What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2020-08-10 compared with 2020-05-08 · 32 added, 13 removed, 536 unchanged (8% of the section changed)

82 unchanged sentences

In each of 2020, 2019 and 2018, we executed restructuring plans to make the operation of the Company more efficient.

While these restructuring plans were complete as of March 31, 2020, we may not be able to implement future restructuring programs as planned, and we may need to take additional measures to fulfill the objectives of our restructuring.

While these restructuring plans were complete as of June 30, 2020, we may not be able to implement future restructuring programs as planned, and we may need to take additional measures to fulfill the objectives of our restructuring.

The anticipated expenses associated with our restructuring programs may differ from or exceed our expectations, and we might not be able to realize the full amount of estimated savings from the restructuring programs, in a timely manner, or at all.

13 unchanged sentences

The display manufacturing market is highly concentrated and we are, and will continue to be, dependent on a limited number of customers and distributors for a substantial portion of our revenue.

Sales to our top distributor represented 13% , 28% and 34% of revenue for the three months ended March 31, 2020 and the years ended December 31, 2019 and 2018, respectively.

Sales to our top distributor represented 29%, 28% and 34% of revenue for the six months ended June 30, 2020 and the years ended December 31, 2019 and 2018, respectively.

If any of our distributors ceases to do business with us, it may be difficult for us to find adequate replacements, and even if we do, it may take some time.

The loss of any of our top distributors could negatively affect our results of operations.

Additionally, revenue attributable to our top five end customers represented 72% , 77% and 82% of revenue for the three months ended March 31, 2020 and the years ended December 31, 2019 and 2018, respectively.

As of March 31, 2020, we had four accounts that each represented 10% or more of accounts receivable.

Additionally, revenue attributable to our top five end customers represented 61%, 77% and 82% of revenue for the six months ended June 30, 2020 and the years ended December 31, 2019 and 2018, respectively.

As of June 30, 2020 we had two accounts that each represented 10% or more of accounts receivable.

As of December 31, 2019, we had three accounts that each represented 10% or more of accounts receivable.

38 unchanged sentences

We can provide no assurance that additional financing will be available at all or, if available, that we would be able to obtain additional financing on terms favorable to us.

We face risks related to the Paycheck Protection Program loan, which could negatively impact our financial position.

On April 25, 2020, the Company entered into a loan with Silicon Valley Bank as the lender in an aggregate principal amount of $796,242 (the “Loan”) pursuant to the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

The Loan is evidenced by a promissory note (the “Note”) dated April 25, 2020, and matures 2 years from the disbursement date.

The Note bears interest at a rate of 1.000% per annum, with the first six months of interest deferred.

Principal and interest are payable monthly commencing 6 months after the disbursement date and may be prepaid by the Company at any time prior to maturity with no prepayment penalties.

Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of loans granted under the PPP.

The Loan is subject to forgiveness to the extent proceeds are used for payroll costs, including payments required to continue group health care benefits, and certain rent, utility, and mortgage interest expenses (collectively, “Qualifying Expenses”), pursuant to the terms and limitations of the PPP.

The Company intends to use the Loan amount for Qualifying Expenses and intends to apply for forgiveness, however, no assurance is provided that the Company will obtain forgiveness of the Loan in whole or in part.

If forgiveness is not granted, the PPP Loan, in whole or in part, will need to be repaid by the Company, which could have an adverse effect on our future cash flows and financial position.

We license our intellectual property, which exposes us to risks of infringement or misappropriation, and may cause fluctuations in our operating results.

20 unchanged sentences

Sales outside the U.S.

accounted for approximately 88% , 95% and 98% of revenue for the three months ended March 31, 2020 and the years ended December 31, 2019 and 2018, respectively.

accounted for approximately 91%, 95% and 98% of revenue for the six months ended June 30, 2020 and the years ended December 31, 2019 and 2018, respectively.

We anticipate that sales outside the U.S.

250 unchanged sentences

We rely on a combination of patent, copyright, trademark and trade secret laws, as well as nondisclosure agreements and other methods, to help protect our proprietary technologies.

As of December 31, 2019, we held 347 patents and had 13 patent applications pending for protection of our significant technologies.

As of June 30, 2020, we held 345 patents and had 12 patent applications pending for protection of our significant technologies.

Competitors in both the U.S.

65 unchanged sentences

New equity securities issued by us could have rights, preferences or privileges senior to those of our common stock.

Additionally, pursuant to our “at the market” equity offering program, we may sell shares of our common stock having aggregate sales proceeds of up to $25 million from time to time through Cowen and Company, LLC, as our agent.

As of June 30, 2020, we had issued and sold 803,528 shares of our common stock pursuant to our “at the market” equity offering program, resulting in net proceeds to us of approximately $2.5 million.

Shares of our common stock having a value of approximately $22.5 million remain available for sale under this program.

The issuance and sale of additional shares of our common stock pursuant to our “at the market” equity offering program will have a dilutive impact on our existing stockholders.

Further, the issuance and sale of, or the perception that we may issue and sell, additional shares of common stock pursuant to our “at the market” equity offering program could have the effect of depressing the market price of our common stock or increasing the volatility thereof.

In addition, any such issuance by us or sales of our securities by our security holders, including by any of our affiliates, or the perception that such issuances or sales could occur, could negatively impact the market price of our securities.

39 unchanged sentences

9 to the Loan and Security Agreement, between Pixelworks, Inc.

and Silicon Valley Bank, dated April 17, 2020.

Summary of Pixelworks 2020 Non-Employee Director Compensation (incorporated by reference to Exhibit 10.9 to the Company's Annual Report on Form 10-K filed on March 11, 2020).

and Silicon Valley Bank, dated April 17, 2020 (incorporated by reference to E xhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on May 8, 2020).

10.2 Promissory Note between the Company and Silicon Valley Bank dated April 25, 2020 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 30, 2020).

10.3 Sales Agreement, dated June 5, 2020, between Pixelworks, Inc.

and Cowen and Company, LLC.

(incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed on June 5, 2020).

31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.

6 unchanged sentences

Section 1350).

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF XBRL Taxonomy Extension Definition Linkbase Document

101.LAB XBRL Taxonomy Label Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

__________________

2 unchanged sentences

PIXELWORKS, INC.

August 10, 2020 /s/ Elias N.

Vice President and Chief Financial Officer,

1 unchanged sentence

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

What changed 10-Q

Item 1A. Risk Factors