Qualcomm Incorporated (Nasdaq: QCOM), a leading developer and innovator of Code Division Multiple Access (CDMA) and other advanced wireless technologies, today announced that the issuance of certain patents to its Flarion Technologies subsidiary has triggered the payment of additional consideration valued at approximately $205 million to the former stockholders and option holders of Flarion Technologies, Inc. Qualcomm acquired Flarion, a pioneer and leading developer of Orthogonal Frequency Division Multiplex Access (OFDMA) technology and the inventor of FLASH-OFDM® technology for mobile broadband Internet protocol (IP) services, in January 2006. Under the Qualcomm-Flarion merger agreement, the $205 million milestone became payable upon the issuance of selected patents within a specified period after the closing.
“We are delighted that this milestone has been achieved, and in particular that it has been achieved so quickly,” said Steven R. Altman, president of Qualcomm. “The rapid issuance of these patents is yet another indicator of Flarion's strength as an OFDMA innovator and further enhances Qualcomm's leadership position in the wireless industry. Achievements like this continue to demonstrate the benefits of the Flarion acquisition in expanding our leading OFDM/OFDMA intellectual property portfolio and strengthening our design and development of OFDMA systems, components and products. We are uniquely positioned to effectively support wireless operators who prefer an OFDMA or hybrid OFDM/CDMA network.”
Approximately $185 million of the additional consideration is payable in cash, although $75 million of this amount will not be payable until July 2007 and remains subject to possible reduction in the event of claims by Qualcomm for indemnification under the merger agreement. Approximately $20 million of the additional consideration is payable in the form of shares of Qualcomm common stock issued or issuable upon exercise of stock options and warrants, which is also subject to reduction in the event of claims for indemnification.
Qualcomm Incorporated (www.qualcomm.com) is a leader in developing and delivering innovative digital wireless communications products and services based on CDMA and other advanced technologies. Headquartered in San Diego, Calif., Qualcomm is included in the S&P 500 Index and is a 2006 FORTUNE 500® company traded on The Nasdaq Stock Market® under the ticker symbol QCOM.
Except for the historical information contained herein, this news release contains forward-looking statements that are subject to risks and uncertainties, including the emergence of OFDMA markets, the extent and speed to which OFDM and OFMDA technology may be deployed, change in economic conditions of the various markets the Company serves, as well as the other risks detailed from time to time in the Company's SEC reports, including the report on Form 10-K for the year ended September 25, 2005, and most recent report on Form 10-Q.