UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON D.C. 20549

                                    FORM 10-K

       [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934
           For the Fiscal Year Ended October 1, 2000

                                       or

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the Transition Period from ____ to ____

                         COMMISSION FILE NUMBER 0-17187

                           LOGIC DEVICES INCORPORATED
                           --------------------------
                          (Exact name of registrant as
                            specified in its charter)

         CALIFORNIA                                             94-2893789
         ----------                                             ----------
  (State of Incorporation)                                   (I.R.S. Employer
                                                           Identification No.)
                     1320 ORLEANS DRIVE, SUNNYVALE, CA 94089
                     ---------------------------------------
                    (Address of principal executive offices,
                               including Zip Code)

                                 (408) 542-5400
                                 --------------
                         (Registrant's telephone number,
                              including Area Code)

           Securities registered pursuant to Section 12(b) of the Act

    Title of Class                     Name of each exchange on which registered
         NONE                                             NONE

           Securities registered pursuant to Section 12(g) for the Act

                         COMMON STOCK, WITHOUT PAR VALUE
                         -------------------------------
                                (Title of Class)


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 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No ____

Indicate by check mark 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. [X]

The aggregate market value of voting stock held by non-affiliates of the
registrant on December 5, 2000 was approximately $5,290,087. On that date, there
were 6,841,888 shares of Common Stock issued and outstanding.

Documents Incorporated By Reference: Part III incorporates certain information
by reference to the registrant's definitive Proxy Statement to the registrant's
annual meeting of shareholders to be held March 6, 2001.

                                  Page 1 of 41

                      Index to Exhibits Appears at Page 40


<PAGE>

                                     PART I

ITEM 1. BUSINESS

         This item contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Actual results could differ materially from those
projected in the forward-looking statements as a result of factors set forth in
"Factors Affecting Future Results" and elsewhere in this Report.

GENERAL DEVELOPMENT OF THE BUSINESS

         LOGIC Devices Incorporated (the Company) develops and markets
high-performance digital integrated circuits that address the requirements of
original equipment manufacturers (OEMs) to provide high-speed electronic
computation in digital signal processing (DSP), video image processing, and
telecommunications applications. The Company's product strategy is to develop
and market proprietary circuits that offer superior performance to meet specific
application requirements.

         During fiscal 2000, the Company continued its focus, initiated in
September 1998, of improving its balance sheet liquidity. Compared to fiscal
1999, bank indebtedness was reduced 100%, accounts payable were reduced 94%,
current liabilities decreased 86%, and total liabilities were reduced 86%. This
was accomplished by aggressive control of expenses and by limiting capital
expenditures.

         The Company's fiscal year is comprised of 52 weeks of seven days, each
beginning on Monday and ending on Sunday, with each year's fiscal quarters
comprised of exactly 13 weeks. The Company's fiscal year 2000 ended October 1,
2000 and its fiscal year 1999 ended October 3, 1999. The Company's 1998 fiscal
period ended September 30, 1998 and consists of only nine months due to a change
in its fiscal year-end.

         The Company's products generally address DSP requirements involving
high-performance arithmetic computational and high-speed storage functions. The
Company is focused on developing proprietary catalog products to address
specific functional application needs or performance levels that are not
otherwise commercially available. The Company seeks to provide related groups of
circuits that OEMs purchase for incorporation into high-performance electronic
systems. As a result of the Company's focus on high value proprietary products,
it reduced the number of products that it offers from approximately 200 variants
of 38 base functions at the end of fiscal 1999, to approximately 100 variants of
25 base functions at the end of fiscal 2000.

         The Company relies on a third party silicon foundry to process silicon
wafers, each wafer having up to several hundred integrated circuits of a given
Company design, from which finished products are then assembled. The Company's
strategy is to out-source wafer processing to a third party foundry to avoid the
substantial investment in capital equipment required to establish a wafer
fabrication facility. See "Business - Background." The Company utilizes
foundries to take advantage of their processing capabilities and continues to
explore additional foundry relationships to minimize its dependence on any
single wafer foundry.

         The Company markets its products worldwide through its own direct sales
force, a network of 12 national and international independent sales
representatives, and one domestic and 17 international distributors. In fiscal
year 2000, approximately 22% of the Company's net revenues were derived from
OEMs, while sales through foreign and domestic distributors accounted for
approximately 78% of net revenues. Among the Company's customers are Snell and
Wilcox, Quantel, Philips, Hitachi, Ikegami, NEC, Sony, Toshiba, Honeywell, SDX,
Solectron, Acuson, Pinnacle Microsystems, Lockheed Martin, Boeing, Hewlett
Packard, and Advanced Technologies Laboratories. Approximately 61% of the
Company's net revenues were derived from within the United States and
approximately 39% were derived from foreign sales.

         The Company was incorporated under the laws of the State of California
in April 1983. The Company's initial public offering was in November 1988, at
which time the Company's shares commenced trading on the Nasdaq National Market.
The Company's principal offices are located at 1320 Orleans Drive, Sunnyvale,
California 94089, and the telephone number is (408) 542-5400.



                                       2
<PAGE>

BACKGROUND

         Rapid advances in fabricating silicon-based semiconductors are driving
a global revolution in electronics. With these ongoing advances, the ability to
economically compute, communicate, and control seems to be limited only by the
creativity required to implement ever more complex electronic systems. It is now
not only possible, but also becoming increasingly more common, to implement
entire electronic systems on a single small sliver of silicon. As a result, the
challenges to the industry have increasingly turned toward innovative product
definition, timely product development, technical customer support, and heavy
capital investments in advanced semiconductor wafer fabrication facilities. The
rapid advances in chip fabrication technology have resulted in a specialization
of skills within the industry. In addition to the specialization in materials
processing skills required to fabricate semiconductor wafers, the industry
increasingly requires and values system architecture, signal processing
algorithms, and circuit design expertise as essential skills for developing
financially successful products. Opportunities have thus emerged for
semiconductor companies that focus on product definition, advanced design
techniques, and technical application support, and that rely on third parties
for wafer fabrication. The Company focuses its resources on defining and
developing high-performance integrated circuit components for growing markets,
which require demanding computational throughput.

         The semiconductor industry is intensely competitive and is
characterized by rapid technological change, product obsolescence, wide
fluctuations in both demand and capacity, and steep price erosion. These factors
can obsolete processes and products currently utilized or produced by the
Company. In such cases, the Company is required to develop products utilizing
new processes and to either integrate such products into its existing foundry
processes or seek new foundry sources.

MARKETS AND PRODUCT STRATEGIES

         The Company believes it possesses advanced competencies in two areas:
DSP algorithm and architecture development and high speed, very large scale,
integrated circuit implementation.

         DSP involves converting light, sound, or other naturally occurring
analog waveforms into a stream of digital values that may then be processed,
manipulated, exchanged, or sorted by electronic systems. DSP provides many
advantages, including: the ability to process and manipulate digital data with
consistency and precision; the ability to store and recall information; and the
ability to extract information content and compress the amount of data that must
be stored, processed, or transmitted. Manipulation of video images and speech
requires signal-processing rates and precision that are not practical with
analog technology or with general-purpose (non-DSP) processors. DSP is an
increasingly important technology for many emerging product technologies.

         With the increasing cost effectiveness of DSP as a result of rapid
advances in semiconductor process technology, DSP is becoming ubiquitous in our
lives. As a result, DSP has attracted the considerable attention of very large
and formidable competitors. However, these competitors, out of necessity, tend
to focus on very high volume, application specific markets, or on
general-purpose programmable DSP products that can be programmed to address a
wide variety of applications. To avoid direct competition with these formidable
competitors, the Company seeks to identify products and market niches that
demand greater performance than can be accomplished with a programmable DSP and
that are small enough not to attract significant attention from larger chip
manufacturers.

         High quality video image processing is one such area in which the
Company operates. Video image processing currently requires over 10 times
greater computational capacity than programmable DSP processors can deliver.
Mass market video graphics and image processing products, such as 3D personal
computer graphics boards, are generally targeted at selling price points that
cannot support studio broadcast quality images. Moreover, studio broadcast
quality equipment may generally be required to process video images many times
in the composition and editing of on-air material. In contrast, personal
computer graphics screens are processed for display in real time only. As a
result, while the underlying mathematical computations for processing both
broadcast and computer images are similar, two distinct markets exist. As a
result of the very high volume potential available for a successful personal
computer graphics chip product, many companies compete fiercely over this market
opportunity. In contrast, the broadcast industry, while it requires more robust
mathematical precision in processing images, consumes far fewer chips. Due to
its more modest market size, this market has been relatively ignored by the chip
industry. As a result, the Company has identified this area as a productive area
to apply its core strengths.

                                       3
<PAGE>

         Beginning in November 1998, the Federal Communications Commission
directed that television broadcasters begin a transition from current analog
broadcasts to high definition digital television (HDTV). All analog broadcasts
are scheduled to cease by the year 2007. In addition to providing improved image
quality as a result of increased resolution, the image aspect ratio
(width/height) will be changed from the traditional, nearly square 4 by 3 size
ratio of current televisions to a wider screen 16 by 9 ratio more similar to
motion picture screens. Due to the large base of currently installed equipment,
both formats will co-exist for a number of years. In addition, due to the
initially limited availability of content in the wide format, the industry faces
the need to resize images back and forth between the two formats with
exceptionally high computational precision, so as to preserve the image quality
advantages of the newer digital format. It is generally acknowledged that the
industry is behind schedule in meeting this FCC mandate. The industry's slow
transition adversely affected the Company's revenues for fiscal 2000.

         With its significant presence in the broadcast equipment industry, the
Company and its customers jointly defined a family of very high performance
digital image filtering circuits that facilitate the smoothing of edges as video
images are stretched and resized. During 1997, the Company developed the initial
members of this family and sampled them to OEMs for incorporation into HDTV
studio production systems. During fiscal 1998, many of those OEMs completed
their system level product development on this new generation of HDTV compatible
studio systems. While sales of HDTV studio equipment in fiscal 2000 and 1999
lagged behind market forecasts, the Company believes that its products offer
unique solutions to certain video image filtering problems required in that
equipment. As the HDTV studio equipment begins to sell in higher volume, the
Company should benefit from these increasing sales.

         As a result of its initial work on digital filtering and image resizing
circuits, the Company identified secondary applications for its product
technology. Many of the current products are also applicable to, and have been
incorporated into, advanced medical imaging equipment, such as computer aided
tomography (CAT) and ultrasound scanners. Military applications include
infrared, radar, and video image seekers, as well as multi-mode displays.

         Telecommunications, in all of its various forms, is the fastest growing
and largest current market for DSP chips. The Company has found that its digital
filtering components also have applications in wireless base station processing.
Analogous to video image processing, major industry suppliers have tended to
concentrate their efforts on the high volume, handset side of the wireless link,
while the base station side has received far less attention. Due to demands for
fewer, smaller, and less intrusive antenna sites, the digital filtering required
in multi-channel wireless base stations is computationally intensive and power
limited. The Company continues to believe this area is an attractive target and
is focusing much of its product development efforts on this market.

PRODUCTS IN DEVELOPMENT

         The Company has historically experienced a correlation between its
success in introducing new products and increases in revenues. Consequently, the
Company is committed to a high level of product design and development activity,
as it considers new product development critical to its future success.

         With the benefit of this on-going customer input resulting from its
current digital filtering products, the Company has a number of new DSP product
opportunities that it will undertake to develop in fiscal 2001. These products
generally will be utilized in conjunction with the Company's current products to
further facilitate high-performance signal processing. At current resource
levels, the Company does not expect to be able to complete all of the new
product opportunities that it has identified. The level of product development
expenditures will be dependent on the Company's success in meeting its staffing
objectives.

WAFER FABRICATION TECHNOLOGY

         The Company relies on a third party silicon foundry supplier to produce
processed wafers from mask patterns designed by the Company. Through this wafer
supplier, the Company has access to advanced high-speed, high-density
complimentary metal oxide semiconductor (CMOS) process technology, without the
significant investment in capital equipment and facilities required to establish
a wafer fabrication facility. Products developed in fiscal 2000 utilize process
technology with effective channel lengths under 0.25 micron. Coupled with the
Company's structured custom design methodology and experience in high-speed
circuit design, this technology has allowed the Company to create products that
offer high computational speeds, high reliability, high levels of circuit
integration (complexity), and low power consumption.



                                       4
<PAGE>

         The Company currently is dependent on Taiwan Semiconductor
Manufacturing Company as its primary wafer-processing source. Wafers are
processed to pre-agreed specifications to produce integrated circuits designed
by the Company. There can be no assurance that such relationship will continue
to be on terms satisfactory to the Company. The Company's foundry source does
not guarantee minimum supplies. At times, the Company's revenues have been
limited by its inability to obtain adequate quantities of processed wafers. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Overview."

PRODUCTION, ASSEMBLY AND TEST

         The Company's production operations consist of functional and
parametric wafer testing, package marking, hot and cold testing, final
inspection, quality inspection, and shipment. As is customary in the industry,
the Company's commercial grade plastic package devices are wafer tested and then
shipped to high-volume assembly subcontractors in the Far East for assembly.
Thereafter, the assembled devices are returned to the Company for final testing
and shipment to customers. The Company continues to test raw material through
finished product at various stages in the manufacturing process, utilizing
automated test equipment capable of volume production.

MARKETING, SALES AND CUSTOMERS

         The Company markets its products worldwide to a broad range of
customers through its own sales efforts, a network of 12 national and
international independent sales representatives, and one domestic and 17
international electronics distributors. The Company concentrates its direct
marketing efforts on high-performance segments of the telecommunication, medical
imaging, and broadcast equipment markets in applications where high speed is
critical. Among the Company's OEM customers are Snell and Wilcox, Quantel,
Philips, Hitachi, Ikegami, NEC, Sony, Toshiba, Honeywell, SDX, Solectron,
Acuson, Pinnacle Microsystems, Lockheed Martin, Boeing, Hewlett Packard, and
Advanced Technologies Laboratories.

         The Company coordinates sales from its Sunnyvale, California facility.
The Company maintains a regional sales office in Humble, Texas to serve the
Eastern U.S., and services the West Coast from its Sunnyvale and San Diego
facilities. The Company also has a sales office in Warminster, England to
support the Company's international sales activities. The Company's sales
managers direct the activities of the independent sales representative firms and
focus on major target accounts. Sales representatives obtain orders on an agency
basis and the Company ships directly to its customers. Sales representatives
receive commissions on sales within their territories. Distributors purchase the
Company's products for resale, generally to a broad base of small to medium-size
customers. One national stocking distributor currently services North America.
As is customary in the industry, domestic distributors are entitled to certain
price rebates and limited stock rotation rights, for which the Company has made
a provision in its consolidated financial statements. During fiscal 2000 and
1999, sales through both international and domestic distributors accounted for
approximately 78% and 64%, respectively, of net sales, while direct sales to
OEMs accounted for approximately 22% and 36%, respectively, of net sales.

         In fiscal 2000 and 1999, All American Semiconductor (All American), the
Company's sole domestic distributor, accounted for approximately 31% and 35% of
net revenues, respectively. Also in fiscal 2000, Insight Memec, an international
distributor, accounted for approximately 10% of net revenues. In fiscal 1998,
SDX, MCM Japan, and Ambar Cascom accounted for approximately 27%, 12%, and 12%,
respectively, of net revenues. On October 6, 2000, the Company elected to
terminate All American as its exclusive domestic distributor effective December
31, 2000. See Item 3 - "Legal Proceedings."

         International sales are conducted by sales representatives and
distributors located in Belgium, Canada, Denmark, England, Finland, France,
Germany, Hong Kong, Israel, Italy, Japan, Korea, Netherlands, Spain, Sweden, and
Taiwan. During fiscal 2000, 1999, and 1998, the Company's export sales were
approximately 39%, 32%, and 47%, respectively, of net revenues (see Note 11 in
"Notes to Consolidated Financial Statements" contained in Item 8). The Company's
international sales are billed in United States dollars, and therefore,
settlements are not directly subject to currency exchange fluctuations. However,
changes in the relative value of the dollar may create pricing pressures for the
Company's products. Although the Company's international sales are subject to
certain export restrictions, including the Export Administration Amendments Act
of 1985 and the regulations promulgated thereunder, the Company has not
experienced any material difficulties because of these restrictions.

                                       5
<PAGE>

         The Company's domestic distributor markets products competitive with
the Company's products. The Company's independent sales representatives and
foreign distributors also may represent competitors of the Company.

         The Company warrants its products against defects in materials and
workmanship for a period of 12 months from the date of shipment. Warranty
expenses to date have been nominal.

BACKLOG

         As of November 28, 2000 and 1999, the Company's backlog was
approximately $1,435,100 and $1,933,000, respectively. The Company includes in
its backlog all released purchase orders shippable within the following 18
months, including orders from distributors. The Company's backlog, although
useful for scheduling production, does not represent actual sales and should not
be used as a measure of future sales or revenues at any particular time. In
accordance with accepted industry practice, orders on the backlog are subject to
cancellation without penalty at the option of the purchaser at any time prior to
shipment. Changes in delivery schedules and price adjustments that may be passed
on to distributors and credits for returned products are not reflected. The
Company produces catalog products that may be shipped from inventory within a
short time after receipt of a purchase order. The Company's business for its
catalog products, like the businesses of many companies in the semiconductor
industry, is characterized by short-term orders and shipment schedules rather
than by volume purchase contracts. For these reasons, the Company's backlog as
of any particular date is not representative of actual sales for any succeeding
period and the Company believes that its backlog is not a good indicator of
future revenues.

RESEARCH AND DEVELOPMENT

         The Company's engineering staff is involved in the design of integrated
circuits. In 2000, the Company's development efforts were focused on the
development of new digital processing circuits that address video image
processing and digital communications applications. The Company's product design
efforts are supplemented by computer aided design and simulation equipment. The
Company also has an experienced test-engineering group that works closely with
the designers to develop production test software. Research and development
expenditures were 14%, 11%, and 10% of sales in 2000, 1999, and 1998,
respectively. See "Selected Financial Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Consolidated
Statements of Operations" contained in Items 6, 7, and 8, respectively.

COMPETITION

         The semiconductor industry is intensely competitive and characterized
by rapid technological change and rates of product obsolescence, price erosion,
periodic shortage of materials, variations in manufacturing yields and
efficiencies, and increasing foreign competition. The industry includes many
major domestic and international companies that have substantially greater
financial, technical, manufacturing, and marketing resources than the Company.
In addition, there are many emerging companies that are attempting to obtain a
share of the existing market. The Company faces competition from other
manufacturers of high-performance integrated circuits, many of which have
advanced technological capabilities and internal wafer production capabilities.
The ability of the Company to compete in this rapidly evolving environment
depends on elements both in and outside the control of the Company. These
elements include: the Company's ability to develop new products in a timely
manner; the cost effectiveness of its manufacturing; the acceptance of new
products by customers; the speed at which customers incorporate the Company's
products into their systems; the continued access to advanced semiconductor
foundries; the number and capabilities of its competitors as well as general
economic conditions. In the area of high-performance DSP circuits, the Company
competes with Altera, Analog Devices, Fairchild Semiconductor, Genesis, Gennum,
Grey Chip, Harris, Lucent Technologies, Texas Instruments, and Xilinx, among
others.

PATENTS AND COPYRIGHTS

         Because of the rapidly changing technology in the semiconductor
industry, the Company relies primarily upon its design know-how, rather than
patents and copyrights, to develop and maintain its competitive position. The
Company attempts to protect its trade secrets and other proprietary information
through confidentiality agreements with employees, consultants, suppliers, and
customers, but there can be no assurance that those measures will be adequate to
protect the Company's interests.

                                       6
<PAGE>

         The Company is of the opinion that patent maskwork protection is of
less significance in the Company's business than factors such as the experience
and innovative skill of its personnel and the abilities of its management. There
can be no assurance that others will not develop or patent technology similar to
the Company's technology or copy or otherwise duplicate the Company's products.
The Company owns five patents awarded by the United States Patent Office.

         Since others have obtained patents covering various semiconductor
designs and processes, certain of the Company's present or future designs or
processes may be claimed to infringe upon the patents of third parties. The
Company has previously received, and may in the future receive, claims that one
or more aspects or uses of the Company's products infringe on patent or other
intellectual property rights of third parties. See Item 3 - "Legal Proceedings."
The Company does not believe that it infringes upon any known patents at this
time. If any such infringements exist or arise in the future, the Company may be
liable for damages and may, like many companies in the semiconductor industry,
find it necessary or desirable to obtain licenses relating to one or more of its
current or future products. Based on industry practice, the Company expects that
any necessary licenses or rights under patents could be obtained on conditions
that would not have a material adverse effect on the Company. There can be no
assurance, however, that licenses could in fact be obtained on commercially
reasonable terms, or at all, or that litigation would not occur. The Company's
inability to obtain such licenses or the occurrence of litigation could
adversely affect the Company.

FACTORS AFFECTING FUTURE RESULTS

         This Form 10-K report contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Any statements about the Company's
expectations, beliefs, plans, objectives, assumptions, or future events or
performance are not historical facts and may be forward-looking. Words and
phrases such as, anticipate, estimate, plans, projects, continuing, ongoing,
expect, believes, intends, and similar words or phrases may identify
forward-looking statements.

         Forward-looking statements involve estimates, assumptions, and
uncertainties that could cause actual results to differ materially from those
expressed in them. Any forward-looking statements are qualified in their
entirety by reference to the factors discussed throughout this Form 10-K report.
Among the key factors that could cause actual results to differ materially from
the forward-looking statements, include:

- Delay in product or technology development;
- Lack of market acceptance or demand for new products;
- The impact of competitive products and prices;
- Changes in economic conditions of the Company's various markets;
- Dependencies on silicon wafer suppliers and subcontracted assemblers and
  testers;
- The availability and terms of financing; and
- Opportunities or acquisitions the Company may pursue.

         Actual results could differ materially from those expressed in any
forward-looking statements made by the Company. Further, any forward-looking
statement applies only as of the date on which it is made. The Company is not
required to update any forward-looking statement to reflect events or
circumstances after the date on which such statement was made, or to reflect the
occurrence of unanticipated events.

Company-related Risks

Dependence on limited sources of silicon wafers

         The Company does not manufacture finished silicon wafers. Currently,
Taiwan Semiconductor Manufacturing Corporation (TSMC), in Taiwan, manufactures
essentially all of its silicon wafers. If TSMC interrupts or reduces its wafer
supply, the Company's operating results could be harmed. In the past, the
Company has experienced delays in obtaining wafers and in securing supply
commitments from its foundries.



                                       7
<PAGE>

         Other factors could disrupt the Company's wafer supply, which are
beyond its control. Since worldwide manufacturing capacity for silicon wafers is
limited, significant industry-wide increases in overall wafer demand or
interruptions in wafer supply could harm the Company. In addition, a future
disruption of TSMC's foundry operations as a result of a fire, earthquake, or
other natural disaster could disrupt its wafer supply and could harm future
operating results.

         Furthermore, the Company depends on its foundry to deliver reliable
silicon wafers with acceptable yields in a timely manner. If TSMC is unable to
produce silicon wafers that meet the Company's specifications, with acceptable
yields, for a prolonged period, operating results could be harmed. The Company's
revenue is derived from products based on advanced silicon wafer manufacturing
technology. The reliable manufacture of high performance semiconductor wafers is
a complicated and technically demanding process requiring:

- A high degree of technical skill;
- State-of-the-art equipment;
- The absence of defects in the masks used to print circuits on a wafer;
- The elimination of minute impurities and errors in each step of the
  fabrication process; and
- Effective cooperation between the wafer supplier and the circuit designer.

         As a result, the Company's foundry may experience difficulties in
achieving acceptable quality and yield levels when manufacturing its silicon
wafers.

Product development risks

         The semiconductor industry is a dynamic environment marked by rapid
product obsolescence. The Company's future success depends on its ability to
introduce new or improved products that meet critical customer needs, while
achieving acceptable profit margins. If it fails to introduce these new products
in a timely manner or these products fail to achieve market acceptance,
operating results would be harmed.

         The introduction of new products in a dynamic market environment
presents significant business challenges. Product development commitments and
expenditures must be made well in advance of product sales, while the success of
new products depends on accurate forecasts of long-term market demand and future
technology developments.

         Future revenue growth is dependent on market acceptance of new products
and the continued market acceptance of existing products. The success of these
products is dependent on a variety of specific technical factors, including
successful product definition; timely and efficient completion of product
design; timely and efficient implementation of wafer manufacturing and assembly
processes; and product performance, quality and reliability. If, due to these or
other factors, new products do not achieve market acceptance, the Company's
operating results would be harmed.

         Furthermore, to develop new products and maintain the competitiveness
of existing products, the Company needs to migrate to more advanced wafer
manufacturing processes that use larger wafer sizes and smaller device
geometries. Because it depends upon foundries to provide facilities and support
for its process technology development, the Company may experience delays in the
availability of advanced wafer manufacturing process technologies at its
existing or new wafer fabrication facilities (fabs). As a result, volume
production of its process technologies at the new fabs of TSMC or future
foundries may not be achieved. This could harm future operating results.

Assembly risks

         The Company relies on subcontractors to assemble devices with
acceptable quality and yield levels. As is common in the semiconductor industry,
the Company has occasionally experienced quality and yield problems in the past.
If it experiences prolonged quality or yield problems in the future, the
Company's operating results could be harmed.



                                       8
<PAGE>

         The majority of the Company's revenues are derived from semiconductor
devices assembled in advanced packages. This requires a complex process,
including a high degree of technical skill; state-of-the-art equipment; the
absence of defects in lead frames used to attach semiconductor devices to the
package; the elimination of raw material impurities and errors in each stage of
the process; and effective cooperation between the assembly subcontractor and
the device manufacturer. As a result, subcontractors could experience
difficulties in achieving acceptable quality and yield levels when assembling
the Company's semiconductor devices.

International operations

         The Company's silicon wafer supplier operates fabs located in Asia.
Finished silicon wafers are also assembled and tested by independent
subcontractors located in the Philippines, South Korea, and Taiwan. Economic,
financial, social, and political conditions in Asia have been volatile.
Financial difficulties, government actions or restrictions, prolonged work
stoppages, or any other difficulties experienced by the Company's suppliers
could harm its operating results.

         The Company also has many overseas customers. These export sales are
affected by unique risks frequently associated with foreign economies, including
governmental controls and trade restrictions; export license requirements and
restrictions on the export of technology; changes in local economic conditions;
political instability; changes in tax rates, tariffs, or freight rates;
interruptions in air traffic; and difficulties in staffing and managing foreign
sales offices. Significant changes in the economic climate in the foreign
countries to which the Company derives its export sales could harm future
operating results.

Fluctuation in operating results

         The Company's quarterly operating results have fluctuated and may
continue to fluctuate. Consequently, its operating results may fail to meet the
expectations of analysts and investors. As a result of industry conditions and
the following specific factors, quarterly operating results are more likely to
fluctuate and are more difficult to predict than a typical non-technology
company of similar size and maturity:

- General economic condition in the countries where the Company's products are
  sold;
- The timing of new product introductions by the Company and its competitors;
- Product obsolescence;
- The scheduling, rescheduling, and cancellation of large orders by customers;
- The cyclical nature of demand for customers' products;
- The Company's ability to develop new products and achieve volume production
  at new fabs;
- Changes in manufacturing yields;
- Adverse movements in exchange rates, interest rates, or tax rates; and
- The availability of adequate supply commitments from wafer foundries and
  assembly and test subcontractors.

         As a result of these and other factors, past financial results are not
necessarily good predictors of the Company's future operating results.

Fluctuations in stock price

         In recent years, the price of our common stock has fluctuated greatly.
These price fluctuations have been rapid and severe, and have left investors
little time to react. The price of our common stock may continue to fluctuate
greatly in the future due to a variety of factors, including shortfalls in
revenue or earnings from levels expected by analysts and investors;
quarter-to-quarter variations in operating results; and announcements of
technological innovations or new products by other companies.

Industry-related Risks

Cyclical nature of semiconductor industry

         The semiconductor industry is cyclical. The Company's financial
performance has been negatively impacted by significant downturns in the
semiconductor industry as a result of general reductions in inventory levels by
customers; excess production capacity; the cyclical nature of the demand for
products of semiconductor customers; and accelerated declines in the average
selling prices. If these or other conditions in the industry occur, the
Company's operating results could be harmed.



                                       9
<PAGE>

Competitiveness of semiconductor industry

         The semiconductor industry is highly competitive and many of the
Company's direct and indirect competitors have substantially greater financial,
technological, manufacturing, marketing, and sales resources. If it is unable to
compete successfully in this environment, the Company's operating results could
be harmed.

         The current level of competition is high and may increase as the
Company's market expands. The Company currently competes directly with companies
that have developed similar products. It also competes indirectly with numerous
semiconductor companies that offer products and solutions based on alternative
technologies. These direct and indirect competitors are established
multinational semiconductor companies, as well as emerging companies. In
addition, the Company may experience additional competition from foreign
companies in the future.

Ability to maintain adequate technical and management personnel

         The Company's future success greatly depends on its ability to attract
and retain highly qualified technical and management personnel. As a small
company, it is particularly dependent on a relatively small group of key
employees. Competition for skilled technical and management employees is intense
in the semiconductor industry. As a result, the Company may be unable to retain
its existing key technical and management employees, or attract additional
qualified personnel, which could harm its operating results.

EMPLOYEES

         As of October 1, 2000, the Company had 31 employees, consultants, and
part-time employees, of which 23 were full-time employees. The Company's ability
to attract and retain qualified personnel is an important factor in its
continued success. None of the Company's employees are represented by a
collective bargaining agreement, and the Company has never experienced any work
stoppage. The Company believes that its employee relations are good.

REGULATIONS

         Federal, state, and local regulations impose various environmental
controls on the discharge of chemicals and gases in connection with the wafer
manufacturing process. Since the Company relies on third party manufacturers and
its activities do not involve utilization of hazardous substances generally
associated with semiconductor processing, the Company believes such regulations
are unlikely to have a material affect on its business or operations.

ITEM 2. PROPERTIES

         The Company's executive offices, as well as its manufacturing and
principal research and design facilities, are located in approximately 21,600
square feet of space in Sunnyvale, California, pursuant to a lease expiring on
December 15, 2002. The Company maintains additional sales or field application
support offices in the metropolitan area of San Diego, California; Humble,
Texas; and Warminster, England. The Company believes that its facilities will be
adequate to meet its reasonably foreseeable needs and, if necessary, that
alternative facilities will be available to it on acceptable terms so as to meet
its requirements.

ITEM 3. LEGAL PROCEEDINGS

         From time to time, the Company receives demands from various parties
asserting patent claims. These demands are often not based on any specific
knowledge of the Company products or operations. Because of the uncertainties
inherent in litigation, the outcome of any such claim, including simply the cost
of a successful defense against such a claim, could have a material adverse
impact on the Company.



                                       10
<PAGE>

         In January 1998, the Company was contacted by the attorneys
representing the estate of Mr. Jerome Lemelson, charging that the Company
infringed on certain patents registered by Mr. Lemelson. The attorneys for the
estate have not filed suit, but have urged the Company to enter into a licensing
agreement with the estate in order to avoid litigation. The Company understands
a similar demand has been made upon other manufacturers of integrated circuits.
Should the estate file suit, the Company would vigorously defend itself in this
matter. However, because of the inherent uncertainties of litigation, the
outcome of this action could be unfavorable, in which event, the Company might
be required to pay damages and other expenses, which could have a material
adverse effect on the Company's financial position and results of operations. In
addition, the Company could be required to alter certain of its production
processes or products as a result of this matter.

         On July 28, 2000, the Company filed a Statement of Claim with the
American Arbitration Association in San Francisco, California, against All
American seeking a declaratory judgment that All American breached the inventory
stocking requirements and payment terms of their Exclusive Distributor Agreement
(the Distributor Agreement). The Company also seeks to recover any money damages
it has suffered as a result of such breaches. In the Distributor Agreement, the
Company appoints All American as its exclusive domestic distributor, except for
sales to certain specified OEMs, and All American agrees to, among other things,
maintain certain paid levels of inventory. All American has filed a response to
the Statement of Claim and a counterclaim against the Company and its president,
William J. Volz. All American alleges that the Company sold products in North
America without using All American as its distributor, and seeks to recover
money damages from such sales. The Company has filed an answer and affirmative
defenses to the counterclaim denying those allegations. On October 6, 2000, the
Company also sent a notice terminating the Distributor Agreement, effective
December 31, 2000, pursuant to its terms.

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

         No matters were submitted to a vote of the Company's security holders
during the last quarter of fiscal 2000.



                                       11
<PAGE>

                                     PART II

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

         The Company's Common Stock is traded under the symbol "LOGC" on the
Nasdaq National Market System. The following table sets forth, for the period
indicated, the high and low closing sale prices for the Company's Common Stock,
as reported by Nasdaq during the following calendar quarters:

          CALENDAR YEAR                  HIGH                   LOW
          -------------                  ----                   ---

          1998

          Fourth Quarter                 $ 1 15/16              $ 1 1/4


          1999

          First Quarter                  $ 2 31/32              $ 1 11/16
          Second Quarter                 $ 3 15/16              $ 2 3/8
          Third Quarter                  $ 4 13/16              $ 2 9/16
          Fourth Quarter                 $ 3 15/16              $ 1 7/8

          2000

          First Quarter                  $ 8 7/16               $ 3 1/8
          Second Quarter                 $ 6 1/8                $ 2 5/16
          Third Quarter                  $ 2 7/8                $ 1 3/4


HOLDERS

         As of December 5, 2000, there were approximately 3,500 holders of
record of the Company's Common Stock.

DIVIDENDS

         The Company has not paid any dividends on its Common Stock since its
incorporation. The Company has entered into bank credit agreements that preclude
the payment of dividends without the prior consent of the parties to such
agreements. See Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital Resources -
Financing."

ITEM 6. SELECTED FINANCIAL DATA

         The Company's fiscal year is comprised of 52 weeks of seven days, each
beginning on Monday and ending on Sunday, with each year's fiscal quarters
comprised of exactly 13 weeks. The Company's fiscal year 2000 ended October 1,
2000 and its fiscal year 1999 ended October 3, 1999. The Company's 1998 fiscal
period ended September 30, 1998 and consists of only nine months due to a change
in its fiscal year-end.

         The following table sets forth selected financial data for the Company
for the year ended October 1, 2000, the year ended October 3, 1999, the nine
month fiscal period ended September 30, 1998, the nine months ended September
30, 1997, and for the fiscal years ended December 31, 1997 and 1996. This
information has been derived from the Company's audited consolidated financial
statements, unless otherwise stated. Certain amounts have been restated to
reflect the correction of errors that arose in the year ended December 31, 1997.
This data should be read in conjunction with the consolidated financial
statements, related notes and other financial information included elsewhere in
this report.



                                       12
<PAGE>

(Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>




                                         Years Ended             Nine Months              Years Ended
                                ----------------------------        Ended                 December 31,
                                 October 1,       October 3,     September 30,    --------------------------
                                    2000             1999            1998             1997           1996
                                ------------    ------------     ------------     ------------   ------------
                                                 (Restated)       (Restated)       (Restated)
<S>                            <C>              <C>             <C>               <C>            <C>
Net revenues                   $     11,786     $     12,922    $       9,562     $     12,519   $     12,525

Research and
  development expenses         $      1,661     $      1,367    $         959     $      1,406   $      1,450

Net income (loss)              $        522     $        601    $      (6,334)    $       (558)  $        122

Basic and diluted
  income (loss)
  per common share             $       0.08     $       0.09    $       (1.03)    $      (0.09)  $       0.02

Weighted average
  common shares
  outstanding (thousands)             6,772            6,635            6,178            6,122          6,041

Working capital                $     14,114     $     12,031    $       9,385     $     15,121   $     16,641

Property and
  equipment (net)              $      2,424     $      3,542    $       4,775     $      4,950   $      4,204

Total assets                   $     17,589     $     21,244    $      23,502     $     27,397   $     26,500

Long-term liabilities          $         38     $        205    $         414     $      1,148   $      1,206

Shareholders' equity           $     16,845     $     15,934    $      14,984     $     20,568   $     21,126
</TABLE>



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

         Reported financial results may not be indicative of the financial
results of future periods. All non-historical information contained in the
following discussion constitutes forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These statements are not guarantees of future performance
and involve a number of risks and uncertainties, including but not limited to
operating results, new product introductions and sales, competitive conditions,
customer demand, capital expenditures and resources, manufacturing capacity
utilization, and intellectual property claims and defense. Factors that could
cause actual results to differ materially are included in, but not limited to,
those identified in "Factors Affecting Future Results." The Company undertakes
no obligation to publicly release the results of any revisions to these
forward-looking statements that may reflect events or circumstances after the
date of this report.

OVERVIEW

         Historically, the Company has been one of the smallest publicly traded
semiconductor manufacturers. Following its formation, the Company initially
developed plug-compatible second source products that were form, fit, and
function compatible with products offered by other manufacturers. Beginning in
1996, the Company began identifying unique, proprietary products driven by its
existing customer base. While this transition to proprietary products required
the Company to access advanced design automation tools and to increase the
number of people involved in product development, it enables the Company to
focus its sales channels and limit the costs of those channels, and to compete
in markets with pricing and delivery demands that are not as highly competitive
as the markets for second source products.



                                       13
<PAGE>

         The Company focus on DSP proprietary products continues. The Company
introduced a number of such products in 1997 and 1998, following its transition
to that focus. In fiscal 1999, the Company developed newer products that were
designed-in (incorporated) into end system level products in the HDTV market. In
fiscal 2000, the Company increased its efforts to develop chips for use in
wireless digital communications. The Company presently derives its revenues
primarily from the sale of semiconductor chips that perform high-speed DSP in
video image filtering and digital communications applications.

         The Company's increased focus on proprietary products had a dramatic
impact on the Company's financial results in fiscal 1998, when the Company
recorded significant write-downs of inventory and long-lived assets and incurred
severance costs as it recognized the obsolescence of its more mature, second
source products. In fiscal 2000 and 1999, the Company recognized fewer revenues
from the HDTV market than it anticipated because the ramp up in high definition
broadcasting was slower than independent market research had suggested would
occur. In addition, sales of the Company's existing products were adversely
impacted as broadcasters delayed planned incremental upgrades of facilities that
would have become obsolete as a result of the transition to television
broadcasting from analog to digital. The Company believes that the transition to
digital broadcasting will expand future opportunities for its newer products
that facilitate the processing of studio quality broadcast images.

         Notwithstanding the impact of the transition in the broadcasting
industry, the Company enjoyed improvements in balance sheet liquidity, reduced
indebtedness, and greatly improved cash flow. This improved financial
performance resulted from the Company's fiscal 1998 restructuring and from its
aggressive expense controls and capital expenditure limitations since that
restructuring.

         The Company's fiscal year is comprised of 52 weeks of seven days, each
beginning on Monday and ending on Sunday, with each year's fiscal quarters
comprised of exactly 13 weeks. The Company's fiscal year 2000 ended on October
1, 2000 and consisted of 364 days, and the Company's fiscal year 1999 ended on
October 3, 1999 and consisted of 368 days. The Company's 1998 fiscal period
ended on September 30, 1998 and consisted of only nine months due to a change in
fiscal year-end.

RESULTS OF OPERATIONS

Fiscal Year Ended October 1, 2000 compared to Fiscal Year Ended October 3, 1999

         Net revenues for the fiscal year ended October 1, 2000 were
$11,785,900, down nine percent from the $12,921,600 recorded in the fiscal year
ended October 3, 1999. The decrease is due to the continued transition to
proprietary products, the obsolescence of mature products, and the stalled
ramp-up in high definition broadcasting.

         Cost of revenues decreased from $8,126,200 in the fiscal year ended
October 3, 1999 to $7,278,800 in the fiscal year ended October 1, 2000. The
gross margin decreased from $4,795,400 for fiscal 1999 to $4,507,100 in fiscal
2000, due to the decrease in sales. Gross margin as a percentage of sales
increased from 37 percent in fiscal 1999 to 38 percent in fiscal 2000. This
increase in gross profit margin on revenue from product sales in fiscal 2000 was
due to improved margins on proprietary products and lower costs resulting from
the Company's expenditure controls since its fiscal 1998 restructuring.

         Research and development expenses were $1,660,600 in the fiscal year
ended October 1, 2000 compared to $1,367,400 in the fiscal year ended October 3,
1999. Research and development expenses as a percentage of net revenues
increased from 11 percent in fiscal 1999 to 14 percent in fiscal 2000. Research
and development expenses increased in fiscal 2000 compared to fiscal 1999 as a
result of increased staffing of more senior product development personnel.

         Selling, general and administrative expenses decreased nine percent
from $2,276,600 in the fiscal year ended October 3, 1999 to $2,076,200 in the
fiscal year ended October 1, 2000. As a percentage of net revenues, selling,
general and administrative expenses remained consistent at 18 percent for both
fiscal years.

                                       14
<PAGE>

         For the fiscal year ended October 1, 2000, operating income decreased
to $770,300 from $1,151,400 for the fiscal year ended October 3, 1999, due to
the above-mentioned factors. As a percentage of net revenues, operating income
decreased from nine percent in fiscal 1999 to seven percent in fiscal 2000.

         Interest expense decreased 45 percent from $571,600 in fiscal 1999 to
$314,100, as a result of the Company using its aggressive accounts receivable
collections to eliminate its bank borrowings during fiscal 2000.

         Due to the lack of revenue growth and increased spending for product
development, net earnings decreased from $600,600 for the fiscal year ended
October 3, 1999 to $522,400 for the fiscal year ended October 1, 2000.

Fiscal Year Ended October 3, 1999 compared to the Nine-Month Period Ended
September 30, 1998

         Net revenues for the fiscal year ended October 3, 1999 were
$12,921,600, up 35 percent from the $9,562,700 recorded in the nine-month fiscal
period ended September 30, 1998. The increase is due to the three additional
months in the full 12-month fiscal year in 1999.

         Cost of revenues increased from $7,252,100 in the nine-month period
ended September 30, 1998 to $8,126,200 in the fiscal year ended October 3, 1999.
The gross margin increased from a loss of $(1,861,800) for the nine-month period
in 1998 to gross profit of $4,795,400 in 1999, due to a restructuring charge in
fiscal 1998. Gross margin as a percentage of sales increased from (19) percent
in fiscal 1998 to 37 percent in fiscal 1999. This increase in gross profit
dollars and in gross profit margin on revenue from product sales in fiscal 1999
was due to improved margins and lower costs resulting from the restructuring
actions the Company took at the end of fiscal 1998, and from the effect of
inventory write downs adversely impacting margins and costs in fiscal 1998.

         Research and development expenses were $1,367,400 in the fiscal year
ended October 3, 1999 compared to $959,500 in the nine-month fiscal period ended
September 30, 1998. Research and development expenses as a percentage of net
revenues increased from 10 percent in fiscal 1998 to 11 percent in fiscal 1999.
Research and development expenses increased in fiscal 1999 compared to fiscal
1998 as a result of increased engineering staffing and the three-month longer
duration of fiscal 1999.

         Selling, general and administrative expenses decreased 28 percent from
$3,154,700 in the nine-month fiscal period ended September 30, 1998 to
$2,276,600 in the fiscal year ended October 3, 1999. As a percentage of net
revenues, selling, general and administrative expenses decreased from 33 percent
in fiscal 1998 to 18 percent in fiscal 1999, due to the Company's 1998
restructuring and increased efforts to control costs.

         For the fiscal year ended October 3, 1999, operating income increased
to $1,151,400 from a loss of $(5,976,000) for the nine-month fiscal period ended
September 30, 1998, due to the above-mentioned factors. As a percentage of net
revenues, operating income increased from (62) percent in fiscal 1998 to nine
percent in fiscal 1999.

         Interest expense increased from $434,400 in fiscal 1998 to $571,600 for
fiscal 1999, as a result of higher interest rates, created when the Company's
lender increased its "prime rates" from which the Company's interest rates are
derived, bank fees associated with the Company's credit facility, which has been
replaced, the establishment of the Company's new credit facility, and an
additional three months contained in the full 12-month fiscal year in 1999.

         As a result of the foregoing, net earnings increased from a loss of
$(6,333,700) for the nine-month fiscal period ended September 30, 1998 to
$600,600 for the fiscal year ended October 3, 1999.



                                       15
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         During fiscal 2000, the Company's after-tax net cash flow (net earnings
of $522,400 plus non-cash items of $1,075,700) along with a decrease in accounts
receivable of $3,398,100, was offset by a slight growth in inventories of
$344,000 and a pay-down of accounts payable of $672,900. These items, along with
other net cash flow items from operations, produced a total of $4,088,000 in net
cash from operating activities. Capital expenditures used $247,800 in cash.
Repayment of long-term capital lease obligations, related party notes payable,
and bank borrowings used $3,921,500 in cash. As a result, the Company increased
its cash and cash equivalents by $515,600 during fiscal 2000.

         During fiscal 1999, the Company's after-tax net cash flow (net earnings
of $600,600 plus non-cash items of $1,926,000) along with a decrease in
inventories of $697,300, was offset by growth in accounts receivable of $260,000
and a pay-down of accounts payable of $867,200. These items, along with other
net cash flow items from operations, produced a total of $2,050,900 in net cash
from operating activities. Capital expenditures and increases to other assets
used $141,500 in cash. Bank borrowing and loans from two principal shareholders
provided $943,300 in cash, and repayment of long-term capital lease obligations
and bank borrowings used $3,106,900 in cash. The Company collected a $307,500
note receivable in May 1999. As a result, cash and cash equivalents increased by
$94,800 during fiscal 1999.

         During fiscal 1998, the Company's after-tax net cash flow (net loss of
$6,333,700 plus non-cash items of $5,866,400) along with increases in
inventories of $436,500, decreases in accounts receivables of $2,228,400, and
other net cash flow items from operations, used a total of $1,682,500 for
operating activities. Capital expenditures and increases to other assets used
$293,500 in cash. Bank borrowing provided $2,325,000 in cash, and repayment of
long-term capital lease obligations and bank borrowings used $1,044,000 in cash.
The Company also raised $750,000 in additional equity in September 1998. As a
result, cash and cash equivalents increased by $55,000 during the 1998 period.

         The Company has addressed its requirements for working capital by
reducing expenditures, accelerating accounts receivable collections, and by
shifting its focus to higher margin products. The Company believes that these
actions combined with anticipated after-tax cash earnings, and reductions in the
levels of inventories as well as the financing available under its existing bank
lines of credit, will be sufficient to support its working capital and capital
expenditure requirements for the next 12 months.

Working Capital

         The Company's investment in inventories has been significant and will
continue to be significant in the future. Over prior periods, the Company, due
to the nature of its business, has maintained high levels of inventories in
order to be responsive to its customer base. As it continues to shift from more
competitive second source products to proprietary sole source products, the
Company believes it will be able to streamline its inventories. It also intends
to continue its shortened accounts receivable collection cycle by re-focusing on
direct sales to customers rather than through distribution channels.

         The Company relies on third party suppliers for its raw materials,
particularly its processed wafers, for which there is currently one primary
supplier, and as a result, maintains substantial inventory levels to protect
against disruption in supplies. The Company has periodically experienced
disruptions in obtaining wafers from its suppliers. As the Company continues to
shift towards higher margin proprietary products, it expects to be able to
reduce inventory levels by streamlining its product offerings.

         Due to customer order scheduling, up to 80% of the quarterly revenues
were often shipped in the last month of the quarter, so a large portion of the
shipments included in year-end accounts receivable were not yet due per the
Company's net 30-day terms. This, combined with the fact that the Company's
domestic distributor (which made up 31% and 35% of the Company's 2000 and 1999
revenues, respectively) often paid beyond the Company's terms, resulted in
year-end accounts receivable balances being at their highest point for the
respective period.



                                       16
<PAGE>

         In fiscal 2000, the Company has been able to reduce its accounts
receivable levels through increased interaction with its customers to spread
their orders and shipments more evenly between months and through added pressure
on its domestic distributor to pay within the Company's terms.

         Although current levels of inventory impact the Company's liquidity,
the Company believes that these items are a cost of doing business as a fab-less
operation. The Company continues to evaluate alternative suppliers to diversify
its risk of supply disruption. However, this requires a significant investment
in product development to tool with new suppliers. Such efforts compete for the
Company's limited product development resources. The Company seeks to achieve
on-going reductions in inventory, although there can be no assurance it will be
successful.

Financing

         The Company's previous line of credit facilities expired on July 26,
2000 and have been replaced by a $2,000,000 revolving line of credit with
Comerica Bank-California, which matures July 31, 2001. The line of credit bears
interest at the bank's prime rate plus 0.25%, is secured by all of the Company's
assets, and is guaranteed, in part, by a federal agency. The borrowings under
the line of credit are to finance the cost of manufacturing, producing,
purchasing, or selling the Company's finished goods and services, which are
intended for export. The Company is required to maintain a quarterly minimum
quick ratio of 1.1 to 1.0, maintain a quarterly debt-to-effective tangible net
worth rate of not more than 0.60 to 1.0, maintain a quarterly effective tangible
net worth of at least $16.5 million plus 50 percent of the previous quarter's
cumulative net earnings, and have positive net earnings as of the end of each
fiscal year. Borrowings supported by export-related inventory are required to
not exceed 70% of the total outstanding borrowings. As of October 1, 2000, the
Company had no outstanding borrowings under its line of credit, and was in
compliance with its covenants.

         Under the terms of its line of credit, the Company is precluded from
paying any dividends without the consent of the parties to such agreements, even
if the Company is in compliance with all of the financial covenants.

         While the Company will continue to evaluate debt and equity financing
opportunities, it believes its financing arrangements and cash flow generated
from operations provide an adequate base of liquidity to fund operations and
meet the capital needs to support the Company's operations.

New Accounting Pronouncements

         In June 1999, the Financial Accounting Standards Board (FASB) issued
SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS
No. 133 requires companies to recognize all derivative contracts as either
assets or liabilities in the balance sheet and to measure them at fair value. If
certain conditions are met, a derivative may be specifically designated as a
hedge, the objective of which is to match the timing of gain or loss recognition
on the hedging derivative with the recognition of (i) the changes in the fair
value of the hedged assets or liabilities that are attributable to the hedged
risk or (ii) the earnings effect of the hedged forecasted transaction. For a
derivative not designated as a hedging instrument, the gain and loss is
recognized in income in the period of change. In June 2000, the FASB issued SFAS
No. 137, Accounting for Derivative Instruments and Hedging Activities - Deferral
of the Effective Date of FASB Statement No. 133, which amends SFAS No. 133 to be
effective for all fiscal quarters of all fiscal years beginning after June 15,
2000.

         Historically, the Company has not entered into derivative contracts
either to hedge existing risks or for speculative purposes. Accordingly, the
Company does not expect the adoption of the new standard to have a material
impact on the Company's financial position, results of operations, or cash
flows.

                                       17
<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company conducts all of its transactions, including those with
foreign suppliers and customers, in U.S. dollars. It is therefore not directly
subject to the risks of foreign currency fluctuations and does not hedge or
otherwise deal in currency instruments in an attempt to minimize such risks. Of
course, demand from foreign customers and the ability or willingness of foreign
suppliers to perform their obligations to the Company may be affected by the
relative change in value of such customer or supplier's domestic currency to the
value of the U.S. dollar. Furthermore, changes in the relative value of the U.S.
dollar may change the price of the Company's prices relative to the prices of
its foreign competitors. The Company also does not hold any market risk
sensitive instruments that are not considered cash under generally accepted
accounting principles. The Company's credit facilities bear interest at rates
determined from the prime rate of the Company's lender; therefore, changes in
interest rates affect the amount of interest that the Company is required to pay
thereunder.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND CONSOLIDATED
FINANCIAL STATEMENT SCHEDULES

CONSOLIDATED FINANCIAL STATEMENTS:                                          Page
----------------------------------                                          ----

Report of Independent Certified Public Accountants............................19
Consolidated Balance Sheets, October 1, 2000 and October 3, 1999..............20
Consolidated Statements of Operations, years ended
   October 1, 2000 and October 3, 1999, and nine months
   ended September 30, 1998...................................................21
Consolidated Statements of Shareholders' Equity,
   years ended October 1, 2000 and October 3, 1999, and nine
   months ended September 30, 1998............................................22
Consolidated Statements of Cash Flows, years ended
   October 1, 2000 and October 3, 1999, and nine months
   ended September 30, 1998...................................................23
Summary of Accounting Policies................................................24
Notes to Consolidated Financial Statements....................................28

CONSOLIDATED FINANCIAL STATEMENT SCHEDULE:
------------------------------------------

Schedule II - Valuation and Qualifying Accounts...............................38




                                       18
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Shareholders
LOGIC Devices Incorporated
Sunnyvale, California

We have audited the accompanying consolidated balance sheets of LOGIC Devices
Incorporated as of October 1, 2000 and October 3, 1999, and the related
consolidated statements of operations, shareholders' equity, and cash flows for
the years ended October 1, 2000 and October 3, 1999 and the nine months ended
September 30, 1998. We have also audited Schedule II - Valuation and Qualifying
Accounts (the Schedule). These financial statements and the Schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and the Schedule based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of LOGIC Devices
Incorporated at October 1, 2000 and October 3, 1999, and the results of their
operations and their cash flows for the years ended October 1, 2000 and October
3, 1999 and the nine months ended September 30, 1998, in conformity with
generally accepted accounting principles.

Also, in our opinion, the Schedule presents fairly, in all material respects,
the information set forth therein.

As disclosed in Note 10 to the consolidated financial statements, the Company
restated its previously issued 1999 financial statements, relating primarily to
the accounting for certain purchased and leased assets.


                                /s/ BDO Seidman, LLP
                                ------------------------
                                BDO Seidman, LLP

San Francisco, California
November 7, 2000



                                       19
<PAGE>
<TABLE>
<CAPTION>

                           LOGIC DEVICES INCORPORATED

                           CONSOLIDATED BALANCE SHEETS

                                                                                October 1,              October 3,
                                                                                      2000                    1999
------------------------------------------------------------------------------------------------------------------
                                                                                                        (Restated)
<S>                                                                       <C>                    <C>
Assets (Note 6):

Current
     Cash and cash equivalents                                            $        753,300       $         237,700
     Accounts receivable, net of allowance for doubtful
       accounts of $20,000 and $253,500, respectively
       (Notes 11 and 12)                                                         1,648,800               4,813,400
     Inventories (Notes 1, 2 and 12)                                            12,182,300              11,838,300
     Prepaid expenses and other current assets                                     235,300                 178,900
     Income taxes receivable (Note 7)                                                    -                  68,000
                                                                           ---------------        ----------------
         Total current assets                                                   14,819,700              17,136,300

Property and equipment, net (Notes 3, 10 and 13)                                 2,423,700               3,541,600

Other assets (Notes 1, 5 and 10)                                                   345,100                 566,400
                                                                           ---------------        ----------------

                                                                          $     17,588,500       $      21,244,300
                                                                           ===============        ================

Liabilities and shareholders' equity:

Current
     Bank borrowings (Note 6)                                             $              -       $       3,490,000
     Accounts payable                                                               45,300                 718,200
     Accrued payroll and vacation (Notes 1 and 10)                                 153,500                 205,900
     Accrued commissions                                                           115,300                  40,000
     Other accrued expenses                                                        191,300                 182,800
     Notes payable-related party (Note 4)                                                -                 250,000
     Current portion, capital lease obligations
         (Notes 3, 8, 10 and 13)                                                   194,200                 218,300
     Income taxes payable (Note 7)                                                   5,200                       -
                                                                           ---------------        ----------------
         Total current liabilities                                                 704,800               5,105,200

Capital lease obligations, less current portion
     (Notes 3, 8, 10 and 13)                                                        38,300                 205,400
                                                                           ---------------        ----------------

Total liabilities                                                                  743,100               5,310,600
                                                                           ---------------        ----------------

Commitments and contingencies (Notes 8 and 14)

Shareholders' equity (Notes 4, 9 and 10)
     Preferred stock, no par value; 1,000,000 shares
       authorized; 5,000 designated as Series A;
       0 shares issued and outstanding                                                   -                       -
     Common stock, no par value; 10,000,000 shares
       authorized; 6,841,888 and 6,650,488 shares
       issued and outstanding                                                   18,522,700              18,133,400
     Accumulated deficit                                                        (1,677,300)             (2,199,700)
                                                                           ---------------        ----------------

Total shareholders' equity                                                      16,845,400              15,933,700
                                                                           ---------------        ----------------

                                                                          $     17,588,500       $      21,244,300
                                                                           ===============        ================
</TABLE>

                     See accompanying summary of accounting
            policies and notes to consolidated financial statements.



                                       20
<PAGE>
<TABLE>
<CAPTION>

                           LOGIC DEVICES INCORPORATED

                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                                                                       Nine Months
                                                              Year Ended           Year Ended                Ended
                                                              October 1,           October 3,        September 30,
                                                                    2000                 1999                 1998
------------------------------------------------------------------------------------------------------------------
<S>                 <C>    <C>                         <C>                  <C>                  <C>
Net revenues (Notes 11 and 12)                         $      11,785,900    $      12,921,600    $       9,562,700

Cost of revenues (Notes 1, 11 and 12)                          7,278,800            8,126,200            7,252,100

Inventory write-down (Note 1)                                          -                    -            4,172,400
                                                        ----------------     ----------------     ----------------

Gross margin                                                   4,507,100            4,795,400           (1,861,800)
                                                        ----------------     ----------------     ----------------

Operating expenses:
     Research and development                                  1,660,600            1,367,400              959,500
     Selling, general and administrative                       2,076,200            2,276,600            3,154,700
                                                        ----------------     ----------------     ----------------

Total operating expenses                                       3,736,800            3,644,000            4,114,200
                                                        ----------------     ----------------     ----------------

Income (loss) from operations                                    770,300            1,151,400           (5,976,000)
                                                        ----------------     ----------------     ----------------

Other (income) expense:
     Interest expense                                            314,100              571,600              434,400
     Interest income                                              (8,100)                (400)                (100)
     Interest income on shareholder notes                              -                    -              (50,700)
     Other (income) expense                                      (47,900)             (40,400)              18,800
                                                        ----------------     ----------------     ----------------

Total other expense                                              258,100              530,800              402,400
                                                        ----------------     ----------------     ----------------

Income (loss) before provision for
     income taxes                                                512,200              620,600           (6,378,400)

Benefit (provision) for income taxes (Note 7)                     10,200              (20,000)              44,700
                                                        ----------------     ----------------     ----------------

Net income (loss)                                      $         522,400    $         600,600    $      (6,333,700)
                                                        ================     ================     ================

Basic and diluted income (loss) per share              $            0.08    $            0.09    $           (1.03)
                                                        ================     ================     ================

Basic weighted average
     common shares outstanding                                 6,771,826            6,635,427            6,178,458
                                                        ================     ================     ================

Diluted weighted average
     common shares outstanding                                 6,892,610            6,635,427            6,178,458
                                                        ================     ================     ================
</TABLE>


                     See accompanying summary of accounting
            policies and notes to consolidated financial statements.



                                       21
<PAGE>
<TABLE>
<CAPTION>

                           LOGIC DEVICES INCORPORATED

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY



                                                                                                          Retained
                                                        Common Stock                    Common            Earnings
                                               -----------------------------             Stock        (Accumulated
                                                     Shares           Amount        Subscribed            Deficit)            Total
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                        (Restated)
<S>                                               <C>         <C>               <C>              <C>                 <C>
Balances, December 31, 1997,
     as previously reported                       6,121,750   $   17,341,900    $     (307,500)  $       3,692,600   $   20,727,000

Prior period adjustment (Note 10)                         -                -                 -            (159,200)        (159,200)
                                               ------------    -------------     -------------    ----------------    -------------

Balances, December 31, 1997,
     restated                                     6,121,750       17,341,900          (307,500)          3,533,400       20,567,800

Sales of common stock (Note 4)                      510,638          750,000                 -                   -          750,000

Net loss                                                  -                -                 -          (6,333,700)      (6,333,700)
                                               ------------    -------------     -------------    ----------------    -------------

Balances, September 30, 1998                      6,632,388       18,091,900          (307,500)         (2,800,300)      14,984,100

Issuance of common stock on
     exercise of stock options (Note 9)              18,100           41,500                 -                   -           41,500

Proceeds from common stock
     subscribed (Note 4)                                  -                -           307,500                   -          307,500

Net income                                                -                -                 -             600,600          600,600
                                               ------------    -------------     -------------    ----------------    -------------

Balances, October 3, 1999                         6,650,488   $   18,133,400    $            -   $      (2,199,700)  $   15,933,700

Issuance of common stock on
     exercise of stock options (Note 9)              91,400          242,400                 -                   -          242,400

Issuance of common stock on
     exercise of warrants (Note 4)                  100,000          146,900                 -                   -          146,900

Net income                                                -                -                 -             522,400          522,400
                                               ------------    -------------     -------------    ----------------    -------------

Balances, October 1, 2000                         6,841,888   $   18,522,700    $            -   $      (1,677,300)  $   16,845,400
                                               ============    =============     =============    ================    =============
</TABLE>


                     See accompanying summary of accounting
            policies and notes to consolidated financial statements.



                                       22
<PAGE>
<TABLE>
<CAPTION>

                           LOGIC DEVICES INCORPORATED

                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                                                               Nine Months
                                                                       Year Ended          Year Ended                Ended
                                                                       October 1,          October 3,        September 30,
                                                                             2000                1999                 1998
--------------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>                  <C>                  <C>
Cash flows from operating activities:
     Net income (loss)                                          $         522,400    $        600,600     $     (6,333,700)
     Adjustments to reconcile net income (loss)
       to net cash provided by (used in) operating
       activities:
           Depreciation and amortization                                1,357,200           1,842,000            1,494,100
           Gain on disposal of capital equipment                          (48,000)                  -               (2,500)
           Allowance for doubtful accounts                               (233,500)             84,000                    -
           Deferred income taxes                                                -                   -              202,400
           Inventory write-down (Note 1)                                        -                   -            4,172,400
           Changes in assets and liabilities:
                Accounts receivable                                     3,398,100            (344,000)           2,228,400
                Inventories                                              (344,000)            697,300           (4,608,900)
                Prepaid expenses and other current assets                   4,100             193,200               39,900
                Income taxes receivable                                    68,000              22,000              432,000
                Accounts payable                                         (672,900)           (867,200)             574,000
                Accrued payroll and vacation                              (52,400)            (14,000)              92,400
                Accrued commissions                                        75,300                   -                    -
                Other accrued expenses                                      8,500            (163,000)              27,000
                Income taxes payable                                        5,200                   -                    -
                                                                 ----------------     ---------------      ---------------
Net cash provided by (used in) operating activities                     4,088,000           2,050,900           (1,682,500)
                                                                 ----------------     ---------------      ---------------

Cash flows from investing activities:
     Capital expenditures                                                (247,800)           (430,200)            (924,800)
     Proceeds from sale of capital equipment                              158,100                   -                2,500
     Other assets                                                          49,500             288,700              628,800
                                                                 ----------------     ---------------      ---------------
Net cash used in investing activities                                     (40,200)           (141,500)            (293,500)
                                                                 ----------------     ---------------      ---------------

Cash flows from financing activities:
     Proceeds from issuance of common stock                               389,300              41,500              750,000
     Receipt of common stock subscription receivable                            -             307,500                    -
     Proceeds from bank borrowings                                              -             693,300            2,325,000
     Repayments of bank borrowings                                     (3,490,000)         (2,553,300)            (500,000)
     Proceeds from notes payable, related party                                 -             250,000                    -
     Payment of notes payable, related party                             (250,000)                  -                    -
     Payments of capital lease obligations                               (181,500)           (553,600)            (544,000)
                                                                 ----------------     ---------------      ---------------
Net cash (used in) provided by financing activities                    (3,532,200)         (1,814,600)           2,031,000
                                                                 ----------------     ---------------      ---------------

Net increase in cash and cash equivalents                                 515,600              94,800               55,000

Cash and cash equivalents, beginning of period                            237,700             142,900               87,900
                                                                 ----------------     ---------------      ---------------

Cash and cash equivalents, end of period                        $         753,300    $        237,700     $        142,900
                                                                 ================     ===============      ===============
</TABLE>


                     See accompanying summary of accounting
            policies and notes to consolidated financial statements.



                                       23
<PAGE>

                           LOGIC DEVICES INCORPORATED

                         SUMMARY OF ACCOUNTING POLICIES


The Company

LOGIC Devices Incorporated (the Company) develops and markets high-performance
integrated circuits. The Company's products include high speed digital signal
processing chips that are used in digital communications, broadcast and medical
imaging processing applications, instrumentation, and smart weapons systems.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiary, LOGIC Devices International, a foreign
sales corporation. All significant intercompany accounts and transactions have
been eliminated in consolidation.

Change in Fiscal Year

In 1998, the Company changed its reporting period from a calendar year ending
December 31 to a fiscal year ending September 30.

Effective September 16, 1999, the Company adopted a fiscal year consisting of 52
weeks of seven days, ending on Sundays. As a result of this change, the
Company's 2000 and 1999 fiscal years ended on October 1 and October 3,
respectively.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements, and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of
three months or less to be cash equivalents.

Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market
(Notes 1, 2 and 12).

Property and Equipment

Property and equipment are stated at cost. Depreciation on equipment is
calculated on the straight-line method over the estimated useful lives of the
assets, generally three to seven years. Leasehold improvements and assets held
under capital lease are amortized on a straight-line basis over the shorter of
the lease terms or the estimated lives of the assets. Certain tooling costs are
capitalized by the Company and are amortized on a straight-line basis over the
shorter of the related product life cycle or five years.



                                       24
<PAGE>

                           LOGIC DEVICES INCORPORATED

                         SUMMARY OF ACCOUNTING POLICIES


Costs in Excess of Fair Value of Net Assets Acquired

The Company amortizes costs in excess of the fair value of identifiable net
assets acquired on a straight-line basis, over ten years.

Capitalized Software Costs

Internal test computer software development costs are capitalized as incurred
during the application development stage, as defined by SOP 98-1, Accounting for
the Costs of Computer Software Developed or Obtained for Internal Use. The
capitalized software costs are amortized on a straight-line basis over the
shorter of the related expected product life cycle or five years.

Revenue Recognition

Revenue is generally recognized upon shipment of product. Sales to distributors
are made pursuant to agreements that provide the distributors certain rights of
return and price protection on unsold merchandise. Revenues from such sales are
recognized upon shipment, with a provision for estimated returns and allowances
recorded at that time.

Income Taxes

The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards (SFAS) No. 109, Accounting for Income Taxes. Deferred
income tax assets and liabilities are recognized based on the temporary
differences between the financial statement and income tax basis of assets,
liabilities, and carryforwards using enacted tax rates. Valuation allowances are
established for deferred tax assets to the extent of the likelihood that the
deferred tax assets may not be realized.

Income (Loss) Per Common Share

Basic income (loss) per share is computed by dividing the net income (loss)
attributable to common shares, by the weighted average number of common shares
outstanding during each period. Diluted income (loss) per share is similar to
basic income (loss) per share, except that the weighted average number of common
shares outstanding is increased to reflect the dilutive effect of potential
common shares, such as those issuable upon the exercise of stock options or
warrants, contingent shares, and the conversion of preferred stock, as if they
had been issued.

For the fiscal years ended October 1, 2000 and October 3, 1999, there is no
difference between basic and diluted income (loss) per share, as the number of
stock options with a dilutive effect was minimal in fiscal 2000, and there were
no dilutive stock options in fiscal 1999. For fiscal 2000 and 1999, options to
purchase 634,000 and 1,061,400 shares of common stock were excluded from the
computation of diluted income (loss) per share since their effect would be
antidilutive.

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, accounts receivable, and
accounts payable approximate fair value because of the short maturity of these
items. The Company's bank borrowings approximate book value because the interest
rate fluctuates with changes in the prime rate. The Company's capital lease
obligations and notes payable-related party approximate fair value, based on
rates currently available from the bank for debt with similar terms and
maturities.



                                       25
<PAGE>

                           LOGIC DEVICES INCORPORATED

                         SUMMARY OF ACCOUNTING POLICIES


Long-Lived Assets

Long-lived assets, including property and equipment, goodwill, and other
intangible assets, are assessed for possible impairment whenever events or
changes in circumstances indicate that the carrying amounts may not be
recoverable, or whenever management has committed to a plan to dispose of the
assets. Such assets are carried at the lower of book value or fair value as
estimated by management based on appraisals, current market value, and
comparable sales value, as appropriate. Assets to be held and used affected by
such impairment loss are depreciated or amortized at their new carrying amounts
over the remaining estimated life; assets to be sold or otherwise disposed of
are not subject to further depreciation or amortization. In determining whether
an impairment exists, the Company uses undiscounted future cash flows without
interest charges compared to the carrying value of the assets.

Stock-based Compensation

The Company has adopted the provisions of SFAS No. 123, Accounting for
Stock-Based Compensation. Under this standard, companies are encouraged, but not
required, to adopt the fair value method of accounting for employee stock-based
transactions. Under the fair value method, compensation cost is measured at the
grant date based on the fair value of the award and is recognized over the
service period, which is usually the vesting period. Companies are permitted to
continue to account for employee stock-based transactions under Accounting
Principles Board (APB) No. 25, Accounting for Stock Issued to Employees, but are
required to disclose pro forma net income (loss) and income (loss) per share as
if the fair value method had been adopted. The Company has elected to continue
to account for employee stock-based compensation under APB No. 25.

Segment Reporting

The Company is organized in a single operating segment for purposes of making
operating decisions and assessing performance. The president (the chief
operating decision maker) evaluates performance, makes operating decisions, and
allocates resources based on financial data consistent with the presentation in
the accompanying consolidated financial statements.

Adoption of New Accounting Pronouncements

In June 1999, the Financial Accounting Standards Board (FASB) issued SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities. SFAS No. 133
requires companies to recognize all derivative contracts as either assets or
liabilities in the balance sheet and to measure them at fair value. If certain
conditions are met, a derivative may be specifically designated as a hedge, the
objective of which is to match the timing of gain or loss recognition on the
hedging derivative with the recognition of (i) the changes in the fair value of
the hedged assets or liabilities that are attributable to the hedged risk or
(ii) the earnings effect of the hedged forecasted transaction. For a derivative
not designated as a hedging instrument, the gain and loss is recognized in
income in the period of change. In June 2000, the FASB issued SFAS No. 137,
Accounting for Derivative Instruments and Hedging Activities - Deferral of the
Effective Date of FASB Statement No. 133, which amends SFAS No. 133 to be
effective for all fiscal quarters of all fiscal years beginning after June 15,
2000.

Historically, the Company has not entered into derivative contracts either to
hedge existing risks or for speculative purposes. Accordingly, the Company does
not expect the adoption of the new standard to have a material impact on the
Company's financial position, results of operations, or cash flows.



                                       26
<PAGE>

                           LOGIC DEVICES INCORPORATED

                         SUMMARY OF ACCOUNTING POLICIES


In December 1999, the SEC staff released Staff Accounting Bulletin (SAB) No.
101, Revenue Recognition in Financial Statements, which provides interpretive
guidance on the recognition, presentation, and disclosure of revenue in
financial statements. SAB 101 must be applied to financial statements no later
than the quarter ended September 30, 2000. There was no material impact from the
application of SAB 101 on the Company's financial position, results of
operations, or cash flows.

In March 2000, the FASB issued Interpretation No. 44 (FIN 44), Accounting for
Certain Transactions Involving Stock Compensation, an interpretation of APB
Opinion No. 25. FIN 44 clarifies the application of Opinion No. 25 for (a) the
definition of an employee for purposes of applying Opinion No. 25, (b) the
criteria for determining whether a plan qualifies as a non-compensatory plan,
(c) the accounting consequences of various modifications to the terms of a
previously fixed stock option or award, and (d) the accounting for an exchange
of stock compensation awards in a business combination. FIN 44 became effective
July 2, 2000, but certain conclusions cover specific events that occur after
either December 15, 1998, or January 12, 2000. FIN 44 did not have a material
impact on the Company's financial position, results of operations, or cash
flows.



                                       27
<PAGE>

                           LOGIC DEVICES INCORPORATED

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   BUSINESS RESTRUCTURING

     In September 1998, in connection with management's plan (the Plan) to
     pursue a proprietary product strategy in the High Definition Television
     (HDTV) market, reduce costs, and improve operating efficiencies, the
     Company recorded a write-down of inventory for $4,172,400. In addition, the
     Company wrote-off $315,600 of prepaid purchases from a wafer supplier. The
     principal actions in the Plan involved the shift of the Company's product
     lines from "plug-compatible" integrated circuits to proprietary products,
     the changing of the make-up of its marketing sales force, and the
     consolidation of its support infrastructure.

2.   INVENTORIES

     A summary of inventories follows:

                                                     October 1,       October 3,
                                                           2000             1999
                                                  -------------    -------------

         Raw materials                           $    3,826,400   $    3,618,800
         Work-in-process                              5,573,900        4,908,800
         Finished goods                               2,782,000        3,310,700
                                                  -------------    -------------

                                                 $   12,182,300   $   11,838,300
                                                  =============    =============


3.   PROPERTY AND EQUIPMENT

     A summary of property and equipment follows:

                                                     October 1,       October 3,
                                                           2000             1999
                                                  -------------    -------------

         Equipment                               $    4,838,200   $    5,699,600
         Tooling costs                                2,962,500        5,206,600
         Leasehold improvements                         225,200          225,200
                                                  -------------    -------------
                                                      8,025,900       11,131,400

         Less accumulated depreciation and
           amortization                               5,602,200        7,589,800
                                                  -------------    -------------

                                                 $    2,423,700   $    3,541,600
                                                  =============    =============

     Equipment under capital lease obligations aggregated $362,800 and
     $1,013,400 as of October 1, 2000 and October 3, 1999, with related
     accumulated amortization of $179,100 and $605,300, respectively. For fiscal
     years 2000, 1999, and 1998, amortization expense for equipment under
     capital lease obligations was $120,000, $225,200, and $462,400,
     respectively.

4.   RELATED PARTY TRANSACTIONS

     During 1999, the Company received funds pursuant to two notes payable from
     principal shareholders aggregating $250,000. The notes bore interest at the
     bank's prime rate (8.25% at October 3, 1999) plus 2% and were paid in full
     during the fiscal year ended October 1, 2000.



                                       28
<PAGE>

                           LOGIC DEVICES INCORPORATED

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     In 1995, the Company granted 220,000 warrants to three non-employee
     directors to purchase the Company's common stock. In 1996, 120,000 of these
     warrants were exercised at the original exercise price of $2.5625 via the
     issuance of two promissory notes bearing interest at a reference rate plus
     2%. These notes were included in common stock subscribed in the
     accompanying consolidated financial statements, and were repaid during
     fiscal 1999. The remaining warrants for 100,000 shares were exercised at
     $1.48675 on February 15, 2000.

     During 1998, the Company sold a total of 510,638 shares of common stock to
     the President of the Company and a partnership consisting of trusts,
     beneficiaries of which are family members of one of the Company's
     directors, but not the director himself, for an aggregate price of
     $750,000.

5.   OTHER ASSETS

     A summary of other assets follows:
<TABLE>
<CAPTION>

                                                                                   October 1,           October 3,
                                                                                         2000                 1999
                                                                                -------------        -------------
<S>                                                                            <C>                  <C>
         Capitalized software, net of accumulated amortization
           of $2,218,100 and $2,070,500, respectively                          $      124,400       $      272,000
         Costs in excess of fair value of net assets acquired,
           net of accumulated amortization of $168,500 and
           $137,800, respectively                                                     141,000              171,700
         Deposits and other assets                                                     79,700              122,700
                                                                                -------------        -------------

                                                                               $      345,100       $      566,400
                                                                                =============        =============
</TABLE>


     In both fiscal years ended October 1, 2000 and October 3, 1999,
     amortization expense for other assets totaled $178,300, and for the nine
     months ended September 30, 1998, amortization expense for other assets
     was $133,600.

6.   BANK BORROWINGS

     The Company has a revolving line of credit up to $2,000,000, with a bank,
     which expires on July 31, 2001, bears interest at the bank's prime rate
     (9.50% at October 1, 2000) plus 0.25%, is secured by all the Company's
     assets, and is guaranteed, in part, by a federal agency. The line of credit
     requires the Company to maintain a quarterly minimum quick ratio of 1.1 to
     1.0, maintain a quarterly debt-to-effective tangible net worth ratio of not
     more than 0.60 to 1.0, maintain a quarterly effective tangible net worth of
     at least $16.5 million plus 50 percent of the previous quarter's cumulative
     net earnings, and have positive net earnings as of the end of each fiscal
     year. Borrowings supported by export-related inventory are required to not
     exceed 70% of the total outstanding borrowings. Under the terms of its
     line of credit, the Company is precluded from paying any dividends without
     the consent of the parties to such agreements, even if the Company is in
     compliance with all of the financial covenants. As of October 1, 2000, the
     Company had a zero balance and was in compliance with these covenants.


                                       29
<PAGE>

                           LOGIC DEVICES INCORPORATED

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.   BENEFIT (PROVISION) FOR INCOME TAXES

     The benefit (provision) for income taxes for the fiscal years ended
     October 1, 2000 and October 3, 1999, and the nine months ended
     September 30, 1998, comprise:

                                  Current           Deferred             Total
                              -----------        -----------       -----------
     2000

         Federal             $     21,800       $          -      $     21,800
         State                    (11,600)                 -           (11,200)
                              -----------        -----------       -----------

                             $     10,200       $          -      $     10,200
                              ===========        ===========       ===========


                                  Current           Deferred             Total
                              -----------        -----------       -----------
     1999

         Federal             $    (18,000)      $          -      $    (18,000)
         State                     (2,000)                 -            (2,000)
                              -----------        -----------       -----------

                             $    (20,000)      $          -      $    (20,000)
                              ===========        ===========       ===========


                                  Current           Deferred             Total
                              -----------        -----------       -----------
     1997

         Federal             $    240,900       $    (91,600)     $    149,300
         State                      6,200           (110,800)         (104,600)
                              -----------        -----------       -----------

                             $    247,100       $   (202,400)     $     44,700
                              ===========        ===========       ===========


     The following summarizes the difference between the income tax (benefit)
     expense and the amount computed by applying the Federal income tax rate of
     34% in 2000, 1999, and 1998, to income (loss) before taxes:
<TABLE>
<CAPTION>

                                                               2000            1999            1998
                                                       ------------    ------------    ------------
<S>                                                   <C>             <C>             <C>
         Federal income tax at statutory rate         $    (174,100)  $    (211,000)  $   2,168,600
         Tax credit carryforwards                            34,700         362,300               -
         State income taxes, net of federal
           tax benefit                                       (7,700)        (36,200)        389,000
         Stock option and warrant exercises                 171,000               -               -
         Other, net                                          50,000         132,600          (5,000)
         Valuation allowance                                (63,700)       (267,700)     (2,507,900)
                                                       ------------    ------------    ------------

                                                      $      10,200   $     (20,000)  $      44,700
                                                       ============    ============    ============
</TABLE>



                                       30
<PAGE>

                           LOGIC DEVICES INCORPORATED

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     Deferred tax assets and liabilities comprise the following:

                                                    October 1,      October 3,
                                                          2000            1999
                                                 -------------    ------------
         Deferred tax assets
           Net operating loss carryforwards     $    1,450,900   $   1,442,300
           Reserves not currently deductible         1,085,000         867,500
           Capitalized inventory costs                 456,700         229,200
           Tax credit carryforwards                    397,000         362,300
           Distributor sales reserves                   13,700          20,000
           Other                                        39,700               -
                                                 -------------    ------------

              Gross deferred tax assets              3,443,000       2,921,300
                                                 -------------    ------------

         Deferred tax liabilities
           State tax benefit                          (296,300)              -
           Depreciation                               (254,100)        (97,300)
           Capitalized software costs                  (53,300)        (48,400)
                                                 -------------    ------------
              Gross deferred tax liabilities          (603,700)       (145,700)
                                                 -------------    ------------

         Net deferred tax assets                     2,839,300       2,775,600

         Valuation allowance                        (2,839,300)     (2,775,600)
                                                 -------------    ------------

         Net deferred taxes                     $            -   $           -
                                                 =============    ============

     The valuation allowance was increased $63,700 from 1999 to 2000. This was
     the result of an increase of the net deferred tax assets, primarily
     non-deductible reserves and capitalized inventory costs. Because the
     Company management is unable to determine whether it is more likely than
     not that the net deferred tax assets will be realized, the Company
     continues to record a 100 percent valuation against the net deferred tax
     assets.

     As of October 1, 2000, the Company has Federal and State net operating loss
     carryforwards (NOLs) totaling approximately $3,518,000 and $2,881,000,
     respectively, available to offset future taxable income. These NOLs expire
     at various times through 2020 and 2005, respectively. The Company also has
     Federal and State research and development credit carryforwards totaling
     approximately $45,000 and $57,000, respectively, expiring at various times
     through 2020. The Company has state manufacturing tax credit carryforwards
     totaling approximately $295,000, which expire at various times through
     2010.

8.   COMMITMENTS

     The Company leases its facilities and certain equipment under operating
     leases. The facility leases require the Company to pay certain maintenance
     and operating expenses, such as taxes, insurance, and utilities. Rent
     expense related to these operating leases was $981,700, $1,293,500, and
     $1,049,500, for the fiscal years ended October 1, 2000 and October 3, 1999,
     and the nine months ended September 30, 1998, respectively.



                                       31
<PAGE>

                           LOGIC DEVICES INCORPORATED

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     A summary of future minimum lease payments under capitalized leases,
     together with the present value of such minimum lease payments and future
     minimum payments required under non-cancelable operating leases with terms
     in excess of one year, follows:
<TABLE>
<CAPTION>

                                                                                  Capitalized            Operating
                                                                                       Leases               Leases
                                                                                -------------        -------------
<S>                                                                            <C>                  <C>
     Fiscal years ended:

         September 30, 2001                                                    $      202,100       $      583,300
         September 29, 2002                                                            39,100              572,600
         September 28, 2003                                                                 -              295,400
         September 27, 2004                                                                 -              193,300
         Thereafter                                                                         -               80,600
                                                                                -------------        -------------

         Future minimum lease payments                                                241,200       $    1,725,200
                                                                                                     =============

         Less amounts representing interest (4.08% to 12.24%)                           8,700
                                                                                -------------

         Present value of future minimum lease payments                               232,500

         Less current portion                                                         194,200
                                                                                -------------

                                                                               $       38,300
                                                                                =============
</TABLE>

9.   SHAREHOLDERS' EQUITY

     Stock Option Plan

     The Company issues common stock options to its employees, certain
     consultants, and its certain of its board members. Options granted to its
     employees and consultants generally vest over four years, expire ten years
     from the date of grant, and have exercise prices ranging from $2.03 to
     $8.00 per share. Options granted to board members generally vest
     immediately, expire five years from the date of grant, and have exercise
     prices ranging from $2.75 to $5.56 per share. A summary of the status of
     the Company's stock option plan as of October 1, 2000, October 3, 1999, and
     September 30, 1998, and changes during the fiscal periods then ended, is
     presented in the following table:
<TABLE>
<CAPTION>

                                                        Options Outstanding
                       ------------------------------------------------------------------------------------
                            October 1, 2000               October 3, 1999            September 30, 1998
                       -------------------------     --------------------------  --------------------------
                                       Wtd. Avg.                      Wtd. Avg.                   Wtd. Avg.
                          Shares      Ex. Price          Shares      Ex. Price       Shares       Ex. Price
                       -------------------------     --------------------------  --------------------------
<S>                      <C>          <C>                <C>         <C>             <C>          <C>
     Beginning           1,061,400    $   3.087          818,000     $   3.015       261,000      $   3.402
     Granted               115,000    $   3.832          301,000     $   3.216       629,000      $   2.934
     Exercised             (91,400)   $   2.653          (18,100)    $   2.290             -              -
     Forfeited            (330,200)   $   3.444          (39,500)    $   2.984       (72,000)     $   3.706
                       -----------                   -----------                 -----------

     Ending                754,800    $   3.076        1,061,400     $   3.087       818,000      $   3.015
                       ===========     ========       ==========      ========   ===========       ========

     Exercisable at
       year-end:           656,900                       754,200                     175,400
                       ===========                    ==========                 ===========

Weighted-average
       fair value of
       options granted
       during period                  $   3.432                      $    3.216                   $   2.934
                                       ========                       =========                    ========
</TABLE>





                                       32
<PAGE>

                           LOGIC DEVICES INCORPORATED

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     The following table summarizes information about stock options outstanding
as of October 1, 2000:


                          Options Outstanding             Options Exercisable
               --------------------------------------  -------------------------
                               Wtd. Avg.
   Range of        Number     Remaining     Wtd. Avg.     Number       Wtd. Avg.
   Exercise      Outstanding  Contractual   Exercise    Exercisable    Exercise
    Prices       at 10/03/99     Life         Price     at 10/03/99      Price
-------------- --------------------------------------  -------------------------

$2.000 - 4.000       696,300   7.9 years   $    2.802      598,400    $    2.799
$4.001 - 6.000        40,000   9.5 years   $    5.563       40,000    $    5.563
$6.001 - 8.000        18,500   5.3 years   $    8.000       18,500    $    8.000
               -------------                           -----------

                     754,800               $    3.071      656,900    $    3.114
               =============                =========  ===========     =========


     The difference between the exercise price and the fair market value of the
     options issued on the dates of grant is accounted for an unearned
     compensation and amortized to expense over the related vesting period. As
     discussed in the Summary of Accounting Policies, the Company follows APB
     No. 25 for measurement and recognition of employee stock-based
     transactions. Had the Company elected to adopt the measurement and
     recognition provisions of SFAS No. 123, the Company would have incurred an
     additional $509,200, $317,300, and $306,200 in related compensation
     expenses during the fiscal years ended October 1, 2000 and October 3, 1999,
     and the nine months ended September 30, 1998, respectively. Under the
     provisions of SFAS No. 123, the pro forma net income (loss) and basic and
     diluted income (loss) per share for the fiscal years ended October 1, 2000
     and October 3, 1999, and the nine months ended September 30, 1998, follows:
<TABLE>
<CAPTION>

                                                         2000               1999               1998
                                                 ------------       ------------       ------------
<S>                                             <C>                <C>                <C>
     Net income (loss)

         As reported                            $     522,400      $     600,600      $  (6,333,700)
                                                 ============       ============       ============

         Pro forma                              $      13,200      $     283,300      $  (6,639,900)
                                                 ============       ============       ============

     Basic and diluted earnings (loss)
       per share

         As reported                            $        0.08      $        0.09      $       (1.03)
                                                 ============       ============        ===========

         Pro forma                              $        0.00      $        0.04      $       (1.07)
                                                 ============       ============        ===========
</TABLE>

     The pro forma information provided above was estimated at the date of
     grant, using the Black-Scholes option-pricing model, with the following
     weighted average assumptions:

                                           2000        1999        1998
                                       --------    --------    --------

         Expected life (in years)           3.0         4.0         4.0
         Risk-free interest rate           6.0%        6.2%        4.4%
         Volatility                       72.0%       91.0%      111.0%
         Dividend yield                     0.0         0.0         0.0



                                       33
<PAGE>

                           LOGIC DEVICES INCORPORATED

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     The Black-Scholes option valuation model was developed for use in
     estimating the fair value of traded options that have no vesting
     restrictions and are fully transferable. Because the Company's options have
     characteristics significantly different from those of trading options,
     management believes that the existing pricing models do not necessarily
     provide a reliable single measure of the fair value of its options.

10.  RESTATEMENT

     During the fiscal year ended October 1, 2000, the Company restated its
     previously issued October 3, 1999 consolidated financial statements to
     reflect the correction of various errors that arose in fiscal years prior
     to fiscal 1998, relating primarily to the accounting for certain purchased
     and leased assets.

     A summary of the significant effects of this restatement follows:

                                                        October 3, 1999
                                              ---------------------------------
                                              As Previously
                                                   Reported         As Restated
                                              -------------       -------------

         Property and equipment, net          $   3,702,000       $   3,541,600
         Other assets                         $     502,400       $     566,400
         Accrued expenses                     $     388,700       $     428,700
         Capital lease obligations            $     400,900       $     423,700
         Accumulated deficit                  $  (2,040,500)      $  (2,199,700)

     At December 31, 1997, retained earnings were decreased by $159,200 from
     previously reported amounts. However, the restatement had no effect on the
     earnings of any of the fiscal periods subsequently reported.

11.  MAJOR CUSTOMERS, MAJOR SUPPLIERS AND EXPORT SALES

     Major Customers and Suppliers

     For the fiscal year ended October 1, 2000, two customers accounted for
     approximately 31% and 10% of net revenues, one of which is the Company's
     exclusive domestic distributor, with accounts receivable of $615,200 and
     $209,800, respectively, as of October 1, 2000. For the fiscal year ended
     October 3, 1999, one customer accounted for approximately 35% of net
     revenues, with accounts receivable of $1,820,500 as of October 3, 1999. For
     the nine months ended September 30, 1998, three customers accounted for
     approximately 27%, 12%, and 12%, respectively, of net revenues, with
     accounts receivable of $434,600, $51,300, and $55,700 as of September 30,
     1998, respectively.

     The Company had no suppliers that comprised 10% or more of its purchases in
     fiscal 2000, 1999, and 1998.



                                       34
<PAGE>

                           LOGIC DEVICES INCORPORATED

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     Export Sales

     The Company had the following export sales:

                                           2000            1999            1998
                                   ------------    ------------    ------------

         Western Europe           $   3,520,500   $   3,204,600   $   3,542,200
         Far East                     1,106,700         857,000         734,700
         Other                           19,000          96,400         226,800
                                   ------------    ------------    ------------

                                  $   4,646,200   $   4,158,000   $   4,503,700
                                   ============    ============    ============


12.  USE OF ESTIMATES AND CONCENTRATION OF CREDIT RISKS

     The Company's consolidated financial statements are prepared in accordance
     with generally accepted accounting principles, which require the use of
     management estimates. These estimates are impacted, in part, by the
     following risks and uncertainties:

     Financial instruments, which potentially subject the Company to
     concentration of credit risk, consist principally of cash and cash
     equivalents and trade receivables. The Company places its cash and cash
     equivalents with high quality financial institutions, and, by policy,
     limits the amounts of credit exposure to any one financial institution.

     A significant portion of the Company's accounts receivable have
     historically been derived from one major class of customer (distributors)
     with the remainder being spread across many other customers in various
     electronic industries. The Company believes any risk of accounting loss is
     significantly reduced due to (1) the provision being made at the date of
     sale for returns and allowances, and (2) the diversity of its products,
     end-customers, and geographic sales areas. The Company performs credit
     evaluations of its customers' financial condition whenever necessary. The
     Company generally does not require cash collateral or other security to
     support customer receivables.

     The Company currently is dependent on one supplier as its primary
     wafer-processing source. If this supply was to be interrupted or the
     pricing was to become unfavorable to the Company, this could have a
     material adverse impact on the Company's operations

     The Company produces inventory based on orders received and forecasted
     demand. The Company must order wafers and build inventory well in advance
     of product shipments. Because the Company's markets are volatile and
     subject to rapid technology and price changes, there is a risk that the
     Company will forecast incorrectly and produce excess or insufficient
     inventories of particular products. This inventory risk is heightened
     because many of the Company's customers place orders with short lead times.
     Demand will differ from forecasts and such differences may have a material
     effect on actual operations.

13.  STATEMENTS OF CASH FLOWS

     The Company paid $314,100, $557,600, and $402,400 for interest in the
     fiscal years ended October 1, 2000 and October 3, 1999, and in the
     nine-months ended September 30, 1998, respectively. The Company paid $3,800
     for income taxes in fiscal year ended October 1, 2000. The Company did not
     make any income tax payments during 1999 and 1998.



                                       35
<PAGE>

                           LOGIC DEVICES INCORPORATED

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     Non-cash investing and financing activities for fiscal 2000 consisted of
     the acquisition of $40,200 of equipment under capital leases. There were no
     non-cash investing and financing activities during fiscal 1999. Non-cash
     investing and financing activities for the fiscal period ended September
     30, 1998, consisted of the acquisition of $134,700 of equipment under
     capital leases.

14.  CONTINGENCIES

     On July 28, 2000, the Company filed a Statement of Claim with the American
     Arbitration Association in San Francisco, California, against All American
     Semiconductor (All American) seeking a declaratory judgment that All
     American breached the inventory stocking requirements and payment terms of
     their Exclusive Distributor Agreement (the Distributor Agreement). The
     Company also seeks to recover any money damages it has suffered as a result
     of such breaches. In the Distributor Agreement, the Company appoints All
     American as its exclusive domestic distributor, except for sales to certain
     specified OEMs, and All American agrees to, among other things, maintain
     certain paid levels of inventory. All American has filed a response to the
     Statement of Claim and a counterclaim against the Company and its
     president, William J. Volz. All American alleges that the Company sold
     products in North America without using All American as its distributor,
     and seeks to recover money damages from such sales. The Company has filed
     an answer and affirmative defenses to the counterclaim denying those
     allegations. On October 6, 2000, the Company also sent a notice terminating
     the Distributor Agreement, effective December 31, 2000, pursuant to its
     terms.

     Management is unable at this time to predict the likely outcome of these
     actions and is unable to determine any range of loss should the Company not
     prevail with respect to its claims against All-American or the
     counterclaims filed by All-American against the Company.



                                       36
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
           AND FINANCIAL DISCLOSURE

Not applicable.



                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The information required by this Item will be included in the Proxy
Statement and is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

         The information required by this Item will be included in the Proxy
Statement and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The information required by this Item will be included in the Proxy
Statement and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS

         The information required by this Item will be included in the Proxy
Statement and is incorporated herein by reference.

                                     PART IV

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

        (a) The following documents are filed as part of this report:

            (1) The Company's Consolidated Financial Statements and Notes to
                Consolidated Financial Statements appear at pages 19 to 36 of
                this report; see Index to Consolidated Financial Statements at
                page 18 of this report.

            (2) The Consolidated Financial Statement Schedule appears on
                page 38 of this report; see Index to Consolidated Financial
                Statements Schedule at page 18 of this report.

            (3) The Index to Exhibits appears at page 40 of this report.

        (b) Reports on Form 8-K: During the last quarter of fiscal 2000, the
            Company filed no current reports on Form 8-K.




                                       37
<PAGE>

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>


                                            Balance       Charged
                                              at          to costs                    Balance
                                           beginning        and                      at end of
Description                                of period      expenses      Deductions     period
-----------                              ------------   -----------     ----------   ----------
<S>                                     <C>             <C>            <C>          <C>
2000

Allowance for:

   Doubtful accounts                    $     253,500   $         -    $   233,500  $    20,000

   Inventory reserve                    $   1,784,200   $   652,100    $         -  $ 2,436,300

   Sales returns                        $      50,000   $         -    $    18,000  $    32,000

1999

Allowance for:

   Doubtful accounts                    $     169,500   $    84,000    $         -  $   253,500

   Inventory reserve                    $     590,000   $ 1,194,200    $         -  $ 1,784,200

   Sales returns                        $     149,100   $         -    $    99,100  $    50,000


1998

Allowance for:

   Doubtful accounts                    $     169,500   $         -    $         -  $   169,500

   Inventory reserve                    $     500,000   $    90,000    $         -  $   590,000

   Sales returns                        $     200,500   $   234,000    $   285,400  $   149,100
</TABLE>





                                       38
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

LOGIC DEVICES INCORPORATED

Date: December 6, 2000                    By:  /s/ William J. Volz
                                              --------------------------------
                                              William J. Volz, President and
                                              Principal Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons in the
capacities and on the dates indicated.

     Signature                   Title                       Date
     ---------                   -----                       ----

     /s/ William J. Volz         President                   December 6, 2000
     --------------------------  (Principal Executive
         William J. Volz         Officer)


     /s/ Kimiko Lauris           Chief Financial Officer     December 6, 2000
     --------------------------  (Principal Financial and
         Kimiko Lauris           Accounting Officer)



     /s/ Howard L. Farkas        Chairman of the             December 6, 2000
     --------------------------  Board of Directors
         Howard L. Farkas


     /s/ Burton W. Kanter        Director                    December 6, 2000
     --------------------------
         Burton W. Kanter

     /s/ Albert Morrison, Jr.    Director                    December 6, 2000
     --------------------------
         Albert Morrison, Jr.


     /s/ Frederic J. Harris      Director                    December 6, 2000
     --------------------------
         Frederic J. Harris



                                       39
<PAGE>

                                INDEX TO EXHIBITS

Exhibit No.                Description
-----------                -----------

3.1      Articles of Incorporation, as amended. [3.1] (1)
3.2      Bylaws, as amended. [3.2] (1)
10.1     Real Estate lease regarding Registrant's Sunnyvale
         facilities. [10.1] (2)
10.2     LOGIC Devices Incorporated 1996 Stock Incentive Plan. [99.1] (3)
10.3     LOGIC Devices Incorporated 1999 Director Stock Incentive
         Plan. [10.1] (4)
10.4     Registration Rights Agreement dated October 3, 1998 between
         William J. Volz, BRT Partnership, and Registrant. [10.19] (5)
27.1     Financial Data Schedule.

----------
[ ] Exhibits so marked have been previously filed with the
    Securities and Exchange Commission (SEC) as exhibits to the filings shown
    below under the exhibit numbers indicated following the respective document
    description and are incorporated herein by reference.

(1) Registration Statement on Form S-18, as filed with the SEC on
    August 23, 1988 [Registration No. 33-23763-LA].
(2) Registration Statement of Form S-3, as filed with the SEC on
    November 21, 1996 [Registration No. 333-16591].
(3) Registration Statement on Form S-8, as filed with the SEC on
    August 17, 1997 [Registration No. 333-32819].
(4) Quarterly Report on Form 10-Q for the quarter ended June 30, 1999, as
    filed with the SEC on August 14, 1999.
(5) Annual Report on Form 10-K for the transition period from January 1, 1998
    to September 30, 1998, as filed with the SEC on January 13, 1999.




                                       40