| Balance Sheet Components | BALANCE SHEET COMPONENTS Accounts Receivable, Net Accounts receivable are contract assets that arise from the performance of our 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: June 30, December 31, Accounts receivable, gross $ 6,374 $ 4,713 Less: allowance for doubtful accounts (23) (41) Accounts receivable, net $ 6,351 $ 4,672 The following is the change in our allowance for doubtful accounts: Six Months Ended June 30, 2021 2020 Balance at beginning of period $ 41 $ 23 Additions charged (reductions credited) (18) 11 Balance at end of period $ 23 $ 34 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). Inventories consist of the following: June 30, December 31, Finished goods $ 741 $ 1,775 Work-in-process 836 670 Inventories $ 1,577 $ 2,445 Property and Equipment, Net Property and equipment, net consists of the following: June 30, December 31, Gross carrying amount $ 21,996 $ 22,291 Less: accumulated depreciation and amortization (18,096) (17,188) Property and equipment, net $ 3,900 $ 5,103 Acquired Intangible Assets, Net In connection with the acquisition of ViXS (the "Acquisition"), we recorded certain identifiable intangible assets. Acquired intangible assets resulting from this transaction were assigned to Pixelworks, Inc., and consist of the following: June 30, 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 (6,099) (5,523) Acquired intangible assets, net $ 631 $ 1,207 Developed technology and customer relationships are amortized over a useful life of 3 to 5 years. Backlog was fully amortized as of September 30, 2018 and tradename was fully amortized as of March 31, 2019. Amortization expense for intangible assets was $271 and $576 for the three and six months ended June 30, 2021, respectively, $218 and $463 were included in cost of revenue for the three and six months ended June 30, 2021, respectively, and $53 and $113 were included in selling, general and administrative for the three and six months ended June 30, 2021, respectively, in the condensed consolidated statements of operations. As of June 30, 2021, future estimated amortization expense is as follows: Six months ending December 31, 2021 $ 541 Year ending December 31, 2022 90 $ 631 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 six months ended June 30, 2021. Goodwill Goodwill resulted from the Acquisition, whereby we recorded goodwill of $18,407. Goodwill is not amortized; however, we review goodwill for impairment annually and whenever events or changes in circumstances indicate that the fair value of the reporting unit may be less than it's carrying value. Conditions that would trigger an impairment assessment include, but are not limited to, a significant adverse change in our business climate or 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 or adverse changes in legal factors, regulation or business environment. There were no such triggering events requiring a goodwill impairment assessment during the six months ended June 30, 2021. 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: June 30, December 31, Accrued payroll and related liabilities $ 2,952 $ 2,867 Operating lease liabilities, current 2,402 2,039 Current portion of accrued liabilities for asset financings 614 786 Accrued interest payable 362 429 Accrued commissions and royalties 294 474 Deferred revenue 68 179 Accrued costs related to restructuring — 630 Other 2,053 2,048 Accrued liabilities and current portion of long-term liabilities $ 8,745 $ 9,452 Deferred revenues are contract liabilities that arise when cash payments are received or due in advance of the satisfaction of our performance obligations. 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 change in deferred revenue is as follows: Six Months Ended June 30, 2021 2020 Deferred revenue: Balance at beginning of period $ 179 $ 146 Revenue recognized (683) (655) Revenue deferred 572 585 Balance at end of period $ 68 $ 76 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, December 21, 2017, December 18, 2018, December 18, 2019, April 17, 2020 and December 14, 2020 (as amended, the "Revolving Loan Agreement"). The Revolving Loan Agreement provided 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) $2,500 plus 80% of eligible domestic accounts receivable and certain foreign accounts receivable of both Pixelworks and ViXS Systems, Inc., subject to certain limitations on the amount of accounts receivables attributable to ViXS. In addition, the Revolving Loan Agreement provided for non-formula advances of up to $10,000 which may have been made solely during the last five business days of any fiscal month or quarter and which were required to 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 did not provide us with usable liquidity. The Revolving Loan Agreement, as amended, contained customary affirmative and negative covenants as well as customary events of default. The occurrence of an event of default could have resulted in the acceleration of our obligations under the Revolving Loan Agreement, as amended, and an increase to the applicable interest rate, and would have permitted the Bank to exercise remedies with respect to its security interest. The Revolving Line had a maturity date of March 26, 2021. We did not renew the Revolving Loan Agreement upon its maturity. |
