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Risks Related to COVID-19
−Removed: The ongoing effects of the COVID-19 pandemic has and may continue to disrupt our business or the business of our customers or suppliers, and as such, may adversely affect our financial condition.
+Added: The ongoing effects of the COVID-19 pandemic have and may continue to disrupt our business or the business of our customers or suppliers, and as such, may adversely affect our financial condition.
Our business, the businesses of our customers, and the businesses of our suppliers could be materially and adversely affected by the effects of the COVID-19 pandemic and the related governmental, business and community responses to it.
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and abroad have issued restrictive orders, including “shelter in place” or “stay at home” orders, that have restricted their residents from leaving their homes or returning to work.
−Removed: For example, Shanghai is currently on lockdown in response to China’s “zero covid” policy, and as a result, our Shanghai office is working fully remote.
+Added: For example, Shanghai was recently on lockdown in response to China’s “zero COVID” policy, and as a result, our Shanghai office was working fully remote.
Our Shanghai and Shenzhen offices have been alternating between full in-person staffing and remote staffing as local ordinances continue to change in response to new outbreaks.
−Removed: Currently, our Shenzhen office is operating with in-office staffing.
At Pixelworks, our offices in Japan and North America are currently operating in office and remotely.
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The continued uncertain global economic environment and volatility in global credit and financial markets could materially and adversely affect our business and results of operations.
−Removed: The state of the global economy continues to be uncertain.
−Removed: As a result of these conditions, our manufacturers, vendors and customers might experience deterioration of their businesses, cash flow shortages and difficulty obtaining financing, which could result in interruptions or delays in the performance of any contracts, reductions and delays in customer purchases, delays in or the inability of customers to obtain financing to purchase our products, and bankruptcy of customers.
+Added: The state of the global economy continues to be uncertain due to the continuing impacts of the COVID-19 pandemic and other changing economic conditions such as inflation, rising interest rates, lower consumer confidence, volatile equity capital markets, ongoing supply chain disruptions, and the impacts of the war in Ukraine.
+Added: As a result of these conditions, we and our manufacturers, vendors and customers might experience deterioration of our businesses, cash flow shortages and difficulty obtaining financing, which could result in interruptions or delays in the performance of any contracts, reductions and delays in customer purchases, delays in or the inability of customers to obtain financing to purchase our products, and bankruptcy of customers.
Furthermore, the constraints in the capital and credit markets, may limit the ability of our customers to meet their liquidity needs, which could result in an impairment of their ability to make timely payments to us and reduce their demand for our products, adversely impacting our results of operations and cash flows.
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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.
−Removed: Sales to our top distributor for the first three months of 2022 represented 32% of revenue.
+Added: Sales to our top distributor for the first six months of 2022 represented 35% of revenue.
Sales to our top distributor for the years ended December 31, 2021 and 2020 represented 27% and 7% of revenue, respectively.
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The loss of any of our top distributors could negatively affect our results of operations.
−Removed: Additionally, revenue attributable to our top five end customers represented 80%, 76% and 58% of revenue for the three months ended March 31, 2022 and the years ended December 31, 2021 and 2020, respectively.
−Removed: As of March 31, 2022 we had four accounts that each represented 10% or more of accounts receivable.
+Added: Additionally, revenue attributable to our top five end customers represented 79%, 76% and 58% of revenue for the six months ended June 30, 2022 and the years ended December 31, 2021 and 2020, respectively.
+Added: As of June 30, 2022 we had four accounts that each represented 10% or more of accounts receivable.
As of December 31, 2021, we had three accounts that each represented 10% or more of accounts receivable.
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Our net operating loss carryforwards may be limited or they may expire before utilization.
−Removed: As of December 31, 2021, we had federal, state and foreign net operating loss carryforwards of approximately $166.4 million, $6.8 million, and $39.5 million respectively, which will begin to expire in 2022.
+Added: As of December 31, 2021, we had federal, state and foreign net operating loss carryforwards of approximately $166.4 million, $6.8 million, and $39.5 million respectively.
+Added: A portion of our federal net operating loss carryforwards may expire in 2022 if not utilized.
These net operating loss carryforwards may be used to offset future taxable income and thereby reduce our income taxes otherwise payable.
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An ownership change is generally defined as a greater than 50% increase in equity ownership by 5% shareholders in any three-year period.
−Removed: In the event of certain changes in our shareholder base, we may at some time in the future experience an "ownership change" and the use of our federal net operating loss carryforwards
−Removed: may be limited.
−Removed: In addition, the Tax Cuts and Jobs Act (the "TCJA"), limits the deduction for net operating loss carryforwards to 80 percent of taxable income for losses arising in taxable years beginning after December 31, 2020.
+Added: In the event of certain changes in our shareholder base, we may at some time in the future experience an "ownership change" and the use of our federal net operating loss carryforwards may be limited.
+Added: In addition, the Tax Cuts and Jobs Act (the "TCJA"), limits the
+Added: deduction for net operating loss carryforwards to 80 percent of taxable income for losses arising in taxable years beginning after December 31, 2020.
We face a number of risks as a result of the concentration of our operations and customers in Asia.
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Sales outside the U.S.
−Removed: accounted for approximately 95%, 97% and 93% of revenue for the three months ended March 31, 2022 and the years ended December 31, 2021 and 2020, respectively.
+Added: accounted for approximately 97%, 97% and 93% of revenue for the six months ended June 30, 2022 and the years ended December 31, 2021 and 2020, respectively.
We anticipate that sales outside the U.S.
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• ensuring that we obtain complete and accurate information from our Asian operations to make proper disclosures in the United States;
−Removed: • political and economic instability;
+Added: • political and economic instability and tensions, including tensions between China and Taiwan;
• difficulties in maintaining sales representatives outside of the U.S.
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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.
−Removed: As of March 31, 2022, we held 334 patents and had 18 patent applications pending for protection of our significant technologies.
+Added: As of June 30, 2022, we held 301 patents and had 17 patent applications pending for protection of our significant technologies.
Competitors in both the U.S.
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For example, in December 2020, we completed a private placement of 3,200,000 shares of common stock to certain accredited investors at a purchase price of $2.071 per share.
−Removed: The issuance and sale of the shares in the private placement had a dilutive impact on our existing stockholders.
+Added: The issuance and sale of the shares in the private placement had a dilutive impact on our existing shareholders.
Additionally, also in December 2020, we completed the sale of 4,900,000 shares of common stock in an underwritten registered offering and an additional 735,000 shares were issued pursuant to the 30-day over-allotment option exercised by the underwriter, at a price to the public of $2.45 per share.
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.
−Removed: Through March 31, 2022, we sold an aggregate of 1,808,484 shares of our common stock under this at the market offering.
−Removed: The issuance and sale of additional shares of our common stock pursuant to our “at the market” equity offering program or otherwise will have a dilutive impact on our existing stockholders.
+Added: Through June 30, 2022, we sold an aggregate of 1,808,484 shares of our common stock under this at the market offering.
+Added: The issuance and sale of additional shares of our common stock pursuant to our “at the market” equity offering program or otherwise will have a dilutive impact on our existing shareholders.
Additionally, any new equity securities issued by us could have rights, preferences or privileges senior to those of our common stock.
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Under the Nasdaq Marketplace Rules our common stock must maintain a minimum price of $1.00 per share for continued inclusion on the Nasdaq Global Market.
−Removed: Our stock price was previously below $1.00 on May 6, 2009 and was $1.22 on February 12, 2016 and we cannot guarantee that our stock price will remain at or above $1.00 per share.
+Added: Our stock price was previously below $1.00 on May 6, 2009 and was $1.79 on July 6, 2022 and we cannot guarantee that our stock price will remain at or above $1.00 per share.
If the price again drops below $1.00 per share, our stock could become subject to delisting, and we may seek shareholder approval for a reverse stock split, which in turn could produce adverse effects and may not result in a long-term or permanent increase in the price of our common stock.
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or (iii) a minimum of $10.0 million in shareholders' equity, at least 750,000 publicly held shares and at least $5 million in market value of publicly held shares and at least two registered and active market makers.
−Removed: As of December 31, 2021, we were in compliance with these listing requirements.
+Added: As of June 30, 2022, we were in compliance with these listing requirements.
Our stock price is volatile and we believe that we continue to remain susceptible to the market value of our listed securities and/or the market value of our publicly held securities falling below $50.0 million and $15.0 million, respectively.
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and shareholders are required to provide advance notice for nominations for election to the board of directors or for proposing matters to be acted upon at a shareholder meeting;
−Removed: • Oregon law permits our board to consider other factors beyond stockholder value in evaluating any acquisition offer (so-called "expanded constituency" provisions);
+Added: • Oregon law permits our board to consider other factors beyond shareholder value in evaluating any acquisition offer (so-called "expanded constituency" provisions);
• a supermajority (67%) vote of shareholders is required to approve certain fundamental transactions.
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(incorporated by reference to Exhibit 3.3 to the Company's Annual Report on Form 10-K filed on March 10, 2010).
−Removed: 10.1 Supplemental Agreement to Capital Increase Agreement dated as of March 24, 2022 between the Company and the other parties named therein (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 28, 2022).
−Removed: 10.2 Side Letter to Capital Increase Agreement dated as of March 24, 2022 between the Company and the other parties named therein (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on March 28, 2022).
31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.
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PIXELWORKS, INC.
−Removed: May 10, 2022 /s/ Haley F.
+Added: August 10, 2022 /s/ Haley F.
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.