FREMONT, Calif., Oct. 14, 2019 /PRNewswire/ -- Sigma Designs, Inc.® (OTCQB: SIGM) announced today an update to its dissolution process that it previously announced on January 23, 2018. Sigma continues to work through its plan of dissolution approved by its shareholders and currently estimates making a final distribution of its remaining cash to shareholders in the first quarter of calendar 2020.
Sigma has been working to wind down all of its operations and resolve all outstanding creditor claims. The extended period of time of the dissolution process has been primarily attributed to winding down certain foreign subsidiaries in Europe and Asia, which has taken longer than originally anticipated.
The Company's common stock continues trading on the OTC Pink marketplace, however, there can be no assurance that any broker-dealer will make, or continue to make, a market in the Company's common stock.
Following the winding down of all international subsidiaries and remaining operations in the U.S., the Company intends to make a final distribution to shareholders. The Company previously made an initial distribution of approximately $240 million to shareholders in 2018.
As of September 30, 2019, the Company held approximately $12 million in cash and cash equivalents. After payment of its currently anticipated remaining wind-down expenses, the Company currently estimates its final aggregate distribution to shareholders will be between $8 million and $11 million, or between $0.20 and $0.27 per share. The Company intends to dissolve promptly following its final distribution to shareholders.
The timing and amount, if any, of this final distribution and the completion of the Company's dissolution process will be dependent upon a number of factors, including, but not limited to, claims made by vendors, customers, or other parties, the Company's ability to defend and settle those claims, final tax amounts for the Company and its various subsidiaries, wind down expenses, and the establishment of any necessary reserve amounts in connection with the final dissolution.
The Company also announced that its Interim Chief Executive Officer and Chief Financial Officer, Elias Nader, has accepted a new chief financial officer position with Pixelworks, Inc. As a result, Mr. Nader will become a consultant to Sigma and will continue to perform the same duties that he was performing prior to accepting his new position. As Sigma continues to wind down its business, consisting of primarily waiting for certain tax clearance and other strike-off certificates in foreign jurisdictions, the daily time commitment necessary to implement the remaining process is very limited. Mr. Nader will also continue to serve on the Sigma Board of Directors.
Forward Looking Statements
This Press Release contains forward-looking statements (including within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended). These statements include, but are not limited to, the anticipated timing and amount, if any, of a cash distribution to shareholders, the amount of cash necessary to satisfy remaining obligations and wind-down expenses, and other statements identified by words such as "will", "expect", "intends", "believe", "anticipate", "estimate", "should", "intend", "plan", "potential", "predict" "project", "aim", and similar words, phrases or expressions. These forward-looking statements are based on current expectations and beliefs of the management of Sigma Designs, as well as assumptions made by, and information currently available to, such management, and involve risks and uncertainties, many of which are beyond Sigma's and its management's control, and which may cause actual results to differ materially from those contained in forward-looking statements. Accordingly, you should not place reliance on such statements.
Particular uncertainties that could materially affect future results include any risks associated with the proposed completion of Sigma's Plan of Liquidation and Dissolution, such as: (1) uncertainties as to the timing and expense related to remaining liquidation and shut down activities, including the shutdown of international subsidiaries; (2) unexpected claims of third parties that have not yet been presented to Sigma; (3) unexpected costs, charges or expenses realized in the process of winding down, and (4) the ability of Sigma to continue to affect measures to increase the available cash for distribution to shareholders through the previously reported plan to wind down.
The foregoing review of important factors that could cause actual events to differ from expectations should not be construed as exhaustive and should be read in conjunction with the risks set forth under Item 1A of the Annual Report on Form 10-K filed by Sigma Designs with the Securities and Exchange Commission ("SEC") on April 24, 2018, which you may obtain for free at the SEC's website at http://www.sec.gov, including but not limited those risks set forth under the headings, "Risks Related to the Plan of Liquidation" and "Risks Related to the Asset Sale and Liquidation" which discuss additional important risk factors that may affect the Company's financial condition, its plan of liquidation and the timing and amount of any further distribution to shareholders. Sigma Designs undertakes no intent or obligation to publicly update or revise any of these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
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SOURCE Sigma Designs, Inc.