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Mindspeed Technologies, Inc. Message Board

  • lackeygarrett lackeygarrett May 9, 2013 10:41 AM Flag

    From latest 10Q filing

    5/8/2013

    As of March 29, 2013, we were obligated to make a $1.9 million net earnout payment due to the achievement of a product development milestone, to the shareholders of picoChip. We were also obligated to make a payment of approximately $3.5 million to the picoChip escrow account related to a research and development tax credit. On April 26, 2013, we and the picoChip selling shareholders' representative entered into a settlement agreement whereby the parties agreed to settle all outstanding obligations under the acquisition agreement, including escrow claims, earnout payments and the net asset adjustment on the purchase price paid by us in connection with the acquisition.

    In connection with the settlement, we were relieved of our $1.9 million net earnout payment obligation, $3.5 million of payables owed to the escrow account related to a refundable R&D tax credit and received $1.0 million net in cash.

    This settlement will result in the recording of other income of $6.4 million during the third quarter of fiscal 2013. This settlement agreement releases us, the selling shareholders and the selling shareholders' representative from all contingent consideration, claims and potential claims between the parties and the escrow account has been terminated.

    We believe that our existing cash balances, cash expected to be generated from operations and our revolving credit facility will be sufficient to fund our operations, anticipated capital expenditures, working capital and other financing requirements, including principal and interest payments on debt obligations, for at least the next 12 months. We have principal payments of $375,000 due each quarter during calendar 2013 on our term loan with Silicon Valley Bank and $15.0 million of principal payments due in August 2013 on our 6.50% convertible notes. We have no other principal payments on debt obligations for the next 12 fiscal months. We may acquire our debt securities through privately negotiated transactions, tender offers, exchange offers (for new debt or other securities), redemptions or otherwise, upon such terms and at such prices as we may determine appropriate. We will need to continue a focused program of capital expenditures to meet our research and development and corporate requirements. We may also consider acquisition opportunities to extend our technology portfolio and design expertise and to expand our product offerings. In order to fund capital expenditures, increase our working capital, re-pay debt or complete any acquisitions, we may seek to obtain additional debt or equity financing. We may also need to seek additional debt or equity financing if we experience downturns or cyclical fluctuations in our business that are more severe or longer than anticipated, or if we fail to achieve anticipated revenue and expense levels. However, we cannot assure you that such financing will be available to us on favorable terms, or at all, particularly in light of recent economic conditions in the capital markets.

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