Rambus Inc. 10-Q (30 June 05)

Notes of interest (Part I)

Research & Development increased from $15,356K to $18,525K for an increase of about 20% first six months ’05 as compared to same period ’04. Nice increase.

Rambus has an office (or Brass Plate) in Georgetown, Grand Caymans – been there for some time. Is Rambus thinking about moving some patents offshore – particularly those that have questionable or disputed value? If not, why not?

Grand Caymans is the home of over 40,000 businesses. Banking and other financial services (re-invoicing?) are available. Want a job in the Grand Caymans (thanks Doctorweld!)? Look here and here.

Reporting under SFAS No. 123 results in a diluted loss per share of 5 cents as compared to income of 9 cents reported for the first six months ’05. Same period ’04 would result in income of 1 cent as compared to a reported 15 cents. Yikes! My tech employee friends HATE 123 – they tell me it makes no sense (cents?) I guess they are correct . . . as long as I have checks, I must have money . . .

Dilutive effect of options . . . grant dilution of 1.4% of outstanding stock ’05 as compared to 0.5% in ’04. Exercise dilution of 0.7% in ’05 as compared to 3.4% in ’04. Perhaps the option holders are becoming increasingly responsible to the common bag-holders or maybe the decline in the stock price is making the exercise unattractive or even unprofitable? Hat tip to Harold Hughes.

Cumulative options held by CEO and the four most highly paid executive officers increased from 30.6% to 33.4% of total outstanding options. See note immediately above.

Total outstanding options as of June 30, 2005 . . . 25,649, 825 (yup) with a weighted average of $16.43. About 7.5 million are exercisable above $15.78. Oh baby! I know I still have some checks somewhere . . .

Subsequent to the balance sheet date of June 30, 2005, Rambus on July 20, 2005, purchased $60M face value of the outstanding convertible notes for a price of approximately $50M. The gain of approximately $10M, less the unamortized note issuance costs of approximately $1.5M will be recognized as other income in the quarter ending September 30, 2005. . . . Rambus may repurchase additional notes in the future as circumstances arise. That rainy day must not look so gloomy after all? Hat tip to the weather forecasters . . .

Stay tuned . . .