Trident Microsystems, Inc.(fka TRIDQ)

[knulp]

dd TRID .07, WORTH UP TO 1$,100 MLN CASH, NO FINANCIAL DEBT, ASSETS OUTWEIGH LIABILITIES,

COMMONS INTACT AND REWARDED IMHO (INFACT MAIN SHAREHOLDERS, NXP, OWNS 105 MLN SHARES OR 56% OS!!!)TRID NOW HAS 100 MLN IN CASH!!!

KEY FACTS:

1)listed assets between $100 million and $500 million (310 mill $) as of 10/31/2011
2)liabilities between $10 million and $50 million (40 mill $) as of 10/31/2011
3) total cash (pro forma) over 100 mln $ as of 01/04/2012 due to asset sale to Entropium and RDA cover total liabilities including potential severance payments (10/20 mln $? if and any, judge will decide...company is seeking to avoid those severance payments or reducing them) and legal CH11 costs (10/20 mln $). Add left assets worth 50/150 mln (DTV/Audio assets + patents+ Property Plant and Equipment) minus cash burn (now minimal, because cash
burning division and intensive capital needed the Set Top Box will be perhaps sold to Entropium on 02/15/2012, if no better offers come in for STP, in which case Trident would pay only 1.65mln break up fee to Entroprium if chances those asset acquirer)
4)NXP, main shareholder with 57% of OS and 30% voting rights,(the ducth seller in 2009 of TV biz to TRID, which paid those assets issuing restricted shares),is seeking CH11 protection in order to discharge the low trade debt and employees obligations, maximize the value of assets, reorganizing in profitable smaller business. This is the max guarantee that commons will be left with something of great, I think at least .50 in cash if all
company assets liquidated (but this is not a CH7, may become it?) or much more value reflected in new shares assigned to old commons if and when reorganized (in fact this is a CH11). Next trading day will be wild due to assets sale rumors, potential new offers better than Stalking Horse Bidder, pps will probably settle around .20/25 due to intrinsic value
5) Company does not have any financial debt, preferred shareholders (only "4" issued to NXP) only small intragroup debt, no need of DIP financing, because TRID pocket 100 mln $ in
cash due to recent asset sales. Shareholders here have a seniority right.
6)Company said in 1st day Petition documents that "debtor estimates that funds will be available for distribution to unsecured creditors. Only two TRID corp are in CH11, Trident
inc.and Trident Far East ltd, therefore rest of group is "in bonis".

DO YOUR OWN DD www.kccllc.net/disclaimer.asp

TRID NOW IS A CH11 STOCK, YOU MAY LOSE ALL MONEY INVESTED IN (VERY UNLIKELY AT THESE PRICES)

100 MLN CASH + LEFT ASSETS WORTH 100/250 MLN$ VS TOTAL LIABS OF 113MLN $ + LEGAL COSTS IN CH11 (20 MILL $?) (NO BANK DEBT, NO BOND, NO PREFERRED SHAREHOLDERS, ONLY COMMERCIAL DEBT OWED TO SUPPLIERS,TO BE FULLY REPAID ACCORDING FILINGS TO COURT), HERE'S IS .40 FLOOR LEFT VALUE FOR COMMONS BASED ON 100 MLN LEFT ASSETS VALUE(WHILE CAP OF 1.18$ BASED ON 250 MLN LEFT ASSETS VALUE), BASED ON 183M OS AND NO CASH BURN GIVEN THE COMPANY SALE OF NON CORE NON PROFITABLE SET TOP BOX TO ENTROPIUM AND 16M LICENSING DEAL TO RDA, THE 20 MLN $ BUILDING SALE IN SHANGHAI, THE 36M CASH POSITION AT THE END OF 3RD QUARTER, MINUS 27 MLN CASH BURN IN 4Q 11

READ LAST 10Q EXCERPT RELATIVE TO 3Q 2011

" For Q4, the company sees revenues dropping to a range of $50 million to $56 million, well below the Street at $80 million. (I’d note here that Thomson now shows just one analyst
left covering the company.) The company expects a non-GAAP operating loss of $24 million to $28 million in the quarter. Trident expects cash by quarter end to be in the range of $25
million to $35 million, including $20 million in proceeds from the sale its building in Shanghai, and assumes “
more favorable payment terms with certain vendors.” The company had $35.9 million in cash at the end of Q3."

THEN ADD THE RECENT ASSET SALE, THEREFORE FIGURES ARE FAIR...

"RDA Microelectronics signs agreement with Trident Microsystems

Theflyonthewall.com ..

..RDA Microelectronics (RDA) announced that it has signed an IP license and development agreement with Trident Microsystems (TRID). According to the terms of the agreement, RDA will pay $16M in cash to secure a non-exclusive, worldwide, non-transferrable license to develop, manufacture and sell derivative versions of the Trident SX5 Digital TV SoC platform for a period of 10 years."

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UPDATE 1-Trident Microsystems files for bankruptcy protection

Wed Jan 4, 2012
Jan 4 (Reuters) - Chipmaker Trident Microsystems Inc filed for bankruptcy protection on Wednesday and said Entropic Communications Inc had been appointed as the "stalking horse"
bidder.Entropic, which designs chips for video applications, will buy Trident's set-top box business, patents and other intellectual property for $55 million and will assume some
liabilities of the company. A "stalking horse" is a bidder chosen by a bankrupt company from a pool of potential
suitors to make the first bid for its assets.
Trident, which makes chips for digital TVs and LCDs, has been posting losses for fourteen straight quarters because of increased competition and slowing demand in the sector.
"Trident, like many of its competitors, has been undergoing rapid changes which have hindered its ability to operate profitably," said Dr. Bami Bastani, chief executive officer
of Trident. Entropic said it plans to hire 385 Trident employees located primarily in China, India, Taiwan and will also acquire facilities in Texas, Northern Ireland and India.
Trident also entered into a license agreement with RDA Technologies Ltd for its SX-5 SOC product for the television market and said it had enough cash balance to meet customer and
vendor requirements. The company, which filed for bankruptcy protection along with its Cayman Islands subsidiary, said none of its other subsidiaries were subject to the bankruptcy procedure
and would continue to operate normally. As of Oct 31, Trident had total assets of $309.9 million and liabilities of $39.6 million,
according to court documents. Entropic will need approval from the court regarding its agreement as the "stalking horse"
bidder and other agreements it has entered into with the company.
The case is In re: Trident Microsystems Inc, U.S. Bankruptcy Court, District of Delaware,

No. 12-10069
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Trident Microsystems files for bankruptcy protection
.Silicon Valley / San Jose Business Journal
Date: Wednesday, January 4, 2012,

Trident Microsystems on Wednesday filed for Chapter 11 bankruptcy protection in Delaware.
The Santa Clara-based chip and software company (NASDAQ:TRID) listed as much as $500 million each in debts and assets.
Trident has seen operating losses over recent years and its stock in 2011 was the biggest loser among Silicon Valley-based companies, dropping by nearly 90 percent. It closed 2011 at 18 cents a share, compared to a 2010 closing price of $1.78.
In a related development, San Diego-based Entropic Communications Inc. .Entropic Communications Inc. Latest from The Business Journals People on the MoveZenverge raises .5M, adds Entropic CEO to boardZenverge raises .5M, adds Patrick Henry to board Follow this company .(NASDAQ:ENTR) said it plans to offer $55 million for Trident's set-top box business at auction.
"Entropic would plan to hire approximately 385 Trident employees located primarily in China, India, the United Kingdom, Taiwan, Korea and the United States,” Entropic said in a
prepared statement. Entropic said it would but Trident facilities in Austin, Texas; Belfast, Northern Ireland; and Hyderabad, India. It also plans to would use parts of Trident’s facilities in China, Taiwan and Korea. Trident also said it has signed a license agreement with RDA Technologies Ltd. for a non
exclusive license to its SX-5 SOC product for the television market. Under the license agreement, Trident has received an upfront fee of $7.5 million and expects to receive an additional $8.5 million in the near term. Trident CEO Bami Bastani said in a prepared statement that the company would continue to operate as usual and had been unable to operator profitably because of "rapid changes." As a result of cost-cutting efforts, the RDA license agreement, and the receipt of funds
from the sale of its facility in China, Trident said it believes there is enough cash to continue to meet customer and vendor requirements while the marketing its key assets.
When Trident reported wider net losses on a sharply declined revenue in September, it said it would cut its work force to about 1,000 early this year from 1,275 at the time.
"A combination of increased pricing pressures in our industry, lower demand in consumer electronics, and slower than anticipated new product adoption has contributed to increased
operating losses, a deterioration in liquidity and an erosion in equity values for Trident," Bastani said.

Written by Cromwell Schubarth. Contact him at [e-mail] or 408.299.1823
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CONTRIBUTE BY newtechinvestor Share Wednesday, January 04, 2012 5:58:15 PM Re: None Post # of 1114

Essentially in ch. 11 procedings, commons get wiped out IF total liabilities exceed assets. In ch.11 proceedings it gets little tricky in figuring out Assets and Liabilities.Liabilities are what you owe to banks, bond holders and suppliers. Assets on the other hand is a fluid number. You really don't know the true value of assets other than cash and accounts receivables.
So, that $309mil in assets in ch.11 filing, I wouldn't put too much faith in them. That number depends on how much physical assets were marked down, what value did they assign to
intangible assets such as IP portfolio or goodwill.
What is significant is that $309mil in assets is almost 8 times the liabilites. Even if the numbers are marked down significantly, the assets will still be much higher than liablities. As long as assets are greater than liabilities, equity holders retain value.
This case is very intriguing in that even though the company was under stress from continuing losses due to macro economic issues, company did not have a threat of default on loans or severe cash crunch ($36mil cash at the end of last q).
They just inked a licensing deal to bring in $16mil today from RDA micro. At the same time, they got a buyer for a part of their asset from Entropic Comm. in a "stalking horse bid"
for $55mil. That $55mil bid is the floor price or minimum price for that asset in the auction. Any company could bid for that asset, but it has to be greater than $55mil. These
2 deals along with cash at the end of last quarter gives company over $100mil in cash. They probably burned through a lot of cash with planned restructuring since the last q, nonetheless, gives the company huge liquidity. Company could have easily out of courts sold assets and put a licensing deal to remain viable. But they chose ch.11 route. That begs question, Why? Are they trying to extract cost savings from employees, pensions
or from NXP. There are no bonds, bank debts and no preferred shares standing in front of common shareholders. At this point, company could reorganize or liquidate. In majority of ch. 11
cases, common holders do get wiped out, but this situation seems whole lot different. I bot some shares to stay interested.

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Trident Microsystems, Inc. Files for Chapter 11 Protection
Posted on January 4, 2012 by Morris James Delaware

http://bankruptcy.morrisjames.com/2012/01/articles/case-summaries/trident-microsystems-inc-

files-for-chapter-11-protection/

On January 4, 2012, Trident Microsystems, Inc. and Trident Microsystems (Far East) Ltd. filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware.
The petition lists assets between $100 million and $500 million and liabilities between $10 million and $50 million. Judge Christopher S. Sontchi has been assigned the case, which is
being administered as case no. 12-10069.
According to the first-day Declaration filed by David Teichmann, executive vice president and general counsel for TMI, the majority of the companies’ business focuses on the set-top box and television business lines that were acquired from NXP Semiconductor NV in February 2010. The debtors have faced increased pricing pressures from foreign competitors and have
been impacted by the slowdown in Western economies. According to Mr. Teichmann, the“combination of lower margins and sale volumes, high employee costs and limited access to
new capital has significantly affected the Company’s liquidity and ability to pay its debts
as they become due.” The debtors apparently are seeking a rapid sale of the set-top box
business, and have identified a stalking horse bidder for that business.judge Christopher S. Sontchi has been assigned the case, which is being administered as

Case No. 12-10069.