| Balance Sheet Components | BALANCE SHEET COMPONENTS Accounts Receivable, Net Accounts receivable are contract assets that arise from the performance of our performance obligation pursuant to our contracts with our customers and represent our unconditional right to payment for the satisfaction of our performance obligations. They are recorded at invoiced amount and do not bear interest when recorded or accrue interest when past due. Accounts receivable are stated net of an allowance for doubtful accounts, which is maintained for estimated losses that may result from the inability of our customers to make required payments. Accounts receivable consists of the following: March 31, December 31, Accounts receivable, gross $ 4,496 $ 4,687 Less: allowance for doubtful accounts (45 ) (47 ) Accounts receivable, net $ 4,451 $ 4,640 The following is the change in our allowance for doubtful accounts: Three Months Ended March 31, 2018 2017 Balance at beginning of period $ 47 $ 32 Additions charged (reductions credited) (2 ) 66 Balance at end of period $ 45 $ 98 Inventories Inventories consist of finished goods and work-in-process, and are stated at the lower of standard cost (which approximates actual cost on a first-in, first-out basis) or market (net realizable value). Inventory acquired as part of the Acquisition was recorded at fair value. Inventories consist of the following: March 31, December 31, Finished goods $ 1,557 $ 1,115 Work-in-process 1,032 1,731 Inventories $ 2,589 $ 2,846 Property and Equipment, Net Property and equipment consists of the following: March 31, December 31, Gross carrying amount $ 24,164 $ 23,072 Less: accumulated depreciation and amortization (18,293 ) (17,467 ) Property and equipment, net $ 5,871 $ 5,605 Acquired Intangible Assets, Net In connection with the Acquisition, we recorded certain identifiable intangible assets. See "Note 2: Acquisition” for additional information. Acquired intangible assets resulting from this transaction were assigned to Pixelworks, Inc., and consist of the following: March 31, December 31, Developed technology $ 5,050 $ 5,050 Customer relationships 1,270 1,270 Backlog and tradename 410 410 6,730 6,730 Less: accumulated amortization (1,273 ) (874 ) Acquired intangible assets, net $ 5,457 $ 5,856 Intangible assets are amortized over the following estimated useful lives: developed technology and customer relationships, 3 to 5 years; and tradename and backlog, 6 to 18 months. Amortization expense for intangible assets was $399 for the three months ended March 31, 2018, with $298 included in cost of revenue and $101 included in selling, general and administrative in the condensed consolidated statement of operations. As of March 31, 2018, future estimated amortization expense is as follows: Nine months ending December 31: 2018 $ 1,248 Years ending December 31: 2019 1,505 2020 1,497 2021 1,117 2022 90 $ 5,457 Acquired intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Conditions that would trigger an impairment assessment include, but are not limited to, past, current, or expected cash flow or operating losses associated with the asset. There were no such triggering events requiring an impairment assessment of other intangible assets during the three months ended March 31, 2018. Goodwill Goodwill resulted from our acquisition of ViXS on August 2, 2017, whereby we recorded goodwill of $18,407 . See Note 2: “Acquisition” for information concerning the acquisition. Goodwill is not amortized; however, we review goodwill for impairment annually and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Conditions that would trigger an impairment assessment include, but are not limited to, a significant adverse change in our business climate and a current period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continued losses and adverse changes in legal factors, regulation or business environment. There were no such triggering events requiring a goodwill impairment assessment during the three months ended March 31, 2018. We perform our annual impairment assessment for goodwill on November 30 of each year. Accrued Liabilities and Current Portion of Long-Term Liabilities Accrued liabilities and current portion of long-term liabilities consist of the following: March 31, December 31, Accrued payroll and related liabilities $ 2,915 $ 5,400 Accrued interest payable 2,781 2,770 Accrued royalties 2,623 2,610 Current portion of accrued liabilities for asset financings 1,596 1,701 Deferred revenue 342 418 Accrued costs related to restructuring 41 352 Liability for warranty returns 15 17 Other 2,261 3,119 Accrued liabilities and current portion of long-term liabilities $ 12,574 $ 16,387 Deferred revenues are contract liabilities that arise when cash payments are received or due in advance of the satisfaction of our performance obligation. Any increase in deferred revenues is driven by cash payments received or due in advance of satisfying our performance obligation pursuant to the contract with the customer. Any decrease in deferred revenues is due to the recognition of revenue related to satisfying our performance obligation. The changes in deferred revenue and the liability for warranty returns are as follows: Three Months Ended March 31, 2018 2017 Deferred revenue: Balance at beginning of period $ 418 $ — Revenue recognized (346 ) — Revenue deferred 270 — Balance at end of period $ 342 $ — Liability for warranty returns: Balance at beginning of period $ 17 $ 28 Provision 2 5 Charge-offs (4 ) (2 ) Balance at end of period $ 15 $ 31 Short-Term Line of Credit On December 21, 2010, we entered into a Loan and Security Agreement with Silicon Valley Bank (the "Bank"), which was amended on December 14, 2012, December 4, 2013, December 18, 2015, December 15, 2016, July 21, 2017 and December 21, 2017 (as amended, the "Revolving Loan Agreement"). The Revolving Loan Agreement provides a secured working capital-based revolving line of credit (the "Revolving Line") in an aggregate amount of up to the lesser of (i) $10,000 , or (ii) $1,000 plus 80% of eligible domestic accounts receivable and certain foreign accounts receivable. The Revolving Line has a maturity date of December 28, 2018. In addition, the Revolving Loan Agreement provides for non-formula advances of up to $10,000 which may be made solely during the last five business days of any fiscal month or quarter and which must be repaid by us on or before the fifth business day after the applicable fiscal month or quarter end. Due to their repayment terms, non-formula advances do not provide us with usable liquidity. The Revolving Loan Agreement, as amended, contains customary affirmative and negative covenants as well as customary events of default. The occurrence of an event of default could result in the acceleration of our obligations under the Revolving Loan Agreement, as amended, and an increase to the applicable interest rate, and would permit the Bank to exercise remedies with respect to its security interest. As of March 31, 2018, we were in compliance with all of the terms of the Revolving Loan Agreement, as amended. As of March 31, 2018 and December 31, 2017, we had no outstanding borrowings under the Revolving Line. |
