**U.S. Securities andExchange Commission**

**Washington,D.C. 20549**

**AmendmentNo. 1 to**

**FORM 10-KSB/A**

**(Mark One)**

**x**                               ANNUAL REPORT UNDER SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934

**For the fiscal year ended October 2,2004**

**o**                                  TRANSITION REPORT UNDER SECTION 13OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

**For the transition period from                    to                   **

**Commission File No. 1-6635**

**Innovative MicroTechnology, Inc.**

(Name of small businessissuer in its charter)

| **Delaware**                                                     | **95-1950506**                        |
|------------------------------------------------------------------|---------------------------------------|
| (State or other  jurisdiction of  incorporation or organization) | (I.R.S. Employer  Identification No.) |

**75Robin Hill Road, Goleta, California 93117**

(Address of principalexecutive offices) (Zip Code)

Issuer’s telephone number:**(805) 681-2800**

Securities registeredunder Section 12(b) of the Exchange Act: **None**

Securities registeredunder Section 12(g) of the Exchange Act:

**Common Stock, $.0001 par value**

(Title of Class)

Check whether the issuer (1) filedall reports required to be filed by Section 13 or 15(d) of theExchange Act during the past 12 months (or for such shorter period thatthe registrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days. Yes xNo o

Check if there is nodisclosure of delinquent filers pursuant to Item 405 of Regulation S-Bcontained in this form, and no disclosure will be contained, to the best of theregistrant’s knowledge, in definitive proxy or information statementsincorporated by reference in Part III of this Form 10-KSB or inany amendment to this Form 10-KSB. x

The issuer’s revenues forits most recently completed fiscal year were $10,114,000

There is no public marketfor the registrant’s Common Stock. As of November 27, 2004, the aggregatebook value of the registrant’s Common Stock held by non-affiliates was$5,183,000.

(ISSUERS INVOLVED INBANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Check whether the issuerhas filed all documents and reports required to be filed by Sections 12, 13 or15(d) of the Exchange Act after the distribution of securities under aplan confirmed by a court. Yes x No o

Asof December 27, 2004, there were 6,937,443 shares of the Company’scommon stock outstanding.

 

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**EXPLANATORY NOTE**

When the Company filed its Annual Report on Form 10-KSBfor the fiscal year ended October 2, 2004, it incorporated some of theinformation required by Part III of Form 10-KSB by reference tothe definitive proxy statement relating to the Company’s 2005 annual meeting ofstockholders. Because the Company will file its definitive proxy statement withthe Securities and Exchange Commission (the “SEC”) after January 31, 2005,the information required by Items 9, 10, 11, 12 and 14 of Part III of Form 10-KSBis instead provided on this Amendment No. 1 to Annual Report on Form 10-KSB/A.

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**PART III**

**ITEM 9.   Directors,Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) ofthe Exchange Act**

Thefollowing table provides information concerning each of the Company’s directorsand executive officers. The Company’s bylaws divide the Board of Directors intothree classes, designated Class I, Class II and Class III, witheach class to be elected for a three-year term on a staggered basis.
|                                | ** ** | ** ** | ** ** | **Director** | ** ** | ** **               |
|--------------------------------|------------|------------|------------|--------------|------------|--------------------------|
| **Name**                       | ** ** | ** ** | ** ** | **Age**      | ** ** | **Since**                | ** ** | **Position or Office** |
| ***Executive Officers***       |       |       |       |         |       |                     |
| Dr. John S. Foster        |       | 46         |       | 2001         |       | Chairman,                |
|                           |       |       |       |         |       | Chief Executive Officer  |
| Peter T. Altavilla             |       | 51         |       | n/a          |       | Chief Financial Officer, |
|                                |       |       |       |         |       | Controller and Secretary |
| ***Class I  Directors***  |       |       |       |         |       |                     |
| Scott Avila                    |       | 44         |       | 2001         |       | Director                 |
| Jose F. Suarez                 |       | 35         |       | 2005         |       | Director                 |
| Barry Waite                    |       | 56         |       | 2005         |       | Director                 |
| ***Class II  Directors*** |       |       |       |         |       |                     |
| Dr. John S. Foster        |       | 46         |       | 2001         |       | Chairman,                |
|                                |       |       |       |         |       | Chief Executive Officer  |
| Dr. Calvin Quate          |       | 81         |       | 2001         |       | Director                 |
| ***Class III Directors*** |       |       |       |         |       |                     |
| Dr. Malcolm Currie        |       | 75         |       | 2001         |       | Director                 |
| Eric M. Sigler                 |       | 36         |       | 2005         |       | Director                 |
| Dr. Jill Wittels          |       | 55         |       | 2002         |       | Director                 |
|                                |            |            |            |              |            |                          |  |  |

 

The terms of the Class I Directors expire atAnnual Meeting in 2007, terms of the Class II Directors expire at theAnnual Meeting in 2005, and terms of the Class III Directors expire at theAnnual Meeting in 2006.

Excluding traffic violations or other minor offenses,during the five years preceding the date of this report, none of the directorsor executive officers named above has been convicted in any criminal proceedingor been subject to a pending criminal proceeding. Dr. Foster and Mr. Altavillawere executive officers of the Company at the time it filed its petition ofbankruptcy.

Dr. Foster became an employee in 1993 and wasappointed Chief Executive Officer on November 16, 2001. Dr. Fosterwas an executive officer of the Company’s predecessor, Applied MagneticsCorporation, when it filed for bankruptcy protection on January 7, 2000. Hehas served in a number of management positions for Applied MagneticsCorporation, including Managing Director of Operations in Penang, Malaysia andVice President of Worldwide Operations. Dr. Foster has over 17 years ofexperience in technology and operations management. Election for this boardposition will be in March 2005.

The Company has employed Mr. Altavilla since1987. He served as Assistant Controller until August 1, 1994, and asCorporate Controller from August 1, 1994 and on November 16, 2001, hewas appointed Chief Financial Officer. Mr. Altavilla was appointedSecretary on February 9, 1996.

Scott Avila is a managing partner of CorporateRevitalization Partners, LLC a consulting firm specializing in restructurings.Mr. Avila specializes in developing and implementing corporate 

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restructuring plans andproviding interim management to operationally and financially distressedorganizations. Election for this board position will be in 2007.

Dr. Currie became a director on November 16,2001. He is Chairman and CEO of Currie Technologies Inc., a manufacturer ofelectric transportation vehicles. He currently serves on the Boards of thefollowing public companies: LSI Logic Corporation, where he is chairman of theAudit Committee; Inamed Corporation, where he holds the position of Chairman ofthe Audit Committee; Enova Systems, Inc.; and Regal One Corporation. He serveson the Compensation Committee of LSI Logic Corporation and Enova Systems, Inc.He has also served as chairman of Constellation Communications, Chairman andCEO of Hughes Electronics Corporation, President of Hughes Missile Systems Co.and President of Delco Electronics Corporation. He serves on the Board of Trusteesfor the University of Southern California, where he previously served asChairman. Election for this board position will be in 2006.

Dr. Calvin Quate became a director on November 16,2001. He is a professor of Applied Physics and Electrical Engineering atStanford University. He is a member of the Scientific Advisory Board at Zyomyx, Inc.,a developer of protein biochips, and at Affymetrix, a developer of the Genechip(a microarray DNA analysis). In 1995 he received the Scientist of the Yearaward from R&D Magazine, and in 1992 he received the National Medal ofScience. Election for this board position will be in March 2005.

Eric M. Sigler is currently a Director of BA VenturePartners, a venture capital partnership in which he has held a variety ofpositions since March 2000. Prior to joining BA Venture Partners, He was astrategy consultant with Mercer Management Consulting. Mr. Sigler has alsoheld management roles at Calimetrics, a private semiconductor company,Dataquest, a technology market research firm, and Eastern Research Group, aneconomic consultancy. Election for this board position will be in February 2007.

Jose F. Suarez is a Vice President with InvestorGrowth Capital, Inc. (“IGC”), a wholly-owned subsidiary of Investor AB,and a venture capital firm focusing on information technology and healthcareinvestments. He joined Investor AB’s Asian operations in 1997 and is now basedin IGC’s Palo Alto office, where he focuses on investments in thesemiconductor, capital equipment, and out-sourcing sectors. He currently servesas a director on the board of two private companies; Millennium MicrotechHolding Corporation, a provider of sub-contract semiconductor assembly and testservices to IDMs and fabless semiconductor companies in Thailand and PeoplesRepublic of China, and eSilicon Corporation, a designer and manufacturer ofcustom integrated circuits. Election for this board position will be in 2007.

Barry Waite is a senior advisor with IGC. He has morethan 30 years of experience in the semiconductor industry, ranging from waferfabrication and marketing to international partnerships and business alliances.He began his career in 1970 at Texas Instruments Incand in 1982, he joinedMotorola Inc. Mr. Waite retired from the position of president and chiefexecutive officer of Chartered Semiconductor in April 2002. He holds boardseats at Kulicke and Sofa Industries, a publicly traded manufacturer of testequipment for semiconductor devices, and Zetex Semiconductor, a privately heldmanufacturer of discrete and integrated analog semiconductor devices. Electionfor this board position will be in 2007.

Dr. Jill Wittelsbecame a director on October 31, 2002. For the past four years she hasheld the position ofCorporate Vice President of Business Development for L-3 CommunicationsCorporation, a public company. From 1997 through 2000 she was the VicePresident and General Manager of Infrared Imaging Systems, Inc., adivision of BAE Systems, formerly Lockheed Martin. She has 25 years ofexperience in business and technology management in the defense electronicsindustry. Dr. Wittels was appointed to the Board of Directors pursuant toan agreement between L-3 and the Company that in consideration of L-3’sinvestment in the Company, L-3 would have the right to designate one member ofthe Board of Directors. Election for this board position will be in 2006.

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**Compliancewith Section 16(a) of the Securities Exchange Act of 1934**

Section 16(a) of the Securities Exchange Actof 1934 requires the Company’s executive officers and directors, and personswho own more than ten percent of a registered class of the Company’s equitysecurities, to file with the Securities and Exchange Commission (‘‘SEC’’)certain reports on prescribed forms regarding ownership of and transactions inthe Company’s securities. Such officers, directors and ten percent stockholdersare also required by SEC rules to furnish the Company with copies of all Section 16(a) formsthat they file.

Based solely on its reviewof the copies of such forms received by it and written representations fromreporting persons, the Company has determined that all Section 16reporting requirements applicable to its directors and other executive officerswere complied with for fiscal year 2004. The Commission has establishedspecific due dates for these reports and requires the Company to report in thisProxy Statement any failure by these persons to file or failure to file on atimely basis. To the knowledge of the Company, based solely on a review of thecopies of such reports received or written representations from the reportingpersons, the Company believes that during the 2004 fiscal year the directors,executive officers and persons who own more than 10% of the Company’s commonstock complied with all Section 16(a) filing requirements.

**Code of Ethics**

The Company has notadopted a written code of ethics for its senior financial officers.

**ITEM 10.   Executive Compensation**

**Summary Compensation Table**

Thefollowing table shows, as to the Chief Executive Officer and the one other mosthighly compensated executive officer whose salary plus bonus exceeded $100,000,information concerning compensation paid for services to the Company in allcapacities during the fiscal year ended October 2, 2004, as well as thetotal compensation paid to each such individual in each of the Company’sprevious two fiscal years (if such person was the Chief Executive Officer or anexecutive officer, as the case may be, during any part of such fiscal year).
|                                            | ** ** | ** ** | ** ** | ** ** | ** ** | **Long term Compensation** | ** ** | ** **     | ** ** |
|--------------------------------------------|------------|------------|------------|------------|------------|--------------------------------------|------------|----------------|------------|
| ** **                                 | ** ** | ** ** | ** ** | ** ** | ** ** | **Annual Compensation**         | ** ** | **Awards**     | ** ** | **Payouts** | ** ** | ** ** | ** ** |
| ** **                                 | ** ** | ** ** | ** ** | ** ** | ** ** | ** **                           | ** ** | ** **     | ** ** | **Securities** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Name and  Principal Position** | ** ** | ** ** | ** ** | **Year**   | ** ** | **Salary  ($)**                      | ** ** | **Bonus  ($)** | ** ** | **Other Annual  Compensation  ($)(1)** | ** ** | **Restricted  Stock Awards  ($)** | ** ** | **Underlying  Options  (#)(3)** | ** ** | **LTIP  Payouts  ($)(2)** | ** ** | **All Other  Compensation  ($)** | ** ** |
| Dr. John S. Foster                    |       | 2004       |       | 265,000    |       |                                 | 0          |           |       |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |
| Chief Executive                            |       | 2003       |       | 265,000    |       |                                 | 0          |           |       |   | 0 |   |   |   | 0 |   |   |   | 40,000 |   |   |   | 0 |   |   |   | 0 |   |   |
| Officer                                    |       | 2002       |       | 265,000    |       |                                 | 0          |           |       |   | 0 |   |   |   | 126,077 |   |   |   | 253,421 |   |   |   | 0 |   |   |   | 0 |   |   |
| Peter T. Altavilla                         |       | 2004       |       | 160,000    |       |                                 | 0          |           |       |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |
| Chief Financial                            |       | 2003       |       | 158,558    |       |                                 | 0          |           |       |   | 0 |   |   |   | 0 |   |   |   | 27,751 |   |   |   | 0 |   |   |   | 0 |   |   |
| Officer                                    |       | 2002       |       | 135,000    |       |                                 | 0          |           |       |   | 0 |   |   |   | 84,061 |   |   |   | 168,947 |   |   |   | 0 |   |   |   | 0 |   |   |

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(1)          The value ofperquisites, if any, fell below $50,000 or 10% of reported base salary andbonus for each executive.

(2)          The restricted stockawards were issued under the 2001 Plan and are subject to restrictions underthe 2001 Plan that, among other things, prohibit the sale or transfer of thecommon stock. The awards vest over two years from the date of grant. An aggregateof 126,077 shares of common stock were awarded in fiscal 2002 to Dr. Foster,then valued at $630,385, and are subject to restrictions under the terms of the2001 Plan. The awards vest over two years from the date of grant. An aggregateof 84,051 shares of 

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common stock were awardedin fiscal 2002 to Mr. Altavilla, then valued at $420,255, and are subjectto restrictions under the terms of the 2001 Plan.

(3)          Includesall stock options granted during the year. No stock appreciation rights (SARs)were granted and no stock options were granted in tandem with any SARs

**OPTIONS GRANTS IN FISCAL 2004**

There were no stock optiongrants to Dr. Foster or Mr. Altavilla under the Company’s stockoption plan, during the fiscal year ended October 2, 2004.

**AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEARAND FY-END OPTION/SAR VALUES**

The following table setsforth information regarding stock options outstanding at October 2, 2004for the named executive officers. No options were exercised by the followingindividuals during 2004.
| **Name**           | ** ** | ** ** | ** ** | **Shares Acquired  on Exercise** | ** ** | **Value Realized** | ** ** | **Number of Securities  Underlying UnexercisedOptions at Fiscal Year-End (# exercisable/  unexercisable)(2)** | ** ** | **Value of  Unexercised In-The  Money Options at  Fiscal Year-End  ($ exercisable/  unexercisable)(1)** | ** **                |
|--------------------|------------|------------|------------|--------------------------------------------|------------|-------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------|---------------------------|
| John S. Foster     |       |       | 0          |                                       |       |                    | 0          |                                                                                                                                                  |       |                                                                                                                                  | 280,085/13,336            |   |   |   | 59,072/29,625 |   |   |
| Peter T. Altavilla |       |       | 0          |                                       |       |                    | 0          |                                                                                                                                                  |       |                                                                                                                                  | 187,446/  9,252 |   |   |   | 39,382/19,750 |   |   |

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(1)          Assumes a market valueof $5.35 per share on October 2, 2004. The Company does not have a marketfor its stock at this time, but the Board determined the fair market value ofthe common stock to be $5.35 per share on the date the options were granted.

(2)          Includes 97,794 optionsexercisable within 60 days of October 2, 2004 for John S. Foster and65,557 for Peter T. Altavilla.

 

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**ITEM 12.**   Security Ownership of CertainBeneficial Owners and Management and Related Stockholder Matters.

**SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERSAND MANAGEMENT**

Thefollowing table contains certain information regarding beneficial ownership ofthe Company’s common stock as of January 28, 2005 by (i) each personwho is known by the Company to own beneficially more than 5% of the Company’scommon stock, (ii) each of the Company’s directors, (iii) the ChiefExecutive Officer and the Company’s other most highly compensated executiveofficer (the two officers shall be referred to as the ‘‘Named ExecutiveOfficers’’), and (iv) all directors and executive officers as a group. Theinformation provided regarding beneficial ownership of the principal stockholdersis based on publicly available filings and, in the absence of such filings, onthe shares held of record by such persons.
| Name                                    | ** ** | ** **                | ** ** | **Class of Stock** | ** ** | **Number of Shares   Beneficially   Owned** | ** ** | **Percent   of   Class(1)** | ** ** |
|-----------------------------------------|------------|---------------------------|------------|------------------------------|------------|-------------------------------------------------------|------------|-----------------------------|------------|
| **Principal Stockholders:**             |       |                      |       |                         |       |                                                  |       |                        |       |   |   |
| Investor AB                             |       | Series A-1 Preferred |       |                         | 470,588    | (2)                                                   |       |                        | 47.1       | % |   |
| Arsenalsgaten 8c                        |       | Common                    |       |                         | 2,666,681  | (3)                                                   |       |                        | 29.3       | % |   |
| SE-103 32                               |       |                      |       |                         |       |                                                  |       |                        |       |   |   |
| Stockholm,  Sweden.                     |       |                      |       |                         |       |                                                  |       |                        |       |   |   |
| L-3 Communications  Corporation         |       | Common                    |       |                         | 2,703,000  | (4)                                                   |       |                        | 35.7       | % |   |
| 600 Third Avenue                        |       |                      |       |                         |       |                                                  |       |                        |       |   |   |
| New York, NY 10016                      |       |                      |       |                         |       |                                                  |       |                        |       |   |   |
| BA Venture Partners VII, LLC            |       | Series A-1 Preferred |       |                         | 352,941    | (5)                                                   |       |                        | 35.3       | % |   |
| 950 Tower Lane, Suite 700          |       | Common                    |       |                         | 2,000,010  | (3)                                                   |       |                        | 23.7       | % |   |
| Foster City, CA.  94404                 |       |                      |       |                         |       |                                                  |       |                        |       |   |   |
| Miramar Venture Partners,  L.P.         |       | Series A-1 Preferred |       |                         | 176,471    |                                                  |       |                        | 17.6       | % |   |
| 2101 East Coast Hwy., Ste.  300         |       | Common                    |       |                         | 1,000,008  | (3)                                                   |       |                        | 13.4       | % |   |
| Corona del Mar, CA 92625                |       |                      |       |                         |       |                                                  |       |                        |       |   |   |
| Malayan Banking Berhad                  |       | Common                    |       |                         | 798,477    |                                                  |       |                        | 12.4       | % |   |
| 40th  Floor, Menara Maybank             |       |                      |       |                         |       |                                                  |       |                        |       |   |   |
| 100 Jalan Tun  Perak                    |       |                      |       |                         |       |                                                  |       |                        |       |   |   |
| 50050 Kuala  Lumpur                     |       |                      |       |                         |       |                                                  |       |                        |       |   |   |
| West Malaysia                           |       |                      |       |                         |       |                                                  |       |                        |       |   |   |
| RHB Bank Berhad                         |       | Common                    |       |                         | 726,101    |                                                  |       |                        | 11.3       | % |   |
| Tower Two & Three,  RHB Centre |       |                      |       |                         |       |                                                  |       |                        |       |   |   |
| Jalan Tun Razak                         |       |                      |       |                         |       |                                                  |       |                        |       |   |   |
| 50400 Kuala Lumpur, Malaysia            |       |                      |       |                         |       |                                                  |       |                        |       |   |   |
| AMM-Gordon & Rees              |       | Common                    |       |                         | 663,470    |                                                  |       |                        | 10.3       | % |   |
| 8th  Floor Wisma KPMG                   |       |                      |       |                         |       |                                                  |       |                        |       |   |   |
| Jalan Dungan  Damansara Heights         |       |                      |       |                         |       |                                                  |       |                        |       |   |   |
| 50490 Kuala  Lumpur, Malaysia           |       |                      |       |                         |       |                                                  |       |                        |       |   |   |
| Southern Bank Berhad                    |       | Common                    |       |                         | 369,304    |                                                  |       |                        | 5.7        | % |   |
| Level 3 Menara Southern Bank            |       |                      |       |                         |       |                                                  |       |                        |       |   |   |
| 83 Medan Setia 1 Plaza  Damansara       |       |                      |       |                         |       |                                                  |       |                        |       |   |   |
| Bukit Damansara                         |       |                      |       |                         |       |                                                  |       |                        |       |   |   |
| 50772 Kuala Lumpur, Malaysia            |       |                      |       |                         |       |                                                  |       |                        |       |   |   |

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| **Non-Employee Directors:**                    |   |                       |   |   |      |   |   |   |   |   |   |
|------------------------------------------------|--------|----------------------------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|
| Scott Avila                                    |   | Common                     |   |   | 31,250    | (6)    |   |   | *      |   |   |
| Dr. Malcolm Currie                        |   | Common                     |   |   | 31,250    | (6)    |   |   | *      |   |   |
| Dr. Calvin Quate                          |   | Common                     |   |   | 31,250    | (6)    |   |   | *      |   |   |
| Eric Sigler                                    |   | Series A-1 Preferred  |   |   | 352,941   | (7)    |   |   | 35.3   | %      |   |
|                                                |   | Common                     |   |   | 2,000,010 | (3)    |   |   | 23.7   | %      |   |
| Jose Suarez                                    |   | Series A-1 Preferred  |   |   | 470,588   | (8)    |   |   | 47.1   | %      |   |
|                                           |   | Common                     |   |   | 2,666,681 | (3)    |   |   | 29.3   | %      |   |
| Dr. Jill Wittels                          |   | Common                     |   |   | 23,750    |   |   |   | *      |   |   |
| **Executive  Officers:**                       |   |                       |   |   |      |   |   |   |   |   |   |
| Dr. John S. Foster                        |   | Common                     |   |   | 406,162   | (9)    |   |   | 5.9    | %      |   |
| Peter T. Altavilla                             |   | Common                     |   |   | 271,497   | (10)   |   |   | 4.0    | %      |   |
| **All Directors and Named Executive Officers** |   |                       |   |   |      |   |   |   |   |   |   |
| **as a Group (8 persons)**                     |   | Series A-1  Preferred |   |   | 823,529   |   |   |   | 82.4   | %      |   |
|                                                |   | Common                     |   |   | 5,461,850 | (11)   |   |   | 45.9   | %      |   |

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(1)          Based on 6,437,443shares of common stock and 1,000,000 shares of Series A-1 PreferredStock (“Series A-1 Shares”) outstanding on the Record Date.Calculated pursuant to Rule 13d-3(d)(1) of the Securities ExchangeAct of 1934. Under Rule 13d-3(d)(1), shares that are not outstanding, butthat are subject to options, warrants, rights or conversion privilegesexercisable on or before March 29, 2005 (60 days after the Record Date),are deemed outstanding for the purpose of calculating the number and percentageowned by such person (or group), but not deemed outstanding for the purpose ofcalculating the percentage owned by each other person (or group) listed.

(2)          Includes 329,412 Series A-1Shares owned by Investor Growth Capital Ltd., a Guernsey of the Channel Islandslimited partnership (IGCL), and 141,176 Series A-1 Shares owned byInvestor Group L.P., a Guernsey of the Channel Islands limited partnership (“IGLP”).Investor AB is the ultimate general partner of IGCL and IGLP and exercises solevoting and investment control over their shares.

(3)          Based on conversion ofthe Series A-1 Shares, each of which is convertible into 5.6667 shares ofcommon stock at the election of the holder as of the Record Date.

(4)          Includes warrants topurchase 1,133,500 shares, which are immediately exercisable.

(5)          Includes 352,941 Series A-1Shares owned by BAVP VII, L.P. (“BAVP”). BA Venture Partners VII, LLC is thegeneral partner of BAVP and exercises sole voting and investment power over itsshares

(6)          Includes, as to each of Mr. Avilaand Drs. Currie and Quate, options, exercisable within 60 days of theRecord Date, to purchase 7,500 shares of common stock under the 2001 StockIncentive Plan.

(7)          Mr. Sigler is adirector of BA Venture Partners, an affiliate of BA Venture Partners VII, LLC,and may be deemed to exercise voting or dispositive power over the sharesbeneficially owned by BA Venture Partners VII, LLC. Mr. Sigler disclaimsbeneficial ownership of the shares owned by BAVP except to the extent of hisindirect pecuniary interest in the shares.

(8)          Mr. Suarez is aVice President of Investor Growth Capital, Inc., a wholly owned subsidiaryof Investor AB, and may be deemed to exercise voting or dispositive power overthe shares beneficially owned by 

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Investor AB. Mr. Suarezdisclaims beneficial ownership of the shares owned by Investor AB except to theextent of his indirect pecuniary interest in the shares.

(9)          Includes 126,077restricted shares granted to Dr. Foster, which are fully vested but notissued as of the Record Date and options to purchase 280,085 shares exercisablewithin 60 days of the Record date.

(10)   Includes 84,051 restrictedshares granted to Mr. Altavilla, which are fully vested but not issued asof the Record Date and options to purchase 187,446 shares exercisable within 60days of the Record date.

(11)   Includes210,128 restricted shares that are vested, but have not been issued, as of theRecord Date, options to purchase 585,031 shares exercisable within 60 days ofthe Record Date and 4,666,691 shares issuable on conversion of Series A-1Shares.

**EQUITY COMPENSATION PLAN INFORMATION**

The following tableprovides information about shares of Common Stock available for issuance underthe Company’s equity incentive plan.
| **Plan Category**                 | ** ** | ** ** | ** ** | **Number of Securities to be  Issued Upon Exercise of  Outstanding Options,  Warrants and Rights  (a)** | ** ** | **Weighted Average  Exercise Price  (b)** | ** ** | **Number of Securities  Remaining available for  future issuance under  Equity Compensation  Plans (excluding securities  reflected in column (a))  (c)** | ** ** |
|----------------------------------------|------------|------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| **Plans  Approved by Shareholders(1)** |       |       | 1,723,652  |                                                                                                                                                      |       |                                                | $5.10      |                                                                                                                                                                                                                  |       |   | 776,348 |   |   |
| **Plans Not Approved by Shareholders** |       |       | None       |                                                                                                                                                      |       |                                                |       |                                                                                                                                                                                                                  |       |   |   |   |   |
| **Total**                              |       |       | 1,723,652  |                                                                                                                                                      |       |                                                | $5.10      |                                                                                                                                                                                                                  |       |   | 776,348 |   |   |

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(1)          Allof the listed securities are available for issuance under the Innovative MicroTechnology 2001 Stock Incentive Plan (the “2001 Plan”). The Company wasdirected to implement the 2001 Plan in the order of the U.S. Bankruptcy Courtconfirming the Reorganization Plan (the “Order”). At the same time the Ordercanceled all of the Company’s previously outstanding common stock. Under Section 303(a) ofthe Delaware General Corporation Law, the Order had the effect of unanimousapproval by the directors and stockholders of the Company. On February 27,2004 the stockholders of the Company approved an amendment to the 2001 Plan toincrease the number of shares available for awards from 2,225,000 to 3,000,000.

**ITEM 13.   EXHIBITS.**
| Exhibit   Number | ** ** | **Description**                                                                                                                                                                                                                                                       |
|------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.1              |       | Debtor’s Third Amended Plan of Reorganization  Under Chapter 11 of the Bankruptcy Code Dated as of September 24, 2001  (incorporated by reference to Exhibit 2.1 to the Company’s Current  Report on Form 8-K filed November 20, 2001). |
| 3.1              |       | Amended and Restated Certificate of  Incorporation, as amended to date (incorporated by reference to  Exhibit 3.1 to the Company’s Annual Report on Form 10-KSB for the  fiscal year ended September 29, 2001).                                   |
| 3.2              |       | Amended and Restated Bylaws of Innovative Micro  Technology, Inc. (incorporated by reference to Exhibit 3.2 to the  Company’s Annual Report on Form 10-KSB for the fiscal year ended  September 29, 2001).                                   |

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| 4.1  |   | Form of Warrant Agreement between the  Company and Certain Claimants Under the Plan of Reorganization (incorporated  by reference to Exhibit 4.1 to the Company’s Annual Report on  Form 10-KSB for the fiscal year ended September 29, 2001).                                                                                  |
|------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.2  |   | Warrant Agreement between the Company and L-3  Communications Corporation, dated August 1, 2003 (incorporated by  reference to Exhibit 4.2 to the Company’s Current Report on  Form 8-K filed August 13, 2003).                                                                                                                 |
| 4.3  |   | Warrant Agreement between the Company and L-3  Communications Corporation, dated September 3, 2003 (incorporated by  reference to Exhibit 4.3 to the Company’s Quarterly Report on  Form 10-Q for the period ended June 26, 2004).                                                                                              |
| 4.4  |   | Warrant Agreement between the Company and Stutman  Treister & Glatt, Professional Corporation, dated September 30,  2003 (incorporated by reference to Exhibit 4.4 to the Company’s  Quarterly Report on Form 10-Q for the period ended June 26, 2004).                                                                |
| 10.1 |   | Change in Control Agreement between the Company  and John Foster, dated April 15, 2003 (incorporated by reference to  Exhibit 10.1 to the Company’s Annual Report on Form 10-KSB for the  fiscal year ended September 29, 2001).                                                                                                |
| 10.2 |   | Change in Control Agreement between the Company  and Peter T. Altavilla, dated April 15, 2003 (incorporated by reference  to Exhibit 10.2 to the Company’s Annual Report on Form 10-KSB for the fiscal year ended September 29,  2001).                                                                                         |
| 10.3 |   | Form of Indemnification Agreement for  directors and officers (incorporated by reference to Exhibit 10.3 to the  Company’s Annual Report on Form 10-KSB for the fiscal year ended  September 29, 2001).                                                                                                                         |
| 10.4 |   | Stock Purchase Agreement between the Company and  L-3 Communications Corporation, dated August 1, 2003 (incorporated by  reference to Exhibit 10.4 to the Company’s Current Report on  Form 8-K filed August 13, 2003).                                                                                                         |
| 10.5 |   | 2001 Stock Incentive Plan, as amended (incorporated  by reference to Appendix B to the Company’s Proxy Statement on Schedule 14A  filed on January 28, 2004).                                                                                                                                                                                  |
| 10.6 |   | Form of Stock Option Agreement under 2001  Stock Incentive Plan (incorporated by reference to Exhibit 10.6 to the  Company’s Annual Report on Form 10-KSB for the fiscal year ended  September 29, 2001).                                                                                                                       |
| 10.7 |   | Form of Restricted Stock Agreement under  2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.7 to  the Company’s Annual Report on Form 10-KSB for the fiscal year ended  September 29, 2001).                                                                                                                   |
| 10.8 |   | Fixed Rate Note of the Company, payable to Owens  Financial Group, Inc., dated December 20, 2001 (incorporated by  reference to Exhibit 10.8 to the Company’s Annual Report on Form 10-KSB for the fiscal year ended September 29,  2001).                                                                                 |
| 10.9 |   | Deed of Trust, Security Agreement and Assignment  of Leases and Rents, between the Company, Owens Financial Group, Inc.  and Investors Yield, Inc., dated December 20, 2001 (incorporated by  reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-KSB  for the fiscal year ended September 29, 2001). |

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| 10.10 |   | Worldwide Cash Profit Sharing Plan (incorporated  by reference to Exhibit 10 to Amendment No. 1 to the Company’s  Report on Form 10-Q filed March 4, 1996).                                                                                                                                                                                                                                                              |
|-------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.11 |   | Recapitalization Agreement, dated as of  March 20, 1999 and as amended by Amendment No. 1 dated as of  April 9, 1999, among MDT Holdings, LLC, Applied Magnetics Corporation,  DDCI, LLC, Vestro Investments Group Limited, Milestone Acquisitions II, LLC  and Magnetic Data Technologies, LLC (incorporated by reference to  Exhibit 2.1 to the Company’s Current Report on Form 8-K filed  April 26, 1999). |
| 10.12 |   | Stock Purchase Agreement between the Company and  L-3 Communications Corporation, dated September 3, 2003.                                                                                                                                                                                                                                                                                                                                   |
| 10.13 |   | Letter Agreement between Stutman  Treister & Glatt, Professional Corporation, Houlihan Lokey  Howard & Zukin, O’Melveny & Myers LLP, Sheppard Mullin  Richter & Hampton LLP and the Company for the settlement of the  Professional Persons Notes, dated as of September 22, 2003.                                                                                                                  |
| 10.14 |   | Promissory Note dated March 15, 2004 by  Innovative Micro Technology in favor of L-3 Communications Corporation  (incorporated by reference to Exhibit 10.14 to the Company’s Current  Report on Form 8-K filed on March 30, 2004).                                                                                                                                                                                      |
| 10.15 |   | Security Agreement dated March 15, 2004 by  and between the Company and L-3 Communications Corporation (incorporated by  reference to Exhibit 10.15 to the Company’s Current Report on  Form 8-K filed on March 30, 2004).                                                                                                                                                                                               |
| 10.16 |   | Supplemental Agreement dated March 15, 2004  by and between the Company and L-3 Communications Corporation (incorporated  by reference to Exhibit 10.16 to the Company’s Current Report on  Form 8-K filed on March 30, 2004).                                                                                                                                                                                           |
| 31.1  |   | Certification Pursuant to  Rule 13a-14(a) of the Securities Exchange Act of 1934, Adopted Pursuant  to Section 302 of the Sarbanes-Oxley Act of 2003.                                                                                                                                                                                                                                                                              |
| 31.2  |   | Certification Pursuant to  Rule 13a-14(a) of the Securities Exchange Act of 1934, Adopted  Pursuant to Section 302 of the Sarbanes-Oxley Act of 2003.                                                                                                                                                                                                                                                                              |
| 32    |   | Certification Pursuant to 18 U.S.C. Section 1350,  Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2003.                                                                                                                                                                                                                                                                                                                   |

 

**ITEM 14.   PrincipalAccountant Fees and Services**

BDOSeidman, LLP served as the Company’s independent auditors for the fiscal yearended October 2, 2004. The Company paid the following fees to BDO Seidman,LLP during fiscal 2004 and 2003:
| ** **         | ** ** | **2004** | ** ** | **2003** | ** ** |
|--------------------|------------|----------|------------|----------|------------|
| Audit Fees         |       | $        | 119,810    |     | $          | 139,257 |   |
| All other Fees     |       |     |       |     |       |
| Audit-related Fees |       | 0        |       | 0        |       |
| Tax-related Fees   |       | 0        |       | 0        |       |
| All other fees     |       | 0        |       | 0        |       |
|                    |            |          |            |          |            |  |  |

 

The Audit Committee, in reliance on statements bymanagement and the independent auditors, has determined that the provision ofthe non-audit services described above is compatible with maintaining theindependence of BDO Seidman, LLP.

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**SIGNATURES**

Inaccordance with Section 13 or 15(d) of the Exchange Act, theregistrant caused this Amendment No. 1 to Annual Report on Form 10-KSBto be signed on its behalf by the undersigned, thereunto duly authorized.
|            | **INNOVATIVE  MICRO TECHNOLOGY, INC.**      |
|------------|---------------------------------------------|
| ** ** | **By:**                                     | **  /s/  JOHN S. FOSTER** |
| ** ** | ** **                                  | **  Dr. John  S. Foster** |
| ** ** | ** **                                  | **  *Chairman and Chief Executive Officer*** |
| ** ** | **Date:   January 31, 2005** |

 

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