Related Party Transactions

9 Months Ended

Sep. 30, 2020

Note 11. Related Party Transactions

The Company entered into an agreement with MegaChips, whereby the Company appointed MegaChips as the exclusive sales representative of its products in Japan. The Company sells products through MegaChips to distributors, resellers, or direct customers in Japan. The Company pays MegaChips a fixed percentage of the revenue as sales commission, which is recorded as commission expense and included in sales and marketing in the consolidated statements of operations and comprehensive loss.

MegaChips is the largest stockholder of the Company and held approximately 44.3% and 66.8% of the Company’s outstanding common stock as of September 30, 2020 and December 31, 2019, respectively.

In the three and nine months ended September 30, 2020, the Company entered into an asset purchase agreement with MegaChips Corporation.

In the nine months ended September 30, 2020 the Company entered into an equipment purchase agreement with MegaChips Taiwan Corporation, a wholly-owned subsidiary of MegaChips Corporation.

In the nine months ended September 30, 2020 the Company entered into a services and secondment agreement with MegaChips LSI USA Corporation, a wholly-owned subsidiary of MegaChips Corporation.

See Note 9, “Debt Obligations” for more information regarding the Company’s loan agreement with MegaChips.

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

	As of
	September 30, 2020		December 31, 2019
	(in thousands)
MegaChips
Accounts receivable	$	738	$	1,073
Prepaid expenses and other current assets		—		18
Accounts payable		29		220

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)
MegaChips
Sales	$	1,544	$	1,418	$	4,274	$	3,232
License expense		—		68		148		68
Commission expense		64		59		176		127
Affiliates
Consulting fees		87		—		262		—

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)				(in thousands)
MegaChips
Cash paid for commissions	$	64	$	59	$	176	$	127
Cash paid for licenses		—		—		25		91
Affiliates
Cash paid for consulting fees		87		—		262		—