SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 30,
1998
SYQUEST TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0-19674 94-2793941
(Commission File Number) (IRS Employer Identification No.)
47071 Bayside Parkway, Fremont, California 94538
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (510) 226-
4000
Not Applicable
(Former name or former address, if changed since last report.)
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events
REDUCTION OF CREDIT LINE AND STATUS OF STRATEGIC DISCUSSIONS
As of September 30, 1998, the Company was not in compliance
with the financial covenants contained in its loan agreement with
Greyrock Business Credit ("GBC"), the Company's asset-based
lender. GBC waived the default, but reduced the Company's credit
line from $30 million to $10.75 million. Currently, the Company
has no availability under its reduced credit line for additional
borrowing and no other credit lines or sources of significant
debt financing. The Company is seeking additional financing from
another source, but there can be no assurance that such financing
will be available. The Company has been obliged from time to
time to cut back or discontinue certain vital business
activities, such as marketing, shipping, advertising, production
of new inventory, purchase of raw materials, and research and
development.
In recent weeks, the Company has been in negotiations with
certain of its investors to reach agreement on a series of
transactions that would make an additional $13 million available
to the Company. The transactions have not closed, and it is
unlikely that they will close unless the Company is able to
secure additional substantial lines of credit or debt financing.
Even if the Company were successful in securing additional lines
of credit or sources of debt financing, there can be no assurance
that the $13 million would still be available to the Company.
In an earlier press release, the Company disclosed that it
had retained CIBC Oppenheimer as its investment banker to assist
in attempting to restructure its capital accounts, raise
additional financing, and advise the Company with respect to
acquisitions or strategic alliances, among other things. While
many discussions have taken place, to date none have led to any
firm proposals. Discussions are continuing, but there can be no
assurance that they will reach a successful conclusion, or that
if successfully concluded they would lead to any benefits to
existing or potential shareholders.
Unless the Company is able to obtain sufficient financing or
secure a strategic alliance, the Company will not be able to
continue funding its operations.
Item 7. Financial Statements and Exhibits
c) Exhibits
99.1 Registrant's Press Release dated October 27, 1998.
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.
SYQUEST TECHNOLOGY, INC.
(Registrant)
Date: October 27, 1998 By /s/ Henry Lo
Henry Lo, Chief Financial Officer
Exhibit 99.1
For Immediate Release
SYQUEST TECHNOLOGY UNAWARE OF REASON FOR HEAVY TRADING
Fremont, California, October 27, 1998 - SyQuest Technology, Inc.
(Nasdaq:SYQT), said today that it was unaware of any reason for
the unusually heavy trading in its shares on the Nasdaq Stock
Market yesterday. The Company's stock was the second most
actively traded issue on Nasdaq.
The Company said that it had concern that the large trading
volume accompanied by the recent rise in its stock price might
have been fueled by speculation about possible strategic
partnerships. In an earlier press release, the Company disclosed
that it had retained CIBC Oppenheimer as its investment banker to
assist in attempting to restructure its capital accounts, raise
additional financing, and to advise the Company with respect to
acquisitions or alliances, among other things. Many discussions
have taken place, but to date none have led to any firm
proposals. While such discussions are continuing, there can be
no assurance that those discussions will reach a successful
conclusion, or that if successfully concluded would lead to any
benefits to existing or potential shareholders.
####
This news release contains forward-looking statements that
involve risks and uncertainties, including competition in the
marketplace for the Company's products, and other risks detailed
from time to time in the SEC reports filed by SyQuest including
its most recent reports on Forms 8K, 10K, and 10Q.
r1998 SyQuest is a registered trademark and the SyQuest logo is a
trademark of SyQuest Technology, Inc. All other brands or trade
names are the property of their respective companies.
