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Filed pursuant to Rules 424(b)(3)
and 424(c)
Registration No. 333-30556
AUGUST 18, 2000 SUPPLEMENT TO PROSPECTUS DATED AUGUST 14, 2000
As a result of events that occurred after the attached prospectus was
printed, we have filed with the Securities and Exchange Commission a revised
prospectus to add or amend the following information in the locations
indicated.
Additional Risks
The following risk factor was inserted on page 22:
Statements made by our chief executive officer in interviews could lead to
liability to public investors in our company.
On the morning of our initial public offering, our chief executive officer
granted multiple interviews to television commentators and Internet
publications. In these interviews, various questions elicited responses that
included information quoted below that is not reflected in this prospectus.
. ""We do have line-of-sight to profitability and expect that to occur in
the fourth quarter of next year." This statement and other similar
statements reflect our current projections, but we could fail to meet
those projections for all of the reasons stated under "Risk Factors."
. ""We're the only company that actually offers all the different
formats." "We now sell all types of digital film for all cameras. And
we're the only company that can make that claim." These statements are
substantially accurate; we currently offer digital film in the four
primary media formats currently used by digital cameras. We are not
aware of any other company that currently offers digital film in all
four primary media formats.
. ""Our business is growing by leaps and bounds....." "It's a massive
market. Photography in total has gone from about eighty-five billion
dollars to a hundred and twenty-five billion over the last couple of
years, and nearly all of this growth is coming from digital photography.
So we figure that's a large enough market for us to be a multibillion-
dollar company in the not too distant future." This statement
extrapolates from industry projections and estimates, some of which are
included in the prospectus. While the total market may be large enough
to allow one or more companies to achieve significant scale, there can
be no assurance that we will be one of those companies or that the
market will continue to grow as it has in the past.
. ""Well, we basically see, you know, digital cameras themselves going
from about six or seven million units, eight million units perhaps, on
the outside, to well over forty million units in just the next three
years. And so we expect our growth will pretty much mirror the growth of
the digital photography camera sales themselves." While we believe that
we will be able to maintain our current market share and therefore to
grow at the rate of the market, we cannot assure that this will happen
for all the reasons stated under "Risk Factors."
. ""We think our competitive advantage in this business is the rapid
market share that we're actually gaining in the digital film market,..."
"...we had about twenty-five percent market share in the after-market
flash business. And that's about from zero just about a year and a half
ago." This statement accurately reflects market share estimates
developed for us, but it is compiled by sampling and we have not
independently verified it.
. ""We think that we can become profitable with a relatively modest market
share....Our goal is to be the dominant supplier of digital film, and
the expectations I think we've calibrated with the analysts are very
achievable." For us to achieve profitability with a modest market share,
the market must grow substantially. There can be no assurance that this
will happen or that we will meet analysts' expectations for all the
reasons stated under "Risk Factors."
. ""Although I understand that some investors are concerned about our
risk/reward profile, I think our shares at $8 represent a terrific
opportunity for investors." This statement accurately reflects our chief
executive officer's view, but should not be taken as a recommendation by
us or the underwriters.
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. "Reimer said Sandisk attempted to buy Lexar a few times already to gain
access to its technology." While this statement regarding the attempted
acquisition is true, we are not in a position to know Sandisk's
motivation.
. "Our technology allows us to do that (take pictures) faster than most of
our competitors." While our redesigned products have met our
requirements for functionality, we cannot be certain that the redesigned
products will have all the functionality, including the high write
speed, of our current products.
Investors should not rely on casual comments like the ones above when making
an investment decision. Rather, investors should consider all of the
information in the entire prospectus and rely only upon that information.
The broadcasting or dissemination of these interviews to persons who did not
have a copy of the prospectus might be deemed itself to be a prospectus that
did not meet the requirements of the Securities Act and thus a violation of the
Securities Act. If we are found to have violated the Securities Act, then for a
period of one year from the date of the violation, persons who saw or heard any
of these interviews and did not have a copy of the prospectus might bring a
claim against us. In that action, they might seek recovery of the consideration
they paid for their shares or, if they had already sold their shares, damages
resulting from their purchase and sale of those shares. We would contest any
such claim vigorously.
Additional Contingency
The following language was inserted after the paragraph about the SanDisk
litigation in Management's Discussion and Analysis of Financial Condition and
Results of Operations on page 34.
Possible Contingent Liability. On August 15, 2000, prior to the closing of
our initial public offering, one of our officers made statements about our
company in public interviews. These public interviews might be deemed to be a
prospectus that did not meet the requirements of the Securities Act and thus
might be considered to be a violation of the Securities Act. If we are found to
have violated the Securities Act, then for a period of one year from the date
of the violation, persons who saw or heard any of these interviews and did not
have a copy of the prospectus for the initial public offering might bring a
claim against us. In that action, they might seek recovery of the consideration
they paid for their shares or, if they had already sold their shares, damages
resulting from their purchase and sale of those shares. We intend to contest
any such claim vigorously. At this stage, it is not possible to estimate the
amount of any possible loss from these potential claims.
The following language was inserted at the conclusion of "Subsequent Events"
on page F-26.
On August 15, 2000, prior to the closing of the Company's initial public
offering, one of the Company's officers made statements about the Company in
public interviews. These public interviews might be deemed to be a prospectus
that did not meet the requirements of the Securities Act and thus might be
considered to be a violation of the Securities Act. If the Company is found to
have violated the Securities Act, then for a period of one year from the date
of the violation, persons who saw or heard any of these interviews and did not
have a copy of the prospectus for the initial public offering might bring a
claim against the Company. In that action, they might seek recovery of the
consideration they paid for their shares or, if they had already sold their
shares, damages resulting from their purchase and sale of those shares. The
Company intends to contest any such claim vigorously. At this stage, it is not
possible to estimate the amount of any possible loss from these potential
claims.
Other Revisions
In addition, the footnote references after "Commitments and contingencies"
on page F-3 was revised to include a reference to note 13 and page F-2 was
revised to modify the date of the accountants' report to show that Note 13 was
dated August 17, 2000.
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