Edgar Filing: SIMTEK CORP

As filed with the Securities and Exchange Commission on May 9, 2001
Registration 333-_________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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.)

4250 Buckingham Dr. #100
Colorado Springs, Colorado 80907
(719) 531-9444
(Address, including zip code, and telephone number,
including area code, of Principal Executive Offices)

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Douglas M. Mitchell
Chief Executive Officer, President and Chief Financial Officer (acting)
Simtek Corporation
4250 Buckingham Dr. #100
Colorado Springs, CO 80907
(719) 531-9444
(Name, address, including zip code and telephone
number, including area code, of agent for service)

Copies to:
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: From time
to time after the effective date of this Registration Statement.

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If this From is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462 (d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
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]

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CALCULATION OF REGISTRATION FEE
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Proposed Proposed
maximum maximum
Title of each class of securities to be Amount to be offering price per aggregate Amount of
registered registered share offering price Registration Fee
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Common Stock, (par value $.01 per 1,810,123 $0.62(1) $1,122,276 $296
share)

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(1) Based on the closing price of Common Stock on May 3, 2001 in the over the
counter market.

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.

The information in this preliminary prospectus is not complete and may be
changed. We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This preliminary
prospectus is not an offer to sell these securities nor does it seek an offer to
buy these securities in any jurisdiction where the offer or sale is not
permitted.

SUBJECT TO COMPLETION, DATED MAY 9, 2001

PROSPECTUS
1,810,123 Shares

SIMTEK CORPORATION

Common Stock

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This prospectus is being used to register 1,810,123 shares of Simtek
Corporation's Common Stock being offered by twenty-nine of our shareholders.

Our common stock is traded on the OTC Bulletin Board under the symbol
"SRAM." On May 3, 2001, the closing sale price of our common stock was $0.62 per
share.

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SEE "RISK FACTORS" BEGINNING ON PAGE 4 TO READ ABOUT CERTAIN FACTORS YOU SHOULD
CONSIDER BEFORE BUYING OUR STOCK.

--------------

Neither the Securities and Exchange Commission Nor Any Other Regulatory
Body Has Approved or Disapproved of These Securities or Passed upon the Adequacy
or Accuracy of this Prospectus. Any Representation to the Contrary Is a Criminal
Offense.

The date of this Prospectus is _______________, 2001.

AVAILABLE INFORMATION

We are subject to the information requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). Accordingly, we file reports,
proxy statements and other information with the Securities and Exchange
Commission. You may inspect our reports, proxy statements and other information
without charge at the public reference 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. You may also obtain
copies there at the prescribed rates. You may obtain information on the
operation of the Commission's public reference facilities by calling the
Commission in the United States at 1-800-SEC-0330. The Commission also maintains
a web site at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission.

We have filed with the Commission, a registration statement on Form SB-2
under the Securities Act of 1933, as amended (the"Securities Act"), with respect
to the common stock we are offering (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 about
us and the common stock offered, you should refer 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.

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TABLE OF CONTENTS

Prospectus Summary.......................................................... 3
Risk Factors................................................................ 4
Use of Proceeds............................................................. 8
Capitalization.............................................................. 8
Market for our Common Stock and Related Secondary Holder Matters............ 9
Selected Financial Data..................................................... 10
Management's Discussion and Analysis of Financial Condition and
Results of Operations...................................................... 11
Business.................................................................... 16
Management.................................................................. 24
Security Ownership.......................................................... 27
Selling Shareholders........................................................ 29
Certain relationships and Related Transactions.............................. 29
Description of Securities................................................... 29
Plan of Distribution........................................................ 30
Legal Matters............................................................... 30
Experts ................................................................... 30
Index of Financial Statements............................................... F-1

PROSPECTUS SUMMARY

INFORMATION ABOUT US AND OUR BUSINESS

We design, develop, produce and market high performance nonvolatile
semiconductor memories and metal programmed gate array products. Nonvolatility
prevents loss of programs and data when electrical power is removed. Our
nonvolatile memory products feature fast data access and programming speeds and
electrical reprogramming capabilities. All of our products are targeted for use
in commercial electronic equipment markets. These markets are industrial control
systems, office automation, medical instrumentation, telecommunication systems,
cable television, and numerous military systems, including communications,
radar, sonar and smart weapons.

Our principal executive office is located at 4250 Buckingham Dr. #100;
Colorado Springs, Colorado 80907. Our telephone number is 719-531-9444.

THE SHARES

We are registering 1,810,123 shares of our common stock being offered for
sale by twenty-nine of our shareholders.

We will not receive any of the proceeds of the shares being sold by our
shareholders.

RISK FACTORS

YOU SHOULD CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS BEFORE PURCHASING
SHARES OF COMMON STOCK.

WE HAVE LIMITED CAPITAL FOR OPERATIONS AND MAY NEED TO RAISE MORE MONEY TO
CONTINUE OPERATING OUR BUSINESS

To date, we have required significant capital for product development,
manufacturing and marketing. From the time we started business through December
31, 2000, we have raised approximately $32.1 million of gross proceeds from the
sale of our convertible debt and equity securities. During the same period, we
earned approximately $10.1 million of gross revenue from the sale of product and
technology licenses, approximately $45.0 million from net product sales and
$600,000 in royalty income.

We believe that if we are able to increase our product sales substantially
and with positive gross margins, our cash requirements for producing and
marketing our existing four product families will be satisfied. We are not sure,
however, whether this increase in product sales or positive gross margins will
occur. We may need more capital in the next year to develop new products. We are
not sure that we will be able to raise more capital. If we cannot, then we may
not be able to develop and market new products.

WE HAVE MADE OPERATING LOSSES IN THE PAST AND MAY MAKE OPERATING LOSSES IN THE
FUTURE

We began business in 1987. Through December 31, 2000, we had accumulated
losses of approximately $32.0 million. We realized net income for the first time
for the year ended December 31, 1997 and continued to realize net income through
June 30, 2000. However, through December 31, 2000, we realized a net loss
primarily as a result of accounting charges from the purchase of incomplete
research and development in September 2000. Our ability to return to realizing
income will depend on many factors, some of which we cannot control. These
factors include market acceptance of our products and the prices that we are
able to charge, our ability to reduce our costs on products sold to the
commercial and military markets and our subcontractors' ability to manufacture
our products to our specifications cost effectively.

BECAUSE OUR COMMON STOCK IS LISTED ONLY ON THE OTC ELECTRONIC BULLETIN BOARD IT
MAY BE MORE DIFFICULT TO SELL OUR COMMON STOCK

Our common stock is listed on the OTC Electronic Bulletin Board under the
symbol SRAM. Our common stock was listed on the NASDAQ Small-Cap Market until
July 18, 1995 but because we no longer met NASDAQ's listing requirements, we
transferred to the OTC Electronic Bulletin Board. We may not be able to meet the
requirements for relisting our common stock on NASDAQ in the near future.

Securities that are not listed on the NASDAQ Small-Cap Market are subject
to a Securities and Exchange Commission rule that imposes special requirements
on broker-dealers who sell those securities to persons other than their
established customers and accredited investors. The broker-dealer must determine
that the security is suitable for the purchaser and must obtain the purchaser's
written consent prior to the sale. These requirements may make it difficult for
broker-dealers to sell our securities. This may also make it more difficult for
our security holders to sell their securities and may affect our ability to
raise more capital.

OUR BOARD OF DIRECTORS HAS THE AUTHORITY TO ISSUE PREFERRED STOCK

Our Board of Directors has the authority to issue up to 2,000,000 shares of
preferred stock in one or more series and to establish the voting powers,
preferences and other rights and qualifications thereof, without any further
vote or action by the shareholders. The issuance of preferred stock by our Board
of Directors could affect the rights of the holders of our common stock and
could potentially be used to discourage attempts by others to obtain the control
of us through merger, tender offer, proxy contest or otherwise by making such
attempts more difficult to achieve or more costly. Our Board of Directors has no

specific intention in issuing shares of preferred stock, but given our present
capital requirements, it is possible that we may need to raise capital through
the sale of preferred stock in the future.

THE RISKS INVOLVED IN MANUFACTURING SEMICONDUCTORS MAY AFFECT OUR NET INCOME

The manufacturing of semiconductors is very complex and our success in
manufacturing semiconductors depends on many factors that we are unable to
control. For example, successful manufacturing is affected by the level of
contaminates in the manufacturing environment, impurities in the materials used
and the performance of our equipment. These factors could reduce the number of
semiconductors that we are able to make in a production run, which would
increase our manufacturing costs. In order for us to be profitable, we must keep
our manufacturing costs down. We have been able to keep our overall costs down
through a number of methods including reducing the size of our chips, increasing
the number of chips per wafer, reducing our packaging costs and eliminating
defects in the manufacturing process. These measures may not work all the time,
however, and we are not sure that our existing cost saving methods will be
enough to enable us to continue generating profits.

It takes approximately three months for us to manufacture our
semiconductors. Any delays in receiving silicon wafers will delay our ability to
deliver our products to customers. This would delay sales revenue and could
cause our customers to cancel existing orders or not place future orders. In
addition, if we are not able to make all of our planned semiconductors in a
production run this could delay delivery of our products. If our semiconductors
have technical problems, we could be required to write off inventory or grant
warranty replacements. These delays or technical problems could occur at any
time and would affect our net income.

WE DEPEND GREATLY ON SUBCONTRACTORS AND THEIR POOR PERFORMANCE COULD HURT OUR
OPERATIONS

We have hired independent subcontractors to make our silicon wafers and to
assemble and test our products. Our operating results depend on our
subcontractors' ability to supply us with silicon wafers that meet our
specifications and to assemble and test enough of our products to meet our
customer's needs, all at reasonable costs.

In September 1995, we entered into an agreement with ZMD that allowed us to
purchase finished 0.8 micron units from ZMD's foundry. We purchased these units
from ZMD's foundry through the first half of 1998 and then transferred all of
our manufacturing over to products built from the wafers purchased from
Chartered Semiconductor Manufacturing Plc. of Singapore ("Chartered").

Currently, we depend on Chartered to manufacture all of our silicon wafers
that support our nvSRAM products. Sales of metal programmed gate array products
are supported with 0.5 micron wafers purchased from United Memories Corp. of
Taiwan ("UMC"). If Chartered or UMC are unable to meet our silicon wafer needs
on time and at a price that we find acceptable, we would have to find other
wafer manufacturers. If we cannot find other suppliers, manufacturers or
assemblers on acceptable terms, we may not be profitable. In addition, our
subcontractors must be audited and recertified by us on a regular basis for us
to continue to produce military- qualified products. There is no assurance that
we will be able to complete this recertification successfully.

Our current manufacturing agreement with Chartered has expired. Under our
old agreement, we had the right to purchase up to 600 six-inch silicon wafers
per month from Chartered's facility in Singapore. If we are unable to renew our
agreement with Chartered or the limit on wafers that we can purchase is not
increased, we may be limited in the number of semiconductors that we can sell.
Approximately all sales for the three months ended September 30, 2000 were from
products built on wafers purchased from Chartered and UMC. All of our product
sales for the year ended December 31, 2000 were based on wafers purchased from
Chartered and UMC.

WE DEPEND ON OTHERS FOR SALES AND DISTRIBUTION AND MOST OF OUR SALES ARE TO A
LIMITED NUMBER OF CUSTOMERS AND DISTRIBUTORS

We use independent sales representatives and distributors to sell the
majority of our products. The agreements with these sales representatives and
distributors can be terminated without cause by either party with only 30 to 90
days written notice. If one or more of our sales representatives or distributors
terminates our relationship, we may not be able to find replacement sales

representatives and distributors on acceptable terms. This would affect our
profitability. In addition, during 2000, approximately 47% of our product sales
were to two distributors and one direct customer. We are not sure that we will
be able to maintain our relationship with these distributors.

WE MAY NOT REALIZE ANY NEW LICENSE REVENUES

We have received substantially all of the revenue to which we are entitled
under our existing license agreements and we have not sold any new licenses. We
are not sure whether we will be able to sell any more product or technology
licenses in the future.

DELAYS IN OR FAILURE OF PRODUCT QUALIFICATION MAY HARM OUR BUSINESS

Prior to selling a product, we must establish that it meets certain
performance and reliability standards. As part of this testing process, known as
product qualification, representative samples of products are subjected to a
variety of tests to ensure that performance in accordance with commercial,
industrial and military specifications. Delays or failure by us to accomplish
product qualification for our future products will have an adverse effect on us.
Even with successful initial product qualifications, we cannot be certain that
we will be able to maintain product qualification or achieve sufficient sales to
meet our operating requirements.

OUR SUCCESS DEPENDS ON OUR ABILITY TO INTRODUCE NEW PRODUCTS

Our success depends in part upon our ability to expand our existing product
families and to develop and market new products. The development of new
semiconductor designs and technologies typically requires substantial costs for
research and development. Even if we are able to develop new products, the
success of each new product depends on several factors including whether we
selected the proper product and our ability to introduce it at the right time,
whether the product is able to achieve acceptable production yields and whether
the market accepts the new product. We are not certain whether we will be
successful in developing new products or whether any products that we do develop
will satisfy the above factors.

OUR RECENT PURCHASE OF INCOMPLETE RESEARCH AND DEVELOPMENT

In an effort to expand our products, we recently acquired incomplete
research and development products from WebGear, Inc., a California corporation
("WebGear"). The incomplete research and development we acquired should enable
us to enter the Bluetooth technology market. However, we cannot assure you that
we will be able to enter this market. In addition to this incomplete research
and development, we will be required to use significant working capital in order
to bring these products to market.

THE SEMICONDUCTOR INDUSTRY CHANGES VERY RAPIDLY AND OUR BUSINESS WOULD BE HARMED
IF WE CANNOT KEEP UP WITH THESE CHANGES

The semiconductor industry is characterized by rapid changes in technology
and product obsolescence, volatile market patterns, price erosion, product
oversupply, occasional shortages of materials, variations in manufacturing
efficiencies and significant costs associated with capital equipment and product
development. We cannot be certain that the technology we currently use will not
be made obsolete by other competing memory technologies. Any one or more of
these factors could have a material effect on our financial results.

THERE IS INTENSE COMPETITION IN THE SEMICONDUCTOR INDUSTRY

There is intense competition in the semiconductor industry. We experience
competition from a number of domestic and foreign companies, most of which have
significantly greater financial, technical, manufacturing and marketing
resources than we have. Our competitors include major corporations with
worldwide wafer fabrication and circuit production facilities and diverse,
established product lines. We also compete with emerging companies attempting to
obtain a share of the market for our product families. If any of our new
products achieve market acceptance, other companies may sell competitive
products at prices below ours. This would have an adverse effect on our
operating results. We have sold product and technology licenses to Plessey,

Nippon Steel and ZMD. At this time Plessey and Nippon Steel have not began
producing our products. ZMD has entered the market, however, and may become one
of our significant competitors.

THE LOSS OF KEY EMPLOYEES COULD MATERIALLY AFFECT OUR FINANCIAL RESULTS

Our success depends in large part on our ability to attract and retain
qualified technical and management personnel. The competition for these
personnel is intense. If we lose any of our key personnel, this could have a
material adverse affect on our ability to conduct our business and on our
financial results.

WE DEPEND ON PATENTS TO PROTECT OUR INTELLECTUAL PROPERTY

We have been issued seven U.S. patents relating to certain aspects of our
current products and we have two applications pending. We have also applied for
international patents on our technology. We plan to continue to protect our
intellectual property. We are not sure that any of the patents for which we have
applied will issue or if issued, will provide us with meaningful protection from
competition. We may also not have the money required to maintain or enforce our
patent rights. Notwithstanding our patents, other companies may obtain patents
similar to or relating to our patents. We have not determined whether our
products are free from patent infringement.

OUR PRODUCTS AND TECHNOLOGY MAY INFRINGE ON OTHER PATENTS

In the past, we have been notified by two companies that some of our
products and technologies may be related to patents owned by them and a third
party has notified us that our products or technologies may infringe on two
patents owned by that party. At the time we received the notices, we retained
legal counsel to evaluate three patents identified in the notices but we have
not yet determined whether our products infringe on the third party patents. We
have not received any recent correspondence about these claims but we are not
sure whether any further action will be taken or that new claims will not be
asserted. If infringement claims are asserted against us and are upheld, we will
try to modify our products so they are non-infringing. If we are unable to do
so, we will have to obtain a license to sell those products or stop selling the
products for which the claims are asserted. We may not be able to obtain the
required licenses. Any successful infringement claim against us or if we fail to
obtain any required license or are required to stop selling any of our products
would have a material adverse effect on our financial results.

In 1998, we received notice of a claim for an unspecified amount from a
foundation that owns approximately 180 patents and 70 pending applications. The
foundation claims that certain machines and processes used in the building of
our semiconductor devices infringe on the foundation's patents. In April 1999,
we reached an agreement with the foundation for us to purchase a nonexclusive
license of the foundation's patents.

WE DO NOT INTEND TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE

We have never paid cash dividends on our common stock. We do not expect to
pay dividends in the foreseeable future. We will use any earnings to finance
growth. You should not expect to receive dividends on your shares of common
stock.

FOREIGN CURRENCY EXCHANGE RATE FLUCTUATIONS MAY CAUSE FINANCIAL LOSSES

Changes in foreign currency exchange rates can reduce our revenues and
increase our costs. Under our purchase agreement with Chartered, we buy silicon
wafers in US dollars but the agreement permits a price adjustment if the six
month rolling average exchange rate changes by more than 5% from the starting
point. In addition, in 2000 over 57% of our sales were outside of the United
States. Therefore, any large exchange rate fluctuation could increase our costs
and thus decrease our revenues. We do not try to reduce our exposure to these
exchange rate risks by using hedging transactions.

USE OF PROCEEDS

We will receive no proceeds from the sale of shares by our shareholders.

CAPITALIZATION

The following table shows our capitalization at April 23, 2001.

April 23, 2001
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Treasury stock, 10,000 shares $ (12,504)
Preferred stock, $1.00 par value, 2,000,000 shares
authorized, none issued and outstanding 0
Common stock, $0.01 par value, 80,000,000 shares
authorized, 53,684,245 issued andoutstanding 536,842
Additional paid in capital 36,885,195
Accumulated deficit as of December 31, 2000 (31,825,284)
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Shareholders' equity $ 5,584,249
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MARKET FOR OUR COMMON STOCK AND RELATED SECURITY HOLDER MATTERS

Our common stock is listed on the OTC Electronic Bulletin Board under the
symbol SRAM. Securities not included in the NASDAQ Small-CAP Market are covered
by the 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 our securities, which will have an
adverse effect on the ability of our security holders to sell their securities
and the possibility of our ability to raise additional capital.

Shown below is the closing high bid and the closing low offer as reported
by the OTC Electronic Bulletin Board on the last day of the quarter.

Common Stock
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High Bid Low Offer
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1998
First Quarter........................................... .39 .41
Second Quarter.......................................... .32 .36
Third Quarter........................................... .22 .23
Fourth Quarter.......................................... .15 .16

1999
First Quarter........................................... .19 .18
Second Quarter.......................................... .22 .21
Third Quarter........................................... .15 .135
Fourth Quarter.......................................... .275 .261

2000
First Quarter........................................... 2.875 2.25
Second Quarter.......................................... 1.5313 1.375
Third Quarter........................................... .969 .85
Fourth Quarter.......................................... .365 .30

As of December 31, 2000, there were 379 shareholders of record, not
including shareholders who beneficially own common stock held in nominee or
"street name."

We have not paid any dividends on our common stock since inception and we
do not intend to pay any in the foreseeable future.

SELECTED FINANCIAL DATA

The statements of operations for the years ended December 31, 2000 and 1999
and the balance sheet data as of December 31, 2000 have been derived from the
financial statements that have been audited by Hein + Associates, LLP,
independent auditors. The balance sheet as of December 31, 2000 has been audited
by Hein + Associates, LLP, independent auditors. This financial data should be
read in conjunction with our financial statements and the notes thereto included
elsewhere in this prospectus and to "Management's Discussion and Analysis of
Results of Operations and Financial Condition."

For the Years Ended December 31,
--------------------------------
Statement of Operations Data: 2000 1999
---- ----

Net Sales........................................................ $ 12,150,750 $ 7,754,952
Cost of Sales.................................................... 7,728,095 4,826,266
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Gross Margin..................................................... 4,422,655 2,928,686
Operating Expenses:
Design, research and development............................ 5,637,799 1,640,025
Administrative.............................................. 1,129,672 470,703
Marketing................................................... 1,170,305 918,642
-------------------------------
Total Operating Expenses................................ 7,937,776 3,029,370
Other income (expense), net...................................... 136,295 (48,786)
------------------------------
Net income (loss) before taxes................................... (3,378,826) (149,470)
Provision for income taxes.................................. - -
------------------------------
Net income (loss)................................................ $ (3,378,826) $ (149,470)
==============================
Net income (loss) per common share:
Diluted..................................................... $ (.08) $ *
Basic....................................................... $ * $ *
Weighted average common shares outstanding:......................
Basic and diluted........................................... 43,165,436 33,173,966

* Less than $.01 per share.

Year Ended
December 31, 2000
-----------------
Balance Sheet Data:
Working capital............................................. $4,881,394
Total assets................................................ 7,517,026
Shareholders' equity........................................ $5,589,967

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW OF CERTAIN ACQUISITIONS AND OTHER TRANSACTIONS

During 2000 and the first quarter of 2001, we made several acquisitions of
high technology companies some of which we have accounted for as a pooling of
interests.

On May 9, 2000, we acquired Integrated. We issued 3,000,000 shares of our
Common Stock in exchange for all outstanding shares of all classes of Integrated
stock. Integrated designs and sells metal programmed gate array integrated
circuits. We purchased approximately $30,000 of product from Integrated in the
year preceding the acquisition. The acquisition was accounted for as a pooling
of interest, and the results of Integrated have been consolidated with ours, as
if we have been merged throughout the periods presented.

On June 16, 2000, we acquired 1,875,000 shares of the common stock of
WebGear, in return for 1,250,000 shares of our Common Stock. The shares of
WebGear stock that we acquired represented approximately 9% of WebGear's issued
and outstanding shares of common stock as of June 16, 2000. On June 16, 2000,
the closing price for our Common Stock was $1.3125 per share. WebGear is engaged
in the design, development, sales and support of high technology networking and
communications products for the personal computer market.

On July 31, 2000, we acquired Macrotech. We issued 1,250,000 shares of our
Common Stock in exchange for all outstanding shares of all classes of Macrotech
stock. Macrotech designs and sells metal programmable standard cells, which are
an extension of the metal programmed gate array integrated circuits that ILSI
manufactures. The acquisition was accounted for as a pooling of interest, and
the results of Macrotech have been consolidated with ours, as if we have been
merged throughout the periods presented.

On September 14, 2000, we entered into a one-year contract with two
investment bankers, E.B.M. Associates, Inc. and World Trade Partners, each
company has received 500,000 shares of our Common Stock. Both companies will
assist us in broadening our financial market presence and establishing new
relationships within the industry, investment community and financial media. On
September 14, 2000, the closing share price for our Common Stock was $ 1.0312
per share and accordingly $1,031,000 has been assigned to prepaid investor
relations. The cost associated with this transaction is being amortized over the
life of the contract, approximately $301,000 was expensed in 2000. The balance
will be expensed over the term of the contract, ending in the third quarter of
2001.

On September 29, 2000, we purchased incomplete research and development,
patents and certain trademarks from WebGear, Inc. We originally issued 3,400,000
shares of our Common Stock which was amended in December 2000 to 2,900,000 and
returned to WebGear the 1,875,000 shares of WebGear common stock that we
acquired from WebGear on June 16, 2000. On September 29, 2000, the closing price
of our Common Stock was $0.8438 per share. We have valued the purchased patents
and trademarks at $125,000, which was capitalized and recorded as intangible
assets. We have valued the incomplete research and development acquired from
WebGear at $3,962,646 based upon an evaluation by an independent firm, this cost
was expensed immediately.

On December 6, 2000, we signed a letter of intent to acquire Q-DOT. The
merger was completed on March 13, 2001. We acquired Q-DOT in exchange for
approximately 5,172,000 shares of our Common Stock, valued at $4,000,000 based
on a twenty day average share closing price of approximately $0.77. Q-DOT
specializes in advanced technology research and development for data
acquisition, signal processing, imaging and data communications. The company's
projects have been supported by conventional government and commercial contracts
in addition to Small Business Innovation Research (SBIR) contracts. Q-DOT will
be operated as a wholly owned subsidiary of Simtek for its government contract
research and development operations. The acquisition will be accounted for as a
pooling of interest, and the results of Q-DOT will be consolidated with ours in
future financials as if we have been merged throughout the periods.

RESULTS OF OPERATIONS

GENERAL. We have designed and developed nonvolatile semiconductor products
since we commenced business operations in May 1987. We have concentrated on the
design and development of the 4, 16, 64 and 256 kilobit nvSRAM product families
and technologies, marketing, distribution channels, and sources of supply,
including production at subcontractors. With the acquisition of Integrated and
Macrotech, we have added the capability to design, develop and produce gate
array integrated circuits.

In an effort to expand our products, we acquired, from WebGear, incomplete
research and development of certain technology that we intend to apply within
the emerging Bluetooth market segment. "Bluetooth" is an industry standard,
short range wireless communications technology designed to allow a variety of
electronic devices, such as wireless telephone, Personal Digital Assistants,
notebook computers, desktop computers, peripheral input-output devices,
television set-top boxes and Internet appliances to exchange data without the
use of physical cabling.

We anticipate that our acquisition of Q-DOT will enable us to enter the
high speed data communications market, addressing both wired and wireless
applications, based on advanced Silicon Germanium process technology. Silicon
Germanium (SiGe) is rapidly becoming the technology of choice for many analog,
mixed signal and high speed digital circuits.

In September 1991, we began the sale of certain commercially qualified 64
kilobit nvSRAM products based on a 1.2 micron technology. After initial
qualification of our first product in 1991, we began expanding the 64 kilobit
nvSRAM product family. By the end of 1993, we had qualified the complete product
family for commercial, industrial and military markets and had commenced sales
of these products. During 1995, we developed our 64 kilobit nvSRAM product on a
0.8 micron technology, qualification of this product occurred in 1996. In late
1996 and into 1997, we, along with assistance from ZMD, completed the design,
installation and qualification of our 256 kilobit product based on 0.8 micron
technology into ZMD's wafer fab. In 1997, we installed the 256 kilobit nvSRAM
product based on 0.8 micron technology in Chartered's wafer fab. Qualification
of this product for use in the commercial and industrial market occurred in 1997
and qualification for use in the military market occurred in the second quarter
of 1998. In the fourth quarter 1997, we qualified the 64 kilobit nvSRAM product
built on 0.8 micron technology for sale in the commercial and industrial market.
Our metal programmed gate array products are supported with 0.5 micron wafers
purchased from UMC and 0.35 micron wafers purchased from Chartered. Sales of
products built on wafers purchased from Chartered and UMC each accounted for all
of our revenue for 2000.

REVIEW OF 2000 OPERATIONS. Total product sales for 2000 were $12,150,750.
Our product sales could have been greater if not for a shortage in the second
half of 2000 of the raw materials required to produce our nvSRAM products. We
did see an increase in volume production orders in 2000, which caused an
increase in unit shipments and a slightly overall lower average selling price as
compared to 1999. Sales of our 4 kilobit and 16 kilobit products decreased in
2000 by approximately 9% over 1999. This decrease was due to customers using
higher density parts in their applications. Sales of our 64 kilobit and 256
kilobit commercial products saw an increase in 2000 by approximately 63% and
145%, respectively. These increases were due to larger production volume orders
being placed as compared to 1999. Sales of our 64 kilobit high-end industrial
and military market saw a slight increase of 3% in 2000, while our 256 kilobit
high-end industrial and military market saw a decrease in 2000 of approximately
65% as compared to 1999. This decrease was due to a decrease in defense
contracts in 2000. We believe that future defense spending will increase to
historic levels, but it remains unclear when this will occur. Sales of our logic
products saw an increase of approximately 79% in 2000 as compared to 1999. This
increase was due primarily to increased product demand generated by our
increased sales activities.

With the return of production volume orders being placed for our 16
kilobit, 64 kilobit and 256 kilobit commercial products and an increase in
competition, we saw a decrease in our overall average selling prices as compared
to 1999. However, with this decrease, we saw an increase in unit shipments for
2000 as compared to 1999 of approximately 6%, 56%, 178% and 76% for our 16
kilobit, 64 kilobit, 256 kilobit, and logic commercial products, respectively.
Our 256 kilobit high-end industrial and military products saw a decrease of
approximately 55% in unit shipments.

Due to the decrease in high-end industrial and military sales, we had an
approximate 1% decrease in our gross margins for 2000 as compared to 1999.

YEARS ENDED DECEMBER 31, 2000 AND 1999. Our net product sales for 2000
totaled $12,150,750 compared to $7,754,952 in 1999. The increase in net product
sales for the year ended December 31, 2000 was due primarily to increased volume
production orders in the Far East and North America. During 2000, sales of our
1.2 micron 64 kilobit and 0.8 micron 256 kilobit nvSRAM military products
accounted for approximately 14% of our sales, while the 64 kilobit and 256
kilobit nvSRAM product based on 0.8 micron technology accounted for
approximately 41% and 30% of sales, respectively. Sales of our MPGA and FPGA
logic products account for approximately 11% of our sales. Sales of our 4
kilobit and 16 kilobit nvSRAM products accounted for the balance of the sales in
2000. Two distributors and one direct customer of our nvSRAM products accounted
for approximately 47% of our net product sales for the year ended December 31,
2000. Products sold to distributors are resold to a larger number of system
manufacturers.

The increase in net loss in 2000 is primarily the result of expensing
approximately $3,963,000 of purchased incomplete research and development from
WebGear. We realized a positive gross margin of $4,422,655 in 2000 compared to
$2,928,686 in 1999 for percentages of 37% and 38%, respectively.

Operating expenses were approximately $4,900,000 more for the year ended
December 31, 2000 than for the year ended December 31, 1999. The largest part of
this increase, was related to research and development which had an approximate
$4,000,000 increase. Of the approximate $4,000,000 increase, approximately
$3,963,000 was due to the issuance of stock to WebGear for the purchase of their
Bluetooth technology, an approximate $100,000 increase related to headcount
changes and contract services, an approximate $18,000 increase in depreciation
and an approximate decrease of $81,000 related to product development, legal
fees and repairs and maintenance. The next largest increase of approximately
$650,000 was in general and administration. Of the approximate $650,000
increase, approximately $301,000 was related to the amortization of the issuance
of 1,000,000 shares of stock to two investment banker firms for services to us.
Approximately $237,000 was related to increased legal and audit fees incurred
with the acquisitions of Integrated, Macrotech and Q-DOT, and the purchase of
Bluetooth technology from WebGear. The remaining $112,000 was related in
increased headcount, payroll costs and benefits. Sales and marketing saw an
approximate $250,000 increase, primarily due to approximately $186,000 paid in
sales commission as a direct result of our increased revenue and an
approximately $64,000 increase due to increased headcount.

Other income for the year ended December 31, 2000 increased from an
approximate $49,000 expense at December 31, 1999 to an approximate income of
$136,000 at December 31, 2000. This increase was primarily due to an increase of
approximately $69,000 in interest income, a decrease of approximately $100,000
in interest expense and an increase of approximately $16,000 in other income.

We had a net loss of $3,378,826 for the year ended December 31, 2000
compared to a net loss of $149,470 for the year ended December 31, 1999.

FUTURE RESULTS OF OPERATIONS

Our ability to maintain profitability will depend primarily on our ability
to continue reducing our manufacturing costs and increasing net product sales by
improving the availability of existing products, by the introduction of new
products and by expanding our customer base.

As of December 31, 2000, we had a backlog of unshipped customer orders of
approximately $7,948,000 expected to be filled by June 30, 2001. Orders are
cancelable without penalty at the option of the purchaser prior to 30 days
before scheduled shipment and therefore are not necessarily a measure of future
product revenue.

In 2000, we purchased all of our 0.8 micron technology wafers for our
nvSRAM products from a single supplier, Chartered. Approximately 89% of our
sales for 2000 were from finished units produced from these wafers. We had an
agreement with Chartered to provide wafers through September 1998. Although
Chartered continues to provide us wafers under the terms defined in this
contract we do not have a current agreement signed. We are, however, negotiating
with Chartered to renew the contract. In 2000, we purchased all of our 0.5
micron wafers and our 0.35 micron wafers for our MPGA and MPSC logic products
from UMC and Chartered, respectively. Approximately 11% of our sales for 2000
were from finished units produced from these wafers. Currently, we do not have a
current agreement signed for either of these companies to furnish us wafers,
however, we have seen no disruption in their supply to us. Any disruptions in
our relationship with Chartered could have an adverse impact on our operating
results.

ZMD, through their license agreement with us, has the worldwide right to
sell nvSRAM's developed jointly by us and ZMD. With volume production being
established at ZMD using the 0.8 micron product, ZMD has begun selling such
nvSRAMs. In the past year, we did not see increased competition with ZMD as
compared to the previous year. However, due to ZMD creating a second source for
nvSRAM products, we believe that their presence may have a positive impact
because many large manufacturers require two sources to purchase product from.

We intend to continue shipping nvSRAMs based on 0.8 micron technology to
existing and new customers through our normal sales and marketing efforts, while
extending our product offerings of logic products acquired through the
Integrated and Macrotech acquisitions. We will also begin development of high
performance data communications products based on Silicon Germanium process
expertise gained through our acquisition of Q-DOT.

LIQUIDITY AND CAPITAL RESOURCES

From inception through December 31, 2000, we have approximately $32,100,000
of gross proceeds from the sale of convertible debt and equity securities. From
inception through December 31, 2000, we generated $10,085,000 of gross revenue
from the sale of product and technology licenses, approximately $45,215,000 from
net product sales and $600,000 in royalty income.

Under the Cooperation Agreement entered into with ZMD in September 1995,
ZMD had the right to convert all financing into shares of our Common Stock at a
price of $0.175 per share for all monies paid in 1995 and at the average share
price of the quarter the monies were paid for all monies paid in 1996. In 1996,
we received $378,551 under this agreement of which $248,398 was converted into
1,353,374 shares of our Common Stock at a price of $.1548 and 165,000 shares of
our Common Stock at a price of $.2358. The payable to ZMD of $130,153 that
showed on the balance sheet at December 31, 1999 was converted into 551,964
shares of our Common Stock. During 2000, ZMD began selling their shares of our
Common Stock.

On June 12, 1998, we closed a $1,500,000 financing transaction with two
funds advised by Renaissance. The funding from Renaissance consists of
$1,500,000 of convertible debentures with a seven year term at a 9 percent per
annum interest rate (the "Debentures"). In the first quarter of 2000,
Renaissance converted all $1,500,000 of the Debentures into an aggregate of
7,692,308 shares of our Common Stock.

On May 9, 2000, we acquired Integrated in exchange for 3,000,000 shares of
our Common Stock worth approximately $3,500,000 based on the closing price per
share of ($1.1875) on the closing date.

On June 16, 2000, we acquired 1,875,000 shares of the common stock of
WebGear, in return for 1,250,000 shares of our Common Stock worth approximately
$1,640,000 based on the closing price per share ($1.3125) on the closing date.
On September 29, 2000, we purchased incomplete research and development, patents
and certain trademarks from WebGear, Inc. We issued 3,400,000 shares of our
Common Stock and returned to WebGear the 1,875,000 shares of WebGear common
stock that we acquired from WebGear on June 16, 2000. In December 2000, the
agreement was amended and WebGear returned 500,000 shares of our Common Stock to
us making the total number of shares for this phase 2,900,000, worth
approximately $2,447,000, based on the closing price of our Common Stock. On
September 29, 2000, the closing price of our Common Stock was $0.8438 per share.

On July 31, 2000, we acquired Macrotech for 1,250,000 shares of our Common
Stock worth approximately $1,700,000 based on the closing price per share
($1.375) on the closing date.

On December 6, 2000, we signed a letter of intent to acquire Q-DOT. The
merger was completed on March 13, 2001 for consideration of approximately
5,172,000 shares of our Common Stock, valued at $4,000,000 based on a twenty day
average share closing price of approximately $0.77 prior to the closing date.

Our cash balance at December 31, 2000 was $2,847,110.

Our future liquidity will depend on our revenue growth and our ability to
sell our products at positive gross margins and control of our operating
expenses.

For the year ended December 31, 2000, cash flow provided by operations was
$773,786, which is primarily due to a net loss of $3,378,826, which is offset by
the WebGear asset purchase of $3,962,645, depreciation and amortization of
$307,837, investment bank stock issuance of $300,767, a change in reserve
accounts of $196,407, an increase of accounts receivable of $366,994, an
increase of inventory of $85,270, an increase in prepaid and other of $117,579
and a net increase in accounts payable and accrued expenses of $5,944 and a
decrease in customer deposits of $53,010. The increase in depreciation was due
primarily to the addition of Macrotech's computer and software and addition of
equipment required to test our products. The investment banker stock issuance
was related to the amortization of the stock issuance to E.B.M. and World trade
partners. The change in reserve accounts, accounts receivable, and inventory was
due to increased product sales. The increase in prepaid and other was due
primarily caused by our requirement to prepay for our wafer outs if we are above
our credit limit. The decrease in customer deposits was primarily due to
customers prepaid certain orders at the end of 1999 and the product did not ship
to them until 2000.

The use of cash flows in investing activities was due to purchases of
equipment related to the testing of our 64 kilobit and 256 kilobit products
built on 0.8 micron technology and the purchase of computer and software
required for research and development.

The cash flows provided by financing was primarily the result of the
exercise of stock options which was offset by the payment of a notes payable.

For the year ended December 31, 1999, cash flow provided by operations was
$238,931, which is primarily due to depreciation of $247,502, a change in
reserve accounts of $90,936, an increase of accounts receivable of $270,510, and
a net increase in accounts payable, accrued expenses and customer deposits of
$423,533. The increase in accounts receivable was due to a large revenue month

in December 1999, from which the cash will not be received until the first
quarter of 2000. The increase in accounts payable was due primarily to an
increase in product demand which requires us to maintain a larger wafer and
work-in-progress inventory, which is payable to our subcontractors on 30 day
terms and to the purchase of software that is being paid for on a five year
capital lease.

The use of cash flows in investing activities for the year ended December
31, 1999, was due to purchases of equipment related to the testing of our nvSRAM
products and manufacturing and test equipment for our metal programmed gate
array products and from the purchase of a restricted certificate of deposit. The
$179,310 of equipment purchased consisted primarily of test fixtures and burn-in
boards to support products manufactured at Chartered and a reticle set to
support manufacturing of our metal programmed gate array products at UMC. A
$300,000 certificate of deposit was established as collateral for a $300,000
letter of credit that is required by one of our suppliers in the event that we
default on payments.

The cash flows provided by financing activities was primarily the result of
proceeds from notes payable and capital contributions.

ACCOUNTING STATEMENTS

In 1998, Statement of Financial Accounting Standards 133, Accounting for
Derivative Instruments and Hedging Activities was issued. Statement 133
establishes accounting and reporting standards for derivative instruments and
for hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities in the statement of financial position and measure
those instruments as fair value. This statement is effective for the Company's
financial statements for the year ended December 31, 2001 and the adoption of
this standard is not expected to have a material effect on the Company's
financial statements.

INFLATION

The impact of inflation on our business has not been material.

BUSINESS

GENERAL

We have designed and developed nonvolatile semiconductor products since we
began business operations in May 1987. We have concentrated on the design and
development of the 4, 16, 64 and 256 kilobit nvSRAM product families and
technologies, distribution channels, and sources of supply, including production
at subcontractors. With our acquisition in 2000 of Integrated Logic Systems,
Inc. ("Integrated") and Macrotech Semiconductor ("Macrotech"), we have added the
capability to design, develop and produce gate array integrated circuits.

In September 2000, we purchased incomplete research and development,
patents and certain trademarks from WebGear, Inc. Simtek has established a core
business within the nonvolatile SRAM application segment, and is now expanding
into other technology areas including logic and data communication markets.
These additional product families are intended to allow more rapid total revenue
growth and to reduce the risk inherent in our historic dependence on one product
family.

As of December 31, 2000, our backlog for released purchase orders was
approximately $7,948,000, all of which is expected to ship by June 30, 2001.
Orders are cancelable without penalty at the option of the purchaser prior to 30
days before scheduled shipment and therefore are not necessarily a measure of
future product revenue. During the year ended December 31, 2000, we generated
net revenue of approximately $12,000,000 from the sale of products.

We are in production of our first four families of memory products, 256
kilobit, 64 kilobit, 16 kilobit and 4 kilobit nonvolatile static random access
memories ("nvSRAMs"). Our 256 kilobit nvSRAM was qualified in 1997 for sales
into commercial and industrial markets and in 1998 for shipment into the
military market. Our 64 kilobit nvSRAMs meet or exceed the requirements for
sales into commercial, industrial and military markets. Our 16 kilobit and 4
kilobit nvSRAMs have been qualified for sales into commercial and industrial
markets. Our nvSRAMs are physically smaller and require less maintenance than
SRAM devices that achieve nonvolatility through the use of internal batteries
and are more convenient to use than SRAM devices that achieve nonvolatility by
being combined with additional chips.

Our metal programmed gate array products ("MPGA") are used to replace
programmable logic devices when a customer has completed his system design and
requires cost-reduced integrated circuits for volume manufacturing. Each MPGA is
configured using the individual customer's design files and is built to his
specific requirements.

We reduce capital requirements by subcontracting all phases of the
manufacturing process. Chartered Semiconductor Manufacturing Plc. of Singapore
("Chartered") began providing silicon wafers for our nvSRAM products in
September 1993 and continues to provide wafers based on our 0.8 micron product
technology. United Memories Corp. of Taiwan ("UMC") and Chartered provide
silicon wafers for our MPGA products based on 0.5 micron and 0.35 micron product
technology, respectively. Amkor Technology and Amkor Test Services provide
assembly and final test services, respectively, for our nvSRAM products built
from the wafers purchased from Chartered. Advanced Semiconductor Engineering and
IPAC provide assembly services for our MPGA products. Testing of our MPGA
products is done either internally or by Multitech Design and Test.

During 2000, all of the wafers used to produce our nvSRAM's were purchased
from Chartered.. Sales of these products accounted for approximately 89% of our
revenue for 2000. Wafers were purchased from both Chartered and UMC in 2000 to
support our MPGA products. Sales of these products accounted for approximately
11% of our revenue for 2000.

We currently have three sales and marketing offices, located in Colorado
Springs, Colorado, Bristol, England and Atlanta, Georgia. We have engaged 17
independent representative organizations with 40 sales offices and 31
distributor organizations with 105 sales offices. These organizations have
multiple sales offices and sales personnel covering specific territories.
Through these organizations and their sales offices we are capable of serving a
worldwide market.

ACQUISITIONS AND OTHER TRANSACTIONS

On June 16, 2000, we acquired 1,875,000 shares of the common stock of
WebGear, in return for 1,250,000 shares of our Common Stock. On September 29,
2000, we purchased incomplete research and development, patents and certain
trademarks from WebGear, Inc. We originally issued 3,400,000 shares of our
Common Stock which was amended in December 2000 to 2,900,000 and returned to
WebGear the 1,875,000 shares of WebGear common stock that we acquired from
WebGear on June 16, 2000.

On December 6, 2000, we signed a letter of intent to acquire Q-DOT Group,
Inc ("Q-DOT"). The merger was completed on March 13, 2001. We acquired Q-DOT in
exchange for approximately 5,172,000 shares of our Common Stock, valued at
$4,000,000 based on a twenty day average share closing price of approximately
$0.77. Q-DOT specializes in advanced technology research and development for
data acquisition, signal processing, imaging and data communications. The
company's projects have been supported by conventional government and commercial
contracts in addition to Small Business Innovation Research (SBIR) contracts.
Q-DOT will be operated as a wholly owned subsidiary of Simtek for its government
contract research and development operations. The acquisition will be accounted
for as a pooling of interest, and the results of Q-DOT will be consolidated with
ours in future financials as if we have been merged throughout the periods.

MEMORY INDUSTRY AND PRODUCT BACKGROUND

The semiconductor memory market is large and highly differentiated. This
market covers a wide range of product densities, speeds, features and prices.
The ideal memory would have (1) high bit density per chip to minimize the number
of chips required in a system; (2) fast data read and write speeds to allow a
system's microprocessor to access data without having to wait; (3) the ability
to read and modify data an unlimited number of times; (4) the ability to retain
its data indefinitely when power is interrupted (i.e. nonvolatility); (5)
availability in a variety of package types for modern assembly techniques; and
(6) the ability to be tested completely by the manufacturer to ensure the
highest quality and reliability. Although customers would like to have memory
components with all of these attributes it currently is not technically
feasible. Therefore, the memory market is segmented with different products
combining different mixes of these attributes.

Semiconductor memories can be divided into two main categories, volatile
and nonvolatile. Volatile memories generally offer high densities and fast data
access and programming speeds, but lose data when electrical power is
interrupted. Nonvolatile memories retain data in the absence of electrical
power, but typically have been subject to speed and testing limitations they
also wear out if they are modified too many times. There are a number of common
volatile and nonvolatile product types, as set forth below. The list of products
under "Combinations" is limited to single packages and does not include
combinations of the listed memories in separate packages, such as SRAMs in
combination with EPROMs and EEPROMs.

Volatile Nonvolatile Combinations
-------- ----------- ------------
SRAM EEPROM nvSRAM
DRAM Flash Memory NVRAM
EPROM SRAM plus lithium battery ("Batram")
PROM
ROM

VOLATILE MEMORIES. Rewritable semiconductor memories store varying amounts
of electronic charge within individual memory cells to perform the memory
function. In a Dynamic Random Access Memory (DRAM), the charge must be
electrically refreshed many times per second or data are lost even when power is
continuously applied. In a Static Random Access Memory (SRAM), the charge need
not be refreshed, but data can be retained only if power is not interrupted.

Nonvolatile Memories. A Read Only Memory (ROM) is programmed (written) once
in the later stages of the manufacturing process and cannot be reprogrammed by
the user. Programmable Read Only Memory (PROM) can be programmed once by the

user, while Erasable PROM (EPROM) may be reprogrammed by the user a limited
number of times if the EPROM is removed from the circuit board in the equipment.
Both Flash memory and Electrically Erasable PROM (EEPROM) may be reprogrammed
electrically by the user without removing the memory from the equipment.
However, the reprogramming time on both EEPROM and Flash memory is excessively
long compared to the read time such that in most systems the microprocessor must
stop for a relatively long time to rewrite the memory.

COMBINATIONS. Many customers use a combination of volatile and nonvolatile
memory functions to achieve the desired performance for their electronic
systems. By using SRAMs in combination with EPROM and EEPROM chips, customers
can achieve nonvolatility in their systems and still retain the high data read
and write speeds associated with SRAM memories. This approach, however, is not
desirable in many applications because of the size and cost disadvantages
associated with using two or more chips to provide a single memory function.
Also, it may take up to several seconds to transfer the data from the SRAM to
the EEPROM; an excessive time at power loss. As a result, attempts have been
made to combine nonvolatile and volatile memory features in a single package or
silicon chip. One approach combines an SRAM with lithium batteries in a single
package.

Nonvolatile random access memories (NVRAMs) combine volatile and
nonvolatile memory cells on a single chip and do not require a battery. We
believe our nvSRAM represents a significant advance over existing products that
combine volatility and nonvolatility on a single silicon chip. We combine an
SRAM memory cell with an EEPROM memory cell to create a small nvSRAM memory
cell. Our unique and patented memory cell design enables the nvSRAM to be
produced at densities higher than existing NVRAMs and at a lower cost per bit.
In addition to high density and nonvolatility, the nvSRAM has fast data access
and program speeds and the SRAM portion of the memory can be modified an
unlimited number of times without wearing out.

MEMORY TECHNOLOGY

We use an advanced implementation of silicon-nitride-oxide-semiconductor
(SNOS) technology. SNOS technology stores electrical charge within an insulator,
silicon nitride, and uses a thin tunnel oxide layer to separate the silicon
nitride layer from the underlying silicon substrate. SNOS technology prevents
tunnel oxide rupture in the memory cell from causing an immediate loss of data.
Oxide rupture has been a major cause of failures in Flash and EEPROMs using
floating gate technology, where charge is stored on a polysilicon conductor
surrounded by insulators. To protect against these failures, many floating gate
EEPROMs have required error correction circuitry and redundant memory cells.
This increases product cost by requiring more silicon area. Error correction and
redundancy are not required for our products to protect against tunnel oxide
rupture. In addition, our product designs incorporate a special test feature
which can predict data retention time for every individual memory cell based on
measuring the rate of charge loss out of the silicon nitride.

The SNOS technology coupled with our nvSRAM memory cell allows high
performance nonvolatile SRAMs to be manufactured using complementary metal oxide
semiconductor (CMOS) technology. The SNOS technology that we use has proven to
be highly reliable, as demonstrated by our product qualification results to
date.

MEMORY PRODUCTS

nvSRAMS (NONVOLATILE STATIC RANDOM ACCESS MEMORIES). Our 256 kilobit,
64 kilobit, 16 kilobit and 4 kilobit nvSRAM product families consist of
nonvolatile memories that combine fast SRAM and nonvolatile EEPROM
characteristics within each memory cell on a single chip of silicon. The SRAM
portion of the nvSRAM is operated in the same manner as most existing SRAM
products. The SRAM can be written to and read from an unlimited number of times.
The EEPROM can be programmed, depending upon device type, by user control or
automatically by transferring the SRAM contents into the EEPROM. The EEPROM data
can be transferred back into the SRAM by user control or the data can be
transferred automatically.

Our nvSRAMs have fast data access speeds of 20, 25, 35 and 45 nanoseconds.
These data access speeds correspond to those of fast SRAMs and meet the
requirements of much of the fast SRAM market. The high speed characteristics of
our nvSRAMs allow them to be used in applications with various high performance
microprocessors and digital signal processors such as those manufactured by
Intel Corp., Texas Instruments and Motorola. Our nvSRAMs can be used to replace
SRAMs with lithium batteries and multiple chip solutions such as SRAM plus
EEPROM or Flash Memory.

We finalized commercial and industrial qualification of two versions of our
initial 64 kilobit nvSRAM product offering in September 1991 and April 1992,
respectively. We completed military qualification of our initial nvSRAM in May
1992. We began sales into the commercial market of our initial 16 kilobit nvSRAM

product family in 1992. The nvSRAM product family also includes the 4 kilobit
version. We completed the development and product qualification of the 64
kilobit AutoStoreTM nvSRAM in 1993. The AutoStoreTM version automatically
detects power loss and transfers the data from the SRAM cells into the EEPROM
cells. This device does not require instructions or intervention from the system
microprocessor to notify it of the power loss. Commercial and industrial
qualification of our 256 kilobit nvSRAM occurred in 1997 and military
qualification of our 256 kilobit nvSRAM was completed in the second quarter of
1998.

PROGRAMMABLE LOGIC DEVICE INDUSTRY

The electronics industry uses logic integrated circuits to configure
systems to perform specific functions within a system. Field Programmable Gate
Arrays (FPGAs) and Complex Programmable Logic Devices (CPLDs) have become
popular for this purpose, and are supplied by a number of major suppliers, such
as Xilinx and Altera. These products provide high performance, flexible
solutions, but are expensive when compared to non-programmable, fixed function
application specific products. Simtek's MPGAs provide a low-cost, high volume
alternative to the programmable logic products. We entered this product segment
through our acquisitions of Integrated and Macrotech in 2000.

MPGA TECHNOLOGY

Simtek uses standard logic wafer processing available from various
subcontract fabrication facilities. We currently contract with UMC in Taiwan for
0.5 micron technology and with Chartered Semiconductor in Singapore for 0.35
micron technology. We plan to migrate the technology to a 0.25 micron process as
the market develops.

Simtek's conversion tools support direct netlist conversion to create
drop-in replacements at a fraction of the FPGA or CPLD cost. We can support up
to approximately 1 million logic gates plus dual port RAM. We also support full
scan test without any area penalty with our Integrated Testability feature.

MPGA PRODUCTS

MPGA products are built to order based on customer designs that are
electronically transferred to our design workstations. Our engineers then verify
the design and implement it in the appropriate technology to provide the most
cost effective solution available for the customer.

PRODUCT WARRANTIES. We presently provide a one-year limited warranty on our
products.

RESEARCH AND DEVELOPMENT

Many of our research and development activities are centered around
developing new products and reducing the cost of our nvSRAM products and the
development and design of customer specific metal programmed gate array. We have
reduced our costs by introducing our 0.8 micron technology. This technology
reduced the size of the 64 kilobit nvSRAM chip and enabled us to develop a cost
effective 256 kilobit nvSRAM. We are continuing our efforts to improve yield on
the 0.8 micron technology. In order to further reduce costs, we engaged Integra
Technologies, now Amkor Test Services in the fourth quarter 1997 for testing of
our 0.8 micron products. We have a test floor used for evaluation of our
technologies, product designs and product quality. The test floor is also used
for production testing of silicon wafers.

We anticipate that our acquisition of Q-Dot will enable us to enter the
high speed data communications market, addressing both wired and wireless
applications, based on advanced Silicon Germanium process technology. Silicon
Germanium (SiGe) is rapidly becoming the technology of choice for many analog,
mixed signal and high speed digital circuits. We plan to spend approximately
$350,000 over the next year in order to develop and manufacture integrated
circuits using the SiGe process technology.

Our research and development expenditures for the years ended December 31,
2000 and 1999 were approximately $5,637,799 and $1,640,025, respectively. Of the
$5,637,799 expenditure incurred in 2000, $3,962,646 was related to the
incomplete research and development we purchased from WebGear with stock. We
intend to continue expenditures on research and development; however, the
percentage of research and development expenditures is expected to decrease
relative to expenditures relating to the commercial production of our existing
products.

MANUFACTURING AND QUALITY CONTROL

Our manufacturing strategy is to use subcontractors whose production
capabilities meet the requirements of our product designs and technologies.

In 1992, we entered into a manufacturing agreement with Chartered (the
"Chartered Manufacturing Agreement") to provide us with silicon wafers for our
products. Under the Chartered Manufacturing Agreement, Chartered has installed a
manufacturing process for versions of our current and future memory products.

Finished wafer procurement reverted to Chartered during 1998 as we ceased
purchasing finished 0.8 micron units from ZMD. We used UMC for wafer procurement
of our 0.5 micron MPGA products and Chartered for wafer procurement of our 0.35
micron MPGA products. During 2000, all of our product revenue was based on
wafers purchased from Chartered and UMC.

Device packaging of our nvSRAM products continued at the Amkor facilities
in the Philippines and South Korea. Final test for 0.8 micron nvSRAM products
was established successfully at Integra Technologies, now Amkor Test Services,
in Wichita, Kansas. Device packaging of our metal programmed gate array products
continued at Advanced Semiconductor Eng., Inc. in Taiwan. Final test of our
metal programmed gate array products was completed in our Colorado Springs
facility and at Multitech Design and Test in San Jose, California.

Our subcontractors provide quality control for the manufacture of our
products. We maintain our own quality assurance personnel and testing capability
to assist the subcontractors with their quality programs and to perform periodic
audits of the subcontractors' facilities and finished products to ensure product
integrity.

Our quality and reliability programs were audited by several commercial and
military customers during 2000 as part of routine supplier certification
procedures. All such audits were completed satisfactorily.

MARKETS

Our memory products are targeted at fast nonvolatile SRAM markets, SRAM
plus EEPROM markets and other nonvolatile memory products broadly used in
commercial, industrial and military electronic systems.

Our MPGA products are built to customer requirements in many application
areas. Therefore, we believe that our products will address very broad markets
including these applications:

Airborne and Space Computers Lighting
Automotive Control & Monitoring Medical Instruments
Portable Telephone Modems Control Systems
Portable Computers Currency Changers
Postal Meters Data Monitoring Equipment
Printers Disk Drives
Process Control Equipment Facsimile Machines
Radar and Sonar Systems Gaming
Telecommunications Systems GPS Navigational Systems
Terminals Guidance and Targeting Systems
Test Equipment High Performance Workstations
Utility Meters Laser Printers
Vending Machines Mainframe Computers
Weapon Control Systems CD Writers
Security Systems Copiers
Broadcast Equipment Cable TV Set Top Converter Boxes
Studio Recording Equipment

We are increasing marketing and sales emphasis on office automation products
such as copiers and mass storage systems as well as beginning new sales efforts
in data communication applications.

SALES AND DISTRIBUTION

Our strategy is to generate sales through the use of independent sales
representative agencies and distributors. We believe this strategy provides the
fastest and most cost effective way to assemble a large and professional sales
force.

We currently have three sales and marketing offices, located in Colorado
Springs, Colorado, Bristol, England and Atlanta, Georgia. We have engaged 17
independent representative organizations with 40 sales offices and 31
distributor organizations with 105 sales offices. Both organizations have
multiple sales offices and sales personnel covering specific territories.
Through these organizations and their sales offices we are capable of serving a
worldwide market.

Independent sales representatives typically sell a limited number of
noncompeting products to semiconductor users in particular geographic assigned
territories. Distributors inventory and sell products from a larger number of
product lines to a broader customer base. These sales channels are
complementary, as representatives and distributors often work together to
consummate a sale, with the representative receiving a commission from us and
the distributor earning a markup on the sale of the products. We supply sales
materials to the sales representatives and distributors.

For our marketing activities, we evaluate external marketing surveys and
forecasts and perform internal studies based, in part, on inputs from our
independent sales representative agencies. We prepare brochures, data sheets and
application notes on our products.

CUSTOMERS AND BACKLOG

We have shipped qualified nvSRAM products to customers directly and through
distributors since the September 1991 commercial product qualification; the
majority of our customers are Fortune 500 companies. Approximately 40% of our
net product sales during 2000 were to customers in the Pacific Rim and
approximately 17% were to customers in Europe. The remaining product sales were
to customers in North America.

As of December 31, 2000, we had a backlog of unshipped customer orders of
approximately $7,948,000, which is expected to be filled by June 30, 2001.
Orders are cancelable without penalty at the option of the purchaser prior to 30
days before scheduled shipment and therefore are not necessarily a measure of
future product revenue.

During 2000, we continued to receive initial and scheduled production
orders on our 64 kilobit and 256 kilobit product. We believe that we will
continue to receive volume production orders on these products.

LICENSES

PRODUCT AND TECHNOLOGY LICENSE SALES. We have sold product and technology
licenses to Nippon Steel, Plessey and ZMD. Based on prior actions by Nippon
Steel and Plessey, we don't anticipate any future activity on the licenses with
Nippon Steel and Plessey.

ZMD. In June of 1994, we signed a joint development agreement with ZMD to
install the 1.2 micron products for manufacture at ZMD and to jointly develop
the 0.8 micron technology at Chartered. The Agreement was modified in August of
1994 by a Letter of Intent between us to bypass the installation of 1.2 micron
technology at ZMD and instead modify the 0.8 micron technology to run in the ZMD
factory. ZMD has paid us all the monetary requirements under this agreement
including any royalties we may receive from sales of these jointly developed
products.

CHARTERED. In September of 1992, we entered into a manufacturing agreement
with Chartered. This agreement grants Chartered the right to manufacture silicon
wafers containing our products solely for sale to us. Chartered also has the
right to manufacture silicon wafers in connection with future technology
licenses we may enter into with third parties.

Future License Sales. We intend to sell product and technology licenses on
a selective basis. We will continue to seek licensing partners who can
contribute to the development of the nvSRAM market and provide a meaningful
level of revenue to us while not posing an undue threat in the marketplace.

COMPETITION

Our products compete on the basis of several factors, including data access
and programming speeds, density, data retention, reliability, testability, space
savings, manufacturability, ease of use and price.

Products that compete with our family of nvSRAMs fall into three
categories. The first category of products that compete with our nvSRAMs are
volatile and nonvolatile chips used in combination, such as fast SRAMs used with
EPROMs, EEPROMs, or Flash memory. We believe that we have advantages over these
applications because the nvSRAM allows data to be stored in milliseconds as
compared to seconds for chips used in pairs. Our single chip solution provides a
space savings and easier manufacturing. Our single chip solution generally
provides increased reliability versus multiple chips. We believe it will be able
to compete with many solutions requiring density up to 256 kilobits; however, in
those instances where the density requirement is beyond 256 kilobits the nvSRAM
does not compete. Competitors in the multiple chip category include Cypress
Semiconductor Corp., Integrated Technology, Inc., Toshiba, Fujitsu, Advanced
Micro Devices, Inc., Atmel and National Semiconductor Corp.

The second category of products that compete with our nvSRAMs are products
that combine SRAMs with lithium batteries in specially adapted packages. These
products generally are slower in access speeds than our nvSRAMs due in part to
limitations caused by life of the lithium battery when coupled with a faster
SRAM. Our nvSRAMs are offered in standard, smaller, less expensive packages, and
do not have the limitation on lifetime imposed on the SRAM/battery solutions by
the lithium battery. Our nvSRAMs can also be used for wave soldered automatic
insertion circuit board assembly since they do not have the temperature
limitations of lithium batteries. However, lithium battery-backed SRAM products
are available in densities of 1 megabit and greater per package. Companies
currently supplying products with lithium batteries include Dallas Semiconductor
Corp., ST Microelectronics and Texas Instruments.

The third category consists of NVRAMs that combine SRAM memory cells and
EEPROM memory cells on a monolithic chip of silicon. Our current product
offerings are of higher density, faster access times and we believe can be
manufactured at lower costs per bit than NVRAMS.

ZMD, through their license agreement with us, has the worldwide right to
sell under the ZMD label nvSRAMs developed jointly by ZMD and us. With volume
production established at ZMD using the 0.8 micron product, ZMD is selling such
nvSRAMs. This has had a positive impact for us by creating a second source,
which is required by many larger companies, for our nvSRAM products. However, in
2000, we were required to reduce prices to certain markets due to the increased
competition from ZMD. We believe that the competition from ZMD has increased the
number of companies using nvSRAMs, but may have put downward pressure on average
selling prices.

We are aware of other semiconductor technologies for nonvolatile memory
products. These technologies include ferroelectric memory and thin film magnetic
memory. Ramtron, Raytheon, Symetrix, and others are developing ferroelectric
products. Honeywell, Inc. is developing magnetic film products.

MPGA-type solutions are supported by semiconductor companies such as AMI
Semiconductor, NEC and Temic.

PATENTS AND INTELLECTUAL PROPERTY

We undertake to protect our product designs and technologies under the
relevant intellectual property laws as well as by utilizing internal disclosure
safeguards. Under our licensing programs, we exercise control over the use of
our protected intellectual property and have not permitted our licensees to
sublicense our nvSRAM products or technology.

It is common in the semiconductor industry for companies to obtain
copyright, trademark and patent protection of their intellectual property. We
believe that patents are significant in our industry, and we are seeking to
build a patent portfolio. We expect to enter into patent license and
cross-license agreements with other companies. We have been issued seven patents
in the United States on our nvSRAM memory cell and other circuit designs. These
patents have terms that expire through 2008 to 2013. We have also taken steps to
obtain international patents on certain of our products. We have two

applications that have been allowed and intend to prepare patent applications on
additional circuit designs we have developed. However, as with many companies in
the semiconductor industry, it may become necessary or desirable in the future
for us to obtain licenses from others relating to our products.

We have received federal registration of the term "Novcel" a term we use to
describe our technology. We have not sought federal registration of any other
trademarks, including "Simtek" and "QuantumTrapTM" or our logo.

EMPLOYEES

As of the date of this prospectus, we had 43 full-time employees and one
temporary employee.

FACILITIES

We lease approximately 12,000 square feet of space in Colorado Springs,
Colorado. This space includes a product engineering test floor of approximately
2,350 square feet. The lease expires on December 31, 2001. During 2000, we
signed a lease for a new location in Colorado Springs, Colorado for
approximately 16,000 square feet of space that includes a product engineering
test floor of approximately 3,000 square feet. The new lease agreement requires
the new landlord to begin paying all costs related to the old location at the
time we take occupancy at the new location. In March 2001, we moved into the new
facility, located at 4250 Buckingham Drive #100, Colorado Springs, CO 80907.

LEGAL PROCEEDINGS

There were no legal proceedings against us as of the date of this report.

MATTERS SUBMITTED TO A VOTE OF SECURITY HOLDERS

On November 16, 2000, we had a special meeting of shareholders to ratify
the selection of Hein + Associates LLP, as the Company's independent auditors
for the year ending December 31, 2000. The proposal was passed with the voting
of 32,532,148 For, 97,355 Against, and 138,458 Abstained.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

Our directors and executive officers are as follows:

Name Age Position
---- --- --------

Douglas M. Mitchell.......... 51 Director, Chief Executive Officer and
President, Chief Financial Officer
(acting)

Klaus C. Wiemer.............. 63 Director

Robert H. Keeley............. 59 Director

Harold Blomquist............. 49 Director

John Heightley............... 64 Director

DOUGLAS M. MITCHELL, served as our Chief Operating Officer from July 1,
1997 until January 1, 1998 at which time he became Chief Executive Officer,
President and a director. Mr. Mitchell has over 20 years of experience in the
semiconductor and electronics systems industry holding various marketing and
sales management positions. Prior to joining us, he was President and Chief
Executive Officer of a wireless communications company, Momentum Microsystems.
Prior to this Mr. Mitchell was Vice President of Marketing with SGS-Thomson
Microelectronics, responsible for marketing and applications engineering of
Digital Signal Processing, transputer, microcontroller and graphics products in
North America. SGS-Thomson had acquired Inmos Corporation where Mr. Mitchell had
been Manager, US Marketing and Sales. Mr. Mitchell has held management positions
at Texas Instruments and Motorola and has been responsible for various product
definition and product development. Mr. Mitchell holds a Bachelors degree in
electrical engineering from the University of Texas and a Masters of Business
Administration degree from National University.

KLAUS C. WIEMER, has served as a director since May 1993. He also serves on
the boards of Neomagic Corp (NMGC) of Santa Clara, CA and InterFET Corp of
Garland, TX. From July 1993 to May 1994, Dr. Wiemer served as President and
Chief Executive Officer of our company. Since May 1994, Dr. Wiemer has been an
independent consultant. From April 1991 to April 1993, Dr. Wiemer was President
and Chief Executive Officer of Chartered Semiconductor Manufacturing Pte., Ltd.
in Singapore, and from July 1987 to March 1991, Dr. Wiemer was President and
Chief Operating Officer of Taiwan Semiconductor Manufacturing Company. Prior to
1987, Dr. Wiemer was a consultant for the Thomas Group specializing in the area
of integrated circuit manufacturing and previously worked for fifteen years with
Texas Instruments. Dr. Wiemer holds a Bachelors degree in physics from Texas
Western College, a Masters degree in physics from the University of Texas and a
Ph.D. in physics from Virginia Polytechnic Institute.

ROBERT H. KEELEY, has served as a director since May 1993. He is currently
the El Pomar Professor of Business Finance at the University of Colorado at
Colorado Springs. From 1986 until he joined the faculty at the University of
Colorado at Colorado Springs in 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 Bachelors degree in electrical engineering from Stanford University, an
M.B.A. from Harvard University and a Ph.D. in business administration from
Stanford University. Dr. Keeley is also a director of Analytical Surveys, Inc.
and a number of private companies.

HAROLD A. BLOMQUIST, was appointed as a director in May 1998. Mr. Blomquist
is currently president of American Microsystems ("AMI") Japan, Ltd. in Toyko;
senior managing director and board chairman of AMI GmbH in Dresden, Germany;
senior vice president of AMI's worldwide sales and strategic marketing; and a
member of the board of directors for both AMI and AMI's holding company, GA
Tech, Inc. Before joining AMI in April 1990, Mr. Blomquist held a series of
increasingly responsible positions in engineering, sales, and marketing for
several semiconductor firms, including Texas Instruments, Inmos 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.

JOHN HEIGHTLEY, was appointed as a director in September 1998. Mr.
Heightley is currently executive vice president and chief technology officer for
United Memories of Colorado Springs. From 1990 to 1996, Mr. Heightley was
president and chief executive officer of Adaptive Solutions, Inc. In 1986 and
1987, he held the position of president and chief executive officer of Gigabit
Logic, Inc.; in 1987 he was appointed chairman of Gigabit along with his
responsibilities as president and chief executive officer. Mr. Heightley held
these positions until 1990. Prior to Gigabit, Mr. Heightley served as president
and chief executive officer of Ramtron Corporation from 1985 to 1986 and from
1978 to 1985 he served as a member of the board of directors, president, chief
operating officer and vice president of memory products for Inmos International,
plc. Mr. Heightley was granted a B.S. degree in Engineering Science from Penn
State University and earned a M.S. degree in Electrical Engineering from M.I.T.

Subject to the requirement that the Board of Directors be classified if it
consists of six or more persons, directors serve until the next annual meeting
or until their successors are elected and have qualified. Officers serve at the
discretion of the Board of Directors. Vacancies on the Board of Directors are
filled by the existing directors. Under and subject to compliance with, certain
agreements entered into with ZMD, ZMD has the right to appoint two members to
the Board of Directors. At this time ZMD has no representation on our Board of
Directors.

SPECIAL PROVISIONS IN ARTICLES OF INCORPORATION

Our articles of incorporation contain a provision limiting the liability of
directors to the fullest extent permitted under the Colorado Corporation Code
(the "Code"). The Code allows a corporation to limit the personal liability of a
director to the corporation or its shareholders for monetary damages for
breaches of fiduciary duty as a director except for

1. breaches of the director's duty of loyalty,

2. acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of the law,

3. certain other acts specified in the Code, and

4. transactions from which the director derived an improper benefit.

The provisions of the Code will not impair our ability to seek injunctive
relief for breaches of fiduciary duty. Such relief, however, may not always be
available as a practical matter.

Our articles of incorporation also contain a provision that requires us to
indemnify, to the fullest extent permitted under the Code, directors and
officers against all costs and expenses reasonably incurred in connection with
the defense of any claim, action, suit or proceeding, whether civil, criminal,
administrative, investigative or other, in which such person may be involved by
virtue of being or having been a director, officer or employee.

EXECUTIVE COMPENSATION

The following table sets forth certain information for each of our last
three fiscal years with respect to the annual and long-term compensation of the
only individual acting as the Chief Executive Officer during the fiscal year
ended December 31, 2000. No other executive officers as of December 31, 2000 had
combined annual salary and bonus for the fiscal year ended December 31, 1998
that exceeded $100,000.

Summary Compensation Table

Long Term Compensation
------------------------------
Annual Compensation Awards Payouts
---------------------------------------------------------------------------
Name Other Restricted
and Annual Stock LTIP All Other
Principal Compen- Award(s) Options/ Payouts Compen-
Position Year Salary($) Bonus($) sation($) ($) SARs(#) ($) sation($)
--------- -------------------------------------------------------------------------------------

Douglas M. Mitchell(1) 2000 $150,000 $62,500 -- -- 40,000 -- --
Chief Executive 1999 $120,000 -- -- -- 30,000 -- --
Officer and President 1998 $120,000 -- -- -- 250,000 -- --

(1) Mr. Mitchell became our Chief Executive Officer and President on January 1,
1998.

OPTION GRANT TABLE

The following table sets forth certain information with respect to options
granted by us during the fiscal year ended December 31, 2000 to the individual
named in the summary compensation table above.

Shares Potential
subject to Market Realizable Value
Options/SAR's Price at Assumed
Shares Granted to Exercise per Annual Rate of
subject to Employees Price Share on Stock Price
Options/SAR's in Fiscal Per Date of Expiration Appreciation for
Name Granted % of Total Share Grant Date Option Term
----------------------------------------------------------------------------------------------------------------------
5% 10%
-----------------------

Douglas M. Mitchell 40,000(1) 4.1% $0.25 $0.25 1/14/2007 $4,071 $9,487

(1) 40,000 options were granted to Mr. Mitchell in his capacity as Chief
Executive Officer and President, these options vest at 1/36th per month
over 3 years.

YEAR-END OPTION TABLE

The following table sets forth as of December 31, 2000 the number of shares
subject to unexercised options held by the individual named in the summary
compensation table above. 550,000 options had an exercise price greater 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, 2000.

Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Values

Value of Unexercised
Number of Unexercised in-the-money
Options/SARs at Fiscal Options/SARs
Shares Value Year-End at Fiscal Year-End
Acquired on Realized Exercisable Unexercisable Exercisable Unexercisable
Name Exercise (#) ($) (#) (#) ($) ($)
-----------------------------------------------------------------------------------------------------------------------

Douglas M. Mitchell 100,000 $198,952 541,389 78,611 $10,111 $14,389

EMPLOYMENT AGREEMENTS

Mr. Mitchell is employed as President and Chief Executive Officer pursuant
to an employment agreement with us. Under the terms of the employment agreement,
Mr. Mitchell receives and annual salary of $150,000 and such additional benefits
that are generally provided other employees. Mr. Mitchell's employment agreement
expires June 1, 2001 but is automatically renewed for successive one-year terms
unless we or Mr. Mitchell elects not to renew. If we terminate the employment of
Mr. Mitchell without cause, Mr. Mitchell is entitled to continuation of his base
salary and benefits, mitigated by income Mr. Mitchell may earn, for the
remainder of the term of the agreement. Mr. Mitchell is subject to a
noncompetition covenant for a period of one year from the date of termination.

CONFIDENTIALITY AND NONDISCLOSURE AGREEMENTS

We generally require our employees to execute confidentiality and
nondisclosure agreements upon the commencement of employment with us. The
agreements generally provide that all inventions or discoveries by the employee
related to our business and all confidential information developed or made known
to the employee during the term of employment shall be the exclusive property of
us and shall not be disclosed to third parties without the prior approval of us.

DIRECTORS' COMPENSATION

Each director who is not also an employee receives $1,000 for each meeting
of the Board, attended in person, and $500 for each meeting of a committee of
the Board. Directors are also reimbursed for their reasonable out-of-pocket
expenses incurred in connection with their duties to us. During the fiscal year
ended December 31, 2000, 15,000 stock options were granted, at the market price
on date of grant, each to Dr. Klaus Wiemer , Dr. Robert Keeley, Mr. Harold
Blomquist and Mr. John Heightley.

SECURITY OWNERSHIP

The first table below sets forth certain information regarding ownership of
our common stock as of April 23, 2001, by each person who is known by us to
beneficially own more than five percent of our common stock, by each director,
by each executive officer named in the summary compensation table and by all
directors and executive officers as a group. Shares issuable within sixty days
upon the exercise of options are deemed outstanding for the purpose of computing
the percentage ownership of persons beneficially owning such options or holding
such notes but are not deemed outstanding for the purpose of computing the
percentage ownership of any other person. To the best of our knowledge, the
persons listed below have sole voting and investment power with respect to the
shares indicated as owned by them subject to community property laws where
applicable and the information contained in the notes to the table.

Number of Percentage
Name and Address of Beneficial Owner Shares Owned of Class
------------------------------------ ------------ ---------

Hugh Norman Chapman 3,061,111(1) 5.70%
4785 Rustler Ct.
Colorado Springs, CO 80918

Douglas M. Mitchell 618,553(2) 1.14%
205 Ridge Dr.
Woodland Park, CO 80863

Klaus C. Wiemer 120,000(3) *
5705 Archer Court
Dallas, TX 75252

Robert H. Keeley 95,000(4) *
12630 Milan Road
Colorado Springs, CO 80908

Harold Blomquist 30,000(5) *
1630 Huntington Dr.
Pocatello, ID 83204

John D. Heightley 55,000(6) *
1275 Log Hollow Point
Colorado Springs, CO 80906

All officers and directors as a group 918,553(7) 1.68%
(5 persons)

--------------
* Less than one percent.

(1) Represents 3,000,000 shares of our Common Stock that Mr. Chapman received
upon our acquiring Integrated Logic Systems, Inc. and represents 61,111
shares issuable upon exercise of options.

(2) Represents 574,167 shares issuable upon exercise of options and 44,386
shares acquired from the Q-DOT acquistion.

(3) Represents 120,000 shares issuable upon exercise of options.

(4) Includes 95,000 shares issuable upon exercise of options.

(5) Represents 30,000 shares issuable upon exercise of options.

(6) Represents 55,000 shares issuable upon exercise of options.

(7) Includes 874,167 shares issuable upon exercise of stock options.

SELLING SHAREHOLDERS

The following table sets forth information about our selling shareholders.

Percentage Number of
of Class Shares
Number of Following Number of Following
Name and Address of Selling Shareholders Shares Owned the Offering Shares Offered the Offering
---------------------------------------- ------------ ------------ ---------------- ------------

Mr. William B. Bliss 1,136,581 2.12% 397,804 738,777
2985 Broadmoor Valley Road
Colorado Springs, CO 80906

Mr. Thomas K. Bohley 17,663 * 6,183 11,480
P. O. Box 7345
Colorado Springs, CO 80933-7345

Mr. Bruce B. Brundage 53,871 * 18,855 35,016
7837 S. Perry Park Rd.
Larkspur, CO 80118

Ms. Mary F. Crockett 1,767 * 619 1,148
1402 Lorraine Street
Colorado Springs, CO 80906-2146

Mr. Russell Farmer 51,451 * 18,008 33,443
15098 Zuni Street
Broomfield, CO 80020

Mr. Morgan L. Fitch, Jr. 583,746 1.09% 204,312 379,434
4640 Clausen
Western Springs, IL 60558

Mr. Steven R. Freeman 12,364 * 4,328 8,036
2241 S. Huran Pkwy., #4
Ann Arbor, MI 48104

Mr. David A Gradl 226,663 * 79,333 147,330
1308 Pickwick Court
Naperville, IL 60563

Mr. Michael E. Harrell 1,767 * 619 1,148
2263 Havenridge Dr.
Colorado Springs, CO 80920

Mr. Donald L. Herman, Jr. 33,771 * 11,820 21,951
435 Maverick Way
Monument, CO 80132

Dr. Robert J. Kansy 33,771 * 11,820 21,951
5509 Harbor Town Dr.
Dallas, TX 75287

Mr. James H. Lauffenberger 17,663 * 6,183 11,480
6427 Rifle Circle
Colorado Springs, CO 80919

Ms. Barbara S. Linnenbrink 489,287 * 171,251 318,036
475 Silver Saddle
Monument, CO 80132

Mr. Thomas E. Linnenbrink 894,128 1.67% 312,945 581,183
5985 Nora Point, #202
Colorado Springs, CO 80919

Mr. Douglas M. Mitchell 44,386 * 15,536 28,850
205 Ridge Rd.
Woodland Park, CO 80863

Mr. Marc A. Morin 1,961 * 687 1,274
161 W. Ridge Dr.
Woodland Park, CO 80863

Dr. Margaret S. Mortz 35,325 * 12,364 22,961
3420 S. Ridgeview Drive
Spokane, WA 99206-9556

Mr. James J. Myrick 408,057 * 142,820 265,237
748 Greenwood Ave.
Glencoe, IL 60022

Mr. Timothy G. O'Shaughnessy 884 * 310 574
12415 Latigo Blvd.
Elbert, CO 80106

Dr. David E. Reed 17,663 * 6,183 11,480
9747 W. 99th Place
Westminister, CO 80021

Mr. J. Ray Rice 2,208 * 773 1,435
7555 Wildridge Rd.
Colorado Springs, CO 80908

Dr. Peter C. T. Roberts 17,663 * 6,183 11,480
639 N. Sunway Drive
Gilbert, AZ 85233

Mr. William J. Schneweis 884 * 310 574
22 Pinon Lake Dr.
Divide, CO 80814

Mr. Brian L. Sperry 33,789 * 11,827 21,962
2877 Loma Place
Boulder, CO 80301

Mr. Alan Steiner 53,871 * 18,855 35,016
19410 Glen Cannon Way
Monument, CO 80132

Alan B. and Barbara W. Steiner Trust 52,988 * 18,546 34,442
19410 Glen Cannon Way
Monument, CO 80132

Patlaw Trust 910,466 1.69% 318,664 591,802
c/o Jerry Prokaski, Bob Fox, Ken Samples
120 S. LaSalle Street, Suite 1600
Chicago, IL 60603

Dr. Mark V. Wadsworth 17,663 * 6,183 11,480
520 Manzanita Ave.
Sierra Madre, CA 91024

Ms. Diane R. Williams 17,663 * 6,183 11,480
3740 Saints Ct.
Colorado Springs, CO 80904

Mr. Ronald J. Wood 1,767 * 619 1,148
11420 Salem Ct.
Peyton, CO 80831

* Less than 1 percent

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Our president and director, Douglas Mitchell was also a director of Q-DOT
prior to our acquisition of Q-DOT. He received 44,386 shares of our common stock
in connection with our acquisition of Q-DOT.

DESCRIPTION OF SECURITIES

COMMON STOCK

We are authorized to issue 80,000,000 shares of common stock, par value
$0.01 per share. Each share of common stock entitles the holder thereof to one
vote on all matters submitted to a vote of the shareholders. Holders of common
stock do not have preemptive rights or rights to convert their common stock into
other securities. Holders of common stock are entitled to receive ratably such
dividends as may be declared by the Board of Directors out of funds legally
available therefor. In the event of our liquidation, dissolution or winding up,
holders of the common stock have the right to a ratable portion of the assets
remaining after payment of liabilities.

PREFERRED STOCK

Our Articles of Incorporation authorize 2,000,000 shares of $1.00 par value
preferred stock. The Board of Directors has the authority to issue preferred
stock in one or more series and to fix the rights, preferences, privileges and
restrictions thereof, including dividend rights, dividend rates, conversion
rights, voting rights, terms of redemption, redemption prices, liquidation
preferences and the number of shares constituting any series and the designation
of such series, without further vote or action by the shareholders. The issuance
of preferred stock may have the effect of delaying, deferring or preventing a
change in control of us without further action by the shareholders and may
adversely affect the voting power and other rights of the holders of common
stock, including the loss of voting control to others. As of the date of this
prospectus, there are not shares of preferred stock outstanding.

PLAN OF DISTRIBUTION

These shares are being offered hereby for sale by twenty nine of our
shareholders who received these shares in a unregistered transaction. These
shares will be offered by the selling shareholders from time to time (i) on the
over-the-counter market, where the common stock is traded, or elsewhere, at
fixed prices which may be changed, at market prices prevailing at the time of
offer and sale, at prices related to such prevailing market prices or at
negotiated prices and (ii) in negotiated transactions, through the writing of

options on the shares, or a combination of such methods of sale. The selling
shareholders may effect such transactions by offering and selling the shares
directly or to or through securities broker-dealers, and such broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the selling shareholders and/or the purchasers of the shares for whom such
broker-dealers may act as agent or to whom the selling shareholders may sell as
principal, or both (which compensation as to a particular broker- dealer might
be in excess of customer commissions).

The selling shareholders and any broker-dealers who are in connection with
the sale of the shares hereunder may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act, and any commissions received by
them and profit on any resale of the shares as principal might be deemed to be
underwriting discounts and commissions under the Securities Act.

We have advised the selling shareholders that they and any securities
broker-dealers or others who may be deemed to be statutory underwriters will be
subject to the prospectus deliver requirements under the Securities Act. We have
also advised the selling shareholders that in the event of a "distribution" of
shares, any "affiliated purchasers," and any broker-dealer or other person who
participates in such distribution may be subject to Regulation M under the
Exchange Act until his or its participation in that distribution is completed. A
"distribution" is defined in Rule 101 of Regulation M as an offering of
securities "that is distinguished from ordinary trading transactions by the
magnitude of the offering and the presence of special selling efforts and
selling methods." Regulation M makes it unlawful for any person who is
participating in a distribution to bid for or purchase stock of the same class
as is the subject of the distribution.

LEGAL MATTERS

The validity of the shares offered hereby will be passed by Holme Roberts &
Owen LLP, Denver, Colorado.

EXPERTS

The financial statements of Simtek Corporation as of December 31, 2000 and
for the years ended December 31, 2000 and December 31, 1999 included within this
Prospectus have been so included in reliance on the report of Hein + Associates
LLP, independent auditors, given on the authority of said firm as experts in
auditing and accounting.

SIMTEK CORPORATION

INDEX TO FINANCIAL STATEMENTS

PAGE
----

Independent Auditor's Report............................................... F-2

Balance Sheet - December 31, 2000.......................................... F-3

Statements of Operations - For the Years Ended
December 31, 2000 and 1999............................................. F-4

Statements of Changes in Shareholders' Equity -
For the Years Ended December 31, 2000 and 1999......................... F-5

Statements of Cash Flows - For the Years Ended
December 31, 2000 and 1999............................................. F-6

Notes to Financial Statements.............................................. F-7

F-1

INDEPENDENT AUDITOR'S REPORT

Board of Directors and Shareholders
Simtek Corporation
Colorado Springs, Colorado

We have audited the accompanying balance sheet of Simtek Corporation as of
December 31, 2000 and the related statements of operations, changes in
shareholders' equity and cash flows for each of the years in the two-year period
ended December 31, 2000. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Simtek Corporation as of
December 31, 2000, and the results of its operations and its cash flows for each
of the years in the two-year period ended December 31, 2000, in conformity with
general accepted accounting principles.

/s/ Hein + Associates LLP
HEIN + ASSOCIATES LLP

Denver, Colorado
February 5, 2001

F-2

SIMTEK CORPORATION

BALANCE SHEET
DECEMBER 31, 2000

ASSETS
------

CURRENT ASSETS:
Cash and cash equivalents $ 2,847,110
Restricted cash 300,000
Accounts receivable - trade, net of allowance
for doubtful accounts and
return allowances of $177,098 1,500,536
Inventory 1,130,629
Prepaid expenses and other 856,508
------------
Total current assets 6,634,783

EQUIPMENT AND FURNITURE, net 747,063

OTHER ASSETS 135,180
------------

TOTAL ASSETS $ 7,517,026
============

LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------

CURRENT LIABILITIES:
Accounts payable $ 870,946
Accrued expenses 476,992
Accrued wages 254,631
Accrued vacation payable 103,476
Obligation under capital leases 47,344
------------
Total current liabilities 1,753,389

NOTES PAYABLE 20,000

OBLIGATIONS UNDER CAPITAL LEASES, NET OF CURRENT PORTION 153,670
------------
Total liabilities 1,927,059

COMMITMENTS (Note 6)

SHAREHOLDERS' EQUITY:

Preferred stock, $1.00 par value; 2,000,000
shares authorized, none issued

Common stock, $.01 par value; 80,000,000 shares
authorized, 48,462,514 shares issued and
outstanding 484,625
Additional paid-in capital 36,930,626
Accumulated deficit (31,825,284)
------------
Total shareholders' equity 5,589,967
------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 7,517,026
============

See accompanying notes to these financial statements.

F-3

SIMTEK CORPORATION

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED
DECEMBER 31,
-----------------------------------
2000 1999
---------------- ----------------

NET SALES $ 12,150,750 $ 7,754,952

Cost of sales 7,728,095 4,826,266
-------------- --------------

GROSS MARGIN 4,422,655 2,928,686

OPERATING EXPENSES:
Research and development costs 5,637,799 1,640,025
Sales and marketing 1,170,305 918,642
General and administrative 1,129,672 470,703
-------------- --------------

Total operating expenses 7,937,776 3,029,370
-------------- --------------

LOSS FROM OPERATIONS (3,515,121) (100,684)
-------------- ---------------

OTHER INCOME (EXPENSE):
Interest income 165,736 96,942
Interest expense (52,790) (151,402)
Other income (expense) 23,349 5,674
-------------- --------------

Total other income (expense) 136,295 (48,786)
-------------- --------------

NET LOSS $ (3,378,826) $ (149,470)
=============== ===============

NET LOSS PER COMMON SHARE:
Basic and diluted EPS $ (.08) $ *
============== ==============

WEIGHTED AVERAGE COMMON SHARE OUTSTANDING:
Basic and diluted EPS 43,165,436 33,173,966
============== ==============

----------------------
*Less than $.01 per share.

See accompanying notes to these financial statements.

F-4

SIMTEK CORPORATION

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

Common Stock Additional Total
---------------------------- Paid-in Accumulated Shareholders'
Shares Amount Capital Deficit Equity
---------- ------------ ------------ ------------ -------------

BALANCES, January 1, 1999 32,995,226 $ 329,952 $ 29,844,859 $(28,296,988) $ 1,877,823

Contributions - - 202,752 - 202,752
Exercise of stock options 210,000 2,100 32,166 - 34,266
Net loss - - - (149,470) (149,470)
------------ ------------ ------------ ------------ ------------

BALANCES, December 31, 1999 33,205,226 332,052 30,079,777 (28,446,458) 1,965,371
------------ ------------ ------------ ------------ ------------

Exercise of stock options 1,863,016 18,630 278,438 - 297,068
Webgear purchase 4,150,000 41,500 4,046,146 - 4,087,646
Conversion of debt 8,244,272 82,443 1,488,962 - 1,571,405
Stock issuance for services 1,000,000 10,000 1,021,200 - 1,031,200
Other - - 16,103 - 16,103
Net loss - - - (3,378,826) (3,378,826)
------------ ------------ ------------ ------------ ------------

BALANCES, December 31, 2000 48,462,514 $ 484,625 $ 36,930,626 $(31,825,284) $ 5,589,967
============ ============ ============ ============ ============

See accompanying notes to these financial statements.

F-5

SIMTEK CORPORATION

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED
DECEMBER 31,
---------------------------------
2000 1999
------------ ------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(3,378,826) $ (149,470)
Adjustments to reconcile net income to net cash from
operating activities:
Depreciation and amortization 307,837 247,502
Stock issuance for services 300,767 -
Webgear purchase of incomplete research and development 3,962,645 -
Contributed service - 70,000
Unrealized gain of securities - 6,930
Net change in allowance accounts 196,407 (90,936)
Deferred financing fees 1,865 11,191
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable (366,994) (270,510)
Inventory (85,270) (48,930)
Investments - 13,146
Prepaid expenses and other (117,579) 26,475
Increase (Decrease) in:
Accounts payable (62,732) 450,135
Accrued expenses 68,676 (75,852)
Customer deposits (53,010) 49,250
----------- -----------
Net cash provided by operating activities 773,786 238,931
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment and furniture (368,713) (179,310)
Decrease (increase) in restricted cash 100,000 (300,000)
Payments on capital lease obligation (40,644) (13,914)
----------- -----------
Net cash used in investing activities (309,357) (493,224)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line-of-credit and the issuance of note - 142,000
Payments on notes payable (111,139) (99,614)
Exercise of stock options 297,068 34,266
Other 16,103 132,752
----------- -----------
Net cash provided by financing activities 202,032 209,404
----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 666,461 (44,889)

CASH AND CASH EQUIVALENTS, beginning of year 2,180,649 2,225,538
----------- -----------
CASH AND CASH EQUIVALENTS, end of year $ 2,847,110 $ 2,180,649
=========== ===========

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest $ 52,790 $ 151,402
=========== ===========
Cash paid (refund of) for income taxes $ 11,600 $ (8,480)
=========== ===========
Conversion of debenture into shares of common stock, net of deferred
Financing costs related to debenture $ 1,441,249 $ -
=========== ===========
Conversion of payable to ZMD into shares of common stock $ 130,153 $ -
=========== ===========
NONCASH INVESTING AND FINANCING TRANSACTIONS:
Purchase of equipment through payables and capital leases $ - $ 255,573
=========== ===========
Issuance of stock for prepaid services $ 730,434 $ -
=========== ===========
Issuance of stock for patents and trademarks $ 118,750 $ -
=========== ===========

See accompanying notes to these financial statements.

F-6

SIMTEK CORPORATION

NOTES TO FINANCIAL STATEMENTS

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES:
------------------------------------------------------

NATURE OF BUSINESS OPERATIONS - Simtek Corporation (the "Company") has been
involved in the design and development of nonvolatile semiconductor
products since it commenced business operations in 1987. In addition, it
has been involved in the design, development, and production of gate array
integrated circuits and related services. The Company's operations have
concentrated on the design and development of the 256 kilobit, 64 kilobit,
and 16 kilobit nvSRAM product families and associated products and
technologies as well as the development of sources of supply and
distribution channels. As discussed throughout the notes to the financial
statements, the Company has entered into several significant transactions
with Zentrum Mikroelektronik Dresden GmbH (ZMD), a manufacturer of silicon
wafers.

CASH AND CASH EQUIVALENTS - The Company considers all highly liquid
investments with an original maturity of three months or less to be cash
equivalents. As of December 31, 2000, substantially all of the Company's
cash and cash equivalents were held by a single bank, of which
approximately $2,894,630 was in excess of Federally insured amounts.

REVENUE RECOGNITION - Product sales revenue is recognized when a valid
purchase order has been received and the products are shipped to customers,
including distributors. Customers receive a one-year product warranty and
sales to distributors are subject to a limited product exchange program and
product pricing protection in the event of changes in the Company's product
price. The Company provides a reserve for possible product returns, price
changes and warranty costs at the time the sale is recognized.

INVENTORY - The Company records inventory using the lower of cost
(first-in, first-out) or market. Inventory at December 31, 2000 includes:

Raw materials $ 177,947
Work in process 872,948
Finished goods 176,398
----------
1,227,293
Less reserves (96,664)
-----------

$1,130,629
==========

DEPRECIATION - Equipment and furniture are recorded at cost. Depreciation
is provided over the assets' estimated useful lives of three to seven years
using the straight-line and accelerated methods. The cost and accumulated
depreciation of furniture and equipment sold or otherwise disposed of are
removed from the accounts and the resulting gain or loss is included in
operations. Maintenance and repairs are charged to operations as incurred
and betterments are capitalized.

RESEARCH AND DEVELOPMENT COSTS - Research and development costs are charged
to operations in the period incurred.

F-7

SIMTEK CORPORATION

NOTES TO FINANCIAL STATEMENTS

ADVERTISING - The Company incurs advertising expense in connection with the
marketing of its product. Advertising costs are expensed the first time the
advertising takes place. Advertising expense was $87,672 and $94,936 in
2000 and 1999, respectively.

LOSS PER SHARE - The loss per share is presented in accordance with the
provisions of Statement of Financial Accounting Standards (SFAS) No. 128,
Earnings Per Share. SFAS No. 128 replaced the presentation of primary and
fully diluted earnings (loss) per share (EPS) with a presentation of basic
EPS and diluted EPS. Basic EPS is calculated by dividing the income or loss
available to common shareholders by the weighted average number of common
shares outstanding for the period. Diluted EPS reflects the potential
dilution that could occur if securities or other contracts to issue common
stock were exercised or converted into common stock. As the Company
incurred losses in 1999 and 2000, all common stock equivalents would be
considered anti-dulitive, therefore basic and diluted loss per share is the
same.

ACCOUNTING ESTIMATES - The preparation of financial statements in
conformity generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and the accompanying notes. The actual results could
differ from those estimates. The Company's financial statements are based
upon a number of estimates, including the allowance for doubtful accounts,
technological obsolescence of inventories, the estimated useful lives
selected for property and equipment, sales returns, warranty reserve, and
the valuation allowance on the deferred tax assets. Due to the
uncertainties inherent in the estimation process, it is at least reasonably
possible that the estimates for these items could be further revised in the
near term and such revisions could be material.

IMPAIRMENT OF LONG-LIVED ASSETS - In the event that facts and circumstances
indicate that the cost of assets or other assets may be impaired, an
evaluation of recoverability would be performed. If an evaluation is
required, the estimated future undiscounted cash flows associated with the
asset would be compared to the asset's carrying amount to determine if a
write-down to market value or discounted cash flow value is required.

STOCK-BASED COMPENSATION - As permitted under the SFAS No. 123, Accounting
for Stock-Based Compensation, the Company accounts for its stock-based
compensation in accordance with the provisions of Accounting Principles
Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees. As
such, compensation expense is recorded on the date of grant if the current
market price of the underlying stock exceeds the exercise price. Certain
pro forma net income and EPS disclosures for employee stock option grants
are also included in the notes to the financial statements as if the fair
value method as defined in SFAS No. 123 had been applied. Transactions in
equity instruments with non-employees for goods or services are accounted
for by the fair value method.

INCOME TAXES - The Company accounts for income taxes under the liability
method of SFAS No. 109, whereby current and deferred tax assets and
liabilities are determined based on tax rates and laws enacted as of the
balance sheet date. Deferred tax expense represents the change in the
deferred tax asset/liability balance. Valuation allowances are recorded for
deferred tax assets that are not expected to be realized.

F-8

SIMTEK CORPORATION

NOTES TO FINANCIAL STATEMENTS

BUSINESS SEGMENTS - In June 1997, the Financial Accounting Standards Board
issued SFAS No. 131, Disclosures About Segments of an Enterprise and
Related Information ("SFAS No. 131"). SFAS No. 131 changes the way public
companies report segment information in annual financial statements and
also requires those companies to report selected segment information in
interim financial reports to stockholders. It also establishes standards
for related disclosures about products and services, geographic areas, and
major customers. Management believes the Company's operations comprise only
one segment and as such, adoption of SFAS No. 131 does not impact the
disclosures made in the Company's financial statements.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS - SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities, was issued in June 1998.
This statement establishes accounting and reporting standards for
derivative instruments and for hedging activities. It requires that an
entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair
value. This statement is effective for the Company's financial statements
for the year ended December 31, 2001 and the adoption of this standard is
not expected to have a material effect on the Company's financial
statements.

2. ACQUISITIONS:
------------

On May 9, 2000, Simtek Corporation acquired 100% of the outstanding stock
of Integrated Logic Systems Incorporated (ILSI) which designs and sells
metal gate array integrated circuits in Colorado Springs, Colorado for
common stock (3,000,000 shares) with a market value at the date of issuance
of $3.75 million. The acquisition was accounted for as a pooling of
interests, and the results of the ILSI business have been combined with
those of Simtek Corporation, as if the two businesses had been merged
throughout the periods presented.

The following is ILSI's operating results for the period from January 1,
2000 to May 9, 2000 which has been included in the Company's results of
operations for the year ending December 31, 2000:

Revenue $ 279,585
Expenses (233,763)
---------
Net $ 45,822
=========

On July 31, 2000, Simtek Corporation acquired 100% of the outstanding stock
of Macrotech Semiconductor, Inc. (Macrotech) which is involved in the
design, development and production of gate array integrated circuits and
related services in San Jose, California for common stock (1,250,000
shares) with a market value at the date of issuance of $1.76 million. The
acquisition was accounted for as a pooling of interests, and the results of
the Macrotech business have been combined with those of Simtek Corporation,
as if the two businesses had been merged throughout the periods presented.

F-9

SIMTEK CORPORATION

NOTES TO FINANCIAL STATEMENTS

The following is Macrotech's operating results for the period from January
1, 2000 to July 31, 2000 which has been included in the Company's results
of operations for the year ending December 31, 2000:

Revenue $ 291,835
Expenses (248,508)
-------------

Net $ 43,327
=============

Separate revenues and net income of the Company, Integrated Logic Systems
and Macrotech Semiconductors, Inc. are presented in the following table:

2000 1999
------------ ------------

Revenue:
Simtek Corporation $ 11,579,330 $ 6,992,388
ILSI 279,585 703,588
Macrotech 291,835 58,976
------------ ------------
Revenue, as reported $ 12,150,750 $ 7,754,952
============ ============

Net Income (Loss):
Simtek Corporation $ (3,467,975) $ 132,255
ILSI 45,822 (68,224)
Macrotech 43,327 (213,501)
------------ ------------
Net (loss) as reported $ (3,378,826) $ (149,470)
============ ============

3. EQUIPMENT AND FURNITURE:
-----------------------

Equipment and furniture at December 31, 2000 consists of the following:

Leased software under capital leases $ 255,573
Research and development equipment 1,343,157
Computer equipment and software 1,605,009
Office furniture 52,697
Other equipment 135,644
-----------
3,392,080
Less accumulated depreciation and amortization (2,645,017)
-----------

$ 747,063
===========

The cost of equipment and furniture acquired for research and development
activities that has alternative future use is capitalized and depreciated
over its estimated useful life.

F-10

SIMTEK CORPORATION

NOTES TO FINANCIAL STATEMENTS

Depreciation and amortization expense of $307,837 and $247,502 was charged
to operations for the years ended December 31, 2000 and 1999, respectively.
Included in the amortization expense for 2000 and 1999 was $51,120 and
$17,040, respectively, of amortization of software under capital leases. At
December 31, 2000, accumulated amortization for software under capital
leases was $68,160.

4. REVOLVING LINE-OF-CREDIT AND LETTER-OF-CREDIT:
---------------------------------------------

As of December 31, 2000, the Company had a $250,000 revolving
line-of-credit (LOC), a reduction of $100,000 since December 31, 1999. The
LOC bears interest at prime plus .75% (9.5% at December 31, 2000) and
matures in March 2001. The LOC is also collateralized by substantially all
assets of the Company. At December 31, 2000, the Company had no balance
outstanding.

The Company has a letter of credit arrangement with one of the Company's
suppliers which requires the Company to maintain a $300,000 certificate of
deposit as collateral, which is reflected as restricted cash.

5. CONVERTIBLE DEBENTURES:
----------------------

During June 1998, the Company received proceeds of $1,500,000 from the
issuance of convertible debentures (the "Debentures"). The Debentures are
convertible into shares of common stock of the Company. After a one-time
conversion price adjustment calculated pursuant to the original agreement,
the debentures conversion price changed from $.35 per share to $.195 per
share in May 1999. In February 2000, the entire $1,500,000 of convertible
debt was converted into 7,692,308 shares of common stock of the Company at
the conversion rate of $.195 per share.

6. COMMITMENTS:
-----------

OFFICES LEASES - The Company leases office space under a lease, which
expires on December 31, 2001. Monthly lease payments are approximately
$12,000 (not including CAM charges). The Company is moving to a larger
facility on March 1, 2001 where monthly lease payments will be
approximately $14,000. The new lease agreement requires the new landlord to
begin paying all costs related to the old location starting on March 1,
2001.

The Company leases furniture, equipment, and its office under operating
leases, which expire over the next seven years. Monthly lease payments,
including sales tax, are approximately $19,000.

F-11

SIMTEK CORPORATION

NOTES TO FINANCIAL STATEMENTS

Future minimum lease payments under the equipment, furniture and office
leases described above are approximately as follows:

Year
-----------------
2001 $ 204,972
2002 184,054
2003 191,172
2004 195,019
2005 & After 661,828
-----------

$ 1,437,045
===========

Office rent and equipment lease expense totaled $222,920 and $251,151 for
the years ended December 31, 2000 and 1999, respectively.

In addition, the Company leases research and development software under a
capital lease, which will expire over the next five years. At December 31,
1999, future minimum lease payments under the lease described above is
approximately as follows:

Year
------------
2001 $ 63,888
2002 63,888
2003 63,888
2004 47,916
---------
Total net minimum lease payments 239,580

Less amount representing interest (38,566)
---------

Present value of net minimum lease payments $ 201,014
=========

ACCRUED SALARY - Due to limited working capital of the Company, the
Company's former CFO agreed with the Company's Board of Directors to defer
his salary from April 1, 1994 through December 31, 1996. As of December 31,
2000, a total of $210,000 was accrued and unpaid.

7. SHAREHOLDERS' EQUITY:
--------------------

In February and March 2000, Renaissance Capital Group of Dallas, Texas
("Renaissance") converted the $1,500,000 debenture established in June 1998
into 7,692,308 shares of the Simtex Common Stock.

During April, 2000, ZMD converted $130,153 liability into 551,964 shares of
common stock of the Company.

F-12

SIMTEK CORPORATION

NOTES TO FINANCIAL STATEMENTS

During April, 2000, ZMD converted $130,153 liability into 551,964 shares of
common stock of the Company.

In May 2000, the Company acquired Integrated Logic Systems, Inc. ("ILSI").
Simtek issued 3,000,000 shares of its Common Stock in exchange for all
outstanding shares of all classes of ILSI stock. ILSI designs and sells
metal programmed gate array integrated circuits. The acquisition was
accounted for as a pooling of interest and the results of ILSI have been
consolidated with those of the Company, as if the two businesses had been
merged throughout the periods presented.

On June 16, 2000, the Company acquired 1,875,000 shares of the Common Stock
of Webgear, Inc., a California corporation ("Webgear"), in return for
1,250,000 shares of the Company's Common Stock. The shares of Webgear stock
that the Company acquired represented approximately 9% of Webgear's issued
and outstanding shares of Common Stock as of June 16, 2000. On June 16,
2000, the closing price for the Company's Common Stock was $1.3125 per
share. Webgear is engaged in the design, development, sales and support of
high technology networking and communications products for personal
computer market.

On July 31, 2000, the Company acquired Macrotech Semiconductor
("Macrotech"). The Company issued 1,250,000 shares of its Common Stock in
exchange for all outstanding shares of all classes of Macrotech stock.
Macrotech designs and sells metal programmable standard cells, which are an
extension of the metal programmed gate array integrated circuits that ILSI
manufactures. The acquisition was accounted for as a pooling of interest,
and the results of Macrotech have been consolidated with those of the
Company, as if the two businesses had been merged throughout the periods
presented.

On September 14, 2000, the Company entered into a one-year contract with
two investment bankers, E.B.M. Associates, Inc. and World Trade Partners,
pursuant to which each company received 500,000 shares of the Company's
common stock. Both companies will assist the Company in broadening its
financial market presence and establishing new relationships within the
industry, investment community and financial media. On September 14, 2000,
the closing share price for the Company's common stock was $1.0312 per
share and accordingly $1,031,200 has been assigned to prepaid investor
relations which will be amortized over the coming year, including
approximately $300,767, which was expensed during the period ending
December 31, 2000.

On September 29, 2000, the Company purchased incomplete research and
development, patents and certain trademarks from Webgear, Inc. The Company
issued 3,400,000 shares of its common stock and returned to Webgear the
1,875,000 shares of Webgear common stock that the Company acquired from
Webgear on June 16, 2000. On September 29, 2000, the closing price of the
Company's common stock was $0.8438 per share. Subsequently, in December,
the parties agreed to amend the shares issued by the Company to 2,900,000
shares of common stock. This resulted in a decrease in the fourth quarter
in the incomplete research and development expense of approximately
$422,000. The Company has valued the purchased patents and trademarks at
$125,000, which were capitalized and recorded as intangible assets. The
Company has valued the incomplete research and development acquired from
Webgear at $3,962,646 based upon an evaluation by an independent firm which
was expensed immediately.

STOCK OPTION PLANS - The Company has approved two stock option plans that
authorize an aggregate of 7,000,000 shares for stock options that may be
granted to directors, employees, and consultants. Subsequently, on January
2, 2001, the Company authorized an additional 2,000,000 shares that can be
issued under the stock option plans. The plans permit the issuance of
incentive and non-statutory options and provide for a minimum exercise
price equal to 100% of the fair market value of the Company's common stock

F-13

SIMTEK CORPORATION

NOTES TO FINANCIAL STATEMENTS

on the date of grant. The maximum term of options granted under the plans
is 10 years and options granted to employees expire three months after the
termination of employment. None of the options may be exercised during the
first six months of the option term. No options may be granted after 10
years from the adoption date of each plan. The Incentive Stock Option Plan
was adopted in 1991, and the Non-Qualified Stock Option Plan was adopted in
1994.

Following is a summary of activity under these stock option plans for the
years ended December 31, 2000 and 1999:

2000 1999
------------------------------ -------------------------------
Weighted Weighted
Average Average
Number Exercise Number Exercise
of Shares Price of Shares Price
------------- --------------- -------------- ---------------

Outstanding, beginning of year 4,182,486 $ .20 4,137,736 $ .19

Granted 1,036,750 .97 296,750 .17
Expired (81,000) (.17) (42,000) .15
Exercised (1,863,016) (.16) (210,000) (.16)
Canceled (137,498) (.37) - -
---------- ------- --------- -------

Outstanding, end of year 3,137,722 $ .47 4,182,486 $ .20
========== ======= ========= =======

All options granted during 2000 and 1999, were at the current market price
and the weighted average fair value was $.77 and .14, respectively. At
December 31, 2000, options for 2,226,979 shares were exercisable and of the
remaining options of 456,583, 327,250, and 126,910 shares will become
exercisable in 2001, 2002, and 2003, respectively.

If not previously exercised or forfeited, options outstanding at December
31, 2000, will expire as follows:
Weighted
Average
Number Exercise
Year Ending December 31, of Shares Price
------------------------------- ------------- -------------

2001 387,100 $ .14
2002 498,986 .14
2003 190,000 .17
2004 459,608 .33
2005 398,085 .37
2006 225,471 .17
2007 978,472 1.01
--------- ------
3,137,772 $ .47
========= ======

F-14

SIMTEK CORPORATION

NOTES TO FINANCIAL STATEMENTS

Pro Forma Stock-Based Compensation Disclosures - The Company applies APB
Opinion 25 and related interpretations in accounting for its stock options
and warrants which are granted to employees. Accordingly, no compensation
cost has been recognized for grants of options and warrants to employees
since the exercise prices were not less than the market value of the
Company's common stock on the grant dates. Had compensation cost been
determined based on the fair value at the grant dates for awards under
those plans consistent with the method of SFAS No. 123, the Company's net
income and EPS would have been reduced to the pro forma amounts indicated
below.

Year Ended December 31,
-----------------------------
2000 1999
------------ ------------

Net loss applicable to common shareholders:
As reported $(3,378,826) $ (149,470)
Pro forma (3,604,421) (272,062)

Net loss per common shareholders:
As reported - basic and diluted $ (.08) $ -
Pro forma - basic and diluted (.08) -

The fair value of each option granted in 2000 and 1999 was estimated on the
date of grant, using the Black-Scholes option-pricing model with the
following:

Options Granted During
----------------------------
2000 1999
----------- ------------

Expected volatility 127.0% 119.7%
Risk-free interest rate 5.5% 5.5%

Expected dividends - -

Expected terms (in years) 4.0 4.0

Other - Preferred Stock may be issued in such series and preferences as
determined by the Board of Directors.

8. SIGNIFICANT CONCENTRATION OF CREDIT RISK, MAJOR CUSTOMERS, AND OTHER RISKS
--------------------------------------------------------------------------
AND UNCERTAINTIES:
------------------

Sales to foreign customers and sales of military products for the years
ended December 31, 2000 and 1999 were as follows (as a percentage of
sales):

2000 1999
---- ----

Foreign customers 57% 53%
Military products sales 14% 29%

F-15

SIMTEK CORPORATION

NOTES TO FINANCIAL STATEMENTS

Sales to unaffiliated customers which represent 10% or more of the
Company's sales for the years ended December 31, 2000 and 1999 were as
follows (as a percentage of sales):

Customer 2000 1999
------------ ------------ ------------

A 20% 31%
B - 13%
C 16% -
D 11% -
E - 12%

At December 31, 2000, the Company had gross trade receivables totaling
$898,020 due from the above three customers.

In 2000 and 1999, the Company purchased all of its memory wafers, based on
0.8 micron technology from a single supplier located in Singapore.
Approximately 89% and 96% of the Company's memory sales for 2000 and 1999,
respectively, were from finished units produced from these wafers. The
Company had an agreement with this supplier to provide wafers, which
expired in September 1998. This agreement has not been extended or
terminated, however, this supplier still provides wafers to the Company. In
addition, the Company purchased all of its logic wafers from two suppliers
located in Singapore and Taiwan. Approximately 11% and 9% of its logic
sales in 2000 and 1999, respectively, were from finished units produced
from these wafers. The Company does not have an agreement with either
supplier, however, the Company has not seen any disruption in wafer
deliveries. In 1999, the Company also purchased finished units from ZMD for
$22,480, and sales from these products accounted for approximately 4% of
the Company's sales in 1999. Any disruptions in the Company's relationships
with these suppliers could have an adverse impact on the Company's
operating results. Assuming an alternate manufacturer of the Company's
products could be procured, management believes there could be significant
delays in manufacturing while the manufacturer incorporates the Company's
products and processes.

F-16

SIMTEK CORPORATION

NOTES TO FINANCIAL STATEMENTS

9. TAXES:
-----

Under SFAS No. 109, deferred taxes result from temporary differences
between the financial statement carrying amounts and the tax bases of
assets and liabilities. The components of deferred taxes are as follows:

Deferred Tax
Assets (Liability)
------------------

Current:
Allowance for doubtful accounts $ 3,000
Inventory reserve 36,000
Accrued expenses 276,000
------------
Net current deferred tax before valuation allowance 315,000
Valuation allowance (315,000)
------------
Total current deferred tax $ -
============

Non-Current:
Property and equipment $ 205,000
Incomplete research and development 1,431,000
Net operating losses 10,126,000
R&D credit carryforward 1,200,000
AMT credit 8,000
------------
Net non-current deferred tax asset before valuation allowance 12,970,000
Valuation allowance (12,970,000)
------------
Total non-current deferred tax asset $ -
============

The net current and non-current deferred tax assets have a 100% valuation
allowance resulting from the inability to predict sufficient future taxable
income to utilize the assets. The valuation allowance for 2000 increased
$91,000 and decreased $219,000 in 1999.

At December 31, 2000, the Company has approximately $27,000,000 available
in net operating loss carryforwards which begin to expire from 2004 to
2015. As a result of certain non-qualified stock options which have been
exercised, approximately $3,200,000 of the net operating loss carryforward
will be charged to "paid in capital," when, and if, the losses are
utilized. Also, a substantial portion of the net operating loss may be
subject to Internal Revenue Code Section 382 limitations.

Total income tax expense for 2000 and 1999 differed from the amounts
computed by applying the U.S. Federal statutory tax rates to pre-tax income
as follows:

1999 1998
-------- --------

Statutory rate (34.0)% (34.0)%
State income taxes, net of Federal income tax benefit (3.3)% (3.3)%
Increase (reduction) in valuation allowance related to of net operating
loss carryforwards and change in temporary differences 37.3% 37.3%
------- -------
$ - $ -
======= =======

F-17

SIMTEK CORPORATION

NOTES TO FINANCIAL STATEMENTS

10. SUBSEQUENT EVENTS (UNAUDITED):
-----------------------------

On December 6, 2000, the Company signed a letter of intent to acquire Q-DOT
Group, Inc. ("Q-DOT"). The acquisition was completed in March 2001. All
outstanding shares of Q-DOT Group, Inc. were exchanged for approximately
5,200,000 shares of the Company's common stock, valued at $4,000,000. Q-DOT
specializes in advanced technology research and development for data
acquisition, signal processing, imaging and data communications. Q-DOT's
projects have been supported by conventional government and commercial
contracts in addition to Small Business Innovation Research (SBIR)
contracts. Q-DOT will be operated as a wholly owned subsidiary of Simtek
for its government contract research and development operations. The
acquisition will be accounted for as a pooling of interest, and the results
of Q-DOT will be combined with the Company in future financials.

The following pro forma results of operations are for the Company and Q-DOT
as if the merger had taken place on January 1, 2000:

Year Ended
December 31,
2000
---------------

Revenues $14,512,814
===========
Net Income (loss) $(3,313,408)
===========
Income (loss) per share $ (.07)
===========
Weighted average shares outstanding 48,365,436
===========

F-18

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 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Article Six of our Articles of Incorporation requires us 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 our director or officer or is or was serving at
our request as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise.

Article Five of our Articles of Incorporation provides that, to the fullest
extent permitted by the Colorado Corporation Code, our directors shall not be
liable to us or any of our 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 test.

Item 25. 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.............. $ 268
Legal fees and expenses ...................................... 3,000
Accounting fees.................................................. 2,500
Miscellaneous.................................................... 2,500
-----

Total................................................... $8,268
======

The above expenses will be borne by us.

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES

In May 2000, we issued 3,000,000 shares of our common stock to Hugh Norman
Chapman as consideration for our acquisition of 100% of the issued and
outstanding stock of Integrated.

In June 2000, we issued 1,250,000 shares of our common stock to WebGear, as
consideration for our acquisition of 1,250,000 shares of WebGear common stock.
In September, we issued 2,900,000 shares of our common stock to WebGear as
consideration, together with 1,250,000 shares of WebGear common stock, for our
acquisition of certain intellectual property assets of WebGear.

In July 2000, we issued 625,000 shares of our common stock to each of
Jaskarn Johal and Kashmira S. Johal as consideration for our acquisition of 100%
of the stock of Macrotech.

In September 2000, we issued 500,000 shares of our common stock to each of
E.B.M. Associates, Inc. and World Trade Partners in consideration for their
agreement to provide certain financial advisory services.

The issuances described above were deemed to be exempt from registration
under the Securities Act of 1933, as amended (the "Act"), in reliance on Section
4(2) of the Act as transactions by an issuer not involving a public offering.
With respect to our acquisition of Q-DOT, we issued stock in reliance upon Rule
506 of Regulation D.

II-1

EXHIBITS

3.1 Amended and Restated Articles of Incorporation.(2)
3.2 Amended and Restated Articles of Incorporation November 1997.(7)
3.3 Bylaws.(2)
4.1 1987-I Employee Restricted Stock Plan.(1)
4.2 Form of Restricted Stock Agreement between the Company and
Participating Employees.(1)
4.3 Form of Common Stock Certificate.(3)
4.4 Simtek Corporation 1991 Stock Option Plan.(4)
4.5 Form of Incentive Stock Option Agreement between the Company and
Eligible Employees.(4)
4.6 1994 Non-Qualified Stock Option Plan.(5 )
4.7 Amendment to the 1994 Non-Qualified Stock Option Plan.(6)
10.1 Form of Non-Competition and Non-Solicitation Agreement between the
Company and certain of its employees.(1)
10.2 Form of Employee Invention and Patent Agreement between the
Company and certain of its employees.(1)
10.3 Product License Development and Support Agreement between Simtek
Corporation and Zentrum Mikroelektronik Dresden GmbH dated June 1,
1994(5)
10.4 Cooperation Agreement between Simtek Corporation and Zentrum
Mikroelektronik Dresden GmbH dated September 14, 1995(6)
10.5 Manufacturing Agreement between Chartered Semiconductor
Manufacturing, PTE, LTD. and Simtek Corporation dated September
16, 1992(6)
10.6 Employment agreement between the Simtek Corporation and Douglas M.
Mitchell(8)
10.7 Share Exchange Agreement dated May 9, 2000 between Simtek
Corporation and Hugh N. Chapman(9)
10.8 Share Exchange Agreement dated June 16, 2000 between Simtek
Corporation and WebGear Inc.(9)
10.9 Share Exchange Agreement dated July 31, 2000 between Simtek
Corporation and Jaskarn Johal and Kashmira S. Johal (10)
10.10 Asset Purchase Agreement between Simtek Corporation and WebGear,
Inc. (11)
10.11 Amendment to Asset Purchase Agreement between Simtek Corporation
and WebGear, Inc. (12)
10.12 Agreement and Plan of Merger among Simtek Corporation, Q-DOT
Group, Inc. and Q-DOT, Inc. (13)
23.1 Consent of Hein + Associates LLP

----------------
(1) Incorporated by reference to the Company's Form S-1 Registration
Statement (Reg. No. 33-37874) filed with the Commission on November 19,
1990.
(2) Incorporated by reference to the Company's Amendment No.1 to Form S-1
Registration Statement (Reg. No. 33- 37874) filed with the Commission on
February 4, 1991.
(3) 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.
(4) Incorporated by reference to the Company's Form S-1 Registration
Statement (Reg. No. 33-46225) filed with the Commission on March 6, 1992.
(5) Incorporated by reference to the Company's Annual Report on Form 10-K
filed with the Commission on March 25, 1995
(6) Incorporated by reference to the Company's Annual Report on Form 10-K
filed with the Commission on March 27, 1996
(7) Incorporated by reference to the Company's Annual Report on Form 10-K
filed with the Commission on March 24, 1998
(8) Incorporated by reference to the Company's Annual Report on Form 10-KSB
filed with the Commission on March 12, 1999
(9) Incorporated by reference to the Form SB-2 Registration Statement (Reg.
No. 333-40988( filed with the Commission on July 7, 2000
(10) Incorporated by reference to the Form 8-K filed with the Commission on
August 14, 2000
(11) Incorporated by reference to the Form 8-K filed with the Commission on
October 13, 2000
(12) Incorporated by reference to the Company's Amendment No. 2 to From SB-2
Registration Statement (Reg. No. 333- 40988)
(13) Incorporated by reference to the Company's Form 8-K filed with the March
23, 2001

II-2

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment to the 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 7th day of May 2001.

Simtek Corporation
a Colorado corporation

By: /s/Douglas M. Mitchell
--------------------------------------
Douglas M. Mitchell
Chief Executive Officer and President

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has caused this Amendment to the Registration Statement to be signed by the
following persons in the capacities on May 7, 2001.

SIGNATURE TITLE

/s/ Douglas M. Mitchell Director, Chief Executive Officer,
-------------------------------- President and Chief Financial Officer
Douglas M. Mitchell (acting)

/s/ Robert H. Keeley Director
--------------------------------
Robert H. Keeley

/s/ John Heightley Director
--------------------------------
John Heightley

/s/ Klaus Wiemer Director
--------------------------------
Klaus Wiemer

/s/ Harold Blomquist Director
--------------------------------
Harold Blomquist

II-3