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Table of Contents

UNITED STATES

 

SECURITIES AND EXCHANGE COMMISSION

 

WASHINGTON, D.C. 20549

 


 

FORM 10-Q

 

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

 

 

For the quarterly period ended: March 31, 2024

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

 

 

For the transition period from to

 

Commission file number: 000-49842

 


 

CEVA, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

Delaware

77-0556376

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification No.)

   

15245 Shady Grove Road, Suite 400, Rockville, MD 20850

20850

(Address of Principal Executive Offices)

(Zip Code)

 

(240)-308-8328

(Registrants Telephone Number, Including Area Code)

 


 

Securities registered pursuant to Section 12(b) of the Act

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $.001 per share

CEVA

The NASDAQ Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one).

 

Large accelerated filer

Accelerated filer

       

Non-accelerated filer

Smaller reporting company

       

Emerging growth company

   

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes No ☒

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: 23,582,142 of common stock, $0.001 par value, as of May 6, 2024.

 

 

 

 

TABLE OF CONTENTS

 

 

Page

PART I.

FINANCIAL INFORMATION

5

Item 1.

Interim Condensed Consolidated Balance Sheets at March 31, 2024 (unaudited) and December 31, 2023

5

 

Interim Condensed Consolidated Statements of Loss (unaudited) for the three months ended March 31, 2024 and 2023

6

 

Interim Condensed Consolidated Statements of Comprehensive Loss (unaudited) for the three months ended March 31, 2024 and 2023

7

 

Interim Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the three months ended March 31, 2024 and 2023

8

 

Interim Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2024 and 2023

9

 

Notes to the Interim Condensed Consolidated Financial Statements

10

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

25

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

32

Item 4.

Controls and Procedures

33

   

PART II.         

OTHER INFORMATION

33

Item 1.    

Legal Proceedings

33

Item 1A.

Risk Factors

33

Item 2.  

Unregistered Sales of Equity Securities and Use of Proceeds

34

Item 3

Defaults Upon Senior Securities

34

Item 4

Mine Safety Disclosures

34

Item 5

Other Information

34

Item 6        

Exhibits

35

SIGNATURES

35

 

 

 

FORWARD-LOOKING STATEMENTS

 

FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

 

This Quarterly Report contains forward-looking statements that involve risks and uncertainties, as well as assumptions that if they materialize or prove incorrect, could cause the results of CEVA to differ materially from those expressed or implied by such forward-looking statements and assumptions.  All statements other than statements of historical fact are statements that could be deemed forward-looking statements.  Forward-looking statements are generally written in the future tense and/or are preceded by words such as “will,” “may,” “should,” “could,” “expect,” “suggest,” “believe,” “anticipate,” “intend,” “plan,” or other similar words.  Forward-looking statements include the following:

 

 

Our belief that our portfolio of wireless communications and sensing and edge AI technologies address some of the most important megatrends, including 5G, generative AI, industrial automation and vehicle electrification, and our belief in the continued interest in our IP portfolio due to these trends, in both traditional and new areas;

 

 

Our belief that our Bluetooth, Wi-Fi, Ultra Wide Band (UWB) and cellular IoT IPs allow us to address the high volume IoT industrial, consumer and smart home markets, and our expectation that the overall addressable market size will be more than 15 billion devices annually by 2027 based on research from ABI Research;

 

 

Our belief that Wi-Fi represents a significant royalty revenue opportunity in connection with our dominant market position in licensing Wi-Fi 6 and our leadership position in Wi-Fi 7 IP;

 

 

Our belief that our PentaG2 platform and digital signal processors (DSPs) for 5G mobile broadband and 5G RedCap is the most comprehensive baseband processor IP platform in the industry today and provides newcomers and incumbents with a comprehensive solution to address the need for 5G processing for smartphones, fixed wireless access, satellite communications and a range of connected devices such as robots, cars, smart cities and other devices for industrial applications;

 

 

Our belief that our PentaG RAN platform for 5G RAN settings is the most comprehensive baseband processor IP in the industry today and provides customers and incumbents with a comprehensive solution to address the need for 5G and other communications in data centers and infrastructure;

 

 

Our belief that the high volume consumer audio markets, including True Wireless Stereo (TWS) earbuds, smartwatches, AR and VR headsets, and other wearable assisted devices, offers an incremental growth segment for our Bluetooth, Audio AI DSPs and software IPs, and our belief in the capabilities of our RealSpace Spatial Audio & Head Tracking Solution, WhisPro speech recognition technology and ClearVox voice input software to enhance the user experience and offer premium features;

 

 

Our belief that our SensPro2 sensor hub AI DSP family can address the growing demand for efficient, high-performance signal processing in sensor-based applications across various industries for applications such as smartphones, automotive safety (ADAS), autonomous driving, drones, robotics, security and surveillance, augmented reality (AR) and virtual reality (VR), natural language processing and voice recognition, which enables us to address the transformation in devices enabled by these applications and expand our footprint and content in smartphones, drones, consumer cameras, surveillance, ADAS, voice-enabled devices and industrial IoT applications;

 

 

Statements regarding third-party estimates of industry growth and future market conditions, including research from Bloomberg Intelligence which forecasts that hardware revenue associated with computer vision AI products and conversational AI devices will reach $61 billion and $108 billion, respectively, by 2030, indicating the size of the market opportunity;

 

 

 

Our belief that our newest generation family of AI neural processing units (NPUs) present a highly efficient and high-performance architecture to enable generative and classic AI on any device including communication gateways, optically connected networks, cars, notebooks and tablets, AR/VR headsets, smartphones, and any other cloud or edge use case from the edge all the way to the cloud, and that more than 2.5 billion Edge AI devices will ship annually by 2026 based on research from Yole Group;

 

 

Our belief that our sensor fusion and spatial audio application software allows us to address an important technology piece used in personal computers, robotics, TWS earbuds, smart TVs and many other smart sensing IP products, in addition to our existing portfolio for camera-based computer vision and AI processing, and microphone-based sound processing;

 

 

Our belief that our customers can benefit from our capabilities as a complete, one-stop-shop for processing all classes and types of sensors;

 

 

Our belief that we are well positioned for long-term growth in shipments and royalty revenues derived from smart edge products as a result of our focus on silicon and software IP solutions that enable products to connect, sense and infer data;

 

 

Our belief that our ubiquitous technology and collaborative business model present a significant and secular growth prospect as the continuing digital transformation drives industries to become connected and intelligent;

 

 

Our intention to continue to capitalize on the semiconductor momentum with our portfolio of technologies to enable three main use cases associated with smart edge devices – connect, sense and infer, and to focus on four main markets which include consumer, automotive, industrial and infrastructure, and our belief that such markets are large, diversified and represent the greatest opportunities for long-term growth;

 

 

Any statements regarding sales trends and financial results for the second, third and fourth quarter of and full year 2024 and other future periods, including our expectations with respect to future customers, contracts, revenues and expenses, regarding our customer pipeline, that a significant portion of our future revenues will continue to be generated by a limited number of customers in part due to consolidation in the semiconductor industry, that international customers will continue to account for a significant portion of our revenues for the foreseeable future, that an increasing portion of our new customers and revenues will be derived from international customers generally and sales to the Asia Pacific and China in particular, that we can expand our customer base and revenues in Europe and the U.S., and that we will experience year-over-year revenue growth in 2024;

 

 

Our belief that our cash and cash equivalents, short-term bank deposits and marketable securities, along with cash from operations, will provide sufficient capital to fund our operations for at least the next 12 months; and

 

 

Our belief that fluctuations in high interest rates within our investment portfolio will not have a material effect on our financial position on an annual or quarterly basis.

 

Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The forward-looking statements contained in this report are based on information that is currently available to us and expectations and assumptions that we deem reasonable at the time the statements were made. We do not undertake any obligation to update any forward-looking statements in this report or in any of our other communications, except as required by law. All such forward-looking statements should be read as of the time the statements were made and with the recognition that these forward-looking statements may not be complete or accurate at a later date.

 

Many factors may cause actual results to differ materially from those expressed or implied by the forward-looking statements contained in this report. These factors include, but are not limited to, those risks set forth in Part II – Item 1A – “Risk Factors” of this Form 10-Q.

 

This report contains market data prepared by third party research firm. Actual market results may differ from their projections.

 

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. FINANCIAL STATEMENTS

 

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

 


 

U.S. dollars in thousands, except share and per share data

 

   

March 31,

2024

   

December 31,
2023

 
                 

ASSETS

               

Current assets:

               

Cash and cash equivalents

  $ 21,222     $ 23,287  

Short-term bank deposits

    10,662       10,556  

Marketable securities

    126,870       132,695  

Trade receivables (net of allowance for credit losses of $288 at both March 31, 2024 and December 31, 2023)

    33,635       30,307  

Prepaid expenses and other current assets

    13,378       12,526  

Total current assets

    205,767       209,371  

Long-term assets:

               

Severance pay fund

    6,897       7,070  

Deferred tax assets, net

    1,239       1,609  

Property and equipment, net

    7,157       6,732  

Operating lease right-of-use assets

    6,704       6,978  

Goodwill

    58,308       58,308  

Intangible assets, net

    2,689       2,967  

Investments in marketable equity securities

    346       406  

Other long-term assets

    12,332       10,644  

Total long-term assets

    95,672       94,714  

Total assets

  $ 301,439     $ 304,085  
                 

LIABILITIES AND STOCKHOLDERS EQUITY

               

Current liabilities:

               

Trade payables

  $ 1,804     $ 1,154  

Deferred revenues

    2,479       3,018  

Accrued expenses and other payables

    4,984       5,800  

Accrued payroll and related benefits

    14,854       14,402  

Operating lease liabilities

    2,634       2,513  

Total current liabilities

    26,755       26,887  

Long-term liabilities:

               

Accrued severance pay

    7,339       7,524  

Operating lease liabilities

    3,525       3,943  

Other accrued liabilities

    1,471       1,390  

Total long-term liabilities

    12,335       12,857  

Stockholders’ equity:

               

Preferred Stock: $0.001 par value: 5,000,000 shares authorized; none issued and outstanding

           

Common Stock: $0.001 par value: 45,000,000 shares authorized; 23,695,190 shares issued at March 31, 2024 and December 31, 2023. 23,581,522 and 23,440,848 shares outstanding at March 31, 2024 and December 31, 2023, respectively

    24       23  

Additional paid in-capital

    252,927       252,100  

Treasury stock at cost (113,668 and 254,342 shares of common stock at March 31, 2024, and December 31, 2023, respectively)

    (2,528 )     (5,620 )

Accumulated other comprehensive loss

    (2,720 )     (2,329 )

Retained earnings

    14,646       20,167  

Total stockholders’ equity

    262,349       264,341  

Total liabilities and stockholders’ equity

  $ 301,439     $ 304,085  

 

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

 

 

 

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF LOSS (UNAUDITED)

 

U.S. dollars in thousands, except per share data

 

 


 

   

Three months ended

 
   

March 31,

 
   

2024

   

2023

 

Revenues:

               

Licensing and related revenue

  $ 11,414     $ 18,248  

Royalties

    10,658       8,014  

Total revenues

    22,072       26,262  

Cost of revenues

    2,503       3,508  

Gross profit

    19,569       22,754  

Operating expenses:

               

Research and development, net

    17,991       18,674  

Sales and marketing

    2,816       2,719  

General and administrative

    3,572       3,827  

Amortization of intangible assets

    150       154  

Total operating expenses

    24,529       25,374  

Operating loss

    (4,960 )     (2,620 )

Financial income, net

    1,257       1,455  

Remeasurement of marketable equity securities

    (60 )     (117  

Loss from continuing operation before taxes on income

    (3,763 )     (1,282

Income tax expense

    1,685       1,417  

Net loss from continuing operation

    (5,448 )     (2,699

Discontinued operation (Note 4):

               

Net loss from discontinued operation

          (2,173  

Net loss

  $ (5,448 )   $ (4,872
                 

Basic and diluted net loss per share from continuing operation

  $ (0.23 )   $ (0.12  

Basic and diluted net loss per share from discontinued operation

  $     $ (0.09

Basic and diluted net loss per share

  $ (0.23 )   $ (0.21
                 
                 

Weighted-average shares used to compute net loss per share (in thousands):

               

Basic and diluted

    23,508       23,334  

 

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

 

 

 

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)

 

U.S. dollars in thousands

 

 


 

    Three months ended  
   

March 31,

 
   

2024

   

2023

 
                 

Net loss:

  $ (5,448 )   $ (4,872 )

Other comprehensive income (loss) before tax:

               

Available-for-sale securities:

               

Changes in unrealized gains (losses)

    200       730  

Reclassification adjustments for gains included in net loss

    (4 )     (92 )

Net change

    196       638  

Cash flow hedges:

               

Changes in unrealized gains (losses)

    (195 )     (425 )

Reclassification adjustments for (gains) losses included in net loss

    (380 )     171  

Net change

    (575 )     (254 )

Other comprehensive income (loss) before tax

    (379 )     384  

Income tax expense related to components of other comprehensive income (loss)

    12       45  

Other comprehensive income (loss), net of taxes

    (391 )     339  

Comprehensive loss

  $ (5,839 )   $ (4,533 )

 

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

 

 

 

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY (UNAUDITED)

 

U.S. dollars in thousands, except share data

 

 


 

   

Common stock

                                         

Three months ended March 31, 2024

 

Number of shares outstanding

   

Amount

    Additional
paid-in
capital
   

Treasury stock

   

Accumulated other comprehensive income (loss)

    Retained
earnings
    Total
stockholders
equity
 

Balance as of January 1, 2024

    23,440,848     $ 23     $ 252,100     $ (5,620 )   $ (2,329 )   $ 20,167     $ 264,341  

Net loss

                                  (5,448 )     (5,448 )

Other comprehensive loss, net

                            (391 )           (391 )

Equity-based compensation

                3,571                         3,571  

Purchase of treasury stock

    (56,872 )                 (1,278 )                 (1,278 )

Issuance of treasury stock upon exercise of stock-based awards

    197,546       1       (2,744 )     4,370             (73 )     1,554  

Balance as of March 31, 2024

    23,581,522     $ 24     $ 252,927     $ (2,528 )   $ (2,720 )   $ 14,646     $ 262,349  

 

 

   

Common stock

                                         

Three months ended March 31, 2023

 

Number of shares outstanding

   

Amount

    Additional
paid-in
capital
   

Treasury stock

    Accumulated other comprehensive income (loss)     Retained
earnings
    Total
stockholders’
equity
 

Balance as of January 1, 2023

    23,215,439     $ 23     $ 242,841     $ (9,904 )   $ (6,249 )   $ 32,160     $ 258,871  

Net loss

                                  (4,872 )     (4,872 )

Other comprehensive income

                            339             339  

Equity-based compensation

                3,859                         3,859  

Issuance of treasury stock upon exercise of stock-based awards

    200,587             (3,559 )     5,232                   1,673  

Balance as of March 31, 2023

    23,416,026     $ 23     $ 243,141     $ (4,672 )   $ (5,910 )   $ 27,288     $ 259,870  

 

The accompanying notes are an integral part of the consolidated financial statements.

 

 

 

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

U.S. dollars in thousands

 

 


 

   

Three months ended
March 31,

 
   

2024

   

2023

 

Cash flows from operating activities:

               

Net loss

  $ (5,448 )   $ (4,872 )

Adjustments required to reconcile net loss to net cash used in operating activities:

               

Depreciation

    700       742  

Amortization of intangible assets

    278       677  

Equity-based compensation

    3,571       3,859  

Realized gain on sale of available-for-sale marketable securities

    (4 )     (92 )

Amortization of premiums (accretion of discount) on available-for-sale marketable securities

    (191 )     23  

Unrealized foreign exchange (gain) loss

    165       (285 )

Remeasurement of marketable equity securities

    60       117  

Changes in operating assets and liabilities:

               

Trade receivables, net

    (3,003 )     (3,802 )

Prepaid expenses and other assets

    (3,194 )     (2,205 )

Operating lease right-of-use assets

    274       249  

Accrued interest on bank deposits

    (106 )     (125 )

Deferred tax, net

    358       (880 )

Trade payables

    433       (412 )

Deferred revenues

    (539 )     838  

Accrued expenses and other payables

    (973 )     357  

Accrued payroll and related benefits

    510       702  

Operating lease liability

    (235 )     (275 )

Accrued severance pay, net

    (6 )     308  

Net cash used in operating activities

    (7,350 )     (5,076 )
                 

Cash flows from investing activities:

               

Purchase of property and equipment

    (904 )     (105 )

Proceeds from the sale of Intrinsix (see note 4)

    540        

Asset acquisition

    (753 )      

Investment in available-for-sale marketable securities

    (12,653 )      

Proceeds from maturity of available-for-sale marketable securities

    14,080       1,750  

Proceeds from sale of available-for-sale marketable securities

    4,789       4,895  

Net cash provided by investing activities

    5,099       6,540  
                 

Cash flows from financing activities:

               

Purchase of treasury stock

    (1,278 )      

Proceeds from exercise of stock-based awards

    1,554       1,673  

Net cash provided by financing activities

    276       1,673  

Effect of exchange rate changes on cash and cash equivalents

    (90 )     61  

Increase (decrease) in cash and cash equivalents

    (2,065 )     3,198  

Cash and cash equivalents at the beginning of the period

    23,287       21,285  

Cash and cash equivalents at the end of the period

  $ 21,222     $ 24,483  
                 

Supplemental information of cash-flow activities:

               

Cash paid during the period for:

               

Income and withholding taxes

  $ 873     $ 1,860  

Non-cash transactions:

               

Property and equipment purchases incurred but unpaid at period end

  $ 200     $ 234  

Right-of-use assets obtained in the exchange for operating lease liabilities

  $ 303     $ 506  
                 

Reconciliation of cash and cash equivalents as shown in the condensed consolidated statements of cash flow:

               
                 

Cash and cash equivalents in the Condensed Consolidated Balance Sheets

  $ 21,222     $ 24,209  

Cash and cash equivalents included in assets of discontinued operation

  $     $ 274  

Total cash and cash equivalents in the Condensed Consolidated Statements of Cash Flows

  $ 21,222     $ 24,483  

 

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

 

 

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

(in thousands, except share data)

 

 

NOTE 1:

BUSINESS

 

The financial information in this quarterly report includes the results of Ceva, Inc. and its subsidiaries (the “Company” or “Ceva”).

 

Ceva is the leader in innovative silicon and software IP solutions that enable smart edge products to connect, sense, and infer data more reliably and efficiently. With the industry’s only portfolio of comprehensive communications and scalable edge AI IP, Ceva powers the connectivity, sensing, and inference in today’s most advanced smart edge products across consumer IoT, mobile, automotive, infrastructure, industrial, and personal computing. More than 17 billion of the world’s most innovative smart edge products from AI-infused smartwatches, IoT devices and wearables to autonomous vehicles, 5G mobile networks and more are powered by Ceva.

 

Ceva is a trusted partner to many of the leading semiconductor and original equipment manufacturer (OEM) companies targeting a wide variety of cellular and IoT end markets, including mobile, PC, consumer, automotive, smart-home, surveillance, robotics, industrial and medical. The customers incorporate Ceva’s IP into application-specific integrated circuits (ASICs) and application-specific standard products (ASSPs) that they manufacture, market and sell to consumer electronics companies. Ceva’s application software IP is licensed primarily to OEMs who embed it in their System on Chip (SoC) designs to enhance the user experience, and OEMs also license Ceva’s hardware IP products and solutions for their SoC designs to create power-efficient, intelligent, secure and connected devices.

 

Ceva’s wireless communications, sensing and edge AI technologies are at the heart of some of today’s most advanced smart edge products. From Bluetooth connectivity, Wi-Fi, ultra-wide band (UWB) and 5G platform IP for ubiquitous, robust communications, to scalable edge AI neural processing unit (NPU) IPs, sensor fusion processors and embedded application software that make devices smarter.

 

Ceva licenses its portfolio of wireless communications and scalable edge AI IP to its customers, breaking down barriers to entry and enabling them to bring new cutting-edge products to market faster, more reliably, efficiently and economically.

 

 

 

NOTE 2:

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The interim condensed consolidated financial statements have been prepared according to U.S. Generally Accepted Accounting Principles (“U.S. GAAP”).

 

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

 

The significant accounting policies applied in the annual consolidated financial statements of the Company as of December 31, 2023, contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 7, 2024, have been applied consistently in these unaudited interim condensed consolidated financial statements.

 

Accounting Standards Recently Adopted by the Company

 

In June 2022, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which clarifies the guidance when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The guidance is effective for annual periods beginning after December 15, 2023, with early adoption permitted. The Company adopted ASU 2022-03 as of January 1, 2024. The adoption did not result in a material impact on the Company's interim condensed financial statements.

 

Accounting Standards Recently Issued, Not Yet Adopted by the Company

 

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2023-07.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2023-09.

 

 
10

 
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS- CONTINUED (UNAUDITED)

 

(in thousands, except share data)

 

Use of Estimates

 

The preparation of the interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company’s management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates of the financial statements, the reported amounts of revenues and expenses during the reporting period, and amounts classified as a discontinued operation. Actual results could differ from those estimates.

 

 

 

NOTE 3:

ACQUISITION

 

In January 2024, the Company acquired 100% of the equity shares of a privately held, Greek-based company, to extend the research and development resources in the Ceva group. Under the terms of the purchase agreement, the Company agreed to pay an aggregate of approximately $750 paid at closing and approximately $2,100 subject to continued employment and certain performance milestones. The Company has accounted for this acquisition as an asset acquisition. As such, the total purchase consideration was allocated to the assets acquired.

 

 

 

NOTE 4:

HELD FOR SALE AND DISCONTINUED OPERATION

 

On September 14, 2023, the Company and Intrinsix, then its wholly owned subsidiary, entered into a Share Purchase Agreement (the “Agreement”) with Cadence Design Systems, Inc. (“Cadence”), pursuant to which Cadence agreed to purchase all of the issued and outstanding capital shares of Intrinsix from the Company for $35,000 in cash, subject to other certain purchase price adjustments as provided for in the Agreement (the “Transaction”). The closing of the Transaction occurred on October 2, 2023. At the closing, an amount of $300 from the consideration was deposited with a third-party escrow agent for the purposes of satisfying any additional post-closing purchase price adjustments owed by the Company to Cadence (was fully paid to the Company during the first quarter of 2024), a further amount of $3,500 of the consideration was deposited with the same escrow agent for a period of 18 months as security for the Company’s indemnification obligations to Cadence in accordance with the terms and conditions set forth in the Agreement, and after giving effect to post-closing adjustments resulting in a $240 repayment to the Company during the first quarter of 2024. The Agreement includes certain representations, warranties and covenants of the parties, and the Company also agreed to certain non-competition and non-solicitation terms, which are subject to certain exceptions.

 

Under ASC 205-20, "Discontinued Operation" when a component of an entity, as defined in ASC 205-20, has been disposed of or is classified as held for sale, the results of its operations, including the gain or loss on its component are classified as discontinued operations and the assets and liabilities of such component are classified as assets and liabilities attributed to discontinued operations; that is, provided that the operations, assets and liabilities and cash flows of the component have been eliminated from the Company’s consolidated operations and the Company will have no significant continuing involvement in the operations of the component.

 

As a result of the Transaction, Intrinsix's results of operations and asset and liability balances are disclosed as a discontinued operation. All prior periods comparable results of operation, assets and liabilities have been retroactively included in discontinued operations.

 

11

 
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS- CONTINUED (UNAUDITED)

 

The following table shows the Company's results of discontinued operation for the below presented period:

 

   

Three months

ended March

31, 2023

(unaudited)

 

Revenues

  $ 2,473  

Cost of revenue

    1,807  

Gross profit

    666  

Operating expenses:

       

Research and development, net

    2,117  

Sales and marketing

    326  

General and administrative

    221  

Amortization of intangible assets

    175  

Total operating expenses

    2,839  

Operating loss

    (2,173 )

Financial income, net

     

Loss from discontinued operations before taxes on income

    (2,173 )

Income tax expense

     

Net loss from discontinued operation

  $ (2,173 )

 

The following table presents cash flows from discontinued operations:

 

   

Three months

ended March

31, 2023

(unaudited)

 

Net cash flows used in operating activities (*)

  $ (1,230 )

 

(*) Amortization and depreciation allocated to discontinued operation for the three-month period ended March 31, 2023 amounted to $492.

 

 

NOTE 5:

REVENUE RECOGNITION

 

Under ASC No. 606, “Revenue from Contracts with Customers” (“ASC 606”), an entity recognizes revenue when or as it satisfies a performance obligation by transferring intellectual property (“IP”) licenses or services to the customer, either at a point in time or over time. The Company recognizes most of its revenues at a point in time upon delivery when the customer accepts control of the IP. The Company recognizes revenue over time on significant license customization contracts that are in the scope of ASC 606 by using cost inputs to measure progress toward completion of its performance obligations.

 

Revenues that are derived from the sale of a licensee’s products that incorporate the Company’s IP are classified as royalty revenues. Royalty revenues are recognized during the quarter in which the sale of the product incorporating the Company’s IP occurs. Royalties are calculated either as a percentage of the revenues received by the Company’s licensees on sales of products incorporating the Company’s IP or on a per unit basis, as specified in the agreements with the licensees. When the Company does not receive actual sales data from the customer prior to the finalization of its financial statements, royalty revenues are recognized based on the Company’s estimation of the customer’s sales during the quarter.

 

12

 
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS- CONTINUED (UNAUDITED)

 

The following table includes estimated revenue expected to be recognized in future periods related to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. The estimated revenues do not include amounts of royalties or unexercised contract renewals:

 

   

Remainder

of 2024

   

2025

   

2026 and

thereafter

 

Licensing and related revenues

  $ 4,028     $ 1,015     $ 322  

 

Disaggregation of revenue:

 

The following table provides information about disaggregated revenue by primary geographical, use cases for the Company's technology portfolio, and timing of revenue recognition:

 

 

   

Three months ended March 31, 2024

(unaudited)

   

Three months ended March 31, 2023

(unaudited)

 
   

Licensing and related

revenues

   

Royalties

   

Total

   

Licensing and related

revenues

   

Royalties

   

Total

 

Geography

                                               

United States

  $ 383     $ 2,155     $ 2,538     $ 702     $ 1,650     $ 2,352  

Europe and Middle East

    601       911       1,512       1,950       859       2,809  

Asia Pacific

    10,417       7,592       18,009       15,121       5,505       20,626  

Other

    13             13       475             475  

Total

  $ 11,414     $ 10,658     $ 22,072     $ 18,248     $ 8,014     $ 26,262  
                                                 

Use cases for the Company’s technology portfolio

                                               

Connect (baseband for handset and other devices, Bluetooth, Wi-Fi and NB-IoT)

  $ 10,067     $ 7,939     $ 18,006     $ 15,924     $ 5,665     $ 21,589  

Sense & Infer (sensor fusion, audio, sound, imaging, vision and AI)

    1,347       2,719       4,066       2,324       2,349       4,673  

Total

  $ 11,414     $ 10,658     $ 22,072     $ 18,248     $ 8,014     $ 26,262  
                                                 

Timing of revenue recognition

                                               

Products transferred at a point in time

  $ 9,453     $ 10,658     $ 20,111     $ 14,621     $ 8,014     $ 22,635  

Products and services transferred over time

    1,961             1,961       3,627             3,627  

Total

  $ 11,414     $ 10,658     $ 22,072     $ 18,248     $ 8,014     $ 26,262  

 

13

 
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS- CONTINUED (UNAUDITED)

 

Contract balances:

 

The following table provides information about trade receivables, unbilled receivables and contract liabilities from contracts with customers:

 

   

March 31,

2024

   

December 31,

2023

 
                 

Trade receivables

  $ 14,052     $ 8,433  

Unbilled receivables (associated with licensing and related revenue)

    9,600       9,735  

Unbilled receivables (associated with royalties)

    9,983       12,139  

Deferred revenues (short-term contract liabilities)

    2,479       3,018  

 

The Company receives payments from customers based upon contractual payment schedules; trade receivables are recorded when the right to consideration becomes unconditional, and an invoice is issued to the customer. Unbilled receivables associated with licensing and other include amounts related to the Company’s contractual right to consideration for completed performance objectives not yet invoiced. Unbilled receivables associated with royalties are recorded as the Company recognizes revenues from royalties earned during the quarter, but not yet invoiced, either by actual sales data received from customers, or, when applicable, by the Company’s estimation. Contract liabilities (deferred revenue) include payments received in advance of performance under the contract, and are realized with the associated revenue recognized under the contract.

 

During the three months ended March 31, 2024, the Company recognized $1,179 that was included in deferred revenues (short-term contract liability) balance at January 1, 2024. 

 

 

 

NOTE 6:

LEASES

 

The Company leases substantially all of its office space and vehicles under operating leases. The Company's leases have original lease periods expiring between 2025 and 2034. Many leases include one or more options to renew. The Company does not assume renewals in its determination of the lease term unless the renewals are deemed to be reasonably certain. Lease payments included in the measurement of the lease liability comprise the following: the fixed non-cancelable lease payments, payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and payments for early termination options unless it is reasonably certain the lease will not be terminated early.

 

14

 
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS- CONTINUED (UNAUDITED)

 

The following is a summary of weighted average remaining lease terms and discount rates for all of the Company’s operating leases:

 

   

March 31, 2024

(Unaudited)

 

Weighted average remaining lease term (years)

    3.97  

Weighted average discount rates

    4.00

%

 

Total operating lease cost and cash payments for operating leases were as follows:

 

   

Three months ended
March 31,

 
   

2024

   

2023

 
   

(unaudited)

   

(unaudited)

 
                 

Operating lease cost

  $ 663     $ 753  

Cash payments for operating leases

    622       727  

 

Maturities of lease liabilities are as follows:

 

The remainder of 2024

 

$2,082

 

2025

    2,027  

2026

    880  

2027

    640  

2028

    332  

2029 and thereafter

    621  

Total undiscounted cash flows

    6,582  

Less imputed interest

    423  

Present value of lease liabilities

  $ 6,159  

 

 

 

NOTE 7:

MARKETABLE SECURITIES

 

The following is a summary of available-for-sale marketable securities:

 

   

March 31, 2024 (Unaudited)

 
   

Amortized
cost

   

Gross
unrealized
gains

   

Gross
unrealized
losses

   

Fair
value

 

Available-for-sale - matures within one year:

                               

Corporate bonds

  $ 49,434     $ 45     $ (743 )   $ 48,736  
                                 

Available-for-sale - matures after one year through three years:

                               

Corporate bonds

    80,935       127       (2,928 )     78,134  

Total

                               
    $ 130,369     $ 172     $ (3,671 )   $ 126,870  

 

15

 
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS- CONTINUED (UNAUDITED)

 

   

December 31, 2023

 
   

Amortized
cost

   

Gross
unrealized
gains

   

Gross
unrealized
losses

   

Fair
value

 

Available-for-sale - matures within one year:

                               

Corporate bonds

  $ 27,690     $ 4     $ (243 )   $ 27,451  
                                 

Available-for-sale - matures after one year through three years:

                               

Corporate bonds

    108,700       278       (3,734 )     105,244  
                                 

Total

  $ 136,390     $ 282     $ (3,977 )   $ 132,695  

 

The following table presents gross unrealized losses and fair values for those investments that were in an unrealized loss position as of March 31, 2024, and December 31, 2023, and the length of time that those investments have been in a continuous loss position:

 

   

Less than 12 months

   

12 months or greater

 
   

Fair value

   

Gross

unrealized

loss

   

Fair value

   

Gross

unrealized

loss

 

As of March 31, 2024 (unaudited)

  $ 23,123     $ (147 )   $ 76,036     $ (3,524 )

As of December 31, 2023

  $ 18,193     $ (49 )   $ 86,643     $ (3,928 )

 

As of March 31, 2024, the allowance for credit losses was not material.

 

The following table presents gross realized gains and losses from sale of available-for-sale marketable securities:

 

   

Three months ended
March 31,

 
   

2024

   

2023

 
   

(unaudited)

    (unaudited)  
                 

Gross realized gains from sale of available-for-sale marketable securities

  $ 9     $ 92  

Gross realized losses from sale of available-for-sale marketable securities

  $ (5 )   $  

 

 

 

NOTE 8:

FAIR VALUE MEASUREMENT

 

FASB ASC No. 820, “Fair Value Measurements and Disclosures” defines fair value, establishes a framework for measuring fair value. Fair value is an exit price, representing the amount that would be received for selling an asset or paid for the transfer of a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

 

Level I

Unadjusted quoted prices in active markets that are accessible on the measurement date for identical, unrestricted assets or liabilities;

Level II

Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level III

Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

 

16

 
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS- CONTINUED (UNAUDITED)

 

The Company measures its marketable securities, investments in marketable equity securities and foreign currency derivative contracts at fair value. The carrying amount of cash, cash equivalents, short-term bank deposits, trade receivables, other accounts receivable, trade payables and other accounts payables approximate fair value due to the short-term maturity of these instruments. Investments in marketable equity securities are classified within Level I as the securities are traded in an active market. Marketable securities and foreign currency derivative contracts are classified within Level II as the valuation inputs are based on quoted prices and market observable data of similar instruments.

 

The table below sets forth the Company’s assets and liabilities measured at fair value by level within the fair value hierarchy. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

 

Description

 

March 31, 2024

(unaudited)

   

Level I

(unaudited)

   

Level II

(unaudited)

   

Level III (unaudited)

 

Assets:

                               

Marketable securities:

                               

Corporate bonds

  $ 126,870           $ 126,870        

Foreign exchange contracts

    413             413        

Investments in marketable equity securities

    346       346              

 

Description

 

December 31,

2023

   

Level I

   

Level II

   

Level III

 

Assets:

                               

Marketable securities:

                               

Corporate bonds

  $ 132,695           $ 132,695        

Foreign exchange contracts

    988             988        

Investments in marketable equity securities

    406       406              

 

 

 

NOTE 9:

GEOGRAPHIC INFORMATION AND MAJOR CUSTOMER DATA

 

 

a.

Summary information about geographic areas:

 

The Company manages its business on the basis of one reportable segment: the licensing of intellectual property to semiconductor companies and electronic equipment manufacturers (see Note 1 for a brief description of the Company’s business). The following is a summary of revenues within geographic areas:

 

   

Three months ended
March 31,

 
   

2024

(unaudited)

   

2023

(unaudited)

 

Revenues based on customer location:

               

United States

  $ 2,538     $ 2,352  

Europe and Middle East

    1,512       2,809  

Asia Pacific (1)

    18,009       20,626  

Other

    13       475  
    $ 22,072     $ 26,262  
                 

(1) China

  $ 13,592     $ 17,763  

 

17

 
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS- CONTINUED (UNAUDITED)

 

 

b.

Major customer data as a percentage of total revenues:

 

The following table sets forth the customers that represented 10% or more of the Company’s total revenues in each of the periods set forth below. 

 

   

Three months ended
March 31,

 
   

2024

(unaudited)

   

2023

(unaudited)

 
                 

Customer A

    15 %       *)

Customer B

    14 %       *)

Customer C

      *)     14 *)
                 
*) Less than 10%                

 

 

 

NOTE 10:

NET LOSS PER SHARE OF COMMON STOCK

 

Basic net income (loss) per share is computed based on the weighted average number of shares of common stock outstanding during each period. Diluted net income (loss) per share is computed based on the weighted average number of shares of common stock outstanding during each period, plus dilutive potential shares of common stock considered outstanding during the period, in accordance with FASB ASC No. 260, “Earnings Per Share.”

 

   

Three months ended
March 31,

 
   

2024

(unaudited)

   

2023

(unaudited)

 

Numerator:

               

Net loss from continuing operation

  $ (5,448 )   $ (2,699 )

Net loss from discontinued operation

          (2,173 )

Net loss

  $ (5,448 )   $ (4,872 )

Denominator (in thousands):

               

Basic and diluted weighted-average common stock outstanding

    23,508       23,334  
                 

Basic and diluted net loss per share from continuing operation

  $ (0.23 )   $ (0.12 )

Basic and diluted net loss per share from discontinued operation

  $     $ (0.09 )

Basic and diluted net loss per share

  $ (0.23 )   $ (0.21 )

 

The total number of shares related to outstanding equity-based awards was 1,560,454 and 1,181,119 for the three months ended March 31, 2024 and 2023, respectively, and in each case was excluded from the calculation of diluted net loss per share.

 

 

 

NOTE 11:

COMMON STOCK AND STOCK-BASED COMPENSATION PLANS

 

The Company has historically granted a mix of stock options, stock appreciation rights (“SARs”) capped with a ceiling and restricted stock units (“RSUs”) to employees and non‑employee directors of the Company and its subsidiaries under the Company’s equity plans and provides the right to purchase common stock pursuant to the Company’s 2002 employee stock purchase plan to employees of the Company and its subsidiaries. As of March 31, 2024, and December 31, 2023, there were no outstanding or exercisable SARs left.

 

18

 
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS- CONTINUED (UNAUDITED)

 

The options granted under the Company’s stock incentive plans have been granted at the fair market value of the Company’s common stock on the grant date. Options granted to employees under stock incentive plans generally vest at a rate of 25% of the shares underlying the option after one year and the remaining shares vest in equal portions over the following 36 months, such that all shares are vested after four years. A summary of the Company’s stock option activities and related information for the three months ended March 31, 2024, are as follows:

 

   

Number of
options

   

Weighted
average

exercise
price

   

Weighted
average

remaining
contractual

term

   

Aggregate
intrinsic

value

 

Outstanding as of December 31, 2023

    99,425     $ 20.74       2.5     $ 316  

Granted

                           

Exercised

    (13,000 )     14.77                  

Forfeited or expired

                           

Outstanding as of March 31, 2024 (unaudited)

    86,425     $ 21.64       2.6     $ 213  

Exercisable as of March 31, 2024 (unaudited)

    67,000     $ 21.64       1.5     $ 192  

 

As of March 31, 2024, there was $184 of unrecognized compensation expense related to unvested stock options. This amount is expected to be recognized over a weighted-average period of 2.2 years.

 

An RSU award is an agreement to issue shares of the Company’s common stock at the time the award or a portion thereof vests. RSUs granted to employees generally vest in three equal annual installments starting on the first anniversary of the grant date. RSUs granted to non-employee directors would generally vest in two equal annual installments starting on the first anniversary of the grant date.

 

On February 12, 2024, the Compensation Committee of the Board (the “Committee”) granted 33,318, 20,043, 16,399 and 13,535 RSUs, effective as of February 16, 2024, to each of the Company’s Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”), Chief Operating Officer (“COO”) and Chief Commercial Officer (“CCO”), respectively, pursuant to the Company’s 2011 Stock Incentive Plan (the “2011 Plan”). The RSU grants vest 33.4% on February 16, 2025, 33.3% on February 16, 2026 and 33.3% on February 16, 2027.

 

19

 
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS- CONTINUED (UNAUDITED)

 

Also, on February 12, 2024, the Committee granted 49,978, 13,362, 10,932 and 9,023 performance-based restricted stock units (“PSUs”), effective as of February 16, 2024, to each of the Company’s CEO, CFO, COO and CCO, respectively, pursuant to the 2011 Plan. The performance goals for the PSUs with specified weighting are as follows:

 

Weighting

Goals

50% (*)

Vesting of the full 50% of the PSUs occurs if the Company achieves the 2024 license and related revenue target approved by the Board (the “2024 License Revenue Target”). The vesting threshold is achievement of 90% of the 2024 License Revenue Target. If the Company’s achievement of the 2024 License Revenue Target is above 90% but less than 99% of the 2024 License Revenue Target, 91% to 99% of the eligible PSUs would be subject to vesting. If the Company’s actual result exceeds 100% of the 2024 License Revenue Target, every 1% increase of the 2024 License Revenue Target, up to 120%, would result in an increase of 2% of the eligible PSUs for the Company’s CFO, COO and CCO and an increase of 3% of the eligible PSUs for the Company’s CEO.

25%

Vesting of the full 25% of the PSUs occurs if the Company achieves positive total shareholder return whereby the return on the Company’s stock for 2024 is greater than the S&P Semiconductors Select Industry index (the “S&P index”). The vesting threshold is if the return on the Company’s stock for 2024 is at least 90% of the S&P index. If the return on the Company’s stock, in comparison to the S&P index, is above 90% but less than 99% of the S&P index, 91% to 99% of the eligible PSUs would be subject to vesting. If the return on the Company’s stock exceeds 100% of the S&P index, every 1% increase in comparison to the S&P index, up to 120%, would result in an increase of 2% of the eligible PSUs for the Company’s CFO, COO and CCO and an increase of 3% of the eligible PSUs for the Company’s CEO.

25%

Vesting of the full 25% of the PSUs occurs if the Company achieves positive total shareholder return whereby the return on the Company’s stock for 2024 is greater than the Russell 2000 index (the “Russell index”). The vesting threshold is if the return on the Company’s stock for 2024 is at least 90% of the Russell index. If the return on the Company’s stock, in comparison to the Russell index, is above 90% but less than 99% of the Russell index, 91% to 99% of the eligible PSUs would be subject to vesting. If the return on the Company’s stock exceeds 100% of the Russell index, every 1% increase in comparison to the Russell index, up to 120%, would result in an increase of 2% of the eligible PSUs for the Company’s CFO, COO and CCO and an increase of 3% of the eligible PSUs for the Company’s CEO.

 

(*) As of March 31, 2024, the Company's management estimates that it is not probable that the performance condition will be met by year end.

 

Accordingly, assuming maximum achievement of the performance goals set forth above, PSUs representing an additional 60%, meaning an additional 29,986, would be eligible for vesting of the Company’s CEO, and an additional 40%, meaning an additional 5,344, 4,372 and 3,609, would be eligible for vesting for each of the Company’s CFO, COO and CCO, respectively.

 

Subject to achievement of the thresholds the above performance goals for 2024, the PSUs vest 33.4% on February 16, 2025, 33.3% on February 16, 2026 and 33.3% on February 16, 2027.

 

20

 
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS- CONTINUED (UNAUDITED)

 

A summary of the Company’s RSU and PSU activities and related information for the three months ended March 31, 2024, are as follows:

 

   

Number of
RSUs and

PSUs

   

Weighted

Average Grant-

Date
Fair Value

 

Unvested as of December 31, 2023

    1,281,751     $ 24.97  

Granted

    414,572       17.21  

Vested

    (112,076

)

    36.71  

Forfeited or expired

    (110,218

)

    19.07  

Unvested as of March 31, 2024 (unaudited)

    1,474,029     $ 22.34  

 

As of March 31, 2024, there was $22,830 of unrecognized compensation expense related to unvested RSUs and PSUs. This amount is expected to be recognized over a weighted-average period of 1.6 years.

 

The following table shows the total equity-based compensation expense included in the interim condensed consolidated statements of loss:

 

   

Three months ended
March 31,

 
   

2024

(unaudited)

   

2023

(unaudited)

 

Cost of revenue

  $ 203     $ 206  

Research and development, net

    2,007       2,102  

Sales and marketing

    365       378  

General and administrative

    996       866  

Total equity-based compensation expense from continuing operations

    3,571       3,552  

Equity-based compensation expense included in discontinued operations

          307  

Total equity-based compensation expense

  $ 3,571     $ 3,859  

 

21