MathStar, Inc. (Nasdaq: MATH) announced it has committed to a plan to discontinue its field programmable object array (FPOA) chip development and its board-level systems development businesses. The Company decided to do so to preserve the Company’s assets while it considers strategic alternatives. As previously reported on May 21, 2008, the Company has decided to engage an investment banker to explore strategic alternatives.
As a result of these initiatives, the Company expects to incur aggregate pre-tax costs and charges of approximately $4.1 million consisting of the following: approximately $1.1 million in employee severance and benefit costs; approximately $1.4 million in asset write-off and accelerated depreciation of property, plant and equipment; approximately $1.1 million in accelerated payment of future rent and operating lease payments; and approximately $500,000 in other exit costs. The Company expects to incur these charges primarily in the second and third quarters of the year ended December 31, 2008.
Douglas M. Pihl, the Company’s Chairman, Chief Executive Officer and Chief Financial Officer, John M. Jennings, the Chief Accounting Officer, and several other employees will remain with the Company in order to wind down the businesses and maintain the Company’s status as a reporting company under the Securities Exchange Act of 1934. Management also anticipates making investments to maintain the value of the Company’s intellectual property. As of March 31, 2008, the Company had $3.0 million in cash and cash equivalents and $20.6 million in short-term marketable securities.
MathStar is a fabless semiconductor company offering best-in-class, high performance programmable logic solutions. MathStar’s Field Programmable Object Array (FPOA) can process arithmetic and logic operations at clock rates at 1 gigahertz, which is up to four times faster than even the most advanced FPGA architectures in many applications. MathStar’s Arrix family of FPOAs are high-performance programmable solutions that enable customers in the machine vision, high-performance video, medical imaging, security & surveillance and military markets to rapidly and cost effectively innovate and differentiate their products. FPOAs are available now and are supported by development tools, IP libraries, application notes and technical documentation.