Note 17 - Collaborative Arrangement

12 Months Ended

Feb. 03, 2018

Notes to Financial Statements

Collaborative Arrangement Disclosure [Text Block]

17

.         

Collaborative a

rrangement

In

September 2016,

we entered into a joint collaboration agreement (“JCA”) with Telechips Inc. (“Telechips”) to develop and commercialize a set-top box microprocessor SoC solution. Martin Manniche, a member of our board of directors, also serves on the board of directors of Telechips. Telechips is responsible for the manufacture of the products and is also the principal in the end customer product sales. Telechips’ wholly-owned subsidiary has the primary responsibility for order fulfillment, collection of receivables and handling of sales returns in all territories. We receive a marketing service fee in an amount equal to

50%

of the net profit from the collaboration agreement, which is included in net revenue. The marketing service fee is recognized when products are shipped and all risks and rewards of ownership have been transferred to

third

-party customers, minus the cost of production and related operating expenses incurred by Telechips. Research and development costs are shared equally. Cost reimbursement to Telechips is recognized as incurred and included in research and development expenses. During fiscal year

2018,

our joint collaboration agreement with Telechips was cancelled by mutual agreement.

On

August 14, 2017,

we entered into an agreement to license certain set-top box semiconductor technology to Telechips for an aggregate payment of

$4.7

million. The payment includes reimbursement of

$2.5

million paid by us for a mask set which was capitalized with a corresponding accumulated amortization of

$0.6

million.  We recorded

$1.1

million license revenue in the

third

quarter of fiscal

2018

with the remaining payment of

$1.1

million recorded upon satisfaction of certain milestones which were completed in the

fourth

quarter of fiscal

2018.

Both parties mutually agreed to terminate the JCA and released each party’s obligation to pay any invoices that

may

be due and payable under this JCA in the

third

quarter of fiscal

2018.

As a result, we reversed the cumulative amortization expense recorded to cost of revenue of

$0.6

million, our cumulative share of research and development expense of

$0.7

million and our cumulative net losses recorded in net revenue of

$0.3

 million.

There is

no

further collaborative agreement since the termination of the JCA.