Delaware
(State
or jurisdiction of
incorporation
or organization)
|
3661
(Primary
Standard Industrial
Classification
Code Number)
|
22-2011859
(I.R.S.
Employer Identification No.)
|
Title
of each class of securities
to
be registered
|
|
Amount
to be Registered (1)
|
|
Proposed
Maximum Offering Price Per Security (2)
|
|
Proposed
Maximum Aggregate Offering Price
|
|
Amount
of Registration Fee
|
|
||||
Common
Stock, $.01 par value per share
|
|
|
2,091,000
|
(3)
|
$
|
0..45
|
|
$
|
940,950
|
|
$
|
28.89
|
|
Common
Stock, $.01 par value per share
|
|
|
1,394,000
|
(4)
|
$
|
0.45
|
|
$
|
627,300
|
|
$
|
19.26
|
|
Total
|
|
|
3,485,000
|
|
|
|
|
$
|
1,568,2500
|
|
$
|
48.15
|
*
|
(1)
|
Pursuant
to Rule 416 promulgated under the Securities Act of 1933, as amended,
there are also registered hereunder such indeterminate number of
additional shares as may be issued to the selling stockholders pursuant
to
the anti-dilution provisions of the
warrants.
|
(2)
|
Estimated
solely for purposes of calculating the registration fee in accordance
with
Rule 457(c) and Rule 457(g) under the Securities Act of 1933, using
the
average of the high and low prices as reported on the OTC Bulletin
Board
on June 11, 2007, which was $.45 per
share.
|
(3)
|
Represents
3,000,000 shares of common stock issuable upon conversion of series
A
preferred stock.
|
(4)
|
Represents
shares of common stock issuable upon exercise of
warrants.
|
|
Page
|
Prospectus
Summary
|
3
|
Risk
Factors
|
6
|
Forward-Looking
Statements
|
11
|
Use
of Proceeds
|
11
|
Selling
Stockholder
|
11
|
Plan
of Distribution
|
14
|
Market
for Common Equity and Related Stockholder Matters
|
16
|
Management’s
Discussion and Analysis and Results of Operations
|
17
|
Business
Description
|
27
|
Description
of Property
|
35
|
Legal
Proceedings
|
35
|
Management
|
36
|
Executive
Compensation
|
39
|
Certain
Relationships and Related Transactions
|
41
|
Security
Ownership of Certain Beneficial Owners and Management
|
43
|
Description
of Securities
|
44
|
Indemnification
for Securities Act Liabilities
|
47
|
Legal
Matters
|
48
|
Experts
|
48
|
Additional
Information
|
48
|
Index
to Consolidated Financial Statements
|
49
|
Common
stock offered:
|
|
The
selling stockholders are offering a total of 3,485,000 shares of
common stock, of which 2,091,000 shares are issuable upon conversion
of
the series A preferred stock and 1,394,000 shares are issuable
upon the
exercise of warrants. The total shares being offered by the selling
stockholder represents 21% of our outstanding common stock as of
June 11,
2007.
|
|
|
|
Limitation
of Issuance of Common Stock:
|
|
The
holders of the series A preferred stock and warrants issued in
the
September 2006 private placement, which are held by Barron Partners,
cannot convert the series A preferred stock or exercise the warrants
to
the extent that such conversion and exercise would result in the
holder
and its affiliates owning more than 4.9% of our outstanding common
stock.
|
|
|
|
Outstanding
common stock:
|
|
16,629,848
shares 1,2
|
|
|
|
Outstanding
common stock after the conversion of the series A preferred stock
and
exercise of warrants covered by this prospectus:
|
|
20,114,848
shares 1,3
|
Value
of Underlying Securities:
|
||
Series
A preferred
|
$11,739,130
4
|
|
$0.50
warrants
|
$7,500,000
4
|
|
$1.25
warrants
|
$7,500,000
4
|
|
|
|
|
Use
of proceeds:
|
|
We
will receive no proceeds from the sale of any shares by the selling
stockholders. In the event that any selling stockholders exercise
their
warrants, we would receive the exercise prices. If all warrants
covered by
this prospectus are exercised at the present exercise price, we
would
receive approximately $1,000,000 million all of which, if and when
received, would be used for working capital and other corporate
purposes.
The proceeds from the exercise of the warrants are subject to adjustment
in the event of a change in the exercise price of the warrants.
See “Use
of Proceeds.”
|
|
|
|
OTCBB
Symbol:
|
|
LTTC
|
|
|
|
1
|
Does
not include (a) a total of 7,982,567 shares of common stock issuable
upon
exercise of warrants or other convertible securities held by persons
other
than the selling stockholder or (b) a total of 477,000
shares reserved for options, stock grants or other equity-based
incentives granted or available for grant under our stock option
or
incentive plans.
|
2
|
Does
not include the shares of common stock issuable upon conversion of
the
series A preferred stock or the exercise of the warrants held by
the
selling stockholder.
|
3
|
The
number of shares of common stock outstanding after the offering is
based
on the issuance of the shares of common stock issuable upon conversion
of
all of the series A preferred stock and upon exercise of all of the
warrants covered by this prospectus and does not include any shares
issuable upon conversion of series A Preferred Stock or exercise
of
warrants held by Barron Partners which are not included in this
Prospectus.
|
4
|
Values
calculated based upon a closing market price of $0.60 per share
on
September 19, 2006 as adjusted for the one-for-ten reverse stock
split.
|
|
|
Three
Months Ended
March
31,
|
|
Year
Ended December 31,
|
|
||||||||
(In
thousands)
|
|
2007
|
|
2006
|
|
2006
|
|
2005
|
|
||||
Sales
- technology products
|
|
$
|
289
|
|
$
|
424
|
|
|
1,692
|
|
|
1,224
|
|
Sales
- technology services
|
|
|
2,887
|
|
|
918
|
|
|
5,802
|
|
|
3,011
|
|
Cost
of sales - technology products
|
|
|
89
|
|
|
154
|
|
|
554
|
|
|
439
|
|
Cost
of sales - technology services
|
|
|
1,383
|
|
|
478
|
|
|
2,801
|
|
|
1,834
|
|
Gross
profit
|
|
|
1,704
|
|
|
709
|
|
|
4,140
|
|
|
1,962
|
|
Operating
income (loss)
|
|
|
(54
|
)
|
|
96
|
|
456
|
|
(1,007
|
)
|
||
Interest
expense, net
|
|
|
(386
|
)
|
|
(130
|
)
|
|
704
|
|
|
509
|
|
Extinguishment
(gain)
|
|
|
2,074
|
|
|
-
|
|
|
158
|
|
|
-
|
|
Derivative
expense (income)
|
|
|
1,684
|
|
|
-
|
|
13,753
|
|
(370
|
)
|
||
Finance
expense
|
|
|
5
|
|
|
-
|
|
2,054
|
|
27
|
|||
Minority
interest
|
(47
|
)
|
7
|
(57
|
)
|
(94
|
)
|
||||||
Net
(loss) income
|
|
|
(102
|
)
|
|
(50
|
)
|
|
(16,271
|
)
|
|
(863
|
)
|
Net
income (loss) per share of common stock - basic
|
|
|
(0.00
|
)
|
|
(0.00
|
)
|
|
(1.37
|
)
|
|
(0.10
|
)
|
Weighted
average shares of common stock outstanding - basic
|
|
|
16,629,848
|
|
|
8,984,150
|
|
|
11,888,458
|
|
|
8,508,529
|
|
Net
income (loss) per share of common stock - diluted
|
|
|
(0.00
|
)
|
|
(0.00
|
)
|
|
(1.37
|
)
|
|
(0.10
|
)
|
Weighted
average shares of common stock outstanding -diluted
|
|
|
16,629,848
|
|
|
8,984,150
|
|
|
11,888,458
|
|
|
8,508,529
|
|
March
31,
|
December
31,
|
||||||
|
2007
|
2006
|
|||||
Working
capital (deficiency)
|
(13,104
|
)
|
(21,012
|
)
|
|||
Total
assets
|
13,025
|
13,620
|
|||||
Total
long-term debt
|
0
|
0
|
|||||
Total
liabilities
|
17,216
|
25,121
|
|||||
Accumulated
deficit
|
(36,953
|
)
|
(36,851
|
)
|
|||
Stockholders’
deficiency
|
(4,191
|
)
|
(11,501
|
)
|
·
|
the
difficulty of integrating acquired products, services or
operations;
|
·
|
the
potential disruption of the ongoing businesses and distraction of
our
management and the management of acquired
companies;
|
·
|
the
difficulty of incorporating acquired rights or products into our
existing
business;
|
·
|
difficulties
in disposing of the excess or idle facilities of an acquired company
or
business and expenses in maintaining such
facilities;
|
·
|
difficulties
in maintaining uniform standards, controls, procedures and
policies;
|
·
|
the
potential impairment of relationships with employees and customers
as a
result of any integration of new management
personnel;
|
·
|
the
potential inability or failure to achieve additional sales and enhance
our
customer base through cross-marketing of the products to new and
existing
customers;
|
·
|
the
effect of any government regulations which relate to the business
acquired;
|
·
|
potential
unknown liabilities associated with acquired businesses or product
lines,
or the need to spend significant amounts to retool, reposition or
modify
the marketing and sales of acquired products or the defense of any
litigation, whether of not successful, resulting from actions of
the
acquired company prior to our
acquisition.
|
·
|
Control
of the market for the security by one or a few broker-dealers that
are
often related to the promoter or
issuer;
|
·
|
Manipulation
of prices through prearranged matching of purchases and sales and
false
and misleading press releases;
|
·
|
“Boiler
room” practices involving high pressure sales tactics and unrealistic
price projections by inexperienced sales
persons;
|
·
|
Excessive
and undisclosed bid-ask differentials and markups by selling
broker-dealers; and
|
·
|
The
wholesale dumping of the same securities by promoters and broker-dealers
after prices have been manipulated to a desired level, along with
the
inevitable collapse of those prices with consequent investor
losses.
|
Name
|
|
Shares
Beneficially
Owned
|
|
Shares
Being
Sold
|
|
Shares
Owned
After
Offering
|
|
|||
Barron
Partners, LP 1
|
|
|
814,863
|
3
|
|
3,485,000
|
2
|
|
814,863
|
3,4
|
1
|
Andrew
B. Worden, president of the general partner of Barron Partners, has
sole voting and dispositive power over the shares beneficially owned
by
Barron Partners.
|
2
|
Of
which 2,091,000 shares are issuable upon the conversion of Series
Preferred Stock and 1,485,000 shares are issuable upon the exercise
of
warrants having an exercise price of
$0.50
|
3
|
Because
the series A preferred stock and warrants owned by Barron Partners
cannot
be converted or exercised, as the case may be, to the extent that
the
conversion of the series A preferred stock or the exercise of the
warrant
would result in the holder and its affiliates owning more than 4.9%
of the
outstanding common stock, the number of shares which would be beneficially
owned by Barron Partners cannot be determined on the date of this
prospectus. The number of shares shown in the table represents the
maximum
number of shares which Barron Partners can acquire on conversion
of the
series A preferred stock and exercise of the warrants, based on the
4.9%
limitation, assuming all of the shares offered by the selling stockholders
are sold.
|
4
|
Assumes
all shares of common stock registered by this prospectus will be
sold.
|
Stock
Held by Non-Affiliates
|
#
of Shares Previously Registered by Selling Stockholder
|
#
of Shares Previously Registered by Selling Stockholder That Continue
to be
Held
|
#
of Shares Sold in Registered Resale by Selling Stockholder
|
#
of Shares Registered for Resale on Behalf of Selling Stockholder
in the
Current Transaction
|
11,622,439
|
0
|
0
|
0
|
3,485,000
|
|
|
Shares
Issuable
|
$.50
warrant
|
$1.25
warrant
|
|||||||||
|
Conversion
Price
|
Upon
Conversion
|
Exercise
Price
|
Exercise
Price
|
|||||||||
Unadjusted
|
$
|
.23
|
19,565,217
|
$
|
.50
|
$
|
1.25
|
||||||
15%
shortfall
|
$
|
.166
|
27,079,886
|
$
|
.361
|
$
|
.903
|
||||||
30%
shortfall
|
$
|
.113
|
39,929,015
|
$
|
.245
|
$
|
.612
|
Series
A Preferred
|
Market
Price
Per
Share of
the
Underlying
Shares
|
Conversion
/
Exercise
Price
Per
Share
|
Total
Possible
Underlying
Shares
|
Total
Market
Value
|
Total
Cost of
Conversion
/
Exercise
|
Total
Possible
Discount
(Premium)
to
Market
|
Unadjusted
|
$0.60
|
$0.23
|
19,565,217
|
$11,739,130
|
$4,500,000
|
$7,239,130
|
15%
Shortfall
|
$0.60
|
$0.166
|
27,079,885
|
$16,247,931
|
$
4,495,260
|
$
11,752,671
|
30%
Shortfall
|
$0.60
|
$.113
|
39,929,015
|
$23,957,409
|
$2,707,187
|
$21,250,222
|
|
|
|
|
|
|
|
$0.50
Warrant
|
|
|
|
|
|
|
Unadjusted
|
$0.60
|
$0.50
|
12,500,000
|
$7,500,000
|
$6,250,000
|
$1,250,000
|
15%
Shortfall
|
$0.60
|
$0.361
|
12,500,000
|
$7,500,000
|
$4,512,500
|
$2,987,500
|
30%
Shortfall
|
$0.60
|
$0.245
|
12,500,000
|
$7,500,000
|
$3,062,500
|
$4,437,500
|
|
|
|
|
|
|
|
$1.25
Warrant
|
|
|
|
|
|
|
Unadjusted
|
$0.60
|
$1.25
|
12,500,000
|
$7,500,000
|
$15,625,000
|
$(8,125,000)
|
15%
Shortfall
|
$0.60
|
$0.903
|
12,500,000
|
$7,500,000
|
$11,287,500
|
$(3,787,500)
|
30%
Shortfall
|
$0.60
|
$0.612
|
12,500,000
|
$7,500,000
|
$7,650,000
|
$(150,000)
|
$0.50
Warrant
|
Market
Price Per Share of the Underlying Shares
|
Conversion
/ Exercise Price Per Share
|
Total
Possible Underlying Shares
|
Total
Market Value
|
Total
Cost of Conversion / Exercise
|
Total
Possible Discount (Premium) to Market
|
Unadjusted
|
$0.62
|
$0.50
|
1,900,000
|
$1,178,000
|
$950,000
|
$228,000
|
Brokerage
Fees
|
Due
Diligence Fees
|
||||
Gross
Proceeds
|
Dragonfly
|
Colebrook
Capital
|
Crescent
Fund LLC
|
Baron
Partners LP
|
Net
Proceeds
|
$4,500,000
|
$234,000
(1)
|
$126,000
(2)
|
$20,000
(3)
|
$50,000
|
$4,071,000
|
(1) |
Amount
includes $134,000 paid in cash at closing and $100,000 of deferred
payments
|
(2) |
Amount
includes $76,000 paid in cash at closing and $50,000 in deferred
payments.
|
(3) |
Total
payment amount of $20,000 has been
deferred
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits the purchaser;
|
·
|
block
trades in which the broker-dealer will attempt to sell the shares
as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
|
·
|
sales
to a broker-dealer as principal and resale by the broker-dealer of
the
shares for its account;
|
|
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
|
·
|
privately-negotiated
transactions, including gifts;
|
|
|
·
|
covering
short sales made after the date of this prospectus;
|
|
|
·
|
to
a broker-dealers who may agree to sell a specified number of such
shares
at a stipulated price per share;
|
|
|
·
|
through
the writing of options on the shares;
|
|
|
·
|
a
combination of any such methods of sale; and
|
|
|
·
|
any
other method permitted pursuant to applicable
law.
|
|
Price Range
|
||||||
|
High
|
Low
|
|||||
Fiscal
2007:
|
|
|
|||||
First
Quarter
|
$
|
0.90
|
0.36
|
||||
Second
Quarter through
|
|||||||
May
30th
|
$
|
0.30
|
0.45
|
||||
Fiscal
2006
|
|||||||
First
Quarter
|
$
|
0.90
|
0.50
|
||||
Second
Quarter
|
0.80
|
0.60
|
|||||
Third
Quarter
|
0.70
|
0.50
|
|||||
Fourth
Quarter
|
0.60
|
0.40
|
|||||
|
|||||||
Fiscal
2005:
|
|||||||
First
Quarter
|
$
|
1.60
|
0.50
|
||||
Second
Quarter
|
1.50
|
0.80
|
|||||
Third
Quarter
|
0.70
|
0.50
|
|||||
Fourth
Quarter
|
0.90
|
0.50
|
Plan
category
|
Number
of securities
to
be issued
upon
exercise
of
outstanding
options,
warrants
and rights
|
Weighted
average
exercise
price of
outstanding
options,
warrants
and rights
|
Number
of securities
remaining
available for future issuance under equity compensation plans (excluding
securities reflected in column (a)
|
|||||||
(a)
|
(b)
|
(c)
|
||||||||
Equity
compensation plans approved by security holders
|
1,371,000
|
$
|
0.92
|
477,000
|
||||||
|
||||||||||
Equity
compensation plans not approved by security
holders
|
-0-
|
-0-
|
-0-
|
|||||||
|
||||||||||
Total
|
1,371,000
|
$
|
0.92
|
477,000
|
|
For
the Years Ending December 31,
|
||||||
|
2006
|
2005
|
|||||
Sales
|
$
|
7,494,888
|
$
|
4,235,269
|
|||
|
|||||||
Net
Loss
|
$
|
(16,271,618
|
)
|
$
|
(863,103
|
)
|
|
|
|||||||
Net
Loss Per Share
|
$
|
(1.37
|
)
|
$
|
(.10
|
)
|
|
OPERATING
EXPENSES
|
PERCENT
OF SALES
|
|||||||||||
|
2006
|
2005
|
2006
|
2005
|
|||||||||
|
|
|
|
|
|||||||||
Research
& Development
|
435,768
|
431,021
|
5.8
|
%
|
10.2
|
%
|
|||||||
|
|||||||||||||
Selling,
General & Administrative
|
3,248,013
|
2,537,365
|
43.3
|
%
|
59.9
|
%
|
|||||||
|
|||||||||||||
Total
Operating Costs and Expenses
|
$
|
3,683,781
|
$
|
2,968,386
|
49.1
|
%
|
70.1
|
%
|
·
|
Reduction
in application development time, cost and risk;
|
|
|
·
|
Reduction
of desktop and PDA application deployment time and
cost;
|
|
|
·
|
Increased
richness of user experience;
|
|
|
·
|
Elimination
of security concerns inherent with Web browser
vulnerabilities;
|
|
|
·
|
Decreased
server software and hardware costs; and
|
|
|
·
|
Optimization
of network resources for best
performance.
|
·
|
Data
Access;
|
|
|
·
|
Role-based
User Profiles;
|
|
|
·
|
Flexible
Security Model including strong encryption;
|
|
|
·
|
Configuration
Management;
|
|
|
·
|
Event
Management;
|
|
|
·
|
Integration
Gateways; and
|
|
|
·
|
Secure
Client.
|
1.
|
OEM
Licensing - This would include licensing existing technology we have
developed to other equipment manufacturers either to incorporate
into
their existing product offering or for resale.
|
|
|
2.
|
Voice
and Data Security Products - Our existing products provide feature
rich
call control technology that can be expanded to serve additional
markets.
|
·
|
Microsoft.
SMEI is a Microsoft Certified Partner. Recently, Aquifer’s security model
and its presence on the Navy Marine Corps Intranet (NMCI) network
have
attracted interest from Microsoft Federal and from Microsoft Business
Development in Redmond. SMEI is currently working with Redmond to
develop
a NMCI formal Microsoft/SMEI case study describing the benefits of
.NET
and Aquifer.
|
·
|
AmberPoint.
AmberPoint is a Silicon Valley-based software company that builds
and
markets management solutions for Web services. SMEI and AmberPoint
co-market products to federal governmental agencies. SMEI plans to
integrate Aquifer and AmberPoint to help developers more easily and
accurately monitor the .NET applications they
build.
|
·
|
RTI’s
E-Solutions Divisioncombines its experience in mission critical
systems,
distributed systems, web development, and knowledge environments
to
provide our customers with cutting-edge IT solutions for distributed
e-business and web
infrastructure.
|
·
|
RTI’s
Mobile Solutions Division works closely with the other RTI divisions
to
provide support in the areas of wireless communication and portable
device
data management. MSD solutions deal with real-time data management
as well
as mission critical solutions to government/military and commercial
customers.
|
·
|
RTI’s
Professional Services Division provides both on-site and off-site
consulting and engineering support. PSD has formed long-term and
on-going
relationships with companies such as Lockheed Martin, Motorola,
Logistics
Management Institute, BAE Systems, and Hughes Network Systems,
to support
their continuing engineering and consulting
needs.
|
·
|
RTI’s
Software Systems Division (SSD) provides hard core and/or real-time
embedded and mission critical solutions to government, military
and
commercial customers.
|
·
|
Kinitos,
Inc. delivers an enterprise deployment solution that allows IT to
maintain
centralized control of existing Windows Forms clients. The Kinitos
.NET
platform centralizes control of the monitoring, deployment and updating
of
existing Windows Forms client applications throughout the network.
It
handles policy based client deployment and rollback, enables real
time
monitoring and delivers centralized reporting of client
applications.
|
·
|
ObjectWare,
Inc. markets its IdeaBlades technology as an application development
platform for the rapid creation of smart client applications. ObjectWare
leverages Microsoft .NET technology to streamline development, deployment
and maintenance processes while simplifying the supporting hardware
and
software environments.
|
Name
|
|
Age
|
|
Position
|
Paul
Burgess
|
|
41
|
|
President,
chief executive officer and director
|
Joe
Noto
|
|
47
|
|
Chief
financial officer and secretary
|
Eric
D. Zelsdorf
|
|
40
|
|
Chief
technology officer
|
Michael
Ricciardi
|
|
47
|
|
Chief
operating officer
|
Jeannemarie
Devolites Davis
|
|
50
|
|
Director
|
Robert
E. Galbraith
|
|
62
|
|
Director
|
Thomas
F. Gillett
|
|
60
|
|
Director
|
Donald
Upson
|
|
52
|
|
Director
|
Name
and Principal Position
|
|
Year
|
|
Salary
$
|
|
|
Bonus
$
(1)
|
|
Stock
Awards
$
|
|
Option
Awards
$
(2)
|
|
Non-Equity
Incentive Plan Compensation
$
|
|
Nonqualified
Deferred Compensation Earnings
$
|
|
All
Other Compensation
$
|
|
Total
$
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Paul
Burgess
|
|
|
2006
|
|
$
|
112,500
|
(3)
|
|
$
|
52,500
|
|
|
|
|
|
|
|
|
|
|
|
$
|
165,500
|
|
|||||
President,
Chief Executive Officer and Director
|
|
|
2005
|
|
$
|
220,833
|
|
|
|
|
|
|
|
|
$
|
420,000
|
|
|
|
|
|
|
|
$
|
640,833
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Joseph
Noto
|
|
|
2006
|
|
$
|
150,000
|
|
|
$
|
30,000
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
$
|
180,000
|
|
Chief
Financial Officer
|
|
|
2005
|
|
$
|
120,967
|
|
|
|
|
|
—
|
|
$
|
40,000
|
|
|
|
|
|
|
|
|
|
|
$
|
160,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Mike
Ricciardi (4)
|
|
|
2006
|
|
$
|
41,250
|
|
|
|
—
|
|
|
|
|
$
|
75,000
|
|
|
|
|
|
|
|
$
|
15,000
|
(5)
|
$
|
131,250
|
|
Chief
Operating Officer
|
|
|
2005
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eric
Zelsdorf
|
|
|
2006
|
|
$
|
160,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
160,000
|
|
||||||
Chief
Technology
Officer
|
|
|
2005
|
|
$
|
146,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
146,667
|
|
Name
|
|
Number
of Securities Underlying Unexercised Options
#
Exercisable
|
|
Number
of Securities Underlying Unexercised Options
#
Unexercisable
|
|
Equity
Incentive Plan Awards: Number of Securities Underlying Underexercised
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
$
|
|
|||||||||
Joseph
Noto
|
|
|
66,667
|
|
|
133,333
|
(1)
|
|
—
|
|
$
|
1.00
|
|
|
July
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul
Burgess
|
|
|
200,000
200,000
400,000
|
|
|
—
—
200,000
|
(2)
|
|
|
|
$
$
$
|
0.30
0.50
1.00
|
|
|
May 2014
Oct’
2014
Feb’
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael
Ricciardi
|
|
|
—
|
|
|
125,000
|
(3)
|
|
|
|
$
|
0.60
|
|
|
Sept’
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
66,667
vests July 2007 and 66,667 vests July 2008
|
(2)
|
200,000
vests Feb’ 2008
|
(3)
|
41,667
vests Sept’ 2007, 41,667 vests Sept’ 2008 and 41,667 vests Sept’
2009
|
·
|
we
paid Michael Ricciardi, our chief operating officer, $ 512,064 and
issued
to him 717,975 shares of common stock; 162,560 shares of series B
preferred stock, which shall on September 18, 2007 automatically
convert
into approximately 135,466 shares of common stock; and an option
to
purchase 125,000 shares of our common stock at a purchase price of
$0.65
per share.
|
·
|
we
paid Marie Richardi, Mr. Ricciardi’s spouse, $1,056,135 and issued her we
issued her 1,480,823 shares of our common stock and 335,281 shares
of our
Series B preferred stock, which shall on September 18, 2007 automatically
convert into approximately 279,400 shares of our common
stock.
|
·
|
we
paid $656,082 to Michele Ricciardi and issued Marie and Michael Richardi
Custodian for their minor child under the Uniform Gifts to Minors
Act
208,280 shares of our Series B preferred stock which shall on September
18, 2007 automatically convert into approximately 173,566 shares
of our
common stock.
|
·
|
each
director;
|
|
|
·
|
each
officer named in the summary compensation table;
|
|
|
·
|
each
person owning of record or known by us, based on information provided
to
us by the persons named below, to own beneficially at least 5% of
our
common stock; and
|
|
|
·
|
all
directors and executive officers as a
group.
|
Name
of Beneficial Owner (1)
|
|
Common
Stock
Beneficially
Owned (2)
|
|
Percentage
of
Common
Stock Beneficially Owned (2)
|
|
||
Paul
Burgess (3)
|
|
|
800,000
|
|
|
4.6
|
%
|
Eric
D. Zelsdorf
|
|
|
583,560
|
|
|
3.5
|
%
|
Robert
Galbraith (4)
|
|
|
124,500
|
|
|
*
|
|
Michael
Ricciardi (5)
|
|
|
3,118,703
|
|
|
18.8
|
%
|
Marie
Riccirdi (5)
|
|
|
3,118,703
|
|
|
18.8
|
%
|
Burlington
Assembly of God (6)
2035
Columbus Road
Burlington,
New Jersey 08016
|
|
|
1,000,000
|
|
|
5.9
|
%
|
Joe
Noto (3)
|
|
|
66,667
|
|
|
*
|
|
Dragonfly
Capital Partners, LLC (7)
420
Lexington Avenue Suite 2620
New
York, New York 10170
|
|
|
978,200
|
|
|
5.5
|
%
|
Jeannemarie
Devolites Davis
|
|
|
-
|
|
|
*
|
|
Thomas
F. Gillett
|
|
|
-
|
|
|
*
|
|
Donald
Upson
|
|
|
-
|
|
|
*
|
|
Alan
Bashforth (8)
|
|
|
1,659,836
|
|
|
9.5
|
%
|
All
named executive officers and directors as a group (8
persons)
|
|
|
4,693,430
|
|
|
26.8
|
%
|
(1)
|
Except
as otherwise indicated, the address of each beneficial owner is c/o
Lattice Incorporated , 7150 N. Park Drive, Suite 500, Pennsauken,
NJ
08109.
|
(2)
|
Applicable
percentage ownership is based on 16,629,848 shares of common stock
outstanding as of January 31, 2007, together with securities exercisable
or convertible into shares of common stock within 60 days of December
31,
2006 for each stockholder. Beneficial ownership is determined in
accordance with the rules of the Securities and Exchange Commission
and
generally includes voting or investment power with respect to securities.
Shares of common stock that are currently exercisable or exercisable
within 60 days of December 30, 2006 are deemed to be beneficially
owned by
the person holding such securities for the purpose of computing the
percentage of ownership of such person, but are not treated as outstanding
for the purpose of computing the percentage ownership of any other
person.
|
(3)
|
Represents
shares issuable upon exercise of
options.
|
(4)
|
Includes
5,000 shares owned by Mr. Galbraith’s wife, as to which Mr. Galbraith
disclaims beneficial interest
|
(5)
|
Mr.
and Mrs. Ricciardi are husband and wife. The number of shares
beneficially
owned by each of them includes (a) 717,974 shares owned by
Michael
Ricciardi, (b) 1,480,823 shares owned by Marie Ricciardi, and
(c) 919,905
shares owned by them as custodian for their minor child. Mr.
and Mrs.
Ricciardi disclaims beneficial interest in the shares owned
by the other
and their minor child.
|
(6)
|
Represents
666,667 shares of common stock and 333,333 shares of common stock
issuable
upon exercise of warrants.
|
Warrants
issued to Dragonfly as placement fees for the Barron financing.
These
warrants were issued in 2 traunches of 489,100 each with a strike
price of $0.50 and $1.25 per share respectively with a five year
term.
|
(8)
|
Includes:
(a) 16,500 shares owned by Mr. Bashforth; (b) 152,000 shares owned
by
Innovative Communications Technology, Ltd., which is controlled
by Mr.
Bashforth; (c) 436,336 shares owned by Calabash Holdings Ltd.,
which is
controlled by Mr. Bashforth; and (d) 200,000 shares issuable upon
exercise
of options held by Calabash Holdings Ltd exercisable at 0.50 per
share
which expire March 31, 2008; and (e) 600,000 warrants exercisable
at $1.00
per share which expire 2012 and (f) 170,000 shares and 850,000
warrants
issued in connection with the private placement of common stock
between
April 14 th
and May 11, 2006. The warrants are five year warrants and have
a strike
price of $1.20 per share.
|
|
|
|
|
Shares
Issuable
|
|
$.5
warrant
|
|
$1.25
warrant
|
|
||||
|
|
Conversion
Price
|
|
Upon
Conversion
|
|
Exercise
Price
|
|
Exercise
Price
|
|
||||
Unadjusted
|
|
$
|
.23
|
|
|
19,565,217
|
|
$
|
.5
|
|
$
|
1.25
|
|
15%
shortfall
|
|
$
|
.166
|
|
|
27,079,886
|
|
$
|
.361
|
|
$
|
.903
|
|
30%
shortfall
|
|
$
|
.113
|
|
|
39,929,015
|
|
$
|
.245
|
|
$
|
.612
|
|
For
the Three Months Ended March 31, 2007 of Lattice Inc.
|
|
Condensed
Consolidated Balance Sheet as of March 31, 2007
(unaudited)
|
F-1
|
Condensed
Consolidated Statements of Operations for the three
|
|
months
ended March 31, 2007 and 2006 (unaudited)
|
F-2
|
Condensed
Consolidated Statements of Cash Flows for the three months
|
|
ended
March 31, 2007 and 2006 (unaudited)
|
F-3
|
Notes
to condensed consolidated financial statements (unaudited)
|
F-4
|
|
|
For
the Years Ended December 31, 2006 and 2005 of Lattice Inc.
|
|
Report
of Independent Registered Public Accounting Firm
|
|
for
the year ended December 31, 2006
|
F-15
|
Consolidated
Balance Sheet as of December 31, 2006
|
F-16
|
Consolidated
Statement of Income for the years ended
|
|
December
31, 2006 and 2005
|
F-17
|
Consolidated
statements of Cash Flows for the years ended
|
|
December
31, 2006 and 2005
|
F-18
|
Consolidated
statements of Stockholders' Equity for the years ended
|
|
December
31, 2006 and 2005
|
F-19
|
Notes
to consolidated financial statements
|
F-20
|
|
March
31, 2007
|
December
31, 2006
|
|||||
|
(unaudited)
|
|
|||||
ASSETS
|
|
|
|||||
Current
assets:
|
|
|
|||||
Cash
and cash equivalents
|
$
|
240,739
|
$
|
392,275
|
|||
Accounts
receivable - trade
|
3,087,553
|
2,412,164
|
|||||
Inventories
|
65,674
|
64,442
|
|||||
Other
current assets
|
129,741
|
698,514
|
|||||
Total
current assets
|
3,523,707
|
3,567,395
|
|||||
|
|||||||
Property
and equipment, net
|
33,061
|
37,187
|
|||||
Goodwill
|
2,547,866
|
2,547,866
|
|||||
Other
Intangibles, net
|
6,823,807
|
7,344,235
|
|||||
Other
assets
|
96,701
|
122,935
|
|||||
Total
assets
|
$
|
13,025,142
|
$
|
13,619,618
|
|||
|
|||||||
LIABILITIES
AND SHAREHOLDERS' EQUITY (DEFICIT)
|
|||||||
Current
liabilities:
|
|||||||
Customer
deposits
|
$
|
15,000
|
$
|
15,000
|
|||
Deferred
Revenue
|
33,874
|
62,495
|
|||||
Accounts
payable
|
983,671
|
892,773
|
|||||
Accrued
expenses
|
940,013
|
1,736,754
|
|||||
Current
maturities notes payable
|
1,607,178
|
1,998,189
|
|||||
Derivative
Liability
|
13,047,396
|
19,873,782
|
|||||
Total
current liabilities
|
16,627,132
|
24,578,993
|
|||||
|
|||||||
Non-Current
Deferred Tax Liabilities
|
406,162
|
406,162
|
|||||
Minority
Interest
|
182,604
|
135,561
|
|||||
|
|||||||
Shareholders'
equity - (Deficit)
|
|||||||
Preferred
stock - .01 par value
|
|||||||
10,000,000
shares authorized 8,826,087 and 1,000,000 issued
|
88,261
|
10,000
|
|||||
Common
stock - .01 par value, 200,000,000 shares authorized, 16,642,428
and
|
|||||||
16.642.428
issued 16,629,848 and 16.629.848 outstanding
|
|||||||
in
2007 and 2006 respectively
|
166,425
|
166,425
|
|||||
|
|||||||
Additional
paid-in capital
|
3,205,731
|
25,571,152
|
|||||
|
|||||||
(Deficit)
|
(36,953,340
|
)
|
(36,850,842
|
)
|
|||
|
|||||||
|
(3,792,923
|
)
|
(11,103,265
|
)
|
|||
Common
stock held in treasury, at cost
|
(397,833
|
)
|
(397,833
|
)
|
|||
|
|||||||
Total
shareholders' equity (Deficit)
|
(4,190,756
|
)
|
(11,501,098
|
)
|
|||
|
|||||||
Total
liabilities and shareholders' Equity
|
$
|
13,025,142
|
$
|
13,619,618
|
|
Three
Months Ended March 31,
|
||||||
|
2007
|
2006
|
|||||
Sales
- Technology Products
|
$
|
289,402
|
$
|
423,890
|
|||
Sales
- Technology Services
|
2,887,079
|
917,917
|
|||||
Total
Sales
|
3,176,481
|
1,341,807
|
|||||
|
|||||||
Cost
of Sales - Technology Products
|
89,192
|
154,120
|
|||||
Cost
of Sales - Technology Services
|
1,383,262
|
478,248
|
|||||
Total
Cost of Sales
|
1,472,454
|
632,368
|
|||||
|
|||||||
Total
Gross Profit
|
1,704,027
|
709,439
|
|||||
Operating
costs and expenses:
|
|||||||
Research
and development
|
109,041
|
109,134
|
|||||
Selling,
general and administrative
|
1,649,152
|
504,606
|
|||||
|
1,758,193
|
613,740
|
|||||
|
|||||||
Operating
Income(loss) before other income (expenses)
|
(54,166
|
)
|
95,699
|
||||
Other
income (expense):
|
|||||||
Derivative
|
(1,684,074
|
)
|
—
|
||||
Extinguishment
(gain)
|
2,073,589
|
—
|
|||||
Interest
Expense
|
(385,803
|
)
|
(129,890
|
)
|
|||
Finance
Expense
|
(5,000
|
)
|
(8,043
|
)
|
|||
|
|||||||
Total
Other income (expenses)
|
(1,288
|
)
|
(137,933
|
)
|
|||
|
|||||||
Net
Income (Loss) before Minority Interest
|
(55,454
|
)
|
(42,234
|
)
|
|||
|
|||||||
Minority
Interest
|
47,043
|
(7,442
|
)
|
||||
|
|||||||
Net
Loss
|
$
|
(102,497
|
)
|
$
|
(49,676
|
)
|
|
|
|||||||
Net
Loss per Common Share -Basic and Diluted
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
|
|
|||||||
Weighted
average shares outstanding basic and diluted
|
16,629,848
|
8,984,150
|
|
Three
Months Ended March 31,
|
||||||
|
2007
|
2006
|
|||||
|
|
|
|||||
Cash
flows from operating activities: Net (loss)
|
$
|
(102,497
|
)
|
(49,676
|
)
|
||
|
|||||||
Adjustments
to reconcile net (loss) to net cash provided by (used for) operating
activities:
|
|||||||
Depreciation
|
4,125
|
20,940
|
|||||
Amortization
Intangible assets
|
520,428
|
56,690
|
|||||
Financing
expense non cash
|
5,000
|
8,043
|
|||||
Derivative
Expense
|
1,684,074
|
—
|
|||||
Non
Cash interest Derivative
|
113,207
|
36,180
|
|||||
Amortization
of Debt Discount
|
205,809
|
—
|
|||||
Extinguishment
gain
|
(2,073,589
|
)
|
—
|
||||
Minority
interest
|
47,043
|
7,442
|
|||||
Stock
base compensation
|
61,440
|
—
|
|||||
Changes
in operating assets and liabilities:
|
|||||||
(Increase)
decrease in:
|
|||||||
Accounts
receivable
|
(675,389
|
)
|
(320,390
|
)
|
|||
Inventories
|
(1,232
|
)
|
4,106
|
||||
Other
current assets
|
8,090
|
(37,049
|
)
|
||||
Other
assets
|
26,235
|
(2,100
|
)
|
||||
Increase
(decrease) in:
|
|||||||
Accounts Payable and accrued expenses
|
180,911
|
154,883
|
|||||
Customer
Deposits
|
—
|
16,111
|
|||||
Deferred
revenue
|
(28,621
|
)
|
—
|
||||
Total
adjustments
|
77,531
|
(55,144
|
)
|
||||
Net
cash provided by (used for) operating activities
|
(24,966
|
)
|
(104,820
|
)
|
|||
Cash
flows from financing activities:
|
|||||||
Payments
of Short term note payable
|
(45,000
|
)
|
—
|
||||
Net
borrowing (Payment)on Revolving AR credit facility
|
(81,570
|
)
|
166,591
|
||||
Net
cash (used in) provided by financing activities
|
(126,570
|
)
|
166,591
|
||||
Net increase (decrease) in cash and cash equivalents
|
(151,536
|
)
|
61,771
|
||||
Cash
and cash equivalents - beginning of period
|
392,275
|
53,997
|
|||||
Cash
and cash equivalents - end of period
|
$
|
240,739
|
$
|
115,768
|
|||
Supplemental
Information:
|
|||||||
Interest
Paid
|
$
|
40,315
|
$
|
54,527
|
Category
|
Amount
|
|||
Current
assets
|
$
|
1,230,027
|
||
Property
and equipment
|
1,473
|
|||
Intangible
assets
|
7,490,612
|
|||
Deposits
|
9,406
|
|||
Current
liabilities
|
(910,901
|
)
|
||
|
$
|
7,820,617
|
|
Life
|
|
|||||
Customer
relationships
|
5
|
$
|
3,382,517
|
||||
Know
how and processes
|
5
|
2,924,790
|
|||||
Goodwill
|
—
|
484,033
|
|||||
Contractual
backlog
|
1
|
534,272
|
|||||
Employment
contract
|
1
|
165,000
|
|||||
|
$
|
7,490,612
|
|
Three
Months Ended
|
Three
Months Ended
|
|||||
|
March
31, 2007
|
March
31, 2005
|
|||||
Revenue
|
|
|
|||||
Technology
Products
|
$
|
289,402
|
$
|
423,890
|
|||
Technology
Services
|
2,887,079
|
917,917
|
|||||
Total
Consolidated Revenue
|
$
|
3,176,481
|
$
|
1,341,807
|
|||
Gross
Profit
|
|||||||
Technology
Products
|
$
|
200,210
|
$
|
269,770
|
|||
Technology
Services
|
1,503,817
|
439,669
|
|||||
Total
Gross Profit
|
$
|
1,704,027
|
$
|
708,439
|
|
2007
|
2006
|
|||||
|
|
|
|||||
Revolving
credit facility (a)
|
509,178
|
$
|
590,749
|
||||
Notes
Payable - Stockholders/Officers (b)
|
848,000
|
893,000
|
|||||
Short
term notes payable (c)
|
250,000
|
250,000
|
|||||
Convertible
note (d)
|
—
|
264,440
|
|||||
Total
notes payable
|
1,607,178
|
1,998,189
|
|||||
Less
current maturities, associated with notes payable
|
(1,607,178
|
)
|
(1,998,189
|
)
|
|||
|
|||||||
Long-term
debt
|
$
|
—
|
$
|
—
|
Financial
instrument:
|
|
|||
Warrant
derivative
|
$
|
13,895,090
|
||
Compound
derivative
|
8,113,451
|
|||
Convertible
notes payable
|
--
|
|||
Financing
costs, net of cash costs of $404,851
|
(867,357
|
)
|
||
Day-one
derivative loss
|
(17,096,035
|
)
|
||
|
$
|
4,045,149
|
Derivative
income (expense)
|
Quarter
ended
March
31, 2007
|
Quarter
ended
March
31, 2006
|
|||||
Conversion
features
|
$
|
(
1,305,829
|
)
|
$
|
264,752
|
||
Warrant
derivative
|
$
|
(
322,600
|
)
|
$
|
105,275
|
Liabilities
|
March
31, 2007
|
March
31, 2006
|
|||||
Compound
derivative
|
$
|
-
|
($
255,462
|
)
|
|||
Warrant
derivative
|
($
13,033,396
|
)
|
($
207,000
|
)
|
|
Number
of
|
Number
of
|
Weighted-
|
|||||||
|
Options
|
Options
|
Average
|
|||||||
|
Available
|
Outstanding
|
Exercise
Price
|
|||||||
Balance
January 1, 2007
|
467,000
|
1,371,000
|
$
|
1.00
|
||||||
Options
granted under Plan
|
—
|
—
|
||||||||
Options
expired
|
—
|
—
|
||||||||
Balance
March 31, 2007
|
467,000
|
1,371,000
|
$
|
1.00
|
|
|
2007
|
|
2006
|
|
||
Risk-Free
interest rate
|
|
|
4.65
|
%
|
|
4.92
|
%
|
Expected
dividend yield
|
|
|
|
|
|
—
|
|
Expected
stock price volatility
|
|
|
156
|
%
|
|
156
|
%
|
Expected
option Life
|
|
|
10
years
|
|
|
10
years
|
|
2006
|
|
2005
|
|||||
ASSETS
|
|||||||
Current
assets:
|
|||||||
Cash
and cash equivalents
|
$
|
392,275
|
$
|
53,997
|
|||
Accounts
receivable - trade
|
2,412,164
|
706,255
|
|||||
Inventories
|
64,442
|
6,049
|
|||||
Other
current assets
|
698,514
|
190,581
|
|||||
Total
current assets
|
3,567,395
|
956,882
|
|||||
Property
and equipment, net
|
37,187
|
35,279
|
|||||
Goodwill
|
2,547,866
|
2,063,833
|
|||||
Other
Intangibles, net
|
7,344,235
|
1,077,110
|
|||||
Other
assets
|
122,936
|
19,213
|
|||||
-
|
|||||||
Total
assets
|
$
|
13,619,618
|
$
|
4,152,317
|
|||
LIABILITIES
AND SHAREHOLDERS' EQUITY (DEFICIT)
|
|||||||
Current
liabilities:
|
|||||||
Customer
deposits
|
$
|
15,000
|
$
|
150,199
|
|||
Customer
Prepayments
|
62,495
|
-
|
|||||
Accounts
payable
|
892,773
|
986,505
|
|||||
Accrued
expenses
|
1,736,754
|
1,084,555
|
|||||
Current
maturities notes payable
|
1,998,189
|
2,667,942
|
|||||
Derivative
Liability
|
19,873,782
|
462,462
|
|||||
Total
current liabilities
|
24,578,993
|
5,351,663
|
|||||
Non-Current
Deferred Tax Liabilities
|
406,162
|
-
|
|||||
Minority
Interest
|
135,561
|
78,316
|
|||||
Shareholders'
equity - (Deficit)
|
|||||||
Preferred
stock - .01 par value
|
|||||||
10,000,000
shares authorized
|
|||||||
1,000,000
and 0 issued
|
10,000
|
-
|
|||||
Common
stock - .01 par value,
|
|||||||
200,000,000
shares authorized,
|
|||||||
16,642,428
and 8,967,477 issued
|
|||||||
16,629,848
and 8,954,897 outstanding
|
|||||||
in
2006 and 2005 respectively.
|
166,425
|
89,675
|
|||||
Additional
paid-in capital
|
25,571,152
|
19,609,720
|
|||||
(Deficit)
|
(36,850,842
|
)
|
(20,579,224
|
)
|
|||
(11,103,265
|
)
|
(879,829
|
)
|
||||
Common
stock held in treasury, at cost
|
(397,833
|
)
|
(397,833
|
)
|
|||
Total
shareholders' equity (Deficit)
|
(11,501,098
|
)
|
(1,277,662
|
)
|
|||
Total
liabilities and shareholders'
|
|||||||
Equity
|
$
|
13,619,618
|
$
|
4,152,317
|
Year
Ended December 31,
|
|||||||
2006
|
2005
|
||||||
Sales
- Technology Products
|
$
|
1,692,052
|
$
|
1,224,042
|
|||
Sales
- Technology Services
|
5,802,836
|
3,011,227
|
|||||
Total
Sales
|
7,494,888
|
4,235,269
|
|||||
Cost
of Sales - Technology Products
|
554,136
|
439,483
|
|||||
Cost
of Sales - Technology Services
|
2,801,085
|
1,834,281
|
|||||
Total
Cost of Sales
|
3,355,221
|
2,273,764
|
|||||
Total
Gross Profit
|
4,139,667
|
1,961,505
|
|||||
Operating
costs and expenses:
|
|||||||
Research
and development
|
435,768
|
431,021
|
|||||
Selling,
general and administrative
|
3,248,013
|
2,537,365
|
|||||
3,683,781
|
2,968,386
|
||||||
Operating
income (Loss) before other income (expenses)
|
455,886
|
(1,006,881
|
)
|
||||
Other
income (expense):
|
|||||||
Derivative
income (loss)
|
(13,753,295
|
)
|
370,027
|
||||
Extinguishment
gain (loss)
|
(158,266
|
)
|
|||||
Interest
Expense
|
(704,178
|
)
|
(509,007
|
)
|
|||
Finance
Expense
|
(2,054,520
|
)
|
(26,979
|
)
|
|||
Total
other expenses
|
(16,670,259
|
)
|
(165,959
|
)
|
|||
Net
(Loss) from operations
|
|||||||
Before
State Income tax benefit
|
(16,214,373
|
)
|
(1,172,840
|
)
|
|||
Benefit
from State Taxes
|
—
|
216,058
|
|||||
Loss
before minority interest
|
(16,214,373
|
)
|
(956,782
|
)
|
|||
Minority
Interest
|
(57,245
|
)
|
93,679
|
||||
Net
Loss
|
$
|
(16,271,618
|
)
|
$
|
(863,103
|
)
|
|
Basic
and diluted earnings per common share
|
|||||||
= From Net Loss | $ | (1.37 | ) | $ |
(0.10
|
)
|
|
Weighted
average shares outstanding basic and diluted
|
11,888,458
|
8,508,529
|
Year
Ended December 31,
|
|||||||
2006
|
|
2005
|
|||||
Cash
flows from operating activities:
|
|||||||
Net
(loss)
|
$
|
(16,271,618
|
)
|
$
|
(863,103
|
)
|
|
Adjustments
to reconcile net (loss) to net cash
|
|||||||
provided
by (used for) operating activities:
|
|||||||
Depreciation
|
40,831
|
107,825
|
|||||
Amortization
Intangible assets
|
739,454
|
56,690
|
|||||
Amortization
of debt discount
|
371,753
|
154,702
|
|||||
Stock
based compensation
|
90,612
|
5,000
|
|||||
Financing
expense
|
2,054,520
|
26,979
|
|||||
Derivative
(Income) expense
|
13,753,295
|
(370,027
|
)
|
||||
Minority
interest
|
57,245
|
(93,679
|
)
|
||||
Extinguishment
Loss
|
158,266
|
-
|
|||||
Changes
in operating assets and liabilities:
|
|||||||
(Increase)
decrease in:
|
|||||||
Accounts
receivable
|
(818,847
|
)
|
535,754
|
||||
Inventories
|
23,150
|
44,969
|
|||||
Other
current assets
|
(69,472
|
)
|
(14,809
|
)
|
|||
Other
assets
|
1,649
|
(64,401
|
)
|
||||
Increase
(decrease) in:
|
|||||||
Accounts
Payable and
|
|||||||
accrued
expenses
|
(270,269
|
)
|
489,745
|
||||
Customer
Deposits
|
(135,199
|
)
|
150,199
|
||||
Deferred
Revenue
|
62,495
|
-
|
|||||
Total
adjustments
|
16,059,483
|
1,028,947
|
|||||
Net
cash provided by (used for)
|
|||||||
operating
activities
|
(212,135
|
)
|
165,844
|
||||
Cash
flows from investing activities:
|
|||||||
Acquisitions
|
(3,665,638
|
)
|
(1,655,325
|
)
|
|||
Cash
acquired in acquisitions
|
156,772
|
5,519
|
|||||
Purchase
of property and equipment
|
(39,837
|
)
|
(12,212
|
)
|
|||
Net
cash (used) in investing activities
|
(3,548,703
|
)
|
(1,662,018
|
)
|
|||
Cash
flows from financing activities:
|
|||||||
Issuance
of common stock
|
1,293,906
|
-
|
|||||
Repayment
of convertible notes payable (Laurus)
|
(1,000,000
|
)
|
-
|
||||
Financing
fees in connection with Barrons financing and
|
|||||||
Revolving
accounts receivable line
|
(553,059
|
)
|
-
|
||||
Loans
from Stockholders & Officers
|
250,000
|
188,301
|
|||||
Loans
paid Stockholders & officers
|
(245,629
|
)
|
(78,912
|
)
|
|||
Payment
of Bank Notes
|
-
|
(131,250
|
)
|
||||
Issuance
of Convertible Debt (Barrons)
|
4,450,000
|
1,867,500
|
|||||
Short
term notes paid
|
(234,000
|
)
|
(66,000
|
)
|
|||
Net
borrowing (Payment)on Revolving AR credit facility
|
137,898
|
(422,149
|
)
|
||||
Net
cash (used in) provided by financing activities
|
4,099,116
|
1,357,490
|
|||||
Net
increase (decrease) in
|
|||||||
cash
and cash equivalents
|
338,278
|
(138,684
|
)
|
||||
Cash
and cash equivalents -
|
|||||||
beginning
of period
|
53,997
|
192,681
|
|||||
Cash
and cash equivalents -
|
|||||||
end
of period
|
$
|
392,275
|
$
|
53,997
|
|||
Supplemental
information:
|
|||||||
Interest
paid
|
$
|
315,470
|
$
|
235,718
|
|||
Taxes
paid
|
$
|
-
|
$
|
-
|
Preferred
Stock
|
Common
Stock
|
Additional
Paid-In
|
Treasury
|
|||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
(Deficit)
|
Shares
|
Amount
|
Total
|
||||||||||||||||||||
|
||||||||||||||||||||||||||||
December
31, 2004
|
5,396,417
|
53,964
|
16,566,639
|
(19,716,121
|
)
|
12,580
|
(397,833
|
)
|
(3,493,351
|
)
|
||||||||||||||||||
Discount
on 2005 Laurus Note
|
16,735
|
16,735
|
||||||||||||||||||||||||||
Issuance
of common stock
|
||||||||||||||||||||||||||||
Convertible
debt Conversion
|
1,542,872
|
15,429
|
1,336,158
|
1,351,587
|
||||||||||||||||||||||||
Issuance
of Stock
|
||||||||||||||||||||||||||||
Acquisition
of SMEI
|
1,655,325
|
16,553
|
1,340,813
|
1,357,366
|
||||||||||||||||||||||||
Issuance
of Common to
|
||||||||||||||||||||||||||||
SMEI
Employees
|
65,863
|
659
|
67,020
|
67,679
|
||||||||||||||||||||||||
Warrants
issued
|
10,000
|
10,000
|
||||||||||||||||||||||||||
Issuance
of Common
|
||||||||||||||||||||||||||||
Stock
issued for Service
|
307,000
|
3,070
|
272,355
|
275,425
|
||||||||||||||||||||||||
Net
Loss
|
(863,103
|
)
|
(863,103
|
)
|
||||||||||||||||||||||||
Balance
|
||||||||||||||||||||||||||||
December
31, 2005
|
-
|
-
|
8,967,477
|
89,675
|
19,609,720
|
(20,579,224
|
)
|
12,580
|
(397,833
|
)
|
(1,277,662
|
)
|
||||||||||||||||
Issuance
of common stock
|
||||||||||||||||||||||||||||
Private
Placement June 2006
|
2,274,951
|
22,750
|
1,371,156
|
1,393,906
|
||||||||||||||||||||||||
Issuance
of Stock
|
||||||||||||||||||||||||||||
Acquisition
of RTI
|
5,000,000
|
50,000
|
3,040,000
|
3,090,000
|
||||||||||||||||||||||||
Issuance
of Common to
|
||||||||||||||||||||||||||||
Keshet
Funds on Extinguishment of debt
|
300,000
|
3,000
|
177,000
|
180,000
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
Laurus
Amendment
|
||||||||||||||||||||||||||||
July
06
|
100,000
|
1,000
|
57,500
|
58,500
|
||||||||||||||||||||||||
Issuance
of 1,161,588
|
||||||||||||||||||||||||||||
of
warrants in June 2006
|
720,185
|
720,185
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
Preferred
“Series B” issued
|
1,000,000
|
10,000
|
504,979
|
514,979
|
||||||||||||||||||||||||
Issuance
of
|
||||||||||||||||||||||||||||
Common
|
||||||||||||||||||||||||||||
Share-based
comp.
|
—
|
—
|
90,612
|
90,612
|
||||||||||||||||||||||||
Net
Loss
|
-
|
(16,271,618
|
)
|
(16,271,618
|
)
|
|||||||||||||||||||||||
Balance
|
||||||||||||||||||||||||||||
December
31, 2006
|
1,000,000
|
$
|
10,000
|
16,642,428
|
$
|
166,425
|
$
|
25,571,152
|
$
|
(36,850,842
|
)
|
12,580
|
$
|
(397,833
|
)
|
($11,501,098
|
)
|
2005
|
||||
Net
Loss As reported
|
$
|
(863,103
|
)
|
|
Deduct
compensation expenses (Fair Value Options)
|
(299,124
|
)
|
||
Deduct
Compensation expense (Fair Value Warrants)
|
(504,241
|
)
|
||
Pro
Forma Net Loss
|
$
|
(1,666,468
|
)
|
|
Basic
and Diluted Net Loss per share
|
||||
As
reported
|
($0.10
|
)
|
||
Pro
Forma Net Loss
|
($0.20
|
)
|
Category
|
Amount
|
|||
Current
assets
|
$
|
1,197,538
|
||
Property
and equipment
|
93,613
|
|||
Intangible
assets
|
3,197,633
|
|||
Deposits
|
2,000
|
|||
Current
liabilities
|
(1,104,668
|
)
|
||
Debt
|
(93,750
|
)
|
||
Minority
interest
|
(171,995
|
)
|
||
$
|
3,120,371
|
Intangible
assets acquired consisted of the following:
|
Life
|
||||||
Goodwill
|
—
|
$
|
2,063,833
|
||||
Contractual
backlog (a)
|
5
|
854,084
|
|||||
Customer
lists
|
5
|
279,716
|
|||||
Total
amount of intangible assets acquired
and weighted average life
|
5
|
$
|
3,197,633
|
Year
ended December 31:
|
2005
|
|||
Revenues
|
$
|
4,633,227
|
||
Net
income (loss) from continuing operations
|
$
|
(989,755
|
)
|
|
Basic
and diluted net income (loss) per
share from continuing operations
|
$
|
(0.10
|
)
|
Category
|
Amount
|
|||
Current
assets
|
$
|
1,230,027
|
||
Property
and equipment
|
1,473
|
|||
Intangible
assets
|
7,490,612
|
|||
Deposits
|
9,406
|
|||
Current
liabilities
|
(910,901
|
)
|
||
$
|
7,820,617
|
Life
|
|||||||
Customer
relationships
|
5
|
$
|
3,382,517
|
||||
Know
how and processes
|
5
|
2,924,790
|
|||||
Goodwill
|
—
|
484,033
|
|||||
Contractual
backlog
|
1
|
534,271
|
|||||
Employment
contract
|
1
|
165,000
|
|||||
$
|
7,490,611
|
|
2006
|
|||
Revenues
|
$
|
9,759,858
|
||
Net
(Loss)
|
$
|
(15,674,107
|
)
|
|
Basic
and diluted net (loss) per share
|
$
|
(1.32
|
)
|
2006
|
|
2005
|
|||||
Computers,
fixtures
|
|||||||
And
equipment
|
$
|
1,633,452
|
$
|
1,590,713
|
|||
Less
accumulated
|
|||||||
Depreciation
|
(1,596,265
|
)
|
(1,555,434
|
)
|
|||
Totals
|
$
|
37,187
|
$
|
35,279
|
2006
|
Gross
Carrying Amount
|
Accumulated
Amortization
|
Net
Carrying Amount
|
|||||||
Amortizable
intangible assets:
|
||||||||||
Customer
relationships
|
$
|
3,382,517
|
$
|
(169,126
|
)
|
$
|
3,213,391
|
|||
Know
how and processes
|
2,924,790
|
(146,240
|
)
|
2,778,550
|
||||||
Customer
backlog
|
1,388,355
|
(364,288
|
)
|
1,024,067
|
||||||
Customer
lists
|
279,717
|
(69,929
|
)
|
209,788
|
||||||
Employment
contract
|
165,000
|
(46,562
|
)
|
118,438
|
||||||
$
|
8,140,379
|
$
|
(796,145
|
)
|
$
|
7,344,234
|
2005
|
Gross
Carrying Amount
|
Accumulated
Amortization
|
Net
Carrying Amount
|
|||||||
Amortizable
intangible assets:
|
||||||||||
Customer
backlog
|
$
|
854,084
|
$
|
(42,704
|
)
|
$
|
811,380
|
|||
Customer
lists
|
279,716
|
(13,986
|
)
|
265,730
|
||||||
$
|
1,133,800
|
$
|
(56,690
|
)
|
$
|
1,077,110
|
2007
|
$
|
2,081,710
|
||
2008
|
1,579,767
|
|||
2009
|
1,579,767
|
|||
2010
|
1,523,077
|
|||
2011
|
579,915
|
|||
|
||||
Total
|
$
|
7,344,236
|
Year
Ended
|
|
Year
Ended
|
|
||||
|
|
December
31, 2006
|
|
December
31, 2005
|
|||
Revenue
|
|||||||
Technology
Services
|
$
|
5,802,836
|
(a)
|
3,011,227
|
(a)
|
||
Technology
Products
|
1,692,052
|
1,224,042
|
|||||
Total
Consolidated Revenue
|
$
|
7,494,888
|
(a)
|
$
|
4,235,269
|
(a)
|
|
Net
Income (loss)
|
|||||||
Technology
Services
|
151,052
|
(a)
|
(575,456
|
)(a)
|
|||
Technology
Products
|
(16,422,670
|
)
|
(287,647
|
)
|
|||
Total
Consolidated Net (Loss)
|
$
|
(16,271,618
|
)(a)
|
$
|
(863,103
|
)(a)
|
|
Assets
|
|||||||
Technology
Services
|
$
|
12,406,195
|
(b)
|
3,896,321
|
(b)
|
||
Technology
Products
|
$
|
1,213,422
|
255,996
|
||||
Total
Consolidated Assets
|
$
|
13,619,617
|
(b)
|
$
|
4,152,317
|
(b)
|
|
2006
|
|
2005
|
||||
Deferred
|
|||||||
Federal
|
$
|
-
|
$
|
-
|
|||
Current
|
|||||||
Federal
|
-
|
-
|
|||||
State
|
-
|
-
|
|||||
|
$ | - |
$
|
-
|
2006
|
|
2005
|
|||||
Income
tax benefit at the
|
|||||||
U.S.
federal statuary tax rate
|
$
|
5,675,031
|
$
|
410,494
|
|||
(Reduction)
increase in tax
|
|||||||
Benefit
from:
|
|||||||
Derivative
income(loss)
|
(4,813,653
|
)
|
129,509
|
||||
Extinguishment
(loss)
|
(55,393
|
)
|
-
|
||||
Amortization
of debt discount
|
(130,114
|
)
|
(54,146
|
)
|
|||
Benefit
from state taxes
|
-
|
(75,620
|
)
|
||||
Actual
income tax benefit not
|
|||||||
Provided
due to valuaton
|
|||||||
Allowance
|
$
|
675,871
|
$
|
410,237
|
December
31,
|
|
December
31,
|
|
||||
|
|
2006
|
|
2005
|
|||
Deferred
tax assets:
|
|||||||
Tax
benefits related
|
|||||||
To
net operating
|
|||||||
Loss
carry forwards
|
|||||||
And
research tax Credits
|
$
|
8,063,954
|
$
|
7,388,083
|
|||
Valuation
Allowance for
|
|||||||
Deferred
tax Assets
|
$
|
8,063,954
|
$
|
7,388,083
|
|||
Net
deferred tax Assets
|
$
|
-0-
|
$
|
-0-
|
2007
|
148,509
|
|||
2008
|
36,744
|
|||
2009
|
15,310
|
|||
2010
|
-0-
|
|||
Total
minimum lease payments
|
$
|
200,563
|
2006
|
|
2005
|
|||||
Face
value $2,000,000, variable rate (8.0% at December 31, 2005)
Secured
|
|||||||
Convertible
Term Note, due in monthly payments of $60,606 commencing
June
30,
|
|||||||
2005
(a)
|
$
|
—
|
$
|
1,442,462
|
|||
$400,000,
8.0% Secured Convertible Keshet Term Note (b)
|
—
|
400,000
|
|||||
Revolving
credit facility (c)
|
590,749
|
202,851
|
|||||
Notes
Payable - Stockholders/Officers (d)
|
893,000
|
388,629
|
|||||
Short
term notes payable (e)
|
250,000
|
234,000
|
|||||
Convertible
note (f)
|
264,440
|
—
|
|||||
Total
notes payable
|
1,998,189
|
2,667,942
|
|||||
Less
current maturities, associated with notes payable
|
(1,998,189
|
)
|
(2,667,942
|
)
|
|||
Long-term
debt
|
$
|
—
|
$
|
—
|
Financial
instrument:
|
||||
Warrant
derivative
|
$
|
13,895,090
|
||
Compound
derivative
|
8,113,451
|
|||
Convertible
notes payable
|
—
|
|||
Financing
costs, net of cash costs of $454,851
|
(867,357
|
)
|
||
Day-one
derivative loss
|
(17,096,035
|
)
|
||
$
|
4,045,149
|
Derivative
income (expense)
|
Year
ended
December
31, 2006
|
Year
ended
December
31, 2005
|
|||||
Conversion
features
|
$
|
(13,858,526
|
)
|
$
|
264,752
|
||
Warrant
derivative
|
$
|
105,231
|
$
|
105,275
|
|||
|
$
|
(13,753,295
|
)
|
$
|
370,027
|
Liabilities
|
December
31, 2006
|
December
31, 2005
|
|||||
Compound
derivative
|
($
6,756,114
|
)
|
($
255,462
|
)
|
|||
Warrant
derivative
|
($
13,117,668
|
)
|
($
207,000
|
)
|
|||
Total
|
($
19,873,782
|
)
|
($
462,462
|
)
|
a) |
2002
Employee Stock option plan
|
Number
of
|
Number
of
|
Weighted-
|
||||||||
|
Options
|
Options
|
Average
|
|||||||
|
Available
|
Outstanding
|
Exercise
Price
|
|||||||
Balance
December 31, 2004
|
1,826,000
|
53,500
|
$
|
1.20
|
||||||
Options
granted under Plan 2005
|
(1,034,000
|
)
|
1,034,000
|
$
|
1.00
|
|||||
Options
expired in 2005
|
(41,500
|
)
|
$
|
1.10
|
||||||
Balance
December 31, 2005
|
792,000
|
1,046,000
|
$
|
1.00
|
||||||
Options
granted under Plan in 2006
|
(325,000
|
)
|
325,000
|
$
|
0.60
|
|||||
Balance
December 31, 2006
|
467,000
|
1,371,000
|
$
|
1.00
|
|
2006
|
|
2005
|
||||
|
|||||||
Risk-Free
interest rate
|
4.92
|
%
|
4.88
|
%
|
|||
Expected
dividend yield
|
-
|
-
|
|||||
Expected
stock price volatility
|
156
|
%
|
99
|
%
|
|||
Expected
option Life
|
10
years
|
10
years
|
|
Amount
|
|
||
SEC
registration fee
|
|
$
|
48.15
|
|
Accounting
fees and expenses
|
|
|
10,000*
|
|
Printing
and filing
|
|
|
3,000*
|
|
Legal
fees and expenses
|
|
|
50,000*
|
|
Miscellaneous
|
|
|
1,000*
|
|
TOTAL
|
|
|
64,048.15*
|
|
Exhibit
Number
|
|
Description
|
2.1
|
|
Stock
purchase agreement by Ricciardi Technologies, Inc., its Owners, including
Michael Ricciardi as the Owner Representative and Science Dynamics
Corporation, dated as of September 12, 2006.*
|
|
|
|
2.2
|
|
Stock
purchase agreement dated December 16, 2004 among Science Dynamics
Corporation, Systems Management Engineering, Inc. and the shareholders
of
Systems Management Engineering, Inc. identified on the signature
page
thereto (Incorporated by reference to Form 8-K, filed with the Securities
and Exchange Commission on December 22, 2004)
|
|
|
|
2.3
|
|
Amendment
No. 1 to Stock purchase agreement dated February 2, 2005 among Science
Dynamics Corporation, Systems Management Engineering, Inc. and the
shareholders of Systems Management Engineering, Inc. identified on
the
signature page thereto (Incorporated by reference to Form 8-K, filed
with
the Securities and Exchange Commission on February 11,
2005)
|
3.1
|
|
Certificate
of Incorporation (Incorporated by reference to the Company’s registration
statement on Form S-18 (File No. 33-20687), effective April 21,
1981)
|
|
|
|
3.2
|
|
Amendment
to Certificate of Incorporation dated October 31, 1980 (Incorporated
by
reference to the Company’s registration statement on Form S-18 (File No.
33-20687), effective April 21, 1981)
|
|
|
|
3.3
|
|
Amendment
to Certificate of Incorporation dated November 25, 1980 (Incorporated
by
reference to the Company’s registration statement on Form S-18 (File No.
33-20687), effective April 21, 1981)
|
|
|
|
3.4
|
|
Amendment
to Certificate of Incorporation dated May 23, 1984 (Incorporated
by
reference to the Company’s registration statement on Form SB-2 (File No.
333-62226) filed with the Securities and Exchange Commission on
June 4,
2001)
|
|
|
|
3.5
|
|
Amendment
to Certificate of Incorporation dated July 13, 1987 (Incorporated
by
reference to the Company’s registration statement on Form SB-2 (File No.
333-62226) filed with the Securities and Exchange Commission on
June 4,
2001)
|
|
|
|
3.6
|
|
Amendment
to Certificate of Incorporation dated November 8, 1996 (Incorporated
by
reference to the Company’s registration statement on Form SB-2 (File No.
333-62226) filed with the Securities and Exchange Commission on
June 4,
2001)
|
|
|
|
3.7
|
|
Amendment
to Certificate of Incorporation dated December 15, 1998 (Incorporated
by
reference to the Company’s registration statement on Form SB-2 (File No.
333-62226) filed with the Securities and Exchange Commission on
June 4,
2001)
|
|
|
|
3.8
|
|
Amendment
to Certificate of Incorporation dated December 4, 2002 (Incorporated
by
reference to the Company’s information statement on Schedule 14C filed
with the Securities and Exchange Commission on November 12,
2002)
|
|
|
|
3.9
|
|
Certificate
of Designation of Series A Convertible Preferred Stock and Series
B
Convertible Redeemable Preferred Stock
|
|
|
|
3.9
|
|
By-laws
(Incorporated by reference to the Company’s registration statement on Form
S-18 (File No. 33-20687), effective April 21, 1981)
|
|
|
|
3.10
|
|
Restated
Certificate of Incorporation**
|
|
|
|
4.1
|
|
Form
of warrant issued to Barron Partners LP*
|
|
|
|
4.2
|
|
Form
of warrant issued to Barron Partners LP*
|
|
|
|
4.3
|
|
Form
of warrant issued to Dragonfly Capital Partners LLc*
|
|
|
|
4.4
|
|
Promissory
Note issued to Barron Partners LP*
|
|
|
|
4.5
|
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Secured
Promissory Note issued to Michael Ricciard*i
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5.1
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Opinion
of Sichenzia Ross Friedman Ference LLP
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10.1
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Securities
purchase agreement, between Science Dynamics Corporation and Barron
Partners LP, dated September 15, 2006*.
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|
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10.2
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|
Employment
Agreement between Science Dynamics Corporation and Michael
Ricciardi*.
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10.3
|
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Amendment
to Employment Agreement - Paul Burges*
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10.4
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Amendment
to Employment Agreement - Joseph Noto
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10.5
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|
Registration
Rights Agreement by and among Science Dynamics Corporation and Barron
Partners L.P., dated As of September 19, 2006.*
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10.6
|
|
Amendment
to Securities Purchase Agreement and Registration Rights
Agreement.**
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21.1
|
|
List
of Subsidiaries**
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|
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23.1
|
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Consent
of Sichenzia Ross Friedman Ference LLP (Included in Exhibit
5.1)
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23.2
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Consent
of Peter C. Cosmas Co., CPAs, independent registered public
accountants
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99.
1
|
|
Pledge
and Security Agreement made by between Science Dynamics Corporation
in
favor of and being delivered to Michael Ricciardi as Owner Representative,
dated September 19, 2006*
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|
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99.2
|
|
Escrow
Agreement by and between Science Dynamics Corporation, Ricciardi
Technologies, Inc. and the individuals listed on Schedule 1 thereto,
dated
September 19, 2006*
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|
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99.3
|
|
Form
of Lock Up Agreement, executed pursuant to the Securities purchase
agreement, between Science Dynamics Corporation and Barron Partners
LP,
dated September 15, 2006*
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|
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LATTICE
INCORPORATED
|
|
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By:
|
/s/
Paul
Burgess
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Paul
Burgess,
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|
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President
and Chief Executive Officer
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|
|
(Principal
Executive Officer)
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|
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By:
|
/s/
Joe
Noto
|
|
Joe
Noto,
|
|
|
Chief
Financial Officer and Principal
|
|
|
Accounting
Officer
|
Signature
|
|
Title
|
|
Date
|
/s/
Paul Burgess
|
|
|
|
|
Paul
Burgess
|
|
Director
|
|
June
13,
2007
|
/s/
Joe Noto
|
|
|
|
|
Joseph
Noto
|
|
Chief
Financial Officer
|
|
June
13,
2007
|
/s/
Robert E. Galbraith*
|
|
|
|
|
Robert
E. Galbraith
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|
Director
|
|
June
13,
2007
|
_______________________
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|
|
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|
Jeannemarie
Devolites Davis
|
|
Director
|
|
June 13
,
2007
|
/s/
Thomas F. Gillet*
|
|
|
|
|
Thomas
F. Gillett
|
|
Director
|
|
June 13
,
2007
|
|
|
|
|
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/s/
Donald Upson*
|
|
|
|
|
Donald
Upson
|
|
Director
|
|
June 13,
2007
|