UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
§ 240.13d-2(a)
(Amendment No. )1
Sigma Designs, Inc.
(Name of Issuer)
Common Stock, no par value
(Title of Class of Securities)
826565103
(CUSIP Number)
Paul J. Solit
POTOMAC CAPITAL MANAGEMENT LLC
825 Third Avenue, 33rd Floor
New York, New York 10022
With copies to:
STEVEN WOLOSKY, ESQ.
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
Park Avenue Tower
65 East 55th Street
New York, New York 10022
(212) 451-2300
(Name, Address and Telephone Number of PersonAuthorized to Receive Notices and Communications)
March 14, 2012
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.
_______________
1 The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
CUSIP NO. 826565103
| 1 | NAME OF REPORTING PERSON POTOMAC CAPITAL PARTNERS III, L.P. | ||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) o (b) o | |
| 3 | SEC USE ONLY | ||
| 4 | SOURCE OF FUNDS WC, OO | ||
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) | ¨ | |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE | ||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER - 0 - | |
| 8 | SHARED VOTING POWER 1,319,864 | ||
| 9 | SOLE DISPOSITIVE POWER - 0 - | ||
| 10 | SHARED DISPOSITIVE POWER 1,319,864 | ||
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,319,864 | ||
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES | o | |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 4.1% | ||
| 14 | TYPE OF REPORTING PERSON PN | ||
2
CUSIP NO. 826565103
| 1 | NAME OF REPORTING PERSON POTOMAC CAPITAL MANAGEMENT III, L.L.C. | ||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) o (b) o | |
| 3 | SEC USE ONLY | ||
| 4 | SOURCE OF FUNDS AF | ||
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) | ¨ | |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE | ||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER - 0 - | |
| 8 | SHARED VOTING POWER 1,319,864 | ||
| 9 | SOLE DISPOSITIVE POWER - 0 - | ||
| 10 | SHARED DISPOSITIVE POWER 1,319,864 | ||
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,319,864 | ||
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES | o | |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 4.1% | ||
| 14 | TYPE OF REPORTING PERSON OO | ||
3
CUSIP NO. 826565103
| 1 | NAME OF REPORTING PERSON POTOMAC CAPITAL PARTNERS L.P. | ||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) o (b) o | |
| 3 | SEC USE ONLY | ||
| 4 | SOURCE OF FUNDS WC | ||
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) | ¨ | |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE | ||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER - 0 - | |
| 8 | SHARED VOTING POWER 401,278 | ||
| 9 | SOLE DISPOSITIVE POWER - 0 - | ||
| 10 | SHARED DISPOSITIVE POWER 401,278 | ||
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 401,278 | ||
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES | o | |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.2% | ||
| 14 | TYPE OF REPORTING PERSON PN | ||
4
CUSIP NO. 826565103
| 1 | NAME OF REPORTING PERSON POTOMAC CAPITAL MANAGEMENT, L.L.C. | ||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) o (b) o | |
| 3 | SEC USE ONLY | ||
| 4 | SOURCE OF FUNDS AF | ||
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) | ¨ | |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE | ||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER - 0 - | |
| 8 | SHARED VOTING POWER 401,278 | ||
| 9 | SOLE DISPOSITIVE POWER - 0 - | ||
| 10 | SHARED DISPOSITIVE POWER 401,278 | ||
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 401,278 | ||
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES | o | |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.2% | ||
| 14 | TYPE OF REPORTING PERSON OO | ||
5
CUSIP NO. 826565103
| 1 | NAME OF REPORTING PERSON PAUL J. SOLIT | ||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) o (b) o | |
| 3 | SEC USE ONLY | ||
| 4 | SOURCE OF FUNDS AF | ||
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) | ¨ | |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION USA | ||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER - 0 - | |
| 8 | SHARED VOTING POWER 1,721,142 | ||
| 9 | SOLE DISPOSITIVE POWER - 0 - | ||
| 10 | SHARED DISPOSITIVE POWER 1,721,142 | ||
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,721,142 | ||
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES | o | |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.3% | ||
| 14 | TYPE OF REPORTING PERSON IN | ||
6
CUSIP NO. 826565103
| 1 | NAME OF REPORTING PERSON ERIC SINGER | ||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) o (b) o | |
| 3 | SEC USE ONLY | ||
| 4 | SOURCE OF FUNDS AF | ||
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) | ¨ | |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION USA | ||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER - 0 - | |
| 8 | SHARED VOTING POWER 1,319,864 | ||
| 9 | SOLE DISPOSITIVE POWER - 0 - | ||
| 10 | SHARED DISPOSITIVE POWER 1,319,864 | ||
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,319,864 | ||
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES | o | |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 4.1% | ||
| 14 | TYPE OF REPORTING PERSON IN | ||
7
CUSIP NO. 826565103
The following constitutes the Schedule 13D filed by the undersigned (the “Schedule 13D”).
| Item 1. | Security and Issuer. |
This statement relates to common stock, no par value (the “Shares”), of Sigma Designs, Inc., a California corporation (the “Issuer”). The address of the principal executive offices of the Issuer is 1778 McCarthy Blvd, Milpitas, California 95035.
| Item 2. | Identity and Background. |
(a) This statement is filed by Potomac Capital Partners III, L.P., a Delaware limited partnership (“PCP III”), Potomac Capital Management III, L.L.C., a Delaware limited liability company (“Potomac Management III”), Potomac Capital Partners L.P., a Delaware limited partnership (“PCP”), Potomac Capital Management, L.L.C., a Delaware limited liability company (“Potomac Management”), Paul J. Solit and Eric Singer. Each of the foregoing is referred to as a “Reporting Person” and collectively as the “Reporting Persons.” Each of the Reporting Persons is party to that certain Joint Filing Agreement as further described in Item 6. Accordingly, the Reporting Persons are hereby filing a joint Schedule 13D.
(b) The address of the principal office of each of the Reporting Persons is 825 Third Ave, 33rd Floor, New York, New York 10022.
(c) The principal business of PCP III is investing in securities. The principal business of Potomac Management III is acting as the general partner of PCP III. The principal business of PCP is investing in securities. The principal business of Potomac Management is acting as the general partner of PCP. The principal occupation of Mr. Solit is serving as the co-managing member of Potomac Management III and as the managing member of Potomac Management. The principal occupation of Mr. Singer is serving as the co-managing member of Potomac Management III.
(d) No Reporting Person has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) No Reporting Person has, during the last five years, been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
(f) Each of PCP III, Potomac Management III, PCP and Potomac Management are organized under the laws of the State of Delaware. Messrs. Solit and Singer are citizens of the United States of America.
| Item 3. | Source and Amount of Funds or Other Consideration. |
The aggregate purchase price of the 1,319,864 Shares owned directly by PCP III is approximately $6,771,356, including brokerage commissions. Of the 1,319,864 Shares owned directly by PCP III, 373,700 Shares were contributed by limited partners to PCP III pursuant to its limited partnership agreement and 946,164 Shares were acquired with its working capital.
8
CUSIP NO. 826565103
The aggregate purchase price of the 401,278 Shares owned directly by PCP is approximately $2,275,995, including brokerage commissions. The Shares owned directly by PCP were acquired with its working capital.
PCP III and PCP each effect purchases of securities primarily through margin accounts maintained for them with prime brokers, which may extend margin credit to them as and when required to open or carry positions in the margin accounts, subject to applicable federal margin regulations, stock exchange rules and the prime brokers’ credit policies. In such instances, the positions held in the margin accounts are pledged as collateral security for the repayment of debit balances in the accounts.
| Item 4. | Purpose of Transaction. |
The Reporting Persons purchased the Shares based on the Reporting Persons’ belief that the Shares, when purchased, were undervalued and represented an attractive investment opportunity. Depending upon overall market conditions, other investment opportunities available to the Reporting Persons, and the availability of Shares at prices that would make the purchase or sale of Shares desirable, the Reporting Persons may endeavor to increase or decrease their position in the Issuer through, among other things, the purchase or sale of Shares on the open market or in private transactions or otherwise, on such terms and at such times as the Reporting Persons may deem advisable.
No Reporting Person has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D except as set forth herein or such as would occur upon completion of any of the actions discussed herein. The Reporting Persons intend to review their investment in the Issuer on a continuing basis. Depending on various factors including, without limitation, the Issuer’s financial position and investment strategy, the price levels of the Shares, conditions in the securities markets and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation, seeking Board representation, engaging in communications with management and the Board of the Issuer, engaging in discussions with stockholders of the Issuer and others about the Issuer and the Reporting Persons’ investment, making proposals to the Issuer concerning changes to the capitalization, ownership structure or operations of the Issuer, purchasing additional Shares, selling some or all of their Shares, engaging in short selling of or any hedging or similar transaction with respect to the Shares, or changing their intention with respect to any and all matters referred to in Item 4.
| Item 5. | Interest in Securities of the Issuer. |
(a) The aggregate percentage of Shares reported owned by each Reporting Person is based upon 32,227,881 Shares outstanding, which is the total number of Shares outstanding as of November 30, 2011, as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on December 8, 2011.
As of 2:30 p.m. EDT on the date hereof, PCP III beneficially owned 1,319,864 Shares, constituting approximately 4.1% of the Shares outstanding. By virtue of their relationships with PCP III discussed in further detail in Item 2, each of Potomac Management III and Messrs. Solit and Singer may be deemed to beneficially own the Shares beneficially owned by PCP III.
As of 2:30 p.m. EDT on the date hereof, PCP beneficially owned 401,278 Shares, constituting approximately 1.2% of the Shares outstanding. By virtue of their relationships with PCP discussed in further detail in Item 2, each of Potomac Management and Mr. Solit may be deemed to beneficially own the Shares beneficially owned by PCP.
9
CUSIP NO. 826565103
(b) PCP III, Potomac Management III and Messrs. Solit and Singer share the power to vote and dispose of the Shares beneficially owned by PCP III. PCP, Potomac Management and Mr. Solit share the power to vote and dispose of the Shares beneficially owned by PCP.
(c) Schedule A annexed hereto lists all transactions in the Shares during the past sixty days by the Reporting Persons. All of such transactions were effected in the open market, except as otherwise noted.
(d) No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, the Shares.
(e) Not applicable.
The filing of this Schedule 13D shall not be construed as an admission that the Reporting Persons are, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, the beneficial owners of any of the securities reported herein. Each of the Reporting Persons specifically disclaims beneficial ownership of the securities reported herein that are not directly owned by such Reporting Person, except to the extent of their pecuniary interest therein.
| Item 6. | Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. |
On March 14, 2012, PCP III, Potomac Management III, PCP, Potomac Management and Messrs. Solit and Singer entered into a Joint Filing Agreement (the “Joint Filing Agreement”) in which the parties agreed to the joint filing on behalf of each of them of statements on Schedule 13D with respect to the securities of the Issuer to the extent required by applicable law. The Joint Filing Agreement is attached as an exhibit hereto and is incorporated herein by reference.
Other than as described herein, there are no contracts, arrangements, understandings or relationships among the Reporting Persons, or between the Reporting Persons and any other person, with respect to the securities of the Issuer.
| Item 7. | Material to be Filed as Exhibits. |
| 99.1 | Joint Filing Agreement by and among Potomac Capital Partners III, L.P., Potomac Capital Management III, L.L.C., Potomac Capital Partners L.P., Potomac Capital Management, L.L.C., Paul J. Solit and Eric Singer, dated March 14, 2012. |
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CUSIP NO. 826565103
SIGNATURES
After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
| Dated: March 14, 2012 | POTOMAC CAPITAL PARTNERS III, L.P. | |
| By: | Potomac Capital Management III, L.L.C. | |
| General Partner | ||
| By: | /s/ Paul J. Solit | |
| Name: | Paul J. Solit | |
| Title: | Co-Managing Member | |
| POTOMAC CAPITAL MANAGEMENT III, L.L.C. | ||
| By: | /s/ Paul J. Solit | |
| Name: | Paul J. Solit | |
| Title: | Co-Managing Member | |
| POTOMAC CAPITAL PARTNERS L.P. | ||
| By: | Potomac Capital Management, L.L.C. | |
| General Partner | ||
| By: | /s/ Paul J. Solit | |
| Name: | Paul J. Solit | |
| Title: | Managing Member | |
| POTOMAC CAPITAL MANAGEMENT, L.L.C. | ||
| By: | /s/ Paul J. Solit | |
| Name: | Paul J. Solit | |
| Title: | Managing Member | |
/s/ Paul J. Solit | |
| PAUL J. SOLIT |
/s/ Eric Singer | |
| ERIC SINGER |
11
CUSIP NO. 826565103
SCHEDULE A
Transactions in the Shares During the Past 60 Days
Shares of Common Stock Purchased | Price Per Share($) | Date of Purchase |
POTOMAC CAPITAL PARTNERS III, L.P.
| 22,000 | 5.2854 | 3/6/2012 | |
186,8501 | 5.2200 | 3/7/2012 | |
186,8501 | 5.2200 | 3/7/2012 | |
| 11,600 | 5.3859 | 3/7/2012 | |
| 555,000 | 4.9138 | 3/8/2012 | |
| 36,385 | 4.9199 | 3/9/2012 | |
| 30,760 | 4.9891 | 3/12/2012 | |
| 198 | 4.9891 | 3/12/2012 | |
| 44,064 | 5.1779 | 3/12/2012 | |
| 105,814 | 5.3985 | 3/13/2012 | |
| 140,343 | 5.5271 | 3/14/2012 |
POTOMAC CAPITAL MANAGEMENT III, L.L.C.
None
POTOMAC CAPITAL PARTNERS L.P.
| 20,000 | 5.8900 | 1/26/2012 | |
| 25,000 | 5.9019 | 1/27/2012 | |
| 2,300 | 5.9291 | 1/30/2012 | |
1,3002 | 5.9300 | 1/31/2012 | |
| 3,000 | 5.9833 | 2/1/2012 | |
| 100 | 6.0200 | 2/2/2012 | |
| 18,000 | 6.0482 | 2/2/2012 | |
| 2,900 | 5.9700 | 2/3/2012 | |
| 4,100 | 6.0334 | 2/6/2012 | |
| 4,000 | 6.0325 | 2/7/2012 | |
| 50,000 | 6.0766 | 2/7/2012 |
1 Shares contributed by a limited partner to Potomac Capital Partners III, L.P. pursuant to its limited partnership agreement.
CUSIP NO. 826565103
| 5,100 | 5.8935 | 2/8/2012 | |
| 10,000 | 5.9500 | 2/9/2012 | |
| 25,000 | 5.9500 | 2/9/2012 | |
| 18,800 | 5.8139 | 2/10/2012 | |
| 2,443 | 5.8308 | 2/13/2012 | |
| 3,400 | 5.8940 | 2/17/2012 | |
| 19,100 | 5.7027 | 2/22/2012 | |
| 1,000 | 5.5300 | 2/23/2012 | |
| 11,500 | 5.6800 | 2/24/2012 | |
| 400 | 5.5300 | 2/27/2012 | |
| 5,500 | 5.8487 | 2/29/2012 | |
| 21,000 | 5.5721 | 3/2/2012 | |
| 15,000 | 5.4113 | 3/5/2012 | |
| 25,000 | 4.9138 | 3/8/2012 | |
| 10,915 | 4.9199 | 3/9/2012 | |
| 13,236 | 5.1779 | 3/12/2012 | |
| 9,240 | 4.9891 | 3/12/2012 | |
| 31,786 | 5.3985 | 3/13/2012 | |
| 42,158 | 5.5271 | 3/14/2012 |
POTOMAC CAPITAL MANAGEMENT, L.L.C.
None
PAUL J. SOLIT
None
ERIC SINGER
None