Peraso Inc. 10-Q

Item 1. Financial Statements MOSYS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except par value) June 30, December 31, 2021 2020 (unaudited) ASSETS Current assets Cash and cash equivalents $ 13,475 $ 5,889 Short-term investments 6,091 — Accounts receivable, net 632 701 Inventories 1,026 599 Prepaid expenses and other 388 668 Total current assets 21,612 7,857 Long-term investments 3,484 — Property and equipment, net 96 121 Right-of-use lease asset, net 205 303 Other 17 17 Total assets $ 25,414 $ 8,298 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable $ 89 $ 76 Accrued expenses and other 1,350 1,300 Deferred revenue 147 15 Short-term lease liability 201 201 PPP note payable, current — 244 Total current liabilities 1,787 1,836 Convertible notes payable — 3,092 PPP note payable — 335 Long-term lease liability 10 103 Total liabilities 1,797 5,366 Commitments and contingencies (Note 4) Stockholders’ equity Preferred stock, $ 0.01 par value; 20,000 shares authorized; none issued and outstanding — — Common stock, $ 0.001 par value; 120,000 shares authorized; 8,660 shares and 3,554 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively 8 3 Additional paid-in capital 268,806 245,548 Accumulated other comprehensive loss ( 4 ) — Accumulated deficit ( 245,193 ) ( 242,619 ) Total stockholders’ equity 23,617 2,932 Total liabilities and stockholders’ equity $ 25,414 $ 8,298 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 MOSYS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) (In thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Net revenue Product $ 1,017 $ 1,679 $ 2,195 $ 2,747 Royalty and other 151 289 311 481 Total net revenue 1,168 1,968 2,506 3,228 Cost of net revenue 444 604 939 1,134 Gross profit 724 1,364 1,567 2,094 Operating expenses Research and development 1,222 985 2,381 1,946 Selling, general and administrative 1,287 964 2,358 2,099 Total operating expenses 2,509 1,949 4,739 4,045 Loss from operations ( 1,785 ) ( 585 ) ( 3,172 ) ( 1,951 ) Interest expense — ( 56 ) ( 30 ) ( 111 ) Other income, net 580 2 628 18 Net loss ( 1,205 ) ( 639 ) ( 2,574 ) ( 2,044 ) Deemed dividend for warrant exercise price adjustment — ( 392 ) — ( 392 ) Net loss attributable to common stockholders $ ( 1,205 ) $ ( 1,031 ) $ ( 2,574 ) $ ( 2,436 ) Net loss per share attributable to common stockholders Basic and diluted $ ( 0.18 ) $ ( 0.32 ) $ ( 0.44 ) $ ( 0.88 ) Shares used in computing net loss per share Basic and diluted 6,857 3,265 5,865 2,780 Other comprehensive loss, net of tax: Net unrealized loss on available-for-sale securities ( 3 ) — ( 4 ) — Comprehensive loss $ ( 1,208 ) $ ( 1,031 ) $ ( 2,578 ) $ ( 2,436 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 4 MOSYS, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) (In thousands) Accumulated Additional Other Common Stock Paid-In Comprehensive Accumulated Shares Amount Capital Loss Deficit Total Balance as of December 31, 2020 3,554 $ 3 $ 245,548 $ — $ ( 242,619 ) $ 2,932 Issuance of common stock under stock plan, net 16 — ( 2 ) — — ( 2 ) Exercise of warrants 1,033 1 2,477 — — 2,478 Issuance of common stock for payment of accrued interest 43 — 140 — — 140 Sale of common stock, net of placement costs 1,488 2 6,815 — — 6,817 Stock-based compensation — — 68 — — 68 Unrealized loss on available-for-sale investments — — — ( 1 ) — ( 1 ) Net loss — — — — ( 1,369 ) ( 1,369 ) Balance as of March 31, 2021 6,134 $ 6 $ 255,046 $ ( 1 ) $ ( 243,988 ) $ 11,063 Issuance of common stock under stock plan, net 2 — — — — — Exercise of warrants 706 1 1,695 — — 1,696 Sale of common stock, net of placement costs 1,818 1 11,968 — — 11,969 Stock-based compensation — — 97 — — 97 Unrealized loss on available-for-sale investments — — — ( 3 ) — ( 3 ) Net loss — — — — ( 1,205 ) ( 1,205 ) Balance as of June 30, 2021 8,660 $ 8 $ 268,806 $ ( 4 ) $ ( 245,193 ) $ 23,617 Accumulated Additional Other Common Stock Paid-In Comprehensive Accumulated Shares Amount Capital Loss Deficit Total Balance as of December 31, 2019 2,179 $ 2 $ 243,281 $ — $ ( 238,447 ) $ 4,836 Issuance of common stock for release of awards 20 — ( 1 ) — — ( 1 ) Exercise of pre-funded warrants 116 — 2 — — 2 Stock-based compensation — — 68 — — 68 Net loss — — — — ( 1,405 ) ( 1,405 ) Balance as of March 31, 2020 2,315 $ 2 $ 243,350 $ — $ ( 239,852 ) $ 3,500 Issuance of common stock for release of awards 1 — — — — — Sale of common stock, net of placement costs 1,218 1 1,618 — — 1,619 Deemed dividend for warrant exercise price adjustment — — 392 — ( 392 ) — Stock-based compensation — — 66 — — 66 Net loss — — — — ( 639 ) ( 639 ) Balance as of June 30, 2020 3,534 $ 3 $ 245,426 $ — $ ( 240,883 ) $ 4,546 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 MOSYS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Six Months Ended June 30, 2021 2020 Cash flows from operating activities: Net loss $ ( 2,574 ) $ ( 2,044 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 36 82 Stock-based compensation 165 134 Accrued interest 30 112 Amortization of lease right-of-use asset 98 43 Change in operating lease liability ( 93 ) ( 50 ) Gain on settlement of convertible notes payable and accrued interest, net ( 48 ) — Gain on extinguishment of PPP Note ( 579 ) — Changes in assets and liabilities: Accounts receivable 69 574 Inventories ( 427 ) ( 48 ) Prepaid expenses and other assets 280 221 Accounts payable 13 ( 170 ) Deferred revenue and other liabilities 276 ( 19 ) Net cash used in operating activities ( 2,754 ) ( 1,165 ) Cash flows from investing activities: Purchases of property and equipment ( 11 ) ( 12 ) Proceeds from maturities of short-term investments — 300 Purchases of investments ( 9,579 ) — Net cash provided by (used in) investing activities ( 9,590 ) 288 Cash flows from financing activities: Proceeds from sale of common stock, net 18,785 1,619 Proceeds from exercise of common stock warrants 4,174 2 Repayment of convertible notes payable ( 3,027 ) — Proceeds from PPP note — 579 Taxes paid to net share settle equity awards ( 2 ) ( 1 ) Net cash provided by financing activities 19,930 2,199 Net increase in cash and cash equivalents 7,586 1,322 Cash and cash equivalents at beginning of period 5,889 6,053 Cash and cash equivalents at end of period $ 13,475 $ 7,375 Supplemental disclosure: Issuance of convertible notes in settlement of accrued interest $ — $ 112 Settlement of accrued interest through issuance of common shares $ 123 $ — Fair value of warrant exercise price adjustment considered as deemed dividend $ — $ 392 The accompanying notes are an integral part of these condensed consolidated financial statements. 6 MOSYS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1. The Company and Summary of Significant Accounting Policies MoSys, Inc. (the Company) was incorporated in California in 1991 and reincorporated in 2000 in Delaware. The Company provides both integrated circuits (ICs) and intellectual property (IP) solutions that enable fast, intelligent data access and decision making for a wide range of markets. The Company’s primary product line is marketed under the Accelerator Engine name and includes the Bandwidth Engine IC products, which integrate the Company’s proprietary, 1T-SRAM high-density embedded memory and a highly-efficient serial interface protocol resulting in a monolithic memory IC solution optimized for memory bandwidth and transaction access performance. In 2020, the Company began offering for license the first of its Virtual Accelerator Engine products which consist of software, firmware and related IP. This new product line will include multiple function accelerator platform products, which target specific application functions and will use a common software interface to allow performance scalability over multiple hardware environments. The accompanying condensed consolidated financial statements of the Company have been prepared without audit. The condensed consolidated balance sheet as of December 31, 2020 has been derived from the audited consolidated financial statements at that date. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) have been condensed or omitted in accordance with these rules and regulations of the Securities and Exchange Commission (SEC). The information in this report should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in its most recent annual report on Form 10-K filed with the SEC. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) necessary to summarize fairly the Company’s financial position, results of operations and cash flows for the interim periods presented. The operating results for the three and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 or for any other future period. Basis of Presentation The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. The Company’s fiscal year ends on December 31 of each calendar year. Risks and Uncertainties The Company is subject to risks from, among other things, competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, limited operating history and the volatility of public markets. COVID-19 The global outbreak of the coronavirus disease 2019 (COVID-19) was declared a pandemic by the World Health Organization and a national emergency by the U.S. government in March 2020. This has negatively affected the U.S. and global economy, disrupted global supply chains, significantly restricted travel and transportation, resulted in mandated closures and orders to “shelter-in-place” and created significant disruption of the financial markets. The full extent of the COVID-19 impact on the Company’s operational and financial performance will depend on future developments, including the duration and spread of the pandemic and related actions taken by U.S. and foreign government agencies to prevent disease spread, all of which are uncertain, out of the Company’s control, and cannot be predicted. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at 7 the date of the financial statements and the reported amounts of revenues and expenses recognized during the reported period. Actual results could differ from those estimates. Cash Equivalents and Investments The Company has invested its excess cash in money market accounts, certificates of deposit, commercial paper, corporate debt, government-sponsored enterprise bonds and municipal bonds and considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Investments with original maturities greater than three months and remaining maturities less than one year are classified as short-term investments. Investments with remaining maturities greater than one year are classified as long-term investments. Management generally determines the appropriate classification of securities at the time of purchase. All securities are classified as available-for-sale. The Company’s available-for-sale short-term investments are carried at fair value, with the unrealized holding gains and losses reported in accumulated other comprehensive income. Realized gains and losses and declines in the value judged to be other than temporary are included in the other income, net line item in the condensed consolidated statements of operations and comprehensive loss. The cost of securities sold is based on the specific identification method. Fair Value Measurements The Company measures the fair value of financial instruments using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: Level 1— Inputs used to measure fair value are unadjusted quoted prices that are available in active markets for the identical assets or liabilities as of the reporting date. Level 2— Pricing is provided by third party sources of market information obtained through the Company’s investment advisors, rather than models. The Company does not adjust for, or apply, any additional assumptions or estimates to the pricing information it receives from advisors. The Company’s Level 2 securities may include cash equivalents and available-for-sale securities, which consist primarily of certificates of deposit, corporate debt, and government agency and municipal debt securities from issuers with high-quality credit ratings. The Company’s investment advisors obtain pricing data from independent sources, such as Standard & Poor’s, Bloomberg and Interactive Data Corporation, and rely on comparable pricing of other securities because the Level 2 securities are not actively traded and have fewer observable transactions. The Company considers this the most reliable information available for the valuation of the securities. Level 3— Unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment are used to measure fair value. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions. The determination of fair value for Level 3 investments and other financial instruments involves the most management judgment and subjectivity. Allowance for Doubtful Accounts The Company establishes an allowance for doubtful accounts to ensure that its trade receivables balances are not overstated due to uncollectibility. The Company performs ongoing customer credit evaluations within the context of the industry in which it operates and generally does not require collateral from its customers. A specific allowance of up to 100 % of the invoice value is provided for any problematic customer balances. Delinquent account balances are written off after management has determined that the likelihood of collection is remote. The Company grants credit only to customers deemed creditworthy in the judgment of management. The allowance for doubtful accounts was $ 41,000 at June 30, 2021 and December 31, 2020. Inventories The Company values its inventories at the lower of cost, which approximates actual cost on a first-in, first-out basis, or net realizable value. The Company records inventory reserves for estimated obsolescence or unmarketable inventories based upon assumptions about future demand and market conditions. Once a reserve is established, it is maintained until the product to which it relates is sold or otherwise disposed of. If actual market conditions are less favorable than those expected by management, additional adjustment to inventory valuation may be required. Charges for obsolete and slow-moving inventories are recorded based upon an analysis of specific identification of obsolete inventory items and 8 quantification of slow moving inventory items. The Company recorded no material write-downs of inventory during the six months ended June 3 0 , 202 1 and recorded write-downs of $ 0.1 m illion for the year ended December 31, 2020 . Revenue Recognition The Company generates revenue primarily from sales of IC products and licensing of its IP. Revenues are recognized when control is transferred to customers in amounts that reflect the consideration the Company expects to be entitled to receive in exchange for those goods. Revenue recognition is evaluated through the following five steps: (i) identification of the contract, or contracts, with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied. IC products Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied. The majority of the Company’s contracts have a single performance obligation to transfer products. Accordingly, the Company recognizes revenue when title and risk of loss have been transferred to the customer, generally at the time of shipment of products. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products and is generally based upon a negotiated, formula, list or fixed price. The Company sells its products both directly to customers and through distributors generally under agreements with payment terms typically less than 60 days. Royalty and other The Company’s licensing contracts typically provide for royalties based on the licensee’s use of the Company’s memory technology in its currently shipping commercial products. The Company estimates its royalty revenue in the calendar quarter in which the licensee uses the licensed technology. Payments are generally received in the subsequent quarter. Contract liabilities – deferred revenue The Company’s contract liabilities consist of advance customer payments and deferred revenue. The Company classifies advance customer payments and deferred revenue as current or non-current based on the timing of when the Company expects to recognize revenue. During the six months ended June 30, 2021, the Company recognized no revenue that had been included in deferred revenue as of December 31, 2020. See Note 5 for disaggregation of revenue by geography. Cost of Net Revenue Cost of net revenue consists primarily of direct and indirect costs of IC product sales and engineering personnel costs directly related to maintenance and support services specified in licensing agreements. Maintenance and support typically include engineering support to assist in the commencement of production of a licensee’s products. Warrants As of June 30, 2021, the Company had the following warrants outstanding (share amounts in thousands): Type Number of Shares Exercise Price Expiration Common stock 33 $ 47.00 January 2023 Common stock 106 $ 2.40 October 2023 9 Per Share Amounts Basic net income (loss) per share is computed by dividing net income (loss) for the period by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share gives effect to all potentially dilutive shares of common stock outstanding during the period. Potentially dilutive shares of common stock consist of incremental shares of common stock issuable upon the exercise of stock options, vesting of stock awards and shares issuable in conjunction with convertible notes. The following table sets forth securities outstanding that were excluded from the computation of diluted net loss per share as their inclusion would be anti-dilutive (in thousands): June 30, 2021 2020 Options outstanding to purchase common stock 159 161 Unvested restricted common stock units 58 81 Convertible notes — 262 Warrants 139 1,879 Total 356 2,383 Note 2: Fair Value of Financial Instruments The estimated fair values of financial instruments outstanding were (in thousands): June 30, 2021 Unrealized Unrealized Fair Cost Gains Losses Value Cash and cash equivalents $ 13,475 $ — $ — $ 13,475 Short-term investments 6,094 — ( 3 ) 6,091 Long-term investments 3,485 — ( 1 ) 3,484 $ 23,054 $ — $ ( 4 ) $ 23,050 December 31, 2020 Unrealized Unrealized Fair Cost Gains Losses Value Cash and cash equivalents $ 5,889 $ — $ — $ 5,889 The following table represents the Company’s fair value hierarchy for its financial assets (cash equivalents and investments) (in thousands): June 30, 2021 Fair Value Level 1 Level 2 Level 3 Money market funds $ 8,246 $ 8,246 $ — $ — Corporate notes and commercial paper (1) $ 11,625 $ — $ 11,625 $ — $ 19,871 $ 8,246 $ 11,625 $ — December 31, 2020 Fair Value Level 1 Level 2 Level 3 Money market funds $ 3,893 $ 3,893 $ — $ — (1) Includes $ 2.0 million in cash and cash equivalents on the accompanying condensed consolidated balance sheet due to original maturities of less than three months. There were no transfers in or out of Level 1 and Level 2 securities during the six months ended June 30, 2021 or 2020. 10 Note 3. Balance Sheet Detail June 30, December 31, 2021 2020 (in thousands) Inventories: Work-in-process $ 769 $ 414 Finished goods 257 185 $ 1,026 $ 599 Note 4. Commitments and Contingencies Indemnification In the ordinary course of business, the Company enters into contractual arrangements under which it may agree to indemnify the counterparties from any losses incurred relating to breach of representations and warranties, failure to perform certain covenants, or claims and losses arising from certain events as outlined within the particular contract, which may include, for example, losses arising from litigation or claims relating to past performance. Such indemnification clauses may not be subject to maximum loss clauses. The Company has also entered into indemnification agreements with its officers and directors. No material amounts were reflected in the Company’s condensed consolidated financial statements for the six months ended June 30, 2021 or 2020 related to these indemnifications. The Company has not estimated the maximum potential amount of indemnification liability under these agreements due to the limited history of prior claims and the unique facts and circumstances applicable to each particular agreement. To date, the Company has not made any material payments related to these indemnification agreements. Legal Matters The Company is not a party to any legal proceeding that the Company believes is likely to have a material adverse effect on its condensed consolidated financial position or results of operations. From time to time the Company may be subject to legal proceedings and claims in the ordinary course of business. These claims, even if not meritorious, could result in the expenditure of significant financial resources and diversion of management efforts. Note 5. Business Segments, Concentration of Credit Risk and Significant Customers The Company operates in one business segment and uses one measurement of profitability for its business. Net revenue is attributed to the United States and to all foreign countries based on the geographical location of the customer. The Company recognized revenue from shipment of product and licensing of its technologies to customers by geographical location as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 North America $ 971 $ 1,807 $ 1,919 $ 2,618 Japan — 14 274 250 Taiwan 118 108 196 247 Rest of world 79 39 117 113 Total net revenue $ 1,168 $ 1,968 $ 2,506 $ 3,228 11 Customers who accounted for at least 10% of total net revenue were: Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Customer A 40 % 44 % 28 % 32 % Customer B 37 % 29 % 38 % 28 % Customer C 10 % *% *% *% Customer D *% *% 11 % *% * Represents less than 10% Four customers accounted for 95 % of accounts receivable as of June 30, 2021. Three customers accounted for 86 % of accounts receivable as of December 31, 2020. Note 6. Income Tax Provision The Company determines deferred tax assets and liabilities based upon the differences between the financial statement and tax bases of the Company’s assets and liabilities using tax rates in effect for the year in which the Company expects the differences to affect taxable income. A valuation allowance is established for any deferred tax assets for which it is more likely than not that all or a portion of the deferred tax assets will not be realized. The Company files U.S. federal and state and foreign income tax returns in jurisdictions with varying statutes of limitations. All tax returns from 2015 to 2020 may be subject to examination by the Internal Revenue Service, California and other states. Returns filed in foreign jurisdictions may be subject to examination for the years 2011 to 2020. As of June 30, 2021, the Company has no t recorded any liability for unrecognized tax benefits related to uncertain tax positions. Note 7. Stock-Based Compensation Common Stock Equity Plans In 2010, the Company adopted the 2010 Equity Incentive Plan and later amended it in 2014, 2017 and 2018 (the Amended 2010 Plan). The Amended 2010 Plan was terminated in August 2019 and remains in effect as to outstanding equity awards granted prior to the date of expiration. As of June 30, 2021, no new awards may be made under the Amended 2010 Plan, and equity awards for approximately 115,358 shares were outstanding. In August 2019, the Company’s stockholders approved the 2019 Stock Incentive Plan (the 2019 Plan), and it replaced the Amended 2010 Plan. The 2019 Plan authorizes the board of directors or the compensation committee of the board of directors to grant a broad range of awards including stock options, stock appreciation rights, restricted stock, performance-based awards, and restricted stock units. Under the 2019 Plan, 182,500 shares have been reserved for issuance. The 2019 Plan provides for annual option grants or other awards to the Company’s non-employee directors to acquire up to 2,000 shares and for a one-time grant of an option or other award to a non-employee director to acquire up to 6,000 shares upon his or her initial appointment or election to the board of directors. Under the 2019 Plan, the term of all incentive stock options granted to a person who, at the time of grant, owns stock representing more than 10 % of the voting power of all classes of the Company’s stock may not exceed five years . The exercise price of stock options granted under the 2019 Plan must be at least equal to the fair market value of the shares on the date of grant. Generally, awards under the 2019 Plan will vest over a three to four-year period, and options will have a term of 10 years from the date of grant. In addition, the 2019 Plan provides for automatic acceleration of vesting for options granted to non-employee directors upon a change of control of the Company. The Amended 2010 Plan and the 2019 Plan are referred to collectively as the “Plans.” The expense relating to stock options is recognized on a straight-line basis over the requisite service period, usually the vesting period, based on the grant-date fair value. The unamortized compensation cost, as of June 30, 2021, was $ 0.1 million related to stock options and is expected to be recognized as expense over a weighted-average period of approximately 1.04 years. The expense related to restricted stock units (RSUs) is generally recognized over a three-year vesting period and is based on the fair value of the underlying stock on the dates of grant. The unamortized 12 compensation cost, as of June 30 , 202 1 , was $ 0.5 million related to RSUs and is expected to be recognized as expense over a weighted-average period of approximately 0.9 years . For the three and six months ended June 30, 2021 and 2020, there were no excess tax benefits associated with the exercise of stock options due to the Company’s historical loss positions. Valuation Assumptions There were no stock options granted during the six months ended June 30, 2021 and 2020. Common Stock Options and Restricted Stock The term of all incentive stock options granted to a person who, at the time of grant, owns stock representing more than 10 % of the voting power of all classes of the Company’s stock may not exceed five years . The exercise price of stock options granted under the 2019 Plan must be at least equal to the fair market value of the shares on the date of grant. Generally, options granted under the 2019 Plan will vest over a three to four-year period and have a term of 10 years from the date of grant. In addition, the 2019 Plan provides for automatic acceleration of vesting for options granted to non-employee directors upon a change of control of the Company. The following table summarizes the activity in the shares available for grant under the Plans during the six months ended June 30, 2021 (in thousands, except exercise price): Options outstanding Weighted Shares Average Available Number of Exercise for Grant Shares Prices Balance as of January 1, 2021 81 159 $ 10.82 RSUs granted ( 10 ) — — Balance as of March 31, 2021 71 159 $ 10.82 RSUs granted ( 59 ) — — Balance as of June 30, 2021 12 159 $ 10.82 A summary of RSUs activity under the Plans is presented below (in thousands, except for fair value): Weighted Average Number of Grant-Date Shares Fair Value Non-vested shares as of January 1, 2021 65 $ 3.48 Granted 10 $ 3.25 Vested ( 17 ) $ 3.78 Non-vested shares as of March 31, 2021 58 $ 3.35 Granted 59 $ 6.70 Vested ( 2 ) $ 3.11 Non-vested shares as of June 30, 2021 115 $ 5.08 The fair value of the RSU granted during the six months ended June 30, 2021 was $ 0.4 million. 13 The following table summarizes significant ranges of outstanding and exercisable options as of June 30, 2021 (in thousands, except contractual life and exercise price): Options Outstanding Options Exercisable Weighted Average Remaining Weighted Weighted Contractual Average Average Aggregate Number Life Exercise Number Exercise Intrinsic Range of Exercise Price Outstanding (in Years) Price Exercisable Price value $1.57 - $14.99 143 7.77 $ 2.62 90 $ 2.84 $ 521 $15.00 - $25.59 8 2.24 $ 15.00 8 $ 15.00 $ — $25.60 - $143.99 2 2.86 $ 41.81 2 $ 41.81 $ — $144.00 - $409.99 5 5.15 $ 144.00 5 $ 144.00 $ — $410.00 - $924.00 1 3.69 $ 430.64 1 $ 430.64 $ — $1.57 - $924.00 159 7.30 $ 10.82 106 $ 15.09 $ 521 There was no stock options exercised during the six months ended June 30, 2021 and 2020. Note 8: Stockholders’ Equity In February 2021, the Company completed a registered direct offering of securities under an effective registration statement filed with the SEC pursuant to the Securities Act of 1933, as amended. In the offering, the Company sold 1,487,601 shares of common stock at a price of $ 5.00 per share to institutional investors. Net proceeds of the offering, after placement agent and other fees and expenses paid by the Company, were approximately $ 6.8 million. In June 2021, the Company completed a registered direct offering of securities under an effective registration statement filed with the SEC pursuant to the Securities Act of 1933, as amended. In the offering, the Company sold 1,818,181 shares of common stock at a price of $ 7.15 per share to institutional investors. Net proceeds of the offering, after placement agent and other fees and expenses paid by the Company, were approximately $ 12.0 million. During the six months ended June 30, 2021, the Company received a total of $ 4,174,018 of proceeds from the exercise of 1,739,174 warrants to purchase shares of common stock at a price of $ 2.40 per share. Note 9. Notes Payable Convertible Notes In March 2016, the Company entered into a 10 % Senior Secured Convertible Note Purchase Agreement (the Purchase Agreement) with the purchasers of $ 8,000,000 principal amount of 10% Senior Secured Convertible Notes due August 15, 2018 (the Notes), at par, in a private placement transaction effected pursuant to an exemption from the registration requirements under the Securities Act of 1933, as amended. Pursuant to amendments to the Notes and related documents in February and October 2018, the interest rate was reduced to 8 %, the maturity date of the Notes was extended to August 15, 2023, and the optional conversion price was reduced from $ 170.00 of Note principal per share of common stock to $ 11.434 of Note principal per share of common stock. In accordance with the October 2018 amendment to the Notes, the Company used $ 7.4 million of the proceeds from a public offering of securities effected in October 2018 to repay a portion of the Notes. Semi-annual interest payments have been made in each of February 2019, August 2019, February 2020 and August 2020 for approximately $ 78,000 , $ 109,000 , $ 112,000 and $ 122,000 , respectively, in-kind with the issue of additional notes (Interest Notes) to the Purchasers. The Interest Notes have terms identical to the Notes. The Company issued 42,672 shares of its common stock valued at $ 139,964 to the Note holder in settlement of the accrued interest of $ 123,066 for the six month period ended February 15, 2021. The Company recorded a loss of $ 16,898 on this payment, which was recorded in other income in the condensed consolidated statements of operation. In January and February 2021, a holder of warrants, who was also the holder of the Notes, exercised warrants to purchase 613,791 shares of the Company’s common stock at an exercise price of $ 2.40 per share for total proceeds of 14 $ 1,473,098 . The proceeds from the exercise of these warrants were used to repay a portion of the principal amount of the Notes. In March 2021, the Company made a repayment of $ 1,554,173 in settlement of the outstanding principal amount of the Notes, and the Note holder’s security interest was terminated. The Company recorded a gain of $ 64,757 on the Note settlement, and the gain was recorded in other income in the condensed consolidated statements of operations. PPP Note On May 7, 2020, the Company entered into a Promissory Note with Wells Fargo Bank, N.A. (the Lender) in an aggregate principal amount of $ 579,330 (the PPP Note), pursuant to the Paycheck Protection Program (the PPP) under the CARES Act. The Company applied to the Lender for forgiveness of the PPP Note, under the terms of the PPP, and, in May 2021, obtained forgiveness for the full amount of the PPP Note and recognized the forgiven amount in other income in the condensed consolidated statements of operations. Note 10. Leases The Company has one lease, which is the lease for its corporate facility that expires in July 2022, that it accounts for under Accounting Standards Update No. 2016-02. The right-of-use asset and corresponding liability for the facility lease have been measured at the present value of the future minimum lease payments. The discount rate used to measure the lease asset and liability represents the interest rate on the Notes ( 8 %). Lease expense is recognized on a straight-line basis over the lease term, and operating lease expense was approximately $ 0.1 million and $ 0.1 million for the six months ended June 30, 2021 and 2020, respectively. The Company does not have an option to extend the lease term beyond the current extension. Future minimum payments under the facility operating lease at June 30, 2021 were as follows (in thousands): Operating Year ending December 31, lease 2021 $ 104 2022 113 Total future lease payments 217 Less: imputed interest ( 6 ) Present value of lease liabilities $ 211 Supplemental cash flow information related to the operating lease was as follows (in thousands): Six Months Ended June 30, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for lease $ 101 $ 112 15