8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________

Form 8-K
______________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event Reported): November 4, 2016  

MOSYS, INC.
(Exact Name of Registrant as Specified in Charter)

000-32929
(Commission File Number)

Delaware	77-0291941
(State or Other Jurisdiction of Incorporation)	(I.R.S. Employer Identification Number)

3301 Olcott Street
Santa Clara, California 95054

(Address of principal executive offices, with zip code)

(408) 418-7500
(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
	[ ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
	[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
	[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On November 4, 2016, MoSys, Inc., or the Company, issued a press release announcing its financial results for the three and nine months ended September 30, 2016.  A copy of this press release is furnished as Exhibit 99.1 to this report. The press release should be read in conjunction with the statements regarding forward-looking statements, which are included in the text of the release. 

In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), management also presents information regarding the Company’s performance over comparable periods based on gross margin, operating expenses (research and development and sales, general and administrative), operating loss, net loss and net loss per share, exclusive of stock-based compensation, amortization of intangibles and restructuring charges related to a reduction in force in the United States and the cessation of operations at its Indian subsidiary. Because management discloses financial measures calculated without taking into account these items, these financial measures are characterized as "non-GAAP financial measures" under Securities and Exchange Commission rules.  

Stock-based compensation charges represent non-cash charges related to equity awards granted by the Company. Although these are recurring charges to the Company’s operations, management believes the measurement of these amounts can vary considerably from period to period and depend substantially on factors that are not a direct consequence of operating performance that is within management’s control.  Thus, management believes that excluding these charges facilitates comparisons of the Company’s operational performance in different periods, as well as with similarly determined non-GAAP financial measures of comparable companies.  

Amortization of intangible assets results from the value recorded for a license the Company retained to patents sold in 2011.  The amortization does not represent operating expenses ordinarily incurred by the Company with respect to its primary business activities of selling integrated circuits.  Thus, these charges are excluded from the Company’s non-GAAP financial measures to provide another basis for evaluating and comparing the Company’s performance for the three and nine months ended September 30, 2016. 

In the first quarter of 2016, the Company effected a reduction in workforce and associated operating expenses, net loss and cash burn and to realign resources, as the Company has substantially concluded development of new products, including its third generation Bandwidth Engine IC product family, and has brought these products to market in 2016. Substantially all of these charges were paid in the first quarter of 2016. 

Management and the Company’s board of directors will continue to analyze the historical consolidated results of operations and comprehensive loss (revenue, gross margin, research and development expenses, selling, general and administrative expenses, operating loss, net loss and net loss per share), excluding stock-based compensation, charges for amortization of intangibles and restructuring charges described above, to assess the business and compare operating results to the Company's performance objectives. For example, the Company's budgeting and planning process utilizes these non-GAAP financial measures, along with other types of financial information. 

The Company discloses these non-GAAP financial measures to the public as an additional means by which investors can assess the Company's performance and to identify the Company's operating results for investors on the same basis applied by management. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The Company has furnished reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures in the press release furnished as Exhibit 99.1. 

Moreover, although these non-GAAP financial measures adjust expense, they should not be viewed as a pro-forma presentation reflecting the elimination of the underlying share-based compensation programs, which are an important element of the Company's compensation structure. GAAP requires that all forms of share-based payments should be valued and included, as appropriate, in results of operations. Management believes these expenses are a material part of the Company's operating results.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release by MoSys, Inc. dated November 4, 2016.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MOSYS, INC.
Date: November 4, 2016	By:	/s/ James W. Sullivan
		Name: James W. Sullivan
		Title: Vice President of Finance and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release by MoSys, Inc. dated November 4, 2016.

EX-99.1

EXHIBIT 99.1

MoSys, Inc. Reports Third Quarter 2016 Financial Results

SANTA CLARA, Calif., Nov. 04, 2016 (GLOBE NEWSWIRE) -- MoSys, Inc. (NASDAQ:MOSY), a leader in semiconductor solutions that enable fast, intelligent data access for Cloud, network, and communications systems, today reported financial results for the third quarter ended September 30, 2016.

Third Quarter and Recent Highlights

• Achieved another quarter of double-digit design wins for Bandwidth Engine® and LineSpeed™ products;
• Shipped production and prototype quantities of Bandwidth Engine ICs to an expanding customer base; and
• Accelerated Programmable Search Engine IC program to respond to initial data-center customer demand.

“During the quarter, we secured double-digit design wins, including Bandwidth Engine 2 wins for IP security appliance and video applications and multiple LineSpeed wins with new customers for networking, monitoring, and module applications,” commented Len Perham, MoSys’ president and chief executive officer. “We are also beginning to ship initial production quantities of Bandwidth Engine 2 to our lead IP security appliance customer. Furthermore, I am particularly encouraged by the interest in our Programmable Search Engine for applications in the expanding data-center market segment.

“Although we shipped production and pre-production quantities of ICs to multiple customers during the quarter, customer production schedules have not yet ramped to volumes originally anticipated by this point in the year. However, I continue to remain confident that a growth trend will become evident over the coming quarters as more of our designs from 2014 and 2015 commence production.”

Total net revenue for the third quarter of 2016 was $1.6 million, consistent with the second quarter of 2016 and compared with $1.0 million in the third quarter of 2015. Product revenue in the third quarter of 2016 was $1.2 million, compared with $1.3 million in the previous quarter and $0.6 million in the year-ago period. Royalty and other revenue for the third quarter of 2016 was $0.4 million, compared with $0.3 million in the previous quarter and $0.5 million in the year ago period.

Gross margin for the third quarter of 2016 was 58 percent, compared with 41 percent in the previous quarter and 22 percent for the third quarter of 2015.

Total operating expenses on a GAAP basis for the third quarter of 2016 were $5.4 million, compared with $6.5 million in the second quarter of 2016 and $10.3 million in the year-ago period. Third quarter 2016 operating expenses included stock-based compensation and amortization of intangible asset expenses of $0.7 million.

GAAP net loss for the third quarter of 2016 was $4.7 million, or ($0.07) per share, including stock-based compensation and amortization expenses. This compares with a net loss of $6.0 million, or ($0.09) per share, in the previous quarter and a net loss of $10.1 million, or ($0.15) per share, for the third quarter of 2015. Non-GAAP net loss for the third quarter of 2016 was $4.0 million, or ($0.06) per share, which excludes amortization of intangible assets and stock-based compensation expense. Earnings per share for the third quarter of 2016 was computed using approximately 66.1 million weighted shares on a GAAP and non-GAAP basis. A reconciliation of GAAP results to non-GAAP results is provided in the financial statement tables following the text of this press release.

Financial Results Webcast / Conference Call
MoSys will host a conference call and webcast with investors today at 5:30 a.m. Pacific Time (8:30 a.m. Eastern Time) to discuss the third quarter 2016 financial results. Investors and other interested parties may access the call by dialing 1-855-779-0042 in the U.S. (or +1-631-485-4856 outside of the U.S.) and entering the pass code 96101270 at least 10 minutes prior to the start of the call. In addition, an audio webcast will be available through the MoSys Web site at http://www.mosys.com. A telephone replay will be available for two business days following the call at 1-855-859-2056 in the U.S. (or +1-404-537-3406 outside of the U.S.), pass code of 96101270.

Use of Non-GAAP Financial Measures
To supplement MoSys’ consolidated financial statements presented in accordance with GAAP, MoSys uses non-GAAP financial measures that exclude from the statement of operations the effects of stock-based compensation, amortization of recorded intangible assets and restructuring charges. MoSys’ management believes that the presentation of these non-GAAP financial measures is useful to investors and other interested persons because they are one of the primary indicators that MoSys’ management uses for planning and forecasting future performance. MoSys’ management believes that the presentation of non-GAAP financial measures that exclude these items is useful to investors because management does not consider these charges part of the day-to-day business or reflective of the core operational activities of the Company that are within the control of management or that would be used to evaluate management’s operating performance.

Investors are encouraged to review the reconciliation of these non-GAAP financial measures to the comparable GAAP results, which is provided in a table below the Condensed Consolidated Statements of Operations. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. For additional information regarding these non-GAAP financial measures, and management’s explanation of why it considers such measures to be useful, refer to the Form 8-K dated November 4, 2016, that the Company filed with the Securities and Exchange Commission.

Forward-Looking Statements
This press release may contain forward-looking statements about the Company, including, without limitation, anticipated benefits and performance expected from our IC products and the Company’s future markets and future business prospects. Forward-looking statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties. Actual results and trends may differ materially from historical results or those projected in any such forward-looking statements depending on a variety of factors. These factors include, but are not limited, to the following:

• achieving additional IC design wins;
• commencing volume shipments of Bandwidth Engine ICs;
• the timing of customer orders and product shipments;
• our ability to enhance our existing proprietary technologies and develop new technologies;
• achieving necessary acceptance and adoption of our IC architecture and interface protocols by potential customers and their suppliers;
• difficulties and delays in the development, production, testing and marketing of our ICs;
• reliance on our manufacturing partners to assist successfully with the fabrication of our ICs;
• availability of quantities of ICs supplied by our manufacturing partners at a competitive cost;
• our lack of recent experience as a fabless semiconductor company making and selling proprietary ICs;
• level of intellectual property protection provided by our patents, the expenses and other consequences of litigation, including intellectual property infringement litigation, to which we may be or may become a party from time to time;
• vigor and growth of markets served by our customers and our operations; and

other risks identified in the Company’s most recent report on Form 10-K filed with the Securities and Exchange Commission, as well as other reports that MoSys files from time to time with the Securities and Exchange Commission. MoSys undertakes no obligation to update publicly any forward-looking statement for any reason, except as required by law, even as new information becomes available or other events occur in the future.

About MoSys, Inc.
MoSys, Inc. (NASDAQ:MOSY) is a fabless semiconductor company enabling leading equipment manufacturers of Cloud, networking, communications, and data center systems to address the continual increase in Internet users, data and services. The company's solutions deliver data path connectivity, speed and intelligence while eliminating data access bottlenecks on line cards and systems scaling from 100G to multi-terabits per second. Engineered and built for high-reliability carrier and enterprise applications, MoSys' Bandwidth Engine®, Programmable Search Engine, and LineSpeed™ IC product families are based on the company's patented high-performance, high-density intelligent access and high-speed serial interface technology, and utilize the company's highly efficient GigaChip® Interface. MoSys is headquartered in Santa Clara, California. More information is available at www.mosys.com.

Bandwidth Engine, GigaChip, and MoSys are registered trademarks of MoSys, Inc. in the US and/or other countries. LineSpeed and the MoSys logo are trademarks of MoSys, Inc. All other marks mentioned herein are the property of their respective owners.

(Financial Tables to Follow) 

MOSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts; unaudited)
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
		2016			2015			2016			2015
Net Revenue
Product	$	1,205		$	565		$	3,612		$	1,288
Royalty and other		368			457			1,045			1,504
Total net revenue		1,573			1,022			4,657			2,792
Cost of Net Revenue		658			793			2,484			1,593
Gross Profit		915			229			2,173			1,199
Operating Expenses
Research and development		3,927			8,793			14,043			21,475
Selling, general and administrative		1,450			1,547			4,543			4,711
Restructuring charges		-			-			676			-
Total operating expenses		5,377			10,340			19,262			26,186
Loss from operations		(4,462	)		(10,111	)		(17,089	)		(24,987	)
Other income (expense), net		(219	)		19			(421	)		71
Loss before income taxes		(4,681	)		(10,092	)		(17,510	)		(24,916	)
Income tax provision		20			13			60			60
Net Loss	$	(4,701	)	$	(10,105	)	$	(17,570	)	$	(24,976	)
Net loss per share
Basic and diluted	$	(0.07	)	$	(0.15	)	$	(0.27	)	$	(0.41	)
Shares used in computing net loss per share
Basic and diluted		66,091			65,317			65,918			61,486
MOSYS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
	September 30,			December 31,
		2016			2015
Assets
Current assets:
Cash, cash equivalents and investments	$	12,758		$	20,238
Accounts receivable, net		626			729
Inventories		1,424			1,597
Prepaid expenses and other		564			701
Total current assets		15,372			23,265
Property and equipment, net		1,492			1,630
Goodwill		23,134			23,134
Other assets		374			663
Total assets	$	40,372		$	48,692
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	261		$	940
Accrued expenses and other		2,190			2,664
Total current liabilities		2,451			3,604
Notes payable		8,238			-
Other long-term liabilities		240			247
Total liabilities		10,929			3,851
Stockholders' equity		29,443			44,841
Total liabilities and stockholders’ equity	$	40,372		$	48,692
MOSYS, INC.
Reconciliation of GAAP to Non-GAAP Net Loss and Net Loss Per Share
(In thousands, except per share amounts; unaudited)
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
		2016			2015			2016			2015
GAAP net loss	$	(4,701	)	$	(10,105	)	$	(17,570	)	$	(24,976	)
Stock-based compensation expense
-Research and development		458			590			1,278			2,151
-Selling, general and administrative		186			230			515			713
Total stock-based compensation expense		644			820			1,793			2,864
Restructuring charges		-			-			676			-
Amortization of intangible assets		27			28			83			293
Non-GAAP net loss	$	(4,030	)	$	(9,257	)	$	(15,018	)	$	(21,819	)
GAAP net loss per share	$	(0.07	)	$	(0.15	)	$	(0.27	)	$	(0.41	)
Reconciling items
-Stock-based compensation expense		0.01			0.01			0.03			0.05
-Restructuring charges		-			-			0.01			-
-Amortization of intangible assets		-			-			-			0.01
Non-GAAP net loss per share: basic and diluted	$	(0.06	)	$	(0.14	)	$	(0.23	)	$	(0.35	)
Shares used in computing non-GAAP net loss per share
Basic and diluted		66,091			65,317			65,918			61,486

Contacts:
Jim Sullivan, CFO
MoSys, Inc.
+1 (408) 418-7500
jsullivan@mosys.com

Beverly Twing, Sr. Acct. Manager
Shelton Group, Investor Relations
+1 (214) 272-0089
btwing@sheltongroup.com