Item 9A. Controls and Procedures
Item 9A.
Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934 as of the end of the period covered by this Annual Report on Form 10-K.
Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2024, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Management ’ s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2024. Management reviewed the results of its assessment with our Audit Committee.
Ernst & Young LLP independently assessed the effectiveness of our internal control over financial reporting, as stated in the firm’s attestation report, which appears in Part II, Item 8 of this Annual Report on Form 10-K.
Remediation of Previously Disclosed Material Weakness
As disclosed in Item 9A Controls and Procedures in our Annual Report on Form 10-K for the year ended December 31, 2023, a material weakness was identified in internal control over financial reporting within the Company’s demand forecast process regarding excess and obsolete inventory.
During 2024, management completed the implementation of measures designed to ensure the remediation of control deficiencies contributing to the material weakness, including:
•
Improved the documentation of our review procedures, forecast analysis and management judgments;
•
Amended inventory provision spreadsheet formats to include procedural checklists, additional columns and color coding to delineate specific parts and products before and after review, set dollar thresholds for reserve requirements, and added a worksheet for management review comments; and
•
Expanded review procedures for inventory reserve calculations and improved reconciliations between the inventory demand forecast and our financial system.
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Management has determined, through testing of our internal controls and procedures, that the remediation measures discussed above were effectively designed and operated effectively for a sufficient period of time to allow us to conclude that the material weakness had been remediated as of December 31, 2024.
Changes in Internal Control over Financial Reporting
Other than the remediation of the previously disclosed material weakness as described above, there were no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2024, that would have materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Item 9B.
Other Information
10b5-1 Trading Plans
Certain of our executive officers and directors have entered into trading plans pursuant to Rule 10b5-1(c) of the Securities Exchange Act of 1934, as amended. A trading plan is a written document that pre-establishes the amounts, prices and dates (or formula for determining the amounts, prices and dates) of future purchases or sales of our common stock, including the sale of shares acquired pursuant to the Monolithic Power Systems, Inc. 2004 Employee Stock Purchase Plan, amended and restated, and upon vesting of RSUs.
The following table summarizes the adoption of trading plans intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) during the three months ended December 31, 2024:
Name and Title
Adoption Date
Plan Duration
Intended Sale Amount (in shares)
Carintia Martinez , Director
November 27, 2024
Through November 28, 2025
Up to 1,400
During the three months ended December 31, 2024, no trading plans intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) were modified or terminated, and no other written trading arrangements that are not intended to qualify for the Rule 10b5-1(c) affirmative defense were adopted, modified, or terminated.
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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PART III
Item 10.
Directors, Executive Officers and Corporate Governance
Reference is made to the information regarding directors and nominees, code of ethics, insider trading policy and other corporate governance matters and disclosure relating to compliance with Section 16(a) of the Securities Exchange Act of 1934 appearing in the Company’s Proxy Statement for its 2025 Annual Meeting of Stockholders (the “2025 Annual Meeting”), which information is incorporated in this Annual Report on Form 10-K by reference. Information regarding executive officers is set forth under the caption “Information about Executive Officers” in Part I of this Annual Report on Form 10-K.
Item 11.
Executive Compensation
The information required by this item will be set forth under the caption “Executive Officer Compensation” in the Company’s Proxy Statement for the 2025 Annual Meeting, and is incorporated herein by reference.
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item will be set forth under the captions “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in the Company’s Proxy Statement for the 2025 Annual Meeting, and is incorporated herein by reference.
Item 13.
Certain Relationships and Related Transactions, and Director Independence
The information required by this item will be set forth under the captions “Certain Relationships and Related Transactions” and “Election of Directors” in the Company’s Proxy Statement for the 2025 Annual Meeting, and is incorporated herein by reference.
Item 14.
Principal Accountant Fees and Services
The information required by this item will be set forth under the caption “Audit and Other Fees” in the Company’s Proxy Statement for the 2025 Annual Meeting, and is incorporated herein by reference.
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PART IV
Item 15.
Exhibits and Financial Statement Schedules
(a) Documents filed as part of this report
(1) All financial statements
Page
Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42 )
41
Consolidated Balance Sheets
44
Consolidated Statements of Operations
45
Consolidated Statements of Comprehensive Income
46
Consolidated Statements of Stockholders’ Equity
47
Consolidated Statements of Cash Flows
48
Notes to Consolidated Financial Statements
49
(2) Financial Statement Schedules
All schedules have been omitted because they are not required, not applicable, or the information required is otherwise included in the consolidated financial statements or notes thereto.
(3) Exhibits
Exhibit
Number
Description
3.1 (1)
Amended and Restated Certificate of Incorporation.
3.2 (2)
Amended and Restated Bylaws of Monolithic Power Systems, Inc., effective April 26, 2022.
4.1 (3)
Description of the Registrant ’ s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.
10.1+(4)
Registrant ’ s 2004 Employee Stock Purchase Plan and form of subscription agreement.
10.2+(5)
Form of Directors ’ and Officers ’ Indemnification Agreement.
10.3+(6)
Employment Agreement with Michael Hsing , and Amendment thereof .
10.4+(7)
Employment Agreement with Maurice Sciammas , and Amendment thereof .
10.5+(8)
Employment Agreement with Deming Xiao , and Amendment thereof .
10.6+(9)
Letter Agreement with Victor Lee.
10.7+(10)
Letter Agreement with Jeff Zhou.
10.8+(11)
Monolithic Power Systems, Inc. Master Cash Performance Bonus Plan.
10.9+(12)
Letter Agreement with Eugen Elmiger.
10.10+(13)
Monolithic Power Systems, Inc. 2014 Equity Incentive Plan, as amended, and Form of Grant Agreement .
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10.11+(14)
Employment Agreement with Bernie Blegen.
10.12+(15)
Employment Agreement with Saria Tseng and Amendment thereof.
10.13+(16)
Monolithic Power Systems, Inc. Amended and Restated 2014 Equity Incentive Plan.
10.14+(17)
Form of Grant Agreement for grants of Performance Stock Units under the Monolithic Power Systems, Inc. Amended and Restated 2014 Equity Incentive Plan.
10.15+(18)
Letter Agreement with Carintia Martinez .
10.16+(19)
Indemnification Agreement with Carintia Martinez .
10.17+(20)
Letter Agreement with Eileen Wynne.
10.18+(21)
Indemnification Agreement with Eileen Wynne.
10.19+(22)
Monolithic Power Systems, Inc. 2004 Employee Stock Purchase Plan, Amended and Restated as of August 16, 2023.
19.1
Monolithic Power Systems, Inc. Insider Trading Compliance Program.
21.1
Subsidiaries of Monolithic Power Systems, Inc.
23.1
Consent of Independent Registered Public Accounting Firm.
24.1
Power of Attorney (included on Signature page to this Form 10-K).
31.1
Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
97.1+(23)
Monolithic Power Systems, Inc. Compensation Clawback Policy.
101.INS
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
+
Management contract or compensatory plan or arrangement.
*
This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.
(1)
Incorporated by reference to Exhibit 3.2 of the Registrant’s Registration Statement on Form S-1/A (Registration No. 333-117327), filed with the Securities and Exchange Commission on November 15, 2004.
(2)
Incorporated by reference to Exhibit 3.1 of the Registrant’s current report on Form 8-K (File No. 000-51026), filed with the Securities and Exchange Commission on April 27, 2022.
(3)
Incorporated by reference to Exhibit 4.1 of the Registrant’s annual report on Form 10-K (File No. 000-51026), filed with the Securities and Exchange Commission on February 28, 2020.
(4)
Incorporated by reference to Exhibit 10.3 of the Registrant’s Registration Statement on Form S-1/A (Registration No. 333-117327), filed with the Securities and Exchange Commission on November 15, 2004.
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(5)
Incorporated by reference to Exhibit 10.4 of the Registrant’s Registration Statement on Form S-1/A (Registration No. 333-117327), filed with the Securities and Exchange Commission on November 15, 2004.
(6)
Incorporated by reference to Exhibit 10.7 of the Registrant’s annual report on Form 10-K (File No. 000-51026), filed with the Securities and Exchange Commission on March 11, 2008 and Exhibit 10.1 of the Registrant’s current report on Form 8-K (File No. 000-51026), filed with the Securities and Exchange Commission on December 19, 2008.
(7)
Incorporated by reference to Exhibit 10.8 of the Registrant’s annual report on Form 10-K (File No. 000-51026), filed with the Securities and Exchange Commission on March 11, 2008 and Exhibit 10.3 of the Registrant’s current report on Form 8-K (File No. 000-51026), filed with the Securities and Exchange Commission on December 19, 2008.
(8)
Incorporated by reference to Exhibit 10.10 of the Registrant’s annual report on Form 10-K (File No. 000-51026), filed with the Securities and Exchange Commission on March 11, 2008 and Exhibit 10.4 of the Registrant’s current report on Form 8-K (File No. 000-51026), filed with the Securities and Exchange Commission on December 19, 2008.
(9)
Incorporated by reference to Exhibit 10.1 of the Registrant’s current report on Form 8-K (File No. 000-51026), filed with the Securities and Exchange Commission on September 14, 2006.
(10)
Incorporated by reference to Exhibit 10.1 of the Registrant’s current report on Form 8-K (File No. 000-51026), filed with the Securities and Exchange Commission on February 3, 2010.
(11)
Incorporated by reference to Annexure C of the Registrant’s Proxy Statement on Schedule 14A (File No. 000-51026), filed with the Securities and Exchange Commission on April 30, 2013.
(12)
Incorporated by reference to Exhibit 10.36 of the Registrant’s annual report on Form 10-K (File No. 000-51026), filed with the Securities and Exchange Commission on March 10, 2014.
(13)
Incorporated by reference to Exhibit 4.6 of the Registrant’s Registration Statement on Form S-8 (Registration No. 333-199782), filed with the Securities and Exchange Commission on November 3, 2014.
(14)
Incorporated by reference to Exhibit 10.1 of the Registrant’s current report on Form 8-K (File No. 000-51026), filed with the Securities and Exchange Commission on July 22, 2016.
(15)
Incorporated by reference to Exhibit 10.14 of the Registrant’s annual report on Form 10-K (File No. 000-51026), filed with the Securities and Exchange Commission on February 28, 2020.
(16)
Incorporated by reference to Annexure B of the Registrant’s Proxy Statement on Schedule 14A (File No. 000-51026), filed with the Securities and Exchange Commission on April 29, 2020.
(17)
Incorporated by reference to Exhibit 10.3 of the Registrant’s quarterly report on Form 10-Q (File No. 000-51026), filed with the Securities and Exchange Commission on May 5, 2023.
(18)
Incorporated by reference to Exhibit 10.1 of the Registrant’s current report on Form 8-K (File No. 000-51026), filed with the Securities and Exchange Commission on May 28, 2021.
(19)
Incorporated by reference to Exhibit 10.2 of the Registrant’s current report on Form 8-K (File No. 000-51026), filed with the Securities and Exchange Commission on May 28, 2021.
(20)
Incorporated by reference to Exhibit 10.1 of the Registrant’s current report on Form 8-K (File No. 000-51026), filed with the Securities and Exchange Commission on February 8, 2023.
(21)
Incorporated by reference to Exhibit 10.2 of the Registrant’s current report on Form 8-K (File No. 000-51026), filed with the Securities and Exchange Commission on February 8, 2023.
(22)
Incorporated by reference to Exhibit 10.1 of the Registrant’s quarterly report on Form 10-Q (File No. 000-51026), filed with the Securities and Exchange Commission on August 4, 2023.
(23)
Incorporated by reference to Exhibit 97.1 of the Registrant’s annual report on Form 10-K (File No. 000-51026), filed with the Securities and Exchange Commission on February 29, 2024.
Item 16.
Form 10-K Summary
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
MONOLITHIC POWER SYSTEMS, INC.
Date: March 3, 2025
By:
/s/ Michael Hsing
Michael Hsing
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Michael Hsing and T. Bernie Blegen, jointly and severally, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendments to this report, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on March 3, 2025 by the following persons on behalf of the registrant and in the capacities indicated:
/s/ Michael Hsing
President, Chief Executive Officer, and Director (Principal Executive Officer)
MICHAEL HSING
/s/ T. Bernie Blegen
Chief Financial Officer (Principal Financial and Accounting Officer)
T. BERNIE BLEGEN
/s/ Herbert Chang
Director
HERBERT CHANG
/s/ Eugen Elmiger
Director
EUGEN ELMIGER
/s/ Victor K. Lee
Director
VICTOR K. LEE
/s/ Carintia Martinez
Director
CARINTIA MARTINEZ
/s/ Eileen Wynne
Director
EILEEN WYNNE
/s/ Jeff Zhou
Director
JEFF ZHOU
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