SC 13D 1 tmtasc13d.htm FORM 13D United States Securities & Exchange Commission EDGAR Filing


SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


SCHEDULE 13D

(Rule 13d-2-101)


INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND
AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)


(Amendment No. __)1


Transmeta Corporation

(Name of Issuer)


Common Stock

(Title of Class of Securities)


 89376R2080

(CUSIP Number)


Riley Investment Management LLC

Attn: Bryant R. Riley

11100 Santa Monica Blvd.

Suite 810

Los Angeles, CA 90025

(310) 966-1445

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)


November 8, 2007

(Date of Event which Requires Filing of this Statement)


If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box: ¨


Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent.


(Continued on following pages)



———————

1

The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.


The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).




CUSIP No. 89376R208

13D

Page 2




1

NAME OF REPORTING PERSON

S.S. OR IRS. IDENTIFICATION NO. OF ABOVE PERSON


Riley Investment Partners Master Fund, L.P.

2

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*

(a) [   ]

(b) [X]

3

SEC USE ONLY


4

SOURCE OF FUNDS*

WC

5

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

[   ]

6

CITIZENSHIP OR PLACE OF ORGANIZATION


Cayman Islands

NUMBER OF

 

SHARES

7

SOLE VOTING POWER


346,836

BENEFICIALLY


OWNED BY

8

SHARED VOTING POWER


-0-

EACH


REPORTING

9

SOLE DISPOSITIVE POWER


346,836

PERSON


WITH

10

SHARED DISPOSITIVE POWER


-0-

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON


346,836

12

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES SHARES*

[   ]

13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)


 2.9%1

14

TYPE OF REPORTING PERSON*


PN

———————

1

Based on 12,021,388 shares of common stock of Transmeta Corporation (the “Issuer”) outstanding at November 2, 2007, as reported in the Issuer’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007 filed with the Securities and Exchange Commission on November 8, 2007.




CUSIP No. 89376R208

13D

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1

NAME OF REPORTING PERSON

S.S. OR IRS. IDENTIFICATION NO. OF ABOVE PERSON


Riley Investment Management LLC

2

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*

(a) [   ]

(b) [X]

3

SEC USE ONLY


4

SOURCE OF FUNDS*

AF

5

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

[   ]

6

CITIZENSHIP OR PLACE OF ORGANIZATION


Delaware

NUMBER OF

 

SHARES

7

SOLE VOTING POWER


346,8361

BENEFICIALLY


OWNED BY

8

SHARED VOTING POWER


347,6812

EACH


REPORTING

9

SOLE DISPOSITIVE POWER


346,8361

PERSON


WITH

10

SHARED DISPOSITIVE POWER


347,6812

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON


683,9982

12

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES SHARES*

[X]

13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)


 5.7%3

14

TYPE OF REPORTING PERSON*


IA

———————

1

Because Riley Investment Management LLC has sole investment and voting power over 346,836 shares of Common Stock held by Riley Investment Partners Master Fund, L.P., Riley Investment Management LLC may be deemed to have beneficial ownership of these shares.

2

Riley Investment Management LLC has shared voting and dispositive power over 347,681 shares of Common Stock held by its investment advisory clients, 337,162 of which are held by investment advisory accounts indirectly affiliated with Mr. Riley or Riley Investment Partners Master Fund, L.P. However, Riley Investment Management LLC disclaims beneficial ownership of the non-affiliated shares.

3

Based on 12,021,388 shares of common stock of Transmeta Corporation (the “Issuer”) outstanding at November 2, 2007, as reported in the Issuer’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007 filed with the



CUSIP No. 89376R208

13D

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Securities and Exchange Commission on November 8, 2007.



CUSIP No. 89376R208

13D

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1

NAME OF REPORTING PERSON

S.S. OR IRS. IDENTIFICATION NO. OF ABOVE PERSON


B. Riley & Co., LLC

2

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*

(a) [   ]

(b) [X]

3

SEC USE ONLY


4

SOURCE OF FUNDS*

WC

5

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

[   ]

6

CITIZENSHIP OR PLACE OF ORGANIZATION


Delaware

NUMBER OF

 

SHARES

7

SOLE VOTING POWER


-0-

BENEFICIALLY


OWNED BY

8

SHARED VOTING POWER


25,0001

EACH


REPORTING

9

SOLE DISPOSITIVE POWER


-0-

PERSON


WITH

10

SHARED DISPOSITIVE POWER


25,0001

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON


25,000

12

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES SHARES*

[   ]

13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)


.2%2

14

TYPE OF REPORTING PERSON*


BD

———————

1

B. Riley & Co., LLC has shared voting and dispositive power over 25,000 shares of Common Stock held by a managed account, with which it is indirectly affiliated.

2

Based on 12,021,388 shares of common stock of Transmeta Corporation (the “Issuer”) outstanding at November 2, 2007, as reported in the Issuer’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007 filed with the Securities and Exchange Commission on November 8, 2007.




CUSIP No. 89376R208

13D

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1

NAME OF REPORTING PERSON

S.S. OR IRS. IDENTIFICATION NO. OF ABOVE PERSON


Bryant R. Riley

2

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*

(a) [   ]

(b) [X]

3

SEC USE ONLY


4

SOURCE OF FUNDS*

AF

5

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

[   ]

6

CITIZENSHIP OR PLACE OF ORGANIZATION


United States

NUMBER OF

 

SHARES

7

SOLE VOTING POWER


346,8361

BENEFICIALLY


OWNED BY

8

SHARED VOTING POWER


372,6812

EACH


REPORTING

9

SOLE DISPOSITIVE POWER


346,8361

PERSON


WITH

10

SHARED DISPOSITIVE POWER


372,6812

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON


708,9982

12

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES SHARES*

[X]

13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)


5.9%3

14

TYPE OF REPORTING PERSON*


IN

———————

1

Because Riley Investment Management LLC has sole voting and investment power over Riley Investment Partners Master Fund, L.P.’s security holdings and Mr. Riley, in his role as the sole manager of Riley Investment Management LLC, controls its voting and investment decisions, each of Riley Investment Partners Master Fund, L.P., Riley Investment Management LLC, and Mr. Riley may be deemed to have beneficial ownership of the 346,836 shares of Common Stock held by Riley Investment Partners Master Fund, L.P.

2

Riley Investment Management LLC has shared voting and dispositive power over 347,681 shares of Common Stock held by its investment advisory clients, 337,162 of which are held by investment advisory accounts indirectly affiliated with Mr. Riley or Riley Investment Partners Master Fund, L.P. Although Mr. Riley controls Riley Investment Management LLC’s voting and investment decisions for its investment advisory clients, Mr. Riley disclaims beneficial ownership of the non-affiliated shares. B. Riley & Co., LLC has shared voting and dispositive power over 25,000 shares of Common Stock.



CUSIP No. 89376R208

13D

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Mr. Riley is the Chairman and sole equity owner of B. Riley & Co., LLC.

3

Based on 12,021,388 shares of common stock of Transmeta Corporation (the “Issuer”) outstanding at November 2, 2007, as reported in the Issuer’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007 filed with the Securities and Exchange Commission on November 8, 2007.





CUSIP No. 89376R208

13D

Page 8




Item 1.

Security and Issuer


Common Stock of Transmeta Corporation (“Common Stock”)

2540 Mission College Boulevard

Santa Clara, CA 95054


Item 2.

Identity and Background


(a)(i)

Riley Investment Partners Master Fund, L.P. (Cayman Islands limited partnership)

Riley Investment Management LLC (Delaware limited liability company)

Mr. Bryant R. Riley (individual residing in California)


(ii)

B. Riley & Co., LLC (Delaware limited liability company)


 (b)(i)

11100 Santa Monica Blvd.

Suite 810

Los Angeles, CA 90025


 (ii)

11100 Santa Monica Blvd.

Suite 800

Los Angeles, CA 90025


(c)

Mr. Riley manages and owns all of the outstanding membership interests of Riley Investment Management LLC (“RIM”), an SEC registered investment adviser. RIM is the investment adviser to and general partner of Riley Investment Partners Master Fund, L.P. (“RIP”). RIM is the investment advisor to other clients pursuant to investment advisory agreements. Mr. Riley is the Chairman and sole equity owner of B. Riley & Co., LLC (“BRC”), a FINRA registered broker dealer.


 (d)

N/A


 (e)

N/A


 (f)

United States


Item 3.

Source or Amount of Funds or Other Consideration


The Reporting Persons’ purchases were made with their respective funds. See the responses to Row 4 set forth for such Reporting Person on the cover pages hereto.


Item 4.

Purpose of the Transaction


The Reporting Persons acquired Issuer’s securities reported on this Schedule 13D because they believed such securities represented an attractive investment. The Reporting Persons believe the Issuer's public market valuation reflects a negative enterprise value despite strong prospects for positive free cash flow in 2008 and the five years for which it will be paid license fees under its recent agreement with Intel Corporation.


Under RIM's calculations, after receipt of Intel's first $150 million payment, the Issuer will have close to $180 million in cash on its balance sheet. This represents over $13 per share, assuming 13.7 million fully diluted shares (which is based on 12.0 million shares outstanding, 713,470 shares into which the Series B Preferred Stock is convertible and shares underlying 1 million warrants at an exercise price of $9 per share). In 2008, an estimated $20 to 25 million operating spend appears to be approximately covered by the $20 million per year Intel license fee installment, services revenue, and expected royalties from NEC for the Medity2 chipset. The



CUSIP No. 89376R208

13D

Page 9



foregoing does not factor in interest income on the Issuer's short-term investments, which based on a conservative estimate would be in the high single-digits millions. Accordingly, RIM believes an investment in Issuer today is akin to a risk-free call on the Issuer entering more partner agreements with IDMs and others who realize value of the Issuer's technology, which has been now validated by the Intel agreement.


With that backdrop, RIM urges the Issuer to carefully review all options to enhance shareholder value.  Among these would be potentially selling the intellectual property to a company who can better leverage the costs associated with pursuing this strategy, delisting from NASDAQ and/or going "dark" to significantly reduce public company costs, and/or engaging in a significant dutch tender.  Given RIM's view that an investment in the Issuer is akin to a risk-free call on the intellectual property, RIM would discourage and view unfavorably any acquisitions.


Depending on various factors, the Reporting Persons may take such actions as they deem appropriate including, without limitation, engaging in discussions with management and the Board of Directors of the Issuer, communicating with other stockholders, seeking representation on the Board of Directors of the Issuer, seeking to influence the performance of the Issuer and the activities of its Board of Directors, making other proposals to the Issuer concerning the capitalization and operations of the Issuer, purchasing additional shares of Common Stock or selling some or all of their shares of Common Stock, seeking to make a significant equity investment or to otherwise acquire the Issuer.


The Reporting Persons may also determine to change their investment intent with respect to the Issuer in the future. The Reporting Persons intend to vote their respective shares of Common Stock individually as each Reporting Person deems appropriate from time to time. In determining whether to sell or retain their shares of Common Stock, the applicable Reporting Person will take into consideration such factors as it deems relevant, including without limitation Issuer's business and prospects, anticipated future developments, existing and anticipated market conditions, general economic conditions, and other opportunities available to the Reporting Person. The Reporting Persons reserve the right to acquire additional securities from Issuer in the open market, in privately negotiated transactions, or otherwise, to dispose of all or a portion of its holdings in Issuer's securities, or to change their intention with respect to any or all of the matters referred to in this Item 4.


Item 5.

Interest in Securities of the Issuer


(a)

With respect to each Reporting Person, see the response set forth in Rows 11 and 13, including the footnotes thereto.

(b)

See Item 5(a) and, with respect to each Reporting Person, the responses to Rows 7 through 10 set forth for such Reporting Person on the cover pages hereto.

(c)

In the ordinary course of business, BRC effects transactions in connection with its market making activities, as well as for customer transactions. The other transactions effected in Common Stock in the past 60 days are set forth on Exhibit A.

(d)

RIM’s advisory clients, and not any of the Reporting Persons, are entitled to any dividends or proceeds paid with respect to the shares owned by them.

(e)

Not applicable.


Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer


The relationships between Mr. Riley, RIM, RIP and BRC are described above under Item 2(c) above. The relationship between RIM and other investment advisory clients are described under Item 2(c) above.



CUSIP No. 89376R208

13D

Page 10





Item 7.

Material to be filed as Exhibits



Exhibit A

Certain Transactions in Common Stock






CUSIP No. 89376R208

13D

Page 11



SIGNATURE


After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.


Date: November 19, 2007


 

 

Riley Investment Partners Master Fund, L.P.

 

 

 

By: Riley Investment Management LLC, its General

 

 

 

 Partner

  

 

 

 

 

 

By:

/s/ Bryant R. Riley

 

 

 

Bryant R. Riley, Managing Member


 

 

Riley Investment Management LLC

  

 

 

 

  

 

 

 

 

 

By:

/s/ Bryant R. Riley



 

 

Bryant R. Riley, Managing Member

 

 

B. Riley & Co, LLC

  

 

 

 

  

 

 

 

 

 

By:

/s/ Bryant R. Riley

 

 

 

Bryant R. Riley, Chairman

  

 

 

  

 

 

 

  

 

 

 

 

 

By:

/s/ Bryant R. Riley

 

 

 

Bryant R. Riley




CUSIP No. 89376R208

13D

Page 12



Exhibit A



Certain Transactions in Common Stock




Master

Trans
Code


Quantity


Price

Trade
Date

 

BY

318,138

13.8473

10/24/2007

 

SL

(8,736)

14.8914

10/24/2007

 

BY

20,700

13.3273

10/26/2007

 

BY

10,000

13.42

10/30/2007

 

BY

21,987

12.8654

11/2/2007

 

BY

276

12.35

11/6/2007

 

SL

(100,000)

11.52

11/8/2007

 

BY

33,697

11.8972

11/16/2007

 

BY

50,774

11.9654

11/19/2007



Investment Advisory Clients

Trans

Code


Quantity


Price

Trade
Date

 

SL

(320)

14.8914

10/24/2007

 

BY

11,648

13.8473

10/24/2007

 

BY

805

12.8654

11/2/2007

 

BY

14

12.35

11/6/2007

 

SL

(877)

14.8914

10/24/2007

 

BY

31,940

13.8473

10/24/2007

 

BY

187,507

13.4943

10/25/2007

 

BY

2,208

12.8654

11/2/2007

 

BY

21

12.35

11/6/2007

 

BY

100,000

11.52

11/8/2007

 

BY

7,281

11.3

11/8/2007

 

BY

3,238

11.5504

11/9/2007

 

BY

1,619

11.8972

11/16/2007

 

BY

2,597

11.8972

11/16/2007


Managed Account

Trans
Code


Quantity


Price

Trade
Date

 

BY

25,000

11.95

11/9/2007