Semiconductor solutions provider, QuickLogic Corporation (QUIK - Snapshot Report), recently announced its plans to raise funds from the equity market by issuing new shares of common stock, each having a face value of $0.001. The size of the public offering, however, was not disclosed.
The company intends to use the proceeds to meet working capital and general corporate requirements. The funds may also be utilized to cover QuickLogic’s capital expenditures, such as investments in and acquisitions of complementary businesses, partnerships, or the buying of minority stake in businesses to repay debts. During the nine months ended Sep 29, 2013, the company incurred $1.2 million in capital expenditures for property and equipment.
Furthermore, the funds may be used for licensing or acquiring intellectual property or technologies for its products.
The recent public offering, if approved, will boost the company’s liquidity position. QuickLogic’s financial position is weak as it is suffering from quarterly losses and generating negative cash flow from operating activities. As on Sep 30, 2013, the company reported cash and cash equivalents worth $14.9 million.
During the third quarter of 2013, the company reported net loss of $2.3 million, or 5 cents per share. Moreover, for the nine-month period ended Sep 29, 2013, its loss stood at $9.1 million or 20 cents per share. The company reported negative operating cash flow during the nine months ended Sep 29, 2013.
QuickLogic currently carries a Zacks Rank #3 (Hold). Better-placed stocks within the semiconductor sector worth considering are Mindspeed Technologies, Inc. , Avago Technologies Ltd. (AVGO - Analyst Report) and Cavium, Inc. (CAVM - Snapshot Report). While Avago and Cavium, each carry a Zacks Rank #2 (Buy), Mindspeed holds a Zacks Rank #1 (Strong Buy).