Nevada
|
7372
|
38-3378963
|
(State
or jurisdiction of
incorporation
or organization)
|
(Primary
Standard Industrial
Classification
Code Number)
|
(I.R.S.
Employer
I.D.
Number)
|
CALCULATION
OF REGISTRATION FEE
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|||||
Title
of Each Class of Securities to be
Registered
|
|
Amount
To Be Registered
|
|
Proposed
Maximum Offering Price Per Share
|
|
Proposed
Maximum Aggregate Offering Price (4)
|
|
Amount
of Registration Fee
|
|||||
Common
Stock, $0.004995 par value (1)
|
4,183,800
|
$
|
0.27
|
$
|
1,129,626
|
$
|
34.68
|
||||||
Common
Stock, $0.004995 par value (2)
|
1,745,000
|
$
|
0.27
|
$
|
471,150
|
$
|
14.46
|
||||||
Common
Stock, $0.004995 par value (3)
|
1,270,000
|
$
|
0.27
|
$
|
342,900
|
$
|
10.53
|
||||||
TOTAL
|
7,198,800
|
$
|
1,943,676
|
$
|
59.67
|
1) |
Shares
of the Registrant's common stock, $0.004995 par value per share,
are being
registered for resale on behalf of certain selling security holders.
The
common stock being registered is issuable to the selling security
holders
on their conversion of our 8% Convertible Debentures issued on June
20,
2006 through June 11, 2007 (the “Debentures”). The terms of the Debentures
fix the number of common shares that may be issuable upon conversion
of
the principal portion of the Debentures. The debentureholders have
elected
to receive interest either quarterly in cash or at the earlier of
conversion or maturity in common stock. For those debentureholders
electing to receive common stock, the maximum number of common shares
so
issuable have been included in this registration.
|
2) |
Shares
of the Registrant's common stock, $0.004995 par value per share,
are being
registered for resale on behalf of certain selling security holders.
The
common stock being
registered was issued to the selling security holders on their exercise
of
common stock purchase warrants pursuant to a rights
offering.
|
(3) |
Shares
of the Registrant's common stock, $0.004995 par value per share,
are being
registered for resale on behalf of certain selling security holders.
The
common stock being registered is issuable to the selling security
holders
on their exercise of warrants which were issued either for services
or
related to short term financings.
|
(4) |
Estimated
solely for purposes of calculating the registration fee in accordance
with
Rule 457(c) under the Securities Act of 1933, as amended (the "Act"),
based on the average of the closing bid and asked prices for the
Registrant's Common Stock (the "Common Stock") as reported on the
OTC
Bulletin Board on November 19,
2007.
|
· |
up
to 4,183,800 shares are issuable to the selling shareholders upon
the
conversion of our 8% Convertible Debentures including shares issuable
as
interest payments under the
Debentures.
|
· |
up
to 1,745,000 shares are outstanding and were issued to the selling
shareholders upon their exercise of common stock warrants under
a rights
offering.
|
· |
up
to 1,270,000 shares are issuable to the selling shareholders upon
the
exercise of warrants issued for either services or related to short
term
financings.
|
|
Page
|
|||
|
|
|||
PROSPECTUS
SUMMARY
|
1
|
|||
RISK
FACTORS
|
3
|
|||
PLAN
OF DISTRIBUTION
|
9
|
|||
SELLING
SHAREHOLDERS
|
9
|
|||
THE
COMPANY
|
||||
General
|
11
|
|||
Background
|
11
|
|||
Business
|
12
|
|||
Marketing
and distribution
|
16
|
|||
Dependence
upon single customers
|
16
|
|||
Facilities
|
16
|
|||
Employees
|
16
|
|||
Government
regulation
|
17
|
|||
USE
OF PROCEEDS
|
17
|
|||
LITIGATION
|
17
|
|||
MANAGEMENT'S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
|
17
|
|||
CHANGES
IN ACCOUNTANTS
|
23
|
|||
MANAGEMENT
|
24
|
|||
PRINCIPAL
SHAREHOLDERS
|
|
|||
CERTAIN
TRANSACTIONS
|
30
|
|||
TRADING
MARKET AND RELATED MATTERS
|
30
|
|||
DESCRIPTION
OF SECURITIES
|
31
|
|||
LEGAL
MATTERS
|
33
|
|||
EXPERTS
|
33
|
|||
INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE
|
F-1
|
Shares
being offered for resale to the public
|
7,198,800
(28% of our shares currently outstanding)
|
|
Total
shares outstanding prior to the offering
|
25,450,594
as of November 27, 2007
|
|
Total
shares outstanding assuming conversion of
the debentures, including shares issuable as interest
payments under the debentures, and exercise
of the warrants
|
30,904,394
|
|
Total
shares that would be outstanding assuming conversion
of the debentures, including shares issuable
as interest payments under the debentures, and
exercise of all outstanding options and warrants
|
41,396,261
|
|
Total
proceeds raised by offering
|
None.
However we may receive proceeds of up to $762,000 on the exercise
of
warrants
|
|
Convertible
debentures
|
A
form of our convertible debenture was included as Exhibit 4.8 to
our
Current Report on Form 8K filed as of July 18, 2006
|
|
Dividend
policy
|
We
have never paid a dividend and do not anticipate paying a dividend
in the
foreseeable future
|
Three
Months Ended September 30,
|
|
Year
Ended June 30,
|
|
||||||||||
|
|
2007
|
|
2006
|
|
2007
|
|
2006
|
|||||
Net
sales
|
$
|
159,826
|
$
|
87,395
|
$
|
521,330
|
$
|
681,337
|
|||||
Net
(loss)
|
$
|
(707,451
|
)
|
$
|
(405,872
|
)
|
$
|
(2,110,698
|
)
|
$
|
(845,393
|
)
|
|
Net
(loss) per basic share
|
$
|
(0.03
|
)
|
$
|
(0.02
|
)
|
$
|
(0.09
|
)
|
$
|
(0.06
|
)
|
September
30, 2007
|
June
30, 2007
|
||||||
Working
capital deficit
|
$
|
(3,129,340
|
)
|
$
|
(1,679,643
|
)
|
|
Total
assets
|
$
|
522,062
|
$
|
435,525
|
|||
Total
liabilities
|
$
|
4,020,517
|
$
|
3,311,490
|
|||
Stockholders'
deficit
|
$
|
(3,498,455
|
)
|
$
|
(2,875,965
|
)
|
· |
We
may not be able to raise enough money to develop our services and
bring
them to market;
|
· |
Our
projected capital needs may be inaccurate, and we may not have enough
money to develop our services and bring them to
market;
|
· |
We
may experience unanticipated development or marketing expenses, which
may
make it more difficult to develop our services and bring them to
market;
|
· |
Even
if we are able to develop our services and bring them to market,
we may
not earn enough revenues from the sales of our services to cover
the costs
of operating our business.
|
· |
If
we are unsuccessful in our development efforts, we are not likely
to ever
become profitable.
|
·
|
The
lack of readily available price quotations;
|
·
|
The
absence of consistent administrative supervision of “bid” and “ask”
quotations;
|
·
|
Lower
trading volume; and
|
·
|
Market
conditions.
|
|
·
|
A
standardized risk disclosure document identifying the risks inherent
in
investment in penny stocks;
|
|
·
|
All
compensation received by the broker-dealer in connection with the
transaction;
|
|
·
|
Current
quotation prices and other relevant market data; and
|
|
·
|
Monthly
account statements reflecting the fair market value of the securities.
In
addition, these rules require that a broker-dealer obtain financial
and
other information from a customer, determine that transactions in
penny
stocks are suitable for such customer and deliver a written statement
to
such customer setting forth the basis for this determination.
|
Beneficial
Ownership
|
Maximum
Number
of
|
Amount
and
Percentage
of
|
||||||||
of
Common
Stock
as
|
Shares
of
Common
|
Common
Stock After the Sale
|
||||||||
Name
|
of
November 27, 2007
|
Stock
Offered for Sale
|
Number
|
%
|
||||||
Aladray,
Adnan
|
120,000
|
(1)
|
120,000
|
-
|
*
|
|||||
Aladray,
Nazeah
|
60,000
|
|
(1)
|
60,000
|
-
|
*
|
||||
Belz,
Bruce Trustee
|
100,000
|
(1)
|
100,000
|
-
|
*
|
|||||
Carter,
Shanon
|
21,600
|
(2)
|
21,600
|
-
|
*
|
|||||
Chrobak,
Jerome
|
200,000
|
(1)
|
200,000
|
-
|
*
|
|||||
Ciner,
Eugene and Natalie
|
10,000
|
(3)
|
10,000
|
*
|
||||||
Daniels,
Richard
|
150,000
|
(1)
|
150,000
|
-
|
*
|
|||||
Duchein,
Derek IRA
|
388,800
|
(2)
|
388,800
|
-
|
*
|
|||||
Duchein,
Julie IRA
|
259,200
|
(2)
|
259,200
|
-
|
*
|
|||||
Flannery,
Todd
|
100,000
|
(9)
|
100,000
|
-
|
*
|
|||||
Flowers,
Tim
|
43,200
|
(2)
|
43,200
|
-
|
*
|
|||||
Holland,
Bryan
|
58,000
|
(10)
|
58,000
|
-
|
*
|
|||||
Garbourel,
Victor
|
800,000
|
(1)
|
800,000
|
-
|
*
|
|||||
Giffhorn,
Jesse
|
113,500
|
(2)
|
112,000
|
1,500
|
*
|
|||||
Giffhorn,
Lowell
|
577,000
|
(4)
|
532,000
|
45,000
|
*
|
|||||
Griesel,
Dian
|
240,000
|
(5)
|
240,000
|
-
|
*
|
|||||
Irquois
Master Fund Ltd.
|
250,000
|
(3)
|
250,000
|
*
|
||||||
Kybartai
Trust
|
100,000
|
(3)
|
100,000
|
*
|
||||||
Kincaid,
Doug
|
150,000
|
(9)
|
150,000
|
-
|
*
|
|||||
Little
Bear Investments LLC
|
100,000
|
(3)
|
100,000
|
*
|
||||||
Luedloff,
Mitchell
|
43,200
|
(2)
|
43,200
|
-
|
*
|
|||||
Midtown
Partners LLC
|
60,000
|
(5)
|
60,000
|
*
|
||||||
Morrisett,
Michael
|
470,000
|
(5)
|
270,000
|
200,000
|
*
|
|||||
Neilitz,
Jason
|
150,000
|
(9)
|
150,000
|
-
|
*
|
|||||
Opperman,
Anthony Wayne
|
200,000
|
(1)
|
200,000
|
-
|
*
|
|||||
Opperman,
Donald
|
43,200
|
(2)
|
43,200
|
-
|
*
|
|||||
Pensky,
Zachary
|
140,000
|
(3)
|
140,000
|
*
|
||||||
Potawatomi
Business Devel Corp
|
2,000,000
|
(8)
|
2,000,000
|
-
|
*
|
|||||
Pratt,
Steven
|
23,200
|
(10)
|
23,200
|
-
|
*
|
|||||
Shady
Beach Trust
|
108,000
|
(2)
|
108,000
|
-
|
*
|
|||||
Vermaelen,
Theo
|
740,759
|
(6)
|
86,400
|
654,359
|
2.7%
|
|||||
Zolin,
James and Josephine
|
280,000
|
(7)
|
280,000
|
-
|
*
|
|||||
*
less than 1%
|
|
|
(1) |
Includes
shares of common stock issuable upon the conversion of 8% convertible
debenture(s) plus shares of common stock currently outstanding issued
on
the exercise of the rights
offering.
|
(2) |
Includes
shares of common stock issuable upon the conversion of 8% convertible
debenture(s) plus the payment of interest in common stock plus shares
of
common stock currently outstanding issued on the exercise of the
rights
offering.
|
(3) |
Includes
shares of common stock issuable upon the exercise of common stock
purchase
warrants issued to investors who participated in a short term bridge
loan.
|
(4) |
Mr.
Giffhorn is an affiliate of the Company. The number of shares includes
345,000 shares of common stock and 232,000 shares of common stock
issuable
upon the conversion of 8% convertible debentures, including
interest.
|
(5) |
Includes
shares of common stock issuable upon the exercise of common stock
purchase
warrants issued to individuals for services they
provided.
|
(6) |
Dr.
Vermaelen is an affiliate of the Company. The number of shares includes
694,359 shares of common stock and 46,400 shares of common stock
issuable
upon the conversion of an 8% convertible debenture, including
interest.
|
(7) |
Includes
90,000 shares of common stock issuable upon the conversion of 8%
convertible debentures, including interest, 100,000 shares of common
stock
issuable upon the exercise of a common stock purchase warrant issued
for
their participation in a short term loan and 90,000 shares of common
stock
currently outstanding issued on the exercise of the rights
offering.
|
(8) |
Includes
2,000,000 shares of common stock issuable upon the conversion of
an 8%
convertible debenture. The shares issuable to the Potawatomi Business
Development Corp. (PBDC) on the conversion of debentures or the exercise
of warrants would not be deemed beneficially owned (due to exercise
restrictions within the debenture and warrants) within the meaning
of
Sections 13(d) and 13(g) of the Exchange Act to the extent that their
acquisition in a debenture conversion or a warrant exercise by the
PBDC
would cause the PBDC to own in excess of 4.99% of our outstanding
common
stock immediately following such exercise. By the terms of the debenture
and warrants, the 4.99% limitation may be increased to a maximum
of 9.99%
if the Company accepts a tender offer and a change in control takes
place.
Therefore, it is expected that the PBDC will not beneficially own
more
than 9.99% of our outstanding common stock at any time. Carol Lease
has
ultimate voting and/or investment control over the securities owned
by the
PBDC.
|
(9) |
Includes
shares of common stock issuable upon the conversion of 8% convertible
debenture(s).
|
(10) |
Includes
shares of common stock issuable upon the conversion of 8% convertible
debenture(s) plus the payment of interest in common
stock.
|
· |
· Insufficient
Quality
-
Error rates in Immunoassay testing is estimated to be as high as
4%.
Testing errors and the inability to directly locate error sources
is
costly and time consuming. We believe that StatLIA® will reduce the error
rates and enhance the tester’s ability to locate the error
source.
|
· |
· Lack
of Automation
-
Immunoassay testing is very labor intensive due to many manual steps
in
the processing, tracking and analysis of the data produced. With
high
throughput testing becoming the industry norm, the data needs to
be
managed with even greater efficiency. We believe that StatLIA® will reduce
such labor costs.
|
· |
· Regulatory
Compliance
-
Federal regulations are placing increasing demands for compliance
with the
Food and Drug Administration’s (“FDA”)
quality assurance regulations. We believe that StatLIA® will meet the
growing need for automated software that can assist laboratories
in
complying with the regulations.
|
· |
· Need
for Better Data Management
-
Improved technologies have allowed greater automation in Immunoassay
testing, increasing throughput volumes but requiring better connectivity
and standardization for the management of the data generated. We
believe
that StatLIA® will address the need for greater connectivity and
standardization.
|
|
2007
|
|
2006
|
||||
|
|||||||
Domestic
sales
|
96.5
|
%
|
90.4
|
%
|
|||
Foreign
sales
|
|||||||
Europe
|
2.8
|
%
|
6.6
|
%
|
|||
Other
|
.7
|
%
|
3.0
|
%
|
|||
Total
sales
|
100.0
|
%
|
100.0
|
%
|
2007
|
|
2006
|
|||||
BioRad
|
$
|
125,000
|
$
|
289,000
|
|||
Amgen
|
61,900
|
-
|
Three
Months Ended September 30,
|
Increase
|
||||||||||||
2007
|
|
2006
|
|
(Decrease)
|
|
%
|
|||||||
Statements
of Operations
|
|||||||||||||
Revenues
|
$
|
159,826
|
$
|
87,395
|
$
|
72,431
|
82.9
|
%
|
|||||
Selling
expenses
|
42,688
|
23,205
|
19,483
|
84.0
|
%
|
||||||||
Research
and development
|
118,768
|
83,136
|
35,632
|
42.9
|
%
|
||||||||
General
and administrative
|
|||||||||||||
expenses
|
467,255
|
317,923
|
149,332
|
47.0
|
%
|
||||||||
Interest
expense
|
238,566
|
69,003
|
169,563
|
245.7
|
%
|
||||||||
Total
expenses
|
867,277
|
493,267
|
374,010
|
75.8
|
%
|
||||||||
Net
(loss)
|
$
|
(707,451
|
)
|
$
|
(405,872
|
)
|
$
|
301,579
|
74.3
|
%
|
|||
Net
(loss) per basic and
|
|||||||||||||
diluted
share
|
$
|
(0.03
|
)
|
$
|
(0.02
|
)
|
$
|
0.01
|
50.0
|
%
|
Year
Ended
|
|
Year
Ended
|
|
Increase
|
|
|
|
||||||
|
|
June
30, 2007
|
|
June
30, 2006
|
(Decrease)
|
%
|
|||||||
Statements
of Operations
|
|||||||||||||
Revenues
|
$
|
521,330
|
$
|
681,337
|
$
|
(160,007
|
)
|
-23.5
|
%
|
||||
Selling
expenses
|
101,296
|
103,190
|
(1,894
|
)
|
-1.8
|
%
|
|||||||
General
and administrative
|
|||||||||||||
expenses
|
2,115,310
|
1,215,966
|
899,344
|
74.0
|
%
|
||||||||
Other
income
|
(38,121
|
)
|
-
|
(38,121
|
)
|
NM
|
|||||||
Interest
expense
|
453,543
|
207,574
|
245,969
|
118.5
|
%
|
||||||||
Total
expenses
|
2,632,028
|
1,526,730
|
1,105,298
|
72.4
|
%
|
||||||||
Net
(loss)
|
$
|
(2,110,698
|
)
|
$
|
(845,393
|
)
|
$
|
(1,265,305
|
)
|
149.7
|
%
|
||
Net
(loss) per basic and
|
|||||||||||||
diluted
share
|
$
|
(0.09
|
)
|
$
|
(0.06
|
)
|
$
|
(0.03
|
)
|
50.0
|
%
|
As
of
|
Increase
|
|||||||||
September
30, 2007
|
|
June
30, 2007
|
(Decrease)
|
|||||||
Working
Capital
|
||||||||||
Current
assets
|
$
|
349,991
|
$
|
250,218
|
$
|
99,773
|
||||
Current
liabilities
|
3,479,331
|
1,929,861
|
1,549,470
|
|||||||
Working
capital deficit
|
$
|
(3,129,340
|
)
|
$
|
(1,679,643
|
)
|
$
|
1,449,697
|
||
Long-term
debt
|
$
|
541,186
|
$
|
1,381,629
|
$
|
(840,443
|
)
|
|||
Stockholders'
deficit
|
$
|
(3,498,455
|
)
|
$
|
(2,875,965
|
)
|
$
|
622,490
|
||
Quarter
Ended September 30,
|
Increase
|
|||||||||
2007
|
2006
|
(Decrease)
|
||||||||
Statements
of Cash Flows Select Information
|
||||||||||
Net
cash provided (used) by:
|
||||||||||
Operating
activities
|
$
|
(562,052
|
)
|
$
|
(354,694
|
)
|
$
|
207,358
|
|
|
Investing
activities
|
$
|
(9,956
|
)
|
$
|
(15,414
|
)
|
$
|
(5,458
|
)
|
|
Financing
activities
|
$
|
498,192
|
$
|
773,500
|
$
|
(275,308
|
)
|
|||
As
of
|
Increase
|
|||||||||
September
30, 2007
|
|
June
30, 2007
|
(Decrease)
|
|||||||
Balance
Sheet Select Information
|
||||||||||
Cash
and cash equivalents
|
$
|
11,200
|
$
|
85,016
|
$
|
(73,816
|
)
|
|||
Accounts
receivable
|
$
|
148,842
|
$
|
75,283
|
$
|
73,559
|
||||
|
||||||||||
Accounts
payable and accrued expenses
|
$
|
1,574,193
|
$
|
1,478,257
|
$
|
95,936
|
Name
|
|
Age
|
|
Position
|
|
|
|
|
|
John
R. Dunn II
|
|
56
|
|
Chairman,
Chief Executive Officer, President, and Director
|
George
Dunn
|
|
50
|
|
Secretary,
Chief Operating Officer
|
Lowell
W. Giffhorn
|
|
60
|
|
Chief
Financial Officer and Director
|
Theo
Vermaelen
|
|
53
|
|
Director
|
Stephen
Eisold
|
|
60
|
|
Director
|
Jason
Booth
|
41
|
Director
|
·
|
A
breach of the director’s duty of loyalty to our company or our
stockholders;
|
·
|
Acts
or omissions by the director not in good faith or which involve
intentional misconduct or a knowing violation of law;
|
·
|
Willful
or negligent declaration of an unlawful dividend, stock purchase
or
redemption; or
|
·
|
Transactions
from which the director derived an improper personal benefit.
|
Name
and
|
Fiscal
|
|
|
|
Option
|
|
|
|
|||||
Principal
Position
|
|
Year
|
|
Salary
($)
|
|
Awards
($)
|
|
Total
($)
|
|||||
[a]
|
[b]
|
[c]
|
[f]
|
[j]
|
|||||||||
John
R. Dunn II
|
2007
|
$
|
108,000
|
$
|
5,071
|
$
|
113,071
|
||||||
President,
CEO and
|
2006
|
$
|
108,000
|
$
|
27,427
|
$
|
135,427
|
||||||
Director
|
|||||||||||||
George
Dunn
|
2007
|
$
|
108,000
|
$
|
5,071
|
$
|
113,071
|
||||||
VP,
Secretary and
|
2006
|
$
|
102,000
|
$
|
24,565
|
$
|
126,565
|
||||||
COO
|
June
30, 2007
|
|
June
30, 2006
|
|||||
Dividend
yield
|
0
|
%
|
0
|
%
|
|||
Volatility
|
42
|
%
|
1%-30
|
%
|
|||
Risk-free
interest rates
|
5.10
|
%
|
2.76%-4.84
|
%
|
|||
Expected
life
|
5
years
|
5
years
|
Number
|
|
|
|
|
|
|||||
|
|
of
|
|
|
|
|
|
|||
|
|
Securities
|
|
|
|
|
|
|||
|
|
Underlying
|
|
|
|
|
|
|||
|
|
Unexercised
|
|
Option
|
|
|
|
|||
|
|
Options
|
|
Exercise
|
|
Option
|
|
|||
|
|
(#)
|
|
Price
|
|
Expiration
|
|
|||
Name
|
|
Exercisable
|
|
($)
|
|
Date
|
|
|||
[a]
|
|
[b]
|
|
[e]
|
|
[f]
|
||||
John
R. Dunn II
|
40,000
|
$
|
0.75
|
April
6, 2011
|
||||||
President,
CEO and
|
60,000
|
$
|
0.64
|
April
6, 2011
|
||||||
Director
|
50,000
|
$
|
0.64
|
June
15, 2012
|
||||||
George
Dunn
|
400,000
|
$
|
0.125
|
April
6, 2011
|
||||||
VP,
Secretary and
|
400,000
|
$
|
0.025
|
April
6, 2011
|
||||||
COO
|
60,000
|
$
|
0.64
|
April
6, 2011
|
|
Fees
|
|
|
|
|||||||||
Earned
|
|
|
|
||||||||||
or
|
|
|
|||||||||||
Paid
In
|
Option
|
All
Other
|
|||||||||||
Cash
|
Awards
|
Compensation
|
Total
|
||||||||||
Name
|
($)
|
($)
|
($)
|
($)
|
|||||||||
[a]
|
[b]
|
[d]
|
[g]
|
[h]
|
|||||||||
Lowell
W. Giffhorn
|
-
|
$
|
5,071
|
$
|
75,000
|
$
|
80,071
|
||||||
Theo
Vermaelen
|
-
|
$
|
5,071
|
-
|
$
|
5,071
|
|||||||
Stephen
Eisold
|
-
|
$
|
5,071
|
-
|
$
|
5,071
|
|||||||
Jason
Booth
|
-
|
$
|
9,043
|
-
|
$
|
9,043
|
|
|
Shares
of Common
|
|
Percentage
|
||
|
|
|
|
Stock
Beneficially
|
|
of
Outstanding
|
Name
|
|
Postion
with the Company
|
|
Owned
(1) (2)
|
|
Shares
|
Executive
Officers and
|
||||||
Directors
|
||||||
John
R. Dunn II (3)
|
Chairman
of the Board,
|
5,005,000
|
21.0%
|
|||
Chief
Executive Officer,
|
||||||
Chief
Technical Officer and
|
||||||
Director
|
||||||
George
Dunn (4)
|
Vice
President, Secretary
|
2,301,000
|
9.4%
|
|||
and
Chief Operating Officer
|
||||||
Lowell
W. Giffhorn (5)
|
Vice
President, Chief
|
645,000
|
2.7%
|
|||
Financial
Officer and Director
|
||||||
Theo
Vermaelen (6)
|
Director
|
859,359
|
3.6%
|
|||
Steven
Eisold (7)
|
Director
|
724,494
|
3.0%
|
|||
Jason
Booth (8)
|
Director
|
75,000
|
*
|
|||
All
Exective Officers and
|
||||||
Directors
as a Group
|
||||||
(6
persons) (9)
|
9,609,853
|
37.3%
|
||||
Greater
than 5% Owners
|
||||||
Potawatomi
Business
|
||||||
Development
Corp.
|
4,000,000
|
Note
10
|
||||
Robert
Tabor
|
4,730,589
|
20.0%
|
||||
Massoud
Kharrazian
|
1,487,136
|
6.3%
|
||||
*
Less than 1%
|
(1) |
Reflects
amounts as to which the beneficial owner has sole voting power and
sole
investment power.
|
(2) |
Includes
stock options, common stock purchase warrants and convertible debentures
exercisable within 60 days from the date hereof.
|
(3) |
Comprised
of 4,880,000 shares and 125,000 stock options.
|
(4) |
Comprised
of 1,416,000 shares and 885,000 stock options.
|
(5) |
Comprised
of 345,000 shares, 125,000 stock options, and 200,000 shares issuable
on
the conversion of a debenture.
|
(6) |
Comprised
of 694,359 shares, 125,000 stock options and 40,000 shares issuable
on the
conversion of a debenture.
|
(7) |
Comprised
of 599,494 shares and 125,000 stock
options.
|
(8) |
Comprised
of 75,000 stock options.
|
(9) |
Comprised
of 7,889,853 shares, 1,460,000 stock options and 240,000 shares issuable
on the conversion of a debenture.
|
10) |
The
shares issuable to Potawatomi Business Development Corp. (PBDC) on
the
conversion of debentures or the exercise of warrants would not be
deemed
beneficially owned (due to exercise restrictions within the debentures
and
warrants) within the meaning of Sections 13(d) and 13(g) of the Exchange
Act to the extent that their acquisition in a debenture conversion
or a
warrant exercise by PBDC would cause PBDC to own in excess of 4.99%
of our
outstanding common stock immediately following such conversion or
exercise. By the terms of the debentures and warrants, the 4.99%
limitation may be increased to a maximum of 9.99% if we accept a
tender
offer and a change in control takes place. Therefore, it is expected
that
PBDC will not beneficially own more than 9.99% of our outstanding
common
stock at any time. Carol Leese has ultimate voting and/or investment
control over the securities owned by
PBDC.
|
Closing
Price
|
|||||||
High
|
|
Low
|
|||||
Fiscal
Year Ended June 30, 2008
|
|||||||
First
Quarter
|
$
|
0.44
|
$
|
0.29
|
|||
Second
Quarter (through November 26, 2007)
|
$
|
0.33
|
$
|
0.20
|
|||
Fiscal
Year Ended June 30, 2007
|
|||||||
First
Quarter
|
$
|
0.50
|
$
|
0.21
|
|||
Second
Quarter
|
$
|
1.01
|
$
|
0.40
|
|||
Third
Quarter
|
$
|
0.60
|
$
|
0.35
|
|||
Fourth
Quarter
|
$
|
0.51
|
$
|
0.37
|
|||
Fiscal
Year Ended June 30, 2006
|
|||||||
First
Quarter
|
$
|
1.85
|
$
|
1.36
|
|||
Second
Quarter
|
$
|
1.75
|
$
|
1.10
|
|||
Third
Quarter
|
$
|
1.20
|
$
|
0.60
|
|||
Fourth
Quarter
|
$
|
0.68
|
$
|
0.25
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
|
|
|
|
Consolidated
Balance Sheets, June 30, 2007 and 2006
|
F-3
|
|
|
||
Consolidated
Statements of Operation, for the years ended June 30, 2007 and
2006
|
F-4
|
|
|
||
Consolidated
Statement of Stockholders' Deficit, for the years ended June 30,
2007 and
2006
|
F-5
|
|
|
||
Consolidated
Statements of Cash Flows, for the years ended June 30, 2007 and
2006
|
F-6
|
|
|
||
Notes
to Consolidated Financial Statements
|
F-7-F-22
|
|
|
||
Condensed
Consolidated Balance Sheets as of September 30, 2007 (unaudited)
and June
30, 2007
|
F-23
|
|
|
||
Condensed
Consolidated Statements of Operations for the three months ended
September
30, 2007 and 2006 (unaudited)
|
F-24
|
|
|
||
Condensed
Consolidated Statements of Cash Flows for the three months ended
September
30, 2007 and 2006 (unaudited)
|
F-25
|
|
|
||
Notes
to Condensed Unaudited Consolidated Financial Statements
|
F-26-F-31
|
Brendan
Technologies, Inc.
|
|
Consolidated
Balance Sheets
|
June
30,
|
2007
|
|
2006
|
||||
|
|
||||||
ASSETS
|
|||||||
Current
assets:
|
|||||||
Cash
and cash equivalents
|
$
|
85,016
|
$
|
149,512
|
|||
Accounts
receivable, net
|
75,283
|
56,107
|
|||||
Prepaid
expenses
|
89,919
|
301
|
|||||
Total
current assets
|
250,218
|
205,920
|
|||||
Property
and equipment, net
|
157,356
|
72,740
|
|||||
Other
assests
|
27,951
|
8,190
|
|||||
$
|
435,525
|
$
|
286,850
|
||||
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
|||||||
Current
liabilities:
|
|||||||
Convertible
notes payable in default
|
$
|
130,000
|
$
|
255,000
|
|||
Accrued
interest in default
|
95,382
|
78,217
|
|||||
Note
payable
|
100,000
|
-
|
|||||
Accounts
payable
|
12,916
|
161,430
|
|||||
Accrued
wages and vacation
|
842,525
|
772,030
|
|||||
Accrued
interest
|
527,434
|
414,959
|
|||||
Deferred
revenue
|
98,394
|
77,651
|
|||||
Current
portion of lease obligations
|
7,388
|
6,442
|
|||||
Current
portion 8% convertible debentures net of debt discount
|
24,010
|
-
|
|||||
Current
portion 8% convertible debentures net of debt discount-
|
|||||||
related
parties
|
91,812
|
-
|
|||||
Total
current liabilities
|
1,929,861
|
1,765,729
|
|||||
Long
term portion of lease obligations
|
3,607
|
10,996
|
|||||
8%
Convertible debentures net of debt discount
|
1,343,868
|
23,002
|
|||||
8%
Convertible debentures net of debt discount - related
parties
|
34,154
|
83,652
|
|||||
Total
liabilities
|
3,311,490
|
1,883,379
|
|||||
Stockholders'
deficit
|
|||||||
Preferred
stock, $.004995 par value; 5,000,000 shares
|
|||||||
authorized:
none outstanding
|
-
|
-
|
|||||
Common
stock, $.004995 par value; 50,000,000 shares
|
|||||||
authorized:
23,705,594 and 25,498,794 issued and
|
|||||||
outstanding
at June 30, 2007 and 2006, respectively
|
118,409
|
127,366
|
|||||
Additional
paid in capital
|
5,358,033
|
4,517,814
|
|||||
Accumulated
deficit
|
(8,352,407
|
)
|
(6,241,709
|
)
|
|||
Total
stockholders' deficit
|
(2,875,965
|
)
|
(1,596,529
|
)
|
|||
$
|
435,525
|
$
|
286,850
|
See
accompanying report of independent registered public accounting
firm,
summary of accounting policies and
notes to consolidated financial statements.
|
Brendan
Technologies, Inc.
|
|
Consolidated
Statements of Operation
|
Year
Ended June 30,
|
2007
|
|
2006
|
||||
Revenue
|
$
|
521,330
|
$
|
681,337
|
|||
Selling
expenses
|
101,296
|
103,190
|
|||||
General
and administrative expenses
|
2,115,310
|
1,215,966
|
|||||
2,216,606
|
1,319,156
|
||||||
Income
(loss) from operations
|
(1,695,276
|
)
|
(637,819
|
)
|
|||
Other
income (expense)
|
|||||||
Other
income
|
38,121
|
-
|
|||||
Interest
expense
|
(453,543
|
)
|
(207,574
|
)
|
|||
Loss
before provision for income taxes
|
(2,110,698
|
)
|
(845,393
|
)
|
|||
Provision
for income taxes
|
-
|
-
|
|||||
Net
loss
|
$
|
(2,110,698
|
)
|
$
|
(845,393
|
)
|
|
Basic
and diluted loss per share
|
$
|
(0.09
|
)
|
$
|
(0.06
|
)
|
|
Basic
and diluted weighted average
|
|||||||
common
shares outstanding
|
23,710,507
|
15,146,106
|
|||||
See
accompanying report of independent registered public accounting
firm,
summary of accounting policies and notes to consolidated financial
statements.
|
Brendan
Technologies, Inc.
|
|
Consolidated
Statements of Stockholders' Deficit
|
|
|
Common
Stock
|
|
Additional
Paid
|
|
Retained
Earnings
|
Stockholders'
|
|||||||||
Years
Ended June 30, 2007 and 2006
|
Shares
|
|
Amount
|
in
Capital
|
(Deficit)
|
(Deficit)
|
||||||||||
Balance,
July 1, 2005
|
4,687,209
|
$
|
23,413
|
$
|
1,161,948
|
$
|
(5,396,316
|
)
|
$
|
(4,210,955
|
)
|
|||||
Issuance
of common stock at $3.00
|
||||||||||||||||
per
share
|
67,500
|
337
|
202,163
|
-
|
202,500
|
|||||||||||
Offering
costs paid in cash
|
(31,875
|
)
|
-
|
(31,875
|
)
|
|||||||||||
Brendan
shares converted to Omni at 4 to 1
|
14,264,127
|
71,248
|
(71,248
|
)
|
-
|
-
|
||||||||||
Brendan
notes payable and accrued interest
|
||||||||||||||||
converted
to Omni stock
|
4,352,879
|
21,743
|
2,632,455
|
-
|
2,654,198
|
|||||||||||
Omni
common shares issued in payment of
|
||||||||||||||||
Brendan
accounts payable related to merger
|
100,000
|
500
|
34,500
|
-
|
35,000
|
|||||||||||
Omni
common shares issued to an
|
||||||||||||||||
individual
as costs of the merger
|
800,000
|
3,996
|
(3,996
|
)
|
-
|
-
|
||||||||||
Omni
shares previously outstanding
|
||||||||||||||||
recapitalized
due to the merger
|
1,227,079
|
6,129
|
(6,129
|
)
|
-
|
-
|
||||||||||
Sale
of previous Omni operating subsidiaries
|
||||||||||||||||
treated
as contributed capital
|
-
|
-
|
498,000
|
-
|
498,000
|
|||||||||||
Value
of warrants and stock options issued
|
-
|
-
|
101,996
|
-
|
101,996
|
|||||||||||
Net
(loss) for the year ended
|
||||||||||||||||
June
30, 2006
|
-
|
-
|
-
|
(845,393
|
)
|
(845,393
|
)
|
|||||||||
Balance,
June 30, 2006
|
25,498,794
|
$
|
127,366
|
$
|
4,517,814
|
$
|
(6,241,709
|
)
|
$
|
(1,596,529
|
)
|
|||||
Cancellation
of shares
|
(1,793,200
|
)
|
(8,957
|
)
|
8,957
|
-
|
-
|
|||||||||
Warrant
valuation related to financing costs
|
-
|
40,403
|
-
|
40,403
|
||||||||||||
Warrant
valuation as result of services provided
|
-
|
30,390
|
-
|
30,390
|
||||||||||||
Non
cash issuance of stock options
|
-
|
80,208
|
-
|
80,208
|
||||||||||||
Non
cash debt discount on issuance of
|
||||||||||||||||
8%
convertible debentures, net of amortization
|
-
|
680,261
|
-
|
680,261
|
||||||||||||
Net
(loss) for the year ended June 30, 2007
|
-
|
-
|
(2,110,698
|
)
|
(2,110,698
|
)
|
||||||||||
Balance,
June 30, 2007
|
23,705,594
|
$
|
118,409
|
$
|
5,358,033
|
$
|
(8,352,407
|
)
|
$
|
(2,875,965
|
)
|
|||||
See
accompanying report of independent registered public accounting
firm,
summary of accounting policies and
notes to consolidated financial
statements.
|
Brendan
Technologies, Inc.
|
|
Consolidated
Statements of Cash Flows
|
Year Ended June 30, |
2007
|
2006
|
|||||
Operating
activities:
|
|||||||
Net
loss
|
$
|
(2,110,698
|
)
|
$
|
(845,393
|
)
|
|
Adjustments
to reconcile net loss
|
|||||||
to
cash provided by operating activities:
|
|||||||
Amortization
and depreciation
|
46,189
|
14,858
|
|||||
Provision
for uncollectible receivables
|
1,000
|
-
|
|||||
Stock
option compensation
|
80,208
|
83,650
|
|||||
Amortization
of debt discount
|
164,951
|
-
|
|||||
Amortization
of financing costs
|
17,398
|
-
|
|||||
Amortization
of warrant valuation issued for services
|
11,397
|
-
|
|||||
Other
non cash items
|
(38,122
|
)
|
98,000
|
||||
Changes
in assets and liabilities:
|
|||||||
(Increase)
decrease in accounts receivable
|
(20,176
|
)
|
15,644
|
||||
(Increase)
decrease in prepaid expense and other assets
|
(67,381
|
)
|
29
|
||||
Increase
(decrease) in accounts payable
|
(110,392
|
)
|
48,773
|
||||
Increase
(decrease) in accrued liabilities
|
200,135
|
60,967
|
|||||
Increase
(decrease) in deferred revenue
|
20,743
|
14,654
|
|||||
Net
cash (used in) operating activities
|
(1,804,748
|
)
|
(508,818
|
)
|
|||
Investing
activities:
|
|||||||
Purchase
of property and equipment
|
(130,805
|
)
|
(67,351
|
)
|
|||
Net
cash (used in) investing activities
|
(130,805
|
)
|
(67,351
|
)
|
|||
Financing
activities:
|
|||||||
Principal
payments of lease obligations
|
(6,443
|
)
|
(2,448
|
)
|
|||
Principal
payments on notes payable in default
|
(125,000
|
)
|
-
|
||||
Proceeds
from notes receivable on sale of Omni divisions
|
-
|
400,000
|
|||||
Proceeds
from issuance of 8% convertible debentures
|
1,902,500
|
125,000
|
|||||
Proceeds
from issuance of short term note payable
|
100,000
|
-
|
|||||
Proceeds
from issuance of common stock, net of cash
|
|||||||
paid
for costs
|
-
|
170,625
|
|||||
Net
cash provided by financing activities
|
1,871,057
|
693,177
|
|||||
Net
increase (decrease) in cash and cash equivalents
|
(64,496
|
)
|
117,008
|
||||
Cash
and cash equivalents, beginning of year
|
149,512
|
32,504
|
|||||
Cash
and cash equivalents, end of year
|
$
|
85,016
|
$
|
149,512
|
|||
Supplemental
Disclosure of Cash Flow Information:
|
|||||||
Cash
paid during the period for:
|
|||||||
Interest
|
$
|
88,306
|
$
|
17,708
|
|||
Income
taxes
|