As filed with the Securities and Exchange Commission on October 6, 1997
Registration 333-_______
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------
Form S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933
SIMTEK CORPORATION
(Exact name of registrant as specified in its charter)
Colorado 84-1057605
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1465 Kelly Johnson Boulevard, Suite 301
Colorado Springs, Colorado 80920
(719) 531-9444
(Address, including zip code, and telephone number,
including area code, of Principal Executive Offices)
----------
Richard L. Petritz
Chief Executive Officer
Simtek Corporation
1465 Kelly Johnson Boulevard, Suite 301
Colorado Springs, CO 80920
(719) 531-9444
(Name, address, including zip code and telephone
number, including area code, of agent for service)
Copies to:
Garth B. Jensen, Esq.
Holme Roberts & Owen LLP
1700 Lincoln, Suite 4100
Denver, Co 80203
(303) 861-7000
Approximate Date of Commencement of Proposed Sale to the Public: As
soon as practicable after the effective date of this Registration Statement.
-------------
If the only securities being registered on this Form are being offered
pursuant dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are being
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. /X/
-----------------
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------------
| | | Proposed | Proposed | |
| | | maximum | maximum | |
| | | offering | aggregate | Amount of |
| Title of each class of securities to be | Amount to be | price | offering | registration |
| registered | registered(1) | per share(2) | price | fee |
|---------------------------------------------|--------------------|----------------|------------------|----------------|
|<S> | <C> | <C> | <C> | <C> |
|Common Stock, (par value $.01 per share) | 2,727,563 shs | $1.19 | $3,245,800 | $1,119 |
|---------------------------------------------|--------------------|----------------|------------------|----------------|
|Common Stock, (par value $.01 per share) | 843,150 shs | $0.50 | $ 421,575 | $ 145 |
|---------------------------------------------|--------------------|----------------|------------------|----------------|
|Common Stock, (par value $.01 per share) | 400,000 shs | $1.60 | $ 640,000 | $ 221 |
|---------------------------------------------|--------------------|----------------|------------------|----------------|
|Common Stock (par value $.01 per share) | 281,175 shs(3) | $1.82 | $ 511,739 | $ 176 |
|---------------------------------------------|--------------------|----------------|------------------|----------------|
|Common Stock (par value $.01 per share) | 822,825 shs(4) | $1.56 | $1,283,608 | $ 443 |
|---------------------------------------------|--------------------|----------------|------------------|----------------|
|Totals | 5,074,713 shs | | $6,102,722 | $2,104 |
------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement relates to Common Stock issuable upon exercise
of outstanding Warrants. Pursuant to Rule 416, this Registration Statement
also covers such indeterminable number of additional shares as may become
issuable pursuant to adjustments under the warrants.
(2) The per share exercise price of the outstanding Warrants adjusted for
anti-dilution provisions in the Warrant Agreements.
(3) The Warrant within the Representative Warrants granted on February 25, 1993
was for an exercise price of $2.97 with anti-dilution provisions.
(4) The original 172,500 Representative Warrants granted on February 25, 1993
were actually units consisting of three shares of Common Stock and one
Class B Warrant for a price of $7.425 per unit. The units will eventually
split up thus creating 517,500 shares of Common Stock at a exercise price
of $2.475. These shares contain anti-dilution provisions detailed in the
Representative Warrant Agreement.
---------------------------------
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 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8 (a),
may determine.
<PAGE>
The following language appears in red on the left side of the cover page:
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED OCTOBER 6, 1997
PROSPECTUS
5,074,713 Shares
SIMTEK CORPORATION
Common Stock
----------
Simtek Corporation ("Simtek" or the "Company") intends to issue, from time
to time, up to 5,074,713 shares of its Common Stock, par value $.01 per share
("Common Stock"), upon the exercise of outstanding warrants (the"Warrants"). The
Warrants were originally issued in several transactions in the period from 1989
through 1994 as described in the Warrant Table (the "Warrant Table") under the
heading "Plan of Distribution". The Warrants are exercisable on or before the
issue date for each respective group of warrants shown on the Warrant Table. The
Warrants must be exercised prior to 5:30 p.m., New York City time, on the
expiration date shown for the respective group of Warrants on the Warrant Table.
The exercise and transfer of the Warrants will be subject to applicable federal
and state securities laws.
Holders of Common Stock are entitled to one vote per share on all matters
submitted to a vote of the stockholders of the Company.
The Company's Common Stock is traded on the OTC Bulletin Board under the
symbol "SRAM". On September 25, 1997, the closing sale price of the Common Stock
as reported by the OTC Bulletin Board, was $0.41 per share.
---------------
SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
--------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
| | Price to Public | Underwriting Discounts | Total Proceeds to |
| | | and Commissions (1) | Company (2) (3) |
|-------------------------------------------|--------------------|--------------------------|-------------------|
| <S> | <C> | <C> | <C> |
| Group One | $1.19 | $0 | $1.19 |
|-------------------------------------------|--------------------|--------------------------|-------------------|
| Group Two | $0.50 | $0 | $0.50 |
|-------------------------------------------|--------------------|--------------------------|-------------------|
| Group Three | $1.60 | $0 | $1.60 |
|-------------------------------------------|--------------------|--------------------------|-------------------|
| Group Four | $1.82 | $0 | $1.82 |
|-------------------------------------------|--------------------|--------------------------|-------------------|
| Group Five | $1.563 | $0 | $1.56 |
|-------------------------------------------|--------------------|--------------------------|-------------------|
| Total ................................... | $6,102,722 | $0 | $6,102,722 |
- -----------------------------------------------------------------------------------------------------------------
(1) No underwriting discounts or commissions will be paid. The shares will be offered directly by Simtek.
(2) Before deducting registration expenses estimated at $27,100.
(3) Assumes all of the Warrants are exercised.
</TABLE>
The date of this Prospectus is _______________, 1997.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C> <C>
Available Information............................ 2 Use of Proceeds ................................ 10
Information Incorporated by Reference............ 2 Plan of Distributions........................... 10
The Company...................................... 4 Legal Matters................................... 12
Risk Factors..................................... 5 Experts......................................... 12
</TABLE>
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the"Commission"). Such reports, proxy
statements and other information may be inspected without charge at, and copies
thereof may be obtained at prescribed rates from, the public reference
facilities of the Commission's principal office at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's regional offices at 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center,
Suite 1300, New York, NY 10048.
The Company has filed with the Commission, a Registration Statement on Form
S-3 under the Securities Act of 1933, as amended (the"Securities Act"), with
respect to the securities offered hereby (the "Registration Statement"). This
prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto. For further information with
respect to the Company and the securities offered hereby reference is made to
the Registration Statement, including the exhibits and schedules thereto, which
may be inspected at, and copies thereof may be obtained at prescribed rates
from, the public reference facilities of the Commission at the addresses set
forth above.
INFORMATION INCORPORATED BY REFERENCE
The following documents have been filed with the Commission (File No.
0-19027) and are incorporated in this prospectus by reference and made a part
hereof:
1. The Company's Annual Report on Form 10-KSB for the year ended December
31, 1996 (the "Form 10- KSB Report").
2. The Company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1997.
3. The Company's Quarterly Report on Form 10-QSB for the quarter ended
June 30, 1997.
4. The Company's Report on Form 8-K dated January 28, 1997.
5. The Company's Report on Form 8-K dated May 20, 1997.
6. The Company's Report on Form 8-K dated July 1, 1997.
7. The Company's Report on Form 8-K dated July 28, 1997.
8. The Company's Report on Form 8-K dated September 3, 1997.
9. The description of the Company's Common Stock contained under the
heading "Description of Securities" in the Company's Registration
Statement on Form S-1 (File No. 33-72204) that was declared effective
by the Commission on January 31, 1994.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act, after the date of this prospectus and
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<PAGE>
prior to the termination of the Offering, shall be deemed to be incorporated by
reference in this prospectus and to be a part hereof from the dates of filing of
such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference in this prospectus shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference in this prospectus modifies or supersedes
such statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded to constitute a part of this prospectus.
The Company will provide without charge to each person to whom this
prospectus is delivered, upon such person's written or oral request, a copy of
any and all of the information that has been incorporated by reference in this
prospectus (not including exhibits to such information unless such exhibits are
specifically incorporated by reference into such information). Any such request
should be directed to Simtek Corporation, Chief Operating Officer, 1465 Kelly
Johnson Blvd. #301, Colorado Springs, Colorado 80920 (telephone number
719-531-9444).
3
<PAGE>
THE COMPANY
Simtek Corporation designs, develops, produces and markets high performance
nonvolatile semiconductor memories. Nonvolatility prevents loss of programs and
data when electrical power is removed. The Company's nonvolatile memory products
feature fast data access and programming speeds and electrical reprogramming
capabilities. Simtek's products are targeted for use in commercial electronic
equipment markets such as industrial control systems, office automation, medical
instrumentation, telecommunication systems, cable television, and numerous
military systems, including communications, radar, sonar and smart weapons.
The principal executive office of the Company is located at 1465 Kelly
Johnson Blvd., Suite 301, Colorado Springs, Colorado 80920. The Company's
telephone number is 719-531-9444. Unless the context otherwise requires, the
terms "Simtek" and the "Company" refer to Simtek Corporation.
4
<PAGE>
RISK FACTORS
Warrant holders should carefully consider the following risk factors, in
addition to the other information contained in or incorporated by reference into
this Prospectus, in evaluating an investment in the shares of Common Stock
pursuant to exercise of the Warrants.
LIMITED CAPITAL FOR OPERATIONS; ADDITIONAL FINANCING REQUIREMENTS
The Company has required substantial outlays of capital for product
development, manufacturing and marketing. From inception through December 31,
1996, the Company raised approximately $32.1 million of gross proceeds from the
sale of convertible debt and equity securities. From inception through December
31, 1996, the Company generated approximately $10.1 million of gross revenue
from the sale of product and technology licenses, approximately $12.5 million
from net product sales and $600,000 in royalty income.
Management of the Company anticipates that the proceeds from the exercise
of Warrants, together with a substantial increase in product sales with positive
gross margins will satisfy the Company's cash requirements to produce and market
its existing four product families. There can be no assurance that there will be
a substantial increase in sales of the Company's products or positive gross
margins or that all or a substantial portion of the Warrants will be exercised.
In addition, it may be necessary for the Company to look for additional funding
in the next six to twelve months to support the costs associated with the
development of new product families. While the Company has been successful in
obtaining financing for its operations to date, there can be no assurance it
will be able to do so in the future. If such financing is unavailable, the
Company may not be able to develop new product families and the number of new
products the Company sells may be limited.
HISTORY OF OPERATING LOSSES; ANTICIPATED CONTINUING OPERATING LOSSES
Simtek commenced business operations in 1987. As of June 30, 1997 the
Company had an accumulated deficit of approximately $29.0 million. While the
Company realized net income from operations of approximately $197,000 and
$122,000 for the six months ended June 30, 1997 and the year ended December 31,
1996, respectively, prior to that time, the Company had experienced several
years of operating losses. There can be no assurances that the Company will
continue to generate income from operations during the foreseeable future.
Future revenues and profits will depend on various factors, including
market acceptance of the Company's products and the prices thereof, the ability
of the Company to reduce manufacturing costs to consistently achieve positive
gross margins on commercial and military sales, the ability of subcontractors to
manufacture the Company's products to applicable specifications in a cost
effective manner. Many of these factors are outside the control of the Company.
REMOVAL FROM NASDAQ SMALL-CAP MARKET LISTING
The Company's Common Stock is listed on the OTC Electronic Bulletin Board
under the symbol SRAM. The Common Stock was listed on the NASDAQ Small-Cap
Market until July 18, 1995 and then transferred to the OTC Electronic Bulletin
Board because the Company no longer met the requirements for inclusion on the
NASDAQ Small-Cap Market. In order for the Company to have its Common Stock
relisted on the National Market System, the Company must meet all the
requirements for an initial listing. The Company does not believe it will be
able to satisfy such requirements in the near future.
Securities not included in the NASDAQ Small-CAP Market are covered by the
Securities and Exchange Commission rule that imposes additional sales practice
requirements on broker-dealers who sell such securities to persons other than
established customers and accredited investors (generally institutions with
assets in excess of $5,000,000 or individuals with net worth in excess of
$1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their
spouse). For transactions covered by the rule, the broker-dealer must make a
special suitability determination for the purchaser and receive the purchaser's
written agreement to the transaction prior to the sale. Consequently, the rule
may affect the ability of broker-dealers to sell the Company's securities, which
will have an adverse effect on the ability of the Company's security holders to
5
<PAGE>
sell their securities and the possibility of the Company's ability to raise
additional capital.
RISKS ASSOCIATED WITH MANUFACTURING
The manufacturing of semiconductors is highly complex and sensitive to a
wide variety of factors, including the level of contaminates in the
manufacturing environment, impurities in the materials used and the performance
of equipment. Many factors are outside the control of the Company. These factors
may adversely affect the manufacturing yield of the Company's production runs,
which in turn will affect the cost of producing the Company's products including
the cost per silicon wafer, the number of potential chips per wafer and the cost
of packaging and testing the finished products.
While over the past year and one-half, the Company has been able to
maintain positive gross margins, management of the Company believes that further
reducing manufacturing costs will be the key to maintaining positive gross
margins on a consistent basis. The Company has reduced manufacturing costs thus
far primarily by reducing chip sizes, thereby increasing the number of potential
chips per wafer, by increasing yields thereby increasing more good die per
wafer, by reducing the cost per finished wafer and by converting from ceramic to
plastic product packaging. The Company is also seeking to reduce manufacturing
costs by reducing testing costs and by increasing the yield of functional chips
per wafer through the elimination of defects in the manufacturing process and
other improvements in the manufacturing process. There is no assurance, however,
that any of the foregoing cost reduction measures will be realized on a
consistent basis, and that such cost reductions will be sufficient to continue
generating consistent profits.
The production cycle time for the Company's products is approximately three
months. Therefore, any delays in receiving silicon wafers will delay the receipt
of product sales revenue by the Company. Any such delays also could result in
the cancellation of orders or impair the Company's ability to secure future
orders for its products. Lower than acceptable manufacturing yields may also
delay product shipments. In addition, technical problems that may arise at the
factory or in specific customer applications can impact product reliability,
necessitating inventory write-offs or warranty replacements. Such technical
problems may occur at any time.
DEPENDENCE ON TWO SUBCONTRACTORS
The Company has engaged independent subcontractors for silicon wafer
manufacture and assembly and testing of its products. The Company's operating
results depend on the ability of its subcontractors to supply silicon wafers
conforming to applicable specifications and to assemble and test Simtek's
products in sufficient quantities to meet the Company's requirements, all at a
competitive cost. The Company is presently dependent upon two subcontractors,
Zentrum Mikroelektronik Dresden GmbH ("ZMD") and Chartered Semiconductor
Manufacturing Plc. of Singapore ("Chartered"), to manufacture its semiconductor
wafers for product sales. In the event that one or both of these subcontractors
are unable to supply the Company's requirements for manufactured products at an
acceptable price and within an appropriate schedule, the Company will be
required to find alternative sources of supply. If such alternative sources of
supply are unavailable to the Company on acceptable terms and on a timely basis,
the Company will be materially adversely affected. There is no assurance that
the Company will have continued access in the future to adequate silicon wafer
manufacturing facilities or assembly and testing services.
On September 29, 1992, the Company and Chartered entered into a
manufacturing agreement (the "Chartered Manufacturing Agreement") to provide the
Company with silicon wafers for the Company's products through at least
September 29, 1997 which has been recently extended, under similar terms, to
September 8, 1998. Under the Chartered Manufacturing Agreement, Chartered has
installed a manufacturing process for versions of the Company's current and
future products.
According to the Chartered Manufacturing Agreement that was extended until
September 8, 1998, the Company has the right to purchase up to 600 six-inch
silicon wafers per month from Chartered's facility in Singapore. The limit to
purchase 600 wafers per month could have a material impact on the Company's
operations in the future. Approximately 44% and approximately 68% of the
Company's product sales were based on wafers purchased from Chartered for the
six months ended June 30, 1997 and the year ended December 31, 1996,
respectively.
In September 1995, the Company entered into an agreement (the "Cooperation
Agreement") with ZMD which provides for Simtek to purchase finished 0.8 micron
units from ZMD's foundry. The Company is currently working under a purchase
6
<PAGE>
order for fixed pricing that will supply the Company with finished units through
the remainder of 1997. There can be no assurance that ZMD will quote Simtek an
acceptable per unit price after the existing purchase order expires. If the new
price is unacceptable to Simtek, it may have an adverse impact on the sales and
gross margins of the Company's 64 kilobit product based on 0.8 micron product
technology. Sales of this product accounted for approximately 56% and
approximately 32% of the Company's revenue for the six months ended June 30,
1997 and the year ended December 31, 1996, respectively.
FOREIGN CURRENCY EXCHANGE RATE AND CONVERSION RISKS
The Company purchases silicon wafers and finished units from its two
foundries, Chartered which is located in Singapore and ZMD which is located in
Germany. The purchase price for finished units purchased from ZMD is in US
dollars and makes no concessions for an exchange rate fluctuation. The purchase
price for silicon wafers from Chartered is in US dollars, however, in the
agreement entered into with Chartered there is a clause that allows for a price
adjustment for exchange rate fluctuation. The price of the silicon wafer will be
modified should the 6 month rolling average rate of exchange fluctuate by more
than 5% from the set point.
Sales of the Company's products are worldwide with approximately one-third
of the total sales in each of Asia, Europe and North America. The fluctuation in
the exchange rate could affect the revenues and profits of the Company. In
general, the Company does not execute hedge transactions to reduce the Company's
exposure to foreign currency exchange rate risks.
DEPENDENCE ON PRINCIPAL CUSTOMERS AND OTHERS FOR SALES AND DISTRIBUTIONS
The Company's strategy is to generate sales through the use of independent
sales representative agencies and distributors. The agreements with the
Company's sales representatives and distributors are terminable without cause by
either party upon 30 to 90 days written notice. There is no assurance that
suitable sales representatives and distributors will be available on terms
favorable to the Company.
Sales to one unaffiliated customer and three distributors which represent
10% or more of the Company's sales for six months ended June 30, 1997 and the
year ended December 31, 1996 were as follows:
Six Months
Ended Year Ended
Distributors/Customer June 30, 1997 December 31, 1996
--------------------- ------------- -----------------
A 29% 24%
B 11% 10%
C -- 10%
D 19% 17%
There can be no assurances that the Company will continue receiving orders
from these customers or that it will maintain the relationships with the
distributors..
As of June 30, 1997, the Company's backlog of unshipped customer orders
expected to be filled within the next six months was approximately $1,250,000.
All orders are cancelable prior to 30 days before the schedule shipping date
and, therefore, should not be used as a measure of future product sales.
LACK OF NEW LICENSE REVENUES
The Company has received substantially all revenue to which it is entitled
under existing license agreements and has not sold any new licenses. There is no
assurance that the Company will sell any product or technology licenses in the
future.
PRODUCT QUALIFICATION AND SALES
Prior to the commencement of product sales, the Company must establish that
its products meet certain performance and reliability standards. As part of this
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<PAGE>
process, known as product qualification, representative samples of the products
are subjected to a variety of tests to ensure performance in accordance with
commercial, industrial and military specifications. Delays or failure of the
Company to accomplish product qualification for future products will adversely
affect the Company. Even with successful initial product qualifications there is
no assurance that the Company can maintain product qualification or achieve
sufficient sales or product pricing to meet its operating requirements. The
Company's subcontractors must be audited and recertified by the Company on a
regular basis for the Company to continue to produce military-qualified
products. There is no assurance that such recertification will be achieved.
Although the Company has achieved design wins and generated customer orders
for its products, there is no assurance that such design wins will result in
product sales or that such customer orders will not be canceled prior to being
filled. In addition, there is a significant period of time required for
customers to incorporate the Company's products into their product designs after
receiving evaluation samples, which may delay the Company's revenue growth.
DEPENDENCE ON NEW PRODUCTS
The Company's success depends in part upon its ability to expand its
existing product families and to develop and market new products. The
development of new semiconductor designs and technologies typically requires
substantial research and development expenditures. Even if developed, the
success of new products is dependent on several factors, including proper
product selection, timely product introduction, achievement of acceptable
production yields and market acceptance. There can be no assurance that the
Company will successfully develop new products that can be introduced on a
timely or cost-effective basis or that any new products introduced by the
Company will receive market acceptance.
RISKS ASSOCIATED WITH THE SEMICONDUCTOR INDUSTRY
The semiconductor industry is characterized by rapid technological change
and product obsolescence, cyclical market patterns, price erosion and product
oversupply, occasional shortages of materials, variations in manufacturing
efficiencies and significant expenditures for capital equipment and product
development. There can be no assurance that the SNOS technology that the Company
currently utilizes will not be supplanted in the near future by other
nonvolatile memory technologies such as floating gate, ferroelectric and
magnetic film technologies. The industry has from time to time experienced
depressed business conditions. Fluctuations in the Company's operating results
could occur due to one or more of these factors.
COMPETITION AND MARKET ACCEPTANCE
The semiconductor industry is intensely competitive. The Company's ability
to compete depends on elements both within and outside of the Company's control,
including product cost, quality and performance, success in developing new
products, continued access to advanced semiconductor processes and silicon wafer
supplies, the speed at which customers incorporate the Company's products into
their systems, changes in technology, the cost- effectiveness of manufacturing,
the number and nature of its competitors and general economic conditions. The
Company experiences competition from a number of domestic and foreign companies,
most of which have significantly greater financial, technical, manufacturing and
marketing resources than Simtek. Among the Company's competitors are major
corporations possessing worldwide wafer fabrication and circuit production
facilities and diverse established product lines. There are also emerging
companies attempting to obtain a share of the market for the Company's product
families. If the Company's products achieve market acceptance, other companies
may sell competitive products at prices below Simtek's which would have an
adverse effect on the Company's operating results. The Company has sold product
and technology licenses to Plessey, Nippon Steel and ZMD. At this time Plessey
and Nippon Steel have not put Simtek's products into production, however, ZMD is
producing these products in order to sell them to Simtek. Under the agreement
ZMD has with the Company, ZMD may enter the market and begin selling these
products at any time. ZMD has entered the market and they may become a
significant competitor to the Company.
DEPENDENCE ON KEY EMPLOYEES
The Company's success depends in part on its ability to attract and retain
qualified technical and management personnel. The competition for such personnel
is intense. The loss of key personnel may have a material adverse affect on the
Company.
8
<PAGE>
DEPENDENCE ON PATENTS
Six U.S. patents have been issued to the Company relating to certain
aspects of its current products, and the Company has been notified that one
other patent application has been allowed by the U.S. Patent Office. The Company
also has taken steps to apply for international patents on its technology. The
Company plans to continue to seek protection of its intellectual property. There
is no assurance, however, that any patents applied for will issue or will
provide the Company with meaningful protection from competition or that the
Company will have the financial resources necessary to maintain or enforce any
patent rights that it may hold. Other companies may have been or may be involved
in research and development that may lead to patents similar to or relating to
those developed by the Company or similar to or relating to specific aspects of
the Company's products and technologies. The Company has not engaged counsel to
determine whether its products are generally free from patent infringement.
POSSIBLE PATENT INFRINGEMENT
In the past, the Company has been notified by two companies that certain of
its products and technologies may be related to patents owned by them and a
third party has notified the Company that the Company's products or technologies
may infringe on two patents owned by the party. At the time of the notices, the
Company retained legal counsel to evaluate three patents corresponding to the
notices, but the Company has yet to determine whether its products infringe such
third party patents. While the Company has received no recent correspondence
concerning such claims, there can be no assurance that further action will not
be taken with respect to such claims or that new claims will not be asserted. If
infringement claims are asserted against the Company and are upheld or
determined to be meritorious, the Company will attempt to modify its products so
they are non-infringing. If the Company is unable to modify its products, the
Company will be required to obtain a license to sell such products or cease
selling the products for which the claims are asserted. There is no assurance
that, if required, such licenses can be obtained. Simtek will be materially
adversely affected if it fails to obtain any required licenses on acceptable
terms and is forced to cease selling any of its products. If an infringement
claim is asserted against the Company and is upheld and deemed to be willful,
treble damages may be obtained from the Company.
BOARD DISCRETION IN APPLICATION OF PROCEEDS
The Company's management may apply the proceeds of this offering for
purposes other than those specified in "Use of Proceeds" in order to accommodate
certain contingencies. See "Use of Proceeds" for a discussion of these
contingencies and the alternative uses of the proceeds of this offering in the
event of such contingencies.
ABSENCE OF DIVIDENDS
The Company has not paid any cash dividends on the Common Stock and does
not anticipate paying any dividends in the foreseeable future on the Common
Stock. Earnings, if any, will be retained to finance growth.
CONTROL OF THE COMPANY BY AFFILIATES
Prior to the issuance of Common Stock pursuant to outstanding Warrants, the
executive officers and directors of the Company, together with their affiliates
(including ZMD), controlled the vote of more than 35% of the outstanding Common
Stock, assuming exercisable outstanding warrants and options held by such
persons. Assuming that all of the Warrants are exercised, such persons will
control the vote of more than 30% of the outstanding Common Stock and, to the
extent they act in concert, will have the ability to influence the outcome of
issues submitted to the Company's shareholders.
POSSIBLE VOLATILITY OF COMMON STOCK PRICES
There is no assurance that an active public market for the Common Stock
will continue to exist. The trading prices of the Common Stock may be subject to
wide fluctuations in response to variations in operating results, announcements
of technological innovations or new products by the Company or its competitors
and other events or factors, including the sale or attempted sales of a large
amount of Common Stock into the market. In addition, the stock market has
experienced extreme price and volume fluctuations, which have particularly
9
<PAGE>
affected the market price for many high technology companies. These broad market
fluctuations may adversely affect the market price of the Common Stock.
SHARES OF COMMON STOCK ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS
As of the date of this Prospectus, there are 28,676,685 shares of Common
Stock outstanding. Of these shares of Common Stock 20,129,300 shares (the
"Registered Shares") have been registered under the Securities Act of 1933, as
amended (the "Act") or qualify for sale without registration under Rule 144.
The 8,547,385 shares of Common Stock that have not been registered under
the Act are "restricted securities" as defined in Rule 144 under the Act (the
"Restricted Shares"). The Restricted Shares may only be sold pursuant to
registration under the Act or pursuant to exemptions, including, among others,
the exemption provided by Rule 144. Any Restricted Shares sold under the Rule
144 are subject to the volume and timing requirements defined by Rule 144. The
8,547,385 Restricted Shares are held by ZMD, an affiliate of the Company. The
Restricted Shares have met the holding period requirements of Rule 144 but are
subject to volume and timing requirements defined by Rule 144. The Company has
no assurance that ZMD will not attempt to sell these shares.
No prediction can be made as to the effect, if any, that future sales of
shares, or the availability of shares for future sale, will have on the market
price of Common Stock prevailing from time to time. Sales of substantial amounts
of Common Stock in the public market, or the perception that such sales could
occur, could adversely affect prevailing market prices for the Common Stock and
could also impact the Company's ability to raise capital through the sale of its
equity securities.
POSSIBLE ISSUANCE OF PREFERRED STOCK
The Board of Directors has authority to issue up to 2,000,000 shares of
preferred stock in one or more series to establish the voting powers,
preferences and other rights and qualifications thereof, without any further
vote or action by the shareholders. The issuance of preferred stock by the Board
of Directors could affect the rights of the holders of Common Stock and could
potentially be used to discourage attempts by others to obtain control of the
Company through merger, tender offer, proxy contest or otherwise by making such
attempts more difficult to achieve or more costly. The Board of Directors has no
specific intention to issue shares of preferred stock, but given the Company's
present capital requirements, it is possible that the Company will raise capital
through the sale of preferred stock in the future.
USE OF PROCEEDS
If all of the Warrants are exercised, net proceeds to the Company after
payment of expenses of this registration are estimated to be approximately
$6,102,722. See "Plan of Distribution." Such proceeds, if any, will be used to
fund production and marketing of the Company's 0.8 micron 256 kilobit nvSRAM and
the development of other new products.
Pending use of the net proceeds from the issuance of shares as described
above, the Company intends to hold such proceeds in short-term, interest bearing
and other money market instruments.
PLAN OF DISTRIBUTION
The shares of Common Stock offered hereby are being issued by the Company
upon the exercise of the Warrants. The warrants were issued pursuant to various
Warrant Agreements (the"Warrant Agreements") between the Company and Continental
Stock Transfer and Trust, as Warrant Agent (the"Warrant Agent") in connection
with past securities offerings. The following table sets forth certain
provisions of the Warrant Agreements. The number of shares issuable upon
exercise of all Warrants is based on the number of shares of Common Stock
outstanding at August 31, 1997.
10
<PAGE>
<TABLE>
<CAPTION>
Number
Per of Shares Dollars
Number Warrant Number Per Share Issuable upon
Issue of Warrants Exp. Exercise of Shares Purchase upon Exer. of Exer. of all
Description Date Outstanding Date Price per warr. price all warrants warrants
- ----------- ---- ----------- ---- -------- --------- --------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class B Warrant 2/17/93 1,725,000 2/12/98 $1.80 1.51 $1.19 2,604,750 $3,099,653
Class B Warrant 2/25/93 81,333 2/12/98 1.80 1.51 1.19 122,813 146,147
--------- ---- --------- ----------
TOTAL CLASS B
WARRANTS 1,806,333 $1.80 1.51 $1.19 2,727,563 $3,245,800
========= ===== ===== ========= ==========
Other Warr-Petritz 9/29/89 63,300 10/26/97 $.50 1.00 $.50 63,300 $ 31,650
Other Warr-Petritz 9/27/90 52,751 10/26/97 .50 1.00 .50 52,751 26,376
Other Warr-TTLP 9/29/89 126,600 10/26/97 .50 1.00 .50 126,600 63,300
Other Warr-TTLP 9/27/90 105,499 10/26/97 .50 1.00 .50 105,499 52,750
--------- --------- ----------
Total Other
Warrants 348,150 1.00 $$.50 348,150 $ 174,076
========= ===== ========= ==========
Repres. Warr. 3/6/91 195,000 10/26/97 $.50 1.00 $.50 195,000 $97,500
Repres. Warr 10/30/92 300,000 10/26/97 .50 1.00 .50 300,000 150,000
Repres. Stock in Unit* 2/25/93 517,500 2/12/98 2.475 1.59 1.56 822,825 1,283,607
Repres. Warr** 2/25/93 172,500 2/12/98 2.97 1.63 1.82 281,175 511,739
Repres. Warr. 1/31/94 400,000 1/30/99 1.60 1.00 1.60 400,000 640,000
--------- --------- ----------
Total Repres.
Warrants 1,585,500 1,999,000 $2,682,846
========= ========= ==========
Total Warrants 3,739,983 5,074,713 $6,102,722
========= ========= ==========
</TABLE>
- --------------------
* The original 172,500 Representative Warrants granted on February 25, 1993
were actually units consisting of three shares of Common Stock and one
Class B Warrant for a price of $7.425 per unit. The units will eventually
split up thus creating 517,500 shares of Common Stock at a exercise price
of $2.475. These shares contain anti-dilution provisions detailed in the
Representative Warrant Agreement.
** The Warrant within the Representative Warrants granted on February 25, 1993
was for an exercise price of $2.97 with anti-dilution provisions.
The Warrants must be exercised prior to 5:30 p.m., New York City time, on
the expiration date shown above. The Board of Directors of the Company is
considering changing the per share exercise price and/or the expiration date of
certain Warrants.
The Warrants may be exercised by surrendering to the Company the warrant
certificates evidencing the Warrants to be exercised with the accompanying form
of election to purchase properly completed and executed, together with payment
of the Exercise Price. Payment of the Exercise Price may be made in the form of
cash or by certified or official bank check payable to the Company. Upon
surrender of the Warrant certificate and payment of the Exercise Price, the
Company will deliver or cause to be delivered, to or upon the written order of
such holder, stock certificates representing the number of whole shares of
Common Stock to which such holder is entitled. If less than all of the Warrants
evidenced by a warrant certificate are to be exercised, a new warrant
certificate will be issued for the remaining number of Warrants.
No fractional shares of Common Stock will be issued upon exercise of the
Warrants. The Company will pay to the holder of the Warrant at the time of
exercise an amount in cash equal to the current market value of any such
fractional share of Common Stock less a corresponding fraction of the Exercise
Price.
The Class B Warrants and Representative Warrants which are currently
exercisable, for 4,726,563 shares of Common Stock, have usual and customary
11
<PAGE>
anti-dilution provisions as more fully described in the Warrant Agreements with
Continental Stock Transfer and Trust.
The Board of Directors is currently considering extending the expiration
date and/or adjusting the Exercise Price in order to have the price of the
Warrants more consistent with the current market price. The Company may at any
time reduce the Exercise Price to any amount (but not less than the par value of
the Common Stock) for any period of time (but not less than twenty (20) business
days) deemed appropriate by the Board of Directors of the Company.
LEGAL MATTERS
The validity of the Common Stock to be issued upon exercise of the Warrants
will be passed upon for the Company by Holme Roberts & Owen LLP, Denver,
Colorado.
EXPERTS
The financial statements and schedules of Simtek Corporation incorporated
by reference into this prospectus from Simtek's form 10-KSB Report, have been
audited by Hein + Associates LLP, independent public accountants, as indicated
in their reports with respect thereto, and are incorporated by reference herein
and in the Registration Statement in reliance upon the authority of said firm as
experts in giving said reports.
12
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Capitalized terms used but not otherwise defined in Part II are used as defined
in the Prospectus contained in this Registration Statement.
ITEM 14. 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......... $ 2,104
Legal fees and expenses..................................... 10,000
Accounting fees............................................. 10,000
Miscellaneous............................................... 5,000
---------
Total ............................................... $ 27,104
=========
- -------------------------
The above expenses will be borne by the Company.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Six of the Company's Articles of Incorporation requires the Company
to indemnify, to the fullest extent authorized by applicable law, any person who
is or is threatened to be made a party to any civil, criminal, administrative,
investigative, or other action or proceeding instituted or threatened by reason
of the fact that he is or was a director or officer of the Company or is or was
serving at the request of the Company as a director or officer of another
corporation, partnership, joint venture, trust or other enterprise.
Article Five of the Company's Articles of Incorporation provides that, to
the fullest extent permitted by the Colorado Corporation Code, directors of the
Company shall not be liable to the Company or any of its shareholders for
damages caused by a breach of a fiduciary duty by such director.
The above discussion of the Company's Articles of Incorporation is intended
to be only a summary and is qualified in its entirety by the full text of each
of the foregoing.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
4.1 Specimen of Common Stock certificate of the Company. (1)
5.1 Legality opinion of Holme Roberts & Owen LLP.
23.1 Consent of Independent Public Accountants--Hein + Associates LLP.
23.2 Consent of Holme Roberts & Owen LLP is included in Exhibit 5.1.
- -------------------------
(1) Incorporated by reference to the Company's Amendment No. 2 to Form S-1
Registration Statement (Reg. No. 33- 37874) filed with the Commission on
March 4, 1991.
13
<PAGE>
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arises under the Securities Act
of 1993 may be permitted to directors, officers and controlling persons of the
Registrant, 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, therefor, 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 a controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by a final adjudication of such
issue.
The Registrant hereby undertakes that:
(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;
(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;
Provided, however, that paragraphs (i) and (ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(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.
The undersigned registrant hereby undertakes that for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement 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 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.
14
<PAGE>
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 this 30th day of September 1997.
Simtek Corporation
a Colorado corporation
By: /s/ Richard L. Petritz
-------------------------------------------
Richard L. Petritz
Chief Executive Officer and Chief Financial
Officer
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has caused this Registration Statement to be signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Richard L. Petritz Chairman of the Board September 30, 1997
- ----------------------------------
Richard L. Petritz
/s/ Richard L. Petritz Chief Executive Officer September 30, 1997
- ---------------------------------- and Chief Financial Officer
Richard L. Petritz
/s/ Douglas Mitchell Chief Operating Officer September 30, 1997
- ----------------------------------
Douglas Mitchell
/s/ Robert Keeley
- ---------------------------------- Director September 30, 1997
Robert Keeley
/s/ Sheldon Taylor Director September 30, 1997
- ----------------------------------
Sheldon Taylor
/s/ Klaus Wiemer Director September 30, 1997
- ----------------------------------
Klaus Wiemer
</TABLE>
15
Exhibit 5.1
October 3, 1997
Board of Directors
Simtek Corporation
1465 Kelly Johnson Boulevard
Colorado Springs, Colorado 80920
Re: Simtek Corporation Registration Statement on Form S-3,
5,074,713 Shares of Common Stock
Gentlemen:
As counsel for Simtek Corporation, a Colorado corporation (the "Company"), we
have examined the above-captioned Registration Statement on Form S-3 under the
Securities Act of 1993, as amended (the "Registration Statement"), which the
Company plans to file covering the issuance by the Company of 5,074,713 shares
of its Common Stock, par value $.01 per share ("Common Stock"), upon the
exercise of certain outstanding Warrants.
We have examined the Warrants, the Company's Articles of Incorporation, as
amended, its Bylaws and the record of its corporate proceedings and have made
such other investigation as we have deemed necessary in order to express the
opinions set forth below.
Based on such investigation, it is our opinion that the shares of Common Stock,
when issued pursuant to the terms of the Warrants, will be legally issued, fully
paid and non-assessable.
We hereby consent to all references to us in the Registration Statement and all
amendments to the Registration Statement. We further consent to the use of this
opinion as an exhibit to the Registration Statement.
Very truly yours,
HOLME ROBERTS & OWEN LLP
By: /s/ Garth B. Jensen
---------------------------
Garth B. Jensen, Partner
Exhibit 23.1
INDEPENDENT AUDITORS CONSENT
We consent to the incorporation by reference of our report dated February 21,
1997 accompanying the financial statements of Simtek Corporation in the Form S-3
Registration Statement of Simtek Corporation and to the use of our name and the
statements with respect to us, as appearing under the heading "Experts" in the
Registration Statement
HEIN + ASSOCIATES LLP
Denver, Colorado
October 3, 1997
