2
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
----------------------------------
[X] Annual report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended December 31, 2005
[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission file number 0-19027
SIMTEK CORPORATION
(Exact name of registrant as specified in its charter)
-------------------------------------------------
Colorado 84-1057605
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
4250 Buckingham Drive, Suite 100,
Colorado Springs, Colorado 80907
(Address of principal executive offices) (Zip Code)
(719)531-9444
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12 (b) of the Exchange Act:
None
Securities registered pursuant to Section 12 (g) of the Exchange Act:
Common Stock $.01 Par Value OTC Bulletin Board
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in rule 405 of Securities Act.
Yes No X
--- ---
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes No X
--- ---
Indicate by check mark whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes X No
--- ---
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer or a non- accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):
Large Accelerated Filer Accelerated Filer Non-accelerated filer X
--- --- ---
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act.) Yes No X
--- ---
Aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant as of June 30, 2005, based upon the closing
price of the common stock as reported by the OTC Electronic Bulletin Board on
such date was approximately $20,229,000. The total number of shares of Common
Stock issued and outstanding as of March 31, 2006 was 146,920,823.
EXPLANATORY NOTE
This Form 10-K/A amends Items 10, 11, 12, 13 and 14 and includes exhibits
under Item 15 of the Annual Report on Form 10-K for the year ended December 31,
2005 filed by Simtek Corporation on April 7, 2006. The original Form 10-K
incorporated by reference these items from the registrant's proxy statement to
be filed pursuant to Regulation 14A with respect to the registrant's 2006 annual
meeting of shareholders. As the registrant will not be filing the proxy
statement for its 2006 annual meeting of shareholders pursuant to Regulation 14A
within 120 days after the registrant's fiscal year ended December 31, 2005,
Items 10, 11, 12, 13 and 14 of Form 10-K are being filed via this Form 10-K/A,
as well as Exhibits 21.1, 31.1, 31.2, 32.1 and 32.2 under Item 15. Except as set
forth in this Explanatory Note, this Form 10-K/A does not amend or update any
other information set forth in the Form 10-K originally filed by Simtek
Corporation on April 7, 2006.
2
TABLE OF CONTENTS
PART III
Item 10: Directors and Executive Officers of the Registrant............. 4
Item 11: Executive Compensation......................................... 7
Item 12: Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters............... 10
Item 13: Certain Relationships and Related Transactions................. 13
Item 14: Principal Accountant Fees and Services......................... 15
PART IV
Item 15: Exhibits and Financial Statement Schedules..................... 17
Signatures................................................................... 18
Exhibit Index................................................................ 19
3
PART III
Item 10: Directors and Executive Officers of the Registrant
-----------------------------------------------------------
Directors and Executive Officers
Our directors and executive officers are as follows:
Name Age Position
---- --- --------
Harold Blomquist....... 53 Chairman of the Board, Chief Executive Officer and President
Brian Alleman.......... 49 Vice President and Chief Financial Officer, Corporate Secretary
Alfred Stein........... 72 Director
Robert H. Keeley....... 64 Director
Ronald Sartore......... 56 Director
Robert Pearson......... 70 Director
HAROLD A. BLOMQUIST was originally appointed as a director in May 1998,
resigned from the Board in July 2001 to avoid a potential conflict of interest
with his employer and was re-appointed in January 2002. Mr. Blomquist's current
term of office as a director expires at the 2008 annual meeting. In October
2003, Mr. Blomquist was elected to the position of Chairman of the Board of
Directors. Mr. Blomquist has served as Chief Executive Officer and President of
the Company since May 2005. He served as a Director on the Board of Microsemi,
Inc. from February 2003 to February 2006, and as a consultant to venture
investors and early stage technology companies in the semiconductor and
electronic components areas. In the past, he was employed as President and Chief
Executive Officer of Morpho Technologies, Inc., and Chief Executive Officer of
Tower Semiconductor, USA, Inc. Mr. Blomquist served as a member of the Board of
Directors of AMIS Holding Co. and Sr. Vice President of AMI Semiconductors.
Prior to joining AMI in April 1990, Mr. Blomquist held positions in engineering,
sales, and marketing for several semiconductor firms, including Texas
Instruments, Inmos Corporation, and General Semiconductor. Mr. Blomquist was
granted a BSEE degree from the University of Utah and also attended the
University of Houston, where he pursued a joint Juris Doctor/MBA course of
study.
ROBERT C. PEARSON has served as a director since July 2002. Mr. Pearson's
current term of office as a director expires at the 2008 annual meeting. He
4
joined RENN Capital Group in April 1997 and is Senior Vice
President-Investments. From May 1994 to May 1997, Mr. Pearson was an independent
financial management consultant primarily engaged by RENN Capital Group. From
May 1990 to May 1994, he served as Chief Financial Officer and Executive Vice
President of Thomas Group, Inc., a management consulting firm, where he was
instrumental in moving a small privately held company from a start-up to a
public company with over $40 million in revenues. Prior to 1990, Mr. Pearson
spent 25 years at Texas Instruments Incorporated where he served in several
positions including Vice President-Controller and later as Vice
President-Finance. Mr. Pearson holds a BS in Business from the University of
Maryland and was a W.A. Paton Scholar with an MBA from the University of
Michigan. He is currently a Director of Poore Brothers, Inc., CaminoSoft, Inc.,
and Advanced Power Technology, Inc., all publicly held. He is also a Director of
eOriginal, Inc., a privately held company.
RONALD SARTORE has served as a director since March 2004, which term
expires in 2006. Mr. Sartore has over 30 years experience in the computer and
semiconductor fields and is currently the Vice President of the System
Architecture Group for Cypress Semiconductor Corporation's Consumer and
Computation Division. Mr. Sartore joined Cypress Semiconductor Corporation, or
"Cypress," after Cypress's May 1999 accretive acquisition of Anchor Chips, where
he was its CEO, and President. Mr. Sartore founded Anchor Chips in 1995 and
secured $9.5 million in funding from its majority owner: South Korea's LG
Semicon. Prior to that, Mr. Sartore worked as a systems architect for San Diego
based AMCC. Previous to AMCC, Mr. Sartore was a technical consultant for Array
Microsystems, and an employee of Maximum Storage, both in Colorado Springs. In
1985, Mr. Sartore co-founded Cheetah International, a manufacturer of personal
computers and peripherals until its acquisition by Northgate Computers in 1990.
Cheetah's products, designed by Sartore, have received acclaim for their high
performance and were the subject of articles in numerous trade magazines. Prior
to Cheetah, Mr. Sartore has held technical design positions in the following
companies: Inmos, in Colorado Springs, Colorado; Synercom Technology, in
Sugarland, Texas; Texas Instruments, in Stafford, Texas; NCR, in Millsboro,
Delaware; and Sperry Univac, in Blue Bell, Pennsylvania. Mr. Sartore currently
holds 13 US patents and obtained a BS degree in Electrical Engineering from
Purdue University.
ALFRED J. STEIN has served as a director since March 2004, which term
expires in 2006. He is currently a Consultant and Advisor to startup companies
in the high technology industry. He previously served at VLSI Technology, Inc.
as Chairman of the Board and Chief Executive Officer from 1982 until its
acquisition by Philips Electronics in 1999. During his tenure, VLSI grew from a
venture capital funded start-up to a publicly traded company with revenues in
excess of $600 million and over 2,200 employees in more than 25 locations around
the world. For more that 45 years, Mr. Stein has played a significant role in
the high tech industry, including senior management assignments at both Texas
Instruments and Motorola. Mr. Stein was with Texas Instruments for 18 years from
1958 through 1976; his last position was Vice President and General Manager for
the Electronics Devices Division. Mr. Stein was with Motorola for five years
where he was Vice President and Assistant General Manager of Motorola's
Semiconductor Sector. He joined VLSI Technology from Arrow Electronics where he
had been that company's Chief Executive Officer. Mr. Stein is on the Board of
Directors of two publicly traded companies, Advanced Power Technology and ESS
Technology, as well as several private startup companies. He also has served on
the board of directors at Applied Materials, Radio Shack Corporation and was
5
Chairman of the Board for the Semiconductor Industry Association (SIA). He
served on the Board of Trustees for St. Mary's University of Texas.
ROBERT H. KEELEY has served as a director since May 1993. Mr. Keeley's
current term of office as a director expires at the 2007 annual meeting. He is
currently Professor (Emeritus) at the University of Colorado at Colorado Springs
where he served as the El Pomar Professor of Business Finance from 1992 until
2004. From 1986 to 1992, Dr. Keeley was a professor in the Department of
Industrial Engineering and Engineering Management at Stanford University. Prior
to joining Stanford, he was a general partner of Hill and Carmen (formerly Hill,
Keeley and Kirby), a venture capital firm. Dr. Keeley holds a Bachelor's degree
in electrical engineering from Stanford University, an M.B.A. from Harvard
University, where he was a Baker Scholar, and a Ph.D. in business administration
from Stanford University. Dr. Keeley is a director and president of a private
company in the wind energy business, and a director of two other private
companies.
BRIAN ALLEMAN has served as Vice President and Chief Financial Officer at
the Company since June of 2005. Mr. Alleman is a partner in the Denver office of
Tatum LLC, a national firm of experienced executives serving as full-time,
part-time, interim, project, or on-staff professionals to provide executive
solutions to companies undertaking significant change. Mr. Alleman has over 25
years of experience in financial management, with 10 years of experience in
leading international accounting firms. For nine years prior to joining Tatum,
Mr. Alleman served as Vice President and Chief Financial Officer with Centuri
Corporation in Penrose, Colorado. Mr. Alleman will remain a partner in Tatum,
which will allow Simtek access to a variety of professional resources provided
by Tatum to its clients. Mr. Alleman holds a Bachelors Degree in Accounting from
Seton Hall University and became a Certified Public Accountant in the State of
New Jersey in 1980.
Audit Committee
The Board has established an Audit Committee as one of the three standing
committees of the Board. The Audit Committee consists of Robert Keeley as the
chairperson, and Alfred Stein. The Audit Committee assists the Board in its
oversight of the integrity of the Company's accounting, auditing, and reporting
practices. Our Board has determined that Dr. Keeley has the requisite education,
background or experience to be considered an "audit committee financial expert"
as that term is defined by applicable SEC rules. All members of the Audit
Committee are "independent" under current Nasdaq Stock Market, Inc. listing
standards.
Section 16(a) Beneficial Ownership Reporting Compliance
To our knowledge, based solely upon a review of reports furnished to us and
written representations that no other reports were required, during the fiscal
year ended December 31, 2005, all filing requirements applicable to officers,
directors and greater than 10% beneficial owners of our common shares under
Section 16(a) of the Securities Exchange Act of 1934, as amended, were complied
6
with except as noted below. Mr. Blomquist filed one amendment to Form 4 on
October 25, 2005 (which amended a Form 4 previously filed on July 1, 2005, with
respect to a transaction occurring on May 9, 2005 and May 17, 2005).
Code of Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics that applies to our
Chief Executive Officer, the Chief Financial Officer, and the Controller, as
well as to our directors and employees. The Code of Business Conduct and Ethics
can be found at our Internet website at www.simtek.com. In the event that we
make changes in, or provide waivers of, the provisions of the Code of Business
Conduct and Ethics that the SEC requires us to disclose, we intend to disclose
these events on our website. A copy of our Code of Business Conduct and Ethics
is available for any person, without charge, upon request, by addressing your
request to: Simtek Corporation, 4250 Buckingham Dr. #100, Colorado Springs, CO
80907, Attention: Investor Relations.
Item 11: Executive Compensation
The following table sets forth information for each of our last three
fiscal years with respect to the annual and long-term compensation of the
individuals acting as the Chief Executive Officer during the fiscal year ended
December 31, 2005. There were no other executive officers of the Company who
served during any part of 2005 whose annual salary and bonus for the fiscal year
ended December 31, 2005 exceeded $100,000.
Summary Compensation Table
Long Term
Compensation
Annual Compensation Awards
------------------------------------------------------- -------------
Securities
Other Annual Underlying
Name and Principal Position Year Salary ($) Bonus ($) Compensation ($) Options
--------------------------- ---- ---------- --------- ---------------- ----------
Harold A. Blomquist(1) 2005 $ 209,375 50,000 150,490 2,535,000
Chief Executive Officer, 2004 $ -- -- -- --
President and Chairman of 2003 $ -- -- -- --
the Board
Douglas M. Mitchell(2) 2005 $ 174,922 -- 118,027 --
Chief Executive Officer, Chief 2004 $ 175,000 -- -- --
Financial Officer (acting) and 2003 $ 175,000 -- -- 200,000
President
(1) Mr. Blomquist became Chief Executive Officer and President on May 9, 2005.
(2) Mr. Mitchell resigned as Chief Executive Officer, Chief Financial Officer
(acting) and President on May 9, 2005.
7
Option Grant Table
The following table sets forth certain information with respect to options
granted by us during the fiscal year ended December 31, 2005 to the individuals
named in the summary compensation table above.
Shares
subject to
Options Potential Realizable
Shares Granted to Market Value at Assumed
Subject to Employees Price per Annual Rate of Stock
Options in Fiscal Exercise Share on Price Appreciation
Granted in Year % of Price Per Date of Expiration for Option Term
Name Fiscal Year Total Share Grant Date 5% 10%
---- ----------- ---------- --------- --------- ----------- --------- ---------
Harold A. Blomquist(1) 35,000 2.29% $0.62 $0.62 2/15/2012 $8,834 $20,587
Harold A. Blomquist 1,096,125 71.86% $0.66 $0.66 5/9/2012 $294,514 $686,337
Harold A. Blomquist 1,403,875 92.03% $0.54 $0.54 5/17/2012 $308,620 $719,210
(1) Mr. Blomquist became Chief Executive Officer and President on May 9, 2005.
Year-End Option Table
The following table sets forth, as of December 31, 2005, the number of
shares subject to unexercised options held by the individuals named in the
summary compensation table above. 2,030,556 exercisable options had an exercise
price less than the last sale price of our common stock underlying the options
as reported by the OTC Electronic Bulletin Board on the last trading day of the
fiscal year ended December 31, 2005.
Value of Unexercised
Number of Unexercised Options in-the-money Options at
Shares at Fiscal Year-End Fiscal Year-End
-------------- ------------------------------- -------------------------------
Acquired on Value Exercisable Unexercisable Exercisable Unexercisable
Name Exercise (#) Realized ($) (#) (#) ($) ($)
------------------------ -------------- -------------- --------------- --------------- --------------- ---------------
Harold A. Blomquist(1) 0 $ 0 622,361 2,013,889 $ 0 $ 0
Douglas M. Mitchell(2) 250,000 $ 9,866 553,333 16,667 $ 32,700 $ 2,500
(1) Mr. Blomquist became Chief Executive Officer and President on May 9, 2005.
(2) Mr. Mitchell resigned as Chief Executive Officer, Chief Financial Officer
(acting) and President on May 9, 2005.
Director Compensation Overview
Beginning March 2004, each director who was not an employee received $1,500
for each meeting of the Board, attended in person, and $500 for each meeting of
a committee of the Board. Beginning January 1, 2005, each director of the Board
8
also received a $10,000 annual stipend; the stipend is paid quarterly. Until the
Company has two consecutive quarters of net profit, the stipend is paid in
restricted common stock. The cost per common share is calculated based on the
average closing price of the Company's common stock during the 20 trading days
prior to last day of each quarter. Commencing the first quarter after the
Company has shown two consecutive quarters of audited net profit, the stipend
will be paid in cash. Upon initial appointment or election to the Board, each
newly appointed or elected member receives options to purchase 100,000 shares of
the Company's common stock. Each member of the Board receives, within the first
month of each calendar year, while serving as a member of the Board, a grant of
options to purchase 35,000 shares of the Company's common stock. Along with the
above compensation, the Chairman of the Board receives $4,000 per calendar
quarter, as long as the Chairman is not an employee. Directors are also
reimbursed for their reasonable out-of-pocket expenses incurred in connection
with their duties to us.
Employment Contracts and Termination of Employment Arrangements
The material terms of Harold Blomquist's employment with the Company are as
set forth below, as previously disclosed in Item 5.02(c) of the Current Report
on Form 8-K filed on May 12, 2005. Mr. Blomquist will be employed for one year
with automatic extensions for additional one-year periods unless otherwise
terminated. Mr. Blomquist's base salary will be $325,000 per year and he will be
eligible to receive a yearly cash bonus, based on performance, of up to 100% of
his salary. In addition, Mr. Blomquist will receive a yearly bonus of options to
purchase between 100,000 and 400,000 shares of the Company's common stock; the
exact amount will be based on performance. Upon beginning employment, Mr.
Blomquist received options to purchase 2.5 million shares of the Company's
common stock and a $50,000 bonus. Within four months of beginning employment,
Mr. Blomquist was required to purchase 200,000 shares of common stock from the
Company, which Mr. Blomquist did on May 19, 2005. The agreement provided that
for each share of common stock Mr. Blomquist purchased from the Company within
six months of beginning employment, including the 200,000 shares he was required
to purchase, the Company would grant him an additional share, up to a maximum of
500,000 matching shares. In addition to the 200,000 shares he purchased on May
19, 2005, Mr. Blomquist purchased 275,000 shares on November 9, 2005; in each
case, the purchase price was determined by calculating the average close price
for the five trading days prior to the purchase date. We issued an additional
475,000 shares of our common stock to Mr. Blomquist for no additional
consideration to match these previous stock purchases. Upon termination, Mr.
Blomquist will be restricted from competing against the Company for a period of
18 months. If Mr. Blomquist is terminated by the Company without cause, all of
Mr. Blomquist's unvested stock options will immediately vest and he will
continue to receive his base salary, benefits, and cash and stock bonuses for 18
months. If Mr. Blomquist terminates employment due to good cause or as a result
of constructive termination relating to a change of control of the Company, all
of Mr. Blomquist's unvested stock options will immediately vest and he will
continue to receive his base salary, benefits and cash and stock bonuses for 18
months.
Incident to Douglas Mitchell's resignation as director, Chief Executive
Officer, President and Chief Financial Officer (acting) of Simtek, and as
Chairman of the Board of Simtek's subsidiary, Q-DOT, Inc., Simtek entered into a
9
Separation Agreement, dated May 9, 2005 (the "Separation Agreement") with Mr.
Mitchell. The Separation Agreement provides that for six months following the
date of the Separation Agreement, Mr. Mitchell would receive a base salary
(prorated from an annualized base salary of $225,000), and for an additional 12
months following the six months mentioned above, he will receive $1,875 per
month in exchange for providing consulting services to Simtek. Mr. Mitchell's
stock options will continue to vest and his vested stock options will remain
exercisable during the period that he continues to receive his base salary and
during the period that he provides consulting services to Simtek. Per the terms
of the Separation Agreement, the Company granted to Mr. Mitchell 150,000 shares
of common stock on June 15, 2005 and 50,000 shares of common stock on November
25, 2005. The Separation Agreement also contains a mutual release.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee, during fiscal year 2005, consisted of Ronald
Sartore, Robert Pearson, Douglas Mitchell (until May 2005) and Harold Blomquist
(beginning May 2005). Mr. Mitchell was our Chief Executive Officer, President
and Chief Financial Officer (acting), as well as the Chairman of our subsidiary,
Q-DOT, Inc., until he resigned from such positions on May 9, 2005. Mr. Blomquist
has been the Chairman of our Board of Directors since October 2003, and has been
our Chief Executive Officer and President since May 9, 2005. On June 28, 2005,
we issued to Renaissance Capital Growth and Income Fund III, Inc., Renaissance
US Growth Investment Trust PLC and BFSUS Special Opportunities Trust PLC, which
are managed by RENN Capital Group, warrants to purchase 200,000 shares of our
common stock at $0.50 per share with an exercise period of 5 years. These
warrants were issued in exchange for an agreement to delay making principal
redemption installments under the 7.50% Convertible Debentures issued by Simtek
in 2002 in the aggregate principal amount of $3,000,000. 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 Convertible Debentures, as required by the
terms of the 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 Convertible 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 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 a
total of 9,375,000 shares of common stock to Renaissance Capital Growth and
Income Fund III, Inc., Renaissance US Growth Investment Trust PLC and BFSUS
Special Opportunities Trust PLC in exchange for a total of $1,500,000. RENN
Capital Group is the agent for these three investment funds. One of our
directors, Mr. Robert Pearson, holds the position of Senior Vice President of
RENN Capital Group.
10
Item 12: Security Ownership of Certain Beneficial Owners and Management
-----------------------------------------------------------------------
Securities Authorized For Issuance Under Equity Compensation Plans
The information concerting securities authorized for issuance under equity
compensation plans is included in Item 5 "Market for Registrant's Common Equity,
Related Stockholder Matters and Issuer Purchases of Equity Securities" of this
Form 10-K under the caption "Equity Compensation Plan Information".
Security Ownership of Certain Beneficial Owners and Management
The able below sets forth information regarding ownership of our
common stock as of April 25, 2006 by each person who is known by us to
beneficially own more than five percent of our common stock, by each director,
by each current or former executive officer named in the summary compensation
table, and by all directors and current executive officers as a group. Shares
issuable within sixty days after April 25, 2006 upon the exercise of options,
warrants or debentures are deemed outstanding for the purpose of computing the
percentage ownership of persons beneficially owning such options, warrants or
debentures but are not deemed outstanding for the purpose of computing the
percentage ownership of any other person. 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.
Amount and Nature
Name and Address of Beneficial Percent of
of Beneficial Owner Ownership Class
------------------- ------------------ ----------
Robert H. Keeley 180,007 (1) *
P. O. Box 240
Hillside, CO 81232
Harold A. Blomquist 1,993,534 (2) 1.35%
3935 Serenity Place
Colorado Springs, CO 80908
Robert Pearson 110,007 (3) *
8080 N. Central Expressway,
Suite 210-LB59
Dallas, TX 75203
Ronald Sartore 257,924 (4) *
14445 Cypress Point
Poway, CA 92064
Alfred Stein 198,924 (5) *
410 Old Oak Court
Los Altos, CA 94022
Brian Alleman 27,778 (6) *
12861 Serenity Park
Colorado Springs, CO 80907
Douglas Mitchell 839,386 (7) *
1775 Sunshine Circle
Woodland Park, CO 80863
11
Renaissance Capital Growth &
Income Fund III, Inc. 9,537,782 (8) 6.28%
c/o RENN Capital Group
8080 N. Central Expressway,
Suite 210-LB59
Dallas, TX 75203
Renaissance US Growth Investment
Trust PLC 9,537,783 (9) 6.28%
c/o RENN Capital Group
8080 N. Central Expressway,
Suite 210-LB59
Dallas, TX 75203
BFSUS Special Opportunities Trust PLC. 8,537,783 (10) 5.62%
c/o RENN Capital Group
8080 N. Central Expressway,
Suite 210-LB59
Dallas, TX 75203
SF Capital Partners, Ltd 10,107,367 6.88%
3600 South Lake Drive
St. Francis, WI 53235
Cypress Semiconductor Corporation 21,796,428 (11) 13.46%
3901 N. First Street
San Jose, CA 95134
Crestview Capital Master LLC 24,687,500 16.80%
95 Revere Drive, Suite A
Northbrook, IL 60062
Big Bend XXVII Investments, L.P. 14,375,000 9.78%
3401 Armstrong Avenue
Dallas, TX 75205-4100
Toibb Investment LLC 11,875,000 8.08%
6355 Topanga Canyon Blvd., Suite 335
Los Angeles, CA 91367
All current executive officers and
directors as a group 2,768,174 (12) 1.86%
(6 persons)
----------------------
* Less than one percent.
(1) Includes 10,000 shares of our common stock held by Mr. Keeley's wife,
Sandra D. Keeley. Mr. Keeley disclaims beneficial ownership of these
shares. Includes 121,250 shares issuable upon exercise of options. Includes
33,757 shares of restricted common stock that are due, but have not been
issued to Mr. Keeley as part of his directors' compensation for the period
January 1, 2005 through March 31, 2006.
(2) Includes 800 shares of our common stock that Mr. Blomquist's son personally
owns and includes 1,039,028 shares issuable upon exercise of options.
Includes 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.
(3) Includes 76,250 shares issuable upon exercise of options. Includes 33,757
shares of restricted common stock that are due, but have not been issued to
Mr. Pearson as part of his directors' compensation for the period January
1, 2005 through March 31, 2006.
12
(4) Includes 164,167 shares issuable upon exercise of options. Includes 33,757
shares of restricted common stock that are due, but have not been issued to
Mr. Sartore as part of his directors' compensation for the period January
1, 2005 through March 31, 2006.
(5) Includes 164,167 shares issuable upon exercise of options. Includes 33,757
shares of restricted common stock that are due, but have not been issued to
Mr. Stein as part of his directors' compensation for the period January 1,
2005 through March 31, 2006.
(6) Includes 27,778 shares issuable upon exercise of options.
(7) Includes 470,000 shares issuable upon exercise of options. Mr. Mitchell
resigned as an officer and director of Simtek and Q-DOT, Inc. on May 9,
2005.
(8) Assumes conversion, at a conversion price of $0.22 per share, of debentures
issued to Renaissance Capital Growth & Income Fund III, Inc. for 4,545,455
shares of our common stock. Assumes exercise of warrants held by
Renaissance Capital Growth & Income Fund III, Inc. for 316,666 shares of
our common stock. Includes 66,666
(9) Assumes conversion, at a conversion price of $0.22 per share, of debentures
issued to Renaissance US Growth & Investment Trust PLC for 4,545,455 shares
of our common stock. Assumes exercise of warrants held by Renaissance US
Growth Investment Trust PLC for 316,667 shares of our common stock.
(10) Assumes conversion, at a conversion price of $0.22 per share, of debentures
issued to BFSUS Special Opportunities Trust PLC for 4,545,455 shares of our
common stock. Assumes exercise of warrants held by BFSUS Special
Opportunities Trust PLC for 316,667 shares of our common stock.
(11) Assumes exercise of warrants held by Cypress for 15,055,612 shares of our
common stock.
(12) Includes 1,592,640 shares issuable upon exercise of options. Includes
138,734 shares of restricted stock required to be issued for director
compensation. Includes 10,000 shares of our common stock held by Mr.
Keeley's wife, Sandra D. Keeley, with respect to which Mr. Keeley disclaims
beneficial ownership. Includes 800 shares of our common stock that Mr.
Blomquist's son personally owns. Does not include the 27,613,348 shares
beneficially owned by Renaissance Capital Growth & Income Fund III, Inc.,
Renaissance US Growth Investment Trust PLC and BFSUS Special Opportunities
Trust PLC. RENN Capital Group is agent for these three investment funds.
Mr. Robert Pearson is a Senior Vice President of RENN Capital Group. Mr.
Pearson also holds the position of a director on Simtek's board of
directors.
Item 13: Certain Relationships and Related Transactions
--------------------------------------------------------
On July 1, 2002, we received a total of $3,000,000 from Renaissance Capital
Growth and Income Fund III, Inc., Renaissance US Growth Investment Trust PLC and
BFSUS Special Opportunities Trust PLC (collectively, the "RENN Entities") 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 Entities 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
13
(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 Entities 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 Entities in
exchange for $1,500,000. On June 28, 2005, we issued warrants to purchase
200,000 shares of our common stock to the RENN Entities 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. RENN Capital Group, Inc.
is the agent for the RENN Entities. One of our directors, Mr. Robert Pearson,
holds the position of Senior Vice President of RENN Capital Group, Inc.
On October 12, 2004, we issued in a private placement to SF Capital
Partners Ltd. 3,857,367 shares of our common stock and a warrant to acquire
2,063,984 shares of our common stock. The warrant has a 5-year term 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 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 warrant to acquire 2,063,984 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 report, 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
report, 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 "Security Ownership of Certain Beneficial Owners and
Management" table above under the column entitled "Amount and Nature of
Beneficial Ownership."
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 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.
14
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.
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 Entities on such date, as described above, as well as certain other
individual and institutional investors): Crestview Capital Master LLC 24,687,500
shares in exchange for $3,950,000; Big Bend XXVII Investments, L.P. 14,375,000
shares for $2,300,000; and Toibb Investment LLC 11,875,000 shares for
$1,900,000.
Item 14. Principal Accounting Fees and Services
-----------------------------------------------
Hein & Associates LLP served as the Company's principal accountants for the
fiscal year ended December 31, 2005, and the board has selected Hein &
Associates LLP as Simtek's principal accountants for the 2006 fiscal year.
Audit Fees
Simtek was billed an aggregate of approximately $101,014 and approximately
$86,173 in fees for professional services rendered during the fiscal years ended
December 31, 2005 and December 31, 2004, respectively, in connection with the
audit of Simtek's consolidated financial statements for such fiscal years and
the reviews of the financial statements included in Simtek's Forms 10-Q and
10-QSB for such fiscal years and statutory and regulatory filings or engagements
for such years.
Audit-Related Fees
Simtek was billed $11,846 and $4,500 for assurance and related services by
Hein & Associates LLP during the fiscal years ended December 31, 2005 and
December 31, 2004, respectively.
15
Tax Fees
Simtek was billed an aggregate of $12,100 and $15,200 in fees for
professional services rendered during the fiscal year ended December 31, 2005
and December 31, 2004, respectively, for tax compliance and tax advice. The
nature of the tax services comprising such fees was in connection with tax
compliance (including U.S. federal and state returns) and tax consulting.
All Other Fees
Hein & Associates LLP did not bill the Company for any other services
rendered to Simtek for the fiscal years ended December 31, 2005 and December 31,
2004.
Pre-Approval Policies and Procedures
All audit and audit-related services, tax services and other services were
pre-approved by the audit committee of our board of directors. The audit
committee's pre-approval policy provides for pre-approval of all audit,
audit-related, tax and all other services provided by Hein & Associates LLP. The
audit committee concluded that such services by Hein & Associates LLP were
compatible with the maintenance of that firm's independence in the conduct of
its auditing functions.
16
PART IV
Item 15: Exhibits
-----------------
21.1 Subsidiaries of the registrant
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002 of Principal Executive
31.2 Officer Certification pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 of Principal Financial Officer
32.1 Certification pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 of Principal Executive
32.2 Officer Certification pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 of Principal Financial Officer
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Colorado
Springs, State of Colorado, United States of America, on April 27, 2006.
SIMTEK CORPORATION
By: /s/Harold Blomqusit
-------------------------------------
Harold Blomquist
Chief Executive Officer and President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed on April 27, 2006 by the following persons on behalf of the
Registrant and in the capacities indicated.
SIGNATURE TITLE
/s/ Harold Blomquist
---------------------------------
Harold Blomquist Chief Executive Officer and President
/s/Brian Alleman
---------------------------------
Brian Alleman Chief Financial Officer
/s/Harold Blomquist
---------------------------------
Harold Blomquist Chairman of the Board
/s/Robert Keeley
---------------------------------
Robert H. Keeley Director
/s/Alfred Stein
---------------------------------
Alfred Stein Director
18
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
21.1 Subsidiaries of the registrant
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 of Principal Executive Officer
31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 of Principal Financial Officer
32.1 Certification pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 of Principal Executive Officer
32.2 Certification pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 of Principal Financial Officer
19