SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-------------------
FORM 8-K/A
Amendment No. 2
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 15, 2000
--------------------
RAMTRON INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State of or other jurisdiction of incorporation or organization)
0-17739
(Commission File Number)
84-0962308
(I.R.S. Employer Identification Number)
1850 Ramtron Drive, Colorado Springs, Colorado 80921 (719) 481-7000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
ITEM 5 - OTHER EVENTS:
On June 15, 2000, Ramtron International Corporation (Nasdaq: RMTR) along with
its subsidiary, Enhanced Memory Systems, Inc., announced that Ramtron
consummated, by way of a merger, the acquisition of Denver-based Mushkin Inc.,
a leading e-commerce distributor of high-performance computer components. The
merger, which was announced on May 11, 2000, has resulted in Mushkin becoming a
wholly owned subsidiary of Ramtron. Ramtron issued approximately 952,000
shares of stock to Mushkin shareholders in the merger. In addition, this
acquisition allows Enhanced Memory Systems to establish a strategic
distribution channel for high-performance memories and provide the benefits of
a direct sales solution to the company's end-users, resellers and OEM
customers. A copy of the Company's press release is attached hereto as
Exhibit 99.1 and incorporated herein by reference.
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ITEM 7 - FINANCIAL STATEMENTS AND EXHIBITS:
(a) Financial Statements:
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Mushkin Inc.:
We have audited the accompanying balance sheet of MUSHKIN INC. (a Colorado
corporation) as of December 31, 1999, and the related statements of operations,
stockholders' equity and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mushkin Inc. as of
December 31, 1999, and the results of its operations and its cash flows for the
year then ended in conformity with accounting principles generally accepted in
the United States.
/S/ Arthur Andersen
Denver, Colorado,
July 13, 2000.
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MUSHKIN INC.
BALANCE SHEETS
December 31, March 31,
1999 2000
----------- -----------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $624,820 $ 619,420
Accounts receivable 142,891 522,057
Inventories 29,660 105,900
-------- ----------
Total current assets 797,371 1,247,377
PROPERTY AND EQUIPMENT, net 40,481 45,813
OTHER ASSETS 2,000 2,000
-------- ----------
Total assets $839,852 $1,295,190
======== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $117,337 127,811
Accrued liabilities 34,492 21,326
Distributions payable 16,000 --
Note payable, related party 20,000 20,000
-------- ----------
Total current liabilities 187,829 169,137
Commitments and contingencies (Notes 1 and 4)
STOCKHOLDERS' EQUITY:
Common stock, no par value, 10,000 shares
authorized, 2,040 issued and outstanding 38,445 38,445
Retained earnings 613,578 1,087,608
-------- ----------
Total stockholders' equity 652,023 1,126,053
-------- ----------
Total liabilities and stockholders' equity $839,852 $1,295,190
======== ==========
The accompanying notes to the financial statements
are an integral part of these balance sheets.
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MUSHKIN INC.
STATEMENTS OF OPERATIONS
Three Months Ended
Year Ended March 31,
December 31, -----------------------
1999 1999 2000
------------ ---------- ----------
(Unaudited)
REVENUE $ 6,226,132 $1,680,736 $2,482,421
COST OF SALES 4,818,097 1,258,788 1,797,250
---------- ---------- ----------
GROSS MARGIN 1,408,035 421,948 685,171
GENERAL AND ADMINISTRATIVE EXPENSES 840,305 156,636 214,479
---------- ---------- ----------
OPERATING INCOME 567,730 265,312 470,692
INTEREST EXPENSE, RELATED PARTY (1,603) (300) (300)
OTHER INCOME 10,734 605 7,168
---------- ---------- ----------
NET INCOME $ 576,861 $ 265,617 $ 477,560
========== ========== ==========
The accompanying notes to the financial statements
are an integral part of these statements.
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MUSHKIN INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
Common Stock Total
------------------ Retained Stockholders'
Shares Amount Earnings Equity
------ ------ ---------- -------------
BALANCES, December 31, 1998 2,040 $38,445 $ 146,866 $ 185,311
Distributions -- -- (110,149) (110,149)
Net income -- -- 576,861 576,861
----- ------- ---------- ----------
BALANCES, December 31, 1999 2,040 38,445 613,578 652,023
Distributions (unaudited) -- -- (3,530) (3,530)
Net income (unaudited) -- -- 477,560 477,560
----- ------- ---------- ----------
BALANCES, March 31, 2000 2,040 $38,445 $1,807,608 $1,126,053
(unaudited) ===== ======= ========== ==========
The accompanying notes to the financial statements
are an integral part of these statements.
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MUSHKIN INC.
STATEMENTS OF CASH FLOWS
Three Months Ended
Year Ended March 31,
December 31, -----------------------
1999 1999 2000
------------ ---------- ----------
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 576,861 $265,617 $477,560
Adjustments used to reconcile
net income to net cash provided
by operating activities:
Depreciation and amortization 18,869 3,350 6,326
Provision for bad debts 114,294 -- --
Changes in assets and liabilities:
Accounts receivable 40 (56,994) (379,166)
Inventories 7,162 8,822 (76,240)
Accounts payable (17,361) (84,648) 10,474
Accrued liabilities 29,376 (594) (13,166)
Other assets (410) -- --
-------- -------- --------
Net cash provided by
operating activities 728,831 135,553 25,788
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (26,044) (3,006) (11,658)
-------- -------- --------
Net cash used in
investing activities (26,044) (3,006) (11,658)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions (101,149) (8,011) (19,530)
-------- -------- --------
Net cash used in
financing activities (101,149) (8,011) (19,530)
-------- -------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 601,638 124,536 (5,400)
CASH AND CASH EQUIVALENTS,
beginning of period 23,182 23,182 624,820
-------- -------- --------
CASH AND CASH EQUIVALENTS,
end of period $624,820 $147,718 $619,420
======== ======== ========
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest $ 1,603 $ 300 $ 300
======== ======== ========
The accompanying notes to the financial statements
are an integral part of these statements.
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MUSHKIN INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
==============================================================================
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Description of Business -
Mushkin Inc. (the "Company") was founded in Denver, Colorado in 1996 as an
on-line distributor of memory module products through its website . The
Company's on-line business has expanded to include a wide variety of DRAM and
flash memory module products including proprietary modules for Adaptec, Cisco
and Sun Microsystems products. The Company also supplies a line of memory
tester products and rack-mount components to serve its reseller customers. The
Company's customer base includes numerous end-users, resellers and OEMs.
On June 14, 2000, the Company's stockholders entered into a merger transaction
among the stockholders, the Company, a wholly owned subsidiary of Ramtron
International Corporation ("Ramtron") and Ramtron. On that date, the Company
became a wholly owned subsidiary of Ramtron.
The unaudited interim financial statements for the three months ended March 31,
1999 and 2000 have been prepared on the same basis as the audited financial
statements and, in the opinion of management, reflect all normal recurring
adjustments necessary to present fairly the financial information set forth
therein, in accordance with accounting principles generally accepted in the
United States. The results of operations for the three months ended March 31,
2000 are not necessarily indicative of the operating results to be expected for
the year ended December 31, 2000.
Use Of Estimates -
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results could
differ from those estimates.
Revenue Recognition -
Revenue from product sales is recognized upon delivery to the customer.
Cash and Cash Equivalents -
For purposes of the statements of cash flows, the Company considers all cash
and highly liquid investments purchased with an original maturity of three
months or less to be cash equivalents.
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Inventories -
Inventories consist of finished goods and are stated at the lower of cost or
market value. The first-in, first-out method of costing inventories is used.
Property and Equipment -
Property and equipment is stated at cost and depreciation and amortization is
provided using the straight-line method over the estimated useful lives of the
respective assets. Maintenance and repairs are expensed as incurred and
improvements are capitalized.
The cost of assets sold or retired and the related accumulated depreciation or
amortization are removed from the accounts and the resulting gain or loss is
reflected in the statements of operations in the period in which such sale or
disposition occurs.
Income Taxes -
The Company has elected to be taxed as an S corporation for federal and state
income tax purposes. While this election is in effect, the income of the
Company (whether distributed or not) will be taxed to its stockholders for
federal and state income tax purposes. Accordingly, no provision for income
taxes is included in the accompanying financial statements.
Long-Lived Assets -
Long-lived assets and certain identifiable intangibles to be held and used by
the Company are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Any long-lived assets and certain identifiable intangibles to be
disposed of are reported at the lower of their carrying amount or fair value
less cost to sell.
Fair Value of Financial Instruments -
The Company's financial instruments consist of cash and cash equivalents,
short-term trade receivables and payables and a related party note payable.
The carrying values of cash and cash equivalents, short-term trade receivables
and payables and related party notes payable approximate fair value due to
their short-term nature.
Concentration of Credit Risks -
The Company's customer base is comprised primarily of customers who are located
throughout the United States. As of and for the year ended December 31, 1999,
there were no customers who accounted for more than 10% of accounts receivables
or sales.
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New Accounting Standards -
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS No. 133"). SFAS No. 133, as amended, is
effective for fiscal years beginning after June 15, 2000.
SFAS No. 133 establishes accounting and reporting standards requiring that
every derivative instrument (including certain derivative instruments embedded
in other contracts) be recorded in the balance sheet as either an asset or
liability measured at its fair value. It also requires that changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. Special accounting for qualifying hedges
allows a derivative's gains and losses to offset related results on the hedged
item in the income statement, and requires that a company must formally
document, designate and assess the effectiveness of transactions that receive
hedge accounting. SFAS No. 133 may not be applied retroactively and must be
applied to (i) derivative instruments and (ii) certain derivative instruments
embedded in hybrid contracts. With respect to hybrid instruments, a company
may elect to apply SFAS No. 133, as amended, to (i) all hybrid contracts,
(ii) only those hybrid instruments that were issued, acquired, or substantively
modified after December 31, 1997, or (iii) only those hybrid instruments that
were issued, acquired or substantively modified after December 31, 1998.
Management is currently evaluating the effect SFAS No. 133 will have on the
Company's financial statements.
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition" ("SAB No. 101"), which
provides guidance on the recognition, presentation and disclosure of revenue in
financial statements. SAB No. 101 is effective for the fourth quarter of 2000.
SAB No. 101 is not expected to have a material effect on the Company's
financial position or results of operations.
2. PROPERTY AND EQUIPMENT:
Property and equipment consists of the following as of December 31, 1999:
Estimated
Useful Lives
(In Years)
------------
Leasehold improvements 3 $ 2,587
Computer equipment 3 67,713
Office furniture 3 4,857
--------
75,157
Less accumulated depreciation and amortization (34,676)
--------
$ 40,481
========
Depreciation and amortization expense for property and equipment was $18,869
for 1999.
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3. LINE OF CREDIT:
The Company has obtained a $200,000 line of credit with a bank which expired in
March 2000. Subsequent to year end, this line of credit was extended through
March 31, 2001. However, it was terminated on June 14, 2000 upon the
acquisition of the Company's common stock as described in Note 1. There were
no amounts outstanding under this line of credit as of December 31, 1999.
4. OPERATING LEASES
Operating Leases -
The Company has a commitment under a non-cancelable operating lease for a
building expiring in 2001. Minimum future annual lease payments under this
lease as of December 31, 1999 are as follows:
2000 $18,000
2001 19,020
-------
$37,020
=======
Total rent expense on all operating leases was $12,716 for 1999.
5. RELATED PARTY TRANSACTIONS:
The Company issued a note payable in the amount of $20,000 in 1996 to a
relative of the Company's stockholders. This note bore interest at 6% which is
paid quarterly. On June 14, 2000, this note payable was paid. Interest
expense on this note was $1,200 in 1999.
6. DEFINED CONTRIBUTION PLAN:
The Company established a simple IRA plan for its employees during 1999, in
which substantially all full-time employees are participants. The Company may
make, at the Board of Directors' discretion, annual contributions on behalf of
each participant. During 1999, the Company charged to expense $21,457 related
to 1999 contributions.
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(b) Pro Forma Financial Information:
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma consolidated financial statements give effect
to the acquisition of Mushkin Inc. The unaudited pro forma consolidated
balance sheet as of March 31, 2000 is presented as if the acquisition had
occurred on that date. The unaudited pro forma consolidated statement of
operations for the three months ended March 31, 2000 and the year ended
December 31, 1999 assumes that the acquisition occurred on January 1, 1999.
The acquisition was recorded as a purchase for accounting purposes and,
accordingly, the assets acquired and liabilities assumed have been reflected at
their estimated respective fair market values.
The unaudited pro forma consolidated financial statements should be read in
conjunction with the historical financial statements of Ramtron and Mushkin and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," which are included in Ramtron's Form 10-K for the year ended
December 31, 1999, Form 10-Q for the quarter ended March 31, 2000 or included
in this filing. The unaudited pro forma consolidated statements of operations
are not necessarily indicative of the financial results that would have
occurred had the acquisition been consummated on the dates indicated, nor is it
necessarily indicative of future results.
The pro forma adjustments are based on preliminary assumptions and estimates
made by Ramtron's management and do not reflect adjustments for anticipated
operating efficiencies and cost savings which may be realized as a result of
the acquisition.
The actual allocation of the consideration paid by Ramtron for Mushkin may
differ from that reflected in the unaudited pro forma consolidated financial
statements after a more extensive review of the fair market values of the
assets acquired and liabilities assumed has been completed. Amounts allocated
will be based upon the estimated fair values at the closing date of the
acquisition, which amounts could vary significantly from the amounts at
March 31, 2000.
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UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS
March 31, 2000
(in thousands)
Historical Pro Forma
---------------- -------------------------
Ramtron Mushkin Adjustments Consolidated
------- ------- ----------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 9,512 $ 619 $ $10,131
Accounts receivable 2,506 522 3,028
Inventories 4,849 106 4,955
Other current assets 232 2 234
------ ------- ------- -------
Total current assets 17,099 1,249 18,348
Property, plant and equipment, net 5,853 46 5,899
Intangible assets, net 8,479 -- 8,940 (a) 17,419
------ ------- ------- -------
$31,431 $ 1,295 $ 8,940 $41,666
======= ======= ======= =======
LIABILITIES AND STOCKHHOLDER' EQUITY
Current liabilities:
Accounts Payable $ 2,460 $ 148 $ 66 (a) $ 2,674
Accrued liabilities 828 21 849
Deferred revenue 472 -- 472
------- ------- ------- -------
Total current liabilities 3,760 169 66 3,995
Long-term promissory note, net of
debt discount 5,903 -- 5,903
------- ------- ------- -------
Total liabilities 9,663 169 66 9,898
Redeemable preferred stock 829 -- 829
Minority interest in subsidiary 751 -- 751
Stockholders' equity:
Common stock 161 38 9 (a) 170
(38)(c)
Common stock warrants 1,409 -- 1,409
Deferred compensation (818) -- (818)
Additional paid-in capital 187,489 -- 9,991 (a) 197,480
Accumulated earnings (deficit) (168,053) 1,088 (1,088)(c) (168,053)
------- ------- ------- -------
Total stockholders' equity 20,188 1,126 8,874 30,188
------- ------- ------- -------
$31,431 $ 1,295 $ 8,940 $41,666
======= ======= ======= =======
See accompanying notes to Unaudited Pro Forma Consolidated Financial Statements
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UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended March 31, 2000
(in thousands, except per share data)
Historical Pro Forma
---------------- -------------------------
Ramtron Mushkin Adjustments Consolidated
------- ------- ----------- ------------
Revenue
Product sales $ 2,270 $ 2,482 $ $ 4,752
License and development fees 2,000 -- 2,000
Customer-sponsored research
and development 1,301 -- 1,301
------- ------- ------- -------
5,571 2,482 8,053
------- ------- ------- -------
Costs and expenses:
Cost of product sales 1,267 1,797 3,064
Research and development 2,139 -- 2,139
Customer-sponsored research
and development 1,178 -- 1,178
Sales, general and admini-
strative (exclusive of
non-cash compensation
expense shown below) 2,439 214 320(b) 2,973
Stock based compensation 1,566 -- 1,566
------- ------- ------- -------
8,589 2,011 320 10,920
------- ------- ------- -------
Operating profit (loss) (3,018) 471 (320) (2,867)
Interest expense, related party (322) -- (322)
Other income, net 109 7 116
Minority interest in net loss
of subsidiary 222 -- 222
------- ------- ------- -------
Net profit (loss) $(3,009) $ 478 $ (320) $(2,851)
======= ======= ======= =======
Net profit (loss) per common share:
Net profit (loss) $(3,009) $ 478 $ (320) $(2,851)
Dividends on redeemable
preferred stock (25) -- (25)
Accretion of discount on
redeemable preferred stock (6) -- (6)
------- ------- ------- -------
Net profit (loss) applicable to
common shares $(3,040) $ 478 $ (320) $(2,882)
======= ======= ======= =======
Net loss per common share - basic
and diluted $ (0.20) $ (0.18)
======= =======
Weight average shares outstanding 15,065 952(a) 16,017
======= ======= =======
See accompanying notes to Unaudited Pro Forma Consolidated Financial Statements
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UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
For the year ended December 31, 1999
(in thousands, except per share data)
Historical Pro Forma
---------------- -------------------------
Ramtron Mushkin Adjustments Consolidated
------- ------- ----------- ------------
Revenue
Product sales $13,148 $ 6,226 $ $19,374
License and development fees 5,200 -- 5,200
Royalties 1,501 -- 1,501
Customer-sponsored research
and development 5,022 -- 5,022
------- ------- ------- -------
24,871 6,226 31,097
------- ------- ------- -------
Costs and expenses:
Cost of product sales 7,978 4,818 12,796
Provision for inventory
write-off 1,178 -- 1,178
Research and development 7,170 -- 7,170
Customer-sponsored research
and development 4,880 -- 4,880
Sales, general and admini-
strative 9,490 840 1,277(b) 11,607
------- ------- ------- -------
30,696 5,658 1,277 37,631
------- ------- ------- -------
Operating profit (loss) (5,825) 568 (1,277) (6,534)
Interest expense, related party (914) (2) (916)
Other income, net 541 11 552
------- ------- ------- -------
Net profit (loss) $(6,198) $ 577 $(1,277) $(6,898)
======= ======= ======= =======
Net profit (loss) per common share:
Net profit (loss) $(6,198) $ 577 $(1,277) $(6,898)
Dividends on redeemable
preferred stock (396) -- (396)
Accretion of discount on
redeemable preferred stock (488) -- (488)
Gain on preferred stock
settlement 5,047 -- 5,047
------- ------- ------- -------
Net profit (loss) applicable to
common shares $(2,035) $ 577 $(1,277) $(2,735)
======= ======= ======= =======
Net loss per common share - basic
and diluted $ (0.16) $ (0.20)
======= =======
Weight average shares outstanding 12,815 952(a) 13,767
======= ======= =======
See accompanying notes to Unaudited Pro Forma Consolidated Financial Statements
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RAMTRON INTERNATIONAL CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
===============================================================================
(a) The purchase price for Mushkin Inc. was derived as follows (in thousands):
952,380 shares of Ramtron to be issued
in the merger at $10.50 per share
Common stock - $0.01 par value $ 9
Additional paid-in capital 9,991
Estimated fees and expenses to complete the transaction 66
-------
$10,066
=======
The $10.50 per share price used to value Ramtron common stock is based
on a guaranteed minimum value of Ramtron common stock to be issued in the
merger. This amount approximates the average closing price of Ramtron's
common stock on The Nasdaq Stock Market for the five business days before
and after May 11, 2000, the date the terms of the merger were announced.
The following preliminary allocation of purchase price to assets acquired
and liabilities assumed reflects the assumption that current assets and
current liabilities are carried at historical amounts which approximate
their fair market value. The excess of the purchase price over Mushkin's
historical net book value as of March 31, 2000 was allocated to goodwill.
(in thousands)
--------------
Current assets $ 1,249
Property, plant and equipment 46
Goodwill 8,940
Current liabilities (169)
-------
$10,066
=======
(b) Represents the amortization of goodwill using the straight-line method
over 7 years.
(c) Represents the elimination of the historical equity balances of Mushkin.
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(c) Exhibits. The following exhibits are furnished as part of this
report:
Exhibit Description
------- -----------
2.1 Agreement and Plan of Merger dated May 11, 2000, as
amended, among Ramtron, RIC MI Acquisition Inc., Mushkin
Inc., William Michael Mushkin and Elizabeth Loring Crane.
2.2 Amendment No. 1 to Agreement and Plan of Merger dated
June 8, 2000.
99.1 Press Release dated June 15, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RAMTRON INTERNATIONAL CORPORATION
By: /S/ LuAnn D. Hanson
------------------------------
LuAnn D. Hanson
Acting CFO
Dated: July 24, 2000
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