PIXELWORKS, INC 8-K

What Happened

• On December 20, 2025, Pixelworks, Inc.'s Board adopted resolutions directing management to complete the sale of all common shares of Pixelworks Semiconductor Technology (Shanghai) Co., Ltd. (PWSH), held by Pixelworks Semiconductor Technology Company, LLC (a wholly owned subsidiary), to Tiansui Xinyuan Technology (Shanghai) Co., Ltd. The company expects the sale to close in early January 2026.
• The Board met on December 19, 2025 and cited key reasons for the decision: PWSH would require significant additional capital to scale profitably; Pixelworks’ TrueCut business is a potentially higher‑margin licensing opportunity that needs less capital; completing the sale resolves repurchase rights held by other PWSH shareholders (a growing financial obligation); and the sale lets Pixelworks focus on its core visual‑processing technology and pursue a licensing model instead of the fabless semiconductor model.
• The Board determined the Sale does not constitute a sale of substantially all of the Company’s assets, so shareholder approval is not required, and directed management to stop seeking additional proxies for the previously announced special shareholder meeting.

Key Details

• Board resolution date: December 20, 2025; special meeting discussion date: December 19, 2025; reconvened meeting scheduled for December 31, 2025 (company will vote remaining proposals and adjourn).
• Sale parties: Pixelworks’ wholly owned subsidiary → Tiansui Xinyuan Technology (Shanghai) Co., Ltd.; target: Pixelworks Semiconductor Technology (Shanghai) Co., Ltd. (PWSH).
• Proxy status as of Dec. 19, 2025: proxies received represented ~63% of shares outstanding; proxies voting in favor represented ~98% of proxies received and were from holders of ~61% of total outstanding shares on the record date.
• Expected close timing: early January 2026. Filing contains standard forward‑looking statement cautions.

Why It Matters

• For investors, the deal signals a strategic shift away from capital‑intensive semiconductor manufacturing toward a licensing‑focused model (TrueCut), which the Board views as higher margin and less capital‑intensive.
• The sale should remove a significant repurchase‑rights obligation tied to PWSH and reduce the need for Pixelworks to raise additional capital to fund that subsidiary.
• The Board’s determination that shareholder approval is not required means the company can complete the transaction without an additional shareholder vote, though the reconvened meeting will still proceed to address other proposals.
• Risks remain: the closing is expected but not guaranteed, and financial impacts (proceeds, use of funds, and future revenue mix) will depend on final terms and post‑sale execution.