FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

(Mark One)

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the Fiscal Year Ended:  September 30, 1995
                            ------------------

                                       OR

[  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from ________________ to ________________

                         Commission File Number: 0-11412
                                                 -------


                              AMTECH SYSTEMS, INC.
--------------------------------------------------------------------------------
             (exact name of Registrant as specified in its charter)

         Arizona                                                 86-0411215
--------------------------------------------------------------------------------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

131 South Clark Drive, Tempe, Arizona                                   85281
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                              (Zip Code)

Registrant's telephone number, including area code:     602-967-5146
                                                    ---------------------

Securities registered pursuant to Section 12(b) of the Act:     None
                                                            -------------

Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $.01 Par Value
--------------------------------------------------------------------------------
                                (Title of Class)

                            Redeemable Public Warrant
--------------------------------------------------------------------------------
                                (Title of Class)


<PAGE>


         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the  preceding  twelve (12) months (or for such shorter  period that
the Registrant  was required to file such reports),  and (2) has been subject to
such filing requirements for the past ninety (90) days.

                                 [X] Yes [ ] No

         Indicate by check mark, if disclosure of delinquent  filers pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the  best of  registrant's  knowledge  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K.

                                 [ ] Yes [X] No

         State  the  aggregate   market  value  of  the  voting  stock  held  by
nonaffiliates of the Registrant. The aggregate market value shall be computed by
reference to the price at which the stock was sold, or the average bid and asked
prices of such stock, as of a specified date within sixty (60) days prior to the
date of filing. (See definition of affiliate in Rule 405, 17 CFR 230.405).

                       $15,804,706 as of December 8, 1995

              APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
                PROCEEDINGS DURING THE PRECEDING FIVE (5) YEARS:

         Indicate by check mark whether the  Registrant  has filed all documents
and reports  required  to be filed by Section 12, 13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.

                                 [ ] Yes [ ] No

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

         Indicate the number of shares  outstanding of each of the  Registrant's
classes of Common Stock, as of the latest practicable date.

         2,152,851  shares of Common Stock,  $.01 par value,  as of December 22,
1995. There is only one class of common stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

         Listed  hereunder the following  documents if incorporated by reference
and the Part of the Form 10-K  (e.g.,  Part I,  Part II,  etc.)  into  which the
document is incorporated:  (i) any annual report to security  holders;  (ii) any
proxy or information statement;  and (iii) any prospectus filed pursuant to Rule
424(b) or (c) under the Securities Act of 1933. The listed  documents  should be
clearly described for identification  purposes (e.g.,  annual report to security
holders for fiscal year ended September 30, 1995).

         PART III (Items 10-13) is incorporated by reference to the Registrant's
proxy statement for the  Registrant's  Annual Meeting of Shareholders to be held
on or about February 29, 1996.



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<PAGE>



                                TABLE OF CONTENTS

                                                                            Page

ITEM 1.       BUSINESS ........................................................5

              GENERAL DEVELOPMENT OF BUSINESS .................................5

              SEMICONDUCTOR EQUIPMENT BUSINESS ................................5
                  General .....................................................5
                  Existing Products ...........................................6
                  Proposed New Product ........................................9
                  Order Backlog ..............................................12
                  Manufacturing ..............................................12
                  Engineering-Research and Development .......................12
                  Patents ....................................................13
                  Marketing ..................................................14
                  Competition ................................................15
                  Employees ..................................................16
                  
              TECHNICAL CONTRACT PERSONNEL BUSINESS ..........................16
                  General ....................................................16
                  Source and Availability of Contract Personnel ..............17
                  Marketing and Customers ....................................18
                  Seasonality ................................................18
                  Competition ................................................18
                  Overhead Personnel .........................................19
                  Future Plans ...............................................19

              FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC
              OPERATIONS AND EXPORT SALES ....................................20

ITEM 2.       PROPERTIES......................................................20

ITEM 3.       LEGAL PROCEEDINGS ..............................................21

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ............21

ITEM 5.       MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED
              STOCKHOLDERS' MATTERS ..........................................22

              Market Information .............................................22
              Holders ........................................................22
              Dividends ......................................................22



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                                                                            Page

ITEM 6.       SELECTED FINANCIAL DATA ........................................23

ITEM 7.       MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS ............................25

              Liquidity and Capital Resources ................................25

              Results of Operations ..........................................26

                  Fiscal 1995 compared to Fiscal 1994 ........................26
                       Semiconductor Equipment Business ......................26
                       Income From Continuing Operations......................27
                       Discontinued Technical Contract Personnel Business ....28
                       Total Company .........................................29

                  Fiscal 1994 compared to Fiscal 1993 ........................30
                       Semiconductor Equipment Business ......................30
                       Income From Continuing Operations......................31
                       Discontinued Technical Contract Personnel Business ....31
                       Total Company .........................................32

ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ....................33

ITEM 9.       DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE ...........34

ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT .............35

ITEM 11.      MANAGEMENT REMUNERATION ........................................35

ITEM 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
              MANAGEMENT .....................................................35

ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS .................35

ITEM 14.      EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
              FORM 8-K .......................................................36

SIGNATURES ...................................................................39




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<PAGE>



                                     PART I

ITEM 1.    BUSINESS

                         GENERAL DEVELOPMENT OF BUSINESS

         Amtech Systems,  Inc.  (hereinafter the "Company" or the  "Registrant")
was incorporated in Arizona in October,  1981, under the name Quartz Engineering
& Materials, Inc., and changed to its present name during 1987. At its inception
the  Company's  business  was  the  manufacture  of  low  technology  quartzware
implements for sale to and use by  manufacturers  of  semiconductor  chips.  The
Company  is  currently,  and has  been  since  1987,  engaged  primarily  in the
manufacture  of several  items of capital  equipment,  one of which is patented,
used by customers in the manufacture of semiconductors. The Company has recently
obtained a U.S.  patent on technology on which it expects to base a proposed new
photo  chemical  vapor  deposition  ("CVD")  product  for  use in  semiconductor
manufacturing facilities.  The Company has engaged the University of California,
Santa Cruz, to conduct a study to determine the  feasibility  of such a product.
If the results of the study are  favorable,  the Company  intends to commence to
design,  manufacture and market a photo CVD product. See Semiconductor Equipment
Business, below.

         Until recently,  the Company also was engaged in the technical contract
personnel business through a subsidiary,  Echelon Service Company ("Echelon") in
Baltimore,  Maryland.  In October  1995,  the Board of  Directors of the Company
determined  to dispose of the stock of Echelon in order to allow the  Company to
focus on its core semiconductor  equipment business. The Company has executed an
agreement  with  Eugene  R.  Hartman,  Vice  President  of the  Company  and the
President  of  Echelon,  to sell all of the stock of Echelon  to Mr.  Hartman in
exchange  for  98,016  shares of Amtech  Common  Stock held by Mr.  Hartman  and
additional cash consideration. See Technical Contract Personnel Business, below.

         Revenues  of the  semiconductor  equipment  business  were 60% of total
revenues  in fiscal  1995 and  generated  81% of the total  gross  profit  while
revenues for the technical contract personnel business were 40% of the Company's
total revenues and generated 19% of its gross profit.  See Item 7,  Management's
Discussion and Analysis of Financial Condition and Results of Operations, below.

         The Company is dependent  for its  management  and  important  business
relationships on the active participation of its President,  Mr. J. S. Whang and
for general  management  of the  technical  contract  personnel  business on the
services of Mr.  Eugene R.  Hartman,  a Vice  President of the Company and Chief
Operating Officer of the technical contract personnel business.

                        SEMICONDUCTOR EQUIPMENT BUSINESS

General

         The Company is engaged  primarily in the  manufacture  and marketing of
several  items of capital  equipment  used by  customers in the  manufacture  of
semiconductors.  Semiconductors,  


                                        5

<PAGE>


or  semiconductor  "chips," are made of silicon and are part of the circuitry of
electronic computers. Their manufacture involves complex operations during which
silicon  wafers (the  substrates  from which  chips are made) are  inserted in a
diffusion  furnace and subjected to the precise flow of gases under very intense
heat.  The  Company's  products are intended to permit its customers to increase
the degree of control over the manufacturing  environment and to reduce exposure
to  contaminants  by reducing  the amount of human  contact  during the process.
Following an industry trend, the size of individual chips has tended to decrease
and the size of the wafers from which chips are made has tended to increase.  As
a result, the value of each wafer has increased because each is the source of an
increased  number of chips.  As the  value of wafers  increase,  so too does the
importance of control over the manufacturing environment.

         There is also a trend in the industry,  related to the trend to smaller
chips,  to the  use in  new  semiconductor  manufacturing  facilities  of  newer
technology,  vertical diffusion  furnaces,  which are more efficient to use than
older  technology   horizontal  diffusion  furnaces  in  certain   manufacturing
processes of smaller chips on larger wafers.  Vertical  diffusion  furnaces are,
however,  significantly  more  expensive to purchase than  horizontal  diffusion
furnaces.  The Company's products are useable with horizontal diffusion furnaces
only. The Company's target market consists of customers who wish to increase the
efficiency of their existing  semiconductor  manufacturing  facilities  equipped
with horizontal  diffusion  systems.  The Company's  target market also includes
customers  who build new  facilities  but whose  operations  do not  require the
higher priced vertical  diffusion furnace systems.  Based on market  information
obtained  through  customer  and market  contacts,  the  Company  believes  that
approximately 70% to 80% of worldwide semiconductor manufacturing facilities are
equipped  with  horizontal  diffusion  furnaces  and  20% to 30%  with  vertical
diffusion furnaces. While the Company estimates that over a five-year period the
percentage  of  facilities  in the world  equipped with each type of system will
become equal, it believes that a significant demand for its present product line
will continue to exist during that period, although there can be no assurance in
that regard.  The Company plans to increase its share of the market by expanding
its product line through the manufacture of horizontal diffusion furnaces,  thus
adding to the number and variety of the  Company's  products and  expanding  its
sales,  marketing and  manufacturing in Europe.  The expanded  manufacturing and
sales operations are located at a leased facility in Hoogeveen,  Netherlands. As
further  described  herein,  these  changes are  expected to result in increased
worldwide sales of the Company's existing products as well as increasing revenue
through sales of its proposed new furnace line.

         The Company  recently  obtained a U.S. patent on technology on which it
expects  to  base  a  proposed  new   photo-assisted  CVD  product  for  use  in
semiconductor  manufacturing  facilities,  including  those  equipped  with both
vertical  and/or  horizontal  diffusion  furnaces.  The  Company has engaged the
University  of  California,  Santa  Cruz,  to conduct a study to  determine  the
feasibility of such a product.  If the results of the study are  favorable,  the
Company intends to design, manufacture and market a photo-assisted CVD product.

         The semiconductor  equipment business produced approximately 60% of the
Company's  total  revenues,  81% of its gross  profits and 80% of the  operating
profits for fiscal year 1995. During fiscal year 1995,  approximately 62% of the
semiconductor  equipment  segment's  revenues  were derived from the sale of new
systems,  including  upgrades and  retrofits of  previously  sold  


                                        6

<PAGE>




systems. The remainder of semiconductor  equipment revenues  (approximately 38%)
was derived from the sale of replacement parts and ancillary items.

Existing Products

Atmoscan(R)

         The Company's  "Atmoscan(R)" is a patented controlled environment wafer
processing system for use with horizontal diffusion furnaces. It is comprised of
a flanged quartz tube and several metal parts.  When in use, the flanged tube is
loaded with wafers and  inserted  into the  diffusion  furnace  under a nitrogen
controlled  environment.  The technology protected by the Company's  Atmoscan(R)
patents is a  processing  method that  includes a  cantilever  tube that carries
wafers  and  through  which a purging  inert gas flows  during the  loading  and
unloading of wafers into and out of the diffusion furnace.

         The Company  believes that among the major  advantages  afforded by the
Atmoscan(R)  product  are  increased  control of the  environment  of the wafers
during the gaseous and heating process, thereby increasing yields and decreasing
manufacturing  costs, and a decreased need for the cleaning of diffusion furnace
tubes, which ordinarily  involves  substantial  expense and equipment down time.
Additional  significant economies in the manufacturing process are also believed
to result.

         The  Company  has  manufactured  and  sold  Atmoscan(R)  units to major
semiconductor  manufacturers  in the United States,  the Pacific Rim and Europe,
including  at  various  times  to   International   Business   Machines,   Intel
Corporation,  Samsung,  Digital  Equipment  Corp.,  Motorola,  SGS-Thompson  and
others.  During  fiscal  1995,  Atmoscan(R)  units were sold in a price range of
approximately  $26,000  (for simpler  models  without  accessories  or ancillary
items)  to  approximately  $70,000  (for  more  complex  models).  As  discussed
elsewhere, sales of Atmoscan(R) have declined from their peak in 1989, due to an
industry trend toward use of vertical diffusion furnaces.

         The Company has designed and sells an open cantilever  paddle system as
an alternative to the closed processing method of the Atmoscan(R).  The per unit
price  is   approximately   $13,000-$18,000,   depending   upon  the  customer's
specifications.

IBAL

         "IBAL" is an acronym for  "Individual  Boats with  Automated  Loading."
Boats are quartz trays that hold silicon  wafers while they are being  processed
in diffusion furnaces. IBAL is a device, including software, which automatically
places boats into Atmoscan(R)  tubes or on open cantilever paddle systems before
they are inserted in the diffusion furnace and  automatically  removes the trays
after  completion  of the  process.  The  Company has sold units of the IBAL for
approximately   $20,000  to  $25,000  each,  not  including  the  price  of  the
Atmoscan(R) or open cantilever  paddle system.  Use of the IBAL products reduces
human handling and, therefore, reduces exposure of wafers to contaminants during
the loading and unloading of the process tubes.


                                        7

<PAGE>



         The IBAL  Butler is a  robotics  device  which  further  automates  the
loading of wafers into the diffusion furnace by automatically transferring wafer
carriers  onto the IBAL for loading  into the  Atmoscan(R)  for the  appropriate
furnace tube. The unit price for the IBAL Butler is approximately  $40,000 or on
the open cantilever paddle.

         The IBAL Queue  provides a convenient  staging area for the operator to
place boats on a load station and  automates the loading of those boats onto the
IBAL Butler.  IBAL Queue was first  developed and offered for sale in the fourth
quarter of 1993 and the first  unit was  shipped  during  the second  quarter of
fiscal 1994. The unit price for the IBAL Queue is $27,000.

Load Stations

         The  products  described  above are  offered  and  sometimes  sold as a
complete  system,  mounted  on a device  called  a "load  station,"  which  also
includes  an  ultra-clean   environment  for  wafer  loading  by  filtering  and
controlling  the flow of air. The Company began shipping load stations in fiscal
1992.  The price for the load  station  alone (in  addition to the price for the
component systems described above) is approximately $60,000,  depending upon the
complexity  of a  customer's  requirements.  Depending on  configuration,  which
varies  from  order to order,  complete  load  stations  with  loaders  and IBAL
automation have been sold at prices between $150,000 and $320,000.

Diffusion Furnaces

         The Company offers horizontal  diffusion  furnaces  utilizing  existing
industry  technology  for sale to  customers  who do not  require  the  advanced
automation  of,  or  cannot  incur  the major  expense  of  acquiring,  vertical
diffusion furnaces.  While the major advantage of vertical diffusion furnaces is
their  susceptibility  to increased  automation,  which  decreases the degree of
human intervention in the manufacturing process, the use of horizontal diffusion
furnaces,  with less  automation,  is more  economical for larger size chips and
multi-model  semiconductor  manufacturing.   While  overall  market  demand  for
horizontal  diffusion  furnaces is declining,  the Company believes that a niche
market will  persist.  As of the date of this  Report,  the Company has sold six
furnaces.

         The  Company has  transitioned  from being a  purchaser  of  horizontal
diffusion furnaces substantially assembled by suppliers to being a manufacturer.
The  Company  continues  to acquire  the frames  and  covers for  furnaces  from
subcontractors.  This  transition is being pursued as part of a plan to increase
both the number and variety of products offered by the Company and to expand its
sales,  marketing  and  manufacturing  capabilities.  The Company  has  expended
approximately $1 million in cash in the acquisition of certain assets useable in
the manufacture and sale of horizontal diffusion furnaces and ancillary items to
fund the start-up  and  operation of an expanded  horizontal  diffusion  furnace
business using such assets.  Those assets  include items  purchased from another
company which had previously acquired the entire business of a bankrupt company,
Tempress  B.V.,   located  in  the  Netherlands.   That  business  involved  the
development, manufacture and sale of a number of different products, including a
horizontal diffusion furnace. The Company also acquired from the bankrupt estate
the right to use the trade name "Tempress" in connection with such furnaces. The
right to use the  tradename  "Tempress"  is also held by three  subsidiaries  of
Tempress in  connection  with the sale of other  


                                        8

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Tempress products and services  unrelated to the horizontal  diffusion  furnace.
The Company has hired a number of former Tempress  technical and sales personnel
to design,  manufacture  and sell its own furnace  products under the "Tempress"
name.  The Company  believes  that the causes of the  Tempress  bankruptcy  were
related  to  the  fact  that  Tempress  was   undercapitalized  and  that  large
expenditures  were incurred in the  development of other  products,  and was not
related to the quality or reputation of the Tempress products.  Accordingly, the
Company  believes that a diffusion  furnace product  designed by former Tempress
product  engineers  and sold under the  "Tempress"  name will be accepted by the
Company's  targeted  market.  See  Engineering  - Research and  Development  and
Marketing, below.

         There is, of course,  no assurance of success in the Company's  efforts
to design and market horizontal  diffusion  furnace  products.  If the Company's
efforts do not succeed,  the Company may suffer significant losses. The expanded
manufacturing  and sales  operations  are  expected  to be  located  at a leased
facility in Hoogeveen,  Netherlands. The Company's ability to carry out its plan
is subject to risk,  arising in part from the cyclical  nature of the  business.
There is a further risk that,  as is  estimated by at least one market  research
firm, the  installation  of new vertical  diffusion  furnaces will increase at a
faster rate than is estimated by the Company.  In that case,  the demand for and
sales of the Company's  horizontal diffusion furnaces may be below the Company's
estimates,  its revenue and  possible  earnings may not increase as expected and
the period of start-up  losses for the  Netherlands  operation  may extend for a
period longer than the first year.

Proposed New Products

CVD Technology

         The Company has patented a certain  invention  which it believes may be
of significant importance to the semiconductor manufacturing industry. It is now
having a research  study  conducted to determine the  feasibility  of developing
semiconductor   manufacturing  equipment  using  this  patented  invention.  The
invention  relates to an improvement to the  photo-assisted  CVD process used in
the  manufacture of certain  semiconductors.  The improvement  uses  ultraviolet
light to activate the deposition  reactions rather than heat, which is presently
the common means in commercial CVD processing.  This  photo-assisted CVD process
is separate  and  distinct  from the  diffusion  process in which the  Company's
existing  products are used and its use is not limited to  horizontal  diffusion
furnace facilities as are the Company's existing products.

         A  photo-assisted  CVD  process  is  potentially   attractive  for  the
manufacture  of  semiconductors  because  it  allows  a less  severe  processing
environment. First, the photo-assisted CVD processes occur at lower temperatures
and  the  lower  temperature  reduces  the  risk  of  defects  in the  deposited
materials. In this process, ultraviolet or UV light is used as the energy source
to effect the  deposition  of chemicals on the wafers.  The  photo-assisted  CVD
processes also avoid radiation  damage which can occur with currently  prevalent
processes.  Furthermore,  photo-assisted  CVD  processes  based on the Company's
patented  method are more  readily  adaptable  to the use of larger  wafers (the
silicon  substrates  from  which  semiconductor  chips are made)  than other CVD
processes  now in use.  The trend in the  industry  is to the use of larger size
wafers and smaller size chips.

                                        9

<PAGE>


         At present,  photo-assisted  CVD  processes are not widely used because
the optical windows  through which the UV light is introduced  become covered by
the same material  that is deposited on the  substrates.  The window  deposition
results in  absorption  of the UV light  before the light can  activate  further
deposition  on the  substrates.  The window  deposition  may also  significantly
degrade the uniformity of thickness of the deposited material.  Although various
other  patented  techniques  have been used to alleviate or remedy this problem,
none of them is believed by the Company to be satisfactory.

         UV lights  currently  available are not  sufficiently  intense for high
through-put manufacturing.  While the Company's technology will not solve the UV
light  intensity  problem,  the  second  phase  of the  feasibility  study  will
investigate  available  higher  intensity  light sources.  The  development of a
higher  intensity UV light may  increase  the market for the  product,  and such
development may be attempted by the Company.

         The  concept  of  the  Company's  invention  is  to  use a  battery  of
individually  controllable  UV lamps,  each embedded in an elongated pipe (light
pipe)  with  its  own  window.   The  technology   protected  by  the  Company's
photo-assisted CVD patents is described as a processing method that includes the
introduction  of inert purging gas into the base of each light pipe opening with
sufficient  velocity to flow against  reactant gas molecules (which are intended
to be  deposited  on the  wafers)  and  prevent  them  from  reaching  and being
deposited on the window or the lamps, thus avoiding clouding.

         The Company has not determined whether a commercially  feasible product
can be developed from this  technology.  The Company has entered into a Research
Agreement  with the  Regents  of the  University  of  California  ("University")
whereunder a feasibility  study is being  undertaken by the University under the
direction of Roger W. Anderson,  Ph.D. The study commenced on or about March 14,
1994 and has proven that the Company's patented photo-assisted CVD method solves
the window deposition problem.  The study has been extended to February 28, 1996
to confirm the deposition  rate and the commercial  feasibility of the Company's
potential method.

         The total  cost of the study to the  Company  is fixed at  $441,620  of
which  $355,405  was paid in fiscal  1994.  The  University  is to  provide  all
necessary  facilities.  Necessary equipment not on hand will be purchased by the
University  out of the  Company's  payment.  The  equipment so purchased and the
product  prototype,  if  successfully  developed,  will remain the  University's
property  subject  to the  Company's  rights to  certain  intellectual  property
developed from the study and the right to reasonable access to the equipment and
the prototype for customer and other demonstrations.  The Company will reimburse
the   University   the  cost  of  chemicals   and  supplies   consumed  in  such
demonstrations.

         The University has agreed for a period of three years to protect as the
Company's  confidential  information  all  information,  techniques  and methods
developed  through  the study that are  related to the  development,  design and
construction  of the  photo-assisted  CVD prototype  except for (i)  information
which is or  becomes  common  knowledge  other  than  through  a  breach  of the
agreement,  (ii)  information  as to the  results  of the study  which  does not
disclose the methods  whereby the results were achieved,  and (iii)  information
required  to be  disclosed  by law.  The  University  has the  right to  publish
information of general  scientific and academic 


                                       10

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interest without disclosing any confidential  information and a copy of any such
publication  is to be furnished to the Company in advance to assure against such
disclosure.

         Any new inventions developed out of the study should be the property of
the party whose  employee is the  inventor.  Each party shall have an  undivided
interest in any invention made jointly by employees of both parties.

         It is  acknowledged  in the agreement that the  University  also claims
rights  in   certain   pre-existing   intellectual   property   related  to  the
photo-assisted  CVD process.  While it is understood that the Company's patented
technology  is to be the primary  focus of the study,  it is  contemplated  that
inventions  based on the  University's  claims may result from the study. If so,
the  Company  will  have a  period  of 90  days  after  disclosure  to it by the
University  of such an  invention  in which to elect  to  obtain  an  exclusive,
royalty-bearing  license to make, use and sell any such invention first actually
reduced to practice in the  performance  of the study.  If the Company elects to
obtain such a license,  it will assume all costs of  obtaining  and  maintaining
patent protection  whether or not a patent is actually issued.  The parties will
then negotiate in good faith as to the terms of such a license and if no license
agreement is concluded  within 120 days of the date the Company elects to obtain
such a license,  the Company will no longer have any rights with respect to such
inventions.  The parties  have  agreed  that the royalty  payable by the Company
under any such license shall be one-half of one percent  (0.5%) of the net sales
of  products  based  on a  University  patent  which  is an  improvement  to the
Company's  patent and  between 2% and 4% on the net sales of  products  based on
other University inventions.  In the case of joint inventions,  the royalty rate
is to reflect the relative  contribution  of the parties to the  development  of
such inventions.

         The  agreement  expires on February  28,  1996.  The  agreement  may be
terminated  by  either  party if Dr.  Anderson  becomes  unwilling  or unable to
continue the study and a mutually  acceptable  substitute is not available or at
any time by the Company upon 30 days prior written notice to the University.

         It is  anticipated  that,  if the results of the  University  study are
favorable,  the Company  will design and develop  specifications  for an initial
photo-assisted   CVD  device.  The  initial  device  is  expected  to  have  one
"chamber,"containing a number of light pipes and a pedestal (called a susceptor)
to hold wafers and would be sold to academic and industry  research  facilities.
If, as expected by the Company,  use by such facilities results in acceptance of
the  technology  by the  industry,  the Company  will attempt to develop a fully
automatic   multi-chamber,   multi-wafer   product   for  mass   production   of
semiconductors.  The  automation  (or  robotic)  components  of the  product are
expected to be procured from other manufacturers.

         The Company's  current plans for the proposed new photo CVD product are
conceptual  only.  Detailed  planning is expected to be done if, as and when the
University  study  demonstrates  the  product's  commercial   feasibility.   The
development  of first a  research  laboratory  product  and  then an  industrial
product is expected to take a period of approximately two to three years.


                                       11

<PAGE>


          The total cost of the photo-assisted CVD product development effort is
expected to be approximately $3,200,000,  expended in stages over a two to three
year period. All of the Company's plans and estimates are subject to significant
uncertainties.

Wafer Reclaiming Venture

         In November  1995, the Company  entered into a joint venture  agreement
pursuant to which it acquired a 45% ownership interest and a 50% voting interest
in Seil Semicon,  Inc. Seil Semicon,  Inc., which is in the preliminary start-up
phase intends to develop and operate a silicon test wafer  reclaiming  business.
The Company agreed to invest $500,000 in the venture, $250,000 of which was paid
in November 1995 and the remainder of which will be due at the time Seil Semicon
obtains $3 million in third party  financing.  Seil  Semicon has  acquired  real
property for construction of  the reclamation  facility. The ultimate success of
the  venture  depends  on a  number  of  factors,  including  securing  adequate
financing, of which there can be no assurance.

Order Backlog

         As of November 30, 1995, the Company's order backlog for  semiconductor
equipment was approximately  $4,980,000 compared to approximately  $2,187,000 at
the same date in the  previous  year.  The  Company  includes in its backlog all
credit  approved  customer  purchase  orders.   The  Company   anticipates  that
$3,340,000 and $1,640,000 of its current  backlog will be shipped in fiscal 1996
and 1997,  respectively.  Orders in the backlog may be canceled by the  customer
upon  payment of mutually  acceptable  cancellation  charges.  While the current
backlog includes the orders of one customer to be shipped over two fiscal years,
orders  generally are shipped within one to six months of receipt.  Accordingly,
the  backlog  may not be a valid  measure of  revenue  for a future  period.  In
addition, a backlog does not provide any assurance that the Company will realize
a profit from the order.

Manufacturing

         The Company  purchases quartz and metal components of its products from
competitive  market  sources and  inspects  and  assembles  them at its plant in
Tempe,  Arizona.  Certain  parts of the system are machined at the Company's own
machine shop. With the exception of quartz components,  no procurement  problems
are currently being encountered nor are any such problems considered likely. The
Company  is  experiencing  long  lead-times  of four to six  months  for  quartz
components, requiring it to quote longer lead times for certain of its products.
The Company  expects to conduct  similar  assembly  operations  for its proposed
furnace line at a leased  facility in  Hoogeveen,  Netherlands.  If the proposed
photo-assisted  CVD product is developed,  the Company plans to continue to rely
on  suppliers  for  most  parts  and to do a  small  amount  of  machining  work
internally.

Engineering - Research and Development

         The Atmoscan(R),  was acquired in 1983 through a licensing  arrangement
with its inventor,  who was not employed by the Company. The other products were
developed by Company personnel.  The patented  photo-assisted CVD technology was
invented and patent rights  assigned to the Company by an employee.  The Company
presently employs at its Tempe,  Arizona plant,  three engineers  (including one
with sales support responsibilities) and four technicians. Product


                                       12

<PAGE>



development  in the past has been  accomplished  in an  important  part  through
cooperative  efforts  with a key customer  and such  cooperation  is expected to
continue  to be a  significant  element  in  the  Company's  future  development
efforts.  The  Company's  relationship  with  that  customer  are  substantially
dependent on the personal relations established by the Company's President,  Mr.
Jong S. Whang. It is anticipated that  approximately  five additional  engineers
and technicians will be required for the proposed new photo-assisted CVD product
development effort.

         The Company  presently employs one engineer and six technicians for its
Netherlands  operation.  These  employees  design  and  support  the  horizontal
diffusion furnace product line manufactured in the Netherlands.

         The  Company  may from  time to time seek to  develop  or  acquire  new
products  other  than  those  described  above to the  extent  that funds may be
available.

Patents

         Generally,  the effect of a patent is that the courts will grant to the
patent  holder the right to prevent  others from  making,  using and selling the
combination of elements or combination of steps covered by the patent.

         The  Company  has  several  United  States  patents on the  Atmoscan(R)
system,  each  reflecting  an  improvement  to or  modification  of the previous
patent.  The two Japanese patents pending on the Atmoscan(R) cover the first two
U.S. patents listed in the table, below.

         Other than certain  patents on the IBAL  automation,  neither the IBAL,
cantilever,  load stations nor the diffusion  furnace  products are protected by
patents.

         The following  table shows the patents  granted and the expiration date
thereof  and the  patents  pending  for the  Company's  products  in each of the
countries listed below:

                                                         Expiration Date or
Product                     Country                      Pending Approval
-------                     -------                      ------------------

Atmoscan(R)                 United States                July 10, 2001
Atmoscan(R)                 United States                September 24, 2002
Atmoscan(R)                 United States                July 2, 2002
Atmoscan(R)                 United States                August 30, 2005
Atmoscan(R)                 Korea                        May 30, 1999
Atmoscan(R)                 Japan                        June 1, 2004
Atmoscan(R)                 Japan                        July 18, 2005
Atmoscan(R)                 European Patent Community
                            - France                     July 18, 2004
                            - Germany                    July 18, 2004
                            - United Kingdom             July 18, 2004
                            - Italy                      July 18, 2004
                            - Netherlands                July 18, 2004
IBAL Cantilever Trolley     United States                Pending Approval



                                       13

<PAGE>
                                                         Expiration Date or
Product                     Country                      Pending Approval
-------                     -------                      ------------------

                                                                   
Photo CVD                   United States                June 1, 2010
Photo CVD                   United States                November 15, 2011
Photo CVD                   Japan                        Pending Approval


         The  Company's  ability to compete  may be  enhanced  by its ability to
protect  its  proprietary  information,  including  the  issuance of patents and
trademarks.  While  no  intellectual  property  right  of the  Company  has been
invalidated  or  declared  unenforceable,  there can be no  assurance  that such
rights  will be upheld in the  future.  There  can be no  assurance  that in the
future  products,  processes or technologies  owned by others,  necessary to the
conduct of the  Company's  business can be licensed on  commercially  reasonable
terms.

Marketing

         There are two  components  of the  market  for the  Company's  existing
products,  which consists of  semiconductor  manufacturers in the United States,
Western Europe, Taiwan, Korea, Japan and recently the People's Republic of China
and  India.  One  component   consists  of  customers  who  are  installing  new
semiconductor   manufacturing  facilities.   The  other  component  consists  of
customers who wish to install new equipment systems in existing facilities.  The
Company's  products  have  been  sold in both  components.  The  market  for the
Company's  existing  products is as  described  above.  The  Company  intends to
increase  its share of that market by adding the  horizontal  diffusion  furnace
manufactured by the Company in its Netherlands  facility to its product line and
increasing its sales,  marketing and manufacturing  capabilities in Europe. This
plan has and is  expected to increase  revenue not only  through  sales of a new
product,  but to increase  sales of other  products by permitting the Company to
offer a wider  product  line,  enabling  customers  to fill more of their  needs
through  purchases of the Company's  products and by  permitting  the Company to
offer more complete load stations  (described above).  For example,  the Company
expects to generate  increased sales of diffusion furnaces because it will offer
them together with  Atmoscan(R)  and IBAL products.  The Company also expects to
obtain  orders for its new  horizontal  diffusion  furnace from former  Tempress
customers as well as customers in the United States, a large market that had not
been effectively penetrated by Tempress in recent years.

         The  Company's  installed  base of customers  (facilities  at which the
Company's  products are  installed  and  operating)  includes  IBM  Corporation,
Motorola,  Digital  Equipment,  Texas Instruments,  Intel Corporation,  National
Semiconductor, Rockwell International,  Phillips, Northern Telecom, SGS-Thomson,
Mitsubishi,  Oki, Samsung,  Hyundai,  UMC and Wuxi China. Of these corporations,
IBM Corporation, Motorola, Digital Equipment, Intel Corporation, SGS-Thomson and
Samsung have been customers of the Company for approximately 11 years.

         The Company  markets its products by  participation  in trade shows, by
direct  customer  contact  by  the  Company's  sales  personnel  (currently  the
President  and two  salesmen  in the United  States and two sales and  marketing
personnel   located  in  the   Netherlands)   and  through   independent   sales
representatives  and  distributors.  The Company is dependent on its  President,
J.S. Whang, for continuing relationships with key customers.


                                       14

<PAGE>




         During  fiscal 1995,  three  customers  accounted for 28%, 11% and 14%,
respectively,  of equipment sales. No other customers  accounted for 10% or more
of this segment's sales. For a more complete  analysis of significant  equipment
customers,  see  Note  (4) of the  Notes to  Consolidated  Financial  Statements
included herein (the "Financial Statements").

         There are  presently  eight  independent  sales  representatives,  each
covering a specified  geographical  area on an  exclusive  basis.  The areas now
covered by  representatives  are the State of  Florida,  the New  England  area,
Northern Europe,  Central Europe  (including  Germany),  France,  India,  Italy,
Korea,  Taiwan, and the People's Republic of China.  Representatives  are paid a
commission as specified from time to time in the Company's  commission schedule,
which at  present  is higher for  complete  units and lower for spare  parts and
accessories.  Furthermore,  a  discount  is  allowed  to  a  customer  who  is a
manufacturer of diffusion furnaces.

         Upon the development of the proposed  photo-assisted  CVD product,  the
Company will seek  initially to make sales to  customers  who have  assisted and
will continue to assist in further development.  Such customers will probably be
allowed a discount from published prices. Although marketing the new product, if
it is successfully developed,  will probably result in an increase in the number
of marketing  employees and in  advertising  and other  marketing  expense,  the
amount cannot now be predicted with any degree of accuracy.

         Semiconductor  equipment  sales  generally  fluctuate with the level of
capital spending in the semiconductor  industry.  The semiconductor  business is
cyclical.

Competition

         The  Company is not aware of any  significant  product  which  directly
competes with the Atmoscan(R), however, there are several processing systems and
various   configurations  of  existing   manufacturing  products  which  provide
advantages  similar to those that the Company believes the Atmoscan(R)  provides
to semiconductor manufacturers. Notwithstanding the industry trend to the use of
vertical diffusion furnaces (with which Atmoscan(R) is not useable), the Company
believes  that a number of customers  are and will continue to be willing to buy
Atmoscan(R)  units  for use  with  horizontal  diffusion  furnaces  because  the
Atmoscan(R)  provides better results in terms of more uniform wafer  temperature
and dispersion of heated gases in the semiconductor  manufacturing process, less
exposure of semiconductor wafers to contaminants, and other technical advantages
which afford to its users a higher yield and,  therefore,  a lower per item cost
in the  manufacture  of  semiconductors.  The  Company  believes  that there are
several  products in the market  which  perform the same  functions  as the IBAL
automation products, IBAL Atmoscan(R),  IBAL Butler and IBAL Queue, but they are
more complex and more  expensive.  The IBAL  products are intended for customers
who do not require the more complex systems. Load stations are sold to customers
that are upgrading their existing facilities with other products of the Company.
These load stations provide a cleaner  environment to those they replace and can
reduce the down-time  for the upgrade as these load  stations were  specifically
designed to accept the Company's products without further modification. Products
competitive with the Company's load station are sold by several well-established
firms, larger than the Company. The Company believes,  however,  that there is a
niche market for its load stations because  Atmoscan(R) and IBAL are included as
components.  The cantilever system is designed for easy assembly and disassembly
to minimize down-time during maintenance. The Company expects


                                       15

<PAGE>



to sell its  horizontal  diffusion  furnaces to customers  who purchase  them in
small  quantities and that it will maintain a competitive  position  through its
policy of providing competitive prices and product support services designed for
the customer's specific requirements.

         Competition to be expected for the proposed  photo-assisted CVD product
cannot now be  determined.  It should be  assumed,  however,  that others in the
industry are in the process of developing  new products and  improving  existing
ones.

Employees

         The  Company  presently  employs  43 people  (including  the  corporate
officers and three contract employees) in its semiconductor  equipment business;
16 in manufacturing, 13 in engineering, six in administration,  and six in sales
positions.  Of these,  27 are  employed  at the  Company's  offices and plant in
Tempe, Arizona, and 16 at its facility in Hoogeveen, Netherlands.

                      TECHNICAL CONTRACT PERSONNEL BUSINESS
                    DISCONTINUED OPERATIONS--SALE OF ECHELON

General

         The Company entered the technical  contract  personnel business through
the acquisition in 1988, from Mr. James D. Renner, of RTS, Inc.  ("RTS"),  which
business was principally conducted in the greater Phoenix,  Arizona,  area, with
operations in Texas and New Mexico. In 1989, a similar business, Echelon Service
Company  ("Echelon"),  in Baltimore,  Maryland,  was acquired from Mr. Eugene R.
Hartman.  Mr.  Hartman is  currently a Director  of the  Company.  In 1990,  the
Company  continued its personnel  business  expansion through the acquisition of
several businesses in Los Angeles, California known as Martec from Mr. Martin L.
Simons.

         In 1992,  RTS,  Inc. and Martec,  together  with  various  wholly owned
subsidiaries,  were sold to another company.  Under an agreement with the buyer,
the Company  agreed not to engage in the temporary  personnel  business in those
areas until October 1, 1997. The Company's technical contract personnel business
is conducted through a wholly owned subsidiary,  Echelon,  located in Baltimore,
Maryland.   Echelon  furnishes  technical  employees  to  customers  located  in
Baltimore and nearby areas  (including  Baltimore County and the eastern half of
Maryland, Washington, D.C., Northern Virginia and Pennsylvania).

         Customers  usually employ contract  personnel when the estimated period
of their need for the  personnel  is  uncertain  or  believed  to be short term,
generally for periods of  approximately  six months.  This practice  reduces the
customers'  exposure  to  increased  unemployment  tax rates  and other  adverse
consequences of frequent employee  lay-offs,  reduces their recruiting  expenses
with  respect to short term  employees,  and relieves  them of the  necessity of
including technical contract personnel in various employee benefit plans.

         Arrangements  with customers  typically  specify the Company's  charges
(usually  a  contractually  fixed  mark-up  over  the  compensation  paid to the
technical employee), the amount


                                       16

<PAGE>



and type of  insurance  to be  maintained  by the  Company  (such  as  workmen's
compensation) and, the  administrative  functions to be performed by the Company
(such as checking  immigration  status and processing  applications for security
clearances in connection with  defense-related  employment).  The agreements set
forth  the  terms to be  applied  if and when  personnel  are  furnished  to the
customer;  they do not  require  that the  customer  employ or that the  Company
furnish any personnel.

         The  contract  employee  is in all legal  respects  an  employee of the
Company for the time, and under the conditions,  specified by the customer.  The
Company is responsible for paying the employee,  and making appropriate  payroll
deductions and payment of proper amounts for income taxes,  social  security and
the like.  Customers are billed on a periodic  basis.  All direct  payroll costs
(employer's   social   security   contributions,   unemployment   and  workmen's
compensation  insurance  premiums,  etc.) are borne by the Company. In addition,
the Company  provides  certain  limited  fringe  benefits  to certain  technical
employees  who meet  criteria in terms of length and,  steadiness  of employment
with  customers.  Contract  personnel  are employed and paid by the Company only
when they are engaged by a customer.  Employee compensation is for the most part
determined  by  negotiated  agreements  between the Company and the customer and
between  the Company and the  employee,  but in some areas are set by  agreement
between the Company's customer and the particular employee.

         The gross profit (or margin) of the Company from  personnel  operations
is the  difference  between the fee which is paid to the Company by the customer
and the compensation of the technical  employee plus direct and indirect payroll
costs  paid  by the  Company.  The  Company's  fee is  usually  an  agreed  upon
percentage  of the  employee's  compensation.  Variable  factors  affecting  the
earnings of this business are the cost of technical  employee  fringe  benefits,
payroll taxes,  certain  insurance  premium costs to the extent that they can be
influenced by the Company and the Company's related overhead  expense.  There is
currently a trend to increased  unemployment insurance and workers' compensation
costs.

         The Company  seeks to fill  customer  requests  for  specific  types of
technical  employees  with  personnel  selected  on  the  basis  of  information
maintained  in  its  files,   or  with  personnel  who  respond  to  help-wanted
advertising,  active solicitation and referrals. In most cases, the final hiring
decision is made by the customer after  conducting  individual  interviews  with
persons, selected by the Company as well as those referred by competitors.

         Customers  rarely if ever  enter  into  exclusive  agreements  with any
technical contract  personnel  supplier.  They maintain  agreements with several
selected technical contract  personnel  companies and specific  requirements are
usually communicated to all of them.

Source and Availability of Contract Personnel

         The Company  conducts a  continuing  recruiting  effort to increase the
number of  prospective  employees  who  desire to  obtain  temporary  employment
through the Company.  This effort is conducted  through  general  advertising in
trade journals,  advertising to fill specific positions, active solicitation and
referrals.  The  Company  has  not  experienced  any  material  difficulties  in
recruiting employees qualified to meet customer requirements.



                                       17

<PAGE>



Marketing and Customers

         Most of the  Company's  customers  and  prospective  customers  usually
solicit bids or proposals from personnel suppliers by submitting  "requirements"
for  specific  types  of  personnel  on  an  employee-by-employee   basis,  with
compensation  being negotiated on an individual basis as well. At such times the
Company,  if it wishes to seek the business,  prepares and submits a proposal to
the  customer or  prospective  customer  which  covers the fee or mark-up and an
undertaking to comply with customer  requirements  with respect to insurance and
administrative  matters.  Company  management  personnel  also  seek  to  answer
customer  questions and convey  assurances as to the  Company's  experience  and
capabilities in furnishing technical contract personnel and otherwise performing
customer services.

         Successful  marketing  often  depends  on  the  ability  of  individual
management  and marketing  personnel to create and maintain  good  relationships
with the customer's personnel management.

         During   fiscal  1995  and  1994,   Martin   Marietta   accounted   for
approximately 14% and 33% of Echelon's revenues, respectively.

         Echelon  markets  itself as being a reliable  source of highly  skilled
contract  engineering  talent.  As  such,  many  of  the  customers  tend  to be
engineering and technology driven companies which require  additional  personnel
for specific projects.  The Company  emphasizes  maintaining as large a customer
base as possible, in order to minimize the pressure on prices and the volatility
in revenues that sometimes results from being dependent upon one customer.

Seasonality

         There is a certain seasonal aspect to the technical  contract personnel
business  which is caused  by the  effect  of  payroll  taxes.  The  Company  is
responsible  for paying  unemployment  taxes and the employer's  share of social
security taxes.  When the maximum amount of such tax is reached for an employee,
the Company no longer makes payments in respect of the employee and its earnings
are thereby  increased.  Accordingly,  the  earnings of the  technical  contract
personnel business are higher during  approximately the last three months of the
calendar year  (corresponding to the Company's first fiscal quarter) than during
other periods of the year. Payroll taxes tend to be the highest and earnings the
lowest in the first three  months of the  calendar  year  (corresponding  to the
Company's  second fiscal quarter) as this is the period during which the Company
pays unemployment and social security taxes on all employees.

Competition

         Competitive  factors in the technical  contract  personnel business are
price  (the  amount  of fee or  mark-up  over  the  salary  or wage  paid to the
technical  employee),  ability to furnish the type of personnel  required by the
customer  promptly and the quality of service given to  customers.  The supplier
with the largest  number of qualified  prospective  technical  employees and the
information  systems  necessary to promptly match their skills and experience to
the job  requirements  has a  competitive  advantage.  A number of the Company's
competitors are much


                                       18

<PAGE>



larger and better financed than the Company and as a result may be able to offer
lower mark-ups to customers because of economies of scale.

Overhead Personnel

         Echelon has a total of five overhead employees,  including  one each in
management, personnel recruiting, sales, administration and clerical.

Plans to Dispose of Contract Personnel Business

         In October  1995,  the Board of Directors of the Company  determined to
dispose of the  contract  personnel  business  in order to allow the  Company to
focus on its core  semiconductor  equipment  business.  In  December  1995,  the
Company  executed an agreement  with Eugene R. Hartman,  a Vice President of the
Company and the President of Echelon, to sell all of the stock of Echelon to Mr.
Hartman in exchange for 98,016 shares of Amtech Common Stock held by Mr. Hartman
and additional cash consideration. The total consideration for the Echelon Stock
is valued at approximately $1.2 million.  Of that  consideration,  approximately
$800,000 will be in the form of Amtech Stock and approximately  $400,000 will be
in the form of a cash  distribution  by Echelon to Amtech prior to the sale.  To
the extent Echelon does not have enough cash to make the full distribution,  the
balance will be paid by assigning receivables to Amtech.

         Prior to entering the agreement  with Mr.  Hartman,  the Company sought
and negotiated offers from third parties.  However, in the opinion of the Board,
the best offer was tendered by Mr.  Hartman.  The  transaction  was conducted at
arms' length, and management does not believe that a better deal could have been
made with unrelated third parties.

         As a result of the disposition of Echelon, operation and financial data
related to the contract  personnel  business are  identified as a  "discontinued
operation" in the Company's financial statements.




                                       19

<PAGE>



           FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS
                                AND EXPORT SALES

         The following  table shows the amounts of revenue  attributable  to the
Company's  foreign  sales for the past three  fiscal  years (the  United  States
equipment  sales  being  included  in the table for  comparison  purposes).  All
foreign  sales  were  associated  with  the  Company's  semiconductor  equipment
business and none were to affiliates.

<TABLE>

<CAPTION>
                                             1995                               1994                                1993
                                  --------------------------         --------------------------          ---------------------------
<S>                               <C>                 <C>            <C>                 <C>             <C>    
United States (1)                 $2,462,852          (36%)           $2,472,176          (51%)          $2,003,064           (49%)
Far East (2)                       3,483,419          (51%)            1,136,432          (26%)           1,798,670           (44%)
Europe (3)                           493,786           (7%)              222,376           (5%)             286,152            (7%)
India                                424,011           (6%)              500,095          (12%)              -               (-0%-)
                                   ---------          -----            ---------         ------           ---------          ------
Total                             $6,864,068         (100%)           $4,331,079         (100%)          $4,087,886          (100%)

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

(1) Includes sales in Canada, which are not material.
(2) Includes Korea, Singapore, Taiwan, Japan and the People's Republic of China.
(3) Includes sales in Israel, which are not material.

</TABLE>

         For a further description of foreign  sales, see  Note (4) of the Notes
to the Financial Statements included herein.


ITEM 2.   PROPERTIES

         The Company's  semiconductor  equipment  business and corporate offices
are  located  in 9,000  square  feet of office  and  manufacturing  space at its
principal address.  The facility is leased at a current rate of $3,515 per month
for a term to expire on August 31, 1996.

         The Company  also  leases  approximately  2,270  square feet of general
space on a month to month basis in Hoogeveen,  Netherlands, at a current rate of
$1,215  per  month.  This  facility  will not  provide  adequate  space  for the
Company's assembly  operations for its furnace line in the second half of fiscal
1996, and  accordingly the Company will be required to lease  additional  space,
which is believed to be available at prevailing lease rates.

         If the results of the University study (described  above) are favorable
and the Company commences a photo-assisted  CVD product  development  effort, an
additional 2,000 square feet will be required for a laboratory. That laboratory,
together with the Company's  existing plant facility will, the Company believes,
be  adequate  through  the first  year of the  development  effort.  If and when
commercial  production  begins, an additional 10,000 square feet of space may be
required.  No difficulty is expected in obtaining any  additional  space at then
prevailing rents.

         Echelon leases  approximately 1,646 square feet of office space at 7400
York Road, Towson,  Maryland,  at a current monthly rental of $2,051 the term of
the lease to expire


                                       20

<PAGE>



September  30,  1998.  The  Company  will have no further  obligation  for these
premises following the disposition of Echelon.

ITEM 3.   LEGAL PROCEEDINGS

         None.


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.




                                       21

<PAGE>



                                     PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
          STOCKHOLDERS' MATTERS

Market Information

         The Company's common stock is traded in the over-the-counter market and
is quoted  under the  symbol  "ASYS" in the  automated  quotation  system of the
National Association of Securities Dealers SmallCap Market ("NASDAQ").

         The following  table sets forth the range of the high and low bid price
for the shares of the  Company's  common  stock for each quarter of fiscal years
1994 and 1995 as reported by the NASDAQ SmallCap Market.

                  Quarter Ended                    High         Low
                  -------------                    ----         ---
Fiscal 1994:
-----------

         December 31, 1993                         3.88         2.63
         March 31, 1994                            3.88         3.00
         June 30, 1994                             3.50         3.25
         September 30, 1994                        3.50         2.63

Fiscal 1995:
-----------

         December 31, 1994                         4.75         3.38
         March 31, 1995                            4.38         4.00
         June 30, 1995                             9.38         4.13
         September 30, 1995                        9.25         7.25


Holders

         As of December 31, 1995, there were 1,527 shareholders of record of the
Company's common stock.

Dividends

         The Company has never paid  dividends.  Its present  policy is to apply
cash to investment in product  development or expansion;  consequently,  it does
not expect to pay dividends within the foreseeable future.



                                       22

<PAGE>



ITEM 6.   SELECTED FINANCIAL DATA

         The selected  financial  data set forth with  respect to the  Company's
operations  for each of the years in the three year period ended  September  30,
1995 and with respect to the balance  sheets at September  30, 1995 and 1994 are
derived  from  audited  financial  statements  that have been  audited by Arthur
Andersen LLP,  independent public  accountants,  which are included elsewhere in
this Report and are  qualified by reference to such  financial  statements.  The
statements of operations for the fiscal years ended  September 30, 1992 and 1991
and the balance  sheets at September  30,  1993,  1992 and 1991 are derived from
financial  statements not included in this Report.  The selected  financial data
should be read in conjunction with Item 7, Management's  Discussion and Analysis
of Financial  Condition and Results of Operations,  and the Company's  Financial
Statements (and the related notes thereto) contained elsewhere in this Report.



                                       23

<PAGE>

<TABLE>


<CAPTION>
                                                                        Fiscal Years Ended September 30,
                                        --------------------------------------------------------------------------------------
                                            1995               1994               1993              1992              1991
                                        -----------        -----------         -----------      -----------       ------------

<S>                                     <C>               <C>                  <C>              <C>               <C>    
Operating Data

Revenues:

   Semiconductor Equipment              $6,864,068         $4,331,079          $4,087,886         $2,400,777        $2,605,496

   Technical Personnel(1)                4,547,860          6,224,205           4,254,594         25,462,462        28,915,660

   Total Revenues(1)                    11,411,928         10,555,284           8,342,480         27,863,239        31,521,156

Operating Profit by Segment:

   Semiconductor Equipment(2)              335,265             87,210             679,869           (417,529)          202,123

   Technical Personnel                      85,515            223,473             136,280           (678,392)         (746,846)

   Total Operating Profit (loss)           420,780            310,683             816,149         (1,095,921)         (544,723)

   Income (Loss) from
   Continuing Operations(2)                171,053            (89,469)            302,390           (911,210)          (58,812)

Net Income (Loss)(2)                      $226,568            $94,004            $508,670        $(1,501,070)        $(906,436)

Primary Earnings Per Share:(3)(4)

  Continuing Operations (loss)                $.09              $(.09)               $.31              $(.88)            $(.06)

  Net Income                                  $.12               $.10                $.51             $(1.46)            $(.89)

Balance Sheet Data

Working Capital                          6,163,304         $2,244,628          $2,722,362         $2,334,623        $2,940,144

Total Assets                             8,365,519          3,974,922           4,119,928          6,397,033         6,385,380

Total Liabilities                        1,363,291            852,103           1,091,113          3,725,888         2,236,648

Long-Term Debt                           -                  -                   -                 -                  -

Accumulated Deficit                       (891,311)        (1,147,338)         (1,241,342)        (1,750,012)         (248,942)

Shareholders' Equity                     7,002,228          3,122,819           3,028,815          2,671,145         4,148,732


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

(1)      A major portion of the Company's  technical personnel business was sold
         during 1992, resulting in the substantial decrease in revenue from 1992
         to 1993.

(2)      The results for the fiscal year 1994 include a $355,405 expense for the 
         University study described elsewhere herein.

(3)      The  results  shown  have been  restated  to  reflect  the  two-for-one
         combination or "reverse split" of Common Stock which took place on June
         4, 1993.

(4)      The  results  shown  would  be the  same if  they  were  prepared  on a
         fully-diluted  basis,  except that the net income per common  share for
         the fiscal year ended September 30, 1993 would have been $.50.
</TABLE>

         For further  financial  information  regarding the  Company's  business
segments,  see Note  (10) of the  Notes  to the  Financial  Statements  included
herein.


                                       24

<PAGE>



ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

         As of September 30, 1995 and 1994, cash and cash  equivalents  amounted
to $834,000 and  $737,000,  respectively.  The $106,000 of net cash  provided by
operating  activities  resulted  in the fiscal  1995  increase  in cash and cash
equivalents of $97,000, or 13%.

         Short-term  investments,  a capital resource, as well as another source
of  liquidity,  also  increased by  $3,328,000 to $3,672,000 as of September 30,
1995. This increase resulted primarily from the $3,623,000 net proceeds from the
public  offering.  See  Note 7  -Stockholders'  Investment  and  Stock  Options.
Investments  in  property  plant  and  equipment,   primarily  to  increase  the
production  capacity and  operating  efficiency of the  semiconductor  equipment
segment  and to improve a furnace  used for sales  demonstration  and  marketing
purposes,  resulted in the  expenditure  of $328,000 of such  proceeds.  See the
Consolidated Statements of Cash Flows included herein.

         Working capital  increased by $3,918,000 to $6,163,000 from $2,245,000,
an increase of 175%, as a result of the net proceeds  from the public  offering.
The proceeds are  substantially  invested in U.S.  treasury  bills and notes and
other short-term investments.  For the same reasons, the ratio of current assets
to current liabilities increased to 5.5:1 from 3.6:1.

         During March 1994, the Company  entered into a research and development
contract  with and paid  $355,000 to the  University of California at Santa Cruz
(the "University"). The University was to develop designs and specifications for
a prototype model of a product embodying the Company's  patented  photo-assisted
CVD  (chemical  vapor  deposition)  process  and to prove  the  feasibility  and
demonstrate the practical application of such product. In November, 1995, Amtech
entered into an amendment of its  research  and  development  contract  with the
University,  which  expands the  Company's  financial  commitment by $87,000 and
extends the contract  through February 28, 1996. The purpose of the amendment is
to  confirm  the  deposition  rate  of  the  Company's  patented  method  before
commencing  the  development  of a commercial  model of the  photo-assisted  CVD
reactor at Amtech's facility.

         As this study progresses,  management will assess the degree of success
achieved  and  determine  how  the  Company  will  proceed.   If  the  photo-CVD
feasibility study succeeds in demonstrating the practical commercial application
of the  Company's  patent,  approximately  $3,200,000  of liquidity  and capital
resources  are  expected  to be expended  to develop a  commercial  model of the
photo-assisted  CVD reactor at Amtech's  facility and to manufacture  and market
the proposed photo-assisted CVD product. This expenditure is expected to be made
in two  stages:  approximately  $1,700,000  for the  development  of an  initial
product suitable for use in research facilities and approximately $1,500,000 for
the development of a product for use in industrial  production  facilities.  The
funds from the cash and short-term  investments on hand should be sufficient for
these two stages of  development.  However,  these  estimates do not include any
amount  for  the  expansion  of  facilities   for  the   manufacture  of  a  new
photo-assisted CVD product designed for industrial production facilities.  Funds
for that  expansion,  if any,  are  expected to be obtained  from cash flow from
operations and other possible sources of financing,


                                       25

<PAGE>



such  as the  possible  exercise  of the  outstanding  redeemable  common  stock
warrants.  There is no assurance of the  availability  or sufficiency of that or
any other source of financing.

         Subsequent to the end of fiscal 1995, the Company  entered into a joint
venture agreement pursuant to which it would have a 45% ownership interest and a
50% voting  interest in Seil Semicon,  Inc. in return for a commitment to invest
$500,000 in cash.  On November  22, 1995,  the Company made an initial  $250,000
investment  in Seil  Semicon,  Inc.  Upon the receipt by the joint venture of $3
million in third party financing, the Company is obligated to make an additional
$250,000 capital contribution.  The joint venture intends to develop and operate
a silicon test wafer reclaiming business through Seil Semicon, Inc., which is in
the preliminary  start-up phase. It has acquired real property for  construction
of the reclamation facility.  The ultimate success of Seil Semicon, Inc. depends
on a number of factors,  including securing adequate  financing,  of which there
can be no assurance.

         In addition, the Company plans to either acquire the proprietary rights
to a diffusion furnace controller to be developed by a third-party or to develop
its own. The Company  currently  purchases  its  controllers  from other furnace
manufacturers.  Subject  to  securing  a  partial  grant  from the  Netherlands'
government and final approval of the projects specifications,  the Company plans
to make a net  investment of $165,000 for the  acquisition or development of its
own  diffusion  furnace  controller.  If  successful,  of which  there can be no
assurance,  the Company expects to improve its  competitive  position and reduce
its cost of sales over the long-term.

Results of Operations

Fiscal 1995 compared to Fiscal 1994

Semiconductor Equipment Business

         The  revenues  of  the  semiconductor   equipment   business  increased
$2,533,000, or 58%, to $6,864,000 in fiscal 1995 from $4,331,000 in fiscal 1994.
The  improvement  in revenues is due  primarily  to the  $1,811,000  in sales of
Tempress horizontal  diffusion furnaces and related after market parts resulting
from the  start-up of  manufacturing  in the  Netherlands.  Net  revenues of the
domestic  operations  were 17% higher in fiscal 1995 than in fiscal 1994, due to
continued expansion in the demand by semiconductor  manufacturers for production
equipment and upgrades.  Because  Tempress will be in full  operation for all of
fiscal 1996 and due to the increase in the backlog,  the Company  believes  that
products sales may increase in fiscal 1996.

         The gross profit of this segment was  $2,305,000 for fiscal 1995 versus
$1,561,000 for fiscal 1994,  representing a 48% increase.  The $744,000 increase
in gross margin primarily results from the start-up of the Netherlands operation
($433,000),  volume  increases  in  existing  product  lines  ($260,000),  and a
reduction  in the material  content as a percentage  of sales due to a favorable
product mix and increased use of lower cost parts  manufactured  in-house rather
than  purchased  from others  ($153,000).  These  increases in gross margin were
partially offset by increases in overhead  expenses and a decline in the revenue
and earnings  derived from the sale of products  manufactured by  third-parties.
Gross margin as a percentage of revenue was 34% in fiscal 1995 versus 36% in the
fiscal 1994,  with the decline  primarily  being  attributed to the higher fixed
costs  in  relation  to sales  associated  with the  start-up  operation  in the
Netherlands.  Further  increases  in fixed  costs are planned for fiscal 1996 in
order  to  provide  greater  manufacturing  capacity.  However,  because  of the
expected growth in revenue, gross margins may increase.

         The selling,  general and  administrative  costs  associated  with this
segment  were  $676,000  (64%) higher in fiscal 1995 as compared to fiscal 1994.
The higher costs are almost entirely


                                       26

<PAGE>



associated with the new operations in the Netherlands. However, selling, general
and  administrative  costs remained at approximately 25% of revenues during both
fiscal 1994 and 1995.

         Prior to fiscal 1994 the Company had made relatively small  investments
in product development for a technology business. The Company increased research
and  product  development  expenditures  in fiscal  1994 by  $257,000  primarily
through the expenditure of $355,405 for the University  study to demonstrate the
practical  application of the Company's patented  photo-assisted  chemical vapor
deposition ("CVD") process.  During fiscal 1995,  research and development costs
consisted entirely of developing the new Tempress line of furnaces, an automated
robot to load cantilever  paddle systems,  and product  improvements.  Since the
1994  feasibility  study  continued  through the end of fiscal 1995  without any
further financial commitment  required,  total research and development costs in
fiscal 1995 were $180,000 lower than in fiscal 1994. If the Company is unable to
acquire  the  proprietary  rights  to  a  furnace  controller   developed  by  a
third-party,  as planned and as discussed above,  research and development costs
could increase in fiscal 1996 by the $165,000 cost, net of government grants, to
develop its own diffusion furnace controller.

         Future  earnings may decline  significantly  as the result of increased
photo-assisted  CVD  development  expenses.  Depending on the actual  timing and
results of the second  stage of the  feasibility  study being  conducted  by the
University, the Company intends to expend $3,200,000 on research and development
over  approximately a three year period in order to develop a commercial product
based upon the Company's patented photo-assisted CVD technology.

         Operating profits for the semiconductor equipment segment were $335,000
in fiscal  1995,  as  compared  to $87,000 in fiscal  1994,  an  improvement  of
$248,000.  During 1994 and 1995 the Company committed significant capital to the
future  growth  of  this  segment;  $336,000  in  the  start-up  losses  of  the
Netherlands  operation in fiscal 1995 and $355,405  for the  photo-assisted  CVD
feasibility  study in fiscal 1994. The  improvement of this segment's  operating
profit for the two years  reflects the  expansion  of the  domestic  operations,
including  increases in revenue,  17%, gross margin,  19%, and operating  profit
after excluding the 1994 photo-assisted CVD study, 52%.

Income From Continuing Operations

         Income (loss) from continuing  operations  before income taxes includes
the operating income of the semiconductor  equipment  segment,  discussed above,
general  corporate  expenses and net interest income,  which increased in fiscal
1995 by  $248,000,  $36,000 and  $166,000,  respectively,  as compared to fiscal
1994.  The 14%  increase  in general  corporate  expense is  principally  due to
incentive compensation tied to the completion of the public offering. The growth
in net interest  income is due to the investment of $3,328,000 of the $3,623,000
received from the public  offering.  As a result of these items, the income from
continuing  operations before income taxes improved by $378,000,  to $261,000 in
fiscal 1995, from a loss of $117,000 in fiscal 1994.

         The income from  continuing  operations is $171,000 for fiscal 1995, an
improvement  of $260,000  from the loss of $89,000 in fiscal 1994,  after taking
into consideration the income tax


                                       27

<PAGE>



provision  of  $90,000 in fiscal  1995 and the income tax  benefit of $28,000 in
fiscal 1994. The income tax provision for fiscal 1995 approximates the statutory
rate. See Note 3 to the  consolidated  financial  statements for further details
including  an analysis of the  differences  between the  statutory  rate and the
actual effective rate for fiscal 1994.

         The Company's  semiconductor  equipment segment has been and may in the
future be affected  by the  following  trends.  Furnaces  used in  semiconductor
manufacturing are for the most part horizontal.  The use of vertical furnaces is
increasing  throughout  the  industry  on a  worldwide  basis and is expected to
increase in usage and in market share to an estimated 50% over approximately the
next five years as the technology  improves.  However,  the Company continues to
believe that a significant demand for its present product line will exist during
that period,  although there can be no assurance in that regard.  The reason for
continued  expected demand for Atmoscan(R) and horizontal  diffusion furnaces is
that,  notwithstanding  other  advantages  of  vertical  systems  (e.g.  reduced
contamination  and the capability to produce more  sophisticated  semiconductors
more  efficiently),  for all but very  large  production  runs there is a higher
through-put in horizontal  furnaces as compared to vertical furnaces.  Also, the
Company's  products  are  often  used in  upgrading  or  retro-fitting  existing
horizontal  furnaces  in order to  extend  their  useful  life and to avoid  the
necessity for the customer to acquire the much more expensive vertical furnaces.
Another important factor is the growth of semiconductor  manufacturing using the
less capital intensive  horizontal diffusion furnaces in the Peoples Republic of
China,  where the  Company  made its first sale in fiscal  1993,  and other less
developed  areas,  which  could  further  prolong  the  commercial  life  of the
Company's existing products.

         However, during the current cyclical upturn, demand for the Atmoscan(R)
has not  reached  the level of the  previous  high which was in 1989,  nor is it
expected to reach that level again in future years  because the  Atmoscan(R)  is
compatible with only horizontal furnaces.  Thus future sales volume is dependent
upon  the  continued  introduction  of new  products,  such as  IBAL  automation
products,  or improved  versions of products  that exist in the market,  such as
"clean  room" load  stations  and  horizontal  diffusion  furnaces.  The Company
continues  to pursue both types of product  introductions.  The  Company's  long
range plans include developing, if feasible, a new product based on its patented
photo-assisted CVD technology.

Discontinued Technical Contract Personnel Business

         Net  revenues  of  the  technical   contract   personnel  segment  were
$4,548,000 in fiscal 1995,  compared to $6,224,000 in fiscal 1994. Gross margins
generated  by  these  operations  in  fiscal  1995 and 1994  were  $543,000  and
$628,000,  respectively,  or  12%  and  10%,  respectively,  when  stated  as  a
percentage of revenues.  These  operations  also produced  operating  profits of
$86,000 and $223,000 for fiscal 1995 and fiscal 1994, respectively.

         The 27%  decline in the  revenues  and the 61%  decrease  in  operating
profit of this  segment in fiscal 1995 as compared to fiscal 1994 are the result
of the reduction in requirements of this segment's largest customer,  to a level
more  representative  to the years preceding fiscal 1994. The margin  percentage
produced by these operations improved 1% due to the permanent placement business
and another 1% because of higher ratio of full  service  business in relation to
the lower margin,  payroll servicing business.  General and administrative costs
increased


                                       28

<PAGE>



$34,000 as a result of the inclusion of the permanent  placement  business for a
full year and by $19,000  primarily from the  settlement of a sexual  harassment
lawsuit.

         In order to concentrate 100% of the Company's  management and financial
resources  on its  core  semiconductor  segment,  Echelon,  the  only  remaining
business  in the  technical  contract  personnel  business,  was sold  effective
December 31, 1995. As a result,  this segment is designated as  discontinued  in
the  consolidated  financial  statements.  Although  the  income  tax  provision
associated with this segment  approximates the statutory rate in fiscal 1995, it
is substantially lower in fiscal 1994 due to the resolution of uncertainties.

         Due  to  the  sale  of  Echelon,   revenue  and  operating   profit  of
discontinued  operations for fiscal 1996 will include that business for only one
quarter and thus will be significantly less than in fiscal 1995.

Total Company

         Consolidated revenues and total operating profit are summarized for the
past three years in Item 6, Selected Financial Data. Fiscal 1995's  consolidated
revenues were only 8% higher, or $11,412,000,  compared to $10,555,000 in fiscal
1994,  despite the 58%  increase  in the sales of  semiconductor  equipment.  As
discussed  above,  this  is due to  the  27%  decline  in  the  revenues  of the
discontinued  technical contract personnel business.  The 35% improvement in the
operating  profit,  from  $311,000 in fiscal 1994 to $421,000 in fiscal 1995, is
primarily  a result of growth in  revenues  and  profitability  of the  domestic
portion the semiconductor  equipment segment operations,  which is offset by the
start-up losses of the Netherlands operation and the reduction in the profits of
the discontinued technical contract personnel business.

         The $166,000  growth in net interest income results from the investment
of $3,328,000 of the $3,623,000  received from the public offering.  As a result
of all the above factors,  the combined income from continuing and  discontinued
operations  before  income  taxes  for  fiscal 1995 was  $347,000,  or  $241,000
higher, compared with $106,000 in fiscal 1994.

         The total income tax  provision  for the year ended  September 30, 1995
approximates  the  federal  statutory  rate.  The fiscal 1994 tax  provision  is
significantly less than the 34% federal statutory rate applied to pre-tax income
principally due to the $27,000 benefit from research and development credits. As
of September 30, 1995, the valuation allowance for deferred taxes is $78,000 and
results  from the  Company's  limiting  its  recognition  of state  deferred tax
assets, principally state net operating losses which can be carried forward only
five years.  Those state deferred tax assets will be recognized to the extent of
Arizona state taxable income in fiscal years 1996 and 1997.

         As a result of all of the above factors, net income for fiscal 1995 was
$227,000,  or  $.12  per  share,   including  $.09  per  share  from  continuing
operations, as compared to $94,000, or $.10 per share, net of a loss of $.09 per
share from continuing operations, in fiscal 1994.

         As of November 30, 1995, the Company's order backlog for  semiconductor
equipment  was  approximately  $4,980,000  compared to $2,187,000 as of the same
date of the previous year. After deducting the  approximately  $1,640,000 of the
current backlog that will not ship until


                                       29

<PAGE>



fiscal 1997,  there is a 53% increase in the backlog that can be shipped  within
one year. Most of the increase in the order backlog and the  anticipated  growth
in semiconductor equipment revenue is for the new horizontal diffusion furnaces.
Also, while there are exceptions, orders generally are shipped within six months
of receipt.  Therefore,  growth in  equipment  sales and income from  continuing
operations will depend on how quickly productive capacity for diffusion furnaces
can be expanded and the timing of the receipt of new orders. Another factor that
could  significantly   affect  profitability  is  the  amount  of  research  and
development  expenses,  if any, incurred for the development of a controller for
diffusion  furnaces (if not purchased) and of a model of the  photo-assisted CVD
product designed for use in research facilities.

Fiscal 1994 compared to Fiscal 1993

Semiconductor Equipment Business

         The revenues of the semiconductor  equipment  business  increased 6% to
$4,331,000 in fiscal 1994 from  $4,088,000 in fiscal 1993.  The  improvement  in
revenues  was  due  to  the  first  sales  of  horizontal   diffusion   furnaces
substantially assembled by suppliers, and sales to India.

         The gross profit of this segment was  $1,561,000 for fiscal 1994 versus
$1,595,000 for fiscal 1993,  representing a 2% decrease.  The recognition of the
deferred EPiC revenue net of the provision  for warranty  expense  accounted for
approximately  $130,000 of the fiscal 1993 gross profit.  After  subtracting the
effects of recognizing the deferred EPiC revenues as described above and in Note
(2) of the Notes to Consolidated  Financial Statements,  gross margins increased
$96,000,  or 6%. Gross margin as a percentage  of revenue was 36% in fiscal 1994
versus 37% in the fiscal 1993 after  subtracting  the effects of the recognition
of the deferred EPiC revenue in fiscal 1993.  Most of the  improvement  in gross
margins  results  from the higher  sales  volume  discussed  above.  The primary
factors  resulting in the decrease in the adjusted gross margin  percentages are
design and pricing errors  resulting from the significant  growth (80%) in sales
from $2,401,000 in fiscal 1992 to $4,331,000 in fiscal 1994 without sufficiently
increasing the work force.

         The selling,  general and  administrative  costs  associated  with this
segment increased  $162,000 (18%) in fiscal 1994 as compared to fiscal 1993. The
primary  reasons  for this  increase  are  $36,000 of  additional  travel  costs
primarily  associated  with  efforts to expand  foreign  markets and the $39,000
growth  in  commission  expense  primarily  related  to  sales  made  in  India.
Furthermore,  bad debt expense  increased by $69,000 due to the bankruptcy of an
entity for whose products the Company acted as sales agent.

         Until  fiscal 1994 the Company  had not made  expenditures  for product
development at a normal level for a technology  business.  The Company increased
research  and  product  development  expenditures  in  fiscal  1994 by  $257,000
primarily  through the  expenditure  of  $355,405  for the  University  study to
demonstrate the practical  application of the Company's patented  photo-assisted
chemical vapor deposition ("CVD") process.



                                       30

<PAGE>



         Operating profits for the  semiconductor  equipment segment amounted to
$87,000 in fiscal  1994,  as compared to $680,000 in fiscal  1993, a decrease of
$593,000.  The  inclusion  of $130,000 of gross profit from the  recognition  of
deferred EPiC revenue net of related warranty costs and a $141,000 recovery from
patent  infringement  litigation in the operating  income of fiscal 1993 with no
comparable  items in fiscal  1994 and the  $257,000  increase  in  research  and
development  costs in  fiscal  1994  account  for  $528,000  of the  decline  in
operating profit. The increase in selling, general and administrative costs also
contributed to the decline.

Income From Continuing Operations

         In  addition to the  operating  income of the  semiconductor  equipment
segment, discussed above, income (loss) from continuing operations before income
taxes includes general corporate expenses and net interest income,  which were $
$7,000 and $20,000  higher,  respectively,  in fiscal 1994 as compared to fiscal
1993.  The growth in net interest  income was due to having the funds  resulting
from the fiscal 1993  collection  of the Martec and RTS  receivables  for a full
year.  Because of the cost of the  photo-assisted  CVD  project,  the  operating
profit of the semiconductor  equipment segment combined with net interest income
was less than the general  corporate  expenses for fiscal  1994,  resulting in a
loss from  continuing  operations  before income taxes of $117,000,  compared to
$462,000 of income from continuing operations in fiscal 1993.

         The loss from  continuing  operations  is $89,000  for fiscal  1994,  a
$391,000 reduction in earnings from the income of $302,000 in fiscal 1993, after
taking into  consideration  the income tax benefit of $28,000 in fiscal 1994 and
the  income  tax  provision  of  $160,000  in  fiscal  1993.  See  Note 3 to the
consolidated financial statements for an analysis of the differences between the
statutory  rate and the actual  effective  rate for fiscal 1994.  The income tax
provision for fiscal 1993 approximates the statutory rate of 34%.

Discontinued Technical Contract Personnel Business

         Net  revenues  of  the  technical   contract   personnel  segment  were
$6,224,000  in fiscal 1994,  as compared to  $4,255,000  in fiscal  1993.  Gross
margins  generated by these operations in fiscal 1994 and 1993 were $628,000 and
$444,000,  respectively,  or 10% in each year when  stated  as a  percentage  of
revenues.  These  operations  also  produced  operating  profits of $223,000 and
$136,000 for fiscal 1994 and fiscal 1993, respectively.

         The 46%  increase in the  revenues  and the 64%  increase in  operating
profit of this  segment in fiscal 1994 as compared to fiscal 1993 are the result
of a  continued  improvement  in the economy in the  company's  markets and more
importantly the increased  requirements of this segment's largest customer.  The
margin  percentage  produced by these  operations  remained  stable  despite the
continued  competition  in the  Maryland,  Washington  D. C.,  and  Pennsylvania
markets. General and administrative costs remained under control.

Total Company

         Consolidated revenues and total operating profit are summarized for the
past three years in Item 6, Selected Financial Data. The factors contributing to
fiscal 1994's 27% increase in consolidated revenues to $10,555,000 are discussed
above by segment, particularly under the


                                       31

<PAGE>



technical contract personnel segment.  The 62% reduction in the operating profit
from $816,000 in fiscal 1993 to $311,000 in fiscal 1994 are  described  above by
segment,   particularly  under  the  semiconductor  equipment  segment.  General
corporate  expenses  increased  by $7,000,  or 3%, due to  increased  activities
related to attempts to expand the Company's business opportunities.

          In fiscal  1992 the Company  had net  interest  expense of $101,000 as
approximately 50% of the RTS and Martec receivables were financed by a bank line
of credit. With the collection of those receivables and repayment of the line of
credit during fiscal 1993, the Company earned net interest  income of $36,000 in
fiscal 1993 and $55,000 in fiscal  1994.  The higher  interest  income in fiscal
1994  was due to  having  the  funds  resulting  from  the  collection  of those
receivables  for a full year.  As a result,  the income from  operations  before
income  taxes for fiscal 1994  amounted to $106,000  compared  with  $599,000 in
fiscal 1993.

         The  fiscal  1994 tax  provision  is  significantly  less  than the 34%
federal statutory rate applied to pre-tax income  principally due to the $27,000
benefit of research and development credits and the effects of the settlement of
the tax, penalties and interest assessed in a prior year by the IRS. These items
are  partially  offset by the $20,000  provision for state income and other less
significant  items.  As of  September  30, 1994,  the  valuation  allowance  for
deferred  taxes  is  $150,000  and  results  from  the  Company's  limiting  its
recognition of state deferred tax assets, principally state net operating losses
which can be carried  forward only five years.  Those state  deferred tax assets
will be recognized in future carryforward periods to the extent of state taxable
income.

         As a result of all of the above factors, net income for fiscal 1994 was
$94,000, or $.10 per share, as compared to $509,000, or $.51 per share in fiscal
1993.






                                       32

<PAGE>



ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                      INDEX

                                                                            Page

Report of Independent Public Accountants.................................... F-1

Financial Statements -


   Consolidated Balance Sheets
   September 30, 1995 and 1994.............................................. F-2

   Consolidated Statements of Operations for
   the years ended September 30, 1995, 1994 and 1993........................ F-3

   Consolidated Statements of Stockholders'
   Investment for the years ended September 30,
   1995, 1994 and 1993...................................................... F-4

   Consolidated Statements of Cash Flows for
   the years ended September 30, 1995, 1994 and 1993........................ F-5

   Notes to Consolidated Financial Statements
   - September 30, 1995, 1994 and 1993...................................... F-7

Financial  Statement  Schedule for the years ended  
   September 30, 1995, 1994 and 1993:

   Schedule II - Valuation and Qualifying Accounts.......................... S-1


         All Schedules, other than the Schedule listed above, are omitted as the
information is not required, is not material or is otherwise furnished.





                                       33



<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To AMTECH SYSTEMS, INC.:

We have audited the accompanying  consolidated balance sheets of AMTECH SYSTEMS,
INC. (an Arizona  corporation)  and  subsidiaries  as of September  30, 1995 and
1994,  and the related  consolidated  statements  of  operations,  stockholders'
investment  and cash  flows  for each of the  three  years in the  period  ended
September  30,  1995.   These   consolidated   financial   statements   are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated 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 AMTECH  SYSTEMS,  INC. and
subsidiaries  as of  September  30,  1995 and  1994,  and the  results  of their
operations  and their cash flows for each of the three years in the period ended
September 30, 1995, in conformity with generally accepted accounting principles.

Our  audits  were made for the  purposes  of  forming  an  opinion  on the basic
financial  statements  taken as a whole.  The  schedule  listed  in the index of
financial statements and financial statement schedules is presented for purposes
of complying with the Securities and Exchange Commission's rules and is not part
of the basic  financial  statements.  This  schedule  has been  subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion,  fairly  states in all  material  respects  the  financial  data
required to be set forth therein in relation to the basic  financial  statements
taken as a whole.


                                                     Arthur Andersen LLP
Phoenix, Arizona, 
December 6, 1995, except with 
respect to the matter discussed
in Note 9, as to which the date 
is December 29, 1995.

                                       F-1

<PAGE>
<TABLE>
<CAPTION>

                      AMTECH SYSTEMS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           September 30, 1995 and 1994
                                                                     1995           1994
                                                                 -----------    -----------
                                     ASSETS
                                     ------
<S>                                                              <C>            <C>

CURRENT ASSETS:
  Cash and cash equivalents (Note 2)                             $   833,820    $   736,984
  Short-term investments (Note 2)                                  3,671,569        343,992
  Accounts receivable, less allowance
    for doubtful accounts of $80,000
    in 1995 and $45,000 in 1994                                    2,286,743      1,541,945
  Inventories (Note 2)                                               524,071        331,935
  Deferred income taxes (Notes 2 and 3)                              165,000        129,000
  Prepaid expenses                                                    45,392         12,875
                                                                 -----------    -----------
          Total current assets                                     7,526,595      3,096,731
                                                                 -----------    -----------

PROPERTY, PLANT AND EQUIPMENT, at cost (Note 2):
  Leasehold improvements                                             162,404        124,956
  Equipment and machinery                                            333,971        276,109
  Furniture and fixtures                                             652,607        601,549
                                                                 -----------    -----------
                                                                   1,148,982      1,002,614
  Less- Accumulated depreciation and amortization                    499,184        485,426
                                                                 -----------    -----------
                                                                     649,798        517,188
                                                                 -----------    -----------
PURCHASE PRICE IN EXCESS OF NET ASSETS
  ACQUIRED, at amortized cost (Notes 2 and 9)                         85,315         91,303
                                                                 -----------    -----------

OTHER ASSETS                                                         103,811        269,700
                                                                 -----------    -----------
                                                                 $ 8,365,519    $ 3,974,922
                                                                 ===========    ===========

                    LIABILITIES AND STOCKHOLDERS' INVESTMENT
                    ----------------------------------------
CURRENT LIABILITIES:
  Accounts payable                                               $   528,322    $   297,767
  Accrued liabilities:
    Compensation and related taxes                                   373,383        250,844
    Warranty and installation expenses                               116,347        114,390
    Other accrued liabilities                                        120,239        114,102
  Income taxes payable (Notes 2 and 3)                               225,000         75,000
                                                                 -----------    -----------
         Total current liabilities                                 1,363,291        852,103
                                                                 -----------    -----------

COMMITMENTS AND CONTINGENCIES (Notes 5, 6, and 8)

STOCKHOLDERS' INVESTMENT (Notes 7 and 9):
  Preferred stock; no specified terms;
    100,000,000 shares authorized; none issued                            --             --
  Common stock; $.01 par value; 100,000,000 shares authorized;
    2,152,851 (945,351 in 1994) shares issued and outstanding         21,529          9,454
  Additional paid-in capital                                       7,872,010      4,260,703
  Cumulative foreign currency translation adjustment                  29,459           --
  Accumulated deficit                                               (920,770)    (1,147,338)
                                                                 -----------    -----------
  Total stockholders' investment                                   7,002,228      3,122,819
                                                                 -----------    -----------
                                                                 $ 8,365,519    $ 3,974,922
                                                                 ===========    ===========
</TABLE>

The  accompanying  notes  are an  integral  part of these  consolidated  balance
sheets.

                                       F-2

<PAGE>

<TABLE>
<CAPTION>



                      AMTECH SYSTEMS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
              For The Years Ended September 30, 1995, 1994 and 1993

                                                       1995           1994           1993
                                                   -----------    -----------    -----------
<S>                                                <C>           <C>             <C>

SEMICONDUCTOR EQUIPMENT:
-----------------------
  Net product sales                                $ 6,864,068    $ 4,331,079    $ 4,087,886
  Cost of product sales                              4,558,675      2,770,039      2,493,108
                                                   -----------    -----------    -----------
          Gross margin                               2,305,393      1,561,040      1,594,778

  Selling and general                                1,738,344      1,061,852        900,050
  Photo-CVD project (Note 8)                              --          355,405           --
  Other Research and development (Note 2)              231,784         56,573        155,408
  Other expense (income) (Note 6)                         --             --         (140,549)
                                                   -----------    -----------    -----------
       Operating profit                                335,265         87,210        679,869

GENERAL CORPORATE EXPENSES                             295,683        259,858        252,979

INTEREST INCOME-NET                                   (221,471)       (55,179)       (35,500)
                                                   -----------    -----------    -----------

INCOME (LOSS) FROM CONTINUING
   OPERATIONS BEFORE INCOME TAXES                      261,053       (117,469)       462,390

INCOME TAX PROVISION (BENEFIT) (Notes 2 and 3)          90,000        (28,000)       160,000
                                                   -----------    -----------    -----------

INCOME (LOSS) FROM CONTINUING OPERATIONS               171,053        (89,469)       302,390
                                                   -----------    -----------    -----------

DISCONTINUED TECHNICAL CONTRACT PERSONNEL:
-----------------------------------------
  Net revenues                                       4,547,860      6,224,205      4,254,594
  Cost of revenues                                   4,005,154      5,596,441      3,810,899
                                                   -----------    -----------    -----------
          Gross margin                                 542,706        627,764        443,695

  Selling and general                                  457,191        404,291        387,914
  Litigation and other expense (income) (Note 9)          --             --          (80,499)
                                                   -----------    -----------    -----------
INCOME FROM DISCONTINUED OPERATIONS
   BEFORE INCOME TAXES                                  85,515        223,473        136,280
INCOME TAX PROVISION (BENEFIT) (Notes 2 and 3)          30,000         40,000        (70,000)
                                                   -----------    -----------    -----------
INCOME FROM DISCONTINUED OPERATIONS                     55,515        183,473        206,280
                                                   -----------    -----------    -----------
NET INCOME                                         $   226,568    $    94,004    $   508,670
                                                   ===========    ===========    ===========

PRIMARY EARNING PER SHARE (Notes 2 and 7):
  Income (Loss) From Continuing Operations         $       .09    $      (.09)   $       .31
  Net Income                                       $       .12    $       .10    $       .51
  Average Outstanding Shares                         1,901,426        964,542        991,262

FULLY DILUTED EARNING PER SHARE (Notes 2 and 7):
  Income (Loss) From Continuing Operations         $       .09    $      (.09)   $       .30
  Net Income                                       $       .12    $       .10    $       .50
  Average Outstanding Shares                         1,901,426        964,800      1,012,694

The accompanying notes are an integral part of these consolidated statements.

                                       F-3

<PAGE>

                      AMTECH SYSTEMS, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' INVESTMENT
                  Years Ended September 30, 1995, 1994 and 1993


                                                                         
                                                                         Cumulative
                                   Common Stock                           Foreign
                             --------------------------    Additional     Currency                      Total
                               Number                        Paid-In     Translation   Accumulated   Stockholders'
                              of Shares        Amount        Capital      Adjustment     Deficit      Investment
                             -----------    -----------    -----------   -----------   -----------    -----------
<S>                          <C>            <C>            <C>           <C>           <C>            <C>

BALANCE AT
 SEPTEMBER 30, 1992            1,032,490    $ 4,421,157    $      --     $      --     $(1,750,012)   $ 2,671,145
  Net income                        --             --             --            --         508,670        508,670
  Repurchase of common
   stock (Note 9)                (87,500)      (151,000)          --            --            --         (151,000)
  Reclassification of no
   par common stock to
   $.01 par value (Note 7)           361     (4,260,703)     4,260,703          --            --             --
                             -----------    -----------    -----------   -----------   -----------    -----------
BALANCE AT
 SEPTEMBER 30, 1993              945,351          9,454      4,260,703          --      (1,241,342)     3,028,815
  Net income                        --             --             --            --          94,004         94,004
                             -----------    -----------    -----------   -----------   -----------    -----------
BALANCE AT
 SEPTEMBER 30, 1994              945,351          9,454      4,260,703          --      (1,147,338)     3,122,819
  Net income                        --             --             --            --         226,568        226,568
  Secondary Public
   Offering-Note 7             1,207,500         12,075      3,611,307          --                      3,623,382
  Translation adjustment            --             --             --          29,459          --           29,459
                             -----------    -----------    -----------   -----------   -----------    -----------
BALANCE AT
 SEPTEMBER 30, 1995            2,152,851    $    21,529    $ 7,872,010   $    29,459   $  (920,770)   $ 7,002,228
                             ===========    ===========    ===========   ===========   ===========    ===========
</TABLE>




The accompanying notes are an integral part of these consolidated statements.

                                       F-4

<PAGE>
<TABLE>
<CAPTION>

                      AMTECH SYSTEMS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              For The Years Ended September 30, 1995, 1994 and 1993


                                                               1995           1994           1993
                                                           -----------    -----------    -----------
<S>                                                        <C>            <C>            <C>
OPERATING ACTIVITIES:
  Net income                                               $   226,568    $    94,004    $   508,670
  Adjustments to reconcile net income to net
    cash provided (used) by operating activities-
      Depreciation and amortization                            144,085         69,395         81,693
      Inventory and other asset write-downs                     44,796         34,804         39,484
      Martec restructuring charge (excess)                        --             --          (25,485)
      Loss on sale or retirement of assets                      31,398          1,314         18,017
      Bad debt expense, net of write-offs                       35,632           --          (20,000)
      Deferred tax provision (benefit)                         (36,000)       (19,000)        42,000
  Decreases (increases) in operating assets:
      Accounts receivable                                     (762,669)        63,525      2,800,434
      Inventories and prepaid expenses                        (261,863)      (176,651)       241,330
      Other assets                                             187,970       (211,654)       (17,951)
  Increases (decreases) in operating liabilities:
      Accounts payable                                         223,091       (101,387)      (442,295)
      Accrued liabilities                                      123,063         22,377       (901,995)
      Income taxes refundable/payable                          150,000       (160,000)       668,000
                                                           -----------    -----------    -----------
    Net Cash Provided (Used) By Operating Activities           106,071       (383,273)     2,991,902
                                                           -----------    -----------    -----------

INVESTING ACTIVITIES:
  Maturities (purchases) of short-term investments - net    (3,327,577)       549,285       (893,277)
  Purchases of property, plant and equipment                  (328,257)      (476,135)       (79,507)
  Proceeds from asset sale                                      19,591         45,342          2,333
                                                           -----------    -----------    -----------
    Net Cash Provided (Used) By Investing Activities        (3,636,243)       118,492       (970,451)
                                                           -----------    -----------    -----------

FINANCING ACTIVITIES:
  Net proceeds from public offering (Note 9)                 3,623,382           --             --
  Net advances (payments) on bank line of credit                  --             --       (1,500,000)
  Repurchase of common stock (Note 9)                             --             --         (151,000)
                                                           -----------    -----------    -----------
    Net Cash Used By Financing Activities                    3,623,382           --       (1,651,000)
                                                           -----------    -----------    -----------

EFFECT OF EXCHANGE RATE CHANGES                                  3,626           --             --
                                                           -----------    -----------    -----------

NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS (Note 2)                                     96,836       (264,781)       370,451
CASH AND CASH EQUIVALENTS AT
  BEGINNING OF PERIOD                                          736,984      1,001,765        631,314
                                                           -----------    -----------    -----------

CASH AND CASH EQUIVALENTS AT
  END OF PERIOD                                            $   833,820    $   736,984    $ 1,001,765
                                                           ===========    ===========    ===========

</TABLE>

The accompanying notes are an integral part of these consolidated statements.

                                       F-5

<PAGE>

<TABLE>
<CAPTION>


                      AMTECH SYSTEMS, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED




                                                              1995           1994            1993
                                                           ----------     ----------     -----------
<S>                                                       <C>             <C>            <C>
SUPPLEMENTAL CASH FLOW INFORMATION:
  Cash paid during the year for:
    Interest                                               $      --      $      --      $     9,259
    Income taxes, net of (refunds)                              6,000        191,000        (620,000)



SUPPLEMENTAL SCHEDULE OF NONCASH
  INVESTING AND FINANCING ACTIVITIES:
                                                                 None           None            None
</TABLE>









The accompanying notes are an integral part of these consolidated statements.

                                       F-6

<PAGE>



                      AMTECH SYSTEMS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              For The Years Ended September 30, 1995, 1994 and 1993


(1)  NATURE OF OPERATIONS:

  During the three years ended September 30, 1995, Amtech Systems,  Inc. and its
subsidiaries  (the  Company)  were  in  two  lines  of  business.   The  Company
manufactures  equipment  used in the  semiconductor  manufacturing  process.  In
addition,  the Company provided  technical contract personnel through its wholly
owned  subsidiary,  a business that was  designated as  discontinued  in October
1995. See Note 9 regarding discontinued operations.

  In August 1994, the Company  acquired  certain assets  including rights to use
the name  Tempress  from the  bankrupt  estate of  Tempress  B.V.  and is in the
process  of using  those  assets  in the  development,  manufacture  and sale of
horizontal  diffusion  furnaces in the  Netherlands.  These operations are being
conducted through the Company's wholly-owned subsidiary,  Tempress Systems, Inc.
These  financial  statements  include  the  results  of  operations  from  their
commencement on September 26, 1994.

  The Company  acquired  Echelon Service Company  (Echelon) as of April 1, 1989.
These financial statements include the results of operations of Echelon from the
date of  acquisition.  Since the  Company's  management  has decided to sell the
remaining  technical  contract  personnel  operations,   the  results  of  those
operations  have been  segregated  as  discontinued  operations.  See Note 9 for
further discussion of the acquisition and sale of this subsidiary.

  The Company serves an industry which experiences rapid technological  advances
and which in the past has been very cyclical.  Therefore,  the Company's  future
profitability  and growth depend on its ability to develop or acquire and market
profitable  new  products  and  its  success  in  adapting  to  future  cyclical
reversals, if any.


(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

  Basis of Presentation - The  accompanying  statements  include the accounts of
Amtech  Systems,  Inc.  and  its  wholly  owned  subsidiaries.  All  significant
intercompany accounts and transactions have been eliminated in consolidation.

  Revenue   Recognition   -  Revenue  is   recognized   for  the   semiconductor
manufacturing segment on the accrual basis when the product is shipped and title
passes to the customers.  For the technical contract personnel segment,  revenue
is recognized on the accrual basis as services are performed by its employees.

  Subsequent  to September  30,  1992,  the Company  determined  that there were
significant  problems  relative to certain of its EPiC products shipped in 1992.
The  Company  determined  it would no longer  solicit  additional  EPiC  orders.
Approximately $200,000 of 1992 EPiC shipments were recorded as deferred customer
revenue  and  included  in  current   liabilities  as  of  September  30,  1992.
Approximately  $100,000  of 1992  costs  associated  with these  shipments  were
classified as product development expenses.  During 1993, the Company recognized
these  revenues  and,  based  upon the  results of its  efforts  to correct  the
problems, established a liability for accrued warranty expenses. As of September
30, 1995, no more EPiC warranty costs are expected and there is no longer a need
for a specific warranty reserve for that product.

  Cash  Equivalents and Short-term  Investments - Cash  equivalents  consists of
time  certificates  of deposit  and U.S.  treasury  bills.  For  purposes of the
consolidated statements of cash flows, the Company considers the certificates of
deposit and treasury  bills to be cash  equivalents if their maturity is 90 days
or less from purchase. Maturities greater than 90 days are considered short-term
investments, which are recorded at fair value, which approximates cost.

                                       F-7

<PAGE>

                      AMTECH SYSTEMS, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)




(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)

  Inventories - Inventories are stated at the lower of cost (first-in, first-out
method) or market. The components of inventory as of September 30, 1995 and 1994
are as follows:

                                                      1995                1994
                                                    --------            --------
Purchased parts                                     $323,215            $280,333
Work-in-progress                                     181,855              51,602
Finished goods                                        19,001                --
                                                    --------            --------
                                                    $524,071            $331,935
                                                    ========            ========

  Property, Plant and Equipment - Maintenance and repairs are charged to expense
as incurred.  The costs of additions and improvements are capitalized.  The cost
of property retired or sold and the related accumulated depreciation are removed
from the applicable accounts and any gain or loss is recognized.

  Depreciation  is computed  using the  straight-line  method.  Useful lives for
equipment,  machinery,  leasehold  improvements are from three to five years and
are from three to ten years for furniture and fixtures.

  Purchase Price in Excess of Net Assets Acquired - The purchase price in excess
of net assets  acquired,  commonly  referred to as goodwill,  is being amortized
over periods of five to twenty years using the straight-line method.

  Product Development  Expenses - The Company expenses product development costs
as they are  incurred.  The  Company  incurred  approximately  $232,000 in 1995,
$412,000 in 1994, and $155,000 in 1993, of expenses  related to the  improvement
of Atmoscan (Note 6) and development of diffusion furnaces and other products.

  Foreign  Currency  Transactions  and  Translation  - Income  for  fiscal  1995
includes   approximately  $11,000  of  gains  resulting  from  foreign  currency
transactions.   There  were  no  foreign  currency  transactions  prior  to  the
commencement of operations of Tempress Systems,  Inc. The functional currency of
Tempress Systems, Inc. is the Netherlands guilder.

  Income  Taxes - The Company  files  consolidated  federal and state income tax
returns. During 1992, the Company adopted the provisions of the new Statement of
Financial  Accounting  Standards (SFAS) No. 109,  "Accounting for Income Taxes."
SFAS No. 109 requires  deferred income tax assets and liabilities to be computed
based upon cumulative  temporary  differences in financial reporting and taxable
income, carryforwards available and enacted tax law. See Note 3.

  Income (Loss) Per Common Share - Primary and fully diluted  earnings per share
in fiscal 1995 are computed using the modified  treasury  stock method,  because
the number of warrants and options exceed 20% of the common shares  outstanding.
For fiscal 1994 and 1993,  primary  earnings per common share are computed based
on weighted average common and common equivalent shares  outstanding  determined
using the treasury stock method.  For fully diluted earnings per share, in those
years, the number of common equivalent shares used has been calculated  assuming
that  dilutive  options were  outstanding  the full year and that based upon the
year-end stock price fewer shares could have been repurchased.

  Reclassifications - Certain  reclassifications  have been made to the 1993 and
1994 amounts to conform to the 1995 presentation.

                                       F-8

<PAGE>


                      AMTECH SYSTEMS, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)



(3)  INCOME TAXES:

  The provision for income taxes on continuing operations consists of:

                                    1995               1994               1993
                                 ---------          ---------          ---------
Current-
 Federal                         $ 130,000          $ (13,000)         $ 140,000
 Foreign                              --                 --                 --
 State                               2,000               --                 --
                                 ---------          ---------          ---------
                                   132,000            (13,000)           140,000
                                 ---------          ---------          ---------
Deferred-
 Federal                           (42,000)           (15,000)            20,000
 Foreign                              --                 --                 --
 State                                --                 --                 --
                                 ---------          ---------          ---------
                                   (42,000)           (15,000)            20,000
                                 ---------          ---------          ---------

                                 $  90,000          $ (28,000)         $ 160,000
                                 =========          =========          =========

  The  provision  for income taxes is  different  than the amount which would be
computed by applying the United States  corporate  income tax rate to the income
before income taxes. The differences are summarized as follows:
<TABLE>
<CAPTION>

                                                           1995         1994         1993
                                                      ---------    ---------    ---------
<S>                                                   <C>          <C>          <C>
Tax provision at the statutory rate                   $  89,000    $ (40,000)   $ 157,000
Effect of expenses not deductible for tax reporting
 purposes, primarily amortization of goodwill            13,000       10,000        3,000
State tax provision                                      54,000       (4,000)      40,000
Research & development credit                              --        (27,000)        --
Change in valuation allowance                           (52,000)       4,000      (40,000)
Other items                                             (14,000)      29,000         --
                                                      ---------    ---------    ---------
Actual tax provision                                  $  90,000    $ (28,000)   $ 160,000
                                                      =========    =========    =========
</TABLE>



  The  components  of deferred  taxes as of  September  30, 1995 and 1994 are as
follows:

                                                           1995          1994
                                                        ---------     ---------
Allowance for doubtful accounts                         $  32,000     $  19,000
Uniform capitalization of inventory costs                  34,000        41,000
Inventory write-downs not currently deductible             38,000        21,000
State net operating loss carryforwards                     42,000       116,000
Other liabilities not currently deductible                 97,000        82,000
Valuation allowance                                       (78,000)     (150,000)
                                                        ---------     ---------

                                                        $ 165,000     $ 129,000
                                                        =========     =========



                                       F-9

<PAGE>


                      AMTECH SYSTEMS, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)



(3)  INCOME TAXES: (continued)

  In  evaluating  the  probability  of realizing  its  deferred tax assets,  the
Company has limited its recognition of deferred tax assets to an amount equal to
the expected federal income tax rate of 34% applied to the cumulative  temporary
differences  existing at year end. Deferred tax assets attributable to state net
operating losses and the state tax effect of the temporary differences are fully
offset by the valuation allowance.


(4)  MAJOR CUSTOMERS AND FOREIGN SALES:

  During fiscal 1995, the  semiconductor  equipment had one major customer which
accounted for 17% of  consolidated  revenue.  During fiscal 1994,  the technical
contract  personnel  segment had one major customer  which  accounted for 19% of
consolidated  revenue.  The Company had no other  customers  which accounted for
more than 10% of consolidated revenues during fiscal years 1993 through 1995.

  The Company had  customers in each segment  which account for more than 10% of
that segment's revenues as follows:

  
                                                 1995       1994       1993 
                                                 ----       ----       ---- 
Semiconductor equipment manufacturing                                       
segment:                                           28%        18%        18%
                                                   11         14         15 
                                                   --         11         -- 
                                                 ----       ----       ---- 
                                                   39%        43%        33%
                                                 ====       ====       ==== 
                                                                            
Technical contract personnel segment:                                       
                                                   14%        33%        16%
                                                   --         --         14 
                                                 ----       ----       ---- 
                                                   14%        33%        30%
                                                 ====       ====       ==== 
                                                 
  The  individual  line items above do not reflect  the same  customers  in each
year.

  All foreign sales were associated with the  semiconductor  equipment  segment.
This segment's sales were to the following geographic regions:

                                                 1995       1994       1993  
                                                 ----       ----       ---- 
United States (including 1% or less to Canada)     36%        57%        49% 
Far East (Korea, People's Republic of China,                                
 Taiwan, Japan, and Singapore)                     51         26         44  
Europe (including Israel)                           7          5          7   
India                                               6         12          - 
                                                 ----       ----        ----   
                                                  100%       100%       100%  
                                                 ====       ====        ====  
                                                                       



                                      F-10

<PAGE>


                      AMTECH SYSTEMS, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)



(5)  LEASES:

  The  Company  leases  buildings,   vehicles  and  equipment.   Minimum  rental
commitments under  noncancellable  operating leases,  all of which expire in the
next three years, are as follows as of September 30, 1995:

                                   1996      $ 83,000
                                   1997        44,000
                                   1998        35,000
                                             --------
                                             $162,000
                                             ========

  Rental  expense,  net  of  sublease  income,  for  1995,  1994  and  1996  was
approximately $140,000, $119,000 and $99,000, respectively.


(6)  PROPRIETARY PRODUCT RIGHTS:

  The Company acquired the proprietary product rights to Atmoscan in 1983, which
provides an improved  method for the  automatic  loading of silicon  wafers into
diffusion furnaces.  The Company has agreed to pay the inventor royalties for 17
years from  November  23,  1983.  Royalties  on sales of  complete  units of the
product and any spare parts sold are as follows:
                                                                 Replacement
                                            Unit Sales              Parts
                                            ----------           -----------
            November 1988 - 1993                8%                    4%
            November 1993 - 2000                4                     2

  Royalty  expense  included  in  cost of  product  sales  of the  semiconductor
equipment segment totaled approximately  $49,000,  $63,000 and $105,000 in 1995,
1994 and 1993, respectively.

  The Company had been the plaintiff in a patent  infringement action related to
Atmoscan.  In 1991,  the patent  infringement  action was settled  when the U.S.
District  Court ruled that the Company's  patent had been  infringed upon by the
defendant  in the  action.  The  Court  ordered  the  defendant  to  discontinue
infringing  upon the  Company's  patent.  In  addition,  the Company  received a
$140,549  recovery  in  March  1993,  from  another  defendant  in  this  patent
infringement matter, which has been recorded as other income.


(7)  STOCKHOLDERS' INVESTMENT AND STOCK OPTIONS:
  Effective  with the close of business on June 4, 1993,  each two shares of the
no par common stock of the Company was combined and reclassified  into one share
of $.01 par value  common  stock.  All  shares and per share  amounts  have been
restated to give effect for this two for one reverse stock split. Any fractional
shares  resulting  from the reverse split were rounded to the next highest whole
number.

  On December 22, 1994,  the Company  completed a secondary  public  offering of
1,207,500 shares of its $.01 par value common stock and redeemable  warrants for
an equal  number  of  shares.  The sale  was in the  form of  units  which  were
comprised of three (3) shares and three (3) redeemable  warrants each, and which
were sold to the public at a price of $11.25 per unit.  The gross  proceeds from
the public sale amounted to $4,528,125.  The net proceeds to the Company,  after
deducting all expenses of the offering, were $3,623,382.


                                      F-11

<PAGE>


                      AMTECH SYSTEMS, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)



(7)  STOCKHOLDERS' INVESTMENT AND STOCK OPTIONS: (continued)

  Each redeemable  warrant issued in the offering entitles the holder to acquire
one share of the Company's  $.01 par value common stock at an exercise  price of
$5.50 per share at any time prior to the December 15, 1999 expiration  date. The
redeemable  warrants are subject to the  Company's  right of  redemption,  under
certain  circumstances,  at $.05  each  during  the  period  in  which  they are
exercisable.  In connection with the public offering,  the Company also sold the
underwriting group a warrant  ("underwriter's  warrant")  entitling the group to
purchase  35,000 units at a per unit price of $13.50 during the four year period
ending  December  15, 1999.  In summary,  the total number of shares of $.01 par
value common stock issuable under the redeemable  warrants and the underwriter's
warrant are 105,000 at a per share price of $4.50 and  1,312,500  at a per share
price of $5.50.

  The Board has  reserved a total of 235,000  shares of common  stock for use by
the 1983 Incentive Stock Option Plan, which is now expired,  and the Amended and
Restated 1995 Stock Option Plan.  Incentive stock options issued under the terms
of the plans have or will have an exercise price equal to or great than the fair
market value of the common  stock at the date the option was granted.  Incentive
stock option grants  expire no later than 10 years from the date of grant,  with
the most recent grant  expiring  October 15,  2002.  Under the terms of the 1995
Stock Option Plan,  nonstatutory options may also be issued. As of September 30,
1995, no options have been granted under the 1995 Stock Option Plan.

  The following is a summary of outstanding  stock options,  46,500 of which are
exercisable, as of September 30, 1995:
                                    Number of          Exercise     Expiration
  Nature of Options                  Shares              Price         Date
  -------------------             -----------       ------------   -------------
  Directors' options                   20,000        $2.13-$4.47   90 days after
                                                                    termination
  Incentive Stock Option Plan-
    President                           7,500               3.52      1996-1998
    Other employees                    46,000          1.25-5.60      1997-2003
                                  -----------
                                       73,500
                                  ===========

  The Board of  Directors  adopted the 1995 Stock Bonus Plan under which  grants
for 26,250 have been made to employees of the Company.  Under the terms of those
grants,  the employees will in fiscal 1996,  1997, and 1998,  vest in regards to
9,550, 8,300 and 8,400 shares, respectively. The grants also provide limited tax
protection  in the form of a cash bonus in the amount of 40% of the market value
of the  shares on the date of the grant.  The shares  will be issued and the tax
protection paid if the grantee remains an employee  through the date on which he
or she becomes  vested in those shares.  Compensation  expense is being recorded
ratably over the vesting period through the accrual of a liability.  Such shares
are not reflected in the  Consolidated  Statements of  Stockholders'  Investment
because the shares have not been issued, pending vesting.


(8)  COMMITMENTS AND CONTINGENCIES:

  During  March  1994,  the  Company  entered  into a research  and  development
contract  with and paid  $355,405 to the  University of California at Santa Cruz
(the  "University").  That amount was  expensed in fiscal  1994.  The  Company's
purpose for entering  into the  contract is to attempt to prove the  feasibility
and   demonstrate   the  practical   application   of  the  Company's   patented
photo-assisted  chemical vapor deposition  ("CVD")  process.  The University has
developed  designs  and  specifications  for  a  prototype  model  of a  product
embodying the

                                      F-12

<PAGE>


                      AMTECH SYSTEMS, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)



(8)  COMMITMENTS AND CONTINGENCIES: (continued)

Company's technology and used it to conduct the initial study. In November 1995,
the company  amended its contract to extent its term to February  28, 1996,  and
increase its  financial  commitment  to the  research by $87,000,  which will be
expensed in fiscal 1996. The purpose of the contract  amendment is to prove that
deposition  rates  that are  satisfactory  for  commercial  applications  can be
achieved with the Company's  patented  method.  Assuming the  feasibility of the
proposed  photo  CVD  product,  the  Company  expects  to  expend  approximately
$3,200,000 for its  development.  The  expenditure is expected to be made in two
stages:  approximately  $1,700,000  for the  development  of an initial  product
suitable for use in research  facilities  and  approximately  $1,500,000 for the
development  of a product for use in  industrial  production  facilities.  These
estimates  do not include any amount for the  expansion  of  facilities  for the
manufacture  of a new photo  CVD  product  designed  for  industrial  production
facilities.  Funds for that expansion,  if any, are expected to be obtained from
cash flow from operations and other sources of financing.  There is no assurance
of the availability or sufficiency of such sources.

  Subsequent  to September  30, 1995,  the Company  entered into a joint venture
agreement  pursuant to which it would have a 45%  ownership  interest  and a 50%
voting  interest  in Seil  Semicon,  Inc. in return for a  commitment  to invest
$500,000  in cash.  The joint  venturers  plan to  operate a silicon  test wafer
reclaiming business through Seil Semicon,  Inc., which is in the start-up phase.
The  ultimate  success of Seil  Semicon,  Inc.  depends on a number of  factors,
including securing adequate financing, of which there can be no assurance.

(9)  DISCONTINUED TECHNICAL CONTRACT PERSONNEL SEGMENT:

  The Company entered the technical  contract personnel segment in 1988 with the
purchase of RTS, Inc. and its affiliates  (RTS).  In 1989, the Company  acquired
Echelon Service Company.  Martec Resources,  Inc., Martec Payroll Services, Inc.
and affiliates  (collectively Martec) were acquired effective April 2, 1990. All
of these  acquisitions  were  culminated  using  stock  and cash at  closing  as
consideration,  as well as certain  incentive  arrangements  payable in cash and
stock to the former  owners.  The former owners also became  employed  under the
terms of their respective employment contracts.

  On March 6, 1991,  the  Company  terminated  for cause the  employment  of the
president (and former owner) of Martec. Martec's former president filed a demand
for arbitration as a result of his  termination by the Company,  seeking damages
of more than  $500,000.  Although the Company  believes that the  termination of
employment was proper and justified, the Company attempted to settle this matter
to avoid further  litigation.  The expected  settlement  amount, and the related
legal fees involved with the arbitration,  were recorded as litigation and other
expenses totaling  $469,677 in 1992. On March 26, 1993, a definitive  settlement
agreement was signed resolving all outstanding  claims between the parties.  The
settlement  involved the payment of $312,500,  $161,500 of which was for release
of all claims  against the Company and $151,000 for his return of 87,500  shares
of common  stock to the  Company.  The total actual costs were $25,485 less than
expected in 1992 and the  reversal of the accrual is included in other income in
1993.

  On September 30, 1992, the Company sold  substantially all operations  related
to RTS and  Martec.  Upon  winding up the  affairs of RTS and Martec the Company
realized $55,014 more than the carrying value of the net assets retained,  which
has been included in other income of discontinued operations in 1993.

The  "discontinued  technical  contract  personnel"  results  reflected  in  the
consolidated  statements of operations  for the three years ended  September 30,
1995 are those of Echelon. As of September 30, 1995 and 1994,

                                      F-13

<PAGE>


                      AMTECH SYSTEMS, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)



(9)  DISCONTINUED TECHNICAL CONTRACT PERSONNEL SEGMENT: (continued)

goodwill net of accumulated  amortization  related to the acquisition of Echelon
amounted to $85,315 and $91,303, respectively.  Effective December 29, 1995, the
Company's  management  entered  into a  contract  to sell  Echelon to its former
owner, who is a director of the Company.  Specifically, the Company is disposing
of  approximately  $550,000 in assets and $90,000 in  liabilities  and in return
will receive shares of the Company's $.01 par value common stock having a market
value of approximately $800,000.


(10)  BUSINESS SEGMENT INFORMATION:

  The  Company  operates  in  two  specific  business  segments:   semiconductor
manufacturing  equipment  and the technical  contract  personnel  business.  The
following tables summarize and supplement the segment  information  presented in
the  accompanying  financial  statements for the three years ended September 30,
1995, and as of the last day of those fiscal years:
<TABLE>
<CAPTION>

                                                  1995          1994          1993
                                              -----------   -----------   -----------
<S>                                           <C>           <C>           <C>
REVENUES:
 Semiconductor Manufacturing Equipment        $ 6,864,068   $ 4,331,079   $ 4,087,886
 Technical Contract Personnel Services (C)      4,547,860     6,224,205     4,254,594
                                              -----------   -----------   -----------
        Consolidated revenues                 $11,411,928   $10,555,284   $ 8,342,480
                                              ===========   ===========   ===========

OPERATING PROFIT (A):
 Semiconductor Manufacturing Equipment        $   335,265   $    87,210   $   679,869
 Technical Contract Personnel Services (C)         85,515       223,473       136,280
                                              -----------   -----------   -----------
        Total operating profit                $   420,780   $   310,683   $   816,149
                                              ===========   ===========   ===========

IDENTIFIABLE ASSETS:
 Semiconductor Manufacturing Equipment        $ 3,188,680   $ 1,988,046   $ 1,503,024
 Technical Contract Personnel Services (C)        608,508       775,505       682,094
 General Corporate - See (B) below              4,568,331     1,211,371     1,934,810
                                              -----------   -----------   -----------
        Total assets                          $ 8,365,519   $ 3,974,922   $ 4,119,928
                                              ===========   ===========   ===========

DEPRECIATION AND AMORTIZATION:
 Semiconductor Manufacturing Equipment        $   129,544   $    51,632   $    49,713
 Technical Contract Personnel Services (C)         14,541        17,763        31,980
                                              -----------   -----------   -----------
        Total depreciation and amortization   $   144,085   $    69,395   $    81,693
                                              ===========   ===========   ===========

CAPITAL EXPENDITURES:
 Semiconductor Manufacturing Equipment        $   324,119   $   460,313   $    63,383
 Technical Contract Personnel Services (C)          4,138        15,822        16,124
                                              -----------   -----------   -----------
        Total capital expenditures            $   328,257   $   476,135   $    79,507
                                              ===========   ===========   ===========


  (A) See  the  Consolidated  Statements of  Operations  and  related notes  for
      details of infrequently occurring items included in operating income.

  (B) General Corporate is primarily excess cash, cash  equivalents,  short-term
      investments and tax assets.

  (C) See  Note  9  regarding  the  discontinuance  of  the  Technical  Contract
      Personnel business segment.

</TABLE>
                                      F-14

<PAGE>

                      AMTECH SYSTEMS, INC. AND SUBSIDIARIES
                      -------------------------------------

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                 -----------------------------------------------

              FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
              -----------------------------------------------------



                                      Additions
 For the Year        Balance at        Charged
     Ended            Beginning       (Credited)                      Balance at
 September 30,          of Year       to Expense      Write-offs     End of Year
---------------       ---------       ---------       ----------     -----------

1.  Allowance for Doubtful Accounts

      1995            $  45,000       $  35,704        $     704       $  80,000

      1994               45,000          73,720           73,720          45,000

      1993               65,000           1,569           21,569          45,000



2.  Deferred Tax Asset Valuation Allowance

           1995       $ 150,000       $ (72,000)       $    --         $  78,000

           1994         150,000            --               --           150,000

           1993         256,000        (106,000)            --           150,000







                                       S-1









<PAGE>



ITEM 9.   DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

         None.





                                       34

<PAGE>



                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The  information  required by this Item is incorporated by reference to
the  Company's  Notice of Meeting and Proxy  Statement to be filed in connection
with the Company's  Annual Meeting of Shareholders  anticipated to be held on or
about February 29, 1996.

ITEM 11.  MANAGEMENT REMUNERATION

         The  information  required by this Item is incorporated by reference to
the  Company's  Notice of Meeting and Proxy  Statement to be filed in connection
with the Company's  Annual Meeting of Shareholders  anticipated to be held on or
about February 29, 1996.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

         The  information  required by this Item is incorporated by reference to
the  Company's  Notice of Meeting and Proxy  Statement to be filed in connection
with the Company's  Annual Meeting of Shareholders  anticipated to be held on or
about February 29, 1996.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The  information  required by this Item is incorporated by reference to
the  Company's  Notice of Meeting and Proxy  Statement to be filed in connection
with the Company's  Annual Meeting of Shareholders  anticipated to be held on or
about, February 29, 1996.




                                       35

<PAGE>



                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
          FORM 8-K

(a)      Financial Statements.

         The following is a list of all financial  statements filed as a part of
this Report:

         1.       Consolidated Balance Sheets - September 30, 1995 and 1994

         2.       Consolidated Statements of Operations for the years ended 
                  September 30, 1995, 1994 and 1993

         3.       Consolidated Statements of Stockholders' Investment for the 
                  years ended September 30, 1995, 1994 and 1993

         4.       Consolidated Statements of Cash Flows for the years ended 
                  September 30, 1995, 1994 and 1993

         5.       Notes to Consolidated Financial Statements - 
                  September 30, 1995, 1994 and 1993

(b)      Financial Statement Schedules

         The following is a list of a financial  statement  schedule required to
be filed as a part of this Report:

         1.       Schedule II - Valuation and Qualifying Accounts

         All schedule other than the Schedule  listed above,  are omitted as the
information is not required, is not material or is otherwise furnished.




                                       36

<PAGE>

<TABLE>


(c)      Exhibits.

<CAPTION>
                                                                                                        Method
   Exhibit No.      Description                                                                       of Filing
   -----------      -----------                                                                       ---------
       <S>          <C>                                                                                  <C>
       10.1         Articles of Incorporation                                                             A

       10.2         Articles of Amendment to Articles of Incorporation, dated                             A
                    April 27, 1983

       10.3         Articles of Amendment to Articles of Incorporation, dated                             B
                    May 19, 1987

       10.4         Articles of Amendment to Articles of Incorporation, dated                             C
                    May 2, 1988

       10.5         Articles of Amendment to Articles of Incorporation, dated                             G
                    May 28, 1993

       10.6         Amended and Restated Bylaws                                                           D

       10.7         Incentive Stock Option Plan                                                           A

       10.8         J.S. Whang Stock Option Agreement                                                     A

       10.9         Product Acquisition Agreement                                                         A

      10.10         Lease with Elias Paul, dated April 27, 1991                                           D

      10.11         Stock Purchase Agreement with  David J. McGrath, Jr.,                                 E
                    dated September 30, 1992

      10.12         Asset Purchase Agreement with TAD Technical Services                                  E
                    Corporation, dated September 30, 1992

      10.13         Settlement Agreement with the Committee to Protect                                    F
                    Shareholder Interests, dated August 25, 1992

      10.14         Employment Agreement with Robert T. Hass, dated May                                   G
                    19, 1992

      10.15         Registration Rights Agreement with J.S. Whang, dated                                  H
                    January 24, 1994

      10.16         Employment Agreement with J.S. Whang, dated October                                   H
                    1, 1994

      10.17         Research Agreement with The Regents of the University                                 *
                    of California dated March 1, 1994, together with
                    amendments thereto dated March 1, 1994, March 30,
                    1994, March 7, 1995, June 26, 1995, October 16, 1995,
                    November 29, 1995, and December 4, 1995


</TABLE>

                                       37

<PAGE>
<TABLE>

<CAPTION>
                                                                                                        Method
   Exhibit No.      Description                                                                       of Filing
   -----------      -----------                                                                       ---------
       <S>          <C>                                                                                  <C>

        11          Schedule of Computation of Net Income per Share                                       I

        22          Subsidiaries of the Registrant                                                        *

        24          Powers of Attorney                                                              See Signature
                                                                                                         Page
</TABLE>
------------------------

*        Filed herewith.
A        Incorporated by reference to the Company's Form S-18 Registration 
         Statement No. 2-83934-LA
B        Incorporated by reference to the Company's Annual Report on Form 10-K 
         for the fiscal year ended September 30, 1987
C        Incorporated by reference to the Company's Annual Report on Form 10-K 
         for the fiscal year ended September 30, 1988
D        Incorporated by reference to the Company's Annual Report on Form 10-K 
         for the fiscal year ended September 30, 1991
E        Incorporated  by reference to the Company's  Current Report on Form 
         8-K, dated October 14, 1992 
F        Incorporated  by reference to the Company's Annual Report on Form 10-K
         for the fiscal year ended September 30, 1992
G        Incorporated by reference to the Company's Annual Report on Form 10-K 
         for the fiscal year ended September 30, 1993
H        Incorporated by reference to the Company's Form S-1 Registration 
         Statement No. 33-77368
I        Incorporated by reference to the Company's Annual Report on Form 10-K 
         for the fiscal year ended September 30, 1994


(d)      Reports on Form 8-K

         The Company did not file a Current Report on Form 8-K during the fourth
quarter of fiscal year 1995.




                                       38

<PAGE>



                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 934, the  Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                         AMTECH SYSTEMS, INC.

January 12, 1996                         By   /s/ Jong S. Whang
                                             -------------------
                                             Jong S. Whang, President

                                POWER OF ATTORNEY

         KNOW  ALL MEN BY THESE  PRESENTS,  that  each  person  whose  signature
appears below  constitutes  and appoints  JONG S. WHANG and ROBERT T. HASS,  and
each of them, his true and lawful  attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities,  to sign any and all amendments to this Form 10-K Annual
Report, and to file the same, with all exhibits thereto,  and other documents in
connection therewith with the Securities and Exchange Commission,  granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing  requisite  and necessary to be done
in and about the premises,  as fully and to all intents and purposes as he might
or  could  do  in  person  hereby   ratifying  and   confirming  all  that  said
attorneys-in-fact and agents, or his substitute or substitutes,  may lawfully do
or cause to be done by virtue hereof.

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report on Form 10-K has been  signed  below by the  following  persons  on
behalf of the registrant and in the capacities and on the dates indicated:

<TABLE>
<CAPTION>
Signature                                                   Title                                       Date
---------                                                   -----                                       ----

<S>                                      <C>                                                       <C>    
  /s/ Jong S. Whang                       Chairman of the Board,                                   January 12, 1996
-------------------------------------     President (Chief Executive Officer)
Jong S. Whang                             

  /s/ Robert T. Hass                      Vice President-Finance                                   January 12, 1996
-------------------------------------     (Chief Financial & Accounting Officer)
Robert T. Hass                            

  /s/ Donald F. Johnston                  Director                                                 January 12, 1996
-------------------------------------
Donald F. Johnston

  /s/ Eugene R. Hartman                   Director                                                 January 12, 1996
-------------------------------------
Eugene R. Hartman

  /s/ Alvin Katz                          Director                                                 January 12, 1996
Alvin Katz

  /s/ Bruce R. Thaw                       Director                                                 January 12, 1996
-------------------------------------
Bruce R. Thaw

</TABLE>




                                       39