..
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13G
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 4)
LATTICE INCORPORATED
--------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
--------------------------------------------------------------------------------
(Title of Class of Securities)
518414107
--------------------------------------------------------------------------------
(CUSIP Number)
DECEMBER 31, 2009
--------------------------------------------------------------------------------
(Date of Event Which Requires Filing of this Statement)
Check the appropriate box to designate the rule pursuant to which this Schedule
13G is filed:
|_| Rule 13d-1(b)
|X| Rule 13d-1(c)
|_| Rule 13d-1(d)
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
--------------------------------------------------------------------------------
CUSIP No. 518414107
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON: Laurus Master Fund, Ltd. (In Liquidation)*
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 98-0337673
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |X|
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
--------------------------------------------------------------------------------
5 SOLE VOTING POWER
0 shares of Common Stock.*
-----------------------------------------------------------------
NUMBER OF 6 SHARED VOTING POWER
SHARES
BENEFICIALLY 1,879,015 shares of Common Stock.*
OWNED BY -----------------------------------------------------------------
EACH 7 SOLE DISPOSITIVE POWER
REPORTING
PERSON 0 shares of Common Stock.*
WITH -----------------------------------------------------------------
8 SHARED DISPOSITIVE POWER
1,879,015 shares of Common Stock.*
--------------------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,879,015 shares of Common Stock shares of Common Stock.
--------------------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
|X|
--------------------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
9.99%
--------------------------------------------------------------------------------
12 TYPE OF REPORTING PERSON
CO
--------------------------------------------------------------------------------
* Based upon 16,929,953 shares of the common stock, par value $.01 per share
(the "Shares") of Lattice Incorporated, a Delaware corporation (the "Company")
as of November 20, 2009, as disclosed in the Company's Quarterly Report on Form
10Q for the quarterly period ending September 30, 2009. As of December 31, 2009,
PSource Structured Debt Limited("PSource")and Calliope Capital Corporation
("Calliope" and together with PSource, the "Investors") held (i) warrants, as
amended, to purchase up to 600,000 Shares at an exercise price of $1.10 per
share, subject to certain adjustments (the "First Warrant"), (ii) warrants to
purchase 1,458,333 Shares at an exercise price of $0.10 per Share, subject to
certain adjustments (the "Second Warrant"), (iii) warrants to purchase 20,000
Shares at an exercise price of $0.52 per Share, subject to certain adjustments
(the "Third Warrant") and (iv) warrants to purchase 25,000 Shares, exercisable
as follows: 12,500 Shares at an exercise price of $0.99 per Share; 7,500 Shares
at an exercise price of $1.07 per Share; and 5,000 Shares at an exercise price
of $1.24 per Share, each subject to certain adjustments (the "Fourth Warrant",
and together with the First Warrant and the Third Warrant, the "Older
Warrants"). The number of Shares underlying all warrants described herein have
been adjusted to take into account a 10:1 split of the Company's Shares that
occurred on February 4, 2007. Each of the Older Warrants contains an issuance
limitation prohibiting the Investors from converting those securities to the
extent that such conversion would result in beneficial ownership by the
Investors of more than 4.99% of the Shares then issued and outstanding (the
"4.99 Issuance Limitation"). The Second Warrant contains an issuance limitation
prohibiting the Investors from converting those securities to the extent that
such conversion would result in beneficial ownership by the Investors of more
than 9.99% of the Shares then issued and outstanding (the "9.99 Issuance
Limitation" and, together with the 4.99 Issuance Limitation, the "Issuance
Limitations"). The Issuance Limitations may be waived by Investors upon at least
75 days prior notice to the Company. In addition, with respect to the Second
Warrant, the Issuance Limitation shall also automatically become null and void
upon notice to the holder of the occurrence and/or continuance of an event of
default (as defined in and pursuant to the terms of the applicable instrument).
In addition, with respect to the Older Warrants, the Issuance Limitation shall
also automatically become null and void upon the occurrence and/or continuance
of an event of default (as defined in and pursuant to the terms of the
applicable instrument). Calliope is a wholly owned subsidiary of Laurus Master
Fund, Ltd. (In Liquidation) (the "Fund"). The Fund is in liquidation under the
supervision of the Grand Court of the Cayman Islands. The Joint Official
Liquidators ("JOLs") are Chris Johnson and Russell Smith of Johnson Smith
Associates Ltd. The JOLs have discretion over the management of the Fund and the
disposition of its assets, including the securities owned by the Fund and its
subsidiaries reported in this Schedule 13G, as amended. Calliope is a
wholly-owned subsidiary of the Fund. Laurus Capital Management, LLC ("LCM"),
acting through its controlling principals, Eugene Grin and David Grin, provides
day to day investment management services to the Fund and its two feeder funds
concerning their respective assets, including the securities owned by Calliope
reported in this Schedule 13G, as amended, subject to certain oversight and
preapproval rights of the JOLs and LCM's obligations to the Fund under the
Seventh Amended and Restated Investment Management Agreement of April 26, 2007
(as amended, restated, modified and/or supplemented from time to time); all of
the foregoing subject to specific directions otherwise given by the JOLs at
their discretion. PSource is managed by LCM, subject to certain preapproval
rights of the board of directors of PSource. Eugene Grin and David Grin, through
other entities, are the controlling principals of LCM and share voting and
investment power over the securities owned by Calliope (subject to the oversight
and preapproval rights of the JOLs) and PSource reported in this Schedule 13G,
as amended. The JOLs share voting and investment power over the securities owned
by Calliope.
--------------------------------------------------------------------------------
CUSIP No. 518414107
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON: Laurus Capital Management, LLC
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 13-4150669
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |X|
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
5 SOLE VOTING POWER
0 shares of Common Stock.*
-----------------------------------------------------------------
NUMBER OF 6 SHARED VOTING POWER
SHARES
BENEFICIALLY 1,879,015 shares of Common Stock.*
OWNED BY -----------------------------------------------------------------
EACH 7 SOLE DISPOSITIVE POWER
REPORTING
PERSON 0 shares of Common Stock.*
WITH -----------------------------------------------------------------
8 SHARED DISPOSITIVE POWER
1,879,015 shares of Common Stock.*
--------------------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,879,015 shares of Common Stock.
--------------------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
|X|
--------------------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
9.99%
--------------------------------------------------------------------------------
12 TYPE OF REPORTING PERSON
OO
--------------------------------------------------------------------------------
* Based upon 16,929,953 shares of the common stock, par value $.01 per share
(the "Shares") of Lattice Incorporated, a Delaware corporation (the "Company")
as of November 20, 2009, as disclosed in the Company's Quarterly Report on Form
10Q for the quarterly period ending September 30, 2009. As of December 31, 2009,
PSource Structured Debt Limited("PSource")and Calliope Capital Corporation
("Calliope" and together with PSource, the "Investors") held (i) warrants, as
amended, to purchase up to 600,000 Shares at an exercise price of $1.10 per
share, subject to certain adjustments (the "First Warrant"), (ii) warrants to
purchase 1,458,333 Shares at an exercise price of $0.10 per Share, subject to
certain adjustments (the "Second Warrant"), (iii) warrants to purchase 20,000
Shares at an exercise price of $0.52 per Share, subject to certain adjustments
(the "Third Warrant") and (iv) warrants to purchase 25,000 Shares, exercisable
as follows: 12,500 Shares at an exercise price of $0.99 per Share; 7,500 Shares
at an exercise price of $1.07 per Share; and 5,000 Shares at an exercise price
of $1.24 per Share, each subject to certain adjustments (the "Fourth Warrant",
and together with the First Warrant and the Third Warrant, the "Older
Warrants"). The number of Shares underlying all warrants described herein have
been adjusted to take into account a 10:1 split of the Company's Shares that
occurred on February 4, 2007. Each of the Older Warrants contains an issuance
limitation prohibiting the Investors from converting those securities to the
extent that such conversion would result in beneficial ownership by the
Investors of more than 4.99% of the Shares then issued and outstanding (the
"4.99 Issuance Limitation"). The Second Warrant contains an issuance limitation
prohibiting the Investors from converting those securities to the extent that
such conversion would result in beneficial ownership by the Investors of more
than 9.99% of the Shares then issued and outstanding (the "9.99 Issuance
Limitation" and, together with the 4.99 Issuance Limitation, the "Issuance
Limitations"). The Issuance Limitations may be waived by Investors upon at least
75 days prior notice to the Company. In addition, with respect to the Second
Warrant, the Issuance Limitation shall also automatically become null and void
upon notice to the holder of the occurrence and/or continuance of an event of
default (as defined in and pursuant to the terms of the applicable instrument).
In addition, with respect to the Older Warrants, the Issuance Limitation shall
also automatically become null and void upon the occurrence and/or continuance
of an event of default (as defined in and pursuant to the terms of the
applicable instrument). Calliope is a wholly owned subsidiary of Laurus Master
Fund, Ltd. (In Liquidation) (the "Fund"). The Fund is in liquidation under the
supervision of the Grand Court of the Cayman Islands. The Joint Official
Liquidators ("JOLs") are Chris Johnson and Russell Smith of Johnson Smith
Associates Ltd. The JOLs have discretion over the management of the Fund and the
disposition of its assets, including the securities owned by the Fund and its
subsidiaries reported in this Schedule 13G, as amended. Calliope is a
wholly-owned subsidiary of the Fund. Laurus Capital Management, LLC ("LCM"),
acting through its controlling principals, Eugene Grin and David Grin, provides
day to day investment management services to the Fund and its two feeder funds
concerning their respective assets, including the securities owned by Calliope
reported in this Schedule 13G, as amended, subject to certain oversight and
preapproval rights of the JOLs and LCM's obligations to the Fund under the
Seventh Amended and Restated Investment Management Agreement of April 26, 2007
(as amended, restated, modified and/or supplemented from time to time); all of
the foregoing subject to specific directions otherwise given by the JOLs at
their discretion. PSource is managed by LCM, subject to certain preapproval
rights of the board of directors of PSource. Eugene Grin and David Grin, through
other entities, are the controlling principals of LCM and share voting and
investment power over the securities owned by Calliope (subject to the oversight
and preapproval rights of the JOLs) and PSource reported in this Schedule 13G,
as amended. The JOLs share voting and investment power over the securities owned
by Calliope.
--------------------------------------------------------------------------------
CUSIP No. 518414107
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON: PSource Structured Debt Limited
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |X|
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 CITIZENSHIP OR PLACE OF ORGANIZATION
Guernsey
--------------------------------------------------------------------------------
5 SOLE VOTING POWER
0 shares of Common Stock.*
-----------------------------------------------------------------
NUMBER OF 6 SHARED VOTING POWER
SHARES
BENEFICIALLY 1,879,015shares of Common Stock.*
OWNED BY -----------------------------------------------------------------
EACH 7 SOLE DISPOSITIVE POWER
REPORTING
PERSON 0 shares of Common Stock.*
WITH -----------------------------------------------------------------
8 SHARED DISPOSITIVE POWER
1,879,015 shares of Common Stock.*
--------------------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,879,015 shares of Common Stock.
--------------------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
|X|
--------------------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
9.99%
--------------------------------------------------------------------------------
12 TYPE OF REPORTING PERSON
OO
--------------------------------------------------------------------------------
* Based upon 16,929,953 shares of the common stock, par value $.01 per share
(the "Shares") of Lattice Incorporated, a Delaware corporation (the "Company")
as of November 20, 2009, as disclosed in the Company's Quarterly Report on Form
10Q for the quarterly period ending September 30, 2009. As of December 31, 2009,
PSource Structured Debt Limited("PSource")and Calliope Capital Corporation
("Calliope" and together with PSource, the "Investors") held (i) warrants, as
amended, to purchase up to 600,000 Shares at an exercise price of $1.10 per
share, subject to certain adjustments (the "First Warrant"), (ii) warrants to
purchase 1,458,333 Shares at an exercise price of $0.10 per Share, subject to
certain adjustments (the "Second Warrant"), (iii) warrants to purchase 20,000
Shares at an exercise price of $0.52 per Share, subject to certain adjustments
(the "Third Warrant") and (iv) warrants to purchase 25,000 Shares, exercisable
as follows: 12,500 Shares at an exercise price of $0.99 per Share; 7,500 Shares
at an exercise price of $1.07 per Share; and 5,000 Shares at an exercise price
of $1.24 per Share, each subject to certain adjustments (the "Fourth Warrant",
and together with the First Warrant and the Third Warrant, the "Older
Warrants"). The number of Shares underlying all warrants described herein have
been adjusted to take into account a 10:1 split of the Company's Shares that
occurred on February 4, 2007. Each of the Older Warrants contains an issuance
limitation prohibiting the Investors from converting those securities to the
extent that such conversion would result in beneficial ownership by the
Investors of more than 4.99% of the Shares then issued and outstanding (the
"4.99 Issuance Limitation"). The Second Warrant contains an issuance limitation
prohibiting the Investors from converting those securities to the extent that
such conversion would result in beneficial ownership by the Investors of more
than 9.99% of the Shares then issued and outstanding (the "9.99 Issuance
Limitation" and, together with the 4.99 Issuance Limitation, the "Issuance
Limitations"). The Issuance Limitations may be waived by Investors upon at least
75 days prior notice to the Company. In addition, with respect to the Second
Warrant, the Issuance Limitation shall also automatically become null and void
upon notice to the holder of the occurrence and/or continuance of an event of
default (as defined in and pursuant to the terms of the applicable instrument).
In addition, with respect to the Older Warrants, the Issuance Limitation shall
also automatically become null and void upon the occurrence and/or continuance
of an event of default (as defined in and pursuant to the terms of the
applicable instrument). Calliope is a wholly owned subsidiary of Laurus Master
Fund, Ltd. (In Liquidation) (the "Fund"). The Fund is in liquidation under the
supervision of the Grand Court of the Cayman Islands. The Joint Official
Liquidators ("JOLs") are Chris Johnson and Russell Smith of Johnson Smith
Associates Ltd. The JOLs have discretion over the management of the Fund and the
disposition of its assets, including the securities owned by the Fund and its
subsidiaries reported in this Schedule 13G, as amended. Calliope is a
wholly-owned subsidiary of the Fund. Laurus Capital Management, LLC ("LCM"),
acting through its controlling principals, Eugene Grin and David Grin, provides
day to day investment management services to the Fund and its two feeder funds
concerning their respective assets, including the securities owned by Calliope
reported in this Schedule 13G, as amended, subject to certain oversight and
preapproval rights of the JOLs and LCM's obligations to the Fund under the
Seventh Amended and Restated Investment Management Agreement of April 26, 2007
(as amended, restated, modified and/or supplemented from time to time); all of
the foregoing subject to specific directions otherwise given by the JOLs at
their discretion. PSource is managed by LCM, subject to certain preapproval
rights of the board of directors of PSource. Eugene Grin and David Grin, through
other entities, are the controlling principals of LCM and share voting and
investment power over the securities owned by Calliope (subject to the oversight
and preapproval rights of the JOLs) and PSource reported in this Schedule 13G,
as amended. The JOLs share voting and investment power over the securities owned
by Calliope.
--------------------------------------------------------------------------------
CUSIP No. 518414107
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON: Calliope Capital Corporation
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 57-1237865
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |X|
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
5 SOLE VOTING POWER
0 shares of Common Stock.*
-----------------------------------------------------------------
NUMBER OF 6 SHARED VOTING POWER
SHARES
BENEFICIALLY 1,879,015 shares of Common Stock.*
OWNED BY -----------------------------------------------------------------
EACH 7 SOLE DISPOSITIVE POWER
REPORTING
PERSON 0 shares of Common Stock.*
WITH -----------------------------------------------------------------
8 SHARED DISPOSITIVE POWER
1,879,015 shares of Common Stock.*
--------------------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,879,015 shares of Common Stock.
--------------------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
|X|
--------------------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
9.99%
--------------------------------------------------------------------------------
12 TYPE OF REPORTING PERSON
OO
--------------------------------------------------------------------------------
* Based upon 16,929,953 shares of the common stock, par value $.01 per share
(the "Shares") of Lattice Incorporated, a Delaware corporation (the "Company")
as of November 20, 2009, as disclosed in the Company's Quarterly Report on Form
10Q for the quarterly period ending September 30, 2009. As of December 31, 2009,
PSource Structured Debt Limited("PSource")and Calliope Capital Corporation
("Calliope" and together with PSource, the "Investors") held (i) warrants, as
amended, to purchase up to 600,000 Shares at an exercise price of $1.10 per
share, subject to certain adjustments (the "First Warrant"), (ii) warrants to
purchase 1,458,333 Shares at an exercise price of $0.10 per Share, subject to
certain adjustments (the "Second Warrant"), (iii) warrants to purchase 20,000
Shares at an exercise price of $0.52 per Share, subject to certain adjustments
(the "Third Warrant") and (iv) warrants to purchase 25,000 Shares, exercisable
as follows: 12,500 Shares at an exercise price of $0.99 per Share; 7,500 Shares
at an exercise price of $1.07 per Share; and 5,000 Shares at an exercise price
of $1.24 per Share, each subject to certain adjustments (the "Fourth Warrant",
and together with the First Warrant and the Third Warrant, the "Older
Warrants"). The number of Shares underlying all warrants described herein have
been adjusted to take into account a 10:1 split of the Company's Shares that
occurred on February 4, 2007. Each of the Older Warrants contains an issuance
limitation prohibiting the Investors from converting those securities to the
extent that such conversion would result in beneficial ownership by the
Investors of more than 4.99% of the Shares then issued and outstanding (the
"4.99 Issuance Limitation"). The Second Warrant contains an issuance limitation
prohibiting the Investors from converting those securities to the extent that
such conversion would result in beneficial ownership by the Investors of more
than 9.99% of the Shares then issued and outstanding (the "9.99 Issuance
Limitation" and, together with the 4.99 Issuance Limitation, the "Issuance
Limitations"). The Issuance Limitations may be waived by Investors upon at least
75 days prior notice to the Company. In addition, with respect to the Second
Warrant, the Issuance Limitation shall also automatically become null and void
upon notice to the holder of the occurrence and/or continuance of an event of
default (as defined in and pursuant to the terms of the applicable instrument).
In addition, with respect to the Older Warrants, the Issuance Limitation shall
also automatically become null and void upon the occurrence and/or continuance
of an event of default (as defined in and pursuant to the terms of the
applicable instrument). Calliope is a wholly owned subsidiary of Laurus Master
Fund, Ltd. (In Liquidation) (the "Fund"). The Fund is in liquidation under the
supervision of the Grand Court of the Cayman Islands. The Joint Official
Liquidators ("JOLs") are Chris Johnson and Russell Smith of Johnson Smith
Associates Ltd. The JOLs have discretion over the management of the Fund and the
disposition of its assets, including the securities owned by the Fund and its
subsidiaries reported in this Schedule 13G, as amended. Calliope is a
wholly-owned subsidiary of the Fund. Laurus Capital Management, LLC ("LCM"),
acting through its controlling principals, Eugene Grin and David Grin, provides
day to day investment management services to the Fund and its two feeder funds
concerning their respective assets, including the securities owned by Calliope
reported in this Schedule 13G, as amended, subject to certain oversight and
preapproval rights of the JOLs and LCM's obligations to the Fund under the
Seventh Amended and Restated Investment Management Agreement of April 26, 2007
(as amended, restated, modified and/or supplemented from time to time); all of
the foregoing subject to specific directions otherwise given by the JOLs at
their discretion. PSource is managed by LCM, subject to certain preapproval
rights of the board of directors of PSource. Eugene Grin and David Grin, through
other entities, are the controlling principals of LCM and share voting and
investment power over the securities owned by Calliope (subject to the oversight
and preapproval rights of the JOLs) and PSource reported in this Schedule 13G,
as amended. The JOLs share voting and investment power over the securities owned
by Calliope.
CUSIP No. 518414107
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON: Chris Johnson
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_|
(b) |X|
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
--------------------------------------------------------------------------------
NUMBER OF 5 SOLE VOTING POWER: 0 shares of Common Stock. *
SHARES -------------------------------------------------------------------
BENEFICIALLY 6 SHARED VOTING POWER: 1,879,015 shares of Common Stock. *
OWNED BY -------------------------------------------------------------------
EACH 7 SOLE DISPOSITIVE POWER: 0 shares of Common Stock. *
REPORTING -------------------------------------------------------------------
PERSON 8 SHARES DISPOSITIVE POWER: 1,879,015 shares of Common Stock. *
--------------------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,879,015 shares of Common Stock
--------------------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
|X|
--------------------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
9.99 %
--------------------------------------------------------------------------------
12 TYPE OF REPORTING PERSON
IN
--------------------------------------------------------------------------------
* Based upon 16,929,953 shares of the common stock, par value $.01 per share
(the "Shares") of Lattice Incorporated, a Delaware corporation (the "Company")
as of November 20, 2009, as disclosed in the Company's Quarterly Report on Form
10Q for the quarterly period ending September 30, 2009. As of December 31, 2009,
PSource Structured Debt Limited("PSource")and Calliope Capital Corporation
("Calliope" and together with PSource, the "Investors") held (i) warrants, as
amended, to purchase up to 600,000 Shares at an exercise price of $1.10 per
share, subject to certain adjustments (the "First Warrant"), (ii) warrants to
purchase 1,458,333 Shares at an exercise price of $0.10 per Share, subject to
certain adjustments (the "Second Warrant"), (iii) warrants to purchase 20,000
Shares at an exercise price of $0.52 per Share, subject to certain adjustments
(the "Third Warrant") and (iv) warrants to purchase 25,000 Shares, exercisable
as follows: 12,500 Shares at an exercise price of $0.99 per Share; 7,500 Shares
at an exercise price of $1.07 per Share; and 5,000 Shares at an exercise price
of $1.24 per Share, each subject to certain adjustments (the "Fourth Warrant",
and together with the First Warrant and the Third Warrant, the "Older
Warrants"). The number of Shares underlying all warrants described herein have
been adjusted to take into account a 10:1 split of the Company's Shares that
occurred on February 4, 2007. Each of the Older Warrants contains an issuance
limitation prohibiting the Investors from converting those securities to the
extent that such conversion would result in beneficial ownership by the
Investors of more than 4.99% of the Shares then issued and outstanding (the
"4.99 Issuance Limitation"). The Second Warrant contains an issuance limitation
prohibiting the Investors from converting those securities to the extent that
such conversion would result in beneficial ownership by the Investors of more
than 9.99% of the Shares then issued and outstanding (the "9.99 Issuance
Limitation" and, together with the 4.99 Issuance Limitation, the "Issuance
Limitations"). The Issuance Limitations may be waived by Investors upon at least
75 days prior notice to the Company. In addition, with respect to the Second
Warrant, the Issuance Limitation shall also automatically become null and void
upon notice to the holder of the occurrence and/or continuance of an event of
default (as defined in and pursuant to the terms of the applicable instrument).
In addition, with respect to the Older Warrants, the Issuance Limitation shall
also automatically become null and void upon the occurrence and/or continuance
of an event of default (as defined in and pursuant to the terms of the
applicable instrument). Calliope is a wholly owned subsidiary of Laurus Master
Fund, Ltd. (In Liquidation) (the "Fund"). The Fund is in liquidation under the
supervision of the Grand Court of the Cayman Islands. The Joint Official
Liquidators ("JOLs") are Chris Johnson and Russell Smith of Johnson Smith
Associates Ltd. The JOLs have discretion over the management of the Fund and the
disposition of its assets, including the securities owned by the Fund and its
subsidiaries reported in this Schedule 13G, as amended. Calliope is a
wholly-owned subsidiary of the Fund. Laurus Capital Management, LLC ("LCM"),
acting through its controlling principals, Eugene Grin and David Grin, provides
day to day investment management services to the Fund and its two feeder funds
concerning their respective assets, including the securities owned by Calliope
reported in this Schedule 13G, as amended, subject to certain oversight and
preapproval rights of the JOLs and LCM's obligations to the Fund under the
Seventh Amended and Restated Investment Management Agreement of April 26, 2007
(as amended, restated, modified and/or supplemented from time to time); all of
the foregoing subject to specific directions otherwise given by the JOLs at
their discretion. PSource is managed by LCM, subject to certain preapproval
rights of the board of directors of PSource. Eugene Grin and David Grin, through
other entities, are the controlling principals of LCM and share voting and
investment power over the securities owned by Calliope (subject to the oversight
and preapproval rights of the JOLs) and PSource reported in this Schedule 13G,
as amended. The JOLs share voting and investment power over the securities owned
by Calliope.
CUSIP No. 518414107
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON: Russell Smith
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_|
(b) |X|
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
--------------------------------------------------------------------------------
NUMBER OF 5 SOLE VOTING POWER: 0 shares of Common Stock.*
SHARES -------------------------------------------------------------------
BENEFICIALLY 6 SHARED VOTING POWER: 1,879,015 shares of Common Stock. *
OWNED BY -------------------------------------------------------------------
EACH 7 SOLE DISPOSITIVE POWER: 0 shares of Common Stock. *
REPORTING -------------------------------------------------------------------
PERSON 8 SHARES DISPOSITIVE POWER: 1,879,015 shares of Common Stock. *
--------------------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,879,015 shares of Common Stock
--------------------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
|X|
--------------------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
9.99 %
--------------------------------------------------------------------------------
12 TYPE OF REPORTING PERSON
IN
--------------------------------------------------------------------------------
* Based upon 16,929,953 shares of the common stock, par value $.01 per share
(the "Shares") of Lattice Incorporated, a Delaware corporation (the "Company")
as of November 20, 2009, as disclosed in the Company's Quarterly Report on Form
10Q for the quarterly period ending September 30, 2009. As of December 31, 2009,
PSource Structured Debt Limited("PSource")and Calliope Capital Corporation
("Calliope" and together with PSource, the "Investors") held (i) warrants, as
amended, to purchase up to 600,000 Shares at an exercise price of $1.10 per
share, subject to certain adjustments (the "First Warrant"), (ii) warrants to
purchase 1,458,333 Shares at an exercise price of $0.10 per Share, subject to
certain adjustments (the "Second Warrant"), (iii) warrants to purchase 20,000
Shares at an exercise price of $0.52 per Share, subject to certain adjustments
(the "Third Warrant") and (iv) warrants to purchase 25,000 Shares, exercisable
as follows: 12,500 Shares at an exercise price of $0.99 per Share; 7,500 Shares
at an exercise price of $1.07 per Share; and 5,000 Shares at an exercise price
of $1.24 per Share, each subject to certain adjustments (the "Fourth Warrant",
and together with the First Warrant and the Third Warrant, the "Older
Warrants"). The number of Shares underlying all warrants described herein have
been adjusted to take into account a 10:1 split of the Company's Shares that
occurred on February 4, 2007. Each of the Older Warrants contains an issuance
limitation prohibiting the Investors from converting those securities to the
extent that such conversion would result in beneficial ownership by the
Investors of more than 4.99% of the Shares then issued and outstanding (the
"4.99 Issuance Limitation"). The Second Warrant contains an issuance limitation
prohibiting the Investors from converting those securities to the extent that
such conversion would result in beneficial ownership by the Investors of more
than 9.99% of the Shares then issued and outstanding (the "9.99 Issuance
Limitation" and, together with the 4.99 Issuance Limitation, the "Issuance
Limitations"). The Issuance Limitations may be waived by Investors upon at least
75 days prior notice to the Company. In addition, with respect to the Second
Warrant, the Issuance Limitation shall also automatically become null and void
upon notice to the holder of the occurrence and/or continuance of an event of
default (as defined in and pursuant to the terms of the applicable instrument).
In addition, with respect to the Older Warrants, the Issuance Limitation shall
also automatically become null and void upon the occurrence and/or continuance
of an event of default (as defined in and pursuant to the terms of the
applicable instrument). Calliope is a wholly owned subsidiary of Laurus Master
Fund, Ltd. (In Liquidation) (the "Fund"). The Fund is in liquidation under the
supervision of the Grand Court of the Cayman Islands. The Joint Official
Liquidators ("JOLs") are Chris Johnson and Russell Smith of Johnson Smith
Associates Ltd. The JOLs have discretion over the management of the Fund and the
disposition of its assets, including the securities owned by the Fund and its
subsidiaries reported in this Schedule 13G, as amended. Calliope is a
wholly-owned subsidiary of the Fund. Laurus Capital Management, LLC ("LCM"),
acting through its controlling principals, Eugene Grin and David Grin, provides
day to day investment management services to the Fund and its two feeder funds
concerning their respective assets, including the securities owned by Calliope
reported in this Schedule 13G, as amended, subject to certain oversight and
preapproval rights of the JOLs and LCM's obligations to the Fund under the
Seventh Amended and Restated Investment Management Agreement of April 26, 2007
(as amended, restated, modified and/or supplemented from time to time); all of
the foregoing subject to specific directions otherwise given by the JOLs at
their discretion. PSource is managed by LCM, subject to certain preapproval
rights of the board of directors of PSource. Eugene Grin and David Grin, through
other entities, are the controlling principals of LCM and share voting and
investment power over the securities owned by Calliope (subject to the oversight
and preapproval rights of the JOLs) and PSource reported in this Schedule 13G,
as amended. The JOLs share voting and investment power over the securities owned
by Calliope.
--------------------------------------------------------------------------------
CUSIP No. 518414107
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON:
David Grin
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |X|
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 CITIZENSHIP OR PLACE OF ORGANIZATION
United States and Israel
--------------------------------------------------------------------------------
5 SOLE VOTING POWER
0 shares of Common Stock.*
-----------------------------------------------------------------
NUMBER OF 6 SHARED VOTING POWER
SHARES
BENEFICIALLY 1,879,015 shares of Common Stock.*
OWNED BY -----------------------------------------------------------------
EACH 7 SOLE DISPOSITIVE POWER
REPORTING
PERSON 0 shares of Common Stock.*
WITH -----------------------------------------------------------------
8 SHARED DISPOSITIVE POWER
1,879,015 shares of Common Stock.*
--------------------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,879,015 shares of Common Stock.
--------------------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
|X|
--------------------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
9.99%
--------------------------------------------------------------------------------
12 TYPE OF REPORTING PERSON
IN
--------------------------------------------------------------------------------
* Based upon 16,929,953 shares of the common stock, par value $.01 per share
(the "Shares") of Lattice Incorporated, a Delaware corporation (the "Company")
as of November 20, 2009, as disclosed in the Company's Quarterly Report on Form
10Q for the quarterly period ending September 30, 2009. As of December 31, 2009,
PSource Structured Debt Limited("PSource")and Calliope Capital Corporation
("Calliope" and together with PSource, the "Investors") held (i) warrants, as
amended, to purchase up to 600,000 Shares at an exercise price of $1.10 per
share, subject to certain adjustments (the "First Warrant"), (ii) warrants to
purchase 1,458,333 Shares at an exercise price of $0.10 per Share, subject to
certain adjustments (the "Second Warrant"), (iii) warrants to purchase 20,000
Shares at an exercise price of $0.52 per Share, subject to certain adjustments
(the "Third Warrant") and (iv) warrants to purchase 25,000 Shares, exercisable
as follows: 12,500 Shares at an exercise price of $0.99 per Share; 7,500 Shares
at an exercise price of $1.07 per Share; and 5,000 Shares at an exercise price
of $1.24 per Share, each subject to certain adjustments (the "Fourth Warrant",
and together with the First Warrant and the Third Warrant, the "Older
Warrants"). The number of Shares underlying all warrants described herein have
been adjusted to take into account a 10:1 split of the Company's Shares that
occurred on February 4, 2007. Each of the Older Warrants contains an issuance
limitation prohibiting the Investors from converting those securities to the
extent that such conversion would result in beneficial ownership by the
Investors of more than 4.99% of the Shares then issued and outstanding (the
"4.99 Issuance Limitation"). The Second Warrant contains an issuance limitation
prohibiting the Investors from converting those securities to the extent that
such conversion would result in beneficial ownership by the Investors of more
than 9.99% of the Shares then issued and outstanding (the "9.99 Issuance
Limitation" and, together with the 4.99 Issuance Limitation, the "Issuance
Limitations"). The Issuance Limitations may be waived by Investors upon at least
75 days prior notice to the Company. In addition, with respect to the Second
Warrant, the Issuance Limitation shall also automatically become null and void
upon notice to the holder of the occurrence and/or continuance of an event of
default (as defined in and pursuant to the terms of the applicable instrument).
In addition, with respect to the Older Warrants, the Issuance Limitation shall
also automatically become null and void upon the occurrence and/or continuance
of an event of default (as defined in and pursuant to the terms of the
applicable instrument). Calliope is a wholly owned subsidiary of Laurus Master
Fund, Ltd. (In Liquidation) (the "Fund"). The Fund is in liquidation under the
supervision of the Grand Court of the Cayman Islands. The Joint Official
Liquidators ("JOLs") are Chris Johnson and Russell Smith of Johnson Smith
Associates Ltd. The JOLs have discretion over the management of the Fund and the
disposition of its assets, including the securities owned by the Fund and its
subsidiaries reported in this Schedule 13G, as amended. Calliope is a
wholly-owned subsidiary of the Fund. Laurus Capital Management, LLC ("LCM"),
acting through its controlling principals, Eugene Grin and David Grin, provides
day to day investment management services to the Fund and its two feeder funds
concerning their respective assets, including the securities owned by Calliope
reported in this Schedule 13G, as amended, subject to certain oversight and
preapproval rights of the JOLs and LCM's obligations to the Fund under the
Seventh Amended and Restated Investment Management Agreement of April 26, 2007
(as amended, restated, modified and/or supplemented from time to time); all of
the foregoing subject to specific directions otherwise given by the JOLs at
their discretion. PSource is managed by LCM, subject to certain preapproval
rights of the board of directors of PSource. Eugene Grin and David Grin, through
other entities, are the controlling principals of LCM and share voting and
investment power over the securities owned by Calliope (subject to the oversight
and preapproval rights of the JOLs) and PSource reported in this Schedule 13G,
as amended. The JOLs share voting and investment power over the securities owned
by Calliope.
--------------------------------------------------------------------------------
CUSIP No. 518414107
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON:
Eugene Grin
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |X|
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
5 SOLE VOTING POWER
0 shares of Common Stock.*
-----------------------------------------------------------------
NUMBER OF 6 SHARED VOTING POWER
SHARES
BENEFICIALLY 1,879,015 shares of Common Stock.*
OWNED BY -----------------------------------------------------------------
EACH 7 SOLE DISPOSITIVE POWER
REPORTING
PERSON 0 shares of Common Stock.*
WITH -----------------------------------------------------------------
8 SHARED DISPOSITIVE POWER
1,879,015 shares of Common Stock.*
--------------------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,879,015 shares of Common Stock.
--------------------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
|X|
--------------------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
9.99%
--------------------------------------------------------------------------------
12 TYPE OF REPORTING PERSON
IN
--------------------------------------------------------------------------------
* Based upon 16,929,953 shares of the common stock, par value $.01 per share
(the "Shares") of Lattice Incorporated, a Delaware corporation (the "Company")
as of November 20, 2009, as disclosed in the Company's Quarterly Report on Form
10Q for the quarterly period ending September 30, 2009. As of December 31, 2009,
PSource Structured Debt Limited("PSource")and Calliope Capital Corporation
("Calliope" and together with PSource, the "Investors") held (i) warrants, as
amended, to purchase up to 600,000 Shares at an exercise price of $1.10 per
share, subject to certain adjustments (the "First Warrant"), (ii) warrants to
purchase 1,458,333 Shares at an exercise price of $0.10 per Share, subject to
certain adjustments (the "Second Warrant"), (iii) warrants to purchase 20,000
Shares at an exercise price of $0.52 per Share, subject to certain adjustments
(the "Third Warrant") and (iv) warrants to purchase 25,000 Shares, exercisable
as follows: 12,500 Shares at an exercise price of $0.99 per Share; 7,500 Shares
at an exercise price of $1.07 per Share; and 5,000 Shares at an exercise price
of $1.24 per Share, each subject to certain adjustments (the "Fourth Warrant",
and together with the First Warrant and the Third Warrant, the "Older
Warrants"). The number of Shares underlying all warrants described herein have
been adjusted to take into account a 10:1 split of the Company's Shares that
occurred on February 4, 2007. Each of the Older Warrants contains an issuance
limitation prohibiting the Investors from converting those securities to the
extent that such conversion would result in beneficial ownership by the
Investors of more than 4.99% of the Shares then issued and outstanding (the
"4.99 Issuance Limitation"). The Second Warrant contains an issuance limitation
prohibiting the Investors from converting those securities to the extent that
such conversion would result in beneficial ownership by the Investors of more
than 9.99% of the Shares then issued and outstanding (the "9.99 Issuance
Limitation" and, together with the 4.99 Issuance Limitation, the "Issuance
Limitations"). The Issuance Limitations may be waived by Investors upon at least
75 days prior notice to the Company. In addition, with respect to the Second
Warrant, the Issuance Limitation shall also automatically become null and void
upon notice to the holder of the occurrence and/or continuance of an event of
default (as defined in and pursuant to the terms of the applicable instrument).
In addition, with respect to the Older Warrants, the Issuance Limitation shall
also automatically become null and void upon the occurrence and/or continuance
of an event of default (as defined in and pursuant to the terms of the
applicable instrument). Calliope is a wholly owned subsidiary of Laurus Master
Fund, Ltd. (In Liquidation) (the "Fund"). The Fund is in liquidation under the
supervision of the Grand Court of the Cayman Islands. The Joint Official
Liquidators ("JOLs") are Chris Johnson and Russell Smith of Johnson Smith
Associates Ltd. The JOLs have discretion over the management of the Fund and the
disposition of its assets, including the securities owned by the Fund and its
subsidiaries reported in this Schedule 13G, as amended. Calliope is a
wholly-owned subsidiary of the Fund. Laurus Capital Management, LLC ("LCM"),
acting through its controlling principals, Eugene Grin and David Grin, provides
day to day investment management services to the Fund and its two feeder funds
concerning their respective assets, including the securities owned by Calliope
reported in this Schedule 13G, as amended, subject to certain oversight and
preapproval rights of the JOLs and LCM's obligations to the Fund under the
Seventh Amended and Restated Investment Management Agreement of April 26, 2007
(as amended, restated, modified and/or supplemented from time to time); all of
the foregoing subject to specific directions otherwise given by the JOLs at
their discretion. PSource is managed by LCM, subject to certain preapproval
rights of the board of directors of PSource. Eugene Grin and David Grin, through
other entities, are the controlling principals of LCM and share voting and
investment power over the securities owned by Calliope (subject to the oversight
and preapproval rights of the JOLs) and PSource reported in this Schedule 13G,
as amended. The JOLs share voting and investment power over the securities owned
by Calliope.
Item 1(a). Name of Issuer: LATTICE INCORPORATED
Item 1(b). Address of Issuer's Principal Executive Offices:
7150 N. Park Drive
Suite 500
Pennsauken, NJ 08109
Item 2(a). Name of Person Filing: Laurus Master Fund, Ltd.(In Liquidation)*
This Schedule 13G, as amended, is also filed on behalf of Laurus Capital
Management, LLC, a Delaware limited liability company, Calliope Capital
Corporation, a Delaware Corporation, PSource Structured Debt Limited, a
closed-ended company incorporated with limited liability in Guernsey, Chris
Johnson, Russell Smith, Eugene Grin and David Grin. Calliope Capital Corporation
is a wholly owned subsidiary of Laurus Master Fund, Ltd. (in Liquidation).
Laurus Master Fund, Ltd. (in Liquidation) is in official liquidation under the
supervision of the Grand Court of the Cayman Islands. The Joint Official
Liquidators are Chris Johnson and Russell Smith of Johnson Smith Associates Ltd.
The Joint Official Liquidators have discretion over the management of Laurus
Master Fund, Ltd. (in Liquidation) and the disposition of its assets, including
the securities owned by Laurus Master Fund, Ltd. (in Liquidation) and its
subsidiaries reported in this Schedule 13G, as amended. Laurus Capital
Management, LLC, acting through its controlling principals, Eugene Grin and
David Grin, provides day to day investment management services to Laurus Master
Fund, Ltd. (in Liquidation) and its two feeder funds concerning their respective
assets, including the securities owned by Calliope Capital Corporation, reported
in this Schedule 13G, as amended, subject to the oversight and preapproval
rights of the Joint Official Liquidators and LCM's obligations to Laurus Master
Fund, Ltd. (in Liquidation) under the Seventh Amended and Restated Investment
Management Agreement of April 26, 2007, as amended, restated, modified and/or
supplemented); all of the foregoing subject to specific directions otherwise
given by the Joint Official Liquidators at their discretion. PSource Structured
Debt Limited is managed by Laurus Capital Management, LLC, subject to certain
preapproval rights of the board of directors of PSource Structured Debt Limited.
Eugene Grin and David Grin, through other entities, are the controlling
principals of Laurus Capital Management, LLC and share voting and investment
power over the shares owned by Calliope Capital Corporation (subject to the
oversight and preapproval rights of the Joint Official Liquidators) and PSource
Structured Debt Limited, reported in this Schedule 13G, as amended. The Joint
Official Liquidators share voting and investment power over the securities owned
by Calliope. Information related to each of Laurus Capital Management, LLC,
PSource Structured Debt Limited, Calliope Capital Corporation, Chris Johnson,
Russell Smith, Eugene Grin and David Grin is set forth on Appendix A hereto.
Item 2(b). Address of Principal Business Office or if none, Residence:
c/o Laurus Capital Management, LLC,
335 Madison Avenue, 10th Floor,
New York, NY 10017
Item 2(c). Citizenship: Cayman Islands
Item 2(d). Title of Class of Securities: Common Stock
Item 2(e). CUSIP Number: 518414107
Item 3. Not Applicable
Item 4. Ownership:
(a) Amount Beneficially Owned: 1,879,015 shares of Common Stock *
(b) Percent of Class: 9.99%*
(c) Number of shares as to which such person has:
(i) sole power to vote or to direct the vote: 0 shares of
Common Stock *
(ii) shared power to vote or to direct the vote: 1,879,015
shares of Common Stock *
(iii) sole power to dispose or to direct the disposition of: 0
shares of Common Stock *
(iv) shared power to dispose or to direct the disposition of:
1,879,015 shares of Common Stock *
Item 5. Ownership of Five Percent or Less of a Class: Not applicable
Item 6. Ownership of More than Five Percent on Behalf of Another Person:
Not applicable
Item 7. Identification and Classification of Subsidiary Which Acquired the
Securities: Not applicable
Item 8. Identification and Classification of Members of the Group: Not
applicable
Item 9. Notice of Dissolution of Group: Not applicable
Item 10. Certification:
By signing below I certify that, to the best of my knowledge and
belief, the securities referred to above were not acquired and are not held for
the purpose of or with the effect of changing or influencing the control of the
issuer of the securities and were not acquired and are not held in connection
with or as a participant in any transaction having that purpose or effect.
------------
* Based upon 16,929,953 shares of the common stock, par value $.01 per share
(the "Shares") of Lattice Incorporated, a Delaware corporation (the "Company")
as of November 20, 2009, as disclosed in the Company's Quarterly Report on Form
10Q for the quarterly period ending September 30, 2009. As of December 31, 2009,
PSource Structured Debt Limited("PSource")and Calliope Capital Corporation
("Calliope" and together with PSource, the "Investors") held (i) warrants, as
amended, to purchase up to 600,000 Shares at an exercise price of $1.10 per
share, subject to certain adjustments (the "First Warrant"), (ii) warrants to
purchase 1,458,333 Shares at an exercise price of $0.10 per Share, subject to
certain adjustments (the "Second Warrant"), (iii) warrants to purchase 20,000
Shares at an exercise price of $0.52 per Share, subject to certain adjustments
(the "Third Warrant") and (iv) warrants to purchase 25,000 Shares, exercisable
as follows: 12,500 Shares at an exercise price of $0.99 per Share; 7,500 Shares
at an exercise price of $1.07 per Share; and 5,000 Shares at an exercise price
of $1.24 per Share, each subject to certain adjustments (the "Fourth Warrant",
and together with the First Warrant and the Third Warrant, the "Older
Warrants"). The number of Shares underlying all warrants described herein have
been adjusted to take into account a 10:1 split of the Company's Shares that
occurred on February 4, 2007. Each of the Older Warrants contains an issuance
limitation prohibiting the Investors from converting those securities to the
extent that such conversion would result in beneficial ownership by the
Investors of more than 4.99% of the Shares then issued and outstanding (the
"4.99 Issuance Limitation"). The Second Warrant contains an issuance limitation
prohibiting the Investors from converting those securities to the extent that
such conversion would result in beneficial ownership by the Investors of more
than 9.99% of the Shares then issued and outstanding (the "9.99 Issuance
Limitation" and, together with the 4.99 Issuance Limitation, the "Issuance
Limitations"). The Issuance Limitations may be waived by Investors upon at least
75 days prior notice to the Company. In addition, with respect to the Second
Warrant, the Issuance Limitation shall also automatically become null and void
upon notice to the holder of the occurrence and/or continuance of an event of
default (as defined in and pursuant to the terms of the applicable instrument).
In addition, with respect to the Older Warrants, the Issuance Limitation shall
also automatically become null and void upon the occurrence and/or continuance
of an event of default (as defined in and pursuant to the terms of the
applicable instrument). Calliope is a wholly owned subsidiary of Laurus Master
Fund, Ltd. (In Liquidation) (the "Fund"). The Fund is in liquidation under the
supervision of the Grand Court of the Cayman Islands. The Joint Official
Liquidators ("JOLs") are Chris Johnson and Russell Smith of Johnson Smith
Associates Ltd. The JOLs have discretion over the management of the Fund and the
disposition of its assets, including the securities owned by the Fund and its
subsidiaries reported in this Schedule 13G, as amended. Calliope is a
wholly-owned subsidiary of the Fund. Laurus Capital Management, LLC ("LCM"),
acting through its controlling principals, Eugene Grin and David Grin, provides
day to day investment management services to the Fund and its two feeder funds
concerning their respective assets, including the securities owned by Calliope
reported in this Schedule 13G, as amended, subject to certain oversight and
preapproval rights of the JOLs and LCM's obligations to the Fund under the
Seventh Amended and Restated Investment Management Agreement of April 26, 2007
(as amended, restated, modified and/or supplemented from time to time); all of
the foregoing subject to specific directions otherwise given by the JOLs at
their discretion. PSource is managed by LCM, subject to certain preapproval
rights of the board of directors of PSource. Eugene Grin and David Grin, through
other entities, are the controlling principals of LCM and share voting and
investment power over the securities owned by Calliope (subject to the oversight
and preapproval rights of the JOLs) and PSource reported in this Schedule 13G,
as amended. The JOLs share voting and investment power over the securities owned
by Calliope.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
February 12, 2010
-------------------------------
Date
Laurus Master Fund, Ltd.
(in Liquidation)
/s/ Russell Smith
-----------------------------------
Russell Smith
Joint Official Liquidator (for the
account of Laurus Master Fund, Ltd.
and with no personal liability)
February 12, 2010
APPENDIX A
A. Name: Laurus Capital Management, LLC, a
Delaware limited liability company
Business Address: 335 Madison Avenue, 10th Floor
New York, New York 10017
Place of Organization: Delaware
B. Name: Calliope Capital Corporation, a
Delaware corporation
Business Address: 335 Madison Avenue, 10th Floor
New York, New York 10017
Place of Organization: Delaware
C. Name: PSource Structured Debt Limited, closed
ended company incorporated with limited
liability in Guernsey
Business Address: 335 Madison Avenue, 10th Floor
New York, New York 10017
Place of Organization: Guernsey
D. Name: Eugene Grin
Business Address: 335 Madison, 10th Floor
New York, New York 10022
Principal Occupation: Principal of Laurus Capital Management, LLC
Citizenship: United States
E. Name: David Grin
Business Address: 335 Madison Avenue, 10th Floor
New York, New York 10017
Principal Occupation: Principal of Laurus Capital Management, LLC
Citizenship: United States and Israel
F. Name: Chris Johnson
Business Address: Elizabethan Square, 80 Shedden Road,
George Town, Grand
Cayman, Cayman Islands KY1-1104
Principal Occupation: Managing Director, Johnson Smith
Associates Ltd.
Citizenship: Cayman Islands
L. Name: Russell Smith
Business Address: Elizabethan Square, 80 Shedden Road,
George Town, Grand Cayman,
Cayman Islands KY1-1104
Principal Occupation: Director, Johnson Smith Associates Ltd.
Citizenship: Cayman Islands
Each of Laurus Capital Management, LLC, Calliope Capital Corporation, PSource
Structured Debt Limited, Chris Johnson, Russell Smith, David Grin and Eugene
Grin hereby agrees, by their execution below, that the Schedule 13G, as amended,
to which this Appendix A is attached is filed on behalf of each of them,
respectively.
Calliope Capital Corporation
PSource Structured Debt Limited
Laurus Capital Management, LLC
By: Laurus Capital Management, LLC
Individually and as investment manager
/s/ Eugene Grin
-------------------------------
Eugene Grin
Principal
February 12, 2010
/s/ Chris Johnson
-----------------------------------------
Chris Johnson, on his individual behalf
February 12, 2010
/s/ Russell Smith
-----------------------------------------
Russell Smith, on his individual behalf
February 12, 2010
/s/ David Grin
-------------------------------
David Grin, on his individual behalf
February 12, 2010
/s/ Eugene Grin
-------------------------------
Eugene Grin, on his individual behalf
February 12, 2010