Pixelworks , Inc. (NASDAQ:PXLW), a company specializing in semiconductors and related devices, announced today that it has entered into a sales agreement with Roth Capital Partners (WA:CPAP), LLC. Under this agreement, Pixelworks may offer and sell its common stock up to the aggregate value of $10 million through an "at the market" equity offering program.
The sales agreement allows Pixelworks to determine the conditions under which its shares will be sold, including the number of shares, the timing of sales, daily quantity limits, and the minimum acceptable sales price.
Roth Capital Partners, acting as the sales agent, is authorized to conduct sales in a manner consistent with an "at the market offering" as defined by the Securities Act of 1933. Sales will be executed through the Nasdaq Global Market or any other established trading market for the common stock.
Pixelworks will compensate Roth with a commission of 2.5% of the gross proceeds from any sales made under this agreement. Additionally, Pixelworks has agreed to indemnify Roth against certain liabilities and to reimburse legal fees and expenses as outlined in the agreement.
The agreement can be terminated by either party under specific conditions, including a material adverse change in Pixelworks' situation. There is no obligation for Pixelworks to sell any shares under the agreement.
This offering is made under Pixelworks' shelf registration statement filed on November 15, 2023, and subsequently amended. The registration statement became effective on February 13, 2024, and the offering is supplemented by a prospectus supplement dated today.
The article is based on an 8K filing.
In other recent news, Pixelworks has experienced notable developments in its financial and operational sectors. The company reported a stable Q3 2024 performance with a revenue of $9.5 million, despite a 76% year-over-year drop in mobile revenue.
Needham, a financial analyst firm, revised the price target for Pixelworks to $1.50 from the previous $2.00, maintaining a buy rating. This adjustment followed the company's solid quarter and a projected lower fourth-quarter top line due to the ongoing reset in its Mobile segment.
Pixelworks has shipped production samples of its next-generation Visual Processing Unit (VPU) to multiple Tier-1 customers, with design win decisions anticipated in the coming months.
The company is also engaging with customers for evaluations of its new cost-down X5 part, with minor shipments expected to begin in Q2 2025. This indicates a potential expansion of the total addressable market into the low-and-mid-tier phone segments for Pixelworks' VPUs.
In addition to these financial developments, Pixelworks has secured a multi-year agreement with Universal Pictures for the TrueCut Motion platform, which is expected to enhance future visual experiences. The company is also exploring strategic options with Morgan Stanley (NYSE:MS)'s advisory.
InvestingPro Insights
Pixelworks' recent decision to enter into an "at the market" equity offering program aligns with several key financial indicators provided by InvestingPro. The company's market capitalization stands at $50.82 million, reflecting its current position in the semiconductor industry.
An InvestingPro Tip highlights that Pixelworks holds more cash than debt on its balance sheet, which could be seen as a positive factor for potential investors considering the new equity offering. This cash position might provide some reassurance about the company's financial stability as it seeks to raise additional capital.
However, another InvestingPro Tip notes that Pixelworks is quickly burning through cash, which may explain the company's decision to initiate this equity offering program. This information adds context to why Pixelworks might be seeking up to $10 million in additional funding through the sale of common stock.
The company's revenue for the last twelve months as of Q3 2024 was $54.19 million, with a revenue growth of -4.07% over the same period. This decline in revenue, coupled with the fact that Pixelworks is not profitable over the last twelve months (as indicated by another InvestingPro Tip), underscores the potential need for additional capital to fund operations and growth initiatives.
For investors considering Pixelworks' stock, it's worth noting that InvestingPro offers 11 additional tips that could provide further insights into the company's financial health and market position. These additional tips, available through the InvestingPro product, could be valuable for assessing the potential impact of this equity offering on Pixelworks' future performance.
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