10-Q 1 zk1211434.htm 10-Q zk1211434.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
For the quarterly period ended March 31, 2012
   
Or
   
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-32832

Jazz Technologies, Inc.
(Exact name of registrant as specified in its charter)

Delaware
 
20-3320580
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
     
4321 Jamboree Road
Newport Beach, California
 
92660
(Address of principal executive offices)
 
(Zip Code)

(949) 435-8000
Registrant’s telephone number, including area code

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  
 
Yes x    No o
 
(Note:  As a voluntary filer not subject to the filing requirements, the Registrant has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months).

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
 
Yes x    No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer a non-accelerated filer or a “smaller reporting company”. See definitions of “large accelerated filer” and “accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o
Accelerated filer o
Non-accelerated filer x
Smaller reporting companyo

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 
Yes o    No x



The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with the reduced disclosure format permitted by General Instruction H(2).
 
 
 

 
 
JAZZ TECHNOLOGIES, INC.

Table of Contents

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i

 

PART I — FINANCIAL INFORMATION

Item 1.     Financial Statements

Jazz Technologies, Inc. (A Wholly Owned Subsidiary of
 Tower Semiconductor, Ltd.) and Subsidiaries

Consolidated Balance Sheets
 (in thousands)
 
   
March 31, 2012
   
December 31, 2011
 
   
(unaudited)
       
ASSETS
           
Current assets:
           
Cash and cash equivalents
  $ 29,418     $ 19,471  
Receivables:
               
Trade receivables, net of allowance for doubtful accounts of $1,001 and $1,020 at March 31, 2012 and December 31, 2011, respectively
    20,672       17,032  
Other receivables
    2,691       4,485  
Inventories
    23,935       25,376  
Deferred tax asset
    4,357       4,357  
Prepaid expenses and other current assets
    4,102       4,147  
Total current assets
    85,175       74,868  
Property, plant and equipment, net
    97,703       101,537  
Intangible assets, net
    42,602       43,760  
Goodwill
    7,000       7,000  
Other assets – related parties
    14,527       15,185  
Other assets - others
    2,276       2,350  
Total assets
  $ 249,283     $ 244,700  
LIABILITIES AND STOCKHOLDERS' EQUITY
               
Current liabilities:
               
Short-term bank debt
  $ 7,500     $ 5,300  
Accounts payable
    13,468       12,050  
Due to related parties
    4,029       2,049  
Accrued compensation and benefits
    7,603       5,328  
Deferred revenues
    2,461       2,597  
Accrued interest
    1,912       3,764  
Other current liabilities
    3,481       4,427  
Total current liabilities
    40,454       35,515  
Long term liabilities:
               
 Long-term debt from bank
    10,000       10,000  
Notes
    70,342       69,061  
Deferred tax liability
    5,722       5,722  
Employee related liabilities
    11,881       12,227  
Other long-term liabilities
    16,240       15,699  
Total liabilities
    154,639       148,224  
Stockholder’s equity:
               
Additional paid-in capital
    63,576       63,576  
Cumulative stock based compensation
    1,695       1,539  
Accumulated other comprehensive loss (*)
    (1,433 )     (1,433 )
Retained earnings
    30,806       32,794  
Total stockholders’ equity
    94,644       96,476  
Total liabilities and stockholders’ equity
  $ 249,283     $ 244,700  
 
(*)
Accumulated other comprehensive loss includes mainly plan assets and benefit obligation, net of taxes.
 
 
See accompanying notes.

 
1

 
 
Jazz Technologies, Inc. (A Wholly Owned Subsidiary of
 Tower Semiconductor, Ltd.) and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations
(in thousands)

   
Three months ended
March 31, 2012
   
Three months ended
March 31, 2011
 
Net revenues
  $ 41,075     $ 50,797  
Cost of revenues
    33,603       34,785  
Gross profit
    7,472       16,012  
Operating expenses:
               
Research and development
    3,213       3,157  
Selling, general and administrative
    4,044       3,819  
Amortization of intangible assets
    197       197  
Total operating expenses
    7,454       7,173  
Operating income
    18       8,839  
Financing expense, net
    (3,095 )     (4,293 )
Net income (loss) before income taxes
    (3,077 )     4,546  
Income tax benefit (expense)
    1,089       (1,464 )
Net income (loss)
  $ (1,988 )   $ 3,082  

See accompanying notes.
 
 
2

 
s
Jazz Technologies, Inc. (A Wholly Owned Subsidiary of
 Tower Semiconductor, Ltd.) and Subsidiaries

Unaudited Condensed Consolidated of Comprehensive Income (Loss)
(in thousands)

   
Three months ended
March 31, 2012
   
Three months ended
March 31, 2011
 
   
(In thousands)
 
Net income (loss)
  $ (1,988 )   $ 3,082  
Foreign currency translation adjustment
    --       --  
Comprehensive income (loss)
  $ (1,988 )   $ 3,082  

 
3

 
 
Jazz Technologies, Inc. (A Wholly Owned Subsidiary of
 Tower Semiconductor, Ltd.) and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
 
   
Three months ended
March 31, 2012
   
Three months ended
March 31, 2011
 
Operating activities:
           
Net income (loss)
  $ (1,988 )   $ 3,082  
Adjustments to reconcile net income (loss) for the period to net cash provided by  operating activities:
               
Depreciation and amortization of intangible assets
    8,084       8,853  
Notes accretion and amortization of deferred financing costs
    1,391       1,617  
Stock based compensation expense
    156       137  
Changes in operating assets and liabilities:
               
Trade receivables
    (1,856 )     (275 )
Inventories
    1,441       (1,768 )
Prepaid expenses and other current assets
    45       (1,089 )
Accounts payable
    2,517       (2,267 )
Due to related parties, net
    656       1,197  
Accrued compensation and  benefits
    2,275       (236 )
Deferred Revenue
    (136 )     591  
Accrued interest
    (1,889 )     (2,641 )
Other current liabilities
    (946 )     (2,178 )
Employee related liabilities and other long-term liabilities
    204       114  
Net cash provided by operating activities
    9,954       5,137  
Investing activities:
               
Purchases of property and equipment
    (4,191 )     (10,243 )
Proceeds related to property and equipment
    1,984       1,478  
Net cash used in investing activities
    (2,207 )     (8,765 )
Financing activities:
               
Short-term debt from bank
    2,200       --  
Net cash used in financing activities
    2,200       --  
Net decrease (increase) in cash and cash equivalents
    9,947       (3,628 )
Cash and cash equivalents at beginning of period
    19,471       29,031  
Cash and cash equivalents at end of period
  $ 29,418     $ 25,403  
                 
Non cash activities:
               
                 
Investments in property, plant and equipment
  $ 1,583     $ 3,391  
                 
Supplemental disclosure of cash flow information:
               
                 
Cash paid during the period for interest
  $ 3,809     $ 5,559  
Cash paid during the period for income taxes
  $ 80     $ 2,600  

See accompanying notes.

 
4

 
 
Jazz Technologies, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
March 31, 2012

 
Note 1:   Business and Formation
 
Unless specifically noted otherwise, as used throughout these notes to the unaudited condensed consolidated financial statements, “Jazz” or the “Company” refers to the business of Jazz Technologies, Inc., and “Jazz Semiconductor” refers only to the business of Jazz Semiconductor, Inc.
 
The Company
 
Since the merger with Tower in 2008, the Company is a 100% subsidiary of Tower.
 
The Company is based in Newport Beach, California and is an independent semiconductor foundry focused on specialty process technologies for the manufacture of analog intensive mixed-signal semiconductor devices. The Company’s specialty process technologies include advanced analog, radio frequency, high voltage, bipolar and silicon germanium bipolar complementary metal oxide (“SiGe”) semiconductor processes for the manufacture of analog and mixed-signal semiconductors. Its customer’s analog and mixed-signal semiconductor devices are used in cellular phones, wireless local area networking devices, digital TVs, set-top boxes, gaming devices, switches, routers and broadband modems.
 
Note 2:   Summary of Significant Accounting Policies
 
Basis of Presentation and Consolidation
 
The Company prepares its consolidated financial statements in accordance with SEC and U.S. generally accepted accounting principles (“US GAAP”) requirements and includes all adjustments of a normal recurring nature that are necessary to fairly present its condensed consolidated results of operations, financial position, and cash flows for all periods presented. The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Interim period results are not necessarily indicative of full year results. This quarterly report should be read in conjunction with the Company most recent Annual Report on Form 10-K.
 
The condensed consolidated financial statements included herein are unaudited; however, they contain all normal recurring adjustments that, in the opinion of management, are necessary to present fairly the Company’s consolidated financial position at March 31, 2012 and December 31, 2011, and the consolidated results of its operations and cash flows for the three months ended March 31, 2012 and 2011. All intercompany accounts and transactions have been eliminated. Certain amounts have been reclassified in order to conform to 2012 presentation.
 
Use of Estimates
 
The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates.
 
Fair Value of Financial Instruments
 
The Company measures its financial assets and liabilities in accordance with US GAAP. For financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, the carrying amounts approximate fair value due to their short maturities.
 
 
5

 
 
Concentrations
 
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents and trade accounts receivable.
 
The Company generally does not require collateral for insurance of receivables, however, in certain circumstances the Company may require letters of credit. An allowance for doubtful accounts is determined with respect to those amounts that were determined to be doubtful of collection. The Company performs ongoing credit evaluations of its customers.
 
Accounts receivable from significant customers representing 10% or more of the net accounts receivable balance as of March 31, 2012 and December 31, 2011 consists of 2 customers:
 
   
March 31, 2012
   
December 31, 2011
 
Customer 1
    23 %     19 %
Customer 2
    13       5  
 
Net revenues from significant customers representing 10% or more of net revenues consist of the following:
 
   
Three months ended
March 31, 2012
   
Three months ended
March 31, 2011
 
Customer A
    19 %     19 %
Customer B
    12       --  
Customer C
    5       13  
Customer D
    --       16  
 
As a result of the Company’s concentration of its customer base, loss or cancellation of business from, or significant changes in scheduled deliveries of products sold to these customers or a change in their financial position could materially and adversely affect the Company’s consolidated financial position, results of operations and cash flows.
 
The Company operates a single manufacturing facility located in Newport Beach, California. A major interruption in the manufacturing operations at this facility would have a material adverse affect on the consolidated financial position and results of operations of the Company.
 
Initial Adoption of New Standards
 
         In the first quarter of 2012, the Company adopted amended standards that increase the prominence of items reported in other comprehensive income. These amended standards eliminate the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity and require that all changes in stockholders’ equity – except investments by, and distributions to, owners – be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The adoption of these amended standards did impact the presentation of other comprehensive income, as we have elected to present two separate but consecutive statements, but did not have an impact on our financial position or results of operations.
 
Recently Issued Accounting Standards
 
No accounting standards were recently issued as of the reporting date.
 
Note 3:   Other Balance Sheet Details
 
Inventories
 
Inventories, net of reserves, consist of the following at March 31, 2012 and December 31, 2011 (in thousands):
 
   
March 31, 2012
   
December 31, 2011
 
Raw material
  $ 3,548     $ 3,856  
Work in process
    9,582       9,359  
Finished goods
    10,805       12,161  
    $ 23,935     $ 25,376  
 
 
6

 
 
Property, Plant and Equipment
 
Property, plant and equipment consist of the following at March 31, 2012 and December 31, 2011 (in thousands):
 
 
Useful life
(In years)
 
March 31, 2012
   
December 31, 2011
 
Building improvements
10-12
  $ 24,305     $ 24,305  
Machinery and equipment
7
    148,136       145,047  
Furniture and equipment
5-7
    2,213       2,213  
Computer software
3
    3,138       3,138  
        177,792       174,703  
Accumulated depreciation
      (80,089 )     (73,166 )
 
    $ 97,703     $ 101,537  
 
Intangible Assets
 
Intangible assets consist of the following at March 31, 2012 (in thousands):
 
 
Weighted
Average Life 
(years)
 
Cost
   
Accumulated Amortization
   
Net
 
Technology
4;9
  $ 2,300     $ 1,105     $ 1,195  
Patents and other core technology rights
9
    15,100       5,933       9,167  
In-process research and development
--
    1,800       1,800       --  
Customer relationships
15
    2,600       613       1,987  
Trade name
9
    5,200       2,043       3,157  
Facilities lease
19
    33,500       6,404       27,096  
Total identifiable intangible assets
 
  $ 60,500     $ 17,898     $ 42,602  

 
Intangible assets consist of the following at December 31, 2011 (in thousands):
 

 
Weighted
Average Life 
 (years)
 
Cost
   
Accumulated Amortization
   
Net
 
Technology
4;9
  $ 2,300     $ 1,006     $ 1,294  
Patents and other core technology rights
9
    15,100       5,514       9,586  
In-process research and development
--
    1,800       1,800       --  
Customer relationships
15
    2,600       570       2,030  
Trade name
9
    5,200       1,899       3,301  
Facilities lease
19
    33,500       5,951       27,549  
Total identifiable intangible assets
 
  $ 60,500     $ 16,740     $ 43,760  
 
The amortization related to technology, patents, other core technologies, and the facilities’ lease is charged to cost of revenues. The amortization related to customer relationships and trade name is charged to operating expenses.
 
Note 4:   Credit Facility
 
Borrowing availability under the facility as of March 31, 2012, was $26 million. Outstanding borrowings were $17.5 million and $1.3 million of the facility supporting outstanding letters of credits on that date. The Company considers borrowings of $10 million to be long-term debt as of March 31, 2012. As of March 31, 2012, the Company was in compliance with all the covenants under this facility.
 
 
7

 
 
Note 5:   Notes
 
In 2006, the Company privately placed convertible notes which bore interest at a rate of 8% per annum payable semi-annually, and were scheduled to mature in December, 2011 (“Old Notes”).
 
On July 2010, the Company, together with its domestic subsidiaries and its parent, Tower, entered into an exchange agreement (the “Exchange Agreement”) with certain note holders (the “Participating Holders”) holding approximately $79.6 million principal amount of the Old Notes. Under the Exchange Agreement, the Participating Holders exchanged their Old Notes for newly-issued 8% non-convertible notes of the Company due June 2015 (the “New Notes”) at an exchange ratio of 1.175 face amount of New Notes for each 1.000 face amount of Old Notes. In October 2011, the Company completed a voluntary transaction to redeem early the entire remaining outstanding amount of the Old Notes held by holders other than the Participating Holders.
 
In addition to the New Notes, the Participating Holders received warrants to purchase approximately 25.3 million ordinary shares of Tower at an exercise price of $1.70 per share (“Warrants J”). Interest on the New Notes at a rate of 8% per annum is payable semiannually. As of March 31, 2012, approximately $93.6 million in principal amount of New Notes remained outstanding.
 
The New Notes constitute unsecured obligations of the Company, rank on parity in right of payment with all other indebtedness of the Company, and are effectively subordinated to all secured indebtedness of the Company to the extent of the value of the collateral securing such indebtedness and are not guaranteed by Tower. The New Notes shall rank senior to all future indebtedness of the Company to the extent the future indebtedness is expressly subordinated to the New Notes. The New Notes are jointly and severally guaranteed on a senior unsecured basis by the Company’s domestic subsidiaries.
 
Beginning July 1, 2013, the Company may redeem some or all of the New Notes for cash at a redemption price equal to par plus accrued and unpaid interest plus a redemption premium equal to 4% if redemption occurs prior to July 1, 2014 and 2% if redemption occurs between July 1, 2014 and maturity.
 
The Indenture contains certain covenants including covenants restricting the Company’s ability and the ability of its subsidiaries to, among other things, incur additional debt, incur additional liens, make specified payments and make certain asset sales.
 
Holders of the New Notes are entitled, subject to certain conditions and restrictions, to require the Company to repurchase the New Notes at par plus accrued interest and a 1% redemption premium in the event of certain change of control transactions.
 
The Company’s obligations under the New Notes are guaranteed by the Company’s wholly owned domestic subsidiaries. The Company has not provided condensed consolidated financial information for such subsidiaries because the Company has no independent assets or operations, the subsidiary guarantees are full and unconditional and joint and several, and subsidiaries of the Company other than the subsidiary guarantors are minor. Other than the restrictions in the Loan Agreement, there are no significant restrictions on the ability of the Company and its subsidiaries to obtain funds from their subsidiaries by loan or dividend.
 
Note 6:   Income Taxes
 
In February 2012, the U.S. tax authorities commenced an audit of the Company’s 2009 and 2010 tax returns, and asked the Company for certain reports and data in connection with said years’ tax returns. There is no indication to date whether the Company will be required to pay any additional taxes pursuant to said audit.
 
Note 7:   Employee Benefit Plans
 
The pension and other post retirement benefit plans expenses for the three months ended March 31, 2012 and 2011 were $0.1 million and $0.2 million, respectively.
 
Note 8:   Employee Stock Option Expense
 
During the three months ended March 31, 2012, Tower did not award any non-qualified stock options exercisable to Tower's ordinary shares to the Company's employees  The Company recorded $0.16 million of compensation expenses relating to options granted to employees for the three months ended March 31, 2012. The Company recorded $0.14 million of compensation expenses relating to employees’ options during the corresponding period in 2011.
 
 
8

 
 
Note 9:   Related Party Transactions
 
   
As of March 31,
2012
   
As of December 31,
2011
 
Due from related parties (included in the accompanying balance sheets)
  $ 19,892     $ 20,560  
Due to related parties (included in the accompanying balance sheets)
  $ 4,029     $ 2,049  
 
Related parties balances are with Tower and TowerJazz Japan Ltd. (“TJP”) and are mainly for purchases and payments on behalf of the other party, tools sale, tools lease and service charges.
 
Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations.
 
The following discussion and analysis should be read in conjunction with the financial statements and related notes contained elsewhere in this report. See our Annual Report on Form 10-K and subsequent quarterly reports filed with the Securities and Exchange Commission for information regarding certain risk factors known to us that could cause reported financial information not to be necessarily indicative of future results.
 
FORWARD LOOKING STATEMENTS
 
This report on Form 10-Q may contain “forward-looking statements” within the meaning of the federal securities laws made pursuant to the safe harbor provisions of the Private Securities Litigation Report Act of 1995. These statements, which represent our expectations or beliefs concerning various future events, may contain words such as “may,” “will,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” or other words indicating future results. Such statements may include but are not limited to statements concerning the following:
 
 
·
anticipated trends in revenues;

 
·
growth opportunities in domestic and international markets;

 
·
new and enhanced channels of distribution;

 
·
customer acceptance and satisfaction with our products;

 
·
expected trends in operating and other expenses;

 
·
purchase of raw materials at levels to meet forecasted demand;

 
·
anticipated cash and intentions regarding usage of cash;

 
·
changes in effective tax rates; and

 
·
anticipated product enhancements or releases.
 
This report, including these forward-looking statements, are subject to risks and uncertainties, including those risks and uncertainties described in our Annual Report on Form 10-K and subsequent quarterly reports filed with the Securities and Exchange Commission, that could cause actual results to differ materially from those anticipated as of the date of this report. We assume no obligation to update any forward-looking statements to reflect events or circumstances arising after the date of this report.
 
RESULTS OF OPERATIONS
 
For the three months ended March 31, 2012, we had a net loss of $2.0 million compared to a net profit of $3.1 million for the three months ended March 31, 2011.
 
 
9

 
 
 The following table sets forth certain statement of operations data as a percentage of total revenues for the periods indicated.
 
   
Three Months Ended
 
   
March 31, 2012
   
March 31, 2011
 
Net revenues
    100 %     100 %
Cost of revenues
    81.8       68.5  
Gross profit
    18.2       31.5  
Operating expenses:
               
Research and development
    7.8       6.2  
Selling, general and administrative
    9.8       7.5  
Amortization of intangible assets
    0.5       0.4  
Total operating expenses
    18.1       14.1  
Operating income
    0.0       17.4  
Financing expense, net
    (7.5 )     (8.4 )
Income tax benefit (expense)
    2.7       (2.9 )
Net income (loss)
    (4.8 )%     6.1 %
 
Comparison of three Months Ended March 31, 2012 and March 31, 2011
 
Revenues
 
Our net revenues for the three months ended March 31, 2012 amounted to $41.1 million as compared to $50.8 million for the corresponding period in 2011.The 19% revenue decrease is mainly due to shipped quantities reduction of 17% and 12% reduction  in average selling  prices due to the weakening customer demand in the semiconductor industry following the recent economic slowdown in Europe and worldwide and following the conditions in the financial markets, with the semiconductor industry experiencing weakening customer demand and reduced rate of growth.
 
Cost of Revenues
 
Our cost of revenues decreased to $33.6 million for the three months ended March 31, 2012 compared to $34.8 million for the corresponding period in 2011. The relatively small reduction in cost of revenues as compared to the revenue decrease is due to the high portion of fixed costs associated with operating a foundry.
 
Gross Profit
 
Gross profit decreased to $7.5 million in the three months ended March 31, 2012 as compared to $16.0 million in the corresponding period in 2011. Such $8.5 million decrease in gross profit was mainly attributed to the decrease in revenues described above.
 
Operating Expenses
 
Operating expenses for the three months ended March 31, 2012 amounted to $7.5 million, substantially unchanged from the $7.2 million in the three months ended March 31, 2011.
 
Financing Expense, Net
 
Financing expense, net for the three months ended March 31, 2012 decreased to $3.1 million, from $4.3 million in the corresponding period in 2011 mainly due to the redemption of the Old Notes in October 2011 as described above. Financing expense net, mainly relate to our notes.
 
 
10

 
 
Income Tax Benefit (Expense)
 
Income tax benefit amounted to $1.1 million in the three months ended March 31, 2012, as compared to income tax expense of $1.5 million in the three months ended March 31, 2011. The $2.6 million decrease in income tax expenses is mainly as a result of the decrease in the operating profit.
 
Net Income (loss)
 
Net loss for the three months ended March 31, 2012 amounted to $2.0 million as compared to net income of $3.1 million in the three months ended March 31, 2011. Such $5.1 million decrease in net income is a result of the revenue decrease which was partially offset by lower financing and tax expenses, as detailed above.
 
Item 4.    Controls and Procedures.
 
Disclosure Controls and Procedures
 
Based on the evaluation as of the end of the period covered by this report, our principal executive officer and chief financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective as of the end of the period covered by this report.
 
Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, and our principal executive officer and our principal financial officer have concluded that these controls and procedures are effective at the “reasonable assurance” level. We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.
 
Changes in Internal Control Over Financial Reporting
 
There were no changes in our internal controls over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
 
PART II - OTHER INFORMATION
 
Item 1.    Legal Proceedings
 
There are no materials pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we are a party or any of our property is subject
 
Item 1A. Risk Factors
 
In addition to the other information contained in this Form 10-Q, you should carefully consider the risk factors associated with our business previously disclosed in Item 1A to Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2011. Our business, financial condition and/or results of operations could be materially adversely affected by any of these risks. Additional risks not presently known to us or that we currently deem immaterial may also impair our business and operations.
 
Item 6.    Exhibits.
 
Number
 
Description
     
31.1
 
Principal Executive Officer Certification required by Rule 13a-14(a) or Rule 15d-14(a).
31.2
 
CFO Certification required by Rule 13a-14(a) or Rule 15d-14(a).
32.1
 
Principal Executive Officer Certification required by Section 1350.
32.2
 
Principal Financial Officer Certification required by Section 1350.
101
 
Financial information from the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, formatted in XBRL
 
 
11

 
 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 29, 2012
JAZZ TECHNOLOGIES, INC.
     
 
By:
/s/ Rafi Mor
   
_____
(Principal Executive Officer)
     
 
By:
/s/ SUSANNA H. BENNETT
   
Chief Financial Officer
(Principal Financial and Accounting Officer)

INDEX TO EXHIBITS

Number
 
Description
     
31.1
 
Principal Executive Officer Certification required by Rule 13a-14(a) or Rule 15d-14(a).
31.2
 
CFO Certification required by Rule 13a-14(a) or Rule 15d-14(a).
32.1
 
Principal Executive Officer Certification required by Section 1350.
32.2
 
Chief Financial Officer Certification required by Section 1350.
101
 
Financial information from the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, formatted in XBRL

12