California
|
3751
|
94-3210624
|
(State
or other jurisdiction of
incorporation
or organization)
|
(Primary
Standard Industrial
Classification
Code Number)
|
(IRS
Employee Identification No.)
|
Title
of each class of securities to be registered
|
Amount
to be
Registered
|
Proposed
maximum
offering
price
per share
|
Proposed
maximum
aggregate
offering
price
|
Amount
of
registration
fee
|
||||||||||||
Common
Stock, no par value, held by current stockholders subject to this
offering
|
721,880
|
$ |
0.995
|
$ |
718,271
|
(1) | $ |
22.05
|
||||||||
130%
of Common Stock underlying 8% convertible notes held by current
stockholders subject to this offering
|
4,828,061
|
$ |
0.727
|
$ |
3,510,000
|
(2) | $ |
107.76
|
||||||||
130%
Common Stock underlying warrants held by current stockholders subject
to
this offering
|
772,201
|
$ |
0.80
|
$ |
617,761
|
(2) | $ |
18.97
|
||||||||
130%
Common Stock underlying warrants held by current stockholders subject
to
this offering
|
260,000
|
$ |
1.10
|
$ |
286,000
|
(2) | $ |
8.78
|
||||||||
130%
Common Stock underlying warrants held by current stockholders subject
to
this offering
|
514,800
|
$ |
1.20
|
$ |
617,760
|
(2) | $ |
18.97
|
||||||||
Common
Stock underlying warrants held by current stockholders subject to
this
offering
|
2,810,500
|
$ |
1.20
|
$ |
3,372,600
|
(2) | $ |
103.54
|
||||||||
Common
Stock underlying warrants held by current stockholders subject to
this offering
|
1,100,000
|
$ |
1.75
|
$ |
1,925,000
|
(2) | $ |
59.10
|
Total
|
11,007,442
|
$ |
11,047,392
|
$ |
339.17
|
(3) |
(1)
|
Estimated
solely for the purpose of calculating the amount of the registration
fee
pursuant to Rule 457(c) of the Securities Act of 1933. The price
per share
and aggregate offering price are based upon the average of the high
and
low prices of the common stock of the Registrant as traded in the
Over-The-Counter Market and reported in the Electronic Bulletin Board
of
the NASD on June 25, 2007.
|
(2)
|
Calculated
in accordance with Rule 457(g) of the Securities Act of
1933.
|
(3)
|
All
of which has been previously
paid.
|
●
|
4,828,061
shares of common stock representing 130% of the shares underlying
8%
Senior Convertible Notes, at a conversion price of $0.727 per share,
issued in conjunction with our private placements completed on December
5,
2006 and February 20, 2007, as amended on April 30, 2007 and June
26,
2007;
|
●
|
772,201
shares of common stock representing 130% of the shares issuable upon
exercise of outstanding common stock purchase warrants we issued
in
connection with our issuance of the 8% Senior Convertible Notes on
December 5, 2006, at an exercise price of $0.80 per share;
|
●
|
514,800
shares of common stock representing 130% of the shares issuable upon
exercise of outstanding common stock purchase warrants we issued
in
connection with our issuance of the 8% Senior Convertible Notes on
February 20, 2007, at an exercise price of $1.20 per share;
|
●
|
141,750
shares of common stock issued pursuant to the Amendment Agreement
dated
June 26, 2007;
|
●
|
260,000
shares of common stock representing 130% of the shares issuable upon
exercise of outstanding common stock purchase warrants we issued
pursuant
to the Amendment Agreement dated June 26, 2007, at an exercise price
of
$1.10 per share;
|
●
|
3,910,500
shares of common stock underlying common stock purchase warrants
issued
pursuant to various subscription agreements entered into in 2004,
2006 and
2007; and
|
●
|
580,130
shares of common stock issued pursuant to various subscription agreements
entered into in 2004, 2006 and
2007.
|
Prospectus
Summary
|
4 |
Risk
Factors
|
5 |
Use
of Proceeds
|
10 |
Selling
Security Holders
|
10 |
Plan
of Distribution
|
17 |
Legal
Proceedings
|
18 |
Directors,
Executive Officers, Promoters and Control Persons
|
21 |
Security
Ownership of Certain Beneficial Owners and Management
|
22 |
Description
of Securities
|
24 |
Interest
of Named Experts and Counsel
|
28 |
Disclosure
of Commission Position of Indemnification for Securities Act
Liabilities
|
29 |
Description
of Business
|
30 |
Management’s
Discussion and Analysis or Plan of Operations
|
39 |
Description
of Property
|
56 |
Certain
Relationships and Related Transactions
|
56 |
Market
For Common Equity and Related Stockholder Matters
|
57 |
Executive
Compensation
|
58 |
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
61 |
Where
You Can Find More Information
|
61 |
Financial
Statements
|
62 |
●
|
4,828,061
shares of common stock representing 130% of the shares underlying
8%
Senior Convertible Notes, at a conversion price of $0.727 per share,
issued in conjunction with our private placements completed on December
5,
2006 and February 20, 2007, as amended on April 30, 2007 and June
26,
2007;
|
●
|
772,201
shares of common stock representing 130% of the shares issuable upon
exercise of outstanding common stock purchase warrants we issued
in
connection with our issuance of the 8% Senior Convertible Notes on
December 5, 2006, at an exercise price of $0.80 per share;
|
●
|
514,800
shares of common stock representing 130% of the shares issuable upon
exercise of outstanding common stock purchase warrants we issued
in
connection with our issuance of the 8% Senior Convertible Notes on
February 20, 2007, at an exercise price of $1.20 per share;
|
●
|
141,750
shares of common stock issued pursuant to the Amendment Agreement
dated
June 26, 2007;
|
●
|
260,000
shares of common stock representing 130% of the shares issuable upon
exercise of outstanding common stock purchase warrants we issued
pursuant
to the Amendment Agreement dated June 26, 2007, at an exercise price
of
$1.10 per share;
|
●
|
3,910,500
shares of common stock underlying common stock purchase warrants
issued
pursuant to various subscription agreements entered into in 2004,
2006 and
2007; and
|
●
|
580,130
shares of common stock issued pursuant to various subscription agreements
entered into in 2004, 2006 and
2007.
|
·
|
increasing
our vulnerability to general adverse economic and industry
conditions;
|
·
|
limiting
our ability to obtain additional financing to fund future working
capital,
capital expenditures, research and development and other general
corporate
requirements;
|
·
|
limiting
our flexibility in planning for, or reacting to, changes in our business
and the industry; and
|
·
|
placing
us at a disadvantage compared to our competitors with less debt and
competitors that have better access to capital
resources.
|
·
|
continued
development of product technology;
|
·
|
the
environmental consciousness of
customers;
|
·
|
the
ability of electric vehicles to successfully compete with vehicles
powered
by internal combustion engines;
|
·
|
widespread
electricity shortages and the resultant increase in electricity prices,
especially in our primary market, California, which could
derail our past and present efforts to promote electric vehicles
as a
practical solution to vehicles which require gasoline;
and
|
·
|
whether
future regulation and legislation requiring increased use of nonpolluting
vehicles is enacted.
|
Name
of Selling Security Holders
|
|
Number
of
Shares
Owned
Before
Offering
|
|
Number
of
Shares
Being
Offered
|
|
Number
of
Shares
Owned
After
Offering
(1)
|
|
Percentage
Owned
After
Offering
(2)
|
|
||||
Gemini
Master Fund, Ltd. (3)
|
|
|
3,744,750
|
|
|
3,634,750
|
|
|
110,000
|
|
|
*
|
|
Grey
K Offshore Fund, Ltd. (4)
|
|
|
1,796,101
|
|
|
1,796,101
|
|
|
0
|
|
|
*
|
|
Grey
K Fund, LP (5)
|
|
|
721,602
|
|
|
721,602
|
|
|
0
|
|
|
*
|
|
Grey
K Offshore Leveraged Fund, Ltd. (6)
|
|
|
364,359
|
|
|
364,359
|
|
|
0
|
|
|
*
|
|
Diversified
Equity Funding, L.P. (7)
|
|
|
2,311,820
|
|
|
198,000
|
|
|
2,113,820
|
|
|
4.4
|
%
|
Diversified
Strategies Fund, LLC (8)
|
|
|
309,320
|
|
|
66,000
|
|
|
243,320
|
|
|
*
|
|
HES
Gift Trust (9)
|
|
|
3,744,486
|
|
|
1,166,000
|
|
|
2,578,486
|
|
|
5.1
|
%
|
Wendy
Spatz (10)
|
|
|
171,100
|
|
|
49,500
|
|
|
121,600
|
|
|
*
|
|
Joseph
S. Gottlieb
|
|
|
121,000
|
|
|
121,000
|
|
|
0
|
|
|
*
|
|
Marleen
Mulder (11)
|
|
|
185,000
|
|
|
143,000
|
|
|
42,000
|
|
|
*
|
|
Randal
Ames Churchill (12)
|
|
|
263,000
|
|
|
143,000
|
|
|
120,000
|
|
|
*
|
|
Raymond
J. Markman (13)
|
|
|
110,000
|
|
|
110,000
|
|
|
0
|
|
|
*
|
|
The
Banks Group LLC (14)
|
|
|
2,439,130
|
|
|
1,339,130
|
|
|
1,100,000
|
|
|
2.2
|
%
|
Thomas
Heidemann (15)
|
|
|
1,100,000
|
|
|
1,100,000
|
|
|
0
|
|
|
*
|
|
William
Courtright (16)
|
|
|
199,230
|
|
|
55,000
|
|
|
144,230
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
17,580,898
|
|
|
11,007,442
|
|
|
6,573,456
|
|
|
|
|
(1)
|
Assumes
that all shares will be resold by the selling stockholders after
this
offering.
|
|
|
(2)
|
Percentage
based upon 48,022,954 shares of common stock outstanding as of
August 16,
2007.
|
|
|
(3)
|
Includes
2,682,256 shares representing 130% of the shares of common stock
underlying the Convertible Notes, 514,800 shares representing
130% of the
shares of common stock underlying the Warrants exercisable at
$0.80 per
share, 214,500 shares representing 130% of the shares of common
stock
underlying the Warrants exercisable at $1.20 per share, 110,000
shares of
common stock underlying warrants exercisable at $1.36 per share,
and
144,444 shares representing 130% of the shares of common stock
underlying
warrants exercisable at $1.10 per share. The Investment Manager
of Gemini Master Fund, Ltd. is Gemini Strategies, LLC. The
Managing Member of Gemini Strategies, LLC is Mr. Steven W.
Winters. As such, Mr. Winters may be deemed beneficial owner of
the shares; however, Mr. Winters disclaims beneficial ownership
of such
shares.
|
|
|
(4)
|
Includes
1,333,796 shares representing 130% of the shares of common stock
underlying the Convertible Notes, 187,954 shares representing
130% of the
shares of common stock underlying the Warrants exercisable at
$0.80 per
share, 163,363 shares representing 130% of the shares of common
stock
underlying the Warrants exercisable at $1.20 per share, and 71,828
shares
representing 130% of the shares of common stock underlying warrants
exercisable at $1.10 per share. The natural person with voting
and
investment decision power for the selling stockholder is Robert
Koltun.
|
|
|
(5)
|
Includes
536,630 shares representing 130% of the shares of common stock
underlying
the Convertible Notes, 69,447 shares representing 130% of the
shares of
common stock underlying the Warrants exercisable at $0.80 per
share,
70,871 shares representing 130% of the shares of common stock
underlying
the Warrants exercisable at $1.20 per share, and 28,899 shares
representing 130% of the shares of common stock underlying penalty
warrants exercisable at $1.10 per share. The natural person with
voting
and investment decision power for the selling stockholder is
Robert
Koltun.
|
|
|
(6)
|
Includes
275,378 shares representing 130% of the shares of common stock
underlying
the Convertible Notes, 66,066 shares representing 130% of the
shares of
common stock underlying the Warrants exercisable at $1.20 per
share, and
14,829 shares representing 130% of the shares of common stock
underlying
penalty warrants exercisable at $1.10 per share. The natural
person with voting and investment decision power for the selling
stockholder is Robert Koltun.
|
|
|
(7)
|
Includes
198,000 shares of common stock underlying warrants exercisable
at $1.20
per share which are being offered for sale and 1,243,000 shares
of common
stock underlying warrants exercisable at $1.20 per share which
are not
being offered for sale. The natural person with voting and
investment decision power for the selling stockholder is Sonya
Stay.
|
|
|
(8)
|
Includes
66,000 shares of common stock underlying warrants exercisable
at $1.20 per
share which are being offered for sale. The natural person with
voting and investment decision power for the selling stockholder
is Sonya
Stay.
|
|
|
(9)
|
Includes
3,562,000 shares of common stock underlying warrants exercisable
at $1.20
per share, of which 1,166,000 shares are being offered for
sale. The natural person with voting and investment decision
power for the selling stockholder is Sonya Stay.
|
|
|
(10)
|
Includes
49,500 shares of common stock underlying warrants exercisable
at $1.20 per
share which are being offered for sale.
|
|
|
(11)
|
Includes
33,000 shares of common stock underlying warrants exercisable
at $1.20 per
share which are being offered for sale.
|
|
|
(12)
|
Includes
33,000 shares of common stock underlying warrants exercisable
at $1.20 per
share which are being offered for sale.
|
|
|
(13)
|
Includes
110,000 shares of common stock underlying warrants exercisable
at $1.20
per share which are being offered for sale.
|
|
|
(14)
|
Includes
2,200,000 shares of common stock underlying warrants exercisable
at $1.20
per share, of which 1,100,000 shares are being offered for
sale. The natural person with voting and investment decision
power for the selling stockholder is Jeffrey G. Banks.
|
|
|
(15)
|
Includes
1,100,000 shares of common stock underlying warrants exercisable
at $1.75
per share which are being offered for sale.
|
(16)
|
Includes
55,000 shares of common stock underlying warrants exercisable
at $1.20 per
share which are being offered for
sale.
|
8%
Senior Convertible Notes
December
2006 Transaction
|
||
130%
of the Number of Common Shares Underlying 8% Senior Convertible
Notes
|
Market
Price per Common Share at Close of OTCBB Market on December 5,
2006
|
Total
Dollar Value of Common Shares Underlying 8% Senior Convertible
Notes
|
2,682,256
|
$0.89
|
$2,387,207.70
|
8%
Senior Convertible Notes
February
2007 Transaction
|
||
130%
of the Number of Common Shares Underlying 8% Senior Convertible
Notes
|
Market
Price per Common Share at Close of OTCBB Market on February 20,
2007
|
Total
Dollar Value of Common Shares Underlying 8% Senior Convertible
Notes
|
2,145,805
|
$1.08
|
$2,317,469.05
|
$1,500,000
8%
Senior Convertible Notes
December
2006 Transaction
|
|||||||
Investor
|
Payment
|
Payment
Date
|
Amount
|
||||
Gemini
Master Fund, Ltd.
|
Interest
Payment (1)
|
January
1, 2007
|
5,778
|
||||
Interest
Payment (1)
|
April
1, 2007
|
20,000
|
|||||
Interest
Payment (1)
|
July
1, 2007
|
20,000
|
|||||
Interest
Payment (1)
|
October
1, 2007
|
18,333
|
|||||
Interest
Payment (1)
|
January
1, 2008
|
13,333
|
|||||
Interest
Payment (1)
|
April
1, 2008
|
8,333
|
|||||
Interest
Payment (1)
|
July
1, 2008
|
3,333
|
|||||
Liquidated
Damages (2)
|
—
|
210,521
|
|||||
Total:
Gemini Master Fund, Ltd.
|
$
|
299,631
|
|||||
Grey
K Offshore Fund, Ltd.
|
Interest
Payment (1)
|
January
1, 2007
|
2,109
|
||||
Interest
Payment (1)
|
April
1, 2007
|
7,302
|
|||||
Interest
Payment (1)
|
July
1, 2007
|
7,302
|
|||||
Interest
Payment (1)
|
October
1, 2007
|
6,694
|
|||||
Interest
Payment (1)
|
January
1, 2008
|
4,868
|
|||||
Interest
Payment (1)
|
April
1, 2008
|
3,043
|
|||||
Interest
Payment (1)
|
July
1, 2008
|
1,217
|
|||||
Liquidated
Damages (2)
|
—
|
76,860
|
|||||
Total:
Grey K Offshore Fund, Ltd.
|
$
|
109,395
|
|||||
Grey
K Fund, LP
|
Interest
Payment (1)
|
January
1, 2007
|
779
|
||||
Interest
Payment (1)
|
April
1, 2007
|
2,698
|
|||||
Interest
Payment (1)
|
July
1, 2007
|
2,698
|
|||||
Interest
Payment (1)
|
October
1, 2007
|
2,473
|
|||||
Interest
Payment (1)
|
January
1, 2008
|
1,799
|
|||||
Interest
Payment (1)
|
April
1, 2008
|
1,124
|
|||||
Interest
Payment (1)
|
July
1, 2008
|
450
|
|||||
Liquidated
Damages (2)
|
—
|
28,397
|
|||||
Total:
Grey K Fund, LP
|
$
|
40,418
|
$1,200,000
8%
Senior Convertible Notes
February
2007 Transaction
|
|||||||
Investor
|
Payment
|
Payment
Date
|
Amount
|
||||
Gemini
Master Fund, Ltd.
|
Interest
Payment (1)
|
April
1, 2007
|
4,556
|
||||
Interest
Payment (1)
|
July
1, 2007
|
10,000
|
|||||
Interest
Payment (1)
|
October
1, 2007
|
9,167
|
|||||
Interest
Payment (1)
|
January
1, 2008
|
6,667
|
|||||
Interest
Payment (1)
|
April
1, 2008
|
4,167
|
|||||
Interest
Payment (1)
|
July
1, 2008
|
1,667
|
|||||
Liquidated
Damages (2)
|
—
|
117,761
|
|||||
Total:
Gemini Master Fund, Ltd.
|
$
|
153,985
|
|||||
Grey
K Offshore Fund, Ltd.
|
Interest
Payment (1)
|
April
1, 2007
|
3,470
|
||||
Interest
Payment (1)
|
July
1, 2007
|
7,616
|
|||||
Interest
Payment (1)
|
October
1, 2007
|
6,981
|
|||||
Interest
Payment (1)
|
January
1, 2008
|
5,077
|
|||||
Interest
Payment (1)
|
April
1, 2008
|
3,173
|
|||||
Interest
Payment (1)
|
July
1, 2008
|
1,269
|
|||||
Liquidated
Damages (2)
|
—
|
89,684
|
|||||
Total:
Grey K Offshore Fund, Ltd.
|
$
|
117,270
|
|||||
Grey
K Fund, LP
|
Interest
Payment (1)
|
April
1, 2007
|
1,505
|
||||
Interest
Payment (1)
|
July
1, 2007
|
3,304
|
|||||
Interest
Payment (1)
|
October
1, 2007
|
3,029
|
|||||
Interest
Payment (1)
|
January
1, 2008
|
2,203
|
|||||
Interest
Payment (1)
|
April
1, 2008
|
1,377
|
|||||
Interest
Payment (1)
|
July
1, 2008
|
551
|
|||||
Liquidated
Damages (2)
|
—
|
38,909
|
|||||
Total:
Grey K Fund, LP
|
$
|
50,878
|
|||||
Grey
K Offshore Leveraged Fund, Ltd.
|
Interest
Payment (1)
|
April
1, 2007
|
1,403
|
||||
Interest
Payment (1)
|
July
1, 2007
|
3,080
|
|||||
Interest
Payment (1)
|
October
1, 2007
|
2,823
|
|||||
Interest
Payment (1)
|
January
1, 2008
|
2,053
|
|||||
Interest
Payment (1)
|
April
1, 2008
|
1,283
|
|||||
Interest
Payment (1)
|
July
1, 2008
|
513
|
|||||
Liquidated
Damages (2)
|
—
|
36,268
|
|||||
Total:
Grey K Offshore Leveraged Fund, Ltd.
|
$
|
47,423
|
|||||
Total
possible payments to Selling Security Holders
|
$
|
819,000
|
(1)
|
This
Note shall bear interest on the unpaid principal amount hereof
(“Interest”) at an annual rate equal to eight percent (8%),
computed on the basis of a 360-day year and calculated using
the actual
number of days elapsed since the Issue Date or the date on which
Interest
was most recently paid, as the case may be, and if not timely
paid as
provided herein, compounded monthly. The Company shall pay accrued
Interest (x) on each Scheduled Interest Payment Date, (y) on
the Maturity
Date and (z) on any date on which the entire principal amount
of this Note
is paid in full (whether through conversion or otherwise) (each
of the
foregoing clauses (x), (y) and (z) being
referred to herein as an “Interest Payment
Date”). ”). “Scheduled Interest Payment
Date” means each April 1, July 1, October 1, and January 1 following
the Issue Date, with the first Scheduled Interest Payment Date
for the
December 5, 2006 Note occurring on January 1, 2007 and the first
Scheduled
Interest Payment Date for the February 20, 2007 Note occurring
on April 1,
2007, provided, that if any of such days in any year is not a
Business Day, then the Scheduled Interest Payment Date shall
be the
Business Day immediately following such date.
|
(2)
|
If
(i) the Registration Statement is not filed on or before the
Filing
Deadline of March 5, 2007 or declared effective by the Commission
on or
before the Registration Deadline of June 5, 2007 (ii) after a
Registration
Statement has been declared effective by the Commission, sales
of
Registrable Securities (other than such Registrable Securities
as are then
freely saleable pursuant to Rule 144(k)) cannot be made by a
Holder under
a Registration Statement for any reason not within the exclusive
control
of such Holder or (iii) an amendment or supplement to a Registration
Statement, or a new registration statement, required to be filed
pursuant
to the terms of Section 3(j) of the Registration Rights Agreement
dated December 5, 2006, is not filed on or before the date required
by
such paragraph (each of the foregoing clauses (i), (ii)
and (iii) being referred to herein as a “Registration
Default”), the Company shall make monthly cash payments (pro
rated for partial periods) to each Holder equal to such Holder’s
pro rata share (based on the aggregate number of Registrable
Securities then held by or issuable to such Holder as of the
occurrence of
the Registration Deadline) equal to one percent (1%) of the aggregate
Purchase Price paid by such Holder for such Holder’s Note and Warrant for
each thirty (30) day period (pro rated for partial periods) in
which a
Registration Default exists. Each payment required to be made
under this
Section 2(d) shall be made within two (2) Business Days following
the last day of each calendar month in which a Registration Default
exists. Any such payment shall be in addition to any other remedies
available to each Holder at law or in equity, whether pursuant
to the
terms hereof, the Securities Purchase Agreement, the Notes, or
otherwise.
|
December
2006 Transaction
|
||||||||||||||||
Investor
|
Total
Gross
Proceeds
|
Total
Interest Payments December 5, 2006 through
December
5, 2007
|
Total
Potential Liquidated Damages Payments December 5, 2006
through
December
5, 2007
|
Net
Proceeds
at
December 5, 2007
|
||||||||||||
Gemini
Master Fund, Ltd.
|
$ |
1,000,000
|
$ |
64,111
|
$ |
90,521
|
$ |
845,368
|
||||||||
Grey
K Offshore Fund, Ltd.
|
$ |
365,100
|
$ |
23,407
|
$ |
33,048
|
$ |
308,645
|
||||||||
Grey
K Fund, LP
|
$ |
134,900
|
$ |
8,648
|
$ |
12,209
|
$ |
114,043
|
||||||||
$ |
1,500,000
|
$ |
96,166
|
$ |
135,778
|
|||||||||||
$ |
1,268,056
|
February
2007 Transaction
|
||||||||||||||||
Investor
|
Total
Gross
Proceeds
|
Total
Interest Payments February 20, 2007 through
February
20, 2008
|
Total
Potential Liquidated Damages Payments February 20, 2007
through
February
20, 2008
|
Net
Proceeds
at
February 20, 2008
|
||||||||||||
Gemini
Master Fund, Ltd.
|
$ |
500,000
|
$ |
30,390
|
$ |
57,761
|
$ |
411,849
|
||||||||
Grey
K Offshore Fund, Ltd.
|
$ |
380,800
|
$ |
23,144
|
$ |
43,988
|
$ |
313,668
|
||||||||
Grey
K Fund, LP
|
$ |
165,200
|
$ |
10,041
|
$ |
19,085
|
$ |
136,074
|
||||||||
Grey
K Offshore Leveraged Fund, Ltd.
|
$ |
154,000
|
$ |
9,359
|
$ |
17,788
|
$ |
126,853
|
||||||||
$ |
1,200,000
|
$ |
72,934
|
$ |
138,622
|
|||||||||||
$ |
988,444
|
·
|
the
closing market price per share of the common shares underlying
the 8%
Senior Convertible Notes on the date of the sale of the 8%
Senior
Convertible Notes;
|
·
|
the
conversion price per share of the underlying common shares
on the date of
the sale of the 8% Senior Convertible
Notes;
|
·
|
the
total possible common shares underlying the 8% Senior Convertible
Notes
(assuming no interest payments and complete conversion throughout
the term
of the notes);
|
·
|
the
combined closing market price of the total number of common
shares
underlying the 8% Senior Convertible Notes, calculated by using
closing
market price per share on the date of the sale of the 8% Senior
Convertible Notes, and the total possible number of common
shares
underlying such 8% Senior Convertible
Notes;
|
·
|
the
combined conversion price of the total number of common shares
underlying
the 8% Senior Convertible Notes, calculated by using the conversion
price
on the date of the sale of the 8% Senior Convertible Notes,
and the total
possible number of common shares underlying such 8% Senior
Convertible
Notes; and
|
·
|
the
total possible discount to the closing market price as of the
date of the
sale of the 8% Senior Convertible Notes, calculated by subtracting
the
combined conversion price on the date of sale from the combined
closing
market price on that date.
|
Closing
Market
Price
Per
Share
|
Conversion
Price
Per
Share
|
Total
Possible Shares Underlying 8% Senior Convertible Notes (Assuming
No
Interest Payments)
|
Combined
Closing Market Price of the Total Number of Shares Underlying
8% Senior
Convertible Notes
|
Combined
Conversion Price of the Total Number of Shares Underlying 8%
Senior
Convertible Notes
|
Total
Possible
Discount
to
Closing
Market
Price
|
|||||||||||||||||
$ | 0.89 | (1) | $ |
0.727
|
2,063,274
|
$ |
1,836,314
|
$ |
1,500,000
|
$ |
336,314
|
|||||||||||
$ | 1.08 | (2) | $ |
0.727
|
1,650,619
|
$ |
1,782,669
|
$ |
1,200,000
|
$ |
582,669
|
|||||||||||
3,713,893
|
$ |
3,618,983
|
$ |
2,700,000
|
$ |
918,983
|
(1)
|
The
date of the first sale of 8% Senior Convertible Notes was December
5,
2006.
|
(2)
|
The
date of the second sale of 8% Senior Convertible Notes was February
20,
2007.
|
·
|
the
closing market price per share of the common shares underlying
the
warrants as of the date of the sale of such
warrants;
|
·
|
the
conversion price per share of the underlying common shares
on the date of
the sale of the warrants;
|
·
|
the
total possible common shares underlying the
warrants;
|
·
|
the
combined closing market price of the total number of common
shares
underlying the warrants, calculated by using the closing market
price per
share on the date of the sale of the warrants, and the total
possible
number of common shares underlying such
warrants;
|
·
|
the
combined conversion price of the total number of common shares
underlying
the warrants, calculated by using the conversion price on the
date of the
sale of the warrants, and the total possible number of common
shares
underlying such warrants; and
|
·
|
the
total possible discount to the closing market price as of the
date of the
sale of the warrants, calculated by subtracting the combined
conversion
price on the date of sale of the warrants from the combined
closing market
price on such date of
sale.
|
Closing
Market Price Per Share as of the Date of Sale of the Discounted
Warrants
|
Exercise/
Conversion
Price
Per Share
|
Total
Possible Shares Underlying Discounted Warrants
|
Combined
Closing Market Price of the Total Number of Shares Underlying
Discounted
Warrants
|
Combined
Exercise/
Conversion
Price of the Total Number of Shares Underlying Discounted
Warrants
|
Total
Possible Discount to the Closing Market Price
|
|||||||||||||||||
$ | 0.89 | (1) | $ |
0.80
|
594,001
|
$ |
525,991
|
$ |
475,201
|
$ |
50,790
|
(1)
|
The
date of the sale of the discounted warrants was December 5,
2006.
|
·
|
the
gross proceeds paid or payable to us in the 8% Senior Convertible
Note
transactions;
|
·
|
all
interest payments that have been made and all interest and
liquidated
damage payments that we may be required to
make;
|
·
|
the
resulting net proceeds to us;
|
·
|
the
combined total possible profit to be realized as a result of
any
conversion discounts regarding the shares underlying the 8%
Senior
Convertible Notes and certain warrants that are held by the
Selling
Security Holders;
|
·
|
disclosure—as
a percentage—of the aggregate amount of all possible interest and
liquidated damage payments, and the total possible discount
to the closing
market price of the shares underlying the 8% Senior Convertible
Notes
divided by the net proceeds to us from the sale of the 8% Senior
Convertible Notes; and
|
·
|
disclosure—as
a percentage—of the aggregate amount of all possible interest and
liquidated damage payments, and the total possible discount
to the closing
market price of the shares underlying the 8% Senior Convertible
Notes
divided by the net proceeds to us from the sale of the 8% Senior
Convertible Notes averaged over the term of the
notes.
|
Gross
proceeds paid to us in the 8% Senior Convertible Note
transactions:
|
$
|
2,700,000
|
||
All
interest payments that have been made, and all interest and liquidated
damage payments that we may be required to make:
|
$
|
819,000
|
||
Resulting
net proceeds
|
$
|
1,881,000
|
||
Combined
total possible profit to be realized as a result of conversion
discounts
regarding the common shares underlying the 8% Senior Convertible
Notes and
discounted warrants based on the closing market price of our
common shares
on the dates of the sales of the 8% Senior Convertible Notes
(1)
|
$
|
969,773
|
||
Percent
of the total amount of all possible payments and the total possible
discount to the closing market price of the shares underlying
the 8%
Senior Convertible Notes divided by the net proceeds from the
sale of the
8% Senior Convertible Notes
|
92.4
|
%
|
||
Percent
of the total amount of all possible payments and the total possible
discount to the closing market price of the shares underlying
the 8%
Senior Convertible Notes divided by the net proceeds from the
sale of the
8% Senior Convertible Notes averaged over the term of the
notes
|
46.2
|
%
|
(1)
|
The
dates of sale of the 8% Senior Convertible Notes were December
5, 2006 and
February 20, 2007. The date of sale of the discounted warrants
was
December 5, 2007
|
·
|
the
date of the transaction;
|
·
|
the
number of shares of the class of securities subject to the
transaction
that were outstanding prior to the
transaction;
|
·
|
the
number of shares of the class of securities subject to the
transaction
that were outstanding prior to the transaction and held by
persons other
than the Selling Security Holders, affiliates of the company,
or
affiliates of the Selling Security
Holders;
|
·
|
the
number of shares of the class of securities subject to the
transaction
that were issued or issuable in connection with the
transaction;
|
·
|
the
percentage of total issued and outstanding securities that
were issued or
issuable in the transaction (assuming full issuance), with
the percentage
calculated by taking the number of shares issued and outstanding
prior to
the applicable transaction and held by persons other than the
Selling
Security Holders, affiliates of the company, or affiliates
of the Selling
Security Holders, and dividing that number by the number of
shares issued
or issuable in connection with the applicable
transaction;
|
·
|
the
market price per share of the class of securities subject to
the
transaction immediately prior to the transaction;
and
|
·
|
the
current market price per share of the class of securities subject
to the
transaction.
|
Name
of Selling Security Holder
|
Date
of prior securities transaction
|
Number
of shares of the class of securities subject to the transaction
that were
outstanding prior to the transaction
|
Number
of shares of the class of securities subject to the transaction
that were
outstanding prior to the transaction and held by persons other
than the
Selling Security Holders, affiliates of the company, or affiliates
of the
Selling Security Holders
|
Number
of shares of the class of securities subject to the transaction
that were
issued or issuable in connection with the
transaction
|
Percentage
of total issued and outstanding securities that were issued
or issuable in
the transaction (assuming full issuance)
|
Market
price per share of the class of securities subject to the transaction
immediately prior to the transaction
|
Current
market price per share of the class of securities subject to
the
transaction (1)
|
|||||||
Diversified
Equity Funding, LP
|
11/10/2006
|
36,591,694
|
31,381,200
|
200,000
|
0.64%
|
$0.80
|
$0.999
|
|||||||
Diversified
Equity Funding, LP
|
12/12/2006
|
37,964,521
|
32,757,293
|
21,200
|
0.06%
|
$0.80
|
$0.999
|
|||||||
Diversified
Equity Funding, LP
|
01/02/2007
|
38,584,471
|
32,744,793
|
1,875,000
(2)
|
5.73%
|
$0.72
|
$0.999
|
|||||||
HES
Gift Trust
|
11/10/2006
|
36,591,694
|
31,381,200
|
150,000
|
0.48%
|
$0.80
|
$0.999
|
|||||||
HES
Gift Trust
|
12/12/2006
|
37,964,521
|
32,757,293
|
15,896
|
0.05%
|
$0.80
|
$0.999
|
|||||||
HES
Gift Trust
|
01/02/2007
|
38,584,471
|
32,744,793
|
1,375,000
(3)
|
4.20%
|
$0.72
|
$0.999
|
|||||||
HES
Gift Trust
|
03/30/2007
|
43,998,721
|
37,313,494
|
2,000,000
(4)
|
5.36%
|
$1.04
|
$0.999
|
|||||||
Wendy
Spatz
|
11/10/2006
|
37,964,521
|
32,757,293
|
100,000
|
0.31%
|
$0.80
|
$0.999
|
|||||||
Wendy
Spatz
|
12/12/2006
|
37,964,521
|
32,757,293
|
10,600
|
0.03%
|
$0.80
|
$0.999
|
|||||||
The
Banks Group LLC
|
04/12/2004
|
(8)
|
(8)
|
500,000
(5)
|
(8)
|
$0.50
|
$0.999
|
|||||||
The
Banks Group LLC
|
11/16/2004
|
(8)
|
(8)
|
2,000,000
(6)
|
(8)
|
$1.22
|
$0.999
|
|||||||
William
Courtright
|
07/18/2003
|
(8)
|
(8)
|
530,000
(7)
|
(8)
|
$1.18
|
$0.999
|
(1)
|
Current
market price per share is based on the closing price of ZAP’s common stock
on August 22, 2007 as reported on the Over-the-Counter Bulleting
Board.
|
(2)
|
Includes
warrants to purchase 1,250,000 shares of common stock at an
exercise price
of $1.20 per share.
|
(3)
|
Represents
warrants to purchase 1,375,000 shares of common stock at an
exercise price
of $1.20 per share.
|
(4)
|
Represents
warrants to purchase 2,000,000 shares of common stock at an
exercise price
$1.20 per share.
|
(5)
|
Represents
warrants to purchase 500,000 shares of common stock at an exercise
price
of $1.20 per share. These warrants were never exercised and
expired on July 1, 2007.
|
(6)
|
Represents
warrants to purchase 2,000,000 shares of common stock at an
exercise price
of $1.20 per share. These warrants were never exercised and
expired on July 1, 2007.
|
(7)
|
Includes
warrants to purchase 300,000 shares of common stock at an exercise
price
of $1.18 per share. These warrants were exercised on June 22,
2004.
|
(8)
|
The
information is
unavailable.
|
·
|
the
number of common shares outstanding (exclusive of convertible
securities,
options and warrants) prior to the 8% Senior Convertible Note
transactions
that are held by persons other than our affiliates, the Selling
Security
Holders and affiliates of the Selling Security
Holders;
|
·
|
the
number of common shares registered for resale by the Selling
Security
Holders or affiliates of the Selling Security Holders in prior
registration statements;
|
·
|
the
number of common shares registered for resale by the Selling
Security
Holders or affiliates of the Selling Security Holders that continue
to be
held by such Selling Security Holders or affiliates of such Selling
Security Holders;
|
·
|
the
number of common shares that have been sold in registered resale
transactions by the Selling Security Holders or affiliates of
the Selling
Security Holders; and
|
·
|
the
number of common shares registered for resale on behalf of the
Selling
Security Holders or affiliates of the Selling Security Holders
in the
current transaction.
|
Common
Shares Outstanding Prior to the 8% Senior Convertible Note Transactions
Held by Persons Other Than Our Affiliates, the Selling Security
Holders
and Affiliates of the Selling Security Holders
(1)
|
Number
of Common Shares Previously Registered for Resale by the Selling
Security
Holders or Affiliates of the Selling Security
Holders
|
Number
of Common Shares Previously Registered for Resale by the Selling
Security
Holders or Affiliates of the Selling Security Holders and Presently
Held
|
Number
of Common Shares Sold in Registered Resale Transactions by the
Selling
Security Holders or Affiliates of the Selling Security
Holders
|
Number
of Common Shares Registered for Resale on Behalf of the Selling
Security
Holders or Affiliates of the Selling Security
Holders
|
||||
32,137,429
|
0
|
0
|
0
|
11,007,442
|
(1)
|
Based
on the number of shares outstanding as of December 4,
2006.
|
Method
for Determining Number of Shares
|
Number
of
Shares
being
Registered
|
|||
130%
of the number of shares issuable upon full conversion of the
8% Senior
Convertible Notes (1) (2)
|
4,828,061
|
|||
130%
of the number of shares issuable upon full exercise of the warrants
issued
in connection with the 8% Senior Convertible Note transactions
(2)
|
1,287,001
|
|||
130%
of the number of shares issuable upon full exercise of the warrants
issued
to the Noteholders as consideration for amending certain terms
in
connection with the 8% Senior Convertible Note transactions
(2)
|
260,000
|
|||
Common
stock issued to the Noteholders as payment of liquidated damages
in
connection with the 8% Senior Convertible Note
transactions
|
141,750
|
|||
Common
stock issued to certain investors with “piggyback” registration
rights
|
580,130
|
|||
The
number of shares issuable upon full exercise of warrants issued
to certain
investors with “piggyback” registration rights
|
3,910,500
|
|||
11,007,442
|
(1)
|
Calculated
at 130% to cover any adjustments due to anti-dilution events
as described
below, and any interest and principal payments that are paid
in stock
rather than cash. The interest may be paid in stock equal to
the amount of interest accrued and payable as of the payment
date divided
by 95% of the average of the daily volume weighted average price
for each
of the 5 consecutive trading days immediately prior to the payment
date. The principal payment may be paid in stock based on the
lesser of (i) 90% of the lowest daily volume weighted average
price for
any trading day among the 10 consecutive trading days occurring
immediately prior to the scheduled payment date and (ii) the
conversion
price of $0.727 per share.
|
(2)
|
Calculated
at 130% to cover any adjustment due to anti-dilution events,
such as stock
splits, stock dividends, recapitalizations, exchanges or other
similar
events.
|
·
|
through
the OTC Bulletin Board at prevailing market prices; or
|
|
·
|
through
underwriters, broker-dealers or agents who may receive compensation
in the
form of discounts, concessions or commissions from the selling
stockholders or the purchasers of the common stock.
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
·
|
a
block trade in which the broker-dealer so engaged will attempt to
sell
such 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 such broker-dealer
for its
own account pursuant to this prospectus;
|
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
·
|
privately
negotiated transactions;
|
|
·
|
settlement
of short sales;
|
|
·
|
broker-dealers
may agree with the selling stockholders to sell a specified number
of such
shares at a stipulated price per share;
|
|
·
|
a
combination of any such methods of sale;
|
|
·
|
through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise; or
|
|
·
|
any
other method permitted pursuant to applicable law.
|
Name
|
Age
|
Position
|
Date
of Appointment
|
|||
Steven
M. Schneider
|
46
|
Chief
Executive Officer and Director
|
October
26, 2002
|
|||
Gary
Starr
|
51
|
Chairman
of the Board of Directors
|
September
23, 1994
|
|||
William
Hartman
|
59
|
Chief
Financial Officer
|
March
27, 2001
|
|||
Renay
Cude
|
30
|
Secretary
and Director
|
October
26, 2002
|
|||
Amos
Kazzaz
|
55
|
Chief
Operating Officer
|
March
26, 2007
|
|||
Peter
H. Scholl
|
60
|
Director
|
July
19, 2006
|
Name
and Address
|
Shares
Beneficially Owned
|
Percentage
of Class
|
||
Beneficial
Owners of More than 5%:
|
||||
Daka
Development Ltd. (1)
8/F
Leroy Plaza, Unit C
15
Cheung Shun Street
Chung
Sha Wan Kin, Hong Kong
|
2,799,136
|
5.5%
|
||
Fusion
Capital Fund II, LLC (2)
222
Merchandise Mart Plaza, Suite 9-112
Chicago,
Illinois 60654
|
2,750,000
|
5.4%
|
||
Jeffrey
G. Banks (3)
c/o
The Banks Group, LLC
PO
Box 10287
Oakland,
California 94610
|
4,328,373
|
8.6%
|
||
Current
Directors and Named Executive Officers:
|
||||
Steven
M. Schneider (4)
|
16,814,437
|
27.2%
|
||
Gary
Starr (5)
|
8,552,602
|
15.4%
|
||
William
Hartman (6)
|
1,801,238
|
3.6%
|
||
Renay
Cude (7)
|
2,884,529
|
5.7%
|
||
Peter
Scholl (8)
|
665,218
|
1.4%
|
||
All
Directors and Executive Officers as a group (5 persons)
|
30,718,024
|
41.3%
|
·
|
Less
than 1%.
|
(1)
|
Includes
2,587,262 warrants to purchase common stock. The managing partner
is
Raymond Chow. The address for Daka Development is Unit C 8/F Leroy
Plaza,
15 Cheung Shun Street, Chung Sha Wan Kin, Hong
Kong.
|
(2)
|
Represents
2,750,000 warrants to purchase common stock. Pursuant to the terms
of the
warrant, Fusion Capital is not entitled to exercise the warrants
to the
extent such exercise would cause the aggregate number of shares of
common
stock beneficially owned by Fusion Capital to exceed 9.9% of the
outstanding shares of the common stock following such exercise. Steve
Martin is the managing partner. The address for Fusion Capital is
222
Merchandise Mart Plaza, Suite 9-112, Chicago, IL
60654.
|
(3)
|
Includes
2,505,000 warrants to purchase common
stock.
|
(4)
|
Includes
11,659,266 shares of common stock issuable upon the exercise of
various
warrants and 2,075,671 shares of stock issuable upon the exercise
of stock
options.
|
(5)
|
Includes
5,441,160 shares of common stock issuable upon the exercise of
various
warrants and 2,114,005 shares of
stock
|
|
issuable
upon the exercise of stock
options.
|
(6)
|
Includes
829,369 shares of common stock issuable upon the exercise of various
warrants and 894,869 shares of stock issuable upon the exercise
of stock
options.
|
(7)
|
Includes
1,225,786 shares of common stock issuable upon the exercise of
various
warrants and 1,496,041 shares of stock issuable upon the exercise
of stock
options.
|
(8)
|
Includes
660,000 shares of common stock issuable upon the exercise of various
warrants.
|
(a)
|
Adjustments
to Series SA Conversion Rate. The Series SA Conversion Rate
shall be adjusted as follows:
|
(i)
|
Adjustments
for Stock Splits and Combinations. If, at any time or from
time to time after the date hereof,
|
·
|
the
100% electric XEBRA sedan with an MSRP of approximately
$10,000;
|
·
|
the
100% electric XEBRA utility vehicle truck with an MSRP of approximately
$10,500; and
|
·
|
the
Smart micro-car with an MSRP of approximately $25,000 (no longer
distributed after September 30,
2006).
|
·
|
the
OBVIO 828, an economy micro-car from Brazil with an estimated MSRP
of
$14,000,
|
·
|
the
OBVIO 012, a sports-coupe from Brazil with an estimated MSRP of $28,000;
and
|
·
|
the
ZAP-X, a 100% electric vehicle which will use Lotus Engineering’s Aluminum
Performance Crossover (“APX”) design
.
|
·
|
Three-wheeled
personal transporters (ZAPPY3, ZAPPY3 Pro, ZAPPY3
EZ);
|
·
|
Off
road vehicles (electric quads and motorcycles);
and
|
·
|
Portable
energy (universal recharge-it-all batteries and ipod auxiliary
batteries).
|
United
States Patent
|
Date
|
Subject
|
Patent
No. 5,491,390
|
2/13/1996
|
Electric
motor power system for bicycles, tricycles, and scooters
|
Patent
No. 5,671,821
|
9/30/1997
|
Electric
motor system
|
Patent
No. 5,848,660
|
12/15/1998
|
Portable
Collapsible Scooter (ZAPPY)
|
Patent
No. 5,634,423
|
6/3/1997
|
Personal
Submersible Marine Vehicle
|
Patent
No. 5,423,278
|
6/13/1995
|
Submersible
Marine Vessel
|
Patent
No. 5,303,666
|
4/19/1994
|
Submersible
Marine Vessel
|
Patent
No. 6,748,894
|
6/15/2004
|
Submersible
Marine Vessel (sea scooter)
|
Patent
No. 6,588,528
|
7/8/2003
|
Electric
Vehicle Drive System
|
Patent
No. 5,842,535
|
12/1/1998
|
Electric
Drive Assembly for Bicycles
|
Patent
No. 6,050,357
|
4/18/2000
|
Powered
Skateboard
|
Patent
No. 6,059,062
|
5/9/2000
|
Powered
Roller Skates
|
Patent
No. 5,735,361
|
4/7/1998
|
Dual-Pole
Personal Towing Vehicle
|
Patent
No. 5,913,373
|
6/22/1999
|
Dual-Pole
Dual-Wheel Personal Towing Vehicle
|
Patent
No. DS40400
|
Pending
|
Three-Wheeled
Vehicle (ZAPPY 3 Scooter)
|
Patent
No. D433,718
|
11/14/2000
|
Portable
Collapsible Scooter (ZAPPY)
|
Patent
No. D347,418
|
5/31/1994
|
Scuba
Scooter
|
Patent
No. D359,022
|
6/6/1995
|
Scuba
Scooter
|
United
States Trademark
|
Subject
|
|
Trademark
No. 2759913
|
Cap’n
Billy’s Wiz-Bang and design
|
|
Trademark
No. 2240270
|
Electricruizer
|
|
Trademark
No. 2534197
|
ETC
Express
|
|
Trademark
No. 2878219
|
ETC
Traveler
|
|
Trademark
No. 2248753
|
Powerbike
|
|
Trademark
No. 2224640
|
Powerski
|
|
Trademark
No. 2329466
|
The
Future is Electric
|
|
Trademark
No. 1794866
|
ZAP
|
|
Trademark
No. 2912329
|
ZAP
Car
|
|
Trademark
No. 2335090
|
ZAP
Electric Vehicle Outlet
|
|
Trademark
No. 2885816
|
ZAP
Seascooter
|
|
Trademark
No. 2330894
|
ZAPPY
|
|
Trademark
No. 2371240
|
Zapworld.com
|
|
Trademark
No. 2320346
|
Zero
Air Pollution
|
|
Trademark
No. 2689203
|
Swimmy
|
|
|
|
Six
months ended June 30,
|
|
|
Year
ended December 31,
|
|
||||||||||
|
|
2007
|
|
|
2006
|
|
|
2006
|
|
|
2005
|
|
||||
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net
sales
|
|
$
|
2,542
|
|
|
$
|
7,288
|
|
|
$
|
10,830
|
|
|
$
|
3,602
|
|
Cost
of goods sold
|
|
|
(2,272
|
)
|
|
|
(6,576
|
)
|
|
|
(10,305
|
)
|
|
|
(3,261
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
270
|
|
|
|
712
|
|
|
|
525
|
|
|
|
341
|
|
General
and administrative expenses
|
|
|
(16,788
|
)
|
|
|
(5,933
|
)
|
|
|
(15,452
|
)
|
|
|
(18,352
|
)
|
Research
and development
|
|
|
(389
|
)
|
|
|
—
|
|
|
|
(715
|
)
|
|
|
(156
|
)
|
Sales
and marketing expenses
|
|
|
(635
|
)
|
|
|
(604
|
)
|
|
|
(1,319
|
)
|
|
|
(909
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from operations before the following
|
|
|
(17,542
|
)
|
|
|
(5,825
|
)
|
|
|
(19,409
|
)
|
|
|
(25,506
|
)
|
Gain
on revaluation of warrant and put options liabilities
|
|
|
—
|
|
|
|
304
|
|
|
|
581
|
|
|
|
1,883
|
|
Gain
on settlement of Smart Auto liability
|
|
|
—
|
|
|
|
—
|
|
|
|
7,051
|
|
|
|
—
|
|
Other
income (expense), net
|
|
|
(1
|
)
|
|
|
4
|
|
|
107
|
|
|
|
143
|
|
|
Interest
expenses, net
|
|
|
(600
|
)
|
|
|
(9
|
)
|
|
|
(241
|
)
|
|
|
(17
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes
|
|
|
(18,143
|
)
|
|
|
(5,526
|
)
|
|
|
(11,911
|
)
|
|
|
(23,497
|
)
|
Income
taxes
|
|
|
(4
|
)
|
|
|
(4
|
)
|
|
|
(4
|
)
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
(18,147
|
)
|
|
$
|
(5,530
|
)
|
|
$
|
(11,915
|
)
|
|
$
|
(23,501
|
)
|
|
|
As
at June 30,
|
|
|
As
at December 31,
|
|
||||||
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|||
Consolidated
Balance Sheet Data:
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|||
Cash
and Cash Equivalents
|
|
$
|
1,555
|
|
|
$
|
2,160
|
|
|
$
|
1,547
|
|
Working
Capital
|
|
|
(958
|
)
|
|
|
(71
|
)
|
|
|
543
|
|
Total
Assets
|
|
|
9,782
|
|
|
|
10,816
|
|
|
|
14,677
|
|
Total
Liabilities
|
|
|
7,617
|
|
|
|
7,806
|
|
|
|
7,065
|
|
Total
Shareholders’ Equity
|
|
|
2,165
|
|
|
|
3,010
|
|
|
|
7,612
|
|
|
|
Three
months ended June 30
|
|
|
Six
months
ended June 30
|
|
||||||||||
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
2006
|
|
||||
Statements
of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net
sales
|
|
|
100%
|
|
|
|
100%
|
|
|
|
100%
|
|
|
|
100%
|
|
Cost
of sales
|
|
|
84.6
|
|
|
|
93.3
|
|
|
|
89.4
|
|
|
|
90.2
|
|
Operating
expenses
|
|
|
221.8
|
|
|
|
73.8
|
|
|
|
700.7
|
|
|
|
89.7
|
|
Loss
from operations
|
|
|
(206.4
|
)
|
|
|
(67.2
|
)
|
|
|
(690.1
|
)
|
|
|
(79.9
|
)
|
Net
loss
|
|
|
(235.4
|
)
|
|
|
(63.2
|
)
|
|
|
(713.9
|
)
|
|
|
(75.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal
year ended December 31,
|
|
|||||
|
|
2006
|
|
|
2005
|
|
||
Statements
of Operations Data:
|
|
|
|
|
|
|
||
Net
sales
|
|
|
100
|
%
|
|
|
100
|
%
|
Cost
of sales
|
|
|
95.15
|
%
|
|
|
90.53
|
%
|
Operating
expenses
|
|
|
184.06
|
%
|
|
|
717.57
|
%
|
Loss
from operations
|
|
|
(179.22)
|
%
|
|
|
(70.81)
|
%
|
Net loss
|
|
|
(110.02)
|
%
|
|
|
(652.44)
|
%
|
Location
|
Use
|
Square
Feet
|
Rent
|
501
Fourth Street
Santa
Rosa, California
|
Corporate
Headquarters
|
20,000
|
$
—
(1)
|
44720
Main Street
Mendocino,
California
|
Retail
Outlet
|
5,507
|
$
—
(2)
|
2
West Third Street
|
Main
Warehouse
|
22,000
|
$9,000
|
806
Donahue Street
|
Vehicle
Storage
|
21,954
|
$8,800
|
3362
& 3405 Fulton Road
Santa
Rosa, California
|
Office,
Automobile Lot
|
21,780
|
$7,000
|
(1)
|
Under
the terms of the Mortgage, dated March 7, 2003, between us
and Atocha Land
LLC concerning the Fourth Street location, monthly
payments of principal and interest amortizing the underlying
$2 million
debt have commenced on April 7, 2005, with the interest at
the prime rate
plus 2%. The underlying debt may be converted to our common
shares at
Atocha’s option. See also
below.
|
(2)
|
In
the second quarter of 2005, we issued 445,442 common shares in exchange
for the purchase of real estate. We recorded the common shares
at the appraised value of the real estate. Under the terms of the
purchase, we are obligated to issue additional common shares for
no
additional consideration if after 1 year the market price of our
common
shares is less than the market price at their date of
issuance. We have evaluated the potential liability and has
accordingly provided an estimate in the financial statements at December
31, 2006.
|
Quarter
Ended
|
High
Bid
|
Low
Bid
|
||||||
June
30, 2007
|
$ | 1.27 | $ | 0.91 | ||||
March
31, 2007
|
1.15
|
1.05
|
||||||
December
31, 2006
|
1.18
|
0.79
|
||||||
September
30, 2006
|
1.74
|
0.69
|
||||||
June
30, 2006
|
2.59
|
1.12
|
||||||
March
31, 2006
|
1.81
|
0.28
|
||||||
December
31, 2005
|
1.07
|
0.26
|
||||||
September
30, 2005
|
1.40
|
0.96
|
||||||
June
30, 2005
|
3.03
|
0.93
|
||||||
March
31, 2005
|
$ |
3.56
|
$ |
2.35
|
SUMMARY
COMPENSATION TABLE
|
||||||||||||||||||||||||||||||||||
Name
and principal position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
(1)
|
Option
Awards
($)
(1)
|
Non-Equity
Incentive
Plan Compensation
($)
|
Nonqualified
Deferred
Compensation
Earnings
($)
|
All
Other
Compensation
($)
|
Total
($)
|
|||||||||||||||||||||||||
Steven
Schneider, CEO
Principal
Executive Officer
|
2006
|
$ |
120,000
|
0
|
17,800
|
419,756
|
0
|
0
|
0
|
$ |
557,556
|
|||||||||||||||||||||||
Gary
Starr, Chairman
|
2006
|
$ |
120,000
|
0
|
17,800
|
419,756
|
0
|
0
|
0
|
$ |
557,556
|
|||||||||||||||||||||||
William
Hartman
Principal
Financial Officer
|
2006
|
$ |
115,000
|
0
|
17,800
|
100,000
|
0
|
0
|
232,800
|
|||||||||||||||||||||||||
Renay
Cude, Secretary
|
2006
|
$ |
78,000
|
0
|
17,800
|
419,756
|
0
|
0
|
0
|
$ |
515,556
|
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
|
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
OPTION
AWARDS
|
STOCK
AWARDS
|
||||||||||||||||||||||||
Name
|
Number
of securities underlying unexercised options (#)
Exercisable
|
Number
of securities underlying unexercised options (#)
Unexercisable
|
Equity
Incentive Plan Awards: Number of Securities underlying unexercised
unearned options (#)
|
Option
exercise price ($)
|
Option
expiration date
|
Number
of shares or units of stock that have not vested (#)
|
Market
value of shares or units of stock that have not vested ($)
|
Equity
incentive plan awards: number of unearned shares, units or other
rights
that have not vested (#)
|
Equity
incentive plan awards: Market or payout value of unearned shares,
units or
other rights that have not vested ($)
|
||||||||||||||||
Steve
Schneider (1)
|
1,690,786
|
—
|
—
|
1.00
|
7/1/12
|
||||||||||||||||||||
Steve
Schneider (2)
|
200,000
|
—
|
—
|
0.25
|
7/5/12
|
||||||||||||||||||||
Steve
Schneider (2)
|
486,111
|
13,889
|
—
|
1.26
|
6/23/14
|
||||||||||||||||||||
Steve
Schneider (2)
|
428,877
|
85,775
|
—
|
1.32
|
11/16/14
|
||||||||||||||||||||
Steve
Schneider (2)
|
211,265
|
105,633
|
—
|
0.93
|
6/7/15
|
||||||||||||||||||||
Steve
Schneider (1)
|
355,424
|
—
|
—
|
0.91
|
8/11/16
|
||||||||||||||||||||
Gary
Starr (1)
|
1,470,671
|
—
|
—
|
1.00
|
7/1/12
|
||||||||||||||||||||
Gary
Starr (2)
|
116,667
|
—
|
—
|
1.20
|
12/19/11
|
||||||||||||||||||||
Gary
Starr (2)
|
150,000
|
—
|
—
|
0.25
|
7/5/12
|
||||||||||||||||||||
Gary
Starr (2)
|
486,111
|
13,889
|
—
|
1.26
|
6/23/14
|
||||||||||||||||||||
Gary
Starr (2)
|
428,877
|
85,775
|
—
|
1.32
|
11/16/14
|
||||||||||||||||||||
Gary
Starr (2)
|
211,265
|
105,633
|
—
|
0.93
|
6/7/15
|
||||||||||||||||||||
Gary
Starr (1)
|
355,424
|
—
|
—
|
0.91
|
8/11/16
|
Renay
Cude (1)
|
1,525,786
|
—
|
—
|
1.00
|
7/1/12
|
||||||||||||||||||||
Renay
Cude (1)
|
161,700
|
—
|
—
|
0.50
|
12/2/13
|
||||||||||||||||||||
Renay
Cude (2)
|
48,611
|
1,389
|
—
|
1.26
|
6/23/14
|
||||||||||||||||||||
Renay
Cude (2)
|
428,877
|
85,775
|
—
|
1.32
|
11/16/14
|
||||||||||||||||||||
Renay
Cude (2)
|
211,265
|
105,633
|
—
|
0.93
|
6/7/15
|
||||||||||||||||||||
Renay
Cude (1)
|
355,424
|
—
|
—
|
0.91
|
8/11/16
|
||||||||||||||||||||
William
Hartman (1)
|
687,500
|
—
|
—
|
1.00
|
7/1/12
|
||||||||||||||||||||
William
Hartman (3)
|
41,667
|
8,333
|
—
|
1.32
|
11/16/14
|
||||||||||||||||||||
William
Hartman (3)
|
25,000
|
—
|
—
|
1.20
|
12/19/11
|
||||||||||||||||||||
William
Hartman (3)
|
72,917
|
2,083
|
—
|
1.26
|
6/23/14
|
||||||||||||||||||||
William
Hartman (1)
|
100,000
|
—
|
—
|
1.03
|
9/18/16
|
(1)
|
The
award represents warrants which are exercisable at the time of
issuance.
|
(2)
|
The
award vests equally over 36 months from date of grant. The option
has a
ten year life. Issued per the employment
agreements
|
(3)
|
The
award vests equally over 36 months from date of grant. The option
has a
ten year life.
|
DIRECTOR
COMPENSATION
|
|||||||||||||||||||||||||||||
Name
|
Fees
Earned or Paid in Cash ($)
|
Stock
Awards
($)
|
Option
Awards
($)
(6)
|
Non-Equity
Incentive Plan Compen-sation
($)
|
Change
in Pension Value and Nonqualified Deferred Compensation
Earnings
($)
|
All
Other Compen-sation
($)
|
Total
($)
|
||||||||||||||||||||||
Raymond
F. Byrne (1)
|
$ |
3,000
|
$ |
20,800
|
0
|
0
|
0
|
0
|
$ |
23,800
|
|||||||||||||||||||
Peter
H. Scholl (1)
|
$ |
3,000
|
$ |
20,800
|
0
|
0
|
0
|
0
|
$ |
23,800
|
|
(1)
|
Both
independent directors received a stock award with value of $17,800
for
their service on the Board and $3,000 for attending Board meetings.
Raymond Byrne resigned from the Board of Directors in May
2007.
|
Pages
|
||
Report
of Independent Registered Public Accounting Firm
|
F-2
|
|
Consolidated
Statements of Operations
|
F-3
|
|
Consolidated
Balance Sheets
|
F-4
|
|
Consolidated
Statements of Cash Flows
|
F-6
|
|
Consolidated
Statements of Stockholders’ Equity
|
F-8
|
|
Notes
to Consolidated Financial Statements
|
F-9
|
|
|
/s/ ODENBERG, ULLAKKO, MURANISHI & CO. LLP | |
San Francisco, California | |||
March 30, 2007, except for Note 17, which is as of June 26, 2007 | |||
Year
ended December 31,
|
||||||||
2006
|
2005
|
|||||||
Net
sales
|
$ |
10,830
|
$ |
3,602
|
||||
Cost
of goods sold (exclusive of amortization of smart license)
|
(10,305 | ) | (3,261 | ) | ||||
Gross
profit
|
525
|
341
|
||||||
Operating
expenses:
|
||||||||
Sales
and marketing
|
(1,319 | ) | (909 | ) | ||||
General
and administrative expenses (non-cash of $8,749 in 2006 and $10,505
in 2005, respectively)
|
(15,452 | ) | (18,352 | ) | ||||
Research
and development
|
(715 | ) | (156 | ) | ||||
Loss
on disposal of equipment
|
—
|
(36 | ) | |||||
Loss
on joint venture investment
|
—
|
(372 | ) | |||||
Impairment
loss on Smart Automobile license, fixed assets and
goodwill
|
(2,448 | ) | (6,022 | ) | ||||
Total
operating expenses
|
(19,934 | ) | (25,847 | ) | ||||
Loss
from operations
|
(19,409 | ) | (25,506 | ) | ||||
Other
income (expense):
|
||||||||
Gain
on settlement of Smart Auto liability
|
7,051
|
—
|
||||||
Gain
on revaluation of put-option, warrant and note derivative
liabilities
|
581
|
1,883
|
||||||
Interest
expense, net (non-cash of $207 and $10 in 2005,
respectively)
|
(241 | ) | (17 | ) | ||||
Other
income, net
|
107
|
143
|
||||||
Loss
before income taxes
|
(11,911 | ) | (23,497 | ) | ||||
Provision
for income taxes
|
(4 | ) | (4 | ) | ||||
Net
loss
|
$ | (11,915 | ) | $ | (23,501 | ) | ||
Net
loss per share:
|
||||||||
Basic
and diluted
|
$ | (0.31 | ) | $ | (0.68 | ) | ||
Weighted
average number of common shares outstanding:
|
||||||||
Basic
and diluted
|
39,021
|
34,687
|
As
of December 31,
2006
|
||||
ASSETS
|
||||
Current
assets:
|
||||
Cash
and cash equivalents
|
$
|
2,160
|
||
Accounts
receivable, net of allowance of $179 ($333 in 2005)
|
224
|
|||
Inventories
|
2,347
|
|||
Prepaid
non-cash professional fees
|
715
|
|||
Other
prepaid expenses and other current assets
|
449
|
|||
Total
current assets
|
5,895
|
|||
Property
and equipment, net
|
4,466
|
|||
Other
assets:
|
||||
Patents
and trademarks, net
|
91
|
|||
Smart
Automobile license, net
|
—
|
|||
Goodwill
|
175
|
|||
Prepaid
non-cash professional fees, less current portion
|
146
|
|||
Deferred
offering costs
|
25
|
|||
Deposits
and other
|
18
|
|||
TOTAL
ASSETS
|
$
|
10,816
|
||
Current
Liabilities:
|
||||
Current
portion of long-term note
|
$
|
104
|
||
Accounts
payable
|
250
|
|||
Accrued
liabilities
|
2,703
|
|||
Deferred
revenue
|
1,190
|
|||
Put
option liability
|
230
|
|||
Note
derivative liability
|
1,189
|
|||
Warrant
liability
|
300
|
|||
License
fee payable
|
—
|
|||
Total
current liabilities
|
5,966
|
|||
Secured
convertible note, less current portion
|
1,833
|
|||
8%
Senior convertible notes, net of discount of $1,498
|
2
|
|||
Other
long-term debt
|
5
|
|||
TOTAL LIABILITIES
|
7,806 |
As
of December 31,
|
||||
2006
|
||||
Commitments
and contingencies
|
||||
Shareholders’
equity:
|
||||
Preferred
stock; 50 million shares authorized; no par value; no shares issued
and outstanding
|
—
|
|||
Common
stock; 200 million shares authorized; no par value; 38,414,259 shares
issued and outstanding
|
91,227
|
|||
Common
stock issued as loan collateral
|
(1,549
|
)
|
||
Notes
receivable from shareholders, net
|
—
|
|||
Accumulated
deficit
|
(86,668
|
)
|
||
Total
shareholders’ equity
|
3,010
|
|||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
10,816
|
Year
ended December 31,
|
||||||||
2006
|
2005
|
|||||||
Operating
activities:
|
||||||||
Net
loss
|
$ | (11,915 | ) | $ | (23,501 | ) | ||
Items
not requiring the current use of cash:
|
||||||||
Gain
on settlement on Smart Auto liability
|
(7,051 | ) |
—
|
|||||
Depreciation
and amortization
|
1,434
|
1,426
|
||||||
Loss
on disposal of fixed assets
|
—
|
36
|
||||||
Impairment
write down of Smart Auto license and equipment
|
2,191
|
5,721
|
||||||
Impairment
of goodwill
|
—
|
301
|
||||||
Impairment
of fixed assets
|
257
|
—
|
||||||
Loss
on investment in joint venture
|
—
|
372
|
||||||
Gain
(loss) on revaluation of warrant and note derivative
liabilities
|
158
|
(2,215 | ) | |||||
Gain
(loss) on revaluation of put option liability
|
(739 | ) |
331
|
|||||
Allowance
for doubtful accounts
|
(154 | ) | (215 | ) | ||||
Stock-based
compensation for consulting and other services
|
4,699
|
15,860
|
||||||
Stock-based
employee compensation
|
4,050
|
(5,355 | ) | |||||
Non-cash
interest expense attributable to discount on convertible
debt
|
207
|
10
|
||||||
Changes
in other items affecting operations:
|
||||||||
Accounts
receivable
|
115
|
224
|
||||||
Inventories
|
(609 | ) |
573
|
|||||
Advance
on Smart car inventory
|
1,378
|
188
|
||||||
Prepaid
expenses
|
(267 | ) |
42
|
|||||
Other
assets
|
260
|
—
|
||||||
Accounts
payable
|
61
|
39
|
||||||
Accrued
liabilities
|
921
|
1,464
|
||||||
Deferred
revenue
|
140
|
75
|
||||||
Cash
used for operating activities
|
(4,864 | ) | (4,624 | ) | ||||
Investing
activities:
|
||||||||
Acquisition
of property and equipment
|
(77 | ) | (406 | ) | ||||
Proceeds
from sale of equipment
|
35
|
—
|
||||||
Acquisition
of distribution license
|
—
|
(268 | ) | |||||
Investment
in joint venture
|
—
|
(124 | ) | |||||
Cash
used for investing activities
|
(42 | ) | (798 | ) |
Year
ended December 31,
|
||||||||
2006
|
2005
|
|||||||
Financing
activities:
|
||||||||
Issuance
of common stock
|
2,076
|
1,250
|
||||||
Exercise
of warrants and options
|
2,061
|
978
|
||||||
Proceeds
from convertible debt, net of issuance costs
|
1,475
|
—
|
||||||
Payments
on long-term debt
|
(93 | ) | (127 | ) | ||||
Payments
on note receivable from shareholder
|
—
|
14
|
||||||
Repurchase
of common stock
|
—
|
(500 | ) | |||||
Cash
provided by financing activities
|
5,519
|
1,615
|
||||||
Increase
(decrease) in cash and cash equivalents
|
613
|
(3,807 | ) | |||||
Cash
and cash equivalents at beginning of year
|
1,547
|
5,354
|
||||||
Cash
and cash equivalents at end of year
|
$ |
2,160
|
$ |
1,547
|
||||
Convertible
preferred stock
|
Common
stock
|
Accumulated
|
Common
stock issued as loan
|
Notes
Receivable from Share-
|
||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Deficit
|
collateral
|
holders
|
Total
|
|||||||||||||||||||||||||
Balance
at December 31, 2004
|
7.50
|
$ |
7,500
|
29,524
|
$ |
63,616
|
$ | (51,252 | ) | $ | (3,529 | ) | $ | (70 | ) | $ |
16,265
|
|||||||||||||||
Issuance
of common stock for:
|
||||||||||||||||||||||||||||||||
Real
property and other assets
|
—
|
—
|
514
|
1,211
|
—
|
—
|
—
|
1,211
|
||||||||||||||||||||||||
Inventory
|
—
|
—
|
224
|
235
|
—
|
—
|
—
|
235
|
||||||||||||||||||||||||
Consulting
and other services
|
—
|
—
|
879
|
1,405
|
—
|
—
|
—
|
1,405
|
||||||||||||||||||||||||
Employee
compensation
|
—
|
—
|
38
|
83
|
—
|
—
|
—
|
83
|
||||||||||||||||||||||||
Cash
|
—
|
—
|
630
|
1,250
|
—
|
—
|
—
|
1,250
|
||||||||||||||||||||||||
Repurchased
shares from Fusion Capital
|
—
|
—
|
(200 | ) | (500 | ) |
—
|
—
|
—
|
(500 | ) | |||||||||||||||||||||
Exercise
of warrants and options
|
—
|
—
|
886
|
978
|
—
|
—
|
—
|
978
|
||||||||||||||||||||||||
Investment
in joint venture
|
—
|
—
|
90
|
248
|
—
|
—
|
—
|
248
|
||||||||||||||||||||||||
Fair
value of warrants issued for consulting and other services
|
—
|
—
|
—
|
9,290
|
—
|
—
|
—
|
9,290
|
||||||||||||||||||||||||
Reclassification
of warrant liability
|
—
|
—
|
—
|
6,711
|
—
|
—
|
—
|
6,711
|
||||||||||||||||||||||||
Put
option liability
|
—
|
—
|
—
|
(638 | ) | (638 | ) | |||||||||||||||||||||||||
Employee
warrants – variable accounting adjustment
|
—
|
—
|
—
|
(5,438 | ) |
—
|
—
|
—
|
(5,438 | ) | ||||||||||||||||||||||
Proceeds
from notes receivable
|
—
|
—
|
—
|
—
|
—
|
—
|
14
|
14
|
||||||||||||||||||||||||
Net
loss
|
—
|
—
|
—
|
—
|
(23,501 | ) |
—
|
—
|
(23,501 | ) | ||||||||||||||||||||||
Balance,
December 31, 2005
|
7.50
|
7,500
|
32,585
|
78,451
|
(74,753 | ) | (3,529 | ) | (56 | ) |
7,613
|
|||||||||||||||||||||
Issuance
of common stock for:
|
||||||||||||||||||||||||||||||||
Inventory
and other assets
|
—
|
—
|
5
|
3
|
—
|
—
|
—
|
3
|
||||||||||||||||||||||||
Consulting
and other services
|
—
|
—
|
1,786
|
1,585
|
—
|
780
|
56
|
2,421
|
||||||||||||||||||||||||
Employee
compensation
|
—
|
—
|
435
|
388
|
—
|
—
|
—
|
388
|
||||||||||||||||||||||||
Cash
|
—
|
—
|
1,129
|
876
|
—
|
1,200
|
—
|
2,076
|
||||||||||||||||||||||||
Exercise
of warrants and options
|
—
|
—
|
2,174
|
2,061
|
—
|
—
|
—
|
2,061
|
||||||||||||||||||||||||
Settlement
of Smart Auto liability
|
(7.5 | ) | (7,500 | ) |
300
|
405
|
—
|
—
|
—
|
(7,095 | ) | |||||||||||||||||||||
Fair
value of warrants and options issued for:
|
||||||||||||||||||||||||||||||||
Consulting
and other services
|
—
|
—
|
—
|
2,278
|
—
|
—
|
—
|
2,278
|
||||||||||||||||||||||||
Employee
compensation
|
—
|
—
|
—
|
3,662
|
—
|
—
|
—
|
3,662
|
||||||||||||||||||||||||
Settlement
of Smart Auto liability
|
—
|
—
|
—
|
950
|
—
|
—
|
—
|
950
|
||||||||||||||||||||||||
Reclassification
of warrant liability
|
—
|
—
|
—
|
568
|
—
|
—
|
—
|
568
|
||||||||||||||||||||||||
Net
loss
|
—
|
—
|
—
|
—
|
(11,915 | ) |
—
|
—
|
(11,915 | ) | ||||||||||||||||||||||
Balance,
December 31, 2006
|
—
|
$ |
—
|
38,414
|
$ |
91,227
|
$ | (86,668 | ) | $ | (1,549 | ) | $ |
—
|
$ |
3,010
|
·
|
We
have received a binding purchase order or similar commitment from
the
customer or distributor authorized by a representative empowered
to commit
the purchaser (evidence of a sale);
|
·
|
The
purchase price has been fixed, based on the terms of the purchase
order;
|
·
|
We
have delivered the product from our distribution center to a common
carrier acceptable to the purchaser. Our customary shipping terms
are FOB
shipping point; and
|
·
|
We
deem the collection of the amount invoiced
probable.
|
Machinery
and equipment
|
5
years
|
Computer
equipment and software
|
3-5
years
|
Office
furniture and equipment
|
5
years
|
Vehicles
|
5
years
|
Leasehold
improvements
|
10
years or life of lease, whichever is shorter
|
Building
and improvements
|
30
years
|
Twelve
months
|
||||
ended
|
||||
December
31,
|
||||
2006
|
||||
|
||||
Expected
term (in years)
|
6.0
|
|||
Volatility
|
134.0-154.4 | % | ||
Risk-free
interest rate
|
4.63-5.21 | % | ||
Dividend
yield
|
0.00 | % |
2005
|
||||
Net
loss attributable to common shareholders, as reported
|
$ | (23,501 | ) | |
Add:
Stock-based employee compensation expense and variable accounting
adjustments to modified warrants included in reported net loss, net
of
related tax effects
|
(5,438 | ) | ||
Less:
Stock-based employee compensation expense determined under fair value
based method for all awards, net of related tax effects, and variable
accounting adjustment related to modified warrants
|
(1,609 | ) | ||
|
||||
Pro
forma net loss attributable to common shareholders
|
$ | (30,548 | ) | |
|
||||
Net
loss per share attributable to common shareholders:
|
||||
As
reported
|
$ | (0.68 | ) | |
|
||||
Pro
forma
|
$ | (0.88 | ) |
Vehicles-conventional
|
$ |
209
|
||
Advanced
technology vehicles
|
1,472
|
|||
Parts
and supplies
|
425
|
|||
Finished
goods
|
759
|
|||
2,865
|
||||
Less
- inventory reserve
|
(518 | ) | ||
$ |
2,347
|
·
|
Current
inventory quantities on hand;
|
·
|
Product
acceptance in the marketplace;
|
·
|
Customer
demand;
|
·
|
Historical
sales;
|
·
|
Forecasted
sales;
|
·
|
Product
obsolescence; and
|
·
|
Technological
innovations.
|
Balance
as of January 1, 2006
|
$ |
180
|
||
Provision
for slow moving inventory
|
338
|
|||
Write-off
of slow moving inventory
|
—
|
|||
Balance
as of December 31, 2006
|
$ |
518
|
Land
|
$ |
1,078
|
||
Buildings
and improvements
|
3,222
|
|||
Machinery
and equipment
|
218
|
|||
Computer
equipment and software
|
209
|
|||
Office
furniture and equipment
|
98
|
|||
Leasehold
improvements
|
9
|
|||
Vehicles
|
523
|
|||
5,357
|
||||
Less
- accumulated depreciation and amortization
|
891
|
|||
$ |
4,466
|
Accrued
professional fees
|
$ |
1,244
|
||
Accrued
payables
|
286
|
|||
Customer
deposits
|
315
|
|||
Warranty
obligation
|
279
|
|||
Other
accrued expenses
|
579
|
|||
$ |
2,703
|
2006
|
2005
|
|||||||
Computed
expected tax expense
|
$ | (4,057 | ) | $ | (7,991 | ) | ||
Losses
and credits for which no benefits have been recognized
|
2,800
|
8,505
|
||||||
Stock
grants and warrants not deductible for income tax purposes
|
1,244
|
(510 | ) | |||||
Other
|
17
|
|||||||
$ |
4
|
$ |
4
|
2006
|
||||
Deferred
tax assets:
|
||||
Net
operating loss carryovers
|
$ |
25,492
|
||
Other
|
1,737
|
|||
Total
gross deferred tax assets
|
27,229
|
|||
Valuation
allowance
|
(27,229 | ) | ||
Net
deferred tax assets
|
$ |
0
|
2006
Plan
|
2002
Plan
|
1999
Plan
|
||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
||||||||||||||||||||||
Average
|
Average
|
Average
|
||||||||||||||||||||||
Number
|
Exercise
|
Number
|
Exercise
|
Number
|
Exercise
|
|||||||||||||||||||
of
Shares
|
Price
|
of
Shares
|
Price
|
of
Shares
|
Price
|
|||||||||||||||||||
Outstanding
at January 1, 2005
|
—
|
—
|
4,884
|
$ |
1.02
|
159
|
$ |
1.20
|
||||||||||||||||
Granted
|
—
|
—
|
1,668
|
1.07
|
—
|
—
|
||||||||||||||||||
Exercised
|
—
|
—
|
(10 | ) |
0.25
|
—
|
—
|
|||||||||||||||||
Canceled
|
—
|
—
|
(280 | ) |
0.92
|
(4 | ) |
1.20
|
||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Outstanding
at December 31, 2005
|
—
|
—
|
6,262
|
1.04
|
155
|
1.20
|
||||||||||||||||||
Granted
|
1,367
|
$ |
0.92
|
612
|
0.57
|
208
|
1.11
|
|||||||||||||||||
Exercised
|
—
|
—
|
(619 | ) |
0.34
|
—
|
—
|
|||||||||||||||||
Canceled
|
—
|
—
|
(400 | ) |
1.07
|
—
|
—
|
|||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Outstanding
at December 31, 2006
|
1,367
|
$ |
0.92
|
5,855
|
$ |
0.99
|
363
|
$ |
1.15
|
2006
Plan
|
2002
Plan
|
1999
Plan
|
||||
Range
of exercise prices
|
$1.03
- $0.88
|
$2.80
- $0.25
|
$1.20
- $1.11
|
|||
Weighted
average remaining life (years)
|
8.92
|
7.03
|
7.67
|
|||
Options
exercisable
|
178,056
|
4,128,360
|
155,000
|
|||
Weighted
average exercise price
|
$0.92
|
$0.99
|
$1.15
|
2006
|
2005
|
|||
Dividends
|
None
|
None
|
||
Expected
volatility
|
134.00
- 154.43%
|
151.10
- 221.37%
|
||
Risk
free interest rate
|
4.63
- 5.21%
|
3.71
- 4.65%
|
||
Expected
life
|
0.50
- 6.5 years
|
1.25
- 9.9 years
|
(1)
|
Series
B and B-2 Warrants expire on July 1, 2007 and have an exercise price
of
$1.20.
|
(2)
|
Series
C and C-2 Warrants expire on July 1, 2007 and have an exercise price
of
$5.00.
|
(3)
|
Series
D and D-2 Warrants expire on July 1, 2007 and have an exercise price
of
$8.00.
|
(4)
|
Series
K and K-2 Warrants expire on July 1, 2007 and have an exercise price
of
$1.00.
|
Number
of
|
Exercise
|
Expiration
|
||||||||||
Warrants
|
Price
|
Dates
|
||||||||||
Series
B-Unrestricted
|
4,200
|
1.20
|
7-1-07
|
|||||||||
Series
B-2-Restricted
|
13,588
|
1.20
|
7-1-07
|
|||||||||
Series
C-Unrestricted
|
6,898
|
5.00
|
7-1-07
|
|||||||||
Series
C-2-Restricted
|
1,551
|
5.00
|
7-1-07
|
|||||||||
Series
D-Unrestricted
|
7,438
|
8.00
|
7-1-07
|
|||||||||
Series
D-2-Restricted
|
1,351
|
8.00
|
7-1-07
|
|||||||||
Series
K-Unrestricted
|
4,040
|
1.00
|
7-1-07
|
|||||||||
Series
K-2-Restricted
|
6,236
|
1.00
|
7-1-07
|
|||||||||
$1.10
Warrants Restricted
|
540
|
1.10
|
various
|
|||||||||
$1.50
Warrants Restricted
|
1,763
|
1.50
|
various
|
|||||||||
$1.75
Warrants Restricted
|
1,000
|
1.75
|
6-18-08
|
|||||||||
$2.00
Warrants Restricted
|
350
|
2.00
|
various
|
|||||||||
$2.50
Warrants Restricted
|
2,440
|
2.50
|
7-7-09
|
|||||||||
$3.05
Warrants Restricted
|
1,125
|
3.05
|
2-15-08
|
|||||||||
$3.25
Warrants Restricted
|
300
|
3.25
|
various
|
|||||||||
$3.50
Warrants Restricted
|
500
|
3.50
|
7-20-09
|
|||||||||
$4.00
Warrants Restricted
|
330
|
4.00
|
2-15-08
|
$4.05
Warrants Restricted
|
563
|
4.05
|
2-15-08
|
|||||||||
$4.50
Warrants Restricted
|
500
|
4.50
|
7-20-09
|
|||||||||
$4.75
Warrants Restricted
|
563
|
4.75
|
2-15-08
|
|||||||||
$5.00
Warrants Restricted
|
749
|
5.00
|
12-10-07
|
|||||||||
$5.50
Warrants Restricted
|
500
|
5.50
|
7-20-09
|
|||||||||
56,525
|
Low
|
High
|
|
Exercise
price per share
|
$1.00
|
$
2.00
|
Market
price
|
0.32
|
2.08
|
Assumptions:
|
||
Expected
dividend yield
|
0%
|
0%
|
Risk
free rate of return
|
4.9%
|
2.02%
|
Contractual
life
|
8
months
|
5
years
|
Volatility
|
134.2
|
143.6
|
Fair
market value
|
$.06
per share
|
$1.21
per share
|
Low
|
High
|
|
Exercise
price per share
|
$1.00
|
$
4.75
|
Market
price
|
.80
|
3.41
|
Assumptions:
|
||
Expected
dividend yield
|
0%
|
0%
|
Risk
free rate of return
|
2.87%
|
4.3%
|
Contractual
life
|
.5
year
|
6.92
years
|
Volatility
|
137%
|
211%
|
Fair
market value
|
0.29
|
2.13
|
Electric
|
Advanced
|
|||||||||||||||
Consumer
|
Car
|
Technology
|
||||||||||||||
Products
|
Outlet
|
Vehicles
|
Total
|
|||||||||||||
Year
ended December 31, 2006:
|
||||||||||||||||
Net
sales
|
$ |
843
|
$ |
1,618
|
$ |
8,369
|
$ |
10,830
|
||||||||
Gross
profit (loss)
|
(445 | ) |
440
|
530
|
525
|
|||||||||||
Depreciation,
amortization
|
||||||||||||||||
and
impairment
|
3,844
|
25
|
17
|
3,886
|
||||||||||||
Net
loss
|
(11,755 | ) | (17 | ) | (143 | ) | (11,915 | ) | ||||||||
Total
assets
|
8,304
|
430
|
2,082
|
10,816
|
||||||||||||
Year
ended December 31, 2005:
|
||||||||||||||||
Net
sales
|
$ |
624
|
$ |
2,524
|
$ |
432
|
$ |
3,602
|
||||||||
Gross
profit
|
18
|
303
|
9
|
341
|
||||||||||||
Depreciation,
amortization
|
||||||||||||||||
and
impairment
|
7,392
|
44
|
175
|
7,660
|
||||||||||||
Net
loss
|
(22,106 | ) | (744 | ) | (459 | ) | (23,501 | ) | ||||||||
Total
assets
|
11,769
|
771
|
2,137
|
14,677
|
Year
ended December 31
|
||||||||
2006
|
2005
|
|||||||
Cash
paid during the year for:
|
||||||||
Income
taxes
|
$ |
4
|
$ |
4
|
||||
Interest
|
72
|
59
|
||||||
Common
stock and warrant issuances for:
|
||||||||
Inventory
|
235
|
|||||||
Investment
in joint venture
|
248
|
|||||||
Settlement
of warrant liability
|
568
|
6,711
|
||||||
Prepaid
professional fees
|
861
|
830
|
||||||
Property
and equipment
|
3
|
1,211
|
Condensed
consolidated balance sheets
|
F-32
|
Condensed
consolidated statements of operations
|
F-33
|
Condensed
consolidated statements of cash flows
|
F-34
|
Notes
to condensed consolidated financial statements
|
F-35
|
|
|
June
30,
2007
|
|
|
ASSETS
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
1,555
|
|
Accounts
receivable, net of allowance for doubtful accounts of $184
|
|
|
339
|
|
Inventories,
net
|
|
|
1,883
|
|
Prepaid
non-cash professional fees
|
|
425
|
|
|
Other
prepaid expenses and other current assets
|
|
706
|
|
|
Total
current
assets
|
|
|
4,908
|
|
PROPERTY
AND EQUIPMENT, net of accumulated depreciation of
$751
|
|
|
4,358
|
|
|
|
|
|
|
OTHER
ASSETS
|
|
|
|
|
Patents
and trademarks, net
|
|
|
37
|
|
Goodwill
|
|
|
175
|
|
Prepaid
non-cash professional fees, less current portion
|
207
|
|||
Deposits
and other assets
|
|
|
97
|
|
Total
assets
|
|
$
|
9,782
|
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Current
portion of secured convertible note
|
|
$
|
104
|
|
8%
Senior convertible notes, net of discount of $871
|
1,829
|
|||
Accounts
payable
|
|
|
378
|
|
Accrued
liabilities
|
|
|
2,645
|
|
Deferred
revenue
|
|
|
910
|
|
Total
current
liabilities
|
5,866
|
|||
LONG-TERM
LIABILITIES
|
|
|
|
|
Secured
convertible note, less current portion
|
|
|
1,751
|
|
Total
liabilities
|
7,617
|
|||
SHAREHOLDERS’
EQUITY
|
|
|
|
|
Preferred
stock, authorized 50 million shares; no par value, no shares
issued and
outstanding
|
|
|
—
|
|
Common
stock, authorized 400 million shares; no par
value; 46,089,228 shares issued and
outstanding
|
|
|
108,552
|
|
Common
stock issued as loan collateral
|
|
|
(1,549
|
)
|
Accumulated
deficit
|
|
|
(104,838
|
)
|
Total
shareholders’ equity
|
|
|
2,165
|
|
Total
liabilities and shareholders’ equity
|
|
$
|
9,782
|
|
Three
Months ended
June
30, 2007
|
Three
Months ended
June
30, 2006
|
Six
Months ended
June
30, 2007
|
Six
Months ended
June
30, 2006
|
|||||||||||||
NET
SALES
|
$ |
1,405
|
$ |
4,359
|
$ |
2,542
|
$ |
7,288
|
||||||||
|
||||||||||||||||
COST
OF GOODS SOLD
|
1,189
|
4,071
|
2,272
|
6,576
|
||||||||||||
GROSS
PROFIT
|
216
|
288
|
270
|
712
|
||||||||||||
|
||||||||||||||||
OPERATING
EXPENSES
|
||||||||||||||||
Sales
and marketing
|
264
|
353
|
635
|
604
|
||||||||||||
General
and administrative (non-cash stock-based compensation of
$1.6
million and $1.1 million and $14.5 million and $2.9 million for
the three and six months ended June 30, 2007 and 2006,
respectively)
|
2,798
|
2,865
|
16,788
|
5,933
|
||||||||||||
Research
and development
|
54
|
—
|
389
|
—
|
||||||||||||
|
3,116
|
3,218
|
17,812
|
6,537
|
||||||||||||
LOSS
FROM OPERATIONS
|
(2,900 | ) |
(2,930
|
) |
(17,542
|
) | (5,825 | ) | ||||||||
OTHER
INCOME (EXPENSE)
|
||||||||||||||||
Gain on
revaluation of warrant and put option liabilities
|
—
|
169
|
—
|
304
|
||||||||||||
Interest
expense, net
|
(384 | ) | (3 | ) | (600 | ) | (9 | ) | ||||||||
Other
income (expense)
|
(24 | ) |
7
|
(1 | ) |
4
|
||||||||||
|
(408 | ) |
173
|
(601 | ) |
299
|
||||||||||
LOSS
BEFORE INCOME TAXES
|
(3,308 | ) | (2,757 | ) | (18,143 | ) | (5,526 | ) | ||||||||
|
||||||||||||||||
PROVISION
FOR INCOME TAXES
|
—
|
—
|
4
|
4
|
||||||||||||
NET
LOSS
|
$ | (3,308 | ) | $ | (2,757 | ) | $ | (18,147 | ) | $ | (5,530 | ) | ||||
|
||||||||||||||||
NET
LOSS PER COMMON SHARE
|
||||||||||||||||
BASIC
AND DILUTED
|
$ | (0.07 | ) | $ |
(0.07
|
) | $ |
(0.42
|
) | $ | (0.15 | ) | ||||
|
||||||||||||||||
WEIGHTED
AVERAGE OF COMMON SHARES OUTSTANDING --
|
||||||||||||||||
BASIC
AND DILUTED
|
45,455
|
38,222
|
43,527
|
37,128
|
|
Six
months ended June 30,
|
|||||||
|
2007
|
2006
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
||||||
Net
loss
|
$ | (18,147 | ) | $ | (5,530 | ) | ||
|
||||||||
Items
not requiring the use of cash:
|
||||||||
Amortization
of note discount and deferred offering costs
|
205
|
—
|
||||||
Stock-based
compensation for consulting and other services
|
1,901
|
1,987
|
||||||
Stock-based
employee compensation
|
12,618
|
946
|
||||||
Stock
based compensation for interest and registration penalties
|
314
|
—
|
||||||
Gain
on revaluation of warrant and put option liabilities
|
—
|
(304 | ) | |||||
Depreciation
and amortization
|
182
|
1,036
|
||||||
Loss
on disposal of fixed asset
|
—
|
4
|
||||||
Allowance
for doubtful accounts
|
5
|
(118 | ) | |||||
Changes
in other items affecting operations:
|
||||||||
Receivables
|
(120 | ) | (9 | ) | ||||
Smart
car inventory
|
—
|
918
|
||||||
Inventories
|
464
|
20
|
||||||
Prepaid
expenses and other assets
|
(306 | ) | (541 | ) | ||||
Accounts
payable
|
128
|
(139 | ) | |||||
Accrued
liabilities
|
(310 | ) | (223 | ) | ||||
Deferred
revenue
|
(280 | ) |
39
|
|||||
Net
cash used for operating activities
|
(3,346 | ) | (1,914 | ) | ||||
CASH
FLOWS FROM INVESTING ACTIVITES
|
||||||||
Purchase
of equipment
|
(20 | ) | (357 | ) | ||||
Proceeds
from sale of equipment
|
—
|
35
|
||||||
Net
cash used for investing activities
|
(20 | ) | (322 | ) | ||||
|
||||||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Issuance
of common stock and warrants, net of offering costs
|
1,640
|
2,396
|
||||||
Proceeds
from long-term debt, net of offering costs
|
1,185
|
—
|
||||||
Repayments
of long-term debt
|
(64 | ) | (44 | ) | ||||
Net
cash provided by financing activities
|
2,761
|
2,352
|
||||||
|
||||||||
NET
INCREASE ( DECREASE) IN CASH AND CASH EQUIVALENTS
|
(605 | ) |
116
|
|||||
|
||||||||
CASH
AND CASH EQUIVALENTS, beginning of period
|
2,160
|
1,547
|
||||||
|
||||||||
CASH
AND CASH EQUIVALENTS, end of period
|
$ |
1,555
|
$ |
1,663
|
|
|
Three
months ended
June
30,2007
|
|
Expected
Dividend yield
|
|
0%
|
|
Expected
volatility
|
|
|
115.73
to 154.43
|
Risk-free
interest rate
|
|
|
3.70
to 5.21
|
Expected
life (in years) from grant date
|
|
|
2.5
to 5.75
|
Exercise
price
|
$0.65
to $2.80
|
|
Number
of
Shares
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term
(in
years)
|
Aggregate
Intrinsic
Value
|
||||||||||||
Outstanding
December 31, 2006
|
8,288,177
|
$ |
1.02
|
7.40
|
$ |
1,942,600
|
||||||||||
Options
granted under the plan
|
589,606
|
$ |
1.15
|
9.99
|
$ |
—
|
||||||||||
Options
exercised
|
(245,000 | ) | $ |
.059
|
—
|
$ |
119,300
|
|||||||||
Options
forfeited and expired
|
—
|
$ |
—
|
—
|
$ |
—
|
||||||||||
Outstanding
March 31, 2007
|
8,632,783
|
$ |
1.03
|
8.04
|
$ |
1,823,300
|
||||||||||
Options
granted under the plan
|
3,000
|
$ |
1.13
|
10.0
|
$ |
—
|
||||||||||
Options
exercised
|
(610,639 | ) | $ |
.75
|
—
|
$ |
128,100
|
|||||||||
Options
forfeited and expired
|
—
|
$ |
—
|
—
|
$ |
—
|
||||||||||
Outstanding
June 30, 2007
|
8,025,144
|
$ |
1.05
|
8.04
|
$ |
1,695,200
|
Vehicles
- conventional
|
|
$
|
214
|
|
Advanced
transportation vehicles
|
|
|
867
|
|
Parts
and supplies
|
|
|
624
|
|
Finished
goods
|
|
|
710
|
|
|
|
|
2,415
|
|
Less-inventory
reserve
|
|
|
(532
|
)
|
|
|
$
|
1,883
|
|
|
Common
|
|
||||||
|
Shares
|
Amount
|
||||||
Balance
at December 31, 2006
|
38,464
|
$ |
91,227
|
|||||
|
||||||||
Issuances
of Common Stock for:
|
||||||||
Exercise
of options and warrants for cash
|
245
|
145
|
||||||
Cash
|
843
|
900
|
||||||
Consulting
and other services
|
837
|
876
|
||||||
Employee
Compensation
|
267
|
300
|
||||||
Stock
dividend
|
3,962
|
—
|
||||||
|
6,154
|
2,221
|
||||||
Stock
Option and Warrant Transactions
|
||||||||
Warrants
issued to convertible debt holders
|
1,081
|
|||||||
Fair
value of warrants issued for consulting and other services
|
260
|
|||||||
Fair
value of options and warrants issued to employees
|
11,740
|
|||||||
|
13,081
|
|||||||
|
||||||||
Balance
at March 31, 2007
|
44,618
|
106,529
|
||||||
Issuances
of Common Stock for
|
||||||||
Exercise
of options and warrants for cash
|
763
|
596
|
||||||
Employee
Compensation
|
57
|
60
|
||||||
Consulting
and other services
|
509
|
535
|
||||||
Interest
and penalties
|
142
|
139
|
||||||
1,471
|
1,330
|
|||||||
Stock
Option and Warrant Transactions
|
||||||||
Warrants
issued to convertible debt holders
|
175
|
|||||||
Fair
value of options and warrants issued to employees
|
518
|
|||||||
693
|
||||||||
Balance
at June 30, 2007
|
46,089
|
$ |
108,552
|
|
Low
|
High
|
Exercise
price per share
|
$1.00
|
$1.32
|
Market
price
|
$1.15
|
$1.15
|
Assumptions:
|
|
|
Expected
dividend yield
|
0.0%
|
0.0%
|
Risk
free rate of return
|
4.58%
|
4.58%
|
Expected
life (contractual term)
|
5
years
|
6 years
|
Volatility
|
120.97%
|
120.97%
|
Fair
market value
|
$0.89
|
$0.98
|
|
Six
Months Ended
|
|||||||
|
June 30,
(in
thousands)
|
|||||||
|
2007
|
2006
|
||||||
Cash
paid during the period for interest
|
$ |
39
|
$ |
41
|
||||
Cash
paid during the period for income taxes
|
$ |
4
|
$ |
4
|
||||
Non-cash
investing and financing activities:
|
||||||||
Stock
and warrants issued for:
|
||||||||
Partial
settlement of preferred stock liability
|
$ |
—
|
$ |
1,354
|
||||
Settlement
of warrant liability
|
$ |
—
|
$ |
568
|
Securities
and Exchange Commission Registration Fee
|
$
|
339
#
|
||
Printing
Fees
|
$
|
10,000
*
|
||
Accounting
Fees and Expenses
|
$
|
10,000
*
|
||
Legal
Fees and Expenses
|
$
|
50,000
*
|
||
Miscellaneous
|
$
|
2,500
*
|
||
Total
|
$
|
72,839
*
|
*
|
|
Estimates
|
(#)
|
|
Rounded
up to nearest whole dollar.
|
2.1
|
Approved
Second Amended Plan of Reorganization, dated as June 20, 2002
(5)
|
3.1
|
Amended
and Restated Articles of Incorporation (4)
|
3.2
|
Certificate
of Determination of Series SA Convertible Preferred Stock
(14)
|
4.1
|
Form
of common share purchase warrant of the Company held by Fusion Capital
Fund II, L.P. (6)
|
4.2
|
Form
of Series B common stock purchase warrant of the Company
(14)
|
4.3
|
Form
of Series K common stock purchase warrant of the Company
(14)
|
5.1
|
Opinion
of Richardson & Patel LLP
|
10.1
|
Settlement
Agreement Between ZAPWORLD.COM, Ridgewood ZAP, LLC, and the Shareholders
dated June 27, 2001 (3)
|
10.3
|
2004
Consultant Stock Plan (7)
|
10.4
|
Convertible
Promissory Note, dated April 26, 2004, issued to Banks Living Trust
(1)
|
10.5
|
Purchase
and Sale Agreement dated March 7, 2003 between ATOCHA Land LLC and
ZAP
(3)
|
10.6
|
Promissory
Note $2,000,000 - Atocha Land LLC and ZAP (3)
|
10.7
|
Warrant
Agreement dated April 26, 2004, issued to Banks Living
Trust (1)
|
10.8
|
Common
Stock Purchase Agreement between ZAP and Fusion Capital Fund II,
LLC
(6)
|
10.9
|
Registration
Rights Agreement between ZAP and Fusion Capital Fund II, LLC
(6)
|
10.10
|
Form
of Common Stock Purchase Warrant between ZAP and Fusion Capital Fund
II,
LLC (6)
|
10.11
|
Agreement
for Consulting Services with Evan Rapoport dated January 8, 2004
(1)
|
10.12
|
Asset
Purchase Agreement dated April 12, 2004 with Jeffrey Banks for purchase
of
various autos (1)
|
10.13
|
Agreement
for Private Placement Investment received dated April 14, 2004 with
Phi-Nest Fund LLP (1)
|
10.14
|
Consulting
Agreement dated April 21, 2004 with Elexis International
(1)
|
10.15
|
Consulting
Agreement dated April 21, 2004 with Sunshine 511 Holdings
(1)
|
10.16
|
Definitive
Stock Agreement dated October 25, 2004 with Smart-Automobile, LLC
(2)
|
10.17
|
Master
Distribution Agreement between Apollo Energy Systems, Inc. and Voltage
Vehicles Corporation, a subsidiary of ZAP (8)
|
10.18
|
ZAP
Floor Line and Dealer Development Agreement with Clean Air Motors,
LLC for
a $45 Million Floor Plan Line of Credit for Qualified ZAP Dealers
(9)
|
10.19
|
Exclusive
Purchase, License and Supply Agreement between Smart Automobile,
LLC and
ZAP (10)
|
10.20
|
Amendment
dated November 15, 2004 to previous consulting agreement with Sunshine
Holdings 511 (14)
|
10.21
|
Secured
Promissory Note Payable dated December 30, 2004 with Phi-Nest Fund,
LLP
(14)
|
10.22
|
ZAP
assignment of 2.9 million shares of Restricted Common Stock to Phi-Nest
Fund, LLP as collateral on note payable (14)
|
10.23
|
Promissory
note receivable dated January 6, 2005 for $1 million loan due from
Smart
Automobile, LLC and Thomas Heidemann (President Smart Automobile,
LLC)
(14)
|
10.24
|
Security
Agreement dated January 6, 2005 from Smart Automobile, LLC and Thomas
Heidemann (President Smart Automobile ,LLC) to secure loan above
(14)
|
10.25
|
Common
Stock Purchase Agreement between ZAP and Platinum Partners Value
Arbitrage
Fund LP (14)
|
10.26
|
Form
of Common Stock Purchase Warrant between ZAP and Platinum Partners
Value
Arbitrage Fund LP (14)
|
10.27
|
Common
Stock Purchase Agreement between ZAP and Lazarus Investment Partners
LLP
(14)
|
10.28
|
Form
of Common Stock Purchase Warrant between ZAP and Lazarus Investment
Partners LLP (14)
|
10.29
|
Termination
of Common Stock Purchase Agreement between ZAP and Fusion Capital
Fund II,
LLC (11)
|
10.30
|
Financing
Agreement between ZAP and Surge Capital II, LLC (12)
|
10.31
|
Exclusive
Purchase, License, and Supply Agreement between ZAP and Obvio!
Automotoveiculos S.P.E. Ltda (13)
|
10.36
|
Agreement
dated July 14, 2006 between ZAP, Thomas Heidemann and Smart Automobile
(15)
|
10.37
|
Amendment
Agreement dated August 30, 2006 between ZAP and Smart Automobile
LLC
(16)
|
10.38
|
Exclusive
Distribution Agreement dated May 1, 2005, as supplemented by a letter
dated June 9, 2006 (17)
|
10.39
|
ZAP
Guarantee (18)
|
10.40
|
Shandong
Jindalu Vehicle Co., Ltd. Guarantee (19)
|
10.41
|
Joint
Venture Negotiations dated September 21, 2006 (20)
|
10.42
|
Security
Purchase Agreement between ZAP and Certain Institutional Investors
(21)
|
10.43
|
Memorandum
of Company’s Extension of Warrants issued to Executives dated January 26,
2007
|
10.44
|
Purchase
and Amendment Agreement, dated February 20, 2007, between ZAP and
Certain
Institutional Investors (22)
|
10.45
|
Form
of Convertible Note (22)
|
10.46
|
Form
or Warrant (22)
|
10.47
|
Form
of Certificate of Adjustment to December 5, 2006 8% Senior Convertible
Note dated April 30, 2007 (23)
|
10.48
|
Form
of Certificate of Adjustment to February 20, 2007 8% Senior Convertible
Note dated April 30, 2007 (23)
|
10.49
|
Form
of Certificate of Adjustment to December 5, 2006 Warrants dated
April 30,
2007 (23)
|
10.50
|
Form
of Certificate of Adjustment to February 20, 2007 Warrants dated
April 30,
2007 (23)
|
10.51
|
Amendment
Agreement between ZAP and Certain Institutional Investors dated
June 26,
2007 (23)
|
10.52
|
Purchase order from the Electric Vehicle Company, LLC dated April 18, 2007 |
10.53
|
Distribution Agreement with PML FlightLink Limited dated April 28, 2007 |
10.54
|
Purchase order from PML FlightLink Limited dated April 30, 2007 |
21.1
|
List
of subsidiaries (3)
|
23.1
|
Consent
of Independent Registered Public Accounting Firm (Odenberg, Ullakko,
Muranishi & Co. LLP)
|
24.1
|
Power
of Attorney (included at Page
II-16)
|
(1)
|
Previously
filed as an exhibit to the Registrants’s Form 8-K for the quarter ended
March 31, 2004 and incorporated by
reference.
|
(2)
|
Previously
filed as an exhibit to the Registrant’s Form 8-K of November 6, 2004 and
incorporated by reference.
|
(3)
|
Previously
filed as an exhibit to the Registrant’s Annual Report on Form 10-KSB for
the year ended December 31, 2003 and incorporated by
reference.
|
(4)
|
Previously
filed with Pre-effective Amendment Number 3 to Form SB-2 registration
statement filed with the Securities and Exchange Commission on October
3,
2001.
|
(5)
|
Previously
filed as an exhibit to the Registrant’s Form 8-K of October 20, 2002 and
incorporated by reference.
|
(6)
|
Previously
filed as an exhibit to the Registrant’s Current Report on Form 8-K dated
July 22, 2004 and incorporated by
reference.
|
(7)
|
Previously
filed as an exhibit to the Registrant’s Registration Statement on Form S-8
(File No. 333-117560) on July 22,
2004.
|
(8)
|
Previously
filed as an exhibit to the Registrant’s Current Report on Form 8-K filed
with the Securities and Exchange Commission on October 6, 2004 and
incorporated herein by reference.
|
(9)
|
Previously
filed as an exhibit to the Registrant’s Quarterly Report on Form 10-QSB
for the period ended June 30, 2004 and incorporated herein by
reference.
|
(10)
|
Previously
filed as an exhibit to the Registrant’s Current Report on Form 8-K filed
with the Securities and Exchange Commission on April 21, 2004 and
incorporated herein by reference.
|
(11)
|
Previously
filed as an exhibit to the Registrant’s Current Report on Form 8-K filed
with the Securities and Exchange Commission on February 25, 2005
and
incorporated herein by reference.
|
(12)
|
Previously
filed as an exhibit to the Registrant’s Current Report on Form 8-K filed
with the Securities and Exchange Commission on September 16, 2005
and
incorporated herein by reference.
|
(13)
|
Previously
filed as an exhibit to the Registrant’s Current Report on Form 8-K filed
with the Securities and Exchange Commission on September 21, 2005
and
incorporated herein by reference.
|
(14)
|
Previously
filed as an exhibit to the Registrant’s Yearly Report on Form 10-KSB for
the period ended December 31, 2004 and incorporated herein by
reference.
|
(15)
|
Previously
filed as an exhibit to the Registrant’s Current Report on Form 8-K filed
with the Securities and Exchange Commission on July 20, 2006 and
incorporated herein by reference.
|
(16)
|
Previously
filed as an exhibit to the Registrant’s Current Report on Form 8-K filed
with the Securities and Exchange Commission on September 6, 2006
and
incorporated herein by reference.
|
(17)
|
Previously
filed as an exhibit to the Registrant’s Current Report on Form 8-K filed
with the Securities and Exchange Commission on November 6, 2006 and
incorporated herein by reference.
|
(18)
|
Previously
filed as an exhibit to the Registrant’s Current Report on Form 8-K filed
with the Securities and Exchange Commission on November 6, 2006 and
incorporated herein by reference.
|
(19)
|
Previously
filed as an exhibit to the Registrant’s Current Report on Form 8-K filed
with the Securities and Exchange Commission on November 6, 2006 and
incorporated herein by reference.
|
(20)
|
Previously
filed as an exhibit to the Registrant’s Current Report on Form 8-K filed
with the Securities and Exchange Commission on November 6, 2006 and
incorporated herein by reference.
|
(21)
|
Previously
filed as an exhibit to the Registrant’s Current Report on Form 8-K filed
with the Securities and Exchange Commission on December 11, 2006
and
incorporated herein by reference.
|
(22)
|
Previously
filed as an exhibit to the Registrant’s Current Report on Form 8K filed
with the Securities and Exchange Commission on February 26, 2007
and
incorporated herein by reference.
|
(23) |
Previously
filed as an exhibit to the Registrant’s Registration Statement on Form
SB-2 filed with the Securities and Exchange Commission on July
3, 2007 and
incorporated herein by reference.
|
(1)
|
To file, during any period in which offers or
sales are
being made, a post-effective amendment to this registration
statement:
|
(i)
|
To
include any prospectus required by Section 10(a)(3) of the Securities
Act
of 1933 (the “Securities Act”);
|
(ii)
|
To
reflect in the prospectus any facts or events which, individually
or
together, represent a fundamental change in the information in
this
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 file with the Securities and Exchange
Commission
(“SEC”) pursuant to Rule 424(b), if in the aggregate, the changes in
volume and price represent no more than a 20% 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
purposes of 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
remove from registration by means of a post-effective amendment
any of the
securities being registered which remain unsold at the termination
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 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;
|
(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.
|
(5)
|
For
determining any liability under the Securities Act, treat
the information
omitted from the form of prospectus filed as part of
this registration
statement in reliance upon Rule 430A and contained in
a form of prospectus
filed by the small business issuer under Rule 424(b)(1),
or (4) or 497(h)
under the Securities Act as part of this registration
statement as of the
time the SEC declared it effective.
|
(6)
|
For
determining any liability under the Securities Act, treat
each
post-effective amendment that contains a form of prospectus
as a new
registration statement for the securities offered in
the registration
statement, and that offering of the securities at that
time as the initial
bona fide offering of those
securities.
|
ZAP | |||
Date:
August 28, 2007
|
By:
|
/s/ Steven M. Schneider | |
Steven M. Schneider | |||
Chief Executive Officer | |||
|
Title
|
Date
|
||
/s/
Steven M. Schneider
Steven M. Schneider
|
Chief
Executive Officer and Director
(Principal
Executive Officer)
|
August
28, 2007
|
||
*
Gary
Starr
|
Chairman
of the Board of Directors
|
|
||
/s/
William Hartman
William
Hartman
|
Chief
Financial Officer
(Principal
Accounting Officer)
|
August
28, 2007
|
||
*
Renay
Cude
|
Secretary
and Director
|
|
||
*
Peter
H. Scholl
|
Director
|
|