Pixelworks Completes Sale of Shanghai Semiconductor Subsidiary

Pixelworks, Inc. (NASDAQ: PXLW), a prominent provider of cutting-edge video and display processing solutions, has successfully finalized the sale of its shares in Pixelworks Semiconductor Technology (Shanghai) Co., Ltd. This transaction, executed with a special purpose entity led by VeriSilicon Microelectronics (Shanghai) Co., Ltd., represents a strategic move to streamline operations while generating substantial cash flow for the company.

Transaction Highlights

The transfer of all outstanding capital stock in Pixelworks Shanghai to the Buyer resulted in net cash proceeds for Pixelworks amounting to approximately RMB 357 million, or about $51 million USD, after deducting transaction costs and withholding taxes in China. Furthermore, an amount of approximately RMB 8.7 million (around $1.2 million USD) is being retained in an escrow account, pending the resolution of specific tax issues in China.

Implications of the Sale

This sale not only provides a significant influx of capital for PXLW but also simplifies its equity structure by releasing all prior repurchase rights held by former shareholders of Pixelworks Shanghai. The decision to divest this asset underscores the company's commitment to enhancing shareholder value and focusing on its core business areas.

Background on Pixelworks

For over 20 years, Pixelworks has delivered innovative image processing solutions, serving major players in consumer electronics, professional displays, and video streaming services. The company's technology is designed to facilitate authentic viewing experiences with superior visual quality across various platforms, from cinema screens to smartphones. For more details on their offerings, visit Pixelworks' website.

Forward-Looking Statements

This announcement contains forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements reflect management's current expectations and involve risks and uncertainties that could cause actual results to differ materially from those projected. Investors should not place undue reliance on these forward-looking statements. For comprehensive information regarding risks, please refer to the company's filings with the Securities and Exchange Commission (SEC) including the Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, accessible online at www.sec.gov.