Filed Pursuant to Rule 424(b)(5)
Registration No. 333-132180
122,793,324 Shares
SIMTEK CORPORATION
Common stock
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This prospectus is being used to register 122,793,324 shares of Simtek
Corporation's common stock being offered by the selling security holders, which
include certain of our current and former officers and directors. Of the shares
offered by this prospectus, 89,121,871 shares are currently issued and
outstanding, 13,636,364 shares are issuable upon conversion of convertible
debentures at $0.22 per share and 20,035,089 shares are issuable upon exercise
of outstanding stock purchase warrants with exercise prices ranging from $0.265
to $1.50 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 traded on the OTC Bulletin Board under the symbol
"SRAM." On April 27, 2006, the closing sale price of our common stock was $0.355
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 April 28, 2006.
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TABLE OF CONTENTS
Summary......................................................................3
Risk Factors.................................................................4
Special Note Regarding Forward-Looking Statements............................9
Use of Proceeds.............................................................10
Selling Security Holders....................................................11
Description of Securities...................................................17
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.
The Offering
This offering relates to a total of 122,793,324 shares of our common stock
that may be resold by the selling security holders. Of the shares offered by
this prospectus, 89,121,871 shares are currently issued and outstanding,
13,636,364 shares are issuable upon conversion of convertible debentures at
$0.22 per share and 20,035,089 shares are issuable upon exercise of outstanding
stock purchase warrants with exercise prices ranging from $0.265 to $1.50 per
share. The shares offered include 950,000 shares held by our current chairman
and chief executive officer and 200,000 shares held by our former chief
executive officer. 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
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.
We have not seen any significant increase in our product sales in the past
year and our gross margins are less than we had anticipated. Therefore, our cash
requirements have been difficult to maintain. We cannot guarantee that we will
be able to achieve an increase in product sales and gross margins. We may need
more capital in the future to develop new products. We are not sure 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 develop and market new products. The development,
subcontracted production and marketing of our existing products may also suffer,
causing our financial position and stock price to deteriorate.
WE MAY EXPERIENCE OPERATING LOSSES IN THE NEXT SEVERAL YEARS
We began business in 1987. Through December 31, 2005, we had accumulated
losses of approximately $46.0 million. We realized net income for the first time
for the year ended December 31, 1997 and continued to realize net income through
June 30, 2000. Subsequent to June 30, 2000 and through December 31, 2005, 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 materially harm our results of operations, 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 BFSUS Special Opportunities
Trust PLC, or the RENN Capital Group, formerly Renaissance Capital Group, Inc.,
contains various financial covenants. As of December 31, 2005, 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
March 21, 2006, we received a waiver for the two covenants through January 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.
WE MAY BE UNABLE TO IMPLEMENT SUCCESSFULLY INTO OUR OPERATIONS THE ASSETS
ACQUIRED FROM ZMD ON DECEMBER 30, 2005
On December 30, 2005, we closed our acquisition from Zentrum
Mikroelektronik Dresden AG ("ZMD") of certain intellectual property and assets
4
related to ZMD's nvSRAM product line. We may be unable to integrate successfully
into our operations the assets acquired from ZMD, including: by a failure to
gain customer agreement to purchase products from Simtek or to qualify Simtek's
designs or processes; by a failure to coordinate international operations,
relationships and facilities, which may be subject to additional constraints
imposed by geographic distance, local laws and regulations; and by a failure to
implement and maintain uniform standards, internal controls, business processes,
procedures, policies and information systems. Our failure to meet any of these
challenges could cause us to fail to realize any accretive benefits of the
acquisition of the assets from ZMD and could seriously harm our results of
operations.
WE MAY BE UNABLE TO RETAIN AN EFFECTIVE FOCUS IN OUR INDUSTRY OR RETAIN
CUSTOMERS FOLLOWING THE ACQUISITION OF ASSETS FROM ZMD
The challenges to Simtek as a result of the acquisition of certain
intellectual property and assets from ZMD on December 30, 2005 include:
o communicating a strategic vision to the market regarding Simtek and
executing on that strategic vision;
o implementing sales and marketing efforts to effectively communicate to
customers the capabilities of Simtek;
o overcoming possible concerns of certain customers about not having two
sources of supply for the products they previously purchased from both
Simtek and ZMD;
o gaining acceptance from former ZMD customers for Simtek's designs,
products or processes; and
o overcoming any perceived adverse changes in business focus, including
demonstrating to customers that the acquisition of certain assets from
ZMD will not result in an adverse change in customer service standards
or business focus and helping customers conduct business easily with
Simtek going forward.
The failure to meet any of these challenges could seriously hinder Simtek's
plans for product development as well as business and market expansion following
the acquisition of certain intellectual property and assets from ZMD.
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
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.
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DELAYS IN MANUFACTURING MAY NEGATIVELY IMPACT OUR REVENUE AND NET INCOME
It takes approximately three months for our subcontractors to manufacture
our semiconductor memories. 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 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 3 volt nonvolatile semiconductor memory product. While we achieved
production qualification on this product in September 2005, we cannot assure you
that we will not discover technical problems or manufacturing concerns with this
new product, that demand will continue to develop for the new product or that we
will be able to continue to sell this new product 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.
6
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.
THE DECEMBER 30, 2005 SECURITIES PURCHASE AGREEMENT AND RELATED DOCUMENTS
PROVIDE FOR CASH 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 68,750,000 shares purchased by
investors. 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 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
7
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.
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 LISTED ONLY ON THE OTC ELECTRONIC BULLETIN BOARD, IT
WILL BE MORE DIFFICULT TO SELL OUR COMMON STOCK
Our common stock is listed on the OTC Electronic Bulletin Board under the
symbol "SRAM." 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 meet 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 Small-Cap 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
8
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 2,000,000 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.
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, or based on certain qualifying 2006
standards, for the fiscal year ending December 31, 2006. 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, 2006 (or 2007 as required by regulations), 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, 2006 (or 2007 as required by regulations)
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.
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
9
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 122,793,324 shares. All of these shares are being
offered by the selling security holders, which include some of our current and
former officers and 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 146,920,823 shares of common stock
outstanding as of March 31, 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.
Percentage
Number of of Class
Number of Number of Shares Following
Shares Beneficially Shares Following the
Name and Address of Selling Security Holders Owned Before Offering Offered the Offering Offering
--------------------------------------------- --------------------- --------- ------------ ----------
Crestview Capital Master LLC (1) 24,687,500 24,687,500 0 -
95 Revere Drive, Suite A
Northbrook, IL 60062
Big Bend XXVII Investments, L.P. (2) 14,375,000 14,375,000 0 -
3401 Armstrong Avenue
Dallas, TX 75205-4100
Toibb Investment LLC (3) 11,875,000 11,875,000 0 -
6355 Topanga Canyon Blvd., Suite 335
Los Angeles, CA 91367
Cypress Semiconductor Corporation (4) 21,796,428 21,796,428 0 -
3901 North First Street
San Jose, CA 95134-1599
SF Capital Partners Ltd. (5) 10,107,367 12,171,351 0 -
c/o Stark Offshore Management, LLC
3600 South Lake Drive
St. Francis, WI 53235
Renaissance Capital Growth & Income Fund III, Inc. (6) 9,537,782 8,537,782 1,000,000 *
c/o RENN Capital Group
8080 N. Central Expressway, Suite 210-LB59
Dallas, TX 75206
Renaissance US Growth Investment Trust PLC (7) 9,537,782 8,537,782 1,000,000 *
c/o RENN Capital Group
8080 N. Central Expressway, Suite 210-LB59
Dallas, TX 75206
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BFSUS Special Opportunities Trust PLC (8) 8,537,783 8,537,783 0 -
c/o RENN Capital Group
8080 N. Central Expressway, Suite 210-LB59
Dallas, TX 75206
Zentrum Mikroelektronik Dresden AG (9) 6,260,713 6,260,713 0 -
Grenzstrasse 28
D-01109 Dresden, Germany
Harold Blomquist 1,993,534 (10) 950,000 1,043,534 *
3935 Serenity Place
Colorado Springs, CO 80908
C. E. Unterberg, Towbin (11) 1,062,500 1,062,500 0 -
275 Middlefield Rd.
Menlo Park, CA 94025
Douglas Mitchell 839,386 (12) 200,000 639,386 *
1725 Sunshine Circle
Woodland Park, CO 80863
Straus Partners, LP (13) 781,250 781,250 0 -
605 Third Avenue
New York, NY 10158
Straus GEPT Partners, LP (13) 781,250 781,250 0 -
605 Third Avenue
New York, NY 10158
Michael Seedman 625,000 625,000 0 -
1436 Waverly Road
Highland Park, IL 60035
Bluegrass Growth Fund LP (14) 613,494 613,494 0 -
122 East 42nd St., Suite 2606
New York, NY 10168
Bluegrass Growth Fund LTD (15) 613,494 613,494 0 -
Walker House
George Town
Grand Cayman
Cayman Islands
Merriman Curhan Ford & Co. (16) 386,997 386,997 0 -
601 Montgomery Street, 18th Floor
San Francisco, CA 94111
* Less than 1%
(1) 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
12
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.
(2) 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.
(3) The natural person who beneficially owns the securities held by Toibb
Investment LLC is Harris Toibb.
(4) 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.
(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) BFSUS Special Opportunities Trust PLC is the beneficial owner of the shares
indicated. RENN Capital Group, Inc. is the investment adviser to BFSUS 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) The shareholders of Zentrum Mikroelektronik Dresden AG ("ZMD") are Global
ASIC GmbH (83.6% shareholder), State of Saxony (10% shareholder and a
governmental agency) and IKB Private Equity GmbH (6.4% shareholder and a 100%
subsidiary of Deutsche Industriebank AG (IKB), a German public company). The
shareholders of Global ASIC GmbH are Sachsenring Automobiltechnik AG i.L. (37.4%
shareholder), WGZ Initialtivkapital GmbH (30.8% shareholder and an affiliate of
WGZ Bank, a German mutual savings bank), Millenium Capital Fonds EINS GmbH
(24.19% shareholder) and three minority financial investment companies (who
collectively own the remaining 7.61%). There are no natural persons that
beneficially own ZMD shares that have a pecuniary interest in Simtek shares
equal to or greater than 1% of the outstanding Simtek common stock. The business
affairs of ZMD are generally controlled by its management board and supervisory
board. ZMD's management board consists of Thilo von Selchow, ZMD's Chief
Executive Officer and President, Klaus Troschel, ZMD's Chief Financial Officer,
and Konrad Herre, ZMD's Chief Operating Officer. ZMD's supervisory board
consists of Gerhard Fettweis, Carl-Peter Forster, Michael Fraedrich, Rudi
Koehler, Helmut Laub and Dietmar Scholtz. Both the management board and the
supervisory board require majority approval to act. The management board has
sole voting discretion over the shares of Simtek common stock owned by ZMD. The
management board also has investment discretion over the shares of Simtek common
stock owned by ZMD subject to prior approval of such discretion by the
supervisory board.
(10) Includes 800 shares of our common stock that Mr. Blomquist's son personally
owns, 1,039,028 shares issuable upon exercise of presently exercisable options,
3,706 shares of restricted common stock that are due, but have not been issued
to Mr. Blomquist as part of his directors' compensation for the period January
1, 2005 through March 31, 2005, the end of the last quarter before the date he
became our chief executive officer.
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(11) The natural person that beneficially owns the securities held by C. E.
Unterberg, Towbin is Andrew Arno, Chief Executive Officer of C. E. Unterberg,
Towbin.
(12) Includes 470,000 shares issuable upon exercise of presently exercisable
options.
(13) The Managing Principal of each of Straus Partners, LP and Straus GEPT
Partners, LP is Mickey Straus.
(14) Bluegrass Growth Fund Partners, LLC is the general partner of Bluegrass
Growth Fund LP. By virtue of such relationship, Bluegrass Growth Fund Partners,
LLC may be deemed to have voting and dispositive power over the shares owned by
Bluegrass Growth Fund LP. Bluegrass Growth Fund Partners, LLC disclaims
beneficial ownership of such shares. Mr. Brian Shatz has delegated authority
from the partners of Bluegrass Growth Fund Partners, LLC with respect to the
shares of common stock owned by Bluegrass Growth Fund LP. Mr. Shatz may be
deemed to have voting and dispositive power over the shares of common stock
owned by Bluegrass Growth Fund LP. Mr. Shatz disclaims beneficial ownership of
such shares of our common stock and has no legal right to maintain such
delegated authority.
(15) Mr. Brian Shatz is a director of Bluegrass Growth Fund LTD and has
delegated authority from the shareholders of Bluegrass Growth Fund LTD with
respect to the shares of common stock owned by Bluegrass Growth Fund LTD. Mr.
Shatz may be deemed to have voting and dispositive power over the shares of
common stock owned by Bluegrass Growth Fund LTD. Mr. Shatz disclaims beneficial
ownership of such shares of our common stock and has no legal right to maintain
such delegated authority.
(16) The natural person that beneficially owns the securities held by Merriman
Curhan Ford & Co. is John Hiestand, Chief Financial Officer of Merriman Curhan
Ford & Co.
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, which would have
resulted in 9,615,384 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 per share to $0.16 per
share as a result of the December 30, 2005 offering at $0.16 per share, we
agreed with the RENN Capital Group that the conversion price would only be
lowered to $0.22 per share as a result of the December 30, 2005 offering. As a
result, instead of just 9,615,384 shares issuable upon conversion of the 2002
debentures (which would be the case were the conversion price still $0.312 per
share), there are currently a total of 13,636,364 shares of common stock that
are issuable to the RENN Capital Group upon conversion of the debentures as a
result of the reduction of the conversion price to $0.22 per share. Also on
December 30, 2005, we issued 9,375,000 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 1,651,983 shares of
our common stock and warrants to acquire 750,000 shares of our common stock.
These warrants have 5-year terms with an exercise price of $1.25 per share for
375,000 shares and $1.50 per share for 375,000 shares. On June 28, 2005, we
issued warrants to purchase 200,000 shares of our common stock to the RENN
Capital Group in exchange for a waiver of certain provisions relating to the
7.5% debentures. These warrants have 5-year terms with an exercise price of
$0.50 per share. Of the 122,793,324 shares that we are registering in this
prospectus, 25,613,348 shares relate to these July 1, 2002, November 7, 2003,
June 28, 2005 and December 30, 2005 transactions.
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
5,159,959 shares of our common stock and warrants to acquire 2,579,980 shares of
our common stock. 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 386,997 shares of our common stock. The
warrants issued to Merriman Curhan Ford & Co. have a 5-year term with an
exercise price of $0.627 per share. 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 per share. In connection with the
sale of $11,000,000 of our common stock on December 30, 2005, we agreed with
14
Bluegrass Growth Fund LP, Bluegrass Growth Fund LTD and SF Capital Partners Ltd.
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 to acquire 2,579,980 shares of our common stock would be lowered from
$0.627 per share to $0.265 per share. Also on December 30, 2005, we issued
6,250,000 shares to SF Capital Partners Ltd. in exchange for $1,000,000. As of
the date of this prospectus, SF Capital Partners Ltd. owns 10,107,367 shares as
a result of the October 12, 2004 and December 30, 2005 transactions, and has a
warrant to purchase 2,063,984 shares with an exercise price of $0.265 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 2,063,984
shares issuable under the warrant are not included in SF Capital Partner Ltd.'s
entry in the Selling Security Holder table above under the column entitled
"Number of Shares Beneficially Owned Before Offering." 13,785,336 of the shares
that we are registering relate to the October 12, 2004 and December 30, 2005
transactions with, as applicable, SF Capital Partners Ltd., Bluegrass Growth
Fund LP, Bluegrass Growth Fund LTD and Merriman Curhan Ford & Co.
On May 4, 2005, we received $4,000,000 from Cypress in return for issuing
6,740,816 shares of our common stock and warrants to acquire 5,055,612 shares of
our common stock. The warrants have a 10-year term with an exercise price of
$0.7772. 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 the us to develop and manufacture standard,
custom and embedded nvSRAM products, we agreed with Cypress to 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 granting Cypress the right to
purchase 10 million shares of our common stock. We also agreed to issue, upon
payment by Cypress of an installment of pre-paid royalties on June 30, 2006. a
warrant granting Cypress the right to purchase 5 million shares of our common
stock and we agreed to issue, upon payment by Cypress of an installment of
pre-paid royalties on December 31, 2006, a warrant granting Cypress the right to
purchase 5 million shares of our common stock. Each of these warrants has, or
will have when issued, an exercise price per share of $0.75 with a term of 10
years from the date of issuance. The shares underlying the warrants that we
agreed to issue to Cypress on June 30, 2006 and December 31, 2006 (upon
satisfaction of certain conditions) are not being registered in this prospectus.
Of the 122,793,324 shares that we are registering in this prospectus, 21,796,428
shares relate to the May 4, 2005 transaction with Cypress and the March 24, 2006
warrant issued to Cypress.
On May 19, 2005 and pursuant to his employment agreement with us, Mr.
Harold Blomquist, our President and Chief Executive Officer, purchased 200,000
shares of our common stock directly from us at a purchase price of $0.542 per
share. On November 9, 2005 and pursuant to his employment agreement with us, Mr.
Blomquist purchased 275,000 shares of our common stock directly from us at a
purchase price of $0.298 per share. In each case, the purchase price was
determined by calculating the average close price for the five trading days
prior to the purchase date. On January 20, 2006 and also pursuant to his
employment agreement with us, we issued an additional 475,000 shares of our
common stock to Mr. Blomquist for no additional consideration to match his
previous stock purchases.
Mr. Douglas Mitchell was our President, Chief Executive Officer and Chief
Financial Officer (acting) until his resignation from Simtek effective May 9,
2005. Pursuant to the terms of Mr. Mitchell's separation agreement incident to
his resignation, we issued to Mr. Mitchell 150,000 shares of our common stock on
June 15, 2005 and 50,000 shares of our common stock on November 25, 2005.
1,150,000 of the shares that we are registering relate to these two agreements
with Mr. Blomquist and Mr. Mitchell.
On December 30, 2005, we issued to ZMD 6,260,713 shares of Simtek 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. ZMD and
Simtek were parties to a Product License Development and Support Agreement,
dated June 1, 1994, and various Cooperation Agreements functioning as amendments
to the Product License Development and Support Agreement, which, together,
provided for the joint development of certain products by Simtek and ZMD and the
licensing of certain products and intellectual property from Simtek to ZMD. All
15
of these agreements were terminated (to the extent not already terminated) on
December 30, 2005. Of the 122,793,324 shares that we are registering in this
prospectus, 6,260,713 shares relate to this transaction.
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): Crestview Capital
Master LLC 24,687,500 shares in exchange for $3,950,000; Straus Partners, LP
781,250 shares for $125,000; Straus GEPT Partners, LP 781,250 shares for
$125,000; Big Bend XXVII Investments, L.P. 14,375,000 shares for $2,300,000;
Toibb Investment LLC 11,875,000 shares for $1,900,000; and Michael Seedman
625,000 shares for $100,000. In connection with such sale of $11,000,000 of our
common stock, we issued to C. E. Unterberg, Towbin, the investment banking firm
that advised us in such transaction, warrants to acquire 1,062,500 shares of our
common stock. The warrants issued to C. E. Unterberg, Towbin have a five-year
term with an exercise price of $0.28 per share.
16
DESCRIPTION OF SECURITIES
Our amended and restated articles of incorporation and bylaws provide for a
classified board of directors when we have six or more directors. This may have
the effect of delaying or preventing changes in control of our management, which
could adversely affect the market price of our common stock by discouraging or
preventing takeover attempts that might result in the payment of a premium price
to our shareholders.
Common Stock
We are authorized to issue 300,000,000 shares of common stock, par value
$0.01 per share. Each share of common stock entitles the holder thereof to one
vote on all matters submitted to a vote of the shareholders. Holders of common
stock do not have preemptive rights or rights to convert their common stock into
other securities. Holders of common stock are entitled to receive ratably such
dividends as may be declared by the board of directors out of funds legally
available therefor. In the event of our liquidation, dissolution or winding up,
holders of the common stock have the right to a ratable portion of the assets
remaining after payment of liabilities.
Preferred Stock
Our amended and restated articles of incorporation authorize 2,000,000
shares of $1.00 par value preferred stock. The board of directors has the
authority to issue preferred stock in one or more series and to fix the rights,
preferences, privileges and restrictions thereof, including dividend rights,
dividend rates, conversion rights, voting rights, terms of redemption,
redemption prices, liquidation preferences and the number of shares constituting
any series and the designation of such series, without further vote or action by
the shareholders. The issuance of preferred stock may have the effect of
delaying, deferring or preventing a change in control of us without further
action by the shareholders and may adversely affect the voting power and other
rights of the holders of common stock, including the loss of voting control to
others. As of the date of this prospectus, there are no shares of preferred
stock outstanding.
Announced Reverse Stock Split
On January 3, 2006, we issued a press release announcing that our Board of
Directors has discussed a reverse stock split in order to bring the number of
issued and outstanding shares into the range of 10 million to 20 million and
potentially re-incorporating us as a Delaware corporation. We intend that any
such reverse stock split or re-incorporation will comply with applicable law and
our charter documents.
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%).
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
18
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 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
filed on April 7, 2006, as amended by Form 10-K/A filed on April 28,
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.
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
20
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.
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