DELAWARE
|
77-0584301
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
No.)
|
2525
AUGUSTINE DRIVE
SANTA
CLARA, CALIFORNIA
|
95054
|
(Address
of principal
executive
offices)
|
(Zip
Code)
|
Item Number
|
|
Page
|
||
Part
I: Financial Information
|
|
|||
Item 1.
|
Financial
Statements
|
|
||
|
Condensed
Consolidated Balance Sheets at June 30, 2007 and March 31,
2007
|
3
|
||
|
Condensed
Consolidated Statements of Operations for the three months ended
June 30,
2007 and June 30, 2006
|
4
|
||
|
Condensed
Consolidated Statements of Cash Flows for the three months ended
June 30,
2007 and June 30, 2006
|
5
|
||
|
Notes
To Condensed Consolidated Financial Statements
|
6
|
||
|
||||
Item 2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
14
|
||
|
||||
Item 3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
24
|
||
|
||||
Item 4.
|
Controls
and Procedures
|
24
|
||
Part
II: Other Information
|
|
|||
|
||||
Item 1a.
|
Risk
Factors
|
25
|
||
|
||||
Item 6.
|
Exhibits
|
35
|
||
|
||||
Signatures
|
|
38
|
|
June
30, 2007
(unaudited)
|
March 31,
2007
|
|||||
ASSETS
|
|
|
|||||
Current
assets:
|
|
|
|||||
Cash
and cash equivalents
|
$
|
126,371
|
$
|
123,701
|
|||
Short-term
investments
|
60,067
|
64,549
|
|||||
Accounts
receivable trade, net of allowance for doubtful accounts of nil at
June 30
and March 31
|
22,475
|
19,455
|
|||||
Inventories
|
12,430
|
16,424
|
|||||
Prepaids
and other
|
7,309
|
6,324
|
|||||
|
|||||||
Total
current assets
|
228,652
|
230,453
|
|||||
Property
and equipment, net
|
15,548
|
16,238
|
|||||
Intangible
assets, net
|
6,822
|
5,006
|
|||||
Goodwill
|
84,405
|
84,405
|
|||||
Deferred
income taxes
|
299
|
252
|
|||||
Other
long-term assets
|
15,214
|
15,360
|
|||||
|
|||||||
Total
assets
|
$
|
350,940
|
$
|
351,714
|
|||
|
|||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable
|
$
|
6,363
|
$
|
6,759
|
|||
Accrued
liabilities
|
20,247
|
14,888
|
|||||
Income
taxes payable
|
7,601
|
6,698
|
|||||
|
|||||||
Total
current liabilities
|
34,211
|
28,345
|
|||||
Stockholders’
equity:
|
|||||||
Capital
stock:
|
|||||||
Preferred
stock:
|
|||||||
Authorized
- 5,000 preferred shares, $0.001 par value
|
|||||||
Issued
and outstanding - none at June 30 and at March 31
|
-
|
-
|
|||||
Common
stock:
|
|||||||
Authorized
- 100,000 common shares, $0.001 par value
|
|||||||
Issued
and outstanding - 37,181 shares at June 30 and 37,097 shares at
March 31
|
37
|
37
|
|||||
Additional
paid-in capital
|
469,812
|
465,744
|
|||||
Treasury
shares
|
(833
|
)
|
(833
|
)
|
|||
Cumulative
other comprehensive loss
|
(94
|
)
|
(94
|
)
|
|||
Deficit
|
(152,193
|
)
|
(141,485
|
)
|
|||
|
|||||||
Total
stockholders’ equity
|
316,729
|
323,369
|
|||||
|
|||||||
Total
liabilities and stockholders’ equity
|
$
|
350,940
|
$
|
351,714
|
Three
Months Ended
|
|||||||
June
30
|
|||||||
2007
|
2006
|
||||||
Revenues
|
$
|
43,984
|
$
|
55,899
|
|||
Cost
of revenues (1)
|
27,031
|
33,240
|
|||||
Gross
profit
|
16,953
|
22,659
|
|||||
Operating
expenses:
|
|||||||
Research
and development (2)(4)
|
16,233
|
14,917
|
|||||
Selling,
general and administrative (3)
|
12,858
|
14,822
|
|||||
Total
operating expenses
|
29,091
|
29,739
|
|||||
Loss
from operations
|
(12,138
|
)
|
(7,080
|
)
|
|||
Interest
and other income
|
|||||||
Interest
income
|
2,321
|
2,164
|
|||||
Other
income (5)
|
-
|
3,217
|
|||||
Total
interest and other income
|
2,321
|
5,381
|
|||||
Loss
before income taxes
|
(9,817
|
)
|
(1,699
|
)
|
|||
Provision
for (recovery of) income taxes
|
891
|
(3,139
|
)
|
||||
Net
income (loss)
|
$
|
(10,708
|
)
|
$
|
1,440
|
||
Earnings
(loss) per share:
|
|||||||
Basic
|
$
|
(0.29
|
)
|
$
|
0.04
|
||
Diluted
|
$
|
(0.29
|
)
|
$
|
0.04
|
||
Weighted
average number of common shares outstanding:
|
|||||||
Basic
|
37,142
|
36,001
|
|||||
Diluted
|
37,142
|
36,518
|
|||||
(1)
Amount includes stock-based compensation
|
$
|
164
|
$
|
428
|
|||
(2)
Amount includes stock-based compensation
|
$
|
1,850
|
$
|
1,891
|
|||
(3)
Amount includes stock-based compensation
|
$
|
1,900
|
$
|
3,023
|
|||
(4)
Amount includes amortization of intangibles related to
acquisitions
|
$
|
50
|
$
|
482
|
|||
(5)
Gain on sale of investment
|
$
|
-
|
$
|
3,217
|
Three
Months Ended June
30 |
|||||||
2007
|
2006
|
||||||
Cash
flows from (used in) operating activities:
|
|||||||
Net
income (loss)
|
$
|
(10,708
|
)
|
$
|
1,440
|
||
Adjustments
to reconcile net income (loss) to net cash from operating
activities:
|
|||||||
Depreciation
and amortization
|
2,830
|
2,098
|
|||||
Amortization
of intangible assets
|
191
|
568
|
|||||
Stock-based
compensation
|
3,914
|
5,341
|
|||||
Deferred
income taxes
|
(47
|
)
|
(4,010
|
)
|
|||
Gain
on sale of investment
|
-
|
(3,217
|
)
|
||||
Other
|
-
|
250
|
|||||
Change
in operating assets and liabilities, net of amounts
acquired:
|
|||||||
Accounts
receivable trade
|
(3,020
|
)
|
3,868
|
||||
Inventories
|
3,994
|
(3,064
|
)
|
||||
Prepaids
and other
|
(985
|
)
|
(950
|
)
|
|||
Accounts
payable
|
(396
|
)
|
(5,140
|
)
|
|||
Accrued
liabilities
|
5,492
|
(3,713
|
)
|
||||
Income
taxes payable
|
903
|
819
|
|||||
Net
cash provided by (used in) operating activities
|
2,168
|
(5,710
|
)
|
||||
Cash
flows from (used in) investing activities:
|
|||||||
Purchase
of short-term investments
|
(22,344
|
)
|
(26,733
|
)
|
|||
Proceeds
on maturity of short-term investments
|
26,826
|
18,860
|
|||||
Additions
to property and equipment
|
(1,601
|
)
|
(1,223
|
)
|
|||
Proceeds
on sale of investment
|
-
|
3,919
|
|||||
Additions
to mask sets
|
(526
|
)
|
(435
|
)
|
|||
Additions
to intangible assets
|
(2,007
|
)
|
(297
|
)
|
|||
Net
cash from (used in) investing activities
|
348
|
(5,909
|
)
|
||||
Cash
flows from financing activities:
|
|||||||
Proceeds
from issue of common stock
|
154
|
926
|
|||||
Net
cash provided by financing activities
|
154
|
926
|
|||||
Increase
(decrease) in cash and cash equivalents
|
2,670
|
(10,693
|
)
|
||||
Cash
and cash equivalents, beginning of period
|
123,701
|
154,630
|
|||||
Cash
and cash equivalents, end of period
|
$
|
126,371
|
$
|
143,937
|
Property
and equipment
|
5
to 10 years
|
Software
|
1
to 5 years
|
Leasehold
improvements
|
Over
the term of the lease
|
Three
Months Ended June
30 |
|||||||
2007
|
2006
|
||||||
Stock
Option Plans:
|
|||||||
Risk-free
interest rates
|
4.9
|
%
|
5.1
|
%
|
|||
Volatility
|
55
|
%
|
71
|
%
|
|||
Expected
life in years
|
4.25
|
4.25
|
|||||
Employee
Stock Purchase Plans:
|
|||||||
Risk-free
interest rates
|
4.9
|
%
|
5.2
|
%
|
|||
Volatility
|
40
|
%
|
53
|
%
|
|||
Expected
life in years
|
0.75
|
1.25
|
|
Number
of
Options
(in
thousands)
|
Weighted
Average
Exercise
Price
Per Share
|
Weighted
Average
Remaining
Life
(Years)
|
|||||||
Outstanding,
March 31, 2007
|
6,354
|
$
|
15.61
|
5.90
|
||||||
Granted
|
358
|
8.67
|
||||||||
Exercised
|
(21
|
)
|
7.30
|
|||||||
Forfeited
|
(133
|
)
|
15.12
|
|||||||
Expired
|
(192
|
)
|
15.07
|
|||||||
|
||||||||||
Outstanding,
June 30, 2007
|
6,366
|
$
|
15.27
|
5.67
|
||||||
Exercisable,
March 31, 2007
|
4,239
|
$
|
16.52
|
5.72
|
||||||
Exercisable,
June 30, 2007
|
4,351
|
$
|
16.47
|
5.52
|
||||||
|
Number of Units
(in
thousands)
|
Weighted
Average
Grant-Date
Fair
Value
|
|||||
Nonvested
at March 31, 2007
|
689
|
$
|
13.15
|
||||
Granted
|
258
|
8.59
|
|||||
Vested
|
(63
|
)
|
9.24
|
||||
Forfeited
|
(18
|
)
|
13.11
|
||||
|
|||||||
Nonvested
at June 30, 2007
|
866
|
$
|
11.73
|
Three
Months Ended
|
|||||||
June
30
|
|||||||
|
2007
|
2006
|
|||||
Numerator
for basic and diluted earnings (loss) per share:
|
|
|
|||||
Net
income (loss)
|
$
|
(10,708
|
)
|
$
|
1,440
|
||
Denominator
for basic earnings (loss) per share:
|
|||||||
Weighted
average common shares
|
37,142
|
36,001
|
|||||
|
|||||||
Basic
earnings (loss) per share:
|
$
|
(0.29
|
)
|
$
|
0.04
|
||
|
|||||||
Denominator
for diluted earnings (loss) per share:
|
|||||||
Weighted
average common shares
|
37,142
|
36,001
|
|||||
Stock
options (1)
|
-
|
517
|
|||||
|
|||||||
Shares
used in computing diluted earnings (loss) per share
|
37,142
|
36,518
|
|||||
Diluted
earnings (loss) per share:
|
$
|
(0.29
|
)
|
$
|
0.04
|
||
|
|||||||
Anti-dilutive
potential common shares excluded
|
|||||||
from
above calculation
|
6,370
|
6,691
|
Three
Months Ended June
30 |
|||||||
2007
|
2006
|
||||||
United
States
|
$
|
314
|
$
|
158
|
|||
China
|
14,074
|
25,553
|
|||||
Europe
|
2,431
|
5,578
|
|||||
Japan
|
6,484
|
5,481
|
|||||
South
Korea
|
14,362
|
12,241
|
|||||
Taiwan
|
4,528
|
5,841
|
|||||
Rest
of world
|
1,791
|
1,047
|
|||||
$
|
43,984
|
$
|
55,899
|
|
June
30,
2007
|
March 31,
2007
|
|||||
United
States, including goodwill
|
$
|
96,690
|
$
|
94,716
|
|||
Rest
of world
|
15,109
|
16,103
|
|||||
|
|||||||
|
$
|
111,799
|
$
|
110,819
|
|
|
Three
Months Ended
June
30
|
|||||
|
2006
|
||||||
Customer
A
|
19
|
%
|
16
|
%
|
|||
Customer
B
|
12
|
%
|
-
|
||||
Customer
C
|
11
|
%
|
13
|
%
|
|||
Customer
D
|
-
|
12
|
%
|
|
June
30,
2007
|
March 31,
2007
|
|||||
Customer
1
|
31
|
%
|
36
|
%
|
|||
Customer
2
|
12
|
%
|
13
|
%
|
|||
Customer
3
|
12
|
%
|
-
|
|
June
30,
2007
|
March 31,
2007
|
|||||
Finished
goods
|
$
|
10,085
|
$
|
11,596
|
|||
Work-in-process
|
5,952
|
8,757
|
|||||
|
|||||||
|
16,037
|
20,353
|
|||||
Less:
Inventory reserve
|
(3,607
|
)
|
(3,929
|
)
|
|||
|
|||||||
|
$
|
12,430
|
$
|
16,424
|
Three
Months Ended
June
30
|
|||||||
2007
|
2006
|
||||||
Balance
at beginning of period
|
$
|
3,929
|
$
|
3,665
|
|||
Increase
(decrease) to provision
|
(321
|
)
|
236
|
||||
Write
offs
|
(1
|
)
|
(145
|
)
|
|||
Balance
at end of period
|
$
|
3,607
|
3,756
|
Three
Months Ended
June
30
|
|||||||
2007
|
2006
|
||||||
Balance
at beginning of period
|
$
|
210
|
$
|
164
|
|||
Increase
to provision
|
256
|
260
|
|||||
Processed
claims
|
(87
|
)
|
(78
|
)
|
|||
Balance
at end of period
|
$
|
379
|
$
|
346
|
|
June
30, 2007
|
||||||||||||
|
Cost
|
Accumulated
Amortization
|
Impairment
|
Net
|
|||||||||
Acquired
technology
|
$
|
50,577
|
$
|
44,144
|
$
|
3,425
|
$
|
3,008
|
|||||
Patents
|
5,117
|
1,303
|
—
|
3,814
|
|||||||||
Other
|
500
|
500
|
—
|
—
|
|||||||||
|
|||||||||||||
Total
|
$
|
56,194
|
$
|
45,947
|
$
|
3,425
|
$
|
6,822
|
|
March
31, 2007
|
||||||||||||
|
Cost
|
Accumulated
Amortization
|
Impairment
|
Net
|
|||||||||
Acquired
technology
|
$
|
48,792
|
$
|
44,009
|
$
|
3,425
|
$
|
1,358
|
|||||
Patents
|
5,132
|
1,484
|
—
|
3,648
|
|||||||||
Other
|
500
|
500
|
—
|
—
|
|||||||||
|
|||||||||||||
Total
|
$
|
54,424
|
$
|
45,993
|
$
|
3,425
|
$
|
5,006
|
For the year ended
March 31:
|
||||
2008
|
$
|
1,030
|
||
2009
|
1,324
|
|||
2010
|
1,106
|
|||
2011
|
447
|
|||
2012
|
240
|
|||
Thereafter
|
2,675
|
|||
|
||||
Total
|
$
|
6,822
|
9. |
Goodwill
|
|
June 30,
2007
|
March 31,
2007
|
|||||||||||||||||
|
Cost
|
Impairment
|
Net
|
Cost
|
Impairment
|
Net
|
|||||||||||||
Goodwill
|
$
|
181,981
|
$
|
(97,576
|
)
|
$
|
84,405
|
$
|
181,981
|
$
|
(97,576
|
)
|
$
|
84,405
|
|
June
30, 2007
|
March 31,
2007
|
|||||||||||||||||
|
Cost
|
Accumulated
Amortization
|
Net
|
Cost
|
Accumulated
Amortization
|
Net
|
|||||||||||||
Investments,
at cost
|
$
|
10,190
|
$
|
—
|
$
|
10,190
|
$
|
10,190
|
$
|
—
|
$
|
10,190
|
|||||||
Production
mask sets
|
9,456
|
4,432
|
5,024
|
8,930
|
3,760
|
5,170
|
|||||||||||||
|
|||||||||||||||||||
Total
|
$
|
19,646
|
$
|
4,432
|
$
|
15,214
|
$
|
19,120
|
$
|
3,760
|
$
|
15,360
|
· |
We
record estimated reductions to revenue for customer returns based
on
historical experience. A customer has a right to return products
only if
the product is faulty or upon termination of a distributor agreement,
although in certain circumstances we agree to accept returns if
replacement orders are placed for other products or to maintain our
business relationship. If actual customer returns increase, we may
be
required to recognize additional reductions to
revenue.
|
· |
We
record the estimated future cost of replacing faulty product as an
increase to cost of revenues. To date we have not experienced significant
returns related to quality. If returns increase as a result of changes
in
product quality, we may be required to recognize additional warranty
expense.
|
· |
We
maintain allowances for estimated losses resulting from the inability
of
our customers to make required payments and other disputes. If the
financial condition of our customers were to deteriorate, resulting
in an
impairment of their ability to make payments, additional allowances
may be
required. We have not suffered any significant loss in this
area.
|
· |
We
provide for inventory obsolescence reserves against our inventory
for
estimated obsolete or unmarketable inventory equal to the difference
between the cost of inventory and the estimated market value based
upon
assumptions about future demand and market conditions. If actual
market
conditions are less favorable than those we project, additional inventory
valuation reserves may be required.
|
· |
We
account for stock-based compensation in accordance with Statement
of
Financial Accounting Standards (SFAS) No. 123R, Share-Based
Payment.
Under
the provisions of SFAS No. 123R, stock based compensation is
estimated at the grant date based on the award’s fair-value as calculated
by the Black-Scholes option-pricing model and is recognized as expense
ratably over the requisite service period. The Black-Scholes model
requires various judgmental assumptions including volatility, and
expected
option life. In addition, share-based compensation expense is adjusted
to
reflect estimated forfeiture rates. If any of the assumptions change
significantly, stock-based compensation expense may differ materially
in
the future from that recorded in the current
period.
|
· |
We
provide for costs associated with settling litigation when we believe
that
we have a reasonable basis for estimating those costs. If actual
costs
associated with settling litigation differ from our estimates, we
may be
required to recognize additional
costs.
|
· |
Goodwill,
which represents the excess of cost over the fair value of net assets
acquired in business combinations, is tested annually for impairment
or
more frequently if events or changes in circumstances indicate that
the
carrying amount may not be recoverable. The impairment tests are
performed
in accordance with FASB Statement of Financial Accounting Standards
No. 142, “Goodwill and Other Intangible Assets”. Accordingly, an
impairment loss is recognized to the extent that the carrying amount
of
goodwill exceeds its implied fair value. This determination is made
at the
reporting unit level. We have assigned all goodwill to a single,
enterprise-level reporting unit. The impairment test consists of
two
steps. First, we determine the fair value of the reporting unit.
The fair
value is then compared to its carrying amount. Second, if the carrying
amount of the reporting unit exceeds its fair value, an impairment
loss is
recognized for any excess of the carrying amount of the reporting
unit’s
goodwill over the implied fair value of that goodwill. The implied
fair
value of goodwill would be determined by allocating the fair value
of the
reporting unit in a manner similar to a purchase price allocation
in
accordance with FASB Statement of Financial Accounting Standards
No. 141, “Business Combinations”. The residual fair value after this
allocation is the implied fair value of the reporting unit goodwill.
We
perform our annual impairment test on January 1st of each
year.
|
· |
We
adopted the provisions of the Financial Standards Accounting Board
(FASB)
Financial Interpretation No. 48, Accounting for Uncertainty in Income
Taxes (FIN 48), as of April 1, 2007. FIN48 clarifies the accounting
for
uncertainty in income taxes recognized in a company’s financial statements
in accordance with FASB Statement No. 109, Accounting for Income
Taxes.
The interpretation prescribes a recognition threshold and measurement
attribute criteria for the financial statement recognition and measurement
of a tax position taken or expected to be taken in a tax return.
The
interpretation also provides guidance on derecognition, classification,
interest and penalties, accounting in interim periods, disclosure
and
transition.
|
· |
From
time to time, we incur costs related to potential merger activities.
When
we assess that we will be the acquirer for accounting purposes in
such
transactions and we expect to complete the transaction, direct costs
associated with the acquisition are deferred and form part of the
final
purchase price. In the event these assessments change, any such deferred
costs would be expensed. Costs associated with other merger activities
are
expensed as incurred.
|
|
Three
months ended
June
30
(dollars
in thousands)
|
||||||
|
2007
|
2006
|
|||||
Total
revenue
|
$
|
43,984
|
$
|
55,899
|
|||
Gross
profit
|
16,953
|
22,659
|
|||||
Gross
profit percentage
|
38.5
|
%
|
40.5
|
%
|
|||
Revenue
by geography:
|
|||||||
United
States
|
$
|
314
|
$
|
158
|
|||
China
|
14,074
|
25,553
|
|||||
Europe
|
2,431
|
5,578
|
|||||
Japan
|
6,484
|
5,481
|
|||||
South
Korea
|
14,362
|
12,241
|
|||||
Taiwan
|
4,528
|
5,841
|
|||||
Rest
of world
|
1,791
|
1,047
|
|||||
|
|||||||
Total
revenue
|
$
|
43,984
|
$
|
55,899
|
|
Three
months ended
|
||||||||||||
|
June
30,
2007
|
June
30,
2006
|
|||||||||||
|
$000
|
%
of
Revenue
|
$000
|
%
of
Revenue
|
|||||||||
Research
and development
|
$
|
16,233
|
36.9
|
%
|
$
|
14,917
|
26.7
|
%
|
|
Three
months ended
|
||||||||||||
|
June
30,
2007
|
June
30,
2006
|
|||||||||||
|
$000
|
%
of
Revenue
|
$000
|
%
of
Revenue
|
|||||||||
Selling,
general and administrative
|
12,858
|
29.2
|
%
|
14,822
|
26.5
|
%
|
|
Three
months ended
|
||||||
|
June 30,
2007
|
June 30,
2006
|
|||||
|
$000
|
$000
|
|||||
Interest
income
|
2,321
|
2,164
|
|||||
Other
income
|
—
|
3,217
|
|||||
|
|||||||
Interest
and other income
|
2,321
|
5,381
|
|
Three
months ended
|
||||||
|
June 30,
2007
|
June 30,
2006
|
|||||
|
$000
|
$000
|
|||||
Current
income tax expense
|
938
|
871
|
|||||
Deferred
income tax expense (recovery)
|
(47
|
)
|
(4,010
|
)
|
|||
|
|||||||
Total
|
891
|
(3,139
|
)
|
|
June
30,
2007
|
March 31,
2007
|
|||||
(Dollars
in thousands)
|
|||||||
Cash
and cash equivalents
|
$
|
126,371
|
$
|
123,701
|
|||
Short-term
investments
|
60,067
|
64,549
|
|||||
|
|||||||
Total
cash, cash equivalents and short-term investments
|
$
|
186,438
|
$
|
188,250
|
|||
|
|||||||
Working
capital
|
$
|
194,441
|
$
|
202,108
|
|||
Current
ratio
|
6.68
|
8.13
|
|||||
Receivables
days outstanding
|
47
|
46
|
|||||
Inventory
turnover days
|
42
|
61
|
Payments
Due By Fiscal Year ($000)
|
|||||||||||||||||||
TOTAL
|
|
2008
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|||||||||
Operating
Leases
|
$
|
14,140
|
$
|
4,092
|
$
|
4,512
|
$
|
2,571
|
$
|
1,900
|
$
|
1,065
|
· |
Our
ability to gain and maintain “design wins” with our customers and ramp up
new designs into production
volumes;
|
· |
Our
inventory levels, and customer inventory levels of our products;
|
· |
Growth
rate of the flat-panel TV and LCD monitor and DisplayPort product
markets,
our customers’ share of those markets, and the success of our customers’
products into which we are
designed;
|
· |
Seasonal
consumer demand for flat-panel TV, high definition TV (“HDTV”) and LCD
monitors into which our products are
incorporated;
|
· |
Changes
in the mix of products we sell;
|
· |
Increased
competition and competitive pricing pressures;
|
· |
The
timing of new product introductions by us and our
competitors;
|
· |
Availability
and pricing of panels and other components for flat-panel TVs and
LCD
monitors;
|
· |
Changes
in product costs or manufacturing yields or available production
capacity
at our fabrication facilities;
|
· |
Changes
in our expected operating expenses and ;
|
· |
Foreign
exchange rate fluctuations, research and development tax credits
and other
factors that impact tax
rates.
|
· |
In
May 2006, Tzoyao Chan, our Senior Vice President, Product Development,
resigned and Behrooz Yadegar joined the company as his
successor.
|
· |
In
July 2006, Ken Murray, our Vice President, Human Resources, resigned
and
we appointed a successor.
|
· |
In
August 2006, Mohammad Tafazzoli, our Senior Vice President, Operations,
resigned and we appointed a
successor.
|
· |
In
September 2006, Hildy Shandell, our Senior Vice President, Corporate
Development, joined the company.
|
· |
In
October 2006, Raphael Mehrbians, our Senior Vice President, Product
Marketing, resigned and we appointed two Vice Presidents of Marketing,
but
have not yet appointed a Senior Vice
President.
|
· |
In
May 2007, Michael Healy, our Chief Financial Officer, resigned and
we have
not yet appointed a successor. Linda Millage is currently serving
as our
interim Principal Accounting Officer in addition to her role as Senior
Director of Finance and Worldwide Controller while we conduct an
executive
search for a Chief Financial
Officer.
|
· |
In
June 2007, Anders Frisk, our Executive Vice President, resigned and
his
responsibilities have been assigned to Hildy Shandell and other executive
management.
|
· |
A
continued reduction in the costs of products in the respective
markets;
|
· |
The
availability, at a reasonable price, of components required by such
products (such as LCD
panels); and
|
· |
The
emergence of competing technologies and standards.
|
· |
Lack
of adequate capacity during periods of excess
demand;
|
· |
Increased
manufacturing cost or the unavailability of product in the event
that
manufacturing capacity becomes
constrained;
|
· |
Reduced
control over manufacturing and delivery schedules of
products;
|
· |
Reduced
control over quality assurance and reliability;
|
· |
Difficulty
of managing manufacturing costs and
quantities;
|
· |
Potential
misappropriation of intellectual
property; and
|
· |
Political
or environmental risks (including earthquake and other natural disasters)
in Taiwan, where the manufacturing facilities are
located.
|
· |
Unexpected
changes in, or impositions of, legislative or regulatory
requirements;
|
· |
Delays
resulting from difficulty in obtaining export licenses for certain
technology, tariffs, quotas and other trade barriers and
restrictions;
|
· |
Imposition
of additional taxes and penalties;
|
· |
The
burdens of complying with a variety of foreign
laws; and
|
· |
Other
factors beyond our control, including acts of terrorism, which may
delay
the shipment of our products, impair our ability to travel or our
ability
to communicate with foreign
locations.
|
· |
Fluctuations
in currency exchange rates, tariffs, import restrictions and other
trade
barriers;
|
· |
Unexpected
changes in regulatory requirements;
|
· |
Political
and economic instability;
|
· |
Exposure
to litigation or government investigations in these
countries;
|
· |
Longer
payment periods;
|
· |
Ability
to enforce contracts or payment terms;
|
· |
Potentially
adverse tax consequences;
|
· |
Export
license requirements; and
|
· |
Unexpected
changes in diplomatic and trade
relationships.
|
· |
We
may experience difficulty in assimilating the acquired operations
and
employees;
|
· |
We
may be unable to retain the key employees of the acquired
operations;
|
· |
The
acquisitions may disrupt our ongoing business;
|
· |
We
may not be able to incorporate successfully the acquired technologies
and
operations into our business and maintain uniform standards, controls,
policies and procedures;
|
· |
We
may lack the experience to enter into new markets, products or
technologies; and
|
· |
An
acquisition we choose to pursue may require a significant amount
of
capital, which limits our ability to pursue other strategic
opportunities.
|
· |
Stop
selling the products or using the technology that are allegedly
infringing;
|
· |
Attempt
to obtain a license to the relevant intellectual property, which
license
may not be available on commercially reasonable terms or at
all;
|
· |
Incur
substantial costs including defense costs, settlements and/or
judgments; and
|
· |
Attempt
to redesign those products that are allegedly
infringing.
|
Exhibit
Number
|
Exhibit
Description
|
|
2.1(1)
|
Agreement
and Plan of Merger and Reorganization, dated as of September 27,
2001, by
and between Genesis Microchip Incorporated and Sage,
Inc.
|
|
2.2(1)
|
Share
Exchange and Arrangement Agreement and Plan of Arrangement by and
among
the Registrant, Genesis Microchip Nova Scotia Corp., and Genesis
Microchip
Incorporated.
|
|
2.3(2)
|
Agreement
and Plan of Merger, dated as of March 17, 2003, among Genesis Microchip
Inc., Display Acquisition Corporation and Pixelworks, Inc. (with
Forms of
Voting Agreements).
|
|
3.1(1)
|
Certificate
of Incorporation of the Registrant.
|
|
3.2(3)
|
Amended
and Restated Bylaws of the Registrant.
|
|
3.3(4)
|
Certificate
of Designation of Rights, Preferences and Privileges of Series A
Participating Preferred Stock of the Registrant.
|
|
4.1(1)
|
Form
of Common Stock Certificate of the Registrant.
|
|
4.2(4)
|
Preferred
Stock Rights Agreement, dated as of June 27, 2002, between the Registrant
and Mellon Investor Services, L.L.C., as amended on March 16,
2003.
|
|
10.1(5)*
|
Offer
Letter of Employment with Anders Frisk, dated February 15,
2000.
|
|
10.2(5)*
|
Separation
Agreement and Release with Chandrashekar Reddy.
|
|
10.3(5)*
|
Consulting
Agreement with Chandrashekar Reddy.
|
|
10.4(6)*
|
1987
Stock Option Plan.
|
|
10.5
|
Intentionally
omitted.
|
|
10.6(21)*
|
1997
Employee Stock Purchase Plan, as last amended on August 24,
2005.
|
|
10.7(21)*
|
1997
Non-Employee Stock Option Plan, as last amended on June 8,
2007.
|
|
10.8(21)*
|
2000
Nonstatutory Stock Option Plan, as amended on June 8,
2007.
|
|
10.9(21)*
|
2001
Nonstatutory Stock Option Plan, as amended on June 8,
2007.
|
|
10.10(6)*
|
Paradise
Electronics, Inc. 1997 Employee Stock Option Plan.
|
|
10.11(6)*
|
Sage,
Inc. Second Amended and Restated 1997 Stock Plan.
|
|
10.12(6)*
|
2001
Employee Stock Purchase Loan Plan (for non-officers).
|
|
10.13(7)*
|
Offer
Letter with Michael Healy.
|
|
10.14(8)*
|
CFO
“Tier 1” Change of Control Severance Agreement with Michael
Healy.
|
|
10.15(8)*
|
CEO
“Tier 1” Change of Control Severance Agreement with Elias
Antoun.
|
|
10.15(8)*
|
Form
of director and officer indemnification agreement.
|
|
10.16(9)*
|
2003
Stock Plan.
|
|
10.17(10)*
|
Form
of 2000 Nonstatutory Stock Option Plan Stock Option Agreement with
Nonemployee Directors.
|
|
10.18(10)*
|
Form
of 2000 Nonstatutory Stock Option Plan International Stock Option
Agreement.
|
|
10.19(10)*
|
Form
of 2000 Nonstatutory Stock Option Plan Stock Option Agreement for
China.
|
|
10.20(11)*
|
Amendment
No. 1 to Separation Agreement and Release with Chandrashekar Reddy,
dated
November 10, 2004.
|
|
10.21(12)*
|
Offer
Letter of Employment with Elias Antoun, dated November 10,
2004.
|
|
10.22(13)*
|
1997
Employee Stock Option Plan, as amended on September 19, 2005, and
form of
Notice of Grant of Restricted Stock Units.
|
|
10.24(14)*
|
Offer
Letter with Behrooz Yadegar, dated April 11, 2006.
|
|
10.25(15)*
|
Fiscal
Year 2007 Executive Bonus Plan, dated June 10,
2006.
|
10.26(16)*
|
Separation
Agreement and Release with Tzoyao Chan, dated July 27,
2006
|
|
10.27(17)*
|
Offer
Letter with Hildy Shandell, dated August 30, 2006
|
|
10.28(17)*
|
Change
in Control Severance Agreement with Hildy Shandell, dated September
12,
2006
|
|
10.29(18)
|
Lease
Agreement and Lease Rider Agreement with Transamerica Occidental
Life
Insurance Company, dated September 18, 2006.
|
|
10.30(19)*
|
Separation
Agreement and Release with Raphael Mehrbians, dated October 20,
2006.
|
|
10.31(20)
|
Settlement
and License Agreement with Silicon Image, Inc., dated December 21,
2006.
|
|
10.32(8)*
|
“Tier
2” Change of Control Agreement with Anders Frisk.
|
|
10.33(8)*
|
Form
of “Tier 2” Change of Control Severance Agreement.
|
|
10.34
|
Summary
of Compensation Plan of Non-Employee Board Members.
|
|
10.35*
|
Offer
Letter with Linda Millage, effective May 1, 2007.
|
|
31.1
|
Certification
of Chief Executive Officer, as required by Rule 13a-14(a) or Rule
15d-14(a) of the Securities Exchange Act of 1934.
|
|
31.2
|
Certification
of Principal Accounting Officer, as required by Rule 13a-14(a) or
Rule
15d-14(a) of the Securities Exchange Act of 1934.
|
|
32.1
|
Certification
of Chief Executive Officer and Principal Accounting Officer, as required
by Section 1350 of Chapter 63 of Title 18 of the United States Code
(18 U.S.C. 1350).
|
(1)
|
Incorporated
by reference to the Registrant’s Registration Statement on Form S-4
(File No. 333-72202) filed with the Securities and Exchange
Commission on October 25, 2001, as amended.
|
(2)
|
Incorporated
by reference to the Registrant’s Current Report on Form 8-K filed
with the Securities and Exchange Commission on March 20, 2003.
|
(3)
|
Incorporated
by reference to the Registrant’s Annual Report on Form 10-K filed
with the Securities and Exchange Commission on July 1, 2002, as
amended.
|
(4)
|
Incorporated
by reference to the Registrant’s Registration Statement on
Form 8-A12G filed with the Securities and Exchange Commission on
August 5, 2002, as amended by the Registrant’s Statement on
Form 8-12G/A filed with the Securities and Exchange Commission on
March 31, 2003.
|
(5)
|
Incorporated
by reference to the Registrant’s Annual Report on Form 10-K filed
with the Securities Exchange Commission on June 20, 2003.
|
(6)
|
Incorporated
by reference to the Registrant’s Registration Statement on Form S-8
filed with the Securities Exchange Commission on February 21, 2002.
|
(7)
|
Incorporated
by reference to the Registrant’s Quarterly Report on Form 10-Q filed with
the Securities Exchange Commission on February 13, 2004.
|
(8)
|
Incorporated
by reference to the Registrant’s Current Report on Form 8-K filed
with the Securities and Exchange Commission on March 7, 2007.
|
(9)
|
Incorporated
by reference to the Registrant’s Registration Statement on Form S-8
filed with the Securities Exchange Commission on October 15, 2003.
|
(10)
|
Incorporated
by reference to the Registrant’s Quarterly Report on Form 10-Q filed with
the Securities Exchange Commission on November 9, 2004.
|
(11)
|
Incorporated
by reference to the Registrant’s Current Report on Form 8-K filed
with the Securities Exchange Commission on November 15, 2004.
|
(12)
|
Incorporated
by reference to the Registrant’s Current Report on Form 8-K filed
with the Securities Exchange Commission on November 19, 2004.
|
(13)
|
Incorporated
by reference to the Registrant’s Quarterly Report on Form 10-Q filed with
the Securities Exchange Commission on November 8, 2005.
|
(14)
|
Incorporated
by reference to the Registrant’s Current Report on Form 8-K filed
with the Securities Exchange Commission on May 10, 2006.
|
(15)
|
Incorporated
by reference to the Registrant’s Annual Report on Form 10-K filed
with the Securities Exchange Commission on June 14, 2006.
|
(16)
|
Incorporated
by reference to the Registrant’s Current Report on Form 8-K filed
with the Securities Exchange Commission on August 1, 2006.
|
(17)
|
Incorporated
by reference to the Registrant’s Current Report on Form 8-K filed
with the Securities Exchange Commission on September 18, 2006.
|
(18)
|
Incorporated
by reference to the Registrant’s Current Report on Form 8-K filed
with the Securities Exchange Commission on September 19, 2006.
|
(19)
|
Incorporated
by reference to the Registrant’s Current Report on Form 8-K filed
with the Securities Exchange Commission on October 23, 2006.
|
(20)
|
Incorporated
by reference to the Registrant’s Current Report on Form 8-K filed
with the Securities Exchange Commission on December 22, 2006.
|
(21)
|
Incorporated
by reference to the Registrant’s Annual Report on Form 10-K filed
with the Securities Exchange Commission on June 12, 2007.
|
*
|
Identifies
a management contract or compensatory plan of arrangement required
to be
filed as an exhibit to this report pursuant to Item 14(c) of this
report.
|
GENESIS
MICROCHIP INC.
|
||
|
|
|
Date: August 9, 2007 | By: | /s/ LINDA MILLAGE |
Linda
Millage
|
||
Principal
Accounting Officer
|
||
(Authorized
Officer to sign on behalf of Registrant & Principal Accounting
Officer)
|