Filed Pursuant
to Rule 424(b)(1)
830,385 SHARES
SEEQ TECHNOLOGY INCORPORATED
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
_________________
This Prospectus relates to the public offering of 830,385 shares
(the ``Shares'') of Common Stock of SEEQ Technology Incorporated
(``SEEQ'' or the ``Company''). The Shares may be offered by the
Silicon Valley Bank, the holder of two warrants to purchase an
aggregate of 250,000 shares of Common Stock of the Company; Rodman &
Renshaw, Inc., the holder of a warrant to purchase 36,115 shares of
Common Stock of the Company; Steven A. Rothstein, the holder of a
warrant to purchase 18,058 shares of the Common Stock of the Company;
Louis Lichtenfeld, the holder of a warrant to purchase 18,058 shares
of Common Stock of the Company; Gruntal & Co., Incorporated, the
holder of a warrant to purchase 48,154 shares of Common Stock of the
Company; Roger L. Batty, the holder of a warrant to purchase 92,000
shares of Common Stock of the Company; Jay Hayes, the holder of 92,000
shares of the Common Stock of the Company; and Brian G. Swift, the
holder of 276,000 shares of Common Stock of the Company (collectively,
the ``Selling Stockholders''). The Shares may be offered from time to
time in transactions in the over-the-counter market, in negotiated
transactions, or a combination of such methods of sale, at fixed
prices which may be changed, at market prices prevailing at the time
of sale, at prices related to prevailing market prices or at
negotiated prices. The Selling Stockholders may effect such
transactions by selling the Shares to or through broker-dealers, and
such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders and/or the
purchasers of the Shares for whom such broker-dealers may act as
agents or to whom they sell as principals, or both (which compensation
as to a particular broker-dealer might be in excess of customary
commissions). To the extent required, information regarding the
specific Shares to be offered and sold, the name of the Selling
Stockholders, the public offering price, the names of any such agent,
dealer or underwriter, and any applicable commission or discount with
respect to any particular offer is set forth herein or will be set
forth in an accompanying Prospectus Supplement. See ``Selling
Stockholders'' and ``Sale of the Shares.''
None of the proceeds from the sale of the Shares by the
Selling Stockholders will be received by the Company; however, the
Company will receive the exercise price of the warrants.
______________________________
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE
``RISK FACTORS'' BEGINNING ON PAGE 7.
_______________________________
The Company's Common Stock is traded on the Nasdaq National
Market under the symbol ``SEEQ''. The last sale price of the
Company's Common Stock as reported on the Nasdaq National Market on
July 6, 1995 was $3.94 per share.
_______________________________
The Selling Stockholders and any broker-dealers, agents or
underwriters that participate with the Selling Stockholders in the
distribution of the Shares may be deemed to be ``underwriters'' within
the meaning of Section 2(11) of the Securities Act of 1933, as amended
(the ``Securities Act''), and any commissions received by them and any
profit on the resale of the Shares purchased by them may be deemed to
be underwriting commissions or discounts under the Securities Act.
See ``Sale of the Shares'' herein for a description of certain
indemnification arrangements.
_______________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE
CONTRARY IS A
CRIMINAL
OFFENSE.
_______________________________
THE DATE OF THIS PROSPECTUS IS JULY 7, 1995
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS
IN CONNECTION WITH THE OFFERING MADE HEREBY, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY OR BY ANY OTHER PERSON. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE THEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY THE SHARES TO ANY PERSON OR BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION MAY NOT LAWFULLY BE MADE.
AVAILABLE INFORMATION
SEEQ Technology Incorporated (``SEEQ'' or the ``Company'')
is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the ``Exchange Act''), and in
accordance therewith files reports, proxy and information statements
and other information with the Securities and Exchange Commission (the
``Commission''). Such reports, proxy and information statements and
other information filed by the Company may be inspected and copied at
the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's Regional Offices located at Seven World Trade Center,
Suite 1300, New York, New York 10048 and 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can
also be obtained from the Public Reference Branch of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
The Company has filed with the Commission a registration
statement (herein, together with all amendments and exhibits, referred
to as the ``Registration Statement'') under the Securities Act of
1933, as amended (the ``Securities Act''), with respect to the Common
Stock offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and
the Shares offered hereby, reference is hereby made to the
Registration Statement. Statements contained in this Prospectus
concerning the provisions of any documents referred to are not
necessarily complete, and each such statement is qualified in its
entirety by reference to the copy of such document filed with the
Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the
Commission are incorporated in this Prospectus by reference: (1) the
Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1994, filed pursuant to Section 13 of the Exchange Act;
(2) the Company's Quarterly Report on Form 10-Q, as amended, for the
fiscal quarter ended December 31, 1994, filed pursuant to Section 13
of the Exchange Act; (3) the Company's Quarterly Report on Form 10-Q
for the fiscal quarter ended March 31, 1995, filed pursuant to
Section 13 of the Exchange Act; (4) the Company's Proxy Statement
dated February 15, 1995 for the 1995 Annual Meeting of Stockholders of
the Company, filed pursuant to Section 14 of the Exchange Act; (5) the
description of the Company's Common Stock contained in its
Registration Statement on Form 8-B filed with the Commission on June
2, 1987; (6) the description of the Company's common stock contained
in its Registration Statement on Form 8-A filed on May 2, 1995; and
(7) all other reports filed by the Company pursuant to Section 13(a)
or 15(d) of the Exchange Act.
All documents subsequently filed by the Company with the
Commission pursuant to Sections 12, 13(a), 13(c), 14 and 15(d) of the
Exchange Act after the effective date of the Registration Statement,
but prior to the termination of the offering made hereby, shall be
deemed to be incorporated by reference into this Prospectus. Each
document incorporated into this Prospectus by reference shall be
deemed to be a part of this Prospectus from the date of the filing of
such document with the Commission. Any statement contained in a
document incorporated by reference, or deemed to be incorporated by
reference, herein shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained
herein, or in any subsequently filed document which is also
incorporated by reference herein, modifies or supersedes such
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statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
The Company will provide without charge to each person to
whom a copy of this Prospectus is delivered, upon the request of any
such person, a copy of any or all of the documents which are
incorporated herein by reference (other than exhibits to such
documents that are not specifically incorporated by reference herein).
Requests should be directed to SEEQ Technology Incorporated, 47200
Bayside Parkway, Fremont, California 94538, Attention: Secretary,
telephone (510) 226-7400.
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<PAGE>
THE COMPANY
SEEQ Technology Incorporated (herein ``SEEQ'' or the
``Company'') is a leading supplier of Ethernet data communications
products for networking applications. The Company was founded in 1981
to develop, manufacture and market products incorporating metal-oxide-
silicon (``MOS'') reprogrammable, nonvolatile memory integrated
circuit technology. In 1983, the Company successfully developed the
industry's first integrated Ethernet data communications controller in
cooperation with 3COM Corporation. The Company combines its strengths
in digital circuit and analog design with its communications systems
expertise to produce mixed-signal data communication solutions that
provide increased functionality and greater reliability and that
result in lower total system cost. In February 1994, the Company sold
its nonvolatile memory technology and related assets to focus on the
data communications market.
SEEQ has applied its advanced proprietary complementary
metal-oxide-silicon (``CMOS'') process technology to build media
signaling integrated circuits for data communication applications.
SEEQ's product development and marketing strategy is to target its
products for sale to rapidly growing systems manufacturers in the high
growth personal computer, workstation, printer, networking and
telecommunication markets. SEEQ intends to target new and existing
systems manufacturers who are performance and volume leaders in these
markets. SEEQ's complete product line includes Ethernet data
communication controllers, AutoDUPLEX(TM) Ethernet chip sets for
automatic full duplex switched Ethernet applications, encoders/
decoders, coaxial cable CMOS transceivers and unshielded twisted pair
cable CMOS transceivers, and networking modules. The Company also
designs media signaling integrated circuits for the emerging high
speed local area network (``LAN'') markets, including Fast Ethernet
and Asynchronous Transfer Mode (``ATM'').
The Company's more than 125 customers worldwide include such
personal computer, workstation and data communication industry leaders
as Apple Computer, Cisco Systems, Hewlett Packard, 3COM, Cabletron,
Compaq, and Silicon Graphics. SEEQ's Ethernet data communications
products are sold in market applications of Ethernet adapter cards,
workstations, media attachment units, print servers, file servers,
multiport repeaters, standard hubs, switching hubs, bridges and
routers.
The Company was originally incorporated in California in
1981 and was reincorporated in Delaware in February 1987. Its
principal executive offices are located at 47200 Bayside Parkway,
Fremont, California 94538, and its telephone number is (510) 226-7400.
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<PAGE>
RECENT DEVELOPMENTS
Pursuant to the Asset Purchase Agreement dated February 7, 1994
(the ``Asset Purchase Agreement''), by and between SEEQ and Atmel
Corporation (``Atmel''), Atmel purchased the assets of SEEQ related to
its electrically erasable programmable read only memory (``EEPROM'')
products (the ``EEPROM Asset Sale''). Under the terms of the Asset
Purchase Agreement, Atmel acquired all of SEEQ's rights in assets
related to SEEQ's EEPROM products, including intellectual property,
equipment, inventory and a portion of the accounts receivable. The
purchase price for such assets consisted of 135,593 shares of Atmel's
common stock and $481,632 in cash. In addition, Atmel assumed certain
liabilities under equipment leases for equipment used in producing
EEPROM products.
During the third quarter of fiscal 1994, SEEQ sold the 135,593
shares of Atmel common stock it received in the EEPROM Asset Sale for
total proceeds of $6,693,000, reflecting a gain on the sale of
$1,693,000. A significant portion of the proceeds from the stock sale
was deposited in two escrow accounts subject to claims of indemnity by
Atmel under the Asset Purchase Agreement. One escrow account, which
contained $600,000 (recorded as other current assets at September 30,
1994), was subject to claims by Atmel with respect to the equipment,
inventory and accounts receivable sold to Atmel in the EEPROM Asset
Sale. Atmel asserted a claim for the full amount deposited in this
escrow account. On January 30, 1995 the Company entered into an
agreement with Atmel to settle Atmel's claim. Under this agreement,
out of the $600,000 in the escrow account, $250,000 has been
distributed to Atmel and the remaining $350,000 has been distributed
to SEEQ. All interest earned on the funds in such escrow account has
been distributed proportionately between SEEQ and Atmel. The second
escrow account, which originally contained $4,329,000 (recorded as
other assets), is subject to any future claims that may be made by
Atmel with respect to the EEPROM technology sold to Atmel in the
EEPROM Asset Sale. During the first quarter of fiscal 1995, $300,000
was distributed to SEEQ from the second escrow account, leaving
approximately $4,200,000 (including interest earned thereon) on
deposit therein. Atmel has notified SEEQ that, based on certain
claims asserted by Hualon Microelectronics Corporation (``Hualon''),
one of SEEQ's former foundries and joint development partners, that
SEEQ previously granted Hualon certain license rights to the EEPROM
technology, Atmel believes it may be entitled to assert a claim
against this escrow account, although Atmel has not done so to date.
The funds in this escrow account will remain in escrow until February
1999, or until a determination is made that SEEQ is entitled to such
funds under any release condition in the escrow agreement, or if Atmel
makes a claim prior to February 1999 under such escrow, then until
such claim is resolved by a court.
In connection the EEPROM Asset Sale, Atmel acquired 3,614,701
shares of SEEQ's Common Stock pursuant to the Stock Purchase Agreement
dated February 7, 1994, representing approximately 14% of SEEQ's
outstanding shares of Common Stock as of such date. Such shares were
purchased at a price of $1.25 per share, for a total purchase price of
$4,518,376. The Company filed a registration statement for these
shares that became effective with the Securities and Exchange
Commission on March 24, 1995.
On March 30, 1994 the Company filed a lawsuit in the United
States District Court for the Northern District of California against
Hualon (``Hualon''), one of the Company's former foundries and joint
development partners. In the lawsuit, the Company originally sought
injunctive relief from the court to prevent Hualon from using certain
of the nonvolatile memory technology sold by the Company to Atmel
pursuant to the Asset Purchase Agreement, to which Hualon has asserted
certain license rights under an alleged license agreement. In
response to the Company's claims, Hualon asserted affirmative defenses
and counterclaims seeking a declaration by the court that the alleged
license agreement is valid and seeking specific performance of the
alleged license agreement and other agreements previously entered into
by the two parties. Hualon filed a motion for summary judgment and
the Company's initial claim was subsequently dismissed by the court.
Hualon has subsequently amended its counter claims to include
additional claims in the proceeding, including claims for damages for
breach of, and for money owed pursuant to, other agreements between
the Company and Hualon. The Company has subsequently amended its
original complaint to include a number of additional claims
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<PAGE>
against Hualon, including claims for damages for breach of, and for
money owed pursuant to, such other agreements. Under the terms of one
of the escrow agreements entered into with Atmel in connection with
the EEPROM Asset Sale, under which approximately $4,200,000 (including
interest earned thereon) is currently on deposit in escrow, the
Company will be entitled to receive such funds if it is determined
that the alleged license agreement is invalid, or, if no such
determination is made, to the extent that any claims made by Atmel
that Atmel has suffered damages as a result of the alleged license
agreement are unsuccessful, if Atmel fails to make a claim to such
funds by February 1999, or as otherwise agreed by the Company and
Atmel. The Company intends to vigorously prosecute its claims in this
lawsuit and to defend claims made by Hualon. The Company believes
that its claims and defenses in this lawsuit are meritorious.
However, there can be no assurance as to the possible outcome of this
proceeding. In the event that the Company is not successful in
invalidating the alleged license agreement, Atmel may assert a claim
against the Company under the Asset Purchase Agreement, including a
claim for damages, if suffered by Atmel as a result of Hualon's use of
any of such technology, and, in the event any such claim by Atmel is
determined to be valid, Atmel may recover any such damages from the
escrow described above. The Company believes that, in the event of
any claim by Atmel, the amount of damages that may be payable by the
Company upon a resolution thereof will not have a material adverse
effect on the Company's cash flow, financial position or results of
operations. However, there can be no assurance as to such matters.
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<PAGE>
RISK FACTORS
In addition to the other information contained or
incorporated by reference in this Prospectus, the following factors
should be considered carefully in evaluating an investment in the
Common Stock offered hereby.
HISTORY OF OPERATING LOSSES; UNCERTAINTY OF FUTURE FINANCIAL RESULTS
The Company has incurred substantial operating losses during
each of the last five fiscal years. As of March 31, 1995, the Company
had an accumulated deficit of approximately $113,000,000. The
Company's revenues have also decreased substantially over the last
five fiscal years. In addition, as a result of the EEPROM Asset Sale
on February 7, 1994, the Company expects that its revenues will be
substantially lower in future fiscal periods as compared to comparable
periods in fiscal years prior to fiscal 1994. There can be no
assurance that the Company will be able to achieve and maintain
profitability or revenue growth in the future. The Company's ability
to achieve and maintain profitability will depend, among other things,
on its ability to successfully manufacture and sell its products, to
develop new products and to control its costs and expenses. Failure
by the Company to achieve revenue growth or profitability would impair
the Company's ability to sustain its operations.
LIQUIDITY; FUTURE CAPITAL REQUIREMENTS
At March 31, 1995, the Company's unused sources of liquidity
consisted of approximately $1,204,000 in cash and cash equivalents.
As a result of the sale of assets and stock by the Company to Atmel on
February 7, 1994, the Company received cash proceeds of approximately
$5,000,000 and 135,593 shares of Atmel Common Stock. As described
under ``Recent Developments,'' approximately $4,200,000 (including
interest earned thereon) of remaining proceeds on the sale of the
shares of Atmel Common Stock received by the Company in the EEPROM
Asset Sale were placed in escrow pending any claims of indemnity by
Atmel with respect to the nonvolatile memory technology. This
$4,200,000 (including interest earned thereon) has been classified by
the Company as long-term assets on the Company's balance sheet as of
March 31, 1995. In addition, the Company filed a lawsuit against
Hualon concerning claims by Hualon to certain license rights to the
nonvolatile memory technology acquired by Hualon from the Company,
which could potentially lead to a claim by Atmel against the funds
held in such escrow. See ``Recent Developments.'' In November 1993,
the Company entered into a two-year line of credit agreement with the
CIT Group Incorporated (``CIT'') which provides for borrowings of up
to 80% of eligible accounts receivable not to exceed $5,000,000.
Interest on borrowings is charged at CIT's prime lending rate plus 2-
1/4% and is payable monthly. This credit facility is secured by all
of the Company's assets. There can be no assurance that the Company
will have adequate resources to satisfy its operating and working
capital requirements. In addition, it may become necessary for the
Company to raise additional funds from debt and/or equity financing.
There can be no assurance that such funds will be available on terms
acceptable to the Company, if at all.
FACTORS AFFECTING OPERATING RESULTS
The Company believes that its future annual and quarterly
operating results will be subject to quarterly variations based upon a
wide variety of factors that could have a material adverse effect on
the Company's revenues and profitability, many of which are outside
the control of the Company. These factors include fluctuations in
manufacturing yields, the timing of introduction of new products by
the Company and its competitors, changes in the markets addressed by
the Company's products, market acceptance of the Company's and its
customers' products, the volume and timing of orders received, changes
in the Company's product mix and customer base, the timing and extent
of research and development expenditures, the availability and cost of
semiconductor wafers from outside foundries, product obsolescence,
price erosion, competitive factors, cyclical semiconductor industry
conditions and general economic conditions. The Company's net revenue
and cost of sales vary depending upon the mix of products sold. Any
unfavorable changes in manufacturing yields or product mix, delays in
new product introductions, underutilization of manufacturing capacity,
increased price competition
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or other factors could have a material adverse effect on the Company's
operating results and financial condition. Historically, average
selling prices in the semiconductor industry have decreased over the
life of any particular product. There can be no assurance that the
average selling prices of the Company's current or future products
will not be subject to significant pricing pressures in the future.
In addition, the Company's business is characterized by short-term
orders and shipment schedules, and customer orders typically can be
canceled or rescheduled without significant penalty to the customer.
Due to the absence of substantial noncancellable backlog, the Company
typically plans its production and inventory levels based on internal
forecasts of customer demand, which are highly unpredictable and can
fluctuate substantially. In addition, the Company is limited in its
ability to reduce costs quickly in response to any revenue shortfalls,
which could have a material adverse effect on the Company's business,
operating results and financial condition.
DEPENDENCE ON NEW PRODUCT DEVELOPMENT AND TECHNOLOGICAL CHANGE
The average selling prices of the Company's products
historically have decreased over the products' lives and are expected
to continue to do so. To offset average selling price decreases
typically experienced over the life of any particular product, the
Company relies primarily on obtaining cost reductions in the
manufacture of those products and on introducing new, higher priced
products which incorporate advanced features or address new or
emerging markets. To the extent that such cost reductions and new
product introductions do not occur in a timely manner, the Company's
operating results will be adversely affected. As a result, the
Company's operating results will depend to a substantial extent on its
ability to continue to successfully introduce new products on a timely
basis that compete effectively on the basis of price and performance
and that address customer requirements. The success of new product
introductions is dependent upon several factors, including proper new
product definition, timely completion and introduction of new product
designs, availability of production capacity, achievement of
acceptable manufacturing yields and market acceptance of such new
products. The development cycle for new products is generally one to
two years, depending upon the complexity of the product. In addition,
because of the complexity of its products, the Company has experienced
delays from time to time in completing the development and
introduction of new products. Accordingly, new product development
requires a long-term forecast of market trends and customers' needs
and may be adversely affected by competing technologies serving
markets addressed by the Company's products. Although the Company has
successfully developed new products in the past, there can be no
assurance that it will continue to be able to do so in the future. In
this regard, as a result of the Company's financial results in the
past several years and other factors, the Company has been unable to
introduce new products as fast as existing products become obsolete or
as such product sales decline, as reflected by the reductions in sales
over such period. There can be no assurance this will not occur in
future periods. The markets for the original equipment manufacturers
who purchase the Company's products are characterized by rapidly
changing technology, evolving industry standards and improvements in
products and services. If technologies or standards supported by the
Company's products become obsolete or fail to gain widespread
commercial acceptance, the Company's business may be materially
adversely affected. As a result, the Company believes that continued
significant expenditures for research and development will be required
in the future. If the Company were unable to design, develop and
introduce competitive products on a timely basis, its future operating
results would be materially adversely affected.
New products are generally incorporated into a customer's
products or systems at the design stage. However, design wins, which
can often require significant expenditures by the Company, may precede
the generation of volume sales, if any, by a year or more. Moreover,
the value of any design win will depend in large part on the ultimate
success of the customer's product and on the extent to which the
system's design accommodates components manufactured by the Company's
competitors. No assurance can be given that the Company will achieve
design wins or that any design win will result in significant future
revenue.
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CUSTOMER CONCENTRATION
During certain periods, a relatively small number of the
Company's customers have accounted for a significant portion of the
Company's revenues. Sales to Apple Computer, Hewlett-Packard and
Cisco Systems accounted for approximately 30%, 12% and 10%,
respectively, of the Company's revenues for the three months ended
March 31, 1995 and approximately 31%, 10% and 10%, respectively, for
the six months ended March 31, 1995. Sales to Apple Computer,
Hewlett-Packard and Cisco Systems accounted for approximately 22%, 10%
and 16%, respectively, of the Company's revenues for the three months
ended March 31, 1994 and approximately 9%, 8% and 13%, respectively,
for the six months ended March 31, 1994. The reduction, delay or
cancellation of orders from one or more of the Company's significant
customers for any reason, including a reduction in the demand for data
communications products that include the Company's products, could
have a material adverse effect on the Company's results of operations
and financial condition. The Company's sales to its customers,
including Apple Computer, are made under purchase orders and not
pursuant to any long-term agreements. In addition, the Company's
products are often sole-sourced to its customers, and the Company's
operating results and financial condition could be materially and
adversely affected if one or more of the Company's major customers
were to develop other sources of supply. Furthermore, in view of the
short product life cycles, in the market for data communications
products, the Company's operating results would be materially and
adversely affected if one or more of the Company's significant
customers were to purchase integrated circuits manufactured by one of
the Company's competitors for inclusion in new generations of products
developed by its customers. The Company is also dependent upon sales
representatives and distributors for the sales of its products to
systems manufacturers. There can be no assurance that the Company's
current customers will continue to place orders with the Company, that
orders by existing customers will continue at the levels of previous
periods, or that the Company will be able to obtain orders from new
customers. The loss of one or more of the Company's current customers
could have a material adverse effect on the Company's business,
operating results and financial condition. In this regard, the
Company was notified in fiscal 1995 by Apple Computer that the Company
will receive no additional orders for the Company's proprietary
transceiver products following the second quarter of fiscal 1995 as
Apple Computer begins manufacturing its internally developed product.
As a result, the Company believes that revenues for the third quarter
of fiscal 1995 will be less than those reported in the second quarter
of fiscal 1995. The Company is actively marketing its LAN integrated
circuits to Apple Computer for the transceiver products and other data
communication applications. Although the Company believes that over
the next few fiscal quarters it will be able to replace such sales
with sales of LAN integrated circuits to Apple Computer, additional
sales of the Company's existing product line to other customers, and
sales of new products, there can be no assurance that the Company will
be successful in doing so.
DEPENDENCE UPON INDEPENDENT MANUFACTURERS AND ASSEMBLY SUPPLIERS
All of the Company's products are currently manufactured to
the Company's specifications by independent subcontractors, and the
Company maintains no wafer manufacturing or assembly operations of its
own. The Company currently utilizes semiconductor wafer manufacturing
subcontractors located in South Korea, Japan and the United States.
The Company also contracts with independent assembly suppliers located
in Asia for the assembly of all of its products, and relies
principally on one assembly contractor located in South Korea. As a
result, all of the Company's products are manufactured by independent
foundries and assembled by foreign assembly contractors.
Consequently, the Company currently relies exclusively on the
manufacturing, assembly and other resources of these independent
manufacturers and assembly suppliers. Currently, certain of these
independent manufacturers serve as the sole source for several of the
Company's products. The Company's reliance on subcontractors to
manufacture and assemble its products involves significant risks,
including reduced control over delivery schedules, the potential lack
of adequate capacity, reduced control over fluctuations in
manufacturing yields, discontinuation or phase-out of such
subcontractors' production processes, and potential misappropriation
of proprietary intellectual property. To date, the process of
transferring the Company's manufacturing operations to these
independent manufacturers has been acceptable; however, there can be
no assurance that problems will not occur in the future, or that such
manufacturers will be able to produce wafers at acceptable yields and
to deliver wafers to the Company in a timely manner. There can be no
assurance that
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the Company will not experience problems in timeliness, yields and
quality of wafer deliveries from its wafer manufacturing
subcontractors, each of which could have a material adverse effect on
the Company's operations and operating results. In addition, although
the Company has entered into manufacturing agreements with each of
these independent manufacturers, there can be no assurance that such
manufacturers will continue to manufacture products for the Company.
The Company does not have long-term, non-cancelable
contracts with its wafer suppliers. Therefore, the Company's wafer
suppliers could choose to prioritize capacity for other uses or reduce
or eliminate deliveries to the Company on short notice. Accordingly,
there can be no assurance that the Company's foundries will allocate
sufficient wafer manufacturing capacity to the Company to satisfy the
Company's product requirements. In addition, the Company has been,
and expects to continue to be in the future, particularly dependent on
one or more foundries for its wafer manufacturing requirements. Any
sudden demand for an increased amount of wafers or sudden reduction or
elimination of any existing source or sources of wafers could result
in a material delay in the shipment of the Company's products. There
can be no assurance that material disruptions in supply, which have
occurred periodically in the past, will not occur in the future. Any
such disruption could have a material adverse effect on the Company's
operating results and financial condition. In the event the Company
were unable to qualify alternative manufacturing sources for existing
or new products in a timely manner or such sources were unable to
produce wafers with acceptable manufacturing yields, the Company's
business, operating results and financial condition would be
materially and adversely affected.
DEPENDENCE ON FOUNDRY MANUFACTURING
The manufacture of semiconductor wafers for the Company's
products is a highly complex process that requires a high degree of
technical skill, state-of-the-art equipment and effective cooperation
between the wafer foundry and the Company's engineering staff to
produce acceptable yields. Worldwide manufacturing capacity for these
products is limited. Therefore, significant interruptions in supply
from any of the Company's independent foundries could adversely affect
the Company and its results of operations. Other unanticipated
changes in the Company's wafer supply or assembly arrangements could
reduce product availability, increase cost, impair quality and
reliability or decrease yield. Many of the factors that could result
in such changes are beyond the Company's control. To a considerable
extent, the Company's ability to succeed in the future will depend on
its ability to maintain access to advanced wafer fabrication
technologies. Since the Company does not own or operate its own wafer
fabrication or process development facility, the Company depends upon
independent companies to provide access to such technologies. In
light of this dependency, and the intensely competitive nature of the
semiconductor industry, there is no assurance that either technology
advantages or timely product introduction can be maintained in the
future. In connection with its arrangements with foreign independent
wafer suppliers, it is necessary for the Company to provide such
suppliers with proprietary information regarding its process and
product technologies. Although the Company has entered into
confidentiality and nondisclosure agreements with its foreign
suppliers, there can be no assurance that the Company will be able to
protect its rights under its patents, copyrights, maskwork rights or
such confidentiality and nondisclosure agreements in foreign
countries.
MANUFACTURING; VARIATION IN PRODUCTION YIELDS
The manufacture of semiconductor products is highly complex,
involving many precise and critical steps, and is sensitive to a wide
variety of factors, including the level of contaminants in the
manufacturing environment, impurities in the materials used and the
performance of sophisticated electronic equipment. Technical problems
which may arise in the manufacturing process at the manufacturing
facilities of any of the Company's independent foundries can adversely
affect manufacturing yields and the overall profitability of the
Company. Such technical problems may occur or new problems may arise
as the Company begins using new manufacturing processes in connection
with the introduction of new products. While the Company is
attempting to minimize the impact of such factors and potential
problems by developing several sources of wafer supply, certain of the
foundries utilized by the Company have experienced lower than
anticipated yields. No assurance
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can be given that the Company or its suppliers will not experience
yield problems in the future, which could have a material adverse
effect on the Company's results of operations.
RISKS ASSOCIATED WITH FOREIGN SUPPLIERS
A substantial number of the Company's products are
manufactured, and all of the Company's products are assembled, by
independent foundries and assembly suppliers located in foreign
countries, including Japan and South Korea. The Company is,
therefore, subject to certain risks generally associated with
contracting with foreign suppliers, including currency exchange
fluctuations, political instability, trade restrictions and changes in
tariff and freight rates.
THE SEMICONDUCTOR INDUSTRY
The semiconductor industry is subject to rapid technological
change, price erosion, occasional shortages of materials, variations
in manufacturing efficiencies, significant expenditures for capital
equipment and product development, and cyclical market patterns. In
recent years, the industry has experienced intermittent significant
economic downturns characterized by diminished product demand,
accelerated erosion of selling prices and production overcapacity.
Similar fluctuations may occur in the future, and there can be no
assurance that the Company will not be materially and adversely
affected in the future by such fluctuations or by cyclical conditions
in the semiconductor industry or slower growth in any of the markets
for the Company's products.
DEPENDENCE ON DATA COMMUNICATION MARKET
The Company anticipates that substantially all of the
Company's future revenues will be attributable to sales of data
communication products. The market for data communications products
is characterized by intense competition, relatively short product life
cycles and rapid technological change. In addition, the market for
data communications products has undergone a period of extremely rapid
growth and has experienced consolidation among the competitors in the
marketplace. The Company expects that substantially all of its
revenues for the foreseeable future will continue to consist of sales
of data communications products. The Company's results of operations
and financial condition would be materially adversely affected in the
event of any future slowdown or adverse events in the market for data
communications products.
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PRIOR RELIANCE UPON MILITARY SALES
Historically, a substantial proportion of the Company's
revenues and net income were attributable to products sold by the
Company for use in military applications. During fiscal 1991, 1992,
1993 and 1994, approximately 30%, 16%, 23% and 7%, respectively, of
the Company's revenues were attributable to products sold for use in
military applications. On average, these products contributed higher
profit margins than the Company's other products. Commencing in
fiscal 1992 and accelerating in fiscal 1993 and fiscal 1994, the
Company experienced a significant reduction in the demand for products
sold for use in military applications as compared with prior periods.
This reduction in such products had a material adverse effect on the
Company's results of operations and financial condition. As a result
of the Company's sale of assets related to its nonvolatile memory
products as part of the EEPROM Asset Sale in February 1994, the
Company anticipates that it will have no military sales for the
foreseeable future.
LITIGATION
On March 30, 1994 the Company filed a lawsuit in the United
States District Court for the Northern District of California against
Hualon (``Hualon''), one of the Company's former foundries and joint
development partners. In the lawsuit, the Company originally sought
injunctive relief from the court to prevent Hualon from using certain
of the nonvolatile memory technology sold by the Company to Atmel
pursuant to the Asset Purchase Agreement, to which Hualon has asserted
certain license rights under an alleged license agreement. In
response to the Company's claims, Hualon asserted affirmative defenses
and counterclaims seeking a declaration by the court that the alleged
license agreement is valid and seeking specific performance of the
alleged license agreement and other agreements previously entered into
by the two parties. Hualon filed a motion for summary judgment and
the Company's initial claim was subsequently dismissed by the court.
Hualon has subsequently amended its counter claims to include
additional claims in the proceeding, including claims for damages for
breach of, and for money owed pursuant to, other agreements between
the Company and Hualon. The Company has subsequently amended its
original complaint to include a number of additional claims against
Hualon, including claims for damages for breach of, and for money owed
pursuant to, such other agreements. Under the terms of one of the
escrow agreements entered into with Atmel in connection with the
EEPROM Asset Sale, under which approximately $4,200,000 (including
interest earned thereon) is currently on deposit in escrow, the
Company will be entitled to receive such funds if it is determined
that the alleged license agreement is invalid, or, if no such
determination is made, to the extent that any claims made by Atmel
that Atmel has suffered damages as a result of the alleged license
agreement are unsuccessful, if Atmel fails to make a claim to such
funds by February 1999, or as otherwise agreed by the Company and
Atmel. The Company intends to vigorously prosecute its claims in this
lawsuit and to defend claims made by Hualon. The Company believes
that its claims and defenses in this lawsuit are meritorious.
However, there can be no assurance as to the possible outcome of this
proceeding. In the event that the Company is not successful in
invalidating the alleged license agreement, Atmel may assert a claim
against the Company under the Asset Purchase Agreement, including a
claim for damages, if suffered by Atmel as a result of Hualon's use of
any of such technology, and, in the event any such claim by Atmel is
determined to be valid, Atmel may recover any such damages from the
escrow described above. The Company believes that, in the event of
any claim by Atmel, the amount of damages that may be payable by the
Company upon a resolution thereof will not have a material adverse
effect on the Company's cash flow, financial position or results of
operations. However, there can be no assurance as to such matters.
COMPETITION
The semiconductor industry is intensely competitive and is
characterized by price erosion, rapid technological change, short
product life cycles, cyclical market patterns and heightened domestic
and international competition in many markets. The Company competes
with major domestic and international semiconductor companies, most of
which have substantially greater financial, technical, manufacturing
and marketing resources
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than the Company, as well as other substantial resources with which to
more effectively pursue engineering, manufacturing, marketing and
distribution of their products. In addition, many of the Company's
competitors maintain their own wafer fabrication and manufacturing
facilities, which the Company considers to be a competitive advantage.
Accordingly, the Company believes that it is at a substantial
competitive disadvantage in comparison to larger companies with wafer
fabrication and manufacturing facilities, broader product lines,
greater technical, financial and other resources and a higher level of
customer service and support. New entrants may also increase their
participation in the semiconductor market. The ability of the Company
to compete successfully in the rapidly evolving area of high
performance integrated circuit technology depends on factors both
within and outside of its control, including success in designing and
subcontracting the manufacture of new products that implement new
technologies, adequate sources of raw materials, protection of Company
products by effective utilization of intellectual property laws,
product quality, reliability, price, efficiency of production, the
pace at which customers incorporate the Company's integrated circuits
into their products, success of competitors' products and general
economic conditions. Because the Company does not currently
manufacture its own semiconductor wafers, the Company is vulnerable to
process technology advances utilized by competitors to manufacture
higher performance or lower cost products. There is no assurance that
the Company will be able to compete successfully in the future.
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PATENTS, LICENSES AND INTELLECTUAL PROPERTY CLAIMS
The Company's success depends in part on its ability to
obtain patents, licenses and other intellectual property rights
covering its products and manufacturing processes. To that end, the
Company has in the past acquired certain patents and patent licenses
and intends to continue to seek patents on its inventions and
manufacturing processes in appropriate circumstances. The process of
seeking patent protection can be long and expensive and there can be
no assurance that patents will issue from currently pending or future
applications or that existing patents or any new patents that may be
issued will be of sufficient scope or strength to provide meaningful
protection or any commercial advantage to the Company. The Company
may be subject to or may initiate interference proceedings in the
patent office, which can demand significant financial and management
resources. As is typical in the semiconductor industry, the Company
has from time to time received, and may in the future receive,
communications alleging possible infringement of patents or other
intellectual property rights of others. Based on industry practice,
the Company believes that any necessary licenses or other rights are
often obtainable on commercially reasonable terms, but no assurance
can be given that licenses would be available or that litigation would
not ensue. Litigation, which could result in substantial cost to and
diversion of effort by the Company, may be necessary to enforce
patents or other intellectual property rights of the Company or to
defend the Company against claimed infringement of the rights of
others. The failure to obtain necessary licenses or other rights or
litigation could have a material adverse effect on the Company's
operations.
ENVIRONMENTAL AND OTHER GOVERNMENTAL REGULATIONS
Certain of the Company's foundry and assembly subcontractors
are subject to a variety of government regulations related to the
discharge or disposal of toxic, volatile or otherwise hazardous
chemicals used in their manufacturing process. The failure by the
Company's subcontractors to comply with present or future
environmental regulations could result in fines, suspension of
production or cessation of operations. Such regulations could also
require the subcontractors to acquire equipment or to incur
substantial other expenses to comply with environmental regulations.
If substantial additional expenses were incurred by the Company's
subcontractors, product costs could significantly increase, thus
materially adversely affecting the Company's results of operations.
Additionally, the Company is subject to a variety of government
regulations relating to its operations, such as environmental, labor
and export control regulations. While the Company believes it has all
permits necessary to conduct its business, the failure to comply with
present or future regulations could result in fines being imposed on
the Company or suspension or cessation of operations. Any failure by
the Company or its subcontractors to control the use of, or adequately
restrict the discharge of hazardous substances could subject it to
future liabilities, and could have a material adverse effect on the
Company.
ATTRACTION AND RETENTION OF KEY PERSONNEL
The Company's future success is dependent upon its ability
to hire and retain qualified technical and management personnel,
particularly highly skilled design engineers involved in new product
development. The competition for such personnel is intense and there
can be no assurance that the Company will be able to attract and
retain skilled and experienced personnel in the future. Any failure
to attract or retain such personnel could adversely affect the
Company's future prospects and profitability. In June 1995, the
Company's Chief Financial Officer resigned his position with the
Company. The Company is currently in the process of recruiting a
replacement for the Chief Financial Officer position.
TAX LOSS CARRYFORWARDS
At September 30, 1994, the Company had net operating loss
carryforwards of approximately $103,000,000 for federal tax purposes,
which expire in 1998 through 2008. Under Section 382 of the Internal
Revenue Code of 1986, as amended, utilization of prior net operating
loss carryforwards is limited after an ownership change, as defined in
Section 382, to an annual amount equal to the value of the loss
corporation's outstanding stock immediately before the date of the
ownership change multiplied by the federal long-term
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tax-exempt rate. This offering is not expected to limit the Company's
utilization of net operating loss carryforwards under Section 382.
However, there can be no assurance that the Company will not issue
additional shares to obtain necessary additional future financing or
that certain of the Company's major stockholders will not sell all of
their shares, in each case in a transaction that would trigger such
Section 382 limitation. In the event the Company achieves profitable
operations and triggers the Section 382 limitation, any significant
limitation on the utilization of net operating loss carryforwards
would have the effect of increasing the Company's tax liability and
reducing net income and available cash resources.
VOLATILITY OF STOCK PRICE
The Company's Common Stock has experienced substantial price
volatility and such volatility may occur in the future, particularly
as a result of quarter to quarter variations in the actual or
anticipated financial results of, or announcements by, the Company,
its competitors and other companies in the semiconductor industry. In
addition, the stock market has experienced extreme price and volume
fluctuations which have affected the market price of many technology
companies in particular and which have often been unrelated to the
operating performance of these companies. Broad market fluctuations,
as well as general economic and political conditions, may adversely
affect the market price of the Common Stock.
EFFECT OF ANTITAKEOVER PROVISIONS
The Company's Board of Directors has the authority to issue
up to 1,000,000 shares of Preferred Stock and to determine the price,
rights, preferences, and privileges of those shares without any
further vote or action by the Company's stockholders. The rights of
the holders of Common Stock will be subject to, and may be adversely
affected by, the rights of the holders of any Preferred Stock that may
be issued in the future. While the Company has no present intention
to issue shares of Preferred Stock, such issuance, while providing
desirable flexibility in connection with possible acquisitions and
other corporate purposes, could have the effect of making it more
difficult for a third party to acquire a majority of the outstanding
voting stock of the Company. In addition, such Preferred Stock may
have other rights, including economic rights senior to the Common
Stock, and, as a result, the issuance thereof could have a material
adverse effect to the market value of the Common Stock. Furthermore,
the Company is subject to the anti-takeover provisions of Section 203
of the Delaware General Corporation Law, which prohibits the Company
from engaging in a ``business combination'' with an ``interested
stockholder'' for a period of three years after the date of the
transaction in which the person became an interested stockholder,
unless the business combination is approved in a prescribed manner.
The application of Section 203 also could have the effect of delaying
or preventing a change of control of the Company. Certain other
provisions of the Company's Certificate of Incorporation may have the
affect of delaying or preventing changes in control or management of
the Company, which could adversely affect the market price of the
Company's Common Stock. See ``Description of Capital Stock.''
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USE OF PROCEEDS
To the extent the warrants are exercised for cash, the proceeds
will be used for working capital and general corporate purposes. To
the extent any convertible warrant is converted rather than exercised,
the Company will receive no proceeds from the issuance of Shares
pursuant to such warrant.
SELLING STOCKHOLDERS
All of the Shares being offered by the Selling Stockholders are
issuable to the Selling Stockholders pursuant to warrants to purchase
Common Stock as described below.
SILICON VALLEY BANK
A warrant exercisable for 150,000 Shares was issued to Silicon
Valley Bank on August 2, 1991 in connection with a loan from Silicon
Valley Bank to SEEQ. Such warrant is exercisable until August 1, 1996
and has an exercise price of $1.5625 per Share. A second warrant
exercisable until August 1, 1995 for 100,000 Shares was issued to
Silicon Valley Bank on March 19, 1992 in connection with another loan
to the Company. The exercise price for that warrant is $3.125 per
Share. Both warrants held by Silicon Valley Bank are convertible in
whole or in part, at the option of Silicon Valley Bank, into Common
Stock. In the event that Silicon Valley Bank chooses to convert its
warrants rather than exercise them, the Company will not receive any
proceeds from such warrants and Silicon Valley Bank will receive that
number of shares of Common Stock determined by dividing (a) the
aggregate fair market value of the Common Stock otherwise issuable
upon exercise minus the aggregate exercise price for such Common Stock
by (b) the fair market value of one share of Common Stock. The fair
market value of a share of Common Stock would be the last sale price
reported for the business day immediately before Silicon Valley Bank
delivers a notice of exercise to the Company.
RODMAN & RENSHAW; GRUNTAL
In connection with an offering of the Company's Common Stock in
April 1993 in an offshore transaction pursuant to the exemption
provided by Regulation S under the Securities Act, Rodman & Renshaw,
Inc. (``Rodman'') and Gruntal & Co., Incorporated (``Gruntal''), the
placement agents for such offering, were each issued a warrant on
April 27, 1993 exercisable for 72,231 Shares and 48,154 Shares
respectively. Rodman's warrant was subsequently replaced with three
separate warrants as follows: one warrant exercisable for 36,115
Shares issued to Rodman; one warrant exercisable for 18,058 Shares
issued to Steven A. Rothstein, an employee of Rodman; and one warrant
exercisable for 18,058 Shares issued to Louis Lichtenfeld, an employee
of Rodman. The warrants held by Gruntal, Rodman, Steven A. Rothstein
and Louis Lichtenfeld each expire on April 27, 1996 and have an
exercise price of $1.25 per share.
SECURITY RESEARCH ASSOCIATES
In connection with a public offering of the Company's Common
Stock in July 1993, a warrant exercisable for 460,000 Shares was
issued to Security Research Associates, Inc. (``Security Research''),
the underwriter for such offering. This warrant was subsequently
replaced with three separate warrants, as follows: one warrant
exercisable for 92,000 Shares issued to Roger L. Batty, an employee of
Security Research; one warrant exercisable for 92,000 Shares issued to
Jay Hayes, an employee of Security Research; and one warrant
exercisable for 276,000 Shares issued to Brian G. Swift, an employee
of Security Research. Such warrants expire on July 31, 1998 and have
an exercise price of $1.0625 per Share. These warrants are
convertible, at the option of the warrant holder, into Common Stock.
In the event that a holder chooses to convert its warrant rather than
exercise them, the Company will not receive any proceeds from such
warrant and the holder will receive that number of shares of Common
Stock determined by dividing (a) the aggregate fair market value of
the Common
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Stock otherwise issuable upon exercise minus the aggregate exercise
price for such Common Stock by (b) the fair market value of one share
of Common Stock. The fair market value of a share of Common Stock
would be the last sale price reported for the business day immediately
before the holder delivers a notice of exercise to the Company.
SALE OF THE SHARES
The Shares offered hereby are being offered directly by the
Selling Stockholders. The Company will receive no proceeds from the
sale of any of the Shares. However, the Company will receive the
exercise price paid upon exercise of the warrants covering any Shares
to be offered and sold pursuant to this Prospectus. The sale of the
Shares may be effected by the Selling Stockholders from time to time
in transactions in the over-the-counter market, in negotiated
transactions, or a combination of such methods of sale, at fixed
prices which may be changed, at market prices prevailing at the time
of sale, at prices related to prevailing market prices or at
negotiated prices. The Selling Stockholders may effect such
transactions by selling the Shares to or through broker-dealers, and
such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders and/or the
purchasers of the Shares for whom such broker-dealers may act as
agents or to whom they sell as principals, or both (which compensation
as to a particular broker-dealer might be in excess of customary
commissions).
At the time a particular offer of Shares is made, to the
extent required, a Prospectus Supplement will be distributed which
will set forth the exact number of Shares being offered and the terms
of the offering, including the name or names or any underwriters,
dealers or agents, the purchase price paid by any underwriter for the
Shares purchased from Selling Stockholders, any discounts, commissions
and other items constituting compensation from the Selling
Stockholders, and any discounts, commissions or concessions allowed or
reallowed or paid to dealers.
In order to comply with the securities laws of certain
states, if applicable, the Shares will be sold in such jurisdictions
only through registered or licensed brokers or dealers. In addition,
in certain states, the Shares may not be sold unless they have been
registered or qualified for sale in the applicable state or an
exemption from the registration or qualification requirement is
available and is complied with.
The Selling Stockholders and any broker-dealers, agents or
underwriters that participate with the Selling Stockholders in the
distribution of the Shares may be deemed to be ``underwriters'' within
the meaning of Section 2(11) of the Securities Act, and any
commissions received by them and any profit on the resale of the
Shares purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act. The Company has agreed to
indemnify the Selling Stockholders against certain liabilities,
including liabilities under the Securities Act, as an underwriter or
otherwise.
Under applicable rules and regulations under the Exchange
Act, any person engaged in the distribution of the Shares may not
simultaneously engage in market making activities with respect to the
Common Stock of the Company for a period of two business days prior to
the commencement of such distribution. In addition and without
limiting the foregoing, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act and the rules and
regulations thereunder, including, without limitation, Rules 10b-6 and
10b-7, which provisions may limit the timing of purchases and sales of
shares of the Company's Common Stock by the Selling Stockholders.
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LEGAL MATTERS
The validity of the securities offered hereby will be passed
upon for the Company by Brobeck, Phleger & Harrison, San Francisco,
California. Certain attorneys of Brobeck, Phleger & Harrison
beneficially own an aggregate of approximately 11,000 shares of the
Company's Common Stock.
EXPERTS
The consolidated financial statements (including schedules
incorporated by reference) of SEEQ Technology Incorporated and its
subsidiaries as of September 30, 1994 and 1993 and for each of the
three years in the period ended September 30, 1994, incorporated by
reference herein, have been so incorporated in reliance on the report
of Price Waterhouse LLP, independent accountants, given upon the
authority of said firm as experts in auditing and accounting.
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830,385 Shares
SEEQ TECHNOLOGY INCORPORATED
COMMON STOCK
