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F-1 |
-2- | ||
-3- | ||
· | 10,334,266 shares of our common stock issued in connection with our March 15, 2004 private placement; |
· | 7,750,700 shares of our common stock issuable at a price of $0.11 per share upon the exercise of warrants issued to the Selling Securityholders in our March 15, 2004 private placement; |
· | 500,000 shares of our common stock issuable at a price of $0.10 per share upon the exercise of warrants issued to the placement agents as initiation warrants in connection with our March 15, 2004 private placement; |
· | 1,808,497 shares of our common stock issuable at a price of $0.10 per share upon the exercise of warrants issued to the placement agents as placement agent warrants in connection with our March 15, 2004 private placement; |
· | 640,000 shares of our common stock issuable at a price ranging from $0.13 to $0.15 per share upon the exercise of warrants issued to Strategic Working Capital Fund L.P. in connection with our January 6, 2004 financing. |
Common Stock Offered by Selling Securityholders (includes 10,699,197 shares of common stock underlying warrants held by the Selling Securityholders) | 21,033,463 | |
Common Stock Outstanding before this Offering (includes 10,334,266 shares of the issued and outstanding common stock being offered by the Selling Securityholders)(1) | 84,335,669 | |
Common Stock Outstanding after this Offering (assumes all warrants of the Selling Securityholders to purchase 10,699,197 shares of common stock are exercised) | 95,034,866 | |
Common Stock to be Outstanding after this Offering (assumes allother currently issued and outstanding warrants and options which total 10,912,257, are exercised) | 105,947,123 | |
Use of Proceeds from Sale of Common Stock | We will not receive any proceeds from the sale of the shares of our Common Stock by the Selling Securityholders. | |
Use of Proceeds from Exercise of Warrants | We will receive the exercise price of any warrants that are exercised by the Selling Securityholders. We intend to use any proceeds from exercise of warrants for research and development, product marketing, working capital and other general corporate purposes. | |
NASD OTC Bulletin Board Symbol | NSCT |
-4- | ||
National Scientific Corporation | |||||||||||||
Selected Summary Financial Information | |||||||||||||
Year Ended September 30, | Six Months Ended |
| |||||||||||
|
|
| March 31, 2004 |
| |||||||||
|
| 2001 | 2002 | 2003 | (Unaudited) | ||||||||
Statement of Operations Data: | |||||||||||||
Net Revenues | $ | 882,715 | $ | 2,914 | $ | 63,579 | $ | 74,538 | |||||
Direct cost of revenues | 869,750 | 1,889 | 25,848 | 55,998 | |||||||||
Gross profit | 12,965 | 1,025 | 37,731 | 18,540 | |||||||||
Salaries and benefits | 1,040,777 | 624,069 | 438,244 | 257,395 | |||||||||
Research and development | 1,589,005 | 154,548 | 84,301 | 9,398 | |||||||||
Stock compensation | 2,173,592 | 460,168 | 291,658 | 28,293 | |||||||||
Consulting fees, related party | 422,008 | — | 17,650 | — | |||||||||
Other operating expenses | 1,121,011 | 667,250 | 149,245 | 131,170 | |||||||||
Total costs and expenses | 6,346,393 | 1,906,035 | 981,098 | 426,256 | |||||||||
Income (loss) from operations | (6,333,428 | ) | (1,905,010 | ) | (943,367 | ) | (407,716 | ) | |||||
Other income (expense) net | 98,560 | 21,521 | (9,197 | ) | (10,474 | ) | |||||||
Net loss | $ | (6,234,868 | ) | $ | (1,883,489 | ) | $ | (952,564 | ) | $ | (418,190 | ) | |
Net loss per common share basic and diluted | $ | (0.13 | ) | $ | (0.04 | ) | $ | (0.02 | ) | $ | (0.01 | ) | |
As of September 30, |
| ||||||||||||
As of | |||||||||||||
|
| 2001 |
|
| 2002 |
|
| 2003 |
|
| March 31, 2004 | ||
Balance Sheet Data: | |||||||||||||
Cash and cash equivalents | $ | 604,761 | $ | 1,405 | $ | 17,903 | $ | 549,439 | |||||
Total current assets | 746,119 | 18,752 | 72,729 | 677,238 | |||||||||
Total current liabilities | 756,367 | 840,536 | 673,420 | 801,117 | |||||||||
Long-term debt, net of current portion | — | — | 43,250 | 43,250 | |||||||||
Total stockholders' (deficit) equity | $ | 318,603 | $ | (771,746 | ) | $ | (606,829 | ) | $ | (136,480 | ) |
-5- | ||
-6- | ||
· | Third-party manufacturers might be unable to manufacture our products in the volume and of the quality required to meet customers’ needs; |
· | Our existing and future contract manufacturers may not perform as agreed or may not remain in the contract manufacturing business for the time required to supply our customers; |
· | If any third-party manufacturer makes improvements in the manufacturing process for our products, we may not own, or may have to share, the intellectual property rights to the innovation. |
-7- | ||
-8- | ||
-9- | ||
· | announcements of technological innovations or new commercial products by our competitors or us; |
· | developments concerning proprietary rights, including patents; |
· | regulatory developments in the United States and foreign countries; |
· | economic or other crises and other external factors; |
· | period-to-period fluctuations in our revenues and other results of operations; |
· | changes in financial estimates by securities analysts; and |
· | sales of our common stock. |
-10- | ||
-11- | ||
Market for Common Equity | High | Low | |||||
Fiscal 2004 (Year to Date) | |||||||
Two Months (through May 31, 2004) | $ | 0.190 | $ | 0.120 | |||
Second Quarter (through March 31, 2004) | $ | 0.200 | $ | 0.135 | |||
First Quarter (through December 31, 2003) | $ | 0.205 | $ | 0.130 | |||
Fiscal 2003 | |||||||
Fourth Quarter (through September 30, 2003) | $ | 0.210 | $ | 0.145 | |||
Third Quarter (through June 30, 2003) | $ | 0.225 | $ | 0.095 | |||
Second Quarter (through March 31, 2003) | $ | 0.170 | $ | 0.085 | |||
First Quarter (through December 31, 2002) | $ | 0.220 | $ | 0.065 | |||
Fiscal 2002 | |||||||
Fourth Quarter (through September 30, 2002) | $ | 0.160 | $ | 0.078 | |||
Third Quarter (through June 30, 2002) | $ | 0.205 | $ | 0.140 | |||
Second Quarter (through March 31, 2002) | $ | 0.265 | $ | 0.135 | |||
First Quarter (through December 31, 2001) | $ | 0.390 | $ | 0.220 |
-12- | ||
· | on the OTC Bulletin Board or on such other market on which the common stock may from time to time be trading; |
· | in privately-negotiated transactions; |
· | short sales; or |
· | any combination of the above. |
· | to assist or cooperate with the Selling Securityholders in the offering or disposition of such shares; |
· | to indemnify or hold harmless the holders of any such shares, other than the Selling Securityholders, or any underwriter designated by such holders; |
· | to obtain a commitment from an underwriter relative to the sale of any such shares; |
· | We assume no obligation or responsibility whatsoever to determine a method of disposition for such shares. |
-13- | ||
· | the name of any broker-dealers; |
· | the number of common shares involved; |
· | the price at which the common shares are to be sold; |
· | the commissions paid or discounts or concessions allowed to broker-dealers, where applicable; |
· | that broker-dealers did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, as supplemented; and |
· | any other facts material to the transaction. |
-14- | ||
Number of Shares Offered Under This Offering | |||||||||||||
Number of | |||||||||||||
Number of | Shares | ||||||||||||
Shares | Number of | Offered | |||||||||||
Beneficially | Shares | By Selling | |||||||||||
Owned | Offered | Securityholder | Percent | ||||||||||
Selling | Before | By Selling | Upon Exercise | of | |||||||||
Securityholders | Offering(1) | Securityholder | of Warrants(2) | Class | |||||||||
Source One | 300,000 | 300,000 | 225,000 | * | |||||||||
Stephen M. Abbott & Patricia N. Abbott | 200,000 | 200,000 | 150,000 | * | |||||||||
Rocco J. Brescia Jr. | 220,000 | 220,000 | 165,000 | * | |||||||||
George R. Martin | 100,000 | 100,000 | 75,000 | * | |||||||||
Donald L. Massey | 300,000 | 300,000 | 225,000 | * | |||||||||
Garry Higdem | 200,000 | 200,000 | 150,000 | * | |||||||||
Steven A. Heggelke | 125,000 | 125,000 | 93,750 | * | |||||||||
Keith D. Camp | 200,000 | 200,000 | 150,000 | * | |||||||||
Paul Coplan | 45,455 | 45,455 | 34,091 | * | |||||||||
Greg John Dawe | 700,000 | 700,000 | 525,000 | 1.29% | |||||||||
Daniel E. Larson | 100,000 | 100,000 | 75,000 | * | |||||||||
Murray W. Grigg | 500,000 | 500,000 | 375,000 | * | |||||||||
Joseph B. Ryan Jr. | 100,000 | 100,000 | 75,000 | * | |||||||||
John Igoe | 150,000 | 150,000 | 112,500 | * | |||||||||
Joseph Kump & Joan Kump | 46,000 | 46,000 | 34,500 | * | |||||||||
William M. & Deborah Haskell | 100,000 | 100,000 | 75,000 | * | |||||||||
Richard A. Jacoby | 250,000 | 250,000 | 187,500 | * | |||||||||
James W. Robertson | 100,000 | 100,000 | 75,000 | * | |||||||||
Michael Grabert | 60,000 | 60,000 | 45,000 | * | |||||||||
Andrew Denka | 800,000 | 800,000 | 600,000 | 1.47% | |||||||||
Ronald Danielak | 20,000 | 20,000 | 15,000 | * | |||||||||
Larry D. Hunter | 50,000 | 50,000 | 37,500 | * | |||||||||
David R. Beck | 100,000 | 100,000 | 75,000 | * | |||||||||
John Younts | 100,000 | 100,000 | 75,000 | * | |||||||||
Marc C. McGeever | 50,000 | 50,000 | 37,500 | * | |||||||||
Christopher J. Whyman | 68,182 | 68,182 | 51,136 | * |
Number of Shares Offered Under This Offering | |||||||||||||
Number of | |||||||||||||
Number of | Shares | ||||||||||||
Shares | Number of | Offered | |||||||||||
Beneficially | Shares | By Selling | |||||||||||
Owned | Offered | Securityholder | Percent | ||||||||||
Selling | Before | By Selling | Upon Exercise | of | |||||||||
Securityholders | Offering(1) | Securityholder | of Warrants(2) | Class | |||||||||
Denno Family Limited Partnership | 200,000 | 200,000 | 150,000 | * | |||||||||
Joseph P. Kalinoski | 100,000 | 100,000 | 75,000 | * | |||||||||
Thomas G. Howard | 20,000 | 20,000 | 15,000 | * | |||||||||
Gregg Brune | 50,000 | 50,000 | 37,500 | * | |||||||||
Gregory W. Nelson & Judy C. Nelson | 100,000 | 100,000 | 75,000 | * | |||||||||
Michael Lusk | 100,000 | 100,000 | 75,000 | * | |||||||||
Dorothy Cox Paris Q-Tip Trust | 30,000 | 30,000 | 22,500 | * | |||||||||
David E. Hallberg | 20,000 | 20,000 | 15,000 | * | |||||||||
Philip W. Madow & Amber D. Madow | 65,000 | 65,000 | 48,750 | * | |||||||||
Graham Richards & Mireya Richards | 100,000 | 100,000 | 75,000 | * | |||||||||
Kim D. Biggs & Kimberly S. Biggs | 20,000 | 20,000 | 15,000 | * | |||||||||
Govin T. Rajan | 50,000 | 50,000 | 37,500 | * | |||||||||
Gary Meteer | 45,455 | 45,455 | 34,091 | * | |||||||||
Rock II, LLC | 500,000 | 500,000 | 375,000 | * | |||||||||
Hargopal Singh | 50,000 | 50,000 | 37,500 | * | |||||||||
Patrick R. Discepola | 12,000 | 12,000 | 9,000 | * | |||||||||
Mark L. Merhar | 10,000 | 10,000 | 7,500 | * | |||||||||
Thomas Webber | 20,000 | 20,000 | 15,000 | * | |||||||||
Michael J. Maloney | 100,000 | 100,000 | 75,000 | * | |||||||||
SRG Capital, LLC | 300,000 | 300,000 | 225,000 | * | |||||||||
Gerard Caviston | 250,000 | 250,000 | 187,500 | * | |||||||||
Gordon Gregoretti | 200,000 | 200,000 | 150,000 | * | |||||||||
Hugh W. Richardson | 90,909 | 90,909 | 68,182 | * | |||||||||
Gregory C. Herr & Carol Herr | 30,000 | 30,000 | 22,500 | * | |||||||||
Thomas J. Banholzer | 90,909 | 90,909 | 68,182 | * | |||||||||
Gerald H. Negley | 50,000 | 50,000 | 37,500 | * | |||||||||
John R. Lower | 90,909 | 90,909 | 68,182 | * | |||||||||
Gerald L. Meyr | 140,000 | 140,000 | 105,000 | * | |||||||||
Gary L. Willoughby & Sarah Willoughby | 200,000 | 200,000 | 150,000 | * | |||||||||
Kevin T. Crofton | 100,000 | 100,000 | 75,000 | * | |||||||||
Manish Gupta & Charu Gupta | 20,000 | 20,000 | 15,000 | * | |||||||||
Herman David Overbeeke | 250,000 | 250,000 | 187,500 | * |
Number of Shares Offered Under This Offering | |||||||||||||
Number of | |||||||||||||
Number of | Shares | ||||||||||||
Shares | Number of | Offered | |||||||||||
Beneficially | Shares | By Selling | |||||||||||
Owned | Offered | Securityholder | Percent | ||||||||||
Selling | Before | By Selling | Upon Exercise | of | |||||||||
Securityholders | Offering(1) | Securityholder | of Warrants(2) | Class | |||||||||
Paul Mikkola & Pamela Mikkola | 50,000 | 50,000 | 37,500 | * | |||||||||
Raymond A. Fox | 37,000 | 37,000 | 27,750 | * | |||||||||
William A. Weeks | 50,000 | 50,000 | 37,500 | * | |||||||||
John Pirillo | 200,000 | 200,000 | 150,000 | * | |||||||||
M.O. Hess & Martha S. Hess | 50,000 | 50,000 | 37,500 | * | |||||||||
Jeffrey R. Freeman | 50,000 | 50,000 | 37,500 | * | |||||||||
Daniel Bettencourt | 20,000 | 20,000 | 15,000 | * | |||||||||
Matthew J. Rund | 100,000 | 100,000 | 75,000 | * | |||||||||
Hartley D. Blaha | 100,000 | 100,000 | 75,000 | * | |||||||||
Michael Lauria | 181,818 | 181,818 | 136,364 | * | |||||||||
Stuart Bunting | 100,000 | 100,000 | 75,000 | * | |||||||||
David D. Le Norman | 95,000 | 95,000 | 71,250 | * | |||||||||
William R. Seybold | 50,000 | 50,000 | 37,500 | * | |||||||||
Suman T. Patel & Shobhana Patel | 50,000 | 50,000 | 37,500 | * | |||||||||
Ron Lucas | 91,000 | 91,000 | 68,250 | * | |||||||||
Richard Sahagian | 20,000 | 20,000 | 15,000 | * | |||||||||
Nancy Elaine Mc Govern | 136,400 | 136,400 | 102,300 | * | |||||||||
Iqbal Dar | 45,500 | 45,500 | 34,125 | * | |||||||||
James C. Collings | 27,275 | 27,275 | 20,456 | * | |||||||||
Michael Bray & Mary A. Bray | 55,000 | 55,000 | 41,250 | * | |||||||||
Michael A. Mohr & Denise A. Mohr | 100,000 | 100,000 | 75,000 | * | |||||||||
Paul E. Meyr Revocable Living Trust | 140,000 | 140,000 | 105,000 | * | |||||||||
Robert Marino | 50,000 | 50,000 | 37,500 | * | |||||||||
Douglas Spangler | 45,454 | 45,454 | 34,091 | * | |||||||||
Gerrard A. Rutter & Gillian T. Rutter | 100,000 | 100,000 | 75,000 | * | |||||||||
Strategic Working Capital Fund(4) | 640,000 | * | |||||||||||
Richard F. Sands | 950,000 | * | |||||||||||
Wayde Walker | 303,069 | * | |||||||||||
Kevin Wilson | 30,000 | * | |||||||||||
Richard Brewster | 30,000 | * | |||||||||||
Rafael Vasquez | 30,000 | * | |||||||||||
Matthew Eitner | 30,000 | * |
Number of Shares Offered Under This Offering | |||||||||||||
Number of | |||||||||||||
Number of | Shares | ||||||||||||
Shares | Number of | Offered | |||||||||||
Beneficially | Shares | By Selling | |||||||||||
Owned | Offered | Securityholder | Percent | ||||||||||
Selling | Before | By Selling | Upon Exercise | of | |||||||||
Securityholders | Offering(1) | Securityholder | of Warrants(2) | Class | |||||||||
Matthew Richard McGovern Living TrustDated 7/28/2000, c/o Matthew R. McGovern – Trustee | 377,250 | * | |||||||||||
Nathaniel Clay | 20,000 | * | |||||||||||
William Poon | 20,000 | * | |||||||||||
Shraga Faskowitz | 20,000 | * | |||||||||||
Richard Michalski | 10,000 | * | |||||||||||
Brian Smith | 10,000 | * | |||||||||||
James Ahern | 10,000 | * | |||||||||||
Scott Kenneth Steele | 10,000 | * | |||||||||||
Anthony Miller | 10,000 | * | |||||||||||
Alan Feldman | 40,000 | * | |||||||||||
Charles Savage | 151,226 | * | |||||||||||
David Bloom | 10,000 | * | |||||||||||
Matthew E. Donohue | 10,000 | * | |||||||||||
David Roth | 10,500 | * | |||||||||||
Thomas Gaito | 3,804 | * | |||||||||||
Kent Mitchell | 10,000 | * | |||||||||||
Ian O’Brien Rupert | 10,000 | * | |||||||||||
Jonathan Gutman | 15,000 | * | |||||||||||
Michael R. Hamblett | 93,823 | * | |||||||||||
Anthony J. Spatacco Jr. | 46,912 | * | |||||||||||
Starboard Capital Markets, LLC | 46,913 | * | |||||||||||
Subtotal by Share and Warrant Category | 10,334,266 | 10,334,266 | 10,699,197 | ||||||||||
Grand Total (All Shares & Shares Underlying Warrants) | 21,033,463 | 22.13% |
* | Less than 1%. |
(1) | Includes 10,334,266 shares of our outstanding common stock issued in connection with our March 15, 2004 private placement of units. |
-18- | ||
(2) | Includes the following: (i) 7,750,700 Investor warrants to purchase our common stock, dated April 8, 2004, to various purchasers in our March 15, 2004 private placement of units; (ii) 500,000 Initiation warrants, dated February 9, 2004, issued in conjunction with National Scientific's March 15, 2004 private placement, to Richard F. Sands and Wayde Walker, employees of Casimir Capital L.P., and the Matthew Richard McGovern Living Trust Dated 7/28/2000, c/o Matthew R. McGovern – Trustee (Matthew R. McGovern is an employee of Casimir Capital); (iii) 1,808,497 Placement Agent warrants to purchase our common stock, dated April 8, 2004, to employees of our employees of our Placement Agent, Casimir Capital L.P. or employees of their associated firm Starboard Capital LLC , in conjunction with our March 15, 2004 private placement of units; and (iv) 640,000 warrants to purchase common stock , dated January 6, 2004, to Strategic Working Capital Fund L.P., in conjunction with National Scientific’s financing January 2004. |
(3) | Based on 95,034,866 shares outstanding, which assumes that all warrants of the Selling Securityholders to purchase 10,699,197 shares of common stock are exercised. |
(4) | All securities held by persons listed in this table from this row and below are beneficially held by employees of our Placement Agent, Casimir Capital L.P., other than Michael R. Hamblett and Anthony J. Spatacco Jr., who are employees of Starboard Capital LLC., and Starboard Capital LLC, which is a limited liability company, and Strategic Working Capital Fund L.P., which is a limited partnership. |
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-21- | ||
-22- | ||
-23- | ||
-24- | ||
-25- | ||
-26- | ||
-27- | ||
-28- | ||
-29- | ||
-30- | ||
-31- | ||
· | improved accuracy of GPS will lead to an increase in the functions of devices using GPS; |
· | additional functions capable of being installed in devices addressing GPS applications; |
· | increased efficiencies in being able to track valuable assets; |
· | the ability to provide relevant information (e.g. traffic reports, weather reports, location of stores and restaurants relative to the location of the vehicle) to occupants of passenger vehicles; |
· | the ongoing miniaturization of technology products; and |
· | the trend toward combining navigation, communications and information technologies in a single device for use in vehicles. |
-32- | ||
· | “Product Name” refers to the device we described in the section just above; |
· | “Proof on Concept Prototype Built” means that we produced early samples in a laboratory or test facility to demonstrate the concept of the product’s viability in a limited fashion. These early prototypes are not useful for commercial sale without additional research and development, and will likely not be available for testing by third parties; |
· | “Pre-Production Prototype Tested and Available” means a form of the product was created and tested that would be directly useful for commercial sale, should we decide to manufacture it on a large enough scale, and that interested third parties may receive samples from us that they can fully test in their own environment, should they so desire; |
· | “Design Available for Licensing from Us” means that we either hold patent rights or other trade secret rights to create this product, and that we are able and willing to enter into agreements with other parties for them to license from us these rights for their use; |
· | “Production Device Available for Sale” means that either we or another third party under license to use is manufacturing this product currently, and is offering it for general sale in the marketplace today. |
-34- | ||
|
|
|
| Pre-Production |
|
| Design |
|
| Production |
| ||
|
|
| Proof of |
|
| Prototype |
|
| Available |
|
| Device |
|
|
|
| Concept |
|
| Tested |
|
| for Licensing |
|
| Available |
|
Product Name |
|
| Prototype Built |
|
| & Available |
|
| From Us |
|
| For Sale | |
Gotcha!® | Complete |
|
| Complete |
|
| Yes |
|
| Yes |
| ||
WiFi Tracker™ |
|
| Complete |
|
| Complete |
|
| Yes |
|
| Yes |
|
Followit™ |
|
| Complete |
|
| Complete |
|
| No(1) |
| Yes |
| |
IBUS™ |
|
| Complete |
|
| Complete |
|
| Yes |
|
| Yes |
|
Lobo Tracking Software™ |
|
| Complete |
|
| Complete |
|
| Yes |
|
| No(2) | |
Shuttlefinder™ |
|
| Complete |
|
| Complete |
|
| Yes |
|
| No |
|
StationMaster™ |
|
| Complete |
|
| Complete |
|
| Yes |
|
| No |
|
Tracker III™(4) |
|
| Complete |
|
| No(3) |
| Yes |
|
| No |
| |
StarPilot™ |
|
| Complete |
|
| Complete |
|
| Yes |
|
| No |
|
StarPilot™ Sentinel |
|
| Complete |
|
| No |
|
| No |
|
| No |
|
UrbanTracker IIK™ |
|
| Complete |
|
| No |
|
| Yes |
|
| No |
(1) | Followit™ is sold by us under a non-exclusive sales and license agreement from Followit AB. of Sweden. See “Strategic Relationships Including Marketing Firms, Material Suppliers, and Distributors.” |
(2) | Lobo™ software is part of an overall tracking solution, and we do not offer it for sale as a standalone product, only as a licensed product or as part of our tracking service solution combined with other products, such as Followit™ or Tracker III™. |
(3) | We are in the final stages of integrating a GSM cellular telephone module to transmit data to a remote location into our pre-production prototype. We estimate that this integration will be completed June or July 2004. |
(4) | Tracker III™ is used as the platform for the design of the TrakJack™ product for Positus Corporation. TrackJack™ is a Minnesota trademark of Positus Corporation. |
-35- | ||
-36- | ||
Product Name | Use and Function of Product | |
Heterojunction Bipolar Transistor | Used in the manufacture of digital circuits found in devices such as cellular phones, personal computers and automotive circuitry. Transistors provide electronic control over current flow, and are a part of many electronic circuits. Heterojunction bipolar transistors are used most frequently in power amplifiers, radio frequency integrated circuits and other circuits. | |
Monolithic Inductor | Used in a wide range of electronic circuits for telecommunications applications. The inductor’s most common application is as a component of a radio frequency circuit used to manipulate radio waves into certain other electrical signals. The inductor does this, usually in conjunction with a capacitor, by producing an amplified current when stimulated by a specific frequency of radio signal. | |
Distributed Amplifier | Used in all electronic products that require some level of power increase such as telecommunications, microwave, internet communications, automotive and bio-medical products as well as automated manufacturing products. | |
TMOS® Memory | Used in digital computing devices such as microcomputers and workstations and battery powered devices such as personal data appliances and cellular phones that require a memory function. | |
Mode Dielectric Resonator | Used in many applications including microwave oscillators, narrowband microwave filters, radar detectors, speed guns, automatic door openers, cellular portable phones and global positioning satellites. The resonator’s most common application is as a component of a radio frequency circuit used to manipulate radio waves into certain other electrical signals. The resonator does this by producing a current of predictable size when stimulated by a specific frequency of radio signal. | |
High Frequency Wireless Transceiver | Allows the transmission and reception of radio waves and is used in a variety of wireless devices. |
-37- | ||
Expected | ||||
Patent | ||||
Expiration | ||||
Product Name | Summary of Patent Information | Date | ||
Heterojunction Bipolar Transistor | On September 29, 1997, we filed a U.S. Patent application for a Heterojunction Bipolar Transistor (HBT). U.S. Patent 5,912,481 was issued for this device on June 15, 1999. We were also successful in our Continuation in Process application on this device, as the United States Patent and Trademark Office issued us a patent on January 9, 2001 under U.S. Patent 6,171,920, covering intellectual property required to manufacture this transistor. The assignment of this patent to us is recorded at USPTO at reel no: 0111356, frame 0934. | Sept. 2017 | ||
Monolithic Inductor | On October 31, 1997, we filed a U.S. Patent application for a Monolithic Inductor. The U.S. Patent Office issued a Notice of Allowance for this application on September 7, 1999. U.S. Patent 6,013,939 was issued for this device on January 11, 2000. We were also successful in our Continuation in Process application on this device, as the United States Patent and Trademark Office issued us a patent on August 28, 2001 under U.S. Patent 6,281,778. The assignments for these patents to us are recorded directly on the issued patent from the USPTO. | October 2017 | ||
Distributed Amplifier | On July 10, 1998, we filed a U.S. Patent application for a Distributed Amplifier. The U.S. Patent Office issued a Notice of Allowance on this application on September 29, 1999. U.S. Patent 6,008,694 was received for this device on December 28, 1999. On May 23, 2001, we a filed a U.S. Patent application for a Monolithic Balanced RF Power Amplifier, another version of this product. U.S. Patent 6,424,227 was issued for this device on July 23, 2002.The assignments for these patents to us have recorded directly on the issued patents from the USPTO. | July 2018 | ||
TMOS® Memory | On December 17, 1997, we filed a U.S. Patent application for a High Performance N-Channel Metal-Oxide-Semiconductor (NMOS) Static Random Access Memory (SRAM). U.S. Patent 6,104,631 was received for this device on August 15, 2000. We were also successful in our Continuation in Process application on this device, as the United States Patent and Trademark Office issued us a patent on October 9, 2001 under U.S. Patent 6,301,147. The assignment of these patents to us is recorded directly on the issued patents from the USPTO. | December 2017 | ||
Mode Dielectric Resonator | On June 18, 1998, we filed a U.S. Patent application for a Mode Dielectric Resonator. The U.S. Patent Office issued a Notice of Allowance for this application on August 1, 2000. The U.S. Patent and Trademark Office issued us U.S. Patent 6,169,467 for this device on January 2, 2001. The assignment of this patent to us is recorded at USPTO at reel number: 011358, frame 0462. | June 2018 | ||
High Frequency Wireless Transceiver | Patent Pending. | Pending |
-38- | ||
Pre-Production | Design | Production | ||||||
Proof of | Prototype | Available | Device | |||||
Concept | Tested | for Licensing | Available | |||||
Product Name | Prototype Built | & Available | From Us | For Sale | ||||
TMOS® Memory | Complete | No | Yes | No | ||||
Mode Dielectric Resonator | Complete | Complete | Yes | No | ||||
High Frequency Wireless Transceiver | Complete | No | Yes | No | ||||
Distributed Amplifier | Complete | No | Yes | No | ||||
Monolithic Inductor | Complete | No | Yes | No | ||||
Heterojunction Bipolar Transistor | No | No | Yes | No |
-39- | ||
-40- | ||
-41- | ||
-42- | ||
Name | Age | Position | ||
Michael A. Grollman | 43 | CEO, Chairman of the Board of Directors | ||
Graham L. Clark | 49 | President, Director, Secretary | ||
Gregory Szabo | 50 | Director (Outside) |
-43- | ||
-44- | ||
-45- | ||
Number of |
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| ||||
|
| Common Shares |
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| Percent of | |
|
| Beneficially |
|
| Outstanding | |
Name and Address of Beneficial Owner(1) |
|
| Owned(2) |
| Shares | |
Michael A. Grollman | 4,066,000 | (3) | 4.8% | |||
Graham L. Clark | 1,451,667 | (4) | 1.7% | |||
Gregory Szabo | 97,252 | (5) | 0.1% | |||
All executive officers and directors as a group (3 persons) | 5,614,919 | 6.6% |
(1) | The business address for all directors and officers is c/o National Scientific Corporation, 14455 North Hayden Road, Suite 202, Scottsdale, Arizona 85260-6947. |
(2) | A person is deemed to be the beneficial owner of securities that can be acquired within 60 days from the date set forth above through the exercise of any option, warrant or right. Shares of Common Stock subject to options, warrants or rights that are currently exercisable or exercisable within 60 days are deemed outstanding for computing the percentage of the person holding such options, warrants or rights, but are not deemed outstanding for computing the percentage of any other person. The amounts and percentages are based upon the approximately 84,335,669 shares of Common Stock outstanding as June 10, 2004. |
(3) | Includes 1,050,000 shares underlying currently exercisable stock options and warrants, and 2,750,000 shares of restricted Common Stock subject to substantial risk of forfeiture. |
(4) | Includes 326,667 shares underlying currently exercisable stock options and warrants and 1,000,000 shares of restricted Common Stock subject to substantial risk of forfeiture. |
(5) | Includes 40,000 shares underlying currently exercisable stock options and warrants and 57,252 shares of restricted Common Stock subject to substantial risk of forfeiture. |
· | vote separately or as a single class with the common stock and/or other series of preferred stock; |
· | have more or less voting power per share than that possessed by the common stock or other series of preferred stock; and |
· | vote on specified matters presented to the shareholders or on all of such matters or upon the occurrence of any specified event or condition. |
-48- | ||
-49- | ||
-50- | ||
-51- | ||
-52- | ||
Summary Compensation Table | |||||||||||||||||||||||||
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| Long-Term Compensation | |||||||||||||||||
Annual Compensation | Awards | Payouts | |||||||||||||||||||||||
Other | Restricted | Securities | |||||||||||||||||||||||
Annual | Stock | Underlying | LTIP | All other | |||||||||||||||||||||
Salary | Bonus | Compensation | Award(s) | Options/ | Payout | Compensation | |||||||||||||||||||
Name and Principal Position | Year | ($)(1) | ($) | ($) | ($) (2) | SARs (#) | ($) | ($)(3) | |||||||||||||||||
Michael A. Grollman | 2003 | 64,640 | — | — | — | — | — | 70,360 | |||||||||||||||||
CEO, Chairman(4) | 2002 | 138,000 | — | — | 78,750 | — | — | 42,000 | |||||||||||||||||
2001 | 172,500 | — | — | 165,000 | — | — | — | ||||||||||||||||||
Graham L. Clark | 2003 | 69,639 | — | — | — | — | — | 50,360 | |||||||||||||||||
President, Director(5) | 2002 | 104,400 | — | — | 63,000 | — | — | 15,600 | |||||||||||||||||
2001 | 120,000 | — | — | — | — | — | — | ||||||||||||||||||
Lou L. Ross | 2003 | — | — | — | 17,650 | — | — | — | |||||||||||||||||
Former CEO & | 2002 | 86,000 | — | 12,700 | 4,500 | — | — | — | |||||||||||||||||
Chairman (retired)(6) | 2001 | 120,465 | — | — | — | — | — | — | |||||||||||||||||
Sam H Carr | 2003 | — | — | 32,362 | 32,362 | — | — | — | |||||||||||||||||
Former CFO(7) | 2002 | 160,275 | — | 34,166 | 194,441 | — | — | — | |||||||||||||||||
2001 | 158,075 | — | 138,000 | 296,075 | — | — | — |
(1) | Unpaid wages in this table are subject to Agreements with listed persons that allow for interest of approximately prime rate plus 2% to accrue on those unpaid wages until paid. These accruals for interest are shown as approximate through fiscal year-end September 2003. |
(2) | Stock grants included in this column are for common stock valued at 90% of the closing sales price for such shares on the date of grant. Closing sales price at fiscal year end September 2002 was approximately $0.07 per share, and closing sales price at fiscal year end September 2003 was approximately $0.15 per share. |
(3) | Includes unpaid salary forgone at the election of executive officers Grollman and Clark pursuant to a registrant program under which stock, stock-based or other forms of non-cash compensation may be received by a named executive in lieu of a portion of annual compensation earned in a covered fiscal year. |
-53- | ||
(4) | For 2003 salary of $70,360 was not paid in cash, but deferred to a future period. Estimated interest of $2,932 on this unpaid amount is not included above. For 2002 salary of $42,000 was not paid in cash, but deferred to a future period. Estimated interest of $1,500 on this unpaid amount is not included above. Subsequent to year end of September 2002, Mr. Grollman exchanged $10,000 of this deferred salary for a B Unit in our November 2002 Private Placement Offering for 125,000 shares of restricted stock and 100,000 common stock purchase warrants exercisable at a price of $0.50 per share, thus reducing 2002 unpaid wages for that year to $33,500. Other Compensation for 2002 also includes $78,750 for common stock grants subject to risk of forfeiture if calendar 2004 sales do not meet or exceed key targets, and in exchange for salary reduction in calendar year 2003 of $60,000 (See Note 2 a bove and Employment Agreements below). Also subsequent to fiscal 2003 year-end, Mr. Grollman deferred substantially all his October and November salary of $10,000 each month to a future period, and this amount of $19,900 remains unpaid. From September 2002 Mr. Grollman’s share of contributions to the Company’s health insurance program of approximately $6,600 were deducted from the balance of wages owing, leaving as of the end of December 2003,unpaid wages of approximately $117,000, accrued vacation pay of approximately $60,000 and accrued interest of approximately $7,000 for a combined total of approximately $184,000. |
(5) | For 2003 salary of $50,360 was not paid in cash, but deferred to a future period. $1,929 estimated interest on this unpaid amount. For 2002 salary of $15,600 was not paid in cash, but deferred to a future period. Estimated interest of $1,929 on this unpaid amount is not included above. Subsequent to year end September 2002, Mr. Clark exchanged $10,000 of deferred salary for a B Unit in our November 2002 Private Placement Offering for 125,000 shares of restricted stock and 100,000 common stock purchase warrants exercisable at a price of $0.50 per share. Other compensation for 2002 also includes $63,000 for restricted common stock grants subject to risk of forfeiture if 2004 sales do not meet or exceed key targets (See Note 2 above and Employment Agreements below). Also subsequent to September 30, 2003 year end, Mr. Clark deferred substantially all his October and November salary of $10, 000 each month to a future period, and this amount of $19,900 remains unpaid. From September 2002 Mr. Clark’s share of contributions to our health insurance program of approximately $7,900 were deducted from the balance of wages owing, leaving as of the end of December 2003, unpaid wages of approximately $68,000, accrued vacation pay of approximately $19,000 and accrued interest of approximately $3,000 for a combined total of approximately $90,000. |
(6) | Other Compensation for 2003 and 2002 includes common stock grants paid as board service fees. Mr. Ross resigned as an employee in January of 2002 and as a director in September 2003. |
(7) | Other Compensation for 2003 includes $32,362 of contractor fees for services rendered in the six months prior to March 2003, of which approximately $17,083 remains unpaid. For 2002 salary of $30,173 was not paid in cash, but deferred to a future period, and remains unpaid, including all accrued vacation through July 2002, plus an estimated $1,500 in interest through September 30, 2002. Other Compensation for 2002 includes $34,166 of contractor fees for services rendered in August and September of 2002, of which $21,337 remains unpaid. Subsequent to year ending September 2002, $10,000 of other deferred contractor fees was exchanged by Mr. Carr for an A Unit in our November 2002 Private Placement Offering for 250,000 shares of common stock and warrants to purchase 100,000 shares of common stock at a price of $0.30 per share. Other Compensation in 2001 for Mr. Carr includes the value of o ptions granted at an exercise price below the market value of the stock on the date of grant, as well as options granted to Mr. Carr during his tenure as a contactor of us rather than an employee. Such options contracts have been valued using the Black-Scholes model for the purposes of this table. Mr. Carr resigned in July 2002 as an employee and a director. |
-54- | ||
Long-Term Incentive Plans - Awards in Last Fiscal Year |
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| Estimated Future Payouts Under Non- | |||||||||||
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| Stock Priced-Based Plans | |||||||||||
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| Number of | Performance or | ||||||||||||||
Shares |
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| Other Period Until |
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| Threshold |
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| Target |
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| Maximum |
| |||
Name |
|
| (#)(1) |
| Maturation or Payout |
|
| ($ or #) |
| ($ or #) |
| ($ or #) | ||||
Michael A. Grollman(2) | 1,250,000 | Dec 2004 | ||||||||||||||
Graham L. Clark(3) | 1,000,000 | Dec 2004 |
(1) | All grants in this table are based on our fiscal year 2002 stock retainage program. This program was implemented by our board in September 2002, and shares were granted at that time. Actual issuance of shares for the named executive participants took place in January of 2003. Our board allocated approximately $150,000 in common stock from this Stock Retainage Program pool of shares, to be granted to key employees during the year, subject to National Scientific exceeding sales growth objectives and expense reduction objectives, and subject to the employees remaining with us through the next 15 months, or longer, if the awards were not earned after 15 months. Failure to meet these objectives under the plan can result in the forfeiture by staff of some or all of the stock grants by all participants. These goals were the same for all plan participants, which included other non-executives, as well the named executives. These goals were not met in calendar year 2003. In January of 2004, our board extended this program into 2004, and set new sales growth objectives for the year at a level 50% higher than the previous year’s program, giving plan participants an additional year to fully earn this stock grant. |
(2) | Mr. Grollman was granted 750,000 shares of stock from this Stock Retainage Program pool of shares, subject to National Scientific achieving in excess of $400,000 in sales in calendar year 2004. Mr. Grollman was granted an additional 500,000 shares of stock under this program, subject to sales exceeding $1,500,000 for calendar year 2004. |
(3) | Mr. Clark was granted 500,000 shares of stock from our Stock Retainage Program pool of shares discussed above, subject to National Scientific achieving in excess of $400,000 in sales in calendar year 2004. Mr. Clark was granted an additional 500,000 shares of stock under this program, subject to sales exceeding $1,500,000 for calendar year 2004. |
-55- | ||
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Page | |
For Fiscal Years Ending September 30, 2002 and 2003 (audited) | |
F-2 | |
F-3 | |
F-4 | |
F-5 | |
F-11 | |
F-13 | |
For the Six Month Period Ending March 31, 2004 (unaudited) | |
F-25 | |
F-26 | |
F-27 | |
F-28 | |
F-29 |
F-1 | ||
F-2 | ||
2003 | 2002 | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 17,903 | $ | 1,405 | |||
Trade receivables, net of reserve of $8,169 at September 30, 2003 | 28,200 | 1,631 | |||||
Inventory | 9,700 | 14,916 | |||||
Other assets | 16,926 | 800 | |||||
Total current assets | 72,729 | 18,752 | |||||
Property and equipment, net | 32,081 | 45,007 | |||||
Deposits | 5,031 | 5,031 | |||||
$ | 109,841 | $ | 68,790 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | |||||||
Current Liabilities: | |||||||
Accounts payable | $ | 185,725 | $ | 368,952 | |||
Accrued expenses | 457,695 | 396,505 | |||||
Deposits | 20,000 | — | |||||
Notes payable | 10,000 | 75,079 | |||||
Total current liabilities | 673,420 | 840,536 | |||||
Notes payable, net of current portion | 43,250 | — | |||||
Total liabilities | 716,670 | 840,536 | |||||
Commitments and contingencies | — | — | |||||
Shareholders’ equity (deficit): | |||||||
Preferred stock, par value $0.10; 4,000,000 shares authorized,and no shares issued or outstanding | — | — | |||||
Common stock, par value $0.01; 120,000,000 shares authorized,and shares issued 70,633,819 and 51,587,062 outstandingat September 30, 2003 and 2002, respectively | 706,338 | 515,871 | |||||
Additional paid-in capital | 20,444,733 | 19,517,719 | |||||
Accumulated deficit | (21,757,900 | ) | (20,805,336 | ) | |||
Total shareholders' equity (deficit) | (606,829 | ) | (771,746 | ) | |||
$ | 109,841 | $ | 68,790 | ||||
F-3 | ||
Development | ||||||||||
2003 | 2002 | Stage | ||||||||
Revenues | $ | 63,579 | $ | 2,914 | $ | 949,208 | ||||
Cost of Sales | 25,848 | 1,889 | 897,487 | |||||||
Gross profit | 37,731 | 1,025 | 51,721 | |||||||
Costs and expenses | ||||||||||
Salaries and benefits | 438,244 | 624,069 | 2,176,796 | |||||||
Research and development | 84,301 | 154,548 | 3,713,135 | |||||||
Stock compensation | 291,658 | 460,168 | 3,080,694 | |||||||
Consulting fees, related party | 17,650 | — | 8,175,973 | |||||||
Other | 149,245 | 667,250 | 2,407,303 | |||||||
Total costs and expenses | 981,098 | 1,906,035 | 19,553,901 | |||||||
Loss from operations | (943,367 | ) | (1,905,010 | ) | (19,502,180 | ) | ||||
Other income (expense) | ||||||||||
Interest and other income | — | 584 | 178,972 | |||||||
Gain on settlement | — | 89,403 | 89,403 | |||||||
Interest expense | (9,197 | ) | (1,874 | ) | (34,268 | ) | ||||
Loss on disposal of assets | — | (2,405 | ) | (30,960 | ) | |||||
Loss on impairment of equipment | — | (64,187 | ) | (64,187 | ) | |||||
(9,197 | ) | 21,521 | 138,960 | |||||||
Loss before income taxes | (952,564 | ) | (1,883,489 | ) | (19,363,220 | ) | ||||
Income tax expense | — | — | — | |||||||
Net loss | $ | (952,564 | ) | $ | (1,883,489 | ) | $ | (19,363,220 | ) | |
Net loss per common share,basic and diluted | $ | (0.02 | ) | $ | (0.04 | ) | ||||
Weighted average number ofshares outstanding | 62,758,349 | 49,626,954 | ||||||||
F-4 | ||
Common Stock | Preferred Stock | |||||||||||||||||||||
Number | Number | Additional | ||||||||||||||||||||
of | Par | of | Par | Paid-In | Accumulated | |||||||||||||||||
Shares | Value | Shares | Value | Capital | Deficit | Total | ||||||||||||||||
Balance, September 30, 2002 | 51,587,062 | $ | 515,871 | — | $ | — | $ | 19,517,719 | $ | (20,805,336 | ) | $ | 771,746 | |||||||||
Stock issued for services@ $0.17 | 946,270 | 9,462 | — | — | 152,913 | — | 162,375 | |||||||||||||||
Exercise of options | 637,153 | 6,372 | — | — | 22,686 | — | 29,058 | |||||||||||||||
Stock options granted | — | — | — | — | 60,733 | — | 60,733 | |||||||||||||||
Debt equity swap | 788,334 | 7,883 | — | — | 66,232 | — | 74,115 | |||||||||||||||
Private placement @$0.04 to $0.08 | 14,125,000 | 141,250 | — | — | 528,750 | — | 670,000 | |||||||||||||||
Stock retainage program | 2,550,000 | 25,500 | — | — | 95,700 | — | 121,200 | |||||||||||||||
Net loss | — | — | — | — | — | (952,564 | ) | (952,564 | ) | |||||||||||||
Balance, September 30, 2003 | 70,633,819 | $ | 706,338 | — | $ | — | $ | 20,444,733 | $ | (21,757,900 | ) | $ | (606,829 | ) | ||||||||
F-5 | ||
Common Stock | Preferred Stock | |||||||||||||||||||||
Number | Number | Additional | ||||||||||||||||||||
of | Par | of | Par | Paid-In | Accumulated | |||||||||||||||||
Shares | Value | Shares | Value | Capital | Deficit | Total | ||||||||||||||||
Balance, September 30, 2001 | 47,367,498 | $ | 473,675 | — | $ | — | $ | 18,766,775 | $ | (18,921,847 | ) | $ | 318,603 | |||||||||
Stock issued for services@ $0.306 | 100,000 | 1,000 | — | — | 29,600 | — | 30,600 | |||||||||||||||
Issuance of stock underequity lineof credit @$0.12 to $0.27 | 2,122,064 | 21,221 | — | — | 393,603 | — | 414,824 | |||||||||||||||
Exercise of warrants | 770,500 | 7,705 | — | — | 84,755 | — | 92,460 | |||||||||||||||
Exercise of options | 1,477,000 | 14,770 | — | — | 154,762 | — | 169,532 | |||||||||||||||
Loan repayment by officer | (250,000 | ) | (2,500 | ) | — | — | (97,500 | ) | — | (100,000 | ) | |||||||||||
Grants of options andwarrants, net | — | — | — | — | 185,724 | — | 185,724 | |||||||||||||||
Net loss | — | — | — | — | — | (1,883,489 | ) | (1,883,489 | ) | |||||||||||||
Balance, September 30, 2002 | 51,587,062 | $ | 515,871 | — | $ | — | $ | 19,517,719 | $ | (20,805,336 | ) | $ | (771,746 | ) | ||||||||
F-6 | ||
Common Stock | Preferred Stock | |||||||||||||||||||||
Number | Number | Additional | ||||||||||||||||||||
of | Par | of | Par | Paid-In | Accumulated | |||||||||||||||||
Shares | Value | Shares | Value | Capital | Deficit | Total | ||||||||||||||||
Balance, September 30, 2000 | 47,195,768 | $ | 471,958 | — | $ | — | $ | 15,086,920 | $ | (12,686,979 | ) | $ | 2,871,899 | |||||||||
Stock issued for services | ||||||||||||||||||||||
Stock issued for services@ $1.66 | 100,000 | 1,000 | — | — | 164,600 | — | 165,600 | |||||||||||||||
Stock issued for services @ $1.55 | 15,000 | 150 | — | — | 23,070 | — | 23,220 | |||||||||||||||
Stock issued for services@ $4.32 | 5,000 | 50 | — | — | 21,550 | — | 21,600 | |||||||||||||||
Stock issued for services@ $1.32 | 75,000 | 750 | — | — | 98,475 | — | 99,225 | |||||||||||||||
Stock issued for services@ $0.51 | 10,000 | 100 | — | — | 5,030 | — | 5,130 | |||||||||||||||
Exercise of warrantsand options | 1,291,730 | 12,917 | — | — | 1,278,813 | — | 1,291,730 | |||||||||||||||
Amortization of stockcompensation | — | — | — | — | 3,712,500 | — | 3,712,500 | |||||||||||||||
Exchange for stock options | (1,325,000 | ) | (13,250 | ) | — | — | (2,424,750 | ) | — | (2,438,000 | ) | |||||||||||
Common stock optionsexercisable | — | — | — | — | 800,567 | — | 800,567 | |||||||||||||||
Net loss | — | — | — | — | — | (6,234,868 | ) | (6,234,868 | ) | |||||||||||||
Balance, September 30, 2001 | 47,367,498 | $ | 473,675 | — | $ | — | $ | 18,766,775 | $ | (18,921,847 | ) | $ | 318,603 | |||||||||
F-7 | ||
Common Stock | Preferred Stock | |||||||||||||||||||||
Number |
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| Additional | ||||||||||||||
of | Par |
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| of |
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| Par |
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| Paid-In |
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| Accumulated | |||||||||
Shares | Value |
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| Shares |
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| Value |
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| Capital |
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| Deficit |
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| Total | ||||||
Balance, September 30, 1999 | 36,544,289 | $ | 365,443 | — | $ | — | $ | 3,678,315 | $ | (4,111,680 | ) | $ | (67,922 | ) | ||||||||
Stock issued for services | ||||||||||||||||||||||
Price per share ranged | ||||||||||||||||||||||
$0.18 to $0.85 | 775,000 | 7,750 | — | — | 397,620 | — | 405,370 | |||||||||||||||
$1.74 to $2.70 | 606,797 | 6,067 | — | — | 1,071,028 | — | 1,077,095 | |||||||||||||||
$3.26 to $4.50 | 139,000 | 1,390 | — | — | 457,884 | — | 459,274 | |||||||||||||||
$5.12 to $6.92 | 236,832 | 2,369 | — | — | 1,411,591 | — | 1,413,960 | |||||||||||||||
$7.43 to $8.80 | 1,060,000 | 10,600 | — | — | 7,929,921 | — | 7,940,521 | |||||||||||||||
Exercise of warrantsand options | 3,440,250 | 34,403 | — | — | 3,151,997 | — | 3,186,400 | |||||||||||||||
Private placement ofcommon stock | ||||||||||||||||||||||
Shares issued for: | ||||||||||||||||||||||
$0.11 | 2,430,000 | 24,300 | — | — | 245,700 | — | 270,000 | |||||||||||||||
$0.25 | 360,000 | 3,600 | — | — | 86,400 | — | 90,000 | |||||||||||||||
$0.40 | 975,000 | 9,750 | — | — | 380,250 | — | 390,000 | |||||||||||||||
Stock converted by director’sfamily member | 1,128,600 | 11,286 | — | — | (11,286 | ) | — | — | ||||||||||||||
Common stock to collateralizeloan - retired | (500,000 | ) | (5,000 | ) | — | — | — | — | (5,000 | ) | ||||||||||||
Deferred stock compensation | — | — | — | — | (3,712,500 | ) | — | (3,712,500 | ) | |||||||||||||
Net loss | — | — | — | — | — | (8,575,299 | ) | (8,575,299 | ) | |||||||||||||
Balance, September 30, 2000 | 47,195,768 | $ | 471,958 | — | $ | — | $ | 15,086,920 | $ | (12,686,979 | ) | $ | 2,871,899 | |||||||||
F-8 | ||
Common Stock | Preferred Stock | |||||||||||||||||||||
Number |
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| Par |
|
| of |
|
| Par |
|
| Paid-In |
|
| Accumulated |
|
|
| ||
|
| Shares |
|
| Value |
|
| Shares |
|
| Value |
|
| Capital |
|
| Deficit |
|
| Total |
| |
Balance, September 30, 1998 | 25,331,849 | $ | 253,318 | 15,000 | $ | 1,500 | $ | 2,823,491 | $ | (3,167,225 | ) | $ | (88,916 | ) | ||||||||
Stock issued for services | ||||||||||||||||||||||
Price per share ranged | ||||||||||||||||||||||
$0.09 to $0.18 | 3,020,000 | 30,200 | — | — | 528,239 | — | 558,439 | |||||||||||||||
$0.20 to $0.29 | 145,000 | 1,450 | — | — | 33,110 | — | 34,560 | |||||||||||||||
Preferred stock offering | — | — | 47,000 | 4,700 | 230,300 | — | 235,000 | |||||||||||||||
Exercise of warrants and options | 496,000 | 4,960 | — | — | 27,490 | — | 32,450 | |||||||||||||||
Private placement ofcommon stock | 400,000 | 4,000 | — | — | 96,000 | — | 100,000 | |||||||||||||||
Conversion of preferred tocommon stock | 6,200,000 | 62,000 | (62,000 | ) | (6,200 | ) | (55,800 | ) | — | — | ||||||||||||
Common stock issued to collateralize loan | 500,000 | 5,000 | — | — | — | — | 5,000 | |||||||||||||||
Stock converted by director’sfamily member | 451,440 | 4,515 | — | — | (4,515 | ) | — | — | ||||||||||||||
Net loss | — | — | — | — | — | (944,455 | ) | (944,455 | ) | |||||||||||||
Balance, September 30, 1999 | 36,544,289 | $ | 365,443 | — | $ | — | $ | 3,678,315 | $ | (4,111,680 | ) | $ | (67,922 | ) | ||||||||
F-9 | ||
Common Stock | Preferred Stock | ||||||||||||||||||||||||
Number |
|
|
|
| Number |
|
|
|
| Additional |
|
|
|
| Development |
|
|
| |||||||
|
|
| of |
|
| Par |
|
| of |
|
| Par |
|
| Paid-In |
|
| Accumulated |
|
| Stage |
|
|
| |
|
| Shares |
|
| Value |
|
| Shares |
|
| Value |
|
| Capital |
|
| Deficit |
|
| Deficit |
|
| Total |
| |
Balance, October 1, 1997 | 17,847,292 | $ | 178,473 | — | $ | — | $ | 2,160,780 | $ | (2,394,680 | ) | $ | — | $ | (55,427 | ) | |||||||||
Stock issued for services | 3,487,557 | 34,875 | — | — | 335,473 | — | — | 370,348 | |||||||||||||||||
Private placement of preferred stock | — | — | 49,500 | 4,950 | 242,550 | — | — | 247,500 | |||||||||||||||||
Exercise of warrants and options | 547,000 | 5,470 | — | — | 100,888 | — | — | 106,358 | |||||||||||||||||
Conversion of preferred to common stock | 3,450,000 | 34,500 | (34,500 | ) | (3,450 | ) | (31,050 | ) | — | — | — | ||||||||||||||
Contributed capital | — | — | — | — | 14,850 | — | — | 14,850 | |||||||||||||||||
Net loss | — | — | — | — | — | — | (772,545 | ) | (772,545 | ) | |||||||||||||||
Balance, September 30, 1998 | 25,331,849 | $ | 253,318 | 15,000 | $ | 1,500 | $ | 2,823,491 | $ | (2,394,680 | ) | $ | (772,545 | ) | $ | (88,916 | ) | ||||||||
F-10 | ||
Development | ||||||||||
2003 | 2002 | Stage | ||||||||
Cash flows from operating activities: | ||||||||||
Net loss | $ | (952,564 | ) | $ | (1,883,489 | ) | $ | (19,363,220 | ) | |
Adjustments to reconcile net loss to net cash used inoperating activities: | ||||||||||
Non cash transactions | ||||||||||
Depreciation | 12,926 | 22,847 | 65,196 | |||||||
Loss on disposal of assets | — | 2,405 | 30,960 | |||||||
Impairment loss on equipment | — | 64,187 | 64,187 | |||||||
Stock and options issued for services, net | 344,308 | 301,495 | 11,582,712 | |||||||
Decrease (increase) in inventory | 5,216 | 5,084 | (9,700 | ) | ||||||
(Increase) decrease in deferred offering costs | — | 107,844 | (85,171 | ) | ||||||
Decrease (increase) in receivables | (26,569 | ) | — | 103,431 | ||||||
Decrease (increase) in other assets | (16,126 | ) | 13,896 | (13,017 | ) | |||||
Increase (decrease) in accounts payable and accrued expenses | (69,751 | ) | 439,090 | 673,126 | ||||||
Net cash (used in) operating activities | (702,560 | ) | (926,641 | ) | (6,951,496 | ) | ||||
Cash flows from investing activities: | ||||||||||
Acquisition of property and equipment | — | — | (153,692 | ) | ||||||
Repayment of loans | — | — | 200,000 | |||||||
Proceeds from the sale of furniture and equipment | — | 1,390 | 6,050 | |||||||
Loans issued | — | — | (400,000 | ) | ||||||
Net cash (used in) provided by investing activities | — | 1,390 | (347,642 | ) | ||||||
Cash flows from financing activities: | ||||||||||
Draws on the line of credit | — | — | 430,000 | |||||||
Loan from (to) officer | — | 75,079 | 65,079 | |||||||
Repayment of notes payable | — | — | (110,000 | ) | ||||||
Repayment of line of credit | — | (430,000 | ) | (430,000 | ) | |||||
Repayment of capital lease obligations | — | — | (1,819 | ) | ||||||
Proceeds from the exercise of options | 29,058 | 169,532 | 198,590 | |||||||
Proceeds from the exercise of warrants | — | 92,460 | 92,460 | |||||||
Proceeds from equity line of credit | — | 414,824 | 414,824 | |||||||
Proceeds from the issuance of preferred stock | — | — | 482,500 | |||||||
Deposits from private placement | 20,000 | — | 20,000 | |||||||
Proceeds from issuance of common stock | 670,000 | — | 6,151,789 | |||||||
Net cash provided by financing activities | 719,058 | 321,895 | 7,313,423 | |||||||
Net (decrease) increase in cash and cash equivalents | 16,498 | (603,356 | ) | 14,285 | ||||||
Cash and cash equivalents, beginning of period | 1,405 | 604,761 | 3,618 | |||||||
Cash and cash equivalents, end of period | $ | 17,903 | $ | 1,405 | $ | 17,903 | ||||
Supplementary Disclosure of Cash Flow Information | ||||||||||
Cash paid for interest | $ | 3,000 | $ | 1,874 | $ | 25,474 | ||||
Cash paid for income taxes | $ | — | $ | — | $ | 50 | ||||
F-11 | ||
F-12 | ||
F-13 | ||
F-14 | ||
F-15 | ||
2003 | 2002 | ||||||
Computer equipment | $ | 58,806 | $ | 58,806 | |||
Office furniture | 12,507 | 12,507 | |||||
71,313 | 71,313 | ||||||
Less: accumulated depreciation | 39,232 | 26,306 | |||||
$ | 32,081 | $ | 45,007 | ||||
F-16 | ||
2003 | 2002 | ||||||
Net (loss) | $ | (952,564 | ) | $ | (1,883,489 | ) | |
Weighted average shares: | |||||||
Average shares outstanding | 62,758,349 | 49,626,954 | |||||
Effect of diluted shares | — | — | |||||
Average Shares outstanding,adjusted for dilutive effect | 62,758,349 | 49,626,954 | |||||
(Loss) per share - basic | $ | (0.02 | ) | $ | (0.04 | ) | |
(Loss) per share - diluted | $ | (0.02 | ) | $ | (0.04 | ) | |
2003 | 2002 | ||||||
Employee options | 3,329,757 | 3,582,839 | |||||
Warrants | 7,412,201 | 412,201 | |||||
Potential common equivalents | 10,741,958 | 3,995,040 | |||||
F-17 | ||
For the Years Ended September 30, 2003 and 2002
Year ending September 30, | Amount | |||
2004 | $ | 60,250 | ||
2005 | 5,031 | |||
$ | 65,281 | |||
2003 |
|
| 2002 | ||||
Tax Benefit of net operating loss carry-forwards and start up costs | $ | 5,779,000 | $ | 5,515,000 | |||
Valuation allowance | (5,779,000 | ) | (5,515,000 | ) | |||
$ | — | $ | — | ||||
2003 |
|
| 2002 | ||||
Expected federal and state tax recovery at 40% | $ | (381,000 | ) | $ | (755,000 | ) | |
Non-deductible stock compensation | 117,000 | 20,000 | |||||
(264,000 | ) | (735,000 | ) | ||||
Tax benefits not realized - valuation allowance | 264,000 | 735,000 | |||||
Realized tax benefit | $ | — | $ | — | |||
F-18 | ||
F-19 | ||
F-20 | ||
|
|
| Weighted |
|
| Weighted |
| |||
|
| Number |
|
| Average |
|
| Average |
| |
|
| of |
|
| Exercise |
|
| Fair |
| |
|
| Shares |
|
| Price |
|
| Value | ||
Options Outstanding, September 30, 2001 | 1,534,501 | $ | 1.81 | $ | 0.15 | |||||
Granted | 3,654,162 | 0.24 | 0.24 | |||||||
Exercised | (1,477,000 | ) | 0.11 | 0.11 | ||||||
Canceled | (128,824 | ) | 0.71 | 0.02 | ||||||
Options Outstanding, September 30, 2002 | 3,582,839 | $ | 1.97 | $ | 0.01 | |||||
Options Outstanding September 30, 2002 | 3,582,839 | $ | 1.97 | $ | 0.01 | |||||
Granted | 1,144,081 | 0.10 | 0.10 | |||||||
Exercised | (637,153 | ) | 0.05 | 0.10 | ||||||
Expired | (760,010 | ) | 5.45 | 0.01 | ||||||
Options Outstanding, September 30, 2003 | 3,329,757 | $ | 0.90 | $ | 0.06 | |||||
Number of |
|
| Exercise |
|
|
| ||||
|
| Shares |
|
| Price |
|
| Expires | ||
Outstanding at September 30, 2001 | 1,500,000 | $ | 0.12 |
|
| Jan-04 | ||||
Exercised | (770,500 | ) | ||||||||
Expired | (729,500 | ) | ||||||||
New issues | 412,201 | 1.67 |
|
| Nov-04 |
| ||||
Outstanding at September 30, 2002 | 412,201 | |||||||||
New issues | 4,800,000 | 0.30 |
|
| Dec-04 |
| ||||
200,000 | 0.50 |
|
| Dec-04 | ||||||
1,000,000 | 0.35 |
|
| Jun-04 | ||||||
1,000,000 | 0.50 |
|
| Jun-04 |
| |||||
Outstanding at September 30, 2003 | 7,412,201 | |||||||||
F-21 | ||
F-22 | ||
Note payable to shareholder, unsecured,non-interest bearing, matures in 2006 | $ | 43,250 | ||
Note payable, unsecured, non-interestbearing, payable in quarterly installmentsof $2,500, matures in 2004 | 10,000 | |||
Total notes | 53,250 | |||
Current portion | 10,000 | |||
$ | 43,250 | |||
Year ending September 30, | ||||
2004 | $ | 10,000 | ||
2005 | — | |||
2006 | 43,250 | |||
$ | 53,250 | |||
F-23 | ||
F-24 | ||
March 31, |
|
| September 30, |
| |||
|
| 2004 |
|
| 2003 | ||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 14,748 | $ | 17,903 | |||
Cash in escrow account | 534,691 | — | |||||
Trade receivables, net of reserve of $18,169 at March 31, 2004and $8,169 at September 30, 2003 | 30,000 | 28,200 | |||||
Inventory | 60,374 | 9,700 | |||||
Other assets | 37,425 | 16,926 | |||||
Total current assets | 677,238 | 72,729 | |||||
Property and equipment, net | 25,618 | 32,081 | |||||
Deposits | 5,031 | 5,031 | |||||
$ | 707,887 | $ | 109,841 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | |||||||
Current Liabilities: | |||||||
Accounts payable | $ | 266,879 | $ | 185,725 | |||
Accrued expenses | 333,238 | 457,695 | |||||
Deposits | — | 20,000 | |||||
Notes payable | 201,000 | 10,000 | |||||
Total current liabilities | 801,117 | 673,420 | |||||
Notes payable, net of current portion | 43,250 | 43,250 | |||||
Total Liabilities | 844,367 | 716,670 | |||||
Commitments and contingencies | — | — | |||||
Shareholders’ equity (deficit): | |||||||
Preferred stock, par value $0.10; 4,000,000 shares authorized,and no shares issued or outstanding | — | — | |||||
Common stock, par value $0.01; 120,000,000 shares authorized,and shares issued 79,700,783and 70,633,819 outstanding atMarch 31, 2004 and September 30, 2003, respectively | 797,007 | 706,338 | |||||
Additional paid-in capital | 21,242,603 | 20,444,733 | |||||
Accumulated deficit | (22,176,090 | ) | (21,757,900 | ) | |||
Total shareholders’ equity (deficit) | (136,480 | ) | (606,829 | ) | |||
$ | 707,887 | $ | 109,841 | ||||
F-25 | ||
Three Months |
|
| Three Months |
|
| Six Months |
|
| Six Months |
|
|
| ||||
|
| Ended |
|
| Ended |
|
| Ended |
|
| Ended |
|
| Development |
| |
|
| March 31, 2004 |
|
| March 31, 2003 |
|
| March 31, 2004 |
|
| March 31, 2003 |
|
| Stage | ||
Revenues | $ | 36,308 | $ | 13,093 | $ | 74,538 | $ | 18,548 | $ | 1,023,746 | ||||||
Cost of Sales | 24,856 | 1,477 | 55,998 | 4,790 | 953,485 | |||||||||||
Gross profit | 11,452 | 11,616 | 18,540 | 13,758 | 70,261 | |||||||||||
Costs and expenses | ||||||||||||||||
Salaries and benefits | 112,346 | 113,243 | 257,395 | 179,376 | 2,434,191 | |||||||||||
Research and development | 4,440 | 12,087 | 9,398 | 21,777 | 3,722,533 | |||||||||||
Stock compensation | 22,290 | 97,080 | 28,293 | 109,980 | 3,108,987 | |||||||||||
Consulting fees, related party | — | 7,500 | — | 15,000 | 8,175,973 | |||||||||||
Other | 72,446 | (51,500 | ) | 131,170 | 44,172 | 2,538,473 | ||||||||||
Total costs and expenses | 211,522 | 178,410 | 426,256 | 370,305 | 19,980,157 | |||||||||||
Loss from operations | (200,070 | ) | (166,794 | ) | (407,716 | ) | (356,547 | ) | (19,909,896 | ) | ||||||
Other income (expense) | ||||||||||||||||
Interest and other income | — | — | — | — | 178,972 | |||||||||||
Interest expense | (7,342 | ) | (979 | ) | (10,474 | ) | (2,123 | ) | (50,486 | ) | ||||||
Loss on disposal of assets | — | — | — | — | — | |||||||||||
(7,342 | ) | (979 | ) | (10,474 | ) | (2,123 | ) | 128,486 | ||||||||
Loss before income taxes | (207,412 | ) | (167,773 | ) | (418,190 | ) | (358,670 | ) | (19,781,410 | ) | ||||||
Income tax expense | — | — | — | — | — | |||||||||||
Net loss | $ | (207,412 | ) | $ | (167,773 | ) | $ | (418,190 | ) | $ | (358,670 | ) | $ | (19,781,410 | ) | |
Net loss per common share, basic and diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.01 | ) | ||||
F-26 | ||
Development | ||||||||||
2004 |
|
| 2003 |
|
| Stage | ||||
Cash flows from operating activities: | ||||||||||
Net loss | $ | (418,190 | ) | $ | (358,670 | ) | $ | (19,781,410 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||
Non cash transactions | ||||||||||
Depreciation | 6,463 | 6,462 | 71,659 | |||||||
Loss on disposal of assets | — | — | 30,960 | |||||||
Impairment loss on equipment | — | — | 64,187 | |||||||
Stock and options issued for services, net | 28,293 | 142,750 | 11,611,005 | |||||||
Decrease (increase) in inventory | (50,674 | ) | 6,094 | (60,374 | ) | |||||
Deferred offering costs | — | — | (85,171 | ) | ||||||
Decrease (increase) in receivables | (1,800 | ) | — | 101,631 | ||||||
Decrease (increase) in other assets | (20,499 | ) | (10,394 | ) | (33,516 | ) | ||||
Increase in accounts payable and accrued expenses | 172,252 | (122,564 | ) | 845,378 | ||||||
Net cash (used in) operating activities | (284,155 | ) | (336,322 | ) | (7,235,651 | ) | ||||
Cash flows from investing activities: | ||||||||||
Acquisition of property and equipment | — | — | (153,692 | ) | ||||||
Repayment of loans | — | — | 200,000 | |||||||
Proceeds from the sale of furniture and equipment | — | — | 6,050 | |||||||
Loans issued | — | — | (400,000 | ) | ||||||
Net cash (used in) investing activities | — | — | (347,642 | ) | ||||||
Cash flows from financing activities: | ||||||||||
Increase in notes payable | 196,000 | 15,000 | 196,000 | |||||||
Draws on the line of credit | — | — | 430,000 | |||||||
Loan from (to) officer | — | — | 65,079 | |||||||
Repayment of notes payable | (5,000 | ) | — | (115,000 | ) | |||||
Repayment of line of credit | — | — | (430,000 | ) | ||||||
Repayment of capital lease obligations | — | — | (1,819 | ) | ||||||
Proceeds from the exercise of options | — | 29,058 | 198,590 | |||||||
Proceeds from the exercise of warrants | — | — | 92,460 | |||||||
Proceeds from equity line of credit | — | — | 414,824 | |||||||
Proceeds from the issuance of preferred stock | — | — | 482,500 | |||||||
Deposits for private placement | (20,000 | ) | 10,000 | — | ||||||
Proceeds from issuance of common stock | 644,691 | 300,000 | 6,796,480 | |||||||
Net cash provided by financing activities | 815,691 | 354,058 | 8,129,114 | |||||||
Net (decrease) increase in cash and cash equivalents | 531,536 | 17,736 | 545,821 | |||||||
Cash and cash equivalents, beginning of period | 17,903 | 1,405 | 3,618 | |||||||
Cash and cash equivalents, end of period | $ | 549,439 | $ | 19,141 | $ | 549,439 | ||||
Supplementary Disclosure of Cash Flow Information: | ||||||||||
Cash paid for interest | $ | 5,211 | $ | — | $ | 30,685 | ||||
Cash paid for income taxes | $ | — | $ | — | $ | 50 | ||||
F-27 | ||
Common Stock | Preferred Stock | |||||||||||||||||||||
Number |
|
| Number |
|
|
|
| Additional |
|
|
|
|
| |||||||||
|
| of |
|
| Par |
|
| of |
|
| Par |
|
| Paid-In |
|
| Accumulated |
|
|
| ||
|
| Shares |
|
| Value |
|
| Shares |
|
| Value |
|
| Capital |
|
| Deficit | Total | ||||
Balance, September 30, 2003 | 70,633,819 | $ | 706,338 | — | $ | — | $ | 20,444,733 | $ | (21,757,900 | ) | $ | (606,829 | ) | ||||||||
Exercise of options | — | — | — | — | — | — | — | |||||||||||||||
Stock issued for services | ||||||||||||||||||||||
Price per share ranged | ||||||||||||||||||||||
$0.14 | 47,646 | 476 | — | — | 5,527 | — | 6,003 | |||||||||||||||
$0.155 | 33,000 | 330 | — | — | 4,274 | — | 4,604 | |||||||||||||||
Common stock options granted | — | — | — | — | 13,491 | — | 13,491 | |||||||||||||||
Debt equity swap | 1,500,000 | 15,000 | — | — | 135,000 | — | 150,000 | |||||||||||||||
Private placement of common stock | ||||||||||||||||||||||
Shares issued for: | ||||||||||||||||||||||
$0.10 | 1,100,000 | 11,000 | — | — | 99,000 | — | 110,000 | |||||||||||||||
$0.11 | 5,886,318 | 58,863 | — | — | 475,828 | — | 534,691 | |||||||||||||||
Stock retainage program | 500,000 | 5,000 | — | — | 64,750 | — | 69,750 | |||||||||||||||
Net loss | — | — | — | — | — | (418,190 | ) | (418,190 | ) | |||||||||||||
Balance, March 31, 2004 | 79,700,783 | $ | 797,007 | — | $ | — | $ | 21,242,603 | $ | (22,176,090 | ) | $ | (136,480 | ) | ||||||||
F-28 | ||
F-29 | ||
F-30 | ||
Number of | Weighted Average |
| |||||
|
| Shares |
|
| Exercise Price | ||
Options Outstanding, September 30, 2003 | 3,329,757 | $ | 0.90 | ||||
Add: Granted | 170,000 | 0.15 | |||||
Deduct: Forfeited | (250,000 | ) | (0.15 | ) | |||
Options Outstanding, March 31, 2004 | 3,249,757 | $ | 0.92 | ||||
Three Months | Three Months |
| |||||
|
| Ended |
|
| Ended |
| |
|
| March 31, 2004 |
|
| March 31, 2003 | ||
Net (loss) income: | |||||||
As reported | $ | (207,412 | ) | $ | (167,773 | ) | |
Pro forma | (207,412 | ) | (175,009 | ) | |||
Basic (loss) earnings per share: | |||||||
As reported | $ | (0.00 | ) | $ | (0.00 | ) | |
Pro forma | (0.00 | ) | (0.00 | ) |
F-31 | ||
Number |
|
|
|
|
| |||||
|
| of |
|
| Exercise |
|
|
| ||
|
| Shares |
|
| Price |
|
| Expires | ||
Outstanding at September 30, 2001 | 1,500,000 | $ | 0.12 | 1/02 | ||||||
Exercised | 770,500 | |||||||||
Expired | 729,500 | |||||||||
New Issues | 412,201 | $ | 1.67 | 5/04 | ||||||
Outstanding at September 30, 2002 | 412,201 | |||||||||
New Issues | 4,800,000 | $ | 0.30 | 12/04 | ||||||
200,000 | $ | 0.50 | 12/04 | |||||||
1,000,000 | $ | 0.35 | 6/06 | |||||||
1,000,000 | $ | 0.50 | 6/06 | |||||||
Outstanding at September 30, 2003 | 7,412,201 | |||||||||
New Issues | 275,000 | $ | 0.50 | 6/06 | ||||||
275,000 | $ | 0.75 | 6/06 | |||||||
640,000 | $ | 0.13 | 1/07 | |||||||
500,000 | $ | 0.10 | 3/11 | |||||||
4,414,739 | $ | 0.11 | 4/09 | |||||||
Outstanding at March 31, 2004 | 13,516,940 | |||||||||
Expired | 412,201 | |||||||||
New Issues | 3,335,961 | $ | 0.11 | 4/09 | ||||||
1,808,497 | $ | 0.10 | 4/11 | |||||||
Outstanding at June 8, 2004 | 18,249,197 | |||||||||
F-32 | ||
Six months ended | |||||||
March 31, | |||||||
2004 |
|
| 2003 | ||||
Basic net income (loss) per common share: | |||||||
Net income (loss) | $ | (418,190 | ) | $ | (358,670 | ) | |
Basic and diluted per share amount | $ | (0.01 | ) | $ | (0.01 | ) | |
F-33 | ||
F-34 | ||
F-35 | ||