As filed with the Securities and Exchange Commission on May 14, 1998
Registration No. 333-48023
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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PRE-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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Sigma Designs, Inc.
(Exact name of Registrant as specified in its charter)
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CALIFORNIA 7372 94-2848099
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Classification Identification Number)
organization) Code Number)
46501 LANDING PARKWAY
FREMONT, CALIFORNIA 94538
(510) 770-0100
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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THINH Q. TRAN
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
SIGMA DESIGNS, INC.
46501 LANDING PARKWAY
FREMONT, CALIFORNIA 94538
(510) 770-0100
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
DAVID A. SEGRE, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304-1050
(650) 493-9300
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If the only securities being delivered pursuant to this Form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
PROSPECTUS
800,000 SHARES
SIGMA DESIGNS, INC.
COMMON STOCK
This Prospectus may be used only in connection with the resale, from
time to time, of up to 800,000 shares (the "Shares") of Common Stock, no par
value per share (the "Common Stock"), of Sigma Designs, Inc. ("Sigma" or the
"Company"), by the selling shareholder identified below (the "Selling
Shareholder"). All of the Shares covered hereby are to be sold by the Selling
Shareholder who purchased shares of Series A Convertible Preferred Stock
convertible into shares of Common Stock and a warrant to purchase shares of
Common Stock from a purchaser who originally purchased shares of Series A
Convertible Preferred Stock and a warrant to purchase Common Stock in a private
placement transaction. See "Selling Shareholder." The Company will not receive
any of the proceeds from the sale of the Shares by the Selling Shareholder. The
expenses incurred in registering the Shares, including legal and accounting
fees, will be paid by the Company.
All or a portion of the Shares offered hereby may, without limitation
and from time to time, be sold by the Selling Shareholder on the Nasdaq National
Market, in privately negotiated transactions, or otherwise pursuant to block
trades, broker-dealer transactions, exchange transactions, short sales, or other
methods. Sales may be made at market prices or negotiated prices. See "Plan of
Distribution."
The Company's Common Stock is traded on the Nasdaq National Market
under the symbol "SIGM." On May 13, 1998, the last sale price for the Common
Stock as reported on the Nasdaq National Market was $4.31 per share.
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SEE "RISK FACTORS" ON PAGE 3 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OFFERED HEREBY.
---------------------------
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.
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THE DATE OF THIS PROSPECTUS IS MAY 14, 1998
<PAGE>
AVAILABLE INFORMATION
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 statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
and information statements and other information may be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of
the Commission: New York Regional Office, Seven World Trade Center, New York,
New York 10048, and Chicago Regional Office, 500 West Madison Street, Chicago,
Illinois 60661. Copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549 upon payment of the prescribed fees. The Common Stock of the Company is
quoted on the Nasdaq National Market. Reports, proxy and information statements
and other information concerning the Company may be inspected at the National
Association of Securities Dealers, Inc. at 1735 K Street, N.W., Washington, D.C.
20006. The Commission maintains a World Wide Web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission. The address of the site is
http://www.sec.gov.
This Prospectus constitutes a part of a Registration Statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"). 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 covered by this prospectus, reference is made to the Registration
Statement. Statements contained herein concerning the provisions of any document
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
hereby incorporated by reference in this Prospectus: (i) the Company's Annual
Report on Form 10-K for the fiscal year ended January 31, 1998; (ii) the
Company's Proxy Statement relating to the Company's Annual Meeting of
Shareholders to be held on June 12, 1998, and (iii) the description of the
Company's Common Stock contained in its Registration Statement on Form 8-A filed
with the Commission on November 3, 1986, as amended on September 22, 1989.
All reports and other documents subsequently filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of this Prospectus and prior to the termination of this offering shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
filing of such reports and documents. Any statement incorporated 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 other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of the Registration Statement or this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, upon written or oral request of such person, a copy of any or all of
the foregoing documents incorporated herein by reference (other than exhibits to
such documents, unless such exhibits are specifically incorporated by reference
into such documents). Requests for such documents should be submitted in writing
to Carol Kaplan at the Company's principal executive offices at 46501 Landing
Parkway, Fremont, California 94538, or by telephone at (510) 770-0100.
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RISK FACTORS
In the interest of providing the Company's shareholders and potential investors
with certain Company information, including management's assessment of the
Company's future potential, certain statements set forth herein or incorporated
by reference herein relate to management's future plans and objectives or to the
Company's future economic performance. Such statements are "forward-looking
statements" within the meaning of Section 27 A of the Securities Act of 1933, as
amended, and in Section 21E of the Securities Act of 1934, as amended. Although
any forward-looking statements contained herein or incorporated by reference
herein or otherwise expressed by or on behalf of the Company are, to the
knowledge and in the judgment of the officers and directors of the Company,
expected to prove true and to come to pass, the Company is not able to predict
such events with absolute certainty. Accordingly, shareholders and potential
investors are hereby cautioned that certain events or circumstances could cause
actual results to differ materially from those projected or predicted. In
addition, forward-looking statements are based on the Company's knowledge and
judgment as of the date hereof, and the Company does not intend to update any
forward-looking statements to reflect events occurring or circumstances existing
hereafter. In particular, the Company believes the following facts could affect
forward-looking statements made herein or in future written or oral releases
and, by hindsight, prove such statements to be overly optimistic and
unachievable.
History of Operating Losses
The Company incurred significant losses in fiscal 1995, 1996, and 1998
and had substantial negative cash flow in fiscal 1995, 1996, 1997 and 1998.
Since the introduction of the Company's REALmagic Moving Picture Experts Group
("MPEG") product line in November 1993, the Company has invested heavily in
marketing and technological innovation for its REALmagic products. As a result,
the Company experienced significant losses through fiscal 1996. Fiscal 1995,
1996, and 1998 also included significant losses associated with products other
than those related to the REALmagic technology. As of January 31, 1998 the
Company's total accumulated deficit is $38,761,000. There can be no assurance
that the Company will continue to sell its new REALmagic products in substantial
quantities or generate significant revenues from such sales. There can be no
assurance that the Company will achieve return to profitable operations in any
future fiscal quarter or fiscal year or that profitable operations, if achieved,
will be sustainable. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
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Marketing Risks
The Company's ability to increase its sales, achieve profitability, and
maintain REALmagic as a PC industry multimedia standard depends substantially on
the Company's ability to achieve a sustained high level of sales to new OEM
customers. The Company has not executed volume purchase agreements with any of
the Company's customers, and these customers are not under any obligation to
purchase any minimum quantity of the Company's products. The Company has not
achieved bundling agreements with numerous OEM customers to ensure success of
the REALmagic product line. Moreover, even if the Company achieves new design
wins, there can be no assurance that personal computer ("PC") manufacturers will
purchase the Company's products in substantial volumes. Sales to any particular
OEM customer are subject to significant variability from quarter to quarter and
to severe price pressures by competitors. Based on its experience in the
personal computer industry, the Company expects that its actual sales to OEM
customers will experience significant fluctuations, and estimates of future
sales with respect to any particular customer or groups of customers are
inherently uncertain.
The Company's ability to achieve sustained profitability also depends on a
substantial increase in sales of REALmagic products through domestic and
international distributors for resale through corporate markets. Sales to such
distributors are typically subject to contractual rights of inventory rotation
or price protection. Regardless of particular contractual rights, however, the
failure of distributors to achieve sustained sell-through of REALmagic products
could result in product returns or collection problems, contributing to
fluctuations in the Company's results of operations. There can be no assurance
that the Company will be successful in maintaining a significant market for its
REALmagic products.
Technological Change
The market for multimedia PC products is characterized by rapidly
changing technology and user preferences, evolving formats for compression of
video and audio data, and frequent new product introductions. Even though
REALmagic products and related software titles have gained initial market
acceptance, the Company's success will depend, among other things, on the
Company's ability to achieve and maintain technological leadership and to remain
competitive in terms of price and product performance.
To have technological leadership, the Company must continue to make
technological advancements and research and development investments in the area
of MPEG video and audio decoding. These advancements include compatibility with
emerging standards and multiple platforms, improvements to the REALmagic
architecture, enhancements to the REALmagic API, and the achievement of these
enhancements. There can be no assurance that the Company will be able to make
any such advancements to its REALmagic technology or that, if such advances are
made, the Company will be able to achieve and maintain technological leadership.
Any material failure of the Company or OEMs and software developers to develop
or incorporate any required improvement could adversely affect the continued
acceptance of the Company's technology and the introduction and sale of future
products based on the Company's technology. There can be no assurance that
products or technologies developed by others will not render obsolete the
Company's technology and the products based on the Company's technology.
To be competitive, the Company must anticipate the needs of the market and
successfully develop and introduce innovative new products in a timely fashion.
No assurance can be given that the Company will be able to successfully complete
the design of its new products, have these products manufactured at acceptable
manufacturing yields, or obtain significant purchase orders for these products.
The introduction of new products may adversely affect sales of existing
products, contributing to fluctuations in operating results from quarter to
quarter. The introduction of new products also requires the Company to carefully
manage its inventory to avoid inventory obsolescence. In addition, new products
typically have higher initial component costs than more mature products,
possibly resulting in downward pressures on the Company's gross margins.
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Competition
The market for multimedia PC products is highly competitive, driven by
faster processors provided by Intel Corporation and other companies. The
possibility that other companies with more experience and financial resources
may develop a competitive product may inhibit future growth of REALmagic
technology. Increased competition may be generated from several major computer
product manufacturers that have developed products and technologies that could
compete directly with REALmagic products on the PC platform. These include SGS
Thompson Microelectronics, C-Cube Microsystems, IBM Corporation, Chromatic
Research, Inc., Zoran Corporation, and LSI Logic. In addition, Intel processors
are becoming more powerful, so that video decoding may eventually be done in
software. Most of the above companies have substantial experience and expertise
in audio, video, and multimedia technology and in producing and selling consumer
products through retail distribution, as well as substantially greater
engineering, marketing, and financial resources than the Company. Competitors of
the Company may form cooperative relationships, which could present formidable
competition to the Company. There can be no assurance that REALmagic technology
will achieve commercial success or that it will compete effectively against
other interactive multimedia products, services, and technologies that currently
exist, are under development, or may be announced by competitors.
Reliance on a Single Line of Products
The Company's business strategy has been to focus on REALmagic products
by investing heavily in PC-based MPEG technology. In the fiscal year ended
January 31, 1998, sales of multimedia products accounted for virtually all of
net sales. A decline in market demand for multimedia products would materially
adversely affect the Company's operating results. The Company's present reliance
on REALmagic products is exacerbated by the fact that multimedia product sales
are concentrated in the personal computer industry. A decline in demand for PCs
could have a material adverse effect on the Company's operating results and
financial condition.
Variability of Operating Results
The Company's operating results have fluctuated in the past and may
continue to fluctuate in the future due to a number of factors, including but
not limited to new product introductions by the Company and its competitors;
market acceptance of the Company's products by OEMs, software developers, and
end users; the success of the Company's promotional programs; gains or losses of
significant customers; reductions in selling prices; inventory obsolescence; an
interrupted or inadequate supply of semiconductor chips; the Company's ability
to protect its intellectual property; and loss of key personnel. In addition,
sales to OEM customers are subject to significant variability from quarter to
quarter, depending on OEMs' timing and release of products incorporating
REALmagic technology, experience with sell-through of such products, and
inventory levels.
The market for consumer electronics products is characterized by significant
seasonal swings in demand, which typically peak in the fourth calendar quarter
of each year. Since the Company expects to derive a substantial portion of its
revenues from the sales of REALmagic products in the future and the demand for
such products will depend in part on the emergence of digital video technology,
the Company's revenues may vary with the availability of and demand for DVD
titles. Such demand may increase or decrease as a result of a number of factors
that cannot be predicted, such as consumer preferences and product announcements
by competitors. Announcements of directly competing products will likely have a
negative effect on operating results. Based on the Company's experience, the
Company believes that a substantial portion of its shipments will occur in the
third month of a quarter, with significant shipments completed in the latter
part of the third month. This shipment pattern may cause the Company's operating
results to be difficult to predict. The Company currently places noncancellable
orders to purchase semiconductor products from its foundries on a long lead time
basis. Consequently, if, as a result of inaccurate forecasts or cancelled
purchase orders, anticipated sales and shipments in any quarter do not occur
when expected, inventory levels could be disproportionately high, requiring
significant working capital, negatively affecting operating results.
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<PAGE>
Manufacturing Risks
REALmagic products and components are presently manufactured by outside
suppliers or foundries. The Company does not have long-term contracts with such
suppliers and conducts business with its suppliers on a written purchase order
basis. The Company's reliance on independent suppliers involves several risks,
including the absence of adequate capacity, the unavailability of, or
interruptions in access to, certain process technologies, and reduced control
over delivery schedules, manufacturing yields, and costs. The Company obtains
certain of its components from a single source. Although delays or interruptions
have not occurred to date, any delay or interruption in the supply of any of the
components required for the production of the REALmagic multimedia card
currently obtained from a single source could have a material adverse impact on
sales of REALmagic products by the Company and, thus, on the Company's business.
The Company must provide its suppliers with sufficient lead time to meet
forecasted manufacturing objectives. Any failure to properly forecast such
quantities could materially adversely affect the Company's ability to produce
REALmagic products in sufficient quantities. No assurance can be given that the
Company's forecasts regarding new product demand will be accurate, particularly
since the Company sells REALmagic products on a purchase order basis.
Manufacturing the REALmagic chipsets is a complex process, and the Company may
experience short-term difficulties in obtaining timely deliveries, which could
affect the Company's ability to meet customer demand for its products. Any such
delay in delivering products in the future could materially and adversely affect
the Company's operating results. In addition, should any of the Company's major
suppliers be unable or unwilling to continue to manufacture the Company's key
components in required volumes, the Company would have to identify and qualify
acceptable additional suppliers. This qualification process could take up to
three months or longer. No assurances can be given that any additional sources
of supply could be in a position to satisfy the Company's requirements on a
timely basis.
In the past, the Company has experienced production delays and other
difficulties, and the Company could experience similar problems in the future.
In addition, there can be no assurance that a product defect will not escape
identification at the factory, possibly resulting in unanticipated costs,
cancellations, or deferrals of purchase orders or costly recall of products from
customer sites.
Dependence on Key Personnel
The Company's future success depends in large part on the continued
service of its key technical, marketing, sales, and management personnel. Given
the complexity of REALmagic technology, the Company is dependent on its ability
to retain and motivate highly skilled engineers involved in the ongoing hardware
and software development of REALmagic products who will be required to refine
the existing hardware system and API and to introduce enhancements in future
applications. The multimedia PC industry is characterized by a high level of
employee mobility and aggressive recruiting of skilled personnel. There can be
no assurance that the Company's current employees will continue to work for the
Company or that the Company will be able to obtain the services of additional
personnel necessary for the Company's growth. The Company does not have "key
person" life insurance policies on any of its employees.
Limited Intellectual Property Protection
The Company's ability to compete may be affected by its ability to
protect its proprietary information. The Company currently holds six patents
covering the technology underlying the REALmagic products, and the Company has
filed certain patent applications and is in the process of preparing others.
There can be no assurance that any additional patents for which the Company has
applied will be issued or that any issued patents will provide meaningful
protection of its product innovations. The Company, like other emerging
multimedia companies, relies primarily on trade secrets and technological
know-how in the conduct of its business. In addition, the Company is relying in
part on copyright law to protect its proprietary rights with respect to
REALmagic technology. Although the Company uses measures such as confidentiality
agreements to protect its intellectual property, there can be no assurance that
these methods will be sufficient.
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<PAGE>
The electronics industry is characterized by frequent litigation regarding
patent and intellectual property rights. Any such litigation could result in
significant expense to the Company and divert the efforts of the Company's
technical and management personnel, whether or not the outcome of such
litigation is favorable to the Company. Moreover, in the event of an adverse
result in any such litigation, the Company could be required to expend
significant resources to develop noninfringing technology or to obtain licenses
to the technology that is the subject of the litigation. There can be no
assurance that the Company would be successful in such development or that any
such licenses would be available on acceptable terms, if at all. In addition,
patent disputes in the electronics industry have often been settled through
cross-licensing arrangements. Because the Company does not yet have a large
portfolio of issued patents, the Company may not be able to settle an alleged
patent infringement claim through a cross-licensing arrangement.
International Operations
During the fiscal years ended January 31, 1998, 1997. and 1996, sales
to international customers accounted for approximately 64%, 72%, and 63%, of the
Company's net sales, respectively. The Company anticipates that sales to
international customers, including sales of REALmagic products, will continue to
account for a substantial percentage of net sales. In addition, some of the
foundries that manufacture the Company's products and components are located in
Asia. Overseas sales and purchases to date have been denominated in U.S.
dollars. Due to the concentration of international sales and the manufacturing
capacity in Asia, the Company is subject to the risks of conducting business
internationally. These risks include unexpected changes in regulatory
requirements and fluctuations in the U.S. dollar that could increase the sales
price in local currencies of the Company's products in international markets or
make it difficult for the Company to obtain price reductions from its foundries.
The Company does not currently engage in any hedging activities to mitigate
exchange rate risks. To the extent that the Company engages in transactions in
foreign currencies, the Company's results of operations could be adversely
affected by exchange rate fluctuations.
The Company derives a substantial portion of its revenues from sales to the Asia
Pacific region, a region of the world subject to increased levels of economic
instability. There can be no assurance that such instability will not have a
material adverse effect on the Company's results of operations.
Volatility of Stock Price
The market of the Company's Common Stock has been subject to
significant volatility, which is expected to continue. Factors such as
announcements of the introduction of new products by the Company or its
competitors and market conditions in the technology, entertainment, and emerging
growth company sectors may have a significant impact on the market price of the
Company's Common Stock. Further, the stock market has experienced volatility
that has particularly affected the market prices of equity securities of many
high technology and development stage companies such as those in the electronics
industry. Such volatility has often been unrelated or disproportionate to the
operating performance of such companies. These fluctuations, as well as general
economic and market conditions, may adversely affect the price of the Common
Stock.
Potential for Dilution
Series B Preferred Stock. As of April 15, 1998, 5,000 shares of the
Company's Series B Convertible Preferred Stock (the "Series B Preferred Stock")
were issued and outstanding. Each share of the Series B Preferred Stock is
convertible into such number of shares of Common Stock as is determined by
dividing the stated value ($1,000) of the share of Series B Preferred Stock
(under certain circumstances, such value may be increased by a premium based on
the number of days the Series B Preferred Stock is held) by the then current
Conversion Price (which is determined by reference to the then current market
price). If converted on April 15, 1998, the Series B Preferred Stock would have
been convertible into
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<PAGE>
approximately 1,311,303 shares of Common Stock, but this number of shares could
prove to be significantly greater in the event of a decrease in the trading
price of the Common Stock. Purchasers of Common Stock could therefore experience
substantial dilution of their investment upon conversion of the Series B
Preferred Stock. The shares of Series B Stock are not registered and may be sold
only if registered under the Securities Act or sold in accordance with an
applicable exemption from registration, such as Rule 144.
As of April 15, 1998, "Warrants" to purchase 50,000 shares of Common Stock
issued to the purchasers of the Series B Preferred Stock and exercisable
beginning on May 1, 1998 for a period of three years at a price based on a
premium to the market price as of April 30, 1998 (as may be adjusted from time
to time under certain antidilution provisions) were outstanding.
As of March 9, 1998, 5,754,398 shares of Common Stock were reserved for issuance
upon exercise of the Company's outstanding warrants and options (excluding the
Warrants) and an additional 3,400,000 shares of Common Stock were reserved for
issuance upon conversion of the preferred stock and exercise of the Warrants. At
April 15, 1998, there were 11,905,974 shares of Common Stock outstanding. Of
these outstanding shares, 11,884,191 were freely tradable without restriction
under the Securities Act unless held by affiliates.
Series A Preferred Stock. As of April 15, 1998, 20,000 shares of the
Company's Series A Convertible Preferred Stock (the "Series A Preferred Stock")
were issued and outstanding. Each share of the Series A Preferred Stock is
convertible into such number of shares of Common Stock as is determined by
dividing the stated value ($100) of the share of Series A Preferred Stock by the
then current Conversion Price (which is determined by reference to the then
current market price). If converted on April 15, 1998, the Series A Preferred
Stock would have been convertible into approximately 670,758 shares of Common
Stock, but this number of shares could prove to be significantly greater in the
event of a decrease in the trading price of the Common Stock. Purchasers of
Common Stock could therefore also experience substantial dilution of their
investment upon conversion of the Series A Preferred Stock. The shares of Series
A Stock are not registered and may be sold only if registered under the
Securities Act or sold in accordance with an applicable exemption from
registration, such as Rule 144. A portion of the shares of Common Stock into
which the Series A Preferred Stock may be converted have been previously
registered and the remaining portion will be registered pursuant to a
Registration Statement to be filed in the future.
As of April 15, 1998, warrants to purchase 57,142 shares of Common Stock issued
to the purchasers of the Series A Preferred Stock and exercisable beginning on
April 30, 1998 for a period of three years at a price based on a premium to the
market price as of April 30, 1998 (as may be adjusted from time to time under
certain antidilution provisions) were outstanding. The shares of Common Stock
issuable upon exercise of these warrants have been previously registered and the
remaining portion will be registered pursuant to a Registration Statement to be
filed in the future.
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THE COMPANY
Overview
The following business section contains forward-looking statements that involve
risks and uncertainties. The Company's actual results could differ materially
from those anticipated in these forward-looking statements as a result of
certain factors, including those set forth under "Certain Factors Affecting
Business, Operating Results, and Financial Condition" and elsewhere in this
Annual Report on Form 10-K.
Sigma Designs, Inc. ("Sigma" or the "Company") designs, manufactures (using
subcontractors), and markets multimedia products for use with personal
computers. The emergence of multimedia technology in the personal computer (PC)
market has dramatically changed the way in which users interact with computers.
Multimedia integrates different elements, such as sound and video, to enhance
the computing experience and deliver a heightened sense of realism. Through its
REALmagic product line incorporating Moving Picture Experts Group (MPEG)
technology, Sigma Designs has become a leader in this emerging market.
Prior to MPEG's introduction, video on personal computers suffered from serious
drawbacks. Motion pictures appeared jerky, and video was confined to small
window sizes. MPEG, a defined International Standards Organization (ISO)
standard for video compression, eliminated many of those problems and
revolutionized multimedia on the PC platform. For the first time, MPEG users
could play back full-screen, full-motion video combined with stereo audio, even
from a standard CD-ROM. A single CD-ROM using the MPEG compression technique can
store up to 74 minutes of full-motion video and audio.
With MPEG technology, producers can create (and users can enjoy) an interactive,
television-like experience on a desktop PC. The result is a significant new
visual impact, thereby opening possibilities for a wide range of entertainment,
education, training, and business presentation applications. In April 1997, the
Company announced its entry into the Digital Video Disk ("DVD") market. A key
element of the DVD specification is the use of MPEG-2 for digital video
compression, a technology in which Sigma has established expertise. Sigma's
REALmagic Hollywood and Ventura PC-based DVD solutions are extensions of the
Company's MPEG expertise and provide a highly-integrated solution for the PC-DVD
market.
The REALmagic MPEG Standard
Since its first shipment in November 1993, REALmagic technology has received
support from PC industry leaders, software developers, and OEM and retail
customers.
Partnership with PC Industry Leaders
Sigma has developed strategic partnerships to develop and market
network streaming video products with companies such as Hughes Network Systems,
IBM, Microsoft Corporation, Oracle Corporation, Silicon Graphics, Inc.,
Starlight Networks, Sun Microsystems, OptiVision, and First Virtual Corporation.
Support from Software Developers
Support for Sigma's REALmagic MPEG standard has grown to over 1,200
software developers. To further expand the list of developers, Sigma has worked
directly with Microsoft on Microsoft's new streaming standard for MPEG-2 called
DirectShow. Sigma Designs is the first and currently the only company shipping
drivers with DirectShow support for streaming MPEG-2 video, making it the only
recommended decoder for use with Microsoft's NetShow Theater video server.
Using the DirectShow standard, software developers can create streaming video
applications with virtually any video server--without any C programming at all.
This enables universities and corporations to get live video and video on demand
applications online very rapidly, which shortens the sales process.
-9-
<PAGE>
Support from OEMs
In the United States, Dell Computer Corporation, Compaq Computer
Corporation, IBM, Hughes Network Systems, and OptiVision have purchased
REALmagic cards for installation inside their systems for streaming video.
Additionally, Philips, Sony, and several other companies market DVD kits that
include REALmagic Hollywood playback cards, and several vendors base their DVD
systems on REALmagic DVD playback cards.
Acceptance by the Corporate Market
REALmagic is the most well-known and most recognized brand name for
MPEG video on PCs. Sigma Designs has developed this brand name through marketing
campaigns and by building a reputation for delivering and supporting inexpensive
MPEG decoders with robust, powerful, and flexible software drivers. This has
made Sigma Designs' REALmagic the de factor standard for corporate market
projects such as corporate-wide rollouts at Merrill Lynch, Smith Barney, and
Wal-Mart.
REALmagic Business Strategy
Sigma's corporate objective is to continue to be a leading provider of MPEG
multimedia products that enable full-screen, full-motion, TV-like quality video
on the standard desktop and the notebook PC. To accomplish this goal the Company
intends to promote widespread acceptance of REALmagic technology. The key parts
of this strategy include:
Encourage Continued Development of Software Utilizing REALmagic
Technology
The Company continues to encourage widespread software title
development by providing free technical support and licensing its comprehensive
API free of charge to all developers who wish to publish REALmagic-compatible
software titles.
Win More OEM Partnerships and Further Penetrate the Corporate Market
To establish REALmagic for MPEG-2 as a standard, the Company will
continue to seek design wins with major PC manufacturers worldwide, in which the
OEMs will factory-install REALmagic boards or chipsets inside their multimedia
PCs. On the retail side, the Company's systems integration sales team will
continue to work with its network of national distributors and special VARs to
distribute its high-end REALmagic playback card. In Europe and Asia Pacific, the
Company will continue to expand its relationship with distributors as well as
OEMs and VARs. In addition, the Company will seek to sell chipsets to add-on
card manufacturers that will, in turn, market to owners of Pentium PCs.
Introduce New Generations of REALmagic, Offer REALmagic products at
Competitive Prices, and Continually Reduce Product Costs
A significant aspect of the Company's product strategy is to increase
the sale of REALmagic chipsets while continuing to develop newer versions and
generations of REALmagic products, including chipsets for both desktop and
notebook PCs. The Company seeks to continue to offer consumers better-featured
and lower-priced products over time.
REALmagic Products
The Company currently offers a complete family of REALmagic products including:
o REALmagic Hollywood--In April 1997, the Company announced its entry into
the DVD market. The REALmagic Hollywood MPEG-2 playback card turns a PC
into a full-featured DVD player that exploits many of the digital video and
digital surround sound capabilities of the DVD format and
-10-
<PAGE>
upcoming MPEG-2 interactive titles. The REALmagic Hollywood DVD/MPEG-2
playback card displays flicker-free video at full-screen resolution, making
video watching on a PC a new experience. Movies can be simultaneously
displayed on the PC monitor and on a large-screen TV.
o REALmagic NetStream 2--In October 1997, the Company announced its entry
into the MPEG-2 networked video market. Products in the NetStream family
include specialized hardware and software developed specifically for
delivering video to corporate desktops and can be used for both video on
demand and broadcast video playback. NetStream 2 is an MPEG-2 playback card
offering full plug and play installation and compatibility with a broad
range of third-party applications, including video servers for video on
demand, MPEG encoders for stored or real-time playback, satellite delivery
systems, streaming video playback systems, and scores of customizable
interactive training titles.
o REALmagic EM8300--In March 1998, the Company announced the introduction
of the EM8300 REALmagic DVD/MPEG-2/MPEG-1 decoder IC. Integrating virtually
all functions of a DVD decoder on one chip, the EM8300 is designed to
provide a highly integrated, cost effective vehicle for high-quality DVD.
The EM8300 feature set draws on Sigma's industry-leading experience in the
DVD/MPEG-2 market with earlier designs such as the REALmagic Ventura and
REALmagic Hollywood decoder cards. The result is a blend of performance and
affordability that can be key to gaining market share in the rapidly
growing DVD market.
Marketing and Sales
Sigma Designs currently distributes its products through sales to national and
regional distributors, VARs, and OEMs in the U.S. and throughout the world. The
Company's U.S. distributors include Ingram Micro, Inc. and Tech Data, and its
OEMs include Kapok Computers, TigerDirect, Inc., Royal Computer, ASE
Technologies, LungHwa Electronics Co., Ltd., Zenon Computer Systems, and others.
The Company's international distributors are strategically located in many
countries around the world.
The Company generally acquires and maintains products for distribution through
corporate markets based on forecasts rather than firm purchase orders.
Additionally, the Company generally acquires products for sale to its OEM
customers only after receiving purchase orders from such customers, which
purchase orders are typically cancellable without substantial penalty from such
OEM customers. The Company currently places noncancellable orders to purchase
semiconductor products from its suppliers on a twelve- to sixteen-week lead time
basis. Consequently, if, as a result of inaccurate forecasts or cancelled
purchase orders, anticipated sales and shipments in any quarter do not occur
when expected, expenses and inventory levels could be disproportionately high,
requiring significant working capital and resulting in severe pressure on the
Company's financial condition.
Sales to distributors are typically subject to contractual rights of inventory
rotation and price protection. Regardless of particular contractual rights, the
failure of one or more distributors or OEMs to achieve sustained sell-through of
REALmagic products could result in product returns or collection problems,
contributing to significant fluctuations in the Company's operating results.
Research and Development
As of January 31, 1998, the Company had a staff of 35 research and development
personnel, which conducts all the Company's product development. The Company is
focusing its development efforts primarily on MPEG multimedia products,
including new and improved versions of REALmagic MPEG chipsets and cost
reduction processes.
To achieve and maintain technological leadership, the Company must continue to
make technological advancements in the areas of MPEG video and audio compression
and decompression. These advancements include maintaining compatibility with
emerging standards and multiple platforms, making improvements to the REALmagic
architecture, and developing enhancements to the REALmagic API.
-11-
<PAGE>
There can be no assurance that the Company will be able to make any such
advancements in the REALmagic MPEG technology or, if they are made, that the
Company will be able to market such advancements to maintain profitability and
its technological leadership.
During fiscal 1998, fiscal 1997, and fiscal 1996, the Company's research and
development expenses were $4,948,000, $4,688,000, and $4,499,000, respectively.
The Company plans to continue to devote substantial resources to research and
development of future generations of MPEG and other multimedia products.
Competition
The market for MPEG multimedia products is highly competitive; companies such as
C-Cube Microsystems have a high profile in the industry. Although the Company
does not believe that any products sold by a third party are in direct
competition with the REALmagic decoding card in terms of price and performance,
the possibility that other companies with more marketing and financial resources
may develop a competitive product may inhibit the wide acceptance of REALmagic
technology. The Company believes that many computer product manufacturers are
developing MPEG products that will compete directly with REALmagic products in
the near future.
The Company believes that the principal competitive factors in the market for
MPEG multimedia hardware products include time to market for new product
introductions, product performance, compatibility with industry standards,
price, and marketing and distribution resources. The Company believes that it
competes most favorably with respect to time to market, product performance, and
price of its REALmagic products. Moreover, the Company believes that the
acceptance of the REALmagic API as an industry standard for software development
could provide a significant competitive advantage for the Company. However,
there can be no assurance that the REALmagic API will be established as an
industry standard or that the Company's lead time in product introduction will
be sustained.
Licenses, Patents, and Trademarks
The Company is seeking patent protection for certain software and hardware
features in current and future versions of REALmagic. The Company currently has
eleven pending patent applications for its REALmagic technology. Six patents
have been issued to the Company. There can be no assurance that more patents
will be issued or that such patents, even if issued, will provide adequate
protection for the Company's competitive position. The Company also attempts to
protect its trade secrets and other proprietary information through agreements
with customers, suppliers, and employees and other security measures. Although
the Company intends to protect its rights vigorously, there can be no assurance
that these measures will be successful.
Manufacturing
To reduce overhead expenses, along with capital and staffing requirements, the
Company currently uses third-party contract manufacturers to fulfill all of its
manufacturing needs, including chipset manufacture and board-level assembly. All
of the chips used by the Company to develop its decoding products are
manufactured by outside suppliers and foundries. Each of these suppliers is a
sole source of supply to the Company of the respective chips produced by such
supplier.
The Company's reliance on independent suppliers involves several risks,
including the absence of adequate capacity and reduced control over delivery
schedules, manufacturing yields, and costs. Any delay or interruption in the
supply of any of the components required for the production of REALmagic
products could have a material adverse impact on the sales of the Company's
products and, thus, on the Company's operating results.
-12-
<PAGE>
Backlog
Since the Company's customers typically expect quick deliveries, the Company
seeks to ship products within a few weeks of receipt of a purchase order.
However, the customer may reschedule delivery of products or cancel the purchase
order entirely without significant penalty. Historically, the Company's backlog
has not been reflective of future sales. The Company also expects that in the
near term, its backlog will continue to be not indicative of future sales.
Employees
As of January 31, 1998, the Company had 71 full-time employees, including 35 in
research and development, 12 in marketing, sales, and support, 11 in operations,
and 13 in finance and administration.
The Company's future success will depend, in part, on its ability to continue to
attract, retain, and motivate highly qualified technical, marketing,
engineering, and management personnel, who are in great demand. The Company's
employees are not represented by any collective bargaining unit, and the Company
has never experienced a work stoppage. The Company believes that its employee
relations are satisfactory.
-13-
<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Shares
hereunder by the Selling Shareholders.
SELLING SHAREHOLDER
On March 11, 1998, the Company, Banque Edouard Constant SA ("BEC"), and
KA Investments LDC (the "Selling Shareholder") entered into an Assignment and
Assumption Agreement (the "Assignment Agreement") pursuant to which, subject to
certain conditions, the Selling Shareholder purchased from BEC 15,000 shares of
Series A Convertible Preferred Stock (the "Preferred Stock") of the Company
convertible into shares of Common Stock of the Company and a warrant exercisable
for 21,428 shares of Common Stock of the Company exercisable beginning on or
after April 30, 1998 (the "Warrant"). The Company and BEC had previously entered
into a Series A Preferred Stock Private Securities Subscription Agreement dated
as of June 25, 1997 (the "Purchase Agreement"), pursuant to which BEC purchased
a warrant exercisable for 57,142 shares of Common Stock of the Company beginning
April 30, 1998 and 40,000 shares of Series A Convertible Preferred Stock. The
Preferred Stock is now convertible into Common Stock of the Company subject to
the restrictions described in the Purchase Agreement and the Certificate of
Determination of Preferences of Series A Preferred Stock. BEC had also
previously entered into a Registration Rights Agreement with the Company (the
"Registration Rights Agreement").
Pursuant to the Assignment Agreement, the Selling Shareholder obtained
certain registration rights under the Registration Rights Agreement relating to
the Preferred Stock and the Warrant. This Registration Statement has been filed
by the Company pursuant to the Assignment Agreement. Under the Assignment
Agreement, the Selling Shareholder is restricted from, among other things,
exercising its right to convert the Preferred Stock or offering, selling, short
selling, or otherwise encumbering or disposing of any shares of Common Stock
which would be received upon conversion of the Preferred Stock without consent
of the Company within 90 days following the closing of the Assignment Agreement
and is restricted from exercising the Warrant before April 30, 1998. The
Preferred Stock and the Warrant are also subject to the provisions of the
Purchase Agreement and the Registration Rights Agreement.
<TABLE>
The following table sets forth certain information with respect to
beneficial ownership of the Company's Common Stock as of March 13, 1998 by the
Selling Shareholder and the number of shares of Common Stock covered by this
Prospectus. The Selling Shareholder has not held any position or office or had a
material relationship with the Company or any of its affiliates within the past
three years.
<CAPTION>
Shares of Common
Number of Stock Beneficially
Shares of Common Shares of Owned
Stock Beneficially Common After Offering(1)
Owned Prior to Stock ----------------------
Name and Address Offering(1) Being Offered Number Percent
- ------------------------------------- ----------------------------- -------------- ----------------------
<S> <C> <C> <C> <C>
KA Investments LDC 800,000(2)(3) 800,000(2)(3) 0(4) 0(4)
c/o Tarmachan Capital Management
1712 Hopkins Crossroads
Minnetonka, Minnesota 55305
<FN>
- ---------------------------
(1) The number and percentage of shares beneficially owned is determined under
rules of the Securities and Exchange Commission, and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under
such rules, beneficial ownership includes any shares as to which the
individual has sole or shared voting power or investment power and also any
shares which the individual has the potential right to acquire within sixty
(60) days of the Offering through the conversion of the Preferred Stock or
the exercise of the warrant.
(2) Includes the number of shares of Common Stock issuable upon (i) conversion
of the Preferred Stock (the price of which will fluctuate from time to time
based on changes in the market price of the Common Stock and provisions in
the formula for determining the conversion price) and (ii) exercise of the
Warrant exercisable on or after April 30, 1998 to purchase 21,428 shares of
Common Stock. The Preferred Stock is not convertible for ninety (90) days
following the closing of the Assignment Agreement and the Warrant is not
exercisable until April 30, 1998. Also includes an indeterminate number of
shares of Common Stock that may become issuable to prevent dilution
resulting from stock splits, stock dividends and conversion price or
exercise price adjustments, which are included pursuant to Rule 416 under
the Securities Act of 1933, as amended.
(3) In order to provide for (i) fluctuations in the market price of the Common
Stock and (ii) provisions in the formula for determining the conversion
price of the Preferred Stock provided for in the terms thereof, the
aggregate number of shares of Common Stock registered hereby exceeds the
aggregate number of such shares issuable upon conversion of the Preferred
Stock at the conversion price in effect on the date hereof.
(4) Assumes sale of all shares of Common Stock offered hereby.
</FN>
</TABLE>
-14-
<PAGE>
PLAN OF DISTRIBUTION
The Selling Shareholder may, from time to time, sell all or a portion
of the Shares on the Nasdaq National Market in privately negotiated transactions
or otherwise, at fixed prices that may be changed, at market prices prevailing
at the time of sale, at prices related to such market prices or at negotiated
prices. The Shares may be sold by the Selling Shareholder by one or more of the
following methods, without limitation: (a) block trades in which the broker or
dealer so engaged will attempt to sell the Shares as agent but may position and
resell a portion of the block as principal to facilitate the transaction, (b)
purchases by a broker or dealer as principal and resale by such broker or dealer
for its account pursuant to this Prospectus, (c) an exchange distribution in
accordance with the rules of such exchange, (d) ordinary brokerage transactions
and transactions in which the broker solicits purchasers, (e) privately
negotiated transactions, (f) short sales and (g) a combination of any such
methods of sale. In effecting sales, brokers and dealers engaged by the Selling
Shareholder may arrange for other brokers or dealers to participate. Brokers or
dealers may receive commissions or discounts from the Selling Shareholder (or,
if any such broker-dealer acts as agent for the purchaser of such shares, from
such purchaser) in amounts to be negotiated which are not expected to exceed
those customary in the types of transactions involved. Broker-dealers may agree
with the Selling Shareholder to sell a specified number of such Shares at a
stipulated price per share, and, to the extent such broker-dealer is unable to
do so acting as agent for a Selling Shareholder, to purchase as principal any
unsold Shares at the price required to fulfill the broker-dealer commitment to
the Selling Shareholder. Broker-dealers who acquire Shares as principal may
thereafter resell such Shares from time to time in transactions (which may
involve block transactions and sales to and through other broker-dealers,
including transactions of the nature described above) in the over-the-counter
market or otherwise at prices and on terms then prevailing at the time of sale,
at prices then related to the then-current market price or in negotiated
transactions and, in connection with such resales, may pay to or receive from
the purchasers of such Shares commissions as described above. The Selling
Shareholder may also sell the Shares in accordance with Rule 144 under the
Securities Act, rather than pursuant to this Prospectus.
The Selling Shareholder and any broker-dealers or agents that
participate with the Selling Shareholder in sales of the Shares may be deemed to
be "underwriters" withing the meaning of the Securities Act in connection with
such sales. In such event, any commissions received by such broker-dealers or
agents 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.
From time to time the Selling Shareholder may engage in short sales,
short sales against the box, puts and calls and other transactions in securities
of the Company or derivatives thereof, and may sell and deliver the Shares in
connection therewith or in settlement of securities loans. If the Selling
Shareholder engages in such transaction, the Conversion Price may be affected.
From time to time the Selling Shareholder may pledge their Shares pursuant to
the margin provisions of its customer agreements with its brokers. Upon a
default by the Selling Shareholder, the broker may offer and sell the pledged
Shares from time to time.
The Company is required to pay all fees and expenses incident to the
registration of the Shares, including one half of any fees and disbursements
(which half is not to exceed an aggregate of $5,000) of counsel to the Selling
Shareholder. The Company has agreed to indemnify the Selling Shareholder against
certain losses, claims, damages and liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
Certain legal matters relating to validity of the shares of Common
Stock offered hereby will be passed upon for the Company by Wilson Sonsini
Goodrich & Rosati, Professional Corporation, Palo Alto, California.
EXPERTS
The consolidated financial statements and the related financial
statement schedule incorporated in this prospectus by reference from the
Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1998
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report, which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
-15-
<PAGE>
TABLE OF CONTENTS
Page
----
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
Risk Factors.............................................................. 3
The Company............................................................... 8
Use of Proceeds...........................................................14
Selling Shareholder ......................................................14
Plan of Distribution..................................................... 15
Legal Matters............................................................ 15
Experts.................................................................. 15
No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations in connection
with this offering other than those contained in this Prospectus, and, if given
or made, such information or representations must not be relied upon as having
been authorized by the Company or any of the Underwriters. This Prospectus does
not constitute an offer to sell or a solicitation of an offer to buy any
securities other than the shares of Common Stock to which it relates or an offer
to, or a solicitation of, any person in any jurisdiction where such an offer or
solicitation would be unlawful. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circum stances, create an implication that
there has been no change in the affairs of the Company or that information
contained herein is correct as of any date subsequent to the date hereof.
800,000 Shares
SIGMA DESIGNS, INC.
Common Stock
------------
PROSPECTUS
------------
May 14, 1998
-16-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable in connection with the sale of
Common Stock being registered. All amounts are estimates except the Securities
and Exchange Commission registration fee and the Nasdaq National Market Listing
Fee.
Securities and Exchange Commission Registration Fee..... $ 817
Nasdaq National Market Listing Fee...................... 17,500
Legal Fees and Expenses................................. 60,000
Accounting Fees and Expenses............................ 10,000
Blue Sky Fees and Expenses.............................. 2,500
Transfer Agent and Registrar Fees....................... 5,000
Miscellaneous........................................... 1,500
Total.......................................... $97,317
Item 15. Indemnification of Directors and Officers
Section 317 of the California Corporations Code authorizes a court to
award or a corporation's Board of Directors to grant indemnity to directors and
officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act. Article IV of the Registrant's
Second Restated Articles of Incorporation and Article VI of the Registrant's
Bylaws provide for indemnification of its directors, officers, employees and
other agents to the maximum extent permitted by the California Corporations
Code. In addition, the Registrant has entered into Indemnification Agreements
with its officers and directors.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the
Registrant pursuant to the foregoing provisions, the Registrant has been
informed that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
Item 16. Exhibits and Financial Statement Schedules
(a) EXHIBITS
4.1* Form of Subscription Agreement by and between the
Company and the initial purchasers of the Series A
Preferred Stock and warrants.
4.2* Form of Registration Rights Agreement by and between
the Company the initial purchasers of the Series A
Preferred Stock and warrants.
4.3** Assignment and Assumption Agreement by and among the
Company, BEC and the Selling Shareholder.
4.4** Form of Stock Purchase Warrant.
5.1** Opinion of Wilson Sonsini Goodrich & Rosati,
Professional Corporation, counsel for the Registrant.
23.1 Independent Auditors' Consent.
23.2** Consent of Wilson Sonsini Goodrich & Rosati,
Professional Corporation, counsel for the Registrant
(included in Exhibit 5.1).
24.1** Power of Attorney.
* Incorporated by reference to Registration Statement No. 333-33147 (filed
August 7, 1997).
** Previously filed.
- ---------------------------
Schedules not listed above have been omitted because they are not
applicable or are not required or the information required to be set forth
therein is included in the consolidated financial statements or notes thereto.
II-2
<PAGE>
Item 17. Undertakings
Insofar as indemnification by the Registrant for liabilities arising
under the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered hereunder, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
The undersigned Registrant hereby undertakes that for purposes of
determining any liability under the Securities Act, the information omitted from
the form of Prospectus filed as part of this Registration Statement in reliance
upon 430A and contained in a form of Prospectus filed by the Registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to
be part of this Registration Statement as of the time it was declared effective.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Fremont,
State of California, on the 14th day of May 1998.
SIGMA DESIGNS, INC.
By: /s/ Thinh Q. Tran
-----------------------------------------
Thinh Q. Tran
Chairman of the Board,
President and Chief Executive Officer
<TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED:
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Thinh Q. Tran Chairman of the Board, President and Chief May 14, 1998
- -------------------------------------- Executive Officer (Principal Executive Officer)
Thinh Q. Tran
Kit Tsui* Director of Finance, Chief Financial Officer, May 14, 1998
- -------------------------------------- Secretary (Chief Financial and Accounting Officer)
Kit Tsui
William J. Almon* Director May 14, 1998
- --------------------------------------
William J. Almon
William Wang* Director May 14, 1998
- --------------------------------------
William Wang
*By: /s/ Thinh Q. Tran May 14, 1998
- --------------------------------------
Attorney-in-Fact
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER
- --------------
4.1* Form of Subscription Agreement by and between the Company
and the initial purchasers of the Series A Preferred
Stock and warrants.
4.2* Form of Registration Rights Agreement by and between the
Company the initial purchasers of the Series A Preferred
Stock and warrants.
4.3** Assignment and Assumption Agreement by and among the
Company, BEC and the Selling Shareholder.
4.4** Form of Stock Purchase Warrant.
5.1** Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, counsel for the Registrant.
23.1 Independent Auditors' Consent.
23.2** Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, counsel for the Registrant (included in
Exhibit 5.1).
24.1** Power of Attorney. (See page II-4.)
* Incorporated by reference to Registration Statement No. 333-33147 (filed
August 7, 1997).
** Previously filed.
II-5
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement 333-48023 of Sigma Designs, Inc. on Form S-3 of our
report dated February 26, 1998, appearing in the Annual Report on Form 10-K of
Sigma Designs, Inc. for the year ended January 31, 1998 and to the reference to
us under the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
DELOITTE & TOUCHE LLP
San Jose, California
May 11, 1998
