work from home. The Company’s results for the three month and six month periods ended September 30, 2020 demonstrate the challenges that the Company is facing during the COVID-19 global pandemic, which has restricted the activities of the Company’s sales force and distributors, reduced customer demand and caused the postponement of investment in certain customer sectors. These challenges are also impacting the Company as it enters new markets and engages with target customers. Industry conferences and on-site training workshops, which are typically used for building a sales pipeline, are unavailable due to COVID-19 related restrictions. The Company is adapting its sales strategies for the COVID-19 environment, where it cannot do face-to-face meetings and conduct secure meetings with government and defense customers, but the Company is still not operating at an optimal level. ​ The disruption to the marketplace resulting from the COVID-19 global pandemic that the Company continues to experience is unlike anything the Company has ever had to deal with. While the Company continues to monitor the business metrics that it has historically used to predict its financial performance, the Company is uncertain as to whether these metrics will operate consistently with its historical experience. ​ The Company believes that during the next 12 months the COVID-19 pandemic could impact general economic activity and demand in its end markets. Although the Company cannot estimate the length or gravity of the impact of the COVID-19 outbreak at this time, if the pandemic continues, it is expected to have an adverse effect on the Company’s results of operations, financial position, and liquidity during fiscal year 2021. This includes results from new information that may emerge concerning COVID-19 and any actions taken to contain or treat COVID-19, as well as the economic impact on local, regional, national and international customers and markets. The Company has made estimates of the impact of COVID-19 within its financial statements and there may be changes to those estimates in future periods. ​ Recent accounting pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” as part of its initiative to reduce complexity in the accounting standards. The standard eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also clarifies and simplifies other aspects of the accounting for income taxes. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted. The Company is currently evaluating the impact that this guidance will have upon its financial position and results of operations, if any . ​ In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” The standard amends the disclosure requirements for recurring and nonrecurring fair value measurements by removing, modifying, and adding certain disclosures. The Company adopted ASU No. 2018-13 in the quarter ended June 30, 2020. Implementation of this guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures. ​ In January 2017, the FASB issued ASU No. 2017-04, " Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." The standard eliminates the second step in the goodwill impairment test which requires an entity to determine the implied fair value of the reporting unit’s goodwill. Instead, an entity should recognize an impairment loss if the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, with the impairment loss not to exceed the amount of goodwill allocated to the reporting unit. The Company adopted ASU No. 2017-04 in the quarter ended June 30, 2020. Implementation of this guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, loans, and other financial instruments, the Company will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. 8 Table of Contents Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted beginning April 1, 2019. Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date. The Company is currently evaluating the impact of this standard on its consolidated financial statements. ​ ​ NOTE 2—REVENUE RECOGNITION The Company determines revenue recognition through the following steps: (1) identification of the contract with a customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, we satisfy a performance obligation. The majority of the Company’s customer contracts, which may be in the form of purchase orders, contracts or purchase agreements, contain performance obligations for delivery of agreed upon products. Delivery of all performance obligations contained within a contract with a customer typically occurs at the same time (or within the same accounting period). Transfer of control typically occurs at the time of shipment or at the time the product is pulled from consignment as that is the point at which delivery has occurred, title and the risks and rewards of ownership have passed to the customer, and the Company has a right to payment. Thus, the Company will generally recognize revenue upon shipment of the product. Because all of the Company’s performance obligations relate to contracts with a duration of less than one year, the Company has elected to apply the optional exemption practical expedient provided in ASC 606 and, therefore, is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. The Company adjusts the transaction price for variable consideration. Variable consideration is not typically significant and primarily results from stock rotation rights and quick pay discounts provided to certain distributors. As a practical expedient, the Company is recognizing the incremental costs of obtaining a contract, specifically commission expenses that have a period of benefit of less than twelve months, as an expense when incurred. Additionally, the Company has adopted an accounting policy to recognize shipping costs that occur after control transfers to the customer as a fulfillment activity. The Company’s contracts with customers do not typically include extended payment terms. Payment terms vary by contract type and type of customer and generally range from 30 to 60 days from shipment. Additionally, the Company has right to payment upon shipment. The Company records revenue net of sales tax, value added tax, excise tax and other taxes collected concurrent with product sales. The impact of such taxes on products sales is immaterial. The Company has also elected to recognize the cost for freight and shipping when control over the products sold passes to customers and revenue is recognized. The Company warrants its products to be free of defects generally for a period of three years. The Company estimates its warranty costs based on historical warranty claim experience and includes such costs in cost of revenues. Warranty costs and the accrued warranty liability were not material as of September 30, 2020. ​ The majority of the Company’s revenue is derived from sales of SRAM products which represent approximately 98% of total revenues in the six months ended September 30, 2020. Nokia, the Company’s largest customer, purchases products directly from the Company and through contract manufacturers and distributors. Based on information provided to the Company by its contract manufacturers and distributors, purchases by Nokia represented approximately 39% and 46% of the Company’s net revenues in the six months ended September 30, 2020 and 2019, respectively. 9 Table of Contents See “Note 12 — Segment and Geographic Information” for revenue by shipment destination. The following table presents the Company’s revenue disaggregated by customer type. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Six Months Ended September 30, ​ ​ ​ 2020 ​ 2019 ​ 2020 ​ 2019 ​ ​ (In thousands) ​ Contract manufacturers $ 3,685 $ 5,245 $ 5,853 $ 8,723 ​ Distribution ​ ​ 2,783 ​ ​ 5,487 ​ ​ 7,107 ​ ​ 14,743 ​ OEMs ​ ​ 191 ​ ​ 1,008 ​ ​ 320 ​ ​ 1,293 ​ ​ ​ $ 6,659 ​ $ 11,740 ​ $ 13,280 ​ $ 24,759 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NOTE 3—NET LOSS PER COMMON SHARE ​ The Company uses the treasury stock method to calculate the weighted average shares used in computing diluted net loss per share. The following table sets forth the computation of basic and diluted net loss per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Six Months Ended September 30, ​ ​ ​ 2020 ​ 2019 ​ 2020 ​ 2019 ​ ​ (In thousands, except per share amounts) ​ Net loss $ (5,231) $ (1,768) $ (11,307) $ (1,893) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominators: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares—Basic ​ 23,617 ​ ​ 22,975 ​ ​ 23,529 ​ ​ 22,791 ​ Dilutive effect of employee stock options ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ Dilutive effect of employee stock purchase plan options ​ — ​ ​ — ​ ​ — ​ ​ — ​ Weighted average shares—Dilutive ​ 23,617 ​ 22,975 ​ 23,529 ​ 22,791 ​ Net loss per common share—Basic $ (0.22) $ (0.08) $ (0.48) ​ $ (0.08) ​ Net loss per common share—Diluted $ (0.22) $ (0.08) $ (0.48) ​ $ (0.08) ​ ​ ​ The following shares of common stock underlying outstanding stock options, determined on a weighted average basis, were excluded from the computation of diluted net loss per share as they had an anti-dilutive effect: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Six Months Ended September 30, ​ ​ ​ 2020 ​ 2019 ​ 2020 ​ 2019 ​ ​ (In thousands) ​ Shares underlying options and ESPP shares 5,253 ​ 3,312 ​ 4,747 ​ 3,534 ​ ​ ​ ​ ​ 10 Table of Contents NOTE 4—BALANCE SHEET DETAIL ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 ​ March 31, 2020 ​ ​ (In thousands) ​ Inventories: ​ ​ ​ Work-in-progress $ 1,810 $ 1,650 ​ Finished goods ​ 2,440 ​ 2,612 ​ Inventory at distributors ​ 23 ​ 20 ​ ​ $ 4,273 $ 4,282 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 ​ March 31, 2020 ​ ​ (In thousands) ​ Accounts receivable, net: ​ ​ ​ ​ ​ ​ ​ Accounts receivable $ 4,342 $ 6,415 ​ Less: Allowances for doubtful accounts and other ​ (60) ​ (85) ​ ​ $ 4,282 $ 6,330 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 ​ March 31, 2020 ​ ​ (In thousands) ​ Prepaid expenses and other current assets: ​ ​ ​ ​ ​ ​ ​ Prepaid tooling and masks ​ $ 378 ​ $ 707 ​ Prepaid income taxes ​ ​ 64 ​ ​ 79 ​ Other receivables ​ ​ 197 ​ ​ 211 ​ Other prepaid expenses and other current assets ​ ​ 1,016 ​ ​ 937 ​ ​ ​ $ 1,655 ​ $ 1,934 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 ​ March 31, 2020 ​ ​ (In thousands) ​ Property and equipment, net: ​ ​ ​ ​ ​ ​ ​ Computer and other equipment ​ $ 18,273 ​ $ 18,191 ​ Software ​ ​ 4,097 ​ ​ 4,086 ​ Land ​ ​ 3,900 ​ ​ 3,900 ​ Building and building improvements ​ ​ 3,735 ​ ​ 3,735 ​ Furniture and fixtures ​ ​ 102 ​ ​ 102 ​ Leasehold improvements ​ ​ 878 ​ ​ 874 ​ ​ ​ ​ 30,985 ​ ​ 30,888 ​ Less: Accumulated depreciation ​ ​ (23,353) ​ ​ (22,769) ​ ​ ​ $ 7,632 ​ $ 8,119 ​ ​ Depreciation expense was $287,000 and $305,000 for the three months ended September 30, 2020 and 2019, respectively, and $590,000 and $611,000 for the six months ended September 30, 2020 and 2019, respectively. 11 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 ​ March 31, 2020 ​ ​ (In thousands) ​ Other assets: ​ ​ ​ ​ ​ ​ ​ Deposits ​ ​ 134 ​ ​ 128 ​ ​ ​ $ 134 ​ $ 128 ​ ​ The following tables summarize the components of intangible assets and related accumulated amortization balances at September 30, 2020 and March 31, 2020 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of September 30, 2020 ​ ​ Gross Carrying Amount Accumulated amortization Net Carrying Amount Intangible assets: ​ ​ ​ ​ ​ ​ ​ Product designs ​ $ 590 ​ $ (590) ​ $ — ​ Patents ​ ​ 4,220 ​ ​ (1,848) ​ ​ 2,372 ​ Software ​ ​ 80 ​ ​ (80) ​ ​ — ​ Total ​ $ 4,890 ​ $ (2,518) ​ $ 2,372 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of March 31, 2020 ​ ​ Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product designs ​ $ 590 ​ $ (590) ​ $ — ​ Patents ​ ​ 4,220 ​ ​ (1,731) ​ ​ 2,489 ​ Software ​ ​ 80 ​ ​ (80) ​ ​ — ​ Total ​ $ 4,890 ​ $ (2,401) ​ $ 2,489 ​ ​ ​ Amortization of intangible assets included in cost of revenues was $59,000 and $58,000 for the three months ended September 30, 2020 and 2019, respectively, and $117,000 and $116,000 for the six months ended September 30, 2020 and 2019, respectively. ​ As of September 30, 2020, the estimated future amortization expense of intangible assets in the table above is as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal year ending March 31, ​ ​ ​ ​ ​ ​ 2021 (Remaining six months) ​ $ 117 ​ ​ ​ 2022 ​ ​ 233 ​ ​ ​ ​ 2023 ​ ​ 233 ​ ​ ​ ​ 2024 ​ ​ 233 ​ ​ ​ ​ 2025 ​ ​ 233 ​ ​ ​ ​ Thereafter ​ ​ 1,323 ​ ​ ​ ​ Total ​ $ 2,372 ​ ​ ​ ​ ​ ​ 12 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 ​ March 31, 2020 ​ ​ (In thousands) ​ Accrued expenses and other liabilities: ​ ​ ​ ​ ​ ​ ​ Accrued compensation ​ $ 3,551 ​ $ 3,673 ​ Purchased intellectual property ​ ​ — ​ ​ 1,621 ​ Accrued commissions ​ ​ 216 ​ ​ 270 ​ Income taxes payable ​ ​ 190 ​ ​ 143 ​ Miscellaneous accrued expenses ​ ​ 1,290 ​ ​ 871 ​ ​ ​ $ 5,247 ​ $ 6,578 ​ ​ ​ ​ ​ ​ ​ ​ ​ NOTE 5—GOODWILL Goodwill represents the difference between the purchase price and the estimated fair value of the identifiable assets acquired and liabilities assumed in a business combination. The Company tests for goodwill impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset is more likely than not impaired. The Company has one reporting unit. The Company assesses goodwill for impairment on an annual basis on the last day of February in the fourth quarter of its fiscal year. The Company had a goodwill balance of $8.0 million as of both March 31, 2020 and September 30, 2020. The goodwill resulted from the acquisition of MikaMonu Group Ltd. in fiscal 2016. ​ The Company utilized a two-step quantitative analysis to complete its annual impairment test during the fourth quarter of fiscal 2020 and concluded that there was no impairment, as the fair value of its sole reporting unit exceeded its carrying value. The Company determined that the second step of the impairment test was not necessary. No triggering event took place subsequent to the fiscal 2020 annual assessment that necessitated a quantitative impairment analysis for the Company’s one reporting unit. ​ ​ ​ ​ NOTE 6—INCOME TAXES ​ The current portion of the Company’s unrecognized tax benefits was $0 at both September 30, 2020 and March 31, 2020. The long-term portion at September 30, 2020 and March 31, 2020 was $327,000 and $613,000, respectively, of which the timing of the resolution is uncertain. As of September 30, 2020, $2.8 million of unrecognized tax benefits had been recorded as a reduction to net deferred tax assets. As of September 30, 2020, the Company’s net deferred tax assets of $10.8 million were subject to a valuation allowance of $10.8 million. As of March 31, 2020, the Company’s net deferred tax assets of $9.4 million were subject to a valuation allowance of $9.4 million. ​ On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted. The CARES Act is an approximate $2 trillion emergency economic stimulus package passed in response to the COVID-19 global pandemic. The CARES Act contains numerous income tax provisions including changes to the net operating loss rules that the Company believes will not have a significant impact. Management believes that within the next twelve months the Company will not have a significant reduction in uncertain tax benefits, including interest and penalties, related to positions taken with respect to credits and loss carryforwards on previously filed tax returns. ​ The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the provision for income taxes in the Condensed Consolidated Statements of Operations. ​ The Company is subject to taxation in the United States and various state and foreign jurisdictions. Fiscal years 2013 through 2020 remain open to examination by federal tax authorities, and fiscal years 2012 through 2020 remain open to examination by California tax authorities. During the quarter ended June 30, 2020, the Company 13 Table of Contents settled an income tax audit in Israel for fiscal years 2016 through 2019 that resulted in a discrete tax provision of $479,000 and a tax liability of $713,000 as of June 30, 2020 that was paid in the quarter ended September 30, 2020. ​ The Company’s estimated annual effective income tax rate, including discrete items, was approximately (3.3%) and (2.3%) as of September 30, 2020 and 2019, respectively. The annual effective tax rates as of September 30, 2020 and 2019 vary from the United States statutory income tax rate primarily due to valuation allowances in the United States, whereby pre-tax losses do not result in the recognition of corresponding income tax benefits and expenses and the foreign tax differential. ​ NOTE 7—FINANCIAL INSTRUMENTS ​ Fair value measurements ​ Authoritative accounting guidance for fair value measurements provides a framework for measuring fair value and related disclosures. The guidance applies to all financial assets and financial liabilities that are measured on a recurring basis. The guidance requires fair value measurement to be classified and disclosed in one of the following three categories: ​ Level 1: Valuations based on quoted prices in active markets for identical assets and liabilities. The fair value of available-for-sale securities included in the Level 1 category is based on quoted prices that are readily and regularly available in an active market. As of September 30, 2020, the Level 1 category included money market funds of $24.7 million, which were included in cash and cash equivalents on the Condensed Consolidated Balance Sheets. ​ Level 2: Valuations based on observable inputs (other than Level 1 prices), such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly. The fair value of available-for-sale securities included in the Level 2 category is based on the market values obtained from an independent pricing service that were evaluated using pricing models that vary by asset class and may incorporate available trade, bid and other market information and price quotes from well-established independent pricing vendors and broker-dealers. As of September 30, 2020, the Level 2 category included short-term investments $12.1 million and long-term investments of $8.7 million, which were comprised of certificates of deposit, government and agency securities. ​ Level 3: Valuations based on inputs that are unobservable and involve management judgment and the reporting entity’s own assumptions about market participants and pricing. As of September 30, 2020, the Company’s Level 3 financial instruments measured at fair value on the Condensed Consolidated Balance Sheets consisted of the contingent consideration liability related to the acquisition of MikaMonu. The fair value of the contingent consideration liability was initially determined as of the acquisition date using unobservable inputs. These inputs included the estimated amount and timing of future cash flows, the probability of success (achievement of the various contingent events) and a risk-adjusted discount rate of approximately 14.8% used to adjust the probability-weighted cash flows to their present value. Significant increases (decreases) in any of those inputs in isolation would result in a significantly higher (lower) fair value measurement. Generally, changes used in the assumptions for future cash flows and probability of success would be accompanied by a directionally similar change in the fair value measurement and expense. Conversely, changes in the risk-adjusted discount rate would be accompanied by a directionally opposite change in the related fair value measurement and expense. Subsequent to the acquisition date, at each reporting period, the contingent consideration liability is re-measured to fair value with changes recorded in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. During the most recent re-measurement of the contingent consideration liability as of March 31, 2020, the Company used a risk-adjusted discount rate of approximately 14.5% to adjust the probability-weighted cash flows to their present value using probabilities ranging from 0% to 10% for the remaining contingent events. The contingent consideration liability is included in contingent consideration, non-current on the Consolidated Balance Sheet at September 30, 2020 and March 31, 2020 in the amount of $3.9 million and $3.9 million, respectively. ​ 14 Table of Contents The fair value of financial assets measured on a recurring basis is as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements at Reporting Date Using ​ ​ ​ ​ ​ ​ Quoted Prices ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ in Active ​ Significant ​ ​ ​ ​ ​ ​ ​ ​ Markets for ​ Other ​ Significant ​ ​ ​ ​ ​ ​ Identical Assets ​ Observable ​ Unobservable ​ ​ ​ ​ ​ ​ and Liabilities ​ Inputs ​ Inputs ​ ​ September 30, 2020 (Level 1) (Level 2) (Level 3) Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Money market funds ​ $ 24,732 ​ $ 24,732 ​ $ — ​ $ — ​ Marketable securities ​ ​ 20,723 ​ ​ — ​ ​ 20,723 ​ ​ — ​ Total ​ $ 45,455 ​ $ 24,732 ​ $ 20,723 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contingent consideration ​ $ 3,948 ​ $ — ​ $ — ​ $ 3,948 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements at Reporting Date Using ​ ​ ​ ​ ​ ​ Quoted Prices ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ in Active ​ Significant ​ ​ ​ ​ ​ ​ ​ ​ Markets for ​ Other ​ Significant ​ ​ ​ ​ ​ ​ Identical Assets ​ Observable ​ Unobservable ​ ​ ​ ​ ​ ​ and Liabilities ​ Inputs ​ Inputs ​ ​ March 31, 2020 (Level 1) (Level 2) (Level 3) Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Money market funds ​ $ 14,117 ​ $ 14,117 ​ $ — ​ $ — ​ Marketable securities ​ ​ 19,178 ​ ​ — ​ ​ 19,178 ​ ​ — ​ Total ​ $ 33,295 ​ $ 14,117 ​ $ 19,178 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contingent consideration ​ $ 3,898 ​ $ — ​ $ — ​ $ 3,898 ​ ​ The following table sets forth the changes in fair value of contingent consideration for the six months ended September 30, 2020 and September 30, 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended September 30, ​ ​ 2020 2019 ​ ​ ​ (In thousands) ​ Contingent consideration, beginning of period ​ $ 3,898 ​ $ 4,206 ​ Change due to accretion ​ ​ 50 ​ ​ 58 ​ Contingent consideration, end of period ​ $ 3,948 ​ $ 4,264 ​ ​ Short-term and long-term investments ​ All of the Company’s short-term and long-term investments are classified as available-for-sale. Available-for-sale debt securities with maturities greater than twelve months are classified as long-term investments when they are not intended for use in current operations. Investments in available-for-sale securities are reported at fair value with unrecognized gains (losses), net of tax, as a component of accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets. The Company had money market funds of $24.7 million and $14.1 million at September 30, 2020 and March 31, 2020, respectively, included in cash and cash equivalents on the Condensed Consolidated Balance Sheets. The Company monitors its investments for impairment periodically and records appropriate reductions in carrying values when declines are determined to be other-than-temporary. ​ 15 Table of Contents The following table summarizes the Company’s available-for-sale investments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 ​ ​ ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized ​ Unrealized ​ Fair ​ ​ Cost Gains Losses Value ​ ​ (In thousands) ​ Short-term investments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Certificates of deposit ​ $ 9,745 ​ $ 30 ​ $ — ​ $ 9,775 ​ Supranational obligations ​ ​ 1,264 ​ ​ 10 ​ ​ — ​ ​ 1,274 ​ Agency bonds ​ ​ 1,019 ​ ​ — ​ ​ (1) ​ ​ 1,018 ​ Total short-term investments ​ $ 12,028 ​ $ 40 ​ $ (1) ​ $ 12,067 ​ Long-term investments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Certificates of deposit ​ $ 2,500 ​ $ 42 ​ $ — ​ $ 2,542 ​ Supranational obligations ​ ​ 2,056 ​ ​ — ​ ​ (2) ​ ​ 2,054 ​ Agency bonds ​ ​ 4,022 ​ ​ 37 ​ ​ — ​ ​ 4,059 ​ Total long-term investments ​ $ 8,578 ​ $ 79 ​ $ (2) ​ $ 8,655 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2020 ​ ​ ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized ​ Unrealized ​ Fair ​ ​ Cost Gains Losses Value ​ ​ (In thousands) ​ Short-term investments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Certificates of deposit ​ $ 12,000 ​ $ 52 ​ $ (1) ​ $ 12,051 ​ Agency bonds ​ ​ 2,989 ​ ​ 21 ​ ​ — ​ ​ 3,010 ​ Total short-term investments ​ $ 14,989 ​ $ 73 ​ $ (1) ​ $ 15,061 ​ Long-term investments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Certificates of deposit ​ $ 745 ​ $ 18 ​ $ — ​ $ 763 ​ Agency bonds ​ ​ 2,029 ​ ​ 42 ​ ​ — ​ ​ 2,071 ​ Supranational obligations ​ ​ 1,270 ​ ​ 13 ​ ​ — ​ ​ 1,283 ​ Total long-term investments ​ $ 4,044 ​ $ 73 ​ $ — ​ $ 4,117 ​ ​ The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous loss position as of September 30, 2020 and March 31, 2020, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 ​ ​ ​ Less Than 12 Months ​ 12 Months or Greater ​ Total ​ ​ ​ ​ Fair ​ ​ Unrealized ​ ​ Fair ​ ​ Unrealized ​ ​ Fair ​ ​ Unrealized ​ ​ ​ ​ Value ​ ​ Loss ​ ​ Value ​ ​ Loss ​ ​ Value ​ ​ Loss ​ ​ ​ (In thousands) ​ Agency bonds ​ $ 2,019 ​ $ (1) ​ $ — ​ $ — ​ $ 2,019 ​ $ (1) ​ Supranational obligations ​ ​ 2,054 ​ ​ (2) ​ ​ — ​ ​ — ​ ​ 2,054 ​ ​ (2) ​ ​ ​ $ 4,073 ​ $ (3) ​ $ — ​ $ — ​ $ 4,073 ​ $ (3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2020 ​ ​ ​ Less Than 12 Months ​ 12 Months or Greater ​ Total ​ ​ ​ ​ Fair ​ ​ Unrealized ​ ​ Fair ​ ​ Unrealized ​ ​ Fair ​ ​ Unrealized ​ ​ ​ ​ Value ​ ​ Loss ​ ​ Value ​ ​ Loss ​ ​ Value ​ ​ Loss ​ ​ ​ (In thousands) ​ Certificates of deposit ​ $ 2,498 ​ $ (2) ​ $ - ​ $ - ​ $ 2,498 ​ $ (2) ​ ​ ​ $ 2,498 ​ $ (2) ​ $ - ​ $ - ​ $ 2,498 ​ $ (2) ​ 16 Table of Contents ​ The Company’s investment portfolio consists of both corporate and governmental securities that have a maximum maturity of three years. All unrealized gains and losses are due to changes in interest rates and bond yields. Subject to normal credit risks, the Company has the ability to realize the full value of all these investments upon maturity. ​ The deferred tax liability related to unrecognized gains and losses on short-term and long-term investments was $(26,000) and $(30,000) at September 30, 2020 and March 31, 2020, respectively. ​ As of September 30, 2020, contractual maturities of the Company’s available-for-sale investments were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair ​ ​ Cost Value ​ ​ (In thousands) ​ Maturing within one year ​ $ 12,028 ​ $ 12,067 ​ Maturing in one to three years ​ ​ 8,578 ​ ​ 8,655 ​ ​ ​ $ 20,606 ​ $ 20,722 ​ ​ The Company classifies its short-term investments as “available-for-sale” as they are intended to be available for use in current operations. ​ ​ ​ NOTE 8—LEASES ​ The Company has operating leases for corporate offices, research and development facilities, certain equipment and software. The Company’s leases have remaining lease terms of 5 months to 35 months, some of which include options to extend for up to 5 years. ​ Supplemental balance sheet information related to leases was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ As of ​ ​ September 30, 2020 ​ March 31, 2020 ​ ​ (In thousands) Operating Leases ​ ​ ​ ​ ​ ​ Operating lease right-of-use assets ​ $ 970 ​ $ 617 ​ ​ ​ ​ ​ ​ ​ Lease liabilities-current ​ $ 534 ​ $ 498 Lease liabilities-non-current ​ ​ 463 ​ ​ 142 Total operating lease liabilities ​ $ 997 ​ $ 640 ​ The following table provides the details of lease costs: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Six Months Ended September 30, ​ ​ 2020 2019 ​ 2020 2019 ​ ​ (In thousands) ​ (In thousands) Operating lease cost ​ $ 167 ​ $ 158 ​ $ 332 ​ $ 319 Short-term lease cost ​ ​ 8 ​ ​ 7 ​ ​ 16 ​ ​ 14 ​ ​ $ 175 ​ $ 165 ​ $ 348 ​ $ 333 ​ 17 Table of Contents The following table provides other information related to leases: ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended September 30, ​ ​ 2020 2019 ​ ​ (In thousands) Cash paid for amounts included in the measurement of lease liabilities ​ ​ ​ ​ ​ ​ Operating cash flows from operating leases ​ $ 339 ​ $ 321 ​ ​ ​ ​ ​ ​ ​ Right-of-use assets obtained in exchange for lease obligations ​ ​ ​ ​ ​ ​ Operating leases ​ $ 658 ​ $ 1,228 ​ ​ ​ ​ ​ ​ ​ Weighted-average remaining lease term (years): ​ ​ ​ ​ ​ ​ Operating leases ​ ​ 2.26 ​ ​ 1.72 ​ ​ ​ ​ ​ ​ ​ Weighted-average discount rate: ​ ​ ​ ​ ​ ​ Operating leases ​ ​ 5.02% ​ ​ 6.46% ​ The following table provides the maturities of the Company’s operating lease liabilities as of September 30, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Lease ​ ​ ​ ​ Liabilities Fiscal Year ​ ​ ​ ​ (In thousands) 2021 (Remaining six months) ​ ​ ​ ​ $ 321 2022 ​ ​ ​ ​ ​ 386 2023 ​ ​ ​ ​ ​ 244 2024 ​ ​ ​ ​ ​ 98 Total undiscounted future cash flows ​ ​ ​ ​ ​ 1,049 Less: Imputed interest ​ ​ ​ ​ ​ (52) Present value of undiscounted future cash flows ​ ​ ​ ​ $ 997 ​ ​ ​ ​ ​ ​ ​ Presentation on statement of financial position ​ ​ ​ ​ ​ ​ Current ​ ​ ​ ​ $ 534 Non-current ​ ​ ​ ​ $ 463 ​ ​ ​ NOTE 9—COMMITMENTS AND CONTINGENCIES ​ Indemnification obligations ​ The Company is a party to a variety of agreements pursuant to which it may be obligated to indemnify the other party with respect to certain matters. Typically, these obligations arise in the context of contracts entered into by the Company, under which the Company agrees to hold the other party harmless against losses arising from a breach of representations and covenants related to such matters as title to assets sold and certain intellectual property rights. In each of these circumstances, payment by the Company is conditioned on the other party making a claim pursuant to the procedures specified in the particular contract, which procedures typically allow the Company to challenge the other party’s claims. Further, the Company’s obligations under these agreements may be limited in terms of time and/or amount, and in some instances, the Company may have recourse against third parties for certain payments made by it under these agreements. ​ It is not possible to predict the maximum potential amount of future payments that may be required under these or similar agreements due to the conditional nature of the Company’s obligations and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements have not had a material effect on its business, financial condition, cash flows or results of operations. ​ 18 Table of Contents Product warranties ​ The Company warrants its products to be free of defects generally for a period of three years. The Company estimates its warranty costs based on historical warranty claim experience and includes such costs in cost of revenues. Warranty costs and the accrued warranty liability were not material as of September 30, 2020 and March 31, 2020 and for the three months ended September 30, 2020 or 2019. ​ ​ NOTE 10—STOCK-BASED COMPENSATION ​ As of September 30, 2020, 1,849,761 shares of common stock were available for grant under the Company’s 2016 Equity Incentive Plan. ​ The following table summarizes the Company’s stock option activities for the six months ended September 30, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Shares ​ Average ​ Weighted ​ ​ ​ ​ ​ ​ Shares ​ Underlying ​ Remaining ​ Average ​ ​ ​ ​ ​ ​ Available for ​ Options ​ Contractual ​ Exercise ​ Intrinsic ​ ​ Grant Outstanding Life (Years) Price Value Balance at March 31, 2020 ​ 2,522,314 ​ 8,135,791 ​ ​ ​ $ 6.17 ​ ​ ​ ​ Granted ​ (697,803) ​ 697,803 ​ ​ ​ $ 6.13 ​ ​ ​ ​ Exercised ​ — ​ (354,841) ​ ​ ​ $ 6.10 ​ $ 470,777 ​ Forfeited ​ 25,250 ​ (79,713) ​ ​ ​ $ 7.19 ​ ​ ​ ​ Balance at September 30, 2020 ​ 1,849,761 ​ 8,399,040 ​ 5.58 ​ $ 6.16 ​ ​ ​ ​ Options vested and exercisable ​ ​ ​ 5,511,646 ​ 4.09 ​ $ 5.66 ​ $ 2,578,244 ​ Options vested and expected to vest ​ ​ ​ 8,321,054 ​ 5.55 ​ $ 6.15 ​ $ 2,578,244 ​ ​ The weighted average fair value per underlying share of options granted during the three months ended September 30, 2020 and 2019 was $2.24 and $2.90, respectively, and $2.34 and $2.88 for the six months ended September 30, 2020 and 2019, respectively. ​ Options outstanding by exercise price at September 30, 2020 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ Options Outstanding ​ Options Exercisable ​ ​ ​ ​ ​ ​ Shares ​ Weighted ​ Weighted Average ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ Underlying ​ Average ​ Remaining ​ Number ​ Average ​ ​ ​ ​ ​ ​ Options ​ Exercise ​ Contractual ​ Vested and ​ Exercise ​ Exercise Price Outstanding Price Life (Years) Exercisable Price $ 3.40 - 4.81 ​ 897,307 ​ $ 4.06 ​ 3.56 ​ 897,307 ​ $ 4.06 ​ $ 4.90 - 4.99 ​ 1,296,746 ​ $ 4.97 ​ 4.75 ​ 1,296,746 ​ $ 4.97 ​ $ 5.13 - 5.59 ​ 920,946 ​ $ 5.32 ​ 3.89 ​ 920,946 ​ $ 5.32 ​ $ 5.69 - 5.83 ​ 864,567 ​ $ 5.81 ​ 7.52 ​ 280,874 ​ $ 5.75 ​ $ 5.91 - 6.54 ​ 911,858 ​ $ 6.27 ​ 3.54 ​ 771,638 ​ $ 6.31 ​ $ 6.61 - 6.70 ​ 840,070 ​ $ 6.68 ​ 6.89 ​ 295,123 ​ $ 6.65 ​ $ 6.82 - 7.26 ​ 1,132,392 ​ $ 7.06 ​ 5.35 ​ 653,368 ​ $ 6.94 ​ $ 7.40 - 8.09 ​ 812,681 ​ $ 7.79 ​ 8.52 ​ 241,091 ​ $ 7.71 ​ $ 8.30 ​ ​ ​ 613,893 ​ $ 8.30 ​ 8.83 ​ 45,973 ​ $ 8.30 ​ $ 9.20 ​ ​ ​ 108,580 ​ $ 9.20 ​ 0.34 ​ 108,580 ​ $ 9.20 ​ ​ ​ ​ ​ ​ 8,399,040 ​ $ 6.16 ​ 5.58 ​ 5,511,646 ​ $ 5.66 ​ ​ 19 Table of Contents The following table summarizes stock-based compensation expense by line item in the Condensed Consolidated Statements of Operations, all relating to employee stock plans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Six Months Ended September 30, ​ ​ ​ 2020 ​ 2019 ​ 2020 ​ 2019 ​ ​ ​ ​ ​ ​ (In Thousands) ​ ​ ​ ​ Cost of revenues ​ $ 84 ​ $ 52 ​ $ 172 ​ $ 107 ​ Research and development ​ ​ 353 ​ ​ 397 ​ ​ 766 ​ ​ 796 ​ Selling, general and administrative ​ ​ 216 ​ ​ 193 ​ ​ 470 ​ ​ 390 ​ Total ​ $ 653 ​ $ 642 ​ $ 1,408 ​ $ 1,293 ​ ​ As stock-based compensation expense recognized in the Condensed Consolidated Statement of Operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures in accordance with authoritative guidance. The Company estimates forfeitures at the time of grant and revises the original estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates. ​ No tax benefit related to stock-based compensation was recognized in the six months ended September 30, 2020 due to a full valuation allowance. There were no windfall tax benefits realized from exercised stock options in either of these periods. Compensation cost capitalized within inventory at September 30, 2020 was immaterial. As of September 30, 2020, the Company’s total unrecognized compensation cost was $5.1 million, which will be recognized over a weighted average period of 2.20 years. The Company calculated the fair value of stock-based awards in the periods presented using the Black-Scholes option pricing model and the following weighted average assumptions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Six Months Ended September 30, ​ ​ ​ 2020 ​ 2019 ​ ​ ​ 2020 ​ ​ ​ ​ 2019 ​ ​ ​ ​ ​ ​ ​ Stock Option Plans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk-free interest rate ​ ​ ​ 0.22 % ​ ​ ​ 1.84 % ​ 0.22 - 0.36 % ​ 1.84 - 2.30 % ​ Expected life (in years) ​ ​ ​ 5.00 ​ ​ ​ ​ 5.00 ​ ​ ​ ​ 5.00 ​ ​ ​ ​ 5.00 ​ ​ Volatility ​ ​ ​ 44.6 % ​ ​ ​ 36.7 % ​ 41.9 - 44.6 % ​ 36.7 - 37.3 % ​ Dividend yield ​ ​ ​ — % ​ ​ ​ — % ​ ​ ​ — % ​ ​ ​ — % ​ Employee Stock Purchase Plan: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk-free interest rate ​ ​ ​ — % ​ ​ ​ — % ​ ​ ​ 0.15 % ​ ​ ​ 2.43 % ​ Expected life (in years) ​ ​ ​ — ​ ​ ​ ​ — ​ ​ ​ ​ 0.50 ​ ​ ​ ​ 0.50 ​ ​ Volatility ​ ​ ​ — % ​ ​ ​ — % ​ ​ ​ 67.1 % ​ ​ ​ 43.1 % ​ Dividend yield ​ ​ ​ — % ​ ​ ​ — % ​ ​ ​ — % ​ ​ ​ — % ​ ​ ​ NOTE 11—RELATED PARTY TRANSACTION ​ The Company incurred non-recurring engineering service expense of approximately $84,000 during the six months ended September 30, 2020 from Wistron Neweb Corp (“WNC”) in connection with the manufacturing of single-APU PCIe boards, Gemini I™, to be used in the Company’s in-place associative computing product. Haydn Hsieh, a member of the Company’s board of directors, is the Chairman and Chief Strategy Officer of WNC. ​ ​ ​ NOTE 12—SEGMENT AND GEOGRAPHIC INFORMATION ​ Based on its operating management and financial reporting structure, the Company has determined that it has one reportable business segment: the design, development and sale of integrated circuits. ​ 20 Table of Contents The following is a summary of net revenues by geographic area based on the location to which product is shipped: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Six Months Ended September 30, ​ ​ ​ 2020 ​ 2019 ​ 2020 ​ 2019 ​ ​ (In thousands) ​ United States $ 3,345 $ 3,780 $ 5,813 $ 8,387 ​ China ​ ​ 365 ​ ​ 2,137 ​ ​ 1,002 ​ ​ 3,369 ​ Singapore ​ ​ 597 ​ ​ 1,230 ​ ​ 1,836 ​ ​ 4,771 ​ Netherlands ​ ​ 1,599 ​ ​ 3,358 ​ ​ 3,132 ​ ​ 4,751 ​ Germany ​ ​ 560 ​ ​ 1,016 ​ ​ 1,038 ​ ​ 2,913 ​ Rest of the world ​ ​ 193 ​ ​ 219 ​ ​ 459 ​ ​ 568 ​ ​ ​ $ 6,659 ​ $ 11,740 ​ $ 13,280 ​ $ 24,759 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ All sales are denominated in United States dollars. ​