Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. MATTSON TECHNOLOGY INC (928421) 10-Q published on May 06, 2016 at 9:08 am
Reporting Period: Mar 26, 2016
At the Effective Time, each Company Option that is outstanding, unvested and held by an employee who continues employment with Parent or any of its subsidiaries (including the Surviving Corporation) after the Merger will either (i) conditioned upon receipt of an executed Award Surrender Agreement by the Company at least one business day prior to the Effective Time, be converted into the right to receive an amount in cash determined by multiplying (a) the aggregate number of shares of Company Common Stock represented by such Company Option immediately prior to the Effective Time by (b) the Merger Consideration, less the per share exercise price of such Company Option (the “Unvested Option Consideration”), or (ii) be assumed by the Surviving Corporation, on the same terms, conditions and vesting schedule applicable to such Company Option immediately prior to the Effective Time (an “Assumed Option”), except that (x) the number of shares of the Surviving Corporation’s common stock for which such Assumed Option will be exercisable will equal the product (rounded down to the next whole number, with no cash paid for any fractional share eliminated by such rounding) of the number of shares of Company Common Stock that were issuable upon exercise of such Company Option immediately prior to the Effective Time and the Exchange Ratio (as defined in the Merger Agreement) and (y) the per share exercise price for the shares of the Surviving Corporation’s common stock issuable upon exercise of such Assumed Option will equal the quotient (rounded up to the next whole cent) obtained by dividing the exercise price per share of such Company Option immediately prior to the Effective Time by the Exchange Ratio. The Unvested Option Consideration will be subject to the same vesting restrictions and continued service requirements applicable to such Company Option as are in effect immediately prior to the Effective Time, except that any portion of the Unvested Option Consideration remaining outstanding as of December 31, 2016 will accelerate in full and be paid as of such date.
Net cash used in operations was $15.9 million for the three months ended March 27, 2016, comprised primarily of $4.0 million in net loss and $9.2 million of cash decreases reflected in the net change in assets and liabilities, partially offset by $1.3 million in non-cash charges. Cash flow decreases resulting from the net change in assets and liabilities consisted primarily of a $5.3 million increase in accounts receivable and advance billings attributable to the timing of shipments and collections; a $3.3 million decrease in accrued compensation and benefits and other current liabilities, which primarily consists of a decrease in accrued compensation and benefits related to the February 2016 payout of bonuses earned in 2015 and a $0.5 million decrease in warranty reserves related to the lower revenue levels during the three months ended March 27, 2016; a $2.9 million decrease in accounts payable largely attributable to the timing of purchases and payments to vendors and service providers; partially offset by a $0.9 million decrease in inventory related to the consumption of on-hand inventory and an overall decrease in inventory purchases as a result of lower revenue levels during the first quarter of 2016; a $0.8 million decrease in prepaid expenses and other assets; a $0.4 million increase in deferred revenue; and a $0.2 million increase in other liabilities. Non-cash charges consisted
primarily of $0.8 million of depreciation and amortization and $0.5 million of stock-based compensation.
On March 14, 2016, Mattson, Mattson’s Board of Directors and Merger Sub entered into a Memorandum of Understanding (the “MOU”) with the plaintiffs in the actions, which sets forth the parties’ agreement in principle to a settlement of these actions.
As explained in the MOU, the Company, the members of the Company’s Board of Directors and Merger Sub have agreed to the settlement solely to avoid the expense, disruption, and distraction of further litigation and without admitting any liability or wrongdoing. The MOU contemplates that the parties will seek to enter into a stipulation of settlement providing for the certification of a mandatory non-opt-out class, for settlement purposes only, that includes any and all record and beneficial owners of the Company’s common stock (excluding defendants, their subsidiary companies, affiliates, assigns, and members of their immediate families) during the period beginning on September 15, 2015, through the effective date of the consummation of the merger, including any and all of their respective successors in interest, predecessors, representatives, trustees, executors, administrators, heirs, assigns or transferees, immediate and remote, and any person or entity acting for or on behalf of, or claiming under, any of them, and each of them and a release of certain claims relating to the merger as set forth in the MOU. The claims will not be released until such stipulation of settlement is approved by the California Superior Court in the County of Alameda. There can be no assurance that the parties will ultimately enter into a stipulation of settlement or that the court will approve such settlement even if the parties were to enter into such stipulation.
The semiconductor industry historically has experienced periodic downturns due to sudden changes in customers’ requirements for new manufacturing capacity and advanced technology, which depend in part on customers’ capacity utilization, production volumes, access to affordable capital, end-user demand, consumer buying patterns, and inventory levels relative to demand, as well as the rate of technology transitions, and general economic conditions. Our business depends, in significant part, upon capital expenditures by manufacturers of semiconductor devices, including manufacturers that open new or expand existing facilities. Periods of overcapacity and reductions in capital expenditures by our customers cause decreases in demand for our products. This could result in significant under-utilization in our factories. If existing customer fabrication facilities are not expanded and new facilities are not built, we may be unable to generate significant new orders and sales for our systems. During periods of declining demand for semiconductor manufacturing equipment, our customers typically reduce purchases, delay delivery of ordered products and/or cancel orders, resulting in reduced net sales and backlog, delays in revenue recognition and excess inventory for us. Increased price competition may also result as we compete for the smaller demand in the market, causing pressure on our gross margin and net income.