UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 10, 2023
Techpoint, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware | 000-55843 | 80-0806545 |
(State or other jurisdiction of incorporation or organization) | Commission File Number: | (I.R.S. Employer |
2550 N. First Street, #550 San Jose, CA USA (408) 324-0588 | 95131 |
(Address of principal executive offices) | (Zip Code) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
Japanese Depositary Shares, each representing one |
| M-6697 |
| Tokyo Stock Exchange (Growth Market) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
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. ☐
Item 2.02 Results of Operations and Financial Condition
The information under the caption “Non-GAAP Financial Information” in Item 7.01 below is incorporated by reference into this Item 2.02.
Item 7.01 Regulation FD Disclosure.
The Tanshin is substantially the same as Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 for Techpoint, Inc. (the “Company”), except the following supplemental information is provided:
The following table contains the forecasted financial results for the year ending December 31, 2023 (in thousands, except for per share amounts):
Year Ending December, 31 |
| Revenue |
|
| Income from operations |
|
| Income before income taxes |
|
| Net income |
|
| Non-GAAP Net Income (1) |
| |||||
2023 |
| $ | 62,812 |
|
| $ | 16,010 |
|
| $ | 18,010 |
|
| $ | 16,209 |
|
| $ | 17,840 |
|
Year Ending December 31, |
| Basic EPS (1) |
|
| Diluted EPS (1) |
|
| Non-GAAP Basic EPS |
|
| Non-GAAP Diluted EPS |
| ||||
2023 |
| $ | 0.89 |
|
| $ | 0.87 |
|
| $ | 0.98 |
|
| $ | 0.95 |
|
(1) The forecasted basic and diluted Earnings Per Share (“EPS”) for the year ending December 31, 2023 was computed using forecasted weighted average shares outstanding for the year ending December 31, 2023. The forecasted non-GAAP amounts exclude stock-based compensation, net of the related income tax impact, using an assumed 10.00% effective tax rate.
The Company’s forecasts are made in U.S. dollars.
Forecast for the Fiscal Year Ending December 31, 2023
After careful consideration of current uncertainties in the global economy, instabilities in global politics, the COVID-19 pandemic and semiconductor manufacturing constraints, the Company is providing its financial forecast for the year ending December 31, 2023, as follows.
Although the overall worldwide semiconductor demand continues to remain slow in 2023 due to deep inventory corrections in most of the market segments, the Company is now seeing a slight upward trend of revenue in the second half of the year, contributed by the new project design wins migrating to volume production. The Company forecasts its revenue for the third quarter to be $15.94 million, an increase of 2.8% year over year and an increase of 4.2% quarter over quarter. During the last quarter, the Company has won multiple projects in the door phone market. However, these projects are still in early-stage productions and are not expected to significantly impact its 2023 revenue. Also, the Company believes it has achieved a good level of performance with its CMOS Image Sensor, but has not been promoting the product diligently due to the unusually high level of the inventory in the market and the current unfavorable currency exchange rate. The Company expects to start promoting the CMOS Image Sensor product diligently when the inventory level in the market decreases to normal or close to normal level.
In July 2023, Techpoint acquired certain assets (including intellectual property to enhance its automotive semiconductor capabilities) of Broadvis Corporation, a privately held company operating in Chengdu, Sichuan, China. Due to the increased operating expenses associated with this transaction, annual operating profit and related income is expected to decrease slightly, from the original full-year forecast.
< Company’s Guidance of Q3 2023 financials >
Revenue: Approximately $15.94 million
Income from operations: Approximately $3.5 million
Income before income taxes: Approximately $4.0 million
GAAP Net Income: Approximately $3.6 million
Non-GAAP Net Income: Approximately $4.0 million
Non-GAAP Basic EPS: Approximately $0.22
Covid-19 Considerations - Since it is difficult to predict the continuing impact of the COVID-19 pandemic and related effects, the Company has calculated its forecast figures based on the assumption that the COVID-19 pandemic will continue to have the same level of impact during fiscal year 2023 as it does at present.
The following tables contain a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures (in thousands):
Six Months Ended June 30, 2023 |
| Income |
|
| Net income |
| ||
GAAP |
| $ | 7,436 |
|
| $ | 7,426 |
|
Stock-based compensation expense |
|
| 730 |
|
|
| 730 |
|
Adjustment for taxes (1) |
|
| — |
|
|
| (84 | ) |
Non-GAAP |
| $ | 8,166 |
|
| $ | 8,072 |
|
|
|
|
|
|
|
| ||
(1) Adjustment for taxes based on a 11.49% effective tax rate, which is the Company’s assumed effective tax rate for fiscal 2023 as of June 30, 2023. |
|
Six Months Ended June 30, 2022 |
| Income |
|
| Net income |
| ||
GAAP |
| $ | 9,527 |
|
| $ | 8,479 |
|
Stock-based compensation expense |
|
| 990 |
|
|
| 990 |
|
Adjustment for taxes (1) |
|
| — |
|
|
| (101 | ) |
Non-GAAP |
| $ | 10,517 |
|
| $ | 9,368 |
|
|
|
|
|
|
|
| ||
(1) Adjustment for taxes based on a 10.23% effective tax rate, which was the Company’s assumed effective tax rate for fiscal 2022 as of June 30, 2022. |
|
Note on non-GAAP financial information: The Company uses non-GAAP measures of adjusted income from operations and net income, which are adjusted from results based on GAAP to exclude certain expenses. These non-GAAP financial measures are provided to enhance the user’s overall understanding of the Company’s current financial performance and its prospects for the future. Specifically, the Company’s management believes that non-GAAP results provide useful information to the Company’s board of directors, management and investors as these non-GAAP results exclude certain expenses that management believes are not indicative of the Company’s core operating results and can be impacted by factors beyond management’s direct control, such as the market price of the Company’s Japanese Depositary Shares. These non-GAAP results are some of the primary measurements management uses to assess the Company’s performance, allocate resources and plan for future periods. Reported non-GAAP results should only be considered as supplemental to results prepared in accordance with GAAP, and not considered as a substitute for, or superior to, GAAP results. These non-GAAP measures may differ from the non-GAAP measures reported by other companies in the Company’s industry. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures on a forward-looking basis is not available due to high variability and low visibility with respect to the charges which are excluded from these non-GAAP measures.
Audit Procedures:
This Tanshin is not in the scope of audit procedures by the Company’s independent auditors under the Financial Instruments and Exchange Act of Japan. Additionally, as of the date of this Tanshin, audit procedures performed in accordance with the standards of
the Public Company Accounting Oversight Board (“PCAOB”) in the United States have yet to be completed. The Company’s independent auditors have not compiled or been involved in the preparation of the forecasted financial results for the year ending December 31, 2023. Accordingly, they assume no responsibility for the accuracy or presentation of this information.
Forward-Looking Statements
The Tanshin and this Current Report on Form 8-K include forward-looking statements that involve a number of risks and uncertainties, many of which are beyond the Company’s control. The Company’s actual results may differ from those anticipated or expressed in these forward-looking statements as a result of various factors, including those set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and any subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission, and the differences may be material. All statements other than statements of historical facts contained in the Tanshin and this Current Report, including statements regarding our future results of operations and financial position, revenue forecast, strategy, marketing efforts and plans, and our expectations for future operations, are forward-looking statements. The words “anticipate”, “believe,” “continue,” “could,” “design,” “estimate,” “forecast,” “intend,” “may,” “plan,” “project,” “will,” or the negative version of these words and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including the following:
• | our future financial performance, including our revenue, cost of sales and operating expenses; | |
• | our market opportunity and our ability to effectively manage or sustain our growth; | |
• | our ability to attract and retain end-customers in our current or future target markets; | |
• | our ability to continue to develop new technologies and obtain and maintain intellectual property rights protecting such technologies; | |
• | our ability to form and expand partnerships with technology partners and consulting partners; | |
• | our ability to maintain, protect and enhance our intellectual property; | |
• | our ability to successfully defend litigation brought against us; | |
• | new product releases and timing; | |
• | anticipated trends, key factors and challenges in our business and the competition that we face; | |
• | the effect of the COVID-19 pandemic on our business and the success of any measures we have taken or may take in the future in response thereto; | |
• | laws and regulations applicable to our business, including the expected impact of restrictions to be imposed by trade regulations; | |
| • | the impact of global shortages in manufacturing capacities; |
• | our liquidity and working capital requirements; and | |
• | our expectations regarding future expenses and investments. |
In light of these risks, uncertainties and assumptions the forward-looking events and circumstances discussed in the Tanshin and this Current Report may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Any forward-looking statement made by us in the Tanshin and this Current Report speaks only as of the date on which it is made. We do not intend to update any of these forward-looking statements after the date of the Tanshin and this Current Report, except as required by law.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Techpoint, Inc. | |||
Date: August 10, 2023 | By: | /s/ Fumihiro Kozato | |
Fumihiro Kozato | |||
President and Chief Executive Officer (Principal Executive Officer) |