SAN JOSE, Calif. Fu-Chieh Hsu, chairman, president and chief executive of Monolithic System Technology Inc. (MoSys) on Friday (Dec. 31) announced that he has resigned from the company, effective Dec. 30.
Hsu, a co-founder of the company, cited recent health problems as the reason for his resignation from the supplier of intellectual property (IP) cores and other products.
MoSys' CFO, Mark Voll, will assume responsibility for operations at the company and will report to the board. The company's board will conduct a search for a new CEO.
"We are all very saddened by the departure of one of the company's founders and one of Silicon Valley's leading technologists. We recognize Fu-Chieh's significant contributions and personal sacrifices in building the company," said Carl Berg, a member of the board of MoSys (Sunnyvale, Calif.), in a statement.
"2004 has certainly been a challenging year for everyone at MoSys," he said. "We all wish Fu-Chieh a quick recovery and return to good health."
No other details were disclosed. Indeed, it has been a tough year for the company. Taking a step into the embedded memory space, EDA vendor Synopsys Inc. in February announced the acquisition of MoSys for approximately $432 million in cash and stock.
Then, faced with a declining stock price following its offer to purchase embedded memory provider MoSys for $432 million in stock and cash, Synopsys switched to a $13.50 per share all-cash offer. Synopsys is meanwhile borrowing $250 million to help offset the costs of the acquisition.
The announcement was controversial, given the very high premium that Synopsys offered, and skepticism from some observers about whether embedded memory intellectual property (IP) belongs in an EDA portfolio.
Then, on April 17, Synopsys said it had terminated its plans to acquire MoSys, a provider of embedded memory technology. In accordance with the terms of the merger agreement, Synopsys paid MoSys a $10 million termination fee. Mountain Acquisition Sub Inc., a subsidiary of Synopsys, accepted no shares of MoSys common stock for payment in the tender offer that had been commenced pursuant to the merger agreement.
However, MoSys confused matters, by saying it does not believe that Synopsys has the right to terminate the merger agreement and is prepared to promptly proceed to close the transaction with Synopsys.
The deal was eventually scrapped and MoSys filed a suit. In July, MoSys agreed to drop its lawsuit against Synopsys, which was filed after Synopsys terminated a merger agreement between the two companies dated February 23, 2004. Under the terms of their settlement agreement, Synopsys and MoSys agreed to settle the merger termination lawsuit filed by MoSys without further liability or payment to one another, and MoSys agreed to dismiss its lawsuit (see July 9 story).
In October, MoSys said net revenue in the third quarter was $1.7 million, as compared to $3.4 million in the second quarter of 2004 and $3.5 million in the third quarter 2003.
Net income for the quarter under generally accepted accounting principles was $5.1 million, or $0.15 fully diluted earnings, per share. Net income includes $10.0 million of other income in the form of cash received from Synopsys as a result of the termination of the merger agreement. The results for the quarter compare to net loss of $249,000, or minus $0.01 diluted earnings per share, in the same period last year.
License revenue in the quarter totaled $128,000, down from $1.3 million in the previous quarter and the $1.8 million in the third quarter of 2003. The company reported $1.5 million of royalty revenue in the quarter, a slight increase over the previous quarter's $1.4 million and the $1.2 million reported for the third quarter of 2003.
Product revenue in the third quarter totaled $76,000. This compares to $681,000 recognized in the previous quarter and $511,000 reported in the third quarter of 2003. Decreasing product revenue reflects the company's strategy to exit the discreet product business.
"Licensing revenue has been adversely affected by disruptions triggered by the aborted Synopsys acquisition as well as some challenging market conditions," said Hsu at that time.