Table of Contents
UNDER
THE SECURITIES ACT OF 1933
DELAWARE | 22-3337365 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation of organization) | Identification Number) |
3960 HOWARD HUGHES PARKWAY
SUITE 460
LAS VEGAS, NV 89169
(702) 697-0377
(Address, including zip code, and telephone number,
including area code, of Company’s principal executive offices)
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
POWER EFFICIENCY CORPORATION
3960 HOWARD HUGHES PARKWAY
SUITE 460
LAS VEGAS, NV 89169
TEL: (702) 697-0377
FAX: (702) 697-0379
including area code, of agent for service of process)
BARRY GROSSMAN, ESQ.
ADAM S. MIMELES, ESQ.
ELLENOFF GROSSMAN & SCHOLE LLP
370 LEXINGTON AVENUE, 19TH FLOOR
NEW YORK, NEW YORK 10017
TEL: (212) 370-1300
FAX: (212) 370-7889
FEE DUE.
Table of Contents
The information in this prospectus is not complete and may be changed. Neither we nor the selling stockholders may sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and neither we nor the selling stockholders are soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
POWER EFFICIENCY CORPORATION
24,441,033 SHARES OF COMMON STOCK
Page | ||||||||
1 | ||||||||
1 | ||||||||
2 | ||||||||
3 | ||||||||
3 | ||||||||
8 | ||||||||
11 | ||||||||
11 | ||||||||
12 | ||||||||
12 | ||||||||
13 | ||||||||
14 | ||||||||
15 | ||||||||
19 | ||||||||
28 | ||||||||
36 | ||||||||
37 | ||||||||
38 | ||||||||
49 | ||||||||
52 | ||||||||
54 | ||||||||
54 | ||||||||
55 | ||||||||
55 | ||||||||
F | ||||||||
EXHIBIT 23.1 |
i
Table of Contents
1
Table of Contents
2
Table of Contents
3
Table of Contents
4
Table of Contents
• | delay or prevent a change in the control; | ||
• | impede a merger, consolidation, takeover, or other transaction involving the Company; or | ||
• | discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of the Company. |
The basic technology upon which our products are based is derived from a patent license agreement by and between us and NASA, which expired on December 16, 2002. The license expired upon expiration of NASA’s underlying patents, at which time anyone, including us, became free to use the underlying NASA technology. However, we have also made certain improvements to the basic technology covered by the NASA license and we have obtained a patent on this improved technology that runs through 2017. However, we cannot guarantee that others will not seek to improve the basic technology in a similar manner.
5
Table of Contents
6
Table of Contents
7
Table of Contents
• | Investors may have difficulty buying and selling or obtaining market quotations; | ||
• | Market visibility for our common stock may be limited; and | ||
• | A lack of visibility for our common stock may have a depressive effect on the market price for our common stock. |
8
Table of Contents
• | Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; | ||
• | Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; | ||
• | “Boiler room” practices involving high pressure sales tactics and unrealistic price projections by inexperienced sales persons; | ||
• | Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and | ||
• | The wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses. |
9
Table of Contents
10
Table of Contents
11
Table of Contents
Common Stock | ||||||||
Price | ||||||||
High | Low | |||||||
Year Ended December 31, 2004 | ||||||||
First Quarter | $ | 5.04 | $ | 0.90 | ||||
Second Quarter | $ | 1.50 | $ | 0.61 | ||||
Third Quarter | $ | 0.67 | $ | 0.28 | ||||
Fourth Quarter | $ | 1.00 | $ | 0.21 | ||||
Year Ended December 31, 2005 | ||||||||
First Quarter | $ | 0.56 | $ | 0.20 | ||||
Second Quarter | $ | 0.25 | $ | 0.19 | ||||
Third Quarter | $ | 0.50 | $ | 0.22 | ||||
Fourth Quarter | $ | 1.10 | $ | 0.25 | ||||
Year Ended December 31, 2006 | ||||||||
First Quarter | $ | 0.40 | $ | 0.20 | ||||
Second Quarter | $ | 0.43 | $ | 0.20 | ||||
Third Quarter | $ | 0.30 | $ | 0.18 | ||||
Fourth Quarter | $ | 0.40 | $ | 0.21 |
12
Table of Contents
December 31, 2006 | ||||
(Audited) | ||||
Actual | ||||
Stockholders’ Equity | ||||
Common Stock, $.001 par value; 100,000,000 shares authorized; 35,042,009 shares issued and outstanding; | $ | 35,042 | ||
Preferred Stock, $.001 par value; 10,000,000 shares authorized; none issued or outstanding | — | |||
Additional Paid in Capital | 24,927,839 | |||
Accumulated Deficit | (22,917,968 | ) | ||
Total Stockholders’ Equity | $ | 2,044,913 | ||
13
Table of Contents
Years ended December 31, | ||||||||
2005 | 2006 | |||||||
Statements of Operations: | ||||||||
Revenues | $ | 276,405 | $ | 188,811 | ||||
Cost of Sales | 245,789 | 136,240 | ||||||
Gross Profit | 30,616 | 52,571 | ||||||
Costs and Expenses: | ||||||||
Research and development | 418,016 | 567,591 | ||||||
Selling, general and administrative | 1,641,307 | 3,118,233 | ||||||
Depreciation and amortization | 22,470 | 34,028 | ||||||
Total Costs and Expenses | 2,081,793 | 3,719,852 | ||||||
Loss from Operations | (2,051,177 | ) | (3,667,281 | ) | ||||
Other income(expense): | ||||||||
Interest income | 13,847 | 9,243 | ||||||
Interest expense | (529,387 | ) | (1,354,195 | ) | ||||
Total Other Expense, Net | (515,540 | ) | (1,344,952 | ) | ||||
Loss before provision for taxes | (2,566,717 | ) | (5,012,233 | ) | ||||
Provision for taxes | (3,846 | ) | (8,542 | ) | ||||
Net loss | $ | (2,570,563 | ) | $ | (5,020,775 | ) | ||
Basic loss per common share | $ | (0.18 | ) | $ | (0.20 | ) | ||
Weighted average common shares outstanding | 14,254,029 | 25,150,386 | ||||||
Balance Sheet Data: | ||||||||
Cash | $ | 1,009,120 | $ | 1,693,584 | ||||
Working capital (deficit) | (610,689 | ) | 1,318,694 | |||||
Total assets | 3,378,629 | 4,038,030 | ||||||
Long-term liabilities | 116,526 | 1,397,927 | ||||||
Total stockholders’ equity | 1,315,423 | 2,044,913 |
14
Table of Contents
OR PLAN OF OPERATIONS
15
Table of Contents
16
Table of Contents
For the year ended December 31 (Unaudited) | ||||||||
2006 | 2005 | |||||||
Total Revenues | $ | 188,811 | $ | 276,405 | ||||
Total Cost of Product Revenues | 136,240 | 245,789 | ||||||
Gross Margin | 52,571 | 30,616 | ||||||
Costs and Expenses: | ||||||||
Research and development | 513,449 | 418,016 | ||||||
Selling, general and administration | 2,016,069 | 1,613,758 | ||||||
SFAS 123 stock option expense* | 999,320 | 683,533 | ||||||
Other non-cash consideration* | 165,528 | 27,549 | ||||||
Depreciation and amortization | 34,028 | 22,470 | ||||||
Total Costs and Expenses | 3,728,394 | 2,765,329 | ||||||
Loss From Operations | (3,675,823 | ) | (2,734,710 | ) | ||||
Other (Expense) Income: | ||||||||
Cash interest (expense) income, net | (305,501 | ) | (263,525 | ) | ||||
Non-cash interest (expense) income, net* | (1,039,451 | ) | (252,015 | ) | ||||
Total Other (Expense) Income | (1,344,952 | ) | (515,540 | ) | ||||
Net Loss | $ | (5,020,775 | ) | $ | (3,250,250 | ) | ||
*Sum of non-cash compensation and non-cash interest expense | 2,204,299 | 963,097 | ||||||
Net Loss excluding non-cash compensation and non-cash interest | $ | (2,816,476 | ) | $ | (2,287,153 | ) | ||
17
Table of Contents
18
Table of Contents
19
Table of Contents
1. | Energy savings up to 35%, in appropriate applications; and | ||
2. | Increased motor life resulting from lower operating temperature and reduced stress and strain. |
20
Table of Contents
1. | Demographic Factors: |
a. | High retail electricity cost (generally > $0.08/kWh). | ||
b. | Local utility or government offers incentive financing for the purchase of energy saving products. | ||
c. | Increasing environmental concerns, such as a desire to reduce greenhouse gas emissions from the generation of electricity. |
2. | Customer Factors: |
a. | Energy usage is a significant operating cost. | ||
b. | Saving energy is a top-down management priority. | ||
c. | Uses many constant-speed induction motors that are on average lightly loaded and operate for long periods of time. | ||
d. | Strives to be a “green” company (environmentally friendly). |
1. | Performance- Third-party testing has shown the EcoPro™ to perform better than other energy-saving motor controllers. To our knowledge, no competitive product matches our performance. | ||
2. | Patent Protection- US patent to 2017. United States Patent Number 5,821,726 - -Balanced and synchronized phase detector for an AC induction motor controller. Also, we recently filed three provisional patents on new software and algorithms for measuring and reducing energy usage by electric motors. | ||
3. | Continuous Improvement- We continuously look for ways to reduce the manufacturing cost of our product family while introducing value-added features. By reducing the manufacturing cost and increasing the energy-saving performance we improve the payback value proposition. | ||
4. | New Product Development– Planned new products include software-based versions of our current three phase product, which will incorporate many new value-added features. We are presently finalizing CSA and UL certification for this product. We have also developed a software based prototype version of our single phase controller. We are presently producing 25 of these controllers for testing on various applications on our own and with potential customers. | ||
5. | Large, Technically Qualified Distribution Partners- Customer satisfaction requires a level of technical skill on the part of the salesperson to correctly identify motor applications and specify the proper product. Furthermore, customer acceptance depends upon the confidence the customers have in the Company’s distribution partners. We believe our relationships with OEMs, such as Otis Elevator Company and KONE Inc., increases our customers’ confidence in our products and promotes market acceptance of the technology. |
21
Table of Contents
22
Table of Contents
• | Controllers which utilize a different electronic technology than the technology used by the Company; | ||
• | Variable frequency drives (“VFDs”); and | ||
• | High-energy efficient motors. |
• | It is the only device management is aware of that combines soft start features with energy savings features in a single integrated unit that is CSA and CE certified and achieves energy savings levels up 35%; and | ||
• | Its circuitry is proprietary and protected by a patent. |
• | The EcoPro™is the result of field and laboratory engineering refinements undertaken since 1994. These refinements enable the EcoPro™to offer a control system which measures and monitors key motor operating conditions and adapts motor operating parameters during rapid changes in motor load, all without excessive vibration, synchronization problems or other material adverse effects to the motor or surrounding electrical and mechanical systems. |
23
Table of Contents
• | Energy savings and motor efficiencies were verified through tests of the EcoPro™ performed by independent laboratories and utilities, such as Nevada Power Company and the Los Angeles Department of Water and Power. | ||
• | Medsker Electric, Inc., an independent electric motor repair and test laboratory, performed a series of inrush current and energy savings tests on the EcoPro™, then known as the Performance Controller. The tests compared the Company’s product to the products of three competitors. In its conclusions, Medsker stated that the Company’s EcoPro™ “exhibited twice the energy savings of the next nearest competitor.” In addition, Medsker concluded that the EcoPro™ “exhibited the best soft-start performance, reducing the motor inrush current by 71%.” Finally, Medsker concluded that the EcoPro™ “was the simplest to install and test, and was the best performer in terms of energy savings and inrush current reduction.” |
• | Increased ease of installation and reduced technical support requirements. Instead of approximated and manual adjustments during installation, which can require technical support from the Company, the digitized unit should allow more simplified and precise adjustments by customers and third party installers. |
24
Table of Contents
• | Increased functionality. With a microchip and software driving our products, we expect to be able to ultimately add new functionality to the products. These new functions may include such things as recording and reporting of actual energy savings, prediction of maintenance problems by reading and reporting on changes in the motor’s operating characteristics and more secure intellectual property protection through the use of secured chips and software. |
25
Table of Contents
26
Table of Contents
27
Table of Contents
Name | Age | Director Since | Position | |||||||
Steven Z. Strasser | 58 | 2002 | Chairman, Chief Executive Officer | |||||||
John (BJ) Lackland | 36 | 2002 | Director, Chief Financial Officer, and Secretary | |||||||
Raymond J. Skiptunis | 64 | 2002 | Director, Chairman of the Audit Committee | |||||||
George Boyadjieff | 68 | 2006 | Director, Senior Technical Advisor | |||||||
Douglas M. Dunn | 64 | 2006 | Director | |||||||
Richard Morgan | 61 | 2007 | Director | |||||||
Gary Rado | 65 | 2005 | Director |
28
Table of Contents
29
Table of Contents
• | selects the independent auditors, considering independence and effectiveness; | ||
• | discusses the scope and results of the audit with the independent auditors and reviews with management and the independent auditors our interim and year-end operating results; | ||
• | considers the adequacy of our internal accounting controls and audit procedures; | ||
• | reviews and approves all audit and non-audit services to be performed by the independent auditors; and | ||
• | administers the whistleblower policy. |
• | recommends to the board of directors the compensation level of the executive officers; | ||
• | reviews and makes recommendations to our board of directors with respect to our equity incentive plans; | ||
• | establishes and reviews general policies relating to compensation and benefits of our employees. |
30
Table of Contents
Nonqualified | ||||||||||||||||||||||||||||||||||||
Non-Equity | Deferred | |||||||||||||||||||||||||||||||||||
Stock | Option | Incentive Plan | Compensation | All Other | ||||||||||||||||||||||||||||||||
Name and principal position | Year | Salary ($) | Bonus ($) | Awards ($) | Awards ($) | Compensation ($) | Earnings ($) | Compensation ($) | Total ($) | |||||||||||||||||||||||||||
Steven Z. Strasser | 2006 | $ | 288,750 | — | — | — | — | — | — | $ | 288,750 | |||||||||||||||||||||||||
Chairman and Chief | 2005 | $ | 275,000 | (1) | — | — | $ | 2,218,566 | — | — | — | $ | 2,493,566 | |||||||||||||||||||||||
Executive Officer | 2004 | $ | 60,000 | — | — | — | — | — | — | $ | 60,000 | |||||||||||||||||||||||||
John (BJ) Lackland(2) | 2006 | $ | 183,750 | — | — | — | — | — | — | $ | 183,750 | |||||||||||||||||||||||||
Director and Chief | 2005 | $ | 175,000 | — | — | $ | 1,003,908 | — | — | — | $ | 1,178,908 | ||||||||||||||||||||||||
Financial Officer | 2004 | $ | 60,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Robert M. Murray(3) | 2006 | $ | 175,000 | — | — | $ | 670,000 | (3) | — | — | — | $ | 845,000 | |||||||||||||||||||||||
Chief Operating Officer | 2005 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
2004 | — | — | — | — | — | — | — | — |
(1) | Effective June 1, 2005, Mr. Strasser entered into an employment contract with the Company. Mr. Strasser agreed to have his first year’s salary paid $60,000 in cash and options to purchase 1,612,500 shares of common stock at an exercise price equal to not less than market at date of grant in lieu of remaining cash vesting quarterly over one year. Mr. Strasser was also granted an additional 3,000,000 options on June 1, 2005 as part of his employment contract. | |
(2) | Effective June 1, 2005, Mr. Lackland entered into an employment contract with the Company. Mr. Lackland agreed to have his first year’s salary paid $120,000 in cash and options to purchase 412,500 shares of common stock at an exercise price equal to market at date of grant in lieu of remaining cash vesting quarterly over one year. Mr. Lackland was also granted an additional 1,800,000 options on June 1, 2005 as part of his employment contract. | |
(3) | Mr. Murray resigned effective January 5, 2007 and all of Mr. Murray’s stock options were cancelled as of this date. |
31
Table of Contents
Name | Salary(1) | Bonus | Common Stock Options(5) | |||||||||
Steven Strasser | $ | 275,000 | (2) | (4) | 3,000,000 | |||||||
BJ Lackland | $ | 175,000 | (3) | 1,800,000 |
(1) | To be increased annually by at least 5% of prior year. | |
(2) | First year’s salary to be paid $60,000 in cash and options to purchase 1,612,500 shares of Common Stock at an exercise price equal to not less than market at date of grant in lieu of remaining cash vesting quarterly over one year. | |
(3) | First year’s salary to be paid $120,000 in cash and options to purchase 412,500 shares of Common Stock at an exercise price equal to market at date of grant in lieu of remaining cash vesting quarterly over one year. | |
(4) | At the Board’s discretion. | |
(5) | Vesting evenly and quarterly over five years. |
OPTION AWARDS | STOCK AWARDS | |||||||||||||||||||||||||||||||||||
Equity Incentive | ||||||||||||||||||||||||||||||||||||
Equity Incentive | Equity Incentive | Plan Awards: Market | ||||||||||||||||||||||||||||||||||
Number of | Number of | Plan Awards: Number | Plan Awards: Number | or Payout Value of | ||||||||||||||||||||||||||||||||
Securities | Securities | of Securities | Market Value of | of Unearned Shares, | Unearned Shares, | |||||||||||||||||||||||||||||||
Underlying | Underlying | Underlying | Option | Number of Shares or | Shares or Units of | Units or Other | Units or Other | |||||||||||||||||||||||||||||
Unexercised | Unexercised | Unexercised | Exercise | Option | Units of Stock That | Stock That Have | Rights That Have | Rights That Have | ||||||||||||||||||||||||||||
Options (#) | Options (#) | Unearned Options | Price | Expiration | Have Not Vested | Not Vested | Not Vested | Not Vested | ||||||||||||||||||||||||||||
Name | Exercisable | Unexercisable | (#) | ($) | Date | (#) | ($) | (#) | (#) | |||||||||||||||||||||||||||
Steven Strasser | 1,022,727 | 1,550,002 | — | $ | 0.22 | 5/31/2010 | — | — | — | — | ||||||||||||||||||||||||||
1,693,773 | 399,998 | — | $ | 0.20 | 5/31/2015 | — | — | — | — | |||||||||||||||||||||||||||
550,000 | 50,000 | — | $ | 0.65 | 11/28/2015 | — | — | — | — | |||||||||||||||||||||||||||
BJ Lackland | 1,042,500 | 1,170,000 | — | $ | 0.20 | 5/31/2015 | — | — | — | — | ||||||||||||||||||||||||||
325,000 | 50,000 | — | $ | 0.65 | 11/28/2015 | — | — | — | — | |||||||||||||||||||||||||||
Robert M. Muray(1) | — | 2,500,000 | — | $ | 0.25 | 4/16/2016 | — | — | — | — |
(1) | Mr. Murray resigned effective January 5, 2007 and all of Mr. Murray’s stock options were cancelled as of this date. |
32
Table of Contents
• | assumption or substitution of, or adjustment to, each outstanding award; | ||
• | acceleration of the vesting of options and stock appreciation rights; | ||
• | termination of any restrictions on stock awards or cash awards; or | ||
• | cancellation of awards in exchange for a cash payment to the participant. |
33
Table of Contents
Non-Qualified | ||||||||||||||||||||||||||||
Deferred | ||||||||||||||||||||||||||||
Fees Earned or Paid | Non-Equity Incentive | Compensation | All | |||||||||||||||||||||||||
Name | in Cash | Plan Compensation | Earnings | Other Compensation | ||||||||||||||||||||||||
(a) | ($) | Stock Awards ($) | Option Awards ($) | ($) | ($) | ($) | Total ($) | |||||||||||||||||||||
Raymond J. Skiptunis | $ | 6,000 | — | $ | 39,038 | — | — | — | $ | 45,038 | ||||||||||||||||||
George Boyadjieff | — | — | $ | 26,025 | — | — | — | $ | 26,025 | |||||||||||||||||||
Douglas M. Dunn | — | — | $ | 26,025 | — | — | — | $ | 26,025 | |||||||||||||||||||
Richard Morgan | — | — | — | — | — | — | — | |||||||||||||||||||||
Gary Rado | — | — | $ | 8,675 | — | — | — | $ | 8,675 |
• | The members and role of our Compensation Committee; | ||
• | Our compensation-setting process; and | ||
• | Our compensation decisions for fiscal year 2006. |
• | the Company’s overall performance; | ||
• | the individual executive’s performance and responsibilities; and | ||
• | market conditions that affect executive salary. |
34
Table of Contents
• | We did not increase base salaries for the named executive officers, and there is no plan to do so in fiscal 2007. | ||
• | In 2006, no bonuses were awarded to the named executive officers. | ||
• | In 2006, only one then-named executive officer received a stock option grant, and these grants were subsequently canceled upon the executive officer’s resignation. |
35
Table of Contents
Name and Address of | Percent of | |||||||
Beneficial Owner(1) | Shares Owned | Shares Owned(10) | ||||||
Steven Strasser, CEO, Chairman of the Board | 15,706,240 | (2) | 22.78 | % | ||||
John (BJ) Lackland, CFO, Director | 1,607,500 | (3) | 2.33 | % | ||||
Raymond J. Skiptunis, Director | 397,824 | (4) | Less than 1 | % | ||||
Gary Rado, Director | 150,000 | (5) | Less than 1 | % | ||||
George Boyadjieff, Director | 2,050,000 | (6) | 2.97 | % | ||||
Douglas Dunn, Director | 100,000 | (7) | Less than 1 | % | ||||
Richard Morgan, Director | 25,000 | (8) | Less than 1 | % | ||||
Summit Energy Ventures, LLC | 8,803,901 | (2) | 12.77 | % | ||||
Sarkowski Family L.P. | 5,429,689 | 7.88 | % | |||||
Ron Boyer | 4,364,154 | 6.33 | % | |||||
Commerce Energy Group | 3,838,333 | (9) | 5.57 | % | ||||
All Executive Officers and Directors as a Group (6 persons) | 20,036,564 | 29.06 | % |
(1) | Information in this table regarding directors and executive officers is based on information provided by them. Unless otherwise indicated in the footnotes and subject to community property laws where applicable, each of the directors and executive officers has sole voting and/or investment power with respect to such shares. The address for each of the persons reported in the table other than Commerce Energy Group is in care of Power Efficiency Corporation at 3960 Howard Hughes Pkwy, Ste 460, Las Vegas, Nevada 89169. | |
(2) | Includes 8,803,901 common shares and common shares subject to options and warrants exercisable within 60 days of the date hereof held by Summit, in which Steven Strasser is one of two members, and 5,735,671 common shares subject to options and warrants which are presently exercisable or will become exercisable within 60 days of the date hereof. Mr. Strasser was also granted an additional 2,221,449 common shares subject to options and warrants which will become exercisable after 60 days of the date hereof. Mr. Strasser’s options and warrants expire on various dates from May, 2010 through November, 2015. | |
(3) | Includes 1,607,500 common shares and common shares subject to options and warrants presently exercisable or will become exercisable within 60 days of the date hereof. Mr. Lackland was also granted an additional 980,000 common shares subject to options which will become exercisable after 60 days of the date hereof. Mr. Lackland’s options and warrants expire on various dates from May, 2010 through November, 2015. | |
(4) | Includes 375,285 common shares subject to options and warrants presently exercisable or will become exercisable within 60 days of the date hereof. Mr. Skiptunis’ options and warrants expire on various dates from October, 2014 through January, 2017. | |
(5) | Includes 150,000 common shares subject to options presently exercisable or will become exercisable within 60 days of the date hereof. Mr. Rado’s options expire on various dates from September, 2015 through January, 2017. | |
(6) | Includes 1,050,000 common shares subject to options and warrants presently exercisable or will become exercisable within 60 days of the date hereof. Mr. Boyadjieff’s options and warrants expire on various dates from April, 2010 through January, 2017. |
36
Table of Contents
(7) | Includes 100,000 common shares subject to options presently exercisable or which will become exercisable within 60 days of the date hereof. Dr. Dunn’s options expire on various dates from May 2016 through January, 2017. | |
(8) | Includes 25,000 common shares subject to options presently exercisable or which will become exercisable within 60 days of the date hereof. Mr. Morgan’s options expire January, 2017. | |
(9) | Includes 589,284 common shares subject to warrants presently exercisable or which will become exercisable within 60 days of the date hereof, as well as 3,249,049 common shares owned by Commerce’s wholly owned subsidiary, Commonwealth Energy Corporation. Commerce was also granted 98,995 common shares subject to warrants which will become exercisable after 60 days of the date hereof. Commerce’s warrants expire on various dates from October 2009 through November 2011. | |
(10) | The percentage for common stock includes all common shares subject to options and warrants exercisable within 60 days of the date hereof. |
37
Table of Contents
38
Table of Contents
Shares of Common | Number of | Total | ||||||||||||||||||||||
Stock Beneficially | Shares of Common | Number | ||||||||||||||||||||||
Owned Prior to Offering | Stock Registered | of Shares | Shares of Common | |||||||||||||||||||||
(All exercisable within | for Sale | of | Stock Beneficially | |||||||||||||||||||||
60 days of Prospectus) | (All exercisable | Common | Owned After Offering | |||||||||||||||||||||
Selling | Number of | within 60 days | Stock | Number | ||||||||||||||||||||
Stockholder | Shares | Percent | of Prospectus) | Registered for Sale | of Shares | Percent | ||||||||||||||||||
Nicholas Anderson (2)(10) | 670,541 | 2 | % | 66,000 | 66,000 | 604,541 | 2 | % | ||||||||||||||||
1536 208th Street | ||||||||||||||||||||||||
Bayside, NY 11360 | ||||||||||||||||||||||||
�� | ||||||||||||||||||||||||
R. Scott Caputo | 4,285 | * | 4,285 | 4,285 | — | 0 | % | |||||||||||||||||
1155 Colonial Way | ||||||||||||||||||||||||
Bridgewater, NJ 08807 | ||||||||||||||||||||||||
Norbert Mayer (2) | 15,000 | * | 15,000 | 15,000 | — | 0 | % | |||||||||||||||||
576 Grassy Hill Road | ||||||||||||||||||||||||
Orange, CT 06477 | ||||||||||||||||||||||||
Scott Straka (2) | 14,284 | * | 14,284 | 14,284 | — | 0 | % | |||||||||||||||||
Hitachi America Ltd. | ||||||||||||||||||||||||
50 Prospect Ave | ||||||||||||||||||||||||
Tarrytown, NY 10591 | ||||||||||||||||||||||||
Leonard Bellezza (2) | 89,927 | * | 81,284 | 81,284 | 8,643 | * | ||||||||||||||||||
79 Talltimber Rd. | ||||||||||||||||||||||||
Middletown, NJ 07748 | ||||||||||||||||||||||||
Art Marsh | 1,428 | * | 1,428 | 1,428 | — | 0 | % | |||||||||||||||||
Blue Mountain Investments | ||||||||||||||||||||||||
7386 Fairway Lane | ||||||||||||||||||||||||
Parker, CO 80134 | ||||||||||||||||||||||||
Raymond Skiptunis (2)(5) | 360,324 | 1 | % | 211,000 | 211,000 | 149,324 | * | |||||||||||||||||
4459 Via Bianca Ave. | ||||||||||||||||||||||||
Las Vegas, NV 89141 | ||||||||||||||||||||||||
Charles Mataya | 30,000 | * | 30,000 | 30,000 | — | 0 | % | |||||||||||||||||
2 Locust Drive | ||||||||||||||||||||||||
Helmetta, NJ 08828 | ||||||||||||||||||||||||
Timothy Franzen (2) | 7,143 | * | 7,143 | 7,143 | — | 0 | % | |||||||||||||||||
260 E. Flamingo Road, #311 | ||||||||||||||||||||||||
Las Vegas, NV 89109 | ||||||||||||||||||||||||
Joan Dziena | 1,214 | * | 1,214 | 1,214 | — | 0 | % | |||||||||||||||||
865 UN Plaza, #16E | ||||||||||||||||||||||||
New York, NY 10017 |
39
Table of Contents
Shares of Common | Number of | Total | ||||||||||||||||||||||
Stock Beneficially | Shares of Common | Number | ||||||||||||||||||||||
Owned Prior to Offering | Stock Registered | of Shares | Shares of Common | |||||||||||||||||||||
(All exercisable within | for Sale | of | Stock Beneficially | |||||||||||||||||||||
60 days of Prospectus) | (All exercisable | Common | Owned After Offering | |||||||||||||||||||||
Selling | Number of | within 60 days | Stock | Number | ||||||||||||||||||||
Stockholder | Shares | Percent | of Prospectus) | Registered for Sale | of Shares | Percent | ||||||||||||||||||
Richard Koch (2) | 154,666 | * | 106,354 | 106,354 | 48,312 | * | ||||||||||||||||||
1604 Sound Watch Dr. | ||||||||||||||||||||||||
Wilmington, NC 28409 | ||||||||||||||||||||||||
Leon Mayer | 50,000 | * | 50,000 | 50,000 | — | 0 | % | |||||||||||||||||
547 McKinley | ||||||||||||||||||||||||
Plymouth, MI 48170 | ||||||||||||||||||||||||
Ron Heagle | 100,000 | * | 100,000 | 100,000 | — | 0 | % | |||||||||||||||||
5533 Bilbao Place | ||||||||||||||||||||||||
Sarasota, FL 34238 | ||||||||||||||||||||||||
Rick Pulford (2) | 168,551 | * | 25,000 | 25,000 | 143,551 | * | ||||||||||||||||||
3000 Town Center, Suite 540 | ||||||||||||||||||||||||
Southfield, MI 48075 | ||||||||||||||||||||||||
John “BJ” Lackland (2) | 1,407,500 | 4 | % | 1,407,500 | 2,587,500 | — | 0 | % | ||||||||||||||||
3960 Howard Hughes Parkway, Ste 460 | ||||||||||||||||||||||||
Las Vegas, NV 89169 | ||||||||||||||||||||||||
Don Fields (2) | 200,000 | 1 | % | 200,000 | 200,000 | — | 0 | % | ||||||||||||||||
11642 Deer Forest Road | ||||||||||||||||||||||||
Reston, VA 20194 | ||||||||||||||||||||||||
Nils Weibull (2) | 118,000 | * | 118,000 | 118,000 | — | 0 | % | |||||||||||||||||
1689 W. Huron River Drive | ||||||||||||||||||||||||
Ann Arbor, MI 48103 | ||||||||||||||||||||||||
Dan Koch | 39,000 | * | 39,000 | 39,000 | — | 0 | % | |||||||||||||||||
301 W 10th St, Apt 203 | ||||||||||||||||||||||||
Charlotte, NC 28202 | ||||||||||||||||||||||||
Brian Chan | 200,000 | 1 | % | 200,000 | 300,000 | — | 0 | % | ||||||||||||||||
3960 Hoawrd Hughes Parkway, Ste 460 | ||||||||||||||||||||||||
Las Vegas, NV 89109 | ||||||||||||||||||||||||
George Boyadjieff | 450,000 | 1 | % | 450,000 | 450,000 | — | 0 | % | ||||||||||||||||
18772 Colony Circle | ||||||||||||||||||||||||
Villa Park, CA 92861 | ||||||||||||||||||||||||
Gary Rado | 100,000 | * | 100,000 | 100,000 | — | 0 | % | |||||||||||||||||
16 Chesterfield Drive | ||||||||||||||||||||||||
Warren, NJ 07059 | ||||||||||||||||||||||||
Herbert Soroca (6) | 129,780 | * | 129,780 | 129,780 | — | 0 | % | |||||||||||||||||
Bear Stearns Securities Corp | ||||||||||||||||||||||||
One Metro Center | ||||||||||||||||||||||||
Brooklyn, NY 11201-3859 | ||||||||||||||||||||||||
Bradley Reifer (6) | 101,828 | * | 101,828 | 101,828 | — | 0 | % | |||||||||||||||||
123 Fraleigh Hill Rd. | ||||||||||||||||||||||||
Millbrook, NY 12545 | ||||||||||||||||||||||||
Herman Gross | 1,153,850 | 3 | % | 1,153,850 | 1,153,850 | — | 0 | % | ||||||||||||||||
12 Jordan Drive | ||||||||||||||||||||||||
Great Neck, NY 11021 |
40
Table of Contents
Shares of Common | Number of | Total | ||||||||||||||||||||||
Stock Beneficially | Shares of Common | Number | ||||||||||||||||||||||
Owned Prior to Offering | Stock Registered | of Shares | Shares of Common | |||||||||||||||||||||
(All exercisable within | for Sale | of | Stock Beneficially | |||||||||||||||||||||
60 days of Prospectus) | (All exercisable | Common | Owned After Offering | |||||||||||||||||||||
Selling | Number of | within 60 days | Stock | Number | ||||||||||||||||||||
Stockholder | Shares | Percent | of Prospectus) | Registered for Sale | of Shares | Percent | ||||||||||||||||||
Allan Duffy | 57,693 | * | 57,693 | 57,693 | — | 0 | % | |||||||||||||||||
741 Bayshore Drive, Apt. 14 | ||||||||||||||||||||||||
Fort Lauderdale, FL 33304 | ||||||||||||||||||||||||
Danny Guifoile (6) | 30,894 | * | 30,894 | 30,894 | — | 0 | % | |||||||||||||||||
650 5th Avenue, 6th Floor | ||||||||||||||||||||||||
New York, NY 10019 | ||||||||||||||||||||||||
Patricia R. Schwarz | 57,693 | * | 57,693 | 57,693 | — | 0 | % | |||||||||||||||||
740 Pinehurst Way | ||||||||||||||||||||||||
Palm Beach Gardens, FL 33418 | ||||||||||||||||||||||||
David H. Schwartz | 57,693 | * | 57,693 | 57,693 | — | 0 | % | |||||||||||||||||
740 Pinehurst Way | ||||||||||||||||||||||||
Palm Beach Gardens, FL 33418 | ||||||||||||||||||||||||
Kevin Fisher | 28,847 | * | 28,847 | 28,847 | — | 0 | % | |||||||||||||||||
Bear Stearns Security Corp | ||||||||||||||||||||||||
One Metrotech Center North | ||||||||||||||||||||||||
Brooklyn, NY 11201-3859 | ||||||||||||||||||||||||
Abacus Solutions | 100,000 | * | 100,000 | 100,000 | — | 0 | % | |||||||||||||||||
745 5th Avenue | ||||||||||||||||||||||||
New York, NY 10151 | ||||||||||||||||||||||||
Justin Bellezza | 1,000 | * | 1,000 | 1,000 | — | 0 | % | |||||||||||||||||
500 Washington Avenue | ||||||||||||||||||||||||
Carlstadt, NJ 07072 | ||||||||||||||||||||||||
Steven Sacharoff | 33,000 | * | 33,000 | 33,000 | — | 0 | % | |||||||||||||||||
500 Washington Avenue | ||||||||||||||||||||||||
Carlstadt, NJ 07072 | ||||||||||||||||||||||||
Bernard Geik | 33,000 | * | 33,000 | 33,000 | — | 0 | % | |||||||||||||||||
500 Washington Avenue | ||||||||||||||||||||||||
Carlstadt, NJ 07072 | ||||||||||||||||||||||||
Domimick Rizzitano | 33,000 | * | 33,000 | 33,000 | — | 0 | % | |||||||||||||||||
500 Washington Avenue | ||||||||||||||||||||||||
Carlstadt, NJ 07072 | ||||||||||||||||||||||||
DB Max | 700 | * | 700 | 700 | — | 0 | % | |||||||||||||||||
8520 Roundhill Ct. | ||||||||||||||||||||||||
Saline, MI 48176 | ||||||||||||||||||||||||
Reed Smith LLP | 150,000 | * | 150,000 | 150,000 | — | 0 | % | |||||||||||||||||
P.O. Box 23416 | ||||||||||||||||||||||||
Newark, NJ 07198 | ||||||||||||||||||||||||
Richard A. Ackner | 375,000 | 1 | % | 375,000 | 375,000 | — | 0 | % | ||||||||||||||||
14643 Draft House Lane | ||||||||||||||||||||||||
Wellington, FL 33414 |
41
Table of Contents
Shares of Common | Number of | Total | ||||||||||||||||||||||
Stock Beneficially | Shares of Common | Number | ||||||||||||||||||||||
Owned Prior to Offering | Stock Registered | of Shares | Shares of Common | |||||||||||||||||||||
(All exercisable within | for Sale | of | Stock Beneficially | |||||||||||||||||||||
60 days of Prospectus) | (All exercisable | Common | Owned After Offering | |||||||||||||||||||||
Selling | Number of | within 60 days | Stock | Number | ||||||||||||||||||||
Stockholder | Shares | Percent | of Prospectus) | Registered for Sale | of Shares | Percent | ||||||||||||||||||
Daniel Anderson | 75,000 | * | 75,000 | 75,000 | — | 0 | % | |||||||||||||||||
4409 Willow Creek Circle | ||||||||||||||||||||||||
Bellbrook, OH 45305 | ||||||||||||||||||||||||
Bryan Arakelian | 150,000 | * | 150,000 | 150,000 | — | 0 | % | |||||||||||||||||
7110 N. Fresno Street | ||||||||||||||||||||||||
Suite 410 | ||||||||||||||||||||||||
Fresno, CA 93720 | ||||||||||||||||||||||||
Robert F. Arnold & | 150,000 | * | 150,000 | 150,000 | — | 0 | % | |||||||||||||||||
Susan L. Arnold JR WROS | ||||||||||||||||||||||||
2 Fielding Street | ||||||||||||||||||||||||
Wakefield, MA 01880 | ||||||||||||||||||||||||
Paul J. Bargiel | 112,500 | * | 112,500 | 112,500 | — | 0 | % | |||||||||||||||||
100 West Monroe | ||||||||||||||||||||||||
Suite 902 | ||||||||||||||||||||||||
Chicago, IL 60603 | ||||||||||||||||||||||||
John J. Bender | 300,000 | 1 | % | 300,000 | 300,000 | — | 0 | % | ||||||||||||||||
2803 22nd Street S. | ||||||||||||||||||||||||
Lacrosse, WI 54601 | ||||||||||||||||||||||||
Berkowitz and Garfinkel | 187,500 | * | 187,500 | 187,500 | — | 0 | % | |||||||||||||||||
D.D.S., P.A. Employees’ | ||||||||||||||||||||||||
Pension Plan | ||||||||||||||||||||||||
D/T/D 7/1/1972 | ||||||||||||||||||||||||
Mark Berkowitz & Eric | ||||||||||||||||||||||||
Garfinkel Trustees | ||||||||||||||||||||||||
17 Country Club Lane | ||||||||||||||||||||||||
Marlboro, NJ 07746 | ||||||||||||||||||||||||
Lester B. Boelter | 375,000 | 1 | % | 375,000 | 375,000 | — | 0 | % | ||||||||||||||||
50 Shady Oak Court | ||||||||||||||||||||||||
Winona, MN 55987 | ||||||||||||||||||||||||
Ron Boyer | 375,000 | 1 | % | 375,000 | 375,000 | — | 0 | % | ||||||||||||||||
1132 SW 19th Avenue | ||||||||||||||||||||||||
Suite 612 | ||||||||||||||||||||||||
Portland, OR 97205 | ||||||||||||||||||||||||
Robert H. Brackman | 225,000 | 1 | % | 225,000 | 225,000 | — | 0 | % | ||||||||||||||||
5309 Crave Avenue E | ||||||||||||||||||||||||
Port Orchard, WA 98366 | ||||||||||||||||||||||||
Keith Buhrdorf | 375,000 | 1 | % | 375,000 | 375,000 | — | 0 | % | ||||||||||||||||
4582 South Vister Steet | ||||||||||||||||||||||||
Suite 550 | ||||||||||||||||||||||||
Denver, CO 80237 | ||||||||||||||||||||||||
Jeffrey Davis | 187,500 | * | 187,500 | 187,500 | — | 0 | % | |||||||||||||||||
383 North West 112th Ave | ||||||||||||||||||||||||
Coral Springs, FL 33071 | ||||||||||||||||||||||||
James Demarco & Rose | 375,000 | 1 | % | 375,000 | 375,000 | — | 0 | % | ||||||||||||||||
Demarco JT WROS | ||||||||||||||||||||||||
274 Rose Avenue | ||||||||||||||||||||||||
Staten Island, NY 10306 |
42
Table of Contents
Shares of Common | Number of | Total | ||||||||||||||||||||||
Stock Beneficially | Shares of Common | Number | ||||||||||||||||||||||
Owned Prior to Offering | Stock Registered | of Shares | Shares of Common | |||||||||||||||||||||
(All exercisable within | for Sale | of | Stock Beneficially | |||||||||||||||||||||
60 days of Prospectus) | (All exercisable | Common | Owned After Offering | |||||||||||||||||||||
Selling | Number of | within 60 days | Stock | Number | ||||||||||||||||||||
Stockholder | Shares | Percent | of Prospectus) | Registered for Sale | of Shares | Percent | ||||||||||||||||||
Douglas Dotter | 112,500 | * | 112,500 | 112,500 | — | 0 | % | |||||||||||||||||
3615 West Lawther Drive | ||||||||||||||||||||||||
Dallas, TX 75214 | ||||||||||||||||||||||||
Arun Dua & Satish Dua | 75,000 | * | 75,000 | 75,000 | — | 0 | % | |||||||||||||||||
JT WROS | ||||||||||||||||||||||||
25 W. Houston ST. 28 | ||||||||||||||||||||||||
New York, NY 10012 | ||||||||||||||||||||||||
Edward Duffy | 75,000 | * | 75,000 | 75,000 | — | 0 | % | |||||||||||||||||
178 Hanson Lane | ||||||||||||||||||||||||
New Rochelle, NY 10804 | ||||||||||||||||||||||||
Ahsan Farooqi | 187,500 | * | 187,500 | 187,500 | — | 0 | % | |||||||||||||||||
54 Kimberly Court | ||||||||||||||||||||||||
S. Brunswick, NJ 08852 | ||||||||||||||||||||||||
William L. Fox & | 262,500 | 1 | % | 262,500 | 262,500 | — | 0 | % | ||||||||||||||||
Lynne Fox JT WROS | ||||||||||||||||||||||||
450 Music Mountain Rd. | ||||||||||||||||||||||||
Falls Village, CT 06031 | ||||||||||||||||||||||||
Bernie J. Gallas | 375,000 | 1 | % | 375,000 | 375,000 | — | 0 | % | ||||||||||||||||
5200 North Diversey Blvd. | ||||||||||||||||||||||||
Suite 204 | ||||||||||||||||||||||||
Milwaikee, WI 53217 | ||||||||||||||||||||||||
Mark T. Hellner | 1,500,000 | 4 | % | 1,500,000 | 1,500,000 | — | 0 | % | ||||||||||||||||
900 West Olive | ||||||||||||||||||||||||
Suite A | ||||||||||||||||||||||||
Merced, CA 95348 | ||||||||||||||||||||||||
Dr. Paul A. Kaye Family | 75,000 | * | 75,000 | 75,000 | — | 0 | % | |||||||||||||||||
Trust D/T/D 10/06/93 | ||||||||||||||||||||||||
Dr. Paul A. Kaye Trustee | ||||||||||||||||||||||||
9 Diamonte Lane | ||||||||||||||||||||||||
Rancho Palos Verdes, CA 90275 | ||||||||||||||||||||||||
Brian J. Keller & | 187,500 | * | 187,500 | 187,500 | — | 0 | % | |||||||||||||||||
Debra M. Keller JT WROS | ||||||||||||||||||||||||
1246 130th Avenue | ||||||||||||||||||||||||
New Richmond, WI 54017 | ||||||||||||||||||||||||
James Kelly | 75,000 | * | 75,000 | 75,000 | — | 0 | % | |||||||||||||||||
1558 E. County Road | ||||||||||||||||||||||||
800 N. | ||||||||||||||||||||||||
Ockans, IN 47452 | ||||||||||||||||||||||||
Christopher Kemp | 75,000 | * | 75,000 | 75,000 | — | 0 | % | |||||||||||||||||
2528 Boulder Lane | ||||||||||||||||||||||||
Auburn Hills, MI 48326 |
43
Table of Contents
Shares of Common | Number of | Total | ||||||||||||||||||||||
Stock Beneficially | Shares of Common | Number | ||||||||||||||||||||||
Owned Prior to Offering | Stock Registered | of Shares | Shares of Common | |||||||||||||||||||||
(All exercisable within | for Sale | of | Stock Beneficially | |||||||||||||||||||||
60 days of Prospectus) | (All exercisable | Common | Owned After Offering | |||||||||||||||||||||
Selling | Number of | within 60 days | Stock | Number | ||||||||||||||||||||
Stockholder | Shares | Percent | of Prospectus) | Registered for Sale | of Shares | Percent | ||||||||||||||||||
Stephen N. Kitchens & | 262,500 | 1 | % | 262,500 | 262,500 | — | 0 | % | ||||||||||||||||
Martha M. Kitchens | ||||||||||||||||||||||||
JT WROS | ||||||||||||||||||||||||
28 Fox Vale Lane | ||||||||||||||||||||||||
Nashville, TN 37221 | ||||||||||||||||||||||||
Lester Krasno | 225,000 | 1 | % | 225,000 | 225,000 | — | 0 | % | ||||||||||||||||
400 North 2nd Steet | ||||||||||||||||||||||||
Pottsville, PA 17901 | ||||||||||||||||||||||||
Edwin Kriel | 75,000 | * | 75,000 | 75,000 | — | 0 | % | |||||||||||||||||
2904 Pocock Road | ||||||||||||||||||||||||
Monkton, MD 21111 | ||||||||||||||||||||||||
Daniel J. Lange | 187,500 | * | 187,500 | 187,500 | — | 0 | % | |||||||||||||||||
20800 Hunters Run | ||||||||||||||||||||||||
Brookfield, WI 53045 | ||||||||||||||||||||||||
Lind Family Investments LP | 150,000 | * | 150,000 | 150,000 | — | 0 | % | |||||||||||||||||
1000 West Washington St. | ||||||||||||||||||||||||
Suite #502 | ||||||||||||||||||||||||
Chicago, IL 60607 | ||||||||||||||||||||||||
Barry Lind Revocable Trust | 750,000 | 2 | % | 750,000 | 750,000 | — | 0 | % | ||||||||||||||||
Barry Lind Trustee | ||||||||||||||||||||||||
U/A/D 12/19/1989 | ||||||||||||||||||||||||
1000 West Washinton St. | ||||||||||||||||||||||||
Suite #502 | ||||||||||||||||||||||||
Chicago, IL 60607 | ||||||||||||||||||||||||
Pershing LLC As Custodian | 600,000 | 2 | % | 600,000 | 600,000 | — | 0 | % | ||||||||||||||||
FBO Lance Lindsey IRA | ||||||||||||||||||||||||
7700 Blanding Blvd. | ||||||||||||||||||||||||
Jacksonville, FL 32244 | ||||||||||||||||||||||||
Dwight Long | 375,000 | 1 | % | 375,000 | 375,000 | — | 0 | % | ||||||||||||||||
406 Belle Glen Lane | ||||||||||||||||||||||||
Brentwood, TN 37027 | ||||||||||||||||||||||||
Jeffrey S. McCorstin | 75,000 | * | 75,000 | 75,000 | — | 0 | % | |||||||||||||||||
4750 Blue Mountain | ||||||||||||||||||||||||
Yorba Linda, CA 92887 | ||||||||||||||||||||||||
Glen Miskiewicz | 187,500 | * | 187,500 | 187,500 | — | 0 | % | |||||||||||||||||
Apt. 724 | ||||||||||||||||||||||||
48 Par-La-Ville Road | ||||||||||||||||||||||||
Hamilton HM11 | ||||||||||||||||||||||||
Bermuda | ||||||||||||||||||||||||
Enrico Monaco | 187,500 | * | 187,500 | 187,500 | — | 0 | % | |||||||||||||||||
2230 Ocean Avenue | ||||||||||||||||||||||||
Brooklyn, NY 11229 |
44
Table of Contents
Shares of Common | Number of | Total | ||||||||||||||||||||||
Stock Beneficially | Shares of Common | Number | ||||||||||||||||||||||
Owned Prior to Offering | Stock Registered | of Shares | Shares of Common | |||||||||||||||||||||
(All exercisable within | for Sale | of | Stock Beneficially | |||||||||||||||||||||
60 days of Prospectus) | (All exercisable | Common | Owned After Offering | |||||||||||||||||||||
Selling | Number of | within 60 days | Stock | Number | ||||||||||||||||||||
Stockholder | Shares | Percent | of Prospectus) | Registered for Sale | of Shares | Percent | ||||||||||||||||||
Natchez Morice | 150,000 | * | 150,000 | 150,000 | — | 0 | % | |||||||||||||||||
12 A West Bank Exwy | ||||||||||||||||||||||||
Gretna, LA 70056 | ||||||||||||||||||||||||
MSB Family Trust | 375,000 | 1 | % | 375,000 | 375,000 | — | 0 | % | ||||||||||||||||
D/T/D 6/25/93 | ||||||||||||||||||||||||
Michael Blechman TTEE | ||||||||||||||||||||||||
295 Shadowood Ln. | ||||||||||||||||||||||||
Northfield, IL 60093 | ||||||||||||||||||||||||
Daniel Navarro Jr. & | 75,000 | * | 75,000 | 75,000 | — | 0 | % | |||||||||||||||||
Richard Navarro JT WROS | ||||||||||||||||||||||||
2036 Highway 35 North | ||||||||||||||||||||||||
South Amboy, NJ 08879 | ||||||||||||||||||||||||
Pershing LLC As | 375,000 | 1 | % | 375,000 | 375,000 | — | 0 | % | ||||||||||||||||
Custodian | ||||||||||||||||||||||||
FBO Michael J. Radlove | ||||||||||||||||||||||||
IRA | ||||||||||||||||||||||||
2748 Blackbird Hollow | ||||||||||||||||||||||||
Cincinnati, OH 452 | ||||||||||||||||||||||||
Prahalathan Rajasekaran | 187,500 | * | 187,500 | 187,500 | — | 0 | % | |||||||||||||||||
1 Grosvenor Place | ||||||||||||||||||||||||
London, England SW1X7JJ | ||||||||||||||||||||||||
Gretchen Kinstler | 750,000 | 2 | % | 750,000 | 750,000 | — | 0 | % | ||||||||||||||||
49-365 Rio Arenoso | ||||||||||||||||||||||||
La Quinto, CA 92253 | ||||||||||||||||||||||||
Lawrence Silver | 375,000 | 1 | % | 375,000 | 375,000 | — | 0 | % | ||||||||||||||||
225 West Hubbard Suite 600 | ||||||||||||||||||||||||
Chicago, IL 60610 | ||||||||||||||||||||||||
Robert A. Snyder & | 75,000 | * | 75,000 | 75,000 | — | 0 | % | |||||||||||||||||
Beverly J. Snyder JT WROS | ||||||||||||||||||||||||
27297 Forest Grove Road | ||||||||||||||||||||||||
Evergreen, CO 80439 | ||||||||||||||||||||||||
Claire Spooner | 225,000 | 1 | % | 225,000 | 225,000 | — | 0 | % | ||||||||||||||||
111 Seaview Court | ||||||||||||||||||||||||
Neptune, NJ 07753 | ||||||||||||||||||||||||
Sharon Fay Strasser (9) | 187,500 | * | 187,500 | 187,500 | — | 0 | % | |||||||||||||||||
1 Hughes Center Drive | ||||||||||||||||||||||||
#1004-N | ||||||||||||||||||||||||
Las Vegas, NV 89109 | ||||||||||||||||||||||||
Henry H. Strauss | 75,000 | * | 75,000 | 75,000 | — | 0 | % | |||||||||||||||||
12 Howard Avenue | ||||||||||||||||||||||||
Tappan, NY 10983 | ||||||||||||||||||||||||
David Takacs | 150,000 | * | 150,000 | 150,000 | — | 0 | % | |||||||||||||||||
17073 Snyder Road | ||||||||||||||||||||||||
Bainbridge, OH 44023 |
45
Table of Contents
Shares of Common | Number of | Total | ||||||||||||||||||||||
Stock Beneficially | Shares of Common | Number | ||||||||||||||||||||||
Owned Prior to Offering | Stock Registered | of Shares | Shares of Common | |||||||||||||||||||||
(All exercisable within | for Sale | of | Stock Beneficially | |||||||||||||||||||||
60 days of Prospectus) | (All exercisable | Common | Owned After Offering | |||||||||||||||||||||
Selling | Number of | within 60 days | Stock | Number | ||||||||||||||||||||
Stockholder | Shares | Percent | of Prospectus) | Registered for Sale | of Shares | Percent | ||||||||||||||||||
Richard Terranova & | 375,000 | 1 | % | 375,000 | 375,000 | — | 0 | % | ||||||||||||||||
Vincent Terranova TEN COM | ||||||||||||||||||||||||
349 Bartlett Avenue | ||||||||||||||||||||||||
Staten Island, NY 10312 | ||||||||||||||||||||||||
William S. Tyrrell | 262,500 | 1 | % | 262,500 | 262,500 | — | 0 | % | ||||||||||||||||
2711 Edgehill Avenue | ||||||||||||||||||||||||
Bronx, NY 10463 | ||||||||||||||||||||||||
Herbert Weisberger | 112,500 | * | 112,500 | 112,500 | — | 0 | % | |||||||||||||||||
2904 West Clay Street | ||||||||||||||||||||||||
Richmond, VA 23230 | ||||||||||||||||||||||||
Darren R. Williams | 75,000 | * | 75,000 | 75,000 | — | 0 | % | |||||||||||||||||
17280 Timothy Way | ||||||||||||||||||||||||
Gladstone, OR 97027 | ||||||||||||||||||||||||
Robert A. Yates | 187,500 | * | 187,500 | 187,500 | — | 0 | % | |||||||||||||||||
Shakeseare No 15-1 Piso | ||||||||||||||||||||||||
Cuydad De Mexico | ||||||||||||||||||||||||
Distrito Federal 11590 | ||||||||||||||||||||||||
Mexico | ||||||||||||||||||||||||
Alan J. Young | 375,000 | 1 | % | 375,000 | 375,000 | — | 0 | % | ||||||||||||||||
1750 Braeside Avenue | ||||||||||||||||||||||||
Northbrook, IL 60062 | ||||||||||||||||||||||||
Jan Arnett | 187,500 | * | 187,500 | 187,500 | — | 0 | % | |||||||||||||||||
7 Longwood Road | ||||||||||||||||||||||||
Sandspoint, NY 11050 | ||||||||||||||||||||||||
Elliot Braun | 187,500 | * | 187,500 | 187,500 | — | 0 | % | |||||||||||||||||
C/O Atlantic Beverage | ||||||||||||||||||||||||
3775 Park Avenue | ||||||||||||||||||||||||
Edison, NJ 08820 | ||||||||||||||||||||||||
Larry J. Buck | 187,500 | * | 187,500 | 187,500 | — | 0 | % | |||||||||||||||||
1624 Brandon Drive | ||||||||||||||||||||||||
Hebron, KY 41048 | ||||||||||||||||||||||||
Keith H. Cooper | 150,000 | * | 150,000 | 150,000 | — | 0 | % | |||||||||||||||||
5840 De Claire Court | ||||||||||||||||||||||||
Atlanta, GA 30328 | ||||||||||||||||||||||||
Steven Gurewitsch | 112,500 | * | 112,500 | 112,500 | — | 0 | % | |||||||||||||||||
930 5th Avenue | ||||||||||||||||||||||||
Apt. 3-G | ||||||||||||||||||||||||
New York, NY 10021 | ||||||||||||||||||||||||
Antonio Hernandez | 187,500 | * | 187,500 | 187,500 | — | 0 | % | |||||||||||||||||
1575 Bengal Drive | ||||||||||||||||||||||||
El Paso, TX 79935 |
46
Table of Contents
Shares of Common | Number of | Total | ||||||||||||||||||||||
Stock Beneficially | Shares of Common | Number | ||||||||||||||||||||||
Owned Prior to Offering | Stock Registered | of Shares | Shares of Common | |||||||||||||||||||||
(All exercisable within | for Sale | of | Stock Beneficially | |||||||||||||||||||||
60 days of Prospectus) | (All exercisable | Common | Owned After Offering | |||||||||||||||||||||
Selling | Number of | within 60 days | Stock | Number | ||||||||||||||||||||
Stockholder | Shares | Percent | of Prospectus) | Registered for Sale | of Shares | Percent | ||||||||||||||||||
James Herron | 75,000 | * | 75,000 | 75,000 | — | 0 | % | |||||||||||||||||
601 Cleveland Street | ||||||||||||||||||||||||
Suite 950 | ||||||||||||||||||||||||
Clearwater, FL 33755 | ||||||||||||||||||||||||
Robert W. Higginson | 150,000 | * | 150,000 | 150,000 | — | 0 | % | |||||||||||||||||
247-F Rosario Blvd. | ||||||||||||||||||||||||
Santa Fe, NM 87501 | ||||||||||||||||||||||||
Don Jackler & | 187,500 | * | 187,500 | 187,500 | — | 0 | % | |||||||||||||||||
Alana Jackler JT WROS | ||||||||||||||||||||||||
246 E. 51st Street Suite 8 | ||||||||||||||||||||||||
New York, NY 10022 | ||||||||||||||||||||||||
Donald Mapes | 75,000 | * | 75,000 | 75,000 | — | 0 | % | |||||||||||||||||
532 Bellepoint Drive | ||||||||||||||||||||||||
St. Pete Beach, FL 33706 | ||||||||||||||||||||||||
Dr. John McPhail | 375,000 | 1 | % | 375,000 | 375,000 | — | 0 | % | ||||||||||||||||
603 Beamon Steet | ||||||||||||||||||||||||
Clinton, NC 28328 | ||||||||||||||||||||||||
Grace Melton | 375,000 | 1 | % | 375,000 | 375,000 | — | 0 | % | ||||||||||||||||
1250 S. Beverly Glen Blvd. | ||||||||||||||||||||||||
#311 | ||||||||||||||||||||||||
Los Angeles, CA 90024 | ||||||||||||||||||||||||
Larry R. Nichols & | 75,000 | * | 75,000 | 75,000 | — | 0 | % | |||||||||||||||||
Janet B. Nichols JT WROS | ||||||||||||||||||||||||
9348 Burning Tree Dr. | ||||||||||||||||||||||||
Grand Blanc, MI 48439 | ||||||||||||||||||||||||
Pershing LLC As Custodian | 187,500 | * | 187,500 | 187,500 | — | 0 | % | |||||||||||||||||
FBO Michael J. Radlove IRA | ||||||||||||||||||||||||
2748 Blackbird Hollow | ||||||||||||||||||||||||
Cincinnati, OH 45244 | ||||||||||||||||||||||||
Barry Saxe | 187,500 | * | 187,500 | 187,500 | — | 0 | % | |||||||||||||||||
325 E. 41st Street | ||||||||||||||||||||||||
New York, NY 10017 | ||||||||||||||||||||||||
Theodore Staahl | 375,000 | 1 | % | 375,000 | 375,000 | — | 0 | % | ||||||||||||||||
1329 Spanos Court | ||||||||||||||||||||||||
Modesto, CA 95355 | ||||||||||||||||||||||||
Randolph Stephenson | 75,000 | * | 75,000 | 75,000 | — | 0 | % | |||||||||||||||||
10316-300 Feld Farm Lane | ||||||||||||||||||||||||
Charlotte, NC 28210 | ||||||||||||||||||||||||
Anthony Yodice | 375,000 | 1 | % | 375,000 | 375,000 | — | 0 | % | ||||||||||||||||
2443 Benson Avenue | ||||||||||||||||||||||||
Brooklyn, NY 11214 |
47
Table of Contents
Shares of Common | Number of | Total | ||||||||||||||||||||||
Stock Beneficially | Shares of Common | Number | ||||||||||||||||||||||
Owned Prior to Offering | Stock Registered | of Shares | Shares of Common | |||||||||||||||||||||
(All exercisable within | for Sale | of | Stock Beneficially | |||||||||||||||||||||
60 days of Prospectus) | (All exercisable | Common | Owned After Offering | |||||||||||||||||||||
Selling | Number of | within 60 days | Stock | Number | ||||||||||||||||||||
Stockholder | Shares | Percent | of Prospectus) | Registered for Sale | of Shares | Percent | ||||||||||||||||||
Michael Blumer (7) | 7,500 | * | 7,500 | 7,500 | — | 0 | % | |||||||||||||||||
1147 74th Street | ||||||||||||||||||||||||
Brooklyn, NY 11228 | ||||||||||||||||||||||||
Scott Mitchell Gutmanstein (7) | 2,000 | * | 2,000 | 2,000 | — | 0 | % | |||||||||||||||||
19 Pasture Lane | ||||||||||||||||||||||||
Old Bethpage, NY 11804 | ||||||||||||||||||||||||
Solomon Evan James (7) | 18,750 | * | 18,750 | 18,750 | — | 0 | % | |||||||||||||||||
273 St. Marks Place | ||||||||||||||||||||||||
Apt. 2B | ||||||||||||||||||||||||
Staten Island, NY 10301 | ||||||||||||||||||||||||
Michele Markowitz (7) | 260,188 | 1 | % | 260,188 | 260,188 | — | 0 | % | ||||||||||||||||
c/o Joseph Stevens & Co., Inc. | ||||||||||||||||||||||||
59 Maiden Lane | ||||||||||||||||||||||||
32nd Floor | ||||||||||||||||||||||||
New York, NY 10038 | ||||||||||||||||||||||||
Fabio Migiaccio (7) | 99,000 | * | 99,000 | 99,000 | — | 0 | % | |||||||||||||||||
658 Henry Street | ||||||||||||||||||||||||
Brooklyn, NY 11231 | ||||||||||||||||||||||||
Frank Joseph Parascondola (7) | 10,000 | * | 10,000 | 10,000 | — | 0 | % | |||||||||||||||||
496 Elverton Ave | ||||||||||||||||||||||||
Staten Island, NY 10308 | ||||||||||||||||||||||||
Charles M Raspa (7) | 40,000 | * | 40,000 | 40,000 | — | 0 | % | |||||||||||||||||
45 Roosevelt Ave | ||||||||||||||||||||||||
Morganville, NJ 07751 | ||||||||||||||||||||||||
James Rathgeber (7) | 206,250 | 1 | % | 206,250 | 206,250 | — | 0 | % | ||||||||||||||||
14 Richboyrne Lane | ||||||||||||||||||||||||
Melville, NY 11747 | ||||||||||||||||||||||||
Evan S Taub (7) | 39,000 | * | 39,000 | 39,000 | — | 0 | % | |||||||||||||||||
148 Redwood Loop | ||||||||||||||||||||||||
Staten Island, NY 10309 | ||||||||||||||||||||||||
Scott P Tierney (7) | 31,875 | * | 31,875 | 31,875 | — | 0 | % | |||||||||||||||||
P.O. Box 90333 | ||||||||||||||||||||||||
Staten Island, NY 10309 | ||||||||||||||||||||||||
Total Number of Shares of Common Stock Registered for Sale | 24,441,033 | |||||||||||||||||||||||
* | Less than 1% | |
(1) | All share numbers are based on information that these selling stockholders supplied to us. The term “selling stockholders” also includes any transferees, pledges, donees, or other successors in interest to the selling stockholders named in the table below. To our knowledge, subject to applicable community property laws, each person named in the table has sole voting and investment power with respect to the shares of Common Stock set forth opposite such person’s name, unless otherwise indicated below. The |
48
Table of Contents
inclusion of any shares in this table does not constitute an admission of beneficial ownership by the selling stockholder. | ||
(2) | Indicates a person that has, within the past three years, served as an employee, officer or director of the company. | |
(3) | Indicates a person that has served as a consultant for the Company for 1 month after his employment with the Company ended. | |
(4) | Indicates a person that has served as a consultant for the Company for 3 months after his employment with the Company ended. | |
(5) | Indicates a person that has served as a consultant for the Company for 6 months after his employment with the Company ended. | |
(6) | Indicates personnel who are employees of Pali Capital, a registered broker dealer. These individuals received these securities in connection with an investment in secured promissory notes and/or in connection with fees related to the issuance of secured promissory notes. | |
(7) | Indicates personnel who are employees of Joseph Stevens & Co., Inc., a registered broker dealer. These individuals received warrants as part of compensation pursuant to a placement agency agreement between us and Joseph Stevens & Co., Inc. Accordingly, such shares are restricted in accordance with Rule 2710(g)(1) of the NASD Conduct Rules. | |
(8) | Commerce Energy Group owns over 13% of our stock, and under certain definitions, may be considered an affiliate of our company. Until April 28, 2005, we had an exclusive licensing agreement with Commerce Energy Group for technology we own, as discussed above under “Relationship with Commerce Energy Corporation and Commerce Energy Group.” | |
(9) | Sharon Strasser is married to the Company’s Chief Executive Officer, Steven Strasser. Mr. Strasser denies beneficial ownership of Mrs. Strasser’s Shares. | |
(10) | Nicholas Anderson owns 258,306 shares of common stock, 66,000 warrants to purchase common stock and 327,404 stock options. The common stock underlying Mr. Anderson’s warrants are the only securities beneficially owned that are being registered hereunder. The remaining shares of common stock and stock options do not have registration rights and are not being registered. |
49
Table of Contents
Total Number | Weighted | |||||||||||||||
of Shares | Average | Total Number | ||||||||||||||
Underlying | Exercise Price | of Shares | Weighted Average | |||||||||||||
Options | Per Share | Underlying | Exercise Price For | |||||||||||||
Before this | Before This | Options After | Shares After this | |||||||||||||
Description | Offering | Offering | This Offering | Offering | ||||||||||||
2000 Stock Option and Restricted Stock Plan | 13,284,896 | $ | 0.35 | 13,284,896 | $ | 0.35 | ||||||||||
1994 Stock Option Plan | — | $ | — | — | $ | — | ||||||||||
Total | 13,284,896 | $ | 0.35 | 13,284,896 | $ | 0.35 | ||||||||||
50
Table of Contents
• | prior to such date, the corporation’s board of directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; | ||
• | upon consummation of the transaction that resulted in such person becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding, shares owned by certain directors or certain employee stock plans; or | ||
• | on or after the date the stockholder became an interested stockholder, the business combination is approved by the corporation’s board of directors and authorized by the affirmative vote, and not by written consent, of at least two-thirds of the outstanding voting stock of the corporation excluding that owned by the interested stockholder. |
• | 1% of the number of shares of Common Stock then outstanding, which as of May 9, 2007 would equal approximately 390,000 shares; or | ||
• | the average weekly trading volume of our Common Stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale. |
51
Table of Contents
• | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; | ||
• | block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; | ||
• | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; | ||
• | an exchange distribution in accordance with the rules of the applicable exchange; | ||
• | privately negotiated transactions; | ||
• | settlement of short sales entered into after the date of this prospectus; | ||
• | broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share; | ||
• | a combination of any such methods of sale; | ||
• | through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; or | ||
• | any other method permitted pursuant to applicable law. |
52
Table of Contents
• | it intends to take possession of the registered securities or to facilitate the transfer of such certificates; | ||
• | the complete details of how the selling shareholders shares are and will be held, including location of the particular accounts; | ||
• | whether the member firm or any direct or indirect affiliates thereof have entered into, will facilitate or otherwise participate in any type of payment transaction with the selling shareholders, including details regarding any such transactions; and | ||
• | in the event any of the securities offered by the selling shareholders are sold, transferred, assigned or hypothecated by any selling shareholder in a transaction that directly or indirectly involves a member firm of the NASD or any affiliates thereof, that prior to or at the time of said transaction the member firm will timely file all relevant documents with respect to such transaction(s) with the Corporate Finance Department of the NASD for review. |
53
Table of Contents
54
Table of Contents
55
Table of Contents
Table of Contents
Page | ||||
F-1 | ||||
Financial Statements: | ||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 - F-27 |
Table of Contents
Power Efficiency Corporation
Las Vegas, Nevada
Certified Public Accountants
Livingston, New Jersey
F-1
Table of Contents
ASSETS | ||||
CURRENT ASSETS: | ||||
Cash | $ | 1,693,584 | ||
Accounts receivable, net of reserve and allowance of $40,916 | 32,193 | |||
Inventories, net | 117,639 | |||
Prepaid expenses and other current assets | 70,468 | |||
Total Current Assets | 1,913,884 | |||
PROPERTY AND EQUIPMENT, Net | 76,056 | |||
OTHER ASSETS: | ||||
Deposits | 33,875 | |||
Patents, net | 33,811 | |||
Goodwill | 1,929,963 | |||
Inventories — long-term, net | 39,213 | |||
Deferred financing costs, net | 11,228 | |||
2,048,090 | ||||
$ | 4,038,030 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||
CURRENT LIABILITIES: | ||||
Accounts payable and accrued expenses | $ | 537,133 | ||
Accrued salaries and payroll taxes | 47,970 | |||
Notes payable — Arens Investment Company, net | 10,087 | |||
Total Current Liabilities | 595,190 | |||
LONG-TERM LIABILITIES: | ||||
Notes Payable - 2008, net | 1,397,927 | |||
Total Long-Term Liabilities | 1,397,927 | |||
Total Liabilities | 1,993,117 | |||
COMMITMENTS AND CONTINGENCIES | ||||
STOCKHOLDERS’ EQUITY: | ||||
Series A-1 Convertible Preferred Stock, $0.001 par value 10,000,000 shares autorized, none issued or outstanding | — | |||
Common stock, $0.001 par value, 100,000,000 shares authorized, 35,042,009 shares issued and oustanding | 35,042 | |||
Additional paid-in capital | 24,927,839 | |||
Accumulated deficit | (22,917,968 | ) | ||
Total Stockholders’ Equity | 2,044,913 | |||
$ | 4,038,030 | |||
F-2
Table of Contents
Year Ended December 31, | ||||||||
2006 | 2005 | |||||||
REVENUES | $ | 188,811 | $ | 276,405 | ||||
COMPONENTS OF COST OF SALES: | ||||||||
Material, labor and overhead | 136,240 | 245,789 | ||||||
GROSS MARGIN | 52,571 | 30,616 | ||||||
COSTS AND EXPENSES: | ||||||||
Research and development | 567,591 | 418,016 | ||||||
Selling, general and administrative | 3,118,233 | 1,641,307 | ||||||
Depreciation and amortization | 34,028 | 22,470 | ||||||
Total Costs and Expenses | 3,719,852 | 2,081,793 | ||||||
LOSS FROM OPERATIONS | (3,667,281 | ) | (2,051,177 | ) | ||||
OTHER INCOME (EXPENSE): | ||||||||
Interest income | 9,243 | 13,847 | ||||||
Interest expense | (1,354,195 | ) | (529,387 | ) | ||||
Total Other Expenses, Net | (1,344,952 | ) | (515,540 | ) | ||||
LOSS BEFORE PROVISION FOR TAXES | (5,012,233 | ) | (2,566,717 | ) | ||||
PROVISION FOR TAXES | (8,542 | ) | (3,846 | ) | ||||
NET LOSS | $ | (5,020,775 | ) | $ | (2,570,563 | ) | ||
BASIC AND FULLY DILUTED LOSS PER COMMON SHARE | $ | (0.20 | ) | $ | (0.18 | ) | ||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||||||||
BASIC | 25,150,386 | 14,254,029 | ||||||
F-3
Table of Contents
Additional | Total | |||||||||||||||||||||||||||
Common Stock | Preferred Stock | Paid-in | Accumulated | Stockholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
Balance, January 1, 2005 | 5,020,418 | $ | 5,020 | 3,328,737 | $ | 3,329 | $ | 16,386,611 | $ | (15,326,630 | ) | $ | 1,068,330 | |||||||||||||||
Issuance of preferred stock | — | — | 1,385,542 | 1,386 | 238,638 | — | 240,024 | |||||||||||||||||||||
Issuance of common stock | 14,500,000 | 14,500 | — | — | 1,360,633 | — | 1,375,133 | |||||||||||||||||||||
Common stock issued upon conversion of preferred stock | 3,918,848 | 3,919 | (4,714,279 | ) | (4,715 | ) | 796 | — | — | |||||||||||||||||||
Warrants and options issued in connection with services from consultants and vendors and the forgiveness of indebtedness | — | — | — | — | 140,502 | — | 140,502 | |||||||||||||||||||||
Warrants and options issued in connection with the issuance of common stock | — | — | — | — | 1,487,891 | — | 1,487,891 | |||||||||||||||||||||
Expenses related to issuance of common stock | — | — | — | — | (425,894 | ) | — | (425,894 | ) | |||||||||||||||||||
Net loss | (2,570,563 | ) | (2,570,563 | ) | ||||||||||||||||||||||||
Balance, December 31, 2005 | 23,439,266 | $ | 23,439 | — | $ | — | $ | 19,189,177 | $ | (17,897,193 | ) | $ | 1,315,423 | |||||||||||||||
Issuance of common stock | 11,000,008 | 11,000 | — | — | 3,199,300 | — | 3,210,300 | |||||||||||||||||||||
Common stock issued upon exercise of warrants | 602,735 | 603 | — | — | (603 | ) | — | — | ||||||||||||||||||||
Warrants and options issued in connection with the issuance of common stock and debt securities and to employees and consultants | — | — | — | — | 2,569,965 | — | 2,569,965 | |||||||||||||||||||||
Expenses related to issuance of common stock | — | — | — | — | (30,000 | ) | — | (30,000 | ) | |||||||||||||||||||
Net loss | (5,020,775 | ) | (5,020,775 | ) | ||||||||||||||||||||||||
Balance, December 31, 2006 | 35,042,009 | $ | 35,042 | — | $ | — | $ | 24,927,839 | $ | (22,917,968 | ) | $ | 2,044,913 | |||||||||||||||
F-4
Table of Contents
Year Ended December 31, | ||||||||
2006 | 2005 | |||||||
CASH FLOWS PROVIDED BY (USED FOR): | ||||||||
OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (5,020,775 | ) | $ | (2,570,563 | ) | ||
Adjustments to reconcile net loss to net cash used for operating activities: | ||||||||
Bad debt expense | 11,470 | 14,963 | ||||||
Depreciation and amortization | 34,028 | 22,470 | ||||||
Loss on disposition of fixed assets | 585 | — | ||||||
Debt discount related to issuance of debt securities | 1,039,451 | 252,015 | ||||||
Amortization of deferred financing costs | 70,364 | 80,584 | ||||||
Warrants and options issued in connection with settlements, services from consultants, vendors, the forgiveness of indebtedness, the issuance of debt, and to employees and consultants | 1,074,848 | 140,502 | ||||||
Common Stock issued for consulting services | 90,000 | — | ||||||
Changes in certain assets and liabilities: | ||||||||
Accounts receivable | 26,464 | (53,556 | ) | |||||
Inventory | 14,487 | 16,478 | ||||||
Prepaid expenses and other | (3,206 | ) | (65,337 | ) | ||||
Deposits | (33,875 | ) | — | |||||
Restricted cash related to payment of indebtedness | (4,688 | ) | 215,033 | |||||
Other assets | — | (6,339 | ) | |||||
Accounts payable and accrued expenses | (55,454 | ) | (46,685 | ) | ||||
Customer deposits | (5,105 | ) | 5,105 | |||||
Accrued salaries and payroll taxes | 4,682 | (85,179 | ) | |||||
Net Cash Used for Operating Activities | (2,756,724 | ) | (2,080,509 | ) | ||||
INVESTING ACTIVITIES: | ||||||||
Purchase of property, equipment and other assets | (90,567 | ) | (4,613 | ) | ||||
Net Cash Used for Investing Activities | (90,567 | ) | (4,613 | ) | ||||
FINANCING ACTIVITIES: | ||||||||
Deferred financing costs | — | (63,457 | ) | |||||
Proceeds from issuance of equity securities, net of costs | 3,180,000 | 2,677,153 | ||||||
Proceeds from issuance of debt securities | 2,000,000 | 125,000 | ||||||
Proceeds from line of credit | 1,500,000 | — | ||||||
Note payable from legal settlement with former landlord, net | — | 38,297 | ||||||
Payments on notes payable | (1,648,245 | ) | — | |||||
Payments on line of credit | (1,500,000 | ) | — | |||||
Payments on loans to stockholders, officers and former officers | — | (75,222 | ) | |||||
Net Cash Provided by Financing Activities | 3,531,755 | 2,701,771 | ||||||
INCREASE IN CASH | 684,464 | 616,649 | ||||||
CASH | ||||||||
Beginning of year | 1,009,120 | 392,471 | ||||||
End of year | $ | 1,693,584 | $ | 1,009,120 | ||||
F-5
Table of Contents
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
Table of Contents
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
Table of Contents
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
Table of Contents
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
Table of Contents
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
Prepaid insurance | $ | 29,019 | ||
Prepaid expenses | 41,449 | |||
Prepaid expenses and other current assets | $ | 70,468 | ||
Machinery and equipment | $ | 86,341 | ||
Office furniture and equipment | 23,520 | |||
109,860 | ||||
Less: Accumulated depreciation | 33,804 | |||
Property and Equipment, Net | $ | 76,056 | ||
Table of Contents
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
Patents | $ | 42,675 | ||
Less: Accumulated amortization | 8,864 | |||
Intangible Assets, Net | $ | 33,811 | ||
2007 | $ | 992 | ||
2008 | 992 | |||
2009 | 992 | |||
2010 | 992 | |||
2011 | 992 | |||
Thereafter | 28,851 | |||
$ | 33,811 | |||
Table of Contents
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
County | 2006 | 2005 | ||||||
Canada | — | 24 | % | |||||
Mexico | — | 7 | % | |||||
Sweden | 3 | % | 1 | % |
Work in process | $ | 21,442 | ||
Raw materials | 152,378 | |||
Reserve for inventory obsolescence | (16,968 | ) | ||
$ | 156,852 | |||
2006 | 2005 | |||||||
Statutory rate | (34 | )% | (34 | )% | ||||
State income tax – all states | (6 | )% | (6 | )% | ||||
(40 | )% | (40 | )% | |||||
Current year valuation allowance | 40 | % | 40 | % | ||||
Benefit for income taxes | 0 | % | 0 | % | ||||
Table of Contents
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
Average | ||||||||
Warrants | Exercise Price | |||||||
Warrants outstanding at January 1, 2005 | 2,580,702 | $ | 0.77 | |||||
Issued during 2005 | 10,678,657 | 0.39 | ||||||
Expired during 2005 | (7,142 | ) | 14.00 | |||||
Warrants outstanding at December 31, 2005 | 13,252,217 | 0.45 | ||||||
Issued during 2006 | 10,821,576 | 0.36 | ||||||
Exercised during 2006 | (1,701,063 | ) | 0.20 | |||||
Warrants outstanding at December 31, 2006 | 22,372,730 | $ | 0.42 | |||||
Table of Contents
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
Average | ||||||||||
Shares | Exercise Price | |||||||||
Options outstanding and exercisable at January 1, 2005 | 3,172,732 | $ | 2.00 | |||||||
Granted during 2005 | 11,250,000 | 0.27 | ||||||||
Cancelled during 2005 | (1,857,396 | ) | 0.72 | |||||||
Expired during 2005 | (94,973 | ) | 8.46 | |||||||
Options outstanding and exercisable at December 31, 2005 | 12,470,363 | $ | 0.46 | |||||||
Granted during 2006 | 5,587,500 | 0.24 | ||||||||
Cancelled during 2006 | (3,259,592 | ) | 0.45 | |||||||
Expired during 2006 | (63,375 | ) | 14.00 | |||||||
Options outstanding and exercisable at December 31, 2006 | 14,734,896 | $ | 0.33 | |||||||
Table of Contents
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
2006 | 2005 | |||||||
Net loss — as reported | $ | (5,050,775 | ) | $ | (2,570,563 | ) | ||
Required adjustment to net loss | 1,074,848 | — | ||||||
Net loss — pro forma | $ | (3,975,927 | ) | $ | (2,570,563 | ) | ||
Loss per common share — as reported | (0.20 | ) | (0.18 | ) | ||||
Loss per common share — pro forma | (0.16 | ) | (0.18 | ) |
Table of Contents
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
Year | ||||
2007 | $ | 138,784 | ||
2008 | 142,720 | |||
2009 | 147,076 | |||
2010 | 151,511 | |||
2011 | 25,375 | |||
$ | 605,466 | |||
Table of Contents
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
Table of Contents
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
Table of Contents
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
2006 | 2005 | |||||||
Interest | $ | 314,750 | $ | 241,691 | ||||
Income/Franchise Taxes | $ | 8,542 | $ | 3,846 | ||||
Table of Contents
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
Table of Contents
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
Table of Contents
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
Table of Contents
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
Table of Contents
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
Table of Contents
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
Table of Contents
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
Table of Contents
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
Table of Contents
SEC Registration Fee | $ | — | ||
Legal Fees | 5,000 | |||
Accounting Fees | 3,500 | |||
Printing Fees | 6,000 | |||
Miscellaneous | 1,000 | |||
$ | 15,500 | |||
II-1
Table of Contents
II-2
Table of Contents
II-3
Table of Contents
II-4
Table of Contents
(a) | Exhibits | ||
See Exhibit Index at page II-9. | |||
(b) | Financial Statement Schedules |
(1) | To file, during any period in which it offers or sells securities, a post- effective amendment to this Registration Statement to: | ||
(a) | Include any prospectus required by Section 10(a)(3) of the Securities Act; |
(2) | For determining liability under the Securities Act, treat each post- effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time to be the initial bona fide offering. | ||
(3) | File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering. |
II-5
Table of Contents
II-6
Table of Contents
POWER EFFICIENCY CORPORATION | ||||
By: | /s/ STEVEN Z. STRASSER | |||
Steven Z. Strasser | ||||
Chairman and Chief Executive Officer | ||||
II-7
Table of Contents
Name | Title | Date | ||
/s/ STEVEN Z. STRASSER | Chairman and Chief Executive Officer | May 11, 2007 | ||
(Principal Executive Officer) | ||||
/s/ JOHN (BJ) LACKLAND | Chief Financial Officer | May 11, 2007 | ||
(Principal Financial and Accounting Officer) | ||||
* | Director | May 11, 2007 | ||
* | Director | May 11, 2007 | ||
* | Director | May 11, 2007 | ||
* | Director | May 11, 2007 | ||
* | Director | May 11, 2007 | ||
*BY: /s/ STEVEN Z. STRASSER | Attorney-in-Fact | May 11, 2007 | ||
II-8
Table of Contents
Exhibit | ||
Number | Description | |
3.1 | Certificate of Incorporation of the Company, incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-SB filed on October 20, 2000. | |
3.2 | Amendment to the Certificate of Incorporation of the Company dated June 5, 2002, incorporated by reference to Exhibit 3.1 to Company’s Current Report on Form 8-K filed on June 18, 2002. | |
3.3 | Amendment to the Certificate of Incorporation of the Company dated July 6, 2005; incorporated by reference to Exhibit 3.3 to the Company’s Form SB-2 Registration Statement filed October 25, 2005. | |
3.4 | Amendment to the Certificate of Incorporation of the Company dated October 13, 2005; incorporated by reference to Exhibit 3.4 to the Company’s Form SB-2 Registration Statement filed October 25, 2005. | |
3.5 | Amended and Restated By-laws of the Company dated March 23, 2004; incorporated by reference to Exhibit 3.1 to Company’s Quarterly Report on Form 10-QSB filed on May 14, 2004. | |
4.1 | Stock Purchase Agreement dated June 14, 2002, incorporated by reference to Exhibit 4.1 to Company’s Current Report on Form 8-K filed on June 18, 2002. | |
4.2 | Registration Rights Agreement dated June 14, 2002, incorporated by reference to Exhibit 4.4 to Company’s Current Report on Form 8-K filed on June 18, 2002. | |
4.3 | Certificate of Designation dated June 13, 2002, incorporated by reference to Exhibit 4.5 to Company’s Current Report on Form 8-K filed on June 18, 2002. | |
4.4 | Certificate of Amendment of Certificate of Designation of Series A Convertible Preferred Stock of Power Efficiency Corporation, incorporated by reference to Exhibit 4.2 to Company’s Current Report on Form 8-K filed on May 25, 2003. | |
4.5 | Specimen common stock Certificate of the Company, incorporated by reference to Exhibit 4.5 to the Company’s Form SB-2/A Registration Statement filed December 8, 2005. | |
4.6 | Agreement dated April 22, 2005, between the Company and Summit Energy Ventures, LLC, for the issuance of preferred stock and warrants; incorporated by reference to Exhibit 4.6 to the Company’s Form SB-2 Registration Statement filed October 25, 2005. | |
4.7 | Agreement dated April 22, 2005, between the Company and Commerce Energy Group, Inc., for the issuance of preferred stock and warrants; incorporated by reference to Exhibit 4.7 to the Company’s Form SB-2 Registration Statement filed October 25, 2005. | |
4.8 | Letter of Intent dated April 18, 2005, between the Company and Joseph Stevens & Company, Inc., with respect to the private offering of common stock and warrants; incorporated by reference to Exhibit 4.8 to the Company’s Form SB-2 Registration Statement filed October 25, 2005. | |
5.1 | Opinion of Jones Vargas as to the legality of the Company’s common stock and incorporated by reference to Exhibit 5.1 to the Company’s Form SB-2 Registration Statement filed December 19, 2005. | |
10.1 | Lease Agreement for Company’s Ann Arbor, Michigan facility dated February 16, 1996, incorporated by reference to Exhibit 10(c) to Company’s Annual Report on Form 10-SB filed on October 20, 2000. |
II-9
Table of Contents
Exhibit | ||
Number | Description | |
10.2 | Stock Purchase Warrant dated June 14, 2002, incorporated by reference to Exhibit 4.2 to Company’s Current Report on Form 8-K filed on June 18, 2002. | |
10.3 | Amended and Restated Stockholders’ Agreement dated June 14, 2002, incorporated by reference to Exhibit 4.3 to Company’s Current Report on Form 8-K filed on June 18, 2002. | |
10.4 | United States Patent #5,821,726, incorporated by reference to Exhibit 10(g) to Company’s Annual Report on Form 10-SB filed on October 20, 2000. | |
10.5 | 1994 Stock Option Plan, incorporated by reference to Exhibit 10(i) to Company’s Annual Report on Form 10-SB filed on October 20, 2000. | |
10.6 | Patent License Agreement (DN-858) with NASA, incorporated by reference to Exhibit 10.10 to Company’s Amended Annual Report on Form 10-SB/A filed on October 26, 2001. | |
10.7 | Patent License Agreement (DE-256) with NASA incorporated by reference to Exhibit 10.11 to Company’s Amended Annual Report on Form 10-SB/A filed on October 26, 2001. | |
10.8 | Settlement and Release Agreement with NASA incorporated by reference to Exhibit 10.12 to Company’s Amended Annual Report on Form 10-SB/A filed on October 26, 2001. | |
10.9 | Modification No. 1 to Patent License Agreement (DE-256) with NASA, incorporated by reference to Exhibit 10.13 to Company’s Amended Annual Report on Form 10-SB/A filed on October 26, 2001. | |
10.10 | Product Warranty, incorporated by reference to Exhibit 10.16 to Company’s Amended Annual Report on Form 10-SB/A filed on October 26, 2001. | |
10.11 | Test Report from Medsker Electric, Inc., incorporated by reference to Exhibit 10.17 to Company’s Amended Annual Report on Form 10-SB/A filed on October 26, 2001. | |
10.12 | Test Report from Oak Ridge National Laboratory, incorporated by reference to Exhibit 10.18 to Company’s Amended Annual Report on Form 10-SB/A filed on October 26, 2001. | |
10.13 | Test Report from Oregon State University – The Motor Systems Resource Facility, incorporated by reference to Exhibit 10.19 to Company’s Amended Annual Report on Form 10-SB/A filed on October 26, 2001. | |
10.14 | Test Report from Otis Elevator Co., incorporated by reference to Exhibit 10.20 to Company’s Amended Annual Report on Form 10-SB/A filed on October 26, 2001. | |
10.15 | Employment Agreement with Stephen Shulman, incorporated by reference to Exhibit 10.23 to Company’s Amended Annual Report on Form 10-SB/A filed on October 26, 2001. | |
10.16 | Employment Agreement with Nicholas Anderson, incorporated by reference to Exhibit 10.24 to Company’s Amended Annual Report on Form 10-SB/A filed on October 26, 2001. | |
10.17 | Employment Agreement with Raymond J. Skiptunis, incorporated by reference to Exhibit 10.24 to Company’s Annual Report on Form 10-KSB filed on March 31, 2003. | |
10.18 | Revolving Credit Note dated May 8, 2003, incorporated by reference to Exhibit 10.1 to Company’s Current Report on Form 8-K filed May 25, 2003. | |
10.19 | Security Agreement dated May, 2003, incorporated by reference to Exhibit 10.2 to Company’s Current Report on Form 8-K filed May 25, 2003. | |
10.20 | Certificate of Amendment of Warrant, incorporated by reference to Exhibit 10.4 to Company’s Current Report on Form 8-K filed May 25, 2003. |
II-10
Table of Contents
Exhibit | ||
Number | Description | |
10.21 | Employment Agreement with Richard Koch dated June 9, 2003, incorporated by reference to Exhibit 10.1 to Company’s Current Report on Form 8-K filed June 20, 2003. | |
10.22 | Settlement and Release Agreement with Raymond J. Skiptunis dated June 9, 2003, incorporated by reference to Exhibit 10.2 to Company’s Current Report on Form 8-K filed June 20, 2003. | |
10.23 | Employment Agreement with Raymond J. Skiptunis dated June 9, 2003 incorporated by reference to Exhibit 10.3 to Company’s Current Report on Form 8-K filed June 20, 2003. | |
10.24 | Employment Agreement with Keith Collin dated November 13, 2003, incorporated by reference to Exhibit 10.1 to Company’s Quarterly Report on Form 10-QSB filed November 14, 2003. | |
10.25 | Employment Agreement with Thomas Mills dated October 6, 2003, incorporated by reference to Exhibit 10.2 to Company’s Quarterly Report on Form 10-QSB filed November 14, 2003. | |
10.26 | Subscription Agreement with Nicholas Anderson dated September 30, 2003, incorporated by reference to Exhibit 10.3 to Company’s Quarterly Report on Form 10-QSB filed November 14, 2003. | |
10.27 | Settlement Agreement with Nicholas Anderson dated September 30, 2003, incorporated by reference to Exhibit 10.4 to Company’s Quarterly Report on Form 10-QSB filed November 14, 2003. | |
10.28 | Settlement Agreement and Mutual General Release with Stephen L. Shulman and Summit Energy Ventures, LLC dated October 3, 2003, incorporated by reference to Exhibit 10.5 to Company’s Quarterly Report on Form 10-QSB filed November 14, 2003. | |
10.29 | Promissory Note granted to Stephen Shulman dated September 15, 2003 incorporated by reference to Exhibit 10.6 to Company’s Quarterly Report on Form 10-QSB filed November 14, 2003. | |
10.30 | Amendment to the Amended and Restated Stockholders’ Agreement among Anthony Caputo, Nicholas Anderson, Philip Elkus, Stephen Shulamn, Performance Control, LLC, Summit Energy Ventures, LLC and Power Efficiency Corporation dated September 22, 2003, incorporated by reference to Exhibit 10.7 to Company’s Quarterly Report on Form 10-QSB filed November 14, 2003. | |
10.31 | Regulation S Stock Purchase Agreement with Starz Investments Limited dated April 23, 2003, incorporated by reference to Exhibit 10.9 to Company’s Quarterly Report on Form 10-QSB filed November 14, 2003. | |
10.32 | Addendum to the Regulation S Stock Purchase Agreement dated June 13, 2003 incorporated by reference to Exhibit 10.10 to Company’s Quarterly Report on Form 10-QSB filed November 14, 2003. | |
10.33 | Warrant Agreement with Summit Energy Ventures, LLC dated February 26, 2004, incorporated by reference to Exhibit 10.33 to Company’s Current Report on Form 8-K filed February 27, 2004. | |
10.34 | Consulting Agreement with Raymond Skiptunis dated September 22, 2003, incorporated by reference to Exhibit 10.35 to Company’s Annual Report on Form 10-KSB filed March 10, 2004. |
II-11
Table of Contents
Exhibit | ||
Number | Description | |
10.35 | Business Property Lease with Arens Investment Company dated November 1, 2003, incorporated by reference to Exhibit 10.36 to Company’s Annual Report on Form 10-KSB filed March 10, 2004. | |
10.36 | Subscription Agreement with Richard Koch dated December 23, 2003, incorporated by reference to Exhibit 10.37 to Company’s Annual Report on Form 10-KSB filed March 10, 2004. | |
10.37 | Subscription Agreement with Raymond Skiptunis dated January 8, 2004, incorporated by reference to Exhibit 10.38 to Company’s Annual Report on Form 10-KSB filed March 10, 2004. | |
10.38 | Subscription Agreement with Leonard Bellezza dated February 16, 2004, incorporated by reference to Exhibit 10.39 to Company’s Annual Report on Form 10-KSB filed March 10, 2004. | |
10.39 | Letter agreement with Pali Capital, Inc. dated February 25, 2004, incorporated by reference to Exhibit 10.40 to Company’s Annual Report on Form 10-KSB filed March 10, 2004. | |
10.40 | Amended and Restated 2000 Stock Option and Restricted Stock Plan dated February 23, 2004, incorporated by reference to Exhibit 10.41 to Company’s Annual Report on Form 10-KSB filed March 10, 2004. | |
10.41 | Amended and Restated 1994 Stock Option Plan, incorporated by reference to Exhibit 10.42 to Company’s Annual Report on Form 10-KSB filed March 10, 2004. | |
10.42 | Line of Credit Agreement with Summit Energy Ventures, LLC, incorporated by reference to Exhibit 10.1 to Company’s Current Report on Form 8-K filed May 5, 2004. | |
10.43 | Single Phase Licensing Agreement with Commerce Energy Group, incorporated by reference to Exhibit 10.1 to Company’s Quarterly Report on Form 10-QSB filed November 15, 2004. | |
10.44 | Settlement and Consulting Agreement with Ray Skiptunis dated September 27, 2004, incorporated by reference to Exhibit 10.45 to the Company’s Annual Report on Form 10-KSB filed on March 31, 2005. | |
10.45 | Settlement Agreement with Richard Koch dated December 15, 2004, incorporated by reference to Exhibit 10.46 to the Company’s Annual Report on Form 10-KSB filed on March 31, 2005. | |
10.46 | Management Agreement with Northwest Power Management, Inc. dated November 18, 2004, incorporated by reference to Exhibit 10.47 to the Company’s Annual Report on Form 10-KSB filed on March 31, 2005. | |
10.47 | Business Property Lease Amendment involving Glenborough LLC and Northwest Power Management, Inc. dated February 7, 2005, incorporated by reference to Exhibit 10.48 to the Company’s Annual Report on Form 10-KSB filed on March 31, 2005. | |
10.48 | Settlement and Consulting Agreement with Keith Collin dated September 27, 2004, incorporated by reference to Exhibit 10.49 to the Company’s Annual Report on Form 10-KSB filed on March 31, 2005. | |
10.49 | Settlement Agreement with Tom Mills dated December 21, 2004, incorporated by reference to Exhibit 10.50 to the Company’s Annual Report on Form 10-KSB filed on March 31, 2005. |
II-12
Table of Contents
Exhibit | ||
Number | Description | |
10.50 | Business Property Sublease with Famair, Inc. dated February 11, 2005, incorporated by reference to Exhibit10.51 to the Company’s Annual Report on Form 10-KSB filed on March 31, 2005. | |
10.51 | Placement Agency Agreement Dated as of June 1, 2005, between the Company and Joseph Stevens & Co., Inc.; incorporated by reference to Exhibit 10.51 to the Company’s Form SB-2 Registration Statement filed October 25, 2005. | |
10.52 | Form of Placement Agent Warrant issued pursuant to Exhibit 10.51; incorporated by reference to Exhibit 3.2 to Company’s Current Report on Form 8-K Filed on July 15,2005 | |
10.53 | Form of Investor Warrant; incorporated by reference to Exhibit 3.1 to Company’s Current Report on Form 8-k filed on July 15, 2005 | |
10.54 | Consulting agreement with George Boyadjieff, dated June 9, 2005; incorporated by reference to Exhibit 10.54 to the Company’s Form 10-KSB filed on March 31, 2005. | |
10.55 | Consulting agreement with Steven Blum dated February 21, 2006; incorporated by reference to Exhibit 10.55 to the Company’s Form 10-KSB filed on March 31, 2005. | |
10.56 | Consulting agreement with CEO Cast, Inc, dated January 2, 2006; incorporated by reference to Exhibit 10.56 to the Company’s Form 10-KSB filed on March 31, 2005. | |
10.57 | Letter agreement with USBX Advisory Services, LLC, dated January 6, 2006; incorporated by reference to Exhibit 10.57 to the Company’s Form 10-KSB filed on March 31, 2005. | |
10.58 | Employment agreement with Steven Strasser dated June 1, 2005; incorporated by reference to Exhibit 8.1 to the Company’s Current Report of Form 8-K filed July 13, 2005. | |
10.59 | Employment agreement with John Lackland dated June 1, 2005; incorporated by reference to Exhibit 8.2 to the Company’s Current Report of Form 8-K filed July 13, 2005. | |
10.60 | Employment agreement with Nicholas Anderson dated June 1, 2005; incorporated by reference to Exhibit 8.3 to the Company’s Current Report of Form 8-K filed July 13, 2005. | |
10.61 | Interim financing agreement with EMTUCK, LLC dated April 18, 2006; incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 24, 2006. | |
10.62 | Promissory note granted to EMTUCK, LLC dated April 19, 2006; incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 24, 2006. | |
10.63 | Security agreement with EMTUCK, LLC dated April 19, 2006; incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on April 24, 2006. | |
10.64 | Form of EMTUCK Warrant; incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on April 24, 2006. | |
10.65 | Promissory note granted to EMTUCK, LLC dated May 19, 2006; incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on May 26, 2006. | |
10.66 | Form of Pali Note Extension Consent Letter dated October 23, 2006; incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 27, 2006. | |
10.67 | Form of Securities Purchase Agreement, dated November 30, 2006; incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 5, 2006. | |
10.68 | Form of Note, dated November 30, 2006; incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on December 5, 2006. |
II-13
Table of Contents
Exhibit | ||
Number | Description | |
10.69 | Form of Debt Warrant; incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on December 5, 2006. | |
10.70 | Form of Equity Warrant; incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on December 5, 2006. | |
13.1 | Annual Report on Form 10-KSB for the year ended December 31, 2004, incorporated by reference filed on March 31, 2005. | |
13.2 | Amended Annual Report on Form 10-KSB/A for the year ended December 31, 2004, incorporated by reference filed on September 21, 2005. | |
13.3 | Annual Report on Form 10-KSB for the year ended December 31, 2005, incorporated by reference filed on March 31, 2006. | |
13.4 | Annual Report on Form 10-KSB for the year ended December 31, 2006, incorporated by reference filed on April 2, 2007. | |
20.1 | Registration Statement on Form SB-2, incorporated by reference filed on December 20, 2005 | |
20.2 | Post Effective Amendment 1 to Form SB-2, incorporated by reference filed on September 19, 2006. | |
22.1 | Proxy Statement on Form DEF 14A, incorporated by reference filed on January 27, 2006 | |
23.1 | Consent of Sobel & Co., LLC, Certified Public Accountants; filed herewith. | |
23.2 | Consent of Jones Vargas (included in Exhibit 5.1). | |
24.1 | Power of Attorney (included in signature page). |
II-14