Form 10-Q - Quarterly report [Sections 13 or 15(d)]

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number: 000-55843

Techpoint, Inc.

(Exact Name of Registrant as Specified in its Charter)

    Delaware

    80-0806545

    (State or other jurisdiction of
incorporation or organization)

    (I.R.S. Employer
Identification No.)

2550 N. First Street, #550

San Jose, CA USA 95131

(Address of principal executive offices) (Zip Code)

(408) 324-0588

(Registrant’s telephone number,

including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

    Title of each class

    Trading
Symbol(s)

    Name of each exchange on which registered

    Japanese Depositary Shares, each representing one
share of Common Stock, $0.0001 par value per share

    M-6697

    Tokyo Stock Exchange (Growth Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 1, 2024, the registrant had 18,550,521 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents.


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Income and Comprehensive Income	2
	Condensed Consolidated Statements of Stockholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	30
PART II.	OTHER INFORMATION	31
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 5.	Other Information	31
Item 6.	Exhibits	32
	SIGNATURES	33

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Techpoint, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts, unaudited)


	June 30,		December 31,
	2024		2023
Assets
Current assets:
Cash and cash equivalents	$	23,577	$	13,671
Short-term investments		43,928		51,788
Accounts receivable		178		40
Inventory		12,259		9,518
Prepaid expenses and other current assets		1,077		939
Total current assets		81,019		75,956
Property and equipment, net		404		522
Deferred tax assets		4,142		3,620
Right-of-use assets		739		1,045
Goodwill		891		891
Intangible assets, net		981		1,036
Long-term investments		—		500
Other assets		157		237
Total assets	$	88,333	$	83,807
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,517	$	1,707
Accrued liabilities		3,316		2,322
Customer deposits		771		1,448
Lease liabilities		433		497
Dividend payable		4,626		4,599
Total current liabilities		10,663		10,573
Other liabilities		474		939
Total liabilities		11,137		11,512
Commitments and contingencies (Note 5)
Stockholders’ equity
Preferred stock, par value $0.0001 per share - 5,000,000 shares authorized as of June 30, 2024 and December 31, 2023; nil shares issued and outstanding as of June 30, 2024 and December 31, 2023		—		—
Common stock, par value $0.0001 per share - 75,000,000 shares authorized as of June 30, 2024 and December 31, 2023; 18,507,490 and 18,395,682 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively		2		2
Additional paid-in capital		28,272		27,477
Accumulated other comprehensive loss		39		18
Retained earnings		48,883		44,798
Total stockholders’ equity		77,196		72,295
Total liabilities and stockholders’ equity	$	88,333	$	83,807

See accompanying notes to condensed consolidated financial statements.

Techpoint, Inc.

Condensed Consolidated Statements of Income and Comprehensive Income

(in thousands, except share and per share amounts, unaudited)


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2024		2023			2024		2023
Revenue	$	16,779	$	15,298		$	33,090	$	29,440
Cost of revenue		8,070		7,071			15,585		13,568
Gross profit		8,709		8,227			17,505		15,872
Operating expenses
Research and development		1,835		1,431			3,918		3,543
Selling, general and administrative		2,604		2,663			5,125		4,893
Total operating expenses		4,439		4,094			9,043		8,436
Income from operations		4,270		4,133			8,462		7,436
Other income, net		659		475			1,432		954
Income before income taxes		4,929		4,608			9,894		8,390
Provision for income taxes		593		558			1,178		964
Net income	$	4,336	$	4,050		$	8,716	$	7,426
Net income per share:
Basic	$	0.23	$	0.22		$	0.47	$	0.41
Diluted	$	0.23	$	0.22		$	0.46	$	0.40
Weighted average shares outstanding used in computing net income per share
Basic		18,464,483		18,294,629			18,452,766		18,263,029
Diluted		18,866,543		18,605,638			18,906,959		18,590,921
Comprehensive income:
Net income	$	4,336	$	4,050		$	8,716	$	7,426
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on available-for-sale debt securities, net of tax (expense) benefit of ($5), $8, ($6) and $0 for the three and six months ended June 30, 2024 and 2023, respectively		17		(31	)		21		1
Comprehensive income	$	4,353	$	4,019		$	8,737	$	7,427

See accompanying notes to condensed consolidated financial statements.

Techpoint, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share amounts, unaudited)



	Common Stock					Additional			Accumulated Other						Total
	Shares			Amount		Paid-In Capital			Comprehensive income (loss)			Retained Earnings			Stockholders' Equity
Balances as of December 31, 2022		18,198,737		$	2	$	26,046		$	(147	)	$	36,175		$	62,076
Other comprehensive income – gain on available-for-sale debt securities		—			—		—			32			—			32
Issuance of common stock upon exercise of stock options		24,600			—		29			—			—			29
Issuance of common stock upon vesting of restricted stock units		32,425			—		—			—			—			—
Shares repurchased for tax withholdings on vesting of restricted stock units		(4,636	)		—		(35	)		—			—			(35	)
Stock-based compensation		—			—		362			—			—			362
Cash dividend adjustments		—			—		—			—			(4	)		(4	)
Net income		—			—		—			—			3,376			3,376
Balances as of March 31, 2023		18,251,126		$	2	$	26,402		$	(115	)	$	39,547		$	65,836
Other comprehensive loss – unrealized loss on available-for-sale debt securities		—			—		—			(31	)		—			(31	)
Issuance of common stock upon exercise of stock options		3,250			—		10			—			—			10
Issuance of common stock upon vesting of restricted stock units		82,325			—		—			—			—			—
Shares repurchased for tax withholdings on vesting of restricted stock units		(6,110	)		—		(41	)		—			—			(41	)
Stock-based compensation		—			—		368			—			—			368
Cash dividends declared ($0.25 per share)		—			—		—			—			(4,583	)		(4,583	)
Net income		—			—		—			—			4,050			4,050
Balances as of June 30, 2023		18,330,591		$	2	$	26,739		$	(146	)	$	39,014		$	65,609

See accompanying notes to condensed consolidated financial statements.

Techpoint, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share amounts, unaudited)



	Common Stock					Additional			Accumulated Other					Total
	Shares			Amount		Paid-In Capital			Comprehensive income (loss)		Retained Earnings			Stockholders' Equity
Balances as of December 31, 2023		18,395,682		$	2	$	27,477		$	18	$	44,798		$	72,295
Other comprehensive income – unrealized gain on available-for-sale debt securities		—			—		—			4		—			4
Issuance of common stock upon exercise of stock options		13,000			—		57			—		—			57
Issuance of common stock upon vesting of restricted stock units		27,575			—		—			—		—			—
Shares repurchased for tax withholdings on vesting of restricted stock units		(3,807	)		—		(39	)		—		—			(39	)
Stock-based compensation		—			—		399			—		—			399
Cash dividend adjustments		—			—		—			—		(5	)		(5	)
Net income		—			—		—			—		4,380			4,380
Balances as of March 31, 2024		18,432,450		$	2	$	27,894		$	22	$	49,173		$	77,091
Other comprehensive income – unrealized gain on available-for-sale debt securities		—			—		—			17		—			17
Issuance of common stock upon exercise of stock options		15,000			—		15			—		—			15
Issuance of common stock upon vesting of restricted stock units		63,862			—		—			—		—			—
Shares repurchased for tax withholdings on vesting of restricted stock units		(3,822	)		—		(32	)		—		—			(32	)
Stock-based compensation		—			—		395			—		—			395
Cash dividends declared ($0.25 per share)		—			—		—			—		(4,626	)		(4,626	)
Net income		—			—		—			—		4,336			4,336
Balances as of June 30, 2024		18,507,490		$	2	$	28,272		$	39	$	48,883		$	77,196

See accompanying notes to condensed consolidated financial statements.

Techpoint, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands, unaudited)


	Six Months Ended
	June 30,
	2024			2023
Cash Flows From Operating Activities
Net income	$	8,716		$	7,426
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		182			201
Stock-based compensation		794			730
Accretion of premium on available-for-sale investments		(740	)		(318	)
Gain on disposal of fixed asset		(132	)		—
Inventory valuation adjustment		50			218
Deferred income taxes		(511	)		(597	)
Noncash lease expense		364			303
Unrealized gain		(143	)		—
Changes in operating assets and liabilities:
Accounts receivable		(138	)		(83	)
Inventory		(2,791	)		345
Prepaid expenses and other current assets		(88	)		(186	)
Other assets		80			10
Accounts payable		(1	)		(788	)
Accrued liabilities		694			514
Customer deposits		(677	)		101
Lease liabilities		(122	)		(80	)
Other liabilities		(184	)		(236	)
Net cash provided by operating activities		5,353			7,560
Cash Flows From Investing Activities
Purchase of property and equipment		(66	)		(111	)
Purchase of debt securities		(28,618	)		(8,035	)
Proceeds from maturities of debt securities		37,839			11,100
Net cash provided by investing activities		9,155			2,954
Cash Flows From Financing Activities
Payment of dividends		(4,603	)		(4,555	)
Net proceeds from exercise of stock options		72			39
Payment for shares withheld for tax withholdings on vesting of restricted stock units		(71	)		(76	)
Net cash used in financing activities		(4,602	)		(4,592	)
Net increase in cash and cash equivalents		9,906			5,922
Cash and cash equivalents at beginning of period		13,671			19,392
Cash and cash equivalents at end of period	$	23,577		$	25,314

Supplemental Disclosure of Cash Flow Information
Cash paid for income taxes	$	2,305		$	1,589
Supplemental Disclosure of Noncash Investing and Financing Information
Right-of-use assets obtained in exchange for lease liabilities	$	58		$	26
Property and equipment purchased but not yet paid	$	—		$	32
Vender credit received upon disposal of fixed asset	$	58		$	—
Cash dividend declared but not yet paid	$	4,626		$	4,583

See accompanying notes to condensed consolidated financial statements.

Techpoint, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Organization and Summary of Significant Accounting Policies

Organization

Techpoint, Inc. (together with its wholly-owned subsidiaries, the “Company”) was originally incorporated in California in April 2012 and reincorporated in Delaware in July 2017. The Company is a fabless semiconductor company that designs, markets and sells mixed-signal integrated circuits for multiple video applications in the automotive and security surveillance markets. The Company is headquartered in San Jose, California.

Basis of Consolidation and Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). All intercompany balances and transactions have been eliminated. The functional currency of each of the Company’s subsidiaries is the U.S. dollar. Foreign currency gains or losses are recorded as other income (expense), net in the condensed consolidated statements of income and comprehensive income.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2023 contained in the Company’s Annual Report on Form 10-K.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which include normal recurring adjustments necessary to present fairly the Company’s financial position, results of operations and cash flows for the interim periods and are not necessarily indicative of the results to be expected for the full fiscal year or for any other future annual or interim periods.

Revenue Recognition

The Company principally sells its products to distributors who, in turn, sell to original equipment manufacturers (“OEM”), original design manufacturers (“ODM”), contract manufacturers, and design houses. Product revenue consists of sales of mixed-signal integrated circuits into the automotive and security surveillance markets. The Company generally requires advance payments from customers and records these advance payments, or contract liabilities, as customer deposits on its condensed consolidated balance sheet. No stock rotation, price protection or return rights are offered. The Company provides product assurance warranty only and does not offer warranties to be purchased separately. Revenue is recognized when control of the product is transferred to the Company's customers, upon shipment, whereby legal title, risks and rewards of ownership, and physical possession are transferred to the customer.

Use of Management’s Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Significant estimates included in the consolidated financial statements include inventory valuation and the valuation allowance for recorded deferred tax assets. These estimates are based upon information available as of the date of the condensed consolidated financial statements. Actual results could differ materially from those estimates.

Certain Significant Risks and Uncertainties

The Company operates in a dynamic industry and can be affected by a variety of factors. For example, any of the following areas could have a negative effect on the Company in terms of its future financial position, results of operations or cash flows: the general state of the U.S., China and world economies; the highly cyclical nature of the industries the Company serves; successful and timely completion of product design efforts; trade restrictions by the United States against the Company's customers in China, or potential retaliatory trade actions taken by China; the loss of any of its larger customers; restrictions on the Company's ability to sell to foreign customers due to additional U.S. or new China trade laws, regulations and requirements; disruptions of the supply chain of components needed for its products; fundamental changes in the technology underlying the Company’s products; the hiring, training and retention of key employees; and new product design introductions by competitors.

The Company has been impacted by adverse macroeconomic and geopolitical conditions. These conditions include but are not limited to inflation, foreign currency fluctuations, and supply chain challenges. Management continues to actively monitor the impact of these conditions on the Company’s financial condition, liquidity, operations, end-customers (including its significant end-customers), distributors, suppliers, industry, and workforce. The extent to which such events impact the Company’s business, prospects and results of operations will depend on future developments, which are highly uncertain. The Company has made estimates of the impact of these events within its financial statements and there may be changes to those estimates in future periods.

Concentration of Customer and Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, investments, and trade receivables. Risks associated with cash and cash equivalents, and investments are mitigated by banking with, and investing in, creditworthy institutions. The Company generally requires advance payments from customers. The Company also performs credit evaluations of its customers and provides credit to certain customers in the normal course of business. The Company has not incurred bad debt write-offs during any of the periods presented.

For each significant customer, or distributor, and significant end-customer, revenue as a percentage of total revenue was as follows:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Customer
Customer A		34	%		44	%		35	%		45	%
Customer B		13	%	*				12	%	*
End-Customer
End-Customer A (1)		20	%		26	%		18	%		26	%

* Less than 10%

(1)

Sales to End-Customer A primarily occurred through Customer A.

Concentration of Supplier Risk

The Company currently relies on Taiwan Semiconductor Manufacturing Company Limited and United Microelectronics Corporation (formerly Fujitsu Electronics America, Inc.) to produce substantially all of its semiconductors. Also, it relies on Advanced Semiconductor Engineering, Inc., Sigurd Microelectronics Corporation, ATX Semiconductor (Shanghai) Co., Ltd, and Chizhou Hisemi Electronics Technology Co., Ltd to assemble, package and test substantially all of its semiconductors to satisfy substantially all of the Company’s production requirements. The failure of any subcontractor to fulfill the production requirements of the Company on a timely basis would adversely impact future results. Although there are other subcontractors that are capable of providing similar services, an unexpected change in either subcontractor would cause delays in the Company’s products and potentially result in a significant loss of revenue.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure. This guidance improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This guidance becomes effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company plans to adopt this guidance prior to its effective date

and has not early adopted such guidance for the period ending June 30, 2024. The impact of this guidance is not expected to have any material impact on the disclosure of the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to income tax disclosure. This guidance modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign operations) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign operations). This guidance also requires entities to disclose their income tax payments to international, federal and state and local jurisdictions. This guidance becomes effective for fiscal years beginning after December 15, 2024. The Company plans to adopt this guidance prior to the effective date and has not early adopted for the period ending June 30, 2024. The Company expects this guidance to only impact its disclosures and have no material impact on the Company’s consolidated financial statements.

Reclassification

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported current/total assets, current/total liabilities, or results of operations.

2. Balance Sheet Components

Inventory

Inventory consists of the following (in thousands):


	June 30,		December 31,
	2024		2023
Work in process	$	7,984	$	4,795
Finished goods		4,275		4,723
Total inventory	$	12,259	$	9,518

Property and Equipment, net

Property and equipment, net consists of the following (in thousands):


	June 30,			December 31,
	2024			2023
Machinery, computer equipment and software	$	2,633		$	2,759
Leasehold improvements		94			94
Furniture		38			36
Total property and equipment		2,765			2,889
Less: accumulated depreciation		(2,361	)		(2,367	)
Total property and equipment, net	$	404		$	522

The Company recorded $0.1 million of depreciation expense for each of the three months ended June 30, 2024 and 2023, and $0.1 million and $0.2 for the six months ended June 30, 2024 and 2023, respectively.

Goodwill and Intangible assets, net

Goodwill is tested for impairment annually as of December 31 or more frequently on a reporting unit basis when events or changes in circumstances indicate that impairment may have occurred. The Company is not aware of any events or circumstances indicating impairment of goodwill for the six months ended June 30, 2024.

Changes in the carrying amount of goodwill for the six months ended June 30, 2024 are as follows (in thousands):

Intangible assets, except goodwill consist of the following (in thousands):

The amortization expenses of intangible assets were $54,000 and nil for the six months ended June 30, 2024 and 2023, respectively.

Acquired intellectual property is amortized over 10 years of its useful life. As of June 30, 2024, expected amortization expense for the unamortized finite-lived intangible assets by years is as follows (in thousands):


Year Ending December 31,	Amount
Remainder of 2024	$	55
2025		109
2026		109
2027		109
2028		109
Thereafter		490
Total	$	981

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):


	June 30,		December 31,
	2024		2023
Payroll-related expenses	$	2,191	$	983
Engineering service		397		199
Security for the indemnification obligations (1)		300		—
Accrued warranty		158		180
Accrued inventory		116		401
Taxes payable		89		468
Professional fees		20		23
Other		45		68
Total accrued liabilities	$	3,316	$	2,322

(1) In July 2023, the Company acquired certain assets of Broadvis Corporation, including intellectual property and $0.3 million that was retained by the Company at closing as security for the indemnification obligations of Broadvis Corporation is expected to be released in January 2025, barring unforeseen circumstances.

Customer Deposits

Customer deposits represent payments received in advance of shipments and fluctuate depending on timing of customer pre-payments and product shipment. Customer deposits were $0.8 million and $1.4 million as of June 30, 2024 and December 31, 2023, respectively. The Company generally expects to recognize revenue from customer deposits during the three month period immediately following the balance sheet date. The Company recognized $0.8 million of revenue from the March 31, 2024 customer deposit balance during the three months ended June 30, 2024, and $1.4 million of revenue from the December 31, 2023 customer deposits balance during the three months ended March 31, 2024.

3. Fair Value Measurements of Financial Instruments

Summary of Financial Instruments

The following is a summary of financial instruments (in thousands):



	June 30, 2024
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Values
Available-for-sale securities:
Certificates of deposit	$	1,924	$	—	$	(1	)	$	1,923
U.S.Treasury bills and notes		35,458	94			(25	)		35,527
Government agency bonds		518		—		(1	)		517
Corporate bonds		6,977		—		(18	)		6,959
Total available-for-sale securities	$	44,877	$	94	$	(45	)	$	44,926
Reported in:
Cash and cash equivalents								$	998
Short-term investments									43,928
Long-term investments									—
Total available-for-sale securities								$	44,926



	December 31, 2023
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Values
Available-for-sale securities:
Certificates of deposit	$	3,633	$	1	$	—		$	3,634
U.S.Treasury bills and notes		37,624	76			—			37,700
Government agency bonds		2,600		—		(3	)		2,597
Corporate bonds		11,504		—		(51	)		11,453
Total available-for-sale securities	$	55,361	$	77	$	(54	)	$	55,384
Reported in:
Cash and cash equivalents								$	3,096
Short-term investments									51,788
Long-term investments									500
Total available-for-sale securities								$	55,384

The contractual maturities of available-for-sale securities are presented in the following table (in thousands):



	June 30, 2024				December 31, 2023
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	44,877	$	44,926	$	54,859	$	54,884
Due between one to two years		—		—		502		500
	$	44,877	$	44,926	$	55,361	$	55,384

The Company had 51 investments in unrealized loss positions as of June 30, 2024. 38 of such investments have been in unrealized loss positions for less than twelve months. The total Fair Value of such investments is $38.7 million with unrealized losses of approximately $0.1 million as of June 30, 2024. There were no material gross unrealized losses from available-for-sale securities and no material realized gains or losses from available-for-sale securities that were reclassified from accumulated other comprehensive income for the six months ended June 30, 2024.

For investments in available-for-sale debt securities that have unrealized losses, the Company evaluates (i) whether it has the intention to sell any of these investments and (ii) whether it is more likely than not that it will be required to sell any of these investments before recovery of the entire amortized cost basis. Based on this evaluation, the Company determined that there were no other-than-temporary impairments associated with investments as of June 30, 2024.

There were no sales of available-for-sale securities for the six months ended June 30, 2024 and 2023.

Fair Value Measurements

Fair value is defined as the exchange price that would be received from selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company measures financial assets and liabilities at fair value at each reporting period using a fair value hierarchy which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:

Level 1. Quoted prices in active markets for identical assets or liabilities.

Level 2. Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3. Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

Financial assets measured at fair value on a recurring basis were as follows (in thousands):


	Fair Value Measurement at Reporting Date Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total
As of June 30, 2024
Financial assets - available-for-sale securities
Certificates of deposit	$	—	$	1,923	$	1,923
U.S.Treasury bills and notes		—		35,527		35,527
Governmental agency bonds		—		517		517
Corporate bonds		6,959		—		6,959
Total financial assets - available-for-sale securities	$	6,959	$	37,967	$	44,926

As of December 31, 2023
Financial assets - available-for-sale securities
Certificates of deposit	$	—	$	3,634	$	3,634
U.S.Treasury bills and notes		2,198		35,502		37,700
Governmental agency bonds		600		1,997		2,597
Corporate bonds		10,953		500		11,453
Total financial assets - available-for-sale securities	$	13,751	$	41,633	$	55,384

The Company uses a pricing service to assist in determining the fair values of all of its cash equivalents, short-term investments and long-term investments. The pricing service uses inputs from multiple industry standard data providers or other third party sources and applies various acceptable methodologies.

4. Segment Information

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

The Company’s chief operating decision maker, the chief executive officer, reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance on a regular basis. Accordingly, the Company considers itself to be one reportable segment, which is comprised of one operating segment - the designing, marketing and selling of mixed-signal integrated circuits for the automotive and security surveillance markets.

Product revenue from customers is designated based on the geographic region to which the product is delivered. Revenue by geographic region was as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
China	$	12,410	$	11,233	$	24,637	$	21,752
Taiwan		2,445		2,291		4,785		4,062
South Korea		1,221		1,390		2,382		2,763
Japan		170		326		362		707
Other		533		58		924		156
Total revenue	$	16,779	$	15,298	$	33,090	$	29,440

Revenue by principal product lines was as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Automotive	$	12,386	$	9,930	$	24,867	$	18,727
Security surveillance		4,393		5,368		8,223		10,713
Total revenue	$	16,779	$	15,298	$	33,090	$	29,440

Long-lived assets by geographic region were as follows (in thousands):


	June 30,		December 31,
	2024		2023
Taiwan	$	280	$	308
China		100		176
United States		13		29
South Korea		8		6
Japan		3		3
Total property and equipment, net	$	404	$	522

5. Commitments and Contingencies

Operating leases

The Company determines if an arrangement contains a lease at inception. The Company leases facilities under non-cancelable lease agreements expiring through fiscal year 2026. The Company’s agreements do not include variable lease payments or any restrictions or covenants imposed by the leases. As the rate implicit in each lease agreement is not readily determinable, the Company’s incremental borrowing rate was used as the discount rate. The Company’s right-of-use assets and lease liabilities have been adjusted for initial direct costs and prepaid rent but do not reflect any options to extend or terminate its lease agreements, any residual value guarantees, or any leases that have not yet commenced.

The right-of-use assets and lease liabilities related to operating leases were as follows (in thousands):


	June 30,		December 31,
	2024		2023
Right-of-use assets	$	739	$	1,045

Lease liabilities - Current	$	433	$	497
Lease liabilities - Non-Current		346		531
Total lease liabilities	$	779	$	1,028

Rent expense under operating leases was $0.2 million for each of the three months ended June 30, 2024 and 2023. Rent expense under operating leases was $0.4 million for each of the six months ended June 30, 2024 and 2023.

The rent expense recognized from short-term leases was $6,000 for each of the three months ended June 30, 2024 and 2023, respectively. The rent expense recognized from short-term leases was $12,000 for each of the six months ended June 30, 2024 and 2023.

The following tables summarize the Company’s lease costs and weighted-average assumptions used in determining its right-of-use assets and lease liabilities (in thousands):


	Six Months Ended			Six Months Ended
	June 30, 2024			June 30, 2023
Operating lease cost	$	393		$	380
Cash paid for operating leases	$	336		$	385
Right-of-use assets obtained in exchange for operating lease liabilities (1)	$	58		$	26
Weighted average remaining term for operating leases	1.73 years			0.92 years
Weighted average discount rate for operating leases		8.2	%		5.8	%

(1) During the six months ended June 30, 2024, the Company extended the term of its lease in Taiwan; the Taiwan lease was treated as a modification but not as a separate contract, as no additional right-of-use was granted. The Taiwan lease modification was accounted for as a non-cash change in existing lease liabilities and the right-of-use assets.

During the six months ended June 30, 2023, the Company extended the term of its lease in South Korea; the South Korea lease was treated as a modification but not as a separate contract, as no additional right-of-use was granted. The South Korea lease modification was accounted for as a non-cash change in existing lease liabilities and the right-of-use assets.

As of June 30, 2024, the aggregate future minimum lease payments under non-cancelable operating leases consist of the following (in thousands):


Year Ending December 31,	Amount
2024 (remaining six months)	$	276
2025		417
2026		157
Total		850
Less effects of discounting		(71	)
Total lease liabilities	$	779

Purchase Commitments

As of June 30, 2024, the Company had purchase commitments with its third-party suppliers through fiscal year 2026. Future minimum payments under purchase commitments total $0.7 million for the remaining six months ending December 31, 2024, $0.7 million for the year ending December 31, 2025, and $0.3 million for the year ending December 31, 2026.

Litigation

Although the Company is not currently a party to any legal proceedings and there is no litigation currently threatened, the Company may be subject to legal proceedings, claims and litigation, including intellectual property litigation, arising in the ordinary course of business. Such matters are subject to many uncertainties and outcomes and are not predictable with assurance. The Company accrues amounts that it believes are adequate to address any liabilities related to legal proceedings and other loss contingencies that the Company believes will result in a probable loss that is reasonably estimable.

Indemnification

During the normal course of business, the Company may make certain indemnities, commitments and guarantees which may include intellectual property indemnities to certain of its customers in connection with the sales of the Company’s products and indemnities for liabilities associated with the infringement of other parties’ technology based upon the Company’s products. The Company’s exposure under these indemnification provisions is generally limited to the total amount paid by a customer under the agreement. However, certain agreements include indemnification provisions that could potentially expose the Company to losses in excess of the amount received under the agreement. In addition, the Company indemnifies its officers, directors and certain key employees while they are serving in good faith in such capacities.

The Company has not recorded any liability for these indemnities, commitments and guarantees in the accompanying condensed consolidated balance sheets. Where necessary, the Company accrues for losses for any known contingent liabilities, including those that may arise from indemnification provisions, when future payment is probable.

6. Stockholders’ Equity

Preferred Stock

The Company is authorized to issue 5,000,000 shares of preferred stock with a $0.0001 par value per share as of June 30, 2024 and December 31, 2023. There were no shares of preferred stock issued and outstanding as of June 30, 2024 and December 31, 2023.

Common Stock

The Company is authorized to issue 75,000,000 shares of common stock with $0.0001 par value per share as of June 30, 2024 and December 31, 2023. As of June 30, 2024, the shares of common stock issued and outstanding totaled 18,507,490. As of December 31, 2023, the shares of common stock issued and outstanding were 18,395,682.

The Company has reserved the following number of shares of common stock for future issuances:



	June 30, 2024
Outstanding stock awards		980,469
Shares available for future issuance under the 2017 Stock Incentive Plan		7,016,775
Total common stock reserved for future issuances		7,997,244

Dividend

On December 15, 2023, the Company announced a cash dividend of an aggregate of $0.50 per share for fiscal year 2024, payable in two equal installments of $0.25 per share. The first installment of the dividend was paid during the first fiscal quarter of 2024 in the aggregate amount of $4.6 million to stockholders of record as of the close of business on January 31, 2024. On May 31, 2024, the Company announced that the second installment payment of its cash dividend of $0.25 on shares of its common stock (including common stock underlying its Japanese Depositary Shares ("JDS")), which was paid to stockholders of record as of June 28, 2024 on July 18, 2024. The aggregate amount of the two dividend payments was $9.2 million.

On December 16, 2022, the Company announced a cash dividend of an aggregate of $0.50 per share for fiscal year 2023, payable in two equal installments of $0.25 per share. The first installment of the dividend was paid during the first fiscal quarter of

2023 in the aggregate amount of $4.6 million to stockholders of record as of the close of business on January 31, 2023. On June 2, 2023, the Company announced that the second installment payment of its cash dividend of $0.25 on shares of its common stock (including common stock underlying its JDS), which was paid to stockholders of record as of June 30, 2023 on July 18, 2023. The aggregate amount of the two dividend payments was $9.1 million.

7. Equity Incentive Plans

Stock Incentive Plans

In April 2012, the Company adopted a 2012 Stock Option Plan (“2012 Plan”). The 2012 Plan provides for the granting of stock-based awards to employees, directors, and consultants under terms and provisions established by the Company’s board of directors. Under the terms of the 2012 Plan, options may be granted at an exercise price not less than fair market value. For employees holding more than 10% of the voting rights of all classes of stock, the exercise prices for incentive and non-statutory stock options must be at least 110% of the fair market value of the common stock on the grant date, as determined by the Company’s board of directors. The terms of options granted under the 2012 Plan may not exceed ten years.

The 2012 Plan was superseded by a 2017 Stock Option Plan (“2017 Plan”). Any outstanding awards under the 2012 Plan will continue to be governed by the terms of the 2012 Plan.

In August 2017, the Company adopted the 2017 Plan. The Company’s stockholders approved the 2017 Plan in September 2017 and it became effective immediately prior to the closing of the Company’s initial public offering. In connection with the adoption of the 2017 Plan, no additional awards and no shares of common stock remain available for future issuance under the 2012 Plan and shares reserved but not issued under the 2012 Plan as of the effective date of the 2017 Plan were included in the number of shares reserved for issuance under the 2017 Plan. In addition, shares subject to awards under the 2012 Plan that are forfeited or terminated are added to the 2017 Plan. The number of shares available for issuance under the 2017 Plan can be automatically increased on the first day of each fiscal year beginning on January 1, 2018 and ending on (and including) January 1, 2027, in an amount equal to the lesser of (1) 4% of the outstanding shares of the Company’s common stock on the last day of the immediately preceding fiscal year, or (2) another amount determined by the Company’s board of directors. The 2017 Plan provides for the granting of incentive stock options within the meaning of Section 422 of the Internal Revenue Code to employees and the granting of non-statutory stock options to employees, non-employee directors, advisors and consultants. The 2017 Plan also provides for the grants of restricted stock, stock appreciation rights, stock unit and cash-based awards to employees, non-employee directors, advisors and consultants.

On November 7, 2023, the board of directors of the Company determined not to increase the number of shares of the Company’s common stock authorized for issuance under its 2017 Plan for the 2024 fiscal year, which would have been otherwise subject to a four percent (4%) annual increase on January 1, 2024.

The Company’s stock award activity under the 2017 Plan is summarized as follows:


	Awards Available for Grant
As of December 31, 2023		7,057,446
Authorized		—
Granted		(58,000	)
Canceled		17,329
As of June 30, 2024		7,016,775

Stock Options

The Company’s stock option activity under the 2017 Plan is summarized as follows:


	Options Issued and Outstanding			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (in thousands)
As of December 31, 2023		431,081		$	2.81		3.3	$	3,305
Granted		—			—
Exercised		(28,000	)		2.56
Canceled		—			—
As of June 30, 2024		403,081			2.82		2.8		1,992
Options vested and exercisable as of June 30, 2024		403,081			2.82		2.8		1,992

The stock options outstanding and exercisable by exercise price as of June 30, 2024 are as follows:


		Options Outstanding, Vested and Exercisable
Exercise Price		Number Outstanding		Weighted- Average Remaining Contractual Life (Years)		Weighted- Average Exercise Price
$	0.37		10,000		1.1	$	0.37
	0.97		8,000		1.4		0.97
	2.51		46,780		2.2		2.51
	2.89		40,000		2.7		2.89
	2.93		218,734		3.0		2.93
	3.18		79,567		3.1		3.18
			403,081		2.8		2.82

The aggregate intrinsic value of options exercised for the six months ended June 30, 2024 and 2023 was $0.2 million and $0.1 million, respectively. The Company has various vesting agreements with its employees. Options granted generally vest over a five-year period and generally are exercisable for up to 10 years.

Restricted Stock Units

The Company’s restricted stock units activity is summarized as follows:


	Units Issued and Outstanding			Weighted-Average Grant Date Fair Value
As of December 31, 2023		620,525		$	7.63
Granted		58,000			8.28
Released, net		(83,808	)		8.90
Canceled		(17,329	)		9.45
As of June 30, 2024		577,388			7.65

Restricted stock units are converted into shares of the Company’s common stock upon vesting on a one-for-one basis. Restricted stock unit awards generally vest over a five-year period and are subject to the grantee’s continued service with the Company.

8. Stock-Based Compensation

The following table summarizes the distribution of stock-based compensation expense (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Cost of revenue	$	27	$	40	$	57	$	76
Research and development		150		115		300		234
Selling, general and administrative		218		213		437		420
Total	$	395	$	368	$	794	$	730

9. Net Income Per Share

The following table presents the calculation of basic and diluted net income per share (amounts in thousands, except share and per share data):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Numerator:
Basic and Diluted:
Net income	$	4,336	$	4,050	$	8,716	$	7,426
Denominator:
Basic shares:
Weighted-average shares outstanding used in computing basic net income per share		18,464,483		18,294,629		18,452,766		18,263,029
Diluted shares:
Effect of potentially dilutive securities:
Stock options and restricted stock units		402,060		311,009		454,193		327,892
Weighted-average shares used in computing diluted net income per share		18,866,543		18,605,638		18,906,959		18,590,921
Net income per share:
Basic	$	0.23	$	0.22	$	0.47	$	0.41
Diluted	$	0.23	$	0.22	$	0.46	$	0.40

The potentially dilutive shares of common stock outstanding for the three months ended June 30, 2024 and 2023 that were excluded from the computation of diluted net income per share as the effect would have been antidilutive, was approximately 124,000 and 299,000 shares, respectively. The potentially dilutive shares of common stock outstanding for the six months ended June 30, 2024 and 2023 that were excluded from the computation of diluted net income per share for the periods presented as the effect would have been antidilutive was 78,000 and 269,000 shares, respectively.

10. Provision for Income Taxes

The components of income before income taxes were as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Domestic	$	4,859	$	4,599	$	9,762	$	8,321
Foreign		70		9		132		69
Income before income taxes	$	4,929	$	4,608	$	9,894	$	8,390

The components of the provision for income taxes were as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
United States	$	582	$	556	$	1,159	$	956
Foreign		11		2		19		8
Provision for income taxes	$	593	$	558	$	1,178	$	964

The Company applies the provisions of the applicable accounting guidance regarding accounting for uncertainty in income taxes, which require application of a more-likely-than-not threshold to the recognition and derecognition of uncertain tax positions. If the recognition threshold is met, the applicable accounting guidance permits the recognition of a tax benefit measured at the largest amount of such tax benefit that, in the Company’s judgment, is more than fifty percent likely to be realized upon settlement. It further requires that a change in judgment related to the expected ultimate resolution of uncertain tax positions to be recognized in earnings in the period in which such determination is made. The Company will continue to review its tax positions and provide for, or reverse, unrecognized tax benefits as issues arise.

As of June 30, 2024, there was no material increase in the liability for unrecognized tax benefits and no accrued interest or penalties related to uncertain tax positions.

As of June 30, 2024, the Company had approximately $0.4 million of unrecognized tax benefits of which $0.3 million was netted against deferred tax assets with a full valuation allowance. If these amounts are recognized, there will be a tax benefit of $0.1 million against the Company’s effective tax rate.

The Company files income tax returns in the U.S. federal, California, and foreign jurisdictions with varying statutes of limitations. The Company is generally no longer subject to tax examinations for years prior to 2019 for federal purposes and 2018 for state purposes, except in certain limited circumstances. In California, the Company's net operating loss (“NOL”) and credit carryforwards from all years may be subject to adjustment for four years for California following the year in which utilized. Currently, the Company has California NOLs and credit carryforwards from 2012 which remain subject to adjustment for four years following the year in which utilized, and therefore tax years 2012 through 2022 may remain open for state audit. The Company does not anticipate that any potential tax adjustments will have a significant impact on its financial position or results of operations.

The CHIPS and Science Act of 2022 ("CHIPS") and the Inflation Reduction Act ("IRA") of 2022 were signed into law by President Biden on August 9, 2022 and August 16, 2022, respectively. The legislation introduces new options for monetizing certain credits, a corporate alternative minimum tax, and a stock repurchase excise tax. The Company has concluded that the impact of any of the provisions included in CHIPS and IRA acts did not have a material impact on the Company's unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2024.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Information Regarding Forward-Looking Statements

This Quarterly Report on Form10-Q includes forward-looking statements. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, strategy and plans, our expectations for future operations, expectations regarding adoption of accounting pronouncements, our belief regarding adequacy of accruals related to future litigation, and expectations related to indemnities, are forward-looking statements. The words “anticipate”, “believe,” “continue,” “could,” “design,” “estimate,” “intend,” “may,” “plan,” “project,” “will,” “expect,” or the negative version of these words and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including the following:

•

our future financial performance, including our revenue, sales, cost of sales and operating expenses;

•

our market opportunity and our ability to effectively manage or sustain our growth;

•

our ability to attract new and retain existing customers in our current or future target markets;

•

our ability to continue to develop new technologies and secure design wins;

•

our ability to achieve the expected benefits from our acquisitions;

•

laws and regulations applicable to our business, including the expected impact of restrictions to be imposed by trade regulations;

•

the impact of global shortages in manufacturing capacities;

•

our ability to form and expand partnerships with technology partners and consulting partners;

•

our ability to maintain, protect and enhance our intellectual property;

•

our ability to successfully defend litigation brought against us;

•

our product development and sales cycle;

•

the strength of our competition;

•

the impact of macroeconomic conditions, including inflation, recession and trade relations between the U.S. and China, on our business;

•

the effect of health epidemics on our business and the success of any measures we have taken or may take in the future in response thereto;

•

the impact of potential tax adjustments;

•

our liquidity and working capital requirements; and

•

our expectations regarding future expenses and investments.

In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Any forward-looking statement made by us in this Quarterly Report on Form 10-Q is as of the date on which it is filed with the SEC. We do not intend to update any of these forward-looking statements after the date of this Quarterly Report on Form 10-Q, except as required by law.

General Background

The following discussion and analysis should be read together with our unaudited condensed consolidated financial statements and the notes to those statements that appear in this Quarterly Report on Form 10-Q and our consolidated financial statements and the notes to those statements that appear in our Annual Report on Form 10-K for the year ended December 31, 2023. This discussion contains forward-looking statements based on our current expectations, assumptions, estimates and projections. These

forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those indicated in these forward-looking statements as a result of certain factors, as more fully described in “Risk Factors” in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K.

In this Quarterly Report on Form 10-Q, unless otherwise specified or the context otherwise requires, “Techpoint,” “we,” “us,” and “our” refer to Techpoint, Inc. and its consolidated subsidiaries.

We have obtained or are in the process of obtaining registered trademarks for Techpoint and HD-TVI. This Quarterly Report on Form 10-Q contains references to our trademarks and to trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this report, including logos, artwork and other visual displays, may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

Overview

We are a fabless semiconductor company that designs, markets and sells mixed-signal integrated circuits for multiple video applications in the automotive security and surveillance markets. Our integrated circuits are enabling the transition from standard definition (“SD”) video to high definition (“HD”) video in the automotive and security surveillance markets.

Our solutions take HD video signals from a camera and convert them into analog signals for reliable long-distance transmission, then convert the HD analog signal into the appropriate format for video processing and display. Our HD analog technology operates at the same 1080p HD resolution as digital HD, but processes video in an HD analog format and transmits the video in this same analog format, thereby eliminating the need for any compression or decompression. Our integrated circuits are based on our proprietary architecture and mixed signal technologies that we believe provide high video quality, enable high levels of integration and are cost effective.

We derive our revenue from sales of our mixed-signal integrated circuits into the automotive and security surveillance markets. We began shipping our products in 2013 and to date, we have sold over 450 million integrated circuits. Our revenue was $33.1 million and $29.4 million for the six months ended June 30, 2024 and 2023, respectively. The automotive market accounted for 75% and 64% of our revenue for the six months ended June 30, 2024 and 2023, respectively. The security surveillance market accounted for 25% and 36% of our revenue for the six months ended June 30, 2024 and 2023, respectively. We recognized $24.9 million and $18.7 million of revenue on sales into the automotive market for the six months ended June 30, 2024 and 2023, respectively. In addition, we recognized $8.2 million and $10.7 million of revenue on sales into the security surveillance market for the six months ended June 30, 2024 and 2023, respectively. We recorded net income of $8.7 million and $7.4 million for the six months ended June 30, 2024 and 2023, respectively.

We sell our products to distributors that fulfill third-party orders for our products. We also sell directly to OEM and ODM. For the six months ended June 30, 2024 and 2023, we derived substantially all of our revenue from products sold to distributors as compared to products sold to OEM and ODM directly.

We undertake significant product development efforts well in advance of a product’s release and in advance of receiving purchase orders. Our product development efforts, which are focused on developing new designs with broad demand and potential for future derivative products, typically take from six to twenty-four months until production begins, depending on the product’s complexity. If we secure a design win, we believe the system designer is likely to continue to use the same or enhanced versions of our product across a number of their models, extending the life cycles of our products. Conversely, if a competitor secures the design win, it may be difficult for us to sell into the end-customer’s application for an extended period. Our sales cycle typically ranges from one to three years for the automotive market and three to six months for the security surveillance market. Due to the length of our product development and sales cycle, the majority of our revenue for any period is likely to be weighted toward products introduced for sale in the prior one or two years. As a result, our present revenue is not necessarily representative of future sales because our future sales are likely to be comprised of a different mix of products, some of which are now in the development stage.

We employ a fabless manufacturing strategy and use market-leading suppliers for all phases of the manufacturing process, including wafer fabrication, assembly, testing and packaging. This strategy significantly reduces the capital investment that would otherwise be required to operate manufacturing facilities of our own.

We have made significant investments in research and development in order to develop our products to attract and retain end-customers. For the six months ended June 30, 2024 and 2023, our research and development expense was $3.9 million and $3.5 million, respectively. Our research and development expenses can vary from period-to-period and can be significantly impacted by the

number of tape-outs and new products that we initiate in any given period. As of June 30, 2024, we had 102 employees, 39 of whom are in research and development. Our headquarters are located in San Jose, California, with additional operations in Japan, Taiwan, China and South Korea.

Effective October 9, 2019, the U.S. Commerce Department’s Bureau of Industry and Security (“BIS”) added Hikvision, a customer that represented 18% and 26% of our revenue for the six months ended June 30, 2024 and 2023, respectively, to the BIS Entity List with a license requirement for all items subject to the Export Administration Regulations (“EAR”). The BIS Entity List is a published list of the names of certain foreign persons, including businesses, research institutions, government and private organizations and individuals, that are subject to specific governmental license requirements for the export, reexport and/or transfer of specified items. These license requirements could make it more difficult to ship, or in some cases, prevent the shipment of products to certain foreign persons named on the BIS Entity List.

We have taken action to confirm whether our products are subject to EAR. We have retained the continuous assistance of outside experts and, following Hikvision’s designation on the BIS Entity List, performed a comprehensive review of our products and manufacturing operations. Based on that review, we concluded that our products are not subject to EAR. Therefore, our products may continue to be shipped to Hikvision without a U.S. export license, even though Hikvision appears on the BIS Entity List.

On November 12, 2020, President Trump issued Executive Order 13959 on Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies which prohibits any transaction in publicly traded securities, or any securities that are derivative of, or are designed to provide investment exposure to such securities, of any identified Communist Chinese military company, which included Hikvision. On June 3, 2021, President Biden issued Executive Order 14032 amending the prior Executive Order. As amended, Executive Order 13959 continues to prohibit certain transactions involving the purchase or sale of publicly traded securities of designated companies. Restrictions are applicable to certain entities designated as Chinese Military-Industrial Complex Companies who have been placed on the “CMIC List.” Hikvision was listed in the Annex to Executive Order 14032 and is currently on the CMIC List. However, Hikvision is not on the Specially Designated Nationals (SDN) List and the restrictions imposed by these Executive Orders are not expected to directly impact our business.

On November 11, 2021, President Biden signed into law the Secure Equipment Act of 2021, pursuant to which the U.S. Federal Communications Commission (“FCC”) adopted rules on November 11, 2022 clarifying that it will no longer review or approve any application for equipment authorization for equipment that is on the list of covered communications equipment or services published by the FCC under section 2(a) of the Secure and Trusted Communications Networks Act of 2019. Items on the FCC’s “covered list” include video surveillance and telecommunications equipment produced by Hikvision, to the extent it is used for the purpose of public safety, security of government facilities, physical security surveillance of critical infrastructure, and other national security purposes, including telecommunications or video surveillance services provided by such entity or using such equipment. The restrictions imposed by the FCC pursuant to the Secure Equipment Act of 2021 impact imports of certain Hikvision equipment into the United States by eliminating the ability of Hikvision to obtain FCC approval for its video surveillance and telecommunications equipment. In a pending rulemaking proceeding, the FCC is considering the adoption of new rules to revoke past authorization issued for Hikvision equipment, but the FCC actions taken to date are currently not expected to directly impact our business. This may or may not directly impact our revenue in the future. In the event there is an impact on our revenue, we believe that it would be gradual and limited in scope both because Hikvision continues to sell its currently approved products in the U.S. and because other manufacturers that incorporate our products could take market share from Hikvision in the U.S. We believe that our revenue would decrease only a few percentage points even if Hikvision’s business is fully impacted by the restrictions to be imposed by the FCC that limit Hikvision’s ability to import its future products into the U.S. Additionally, we plan to continue growing our revenue from new and existing customers, thus further limiting the impact of the restrictions to be imposed by the FCC that impact the importation of certain of Hikvision’s future products into the U.S.

The above conclusions are as of the date of filing of this Quarterly Report on Form 10-Q. It is possible that changes in U.S. regulations or policies in the future may impose restrictions, including the imposition of license requirements or even a full or partial prohibition, on our sale of products to Hikvision.

Key Factors Affecting Our Results of Operations

The following are key factors that impact our results of operations:

Macroeconomic and Geopolitical Conditions. We have been impacted by adverse macroeconomic and geopolitical conditions. These conditions include but are not limited to inflation, foreign currency fluctuations, and supply chain challenges. Management continues to actively monitor the impact of these conditions on the Company’s financial condition, liquidity, operations, end-customers (including its significant end-customers), distributors, suppliers, industry, and workforce. The extent to which such events impact the Company’s business, prospects and results of operations will depend on future developments, which are highly uncertain.

Ability to attract and retain customers that make large orders. While we expect the composition of our end-customers to change over time, our business and operating results depend on our ability to continually target new and retain existing end-customers that make large orders. Hikvision, the largest security surveillance manufacturer in China, is one of our significant end-customers, as previously noted. Although large customers can help us increase our revenue and improve our results of operations, reliance on large customers is a risk to our business. For example, Section 889 of the 2019 National Defense Authorization Act could adversely impact our business with Hikvision. Section 889(a)(1)(A) went into effect on August 13, 2019 and prohibits U.S. government agencies from procuring or obtaining equipment or services that use covered telecommunications equipment or services as a substantial or essential component or critical technology, including certain video surveillance products or telecommunications equipment and services produced or provided by Hikvision. On July 14, 2020, the U.S. government issued an interim final rule that implements Section 889(a)(1)(B) effective as of August 13, 2020. This rule prohibits the U.S. government from entering into contracts with persons who use covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system, which again includes certain of Hikvision’s video surveillance products. Although Section 889 does not prohibit commercial sales of video surveillance products by Hikvision in the U.S., which we understand is the predominant business Hikvision does in the U.S. with video surveillance products that incorporate our products, the impact of these new regulations and the uncertainty of U.S. and China trade relations may adversely impact our business in the future with Hikvision and other significant customers.

Design wins with new and existing customers. We believe our products provide high-quality HD video with an attractive combination of characteristics, at a lower overall cost than competing solutions. In order to get our solutions designed into our end-customer’s products, we work with our end-customers and potential end-customers to understand their product roadmaps and strategies. We consider design wins to be critical to our future success. We define a design win as the successful completion of the evaluation stage, where an end-customer has tested our product, verified that our product meets its requirements and qualified our integrated circuits for their products. We have secured design wins with major automotive manufacturers to sell our solutions to them for automotive backup cameras. The revenue that we generate, if any, from each design win can vary significantly. Our long-term sales expectations are based on forecasts from end-customers, internal estimates of end-customer demand factoring in expected time to market for end-customer products incorporating our solutions and associated revenue potential and internal estimates of overall demand based on historical trends.

Pricing, product cost and gross margins of our products. Our gross margin has been and will continue to be affected by a variety of factors, including the timing of changes in pricing, shipment volumes, new product introductions, changes in product mixes, changes in our purchase price of fabricated wafers and assembly and test service costs, manufacturing yields and inventory write downs, if any. In general, newly introduced products and products with higher performance and more features tend to be priced higher than older, more mature products. Average selling prices in the semiconductor industry typically decline as products mature. Consistent with the historical trend, we expect that the average selling prices of our products will, in the longer term, decline as our product lines mature. In the normal course of business, we will seek to offset the effect of declining average selling prices on existing products by reducing manufacturing costs and introducing new and higher value-added products. If we are unable to maintain overall average selling prices or offset any declines in average selling prices with realized savings on product costs, our gross margin will decline.

Product adoption and safety regulations in the automotive market. We have secured design wins with major automotive equipment manufacturers to sell our solutions to them for automotive backup cameras. Certain jurisdictions have passed laws and regulations requiring that all new cars sold after a certain date must contain back-up cameras, including with respect to cars sold in the United States after May 2018. If these jurisdictions do not maintain and implement these rules, or if back-up cameras are not put into automobiles sold in other locations as well, or do so more slowly than we expect, our financial results could be adversely affected.

Investment in growth. We have invested, and intend to continue to invest, in expanding our operations, increasing our headcount, developing our products and differentiated technologies to support our growth and expanding our infrastructure. We expect our total operating expenses to increase significantly in the foreseeable future to meet our growth objectives. We plan to continue to invest in our sales and support operations throughout the world, with a particular focus in the near term of adding additional sales and field applications personnel in the Asia-Pacific region to further broaden our support and coverage of our existing end-customer base, in addition to developing new end-customer relationships and generating design wins. We also intend to continue to invest additional resources in research and development to support the development of our products and differentiated technologies. Any investments we make in our sales and marketing organization, or research and development will occur in advance of experiencing any benefits from such investments, and the return on these investments may be lower than we expect. In addition, as we invest in expanding our operations into new areas internationally, our business and results will become further subject to the risks and challenges of operations in those locations, including potentially higher operating expenses and the impact of legal and regulatory developments.

Components of Condensed Consolidated Statements of Income

Revenue

We derive substantially all of our revenue through the sale of our products to distributors who, in turn, sell to our end-customers, which consists of OEM, ODM, contract manufacturers and design houses. Revenue is recognized in accordance with Accounting Standards Codification Topic 606 after we (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) satisfy the performance obligation when control is transferred to the customer.

Cost of Revenue

Cost of revenue primarily consists of costs paid to our third-party manufacturers for wafer fabrication, assembly and testing of our products. To a lesser extent, cost of revenue also includes write-downs of inventory for excess and obsolete inventory, depreciation of test equipment, and expenses relating to manufacturing support activities, including personnel-related costs, logistics and quality assurance and shipping.

Research and Development Expenses

Research and development expenses consist primarily of compensation and associated costs of employees engaged in research and development, contractor costs, tape-out costs, development testing and evaluation costs, and depreciation expense. Before releasing new products, we incur charges for mask sets, prototype wafers and mask set revisions, which we refer to as tape-out costs. Tape-out costs may cause our research and development costs to increase in absolute dollars in the future as we increase our investment in new product development and headcount to support our development efforts.

Selling, General and Administrative Expenses

Selling expenses consist primarily of personnel-related costs for our sales, business development, marketing, and applications engineering activities, promotional and other marketing expenses, and travel expenses. We expect selling expenses to increase in absolute dollars for the foreseeable future as we continue to expand our sales teams and increase our marketing activities. General and administrative expenses consist primarily of personnel-related costs, consulting expenses, professional fees and facility costs. Professional fees principally consist of legal, audit, tax and accounting services. We expect general and administrative expenses to increase in absolute dollars for the foreseeable future as we hire additional personnel, make improvements to our infrastructure and incur significant additional costs for the compliance requirements of operating as a U.S. company that is publicly traded in Japan, including higher legal, insurance and accounting expenses. Personnel-related costs, including salaries, benefits, bonuses and stock-based compensation, are the most significant component of each of selling expenses and general and administrative expenses.

Provision for Income Taxes

The provision for income taxes consists of our estimated federal, state and foreign income taxes based on our pre-tax income. Our provision differs from the federal statutory rate primarily due to the research and development credit, foreign derived intangible income deduction and stock-based compensation deduction.

Results of Operations

The following table sets forth our condensed consolidated results of operations for the periods shown (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Revenue	$	16,779	$	15,298	$	33,090	$	29,440
Cost of revenue (1)		8,070		7,071		15,585		13,568
Gross profit		8,709		8,227		17,505		15,872
Operating expenses: (1)
Research and development		1,835		1,431		3,918		3,543
Selling, general and administrative		2,604		2,663		5,125		4,893
Total operating expenses		4,439		4,094		9,043		8,436
Income from operations		4,270		4,133		8,462		7,436
Other income (expense), net		659		475		1,432		954
Income before income taxes		4,929		4,608		9,894		8,390
Provision for income taxes		593		558		1,178		964
Net income	$	4,336	$	4,050	$	8,716	$	7,426

(1)

Includes stock-based compensation expense as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Cost of revenue	$	27	$	40	$	57	$	76
Research and development		150		115		300		234
Selling, general and administrative		218		213		437		420
Total	$	395	$	368	$	794	$	730

The following table sets forth the condensed consolidated statements of income for each of the periods as a percentage of revenue:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Revenue		100	%		100	%		100	%		100	%
Cost of revenue		48			46			47			46
Gross profit		52			54			53			54
Operating expenses:
Research and development		11			9			12			12
Selling, general and administrative		16			17			15			17
Total operating expenses		27			26			27			29
Income from operations		25			28			26			25
Other income (expense), net		4			3			4			3
Income before income taxes		29			31			30			28
Provision for income taxes		4			4			4			3
Net income		25	%		27	%		26	%		25	%

Comparison of the Three and Six Months Ended June 30, 2024 and June 30, 2023

Revenue

The components of revenue are as follows (dollars in thousands):


	Three Months Ended June 30,				Change						Six Months Ended June 30,				Change
	2024		2023		Amount			%			2024		2023		Amount			%
Automotive	$	12,386	$	9,930	$	2,456			25	%	$	24,867	$	18,727	$	6,140			33	%
Security surveillance		4,393		5,368		(975	)		(18	)%	$	8,223		10,713		(2,490	)		(23	)%
Revenue	$	16,779	$	15,298	$	1,481			10	%	$	33,090	$	29,440	$	3,650			12	%

Revenue increased by $1.5 million, or 10%, for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. This was primarily attributable to a $2.5 million increase in automotive market revenue as a result of an increase in the volume of shipments. Security surveillance market revenue decreased by $1.0 million due to a decrease in the volume of shipments and a decrease in average selling prices attributable to product mix.

Revenue increased by $3.7 million, or 12%, for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. This was primarily attributable to a $6.1 million increase in automotive market revenue as a result of an increase in volume of shipments. Security surveillance market revenue decreased by $2.5 million due to a decrease in the volume of shipments and a decrease in average selling price attributable to product mix.

Our product pricing increases or decreases in our target markets in response to our increased or decreased manufacturing costs. Additionally, fluctuations in our overall average selling price are directly attributable to changes in product mix given the natural pricing variation of the products in our portfolio and customer base. When the product mix shifts towards the higher priced products in our portfolio, the average selling price will be higher than when the product mix shifts towards the lower price point products.

Revenue by geographic region

The table below sets forth revenue by geographic region as a percent of total revenue for the periods presented:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
China		74	%		73	%		74	%		74	%
Taiwan		15			15			15			14
South Korea		7			9			7			9
Japan		1			2			1			2
Other		3			1			3			1
Total		100	%		100	%		100	%		100	%

Cost of revenue and gross margin (dollars in thousands)


	Three Months Ended June 30,						Change					Six Months Ended June 30,						Change
	2024			2023			Amount		%			2024			2023			Amount		%
Cost of revenue	$	8,070		$	7,071		$	999		14	%	$	15,585		$	13,568		$	2,017		15	%
Gross margin		52	%		54	%							53	%		54	%

Cost of revenue increased by $1.0 million, or 14%, for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, and gross margin decreased to 52% from 54% for the three months ended June 30, 2024 and 2023. Cost of revenue increased by $2.0 million, or 15%, and gross margin decreased to 53% from 54% for the six months ended June 30, 2024 and 2023, respectively. Gross margin for the three months and six months ended June 30, 2024 was impacted by changes in product mix. We expect gross margins to fluctuate in future periods due to changes in customer and product mix, average unit selling prices, manufacturing costs, adjustments to inventory, if any, and end market product demand.

Research and development expense (dollars in thousands)


	Three Months Ended June 30,				Change					Six Months Ended June 30,				Change
	2024		2023		Amount		%			2024		2023		Amount		%
Research and development	$	1,835	$	1,431	$	404		28	%	$	3,918	$	3,543	$	375		11	%

Research and development expenses increased by $0.4 million, or 28%, for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily due to a $0.2 million increase in tape-out expenses associated with the development of new products, a $0.1 million increase in design software expenses, and a $0.1 million increase in personnel-related expenses due to the increase in headcount as a result of expanding operations.

Research and development expenses increased by $0.4 million, or 11 %, for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to a $0.4 million increase in personnel-related expenses due to the increase in headcount as a result of expanding operations, a $0.2 million increase in design software expenses, and a $0.1 million increase in stock-based compensation, partially offset by a $0.3 million decrease in tape-out expenses associated with the development of new products.

Selling, general and administrative expense (dollars in thousands)


	Three Months Ended June 30,				Change						Six Months Ended June 30,				Change
	2024		2023		Amount			%			2024		2023		Amount		%
Selling, general and administrative	$	2,604	$	2,663	$	(59	)		(2	)%	$	5,125	$	4,893	$	232		5	%

Selling, general and administrative expenses remained flat with immaterial change for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023.

Selling, general and administrative expenses increased by $0.2 million, or 5%, for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, due to a $0.3 million increase in personnel-related expenses, and $0.1 million increase in other administrative expenses, partially offset by a $0.2 million decrease in professional service cost.

Other income, net (dollars in thousands)


	Three Months Ended June 30,				Change					Six Months Ended June 30,				Change
	2024		2023		Amount		%			2024		2023		Amount		%
Other income, net	$	659	$	475	$	184		39	%	$	1,432	$	954	$	478		50	%

Other income, net increased by $0.2 million, or 39%, for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily due to an increase in interest income, and gain related to foreign currency exchange transactions and foreign currency fluctuations.

Other income, net increased $0.5 million, or 50%, for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to a $0.4 million increase in interest income and gain related to foreign currency exchange transactions and foreign currency fluctuations, and a $0.1 million increase due to reimbursement of fixed asset purchased and depreciated previously.

Provision for income taxes (dollars in thousands)


	Three Months Ended June 30,				Change					Six Months Ended June 30,				Change
	2024		2023		Amount		%			2024		2023		Amount		%
Provision for income taxes	$	593	$	558	$	35		6	%	$	1,178	$	964	$	214		22	%

The provision for income taxes remained flat with immaterial change for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023.

The provision for income taxes increased by $0.2 million, or 22%, for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to an increase in profit before taxes.

Liquidity and Capital Resources

Our primary use of cash is to fund our operations as we continue to grow our business. Cash used to fund operating expenses is impacted by the timing of when we pay expenses, as reflected in the changes in our outstanding accounts payable and accrued expenses. Our cash, cash equivalents, and short-term investments as of June 30, 2024 were $67.5 million. We believe our existing cash, cash equivalents, short-term investments, and cash we expect to generate from operations in the future will be sufficient to meet our anticipated cash needs for at least the next 12 months.

In 2021, our board of directors adopted a dividend policy to link dividend payments to business performance on an ongoing basis. During the six months ended June 30, 2024, cash used in financing activities consists primarily of $4.6 million in dividend payments to holders of our common stock (including common stock underlying JDS) under this recently adopted dividend policy.

Our future capital requirements will depend on many factors, including our growth rate, the timing and extent of our spending to support research and development activities, the timing and cost of establishing additional sales and marketing capabilities, the introduction of new and enhanced products and our costs to implement new manufacturing technologies or potentially acquire and integrate other companies or assets. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. Any debt financing obtained by us in the future could also involve restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. Additionally, if we raise additional funds through further issuances of equity, or issue convertible debt securities or other securities convertible into equity, our existing stockholders could suffer significant dilution in their percentage ownership, and any new equity securities we issue could have rights, preferences and privileges senior to those of holders of our common stock. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited.

A summary of operating, investing and financing activities are shown in the following table (in thousands):


	Six Months Ended
	June 30,
	2024			2023
Net cash provided by operating activities	$	5,353		$	7,560
Net cash provided by investing activities		9,155			2,954
Net cash used in financing activities		(4,602	)		(4,592	)
Net increase in cash and cash equivalents	$	9,906		$	5,922

Operating Activities

Our primary source of cash from operating activities has been from cash collections from our customers. We expect cash flows from operating activities to be affected by fluctuations in sales. Our primary uses of cash from operating activities have been for personnel costs and investments in research and development and sales and marketing.

During the six months ended June 30, 2024, net cash provided by operating activities was $5.4 million, due to net income of $8.7 million, net adjustments from non-cash charges of a $0.1 million deduction and net cash outflows from changes in operating assets and liabilities of $3.2 million.

Net adjustments from non-cash charges of a $0.1 million deduction primarily consisted of accretion of premium on available-for-sale investments of $0.7 million, an increase in deferred tax assets of $0.5 million, and gain on disposal of fixed asset of $0.1 million, partially offset by stock-based compensation of $0.8 million, and amortization of operating lease right-of-use assets of $0.4 million.

Net cash outflows from changes in operating assets and liabilities totaled $3.2 million, primarily consisting of a $2.8 million increase in inventory, net of valuation adjustment, as units manufactured during the period and on hand were in excess of product sales, a $0.7 million decrease in customer deposit, and a $0.2 million decrease in other liabilities. Outflows were partially offset by the inflow from a $0.7 million increase in accrued liabilities.

During the six months ended June 30, 2023, net cash provided by operating activities was $7.6 million, primarily due to net income of $7.4 million, non-cash charges of $0.5 million and net cash outflows from changes in operating assets and liabilities of $0.4 million. Non-cash charges primarily consisted of stock-based compensation of $0.7 million, amortization of operating lease

right-of-use assets of $0.3 million, an increase in the inventory valuation adjustment of $0.2 million, and depreciation of $0.2 million, partially offset by an increase in deferred tax assets of $0.6 million, and accretion of premium on available-for-sale investments of $0.3 million.

Net cash outflows from changes in operating assets and liabilities totaled $0.4 million, primarily consisting of a $0.3 million decrease in account payable and accrued liabilities due to the timing of customer payments, a $0.2 million decrease in other liabilities, and a $0.2 million increase in prepaid expense and other current asset due to timing of payments, partially offset by a $0.3 million decrease in inventory, as units manufactured during the period and on hand were less than product sales.

Investing Activities

During the six months ended June 30, 2024, cash provided by investing activities was $9.2 million, primarily attributable to proceeds from maturity of debt securities, net of investments in debt securities.

During the six months ended June 30, 2023, cash provided by investing activities was $3.0 million, primarily attributable to proceeds from maturity of debt securities, net of investments in debt securities.

Financing Activities

During the six months ended June 30, 2024, cash used in financing activities was approximately $4.6 million, primarily due to the outflow of $4.6 million in dividend payments.

During the six months ended June 30, 2023, cash used in financing activities was approximately $4.6 million, primarily due to the payment of $4.6 million in dividend payments.

Contractual Obligations

Our outstanding contractual obligations as of June 30, 2024 are summarized in the following table (in thousands):


			Payments Due by Period
	Total		Less than 1 year		1 to 3 years
Purchase commitments	$	1,719		1,135		584
Operating leases		850		488		362

Obligations under contracts that we can cancel without a significant penalty are not included in the table above. We believe our cash provided by operations is sufficient to satisfy our contractual obligations for all periods presented.

Off-Balance Sheet Arrangements

During the periods presented, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies, Significant Estimates and Judgments

Our financial statements are prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. We evaluate our estimates, assumptions, and judgments on an ongoing basis. Our estimates, assumptions and judgments are based on historical experience and various other factors that we believe to be reasonable under the circumstances. Different assumptions and judgments would change the estimates used in the preparation of our financial statements, which, in turn, could change the results from those reported. Please see Note 1 of Part I, Item 1 of this Quarterly Report on Form 10-Q for a summary of significant accounting policies and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for a summary of our critical accounting estimates.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risk from fluctuations in foreign currency exchange rates and interest rates, which may adversely affect our results of operations and financial condition. We seek to minimize these risks through regular operating activities. We do not purchase, hold or sell derivative financial instruments for trading or speculative purposes.

Foreign exchange rates

We transact business globally and are subject to risks associated with fluctuating foreign exchange rates. Substantially all of our revenue was derived from sales outside of the U.S. in the six months ended June 30, 2024 and 2023. This revenue is generated in U.S. dollars with sales through distributors worldwide. Our operating expenses are denominated in the currencies of the countries in which our subsidiaries are located and may be subject to fluctuations due to changes in foreign currency exchange rates. To date, we have not entered into any hedging contracts, but may elect to do so in the future. A hypothetical increase or decrease of 10% in foreign exchange rates for the six months ended June 30, 2024 and 2023 would not have resulted in a significant increase or decrease in revenue or net income during that period.

The U.S. dollar is the functional currency for all of our foreign operations. Monetary assets and liabilities denominated in foreign currencies are remeasured into the functional currency of the subsidiary at the balance sheet date. The gains and losses from remeasurement of foreign currency denominated balances into the functional currency of the subsidiary are included in other income (expense), net on our condensed consolidated statements of income and comprehensive income.

Interest rates

Our exposure to market risk for changes in interest rates relates primarily to our cash, cash equivalents and investments. Our cash, cash equivalents and investments consist primarily of cash, U.S. treasury bills, government agency bonds, money market funds, corporate notes and bonds, and commercial paper. The primary objectives of our investment activities are the preservation of capital, the maintenance of liquidity, and capturing a market rate of return. We seek to minimize risk by investing cash in excess of our operating needs in high-quality instruments issued by highly creditworthy financial institutions. We do not purchase investments for trading or speculative purposes. Due to the nature of these instruments, we believe that we do not have any material exposure to

changes in the fair value of our investment portfolio as a result of changes in interest rates. Decreases in interest rates, however, would reduce future interest income.

A hypothetical increase or decrease of 10% in interest rates in the six months ended June 30, 2024 and 2023 would not have resulted in a significant increase or decrease in cash, cash equivalents or the fair value of our investment during those periods.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on management’s evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective at a reasonable assurance level.

In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

Although we are not currently a party to any legal proceedings, and no legal proceeding is currently threatened against us, we may be subject to legal proceedings, claims and litigation, including intellectual property litigation, arising in the ordinary course of business. Such matters are subject to many uncertainties and outcomes and are not predictable with assurance. We accrue amounts that we believe are adequate to address any liabilities related to legal proceedings and other loss contingencies that we believe may result in a probable loss that is reasonably estimable.

Item 1A. Risk Factors.

There have been no material changes to the previously disclosed risk factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023. You should consider carefully these factors, together with all of the other information in this Quarterly Report on Form 10-Q, including our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, before making an investment decision.

Item 5. Other Information.

During the three months ended June 30, 2024, no director or officer adopted or terminated any contract, instruction or written plan for the purchase or sale of securities of the Company pursuant to Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).

Item 6. Exhibits.


Exhibit Number		Description

31.1		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a).

31.2		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a).

32.1*		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

# Indicates management contract or compensatory plan or arrangement.

* In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act or deemed to be incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933 except to the extent that the registrant specifically incorporates it by reference.

SIGNATURES

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 thereunto duly authorized.


	Techpoint, Inc.

Date: August 9, 2024	By:	/s/ Fumihiro Kozato
		Fumihiro Kozato
		President and Chief Executive Officer (Principal Executive Officer)

Date: August 9, 2024	By:	/s/ Michelle P. Ho
		Michelle P. Ho
		Interim Chief Financial Officer (Principal Financial Officer)

Exhibit 31.1

PRINCIPAL EXECUTIVE OFFICER’S CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Fumihiro Kozato, certify that:

I have reviewed this Quarterly Report on Form 10-Q of Techpoint, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: August 9, 2024	By:	/s/ Fumihiro Kozato
		Fumihiro Kozato
		President and Chief Executive Officer (Principal Executive Officer)

Exhibit 31.2

PRINCIPAL FINANCIAL OFFICER’S CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michelle P. Ho, certify that:

I have reviewed this Quarterly Report on Form 10-Q of Techpoint, Inc.;

(a)

(b)

(c)

(d)

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: August 9, 2024	By:	/s/ Michelle P. Ho
		Michelle P. Ho
		Interim Chief Financial Officer (Principal Financial Officer)

Exhibit 32.1

PRINCIPAL EXECUTIVE OFFICER’S CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Techpoint, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Fumihiro Kozato, the Chief Executive Officer of the Company certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: August 9, 2024	By:	/s/ Fumihiro Kozato
		Fumihiro Kozato
		President and Chief Executive Officer (Principal Executive Officer)

Exhibit 32.2

PRINCIPAL FINANCIAL OFFICER’S CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Techpoint, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Micelle P. Ho certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: August 9, 2024	By:	/s/ Michelle P. Ho
		Michelle P. Ho
		Interim Chief Financial Officer (Principal Financial Officer)

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2024	Aug. 01, 2024
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2024
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Entity Registrant Name	Techpoint, Inc.
Entity Central Index Key	0001556898
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity File Number	000-55843
Entity Tax Identification Number	80-0806545
Entity Address, Address Line One	2550 N. First Street
Entity Address, Address Line Two	#550
Entity Address, City or Town	San Jose
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	USA 95131
Entity Address, Country	US
City Area Code	408
Local Phone Number	324-0588
Entity Common Stock, Shares Outstanding		18,550,521
Entity Interactive Data Current	Yes
Entity Incorporation, State or Country Code	DE
Document Quarterly Report	true
Document Transition Report	false
Japanese Depositary Shares \| Japan Exchange Group
Document Information [Line Items]
Trading Symbol	0001556898
Title of 12(b) Security	Japanese Depositary Shares, each representing one
Common Stock, Par Value
Document Information [Line Items]
Trading Symbol	0001556898
Title of 12(b) Security	Common Stock, $0.0001 par value per share

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 23,577	$ 13,671
Short-term investments	43,928	51,788
Accounts receivable	178	40
Inventory	12,259	9,518
Prepaid expenses and other current assets	1,077	939
Total current assets	81,019	75,956
Property and equipment, net	404	522
Deferred tax assets	4,142	3,620
Right-of-use assets	739	1,045
Goodwill	891	891
Intangible assets, net	981	1,036
Long-term investments		500
Other assets	157	237
Total assets	88,333	83,807
Current liabilities:
Accounts payable	1,517	1,707
Accrued liabilities	3,316	2,322
Customer deposits	771	1,448
Lease liabilities	433	497
Dividend payable	4,626	4,599
Total current liabilities	10,663	10,573
Other liabilities	474	939
Total liabilities	11,137	11,512
Commitments and contingencies (Note 5)
Stockholders’ equity
Preferred stock, par value $0.0001 per share - 5,000,000 shares authorized as of June 30, 2024 and December 31, 2023; nil shares issued and outstanding as of June 30, 2024 and December 31, 2023
Common stock, par value $0.0001 per share - 75,000,000 shares authorized as of June 30, 2024 and December 31, 2023; 18,507,490 and 18,395,682 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively	2	2
Additional paid-in capital	28,272	27,477
Accumulated other comprehensive loss	39	18
Retained earnings	48,883	44,798
Total stockholders’ equity	77,196	72,295
Total liabilities and stockholders’ equity	$ 88,333	$ 83,807

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	75,000,000	75,000,000
Common stock, shares issued	18,507,490	18,395,682
Common stock, shares outstanding	18,507,490	18,395,682

Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Statement of Comprehensive Income [Abstract]
Revenue	$ 16,779	$ 15,298	$ 33,090	$ 29,440
Cost of revenue	8,070	7,071	15,585	13,568
Gross profit	8,709	8,227	17,505	15,872
Operating expenses
Research and development	1,835	1,431	3,918	3,543
Selling, general and administrative	2,604	2,663	5,125	4,893
Total operating expenses	4,439	4,094	9,043	8,436
Income from operations	4,270	4,133	8,462	7,436
Other income, net	659	475	1,432	954
Income before income taxes	4,929	4,608	9,894	8,390
Provision for income taxes	593	558	1,178	964
Net income	$ 4,336	$ 4,050	$ 8,716	$ 7,426
Net income per share:
Basic	$ 0.23	$ 0.22	$ 0.47	$ 0.41
Diluted	$ 0.23	$ 0.22	$ 0.46	$ 0.40
Weighted average shares outstanding used in computing net income per share
Basic	18,464,483	18,294,629	18,452,766	18,263,029
Diluted	18,866,543	18,605,638	18,906,959	18,590,921
Comprehensive income:
Net Income (Loss)	$ 4,336	$ 4,050	$ 8,716	$ 7,426
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on available-for-sale debt securities, net of tax (expense) benefit of ($5), $8, ($6) and $0 for the three and six months ended June 30, 2024 and 2023, respectively	17	(31)	21	1
Comprehensive income	$ 4,353	$ 4,019	$ 8,737	$ 7,427

Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Statement of Comprehensive Income [Abstract]
Unrealized gain (loss) on available-for-sale debt securities, net of tax (expense) benefit	$ (5)	$ 8	$ (6)	$ 0

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings
Beginning Balances at Dec. 31, 2022	$ 62,076	$ 2	$ 26,046	$ (147)	$ 36,175
Beginning Balances, Shares at Dec. 31, 2022		18,198,737
Other comprehensive income (loss) - unrealized gain (loss) on available-for-sale debt securities	32			32
Issuance of common stock upon exercise of stock options	29		29
Issuance of common stock upon exercise of stock options, shares		24,600
Issuance of common stock upon vesting of restricted stock units, Shares		32,425
Shares repurchased for tax withholdings on vesting of restricted stock units	(35)		(35)
Shares repurchased for tax withholdings on vesting of restricted stock units, Shares		(4,636)
Stock-based compensation	362		362
Cash dividends adjustments / declared	(4)				(4)
Net Income (Loss)	3,376				3,376
Ending Balances at Mar. 31, 2023	65,836	$ 2	26,402	(115)	39,547
Ending Balances, Shares at Mar. 31, 2023		18,251,126
Beginning Balances at Dec. 31, 2022	62,076	$ 2	26,046	(147)	36,175
Beginning Balances, Shares at Dec. 31, 2022		18,198,737
Net Income (Loss)	7,426
Ending Balances at Jun. 30, 2023	65,609	$ 2	26,739	(146)	39,014
Ending Balances, Shares at Jun. 30, 2023		18,330,591
Beginning Balances at Mar. 31, 2023	65,836	$ 2	26,402	(115)	39,547
Beginning Balances, Shares at Mar. 31, 2023		18,251,126
Other comprehensive income (loss) - unrealized gain (loss) on available-for-sale debt securities	(31)			(31)
Issuance of common stock upon exercise of stock options	10		10
Issuance of common stock upon exercise of stock options, shares		3,250
Issuance of common stock upon vesting of restricted stock units, Shares		82,325
Shares repurchased for tax withholdings on vesting of restricted stock units	(41)		(41)
Shares repurchased for tax withholdings on vesting of restricted stock units, Shares		(6,110)
Stock-based compensation	368		368
Cash dividends adjustments / declared	(4,583)				(4,583)
Net Income (Loss)	4,050				4,050
Ending Balances at Jun. 30, 2023	65,609	$ 2	26,739	(146)	39,014
Ending Balances, Shares at Jun. 30, 2023		18,330,591
Beginning Balances at Dec. 31, 2023	72,295	$ 2	27,477	18	44,798
Beginning Balances, Shares at Dec. 31, 2023		18,395,682
Other comprehensive income (loss) - unrealized gain (loss) on available-for-sale debt securities	4			4
Issuance of common stock upon exercise of stock options	57		57
Issuance of common stock upon exercise of stock options, shares		13,000
Issuance of common stock upon vesting of restricted stock units, Shares		27,575
Shares repurchased for tax withholdings on vesting of restricted stock units	(39)		(39)
Shares repurchased for tax withholdings on vesting of restricted stock units, Shares		(3,807)
Stock-based compensation	399		399
Cash dividends adjustments / declared	(5)				(5)
Net Income (Loss)	4,380				4,380
Ending Balances at Mar. 31, 2024	77,091	$ 2	27,894	22	49,173
Ending Balances, Shares at Mar. 31, 2024		18,432,450
Beginning Balances at Dec. 31, 2023	72,295	$ 2	27,477	18	44,798
Beginning Balances, Shares at Dec. 31, 2023		18,395,682
Net Income (Loss)	8,716
Ending Balances at Jun. 30, 2024	77,196	$ 2	28,272	39	48,883
Ending Balances, Shares at Jun. 30, 2024		18,507,490
Beginning Balances at Mar. 31, 2024	77,091	$ 2	27,894	22	49,173
Beginning Balances, Shares at Mar. 31, 2024		18,432,450
Other comprehensive income (loss) - unrealized gain (loss) on available-for-sale debt securities	17			17
Issuance of common stock upon exercise of stock options	15		15
Issuance of common stock upon exercise of stock options, shares		15,000
Issuance of common stock upon vesting of restricted stock units, Shares		63,862
Shares repurchased for tax withholdings on vesting of restricted stock units	(32)		(32)
Shares repurchased for tax withholdings on vesting of restricted stock units, Shares		(3,822)
Stock-based compensation	395		395
Cash dividends adjustments / declared	(4,626)				(4,626)
Net Income (Loss)	4,336				4,336
Ending Balances at Jun. 30, 2024	$ 77,196	$ 2	$ 28,272	$ 39	$ 48,883
Ending Balances, Shares at Jun. 30, 2024		18,507,490

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares			3 Months Ended
	Dec. 15, 2023	Dec. 16, 2022	Jun. 30, 2024	Jun. 30, 2023
Statement of Stockholders' Equity [Abstract]
Cash dividends declared per share	$ 0.5	$ 0.5	$ 0.25	$ 0.25

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash Flows From Operating Activities
Net income	$ 8,716	$ 7,426
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	182	201
Stock-based compensation	794	730
Accretion of premium on available-for-sale investments	(740)	(318)
Gain on disposal of fixed asset	(132)
Inventory valuation adjustment	50	218
Deferred income taxes	(511)	(597)
Noncash lease expense	364	303
Unrealized gain	(143)
Changes in operating assets and liabilities:
Accounts receivable	(138)	(83)
Inventory	(2,791)	345
Prepaid expenses and other current assets	(88)	(186)
Other assets	80	10
Accounts payable	(1)	(788)
Accrued liabilities	694	514
Customer deposits	(677)	101
Lease liabilities	(122)	(80)
Other liabilities	(184)	(236)
Net cash provided by operating activities	5,353	7,560
Cash Flows From Investing Activities
Purchase of property and equipment	(66)	(111)
Purchases of debt securities	(28,618)	(8,035)
Proceeds from maturities of debt securities	37,839	11,100
Net cash provided by investing activities	9,155	2,954
Cash Flows From Financing Activities
Payment of dividends	(4,603)	(4,555)
Net proceeds from exercise of stock options	72	39
Payment for shares withheld for tax withholdings on vesting of restricted stock units	(71)	(76)
Net cash used in financing activities	(4,602)	(4,592)
Net increase in cash and cash equivalents	9,906	5,922
Cash and cash equivalents at beginning of period	13,671	19,392
Cash and cash equivalents at end of period	23,577	25,314
Supplemental Disclosure of Cash Flow Information
Cash paid for income taxes	2,305	1,589
Supplemental Disclosure of Noncash Investing and Financing Information
Right-of-use assets obtained in exchange for lease liabilities	58	26
Property and equipment purchased but not yet paid		32
Vender credit received upon disposal of fixed asset	58
Cash dividend declared but not yet paid	$ 4,626	$ 4,583

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ 4,336	$ 4,380	$ 4,050	$ 3,376	$ 8,716	$ 7,426

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Jun. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Organization and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Summary of Significant Accounting Policies

1. Organization and Summary of Significant Accounting Policies

Organization

Basis of Consolidation and Significant Accounting Policies

Revenue Recognition

Use of Management’s Estimates

Certain Significant Risks and Uncertainties

Concentration of Customer and Credit Risk

For each significant customer, or distributor, and significant end-customer, revenue as a percentage of total revenue was as follows:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Customer
Customer A		34	%		44	%		35	%		45	%
Customer B		13	%	*				12	%	*
End-Customer
End-Customer A (1)		20	%		26	%		18	%		26	%

* Less than 10%

(1)

Sales to End-Customer A primarily occurred through Customer A.

Concentration of Supplier Risk

Recently Issued Accounting Pronouncements Not Yet Adopted

Reclassification

Balance Sheet Components

6 Months Ended

Jun. 30, 2024

Balance Sheet Related Disclosures [Abstract]

Balance Sheet Components

2. Balance Sheet Components

Inventory

Inventory consists of the following (in thousands):


	June 30,		December 31,
	2024		2023
Work in process	$	7,984	$	4,795
Finished goods		4,275		4,723
Total inventory	$	12,259	$	9,518

Property and Equipment, net

Property and equipment, net consists of the following (in thousands):


	June 30,			December 31,
	2024			2023
Machinery, computer equipment and software	$	2,633		$	2,759
Leasehold improvements		94			94
Furniture		38			36
Total property and equipment		2,765			2,889
Less: accumulated depreciation		(2,361	)		(2,367	)
Total property and equipment, net	$	404		$	522

Goodwill and Intangible assets, net

Changes in the carrying amount of goodwill for the six months ended June 30, 2024 are as follows (in thousands):

Intangible assets, except goodwill consist of the following (in thousands):

The amortization expenses of intangible assets were $54,000 and nil for the six months ended June 30, 2024 and 2023, respectively.


Year Ending December 31,	Amount
Remainder of 2024	$	55
2025		109
2026		109
2027		109
2028		109
Thereafter		490
Total	$	981

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):


	June 30,		December 31,
	2024		2023
Payroll-related expenses	$	2,191	$	983
Engineering service		397		199
Security for the indemnification obligations (1)		300		—
Accrued warranty		158		180
Accrued inventory		116		401
Taxes payable		89		468
Professional fees		20		23
Other		45		68
Total accrued liabilities	$	3,316	$	2,322

Customer Deposits

Fair Value Measurements of Financial Instruments

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements of Financial Instruments

3. Fair Value Measurements of Financial Instruments

Summary of Financial Instruments

The following is a summary of financial instruments (in thousands):



	June 30, 2024
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Values
Available-for-sale securities:
Certificates of deposit	$	1,924	$	—	$	(1	)	$	1,923
U.S.Treasury bills and notes		35,458	94			(25	)		35,527
Government agency bonds		518		—		(1	)		517
Corporate bonds		6,977		—		(18	)		6,959
Total available-for-sale securities	$	44,877	$	94	$	(45	)	$	44,926
Reported in:
Cash and cash equivalents								$	998
Short-term investments									43,928
Long-term investments									—
Total available-for-sale securities								$	44,926



	December 31, 2023
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Values
Available-for-sale securities:
Certificates of deposit	$	3,633	$	1	$	—		$	3,634
U.S.Treasury bills and notes		37,624	76			—			37,700
Government agency bonds		2,600		—		(3	)		2,597
Corporate bonds		11,504		—		(51	)		11,453
Total available-for-sale securities	$	55,361	$	77	$	(54	)	$	55,384
Reported in:
Cash and cash equivalents								$	3,096
Short-term investments									51,788
Long-term investments									500
Total available-for-sale securities								$	55,384

The contractual maturities of available-for-sale securities are presented in the following table (in thousands):



	June 30, 2024				December 31, 2023
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	44,877	$	44,926	$	54,859	$	54,884
Due between one to two years		—		—		502		500
	$	44,877	$	44,926	$	55,361	$	55,384

There were no sales of available-for-sale securities for the six months ended June 30, 2024 and 2023.

Fair Value Measurements

Level 1. Quoted prices in active markets for identical assets or liabilities.

Financial assets measured at fair value on a recurring basis were as follows (in thousands):


	Fair Value Measurement at Reporting Date Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total
As of June 30, 2024
Financial assets - available-for-sale securities
Certificates of deposit	$	—	$	1,923	$	1,923
U.S.Treasury bills and notes		—		35,527		35,527
Governmental agency bonds		—		517		517
Corporate bonds		6,959		—		6,959
Total financial assets - available-for-sale securities	$	6,959	$	37,967	$	44,926

As of December 31, 2023
Financial assets - available-for-sale securities
Certificates of deposit	$	—	$	3,634	$	3,634
U.S.Treasury bills and notes		2,198		35,502		37,700
Governmental agency bonds		600		1,997		2,597
Corporate bonds		10,953		500		11,453
Total financial assets - available-for-sale securities	$	13,751	$	41,633	$	55,384

Segment Information

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Segment Information

4. Segment Information

Product revenue from customers is designated based on the geographic region to which the product is delivered. Revenue by geographic region was as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
China	$	12,410	$	11,233	$	24,637	$	21,752
Taiwan		2,445		2,291		4,785		4,062
South Korea		1,221		1,390		2,382		2,763
Japan		170		326		362		707
Other		533		58		924		156
Total revenue	$	16,779	$	15,298	$	33,090	$	29,440

Revenue by principal product lines was as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Automotive	$	12,386	$	9,930	$	24,867	$	18,727
Security surveillance		4,393		5,368		8,223		10,713
Total revenue	$	16,779	$	15,298	$	33,090	$	29,440

Long-lived assets by geographic region were as follows (in thousands):


	June 30,		December 31,
	2024		2023
Taiwan	$	280	$	308
China		100		176
United States		13		29
South Korea		8		6
Japan		3		3
Total property and equipment, net	$	404	$	522

Commitments and Contingencies

6 Months Ended

Jun. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

5. Commitments and Contingencies

Operating leases

The right-of-use assets and lease liabilities related to operating leases were as follows (in thousands):


	June 30,		December 31,
	2024		2023
Right-of-use assets	$	739	$	1,045

Lease liabilities - Current	$	433	$	497
Lease liabilities - Non-Current		346		531
Total lease liabilities	$	779	$	1,028

The following tables summarize the Company’s lease costs and weighted-average assumptions used in determining its right-of-use assets and lease liabilities (in thousands):


	Six Months Ended			Six Months Ended
	June 30, 2024			June 30, 2023
Operating lease cost	$	393		$	380
Cash paid for operating leases	$	336		$	385
Right-of-use assets obtained in exchange for operating lease liabilities (1)	$	58		$	26
Weighted average remaining term for operating leases	1.73 years			0.92 years
Weighted average discount rate for operating leases		8.2	%		5.8	%

As of June 30, 2024, the aggregate future minimum lease payments under non-cancelable operating leases consist of the following (in thousands):


Year Ending December 31,	Amount
2024 (remaining six months)	$	276
2025		417
2026		157
Total		850
Less effects of discounting		(71	)
Total lease liabilities	$	779

Purchase Commitments

Litigation

Indemnification

Stockholders' Equity

6 Months Ended

Jun. 30, 2024

Equity [Abstract]

Stockholders' Equity

6. Stockholders’ Equity

Preferred Stock

Common Stock

The Company has reserved the following number of shares of common stock for future issuances:



	June 30, 2024
Outstanding stock awards		980,469
Shares available for future issuance under the 2017 Stock Incentive Plan		7,016,775
Total common stock reserved for future issuances		7,997,244

Dividend

Equity Incentive Plans

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Equity Incentive Plans

7. Equity Incentive Plans

Stock Incentive Plans

The 2012 Plan was superseded by a 2017 Stock Option Plan (“2017 Plan”). Any outstanding awards under the 2012 Plan will continue to be governed by the terms of the 2012 Plan.

The Company’s stock award activity under the 2017 Plan is summarized as follows:


	Awards Available for Grant
As of December 31, 2023		7,057,446
Authorized		—
Granted		(58,000	)
Canceled		17,329
As of June 30, 2024		7,016,775

Stock Options

The Company’s stock option activity under the 2017 Plan is summarized as follows:


	Options Issued and Outstanding			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (in thousands)
As of December 31, 2023		431,081		$	2.81		3.3	$	3,305
Granted		—			—
Exercised		(28,000	)		2.56
Canceled		—			—
As of June 30, 2024		403,081			2.82		2.8		1,992
Options vested and exercisable as of June 30, 2024		403,081			2.82		2.8		1,992

The stock options outstanding and exercisable by exercise price as of June 30, 2024 are as follows:


		Options Outstanding, Vested and Exercisable
Exercise Price		Number Outstanding		Weighted- Average Remaining Contractual Life (Years)		Weighted- Average Exercise Price
$	0.37		10,000		1.1	$	0.37
	0.97		8,000		1.4		0.97
	2.51		46,780		2.2		2.51
	2.89		40,000		2.7		2.89
	2.93		218,734		3.0		2.93
	3.18		79,567		3.1		3.18
			403,081		2.8		2.82

Restricted Stock Units

The Company’s restricted stock units activity is summarized as follows:


	Units Issued and Outstanding			Weighted-Average Grant Date Fair Value
As of December 31, 2023		620,525		$	7.63
Granted		58,000			8.28
Released, net		(83,808	)		8.90
Canceled		(17,329	)		9.45
As of June 30, 2024		577,388			7.65

Stock-Based Compensation

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

8. Stock-Based Compensation

The following table summarizes the distribution of stock-based compensation expense (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Cost of revenue	$	27	$	40	$	57	$	76
Research and development		150		115		300		234
Selling, general and administrative		218		213		437		420
Total	$	395	$	368	$	794	$	730

Net Income Per Share

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Net Income Per Share

9. Net Income Per Share

The following table presents the calculation of basic and diluted net income per share (amounts in thousands, except share and per share data):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Numerator:
Basic and Diluted:
Net income	$	4,336	$	4,050	$	8,716	$	7,426
Denominator:
Basic shares:
Weighted-average shares outstanding used in computing basic net income per share		18,464,483		18,294,629		18,452,766		18,263,029
Diluted shares:
Effect of potentially dilutive securities:
Stock options and restricted stock units		402,060		311,009		454,193		327,892
Weighted-average shares used in computing diluted net income per share		18,866,543		18,605,638		18,906,959		18,590,921
Net income per share:
Basic	$	0.23	$	0.22	$	0.47	$	0.41
Diluted	$	0.23	$	0.22	$	0.46	$	0.40

Provision for Income Taxes

6 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Provision for Income Taxes

10. Provision for Income Taxes

The components of income before income taxes were as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Domestic	$	4,859	$	4,599	$	9,762	$	8,321
Foreign		70		9		132		69
Income before income taxes	$	4,929	$	4,608	$	9,894	$	8,390

The components of the provision for income taxes were as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
United States	$	582	$	556	$	1,159	$	956
Foreign		11		2		19		8
Provision for income taxes	$	593	$	558	$	1,178	$	964

As of June 30, 2024, there was no material increase in the liability for unrecognized tax benefits and no accrued interest or penalties related to uncertain tax positions.

Organization and Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Basis of Consolidation and Significant Accounting Policies

Revenue Recognition

Use of Management's Estimates

Use of Management’s Estimates

Certain Significant Risks and Uncertainties

ertain Significant Risks and Uncertainties

Concentration of Customer and Credit Risk

For each significant customer, or distributor, and significant end-customer, revenue as a percentage of total revenue was as follows:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Customer
Customer A		34	%		44	%		35	%		45	%
Customer B		13	%	*				12	%	*
End-Customer
End-Customer A (1)		20	%		26	%		18	%		26	%

* Less than 10%

(1)

Sales to End-Customer A primarily occurred through Customer A.

Concentration of Supplier Risk

Recently Issued Accounting Pronouncements Not Yet Adopted

Reclassification

Organization and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Revenue as Percentage of Total Revenue for Each Significant Customer, or Distributor, and Significant End-Customer

For each significant customer, or distributor, and significant end-customer, revenue as a percentage of total revenue was as follows:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Customer
Customer A		34	%		44	%		35	%		45	%
Customer B		13	%	*				12	%	*
End-Customer
End-Customer A (1)		20	%		26	%		18	%		26	%

* Less than 10%

(1)

Sales to End-Customer A primarily occurred through Customer A.

Balance Sheet Components (Tables)

6 Months Ended

Jun. 30, 2024

Balance Sheet Related Disclosures [Abstract]

Components of Inventory

Inventory consists of the following (in thousands):


	June 30,		December 31,
	2024		2023
Work in process	$	7,984	$	4,795
Finished goods		4,275		4,723
Total inventory	$	12,259	$	9,518

Components of Property and Equipment - Net

Property and equipment, net consists of the following (in thousands):


	June 30,			December 31,
	2024			2023
Machinery, computer equipment and software	$	2,633		$	2,759
Leasehold improvements		94			94
Furniture		38			36
Total property and equipment		2,765			2,889
Less: accumulated depreciation		(2,361	)		(2,367	)
Total property and equipment, net	$	404		$	522

Summary of Changes in Carrying Amount of Goodwill

Changes in the carrying amount of goodwill for the six months ended June 30, 2024 are as follows (in thousands):

Summary of Intangible Assets Except Goodwill

Intangible assets, except goodwill consist of the following (in thousands):

Summary of Expected Amortization Expense

As of June 30, 2024, expected amortization expense for the unamortized finite-lived intangible assets by years is as follows (in thousands):


Year Ending December 31,	Amount
Remainder of 2024	$	55
2025		109
2026		109
2027		109
2028		109
Thereafter		490
Total	$	981

Components of Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):


	June 30,		December 31,
	2024		2023
Payroll-related expenses	$	2,191	$	983
Engineering service		397		199
Security for the indemnification obligations (1)		300		—
Accrued warranty		158		180
Accrued inventory		116		401
Taxes payable		89		468
Professional fees		20		23
Other		45		68
Total accrued liabilities	$	3,316	$	2,322

Fair Value Measurements of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Summary of Financial Instruments

The following is a summary of financial instruments (in thousands):



	June 30, 2024
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Values
Available-for-sale securities:
Certificates of deposit	$	1,924	$	—	$	(1	)	$	1,923
U.S.Treasury bills and notes		35,458	94			(25	)		35,527
Government agency bonds		518		—		(1	)		517
Corporate bonds		6,977		—		(18	)		6,959
Total available-for-sale securities	$	44,877	$	94	$	(45	)	$	44,926
Reported in:
Cash and cash equivalents								$	998
Short-term investments									43,928
Long-term investments									—
Total available-for-sale securities								$	44,926



	December 31, 2023
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Values
Available-for-sale securities:
Certificates of deposit	$	3,633	$	1	$	—		$	3,634
U.S.Treasury bills and notes		37,624	76			—			37,700
Government agency bonds		2,600		—		(3	)		2,597
Corporate bonds		11,504		—		(51	)		11,453
Total available-for-sale securities	$	55,361	$	77	$	(54	)	$	55,384
Reported in:
Cash and cash equivalents								$	3,096
Short-term investments									51,788
Long-term investments									500
Total available-for-sale securities								$	55,384

Summary of Contractual Maturities of Available-for-sale Securities

The contractual maturities of available-for-sale securities are presented in the following table (in thousands):



	June 30, 2024				December 31, 2023
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	44,877	$	44,926	$	54,859	$	54,884
Due between one to two years		—		—		502		500
	$	44,877	$	44,926	$	55,361	$	55,384

Schedule of Financial Instruments Measured at Fair Value

Financial assets measured at fair value on a recurring basis were as follows (in thousands):


	Fair Value Measurement at Reporting Date Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total
As of June 30, 2024
Financial assets - available-for-sale securities
Certificates of deposit	$	—	$	1,923	$	1,923
U.S.Treasury bills and notes		—		35,527		35,527
Governmental agency bonds		—		517		517
Corporate bonds		6,959		—		6,959
Total financial assets - available-for-sale securities	$	6,959	$	37,967	$	44,926

As of December 31, 2023
Financial assets - available-for-sale securities
Certificates of deposit	$	—	$	3,634	$	3,634
U.S.Treasury bills and notes		2,198		35,502		37,700
Governmental agency bonds		600		1,997		2,597
Corporate bonds		10,953		500		11,453
Total financial assets - available-for-sale securities	$	13,751	$	41,633	$	55,384

Segment Information (Tables)

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Schedule of Product Revenue from Customer by Geographic Region

Product revenue from customers is designated based on the geographic region to which the product is delivered. Revenue by geographic region was as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
China	$	12,410	$	11,233	$	24,637	$	21,752
Taiwan		2,445		2,291		4,785		4,062
South Korea		1,221		1,390		2,382		2,763
Japan		170		326		362		707
Other		533		58		924		156
Total revenue	$	16,779	$	15,298	$	33,090	$	29,440

Schedule of Revenue by Principal Products Lines

Revenue by principal product lines was as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Automotive	$	12,386	$	9,930	$	24,867	$	18,727
Security surveillance		4,393		5,368		8,223		10,713
Total revenue	$	16,779	$	15,298	$	33,090	$	29,440

Schedule of Long-lived Assets by Geographic Region

Long-lived assets by geographic region were as follows (in thousands):


	June 30,		December 31,
	2024		2023
Taiwan	$	280	$	308
China		100		176
United States		13		29
South Korea		8		6
Japan		3		3
Total property and equipment, net	$	404	$	522

Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Summary of Right of Use Assets and Lease Liabilities Related to Operating Leases

The right-of-use assets and lease liabilities related to operating leases were as follows (in thousands):


	June 30,		December 31,
	2024		2023
Right-of-use assets	$	739	$	1,045

Lease liabilities - Current	$	433	$	497
Lease liabilities - Non-Current		346		531
Total lease liabilities	$	779	$	1,028

Schedule of Lease Costs and Weighted-Average Assumptions Used in Determining its Right-of-Use Assets and Lease Liabilities

The following tables summarize the Company’s lease costs and weighted-average assumptions used in determining its right-of-use assets and lease liabilities (in thousands):


	Six Months Ended			Six Months Ended
	June 30, 2024			June 30, 2023
Operating lease cost	$	393		$	380
Cash paid for operating leases	$	336		$	385
Right-of-use assets obtained in exchange for operating lease liabilities (1)	$	58		$	26
Weighted average remaining term for operating leases	1.73 years			0.92 years
Weighted average discount rate for operating leases		8.2	%		5.8	%

Schedule of Aggregate Future Minimum Lease Payments Under Non-cancelable Operating Leases

As of June 30, 2024, the aggregate future minimum lease payments under non-cancelable operating leases consist of the following (in thousands):


Year Ending December 31,	Amount
2024 (remaining six months)	$	276
2025		417
2026		157
Total		850
Less effects of discounting		(71	)
Total lease liabilities	$	779

Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2024

Equity [Abstract]

Schedule of Number of Shares of Common Stock Reserved for Future Issuances

The Company has reserved the following number of shares of common stock for future issuances:



	June 30, 2024
Outstanding stock awards		980,469
Shares available for future issuance under the 2017 Stock Incentive Plan		7,016,775
Total common stock reserved for future issuances		7,997,244

Equity Incentive Plans (Tables)

6 Months Ended

Jun. 30, 2024

Summary of Stock Options Outstanding and Exercisable by Exercise Price

The stock options outstanding and exercisable by exercise price as of June 30, 2024 are as follows:


		Options Outstanding, Vested and Exercisable
Exercise Price		Number Outstanding		Weighted- Average Remaining Contractual Life (Years)		Weighted- Average Exercise Price
$	0.37		10,000		1.1	$	0.37
	0.97		8,000		1.4		0.97
	2.51		46,780		2.2		2.51
	2.89		40,000		2.7		2.89
	2.93		218,734		3.0		2.93
	3.18		79,567		3.1		3.18
			403,081		2.8		2.82

Summary of Restricted Stock Units Activity

The Company’s restricted stock units activity is summarized as follows:


	Units Issued and Outstanding			Weighted-Average Grant Date Fair Value
As of December 31, 2023		620,525		$	7.63
Granted		58,000			8.28
Released, net		(83,808	)		8.90
Canceled		(17,329	)		9.45
As of June 30, 2024		577,388			7.65

2017 Plan

Summary of Stock Award and Option Activity Under Stock Incentive Plan

The Company’s stock award activity under the 2017 Plan is summarized as follows:


	Awards Available for Grant
As of December 31, 2023		7,057,446
Authorized		—
Granted		(58,000	)
Canceled		17,329
As of June 30, 2024		7,016,775

The Company’s stock option activity under the 2017 Plan is summarized as follows:


	Options Issued and Outstanding			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (in thousands)
As of December 31, 2023		431,081		$	2.81		3.3	$	3,305
Granted		—			—
Exercised		(28,000	)		2.56
Canceled		—			—
As of June 30, 2024		403,081			2.82		2.8		1,992
Options vested and exercisable as of June 30, 2024		403,081			2.82		2.8		1,992

Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Distribution of Stock-Based Compensation Expense

The following table summarizes the distribution of stock-based compensation expense (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Cost of revenue	$	27	$	40	$	57	$	76
Research and development		150		115		300		234
Selling, general and administrative		218		213		437		420
Total	$	395	$	368	$	794	$	730

Net Income Per Share (Tables)

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Computation of Basic and Diluted Net Income Per Share

The following table presents the calculation of basic and diluted net income per share (amounts in thousands, except share and per share data):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Numerator:
Basic and Diluted:
Net income	$	4,336	$	4,050	$	8,716	$	7,426
Denominator:
Basic shares:
Weighted-average shares outstanding used in computing basic net income per share		18,464,483		18,294,629		18,452,766		18,263,029
Diluted shares:
Effect of potentially dilutive securities:
Stock options and restricted stock units		402,060		311,009		454,193		327,892
Weighted-average shares used in computing diluted net income per share		18,866,543		18,605,638		18,906,959		18,590,921
Net income per share:
Basic	$	0.23	$	0.22	$	0.47	$	0.41
Diluted	$	0.23	$	0.22	$	0.46	$	0.40

Provision for Income Taxes (Tables)

6 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Schedule of Components of Income Before Income Taxes

The components of income before income taxes were as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Domestic	$	4,859	$	4,599	$	9,762	$	8,321
Foreign		70		9		132		69
Income before income taxes	$	4,929	$	4,608	$	9,894	$	8,390

Schedule of Components of Provision for Income Taxes

The components of the provision for income taxes were as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
United States	$	582	$	556	$	1,159	$	956
Foreign		11		2		19		8
Provision for income taxes	$	593	$	558	$	1,178	$	964

Organization and Summary of Significant Accounting Policies - Additional Information (Details)	6 Months Ended
	Jun. 30, 2024
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Company Incorporation place	DE
California
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Company original incorporation date of incorporation	2012-04
Company Incorporation place	CA
Delaware
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Company Incorporation place	DE
Company reincorporation incorporation date of incorporation	2017-07

Organization and Summary of Significant Accounting Policies - Summary of Revenue as Percentage of Total Revenue for Each Significant Customer, or Distributor, and Significant End-Customer (Details) - Sales Revenue, Net - Customer Concentration Risk	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Customer A
Product Information [Line Items]
Concentration risk, percentage	34.00%	44.00%	35.00%	45.00%
Customer B
Product Information [Line Items]
Concentration risk, percentage	13.00%		12.00%
End-Customer A
Product Information [Line Items]
Concentration risk, percentage	20.00%	26.00%	18.00%	26.00%

Balance Sheet Components - Components of Inventory (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Balance Sheet Related Disclosures [Abstract]
Work in process	$ 7,984	$ 4,795
Finished goods	4,275	4,723
Total inventory	$ 12,259	$ 9,518

Balance Sheet Components - Components of Property and Equipment - Net (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 2,765	$ 2,889
Less: accumulated depreciation	(2,361)	(2,367)
Total property and equipment, net	404	522
Machinery, Computer Equipment and Software
Property Plant And Equipment [Line Items]
Property and equipment, gross	2,633	2,759
Leasehold Improvements
Property Plant And Equipment [Line Items]
Property and equipment, gross	94	94
Furniture
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 38	$ 36

Balance Sheet Components - Additional Information (Details) - USD ($)	3 Months Ended			6 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Balance Sheet Related Disclosures [Abstract]
Depreciation	$ 100,000		$ 100,000	$ 100,000	$ 200,000
Goodwill	891,000			891,000		$ 891,000
Payments received in advance of shipments	771,000			771,000		$ 1,448,000
Company recognized revenue	$ 800,000	$ 1,400,000
Amortization expenses of intangible assets				$ 54,000,000	$ 0
Estimated amortization period	10 years			10 years

Balance Sheet Components - Summary of Changes in Carrying Amount of Goodwill (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Goodwill [Roll Forward]
Goodwill beginning balance	$ 891
Goodwill ending balance	$ 891

Balance Sheet Components - Summary of Intangible Assets Except Goodwill (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Acquired intellectual property	$ 1,090
Less: accumulated amortization	(109)
Total finite-lived intangible assets, net	$ 981

Balance Sheet Components - Summary of Expected Amortization Expense (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Remainder of 2024	$ 55
2025	109
2026	109
2027	109
2028	109
Thereafter	490
Total finite-lived intangible assets, net	$ 981

Balance Sheet Components - Components of Accrued Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023	Jul. 31, 2023
Balance Sheet Related Disclosures [Abstract]
Payroll-related expenses	$ 2,191	$ 983
Engineering service	397	199
Security for the indemnification obligations	300		$ 300
Accrued warranty	158	180
Accrued inventory	116	401
Taxes payable	89	468
Professional fees	20	23
Other	45	68
Total accrued liabilities	$ 3,316	$ 2,322

Balance Sheet Components - Components of Accrued Liabilities (Parenthetical) (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Jul. 31, 2023
Balance Sheet Related Disclosures [Abstract]
Security for the indemnification obligations	$ 300	$ 300

Fair Value Measurements of Financial Instruments - Summary of Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	$ 44,877	$ 55,361
Gross Unrealized Gain	94	77
Gross Unrealized Loss	(45)	(54)
Estimated Fair Values	44,926	55,384
Certificates of Deposit
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	1,924	3,633
Gross Unrealized Gain		1
Gross Unrealized Loss	(1)
Estimated Fair Values	1,923	3,634
U.S.Treasury Bills and Notes
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	35,458	37,624
Gross Unrealized Gain	94	76
Gross Unrealized Loss	(25)
Estimated Fair Values	35,527	37,700
Government Agency Bonds
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	518	2,600
Gross Unrealized Loss	(1)	(3)
Estimated Fair Values	517	2,597
Corporate Bonds
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	6,977	11,504
Gross Unrealized Loss	(18)	(51)
Estimated Fair Values	6,959	11,453
Cash and Cash Equivalents
Schedule Of Available For Sale Securities [Line Items]
Estimated Fair Values	998	3,096
Short-term Investments
Schedule Of Available For Sale Securities [Line Items]
Estimated Fair Values	$ 43,928	51,788
Long-term investments
Schedule Of Available For Sale Securities [Line Items]
Estimated Fair Values		$ 500

Fair Value Measurements of Financial Instruments - Summary of Contractual Maturities of Available-for-sale Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Debt Securities, Available-for-Sale [Abstract]
Amortized Cost, Due in one year or less	$ 44,877	$ 54,859
Amortized Cost, Due between one to two years		502
Amortized Cost	44,877	55,361
Estimated Fair Value, Due in one year or less	44,926	54,884
Estimated Fair Value, Due between one to two years		500
Estimated Fair Value	$ 44,926	$ 55,384

Fair Value Measurements of Financial Instruments - Additional Information (Details)	6 Months Ended
	Jun. 30, 2024 USD ($) Investment	Jun. 30, 2023 USD ($)
Debt Securities, Available-for-Sale [Abstract]
Number of investments in unrealized loss positions \| Investment	51
Number of investment in unrealized loss positions less than twelve months \| Investment	38
Fair value of investments	$ 38,700,000
Unrealized losses on investments	100,000
Other-than-temporary impairments associated with investments	0
Sales of available-for-sale securities	$ 0	$ 0

Fair Value Measurements of Financial Instruments - Schedule of Financial Assets Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	$ 44,926	$ 55,384
Certificates of Deposit
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	1,923	3,634
U.S.Treasury Bills and Notes
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	35,527	37,700
Government Agency Bonds
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	517	2,597
Corporate Bonds
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	6,959	11,453
Fair Value Measurements Recurring
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	44,926	55,384
Fair Value Measurements Recurring \| Certificates of Deposit
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	1,923	3,634
Fair Value Measurements Recurring \| U.S.Treasury Bills and Notes
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	35,527	37,700
Fair Value Measurements Recurring \| Government Agency Bonds
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	517	2,597
Fair Value Measurements Recurring \| Corporate Bonds
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	6,959	11,453
Fair Value Measurements Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	6,959	13,751
Fair Value Measurements Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1) \| U.S.Treasury Bills and Notes
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities		2,198
Fair Value Measurements Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1) \| Government Agency Bonds
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities		600
Fair Value Measurements Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1) \| Corporate Bonds
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	6,959	10,953
Fair Value Measurements Recurring \| Significant Other Observable Inputs (Level 2)
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	37,967	41,633
Fair Value Measurements Recurring \| Significant Other Observable Inputs (Level 2) \| Certificates of Deposit
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	1,923	3,634
Fair Value Measurements Recurring \| Significant Other Observable Inputs (Level 2) \| U.S.Treasury Bills and Notes
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	35,527	35,502
Fair Value Measurements Recurring \| Significant Other Observable Inputs (Level 2) \| Government Agency Bonds
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities	$ 517	1,997
Fair Value Measurements Recurring \| Significant Other Observable Inputs (Level 2) \| Corporate Bonds
Financial assets - available-for-sale securities
Total financial assets - available-for-sale securities		$ 500

Segment Information - Additional Information (Details)	6 Months Ended
Segment Information - Additional Information (Details)	Jun. 30, 2024 Segment
Segment Reporting [Abstract]
Number of reportable segments	1
Number of operating segments	1

Segment Information - Schedule of Product Revenue from Customers by Geographic Region (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Revenues From External Customers And Long Lived Assets [Line Items]
Revenue	$ 16,779	$ 15,298	$ 33,090	$ 29,440
China
Revenues From External Customers And Long Lived Assets [Line Items]
Revenue	12,410	11,233	24,637	21,752
Taiwan
Revenues From External Customers And Long Lived Assets [Line Items]
Revenue	2,445	2,291	4,785	4,062
South Korea
Revenues From External Customers And Long Lived Assets [Line Items]
Revenue	1,221	1,390	2,382	2,763
Japan
Revenues From External Customers And Long Lived Assets [Line Items]
Revenue	170	326	362	707
Other
Revenues From External Customers And Long Lived Assets [Line Items]
Revenue	$ 533	$ 58	$ 924	$ 156

Segment Information - Schedule of Revenue by Principal Product Lines (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Entity Wide Information Revenue From External Customer [Line Items]
Revenue	$ 16,779	$ 15,298	$ 33,090	$ 29,440
Automotive
Entity Wide Information Revenue From External Customer [Line Items]
Revenue	12,386	9,930	24,867	18,727
Security Surveillance
Entity Wide Information Revenue From External Customer [Line Items]
Revenue	$ 4,393	$ 5,368	$ 8,223	$ 10,713

Segment Information - Schedule of Long-Lived Assets by Geographic Region (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Revenues From External Customers And Long Lived Assets [Line Items]
Total property and equipment - net	$ 404	$ 522
Taiwan
Revenues From External Customers And Long Lived Assets [Line Items]
Total property and equipment - net	280	308
China
Revenues From External Customers And Long Lived Assets [Line Items]
Total property and equipment - net	100	176
United States
Revenues From External Customers And Long Lived Assets [Line Items]
Total property and equipment - net	13	29
South Korea
Revenues From External Customers And Long Lived Assets [Line Items]
Total property and equipment - net	8	6
Japan
Revenues From External Customers And Long Lived Assets [Line Items]
Total property and equipment - net	$ 3	$ 3

Commitments and Contingencies - Additional Information (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2024 USD ($) Litigation	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($) Litigation	Jun. 30, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Non-cancelable operating lease agreements, expiration description			non-cancelable lease agreements expiring through fiscal year 2026.
Rent expense under operating leases	$ 200,000	$ 200,000	$ 400,000	$ 400,000
Rent expense recognized from short-term leases	6,000	$ 6,000	12,000	$ 12,000
Future minimum payments under purchase commitments for the year ended December 31, 2024	700,000		700,000
Future minimum payments under purchase commitments for the year ended December 31, 2025	700,000		700,000
Future minimum payments under purchase commitments for the year ended December 31, 2026	$ 300,000		$ 300,000
Number of litigation \| Litigation	0		0

Commitments and Contingencies - Summary of Right of Use Assets and Lease Liabilities Related to Operating Leases (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Assets and Liabilities, Lessee [Abstract]
Right-of-use assets	$ 739	$ 1,045
Lease liabilities - Current	433	497
Lease liabilities - Non-Current	$ 346	$ 531
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other liabilities	Other liabilities
Total lease liabilities	$ 779	$ 1,028

Commitments and Contingencies - Schedule of Lease Costs and Weighted-Average Assumptions Used in Determining its Right-of-Use Assets and Lease Liabilities (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Operating lease cost	$ 393	$ 380
Cash paid for operating leases	336	385
Right-of-use assets obtained in exchange for operating lease liabilities	$ 58	$ 26
Weighted average remaining term for operating leases	1 year 8 months 23 days	11 months 1 day
Weighted average discount rate for operating leases	8.20%	5.80%

Commitments and Contingencies - Schedule of Aggregate Future Minimum Lease Payments Under Non-cancelable Operating Leases (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
2024 (remaining six months)	$ 276
2025	417
2026	157
Total	850
Less effects of discounting	(71)
Total lease liabilities	$ 779	$ 1,028

Stockholders' Equity - Additional Information (Details) $ / shares in Units, $ in Thousands			3 Months Ended		6 Months Ended
	Dec. 15, 2023 USD ($) Installment $ / shares	Dec. 16, 2022 USD ($) Installment $ / shares	Jun. 30, 2024 $ / shares shares	Jun. 30, 2023 $ / shares	Jun. 30, 2024 USD ($) $ / shares shares	Jun. 30, 2023 USD ($)	May 31, 2024 $ / shares	Dec. 31, 2023 $ / shares shares	Jun. 02, 2023 $ / shares
Class of Stock [Line Items]
Preferred stock, shares authorized			5,000,000		5,000,000			5,000,000
Preferred stock, par value \| $ / shares			$ 0.0001		$ 0.0001			$ 0.0001
Preferred stock, shares issued			0		0			0
Preferred stock, shares outstanding			0		0			0
Common stock shares authorized			75,000,000		75,000,000			75,000,000
Common stock par value \| $ / shares			$ 0.0001		$ 0.0001			$ 0.0001
Common stock shares issued			18,507,490		18,507,490			18,395,682
Common stock shares outstanding			18,507,490		18,507,490			18,395,682
Dividends payable, date declared		Dec. 16, 2022			Dec. 15, 2023
Cash dividends declared per share \| $ / shares	$ 0.5	$ 0.5	$ 0.25	$ 0.25
Number of dividend payable installment \| Installment	2	2
Dividends payable, amount per share \| $ / shares	$ 0.25	$ 0.25
Dividend accrued \| $	$ 4,600	$ 4,600
Dividend paid \| $	$ 9,000	$ 9,100			$ 4,603	$ 4,555
Dividends payable, date of record					Jan. 31, 2024
First Installment of Dividend
Class of Stock [Line Items]
Dividends payable, date of record					Jan. 31, 2023
Second Installment of Dividend
Class of Stock [Line Items]
Dividends payable, amount per share \| $ / shares							$ 0.25		$ 0.25

Stockholders' Equity - Schedule of Number of Shares of Common Stock Reserved for Future Issuances (Details)	Jun. 30, 2024 shares
Class Of Stock [Line Items]
Common stock reserved for future issuances	7,997,244
Outstanding Stock Awards
Class Of Stock [Line Items]
Common stock reserved for future issuances	980,469
Shares Available for Future Issuance under 2017 Stock Incentive Plan
Class Of Stock [Line Items]
Common stock reserved for future issuances	7,016,775

Equity Incentive Plans - Additional Information (Details) $ in Millions		1 Months Ended		6 Months Ended
	Jan. 01, 2024	Sep. 30, 2017 shares	Apr. 30, 2012	Jun. 30, 2024 USD ($) shares	Jun. 30, 2023 USD ($)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, additional awards				0
Common stock reserved for future issuances				7,997,244
Share-based compensation arrangement by share-based payment award, aggregate intrinsic value of options exercised \| $				$ 0.2	$ 0.1
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, options vesting period				5 years
Share-based compensation arrangement by share-based payment award, stock awards conversion ratio				1
2012 Stock Option Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, options vesting term of award				The 2012 Plan provides for the granting of stock-based awards to employees, directors, and consultants under terms and provisions established by the Company’s board of directors. Under the terms of the 2012 Plan, options may be granted at an exercise price not less than fair market value. For employees holding more than 10% of the voting rights of all classes of stock, the exercise prices for incentive and non-statutory stock options must be at least 110% of the fair market value of the common stock on the grant date, as determined by the Company’s board of directors. The terms of options granted under the 2012 Plan may not exceed ten years.
Share-based compensation arrangement by share-based payment award, additional awards		0
Common stock reserved for future issuances		0
2012 Stock Option Plan \| Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, percentage of voting rights of all classes of stock to be owned by employees to determine stock options exercise price on grant date			10.00%
Share-based compensation arrangement by share-based payment award, exercise prices percentage of fair market value of common stock on grant date			110.00%
2012 Stock Option Plan \| Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, Options exercisable period			10 years
Two Thousand Seventeen Stock Option Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, options vesting term of award				Options granted generally vest over a five-year period and generally are exercisable for up to 10 years
Share based compensation arrangement by share based payment award number of shares authorized increment description				The number of shares available for issuance under the 2017 Plan can be automatically increased on the first day of each fiscal year beginning on January 1, 2018 and ending on (and including) January 1, 2027, in an amount equal to the lesser of (1) 4% of the outstanding shares of the Company’s common stock on the last day of the immediately preceding fiscal year, or (2) another amount determined by the Company’s board of directors.
Automatic increase in number of shares authorized under stock option plan, start date				Jan. 01, 2018
Automatic increase in number of shares authorized under stock option plan, end date				Jan. 01, 2027
Share-based compensation arrangement by share-based payment award, percentage of annual increase in number of shares authorized of outstanding shares of common stock	4.00%
Share-based compensation arrangement by share-based payment award, options vesting period				5 years
Two Thousand Seventeen Stock Option Plan \| Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, Options exercisable period				10 years
Share-based compensation arrangement by share-based payment award, percentage of annual increase in number of shares authorized of outstanding shares of common stock		4.00%

Equity Incentive Plans - Summary of Stock Awards and Option Activity Under Stock Incentive Plan (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]
Awards Available for Grant, Beginning balance	7,057,446
Awards Available for Grant, Authorized	0
Awards Available for Grant, Granted	(58,000)
Awards Available for Grant, Canceled	17,329
Awards Available for Grant, Ending balance	7,016,775	7,057,446
Options Issued and Outstanding, Beginning balance	431,081
Options Issued and Outstanding, Exercised	(28,000)
Options Issued and Outstanding, Ending balance	403,081	431,081
Options Issued and Outstanding, Options vested and exercisable	403,081
Weighted Average Exercise Price, Beginning balance	$ 2.81
Weighted Average Exercise Price, Exercised	2.56
Weighted Average Exercise Price, Ending balance	2.82	$ 2.81
Weighted Average Exercise Price, Options vested and exercisable	$ 2.82
Weighted-Average Remaining Contractual Term	2 years 9 months 18 days	3 years 3 months 18 days
Weighted-Average Remaining Contractual Term, Options vested and exercisable	2 years 9 months 18 days
Aggregate Intrinsic Value	$ 1,992	$ 3,305
Aggregate Intrinsic Value, Options vested and exercisable	$ 1,992

Equity Incentive Plans - Summary of Stock Options Outstanding and Exercisable by Exercise Price (Details)	6 Months Ended
	Jun. 30, 2024 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options Outstanding, Vested and Exercisable, Number \| shares	403,081
Options Outstanding, Vested and Exercisable, Weighted-Average Remaining Contractual Life (Years)	2 years 9 months 18 days
Options Outstanding, Vested and Exercisable, Weighted-Average Exercise Price	$ 2.82
Exercise Price 0.37
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Exercise Price	$ 0.37
Options Outstanding, Vested and Exercisable, Number \| shares	10,000
Options Outstanding, Vested and Exercisable, Weighted-Average Remaining Contractual Life (Years)	1 year 1 month 6 days
Options Outstanding, Vested and Exercisable, Weighted-Average Exercise Price	$ 0.37
Exercise Price 0.97
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Exercise Price	$ 0.97
Options Outstanding, Vested and Exercisable, Number \| shares	8,000
Options Outstanding, Vested and Exercisable, Weighted-Average Remaining Contractual Life (Years)	1 year 4 months 24 days
Options Outstanding, Vested and Exercisable, Weighted-Average Exercise Price	$ 0.97
Exercise Price 2.51
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Exercise Price	$ 2.51
Options Outstanding, Vested and Exercisable, Number \| shares	46,780
Options Outstanding, Vested and Exercisable, Weighted-Average Remaining Contractual Life (Years)	2 years 2 months 12 days
Options Outstanding, Vested and Exercisable, Weighted-Average Exercise Price	$ 2.51
Exercise Price 2.89
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Exercise Price	$ 2.89
Options Outstanding, Vested and Exercisable, Number \| shares	40,000
Options Outstanding, Vested and Exercisable, Weighted-Average Remaining Contractual Life (Years)	2 years 8 months 12 days
Options Outstanding, Vested and Exercisable, Weighted-Average Exercise Price	$ 2.89
Exercise Price 2.93
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Exercise Price	$ 2.93
Options Outstanding, Vested and Exercisable, Number \| shares	218,734
Options Outstanding, Vested and Exercisable, Weighted-Average Remaining Contractual Life (Years)	3 years
Options Outstanding, Vested and Exercisable, Weighted-Average Exercise Price	$ 2.93
Exercise Price 3.18
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Exercise Price	$ 3.18
Options Outstanding, Vested and Exercisable, Number \| shares	79,567
Options Outstanding, Vested and Exercisable, Weighted-Average Remaining Contractual Life (Years)	3 years 1 month 6 days
Options Outstanding, Vested and Exercisable, Weighted-Average Exercise Price	$ 3.18

Equity Incentive Plans - Summary of Restricted Stock Units Activity (Details) - Restricted Stock Units	6 Months Ended
	Jun. 30, 2024 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Units Issued and Outstanding, Beginning balance \| shares	620,525
Units Issued and Outstanding, Granted \| shares	58,000
Units Issued and Outstanding, Released, net \| shares	(83,808)
Units Issued and Outstanding, Canceled \| shares	(17,329)
Units Issued and Outstanding, Ending balance \| shares	577,388
Weighted-Average Grant Date Fair Value, Beginning balance \| $ / shares	$ 7.63
Weighted-Average Grant Date Fair Value, Granted \| $ / shares	8.28
Weighted-Average Grant Date Fair Value, Released, net \| $ / shares	8.9
Weighted-Average Grant Date Fair Value, Canceled \| $ / shares	9.45
Weighted-Average Grant Date Fair Value, Ending balance \| $ / shares	$ 7.65

Stock-Based Compensation - Distribution of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Share Based Compensation Expense [Line Items]
Stock-based compensation	$ 395	$ 368	$ 794	$ 730
Cost of Revenue
Share Based Compensation Expense [Line Items]
Stock-based compensation	27	40	57	76
Research and Development
Share Based Compensation Expense [Line Items]
Stock-based compensation	150	115	300	234
Selling, General and Administrative
Share Based Compensation Expense [Line Items]
Stock-based compensation	$ 218	$ 213	$ 437	$ 420

Net Income Per Share - Computation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Basic and diluted:
Net Income (Loss)	$ 4,336	$ 4,380	$ 4,050	$ 3,376	$ 8,716	$ 7,426
Denominator:
Weighted-average shares outstanding used in computing basic net income per share	18,464,483		18,294,629		18,452,766	18,263,029
Effect of potentially dilutive securities:
Stock options and restricted stock units	402,060		311,009		454,193	327,892
Weighted-average shares used in computing diluted net income per share	18,866,543		18,605,638		18,906,959	18,590,921
Net income per share:
Basic	$ 0.23		$ 0.22		$ 0.47	$ 0.41
Diluted	$ 0.23		$ 0.22		$ 0.46	$ 0.40

Net Income Per Share - Additional Information (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earnings per share amount	124,000	299,000	78,000	269,000

Provision for Income Taxes - Schedule of Components of Income Before Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Tax Disclosure [Abstract]
Domestic	$ 4,859	$ 4,599	$ 9,762	$ 8,321
Foreign	70	9	132	69
Income before income taxes	$ 4,929	$ 4,608	$ 9,894	$ 8,390

Provision for Income Taxes - Schedule of Components of Provision for Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Tax Disclosure [Abstract]
United States	$ 582	$ 556	$ 1,159	$ 956
Foreign	11	2	19	8
Provision for income taxes	$ 593	$ 558	$ 1,178	$ 964

Provision for Income Taxes - Additional Information (Details) $ in Millions	6 Months Ended
	Jun. 30, 2024 USD ($)
Income Tax [Line Items]
Unrecognized tax benefits	$ 0
Unrecognized tax benefits netted against deferred tax assets valuation allowance	$ 0
Description of uncertain income tax position	The Company applies the provisions of the applicable accounting guidance regarding accounting for uncertainty in income taxes, which require application of a more-likely-than-not threshold to the recognition and derecognition of uncertain tax positions. If the recognition threshold is met, the applicable accounting guidance permits the recognition of a tax benefit measured at the largest amount of such tax benefit that, in the Company’s judgment, is more than fifty percent likely to be realized upon settlement.
Unrecognized tax benefits against effective tax rate	$ 0
State
Income Tax [Line Items]
Examination by tax authorities	2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022