As filed with the Securities and Exchange Commission on January 9, 2007
Registration 333-138097
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form S-1
PRE-EFFECTIVE AMENDMENT NO. 2 TO
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
SIMTEK CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 3674 84-1057605
State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Classification Identification No.)
organization) Code Number)
4250 Buckingham Dr. #100
Colorado Springs, Colorado 80907
(719) 531-9444
(Address, including zip code, and telephone number,
including area code, of Principal Executive Offices)
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Harold Blomquist
Chief Executive Officer and President
Simtek Corporation
4250 Buckingham Dr. #100
Colorado Springs, CO 80907
(719) 531-9444
(Name, address, including zip code and telephone
number, including area code, of agent for service)
Copies to:
Hendrik F. Jordaan, Esq.
Garth B. Jensen, Esq.
Holme Roberts & Owen LLP
1700 Lincoln, Suite 4100
Denver, Colorado 80203
(303) 861-7000
Approximate Date of Commencement of Proposed Sale to the Public: From time
to time after the effective date of this Registration Statement.
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If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462 (d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
CALCULATION OF REGISTRATION FEE
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Title of each class of Amount to be Proposed maximum Proposed maximum Amount of
securities to be registered (1) offering price aggregate registration fee
registered per share offering price
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Common stock, $.0001 par 1,153,171 $6.00 (2) $6,919,026 $740
value per share
25,003 $3.30 (3) $82,510 $9
172,981 $5.40 (3) $934,097 $100
1,000,000 $7.50 (3) $7,500,000 $803
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Total 2,351,155 $15,435,633 $1,652 (4)
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(1) All shares are being registered for resale by the selling securityholders.
Comprises 1,153,171 shares of common stock currently issued and outstanding
and 1,197,984 shares of common stock issuable in the future upon exercise
of warrants with exercise prices of $3.30, $5.40 and $7.50 per share.
Pursuant to Rule 416(a), this Registration Statement shall also cover any
additional shares of common stock which become issuable by reason of any
stock dividend, stock split, recapitalization or other similar transaction
effected without the receipt of consideration which results in an increase
in the number of the registrant's outstanding shares of common stock.
(2) Estimated solely for purpose of calculating the registration fee pursuant
to Rule 457(c), based on the average of the bid and the asked prices of our
common stock as reported on the Over-the-Counter Bulletin Board on October
17, 2006.
(3) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(g).
(4) The registrant previously paid $1,251 pursuant to this Registration
Statement on Form S-1 (File No. 333-138097) on October 19, 2006; as such,
$401 is due at this time.
---------------------------------
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the registration statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be
changed. We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This preliminary
prospectus is not an offer to sell these securities nor does it seek an offer to
buy these securities in any jurisdiction where the offer or sale is not
permitted.
PROSPECTUS (SUBJECT TO COMPLETION) DATED JANUARY 9, 2007
2,351,155 Shares
SIMTEK CORPORATION
Common stock
This prospectus is being used to register 2,351,155 shares of Simtek
Corporation's common stock being offered by the selling security holders, which
include certain of our current officers and directors. Of the shares offered by
this prospectus 1,153,171 shares are currently issued and outstanding and
1,197,984 shares are issuable upon exercise of outstanding stock purchase
warrants with exercise prices ranging from $3.30 to $7.50 per share.
The selling security holders may from time to time offer and sell the
shares offered under this prospectus in a number of different ways and at
varying prices. We provide more information about how the selling security
holders may sell the shares in the section entitled "Plan of Distribution"
beginning on page 18. The selling security holders will receive all of the
proceeds from the sale of the shares. The selling security holders will pay all
underwriting discounts and selling commissions, if any, applicable to the sale
of the shares. We will not receive any proceeds from the sale of the shares,
although we will receive the exercise price payable to us upon the exercise of
the stock purchase warrants.
Our common stock is currently traded on the OTC Bulletin Board under
the symbol "SMTE", however, our common stock has been approved for listing on
The NASDAQ Capital Market and we expect to begin trading on NASDAQ on January
10, 2007 under the symbol "SMTK." On January 8, 2007, the closing sale price of
our common stock was $5.39 per share.
See "Risk Factors" beginning on page 4 to read about factors you should
consider before buying our stock.
Neither the Securities and Exchange Commission nor state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of the prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is January 9, 2007.
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TABLE OF CONTENTS
Summary.......................................................................3
Risk Factors..................................................................4
Special Note Regarding Forward-Looking Statements.............................10
Use of Proceeds...............................................................10
Selling Security Holders......................................................11
Description of Securities.....................................................16
Plan of Distribution..........................................................18
Legal Matters.................................................................19
Experts......................................................................19
Available Information.........................................................20
2
SUMMARY
THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS PROSPECTUS AND THE
DOCUMENTS INCORPORATED BY REFERENCE INTO THIS PROSPECTUS. THIS SUMMARY DOES NOT
CONTAIN ALL OF THE INFORMATION THAT MAY BE IMPORTANT TO YOU. PLEASE CAREFULLY
READ THE ENTIRE PROSPECTUS AND THE DOCUMENTS INCORPORATED BY REFERENCE.
Our Company
We develop, market and subcontract the production of nonvolatile
semiconductor memories. Nonvolatility prevents loss of programs and data when
electrical power is removed from the semiconductor. Our memory products feature
fast data access and programming speeds. Our products are targeted for use in
commercial or military electronic equipment markets. These markets are
industrial control systems, office automation, medical instrumentation,
telecommunication systems, cable television, and numerous military systems,
including communications, radar, sonar and smart weapons.
Our principal executive office is located at 4250 Buckingham Dr. #100;
Colorado Springs, Colorado 80907. Our telephone number is 719-531-9444.
Reincorporation and Reverse Stock Split
Effective on October 5, 2006, we completed a one-for-ten reverse stock
split of all of our issued and outstanding common stock as part of our
reincorporation into a Delaware corporation. Except as specifically indicated,
all of the share numbers and per share prices in this prospectus reflect the
reverse stock split.
In addition, incident to the reverse stock split and also effective on
October 5, 2006, the registrant completed a reincorporation from Colorado to
Delaware by converting Simtek Corporation, a Colorado corporation
("Simtek-Colorado"), into Simtek Corporation, a Delaware corporation
("Simtek-Delaware" or "Simtek"). Upon the reincorporation, each ten shares of
common stock of Simtek-Colorado issued and outstanding were automatically
converted into one share of common stock of Simtek-Delaware (thus accomplishing
the reverse split). As a result of the reincorporation, Simtek-Colorado and any
of its previously issued and outstanding shares of common stock ceased to exist.
Simtek-Delaware is the same entity as Simtek-Colorado: it has continued with all
of the assets, properties and liabilities of Simtek-Colorado. The
reincorporation did not result in any change in headquarters, business, jobs,
management, location of any of Simtek's offices or facilities.
The Offering
This offering relates to a total of 2,351,155 shares of our common stock
that may be resold by the selling security holders. Of the shares offered by
this prospectus 1,153,171 shares are currently issued and outstanding and
1,197,984 shares are issuable upon exercise of outstanding stock purchase
warrants with exercise prices ranging from $3.30 to $7.50 per share. The shares
offered include 103,356 shares held by (or issuable to) various of our officers
and 58,230 shares held by (or issuable to) affiliates of one of our directors.
See "Selling Security Holders."
We will receive no proceeds from this offering.
3
RISK FACTORS
YOU SHOULD CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS, AS WELL AS THE
OTHER INFORMATION IN THIS PROSPECTUS AND THE DOCUMENTS INCORPORATED BY REFERENCE
BEFORE BUYING OUR SHARES. THE SEMICONDUCTOR INDUSTRY IS CHANGING RAPIDLY.
THEREFORE, THE FORWARD-LOOKING STATEMENTS AND STATEMENTS OF EXPECTATIONS, PLANS
AND INTENT IN THIS PROSPECTUS AND THE DOCUMENTS INCORPORATED BY REFERENCE ARE
SUBJECT TO A GREATER DEGREE OF RISK THAN SIMILAR STATEMENTS REGARDING SOME OTHER
INDUSTRIES.
OUR LIMITED OPERATING CAPITAL AND OUR ABILITY TO RAISE ADDITIONAL MONEY MAY HARM
OUR ABILITY TO DEVELOP AND MARKET OUR PRODUCTS AS WELL AS SUPPORT FUTURE REVENUE
GROWTH
To date, we have required significant capital for product development,
subcontracted production and marketing. We have funded these from the sale of
products, the sale of product and technology licenses and from royalties as well
as from the sale of our convertible debt and equity securities.
In recent months, we have experienced significant revenue growth. In order
to support that growth, we must order more silicon wafers than we have
historically. The cash required for inventory purchases, including silicon
wafers, has been greater than the cash generated from sales. Therefore, our cash
requirements have been difficult to maintain. We may need more capital in the
future to develop new products and support higher revenue. We cannot guarantee
that we will be able to raise more capital on reasonable terms, if at all. If we
cannot, then we may not be able to purchase adequate amounts of inventory to
support revenue growth or to develop and market new products, causing our
financial position and stock price to deteriorate.
WE HAVE A HISTORY OF OPERATING LOSSES
We began business in 1987. Through June 30, 2006, we had accumulated losses
of approximately $48.5 million. Since July 1, 2000 and through June 30, 2006, we
realized net losses primarily as a result of accounting charges, from the
purchase of incomplete research and development in September 2000, decreased
revenue, decreased gross margins, increased competitive pressures and increased
research and development costs related to new product development. We may
continue to experience net operating losses in the future. Continuing net
operating losses could increase our need for additional capital in the future,
and hurt our stock price.
WE MIGHT NOT BE ABLE TO RE-GAIN COMPLIANCE WITH CERTAIN COVENANTS SET FORTH IN
OUR LOAN AGREEMENT WITH THE RENN CAPITAL GROUP; IF WE ARE UNABLE TO DO SO, THE
RENN CAPITAL GROUP COULD ACCELERATE THE $3 MILLION LOAN AND FORECLOSE ON THE
COLLATERAL THAT WE GRANTED TO IT
Our loan agreement with Renaissance Capital Growth and Income Fund III,
Inc., Renaissance US Growth Investment Trust PLC and US Special Opportunities
Trust PLC, or the RENN Capital Group, formerly Renaissance Capital Group, Inc.,
contains various financial covenants. As of June 30, 2006, we were not in
compliance with two of the covenants set forth in the loan agreement, which
covenants relate to the interest coverage ratio and debt to equity ratio. On
August 10, 2006, we received a waiver for the two covenants through July 1,
2007. However, significant variances in future actual operations from our
current estimates could result in the reclassification of this note to a current
liability. If the note becomes due and we cannot pay it, RENN Capital Group may
foreclose on the assets that we pledged as security for the note. This would
significantly harm our business.
IF WE CANNOT RECEIVE SILICON WAFERS WE REQUIRE TO MANUFACTURE OUR PRODUCTS FROM
OUR SILICON WAFER MANUFACTURERS AT THE VOLUMES OR THE PRICES WE REQUIRE, OUR
REVENUES, EARNINGS AND STOCK PRICE COULD SUFFER
We currently purchase the silicon wafers we require to build our
non-volatile memory products from three vendors, Chartered Semiconductor
Manufacturing Plc. of Singapore, DongbuAnam Semiconductors in Korea and ZFoundry
in Germany. Due to the volatility of the semiconductor market, we have limited
4
control over the pricing and availability of the wafers we require in order to
build our products. The risk of not receiving the products and pricing we need
to achieve our revenue objectives has escalated. If we are unable to obtain the
products and pricing we need from these vendors, our business could suffer.
THE UNCERTAINTY INVOLVED IN MANUFACTURING SEMICONDUCTORS MAY INCREASE THE COSTS
AND DECREASE THE PRODUCTION OF OUR PRODUCTS
In order for us to be profitable, we must drive our manufacturing costs
down and secure the production of sufficient product. Semiconductor
manufacturing depends on many factors that are complex and beyond our control
and often beyond the control of our subcontractors. These factors include
contaminants in the manufacturing environment, impurities in the raw materials
used and equipment malfunctions. Under our arrangements with our subcontractors,
our subcontractors pass on to us substantially all of their costs that are
unique to the manufacture of our products. Accordingly, these factors could
increase the cost of manufacturing our products and decrease our profits. These
factors could also reduce the number of semiconductor memories that our
subcontractors are able to make in a production run. If our subcontractors
produce fewer of our products, our revenues may decline.
DELAYS IN MANUFACTURING MAY NEGATIVELY IMPACT OUR REVENUE AND NET INCOME
It takes approximately four months for our subcontractors to manufacture
our semiconductor products. Any delays in receiving silicon wafers or completed
products from our subcontractors will delay our ability to deliver our products
to customers. This would delay sales revenue and could cause our customers to
cancel existing orders or not place future orders. These delays could occur at
any time and would adversely affect our net income.
WE DEPEND ON INDEPENDENT SALES REPRESENTATIVES AND DISTRIBUTORS TO SELL OUR
PRODUCTS AND THE TERMINATION OF ANY OF THESE RELATIONSHIPS MAY HARM OUR REVENUE
We use independent sales representatives and distributors to sell the
majority of our products. The agreements with these sales representatives and
distributors can be terminated without cause by either party with 30 to 90 days
written notice. If one or more of our sales representatives or distributors
terminates our relationship, we may not be able to find replacement sales
representatives and distributors on acceptable terms or at all. This could
affect our profitability. In addition, during 2005, 2004 and 2003 approximately
51%, 50% and 42% of our product sales, respectively, were to four distributors.
We cannot be certain that we will be able to maintain our relationship with
these distributors.
DELAYS IN OR FAILURE OF PRODUCT QUALIFICATION MAY HARM OUR BUSINESS
Prior to selling a product, we must establish that it meets expected
performance and reliability standards. As part of this testing process, known as
product qualification, we subject representative samples of products to a
variety of tests to ensure that performance in accordance with commercial,
industrial and military specifications, as applicable. If we are unable to
successfully accomplish product qualification for our future products, we will
be unable to sell these future products. Even with successful initial product
qualifications, we cannot be assured that we will be able to maintain product
qualification or achieve sufficient sales to meet our operating requirements.
OUR SUCCESS DEPENDS ON OUR ABILITY TO INTRODUCE NEW PRODUCTS
The semiconductor industry is characterized by rapid changes in technology
and product obsolescence. Our success in the semiconductor industry depends in
part upon our ability to expand our existing product families and to develop and
market new products. The technology we currently use may be made obsolete by
other competing or newly developed memory or other technologies. The development
of new semiconductor designs and technologies typically requires substantial
costs for research and development. Even if we are able to develop new products,
the success of each new product depends on several factors including whether we
selected the proper product and our ability to introduce it at the right time,
whether the product is able to achieve acceptable production yields and whether
the market accepts the new product. We cannot guarantee that we will be
successful in developing new products or whether any products that we do develop
will satisfy the above factors. In September 2003, we began shipping samples of
our 1 megabit family of nonvolatile semiconductor memory products. While we
achieved production qualification on the main product in September 2005 and the
remaining products in July 2006, we cannot assure you that we will not discover
5
technical problems or manufacturing concerns with these new products, that
demand will continue to develop for these new products or that we will be able
to continue to sell them at a profit.
THE CYCLICALITY OF THE SEMICONDUCTOR INDUSTRY MAY PREVENT US FROM MAINTAINING A
CONSISTENT REVENUE STREAM AND MAY HARM OUR STOCK PRICE
The semiconductor industry has historically experienced significant peaks
and valleys in sales volumes resulting in large variations of revenues and
resulting profits or losses. We do not have direct influence on the nature of
the broad semiconductor market. Variations in the revenues and profits within
the semiconductor industry may cause us to incur significant losses in the
future. If the stock prices of many semiconductor companies decrease, our stock
price may also suffer.
IF WE FAIL TO COMPLETE OUR AGREEMENT OR IF WE FAIL TO SUCCESSFULLY IMPLEMENT
PRODUCTS WITH CYPRESS SEMICONDUCTOR, OUR LIQUIDITY AND REVENUES MAY SUFFER
On May 5, 2005, we closed a production and development agreement with
Cypress Semiconductor Corporation to jointly develop an "S8" 0.13-micron
silicon-oxide-nitride-oxide-silicon (SONOS) nonvolatile memory production
process. The production and development agreement also calls for Cypress to
produce one or more Simtek products, as designated by Simtek, using the S8
process. We cannot assure you that we will be able to successfully develop and
bring to qualified volume production products based on the S8 process or that
Cypress will be able to develop embedded products contemplated to be developed
using Simtek's intellectual property. If the development of the S8 process is
delayed or fails, or if Cypress is unable to meet our production requirements,
we might not be able to meet potential future orders planned to be received from
our customers. This could significantly harm our revenue and future growth
potential. We also entered into an escrow agreement pursuant to which we
deposited $3 million into an escrow account in order to support and make certain
payments for the S8 process and product developments. If we fail to complete the
development and production agreement, we might forfeit our rights to the escrow
amount. This could harm our liquidity position.
OUR AGREEMENT WITH CYPRESS SEMICONDUCTOR CORPORATION MAY CONSUME OUR LIMITED
RESOURCES OF ENGINEERS AND CONSUME A SIGNIFICANT AMOUNT OF OUR WORKING CAPITAL
PREVENTING US FROM COMPLETING OTHER TASKS
Our production and development agreement with Cypress may consume a
considerable amount of our engineering resources, which may limit the resources
available to maintain or improve our production yields on our existing products
and develop other new and derivative products. In addition to these indirect
expenses related to our engineering resources, our obligations under the
production and development agreement will consume a significant amount of our
working capital until December 31, 2006. This may harm our business and stock
price.
CERTAIN OF OUR REGISTRATION RIGHTS AGREEMENTS PROVIDE FOR PENALTIES IF WE FAIL
TO FOLLOW CERTAIN PROCEDURES OR MAINTAIN AN EFFECTIVE REGISTRATION RELATED TO
THE SHARES PURCHASED BY SUCH INVESTORS
The Registration Rights Agreement entered into as part of the December 30,
2005 Securities Purchase Agreement amounting to $11,000,000 contained a cash
penalty provision if certain procedures are not followed or an effective
Registration Statement is not maintained for the shares purchased by investors
in such transaction. The cash penalties are 2% of the proceeds for each month
that a breach occurs. We cannot assure you that we will be able to follow the
required procedures or obtain or maintain such effective Registration Statement.
The Registration Rights Agreement entered into as part of the September 21,
2006 Securities Purchase Agreement amounting to $4,555,000 contained a provision
whereby the investors therein would receive certain amounts of penalty shares if
certain procedures are not followed or an effective Registration Statement is
not maintained for the shares purchased by the investors. The penalties are 2%
of the shares purchased for each month that a breach occurs. We cannot assure
you that we will be able to follow the required procedures or obtain or maintain
such effective Registration Statement.
6
THE INTENSE COMPETITION IN THE SEMICONDUCTOR INDUSTRY MAY CAUSE US TO LOSE SALES
REVENUE TO OTHER SUPPLIERS
There is intense competition in the semiconductor industry. We experience
competition from a number of domestic and foreign companies, most of which have
significantly greater financial, technical, manufacturing and marketing
resources than we have. Our competitors include major corporations with
worldwide silicon wafer fabrication facilities and circuit production facilities
and diverse, established product lines. We also compete with companies, such as
Ramtron International Corporation, attempting to obtain a share of the market
for our product families. If any of our new products achieve market acceptance,
other companies may sell competitive products at prices below ours. This would
have an adverse effect on our operating results.
THE LOSS OF KEY EMPLOYEES COULD MATERIALLY AFFECT OUR FINANCIAL RESULTS
Our success depends in large part on our ability to attract and retain
qualified technical and management personnel. There are limited personnel
trained in the semiconductor industry resulting in intense competition for these
personnel. If we lose any of our key personnel, this could have a material
adverse affect on our ability to conduct our business and on our financial
results.
OUR PATENTS MAY NOT PROVIDE US EFFECTIVE INTELLECTUAL PROPERTY PROTECTION; THIS
COULD HARM OUR BUSINESS
We have been issued 17 U.S. patents (and assigned one other U.S. patent and
three German patents) relating to specific aspects of our current products. We
have also applied outside the United States for patents on our technology. We
are not sure that any of the patents for which we have applied will be issued
or, even if they are issued, will provide us with meaningful protection from
competition. We may also not have the money required to maintain or enforce our
patent rights. Notwithstanding our patents, other companies may obtain patents
similar or relating to our patents.
We seek to protect a significant portion of our intellectual property as
trade secrets, rather than patents. Unlike patents, trade secrets must remain
confidential in order to retain protection as proprietary intellectual property.
We cannot assure you that our trade secrets will remain confidential. If we lose
trade secret protection, our business could suffer.
IF OUR PRODUCTS AND TECHNOLOGY INFRINGE ON THIRD PARTY PATENTS, OUR PRODUCT
SALES OR GROSS MARGINS MAY SUFFER
We have not determined whether our products are free from infringement of
others' patents. If patent infringement claims are asserted against us and are
upheld, we will try to modify our products so that they are non-infringing. If
we are unable to do so, we will have to obtain a license to sell those products
or stop selling the products for which the claims are asserted. We may not be
able to obtain the required licenses. Any successful infringement claim against
us, our failure to obtain any required license or requirement for us to stop
selling any of our products, may force us to discontinue production and shipment
of these products. This may result in reduced product sales and harm our
revenues.
In 1998, we received notice of a claim for an unspecified amount from a
foundation that owns approximately 180 patents and 70 pending applications. The
foundation claimed that some of the machines and processes used in the building
of our semiconductor devices infringe on the foundation's patents. In April
1999, we reached an agreement with the foundation for us to purchase a
nonexclusive license of the foundation's patents, based on our product offerings
and sales forecast at that time. If our products or actual sales revenue vary
significantly from the time of the agreement, we may be subject to additional
payments.
In late 2002, we received notice of possible patent infringement from a
corporation that has acquired a portfolio of patents. We have reviewed the claim
and believe there are no potential infringements. We have received no further
notification from this corporation. While there can be no assurances, if there
are any infringements, we believe we will be able to enter into a licensing
agreement with such company without any material impact on us.
7
FOREIGN CURRENCY EXCHANGE RATE FLUCTUATIONS MAY INCREASE OUR COSTS, LOWER OUR
REVENUES AND CAUSE LOSS OF CUSTOMERS TO OUR COMPETITORS
We purchase materials, including silicon wafers, from outside the United
States. Sales to customers located outside of the United States for the years
ended December 31, 2005, 2004 and 2003 were 74%, 71% and 63%, respectively. We
operate using United States dollars as the functional currency. Changes in
foreign currency exchange rates can reduce our revenues and increase our costs.
For example, our subcontractors may increase the prices they charge us, on a per
purchase order basis, for silicon wafers if the United States dollar weakens.
Any large exchange rate fluctuation could affect our ability to compete with
manufacturers who operate using foreign currencies. We do not try to reduce our
exposure to these exchange rate risks by using hedging transactions. Although we
have not had any material losses due to exchange rate fluctuations over the last
three years, we cannot assure you that we will not incur significant losses in
the future.
BECAUSE OUR COMMON STOCK IS CURRENTLY LISTED ONLY ON THE OTC ELECTRONIC BULLETIN
BOARD, IT WILL BE MORE DIFFICULT TO SELL OUR COMMON STOCK
Although our common stock has been approved for listing on The NASDAQ
Capital Market and we expect to begin trading on NASDAQ on January 10, 2007
under the symbol "SMTK", our common stock is currently listed on the OTC
Electronic Bulletin Board under the symbol "SMTE." Our common stock was listed
on the Nasdaq Small-Cap Market until July 18, 1995, but, because we no longer
met Nasdaq's listing requirements, our common stock transferred to the OTC
Electronic Bulletin Board as mandated by Nasdaq rules. We may not be able to
sustain the requirements for relisting our common stock on Nasdaq or listing on
any other exchange in the near future or in the longer term.
Securities that are not listed on the Nasdaq Capital Market or other
exchange are subject to a Securities and Exchange Commission rule that imposes
special requirements on broker-dealers who sell those securities to persons
other than their established customers and accredited investors. The
broker-dealer must determine that the security is suitable for the purchaser and
must obtain the purchaser's written consent prior to the sale. These
requirements may make it more difficult for our security holders to sell their
securities and may affect our ability to raise more capital. It may also make it
harder for you to sell our stock than the stock of some other companies.
IF WE ISSUE SECURITIES AT LOW PRICES IN THE FUTURE, SOME OF OUR SECURITY HOLDERS
MAY BE ENTITLED TO ACQUIRE MORE OF OUR SECURITIES, WHICH MAY DILUTE AND HARM THE
HOLDERS OF OUR COMMON STOCK
We may be obligated under agreements with certain of our security holders
to issue to them additional securities in exchange for little or no
consideration if we sell our securities in the future at or below certain
prices. The issuance of such securities could dilute and harm the holders of our
common stock.
BECAUSE WE DO NOT INTEND TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE, YOUR
INVESTMENT RETURN MAY BE LIMITED
We have never paid cash dividends on our common stock. We do not expect to
pay dividends in the foreseeable future. We intend to use any earnings to
finance growth. You should not expect to receive dividends on your shares of
common stock.
IF OUR BOARD OF DIRECTORS AUTHORIZES THE ISSUANCE OF PREFERRED STOCK, HOLDERS OF
OUR COMMON STOCK COULD BE DILUTED AND HARMED
Our board of directors has the authority to issue up to 200,000 shares of
preferred stock in one or more series and to establish the preferred stock's
voting powers, preferences and other rights and qualifications without any
further vote or action by the shareholders. The issuance of preferred stock by
our board of directors could dilute and harm the rights of the holders of our
common stock. It could potentially be used to discourage attempts by others to
obtain control of us through merger, tender offer, proxy contest or otherwise by
making such attempts more difficult to achieve or more costly. Given our present
capital requirements, it is possible that we may need to raise capital through
the sale of preferred stock in the future.
8
OUR CERTIFICATE OF INCORPORATION AND DELAWARE LAW MAY OPERATE AS ANTI-TAKEOVER
PROTECTIONS AND THUS MAY DISCOURAGE TAKEOVER ATTEMPTS AND/OR DEPRESS THE MARKET
PRICE OF OUR COMMON STOCK
We have opted to be governed, in our Delaware certificate of incorporation,
by Section 203 of the Delaware General Corporation Law, which provides for a
three-year moratorium on certain business combination transactions with
"interested stockholders" (generally, persons who beneficially own 15% or more
of the corporation's outstanding voting stock). Although we believe that Section
203 will encourage any potential acquirer to negotiate with our board of
directors, Section 203 also might have the effect of limiting the ability of a
potential acquirer to make a two-tiered bid for the company in which all
stockholders would not be treated equally. In addition, Section 203 gives the
board the power to reject a proposed business combination in certain
circumstances, even though a potential acquirer may be offering a substantial
premium for our common stock over the then-current market price. Section 203
would also discourage certain potential acquirers who are unwilling to comply
with its provisions.
Because a proposed amendment to our certificate of incorporation may not be
submitted to a vote of shareholders without the approval of the board of
directors, amending or removing any provisions in our certificate of
incorporation that have anti-takeover effects requires the consent of the board
of directors, which in turn may have anti-takeover effects.
STANDARDS FOR COMPLIANCE WITH SECTION 404 OF THE SARBANES-OXLEY ACT OF 2002 ARE
UNCERTAIN, AND IF WE FAIL TO COMPLY IN A TIMELY MANNER, OUR BUSINESS COULD BE
HARMED AND OUR STOCK PRICE WOULD DECLINE.
Rules adopted by the Securities and Exchange Commission pursuant to Section
404 of the Sarbanes-Oxley Act require annual assessment of our internal control
over financial reporting, and attestation of our assessment by our independent
auditors. This requirement may apply to our Annual Report on Form 10-K for the
fiscal year ending December 31, 2007. The standards that must be met for
management to assess the internal control over financial reporting as effective
are new and complex, and require significant documentation, testing and possible
remediation to meet the detailed standards. We may encounter problems or delays
in completing activities necessary to make an assessment of our internal control
over financial reporting. In addition, the attestation process by our
independent auditors is new and we may encounter problems or delays in
completing the implementation of any requested improvements or remediation and
receiving an attestation of our assessment by our independent auditors. We can
provide no assurance as to our, or our independent auditors', conclusions at
December 31, 2007, with respect to the effectiveness of our internal control
over financial reporting. The above factors creates a risk that we, or our
independent auditors, will not be able to conclude at December 31, 2007 that our
internal controls over financial reporting are effective as required by the
Sarbanes-Oxley Act. If we cannot assess our internal control over financial
reporting as effective, or if our independent auditors are unable to provide an
unqualified attestation report on such assessment, investors could lose
confidence in our reported financial information and the trading price of our
stock could drop.
THE REVERSE SPLIT MAY NOT RESULT IN AN INCREASE IN THE STOCK PRICE AND MAY NOT
LEAD TO ANY OF THE BENEFITS (INCLUDING MAINTENANCE OF A LISTING ON THE NASDAQ
CAPITAL MARKET) THAT WE INTENDED IN DECIDING TO EFFECT SUCH REVERSE SPLIT
There can be no assurance that the total market capitalization of our
common stock (the aggregate value of all our common stock at the then market
price) will not drop back below the total market capitalization before the
reverse split, that the per share market price of our common stock will not drop
back below the per share market price before the reverse split or that the per
share market price of our common stock will increase to (or once increased to,
remain at) a price that is inversely proportionate to the one-for-ten reduction
in the number of shares of common stock outstanding before the reverse split.
The per share market price of our common stock may not be high enough to
attract institutional investors or investment funds or to satisfy the investing
guidelines of such investors and, consequently, the trading liquidity of our
common stock may not improve. In addition, the per share market price of our
common stock may not be high enough to allow us to maintain the listing
requirements of the NASDAQ Capital Market.
9
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains some "forward-looking statements" as defined in
the Private Securities Litigation Reform Act of 1995 and information relating to
us that are based on the beliefs of our management, as well as assumptions made
by and the information currently available to our management. When used in this
prospectus, the words "estimate," "project," "believe," "anticipate," "intend,"
"expect" and similar expressions are intended to identify forward-looking
statements. These statements reflect our current views with respect to future
events and are subject to risks and uncertainties that could cause actual
results to differ materially from those contemplated in these forward-looking
statements, including those risks discussed in this prospectus.
You are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this prospectus. Except for
special circumstances in which a duty to update arises when prior disclosure
becomes materially misleading in light of subsequent circumstances, we do not
intend to update any of these forward-looking statements to reflect events or
circumstances after the date of this prospectus or to reflect the occurrence of
unanticipated events.
USE OF PROCEEDS
This prospectus covers 2,351,155 shares. All of these shares are being
offered by the selling security holders, which include some of our officers and
affiliates of one of our directors. We will not receive any proceeds from the
sale of the shares.
10
SELLING SECURITY HOLDERS
Beneficial ownership is determined in accordance with the rules and
regulations of the Securities and Exchange Commission. Under these rules, a
person is deemed to beneficially own a security if that person has or shares
voting power or investment power with respect to that security, or has the right
to acquire beneficial ownership of that security within 60 days, including
through the exercise of any option, warrant or other right or the conversion of
any other security. Percentage of beneficial ownership of common stock prior to
and after the offering is based on 16,147,746 shares of common stock outstanding
as of January 2, 2006. Securities that are exercisable or convertible into
shares of our common stock within 60 days of the date of this prospectus are
deemed outstanding for computing the percentage of the person or entity holding
such securities but are not deemed outstanding for computing the percentage of
any other person or entity.
The following table sets forth information about the selling security
holders who are selling shares of our common stock pursuant to this prospectus.
Information about the natural persons who beneficially own our securities held
by the entities listed in the table below has been provided to us by these
entities.
Number of
Shares Number of Percentage
Beneficially Number of Shares of Class
Owned Before Shares Following the Following the
Name and Address of Selling Security Holders Offering Offered Offering (1) Offering (1)
-------------------------------------------- ------------ --------- ------------ ------------
Cypress Semiconductor Corporation (2) 3,179,644 1,000,000 2,179,644 12.35%
3901 North First Street
San Jose, CA 95134-1599
Crestview Capital Master LLC (3) 2,677,113 247,469 2,429,644 15.05%
95 Revere Drive, Suite A
Northbrook, IL 60062
Big Bend XXVII Investments, L.P. (4) 1,553,956 116,456 1,437,500 8.90%
3401 Armstrong Avenue
Dallas, TX 75205-4100
SF Capital Partners Ltd. (5) 1,068,965 58,228 1,010,737 6.26%
c/o Stark Offshore Management, LLC
3600 South Lake Drive
St. Francis, WI 53235
Renaissance Capital Growth & Income Fund III, Inc. (6) 1,107,940 154,160 1,107,940 6.68%
c/o RENN Capital Group
8080 N. Central Expressway, Suite 210-LB59
Dallas, TX 75206
Renaissance US Growth Investment Trust PLC (7) 1,107,940 154,160 1,107,940 6.68%
c/o RENN Capital Group
8080 N. Central Expressway, Suite 210-LB59
Dallas, TX 75206
US Special Opportunities Trust PLC (8) 1,007,176 153,396 853,780 5.15%
c/o RENN Capital Group
8080 N. Central Expressway, Suite 210-LB59
Dallas, TX 75206
11
Premier RENN US Emerging Growth Fund Ltd. (9) 145,571 145,571 0 *
c/o RENN Capital Group
8080 N. Central Expressway, Suite 210-LB59
Dallas, TX 75206
Straus Partners, LP (10) 148,853 58,228 90,625 *
605 Third Avenue
New York, NY 10158
Straus GEPT Partners, LP (10) 148,853 58,228 90,625 *
605 Third Avenue
New York, NY 10158
Steven Hayes 87,979 (11) 58,228 29,751 *
1 Cove View Road
Cape Elizabeth, ME 04107
Brian Alleman 65,879 (12) 36,393 29,486 *
12861 Serenity Park Dr.
Colorado Springs, CO 80921
The A.J. Stein Family Trust (13) 29,115 29,115 0 *
410 Old Oak Court
Los Angeles, CA 94022
The A.J. Stein Family Partnership (14) 29,115 29,115 0 *
410 Old Oak Court
Los Angeles, CA 94022
Brian Stein 29,115 29,115 0 *
1865 Doris Drive
Menlo Park, CA 94025
RBC Dain Rauscher fbo Chris McComb IRA (15) 26,825 (16) 8,735 18,090 *
c/o John C. McComb
3620 Compass Point
Colorado Springs, CO 80906
Toni Stein 14,558 14,558 0 *
6233 E. Indian Bend Road
Paradise Valley, AZ 85253
* Less than 1%
(1) For some of the selling security holders, we have registered, under a
separate registration statement, some or all of the shares included in the
columns entitled, "Number of Shares Following the Offering" and "Percentage of
Class Following the Offering."
(2) Cypress Semiconductor Corporation is a publicly traded company listed on the
New York Stock Exchange; no one natural person owns more than 5% of Cypress'
common stock.
12
(3) Crestview Capital Partners, LLC ("Crestview Partners") serves as the
investment manager or general partner of Crestview Capital Master, LLC
("Crestview"), and as such has been granted investment discretion over
investments including the common stock owned by Crestview. As a result of its
role as investment manager to Crestview, Crestview Partners may be deemed to be
the beneficial owner, as defined in Rule 13d-3 under the Securities Exchange Act
of 1934, of Common Stock held by Crestview. However, Crestview Partners does not
(except indirectly as the general partner of Crestview) have the right to
receive any dividends from, or the proceeds from the sale of, the Common Stock
held by Crestview and disclaims any ownership associated with such rights.
Currently, Stewart Flink, Robert Hoyt and Daniel Warsh, in their capacity as
managers of Crestview Partners, have delegated authority regarding the portfolio
management decisions of Crestview Partners with respect to the Common Stock
owned by Crestview. None of such persons has any legal right to maintain such
delegated authority. As a result of such delegated authority, Messrs. Flink,
Hoyt and Warsh may be deemed to be the beneficial owners of Common Stock held by
Crestview. However, neither of Messrs. Flink, Hoyt and Warsh has any right to
receive any dividends from, or the proceeds from the sale of, the Common Stock
held by Crestview and disclaim beneficial ownership of such shares of Common
Stock.
(4) The limited partners of Big Bend XXVII Investments, L.P. are Mr. Morton H.
Meyerson and Marti H. Meyerson EDS Trust, each of which controls 49.5% of Big
Bend XXVII Investments, L.P. The general partner of Big Bend XXVII Investments,
L.P. is 2M Companies, Inc., which is controlled by Mr. Morton H. Meyerson.
(5) Michael A. Roth and Brian J. Stark exercise voting and investment authority
over all of the shares beneficially owned by SF Capital Partners Ltd., but
disclaim beneficial ownership of such shares.
(6) Renaissance Capital Growth & Income Fund III, Inc. is the beneficial owner
of the shares indicated. RENN Capital Group, Inc. is the investment adviser to
Renaissance Capital Growth & Income Fund III, Inc. and has shared voting power
and dispositive power over the shares. Russell Cleveland is President of RENN
Capital Group, Inc.
(7) Renaissance US Growth Investment Trust PLC is the beneficial owner of the
shares indicated. RENN Capital Group, Inc. is the investment adviser to
Renaissance US Growth Investment Trust PLC and has shared voting power and
dispositive power over the shares. Russell Cleveland is President of RENN
Capital Group, Inc.
(8) US Special Opportunities Trust PLC is the beneficial owner of the shares
indicated. RENN Capital Group, Inc. is the investment adviser to US Special
Opportunities Trust PLC and has shared voting power and dispositive power over
the shares. Russell Cleveland is President of RENN Capital Group, Inc.
(9) Premier RENN US Emerging Growth Fund Ltd. is the beneficial owner of the
shares indicated. RENN Capital Group, Inc. is the investment adviser to Premier
RENN US Emerging Growth Fund Ltd. and has shared voting power and dispositive
power over the shares. Russell Cleveland is President of RENN Capital Group,
Inc.
(10) The Managing Principal of each of Straus Partners, LP and Straus GEPT
Partners, LP is Mickey Straus.
(11) Includes 18,751 shares issuable upon exercise of options that are presently
exercisable or exercisable within the next 60 days.
(12) Includes 22,536 shares issuable upon exercise of options that are presently
exercisable or exercisable within the next 60 days.
(13) The natural persons that beneficially own the securities held by The A.J.
Stein Family Trust are Alfred J. Stein and Arline Stein, trustees for the trust.
(14) The natural person that beneficially owns the securities held by The A.J.
Stein Family Partnership is Alfred J. Stein, trustee of the partnership.
(15) The natural person that beneficially owns the securities held by RBC Dain
Rauscher fbo Chris McComb IRA is John Christopher McComb (aka Chris McComb).
(16) Includes 18,090 shares issuable upon exercise of presently exercisable
options.
13
On July 1, 2002, we received $3,000,000 from the RENN Capital Group in
return for issuing 7.5% convertible debentures with an aggregate principal
amount of $3,000,000. The convertible debentures have a maturity date of June
28, 2009 and originally had a conversion rate of $0.312 (pre-reverse split),
which would have resulted in 9,615,384 (pre-reverse split) shares being issued
upon conversion. In connection with the sale of $11,000,000 of our common stock
on December 30, 2005, instead of lowering the conversion price of the 2002
convertible debentures, as required by the terms of the 2002 convertible
debentures, from $0.312 (pre-reverse split) per share to $0.16 (pre-reverse
split) per share as a result of the December 30, 2005 offering at $0.16
(pre-reverse split) per share, we agreed with the RENN Capital Group that the
conversion price would only be lowered to $0.22 (pre-reverse split) per share as
a result of the December 30, 2005 offering. Upon completion of the reverse split
on October 5, 2006, the conversion price was increased from $0.22 to $2.20.
Consequently, the number of shares issuable upon conversion of the 2002
debentures is 1,227,273 (which number takes into account the conversion into
common stock, on or around July 28, 2006, of $100,000 of the principal amount by
each of Renaissance Capital Growth & Income Fund III, Inc., Renaissance US
Growth Investment Trust PLC and US Special Opportunities Trust PLC). Also on
December 30, 2005, we issued 937,500 shares of common stock to the RENN Capital
Group in exchange for $1,500,000. On November 7, 2003, we received $1,500,000
from the RENN Capital Group in return for issuing 165,201 shares of our common
stock and warrants to acquire 75,000 shares of our common stock. These warrants
have 5-year terms and exercise prices of $12.50 per share for 37,500 shares and
$15.00 per share for 37,500 shares. On June 28, 2005, we issued warrants (with a
5-year term) to purchase 20,000 shares of our common stock with an exercise
price of $5.00 per share to the RENN Capital Group in exchange for a waiver of
certain provisions relating to the 7.5% debentures. None of the shares that we
are registering in this prospectus relate to these July 1, 2002, November 7,
2003, June 28, 2005 and December 30, 2005 transactions. One of our directors,
Mr. Robert Pearson, holds the position of Senior Vice President of RENN Capital
Group, Inc.
On October 12, 2004, we received $2,000,000 from SF Capital Partners Ltd.
in return for issuing shares of our common stock and warrants (with 5-year
terms) to acquire 206,399 shares of our common stock. The warrants issued to SF
Capital Partners Ltd. originally had an exercise price of $0.627 (pre-reverse
split) per share. In connection with the sale of $11,000,000 of our common stock
on December 30, 2005, we agreed with SF Capital Partners Ltd., among others,
that in exchange for their waiver of certain participation rights held by them
in connection with the December 30, 2005 offering, the exercise price of their
warrants would be lowered from $0.627 (pre-reverse split) per share to $0.265
(pre-reverse split) per share. As a result of the reverse split, the exercise
price of these warrants has increased from $0.265 per share to $2.65 per share.
Also on December 30, 2005, we issued 625,000 shares to SF Capital Partners Ltd.
in exchange for $1,000,000. As of the date of this prospectus, SF Capital
Partners Ltd. owns 1,010,737 shares as a result of the October 12, 2004 and
December 30, 2005 transactions, and has a warrant to purchase 206,399 shares
with an exercise price of $2.65 per share as a result of the October 12, 2004
transaction. By its terms, the warrant issued to SF Capital Partners Ltd. may
not be exercised if the exercise would cause SF Capital Partners Ltd. to be a 5%
or more holder of all of our outstanding common stock; however, SF Capital
Partners Ltd. may waive such restriction on 61 days notice to us. Given the
number of shares of our common stock that SF Capital Partners Ltd. holds as of
the date of this prospectus, SF Capital Partners Ltd. cannot exercise such
warrant unless it waives the restriction and gives us 61 days notice of the
waiver; as such, the 206,399 shares issuable under the warrant are not included
in any of the columns in SF Capital Partner Ltd.'s entry in the Selling Security
Holder table above. None of the shares that we are registering relate to the
October 12, 2004 and December 30, 2005 transactions with SF Capital Partners
Ltd.
On May 4, 2005, we received $4,000,000 from Cypress in return for issuing
674,082 shares of our common stock and warrants to acquire 505,562 shares of our
common stock. The warrants have a 10-year term and an exercise price of $7.772
per share. On March 24, 2006, we entered into a License and Development
Agreement with Cypress pursuant to which, among other things, Cypress agreed to
license certain intellectual property from us to develop and manufacture
standard, custom and embedded nvSRAM products, we agreed with Cypress to
14
co-develop certain nvSRAM products and Cypress agreed to pay us $4 million in
pre-paid royalties paid in certain installments. Under the License and
Development Agreement, we issued on March 24, 2006 a warrant (with a 10-year
term) granting Cypress the right to purchase 1 million shares of our common
stock. We also issued, upon payment by Cypress of an installment of pre-paid
royalties on June 30, 2006, a warrant (with a 10-year term) granting Cypress the
right to purchase 500,000 shares of our common stock and we issued, upon payment
by Cypress of an installment of pre-paid royalties on December 18, 2006, a
warrant (with a 10-year term from the date of issuance) granting Cypress the
right to purchase 500,000 shares of our common stock. The exercise price for
each of these warrants is $7.50 per share. Of the 2,351,155 shares that we are
registering in this prospectus, 1,000,000 shares relate to the warrants that we
issued to Cypress on June 30, 2006 and December 18, 2006.
On December 30, 2005, as part of our sale of $11,000,000 of our common
stock, we issued (in addition to the shares issued to SF Capital Partners Ltd.
and the RENN Capital Group on such date, as described above, and in addition to
certain other investors): Crestview Capital Master LLC 2,468,750 shares in
exchange for $3,950,000; Straus Partners, LP 78,125 shares for $125,000; Straus
GEPT Partners, LP 78,125 shares for $125,000; and Big Bend XXVII Investments,
L.P. 1,437,500 shares for $2,300,000. None of the shares issued in the December
30, 2005 transaction are being registered in this prospectus.
On May 26, 2006, we issued to the RENN Capital Group warrants to purchase a
total of 20,002 shares of Simtek common stock, which warrants were granted in
exchange for the agreement by such funds to subordinate to Wells Fargo their
first priority security interest in Simtek's assets in connection with the $3.6
million revolving line of credit entered into by Simtek with Wells Fargo Bank on
June 2, 2006. Also on May 26, 2006, Simtek issued to the RENN Capital Group
warrants to purchase a total of 5,001 shares of Simtek common stock, which
warrants were granted in exchange for the agreement by such funds to waive
compliance by Simtek with certain covenants of the 7.5% convertible debentures.
The May 26, 2006 warrants (which have a term of five years) have an exercise
price of $3.30 per share. Of the 2,351,155 shares that we are registering in
this prospectus, 25,003 relate to these May 26, 2006 warrants.
On September 21, 2006, we closed a $4,555,000 equity financing, issuing the
amounts of shares of common stock and warrants to purchase shares of common
stock indicated to the following investors: RENN Capital Group and Premier RENN
US Emerging Growth Fund Ltd. (506,332 shares and 75,952 warrants); Crestview
Capital Master LLC (215,190 shares and 32,279 warrants); Big Bend XXVII
Investments, L.P. (101,266 shares and 15,190 warrants); Straus Partners, LP
(50,633 shares and 7,595 warrants); Straus GEPT Partners, LP (50,633 shares and
7,595 warrants); A.J. Stein Family Trust (25,317 shares and 3,798 warrants);
A.J. Stein Family Partnership (25,317 shares and 3,798 warrants); Brian Stein
(25,317 shares and 3,798 warrants); Toni Stein (12,659 shares and 1,899
warrants); Steven Hayes (50,633 shares and 7,595 warrants); Brian Alleman
(31,646 shares and 4,747 warrants); John C. McComb (7,595 shares and 1,140
warrants); and SF Capital Partners Ltd. (50,633 shares and 7,595 warrants). The
warrants issued have a term of five years and have an exercise price of $5.40
per share. By the terms of each of these warrants, a holder may not exercise its
warrant to the extent such exercise would result in such holder being a 10% or
more beneficial owner of all of our outstanding common stock. Certain of the
selling securityholders may be prevented from exercising all or part of the
warrants held by them as a result of this restriction; nevertheless, the shares
issuable under these warrants are included for all applicable selling
securityholders in the Selling Security Holder table above. Of the 2,351,155
shares that we are registering in this prospectus, 1,326,152 relate to this
September 21, 2006 transaction. One of our directors, Mr. Robert Pearson, holds
the position of Senior Vice President of RENN Capital Group, Inc. Another of our
directors, Alfred J. Stein, is a trustee of the A.J. Stein Family Trust and a
partner of The A.J. Stein Family Partnership. Steven Hayes is our Vice President
of Sales, Brian Alleman is our Chief Financial Officer, Secretary and Vice
President and John C. McComb is our Vice President of Worldwide Operations.
15
DESCRIPTION OF SECURITIES
Simtek is authorized to issue, pursuant to its Delaware Certificate of
Incorporation, 30,000,000 shares of common stock, par value $0.0001 per share,
and 200,000 shares of preferred stock, par value $0.0001 per share. The
following is a summary of the material terms of our capital stock. You should
refer to our Certificate of Incorporation and Bylaws and the agreements
described below for more detailed information.
Common Stock
Each share of common stock entitles its record holder to one vote on all
matters to be voted on by the stockholders of Simtek. When a quorum is present
at any meeting of stockholders, a plurality of the stockholders shall decide the
election of directors and a majority of the stockholders shall decide any other
question, unless the question is one upon which Delaware law, the Certificate of
Incorporation or the Bylaws require a different vote.
The board of directors of Simtek consists of six directors, all of whom are
elected annually at the annual meeting of stockholders, and is not classified.
No provision of our Certificate of Incorporation or Bylaws provides for
cumulative voting in the case of the election of directors or on any other
matter.
Each holder of common stock of Simtek is entitled to share pro rata in any
dividends paid on the common stock in funds legally available for that purpose,
when, as and if declared by the board of directors of Simtek in its discretion.
The shares of common stock of Simtek have no preferred dividend rights or any
conversion, redemption or other rights, or any rights to payment from any
sinking or similar fund. The shares of common stock also do not have any
preemptive, subscription or other similar rights. There are no restraints in the
Certificate of Incorporation or Bylaws of Simtek on the right of holders of
shares of common stock to sell or otherwise alienate their shares of stock in
Simtek. There are no provisions in the Certificate of Incorporation or Bylaws of
Simtek providing for any calls or assessments against holders of shares of
common stock or discriminating against any existing or prospective holder of
shares of common stock as a result of such security holder owning a substantial
amount of securities. Upon liquidation, dissolution or winding up of Simtek,
each holder of shares of common stock will be entitled to receive a pro rata
share of the assets of Simtek, after payment of all Simtek's debts and
liabilities and subject to any applicable liquidation or other payments owed to
preferred stockholders.
Preferred Stock
The shares of preferred stock of Simtek are not designated by series, and
there are no currently outstanding shares of preferred stock. Simtek may issue
preferred stock from time to time in one or more series. The board of directors
is authorized, without the approval of existing stockholders, to authorize from
time to time the issuance of one or more classes or series of preferred stock
and to fix the designations, powers, preferences and relative, participating,
optional or other rights, if any, and the qualifications, limitations or
restrictions thereof, if any, with respect to each such class or series of
preferred stock and the number of shares constituting each such class or series,
and to increase or decrease the number of shares of any such class or series to
the extent permitted by law. The issuance of preferred stock by our board of
directors could dilute and harm the rights of the holders of our common stock.
It could potentially be used to discourage attempts by others to obtain control
of us through merger, tender offer, proxy contest or otherwise by making such
attempts more difficult to achieve or more costly.
Anti-Takeover Provisions
Simtek, as discussed in the preceding paragraph, may issue preferred stock
from time to time in one or more series, pursuant to certain authority held by
the board of directors, including the authority to fix the designations, powers,
preferences and relative, participating, optional or other rights, if any, and
the qualifications, limitations or restrictions of such preferred stock. The
issuance of preferred stock may have the effect of making removal of management
more difficult and delaying, deferring or preventing a change in control of
Simtek.
16
We have opted to be governed, in our Delaware certificate of incorporation,
by Section 203 of the Delaware General Corporation Law, which provides for a
three-year moratorium on certain business combination transactions with
"interested stockholders" (generally, persons who beneficially own 15% or more
of the corporation's outstanding voting stock). Although we believe that Section
203 will encourage any potential acquirer to negotiate with our board of
directors, Section 203 also might have the effect of limiting the ability of a
potential acquirer to make a two-tiered bid for the company in which all
stockholders would not be treated equally. In addition, Section 203 gives the
board the power to reject a proposed business combination in certain
circumstances, even though a potential acquirer may be offering a substantial
premium for our common stock over the then-current market price. Section 203
would also discourage certain potential acquirers who are unwilling to comply
with its provisions.
Warrants
1,197,984 of the shares of common stock offered by the selling
securityholders in this prospectus are offered pursuant to warrants issued to
the selling securityholders in connection with various transactions. The
exercise periods and exercise prices of the warrants are discussed in the
"Selling Securityholders" section above. The number of shares issuable upon
exercise and the per share exercise price of certain of the warrants are subject
to adjustment in the case of certain stock dividends, stock splits,
combinations, capital reorganizations, reclassifications or mergers or
consolidations.
17
Plan of Distribution
Each selling security holder of our common stock and any of their pledgees,
assignees and successors-in-interest may, from time to time, sell any or all of
their shares of common stock on the OTC Bulletin Board or any other stock
exchange, market or trading facility on which the shares are traded or in
private transactions. These sales may be at fixed or negotiated prices. A
selling security holder may use any one or more of the following methods when
selling shares:
o ordinary brokerage transactions and transactions in which the broker
dealer solicits purchasers;
o block trades in which the broker dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
o purchases by a broker dealer as principal and resale by the broker
dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o settlement of short sales entered into after the effective date of the
registration statement of which this prospectus is a part;
o broker dealers may agree with the selling security holders to sell a
specified number of such shares at a stipulated price per share;
o a combination of any such methods of sale;
o through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise; or
o any other method permitted pursuant to applicable law.
The selling security holders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act"), if available, rather
than under this prospectus.
Broker dealers engaged by the selling security holders may arrange for
other brokers dealers to participate in sales. Broker dealers may receive
commissions or discounts from the selling security holders (or, if any broker
dealer acts as agent for the purchaser of shares, from the purchaser) in amounts
to be negotiated, but, except as set forth in a supplement to this prospectus,
in the case of an agency transaction not in excess of a customary brokerage
commission in compliance with NASDR Rule 2440; and in the case of a principal
transaction a markup or markdown in compliance with NASDR IM-2440.
In connection with the sale of the common stock or interests therein, the
selling security holders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume. The selling
security holders may also sell shares of the common stock short and deliver
these securities to close out their short positions, or loan or pledge the
common stock to broker-dealers that in turn may sell these securities. The
selling security holders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).
The selling security holders and any broker dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Each selling security holder
has informed us that it does not have any written or oral agreement or
understanding, directly or indirectly, with any person to distribute the common
stock. In no event shall any broker-dealer receive fees, commissions and markups
which, in the aggregate, would exceed eight percent (8%).
18
We are required to pay certain fees and expenses incurred by us incident to
the registration of the shares. We have agreed to indemnify the selling security
holders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.
Because selling security holders may be deemed to be "underwriters" within
the meaning of the Securities Act, they will be subject to the prospectus
delivery requirements of the Securities Act. In addition, any securities covered
by this prospectus which qualify for sale pursuant to Rule 144 under the
Securities Act may be sold under Rule 144 rather than under this prospectus.
Each selling security holder has advised us that they have not entered into any
written or oral agreements, understandings or arrangements with any underwriter
or broker-dealer regarding the sale of the resale shares. There is no
underwriter or coordinating broker acting in connection with the proposed sale
of the resale shares by the selling security holders.
With respect to certain selling security holders, we agreed to keep this
prospectus effective until the earlier of (i) the date on which the shares may
be resold by the selling security holders without registration and without
regard to any volume limitations by reason of Rule 144(e) under the Securities
Act or any other rule of similar effect or (ii) all of the shares have been sold
pursuant to the prospectus or Rule 144 under the Securities Act or any other
rule of similar effect. The resale shares will be sold only through registered
or licensed brokers or dealers if required under applicable state securities
laws. In addition, in certain states, the resale shares may not be sold unless
they have been registered or qualified for sale in the applicable state or an
exemption from the registration or qualification requirement is available and is
complied with.
Under applicable rules and regulations under the Securities Exchange Act of
1934, as amended, any person engaged in the distribution of the resale shares
may not simultaneously engage in market making activities with respect to the
common stock for the applicable restricted period, as defined in Regulation M,
prior to the commencement of the distribution. In addition, the selling security
holders will be subject to applicable provisions of the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder, including
Regulation M, which may limit the timing of purchases and sales of shares of the
common stock by the selling security holders or any other person. We will make
copies of this prospectus available to the selling security holders and have
informed them of the need to deliver a copy of this prospectus to each purchaser
at or prior to the time of the sale.
LEGAL MATTERS
The validity of the shares offered hereby will be passed upon by Holme
Roberts & Owen LLP, Colorado Springs, Colorado.
EXPERTS
The financial statements of Simtek Corporation, included in our annual
report on Form 10-K/A for the year ended December 31, 2005, have been audited by
Hein & Associates LLP, Independent Registered Public Accounting Firm, as set
forth in their report which is incorporated by reference in this prospectus and
registration statement. Such financial statements are incorporated by reference
in reliance on Hein & Associates LLP's report, given on their authority as
experts in accounting and auditing.
The audited Statements of Finished Goods Inventory as of December 30, 2005
and December 31, 2004 and the audited Statements of nvSRAM Contribution for the
period from January 1, 2005 to December 30, 2005 and for the year ended December
30, 2004, each included in our Amendment to Current Report on Form 8-K (filed
April 7, 2006), have been audited by MAZARS Revision & Treuhandgesellschaft mbH,
Independent Registered Public Accounting Firm, as set forth in their report
which is incorporated by reference in this prospectus and registration
statement. Such financial statements are incorporated by reference in reliance
on MAZARS Revision & Treuhandgesellschaft mbH's report, given on their authority
as experts in accounting and auditing.
19
AVAILABLE INFORMATION
This prospectus is part of a registration statement on Form S-1 that we
filed with the Securities and Exchange Commission under the Securities Act of
1933. Certain information in the registration statement has been omitted from
this prospectus in accordance with the rules of the Securities and Exchange
Commission. We are subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Accordingly, we file
reports, proxy statements and other information with the Securities and Exchange
Commission. You may inspect our reports, proxy statements and other information
without charge at the Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may obtain information on the operation of the
Public Reference Room by calling the Securities and Exchange Commission at
1-800-SEC-0330. The Commission also maintains a web site at http://www.sec.gov
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. In addition,
the reports, proxy statements and other information that we file with the
Securities and Exchange Commission can be obtained from our Internet website at
http://www.simtek.com.
The Securities and Exchange Commission allows us to "incorporate by
reference" certain of the information required by this prospectus, which means
that we can disclose important information to you by referring you to those
documents. The information incorporated by reference is an important part of
this prospectus. We incorporate by reference the documents listed below:
* Annual Report on Form 10-K for the fiscal year ended December 31, 2005,
as amended by Form 10-K/A filed on April 28, 2006 and as amended by Form 10-K/A
filed on December 11, 2006.
* Current Report on Form 8-K filed on January 3, 2006.
* Current Report on Form 8-K filed on February 3, 2006.
* Current Report on Form 8-K filed on March 3, 2006.
* Current Report on Form 8-K filed on March 3, 2006.
* Current Report on Form 8-K filed on March 13, 2006.
* Current Report on Form 8-K filed on March 30, 2006.
* Current Report on Form 8-K filed on April 7, 2006.
* Current Report on Form 8-K filed on April 11, 2006.
* Current Report on Form 8-K filed on April 12, 2006.
* Current Report on Form 8-K filed on April 28, 2006.
* Current Report on Form 8-K filed on May 1, 2006.
* Quarterly Report on Form 10-Q filed on May 15, 2006, as amended by Form
10-Q/A filed on August 4, 2006 and as amended by Form 10-Q/A filed on December
11, 2006.
* Current Report on Form 8-K filed on May 16, 2006.
* Current Report on Form 8-K filed on May 30, 2006.
* Schedule 14A Definitive Proxy Statement filed on June 7, 2006.
* Current Report on Form 8-K filed on June 8, 2006.
20
* Current Report on Form 8-K filed on June 30, 2006.
* Current Report on Form 8-K filed on July 10, 2006.
* Current Report on Form 8-K filed on July 26, 2006.
* Current Report on Form 8-K filed on July 28, 2006.
* Quarterly Report on Form 10-Q filed on August 11, 2006, as amended by
Form 10-Q/A filed on December 11, 2006.
* Current Report on Form 8-K filed on September 7, 2006.
* Current Report on Form 8-K filed on September 7, 2006.
* Current Report on Form 8-K filed on September 25, 2006.
* Current Report on Form 8-K12G3 filed on October 10, 2006.
* Current Report on Form 8-K filed on October 12, 2006.
* Current Report on Form 8-K filed on October 12, 2006.
* Current Report on Form 8-K filed on October 27, 2006.
* Current Report on Form 8-K/A filed on November 9, 2006.
* Quarterly Report on Form 10-Q filed on November 14, 2006, as amended by
Form 10-Q/A filed on December 11, 2006.
* Current Report on Form 8-K filed on December 1, 2006.
* Current Report on Form 8-K filed on December 7, 2006. * Current Report on
Form 8-K/A filed on December 29, 2006.
* Current Report on Form 8-K/A filed on December 29, 2006.
* Current Report on Form 8-K/A filed on December 29, 2006.
* Registration Statement on Form 8-A filed on January 8, 2007.
* Current Report on Form 8-K filed on January 9, 2007.
21
Upon receipt of an oral or written request we will provide, free of charge,
to any person to whom a prospectus is delivered, a copy of any or all of the
information that has been incorporated by reference in the prospectus but not
delivered with the prospectus. Please direct your written requests to:
Simtek Corporation
4250 Buckingham Dr. #100
Colorado Springs, CO 80907
(719) 531-9444
Attention: Investor Relations
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of our Common Stock in any state where the offer is not permitted. You
should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front page of
those documents.
22
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
The following table sets forth the expenses (other than underwriting
discounts and commissions) expected to be incurred in connection with the
issuance and distribution of the securities registered hereby, all of which
expenses, except for the Commission registration fee are estimated:
Securities and Exchange Commission registration fee............. $ 1,251
Legal fees and expenses ........................................ 11,000
Accounting fees 2,500
Miscellaneous................................................... 1,249
--------
Total........................................................... $ 16,000
========
The above expenses will be borne by us.
Item 14. Indemnification of Directors and Officers
Under our Certificate of Incorporation and Bylaws, we are required to
indemnify former and current directors and officers, and may indemnify employees
and agents, but only if such person seeking indemnification has satisfied the
statutory standard of conduct. To satisfy the statutory standard of conduct, a
person must have acted in good faith and in a manner the person reasonably
believed to be in or not opposed to the best interests of the corporation. In
addition, in any criminal action or proceeding, the person must also have had no
reasonable cause to believe the person's conduct was unlawful. Regardless of
standards of conduct, indemnification of expenses for directors and officers is
mandatory under Section 145 of the Delaware General Corporation Law ("DGCL") to
the extent they are successful on the merits in defending a proceeding. Under
Section 145 of the DGCL, in derivative suits (i.e., suits by or in the right of
the corporation), indemnification is only available for expenses and attorneys'
fees incurred in defending or settling a suit and only in circumstances where
there has been no adjudication of monetary liability to the corporation.
As permitted by Section 102(b)(7) of the DGCL, our Certificate of
Incorporation provides that, to the fullest extent permitted by the DGCL, a
director of the corporation shall not be personally liable to the corporation or
its stockholders for monetary damages for breach of fiduciary duty as a director
except for liability for (i) any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
willful or negligent conduct in paying dividends or repurchasing or redeeming
stock out of funds that are not lawfully available, in violation of Section 174
of the DGCL, or (iv) any transaction from which the director derives an improper
personal benefit.
We maintain insurance policies under which our directors and officers are
insured, within the limits and subject to the limitations of the policies,
against expenses in connection with the defense of actions, suits or
proceedings, and certain liabilities that might be imposed as a result of such
actions, suits or proceedings, to which they are parties by reason of being or
having been a director or officer of Simtek.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Securities Act") may be permitted to directors,
officers and controlling persons of Simtek pursuant to the foregoing provisions,
or otherwise, Simtek has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable.
Item 15. Recent Sales of Unregistered Securities
From January 1, 2003 through June 30, 2006, we issued options to purchase
approximately 1,102,519 shares of our common stock to our employees, consultants
and directors with a range of exercise prices from $1.40 to $19.00 per share.
II-1
From January 1, 2003 through June 30, 2006, we issued approximately 303,850
shares of our common stock upon the exercise of stock options to our employees,
consultants and directors. The options and common stock issued upon the exercise
of options were issued in reliance on the exemption from registration provided
by Rule 701 promulgated under the Securities Act as securities issued pursuant
to certain compensatory benefit plans and contracts relating to compensation.
On November 7, 2003, we closed a $1,500,000 equity financing with the RENN
Capital Group. In exchange for the $1,500,000, we issued to the RENN Capital
Group 165,201 shares of our common stock and warrants (with a 5-year term) to
acquire 75,000 shares of our common stock. These warrants have 5-year terms and
exercise prices of $12.50 per share for 37,500 shares and $15.00 per share for
37,500 shares. With respect to our November 7, 2003 transaction, we issued such
securities in reliance upon Rule 506 promulgated under, and Section 4(2) of, the
Securities Act, as the RENN Capital Group are sophisticated, accredited
investors, there was no general solicitation and the RENN Capital Group had
access to material information of Simtek.
On October 12, 2004, we received $2,500,000 from SF Capital Partners Ltd.,
Bluegrass Growth Fund LP and Bluegrass Growth Fund LTD in return for issuing
515,997 shares of our common stock and warrants to acquire 257,999 shares of our
common stock. The warrants issued to SF Capital Partners Ltd., Bluegrass Growth
Fund LP and Bluegrass Growth Fund LTD have 5-year terms and originally had an
exercise price of $0.627 (pre-reverse split) per share (which was reduced to
$0.265 (pre-reverse split) per share as of December 30, 2005 as a result of an
agreement between us and such entities). Following the reverse split, the
exercise price of these warrants has increased from $0.265 per share to $2.65
per share. In connection with the $2,500,000 equity financing, we issued to
Merriman Curhan Ford & Co., the investment banking firm that advised us in such
transaction, warrants to acquire 38,700 shares of our common stock. These
warrants have a 5-year term and an exercise price of $6.27 per share. In
addition, Merriman Curhan Ford & Co. received or is entitled to receive as
commission (i) a cash payment of $187,500 (which equals 7.5% of the total amount
of capital received by us from the sale of the common stock and the warrants in
the transaction); and (ii) a cash payment equal to 7.5% of the capital received
by us upon the exercise of the warrants issued to the investors (provided such
exercise is within an applicable tail period). With respect to our October 12,
2004 transaction, we issued such securities in reliance upon Rule 506
promulgated under, and Section 4(2) of, the Securities Act, as the purchasers
are all sophisticated, accredited investors, there was no general solicitation
and the purchasers had access to material information of Simtek.
On May 5, 2005, we closed a share purchase agreement for a $4,000,000
private placement of 674,082 shares of our common stock and warrants to acquire
505,562 shares of our common stock with Cypress Semiconductor Corporation, as
well as a production and development agreement with Cypress to jointly develop
an "S8" 0.13-micron silicon-oxide-nitride-oxide-silicon (SONOS) nonvolatile
memory production process. The production and development agreement also calls
for Cypress to produce one or more Simtek products, as designated by Simtek,
using the S8 process. The warrants have a 10-year term and had an exercise price
of $7.772. With respect to our May 5, 2005 transaction, we issued such
securities in reliance upon Rule 506 promulgated under, and Section 4(2) of, the
Securities Act, as Cypress is a sophisticated, accredited investor, there was no
general solicitation and Cypress had access to material information of Simtek.
Harold Blomquist, our current President and Chief Executive Officer,
purchased 20,000 shares of our common stock for $108,400 on May 19, 2005, and
27,500 shares of our common stock for $81,950 on November 9, 2005, in each case
pursuant to Mr. Blomquist's employment agreement with us. We issued 15,000
shares of our common stock to Douglas Mitchell, our former President, Chief
Executive Officer and Chief Financial Officer (acting), on June 15, 2005, and
5,000 shares of our common stock on November 25, 2005, in each case pursuant to
the terms of his separation agreement with us. With respect to the issuances to
Mr. Blomquist and Mr. Mitchell, we issued such securities in reliance upon Rule
506 promulgated under, and Section 4(2) of, the Securities Act, as each is or
was an officer and director of Simtek, each is a sophisticated investor, each
had access to material information of Simtek and there was no general
solicitation.
On June 28, 2005, we issued warrants to purchase 20,000 shares of our
common stock to the RENN Capital Group in exchange for a waiver of certain
provisions relating to the 7.5% convertible debentures issued to the RENN
Capital Group in 2002. These warrants have 5-year terms and had an exercise
price of $5.00 per share. With respect to our June 28, 2005 transaction, we
issued such securities in reliance upon Rule 506 promulgated under, and Section
4(2) of, the Securities Act, as the RENN Capital Group are sophisticated,
accredited investors, there was no general solicitation and the RENN Capital
Group had access to material information of Simtek.
II-2
On December 30, 2005, we issued to ZMD 626,072 shares of our common stock
as partial payment for the assets we acquired from ZMD pursuant to the Asset
Purchase Agreement, dated December 7, 2005, between us and ZMD. With respect to
our December 30, 2005 transaction with ZMD, we issued such securities in
reliance upon Rules 506 and 901 promulgated under, and Section 4(2) of, the
Securities Act, as ZMD is a sophisticated, accredited investor, there was no
general solicitation and ZMD had access to material information of Simtek.
On December 30, 2005, we issued, for an aggregate price of $11,000,000, the
amounts of shares indicated to the following investors: Crestview Capital Master
LLC (2,468,750 shares); Straus Partners, LP (78,125 shares); Straus GEPT
Partners, LP (78,125 shares); Big Bend XXVII Investments, L.P. (1,437,500
shares); Toibb Investment LLC (1,187,500 shares); Michael Seedman (62,500
shares); RENN Capital Group (937,500 shares); and SF Capital Partners Ltd.
(625,000 shares). In addition, on December 30, 2005, we issued a warrant to
purchase 106,250 shares of our common stock to C. E. Unterberg, Towbin, the
investment banking firm that advised us in the December 30, 2005 offering, as
partial payment for such services. This warrant has a five-year term and an
exercise price of $2.80 per share. With respect to our December 30, 2005
transaction with such purchasers and our issuance to C. E. Unterberg, Towbin, we
issued such securities in reliance upon Rule 506 promulgated under, and Section
4(2) of, the Securities Act, as the securityholders are all sophisticated,
accredited investors, there was no general solicitation and the securityholders
had access to material information of Simtek.
On March 24, 2006, we issued a warrant to Cypress granting Cypress the
right to purchase 1 million shares of our common stock, on June 30, 2006 we
issued a warrant to Cypress granting Cypress the right to purchase 500,000
shares of our common stock and on December 18, 2006 we issued a warrant to
Cypress granting Cypress the right to purchase 500,000 shares of our common
stock, each at an exercise price per share of $7.50 with a term of 10 years. The
aggregate amount of consideration received by us for the March 24, 2006, June
30, 2006 and December 18, 2006 warrants was certain pre-paid royalties and
certain of Cypress' obligations under the License and Development Agreement,
dated March 24, 2006, between us and Cypress. The issuance of the warrants was
exempt from registration pursuant to Rule 506 promulgated under, and Section
4(2) of, the Securities Act of 1933, as amended, as Cypress is an accredited
investor, there was no general solicitation and Cypress had access to material
information of Simtek.
On May 26, 2006, we issued to the following individuals, who are directors
of Simtek, as compensation for serving as directors of Simtek under Simtek's
standard compensation arrangement for directors, the following amounts of shares
of Simtek common stock: Robert Keeley (3,376); Alfred Stein (3,376); Ronald
Sartore (3,376); Robert Pearson (3,376); and Harold Blomquist (371), which
shares, due to the nature of such issuances, were granted to the above-listed
directors in reliance upon the exemption from registration pursuant to Section
4(2) of the Securities Act.
On May 26, 2006, we issued to the RENN Capital Group warrants to purchase a
total of 20,002 shares of Simtek common stock, which warrants were granted in
exchange for the agreement by such funds to subordinate to Wells Fargo their
first priority security interest in Simtek's assets in connection with the $3.6
million revolving line of credit entered into by Simtek with Wells Fargo Bank on
June 2, 2006. Also on May 26, 2006, Simtek issued to the RENN Capital Group
warrants to purchase a total of 5,001 shares of Simtek common stock, which
warrants were granted in exchange for the agreement by such funds to waive
compliance by Simtek with certain covenants of the 7.5% convertible debentures.
The May 26, 2006 warrants (which have a term of five years) have an exercise
price of $3.30 per share. The May 26, 2006 warrants were issued in reliance upon
the exemption from registration pursuant to Section 4(2) of the Securities Act,
as each of such funds is an accredited investor, there was no general
solicitation and each of such funds had access to material information of
Simtek.
On September 21, 2006, we closed a $4,555,000 equity financing, issuing the
amounts of shares of common stock and warrants to purchase shares of common
stock indicated to the following investors: RENN Capital Group and Premier RENN
US Emerging Growth Fund Ltd. (506,332 shares and 75,952 warrants); Crestview
Capital Master LLC (215,190 shares and 32,279 warrants); Big Bend XXVII
Investments, L.P. (101,266 shares and 15,190 warrants); Straus Partners, LP
(50,633 shares and 7,595 warrants); Straus GEPT Partners, LP (50,633 shares and
7,595 warrants); A.J. Stein Family Trust (25,317 shares and 3,798 warrants);
A.J. Stein Family Partnership (25,317 shares and 3,798 warrants); Brian Stein
(25,317 shares and 3,798 warrants); Toni Stein (12,659 shares and 1,899
warrants); Steven Hayes (50,633 shares and 7,595 warrants); Brian Alleman
(31,646 shares and 4,747 warrants); John C. McComb (7,595 shares and 1,140
warrants); and SF Capital Partners Ltd. (50,633 shares and 7,595 warrants). The
warrants issued have a term of five years and have an exercise price of $5.40
II-3
per share. With respect to our September 21, 2006 transaction, we issued such
securities in reliance upon Rule 506 promulgated under, and Section 4(2) of, the
Securities Act as all of the purchasers are sophisticated, accredited investors,
there was no general solicitation and all of the purchasers had access to
material information of Simtek.
Item 16. Exhibits
Unless otherwise indicated, all exhibits listed below are incorporated herein by
--------------------------------------------------------------------------------
reference.
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2.1 Plan of Conversion of Simtek Corporation, a Colorado corporation, into
Simtek Corporation, a Delaware corporation, dated October 4, 2006.(1)
3.1 Certificate of Incorporation for Simtek Corporation, a Delaware
corporation.(1)
3.2 Bylaws of Simtek Corporation, a Delaware corporation.(1)
4.1 1987-I Employee Restricted Stock Plan.(2)
4.2 Form of Restricted Stock Agreement between the Company and
Participating Employees.(2)
4.3 Form of Common Stock Certificate of Simtek Corporation, a Delaware
corporation.(1)
4.4 Simtek Corporation 1991 Stock Option Plan.(3)
4.5 Form of Incentive Stock Option Agreement between the Company and
Eligible Employees.(3)
4.6 1994 Non-Qualified Stock Option Plan.(4)
4.7 Amendment to the 1994 Non-Qualified Stock Option Plan.(5)
4.8 Q-DOT Group, Inc. Incentive Stock Option Plan of March 1994 adopted by
Simtek (7)
4.9 Form of Q-DOT Group, Inc. Incentive Stock Option Agreement between the
Company and Eligible Employees.(7)
4.10 Amendment to the 1994 Non-Qualified Stock Option Plan.(7)
4.11 Amendment to the 1994 Non-Qualified Stock Option Plan (15)
5.1 Opinion of Holme Roberts & Owen LLP, dated October 19, 2006, with
respect to 1,851,155 of the shares being registered *
5.2 Opinion of Holme Roberts & Owen LLP, dated January 9, 2007, with
respect to 500,000 of the shares being registered
10.1 Form of Non-Competition and Non-Solicitation Agreement between the
Company and certain of its employees.(2)
10.2 Form of Employee Invention and Patent Agreement between the Company and
certain of its employees.(2)
10.3 Manufacturing Agreement between Chartered Semiconductor Manufacturing,
PTE, LTD. and Simtek Corporation dated September 16, 1992(5)
10.4 Separation Agreement, dated May 9, 2005, between Simtek Corporation and
Douglas M. Mitchell(6)
10.5 Technology Development, License and Product Agreement between Amkor
Technology and Simtek (8)
10.6 Manufacturing Services Agreement between Amkor Technology, Inc. and
Simtek Corp (8)
10.7 Convertible Loan Agreement between Simtek Corporation as borrower and
Renaissance Capital Growth & Income Fund III, Inc. and Renaissance US
Growth and Income Trust, PLC and BFSUS Special Opportunities Trust, PLC
as lenders (9)
10.8 7.5% $1,000,000 Convertible Debenture between Simtek Corporation and
BSFSUS Special Opportunities Trust, PLC (9)
10.9 7.5% $1,000,000 Convertible Debenture between Simtek Corporation and
Renaissance Capital Growth & Income Fund III, Inc. (9)
10.10 7.5% $1,000,000 Convertible Debenture between Simtek Corporation and
Renaissance Capital US Growth & Income Trust, PLC (9)
10.11 Borrowers Security Agreement between Simtek Corporation as borrower and
Renaissance Capital Growth & Income Fund III, Inc. and Renaissance US
Growth and Income Trust, PLC and BFSUS Special Opportunities Trust, PLC
as lenders (9)
10.12 Pledge Agreement between Simtek Corporation as borrower and Renaissance
Capital Growth & Income Fund III, Inc. and Renaissance US Growth and
Income Trust, PLC and BFSUS Special Opportunities Trust, PLC as lenders
(9)
II-4
10.13 Technology Development, License and Product Agreement between Amkor
Technology and Simtek - Amended September 2002 (10)
10.14 Assignment, dated February 21, 2003, of the Agreement(s) between Simtek
Corporation and Amkor Technology, Inc.(11)
10.15 Securities Purchase Agreement between Simtek Corporation and
Renaissance Capital Growth & Income Fund III, Inc. and Renaissance US
Growth Investment Trust, PLC and BFSUS Special Opportunities Trust,
PLC(12)
10.16 Form of $12.50 Stock Purchase Warrant(12)
10.17 Form of $15.00 Stock Purchase Warrant(12)
10.18 Amendment dated January 27, 2004 between Simtek Corporation and Baja
Properties, LLC (Landlord) (together with amendment dated June 7, 2000
and underlying lease dated July 26, 2000) (13)
10.19 Securities Purchase Agreement, dated October 12, 2004, by and among the
Company, SF Capital Partners Ltd., Bluegrass Growth Fund LP and
Bluegrass Growth Fund LTD (14)
10.20 Form of Warrant (attached as Exhibit A to Securities Purchase
Agreement, dated October 12, 2004, by and among the Company, SF Capital
Partners Ltd., Bluegrass Growth Fund LP and Bluegrass Growth Fund LTD)
(14)
10.21 Form of Registration Rights Agreement (attached as Exhibit B to
Securities Purchase Agreement, dated October 12, 2004, by and among the
Company, SF Capital Partners Ltd., Bluegrass Growth Fund LP and
Bluegrass Growth Fund LTD) (14)
10.22 Share Purchase Agreement, dated May 4, 2005, by and between the Company
and Cypress Semiconductor Corporation (17)
10.23 Development and Production Agreement, dated May 4, 2005, by and between
the Company and Cypress Semiconductor Corporation (17)
10.24 Escrow Agreement, dated May 4, 2005, by and among the Company, Cypress
Semiconductor Corporation and U.S. Bank, National Association (17)
10.25 Stock Purchase Warrant, dated May 4, 2005, from the Company to Cypress
Semiconductor Corporation (17)
10.26 Employment agreement by and between the Company and Harold Blomquist
(6)
10.27 Waiver letter agreement, dated June 28, 2005, by and between the
Company, Q-DOT, Inc., Renaissance Capital Growth & Income Fund III,
Inc., Renaissance US Growth Investment Trust PLC and BFS US Special
Opportunities Trust PLC (18)
10.28 Asset Purchase Agreement, dated August 30, 2005, by and among Hittite
Microwave Corporation, HMC Acquisition Corporation, the Company and
Q-DOT, Inc. (19)
10.29 Escrow Agreement, dated August 30, 2005, by and among the Company,
Q-DOT, Inc., Hittite Microwave Corporation, HMC Acquisition
Corporation, and U.S. Bank, National Association (19)
10.30 Confidentiality, Non-Disclosure and Restrictive Covenant Agreement,
dated August 30, 2005, by and among Hittite Microwave Corporation, HMC
Acquisition Corporation, the Company and Q-DOT, Inc. (19)
10.31 Asset Purchase Agreement, dated December 7, 2005, by and between the
Company and Zentrum Mikroelektronik Dresden AG (20)
10.32 Form of License Agreement, dated December 30, 2005, by and between the
Company and Zentrum Mikroelektronik Dresden AG (20)
10.33 Form of Non-Competition and Non-Solicitation Agreement, dated December
30, 2005, by and between the Company and Zentrum Mikroelektronik
Dresden AG (20)
10.34 Form of Registration Rights Agreement, dated December 30, 2005, by and
between the Company and Zentrum Mikroelektronik Dresden AG (20)
10.35 Form of Securities Purchase Agreement, dated December 30, 2005, by and
among the Company various purchasers (21)
10.36 Form of Registration Rights Agreement, dated December 30, 2005, by and
among the Company and various purchasers (21)
10.37 License and Development Agreement, dated March 24, 2006, by and between
the Company and Cypress Semiconductor Corporation (22)
10.38 Amended and Restated Registration Rights Agreement, dated March 24,
2006, by and between the Company and Cypress Semiconductor Corporation
(22)
10.39 Employment Agreement, dated April 25, 2006, by and between the Company
and Brian P. Alleman, (23)
II-5
10.40 Preliminary agreement between the Company and Ronald Sartore (24)
10.41 Account Purchase Agreement, effective June 2, 2006, by and between the
Company and Wells Fargo Bank, National Association, acting through its
Wells Fargo Business Credit operating division (25)
10.42 Form of Securities Purchase Agreement, dated September 21, 2006, by and
among the Company and various purchasers (26)
10.43 Form of Registration Rights Agreement, dated September 21, 2006, by and
among the Company and various purchasers (26)
10.44 Form of Stock Purchase Warrant, dated September 21, 2006, by and among
the Company and various purchasers (26)
10.45 Offer letter from the Company to Ronald Sartore, dated November 3, 2006
(27)
13.1 Annual Report on Form 10-K for the fiscal year ended December 31, 2005,
as amended by the Form 10-K/A filed on April 28, 2006 and the Form
10-K/A filed on December 11, 2006 (16) (28) (29)
23.1 Consent of Hein & Associates LLP, Independent Registered Public
Accounting Firm
23.2 Consent of Holme Roberts & Owen LLP is included in Exhibits 5.1 and 5.2
23.3 Consent of MAZARS Revision & Treuhandgesellschaft mbH, Independent
Registered Public Accounting Firm
24.1 Power of Attorney *
--------------
* Previously filed
(1) Incorporated by reference to the Company's Current Report on Form 8-K12G3
filed by the Company with the SEC on October 10, 2006
(2) Incorporated by reference to the Company's Form S-1 Registration Statement
(Reg. No. 33-37874) filed with the Commission on November 19, 1990.
(3) Incorporated by reference to the Company's Form S-1 Registration Statement
(Reg. No. 33-46225) filed with the Commission on March 6, 1992.
(4) Incorporated by reference to the Company's Annual Report on Form 10-K filed
with the Commission on March 25, 1995
(5) Incorporated by reference to the Company's Annual Report on Form 10-K filed
with the Commission on March 27, 1996
(6) Incorporated by reference to the Form 8-K filed with the Commission on May
12, 2005
(7) Incorporated by reference to the Company's Form S-8 Registration Statement
(Reg. No. 333-73794) filed with the Commission on November 20, 2001
(8) Incorporated by reference to the Company's Annual Report on Form 10-KSB
filed with the Commission on March 27, 2002
(9) Incorporated by reference to the Company's Quarterly Report on Form 10-QSB
filed with the Commission on August 13, 2002
(10) Incorporated be reference to the Company's Quarterly Report on Form 10-QSB
filed with the Commission on November 8, 2002
(11) Incorporated by reference to the Company's Annual Report on Form 10-KSB
filed with the Commission on March 27, 2003
(12) Incorporated by reference from the Current Report on Form 8-K filed by the
Company with the SEC on November 12, 2003
(13) Incorporated by reference to the Company's Annual Report on Form 10-KSB
filed with the Commission on March 4, 2004
(14) Incorporated by reference from the Current Report on Form 8-K filed by the
Company with the Commission on October 12, 2004
(15) Incorporated by reference to the Company's Form S-8 Registration Statement
(Reg. No. 333-1210005) filed with the Commission on December 7, 2004
(16) Incorporated by reference to the Company's Annual Report on Form 10-K
filed with the Commission on April 7, 2006
(17) Incorporated by reference to the Company's Current Report on Form 8-K filed
by the Company with the SEC on May 10, 2005
(18) Incorporated by reference to the Company's Current Report on Form 8-K filed
by the Company with the SEC on July 5, 2005
(19) Incorporated by reference to the Company's Current Report on Form 8-K filed
by the Company with the SEC on September 6, 2005
II-6
(20) Incorporated by reference to the Company's Current Report on Form 8-K filed
by the Company with the SEC on December 13, 2005
(21) Incorporated by reference to the Company's Current Report on Form 8-K filed
by the Company with the SEC on January 3, 2006
(22) Incorporated by reference to the Company's Current Report on Form 8-K filed
by the Company with the SEC on March 30, 2006
(23) Incorporated by reference to the Company's Current Report on Form 8-K filed
by the Company with the SEC on May 1, 2006.
(24) Incorporated by reference to the Company's Current Report on Form 8-K filed
by the Company with the SEC on May 30, 2006.
(25) Incorporated by reference to the Company's Current Report on Form 8-K filed
by the Company with the SEC on June 8, 2006.
(26) Incorporated by reference to the Company's Current Report on Form 8-K filed
by the Company with the SEC on September 25, 2006
(27) Incorporated by reference to the Company's Current Report on Form 8-K/A
filed by the Company with the SEC on November 9, 2006
(28) Incorporated by reference to the Company's Annual Report on Form 10-K/A
filed with the Commission on April 28, 2006
(29) Incorporated by reference to the Company's Annual Report on Form 10-K/A
filed with the Commission on December 11, 2006
Item 17. Undertakings
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) (17 C.F.R.ss.230.424(b)) if,
in the aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
II-7
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) That, for the purpose of determining liability under the Securities Act
of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part
of a registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance on
Rule 430A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such first use, supersede or modify any statement
that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such
date of first use.
(5) That, for the purpose of determining liability of the registrant under
the Securities Act of 1933 to any purchase in the initial distribution of the
securities:
The undersigned registrant undertakes that in a primary offering of
securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to
the purchaser, if the securities are offered or sold to such purchaser by means
of any of the following communications, the undersigned registrant will be a
seller to the purchaser and will be considered to offer or sell such securities
to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on
behalf of the undersigned registrant or used or referred to by the undersigned
registrant;
(iii) The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
II-8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Colorado Springs, State
of Colorado, on January 9, 2007.
Simtek Corporation,
a Delaware corporation
By: /s/Brian Alleman
-----------------------------------------
Brian Alleman
Secretary, Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE
* /s/Harold Blomquist
-----------------------------------------------------------
Harold Blomquist, Chairman,
Chief Executive Officer and President
January 9, 2007
/s/Brian Alleman
-----------------------------------------------------------
Brian Alleman, Secretary, Vice President and Chief
Financial Officer
January 9, 2007
* /s/Robert Keeley
-----------------------------------------------------------
Robert Keeley, Director
January 9, 2007
* /s/Alfred Stein
-----------------------------------------------------------
Alfred Stein, Director
January 9, 2007
* /s/Ronald Sartore
-----------------------------------------------------------
Ronald Sartore, Director
January 9, 2007
/s/Kimberley Carothers
-----------------------------------------------------------
Kimberley Carothers
Controller (Principal Accounting Officer)
January 9, 2007
* By /s/Brian Alleman, Attorney in Fact
II-9