<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 13E-4/A
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
(Amendment No. 1)
-----------------
STREAMLOGIC CORPORATION
(Name of Issuer)
----------------
STREAMLOGIC CORPORATION
(Name of Person(s) Filing Statement)
----------------
6% Convertible Subordinated Debentures due March 15, 2012
(Title of Class of Securities)
----------------
863238-AA-5
(CUSIP Number of Class of Securities)
----------------
Lee N. Hilbert
Chief Financial Officer
21329 Nordhoff Street
Chatsworth, California 91311
(818) 701-8400
(Name, Address and Telephone Number of Persons Authorized to Receive Notices
and Communications on Behalf of Person(s) Filing Statement)
Copy to:
Brian G. Cartwright, Esq.
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071-2007
(213) 891-7941
October 7, 1996
(Date Tender Offer First Published, Sent or Given to Security Holders)
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
PAGE 1 OF 6 PAGES
EXHIBIT INDEX ON PAGE 6
<PAGE>
ITEM 1. SECURITY AND ISSUER.
(a) StreamLogic Corporation hereby amends and supplements its statements
on Schedule 13E-4 filed with the Securities and Exchange Commission on October
7, 1996 (the "Schedule 13E-4"). Unless otherwise indicated herein, each
capitalized term used but not defined herein shall have the meaning assigned to
such term in the Schedule 13E-4.
(b) The information set forth in the Supplement to Offer to Exchange
dated November 6, 1996 (the "Supplement") attached hereto as exhibit (a)(9) is
incorporated herein by reference. The Offer to Exchange dated October 7, 1996,
as amended and supplemented by the Supplment, and the Letter of Transmittal
together constitute the "Offer."
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in "Amendments to the Offer to Exchange"
of the Supplement is incorporated herein by reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
(a)-(j) The information set forth in "Amendments to the Offer to Exchange"
of the Supplement is incorporated herein by reference.
<PAGE>
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE ISSUER'S SECURITIES.
The information set forth in "Amendments to the Offer to Exchange" of the
Supplment is incorporated herein by reference.
ITEM 7. FINANCIAL INFORMATION.
(a)-(b) The information set forth in "Amendments to the Offer to Exchange"
of the Supplment is incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(b) The information set forth in "Amendments to the Offer to Exchange"
of the Supplment is incorporated herein by reference.
(e) The information set forth in the Offer to Exchange, the related
Letter of Transmittal and the Supplement, copies of which are attached hereto as
Exhibits (a)(1), (a)(2) and (a)(9), respectively is incorporated herein by
reference.
<PAGE>
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
(a)(1)* Offer to Exchange dated October 7, 1996.
(a)(2)* Letter of Transmittal.
(a)(3)* Notice of Guaranteed Delivery.
(a)(4)* Letter from the Company to Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.
(a)(5)* Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.
(a)(6)* Letter from the Company to 6% Debenture Holders.
(a)(7)* Text of Press Releases dated June 17, 1996, September 16,
1996 and October 6, 1996.
(a)(8)* Guidelines of the Internal Revenue Service for
Certification of Taxpayer Identification Number on Substitute
Form W-9.
(a)(9) Supplement to Offer to Exchange dated November 6, 1996.
(a)(10) Supplemental Letter from the Company to Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.
(b) * Not applicable.
(c)(1)* Letter Agreement dated as of June 14, 1996 between the
Company and Loomis Sayles & Co., L.P.
(c)(2)* Letter Agreement dated September 13, 1996 between the Company
and Loomis Sayles & Co., L.P.
(c)(3)* Letter Agreement dated as of October 3, 1996 between the
Company and Loomis Sayles & Co., L.P.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
* previously filed
</TABLE>
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: November 6, 1996 STREAMLOGIC CORPORATION
BY /s/ Lee N. Hilbert
-------------------------------------
NAME: LEE N. HILBERT
TITLE: CHIEF FINANCIAL OFFICER
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- - ------- ----------- ------------
<S> <C> <C>
(a)(9) Supplement to Offer to Exchange dated November 6, 1996.
(a)(10) Supplemental Letter from the Company to Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
</TABLE>
<PAGE>
STREAMLOGIC CORPORATION
SUPPLEMENT TO OFFER TO EXCHANGE
DATED OCTOBER 7, 1996
----------------
This Supplement (the "Supplement") supplements the Offer to Exchange dated
October 7, 1996 (the "Offer to Exchange") with respect to the offer by
StreamLogic Corporation (the "Company") to exchange any and all of its 6%
Convertible Subordinated Debentures due 2012 for cash, increasing rate
promissory notes, common stock of the Company and warrants to purchase common
stock of the Company. This Supplement is accompanied by a copy of the Offer to
Exchange and should be read in conjunction therewith. The Exchange Offer has
been extended to 12:00 midnight, New York City time on November 14, 1996,
unless further extended (the "Expiration Date"). Unless otherwise defined,
capitalized terms used herein have the same meanings as in the Offer to
Exchange. EXCEPT AS SET FORTH HEREIN, THE TERMS AND CONDITIONS OF THE EXCHANGE
OFFER REMAIN AS SET FORTH IN THE OFFER TO EXCHANGE.
RECENT DEVELOPMENTS
On October 24, 1996, a Nasdaq Qualification Hearing with respect to the
continued inclusion of the Company's Common Stock on the Nasdaq NMS was held
in Washington, D.C. before a three-member panel of the National Association of
Securities Dealers Inc. At such hearing, the Company requested that it be
granted an extension until November 21, 1996 to meet the net tangible assets
requirement for continued inclusion of its Common Stock on the Nasdaq NMS. On
November 4, 1996, the Company received a determination from Nasdaq that its
inclusion on the Nasdaq NMS would be continued through November 21, 1996 and
thereafter, subject to the Company having net tangible assets not less than
$10 million on or before such date.
On October 16, 1996, the Company announced a plan to relocate its corporate
headquarters and consolidate all of its manufacturing operations in Northern
California. This cost saving measure calls for the closing of the company's
current Chatsworth facility and relocation of its manufacturing operations,
engineering and administration by early April 1997.
Pursuant to the agreement relating to the Company's July 1, 1996 purchase of
the hardware business of FWB Software Inc. ("FWB") and the Company's 11%
equity investment in the software business retained by FWB, FWB was to receive
additional shares or return shares of StreamLogic Common Stock such that the
market value (based on the average price as defined in the Operating Agreement
of FWB Software, LLC) of the shares contributed to FWB (1,256,123 shares were
contributed to FWB effective July 1, 1996) would be equal to $7.5 million,
such adjustment to have occurred on October 29, 1996. Such adjustment required
the issuance of approximately 2,760,000 additional shares of StreamLogic
Common Stock to FWB which issuance, if made, would have contravened the terms
of Tender Agreement as well as certain Nasdaq rules relating to the issuance
of 20% or greater of an issuer's outstanding common stock. The Company did not
issue such additional shares to FWB on October 29, 1996, and on November 1,
1996 reached an agreement with FWB whereby the Company issued to FWB 1,380,000
additional shares of Common Stock, a $1.25 million promissory note bearing
interest at Bank of America's reference rate plus 2% due November 1998 and
secured by the Company's equity interest in FWB Software LLC, and paid to FWB
$500,000 in cash. In addition, the Company's equity interest in FWB Software
LLC was reduced from 11% to 7.5%. After giving effect to the issuance of the
additional 1,380,000 shares of Common Stock to FWB, and assuming that 100% of
the 6% Debentures are accepted for exchange pursuant to the Exchange Offer,
the 2,636,123 shares of Common Stock owned by FWB represent approximately 7.6%
of the outstanding shares of Common Stock, the 16,250,000 shares of Common
Stock issued pursuant to the Exchange Offer represent approximately 47.0% of
the outstanding shares of Common Stock, and
----------------
NEITHER THIS TRANSACTION NOR THESE SECURITIES HAVE BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION. THE COMMISSION HAS NOT
PASSED UPON THE FAIRNESS OR MERITS OF THIS TRANSACTION NOR UPON THE ACCURACY
OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS SUPPLEMENT. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
- - --------------------------------------------------------------------------------
THE EXCHANGE OFFER HAS BEEN EXTENDED TO 12:00 MIDNIGHT, NEW YORK CITY TIME
ON NOVEMBER 20, 1996, UNLESS FURTHER EXTENDED (THE "EXPIRATION DATE").
- - --------------------------------------------------------------------------------
The date of this Supplement is November 6, 1996
1
<PAGE>
the Warrants to purchase 3,000,000 shares of Common Stock issued pursuant to
the Exchange Offer represent, when exercised and taken together with the
Common Stock issued as part of the Tender Offer Consideration, approximately
51.3% of the outstanding shares of Common Stock (in each case, based on the
number of shares outstanding as of August 5, 1996 and giving effect to the
issuance of the additional shares to FWB and the issuance of shares in the
Exchange Offer).
AMENDMENTS TO THE OFFER TO EXCHANGE
The following sections of the Offer to Exchange have been modified as
described below. Except as set forth below and elsewhere in this Supplement,
the terms and conditions of the Exchange Offer remain as stated in the Offer
to Exchange previously mailed to you.
CAUTIONARY STATEMENT
This section has been amended by adding the following sentence to the end of
the last paragraph on page 3:
The forward-looking statements made in connection with the Offer to
Exchange are excluded, however, from the statutory safe harbor provided by
Section 21E of the Private Securities Litigation Reform Act of 1995.
SUMMARY--THE EXCHANGE OFFER
This section of the Offer to Exchange has been amended by adding the
following sentence after the first sentence of the first paragraph of such
section on page 7:
Tendering holders of 6% Debentures will not receive fractional shares of
Common Stock in the Exchange Offer but instead will receive an additional
cash payment in lieu thereof in an amount equal to the same fraction of the
market price per share of Common Stock.
SUMMARY--CONDITIONS TO THE EXCHANGE OFFER
This section of the Offer to Exchange has been amended by amending the
phrase "in the sole judgment of the Board of Directors of the Company" to "in
the reasonable judgment of the Board of Directors of the Company" in clause
(ii) of the first paragraph of such section on page 7.
This section of the Offer to Exchange has been further amended by adding the
following sentences to the end of the first paragraph of such section on page
7:
The obligation of StreamLogic to consummate the Exchange Offer is also
conditioned upon the approval of StreamLogic's stockholders as well as
other additional conditions. See "The Exchange Offer--Conditions."
SUMMARY--GENERAL INFORMATION REGARDING THE EXCHANGE OFFER
This section of the Offer to Exchange has been amended by adding the
following sentence at the end of the paragraph titled "Accrued Interest on the
6% Debentures" on page 9:
As of November 14, 1996, there will be approximately $40.33 of accrued and
unpaid interest for each $1,000 face amount of 6% Debentures. If the
Expiration Date is extended beyond November 14, 1996, interest will accrue
at a rate of $0.17 per day for each $1,000 face amount of 6% Debentures.
SPECIAL FACTORS--FAIRNESS OF THE EXCHANGE OFFER
This section of the Offer to Exchange has been amended by modifying the
second paragraph of such section on page 13 to read in its entirety as
follows:
Other factors considered by the Board in connection with the structuring
of the Tender Agreement and the Exchange Offer were (i) the premium
represented by the Tender Offer Consideration over the price at
2
<PAGE>
which the 6% Debentures traded prior to the announcement of the Exchange
Offer ($163.75 per $1,000 face amount of 6% Debentures, assuming that the
Promissory Notes are valued at par, the shares of Common Stock are valued
at $2.125 per share (based on the closing market price on October 3, 1996)
and each Warrant to purchase 40 shares of Common Stock is valued at $40 (as
estimated by the Company based on the Black-Scholes option pricing formula)
and given the $570 market value per $1,000 face amount of the 6% Debentures
on September 26, 1996 (the last day prior to the date the Second Amendment
was publicly announced on which trades in the 6% Debentures were reported);
(ii) the degree to which the conversion feature of the 6% Debentures is
"out-of the money" (approximately 22.8-fold, based on the $48.5 conversion
price and a closing market price of the Common Stock of $2.125 on October
3, 1996); (iii) the historical trading pattern of the 6% Debentures (which
had not traded at a price greater than 125% of the price they traded on
September 26, 1996 in the previous 11 calendar quarters) and the Common
Stock (which had traded at a price greater than 350% of the price it traded
on October 3, 1996 as recently as the second calendar quarter of 1996);
(iv) recent market prices for 6% Debentures and Common Stock, which pertain
to the premium offered by the Tender Offer Consideration; (v) the pro forma
effect of acceptance of the Exchange Offer on the Company's consolidated
capitalization (which would increase the Company's net tangible assets by
over $50 million, permitting the Company to return to compliance with the
requirements for inclusion on the Nasdaq NMS and thereby benefiting all
holders of the Company's securities by, among other things, facilitating
the Company's access to public capital markets). Because the 6% Debentures
are effectively a "straight debt" security due to the degree to which the
conversion feature is "out-of-the-money," the Board did not consider the
Company's net book value, going concern value or liquidation value to be
material factors in its consideration of the fairness of the Exchange Offer
to holders of 6% Debentures. The Board also considered the extensive arm's-
length negotiations with Loomis Sayles over an approximately five-month
period with respect to the terms of the Tender Agreement and the Exchange
Offer in its consideration of the fairness of the Exchange Offer to holders
of 6% Debentures. In light of its consideration of all of the foregoing
factors, the Board concluded that the Exchange Offer is fair to beneficial
owners of 6% Debentures.
This section has been further amended by adding the following sentence at
the end of the third paragraph on page 13:
Chanin was retained by Loomis Sayles at the Company's expense solely to
assist Loomis Sayles in negotiating the terms of the Tender Agreement, and
did not advise or assist the Company in determining the fairness of, or
prepare any reports or appraisals or opinions with respect to, the Tender
Agreement or the Exchange Offer.
SPECIAL FACTORS--SIGNIFICANT STOCKHOLDER
The first paragraph of this section on page 15 has been amended and restated
in its entirety as follows:
Following consummation of the Exchange Offer, Loomis Sayles will advise,
assuming that all of the investors it advises remain its clients (which
investors may not be so obligated), investors holding approximately 38.7%
of the outstanding Common Stock, and approximately 42.0% assuming exercise
of all Warrants (in each case, based on the number of shares outstanding on
August 5, 1996 and giving effect to the issuance of shares in the Exchange
Offer). In addition, the Company has agreed to include two persons
designated by investors advised by Loomis Sayles on its Board of Directors
prior to or on the Expiration Date, and to include two persons designated
by investors advised by Loomis Sayles in management's slate of nominees in
future elections, until such time investors advised by Loomis Sayles no
longer own at least 28% of the outstanding Common Stock of StreamLogic. The
Company expects that Loomis Sayles will make recommendations to the
investors it advises with respect to the selection of such directors.
Nasdaq representatives have advised the Company that, under Nasdaq rules,
the consummation of the Exchange Offer may be deemed to constitute a change
in control of the Company.
3
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Unaudited Pro Forma Condensed Consolidated Balance Sheet on page 21 and
the Unaudited Pro Forma Condensed Consolidated Statement of Operations
beginning on page 22 have been amended to remove from the pro forma statements
of operations and include in the calculation of pro forma gain a provision for
the expected interest payment obligations on the Promissory Notes pursuant to
Financial Accounting Standards Board Statement No. 15, and to include the pro
forma effect on the pro forma statements of operations for the three-month
period ended March 29, 1996 and the year ended December 29, 1995 of the sale of
the Company's drive business and the commencement of the OEM Supply Agreement
between the Company and Micropolis (S) Pte Ltd as of March 29, 1996. The
amended and restated Unaudited Pro Forma Condensed Consolidated Balance Sheet
and the Unaudited Pro Forma Condensed Consolidated Statement of Operations read
in their entirety as follows:
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 28, 1996
---------------------------------
STREAMLOGIC
STREAMLOGIC EXCHANGE CORPORATION
CORPORATION OFFER(1) PRO FORMA
----------- -------- -----------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments............................... $ 45,859 $(10,000) $ 35,859
Accounts receivable, net................... 8,144 -- 8,144
Receivable from Singapore Technologies..... 1,000 -- 1,000
Inventories................................ 8,025 -- 8,025
Other current assets....................... 1,200 -- 1,200
--------- -------- ---------
Total current assets..................... 64,228 (10,000) 54,228
Property, plant and equipment, net........... 5,639 -- 5,639
Other assets................................. 1,884 (1,200) 684
--------- -------- ---------
$ 71,751 $(11,200) $ 60,551
========= ======== =========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
10% Subordinated Notes..................... $ 10,000 $ -- $ 10,000
Current maturities of long-term debt....... 3,750 (3,750) --
Accounts payable........................... 6,302 -- 6,302
Other accrued liabilities.................. 10,862 1,638 12,500
--------- -------- ---------
Total current liabilities.................... 30,914 (2,112) 28,802
Unsecured promissory notes, due 1998......... -- 8,500 8,500
Long term debt............................... 71,250 (71,250) --
Deferred income taxes........................ 1,720 -- 1,720
Shareholders' equity (deficit):
Common stock............................. 15,673 16,250 31,923
Additional paid-in capital............... 112,735 25,750 138,485
Accumulated deficit...................... (160,541) 11,662 (148,879)
--------- -------- ---------
Total shareholders' equity (deficit)..... (32,133) 53,662 21,529
--------- -------- ---------
$ 71,751 $(11,200) $ 60,551
========= ======== =========
</TABLE>
- - -------
(1) To give effect to the payment of cash and issuance of Common Stock and
Warrants pursuant to the Exchange assuming the holders of 100% of the
outstanding debentures accept the exchange. The pro forma gain application
to the above proposed Exchange after estimated adjustments (assuming 100%
participation by the holders) is:
<TABLE>
<S> <C>
Face value of debentures........................................... $ 75,000
Cash consideration................................................. (9,000)
Unsecured promissory notes......................................... (8,500)
Accrual of interest on unsecured promissory notes.................. (2,550)
Common Stock issued................................................ (39,000)
Reversal of accrued interest on debentures......................... 1,312
Transaction fees................................................... (1,000)
Charge off unamortized bond issuance cost.......................... (1,200)
Value of Warrants issued........................................... (3,000)
--------
12,062
Book provision for income tax...................................... 400
--------
Pro forma gain..................................................... $ 11,662
========
</TABLE>
4
<PAGE>
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 28, 1996
---------------------------------
STREAMLOGIC
STREAMLOGIC EXCHANGE CORPORATION
CORPORATION OFFER(2) PRO FORMA(3)
----------- -------- ------------
<S> <C> <C> <C>
Net sales..................................... $11,189 $ -- $11,189
Cost of sales................................. 10,467 -- 10,467
------- ------ -------
Gross profit.................................. 722 -- 722
Operating expenses:
Research and development.................... 2,465 -- 2,465
Selling, general and administrative......... 2,771 -- 2,771
------- ------ -------
Total operating expenses.................... 5,236 -- 5,236
------- ------ -------
Loss from operations.......................... (4,514) -- (4,514)
Interest income (expense), net................ (1,025) 1,125 100
------- ------ -------
Loss before income taxes...................... (5,539) 1,125 (4,414)
Income tax provision.......................... 8 -- 8
------- ------ -------
Net loss...................................... $(5,547) $1,125 $(4,422)
======= ====== =======
Loss per share................................ $ (.36) $ (.14)
======= =======
Weighted average shares outstanding........... 15,608 16,250 31,858
======= ====== =======
</TABLE>
- - --------
(2) Adjustment to interest expense to give effect to Exchange at the beginning
of period presented; reduction of interest expense on Debentures of
$1,125. Pursuant to Financial Accounting Standards Board Statement No. 15
the Company has included the expected interest payment obligations on the
unsecured promissory notes on the balance sheet and, accordingly, no
provision is included in the statement of operations. See Note (1) to
Unaudited Pro Forma Condensed Consolidated Balance Sheet.
(3) The above pro forma consolidated statement of operations does not include
an extraordinary gain of $11,662 which would be recorded in the Company's
consolidated financial statements in the period in which the Exchange
Offer is consummated.
5
<PAGE>
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 29, 1996
-----------------------------------------------------------
SALE OF OEM SUPPLY STREAMLOGIC
STREAMLOGIC DISK DRIVE AGREEMENT EXCHANGE CORPORATION
CORPORATION ASSETS(6) ADJUSTMENTS(6) OFFER(4) PRO FORMA(5)
----------- ---------- -------------- -------- ------------
<S> <C> <C> <C> <C> <C>
Net sales............... $ 24,408 $(17,670) $ -- $ -- $ 6,738
Cost of sales........... 40,799 (35,613) 504 -- 5,690
-------- -------- ----- ------ -------
Gross loss.............. (16,391) 17,943 (504) -- 1,048
Operating expenses:
Research and develop-
ment................. 8,874 (6,117) -- -- 2,757
Selling, general and
administrative....... 8,836 (6,118) -- -- 2,718
-------- -------- ----- ------ -------
Total operating ex-
penses............... 17,710 (12,235) -- -- 5,475
-------- -------- ----- ------ -------
Loss from operations.... (34,101) 30,178 (504) -- (4,427)
Interest income (ex-
pense), net............ (1,854) -- -- 1,125 (729)
-------- -------- ----- ------ -------
Loss before income tax-
es..................... (35,955) 30,178 (504) 1,125 (5,156)
Income tax provision ... 252 -- -- -- 252
-------- -------- ----- ------ -------
Net loss................ $(36,207) $ 30,178 $(504) $1,125 $(5,408)
======== ======== ===== ====== =======
Net loss per share...... $ (2.32) $ (.17)
======== =======
Weighted average shares
outstanding............ 15,580 16,250 31,830
======== ====== =======
</TABLE>
- - --------
(4) Adjustment to interest expense to give effect to Exchange at the beginning
of period presented; reduction of interest expense on Debentures of $1,125.
Pursuant to Financial Accounting Standards Board Statement No. 15 the
Company has included the expected interest payment obligations on the
unsecured promissory notes on the balance sheet and, accordingly, no
provision is included in the statement of operations. See Note (1) to
Unaudited Pro Forma Condensed Consolidated Balance Sheet.
(5) The above pro forma consolidated statement of operations does not include
an extraordinary gain of $11,662 which would be recorded in the Company's
consolidated financial statements in the period in which the Exchange Offer
is consummated.
(6) Adjustments to illustrate the effect on revenues, cost of sales and
operating expenses by the disk drive business which was sold as of March
29, 1996 and the OEM Supply Agreement between the Company and Micropolis
(S) Pte Ltd entered into on March 29, 1996. (See Note 10 to the historical
consolidated financial statements of StreamLogic Corporation for the three
months ended March 29, 1996, which are incorporated herein.)
6
<PAGE>
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 29, 1995
-----------------------------------------------------------
SALE OF
DISK OEM SUPPLY STREAMLOGIC
STREAMLOGIC DRIVE AGREEMENT EXCHANGE CORPORATION
CORPORATION ASSETS(9) ADJUSTMENTS(9) OFFER(7) PRO FORMA(8)
----------- --------- -------------- -------- ------------
<S> <C> <C> <C> <C> <C>
Net sales............... $211,264 $(171,921) $ -- $ -- $ 39,343
Cost of sales........... 205,628 (176,336) 2,372 -- 31,664
-------- --------- ------- ------ --------
Gross profit (loss)..... 5,636 4,415 (2,372) -- 7,679
Operating expenses:
Research and develop-
ment................. 42,469 (28,826) -- -- 13,643
Selling, general and
administrative....... 44,274 (30,614) -- -- 13,660
-------- --------- ------- ------ --------
Total operating ex-
penses............... 86,743 (59,440) -- -- 27,303
-------- --------- ------- ------ --------
Loss from operations.... (81,107) 63,855 (2,372) -- (19,624)
Interest income (ex-
pense), net............ (4,242) -- -- 4,500 258
-------- --------- ------- ------ --------
Loss before income tax-
es..................... (85,349) 63,855 (2,372) 4,500 (19,366)
Income tax benefit...... (1,061) -- -- -- (1,061)
-------- --------- ------- ------ --------
Net loss................ $(84,288) $ 63,855 $(2,372) $4,500 $(18,305)
======== ========= ======= ====== ========
Net loss per share...... $ (5.46) $ (.58)
======== ========
Weighted average shares
outstanding............ 15,445 16,250 31,695
======== ====== ========
</TABLE>
- - --------
(7) Adjustment to interest expense to give effect to Exchange at the beginning
of period presented; reduction of interest expense on Debentures of $4,500.
Pursuant to Financial Accounting Standards Board Statement No. 15 the
Company has included the expected interest payment obligations on the
unsecured promissory notes on the balance sheet and, accordingly, no
provision is included in the statement of operations. See Note (1) to
Unaudited Pro Forma Condensed Consolidated Balance Sheet.
(8) The above pro forma consolidated statement of operations does not include
an extraordinary gain of $11,662 which would be recorded in the Company's
consolidated financial statements in the period in which the Exchange Offer
is consummated.
(9) Adjustments to illustrate the effect on revenues, cost of sales and
operating expenses by the disk drive business which was sold as of March
29, 1996 and the OEM Supply Agreement between the Company and Micropolis
(S) Pte Ltd entered into on March 29, 1996. (See Note 10 to the historical
consolidated financial statements of StreamLogic Corporation for the three
months ended March 29, 1996, which are incorporated herein.)
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS--RECENT DEVELOPMENTS
This section of the Offer to Exchange has been amended by adding the
following sentence to the end of the first paragraph of such section on page
44:
The Company currently estimates that its cash position as of October 31,
1996, after giving effect on a pro forma basis to the consummation of the
Exchange Offer (assuming 95% of the 6% Debentures are exchanged) and the
completion of the transaction with FNB as amended, would have been
approximately $9 million.
BACKGROUND OF THE EXCHANGE OFFER--GENERAL
This section of the Offer to Exchange has been amended by adding the
following paragraph after the third paragraph on page 45:
The Company has been advised by Loomis Sayles that it has no economic
interests in any 6% Debentures, but that it and its affiliates have sole
discretionary investment power with respect to the approximately $58
million principal amount of 6% Debentures held by the approximately 41
investors it advises. Such power constitutes "beneficial ownership" of such
6% Debentures within the meaning of such term in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended.
BACKGROUND OF THE EXCHANGE OFFER--THE TENDER AGREEMENT
This section of the Offer to Exchange has been amended by amending the last
sentence of the second paragraph on page 46, which sentence as amended and
restated in its entirety reads as follows:
At the request of Loomis Sayles and as a condition by Loomis Sayles for
its going forward with the negotiation of an agreement with respect to the
6% Debentures, the Company agreed to pay Chanin's fees and the fees of
Loomis Sayles' legal counsel in connection with such negotiation.
This section of the Offer to Exchange has been further amended by adding the
following disclosure after the last paragraph of such section on page 48:
Summary of Financial Projections Provided to Chanin
Certain financial projections were provided from time to time to Chanin
by the Company, most recently on or about September 23, 1996. Such most
recent projections indicated actual results as of the June 1996 quarter in
comparative form with the estimated actual results for the September 1996
quarter and plan results for the December 1996 and March 1997 quarters.
Quarterly results as presented for the September 1996, December 1996 and
March 1997 quarters, respectively, were revenues of $13.9 million, $17.5
million and $22.5 million, net loss before extraordinary item of $7.0
million, $3.2 million and $600,000, and cash of $21.9 million,
$15.0 million and $15.8 million. The cash balances assumed among other
things consummation of the Offer to Exchange with 100% participation by
debenture holders, and exercise of the warrants held by Lindner to purchase
1.5 million shares of Common Stock during the December 1996 quarter.
The foregoing projected financial information of the Company (the
"Projections") was provided by the management of the Company to Chanin for
its use in advising Loomis Sayles and is included herein solely to afford
the recipients of this Offer to Exchange access to information that was
supplied to Chanin, in satisfaction of regulatory requirements. The
Projections have not been updated since that time to reflect subsequent
events. Important assumptions underlying the Projections have been rendered
invalid by such subsequent events, and therefore the Projections are not
consistent with management's current expectations for the performance of
the Company. In particular, and as an example, subsequent to the
preparation of the Projections the Company decided to consolidate its
operations in Northern California and to close its operations in Southern
California, which decision will have a material effect on the Company's
future
8
<PAGE>
financial performance. Furthermore, in addition to the fact that the
assumptions underlying the Projections have been rendered invalid by
subsequent events and are not consistent with management's current
expectations, the Projections were and remain qualified by, and were and
remain subject to, the other information contained in this Offering
Memorandum, including the factors set forth under the heading "Certain
Considerations Related to the Company." The Company did not engage an
independent expert to compile or examine these Projections and such
Projections were not prepared in compliance with the published rules and
guidelines of the Commission and the American Institute of Certified Public
Accountants regarding projections. Moreover, Ernst & Young LLP, the
Company's independent certified public accountants, did not compile or
examine the Projections and accordingly does not express an opinion nor any
other form of assurance with respect thereto.
THE INCLUSION OF THE PROJECTIONS HEREIN IS SOLELY TO AFFORD THE
RECIPIENTS OF THIS OFFER TO EXCHANGE ACCESS TO INFORMATION THAT WAS
PROVIDED TO CHANIN AND SHOULD NOT BE REGARDED AS A REPRESENTATION BY THE
COMPANY. DUE TO EVENTS SUBSEQUENT TO THE PREPARATION OF THE PROJECTIONS,
THE RESULTS REFLECTED IN THE PROJECTIONS ARE NOT CONSISTENT WITH
MANAGEMENT'S CURRENT EXPECTATIONS FOR THE PERFORMANCE OF THE COMPANY AND
LIKELY WILL NOT BE REALIZED. THE PROJECTIONS AND ACTUAL RESULTS WILL VARY,
AND THOSE VARIATIONS WILL LIKELY BE MATERIAL. THE COMPANY HAS NOT UPDATED
OR OTHERWISE REVISED THE PROJECTIONS SINCE THEY WERE PROVIDED TO CHANIN,
AND DOES NOT INTEND TO UPDATE OR OTHERWISE REVISE THE PROJECTIONS TO
REFLECT THE OCCURRENCE OF FUTURE EVENTS, EVEN THOUGH THE ASSUMPTIONS AND
ESTIMATES UNDERLYING THE PROJECTIONS ARE NO LONGER VALID DUE TO SUBSEQUENT
EVENTS. IN PARTICULAR, THE COMPANY DOES NOT INTEND TO INCLUDE PROJECTIONS
IN ANY REGISTRATION STATEMENT UNDER THE SECURITIES ACT WITH RESPECT TO ANY
SECURITIES OF THE COMPANY.
IN LIGHT OF THE FOREGOING, RECIPIENTS OF THIS OFFER TO EXCHANGE ARE
CAUTIONED NOT TO RELY ON THE PROJECTIONS.
THE EXCHANGE OFFER--CONDITIONS
This section of the Offer to Exchange has been amended by amending the
phrase "in the sole judgment of the Board of Directors of the Company" to "in
the reasonable judgment of the Board of Directors of the Company" in clause
(ii) of the first paragraph of such section on page 50 and in each place such
phrase appears in clauses (1) through (6) of the second paragraph of such
section on page 50.
This section of the Offer to Exchange has been further amended by amending
the phrase "acceptance for exchange of any 6% Debentures" to "the Expiration
Date" in the fifth line of the second paragraph of such section on page 50.
THE EXCHANGE OFFER--FEES AND EXPENSES
This section of the Offer to Exchange has been amended by modifying the
first sentence of the third paragraph of such section on page 56 to read in
its entirety as follows:
The Company estimates that expenses of making the Exchange Offer,
including the fees and expenses of the Exchange Agent (approximately
$7,500), Warrant Agent (approximately $7,500), Loomis Sayles' Financial
Advisor Fees (approximately $500,000), printing costs (approximately
$100,000), filing fees (approximately $10,000), legal fees (approximately
$300,000), and accounting fees (approximately $20,000), will total
approximately $950,000.
9
<PAGE>
DESCRIPTION OF 6% DEBENTURES
This section of the Offer to Exchange has been amended by adding the
following paragraph after the last paragraph on page 60 of the Offer to
Exchange:
Accrued Interest to the Expiration Date. Accrued and unpaid interest will
not be paid with respect to 6% Debentures tendered in the Offer. As of
November 20, 1996, there will be $41.33 of accrued and unpaid interest for
each $1,000 face amount of 6% Debentures, or an aggregate of $3,100,000
with respect to all of the outstanding 6% Debentures. If the Expiration
Date is extended beyond November 20, 1996, interest will accrue at a rate
of $0.17 per day for each $1,000 face amount of 6% Debentures, or an
aggregate of $12,500 per day with respect to all of the outstanding 6%
Debentures.
DESCRIPTION OF PROMISSORY NOTES
This section of the Offer to Exchange has been amended by adding the
following sentence at the end of the paragraph titled "Ranking" on page 62:
As of September 27, 1996, the Company had outstanding $3.2 million
principal amount of secured indebtedness that would otherwise be pari passu
to the Promissory Notes, which are unsecured, and no unsecured indebtedness
that would rank pari passu with the Promissory Notes or indebtedness that
would rank senior to the Promissory Notes.
APPENDIX B--FORM OF INDENTURE
Section 3.01 of Appendix B on page B-5 has been amended by changing the
phrase "on overdue principal at the rate equal to 2% per annum" to "on overdue
principal and interest at the rate equal to 2% per annum" in the second line of
the second paragraph of such section.
Exhibit A of Appendix B on page B-A-2 has been amended by changing the phrase
"360-day year" to "365-day year" in the fourth line of the first paragraph on
such page.
10
<PAGE>
LETTERS OF TRANSMITTAL
The Company has not printed or distributed new Letters of Transmittal or
other ancillary documents in connection with this Supplement. Holders of 6%
Debentures should use the originally distributed Letters of Transmittal and
ancillary documents, as appropriate. If needed, additional copies of such
documents can be obtained as described below under "Additional Copies."
Facsimile copies of the Letters of Transmittal will be accepted. The Letters
of Transmittal, 6% Debentures and any other required documents should be sent
or delivered by each 6% Debenture holder or his broker, dealer, commercial
bank, trust company or other nominee to the Exchange Agent at one of its
addresses set forth below:
The Exchange Agent:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C>
By Mail: By Hand Delivery or
Midtown Station Overnight Delivery:
P.O. Box 798 120 Broadway, 13th Fl.
New York, NY 10018 New York, NY 10271
Attention: Reorganization Attention: Reorganization
Dept. Dept.
</TABLE>
By Facsimile Transmission:
(201) 329-8936
For Confirmation of Facsimile Transmission
(201) 296-4983
ADDITIONAL COPIES
You may contact the Company, your broker, dealer, commercial bank or trust
company for assistance concerning the Exchange Offer. Requests for additional
copies of this Offer to Exchange and Letter of Transmittal should be directed
to the Company at the address and phone number as set forth below.
STREAMLOGIC CORPORATION
21329 Nordhoff Street
Chatsworth, California 91311
Attn: Chief Financial Officer
PH: 818-701-8595
FAX: 818-701-8410
11
<PAGE>
STREAMLOGIC CORPORATION
SUPPLEMENTAL INFORMATION
OFFER TO EXCHANGE EACH $1,000 PRINCIPAL AMOUNT OF 6% CONVERTIBLE
SUBORDINATED DEBENTURES DUE 2012 FOR (I) $120.00 IN CASH, (II) $113.33
PRINCIPAL AMOUNT OF STREAMLOGIC CORPORATION'S INCREASING RATE UNSECURED
PROMISSORY NOTES DUE 1998, (III) 216.66667 SHARES OF STREAMLOGIC
CORPORATION'S COMMON STOCK, $1.00 PAR VALUE AND (IV) FIVE-YEAR
WARRANTS TO PURCHASE 40 SHARES OF COMMON STOCK.
CUSIP NO. 863238-AA-9
THE OFFER HAS BEEN EXTENDED TO 12:00 MIDNIGHT, NEW YORK CITY TIME,ON
NOVEMBER 20, 1996, UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS OF 6%
CONVERTIBLE SUBORDINATED DEBENTURES DUE 2012 MAY BE WITHDRAWN AT ANY TIME
PRIOR TO THE EXPIRATION DATE.
November 6, 1996
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We are enclosing herewith a supplement (the "Supplement") to StreamLogic
Corporation's (the "Company") Offer to Exchange dated October 7, 1996 (the
"Offer to Exchange"), together with a copy of the Offer to Exchange. The Offer
to Exchange and Supplement relate to the offer (the "Offer") by the "Company"
to exchange each $1,000 principal amount of the Company's 6% Convertible
Subordinated Debentures due 2012 (the "6% Debentures") for (i) $120.00 in
cash, (ii) $113.33 principal amount of StreamLogic Corporation's increasing
rate unsecured promissory notes due 1998, (iii) 216.66667 shares of
StreamLogic Corporation's Common Stock, $1.00 par value and (iv) five-year
Warrants to purchase 40 shares of Common Stock (collectively, the "Tender
Offer Consideration"). Consummation of the Offer is subject to, among other
things, satisfaction of the conditions set forth in the Offer to Exchange
referred to below under the heading "The Exchange Offer--Conditions."
We are asking you to again contact your clients for whom you hold 6%
Debentures registered in your name or in the name of your nominee. In
addition, we are asking you to again contact your clients who, to your
knowledge, hold 6% Debentures registered in their own name.
Previously sent to you for your information and use were copies of the
following documents:
1. The Offer to Exchange dated October 7, 1996;
2. A BLUE Letter of Transmittal for your use in connection with the tender
of 6% Debentures and for the information of your clients;
3. A YELLOW form of letter that may be sent to your clients for whose
accounts you hold 6% Debentures registered in your name or the name of your
nominee, with space provided for obtaining the clients' instructions with
regard to the Offer;
<PAGE>
4. A GREEN form of Notice of Guaranteed Delivery;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. A return envelope addressed to the Exchange Agent.
WE URGE YOU TO PROVIDE THE SUPPLEMENT AND THE ADDITIONAL OFFER TO EXCHANGE
TO YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THIS OFFER WILL NOW
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON NOVEMBER 20, 1996 UNLESS
FURTHER EXTENDED (THE "EXPIRATION DATE"). 6% DEBENTURES TENDERED PURSUANT TO
THE OFFER MAY BE WITHDRAWN, SUBJECT TO THE PROCEDURES DESCRIBED IN THE OFFER
TO EXCHANGE, AT ANY TIME PRIOR TO THE EXPIRATION DATE.
In all cases, the Tender Offer Consideration will be issued for 6%
Debentures accepted for exchange pursuant to the Offer only after timely
receipt by the Exchange Agent of such 6% Debentures (or confirmation of book-
entry transfer of such 6% Debentures into the Exchange Agent's account at one
of the Book-Entry Transfer Facilities (as defined in the Offer to Exchange)),
a Letter of Transmittal (or facsimile thereof), properly completed and validly
executed, and any other required documents.
If holders of 6% Debentures wish to tender, but it is impracticable for them
to forward their 6% Debentures or other required documents prior to the
Expiration Date, a tender may be effected by following the guaranteed delivery
procedures described in the Offer to Exchange under the heading "The Exchange
Offer--Procedures for Tendering--Guaranteed Delivery."
Procedures for tendering 6% Debentures are set forth in the Offer to
Exchange under the caption "The Exchange Offer--Procedures for Tendering."
Holders of 6% Debentures who wish to tender their 6% Debentures must use
either the Letter of Transmittal distributed with the Offer to Exchange (the
"Letter of Transmittal") or a facsimile thereof. In addition, holders of 6%
Debentures who are following the procedures for guaranteed delivery set forth
in the Offer to Exchange must use the Notice of Guaranteed Delivery
distributed with the Offer to Exchange.
The Company will not pay any fees or commissions to any broker, dealer or
other person in connection with the solicitation of tenders of 6% Debentures
pursuant to the Offer to Exchange. However, the Company will reimburse you for
customary mailing and handling expenses incurred by you in forwarding any of
the enclosed materials to your clients. The Company will pay or cause to be
paid any transfer taxes payable with respect to the transfer of 6% Debentures
to it, except as otherwise provided in the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to,
and additional copies of the enclosed materials or the materials previously
sent to you may be obtained from, the Company at its address and telephone
number set forth on the back cover page of the Offer to Exchange.
Very truly yours,
StreamLogic Corporation
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE COMPANY, THE EXCHANGE AGENT, OR ANY
AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY
DOCUMENT OR TO MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH
THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED
THEREIN.
