Delaware
(State
or other jurisdiction
of
incorporation or organization)
|
7371
(Primary
Standard Industrial
Classification
Code Number)
|
58-2153309
(I.R.S.
employer
identification
number)
|
Title
of Each Class of Securities
to
be Registered
|
Amount
to be
Registered
(1)
|
Proposed
Maximum
Offering
Price
Per
Share (2)
|
Proposed
Maximum
Aggregated
Offering
Price
|
Amount
of
Registration
Fee
|
|||||||||
Common
Stock, par value $.0001 per share
|
100,000,000
|
(3)
|
$
|
.0165
|
$
|
1,650,000
|
$
|
176.55
|
|||||
Common
Stock, par value $.0001 per share
|
6,584,844
|
$
|
.0165
|
$
|
108,650
|
$
|
11.63
|
||||||
Total
|
106,584,844
|
$
|
188.18
|
(4) |
(1) |
Pursuant
to Rule 416 promulgated under the Securities Act of 1933, as amended,
there are also registered hereunder such indeterminate number of
additional shares as may be issued to the selling stockholders to
prevent
dilution resulting from stock splits, stock dividends or similar
transactions.
|
(2) |
Estimated
solely for the purpose of determining our registration fee pursuant
to
Rule 457(c), based on the average of the high and low sales prices
of our
common stock on January 10, 2006 as reported over-the-counter on
the OTC
Bulletin Board by the National Association of Securities Dealers,
Inc., of
$0.019 and $0.014, respectively.
|
(3) |
We
are registering 100,000,000 shares of common stock issuable under
the
Private Equity Credit Agreement (including 3,000,000 shares of our
common
stock representing our good faith estimate of shares issuable in
satisfaction of Section 2.6 of the Private Equity Credit
Agreement).
|
(4)
|
Previously
paid.
|
· |
Brittany
Capital Management Limited, which is offering up to 100,000,000 shares
of
our common stock which may from time to time be issued pursuant to
the
Private Equity Credit Agreement dated January 10, 2006 (the “Private
Equity Credit Agreement”); and
|
· |
Greenfield
Capital Partners, LLC, which is offering up to 6,584,844 shares of
common
stock issuable upon exercise of warrants.
|
PROSPECTUS
SUMMARY
|
3
|
RISK
FACTORS
|
7
|
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
|
14
|
USE
OF PROCEEDS
|
14
|
MARKET
RANGE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
|
14
|
SELLING
STOCKHOLDERS
|
15
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
18
|
DIRECTORS
AND EXECUTIVE OFFICERS
|
42
|
COMPENSATION
OF DIRECTORS AND EXECUTIVE OFFICERS
|
43
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
45
|
DISCLOSURE
OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
|
47
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
|
48
|
DESCRIPTION
OF SECURITIES
|
49
|
PLAN
OF DISTRIBUTION
|
54
|
AVAILABLE
INFORMATION
|
56
|
LEGAL
MATTERS
|
56
|
EXPERTS
|
56
|
Issuer:
|
Global
Matrechs, Inc.
|
Securities
Offered:
|
106,584,844
shares
of our common stock
|
OTC
Symbol:
|
GMTH
|
Use
of Proceeds:
|
We
will not receive any of the proceeds from the sale by any selling
stockholders of the common stock
|
Offering
Price:
|
To
be determined by the prevailing market price for the shares at the
time of
the sale or in negotiated transactions
|
Risk
Factors:
|
You
should read the “Risk Factors” section beginning on page 7 to understand
the risks associated with an investment in our common stock
|
Total
Shares of Our Common Stock
Outstanding
as of January 10, 2006:
|
155,650,011
|
· |
The
lower our stock price is, the more shares we would have to issue
for a
given draw down amount.
|
· |
The
shares we may issue under the Private Equity Credit Agreement are
at a
discount to the market price.
|
· |
The
issuance of shares under the agreement will increase the number of
shares
we have outstanding, and their subsequent resale will increase the
number
of freely tradable shares in the market.
|
· |
We
may need to seek shareholder approval to increase the number of shares
of
common stock available for issuance, whether by increasing the number
of
shares we are authorized to issue, effecting a reverse split of our
common
stock (thereby decreasing the number of shares outstanding), or
both.
|
· |
the
issuance by True To Form to us of a promissory note described below
in
the initial principal amount of $250,000, which note accrues interest
at
an annual rate of one percent plus the prime rate as reported by
a
nationally recognized commercial bank and has a maturity date of
January
1, 2011;
|
· |
the
cancellation of our guaranty of the amounts owed under a promissory
note
issued by True to Form to Mr. Allen in connection with our acquisition
of
True to Form; and
|
· |
the
surrender by Mr. Allen of the 10,000,000 shares of our common stock
that
were issued to him as partial consideration for our purchase of True
to
Form on December 31, 2004 and the cancellation of all other equity
interest in Global Matrechs held by Mr.
Allen.
|
· |
your
ownership percentage of our common stock will be reduced;
|
· |
the
value of your stock may be diluted;
|
· |
We
may issue securities that have rights, preferences and privileges
senior
to our common stock; and
|
· |
The
terms of any additional indebtedness may include restrictive financial
and
operating covenants that would limit our ability to compete and expand,
thereby increasing the price of our
stock.
|
· |
Maximum
Put Amount.
The maximum amount of each put is equal to the lesser of (a) $500,000,
or
(b) 500% percent of the weighted average volume for the 20 trading
days
immediately preceding the put date.
|
· |
9.99%
Cap.
Our Private Equity Credit Agreement provides that in no event shall
the
number of shares issuable to Brittany cause it to own in excess of
9.99%
of the then outstanding shares of our common stock. Because of this
maximum advance restriction, we may not be able to access sufficient
funds
when needed.
|
· |
Authorized
Shares of Common Stock.
At
the market price of our common stock as of January 10, 2006, it would
require 1,020,408,163 shares to draw down the full $15,000,000 available
under the agreement, and we have only 144,349,989 shares of common
stock
available for issuance as of January 10, 2006. It may be necessary
for our
shareholders to approve an increase to the common stock available
for
issuance under our Certificate of Incorporation, whether by increasing
the
number of shares we are authorized to issue, effecting a reverse
split of
our common stock (thereby decreasing the number of shares outstanding),
or
both.
|
· |
successfully
attract, train, motivate and manage a larger number of employees
for sales
and customer support activities;
|
· |
control
working capital requirements; and
|
· |
improve
the efficiency of our operating, administrative, financial and accounting
systems, procedures and controls.
|
· |
Existing
stockholders will experience substantial dilution if we draw down
the
maximum amount of shares of common stock being registered (approximately
40% of our outstanding shares after giving effect to the issuance,
based
on the shares outstanding as of January 10, 2006). The risk associated
with the possible sale of a large number of shares issued under the
equity
line could cause some of our stockholders to sell their stock, thus
causing the price of our stock to decline.
|
· |
Because
Brittany is purchasing our shares at a discount, it will have an
incentive
to sell immediately so that it can realize a gain on the difference.
If
our common stock market price does decline, this could further accelerate
sales of our common stock.
|
· |
To
the extent Brittany sells its common stock, the common stock price
may
decrease due to the additional shares in the market. This could allow
Brittany to sell greater amounts of common stock, the sales of which
would
further depress the stock price.
|
· |
Actual
or anticipated downward pressure on our stock price due to actual
or
anticipated sales of stock under the Private Equity Credit Agreement
could
cause some institutions or individuals to engage in short sales of
our
common stock, which may itself cause the price of our stock to
decline.
|
· |
variations
in our quarterly results of operations;
|
· |
the
introduction of new products by us or our competitors;
|
· |
acquisitions
or strategic alliances involving us or our competitors;
|
· |
future
sales of shares of common stock in the public market; and
|
· |
market
conditions in our industries and the economy as a whole.
|
· |
the
ability of our board of directors to issue preferred stock, and determine
its terms, without a stockholder vote;
|
· |
the
classification of our board of directors, which effectively prevents
stockholders from electing a majority of the directors at any one
annual
meeting of stockholders;
|
· |
the
limitation that directors may be removed only for cause by the affirmative
vote of the holders of at least 75% of our shares of capital stock
entitled to vote; and
|
· |
advance
notice requirements for stockholder proposals and director
nominations.
|
High
|
Low
|
|||||||
2003:
|
||||||||
First
quarter
|
$
|
0.100
|
$
|
0.001
|
||||
Second
quarter
|
0.090
|
0.030
|
||||||
Third
quarter
|
0.090
|
0.030
|
||||||
Fourth
quarter
|
0.055
|
0.016
|
||||||
2004:
|
||||||||
First
quarter
|
$
|
0.140
|
$
|
0.040
|
||||
Second
quarter
|
0.150
|
0.060
|
||||||
Third
quarter
|
0.140
|
0.040
|
||||||
Fourth
quarter
|
0.080
|
0.030
|
||||||
2005:
|
||||||||
First
Quarter
|
$
|
0.108
|
$
|
0.043
|
||||
Second
Quarter
|
$
|
0.108
|
$
|
0.032
|
||||
Third
Quarter
|
$
|
0.044
|
$
|
0.023
|
· |
The
number of shares beneficially owned by the selling stockholders is
determined in accordance with rules promulgated by the
SEC.
|
· |
Applicable
percentage of ownership is based on 155,650,011 shares of common
stock
outstanding as of January 10, 2006.
|
· |
The
“Right to Acquire” column reflects beneficial ownership of shares subject
to warrants and other convertible securities that may be exercised
and
converted into common stock within 60 days after January 10, 2006.
These
shares are deemed to be beneficially owned and outstanding by the
person
holding such securities for the purpose of computing the percentage
of
ownership of such person. They are not deemed outstanding for the
purpose
of computing the percentage ownership of any other
person.
|
· |
The
“Shares Offered” under this prospectus column reflects all of the shares
that each selling stockholder may offer under this
prospectus.
|
· |
The
table assumes that the selling stockholders will sell all of the
shares.
No assurances can be given as to the actual number of shares that
will be
resold by the selling stockholders or that will be held by the selling
stockholders after completion of the
resales.
|
· |
Information
concerning the selling stockholders may change from time to time
and
changed information will be presented in a supplement to this prospectus
if and when necessary and required. The selling stockholders may
have
sold, transferred or otherwise disposed of securities since the date
the
selling stockholders provided the information regarding their securities
holdings.
|
Beneficial
Ownership before the Offering
|
Beneficial
Ownership after the Offering
|
||||||||||||||||||||||||
Name
of Beneficial Owner
|
Outstanding
|
Right
to
Acquire
|
Total
|
Shares
Offered
|
Outstanding
|
Right
to
Acquire
|
Total
|
Percentage
|
|||||||||||||||||
Brittany
Capital Management Limited (1)
|
0
|
0
|
0
|
100,000,000
|
0
|
0
|
0
|
*
|
|||||||||||||||||
Greenfield
Capital
Partners
LLC (2)
|
166,666
|
6,584,844
|
6,751,510
|
6,584,844
|
166,666
|
0
|
166,666
|
*
|
(1)
|
The
selling stockholder has represented to us that it is an affiliate
of a
broker-dealer and that it bought these securities in the ordinary
course
of business and that at the time of the purchase of the securities
to be
resold, it had no agreement or understanding with any person to distribute
these securities.
|
(2)
|
The
selling stockholder has represented to us that it is a registered
broker-dealer.
|
· |
a
retainer fee of $10,000 paid cash upon execution of the engagement
letter
dated October 1, 2004;
|
· |
a
success fee equal to 12% of the gross proceeds of a capital raising
transaction payable 10% in cash and 2% payable in shares of common
stock
or warrants; and
|
· |
non-callable
warrants to purchase 20% of the aggregate number of securities sold
in any
capital raising transaction.
|
Selling
Stockholder
|
Voting
and Investment Control
|
|
Brittany
Capital Management Limited
|
Barry
Herman, the managing director of Lion Corporate Services Limited,
the sole
stockholder of Brittany, and Stephen Hicks (1)
|
|
Greenfield
Capital Partners, LLC
|
Michael
Byl (2)
|
(1) |
Barry
Herman and Stephen Hicks disclaim beneficial ownerships of Global
Matrechs
shares held by Brittany
|
(2) |
Michael
Byl disclaims beneficial ownerships of Global Matrechs shares held
by
Greenfield Capital Partners, LLC
|
· |
Overview. This
section provides a general description of us, as well as recent
developments and events that have occurred since September 30, 2005,
the
date of the most recent interim financials we have included with
this
prospectus and discuss in this section, that we believe are of particular
importance in assessing our company and anticipating future
trends.
|
· |
Matters
Relating to Historical Financial Statements.
We
have included discussion and supplemental financial data relating
to the
restatement of certain financial information contained in the financial
statements accompanying this prospectus. We urge you to carefully
review
this information in conjunction with our financial
statements.
|
· |
Results
of Operations.
This section provides an analysis of our results of operations for
the
fiscal years ended December 31, 2004 and 2003 and the three- and
nine-
month periods ended September 30, 2005 and
2004.
|
· |
Liquidity
and Capital Resources.
This section provides an analysis of our cash flows for the December
31,
2004 and 2003 fiscal years and the three- and nine- month periods
ended
September 30, 2005 and 2004, as well as a discussion of recent financing
transactions and current financing
arrangements.
|
· |
Critical
Accounting Policies. This
section discusses certain critical accounting policies that we consider
important to our financial condition and results of operations, and
that
required significant judgment and estimates on the part of management
in
application. Our significant accounting policies, including the critical
accounting policies discussed in this section, are summarized in
the notes
to the accompanying consolidated financial
statements.
|
· |
Impact
of Recently Issued Accounting Standards.
This section discusses how certain recently adopted accounting standards
have affected the substance of our financial
disclosure.
|
· |
NUCAP(TM),
formerly called EKOR(TM), a silicon based elastomer developed jointly
by
scientists at the I.V. Kurchatov Institute and members of the Euro-Asian
Physical Society, both based in Moscow, Russia for the purposes of
long
term isolation of radioactive or otherwise hazardous
materials.
|
· |
HNIPU,
a
hybrid polyurethane with uses in a number of industrial application
contexts such as manufacturing automotive components, paints, foams,
plastics and truck bed liners; aerospace sealants, industrial adhesives,
coatings, flooring, glues; industrial equipment and machinery; and
consumer goods such as appliances, footwear, furniture and plastic
products.
|
· |
the
issuance by True To Form to us of a promissory note described below
in
the initial principal amount of $250,000, which note accrues interest
at
an annual rate of one percent plus the prime rate as reported by
a
nationally recognized commercial bank and has a maturity date of
January
1, 2011;
|
· |
the
cancellation of our guaranty of the amounts owed under a promissory
note
issued by True to Form to Mr. Allen in connection with our acquisition
of
True to Form; and
|
· |
the
surrender by Mr. Allen of the 10,000,000 shares of our common stock
that
were issued to him as partial consideration for our purchase of True
to
Form on December 31, 2004 and the cancellation of all other equity
interest in Global Matrechs held by Mr.
Allen.
|
Series
|
QUARTER
ENDED
3/03
(reversal
recovery
of
deemed
preferred
stock
dividend)
|
QUARTER
ENDED
6/03
(removal
of
deemed
preferred
stock
dividend)
|
QUARTER
ENDED
9/03
(removal
of
interest
expense)
|
QUARTER
ENDED
12/03
(removal
of
interest
expense)
|
QUARTER
ENDED
3/04
(removal
of
interest
expense)
|
QUARTER
ENDED
6/04
(removal
of
interest
expense)
|
QUARTER
ENDED
9/04
(removal
of
interest
expense)
|
TOTAL
INTEREST
|
TOTAL
|
B
|
$
43,720
|
$
4,446
|
$
4,446
|
$
4,446
|
$
4,446
|
$
4,446
|
$
2,223
|
$
20,007
|
$
68,173
|
C
|
239,987
|
27,143
|
27,143
|
27,143
|
27,143
|
27,143
|
13,572
|
122,144
|
389,274
|
D
|
4,131
|
387
|
387
|
387
|
387
|
387
|
194
|
1,742
|
6,260
|
E
|
1,239,333
|
127,620
|
127,620
|
127,620
|
127,620
|
127,620
|
63,810
|
574,290
|
1,941,243
|
TOTAL
|
$1,527,171
|
$159,596
|
$159,596
|
$159,596
|
$159,596
|
$159,596
|
$79,799
|
$718,183
|
$2,404,950
|
Global
Matrechs, Inc.
Selected
Quarterly Financial Data (Unaudited)
|
2004
|
||||
March
31,
|
June
30,
|
September
30,
|
|||
restated
|
restated
|
restated
|
|||
Selected
Balance Sheet Data:
|
|||||
Total
assets
|
1,220,218
|
941,694
|
888,136
|
||
Accounts
payable and accrued expenses
|
529,455
|
393,316
|
376,941
|
||
Notes
payable, current
|
364,000
|
—
|
380,851
|
||
Convertible
preferred stock
|
5,596,453
|
5,670,865
|
—
|
||
Derivative
conversion feature - convertible preferred stock
|
1,142,323
|
1,107,450
|
1,159,869
|
||
Total
current liabilities
|
7,632,231
|
7,171,631
|
1,917,661
|
||
Notes
payable
|
—
|
477,500
|
—
|
||
Convertible
preferred stock
|
—
|
—
|
—
|
||
Total
liabilities
|
7,632,231
|
7,649,131
|
1,917,661
|
||
Temporary
equity
|
1,069,000
|
1,069,000
|
6,802,698
|
||
Common
and preferred stock
|
1,635
|
1,635
|
1,243
|
||
Treasury
stock
|
(8,659)
|
(8,659)
|
(327,484)
|
||
Additional
paid in capital
|
19,183,057
|
19,243,209
|
19,882,586
|
||
Accumulated
deficit
|
(26,618,595)
|
(26,960,712)
|
(27,371,379)
|
||
Total
stockholders' deficit
|
(7,442,562)
|
(7,724,527)
|
(7,815,034)
|
||
Total
liabilities and stockholders' deficit
|
1,258,669
|
993,604
|
905,325
|
||
Revenues
|
620
|
—
|
—
|
||
Income
(loss) from operations
|
(311,815)
|
(231,996)
|
(203,176)
|
||
Other
income (expense)
|
(82,212)
|
(85,091)
|
(117,620)
|
||
Change
in fair value of derivative conversion feature
|
(13,460)
|
34,873
|
(54,847)
|
||
Income
(loss) on disposal or discontinued operations
|
43,189
|
(73,211)
|
—
|
||
Net
income (loss)
|
(364,298)
|
(355,425)
|
(375,643)
|
||
Basic
and diluted earnings per share
|
(0.02)
|
(0.02)
|
(0.03)
|
||
Weighted
number of shares outstanding
|
14,999,157
|
14,999,157
|
14,999,157
|
|
Global
Matrechs, Inc.
Selected
Quarterly Financial Data (Unaudited)
|
2003
|
||||
March
31,
|
June
30,
|
September
30,
|
|||
restated
|
restated
|
restated
|
Selected
Balance Sheet Data:
|
|||||
Total
assets
|
499,610
|
1,461,129
|
1,412,861
|
||
Accounts
payable and accrued expenses
|
434,231
|
358,596
|
336,172
|
||
Notes
payable, current
|
—
|
100,000
|
175,000
|
||
Convertible
preferred stock
|
—
|
—
|
5,447,629
|
||
Derivative
conversion feature - convertible preferred stock
|
1,817,604
|
1,216,200
|
1,157,359
|
||
Total
current liabilities
|
2,251,835
|
1,674,796
|
7,116,160
|
||
Notes
payable
|
—
|
—
|
—
|
||
Convertible
preferred stock
|
—
|
—
|
1,069,000
|
||
Total
liabilities
|
2,251,835
|
1,674,796
|
8,185,160
|
||
Temporary
equity
|
5,298,805
|
6,442,217
|
—
|
||
Common
and preferred stock
|
1,500
|
1,500
|
1,635
|
||
Treasury
stock
|
(8,659)
|
(8,659)
|
(8,659)
|
||
Additional
paid in capital
|
19,339,775
|
19,182,735
|
19,182,753
|
||
Accumulated
deficit
|
(26,416,952)
|
(25,104,269)
|
(25,822,242)
|
||
Total
stockholders' deficit
|
(7,084,336)
|
(5,928,693)
|
(6,646,513)
|
||
Total
liabilities and stockholders' deficit
|
466,304
|
2,188,320
|
1,538,647
|
||
Revenues
|
406,522
|
411,218
|
410,005
|
||
Income
(loss) from continuing operations
|
69,532
|
(67,353)
|
(98,119)
|
||
Other
income (expense)
|
70,191
|
18,285
|
(77,138)
|
||
Change
in fair value of derivative conversion feature
|
(760,498)
|
601,404
|
58,840
|
||
Cumulative
effect of change in accounting principle
|
—
|
—
|
—
|
||
Net
income (loss)
|
(620,775)
|
552,336
|
(116,417)
|
||
Deemed
preferred stock dividend
|
(91,581)
|
(157,178)
|
—
|
||
Recovery
of deemed preferred stock dividend
|
1,527,171
|
—
|
—
|
||
Net
income (loss) applicable to common shareholders
|
814,815
|
395,158
|
(116,417)
|
||
Basic
earnings per share
|
0.00
|
0.03
|
(0.01)
|
||
Weighted
number of shares outstanding-basic
|
284,874,235
|
14,999,156
|
14,999,156
|
||
Diluted
earnings per share
|
0.00
|
0.03
|
(0.01)
|
||
Weighted
number of common shares outstanding-diluted
|
284,874,235
|
14,999,156
|
14,999,156
|
Year
ended December 31,
|
||||||||||||||||
2000
|
2001
|
2002
|
2003
|
2004
|
||||||||||||
restated
|
restated
|
restated
|
restated
|
|||||||||||||
Statement
of Operations Data:
|
||||||||||||||||
Revenues
|
—
|
—
|
—
|
8,246
|
620
|
|||||||||||
Cost
of Revenues
|
—
|
—
|
—
|
8,731
|
558
|
|||||||||||
Gross
Profit (loss)
|
—
|
—
|
—
|
(485)
|
62
|
|||||||||||
Operating
expenses:
|
||||||||||||||||
General
and administrative
|
1,192,406
|
286,949
|
187,449
|
325,281
|
1,273,929
|
|||||||||||
Depreciation
and amortization
|
1,605,345
|
—
|
—
|
115,059
|
197,244
|
|||||||||||
Asset
impairment
|
1,436,078
|
493,905
|
52,584
|
—
|
—
|
|||||||||||
Total
operating expenses
|
4,233,829
|
780,851
|
240,033
|
440,340
|
1,471,173
|
|||||||||||
Operating
loss
|
(4,233,829
|
)
|
(
780,851
|
)
|
(240,033
|
)
|
(440,825
|
)
|
(1,471,111
|
)
|
||||||
Other
expenses (income):
|
||||||||||||||||
Interest
expense (income)
|
(5,981
|
)
|
—
|
—
|
160,099
|
1,621,520
|
||||||||||
Change
in fair value of derivative conversion feature
|
—
|
(125,980
|
)
|
92,674
|
98,678
|
29,534
|
||||||||||
Change
in fair value of warrants
|
—
|
—
|
—
|
57,637
|
||||||||||||
Other
expense (income), net
|
(90,793
|
)
|
(146,362
|
)
|
(26,146
|
)
|
(91,826
|
)
|
(211,395
|
)
|
||||||
Loss
from continuing operations before income taxes
|
(4,137,055
|
)
|
(508,509
|
)
|
(306,561
|
)
|
(607,776
|
)
|
(2,968,407
|
)
|
||||||
Income
tax provision (benefit)
|
—
|
—
|
—
|
—
|
—
|
|||||||||||
Loss
from continuing operations
|
(4,137,055
|
)
|
(508,509
|
)
|
(306,561
|
)
|
(607,776
|
)
|
(2,968,407
|
)
|
||||||
Gain
(loss) from discontinued operations
|
(2,223,295
|
)
|
(212,515
|
)
|
118,001
|
176,008
|
94,363
|
|||||||||
Cumulative
effect of change in accounting principle
|
—
|
—
|
—
|
—
|
—
|
|||||||||||
Gain
(loss) on disposal of business segment
|
(3,000,377
|
)
|
394,453
|
—
|
(125,030
|
)
|
(124,385
|
)
|
||||||||
Net
loss
|
(9,360,727
|
)
|
(326,571
|
)
|
(188,560
|
)
|
(556,798
|
)
|
(2,998,429
|
)
|
||||||
Deemed
preferred stock dividend
|
(1,526,728
|
)
|
(2,150,368
|
)
|
(1,004,681
|
)
|
(248,759
|
)
|
—
|
|||||||
Recovery
of deemed preferred stock dividend
|
1,527,171
|
|||||||||||||||
Net
loss applicable to common shareholders
|
(10,887,455
|
)
|
(2,476,939
|
)
|
(1,193,241
|
)
|
721,614
|
(2,998,429
|
)
|
|||||||
Net
income (loss) per common share
|
||||||||||||||||
Basic
Continuing
operations
|
(0.66
|
)
|
(0.27
|
)
|
(0.01
|
)
|
0.02
|
(0.18
|
)
|
|||||||
Cumulative
effect of change in accounting principle
|
0.00
|
|||||||||||||||
Discontinued
operations
|
(0.61
|
)
|
0.02
|
0.01
|
0.00
|
(0.00
|
)
|
|||||||||
Total
|
(1.27
|
)
|
(0.25
|
)
|
(0.01
|
)
|
0.02
|
(0.18
|
)
|
|||||||
Weighted
average common shares outstanding
|
8,549,693
|
9,869,074
|
214,687,508
|
31,820,137
|
16,790,165
|
|||||||||||
Diluted
Continuing operations
|
(0.66
|
)
|
(0.27
|
)
|
(0.01
|
)
|
0.02
|
(0.18
|
)
|
|||||||
Cumulative
effect of change in accounting principle
|
0.00
|
0.00
|
0.00
|
0.00
|
0.00
|
|||||||||||
Discontinued
operations
|
(0.61
|
)
|
0.02
|
0.01
|
0.00
|
0.00
|
||||||||||
Total
|
(1.27
|
)
|
(0.25
|
)
|
(0.01
|
)
|
0.02
|
(0.18
|
)
|
|||||||
Weighted
average common and convertible shares outstanding
|
8,549,693
|
9,869,074
|
214,687,508
|
31,820,137
|
16,790,165
|
|||||||||||
Balance
Sheet Data:
|
||||||||||||||||
Working
capital (deficit)
|
(823,406
|
)
|
(968,336
|
)
|
(1,714,241
|
)
|
(7,060,705
|
)
|
(2,780,402
|
)
|
||||||
Total
assets
|
2,528,973
|
665,391
|
507,554
|
1,350,281
|
2,834,876
|
|||||||||||
Long-term
liabilities
|
357,757
|
940,847
|
1,057,106
|
—
|
1,157,750
|
|||||||||||
Total
liabilities
|
2,298,013
|
2,482,153
|
3,174,848
|
7,434,198
|
4,547,047
|
|||||||||||
Convertible
preferred stock
|
251,750
|
4,840,932
|
5,207,224
|
5,522,041
|
6,128,223
|
|||||||||||
Stockholders'
equity (deficit)
|
(20,790
|
)
|
(6,657,696
|
)
|
(7,874,518
|
)
|
(7,152,917
|
)
|
(7,840,394
|
)
|
Preferred
|
Common
|
Additional
|
|||||||||||||||||||||||
Treasury
|
Paid-In
|
Accumulated
|
Stockholders’
|
||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Stock
|
Capital
|
Deficit
|
Deficit
|
||||||||||||||||||
Balance,
December 31, 2001, as issued
|
198
|
$
|
3
|
14,999,157
|
$
|
1,500
|
$
|
(8,659
|
)
|
$
|
24,587,964
|
$
|
(25,700,291
|
)
|
$
|
(1,119,483
|
)
|
||||||||
Adjustments
to opening balances
|
(198
|
)
|
(3
|
)
|
(4,620,540
|
)
|
917,670
|
(5,538,213
|
)
|
||||||||||||||||
Balance,
December 31, 2001, as restated
|
—
|
—
|
14,999,157
|
1,500
|
(8,659
|
)
|
19,990,603
|
(25,700,291
|
)
|
(5,716,847
|
)
|
||||||||||||||
Guaranteed
return to Series B, C, D and E
|
(297,948
|
)
|
(297,948
|
)
|
|||||||||||||||||||||
preferred
stockholders
|
(91,928
|
)
|
(91,928
|
)
|
|||||||||||||||||||||
Amortization
of beneficial conversion feature to Series E preferred
stockholders
|
(638,387
|
)
|
(638,387
|
)
|
|||||||||||||||||||||
Penalties
on preferred stock
|
(188,560
|
)
|
(188,560
|
)
|
|||||||||||||||||||||
Net
loss
|
(8,659
|
)
|
18,939,161
|
(27,363,319
|
)
|
(7,874,519
|
)
|
||||||||||||||||||
Balance,
December 31, 2002
|
—
|
—
|
14,999,157
|
1,500
|
(135
|
)
|
—
|
||||||||||||||||||
Issuance
of Series H preferred stock
|
13,500
|
135
|
|||||||||||||||||||||||
Guaranteed
return to Series B, C, D and E
|
(148,824
|
)
|
(148,824
|
)
|
|||||||||||||||||||||
preferred
stockholders
|
|||||||||||||||||||||||||
Amortization
of beneficial conversion feature to Series E and G preferred
stockholders
|
(99,947
|
)
|
(99,947
|
)
|
|||||||||||||||||||||
Recovery
of deemed preferred stock dividend
|
1,527,171
|
1,527,171
|
|||||||||||||||||||||||
Net
loss
|
(556,798
|
)
|
(556,798
|
)
|
|||||||||||||||||||||
Balance,
December 31, 2003
|
13,500
|
135
|
14,999,157
|
1,500
|
(8,659
|
)
|
20,217,426
|
(27,353,319
|
)
|
(7,152,917
|
)
|
||||||||||||||
Issuance
of Series I preferred stock
|
490
|
5
|
5
|
||||||||||||||||||||||
Receipt
of Treasury stock
|
(4,905,000
|
)
|
(490
|
)
|
(318,825
|
)
|
319,312
|
(3
|
)
|
||||||||||||||||
Issuance
of Common Stock
|
2,151,081
|
215
|
104,850
|
105,065
|
|||||||||||||||||||||
Beneficial
Conversion feature on promissory notes, net of expenses
|
526,459
|
526,459
|
|||||||||||||||||||||||
Issuance
of warrants for services rendered
|
258,942
|
258,942
|
|||||||||||||||||||||||
Conversion
of Series H preferred stock to common stock
|
(150
|
)
|
(2
|
)
|
1,500,000
|
150
|
(135
|
)
|
--
|
||||||||||||||||
Conversion
of temporary equity to common Stock
|
22,150,193
|
2,215
|
818,269
|
820,484
|
|||||||||||||||||||||
Acquisition
of True To Form Ltd.
|
10,000,000
|
1,000
|
599,000
|
600,000
|
|||||||||||||||||||||
Net
loss
|
(2,998,429
|
)
|
(2,998,429
|
)
|
|||||||||||||||||||||
Balance,
December 31, 2004
|
13,840
|
$
|
138
|
45,895,431
|
$
|
4,590
|
$
|
(327,484
|
)
|
$
|
22,844,110
|
$
|
(30,361,748
|
)
|
$
|
(7,840,394
|
)
|
|
At
September
30,
2005
(unaudited)
|
At
December
31,
2004
(restated)
|
Percentage
Increase
/
(Decrease)
|
|||||||
Current
Assets
|
$
|
334,694
|
$
|
608,895
|
(45%)
|
|
||||
Current
Liabilities
|
5,803,909
|
3,389,297
|
71%
|
|
||||||
Working
Capital (Deficit)
|
$
|
(5,469,215
|
)
|
$
|
(2,780,402
|
)
|
97%
|
|
Hypothetical
Market Price
|
Discounted
Market
Price
|
Shares
to be issued
|
$0.025
|
$0.0230
|
2,173,913
|
$0.020
|
$0.0187
|
2,717,391
|
$0.015
|
$0.0138
|
3,623,188
|
$0.010
|
$0.0092
|
5,434,783
|
$0.005
|
$0.0046
|
10,869,565
|
· |
As
described above, the lower our stock price is, the more shares we
would
have to issue for a given draw down amount, and the more shares we
issue,
the greater the extent of dilution to the ownership interest of our
current stockholders. To illustrate, if we issue and sell all of
the
shares being offered under this prospectus they would represent
approximately 40% of our outstanding common stock after giving effect
to
such issuance.
|
· |
Because
the shares we may issue under the Private Equity Credit Agreement
are
discounted, the issuance of these shares will also have a financially
dilutive impact on our current
stockholders.
|
· |
The
Brittany’s sale of material amounts of our common stock into the market
may result in significant downward pressure on the price of the common
stock as the supply of freely tradable shares increases. Furthermore,
this
downward pressure may encourage short sales, which could further
depress
on the price of the common stock.
|
3.
|
Grout,
applied in a pour and mix method, which can be used to make shapes
for
shielding or to macroencapsulate items to form an unleachable monolith
for
transportation or disposal;
|
4.
|
Matrix,
applied in a pour and mix method, which can be used to microencapsulate
radioactive or hazardous wastes to form an elastomeric monolith for
transportation or disposal; and
|
5.
|
StoneStore,
applied in a pour and mix method, which can be used to microencapsulate
highly radioactive waste and will form a ceramic monolith for permanent
disposal. StoneStore is still in the research and development stage.
|
· |
Strength.
RBHM's strength characteristics, especially combined with low elongation
and acquired water resistance of the material, make RBHM unique and
desirable for packaging applications.
|
· |
Water
Resistance. RBHM keeps water resistance for one week. Most of the
existing
biodegradable packaging products are not hydrophobic at all and will
fail
if wetted during use.
|
· |
Biodegradable
Nature. Enzymes begin breaking down RBHM in the presence of moisture
in
natural environments such as soil. Then microorganisms decompose
the
material with rapidly occurring metabolic reactions. RBHM is completely
converted into carbon dioxide, water, and biomass in two to three
months
in wet soil.
|
· |
Reproducible
Natural Raw Materials. RBHM uses cellulose, a widely available and
renewable raw material.
|
· |
Relatively
Low Cost. The main obstacle to widespread use of biodegradable polymers
has been cost. Biodegradable polymers are traditionally significantly
more
expensive than commodity polymers. The high costs involved in the
production of biodegradable polymers means that they cannot compete
favorably with conventional polymers. This high cost has deterred
the
widespread adoption of biodegradable plastics in major consumer
applications. At an additional cost of less than 10%, and sometimes
less
depending on the type of material treated, materials treated with
RBHM
provide plastic-like performance and are biodegradable.
|
Name
|
Age
|
Position
|
||
Michael
Sheppard
|
56
|
Chief
Executive Officer, President, Acting Chief Financial Officer, Chief
Operating Officer, and Chairman of the Board
|
||
Thomas
L. Folsom
|
53
|
Director
|
||
K.
Ivan F. Gothner
|
47
|
Director
|
Annual
Compensation
|
||||||||||
Name
and Position (1)(6)
|
Year
|
Salary
($)
|
Bonus
($) (1)
|
|||||||
George
Bokuchava, Ph.D (2)
Chief
Technical Officer
|
2004
2003
2002
|
$
$
$
|
56,250
111,250
105,000
|
0
0
0
|
||||||
Timothy
R. Robinson (3)
Executive
Vice President, Chief Financial Officer
|
2004
2003
2002
|
$
$
$
|
56,250
135,000
135,000
|
40,000
0
$25,000
|
||||||
Nino
Doijashvili (4)
Director
of Technical Services
|
2004
2003
2002
|
$
$
|
108,875
102,000
|
0
0
0
|
||||||
Michael
Sheppard (5)
President,
Chief Executive
Officer
and Chief Operations Officer
|
2004
2003
2002
|
$
$
|
158,000
119,000
—
|
0
—
—
|
||||||
Mark
J. Allen (6)
Executive
Vice President
|
2004
2003
2002
|
$
|
50,000
0
0
|
(1) |
Each
of the Company’s executive officers also is eligible to receive cash
bonuses to be awarded at the discretion of the Compensation Committee
of
the Board of Directors.
|
(2) |
George
Bokuchava, Ph.D. served as our chief technical officer until May
31,
2004.
|
(3) |
Timothy
Robinson served as our executive vice president and chief financial
officer until July 2004.
|
(4) |
Nino
Doijashvili, Ph.D. served as our director of technical services until
May
2004.
|
(5) |
Michael
Sheppard served as our vice president of our licensed technologies
division until July 2004 when he was appointed by the board of directors
to serve as our president, acting chief financial officer and chief
operating officer.
|
(6) |
No
options were granted to or exercised by named executive officers
in 2004.
No executive officers held any options at December 31, 2004. Mr.
Allen
resigned on December 29, 2005.
|
Number
of Securities
Underlying
Unexercised
Options
at FY-End (#)
|
Value
of Unexercised In-
The-Money
Options at
FY-End
($)
|
|||||||
Name
|
Exercisable |
Unexercisable
|
Exercisable | Unexercisable | ||||
George
Bokuchava, Ph.D.
|
25,000
|
0
|
$0
|
$0
|
||||
Timothy
R. Robinson
|
150,000
|
0
|
$0
|
$0
|
||||
Nino
Doijashvili
|
46,428
|
0
|
$0
|
$0
|
||||
Michael
Sheppard
|
0
|
0
|
$0
|
$0
|
· |
$25,000
if net sales exceeded $1,000,000;
|
· |
$25,000
if net sales exceeded $2,000,000; and
|
· |
$100,000
if net sales exceeded $4,000,000.
|
· |
Our
employment agreement with Timothy R. Robinson, our executive vice
president and chief financial officer provided for an annual base
salary
of $135,000 and for annual
bonus
|
compensation
up to 30% of base salary. He
was also awarded 150,000 stock options at $0.75 per share. If we
terminated the agreement without cause, if there was a change of
control
of the company, or if we relocated Mr. Robinson or diminished his
title, role or compensation, we would have been required to pay
him an
amount equal to six months’ salary. Mr. Robinson was entitled to
participate in our employee fringe benefit plans or programs generally
available to our employees. The agreement required Mr. Robinson
to
maintain the confidentiality of our proprietary information. In
addition,
under certain circumstances, it prohibited Mr. Robinson, for a
period of
18 months after his employment with us ends, from engaging in any
business
activity, which is in competition with our business.
|
· |
Our
employment agreement with George Bokuchava, our chief technical officer
provided for an annual base salary of not less than $105,000. If
we
terminated the agreement without cause or if there was change in
control,
we would be required to pay him an amount equal to nine months’ salary.
The agreement required Mr. Bokuchava to maintain the confidentiality
of
our proprietary information.
|
· |
Our
employment agreement with Nino Doijashvili, our director technical
services. We paid her an annual base salary of not less than $10,200.
The
agreement required her to maintain the confidentiality of our proprietary
information. In addition, it prohibited Ms. Doijashvili, for a period
of
18 months after her employment with us ends, from engaging in any
business
activity, which is in competition with our business.
|
Plan
Category
|
Number
of securities
to
be issued upon
exercise
of
outstanding
options,
warrants
and rights
|
Weighted-average
exercise
price of
outstanding
options,
warrants
and
rights
|
Number
of securities
remaining
available
for
future issuance
under
equity
compensation
plans
|
|||||||
Equity
Compensation Plans Approved
by
Security Holders
|
329,419
|
$
|
2.61
|
329,419
|
||||||
Equity
Compensation Plans Not Approved
by
Security Holders
|
N/A
|
N/A
|
N/A
|
|||||||
Total
|
329,419
|
$
|
2.61
|
329,419
|
· |
each
person known by us to be the beneficial owner of more than five percent
of
our common stock;
|
· |
each
of our directors;
|
· |
each
executive officer named in the summary compensation table;
and
|
· |
all
of our current directors and executive officers as a
group.
|
Shares
Beneficially Owned
|
|||||||||||||
Name
and Address of Beneficial Owner
|
Outstanding
|
Right
to
Acquire
|
Total
|
Percent
|
|||||||||
Randolph
Graves (1)
|
0
|
300,000
|
300,000
|
*
|
|||||||||
George
Bokuchava, Ph.D. (2)
|
40,059
|
25,000
|
64,559
|
*
|
|||||||||
Nino
Doijashvili (3)
|
5,444
|
46,428
|
51,372
|
*
|
|||||||||
Timothy
Robinson (4)
|
0
|
150,000
|
150,000
|
*
|
|||||||||
Mark
Allen
|
0
|
0
|
0
|
*
|
|||||||||
Michael
Sheppard
|
0
|
1,200,000
|
1,200,000
|
*
|
Shares
Beneficially Owned
|
|||||||||||||
Name
and Address of Beneficial Owner
|
Outstanding
|
Right
to
Acquire
|
Total
|
Percent
|
|||||||||
Thomas
L. Folsom
|
0
|
0
|
0
|
*
|
|||||||||
K.
Ivan F. Gothner
|
0
|
100,000
|
100,000
|
*
|
|||||||||
All
current directors and executive officers as a
group
(3 persons)
|
0
|
1,300,000
|
1,300,000
|
*
|
* |
Represents
beneficial ownership of less than
1.0%.
|
(1) |
Mr.
Graves resigned from our company on May 16,
2005.
|
(2) |
Mr.
Bokuchava resigned from our company on May 31,
2004.
|
(3) |
Mr.
Doijashvili resigned from our company on May 31,
2004.
|
(4) |
Mr.
Robinson resigned from our company as an officer on May 31, 2004
and as a
director on July 1, 2004.
|
(5) |
Mr.
Allen resigned from our company as an officer and director on December
29,
2005.
|
· |
Our
subsidiary True To Form issued to Mark Allen a secured note in principal
amount of $500,000, payable over five years at an annual interest
rate of
8%, with $100,000 due after one year and the remaining principal
amount
due on December 31, 2009; and
|
· |
We
issued to Mark Allen 10,000,000 shares of our common stock. We refer
to
these shares as the share consideration. The share consideration
is
subject to the following adjustments. If True To Form generates gross
revenues of at least $3,000,000 for the twelve months ended December
31,
2006, and the value of 10,000,000 shares initially issued as consideration
is less than $2.5 million, we will be required to issue additional
shares
or, at our option, pay cash to cover the difference. However, if
the value
of the initial shares on December 31, 2006 exceeds $3.5 million,
Mr. Allen
will be required to return to us such portion of the initial shares
equal
in value to the excess. If True To Form’s gross revenues fail to meet or
exceed the $3 million threshold, the aforementioned minimum and maximum
values will be $2.0 million and $3.0 million, respectively. The additional
shares that we may be
|
required
to issue to adjust the share consideration in accordance with the
terms of
the Agreement and Plan of Merger are not covered by these registration
statement.
|
· |
The
note is secured by all of the assets of True To Form under the terms
of a
Security Agreement by and between True To Form and Mr. Allen, entered
into
on December 31, 2004. In addition, we have guaranteed the note in
full
pursuant to the terms of a guaranty issued to Mr. Allen entered into
on
December 31, 2004, and pledged as collateral to the note all of the
common
stock of True To Form in favor of Mr. Allen pursuant to the terms
of a
collateral pledge agreement entered into on December 31,
2004.
|
· |
the
issuance by True To Form to us of a promissory note described below
in
the initial principal amount of $250,000, which note accrues interest
at
an annual rate of one percent plus the prime rate as reported by
a
nationally recognized commercial bank and has a maturity date of
January
1, 2011;
|
· |
the
cancellation of our guaranty of the amounts owed under a promissory
note
issued by True to Form to Mr. Allen in connection with our acquisition
of
True to Form; and
|
· |
the
surrender by Mr. Allen of the 10,000,000 shares of our common stock
that
were issued to him as partial consideration for our purchase of True
to
Form on December 31, 2004 and the cancellation of all other equity
interest in Global Matrechs held by Mr.
Allen.
|
· |
175
shares are designated as Series C preferred stock, of which .99 shares
are
outstanding;
|
· |
106.4
shares are designated as Series E preferred stock, of which 77.4
shares
are outstanding;
|
· |
1,069
shares are designated as Series G preferred stock, of which 1,069
shares
are outstanding;
|
· |
13,500
shares are designated as Series H preferred stock, of which 12,582
shares
are outstanding; and
|
· |
490.5
shares are designated as Series I preferred stock, of which 490.5
shares
are outstanding.
|
Series
|
Premium
per
Share
|
|||
Series
C
|
|
$
1,000
|
||
Series
E
|
|
$
1,600
|
Series
|
Percent
Limitation
|
|||
Series
C
|
4.9%
|
|
||
Series
E
|
4.9%
|
|
||
Series
G
|
9.9%
|
|
||
Series
H
|
9.9%
|
|
||
Series
I
|
9.9%
|
|
· |
for
the division of the board of directors into three classes as nearly
equal
in size as possible with staggered three-year terms;
|
· |
That
directors may be removed only for cause by the affirmative vote of
the
holders of at least 75% in voting power of our shares of capital
stock
entitled to vote; and
|
· |
any
vacancy on the board of directors, however occurring, including a
vacancy
resulting from an enlargement of the board, may be filled only by
the vote
of a majority of the directors then in
office.
|
· |
any
action required or permitted to be taken by our stockholders at an
annual
meeting or special meeting of stockholders may only be taken if it
is
properly brought before the meeting;
and
|
· |
special
meetings of the stockholders may be called by the board of directors,
the
chairman of the board of directors, or at the request of the holder
or
holders of not less than 40% in voting power of our shares of capital
stock issued and outstanding and entitled to vote on the issue to
be voted
on at the special meeting.
|
· |
for
any breach of the director’s duty of loyalty to us or our stockholders;
|
· |
for
acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of law;
|
· |
for
unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the Delaware General
Corporation Law; or
|
· |
for
any transaction from which the director derives an improper personal
benefit.
|
· |
a
block trade in which a broker-dealer engaged by a selling stockholder
will
attempt to sell the shares as agent, but may position and resell
a portion
of the block as principal to facilitate the transaction;
|
· |
purchases
by a broker-dealer as principal and resale by such broker-dealer
for its
account under this prospectus;
|
· |
an
over-the-counter distribution in accordance with the rules of the
OTC
Bulletin Board;
|
· |
ordinary
brokerage transactions in which the broker solicits purchasers;
and
|
· |
privately
negotiated transactions.
|
· |
read
a copy of the registration statement, including the exhibits and
schedules, without charge at the SEC’s Public Reference Room; or
|
· |
obtain
a copy from the SEC upon payment of the fees prescribed by the SEC.
|
AUDITED
FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 31,
2004
|
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated
Statements of Operations for each of the Three Years in the Period
Ended
|
|
December
31, 2004
|
F-3
|
Consolidated
Balance Sheets as of December 31, 2003 and 2004
|
F-4
|
Consolidated
Statements of Changes in Stockholders' Equity (Deficit)
|
|
for
each of the Three Years in the Period Ended December 31, 2004
|
F-5
|
Consolidated
Statements of Cash Flows for Each of the Three Years in the Period
Ended
|
|
December
31, 2004.
|
F-7
|
Notes
to Consolidated Financial Statements
|
F-8
|
UNAUDITED
FINANCIAL STATEMENTS FOR THE THREE- AND NINE- MONTH
PERIODS
ENDED
SEPTEMBER 30,
2005
|
|
|
|
Consolidated
Balance Sheets as of September 30, 2005
|
F-30
|
Consolidated
Statements of Operations
|
F-31
|
Consolidated
Statements of Cash Flows
|
F-32
|
Notes
to Unaudited Consolidated Financial Statements
|
F-33
|
December
31,
|
|||||||
2003
RESTATED
|
2004
RESTATED
|
||||||
ASSETS
|
|||||||
CURRENT
ASSETS:
|
|||||||
Cash
and cash equivalents
|
$
|
71,818
|
$
|
131,470
|
|||
Accounts
receivable, net
|
274,418
|
94,551
|
|||||
Prepaid
expenses
|
27,257
|
242,110
|
|||||
Inventory
|
—
|
67,906
|
|||||
Loan
to Tulix
|
—
|
72,858
|
|||||
Total
current assets
|
373,493
|
608,895
|
|||||
Fixed
Assets
|
105,624
|
28,430
|
|||||
Deposits
|
—
|
2,575
|
|||||
Investment
in Tulix
|
—
|
51,949
|
|||||
Intangible
Assets
|
986,223
|
986,223
|
|||||
Less:
Accumulated Amortization
|
(115,059
|
)
|
(312,304
|
)
|
|||
Goodwill
|
—
|
1,469,108
|
|||||
Intangibles,
net
|
871,164
|
2,143,027
|
|||||
Total
assets
|
$
|
1,350,281
|
$
|
2,834,876
|
LIABILITIES
AND STOCKHOLDERS’
DEFICIT
|
|||||||
CURRENT
LIABILITIES:
|
|||||||
Accounts
payable and accrued expenses
|
$
|
501,372
|
$
|
574,236
|
|||
Loans
payable
|
__
|
182,784
|
|||||
Due
to officer
|
-
|
147,309
|
|||||
Current
maturities of long-term debt
|
-
|
106,860
|
|||||
Convertible
loans payable - net of discount
|
255,000
|
1,327,245
|
|||||
Convertible
preferred stock
|
5,522,041
|
-
|
|||||
Derivative
conversion feature - convertible preferred stock
|
1,155,785
|
1,050,863
|
|||||
TOTAL
CURRENT LIABILITIES
|
7,434,198
|
3,389,297
|
|||||
Warrant
liability
|
-
|
742,448
|
|||||
Long
term debt-net of current maturities
|
-
|
415,302
|
|||||
TOTAL
LIABILITIES
|
7,434,198
|
4,547,047
|
|||||
Convertible
preferred stock
|
-
|
6,128,223
|
|||||
STOCKHOLDERS’
DEFICIT:
|
|||||||
Common
stock, $.0001 par value, 300,000,000 shares authorized and
45,895,431
shares issued and outstanding at December 31, 2004 and 15,000,000
shares
authorized, 14,999,156 shares issued and outstanding at December
31, 2003
|
1,500
|
4,590
|
|||||
Preferred
stock, Series H, $.01 par value, 13,500 shares authorized,
13,350 shares
issued and outstanding at December 31, 2004 and 13,500 shares
authorized
and 13,500 shares issued and outstanding at December 31, 2003,
convertible, participating, $13,350,000 liquidation value at
December 31,
2004 and $13,500,000 liquidation value at December 31, 2003
|
135
|
133
|
|||||
Preferred
stock, Series I, $.01 par value, 13,500 shares authorized,
13,500 shares
issued and outstanding at December 31, 2004 and December 31,
2003,
convertible, participating, $13,500,000 liquidation value at
December 31,
2004 and December 31, 2003
|
—
|
5
|
|||||
Treasury
Stock
|
(8,659
|
) |
(327,484
|
) |
Additional
Paid in Capital
|
20,217,426
|
22,844,110
|
|||||
Accumulated
deficit
|
(27,363,319)
|
(30,361,748)
|
|||||
Total
stockholders’ deficit
|
(7,152,917
|
)
|
(7,840,394
|
)
|
Total
liabilities and stockholders’ deficit
|
$
|
1,350,281
|
$
|
2,834,876
|
|
Year
Ended December 31,
|
|||||||||
|
2002
restated
|
2003
restated
|
2004
restated
|
|||||||
Revenues
|
$
|
—
|
$
|
8,246
|
$
|
620
|
||||
Total
Cost of Sales
|
—
|
8,731
|
558
|
|||||||
Gross
profit
|
—
|
(485
|
)
|
62
|
||||||
Operating
expenses:
|
||||||||||
Sales
and Marketing
|
||||||||||
Product
Development
|
||||||||||
General
and Administrative
|
187,449
|
325,281
|
1,273,929
|
|||||||
Depreciation
and Amortization
|
—
|
115,059
|
197,244
|
|||||||
Asset
Impairment Charge
|
52,584
|
—
|
—
|
|||||||
Total
Operating Expenses
|
240,033
|
440,340
|
1,471,173
|
|||||||
Operating
loss
|
(240,033
|
)
|
(440,825
|
)
|
(1,471,111
|
)
|
||||
Other
expenses (income):
|
||||||||||
Interest
Expense
|
160,099
|
1,621,520
|
||||||||
Change
in fair value of derivative conversion feature
|
92,674
|
98,678
|
29,534
|
|||||||
Change
in fair value of warrants
|
—
|
57,637
|
||||||||
Other
expense (income), net
|
(26,146
|
)
|
(91,826
|
)
|
(211,395
|
)
|
||||
Total
other expenses (income)
|
66,528
|
166,951
|
1,497,296
|
|||||||
Income
(loss) from continuing operations before income taxes
|
(306,561
|
)
|
(607,776
|
)
|
(2,968,407
|
)
|
||||
Income
tax provision (benefit)
|
||||||||||
Loss
from continuing operations
|
(306,561
|
)
|
(607,776
|
)
|
(2,968,407
|
)
|
||||
Income
from discontinued operations
|
118,001
|
176,008
|
94,363
|
|||||||
Gain
(loss) on disposal of business segment
|
—
|
(125,030
|
)
|
(124,385
|
)
|
|||||
Net
income (loss)
|
(188,560
|
)
|
(556,798
|
)
|
(2,998,429
|
)
|
||||
Recovery
of deemed preferred stock dividend
|
—
|
1,527,171
|
—
|
|||||||
Deemed
preferred stock dividend
|
(1,004,681
|
)
|
(248,759
|
)
|
—
|
|||||
Net
income (loss) applicable to common shareholders
|
$
|
(1,193,241
|
)
|
$
|
721,614
|
$
|
(2,998,429
|
)
|
||
|
||||||||||
Net
income (loss) per share - basic and diluted
|
||||||||||
Continuing
operations
|
$
|
(0.01
|
)
|
$
|
0.02
|
$
|
(0.18
|
)
|
||
Discontinued
operations
|
(0.00
|
)
|
0.00
|
(0.00
|
)
|
|||||
Net
income (loss) per share - basic and diluted
|
$
|
(0.01
|
)
|
$
|
0.02
|
$
|
(0.18
|
)
|
||
Weighted
average common shares outstanding
|
214,687,508
|
31,820,137
|
16,790,165
|
|||||||
|
||||||||||
PREFERRED
|
COMMON
|
ADDITIONAL
|
|||||||||||||||||||||||
TREASURY
|
PAID-IN
|
ACCUMULATED
|
STOCKHOLDERS’
|
||||||||||||||||||||||
SHARES
|
AMOUNT
|
SHARES
|
AMOUNT
|
STOCK
|
CAPITAL
|
DEFICIT
|
DEFICIT
|
||||||||||||||||||
Balance,
December 31, 2001, as issued
|
198
|
$
|
3
|
14,999,157
|
$
|
1,500
|
$
|
(8,659
|
)
|
$
|
24,587,964
|
$
|
(25,700,291
|
)
|
$
|
(1,119,483
|
)
|
||||||||
Adjustments
to opening balances
|
(198
|
)
|
(3
|
)
|
(4,620,540
|
)
|
(917,670
|
)
|
(5,538,213
|
)
|
|||||||||||||||
Balance,
December 31, 2001, as
|
|||||||||||||||||||||||||
restated
|
—
|
—
|
14,999,157
|
1,500
|
(8,659
|
)
|
19,967,424
|
(26,617,961
|
)
|
(6,657,696
|
)
|
||||||||||||||
Guaranteed
return to Series B, C, D
|
|||||||||||||||||||||||||
and
E preferred stockholders
|
(297,948
|
)
|
(297,948
|
)
|
|||||||||||||||||||||
Amortization
of beneficial
|
|||||||||||||||||||||||||
conversion
feature to Series E
|
|||||||||||||||||||||||||
preferred
stockholders
|
(91,928
|
)
|
(91,928
|
)
|
|||||||||||||||||||||
Penalties
on preferred stock
|
(638,387
|
)
|
(638,387
|
)
|
|||||||||||||||||||||
Net
loss
|
(188,560
|
)
|
(188,560
|
)
|
|||||||||||||||||||||
Balance,
December 31, 2002, as
|
|||||||||||||||||||||||||
restated
|
—
|
—
|
14,999,157
|
1,500
|
(8,659
|
)
|
18,939,161
|
(26,806,521
|
)
|
(7,874,519
|
)
|
||||||||||||||
Issuance
of Series H preferred stock
|
13,500
|
135
|
(135
|
)
|
—
|
||||||||||||||||||||
Guaranteed
return to Series B, C, D
|
|||||||||||||||||||||||||
and
E preferred stockholders
|
(148,824
|
)
|
(148,824
|
)
|
|||||||||||||||||||||
Amortization
of beneficial
|
|||||||||||||||||||||||||
conversion
feature to Series E and G
|
|||||||||||||||||||||||||
Preferred
stockholders
|
(99,947
|
)
|
(99,947
|
)
|
|||||||||||||||||||||
Recovery
of deemed preferred stock
|
|||||||||||||||||||||||||
dividend
|
1,527,171
|
1,527,171
|
|||||||||||||||||||||||
Net
loss
|
(556,798
|
)
|
(556,798
|
)
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||
Balance,
December 31, 2003, as
|
|||||||||||||||||||||||||
restated
|
13,500
|
135
|
14,999,157
|
1,500
|
(8,659
|
)
|
20,217,426
|
(27,363,319
|
)
|
(7,152,917
|
)
|
Issuance
of Series I preferred stock
|
490
|
5
|
5
|
||||||||||||||||||||||
Receipt
of Treasury stock
|
(4,905,000
|
)
|
(490
|
)
|
(318,825
|
)
|
319,312
|
(3
|
)
|
||||||||||||||||
Issuance
of Common Stock
|
2,151,081
|
215
|
104,850
|
105,065
|
|||||||||||||||||||||
Beneficial
Conversion Feature on
|
|||||||||||||||||||||||||
promissory
notes, net of expenses
|
526,459
|
526,459
|
|||||||||||||||||||||||
Conversion
of temporary equity to
|
|||||||||||||||||||||||||
common
shares
|
22,150,193
|
2,215
|
818,269
|
820,484
|
|||||||||||||||||||||
Issuance
of warrants for services
|
|||||||||||||||||||||||||
Rendered
|
258,942
|
258,942
|
|||||||||||||||||||||||
Conversion
of Series H Stock
|
(150
|
)
|
(2
|
)
|
1,500,000
|
150
|
(148
|
)
|
—
|
||||||||||||||||
Purchase
of True To Form
|
10,000,000
|
1,000
|
599,000
|
600,000
|
|||||||||||||||||||||
Net
loss
|
(2,998,429
|
)
|
(2,998,429
|
)
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||
Balance,
December 31, 2004
|
13,840
|
138
|
45,895,431
|
4,590
|
(327,484
|
)
|
22,844,110
|
(30,361,748
|
)
|
(7,840,394
|
)
|
|
Years
ended December 31,
|
|||||||||
|
2002
|
2003
|
2004
|
|||||||
|
restated
|
restated
|
restated
|
|||||||
|
|
|
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|||||||
Net
loss
|
$
|
(188,560
|
)
|
$
|
(556,798
|
)
|
$
|
(2,998,429
|
)
|
|
Adjustments
to reconcile net loss to cash used in operating
activities:
|
||||||||||
Depreciation
and amortization
|
—
|
115,059
|
197,244
|
|||||||
Write
down of investment, fixed assets and intangibles
|
52,584
|
—
|
—
|
|||||||
Provision
for (recovery of) bad debts
|
(24,813
|
)
|
3,499
|
(47,232
|
)
|
|||||
Deferred
rent expense
|
(5,480
|
)
|
—
|
—
|
||||||
Loss
(gain) on sale of division
|
—
|
(125,030
|
)
|
124,385
|
||||||
Change
in fair value of warrants
|
—
|
—
|
57,639
|
|||||||
Change
in fair value of conversion feature
|
92,674
|
98,678
|
29,534
|
|||||||
Increase
in stated value of additional paid in capital for convertible preferred
stock and convertible notes payable
|
—
|
148,824
|
1,920,245
|
|||||||
Change
in operating assets and liabilities:
|
||||||||||
Accounts
receivable
|
(64,202
|
)
|
(34,758
|
)
|
321,650
|
|||||
Prepaid
expenses
|
(20,358
|
)
|
(6,899
|
)
|
65,344
|
|||||
Accounts
payable and accrued expenses
|
(56,471
|
)
|
35,830
|
(137,453
|
)
|
|||||
Net
cash used in operating activities
|
(214,626
|
)
|
(321,595
|
)
|
(467,073
|
)
|
||||
|
||||||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||
Purchase
of furniture, fixture and equipment
|
(38,378
|
)
|
(21,929
|
)
|
—
|
|||||
Loan
to related party
|
—
|
—
|
(71,225
|
)
|
||||||
Net
cash used in investing activities
|
(38,378
|
)
|
(21,929
|
)
|
(71,225
|
)
|
||||
|
||||||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||
Proceeds
from issuance of notes payable
|
—
|
255,000
|
597,950
|
|||||||
Net
cash provided by financing activities
|
—
|
255,000
|
597,950
|
|||||||
|
||||||||||
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(253,004
|
)
|
(88,524
|
)
|
59,652
|
|||||
CASH
AND CASH EQUIVALENTS, beginning of year
|
413,346
|
160,342
|
71,818
|
|||||||
CASH
AND CASH EQUIVALENTS, end of year
|
$
|
160,342
|
$
|
71,818
|
$
|
131,470
|
||||
|
Series
|
QUARTER
ENDED
3/03
(reversal
recovery
of
deemed
preferred
stock
dividend)
|
QUARTER
ENDED
6/03
(removal
of
deemed
preferred
stock
dividend)
|
QUARTER
ENDED
9/03
(removal
of
interest
expense)
|
QUARTER
ENDED
12/03
(removal
of
interest
expense)
|
QUARTER
ENDED
3/04
(removal
of
interest
expense)
|
QUARTER
ENDED
6/04
(removal
of
interest
expense)
|
QUARTER
ENDED
9/04
(removal
of
interest
expense)
|
TOTAL
INTEREST
|
TOTAL
|
B
|
$
43,720
|
$
4,446
|
$
4,446
|
$
4,446
|
$
4,446
|
$
4,446
|
$
2,223
|
$
20,007
|
$
68,173
|
C
|
239,987
|
27,143
|
27,143
|
27,143
|
27,143
|
27,143
|
13,572
|
122,144
|
389,274
|
D
|
4,131
|
387
|
387
|
387
|
387
|
387
|
194
|
1,742
|
6,260
|
E
|
1,239,333
|
127,620
|
127,620
|
127,620
|
127,620
|
127,620
|
63,810
|
574,290
|
1,941,243
|
TOTAL
|
$1,527,171
|
$159,596
|
$159,596
|
$159,596
|
$159,596
|
$159,596
|
$79,799
|
$718,183
|
$2,404,950
|
Exchange
of warrants for services rendered
|
$
|
258,942
|
||
Issuance
of common stock for services rendered
|
104,850
|
|||
Acquisition
of True To Form Ltd, Inc.
|
1,469,108
|
|||
Conversion
of preferred stock to common stock
|
818,269
|
Additions
|
||||
(Reductions)
|
Deductions
|
|||
Balance
at
|
Charged
to
|
(A/R
|
Balance
at
|
|
Beginning
of
|
Costs
and
|
Written
off
|
End
of
|
|
Description
|
Period
|
Expenses
|
to
Bad Debt)
|
Period
|
Year
ending December 31, 2002
|
(68,546)
|
(21,113)
|
45,926
|
(43,733)
|
Year
ending December 31, 2003
|
(43,733)
|
(10,479)
|
6,980
|
(47,232)
|
Year
ending December 31, 2004
|
(47,232)
|
(72,782)
|
120,014
|
—
|
Years
ended December 31,
|
||||||||||
2002
|
2003
|
2004
|
||||||||
restated
|
restated
|
restated
|
||||||||
Net
loss from continuing operations
|
(306,561
|
)
|
(607,776
|
)
|
(2,968,407
|
)
|
||||
Less:
Deemed preferred stock dividend
|
(1,004,681
|
)
|
(248,759
|
)
|
—
|
|||||
Add:
Recovery of preferred stock dividend
|
1,527,171
|
—
|
||||||||
Income
(loss) from continuing operations
applicable
to common shareholders
|
(1,311,242
|
)
|
670,636
|
(2,968,407
|
)
|
|||||
Income
(loss) from discontinued operations
|
118,001
|
50,978
|
(30,477
|
)
|
||||||
Net
loss applicable to common shareholders
|
(1,193,241
|
)
|
721,614
|
(2,998,429
|
)
|
|||||
Net
income(loss) per share - basic and diluted:
|
||||||||||
Continuing
operations
|
$
|
(0.00
|
)
|
$
|
0.02
|
$
|
(0.18
|
)
|
||
Discontinued
operations
|
(0.00
|
)
|
0.00
|
(0.00
|
)
|
|||||
Net
income (loss) per share - basic
|
$
|
0.00
|
$
|
0.02
|
$
|
(0.18
|
)
|
|||
Weighted
average common shares outstanding
-
basic and diluted
|
214,687,508
|
31,820,137
|
16,790,165
|
FOR
THE THREE YEARS
|
||||||||||
ENDED
DECEMBER 31,
|
||||||||||
2002
|
2003
|
2004
|
||||||||
RESTATED
|
RESTATED
|
RESTATED
|
||||||||
Loss
applicable to common shareholders:
|
||||||||||
As
reported
|
$
|
1,193,241
|
$
|
721,614
|
$
|
(2,998,429
|
)
|
|||
Pro
forma
|
$
|
(1,362,950
|
)
|
$
|
628,473
|
$
|
(3,013,329
|
)
|
||
Basic
and diluted income (loss) per share:
|
||||||||||
As
reported
|
$
|
(0.00
|
)
|
$
|
0.02
|
$
|
(0.18
|
)
|
||
Pro
forma
|
$
|
(0.00
|
)
|
$
|
0.02
|
$
|
(0.18
|
)
|
DECEMBER
31,
|
|||||||
2003
|
2004
|
||||||
Furniture
and fixtures
|
$
|
7,199
|
$
|
7,199
|
|||
Computer
equipment
|
8,548
|
8,548
|
|||||
Vehicles
|
32,160
|
32,160
|
|||||
47,907
|
47,907
|
||||||
Less:
accumulated depreciation and amortization
|
11,236
|
19,477
|
|||||
36,361
|
28,430
|
||||||
Fixed
assets held for sale (Tulix)
|
105,624
|
--
|
|||||
$
|
142,295
|
$
|
28,430
|
DECEMBER
31, 2004
|
||||
Licensed
technology rights:
|
||||
Basis
|
$
|
986,223
|
||
Amortization
to date
|
(312,304
|
)
|
||
Subtotal
|
673,919
|
|||
True
To Form Goodwill:
|
||||
Basis
|
1,469,108
|
|||
Total
|
$
|
2,143,027
|
Year
Ending
|
||||
December
31,
|
Amount
|
|||
2005
|
$
|
4,884
|
||
2006
|
2,035
|
|||
$
|
6,919
|
YEAR
ENDED DECEMBER 31,
|
|||||||||||||||||||
2002
WEIGHT-
AVERAGED
|
2003
WEIGHT-
AVERAGED
|
2004
WEIGHT-
AVERAGED
|
|||||||||||||||||
EXERCISE
|
EXERCISE
|
EXERCISE
|
|||||||||||||||||
SHARES
|
PRICE
|
SHARES
|
PRICE
|
SHARES
|
PRICE
|
||||||||||||||
Outstanding
at beginning of year
|
791,644
|
2.75
|
389,085
|
2.31
|
387,419
|
2.32
|
|||||||||||||
Granted
|
|||||||||||||||||||
Exercised
|
|||||||||||||||||||
Forfeited
|
(402,559
|
)
|
2.87
|
(1,666
|
)
|
0.59
|
|
||||||||||||
Outstanding
at end of year
|
389,085
|
2.31
|
387,419
|
2.32
|
387,419
|
2.32
|
|||||||||||||
Options
exercisable at year end
|
239,081
|
3.32
|
329,419
|
2.61
|
387,419
|
||||||||||||||
Shares
available for future grant
|
1,610,915
|
1,612,581
|
1,612,581
|
||||||||||||||||
Weighted-average
fair value of
|
|||||||||||||||||||
options
granted during this year at the shares’ fair value
|
0.00
|
0.00
|
0.00
|
WEIGHTED
AVERAGE REMAINING
|
||
EXERCISE
PRICE
|
SHARES
|
CONTRACTUAL
LIFE
|
$0.59
- 0.75
|
231,095
|
5.1
|
$2.18
- 4.55
|
95,687
|
4.3
|
$6.00
- 6.13
|
60,637
|
3.4
|
387,419
|
4.3
|
Accounts
receivable
|
$
|
94,551
|
||
Inventories
|
67,906
|
|||
Property
and Equipment
|
28,430
|
|||
Other
assets
|
2,575
|
|||
Goodwill
|
1,469,108
|
|||
Current
liabilities
|
(399,959
|
)
|
||
Long-term
liabilities
|
(162,611
|
)
|
||
$
|
1,100,000
|
December
31,
|
||||||||||
|
||||||||||
2002
|
2003
|
2004
|
||||||||
Temporary
differences:
|
||||||||||
Allowance
for uncollectibles
|
$
|
17,000
|
$
|
19,000
|
$
|
—
|
||||
Capital
losses
|
167,000
|
167,000
|
167,000
|
|||||||
Accrued
legal fees
|
18,000
|
19,000
|
—
|
|||||||
Deferred
rent expense
|
83,000
|
33,000
|
—
|
|||||||
Estimated
loss on segment disposal
|
0
|
50,000
|
—
|
|||||||
Net
operating loss carryforward
|
7,849,000
|
8,001,000
|
8,125,000
|
|||||||
Deferred
tax asset
|
8,134,000
|
8,289,000
|
8,292,000
|
|||||||
Valuation
allowance
|
(8,010,000
|
)
|
(8,083,000
|
)
|
(8,292,000
|
)
|
||||
Net
deferred tax asset
|
124,000
|
206,000
|
—
|
|||||||
Depreciation
|
(124,000
|
)
|
(206,000
|
)
|
—
|
|||||
Deferred
tax liability
|
—
|
—
|
—
|
|||||||
Net
deferred tax asset (liability)
|
$
|
—
|
$
|
—
|
$
|
—
|
||||
Year
ended December 31,
|
|||||||
2003
|
2004
|
||||||
Expected
income tax (benefit) at statutory
|
$
|
(160,000
|
)
|
$
|
(921,000
|
)
|
|
Federal
rate of 35%
|
|||||||
State
tax (benefit), net of Federal effect
|
(23,000
|
)
|
(132,000
|
)
|
|||
Permanent
differences
|
46,000
|
844,000
|
|||||
Increase
in valuation allowance
|
137,000
|
209,000
|
|||||
|
$ | — |
$
|
—
|
|
September
30, 2005
|
December
31,
2004
|
|||||
|
(unaudited)
|
(restated)
|
|||||
ASSETS
|
|||||||
CURRENT
ASSETS:
|
|
|
|||||
Cash
and cash equivalents
|
$
|
37,774
|
$
|
131,470
|
|||
Accounts
receivable, net
|
46,082
|
94,551
|
|||||
Inventory
|
185,756
|
67,906
|
|||||
Prepaid
expenses
|
65,082
|
242,110
|
|||||
Loan
to Tulix
|
—
|
72,858
|
|||||
TOTAL
CURRENT ASSETS
|
334,694
|
608,895
|
|||||
|
|||||||
Fixed
assets, at cost (net)
|
4,371
|
28,430
|
|||||
Deposits
|
2,108
|
2,575
|
|||||
Note
receivable
|
250,000
|
||||||
Investment
in Tulix
|
51,949
|
51,949
|
|||||
Intangible
assets
|
986,223
|
986,223
|
|||||
Less:
Accumulated amortization
|
(460,237
|
)
|
(312,304
|
)
|
|||
Goodwill
|
1,469,108
|
1,469,108
|
|||||
Intangibles,
net
|
1,995,094
|
2,143,027
|
|||||
TOTAL
ASSETS
|
$
|
2,638,216
|
$
|
2,834,876
|
|||
|
|||||||
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
CURRENT
LIABILITIES:
|
|
|
|||||
Accounts
payable and accrued expenses
|
$
|
704,861
|
$
|
574,236
|
|||
Loans
payable
|
184,631
|
182,784
|
|||||
Due
to officer
|
73,848
|
147,309
|
|||||
Current
maturities of long-term debt
|
100,000
|
106,860
|
|||||
Convertible
loans payable, net of discount
|
4,060,195
|
1,327,245
|
|||||
Derivative
conversion feature - convertible preferred stock
|
680,374
|
1,050,863
|
|||||
TOTAL
CURRENT LIABILITIES
|
5,803,909
|
3,389,297
|
|||||
|
|||||||
Note
payable
|
250,000
|
||||||
Warrant
liability
|
1,502,117
|
742,448
|
|||||
Long
term debt - net of current maturities
|
400,000
|
415,302
|
TOTAL
LIABILITIES
|
7,956,026
|
4,547,047
|
|||||
Convertible
preferred stock
|
4,628,211
|
6,128,223
|
|||||
|
|||||||
STOCKHOLDERS’
DEFICIT:
|
|||||||
|
|||||||
Common
Stock, $.0001 par value, 300,000,000 shares authorized
100,049,512
shares issued and outstanding at September 30, 2005,
45,895,431
shares issued and outstanding at December 31, 2004
|
10,005
|
4,590
|
|||||
|
|||||||
Preferred
stock, Series H, $.01 par value, 13,500 shares authorized,
12,442
shares issued and outstanding at September 30, 2005,
convertible,
participating, $12,442,000 liquidation value at
September
30, 2005, 13,350 shares issued and outstanding at
December
31, 2004
|
124
|
133
|
|||||
|
|||||||
Preferred
stock, Series I, $.01 par value, 490.5 shares authorized,
490.5
shares issued and outstanding at September 30, 2005 and
December
31, 2004, convertible participating, $49,050 liquidation
value
at September 30, 2005
|
5
|
5
|
|||||
Treasury
stock, at cost, 5,028,695 shares at September 30, 2005
and
December 31, 2004
|
(327,484
|
)
|
(327,484
|
)
|
|||
Additional
paid-in capital
|
24,609,582
|
22,844,110
|
|||||
Accumulated
deficit
|
(34,238,253
|
)
|
(30,361,748
|
)
|
|||
TOTAL
STOCKHOLDERS’ DEFICIT
|
(9,946,021
|
)
|
(7,840,394
|
)
|
|||
|
|||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$
|
2,638,216
|
$
|
2,834,876
|
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||
|
September
30,
|
September
30,
|
|||||||||||
|
(unaudited)
|
(unaudited)
|
|||||||||||
|
2005
|
2004
(restated)
|
2005
|
2004
(restated)
|
|||||||||
|
|
|
|
|
|||||||||
REVENUES
|
$
|
229,647
|
$
|
—
|
$
|
867,161
|
$
|
620
|
|||||
Cost
of Revenues
|
174,128
|
—
|
523,991
|
558
|
|||||||||
GROSS
PROFIT
|
55,519
|
—
|
343,170
|
62
|
|||||||||
OPERATING
EXPENSES:
|
|||||||||||||
Sales
and marketing
|
17,541
|
—
|
96,454
|
—
|
|||||||||
General
and administrative
|
686,297
|
153,865
|
1,776,539
|
599,116
|
|||||||||
Depreciation
and amortization
|
51,616
|
49,311
|
152,543
|
147,933
|
|||||||||
Total
operating expenses
|
755,454
|
203,176
|
2,025,536
|
747,049
|
|||||||||
OPERATING
LOSS
|
(699,935
|
)
|
(203,176
|
)
|
(1,682,366
|
)
|
(746,987
|
)
|
|||||
OTHER
(EXPENSES) INCOME
|
|||||||||||||
Interest
expense
|
(938,838
|
)
|
(119,790
|
)
|
(4,023,692
|
)
|
(290,221
|
)
|
|||||
Change
in fair value of warrants
|
1,125,614
|
—
|
1,825,033
|
—
|
|||||||||
Change
in fair value of derivative conversion feature
|
—
|
(54,847
|
)
|
—
|
(123,795
|
)
|
|||||||
Interest
income
|
70
|
—
|
4,520
|
—
|
|||||||||
Other
income, net
|
—
|
2,170
|
—
|
5,298
|
|||||||||
TOTAL
OTHER INCOME (EXPENSES)
|
186,846
|
(172,467
|
)
|
(2,194,139
|
)
|
(408,718
|
)
|
||||||
LOSS
FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
(513,089
|
)
|
(375,643
|
)
|
(3,876,505
|
)
|
(1,155,705
|
)
|
|||||
INCOME
TAX PROVISION
|
—
|
—
|
—
|
—
|
|||||||||
|
|||||||||||||
LOSS
FROM CONTINUING OPERATIONS
|
(513,089
|
)
|
(375,643
|
)
|
(3,876,505
|
)
|
(1,155,705
|
)
|
|||||
INCOME
FROM DISCONTINUED OPERATIONS
|
—
|
—
|
—
|
94,363
|
|||||||||
LOSS
ON DISPOSAL OF BUSINESS SEGMENT
|
—
|
—
|
—
|
(124,385
|
)
|
||||||||
NET
LOSS APPLICABLE TO COMMON SHAREHOLDERS
|
(513,089
|
)
|
$
|
(375,643
|
)
|
(3,876,505
|
)
|
$
|
(1,185,727
|
)
|
|||
|
|||||||||||||
|
|||||||||||||
LOSS
PER SHARE - BASIC AND DILUTED:
|
|||||||||||||
CONTINUING
OPERATIONS
|
$
|
(.01
|
)
|
$
|
(.03
|
)
|
$
|
(.05
|
)
|
$
|
(.08
|
)
|
|
DISCONTINUED
OPERATIONS
|
|||||||||||||
NET
LOSS PER SHARE
|
$
|
(.01
|
)
|
$
|
(.03
|
)
|
$
|
(.05
|
)
|
$
|
(.08
|
)
|
|
|
|||||||||||||
|
|||||||||||||
WEIGHTED
NUMBER OF SHARES OUTSTANDING
|
91,934,343
|
14,999,157
|
75,024,726
|
14,999,157
|
|||||||||
The
accompanying notes are an integral part of these financial
statements.
|
|
Nine
Months Ended
|
||||||
|
September
30,
|
||||||
|
(unaudited)
|
||||||
|
2005
|
2004
(restated)
|
|||||
|
|
|
|||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|||||
Net
loss
|
$
|
(3,876,505
|
)
|
$
|
(1,185,727
|
)
|
|
|
1111
|
||||||
Adjustments
to reconcile net loss to cash used in operating
activities
|
|||||||
Depreciation
|
4,610
|
—
|
|||||
Amortization
of intangibles
|
147,933
|
198,655
|
|||||
Provision
for bad debts
|
—
|
42,454
|
|||||
Barter
transaction
|
14,449
|
—
|
|||||
Stock,
options and warrants issued in exchange for services
performed
|
47,052
|
—
|
|||||
Loss
on sale of division
|
—
|
124,385
|
|||||
Change
in fair value of warrants
|
(1,825,033
|
)
|
—
|
||||
Excess
warrant value on convertible loans
|
3,950,976
|
—
|
|||||
Change
in operating assets and liabilities
|
—
|
||||||
Accounts
receivable
|
48,469
|
(27,669
|
)
|
||||
Inventory
|
(117,850
|
)
|
—
|
||||
Prepaid
expenses
|
177,028
|
(13,993
|
)
|
||||
Deposits
|
467
|
—
|
|||||
Convertible
preferred stock
|
(8,800
|
)
|
|||||
Accounts
payable and accrued expenses
|
130,626
|
459,973
|
|||||
Net
cash used in operating activities
|
(1,297,778
|
)
|
(410,722
|
)
|
|||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
Investment
in Tulix
|
—
|
(51,949
|
)
|
||||
Repayment
of (advance to) Tulix
|
72,858
|
(70,000
|
)
|
||||
Proceeds
from sale of property and equipment
|
5,000
|
—
|
|||||
Net
cash provided by (used in) investing activities
|
77,858
|
(121,949
|
)
|
||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|||||||
Issuance
of note payable
|
—
|
460,900
|
|||||
Repayments
to officer
|
(73,461
|
)
|
—
|
||||
Net
bank borrowings
|
1,847
|
—
|
|||||
Principal
payments on long-term debt
|
(22,162
|
)
|
—
|
||||
Issuance
of common shares
|
—
|
27
|
|||||
Proceeds
from issuance of convertible loans
|
1,220,000
|
—
|
|||||
Net
cash provided by financing activities
|
1,126,224
|
460,927
|
|||||
|
|||||||
NET
DECREASE IN CASH AND CASH EQUIVALENTS
|
$
|
(93,696
|
)
|
$
|
(71,744
|
)
|
|
CASH
AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
$
|
131,470
|
$
|
71,818
|
|||
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
37,774
|
$
|
74
|
|||
Supplemental
disclosure of non - cash investing and financing
activities:
|
|||||||
Conversion
of preferred shares into 51,871,120 shares of common stock
|
$
|
1,870,510
|
—
|
||||
Service
vehicle distributed for services performed
|
$
|
14,449
|
—
|
1.
|
BASIS
OF PRESENTATION
|
2.
|
GOING
CONCERN MATTERS, DESCRIPTION OF THE BUSINESS, AND RECENT
EVENTS
|
3.
|
INVENTORY
|
4.
|
SEGMENT
INFORMATION
|
|
|
LICENSED
|
|
SPECIALTY
|
|
|
|
|
|
||||
|
|
TECHNOLOGIES
|
|
LIGHTING
|
|
|
|
|
|
||||
|
|
DIVISION
|
|
DIVISION
|
|
ELIMINATIONS
|
|
TOTAL
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Total
Assets
|
|
$
|
2,927,489
|
|
$
|
211,148
|
|
$
|
(500,421
|
)
|
$
|
2,638,216
|
|
Total
Revenue
|
|
$
|
125
|
|
$
|
229,522
|
|
$
|
—
|
|
$
|
229,647
|
|
Net
Loss
|
|
$
|
(377,633
|
)
|
$
|
(135,456
|
)
|
$
|
—
|
|
$
|
(513,089
|
)
|
|
|
LICENSED
|
|
SPECIALTY
|
|
|
|
|
|
||||
|
|
TECHNOLOGIES
|
|
LIGHTING
|
|
|
|
|
|
||||
|
|
DIVISION
|
|
DIVISION
|
|
ELIMINATIONS
|
|
TOTAL
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Total
Assets
|
|
$
|
2,927,489
|
|
$
|
211,148
|
|
$
|
(500,421
|
)
|
$
|
2,638,216
|
|
Total
Revenue
|
|
$
|
125
|
|
$
|
867,036
|
|
$
|
—
|
|
$
|
867,161
|
|
Net
Loss
|
|
$
|
(3,543,774
|
)
|
$
|
(332,731
|
)
|
$
|
—
|
|
$
|
(3,876,505
|
)
|
|
Three
Months
|
|||
|
Ended
|
|||
|
September
30, 2004
|
|||
|
|
|||
Net
revenues
|
$
|
282,516
|
||
Net
loss from continuing operations
|
$
|
(459,263
|
)
|
|
Net
loss
|
$
|
(459,263
|
)
|
|
Net
loss per share
|
$
|
(.03
|
)
|
|
Nine
Months Ended
|
|||
|
September
30, 2004
|
|||
|
|
|||
Net
revenues
|
$
|
688,634
|
||
Net
loss from continuing operations
|
$
|
(1,308,098
|
)
|
|
Net
loss
|
$
|
(1,338,120
|
)
|
|
Net
loss per share
|
$
|
(.09
|
)
|
5.
|
BASIC
AND DILUTED LOSS PER SHARE
|
6.
|
STOCK
OPTIONS
|
|
For
the Nine Months
Ended
September 30,
|
||||||
|
2005
(unaudited)
|
2004
(unaudited)
|
|||||
|
|
|
|||||
Loss
applicable to common shareholders:
|
|
|
|||||
As
reported
|
$
|
(3,876,505
|
)
|
$
|
(1,185,727
|
)
|
|
Pro
forma
|
$
|
(3,968,350
|
)
|
$
|
(1,199,194
|
)
|
|
Basic
and diluted loss per share:
|
|||||||
As
reported
|
$
|
(.05
|
)
|
$
|
(.08
|
)
|
|
Pro
forma
|
$
|
(.05
|
)
|
$
|
(.08
|
)
|
7.
|
TAXES
|
8.
|
CONVERTIBLE
PREFERRED STOCK
|
9.
|
SUBSEQUENT
EVENTS
|
· |
the
issuance by True To Form to us of a promissory note described below
in
the initial principal amount of $250,000, which note accrues interest
at
an annual rate of one percent plus the prime rate as reported by
a
nationally recognized commercial bank and has a maturity date of
January
1, 2011;
|
· |
the
cancellation of our guaranty of the amounts owed under a promissory
note
issued by True to Form to Mr. Allen in connection with our acquisition
of
True to Form; and
|
· |
the
surrender by Mr. Allen of the 10,000,000 shares of our common stock
that
were issued to him as partial consideration for our purchase of True
to
Form on December 31, 2004 and the cancellation of all other equity
interest in Global Matrechs held by Mr.
Allen.
|
Nature
of Expense
|
Amount*
|
|||
SEC
registration fee
|
$
|
188
|
||
Accounting
fees and expenses
|
10,000
|
|||
Legal
fees and expenses
|
35,000
|
|||
Transfer
agent fees
|
—
|
|||
Printing
and related fees
|
4,000
|
|||
Miscellaneous
|
1,000
|
|||
Total
|
$
|
50,188
|
Party
|
Date
|
Amount
|
|||||
Brittany
Capital Management Ltd.
|
June
1, 2004
|
$
|
75,000
|
||||
McNab
LLC
|
July
1, 2004
|
$
|
542,950
|
· |
a
secured note in principal amount of $500,000, payable over five years
at
an annual interest rate of 8%, with $100,000 due after one year and
the
remaining principal amount due on December 31, 2009; issued by our
subsidiary True to Form and
|
· |
10,000,000
shares of our common stock. We refer to these shares as the share
consideration. The share consideration is subject to the following
adjustments. If True To Form generates gross revenues of at least
$3,000,000 for the twelve months ended December 31, 2006, and the
value of
10,000,000 shares initially issued as consideration is less than
$2.5
million, we will be required to issue additional
|
shares
or, at our option, pay cash to cover the difference. However, if
the value
of the initial shares on December 31, 2006 exceeds $3.5 million,
Mr. Allen
will be required to return to us such portion of the initial shares
equal
in value to the excess. If True To Form’s gross revenues fail to meet or
exceed the $3 million threshold, the aforementioned minimum and
maximum
values will be $2.0 million and $3.0 million, respectively. The
additional
shares that we may be required to issue to adjust the share consideration
in accordance with the terms of the Agreement and Plan of Merger
are not
covered by these registration statement.
|
Filed
with
|
Incorporated
by Reference
|
|||||
Exhibit
No.
|
Description
|
this
Form
SB-2
|
Form
|
Filing
Date
|
Exhibit
No.
|
|
2.1
|
Agreement
and Plan of Merger dated December 31, 2004 with True To Form,
Limited, TTF
Acquisition Corp. and Mark J. Allen
|
8-K
|
January
6, 2005
|
2.1
|
||
3.1
|
Certificate
of Amendment of Amended and Restated Certificate of
Incorporation
|
8-K
|
June
15, 2004
|
3.1
|
||
3.2
|
Amended
and Restated Certificate of Incorporation
|
S-1
|
September
18, 1996
|
3.1
|
||
3.3
|
Amended
and Restated By-Laws
|
S-1
|
September
18, 1996
|
3.2
|
||
3.4
|
Certificate
of Designation, Rights, Preferences, Qualifications, Limitations
and
Restrictions of Series A Convertible Preferred Stock
|
S-1/A
|
January
29, 1998
|
3.3
|
||
3.5
|
Certificate
of Amendment of Certificate of Designations, Preferences and
Rights of
Series B Convertible Preferred Stock
|
8-K
|
June
15, 2004
|
3.2
|
Filed
with
|
Incorporated
by Reference
|
|||||
Exhibit
No.
|
Description
|
this
Form
SB-2
|
Form
|
Filing
Date
|
Exhibit
No.
|
3.6
|
Certificate
of Designations, Preferences and Rights of Series B Convertible
Preferred
Stock
|
10-K
|
March
31, 1999
|
10.49
|
||
3.7
|
Certificate
of Amendment of Certificate of Designations, Preferences and
Rights of
Series C Convertible Preferred Stock
|
8-K
|
June
15, 2004
|
3.4
|
||
3.8
|
Certificate
of Designations, Preferences and Rights of Series C Convertible
Preferred
Stock
|
S-1
|
May
10, 1999
|
3.5
|
||
3.9
|
Certificate
of Amendment of Certificate of Designations, Preferences and
Rights of
Series D Convertible Preferred Stock
|
S-1
|
May
10, 1999
|
3.6
|
||
3.10
|
Amended
Certificate of Designations, Preferences and Rights of Series
E
Convertible Preferred Stock
|
S-3
|
June
1, 2000
|
3.7
|
||
3.11
|
Certificate
of Designations, Preferences and Rights of Series F Convertible
Preferred
Stock
|
10-K
|
April
15, 2003
|
3.8
|
||
3.12
|
Certificate
of Designations, Preferences and Rights of Series G Convertible
Preferred
Stock
|
10-K
|
April
15, 2003
|
3.9
|
||
3.13
|
Certificate
of Designations, Preferences and Rights of Series H Convertible
Preferred
Stock
|
10-Q
|
October
29, 2003
|
3.1
|
||
3.14
|
Certificate
of Designations, Preferences and Rights of Series I Convertible
Preferred
Stock
|
10-QSB
|
August
16, 2004
|
3.1
|
||
4.1
|
Specimen
stock certificate
|
S-1
|
November
1, 1996
|
4.2
|
||
4.2
|
2%
Secured Convertible Promissory Note issued to Southridge Capital
Partners
dated October 19, 2004
|
8-K
|
October
19, 2005
|
4.1
|
||
4.3
|
Form
of 2% Secured Convertible Promissory Note issued to each of
Colonial Fund
LLC and Dean DeNuccio on October 22, 2004
|
8-K
|
October
22,2005
|
4.1
|
||
4.4
|
2%
Secured Convertible Promissory Note dated December 3, 2004
issued to Deer
Creek Fund, LLC
|
8-K
|
December
8, 2004
|
99.1
|
||
4.5
|
2%
Secured Convertible Promissory Note issued to Woodward LLC
|
8-K
|
February
2, 2005
|
10.4
|
Filed
with
|
Incorporated
by Reference
|
|||||
Exhibit
No.
|
Description
|
this
Form
SB-2
|
Form
|
Filing
Date
|
Exhibit
No.
|
4.6
|
2%
Secured Convertible Promissory Note issued to Southridge
Partners LP on
January 31, 2005
|
8-K
|
February
2, 2005
|
10.2
|
||
4.7
|
Nonnegotiable
2% Secured Convertible Promissory Note issued to Southridge
Partners LP on
March 2, 2005
|
8-K
|
March
7, 2005
|
4.2
|
||
4.8
|
Non-negotiable
2% Secured Convertible Promissory Note issued to Southridge
Partners LP on
April 11, 2005
|
8-K
|
April
15, 2005
|
4.2
|
||
4.9
|
Non-negotiable
2% Secured Convertible Promissory Note issued to Southridge
Partners LP on
May 12, 2005
|
8-K
|
May
17, 2005
|
4.2
|
||
4.10
|
Non-negotiable
2% Secured Convertible Promissory Note issued to McNab LLC
on June 14,
2005
|
8-K
|
June
20, 2005
|
4.1
|
||
4.11
|
Non-negotiable
2% Secured Convertible Promissory Note issued McNab LLC on
August 1, 2005
|
8-K
|
August
1, 2005
|
4.2
|
||
4.12
|
Non-negotiable
2% Secured Convertible Promissory Note issued McNab LLC on
September 14,
2005
|
8-K
|
September
14, 2005
|
4.2
|
||
4.13
|
Non-negotiable
2% Secured Convertible Promissory Note issued McNab LLC on
October 3, 2005
|
8-K
|
October
3, 2005
|
4.2
|
||
5.1
|
Opinion
of Foley Hoag LLP
|
X
|
||||
10.1
|
Letter
of Engagement with Trilogy Capital Partners, Inc. dated December 22,
2004
|
8-K
|
December
16, 2004
|
99.2
|
||
10.2
|
Securities
Purchase Agreement dated October 19, 2004 between Global
Matrechs, Inc.
and Southridge Partners LP
|
8-K
|
October
19, 2004
|
99.1
|
||
10.3
|
Form
of Securities Purchase Agreements dated October 22, 2004
between Global
Matrechs, Inc. and each of Colonial Fund LLC and Dean
DeNuccio
|
8-K
|
October
22, 2004
|
99.1
|
||
10.4
|
Securities
Purchase Agreement dated December 3, 2004 between Global
Matrechs, Inc.
and Deer Creek Fund, LLC
|
8-K
|
December
8, 2004
|
99.3
|
Filed
with
|
Incorporated
by Reference
|
|||||
Exhibit
No.
|
Description
|
this
Form
SB-2
|
Form
|
Filing
Date
|
Exhibit
No.
|
10.5
|
Second
Securities Purchase Agreement dated April 11, 2005 between
Global
Matrechs, Inc. and Southridge Partners LP
|
8-K
|
April
15, 2005
|
10.1
|
||
10.6
|
Securities
Purchase Agreement dated May 12, 2005 between Global Matrechs,
Inc. and
Southridge Partners LP
|
8-K
|
May
17, 2005
|
10.1
|
||
10.7
|
Securities
Purchase Agreement dated June 14, 2005 between Global Matrechs
and McNab
LLC
|
8-K
|
July
11, 2005
|
10.1
|
||
10.8
|
Private
Equity Credit Agreement dated July 5, 2005 with Brittany
Capital
Management Limited
|
8-K
|
July
11, 2005
|
10.1
|
||
10.9
|
Registration
Rights Agreement dated July 5, 2005 with Brittany Capital
Management
Limited
|
8-K
|
June
30, 2005
|
10.2
|
||
10.10
|
Employment
Agreement between Global Matrechs and Mark Allen dated
January 31,
2005
|
10-QSB
|
August
22, 2005
|
10.13
|
||
10.11
|
Security
Agreement between True To Form, Limited, Mark Allen and
Global Matrechs,
Inc. dated December 31, 2004
|
8-K
|
January
6, 2005
|
10.2
|
||
10.12
|
Collateral
Pledge Agreement dated as of December 31, 2004 is made
by Global Matrechs,
Inc. in favor of Mark Allen
|
8-K
|
January
6, 2005
|
10.4
|
||
10.13
|
Second
Securities Purchase Agreement dated January 31, 2005 between
Global
Matrechs, Inc. and Southridge Partners LP
|
8-K
|
February,
2005
|
10.1
|
||
10.14
|
Exchange
Agreement between Global Matrechs and Woodward LLC dated
January 31,
2005
|
8-K
|
February
4, 2005
|
10.3
|
||
10.15
|
Securities
Purchase Agreement dated August 1, 2005 between Global
Matrechs, Inc. and
McNab LLC
|
8-K
|
August
1, 2005
|
10.1
|
||
10.16
|
Securities
Purchase Agreement dated September 14, 2005 between Global
Matrechs, Inc.
and McNab LLC
|
8-K
|
September
14, 2005
|
10.1
|
||
10.17
|
Securities
Purchase Agreement dated October 3, 2005 between Global
Matrechs, Inc. and
McNab LLC
|
8-K
|
October
3, 2005
|
10.1
|
Filed
with
|
Incorporated
by Reference
|
|||||
Exhibit
No.
|
Description
|
this
Form
SB-2
|
Form
|
Filing
Date
|
Exhibit
No.
|
10.18
|
Stock
Purchase Agreement dated December 29, 2005 between Global
Matrechs, Inc.,
Mark Allen, and True to Form Limited, Inc.
|
8-K
|
January
6, 2006
|
10.1
|
||
10.19
|
Promissory
Note issued to Global Matrechs, Inc. by True to Form Limited,
Inc.
|
8-K
|
January
6, 2006
|
10.2
|
||
10.20
|
Private
Equity Credit Agreement dated January 10, 2006 with Brittany
Capital
Management Limited
|
8-K
|
January
13, 2006
|
10.1
|
||
10.21
|
Registration Rights Agreement dated January 10, 2006 with Brittany Capital Management Limited |
|
SB-2
|
January
18, 2006
|
10.21
|
|
23.1
|
Consent
of Foley Hoag LLP (included in Exhibit 5.1)
|
X
|
||||
23.2
|
Consent
of Sherb & Co., LLP
|
X
|
||||
24.1
|
Power
of Attorney
|
|
SB-2
|
January
18, 2006
|
24.1
|
GLOBAL MATRECHS, INC. | ||
|
|
|
By: | /s/ Michael Sheppard | |
Michael
Sheppard
President,
Chief Operating Officer, Acting Chief Financial Officer and Chairman
of
the Board
|
||
Signature
|
Title
|
Date
|
/s/
Michael Sheppard
Michael Sheppard |
President,
Chief Operating Officer, Acting Chief Financial Officer and Chairman
of
the Board of Directors (director,
principal executive officer, principal financial officer and principal
accounting officer)
|
January
31, 2006
|
/s/ Michael
Sheppard*
Thomas
L. Folsom
|
Director
|
January
31, 2006
|
/s/
Michael Sheppard*
K.
Ivan F. Gothner
|
Director
|
January
31, 2006
|