Amendment to Form 8-K

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WgWX+7SecSJo6gheHS9BuEV2zpuH7tBNTE8sGiJFImsSWCWLOqWxejcaOj5D0+Yx tudWamItvTI+dW1BF8F8Gw== 0001193125-08-193119.txt : 20080909 0001193125-08-193119.hdr.sgml : 20080909 20080909172130 ACCESSION NUMBER: 0001193125-08-193119 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20080626 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080909 DATE AS OF CHANGE: 20080909 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VIRAGE LOGIC CORP CENTRAL INDEX KEY: 0001050776 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 770416232 STATE OF INCORPORATION: CA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-31089 FILM NUMBER: 081063531 BUSINESS ADDRESS: STREET 1: 47100 BAYSIDE PARKWAY CITY: FREMONT STATE: CA ZIP: 94538 BUSINESS PHONE: 5103608000 MAIL ADDRESS: STREET 1: 47100 BAYSIDE PARKWAY CITY: FREMONT STATE: CA ZIP: 94538 8-K/A 1 d8ka.htm AMENDMENT TO FORM 8-K Amendment to Form 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K/A

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 26, 2008

VIRAGE LOGIC CORPORATION

(Exact name of registrant as specified in its charter)

000-31089

(Commission File Number)


Delaware		77-0416232
(State or other jurisdiction of incorporation)		(I.R.S. Employer Identification No.)

47100 Bayside Parkway

Fremont, California 94538

(Address of principal executive offices, with zip code)

(510) 360-8000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01

Completion of Acquisition or Disposition of Assets

On July 2, 2008, we filed a Current Report on Form 8-K reporting that we completed the acquisition of the Impinj non-volatile memory (“NVM”) business (a carve-out of Impinj, Inc.). In that Current Report, we indicated that the financial statements and pro forma financial information required under Item 9.01 of Form 8-K would be filed no later than 70 calendar days after the date of the Current Report reporting the acquisition was required to be filed. This Amendment No. 1 to our July 2, 2008 Current Report on Form 8-K contains the required financial statements and pro forma financial information.

Item 9.01

Financial Statements and Exhibits

(a)

Financial Statements of Business Acquired

The following financial statements of the Impinj NVM business (a carve-out of Impinj, Inc.) are attached as Exhibit 99.1 to this Form 8-K/A:

Balance Sheets as of December 31, 2006 and 2007 and March 31, 2008 (unaudited)

Statements of Operations for the years ended December 31, 2006 and 2007 and three months ended March 31, 2007 (unaudited) and 2008 (unaudited)

Statements of Cash Flows for the years ended December 31, 2006 and 2007 and three months ended March 31, 2007 (unaudited) and 2008 (unaudited)

Notes to the Financial Statements

(b)

Pro Forma Financial Information

The pro forma financial information with respect to the acquisition of the Impinj NVM business (a carve-out of Impinj, Inc.) by Virage Logic Corporation is attached as Exhibit 99.2 to this Form 8-K/A:

Unaudited Pro Forma Condensed Combined Financial Information (Introduction)

Unaudited Pro Forma Condensed Combined Balance Sheet as of March 31, 2008

Unaudited Pro Forma Condensed Combined Statements of Operations for the year ended September 30, 2007

Unaudited Pro Forma Condensed Combined Statements of Operations for the six months ended March 31, 2008

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

(c)

Not applicable.

(d)

Exhibits



23.1		Consent of Independent Accountants.

99.1		Consolidated Financial Statements of the Impinj NVM business (a carve-out of Impinj, Inc.) for the years ended December 31, 2006 and 2007 and the three months ended March 31, 2007 (unaudited) and 2008 (unaudited).

99.2		Unaudited pro forma condensed combined financial information of Virage Logic Corporation

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.


	VIRAGE LOGIC CORPORATION

Date: September 9, 2008	By:	/s/ Christine Russell
		Christine Russell
		Vice President of Finance and
		Chief Financial Officer

EX-23.1 2 dex231.htm CONSENT OF INDEPENDENT ACCOUNTANTS Consent of Independent Accountants

Exhibit 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-46422, 333-60268, 333-75496, 333-82702, 333-90770, 333-103151, 333-105542, 333-105545, 333-112709, 333-116907, 333-122715, 333-127207 and 333-151236) of Virage Logic Corporation of our report dated September 9, 2008 relating to the financial statements of the Impinj NVM business (a carve-out of Impinj, Inc.), which appears in this Current Report on Form 8-K/A of Virage Logic Corporation dated September 9, 2008.

/s/ PricewaterhouseCoopers LLP

Seattle, Washington

September 9, 2008

EX-99.1 3 dex991.htm CONSOLIDATED FINANCIAL STATEMENTS Consolidated Financial Statements

Exhibit 99.1

Impinj NVM Business

(A Carve-Out of Impinj, Inc.)


		Page(s)

Report of Independent Auditors		1

Financial Statements

Balance Sheets		2

Statements of Operations		3

Statements of Cash Flows		4

Notes to Financial Statements		5

Report of Independent Auditors

To the Board of Directors and Stockholders of

Virage Logic Corporation.

In our opinion, the accompanying balance sheets and the related statements of operations, and cash flows present fairly, in all material respects, the financial position of the Impinj NVM business ("the Business"), (a carve-out of Impinj, Inc.) at December 31, 2007 and 2006, and the results of its operations and its cash flows for the two years ended December 31, 2007 in conformity with accounting principles generally accepted in the United States of America. 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 audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America. 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As indicated in Note 1 and 3, the Business’s financial statements have been derived from the financial statements of Impinj, Inc. (“Impinj”) and reflect significant allocations and management's estimates of the cost of the services provided to the Business. The financial position, results of operations and cash flows of the Business could differ from those that would have resulted had the Business operated autonomously or independently of Impinj.

/s/ PRICEWATERHOUSECOOPERS LLP

Seattle, Washington

September 9, 2008

IMPINJ NVM BUSINESS

(A Carve-Out of Impinj, Inc.)

BALANCE SHEETS


	December 31, 2006			December 31, 2007			March 31, 2008
							(Unaudited)
ASSETS:
Current assets:
Accounts receivable, net of allowance for doubtful accounts of $57,450, $60,271, and $63,269 (unaudited), respectively	$	900,300		$	430,073		$	339,439
Prepaid expenses and other		8,277			74,061			215,223

Total current assets		908,577			504,134			554,662
Property and equipment, net		47,028			46,739			39,796

Total assets	$	955,605		$	550,873		$	594,458

LIABILITIES AND DIVISIONAL EQUITY (DEFICIENCY)
Current liabilities:
Deferred revenue	$	126,583		$	854,583		$	851,068

Total current liabilities		126,583			854,583			851,068
Long-term liabilities:
Deferred revenue		—			52,083			—

Total liabilities		126,583			906,666			851,068

Commitments and contingencies
Divisional equity (deficiency):
Due to parent company		4,532,261			8,525,113			9,627,602
Accumulated deficit		(3,703,239	)		(8,880,906	)		(9,884,212	)

Total divisional equity (deficiency)		829,022			(355,793	)		(256,610	)

Total liabilities and divisional equity (deficiency)	$	955,605		$	550,873		$	594,458

See accompanying notes to the Financial Statements

IMPINJ NVM BUSINESS

(A Carve-Out of Impinj, Inc.)

STATEMENTS OF OPERATIONS


	For the Year Ended						For the Three Months Ended
	December 31 2006			December 31 2007			March 31, 2007			March 31, 2008
							(Unaudited)			(Unaudited)
Revenues:
License	$	3,295,000		$	1,362,497		$	198,333		$	505,833
Development and service		1,138,188			561,727			228,667			132,299
Royalties		423,505			397,544			374,572			16,938

Total revenues		4,856,693			2,321,768			801,572			655,070

Cost and expenses:
Research and development		3,433,947			3,937,671			806,927			1,063,537
Sales and marketing		1,522,869			1,493,923			365,347			310,302
General and administrative		1,261,153			2,067,841			337,354			284,537

Total cost and expenses		6,217,969			7,499,435			1,509,628			1,658,376

Loss before income taxes		(1,361,276	)		(5,177,667	)		(708,056	)		(1,003,306	)

Net loss	$	(1,361,276	)	$	(5,177,667	)	$	(708,056	)	$	(1,003,306	)

See accompanying notes to the Financial Statements

IMPINJ NVM BUSINESS

(A Carve-Out of Impinj, Inc.)

STATEMENTS OF CASH FLOWS


	For the Year Ended December 31,						For the Three Months Ended March 31,
	2006			2007			2007			2008
							(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,361,276	)	$	(5,177,667	)	$	(708,056	)	$	(1,003,306	)
Adjustments to reconcile loss from operations to net cash used in operating activities:
Depreciation		22,558			21,742			7,099			6,943
Loss on disposal of property and equipment		1,810			2,058			—			—
Stock based compensation		11,188			60,819			9,818			17,179
Changes in operating assets and liabilities:
Accounts receivable		(517,150	)		470,227			479,640			90,634
Prepaid expenses and other assets		4,523			(65,784	)		(344,923	)		(141,162	)
Deferred revenue		36,583			780,083			389,251			(55,598	)

Net cash used in operating activities		(1,801,764	)		(3,908,522	)		(167,171	)		(1,085,310	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(45,348	)		(23,511	)		—			—

Net cash used in investing activities		(45,348	)		(23,511	)		—			—

CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from Impinj, Inc.		1,847,112			3,932,033			167,171			1,085,310

Net cash provided by financing activities		1,847,112			3,932,033			167,171			1,085,310

Net increase (decrease) in cash and cash equivalents		—			—			—			—
Cash and cash equivalents, beginning of period		—			—			—			—

Cash and cash equivalents, end of period	$	—		$	—		$	—		$	—

See accompanying notes to the Financial Statements

Notes the Financial Statements

1.	Basis of Presentation and Nature of Operations

Basis of Presentation

Impinj NVM Business (“the Business”) operates as a business unit of Impinj, Inc. (“Impinj”) and is not a stand-alone company.

The accompanying financial statements are intended to reflect the results of the Business’s operations, financial position, and cash flows as if it were a separate entity for all periods presented and are in conformity with generally accepted accounting principles. The accompanying carve-out financial statements have been prepared from historical accounting records of Impinj and have been presented to reflect the portion of NVM business assets and expenses that were directly attributable to and, as discussed in Note 3, allocated to the Business.

Nature of Business

The Business provides logic non-volatile embedded memory IP to the semiconductor industry.

2.	Summary of Significant Accounting Policies

Accounting Principles

The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America.

Fair Value of Financial Instruments

The carrying value of accounts receivable are carried at cost, which approximates fair value due to their short-term maturities.

Accounts Receivable

Accounts receivable consists of amounts billed currently due from customers. The allowance for doubtful accounts is the Business’s best estimate of the amount of probable credit losses in the Business’s existing accounts receivable. The Business’s allowance is determined based on historical write-off experience and on specific customer accounts believed to be a collection risk. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is provided using the straight-line method over the estimated useful life of the assets. Additions and improvements that increase the value or extend the life of an asset are capitalized.

Impairment of Long-Lived Assets

The Business assesses the impairment of long-lived assets whenever events or changes in business circumstances indicate that the carrying amounts of the assets may not be fully recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. The Business has not recognized any impairment losses for the years ended December 31, 2006 and 2007.

Revenue Recognition

The Business’s revenue recognition policy is based on the American Institute of Certified Public Accountants Statement of Position 97-2, “Software Revenue Recognition” as amended by Statement of Position 98-4 and Statement of Position 98-9. Additionally, revenue is recognized on some products, by analogy to Statement of Position 81-1, “Accounting for Performance of Construction-Type and Certain Production-Type Contracts.” Revenues generated from the Business are all recorded in the United States.

Notes the Financial Statements

License revenues are generally recognized when persuasive evidence of an arrangement exists, delivery of the product has occurred, the fee is fixed or determinable, and collectibility is reasonably assured. If any of these criteria are not met, revenue recognition is deferred until such time as all criteria are met.

License of the Business’s intellectual property may involve customization to the functionality of the software; therefore revenues from such licenses are recognized in accordance with Statement of Position 81-1. If the Business believes that they can reasonably and reliably estimate the costs to complete projects, revenue is recognized using a percentage-of-completion method. If the Business cannot reasonably and reliably estimate the costs to complete a project, the completed contract method of accounting is used, such that costs are deferred until the project is completed, at which time revenues and related costs are recognized. Revenues from technical consulting services are recognized as the services are performed. If customer acceptance is required for completion of specified milestones, the related revenue is deferred until the acceptance criteria are met. If a portion of the value of a contract is contingent based on meeting a specified criteria, then the contingent value of the contract is deferred until the contingency has been satisfied or removed.

For arrangements which include multiple elements, all revenue is deferred and recognized when delivery of the last element occurs as we have not established fair value for all elements.

Research and Development Costs

Research and development expenses are charged to operations as incurred and consist of salaries and related benefits of product development personnel, contract developers, prototype materials and other expenses related to the development of new and improved products.

Income Taxes

The Business records income taxes under SFAS No. 109, Accounting for Income Taxes, under which deferred tax assets including net operating losses and liabilities, are determined based on temporary differences between the book and tax bases of assets and liabilities. The Business believes sufficient uncertainty exists regarding the realizability of deferred tax assets such that a full valuation allowance is required.

Concentrations of Risks

Financial instruments that potentially subject the Business to concentrations of credit risk consist primarily of accounts receivable. This instrument is generally unsecured and uninsured. The Business extends credit to customers based upon an evaluation of the customer’s financial condition and generally collateral is not required.

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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and judgments relied upon by management in preparing these financial statements include revenue recognition, the determination of fair value of stock awards, depreciable lives for fixed assets, deferred income taxes and collectibility of accounts receivable. Actual results could differ from those estimates.

Stock-Based Compensation

On January 1, 2006 the Business adopted SFAS No. 123R, Share-Based Payment (“SFAS 123R”) using the prospective transition method. Under this method, the Business’s stock-based compensation costs recognized during 2006 were comprised of compensation costs for all share-based payment awards granted subsequent to January 1, 2006, based on their grant date fair value estimated using the Black-Scholes model, in accordance with the provisions of SFAS 123R. The Business uses the straight-line method of allocating compensation cost over the requisite service period of the related award under SFAS 123R.

Notes the Financial Statements

Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosure of fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Business adopted the SFAS 157 and the adoption did not have an impact on its results of operations or financial position.

On February 1, 2008, the FASB issued FIN 48-2, Effective Date of FASB Interpretation No. 48 for Certain Nonpublic Enterprises , which allows the Business to defer the adoption of FIN 48 until annual periods beginning after December 15, 2007. The Business has elected to take advantage of the deferral. Based on continued analysis, the Business believes that the adoption of FIN 48 will not have a material impact to the Business’s financial statements. However, the Business’s conclusions regarding FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance expected from the FASB, and on-going analysis of tax laws, regulations and interpretations thereof.

3.	Related Party Transactions and Allocations

The Business’s financial statements are derived from the books and records of Impinj. The Business’s financial statements have been presented to reflect the portion of Impinj’s historical assets and expenses that are directly attributable to and, as discussed below, allocated to the Business. Impinj also had one other business and Impinj’s expenses during that time consisted of expenses directly attributable to the Business, expenses directly attributable to the other business and other expenses (which are referred to as “allocated” or “allocable” expenses) that were not directly attributable to the Business or the other business.

The statements of operations include allocations of certain Impinj, Inc’s corporate expenses, including: accounting, financial reporting, insurance, legal, human resources, payroll, and interest. These allocations totaled $1,378,690, $2,546,225, $545,515 (unaudited) and $547,668 (unaudited), for the years ended December 31, 2006 and 2007 and for the three months ended March 31, 2008 and 2007, respectively. The allocations are based primarily on the Business’s payroll costs as a percentage of total Impinj payroll costs, and the Business’s headcount as a percentage of total Impinj headcount. Facilities expense was allocated based on square footage of the Business facility space as a percentage of the total Impinj facility space.

The balance sheet includes assets and liabilities directly attributable to the Business. There is no allocation associated with these amounts. However, the divisional equity account includes both direct expenses attributable to the Business as well as indirect expenses of Impinj.

Management believes the assumptions and allocations underlying the balance sheets and the related statements of operations are reasonable and appropriate under the circumstances. The expense allocations have been determined on a basis that is considered to be a reasonable reflection of the utilization of services provided or the benefit received by the Business during the periods presented. However, the amounts recorded for these transactions and allocations are not necessarily representative of the amounts that would have been reflected in the financial statements had the Business been an entity that operated independently of Impinj.

Notes the Financial Statements

4.	Property and Equipment

Property and equipment, net consisted of the following as of, December 31, 2006 and 2007:


	December 31, 2006			December 31, 2007
Computer equipment	$	54,630		$	85,036
Lab equipment		53,665			53,665

		108,295			138,701
Less: Accumulated depreciation		(61,267	)		(91,962	)

Property and Equipment, net	$	47,028		$	46,739

Depreciation expense was $22,558 and $21,742 for the years ended December 31, 2006 and 2007, respectively.

5.	Income Taxes

The Business operates as a business unit of Impinj, Inc. and as such its operating results have been included in Impinj’s U.S. federal income tax return. The provision for income taxes in these carve-out financial statements has been determined as if the business unit filed separate tax returns.

Impinj, Inc and the Business have incurred operating losses since inception. The Business believes sufficient uncertainty exists regarding its ability to realize the benefit of deferred tax assets such that a full tax valuation allowance is required. Accordingly, the accompanying carve-out statements of operations do not include any provision for current or deferred income taxes.

Deferred tax assets consisted of the following:


	December 31, 2006			December 31, 2007
Current deferred tax assets:
Deferred revenue	$	—		$	17,708
Compensation expense		3,804			24,483
Bad debts		19,533			20,492

Total current deferred tax assets		23,337			62,683
Non-current deferred tax assets:
Depreciation		4,182			6,798
Net operating losses		1,231,582			2,933,027

Total non-current deferred tax assets		1,235,764			2,939,825
Total gross deferred tax assets		1,259,101			3,002,508
Less: Valuation allowance		(1,259,101	)		(3,002,508	)

Net deferred tax assets	$	—		$	—

The Business is required to assess its deferred tax assets and the need for a valuation allowance on a separate return basis. This assessment requires judgment on the part of management with respect to benefits that may be realized from future book income, as well as other positive and negative factors. The Business has concluded, based upon this evidence, it would more likely than not that none of its deferred tax assets at December 31, 2006 and 2007 would have been realizable on a separate return basis. Therefore, a full valuation allowance has been recorded for the years presented.

Notes the Financial Statements

The Business has net operating loss carryforwards computed on a separate basis of approximately $3,622,300 and $8,626,550 as of December 31, 2006 and 2007 respectively. The Internal Revenue Code contains provisions that may limit the use of these losses in any given year. These Federal net operating loss carryforwards expire at various times between 2023 and 2027.

6.	Stock-Based Compensation

The Business participates in Impinj compensation programs. Stock-based compensation expense reflected in the accompanying financial statements relates to stock plan awards of Impinj and not stock awards of the Business.

Employee stock-based compensation expense recognized under SFAS 123(R) in the statements of operations for the years ended December 31, 2006 and 2007 and the unaudited three month period ended March 31, 2008 related to stock options was $11,188, 60,819 and $17,179 (unaudited), respectively. The stock-based compensation includes expenses directly attributable to the Business and an allocated amount from Impinj. Stock-based compensation expense recognized in the statement of operations is based on options ultimately expected to vest and has been reduced by an estimated forfeiture rate of 5%. The estimated grant date fair value of the Business’s stock-based awards, less expected forfeitures, is amortized over the awards’ vesting period on a straight-line basis.

Upon adoption of SFAS 123(R), Impinj selected the Black-Scholes option pricing model as the most appropriate model for determining the estimated fair value for stock-based awards. The use of the Black-Scholes option pricing model requires the use of extensive actual employee exercise behavior data and the use of a number of complex assumptions including expected volatility, risk-free interest rate and expected dividends. The following table summarizes the assumptions used to value options for the years ended December 31, 2006 and 2007:


		Assumptions
Stock option grants:
Expected term of stock options (years)		6.0 – 6.3 years
Risk-free interest rate		3.41% - 5.13%
Volatility		70%
Dividend yield		None

Impinj determined that the use of a pool of publicly traded competitors’ volatilities is more reflective of market conditions and an appropriate indicator of expected volatility in accordance with guidance in SFAS 123(R) and the Securities and Exchange Commission’s Staff Accounting Bulletin No. 107 “Share-Based Payments” (“SAB 107”).

The expected term of employee stock options represents the weighted-average period that the stock options are expected to remain outstanding. Impinj’s historical share option exercise experience does not provide a reasonable basis upon which to estimate expected term. In accordance with guidance in SFAS 123(R) and SAB 107, the Business used the “simplified” method for calculating expected term.

The risk-free interest rate assumption is based upon observed interest rates on United States government securities appropriate for the expected term of Impinj’s employee stock options. The dividend yield assumption is based on the Impinj’s history and expectation of dividend payouts. The Business has never declared or paid any cash dividends on its common stock, and the Business does not anticipate paying any cash dividends in the foreseeable future.

7.	Subsequent event

On June 26, Impinj entered into a definitive agreement to sell the non-volatile memory business to Virage Logic Corporation. The transaction was closed on June 26, 2008.

EX-99.2 4 dex992.htm UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION Unaudited pro forma condensed combined financial information

Exhibit 99.2

VIRAGE LOGIC CORPORATION

UNAUDITED COMBINED PRO FORMA FINANCIAL INFORMATION

On June 26, 2008, Virage Logic Corporation (the “Parent”), completed its acquisition of the non-volatile memory business unit of Impinj, Inc., (“the Business”). The following unaudited pro forma condensed combined balance sheet as of March 31, 2008 and the unaudited pro forma condensed combined statements of operations data for the six months ended March 31, 2008 and year ended September 30, 2007 are based on the historical consolidated financial statements of the Parent and the Business. The unaudited pro forma condensed combined financial statements are provided for informational purposes only. The pro forma financial statements are not necessarily indicative of what the combined Parent’s financial position or results of operations actually would have been had the acquisition been completed at the dates indicated below. In addition, the unaudited pro forma condensed combined financial statements do not purport to project the future financial position or operating results of the combined company. The unaudited pro forma condensed combined financial information has been prepared in accordance with the rules and regulations of the Securities and Exchange Commission. For pro forma purposes:

•

The Unaudited Pro Forma Condensed Combined Balance Sheet as of March 31, 2008, combines the historical consolidated balance sheets of the Parent as of March 31, 2008 and the Business as of March 31, 2008, giving effect to the acquisition as if it had occurred on March 31, 2008.

•

The Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended September 30, 2007 combines the historical consolidated statement of operations of the Parent for the year ended September 30, 2007 and the historical consolidated statement of operations of the Business for the year ended December 31, 2007, giving effect to the acquisition as if it had been completed on October 1, 2006. Although the respective fiscal year end periods of the Parent and Impinj are different, such periods end within 93 days of each other and, therefore, are combined for presentation as permitted under Rule 11.02 of Regulation S-X.

•

The Unaudited Pro Forma Condensed Combined Statement of Operations for the six months ended March 31, 2008, combines the historical consolidated statements of operations of the Parent for the six months ended March 31, 2008 and the Business for the six months ended March 31, 2008, giving effect to the acquisition as if it had been completed on October 1, 2007.

•

The in-process technology research and development (IPR&D) expense resulting from the acquisition has been excluded from the unaudited pro forma condensed combined consolidated statement of operations for the six months ended March 31, 2008 and the year ended September 30, 2007 due to its non-recurring nature.

These unaudited pro forma condensed combined financial statements and accompanying notes should be read in conjunction with the:

•

Separate historical financial statements of the Parent as of and for the year ended September 30, 2007 included in the Parent’s Annual Report on Form 10-K;

•

Separate historical financial statements of the Parent as of and for the six months ended March 31, 2008 included in the Parent’s Quarterly Report on Form 10-Q for the six month period ended March 31, 2008; and

•

Separate historical financial statements of the Business as of and for each of the years ended December 31, 2007 and December 31, 2006 included in this Current Report on Form 8-K/A.

VIRAGE LOGIC CORPORATION

UNAUDITED COMBINED PRO FORMA FINANCIAL INFORMATION

The unaudited pro forma condensed combined financial statements were prepared using the purchase method of accounting in accordance with SFAS No. 141. Accordingly, the historical consolidated financial information has been adjusted to give effect to the impact of the consideration paid in connection with the acquisition. In the Unaudited Pro Forma Condensed Combined Balance Sheet, the Parent’s cost to acquire the Business has been allocated to the assets acquired and liabilities assumed based upon their respective fair values as of the date of acquisition. The amounts allocated to the acquired assets and liabilities in the Unaudited Pro Forma Condensed Combined Balance Sheet are based on management estimates of fair value as of June 26, 2008, the completion date of the acquisition. A preliminary valuation of the intangible assets was used as the basis for management’s consideration of fair values of the intangible assets reflected in these unaudited pro forma condensed combined financial statements.

VIRAGE LOGIC CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF MARCH 31, 2008

(In thousands)


	Historical Parent March 31, 2008			NVM Business March 31, 2008			Pro forma			Note 2		Pro Forma Combined
ASSETS:
Current assets:
Cash and cash equivalents	$	22,566		$	—		$	(5,485	)	(b	)	$	17,081
Short-term investments		33,242			—			—					33,242
Accounts receivable, net		15,271			339			—					15,610
Costs in excess of related billings on uncompleted contracts		1,112			—			—					1,112
Current deferred tax assets		1,938			—			—					1,938
Prepaid expenses and other		3,634			215			—					3,849
Taxes receivable		2,565			—			—					2,565

Total current assets		80,328			554			(5,485	)				75,397
Equipment and leasehold improvements, net		3,785			40			—					3,825
Goodwill		11,369			—			191		(b	)		11,560
Other intangible assets, net		2,336			—			4,500		(b	)		6,836
Deferred tax assets		13,873			—			—					13,873
Long-term investments		20,628			—			—					20,628
Other long-term assets		301			—			—					301

Total assets	$	132,620		$	594		$	(794	)			$	132,420

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	626		$	—		$	—				$	626
Accrued expenses		4,565			—			—					4,565
Deferred revenue		8,738			851			(851	)	(a	)		8,738
Income taxes payable		2,834			—			—					2,834

Total current liabilities		16,763			851			(851	)				16,763
Deferred tax liabilities		978			—			—					978

Total liabilities		17,741			851			(851	)				17,741

Commitments and contingencies Stockholders’ equity:
Common stock		24			—			—					24
Due to parent company		—			9,627			(9,627	)	(d	)		—
Additional paid-in capital		138,598			—			—					138,598
Accumulated other comprehensive income		1,272			—			—					1,272
Accumulated deficit		(25,015	)		(9,884	)		9,884		(d	)		(25,015	)
		—			—			(200	)	(b	)		(200	)

Total stockholders’ equity (deficit)		114,879			(257	)		57					114,679

Total liabilities and stockholders’ equity	$	132,620		$	594		$	(794	)			$	132,420

See notes to the unaudited pro forma condensed combined financial statements.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED SEPTEMBER 30, 2007

(In thousands)


	Historical Parent September 30, 2007			NVM Business December 31, 2007			Pro forma			Note 2		Pro Forma Combined
Revenues:
License	$	34,379		$	1,362		$	562		(e	)	$	36,303
Services		—			562			(562	)	(e	)		—
Royalties		12,148			398			—					12,546

Total revenues		46,527			2,322			—					48,849

Cost and expenses:
Cost of revenues		12,938						733		(c	)		13,671
Research and development		20,346			3,938			—					24,284
Sales and marketing		15,464			1,494			—					16,958
General and administrative		8,891			2,068			—					10,959
Restructuring charges		580			—			—					580

Total cost and expenses		58,219			7,500			733					66,452

Operating loss		(11,692	)		(5,178	)		(733	)				(17,603	)
Interest income and other income (expenses), net		3,845			—			—					3,845

Income (loss) before income taxes		(7,847	)		(5,178	)		(733	)				(13,758	)
Income tax provision (benefit)		(3,242	)		—			—					(3,242	)

Net loss	$	(4,605	)	$	(5,178	)	$	(733	)			$	(10,516	)

Basic and Diluted	$	(0.20	)									$	(0.46	)

Number of weighted average shares (Note 3)		23,111											23,111

See notes to the unaudited pro forma condensed combined financial statements.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED MARCH 31, 2008

(In thousands)


	Historical Parent March 31, 2008			NVM Business March 31, 2008			Pro forma			Note 2		Pro Forma Combined
Revenues:
License	$	22,874		$	1,090		$	247		(e	)	$	24,211
Services		—			247			(247	)	(e	)		—
Royalties		5,875			27			—					5,902

Total revenues		28,749			1,364			—					30,113

Cost and expenses:
Cost of revenues		5,568			—			367		(c	)		5,935
Research and development		12,033			2,105			—					14,138
Sales and marketing		7,457			726			—					8,183
General and administrative		3,886			758			—					4,644
Restructuring charges		(3	)		—			—					(3	)

Total cost and expenses		28,941			3,589			367					32,897

Operating loss		(192	)		(2,225	)		(367	)				(2,784	)
Interest income and other income (expenses), net		1,934			—			—					1,934

Income (loss) before income taxes		1,742			(2,225	)		(367	)				(850	)
Income tax provision (benefit)		18			—			—					18

Net income (loss)	$	1,724		$	(2,225	)	$	(367	)			$	(868	)

Basic and Diluted	$	0.07										$	(0.04	)

Basic weighted average shares (Note 3)		23,466											23,466

Diluted weighted average shares (Note 3)		23,730											23,466

See notes to the unaudited pro forma condensed combined financial statements.

VIRAGE LOGIC CORPORATION

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

1.	Purchase price:

On June 26, 2008, Virage Logic Corporation completed its acquisition of the non-volatile memory business unit of Impinj for $5.2 million. In addition, the Parent incurred legal and accounting fees and transaction costs for a total of $0.3 million related to the acquisition. The following tables summarize the components of the total purchase price and the estimated allocation (in thousands):


	Allocation
Total cash consideration for assets	$	5,200
Legal and accounting fees		250
Other transactional costs		35

Total estimated purchase price	$	5,485

The following table summarizes the preliminary allocation of the purchase price as if purchased at March 31, 2008 subject to adjustments as management of Virage Logic Corporation obtains more information about the acquired net assets of the Business (in thousands):


Existing technology	$	2,500
In-process technology (IPR&D)		200
Patents/Core technology		1,300
Customer contracts and related relationships		400
Trade name/Trademarks/Domain Name		300
Goodwill		191
Net assets		594

Total	$	5,485

2.	Pro forma adjustments:

(a)

To adjust to fair value the Business’s deferred revenue as of March 31, 2008 in accordance with EITF 01-3, “Accounting in a Business Combination for Deferred Revenue of an Acquiree”.

(b)

To reflect the preliminary purchase price including consideration paid to Impinj and transactional costs of $5.5 million due to the acquisition, as shown above. The preliminary purchase price has been allocated to the fair value of identifiable intangible assets based on preliminary independent valuation, consisting of core technology, existing technology, tradename, and customer relationship of $4.5 million, to in-process research and development charges of $0.2 million, and to net tangible assets of $0.6 million. The excess of purchase price over the net fair value of the tangible and intangible assets acquired and liabilities assumed resulted in goodwill of $0.2 million.

(c)

To record amortization of purchased intangibles of $0.4 million and $0.7 million for the six months ended March 31, 2008 and for the year ended September 30, 2007, respectively, using an estimated life of six years for all intangible assets except for trade name and trademarks which estimated life is nine years.

(d)

To eliminate the Business’s historical equity accounts and accumulated deficit in accordance with SFAS No. 141 “Business Combinations”.

(e)

To record the reclassification of the Business historical financials to conform to the presentation of the Parent.

3.	Unaudited pro forma combined net loss per share:

The unaudited pro forma combined basic and diluted loss per common share is computed by dividing the pro form combined net loss by the Parent’s historical weighted average number of common shares outstanding.

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