Delaware
|
3679
|
56-1764501
|
||
(State
or other Jurisdiction of
|
(Primary
Standard Industrial
|
(I.R.S.
Employer
|
||
Incorporation
or Organization)
|
Classification
Code Number)
|
Identification
No.)
|
Page
|
||
Prospectus
Summary
|
4
|
|
Risk
Factors
|
7
|
|
Forward
Looking Statements
|
13
|
|
Use
of Proceeds
|
13
|
|
Market
For Equity and Related Stockholder Matters
|
13
|
|
Selected
Financial Data
|
14
|
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
15
|
|
Business
|
24
|
|
Description
of Property
|
39
|
|
Legal
Proceedings
|
39
|
|
Management
|
39
|
|
Executive
Compensation
|
43
|
|
Indemnification
for Securities Act Liabilities
|
54
|
|
Plan
of Distribution
|
54
|
|
Description
of Securities
|
57
|
|
Selling
Stockholders
|
57
|
|
Transactions
With Related Persons, Promoters and Certain Control
Persons
|
64
|
|
Legal
Matters
|
67
|
|
Experts
|
67
|
|
Available
Information
|
67
|
|
Index
to Financial Statements
|
68
|
Common
stock offered by selling stockholders
|
Up
to 2,438,096 shares, consisting of the following:
|
|
· 1,438,096 shares of common
stock, consisting of (i) 1,428,572 shares issued
upon conversion of the Stillwater Note representing $500,000 of the
principal amount of the Stillwater Note and (ii) 9,524 shares issued
for accrued and unpaid interest under the Stillwater
Note.*
|
||
· up to
1,000,000 shares of common stock issuable upon the exercise of common
stock purchase warrants at an exercise price of $0.48 per
share.
|
||
Common
Stock to be outstanding after the offering
|
17,961,902
shares**
|
|
Use
of proceeds
|
We
will not receive any proceeds from the sale of the common stock; however
we will receive proceeds from the exercise of our
warrants.
|
|
Over-The-Counter
Bulletin Board Symbol
|
EMAN
|
* On
July, 23 2007, Stillwater elected to convert $252,166.50 of the Stillwater
Note, then outstanding, representing $250,000 of the principal amount of
the Note due on July 23, 2007 and $2,166.50 of accrued and unpaid
interest into shares of common stock. Stillwater received 720,476 shares
of the common stock at the conversion price of $0.35. On December 22,
2008, Stillwater elected to convert the $251,166.67 of the remaining
Stillwater Note representing $250,000 of the principal amount of the Note
due on December 22, 2008 and $1,166.67 of accrued and unpaid interest into
shares of common stock. Stillwater received 717,620 shares of the common
stock at the conversion price of $0.35.
|
|
**The
information above regarding the common stock to be outstanding after the
offering is based on 16,961,902 shares of the Company’s common stock
outstanding as of October 16, 2009 and assumes the exercise of the
above warrants.
|
Year
Ended December 31,
|
Six
Months Ended
June
30,
(unaudited)
|
|||||||||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
2009
|
2008
|
||||||||||||||||||||||
(in
thousands, except per share data)
|
||||||||||||||||||||||||||||
Revenue
|
$
|
18,739
|
$
|
17,554
|
$
|
8,169
|
$
|
3,745
|
$
|
3,593
|
$
|
10,996
|
$
|
8,284
|
||||||||||||||
Cost
of goods sold
|
10,673
|
12,628
|
11,359
|
10,219
|
5,966
|
4,738
|
5,309
|
|||||||||||||||||||||
Gross
profit (loss)
|
8,066
|
4,926
|
(3,190
|
)
|
(6,474
|
)
|
(2,373
|
)
|
6,258
|
2,975
|
||||||||||||||||||
Operating
expenses:
|
||||||||||||||||||||||||||||
Research
and development
|
2,081
|
2,949
|
4,406
|
4,020
|
898
|
754
|
1,308
|
|||||||||||||||||||||
Selling,
general and administrative
|
6,254
|
6,591
|
8,860
|
6,316
|
4,428
|
3,470
|
3,504
|
|||||||||||||||||||||
Total
operating expenses
|
8,335
|
9,540
|
13,266
|
10,336
|
5,326
|
4,224
|
4,812
|
|||||||||||||||||||||
(Loss)
income from operations
|
(269
|
)
|
(4,614
|
)
|
(16,456
|
)
|
(16,810
|
)
|
(7,699
|
)
|
2,034
|
(1,837
|
)
|
|||||||||||||||
Other
(expense) income, net
|
(1,590
|
)
|
(13,874
|
)
|
1,190
|
282
|
(5,012
|
)
|
(301
|
)
|
(959
|
)
|
||||||||||||||||
Net
(loss) income
|
$
|
(1,859
|
)
|
$
|
(18,488
|
)
|
$
|
(15,266
|
)
|
$
|
(16,528
|
)
|
$
|
(12,711
|
)
|
$
|
1,733
|
$
|
(2,796
|
)
|
||||||||
(Loss)
income per share, basic
|
$
|
(0.13
|
)
|
$
|
(1.59
|
)
|
$
|
(1.52
|
)
|
$
|
(1.94
|
)
|
$
|
(1.98
|
)
|
$
|
0.11
|
$
|
(0.21
|
)
|
||||||||
(Loss)
income per share, diluted
|
$
|
(0.13
|
)
|
$
|
(1.59
|
)
|
$
|
(1.52
|
)
|
$
|
(1.94
|
)
|
$
|
(1.98
|
)
|
$
|
0.07
|
$
|
(0.21
|
)
|
||||||||
Weighted
average number of shares outstanding:
|
||||||||||||||||||||||||||||
Basic
|
14,175
|
11,633
|
10,058
|
8,541
|
6,428
|
16,024
|
13,471
|
|||||||||||||||||||||
Diluted
|
14,175
|
11,633
|
10,058
|
8,541
|
6,428
|
24,326
|
13,471
|
December
31,
|
June
30,
(unaudited)
|
|||||||||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
2009
|
2008
|
||||||||||||||||||||||
(in
thousands)
|
||||||||||||||||||||||||||||
Cash
and cash equivalents
|
$
|
2,404
|
$
|
713
|
$
|
1,415
|
$
|
6,727
|
$
|
13,457
|
$
|
2,894
|
$
|
1,038
|
||||||||||||||
Working
capital (deficit)
|
$
|
3,300
|
$
|
(4,708
|
)
|
$
|
(305
|
)
|
$
|
8,868
|
$
|
14,925
|
$
|
5,702
|
$
|
(4,429
|
)
|
|||||||||||
Total
assets
|
$
|
10,104
|
$
|
6,648
|
$
|
7,005
|
$
|
14,142
|
$
|
18,436
|
$
|
10,233
|
$
|
8,026
|
||||||||||||||
Long-term
obligations
|
$
|
---
|
$
|
60
|
$
|
2,229
|
$
|
56
|
$
|
22
|
$
|
---
|
$
|
41
|
||||||||||||||
Total
shareholders’ equity (capital deficit)
|
$
|
3,661
|
$
|
(4,170
|
)
|
$
|
(1,164
|
)
|
$
|
10,401
|
$
|
16,447
|
$
|
6,198
|
$
|
(3,653
|
)
|
|
·
our success in designing,
manufacturing and delivering expected new products, including those
implementing new technologies on a timely
basis;
|
·
|
variations
in our operating results and financial condition;
|
·
|
actual
or anticipated announcements of technical innovations, new product
developments, or design wins by us or our competitors;
|
·
|
general
conditions in the semiconductor and flat panel display industries;
and
|
·
|
worldwide
economic and financial conditions.
|
High
|
Low
|
|||||||
|
||||||||
Fiscal
2006
|
||||||||
First
Quarter
|
$ | 7.10 | $ | 4.60 | ||||
Second
Quarter
|
$ | 5.70 | $ | 2.50 | ||||
Third
Quarter
|
$ | 3.80 | $ | 1.80 | ||||
Fourth
Quarter
|
$ | 2.50 | $ | 1.01 | ||||
Fiscal
2007
|
||||||||
First
Quarter`
|
$ | 1.08 | $ | 0.26 | ||||
Second
Quarter
|
$ | 0.85 | $ | 0.42 | ||||
Third
Quarter
|
$ | 1.64 | $ | 0.65 | ||||
Fourth
Quarter
|
$ | 1.75 | $ | 0.85 | ||||
Fiscal
2008
|
||||||||
First
Quarter
|
$ | 1.47 | $ | 0.88 | ||||
Second
Quarter
|
$ | 1.05 | $ | 0.63 | ||||
Third
Quarter
|
$ | 0.83 | $ | 0.52 | ||||
Fourth
Quarter
|
$ | 0.75 | $ | 0.21 | ||||
Fiscal
2009
|
||||||||
First
Quarter
|
$ | 0.85 | $ | 0.32 | ||||
Second
Quarter
|
$ | 1.40 | $ | 0.60 | ||||
Third
Quarter
|
$ | 2.08 | $ | 0.97 | ||||
Fourth
Quarter (as of October 16, 2009)
|
$ | 1.90 | $ | 1.55 |
Year
Ended December 31,
|
Six
Months Ended
June
30,
(unaudited)
|
|||||||||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
2009
|
2008
|
||||||||||||||||||||||
(in
thousands, except per share data)
|
||||||||||||||||||||||||||||
Revenue
|
$
|
18,739
|
$
|
17,554
|
$
|
8,169
|
$
|
3,745
|
$
|
3,593
|
$
|
10,996
|
$
|
8,284
|
||||||||||||||
Cost
of goods sold
|
10,673
|
12,628
|
11,359
|
10,219
|
5,966
|
4,738
|
5,309
|
|||||||||||||||||||||
Gross
profit (loss)
|
8,066
|
4,926
|
(3,190
|
)
|
(6,474
|
)
|
(2,373
|
)
|
6,258
|
2,975
|
||||||||||||||||||
Operating
expenses:
|
||||||||||||||||||||||||||||
Research
and development
|
2,081
|
2,949
|
4,406
|
4,020
|
898
|
754
|
1,308
|
|||||||||||||||||||||
Selling,
general and administrative
|
6,254
|
6,591
|
8,860
|
6,316
|
4,428
|
3,470
|
3,504
|
|||||||||||||||||||||
Total
operating expenses
|
8,335
|
9,540
|
13,266
|
10,336
|
5,326
|
4,224
|
4,812
|
|||||||||||||||||||||
(Loss)
income from operations
|
(269
|
)
|
(4,614
|
)
|
(16,456
|
)
|
(16,810
|
)
|
(7,699
|
)
|
2,034
|
(1,837
|
)
|
|||||||||||||||
Other
(expense) income, net
|
(1,590
|
)
|
(13,874
|
)
|
1,190
|
282
|
(5,012
|
)
|
(301
|
)
|
(959
|
)
|
||||||||||||||||
Net
(loss) income
|
$
|
(1,859
|
)
|
$
|
(18,488
|
)
|
$
|
(15,266
|
)
|
$
|
(16,528
|
)
|
$
|
(12,711
|
)
|
$
|
1,733
|
$
|
(2,796
|
)
|
||||||||
(Loss)
income per share, basic
|
$
|
(0.13
|
)
|
$
|
(1.59
|
)
|
$
|
(1.52
|
)
|
$
|
(1.94
|
)
|
$
|
(1.98
|
)
|
$
|
0.11
|
$
|
(0.21
|
)
|
||||||||
(Loss)
income per share, diluted
|
$
|
(0.13
|
)
|
$
|
(1.59
|
)
|
$
|
(1.52
|
)
|
$
|
(1.94
|
)
|
$
|
(1.98
|
)
|
$
|
0.07
|
$
|
(0.21
|
)
|
||||||||
Weighted
average number of shares outstanding:
|
||||||||||||||||||||||||||||
Basic
|
14,175
|
11,633
|
10,058
|
8,541
|
6,428
|
16,024
|
13,471
|
|||||||||||||||||||||
Diluted
|
14,175
|
11,633
|
10,058
|
8,541
|
6,428
|
24,326
|
13,471
|
December
31,
|
June
30,
(unaudited)
|
|||||||||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
2009
|
2008
|
||||||||||||||||||||||
(in
thousands)
|
||||||||||||||||||||||||||||
Cash
and cash equivalents
|
$
|
2,404
|
$
|
713
|
$
|
1,415
|
$
|
6,727
|
$
|
13,457
|
$
|
2,894
|
$
|
1,038
|
||||||||||||||
Working
capital (deficit)
|
$
|
3,300
|
$
|
(4,708
|
)
|
$
|
(305
|
)
|
$
|
8,868
|
$
|
14,925
|
$
|
5,702
|
$
|
(4,429
|
)
|
|||||||||||
Total
assets
|
$
|
10,104
|
$
|
6,648
|
$
|
7,005
|
$
|
14,142
|
$
|
18,436
|
$
|
10,233
|
$
|
8,026
|
||||||||||||||
Long-term
obligations
|
$
|
---
|
$
|
60
|
$
|
2,229
|
$
|
56
|
$
|
22
|
$
|
---
|
$
|
41
|
||||||||||||||
Total
shareholders’ equity (capital deficit)
|
$
|
3,661
|
$
|
(4,170
|
)
|
$
|
(1,164
|
)
|
$
|
10,401
|
$
|
16,447
|
$
|
6,198
|
$
|
(3,653
|
)
|
December
31,
|
Six
Months Ended
June
30,
|
|||||||||||||||
2008
|
2007
|
2006
|
2009
|
2008
|
||||||||||||
(Unaudited)
|
||||||||||||||||
Revenue
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
||||||
Cost
of goods sold
|
57
|
72
|
139
|
43
|
64
|
|||||||||||
Gross
profit (loss)
|
43
|
28
|
(39
|
)
|
57
|
36
|
||||||||||
Operating
expenses:
|
||||||||||||||||
Research
and development
|
11
|
17
|
54
|
7
|
16
|
|||||||||||
Selling,
general and administrative
|
33
|
38
|
109
|
31
|
42
|
|||||||||||
Total
operating expenses
|
44
|
55
|
163
|
38
|
58
|
|||||||||||
(Loss)
income from operations
|
(1
|
)
|
(27
|
)
|
(202
|
)
|
19
|
(22
|
)
|
|||||||
Other
(expense) income, net
|
(9
|
)
|
(78
|
)
|
15
|
(3
|
)
|
(12
|
)
|
|||||||
Net
(loss) income
|
(10
|
)% |
(105
|
)% |
(187
|
)% |
16
|
% |
(34
|
)% |
Year
ended December 31,
|
Six
Months Ended
June
30,
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2009
|
2008
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||||||
(In
thousands, except per share data)
|
||||||||||||||||||||
Revenue
|
$
|
18,739
|
$
|
17,554
|
$
|
8,169
|
$
|
10,996
|
$
|
8,284
|
||||||||||
Cost
of goods sold
|
10,673
|
12,628
|
11,359
|
4,738
|
5,309
|
|||||||||||||||
Gross
profit (loss)
|
8,066
|
4,926
|
(3,190
|
)
|
6,258
|
2,975
|
||||||||||||||
Operating
expenses:
|
||||||||||||||||||||
Research
and development
|
2,081
|
2,949
|
4,406
|
754
|
1,308
|
|||||||||||||||
Selling,
general and administrative
|
6,254
|
6,591
|
8,860
|
3,470
|
3,504
|
|||||||||||||||
Total operating expenses
|
8,335
|
9,540
|
13,266
|
4,224
|
4,812
|
|||||||||||||||
(Loss)
income from operations
|
(269
|
)
|
(4,614
|
)
|
(16,456
|
)
|
2,034
|
(1,837
|
)
|
|||||||||||
Other
(expense) income, net
|
(1,590
|
)
|
(13,874
|
)
|
1,190
|
(301
|
)
|
(959
|
)
|
|||||||||||
Net
(loss) income
|
$
|
(1,859
|
)
|
$
|
(18,488
|
)
|
$
|
(15,266
|
)
|
$
|
1,733
|
$
|
(2,796
|
)
|
||||||
Net
(loss) income per share, basic
|
$
|
(0.13
|
)
|
$
|
(1.59
|
)
|
$
|
(1.52
|
)
|
$
|
0.11
|
$
|
(0.21
|
)
|
||||||
Net
(loss) income per share, diluted
|
$
|
(0.13
|
)
|
$
|
(1.59
|
)
|
$
|
(1.52
|
)
|
$
|
0.07
|
$
|
(0.21
|
)
|
|
Three months ended
June 30,
|
Six months ended
June
30,
|
||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
|
(unaudited)
|
(unaudited)
|
||||||||||||||
Product
revenue gross profit
|
|
$
|
3,379
|
|
$
|
2,058
|
|
$
|
5,478
|
|
$
|
2,340
|
|
|||
Product
revenue gross margin
|
|
68
|
%
|
46
|
%
|
59
|
%
|
34
|
%
|
|||||||
Contract
revenue gross profit
|
|
$
|
420
|
$
|
565
|
$
|
780
|
$
|
635
|
|||||||
Contract
revenue gross margin
|
|
46
|
%
|
50
|
%
|
46
|
%
|
48
|
%
|
|||||||
Total
gross profit
|
|
$
|
3,799
|
$
|
2,623
|
$
|
6,258
|
$
|
2,975
|
|||||||
Total
gross margin
|
|
65
|
%
|
47
|
%
|
57
|
%
|
36
|
%
|
|||||||
|
Payments
due by period
|
||||||||||||||||
Total
|
1
Year
|
2-3
Years
|
4-5
Years
|
|||||||||||||
Operating
lease obligations
|
$
|
5,185
|
$
|
1,093
|
$
|
2,257
|
$
|
1,835
|
||||||||
Line
of credit
|
50
|
50
|
—
|
—
|
||||||||||||
Purchase
obligations (a)
|
1,809
|
1,809
|
—
|
—
|
||||||||||||
Other
long-term liabilities (b)
|
625
|
125
|
250
|
250
|
||||||||||||
Total
|
$
|
7,669
|
$
|
3,077
|
$
|
2,507
|
$
|
2,085
|
(a)
The majority of purchase orders outstanding contain no cancellation fees
except for minor re-stocking fees.
|
|
(b)
This amount represents minimum royalty
payments.
|
Principal
Amount
|
Due
Date*
|
||
$
|
250,000
|
July
23, 2007**
|
|
$
|
250,000
|
January 21, 2008
***
|
·
|
Except
for the Stillwater Warrant whose exercise price was unchanged,, the
Amendment Agreements adjusted the exercise price of the Amended Warrants
from $3.60 to $1.03 per share for 1,553,468 shares of common stock and
requires the issuance of Warrants exercisable for an additional 3,831,859
shares of common stock at $1.03 per share with an
expiration date of July 21, 2011; and
|
·
|
The
Amended Warrants are subject to certain anti-dilution adjustment rights in
the event the Company issues shares of its common stock or securities
convertible into its common stock at a price per share that is less than
the Strike Price, in which case the Strike Price shall be adjusted to the
lower of (1) 138% of the price at which such common stock is issued or
issuable and (2) the exercise price of warrants, issued in such
transaction.
|
·
|
Entertainment
and gaming video headset systems, which permit individuals to view
television, including HDTV, video CDs, DVDs and video games on virtual
large screens or stereovision in private without disturbing others. We
believe that these new headset game systems can provide a game or
telepresence experience not otherwise practical using conventional direct
view display technology. The advent of video iPods and the rapidly
increasing amount of downloadable content have accelerated the movement
toward portable video technology. At the same time, the desire for larger
screen sizes while retaining the iPod portability has been referenced in
many publications. Virtual imaging uniquely provides a large, high
resolution view in a small portable package, and we believe that our OLED
on silicon technology is a best fit to help open this
market.
|
·
|
Notebook
computers, which can use head-wearable devices to reduce power
requirements as well as expand the apparent screen size and increase
privacy. Current notebook computers do not use microdisplays. Our products
can apply not only to new models of notebook computers, but also as
aftermarket attachments to older notebooks still in use. The display can
be easily used as a second monitor on notebook computers for ease of
editing multiple documents to provide multiple screens or for data privacy
while traveling. It can also be used to provide larger screen capability
for viewing spreadsheets or complex computer aided design (CAD) files. We
expect to market our head-wearable displays to be used as plug-in
peripherals to be compatible with most notebook computers. We believe that
the SVGA-3D microdisplay is well suited for most portable PC headsets. Our
microdisplays can be operated using the USB power source of most portable
computers. This eliminates added power supplies, batteries, and rechargers
and reduces system complexity and
cost.
|
·
|
Handheld
personal computers, whose small, direct view screens are often
limitations, but which are now capable of running software applications
that would benefit from a larger display. Microdisplays can be built into
handheld computers to display more information content on virtual screens
without forfeiting portability or adding the cost a larger direct view
screen. Microdisplays are not currently used in this market. We believe
that GPS viewers and other novel products are likely to develop as our
displays become more available.
|
·
|
Leverage
our superior technology to establish a leading market position. As the
first to exploit OLED-on-silicon microdisplays, we believe that we enjoy a
significant advantage in bringing this technology to
market.
|
·
|
Optimize
manufacturing efficiencies by outsourcing while protecting proprietary
processes. We outsource certain portions of microdisplay production, such
as chip fabrication, to minimize both our costs and time to market. We
intend to retain the OLED application and OLED sealing processes in-house.
We believe that these areas are where we have a core competency and
manufacturing expertise. We also believe that by keeping these processes
under tight control we can better protect our proprietary technology and
process know-how. This strategy will also enhance our ability to continue
to optimize and customize processes and devices to meet customer needs. By
performing the processes in-house we can continue to directly make
improvements in the processes, which will improve device performance. We
also retain the ability to customize certain aspects such as color
balance, which is known as chromaticity, as well as specialized boards or
interfaces, and to adjust other parameters at the customer's request. In
the area of lenses and head-wearable displays, we intend to focus on
design and development, while working with third parties for the
manufacture and distribution of finished products. We intend to prototype
new optical systems, provide customization of optical systems, and
manufacture limited volumes, but we intend to outsource high volume
manufacturing operations. There are numerous companies that provide these
outsource services.
|
·
|
Build
and maintain strong internal design capabilities. As more circuitry is
added to OLED-on-silicon devices, the cost of the end product using the
display can be decreased; therefore integrated circuit design capability
will become increasingly important to us. To meet these requirements, we
utilize in-house design capabilities supplemented by outsourced design
services. Building and maintaining this capacity will allow us to reduce
engineering costs, accelerate the design process and enhance design
accuracy to respond to our customers' needs as new markets develop. In
addition, we intend to maintain a product design staff capable of rapidly
developing prototype products for our customers and strategic partners.
Contracting third party design support to meet demand and for specialized
design skills will also remain a part of our overall long term strategy.
|
·
|
Low
manufacturing cost;
|
·
|
Low
cost system solutions;
|
·
|
Wide
angle light emission resulting in large apparent screen
size;
|
·
|
Low
power consumption for improved battery life and longer system
life;
|
·
|
High
brightness for improved viewing;
|
·
|
High-speed
performance resulting in clear video images;
|
·
|
Wide
operating temperature range; and
|
·
|
Good
environmental stability (vibration and
humidity).
|
·
|
Can
be very low cost, with minimal assembly. A one piece, molded plastic optic
attached to the microdisplay has been introduced and may potentially serve
consumer end-product markets. Since our process is plastic molding, our
per unit production costs are low;
|
·
|
Allows
a compact and lightweight lens system that can greatly magnify a
microdisplay to produce a large field of view. For example, our WF05 prism
lens, in combination with our SVGA OLED microdisplay, provides a virtual
view equivalent to that of a 105-inch diagonal display viewed at 12
feet;
|
·
|
Can
use single-piece molded microdisplay lenses to permit high light
throughput making the display image brighter or permitting the use of less
power for an acceptable brightness;
|
·
|
Can
be designed to provide focusing to enable users with various eyesight
qualities to view images clearly; and
|
·
|
Can
optionally provide focal plane adjustment for simultaneous focusing of
computer images and real world objects. For example, this characteristic
is beneficial for word processing or spreadsheet applications where a
person is typing data in from reference material. This feature can make it
easier for people with moderately poor accommodation to use a
head-wearable display as a portable computer-viewing
accessory.
|
·
|
OLED
Materials, Structures, and Processes;
|
·
|
Display
Color Processing and Sealing;
|
·
|
Active
Matrix Circuit Methodologies and Designs;
|
·
|
Field
Emission and General Display Technologies;
|
·
|
Lenses
and Tracking (Eye and Head);
|
·
|
Ergonomics
and Industrial Design; and
|
·
|
Wearable
Computer Interface Methodology
|
Age
|
Position
|
||
Andrew
G. Sculley
|
57
|
Chief
Executive Officer and President
|
|
Paul
Campbell (4)
|
53
|
Chief
Financial Officer
|
|
Susan
K. Jones
|
57
|
Chief
Business Officer, Secretary
|
|
Adm.
Thomas Paulsen (Ret.) (2)(3*)
|
72
|
Chairman
of the Board, Director
|
|
Claude
Charles (1)(2)(3)(5)
|
72
|
Director
|
|
Paul
Cronson
|
52
|
Director
|
|
Irwin
Engelman (1*)
|
74
|
Director
|
|
Dr.
Jacob Goldman (2*)(3)
|
87
|
Director
|
|
Brig.
Gen. Stephen Seay (Ret.) (1)(3)
|
62
|
Director
|
|
(1)
|
Audit
Committee
|
||
(2)
|
Governance
& nominating Committee
|
||
(3)
|
Compensation
Committee
|
||
(4)
|
On
May 8, 2009, Paul Campbell became the Chief Financial
Officer.
|
||
(5) | As of September 1, 2009, Claude Charles is a member of the Governance & nominating and the Compensation Committees. |
·
|
high
personal and professional ethics and
integrity;
|
·
|
the
ability to exercise sound judgment;
|
·
|
the
ability to make independent analytical
inquiries;
|
·
|
a
willingness and ability to devote adequate time and resources to
diligently perform Board and committee duties;
and
|
·
|
the
appropriate and relevant business experience and
acumen.
|
·
|
whether
the person possesses specific industry expertise and familiarity with
general issues affecting our
business;
|
·
|
whether
the person’s nomination and election would enable the Board to have a
member that qualifies as an “audit committee financial expert” as such
term is defined by the Securities and Exchange Commission (the “SEC”) in
Item 401 of Regulation S-K;
|
·
|
whether
the person would qualify as an “independent” director under the listing
standards of the OTC Bulletin
Board;
|
·
|
the
importance of continuity of the existing composition of the Board of
Directors to provide long term stability and experienced oversight;
and
|
·
|
the
importance of diversified Board membership, in terms of both the
individuals involved and their various experiences and areas of
expertise.
|
•
|
Reward
performance that drives substantial increases in shareholder value, as
evidenced through both future operating profits and increased market price
of our common shares; and
|
•
|
Attract,
hire and retain well-qualified
executives.
|
SUMMARY
COMPENSATION TABLE
|
|||||||||||||
Salary
|
Bonus
|
Stock
Awards
|
Option
awards
|
Non-equity
incentive plan compen-sation
|
Change
in pension value and non qualified deferred compensation
|
All
Other Compensation
|
Total
|
||||||
Name
and principal position
|
Year
|
($)
|
($)
|
($)
|
($),
(a)
|
($)
|
($)
|
($)
|
($)
|
||||
Andrew
G. Sculley, President and Chief Executive Officer (1)
|
2008
|
161,923
|
-
|
-
|
287,150
|
-
|
-
|
-
|
449,073
|
||||
2007
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||
2006
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||
K.C.
Park, Interim President and Chief Executive Officer (2)
|
2008
|
105,817
|
60,000
|
-
|
(7)
|
42,371
|
-
|
-
|
75,000
|
(8)
|
283,188
|
||
2007
|
313,462
|
-
|
40,000
|
(9)
|
-
|
-
|
-
|
-
|
353,462
|
||||
2006
|
200,000
|
-
|
-
|
-
|
-
|
-
|
-
|
200,000
|
|||||
Gary
Jones, President and Chief Executive Officer (3)
|
2008
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||
2007
|
102,060
|
-
|
430,000
|
(10)
|
-
|
-
|
-
|
51,638
|
(11)
|
583,698
|
|||
2006
|
368,170
|
-
|
-
|
-
|
-
|
-
|
127,928
|
(12)
|
496,098
|
||||
Paul
Campbell, Chief Financial Officer (4)
|
2008
|
203,539
|
-
|
-
|
-
|
-
|
-
|
-
|
203,539
|
||||
2007
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||
2006
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||
Michael
D. Fowler, Interim Chief Financial Officer (5)
|
2008
|
84,808
|
-
|
-
|
-
|
-
|
-
|
-
|
84,808
|
||||
2007
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||
2006
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||
John
D. Atherly, Chief Financial Officer (6)
|
2008
|
44,628
|
-
|
-
|
-
|
-
|
-
|
-
|
44,628
|
||||
2007
|
243,000
|
-
|
-
|
-
|
-
|
-
|
-
|
243,000
|
|||||
2006
|
242,308
|
-
|
-
|
-
|
-
|
-
|
-
|
242,308
|
|||||
Susan
Jones, Executive Vice President, Chief Business Officer, and
Secretary
|
2008
|
329,916
|
-
|
-
|
-
|
-
|
-
|
189,325
|
(13)
|
519,241
|
|||
2007
|
278,888
|
-
|
-
|
-
|
-
|
-
|
175,184
|
(13)
|
454,072
|
||||
2006
|
289,163
|
-
|
-
|
-
|
-
|
-
|
81,379
|
(13)
|
370,542
|
||||
(1)
Mr. Sculley has been serving as our President and Chief Executive Officer
as of June 1, 2008.
|
|||||||||||||
(2)
Dr. Park was appointed Interim President and Chief Executive Officer in
January 2007 and resigned his post in January 2008. Prior to
January 2007, Dr. Park served as Executive Vice President of International
Operations. Dr. Park provided consulting services from February
1, 2008 through August 1, 2008.
|
|||||||||||||
(3)
Mr. Jones resigned as President and Chief Executive Officer in January
2007.
|
|||||||||||||
(4)
Mr. Campbell served as our Interim Chief Financial Officer from April 15,
2008 through May 8, 2009 when he became the Chief Financial
Officer.
|
|||||||||||||
(5)
Mr. Fowler resigned as Interim Chief Financial Officer as of April 14,
2008.
|
|||||||||||||
(6)
Mr. Atherly resigned as Chief Financial Officer in January
2008.
|
|||||||||||||
(7) This
amount represents options issued pursuant to Mr. Park’s consulting
agreement.
|
|||||||||||||
(8) This
amount represent consulting fees paid pursuant to Mr. Park’s consulting
agreement.
|
|||||||||||||
(9)
This amount represents a retention bonus in the form of a stock grant that
was issued to the named executive officer.
|
|||||||||||||
(10)
This amount represents a payment in the form of a stock grant pursuant to
Mr. Jones' severance agreement. Previously granted options that
remained unexercised were also forfeited pursuant to the severance
agreement.
|
|||||||||||||
(11)
This amount represents legal and accounting fee reimbursement for the
benefit of the named executive officer.
|
|||||||||||||
(12)
This amount represents relocation expense reimbursement for the benefit of
the named executive officer.
|
|||||||||||||
(13)
This amount represents deferred dollar amount earned in sales incentive
compensation by the named executive officer.
|
|||||||||||||
Column
note:
|
|||||||||||||
(a) The
amounts in this column represent the fair value of option awards to the
named executive officer as computed on the date of the option grants using
the Black-Scholes option-pricing model.
|
Name
|
Grant
Date
|
All
Other Option Awards: Number of Securities Underlying Options
(#)
|
Exercise
or Base Price of Options Awards ($/Sh)
|
Total
Grant Date Fair Value ($)
|
|||||||||
Andrew
G. Sculley
|
June
2, 2008 (1)
|
500,000
|
0.81
|
287,150
|
|||||||||
K.C. Park
|
May
1, 2008 (2)
|
70,453
|
0.97
|
24,461
|
|||||||||
K.C. Park
|
August
1, 2008 (2)
|
37,500
|
0.68
|
17,910
|
OUTSTANDING
EQUITY AWARDS AT YEAR-END
|
|||||||||
Option
awards
|
Stock
awards
|
||||||||
Number
of securities underlying unexercised options (#)
|
Number
of securities underlying unexercised options (#)
|
Equity
incentive plan awards: Number of securities underlying
unexercised options
|
Options
exercise price
|
Option
expiration
|
Number
of shares or units of stock that have not vested
|
Market
value of shares or units of stock that have not vested
|
Equity
incentive plan awards:
Number
of unearned shares other rights that have not vested
|
Equity
incentive plan awards:
Market
or payout value of unearned shares, units or other rights that have not
vested
|
|
Name
and principal position
|
Exercisable
|
Unexercis-
able
|
(#),
(a)
|
($)
|
Date
|
(#)
|
($)
|
(#)
|
($)
|
Andrew
G. Sculley, President and Chief Executive Officer (1)
|
166,667
|
333,333
|
500,000
|
0.81
|
June
2, 2015
|
-
|
-
|
-
|
-
|
K.C.
Park, Interim President and Chief Executive Officer (2)
|
70,453
|
-
|
70,453
|
0.97
|
May
1, 2018
|
-
|
-
|
-
|
-
|
37,500
|
-
|
37,500
|
0.68
|
August
1, 2018
|
-
|
-
|
-
|
-
|
|
Susan
Jones, Executive Vice President, Chief Business Officer, and
Secretary
|
48,750
|
-
|
48,750
|
2.60
|
May
17, 2009
|
-
|
-
|
-
|
-
|
16,770
|
-
|
16,770
|
2.60
|
January
11, 2010
|
|||||
9,685
|
-
|
9,685
|
2.60
|
January
11, 2010
|
|||||
16,250
|
-
|
16,250
|
2.60
|
March
17, 2010
|
|||||
11,700
|
-
|
11,700
|
2.60
|
November
30, 2012
|
|||||
11,932
|
-
|
11,932
|
2.60
|
April
24, 2013
|
|||||
7,159
|
-
|
7,159
|
2.60
|
August
30, 2013
|
|||||
7,159
|
-
|
7,159
|
2.60
|
December
1, 2013
|
(1)
Mr. Sculley is the President and Chief Executive Officer as of June 1,
2008.
|
(2)
Dr. Park was appointed Interim President and Chief Executive Officer in
January 2007 and resigned his post in January 2008. The options
were granted pursuant to his consulting agreement.
|
Column
note:
|
On
November 3, 2006, a reverse stock split, ratio of 1-for-10, became
effective. All stock options presented reflect the stock
split.
|
(a)
The options in this column were repriced. On July 21,
2006, certain employees agreed to cancel a portion of their existing stock
options in return for repricing the remaining stock options at $2.60 per
share. The repriced unvested options continued to vest on the
original schedule.
|
Name
|
Grant
Date
|
All
Other Option Awards: Number of Securities Underlying Options
(#)
|
Exercise
or Base Price of Options Awards ($/Sh)
|
Total
Grant Date Fair Value ($)
|
|||||||||
Andrew
G. Sculley
|
June
2, 2008 (1)
|
500,000
|
0.81
|
287,150
|
|||||||||
K.C. Park
|
May
1, 2008 (2)
|
70,453
|
0.97
|
24,461
|
|||||||||
K.C. Park
|
August
1, 2008 (2)
|
37,500
|
0.68
|
17,910
|
Name
|
Voluntary
Resignation w/o Good Reason
|
Voluntary
Resignation for Good Reason
|
Involuntary
Termination without Cause
|
Involuntary
Termination with Cause
|
Involuntary
Termination with a Change in Control
|
|||||||||||||||
Andrew
Sculley
|
||||||||||||||||||||
Cash
severance
|
$
|
—
|
$
|
310,000
|
(1)
|
$
|
310,000
|
(1)
|
$
|
—
|
$
|
310,000
|
(1)
|
|||||||
Vesting
of stock options
|
$
|
—
|
$
|
—
|
(2)
|
$
|
—
|
(2)
|
$
|
—
|
$
|
—
|
(2)
|
|||||||
Susan
Jones
|
||||||||||||||||||||
Cash
severance
|
$
|
157,500
|
(1)
|
$
|
472,500
|
(1)
|
$
|
472,500
|
(1)
|
$
|
—
|
$
|
472,500
|
(1)
|
||||||
Post-termination
health and welfare
|
$
|
—
|
$
|
10,820
|
(3)
|
$
|
10,820
|
(3)
|
$
|
—
|
$
|
10,820
|
(3)
|
|||||||
Vesting
of stock options
|
$
|
—
|
$
|
—
|
(4)
|
$
|
—
|
(4)
|
$
|
—
|
$
|
—
|
(4)
|
DIRECTOR
COMPENSATION
|
||||||||||||||||||||||||||||
Name
|
Fees
earned or paid in cash($)
|
Stock
awards
($)
|
Option
awards($)
|
Non-equity
incentive plan compensation($)
|
Change
in pension value and nonqualified deferred compensation
earnings($)
|
All
other compensation
($)
|
Total($)
|
|||||||||||||||||||||
Claude
Charles
|
20,500
|
-
|
39,035
|
-
|
-
|
-
|
59,535
|
|||||||||||||||||||||
Paul
Cronson
|
18,500
|
-
|
24,263
|
-
|
-
|
-
|
42,763
|
|||||||||||||||||||||
Irwin
Engelman
|
21,000
|
-
|
39,035
|
-
|
-
|
-
|
60,035
|
|||||||||||||||||||||
Jack
Goldman
|
22,500
|
-
|
39,035
|
-
|
-
|
-
|
61,535
|
|||||||||||||||||||||
Thomas
Paulsen
|
84,000
|
-
|
34,111
|
-
|
-
|
-
|
118,111
|
|||||||||||||||||||||
Stephen
Seay
|
19,500
|
-
|
34,111
|
-
|
-
|
-
|
53,611
|
OUTSTANDING
EQUITY AWARDS AT YEAR-END
|
|||||||||
Option
awards
|
Stock
awards
|
||||||||
Number
of securities underlying unexercised options (#)
|
Number
of securities underlying unexercised options (#)
|
Equity
incentive plan awards: Number of securities underlying
unexercised options
|
Options
exercise price
|
Option
expiration
|
Number
of shares or units of stock that have not vested
|
Market
value of shares or units of stock that have not vested
|
Equity
incentive plan awards:
Number
of unearned shares other rights that have not vested
|
Equity
incentive plan awards:
Market
or payout value of unearned shares, units or other rights that have not
vested
|
|
Name
and principal position
|
Exercisable
|
Unexercisable
|
(#),
(a)
|
($)
|
Date
|
(#)
|
($)
|
(#)
|
($)
|
Claude
Charles
|
1,000
|
-
|
1,000
|
3.50
|
January
2, 2010
|
-
|
-
|
-
|
-
|
975
|
-
|
975
|
2.60
|
July
2, 2010
|
-
|
-
|
-
|
-
|
|
650
|
-
|
650
|
2.60
|
September
2, 2010
|
-
|
-
|
-
|
-
|
|
3,250
|
-
|
3,250
|
2.60
|
April
5, 2011
|
-
|
-
|
-
|
-
|
|
1,950
|
-
|
1,950
|
2.60
|
June
15, 2014
|
-
|
-
|
-
|
-
|
|
975
|
-
|
975
|
2.60
|
September
30, 2015
|
-
|
-
|
-
|
-
|
|
3,900
|
-
|
3,900
|
2.60
|
December
31, 2015
|
-
|
-
|
-
|
-
|
|
12,700
|
-
|
12,700
|
1.51
|
November
23, 2017
|
-
|
-
|
-
|
-
|
|
25,000
|
-
|
25,000
|
1.44
|
December
3, 2017
|
-
|
-
|
-
|
-
|
|
25,000
|
-
|
25,000
|
1.35
|
January
2, 2018
|
-
|
-
|
-
|
-
|
|
30,000
|
-
|
30,000
|
0.70
|
July
24, 2018
|
-
|
-
|
-
|
-
|
|
Paul
Cronson
|
4,875
|
-
|
4,875
|
2.60
|
July
2, 2010
|
-
|
-
|
-
|
-
|
1,625
|
-
|
1,625
|
2.60
|
June
15, 2014
|
-
|
-
|
-
|
-
|
|
3,900
|
-
|
3,900
|
2.60
|
December
31, 2015
|
-
|
-
|
-
|
-
|
|
10,400
|
-
|
10,400
|
1.51
|
November
23, 2017
|
-
|
-
|
-
|
-
|
|
25,000
|
-
|
25,000
|
1.44
|
December
3, 2017
|
-
|
-
|
-
|
-
|
|
25,000
|
-
|
25,000
|
1.35
|
January
2, 2018
|
-
|
-
|
-
|
-
|
|
Irwin
Engelman
|
3,900
|
-
|
3,900
|
2.60
|
October
3, 2012
|
-
|
-
|
-
|
-
|
975
|
-
|
975
|
2.60
|
September
30, 2015
|
-
|
-
|
-
|
-
|
|
163
|
-
|
163
|
2.60
|
October
3, 2015
|
-
|
-
|
-
|
-
|
|
5,038
|
-
|
5,038
|
1.51
|
November
23, 2017
|
-
|
-
|
-
|
-
|
|
25,000
|
-
|
25,000
|
1.44
|
December
3, 2017
|
-
|
-
|
-
|
-
|
|
25,000
|
-
|
25,000
|
1.35
|
January
2, 2018
|
-
|
-
|
-
|
-
|
|
30,000
|
-
|
30,000
|
0.70
|
July
24, 2018
|
-
|
-
|
-
|
-
|
|
Jacob
Goldman
|
650
|
-
|
650
|
2.60
|
July
2, 2010
|
-
|
-
|
-
|
-
|
3,900
|
-
|
3,900
|
2.60
|
September
2, 2010
|
-
|
-
|
-
|
-
|
|
2,113
|
-
|
2,113
|
2.60
|
June
15, 2014
|
-
|
-
|
-
|
-
|
|
650
|
-
|
650
|
2.60
|
September
30, 2015
|
-
|
-
|
-
|
-
|
|
488
|
-
|
488
|
2.60
|
October
3, 2015
|
-
|
-
|
-
|
-
|
|
3,900
|
-
|
3,900
|
2.60
|
December
31, 2015
|
-
|
-
|
-
|
-
|
|
12,026
|
-
|
12,026
|
1.51
|
November
23, 2017
|
-
|
-
|
-
|
-
|
|
25,000
|
-
|
25,000
|
1.44
|
December
3, 2017
|
-
|
-
|
-
|
-
|
|
25,000
|
-
|
25,000
|
1.35
|
January
2, 2018
|
-
|
-
|
-
|
-
|
|
30,000
|
-
|
30,000
|
0.70
|
July
24, 2018
|
-
|
-
|
-
|
-
|
|
Thomas
Paulsen
|
3,900
|
-
|
3,900
|
2.60
|
July
30, 2010
|
-
|
-
|
-
|
-
|
1,300
|
-
|
1,300
|
2.60
|
June
15, 2014
|
-
|
-
|
-
|
-
|
|
1,625
|
-
|
1,625
|
2.60
|
September
30, 2015
|
-
|
-
|
-
|
-
|
|
3,250
|
-
|
3,250
|
2.60
|
October
3, 2015
|
-
|
-
|
-
|
-
|
|
813
|
-
|
813
|
2.60
|
December
31, 2015
|
-
|
-
|
-
|
-
|
|
11,213
|
-
|
11,213
|
1.51
|
November
23, 2017
|
-
|
-
|
-
|
-
|
|
25,000
|
-
|
25,000
|
1.44
|
December
3, 2017
|
-
|
-
|
-
|
-
|
|
25,000
|
-
|
25,000
|
1.35
|
January
2, 2018
|
-
|
-
|
-
|
-
|
|
20,000
|
-
|
20,000
|
0.70
|
July
24, 2018
|
-
|
-
|
-
|
-
|
|
Stephen
Seay
|
3,900
|
-
|
3,900
|
2.60
|
February
14, 2016
|
-
|
-
|
-
|
-
|
3,900
|
-
|
3,900
|
1.51
|
November
23, 2017
|
-
|
-
|
-
|
-
|
|
25,000
|
-
|
25,000
|
1.44
|
December
3, 2017
|
-
|
-
|
-
|
-
|
|
25,000
|
-
|
25,000
|
1.35
|
January
2, 2018
|
-
|
-
|
-
|
-
|
|
20,000
|
-
|
20,000
|
0.70
|
July
24, 2018
|
-
|
-
|
-
|
-
|
Name
of Beneficial Owner
|
Common
Stock Beneficially Owned
|
Percentage
of Common Stock
|
||||||
Stillwater
LLC (1)
|
13,137,958
|
35.8
|
%
|
|||||
Ginola
Limited (2)
|
5,079,856
|
13.8
|
%
|
|||||
Rainbow
Gate Corporation (3)
|
1,951,037
|
5.3
|
%
|
|||||
Susan
K Jones (4)
|
634,715
|
1.7
|
%
|
|||||
Paul
Cronson (5)
|
610,031
|
1.7
|
%
|
|||||
Claude
Charles (6)
|
180,400
|
*
|
||||||
Jack
Goldman (7)
|
178,727
|
*
|
||||||
Thomas
Paulsen (8)
|
242,101
|
*
|
||||||
Irwin
Engelman(9)
|
140,076
|
*
|
||||||
Stephen
Seay( 10)
|
127,800
|
*
|
||||||
Andrew
G. Sculley (11)
|
333,334
|
*
|
||||||
Paul
Campbell (12)
|
113,333
|
*
|
||||||
All
executive officers and directors as a group (consisting of 9 individuals)
(13)
|
2,560,517
|
7.0
|
%
|
Plan
|
Number of
securities to be
issued upon exercise
of outstanding options,
warrants and rights
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
|
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities reflected
in first column
|
|||||||||
Equity
compensation plans approved by security holders
|
1,323,480
|
$
|
1.23
|
2,055,595
|
||||||||
Equity
compensation plans not approved by security holders
|
292,193
|
$
|
3.41
|
·
ordinary brokerage transactions and
transactions in which the broker-dealer solicits
investors;
|
|
·
block trades in which the broker-dealer
will attempt to sell the shares as agent but may position and resell a
portion of the block as principal to facilitate the
transaction;
|
|
·
purchases by a broker-dealer as principal
and resale by the broker-dealer for its account;
|
|
·
an exchange distribution in accordance with
the rules of the applicable exchange;
|
|
·
privately negotiated
transactions;
|
|
·
to cover short sales made after the date
that this registration statement is declared effective by the
Commission;
|
|
·
through the writing or settlement of
options or other hedging transactions, whether through an options exchange
or otherwise;
|
|
·
broker-dealers may agree with the selling
stockholders to sell a specified number of such shares at a stipulated
price per share;
|
|
·
a combination of any such methods of sale;
and
|
|
·
any other method permitted pursuant to
applicable law.
|
|
Name of Selling Security
Holder
|
Beneficial
Ownership Prior to Offering (1)
|
Shares
Offered (3)
|
|||
Shares
|
Percentage
(2)
|
||||
Stillwater
LLC (4)
|
13,137,958
|
35.8%
|
2,438,096
|
||
(
1)
|
Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission and generally includes voting or investment power with
respect to securities. Shares of common stock subject to options,
warrants, or debt currently exercisable or convertible, or exercisable or
convertible within 60 days of October 16, 2009 are deemed outstanding for
computing the percentage of the person holding such option, warrant, or
debt but are not deemed outstanding for computing the percentage of any
other person.
|
||||
(2)
|
Percentage
prior to offering is based on 36,704,639 shares of common stock
outstanding as of October 16, 2009 and the shares issuable upon
exercise of options, warrants exercisable, and debt convertible on or
within 60 days of October 16, 2009.
|
||||
(3)
|
Represents
(i) 1,000,000 shares issuable upon the exercise of common stock purchase
warrants, and (ii) 1,428,572 shares issued upon conversion of the
Stillwater Note (as described herein) representing $500,000 of the
principal amount of the Stillwater Note, and (iii) 9,524 shares issued for
accrued and unpaid interest under the Stillwater Note.
|
||||
(4)
|
On
July 23, 2007 Stillwater elected to convert $252,166.50 of the Stillwater
Note representing $250,000 of the principal amount of the Stillwater
Note due on July 23, 2007 and $2,166.50 of accrued and unpaid
interest into shares of common stock. Stillwater received 720,476 shares
of common stock at the conversion price of $0.35 pursuant to the terms of
the Stillwater Note. On December 22, 2008 Stillwater elected to convert
the $251,166.67 of the remaining Stillwater Note representing $250,000 of
the principal amount of the Stillwater Note due on December 21, 2008 and
$1,166.67 of accrued and unpaid interest into shares of common stock.
Stillwater received 717,620 shares of the common stock at the conversion
price of $0.35 pursuant to the terms of the Stillwater
Note.
|
Shares
underlying conversion rights
|
1,428,572
|
|||
Shares
underlying warrants
|
1,000,000
|
|||
Shares
underlying interest conversion
|
9,524
|
|||
Total
shares to register
|
2,438,096
|
Amount
($)
|
||||
Accounting
Fees (1)
|
25,000
|
|||
SEC
Registration Fees (2)
|
113
|
|||
Legal
Fees (3)
|
65,000
|
|||
Roth
Capital (4)
|
35,000
|
|||
Total
|
125,113
|
|||
(1)
Represents the estimated amount of services by the Company’s auditors,
Eisner LLP, in connection with services rendered for this
transaction.
|
||||
(2)
Represents the Company’s previously paid filing fees in connection with
the registration statement.
|
||||
(3)
Amount represents estimated fees. As of the date of the filing of this
registration statement, $33,000 in legal fees have been
incurred.
|
||||
(4)
Represents the placement agent fee.
|
Net
Proceeds
To
Issuer
|
Interest
(10
months)
|
Note
Redemption
|
Total
Payments
|
|||||||||||
$
|
391,417
|
$
|
25,000
|
$
|
500,000
|
$
|
525,000
|
·
|
the
market price per share of the securities underlying the convertible note
on the date of the sale of the convertible note;
|
·
|
the
conversion price per share of the underlying securities on the date of the
sale of the convertible note;
|
·
|
the
total possible shares underlying the convertible note (assuming no
interest payments and complete conversion throughout the term of the
note);
|
·
|
the
combined market price of the total number of shares underlying the
convertible note, calculated by using the market price per share on the
date of the sale of the convertible note and the total possible shares
underlying the convertible note;
|
·
|
the
total possible shares the selling stockholder may receive and the combine
conversion price of the total number of shares underlying the convertible
note; and
|
·
|
the
total possible discount to the market price as of the date of the sale of
the convertible note.
|
Market
Price
Per
Share of
Securities
|
Conversion
Price
Per Share of
Underlying
Securities
|
Total
Possible
Shares
Underlying
The
Convertible
Debentures
(1)
|
Market
Value
(Market
Price
Per Share
Total
Possible
Shares)
(1)
|
Conversion
Value
of the Total Number
Shares
Underlying
The
Convertible
Debentures
|
Total
Possible Discount
To
Market Price as of
The
Date of Sale of
The
Convertible Note
(1)
|
||||||||||||||||||||||
$
|
0.46
|
$
|
0.35
|
1,428,572
|
$ 657,143
|
$
|
500,000
|
$
|
157,143
|
·
|
the
market price per share of the underlying securities on the date of the
sale of that other security;
|
·
|
the
conversion/exercise price per share as of the date of the sale of that
other security;
|
·
|
the
combined market price of the total number of underlying shares, calculated
by using the market price per share on the date of the sale of that other
security and the total possible shares to be received;
|
·
|
the
total possible shares to be received and the combined conversion price of
the total number of shares underlying the other security calculated by
using the conversion price on the date of the sale of that other security
and the total possible number of underlying shares; and
|
·
|
the
total possible discount (premium) to the market price as of the date of
the sale of that other security, calculated by subtracting the total
conversion/exercise price on the date of the sale of that other security
from the combined market price of the total number of underlying shares on
that date:
|
·
|
the
market price per share of the underlying securities on the date of the
sale of that other security;
|
·
|
the
conversion/exercise price per share as of the date of the sale of that
other security;
|
·
|
the
combined market price of the total number of underlying shares, calculated
by using the market price per share on the date of the sale of that other
security and the total possible shares to be received;
|
·
|
the
total possible shares to be received and the combined conversion price of
the total number of shares underlying the other security calculated by
using the conversion price on the date of the sale of that other security
and the total possible number of underlying shares; and
|
·
|
the
total possible discount (premium) to the market price as of the date of
the sale of that other security, calculated by subtracting the total
conversion/exercise price on the date of the sale of that other security
from the combined market price of the total number of underlying shares on
that date:
|
Date
|
Entity
|
Shares
|
Instrument
|
Market
|
Conversion
|
Market
|
Conversion
|
Discount
|
||||||||||||||||||
Price
|
Price
|
Value
|
Value
|
(Premium)
|
||||||||||||||||||||||
3/28/2007
|
Stillwater
|
1,000,000
|
Warrant
|
$
|
0.46
|
$
|
0.48
|
$
|
460,000
|
$
|
480,000
|
$
|
(20,000
|
)
|
||||||||||||
7/21/2006
|
Rainbow
Gate (Stillwater Affiliate )
|
269,231
|
Convertible
Note
|
$
|
2.60
|
$
|
2.60
|
$
|
700,001
|
$
|
700,001
|
$
|
-
|
|||||||||||||
7/21/2006
|
Rainbow
Gate (Stillwater Affiliate )
|
188,462
|
Warrant
|
$
|
2.60
|
$
|
3.60
|
$
|
490,001
|
$
|
678,463
|
$
|
(188,462
|
)
|
||||||||||||
10/20/2005
|
Rainbow
Gate (Stillwater Affiliate)
|
54,546
|
Warrant
|
$
|
8.70
|
$
|
10.00
|
$
|
474,550
|
$
|
545,460
|
$
|
(70,910
|
)
|
||||||||||||
10/28/2004
|
Rainbow
Gate (Stillwater Affiliate)
|
29,742
|
Warrant
|
$
|
10.40
|
$
|
8.60
|
$
|
309,317
|
$
|
255,781
|
$
|
53,536
|
|||||||||||||
3/4/2004
|
Stillwater
|
51,778
|
Warrant
|
$
|
24.90
|
$
|
27.60
|
$
|
1,289,272
|
$
|
1,429,073
|
$
|
(139,801
|
)
|
||||||||||||
6/20/2002
|
Stillwater
|
30,000
|
Warrant
|
$
|
3.20
|
$
|
4.26
|
$
|
96,000
|
$
|
127,800
|
$
|
(31,800
|
)
|
||||||||||||
Total
|
1,623,759
|
$
|
3,819,141
|
$
|
4,216,578
|
$
|
(397,437
|
)
|
·
|
all
payments that have been made or that may be required to be made by the
registrant;
|
·
|
the
resulting net proceeds to the registrant; and
|
·
|
the
combined total possible profit to be realized as a result of any
conversion discounts regarding the securities underlying the convertible
notes and any other warrants, options, notes, or other securities of the
registrant that are held by the selling stockholder or any affiliates of
the selling stockholder (as disclosed elsewhere in this registration
statement).
|
Gross
|
Fees
|
Net
|
Discount
|
Premium
|
Combined
|
|||||||||||||||||
Proceeds
|
Proceeds
|
Premium
|
||||||||||||||||||||
$
|
500,000
|
$
|
108,583
|
$
|
391,417
|
157,143
|
$
|
(397,437
|
)
|
$
|
(240,294
|
)
|
%
of Net
|
Monthly
|
|||||||||||
Item
|
Amount
|
Proceeds
|
Average
|
|||||||||
Total
Potential Payments
|
$
|
525,000
|
134
|
%
|
13
|
%
|
||||||
Total
Possible Discount
|
$
|
157,143
|
40
|
%
|
4
|
%
|
·
|
the
date of the transaction;
|
·
|
the
number of shares of the class of securities subject to the transaction
that were outstanding prior to the transaction;
|
·
|
the
number of shares of the class of securities subject to the transaction
that were outstanding prior to the transaction and held by persons other
than the selling stockholder, affiliates of the company, or affiliates of
the selling stockholder;
|
·
|
the
number of shares of the class of securities subject to the transaction
that were issued or issuable in connection with the
transaction;
|
·
|
the
percentage of total issued and outstanding securities that were issued or
issuable in the transaction (assuming full issuance), with the percentage
calculated by taking the number of shares issued or issuable in connection
with the applicable transaction and dividing that number by the number of
shares issued and outstanding prior to the applicable transaction and held
by persons other than the selling stockholder, affiliates of the company,
or affiliates of the selling stockholder;
|
·
|
the
market price per share of the class of securities subject to the
transaction immediately prior to the transaction; and
|
·
|
the
current market price per share of the class of securities subject to the
transaction.
|
Prior
|
Shares
Held
|
Prior
|
Shares
|
Shares
|
%
of
|
Market
|
Current
|
||||||||||||||||||||||||
Outstanding
|
and
Affiliates
|
(a)
- (b)
|
Transaction
|
To
Selling
|
Net
|
Day
|
Price
|
||||||||||||||||||||||||
Date
|
(a)
|
(b)
|
Shares
|
Stock
& Warrants
|
Shareholder
|
Offer
|
Prior
|
2/11/09
|
|||||||||||||||||||||||
3/28/2007
|
11,049,164
|
2,043,987
|
9,005,177
|
2,438,096
|
2,438,096
|
27
|
%
|
$
|
0.40
|
$
|
0.55
|
||||||||||||||||||||
7/21/2006
|
10,052,249
|
1,523,832
|
8,528,417
|
4,108,845
|
650,001
|
48
|
%
|
$
|
2.60
|
$
|
0.55
|
||||||||||||||||||||
10/20/2005
|
9,978,786
|
1,496,832
|
8,481,954
|
2,659,049
|
145,454
|
31
|
%
|
$
|
7.90
|
$
|
0.55
|
||||||||||||||||||||
10/28/2004
|
6,625,759
|
1,309,152
|
5,309,152
|
1,950,000
|
276,071
|
37
|
%
|
$
|
10.70
|
$
|
0.55
|
·
|
the
number of shares outstanding prior to the convertible note transaction
that are held by persons other than the selling stockholder, affiliates of
the Company, and affiliates of the selling stockholder;
|
·
|
the
number of shares registered for resale by the selling stockholder or
affiliates of the selling stockholder in prior registration
statements;
|
·
|
the
number of shares registered for resale by the selling stockholder or
affiliates of the selling stockholder that continue to be held by the
selling stockholder or affiliates of the selling
stockholder;
|
·
|
the
number of shares that have been sold in registered resale transactions by
the selling stockholder or affiliates of the selling stockholder;
and
|
·
|
the
number of shares registered for resale on behalf of the selling
stockholder or affiliates of the selling stockholder in the current
transaction.
|
Shares
Not
|
Shares
|
Shares
|
||
Held
by
|
Registered
by
|
Registered
|
Sold
in
|
Shares
to be
|
Affiliates
or
|
Selling
Stockholder
|
Shares
|
Registered
|
Registered
in
|
Selling
Stockholder
|
in
Previous
|
To
Be Held
|
Resale
|
Current
|
Prior
to Note
|
Filings
|
Selling
Stockholder
|
Transactions
|
Transaction
|
9,005,177
|
1,757,744
|
1,610,244
|
147,500
|
2,438,096
|
Page
|
|
Report
of Independent Registered Public Accounting Firm
|
69
|
Consolidated
Balance Sheets as of December 31, 2008 and 2007
|
70
|
Consolidated
Statements of Operations for the years ended December 31, 2008, 2007, and
2006
|
71
|
Consolidated
Statements of Changes in Shareholders’ Equity (Capital Deficit) for the
years
ended December
31, 2008, 2007, and 2006
|
72
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2008, 2007, and
2006
|
73
|
Notes
to the Consolidated Financial Statements
|
74
|
Schedule
II – Valuation and Qualifying Accounts, included in Item 16. Exhibits and
Financial Statement Schedules
|
117
|
Condensed
Consolidated Balance Sheets as of June 30, 2009 (unaudited) and December
31, 2008
|
96
|
Condensed
Consolidated Statements of Operations for the Three and Six Months ended
June 30, 2009 and 2008 (unaudited)
|
97
|
Condensed
Consolidated Statements of Changes in Shareholders’ Equity for the Six
Months ended June 30, 2009 (unaudited)
|
98
|
Condensed
Consolidated Statements of Cash Flows for the Six Months ended June 30,
2009 and 2008 (unaudited)
|
99
|
Notes
to Condensed Consolidated Financial Statements (unaudited)
|
100
|
December
31,
|
||||||||
2008
|
2007
|
|||||||
(In
thousands, except
|
||||||||
share
and per share amounts)
|
||||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$
|
2,404
|
$
|
713
|
||||
Investments
– held to maturity
|
97
|
94
|
||||||
Accounts
receivable, net
|
3,643
|
2,383
|
||||||
Inventory
|
2,374
|
1,815
|
||||||
Prepaid
expenses and other current assets
|
796
|
850
|
||||||
Total
current assets
|
9,314
|
5,855
|
||||||
Equipment,
furniture and leasehold improvements, net
|
381
|
292
|
||||||
Intangible
assets, net
|
47
|
51
|
||||||
Other
assets
|
—
|
232
|
||||||
Deferred
financing costs, net
|
362
|
218
|
||||||
Total
assets
|
$
|
10,104
|
$
|
6,648
|
||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY (CAPITAL DEFICIT)
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$
|
1,026
|
$
|
620
|
||||
Accrued
compensation
|
837
|
891
|
||||||
Other
accrued expenses
|
804
|
729
|
||||||
Advance
payments
|
694
|
35
|
||||||
Deferred
revenue
|
164
|
179
|
||||||
Current
portion of debt
|
1,691
|
7,089
|
||||||
Other
current liabilities
|
798
|
1,020
|
||||||
Total
current liabilities
|
6,014
|
10,563
|
||||||
Long-term
debt
|
—
|
60
|
||||||
Total
liabilities
|
6,014
|
10,623
|
||||||
Commitments
and contingencies
|
||||||||
Redeemable
common stock,: 522,500 shares redeemable as of December 31,
2008 and 162,500 shares redeemable as of December 31, 2007
|
429
|
195
|
||||||
Shareholders’
equity (capital deficit):
|
||||||||
Preferred
stock, $.001 par value: authorized 10,000,000 shares:
|
||||||||
Series
B Convertible Preferred stock, (liquidation preference of $5,739,000)
stated value $1,000 per share, $.001 par value: 10,000 shares
designated and 5,739 issued as of December 31, 2008
|
—
|
—
|
||||||
Common
stock, $.001 par value: authorized 200,000,000 shares, issued and
outstanding, 15,213,959 shares in 2008 and 12,458,400 shares in 2007, net
of redeemable common stock
|
15
|
12
|
||||||
Additional
paid in capital
|
204,818
|
195,131
|
||||||
Accumulated
deficit
|
(201,172
|
)
|
(199,313
|
)
|
||||
Total
shareholders’ equity (capital deficit)
|
3,661
|
( 4,170
|
)
|
|||||
Total
liabilities and shareholders’ equity (capital deficit)
|
$
|
10,104
|
$
|
6,648
|
For
the Year Ended December 31,
|
||||||||||
2008
|
2007
|
2006
|
||||||||
(In
thousands, except per share data)
|
||||||||||
Revenue:
|
||||||||||
Product
revenue
|
$
|
15,730
|
$16,169
|
$
|
7,983
|
|||||
Contract
revenue
|
3,009
|
1,385
|
186
|
|||||||
Total
revenue, net
|
18,739
|
17,554
|
8,169
|
|||||||
Cost
of goods sold:
|
||||||||||
Product
revenue
|
9,086
|
11,889
|
11,226
|
|||||||
Contract
revenue
|
1,587
|
739
|
93
|
|||||||
Cost
of goods sold
|
10,673
|
12,628
|
11,359
|
|||||||
Gross
profit (loss)
|
8,066
|
4,926
|
(3,190
|
)
|
||||||
Operating
expenses:
|
||||||||||
Research
and development
|
2,081
|
2,949
|
4,406
|
|||||||
Selling,
general and administrative
|
6,254
|
6,591
|
8,860
|
|||||||
Total
operating expenses
|
8,335
|
9,540
|
13,266
|
|||||||
Loss
from operations
|
(269
|
)
|
(4,614
|
)
|
(16,456
|
|||||
Other
income (expense):
|
||||||||||
Interest
expense
|
(1,990
|
)
|
(3,087
|
)
|
(1,306
|
|||||
Loss
on extinguishment of debt
|
—
|
(10,749
|
)
|
—
|
||||||
(Loss)
gain on warrant derivative liability
|
—
|
(853
|
)
|
2,405
|
||||||
Other
income, net
|
400
|
815
|
91
|
|||||||
Total
other (expense) income, net
|
(1,590
|
)
|
(13,874
|
)
|
1,190
|
|||||
Net
loss
|
$
|
(1,859
|
)
|
$(18,488
|
)
|
$
|
(15,266
|
|||
Loss
per share, basic and diluted
|
$
|
(0.13
|
)
|
$(1.59
|
)
|
$
|
(1.52
|
|||
Weighted
average number of shares outstanding:
|
||||||||||
Basic
and diluted
|
14,175
|
11,633
|
10,058
|
Preferred
Stock
|
Common
Stock
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Additional
Paid-in Capital
|
Accumulated
Deficit
|
Total
Shareholders’ Equity (Capital Deficit)
|
||||||||||||||||||||||
Balance,
December 31, 2005
|
— | $ | — | 9,997 | $ | 10 | $ | 175,950 | $ | (165,559 | ) | $ | 10,401 | |||||||||||||||
Debt
conversion
|
— | — | 85 | — | 220 | — | 220 | |||||||||||||||||||||
Issuance
of common stock for services
|
— | — | 254 | — | 580 | — | 580 | |||||||||||||||||||||
Stock-based
compensation
|
— | — | — | — | 2,891 | — | 2,891 | |||||||||||||||||||||
Stock
options exercised
|
— | — | 5 | — | 10 | — | 10 | |||||||||||||||||||||
Net
loss
|
— | — | — | — | — | (15,266 | ) | (15,266 | ) | |||||||||||||||||||
Balance,
December 31, 2006
|
— | $ | — | 10,341 | $ | 10 | 179,651 | $ | (180,825 | ) | $ | (1,164 | ) | |||||||||||||||
Debt
conversion
|
— | — | 797 | 1 | 310 | — | 311 | |||||||||||||||||||||
Issuance
of common stock for services
|
— | — | 1,310 | 1 | 1,129 | — | 1,130 | |||||||||||||||||||||
Exercise
of common stock warrants
|
— | — | 10 | — | 3 | — | 3 | |||||||||||||||||||||
Stock-based
compensation
|
— | — | — | — | 1,652 | — | 1,652 | |||||||||||||||||||||
Expiration
of derivative liability- warrants
|
— | — | — | — | 2,653 | — | 2,653 | |||||||||||||||||||||
Beneficial
conversion premium
|
— | — | — | — | 5,078 | — | 5,078 | |||||||||||||||||||||
Fair
value of warrants issued
|
— | — | — | — | 4,655 | — | 4,655 | |||||||||||||||||||||
Net
loss
|
— | — | — | — | (18,488 | ) | (18,488 | ) | ||||||||||||||||||||
Balance,
December 31, 2007
|
— | $ | — | 12,458 | $ | 12 | $ | 195,131 | $ | (199,313 | ) | $ | (4,170 | ) | ||||||||||||||
Sale
of preferred stock, net of issuance costs
|
4 | — | — | — | 3,933 | — | 3,933 | |||||||||||||||||||||
Sale
of common stock, net of issuance costs
|
— | — | 1,587 | 2 | 1,578 | — | 1,580 | |||||||||||||||||||||
Debt
conversion
|
2 | — | 718 | 1 | 1,956 | — | 1,957 | |||||||||||||||||||||
Issuance
of common stock for services
|
— | — | 326 | — | 303 | — | 303 | |||||||||||||||||||||
Stock-based
compensation
|
— | — | — | — | 928 | — | 928 | |||||||||||||||||||||
Put
option waiver
|
— | — | 125 | 150 | — | 150 | ||||||||||||||||||||||
Fair
value of warrants issued
|
— | — | — | — | 883 | — | 883 | |||||||||||||||||||||
Deemed
dividend, put option
|
— | — | — | — | (44 | ) | — | (44 | ) | |||||||||||||||||||
Net
loss
|
— | — | — | — | — | (1,859 | ) | (1,859 | ) | |||||||||||||||||||
Balance,
December 31, 2008
|
6 | $ | — | 15,214 | $ | 15 | $ | 204,818 | $ | (201,172 | ) | $ | 3,661 | |||||||||||||||
Year
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(In
thousands)
|
||||||||||||
Cash
flows from operating activities:
|
||||||||||||
Net
loss
|
$
|
(1,859
|
)
|
$
|
(18,488
|
)
|
$
|
(15,266
|
)
|
|||
Adjustments
to reconcile net loss to net cash provided by (used in) operating
activities:
|
||||||||||||
Depreciation
and amortization
|
223
|
392
|
841
|
|||||||||
Amortization
of deferred financing and waiver fees
|
1,295
|
418
|
221
|
|||||||||
Increase
(reduction) of provision for sales returns and doubtful
accounts
|
499
|
(79
|
)
|
(39
|
)
|
|||||||
Stock
based compensation
|
928
|
1,652
|
2,891
|
|||||||||
Issuance
of common stock for services, net
|
95
|
1,130
|
553
|
|||||||||
Amortization
of discount on notes payable
|
25
|
1,925
|
956
|
|||||||||
Loss
(gain) on warrant derivative liability
|
—
|
853
|
(2,405
|
)
|
||||||||
Loss
on extinguishment of debt
|
—
|
10,749
|
—
|
|||||||||
Loss
on other asset
|
—
|
—
|
157
|
|||||||||
Write-off
of miscellaneous receivable
|
—
|
103
|
—
|
|||||||||
Changes
in operating assets and liabilities:
|
||||||||||||
Accounts
receivable
|
(1,759
|
)
|
(1,390
|
)
|
(42
|
)
|
||||||
Inventory
|
(559
|
)
|
670
|
1,354
|
||||||||
Prepaid
expenses and other current assets
|
399
|
1
|
389
|
|||||||||
Advance
payments
|
659
|
(409
|
)
|
384
|
||||||||
Deferred
revenue
|
(15
|
)
|
53
|
30
|
||||||||
Accounts
payable, accrued compensation, and accrued expenses
|
429
|
(381
|
)
|
(566
|
)
|
|||||||
Other
current liabilities
|
(222
|
)
|
858
|
153
|
||||||||
Net
cash provided by (used in) operating activities
|
138
|
(1,943
|
)
|
(10,389
|
)
|
|||||||
Cash
flows from investing activities:
|
||||||||||||
Purchase
of equipment
|
(308
|
)
|
(16
|
)
|
(204
|
)
|
||||||
Proceeds
from maturity of (purchase of) investments – held to
maturity
|
(3
|
)
|
77
|
(51
|
)
|
|||||||
Purchase
of intangibles and other assets
|
—
|
—
|
(2
|
)
|
||||||||
Net
cash (used in) provided by investing activities
|
(311
|
)
|
61
|
(257
|
)
|
|||||||
Cash
flows from financing activities:
|
||||||||||||
Proceeds
from sale of preferred stock, net of issuance costs
|
3,933
|
—
|
—
|
|||||||||
Proceeds
from sale of common stock, net of issuance costs
|
1,580
|
|||||||||||
Proceeds
from exercise of stock options and warrants
|
—
|
3
|
10
|
|||||||||
Borrowings
from line of credit
|
1,934
|
1,108
|
—
|
|||||||||
Proceeds
from long-term debt
|
—
|
500
|
5,970
|
|||||||||
Payments
related to deferred financing costs
|
(117
|
)
|
(368
|
)
|
(591
|
)
|
||||||
Payments
of long-term debt and capitalized lease obligations
|
(5,466
|
)
|
(63
|
)
|
(55
|
)
|
||||||
Net
cash provided by financing activities
|
1,864
|
1,180
|
5,334
|
|||||||||
Net
increase (decrease) in cash and cash equivalents
|
1,691
|
(702
|
)
|
(5,312
|
)
|
|||||||
Cash
and cash equivalents, beginning of year
|
713
|
1,415
|
6,727
|
|||||||||
Cash
and cash equivalents, end of year
|
$
|
2,404
|
$
|
713
|
$
|
1,415
|
||||||
Cash
paid for interest
|
$
|
702
|
$
|
426
|
$
|
128
|
||||||
Cash
paid for taxes
|
$
|
44
|
$
|
78
|
$
|
40
|
||||||
Supplemental
non-cash transactions:
|
||||||||||||
Conversion
of debt to common stock
|
$
|
251
|
$
|
311
|
$
|
220
|
||||||
Conversion
of debt to convertible preferred stock – series B
|
$
|
1,706
|
$
|
—
|
$
|
—
|
||||||
Issuance
of 485,000 and 162,500 shares of common stock for deferred financing costs
in 2008 and 2007, respectively.
|
$
|
340
|
$
|
195
|
$
|
—
|
||||||
Issuance
of 1,120,000 shares of common stock underlying warrants for deferred
financing costs in 2008.
|
$
|
715
|
$
|
—
|
$
|
—
|
December
31,
|
||||||||
2008
|
2007
|
|||||||
Trade
receivables
|
$
|
4,500
|
$
|
2,741
|
||||
Less
allowance for doubtful accounts
|
(857
|
)
|
(358
|
)
|
||||
Net
receivables
|
$
|
3,643
|
$
|
2,383
|
December
31,
|
||||||||
2008
|
2007
|
|||||||
Raw
materials
|
$
|
1,109
|
$
|
1,069
|
||||
Work
in process
|
280
|
370
|
||||||
Finished
goods
|
985
|
376
|
||||||
Total
inventory
|
$
|
2,374
|
$
|
1,815
|
December
31,
|
||||||||
2008
|
2007
|
|||||||
Vendor
prepayments
|
$
|
180
|
$
|
537
|
||||
Other
prepaid expenses*
|
383
|
310
|
||||||
Other
current assets*
|
233
|
3
|
||||||
Total
prepaid expenses and other current assets
|
$
|
796
|
$
|
850
|
December
31,
|
||||||||
2008
|
2007
|
|||||||
Computer
hardware and software
|
$
|
1,039
|
$
|
1,025
|
||||
Lab
and factory equipment
|
3,612
|
3,318
|
||||||
Furniture,
fixtures, and office equipment
|
306
|
306
|
||||||
Assets
under capital leases
|
66
|
66
|
||||||
Leasehold
improvements
|
473
|
473
|
||||||
Total
equipment, furniture and leasehold improvements
|
5,496
|
5,188
|
||||||
Less: accumulated
depreciation
|
(5,115
|
)
|
(4,896
|
)
|
||||
Equipment,
furniture and leasehold improvements, net
|
$
|
381
|
$
|
292
|
December
31,
|
||||||||
2008
|
2007
|
|||||||
Current
portion of debt:
|
||||||||
Other
debt
|
$
|
60
|
$
|
44
|
||||
Line
of credit
|
1,631
|
1,108
|
||||||
8%
Amended Senior Secured Convertible Notes
|
—
|
5,962
|
||||||
Less: Unamortized
discount on notes payable
|
—
|
(25
|
)
|
|||||
Current
portion of debt, net
|
1,691
|
7,089
|
||||||
Long-term
debt:
|
||||||||
Other
debt
|
—
|
60
|
||||||
Long-term
debt, net
|
—
|
60
|
||||||
Total
debt, net
|
$
|
1,691
|
$
|
7,149
|
·
|
the
due dates have been changed from July 23, 2007 and January 21, 2008 to
December 21, 2008;
|
·
|
the annual interest rate has been changed from 6% to 8%; |
·
|
the
Amended Notes are convertible into 8,407,612 shares of the Company’s
common stock. The conversion price for $5.8 million of
principal is at a conversion price of $0.75, originally $2.60 and the
conversion price for $250,000 of principal remains the same at
$0.35;
|
·
|
the
Agreement adjusts the exercise price of the amended Warrants from $3.60 to
$1.03 per share for 1,553,468 shares of common stock and requires the
issuance of warrants for an additional 3,831,859 shares of common stock at
$1.03 per share with an expiration date of July 21,
2011. The warrants are subject to anti-dilution
adjustment rights;
|
·
|
50%
of the Amended Notes can be converted into the Company’s newly designated
Series A Senior Secured Convertible Preferred Stock which is convertible
into common stock at the same rate as the Amended
Notes;
|
·
|
the liquidated damages of 1% per month will no longer accrue and the deferred balance at July 23, 2007 is forgiven; and |
·
|
there is no minimum cash or cash equivalents balance requirement. |
|
For
the years ended December 31,
|
||||||||||||||
2008
|
2007
|
2006
|
||||||||||||
Domestic
|
$
|
(1,859
|
)
|
$
|
(18,488
|
)
|
$
|
(15,266
|
)
|
|||||
Total
|
$
|
(1,859
|
)
|
$
|
(18,488
|
)
|
$
|
(15,266
|
)
|
|||||
For
the years ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Federal
and state net operating loss carryforwards
|
$
|
40,964
|
$
|
42,266
|
$
|
41,554
|
||||||
Research
and development tax credit carryforwards
|
1,454
|
1,397
|
—
|
|||||||||
Stock
based compensation
|
879
|
609
|
279
|
|||||||||
Depreciation
and amortization
|
466
|
552
|
(63
|
)
|
||||||||
Other
provisions and expenses not currently deductible
|
851
|
585
|
304
|
|||||||||
Total
deferred tax assets
|
44,614
|
45,409
|
42,074
|
|||||||||
Less
valuation allowance
|
(44,614
|
)
|
(45,409
|
)
|
(42,074
|
)
|
||||||
Net
deferred tax asset
|
$
|
0
|
$
|
0
|
$
|
0
|
For
the years ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
U.S.
Federal income tax benefit at federal statutory rate
|
34
|
%
|
34
|
%
|
34
|
%
|
||||||
Change
in valuation allowance
|
43
|
%
|
(18
|
)%
|
(32
|
)
%
|
||||||
Change
in effective state tax rate
|
(75
|
)%
|
—
|
—
|
||||||||
Loss
on extinguishment of debt
|
—
|
(20
|
)%
|
—
|
||||||||
Other,
net
|
(
2
|
)
%
|
4
|
%
|
(
2
|
)
%
|
||||||
0
|
%
|
0
|
%
|
0
|
%
|
Dividend
yield
|
0
|
%
|
||
Risk
free interest rates
|
5.25
|
%
|
||
Expected volatility
|
122
|
%
|
||
Expected
term (in years)
|
0.4
years
|
Number
of Shares
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contractual Life (In Years)
|
Aggregate
Intrinsic Value
|
||||||||||
Balances
at December 31, 2005
|
1,805,264
|
$
|
10.90
|
||||||||||
Options
granted
|
185,744
|
4.30
|
|||||||||||
Options
exercised
|
(5,000
|
)
|
2.10
|
||||||||||
Options
forfeited
|
(453,115
|
)
|
7.47
|
||||||||||
Options
cancelled
|
(467,148
|
)
|
11.97
|
||||||||||
Balances
at December 31, 2006
|
1,065,745
|
$
|
2.94
|
||||||||||
Options
granted
|
228,577
|
1.41
|
|||||||||||
Options
exercised
|
—
|
—
|
|||||||||||
Options
forfeited
|
(203,943
|
)
|
2.90
|
||||||||||
Options
cancelled
|
(196,056
|
)
|
2.67
|
||||||||||
Balances
at December 31, 2007
|
894,323
|
$
|
2.62
|
||||||||||
Options
granted
|
927,253
|
0.89
|
|||||||||||
Options
exercised
|
—
|
—
|
|||||||||||
Options
forfeited
|
(205,903
|
)
|
2.29
|
||||||||||
Options
cancelled
|
—
|
—
|
|||||||||||
Balances
at December 31, 2008
|
1,615,673
|
$
|
1.63
|
6.43
|
$
|
1,440
|
|||||||
Vested
or expected to vest at
December
31, 2008(1)
|
1,568,953
|
$
|
1.51
|
6.43
|
$
|
—
|
|||||||
Exercisable
at December 31, 2008
|
1,148,476
|
$
|
1.79
|
6.61
|
$
|
—
|
Options
Outstanding
|
Options
Exercisable
|
|||||||||||||||||||||
Number
Outstanding
|
Weighted
Average Remaining Contractual Life (In Years)
|
Weighted
Average Exercise Price
|
Number
Exercisable
|
Weighted
Average Exercisable Price
|
||||||||||||||||||
$0.34
- $0.97
|
759,553
|
7.39
|
$
|
0.80
|
404,620
|
$
|
0.79
|
|||||||||||||||
$1.00
- $1.44
|
388,577
|
8.71
|
1.38
|
358,397
|
1.41
|
|||||||||||||||||
$2.60
- $2.70
|
430,343
|
2.98
|
2.61
|
352,959
|
2.61
|
|||||||||||||||||
$3.50
- $5.80
|
8,000
|
3.55
|
5.51
|
8,000
|
5.51
|
|||||||||||||||||
$6.60
- $22.50
|
29,200
|
2.57
|
10.91
|
24,500
|
10.90
|
|||||||||||||||||
1,615,673
|
6.43
|
$
|
1.63
|
1,148,476
|
$
|
1.79
|
For
the years ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Cost
of revenue
|
$
|
134
|
$
|
215
|
$
|
343
|
||||||
Research
and development
|
237
|
357
|
435
|
|||||||||
Selling,
general, and administrative
|
557
|
1,080
|
2,113
|
|||||||||
Total
stock compensation expense
|
$
|
928
|
$
|
1,652
|
$
|
2,891
|
For
the years ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Dividend
yield
|
0
|
%
|
0
|
%
|
0
|
%
|
||||||
Risk
free interest rates
|
1.71%
- 3.37
|
%
|
3.28%
- 4.23
|
%
|
4.59%
- 4.82
|
%
|
||||||
Expected volatility
|
87%
-92
|
%
|
105%
-106
|
%
|
123%
- 126
|
%
|
||||||
Expected
term ( in
years)
|
5
years
|
5
years
|
5
years
|
Outstanding
Warrants
|
||||||||
Shares
|
Weighted
Average Exercise Price
|
|||||||
Balances
at December 31, 2005
|
2,619,725
|
$
|
10.20
|
|||||
Warrants
granted
|
1,805,037
|
3.49
|
||||||
Warrants
exercised
|
—
|
—
|
||||||
Warrants
expired
|
(876,588
|
)
|
6.90
|
|||||
Balances
at December 31, 2006
|
3,548,174
|
$
|
7.05
|
|||||
Warrants
granted
|
4,831,859
|
0.88
|
||||||
Warrants
exercised
|
(9,524
|
)
|
0.35
|
|||||
Warrants
expired
|
(30,000
|
)
|
4.26
|
|||||
Balances
at December 31, 2007
|
8,340,509
|
$
|
2.65
|
|||||
Warrants
granted
|
4,038,740
|
1.22
|
||||||
Warrants
exercised
|
—
|
—
|
||||||
Warrants
expired
|
(100,009
|
)
|
27.60
|
|||||
Balances
at December 31, 2008
|
12,279,239
|
$
|
1.88
|
Quarters
Ended
|
|||||||||||||||||
March
31, 2008
|
June
30, 2008
|
September
30, 2008
|
December
31, 2008
|
||||||||||||||
Revenues
|
$
|
2,665
|
$
|
5,619
|
$
|
5,185
|
$
|
5,270
|
|||||||||
Gross
margin
|
$
|
352
|
$
|
2,623
|
$
|
2,384
|
$
|
2,707
|
|||||||||
Net
(loss) income
|
$
|
(2,674
|
)
|
$
|
(122
|
)
|
$
|
361
|
$
|
576
|
|||||||
Net
(loss) income per share – basic
|
$
|
(0.21
|
)
|
$
|
(0.01
|
)
|
$
|
0.02
|
$
|
0.04
|
|||||||
Net
(loss) income per share – diluted
|
$
|
(0.21
|
)
|
$
|
(0.01
|
)
|
$
|
0.02
|
$
|
0.03
|
|||||||
Weighted
average number of shares outstanding – basic
|
12,621
|
14,321
|
14,617
|
15,113
|
|||||||||||||
Weighted
average number of shares outstanding –diluted
|
12,621
|
14,321
|
23,430
|
23,907
|
|||||||||||||
Quarters
Ended
|
|||||||||||||||||
March
31, 2007
|
June
30, 2007
|
September
30, 2007
|
December
31, 2007
|
||||||||||||||
Revenues
|
$
|
3,609
|
$
|
4,232
|
$
|
5,071
|
$
|
4,642
|
|||||||||
Gross
margin
|
$
|
494
|
$
|
1,286
|
$
|
2,012
|
$
|
1,134
|
|||||||||
Net
loss
|
$
|
(2,937
|
)
|
$
|
(1,728
|
)
|
$
|
(12,651
|
)
|
$
|
(1,172
|
)
|
|||||
Net
loss per share – basic and diluted
|
$
|
(0.27
|
)
|
$
|
(0.15
|
)
|
$
|
(1.06
|
)
|
$
|
(0.10
|
)
|
|||||
Weighted
average number of shares outstanding – basic and diluted
|
10,792
|
11,176
|
11,935
|
12,249
|
June
30, 2009
(unaudited)
|
December
31, 2008
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$
|
2,894
|
$
|
2,404
|
||||
Investments
– held to maturity
|
97
|
97
|
||||||
Accounts
receivable, net
|
2,919
|
3,643
|
||||||
Inventory
|
2,561
|
2,374
|
||||||
Prepaid
expenses and other current assets
|
837
|
796
|
||||||
Total
current assets
|
9,308
|
9,314
|
||||||
Equipment,
furniture and leasehold improvements, net
|
819
|
381
|
||||||
Intangible
assets, net
|
45
|
47
|
||||||
Deferred
financing costs, net
|
61
|
362
|
||||||
Total
assets
|
$
|
10,233
|
$
|
10,104
|
||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$
|
468
|
$
|
1,026
|
||||
Accrued
compensation
|
865
|
837
|
||||||
Other
accrued expenses
|
688
|
804
|
||||||
Advance
payments
|
266
|
694
|
||||||
Deferred
revenue
|
132
|
164
|
||||||
Debt
|
232
|
1,691
|
||||||
Other
current liabilities
|
955
|
798
|
||||||
Total
current liabilities
|
3,606
|
6,014
|
||||||
Commitments
and contingencies
|
||||||||
Redeemable
common stock: 522,500 redeemable shares
|
429
|
429
|
||||||
Shareholders’
equity:
|
||||||||
Preferred
stock, $.001 par value: authorized 10,000,000 shares:
|
—
|
—
|
||||||
Series
B Convertible Preferred stock, (liquidation preference of
$5,739,000)
stated
value $1,000 per share, $.001 par value: 10,000 shares
designated and 5,739 issued
|
—
|
—
|
||||||
Common
stock, $.001 par value: authorized 200,000,000 shares, issued
and
outstanding,
15,669,635 shares as of June 30, 2009 and 15,213,959 as of
December
31, 2008, net of redeemable common stock
|
16
|
15
|
||||||
Additional
paid-in capital
|
205,621
|
204,818
|
||||||
Accumulated
deficit
|
(199,439
|
)
|
(201,172
|
)
|
||||
Total
shareholders’ equity
|
6,198
|
3,661
|
||||||
Total
liabilities and shareholders’ equity
|
$
|
10,233
|
$
|
10,104
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Revenue:
|
||||||||||||||||
Product
revenue
|
$
|
4,944
|
$
|
4,496
|
$
|
9,300
|
$
|
6,958
|
||||||||
Contract
revenue
|
908
|
1,123
|
1,696
|
1,326
|
||||||||||||
Total
revenue, net
|
5,852
|
5,619
|
10,996
|
8,284
|
||||||||||||
Cost
of goods sold:
|
||||||||||||||||
Product
revenue
|
1,565
|
2,437
|
3,822
|
4,618
|
||||||||||||
Contract
revenue
|
488
|
559
|
916
|
691
|
||||||||||||
Total
cost of goods sold
|
2,053
|
2,996
|
4,738
|
5,309
|
||||||||||||
Gross
profit
|
3,799
|
2,623
|
6,258
|
2,975
|
||||||||||||
Operating
expenses:
|
||||||||||||||||
Research
and development
|
392
|
634
|
754
|
1,308
|
||||||||||||
Selling,
general and administrative
|
1,941
|
1,697
|
3,470
|
3,504
|
||||||||||||
Total
operating expenses
|
2,333
|
2,331
|
4,224
|
4,812
|
||||||||||||
Income
(loss) from operations
|
1,466
|
292
|
2,034
|
(1,837
|
)
|
|||||||||||
Other
income (expense):
|
||||||||||||||||
Interest
expense
|
(166
|
)
|
(537
|
)
|
(341
|
)
|
(1,168
|
)
|
||||||||
Other
income, net
|
39
|
123
|
40
|
209
|
||||||||||||
Total
other income (expense)
|
(127
|
)
|
(414
|
)
|
(301
|
)
|
(959
|
)
|
||||||||
Net
income (loss)
|
$
|
1,339
|
$
|
(122
|
)
|
$
|
1,733
|
$
|
(2,796
|
)
|
||||||
Income
(loss) per share, basic
|
$
|
0.08
|
$
|
(0.01
|
)
|
$
|
0.11
|
$
|
(0.21
|
)
|
||||||
Income
(loss) per share, diluted
|
$
|
0.05
|
$
|
(0.01
|
)
|
$
|
0.07
|
$
|
(0.21
|
)
|
||||||
Weighted
average number of shares outstanding:
|
||||||||||||||||
Basic
|
16,186,482
|
14,320,570
|
16,024,400
|
13,470,735
|
||||||||||||
Diluted
|
24,606,945
|
14,320,570
|
24,326,249
|
13,470,735
|
Preferred
Stock
|
Common
Stock
|
Additional
Paid-in
|
Accumulated
|
Total
Shareholders’
|
||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Equity
|
||||||||||||||||||||||
Balance,
December 31, 2008
|
6
|
$
|
—
|
15,214
|
$
|
15
|
$
|
204,818
|
$
|
(201,172
|
)
|
$
|
3,661
|
|||||||||||||||
Issuance
of common stock for services
|
—
|
—
|
456
|
1
|
258
|
—
|
259
|
|||||||||||||||||||||
Stock-based
compensation
|
—
|
—
|
—
|
—
|
545
|
—
|
545
|
|||||||||||||||||||||
Net
income
|
—
|
—
|
—
|
—
|
—
|
1,733
|
1,733
|
|||||||||||||||||||||
Balance,
June 30, 2009 (unaudited)
|
6
|
$
|
—
|
15,670
|
$
|
16
|
$
|
205,621
|
$
|
(199,439
|
)
|
$
|
6,198
|
|||||||||||||||
Six
months Ended
|
||||||||
June
30,
|
||||||||
2009
|
2008
|
|||||||
(unaudited)
|
||||||||
Cash
flows from operating activities:
|
||||||||
Net
income (loss)
|
$
|
1,733
|
$
|
(2,796
|
)
|
|||
Adjustments
to reconcile net income (loss) to net cash provided by (used in) operating
activities:
|
||||||||
Depreciation
and amortization
|
46
|
129
|
||||||
Amortization
of deferred financing and waiver fees
|
301
|
821
|
||||||
(Reduction
of) increase in provision for sales returns and doubtful
accounts
|
(452
|
)
|
146
|
|||||
Stock-based
compensation
|
545
|
607
|
||||||
Amortization
of common stock issued for services
|
126
|
88
|
||||||
Amortization
of discount on notes payable
|
—
|
25
|
||||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
1,175
|
(1,364
|
)
|
|||||
Inventory
|
(186
|
)
|
89
|
|||||
Prepaid
expenses and other current assets
|
92
|
214
|
||||||
Deferred
revenue
|
(32
|
)
|
(99
|
)
|
||||
Accounts
payable, accrued compensation, other accrued expenses, and advance
payments
|
(1,074
|
)
|
539
|
|||||
Other
current liabilities
|
120
|
(424
|
)
|
|||||
Net
cash provided by (used in) operating activities
|
2,394
|
(2,025
|
)
|
|||||
Cash
flows from investing activities:
|
||||||||
Purchase
of equipment
|
(482
|
)
|
(236
|
)
|
||||
Net
cash used in investing activities
|
(482
|
)
|
(236
|
)
|
||||
Cash
flows from financing activities:
|
||||||||
Proceeds
from sale of common stock, net of issuance costs
|
—
|
1,580
|
||||||
Proceeds
from debt
|
—
|
1,700
|
||||||
Payments
related to deferred financing costs
|
—
|
(9
|
)
|
|||||
Payments
of debt and capital leases
|
(1,422
|
)
|
(685
|
)
|
||||
Net
cash (used in) provided by financing activities
|
(1,422
|
)
|
2,586
|
|||||
Net
increase in cash and cash equivalents
|
490
|
325
|
||||||
Cash
and cash equivalents beginning of period
|
2,404
|
713
|
||||||
Cash
and cash equivalents end of period
|
$
|
2,894
|
$
|
1,038
|
||||
Cash
paid for interest
|
$
|
54
|
$
|
314
|
||||
Cash
paid for taxes
|
$
|
35
|
$
|
21
|
||||
Common
stock issued for services charged to prepaid expenses
|
$
|
133
|
$
|
202
|
||||
June
30, 2009
(unaudited)
|
December
31, 2008
|
|||||||
Accounts
receivable
|
$
|
3,324
|
$
|
4,500
|
||||
Less
allowance for doubtful accounts
|
(405
|
)
|
(857
|
)
|
||||
Net
receivables
|
$
|
2,919
|
$
|
3,643
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Numerator:
|
||||||||||||||||
Net
income (loss)
|
$
|
1,339
|
$
|
(122
|
)
|
$
|
1,733
|
$
|
(2,796
|
)
|
||||||
Denominator:
|
||||||||||||||||
Weighted
average shares outstanding for basic earning per share
|
16,186,482
|
14,320,570
|
16,024,400
|
13,470,735
|
||||||||||||
Effective
of dilutive shares:
|
||||||||||||||||
Dilution
from stock options and warrants
|
736,812
|
—
|
560,246
|
—
|
||||||||||||
Redeemable
stock
|
31,651
|
—
|
89,603
|
—
|
||||||||||||
Convertible
preferred stock
|
7,652,000
|
—
|
7,652,000
|
—
|
||||||||||||
Dilutive
potential common shares
|
8,420,463
|
—
|
8,301,849
|
—
|
||||||||||||
Weighted
average shares outstanding for diluted earnings per share
|
24,606,945
|
14,320,570
|
24,326,249
|
13,470,735
|
June
30,
2009
(unaudited)
|
December
31, 2008
|
|||||||
Raw
materials
|
$
|
962
|
$
|
1,109
|
||||
Work
in process
|
322
|
280
|
||||||
Finished
goods
|
1,277
|
985
|
||||||
Total
inventory
|
$
|
2,561
|
$
|
2,374
|
June
30,
2009
(unaudited)
|
December
31, 2008
|
|||||||
Vendor
prepayments
|
$
|
196
|
$
|
180
|
||||
Other
prepaid expenses *
|
503
|
383
|
||||||
Other
assets
|
138
|
233
|
||||||
Total
prepaid expenses and other current assets
|
$
|
837
|
$
|
796
|
June
30,
|
||||||||
2009
(unaudited)
|
December
31,
2008
|
|||||||
Line
of credit
|
$
|
232
|
$
|
1,631
|
||||
Other
debt
|
—
|
60
|
||||||
Total
debt
|
$
|
232
|
$
|
1,691
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Cost
of revenue
|
$
|
62
|
$
|
23
|
$
|
86
|
$
|
75
|
||||||||
Research
and development
|
68
|
52
|
126
|
134
|
||||||||||||
Selling,
general and administrative
|
262
|
176
|
333
|
398
|
||||||||||||
Total
stock compensation expense
|
$
|
392
|
$
|
251
|
$
|
545
|
$
|
607
|
For
the Six Months Ended June 30,
|
||||||||
2009
|
2008
|
|||||||
Dividend
yield
|
0
|
%
|
0
|
%
|
||||
Risk
free interest rates
|
1.46
to 2.15
|
%
|
2.46
to 3.28
|
%
|
||||
Expected volatility
|
79.4
to 87.0
|
%
|
89.6
to 92.3
|
%
|
||||
Expected
term (in years)
|
3.5
to 5
|
5
|
Number
of Shares
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contractual Life (In Years)
|
Aggregate
Intrinsic Value
|
|||||||||||||
Outstanding
at January 1, 2009
|
1,615,673
|
$
|
1.63
|
|||||||||||||
Options
granted
|
867,241
|
0.97
|
||||||||||||||
Options
exercised
|
—
|
|||||||||||||||
Options
forfeited
|
(71,598
|
)
|
2.60
|
|||||||||||||
Options
cancelled
|
—
|
|||||||||||||||
Outstanding
at June 30, 2009
|
2,411,316
|
$
|
1.36
|
6.08
|
$
|
327,027
|
||||||||||
Vested
or expected to vest at June 30, 2009 (1)
|
2,342,242
|
$
|
1.31
|
1.54
|
$
|
253,125
|
||||||||||
Exercisable
at June 30, 2009
|
1,720,569
|
$
|
1.43
|
6.49
|
$
|
253,125
|
Options
Outstanding
|
Options
Exercisable
|
||||||||||||||||||||||
Number
Outstanding
|
Weighted
Average Remaining Contractual Life (In Years)
|
Weighted
Average Exercise Price
|
Number
Exercisable
|
Weighted
Average Exercisable Price
|
|||||||||||||||||||
$
|
0.34
- $0.98
|
1,226,793
|
6.81
|
$
|
0.83
|
894,407
|
$
|
0.81
|
|||||||||||||||
$
|
1.00
- $1.44
|
788,577
|
6.51
|
1.23
|
495,270
|
1.32
|
|||||||||||||||||
$
|
2.60
- $2.70
|
358,746
|
3.00
|
2.62
|
298,392
|
2.61
|
|||||||||||||||||
$
|
3.50
- $5.80
|
8,000
|
3.06
|
5.51
|
8,000
|
5.51
|
|||||||||||||||||
$
|
6.60
- $22.50
|
29,200
|
2.07
|
10.91
|
24,500
|
10.90
|
|||||||||||||||||
2,411,316
|
6.08
|
$
|
1.36
|
1,720,569
|
$
|
1.43
|
SEC
Registration fee
|
$
|
113
|
||
Accounting
fees and expenses
|
25,000
|
*
|
||
Legal
fees and expenses
|
65,000
|
*
|
||
Miscellaneous
|
35,000
|
|||
TOTAL
|
$
|
125,113
|
*
|
·
|
The
due date for the outstanding Notes (totaling after conversions an
aggregate of $6,020,000) has been extended to December 21,
2008;
|
·
|
The
Amended Notes are convertible into (i) 8,407,612 shares of the Company’s
common stock. The conversion price for $5,770,000 of principal was revised
from $2.60 to $0.75 per share. The conversion price of $0.35 per share for
$250,000 of principal was unchanged;
|
·
|
$3,010,000
of the Amended Notes can convert into (ii) 3,010 shares of the Company’s
newly formed Series A Convertible Preferred Stock (the “Preferred”) at a
conversion price of $1,000 per share. The Preferred is convertible into
common stock at the same price allowable by the Amended Notes,
subject to adjustment as provided for in the Certificate of
Designations;
|
·
|
Except
for the Stillwater Note (as defined below), the Amendment
Agreements adjusted the exercise price of the Amended Warrants
from $3.60 to $1.03 per share for 1,553,468 shares of common stock
and require the issuance of warrants exerciseable for an
additional 3,831,859 shares of common stock exercisable at $1.03 per
share pursuant to which the Holders may acquire common stock, until July
21, 2011; and
|
·
|
As
of July 23, 2007 the interest rate was raised from 6% to
8%.
|
Exhibit
Number
|
Description
|
||
2.1
|
Agreement
and Plan of Merger between Fashion Dynamics Corp., FED Capital Acquisition
Corporation and FED Corporation dated March 13, 2000 (incorporated by
reference to exhibit 2.1 to the Registrant's Current Report on Form 8-K/A
filed on March 17, 2000).
|
||
3.1
|
Amended
and Restated Articles of Incorporation (incorporated by reference to
exhibit 99.2 to the Registrant's Definitive Proxy Statement filed on June
14, 2001).
|
||
3.2
|
Amended
Articles of Incorporation (incorporated by reference to exhibit A to the
Registrant's Definitive Proxy Statement filed on June 13,
2003).
|
||
3.3
|
Bylaws
of the Registrant (incorporated by reference to exhibit 99.3 to the
Registrant's Definitive Proxy Statement filed on June 14,
2001).
|
||
3.4
|
Certificate
of Designations of Series B Convertible Preferred Stock (incorporated by
reference to Exhibit 4.2 of the Registrant’s current report on Form 8-K
filed on December 23, 2008).
|
||
4.1
|
Form
of Warrant dated as of April 25, 2003 (incorporated by reference to
exhibit 4.3 to the Registrant's Current Report on Form 8-K filed on April
28, 2003).
|
||
4.2
|
Form
of Series A Common Stock Purchase Warrant dated as of January 9, 2004
(incorporated by reference to exhibit 4.1 to the Registrant's Current
Report on Form 8-K filed on January 9, 2004).
|
||
4.3
|
Form
of Series B Common Stock Purchase Warrant dated as of January 9, 2004
(incorporated by reference to exhibit 4.2 to the Registrant’s Current
Report on Form 8-K filed on January 9, 2004).
|
||
4.4
|
Form
of Series C Common Stock Purchase Warrant dated as of January 9, 2004
(incorporated by reference to exhibit 4.3 to the Registrant's Current
Report on Form 8-K filed on January 9, 2004).
|
||
4.5
|
Form
of Series D Warrant (incorporated by reference to exhibit 4.1 to the
Registrant's current report on Form 8-K filed on March 4,
2004).
|
||
4.6
|
Form
of Series E Warrant (incorporated by reference to exhibit 4.2 to the
Registrant's current report on Form 8-K filed on March 4,
2004).
|
||
4.7
|
Form
of Common Stock Purchase Warrant (incorporated by reference to exhibit 4.1
to the Registrant's current report on Form 8-K filed on August 26,
2008).
|
||
4.8
|
Form
of Amended and Restated Secured Revolving Loan Note (incorporated by
reference to exhibit 4.2 to the Registrant's current report on Form 8-K
filed on August 26, 2008).
|
||
4.9
|
Form
of Series F Warrant (incorporated by reference to exhibit 4.1 to the
Registrant's current report on Form 8-K filed on October 26,
2004).
|
||
4.10
|
Form
of Common Stock Purchase Warrant dated October 20, 2005, filed October 31,
2005, as filed in the Registrant's Form 8-K incorporated herein by
reference.
|
||
4.11
|
Form
of Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1
to the Registrant’s current report on Form 8-K filed on December 23,
2008).
|
||
5.1
|
Consent
of Sichenzia Ross Friedman Ference LLP (filed herewith).
|
10.1
|
2000
Stock Option Plan, (incorporated by reference to Annex A to Exhibit 99.1
to the Registrant's Registration Statement on Form S-8 filed on March 14,
2000).*
|
||
10.2
|
Form
of Agreement for Stock Option Grant pursuant to 2003 Stock Option Plan
(incorporated by reference to exhibit 99.2 to the Registrant's
Registration Statement on Form S-8 filed on March 14,
2000).*
|
||
10.3
|
Nonexclusive
Field of Use License Agreement relating to OLED Technology for miniature,
high resolution displays between the Eastman Kodak Company and FED
Corporation dated March 29, 1999 (incorporated by reference to exhibit
10.6 to the Registrant's Annual Report on Form 10-K/A for the year ended
December 31, 2000 filed on April 30, 2001).
|
||
10.4
|
Amendment
Number 1 to the Nonexclusive Field of Use License Agreement relating to
the LED Technology for miniature, high resolution displays between the
Eastman Kodak Company and FED Corporation dated March 16, 2000
(incorporated by reference to exhibit 10.7 to the Registrant's Annual
Report on Form 10-K/A for the year ended December 31, 2000 filed on April
30, 2001).
|
||
10.5
|
Lease
between International Business Machines Corporation and FED Corporation
dated May 28, 1999 (incorporated by reference to exhibit 10.9 to the
Registrant's Annual Report on Form 10-K for the year ended December 31,
2000 filed on March 30, 2001).
|
||
10.6
|
Amendment
Number 1 to the Lease between International Bushiness Machines Corporation
and FED Corporation dated July 9, 1999 (incorporated by reference to
exhibits 10.8 to the Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000 filed on March 30, 2001)
|
||
10.7
|
Amendment
Number 2 to the Lease between International Business Machines Corporation
and FED Corporation dated January 29, 2001 (incorporated by reference to
exhibit 10.11 to the Registrant’s Annual Report on Form 10-K for the year
ended December 31, 2000 filed on March 30, 2001).
|
||
10.8
|
Amendment
Number 3 to Lease between International Business Machines Corporation and
FED Corporation dated May 28, 2002 (incorporated by reference to the
Company’s Form S-1A as filed November 12, 2008).
|
||
10.9
|
Amendment
Number 4 to Lease between International Business Machines Corporation and
FED Corporation dated December 14, 2004 (incorporated by reference to the
Registrant’s Current Report on Form 8-K filed on December 20,
2004).
|
||
10.10
|
Securities
Purchase Agreement dated as of April 25, 2003 by and among eMagin and the
investors identified on the signature pages thereto, filed April 28, 2003,
as filed in the Registrant's Form 8-K incorporated herein by
reference.
|
||
10.11
|
Registration
Rights Agreement dated as of April 25, 2003 by and among eMagin and
certain initial investors identified on the signature pages thereto
(incorporated by reference to exhibit 10.3 to the Registrant's Current
Report on Form 8-K filed on April 28, 2003).
|
||
10.12
|
Securities
Purchase Agreement dated as of January 9, 2004 by and among eMagin and the
investors identified on the signature pages thereto (incorporated by
reference to exhibit 10.1 to the Registrant's Current Report on Form 8-K
filed on January 9, 2004).
|
||
10.13
|
Registration
Rights Agreement dated as of January 9, 2004 by and among eMagin and
certain initial investors identified on the signature pages thereto
(incorporated by reference to exhibit 10.2 to the Registrant's Current
Report on Form 8-K filed on January 9, 2004).
|
||
10.14
|
Master
Amendment Agreement dated as of February 17, 2004 by and among eMagin and
the investors identified on the signature pages thereto (incorporated by
reference to exhibit 10.1 to the Registrant's Current Report on Form 8-K
filed on March 4, 2004).
|
||
10.15
|
Registration Rights Agreement dated
as of February 17, 2004 by and among eMagin and certain initial
investors identified on the signature
pages thereto (incorporated by reference
to exhibit 10.2 to the Registrant's
Current Report on Form 8-K filed on March 4, 2004).
|
||
10.16
|
Letter
Agreement amending the Master Amendment Agreement
dated as of March 1, 2004 by
and among eMagin and
the parties to
the Master Amendment
Agreement (incorporated by reference to exhibit 10.3 to the
Registrant's Current Report on Form 8-K filed on March 4,
2004).
|
10.17
|
Lease
between International Business Machines Corporation and
FED Corporation dated May 28, 1999, as
filed in the Registrant's Form 10-K/A for the year
ended December 31, 2000 (incorporated by
reference to the Form 10-K filed on March 30,
2001).
|
||
10.18
|
Amendment Number 2 to the Lease between International Business
Machines Corporation and
FED Corporation dated January 29, 2001,
as filed in the Registrant's Form 10-K/A for the
year ended December 31, 2000 (incorporated by reference to Form
10-K filed March 30, 2001).
|
||
10.19
|
Secured
Note Purchase Agreement entered into as of November 27, 2001,
by and among eMagin Corporation and
certain investors named therein,
as filed in
the Registrant's Form 8-K dated December 18, 2001
(incorporated by reference to Form 8-K filed December 18,
2001).
|
||
10.20
|
2004
Non-Employee Compensation Plan, filed July 7, 2004, as filed in the
Registrant’s Form S-8, incorporated herein by reference.*
|
||
10.21
|
Form
of Letter Agreement by and among eMagin and the holders of the Class A,
Class B and Class C common stock purchase warrants, filed August 9, 2004 ,
as filed in the Registrant's Form 8-K incorporated herein by
reference.
|
||
10.22
|
Securities
Purchase Agreement dated as of October 21, 2004 by and among eMagin and
the purchasers listed on the signature pages thereto, filed October 26,
2004 as filed in the Registrant's Form 8-K incorporated herein by
reference.
|
||
10.23
|
Placement
Agency Agreement dated as of October 21, 2004 by and among eMagin and W.R.
Hambrecht & Co., LLC, filed October 26, 2004, as filed in the
Registrant's Form 8-K incorporated herein by reference.
|
||
10.24
|
Agreement,
dated as of June 29, 2004, by and between eMagin and Larkspur Capital
Corporation, filed October 26, 2004, as filed in the Registrant's Form 8-K
incorporated herein by reference.
|
||
10.25
|
Sublease
Agreement dated as of July 14, 2005 by and between eMagin and
Cap Gemini U.S., LLC, filed August 2, 2005, as filed in the
Registrant's Form 8-K incorporated herein by reference.
|
||
10.26
|
Amended
and Restated 2003 Stock Option Plan, filed September 1, 2005, as filed in
the Registrant’s Definitive Proxy Statement, incorporated herein by
reference.*
|
||
10.27
|
Amended
and Restated 2004 Non-Employee Compensation Plan, filed September 1, 2005,
as filed in the Registrant’s Definitive Proxy Statement, incorporated
herein by reference.*
|
||
10.28
|
2005
Employee Stock Purchase Plan, filed September 1, 2005, as filed in the
Registrant’s Definitive Proxy Statement, incorporated herein by
reference.*
|
||
10.29
|
Securities
Purchase Agreement dated as of October 20, 2005, by and among eMagin and
the purchasers listed on the signature pages thereto, filed October 31,
2005, as filed in the Registrant's Form 8-K incorporated herein by
reference.
|
||
10.30
|
Registration
Rights Agreement dated as of October 20, 2005, by and among eMagin and the
purchasers listed on the signature pages thereto, filed October 31, 2005,
as filed in the Registrant's Form 8-K incorporated herein by
reference.
|
||
10.31
|
Employment
Agreement effective as of January 1, 2006 by and between eMagin and Gary
Jones, filed January 27, 2006, as filed in the Registrant's Form 8-K
incorporated herein by reference.
|
||
10.32
|
Employment
Agreement effective as of January 1, 2006 by and between eMagin and Susan
Jones, filed January 27, 2006, as filed in the Registrant's Form 8-K
incorporated herein by reference.
|
||
10.33
|
Amendment
to Employment Agreement as of April 17, 2006 by and between eMagin and
Gary Jones.
|
||
10.34
|
Amendment
to Employment Agreement as of April 17, 2006 by and between eMagin and
Susan Jones.
|
10.35
|
Form
of Note Purchase Agreement dated July 21, 2006, by and among the Company
and the investors named on the signature pages thereto, (incorporated by
reference to the Company’s Form S-1A as filed November 12,
2008).
|
||
10.36
|
Form
of Note Purchase Agreement dated July 21, 2006, by and between the Company
and Stillwater LLC, (incorporated by reference to the Company’s Form S-1A
as filed November 12, 2008).
|
||
10.37
|
2004
Amended and Restated Non-Employee Compensation Plan, filed September 21,
2006, as filed in the Registrant's Definitive Proxy Statement incorporated
herein by reference.*
|
||
10.38
|
Executive
Separation and Consulting Agreement dated as of January 11, 2007 by and
between eMagin Corporation and Gary W. Jones, filed January 19, 2007, as
filed in the Registrant's Form 8-K/A incorporated herein by
reference.
|
||
10.39
|
Letter
Agreement dated as of February 12, 2007 by and between eMagin Corporation
and Dr. K.C. Park, filed February 16, 2007, as filed in the Registrant's
Form 8-K incorporated herein by reference.
|
||
10.40
|
Allonge
to the 6% Senior Secured Convertible Notes Due 2007-2008 of eMagin
Corporation dated as of March 9, 2007, filed March 13, 2007, as filed in
the Registrant's Form 8-K incorporated herein by
reference.
|
||
10.41
|
First
Amendment to Note Purchase Agreement as of March 28, 2007 by and between
eMagin Corporation and Stillwater LLC, as filed in the Registrant's
Form 8-K dated April 26, 2007 incorporated herein by
reference.
|
||
10.42
|
Note
Purchase Agreement as of April 9, 2007 by and between eMagin
Corporation and Stillwater LLC, as filed in the Registrant's Form 8-K
dated April 25, 2007 (incorporated by reference to the Company’s Form S-1A
as filed November 12, 2008).
|
||
10.43
|
6%
Senior Secured Convertible Note, dated April 9, 2007, by and between the
Company and Stillwater LLC, incorporated by reference to the Company’s
Form 8-K as filed on April 26, 2007.
|
||
10.44
|
Common
Stock Purchase Warrant, dated April 9, 2007, by and between the Company
and Stillwater LLC, incorporated by reference to the Company’s Form 8-K as
filed on April 26, 2007.
|
||
10.45
|
Employment
Agreement between the Company and Tatum, LLC, dated December 26, 2007,
incorporated by reference to the Company’s Form 8-K as filed on January 3,
2008.
|
||
10.46
|
Form
of Common Stock Purchase Warrant, incorporated by reference to the
Company’s Form 8-K/A as filed on February 8, 2008.
|
||
10.47
|
Amendment
No. 1 to Loan and Security Agreement, dated as of January 30, 2008, to the
Loan and Security Agreement, dated August 7, 2007, incorporated by
reference to the Company’s Form 8-K/A as filed February 8,
2008.
|
||
10.48
|
Warrant
Issuance Agreement, dated January 30, 2008, incorporated by reference to
the Company’s Form 8-K/A as filed February 8, 2008.
|
||
10.49
|
Form
of Common Stock Purchase Warrant, incorporated by reference to the
Company’s Form 8-K, as filed on March 31, 2008.
|
||
10.50
|
Amendment
No. 2 to Loan and Security Agreement, dated as of March 25, 2008 to the
Loan and Security Agreement, dated August 7, 2007, as amended on January
30, 2008, incorporated by reference to the Company’s Form 8-K, as filed
March 31, 2008.
|
||
10.51
|
Amendment
No. 1 to Warrant Issuance Agreement, dated as of March 25, 2008, as
amended on January 30, 2008, incorporated by reference to the Company’s
Form 8-K, as filed March 31, 2008.
|
||
10.52
|
Form of Common Stock Purchase
Warrant, incorporated by reference to the Company’s Form 8-K, as filed on
April 4, 2008.
|
||
10.53
|
Securities
Purchase Agreement, dated as of April 2, 2008, incorporated by reference
to the Company’s Form 8-K, as filed April 4, 2008 (incorporated by
reference to the Company’s Form S-1A as filed November 12,
2008).
|
10.54
|
Registration
Rights Agreement, dated as of April 2, 2008, incorporated by reference to
the Company’s Form 8-K, as filed April 4, 2008.
|
||
10.55
|
Agreement
between the Company and Tatum, LLC, incorporated by reference to the
Company’s Form 8-K, filed April 18, 2008.
|
||
10.56
|
Employment
Agreement effective as of June 1, 2008 by and between eMagin and Andrew
Sculley, incorporated by reference to the Company’s Form 8-K/A as filed
August 19, 2008.
|
||
10.57
|
Amendment
No. 3 to Loan and Security Agreement, dated as of August 20,
2008 to the Loan and Security Agreement, dated August 7, 2007,
incorporated by reference to the Company’s Form 8-K, as filed August 26,
2008.
|
||
10.58
|
Warrant
Issuance Agreement No. 2, dated August 20, 2008, incorporated by reference
to the Company’s Form 8-K as filed August 26, 2008.
|
||
10.59
|
Amended
and restated Securities Issuance Agreement, dated as of August 20, 2008,
incorporated by reference to the Company’s Form 8-K, as filed August 26,
2008.
|
||
10.60
|
Amendment,
dated August 20, 2008, to Registration Rights Agreement, dated as of
August 7, 2007, incorporated by reference to the Company’s Form 8-K, as
filed August 26, 2008.
|
||
10.61
|
Loan
and Security Agreement between Moriah Capital, L.P. and eMagin
Corporation, dated as of August 7, 2007, (filed
herewith)**
|
||
10.62
|
Amendment
Agreement, dated as of July 23, 2007, incorporated by reference to the
Company’s Form 8-K as filed on July 25, 2007.
|
||
10.63
|
Form
of Amended and Restated 8% Senior Secured Convertible Note due 2008,
incorporated by reference to the Company’s Form 8-K as filed on July 25,
2007.
|
||
10.64
|
Form
of Amended and Restated Common Stock Purchase Warrant, incorporated by
reference to the Company’s Form 8-K as filed on July 25,
2007.
|
||
10.65
|
Form
of Amendment No. 1 to Patent and Security Agreement, , filed July 25,
2007, Incorporated by reference to the Company’s Form 8-K as filed on July
25, 2007.
|
||
10.66
|
Form
of Lockbox Agreement, filed July 25, 2007, incorporated by reference to
the Company’s Form 8-K as filed on July 25, 2007.
|
||
10.67
|
Securities
Purchase Agreement, dated December 18, 2008 (incorporated by reference to
exhibit 99.1 of the Registrant’s Current Report on Form 8-K filed on
December 22, 2008).
|
||
10.68
|
Registration
Rights Agreement, dated December 18, 2008 (incorporated by reference to
exhibit 99.2 of the Registrant’s Current Report on Form 8-K filed on
December 22, 2008).
|
||
10.69
|
Exchange
Agreement, dated December 18, 2008 (incorporated by reference to exhibit
99.3 of the Registrant’s Current Report on Form 8-K filed on December 22,
2008).
|
||
10.70
|
Employment
Agreement effective as of May 8, 2009 by and between eMagin and Paul
Campbell, incorporated by reference to the Company’s Form 8-K as filed May
14, 2009.
|
||
10.71
|
Amendment Number 6 to the lease between International Business Machines Corporation and eMagin Corporation dated May 27, 2009 (incorporated by reference to the Registrant’s Current Report on Form 8-k filed on June 19, 2009). | ||
10.72
|
Lease between Northrup Building LLC and eMagin dated May 28, 2009 (incorporated by reference to the Registrant’s Current Report on Form 8-k filed on June 19, 2009). | ||
23.1
|
Consent
of Sichenzia Ross Friedman Ference LLP (included in Exhibit
5.1).
|
||
23.2
|
Consent
of Independent Registered Public Accounting Firm (filed
herewith).
|
||
|
Year
Ended
|
Beginning
Balance
|
Charged
to Expenses
|
Amounts
Written Off
|
Ending
Balance
|
||||||||||||
(In
thousands)
|
||||||||||||||||
December
31, 2008
|
$
|
(358
|
)
|
$
|
509
|
$
|
10
|
$
|
(857
|
)
|
||||||
December
31, 2007
|
$
|
(443
|
)
|
$
|
—
|
$
|
85
|
$
|
(358
|
)
|
||||||
December
31, 2006
|
$
|
(487
|
)
|
$
|
—
|
$
|
44
|
$
|
(443
|
)
|
EMAGIN
CORP.
|
|
Date: November
9, 2009
|
By:
/s/ ANDREW
G. SCULLEY
|
Andrew
G. Sculley
|
|
Chief
Executive Officer and President
(Principal
Executive Officer)
|
|
Date: November
9, 2009
|
By:
/s/ PAUL
CAMPBELL
|
Paul
Campbell
|
|
Chief
Financial Officer
(Principal
Financial Officer and Principal Accounting
Officer)
|
Signature
|
Title
|
Date
|
||
/s/
Andrew G. Sculley
Andrew
G. Sculley
|
Chief
Executive Officer and President
(Principal
Executive Officer)
|
November
9, 2009
|
||
/s/
Paul Campbell
Paul
Campbell
|
Chief
Financial Officer
(Principal
Financial Officer and Principal Accounting Officer)
|
November
9, 2009
|
||
*
Thomas
Paulsen
|
Director
|
November
9, 2009
|
||
*
Claude
Charles
|
Director
|
November
9, 2009
|
||
*
Paul
Cronson
|
Director
|
November
9, 2009
|
||
*
Irwin
Engelman
|
Director
|
November
9, 2009
|
||
*
Dr.
Jacob E. Goldman
|
Director
|
November
9, 2009
|
||
*
Brig.
Gen. Stephen Seay
|
Director
|
November
9, 2009
|
||
/s/
Thomas
Paulsen
Thomas
Paulsen
Attorney-in-fact
|
November 9, 2009 | |||