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Nevada | 2869 | 20-3240178 | ||
(State or Other Jurisdiction of Incorporation or Organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification No.) |
(805) 389-3499
(Address of Principal Place of Business or Intended Principal Place of Business)
CHIEF EXECUTIVE OFFICER
1140 AVENIDA ACASO
CAMARILLO, CALIFORNIA 93012
(805) 389-3499
DLA PIPER US LLP
203 NORTH LASALLE STREET, SUITE 1800
CHICAGO, IL 60601-1293
(312) 368-4014
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The information in this prospectus is not complete and may be changed. We may not 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 it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
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EXHIBIT 5.1 | ||||||||
EXHIBIT 21.1 | ||||||||
EXHIBIT 23.2 |
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Common Stock Offered1 | 36,955,558 shares | |
Offering Price | Market price or privately negotiated prices. | |
Common Stock Outstanding2 | 52,532,202 shares | |
Common Stock Outstanding After the Offering3 | 71,050,721 shares | |
Use of Proceeds | We will not receive any proceeds from the sale of the shares offered by the selling stockholders. Any proceeds we receive from the selling stockholders upon their exercise of warrants to purchase the shares included in the shares that are being offered by them hereunder will be used for general working capital purposes and capital expenditures. | |
OTC Bulletin Board Symbol | KRBF | |
Risk Factors | An investment in our common stock involves a high degree of risk. You should carefully consider the risk factors set forth under “Risk Factors” beginning on page 4 and the other information contained in this prospectus before making an investment decision regarding our common stock. |
1 | Includes 18,437,039 shares of common stock currently issued and outstanding and 18,518,519 shares of common stock issuable by us upon exercise of outstanding warrants to acquire our common stock. | |
2 | This number does not include shares of common stock underlying options outstanding under our equity incentive plan or shares of common stock issuable by us upon the exercise of our outstanding warrants, under which our stockholders have the right to acquire 18,518,519 shares of common stock. | |
3 | Assumes the full exercise of warrants held by the selling stockholders to acquire 18,518,519 shares of common stock and excludes shares subject to outstanding but unexercised options. |
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• | obtaining all required permits, consents and regulatory approvals from government agencies and other third parties for our anticipated construction and operation of owned biodiesel production plants and related facilities, as well as for the future operation of those facilities; | ||
• | successfully commercializing the STT® Reactor technology for biodiesel; | ||
• | arranging reasonably priced insurance to cover operating risks and other adverse outcomes which could impair the business; and | ||
• | market conditions for fuels that make biodiesel a competitively priced product. |
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• | meet our capital needs; | ||
• | expand our systems effectively, efficiently or in a timely manner; | ||
• | allocate our human resources optimally; | ||
• | identify and hire qualified employees or retain valued employees; or | ||
• | incorporate effectively the components of any business that we may acquire in our effort to achieve growth. |
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• | adequate rail capacity, including sufficient numbers of dedicated tanker cars; | ||
• | sufficient storage facilities for feedstock and biodiesel; | ||
• | increases in truck fleets capable of transporting biodiesel within localized markets; and | ||
• | expansion of blending facilities and pipelines to handle biodiesel. |
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• | the degree and range of protection any patents will afford us against competitors, including whether third parties will find ways to invalidate or otherwise circumvent our patents; | ||
• | if and when patents will issue; | ||
• | if our issued patents will be valid or enforceable; | ||
• | whether or not others will obtain patents claiming aspects similar to those covered by our patents and patent applications; or | ||
• | whether we will need to initiate litigation or administrative proceedings which may be costly whether we win or lose. |
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• | competition, market and other developments; | ||
• | our ability to attract and retain quality employees; | ||
• | our ability to implement our sales, marketing, product development, manufacturing and investor/public relations plans; and | ||
• | the on-going accounting, legal and other costs of being a publicly-traded company. |
• | actual or anticipated variations in operating results; |
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• | the limited number of holders of the common stock, and the limited liquidity available through the OTC Bulletin Board; | ||
• | changes in financial estimates by securities analysts; | ||
• | changes in the economic performance and/or market valuations of other energy companies; | ||
• | the timing and type of financing and related dilution impact on the stockholders; | ||
• | our announcement of significant acquisitions, strategic partnerships, joint ventures or capital commitments; | ||
• | additions or departures of key personnel; | ||
• | sales or other transactions involving our capital stock; | ||
• | changes in the market for biodiesel fuel commodities or the capital markets generally, or both; | ||
• | changes in the availability of feedstock on commercially economic terms; | ||
• | changes in the demand for biodiesel fuel, including changes resulting from the expansion of other alternative fuels; | ||
• | changes in the social, political and/or legal climate; | ||
• | announcements of technological innovations or new products available to the biodiesel production industry; and/or | ||
• | announcements by relevant domestic and foreign government agencies related to incentives for alternative energy development programs. |
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The persons and entities named in the table have sole voting and sole investment power with respect to the shares set forth opposite the stockholder’s name, subject to community property laws, where applicable, unless otherwise noted in the footnotes to the table. The number of shares owned are those beneficially owned, as determined under the rules of the SEC, and such information is not necessarily indicative of beneficial ownership for any other purpose. We have assumed all shares reflected on the table that were acquired in our private offerings will be sold from time to time. Because the selling stockholders may offer all or any portion of the common stock listed in the table below, no estimate can be given as to the amount of those shares of common stock acquired in our private offerings that will be held by the selling stockholders upon the termination of any sales of common stock.
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Percentage of | ||||||||||||||||
Shares of | Common Stock | |||||||||||||||
Shares of | Common Stock | Outstanding | ||||||||||||||
Common Stock | Shares of | Owned Upon | Upon | |||||||||||||
Owned Before | Common Stock | Completion of | Completion of | |||||||||||||
the Offering | Being Offered | the Offering(a) | Offering | |||||||||||||
“Wellington Group”(b) | ||||||||||||||||
British Columbia Investment Management Corporation (nominee: Hare & Co.)1 | 670,700 | 670,700 | * | * | ||||||||||||
Howard Hughes Medical Institute (nominee: Mac & Co.)2 | 902,800 | 902,800 | * | * | ||||||||||||
New York Nurses Association Pension Plan (nominee: Ell & Co.)3 | 384,300 | 384,300 | * | * | ||||||||||||
Oregon Investment Council (nominee: Westcoast & Co.)4 | 1,193,160 | 1,193,160 | * | * | ||||||||||||
Public Sector Pension Investment Board (nominee: Mac & Co.)5 | 1,470,880 | 1,470,880 | * | * | ||||||||||||
Radian Group, Inc. (nominee: Ell & Co.)6 | 168,000 | 168,000 | * | * | ||||||||||||
The Dow Chemical Employees’ Retirement Plan (nominee: Kane & Co.)7 | 898,700 | 898,700 | * | * | ||||||||||||
The Retirement Program Plan for Employees of Union Carbide Corporation (nominee: Kane & Co.)8 | 510,740 | 510,740 | * | * | ||||||||||||
The Robert Wood Johnson Foundation (nominee: Benchworthy & Co.)9 | 777,140 | 777,140 | * | * | ||||||||||||
WTC-CIF Emerging Companies Portfolio (nominee: Finwell & Co.)10 | 1,951,560 | 1,951,560 | * | * | ||||||||||||
WTC-CTF Emerging Companies Portfolio (nominee: Landwatch & Co.)11 | 1,272,020 | 1,272,020 | * | * | ||||||||||||
“Grey Group”(c) | ||||||||||||||||
Grey K Fund LP12 | 360,000 | 360,000 | * | * | ||||||||||||
Grey K Offshore Fund LTD13 | 1,121,480 | 1,121,480 | * | * | ||||||||||||
“Treaty Group”(d) | ||||||||||||||||
Treaty Oak Ironwood14 | 396,726 | 396,726 | * | * | ||||||||||||
Treaty Oak Master Fund15 | 344,016 | 344,016 | * | * | ||||||||||||
“Chestnut/Strong Branch”(e) | ||||||||||||||||
Chestnut Capital Partners II, LP16 | 1,455,740 | 1,455,740 | * | * | ||||||||||||
Strong Branch Ventures IV, LP17 | 1,425,740 | 1,425,740 | * | * | ||||||||||||
“Sanders Group”(f) | ||||||||||||||||
Sanders Opportunity Fund (Inst), LP18 | 413,642 | 413,642 | * | * | ||||||||||||
Sanders Opportunity Fund, LP18 | 126,360 | 126,360 | * | * | ||||||||||||
2003 Sanders Children’s Trust19 | 160,000 | 160,000 | * | * | ||||||||||||
“Smart Technology Group” | ||||||||||||||||
Smart Technology Ventures III SBIC, L.P.20 | 9,428,831 | 1,481,482 | 7,947,349 | 15.1 | % |
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Percentage of | ||||||||||||||||
Shares of | Common Stock | |||||||||||||||
Shares of | Common Stock | Outstanding | ||||||||||||||
Common Stock | Shares of | Owned Upon | Upon | |||||||||||||
Owned Before | Common Stock | Completion of | Completion of | |||||||||||||
the Offering | Being Offered | the Offering(a) | Offering | |||||||||||||
Y & S Nazarian Revocable Trust21 | 3,148,150 | 3,148,150 | * | * | ||||||||||||
Younes Nazarian 2006 Annuity Trust22 | 427,204 | 427,204 | * | * | ||||||||||||
Alpha Capital Austalt23 | 296,296 | 296,296 | * | * | ||||||||||||
George L. Ball24 | 80,000 | 80,000 | * | * | ||||||||||||
Bonner S. Ball25 | 74,080 | 74,080 | * | * | ||||||||||||
Sam Belzberg26 | 1,111,110 | 1,111,110 | * | * | ||||||||||||
Besser Kapital Fund Ltd.27 | 74,000 | 74,000 | * | * | ||||||||||||
Michael Chadwick28 | 40,000 | 40,000 | * | * | ||||||||||||
Mary Harris Cooper29 | 40,000 | 40,000 | * | * | ||||||||||||
Lee H. Corbin30 | 40,000 | 40,000 | * | * | ||||||||||||
Daniel A. Corbin31 | 80,000 | 80,000 | * | * | ||||||||||||
Crestview Capital Master, LLC32 | 740,742 | 740,742 | * | * | ||||||||||||
Cragston Management Corporation33 | 37,038 | 37,038 | * | * | ||||||||||||
David R. Fuchs Charitable Remainder Trust34 | 1,011,479 | 246,666 | 764,813 | 1.5 | % | |||||||||||
Sam Del Presto35 | 40,000 | 40,000 | * | * | ||||||||||||
Harry Edelson36 | 1,000,000 | 1,000,000 | * | * | ||||||||||||
Adrien Ellul37 | 740,748 | 740,748 | * | * | ||||||||||||
Frank J. Metyko Residuary Trust U/A DTD 10/08/198438 | 40,000 | 40,000 | * | * | ||||||||||||
Edwin Freedman39 | 120,000 | 120,000 | * | * | ||||||||||||
David Fuchs40 | 2,665,775 | 191,290 | 2,474,485 | 4.7 | % | |||||||||||
Michael J. Gaido, Jr.41 | 100,000 | 100,000 | * | * | ||||||||||||
Bill and Johnnie S. Haak42 | 50,000 | 50,000 | * | * | ||||||||||||
Fred Hagans43 | 74,080 | 74,080 | * | * | ||||||||||||
Sue M. Harris44 | 200,000 | 200,000 | * | * | ||||||||||||
Icon Capital Partners LP45 | 300,000 | 300,000 | * | * | ||||||||||||
Iroquois Master Fund Ltd.46 | 148,148 | 148,148 | * | * | ||||||||||||
Kammy Moalemzadeh SEP IRA47 | 74,074 | 74,074 | * | * | ||||||||||||
Knapp Trust u/t/d 7/1/200448 | 4,811,309 | 437,956 | 4,373,353 | 8.3 | % | |||||||||||
Brian Kuhn49 | 140,000 | 140,000 | * | * | ||||||||||||
Laffin Ventures Corporation50 | 888,888 | 888,888 | * | * | ||||||||||||
Leticia Turullos SEP/IRA51 | 44,000 | 44,000 | * | * | ||||||||||||
John W. Lodge, III52 | 80,000 | 80,000 | * | * | ||||||||||||
John & Jodi Malanga, JTTIC53 | 40,000 | 40,000 | * | * | ||||||||||||
David Mandel54 | 3,735,549 | 440,184 | 3,295,365 | 6.3 | % | |||||||||||
Meadowbrook Opportunity Fund, LLC55 | 370,370 | 370,370 | * | * | ||||||||||||
Monarch Pointe Fund, Ltd.56 | 740,740 | 740,740 | * | * | ||||||||||||
Ben T. Morris57 | 80,000 | 80,000 | * | * | ||||||||||||
New Energy Fund, LP58 | 296,296 | 296,296 | * | * | ||||||||||||
Nite Capital LP59 | 296,296 | 296,296 | * | * | ||||||||||||
Matthew O’Brien60 | 15,000 | 15,000 | * | * | ||||||||||||
Paula L. Santoski IRA61 | 90,000 | 90,000 | * | * |
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Percentage of | ||||||||||||||||
Shares of | Common Stock | |||||||||||||||
Shares of | Common Stock | Outstanding | ||||||||||||||
Common Stock | Shares of | Owned Upon | Upon | |||||||||||||
Owned Before | Common Stock | Completion of | Completion of | |||||||||||||
the Offering | Being Offered | the Offering(a) | Offering | |||||||||||||
Pinke Lou Blair Estate Trust U/W DTD 6/15/9162 | 80,000 | 80,000 | * | * | ||||||||||||
Pollock Family Trust63 | 74,074 | 74,074 | * | * | ||||||||||||
RJS JR/PLS 1992 Trust FBO Robert J. Santoski, Jr.64 | 40,000 | 40,000 | * | * | ||||||||||||
Katherine Sanders18 | 160,000 | 160,000 | * | * | ||||||||||||
Don Sanders18 | 320,000 | 320,000 | * | * | ||||||||||||
Paula L. Santoski65 | 80,000 | 80,000 | * | * | ||||||||||||
SLS/PLS 1988 Trust FBO Samantha Leigh Santoski, Paula L. Santoski, TTE66 | 40,000 | 40,000 | * | * | ||||||||||||
Nadine Smith67 | 150,000 | 150,000 | * | * | ||||||||||||
Troy Taylor68 | 100,000 | 100,000 | * | * | ||||||||||||
Titus H. Harris III IRA Rollover69 | 100,000 | 100,000 | * | * | ||||||||||||
Paul Tompkins70 | 148,052 | 148,052 | * | * | ||||||||||||
Trinad Capital Master Fund, Ltd.71 | 740,740 | 740,740 | * | * | ||||||||||||
Riaz Valani72 | 370,370 | 370,370 | * | * | ||||||||||||
Vision Opportunity Master Fund, Ltd.73 | 2,962,962 | 2,962,962 | * | * | ||||||||||||
L.G. Vela74 | 40,000 | 40,000 | * | * | ||||||||||||
VP Bank (Switzerland) Ltd.75 | 296,000 | 296,000 | * | * | ||||||||||||
Wallace W. and Florence I. Wadman76 | 185,186 | 185,186 | * | * | ||||||||||||
Don and Julie E. Weir JTTIC77 | 40,000 | 40,000 | * | * | ||||||||||||
Louis and Cara Zehil78 | 69,630 | 69,630 | * | * |
* | Less than 1.0%. | |
(a) | Assumes all of the shares of common stock to be registered on this registration statement, including all shares of common stock underlying warrants held by the selling stockholders, are sold in the offering by the selling stockholders. | |
(b) | The selling shareholders are client accounts of Wellington Management Company, LLP, or Wellington. Wellington is an investment adviser registered under the Investment Advisers Act of 1940, as amended. Wellington, in such capacity, may be deemed to share beneficial ownership over the shares of common stock and warrants held by its client accounts. | |
(c) | Robert Kolton may be deemed to have beneficial ownership over these securities because he has the power to vote and dispose of the shares of common stock being registered on behalf of the selling stockholders. | |
(d) | John Myers, Aaron Stanley and Blake Hutchinson may be deemed to have beneficial ownership over these securities because they have the power to vote and dispose of the common shares being registered on behalf of the selling stockholders. | |
(e) | Susan E. Brune, as receiver for Louis W. Zehil may be deemed to have beneficial ownership over these securities because it has the power to vote and dispose of the common shares being registered on behalf of the selling shareholders. |
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(f) | Don Sanders, Chief Investment Officer, and Brad Sanders, Administrative Director, as such, may be deemed to have beneficial ownership over these securities because they have the power to vote and dispose of the shares of common stock being registered on behalf of the selling shareholders. |
1 | Includes 335,350 shares of common stock and warrants to acquire an additional 335,350 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
2 | Includes 451,400 shares of common stock and warrants to acquire an additional 451,400 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
3 | Includes 192,150 shares of common stock and warrants to acquire an additional 192,150 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
4 | Includes 596,580 shares of common stock and warrants to acquire an additional 596,580 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
5 | Includes 735,440 shares of common stock and warrants to acquire an additional 735,440 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
6 | Includes 84,000 shares of common stock and warrants to acquire an additional 84,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
7 | Includes 449,350 shares of common stock and warrants to acquire an additional 449,350 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
8 | Includes 255,370 shares of common stock and warrants to acquire an additional 255,370 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
9 | Includes 388,570 shares of common stock and warrants to acquire an additional 388,570 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
10 | Includes 975,780 shares of common stock and warrants to acquire an additional 975,780 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
11 | Includes 636,010 shares of common stock and warrants to acquire an additional 636,010 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
12 | Includes 180,000 shares of common stock and warrants to acquire an additional 180,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
13 | Includes 560,740 shares of common stock and warrants to acquire an additional 560,740 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
14 | Includes 198,363 shares of common stock and warrants to acquire an additional 198,363 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
15 | Includes 172,008 shares of common stock and warrants to acquire an additional 172,008 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
16 | Includes 715,000 shares of common stock and warrants to acquire an additional 740,740 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
17 | Includes 685,000 shares of common stock and warrants to acquire an additional 740,740 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
18 | Includes 206,821, 63,180, 80,000 and 160,000 shares respectively of common stock and warrants to acquire an additional 206,821, 63,180, 80,000 and 160,000 shares respectively of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering Sanders Opportunity Fund (Inst), LP, Sanders Opportunity Fund, LP, Katherine Sanders and Don Sanders, respectively. Mr. Sanders may be deemed to have beneficial ownership of the securities owned by Katherine Sanders. Mr. Sanders is an affiliate of a broker-dealer. | |
19 | Includes 80,000 shares of common stock and warrants to acquire an additional 80,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Don Weir, Trustee, has the power to vote and dispose of the common shares being registered on behalf of the 2003 Sanders Children’s Trust. Mr. Weir is an affiliate of a broker-dealer. | |
20 | Includes 740,741 shares of common stock and warrants to acquire an additional 740,741 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. David Nazarian has the power to vote and dispose of the common shares being registered on behalf of Smart Technology Ventures III SBIC, L.P., or STV SBIC, as the Class A Member of the general partner, Smart Technology Ventures, III SBIC, LLC. STV SBIC acquired 7,947,349 shares of our common stock in the Merger. In addition, the following affiliates of STV SBIC acquired shares of our common stock in the Merger: Smart Technology Ventures, LLC, 212,667 shares of common stock; Smart Technology Ventures III, L.P., 2,087,854 shares of common stock; and the David and Angela Nazarian Family Trust, 19,089 shares of common stock. |
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21 | Includes 1,574,075 shares of common stock and warrants to acquire an additional 1,574,075 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Younes Nazarian and Soraya Nazarian, Trustees, have the power to vote and dispose of the common shares being registered on behalf of Y & S Nazarian Revocable Trust, or the Y&S Trust. The Y&S Trust is an affiliate of STV SBIC and its affiliates. | |
22 | Includes 213,602 shares of common stock and warrants to acquire an additional 213,602 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. David Nazarian, Trustee, has the power to vote and dispose of the shares being registered on behalf of Younes Nazarian 2006 Annuity Trust. | |
23 | Includes 148,148 shares of common stock and warrants to acquire an additional 148,148 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Konrad Ackermann, has the power to vote and dispose of the common shares being registered on behalf of Alpha Capital Austalt. | |
24 | Includes 40,000 shares of common stock and warrants to acquire an additional 40,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
25 | Includes 37,040 shares of common stock and warrants to acquire an additional 37,040 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
26 | Includes 555,555 shares of common stock and warrants to acquire an additional 555,555 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
27 | Includes 37,000 shares of common stock and warrants to acquire an additional 37,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Oliver Chaponnier and M. Montanari have the power to vote and dispose of the common shares being registered on behalf of Besser Kapital Fund Ltd. | |
28 | Includes 20,000 shares of common stock and warrants to acquire an additional 20,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
29 | Includes 20,000 shares of common stock and warrants to acquire an additional 20,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
30 | Includes 20,000 shares of common stock and warrants to acquire an additional 20,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
31 | Includes 40,000 shares of common stock and warrants to acquire an additional 40,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
32 | Includes 370,371 shares of common stock and warrants to acquire an additional 370,371 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Crestview Capital Partners, LLC, or CCP, is the sole managing member of Crestview Capital Master, LLC, or CCM, and may be deemed to have sole voting and investment power with respect to the securities beneficially owned by CCM. CCP disclaims beneficial ownership of these securities. The Managing Members of CCP are Stewart Flink, Robert Hoyt and Daniel Warsh, each of whom may be deemed to have voting and dispositive power over securities beneficially owned by CCM, and each of whom also disclaims beneficial ownership of these securities. Mr. Flink is an affiliate of a broker-dealer. | |
33 | Includes 18,519 shares of common stock and warrants to acquire an additional 18,519 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Kammy Moalemzadeh, President has the power to vote and dispose of the common shares being registered on behalf of Cragston Management Corporation. | |
34 | Includes 123,333 shares of common stock and warrants to acquire an additional 123,333 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. David R. Fuchs, Trustee, has the power to vote and dispose of the common shares being registered on behalf of the David R. Fuchs Charitable Remainder Trust, or the Fuchs Trust. The Fuchs Trust acquired 746,813 shares of our common stock in the Merger. | |
35 | Includes 20,000 shares of common stock and warrants to acquire an additional 20,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
36 | Includes 500,000 shares of common stock and warrants to acquire an additional 500,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
37 | Includes 370,374 shares of common stock and warrants to acquire an additional 370,374 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. |
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38 | Includes 20,000 shares of common stock and warrants to acquire an additional 20,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Frank J. Metyko, Mark J. Metyko and Kurt F. Metyko, Trustees, have the power to vote and dispose of the shares of common stock being registered on behalf of the Frank J. Metyko Residuary Trust U/A DTD 10/08/1984. | |
39 | Includes 60,000 shares of common stock and warrants to acquire an additional 60,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Mr. Freedman is an affiliate of a broker-dealer. | |
40 | Includes 95,645 shares of common stock and warrants to acquire an additional 95,645 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Mr. Fuchs acquired 2,464,485 shares of our common stock in the Merger. | |
41 | Includes 50,000 shares of common stock and warrants to acquire an additional 50,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
42 | Includes 25,000 shares of common stock and warrants to acquire an additional 25,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
43 | Includes 37,040 shares of common stock and warrants to acquire an additional 37,040 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
44 | Includes 100,000 shares of common stock and warrants to acquire an additional 100,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
45 | Includes 150,000 shares of common stock and warrants to acquire an additional 150,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Adam Cabibi has the power to vote and dispose of the shares of common stock being registered on behalf of Icon Capital Partners LP. Mr. Cabibi is an affiliate of a broker-dealer. | |
46 | Includes 74,074 shares of common stock and warrants to acquire an additional 74,074 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Joshua Silverman has the power to vote and dispose of the shares of common stock being registered on behalf of Iroquois Master Fund Ltd. | |
47 | Includes 37,037 shares of common stock and warrants to acquire an additional 37,037 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
48 | Includes 218,978 shares of common stock and warrants to acquire an additional 218,978 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Betsy Wood Knapp and Cleon T. Knapp, Trustees, have the power to vote and dispose of the shares of common stock being registered on behalf of Knapp Trust u/t/d 7/1/2004, or the Knapp Trust. The Knapp Trust acquired 4,373,353 shares of our common stock in the Merger. Mrs. Knapp is one of our Directors. | |
49 | Includes 70,000 shares of common stock and warrants to acquire an additional 70,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
50 | Includes 444,444 shares of common stock and warrants to acquire an additional 444,444 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Mark Tompkins has the power to vote and dispose of the shares of common stock being registered on behalf of Laffin Ventures Corporation. | |
51 | Includes 22,000 shares of common stock and warrants to acquire an additional 22,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
52 | Includes 40,000 shares of common stock and warrants to acquire an additional 40,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
53 | Includes 20,000 shares of common stock and warrants to acquire an additional 20,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. John and Jodi Malanga are affiliates of a broker-dealer. | |
54 | Includes 220,092 shares of common stock and warrants to acquire an additional 220,092 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Mr. Mandel acquired 3,295,365 shares of our common stock in the Merger. | |
55 | Includes 185,185 shares of common stock and warrants to acquire an additional 185,185 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Michael Ragins has the power to vote and dispose of the shares of common stock being registered on behalf of Meadowbrook Opportunity Fund, LLC. | |
56 | Includes 370,370 shares of common stock and warrants to acquire an additional 370,370 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. David Firestone and Harry Aharmian have the power to vote and dispose of the shares of common stock being registered on behalf of Monarch Pointe Fund, Ltd. |
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57 | Includes 40,000 shares of common stock and warrants to acquire an additional 40,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Mr. Morris is an affiliate of a broker-dealer. | |
58 | Includes 148,148 shares of common stock and warrants to acquire an additional 148,148 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Mark Cox, President, CEO and General Partner, has the power to vote and dispose of the shares of common stock being registered on behalf of New Energy Fund, LP. | |
59 | Includes 148,148 shares of common stock and warrants to acquire an additional 148,148 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Keith A. Goodman, the Manager of the General Partner of Nite Capital LP, has the power to vote and dispose of the shares of common stock being registered on behalf of Nite Capital LP. | |
60 | Includes 7,500 shares of common stock and warrants to acquire an additional 7,500 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
61 | Includes 45,000 shares of common stock and warrants to acquire an additional 45,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
62 | Includes 40,000 shares of common stock and warrants to acquire an additional 40,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Sue M. Harris, Trustee, has the power to vote and dispose of the shares of common stock being registered on behalf of Pinke Lou Blair Estate Trust U/W DTD 6/15/91. | |
63 | Includes 37,037 shares of common stock and warrants to acquire an additional 37,037 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. David Pollock, Trustee, has the power to vote and dispose of the shares of common stock being registered on behalf of Pollock Family Trust. Mr. Pollock is an affiliate of a broker-dealer. | |
64 | Includes 20,000 shares of common stock and warrants to acquire an additional 20,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Paula Santoski, Trustee, has the power to vote and dispose of the shares of common stock being registered on behalf of RJS JR/PLS 1992 Trust FBO Robert J. Santoski, Jr. | |
65 | Includes 40,000 shares of common stock and warrants to acquire an additional 40,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
66 | Includes 20,000 shares of common stock and warrants to acquire an additional 20,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Paula L. Santoski, Trustee, has the power to vote and dispose of the shares of common stock being registered on behalf of SLS/PLS 1988 Trust FBO Samantha Leigh Santoski and Paula L. Santoski. | |
67 | Includes 75,000 shares of common stock and warrants to acquire an additional 75,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
68 | Includes 50,000 shares of common stock and warrants to acquire an additional 50,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
69 | Includes 50,000 shares of common stock and warrants to acquire an additional 50,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
70 | Includes 74,026 shares of common stock and warrants to acquire an additional 74,026 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
71 | Includes 370,370 shares of common stock and warrants to acquire an additional 370,370 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Rob Ellin and Jay Wolf have the power to vote and dispose of the common shares being registered on behalf of Trinad Capital Master Fund, Ltd. | |
72 | Includes 185,185 shares of common stock and warrants to acquire an additional 185,185 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
73 | Includes 1,481,481 shares of common stock and warrants to acquire an additional 1,481,481 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Adam Benowitz has the power to vote and dispose of the common shares being registered on behalf of Vision Opportunity Master Fund, Ltd. | |
74 | Includes 20,000 shares of common stock and warrants to acquire an additional 20,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. |
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75 | Includes 148,000 shares of common stock and warrants to acquire an additional 148,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Daniel Lacher has the power to vote and dispose of the common shares being registered on behalf of VP Bank (Switzerland) Ltd. | |
76 | Includes 92,593 shares of common stock and warrants to acquire an additional 92,593 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. | |
77 | Includes 20,000 shares of common stock and warrants to acquire an additional 20,000 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. Mr. Weir is an affiliate of a broker-dealer. | |
78 | Includes 34,815 shares of common stock and warrants to acquire an additional 34,815 shares of common stock at an exercise price of $1.85 per share, acquired in our January 2007 private offering. |
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Number of securities | ||||||||||||
remaining available for | ||||||||||||
Number of securities to be | Weighted-average | future issuance under | ||||||||||
issued upon exercise of | exercise price of | equity compensation plans | ||||||||||
outstanding options, warrants | outstanding options, | (excluding securities | ||||||||||
Plan category | and rights | warrants and rights | reflected in column (a)) | |||||||||
(a) | (b) | (c) | ||||||||||
Equity compensation plans approved by security holders1 | 2,690,384 | $ | 1.25 | 1,159,616 | ||||||||
Equity compensation plans not approved by security holders2 | 1,164,983 | $ | 0.40 | — | 3 | |||||||
Total | 3,854,367 | $ | 0.99 | 1,159,616 | ||||||||
1 | Includes options granted under our 2006 Plan. Since the Merger, the board of directors and the compensation committee of the board of directors have granted an aggregate of 2,690,384 options to purchase our common stock to officers of our company. | |
2 | 1,164,983 shares of common stock are issuable upon exercise of outstanding options associated with the 1997 Plan, which we adopted at the closing of the Merger. |
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3 | As of the January 12, 2007, the 1997 Plan was frozen and no additional securities are available for future issuance under the 1997 Plan. All awards granted under the 1997 Plan are exercisable for shares of our common stock. |
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• | place one, possibly two, pilot STT® Reactors in the field, producing ASTM-quality biodiesel; | ||
• | hire additional construction project management, manufacturing, production plant operations, sales, marketing and business development personnel; | ||
• | construct at least one of our own production plants equipped with STT® Production Units; and | ||
• | enter into discussion with parties interested in licensing the STT® Production Units for both domestic and international biodiesel production. |
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Kreido | Keido Biofuels, Inc. | |||||||||||||||
Laboratories | (formerly Gemwood | Pro forma | Pro forma | |||||||||||||
December 31, | Productions, Inc.) | Consolidating | Consolidated | |||||||||||||
2006 | December 31, 2006 | Entry | December 31, 2006 | |||||||||||||
(audited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
ASSETS | ||||||||||||||||
Current Assets | ||||||||||||||||
Cash | $ | 59,000 | $ | — | $ | 23,100,000 | 6 | $ | 23,159,000 | |||||||
Accounts Receivable | — | — | — | — | ||||||||||||
Total Current Assets | 59,000 | — | 23,100,000 | 23,159,000 | ||||||||||||
Furniture & equipment | — | — | — | |||||||||||||
Fixed assets | 322,000 | — | — | 322,000 | ||||||||||||
Intangible assets — patents | 788,000 | — | — | 788,000 | ||||||||||||
Other assets | 21,000 | — | — | 21,000 | ||||||||||||
TOTAL ASSETS | $ | 1,190,000 | $ | — | $ | 23,100,000 | $ | 24,290,000 | ||||||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||||||
Current Liabilities | ||||||||||||||||
Convertible notes payable | $ | 5,637,000 | $ | — | $ | (5,637,000 | )1 | $ | — | |||||||
Current portion of capital leases | 50,000 | — | — | 50,000 | ||||||||||||
Accounts payable | 346,000 | — | — | 346,000 | ||||||||||||
Advances payable | 951,000 | — | (864,000 | )1 | 87,000 | |||||||||||
Total Current Liabilities | 6,984,000 | — | (6,501,000 | ) | 483,000 | |||||||||||
Capital leases less current portion | 66,000 | — | — | 66,000 | ||||||||||||
TOTAL LIABILITIES | 7,050,000 | — | (6,501,000 | ) | 549,000 | |||||||||||
STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||||||||||
Series A1 convertible preferred stock, no par value. Authorized 549,474 shares; issued and outstanding 549,474 | 3,628,000 | — | (3,628,000 | )2 | — | |||||||||||
Series B1 convertible preferred stock, no par value. Authorized 13,783,783 shares; issued and outstanding 10,011,355 shares | 10,011,000 | — | (10,011,000 | )3 | — | |||||||||||
Common Stock , no par value. Authorized 150,000,000 shares; issued and outstanding 720,501 | 103,000 | — | (103,000 | )4 | — | |||||||||||
Restricted common stock, no par value; issued and outstanding 641,786 shares | 64,000 | — | (64,000 | )5 | — | |||||||||||
Common Stock $0.001 par value; 150,000,000 shares authorized; issued and outstanding 52,532,202 shares | — | 3,000 | 7 | 27,000 | 5 | — | ||||||||||
22,000 | 6 | 52,000 | ||||||||||||||
Warrant valuation | — | — | 9,272,000 | 6 | 9,272,000 | |||||||||||
Additional paid in capital | 3,469,000 | 44,000 | 7 | 18,733,000 | 5 | — | ||||||||||
15,353,000 | 6 | 37,599,000 | ||||||||||||||
Accumulated deficit | (23,126,000 | ) | (47,000 | ) | — | (23,173,000 | ) | |||||||||
Deferred compensation | (9,000 | ) | — | — | (9,000 | ) | ||||||||||
TOTAL STOCKHOLDERS’ EQUITY (CAPITAL DEFICIT) | (5,860,000 | ) | — | 29,601,000 | 23,741,000 | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (CAPITAL) | $ | 1,190,000 | $ | — | $ | 23,100,000 | $ | 24,290,000 | ||||||||
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1 | Conversion of notes payable and accrued interest into 10,224,177 shares of Kreido Biofuels, Inc. common stock. | |
2 | Conversion of Series A1 Preferred Stock into 619,946 shares of Kreido Biofuels, Inc. common stock. | |
3 | Conversion of Series B1 Preferred Stock and certain warrants into 11,770,584 shares of Kreido Biofuels, Inc. common stock and warrants to purchase 294,530 shares of Kreido Biofuels, Inc. common stock. | |
4 | Exchange of common stock, restricted common stock and certain warrants for 2,648,976 shares of Kreido Biofuels, Inc. common stock and warrants to purchase 276,804 shares of Kreido Biofuels, Inc. common stock. | |
5 | Issuance of 25,263,683 shares of Kreido Biofuels, Inc. common stock for all outstanding common stock of Kreido Laboratories. | |
6 | Issuance of 18,518,519 shares of Kreido Biofuels, Inc. Common Stock as part of the $25 million private placement offering. The allocation of the proceeds of $25 million, net of approximately $1.6 million in financing costs and $123,000 in paid Bridge notes. | |
7 | 8,750,000 shares of Kreido Biofuels, Inc. common stock retained by existing shareholders of Kreido Biofuels, Inc. as part of the merger. |
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Kreido | Kreido Biofuels, | Pro forma | Pro forma | |||||||||||||
Laboratories | Inc. (formerly | Consolidating | Consolidated | |||||||||||||
(Audited) | Gemwood) | Entry | (Unaudited) | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Sales | $ | — | $ | — | $ | — | $ | — | ||||||||
Cost of goods sold | — | — | — | — | ||||||||||||
Gross Profit | — | — | — | — | ||||||||||||
OPERATING EXPENSES | ||||||||||||||||
Research and development | 1,520,000 | — | — | 1,586,000 | ||||||||||||
Administrative expenses | 1,004,000 | 17,000 | — | 1,021,000 | ||||||||||||
Loss on sale of property and equipment | 24,000 | — | — | 24,000 | ||||||||||||
Loss on retirement of assets | 43,000 | — | — | 43,000 | ||||||||||||
Loss from operations | (2,591,000 | ) | (17,000 | ) | — | (2,608,000 | ) | |||||||||
OTHER INCOME (EXPENSES) | ||||||||||||||||
Interest expense | (828,000 | ) | — | — | (828,000 | ) | ||||||||||
Interest income | 3,000 | — | — | 3,000 | ||||||||||||
Other income | 149,000 | — | — | 149,000 | ||||||||||||
Total other income (expense) | (676,000 | ) | — | — | (676,000 | ) | ||||||||||
Loss before income taxes | (3,267,000 | ) | — | — | (3,284,000 | ) | ||||||||||
Income tax expense | (1,000 | ) | — | — | (1,000 | ) | ||||||||||
NET LOSS FOR THE PERIOD | $ | (3,268,000 | ) | $ | (17,000 | ) | $ | — | $ | (3,285,000 | ) | |||||
BASIC AND DILUTED LOSS PER SHARE | $ | (2.40 | ) | $ | (0.06 | ) | ||||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING | 1,362,287 | 52,532,202 | 1 | |||||||||||||
1 | Shares used in the computation of weighted average shares outstanding consist, of the following: |
Stockholders | Share amount | |||
Kreido Biofuels, Inc. existing shareholders | 8,750,000 | |||
Kreido Labs converted note holders | 10,224,177 | |||
Kreido Labs Series A1 Preferred Stock | 619,946 | |||
Kreido Labs Series B1 Preferred Stock | 11,770,584 | |||
Kreido Labs Common Stockholders | 2,648,976 | |||
Common Stock issued pursuant to Kreido Biofuels, Inc.’s private placement offering | 18,518,519 | |||
Total Common Stock outstanding | 52,532,202 | |||
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Period from | ||||||||
January 13, 1995 | ||||||||
(Inception) to | ||||||||
2005 | December 31, 2005 | |||||||
Net Loss: | ||||||||
As reported | $ | (3,198,000 | ) | $ | (19,858,000 | ) | ||
Add: stock-based employee compensation expense included in reported net loss | 33,000 | 691,000 | ||||||
Deduct: total stock-based employee compensation expense determined under fair value based method for all awards | (67,000 | ) | (965,000 | ) | ||||
Pro forma | $ | (3,232,000 | ) | $ | (20,132,000 | ) | ||
Net loss per share — basic and diluted: | ||||||||
As reported | $ | (2.35 | ) | $ | (14.58 | ) | ||
Pro forma | $ | (2.37 | ) | $ | (14.78 | ) |
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• | extending domestic diesel fuel supplies; | ||
• | reducing dependence on foreign crude oil supplies; | ||
• | expanding markets for domestic and international agricultural products; | ||
• | reducing emissions of greenhouse gases and other gases that are regulated by the EPA; and | ||
• | being usable by existing diesel engines, while extending their useful lives. |
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• | diesel will become less toxic and is considered to be “clean fuel” after compliance with the new low-sulfur requirements; | ||
• | diesel is generally recognized as more fuel efficient than gasoline; | ||
• | use of diesel engines in larger numbers of commercially successful automobiles; and | ||
• | light vehicles that use clean fuel provide governmentally-owned fleets with an option for increasing vehicle efficiency. |
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• | Biodiesel is made from renewable resources; | ||
• | When burned, in comparison to petrodiesel, biodiesel results in a substantial reduction of unburned hydrocarbons, carbon monoxide and particulate matter (with the possible exception of nitrous oxide); | ||
• | Biodiesel is biodegradable, nontoxic and not considered a hazardous material when spilled; | ||
• | Biodiesel is essentially free of sulfur and aromatics; | ||
• | The overall ozone (smog) forming potential of the hydrocarbon exhaust emissions from biodiesel is nearly 50% less than that for petrodiesel fuel; | ||
• | Biodiesel is registered as a fuel and fuel additive with the EPA and meets clean diesel standards established by the California Air Resources Board. B100 biodiesel has been designated as an alternative fuel by the DOE and the U.S. Department of Transportation (“DOT”); | ||
• | Biodiesel is safer to manufacture and handle; | ||
• | Because of its greater lubricity, biodiesel is used as a premium additive to petrodiesel to improve engine performance and durability, to reduce wear on engines and to extend their life. The addition of as little as 1% of biodiesel will significantly increase the reduced lubricity of ULSD fuel; | ||
• | Biodiesel can use domestic feedstock, reducing the $250 billion the United States pays other countries each year for crude oil; | ||
• | Primarily as a result of higher petroleum crude oil prices, increased petrodiesel refining costs, increased agricultural productivity, improvements in biodiesel processing technology and government subsidies, biodiesel has recently become less expensive to produce biodiesel than petrodiesel; and |
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• | Public policy, both as enacted into law and as enunciated by governmental agencies in the United States and elsewhere, favors the production and use of biodiesel fuel. |
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• | refined virgin vegetable oils; | ||
• | refined animal fats; and | ||
• | used cooking oils and trap grease. |
![(FLOW CHART)](https://capedge.com/proxy/SB-2A/0000950148-07-000119/v29907v2990703.gif)
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![(BAR CHART)](https://capedge.com/proxy/SB-2A/0000950148-07-000119/v29907v2990704.gif)
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• | place at least one, possibly two, pilot STT® Production Units in the field, producing ASTM-quality biodiesel; | ||
• | hire construction project management, manufacturing, production plant operations, sales, marketing and business development personnel; | ||
• | construct at least one of our own production plants equipped with STT® Production Units; and | ||
• | enter into discussion with parties interested in licensing the STT® Production Units for both domestic and international biodiesel production. |
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• | identification of specific sites and parcels; | ||
• | receipt of initial proposals from liquids handling partners at each of the plant site locations and negotiations for tolling fees and for the use of terminal infrastructures; | ||
• | construction of STT® Reactors and fabrication of the STT® Production Units; | ||
• | identification of diesel blenders with facilities in proximity to the sites; | ||
• | negotiations with onshore and offshore feedstock providers; | ||
• | data collection for the permitting process; | ||
• | completion of the permitting process; and | ||
• | construction of infrastructure and raw material delivery systems. |
• | relative reactant volumes (i.e., ratio of feedstock to alcohol to catalyst); |
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• | reaction temperature (and ensuring that the temperature is consistent everywhere in the reactor); | ||
• | reactor residence time; and | ||
• | laminar shear field. |
• | dramatically reduced biodiesel reactor residence time of less than one second, compared to more than 30 minutes total reactor residence time required by conventional systems; | ||
• | more efficient transesterification process that produces negligible soap and requires less downstream processing; | ||
• | multi-feedstock flexibility that enables switching between alternative feedstocks in a few hours rather than days for conventional production units; | ||
• | lower-cost catalysts; | ||
• | less energy consumption; and | ||
• | absence of contaminated production waste water. |
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Federal Agency that | Type of | Who Receives | Commonly | |||||
Administers/Oversees | Incentive | Incentive | Known As | Summary | ||||
IRS | income tax credit | infrastructure providers | Alternative Fuel Infrastructure Credit | Provides a tax credit in an amount equal to 30% of the cost of any qualified non-residential AFV refueling property placed into service in the United States, subject to limits. | ||||
Clean School Bus USA reduces operating costs and children’s exposure to harmful diesel exhaust by limiting bus idling, implementing pollution reduction technology, improving route logistics and switching to biodiesel. | ||||||||
EPA | grant program | school districts | Clean School Bus Program | The Energy Bill of 2005 utilizes this EPA program to grant up to a 50% cost share (depending on the age and emissions of original bus) to replace school buses with buses that operate on alternative fuels or low-sulfur diesel, or up to 100% for retrofit projects. | ||||
USDA | grant program | agricultural producers & small businesses | Renewable Energy Systems and Energy Efficiency Improvements Grant | In fiscal year 2005, USDA’s Office of Rural Development made available $22.8 million in competitive grant funds and guaranteed loans for the purchase of renewable energy systems and energy improvements for agricultural producers and small rural businesses. Eligible projects include biofuels, hydrogen, and energy efficiency improvements, as well as solar, geothermal, and wind. |
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U.S. Issue Number | ||||||||
Title | U.S. Issue Date | Expiration Date | ||||||
“METHODS AND APPARATUS FOR TREATING | US 5,279,463 | 1/18/2011 | ||||||
MATERIALS IN LIQUIDS” | 1/18/1994 | |||||||
“METHODS AND APPARATUS FOR | US 5,538,191 | 7/23/2013 | ||||||
HIGH-SHEAR MATERIAL TREATMENT” | 7/23/1996 | |||||||
“METHODS AND APPARATUS FOR | US 6,471,392B1 | 3/7/2021 | ||||||
MATERIALS PROCESSING” | 10/29/2002 | |||||||
“METHODS AND APPARATUS FOR | US 6,752,529 | 3/7/2021 | ||||||
MATERIALS PROCESSING” | 6/22/2004 | |||||||
“METHODS AND APPARATUS FOR HIGH-SHEAR MIXING AND REACTING OF | US 7,165,881 | 9/29/2023 | ||||||
MATERIALS” | 1/23/2007 |
• | dramatically reduced biodiesel reactor residence time of less than one second, compared to more than 30 minutes total reactor residence time required by conventional systems; | ||
• | more efficient transesterification process that produces negligible soap and requires less downstream processing; | ||
• | multi-feedstock flexibility that enables switching between alternative feedstocks in a few hours rather than days for conventional production units; | ||
• | lower-cost catalysts; |
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• | less energy consumption; and | ||
• | absence of contaminated production waste water. |
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Name | Age | Position | ||||
Joel A. Balbien, CFA, Ph.D. | 52 | President; Chief Executive Officer; Director | ||||
Philip Lichtenberger | 50 | Senior Vice President of Operations; Interim Chief Financial Officer | ||||
Alan McGrevy | 60 | Vice President of Engineering | ||||
John M. Philpott | 46 | Vice President; Chief Accounting Officer | ||||
Larry Sullivan | 57 | Chief Technology Officer | ||||
Betsy Wood Knapp | 63 | Chairperson of the Board; Director | ||||
G.A. Ben Binninger | 58 | Director |
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Shares Beneficially Owned | ||||||||
Number of Shares | Percentage of | |||||||
Beneficially | Common Stock | |||||||
Name and Address of Beneficial Owner2 | Owned | Outstanding1 | ||||||
Smart Technology Ventures and affiliates3 | 13,004,185 | 23.6 | % | |||||
Wellington Management Company, LLP4 | 10,200,000 | 17.7 | % | |||||
Betsy Wood Knapp5 | 4,811,309 | 9.1 | % | |||||
David Mandel6 | 3,735,549 | 7.1 | % | |||||
David R. Fuchs7 | 3,677,254 | 7.0 | % | |||||
Joel A. Balbien | 150,673 | 8 | * | |||||
Ben Binninger9 | 261,190 | * | ||||||
Philip Lichtenberger10 | 671,418 | 1.3 | % | |||||
Alan McGrevy11 | 536,501 | 1.0 | % | |||||
John M. Philpott | 18,750 | 8 | * | |||||
Larry Sullivan | 21,875 | 8 | * | |||||
Executive Officers and Directors as a Group | 6,467,983 | 12.0 | % |
* | Less than 1%. | |
1 | Based on 52,532,202 shares of Kreido Biofuels, Inc. stock issued and outstanding as of May 1, 2007. | |
2 | Each of our directors and executive officers may be reached at 1140 Avenida Acaso, Camarillo, California 93012, telephone (805) 389-3499. | |
3 | Includes shares to be held of record by Smart Technology Ventures Advisors, LLC and its affiliates, STV SBIC, Smart Technology Ventures, II, LLC, Smart Technology Ventures, III, L.P., and the Y & S Nazarian Revocable Trust. Includes 9,428,831 shares of common stock (which number includes 740,741 shares of common stock underlying warrants) beneficially owned by STV SBIC, 3,148,150 shares of common stock (which number includes 1,574,075 shares of common stock underlying warrants) beneficially owned by the Y&S Nazarian Revocable Trust, and 427,204 shares of common stock (which number includes 213,604 shares of common stock underlying warrants) beneficially owned by the Younes Nazarian 2006 Annuity Trust. Smart Technology Ventures and affiliates address is 1801 Century Park West, 5th Floor, Los Angeles, CA 90067. | |
4 | Wellington Management, in its capacity as investment adviser, may be deemed to beneficially own 10,200,000 shares of our common stock which are held of record by clients of Wellington Management. Such number includes 5,100,000 shares of common stock underlying warrants. Wellington’s address is 75 State Street, Boston, MA 02109. | |
5 | Includes 4,811,309 shares of common stock (which number includes 218,978 shares of common stock underlying warrants) beneficially owned by Betsy Wood Knapp and held of record by the Knapp Trust of which Cleon T. Knapp and Betsy Wood Knapp are the trustees. The Knapp Trust acquired 4,373,353 shares of our common stock in the Merger. | |
6 | Includes 3,735,549 shares of common stock (which number includes 220,092 shares of common stock underlying warrants) beneficially owned by Mr. Mandel. Mr. Mandel acquired 3,295,365 shares of common stock in the Merger. Mr. Mandel acquired 3,295,365 shares of our common stock in the Merger. Mr. Mandel’s can be reached through Moss Adams, 11766 Wilshire Blvd 9th floor, Los Angeles, CA 90025. | |
7 | Includes 2,665,775 shares of common stock (which number includes 95,645 shares of common stock underlying warrants) beneficially owned by Mr. Fuchs and 1,011,479 shares of common stock (which number includes 123,333 shares of common stock underlying warrants) beneficially owned by the Trust. Mr. Fuchs acquired 2,464,485 shares of our common stock in the Merger. Mr. Fuch’s address is 1140 Avenida Acaso, Camarillo, California 93012. | |
8 | Shares of common stock underlying options awarded under the 2006 Equity Compensation Plan which are exercisable within 60 days of May 1, 2007. | |
9 | Includes 33,848 shares of common stock underlying options awarded under the 1997 Plan and 227,342 shares of common stock underlying warrants, all of which are exercisable within 60 days of May 1, 2007. | |
10 | Includes 274,843 shares of restricted stock, 195,564 shares of common stock underlying options awarded under the 1997 Plan, 199,375 shares of common stock underlying options awarded under the 2006 Plan and 1,636 shares of common stock underlying warrants, all of which are exercisable within 60 days of May 1, 2007. |
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11 | Includes 141,562 shares of restricted stock, 195,564 shares of common stock underlying options awarded under the 1997 Plan and 199,375 shares of common stock underlying options awarded under the 2006 Plan, all of which are exercisable within 60 days of May 1, 2007. |
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Change in | ||||||||||||||||||||||||||||||||||||
Non- | Pension Value | |||||||||||||||||||||||||||||||||||
Equity | and | |||||||||||||||||||||||||||||||||||
Incentive | Nonqualified | |||||||||||||||||||||||||||||||||||
Stock | Plan | Deferred | All Other | |||||||||||||||||||||||||||||||||
Name and Principal | Awards | Option | Awards | Compensation | Compensation | |||||||||||||||||||||||||||||||
Position | Year | Salary ($) | Bonus ($) | ($)(4) | Awards ($) | ($) | Earnings ($) | ($) | Total ($) | |||||||||||||||||||||||||||
Victor Manuel Savceda(1) | 2006 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
President, Chief Executive | 2005 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Officer, Chief Financial Officer & | 2004 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Director | ||||||||||||||||||||||||||||||||||||
Stephen B. Jackson(1) | 2006 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
President, Chief Financial Officer & Director | ||||||||||||||||||||||||||||||||||||
Joel A. Balbien(2)) | 2006 | $ | 33,333 | — | — | — | — | — | — | $ | 33,333 | |||||||||||||||||||||||||
Chief Executive Officer, | 2005 | |||||||||||||||||||||||||||||||||||
Director | ||||||||||||||||||||||||||||||||||||
Philip Lichtenberger | 2006 | 180,604 | — | — | — | — | — | — | 180,604 | |||||||||||||||||||||||||||
Executive Vice President & Chief | 2005 | 170,604 | 26,235 | 8,053 | — | — | — | — | 204,892 | |||||||||||||||||||||||||||
Financial Officer | 2004 | 170,604 | — | — | 22,103 | (3) | — | — | — | 192,707 | ||||||||||||||||||||||||||
Alan McGrevy(5) | 2006 | 158,553 | — | — | — | — | — | — | 158,553 | |||||||||||||||||||||||||||
Vice President of Engineering | 2005 | 149,949 | 14,430 | 8,053 | — | — | — | — | 172,432 | |||||||||||||||||||||||||||
2004 | 150,051 | — | — | 4,949 | (3) | — | — | — | 155,000 |
1 | Messrs. Savceda and Jackson were officers and directors prior to the Merger. Neither served in any capacity with Kreido Labs. Mr. Savceda resigned as president, chief executive officer, chief financial officer and secretary effective November 2, 2006. Mr. Jackson resigned as president, chief financial officer and secretary effective January 12, 2007. Compensation information regarding Messrs Savceda and Jackson are for the fiscal years ended September 30, 2005 and September 30, 2006. | |
2 | Dr. Balbien joined Kreido Labs as Chief Executive Officer in November 2006. | |
3 | “Gross-ups,” or reimbursement for payment of taxes, in the amounts of $22,103 to Mr. Lichtenberger and $4,949 to Mr. McGrevy. | |
4 | We have recorded $33,000 of compensation expense in 2005 relating to stock awards and stock options, respectively, issued to officers. The per share weighted average fair value of stock options expensed for the year ended December 31, 2005 was $0.03 on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions in 2005: expected dividend yield Nil%; expected volatility of 0.01%; risk-free interest rate of 4.13%; and expected life of 10 years. | |
5 | Mr. McGrevy became Vice President of Engineering of Kreido Labs in April 2005. Prior to that time, he was the Director of Engineering of Kreido Labs. |
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Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||||||
Incentive | ||||||||||||||||||||||||||||||||||||
Equity | Plan | |||||||||||||||||||||||||||||||||||
Equity | Incentive | Awards: | ||||||||||||||||||||||||||||||||||
Incentive | Plan | Market or | ||||||||||||||||||||||||||||||||||
Plan | Awards: | Payout | ||||||||||||||||||||||||||||||||||
Awards: | Market | Number of | Value of | |||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Number of | Value of | Unearned | Unearned | ||||||||||||||||||||||||||||||
Securities | Securities | Securities | Shares or | Shares or | Shares, Units | Shares, Units | ||||||||||||||||||||||||||||||
Underlying | Underlying | Underlying | Units of | Units of | or Other | or Other | ||||||||||||||||||||||||||||||
Unexercised | Unexercised | Unexercised | Option | Option | Stock That | Stock That | Rights That | Rights That | ||||||||||||||||||||||||||||
Options (#) | Options (#) | Unearned | Exercise | Expiration | Have Not | Have Not | Have Not | Have Not | ||||||||||||||||||||||||||||
Name | Exercisable | Unxercisable | Options (#) | Price ($) | Date | Vested (#) | Vested ($) | Vested (#) | Vested ($) | |||||||||||||||||||||||||||
Philip Lichtenberger | 133,333 | 106,667 | (1) | — | 0.10 | 4/1/2015 | 33,848 | (2) | 34,000 | — | — | |||||||||||||||||||||||||
Alan McGrevy | 133,333 | 106,667 | (1) | — | 0.10 | 4/1/2015 | 33,976 | (2) | 34,000 | — | — |
1 | Option was granted on April 1, 2005 and vests in 36 installments as follows: (a) on May 1, 2005, 6,668 shares; (b) in each subsequent month for 34 months, an additional 6,667 shares; and (c) on March 1, 2008 the remaining balance of 6,655 shares. | |
2 | The Forfeiture Condition (as defined in the Stock Grant Agreements) lapsed on the date of grant with respect to a portion of the shares and will lapse with respect to an additional 2.2% of the remaining shares each month thereafter. |
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• | Options granted under the 2006 Plan entitle the grantee, upon exercise, to purchase a specified number of shares of common stock from us at a specified exercise price per share. The exercise price for shares of common stock covered by an option cannot be less than the fair market value of the common stock on the date of grant unless agreed to otherwise at the time of the grant. | ||
• | Restricted stock awards and restricted stock units may be awarded on terms and conditions established by the compensation committee (or board), which may include performance conditions for restricted stock awards and the lapse of restrictions on the achievement of one or more performance goals for restricted stock units. | ||
• | The compensation committee (or board) may make performance grants, each of which will contain performance goals for the award, including the performance criteria, the target and maximum amounts payable and other terms and conditions. | ||
• | The 2006 Plan authorizes the granting of stock awards. The compensation committee (or board) will establish the number of shares of common stock to be awarded and the terms applicable to each award, including performance restrictions. | ||
• | Stock appreciation rights, or SARs, entitle the participant to receive a distribution in an amount not to exceed the number of shares of common stock subject to the portion of the SAR exercised multiplied by the difference between the market price of a share of common stock on the date of exercise of the SAR and the market price of a share of common stock on the date of grant of the SAR. |
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DATE OF | # OF | EXERCISE | ||||||||||
NAME | GRANT | SHARES | PRICE | VESTING SCHEDULE | EXPIRATION | |||||||
Joel A. Balbien | January 12, 2007 | 1,205,384 | $1.35/share | Eight quarterly installments commencing on April 12, 2007: the quarterly anniversary of the closing date of the Merger | Ten years from date of grant | |||||||
John M. Philpott | March 19, 2007 | 150,000 | $1.20/share | Eight quarterly installments commencing on June 30, 2007 | Ten years from date of grant | |||||||
Philip Lichtenberger | April 3, 2007 | 580,000 | $1.18/share | 145,000 options were vested as of April 4, 2007. Remaining options vest in eight quarterly installments commencing on June 30, 2007 | Ten years from date of grant | |||||||
Alan McGrevy | April 9, 2007 | 580,000 | $1.20/share | 145,000 options were vested as of April 10, 2007. Remaining options vest in eight quarterly installments commencing on June 30, 2007 | Ten years from date of grant | |||||||
Larry Sullivan | April 27, 2007 | 175,000 | $1.00/share | Eight quarterly installments commencing on June 30, 2007 | Ten years from date of grant |
• | STV SBIC, a limited partnership that, together with its affiliates, Smart Technology Ventures, II, LLC, and Smart Technology Ventures, III, beneficially owns more than 5% of our issued and outstanding voting securities. Dr. Joel A. Balbien, who is our Chief Executive Officer and President and a member of our board of directors resigned as a managing member of STV SBIC and its affiliates as of January 12, 2007; | ||
• | Betsy Wood Knapp, the Chairperson of our board of directors and a beneficial owner of more than 5% of our issued and outstanding voting securities; | ||
• | David Mandel, a beneficial owner of more than 5% of our issued and outstanding voting securities; and | ||
• | David R. Fuchs, a beneficial owner of more than 5% of our issued and outstanding voting securities. |
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Related Party | Aggregate Principal Amount | |||
STV SBIC and affiliates | $ | 1,737,980 | ||
Ms. Knapp | 594,719 | |||
Mr. Mandel | 596,588 | |||
Mr. Fuchs | 312,834 |
Related Party | Aggregate Principal Amount | |||
STV SBIC and affiliates | $ | 1,200,000 | ||
Ms. Knapp | 400,001 | |||
Mr. Mandel | 400,013 | |||
Mr. Fuchs and related entities | 761,668 |
Related Party | Shares | |||
STV SBIC and affiliates | 3,774,522 | |||
Ms. Knapp | 1,279,289 | |||
Mr. Mandel | 1,281,640 | |||
Mr. Fuchs | 1,305,427 |
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Related Party | Shares | |||
STV SBIC and affiliates | 1,025,249 | |||
Ms. Knapp | 348,998 | |||
Mr. Mandel | 349,819 | |||
Mr. Fuchs | 248,873 |
Related Party | Aggregate Principal Amount | Units in Offering | ||||||
Y & S Nazarian Revocable Trust | $ | 125,000 | 92,593 | |||||
Ms. Knapp | 41,667 | 30,864 | ||||||
Mr. Mandel | 41,670 | 30,867 | ||||||
Mr. Fuchs | 41,667 | 30,864 |
• | ordinary brokerage transactions and transactions in which the broker-dealer solicits investors; | ||
• | block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; | ||
• | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; | ||
• | an exchange distribution in accordance with the rules of the applicable exchange; | ||
• | privately negotiated transactions; | ||
• | to cover short sales made after the date that this registration statement is declared effective by the SEC; | ||
• | broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share; | ||
• | a combination of any such methods of sale; and | ||
• | any other method permitted pursuant to applicable law. |
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• | 52,532,202 shares of common stock issued and outstanding; | ||
• | options to purchase 3,722,939 shares of common stock which include options to purchase 2,690,384 shares administered under the 2006 Plan and new options to purchase 1,032,555 shares administered under the 1997 Plan; and | ||
• | warrants to purchase 18,518,519 shares of Common Stock issued to the investors in our private offering and new warrants to purchase 571,334 shares of our common stock issued to former Kreido Labs warrant holders. |
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• | we must issue shares equal to 5% of the shares sold in the offering if the registration statement does not become effective on the date by which we are required to cause it to be filed or to become effective; | ||
• | we must issue an additional number of shares equal to 5% of the shares sold in the offering if the registration statement is not declared effective within 90 days after filing, if not reviewed by the SEC, or within 120 days after filing, if reviewed by the SEC; | ||
• | we must issue an additional number of shares equal to 5% of the shares sold in the offering if the registration statement is not declared effective within 120 days after filing, if not reviewed by the SEC, or within 150 days after filing, if reviewed by the SEC; and | ||
• | we must issue an additional 5% payable if effectiveness does not occur within 150 days after filing, if not reviewed by the SEC, or within 180 days after filing, if reviewed by the SEC, for a maximum penalty of 15% with respect to the Registration Statement not becoming effective by the date on which the Company is required to cause it to become effective. |
Upon the consummation of Merger and the private offering of our securities on January 12, 2007, we issued warrants to purchase 18,518,519 shares of common stock to investors purchasing Units in the offering. These warrants give the holders the right to purchase such shares of our common stock for a period of five years at an exercise price of $1.85 per share provided that the holder gives us written notice at least 61 days prior to the intended date of exercise. We may call these warrants under certain circumstances. | ||
At the option of the holder, the warrants may be exercised by cash payment of the exercise price or, in the event that the registration statement to register the underlying shares is not declared effective by the SEC by January 12, 2008, by “cashless exercise.” A “cashless exercise” means that in lieu of paying the aggregate purchase price for the shares being purchased upon exercise of the warrants in cash, the holder will forfeit a number of shares of common stock underlying the warrant with a “fair market value” equal to such aggregate exercise price. We will not receive additional proceeds if the investor warrants are exercised by cashless exercise. | ||
The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or our recapitalization, reorganization, merger or consolidation. No fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round up to the nearest whole number, the number of shares of common stock to be issued to the warrant holder. | ||
Also outstanding after the consummation of the Merger are warrants to purchase 571,334 shares of our common stock, issued to holders of warrants to purchase an aggregate of 506,389 shares of Kreido Labs’ capital stock prior to the Merger. |
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ON ACCOUNTING AND FINANCIAL DISCLOSURE
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(Formerly Gemwood Productions, Inc.)
Page | ||||
F-1 | ||||
F-2 | ||||
F-3 | ||||
F-4 to F-5 | ||||
F-6 to F-7 | ||||
Notes to Financial Statements | F-8 to F-20 |
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Kreido Laboratories
March 30, 2007
F-1
Table of Contents
(A Development Stage Company)
December 31 | ||||||||
2006 | 2005 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 59,000 | $ | 1,002,000 | ||||
Accounts receivable | — | 1,000 | ||||||
Total current assets | 59,000 | 1,003,000 | ||||||
Property and equipment — net (Note 4) | 322,000 | 252,000 | ||||||
Patents, less accumulated amortization of $278,000 and $216,000 in 2006 and 2005, respectively | 788,000 | 753,000 | ||||||
Other assets | 21,000 | 6,000 | ||||||
Total assets | $ | 1,190,000 | $ | 2,014,000 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (CAPITAL DEFICIT) | ||||||||
Current liabilities | ||||||||
Current portion of convertible notes payable, net of discount of $1,044,000 and $1,172,000 in 2006 and 2005, respectively (Note 9) | $ | 5,637,000 | $ | 4,139,000 | ||||
Current portion of capital leases (Note 8) | 50,000 | 31,000 | ||||||
Accounts payable | 346,000 | 226,000 | ||||||
Accrued expenses (Notes 9) | 951,000 | 435,000 | ||||||
Total current liabilities | 6,984,000 | 4,831,000 | ||||||
Capital leases, less current portion (Note 8) | 66,000 | 29,000 | ||||||
Total liabilities | 7,050,000 | 4,860,000 | ||||||
Stockholders’ equity (capital deficit) (Notes 6 and 10) | ||||||||
Series C convertible preferred stock, no par value. Authorized 8,600,000 shares; no shares issues and outstanding | — | |||||||
Series B convertible preferred stock, no par value. Authorized 200,00 shares; no shares issues and outstanding | — | |||||||
Series A convertible preferred stock, no par value. Authorized 500,000 shares; no shares issued and outstanding | — | |||||||
Series A1 convertible preferred stock, no par value. Authorized 549,474 shares; issues and outstanding 549,474 shares; liquidation preference $4,945,000 | 3,628,000 | 3,628,000 | ||||||
Series B1 convertible preferred stock, no par value. Authorized 13,783,783 shares; issued and outstanding 10,011,355 shares; liquidation preference $10,011,000 | 10,011,000 | 10,011,000 | ||||||
Common stock, no par value. Authorized 150,000,000 shares issued and outstanding 720,501 shares | 103,000 | 103,000 | ||||||
Restricted common stock, no par value; issues and outstanding 641,786 shares | 64,000 | 64,000 | ||||||
Additional paid-in capital | 3,469,000 | 3,241,000 | ||||||
Deferred compensation | (9,000 | ) | (35,000 | ) | ||||
Deficit accumulated during the development stage | (23,126,000 | ) | (19,858,000 | ) | ||||
Net stockholders’ equity (capital deficit) | (5,860,000 | ) | (2,846,000 | ) | ||||
Total liabilities and stockholders’ equity (capital deficit) | $ | 1,190,000 | $ | 2,014,000 | ||||
F-2
Table of Contents
(A Development Stage Company)
Period from | ||||||||||||
January 13, | ||||||||||||
Year Ended | 1995 (Inception) | |||||||||||
Year Ended | December 31, | to December 31, | ||||||||||
December 31, 2006 | 2005 | 2006 | ||||||||||
Operating expenses | ||||||||||||
Research and Development | $ | 1,520,000 | $ | 1,913,000 | $ | 15,836,000 | ||||||
General and administrative expenses (Note 11) | 1,004,000 | 630,000 | 4,852,000 | |||||||||
Loss on sale of property and equipment | 24,000 | 26,000 | 89,000 | |||||||||
Loss from retirement of assets | 43,000 | 275,000 | 318,000 | |||||||||
Loss from operations | (2,591,000 | ) | (2,844,000 | ) | (21,095,000 | ) | ||||||
Other income (expenses) | ||||||||||||
Interest expense | (828,000 | ) | (534,000 | ) | (3,082,000 | ) | ||||||
Interest income | 3,000 | 3,000 | 64,000 | |||||||||
Other income | 149,000 | 178,000 | 1,151,000 | |||||||||
Other expenses | — | — | (154,000 | ) | ||||||||
Total other income (expenses) | (676,000 | ) | (353,000 | ) | (2,021,000 | ) | ||||||
Loss before income taxes | (3,267,000 | ) | (3,197,000 | ) | (23,116,000 | ) | ||||||
Income tax expenses | 1,000 | 1,000 | 10,000 | |||||||||
Net loss | $ | (3,268,000 | ) | $ | (3,198,000 | ) | $ | (23,126,000 | ) | |||
Net loss per share — basic and diluted | $ | (2.40 | ) | $ | (2.35 | ) | $ | (16.98 | ) | |||
Shares used in computing net loss per share | 1,362,287 | 1,362,287 | 1,362,287 | |||||||||
F-3
Table of Contents
(A Development Stage Company)
Period from January 13, 1995 (Inception) to December 31, 2006
Deficit | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A1 | Series B1 | Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series C Convertible | Series B Convertible | Series A Convertible | Convertible | Convertible | Restricted Common | Additional Paid- | During the | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock | Stock | Stock | Preferred Stock | Preferred Stock | Common Stock | Stock | In | Deferred | Development | Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Compensation | Stage | (Capital Deficit) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock to founders | — | $ | — | — | $ | — | — | $ | — | — | $ | — | — | $ | — | 750,000 | $ | 100,000 | — | $ | — | $ | — | $ | — | $ | $ | 100,000 | ||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (67,000 | ) | (67,000 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 1995 | — | — | — | — | — | — | — | — | — | — | 750,00 | 100,000 | — | — | — | — | (67,000 | ) | 33,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (130,000 | ) | (130,000 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 1996 | — | — | — | — | — | — | — | — | — | — | 750,00 | 100,000 | — | — | — | — | (197,000 | ) | (97,000 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (329,000 | ) | (329,000 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 1997 | — | — | — | — | — | — | — | — | — | — | 750,00 | 100,000 | — | — | — | — | (526,000 | ) | (426,000 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (292,000 | ) | (292,000 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 1998 | — | — | — | — | — | — | — | — | — | — | 750,00 | 100,000 | — | — | — | — | (818,000 | ) | (718,000 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Series A preferred stock | — | — | — | — | 242,561 | 1,480,000 | — | — | — | — | — | — | — | — | 217,000 | — | — | 1,697,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option issuances | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 318,000 | (287,000 | ) | — | 31,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (718,000 | ) | (718,000 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 1999 | — | — | — | — | 242,561 | 1,480,000 | — | — | — | — | 750,000 | 100,000 | — | — | 535,000 | (287,000 | ) | (1,536,000 | ) | 292,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of notes to Series A preferred stock | — | — | — | 106,925 | 637,000 | — | — | — | — | — | — | — | — | — | — | — | 637,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement of common stock | — | — | 200,000 | 1,500,000 | — | — | — | — | — | — | (30,073 | ) | — | — | — | — | — | — | 1,500,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Series B preferred stock | — | — | — | 11,000 | — | — | — | — | — | — | — | — | — | — | — | — | — | 11,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred compensation — options/warrants | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 101,000 | (101,000 | ) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation expense | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 88,000 | — | 88,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (1,935,000 | ) | (1,935,000 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2000 | — | — | 200,000 | 1,511,000 | 349,486 | 2,117,000 | — | — | — | — | 719,927 | 100,000 | — | — | 636,000 | (300,000 | ) | (3,471,000 | ) | 593,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock grant | — | — | — | — | — | — | — | — | — | — | 575 | 3,000 | — | — | — | — | — | 3,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of warrants in connection with convertible debt | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 304,000 | — | — | 304,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred compensation options | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 259,000 | (259,000 | ) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation expense | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 141,000 | — | 141,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (3,308,000 | ) | (3,308,000 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2001 | — | — | 200,000 | 1,511,000 | 349,486 | 2,117,000 | — | — | — | — | 720,502 | 103,000 | — | — | 1,199,000 | (418,000 | ) | (6,779,000 | ) | (2,267,000 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Series C preferred stock | 1,995,000 | 1,995,000 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 1,995,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of notes, accrued interest and accounts payable to Series C preferred stock | 5,255,785 | 5,256,000 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 5,256,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of warrants in connection with convertible debt | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 287,000 | — | — | 287,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred compensation options | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 61,000 | (61,000 | ) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation expense | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 183,000 | — | 183,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repricing of warrants | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 131,000 | — | — | 131,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (3,436,000 | ) | (3,436,000 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2002 | 7,250,785 | 7,251,000 | 200,000 | 1,511,000 | 349,486 | 2,117,000 | — | — | — | — | 720,502 | 103,000 | 1,678,000 | (296,000 | ) | (10,215,000 | ) | 2,149,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Series C preferred stock — | 428,500 | 428,000 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 428,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of notes and accrued interest payable to Series C preferred stock | 744,510 | 745,000 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 745,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of warrants in connection with convertible debt | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 74,000 | — | — | 74,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation expense | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 183,000 | — | 183,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Buy back of fractional shares | (12 | ) | — | (3 | ) | — | (9 | ) | — | — | — | — | — | (1 | ) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (2,989,000 | ) | (2,989,000 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2003 | 8,423,783 | 8,424,000 | 199,997 | 1,511,000 | 349,477 | 2,117,000 | — | — | — | — | 720,501 | 103,000 | — | — | 1,752,000 | (113,000 | ) | (13,204,000 | ) | 590,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Series B1 preferred stock | — | — | — | — | — | — | — | — | 720,000 | 720,000 | — | — | — | — | — | — | — | 720,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of notes an accrued interest payable to Series B1 preferred stock | — | — | — | — | — | — | — | — | 867,572 | 867,000 | — | — | — | — | — | — | — | 867,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of consulting warrants and warrants in connection with convertible debt | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Series C preferred stock to Series B1 preferred stock | (8,423,783 | ) | (8,424,000 | ) | — | — | — | — | — | — | 8,423,783 | 8,424,000 | — | — | — | — | 709,000 | — | — | 709,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Series B preferred stock to Series A1 preferred stock | — | — | (199,997 | ) | (1,511,000 | ) | — | — | 199,997 | 1,511,000 | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Series A preferred stock to Series A1 preferred stock | — | — | — | — | (349,477 | ) | (2,117,000 | ) | 349,477 | 2,117,000 | — | — | — | — | — | — | — | 109,000 | — | 109,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation expense | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock | — | — | — | — | — | — | — | — | — | — | — | — | 641,786 | 64,000 | — | (64,000 | ) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (3,456,000 | ) | (3,456,000 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2004 | — | — | — | — | — | — | 549,474 | 3,628,000 | 10,011,335 | 10,011,000 | 720,501 | 103,000 | 641,786 | 64,000 | 2,461,000 | (68,000 | ) | (16,660,000 | ) | (461,000 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of warrants in connection with convertible debt | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 761,000 | — | — | 761,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of consulting warrants | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 15,000 | — | — | 15,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of stock options | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 4,000 | — | — | 4,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation expense | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 33,000 | — | 33,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (3,198,000 | ) | (3,198,000 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2005 | — | — | 549,474 | 3,628,000 | 10,011,355 | 10,011,000 | 720,501 | 103,000 | 641,786 | 64,000 | 3,241,000 | (35,000 | ) | (19,858,000 | ) | (2,846,000 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of warrants in connection with convertible debt | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 191,000 | — | — | 191,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of consulting warrants | 37,000 | 37,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation expense | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 26,000 | — | 26,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (3,268,000 | ) | (3,268,000 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2006 | — | $ | — | $ | $ | 549,474 | $ | 3,628,000 | 10,011,355 | $ | 10,011,000 | 720,501 | $ | 103,000 | 641,786 | $ | 64,000 | $ | 3,469,000 | $ | (9,000 | ) | $ | (23,126,000 | ) | $ | (5,860,000 | ) | ||||||||||||||||||||||||||||||||||||||||||||
See notes to financial statements.
F-4
Table of Contents
(A Development Stage Company)
Statements of Cash Flows
Period from | ||||||||||||
January 13, | ||||||||||||
Year Ended | Year Ended | 1995 (Inception) | ||||||||||
December 31, | December 31, | to December 31, | ||||||||||
2006 | 2005 | 2006 | ||||||||||
Cash flows from operating activities | ||||||||||||
Net Loss | $ | (3,268,000 | ) | $ | (3,198,000 | ) | $ | (23,126,000 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
Depreciation and amortization | 162,000 | 195,000 | 1,369,000 | |||||||||
Loss on sale of assets | 24,000 | 26,000 | 89,000 | |||||||||
Loss on retirement of assets | 43,000 | 275,000 | 318,000 | |||||||||
Noncash stock compensation | 44,000 | 37,000 | 819,000 | |||||||||
Amortization of convertible debt discount | 319,000 | 160,000 | 1,236,000 | |||||||||
Inducement to convert debt discount | — | — | 152,000 | |||||||||
Inducement to convert debt | 18,000 | 15,000 | 58,000 | |||||||||
Warrants issued to consultants | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable | 1,000 | 16,000 | — | |||||||||
Other assets | (15,000 | ) | 17,000 | (72,000 | ) | |||||||
Accounts payable | 120,000 | 45,000 | 375,000 | |||||||||
Accrued expenses | 516,000 | 347,000 | 1,482,000 | |||||||||
Net cash used in operating activities | (2,036,000 | ) | (2,065,000 | ) | (17,300,000 | ) | ||||||
Cash flows from investing activities | ||||||||||||
Purchase of property and equipment | (39,000 | ) | (10,000 | ) | (741,000 | ) | ||||||
Proceeds from sale of assets | 10,000 | 85,000 | 95,000 | |||||||||
Investments in patent application | (182,000 | ) | (242,000 | ) | (1,319,000 | ) | ||||||
Net cash used in investing activities | (211,000 | ) | (167,000 | ) | (1,965,000 | ) | ||||||
Cash flows from financing activities | ||||||||||||
Proceeds from the issuance of Series A convertible preferred stock | — | 938,000 | ||||||||||
Proceeds from the issuance of Series B convertible preferred stock | — | 1,500,000 | ||||||||||
Proceeds from the issuance of Series C convertible preferred stock | — | 2,424,000 | ||||||||||
Proceeds from the issuance of Series B1 preferred stock | — | 720,000 | ||||||||||
Proceeds from the issuance of common stock warrants | — | 217,000 | ||||||||||
Proceeds from the issuance of common stock | — | — | ||||||||||
Proceeds from issuance of long-term debt | 1,370,000 | 3,232,000 | 14,381,000 | |||||||||
Principal repayment of long-term debt and capital leases | (66,000 | ) | (80,000 | ) | (856,000 | ) | ||||||
Net cash provided by financing activities | 1,304,000 | 3,152,000 | 19,324,000 | |||||||||
Net increase (decrease) in cash and cash equivalents | (943,000 | ) | 920,000 | 59,000 | ||||||||
Cash and cash equivalents at beginning of period | 1,002,000 | 82,000 | — | |||||||||
Cash and cash equivalents at end of period | $ | 59,000 | $ | 1,002,000 | $ | 59,000 | ||||||
Supplemental disclosure of cash flow information | ||||||||||||
Cash paid during the period for: | ||||||||||||
Interest | $ | 8,000 | $ | 26,000 | $ | 334,000 | ||||||
Income taxes | 1,000 | 1,000 | 10,000 |
F-5
Table of Contents
(A Development Stage Company)
Period from | ||||||||||||
January 13, 1995 | ||||||||||||
Year Ended | Year Ended | (Inception) to | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2006 | 2005 | 2006 | ||||||||||
Supplemental disclosure of noncash investing and financing activities | ||||||||||||
Purchase of property and equipment through capital leases | $ | 122,000 | $ | — | $ | 760,000 | ||||||
Additions to machinery and equipment through settlement of capital lease | — | — | 61,000 | |||||||||
Additions to machinery and equipment through issuance of common stock | — | — | 100,000 | |||||||||
Conversion of notes payable into Series A preferred stock | — | — | 1,180,000 | |||||||||
Conversion of notes payable into Series C preferred stock | — | — | 5,530,000 | |||||||||
Conversion of accounts payable into Series C preferred stock | — | — | 30,000 | |||||||||
Conversion of accrued interest into Series C preferred stock | — | — | 441,000 | |||||||||
Warrants issued in connection with convertible notes | — | 761,000 | 2,007,000 | |||||||||
Conversion of Series A preferred stock into Series A1 preferred stock | — | — | 2,118,000 | |||||||||
Conversion of Series B preferred stock into Series A1 preferred stock | — | — | 1,511,000 | |||||||||
Conversion of Series C preferred stock into Series B1 preferred stock | — | — | 8,414,000 | |||||||||
Conversion of notes payable in to Series B1 preferred stock | — | — | 850,000 | |||||||||
Conversion of accrued interest into Series B1 preferred stock | — | — | 18,000 | |||||||||
Conversion of accrued interest into notes payable | — | — | 72,000 |
F-6
Table of Contents
The Company’s revenues are expected to be derived from licensing its patented processes, leasing its patented equipment to carry out the licensed processes, providing on-going technical support and know-how, and in the future, the sale of biodiesel. Revenues from product sales will be recorded upon shipment. Revenues from technology licensing will be, based upon the nature of the licensing agreement, recorded upon billing due date established by contractual agreement with the customer or over the term of the agreement. For sales arrangements with multiple elements, the Company will allocate the undelivered elements based on the price charged when an element is sold separately. Through the end of 2006, the Company had recognized no significant commercial or licensing revenue. It is anticipated that once the Company has built and begins operating the commercial biodiesel production plants, the majority of revenue will be based upon the sale of biodiesel to distributors.
F-7
Table of Contents
F-8
Table of Contents
Period from January 13, | ||||||||
Year Ended December 31, | 1995 (Inception) to | |||||||
2005 | December 31, 2005 | |||||||
Net Loss: | ||||||||
As reported | $ | (3,198,000 | ) | $ | (19,858,000 | ) | ||
Add: stock -based employee compensation expense included in reported net loss | 33,000 | 691,000 | ||||||
Deduct: total stock-based employee compensation expense determined under fair value based method for all awards | (67,000 | ) | (965,000 | ) | ||||
Pro forma | $ | (3,232,000 | ) | $ | (20,132,000 | ) | ||
Net loss per share — basic and diluted | ||||||||
As reported | $ | (2.35 | ) | $ | (14.58 | ) | ||
Pro forma | $ | (2.37 | ) | $ | (14.78 | ) | ||
F-9
Table of Contents
F-10
Table of Contents
2006 | 2005 | |||||||
Furniture and fixtures | $ | 43,000 | $ | 43,000 | ||||
Machinery and equipment | 617,000 | 461,000 | ||||||
Office equipment | 115,000 | 110,000 | ||||||
Leasehold improvements | 47,000 | 47,000 | ||||||
Total | 822,000 | 661,000 | ||||||
Less accumulated depreciation and amortization | (500,000 | ) | (409,000 | ) | ||||
Net book value | $ | 322,000 | $ | 252,000 | ||||
F-11
Table of Contents
Weighted Average | ||||||||
Number of Options | Exercise Price | |||||||
Balance at December 31, 2004 | 471,853 | $ | 0.70 | |||||
Granted | 861,786 | 0.14 | ||||||
Exercised | — | — | ||||||
Cancelled | (152,908 | ) | 0.10 | |||||
Balance at December 31, 2005 | 1,180,731 | 0.13 | ||||||
Granted | 50,950 | 0.10 | ||||||
Exercised | — | — | ||||||
Cancelled | (199,125 | ) | 0.11 | |||||
Balance at December 31, 2006 | 1,032,556 | $ | 0.28 | |||||
F-12
Table of Contents
Options Outstanding | Options Exercisable | |||||||||||||||||||
Weighted- | ||||||||||||||||||||
Outstanding at | Average | Weighted- | Exercisable at | Weighted- | ||||||||||||||||
Range of Exercise | December 31, | Remaining | Average Exercise | December 31, | Average Exercise | |||||||||||||||
Prices | 2006 | Contractual Life | Price | 2006 | Price | |||||||||||||||
$0.10 | 767,357 | 5.18 | $ | 0.10 | 602,747 | $ | 0.10 | |||||||||||||
$0.70 | 3,000 | 2.68 | 0.70 | 3,000 | 0.70 | |||||||||||||||
$0.85 | 187,372 | 4.22 | 0.85 | 128,500 | 0.85 | |||||||||||||||
$1.00 | 45,948 | 3.48 | 1.00 | 45,948 | 1.00 | |||||||||||||||
$1.40 | 22,779 | 0.83 | 1.40 | 22,779 | 1.40 | |||||||||||||||
$2.10 | 6,100 | 1.26 | 2.10 | 6,100 | 2.10 | |||||||||||||||
1,032,556 | $ | 0.32 | 809,074 | $ | 0.32 | |||||||||||||||
Year Ending December 31, | Amount | |||
2007 | $ | 68,000 | ||
2008 | 31,000 | |||
2009 | 28,000 | |||
2010 | 25,000 | |||
Total lease payments | 152,000 | |||
Less — interest | 36,000 | |||
Present value of lease payments | 116,000 | |||
Less — current portion | 50,000 | |||
$ | 66,000 | |||
F-13
Table of Contents
F-14
Table of Contents
Number of Shares | Amount | |||||||
Common Stock | 1 | $ | 1.00 | |||||
Series A | 9 | 9.00 | ||||||
Series B | 3 | 3.00 | ||||||
Series C | 12 | 12.00 | ||||||
25 | $ | 25.00 | ||||||
F-15
Table of Contents
F-16
Table of Contents
F-17
Table of Contents
F-18
Table of Contents
Weighted Average | ||||||||
Number of Options | Exercise Price | |||||||
Balance at December 31, 2004 | 3,590,034 | $ | 0.73 | |||||
Granted | 3,658,796 | 1.00 | ||||||
Exercised | — | — | ||||||
Cancelled | — | — | ||||||
Balance at December 31, 2005 | 7,248,830 | 0.87 | ||||||
Granted | 602,011 | 1.00 | ||||||
Exercised | — | — | ||||||
Cancelled | — | — | ||||||
Balance at December 31, 2006 | 7,850,841 | $ | 0.88 | |||||
F-19
Table of Contents
Kreido Biofuels, | ||||||||||||||||
Inc. (formerly | ||||||||||||||||
Kreido | Gemwood | Pro forma | ||||||||||||||
Laboratories | Productions, | Pro forma | Consolidated | |||||||||||||
December 31, | Inc.) December | Consolidating | December 31, | |||||||||||||
2006 | 31, 2006 | Entry | 2006 | |||||||||||||
(audited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
ASSETS | ||||||||||||||||
Current Assets | ||||||||||||||||
Cash | $ | 59,000 | $ | — | $ | 23,100,000 | (6) | $ | 23,159,000 | |||||||
Accounts Receivable | — | — | — | — | ||||||||||||
Total Current Assets | 59,000 | — | 23,100,000 | 23,159,000 | ||||||||||||
Furniture & equipment Fixed assets | 322,000 | — | — | 322,000 | ||||||||||||
Intangible assets — patents | 788,000 | — | — | 788,000 | ||||||||||||
Other assets | 21,000 | — | — | 21,000 | ||||||||||||
TOTAL ASSETS | $ | 1,190,000 | $ | — | $ | 23,100,000 | $ | 24,290,000 | ||||||||
LIABILITIES AND STOCKHOLDERS’ | ||||||||||||||||
DEFICIT | ||||||||||||||||
Current Liabilities | ||||||||||||||||
Convertible notes payable | $ | 5,637,000 | $ | — | $ | (5,637,000 | )(1) | $ | — | |||||||
Current portion of capital leases | 50,000 | — | — | 50,000 | ||||||||||||
Accounts payable | 346,000 | — | — | 346,000 | ||||||||||||
Advances payable | 951,000 | — | (864,000 | )(1) | 87,000 | |||||||||||
Total Current Liabilities | 6,984,000 | — | (6,501,000 | ) | 483,000 | |||||||||||
Capital leases less current portion | 66,000 | — | — | 66,000 | ||||||||||||
TOTAL LIABILITIES | 7,050,000 | (6,501,000 | ) | 549,000 | ||||||||||||
STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||||||||||
Stockholders’ equity (deficit) Series A1 convertible preferred stock, no par value. Authorized 549,474 shares; issued and outstanding 549,474 | 3,628,000 | — | (3,628,000 | )(2) | — | |||||||||||
Series B1 convertible preferred stock, no par value. Authorized 13,783,783 shares, issued and outstanding 10,011,355 shares | 10,011,000 | — | (10,011,000 | )(3) | — | |||||||||||
Common Stock , no par value. Authorized 150,000,000 shares; issued and outstanding 720,501 | 103,000 | — | (103,000 | )(4) | — | |||||||||||
Restricted common stock, no par value; issued and outstanding 641,786 shares | 64,000 | — | (64,000 | )(4) | — | |||||||||||
Common Stock $0.001 par value; 150,000,000 shares authorized; issued and outstanding 52,532,202 shares | 3,000 | (7) | 27,000 | (5) | ||||||||||||
22,000 | (6) | 52,000 | ||||||||||||||
Warrant valuation | — | — | 9,272,000 | (6) | 9,272,000 | |||||||||||
Additional paid in capital | 3,469,000 | 44,000 | (7) | 18,733,000 | (5) | |||||||||||
15,353,000 | (6) | 37,599,000 | ||||||||||||||
Accumulated deficit | (23,126,000 | ) | (47,000 | ) | — | (23,173,000 | ) | |||||||||
Deferred compensation | (9,000 | ) | — | — | (9,000 | ) | ||||||||||
TOTAL STOCKHOLDERS’ EQUITY (CAPITAL DEFICIT) | (5,860,000 | ) | — | 29,601,000 | 23,741,000 | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (CAPITAL) | $ | 1,190,000 | $ | — | $ | 23,100,000 | 24,290,000 | |||||||||
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PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the three month period ended December 31, 2006
Kreido Biofuels, | Pro forma | |||||||||||||||
Kreido | Inc. (formerly | Consolidating | Pro form | |||||||||||||
Laboratories | Gemwood) | Entry | Consolidated | |||||||||||||
(Audited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Sales | $ | — | $ | — | $ | — | $ | — | ||||||||
Cost of goods sold | — | — | — | — | ||||||||||||
Gross Profit | — | — | — | — | ||||||||||||
OPERATING EXPENSES | ||||||||||||||||
Research and development | 1,520,000 | — | — | 1,586,000 | ||||||||||||
Administrative expenses | 1,004,000 | 17,000 | — | 1,021,000 | ||||||||||||
Loss on sale of property and equipment | 24,000 | — | — | 24,000 | ||||||||||||
Loss on retirement of assets | 43,000 | — | — | 43,000 | ||||||||||||
Loss from operations | (2,591,000 | ) | (17,000 | ) | — | (2,608,000 | ) | |||||||||
OTHER INCOME (EXPENSES) | ||||||||||||||||
Interest expense | (828,000 | ) | — | (828,000 | ) | |||||||||||
Interest income | 3,000 | — | — | 3,000 | ||||||||||||
Other income | 149,000 | — | — | 149,000 | ||||||||||||
Total other income (expense) | (676,000 | ) | — | — | (676,000 | ) | ||||||||||
Loss before income taxes | (3,267,000 | ) | — | — | (3,284,000 | ) | ||||||||||
Income tax expense | (1,000 | ) | — | — | (1,000 | ) | ||||||||||
NET LOSS FOR THE PERIOD | $ | (3,268,000 | ) | $ | (17,000 | ) | $ | — | $ | (3,285,000 | ) | |||||
BASIC AND DILUTED LOSS PER SHARE | $ | (2.40 | ) | $ | (0.06 | ) | ||||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING | 1,362,287 | 52,532,202 | (1) | |||||||||||||
(1) | Shares used in the computation of weighted average shares outstanding consist, of the following: |
Stockholders | Share amount | |||
Kreido Biofuels, Inc. existing shareholders | 8,750,000 | |||
Kreido Labs converted note holders | 10,224,177 | |||
Kreido Labs Series A1 Preferred Stock | 619,946 | |||
Kreido Labs Series B1 Preferred Stock | 11,770,584 | |||
Kreido Labs Common Stockholders | 2,648,976 | |||
Common Stock issued pursuant Kreido Biofuels, Inc.’s private placement offering | 18,518,519 | |||
Total Common Stock outstanding | 52,532,202 | |||
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Expense | Amount | |||
Registration Fees | $ | 8,719 | ||
Printing and Engraving Costs * | $ | |||
Legal Fees * | $ | |||
Accounting Fees * | $ | |||
Transfer Agent Fees * | $ | |||
Miscellaneous Fees and Expenses * | $ | |||
Total * | $ |
* | To be completed by amendment. |
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Exhibit No. | Description | Reference | ||
2.1 | Agreement and Plan of Merger and Reorganization, dated as of January 12, 2007, by and among Kreido Biofuels, Inc., a Nevada corporation, Kreido Acquisition Corp., a California corporation and Kreido Laboratories, a California corporation. | Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). |
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Exhibit No. | Description | Reference | ||
3.1 | Amended and Restated Articles of Incorporation of Kreido Biofuels, Inc. (f/k/a Gemwood Productions, Inc.). | Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on November 3, 2006 (File No. 333-130606). | ||
3.3 | Amended and Restated Bylaws of Kreido Biofuels, Inc. | Incorporated by reference to Exhibit 3.3 to the Annual Report on Form 10-KSB filed with the Securities and Exchange Commission on April 4, 2007 (File No. 333-130606). | ||
4.1 | Form of Investor Warrant of Kreido Biofuels, Inc. | Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
4.2 | Form of Lock-Up Agreement by and between Tompkins Capital Group and each of the officers and directors of Kreido Biofuels, Inc., and certain stockholders of Kreido Laboratories. | Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
5.1 | Opinion of DLA Piper US LLP* | |||
10.1 | Escrow Agreement, dated as of January 12, 2007, by and between Kreido Biofuels, Inc., Joel A. Balbien and Gottbetter & Partners, LLP. | Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
10.2 | Form of Subscription Agreement, dated as of January 12, 2007, by and between Kreido Biofuels, Inc. and the investors in the Offering. | Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
10.3 | Form of Registration Rights Agreement, dated as of January 12, 2007, by and between Kreido Biofuels, Inc. and the investors in the Offering. | Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
10.4 | Split-Off Agreement, dated as of January 12, 2007, by and among Kreido Biofuels, Inc., Victor Manuel Savceda, Kreido Laboratories and Gemwood Leaseco, Inc. | Incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
10.5 | Employment Agreement, dated November 1, 2006, by and between Kreido Laboratories and Joel A. Balbien. | Incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). |
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Exhibit No. | Description | Reference | ||
10.6 | Form of Indemnity Agreement by and between Kreido Biofuels, Inc. and Outside Directors of Kreido Biofuels, Inc. | Incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
10.7 | 2006 Equity Incentive Plan. | Incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
10.8 | Stock Option Agreement by and between Kreido Biofuels, Inc. and Joel A. Balbien dated as of January 12, 2007. | Incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
10.9 | Form of Incentive Stock Option Agreement by and between Kreido Biofuels, Inc. and participants under the 2006 Equity Incentive Plan. | Incorporated by reference to Exhibit 10.9 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
10.10 | Form of Non-Qualified Stock Option Agreement by and between Kreido Biofuels, Inc. and participants under the 2006 Equity Incentive Plan. | Incorporated by reference to Exhibit 10.10 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
10.11 | Employment Agreement, dated March 19, 2007, by and between Kreido Biofuels, Inc. and John M. Philpott. | Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on March 23, 2007 (File No. 333-130606). | ||
10.12 | Binding Term Sheet by and between Kreido Laboratories and Tompkins Capital Group dated as of September 1, 2006 | Incorporated by reference to Exhibit 3.3 to the Annual Report on Form 10-KSB filed with the Securities and Exchange Commission on April 4, 2007 (File No. 333-130606). | ||
10.13 | Amendment to Binding Term Sheet by and between Kreido Laboratories and Tompkins Capital Group dated as of October 25, 2006 | Incorporated by reference to Exhibit 3.3 to the Annual Report on Form 10-KSB filed with the Securities and Exchange Commission on April 4, 2007 (File No. 333-130606). | ||
10.14 | Form of Indemnity Agreement for officers and directors | Incorporated by reference to Exhibit 3.3 to the Annual Report on Form 10-KSB filed with the Securities and Exchange Commission on April 4, 2007 (File No. 333-130606). | ||
10.15 | Employment Agreement, dated April 4, 2007, by and between Kreido Biofuels, Inc. and Philip Lichtenberger. | Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on April 10, 2007 (File No. 333-130606). | ||
10.16 | Employment Agreement, dated April 10, 2007, by and between Kreido Biofuels, Inc. and Alan McGrevy. | Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on April 16, 2007 (File No. 333-130606). |
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Exhibit No. | Description | Reference | ||
10.17 | Employment Agreement, dated April 28, 2007, by and between Kreido Biofuels, Inc. and Larry Sullivan. | Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 2, 2007 (File No. 333-130606). | ||
21.1 | Subsidiaries of Kreido Biofuels, Inc.* | |||
23.1 | Consent of DLA Piper US LLP (included in Exhibit 5.1).* | |||
23.2 | Consent of Vasquez & Company LLP.* |
* | Filed herewith |
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to: |
(i) | Include any prospectus required by Section 10(a)(3) of the Securities Act; | ||
(ii) | Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and | ||
(iii) | Include any additional or changed material information on the plan of distribution. |
(2) | For determining liability under the Securities Act, to 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) | To file a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering. |
(4) | For determining liability of the undersigned small business issuer under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned small business issuer undertakes that in a primary offering of securities of the undersigned small business issuer pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned small business issuer will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(i) | Any preliminary prospectus or prospectus of the undersigned small business issuer relating to the offering required to be filed pursuant to Rule 424 (§ 230.424 of this chapter); |
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(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned small business issuer or used or referred to by the undersigned small business issuer; | ||
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned small business issuer or its securities provided by or on behalf of the undersigned small business issuer; and | ||
(iv) | Any other communication that is an offer in the offering made by the undersigned small business issuer to the purchaser. |
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Kreido Biofuels, Inc. | ||||||
By: | /s/ Joel A. Balbien | |||||
Name: | Joel A. Balbien | |||||
Title: | Chief Executive Officer |
Signature | Title | Date | ||
/s/ Joel A. Balbien | Chief Executive Officer, Director (Principal Executive Officer) | May 4, 2007 | ||
/s/ Philip Lichtenberger | Senior Vice President Chief Financial Officer (Principal Financial Officer) | May 4, 2007 | ||
/s/ John M. Philpott | Vice President Chief Accounting Officer (Principal Accounting Officer) | May 4, 2007 | ||
/s/ Betsy Wood Knapp | Director | May 4, 2007 | ||
/s/ G.A. Ben Binninger | Director | May 4, 2007 |
Table of Contents
Exhibit No. | Description | Reference | ||
2.1 | Agreement and Plan of Merger and Reorganization, dated as of January 12, 2007, by and among Kreido Biofuels, Inc., a Nevada corporation, Kreido Acquisition Corp., a California corporation and Kreido Laboratories, a California corporation. | Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
3.1 | Amended and Restated Articles of Incorporation of Kreido Biofuels, Inc. (f/k/a Gemwood Productions, Inc.). | Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on November 3, 2006 (File No. 333-130606). | ||
3.3 | Amended and Restated Bylaws of Kreido Biofuels, Inc. | Incorporated by reference to Exhibit 3.3 to the Annual Report on Form 10-KSB filed with the Securities and Exchange Commission on April 4, 2007 (File No. 333-130606). | ||
4.1 | Form of Investor Warrant of Kreido Biofuels, Inc. | Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
4.2 | Form of Lock-Up Agreement by and between Tompkins Capital Group and each of the officers and directors of Kreido Biofuels, Inc., and certain stockholders of Kreido Laboratories. | Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
5.1 | Opinion of DLA Piper US LLP* | |||
10.1 | Escrow Agreement, dated as of January 12, 2007, by and between Kreido Biofuels, Inc., Joel A. Balbien and Gottbetter & Partners, LLP. | Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
10.2 | Form of Subscription Agreement, dated as of January 12, 2007, by and between Kreido Biofuels, Inc. and the investors in the Offering. | Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
10.3 | Form of Registration Rights Agreement, dated as of January 12, 2007, by and between Kreido Biofuels, Inc. and the investors in the Offering. | Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
10.4 | Split-Off Agreement, dated as of January 12, 2007, by and among Kreido Biofuels, Inc., Victor Manuel Savceda, Kreido Laboratories and Gemwood Leaseco, Inc. | Incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). |
Table of Contents
Exhibit No. | Description | Reference | ||
10.5 | Employment Agreement, dated November 1, 2006, by and between Kreido Laboratories and Joel A. Balbien. | Incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
10.6 | Form of Indemnity Agreement by and between Kreido Biofuels, Inc. and Outside Directors of Kreido Biofuels, Inc. | Incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
10.7 | 2006 Equity Incentive Plan. | Incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
10.8 | Stock Option Agreement by and between Kreido Biofuels, Inc. and Joel A. Balbien dated as of January 12, 2007. | Incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
10.9 | Form of Incentive Stock Option Agreement by and between Kreido Biofuels, Inc. and participants under the 2006 Equity Incentive Plan. | Incorporated by reference to Exhibit 10.9 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
10.10 | Form of Non-Qualified Stock Option Agreement by and between Kreido Biofuels, Inc. and participants under the 2006 Equity Incentive Plan. | Incorporated by reference to Exhibit 10.10 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2007 (File No. 333-130606). | ||
10.11 | Employment Agreement, dated March 19, 2007, by and between Kreido Biofuels, Inc. and John M. Philpott. | Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on March 23, 2007 (File No. 333-130606). | ||
10.12 | Binding Term Sheet by and between Kreido Laboratories and Tompkins Capital Group dated as of September 1, 2006 | Incorporated by reference to Exhibit 3.3 to the Annual Report on Form 10-KSB filed with the Securities and Exchange Commission on April 4, 2007 (File No. 333-130606). | ||
10.13 | Amendment to Binding Term Sheet by and between Kreido Laboratories and Tompkins Capital Group dated as of October 25, 2006 | Incorporated by reference to Exhibit 3.3 to the Annual Report on Form 10-KSB filed with the Securities and Exchange Commission on April 4, 2007 (File No. 333-130606). | ||
10.14 | Form of Indemnity Agreement for officers and directors | Incorporated by reference to Exhibit 3.3 to the Annual Report on Form 10-KSB filed with the Securities and Exchange Commission on April 4, 2007 (File No. 333-130606). | ||
10.15 | Employment Agreement, dated April 4, 2007, by and between Kreido Biofuels, Inc. and Philip Lichtenberger. | Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on April 10, 2007 (File No. 333-130606). |
Table of Contents
Exhibit No. | Description | Reference | ||
10.16 | Employment Agreement, dated April 10, 2007, by and between Kreido Biofuels, Inc. and Alan McGrevy. | Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on April 16, 2007 (File No. 333-130606). | ||
10.17 | Employment Agreement, dated April 28, 2007, by and between Kreido Biofuels, Inc. and Larry Sullivan. | Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 2, 2007 (File No. 333-130606). | ||
21.1 | Subsidiaries of Kreido Biofuels, Inc.* | |||
23.1 | Consent of DLA Piper US LLP (included in Exhibit 5.1).* | |||
23.2 | Consent of Vasquez & Company LLP.* |
* | Filed herewith |