UNITED STATES
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) MAY 14, 1998
-------------------------------
TRIKON TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
CALIFORNIA 0-26482 95-4054321
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
RINGLAND WAY, NEWPORT, GWENT, UNITED KINGDOM NP6 2TA
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 44 1 633 414 000
-----------------------------
- -------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
ITEM 5. OTHER EVENTS
On April 14, 1998, Trikon Technologies, Inc. (the "Company" or "Trikon")
commenced an exchange offer (the ``Exchange Offer'') for all of its outstanding
7-1/8% Convertible Subordinated Notes due 2001 (the ``Convertible Notes''),
Series G Preferred Stock (the ``Series G Preferred Stock'') and warrants issued
in connection with the issuance of Series G Preferred Stock (the ``Warrants'').
The Exchange Offer expired at 5:00 p.m., New York City time, on May 14, 1998,
and immediately thereafter, the Company accepted for exchange or conversion all
validly tendered Convertible Notes, Series G Preferred Stock and Warrants.
$82,103,000 principal amount of Convertible Notes (approximately 95% of the
aggregate principal amount outstanding), 2,873,143 shares of Series G Preferred
Stock (approximately 97% of the total shares outstanding) and 866,388 Warrants
(approximately 97% of the Warrants outstanding) had been validly tendered for
exchange. Because more than two-thirds of the outstanding shares of Series G
Preferred Stock tendered, in accordance with the terms of the Certificate of
Determination of the Company establishing the rights, preferences and privileges
of the Series G Preferred Stock, all other outstanding shares of Series G
Preferred Stock automatically converted into shares of Common Stock. The
$82,103,000 principal amount of Convertible Notes tendered have been exchanged
for approximately 22.7 million shares of the Company's Common Stock (the
``Common Stock''), approximately 2.86 million shares of the Company's Series H
Preferred Stock, $10 stated amount per share (the "Series H Preferred Stock"),
and approximately 29,300 shares of Series I Junior Participating Preferred Stock
(the "Series I Preferred Stock"). The shares of Series G Preferred Stock and
Warrants have been converted and exchanged for approximately 7.2 million shares
of Common Stock and approximately 8,000 shares of the Series I Preferred Stock.
The Series H Preferred Stock is redeemable at the option of the Company for cash
at a redemption price equal to the stated amount and the holders of the Series H
Preferred Stock are entitled to receive dividends at an annual rate of 8-1/8% of
the stated amount payable annually, at the option of the Company, in cash or
additional shares of preferred stock or any combination thereof. Each share of
Series H Preferred Stock is subject to automatic conversion if the Common Stock
price reaches certain levels. Holders of Series H Preferred Stock are entitled
to elect one director if the Board of Directors of the Company is constituted of
five or fewer members and two directors if the Board of Directors of the Company
is constituted of more than five members. If the Series H Preferred Stock is not
redeemed by June 30, 2001 or at such earlier date the Company's cash exceeds a
certain amount, holders of Series H Preferred Stock shall be entitled to elect
the number of directors that would constitute a majority of the Board of
Directors. The Company intends to call a special meeting of shareholders to
approve an amendment (the ``Charter Amendment'') to the Articles of
Incorporation of the Company to provide for an increase in the number of
authorized shares of Common Stock. Upon approval of the Charter Amendment, each
share of Series I Preferred Stock will automatically convert into 1,000 shares
of Common Stock. In connection with the consummation of the Exchange Offer, the
Company has agreed to issue 5.0 million shares of restricted Common Stock and
6,476 shares of restricted Series I Preferred Stock to the Company's Chairman of
the Board and Chief Executive Officer. Upon conversion of the Series I Preferred
Stock, the issuance will represent approximately 11,500,000 shares or 12% of the
outstanding Common Stock.
In connection with the Exchange Offer, the Company solicited the consent of
holders of the Convertible Notes to certain proposed amendments to the Indenture
dated October 7, 1996, between the Company and U.S. Trust Company of California,
N.A., as trustee (the "Trustee"), and the termination of the Registration
Agreement among the Company, Salomon Brothers Inc and Unterberg Harris. Upon the
expiration of the Exchange Offer, the Company entered into a Supplemental
Indenture with the Trustee, which became operative upon the acceptance by the
Company of the tendered Convertible Notes. The Supplemental Indenture, among
other things, deleted certain "Events of Default" under the Indenture and the
"Designated Event" covenant of the Indenture and amended the "Limitations on
Suits" provisions to require at least a majority in principal amount of the then
outstanding Convertible Notes to make a request to the Trustee. Upon acceptance
of the tendered Notes, the Registration Agreement terminated, thereby
terminating the Company's obligation to register under the Securities Act of
1933, as amended, the Convertible Notes and the underlying Common Stock into
which such Convertible Notes are convertible.
As outlined in the offering documents disseminated in connection with the
Exchange Offer, the Company did not pay interest of $3.3 million accrued and
due on April 15, 1998. Interest was paid on May 15, 1998 to the holders of
Convertible Notes which did not accept the Exchange Offer. In accordance with
the terms of the Exchange Offer, any accrued and unpaid interest on Convertible
Notes accepted in the Exchange Offer will not be paid and will be included in
the calculation of the profit or loss arising on the exchange of the Convertible
Notes.
2.
The Exchange Offer will be accounted for under SFAS No. 15, "Troubled Debt
Restructuring."
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA OF TRIKON
The unaudited pro forma financial information presented below should be read
in conjunction with the notes thereto, as set forth below, and the separate
financial statements of Trikon, and Trikon Technologies Limited and Trikon
Equipments Limited (collectively, "Trikon Limited") included in the Company's
Annual Report on Form 10-K for fiscal year ended December 31, 1997 (the
"1997 Form 10-K").
The accompanying unaudited pro forma financial data includes the following
unaudited pro forma financial statements:
1. Unaudited pro forma condensed consolidated statement of operations for
the year ended December 31, 1997 reflecting the pro forma effects of the
restructuring and related events ("Unaudited Pro Forma Statement of Operations
No. 1")
2. Unaudited pro forma condensed consolidated statement of operations for
the year ended December 31, 1997 reflecting the pro forma effects of the
restructuring and related events and the Exchange Offer ("Unaudited Pro Forma
Statement of Operations No. 2"); and
3. Unaudited pro forma condensed consolidated statement of operations for
the quarter ended March 31, 1998 reflecting the pro forma effects of the
Exchange Offer ("Unaudited Pro Forma Statement of Operations No. 3"); and
4. Unaudited pro forma condensed consolidated balance sheet as of March
31, 1998 reflecting the pro forma effects of the Exchange Offer ("Unaudited
Pro Forma Balance Sheet").
The accompanying Unaudited Pro Forma Statement of Operations No. 1 gives effect
to 1) the repayment and termination of the Company's working capital facility
(the "Working Capital Facility"), 2) the closure of the Company's Etch
operations in its Chatsworth, California location and related asset impairment
charges and 3) certain other restructuring costs including the write-down of
intangible assets/values, as a result of recent and projected revenues,
continuing losses and negative cash flows, which indicate the intangible assets
have become impaired, as if they had occurred as of January 1, 1997.
Accordingly, the Unaudited Pro Forma Statement of Operations No. 1 excludes the
results of operations of the Company's Etch operations, includes certain
adjustments to reduce amortization expense related to the write-off of
intangible assets and the related tax effect, and reduces interest expense
reflecting the pay off of the Working Capital Facility.
Following the completion of the restructuring of the Company's operations, the
remaining business will consist primarily of the worldwide operations of Trikon
Limited, the business acquired by Trikon on November 15, 1996 with headquarters
located in the United Kingdom.
The following Unaudited Pro Forma Balance Sheet of Trikon, the Unaudited Pro
Forma Statement of Operations No. 2 and Unaudited Pro Forma Statement of
Operations No. 3 have been prepared to illustrate the effect of the Exchange
Offer. The financial statements have been prepared as though the Exchange Offer
had occurred on March 31, 1998 for purposes of the Unaudited Pro Forma Balance
Sheet and as of January 1, 1997 and 1998 for purposes of the Unaudited Pro Forma
Statement of Operations No. 2 and Unaudited Pro Forma Statement of Operations
No. 3, respectively. The pro forma adjustments and the assumptions on which they
are based are described in the accompanying notes to the unaudited pro forma
financial statements.
The unaudited pro forma condensed consolidated financial statements are
presented for illustrative purposes only and are not necessarily indicative of
the consolidated financial position or results of operations of Trikon that
would have been reported had the restructuring and related events or the
Exchange Offer occurred on the dates indicated, nor do they represent a
forecast of the consolidated financial position of Trikon at any future date
or the consolidated results of operations of Trikon for any future period.
Amounts representing the number of shares and fair market value of common and
preferred stock, and the amount of transaction fees and other assumptions as
reflected in the accompanying pro forma financial statements, are preliminary.
3.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS NO. 1
OF TRIKON
YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT FOR SHARE DATA)
PRO FORMA
ADJUSTMENTS
REMOVE SHUT DOWN
HISTORICAL ETCH ETCH PRO FORMA
CONSOLIDATED(1)(7) OPERATIONS(2) DIVISION CONSOLIDATED(7)
------------------ ------------- ----------- ---------------
Total revenues.......... $ 85,109 $(8,803) $(29,500)(3) $ 46,806
Costs and expenses
Cost of goods sold..... 61,974 (8,095) (20,735)(3) 33,144
Research and
development........... 17,033 (7,847) -- 9,186
Selling, general and
administrative........ 34,734 (13,741) -- 20,993
Amortization of
intangibles........... 3,116 -- (3,116)(4) --
Purchased in-process
technology............ 2,975 (2,975) -- --
Restructuring costs.... 18,273 -- (18,273)(3) --
Impairment write-downs. 44,135 -- (44,135)(3) --
--------- ------- -------- --------
182,240 (32,658) (86,259) 63,323
--------- ------- -------- --------
Loss from operations... (97,131) 23,855 56,759 (16,517)
Interest expense, net.. (11,394) -- 3,106 (5) (8,288)
--------- ------- -------- --------
Loss before income tax
provision (benefit)... (108,525) 23,855 59,865 (24,805)
Income tax provision
(benefit)............. (9,248) -- 9,540 (6) 292
--------- ------- -------- --------
Net loss............... $ (99,277) $23,855 $ 50,325 $(25,097)
========= ======= ======== ========
Net loss per share
basic and diluted..... $ (6.71) $ (1.70)
========= ========
Number of shares used
in per share
computation........... 14,800 14,800
========= ========
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
NO. 1 OF TRIKON
(1) As presented in the Consolidated Financial Statements included in the
Company's 1997 Form 10-K.
(2) Removes the operations of the Company's Etch operations in Chatsworth,
California, except for ongoing corporate cost of approximately $750,000.
(3) Removes the restructuring cost and asset impairment write-downs and the
license revenues from the sale of the MORI(TM) source and Forcefill(R) PVD
technologies licenses.
(4) Represents a reduction in amortization expense related to the write-down
of intangible assets discussed above.
(5) Represents a reduction in interest expense resulting from the assumed
repayment of the Working Capital Facility as of January 1, 1997 and the
removal of financing cost written off calculated as follows:
Working Capital Facility paid off................ $14,261
Interest rate in effect during period............ 10%
-------
Reduced interest expense......................... 1,426
Write off of financing cost...................... 1,680
-------
$ 3,106
=======
(6) Represents the removal of the tax effect of the amortization adjustment and
write-off of a deferred tax liability which was established when the Company
acquired Trikon Limited in November 1996, for the difference in the book and
tax basis of the assets primarily consisting of intangible assets.
Accordingly, the write-off of such intangible assets directly impacts the
deferred tax liability and creates a deferred income tax benefit.
(7) Includes approximately $5.2 million effect (charged to cost of goods sold)
associated with the APB No. 16 write-up of Trikon Limited inventory.
4.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS NO. 2
OF TRIKON
YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT FOR SHARE DATA)
HISTORICAL EXCHANGE PRO FORMA
CONSOLIDATED(1)(7) OFFER CONSOLIDATED(7)
------------------ -------- ---------------
Total revenues........................ $ 46,806 $ -- $ 46,806
Costs and expenses
Cost of goods sold................... 33,144 -- 33,144
Research and development............. 9,186 -- 9,186
Selling, general and administrative.. 20,993 1,517 (2) 22,510
-------- ------- --------
63,323 1,517 64,840
-------- ------- --------
Loss from operations................. (16,517) (1,517) (18,034)
Interest expense, net................ (8,288) 7,144 (3) (1,144)
-------- ------- --------
Loss before income tax provision..... (24,805) 5,627 (19,178)
Income tax provision................. 292 -- 292
-------- ------- --------
Loss before extraordinary item........ $(25,097) $ 5,627 $(19,470)
======== ======= ========
Loss before extraordinary item
per share basic and diluted (4)..... $ (1.70) $ (0.27)
======== ========
Number of shares used in per share
computation......................... 14,800 67,083 (4) 81,883
======== ======= ========
- --------
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
NO. 2 OF TRIKON
(1) Represents unaudited pro forma consolidated condensed statement of
operations reflecting the effects of the restructuring and related events
derived from the Unaudited Pro Forma Statement of Operations No. 1 of
Trikon.
(2) Represents compensation expense recognized based on the vesting of the
restricted Common Stock to be issued to the Company's Chairman of the
Board and Chief Executive Officer. The Common Stock issued to the Chairman
of the Board and Chief Executive Officer becomes 100% vested after five
years. This amount represents 20% of the total fair market value of the
restricted Common Stock issuance, based on recent quoted market prices
(i.e., $0.66 per share) of the Company's Common Stock on the date of
consummation of the Exchange Offer.
(3) Adjustment to interest expense to give effect to Exchange Offer at the
beginning of period presented computed as follows:
Notes................................ $82,103
Interest rate........................ 7.625%
-------
6,260
Amortization of financing cost....... 884
-------
$ 7,144
=======
(4) Loss per share and weighted average shares outstanding are presented as if
the 51.9 million shares of common stock to be issued to the holders of the
Notes, 11.5 million shares of restricted Common Stock to be issued to the
Chairman of the Board and Chief Executive Officer of the Company and 15.2
million shares of Common Stock to be issued to the holders of the Series G
Preferred Stock and the Warrants in the Exchange Offer as consummated were
issued as of January 1, 1997. The net loss has been increased by $2.3
million, representing one year of dividends on the Series H Preferred Stock,
for purposes of calculating the basic and diluted net loss per share. All of
the restricted Common Stock to be issued to the Company's Chairman of the
Board and Chief Executive Officer have been excluded from the basic earnings
per share computation because the restrictions would not have lapsed during
the one year period. The 11.5 million shares of restricted Common Stock
issued to the Company's Chairman of the Board and Chief Executive Officer
have been excluded from diluted loss per share because they are anti-
dilutive.
The Unaudited Pro Forma Statement of Operations No. 2 of Trikon does not
reflect a bonus payable to the Company's Chairman of the Board and Chief
Executive Officer in the amount of $1.5 million payable upon the achievement
of certain profitability levels and the occurrence of certain other events.
This bonus will be reflected as a charge to earnings when it is probable that
the profitability levels will be achieved and the other events will occur.
The gain resulting from the Exchange Offer will be reflected as an
extraordinary item in the quarter ended June 30, 1998. The gain is excluded from
the Unaudited Pro Forma Statement of Operations No. 2.
5.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS NO. 3
QUARTER ENDED MARCH 31, 1998
(IN THOUSANDS OF U.S. DOLLARS, EXCEPT SHARE AND PER SHARE DATA)
EXCHANGE PRO FORMA
CONSOLIDATED(1) OFFER CONSOLIDATED
--------------- ------------ ------------
Total revenues........................ $ 17,203 $ -- $ 17,203
Costs and expenses
Cost of goods sold................... 4,635 -- 4,635
Research and development............. 2,036 -- 2,036
Selling, general and administrative.. 4,803 379 (2) 5,181
Amortization of intangibles.......... 1 -- 1
----------- ----------- -----------
11,474 379 11,853
----------- ----------- -----------
Income from operations............... 5,729 (379) 8,350
Interest expense, net................ (1,941) 1,744 (3) (197)
----------- ----------- -----------
Income before income tax provision... 3,788 1,365 5,153
Income tax benefit................... (217) -- (217)
----------- ----------- -----------
Income before extraordinary item..... $ 4,005 $ 1,365 $ 5,370
=========== =========== ===========
Basic earnings per share (4)......... $ .26 $ 0.06
=========== ===========
Dilutive earnings per share.......... $ 0.22 $ 0.05
=========== ===========
Average common shares-basic.......... 15,147 67,083 82,230
=========== =========== ===========
Average common shares-diluted........ 18,109 69,778 87,887
=========== =========== ===========
- --------
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS NO.
3 OF TRIKON
(1) As presented in the unaudited condensed consolidated financial statements
included in the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998.
(2) Represents compensation expense recognized based on the vesting of the
restricted Common Stock to be issued to the Company's Chairman of the
Board and Chief Executive Officer. The Common Stock issued to the Chairman
of the Board and Chief Executive Officer becomes 100% vested after five
years. This amount represents one quarters worth of compensation expense
attributable to the restricted stock issuance, based on recent quoted market
prices (i.e., $0.66 per share) of the Company's Common Stock.
(3) Adjustment to interest expense to give effect to Exchange Offer at the
beginning of period presented computed as follows:
Notes........................................... $82,103
Interest rate................................... 7.625%
-------
Annual interest................................. $ 6,260
=======
Quarterly interest.............................. $ 1,565
Quarterly amortization of financing cost........ 179
-------
$ 1,744
=======
6.
Following the Exchange Offer, the interest rate on Convertible Notes still
outstanding will be 7-1/8% under the terms of the amended Indenture.
(4) Basic and dilutive earnings per share and weighted average shares
outstanding are presented as if the 51.9 million shares of Common Stock to
be issued to the holders of the Convertible Notes in the Exchange Offer,
11.5 million shares of restricted Common Stock to be issued to the Chairman
of the Board and Chief Executive Officer of the Company in the Exchange
Offer and 15.2 million shares of Common Stock to be issued to the holders of
the Series G Preferred Stock and the Warrants in the Exchange Offer were
issued as of January 1, 1998. Net income has been decreased by $0.6 million,
representing one quarter of a year of dividends on the Series H Preferred
Stock, for purposes of calculating the basic and diluted net earnings per
share. None of the 11.5 million shares of restricted Common Stock to be
issued to the Company's Chairman of the Board and Chief Executive Officer
are included in the number of shares used in the basic per share computation
because the time-based vesting restriction would not have lapsed during the
quarter. For purposes of diluted earnings per share the number of shares of
the 11.5 million shares of restricted Common Stock issued to the Company's
Chairman of the Board and Chief Executive Officer included in the
denominator of the computation is based on the treasury stock method. For
the quarter ended March 31, 1998 the denominator in the diluted earnings per
share computation included 5,655,694 shares of the 11.5 million shares of
restricted common stock computed under the treasury stock method assuming an
average unrecognized compensation expense of $7.4 million and an average
price for the quarter of $1.267 per share.
The Unaudited Pro Forma Statement of Operations No. 3 of Trikon does not
reflect a bonus payable to the Company's Chairman of the Board and Chief
Executive Officer in the amount of $1.5 million payable upon the achievement
of certain profitability levels and the occurrence of certain other events.
This bonus will be reflected as a charge to earnings when it is probable that
the profitability levels will be achieved and the other events will occur.
The gain resulting from the Exchange Offer will be reflected as an
extraordinary item in the quarter ended June 30, 1998. The gain is excluded from
the Unaudited Pro Forma Statement of Operations No. 3.
7.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET OF TRIKON
MARCH 31, 1998
(IN THOUSANDS OF U.S. DOLLARS)
EXCHANGE PRO FORMA
CONSOLIDATED(1) OFFER CONSOLIDATED
ASSETS --------------- --------- ---------------
Current assets:
Cash and cash equivalents........ $ 17,204 $ -- $17,204
Accounts receivable, net......... 10,278 -- 10,278
Inventories, net................. 23,732 -- 23,732
Other current assets............. 1,987 -- 1,987
--------- --------- -------
Total current assets........... 53,201 -- 53,201
Property, equipment and leasehold
improvements, net................. 21,926 -- 21,926
Demonstration systems, net......... 1,227 -- 1,227
Bond financing costs, net of
accumulated amortization........ 2,127 (2,025) (2) 102
Other assets....................... 400 -- 400
--------- --------- -------
Total assets................... $ 78,881 $ (2,025) $76,856
========= ========= =======
LIABILITIES AND
SHAREHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
Convertible subordinated notes... $ 86,250 $(86,250) (2) $ --
Accounts payable and accrued
expenses........................ 5,799 500 (2)(4) 6,299
Restructuring cost............... 1,561 -- 1,561
Sales returns payable............ 11,468 -- 11,468
Other current liabilities........ 8,415 (2,870) (2) 5,545
--------- --------- -------
Total current liabilities...... 113,493 (88,620) 24,873
Other non-current liabilities...... 5,744 -- 5,744
Convertible subordinated notes..... -- 4,147 (2) 4,147
SHAREHOLDERS' EQUITY (DEFICIENCY)
Series G Preferred Stock......... 19,349 (19,349) (2) --
Series H Preferred Stock......... -- 28,558 (2) 28,558
Common Stock..................... 137,767 34,271 (2) 198,972
19,349 (2)
7,585 (3)
Cumulative translation........... (163) -- (163)
Deferred compensation............ -- (7,585) (3) (7,585)
Accumulated deficit.............. (197,309) 19,619 (2) (177,690)
--------- --------- -------
Total shareholders' equity
(deficiency).................. (40,356) 82,448 42,092
--------- --------- -------
Total liabilities and
shareholders' equity
(deficiency).................. $ 78,881 $ (2,025) $76,856
========= ========= =======
- --------
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(1) As presented in the unaudited condensed consolidated financial statements
included in the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998.
(2) To give effect to the issuance of Common Stock and Series H Preferred Stock,
accrual of estimated transaction fees, conversion of the Convertible Notes
and Series G Preferred Stock, forgiveness of interest payable and recording
of the related gain on the transaction, under SFAS No. 15 "Troubled Debt
Restructuring," pursuant to the Exchange Offer, as consummated on May 14,
1998. Holders of $82,103,000 of the Convertible Notes have elected to
participate in the exchange offer. The holders of $4,147,000 of the
Convertible Notes have elected not to participate in the Exchange Offer and
accordingly, this amount has been reclassified to long-term debt in
accordance with the amended Indenture resulting from the Exchange Offer. In
accordance with SFAS No. 15, the Series H Preferred Stock is stated at the
full liquidation value. No dividends are accrued on the Series H Preferred
Stock in computing the amount of the gain on the transaction since the
Company has the option to pay such dividends with additional preferred
stock, cash or any combination thereof. The Common Stock amount includes
approximately 15.2 million shares of Common Stock to be issued to the
holders of the Series G Preferred Stock and the Warrants. The excess of the
$19.3 million of Series G Preferred Stock over the fair market value of the
Common Stock of $9.3 million, based on $0.66 per share quoted market prices,
has been recorded as an addition to Common Stock. The Common Stock amount
also includes approximately 51.9 million shares of Common Stock to be issued
to the holders of the Notes at an estimated fair market value of $0.66 per
share based on recent quoted market prices of the Company's Common Stock,
resulting in a gain computed as follows:
AMOUNT
-------
(000'S)
Carrying amount of the Convertible Notes redeemed................... $82,103
Accrued interest on Convertible Notes redeemed...................... 2,870
-------
84,973
Less:
Series H Preferred Stock at liquidation value....................... 28,558
Common Stock at current market value................................ 34,271
Write-off capitalized financing cost, related to the Convertible
Notes redeemed.................................................... 2,025
Estimated transaction cost.......................................... 500
-------
65,354
-------
Gain................................................................ $19,619
=======
The gain resulting from the Exchange Offer will be reflected as an
extraordinary item in the quarter ended June 30, 1998. The gain is excluded
from the Unaudited Pro Forma Statement of Operations No. 2 and the Unaudited
Statement of Operations No. 3.
The unaudited pro forma Common Stock amounts assume the Series I Preferred
Stock to be issued in the transaction and subsequently converted into Common
Stock, upon shareholder approval of the Company's Charter Amendment, has
been converted to Common Stock as of March 31, 1998 since shareholder
approval is expected.
(3) Represents the recording of deferred compensation expense associated with
the issuance of 11.5 million shares of Common Stock to the Company's
Chairman of the Board and Chief Executive Officer valued at an estimated
fair market value of $0.66 based on recent quoted market prices.
(4) Represents estimated transaction fees of $500,000.
8.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
4.5 Certificate of Determination establishing the rights,
preferences and privileges of the Series H Preferred Stock
4.6 Certificate of Determination establishing the rights,
preferences and privileges of the Series I Junior
Participating Preferred Stock
4.7 First Supplemental Indenture, dated as of May 14, 1998, between
the Company and U.S. Trust Company of California, N.A.
9.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRIKON TECHNOLOGIES, INC.
Date: May 28, 1998 By: /s/ Christopher D. Dobson
------------------------------
Christopher D. Dobson
Chairman of the Board and
Chief Executive Officer
10.