New York | 3990 | 14-1760865 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
11552 Prosperous Drive Odessa, FL 33556 Telephone: (727) 375-8484 Facsimile: (727) 375-8485 | State of New York – Secretary of State Department of State One Commerce Plaza 99 Washington Avenue, 6th Floor Albany, New York 12231 Telephone: (518) 473-2492 Facsimile: (518) 474-1418 | |
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Principal Executive Offices) | (Name, Address, Including Zip Code and Telephone Number, Including Area Code, of Agent for Service) |
Large accelerated filer | o | Accelerated filer | o | |||
Non-accelerated filer | o (Do not check if a smaller reporting company) | Smaller reporting company | x |
Title of Each Class of Securities to be Registered | Amount to be Registered | Proposed Maximum Aggregate Offering Price(1) | Amount of Registration Fee(6) | |||||||||
Common stock, $0.01 par value per share(2) | 4,312,500 | $ | 21,562,500 | $ | 2,503.41 | |||||||
Underwriter Warrant(3)(4)(5) | 1 warrant | $ | 100 | — | ||||||||
Shares of Common Stock underlying Underwriter’s Warrant | 431,250 | $ | 2,587,500 | $ | 300.41 | |||||||
Amount Paid | $ | 2,753.75 | ||||||||||
Balance Due | $ | 50.07 |
Title of Each Class of Securities to be Registered | Amount to be Registered | Proposed Maximum Aggregate Offering Price(1) | Amount of Registration Fee(6) |
Common stock, $0.01 par value per share(2) | 4,312,500 | $21,562,500 | $2,503.41 |
Underwriter Warrant(3)(4)(5) | 1 warrant | $100 | — |
Shares of Common Stock underlying Underwriter’s Warrant | 431,250 | $2,156,250 | $250.34 |
Amount Paid | $2,203.00 | ||
Balance Due | $550.75 |
(1) | Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended. |
(2) | Includes 562,500 shares of our common stock that the underwriter has the option to purchase to cover over-allotments, if any. |
(3) | No registration fee required pursuant to Rule 457(g) under the Securities Act of 1933. |
(4) | Pursuant to Rule 416 under the Securities Act of 1933, this registration statement shall be deemed to cover the additional securities (i) to be offered or issued in connection with any provision of any securities purported to be registered hereby to be offered pursuant to terms which provide for a change in the amount of securities being offered or issued to prevent dilution resulting from stock splits, stock dividends, or similar transactions and (ii) of the same class as the securities covered by this registration statement issued or issuable prior to completion of the distribution of the securities covered by this registration statement as a result of a split of, or a stock dividend on, the registered securities. |
(5) | Represents a warrant granted to the underwriter to purchase up to 431,250 shares of common stock. |
(6) | Previously paid |
Per Share | Total | |||||||
Public Offering Price per share | $ | $ | ||||||
Underwriting discounts and commission (1) | $ | $ | ||||||
Offering Proceeds to Dais, before | $ | $ |
(1) | Excludes underwriter expenses of up to $125,000 which would be |
(2) | We estimate that the total expenses of this offering, excluding the underwriter’s discount and commission will be approximately $ . |
Page No. | ||||
Determination of Offering Price | ||||
Director Compensation | ||||
Dilution | ||||
Capitalization | ||||
PROSPECTUS SUMMARY This summary highlights selected information contained elsewhere in this prospectus and does not contain all the information that you need to consider in making your investment decision. You should carefully read this entire prospectus before deciding whether to invest in the common stock. You should pay special attention to the “Risk Factors” section of this prospectus to determine whether an investment in the common stock is appropriate for you. This registration statement, including the exhibits and schedules thereto, contains additional relevant information about us and our capital stock. We file annual, quarterly, and current reports, proxy statements, and other information with the SEC. You may read and copy any document we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. You can also request copies of the documents, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. These SEC filings are also available to the public from the SEC’s web site at www.sec.gov. Unless otherwise indicated, all share amounts and prices assume the consummation of the anticipated 10-for-1 reverse stock split to be effected immediately following the effectiveness of the registration statement of which this prospectus is a part. About Dais Analytic Corporation We have developed and are commercializing specialty nano-structured polymer materials (Aqualyte™). Using Aqualyte ™ materials we are creating value added products which are designed to: (i) improve the energy efficiency in Heating, Ventilation and Air Conditioning (HVAC) equipment, (ii) replace the chemical refrigerants used in today’s HVAC systems as well as most all forms of refrigeration systems; (iii) remove impurities in contaminated water (such as waste water and seawater); and (iv) allow the storage of electrical energy in a device called an “ultracapacitor.” Dais’ first commercial product, ConsERV™, is a fixed plate energy recovery ventilator unit that attaches to most all forms of HVAC equipment. Through use of the Aqualyte™ materials, ConsERV™ assists building and home-owners to increase ventilation thereby improving indoor air quality while saving energy, lowering CO2 emissions, and allowing for smaller HVAC systems to be installed through the management of moisture and temperature content in the air. Several applications that use the Aqualyte™ platform are under development. These potential applications include: | |
● | NanoAir™, a water based packaged HVAC system that is potentially capable of achieving improvements in energy efficiency over traditional AC and refrigeration systems, |
● | NanoClear™, a water clean-up process that has been demonstrated to provide parts per billion potable water from most forms of contaminated water, including salt, brackish or wastewater1, and |
● | NanoCap™, an energy storage device (ultracapacitor) we are currently researching and developing that uses the attributes of the Aqualyte™ material to potentially provide significantly greater energy density and power than conventional capacitors or batteries. |
We are a New York corporation established on April 8, 1993 as Dais Corporation. We subsequently changed our name to Dais Analytic Corporation on December 13, 1999. Our principal executive offices are located at 11552 Prosperous Drive, Odessa, FL 33556. Our telephone number is (727) 375-8484. Our website can be accessed at www.daisanalytic.com and www.conserv.com. Information contained in our website is not a part of this prospectus and the inclusion of our website address in this prospectus is an inactive textual reference only. Our Proprietary Technologies We have multiple pending and issued patents in the U.S., China, Hong Kong and Europe, and under the Patent Cooperation Treaty (PCT). In addition, we co-own two PCT applications with Aegis Biosciences LLC, a biomaterials drug delivery technology company. These patents relate to, or are applications of, our nano-structured polymer materials that perform functions such as ion exchange and modification of surface properties. The polymers are selectively permeable to polar materials, such as water, in molecular form. Selective permeability allows these materials to function as a nano-filter in various transfer applications. These materials are made from base polymer resins available from commercial firms worldwide and possess what we believe to be some unique and controllable properties, such as: | |
● | Selectivity: Based on our research, we believe that when the polymer is made there are small channels created that are 5 to 30 nanometers in diameter. There are two types of these channels: hydrophilic (water permeable), and hydrophobic (water impermeable). The channels can be chemically tuned to be selective for the ions or molecules they transfer. The selectivity of the polymer can be adjusted to efficiently transfer water molecules from one face to the other using these channels. |
Testing performed by the Pasco County Water District |
● | High transfer rate: Based on in-house testing protocols and related results, we have found that the channels created when casting the materials into a nano-structured membrane have a transfer rate of water molecules, or flux, greater than 90% of an equivalent area of an open tube. This feature is fundamental to the material’s ability to transfer moisture at the molecular level while substantially allowing or disallowing the transfer of certain other substances at a molecular level. |
● | Unique surface characteristics: The materials offer a surface characteristics that we believe inhibit the growth of bacteria, fungus and algae and prevent adhesives from attaching. |
The molecular selectivity, transfer rate and surface coating properties, coupled with our ability to produce the nano-structured materials at what we believe is an affordable price, distinguishes our technology and value-added products. By incorporating our nano-structured materials into our products, we strive to address current real-world market needs by offering what we believe to be higher efficiencies and improved price performance, compared to, for example, other energy recovery mechanisms available for HVAC that use coated paper or desiccant materials instead of our nano-structured polymer materials. For further details about our technology, please refer to our “Description of Business” in this prospectus. Our Target Markets We are currently focusing our efforts on applications of our nano-structure polymer technology materials in the following areas: Energy Recovery Ventilators ConsERV™ is a heating, ventilation and air conditioning (HVAC) energy conservation product which after reviewing the results of various third party tests, we believe will save an average of up to 30% on HVAC ventilation air operating costs and allow HVAC equipment to be up to 30% smaller, reducing peak energy usage by up to 20% while simultaneously improving indoor air quality by increasing the level of fresh air ventilation. This product makes HVAC systems operate more efficiently, and |
We believe that there is significant demand for energy recovery ventilators in the U.S. and international markets. As reported by Frost and Sullivan in 2007, the North American market for energy recovery ventilators (ERVs) was estimated to be approximately $1.1 billion. Projections made at that time were for 200% growth from that level by 2012. Market drivers behind this growth include higher ventilation standards, greater end user awareness, LEED (Leadership in Energy Efficiency and Design) certification points or incentives , and integration into the products of original equipment manufacturers (OEMs). Sales of ConsERV ™ in 2010 increased to $2,949,814 from $1,439,041 in 2009. We believe the combination of high efficiency and low maintenance requirement as well as rapid ERV market expansion is driving this sales growth. Our ConsERV™ product is the primary focus of our resources and commercialization efforts. When compared to similar competitive products and based on test results conducted by the Air-Conditioning, Heating and Refrigeration Institute (AHRI), a leading industry association in 2008, we believe ConsERV™ is twice as effective in managing a combination of latent and sensible heat as other fixed plate cores. This study is publicly available and was not prepared for our benefit or funded by us. Residential and Commercial Heating, Air-Conditioning and Refrigeration Our water-based packaged HVAC system, NanoAir™, which is in the early beta stage of development, dehumidifies and cools air in warm weather, or humidifies and heats air in cold weather. NanoAir™ may be capable of replacing a traditional refrigerant loop-based heating, cooling, and refrigeration system. We have a number of small prototype units showing fundamental heating, cooling, humidification, and dehumidification operations of this evolving application. Based on our lab results to date, NanoAir™ may have the potential to reduce energy consumption by up to 50%, and is projected to be up to 3 times more energy efficient than current refrigerant gas-based technologies on the market today. Since heating and cooling costs account for approximately 19% of all energy consumed in the U.S. (second only to transportation), as stated by Dr. Steven Chu of the U.S. Department of Energy in 2010, we believe NanoAir™ may have the ability to provide significant energy savings . Further, since NanoAir™ uses no ozone-depleting refrigerants such as CFCs and HCFCs, the use of our nano-structured polymer technology may provide additional environmental and health benefits. We believe that there is a substantial market for HVAC systems that conserve energy without the use of conventional refrigerants. |
*projected Projected NanoAir ™ Benefit Comparison NanoAir™ is being partially funded by a $681,322 grant from the U.S. Department of Energy’s Advanced Research Projects Agency – Energy (ARPA-E) awarded to us in September of 2010, and a $254,500 grant from Pasco County, Florida in December of 2010. The grant from Pasco County requires us to pay the county 2% of the gross sales of products using a certain unique pump assembly for 5 years , or a total of $1,000,000 whichever occurs first. |
Water Clean-Up According to water quality evaluated by the Pasco County Technical Services in March 2010, and the China Academy of Environmental Science in December 2010, our NanoClear™ prototype system has demonstrated the ability to remove salt and other impurities from water to produce potable water using what we believe is an environmentally friendly design projected to be more energy efficient, reduce capital costs, and lower operating expenditures up to 50% over the market leading technology in use today (Reverse Osmosis). We have developed a number of functional demonstration units of various sizes, which highlight the basics of how this system works to produce potable water. These demonstration units are being used as the basis for the application’s next planned inflection point: the construction and operation of a 10 cubic meter (approximately 26,500 gallons per day) pilot plant to be located near our office outside of Tampa, Florida at a Pasco County off-line waste water treatment facility where the local municipal government has granted Dais permission to construct and operate the pilot NanoClear™ facility. The NanoClear™ application is currently in the early stages of beta development. We believe significant market opportunities for the NanoClear™ process exist in water cleanup including waste water (e.g. pharmaceutical, electronics, and other industrial uses as well as municipal applications), water desalination (salt and brackish water clean-up), and an array of consumer applications. Unlike other water desalination technologies, we believe the NanoClear ™ process may have the ability to handle high concentrations of salt with no lasting damage to the base membrane materials. The benefit of such a technological advancement in the water desalination industry may mean higher outputs of clean water per volume of contaminated water, and we believe the ability to produce a near zero discharge of contaminants from the process. The world market for water and wastewater amounted to $346.9 billion in 2008. According to 360 Consultancy/Acon AG, World-Wide water market profile dated May 2009, the market is expected to expand further with high growth rates to $374.4 billion by 2009, and $412 billion by 2010. The Central Government of China, on January 30, 2011 announced a $608 billion government-mandated program citing that it is a ‘national priority’ for China to improve water conservation in the next decade. As a part of this initiative the Chinese government also said that it would increase its efforts to improve water quality and irrigation, and that it aims to eradicate the problem of unsafe drinking water in rural areas by 2015. Further, based on our projections, we believe certain facility and mechanical layouts of the NanoClear™ process for water clean-up may be able to accomplish 90-95% water capture vs. 40-60% for traditional Reverse Osmosis (RO) systems clean water using NanoClear™ has a projected energy/water cost of $0.25 to $0.33 per cubic meters, (desalination) vs. $0.50-$1 per cubic meters for Reverse Osmosis. 2 Energy Storage Based on initial material tests conducted by General Electric’s Global Research and Development Center in 2008, and the University of Florida in 2010 and 2011, we believe that by applying a combination of our nano-material in a process which exercises key attributes of the material’s properties, we may be able to construct an energy storage device akin to an ultracapacitor. An ultracapacitor is a device which stores energy similar to a battery but in this case with projected increases in energy density and lifetimes. We call this application NanoCap™. We believe the key application for NanoCap™ would be in transportation. We signed a research agreement with the University of Florida to conduct materials testing for the time period from July 2010 through September 2011. Although very early in the development path, preliminary results obtained in research by both GE and the University of Florida suggest that a NanoCap™ ultracapacitor, if fully developed, may possess an energy density comparable to that of gasoline. |
The market size for ultracapacitors, worldwide, is projected to be $500 million by 2012 as estimated by Greentech Media in January 2010 and includes electric vehicles, various electronics, smart grid and other applications. Other We have identified other potential products for our nano-materials and processes. Some have basic data to support additional functionality and market differentiation of a product based on our nano-technology inventions. These other products are based, in part, upon the known functionality of our materials and processes. Management anticipates that many of these other applications will be developed in the future with partners already in a given sales channel or line of business with us, as we grow and are able to internally fund such activities, development, manufacturing, and sales. We expect ConsERV™ to continue to be the focus of our commercial product sales through 2011 with a growing emphasis on moving the development of the NanoClear™ and NanoAir™ technologies towards commercialization. However, we cannot provide assurance that any of the ongoing projects under development will ultimately be successful or commercially viable. Proposed Reverse Stock Split and Conversion of Debt Immediately following the effectiveness of the registration statement which this prospectus is a part of, and prior to closing of this offering , we will effect a 10-for-1 reverse stock split. In connection with the closing of this offering, we intend to have all convertible notes outstanding in the aggregate principal amount of $2,500,000 plus accrued interest, discharged by conversion or repayment using proceeds from the offering. As of September 12 , 2011 we estimate that approximately $1. 51 million of net proceeds from the offering will be used to repay convertible notes, and that approximately 474,200 shares of common stock will be issued in the conversion of notes. We have entered into an agreement with our CEO, Tim Tangredi, that provides that upon closing of the offering Mr. Tangredi’s accrued compensation through the closing date in the approximate amount of $1.05 million shall be paid with a combination of (a) cash, which we estimate at this time to be approximately $380,000, which is intended to cover payment of income and other taxes due from the payment of such accrued compensation, and (b) shares of restricted common stock at a price equal to the price per share paid by investors in the public offering, for the remainder (which is assumed for purposes of this calculation to be $4.00 per share after giving effect to the anticipated 10-for-1 reverse stock split, and based on this assumption would consist of approximately 166, 971 shares of common stock). In addition, net proceeds from the offering will be used to pay approximately $358,000 in accrued compensation to two employees, Patricia Tangredi and David Longacre. For additional details regarding the above, see “Use of Proceeds” below in this prospectus. Risk Factors An investment in our common stock involves a high degree of risk. You should carefully consider the risks described under “Risk Factors” beginning on page 1 5 of this prospectus, as well as other information included in this prospectus, including our financial statements and the notes thereto, before making an investment decision. |
The Offering The following summary contains basic information about the offering and our common stock and is not intended to be complete. It does not contain all the information that is important to you. For a more complete understanding of our common stock, please refer to the section of this prospectus entitled “Description of Capital Stock.” | |||
Issuer | Dais Analytic Corporation, a New York corporation. | ||
Common stock offered by us | 3,750,000 shares of common stock, par value $0.01 per share. (1) | ||
Over-allotment option | We have granted the underwriter an option to purchase up to an additional 562,500 shares of common stock within 45 days of the date of this prospectus in order to cover over-allotments, if any. | ||
Common Stock outstanding before this offering | |||
Common stock outstanding after this offering | |||
Use of Proceeds | We intend to use the net proceeds from the sale of our common stock in this offering for working capital, to pay certain outstanding note obligations, to pay accrued salaries, and for general corporate purposes. For additional details concerning the use of proceeds see the section below in the prospectus titled “Use of Proceeds.” | ||
Market and trading symbol for the common stock | Our common stock is quoted on the Over-the-Counter Bulletin Board under the symbol “DLYT,” and we have applied to list on AMEX. | ||
Proposed AMEX listing symbol for our common stock | “DLYT” | ||
Underwriter common stock purchase warrant | In connection with this offering, we have also agreed to |
Lockup Agreements | We intend to have each of our officers and directors agree that for a period of 180 days from the date of the underwriting agreement, they will be subject to a lock up prohibiting any sales, transfers or hedging transactions in our securities that are held by them. See section titled “Lockup Agreements” in this prospectus. |
(1) | We have, for purposes of disclosure in this prospectus, assumed consummation of a 10-for-1 reverse stock split | ||||
(2) | The number of shares of our common stock outstanding before and after this offering is based on the number of shares outstanding as of | ||||
• | |||||
• | 2,782,533 s hares of our common stock reserved for issuance under various outstanding warrant agreements , | ||||
• | Shares of our common stock issuable upon conversion of our convertible promissory notes in the aggregate principal amount of $2,500,000 plus accrued interest as of the closing date of the offering, which (as of | ||||
• | 950,500 s hares of our common stock reserved for future issuance under our stock plans; and , | ||||
• | Shares of our common stock issuable upon conversion of a portion of the accrued salary of our CEO to common stock; as of September 12 , 2011 the CEO’s total accrued unpaid compensation was $1,047,884, which would be converted at the closing date of the offering into approximately 166, 971 shares of common stock |
Unless otherwise specifically stated, information throughout this prospectus assumes that none of our outstanding options or warrants to purchase shares of our common stock have been exercised, and that none of our convertible securities have been converted. | ||||
(3) | Unless otherwise indicated, the number of shares of common stock presented in this prospectus excludes shares issuable pursuant to the exercise of the underwriter’s over-allotment option and underwriter’s warrant. |
For the Years Ended December 31, | For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | For the Three Months Ended March 31, | 2010 | 2009 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||||||||||||||
2010 | 2009 as restated | 2011 | 2010 as restated | as restated | as restated | |||||||||||||||||||||||||||||||||||
STATEMENT OF OPERATIONS: | ||||||||||||||||||||||||||||||||||||||||
Revenues | $ | 3,342,468 | $ | 1,531,215 | $ | 858,694 | $ | 407,312 | $ | 3,342,468 | $ | 1,531,215 | $ | 1,124,079 | $ | 1,010,142 | $ | 1,982,773 | $ | 1,417,454 | ||||||||||||||||||||
Cost of goods sold | (2,290,041 | ) | (1,071,098 | ) | (700,890 | ) | (321,326 | ) | (2,290,041 | ) | (1,071,098 | ) | (806,674 | ) | (550,196 | ) | (1,507,564 | ) | (871,522 | ) | ||||||||||||||||||||
Operating expenses | (2,931,274 | ) | (3,224,592 | ) | (924,333 | ) | (559,520 | ) | (2,931,274 | ) | (3,224,592 | ) | (803,725 | ) | (1,029,394 | ) | (1,728,058 | ) | (1,588,914 | ) | ||||||||||||||||||||
Loss from operations | (1,878,847 | ) | (2,764,475 | ) | (766,529 | ) | (473,534 | ) | (1,878,847 | ) | (2,764,475 | ) | (486,320 | ) | (569,448 | ) | (1,252,849 | ) | (1,042,982 | ) | ||||||||||||||||||||
Change in fair value of warrant liability | 618,801 | (3,731,694 | ) | (2,352,106 | ) | (1,508,027 | ) | 618,801 | (3,731,694 | ) | 1,694,170 | 1,835,094 | (657,937 | ) | 327,066 | |||||||||||||||||||||||||
Interest and other expense | (173,547 | ) | (620,907 | ) | (163,510 | ) | (46,504 | ) | (173,547 | ) | (620,907 | ) | (416,265 | ) | (55,233 | ) | (579,774 | ) | (101,736 | ) | ||||||||||||||||||||
Net loss | $ | (1,433,593 | ) | $ | (7,117,076 | ) | $ | 791,585 | $ | 1,210,413 | $ | (2,490,560 | ) | $ | (817,652 | ) | ||||||||||||||||||||||||
Net loss per common share, basic | $ | (0.05 | ) | $ | (0.36 | ) | $ | 0.02 | $ | 0.04 | $ | (0.07 | ) | $ | (0.03 | ) | ||||||||||||||||||||||||
Net loss per common share, diluted | $ | (0.05 | ) | $ | (0.36 | ) | $ | 0.02 | $ | 0.03 | $ | (0.07 | ) | $ | (0.03 | ) | ||||||||||||||||||||||||
Weighted average common shares | ||||||||||||||||||||||||||||||||||||||||
outstanding, basic | 29,985,632 | 19,960,150 | 35,089,169 | 29,800,194 | 34,335,348 | 29,577,797 | ||||||||||||||||||||||||||||||||||
Weighted average common shares | ||||||||||||||||||||||||||||||||||||||||
outstanding, diluted | 29,985,632 | 19,960,150 | 56,239,845 | 40,245,491 | 34,335,348 | 29,577,797 | ||||||||||||||||||||||||||||||||||
Net loss | $ | (1,433,593 | ) | $ | (7,117,076 | ) | $ | (3,282,145 | ) | $ | (2,028,065 | ) | ||||||||||||||||||||||||||||
Net loss per common share, basic and diluted | $ | (0.05 | ) | $ | (0.36 | ) | $ | (0.10 | ) | $ | (0.07 | ) | ||||||||||||||||||||||||||||
Weighted average common shares outstanding, basic and diluted | 29,985,632 | 19,960,150 | 33,573,150 | 29,352,930 | ||||||||||||||||||||||||||||||||||||
STATEMENT OF FINANCIAL CONDITION: | ||||||||||||||||||||||||||||||||||||||||
December 31 | March 31 | |||||||||||||||||||||||||||||||||||||||
2010 | 2009 as restated | 2011 | 2010 as restated | |||||||||||||||||||||||||||||||||||||
Working capital | (2,861,488 | ) | (2,265 , 370 | ) | (1,894,975 | ) | (2,972,405 | ) | ||||||||||||||||||||||||||||||||
Total assets | 1,970,573 | 1,620,746 | 3,274,364 | 2,059,092 | ||||||||||||||||||||||||||||||||||||
Total long-term notes payable, related party, less current installments | — | 300,000 | — | — | ||||||||||||||||||||||||||||||||||||
Total shareholders’ deficit | (6,722,092 | ) | (7,256,058 | ) | (8,083,205 | ) | (3,058,161 | ) | ||||||||||||||||||||||||||||||||
PROFORMA: * | ||||||||||||||||||||||||||||||||||||||||
Proforma net loss per common share, basic | $ | (0.19 | ) | $ | (1.10 | ) | $ | 0.10 | $ | 0.16 | $ | (0.32 | ) | $ | (0.11 | ) | ||||||||||||||||||||||||
Proforma net loss per common share, diluted | $ | (0.19 | ) | $ | (1.10 | ) | $ | 0.08 | $ | 0.14 | $ | (0.32 | ) | $ | (0.11 | ) | ||||||||||||||||||||||||
Proforma weighted average common shares outstanding, basic | 7,463,702 | 6,461,154 | 7,974,056 | 7,445,158 | 7,898,674 | 7,422,919 | ||||||||||||||||||||||||||||||||||
Proforma weighted average common shares outstanding, diluted | 7,463,702 | 6,461,154 | 10,089,124 | 8,489,688 | 7,898,674 | 7,422,919 |
STATEMENT OF FINANCIAL CONDITION: | ||||||||||||||||
December 31 | June 30 | |||||||||||||||
2010 | 2009 | 2011 | 2010 | |||||||||||||
as restated | as restated | |||||||||||||||
Working capital | (2,861,488 | ) | (2,265,370 | ) | (1,846,593 | ) | (3,028,616 | ) | ||||||||
Total assets | 1,970,573 | 1,620,746 | 2,972,862 | 2,070,061 | ||||||||||||
Total long-term notes payable, related party, less current installments | — | 300,000 | — | — | ||||||||||||
Total shareholders’ deficit | (6,722,092 | ) | (7,256,058 | ) | (6,323,185 | ) | (3,094,998 | ) |
Application of Net Proceeds | Application of Net Proceeds | |||||||
Working Capital and General Corporate Purposes | $ | 3,792,000 | 29.0 | % | ||||
Marketing, Research and Development1 | $ | 7,100,000 | 54.2 | % | ||||
Repayment of Convertible Notes2 | $ | 1,470,000 | 11.2 | % | ||||
Payment of Employee Accrued Salaries3 | $ | 358,000 | 2.7 | % | ||||
Payment of CEO Accrued Salary4 | $ | 380,000 | 2.9 | % | ||||
Total | 13,100,000 | 100 | % |
Application of Net Proceeds | Application of Net Proceeds | |||||||
Working Capital and General Corporate Purposes | $ | 3,805,000 | 29.0 | % | ||||
Marketing, Research and Development (1) | $ | 7,045,000 | 53.8 | % | ||||
Repayment of Convertible Notes (2) | $ | 1,512,000 | 11.6 | % | ||||
Payment of Employee Accrued Salaries (3) | $ | 358,000 | 2.7 | % | ||||
Payment of CEO Accrued Salary (4) | $ | 380,000 | 2.9 | % | ||||
Total | 13,100,000 | 100 | % |
(1) | Includes proceeds to be applied to a portion of the estimated marketing, research and development costs relating to the commercialization of our ConsERV™, NanoClear™, NanoAir™ and ultracapacitor applications as discussed in the section of the prospectus titled “Description of Business”. This amount represents a current estimate, and is subject to change depending on various factors discussed below. |
(2) | Assumes repayment, by means of a combination of the issuance of conversion shares and repayment in cash, of convertible notes outstanding in the aggregate principal amount of $2,500,000 plus accrued interest at the rate of 10% per annum, which are held by Platinum Montaur Life Sciences, LLC (Platinum Montaur). These notes mature on March 22, 2012, and are convertible into common stock at a conversion price of $2.60 per share (after adjustment for the anticipated 10-for-1 reverse stock split). In addition we anticipate that these notes will be automatically converted upon completion of the offering. These notes are subject to certain limitations on conversion to the extent the shares resulting from such conversion, when aggregated with all other shares of common stock owned by Platinum Montaur at such time, would result in Platinum Montaur holding in excess of 9.99% of all our common stock. Because of these limitations we estimate that as of |
(3) | Includes payment in the amount of approximately $348,000 to repay the outstanding accrued salary and expenses of our general counsel, Ms. Patricia Tangredi and approximately $10,000 to repay the outstanding accured salary of our Vice President of Sales and Marketing, Mr. David Longacre. |
(4) | We have entered into an agreement with our CEO, Tim Tangredi, that provides that upon closing of the offering Mr. Tangredi’s accrued compensation through the closing date in the approximate amount of $1.05 million shall be paid with a combination of (a) cash, which we estimate at this time to be approximately $380,000, which is intended to cover payment of income and other taxes due from the payment of such accrued compensation, and (b) shares of restricted common stock at a price equal to the price per share paid by investors in the public offering, for the remainder (which is assumed for purposes of the above calculation to be $4.00 per share after giving effect to the anticipated 10-for-1 reverse stock split, and based on this assumption would consist of approximately |
1 | Air-Conditioning, Heating, and Refrigeration Institute (AHRI) – May 2008 test results. This study is publicly available and was not prepared for our benefit or funded by us. |
1 | Air-Conditioning, Heating, and Refrigeration Institute (AHRI) – May 2008 test results. This study is publicly available and was not prepared for our benefit or funded by us. |
Application | Current Stage | Estimated Funding Required Commercialize | Estimated Time to Market (post funding)(1) | Current Stage | Estimated Funding Required Commercialize | Estimated Time to Market (post funding)(1) | ||||||||||
Energy Recovery Ventilation (ConsERV) – An energy efficient process that exchanges heat and humidity between incoming and outgoing airstreams to increase fresh air within commercial and residential facilities | Varied - Additional components to meet market demand are necessary | $ | 1.5 Million | Commercial | ||||||||||||
Energy Recovery Ventilation (ConsERV TM ) – An energy efficient process that exchanges heat and humidity between incoming and outgoing airstreams to increase fresh air within commercial and residential facilities | Varied - Additional components to meet market demand are necessary | $ | 1.5 Million | Commercial | ||||||||||||
Water Clean – up (NanoClear) – A process using a low temperature, low pressure approach to process brackish, salt, and waste water into potable water. | 1st Stage Beta | $ | 3.8 Million | 12 – 36 months | ||||||||||||
Water Clean – up (NanoClear TM ) – A process using a low temperature, low pressure approach to process brackish, salt, and waste water into potable water. | 1st Stage Beta | $ | 3.8 Million | 12 – 36 months | ||||||||||||
Advanced Heating, Ventilating, and Air Conditioning (NanoAir) – A process using the nano – technology materials to create an advanced heating, ventilating, and air – conditioning system. | 1st Stage Beta | $ | 3.8 Million | 12 – 36 months | 1st Stage Beta | $ | 3.8 Million | 12 – 36 months | ||||||||
Ultracapacitor – if fully developed, may have a greater energy density and power per pound than traditional capacitors or the batteries on the market today. | Base materials testing underway by third party to confirm the effectiveness of the Company’s materials in the application. Current activities are moving us closer to the optimization of materials. | $ | 500,000 | — | Base materials testing underway by third party to confirm the effectiveness of the Company’s materials in the application. Current activities are moving us closer to the optimization of materials. | $ | 500,000 | — |
1 | Estimated time to market (post funding) for the Ultracapacitor cannot be determined at this time because it is subject to completion of materials testing. |
Products | Current and Future Competitors | |
ConsERV™ | Semco, Greenheck, Venmar, Bry-Air, dPoint, Renewaire and AirXchange. | |
NanoClear™ | Dow, Siemens, GE | |
NanoAir™ | AAON, Trane, Carrier, York, Hier, Mitsubishi, LG | |
Ultracapacitor | Maxwell, Ioxus, B&D |
1. | Patent No. 6,841,601– Cross-linked polymer electrolyte membranes for heat and moisture exchange devices. This patent was issued on January 11, 2005 and expires on or about March 12, 2022. |
2. | Patent No. 6,413,298 – Water and ion-conducting membranes and uses thereof. This patent was issued on July 2, 2002 and expires on or about July 27, 2020. |
3. | Patent No. 6,383,391 – Water and ion-conducting membranes and uses thereof. This patent was issued on May 7, 2002 and expires on or about July 27, 2020. |
4. | Patent No. 6,110,616 – Ion-conducting membrane for fuel cell. This patent was issued on August 29, 2000 and expires on or about January 29, 2018. |
5. | Patent No. 5,679,482 – Fuel Cell incorporating novel ion-conducting membrane. This patent was issued on October 21, 1997 and expires on or about October 20, 2014. |
6. | Patent No. 5,468,574 – Fuel Cell incorporating novel ion-conducting membrane. This patent was issued on October 21, 1995 and expires on or about May 22, 2014. |
7. | Patent No. 7,179,860 – Cross-linked polymer electrolyte membranes for heat, ion and moisture exchange devices. This patent was issued on February 20, 2007 and expires on or about March 11, 2022. |
8. | Patent No. 7,990,679 – Nanoparticle Ultra Capacitor. This patent was issued on August 2, 2011 and expires on or about December 10, 2028. |
WO/2008/039779 – Enhanced HVAC System and Method |
WO/2008/089484 – Multiphase selective Transport Through a Membrane |
WO/2008/141179 – Molecule Sulphonation Process * |
WO/2009/002984 – Stable and Compatible Polymer Blends* |
WO2009/002984 – Novel Coblock Polymers and Methods for Making Same |
Name | Age | Position | |||
Timothy N. Tangredi | 55 | President, Chief Executive Officer and Chairman of the Board of Directors | |||
Scott G. Ehrenberg | 57 | Chief Technology Officer and Secretary | |||
Judith C. Norstrud | 42 | Chief Financial Officer and Treasurer | |||
David Longacre | 52 | Vice President – Sales and Marketing | |||
Robert W. Schwartz | 66 | Director | |||
Raymond Kazyaka, Sr. | 75 | Director |
Fees Earned or Paid in Cash | Stock Awards | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Non-qualified Deferred Compensation Earnings | All Other Compensation | |||||||||||||||||||||||
($) | ($) | ($) | ($) | ($) | ($) | Total ($) | ||||||||||||||||||||||
Name (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | |||||||||||||||||||||
Raymond Kazyaka Sr., Director(1) | — | — | $ | 127,034 | — | — | — | $ | 127,034 | |||||||||||||||||||
Robert W. Schwartz, Director(2) | — | — | $ | 127,034 | — | — | — | $ | 127,034 |
Fees Earned or Paid in Cash | Stock Awards | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Non-qualified Deferred Compensation Earnings | All Other Compensation | |||||||||||||||||||||
($) | ($) | ($) | ($) | ($) | ($) | Total ($) | ||||||||||||||||||||
Name (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | |||||||||||||||||||
Raymond Kazyaka Sr., Director(1) | 2010 | — | — | $ | 95,869 | — | — | — | $ | 95,869 | ||||||||||||||||
2009 | — | — | 31,165 | — | — | — | 31,165 | |||||||||||||||||||
Robert W. Schwartz, Director(2) | 2010 | — | — | $ | 95,869 | — | — | — | $ | 95,869 | ||||||||||||||||
2009 | — | — | 31,165 | — | — | — | 31,165 |
(1) | At December 31, 2010, Mr. Kazyaka had options to purchase 904,600 shares (90,460 upon effecting proposed 10-for-1 reverse stock split) and no stock awards outstanding. |
(2) | At December 31, 2010, Mr. Schwartz had options to purchase 874,600 shares (87,460 upon reflecting proposed 10-for-1 reverse stock split) and no stock awards outstanding. |
Name and principal position (a) | Year (b) | Salary ($) (c) | Bonus ($) (d) | Stock Awards ($)(2) (e) | Option Awards ($)(2) (f) | Non-Equity Incentive Plan (g) | Non-qualified Deferred Compensation Earnings ($) (h) | All other compensation ($) (i) | Total ($) (j) | ||||||||||||||||||||||
Timothy N. Tangredi Chief Executive Officer, President, and Chairman of the Board of Directors(1) | 2010 2009 | | $ $ | 170,000 170,000 | | | — — | | | — — | | $ $ | 95,869 1,134,425 | | | — — | | | — — | | | — — | $ $ | 265,869 1,304,425 | | ||||||
Robert W. Brown Vice President of Marketing (3) | 2009 | $ | 57,187 | — | — | — | — | — | — | $ | 57,187 | ||||||||||||||||||||
David E. Longacre Vice President of Sales and Marketing | 2010 | $ | 125,000 | $ | 10,000 | — | $ | 73,386 | — | — | — | $ | 208,386 | ||||||||||||||||||
Scott G. Ehrenberg Chief Technology Officer and Secretary | 2010 2009 | | $ $ | 74,808 67,100 | | | — | | | — — | | $ | 89,877 — | | | — — | | | — — | | | — — | $ $ | 164,685 67,100 | | ||||||
Judith C. Norstrud Chief Financial Officer and Treasurer | 2010 2009 | | $ $ | 50,000 13,447 | | | — — | | | — — | | $ $ | 35,951 82,930 | | | — — | | | — — | | | — — | $ $ | 85,951 96,377 | |
(1) | Mr. Tangredi receives a salary of $170,000 per year, and may receive a bonus in an amount not to exceed 100% of his salary, which bonus shall be measured by meeting certain performance goals as determined in the sole discretion of our board of directors. In 2010 and 2009, Mr. Tangredi was paid $110,833 and $55,350, respectively and has accrued unpaid salary of $59,167 for 2010 and $114,650 for 2009. Additional accruals have been made for the years prior to 2009. As of |
(2) | The amounts included in these columns are the aggregate dollar amounts of compensation expense recognized by us for financial statement reporting purposes in accordance with Accounting Standards Codification 718, Compensation-Stock Compensation, for the fiscal years ended December 31, 2010 and December 31, 2009, and thus include amounts from option awards granted in and prior to the indicated year. For information on the valuation assumptions used in calculating these dollar amounts, see Note 1 to our audited financial statements included in this Registration Statement for the fiscal years ended December 31, 2010 and December 31, 2009, each as filed with the SEC. These amounts reflect our accounting expense for these awards and do not correspond to the actual value that may be recognized by the individuals upon option exercise. During the fiscal year ended December 31, 2010, there were forfeitures of options for the purchase of up to 371,125 shares related to service-based vesting conditions. |
(3) | Mr. Brown’s employment with us terminated on July 6, 2010. |
OPTION AWARDS | OPTION AWARDS | STOCK AWARDS | OPTION AWARDS | STOCK AWARDS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name (a) | Number of securities underlying unexercised options (#) Exercisable (b) | Number of securities underlying unexercised options (#) Unexercisable (c) | Equity Incentive Plan Awards: Number of Securities underlying unexercised unearned options (#) (d) | Option exercise price ($) (e) | Option expiration date (f) | Number of shares or units of stock that have not vested (#) (g) | Market value of shares or units of stock that have not vested ($) (h) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) (i) | Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($) (j) | Number of securities underlying unexercised options (#) Exercisable (b) | Number of securities underlying unexercised options (#) Unexercisable (c) | Equity Incentive Plan Awards: Number of Securities underlying unexercised unearned options (#) (d) | Option exercise price ($) (e) | Option expiration date (f) | Number of shares or units of stock that have not vested (#) (g) | Market value of shares or units of stock that have not vested ($) (h) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) (i) | Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($) (j) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Timothy N. Tangredi (1) | 825,000 | — | — | $ | 0.26 | 9/23/2014 | — | — | — | — | 825,000 | — | — | $ | 0.26 | 9/23/2014 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
150,000 | — | — | $ | 0.10 | 5/10/2015 | — | — | — | — | 150,000 | — | — | $ | 0.10 | 5/10/2015 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
120,000 | — | — | $ | 0.10 | 10/1/2015 | — | — | — | — | 120,000 | — | — | $ | 0.10 | 10/1/2015 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
40,000 | — | �� | — | $ | 0.30 | 5/2/2016 | — | — | — | — | 40,000 | — | — | $ | 0.30 | 5/2/2016 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
110,000 | — | — | $ | 0.55 | 11/1/2016 | — | — | — | — | 110,000 | — | — | $ | 0.55 | 11/1/2016 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
140,000 | — | — | $ | 0.55 | 2/20/2017 | — | — | — | — | 140,000 | — | — | $ | 0.55 | 2/20/2017 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
300,000 | — | — | $ | 0.21 | 8/18/2017 | — | — | — | — | 300,000 | — | — | $ | 0.21 | 8/18/2017 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
350,000 | — | — | $ | 0.21 | 1/30/2018 | — | — | — | — | 350,000 | — | — | $ | 0.21 | 1/30/2018 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
3,000,000 | * | — | — | $ | 0.36 | 8/4/2013 | — | — | — | — | 3,000,000 | * | — | — | $ | 0.36 | 8/4/2013 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
75,000 | — | — | $ | 0.30 | 8/4/2018 | — | — | — | — | 75,000 | — | — | $ | 0.30 | 8/4/2018 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
100,000 | — | — | $ | 0.20 | 11/12/2019 | — | — | — | — | 100,000 | — | — | $ | 0.42 | 11/12/2019 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
3,540,058 | — | — | $ | 0.20 | 11/12/2019 | — | — | — | — | 3,540,058 | — | — | $ | 0.42 | 11/12/2019 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
400,000 | — | — | $ | 0.30 | 6/25/2020 | — | — | — | — | 400,000 | — | — | $ | 0.30 | 6/25/2020 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
* Warrant | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Scott G. Ehrenberg (2) | 140,000 | — | — | $ | 0.26 | 9/23/2014 | — | — | — | — | 140,000 | — | — | $ | 0.26 | 9/23/2014 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
110,000 | — | — | $ | 0.10 | 5/10/2015 | — | — | — | — | 110,000 | — | — | $ | 0.10 | 5/10/2015 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
80,000 | — | — | $ | 0.10 | 10/1/2015 | — | — | — | — | 80,000 | — | — | $ | 0.10 | 10/1/2015 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
40,000 | — | — | $ | 0.55 | 11/1/2016 | — | — | — | — | 40,000 | — | — | $ | 0.55 | 11/1/2016 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
120,000 | — | — | $ | 0.55 | 2/20/2017 | — | — | — | — | 120,000 | — | — | $ | 0.55 | 2/20/2017 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
50,000 | — | — | $ | 0.21 | 8/18/2017 | — | — | — | — | 50,000 | — | — | $ | 0.21 | 8/18/2017 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
250,000 | — | — | $ | 0.30 | 8/4/2018 | — | — | — | — | 250,000 | — | — | $ | 0.30 | 8/4/2018 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
*250,000 | — | — | $ | 0.30 | 8/4/2013 | — | — | — | — | *250,000 | — | — | $ | 0.30 | 8/4/2013 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
125,000 | 250,000 | 250,000 | $ | 0.30 | 6/25/2020 | — | — | — | — | 125,000 | 250,000 | 250,000 | $ | 0.30 | 6/25/2020 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
________ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
* Warrant | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Judith C. Norstrud (3) | 200,000 | — | — | $ | 0.45 | 10/15/2019 | — | — | — | — | 200,000 | — | — | $ | 0.45 | 10/15/2019 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
50,000 | 100,000 | 100,000 | $ | 0.30 | 6/25/2020 | — | — | — | — | 50,000 | 100,000 | 100,000 | $ | 0.30 | 6/25/2020 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
David E. Longacre (4) | — | 200,000 | — | $ | 0.28 | 1/20/2020 | — | — | — | — | — | 200,000 | — | $ | 0.28 | 1/20/2020 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 100,000 | — | $ | 0.30 | 7/6/2020 | — | — | — | — | — | 100,000 | — | $ | 0.30 | 7/6/2020 | — | — | — | — |
OPTION AWARDS | OPTION AWARDS | STOCK AWARDS | OPTION AWARDS | STOCK AWARDS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name (a) | Number of securities underlying unexercised options (#) Exercisable (b) | Number of securities underlying unexercised options (#) Unexercisable (c) | Equity Incentive Plan Awards: Number of Securities underlying unexercised unearned options (#) (d) | Option exercise price ($) (e) | Option expiration date (f) | Number of shares or units of stock that have not vested (#) (g) | Market value of shares or units of stock that have not vested ($) (h) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) (i) | Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($) (j) | Number of securities underlying unexercised options (#) Exercisable (b) | Number of securities underlying unexercised options (#) Unexercisable (c) | Equity Incentive Plan Awards: Number of Securities underlying unexercised unearned options (#) (d) | Option exercise price ($) (e) | Option expiration date (f) | Number of shares or units of stock that have not vested (#) (g) | Market value of shares or units of stock that have not vested ($) (h) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) (i) | Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($) (j) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Timothy N. Tangredi (1) | 82,500 | — | — | $ | 2.60 | 9/23/2014 | — | — | — | — | 82,500 | — | — | $ | 2.60 | 9/23/2014 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
15,000 | — | — | $ | 1.00 | 5/10/2015 | — | — | — | — | 15,000 | — | — | $ | 1.00 | 5/10/2015 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
12,000 | — | — | $ | 1.00 | 10/1/2015 | — | — | — | — | 12,000 | — | — | $ | 1.00 | 10/1/2015 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
4,000 | — | — | $ | 3.00 | 5/2/2016 | — | — | — | — | 4,000 | — | — | $ | 3.00 | 5/2/2016 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
11,000 | — | — | $ | 5.50 | 11/1/2016 | — | — | — | — | 11,000 | — | — | $ | 5.50 | 11/1/2016 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
14,000 | — | — | $ | 5.50 | 2/20/2017 | — | — | — | — | 14,000 | — | — | $ | 5.50 | 2/20/2017 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
30,000 | — | — | $ | 2.10 | 8/18/2017 | — | — | — | — | 30,000 | — | — | $ | 2.10 | 8/18/2017 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
35,000 | — | — | $ | 2.10 | 1/30/2018 | — | — | — | — | 35,000 | — | — | $ | 2.10 | 1/30/2018 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
300,000 | * | — | — | $ | 3.60 | 8/4/2013 | — | — | — | — | 300,000 | * | — | — | $ | 3.60 | 8/4/2013 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
7,500 | — | — | $ | 3.00 | 8/4/2018 | — | — | — | — | 7,500 | — | — | $ | 3.00 | 8/4/2018 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
10,000 | — | — | $ | 2.00 | 11/12/2019 | — | — | — | — | 10,000 | — | — | $ | 4.20 | 11/12/2019 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
354,006 | — | — | $ | 2.00 | 11/12/2019 | — | — | — | — | 354,006 | — | — | $ | 4.20 | 11/12/2019 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
40,000 | — | — | $ | 3.00 | 6/25/2020 | — | — | — | — | 40,000 | — | — | $ | 3.00 | 6/25/2020 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
* Warrant | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Scott G. Ehrenberg (2) | 14,000 | — | — | $ | 2.60 | 9/23/2014 | — | — | — | — | 14,000 | — | — | $ | 2.60 | 9/23/2014 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
11,000 | — | — | $ | 1.00 | 5/10/2015 | — | — | — | — | 11,000 | — | — | $ | 1.00 | 5/10/2015 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
8,000 | — | — | $ | 1.00 | 10/1/2015 | — | — | — | — | 8,000 | — | — | $ | 1.00 | 10/1/2015 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
4,000 | — | — | $ | 5.50 | 11/1/2016 | — | — | — | — | 4,000 | — | — | $ | 5.50 | 11/1/2016 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
12,000 | — | — | $ | 5.50 | 2/20/2017 | — | — | — | — | 12,000 | — | — | $ | 5.50 | 2/20/2017 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
5,000 | — | — | $ | 2.10 | 8/18/2017 | — | — | — | — | 5,000 | — | — | $ | 2.10 | 8/18/2017 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
25,000 | — | — | $ | 3.00 | 8/4/2018 | — | — | — | — | 25,000 | — | — | $ | 3.00 | 8/4/2018 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
*25,000 | — | — | $ | 3.00 | 8/4/2013 | — | — | — | — | *25,000 | — | — | $ | 3.00 | 8/4/2013 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
12,500 | 25,000 | 25,000 | $ | 3.00 | 6/25/2020 | — | — | — | — | 12,500 | 25,000 | 25,000 | $ | 3.00 | 6/25/2020 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
* Warrant | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Judith C. Norstrud (3) | 20,000 | — | — | $ | 4.50 | 10/15/2019 | — | — | — | — | 20,000 | — | — | $ | 4.50 | 10/15/2019 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
5,000 | 10,000 | 10,000 | $ | 3.00 | 6/25/2020 | — | — | — | — | 5,000 | 10,000 | 10,000 | $ | 3.00 | 6/25/2020 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
David E. Longacre (4) | — | 20,000 | — | $ | 2.80 | 1/20/2020 | — | — | — | — | — | 20,000 | — | $ | 2.80 | 1/20/2020 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 10,000 | — | $ | 3.00 | 7/6/2020 | — | — | — | — | — | 10,000 | — | $ | 3.00 | 7/6/2020 | — | — | — | — |
(1) | The April 2008 warrant grant to Mr. Tangredi for 3,000,000 shares (300,000 shares upon giving effect to the anticipated 10-for-1 reverse stock split) was made by the Board of Directors in recognition for Mr. Tangredi’s achievement of the following goals: negotiating conversion of the convertible notes issued in the Additional Financing, securing a release with respect to the consulting agreement with Gray Capital Partners, Inc., securing and closing upon the Financing. All stock options issued to Mr. Tangredi prior to December 31, 2009 were issued under the 2000 Plan. The remaining options were issued under the 2009 Plan. |
(2) | All stock options issued to Mr. Ehrenberg prior to December 31, 2009 were issued under the 2000 Plan. The remaining options issued under the 2009 Plan. |
(3) | All stock options issued to Ms. Norstrud prior to December 31, 2009 were issued under the 2000 Plan. The remaining options were issued under the 2009 Plan. |
(4) | All stock options issued to Mr. Longacre were issued under the 2009 Plan. |
Name of Beneficial Owner | Common Stock Beneficially Owned Number of Shares of Common Stock | Percentage of Class | Common Stock Beneficially Owned Number of Shares of Common Stock after giving effect to the anticipated reverse stock | |||||||||
Timothy N. Tangredi (Officer and Chairman) (1) | 12,230,477 | 25.4 | % | 1,223,048 | ||||||||
David Longacre (Officer) (2) | 66,667 | .2 | % | 6,667 | ||||||||
Scott G. Ehrenberg (3) (Officer) | 1,994,467 | 5.2 | % | 199,447 | ||||||||
Judith Norstrud (Officer) (4) | 537,500 | .5 | % | 53,750 | ||||||||
Raymond Kazyaka Sr. (Director) (5) | 1,129,600 | 3.0 | % | 112,960 | ||||||||
Robert W. Schwartz (Director) (6) | 1,099,600 | 3.0 | % | 109,960 | ||||||||
Executive officers and directors as a group (6 persons) | 17,058,311 | 32.2 | % | 1,687,126 | ||||||||
Brian A. Kelly 181C Hague Blvd. Glenmont, N.Y. 12077 | 2,254,085 | 6.3 | % | 225,409 | ||||||||
Michael Gostomski (7) 1666 Valley View Dr. Winnona, MN 55987 | 3,355,535 | 9.1 | % | 335,554 | ||||||||
Louis M. Jaffe (8) 1500 S. Ocean Blvd #5201 Boca Raton, FL 33432 | 3,684,300 | 9.9 | % | 368,430 | ||||||||
Mark Nordlich (9) 152 West 575th St. 4th Floor New York, NY 10019 | 3,637,036 | 9.99 | % | 363,704 | ||||||||
Erick Richardson (10) 10900 Wilshire Blvd. Suite 500 Los Angeles, CA 90024 | 1,955,230 | 5.3 | % | 195,523 | ||||||||
Leonard Samuels (11) 1011 Centennial Road Penn Valley, PA 19072 | 13,478,165 | 32.9 | % | 1,347,817 | ||||||||
Leah Kaplan Samuels (12) 1011 Centennial Road Penn Valley, PA 19072 | 3,629,696 | 9.8 | % | 362,970 |
Name of Beneficial Owner | Common Stock Beneficially Owned Number of Shares of Common Stock | Percentage of Class | Common Stock Beneficially Owned Number of Shares of Common Stock after giving effect to the anticipated reverse stock | |||||||||
Timothy N. Tangredi | ||||||||||||
(Officer and Chairman) (1) | 12,230,477 | 25.0 | % | 1,223,048 | ||||||||
David Longacre (Officer) (2) | 100,001 | .3 | % | 10,000 | ||||||||
Scott G. Ehrenberg (3) (Officer) | 2,077,800 | 5.4 | % | 207,780 | ||||||||
Judith Norstrud (Officer) (4) | 537,500 | 1.4 | % | 53,750 | ||||||||
Raymond Kazyaka Sr. (Director) (5) | 1,129,600 | 3.0 | % | 112,960 | ||||||||
Robert W. Schwartz (Director) (6) | 1,099,600 | 2.9 | % | 109,960 | ||||||||
Richard Rutkowski (Director Nominee) | 0 | 0.0 | % | 0 | ||||||||
Lon Bell (Director Nominee) | 0 | 0.0 | % | 0 | ||||||||
Peter Termyn (Director Nominee) | 0 | 0.0 | % | 0 | ||||||||
Executive officers, directors and nominees, as a group (9 persons) | 17,174,978 | 31.9 | % | 1,717,498 | ||||||||
Brian A. Kelly | ||||||||||||
181C Hague Blvd. Glenmont, N.Y. 12077 | 2,254,085 | 6.1 | % | 225,409 | ||||||||
Michael Gostomski (7) | ||||||||||||
1666 Valley View Dr. Winnona, MN 55987 | 3,355,535 | 8.9 | % | 335,554 | ||||||||
Louis M. Jaffe (8) | ||||||||||||
1500 S. Ocean Blvd #5201 Boca Raton, FL 33432 | 3,684,300 | 9.7 | % | 368,430 | ||||||||
Mark Nordlich (9) | ||||||||||||
152 West 575th St. 4th Floor New York, NY 10019 | 3,680,436 | 9.99 | % | 368,044 | ||||||||
Leonard Samuels ( 10 ) | ||||||||||||
1011 Centennial Road Penn Valley, PA 19072 | 13,478,165 | 32.3 | % | 1,347,817 | ||||||||
Leah Kaplan Samuels ( 11 ) | ||||||||||||
1011 Centennial Road Penn Valley, PA 19072 | 3,629,696 | 9.6 | % | 362,970 |
(1) | Includes 9,375,058 shares (937,506 shares upon giving effect to the anticipated 10-for-1 reverse stock split) of common stock issuable upon exercise of stock options and warrants and 2,828,358 shares (282,836 shares upon giving effect to the anticipated 10-for-1 reverse stock split) beneficially owned by Mr. Tangredi’s wife, Patricia Tangredi. 2,700,558 of Ms. Tangredi’s shares (270,056 shares upon giving effect to the anticipated 10-for-1 reverse stock split) are issuable upon the exercise of stock options. Excludes an estimated |
(2) | Includes |
(3) | Includes 1 |
(4) | Includes 537,500 shares of common stock (53,750 shares upon giving effect to the anticipated 10-for-1 reverse stock split) issuable upon exercise of stock options. |
(5) | Includes 1,129,600 shares of common stock (112,960 shares upon giving effect to the anticipated 10-for-1 reverse stock split) issuable upon exercise of stock options. |
(6) | Includes 1,099,600 shares of common stock (109,960 shares upon giving effect to the anticipated 10-for-1 reverse stock split) issuable upon exercise of stock options. |
(7) | Includes 807,087 common shares issuable (80,709 shares upon giving effect to the anticipated 10-for-1 reverse stock split upon exercise of certain warrants. |
(8) | Includes 666,500 shares of common stock (66,650 shares upon giving effect to the anticipated 10-for-1 reverse stock split) issuable upon exercise of certain outstanding warrants issued in connection with the Financing to Louis M. Jaffe 2004 Intangible Asset Mgmt. TR U/A DTD 5/24/04 and 298,077 shares of common stock (29,808 shares upon giving effect to the anticipated 10-for-1 reverse stock split) issuable upon exercise of certain outstanding warrants issued in connection with a purchase of Company’s common stock in 2009. Also includes 1,819,715 shares (181,972 shares upon giving effect to the anticipated 10-for-1 reverse stock split) held by the aforementioned trust, 250,004 shares (25,000 shares upon giving effect to the anticipated 10-for-1 reverse stock split) held by the Louis Jaffe TTEE Irrevocable Trust – Jennifer Jaffe and 250,004 shares (25,000 shares upon giving effect to the anticipated 10-for-1 reverse stock split) held by the Louis Jaffe TTEE Irrevocable Trust – Lara Jaffe Taylor. The natural person with voting power and investment power on behalf each of the aforementioned trusts is Louis M. Jaffe. Also includes 100,000 shares (10,000 shares upon giving effect to the anticipated 10-for-1 reverse stock split) held by the Diana G. Jaffe Revocable Trust Dated 8/4/99 and 50,000 shares (5,000 shares upon giving effect to the anticipated 10-for-1 reverse split) held by Ashlin Trevor Jaffe under the Florida Uniform Gift to Minors Act for which Diana G. Jaffe, Louis M. Jaffe’s wife, is the natural person with voting power and investment power on behalf of the trusts and 250,000 shares of common stock (25,000 shares upon giving effect to the anticipated 10-for-1 reverse stock split) issuable on exercise of a certain outstanding warrant issued to Louis M. Jaffe pursuant to a consulting agreement. |
(9) | Includes 3,324,740 shares of common stock (332,474 shares upon giving effect to the anticipated 10-for-1 reverse stock split), and |
Includes 905,000 shares of common stock (90,500 shares upon giving effect to the anticipated 10-for-1 reverse stock split) issuable upon exercise of certain outstanding warrants. All of the foregoing warrants are held in the name of Leah Kaplan-Samuels and Leonard Samuels JTWROS. The natural persons with voting power and investment power on behalf of Leah Kaplan-Samuels and Leonard Samuels JTWROS are Leah Kaplan-Samuels and Leonard Samuels. Also includes 3,193,466 shares of common stock (319,347 shares upon giving effect to the anticipated 10-for-1 reverse stock split) and 3,025,000 shares of common stock (302,500 shares upon giving effect to the anticipated 10-for-1 reverse stock split) issuable upon exercise of certain outstanding warrants issued to shareholder RBC Dain – Custodian for Leonard Samuels IRA. |
Includes 905,000 shares of common stock (90,500 shares upon giving effect to the anticipated 10 for 1 reverse stock split) issuable upon exercise of warrants. All of the foregoing warrants are held in the name of Leah Kaplan-Samuels and Leonard Samuels JTWROS. The natural persons with voting power and investment power on behalf of Leah Kaplan-Samuels and Leonard Samuels JTWROS are Leah Kaplan-Samuels and Leonard Samuels. |
Common Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | Common Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | |||||||||||||||||||||||||
Outstanding at December 31, 2008 | 8,606,556 | $ | 0.26 | 7.58 | $ | 38,294 | 8,606,556 | $ | 0.26 | 7.58 | $ | 38,294 | ||||||||||||||||||||
Granted | 4,190,058 | $ | 0.21 | — | — | 4,190,058 | $ | 0.21 | — | — | ||||||||||||||||||||||
Exercised | (25,000 | ) | $ | 0.17 | — | $ | 3,250 | (25,000 | ) | $ | 0.17 | — | $ | 3,250 | ||||||||||||||||||
Forfeited or expired | (472,732 | ) | $ | 0.58 | — | — | (472,732 | ) | $ | 0.58 | — | — | ||||||||||||||||||||
Outstanding at December 31, 2009 | 12,298,882 | $ | 0.26 | 7.64 | $ | 1,052,839 | 12,298,882 | $ | 0.26 | 7.64 | $ | 1,052,839 | ||||||||||||||||||||
Granted | 2,970,000 | $ | 0.30 | — | — | 2,970,000 | $ | 0.30 | — | — | ||||||||||||||||||||||
Forfeited or expired | (371,125 | ) | $ | 0.32 | — | — | (371,125 | ) | $ | 0.32 | — | — | ||||||||||||||||||||
Outstanding at December 31, 2010 | 14,897,757 | $ | 0.25 | 7.19 | $ | 946,754 | 14,897,757 | $ | 0.25 | 7.19 | $ | 946,754 | ||||||||||||||||||||
Granted | 1,810,000 | $ | 0.30 | — | — | 2,510,000 | $ | 0.3 3 | — | — | ||||||||||||||||||||||
Forfeited or expired | (136,667 | ) | $ | 0.11 | — | — | ||||||||||||||||||||||||||
Outstanding at March 31, 2011 | 16,707,757 | $ | 0.26 | 7.25 | $ | 3,162,959 | ||||||||||||||||||||||||||
Outstanding at June 30 , 2011 | 1 7,271,090 | $ | 0. 32 | 7. 04 | $ | 1,406,643 | ||||||||||||||||||||||||||
Exercisable at March 31, 2011 | 15,138,174 | $ | 0.25 | 6.98 | $ | 2,959,664 | ||||||||||||||||||||||||||
Exercisable at June 3 0 , 2011 | 15 ,958,937 | $ | 0. 32 | 6. 86 | $ | 1,326,355 |
Common Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | Common Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | |||||||||||||||||||||||||
Outstanding at December 31, 2008 | 860,656 | $ | 2.60 | 7.58 | $ | 38,294 | 860,656 | $ | 2.60 | 7.58 | $ | 38,294 | ||||||||||||||||||||
Granted | 419,006 | $ | 2.10 | — | — | 419,006 | $ | 2.10 | — | — | ||||||||||||||||||||||
Exercised | (2,500 | ) | $ | 1.70 | — | $ | 3,250 | (2,500 | ) | $ | 1.70 | — | $ | 3,250 | ||||||||||||||||||
Forfeited or expired | (47,273 | ) | $ | 5.80 | — | — | (47,273 | ) | $ | 5.80 | — | — | ||||||||||||||||||||
Outstanding at December 31, 2009 | 1,229,889 | $ | 2.60 | 7.64 | $ | 1,052,839 | 1,229,889 | $ | 2.60 | 7.64 | $ | 1,052,839 | ||||||||||||||||||||
Granted | 297,000 | $ | 3.00 | — | — | 297,000 | $ | 3.00 | — | — | ||||||||||||||||||||||
Forfeited or expired | (37,113 | ) | $ | 3.20 | — | – | (37,113 | ) | $ | 3.20 | — | – | ||||||||||||||||||||
Outstanding at December 31, 2010 | 1,489,776 | $ | 2.50 | 7.19 | $ | 946,754 | 1,489,776 | $ | 2.50 | 7.19 | $ | 946,754 | ||||||||||||||||||||
Granted | 181,000 | $ | 3.00 | — | — | 251 ,000 | $ | 3. 30 | — | — | ||||||||||||||||||||||
Forfeited or expired | (13,667 | ) | $ | 1.10 | — | — | ||||||||||||||||||||||||||
Outstanding at June 30 , 2011 | 1, 727,109 | $ | 3.20 | 7. 04 | $ | 1,406,643 | ||||||||||||||||||||||||||
Outstanding at March 31, 2011 | 1,670,776 | $ | 2.60 | 7.25 | $ | 3,162,959 | ||||||||||||||||||||||||||
Exercisable at March 31, 2011 | 1,513,817 | $ | 2.50 | 6.98 | $ | 2,959,664 | ||||||||||||||||||||||||||
Exercisable at June 30 , 2011 | 1,5 95,894 | $ | 3.20 | 6. 86 | $ | 1,326,355 |
(i) |
(ii) |
(iii) |
(i) |
(ii) | continuation of medical benefits set forth in the agreement until one year following termination of employment or resignation, and |
(iii) |
(i) |
(ii) | continuation of the health and other insurance coverage and other benefits set forth in the agreement until one year following termination of employment or resignation, |
(iii) |
Year Ended December 31, | Year Ended December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenues | $ | 3,342,468 | $ | 1,531,215 | $ | 3,342,468 | $ | 1,531,215 | ||||||||
Percentage of revenues | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Cost of goods sold | $ | 2,290,041 | $ | 1,071,098 | $ | 2,290,041 | $ | 1,071,098 | ||||||||
Percentage of revenues | 68.5. | % | 70.0 | % | 68.5 | % | 70.0 | % | ||||||||
Research and development expenses, net grant revenue | $ | 238,182 | $ | 6,600 | $ | 238,182 | 6,600 | |||||||||
Percentage of revenues | 7.1 | % | .4 | % | 7.1 | % | .4 | % | ||||||||
Selling, general and administrative expenses | $ | 2,693,092 | $ | 3,217,992 | $ | 2,693,092 | $ | 3,217,992 | ||||||||
Percentage of revenues | 80.6 | % | 210.2 | % | 80.6 | % | 210.2 | % | ||||||||
Interest expense | $ | 209,550 | $ | 621,574 | $ | 209,550 | $ | 621,574 | ||||||||
Percentage of revenues | 6.3 | % | 40.6 | % | 6.3 | % | 40.6 | % | ||||||||
Change in fair value of warrant liability | $ | (618,801 | ) | $ | 3,731,694 | $ | (618,801 | ) | $ | 3,731,694 | ||||||
Percentage of revenues | 18.5 | % | 243.7 | % | 18.5 | % | 243.7 | % | ||||||||
Net loss | $ | (1,433,593 | ) | $ | (7,117,076 | ) | $ | (1,433,593 | ) | $ | (7,117,076 | ) | ||||
Percentage of revenues | (42.9 | )% | (464.8 | )% | (42.9 | )% | (464.8 | )% |
Three Months Ended June 30, | ||||||||||||||||
Three Months Ended March 31, | 2011 | 2010 | ||||||||||||||
2011 | 2010 | restated | ||||||||||||||
Revenues | $ | 858,694 | $ | 407,312 | $ | 1,124,079 | $ | 1,010,142 | ||||||||
Percentage of revenues | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Cost of goods sold | $ | 700,890 | $ | 321,326 | $ | 806,674 | $ | 550,196 | ||||||||
Percentage of revenues | 81.6 | % | 78.9 | % | 71.8 | % | 54.5 | % | ||||||||
Research and development expenses, net grant revenue | $ | 2,036 | $ | 14,139 | $ | 11,119 | $ | - | ||||||||
Percentage of revenues | .24 | % | 3.5 | % | 1.0 | % | 0.0 | % | ||||||||
Selling, general and administrative expenses | $ | 922,297 | $ | 545,381 | $ | 792,606 | $ | 1,029,394 | ||||||||
Percentage of revenues | 107.4 | % | 133.9 | % | 70.5 | % | 101.9 | % | ||||||||
Interest expense | $ | 163,539 | $ | 46,510 | $ | 416,899 | $ | 55,233 | ||||||||
Percentage of revenues | 19.0 | % | 11.4 | % | 37.1 | % | 5.5 | % | ||||||||
Change in fair value of warrant liability | $ | 2,352,106 | $ | 1,508,027 | ||||||||||||
Change in fair value of warrant liability (gain) | $ | (1,694,170 | ) | $ | (1,835,094 | ) | ||||||||||
Percentage of revenues | 273.9 | % | 370.2 | % | 150.7 | % | 181.7 | % | ||||||||
Net loss | $ | (3,282,145 | ) | $ | (2,028,065 | ) | ||||||||||
Net income | $ | 791,585 | $ | 1,210,413 | ||||||||||||
Percentage of revenues | (382.2 | )% | (497.9 | )% | 70.4 | % | 119.8 | % |
Six Months Ended June 30, | ||||||||
2011 | 2010 | |||||||
restated | ||||||||
Revenues | $ | 1,982,773 | $ | 1,417,454 | ||||
Percentage of revenues | 100.0 | % | 100.0 | % | ||||
Cost of goods sold | $ | 1,507,564 | $ | 871,522 | ||||
Percentage of revenues | 76.0 | % | 61.5 | % | ||||
Research and development expenses, net grant revenue | $ | 13,155 | $ | - | ||||
Percentage of revenues | 0.7 | % | 0.0 | % | ||||
Selling, general and administrative expenses | $ | 1,714,903 | $ | 1,588,914 | ||||
Percentage of revenues | 86.5 | % | 112.1 | % | ||||
Interest expense | $ | 580,438 | $ | 101,736 | ||||
Percentage of revenues | 29.3 | % | 7.2 | % | ||||
Change in fair value of warrant liability loss/(gain) | $ | 657,937 | $ | (327,066 | ) | |||
Percentage of revenues | 33.2 | % | 23.1 | % | ||||
Net loss | $ | 2,490,560 | $ | 817,652 | ||||
Percentage of revenues | 125.6 | % | 57.7 | % |
1. | We are currently holding preliminary discussions with parties who are interested in licensing, purchasing the rights to, or establishing a joint venture to commercialize, certain applications of our technology. |
2. | We are seeking growth capital from certain strategic and/or government (grant) related sources. In addition to said capital, these sources may, pursuant to any agreements that may be developed in conjunction with such funding, assist in the product definition and design, roll-out, and channel penetration of our products. As part of this step we will attempt to take advantage of key programs associated with the recently enacted American Recovery and Reinvestment Act of 2009. |
Six Months Ended June 30, | ||||||||||||||||
Three Months Ended March 31, | 2011 | 2010 | ||||||||||||||
2011 | 2010 | restated | ||||||||||||||
Cash flows used in operating activities | $ | (322,067 | ) | $ | (576,116 | ) | $ | (463,334 | ) | $ | (1,183,705 | ) | ||||
Cash flows used in investing activities | (16,487 | ) | (9,541 | ) | (27,342 | ) | (10,484 | ) | ||||||||
Cash flows provided by financing activities | 1,265,018 | 545,000 | 1,027,817 | 520,000 | ||||||||||||
Net increase (decrease) in cash and cash equivalents | $ | 926,464 | $ | (40,657 | ) | $ | 537,141 | $ | (674,189 | ) | ||||||
Contractual Obligations | Total | Less than 1 Year | 1-3 Years | 3-5 Years | Total | Less than 1 Year | 1-3 Years | 3-5 Years | ||||||||||||||||||||||||
Long – term debt | $ | 2,500,000 | $ | 2,500,000 | $ | 0 | $ | 0 | $ | 2,500,000 | $ | 2,500,000 | $ | 0 | $ | 0 | ||||||||||||||||
Purchase Obligations | 355,501 | 355,501 | $ | 0 | $ | 0 | 97,150 | 97,150 | $ | 0 | $ | 0 | ||||||||||||||||||||
Total | $ | 2,855,501 | $ | 2,855,501 | $ | 0 | $ | 0 | $ | 2, 597,150 | $ | 2 ,597,150 | $ | 0 | $ | 0 | ||||||||||||||||
After giving effect to the anticipated 10-for-1 reverse stock split | After giving effect to the anticipated 10-for-1 reverse stock split | |||||||||||||||||||||||||||||||
High | Low | High | Low | High | Low | High | Low | |||||||||||||||||||||||||
For the year ending December 31, 2011: | ||||||||||||||||||||||||||||||||
First Quarter | $ | 0.50 | $ | 0.27 | $ | 5.00 | $ | 2.70 | $ | 0.50 | $ | 0.27 | $ | 5.00 | $ | 2.70 | ||||||||||||||||
Second Quarter | $ | 0.44 | $ | 0.35 | $ | 4.40 | $ | 3.50 | ||||||||||||||||||||||||
For the year ending December 31, 2010: | ||||||||||||||||||||||||||||||||
First Quarter | $ | 0.44 | $ | 0.22 | $ | 4.40 | $ | 2.20 | $ | 0.44 | $ | 0.22 | $ | 4.40 | $ | 2.20 | ||||||||||||||||
Second Quarter | $ | 0.50 | $ | 0.23 | $ | 5.00 | $ | 2.30 | $ | 0.50 | $ | 0.23 | $ | 5.00 | $ | 2.30 | ||||||||||||||||
Third Quarter | $ | 0.40 | $ | 0.27 | $ | 4.00 | $ | 2.70 | $ | 0.40 | $ | 0.27 | $ | 4.00 | $ | 2.70 | ||||||||||||||||
Fourth Quarter | $ | 0.37 | $ | 0.24 | $ | 3.70 | $ | 2.40 | $ | 0.37 | $ | 0.24 | $ | 3.70 | $ | 2.40 | ||||||||||||||||
For the year ending December 31, 2009: | ||||||||||||||||||||||||||||||||
First Quarter | $ | 0.20 | $ | 0.08 | $ | 2.00 | $ | 0.80 | $ | 0.20 | $ | 0.08 | $ | 2.00 | $ | 0.80 | ||||||||||||||||
Second Quarter | $ | 0.19 | $ | 0.13 | $ | 1.90 | $ | 1.30 | $ | 0.19 | $ | 0.13 | $ | 1.90 | $ | 1.30 | ||||||||||||||||
Third Quarter | $ | 0.26 | $ | 0.10 | $ | 2.60 | $ | 1.00 | $ | 0.26 | $ | 0.10 | $ | 2.60 | $ | 1.00 | ||||||||||||||||
Fourth Quarter | $ | 0.95 | $ | 0.22 | $ | 9.50 | $ | 2.20 | $ | 0.95 | $ | 0.22 | $ | 9.50 | $ | 2.20 | ||||||||||||||||
For the year ending December 31, 2008: | ||||||||||||||||||||||||||||||||
First Quarter | $ | 0.51 | $ | 0.15 | $ | 5.10 | $ | 1.50 | $ | 0.51 | $ | 0.15 | $ | 5.10 | $ | 1.50 | ||||||||||||||||
Second Quarter | $ | 0.51 | $ | 0.24 | $ | 5.10 | $ | 2.40 | $ | 0.51 | $ | 0.24 | $ | 5.10 | $ | 2.40 | ||||||||||||||||
Third Quarter | $ | 0.45 | $ | 0.16 | $ | 4.50 | $ | 1.60 | $ | 0.45 | $ | 0.16 | $ | 4.50 | $ | 1.60 | ||||||||||||||||
Fourth Quarter | $ | 0.20 | $ | 0.07 | $ | 2.00 | $ | 0.70 | $ | 0.20 | $ | 0.07 | $ | 2.00 | $ | 0.70 |
Plan Category | (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | (b) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | (c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans Excluding Securities Reflected in Column (a) | (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | (b) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | (c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans Excluding Securities Reflected in Column (a) | ||||||||||||||||||
Equity compensation plans approved by security holders: | 17,457,757 | $ | 0.31 | 10,230,000 | 17, 321,090 | $ | 0.3 2 | 9,530,000 | ||||||||||||||||
Equity compensation plans approved by security holders (after giving effect to the anticipated 10-for-1 reverse stock split) | 1,745,776 | $ | 3.10 | 1,023,000 | 1,732,109 | $ | 3.20 | 953,000 |
Public offering price per share | $ | 4.00 | ||
Net tangible book value per share as of March 31, 2011 | $ | (0.24 | ) | |
Increase per share attributable to existing investors | $ | (0.93 | ) | |
Adjusted net tangible book value per share after this offering | $ | 0.69 | ||
Dilution in net tangible book value per share to new investors | $ | 3.31 |
Public offering price per share | $ | 4.00 | ||||||
Net tangible book deficit per share available to common shareholders as of June 30, 2011 | $ | (0.05 | ) | |||||
Increase attributable to pro forma adjustments before the offering | $ | 0.53 | ||||||
Pro forma net tangible book value per share before the offering | $ | 0.48 | ||||||
Increase per share attributable to new investors in the offering | $ | 1.22 | ||||||
Pro forma net tangible book value per share after the offering | $ | 1.70 | ||||||
Dilution per share to new investors in the offering | $ | 2.30 |
March 31, 2011 Actual | After giving effect to the anticipated 10- to-1 reverse stock split March 31, 2011 | Conversion and Repayment of Convertible Notes | Issuance of Shares for Accrued Unpaid Compensation | The Offering | March 31, 2011 Proforma | |||||||||||||||||||
Common stock issued and outstanding | 33,323,715 | 3,332,372 | 465,971 | 166,791 | 3,750,000 | 7,715,134 | ||||||||||||||||||
Common stock underlying warrants | 27,805,141 | 2,780,514 | 375,000 | 3,155,514 | ||||||||||||||||||||
Common stock underlying convertible promissory notes | 9,615,385 | 961,538 | (961,538 | ) | 0 | |||||||||||||||||||
Options authorized and issued | 16,707,757 | 1,670,776 | 1,670,776 | |||||||||||||||||||||
87,451,998 | 8,745,200 | 12,541,424 |
June 30 , 2011 Actual * | After giving effect to the anticipated 10- for -1 reverse stock split June 30 , 2011 | Conversion and Repayment of Convertible Notes | Issuance of Shares for Accrued Unpaid Compensation | Issuance of Shares for Services and Cashless Exercise of Warrants | The Offering | June 30 , 2011 Proforma ** | ||||||||||||||||||||||
Common stock issued and outstanding | 36,095,064 | 3, 609,506 | 474,200 | 166, 971 | 73,968 | 3,750,000 | 8,074,645 | |||||||||||||||||||||
Common stock underlying warrants | 2 8,717,641 | 2,871,764 | (89,231 | ) | 375,000 | 3,157,533 | ||||||||||||||||||||||
Common stock underlying convertible promissory notes | 9,615,385 | 961,538 | (961,538 | ) | 0 | |||||||||||||||||||||||
Options authorized and issued | 17,321,090 | 1,732,109 | 1,727,109 | |||||||||||||||||||||||||
91,749,180 | 9,174,917 | 12,963,287 |
* | on an actual basis as of June 30 , 2011 (as indicated in the first column from the left); and |
** | on a pro forma basis as adjusted (as indicated in the column to the far right) to give effect to the anticipated 10-for-1 reverse stock split, conversion and repayment of convertible notes in connection with the offering, the issuance of shares to our CEO as payment for accrued and unpaid compensation, the issuance of shares to two vendors for services rendered, the exercise of warrants and the issuance of 3,750,000 shares in the offering (excluding the overallotment option and at an assumed public offering price of $4.00 per share). |
Without Over-Allotment | With Over-Allotment | |||||||
Public offering price | $ | $ | ||||||
Underwriting discount and commission to be paid to the underwriter by us for the common stock | ||||||||
Proceeds, before expenses, to us |
1. | The application of accounting principles to specified transactions, either completed or proposed or the type of audit opinion that might be rendered on our financial statements, and neither was a written report provided to us nor was oral advice provided that Cross, Fernandez and Riley, LLP concluded was an important factor considered by us in reaching a decision as to an accounting, auditing or financial reporting issue; or |
2. | Any matter that was either the subject of a disagreement or a reportable event, as each term is defined in Items 304(a)(1)(iv) or (v) of Regulation S-K, respectively. |
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Cross, Fernandez & Riley LLP |
Orlando, Florida March 31, 2011 |
December 31, | ||||||||
2010 | 2009 | |||||||
Restated | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 304,656 | $ | 1,085,628 | ||||
Accounts receivable | 828,632 | 187,434 | ||||||
Other receivables | 59,526 | |||||||
Inventory | 294,069 | 149,986 | ||||||
Prepaid expenses and other current assets | 258,136 | 103,571 | ||||||
Total current assets | 1,745,019 | 1,526,619 | ||||||
Property and equipment, net | 147,911 | 19,383 | ||||||
Other assets: | ||||||||
Deposits | 3,280 | 2,280 | ||||||
Patents, net of accumulated amortization of $112,240 and $107,319 at December 31, 2010 and 2009, respectively | 74,363 | 72,464 | ||||||
Total other assets | 77,643 | 74,744 | ||||||
$ | 1,970,573 | $ | 1,620,746 | |||||
Liabilities and Stockholders’ Deficit | ||||||||
Current liabilities: | ||||||||
Accounts payable, including related party payables of $151,440 and $150,740 at December 31, 2010 and 2009, respectively | $ | 620,196 | $ | 385,955 | ||||
Accrued compensation and related benefits | 1,426,022 | 1,314,356 | ||||||
Accrued expenses, other | 241,861 | 223,597 | ||||||
Current portion of deferred revenue | 647,804 | 292,457 | ||||||
Current portion of notes payable | 50,000 | 150,000 | ||||||
Current portion of notes payable, related party | 1,620,624 | 1,425,624 | ||||||
Total current liabilities | 4,606,507 | 3,791,989 | ||||||
Long-term liabilities: | ||||||||
Long-term portion of notes payable, related party | — | 300,000 | ||||||
Warrant liability | 3,958,318 | 4,577,119 | ||||||
Deferred revenue, net of current portion | 127,840 | 207,696 | ||||||
Total long-term liabilities | 4,086,158 | 5,084,815 | ||||||
Stockholders’ deficit: | ||||||||
Preferred stock; $0.01 par value; 10,000,000 shares authorized; 0 shares issued and outstanding | — | — | ||||||
Common stock; $0.01 par value; 200,000,000 shares authorized; 33,563,428 and 29,352,930 shares issued and 33,306,215 and 29,095,717 shares outstanding at December 31, 2010 and 2009, respectively | 335,635 | 293,530 | ||||||
Capital in excess of par value | 29,852,347 | 27,926,893 | ||||||
Accumulated deficit | (35,637,962 | ) | (34,204,369 | ) | ||||
(5,449,980 | ) | (5,983,946 | ) | |||||
Treasury stock at cost, 257,213 shares | (1,272,112 | ) | (1,272,112 | ) | ||||
Total stockholders’ deficit | (6,722,092 | ) | (7,256,058 | ) | ||||
$ | 1,970,573 | $ | 1,620,746 |
Year Ended December 31, | ||||||||
2010 | 2009 | |||||||
Restated | ||||||||
Revenue: | ||||||||
Sales | $ | 3,260,468 | $ | 1,447,071 | ||||
License fees | 82,000 | 84,144 | ||||||
3,342,468 | 1,531,215 | |||||||
Cost of goods sold | 2,290,041 | 1,071,098 | ||||||
Gross profit | 1,052,427 | 460,117 | ||||||
Expenses: | ||||||||
Research and development expenses, net of government grant proceeds of $99,732 and $0 | 238,182 | 6,600 | ||||||
Selling, general and administrative | 2,693,092 | 3,217,992 | ||||||
5,221,315 | 4,295,690 | |||||||
Loss from operations | (1,878,847 | ) | (2,764,475 | ) | ||||
Other expense (income): | ||||||||
Other (income) | (36,003 | ) | — | |||||
Change in fair value of warrant liability | (618,801 | ) | 3,731,694 | |||||
Interest expense | 209,550 | 621,574 | ||||||
Interest income | — | (667 | ) | |||||
(445,254 | ) | 4,352,601 | ||||||
Net loss | $ | (1,433,593 | ) | $ | (7,117,076 | ) | ||
Net loss per common share, basic and diluted | $ | (0.05 | ) | $ | (0.36 | ) | ||
Weighted average number of common shares, basic and diluted | 29,985,632 | 19,960,150 |
Common Stock | Capital in Excess of Par Value | Accumulated Deficit | Prepaid Services Paid for with Common Stock | Treasury Stock | Total Stockholders’ Deficit | ||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||
Balance, December 31, 2008 | 12,162,398 | 121,624 | 25,253,196 | (28,776,769 | ) | (23,375 | ) | (1,272,112 | ) | (4,697,436 | ) | ||||||||||||||
Issuance of common stock for conversion of notes payable and related accrued interest | 13,553,822 | 135,538 | 2,576,062 | — | — | — | 2,711,600 | ||||||||||||||||||
Issuance of common stock and warrant for services | 344,692 | 3,448 | 105,029 | — | 23,375 | — | 131,852 | ||||||||||||||||||
Stock-based compensation expense | — | — | 1,504,669 | — | — | — | 1,504,669 | ||||||||||||||||||
Issuance of warrants for debt conversion | — | — | 413,008 | — | — | — | 413,008 | ||||||||||||||||||
Issuance of common stock and warrants for cash | 2,490,385 | 24,904 | 613,596 | — | — | — | 638,500 | ||||||||||||||||||
Cumulative effect of change in accounting principle for warrant classification | — | — | (3,623,448 | ) | 1,689,476 | — | — | (1,933,972 | ) | ||||||||||||||||
Exercise of warrants and options | 801,633 | 8,016 | 1,084,781 | — | — | — | 1,092,797 | ||||||||||||||||||
Net loss, restated | — | — | — | (7,117,076 | ) | — | — | (7,117,076 | ) | ||||||||||||||||
Balance, December 31, 2009, restated | 29,352,930 | $ | 293,530 | $ | 27,926,893 | $ | (34,204,369 | ) | $ | — | $ | (1,272,112 | ) | $ | (7,256,058 | ) | |||||||||
Issuance of common stock and warrants for services | 888,692 | 8,887 | 503,993 | — | — | — | 512,880 | ||||||||||||||||||
Issuance of common stock for conversion of notes payable | 1,000,384 | 10,004 | 190,073 | — | — | — | 200,077 | ||||||||||||||||||
Stock based compensation | — | — | 651,032 | — | — | — | 651,032 | ||||||||||||||||||
Issuance of common stock in exchange for debt settlement | 2,321,422 | 23,214 | 580,356 | — | — | — | 603,570 | ||||||||||||||||||
Net loss | — | — | — | (1,433,593 | ) | — | — | (1,433,593 | ) | ||||||||||||||||
Balance, December 31, 2010 | 33,563,428 | $ | 335,635 | $ | 29,852,347 | $ | (35,637,962 | ) | $ | — | $ | (1,272,112 | ) | $ | (6,722,092 | ) |
Years Ended December 31, | ||||||||
2010 | 2009 | |||||||
(restated) | ||||||||
Operating activities | ||||||||
Net loss | $ | (1,433,593 | ) | $ | (7,117,076 | ) | ||
Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||
Depreciation and amortization | 15,276 | 19,826 | ||||||
Amortization of deferred loan costs | — | 1,004 | ||||||
Amortization of discount on convertible notes | — | 144 | ||||||
Amortization of the beneficial conversion feature on convertible notes | — | 29,992 | ||||||
Issuance of common stock, stock options and stock warrants for services and amortization of common stock issued for services | 287,035 | 110,316 | ||||||
Stock based compensation expense | 651,034 | 1,504,669 | ||||||
Issuance of common stock warrants to induce conversion of notes payable | — | 413,008 | ||||||
Change in fair value of warrant liability | (618,801 | ) | 3,731,694 | |||||
(Increase) decrease in: | ||||||||
Accounts receivable | (641,198 | ) | 1,536 | |||||
Other receivables | (59,526 | ) | — | |||||
Inventory | (144,083 | ) | (2,858 | ) | ||||
Prepaid expenses and other current assets | (4,984 | ) | (50,853 | ) | ||||
Increase (decrease) in: | ||||||||
Accounts payable and accrued expenses | 380,835 | 251,014 | ||||||
Accrued compensation and related benefits | 111,666 | 166,967 | ||||||
Deferred revenue | 275,491 | 122,239 | ||||||
Net cash used by operating activities | (1,180,848 | ) | (818,378 | ) | ||||
Investing activities | ||||||||
Increase in patent costs | (6,819 | ) | (39,265 | ) | ||||
Purchase of property and equipment | (113,305 | ) | (1,346 | ) | ||||
Net cash used by investing activities | (120,124 | ) | (40,611 | ) | ||||
Financing activities | ||||||||
Proceeds from issuance of notes payable, related party | 620,000 | 1,565,000 | ||||||
Payments on notes payable, related party | (100,000 | ) | (290,000 | ) | ||||
Proceeds from advance from related party | — | 222,900 | ||||||
Repayments of advance from related party | — | (222,900 | ) | |||||
Issuance of common stock and exercise of warrants for cash | — | 642,750 | ||||||
Net cash provided by financing activities | 520,000 | 1,917,750 | ||||||
Net (decrease) increase in cash and cash equivalents | (780,972 | ) | 1,058,761 | |||||
Cash and cash equivalents, beginning of period | 1,085,628 | 26,867 | ||||||
Cash and cash equivalents, end of period | $ | 304,656 | $ | 1,085,628 | ||||
Cash paid during the year for interest | $ | — | $ | 42,651 |
1. | We are currently holding preliminary discussions with parties who are interested in licensing, purchasing the rights to, or establishing a joint venture to commercialize certain applications of our technology. |
2. | We are seeking growth capital from certain strategic and/or government (grant) related sources. In addition to said capital, these sources may, pursuant to any agreements that may be developed in conjunction with such funding, assist in the product definition and design, roll-out, and channel penetration of our products. As part of this step we will attempt to take advantage of key programs associated with the recently enacted American Recovery and Reinvestment Act of 2009. |
Years Ended December 31, | ||||||
2010 | 2009 | |||||
Dividend rate | 0 | % | 0 | % | ||
Risk free interest rate | 1.96%–3.68 | % | 1.65%–3.49 | % | ||
Expected term | 5 – 6.5 years | 5 – 10 years | ||||
Expected volatility | 97%– 112 | % | 92%– 106 | % |
Fair Value Measurements at December 31, 2010 | ||||||||||||||||
Total carrying value | Quoted prices in active markets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | |||||||||||||
Warrant liability | 3,958,318 | — | — | 3,958,318 |
Warrant Liability | ||||||||
Balance at December 31, 2009 | $ | 4,577,119 | ||||||
Changes in fair value | (618,801 | ) | ||||||
Balance at December 31, 2010 | $ | 3,958,318 |
December 31, | ||||||||
2010 | 2009 | |||||||
Furniture and fixtures | $ | 38,764 | $ | 33,530 | ||||
Computer equipment | 64,305 | 57,344 | ||||||
Demonstration equipment | 104,871 | — | ||||||
Office and lab equipment | 216,248 | 194,429 | ||||||
424,188 | 285,303 | |||||||
Less accumulated depreciation | 276,277 | 265,920 | ||||||
$ | 147,911 | $ | 19,383 |
December 31, | ||||||||
2010 | 2009 | |||||||
Prepaid expenses | $ | 31,070 | $ | 50,335 | ||||
Prepaid insurance | 29,948 | 31,699 | ||||||
Prepaid services paid for with common stock | 172,118 | 21,537 | ||||||
Prepaid loan costs | 25,000 | — | ||||||
$ | 258,136 | $ | 103,571 |
December 31, | ||||||||
2010 | 2009 | |||||||
Accrued expenses, other | $ | 39,850 | $ | 127,768 | ||||
Accrued registration rights penalty | 5,000 | 41,000 | ||||||
Accrued interest | 14,676 | 28,127 | ||||||
Accrued interest, related party | 157,683 | 13,502 | ||||||
Accrued warranty costs | 11,452 | — | ||||||
Contractual obligation | 13,200 | 13,200 | ||||||
$ | 241,861 | $ | 223,597 |
December 31, | ||||||||
2010 | 2009 | |||||||
Convertible notes payable; interest at 9%; $50,000 currently in default; collateralized by the Company’s patents and patent applications | $ | 50,000 | $ | 150,000 | ||||
Convertible notes payable, related party; interest at 9%; collateralized by the Company’s patents and patent applications | — | 175,000 | ||||||
Note payable, related party; 7% interest; unsecured; settled during 2010 | — | 300,000 | ||||||
Note payable, related party; interest at 10% per annum; due April 30, 2011 | 1,000,000 | 1,000,000 | ||||||
Note payable, related party; 10% interest; unsecured; due April 30, 2011 | 620,000 | 250,000 | ||||||
Note payable; related party | 624 | 624 | ||||||
1,670,624 | 1,875,624 | |||||||
Less amounts currently due | 1,670,624 | 1,575,624 | ||||||
Long-term portion | $ | $ | 300,000 |
Exercise Prices | ||||||||||
$0.25 per share | $0.75 per share | |||||||||
Fair value of underlying stock on date of award | $ | $ | 0.09 – 0.19 | $ | $ | 0.51 – 1.49 | ||||
Dividend rate | 0 | % | 0 | % | ||||||
Risk free interest rate | 1.65%–2.58 | % | 2.20%–2.49 | % | ||||||
Expected term | 5 years | 5 years | ||||||||
Expected volatility | 92%–94 | % | 95%–96 | % |
February 2009 | 124,875 | ||||
March 2009 | 999,000 | ||||
April 2009 | 416,250 | ||||
August 2009 | 124,875 | ||||
1,665,00 | |||||
September 2009 | 162,500 | ||||
October 2009 | 412,500 | ||||
575,000 | |||||
Common Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | |||||||||||||
Outstanding at December 31, 2008 | 8,606,556 | $ | 0.26 | 7.58 | $ | 38,294 | ||||||||||
Granted | 4,190,058 | $ | 0.21 | |||||||||||||
Exercised | (25,000 | ) | $ | 0.17 | $ | 3,250 | ||||||||||
Forfeited or expired | (472,732 | ) | $ | 0.58 | ||||||||||||
Outstanding at December 31, 2009 | 12,298,882 | $ | 0.26 | 7.64 | $ | 1,052,839 | ||||||||||
Granted | 2,970,000 | $ | 0.30 | |||||||||||||
Forfeited or expired | (371,125 | ) | $ | 0.32 | ||||||||||||
Outstanding at December 31, 2010 | 14,897,757 | $ | 0.25 | 7.19 | $ | 946,754 | ||||||||||
Exercisable at December 31, 2010 | 13,834,563 | $ | 0.25 | 7.02 | $ | 940,594 | ||||||||||
Exercisable at December 31, 2009 | 11,951,021 | $ | 0.24 | 7.61 | $ | 1,034,594 |
Number of Options | Weighted Average Grant Date Fair Value | |||||||
Nonvested options - December 31, 2008 | 1,276,563 | $ | 0.37 | |||||
Granted | 4,190,058 | $ | 0.31 | |||||
Forfeited | (30,334 | ) | $ | 0.17 | ||||
Vested | (5,088,426 | ) | $ | 0.30 | ||||
Nonvested options - December 31, 2009 | 347,861 | $ | 0.27 | |||||
Granted | 2,970,000 | $ | 0.25 | |||||
Vested | (2,244,663 | ) | $ | 0.25 | ||||
Forfeited | (10,004 | ) | $ | 0.28 | ||||
Nonvested options - December 31, 2010 | 1,063,194 | $ | 0.25 |
Warrants | Remaining Number Outstanding | Weighted Average Remaining Life (Years) | Weighted Average Exercise Price | |||||||||
Warrants-Daily Financing | 197,055 | .98 | $ | 0.55 | ||||||||
Warrants-Additional Financing | 428,637 | 1.70 | $ | 0.40 | ||||||||
Warrants-Robb Trust Note | 50,000 | 1.42 | $ | 0.55 | ||||||||
Warrants-Financing | 14,750,000 | 1.99 | $ | 0.25 | ||||||||
Warrants-Placement Agent Warrants | 793,641 | 2.26 | $ | 0.25 | ||||||||
Warrants-Tangredi | 3,000,000 | 2.25 | $ | 0.36 | ||||||||
Warrants-Ehrenberg | 250,000 | 2.59 | $ | 0.30 | ||||||||
Warrants-Consulting Agreement | 825,000 | 3.77 | $ | 0.31 | ||||||||
Warrants-Note Conversions | 2,302,538 | 3.42 | $ | 0.39 | ||||||||
Warrants-Stock Purchases 2009 | 758,270 | 3.40 | $ | 0.34 | ||||||||
Warrants-Mandelbaum | 50,000 | 3.33 | $ | 0.19 | ||||||||
Warrants-Services | 400,000 | 4.06 | $ | 0.50 | ||||||||
Total | 23,805,141 |
For the Years Ended December 31, | For the Years Ended December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Exercise price | $ | 0.25 | $ | 0.25 | $ | 0.25 | $ | 0.25 | ||||||||
Market value of stock at end of period | $ | 0.29 | $ | 0.30 | $ | 0.29 | $ | 0.30 | ||||||||
Expected dividend rate | N/A | N/A | N/A | N/A | ||||||||||||
Expected volatility | 158% – 165 | % | 112% – 117 | % | 158% – 165 | % | 112% – 117 | % | ||||||||
Risk-free interest rate | 0.61% – 0.82 | % | 1.70% – 2.20 | % | 0.61% – 0.82 | % | 1.70% – 2.20 | % | ||||||||
Expected life in years | 2.00 – 2.58 | 3.00 – 3.58 | 2.00 – 2.58 | 3.00 – 3.58 | ||||||||||||
Shares underlying warrants outstanding classified as liabilities | 15,543,641 | 15,543,641 | 15,543,641 | 15,543,641 |
Total Liabilities As previously Reported | Change | Total Liabilities As Restated | Stockholders’ Deficit As previously Reported | Change | Stockholders’ Deficit As Restated | |||||||||||||||||||
March 31, 2009 | $ | 4,599,317 | $ | 2,080,830 | $ | 6,680,147 | $ | (4,246,075 | ) | $ | (2,080,830 | ) | $ | (6,326,905 | ) | |||||||||
June 30, 2009 | $ | 4,565,431 | $ | 2,425,223 | $ | 6,990,654 | $ | (3,982,146 | ) | $ | (2,425,223 | ) | $ | (6,407,369 | ) | |||||||||
September 30, 2009 | $ | 3,968,231 | $ | 10,774,888 | $ | 14,743,119 | $ | (3,158,106 | ) | $ | (10,774,888 | ) | $ | (13,932,994 | ) | |||||||||
December 31, 2009 | $ | 4,299,685 | $ | 4,577,119 | $ | 8,876,8045 | $ | (2,678,939 | ) | $ | (4,577,1119 | ) | $ | (7,256,058 | ) | |||||||||
March 31, 2010 | $ | 5,117,253 | $ | 6,085,147 | $ | 11,202,400 | $ | (3,058,161 | ) | $ | (6,085,147 | ) | $ | (9,143,308 | ) | |||||||||
June 30, 2010 | $ | 5,165,059 | $ | 4,250,053 | $ | 9,415,112 | $ | (3,094,998 | ) | $ | (4,250,053 | ) | $ | (7,345,051 | ) | |||||||||
September 30, 2010 | $ | 5,147,657 | $ | 4,861,284 | $ | 10,008,941 | $ | (3,428,140 | ) | $ | (4,861,284 | ) | $ | (8,289,424 | ) |
Other Inc (Exp) As previously Reported | Change | Other Inc (Exp) As Restated | Net Loss As previously Reported | Change | Net (Loss) Income As Restated | EPS As previously Reported | EPS As Restated | Other Inc (Exp) As previously Reported | Change | Other Inc (Exp) As Restated | Net Loss As previously Reported | Change | Net (Loss) Income As Restated | EPS As previously Reported | EPS As Restated | |||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2009 | $ | (156,161 | ) | $ | (146,858 | ) | $ | (303,019 | ) | $ | (648,786 | ) | $ | (146,858 | ) | $ | (795,644 | ) | $ | (0.05 | ) | $ | (0.06 | ) | $ | (156,161 | ) | $ | (146,858 | ) | $ | (303,019 | ) | $ | (648,786 | ) | $ | (146,858 | ) | $ | (795,644 | ) | $ | (0.05 | ) | $ | (0.06 | ) | ||||||||||||||||
June 30, 2009 | $ | (95,353 | ) | $ | (344,392 | ) | $ | (439,745 | ) | $ | (344,000 | ) | $ | (344,392 | ) | $ | (688,392 | ) | $ | (0.04 | ) | $ | (0.04 | ) | $ | (95,353 | ) | $ | (344,392 | ) | $ | (439,745 | ) | $ | (344,000 | ) | $ | (344,392 | ) | $ | (688,392 | ) | $ | (0.04 | ) | $ | (0.04 | ) | ||||||||||||||||
September 30, 2009 | $ | (203,771 | ) | $ | (9,438,212 | ) | $ | (9,641,983 | ) | $ | (436,927 | ) | $ | (9,438,212 | ) | $ | (9,875,139 | ) | $ | (0.06 | ) | $ | (0.50 | ) | $ | (203,771 | ) | $ | (9,438,212 | ) | $ | (9,641,983 | ) | $ | (436,927 | ) | $ | (9,438,212 | ) | $ | (9,875,139 | ) | $ | (0.06 | ) | $ | (0.50 | ) | ||||||||||||||||
For the Year Ended December 31, 2009 | $ | (620,907 | ) | $ | (3,731,694 | ) | $ | (4,352,601 | ) | $ | (3,385,382 | ) | $ | (3,731,694 | ) | $ | (7,117,076 | ) | $ | (0.17 | ) | $ | (0.36 | ) | ||||||||||||||||||||||||||||||||||||||||
For the Year Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2009 | $ | (620,907 | ) | $ | (3,731,694 | ) | $ | (4,352,601 | ) | $ | (3,385,382 | ) | $ | (3,731,694 | ) | $ | (7,117,076 | ) | $ | (0.17 | ) | $ | (0.36 | ) | ||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2010 | $ | (46,504 | ) | $ | (1,508,027 | ) | $ | (1,554,531 | ) | $ | (520,038 | ) | $ | (1,508,027 | ) | $ | (2,028,065 | ) | $ | (0.02 | ) | $ | (0.07 | ) | $ | (46,504 | ) | $ | (1,508,027 | ) | $ | (1,554,531 | ) | $ | (520,038 | ) | $ | (1,508,027 | ) | $ | (2,028,065 | ) | $ | (0.02 | ) | $ | (0.07 | ) | ||||||||||||||||
June 30, 2010 | $ | (55,233 | ) | $ | 1,835,094 | $ | 1,779,861 | $ | (624,681 | ) | $ | 1,835,094 | $ | 1,210,413 | $ | (0.02 | ) | $ | 0.04 | $ | (55,233 | ) | $ | 1,835,094 | $ | 1,779,861 | $ | (624,681 | ) | $ | 1,835,094 | $ | 1,210,413 | $ | (0.02 | ) | $ | 0.04 | ||||||||||||||||||||||||||
September 30, 2010 | $ | (55,933 | ) | $ | (611,231 | ) | $ | (667,164 | ) | $ | (555,692 | ) | $ | (611,231 | ) | $ | (1,166,923 | ) | $ | (0.02 | ) | $ | (0.04 | ) | $ | (55,933 | ) | $ | (611,231 | ) | $ | (667,164 | ) | $ | (555,692 | ) | $ | (611,231 | ) | $ | (1,166,923 | ) | $ | (0.02 | ) | $ | (0.04 | ) |
Year ended December 31, | ||||||||
2010 | 2009 | |||||||
Tax benefit at U.S. statutory rate | $ | (487,000 | ) | $ | (2,420,000 | ) | ||
State income tax benefit, net of federal benefit | (52,000 | ) | (258,000 | ) | ||||
Effect of non-deductible expenses | 1,000 | 1,000 | ||||||
Employee stock-based compensation | 221,000 | 536,000 | ||||||
Change in warrant valuation | (210,000 | ) | 1,269,000 | |||||
Other adjustments | 154,000 | 994,000 | ||||||
Change in valuation allowance | 373,000 | (132,000 | ) | |||||
$ | — | $ | — |
December 31, | ||||||||
2010 | 2009 | |||||||
Deferred tax assets (liabilities), current: | ||||||||
Bonus payable | $ | 108,300 | $ | 108,300 | ||||
Accrued deferred compensation payable | 428,300 | 386,300 | ||||||
Stock warrant consideration and other | 84,000 | 49,100 | ||||||
Deferred license revenue | 30,900 | 32,400 | ||||||
Valuation allowance | (651,500 | ) | (576,100 | ) | ||||
$ | — | $ | — | |||||
Deferred tax assets (liabilities), noncurrent: | ||||||||
Deferred license revenue | $ | 48,100 | $ | 77,400 | ||||
Depreciation | 3,400 | 3,400 | ||||||
Net operating loss carryforwards | 7,644,600 | 7,261,000 | ||||||
Valuation allowance | (7,596,100 | ) | (7,341,800 | ) | ||||
$ | — | $ | — |
March 31, 2011 | December 31, 2010 | June 30, 2011 | December 31, 2010 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
Assets | Assets | |||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 1,231,120 | $ | 304,656 | $ | 841,797 | $ | 304,656 | ||||||||
Accounts receivable | 927,984 | 828,632 | ||||||||||||||
Accounts receivable, net of allowance for doubtful accounts of $18,650 and $0 at June 30, 2011 and December 31, 2010, respectively | 807,967 | 828,632 | ||||||||||||||
Other receivables | 93,257 | 59,526 | 69,526 | 59,526 | ||||||||||||
Inventory | 318,077 | 294,069 | 371,970 | 294,069 | ||||||||||||
Deferred offering costs | 293,072 | 175,000 | 547,376 | 175,000 | ||||||||||||
Debt issue costs | 66,910 | 49,807 | — | |||||||||||||
Prepaid expenses and other current assets | 114,409 | 83,136 | 57,916 | 83,136 | ||||||||||||
Total current assets | 3,044,829 | 1,745,019 | 2,746,359 | 1,745,019 | ||||||||||||
Property and equipment, net | 144,074 | 147,911 | 144,914 | 147,911 | ||||||||||||
Other assets: | ||||||||||||||||
Deposits | 2,280 | 3,280 | 2,280 | 3,280 | ||||||||||||
Patents, net of accumulated amortization of $115,438 and $112,240 at March 31, 2011 and December 31, 2010, respectively | 83,181 | 74,363 | ||||||||||||||
Patents, net of accumulated amortization of $120,890 and $112,240 at June 30, 2011 and December 31, 2010, respectively | 79,309 | 74,363 | ||||||||||||||
Total other assets | 84,461 | 77,643 | 81,589 | 77,643 | ||||||||||||
$ | 3,274,364 | $ | 1,970,573 | |||||||||||||
$ | 2,972,862 | $ | 1,970,573 | |||||||||||||
Liabilities and Stockholders’ Deficit | Liabilities and Stockholders’ Deficit | |||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable, including related party payables of $163,638 and $151,440 at March 31, 2011 and December 31, 2010, respectively | $ | 851,026 | $ | 620,196 | ||||||||||||
Accounts payable, including related party payables of $434,437 and $151,440 at June 30, 2011 and December 31, 2010, respectively | $ | 877,239 | $ | 620,196 | ||||||||||||
Accrued compensation and related benefits | 1,442,273 | 1,426,022 | 1,405,606 | 1,426,022 | ||||||||||||
Accrued expenses, other | 292,532 | 241,861 | 268,374 | 241,861 | ||||||||||||
Current portion of deferred revenue | 615,531 | 647,804 | 590,541 | 647,804 | ||||||||||||
Current portion of convertible notes payable | — | 50,000 | — | 50,000 | ||||||||||||
Current portion of notes payable, related party | 620,624 | 1,620,624 | 624 | 1,620,624 | ||||||||||||
Current portion of convertible notes payable, related party net of unamortized discount of $1,382,182 and $0 at March 31, 2011 and December 31, 2010, respectively | 1,117,818 | — | ||||||||||||||
Current portion of convertible notes payable, related party net of unamortized discount of $1,049,432 and $0 at June 30, 2011 and December 31, 2010, respectively | 1,450,568 | — | ||||||||||||||
Total current liabilities | 4,939,804 | 4,606,507 | 4,592,952 | 4,606,507 | ||||||||||||
Long-term liabilities: | ||||||||||||||||
Warrant liability | 6,310,425 | 3,958,318 | 4,616,255 | 3,958,318 | ||||||||||||
Deferred revenue, less current portion | 107,340 | 127,840 | 86,840 | 127,840 | ||||||||||||
Total long-term liabilities | 6,417,765 | 4,086,158 | 4,703,095 | 4,086,158 | ||||||||||||
Stockholders’ deficit: | ||||||||||||||||
Preferred stock; $0.01 par value; 10,000,000 shares authorized; 0 shares issued and outstanding | — | — | — | — | ||||||||||||
Common stock; $0.01 par value; 200,000,000 shares authorized; 33,580,928 and 33,563,428 shares issued and 33,323,715 and 33,306,215 shares outstanding at March 31, 2011 and December 31, 2010, respectively | 335,810 | 335,635 | ||||||||||||||
Common stock; $0.01 par value; 200,000,000 shares authorized; 36,352,277 and 33,563,428 shares issued and 36,095,064 and 33,306,215 shares outstanding at June 30, 2011 and December 31, 2010, respectively | 363,523 | 335,635 | ||||||||||||||
Capital in excess of par value | 31,773,204 | 29,852,347 | 32,713,926 | 29,852,347 | ||||||||||||
Accumulated deficit | (38,920,107 | ) | (35,637,962 | ) | (38,128,522 | ) | (35,637,962 | ) | ||||||||
(6,811,093 | ) | (5,449,980 | ) | (5,051,073 | ) | (5,449,980 | ) | |||||||||
Treasury stock at cost, 257,213 shares | (1,272,112 | ) | (1,272,112 | ) | (1,272,112 | ) | (1,272,112 | ) | ||||||||
Total stockholders’ deficit | (8,083,205 | ) | (6,722,092 | ) | (6,323,185 | ) | (6,722,092 | ) | ||||||||
$ | 3,274,364 | $ | 1,970,573 | |||||||||||||
$ | 2,972,862 | $ | 1,970,573 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(restated) | (restated) | |||||||||||||||
Revenue: | ||||||||||||||||
Sales | $ | 1,103,579 | $ | 989,642 | $ | 1,941,773 | $ | 1,376,424 | ||||||||
License fees | 20,500 | 20,500 | 41,000 | 41,030 | ||||||||||||
1,124,079 | 1,010,142 | 1,982,773 | 1,417,454 | |||||||||||||
Cost of goods sold | 806,674 | 550,196 | 1,507,564 | 871,522 | ||||||||||||
Gross profit | 317,405 | 459,946 | 475,209 | 545,932 | ||||||||||||
Expenses: | ||||||||||||||||
Research and development expenses, net of government grant proceeds of $126,109, $0, 287,473 and $0, respectively | 11,119 | — | 13,155 | — | ||||||||||||
Selling, general and administrative | 792,606 | 1,029,394 | 1,714,903 | 1,588,914 | ||||||||||||
803,725 | 1,029,394 | 1,728,058 | 1,588,914 | |||||||||||||
Loss from operations | (486,320 | ) | (569,448 | ) | (1,252,849 | ) | (1,042,982 | ) | ||||||||
Other expense (income): | ||||||||||||||||
Change in fair value of warrant liability | (1,694,170 | ) | (1,835,094 | ) | 657,937 | (327,066 | ) | |||||||||
Interest expense | 416,899 | 55,233 | 580,438 | 101,736 | ||||||||||||
Interest income | (634 | ) | — | (664 | ) | — | ||||||||||
(1,277,905 | ) | (1,779,861 | ) | 1,237,711 | (225,330 | ) | ||||||||||
Net income (loss) | $ | 791,585 | $ | 1,210,413 | $ | (2,490,560 | ) | $ | (817,652 | ) | ||||||
Net income (loss) per common share, basic | $ | 0.02 | $ | 0.04 | $ | (0.07 | ) | $ | (0.03 | ) | ||||||
Net income (loss) per common share, diluted | $ | 0.02 | $ | 0.03 | $ | (0.07 | ) | $ | (0.03 | ) | ||||||
Weighted average number of common shares, basic | 35,089,169 | 29,800,194 | 34,335,348 | 29,577,797 | ||||||||||||
Weighted average number of common shares, diluted | 56,239,845 | 40,245,491 | 34,335,348 | 29,577,797 |
For the Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
Restated | ||||||||
Revenue: | ||||||||
Sales | $ | 838,194 | $ | 386,782 | ||||
License fees | 20,500 | 20,530 | ||||||
858,694 | 407,312 | |||||||
Cost of goods sold | 700,890 | 321,326 | ||||||
Gross profit | 157,804 | 85,986 | ||||||
Expenses: | ||||||||
Research and development expenses, net of government grant proceeds of $161,364 and $0 | 2,036 | 14,139 | ||||||
Selling, general and administrative | 922,297 | 545,381 | ||||||
Loss from operations | (766,529 | ) | (473,534 | ) | ||||
Other expense (income): | ||||||||
Change in fair value of warrant liability | 2,352,106 | 1,508,027 | ||||||
Interest expense | 163,539 | 46,510 | ||||||
Interest income | (29 | ) | (6 | ) | ||||
(2,515,617 | ) | 1,554,531 | ||||||
Net loss | $ | (3,282,145 | ) | $ | (2,028,065 | ) | ||
Net loss per common share, basic and diluted | $ | (0.10 | ) | $ | (0.07 | ) | ||
Weighted average number of common shares, basic and diluted | 33,573,150 | 29,352,930 |
Common Stock | Capital in Excess of Par Value | Accumulated Deficit | Treasury Stock | Total Stockholders’ Deficit | Common Stock | Capital in Excess of | Accumulated | Treasury | Total Stockholders’ | |||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Par Value | Deficit | Stock | Deficit | |||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2010 | 33,563,428 | $ | 335,635 | $ | 29,852,347 | $ | (35,637,962 | ) | $ | (1,272,112 | ) | $ | (6,722,092 | ) | 33,563,428 | $ | 335,635 | $ | 29,852,347 | $ | (35,637,962 | ) | $ | (1,272,112 | ) | $ | (6,722,092 | ) | ||||||||||||||||||||
Issuance of common stock for services | 17,500 | 175 | 6,300 | — | — | 6,475 | 121,346 | 1,213 | 41,608 | — | — | 42,821 | ||||||||||||||||||||||||||||||||||||
Stock based compensation | — | — | 391,557 | — | — | 391,557 | — | — | 630,096 | — | — | 630,096 | ||||||||||||||||||||||||||||||||||||
Warrant issued with convertible note payable, related party | — | — | 435,240 | — | — | 435,240 | — | — | 435,240 | — | — | 435,240 | ||||||||||||||||||||||||||||||||||||
Beneficial Conversion Feature on convertible note payable, related party | — | — | 1,064,760 | — | — | 1,064,760 | ||||||||||||||||||||||||||||||||||||||||||
Beneficial conversion feature on convertible notes payable, related party | — | — | 1,064,760 | — | — | 1,064,760 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock in exchange for settlement of debt | 2,667,503 | 26,675 | 666,875 | — | — | 693,550 | ||||||||||||||||||||||||||||||||||||||||||
Revaluation of common stock issued to vendors for services | — | — | 23,000 | — | — | 23,000 | — | — | 23,000 | — | — | 23,000 | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | (3,282,145 | ) | — | (3,282,145 | ) | — | — | — | (2,490,560 | ) | — | (2,490,560 | ) | ||||||||||||||||||||||||||||||||
Balance, March 31, 2011 | 33,580,928 | $ | 335,810 | $ | 31,773,204 | $ | (38,920,107 | ) | $ | (1,272,112 | ) | $ | (8,083,205 | ) | ||||||||||||||||||||||||||||||||||
Balance, June 30, 2011 | 36,352,277 | $ | 363,523 | $ | 32,713,926 | $ | (38,128,522 | ) | $ | (1,272,112 | ) | $ | (6,323,185 | ) |
For the Three Months Ended March 31, | For the Six Months Ended June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(restated) | (restated) | |||||||||||||||
Operating activities | ||||||||||||||||
Net loss | $ | (3,282,145 | ) | $ | (2,028,065 | ) | $ | (2,490,560 | ) | $ | (817,652 | ) | ||||
Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||||||||||
Depreciation and amortization | 11,506 | 2,228 | 25,393 | 2,153 | ||||||||||||
Amortization of discount and beneficial conversion feature on notes payable | 117,819 | — | 450,568 | — | ||||||||||||
Issuance of common stock, stock options and stock warrants for services and amortization of common stock issued for services | 25,078 | 80,949 | 87,937 | 163,164 | ||||||||||||
Stock based compensation | 391,557 | 51,520 | 630,096 | 478,548 | ||||||||||||
Change in fair value of warrant liability | 2,352,107 | 1,508,027 | 657,937 | (327,066 | ) | |||||||||||
Increase in allowance for doubtful accounts | 18,450 | — | ||||||||||||||
(Increase) decrease in: | ||||||||||||||||
Accounts receivable | (99,352 | ) | (419,117 | ) | 2,215 | (999,829 | ) | |||||||||
Other receivables | (33,731 | ) | — | (10,000 | ) | — | ||||||||||
Inventory | (24,008 | ) | (58,741 | ) | (77,901 | ) | (96,982 | ) | ||||||||
Prepaid expenses and other current assets | (25,876 | ) | 14,515 | 4,104 | (6,415 | ) | ||||||||||
Increase (decrease) in: | ||||||||||||||||
Accounts payable and accrued expenses | 281,500 | 58,465 | 357,106 | 51,279 | ||||||||||||
Accrued compensation and related benefits | 16,251 | 26,250 | (20,416 | ) | 56,667 | |||||||||||
Deferred revenue | (52,773 | ) | 187,853 | (98,263 | ) | 312,428 | ||||||||||
Net cash used by operating activities | (463,334 | ) | (1,183,705 | ) | ||||||||||||
Net cash used by operating activities | (322,067 | ) | (576,116 | ) | ||||||||||||
Investing activities | ||||||||||||||||
Increase in patent costs | (12,016 | ) | (4,307 | ) | (13,596 | ) | — | |||||||||
Purchase of property and equipment | (4,471 | ) | (5,234 | ) | (13,746 | ) | (10,484 | ) | ||||||||
Net cash used by investing activities | (27,342 | ) | (10,484 | ) | ||||||||||||
Net cash used by investing activities | (16,487 | ) | (9,541 | ) | ||||||||||||
Financing activities | ||||||||||||||||
Proceeds from issuance of notes payable, related party | 1,500,000 | 620,000 | 1,500,000 | 620,000 | ||||||||||||
Payments on notes payable | (50,000 | ) | (75,000 | ) | (50,000 | ) | (100,000 | ) | ||||||||
Payments for debt issue costs and deferred offering costs | (184,982 | ) | — | (422,183 | ) | — | ||||||||||
Net cash provided by financing activities | 1,265,018 | 545,000 | 1,027,817 | 520,000 | ||||||||||||
Net increase (decrease) in cash and cash equivalents | 926,464 | (40,657 | ) | 537,141 | (674,189 | ) | ||||||||||
Cash and cash equivalents, beginning of period | 304,656 | 1,085,628 | 304,656 | 1,085,628 | ||||||||||||
Cash and cash equivalents, end of period | $ | 841,797 | $ | 411,439 | ||||||||||||
Supplemental cash flow information: | ||||||||||||||||
Cash and cash equivalents, end of period | $ | 1,231,120 | $ | 1,044,971 | ||||||||||||
Supplemental cash flow information: | ||||||||||||||||
Cash paid during the year for interest | $ | 16,753 | $ | — | $ | 34,158 | $ | — | ||||||||
Supplemental disclosure of non-cash investing and financing activities: |
1. | Background Information |
2. | Going Concern |
3. | Significant Accounting Policies |
Three Months Ended March 31, 2011 | ThreeMonths Ended March 31, 2010 | Six Months Ended June 30, 2011 | Six Months Ended June 30, 2010 | |||||||||||||
Dividend rate | 0 | % | 0 | % | 0 | % | 0 | % | ||||||||
Risk free interest rate | 2.70 | % | 3.68 | % | 2.70 – 2.93 | % | 2.38% - 2.59 | % | ||||||||
Expected term | 6.5 years | 6.5 years | 6.5 years | 5 – 10 years | ||||||||||||
Expected volatility | 101 | % | 107 | % | 101 - 103 | % | 96% - 107 | % |
• | Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. | ||
• | Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
Fair Value Measurements | ||||||||||||||||
Total carrying value | Quoted prices in active markets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | |||||||||||||
Warrant liability | $ | 4,616,255 | — | — | $ | 4,616,255 |
Fair Value Measurements at March 31, 2011 | ||||||||||||||||
Total carrying value | Quoted prices in active markets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | |||||||||||||
Warrant liability | 6,310,425 | — | — | 6,310,425 |
Warrant Liability | Warrant Liability | |||||||
Balance at December 31, 2010 | $ | 3,958,318 | $ | 3,958,318 | ||||
Changes in fair value | 2,352,107 | 657,937 | ||||||
Balance at March 31, 2011 | $ | 6,310,425 | ||||||
Balance at June 30, 2011 | $ | 4,616,255 |
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
June 30, 2011 | June 30, 2010 | June 30, 2011 | June 30, 2010 | |||||||||||||
Numerator: | (1) | (2) | ||||||||||||||
Net income (loss) to common shareholders | $ | 791,585 | $ | 1,210,413 | $ | (2,490,560 | ) | $ | (817,652 | ) | ||||||
Interest on convertible debentures | 62,500 | 5,625 | — | — | ||||||||||||
Net income (loss) available to common stockholders | $ | 854,085 | $ | 1,216,038 | $ | (2,490,560 | ) | $ | (817,652 | ) | ||||||
Denominator: | ||||||||||||||||
Weighted average basic shares outstanding | 35,089,169 | 29,800,194 | 34,335,348 | 29,577,797 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Convertible debt | 10,363,542 | 981,090 | — | — | ||||||||||||
Stock options | 4,085,153 | 4,617,032 | — | — | ||||||||||||
Stock warrants | 6,701,980 | 4,847,175 | — | — | ||||||||||||
Weighted average fully diluted shares outstanding | 56,239,845 | 40,245,491 | 34,335,348 | 29,577,797 | ||||||||||||
Net income (loss) per common share—Basic | $ | 0.02 | $ | 0.04 | $ | (0.07 | ) | $ | (0.03 | ) | ||||||
Net income (loss) per common share—Diluted | $ | 0.02 | $ | 0.03 | $ | (0.07 | ) | $ | (0.03 | ) |
(1) | For the three months ended June 30, 2011, 13,185,937 stock options and 22,065,661 warrants were excluded as their exercise price was higher than the Company's average stock price for the quarter. |
(2) | For the three months ended June 30, 2010, 10,473,225 stock options and 18,480,428 warrants were excluded as their exercise price was higher than the Company's average stock price for the quarter. |
4. | Notes Payable |
March 31, 2011 | December 31, 2010 | June 30, 2011 | December 31, 2010 | |||||||||||||
Convertible note payable; interest at 9%; collateralized by the Company’s patents and patent applications | $ | — | $ | 50,000 | $ | — | $ | 50,000 | ||||||||
Convertible note payable, related party; interest at 10% per annum; due in full March 22, 2012 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||||
Secured convertible note payable, related party; interest at 10% per annum; due March 22, 2012 | 1,500,000 | — | 1,500,000 | — | ||||||||||||
Note payable, related party; 10% interest; unsecured; due May 31, 2011 | 620,000 | 620,000 | ||||||||||||||
Note payable, related party; 10% interest; unsecured; paid in full | — | 620,000 | ||||||||||||||
Note payable; related party | 624 | 624 | 624 | 624 | ||||||||||||
3,120,624 | 1,670,624 | 2,500,624 | 1,670,624 | |||||||||||||
Less unamortized discount | (1,382,182 | ) | — | (1,049,432 | ) | — | ||||||||||
Less amounts currently due | 1,738,442 | 1,670,624 | ||||||||||||||
Less amounts currently due, net of unamortized discount | 1,451,192 | 1,670,624 | ||||||||||||||
Long-term portion | $ | — | $ | — | $ | — | $ | — | ||||||||
5. | Related Party Transactions |
6. | Stock Options and Warrants |
Common Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | Common Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | |||||||||||||||||||||||||
Outstanding at December 31, 2010 | 14,897,757 | $ | 0.25 | 7.19 | $ | 946,754 | 14,897,757 | $ | 0.25 | 7.19 | $ | 946,754 | ||||||||||||||||||||
Granted | 1,810,000 | $ | 0.30 | — | — | 2,510,000 | $ | 0.33 | ||||||||||||||||||||||||
Outstanding at March 31, 2011 | 16,707,757 | $ | 0.26 | 7.25 | $ | 3,162,959 | ||||||||||||||||||||||||||
Exercisable at March 31, 2011 | 15,138,174 | $ | 0.25 | 6.98 | $ | 2,959,664 | ||||||||||||||||||||||||||
Expired/Forfeited | (136,667 | ) | $ | 0.11 | ||||||||||||||||||||||||||||
Outstanding at June 30, 2011 | 17,271,090 | $ | 0.32 | 7.04 | $ | 1,406,643 | ||||||||||||||||||||||||||
Exercisable at June 30, 2011 | 15,958,937 | $ | 0.32 | 6.86 | $ | 1,326,355 |
Number of Options | Weighted Average Grant Date Fair Value | Number of Options | Weighted Average Grant Date Fair Value | |||||||||||||
Nonvested options - December 31, 2010 | 1,063,194 | $ | 0.25 | 1,063,194 | $ | 0.25 | ||||||||||
Granted | 1,810,000 | $ | 0.25 | 2,510,000 | $ | 0.27 | ||||||||||
Vested | (1,540,416 | ) | $ | 0.25 | (2,261,041 | ) | $ | 0.24 | ||||||||
Forfeited | ||||||||||||||||
Nonvested options - March 31, 2011 | 1,332,778 | $ | 0.25 | |||||||||||||
Nonvested options – June 30, 2011 | 1,312,153 | $ | 0.24 |
Warrants | Remaining Number Outstanding | Weighted Average Remaining Life (Years) | Weighted Average Exercise Price | Remaining Number Outstanding | Weighted Average Remaining Life (Years) | Weighted Average Exercise Price | ||||||||||||||||||
Warrants-Daily Financing | 197,055 | .74 | $ | 0.55 | 197,055 | .49 | $ | 0.55 | ||||||||||||||||
Warrants-Additional Financing | 428,637 | 1.46 | $ | 0.40 | 428,637 | 1.21 | $ | 0.40 | ||||||||||||||||
Warrants-Robb Trust Note | 50,000 | 1.18 | $ | 0.55 | 50,000 | .93 | $ | 0.55 | ||||||||||||||||
Warrants-Financings (2007, 2008 and 2011) | 18,750,000 | 2.43 | $ | 0.29 | 18,750,000 | 2.19 | $ | 0.29 | ||||||||||||||||
Warrants-Placement Agent Warrants | 793,641 | 2.01 | $ | 0.25 | 793,641 | 1.76 | $ | 0.25 | ||||||||||||||||
Warrants-Tangredi | 3,000,000 | 2.01 | $ | 0.36 | 3,000,000 | 1.76 | $ | 0.36 | ||||||||||||||||
Warrants-Ehrenberg | 250,000 | 2.35 | $ | 0.30 | 250,000 | 2.10 | $ | 0.30 | ||||||||||||||||
Warrants-Consulting Agreements | 825,000 | 3.52 | $ | 0.31 | 825,000 | 3.28 | $ | 0.31 | ||||||||||||||||
Warrants-Note Conversions | 2,302,538 | 3.18 | $ | 0.39 | 2,302,538 | 2.93 | $ | 0.39 | ||||||||||||||||
Warrants-Stock Purchases 2009 | 758,270 | 3.15 | $ | 0.34 | ||||||||||||||||||||
Warrants-Stock Purchases | 1,720,770 | 4.00 | $ | 0.40 | ||||||||||||||||||||
Warrants-Mandelbaum | 50,000 | 3.09 | $ | 0.19 | 50,000 | 2.84 | $ | 0.19 | ||||||||||||||||
Warrants-Services | 400,000 | 3.81 | $ | 0.50 | 400,000 | 3.56 | $ | 0.50 | ||||||||||||||||
Total | 27,805,141 | |||||||||||||||||||||||
Tota | 28,767,641 |
7. | Commitments and Contingencies |
8. | Genertec Agreement |
9. | CAST Systems Control Technology |
10. | Derivative Financial Instruments |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
For the Years Ended December 31, | June 30, | June 30, | ||||||||||||||||||||||
2010 | 2009 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||
Exercise price | $ | 0.25 | $ | 0.25 | $ | 0.25 | $ | 0.25 | $ | 0.25 | $ | 0.25 | ||||||||||||
Market value of stock at end of period | $ | 0.44 | $ | 0.40 | $ | 0.37 | $ | 0.30 | $ | 0.37 | $ | 0.30 | ||||||||||||
Expected dividend rate | N/A | N/A | 0 | % | 0 | % | 0 | % | 0 | % | ||||||||||||||
Expected volatility | 164% – 173 | % | 119% – 125 | % | 164 | % | 123% - 137 | % | 164% - 173 | % | 119% - 137 | % | ||||||||||||
Risk-free interest rate | 0.97% – 1.25 | % | 1.60 | % | 0.19% – 0.45 | % | 0.81% – 1.00 | % | 0.19% – 1.25 | % | .81% – 1.60 | % | ||||||||||||
Expected life in years | 1.70 – 2.35 | 2.75 – 3.33 | ||||||||||||||||||||||
Shares underlying warrants outstanding classified as liabilities | 15,543,641 | 15,653,641 |
Total Liabilities As previously Reported | Change | Total Liabilities As Restated | Stockholders’ Deficit As previously Reported | Change | Stockholders’ Deficit As Restated | |||||||||||||||||||
March 31, 2010 | $ | 5,117,253 | $ | 6,085,147 | $ | 11,202,400 | $ | (3,058,161 | ) | $ | (6,085,147 | ) | $ | (9,143,308 | ) | |||||||||
June 30, 2010 | $ | 5,165,059 | $ | 4,250,053 | $ | 9,415,112 | $ | (3,094,998 | ) | $ | (4,250,053 | ) | $ | (7,345,051 | ) | |||||||||
September 30, 2010 | $ | 5,147,657 | $ | 4,861,284 | $ | 10,008,941 | $ | (3,428,140 | ) | $ | (4,861,284 | ) | $ | (8,289,424 | ) |
Other Inc (Exp) As previously Reported | Change | Other Inc (Exp) As Restated | Net Loss As previously Reported | Change | Net (Loss) Income As Restated | EPS As previously Reported | EPS As Restated | |||||||||||||||||||||||||
For the Three Months Ended: | ||||||||||||||||||||||||||||||||
March 31, 2010 | $ | (46,504 | ) | $ | (1,508,027 | ) | $ | (1,554,531 | ) | $ | (520,038 | ) | $ | (1,508,027 | ) | $ | (2,028,065 | ) | $ | (0.02 | ) | $ | (0.07 | ) | ||||||||
June 30, 2010 | $ | (55,233 | ) | $ | 1,835,094 | $ | 1,779,861 | $ | (624,681 | ) | $ | 1,835,094 | $ | 1,210,413 | $ | (0.02 | ) | $ | 0.04 | |||||||||||||
September 30, 2010 | $ | (55,933 | ) | $ | (611,231 | ) | $ | (667,164 | ) | $ | (555,692 | ) | $ | (611,231 | ) | $ | (1,166,923 | ) | $ | (0.02 | ) | $ | (0.04 | ) |
Total Liabilities As previously Reported | Change | Total Liabilities As Restated | Stockholders’ Deficit As previously Reported | Change | Stockholders’ Deficit As Restated | |||||||||||||||||||
March 31, 2010 | $ | 5,117,253 | $ | 6,085,147 | $ | 11,202,400 | $ | (3,058,161 | ) | $ | (6,085,147 | ) | $ | (9,143,308 | ) | |||||||||
June 30, 2010 | $ | 5,165,059 | $ | 4,250,053 | $ | 9,415,112 | $ | (3,094,998 | ) | $ | (4,250,053 | ) | $ | (7,345,051 | ) | |||||||||
September 30, 2010 | $ | 5,147,657 | $ | 4,861,284 | $ | 10,008,941 | $ | (3,428,140 | ) | $ | (4,861,284 | ) | $ | (8,289,424 | ) |
Other Inc (Exp) As previously Reported | Change | Other Inc (Exp) As Restated | Net Loss As previously Reported | Change | Net (Loss) Income As Restated | EPS As previously Reported | EPS As Restated | |||||||||||||||||||||||||
For the Three Months Ended: | ||||||||||||||||||||||||||||||||
March 31, 2010 | $ | (46,504 | ) | $ | (1,508,027 | ) | $ | (1,554,531 | ) | $ | (520,038 | ) | $ | (1,508,027 | ) | $ | (2,028,065 | ) | $ | (0.02 | ) | $ | (0.07 | ) | ||||||||
June 30, 2010 | $ | (55,233 | ) | $ | 1,835,094 | $ | 1,779,861 | $ | (624,681 | ) | $ | 1,835,094 | $ | 1,210,413 | $ | (0.02 | ) | $ | 0.04 | |||||||||||||
September 30, 2010 | $ | (55,933 | ) | $ | (611,231 | ) | $ | (667,164 | ) | $ | (555,692 | ) | $ | (611,231 | ) | $ | (1,166,923 | ) | $ | (0.02 | ) | $ | (0.04 | ) |
11. | Subsequent Events |
SEC Filing Fee | $ | 2,753.75 | $ | 2,803.82 | ||||
FINRA Fee | $ | 2,700 | $ | 2,700 | ||||
AMEX Fee | $ | 40,000 | $ | 40,000 | ||||
Printing Expenses* | $ | 40,000 | $ | 40,000 | ||||
Accounting Fees and Expenses* | $ | 60,000 | $ | 60,000 | ||||
Legal Fees and Expenses* | $ | 275,000 | $ | 275,000 | ||||
Transfer Agent and Registrar Expenses* | $ | 10,000 | $ | 10,000 | ||||
Miscellaneous* | $ | 15,000 | $ | 15,000 | ||||
Total | $ | 445,453.75 | $ | 445,503.82 |
* | Estimated. |
No. | Exhibit | |
1.1 | Form of Underwriting Agreement** | |
3.1 | Certificate of Incorporation of The Dais Corporation filed April 8, 1993 (Incorporated by reference to Exhibit 3.1 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
3.2 | Certificate of Amendment of the Certificate of Incorporation of The Dais Corporation filed February 21, 1997 (Incorporated by reference to Exhibit 3.2 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
3.3 | Certificate of Amendment of the Certificate of Incorporation of The Dais Corporation filed June 25, 1998 (Incorporated by reference to Exhibit 3.3 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
3.4 | Certificate of Amendment of the Certificate of Incorporation of Dais Analytic Corporation filed December 13, 1999 (Incorporated by reference to Exhibit 3.4 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
3.5 | Certificate of Amendment of the Certificate of Incorporation of Dais Analytic Corporation filed September 26, 2000 (Incorporated by reference to Exhibit 3.5 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
3.6 | Certificate of Amendment of the Certificate of Incorporation of Dais Analytic Corporation filed September 28, 2000 (Incorporated by reference to Exhibit 3.6 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
3.7 | Certificate of Amendment of the Certificate of Incorporation of Dais Analytic Corporation filed August 28, 2007 (Incorporated by reference to Exhibit 3.7 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
3.8 | Certificate of Amendment of the Certificate of Incorporation of Dais Analytic Corporation filed March 20, 2008 (Incorporated by reference to Exhibit 3.8 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) |
3.9 | Bylaws of The Dais Corporation (Incorporated by reference to Exhibit 3.9 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
3.10 | Certificate of Amendment of the Certificate of Incorporation of Dais Analytic Corporation filed December 17, 2009 (Incorporated by reference to the exhibits included with the Definitive Proxy Statement Form DEF 14A as filed on October 9, 2009) | |
3.11 | Form of Certificate of Amendment of the Certificate of Incorporation of Dais Analytic Corporation (Incorporated by reference to the exhibits included with the Definitive Proxy Statement Form DEF 14A as filed on October 27, 2010) | |
4.1 | Form of Non-Qualified Stock Option Agreement (Incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
4.2 | Form of Non-Qualified Option Agreement (Incorporated by reference to Exhibit 4.2 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
4.3 | Form of Warrant (Daily Financing) (Incorporated by reference to Exhibit 4.3 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
4.4 | Form of Warrant (Financing) (Incorporated by reference to Exhibit 4.4 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
4.5 | Form of Warrant (Robb Trust Note and Additional Financing) (Incorporated by reference to Exhibit 4.5 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
4.6 | Form of Placement Agent Warrant (Financing) (Incorporated by reference to Exhibit 4.6 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
4.7 | Form of 9% Secured Convertible Note (Financing) (Incorporated by reference to Exhibit 4.7 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
4.8 | Form of Note (Robb Trust Note) (Incorporated by reference to Exhibit 4.8 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
4.9 | Form of Amendment to Note (Robb Trust Note) (Incorporated by reference to Exhibit 4.9 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
4.10 | Form of Warrant (Note Conversion) (Incorporated by reference to the Exhibits 4.1 included with the Current Report on Form 8-K, as filed March 13, 2009) | |
4.11 | Form of Warrant (2009 Purchases) (Incorporated by reference to the Exhibits 4.2 included with the Current Report on Form 8-K, as filed March 13, 2009) | |
4.12 | Unsecured Promissory Note from Gostomski, dated December 8, 2009 (Incorporated by reference to the exhibits included with the Annual Report on Form 10K as filed on March 30, 2010) | |
4.13 | Unsecured Promissory Note from Platinum-Montaur, dated December 17, 2009 (Incorporated by reference to the exhibits included with the Current Report on Form 8-K/A as filed on December 22, 2009) | |
4.14 | Unsecured Promissory Note from Samuels, dated February 19, 2010 (Incorporated by reference to the exhibits included with the Current Report on Form 8-K as filed on February 23, 2010) |
4.15 | Unsecured Promissory Note from RBC Capital Markets - Custodian for Leonard Samuels IRA, dated February 19, 2010. (Incorporated by reference to the exhibits included with the Current Report on Form 8-K as filed on February 23, 2010) | |
4.16 | First Amendment to Unsecured Promissory Note from Platinum-Montaur, dated June 28, 2010 (Incorporated by reference to exhibits included in Quarterly Report on Form 10Q as filed August 16, 2010) | |
4.17 | First Amendment to Unsecured Promissory Note from Samuels, dated June 28, 2010 (Incorporated by reference to exhibits included in Quarterly Report on Form 10Q as filed August 16, 2010) | |
4.18 | First Amendment to Unsecured Promissory Note from RBC Capital Markets- Custodian for Leonard Samuels IRA, dated June 28, 2010 (Incorporated by reference to exhibits included in Quarterly Report on Form 10Q as filed August 16, 2010) | |
4.19 | Second Amendment to Unsecured Promissory Note from Platinum-Montaur, dated September 30, 2010 (Incorporated by reference to exhibits included in Quarterly Report on Form 10Q as filed November 15, 2010) | |
4.20 | Second Amendment to Unsecured Promissory Note from Samuels, dated September 30, 2010 (Incorporated by reference to exhibits included in Quarterly Report on Form 10Q as filed November 15, 2010) | |
4.21 | Second Amendment to Unsecured Promissory Note from RBC Capital Markets- Custodian for Leonard Samuels IRA, dated September 30, 2010 (Incorporated by reference to exhibits included in Quarterly Report on Form 10Q as filed November 15, 2010) | |
4.22 | Third Amendment to Unsecured Promissory Note from Platinum-Montaur, dated December 29, 2010 (Incorporated by reference Exhibit 4.22 to Registration Statement on Form S-1 (File No. 333-172259), as filed February 14, 2011) | |
4.23 | Third Amendment to Unsecured Promissory Note from RBC Capital Markets- Custodian for Leonard Samuels IRA, dated December 31, 2010 (Incorporated by reference Exhibit 4.23 to Registration Statement on Form S-1 (File No. 333-172259), as filed February 14, 2011) | |
4.24 | Form of Non-Qualified Stock Option Agreement – 2009 Long-Term Incentive 2009 Plan – Directors and certain designated employees (Incorporated by reference Exhibit 4.24 to Registration Statement on Form S-1 (File No. 333-172259), as filed February 14, 2011) | |
4.25 | Form of Non-Qualified Option Agreement -2009 Long-Term Incentive 2009 Plan – employees (Incorporated by reference Exhibit 4.25 to Registration Statement on Form S-1 (File No. 333-172259), as filed February 14, 2011) | |
4.26 | Form of Underwriter Warrant | |
4.27 | Amended and Restated Convertible Promissory Note by and between Dais Analytic Corporation and Platinum-Montaur Life Sciences, LLC dated March 22, 2011 (Incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K, as filed March 28, 2011) | |
4.28 | Form of Warrant by and between Dais Analytic Corporation and Investors dated 2007 and 2008. (Incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K, as filed March 28, 2011) | |
4.29 | Amendment to 2007 Warrant by and between Dais Analytic Corporation and Platinum-Montaur Life Sciences, LLC dated March 22, 2011 (Incorporated by reference to Exhibit 10.4 to Current Report on Form 8-K, as filed March 28, 2011) |
4.30 | Amendment to 2009 Warrant by and between Dais Analytic and Platinum-Montaur Life Sciences, LLC dated March 22, 2011 (Incorporated by reference to Exhibit 10.5 to Current Report on Form 8-K, as filed March 28, 2011) | |
4.31 | Stock Purchase Warrant by and between Dais Analytic Corporation and Platinum-Montaur Life Sciences, LLC dated March 22, 2011 (Incorporated by reference to Exhibit 10.6 to Current Report on Form 8-K, as filed March 28, 2011) | |
4.32 | Secured Convertible Promissory Note by and between Dais Analytic and Platinum-Montaur Life Sciences, LLC dated March 22, 2011 (Incorporated by reference to Exhibit 10.8 to Current Report on Form 8-K, as filed March 28, 2011) | |
4.33 | Stock Purchase Warrant by and between Dais Analytic Corporation and Platinum-Montaur Life Sciences, LLC dated March 22, 2011 (Incorporated by reference to Exhibit 10.9 to Current Report on Form 8-K, as filed March 28, 2011) | |
4.34 | Fourth Amendment to Unsecured Promissory Note from Platinum-Montaur, dated February 28, 2011 (Incorporated by reference to Exhibit 4.26 to Annual Report on Form 10-K, as filed March 31, 2011) | |
4.35 | Fourth Amendment to Unsecured Promissory Note from RBC Capital Markets – Custodian for Leonard Samuels IRA, dated February 28, 2011 (Incorporation by reference to Exhibit 4.27 to Annual Report on Form 10-K, as filed March 31, 2011) | |
4.36 | Fifth Amendment to Unsecured Promissory Note from RBC Capital Markets – Custodian for Leonard Samuels IRA, dated April 29, 2011 (Incorporation by reference to Exhibit 4.36 to Quarterly Report on Form 10-Q, as filed May 16, 2011) | |
4.37 | Amendment to 2007 Warrant by and between Dais Analytic Corporation and RBC Capital Markets- Custodian for Leonard Samuels IRA dated May 12, 2011 (Incorporation by reference to Exhibit 4.37 to Quarterly Report on Form 10-Q, as filed May 16, 2011) | |
4.38 | Amendment to 2009 Warrant by and between Dais Analytic Corporation and RBC Capital Markets- Custodian for Leonard Samuels IRA dated May 12, 2011 (Incorporation by reference to Exhibit 4.38 to Quarterly Report on Form 10-Q, as filed May 16, 2011) |
4.39 | Stock Purchase Warrant by and between Dais Analytic Corporation and RBC Capital Markets- Custodian for Leonard Samuels IRA dated May 12, 2011(Incorporation by reference to Exhibit 4.39 to Quarterly Report on Form 10-Q, as filed May 16, 2011) | |
4.40 | Stock and Warrant Purchase Agreement dated May 12, 2011 (Incorporation by reference to Exhibit 4.40 to Quarterly Report on Form 10-Q, as filed May 16, 2011) | |
5.1 | Legal Opinion of Richardson & Patel LLP * | |
10.1 | 2000 Equity Compensation Plan (Incorporated by reference to Exhibit 10.1 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
10.2 | Form of Employee Non-Disclosure and Non-Compete Agreement (Incorporated by reference to Exhibit 10.2 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
10.3 | Amended and Restated Employment Agreement between Dais Analytic Corporation and Timothy N. Tangredi dated July 29, 2008 (Incorporated by reference to Exhibit 10.3 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) |
10.4 | Amended and Restated Employment Agreement between Dais Analytic Corporation and Patricia K. Tangredi dated July 29, 2008 (Incorporated by reference to Exhibit 10.4 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
10.5 | Commercial Lease Agreement between Ethos Business Venture LLC and Dais Analytic Corporation dated March 18, 2005 (Incorporated by reference to Exhibit 10.6 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
10.6 | First Amendment of Lease Agreement between Ethos Business Venture LLC and Dais Analytic Corporation dated November 15, 2005 (Incorporated by reference to Exhibit 10.7 to Registration Statement on Form S-1 (File No. 333- 152940), as filed August 11, 2008) | |
10.7 | Form of Subscription Agreement (Daily Financing) (Incorporated by reference to Exhibit 10.8 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
10.8 | Form of Subscription Agreement (Financing) (Incorporated by reference to Exhibit 10.9 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
10.9 | Form of Registration Rights Agreement (Financing) (Incorporated by reference to Exhibit 10.10 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
10.10 | Form of Secured Patent Agreement (Financing) (Incorporated by reference to Exhibit 10.11 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
10.11 | Placement Agent Agreement between Dais Analytic Corporation and Legend Merchant Group, Inc., dated October 5, 2007 (Incorporated by reference to Exhibit 10.12 to Registration Statement on Form S-1 (File No. 333-152940), as filed August 11, 2008) | |
10.12 | Consulting Agreement between Dais Analytic Corporation and Harold Mandelbaum dated August 12, 2009 (Incorporated by reference to Exhibit 10.12 to Quarterly Report on Form 10-Q, as filed August 14, 2009) | |
10.13 | Exclusive Distribution Agreement, dated August 21, 2009 between the Company and Genertec America, Inc. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 27, 2009) | |
10.14 | Employee Non-Disclosure and Non-Compete Agreement entered into between Judith Norstrud and Dais Analytic Corporation on October 15, 2009 (Incorporated by reference to the exhibits included with the Current Report on Form 8-K, as filed October 16, 2009). | |
10.15 | 2009 Long Term Incentive Plan (Incorporated by reference to the exhibits included with the Definitive Proxy Statement Form DEF14A as filed on October 9, 2009). | |
10.16 | Technical and Sales Agreement between Dais Analytic Corporation, Beijing Jiexun-CAST Systems Control Technology Co., Ltd. and Genertec America, Inc. dated April 8, 2010, incorporated by reference to the exhibits included with the Current Report on Form 8-K, as filed on April 9, 2010. | |
10.17 | Amended and Restated Employment Agreement between Dais Analytic Corporation and Timothy N. Tangredi dated April 11, 2011(Incorporated by reference to exhibit 10.17 to Amendment 1 to Pre-Effective Registration Statement on Form S-1, as filed April 13, 2011). |
10.18 | Amended and Restated Employment Agreement between Dais Analytic Corporation and Patricia K. Tangredi dated April 8, 2011. (Incorporated by reference to exhibit 10.18 to Amendment 1 to Pre-Effective Registration Statement on Form S-1, as filed April 13, 2011). | |
10.19 | Securities Amendment and Exchange Agreement by and between the Dais Analytic Corporation and Platinum-Montaur Life Sciences, LLC dated as of March 22, 2011. (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K, as filed March 28, 2011). | |
10.20 | Note and Warrant Purchase Agreement by and between Dais Analytic Corporation and Platinum-Montaur Life Sciences, LLC dated March 22, 2011. (Incorporated by reference to Exhibit 10.7 to Current Report on Form 8-K /A , as filed | |
10.21 | Patent Security Agreement by and between Dais Analytic Corporation and Platinum-Montaur Life Sciences, LLC dated March 22, 2011. (Incorporated by reference to Exhibit 10.10 to Current Report on Form 8-K /A , as filed | |
10.22 | Second Amendment of Lease Agreement between Ethos Business Venture LLC and Dais Analytic Corporation dated May 23, 2011. | |
10.23 | Amended and Restated Employment Agreement between Dais Analytic Corporation and Timothy N. Tangredi dated May 23, 2001. | |
10.24 | Employment Agreement between Dais Analytic Corporation and Scott G. Ehrenberg dated May 24, 2011. | |
10.25 | Executive Compensation Agreement dated June 17, 2011 between Dais Analytic Corporation and Timothy Tangredi. (Incorporated by reference to Registrant's Registration Statement on Form S-1/A filed on June 22, 2011) | |
10.26 | Executive Compensation Agreement dated September 14, 2011 between Dais Analytic Corporation and Timothy N. Tangredi.** | |
10.27 | Amended and Restated Employment Agreement between Dais Analytic Corporation and Timothy Tangredi dated September 14, 2011 (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K as filed September 15, 2011) | |
14.1 | Code of Ethics (Incorporated by reference to Exhibit 14.1 to Annual Report on Form 10-K, as filed March 31, 2009) | |
16.1 | Letter from Pender Newkirk & Company LLP, Certified Public Accountants, dated April 27, 2009 (Incorporated by reference to Exhibit 16.1 to Form 8-K, as filed April 28, 2009) | |
23.1 | Consent of Cross, Fernandez & Riley LLP, Certified Public Accountants** |
23.2 | Consent of Richardson & Patel LLP. (contained in the opinion filed as Exhibit 5.1) | |
24.1 | Power of Attorney. (Incorporated by reference to signature page of Registration Statement on Form S-1) | |
99.1 | Consent of Lon Bell. ** | |
99.2 | Consent of Rich Rutkowski. ** | |
99. 3 | Consent of Peter Termyn .. ** |
* | To be filed upon Amendment |
** | Filed herewith |
*** | Portions of this exhibit have been omitted pursuant to a request for confidential treatment. |
DAIS ANALYTIC CORPORATION, | |||
a New York corporation | |||
By: | / | ||
Timothy N. Tangredi, | |||
Chief Executive Officer, President & Chairman | |||
(Principal Executive Officer) |
Dated: | By: | /S/ TIMOTHY N. TANGREDI | |||
Timothy N. Tangredi, Chief Executive Officer, President and Chairman | |||||
(Principal Executive Officer) | |||||
By: | /S/ JUDITH C. NORSTRUD | ||||
Judith C. Norstrud, Chief Financial Officer and Treasurer | |||||
(Principal Financial Officer and Accounting Officer) | |||||
Dated: September 19 , 2011 | By: | /S/ ROBERT W. SCHWARTZ | |||
Robert W. Schwartz, Director | |||||
Dated: | By: | /S/ RAYMOND KAZYAKA SR. | |||
Raymond Kazyaka Sr., Director |