##### Table of Contents



UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
      Form 10-K
      þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2006Oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File Number
    000-31803
      Transmeta Corporation
 (Exact name of registrant as
    specified in its charter)
  Delaware

77-0402448(State of
    Incorporation)

(IRS Employer Identification
    No.)   3990 Freedom Circle, Santa Clara, CA 95054
 (Address of Principal Executive
    Offices, including zip code)
  (408) 919-3000
 (Registrants Telephone
    Number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
 None
  Securities registered pursuant to Section 12(g) of the
    Act:
    Common Stock, $0.00001 par value per share
    Stock Purchase Rights
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
 o þ o
  Rule 12b-2 o þ
    DOCUMENTS
    INCORPORATED BY REFERENCE
  10-K,




---



##### 



TRANSMETA
    CORPORATION
  FISCAL
    YEAR 2006
    FORM 10-K
  INDEX
  Item



PagePART IItem 1


Business


3Item 1A


Risk
    Factors


7Item 1B


Unresolved Staff
    Comments


15Item 2


Properties


15Item 3


Legal
    Proceedings


16Item 4


Submission of
    Matters to a Vote of Security Holders


16PART IIItem 5


Market for
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


17Item 6


Selected Financial
    Data


19Item 7


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


20Item 7A


Quantitative and
    Qualitative Disclosures About Market Risk


41Item 8


Financial
    Statements and Supplementary Data


42Item 9


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


82Item 9A


Controls and
    Procedures


82Item 9B


Other
    Information


84PART IIIItem 10


Directors,
    Executive Officers and Corporate Governance


84Item 11


Executive
    Compensation


84Item 12


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


84Item 13


Certain
    Relationships and Related Transactions, and Director
    Independence


85Item 14


Principal
    Accountant Fees and Services


85PART IVItem 15


Exhibits and
    Financial Statement Schedules


85Signatures


89EXHIBIT 23.01EXHIBIT 23.02EXHIBIT 31.01EXHIBIT 31.02EXHIBIT 32.01EXHIBIT 32.02    (408) 919-3000. ® ® ® ® tm tm tm
 1




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CAUTION
    REGARDING FORWARD-LOOKING STATEMENTS
     2




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##### Table of Contents



PART I  Item 1.
    Business  General
    End-of-Life
  Our
    Licensing Business
    Our
    Services Business
   3




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Our
    Product Business
  ® tm End-of-Life
  End-of-Life
  Customers
   4




---



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Sales and
    Marketing
      Manufacturing
      Competition
   5




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
    technical innovation;
    performance of our technology;
    compatibility with other semiconductor design, materials and
    manufacturing choices by current and prospective licensees;
    sufficient technical personnel available to provide relevant
    services and technical support;
    reputation and branding; and
    quality and pricing of our services and technical support.    Intellectual
    Property
       6




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Employees
    Available
    Information
  www.transmeta.com Form 10-K, Form 10-Q, Form 8-K, 1-800-SEC-0330. www.sec.gov.
  Item 1A.
    Risk
    Factors  The factors discussed below are cautionary statements that
    identify important risk factors that could cause actual results
    to differ materially from those anticipated in the
    forward-looking statements in this Annual Report on
    Form 10-K.
    If any of the following risks actually occurs, our business,
    financial condition and results of operations would suffer. In
    this case, the trading price of our common stock could decline
    and investors might lose all or part of their investment in our
    common stock.
  We
    have a history of losses, and we must successfully execute on
    our modified business model and restructuring plan if we are to
    sustain our operations.
     7




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We
    might fail to execute our restructuring plan or to operate
    successfully under our modified business model.
    We
    might not be able to execute under our restructuring plan if we
    lose key management or technical personnel, on whose knowledge,
    leadership and technical expertise we rely.
    Our
    lawsuit against Intel for patent infringement will be costly to
    litigate, could be decided adversely to us, and could adversely
    affect our intellectual property rights, distract our management
    and technical staff, and cause our stock price to
    decline.
   8




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We may
    not be able to raise any more financing, or financing may only
    be available on terms unfavorable to us or our
    stockholders.
    
    fund expansion;
    fund marketing expenditures;
    develop or enhance our products or technologies;
    enhance our operating infrastructure;
    hire additional personnel;
    respond to customer concerns about our viability;
    respond to competitive pressures; or
    acquire complementary businesses or technologies.   9




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We may
    fail to meet the continued listing requirements of the Nasdaq
    Stock Market, which may cause our stock to be delisted and
    result in reduced liquidity of our stock, reduce the trading
    price of our stock, and impair our ability to raise
    financing.
    Our
    licensing business depends on maintaining and increasing our
    LongRun2 licensing revenue, and we might be unsuccessful in our
    efforts to license our LongRun2 technology to other
    parties.
    We
    have limited visibility regarding when and to what extent our
    licensees will use our LongRun2 or other licensed
    technologies.
    
    the competition these companies face and the market acceptance
    of their products;
    the pricing policies of our licensees for their products
    incorporating our technology and whether those products are
    competitively priced; 10




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##### Table of Contents




    the engineering, marketing and management capabilities of these
    companies and technical challenges unrelated to our technology
    that they face in developing their products; and
    the financial and other resources of our licensees.    Our
    licensing and services revenue cycle is long and unpredictable,
    which makes it difficult to predict future revenues, which may
    cause us to miss analysts estimates and may result in
    unexpected changes in our stock price.
    We
    currently derive a substantial portion of our revenue from a
    small number of customers and licensees, and our revenue would
    decline significantly if any major customer were to cancel,
    reduce or delay a transaction relating to our products, licenses
    and services.
      We
    face intense competition in the power management market. Many of
    our competitors are much larger than we are and have
    significantly greater resources. We may not be able to compete
    effectively.
    If we
    do not keep pace with technological change, our technology
    offerings may not be competitive and our revenue and operating
    results may suffer.
   11




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Our
    technologies may infringe the intellectual property rights of
    others, which may cause us to become subject to expensive
    litigation, cause us to incur substantial damages, require us to
    pay significant license fees or prevent us from selling our
    products.
      Any
    dispute regarding our intellectual property may require us to
    indemnify certain licensees or third parties, the cost of which
    could severely hamper our business operations and financial
    condition.
    If we
    are unable to protect our proprietary rights adequately, our
    competitors might gain access to our technology and we might not
    compete successfully in our markets.
   12




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The
    evolution of our business could place significant strain on our
    management systems, infrastructure and other resources, and our
    business may not succeed if we fail to manage it
    effectively.
    We
    have significant international operations, which exposes us to
    risk and uncertainties.
    
    difficulties and costs of staffing and managing international
    operations;
    fluctuations in currency exchange rates;
    unexpected changes in regulatory requirements, including
    imposition of currency exchange controls;
    longer accounts receivable collection cycles;
    import or export licensing requirements;
    potentially adverse tax consequences;
    major health concerns, such as SARS;
    political and economic instability, for example as a result of
    tensions between Taiwan and the Peoples Republic of
    China; and
    potentially reduced protection for intellectual property rights.  Our
    operating results are difficult to predict and fluctuate
    significantly. A failure to meet the expectations of securities
    analysts or investors could result in a substantial decline in
    our stock price.
  quarter-to-quarter
   13




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We
    might experience payment disputes for amounts owed to us under
    our LongRun2 licensing agreements, and this may harm our results
    of operations.
    The
    price of our common stock has been volatile and is subject to
    wide fluctuations.
    
    variations in our quarterly results;
    market conditions in our industry, the industries of our
    customers and the economy as a whole;
    announcements of technological innovations by us or by our
    competitors;
    introductions of new products or new pricing policies by us or
    by our competitors;
    acquisitions or strategic alliances by us or by our competitors;
    recruitment or departure of key personnel;
    the gain or loss of significant orders;
    the gain or loss of significant customers; and
    Changes in the estimates of our operating performance or changes
    in recommendations by securities analysts.    Our
    certificate of incorporation and bylaws, stockholder rights plan
    and Delaware law contain provisions that could discourage or
    prevent a takeover, even if an acquisition would be beneficial
    to our stockholders.
    
    establishing a classified board of directors so that not all
    members of our board may be elected at one time; 14




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##### Table of Contents




    providing that directors may be removed only for
    cause and only with the vote of
    662/3%
    of our outstanding shares;
    requiring super-majority voting to amend some provisions in our
    certificate of incorporation and bylaws;
    authorizing the issuance of blank check preferred
    stock that our board could issue to increase the number of
    shares outstanding and to discourage a takeover attempt;
    limiting the ability of our stockholders to call special
    meetings of stockholders;
    prohibiting stockholder action by written consent, which
    requires all stockholder actions to be taken at a meeting of our
    stockholders; and
    establishing advance notice requirements for nominations for
    election to our board or for proposals that can be acted upon by
    stockholders at stockholder meetings.    Our
    reported financial results may be adversely affected by changes
    in accounting principles generally accepted in the United
    States.
    We may
    identify material weaknesses in our internal control over
    financial reporting.
    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties   15




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##### Table of Contents



Item 3.
    Legal
    Proceedings  In re Transmeta Corporation Initial Public Offering
    Securities Litigation 1999-2000. In
    re Initial Public Offering Securities Litigation
    Item 4.
    Submission
    of Matters to a Vote of Security Holders   16




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##### Table of Contents



PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Market
    Information for Common Stock
    High


LowFiscal year ended
    December 31, 2005First quarter

$
1.67


$
0.75Second quarter


1.10



0.58Third quarter


2.50



0.59Fourth quarter


1.74



1.08Fiscal year ended
    December 31, 2006First quarter

$
2.06


$
1.13Second quarter


2.32



1.32Third quarter


1.64



1.08Fourth quarter


1.31



1.10   Stockholders
    Dividends
    Securities
    Authorized For Issuance Under Equity Compensation
    Plans
   17




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Company
    Stock Price Performance
      COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN*
 AMONG TRANSMETA CORPORATION, THE
    NASDAQ STOCK MARKET (U.S.) INDEX
 AND THE RDG SEMICONDUCTOR
    COMPOSITE INDEX
  
 18




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##### Table of Contents



Item 6.
    Selected
    Financial Data      Years Ended December 31,2006


2005


2004


2003


2002(In thousands, except per share data)Consolidated Statement of
    Operations Data:Revenue:Product

$
1,673


$
24,636


$
18,776


$
16,225


$
24,247License


10,000



19,628



9,000



1,090



Service


36,877



28,467



1,668







Total revenue


48,550



72,731



29,444



17,315



24,247Cost of revenue:Product(1)(5)


303



12,271



36,335



16,324



17,127License


39



71











Service(5)


22,062



15,990



730







Impairment charge on inventories(3)


1,802















Impairment charge on long-lived
    assets(3)










1,943







Total cost of revenue


24,206



28,332



39,008



16,324



17,127Gross profit (loss)


24,344



44,399



(9,564
)


991



7,120Operating expenses:Research and development(5)


20,120



19,609



52,765



48,525



63,603Selling, general and
    administrative(5)


21,472



23,039



30,855



26,199



29,917Restructuring charges (recovery)(2)


698



2,009



904



(244
)


14,726Amortization of patents and patent
    rights


6,846



6,846



9,217



10,530



11,392Impairment charge on long-lived
    and other assets(3)


800







2,544







Stock compensation(4)






(34
)


1,665



4,529



1,809Total operating expenses


49,936



51,469



97,950



89,539



121,447Operating loss


(25,592
)


(7,070
)


(107,514
)


(88,548
)


(114,327
)Interest income and other, net


2,370



1,253



827



1,389



4,962Interest expense


(276
)


(364
)


(111
)


(477
)


(601
)Net loss

$
(23,498
)

$
(6,181
)

$
(106,798
)

$
(87,636
)

$
(109,966
)Net loss per share 
    basic and diluted

$
(0.12
)

$
(0.03
)

$
(0.61
)

$
(0.63
)

$
(0.82
)Weighted average shares
    outstanding  basic and diluted


195,839



190,404



175,989



139,692



134,719Consolidated Balance Sheet
    Data:Cash and cash equivalents

$
11,595


$
27,659


$
17,273


$
74,765


$
16,613Short-term investments


29,955



28,811



36,395



46,000



112,837Working capital


32,864



38,791



40,661



99,290



116,033Total assets


56,729



79,314



89,613



171,590



197,555Long-term payables, net of current
    Portion


1,333







5,000



356



18,116Total stockholders equity


42,683



54,952



58,000



131,418



140,847  19




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##### Table of Contents



(1)
    
    Cost of revenue includes $0, $0.5 million,
    $9.0 million, $1.5 million and $2.6 million,
    respectively, related to charges taken to decrease the value of
    our inventory to its fair market value in fiscal 2006, 2005,
    2004, 2003 and 2002, respectively, which was partially offset by
    the sale of previously written down inventory and the reversal
    of previously accrued inventory charges of $0,
    $6.3 million, $0.6 million, $0.5 million and
    $1.9 million, respectively. In fiscal 2004, when we became
    aware of factors indicating that inventory associated with
    non-cancelable purchase orders would be sold to customers at a
    loss, we recorded a charge of $8.4 million in cost of
    revenue related to these non-cancelable orders.(2)
    
    Restructuring charges recorded in fiscal 2006 primarily consist
    of $0.7 million for excess facilities, in fiscal 2005
    primarily consist of $1.8 million for excess facilities and
    $1.5 million related to a reduction in workforce, offset by
    a restructuring recovery of $1.3 million of charge due to
    re-occupation of certain buildings previously deemed in excess
    of the Companys needs and a benefit derived from certain
    assets previously written off. Restructuring charge in fiscal
    2004 and restructuring recovery in fiscal 2003 primarily relate
    to adjustments in the costs related to excess facilities.
    Restructuring charges recorded in fiscal 2002 primarily consist
    of $8.9 million for excess facilities, $1.6 million
    for equipment and prepaid software maintenance write-offs and
    $4.1 million related to a reduction in workforce.(3)
    
    During the fourth quarter of 2006 and 2004, we performed an
    impairment assessment of inventory charges and long-lived and
    other assets. As a result of this assessment, we recorded a
    charge in operating expenses of $0.8 million and
    $2.5 million, respectively, to write off certain long-lived
    and other asset balances. In 2006, the impairment was comprised
    of $0.3 million for property and equipment and
    $0.5 million for software maintenance prepayments. In 2004,
    the impairment was comprised of $1.7 million for property
    and equipment and $0.8 million for software maintenance
    prepayments. These charges were included in operating expenses.
    Additionally, in the fourth quarter of 2006 and 2004, we
    recorded a charge in cost of revenue of $1.8 million for
    inventory impairment and $1.9 million for prepaid
    manufacturing tools.(4)
    
    Stock compensation includes $0, $0, $0.7 million,
    $1.8 million and $3.6 million in amortization of
    deferred stock compensation for the years ended
    December 31, 2006, 2005, 2004, 2003 and 2002, respectively.
    Stock compensation also includes $0, $(34,000),
    $1.0 million, $2.7 million and $(1.8) million in
    variable stock compensation for the years ended
    December 31, 2006, 2005, 2004, 2003 and 2002, respectively.(5)
    
    Includes stock-based compensation charges as follows in year
    2006:  2006


2005


2004Cost of product revenue

$
9


$



$
Cost of service revenue


1,789







Research and development


1,723







Selling, general and administrative


2,253







Total stock-based compensation

$
5,774


$



$
   Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  NOTE: For a more complete understanding of our financial
    condition and results of operations, and some of the risks that
    could affect future results, see Risks That Could Affect
    Future Results. This section should also be read in
    conjunction with the Consolidated Financial Statements and
    related Notes, which immediately follow this section.
  Overview
   20




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End-of-Life
      End-of-Life
 21




---



##### Table of Contents



End-of-Life
      Critical
    Accounting Policies
      
    Maintenance and technical support services revenue;
    Fixed fee development service revenue and cost of
    services; and 22




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##### Table of Contents




    Recognition of time and materials based design service revenue
    License and service revenue recognition;
    Estimation of inventory valuations;
    Stock-based compensation
    Valuation of long-lived and intangible assets;
    Restructuring charges; and
    Loss contingencies;  License and Service Revenue Recognition. No. 00-21, agreed-upon
  sub-types:
  Maintenance and Technical Support Services
    Revenue.
  Fixed Fee Development Service Revenue and Cost of
    Services.
  Recognition of Time and Materials Based Design Services
    Revenue and Related Costs.
  Estimation of Inventory Valuations.
 23




---



##### Table of Contents



Stock-based Compensation.
         24




---



##### Table of Contents



fair-value-based
  Transition Election Related
    to Accounting for Tax Effects of Share-Based Payment
    Awards.
  Valuation of Long-Lived and Intangible
    Assets.
    Restructuring Charges. No. 94-3,
 25




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##### Table of Contents



Loss Contingencies.
  Description
    of Operating Accounts
  Total Revenue.
  Costs of products.
  Costs of Services.
  Gross Margin.
  Research and Development.
  Selling, General &
    Administrative.
  Restructuring Charges.
 26




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##### Table of Contents



Amortization of Patents and Patent
    Rights.
  Impairment Charge on Long-Lived and Other
    Assets.
  Stock Compensation.
  Interest Income and Other, Net.
  Interest Expense.
 27




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##### Table of Contents



Results
    of Operations
    Years EndedDecember 31,


December 31,


December 31,2006


2005


2004Product


3
%


34
%


64
%License


21
%


27
%


30
%Service


76
%


39
%


6
%Total


100
%


100
%


100
%Costs of product


1
%


17
%


123
%Costs of license










Costs of service


45
%


22
%


3
%Impairment charge on inventories


4
%






Impairment charge on long-lived
    assets










7
%Total cost of revenue


50
%


39
%


133
%Gross profit (loss)


50
%


61
%


(33
)%Operating expenses:Research and development


41
%


27
%


179
%Selling, general and administrative


44
%


32
%


105
%Restructuring charges


1
%


3
%


3
%Amortization of patents and patent
    rights


14
%


9
%


31
%Impairment charge on long-lived
    and other assets


2
%






9
%Stock compensation










6
%Total operating expenses


102
%


71
%


333
%Operating loss


(52
)%


(10
)%


(366
)%Interest income and other, net


5
%


2
%


3
%Interest expense






(1
)%


Net loss


(47
)%


(9
)%


(363
)%   Total
    Revenue
      Years Ended December 31,2006


2005


2004(In thousands)Product

$
1,673


$
24,636


$
18,776License


10,000



19,628



9,000Service


36,877



28,467



1,668Total revenue

$
48,550


$
72,731


$
29,444  28




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##### Table of Contents



Fiscal 2006 Compared to Fiscal 2005. End-of-Life
  Product Revenues. End-of-Life
  License Revenue.
  Service Revenue. sub-types:
    Years Ended December 31,2006


2005


2004(In thousands)Fixed Fee Development Service

$
9,838


$



$
Time & Materials Based
    Contract


27,037



28,217



918Maintenance and Technical Support
    Service






250



750Other


2







Total Services Revenue

$
36,877


$
28,467


$
1,668   Fixed Fee Development Service Revenue and Cost of
    Services.
  Time and Materials Based Design Service
    Revenue.
  Maintenance and Technical Support Services
    Revenue.
  Fiscal 2005 Compared to Fiscal 2004.
 29




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##### Table of Contents



Product Revenues.
  
    Higher unit shipments and ASPs of Efficeon products, which had
    their first full year of sales in fiscal 2004. Revenue from
    Efficeon products represented $9.1 million of total product
    revenue in fiscal 2005, versus $5.4 million of total
    product revenue in fiscal 2004.
    Higher unit shipments on slightly lower ASPs of Crusoe product,
    our first product line. Revenue from Crusoe products represented
    $15.5 million of total product revenue in fiscal 2005,
    versus $13.4 million of total product revenue in fiscal
    2004.  License Revenue.
  Service Revenue. sub-types:
    Years Ended December 31,2005


2004(In thousands)Time & Materials Based
    Contract

$
28,217


$
918Maintenance & Technical
    Support Services for License


250



750Total Services Revenue

$
28,467


$
1,668   Maintenance
    and Technical Support Services Revenue
   30




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##### Table of Contents



Fixed Fee
    Development Service Revenue and Cost of Services
    Time and
    Materials Based Design Service Revenue
    Customer
    Concentration Information
    Years Ended December 31,2006


2005


2004Customer:Sony Corporation


55
%


52
%


Fujitsu America Inc.






16
%


Hewlett Packard International Pte
    Inc






15
%


27
%Microsoft


20
%






NEC Electronics Corp.










33
%Sharp Trading Corporation










12
%Toshiba


21
%






     *
    
    represents less than 10% of total revenue    December 31,2006


2005Customer:3COM Corporation






27
%OQO, Inc.






14
%All American






12
%ASEM S.p.A.






11
%Microsoft Corporation


100
%


12
%Sony Corporation






11
%Hewlett Packard International Pte
    Ltd.






*
%Sharp Trading Corporation






*
%     *
    
    represents less than 10% of accounts receivable balance  Costs
    of Revenue
   31




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##### Table of Contents



Cost of
    Products
    Years Ended December 31,2006


2005


2004Product revenue


100.0
%


100.0
%


100.0
%Product cost


(75.5
)%


72.6
%


90.3
%Underabsorbed overhead


7.2
%


0.6
%


7.5
%Charges for inventory and other
    adjustments


(0.5
)%


2.2
%


98.7
%Benefits to gross margin from the
    sale of previously written down inventory


86.9
%


(25.6
)%


(3.0
)%Impairment charges for long-lived
    assets


107.7
%



%


10.3
%Cost of product revenue


125.8
%


49.8
%


203.8
%Gross margin


(25.8
)%


50.2
%


(103.8
)%   Fiscal 2006 Compared to Fiscal 2005.
      Fiscal 2005 Compared to Fiscal 2004.
  
    Benefit derived from sale of previously written-down inventory
    during fiscal 2005 from customers;
    Lower product cost a result of lower manufacturing costs
    associated with the Efficeon TM8000 processors, which had higher
    costs with the introduction of the product in fiscal 2004;
    Higher charges for inventory adjustments in fiscal 2004 resulted
    from manufacturing costs expected to exceed the price at which
    we expected to sell these products.     32




---



##### Table of Contents



Cost
    of License
  Years Ended December 312006

2005

2004(In thousands)Cost of License

$
39


$
71


$
     Cost of
    Service Revenue:
  sub-types:
  Fiscal 2006 Compared to Fiscal 2005.
  Fiscal 2005 Compared to Fiscal 2004.
    Years Ended December 312006


2005


2004(In thousands)Fixed Fee Development Service

$
5,053


$



$
Time & Materials Based
    Contract


17,005



15,779



730License Related Maintenance and
    Support Services






211



Other


4







Total Cost of Services

$
22,062


$
15,990


$
730  33




---



##### Table of Contents



Research
    and Development
  Years Ended December312006


2005


2004(In thousands)Research and development expenses

$
20,120


$
19,609


$
52,765Amount reclassified to costs of
    service and deferred costs(1)

$
16,321


$
17,737


$
     (1)
    
    In fiscal 2006 and 2005, we included costs directly attributable
    to the design and development services agreements in cost of
    service revenues. Prior to 2005, such costs were included in the
    research and development activities as the employees involved
    with such activities were performing research and development
    related activities in the prior years.  Fiscal 2006 Compared to Fiscal 2005.
    Fiscal 2005 Compared to Fiscal 2004.
    Selling,
    General and Administrative
  Fiscal 2006 Compared to Fiscal 2005. stock-based
  Fiscal 2005 Compared to Fiscal 2004.
  Restructuring
    Charges
   34




---



##### Table of Contents



BuildingLeasehold


WorkforceCosts


Reduction


Total BalanceBalance at December 31, 2003

$
6,071


$



$
6,071Restructuring charges


904







904Cash drawdowns


(1,730
)






(1,730
)Balance at December 31, 2004

$
5,245


$



$
5,245Restructuring charges


1,841



1,502



3,343Adjustments and reversals


(1,278
)


(56
)


(1,334
)Cash drawdowns


(1,552
)


(1,446
)


(2,998
)Balance at December 31, 2005

$
4,256


$



$
4,256Restructuring charges


373







373Change in estimates


325







325Cash drawdowns


(1,970
)

$




(1,970
)Balance at December 31, 2006

$
2,984


$



$
2,984   Amortization
    of Patents and Patent Rights
   35




---



##### Table of Contents



Fiscal 2006 Compared to Fiscal
    2005.
  Fiscal 2005 Compared to Fiscal
    2004.
  Impairment
    Charge on Long-Lived and Other Assets
    Stock
    Compensation
  Fiscal 2006 Compared to Fiscal 2005.
  Fiscal 2005 Compared to Fiscal 2004.
  Interest
    Income and Other, Net
  Fiscal 2006 Compared to Fiscal 2005.
  Fiscal 2005 Compared to Fiscal 2004.
 36




---



##### Table of Contents



Interest
    Expense
  Fiscal 2006 Compared to Fiscal 2005.
  Fiscal 2005 Compared to Fiscal 2004.
  Liquidity
    and Capital Resources
      Years Ended December 31,2006


2005


2004(In thousands)Net cash provided by/(used in)
    operating activities

$
(19,933
)

$
5,588


$
(77,687
)Net cash provided by/(used in)
    investing activities


(1,457
)


1,917



(11,301
)Net cash provided by financing
    activities


5,326



2,881



31,496Increase/(Decrease) in cash and
    cash equivalents

$
(16,064
)

$
10,386


$
(57,492
)      37




---



##### Table of Contents



Operating
    activities
          Investing
    activities
     38




---



##### Table of Contents



for-for-sale
  Financing
    activities
            Contractual
    Obligations
    Payments Due by PeriodLess Than


1-3


AfterContractual Obligations

Total


1 Year


Years


4 Years(In thousands)Operating Leases

$
7,392


$
4,862


$
2,526


$
4Unconditional Purchase
    Obligations(1)


2,729


$
1,262



1,467



$
10,121


$
6,124


$
3,993


$
4Less: Sublease income


(465
)


(316
)


(149
)


Total

$
9,656


$
5,808


$
3,844


$
4     (1)
    
    Purchase obligations include agreements to purchase goods or
    services that are enforceable and legally binding on Transmeta
    and that specify all significant terms, including: fixed or
    minimum quantities to be purchased; fixed, minimum or variable
    price provisions; and the approximate timing of the transaction.   39




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
  Regulation S-K.
  Recent
    Accounting Pronouncements
  instrument-by-instrument
        06-3, 06-3,
 40




---



##### Table of Contents



06-3
      Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk  Interest Rate Risk.
    2006


2007


Thereafter


Total


Fair ValueCash equivalents

$
11,595










$
11,595


$
11,595Average rate


4.9
%










4.9
%


Short term investments

$
23,963


$
5,992






$
29,955


$
29,955Average rate


4.9
%


5.5
%






5.0
%


   Foreign Currency Exchange Risk.
 41




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
    PageReport of Burr,
    Pilger & Mayer LLP, Independent Registered Public
    Accounting Firm


43Report of
    Ernst & Young LLP, Independent Registered Public
    Accounting Firm


44Consolidated
    Balance Sheets


45Consolidated
    Statements of Operations


46Consolidated
    Statements of Stockholders Equity


48Consolidated
    Statements of Cash Flows


49Notes to
    Consolidated Financial Statements


50  42




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM              Internal Control 
    Integrated Framework
  
    43




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm             
    44




---



##### Table of Contents



TRANSMETA
    CORPORATION
 CONSOLIDATED
    BALANCE SHEETS  December 31,2006


2005(In thousands)ASSETSCurrent assets:Cash and cash equivalents

$
11,595


$
27,659Short-term investments


29,955



28,811Accounts receivable, net of
    allowances for doubtful accounts of $0, in both 2006 and 2005


310



1,686Inventories






265Prepaid expenses and other current
    assets


2,729



2,279Total current assets


44,589



60,700Property and equipment, net


758



1,623Patents and patent rights, net


9,234



16,080Other assets


2,148



911Total assets

$
56,729


$
79,314LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
1,467


$
1,521Accrued compensation and related
    compensation liabilities


3,245



3,279Deferred income, net


15



5,937Other accrued liabilities


3,015



2,109Advance from customers


1,320



7,260Current portion of accrued
    restructuring costs


1,996



1,803Current portion of long-term
    payable


667



Total current liabilities


11,725



21,909Long-term accrued restructuring
    costs, net of current portion


988



2,453Long-term payables, net of current
    portion


1,333



Total liabilities


14,046



24,362Commitments and Contingencies
    (Note 10)Stockholders equity:Convertible preferred stock,
    $0.00001 par value, at amounts paid in; Authorized
    shares  5,000,000. None issued in 2006 and 2005






Common stock, $0.00001 par
    value, at amounts paid in; Authorized shares 
    1,000,000,000. Issued and outstanding shares 
    197,876,403 in 2006 and 191,710,620 in 2005


724,229



713,129Treasury stock 
    796,875 shares in 2006 and 2005


(2,439
)


(2,439
)Accumulated other comprehensive
    loss


(66
)


(195
)Accumulated deficit


(679,041
)


(655,543
)Total stockholders equity


42,683



54,952Total liabilities and
    stockholders equity

$
56,729


$
79,314    45




---



##### Table of Contents



TRANSMETA
    CORPORATION
 CONSOLIDATED
    STATEMENTS OF OPERATIONS  Years Ended December 31,2006


2005


2004(In thousands, except for per share data)Revenue:Product

$
1,673


$
24,636


$
18,776License


10,000



19,628



9,000Service


36,877



28,467



1,668Total revenue


48,550



72,731



29,444Cost of revenue:Product(1)(5)


303



12,271



36,335License


39



71



Service


22,062



15,990



730Impairment charge on inventories(3)


1,802







Impairment charge on long-lived
    assets(3)










1,943Total cost of revenue


24,206



28,332



39,008Gross profit (loss)


24,344



44,399



(9,564
)Operating expenses:Research and development(5)


20,120



19,609



52,765Selling, general and
    administrative(5)


21,472



23,039



30,855Restructuring charges(2)


698



2,009



904Amortization of patents and patent
    rights


6,846



6,846



9,217Impairment charge on long-lived
    and other assets(3)


800







2,544Stock compensation(4)






(34
)


1,665Total operating expenses


49,936



51,469



97,950Operating loss


(25,592
)


(7,070
)


(107,514
)Interest income and other, net


2,370



1,253



827Interest expense


(276
)


(364
)


(111
)Net loss

$
(23,498
)

$
(6,181
)

$
(106,798
)Net loss per share 
    basic and diluted

$
(0.12
)

$
(0.03
)

$
(0.61
)Weighted average shares
    outstanding  basic and diluted


195,839



190,404



175,989     (1)
    
    Excludes $0, $0 and $445 in amortization of deferred stock
    compensation for the year ended December 31, 2006, 2005 and
    2004, respectively.(2)
    
    Excludes $0, $(34), and $330 in variable stock compensation for
    the year ended December 31, 2006, 2005 and 2004,
    respectively.(3)
    
    Excludes $0, $0 and $232 in amortization of deferred stock
    compensation for the year ended December 31, 2006, 2005 and
    2004, respectively.(4)
    
    Excludes $0, $0 and $658 in variable stock compensation for the
    year ended December 31, 2006, 2005 and 2004, respectively.   46




---



##### Table of Contents



(5)
    
    Stock-based compensation was relevant only for year ended
    12/31/06 and it includes charges as follows in year 2006: 2006


2005


2004Cost of product revenue

$
9


$



$
Cost of service revenue


1,789







Research and development


1,723







Selling, general and administrative


2,253







Total stock-based compensation

$
5,774


$



$
    47




---



##### Table of Contents



TRANSMETA
    CORPORATION
 CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY  Common








AccumulatedShares of


Stock





Deferred


Other





TotalCommon


at Amounts


Treasury


Stock


Comprehensive


Accumulated


StockholdersStock


Paid-in


Stock


Compensation


Income/(Loss)


Deficit


Equity(In thousands, except for share and per share data)Balance at December 31, 2003


167,528,493


$
677,093


$
(2,439
)

$
(696
)

$
24


$
(542,564
)

$
131,418Issuance of common stock at
    $2.90 per share, in connection with the over allotment
    option exercised by the underwriters related to the December
    2003 common stock offering, net of issuance costs of
    $0.7 million


3,750,000



10,289



















10,289Issuance of common stock at
    $1.50 per share in public offering, net of issuance costs
    of $1.2 million


11,083,333



15,441



















15,441Issuance of shares of common stock
    to employees under option exercises and employee stock purchase
    plan, net of repurchases


5,401,568



5,277



















5,277Issuance of common stock in
    connection with net warrant exercises at exercise price of
    $3.00 per share


9, 899























Stock compensation






(19
)






696











677Repayment of notes from stockholders






857



















857Variable stock compensation






988



















988Other comprehensive income


















(149
)






(149
)Net loss






















(106,798
)


(106,798
)Comprehensive loss


























(106,947
)Balance at December 31, 2004


187,773,293



709,926



(2,439
)






(125
)


(649,362
)


58,000Issuance of shares of common stock
    to employees under option exercises and employee stock purchase
    plan, net of repurchases


3,937,327



3,237



















3,237Variable stock compensation






(34
)


















(34
)Other comprehensive income


















(70
)






(70
)Net loss






















(6,181
)


(6,181
)Comprehensive loss


























(6,251
)Balance at December 31, 2005


191,710,620



713,129



(2,439
)






(195
)


(655,543
)


54,952Issuance of shares of common stock
    to employees under option exercises and employee stock purchase
    plan,


6,165,783



5,326



















5,326Stock-based compensation






5,774



















5,774Other comprehensive income


















129







129Net loss






















(23,498
)


(23,498
)Comprehensive loss


























(23,369
)Balance at December 31, 2006


197,876,403


$
724,229


$
(2,439
)

$



$
(66
)

$
(679,041
)

$
42,683    48




---



##### Table of Contents



TRANSMETA
    CORPORATION
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Years Ended December 31,2006


2005


2004(In thousands)Cash flows from operating
    activities:Net loss

$
(23,498
)

$
(6,181
)

$
(106,798
)Adjustments to reconcile net loss
    to net cash (used in) provided by operating activities:Stock-based compensation


5,774



(34
)


1,665Depreciation


1,050



1,299



3,639Loss on disposal of fixed assets,
    net






65



Allowance for doubtful accounts






(9
)


(206
)Amortization of patents and patent
    rights


6,846



6,846



9,217Impairment charge on inventories


1,802







1,943Impairment charge on long-lived and
    other assets


800







2,544Non cash restructuring charges


698



2,009



904Gain on debt settlement with a
    development partner






(200
)


Changes in operating assets and
    liabilities:Accounts receivable


1,376



613



(365
)Inventories


(1,537
)


5,145



3,386Prepaid expenses and other current
    assets


1,022



(61
)


(649
)Other assets


(1,237
)






Accounts payable and accrued
    liabilities


803



(14,074
)


8,763Deferred income


(5,922
)


5,908



Advances from customers


(5,940
)


7,260



Accrued restructuring


(1,970
)


(2,998
)


(1,730
)Net cash (used in) provided by
    operating activities


(19,933
)


5,588



(77,687
)Cash flows from investing
    activities:Purchase of
    available-for-sale
    investments


(28,000
)


(26,000
)


(74,994
)Proceeds from sale or maturity of
    available-for-sale
    investments


27,000



33,514



84,450Purchase of property and equipment


(457
)


(797
)


(2,257
)Payment to development partner






(4,800
)


(11,000
)Payment of previously acquired
    patents and patent rights










(7,500
)Net cash (used in) provided by
    investing activities


(1,457
)


1,917



(11,301
)Cash flows from financing
    activities:Net proceeds from public offering
    of common stock










25,730Common stock issued under stock
    option plans and employee stock purchase programs


5,326



3,219



5,277Repayment of notes from stockholders






18



857Repayment of debt and capital lease
    obligations






(356
)


(368
)Net cash provided by financing
    activities


5,326



2,881



31,496Change in cash and cash equivalents


(16,064
)


10,386



(57,492
)Cash and cash equivalents at
    beginning of period


27,659



17,273



74,765Cash and cash equivalents at end of
    period

$
11,595


$
27,659


$
17,273Supplemental disclosure of cash
    paid during the period:Cash paid for interest

$
4


$
302


$
47Cash paid for taxes


56



145



152Software licenses included in
    prepaid expense acquired with current and long-term payable

$
2,000







    49




---



##### Table of Contents



TRANSMETA
    CORPORATION



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS  1.
    Overview  The
    Company
    End-of-Life
  Basis
    of Presentation
     50




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Fiscal
    Year
    Rule 13a-10 15d-10
  2.
    Summary
    of Significant Accounting Policies  Principles
    of Consolidation
    Use of
    Estimates
    Concentrations
    of Credit Risk
   51




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Supplier
    Concentrations
    Revenue
    Recognition
  and/or
  No. 00-21, agreed-upon
  Shipping
    and Handling Costs
   52




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Comprehensive
    Loss
  available-for-sale
  Years Ended December 31,2006


2005


2004(In thousands)Net loss

$
(23,498
)

$
(6,181
)

$
(106,798
)Net change in unrealized loss on
    investments


144



(15
)


(173
)Net change in foreign currency
    translation adjustments


(15
)


(55
)


24Net comprehensive loss

$
(23,369
)

$
(6,251
)

$
(106,947
)   Cash
    Equivalents and Short-term Investments
  available-for-sale
  available-for-sale available-for-sale
  available-for-sale other-than-temporary.
  Accounts
    Receivable
    Fair
    Values of Financial Instruments
    Inventories
  (first-in,
 53




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Property
    and Equipment
    Valuation
    and Impairment of Long-Lived and Intangible Assets
    Research
    and Development
    Foreign
    Currency
    Advertising
    Costs
    Income
    Taxes
   54




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Product
    Warranty
      Net
    Loss Per Share
      Stock-Based
    Compensation
     55




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Accrued
    Restructuring Costs
  No. 94-3, No. 94-3.
  Loss
    Contingencies
    Reclassifications
    Recent
    Accounting Pronouncements
  instrument-by-instrument
   56




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        06-3, 06-3, 06-3
     57




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    3.
    Financial
    Statement Components  Cash
    Equivalents and Short-Term Investments
  available-for-sale
  Gross


GrossAmortized


Unrealized


UnrealizedCost


Gains


Losses


Fair Value(In thousands)As of December 31, 2006:Money market funds

$
11,595


$



$



$
11,595Federal agency discount notes


16,000







45



15,955Commercial paper


14,000











14,000Total
    available-for-sale
    securities

$
41,595


$



$
45



41,550Less amounts classified as cash
    equivalents














(11,595
)Total short-term investments













$
29,955As of December 31, 2005:Money market funds

$
27,659


$



$



$
27,659Federal agency discount notes


25,000







189



24,811Commercial paper


4,000











4,000Total
    available-for-sale
    securities

$
56,659


$



$
189



56,470Less amounts classified as cash
    equivalents














(27,659
)Total short-term investments













$
28,811     Amortized


FairCost


Value(In thousands)As of December 31, 2006:Amounts maturing within one year

$
24,000


$
23,963Amounts maturing after one year,
    within five years

$
6,000


$
5,992     available-for-sale other-than-temporary
  available-for-sale available-for-sale
 58




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  available-for-sale
  In Loss Position


In Loss Position< 12 Months


> 12 Months


Total in Loss PositionGross





Gross





GrossFair


Unrealized


Fair


Unrealized


Fair


UnrealizedValue


(Loss)


Value


(Loss)


Value


(Loss)Short-term investments:US Treasury and agency securities

$
9,963


$
(36
)

$
5,992


$
(9
)

$
15,955


$
(45
)Commercial paper


14,000















14,000



Total in loss position

$
23,963


$
(36
)

$
5,992


$
(9
)

$
29,955


$
(45
)   Accounts
    Receivable
    December 31,2006


2005Customer:3COM Corporation


*
%


27
%OQO, Inc.


*
%


14
%All American


*
%


12
%ASEM S.p.A


*
%


11
%Microsoft Corporation


100
%


12
%Sony Corporation


*
%


11
%     *
    
    represents less than 10% of accounts receivable balance    Inventories
    December 31,2006


2005(In thousands)Work in progress

$



$
Finished goods






265$



$
265    59




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Property
    and Equipment
    December 31,2006


2005(In thousands)Furniture and fixtures

$
677


$
1,635Computer equipment


4,183



5,911Computer software


1,858



1,825Leasehold improvements


2,076



2,4108,794



11,781Less: Accumulated depreciation and
    amortization


(8,036
)


(10,158
)Property and equipment, net

$
758


$
1,623     Deferred
    Income
    December 31,


December 31,2006


2005(In thousands)Deferred revenue:Product

$
48


$
619Service






8,934Total


48



9,553Deferred costs:Product


33



54Service






3,562Total


33



3,616Deferred income, net

$
15


$
5,937  60




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Other
    accrued liabilities
    December 31,


December 31,2006


2005(In thousands)Accrued audit

$
847


$
885Accrued insurance


546



Deferred rent


407



408Accrued property taxes


179



5Other


1,036



811Total other accrued liabilities

$
3,015


$
2,109   Advances
    from Customers
    4.
    License
    Revenue and Cost of License  No. 00-21, agreed-upon
    5.
    Service
    revenue  sub-types:
  Maintenance and Technical Support Services
    Revenue.
 61




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fixed Fee Development Service Revenue and Cost of
    Services.
  Time and Materials Based Design Service
    Revenue.
  6.
    Technology
    License Agreements       62




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   7.
    Patents
    and Patent Rights    December 31,2006


2005(In thousands)Patents and patent rights

$
47,920


$
47,920Less: Accumulated amortization


(38,686
)


(31,840
)Patents and patent rights, net

$
9,234


$
16,080         (In thousands)Years ending December 31,2007


6,8462008


2,388Total future amortization

$
9,234   8.
    Restructuring
    Charges   63




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
             64




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Building


WorkforceLeasehold Costs


Reduction


Total BalanceBalance at December 31, 2002

$
7,903


$
102


$
8,005Restructuring recovery


(244
)






(244
)Cash drawdowns


(2,473
)






(2,473
)Non-cash drawdowns


885



(102
)


783Balance at December 31, 2003


6,071







6,071Restructuring charges


904







904Cash drawdowns


(1,730
)






(1,730
)Balance at December 31, 2004


5,245







5,245Restructuring charges


1,841



1,502



3,343Adjustments and reversals


(1,278
)


(56
)


(1,334
)Cash drawdowns


(1,552
)


(1,446
)


(2,998
)Balance at December 31, 2005


4,256







4,256Restructuring charges


373







373Change in estimates


325







325Cash drawdowns


(1,970
)






(1,970
)Balance at December 31, 2006

$
2,984


$



$
2,984   9.
    Impairment
    of Long-Lived and Other Assets    10.
    Commitments
    and Contingencies  Purchase
    Obligations
   65




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Operating
    Leases
      OperatingLeases(In thousands)Years ending December 31,2007


5,8082008


3,0282009 and thereafter


820Total minimum net purchase and
    operating lease obligation payments

$
9,656   Litigation
  In re
    Transmeta Corporation Initial Public Offering Securities
    Litigation 1999-2000. In
    re Initial Public Offering Securities Litigation
 66




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      11.
    Stockholders
    Equity        S-3
  Common
    Stock Reserved for Issuance
    December 31,2006


2005Warrants outstanding


365,032



365,032Options outstanding


37,980,675



39,124,784Employee Stock Purchase Plan


85



570,871Future option grants


23,899,524



16,847,77562,245,316



56,908,462  67




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Common
    Stock Warrants
    ExerciseNumber of


Price perIssuance Date

Shares


Share


Expiration DateJanuary 1998


125,032


$
1.25


December 2007April 1998


240,000


$
1.25


April 2008Total number of shares


365,032     Treasury
    Stock
    Preferred
    Stock
      Stockholders
    Rights Agreement
   68




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##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    12.
    Stock-Based
    Compensation  2000
    Equity Incentive Plan
      Non-Plan
    Stock Option Grants
    Prior
    Equity Incentive Plans
   69




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Stock
    Option Summary
    WeightedWeighted


Weighted


Average


AggregateShares





Average


Average


Remaining


IntrinsicAvailable for


Number of


Exercise


Grant Date


Contractual


AverageGrant


Shares


Price


Fair Value


Term


Value(In years)


(In thousands)Balance at December 31, 2003


4,229,540



33,139,998


$
2.73Additional shares reserved


8,838,206



Options granted


(11,775,000
)


11,775,000


$
1.67


$
0.96Options exercised






(1,685,132
)

$
1.25Options canceled


2,884,373



(3,426,154
)

$
3.13Balance at December 31, 2004


4,177,119



39,803,712


$
2.44Additional shares reserved


9,388,664



Options granted


(15,408,356
)


15,408,356


$
0.80


$
0.52Options exercised






(604,196
)

$
0.91Options canceled


15,333,088



(15,483,088
)

$
2.23Balance at December 31, 2005


13,490,515



39,124,784


$
1.90Additional shares reserved


9,585,531



Options granted


(7,826,163
)


7,826,163


$
1.48


$
0.98Options exercised






(3,677,891
)

$
0.95Options canceled


5,292,381



(5,292,381
)

$
1.93Balance at December 31, 2006


20,542,264



37,980,675


$
1.90







7.2


$
4,014Vested and expected to be vested






36,091,816


$
1.94







7.1


$
5,714Options Exercisable at
    December 31, 2006






24,334,758


$
2.31







6.3


$
2,094     in-the-money
  70




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##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Number of


Weighted AverageShares Exercisable at:

Shares


Exercise PriceDecember 31, 2004


19,174,403


$
3.07December 31, 2005


23,022,447


$
2.58December 31, 2006


24,334,758


$
2.31     Outstanding


ExercisableWeightedAverage


Weighted





WeightedRemaining


Average





AverageShares


Contractual


Exercise


Shares


ExerciseRange of Exercise Prices

Outstanding


Life Years


Price


Exercisable


Price$0.19 - $0.72


903,377



5.67


$
0.6703



535,168


$
0.6464$0.75 - $0.75


8,456,957



8.35


$
0.7500



4,097,575


$
0.7500$0.77 - $1.15


4,047,228



6.87


$
0.9761



3,043,558


$
0.9975$1.19 - $1.30


3,932,486



7.89


$
1.2190



2,612,211


$
1.2160$1.31 - $1.43


1,028,667



9.05


$
1.3697



158,518


$
1.3563$1.48 - $1.48


5,810,481



9.42


$
1.4800



706,566


$
1.4800$1.49 - $2.15


4,318,474



7.12


$
1.8791



3,741,901


$
1.8834$2.16 - $2.46


4,118,655



5.19


$
2.4156



4,099,391


$
2.4158$2.48 - $6.00


4,333,679



4.40


$
4.3322



4,309,199


$
4.3351$8.25 - $14.49


1,030,671



3.83


$
9.4522



1,030,671


$
9.4522Total


37,980,675



7.21


$
1.9031



24,334,758


$
2.3122   Accelerated
    vesting of Certain Stock Options
      2000
    Employee Stock Purchase Plan
   71




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Year Ended


Year Ended


Year Ended2006


2005


2004Number of shares issued


2,487,892



3,333,131



3,716,436Fair value of shares issued


0.67



0.41



0.56   Deferred
    Stock Compensation
    Accounting
    for Stock-Based Compensation
       72




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Prior
    to the Adoption of SFAS No. 123(R)
   73




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Years Ended December 312005


2004(In thousands, except per share data)Net loss, as reported

$
(6,181
)

$
(106,798
)Add: Stock-based employee
    compensation expense included in reported net loss, net of
    related tax effects

$
(34
)

$
1,665Less: Total stock-based employee
    compensation expense under fair value based method for all
    awards, net of related tax effects

$
(11,566
)

$
(34,756
)Pro forma net loss

$
(17,781
)

$
(139,889
)Basic and diluted net loss per
    share  as reported

$
(0.03
)

$
(0.61
)Basic and diluted net loss per
    share  pro forma

$
(0.09
)

$
(0.79
)   Impact
    of the Adoption of SFAS 123(R)
    Year Ended2006Stock-based compensation expense
    by type of award:Employee stock options

$
4,702Employee stock purchase plan


1,072Net change in amounts capitalized
    as inventory


Net change in amounts capitalized
    as deferred costs


Total stock-based compensation


5,774Tax effect on stock-based
    compensation


Net effect on net loss

$
5,774Impact on basic and diluted
    earnings per share

$
(0.03
)      74




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Notes Receivable from
    Stockholders.
  Officer notes.
  Recourse notes held by other officers and
    employees.
      Fair value accounting for stock-based
    awards.
 75




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Options


ESPPYears Ended


Years EndedDecember 31,


December 31,2006


2005


2004


2006


2005


2004Expected volatility


0.99



0.94



0.90



0.89



0.94



0.90Expected life in years


3.41



2.8



3.7



1.25



0.5



0.5Risk-free interest rate


5.0
%


4.4
%


2.8
%


4.68
%


4.3
%


2.0
%Expected dividend yield


0
%


0
%


0
%


0
%


0
%


0
%     13.
    Employee
    Benefit Plan    14.
    Related
    Party Transaction  Sales
    to Investee
    Indemnification
    Agreements
    15.
    Income
    Taxes   76




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Years Ended December 31,2006


2005


2004(In thousands)Income tax expense (benefit) at
    U.S. statutory Rate

$
(7,960
)

$
(2,099
)

$
(36,162
)State and foreign income taxes


86



168



240Valuation Allowance


7,960



2,099



36,162Provision for income taxes

$
86


$
168


$
240     Years Ended December 31,2006


2005


2004(In thousands)Federal operating loss
    carryforwards

$
134,000


$
126,000


$
139,000State operating loss carryforwards


9,000



7,000



9,000Federal tax credit carryforwards


14,000



12,000



11,000State tax credit carryforwards


10,000



9,000



8,000Non-deductible reserves and
    capitalized expenses


68,000



65,000



59,000235,000



219,000



226,000Less: Valuation allowance


(235,000
)


(219,000
)


(226,000
)Net deferred taxes

$



$



$
         16.
    Segment
    Information   77




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Years Ended December 31,2006


2005


2004Japan


98
%


67
%


51
%China/Hong Kong






17
%


32
%Taiwan






6
%


10
%North America


1
%


5
%


5
%Other


1
%


5
%


2
%     Years Ended December 31,2006


2005


2004(In thousands)Product revenue


1,673



24,636



18,776License revenue


10,000



19,628



9,000Service revenue


36,877



28,467



1,668Total revenue

$
48,550


$
72,731


$
29,444     Years Ended December 31,2006


2005


2004Product:


3
%


34
%


64
%License


21
%


27
%


30
%Service


76
%


39
%


6
%     Years Ended December 31,2006


2005(In thousands)United States

$
12,140


$
18,509Asia


0



105Total

$
12,140


$
18,614  78




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Years Ended December 31,2006


2005


2004Customer:Sony Corporation


55
%


52
%


Fujitsu America Inc.






16
%


Hewlett Packard International Pte
    Inc.






15
%


27
%Microsoft


20
%






NEC Electronics Corp.










33
%Toshiba


21
%






Sharp Trading Corporation










12
%     
    
    represents less than 10% of total revenue 79




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  17.
    Subsequent
    Events  Announcement
    of Restructuring Plan
        Nasdaq
    Letter Regarding Noncompliance with Minimum Bid Price
    Rule
    Form 8-K.
 80




---



##### Table of Contents



TRANSMETA
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  18.
    Quarterly
    Results of Operations (Unaudited)    Quarters EndedDec. 31,


Sept. 30,


Jun. 30,


Mar. 31,


Dec. 31,


Sept. 30,


Jun. 30,


Mar. 31,2006


2006


2006


2006


2005


2005


2005


2005(In thousands, except for per share data)Revenue:Product

$
216


$
507


$
361


$
589


$
3,235


$
7,927


$
7,068


$
6,406License






10,000















9,628



10,000



Service


2,177



6,810



8,970



18,920



10,077



10,308



7,634



448Total revenue


2,393



17,317



9,331



19,509



13,312



27,863



24,702



6,854Cost of revenue:Product


194



9



(62
)


162



1,402



2,167



3,950



4,752License






39















46



25



Service


1,473



3,913



5,795



10,881



5,660



6,017



4,152



161Impairment charge on inventories


1,802



























Total cost of revenue


3,469



3,961



5,733



11,043



7,062



8,230



8,127



4,913Gross profit (loss)


(1,076
)


13,356



3,598



8,466



6,250



19,633



16,575



1,941Operating expensesResearch and development


7,261



4,838



4,769



3,252



2,491



1,905



2,991



12,222Selling, general and administrative


5,038



4,847



6,043



5,544



5,564



4,523



4,996



7,956Restructuring charges


421



107



96



74



(875
)


1,529



46



1,309Amortization of patents and patent
    rights


1,712



1,711



1,712



1,711



1,713



1,711



1,711



1,711Impairment charge on long-lived and
    other assets


800



























Stock compensation


















14







(14
)


(34
)Total operating expenses


15,232



11,503



12,620



10,581



8,907



9,668



9,730



23,164Operating profit/(loss)


(16,308
)


1,853



(9,022
)


(2,115
)


(2,657
)


9,965



6,845



(21,223
)Interest income and other, net


569



708



590



503



609



305



93



246Interest expense


(162
)


(42
)


(37
)


(35
)


(18
)


(132
)


(106
)


(108
)Net income (loss)

$
(15,901
)

$
2,519


$
(8,469
)

$
(1,647
)

$
(2,066
)

$
10,138


$
6,832


$
(21,085
)Net income (loss) per
    share  basic and diluted

$
(0.08
)

$
0.01


$
(0.04
)

$
(0.01
)

$
(0.01
)

$
.0.05


$
0.04


$
(0.11
)Weighted average shares
    outstanding  basic


197,573



196,636



195,725



193,365



191,649



190,933



189,848



189,151Weighted average shares
    outstanding  diluted


197,573



199,809



195,725



193,365



191,649



197,767



190,081



189,151  81




---



##### Table of Contents



Item 9.  Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure  Form 8-K,
  Form 8-K,
  Regulation S-K) Regulation S-K.
 Item 9A.  Controls
    and Procedures  (a)
    Disclosure
    Controls and Procedures  Rules 13a-15(e) 15d-15(e)
    (b)
    Managements
    Report on Internal Control Over Financial Reporting  Rules 13a-15(f) 15d-15(f).
       82




---



##### Table of Contents



(c)
    Report of
    Independent Registered Public Accounting Firm on Internal
    Control Over Financial Reporting    Internal Control 
    Integrated Framework
          ,
  
    83




---



##### Table of Contents



(d)
    Changes
    in Internal Control Over Financial Reporting    (e)
    Inherent
    Limitations on Effectiveness of Controls    Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance    http://www.transmeta.com.
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters   84




---



##### Table of Contents



Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  (a)
    The
    following documents are filed as part of this report:  Financial Statements
  Financial Statement Schedules
  Exhibits
    Incorporated by ReferenceExhibit









Filing

FileNumber

Exhibit Title

Form

File No.

Exhibit

Date

Herewith3
.01

Second Amended and Restated
    Certificate of Incorporation.


10-K







3.01



03/07/20013
.02

Restated Bylaws.


S-1



333-440303
.03

Certificate of Designations
    specifying the terms of the Series A Junior Participating
    Preferred Stock of Transmeta as filed with the Secretary of
    State of the State of Delaware.


8-A







3.02



01/16/20024
.01

Specimen common stock certificate.


S-1







4.014
.02

Fifth Restated Investors
    Rights Agreement dated March 31, 2000, between Transmeta,
    certain stockholders of Transmeta and a convertible note holder
    named therein.


S-1







4.024
.03

Form of Piggyback Registration
    Rights Agreement.


S-1







4.034
.04

Rights Agreement dated
    January 15, 2002 between Transmeta and Mellon Investor
    Services LLC as Rights Agent, which includes as Exhibit A
    the form of Certificate of Designations of Series A Junior
    Participating Preferred Stock, as Exhibit B the Summary of
    Stock Purchase Rights and as Exhibit C the Form of Rights
    Certificate.


8-A







4.01



01/16/200210
.01

Form of Indemnity Agreement.**


S-1







10.0110
.02

1995 Equity Incentive Plan.**


S-1







10.0210
.03

1997 Equity Incentive Plan.**


S-1







10.03 85




---



##### Table of Contents



Incorporated by ReferenceExhibit









Filing

FileNumber

Exhibit Title

Form

File No.

Exhibit

Date

Herewith10
.04

2000 Equity Incentive Plan.**


S-8







4.06



01/18/200210
.05

2000 Employee Stock Purchase
    Plan.**


S-8







4.08



05/28/200210
.06

Lease Agreement, dated
    November 1, 1995, between John Arrillaga, as trustee of
    John Arrillaga Family Trust, Richard T. Peery, as trustee
    of Richard T. Peery Separate Property Trust, and Transmeta,
    as amended by Amendment No. 1, dated January 29, 1997,
    and Amendment No. 2, dated April 2, 1998, between John
    Arrillaga, as trustee of John Arrillaga Survivors Trust
    (successor in interest to the Arrillaga Family Trust), Richard
    T. Peery, as trustee of Richard T. Peery Separate Property
    Trust, and Transmeta.


S-1







10.0810
.07

Lease Agreement, dated
    January 29, 1997, between John Arrillaga, as trustee of
    John Arrillaga Family Trust, Richard T. Peery, as trustee
    of Richard T. Peery Separate Property Trust, and Transmeta,
    as amended by Amendment No. 1, dated April 2, 1998,
    between John Arrillaga, as trustee of John Arrillaga
    Survivors Trust (successor in interest to the Arrillaga
    Family Trust), Richard T. Peery, as trustee of Richard T. Peery
    Separate Property Trust, and Transmeta.


S-1







10.0910
.08

Lease Agreement, dated
    April 2, 1998, between John Arrillaga, as trustee of John
    Arrillaga Survivors Trust, Richard T. Peery, as
    trustee of Richard T. Peery Separate Property Trust, and
    Transmeta.


S-1







10.1010
.09

Lease Agreement, dated
    April 2, 1998, between John Arrillaga, as trustee of John
    Arrillaga Survivors Trust, Richard T. Peery, as
    trustee of Richard T. Peery Separate Property Trust, and
    Transmeta.


S-1







10.1110
.10

Form of Stock Option Agreement
    under Transmetas 2000 Equity Incentive Plan.**


S-1







10.1710
.11

Form of Stock Option Agreement
    (for Non-Employee Directors) under Transmetas 2000 Equity
    Incentive Plan.**


S-1







10-18 86




---



##### Table of Contents



Incorporated by ReferenceExhibit









Filing

FileNumber

Exhibit Title

Form

File No.

Exhibit

Date

Herewith10
.12

Form of Stock Option Agreement.
    Incorporated by reference to Exhibit 10.18 to
    Transmetas
    Form 10-K
    for the year ended December 31, 2000.**


10-K







10-1810
.14

Offer of Employment from Transmeta
    Corporation to Matthew R. Perry dated March 21, 2002. **


10-Q







10-2210
.15

Technology Transfer Services and
    Technology License Agreement, dated March 25, 2004, between
    Transmeta and NEC Electronics Corporation. +


10-K/A







10.17



04/29/200510
.16

LongRun2 Technology License
    Agreement, dated November 29, 2004, between Transmeta and
    Fujitsu 
    Limited.+


10-K/A







10.18



04/29/200510
.17

LongRun2 Technology License
    Agreement, dated January 20, 2005, between Transmeta and
    Sony Corporation.* +


10-K/A







10.19



04/29/200510
.18

Design Services Agreement, dated
    March 29, 2005, among Transmeta Corporation, Sony Computer
    Entertainment, Inc. and Sony Corporation. +


10-Q







10-20



05/25/200510
.19

Separation and Release Agreement,
    dated March 31, 2005, between Transmeta Corporation and
    Matthew R. Perry. **


10-Q







10.21



05/25/200510
.20+

Master Services Agreement and
    Intellectual Property Assignment, dated April 1, 2005, by
    and between Transmeta Corporation and Microsoft Corporation.


10-Q







10.22



08/15/200510
.21+

Series of six Schedule A
    agreements, dated May 11, 2005, by and between Transmeta
    Corporation and Microsoft Corporation.


10-Q







10.23



08/15/200510
.22+

Asset Purchase Agreement, dated
    May 26, 2005, by and between Transmeta Corporation and
    Culture.com Technology Limited.


10-Q







10.24



08/15/200510
.23+

License Agreement, dated
    May 26, 2005, by and between Transmeta Corporation and
    Culture.com Technology Limited.


10-Q







10.25



08/15/200510
.24

Non-employee Director Compensation
    Plan.


8-K











06/14/2005 87




---



##### Table of Contents



Incorporated by ReferenceExhibit









Filing

FileNumber

Exhibit Title

Form

File No.

Exhibit

Date

Herewith10
.25

Termination of Asset Purchase and
    License Agreements, dated February 6, 2006, by and between
    Transmeta Corporation and Culture.com Technology Limited.


8-K











02/09/200621
.01

Subsidiaries.


S-1







21.0123
.01

Consent of Burr, Pilger &
    Mayer LLP, Independent Registered Public Accounting Firm.


















X23
.02

Consent of Ernst & Young
    LLP, Independent Registered Public Accounting Firm.


















X24
.01

Power of Attorney. See Signature
    Page.


















X31
.01

Certification by Lester M. Crudele
    pursuant to
    Rule 13a-14(a)


















X31
.02

Certification by Ralph Harms
    pursuant to
    Rule 13a-14(a).


















X32
.01

Certification by Lester M. Crudele
    pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


















X32
.02

Certification by Ralph Harms
    pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


















X     **
    
    Management contract or compensatory arrangement.+
    
    Confidential treatment has been requested for portions of this
    exhibit. These portions have been omitted from this Report and
    have been filed separately with the Securities and Exchange
    Commission.  (b)
    Exhibits    (c)
    Financial
    Statement Schedules   88




---



##### Table of Contents



SIGNATURES      By:
    /s/  RALPH
    HARMS   Chief Financial Officer
 (Principal Financial Officer and
 Duly Authorized Officer)
    POWER OF
    ATTORNEY
  Form 10-K attorney-in-fact Form 10-K Form 10-K Form 10-K) attorneys-in-fact attorney-in-fact attorneys-in-fact attorneys-in-fact.
    Signature

Title

Date/s/  LESTER
    M. CRUDELE[Principal
    Executive Officer]
    Lester M. Crudele

Chief Executive Officer

March 29, 2007/s/  RALPH
    HARMS[Principal
    Financial Officer and Duly Authorized Officer]
    Ralph Harms

Chief Financial Officer

March 29, 2007/s/  MURRAY
    A. GOLDMANMurray
    A. Goldman

Director

March 29, 2007/s/  R.
    HUGH BARNESR.
    Hugh Barnes

Director

March 29, 2007/s/  ROBERT
    V. DICKINSONRobert
    V. Dickinson

Director

March 29, 2007/s/  DAVID
    R. DITZELDavid
    R. Ditzel

Director

March 29, 2007 89




---



##### Table of Contents



Signature

Title

Date/s/  WILLIAM
    P. TAIWilliam
    P. Tai

Director

March 29, 2007/s/  T.
    PETER THOMAST.
    Peter Thomas

Director

March 29, 2007/s/  RICK
    TIMMINSRick
    Timmins

Director

March 29, 2007  90




---



##### Table of Contents



EXHIBIT INDEX
  Incorporated by ReferenceExhibit









Filing

FileNumber

Exhibit Title

Form

File No.

Exhibit

Date

Herewith3
.01

Second Amended and Restated
    Certificate of Incorporation.


10-K







3.01



03/07/20013
.02

Restated Bylaws.


S-1



333-440303
.03

Certificate of Designations
    specifying the terms of the Series A Junior Participating
    Preferred Stock of Transmeta as filed with the Secretary of
    State of the State of Delaware.


8-A







3.02



01/16/20024
.01

Specimen common stock certificate.


S-1







4.014
.02

Fifth Restated Investors
    Rights Agreement dated March 31, 2000, between Transmeta,
    certain stockholders of Transmeta and a convertible note holder
    named therein.


S-1







4.024
.03

Form of Piggyback Registration
    Rights Agreement.


S-1







4.034
.04

Rights Agreement dated
    January 15, 2002 between Transmeta and Mellon Investor
    Services LLC as Rights Agent, which includes as Exhibit A
    the form of Certificate of Designations of Series A Junior
    Participating Preferred Stock, as Exhibit B the Summary of
    Stock Purchase Rights and as Exhibit C the Form of Rights
    Certificate.


8-A







4.01



01/16/200210
.01

Form of Indemnity Agreement.**


S-1







10.0110
.02

1995 Equity Incentive Plan.**


S-1







10.0210
.03

1997 Equity Incentive Plan.**


S-1







10.0310
.04

2000 Equity Incentive Plan.**


S-8







4.06



01/18/200210
.05

2000 Employee Stock Purchase
    Plan.**


S-8







4.08



05/28/200210
.06

Lease Agreement, dated
    November 1, 1995, between John Arrillaga, as trustee of
    John Arrillaga Family Trust, Richard T. Peery, as trustee
    of Richard T. Peery Separate Property Trust, and Transmeta,
    as amended by Amendment No. 1, dated January 29, 1997,
    and Amendment No. 2, dated April 2, 1998, between John
    Arrillaga, as trustee of John Arrillaga Survivors Trust
    (successor in interest to the Arrillaga Family Trust), Richard
    T. Peery, as trustee of Richard T. Peery Separate Property
    Trust, and Transmeta.


S-1







10.08 91




---



##### Table of Contents



Incorporated by ReferenceExhibit









Filing

FileNumber

Exhibit Title

Form

File No.

Exhibit

Date

Herewith10
.07

Lease Agreement, dated
    January 29, 1997, between John Arrillaga, as trustee of
    John Arrillaga Family Trust, Richard T. Peery, as trustee of
    Richard T. Peery Separate Property Trust, and Transmeta, as
    amended by Amendment No. 1, dated April 2, 1998,
    between John Arrillaga, as trustee of John Arrillaga
    Survivors Trust (successor in interest to the Arrillaga
    Family Trust), Richard T. Peery, as trustee of Richard T. Peery
    Separate Property Trust, and Transmeta.


S-1







10.0910
.08

Lease Agreement, dated
    April 2, 1998, between John Arrillaga, as trustee of John
    Arrillaga Survivors Trust, Richard T. Peery, as
    trustee of Richard T. Peery Separate Property Trust, and
    Transmeta.


S-1







10.1010
.09

Lease Agreement, dated
    April 2, 1998, between John Arrillaga, as trustee of John
    Arrillaga Survivors Trust, Richard T. Peery, as
    trustee of Richard T. Peery Separate Property Trust, and
    Transmeta.


S-1







10.1110
.10

Form of Stock Option Agreement
    under Transmetas 2000 Equity Incentive Plan.**


S-1







10.1710
.11

Form of Stock Option Agreement
    (for Non-Employee Directors) under Transmetas 2000 Equity
    Incentive Plan.**


S-1







10-1810
.12

Form of Stock Option Agreement.
    Incorporated by reference to Exhibit 10.18 to
    Transmetas
    Form 10-K
    for the year ended December 31, 2000.**


10-K







10-1810
.14

Offer of Employment from Transmeta
    Corporation to Matthew R. Perry dated March 21, 2002.**


10-Q







10-2210
.15

Technology Transfer Services and
    Technology License Agreement, dated March 25, 2004, between
    Transmeta and NEC Electronics Corporation. +


10-K/A







10.17



04/29/200510
.16

LongRun2 Technology License
    Agreement, dated November 29, 2004, between Transmeta and
    Fujitsu Limited.+


10-K/A







10.18



04/29/200510
.17

LongRun2 Technology License
    Agreement, dated January 20, 2005, between Transmeta and
    Sony Corporation.* +


10-K/A







10.19



04/29/2005 92




---



##### Table of Contents



Incorporated by ReferenceExhibit









Filing

FileNumber

Exhibit Title

Form

File No.

Exhibit

Date

Herewith10
.18

Design Services Agreement, dated
    March 29, 2005, among Transmeta Corporation, Sony Computer
    Entertainment, Inc. and Sony Corporation. +


10-Q







10-20



05/25/200510
.19

Separation and Release Agreement,
    dated March 31, 2005, between Transmeta Corporation and
    Matthew R. Perry.**


10-Q







10.21



05/25/200510
.20+

Master Services Agreement and
    Intellectual Property Assignment, dated April 1, 2005, by
    and between Transmeta Corporation and Microsoft Corporation.


10-Q







10.22



08/15/200510
.21+

Series of six Schedule A
    agreements, dated May 11, 2005, by and between Transmeta
    Corporation and Microsoft Corporation.


10-Q







10.23



08/15/200510
.22+

Asset Purchase Agreement, dated
    May 26, 2005, by and between Transmeta Corporation and
    Culture.com Technology Limited.


10-Q







10.24



08/15/200510
.23+

License Agreement, dated
    May 26, 2005, by and between Transmeta Corporation and
    Culture.com Technology Limited.


10-Q







10.25



08/15/200510
.24

Non-employee Director Compensation
    Plan.


8-K











06/14/200510
.25

Termination of Asset Purchase and
    License Agreements, dated February 6, 2006, by and between
    Transmeta Corporation and Culture.com Technology Limited.


8-K











02/09/200621
.01

Subsidiaries.


S-1







21.0123
.01

Consent of Burr, Pilger &
    Mayer LLP, Independent Registered Public Accounting Firm.


















X23
.02

Consent of Ernst & Young
    LLP, Independent Registered Public Accounting Firm.


















X24
.01

Power of Attorney. See Signature
    Page.


















X31
.01

Certification by Lester M. Crudele
    pursuant to
    Rule 13a-14(a).


















X31
.02

Certification by Ralph Harms
    pursuant to
    Rule 13a-14(a).


















X 93




---



##### Table of Contents



Incorporated by ReferenceExhibit









Filing

FileNumber

Exhibit Title

Form

File No.

Exhibit

Date

Herewith32
.01

Certification by Lester M. Crudele
    pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


















X32
.02

Certification by Ralph Harms
    pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


















X      **
    
    Management contract or compensatory arrangement.+
    
    Confidential treatment has been requested for portions of this
    exhibit. These portions have been omitted from this Report and
    have been filed separately with the Securities and Exchange
    Commission. 94