Utah
|
87-0627421
|
(State
or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S.
Employer Identification No.)
|
20374 Seneca Meadows
Parkway, Germantown, MD
|
20876
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
Large
accelerated filer o
|
Accelerated
filer o
|
|
Non-accelerated
filer o
|
Smaller
reporting company x
|
|
(Do
not check if a smaller reporting company)
|
Page
|
|
EXPLANATORY
NOTE
|
2 |
PART
I. FINANCIAL INFORMATION
|
3
|
Item
1. Financial Statements (Unaudited)
|
3
|
Condensed
Consolidated Balance Sheets:
|
3
|
June
30, 2009 and December 31, 2008
|
|
Condensed
Consolidated Statements of Operations and Comprehensive
Income:
|
4
|
Three
And Six Months Ended June 30, 2009 and 2008
|
|
Condensed
Consolidated Statement of Equity
|
5
|
January
1, 2009 through June 30, 2009
|
|
Condensed
Consolidated Statements of Cash Flows:
|
6
|
Six
Months Ended June 30, 2009 and 2008
|
|
Notes
to Unaudited Condensed Consolidated Financial Statements:
|
8
|
June
30, 2009
|
|
Item
2. Management’s Discussion and Analysis
|
21
|
Item
3. Quantitative and Qualitative Disclosures About Market
Risk.
|
30
|
Item
4. Controls and Procedures
|
31
|
PART
II. OTHER INFORMATION
|
31
|
Item
1. Legal Proceedings
|
31
|
Item
1A. Risk Factors
|
31
|
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
|
31
|
Item
3. Defaults Upon Senior Securities
|
32
|
Item
4. Submission of Matters to a Vote of Security Holders
|
32
|
Item
5. Other Information
|
32
|
Item
6. Exhibits
|
33
|
(Unaudited)
June
30,
|
December
31,
|
|||||||
ASSETS
|
2009
|
2008
|
||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$
|
120,173
|
$
|
168,492
|
||||
Accounts
receivable, net
|
782,283
|
836,336
|
||||||
Inventories
|
1,374,493
|
1,733,940
|
||||||
Other
current assets
|
163,985
|
230,539
|
||||||
Current
assets from discontinued operations
|
-
|
476,459
|
||||||
Total
current assets
|
2,440,934
|
3,445,766
|
||||||
Property
and equipment, net
|
321,273
|
403,593
|
||||||
Other
assets:
|
||||||||
Marketable
securities
|
367,653
|
397,403
|
||||||
Deferred
financing costs, net
|
340,588
|
432,136
|
||||||
Goodwill
and other intangible assets, net
|
15,016,632
|
15,137,469
|
||||||
Other
assets
|
95,179
|
98,807
|
||||||
Other
assets from discontinued operations
|
-
|
6,593,169
|
||||||
Total
other assets
|
15,820,052
|
22,658,984
|
||||||
Total
Assets
|
$
|
18,582,259
|
$
|
26,508,343
|
||||
LIABILITIES
AND EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable and accrued liabilities
|
$
|
4,665,453
|
$
|
4,557,257
|
||||
Line
of credit
|
714,020
|
574,005
|
||||||
Other
current liabilities
|
252,563
|
278,033
|
Current
Liabilities from discontinued operations
|
-
|
13,450,362
|
||||||
Total
current liabilities
|
5,632,036
|
18,859,657
|
||||||
Long-term
liabilities:
|
||||||||
Convertible
debentures, net of debt discounts of $619,050 and $825,585,
respectively
|
986,973
|
1,311,065
|
||||||
Derivative
liability
|
1,219,775
|
2,573,126
|
||||||
Deferred
lease liability and other
|
50,791
|
50,791
|
||||||
Total
long-term liabilities
|
2,257,539
|
3,934,982
|
||||||
Commitments
and contingencies
|
-
|
-
|
||||||
Equity
|
||||||||
Preferred
stock, par value $.001 per share; 15,000,000 shares authorized; none
issued and outstanding at June 30, 2009 and December 31,
2008
|
-
|
-
|
||||||
Common
stock, par value $.001 per share; 155,000,000 shares authorized;
95,833,871 and 87,525,495 shares issued and outstanding at June
30, 2009 and December 31, 2008, respectively
|
95,834
|
87,526
|
||||||
Additional
paid-in-capital
|
119,096,381
|
118,197,450
|
||||||
Accumulated
deficit
|
(108,499,531
|
)
|
(114,801,318
|
)
|
||||
Accumulated
comprehensive loss
|
-
|
(32,750
|
)
|
|||||
Total
stockholders’ equity
|
10,692,684
|
3,450,908
|
||||||
Non-controlling
interest
|
-
|
262,795
|
||||||
Total
equity
|
10,692,684
|
3,713,703
|
||||||
Total
Liabilities and Equity
|
$
|
18,582,259
|
$
|
26,508,343
|
For
The Three Months Ended
June
30,
|
For
The Six Months Ended
June
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Revenues,
net:
|
||||||||||||||||
Product
|
$
|
2,098,640
|
$
|
3,781,214
|
$
|
4,017,067
|
$
|
6,983,451
|
||||||||
Recurring
|
1,011,729
|
826,917
|
1,991,254
|
1,662,246
|
||||||||||||
Total
Revenue
|
3,110,369
|
4,608,131
|
6,008,321
|
8,645,697
|
||||||||||||
Cost
of Sales:
|
||||||||||||||||
Product
|
1,032,183
|
2,265,073
|
2,108,822
|
4,723,851
|
||||||||||||
Recurring
|
303,513
|
422,680
|
609,347
|
858,063
|
||||||||||||
Total
Cost of Sales
|
1,335,696
|
2,687,753
|
2,718,169
|
5,581,914
|
||||||||||||
Gross
Profit
|
1,774,673
|
1,920,378
|
3,290,152
|
3,063,783
|
||||||||||||
Operating
Expenses:
|
||||||||||||||||
Research
and Development
|
222,316
|
492,689
|
498,278
|
1,157,811
|
||||||||||||
Selling,
General and Administrative
|
1,737,376
|
2,619,897
|
3,357,168
|
5,145,340
|
||||||||||||
Impairment
write-down in investment in affiliate
|
-
|
380,000
|
-
|
380,000
|
||||||||||||
Stock
Based Compensation
|
83,810
|
206,432
|
177,620
|
510,130
|
||||||||||||
Depreciation
and Amortization
|
93,683
|
107,577
|
180,517
|
215,154
|
||||||||||||
Total
Operating Expense
|
2,137,185
|
3,806,595
|
4,213,583
|
7,408,435
|
||||||||||||
Loss
from Operations
|
(362,512
|
)
|
(1,886,217
|
)
|
(923,431
|
)
|
(4,344,652
|
)
|
||||||||
Other
Income (Expenses):
|
||||||||||||||||
Financing
Expense, net
|
(212,720
|
)
|
(152,832
|
)
|
(481,536
|
)
|
(1,948,007
|
)
|
||||||||
Gain
(Loss) on Derivative Liability
|
1,175,573
|
(1,018,453
|
)
|
1,439,274
|
(1,018,453
|
)
|
||||||||||
(Loss)
on Sale of Investment
|
-
|
-
|
(29,371
|
)
|
-
|
|||||||||||
Total
Other Income (Expenses)
|
962,853
|
(1,171,285
|
)
|
928,367
|
(2,966,460
|
)
|
||||||||||
Income
(Loss) Before Provision for Income Taxes
|
600,341
|
(3,057,502
|
)
|
4,936
|
(7,311,112
|
)
|
||||||||||
Provision
for Income Taxes
|
-
|
-
|
-
|
-
|
||||||||||||
Income
(Loss) from Continuing Operations
|
$
|
600,341
|
$
|
(3,057,502
|
)
|
$
|
4,936
|
$
|
(7,311,112
|
)
|
||||||
Discontinued
Operations
|
||||||||||||||||
Income
(Loss) from Discontinued Operations
|
(123,438
|
)
|
(1,174,339
|
)
|
(635,735
|
)
|
(2,041,760
|
)
|
||||||||
Gain
on Deconsolidation
|
6,932,586
|
-
|
6,932,586
|
-
|
||||||||||||
Net
Income (Loss)
|
$
|
7,409,489
|
|
$
|
(4,231,841
|
)
|
$
|
6,301,787
|
$
|
(9,352,872
|
)
|
|||||
Net
income (loss) per share:
|
||||||||||||||||
Income
(loss) per share from continuing operations - basic
|
$
|
0.01
|
$
|
(0.04
|
)
|
$
|
0.00
|
$
|
(0.10
|
)
|
||||||
Income
(loss) per share from continuing operations - diluted
|
$
|
0.01
|
$
|
(0.04
|
)
|
$
|
0.00
|
$
|
(0.10
|
)
|
||||||
Income
(loss) per share from discontinued operations – basic
|
$
|
0.07
|
$
|
(0.01
|
)
|
$
|
0.07
|
$
|
(0.03
|
)
|
||||||
Income
(loss) per share from discontinued operations – diluted
|
$
|
0.07
|
$
|
(0.01
|
)
|
$
|
0.07
|
$
|
(0.03
|
)
|
||||||
Net
income (loss) per share – basic
|
$
|
0.08
|
$
|
(0.05
|
)
|
$
|
0.07
|
$
|
(0.13
|
)
|
||||||
Net
income (loss) per share - diluted
|
$
|
0.08
|
$
|
(0.05
|
)
|
$
|
0.07
|
$
|
(0.13
|
)
|
||||||
Weighted
Average Common Shares Outstanding - basic
|
94,765,021
|
77,319,806
|
92,550,245
|
74,583,911
|
||||||||||||
Weighted
Average Common Shares Outstanding - diluted
|
94,765,021
|
77,319,806
|
92,550,245
|
74,583,911
|
||||||||||||
Comprehensive
Income (Loss):
|
||||||||||||||||
Net
Income (Loss)
|
$
|
7,409,489
|
$
|
(4,231,841
|
)
|
$
|
6,301,787
|
$
|
(9,352,872
|
)
|
||||||
Unrecognized
Gain (Loss) on Investment
|
-
|
(1,019,237
|
)
|
32,750
|
(1,558,204
|
)
|
||||||||||
Comprehensive
Income (Loss)
|
$
|
7,409,489
|
$
|
(5,251,078
|
)
|
$
|
6,334,537
|
$
|
(10,911,076
|
)
|
Preferred
Shares
|
Preferred
Stock
Amount
|
Common
Shares
|
Common
Stock
Amount
|
Additional
Paid
in
Capital
|
Accumulated
Deficit
|
Comprehensive
Income (Loss)
|
Noncontrolling
Interest
|
Total
|
||||||||||||||||||||||||||||
Balance
at January 1, 2009
|
87,525,495
|
$
|
87,526
|
$
|
118,197,450
|
$
|
(114,801,318
|
)
|
$
|
(32,750
|
)
|
$
|
262,795
|
$
|
3,713,703
|
|||||||||||||||||||||
Shares
issued in exchange for services rendered at approximately $0.12 per
share
|
-
|
-
|
83,333
|
83
|
9,917
|
-
|
-
|
-
|
10,000
|
|||||||||||||||||||||||||||
Shares
issued for warrants exercised at $0.09 per share
|
-
|
-
|
50,100
|
50
|
4,545
|
-
|
-
|
-
|
4,595
|
|||||||||||||||||||||||||||
Shares
issued in exchange for convertible debentures
|
-
|
-
|
8,174,943
|
8,175
|
714,339
|
-
|
-
|
-
|
722,514
|
|||||||||||||||||||||||||||
Stock-based
compensation expense related to employee stock options
|
-
|
-
|
-
|
-
|
167,620
|
-
|
-
|
167,620
|
||||||||||||||||||||||||||||
Stock-based
compensation expense related to the re-pricing of investor
warrants
|
-
|
-
|
-
|
-
|
2,510
|
-
|
-
|
-
|
2,510
|
|||||||||||||||||||||||||||
Unrealized
Gain on available for sale securities
|
-
|
-
|
-
|
-
|
-
|
-
|
32,750
|
-
|
32,750
|
|||||||||||||||||||||||||||
Reclass
of non-controlling interest
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(262,795
|
)
|
(262,795
|
)
|
|||||||||||||||||||||||||
Income
from discontinued operations
|
-
|
-
|
-
|
-
|
-
|
6,296,851
|
-
|
-
|
6,296,851
|
|||||||||||||||||||||||||||
Income
from continuing operations
|
-
|
-
|
-
|
-
|
-
|
4,936
|
-
|
-
|
4,936
|
|||||||||||||||||||||||||||
Balance
at June 30, 2009
|
-
|
$
-
|
95,833,871
|
$
|
95,834
|
$
|
119,096,381
|
$
|
(108,499,531
|
)
|
$
|
-
|
$
|
-
|
$
|
10,692,684
|
For
the Six Months
Ended
June 30,
|
||||||||
2009
|
2008
|
|||||||
Increase
(Decrease) In Cash and Equivalents
|
||||||||
Cash
Flows from Operating Activities:
|
||||||||
Net
income (loss) attributable to common shareholders
|
$
|
6,301,787
|
$
|
(9,352,872
|
)
|
|||
Net
(income) loss from discontinued operations
|
(6,296,851
|
)
|
2,041,760
|
|||||
Net
income (loss) from continuing operations
|
4,936
|
(7,311,112
|
)
|
|||||
Adjustments
to reconcile net income (loss) from operations to cash provided by (used
in) operating activities:
|
||||||||
Amortization
of debt discounts and financing costs
|
409,006
|
12,794
|
||||||
Loss
on sale of investment
|
29,371
|
-
|
||||||
(Gain)
loss on derivative liability
|
(1,439,274
|
)
|
1,018,453
|
|||||
Impairment
write-down on goodwill
|
-
|
380,000
|
||||||
Stock
based compensation
|
177,620
|
769,037
|
||||||
Fair
value of issuance of warrants and re-pricing (financing
expense)
|
2,510
|
1,837,612
|
||||||
Depreciation
and amortization
|
180,517
|
215,154
|
||||||
Increase
/ decrease in:
|
||||||||
Accounts
receivable, trade and other
|
671,371
|
769,325
|
||||||
Inventories
|
359,447
|
290,436
|
||||||
Prepaid
expenses and deposits
|
63,975
|
(125,756
|
)
|
|||||
Deferred
revenue
|
(61,095
|
)
|
(29,335
|
)
|
||||
Other
Assets
|
82,840
|
|
274,121
|
|||||
Accounts
payable, accrued expenses, net
|
(369,354
|
)
|
539,110
|
|||||
Cash
provided by (used in) continuing operations
|
111,870
|
(1,360,161
|
)
|
|||||
Cash
used in discontinued operations
|
(287,997
|
)
|
(761,944
|
)
|
||||
Net
Cash Used In Operating Activities
|
(176,127
|
)
|
(2,122,105
|
)
|
||||
Cash
Flows From Investing Activities:
|
||||||||
Purchase
of property and equipment
|
(2,675
|
)
|
(14,375
|
)
|
||||
Advances
to unconsolidated subsidiary
|
(305,539
|
)
|
-
|
|||||
Proceeds
from sale of investment
|
33,129
|
-
|
||||||
Cash
used in continuing operations
|
(275,085
|
)
|
(14,375
|
)
|
||||
Cash
used in discontinued operations
|
(5,979
|
)
|
(766,586
|
)
|
||||
Net
Cash Used In Investing Activities
|
(281,064
|
)
|
(780,961
|
)
|
||||
Cash
Flows From Financing Activities:
|
||||||||
Proceeds
from issuance of convertible debentures
|
-
|
1,500,000
|
||||||
Proceeds
from sale of common stock, net of costs and fees
|
-
|
1,500,000
|
||||||
Proceeds
from issuance of notes payable
|
-
|
400,000
|
||||||
Proceeds
from line of credit
|
140,015
|
-
|
||||||
Financing
fees
|
(25,000
|
)
|
(462,511
|
)
|
||||
Repayment
of notes payable
|
-
|
(1,500,000
|
)
|
|||||
Proceeds
from the exercise of warrants
|
4,595
|
-
|
||||||
Repayment
of capital lease and other
|
(4,714
|
)
|
(3,422
|
)
|
||||
Cash
provided by continuing operations
|
114,896
|
1,434,067
|
||||||
Cash
provided by discontinued operations
|
293,976
|
64,204
|
||||||
Net
Cash Provided By Financing Activities
|
408,872
|
1,498,271
|
||||||
Net
(Decrease) In Cash and Equivalents
|
(48,319
|
)
|
(1,404,795
|
)
|
||||
Cash
and cash equivalents at the beginning of the period
|
168,492
|
1,629,583
|
||||||
Cash
and cash equivalents at the end of the period
|
$
|
120,173
|
$
|
224,788
|
See
accompanying notes to the unaudited condensed consolidated financial
statements
|
For
the Six Months Ended
June
30,
|
||||||||
2009
|
2008
|
|||||||
Supplemental
Disclosures of Cash Flow Information:
|
||||||||
Cash
transactions:
|
||||||||
Cash
paid during the period for financing expenses
|
$
|
114,739
|
$
|
175,532
|
||||
Income
taxes paid
|
-
|
-
|
||||||
Non-cash
transactions:
|
||||||||
Stock
based compensation to employees and consultants in exchange for
services
|
$
|
170,130
|
$
|
769,037
|
||||
Fair
value of issuance of warrants and re-pricing (financing
expense)
|
2,510
|
1,837,612
|
||||||
(Gain)
loss on derivative liability
|
(1,439,274
|
)
|
1,018,453
|
|||||
Impairment
write-down on goodwill
|
-
|
380,000
|
||||||
Amortization
of debt discount on convertible debentures and financing
costs
|
409,006
|
12,794
|
||||||
Accrued
interest re classified as convertible debenture principal
|
191,887
|
-
|
||||||
Value
of common stock issued in exchange for conversion of debenture
principal
|
722,514
|
-
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
|
Residual
Value
|
Weighted
Average
Amortization
Period
(Years)
|
||||||||||||||||
Amortized
Identifiable Intangible Assets:
|
||||||||||||||||||||
Subscriber
lists - EthoStream
|
$
|
2,900,000
|
$
|
(432,986
|
)
|
$
|
2,467,014
|
$
|
-
|
12.0
|
||||||||||
Total
Amortized Identifiable Intangible Assets
|
2,900,000
|
(432,986
|
)
|
2,467,014
|
-
|
9.6
|
||||||||||||||
Goodwill
- EthoStream
|
8,796,439
|
(2,000,000
|
)
|
6,796,439
|
-
|
|||||||||||||||
Goodwill
- SSI
|
5,874,016
|
-
|
5,874,016
|
-
|
||||||||||||||||
Total
|
$
|
17,570,455
|
$
|
(2,432,985
|
)
|
$
|
15,137,469
|
$
|
-
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
|
Residual
Value
|
Weighted
Average
Amortization
Period
(Years)
|
||||||||||||||||
Amortized
Identifiable Intangible Assets:
|
||||||||||||||||||||
Subscriber
lists - EthoStream
|
$
|
2,900,000
|
$
|
(553,823
|
)
|
$
|
2,346,177
|
$
|
-
|
12.0
|
||||||||||
Total
Amortized Identifiable Intangible Assets
|
2,900,000
|
(553,823
|
)
|
2,346,177
|
-
|
12.0
|
||||||||||||||
Goodwill
- EthoStream
|
8,796,439
|
(2,000,000
|
)
|
6,796,439
|
-
|
|||||||||||||||
Goodwill
- SSI
|
5,874,016
|
-
|
5,874,016
|
-
|
||||||||||||||||
Total
|
$
|
17,570,455
|
$
|
(2,553,823
|
)
|
$
|
15,016,632
|
$
|
-
|
June
30,
2009
|
December
31,
2008
|
|||||||
Accounts
receivable (factored)
|
$
|
1,603,973
|
$
|
1,961,535
|
||||
Advances
from factor
|
(739,277
|
)
|
(1,075,879
|
)
|
||||
Due
from factor
|
864,696
|
885,656
|
||||||
Accounts
receivable (non-factored)
|
93,916
|
127,080
|
||||||
Allowance
for doubtful accounts
|
(176,329
|
)
|
(176,400
|
)
|
||||
Total
|
$
|
782,283
|
$
|
836,336
|
June
30,
2009
|
December
31,
2008
|
|||||||
Raw
Materials
|
$
|
751,357
|
$
|
843,978
|
||||
Finished
Goods
|
823,136
|
1,089,962
|
||||||
Reserve
for Obsolescence
|
(200,000
|
)
|
(200,000
|
)
|
||||
Total
|
$
|
1,374,493
|
$
|
1,733,940
|
June
30,
2009
|
December
31,
2008
|
|||||||
Telecommunications
and related equipment
|
$
|
117,637
|
$
|
117,493
|
||||
Development
Test Equipment
|
153,484
|
153,484
|
||||||
Computer
Software
|
160,894
|
160,894
|
||||||
Leasehold
Improvements
|
228,017
|
248,778
|
||||||
Office
Equipment
|
377,851
|
377,851
|
||||||
Office
Fixtures and Furniture
|
265,315
|
265,315
|
||||||
Total
|
1,303,201
|
1,328,818
|
||||||
Accumulated
Depreciation
|
(981,928
|
)
|
(925,225
|
)
|
||||
$
|
321,273
|
$
|
403,593
|
June
30,
2009
|
December
31,
2008
|
|||||||
Senior
Convertible Debentures, accrue interest at 13% per annum and mature on May
29, 2011
|
$
|
1,606,023
|
$
|
2,136,650
|
||||
Debt
Discount - beneficial conversion feature, net of accumulated amortization
of $470,506 and $295,508 at June 30, 2009 and December 31, 2008,
respectively.
|
(336,383
|
)
|
(425,458
|
)
|
||||
Debt
Discount - value attributable to warrants attached to notes, net of
accumulated amortization of $395,373 and $277,913 at June 30, 2009 and
December 31, 2008, respectively.
|
(282,667
|
)
|
(400,127
|
)
|
||||
Total
|
$
|
986,973
|
$
|
1,311,065
|
||||
Less:
current portion
|
-
|
-
|
||||||
$
|
986,973
|
$
|
1,311,065
|
For
the twelve months ended December 31,
|
Amount
|
|||
2009
|
$
|
-
|
||
2010
|
-
|
|||
2011
|
1,606,023
|
|||
$
|
1,606,023
|
Options
Outstanding
|
Options
Exercisable
|
|||||||||||||||||||||
Exercise
Prices
|
Number
Outstanding
|
Weighted
Average
Remaining
Contractual
Life
(Years)
|
Weighted
Average
Exercise
Price
|
Number
Exercisable
|
Weighted
Average
Exercise
Price
|
|||||||||||||||||
$
|
1.00
- $1.99
|
4,417,133
|
4.18
|
$
|
1.02
|
4,266,883
|
$
|
1.01
|
||||||||||||||
$
|
2.00
- $2.99
|
997,500
|
5.73
|
$
|
2.52
|
951,250
|
$
|
2.51
|
||||||||||||||
$
|
3.00
- $3.99
|
540,000
|
6.33
|
$
|
3.23
|
400,500
|
$
|
3.29
|
||||||||||||||
$
|
4.00
- $4.99
|
70,000
|
6.08
|
$
|
4.33
|
55,000
|
$
|
4.34
|
||||||||||||||
$
|
5.00
- $5.99
|
100,000
|
5.82
|
$
|
5.17
|
83,000
|
$
|
5.16
|
||||||||||||||
6,124,633
|
4.67
|
$
|
1.56
|
5,756,633
|
$
|
1.53
|
Number
of
Shares
|
Weighted
Average
Price
Per
Share
|
|||||||
Outstanding
at January 1, 2008
|
8,105,429
|
$
|
1.98
|
|||||
Granted
|
185,000
|
1.00
|
||||||
Exercised
|
-
|
-
|
||||||
Cancelled
or expired
|
(1,296,500
|
)
|
2.71
|
|||||
Outstanding
at December 31, 2008
|
6,993,929
|
$
|
1.82
|
|||||
Granted
|
320,000
|
1.00
|
||||||
Exercised
|
-
|
-
|
||||||
Cancelled
or expired
|
(1,189,296
|
)
|
2.91
|
|||||
Outstanding
at June 30, 2009
|
6,124,633
|
$
|
1.56
|
June
30, 2009
|
June
30, 2008
|
|||||||
Significant
assumptions (weighted-average):
|
||||||||
Risk-free
interest rate at grant date
|
3.5%
|
3.0%
|
||||||
Expected
stock price volatility
|
81%
|
74%
|
||||||
Expected
dividend payout
|
-
|
-
|
||||||
Expected
option life (in years)
|
5.0
|
5.0
|
||||||
Expected
forfeiture rate
|
12%
|
12%
|
||||||
Fair
value per share of options granted
|
$
|
0.30
|
$
|
0.62
|
Options
Outstanding
|
Options
Exercisable
|
||||||||||||||||||||
Exercise
Prices
|
Number
Outstanding
|
Weighted
Average
Remaining
Contractual
Life
(Years)
|
Weighted
Average
Exercise
Price
|
Number
Exercisable
|
Weighted
Average
Exercise
Price
|
||||||||||||||||
$
|
1.00
|
1,815,937
|
2.84
|
$
|
1.00
|
1,815,937
|
$
|
1.00
|
Number
of
Shares
|
Weighted
Average
Price
Per
Share
|
|||||||
Outstanding
at January 1, 2008
|
1,815,937
|
$
|
1.00
|
|||||
Granted
|
-
|
-
|
||||||
Exercised
|
-
|
-
|
||||||
Canceled
or expired
|
-
|
-
|
||||||
Outstanding
at December 31, 2008
|
1,815,937
|
$
|
1.00
|
|||||
Granted
|
-
|
-
|
||||||
Exercised
|
-
|
-
|
||||||
Canceled
or expired
|
-
|
-
|
||||||
Outstanding
at June 30, 2009
|
1,815,937
|
$
|
1.00
|
Warrants
Outstanding
|
Warrants
Exercisable
|
|||||||||||||||||||||
Exercise
Prices
|
Number
Outstanding
|
Weighted
Average
Remaining
Contractual
Life
(Years)
|
Weighed
Average
Exercise
Price
|
Number
Exercisable
|
Weighted
Average
Exercise
Price
|
|||||||||||||||||
$
|
0.58
|
806,639
|
2.59
|
$
|
0.58
|
856,639
|
$
|
0.58
|
||||||||||||||
$
|
0.60
|
800,000
|
3.85
|
$
|
0.60
|
800,000
|
$
|
0.60
|
||||||||||||||
$
|
0.61
|
2,500,000
|
3.92
|
$
|
0.61
|
2,500,000
|
$
|
0.61
|
||||||||||||||
$
|
2.59
|
862,452
|
2.12
|
$
|
2.59
|
862,452
|
$
|
2.59
|
||||||||||||||
$
|
3.98
|
3,078,864
|
2.29
|
$
|
3.98
|
3,078,864
|
$
|
3.98
|
||||||||||||||
$
|
4.17
|
359,712
|
3.06
|
$
|
4.17
|
359,712
|
$
|
4.17
|
||||||||||||||
8,407,667
|
2.97
|
$
|
2.19
|
8,457,667
|
$
|
2.19
|
Number
of
Shares
|
Weighted
Average
Price
Per
Share
|
|||||||
Outstanding
at January 1, 2008
|
7,673,627
|
$
|
4.15
|
|||||
Issued
|
4,164,140
|
1.31
|
||||||
Exercised
|
(3,380,000
|
)
|
0.70
|
*
|
||||
Canceled
or expired
|
-
|
-
|
||||||
Outstanding
at December 31, 2008
|
8,457,767
|
$
|
2.19
|
|||||
Issued
|
-
|
-
|
||||||
Exercised
|
(50,100
|
)
|
0.10
|
|||||
Canceled
or expired
|
-
|
-
|
||||||
Outstanding
at June 30, 2009
|
8,407,667
|
$
|
2.19
|
•
|
Level
1: Unadjusted quoted prices in active markets that are accessible at the
measurement date for identical, unrestricted assets or
liabilities;
|
•
|
Level
2: Quoted prices in markets that are not active, or inputs which are
observable, either directly or indirectly, for substantially the full term
of the asset or liability; or
|
•
|
Level
3: Prices or valuation techniques that require inputs that are both
significant to the fair value measurement and are
unobservable.
|
(in
thousands)
|
Level
1
|
Level
2
|
Level
3
|
Assets
at
fair
value
|
||||||||||||
Cash
and cash equivalents
|
$
|
120
|