10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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: 000-55843

Techpoint, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	80-0806545
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2550 N. First Street, #550

San Jose, CA USA 95131

(Address of principal executive offices) (Zip Code)

(408) 324-0588

(Registrant’s telephone number,

including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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 share of Common Stock, $0.0001 Par Value Per Share	M-6697	Tokyo Stock Exchange (Growth Market)

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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 ☒

As of May 6, 2024, the registrant had 18,465,679 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents.

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Income and Comprehensive Income	2
	Condensed Consolidated Statements of Stockholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	29
PART II.	OTHER INFORMATION	30
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 5.	Other Information	30
Item 6.	Exhibits	31
	SIGNATURES	32

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Techpoint, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts, unaudited)

	March 31,		December 31,
	2024		2023
Assets
Current assets:
Cash and cash equivalents	$	11,756	$	13,671
Short-term investments		53,014		51,788
Accounts receivable		45		40
Inventory		11,071		9,518
Prepaid expenses and other current assets		846		939
Total current assets		76,732		75,956
Property and equipment, net		409		522
Deferred tax assets		3,881		3,620
Right-of-use assets		925		1,045
Intangible assets, net		1,008		1,036
Goodwill		891		891
Long-term investments		—		500
Other assets		199		237
Total assets	$	84,045	$	83,807
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,454	$	1,707
Accrued liabilities		3,351		2,322
Customer deposits		846		1,448
Lease liabilities		453		497
Dividend payable		—		4,599
Total current liabilities		6,104		10,573
Other liabilities		850		939
Total liabilities		6,954		11,512
Commitments and contingencies (Note 5)
Stockholders’ equity
Preferred stock, par value $0.0001 per share - 5,000,000 shares authorized    as of March 31, 2024 and December 31, 2023; nil shares issued and    outstanding as of March 31, 2024 and December 31, 2023		—		—
Common stock, par value $0.0001 per share - 75,000,000 shares    authorized as of March 31, 2024 and December 31, 2023; 18,432,450 and    18,395,682 shares issued and outstanding as of March 31, 2024 and    December 31, 2023, respectively		2		2
Additional paid-in capital		27,894		27,477
Accumulated other comprehensive loss		22		18
Retained earnings		49,173		44,798
Total stockholders’ equity		77,091		72,295
Total liabilities and stockholders’ equity	$	84,045	$	83,807

See accompanying notes to condensed consolidated financial statements.

1

Techpoint, Inc.

Condensed Consolidated Statements of Income and Comprehensive Income

(in thousands, except share and per share amounts, unaudited)

	Three Months Ended
	March 31,
	2024		2023
Revenue	$	16,311	$	14,142
Cost of revenue		7,515		6,497
Gross profit		8,796		7,645
Operating expenses
Research and development		2,084		2,112
Selling, general and administrative		2,520		2,230
Total operating expenses		4,604		4,342
Income from operations		4,192		3,303
Other income, net		773		479
Income before income taxes		4,965		3,782
Provision for income taxes		585		406
Net income	$	4,380	$	3,376
Net income per share:
Basic	$	0.24	$	0.19
Diluted	$	0.23	$	0.18
Weighted average shares outstanding used in computing net income per share
Basic		18,431,048		18,231,078
Diluted		18,927,227		18,597,290
Comprehensive income:
Net income	$	4,380	$	3,376
Other comprehensive income, net of tax:
Unrealized loss on available-for-sale debt securities, net of tax expense of $1 and $8 for the three months ended March 31, 2024 and 2023, respectively		4		32
Comprehensive income	$	4,384	$	3,408

See accompanying notes to condensed consolidated financial statements.

2

Techpoint, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share amounts, unaudited)

	Common Stock					Additional			Accumulated Other						Total
	Shares			Amount		Paid-In Capital			Comprehensive income (loss)			Retained Earnings			Stockholders' Equity
Balances as of December 31, 2022		18,198,737		$	2	$	26,046		$	(147	)	$	36,175		$	62,076
Other comprehensive income – gain on    available-for-sale debt securities		—			—		—			32			—			32
Issuance of common stock upon exercise of stock options		24,600			—		29			—			—			29
Issuance of common stock upon vesting of    restricted stock units		32,425			—		—			—			—			—
Shares repurchased for tax withholdings on    vesting of restricted stock units		(4,636	)		—		(35	)		—			—			(35	)
Stock-based compensation		—			—		362			—			—			362
Cash dividend adjustments		—			—		—			—			(4	)		(4	)
Net income		—			—		—			—			3,376			3,376
Balances as of March 31, 2023		18,251,126		$	2	$	26,402		$	(115	)	$	39,547		$	65,836

See accompanying notes to condensed consolidated financial statements.

3

Techpoint, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share amounts, unaudited)

See accompanying notes to condensed consolidated financial statements.

	Common Stock					Additional			Accumulated Other					Total
	Shares			Amount		Paid-In Capital			Comprehensive income (loss)		Retained Earnings			Stockholders' Equity
Balances as of December 31, 2023		18,395,682		$	2	$	27,477		$	18	$	44,798		$	72,295
Other comprehensive income – unrealized gain on    available-for-sale debt securities		—			—		—			4		—			4
Issuance of common stock upon exercise of stock options		13,000			—		57			—		—			57
Issuance of common stock upon vesting of    restricted stock units		27,575			—		—			—		—			—
Shares repurchased for tax withholdings on    vesting of restricted stock units		(3,807	)		—		(39	)		—		—			(39	)
Stock-based compensation		—			—		399			—					399
Cash dividend adjustments		—			—		—			—		(5	)		(5	)
Net income		—			—		—			—		4,380			4,380
Balances as of March 31, 2024		18,432,450		$	2	$	27,894		$	22	$	49,173		$	77,091

See accompanying notes to condensed consolidated financial statements.

4

Techpoint, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands, unaudited)

	Three Months Ended
	March 31,
	2024			2023
Cash Flows From Operating Activities
Net income	$	4,380		$	3,376
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		92			101
Stock-based compensation		399			362
Accretion of premium on available-for-sale investments		(378	)		(157	)
Gain on disposal of fixed asset		(132	)		—
Inventory valuation adjustment		50			43
Deferred income taxes		(265	)		(357	)
Noncash lease expense		178			177
Unrealized gain		(58	)		—
Changes in operating assets and liabilities:
Accounts receivable		(5	)		(46	)
Inventory		(1,603	)		(93	)
Prepaid expenses and other current assets		130			(186	)
Other assets		38			2
Accounts payable		(63	)		(491	)
Accrued liabilities		1,029			765
Customer deposits		(602	)		185
Lease liabilities		(102	)		4
Other liabilities		(89	)		(170	)
Net cash provided by operating activities		2,999			3,515
Cash Flows From Investing Activities
Purchase of property and equipment		(9	)		(57	)
Purchase of debt securities		(21,177	)		(8,034	)
Proceeds from maturities of debt securities		20,857			2,300
Net cash used in investing activities		(329	)		(5,791	)
Cash Flows From Financing Activities
Payment of dividends		(4,603	)		(4,555	)
Net proceeds from exercise of stock options		57			29
Payment for shares withheld for tax withholdings on vesting of restricted stock units		(39	)		(35	)
Net cash used in financing activities		(4,585	)		(4,561	)
Net decrease in cash and cash equivalents		(1,915	)		(6,837	)
Cash and cash equivalents at beginning of period		13,671			19,392
Cash and cash equivalents at end of period	$	11,756		$	12,555
Supplemental Disclosure of Cash Flow Information
Cash paid for income taxes	$	36		$	36
Supplemental Disclosure of Noncash Investing and Financing Information
Right-of-use assets obtained in exchange for lease liabilities	$	58		$	—
Property and equipment purchased but not yet paid	$	—		$	19
Vender credit received upon disposal of fixed asset	$	58		$	—

See accompanying notes to condensed consolidated financial statements.

5

Techpoint, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Organization and Summary of Significant Accounting Policies

Organization

Techpoint, Inc. (together with its wholly-owned subsidiaries, the “Company”) was originally incorporated in California in April 2012 and reincorporated in Delaware in July 2017. The Company is a fabless semiconductor company that designs, markets and sells mixed-signal integrated circuits for multiple video applications in the security surveillance and automotive markets. The Company is headquartered in San Jose, California.

Basis of Consolidation and Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). All intercompany balances and transactions have been eliminated. The functional currency of each of the Company’s subsidiaries is the U.S. dollar. Foreign currency gains or losses are recorded as other income (expense), net in the condensed consolidated statements of income and comprehensive income.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2023 contained in the Company’s Annual Report on Form 10-K.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which include normal recurring adjustments necessary to present fairly the Company’s financial position, results of operations and cash flows for the interim periods and are not necessarily indicative of the results to be expected for the full fiscal year or for any other future annual or interim periods.

Revenue Recognition

The Company principally sells its products to distributors who, in turn, sell to original equipment manufacturers (“OEM”), original design manufacturers (“ODM”), contract manufacturers, and design houses. Product revenue consists of sales of mixed-signal integrated circuits into the security surveillance and automotive markets. The Company generally requires advance payments from customers and records these advance payments, or contract liabilities, as customer deposits on its condensed consolidated balance sheet. No stock rotation, price protection or return rights are offered. The Company provides product assurance warranty only and does not offer warranties to be purchased separately. Revenue is recognized when control of the product is transferred to the Company's customers, upon shipment, whereby legal title, risks and rewards of ownership, and physical possession are transferred to the customer.

Use of Management’s Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Significant estimates included in the condensed consolidated financial statements include inventory valuation and the valuation allowance for recorded deferred tax assets. These estimates are based upon information available as of the date of the condensed consolidated financial statements. Actual results could differ materially from those estimates.

Certain Significant Risks and Uncertainties

The Company operates in a dynamic industry and can be affected by a variety of factors. For example, any of the following areas could have a negative effect on the Company in terms of its future financial position, results of operations or cash flows: the general state of the U.S., China and world economies; the highly cyclical nature of the industries the Company serves; successful and timely completion of product design efforts; trade restrictions by the United States against the Company's customers in China, or potential retaliatory trade actions taken by China; the loss of any of its larger customers; restrictions on the Company's ability to sell to foreign customers due to additional U.S. or new China trade laws, regulations and requirements; disruptions of the supply chain of components needed for its products; fundamental changes in the technology underlying the Company’s products; the hiring, training and retention of key employees; and new product design introductions by competitors.

6

The Company has been impacted by adverse macroeconomic and geopolitical conditions. These conditions include but are not limited to inflation, foreign currency fluctuations, the COVID-19 pandemic, and the supply chain challenges and disruptions caused by any of these events. Management continues to actively monitor the impact of these conditions on the Company’s financial condition, liquidity, operations, end-customers (including its significant end-customers), distributors, suppliers, industry, and workforce. The extent to which such events impact the Company’s business, prospects and results of operations will depend on future developments, which are highly uncertain. The Company has made estimates of the impact of these events within its financial statements and there may be changes to those estimates in future periods.

Concentration of Customer and Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, investments, and trade receivables. Risks associated with cash and cash equivalents, and investments are mitigated by banking with, and investing in, creditworthy institutions. The Company generally requires advance payments from customers. The Company also performs credit evaluations of its customers and provides credit to certain customers in the normal course of business. The Company has not incurred bad debt write-offs during any of the periods presented.

For each significant customer, or distributor, and significant end-customer, revenue as a percentage of total revenue was as follows:

	Three Months Ended
	March 31,
	2024			2023
Customer
Customer A		37	%		47	%
Customer B		11	%	*
End-Customer
End-Customer A (1)		16	%		27	%

* Less than 10%

(1)Sales to End-Customer A primarily occurred through Customer A.

Concentration of Supplier Risk

The Company currently relies on Taiwan Semiconductor Manufacturing Company Limited and United Microelectronics Corporation (formerly Fujitsu Electronics America, Inc.) to produce substantially all of its semiconductors. Also, it relies on Advanced Semiconductor Engineering, Inc., Sigurd Microelectronics Corporation, ATX Semiconductor (Shanghai) Co., Ltd, and Chizhou Hisemi Electronics Technology Co., Ltd to assemble, package and test substantially all of its semiconductors to satisfy substantially all of the Company’s production requirements. The failure of any subcontractor to fulfill the production requirements of the Company on a timely basis would adversely impact future results. Although there are other subcontractors that are capable of providing similar services, an unexpected change in either subcontractor would cause delays in the Company’s products and potentially result in a significant loss of revenue.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure. This guidance improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This guidance becomes effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company plans to adopt this guidance prior to its effective date and has not early adopted such guidance for the period ending March 31, 2024. The impact of this guidance is not expected to have any material impact on the disclosure of the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to income tax disclosure. This guidance modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign operations) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign operations). This guidance also requires entities to disclose their income tax payments to international, federal and state and local jurisdictions. This guidance becomes effective for fiscal years beginning after December 15, 2024. The Company plans to adopt this guidance prior to the effective date and has not early adopted for the period ending March 31, 2024. The impact of this guidance is not expected to have any material impact on the Company’s consolidated financial statements.

7

Reclassification

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported current/total assets, current/total liabilities, or results of operations.

2. Balance Sheet Components

Inventory

Inventory consists of the following (in thousands):

	March 31,		December 31,
	2024		2023
Work in process	$	6,654	$	4,795
Finished goods		4,417		4,723
Total inventory	$	11,071	$	9,518

Property and Equipment, net

Property and equipment, net consists of the following (in thousands):

	March 31,			December 31,
	2024			2023
Machinery, Computer equipment and software	$	2,576		$	2,759
Leasehold improvements		94			94
Furniture		38			36
Total property and equipment		2,708			2,889
Less: accumulated depreciation		(2,299	)		(2,367	)
Total property and equipment, net	$	409		$	522

The Company recorded $0.1 million of depreciation expense for each of the three months ended March 31, 2024 and 2023.

Intangible assets, net and goodwill

Goodwill as of March 31, 2024 and December 31, 2023 was $0.9 million and $0.9 million, respectively. Goodwill is tested for impairment annually as of December 31 or more frequently on a reporting unit basis when events or changes in circumstances indicate that impairment may have occurred. The Company is not aware of any events or circumstances indicating impairment of goodwill during the period.

Changes in the carrying amount of goodwill for the three months ended March 31, 2024 are as follows (in thousands):

	Total
Goodwill at December 31, 2023	$	891
Adjustments		—
Goodwill at March 31, 2024	$	891

Intangible assets, except goodwill consist of the following (in thousands):

	March 31,
	2024
Acquired intellectual property	$	1,090
Total finite-lived intangible assets		1,090
Less: accumulated amortization		(82	)
Total finite-lived intangible assets, net	$	1,008

The amortization expenses of intangible assets were $27,000 and nil as of March 31, 2024 and 2023, respectively.

Acquired intellectual property is amortized over 10 years of its useful life. As of March 31, 2024, expected amortization expense for the unamortized intangible assets for the next five years and thereafter is as follows (in thousands):

8

Year Ending December 31,	Amount
Remainder of 2024	$	82
2025		109
2026		109
2027		109
2028		109
Thereafter		490
Total	$	1,008

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

	March 31,		December 31,
	2024		2023
Payroll-related expenses	$	1,326	$	983
Taxes payable		1,256		468
Accrued inventory		254		401
Engineering service		196		199
Accrued warranty		178		180
Professional fees		108		23
Other		33		68
Total accrued liabilities	$	3,351	$	2,322

Customer Deposits

Customer deposits represent payments received in advance of shipments and fluctuate depending on timing of customer pre-payments and product shipment. Customer deposits were $0.8 million and $1.4 million as of March 31, 2024 and December 31, 2023, respectively. The Company generally expects to recognize revenue from customer deposits during the three month period immediately following the balance sheet date. During the three months ended March 31, 2024, the Company recognized $1.4 million of revenue from the December 31, 2023 customer deposits balance.

3. Fair Value Measurements of Financial Instruments

Summary of Financial Instruments

The following is a summary of financial instruments (in thousands):

	March 31, 2024
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Values
Available-for-sale securities:
Certificates of deposit	$	3,901	$	—	$	(1	)	$	3,900
Treasury bills		42,322		94		(28	)		42,388
Government agency bonds		512		—		(1	)		511
Corporate bonds		9,446		—		(35	)		9,411
Total available-for-sale securities	$	56,181	$	94	$	(65	)	$	56,210
Reported in:
Cash and cash equivalents								$	3,196
Short-term investments									53,014
Long-term investments									—
Total available-for-sale securities								$	56,210

9

	December 31, 2023
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Values
Available-for-sale securities:
Certificates of deposit	$	3,633	$	1	$	—		$	3,634
Treasury bills		37,624	76			—			37,700
Government agency bonds		2,600		—		(3	)		2,597
Corporate bonds		11,504		—		(51	)		11,453
Total available-for-sale securities	$	55,361	$	77	$	(54	)	$	55,384
Reported in:
Cash and cash equivalents								$	3,096
Short-term investments									51,788
Long-term investments									500
Total available-for-sale securities								$	55,384

The contractual maturities of available-for-sale securities are presented in the following table (in thousands):

	March 31, 2024				December 31, 2023
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	56,181	$	56,210	$	54,859	$	54,884
Due between one to two years		—		—		502		500
	$	56,181	$	56,210	$	55,361	$	55,384

The Company had 68 investments in unrealized loss positions as of March 31, 2024. 53 of such investments have been in unrealized loss positions for less than twelve months. The total Fair Value of such investments is $47.6 million with unrealized losses of approximately $0.1 million as of March 31, 2024. There were no material gross unrealized losses from available-for-sale securities and no material realized gains or losses from available-for-sale securities that were reclassified from accumulated other comprehensive income for the three months ended March 31, 2024.

For investments in available-for-sale debt securities that have unrealized losses, the Company evaluates (i) whether it has the intention to sell any of these investments and (ii) whether it is more likely than not that it will be required to sell any of these investments before recovery of the entire amortized cost basis. Based on this evaluation, the Company determined that there were no other-than-temporary impairments associated with investments as of March 31, 2024.

There were no sales of available-for-sale securities for the three months ended March 31, 2024 and 2023.

Fair Value Measurements

Fair value is defined as the exchange price that would be received from selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company measures financial assets and liabilities at fair value at each reporting period using a fair value hierarchy which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:

Level 1. Quoted prices in active markets for identical assets or liabilities.

Level 2. Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3. Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

10

Financial assets measured at fair value on a recurring basis were as follows (in thousands):

	Fair Value Measurement at Reporting Date Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total
As of March 31, 2024
Financial assets - available-for-sale securities
Certificates of deposit	$	—		3,900	$	3,900
Treasury bills		—		42,388		42,388
Governmental agency bonds		—		511		511
Corporate bonds		9,411		—		9,411
Total financial assets - available-for-sale securities	$	9,411	$	46,799	$	56,210
As of December 31, 2023
Financial assets - available-for-sale securities
Certificates of deposit	$	—	$	3,634	$	3,634
Treasury bills		2,198		35,502		37,700
Governmental agency bonds		600		1,997		2,597
Corporate bonds		10,953		500		11,453
Total financial assets - available-for-sale securities	$	13,751	$	41,633	$	55,384

The Company uses a pricing service to assist in determining the fair values of all of its cash equivalents, short-term investments and long-term investments. The pricing service uses inputs from multiple industry standard data providers or other third party sources and applies various acceptable methodologies.

4. Segment Information

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

The Company’s chief operating decision maker, the chief executive officer, reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance on a regular basis. Accordingly, the Company considers itself to be one reportable segment, which is comprised of one operating segment - the designing, marketing and selling of mixed-signal integrated circuits for the security surveillance and automotive markets.

Product revenue from customers is designated based on the geographic region to which the product is delivered. Revenue by geographic region was as follows (in thousands):

	Three Months Ended
	March 31,
	2024		2023
China	$	12,227	$	10,519
Taiwan		2,340		1,771
South Korea		1,161		1,373
Japan		192		381
Other		391		98
Total revenue	$	16,311	$	14,142

Revenue by principal product lines was as follows (in thousands):

	Three Months Ended
	March 31,
	2024		2023
Automotive	$	12,481	$	8,797
Security surveillance		3,830		5,345
Total revenue	$	16,311	$	14,142

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Long-lived assets by geographic region were as follows (in thousands):

	March 31,		December 31,
	2024		2023
Taiwan	$	264	$	308
China		113		176
United States		20		29
South Korea		9		6
Japan		3		3
Total property and equipment - net	$	409	$	522

5. Commitments and Contingencies

Operating leases

The Company determines if an arrangement contains a lease at inception. The Company leases facilities under non-cancelable lease agreements expiring through fiscal year 2024. The Company’s agreements do not include variable lease payments or any restrictions or covenants imposed by the leases. As the rate implicit in each lease agreement is not readily determinable, the Company’s incremental borrowing rate was used as the discount rate. The Company’s right-of-use assets and lease liabilities have been adjusted for initial direct costs and prepaid rent but do not reflect any options to extend or terminate its lease agreements, any residual value guarantees, or any leases that have not yet commenced.

The right-of-use assets and lease liabilities related to operating leases were as follows (in thousands):

			December 31,
	March 31, 2024		2023
Right-of-use assets	$	925	$	1,045
Lease liabilities －Current	$	453	$	497
Lease liabilities － Non-Current		432		531
Total lease liabilities	$	885	$	1,028

Rent expense under operating leases was $0.2 million for each of the three months ended March 31, 2024 and 2023.

The rent expense recognized from short-term leases was $6,000 for each of the three months ended March 31, 2024 and 2023.

The following tables summarize the Company’s lease costs and weighted-average assumptions used in determining its right-of-use assets and lease liabilities (in thousands):

	Three Months Ended			Three Months Ended
	March 31, 2024			March 31, 2023
Operating lease cost	$	200		$	190
Cash paid for operating leases	$	219		$	185
Right-of-use assets obtained in exchange for operating lease liabilities (1)	$	58		$	—
Weighted average remaining term for operating leases		1.85		1.17 years
Weighted average discount rate for operating leases		8.1	%		5.6	%

(1) During the three months ended March 31, 2024, the Company extended the term of its lease in Taiwan. This lease was treated as a modification and accounted for as a non-cash change in existing lease liabilities and the right-of-use assets.

During the three months ended March 31, 2023, the Company did not enter into any new lease or lease modification.

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As of March 31, 2024, the aggregate future minimum lease payments under non-cancelable operating leases consist of the following (in thousands):

Year Ending December 31,	Amount
2024 (remaining nine months)	$	392
2025		417
2026		157
Total		966
Less effects of discounting		(81	)
Total lease liabilities	$	885

Purchase Commitments

As of March 31, 2024, the Company had purchase commitments with its third-party suppliers through fiscal year 2026. Future minimum payments under purchase commitments total $0.5 million for the remaining nine months ending December 31, 2024, $0.7 million for the year ending December 31, 2025, and $0.3 million for the year ending December 31, 2026.

Litigation

Although the Company is not currently a party to any legal proceedings and there is no litigation currently threatened, the Company may be subject to legal proceedings, claims and litigation, including intellectual property litigation, arising in the ordinary course of business. Such matters are subject to many uncertainties and outcomes and are not predictable with assurance. The Company accrues amounts that it believes are adequate to address any liabilities related to legal proceedings and other loss contingencies that the Company believes will result in a probable loss that is reasonably estimable.

Indemnification

During the normal course of business, the Company may make certain indemnities, commitments and guarantees which may include intellectual property indemnities to certain of its customers in connection with the sales of the Company’s products and indemnities for liabilities associated with the infringement of other parties’ technology based upon the Company’s products. The Company’s exposure under these indemnification provisions is generally limited to the total amount paid by a customer under the agreement. However, certain agreements include indemnification provisions that could potentially expose the Company to losses in excess of the amount received under the agreement. In addition, the Company indemnifies its officers, directors and certain key employees while they are serving in good faith in such capacities.

The Company has not recorded any liability for these indemnities, commitments and guarantees in the accompanying condensed consolidated balance sheets. Where necessary, the Company accrues for losses for any known contingent liabilities, including those that may arise from indemnification provisions, when future payment is probable.

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6. Stockholders’ Equity

Preferred Stock

The Company is authorized to issue 5,000,000 shares of preferred stock with a $0.0001 par value per share as of March 31, 2024 and December 31, 2023. There were no shares of preferred stock issued and outstanding as of March 31, 2024 and December 31, 2023.

Common Stock

The Company is authorized to issue 75,000,000 shares of common stock with $0.0001 par value per share as of March 31, 2024 and December 31, 2023. As of March 31, 2024, the shares of common stock issued and outstanding totaled 18,432,450. As of December 31, 2023, the shares of common stock issued and outstanding were 18,395,682.

The Company has reserved the following number of shares of common stock for future issuances:

	March 31, 2024
Outstanding stock awards		1,006,331
Shares available for future issuance under the 2017 Stock Incentive Plan		7,065,953
Total common stock reserved for future issuances		8,072,284

Dividend

On December 15, 2023, the Company announced a cash dividend of an aggregate of $0.50 per share for fiscal year 2024, payable in two equal installments of $0.25 per share. The first installment of the dividend was paid during the first fiscal quarter of 2024 in the aggregate amount of $4.6 million to stockholders of record as of the close of business on January 31, 2024. The second installment of the dividend has not accrued as of March 31, 2024 because it is anticipated to be paid in the third fiscal quarter of 2024 and the declaration of the second installment is subject to the approval of the Company’s board of directors and applicable law.

On December 16, 2022, the Company announced a cash dividend of an aggregate of $0.50 per share for fiscal 2023, payable in two equal installments of $0.25 per share. The first installment of the dividend was paid during the first fiscal quarter of 2023 to stockholders of record as of the close of business on January 31, 2023. The second installment of the dividend was paid in July 2023 to stockholders of record as of the close of business on June 30, 2023. The aggregate amount of the two dividend payments was $9.1 million.

7. Equity Incentive Plans

Stock Incentive Plans

In April 2012, the Company adopted a 2012 Stock Option Plan (“2012 Plan”). The 2012 Plan provides for the granting of stock-based awards to employees, directors, and consultants under terms and provisions established by the Company’s board of directors. Under the terms of the 2012 Plan, options may be granted at an exercise price not less than fair market value. For employees holding more than 10% of the voting rights of all classes of stock, the exercise prices for incentive and non-statutory stock options must be at least 110% of the fair market value of the common stock on the grant date, as determined by the Company’s board of directors. The terms of options granted under the 2012 Plan may not exceed ten years.

The 2012 Plan was superseded by a 2017 Stock Option Plan (“2017 Plan”). Any outstanding awards under the 2012 Plan will continue to be governed by the terms of the 2012 Plan.

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In August 2017, the Company adopted the 2017 Plan. The Company’s stockholders approved the 2017 Plan in September 2017 and it became effective immediately prior to the closing of the Company’s initial public offering. In connection with the adoption of the 2017 Plan, no additional awards and no shares of common stock remain available for future issuance under the 2012 Plan and shares reserved but not issued under the 2012 Plan as of the effective date of the 2017 Plan were included in the number of shares reserved for issuance under the 2017 Plan. In addition, shares subject to awards under the 2012 Plan that are forfeited or terminated are added to the 2017 Plan. The number of shares available for issuance under the 2017 Plan is automatically increased on the first day of each fiscal year beginning on January 1, 2018 and ending on (and including) January 1, 2027, in an amount equal to the lesser of (1) 4% of the outstanding shares of the Company’s common stock on the last day of the immediately preceding fiscal year, or (2) another amount determined by the Company’s board of directors. The 2017 Plan provides for the granting of incentive stock options within the meaning of Section 422 of the Internal Revenue Code to employees and the granting of non-statutory stock options to employees, non-employee directors, advisors and consultants. The 2017 Plan also provides for the grants of restricted stock, stock appreciation rights, stock unit and cash-based awards to employees, non-employee directors, advisors and consultants.

On November 7, 2023, the board of directors of the Company determined not to increase the number of shares of the Company’s common stock authorized for issuance under its 2017 Plan for the 2024 fiscal year, which would have been otherwise subject to a four percent (4%) annual increase on January 1, 2024.

The Company’s stock award activity under the 2017 Plan is summarized as follows:

	Awards Available for Grant
As of December 31, 2023		7,057,446
Authorized		—
Granted		(5,000	)
Canceled		13,507
As of March 31, 2024		7,065,953

Stock Options

The Company’s stock option activity under the 2017 Plan is summarized as follows:

	Options Issued and Outstanding			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (in thousands)
As of December 31, 2023		431,081		$	2.81		3.3	$	3,305
Granted		—			—
Exercised		(13,000	)		2.48
Canceled		—
As of March 31, 2024		418,081			2.83		3.0		2,490
Options vested and exercisable as of March 31, 2024		418,081			2.83		3.0		2,490

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The stock options outstanding and exercisable by exercise price as of March 31, 2024 are as follows:

		Options Outstanding, Vested and Exercisable
Exercise Price		Number Outstanding		Weighted- Average Remaining Contractual Life (Years)		Weighted- Average Exercise Price
$	0.37		10,000		1.3	$	0.37
	0.97		8,000		1.6		0.97
	2.51		46,780		2.4		2.51
	2.89		40,000		2.9		2.89
	2.93		233,734		3.2		2.93
	3.18		79,567		3.3		3.18
			418,081		3.0		2.83

The aggregate intrinsic value of options exercised for the three months ended March 31, 2024 and 2023 was $0.2 million and $0.1 million, respectively. The Company has various vesting agreements with its employees. Options granted generally vest over a five-year period and generally are exercisable for up to 10 years.

Restricted Stock Units

The Company’s restricted stock units activity is summarized as follows:

	Units Issued and Outstanding			Weighted-Average Grant Date Fair Value
As of December 31, 2023		620,525		$	7.63
Granted		5,000			9.82
Released, net		(23,768	)		10.35
Canceled		(13,507	)		10.06
As of March 31, 2024		588,250			7.59

Restricted stock units are converted into shares of the Company’s common stock upon vesting on a one-for-one basis. Restricted stock unit awards generally vest over a five-year period and are subject to the grantee’s continued service with the Company.

8. Stock-Based Compensation

The following table summarizes the distribution of stock-based compensation expense (in thousands):

	Three Months Ended
	March 31,
	2024		2023
Cost of revenue	$	30	$	36
Research and development		150		119
Selling, general and administrative		219		207
Total	$	399	$	362

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9. Net Income Per Share

The following table presents the calculation of basic and diluted net income per share (amounts in thousands, except share and per share data):

	Three Months Ended
	March 31,
	2024		2023
Numerator:
Basic and Diluted:
Net income	$	4,380	$	3,376
Denominator:
Basic shares:
Weighted-average shares outstanding used in computing basic    net income per share		18,431,048		18,231,078
Diluted shares:
Effect of potentially dilutive securities:
Stock options and restricted stock units		496,179		366,212
Weighted-average shares used in computing diluted net    income per share		18,927,227		18,597,290
Net income per share:
Basic	$	0.24	$	0.19
Diluted	$	0.23	$	0.18

The potentially dilutive shares of common stock outstanding for the three months ended March 31, 2024 and 2023 that were excluded from the computation of diluted net income per share as the effect would have been antidilutive, was approximately 73,000 and 245,000 shares, respectively.

10. Provision for Income Taxes

The components of income before income taxes were as follows (in thousands):

	Three Months Ended
	March 31,
	2024		2023
Domestic	$	4,903	$	3,722
Foreign		62		60
Income before income taxes	$	4,965	$	3,782

The components of the provision for income taxes were as follows (in thousands):

	Three Months Ended
	March 31,
	2024		2023
United States	$	577	$	400
Foreign		8		6
Provision for income taxes	$	585	$	406

The Company applies the provisions of the applicable accounting guidance regarding accounting for uncertainty in income taxes, which require application of a more-likely-than-not threshold to the recognition and derecognition of uncertain tax positions. If the recognition threshold is met, the applicable accounting guidance permits the recognition of a tax benefit measured at the largest amount of such tax benefit that, in the Company’s judgment, is more than fifty percent likely to be realized upon settlement. It further requires that a change in judgment related to the expected ultimate resolution of uncertain tax positions to be recognized in earnings in the period in which such determination is made. The Company will continue to review its tax positions and provide for, or reverse, unrecognized tax benefits as issues arise.

As of March 31, 2024, there was no material increase in the liability for unrecognized tax benefits and no accrued interest or penalties related to uncertain tax positions.

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As of March 31, 2024, the Company had approximately $0.4 million of unrecognized tax benefits of which $0.3 million was netted against deferred tax assets with a full valuation allowance. If these amounts are recognized, there will be a tax benefit of $0.1 million against the Company’s effective tax rate.

The Company files income tax returns in the U.S. federal, California, and foreign jurisdictions with varying statutes of limitations. The Company is generally no longer subject to tax examinations for years prior to 2019 for federal purposes and 2018 for state purposes, except in certain limited circumstances. In California, the Company's net operating loss (“NOL”) and credit carryforwards from all years may be subject to adjustment for four years for California following the year in which utilized. Currently, the Company has California NOLs and credit carryforwards from 2012 which remain subject to adjustment for four years following the year in which utilized, and therefore tax years 2012 through 2022 may remain open for state audit. The Company does not anticipate that any potential tax adjustments will have a significant impact on its financial position or results of operations.

The CHIPS and Science Act of 2022 ("CHIPS") and the Inflation Reduction Act ("IRA") of 2022 were signed into law by President Biden on August 9, 2022 and August 16, 2022, respectively. The legislation introduces new options for monetizing certain credits, a corporate alternative minimum tax, and a stock repurchase excise tax. The Company has concluded that the impact of any of the provisions included in CHIPS and IRA acts did not have a material impact on the Company's unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2024.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Information Regarding Forward-Looking Statements

This Quarterly Report on Form10-Q includes forward-looking statements. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, strategy and plans, our expectations for future operations, expectations regarding adoption of accounting pronouncements, our belief regarding adequacy of accruals related to future litigation, and expectations related to indemnities, are forward-looking statements. The words “anticipate”, “believe,” “continue,” “could,” “design,” “estimate,” “intend,” “may,” “plan,” “project,” “will,” “expect,” 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, sales, cost of sales and operating expenses;

•our market opportunity and our ability to effectively manage or sustain our growth;

•our ability to attract new and retain existing customers in our current or future target markets;

•our ability to continue to develop new technologies and secure design wins;

•the expected benefits from and our ability to integrate our acquisitions;

•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 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;

•our product development and sales cycle;

•our competition;

•the impact of macroeconomic conditions, including inflation, recession and trade relations between the U.S. and China, on our business;

•the effect of health epidemics on our business and the success of any measures we have taken or may take in the future in response thereto;

•the impact of potential tax adjustments;

•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 this Quarterly Report on Form 10-Q 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 this Quarterly Report on Form 10-Q is as of the date on which it is filed with the SEC. We do not intend to update any of these forward-looking statements after the date of this Quarterly Report on Form 10-Q, except as required by law.

General Background

The following discussion and analysis should be read together with our unaudited condensed consolidated financial statements and the notes to those statements that appear in this Quarterly Report on Form 10-Q and our consolidated financial statements and the notes to those statements that appear in our Annual Report on Form 10-K for the year ended December 31, 2023. This discussion contains forward-looking statements based on our current expectations, assumptions, estimates and projections. These forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those indicated in these

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forward-looking statements as a result of certain factors, as more fully described in “Risk Factors” in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K.

In this Quarterly Report on Form 10-Q, unless otherwise specified or the context otherwise requires, “Techpoint,” “we,” “us,” and “our” refer to Techpoint, Inc. and its consolidated subsidiaries.

We have obtained or are in the process of obtaining registered trademarks for Techpoint and HD-TVI. This Quarterly Report on Form 10-Q contains references to our trademarks and to trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this report, including logos, artwork and other visual displays, may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

Overview

We are a fabless semiconductor company that designs, markets and sells mixed-signal integrated circuits for multiple video applications in the security surveillance and automotive markets. Our integrated circuits are enabling the transition from standard definition (“SD”) video to high definition (“HD”) video in the security surveillance and automotive markets.

Our solutions take HD video signals from a camera and convert them into analog signals for reliable long-distance transmission, then convert the HD analog signal into the appropriate format for video processing and display. Our HD analog technology operates at the same 1080p HD resolution as digital HD, but processes video in an HD analog format and transmits the video in this same analog format, thereby eliminating the need for any compression or decompression. Our integrated circuits are based on our proprietary architecture and mixed signal technologies that we believe provide high video quality, enable high levels of integration and are cost effective. Our integrated circuits are used by security surveillance manufacturers, such as Hikvision in China, IDIS in South Korea and AVTech in Taiwan.

We derive our revenue from sales of our mixed-signal integrated circuits into the automotive and security surveillance markets. We began shipping our products in 2013 and to date, we have sold over 429 million integrated circuits. Our revenue was $16.3 million and $14.1 million for the three months ended March 31, 2024 and 2023, respectively. The automotive market accounted for 77% and 62% of our revenue for the three months ended March 31, 2024 and 2023, respectively. The security surveillance market accounted for 23% and 38% of our revenue for the three months ended March 31, 2024 and 2023, respectively. We recognized $12.5 million and $8.8 million of revenue on sales into the automotive market for the three months ended March 31, 2024 and 2023, respectively. In addition, we recognized $3.8 million and $5.3 million of revenue on sales into the security surveillance market for the three months ended March 31, 2024 and 2023, respectively. We recorded net income of $4.4 million and $3.4 million for the three months ended March 31, 2024 and 2023, respectively.

We sell our products to distributors that fulfill third-party orders for our products. We also sell directly to OEM/ODM. For the three months ended March 31, 2024 and 2023, we derived substantially all of our revenue from products sold to distributors as compared to products sold to OEM/ODM directly.

We undertake significant product development efforts well in advance of a product’s release and in advance of receiving purchase orders. Our product development efforts, which are focused on developing new designs with broad demand and potential for future derivative products, typically take from six to twenty-four months until production begins, depending on the product’s complexity. If we secure a design win, we believe the system designer is likely to continue to use the same or enhanced versions of our product across a number of their models, extending the life cycles of our products. Conversely, if a competitor secures the design win, it may be difficult for us to sell into the end-customer’s application for an extended period. Our sales cycle typically ranges from three to six months for the security surveillance market and one to three years for the automotive market. Due to the length of our product development and sales cycle, the majority of our revenue for any period is likely to be weighted toward products introduced for sale in the prior one or two years. As a result, our present revenue is not necessarily representative of future sales because our future sales are likely to be comprised of a different mix of products, some of which are now in the development stage.

We employ a fabless manufacturing strategy and use market-leading suppliers for all phases of the manufacturing process, including wafer fabrication, assembly, testing and packaging. This strategy significantly reduces the capital investment that would otherwise be required to operate manufacturing facilities of our own.

We have made significant investments in research and development in order to develop our products to attract and retain end-customers. For the three months ended March 31, 2024 and 2023, our research and development expense was $2.1 million and $2.1 million, respectively. Our research and development expenses can vary from period-to-period and can be significantly impacted by the

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number of tape-outs and new products that we initiate in any given period. As of March 31, 2024, we had 102 employees, 39 of whom are in research and development. Our headquarters are located in San Jose, California, with additional operations in Japan, Taiwan, China and South Korea.

Effective October 9, 2019, the U.S. Commerce Department’s Bureau of Industry and Security (“BIS”) added Hikvision, a customer that represented 16% and 27% of our revenue for the three months ended March 31, 2024 and 2023, respectively, to the BIS Entity List with a license requirement for all items subject to the Export Administration Regulations (“EAR”). The BIS Entity List is a published list of the names of certain foreign persons, including businesses, research institutions, government and private organizations and individuals, that are subject to specific governmental license requirements for the export, reexport and/or transfer of specified items. These license requirements could make it more difficult to ship, or in some cases, prevent the shipment of products to certain foreign persons named on the BIS Entity List.

We have taken action to confirm whether our products are subject to EAR. We have retained the continuous assistance of outside experts and, following Hikvision’s designation on the BIS Entity List, performed a comprehensive review of our products and manufacturing operations. Based on that review, we have concluded that our products are not subject to EAR. Therefore, our products may continue to be shipped to Hikvision without a U.S. export license, even though Hikvision appears on the BIS Entity List.

On November 12, 2020, President Trump issued Executive Order 13959 on Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies which prohibits any transaction in publicly traded securities, or any securities that are derivative of, or are designed to provide investment exposure to such securities, of any identified Communist Chinese military company, which included Hikvision. On June 3, 2021, President Biden issued Executive Order 14032 amending the prior Executive Order. As amended, Executive Order 13959 continues to prohibit certain transactions involving the purchase or sale of publicly traded securities of designated companies. Restrictions are applicable to certain entities designated as Chinese Military-Industrial Complex Companies who have been placed on the “CMIC List.” Hikvision was listed in the Annex to Executive Order 14032 and is currently on the CMIC List. However, Hikvision is not on the Specially Designated Nationals (SDN) List and the restrictions imposed by these Executive Orders are not expected to directly impact our business.

On November 11, 2021, President Biden signed into law the Secure Equipment Act of 2021, which requires the U.S. Federal Communications Commission (“FCC”) to adopt rules no later than November 11, 2022 clarifying that it will no longer review or approve any application for equipment authorization for equipment that is on the list of covered communications equipment or services published by the FCC under section 2(a) of the Secure and Trusted Communications Networks Act of 2019. Items on the FCC’s “covered list” include video surveillance and telecommunications equipment produced by Hikvision, to the extent it is used for the purpose of public safety, security of government facilities, physical security surveillance of critical infrastructure, and other national security purposes, including telecommunications or video surveillance services provided by such entity or using such equipment. The restrictions to be imposed by the FCC pursuant to the Secure Equipment Act of 2021 would impact imports of certain Hikvision equipment into the United States by eliminating the ability of Hikvision to obtain FCC approval for its video surveillance and telecommunications equipment. The FCC is also considering the adoption of new rules to revoke past authorization issued for Hikvision equipment, but the FCC actions taken to date are currently not expected to directly impact our business. This may or may not directly impact our revenue in the future. In the event there is an impact on our revenue, we believe that it would be gradual and limited in scope both because Hikvision continues to sell its currently approved products in the U.S. and because other manufacturers that incorporate our products could take market share from Hikvision in the U.S. We believe that our revenue would decrease only a few percentage points even if Hikvision’s business is fully impacted by the restrictions to be imposed by the FCC that limit Hikvision’s ability to import its future products into the U.S. Additionally, we plan to continue growing our revenue from new and existing customers, thus further limiting the impact of the restrictions to be imposed by the FCC that impact the importation of certain of Hikvision’s future products into the U.S.

The above conclusions are as of the date of filing of this Quarterly Report on Form 10-Q. It is possible that changes in U.S. regulations or policies in the future may impose restrictions, including the imposition of license requirements or even a full or partial prohibition, on our sale of products to Hikvision.

Key Factors Affecting Our Results of Operations

The following are key factors that impact our results of operations:

Macroeconomic and Geopolitical Conditions. We have been impacted by adverse macroeconomic and geopolitical conditions. These conditions include but are not limited to inflation, foreign currency fluctuations, the COVID-19 pandemic and related supply chain challenges and disruptions caused by any of these events. Management continues to actively monitor the impact of these conditions on the Company’s financial condition, liquidity, operations, end-customers (including its significant end-customers),

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distributors, suppliers, industry, and workforce. The extent to which such events impact the Company’s business, prospects and results of operations will depend on future developments, which are highly uncertain.

Ability to attract and retain customers that make large orders. While we expect the composition of our end-customers to change over time, our business and operating results depend on our ability to continually target new and retain existing end-customers that make large orders. Hikvision, the largest security surveillance manufacturer in China, as previously noted, is one of our significant end-customers. Although large customers can help us increase our revenue and improve our results of operations, reliance on large customers is a risk to our business. For example, Section 889 of the 2019 National Defense Authorization Act could adversely impact our business with Hikvision. Section 889(a)(1)(A) went into effect on August 13, 2019 and prohibits U.S. government agencies from procuring or obtaining equipment or services that use covered telecommunications equipment or services as a substantial or essential component or critical technology, including certain video surveillance products or telecommunications equipment and services produced or provided by Hikvision. On July 14, 2020, the U.S. government issued an interim final rule that implements Section 889(a)(1)(B) effective as of August 13, 2020. This rule prohibits the U.S. government from entering into contracts with persons who use covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system, which again includes certain Hikvision video surveillance products. Although Section 889 does not prohibit commercial sales of video surveillance products by Hikvision in the U.S., which we understand is the predominant business Hikvision does in the U.S. with video surveillance products that incorporate our products, the impact of these new regulations and the uncertainty of U.S. and China trade relations may adversely impact our business in the future with Hikvision and other significant customers.

Design wins with new and existing customers. We believe our products provide high-quality HD video with an attractive combination of characteristics, at a lower overall cost than competing solutions. In order to get our solutions designed into our end-customer’s products, we work with our end-customers and potential end-customers to understand their product roadmaps and strategies. We consider design wins to be critical to our future success. We define a design win as the successful completion of the evaluation stage, where an end-customer has tested our product, verified that our product meets its requirements and qualified our integrated circuits for their products. We have secured design wins with major automotive manufacturers to sell our solutions to them for automotive backup cameras. The revenue that we generate, if any, from each design win can vary significantly. Our long-term sales expectations are based on forecasts from end-customers, internal estimates of end-customer demand factoring in expected time to market for end-customer products incorporating our solutions and associated revenue potential and internal estimates of overall demand based on historical trends.

Pricing, product cost and gross margins of our products. Our gross margin has been and will continue to be affected by a variety of factors, including the timing of changes in pricing, shipment volumes, new product introductions, changes in product mixes, changes in our purchase price of fabricated wafers and assembly and test service costs, manufacturing yields and inventory write downs, if any. In general, newly introduced products and products with higher performance and more features tend to be priced higher than older, more mature products. Average selling prices in the semiconductor industry typically decline as products mature. Consistent with the historical trend, we expect that the average selling prices of our products will, in the longer term, decline as our product lines mature. In the normal course of business, we will seek to offset the effect of declining average selling prices on existing products by reducing manufacturing costs and introducing new and higher value-added products. If we are unable to maintain overall average selling prices or offset any declines in average selling prices with realized savings on product costs, our gross margin will decline.

Product adoption and safety regulations in the automotive market. We have secured design wins with major automotive equipment manufacturers to sell our solutions to them for automotive backup cameras. Certain jurisdictions have passed laws and regulations requiring that all new cars sold after a certain date must contain back-up cameras, including with respect to cars sold in the United States after May 2018. If these jurisdictions do not maintain and implement these rules, or if back-up cameras are not put into automobiles sold in other locations as well, or do so more slowly than we expect, our financial results could be adversely affected.

Investment in growth. We have invested, and intend to continue to invest, in expanding our operations, increasing our headcount, developing our products and differentiated technologies to support our growth and expanding our infrastructure. We expect our total operating expenses to increase significantly in the foreseeable future to meet our growth objectives. We plan to continue to invest in our sales and support operations throughout the world, with a particular focus in the near term of adding additional sales and field applications personnel in the Asia-Pacific region to further broaden our support and coverage of our existing end-customer base, in addition to developing new end-customer relationships and generating design wins. We also intend to continue to invest additional resources in research and development to support the development of our products and differentiated technologies. Any investments we make in our sales and marketing organization, or research and development will occur in advance of experiencing any benefits from such investments, and the return on these investments may be lower than we expect. In addition, as we invest in expanding our operations into new areas internationally, our business and results will become further subject to the risks and challenges of operations in those locations, including potentially higher operating expenses and the impact of legal and regulatory developments.

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Components of Condensed Consolidated Statements of Income

Revenue

We derive substantially all of our revenue through the sale of our products to distributors who, in turn, sell to our end-customers, which consists of OEM, ODM, contract manufacturers and design houses. Revenue is recognized in accordance with Accounting Standards Codification Topic 606 after we (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) satisfy the performance obligation when control is transferred to the customer.

Cost of Revenue

Cost of revenue primarily consists of costs paid to our third-party manufacturers for wafer fabrication, assembly and testing of our products. To a lesser extent, cost of revenue also includes write-downs of inventory for excess and obsolete inventory, depreciation of test equipment, and expenses relating to manufacturing support activities, including personnel-related costs, logistics and quality assurance and shipping.

Research and Development Expenses

Research and development expenses consist primarily of compensation and associated costs of employees engaged in research and development, contractor costs, tape-out costs, development testing and evaluation costs, and depreciation expense. Before releasing new products, we incur charges for mask sets, prototype wafers and mask set revisions, which we refer to as tape-out costs. Tape-out costs may cause our research and development costs to increase in absolute dollars in the future as we increase our investment in new product development and headcount to support our development efforts.

Selling, General and Administrative Expenses

Selling expenses consist primarily of personnel-related costs for our sales, business development, marketing, and applications engineering activities, promotional and other marketing expenses, and travel expenses. We expect selling expenses to increase in absolute dollars for the foreseeable future as we continue to expand our sales teams and increase our marketing activities. General and administrative expenses consist primarily of personnel-related costs, consulting expenses, professional fees and facility costs. Professional fees principally consist of legal, audit, tax and accounting services. We expect general and administrative expenses to increase in absolute dollars for the foreseeable future as we hire additional personnel, make improvements to our infrastructure and incur significant additional costs for the compliance requirements of operating as a U.S. company that is publicly traded in Japan, including higher legal, insurance and accounting expenses. Personnel-related costs, including salaries, benefits, bonuses and stock-based compensation, are the most significant component of each of selling expenses and general and administrative expenses.

Provision for Income Taxes

The provision for income taxes consists of our estimated federal, state and foreign income taxes based on our pre-tax income. Our provision differs from the federal statutory rate primarily due to the research and development credit, foreign derived intangible income deduction and stock-based compensation deduction.

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Results of Operations

The following table sets forth our condensed consolidated results of operations for the periods shown (in thousands):

	Three Months Ended
	March 31,
	2024		2023
Revenue	$	16,311	$	14,142
Cost of revenue (1)		7,515		6,497
Gross profit		8,796		7,645
Operating expenses: (1)
Research and development		2,084		2,112
Selling, general and administrative		2,520		2,230
Total operating expenses		4,604		4,342
Income from operations		4,192		3,303
Other income (expense), net		773		479
Income before income taxes		4,965		3,782
Provision for income taxes		585		406
Net income	$	4,380	$	3,376

(1)Includes stock-based compensation expense as follows (in thousands):

	Three Months Ended
	March 31,
	2024		2023
Cost of revenue	$	30	$	36
Research and development		150		119
Selling, general and administrative		219		207
Total	$	399	$	362

The following table sets forth the condensed consolidated statements of income for each of the periods as a percentage of revenue:

	Three Months Ended
	March 31,
	2024			2023
Revenue		100	%		100	%
Cost of revenue		46			46
Gross profit		54			54
Operating expenses:
Research and development		13			15
Selling, general and administrative		15			16
Total operating expenses		28			31
Income from operations		26			23
Other income (expense), net		5			3
Income before income taxes		31			26
Provision for income taxes		4			3
Net income		27	%		23	%

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Comparison of the Three Months ended March 31, 2024 and March 31, 2023

Revenue

The components of revenue are as follows (dollars in thousands):

	Three Months Ended March 31,				Change
	2024		2023		Amount			%
Automotive	$	12,481	$	8,797	$	3,684			42	%
Security surveillance		3,830		5,345		(1,515	)		(28	)%
Revenue	$	16,311	$	14,142	$	2,169			15	%

Revenue increased by $2.2 million, or 15%, for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. This was primarily attributable to a $3.7 million increase in automotive market revenue as a result of an increase in the volume of shipments, offset by a decrease in average selling prices attributable to product mix. Security surveillance market revenue decreased by $1.5 million due to a decrease in the volume of shipments.

Our product pricing increases or decreases in our target markets in response to our increased or decreased manufacturing costs. Additionally, fluctuations in our overall average selling price are directly attributable to changes in product mix given the natural pricing variation of the products in our portfolio and customer base. When the product mix shifts towards the higher priced products in our portfolio, the average selling price will be higher than when the product mix shifts towards the lower price point products.

Revenue by geographic region

The table below sets forth revenue by geographic region as a percent of total revenue for the periods presented:

	Three Months Ended
	March 31,
	2024			2023
China		75	%		74	%
Taiwan		15			13
South Korea		7			10
Japan		1			2
Other		2			1
Total		100	%		100	%

Cost of revenue and gross margin (dollars in thousands)

	Three Months Ended March 31,						Change
	2024			2023			Amount		%
Cost of revenue	$	7,515		$	6,497		$	1,018		16	%
Gross margin		54	%		54	%

Cost of revenue increased by $1.0 million, or 16% for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, and gross margins were flat with immaterial change for the three months ended March 31, 2024 and 2023.

We expect gross margins to fluctuate in future periods due to changes in customer and product mix, average unit selling prices, manufacturing costs, adjustments to inventory, if any, and end market product demand.

Research and development expense (dollars in thousands)

	Three Months Ended March 31,				Change
	2024		2023		Amount			%
Research and development	$	2,084	$	2,112	$	(28	)		(1	)%

Research and development expenses remained flat with immaterial change for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.

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Selling, general and administrative expense (dollars in thousands)

	Three Months Ended March 31,				Change
	2024		2023		Amount		%
Selling, general and administrative	$	2,520	$	2,230	$	290		13	%

Selling, general and administrative expenses increased by $0.3 million, or 13%, for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, due to a $0.2 million increase in compensation expense for personnel and a $0.1 million increase in other administrative costs.

Other income, net (dollars in thousands)

	Three Months Ended March 31,				Change
	2024		2023		Amount		%
Other income, net	$	773	$	479	$	294		61	%

Other income, net increased by $0.3 million or 61% for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due to a $0.2 million increase in interest income and a $0.1 million increase due to reimbursement of fixed asset purchased and depreciated previously.

Provision for income taxes (dollars in thousands)

	Three Months Ended March 31,				Change
	2024		2023		Amount		%
Provision for income taxes	$	585	$	406	$	179		44	%

The provision for income taxes increased by $0.2 million, or 44%, for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due to an increase in profit before taxes.

Liquidity and Capital Resources

Our primary use of cash is to fund our operations as we continue to grow our business. Cash used to fund operating expenses is impacted by the timing of when we pay expenses, as reflected in the changes in our outstanding accounts payable and accrued expenses. Our cash, cash equivalents, and short-term investments as of March 31, 2024 were $64.8 million. We believe our existing cash, cash equivalents, short-term investments, and cash we expect to generate from operations in the future will be sufficient to meet our anticipated cash needs for at least the next 12 months.

In 2021, our board of directors adopted a dividend policy to link dividend payments to business performance on an ongoing basis. During the three months ended March 31, 2024, cash used in financing activities consists primarily of $4.6 million in dividend payments to holders of our common stock (including common stock underlying JDS) under this recently adopted dividend policy.

Our future capital requirements will depend on many factors, including our growth rate, the timing and extent of our spending to support research and development activities, the timing and cost of establishing additional sales and marketing capabilities, the introduction of new and enhanced products and our costs to implement new manufacturing technologies or potentially acquire and integrate other companies or assets. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. Any debt financing obtained by us in the future could also involve restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. Additionally, if we raise additional funds through further issuances of equity, or issue convertible debt securities or other securities convertible into equity, our existing stockholders could suffer significant dilution in their percentage ownership, and any new equity securities we issue could have rights, preferences and privileges senior to those of holders of our common stock. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited.

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A summary of operating, investing and financing activities are shown in the following table (in thousands):

	Three Months Ended
	March 31,
	2024			2023
Net cash provided by operating activities	$	2,999		$	3,515
Net cash used in investing activities		(329	)		(5,791	)
Net cash used in financing activities		(4,585	)		(4,561	)
Net decrease in cash and cash equivalents	$	(1,915	)	$	(6,837	)

Operating Activities

Our primary source of cash from operating activities has been from cash collections from our customers. We expect cash flows from operating activities to be affected by fluctuations in sales. Our primary uses of cash from operating activities have been for personnel costs and investments in research and development and sales and marketing.

During the three months ended March 31, 2024, net cash provided by operating activities was $3.0 million, due to net income of $4.4 million, net cash outflows from non-cash charges of $0.1 million and net cash outflows from changes in operating assets and liabilities of $1.3 million.

Net cash outflows from non-cash charges of $0.1 million consisted of the accretion of premium on available-for-sale investments of $0.4 million, an increase in deferred tax assets of $0.3 million, and gain on disposal of fixed asset of $0.1 million, partially offset by stock-based compensation of $0.4 million, amortization of operating lease right-of-use assets of $0.2 million, and depreciation and amortization of $0.1 million.

Net cash outflows from changes in operating assets and liabilities totaled $1.3 million, consisting of a $1.6 million increase in inventory, net of valuation adjustment, as units manufactured during the period and on hand were in excess of product sales, a $0.6 million decrease in customer deposit, and a $0.1 million decrease in accounts payable. Outflows were partially offset by the inflow from a $1.0 million increase in accrued liabilities due to the timing of payments to vendors.

During the three months ended March 31, 2023, net cash provided by operating activities was $3.5 million, due to net income of $3.4 million, non-cash charges of $0.2 million, and net cash outflows from changes in operating assets and liabilities of $30,000. Non-cash charges primarily consisted of operating lease amortization right-of-use assets of $0.2 million, stock-based compensation of $0.4 million, offset by increase in deferred tax assets of $0.4 million.Net cash outflows from changes in operating assets and liabilities totaled $30,000 consisting primarily of $0.7 million decrease in accounts payables and other liabilities, a $0.2 million increase in prepaid expenses and other current assets, a $0.1 million increase in inventory as units manufactured during the period and on hand were in excess of product sales, offset by inflows from a $0.8 million increase in accrued liabilities due to the timing of payments to vendors, and a $0.2 million increase in customer deposits.

Investing Activities

During the three months ended March 31, 2024, cash used in investing activities was $0.3 million, primarily attributable to investments in debt securities, net of proceeds from maturities of debt securities.

During the three months ended March 31, 2023, cash used in investing activities was $5.8 million, primarily attributable to investments in debt securities, net of proceeds from maturities of debt securities.

Financing Activities

During the three months ended March 31, 2024, cash used in financing activities was approximately $4.6 million, primarily due to the outflow of $4.6 million in dividend payments.

During the three months ended March 31, 2023, cash used in financing activities was approximately $4.6 million, primarily due to the outflow of $4.6 million in dividend payments.

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Contractual Obligations

Our outstanding contractual obligations as of March 31, 2024 are summarized in the following table (in thousands):

			Payments Due by Period
	Total		Less than 1 year		1 to 3 years		More than 3 years
Purchase commitments	$	1,491		761		730		—
Operating leases		966		511		455		—

Obligations under contracts that we can cancel without a significant penalty are not included in the table above. We believe our cash provided by operations is sufficient to satisfy our contractual obligations for all periods presented.

Off-Balance Sheet Arrangements

During the periods presented, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies, Significant Estimates and Judgments

Our financial statements are prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. We evaluate our estimates, assumptions, and judgments on an ongoing basis. Our estimates, assumptions and judgments are based on historical experience and various other factors that we believe to be reasonable under the circumstances. Different assumptions and judgments would change the estimates used in the preparation of our financial statements, which, in turn, could change the results from those reported. Please see Note 1 of Part I, Item 1 of this Quarterly Report on Form 10-Q for a summary of significant accounting policies and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for a summary of our critical accounting estimates.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risk from fluctuations in foreign currency exchange rates and interest rates, which may adversely affect our results of operations and financial condition. We seek to minimize these risks through regular operating activities. We do not purchase, hold or sell derivative financial instruments for trading or speculative purposes.

Foreign exchange rates

We transact business globally and are subject to risks associated with fluctuating foreign exchange rates. Substantially all of our revenue was derived from sales outside of the U.S. in the three months ended March 31, 2024 and 2023. This revenue is generated in U.S. dollars with sales through distributors worldwide. Our operating expenses are denominated in the currencies of the countries in which our subsidiaries are located and may be subject to fluctuations due to changes in foreign currency exchange rates. To date, we have not entered into any hedging contracts, but may elect to do so in the future. A hypothetical increase or decrease of 10% in foreign exchange rates for the three months ended March 31, 2024 and 2023 would not have resulted in a significant increase or decrease in revenue or net income during that period.

The U.S. dollar is the functional currency for all of our foreign operations. Monetary assets and liabilities denominated in foreign currencies are remeasured into the functional currency of the subsidiary at the balance sheet date. The gains and losses from remeasurement of foreign currency denominated balances into the functional currency of the subsidiary are included in other income (expense), net on our condensed consolidated statements of income and comprehensive income.

Interest rates

Our exposure to market risk for changes in interest rates relates primarily to our cash, cash equivalents and investments. Our cash, cash equivalents and investments consist primarily of cash, U.S. treasury bills, government agency bonds, money market funds, corporate notes and bonds, and commercial paper. The primary objectives of our investment activities are the preservation of capital, the maintenance of liquidity, and capturing a market rate of return. We seek to minimize risk by investing cash in excess of our operating needs in high-quality instruments issued by highly creditworthy financial institutions. We do not purchase investments for trading or speculative purposes. Due to the nature of these instruments, we believe that we do not have any material exposure to

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changes in the fair value of our investment portfolio as a result of changes in interest rates. Decreases in interest rates, however, would reduce future interest income.

A hypothetical increase or decrease of 10% in interest rates in the three months ended March 31, 2024 and 2023 would not have resulted in a significant increase or decrease in cash, cash equivalents or the fair value of our investment during those periods.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on management’s evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective at a reasonable assurance level.

In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

Although we are not currently a party to any legal proceedings, and no legal proceeding is currently threatened against us, we may be subject to legal proceedings, claims and litigation, including intellectual property litigation, arising in the ordinary course of business. Such matters are subject to many uncertainties and outcomes and are not predictable with assurance. We accrue amounts that we believe are adequate to address any liabilities related to legal proceedings and other loss contingencies that we believe may result in a probable loss that is reasonably estimable.

Item 1A. Risk Factors.

There have been no material changes to the previously disclosed risk factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023. You should consider carefully these factors, together with all of the other information in this Quarterly Report on Form 10-Q, including our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, before making an investment decision.

Item 5. Other Information.

(c) Trading Plans.

During the three months ended March 31, 2024, no director or officer adopted or terminated any contract, instruction or written plan for the purchase or sale of securities of the Company pursuant to Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).

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Item 6. Exhibits.

Exhibit Number	Description
10.1#	Offer Letter, dated December 13, 2023, between the Company and Michelle P. Ho (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 14, 2023)
31.1	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a).
31.2	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a).
32.1*	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

# Indicates management contract or compensatory plan or arrangement.

* In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act or deemed to be incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933 except to the extent that the registrant specifically incorporates it by reference.

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SIGNATURES

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: May 15, 2024	By:	/s/ Fumihiro Kozato
		Fumihiro Kozato
		President and Chief Executive Officer (Principal Executive Officer)
Date: May 15, 2024	By:	/s/ Michelle P. Ho
		Michelle P. Ho
		Interim Chief Financial Officer (Principal Financial Officer)

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EX-31.1

Exhibit 31.1

PRINCIPAL EXECUTIVE OFFICER’S CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Fumihiro Kozato, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Techpoint, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 15, 2024	By:	/s/ Fumihiro Kozato
		Fumihiro Kozato
		President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

PRINCIPAL FINANCIAL OFFICER’S CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michelle P. Ho, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Techpoint, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 15, 2024	By:	/s/ Michelle P. Ho
		Michelle P. Ho
		Interim Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

PRINCIPAL EXECUTIVE OFFICER’S CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Techpoint, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Fumihiro Kozato, the Chief Executive Officer of the Company certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 15, 2024	By:	/s/ Fumihiro Kozato
		Fumihiro Kozato
		President and Chief Executive Officer (Principal Executive Officer)

EX-32.2

Exhibit 32.2

PRINCIPAL FINANCIAL OFFICER’S CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Techpoint, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Micelle P. Ho certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 15, 2024	By:	/s/ Michelle P. Ho
		Michelle P. Ho
		Interim Chief Financial Officer (Principal Financial Officer)

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2024	May 06, 2024
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2024
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Entity Registrant Name	Techpoint, Inc.
Entity Central Index Key	0001556898
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity File Number	000-55843
Entity Tax Identification Number	80-0806545
Entity Address, Address Line One	2550 N. First Street
Entity Address, Address Line Two	#550
Entity Address, City or Town	San Jose
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	USA 95131
Entity Address, Country	US
City Area Code	408
Local Phone Number	324-0588
Entity Common Stock, Shares Outstanding		18,465,679
Entity Interactive Data Current	Yes
Entity Incorporation, State or Country Code	DE
Document Quarterly Report	true
Document Transition Report	false
Japanese Depositary Shares | Japan Exchange Group
Document Information [Line Items]
Trading Symbol	0001556898
Title of 12(b) Security	Japanese Depositary Shares, each representing one
Common Stock, Par Value
Document Information [Line Items]
Trading Symbol	0001556898
Title of 12(b) Security	Common Stock, $0.0001 Par Value Per Share

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 11,756	$ 13,671
Short-term investments	53,014	51,788
Accounts receivable	45	40
Inventory	11,071	9,518
Prepaid expenses and other current assets	846	939
Total current assets	76,732	75,956
Property and equipment, net	409	522
Deferred tax assets	3,881	3,620
Right-of-use assets	925	1,045
Intangible assets, net	1,008	1,036
Goodwill	891	891
Long-term investments	0	500
Other assets	199	237
Total assets	84,045	83,807
Current liabilities:
Accounts payable	1,454	1,707
Accrued liabilities	3,351	2,322
Customer deposits	846	1,448
Lease liabilities	453	497
Dividend payable		4,599
Total current liabilities	6,104	10,573
Other liabilities	850	939
Total liabilities	6,954	11,512
Commitments and contingencies (Note 5)
Stockholders’ equity
Preferred stock, par value $0.0001 per share - 5,000,000 shares authorized as of March 31, 2024 and December 31, 2023; nil shares issued and outstanding as of March 31, 2024 and December 31, 2023
Common stock, par value $0.0001 per share - 75,000,000 shares authorized as of March 31, 2024 and December 31, 2023; 18,432,450 and 18,395,682 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively	2	2
Additional paid-in capital	27,894	27,477
Accumulated other comprehensive loss	22	18
Retained earnings	49,173	44,798
Total stockholders’ equity	77,091	72,295
Total liabilities and stockholders’ equity	$ 84,045	$ 83,807

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	75,000,000	75,000,000
Common stock, shares issued	18,432,450	18,395,682
Common stock, shares outstanding	18,432,450	18,395,682

XML

Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Statement of Comprehensive Income [Abstract]
Revenue	$ 16,311	$ 14,142
Cost of revenue	7,515	6,497
Gross profit	8,796	7,645
Operating expenses
Research and development	2,084	2,112
Selling, general and administrative	2,520	2,230
Total operating expenses	4,604	4,342
Income from operations	4,192	3,303
Other income, net	773	479
Income before income taxes	4,965	3,782
Provision for income taxes	585	406
Net income	$ 4,380	$ 3,376
Net income per share:
Basic	$ 0.24	$ 0.19
Diluted	$ 0.23	$ 0.18
Weighted average shares outstanding used in computing net income per share
Basic	18,431,048	18,231,078
Diluted	18,927,227	18,597,290
Comprehensive income:
Net Income (Loss)	$ 4,380	$ 3,376
Other comprehensive income, net of tax:
Unrealized loss on available-for-sale debt securities, net of tax expense of $1 and $8 for the three months ended March 31, 2024 and 2023, respectively	4	32
Comprehensive income	$ 4,384	$ 3,408

XML

Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Statement of Comprehensive Income [Abstract]
Unrealized loss on available-for-sale debt securities, net of tax expense	$ 1	$ 8

XML

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings
Beginning Balances at Dec. 31, 2022	$ 62,076	$ 2	$ 26,046	$ (147)	$ 36,175
Beginning Balances, Shares at Dec. 31, 2022		18,198,737
Other comprehensive income -- unrealized gain on available-for-sale debt securities	32			32
Issuance of common stock upon exercise of stock options	29		29
Issuance of common stock upon exercise of stock options, shares		24,600
Issuance of common stock upon vesting of restricted stock units, Shares		32,425
Shares repurchased for tax withholdings on vesting of restricted stock units	(35)		(35)
Shares repurchased for tax withholdings on vesting of restricted stock units, Shares		(4,636)
Stock-based compensation	362		362
Cash dividend adjustments	(4)				(4)
Net Income (Loss)	3,376				3,376
Ending Balances at Mar. 31, 2023	65,836	$ 2	26,402	(115)	39,547
Ending Balances, Shares at Mar. 31, 2023		18,251,126
Beginning Balances at Dec. 31, 2023	72,295	$ 2	27,477	18	44,798
Beginning Balances, Shares at Dec. 31, 2023		18,395,682
Other comprehensive income -- unrealized gain on available-for-sale debt securities	4			4
Issuance of common stock upon exercise of stock options	57		57
Issuance of common stock upon exercise of stock options, shares		13,000
Issuance of common stock upon vesting of restricted stock units, Shares		27,575
Shares repurchased for tax withholdings on vesting of restricted stock units	(39)		(39)
Shares repurchased for tax withholdings on vesting of restricted stock units, Shares		(3,807)
Stock-based compensation	399		399
Cash dividend adjustments	(5)				(5)
Net Income (Loss)	4,380				4,380
Ending Balances at Mar. 31, 2024	$ 77,091	$ 2	$ 27,894	$ 22	$ 49,173
Ending Balances, Shares at Mar. 31, 2024		18,432,450

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash Flows From Operating Activities
Net income	$ 4,380	$ 3,376
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	92	101
Stock-based compensation	399	362
Accretion of premium on available-for-sale investments	(378)	(157)
Gain on disposal of fixed asset	(132)
Inventory valuation adjustment	50	43
Deferred income taxes	(265)	(357)
Noncash lease expense	178	177
Unrealized gain	(58)
Changes in operating assets and liabilities:
Accounts receivable	(5)	(46)
Inventory	(1,603)	(93)
Prepaid expenses and other current assets	130	(186)
Other assets	38	2
Accounts payable	(63)	(491)
Accrued liabilities	1,029	765
Customer deposits	(602)	185
Lease liabilities	(102)	4
Other liabilities	(89)	(170)
Net cash provided by operating activities	2,999	3,515
Cash Flows From Investing Activities
Purchase of property and equipment	(9)	(57)
Purchases of debt securities	(21,177)	(8,034)
Proceeds from maturities of debt securities	20,857	2,300
Net cash used in investing activities	(329)	(5,791)
Cash Flows From Financing Activities
Payment of dividends	(4,603)	(4,555)
Net proceeds from exercise of stock options	57	29
Payment for shares withheld for tax withholdings on vesting of restricted stock units	(39)	(35)
Net cash used in financing activities	(4,585)	(4,561)
Net decrease in cash and cash equivalents	(1,915)	(6,837)
Cash and cash equivalents at beginning of period	13,671	19,392
Cash and cash equivalents at end of period	11,756	12,555
Supplemental Disclosure of Cash Flow Information
Cash paid for income taxes	36	36
Supplemental Disclosure of Noncash Investing and Financing Information
Right-of-use assets obtained in exchange for lease liabilities	58
Property and equipment purchased but not yet paid		$ 19
Vender credit received upon disposal of fixed asset	$ 58

XML

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ 4,380	$ 3,376

XML

Insider Trading Arrangements	3 Months Ended
	Mar. 31, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

XML

Organization and Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Summary of Significant Accounting Policies

1. Organization and Summary of Significant Accounting Policies

Organization

Techpoint, Inc. (together with its wholly-owned subsidiaries, the “Company”) was originally incorporated in California in April 2012 and reincorporated in Delaware in July 2017. The Company is a fabless semiconductor company that designs, markets and sells mixed-signal integrated circuits for multiple video applications in the security surveillance and automotive markets. The Company is headquartered in San Jose, California.

Basis of Consolidation and Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). All intercompany balances and transactions have been eliminated. The functional currency of each of the Company’s subsidiaries is the U.S. dollar. Foreign currency gains or losses are recorded as other income (expense), net in the condensed consolidated statements of income and comprehensive income.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2023 contained in the Company’s Annual Report on Form 10-K.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which include normal recurring adjustments necessary to present fairly the Company’s financial position, results of operations and cash flows for the interim periods and are not necessarily indicative of the results to be expected for the full fiscal year or for any other future annual or interim periods.

Revenue Recognition

The Company principally sells its products to distributors who, in turn, sell to original equipment manufacturers (“OEM”), original design manufacturers (“ODM”), contract manufacturers, and design houses. Product revenue consists of sales of mixed-signal integrated circuits into the security surveillance and automotive markets. The Company generally requires advance payments from customers and records these advance payments, or contract liabilities, as customer deposits on its condensed consolidated balance sheet. No stock rotation, price protection or return rights are offered. The Company provides product assurance warranty only and does not offer warranties to be purchased separately. Revenue is recognized when control of the product is transferred to the Company's customers, upon shipment, whereby legal title, risks and rewards of ownership, and physical possession are transferred to the customer.

Use of Management’s Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Significant estimates included in the condensed consolidated financial statements include inventory valuation and the valuation allowance for recorded deferred tax assets. These estimates are based upon information available as of the date of the condensed consolidated financial statements. Actual results could differ materially from those estimates.

Certain Significant Risks and Uncertainties

The Company operates in a dynamic industry and can be affected by a variety of factors. For example, any of the following areas could have a negative effect on the Company in terms of its future financial position, results of operations or cash flows: the general state of the U.S., China and world economies; the highly cyclical nature of the industries the Company serves; successful and timely completion of product design efforts; trade restrictions by the United States against the Company's customers in China, or potential retaliatory trade actions taken by China; the loss of any of its larger customers; restrictions on the Company's ability to sell to foreign customers due to additional U.S. or new China trade laws, regulations and requirements; disruptions of the supply chain of components needed for its products; fundamental changes in the technology underlying the Company’s products; the hiring, training and retention of key employees; and new product design introductions by competitors.

The Company has been impacted by adverse macroeconomic and geopolitical conditions. These conditions include but are not limited to inflation, foreign currency fluctuations, the COVID-19 pandemic, and the supply chain challenges and disruptions caused by any of these events. Management continues to actively monitor the impact of these conditions on the Company’s financial condition, liquidity, operations, end-customers (including its significant end-customers), distributors, suppliers, industry, and workforce. The extent to which such events impact the Company’s business, prospects and results of operations will depend on future developments, which are highly uncertain. The Company has made estimates of the impact of these events within its financial statements and there may be changes to those estimates in future periods.

Concentration of Customer and Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, investments, and trade receivables. Risks associated with cash and cash equivalents, and investments are mitigated by banking with, and investing in, creditworthy institutions. The Company generally requires advance payments from customers. The Company also performs credit evaluations of its customers and provides credit to certain customers in the normal course of business. The Company has not incurred bad debt write-offs during any of the periods presented.

For each significant customer, or distributor, and significant end-customer, revenue as a percentage of total revenue was as follows:

	Three Months Ended
	March 31,
	2024			2023
Customer
Customer A		37	%		47	%
Customer B		11	%	*
End-Customer
End-Customer A (1)		16	%		27	%

* Less than 10%

(1)Sales to End-Customer A primarily occurred through Customer A.

Concentration of Supplier Risk

The Company currently relies on Taiwan Semiconductor Manufacturing Company Limited and United Microelectronics Corporation (formerly Fujitsu Electronics America, Inc.) to produce substantially all of its semiconductors. Also, it relies on Advanced Semiconductor Engineering, Inc., Sigurd Microelectronics Corporation, ATX Semiconductor (Shanghai) Co., Ltd, and Chizhou Hisemi Electronics Technology Co., Ltd to assemble, package and test substantially all of its semiconductors to satisfy substantially all of the Company’s production requirements. The failure of any subcontractor to fulfill the production requirements of the Company on a timely basis would adversely impact future results. Although there are other subcontractors that are capable of providing similar services, an unexpected change in either subcontractor would cause delays in the Company’s products and potentially result in a significant loss of revenue.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure. This guidance improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This guidance becomes effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company plans to adopt this guidance prior to its effective date and has not early adopted such guidance for the period ending March 31, 2024. The impact of this guidance is not expected to have any material impact on the disclosure of the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to income tax disclosure. This guidance modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign operations) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign operations). This guidance also requires entities to disclose their income tax payments to international, federal and state and local jurisdictions. This guidance becomes effective for fiscal years beginning after December 15, 2024. The Company plans to adopt this guidance prior to the effective date and has not early adopted for the period ending March 31, 2024. The impact of this guidance is not expected to have any material impact on the Company’s consolidated financial statements.

Reclassification

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported current/total assets, current/total liabilities, or results of operations.

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Balance Sheet Components

3 Months Ended

Mar. 31, 2024

Balance Sheet Related Disclosures [Abstract]

Balance Sheet Components

2. Balance Sheet Components

Inventory

Inventory consists of the following (in thousands):

	March 31,		December 31,
	2024		2023
Work in process	$	6,654	$	4,795
Finished goods		4,417		4,723
Total inventory	$	11,071	$	9,518

Property and Equipment, net

Property and equipment, net consists of the following (in thousands):

	March 31,			December 31,
	2024			2023
Machinery, Computer equipment and software	$	2,576		$	2,759
Leasehold improvements		94			94
Furniture		38			36
Total property and equipment		2,708			2,889
Less: accumulated depreciation		(2,299	)		(2,367	)
Total property and equipment, net	$	409		$	522

The Company recorded $0.1 million of depreciation expense for each of the three months ended March 31, 2024 and 2023.

Intangible assets, net and goodwill

Goodwill as of March 31, 2024 and December 31, 2023 was $0.9 million and $0.9 million, respectively. Goodwill is tested for impairment annually as of December 31 or more frequently on a reporting unit basis when events or changes in circumstances indicate that impairment may have occurred. The Company is not aware of any events or circumstances indicating impairment of goodwill during the period.

Changes in the carrying amount of goodwill for the three months ended March 31, 2024 are as follows (in thousands):

	Total
Goodwill at December 31, 2023	$	891
Adjustments		—
Goodwill at March 31, 2024	$	891

Intangible assets, except goodwill consist of the following (in thousands):

	March 31,
	2024
Acquired intellectual property	$	1,090
Total finite-lived intangible assets		1,090
Less: accumulated amortization		(82	)
Total finite-lived intangible assets, net	$	1,008

The amortization expenses of intangible assets were $27,000 and nil as of March 31, 2024 and 2023, respectively.

Acquired intellectual property is amortized over 10 years of its useful life. As of March 31, 2024, expected amortization expense for the unamortized intangible assets for the next five years and thereafter is as follows (in thousands):

Year Ending December 31,	Amount
Remainder of 2024	$	82
2025		109
2026		109
2027		109
2028		109
Thereafter		490
Total	$	1,008

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

	March 31,		December 31,
	2024		2023
Payroll-related expenses	$	1,326	$	983
Taxes payable		1,256		468
Accrued inventory		254		401
Engineering service		196		199
Accrued warranty		178		180
Professional fees		108		23
Other		33		68
Total accrued liabilities	$	3,351	$	2,322

Customer Deposits

Customer deposits represent payments received in advance of shipments and fluctuate depending on timing of customer pre-payments and product shipment. Customer deposits were $0.8 million and $1.4 million as of March 31, 2024 and December 31, 2023, respectively. The Company generally expects to recognize revenue from customer deposits during the three month period immediately following the balance sheet date. During the three months ended March 31, 2024, the Company recognized $1.4 million of revenue from the December 31, 2023 customer deposits balance.

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Fair Value Measurements of Financial Instruments

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements of Financial Instruments

3. Fair Value Measurements of Financial Instruments

Summary of Financial Instruments

The following is a summary of financial instruments (in thousands):

	March 31, 2024
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Values
Available-for-sale securities:
Certificates of deposit	$	3,901	$	—	$	(1	)	$	3,900
Treasury bills		42,322		94		(28	)		42,388
Government agency bonds		512		—		(1	)		511
Corporate bonds		9,446		—		(35	)		9,411
Total available-for-sale securities	$	56,181	$	94	$	(65	)	$	56,210
Reported in:
Cash and cash equivalents								$	3,196
Short-term investments									53,014
Long-term investments									—
Total available-for-sale securities								$	56,210

	December 31, 2023
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Values
Available-for-sale securities:
Certificates of deposit	$	3,633	$	1	$	—		$	3,634
Treasury bills		37,624	76			—			37,700
Government agency bonds		2,600		—		(3	)		2,597
Corporate bonds		11,504		—		(51	)		11,453
Total available-for-sale securities	$	55,361	$	77	$	(54	)	$	55,384
Reported in:
Cash and cash equivalents								$	3,096
Short-term investments									51,788
Long-term investments									500
Total available-for-sale securities								$	55,384

The contractual maturities of available-for-sale securities are presented in the following table (in thousands):

	March 31, 2024				December 31, 2023
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	56,181	$	56,210	$	54,859	$	54,884
Due between one to two years		—		—		502		500
	$	56,181	$	56,210	$	55,361	$	55,384

The Company had 68 investments in unrealized loss positions as of March 31, 2024. 53 of such investments have been in unrealized loss positions for less than twelve months. The total Fair Value of such investments is $47.6 million with unrealized losses of approximately $0.1 million as of March 31, 2024. There were no material gross unrealized losses from available-for-sale securities and no material realized gains or losses from available-for-sale securities that were reclassified from accumulated other comprehensive income for the three months ended March 31, 2024.

For investments in available-for-sale debt securities that have unrealized losses, the Company evaluates (i) whether it has the intention to sell any of these investments and (ii) whether it is more likely than not that it will be required to sell any of these investments before recovery of the entire amortized cost basis. Based on this evaluation, the Company determined that there were no other-than-temporary impairments associated with investments as of March 31, 2024.

There were no sales of available-for-sale securities for the three months ended March 31, 2024 and 2023.

Fair Value Measurements

Fair value is defined as the exchange price that would be received from selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company measures financial assets and liabilities at fair value at each reporting period using a fair value hierarchy which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:

Level 1. Quoted prices in active markets for identical assets or liabilities.

Level 2. Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3. Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

Financial assets measured at fair value on a recurring basis were as follows (in thousands):

	Fair Value Measurement at Reporting Date Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total
As of March 31, 2024
Financial assets - available-for-sale securities
Certificates of deposit	$	—		3,900	$	3,900
Treasury bills		—		42,388		42,388
Governmental agency bonds		—		511		511
Corporate bonds		9,411		—		9,411
Total financial assets - available-for-sale securities	$	9,411	$	46,799	$	56,210
As of December 31, 2023
Financial assets - available-for-sale securities
Certificates of deposit	$	—	$	3,634	$	3,634
Treasury bills		2,198		35,502		37,700
Governmental agency bonds		600		1,997		2,597
Corporate bonds		10,953		500		11,453
Total financial assets - available-for-sale securities	$	13,751	$	41,633	$	55,384

The Company uses a pricing service to assist in determining the fair values of all of its cash equivalents, short-term investments and long-term investments. The pricing service uses inputs from multiple industry standard data providers or other third party sources and applies various acceptable methodologies.

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Segment Information

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

Segment Information

4. Segment Information

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

The Company’s chief operating decision maker, the chief executive officer, reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance on a regular basis. Accordingly, the Company considers itself to be one reportable segment, which is comprised of one operating segment - the designing, marketing and selling of mixed-signal integrated circuits for the security surveillance and automotive markets.

Product revenue from customers is designated based on the geographic region to which the product is delivered. Revenue by geographic region was as follows (in thousands):

	Three Months Ended
	March 31,
	2024		2023
China	$	12,227	$	10,519
Taiwan		2,340		1,771
South Korea		1,161		1,373
Japan		192		381
Other		391		98
Total revenue	$	16,311	$	14,142

Revenue by principal product lines was as follows (in thousands):

	Three Months Ended
	March 31,
	2024		2023
Automotive	$	12,481	$	8,797
Security surveillance		3,830		5,345
Total revenue	$	16,311	$	14,142

Long-lived assets by geographic region were as follows (in thousands):

	March 31,		December 31,
	2024		2023
Taiwan	$	264	$	308
China		113		176
United States		20		29
South Korea		9		6
Japan		3		3
Total property and equipment - net	$	409	$	522

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

5. Commitments and Contingencies

Operating leases

The Company determines if an arrangement contains a lease at inception. The Company leases facilities under non-cancelable lease agreements expiring through fiscal year 2024. The Company’s agreements do not include variable lease payments or any restrictions or covenants imposed by the leases. As the rate implicit in each lease agreement is not readily determinable, the Company’s incremental borrowing rate was used as the discount rate. The Company’s right-of-use assets and lease liabilities have been adjusted for initial direct costs and prepaid rent but do not reflect any options to extend or terminate its lease agreements, any residual value guarantees, or any leases that have not yet commenced.

The right-of-use assets and lease liabilities related to operating leases were as follows (in thousands):

			December 31,
	March 31, 2024		2023
Right-of-use assets	$	925	$	1,045
Lease liabilities －Current	$	453	$	497
Lease liabilities － Non-Current		432		531
Total lease liabilities	$	885	$	1,028

Rent expense under operating leases was $0.2 million for each of the three months ended March 31, 2024 and 2023.

The rent expense recognized from short-term leases was $6,000 for each of the three months ended March 31, 2024 and 2023.

The following tables summarize the Company’s lease costs and weighted-average assumptions used in determining its right-of-use assets and lease liabilities (in thousands):

	Three Months Ended			Three Months Ended
	March 31, 2024			March 31, 2023
Operating lease cost	$	200		$	190
Cash paid for operating leases	$	219		$	185
Right-of-use assets obtained in exchange for operating lease liabilities (1)	$	58		$	—
Weighted average remaining term for operating leases		1.85		1.17 years
Weighted average discount rate for operating leases		8.1	%		5.6	%

(1) During the three months ended March 31, 2024, the Company extended the term of its lease in Taiwan. This lease was treated as a modification and accounted for as a non-cash change in existing lease liabilities and the right-of-use assets.

During the three months ended March 31, 2023, the Company did not enter into any new lease or lease modification.

As of March 31, 2024, the aggregate future minimum lease payments under non-cancelable operating leases consist of the following (in thousands):

Year Ending December 31,	Amount
2024 (remaining nine months)	$	392
2025		417
2026		157
Total		966
Less effects of discounting		(81	)
Total lease liabilities	$	885

Purchase Commitments

As of March 31, 2024, the Company had purchase commitments with its third-party suppliers through fiscal year 2026. Future minimum payments under purchase commitments total $0.5 million for the remaining nine months ending December 31, 2024, $0.7 million for the year ending December 31, 2025, and $0.3 million for the year ending December 31, 2026.

Litigation

Although the Company is not currently a party to any legal proceedings and there is no litigation currently threatened, the Company may be subject to legal proceedings, claims and litigation, including intellectual property litigation, arising in the ordinary course of business. Such matters are subject to many uncertainties and outcomes and are not predictable with assurance. The Company accrues amounts that it believes are adequate to address any liabilities related to legal proceedings and other loss contingencies that the Company believes will result in a probable loss that is reasonably estimable.

Indemnification

During the normal course of business, the Company may make certain indemnities, commitments and guarantees which may include intellectual property indemnities to certain of its customers in connection with the sales of the Company’s products and indemnities for liabilities associated with the infringement of other parties’ technology based upon the Company’s products. The Company’s exposure under these indemnification provisions is generally limited to the total amount paid by a customer under the agreement. However, certain agreements include indemnification provisions that could potentially expose the Company to losses in excess of the amount received under the agreement. In addition, the Company indemnifies its officers, directors and certain key employees while they are serving in good faith in such capacities.

The Company has not recorded any liability for these indemnities, commitments and guarantees in the accompanying condensed consolidated balance sheets. Where necessary, the Company accrues for losses for any known contingent liabilities, including those that may arise from indemnification provisions, when future payment is probable.

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Stockholders' Equity

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

Stockholders' Equity

6. Stockholders’ Equity

Preferred Stock

The Company is authorized to issue 5,000,000 shares of preferred stock with a $0.0001 par value per share as of March 31, 2024 and December 31, 2023. There were no shares of preferred stock issued and outstanding as of March 31, 2024 and December 31, 2023.

Common Stock

The Company is authorized to issue 75,000,000 shares of common stock with $0.0001 par value per share as of March 31, 2024 and December 31, 2023. As of March 31, 2024, the shares of common stock issued and outstanding totaled 18,432,450. As of December 31, 2023, the shares of common stock issued and outstanding were 18,395,682.

The Company has reserved the following number of shares of common stock for future issuances:

	March 31, 2024
Outstanding stock awards		1,006,331
Shares available for future issuance under the 2017 Stock Incentive Plan		7,065,953
Total common stock reserved for future issuances		8,072,284

Dividend

On December 15, 2023, the Company announced a cash dividend of an aggregate of $0.50 per share for fiscal year 2024, payable in two equal installments of $0.25 per share. The first installment of the dividend was paid during the first fiscal quarter of 2024 in the aggregate amount of $4.6 million to stockholders of record as of the close of business on January 31, 2024. The second installment of the dividend has not accrued as of March 31, 2024 because it is anticipated to be paid in the third fiscal quarter of 2024 and the declaration of the second installment is subject to the approval of the Company’s board of directors and applicable law.

On December 16, 2022, the Company announced a cash dividend of an aggregate of $0.50 per share for fiscal 2023, payable in two equal installments of $0.25 per share. The first installment of the dividend was paid during the first fiscal quarter of 2023 to stockholders of record as of the close of business on January 31, 2023. The second installment of the dividend was paid in July 2023 to stockholders of record as of the close of business on June 30, 2023. The aggregate amount of the two dividend payments was $9.1 million.

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Equity Incentive Plans

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Equity Incentive Plans

7. Equity Incentive Plans

Stock Incentive Plans

In April 2012, the Company adopted a 2012 Stock Option Plan (“2012 Plan”). The 2012 Plan provides for the granting of stock-based awards to employees, directors, and consultants under terms and provisions established by the Company’s board of directors. Under the terms of the 2012 Plan, options may be granted at an exercise price not less than fair market value. For employees holding more than 10% of the voting rights of all classes of stock, the exercise prices for incentive and non-statutory stock options must be at least 110% of the fair market value of the common stock on the grant date, as determined by the Company’s board of directors. The terms of options granted under the 2012 Plan may not exceed ten years.

The 2012 Plan was superseded by a 2017 Stock Option Plan (“2017 Plan”). Any outstanding awards under the 2012 Plan will continue to be governed by the terms of the 2012 Plan.

In August 2017, the Company adopted the 2017 Plan. The Company’s stockholders approved the 2017 Plan in September 2017 and it became effective immediately prior to the closing of the Company’s initial public offering. In connection with the adoption of the 2017 Plan, no additional awards and no shares of common stock remain available for future issuance under the 2012 Plan and shares reserved but not issued under the 2012 Plan as of the effective date of the 2017 Plan were included in the number of shares reserved for issuance under the 2017 Plan. In addition, shares subject to awards under the 2012 Plan that are forfeited or terminated are added to the 2017 Plan. The number of shares available for issuance under the 2017 Plan is automatically increased on the first day of each fiscal year beginning on January 1, 2018 and ending on (and including) January 1, 2027, in an amount equal to the lesser of (1) 4% of the outstanding shares of the Company’s common stock on the last day of the immediately preceding fiscal year, or (2) another amount determined by the Company’s board of directors. The 2017 Plan provides for the granting of incentive stock options within the meaning of Section 422 of the Internal Revenue Code to employees and the granting of non-statutory stock options to employees, non-employee directors, advisors and consultants. The 2017 Plan also provides for the grants of restricted stock, stock appreciation rights, stock unit and cash-based awards to employees, non-employee directors, advisors and consultants.

On November 7, 2023, the board of directors of the Company determined not to increase the number of shares of the Company’s common stock authorized for issuance under its 2017 Plan for the 2024 fiscal year, which would have been otherwise subject to a four percent (4%) annual increase on January 1, 2024.

The Company’s stock award activity under the 2017 Plan is summarized as follows:

	Awards Available for Grant
As of December 31, 2023		7,057,446
Authorized		—
Granted		(5,000	)
Canceled		13,507
As of March 31, 2024		7,065,953

Stock Options

The Company’s stock option activity under the 2017 Plan is summarized as follows:

	Options Issued and Outstanding			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (in thousands)
As of December 31, 2023		431,081		$	2.81		3.3	$	3,305
Granted		—			—
Exercised		(13,000	)		2.48
Canceled		—
As of March 31, 2024		418,081			2.83		3.0		2,490
Options vested and exercisable as of March 31, 2024		418,081			2.83		3.0		2,490

The stock options outstanding and exercisable by exercise price as of March 31, 2024 are as follows:

		Options Outstanding, Vested and Exercisable
Exercise Price		Number Outstanding		Weighted- Average Remaining Contractual Life (Years)		Weighted- Average Exercise Price
$	0.37		10,000		1.3	$	0.37
	0.97		8,000		1.6		0.97
	2.51		46,780		2.4		2.51
	2.89		40,000		2.9		2.89
	2.93		233,734		3.2		2.93
	3.18		79,567		3.3		3.18
			418,081		3.0		2.83

The aggregate intrinsic value of options exercised for the three months ended March 31, 2024 and 2023 was $0.2 million and $0.1 million, respectively. The Company has various vesting agreements with its employees. Options granted generally vest over a five-year period and generally are exercisable for up to 10 years.

Restricted Stock Units

The Company’s restricted stock units activity is summarized as follows:

	Units Issued and Outstanding			Weighted-Average Grant Date Fair Value
As of December 31, 2023		620,525		$	7.63
Granted		5,000			9.82
Released, net		(23,768	)		10.35
Canceled		(13,507	)		10.06
As of March 31, 2024		588,250			7.59

Restricted stock units are converted into shares of the Company’s common stock upon vesting on a one-for-one basis. Restricted stock unit awards generally vest over a five-year period and are subject to the grantee’s continued service with the Company.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

8. Stock-Based Compensation

The following table summarizes the distribution of stock-based compensation expense (in thousands):

	Three Months Ended
	March 31,
	2024		2023
Cost of revenue	$	30	$	36
Research and development		150		119
Selling, general and administrative		219		207
Total	$	399	$	362

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Net Income Per Share

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

Net Income Per Share

9. Net Income Per Share

The following table presents the calculation of basic and diluted net income per share (amounts in thousands, except share and per share data):

	Three Months Ended
	March 31,
	2024		2023
Numerator:
Basic and Diluted:
Net income	$	4,380	$	3,376
Denominator:
Basic shares:
Weighted-average shares outstanding used in computing basic    net income per share		18,431,048		18,231,078
Diluted shares:
Effect of potentially dilutive securities:
Stock options and restricted stock units		496,179		366,212
Weighted-average shares used in computing diluted net    income per share		18,927,227		18,597,290
Net income per share:
Basic	$	0.24	$	0.19
Diluted	$	0.23	$	0.18

The potentially dilutive shares of common stock outstanding for the three months ended March 31, 2024 and 2023 that were excluded from the computation of diluted net income per share as the effect would have been antidilutive, was approximately 73,000 and 245,000 shares, respectively.

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Provision for Income Taxes

3 Months Ended

Mar. 31, 2024

Income Tax Disclosure [Abstract]

Provision for Income Taxes

10. Provision for Income Taxes

The components of income before income taxes were as follows (in thousands):

	Three Months Ended
	March 31,
	2024		2023
Domestic	$	4,903	$	3,722
Foreign		62		60
Income before income taxes	$	4,965	$	3,782

The components of the provision for income taxes were as follows (in thousands):

	Three Months Ended
	March 31,
	2024		2023
United States	$	577	$	400
Foreign		8		6
Provision for income taxes	$	585	$	406

The Company applies the provisions of the applicable accounting guidance regarding accounting for uncertainty in income taxes, which require application of a more-likely-than-not threshold to the recognition and derecognition of uncertain tax positions. If the recognition threshold is met, the applicable accounting guidance permits the recognition of a tax benefit measured at the largest amount of such tax benefit that, in the Company’s judgment, is more than fifty percent likely to be realized upon settlement. It further requires that a change in judgment related to the expected ultimate resolution of uncertain tax positions to be recognized in earnings in the period in which such determination is made. The Company will continue to review its tax positions and provide for, or reverse, unrecognized tax benefits as issues arise.

As of March 31, 2024, there was no material increase in the liability for unrecognized tax benefits and no accrued interest or penalties related to uncertain tax positions.

As of March 31, 2024, the Company had approximately $0.4 million of unrecognized tax benefits of which $0.3 million was netted against deferred tax assets with a full valuation allowance. If these amounts are recognized, there will be a tax benefit of $0.1 million against the Company’s effective tax rate.

The Company files income tax returns in the U.S. federal, California, and foreign jurisdictions with varying statutes of limitations. The Company is generally no longer subject to tax examinations for years prior to 2019 for federal purposes and 2018 for state purposes, except in certain limited circumstances. In California, the Company's net operating loss (“NOL”) and credit carryforwards from all years may be subject to adjustment for four years for California following the year in which utilized. Currently, the Company has California NOLs and credit carryforwards from 2012 which remain subject to adjustment for four years following the year in which utilized, and therefore tax years 2012 through 2022 may remain open for state audit. The Company does not anticipate that any potential tax adjustments will have a significant impact on its financial position or results of operations.

The CHIPS and Science Act of 2022 ("CHIPS") and the Inflation Reduction Act ("IRA") of 2022 were signed into law by President Biden on August 9, 2022 and August 16, 2022, respectively. The legislation introduces new options for monetizing certain credits, a corporate alternative minimum tax, and a stock repurchase excise tax. The Company has concluded that the impact of any of the provisions included in CHIPS and IRA acts did not have a material impact on the Company's unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2024.

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Organization and Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Organization

Techpoint, Inc. (together with its wholly-owned subsidiaries, the “Company”) was originally incorporated in California in April 2012 and reincorporated in Delaware in July 2017. The Company is a fabless semiconductor company that designs, markets and sells mixed-signal integrated circuits for multiple video applications in the security surveillance and automotive markets. The Company is headquartered in San Jose, California.

Basis of Consolidation and Significant Accounting Policies

Basis of Consolidation and Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). All intercompany balances and transactions have been eliminated. The functional currency of each of the Company’s subsidiaries is the U.S. dollar. Foreign currency gains or losses are recorded as other income (expense), net in the condensed consolidated statements of income and comprehensive income.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2023 contained in the Company’s Annual Report on Form 10-K.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which include normal recurring adjustments necessary to present fairly the Company’s financial position, results of operations and cash flows for the interim periods and are not necessarily indicative of the results to be expected for the full fiscal year or for any other future annual or interim periods.

Revenue Recognition

Revenue Recognition

The Company principally sells its products to distributors who, in turn, sell to original equipment manufacturers (“OEM”), original design manufacturers (“ODM”), contract manufacturers, and design houses. Product revenue consists of sales of mixed-signal integrated circuits into the security surveillance and automotive markets. The Company generally requires advance payments from customers and records these advance payments, or contract liabilities, as customer deposits on its condensed consolidated balance sheet. No stock rotation, price protection or return rights are offered. The Company provides product assurance warranty only and does not offer warranties to be purchased separately. Revenue is recognized when control of the product is transferred to the Company's customers, upon shipment, whereby legal title, risks and rewards of ownership, and physical possession are transferred to the customer.

Use of Management's Estimates

Use of Management’s Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Significant estimates included in the condensed consolidated financial statements include inventory valuation and the valuation allowance for recorded deferred tax assets. These estimates are based upon information available as of the date of the condensed consolidated financial statements. Actual results could differ materially from those estimates.

Certain Significant Risks and Uncertainties

Certain Significant Risks and Uncertainties

The Company operates in a dynamic industry and can be affected by a variety of factors. For example, any of the following areas could have a negative effect on the Company in terms of its future financial position, results of operations or cash flows: the general state of the U.S., China and world economies; the highly cyclical nature of the industries the Company serves; successful and timely completion of product design efforts; trade restrictions by the United States against the Company's customers in China, or potential retaliatory trade actions taken by China; the loss of any of its larger customers; restrictions on the Company's ability to sell to foreign customers due to additional U.S. or new China trade laws, regulations and requirements; disruptions of the supply chain of components needed for its products; fundamental changes in the technology underlying the Company’s products; the hiring, training and retention of key employees; and new product design introductions by competitors.

The Company has been impacted by adverse macroeconomic and geopolitical conditions. These conditions include but are not limited to inflation, foreign currency fluctuations, the COVID-19 pandemic, and the supply chain challenges and disruptions caused by any of these events. Management continues to actively monitor the impact of these conditions on the Company’s financial condition, liquidity, operations, end-customers (including its significant end-customers), distributors, suppliers, industry, and workforce. The extent to which such events impact the Company’s business, prospects and results of operations will depend on future developments, which are highly uncertain. The Company has made estimates of the impact of these events within its financial statements and there may be changes to those estimates in future periods.

Concentration of Customer and Credit Risk

Concentration of Customer and Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, investments, and trade receivables. Risks associated with cash and cash equivalents, and investments are mitigated by banking with, and investing in, creditworthy institutions. The Company generally requires advance payments from customers. The Company also performs credit evaluations of its customers and provides credit to certain customers in the normal course of business. The Company has not incurred bad debt write-offs during any of the periods presented.

For each significant customer, or distributor, and significant end-customer, revenue as a percentage of total revenue was as follows:

	Three Months Ended
	March 31,
	2024			2023
Customer
Customer A		37	%		47	%
Customer B		11	%	*
End-Customer
End-Customer A (1)		16	%		27	%

* Less than 10%

(1)Sales to End-Customer A primarily occurred through Customer A.

Concentration of Supplier Risk

Concentration of Supplier Risk

The Company currently relies on Taiwan Semiconductor Manufacturing Company Limited and United Microelectronics Corporation (formerly Fujitsu Electronics America, Inc.) to produce substantially all of its semiconductors. Also, it relies on Advanced Semiconductor Engineering, Inc., Sigurd Microelectronics Corporation, ATX Semiconductor (Shanghai) Co., Ltd, and Chizhou Hisemi Electronics Technology Co., Ltd to assemble, package and test substantially all of its semiconductors to satisfy substantially all of the Company’s production requirements. The failure of any subcontractor to fulfill the production requirements of the Company on a timely basis would adversely impact future results. Although there are other subcontractors that are capable of providing similar services, an unexpected change in either subcontractor would cause delays in the Company’s products and potentially result in a significant loss of revenue.

Recently Issued Accounting Pronouncements Not Yet Adopted

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure. This guidance improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This guidance becomes effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company plans to adopt this guidance prior to its effective date and has not early adopted such guidance for the period ending March 31, 2024. The impact of this guidance is not expected to have any material impact on the disclosure of the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to income tax disclosure. This guidance modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign operations) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign operations). This guidance also requires entities to disclose their income tax payments to international, federal and state and local jurisdictions. This guidance becomes effective for fiscal years beginning after December 15, 2024. The Company plans to adopt this guidance prior to the effective date and has not early adopted for the period ending March 31, 2024. The impact of this guidance is not expected to have any material impact on the Company’s consolidated financial statements.

Reclassification

Reclassification

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported current/total assets, current/total liabilities, or results of operations.

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Organization and Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Revenue as Percentage of Total Revenue for Each Significant Customer, or Distributor, and Significant End-Customer

For each significant customer, or distributor, and significant end-customer, revenue as a percentage of total revenue was as follows:

	Three Months Ended
	March 31,
	2024			2023
Customer
Customer A		37	%		47	%
Customer B		11	%	*
End-Customer
End-Customer A (1)		16	%		27	%

* Less than 10%

(1)Sales to End-Customer A primarily occurred through Customer A.

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Balance Sheet Components (Tables)

3 Months Ended

Mar. 31, 2024

Balance Sheet Related Disclosures [Abstract]

Components of Inventory

Inventory consists of the following (in thousands):

	March 31,		December 31,
	2024		2023
Work in process	$	6,654	$	4,795
Finished goods		4,417		4,723
Total inventory	$	11,071	$	9,518

Components of Property and Equipment - Net

Property and equipment, net consists of the following (in thousands):

	March 31,			December 31,
	2024			2023
Machinery, Computer equipment and software	$	2,576		$	2,759
Leasehold improvements		94			94
Furniture		38			36
Total property and equipment		2,708			2,889
Less: accumulated depreciation		(2,299	)		(2,367	)
Total property and equipment, net	$	409		$	522

Summary of Changes in Carrying Amount of Goodwill

Changes in the carrying amount of goodwill for the three months ended March 31, 2024 are as follows (in thousands):

	Total
Goodwill at December 31, 2023	$	891
Adjustments		—
Goodwill at March 31, 2024	$	891

Summary of Intangible Assets Except Goodwill

Intangible assets, except goodwill consist of the following (in thousands):

	March 31,
	2024
Acquired intellectual property	$	1,090
Total finite-lived intangible assets		1,090
Less: accumulated amortization		(82	)
Total finite-lived intangible assets, net	$	1,008

Summary of Expected Amortization Expense

As of March 31, 2024, expected amortization expense for the unamortized intangible assets for the next five years and thereafter is as follows (in thousands):

Year Ending December 31,	Amount
Remainder of 2024	$	82
2025		109
2026		109
2027		109
2028		109
Thereafter		490
Total	$	1,008

Components of Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

	March 31,		December 31,
	2024		2023
Payroll-related expenses	$	1,326	$	983
Taxes payable		1,256		468
Accrued inventory		254		401
Engineering service		196		199
Accrued warranty		178		180
Professional fees		108		23
Other		33		68
Total accrued liabilities	$	3,351	$	2,322

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Fair Value Measurements of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Summary of Financial Instruments

Summary of Financial Instruments

The following is a summary of financial instruments (in thousands):

	March 31, 2024
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Values
Available-for-sale securities:
Certificates of deposit	$	3,901	$	—	$	(1	)	$	3,900
Treasury bills		42,322		94		(28	)		42,388
Government agency bonds		512		—		(1	)		511
Corporate bonds		9,446		—		(35	)		9,411
Total available-for-sale securities	$	56,181	$	94	$	(65	)	$	56,210
Reported in:
Cash and cash equivalents								$	3,196
Short-term investments									53,014
Long-term investments									—
Total available-for-sale securities								$	56,210

	December 31, 2023
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Values
Available-for-sale securities:
Certificates of deposit	$	3,633	$	1	$	—		$	3,634
Treasury bills		37,624	76			—			37,700
Government agency bonds		2,600		—		(3	)		2,597
Corporate bonds		11,504		—		(51	)		11,453
Total available-for-sale securities	$	55,361	$	77	$	(54	)	$	55,384
Reported in:
Cash and cash equivalents								$	3,096
Short-term investments									51,788
Long-term investments									500
Total available-for-sale securities								$	55,384

Summary of Contractual Maturities of Available-for-sale Securities

The contractual maturities of available-for-sale securities are presented in the following table (in thousands):

	March 31, 2024				December 31, 2023
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	56,181	$	56,210	$	54,859	$	54,884
Due between one to two years		—		—		502		500
	$	56,181	$	56,210	$	55,361	$	55,384

Schedule of Financial Instruments Measured at Fair Value

Financial assets measured at fair value on a recurring basis were as follows (in thousands):

	Fair Value Measurement at Reporting Date Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total
As of March 31, 2024
Financial assets - available-for-sale securities
Certificates of deposit	$	—		3,900	$	3,900
Treasury bills		—		42,388		42,388
Governmental agency bonds		—		511		511
Corporate bonds		9,411		—		9,411
Total financial assets - available-for-sale securities	$	9,411	$	46,799	$	56,210
As of December 31, 2023
Financial assets - available-for-sale securities
Certificates of deposit	$	—	$	3,634	$	3,634
Treasury bills		2,198		35,502		37,700
Governmental agency bonds		600		1,997		2,597
Corporate bonds		10,953		500		11,453
Total financial assets - available-for-sale securities	$	13,751	$	41,633	$	55,384

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

Schedule of Product Revenue from Customer by Geographic Region

Product revenue from customers is designated based on the geographic region to which the product is delivered. Revenue by geographic region was as follows (in thousands):

	Three Months Ended
	March 31,
	2024		2023
China	$	12,227	$	10,519
Taiwan		2,340		1,771
South Korea		1,161		1,373
Japan		192		381
Other		391		98
Total revenue	$	16,311	$	14,142

Schedule of Revenue by Principal Products Lines

Revenue by principal product lines was as follows (in thousands):

	Three Months Ended
	March 31,
	2024		2023
Automotive	$	12,481	$	8,797
Security surveillance		3,830		5,345
Total revenue	$	16,311	$	14,142

Schedule of Long-lived Assets by Geographic Region

Long-lived assets by geographic region were as follows (in thousands):

	March 31,		December 31,
	2024		2023
Taiwan	$	264	$	308
China		113		176
United States		20		29
South Korea		9		6
Japan		3		3
Total property and equipment - net	$	409	$	522

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Summary of Right of Use Assets and Lease Liabilities Related to Operating Leases

The right-of-use assets and lease liabilities related to operating leases were as follows (in thousands):

			December 31,
	March 31, 2024		2023
Right-of-use assets	$	925	$	1,045
Lease liabilities －Current	$	453	$	497
Lease liabilities － Non-Current		432		531
Total lease liabilities	$	885	$	1,028

Schedule of Lease Costs and Weighted-Average Assumptions Used in Determining its Right-of-Use Assets and Lease Liabilities

The following tables summarize the Company’s lease costs and weighted-average assumptions used in determining its right-of-use assets and lease liabilities (in thousands):

	Three Months Ended			Three Months Ended
	March 31, 2024			March 31, 2023
Operating lease cost	$	200		$	190
Cash paid for operating leases	$	219		$	185
Right-of-use assets obtained in exchange for operating lease liabilities (1)	$	58		$	—
Weighted average remaining term for operating leases		1.85		1.17 years
Weighted average discount rate for operating leases		8.1	%		5.6	%

(1) During the three months ended March 31, 2024, the Company extended the term of its lease in Taiwan. This lease was treated as a modification and accounted for as a non-cash change in existing lease liabilities and the right-of-use assets.

Schedule of Aggregate Future Minimum Lease Payments Under Non-cancelable Operating Leases

As of March 31, 2024, the aggregate future minimum lease payments under non-cancelable operating leases consist of the following (in thousands):

Year Ending December 31,	Amount
2024 (remaining nine months)	$	392
2025		417
2026		157
Total		966
Less effects of discounting		(81	)
Total lease liabilities	$	885

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Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

Schedule of Number of Shares of Common Stock Reserved for Future Issuances

The Company has reserved the following number of shares of common stock for future issuances:

	March 31, 2024
Outstanding stock awards		1,006,331
Shares available for future issuance under the 2017 Stock Incentive Plan		7,065,953
Total common stock reserved for future issuances		8,072,284

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Equity Incentive Plans (Tables)

3 Months Ended

Mar. 31, 2024

Summary of Stock Options Outstanding and Exercisable by Exercise Price

The stock options outstanding and exercisable by exercise price as of March 31, 2024 are as follows:

		Options Outstanding, Vested and Exercisable
Exercise Price		Number Outstanding		Weighted- Average Remaining Contractual Life (Years)		Weighted- Average Exercise Price
$	0.37		10,000		1.3	$	0.37
	0.97		8,000		1.6		0.97
	2.51		46,780		2.4		2.51
	2.89		40,000		2.9		2.89
	2.93		233,734		3.2		2.93
	3.18		79,567		3.3		3.18
			418,081		3.0		2.83

Summary of Restricted Stock Units Activity

The Company’s restricted stock units activity is summarized as follows:

	Units Issued and Outstanding			Weighted-Average Grant Date Fair Value
As of December 31, 2023		620,525		$	7.63
Granted		5,000			9.82
Released, net		(23,768	)		10.35
Canceled		(13,507	)		10.06
As of March 31, 2024		588,250			7.59

2017 Plan

Summary of Stock Award and Option Activity Under Stock Incentive Plan

The Company’s stock award activity under the 2017 Plan is summarized as follows:

	Awards Available for Grant
As of December 31, 2023		7,057,446
Authorized		—
Granted		(5,000	)
Canceled		13,507
As of March 31, 2024		7,065,953

The Company’s stock option activity under the 2017 Plan is summarized as follows:

	Options Issued and Outstanding			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (in thousands)
As of December 31, 2023		431,081		$	2.81		3.3	$	3,305
Granted		—			—
Exercised		(13,000	)		2.48
Canceled		—
As of March 31, 2024		418,081			2.83		3.0		2,490
Options vested and exercisable as of March 31, 2024		418,081			2.83		3.0		2,490

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Distribution of Stock-Based Compensation Expense

The following table summarizes the distribution of stock-based compensation expense (in thousands):

	Three Months Ended
	March 31,
	2024		2023
Cost of revenue	$	30	$	36
Research and development		150		119
Selling, general and administrative		219		207
Total	$	399	$	362

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Net Income Per Share (Tables)

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

Computation of Basic and Diluted Net Income Per Share

The following table presents the calculation of basic and diluted net income per share (amounts in thousands, except share and per share data):

	Three Months Ended
	March 31,
	2024		2023
Numerator:
Basic and Diluted:
Net income	$	4,380	$	3,376
Denominator:
Basic shares:
Weighted-average shares outstanding used in computing basic    net income per share		18,431,048		18,231,078
Diluted shares:
Effect of potentially dilutive securities:
Stock options and restricted stock units		496,179		366,212
Weighted-average shares used in computing diluted net    income per share		18,927,227		18,597,290
Net income per share:
Basic	$	0.24	$	0.19
Diluted	$	0.23	$	0.18

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Provision for Income Taxes (Tables)

3 Months Ended

Mar. 31, 2024

Income Tax Disclosure [Abstract]

Schedule of Components of Income Before Income Taxes

The components of income before income taxes were as follows (in thousands):

	Three Months Ended
	March 31,
	2024		2023
Domestic	$	4,903	$	3,722
Foreign		62		60
Income before income taxes	$	4,965	$	3,782

Schedule of Components of Provision for Income Taxes

The components of the provision for income taxes were as follows (in thousands):

	Three Months Ended
	March 31,
	2024		2023
United States	$	577	$	400
Foreign		8		6
Provision for income taxes	$	585	$	406

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Organization and Summary of Significant Accounting Policies - Additional Information (Details)	3 Months Ended
	Mar. 31, 2024
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Company Incorporation place	DE
California
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Company original incorporation date of incorporation	2012-04
Company Incorporation place	CA
Delaware
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Company Incorporation place	DE
Company reincorporation incorporation date of incorporation	2017-07

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Organization and Summary of Significant Accounting Policies - Summary of Revenue as Percentage of Total Revenue for Each Significant Customer, or Distributor, and Significant End-Customer (Details) - Sales Revenue, Net - Customer Concentration Risk	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Customer A
Product Information [Line Items]
Concentration risk, percentage	37.00%	47.00%
Customer B
Product Information [Line Items]
Concentration risk, percentage	11.00%
End-Customer A
Product Information [Line Items]
Concentration risk, percentage	16.00%	27.00%

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Balance Sheet Components - Components of Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Balance Sheet Related Disclosures [Abstract]
Work in process	$ 6,654	$ 4,795
Finished goods	4,417	4,723
Total inventory	$ 11,071	$ 9,518

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Balance Sheet Components - Components of Property and Equipment - Net (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 2,708	$ 2,889
Less: accumulated depreciation	(2,299)	(2,367)
Total property and equipment, net	409	522
Machinery, Computer Equipment and Software
Property Plant And Equipment [Line Items]
Property and equipment, gross	2,576	2,759
Leasehold Improvements
Property Plant And Equipment [Line Items]
Property and equipment, gross	94	94
Furniture
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 38	$ 36

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Balance Sheet Components - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Balance Sheet Related Disclosures [Abstract]
Depreciation	$ 100,000	$ 100,000
Goodwill	891,000		$ 891,000
Payments received in advance of shipments	846,000		$ 1,448,000
Company recognized revenue	1,400,000
Amortization expenses of intangible assets	$ 27,000,000	$ 0
Estimated amortization period	10 years

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Balance Sheet Components - Summary of Changes in Carrying Amount of Goodwill (Details) $ in Thousands	Mar. 31, 2024 USD ($)
Goodwill [Roll Forward]
Goodwill beginning balance	$ 891
Goodwill ending balance	$ 891

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Balance Sheet Components - Summary of Intangible Assets Except Goodwill (Details) $ in Thousands	Mar. 31, 2024 USD ($)
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Acquired intellectual property	$ 1,090
Total finite-lived intangible assets	1,090
Less: accumulated amortization	(82)
Total finite-lived intangible assets, net	$ 1,008

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Balance Sheet Components - Summary of Expected Amortization Expense (Details) $ in Thousands	Mar. 31, 2024 USD ($)
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Remainder of 2024	$ 82
2025	109
2026	109
2027	109
2028	109
Thereafter	490
Total finite-lived intangible assets, net	$ 1,008

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Balance Sheet Components - Components of Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Balance Sheet Related Disclosures [Abstract]
Payroll-related expenses	$ 1,326	$ 983
Taxes payable	1,256	468
Accrued inventory	254	401
Engineering service	196	199
Accrued warranty	178	180
Professional fees	108	23
Other	33	68
Total accrued liabilities	$ 3,351	$ 2,322

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Fair Value Measurements of Financial Instruments - Summary of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	$ 56,181	$ 55,361
Gross Unrealized Gain		77
Gross Unrealized Loss	(65)	(54)
Estimated Fair Values	56,210	55,384
Certificates of Deposit
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	3,901	3,633
Gross Unrealized Gain		1
Gross Unrealized Loss	(1)
Estimated Fair Values	3,900	3,634
Treasury bills
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	42,322	37,624
Gross Unrealized Gain	94	76
Gross Unrealized Loss	(28)
Estimated Fair Values	42,388	37,700
Government Agency Bonds
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	512	2,600
Gross Unrealized Loss	(1)	(3)
Estimated Fair Values	511	2,597
Corporate Bonds
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	9,446	11,504
Gross Unrealized Loss	(35)	(51)
Estimated Fair Values	9,411	11,453
Cash and Cash Equivalents
Schedule Of Available For Sale Securities [Line Items]
Estimated Fair Values	3,196	3,096
Short-term Investments
Schedule Of Available For Sale Securities [Line Items]
Estimated Fair Values	$ 53,014	51,788
Long-term investments
Schedule Of Available For Sale Securities [Line Items]
Estimated Fair Values		$ 500

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Fair Value Measurements of Financial Instruments - Summary of Contractual Maturities of Available-for-sale Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Debt Securities, Available-for-Sale [Abstract]
Amortized Cost, Due in one year or less	$ 56,181	$ 54,859
Amortized Cost, Due between one to two years		502
Amortized Cost	56,181	55,361
Estimated Fair Value, Due in one year or less	56,210	54,884
Estimated Fair Value, Due between one to two years		500
Estimated Fair Value	$ 56,210	$ 55,384

XML

Fair Value Measurements of Financial Instruments - Additional Information (Details)	3 Months Ended
	Mar. 31, 2024 USD ($) Investment	Mar. 31, 2023 USD ($)
Debt Securities, Available-for-Sale [Abstract]
Number of investments in unrealized loss positions | Investment	68
Number of investment in unrealized loss positions less than twelve months | Investment	53
Fair value of investments	$ 47,600,000
Unrealized losses on investments	100,000
Other-than-temporary impairments associated with investments	0
Sales of available-for-sale securities	$ 0	$ 0

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Fair Value Measurements of Financial Instruments - Schedule of Financial Assets Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	$ 56,210	$ 55,384
Certificates of Deposit
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	3,900	3,634
Treasury bills
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	42,388	37,700
Government Agency Bonds
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	511	2,597
Corporate Bonds
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	9,411	11,453
Fair Value Measurements Recurring
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	56,210	55,384
Fair Value Measurements Recurring | Certificates of Deposit
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	3,900	3,634
Fair Value Measurements Recurring | Treasury bills
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	42,388	37,700
Fair Value Measurements Recurring | Government Agency Bonds
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	511	2,597
Fair Value Measurements Recurring | Corporate Bonds
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	9,411	11,453
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1)
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	9,411	13,751
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Treasury bills
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities		2,198
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Government Agency Bonds
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities		600
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate Bonds
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	9,411	10,953
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2)
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	46,799	41,633
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | Certificates of Deposit
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	3,900	3,634
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | Treasury bills
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	42,388	35,502
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | Government Agency Bonds
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	$ 511	1,997
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | Corporate Bonds
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities		$ 500

XML

Segment Information - Additional Information (Details)	3 Months Ended
	Mar. 31, 2024 Segment
Segment Reporting [Abstract]
Number of reportable segments	1
Number of operating segments	1

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Segment Information - Schedule of Product Revenue from Customers by Geographic Region (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Revenues From External Customers And Long Lived Assets [Line Items]
Revenue	$ 16,311	$ 14,142
China
Revenues From External Customers And Long Lived Assets [Line Items]
Revenue	12,227	10,519
Taiwan
Revenues From External Customers And Long Lived Assets [Line Items]
Revenue	2,340	1,771
South Korea
Revenues From External Customers And Long Lived Assets [Line Items]
Revenue	1,161	1,373
Japan
Revenues From External Customers And Long Lived Assets [Line Items]
Revenue	192	381
Other
Revenues From External Customers And Long Lived Assets [Line Items]
Revenue	$ 391	$ 98

XML

Segment Information - Schedule of Revenue by Principal Product Lines (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Entity Wide Information Revenue From External Customer [Line Items]
Revenue	$ 16,311	$ 14,142
Automotive
Entity Wide Information Revenue From External Customer [Line Items]
Revenue	12,481	8,797
Security Surveillance
Entity Wide Information Revenue From External Customer [Line Items]
Revenue	$ 3,830	$ 5,345

XML

Segment Information - Schedule of Long-Lived Assets by Geographic Region (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Revenues From External Customers And Long Lived Assets [Line Items]
Total property and equipment - net	$ 409	$ 522
Taiwan
Revenues From External Customers And Long Lived Assets [Line Items]
Total property and equipment - net	264	308
China
Revenues From External Customers And Long Lived Assets [Line Items]
Total property and equipment - net	113	176
United States
Revenues From External Customers And Long Lived Assets [Line Items]
Total property and equipment - net	20	29
South Korea
Revenues From External Customers And Long Lived Assets [Line Items]
Total property and equipment - net	9	6
Japan
Revenues From External Customers And Long Lived Assets [Line Items]
Total property and equipment - net	$ 3	$ 3

XML

Commitments and Contingencies - Additional Information (Details)	3 Months Ended
	Mar. 31, 2024 USD ($) Litigation	Mar. 31, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Non-cancelable operating lease agreements, expiration description	non-cancelable lease agreements expiring through fiscal year 2024.
Rent expense under operating leases	$ 200,000	$ 200,000
Rent expense recognized from short-term leases	6,000	$ 6,000
Future minimum payments under purchase commitments for the year ended December 31, 2024	500,000
Future minimum payments under purchase commitments for the year ended December 31, 2025	700,000
Future minimum payments under purchase commitments for the year ended December 31, 2026	$ 300,000
Number of litigation | Litigation	0

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Commitments and Contingencies - Summary of Right of Use Assets and Lease Liabilities Related to Operating Leases (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Assets and Liabilities, Lessee [Abstract]
Right-of-use assets	$ 925	$ 1,045
Lease liabilities － Current	453	497
Lease liabilities － Non-Current	$ 432	$ 531
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other liabilities	Other liabilities
Total lease liabilities	$ 885	$ 1,028

XML

Commitments and Contingencies - Schedule of Lease Costs and Weighted-Average Assumptions Used in Determining its Right-of-Use Assets and Lease Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Operating lease cost	$ 200	$ 190
Cash paid for operating leases	219	$ 185
Right-of-use assets obtained in exchange for operating lease liabilities	$ 58
Weighted average remaining term for operating leases	1 year 10 months 6 days	1 year 2 months 1 day
Weighted average discount rate for operating leases	8.10%	5.60%

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Commitments and Contingencies - Schedule of Aggregate Future Minimum Lease Payments Under Non-cancelable Operating Leases (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
2024 (remaining three months)	$ 392
2025	417
2026	157
Total	966
Less effects of discounting	(81)
Total lease liabilities	$ 885	$ 1,028

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Stockholders' Equity - Additional Information (Details) $ / shares in Units, $ in Thousands			3 Months Ended
	Dec. 15, 2023 USD ($) Installment $ / shares	Dec. 16, 2022 USD ($) Installment $ / shares	Mar. 31, 2024 USD ($) $ / shares shares	Mar. 31, 2023 USD ($)	Dec. 31, 2023 $ / shares shares
Class of Stock [Line Items]
Preferred stock, shares authorized			5,000,000		5,000,000
Preferred stock, par value | $ / shares			$ 0.0001		$ 0.0001
Preferred stock, shares issued			0		0
Preferred stock, shares outstanding			0		0
Common stock shares authorized			75,000,000		75,000,000
Common stock par value | $ / shares			$ 0.0001		$ 0.0001
Common stock shares issued			18,432,450		18,395,682
Common stock shares outstanding			18,432,450		18,395,682
Dividends payable, date declared		Dec. 16, 2022	Dec. 15, 2023
Cash dividends declared per share | $ / shares	$ 0.5	$ 0.5
Number of dividend payable installment | Installment	2	2
Dividends payable, amount per share | $ / shares	$ 0.25	$ 0.25
Dividend accrued | $	$ 4,600
Dividend paid | $		$ 9,100	$ 4,603	$ 4,555
Dividends payable, date of record			Jan. 31, 2024
First Installment of Dividend
Class of Stock [Line Items]
Dividends payable, date of record			Jan. 31, 2023
Second Installment of Dividend
Class of Stock [Line Items]
Dividends payable, date of record			Jun. 30, 2023

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Stockholders' Equity - Schedule of Number of Shares of Common Stock Reserved for Future Issuances (Details)	Mar. 31, 2024 shares
Class Of Stock [Line Items]
Common stock reserved for future issuances	8,072,284
Outstanding Stock Awards
Class Of Stock [Line Items]
Common stock reserved for future issuances	1,006,331
Shares Available for Future Issuance under 2017 Stock Incentive Plan
Class Of Stock [Line Items]
Common stock reserved for future issuances	7,065,953

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Equity Incentive Plans - Additional Information (Details) $ in Millions		1 Months Ended		3 Months Ended
	Jan. 01, 2024	Sep. 30, 2017 shares	Apr. 30, 2012	Mar. 31, 2024 USD ($) shares	Mar. 31, 2023 USD ($)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, additional awards				0
Common stock reserved for future issuances				8,072,284
Share-based compensation arrangement by share-based payment award, aggregate intrinsic value of options exercised | $				$ 0.2	$ 0.1
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, options vesting period				5 years
Share-based compensation arrangement by share-based payment award, stock awards conversion ratio				1
2012 Stock Option Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, options vesting term of award				The 2012 Plan provides for the granting of stock-based awards to employees, directors, and consultants under terms and provisions established by the Company’s board of directors. Under the terms of the 2012 Plan, options may be granted at an exercise price not less than fair market value. For employees holding more than 10% of the voting rights of all classes of stock, the exercise prices for incentive and non-statutory stock options must be at least 110% of the fair market value of the common stock on the grant date, as determined by the Company’s board of directors. The terms of options granted under the 2012 Plan may not exceed ten years.
Share-based compensation arrangement by share-based payment award, additional awards		0
Common stock reserved for future issuances		0
2012 Stock Option Plan | Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, percentage of voting rights of all classes of stock to be owned by employees to determine stock options exercise price on grant date			10.00%
Share-based compensation arrangement by share-based payment award, exercise prices percentage of fair market value of common stock on grant date			110.00%
2012 Stock Option Plan | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, Options exercisable period			10 years
Two Thousand Seventeen Stock Option Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, options vesting term of award				Options granted generally vest over a five-year period and generally are exercisable for up to 10 years
Share based compensation arrangement by share based payment award number of shares authorized increment description				The number of shares available for issuance under the 2017 Plan is automatically increased on the first day of each fiscal year beginning on January 1, 2018 and ending on (and including) January 1, 2027, in an amount equal to the lesser of (1) 4% of the outstanding shares of the Company’s common stock on the last day of the immediately preceding fiscal year, or (2) another amount determined by the Company’s board of directors.
Automatic increase in number of shares authorized under stock option plan, start date				Jan. 01, 2018
Automatic increase in number of shares authorized under stock option plan, end date				Jan. 01, 2027
Share-based compensation arrangement by share-based payment award, percentage of annual increase in number of shares authorized of outstanding shares of common stock	4.00%
Share-based compensation arrangement by share-based payment award, options vesting period				5 years
Two Thousand Seventeen Stock Option Plan | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, Options exercisable period				10 years
Share-based compensation arrangement by share-based payment award, percentage of annual increase in number of shares authorized of outstanding shares of common stock		4.00%

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Equity Incentive Plans - Summary of Stock Awards and Option Activity Under Stock Incentive Plan (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]
Awards Available for Grant, Beginning balance	7,057,446
Awards Available for Grant, Authorized	0
Awards Available for Grant, Granted	(5,000)
Awards Available for Grant, Canceled	13,507
Awards Available for Grant, Ending balance	7,065,953	7,057,446
Options Issued and Outstanding, Beginning balance	431,081
Options Issued and Outstanding, Exercised	(13,000)
Options Issued and Outstanding, Ending balance	418,081	431,081
Options Issued and Outstanding, Options vested and exercisable	418,081
Weighted Average Exercise Price, Beginning balance	$ 2.81
Weighted Average Exercise Price, Exercised	2.48
Weighted Average Exercise Price, Ending balance	2.83	$ 2.81
Weighted Average Exercise Price, Options vested and exercisable	$ 2.83
Weighted-Average Remaining Contractual Term	3 years	3 years 3 months 18 days
Weighted-Average Remaining Contractual Term, Options vested and exercisable	3 years
Aggregate Intrinsic Value	$ 2,490	$ 3,305
Aggregate Intrinsic Value, Options vested and exercisable	$ 2,490

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Equity Incentive Plans - Summary of Stock Options Outstanding and Exercisable by Exercise Price (Details)	3 Months Ended
	Mar. 31, 2024 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options Outstanding, Vested and Exercisable, Number | shares	418,081
Options Outstanding, Vested and Exercisable, Weighted-Average Remaining Contractual Life (Years)	3 years
Options Outstanding, Vested and Exercisable, Weighted-Average Exercise Price	$ 2.83
Exercise Price 0.37
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Exercise Price	$ 0.37
Options Outstanding, Vested and Exercisable, Number | shares	10,000
Options Outstanding, Vested and Exercisable, Weighted-Average Remaining Contractual Life (Years)	1 year 3 months 18 days
Options Outstanding, Vested and Exercisable, Weighted-Average Exercise Price	$ 0.37
Exercise Price 0.97
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Exercise Price	$ 0.97
Options Outstanding, Vested and Exercisable, Number | shares	8,000
Options Outstanding, Vested and Exercisable, Weighted-Average Remaining Contractual Life (Years)	1 year 7 months 6 days
Options Outstanding, Vested and Exercisable, Weighted-Average Exercise Price	$ 0.97
Exercise Price 2.51
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Exercise Price	$ 2.51
Options Outstanding, Vested and Exercisable, Number | shares	46,780
Options Outstanding, Vested and Exercisable, Weighted-Average Remaining Contractual Life (Years)	2 years 4 months 24 days
Options Outstanding, Vested and Exercisable, Weighted-Average Exercise Price	$ 2.51
Exercise Price 2.89
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Exercise Price	$ 2.89
Options Outstanding, Vested and Exercisable, Number | shares	40,000
Options Outstanding, Vested and Exercisable, Weighted-Average Remaining Contractual Life (Years)	2 years 10 months 24 days
Options Outstanding, Vested and Exercisable, Weighted-Average Exercise Price	$ 2.89
Exercise Price 2.93
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Exercise Price	$ 2.93
Options Outstanding, Vested and Exercisable, Number | shares	233,734
Options Outstanding, Vested and Exercisable, Weighted-Average Remaining Contractual Life (Years)	3 years 2 months 12 days
Options Outstanding, Vested and Exercisable, Weighted-Average Exercise Price	$ 2.93
Exercise Price 3.18
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Exercise Price	$ 3.18
Options Outstanding, Vested and Exercisable, Number | shares	79,567
Options Outstanding, Vested and Exercisable, Weighted-Average Remaining Contractual Life (Years)	3 years 3 months 18 days
Options Outstanding, Vested and Exercisable, Weighted-Average Exercise Price	$ 3.18

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Equity Incentive Plans - Summary of Restricted Stock Units Activity (Details) - Restricted Stock Units	3 Months Ended
	Mar. 31, 2024 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Units Issued and Outstanding, Beginning balance | shares	620,525
Units Issued and Outstanding, Granted | shares	5,000
Units Issued and Outstanding, Released, net | shares	(23,768)
Units Issued and Outstanding, Canceled | shares	(13,507)
Units Issued and Outstanding, Ending balance | shares	588,250
Weighted-Average Grant Date Fair Value, Beginning balance | $ / shares	$ 7.63
Weighted-Average Grant Date Fair Value, Granted | $ / shares	9.82
Weighted-Average Grant Date Fair Value, Released, net | $ / shares	10.35
Weighted-Average Grant Date Fair Value, Canceled | $ / shares	10.06
Weighted-Average Grant Date Fair Value, Ending balance | $ / shares	$ 7.59

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Stock-Based Compensation - Distribution of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Share Based Compensation Expense [Line Items]
Stock-based compensation	$ 399	$ 362
Cost of Revenue
Share Based Compensation Expense [Line Items]
Stock-based compensation	30	36
Research and Development
Share Based Compensation Expense [Line Items]
Stock-based compensation	150	119
Selling, General and Administrative
Share Based Compensation Expense [Line Items]
Stock-based compensation	$ 219	$ 207

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Net Income Per Share - Computation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Basic and diluted:
Net Income (Loss)	$ 4,380	$ 3,376
Denominator:
Weighted-average shares outstanding used in computing basic net income per share	18,431,048	18,231,078
Effect of potentially dilutive securities:
Stock options and restricted stock units	496,179	366,212
Weighted-average shares used in computing diluted net income per share	18,927,227	18,597,290
Net income per share:
Basic	$ 0.24	$ 0.19
Diluted	$ 0.23	$ 0.18

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Net Income Per Share - Additional Information (Details) - shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earnings per share amount	73,000	245,000

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Provision for Income Taxes - Schedule of Components of Income Before Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Domestic	$ 4,903	$ 3,722
Foreign	62	60
Income before income taxes	$ 4,965	$ 3,782

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Provision for Income Taxes - Schedule of Components of Provision for Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Income Tax Disclosure [Abstract]
United States	$ 577	$ 400
Foreign	8	6
Provision for income taxes	$ 585	$ 406

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Provision for Income Taxes - Additional Information (Details) $ in Millions	3 Months Ended
	Mar. 31, 2024 USD ($)
Income Tax [Line Items]
Unrecognized tax benefits	$ 0.4
Unrecognized tax benefits netted against deferred tax assets valuation allowance	$ 0.3
Description of uncertain income tax position	The Company applies the provisions of the applicable accounting guidance regarding accounting for uncertainty in income taxes, which require application of a more-likely-than-not threshold to the recognition and derecognition of uncertain tax positions. If the recognition threshold is met, the applicable accounting guidance permits the recognition of a tax benefit measured at the largest amount of such tax benefit that, in the Company’s judgment, is more than fifty percent likely to be realized upon settlement.
Unrecognized tax benefits against effective tax rate	$ 0.1
Earliest Tax Year | State
Income Tax [Line Items]
Examination by tax authorities	2012
Latest Tax Year | State
Income Tax [Line Items]
Examination by tax authorities	2022