More info on the secondary offering.. Part II
No way I'll go through this all tonight, but I'll get through as
much as I can. :D
There's a lot of new tidbits of information here, so I'll try to talk about
what I picked up on, at least:
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
% Convertible Subordinated
Notes due 2005............. $172,500,000(1) 100%(2) $172,500,000 $45,540
Common Stock, no par value
(together with associated
preferred stock purchase
rights).................... (3) N/A N/A N/A
Total Registration Fee....... $45,540
</TABLE>
(1) Includes $22,500,000 in principal amount that the underwriters have the
option to purchase to cover over-allotments, if any.
(2) Estimated solely for the purposes of calculating the amount of the
registration fee pursuant to Rule 457 under the Securities Act of 1933.
(3) Such indeterminate number of shares of common stock as are issuable upon
conversion of the notes.
..as well as:
SUBJECT TO COMPLETION, DATED SEPTEMBER 29, 2000
$150,000,000
[SST LOGO]
% Convertible Subordinated Notes due , 2005
-----------
We will pay interest on the notes each and , beginning on
, 2001. Holders may require us to repurchase the notes upon a
change in control. The notes are subordinated to our senior indebtedness and
effectively subordinated to all indebtedness and other liabilities of our
subsidiaries.
Holders may convert the notes into our common stock at any time prior to
maturity at a conversion price of $ per share, which is equivalent to a
conversion rate of shares of our common stock per $1,000 principal amount
of notes. Our common stock is listed on The Nasdaq Stock Market's National
Market under the symbol "SSTI." On September 28, 2000, the last reported sale
price for our common stock was $30.00 per share.
-----
This basically sets up the deal.. which is 5 million new shares.. what I
find funny, is that this explains the $30 stock close on Thursday.. $30 x 5
million gives you 150 million, + 22.5 million extra (another 750k
shares @ $30) as an "option" for the two underwriters of the deal, Credit
Suisse First Boston (CFSB) and Chase H&Q.
I'm no banker, or financial expert, but it appears as if these notes are
structured kind of like a "loan" of sorts which mature on 2005... the
arrangement is for CSFB and Chase to "purchase" these notes at $30 each,
earning interest on them from SST up until 2005. Needless to say, the goal would
be for these notes to gain value as they represent an ability to buy those
shares at $30 down the road. SST clearly gains two advocates in CSFB/Chase,
as it's in their best interest to see share prices accumulate.. but they
gain an interest on their "investment" at the bare minimum.
-----
SILICON STORAGE TECHNOLOGY, INC.
We are a leading supplier of flash memory semiconductor devices for the
digital consumer, networking, wireless communication and Internet computing
markets. Flash memory is nonvolatile memory that does not lose data when the
power source is removed and is capable of electrically erasing selected blocks
of data. We believe our proprietary flash memory technology, SuperFlash, offers
superior performance to other flash memory solutions. We have three standard
flash memory product families: the small-sector flash family, the multi-purpose
flash family and the many-time programmable flash family. These families allow
us to produce products optimized for cost and functionality to support a broad
range of applications that use nonvolatile memory products. We believe the
benefits of SuperFlash include high reliability, fast write performance, ability
to be scaled to a smaller size and a low-cost manufacturing process.
We offer over 50 products based on our SuperFlash design and manufacturing
process technology. These products include flash memory products, application
specific memory products, flash embedded controllers and mass storage products.
Our memory devices have densities ranging from 256 Kbit to 16 Mbit and are
generally used for the storage of program code. Our flash embedded
microcontrollers support concurrent flash read-while-write operations using
In-Application Programming. We also offer mass storage products that are used
for storing images, music and other data in devices such as digital cameras and
MP3 players.
-----
Hopefully everyone that's invested in SST already understands this,
but it's a nice summary of their market area. Clearly the focus for the
company is on code storage, and not data storage.. at least at this time.
-----
Our customers include Acer, Apple, Arima, Asustek, Compal, Cisco, Compaq,
Diamond Multimedia, FIC, Gigabyte, Hyundai, Infineon, Intel, IBM, Inventec, LG,
Liteon, Lucent, Motorola, Nortel, Panasonic, Quanta, Samsung, Sanyo, Sony and
3Com. We also license our SuperFlash technology to leading semiconductor
companies including Analog Devices, ATMI, IBM, ISD, Motorola, National
Semiconductor, Samsung, Sanyo, Seiko-Epson and TSMC to embed in semiconductor
devices that integrate flash memory with other functions on a single chip. Our
products are manufactured at leading wafer foundries and semiconductor
manufacturers including Samsung Electronics, Sanyo, Seiko-Epson, TSMC and UMC.
We also work with IBM, Samsung Electronics, Sanyo, Seiko-Epson and TSMC to
develop new technology for manufacturing our products.
-----
An impressive list for sure, with some new customer names that weren't
in the previous paperwork / documentation.
-----
We do not intend to list the notes for
trading on any national securities
exchange or for inclusion in any automated
quotation system.
-----
These notes appear to be a "private" offering to the two companies, these
shares will not be available to the general public.
-----
JUNE 30, 2000
-----------------------------------
AS FURTHER
ACTUAL AS ADJUSTED ADJUSTED
-------- ----------- ----------
<S> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents................................... $170,632 $315,122 $457,157
Working capital............................................. 278,740 423,230 565,265
Total assets................................................ 399,569 544,059 686,094
Long-term obligations....................................... 364 144,854 145,314
Total shareholders' equity.................................. $337,649 $337,649 $479,224
</TABLE>
The as adjusted balance sheet data gives effect to the net proceeds from the
sale of $150 million principal amount of convertible subordinated notes offered
in this offering after deducting estimated underwriting discounts and
commissions and estimated offering expenses. See "Use of Proceeds."
The as further adjusted balance sheet data gives effect to the net proceeds
from the sale of $150 million principal amount of convertible subordinated notes
offered in this offering and the net proceeds from the sale of 5,000,000 shares
of common stock offered in the concurrent common stock offering at an assumed
public offering price of $30.00 per share, in each case, after deducting
estimated underwriting discounts and commissions and estimated offering
expenses. Completion of the common stock offering is not a condition to this
offering. See "Capitalization."
-----
Basically, this gives us a look at the "balance sheet",they've accumulated
roughly 500 million dollars in liquid funds and 150 million dollars in debt..
The million dollar question of course is.. "well, they've already got money
in the bank, with no debt.." Clearly, this would point to something potentially
bigger, perhaps a new technology venture / collaboration.. or a potential new
foundary investment. Regardless, it appears as if the goal of this deal is to
secure growth for the future, which is important.. important enough that
the execs have decided to incur debt.
-----
In part III, I'll go over the "RISKS" section, b/c I think there's some
important points to notice in the text.. perhaps I'll do that tommorow..
Cheers!
docpaul |
