UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 4, 2016
INPHI CORPORATION
(Exact name of registrant as specified in its charter)
001-34942
(Commission File Number)
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Delaware |
77-0557980 |
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(State or other jurisdiction of |
(I.R.S. Employer Identification No.) |
| incorporation) |
2953 Bunker Hill Lane, Suite 300, Santa Clara, California 95054
(Address of principal executive offices, with zip code)
(408) 217-7300
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 2.01 |
Completion of Acquisition or Disposition of Assets. |
On August 4, 2016, Inphi Corporation and an affiliated entity (collectively, “Inphi”) completed the closing of the previously announced sale of specified assets related to Inphi’s memory buffer and memory register business (the “Business”) pursuant to the Asset Purchase Agreement with Rambus Inc. and an affiliated entity (collectively, “Rambus”), dated as of June 29, 2016 (the “Purchase Agreement”).
Pursuant to the Purchase Agreement, at the closing of the sale of the Business, Inphi was paid $90 million in cash, of which $11.25 million was placed into escrow for a period of twelve (12) months following the closing as security for Inphi’s indemnification obligations pursuant to the Purchase Agreement.
In connection with the sale of the Business, Inphi also entered into a transition services agreement with Rambus for a period of 6 months, effective as of the closing date. The transaction was not subject to a financing condition and did not require a vote of Inphi’s stockholders. There is no material relationship between Inphi and Rambus other than in respect of the Purchase Agreement.
The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference into this Item 2.01.
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Item 9.01 |
Financial Statements and Exhibits. |
(b) Pro Forma Financial Information.
The unaudited pro forma condensed statements of income and the unaudited pro forma condensed balance sheet after giving effect to the disposition of the Business are attached hereto as Exhibit 99.1 and incorporated by reference herein.
(d) Exhibits.
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10.1 |
Asset Purchase Agreement, dated June 29, 2016, by and among Inphi Corporation, Inphi International Pte. Ltd., Rambus Inc. and Bell ID Singapore Ptd. Ltd. (incorporated by reference to exhibit 10.1 of the Registrant’s quarterly report on Form 10-Q filed with the SEC on August 9, 2016).* |
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99.1 |
Unaudited Pro Forma Condensed Statements of Income for the years ended December 31, 2015, 2014 and 2013 and Unaudited Pro Forma Balance Sheet as of June 30, 2016. |
*Exhibits and schedules to such agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Inphi Corporation hereby undertakes to supplementally furnish a copy of any omitted exhibit or schedule to such agreement to the U. S. Securities and Exchange Commission upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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Date: August 9, 2016 |
INPHI CORPORATION |
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| By: |
/s/ John Edmunds |
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John Edmunds |
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| Chief Financial Officer and | |||
| Chief Accounting Officer | |||
Exhibit Index
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Exhibit Number |
Exhibit Title | |
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10.1 |
Asset Purchase Agreement, dated June 29, 2016, by and among Inphi Corporation, Inphi International Pte. Ltd., Rambus Inc. and Bell ID Singapore Ptd. Ltd. (incorporated by reference to exhibit 10.1 of the Registrant’s quarterly report on Form 10-Q filed with the SEC on August 9, 2016).* | |
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99.1 |
Unaudited Pro Forma Condensed Statements of Income for the years ended December 31, 2015, 2014 and 2013 and Unaudited Pro Forma Balance Sheet as of June 30, 2016. |
*Exhibits and schedules to such agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Inphi Corporation hereby undertakes to supplementally furnish a copy of any omitted exhibit or schedule to such agreement to the U. S. Securities and Exchange Commission upon request.
Exhibit 99.1
UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION
On August 4, 2016, Inphi Corporation (the “Company”) completed the sale of Inphi’s memory product business (the “Business”) to Rambus Inc. for $90 million in cash, $11.25 million of which will be placed into escrow for a period of twelve (12) months following the closing as security for Inphi’s indemnification obligations pursuant to the agreement.
The unaudited pro forma financial statements have been developed by applying pro forma adjustments to the Company’s historical Condensed Financial Statements prepared in accordance with accounting principles generally accepted in the United States of America and give effect to the divestiture of the Business. The unaudited pro forma Condensed Statements of Income for the years ended December 31, 2015, 2014 and 2013 assume that the divestiture of the Business occurred on January 1, 2013. The unaudited pro forma Condensed Balance Sheet as of June 30, 2016 assumes that the divestiture occurred on that date. The operating results of the Business were reflected as discontinued operations for the six months ended June 30, 2016, as reported in the Condensed Statements of Income in the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016. Therefore, the Unaudited Pro Forma Condensed Consolidated Statements of Income for the six months ended June 30, 2016 has not been included in this report.
The unaudited pro forma financial statements are presented based on currently available information and are intended for illustrative purposes only and are not necessarily indicative of the financial position or results of operations that would have been realized if the divestiture had been completed on the dates indicated, nor are they indicative of future operating results or financial position. Beginning in the second quarter of 2016, the historical financial results of the Business for periods prior to the divestiture will be reflected in the Company' Consolidated Financial Statements as discontinued operations.
The unaudited pro forma condensed combined financial statements should be read in conjunction with (a) accompanying notes to the unaudited pro forma condensed financial statements, (b) the Company’s annual report on Form 10-K for the year ended December 31, 2015 and its Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 and other filings with the Securities and Exchange Commission.
Inphi Corporation and Subsidiaries
Unaudited Pro Forma Condensed Balance Sheet
As of June 30, 2016
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Thousands of dollars |
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Pro Forma |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ | 146,914 | $ | 90,000 | (b) | $ | 236,914 | |||||
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Investments in marketable securities |
180,900 | — | 180,900 | |||||||||
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Accounts receivable, net |
39,035 | — | 39,035 | |||||||||
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Inventories |
11,813 | — | 11,813 | |||||||||
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Income tax receivable |
246 | — | 246 | |||||||||
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Prepaid expenses and other current assets |
5,862 | — | 5,862 | |||||||||
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Current assets held for sale |
10,468 | (10,468 | )(c) | — | ||||||||
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Total current assets |
395,238 | 79,532 | 474,770 | |||||||||
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Property and equipment, net |
35,560 | — | 35,560 | |||||||||
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Goodwill |
8,440 | — | 8,440 | |||||||||
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Identifiable intangible assets |
59,933 | — | 59,933 | |||||||||
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Deferred tax charge |
2,263 | — | 2,263 | |||||||||
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Other assets, net |
14,280 | — | 14,280 | |||||||||
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Total assets |
$ | 515,714 | $ | 79,532 | $ | 595,246 | ||||||
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable |
$ | 7,263 | $ | — | $ | 7,263 | ||||||
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Deferred revenue |
3,988 | — | 3,988 | |||||||||
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Accrued employee expenses |
10,002 | 3,352 | (d) | 13,354 | ||||||||
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Other accrued expenses |
4,408 | — | 4,408 | |||||||||
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Other current liabilities |
986 | 2,591 | (e) | 3,577 | ||||||||
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Current liabilities held for sale |
5,193 | (5,193 | )(c) | — | ||||||||
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Total current liabilities |
31,840 | 750 | 32,590 | |||||||||
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Convertible debt |
176,728 | — | 176,728 | |||||||||
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Other long-term liabilities |
2,937 | — | 2,937 | |||||||||
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Total liabilities |
211,505 | 750 | 212,255 | |||||||||
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Stockholders’ equity: |
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Common stock |
41 | — | 41 | |||||||||
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Additional paid-in capital |
399,833 | — | 399,833 | |||||||||
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Accumulated deficit |
(96,729 | ) | 78,782 | (f) | (17,947 | ) | ||||||
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Accumulated other comprehensive income |
1,064 | — | 1,064 | |||||||||
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Total stockholders’ equity |
304,209 | 78,782 | 382,991 | |||||||||
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Total liabilities and stockholders’ equity |
$ | 515,714 | $ | 79,532 | $ | 595,246 | ||||||
Inphi Corporation and Subsidiaries
Unaudited Pro Forma Condensed Statement of Income
For the Year Ended December 31, 2015
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Thousands of dollars |
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Pro Forma |
Pro Forma |
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Revenue |
$ | 246,616 | $ | 53,906 | $ | 192,710 | ||||||
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Cost of revenue |
98,294 | 25,546 | 72,748 | |||||||||
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Gross profit |
148,322 | 28,360 | 119,962 | |||||||||
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Operating expenses: |
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Research and development |
106,444 | 17,333 | 89,111 | |||||||||
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Sales and marketing |
26,563 | 5,427 | 21,136 | |||||||||
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General and administrative |
20,322 | — | 20,322 | |||||||||
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Total operating expenses |
153,329 | 22,760 | 130,569 | |||||||||
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Income (loss) from operations |
(5,007 | ) | 5,600 | (10,607 | ) | |||||||
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Interest expense |
(783 | ) | — | (783 | ) | |||||||
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Other income |
221 | — | 221 | |||||||||
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Income (loss) before income taxes |
(5,569 | ) | 5,600 | (11,169 | ) | |||||||
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Provision for income taxes |
7,982 | 2,358 | 5,624 | |||||||||
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Net income (loss) |
$ | (13,551 | ) | $ | 3,242 | $ | (16,793 | ) | ||||
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Earnings per share |
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Basic |
$ | (0.35 | ) | $ | (0.44 | ) | ||||||
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Diluted |
$ | (0.35 | ) | $ | (0.44 | ) | ||||||
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Weighted-average shares used in computing earnings per share |
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Basic |
38,580,330 | 38,580,330 | ||||||||||
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Diluted |
38,580,330 | 38,580,330 | ||||||||||
Inphi Corporation and Subsidiaries
Unaudited Pro Forma Condensed Statement of Income
For the Year Ended December 31, 2014
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Thousands of dollars |
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Pro Forma |
Pro Forma |
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Revenue |
$ | 156,142 | $ | 59,997 | $ | 96,145 | ||||||
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Cost of revenue |
70,488 | 26,170 | 44,318 | |||||||||
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Gross profit |
85,654 | 33,827 | 51,827 | |||||||||
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Operating expenses: |
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Research and development |
70,863 | 13,404 | 57,459 | |||||||||
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Sales and marketing |
20,003 | 5,159 | 14,844 | |||||||||
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General and administrative |
16,153 | — | 16,153 | |||||||||
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Total operating expenses |
107,019 | 18,563 | 88,456 | |||||||||
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Income (loss) from operations |
(21,365 | ) | 15,264 | (36,629 | ) | |||||||
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Other income |
495 | — | 495 | |||||||||
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Income (loss) before income taxes |
(20,870 | ) | 15,264 | (36,134 | ) | |||||||
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Provision for income taxes |
1,738 | 610 | 1,128 | |||||||||
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Net income (loss) |
$ | (22,608 | ) | $ | 14,654 | $ | (37,262 | ) | ||||
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Earnings per share |
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Basic |
$ | (0.69 | ) | $ | (1.14 | ) | ||||||
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Diluted |
$ | (0.69 | ) | $ | (1.14 | ) | ||||||
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Weighted-average shares used in computing earnings per share |
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Basic |
32,707,868 | 32,707,868 | ||||||||||
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Diluted |
32,707,868 | 32,707,868 | ||||||||||
Inphi Corporation and Subsidiaries
Unaudited Pro Forma Condensed Statement of Income
For the Year Ended December 31, 2013
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Thousands of dollars |
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Pro Forma |
Pro Forma |
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Revenue |
$ | 102,664 | $ | 59,713 | $ | 42,951 | ||||||
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Cost of revenue |
37,095 | 22,139 | 14,956 | |||||||||
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Gross profit |
65,569 | 37,574 | 27,995 | |||||||||
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Operating expenses: |
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Research and development |
50,516 | 10,893 | 39,623 | |||||||||
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Sales and marketing |
15,741 | 4,749 | 10,992 | |||||||||
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General and administrative |
11,614 | — | 11,614 | |||||||||
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Total operating expenses |
77,871 | 15,642 | 62,229 | |||||||||
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Income (loss) from operations |
(12,302 | ) | 21,932 | (34,234 | ) | |||||||
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Other income |
876 | — | 876 | |||||||||
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Income (loss) before income taxes |
(11,426 | ) | 21,932 | (33,358 | ) | |||||||
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Provision for income taxes |
1,752 | 531 | 1,221 | |||||||||
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Net income (loss) |
$ | (13,178 | ) | $ | 21,401 | $ | (34,579 | ) | ||||
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Earnings per share |
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Basic |
$ | (0.45 | ) | $ | (1.17 | ) | ||||||
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Diluted |
$ | (0.45 | ) | $ | (1.17 | ) | ||||||
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Weighted-average shares used in computing earnings per share |
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Basic |
29,493,005 | 29,493,005 | ||||||||||
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Diluted |
29,493,005 | 29,493,005 | ||||||||||
Inphi Corporation
Notes to the Unaudited Pro Forma Financial Statements
The unaudited pro forma financial statements give effect to the sale of the Inphi’s memory product business to be accounted for as discontinued operation. The unaudited pro forma condensed statements of income for the years ended December 31, 2015, 2014 and 2013 are presented as if the sale occurred as of January 1, 2013. The unaudited pro forma condensed balance sheet as of June 30, 2016 is presented as if the sale occurred on that date. The nonrecurring after-tax gain is reflected in the proforma balance sheet.
| (a) | The pro forma adjustments columns in the unaudited pro forma condensed statements of income represent the historical financial results of the memory product business. | |
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(b) |
The pro forma adjustment represents estimated proceeds received from the sale of memory product business. The Company expects to use the proceeds for general corporate purposes. |
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(c) |
The pro forma adjustments represent the elimination of the assets and liabilities of the memory product business. |
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(d) |
The pro forma adjustment represents the estimated liability payable to employees transferred to Rambus Inc. |
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(e) |
The pro forma adjustment represents the estimated tax liability on the gain of the sale of the memory product business. |
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(f) |
The pro forma adjustment represents the estimated gain after-tax. |
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