Related Party Transactions

6 Months Ended

Jun. 30, 2022

Note 10. Related Party Transactions

The Company entered into an agreement with MegaChips Corporation ("MegaChips"), whereby the Company appointed MegaChips as a non-exclusive sales representative of its products in Japan. The Company sold products through MegaChips to distributors, resellers, or direct customers in Japan. The Company paid MegaChips a fixed percentage of the revenue as sales commission, which was recorded as commission expense and included in sales and marketing in the consolidated statements of operations and comprehensive loss. In connection with the Company's efforts to contract directly with distributors in Japan, the Company entered into a termination agreement with MegaChips pursuant to which the Company and MegaChips mutually terminated the Distribution Agreement effective November 3, 2021.

The Company also entered into a service and secondment agreement with MegaChips LSI USA Corporation, a wholly owned subsidiary of MegaChips, in 2020 that terminated on August 31, 2021.

MegaChips is the largest stockholder of the Company and held approximately 23.5% and 24.0% of the Company’s outstanding common stock as of June 30, 2022 and December 31, 2021, respectively.

In May 2021, the Company signed a consulting agreement with Akira Takata, a member of the Board of Directors of the Company, to provide sales consulting services through December 31, 2021, for which he received monthly cash fees of $5,000, reimbursement of expenses, and an equity award of 500 RSUs that fully vested on November 20, 2021. In December 2021, the Company signed an amendment to extend the consulting agreement with Mr. Takata through December 31, 2022, for which he continues to receive monthly cash fees, reimbursement of expenses, and an equity award of 300 RSUs that fully vest on November 20, 2022.

The following is a summary of significant balances, transactions and payments with the related parties and affiliates.


	Three Months Ended June 30,				Six Months Ended June 30,
Transactions	2022		2021		2022		2021
	(in thousands)
MegaChips
Sales through distribution agreement	$	—	$	4,415	$	—	$	6,270
Commission expense		—		184		—		261
Affiliates
Consulting fees		41		38		105		125


	Three Months Ended June 30,				Six Months Ended June 30,
Payments	2022		2021		2022		2021
	(in thousands)				(in thousands)
MegaChips
Cash paid for commissions	$	—	$	184	$	—	$	261
Affiliates
Cash paid for consulting fees		41		38		105		125