With two CEOs gone before the mid-year mark of 2015 and a stock price that never gained much ground after plummeting through the first half of 2014, Toronto chip company ViXS Systems is clearly dealing with some serious internal issues. The question now is: What's creating the chaos, and is there a showdown coming between executives and investors?

To put the story in context, ViXS Systems Inc. , which trades on the Toronto Stock Exchange, provides media processing chip solutions for the television industry. Customers include Imagine Communications , Sling Media Inc. (in an exclusive distribution deal with Arris Group Inc. (Nasdaq: ARRS)), Panasonic Corp. (NYSE: PC) and Sky Deutschland Fernsehen GmbH & Co. KG , among many others. (See ViXS Powers First Live 4K Broadcast by Sky Deutschland and ViXS Signs RDK License.)

The company has been around since 2001, and until recently, one of the founders, Sally Daub, reigned as CEO for its entire existence. That changed when Daub inexplicably stepped down in February, and co-founder and COO Hugh Chow took over the CEO role. Chow's tenure was short. After less than four months, he too resigned (or was let go) leaving an empty seat at the head of the executive table.

In its latest earnings report on June 10, ViXS said revenues were down 11% from the previous quarter to just under $10 million. On the other hand, total losses were also down, thanks to lower operating expenses and a favorable foreign exchange rate. After losing $3.8 million at the end of the company's 2015 fiscal year, ViXS lost only $1.8 million in the most recent quarter.

The board of directors has maintained a positive outlook on ViXS' future, with Chairman Peter Currie insisting that "ViXS is currently undergoing an important transition that will allow the company to realize its full potential as the leader in media processing solutions."

However, given that two CEOs (who were also founders of the company) have departed this year, it seems all too likely there is disagreement about what that future should look like.

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Celtic House Venture Partners , ViXS' largest investor, has a big stake in the company's performance. The investment firm has not talked publicly about what it wants for ViXS, but past history may provide some clues. In 2012, Celtic House participated in merging two small private chip companies, RedMere Technology Limited and Fresco Microchip Inc., with Chrysalis Capital VIII Corporation to form Spectra7 Microsystems Inc. Spectra7 currently trades on the TSX Venture Exchange in Canada and conveniently has its Canadian headquarters about 15 minutes down the road from ViXS in Toronto. Celtic House partner Brian Antonen sits on both boards.

There's no product overlap between ViXS and Spectra7, which delivers high-performance analog semiconductor solutions, but there is common interest thanks to the significant financial role of Celtic House in both companies. Multiple sources have suggested that it wouldn't be unreasonable to think that Celtic House may be planning to merge the two entities and place its chosen candidate in the role of ViXS CEO.

In ViXS' quarterly earnings announcement, Chairman Currie alluded to the board's ongoing efforts to find a replacement for Daub and Chow. "Over the past quarter," he said, "the Board has identified several outstanding candidates for the role of CEO whom we believe can increase shareholder returns for ViXS. The board and members of the senior management team are working closely together to ensure the company is moving forward."

Notably, one day after that statement was made, shareholders re-elected the current slate of directors to the ViXS board at the company's annual shareholder meeting.

Is the path for a new CEO clear now that both Daub and Chow are gone? Will Celtic House Venture Partners attempt to consolidate its interests by merging ViXS and Spectra7? The answers may depend on whether Celtic House has internal adversaries inside ViXS with differing agendas. Two company co-founders, Daub and Chow, are out. One, CTO Indra Laksono, remains. Where Laksono and the rest of the shareholders stand on the issue of ViXS' future remains to be seen.

As of press time, neither ViXS nor Celtic Ventures had responded to requests for comment from Light Reading. ViXS was in a quiet period leading up to its earnings report last week.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading