United States Securities and Exchange Commission EDGAR Filing

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KtgL/jdZHq28hWt7g76GSARzxIGTizJThhipyiA7PqFBW+sG6XqNpLEksQKDutWA RoXpO/0FCkSjc8f+K/VYzw== 0001116502-08-000229.txt : 20080213 0001116502-08-000229.hdr.sgml : 20080213 20080213074351 ACCESSION NUMBER: 0001116502-08-000229 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20080213 DATE AS OF CHANGE: 20080213 GROUP MEMBERS: B. RILEY AND CO., LLC GROUP MEMBERS: BRYANT R. RILEY GROUP MEMBERS: RILEY INVESTMENT MANAGEMENT LLC GROUP MEMBERS: RILEY INVESTMENT PARTNERS MASTER FUND, L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: TRANSMETA CORP CENTRAL INDEX KEY: 0001001193 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 770402448 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-60817 FILM NUMBER: 08600890 BUSINESS ADDRESS: STREET 1: 3990 FREEDOM CIRCLE STREET 2: 415-413-1880 CITY: SANTA CLARA STATE: CA ZIP: 95054 BUSINESS PHONE: 4089193000 MAIL ADDRESS: STREET 1: 3990 FREEDOM CIRCLE CITY: SANTA CLARA STATE: CA ZIP: 95054 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Riley Investment Partners Master Fund, L.P. CENTRAL INDEX KEY: 0001385084 IRS NUMBER: 000000000 STATE OF INCORPORATION: E9 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 11100 SANTA MONICA BOULEVARD STREET 2: SUITE 810 CITY: LOS ANGELES STATE: CA ZIP: 90025 BUSINESS PHONE: (310) 966-1445 MAIL ADDRESS: STREET 1: 11100 SANTA MONICA BOULEVARD STREET 2: SUITE 810 CITY: LOS ANGELES STATE: CA ZIP: 90025 SC 13D/A 1 tmtasc13da.htm AMENDMENT NO. 5 United States Securities and 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. 5)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)

February 13, 2008

(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)

———————

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 233,129
BENEFICIALLY OWNED BY		8	SHARED VOTING POWER -0-
EACH REPORTING		9	SOLE DISPOSITIVE POWER 233,129
PERSON WITH		10	SHARED DISPOSITIVE POWER -0-
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 233,129
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES SHARES* [ ]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.9%¹
14	TYPE OF REPORTING PERSON* PN

———————

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 3


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 374,921¹
BENEFICIALLY OWNED BY		8	SHARED VOTING POWER 428,076²
EACH REPORTING		9	SOLE DISPOSITIVE POWER 374,921¹
PERSON WITH		10	SHARED DISPOSITIVE POWER 428,076²
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 792,478²
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES SHARES* [X]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.6%³
14	TYPE OF REPORTING PERSON* IA

———————

Because Riley Investment Management LLC has sole investment and voting power over 233,129 shares of Common Stock held by Riley Investment Partners Master Fund, L.P. and 141,792 shares held in managed accounts by its investment advisory clients, Riley Investment Management LLC may be deemed to have beneficial ownership of these shares.

Riley Investment Management LLC has shared voting and dispositive power over 428,076 shares of Common Stock held by its investment advisory clients, 417,557 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.


CUSIP No. 89376R208	13D	Page 4


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 14,000
BENEFICIALLY OWNED BY		8	SHARED VOTING POWER 50,000¹
EACH REPORTING		9	SOLE DISPOSITIVE POWER 14,000
PERSON WITH		10	SHARED DISPOSITIVE POWER 50,000¹
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 64,000
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES SHARES* [ ]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) .5%²
14	TYPE OF REPORTING PERSON* BD

———————

B. Riley & Co., LLC has shared voting and dispositive power over 50,000 shares of Common Stock held by a managed account, with which it is indirectly affiliated.


CUSIP No. 89376R208	13D	Page 5


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, 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 United States
NUMBER OF SHARES		7	SOLE VOTING POWER 388,921¹
BENEFICIALLY OWNED BY		8	SHARED VOTING POWER 478,076²
EACH REPORTING		9	SOLE DISPOSITIVE POWER 388,921¹
PERSON WITH		10	SHARED DISPOSITIVE POWER 478,076²
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 856,478²
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES SHARES* [X]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.1%³
14	TYPE OF REPORTING PERSON* IN

———————

Because Riley Investment Management LLC has sole voting and investment power over Riley Investment Partners Master Fund, L.P.’s security holdings and certain managed accounts of its investment advisory clients 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 233,129 shares of Common Stock held by Riley Investment Partners Master Fund, L.P. and the 141,792 shares held in managed accounts by its investment advisory clients. B. Riley & Co., LLC has sole voting and dispositive power over 14,000 shares of common stock. Mr. Riley is the Chairman and sole indirect equity owner of B. Riley & Co., LLC.


CUSIP No. 89376R208	13D	Page 6

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 50,000 shares of Common Stock. Mr. Riley is the Chairman and sole indirect equity owner of B. Riley & Co., LLC.


CUSIP No. 89376R208	13D	Page 7

Item 4.

Purpose of the Transaction

Item 4 is hereby amended by adding the following:

On February 13, 2008, RIM sent a letter to the Issuer’s board of directors extending its January 31, 2008 offer to acquire all outstanding shares of Transmeta for $15.50. RIM’s proposal now expires at the close of business on February 28. RIM stated that at the conclusion of this two-week period any additional bids will reflect its estimates of the Issuer’s cash burn from defending itself against RIM’s inquiries as well as its daily cash burn from operations. RIM estimated that the Issuer’s operational cash burn to be in the neighborhood of $400,000 per week – or .03 cents a share, and anticipated that the Issuer is incurring significant legal and banking fees.

RIM noted that the Issuer has not responded to RIM’s efforts to discuss the offer. RIM expressed its disappointment by the behavior of the Issuer’s board and management with respect to RIM’s offer and its previous concerns. RIM also disputed Issuer’s allegation that its proposal was highly conditional, reiterating that there was no financing condition and noting that diligence and mutually agreeable acquisition agreements are standard conditions to proposals in these situations. RIM noted that due diligence takes on more importance here given that Mr. Horsley’s bonus agreement was not disclosed until long after the Intel settlement. Finally, RIM noted its track record of executing transactions in public company arena, directly and through its service on boards.

RIM stated that if the Board believes its proposal undervalues the Issuer, RIM would welcome the alternative of replacing the entire board with RIM’s representatives, who have had a history of creating value for their constituency. The foregoing description of the letter is qualified in its entirety by reference to the letter attached as Exhibit A.

Item 5.

Interest in Securities of the Issuer

Item 5(c) is amended to add the following:

(c)

In the ordinary course of business, BRC may effect transactions in connection with its market making activities, as well as for customer transactions. Since the Reporting Persons’ last 13D filing, BRC purchased 14,000 shares at a per share price of 13.515 on February 12, 2008.

Item 7.

Material to be filed as Exhibits

Exhibit A

Letter, dated February 13, 2008, from RIM to the Issuer.


CUSIP No. 89376R208	13D	Page 8

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: February 13, 2008


		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

EX-99.A 2 exhibita.htm EXHIBIT A United States Securities and Exchange Commission EDGAR Filing

EXHIBIT A

Riley Investment Management LLC

11100 Santa Monica Boulevard, Suite 810, Los Angeles, CA 90025

Phone (310) 966-1445 Fax (310) 966-1096

www.rileyim.com

February 13, 2008

Board of Directors

Transmeta Corporation

2540 Mission College Blvd.

Santa Clara, California 95054

Gentleman:

Please accept this letter as an extension to our January 31, 2008 offer to acquire all outstanding shares of Transmeta for $15.50. Our proposal now expires in two weeks, at the close of business on February 28. At the conclusion of this two-week period any additional bids will reflect our estimates of your cash burn “defending” your Company from our inquiries as well as your daily cash burn from operations. We estimate your operational cash burn to be in the neighborhood of $400,000 per week—or .03 cents a share. It is unclear how much legal fees and banking fees you are racking up. Given the compensation for your General Counsel John Horsley, which according to yesterday’s article in The Recorder one compensation expert said was the first time he saw this type of bonus, we anticipate you are incurring significant costs.

During the past week, I have made every effort to reach out to your Company and the Board to discuss our offer. Unfortunately, you have failed to give me the courtesy of a response. Over the last month, moreover, I have, on several occasions, reached out to your Board to discuss both our views and what we believe to be the prevalent views held by other shareholders. Your response was to allow me to communicate with your Board in a recorded conference call in which you mandated that I be allotted no more than 10 minutes to express my views. (For your reference, I have attached the transcripts to this call, so that you can review our opinions once again).

Quite frankly, I am left at a total loss by your behavior. I do not understand how a Board which has overseen such heavy losses and actively participated in the continued decline of shareholder value, while, at the same time, personally benefiting financially, can react in this manner.

In your press release dated February 7, 2008, you claimed that our bid was “highly conditional.” We believe this is a baseless concern. First, there is no financing contingency. Second, as in all proposals where the bidder has not been given an ability to perform due diligence or to negotiate with the company, our proposal is by necessity conditioned on due diligence and mutually agreeable acquisition agreements. Unfortunately, the standard due diligence requirement takes on more importance here considering that the details of your agreement with Mr. Horsley, worth more than $10 million, were not released until long after your settlement with Intel.

Moreover, you should remember, in evaluating the seriousness of our proposal, that we have a track record of executing transactions in the public company arena. We led the $45M acquisition of Country Coach from National RV. In addition, we have spearheaded the acquisition and the resulting shareholder value creation process through our service on the boards of public companies. For example:

Alliance Semiconductor: We launched a proxy fight in 2005 when share prices were $1.60. We won over 90% of the vote insiders did not control and took over the Board. I became Chairman, and all incumbent Board members had resigned by March 2006. Between April and June 2006 all operating businesses were sold in three separate transactions. In July 2006 we settled a 21-year old lawsuit. In September 2006 Alliance completed a tender offer for 3 million shares at $3 per share. In

December 2006, Alliance sold its venture portfolio for $124MM, or approximately $3.75 per share. In June 2007 the Company paid a special dividend of $3.75 per share.

Celeritek: In May 2003 the Company settled with us to avoid a proxy fight, granting us four of seven seats on the Board. Shares traded at $5.50 when we joined the Board. The Company sold all of its operating assets, including its defense unit in July 2004 and its semiconductor unit in March 2005. Celeritek paid total dividends of $8.25 per share between March 2004 and December 2005.

Carreker: We joined the Board in June 2006 after the Company settled with us to avoid a proxy fight. Carreker shares traded at approximately $6 per share when we launched the proxy fight. The business was sold in December 2006 for $8.05 per share.

Aldila: We joined the Board in May 2003 after the Company settled with us to avoid a proxy fight. ALDA shares traded at $1.60 when we joined the Board. The Company has since paid out $8.00 per share in cash dividends, and bought back 10% of its outstanding stock. In November 2007 the Company announced the sale of its interest in a carbon fiber and composite prepreg plant. Earlier this week, Aldila announced a special dividend to shareholders of $5 per share or more than 1/3 of market capitalization. This is the third special dividend we have paid out to owners, the shareholders.

We believe that our purchase of Transmeta will represent the best outcome for the shareholders, especially compared to what they would face if the company continued under existing management. If your primary concern is remaining in office, our prior transactions could cause you concern; but if your interest is in maximizing shareholder value, the transactions mentioned should be a positive factor. Since inception, Transmeta has reported operating losses of approximately $668.5 million through the third quarter of 2007. Book value has been reduced from $55.96 per share following the IPO in the fourth quarter of 2000 to $1.49 per share on September 30, 2007. We believe that your performance by any measure has been an unmitigated disaster. If you believe that this sale undervalues the Company, we would welcome the alternative of our replacement of the entire board of directors with our representatives, who have had a hist ory of creating value for their constituency.

Sincerely,

Riley Investment Management LLC


By:	/s/ Bryant Riley
	Bryant Riley, Managing Member

Transmeta Conference Call

1-15-08

BR: I’m wondering if you have any questions for me. I have been very clear in my 13D… I’ve expressed my concerns about your relationship with you and house council. I’ve expressed your… my issues with diluted options plans, I’m your largest shareholder, your second largest shareholder has come out and said that he favors my view of the company…Do you have any questions for me?

Transmeta Board Member: No.

BR: No.

Transmeta Board Member: No, we’re here to listen.

BR: Okay, well there is a little bit of confusion…. Where we’ve been is very clear and if you know my history – hopefully you do – hopefully you are up to speed on how we interact with boards and our track record of being on boards.

I will tell you how this will end up playing out. Your shareholders will end up understanding that… I think that they will end up looking at your track record and my track record they will end up voting with me. We’ll end up doing a proxy fight and it will be a costly situation but I will end up winning, and this is your guys’ representatives of the board… of the shareholders. I have grave concerns with not only the 725,000 options you have issued but I have grave concerns with your contingency payment to a lawyer who decided to be a corporate lawyer and took the security of being a corporate lawyer, and he is now getting paid an excessive amount of money.

…I’ve tried to reach out to you multiple times. And my one message is this going to go down and continue and it is because I believe you guys are doing the wrong thing for shareholders.

So it sounds like you’re just going to listen… You are recording my call, which is clearly what your lawyer wants you to do and that’s fine. I mean at the end of the day you know I’m a shareholder. I own the equity, I’m the largest shareholder and I’m confident that the equity holders will back me. I tried to reach out to you guys. I told Sujan that I wanted an audience. I wanted to have a conversation. I thought is would be a little less formal – it’s fine and I guess we’ll proceed from there so if there are no questions, I’ll move on… Any questions?

Transmeta Board Member: None

BR: Okay thank you.

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