New
Jersey
|
22-3506376
|
State
or other jurisdiction of
incorporation
|
IRS
Employer Identification
No.
|
Page
|
||||
PART
I
|
||||
Item
1. Description of Business
|
3
|
|||
Item
2. Description of Property
|
13
|
|||
Item
3. Legal Proceedings
|
13
|
|||
Item
4. Submission of Matter to Vote of Security
Holders
|
13 | |||
PART
II
|
||||
Item
5. Market for Common Equity and Related Stockholder Matters
|
13
|
|||
Item
6. Management's Discussion and Analysis or
Plan of Operation
|
18
|
|||
Item
7. Financial Statements
|
F-1
to F-20
|
|||
Item
8. Changes in and Disagreements with Accountants on Accounting
and
Financial Disclosure
|
29
|
|||
Item
8A. Controls and Procedures
|
29
|
|||
Item
8B. Other Information
|
29 | |||
PART
III
|
||||
Item
9. Directors, Executive Officers, Promoters and Control Persons;
Compliance
with Section 16(a) of the Exchange Act
|
30 | |||
Item
10. Executive Compensation
|
31
|
|||
Item
11. Security Ownership of Certain Beneficial Owners and Management
and
Related Stockholder Matters
|
32
|
|||
Item
12. Certain Relationships and Related Transactions
|
34
|
|||
Item
13. Exhibits
|
37
|
|||
Item
14. Principal Accountant Fees and Services
|
41
|
|||
Signatures
and Certifications
|
42
|
|
$High
|
$Low
|
|||||
2006
First Quarter
|
2.39
|
1.08
|
|||||
|
|||||||
2005
First Quarter
|
3.07
|
1.83
|
|||||
Second
Quarter
|
2.95
|
1.85
|
|||||
Third
Quarter
|
4.70
|
2.07
|
|||||
Fourth
Quarter
|
3.40
|
2.20
|
|||||
2004
First Quarter
|
1.60
|
0.65
|
|||||
Second
Quarter
|
1.45
|
0.75
|
|||||
Third
Quarter
|
1.15
|
0.61
|
|||||
Fourth
Quarter
|
3.35
|
0.81
|
EQUITY
COMPENSATION PLAN INFORMATION
|
||||||||||
|
Number
of securities to
|
|
|
|||||||
|
be
issued upon exercise
|
Weighted-average
|
|
|||||||
|
of
outstanding options,
|
exercise
price of
|
||||||||
|
warrants
and rights
|
outstanding
options,
|
Number
of securities
|
|||||||
|
(excluding
securities
|
warrants
and rights under equity
|
remaining
available
|
|||||||
|
reflected
in column (a))
|
compensation
plans
|
for
future issuance
|
|||||||
Plan
category
|
(a)
|
(b)
|
(c)
|
|||||||
|
||||||||||
Equity
compensation
|
-0-
|
-0-
|
-0-
|
|||||||
plans
approved by
|
||||||||||
security
holders
|
||||||||||
Equity
compensation
|
-0-
|
-0-
|
-0-
|
|||||||
plans
not approved
|
||||||||||
by
security holders
|
||||||||||
Total
|
-0-
|
-0-
|
-0-
|
|||||||
|
Page
|
|||
Accountant's
Audit Report
|
F-1
|
|||
Balance
Sheet
|
F-2
|
|||
Statements
of Operations
|
F-3
|
|||
Statements
of Changes in Stockholder's Equity
|
F-4
|
|||
Statements
of Cash Flows
|
F-5
|
|||
Notes
to Financial Statements
|
F-6
|
|
|
|
By: | /s/ Robert G. Jeffrey | |
Robert
G. Jeffrey
Certified
Public Accountant
|
||
Wayne,
New Jersey
April
23, 2007
|
Current
Assets
|
||||
Cash
|
$
|
19,288
|
||
Accounts
receivable
|
94,357
|
|||
Inventory
|
2,005,139
|
|||
Vendor
advance
|
163,517
|
|||
Deferred
tax asset
|
977,302
|
|||
Total
current assets
|
3,259,603
|
|||
Fixed
Assets
|
||||
Office
furniture and equipment
|
157,521
|
|||
Automotive
equipment
|
21,221
|
|||
Shop
equipment
|
43,349
|
|||
Casts
and tooling
|
270,688
|
|||
|
492,779
|
|||
Less,
accumulated depreciation
|
301,886
|
|||
Net
fixed assets
|
190,893
|
|||
Other
Assets
|
||||
Advances
to Filco Gmbh
|
2,000,000
|
|||
Patents
- net
|
154,263
|
|||
Deferred
Charges
|
388,392
|
|||
Utility
deposits
|
65
|
|||
Total
other assets
|
2,542,720
|
|||
TOTAL
ASSETS
|
$
|
5,993,216
|
||
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
||||
Current
Liabilities
|
||||
Accounts
payable
|
$
|
885,463
|
||
Accrued
liabilities
|
266,556
|
|||
Obligation
for outstanding options
|
1,330,948
|
|||
Warrants
and conversion option liability
|
3,516,462
|
|||
Shareholder
notes payable
|
186,961
|
|||
Total
current liabilities
|
6,186,390
|
|||
Long
Term Convertible Debt
|
2,048,000
|
|||
TOTAL
LIABILITIES
|
8,234,390
|
|||
Stockholders'
Deficit
|
||||
Common
stock - authorized, 100,000,000
|
||||
shares
without par value; issued and
|
||||
outstanding
- 21,939,360 and 15,089,342,
|
||||
respectively
|
21,712,179
|
|||
Paid
in capital - warrants
|
1,042,400
|
|||
Preferred
stock - authorized, 5,000,000
|
||||
shares
without par value; 275,000 issued and outstanding
|
12,950
|
|||
Retained
deficit
|
(25,008,703
|
)
|
||
Total
stockholders' deficit
|
(2,241,174
|
)
|
||
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
$
|
5,993,216
|
|
2005
|
2004
|
|||||
SALES
|
$
|
718,842
|
-
|
||||
COST
OF GOODS SOLD
|
729,080
|
-
|
|||||
Gross
Profit
|
(10,238
|
)
|
-
|
||||
OPERATING
AND ADMINISTRATIVE EXPENSES
|
9,758,435
|
2,529,775
|
|||||
OPERATING
LOSS
|
(9,768,673
|
)
|
(2,529,775
|
)
|
|||
OTHER
INCOME AND EXPENSE
|
|||||||
Conversion
Expense
|
(6,571,454
|
)
|
|||||
Interest
expense and amortization expense
|
(488,342
|
)
|
(386,364
|
)
|
|||
Revaluation
income (expense)
|
993,837
|
(864,280
|
)
|
||||
Interest
income
|
15,247
|
86,667
|
|||||
Other
income
|
16,494
|
2,979
|
|||||
NET
LOSS BEFORE INCOME TAXES
|
(15,802,891
|
)
|
(3,690,773
|
)
|
|||
INCOME
TAX BENEFIT (STATE):
|
|||||||
Current
|
867,413
|
198,823
|
|||||
Prior
years
|
-
|
-
|
|||||
Total
Benefit
|
867,413
|
(198,823
|
)
|
||||
NET
LOSS BEFORE DIVIDENDS
|
(14,935,478
|
)
|
(3,491,950
|
)
|
|||
DEEMED
DIVIDENDS ON PREFERRED STOCK
|
(274,978
|
)
|
|
|
|||
NET
LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS
|
(15,210,456
|
)
|
(3,491,950
|
)
|
|||
PREFERRED
STOCK DIVIDEND
|
(51,563
|
)
|
(131,771
|
)
|
|||
DEFICIT
ACCUMULATED
|
$
|
(15,262,019
|
)
|
$
|
(3,623,721
|
)
|
|
NET
LOSS PER SHARE:
|
|||||||
NET
LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS
|
$
|
(14,935,478
|
)
|
$
|
(3,491,950
|
)
|
|
ADJUSTMENT
FOR PREFERRED SHARE DIVIDENDS ACCUMULATED BUT UNPAID
|
68,750
|
68,750
|
|||||
LOSS
ALLOCABLE TO COMMON SHAREHOLDERS
|
$
|
(15,004,228
|
)
|
$
|
(3,560,700
|
)
|
|
NET
LOSS PER SHARE - Basic and Diluted
|
$
|
(.71
|
)
|
$
|
(.29
|
)
|
|
WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING
|
20,951,187
|
12,075,448
|
|
STOCK
|
PREFERRED
|
||||||||||||||||||||
|
SHARES
|
AMOUNT
|
SHARES
|
AMOUNT
|
WARRANTS
|
DEFICIT
|
TOTAL
|
|||||||||||||||
Balance,
December 31, 2003
|
8,696,552
|
$
|
6,209,996
|
275,000
|
$
|
12,950
|
$
|
-
|
(6,122,963 | ) | $ | 99,983 | ||||||||||
Issuance
of shares sold in prior year
|
130,000
|
130,000
|
130,000
|
|||||||||||||||||||
Shares
sold in private placement offerings
|
5,500,125
|
2,685,402
|
1,042,400
|
3,727,802 | ||||||||||||||||||
Warrants
exercised
|
75,000
|
93,750
|
93,750
|
|||||||||||||||||||
Shares
issued for services
|
687,665
|
661,306
|
661,306
|
|||||||||||||||||||
Dividends
on preferred stock
|
(131,771
|
)
|
(131,771
|
)
|
||||||||||||||||||
Net
loss
|
|
|
(3,491,950
|
)
|
(3,491,950
|
)
|
||||||||||||||||
Balance,
December 31, 2004
|
15,089,342
|
9,780,454
|
275,000
|
12,950
|
1,042,400
|
(9,746,684
|
)
|
1,089,120
|
||||||||||||||
Shares
issued in private placements
|
68,750
|
55,000
|
55,000 | |||||||||||||||||||
Warrants
exercised
|
593,000
|
718,486
|
718,486 | |||||||||||||||||||
Options
exercised
|
45,000
|
19,619
|
19,619 | |||||||||||||||||||
Shares
issued for services
|
291,695
|
735,387
|
735,387 | |||||||||||||||||||
Employee
stock awards
|
20,000
|
48,000
|
48,000 | |||||||||||||||||||
Shares
issued in lieu of rent
|
19,200
|
48,000
|
48,000 | |||||||||||||||||||
Issuance
of shares sold in prior year
|
1,749,827
|
1,401,172
|
1,401,172 | |||||||||||||||||||
Shares
issued in settlement of interest
|
28,453
|
66,295
|
66,295 | |||||||||||||||||||
Transfer
from liability on exercise
|
||||||||||||||||||||||
of
warrants
|
181,000
|
181,000
|
||||||||||||||||||||
Conversion
of convertible debt
|
3,846,154
|
4,277,500
|
4,277,500 | |||||||||||||||||||
Conversion
benefit capitalized
|
3,596,154
|
3,596,154 | ||||||||||||||||||||
-
1
|
||||||||||||||||||||||
Shares
issued for Filco investment
|
187,939
|
458,571
|
458,571 | |||||||||||||||||||
Dividends
on preferred stock
|
(51,563 | ) | (51,563 | ) | ||||||||||||||||||
Preferred
stock dividend
|
326,541
|
326,541 | ||||||||||||||||||||
Net
loss
|
(15,210,456
|
)
|
(15,210,456
|
)
|
||||||||||||||||||
Balance,
December 31, 2005
|
21,939,360
|
$
|
21,712,179
|
275,000
|
$
|
12,950
|
$
|
1,042,400
|
$
|
(25,008,703
|
)
|
$
|
(2,241,174
|
)
|
||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
2005
|
2004
|
|||||
Net
loss
|
$
|
(15,210,456
|
)
|
$
|
(3,491,950
|
)
|
|
Charges
not requiring the outlay of cash:
|
|||||||
Depreciation
and amortization
|
59,500
|
100,507
|
|||||
Cost
of conversion
|
7,068,174
|
355,470
|
|||||
Value
of equity securities issued for services
|
1,918,750
|
1,033,343
|
|||||
Interest
accrued on shareholder advances
|
4,015
|
4,566
|
|||||
Excess
value of shares issued to settle liabilities
|
149,589
|
-
|
|||||
Deemed
dividend on preferred stock
|
274,978
|
-
|
|||||
Increase
in accrual of deferred tax benefit
|
(752,888
|
)
|
(23,409
|
)
|
|||
Revaluation
of warrant liabilities
|
(992,757
|
)
|
864,280
|
||||
Impairment
of Filco investment
|
4,700,839
|
-
|
|||||
Changes
in assets (liabilities):
|
|||||||
Increase
in accounts receivable
|
(205,858
|
)
|
(138,684
|
)
|
|||
Increase
in inventory
|
(1,295,858
|
)
|
(324,527
|
)
|
|||
Increase
in accounts payable
|
490,504
|
5,717
|
|||||
Increase
in accrued expenses
|
89,592
|
-
|
|||||
Net
cash consumed by operating activities
|
(3,701,875
|
)
|
(1,614,687
|
)
|
|||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|||||||
Acquisitions
of equipment
|
(150,806
|
)
|
(49,306
|
)
|
|||
Additions
to patent cost
|
(42,861
|
)
|
(80,939
|
)
|
|||
Advances
to FiLCO
|
(3,605,881
|
)
|
(2,670,000
|
)
|
|||
Net
cash consumed in investment activities
|
(3,799,548
|
)
|
(2,800,245
|
)
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|||||||
Proceeds
of converted debt
|
4,277,500
|
-
|
|||||
Proceeds
of common stock sales
|
55,000
|
5,103,103
|
|||||
Proceeds
of convertible loans
|
1,659,138
|
-
|
|||||
Proceeds
of stockholder advances
|
151,493
|
- | |||||
Repayments
of stockholder advances
|
(2,002
|
)
|
(52,005
|
)
|
|||
Proceeds
of exercises of warrants
|
718,486
|
93,750
|
|||||
Proceeds
of exercises of options
|
19,619
|
5,944
|
|||||
Preferred
stock dividends paid in cash
|
|
(131,771
|
)
|
||||
Net
cash Provided By Financing Activities
|
6,879,234
|
5,019,021
|
|||||
Net
change in cash
|
(622,189
|
)
|
604,089
|
||||
Cash
balance beginning of period
|
641,477
|
37,388
|
|||||
Cash
balance end of period
|
$
|
19,288
|
$
|
641,477
|
|
Year
Ended December 31,
|
||||||
|
2005
|
2004
|
|||||
Net
loss as reported
|
$
|
(15,416
|
)
|
$
|
(3,492
|
)
|
|
Less:
Stock-based employee compensation
|
|||||||
determined
under the Intrinsic Method
|
1,082
|
223
|
|||||
Add:
Stock bases compensation determined
|
|||||||
under
the Fair Value Method
|
(1,105
|
)
|
(260
|
)
|
|||
Pro
forma net loss
|
$
|
(15,439
|
)
|
$
|
(3,529
|
)
|
|
Loss
per share:
|
|||||||
Basic
and diluted as reported
|
$
|
(.72
|
)
|
$
|
(.29
|
)
|
|
Basic
and diluted-pro forma
|
$
|
(.72
|
)
|
$
|
(.29
|
)
|
|
2005
|
2004
|
Volatility
|
90.10%
|
91.45%
|
Risk-free
interest rate
|
3.71%
|
3.63%
|
Expected
Life - years
|
4.52
|
4.33
|
|
As
Originally
|
|||||||||
|
Presented
|
Adjustments
|
As
Restated
|
|||||||
Net
loss before dividends
|
$
|
(14,935,478
|
)
|
$
|
-
|
$
|
(14,935,478
|
)
|
||
|
||||||||||
Deemed
dividend on preferred
stock
|
(480,978
|
)
|
206,000(A
|
)
|
(274,978
|
)
|
||||
Net
Loss Accumulated
|
$
|
(15,468,019
|
)
|
$
|
206,000
|
$
|
(15,262,019
|
)
|
|
As
Originally
|
|||||||||
|
Presented
|
Adjustments
|
As
Restated
|
|||||||
Operating
Activities
|
||||||||||
Loss
|
$
|
(15,416,456
|
)
|
$
|
206,000
(A
|
)
|
$
|
(15,210,456
|
)
|
|
Deemed
dividend expense
|
480,978
|
(206,000)(A
|
)
|
274,978
|
||||||
Net
Cash Consumed By Operating Activities
|
$
|
(3,701,875
|
)
|
$
|
-
|
$
|
(3,701,875
|
)
|
|
As
Originally
|
|||||||||
|
Presented
|
Adjustments
|
As
Restated
|
|||||||
Cash
Flow from Operating Activities
|
||||||||||
Net
Loss
|
$
|
(2,272,200
|
)
|
$
|
(1,219,750
|
)
|
$
|
(3,491,950
|
)
|
|
Revaluation
expense
|
-
|
$
|
864,280
|
$
|
864,280
|
|||||
Conversion
expense
|
-
|
|
$
|
355,470
|
$
|
355,470
|
||||
Net
Cash Consumed By Operating Activities
|
$
|
(1,614,687
|
)
|
$
|
-
|
$ | (1,614,687 | ) |
Retained
Deficit At Beginning of Year:
|
2004
|
|||
As
previously reported
|
$
|
(5,916,011
|
)
|
|
Deficit
prior to development stage
|
(206,952
|
)
|
||
Net
loss, as restated
|
(3,491,950
|
)
|
||
Dividends
on preferred stock
|
(131,771
|
)
|
||
Retained
Deficit at End of Year
|
$
|
(9,746,684
|
)
|
|
2005
|
2004
|
|||||||||||
|
Weighted
|
|
|
Weighted
|
|||||||||
|
Average
|
|
Average
|
||||||||||
|
Exercised
|
|
Exercised
|
||||||||||
|
Shares
|
Price
|
Shares
|
Price
|
|||||||||
Options
outstanding at beginning of
|
|||||||||||||
year
|
620,000
|
$
|
.73
|
115,000
|
$
|
.38
|
|||||||
Options
granted during year
|
800,000
|
.83
|
600,000
|
.74
|
|||||||||
Options
exercised during year
|
(95,000
|
)
|
|||||||||||
|
(45,000
|
)
|
.44
|
.39
|
|||||||||
Options
outstanding at end of year
|
|||||||||||||
|
1,375,000
|
$
|
.80
|
620,000
|
$
|
.73
|
|||||||
Weighted
average Fair Value of
|
|||||||||||||
options
granted
|
$
|
1.37
|
$
|
.47
|
|||||||||
Weighted
average remaining life of
|
|||||||||||||
outstanding
options - years
|
|||||||||||||
|
4.52
|
4.33
|
5-Year
Warrants
|
||||
|
|
Exercise
|
||
Issuance
|
Proceeds
|
Debt
Conversion Price
|
Number
|
Price
|
$
500,000
|
$
409,913
|
$1.30
|
384,615
|
$2.11
|
1,548,000
|
1,249,225
|
$2.00
|
774,000
|
3.25
|
$
2,048,000
|
$
1,659,138
|
2005
|
|||||||||||||
Services
Rendered
|
Number
of Shares
|
Price
at
Date
|
Grant Date
|
Value
at Grant Date
|
|||||||||
Advertising
|
5,000
|
2/24
|
2.50
|
12,500
|
|||||||||
|
|||||||||||||
Lega1
services
|
11,000
|
5/2
|
2.78
|
30,580
|
|||||||||
|
|
||||||||||||
Financial
consulting
|
100,000
|
5/6
|
2.60
|
260,000
|
|||||||||
|
|
||||||||||||
Legal
services
|
50,000
|
5/6
|
2.60
|
130,000
|
|||||||||
|
|
||||||||||||
Investor
relations
|
15,000
|
4/1
|
2.40
|
36,000
|
|||||||||
|
|||||||||||||
Public
relations
|
20,000
|
5/1
|
2.55
|
51,000
|
|||||||||
|
|||||||||||||
Facility
search
|
5,000
|
5/1
|
2.55
|
12,750
|
|||||||||
|
|||||||||||||
Marketing
services
|
9,009
|
7/29
|
2.25
|
20,270
|
|||||||||
|
|||||||||||||
Investor
relations
|
15,000
|
9/6
|
2.25
|
33,750
|
|||||||||
|
|||||||||||||
Financial
services
|
2,500
|
12/1
|
2.60
|
6,500
|
|||||||||
Investor
relations
|
21,186
|
12/9
|
2.35
|
49,787
|
|||||||||
|
|||||||||||||
Public
relations
|
18,000
|
12/9
|
2.35
|
42,300
|
|||||||||
Investor
relations
|
15,000
|
12/9
|
2.35
|
35,250
|
|||||||||
Total
shares issued to consultants
|
286,695
|
720
687
|
|||||||||||
|
|||||||||||||
Other
Issuances:
|
|||||||||||||
|
|||||||||||||
Employee
awards
|
20,000
|
2.40
|
48,000
|
||||||||||
|
|||||||||||||
Shares
issued in lieu of rent
|
19,200
|
various
|
48,000
|
||||||||||
|
|||||||||||||
Shares
issued as partial
|
5,000
|
various
|
14,700
|
||||||||||
compensation
of financing
|
|||||||||||||
|
|||||||||||||
Amortization
of cost of grants made
|
5,113
|
||||||||||||
in
prior periods
|
|||||||||||||
|
|||||||||||||
Total
Value of stock issued for services
|
330,895
|
836,500
|
|||||||||||
|
|||||||||||||
Value
of options granted for services
|
-
|
1,082,250
|
|||||||||||
Value
of equity items issued for services
|
330,895
|
1,918,750
|
|
Number
|
|
Grant
|
||||||||||
Services
Rendered
|
of
Shares
|
|
Date
|
Price
|
Share
Value
|
||||||||
|
|||||||||||||
Consulting
services
|
10,000
|
1
/2
|
1.29
|
12,900
|
|||||||||
|
|||||||||||||
Marketing
services
|
15,000
|
6/14
|
1.12
|
16,800
|
|||||||||
122,680(2)
|
|||||||||||||
|
|||||||||||||
Investor
relations
|
26,020
|
6/14
|
1.12
|
29,142
|
|||||||||
|
|||||||||||||
Consulting
services
|
24,075
|
6/14
|
1.12
|
26,964 | |||||||||
|
|||||||||||||
Investor
relations
|
5,000
|
6/14
|
1.12
|
5,600
|
|||||||||
|
|||||||||||||
Consulting
services
|
40,000
|
9/8
|
0.89
|
34,000
|
|||||||||
(5,113)(l)
|
|||||||||||||
|
|||||||||||||
Investor
relations
|
50,000
|
8/9
|
0.8/6
|
43,000
|
|||||||||
|
|||||||||||||
Marketing
services
|
165,500
|
3/15
|
1.05
|
173,250
|
|||||||||
|
|||||||||||||
Investor
relations
|
15,000
|
2/2
|
0.68
|
10,200
|
|||||||||
145,110(2)
|
|
||||||||||||
|
|||||||||||||
Industrial
relations and
|
69,550
|
1/0
|
1.01
|
70,245 | |||||||||
marketing
services
|
|||||||||||||
Consulting
services
|
23,775
|
10/1
|
0.82
|
19,258
|
|||||||||
|
|
||||||||||||
Marketing
Services
|
24,000
|
10/30
|
0.90
|
21,600
|
|||||||||
Industrial
relations and
|
16,500
|
10/14
|
1.05
|
17,325
|
|||||||||
marketing
services
|
|||||||||||||
|
|||||||||||||
Total
of shares issued to
|
483,920
|
742,961
|
|||||||||||
consultants
|
|||||||||||||
|
|||||||||||||
Other:
|
|||||||||||||
|
|||||||||||||
Stock
issued to settle
|
37,421
|
-
|
|||||||||||
liabilities
|
|||||||||||||
|
|||||||||||||
Excess
value of stock issued
|
104,324
|
10,182(3
|
)
|
||||||||||
to
settle liabilities
|
|||||||||||||
Stock
issued in lieu of rent
|
12,000
|
various
|
.75
|
9,000
|
|||||||||
Director
awards
|
50,000
|
10/20
|
1.01
|
50,500
|
|||||||||
|
|||||||||||||
Total stock issued for services | 687,665 | 812,643 | |||||||||||
|
|||||||||||||
Options
granted for services
|
-
|
220,700
|
|||||||||||
Value
of equity items issued
|
|||||||||||||
for
services
|
687,665
|
$
|
1,033,343
|
Balance
December 31, 2003
|
|
845,000
|
|||||
Issuances
in 2004:
|
|||||||
|
|||||||
In
conjunction with stock placements
|
|||||||
through
investment banker:
|
|||||||
|
|||||||
March
|
1,800,063
|
||||||
September
|
171,875
|
||||||
November
|
820,000
|
2,791,938
|
|||||
Awarded
as partial fees to brokers:
|
|||||||
March
|
460,000
|
||||||
September
|
34,375
|
||||||
November
|
264,000
|
758,375
|
|||||
Warrants
issued in private stock sales
|
832,450
|
||||||
Warrants
exercised during 2004
|
(75,000
|
)
|
|||||
Warrants
issued for services (partially
|
385,000
|
||||||
voided
during 2005)
|
|||||||
Balance
December 31, 2004
|
|||||||
Warrants
issued in conjunction
|
|||||||
with
issuances of convertible debt:
|
|||||||
February
issue
|
2,884,615
|
||||||
May
issue
|
384,615
|
||||||
October
issue
|
774,000
|
4,043,230
|
|||||
Awarded
as partial fees to brokers:
|
|||||||
February
issue
|
484,615
|
||||||
May
issue
|
38,462
|
||||||
October
issue
|
154,800
|
677,877
|
|||||
Warrants
exercised during 2005
|
(593,000
|
)
|
|||||
Warrants
voided during 2005
|
(200,000
|
)
|
|||||
Warrants
issued for services
|
37,688
|
||||||
Balance
December 31 2005
|
9,503,558
|
|
2005
|
2004
|
|||||
Insurance
|
$
|
179,739
|
$
|
69,883
|
|||
Marketing
|
272,879
|
205,321
|
|||||
Payroll
|
556,454
|
402,543
|
|||||
Consulting
|
610,550
|
721,361
|
|||||
Officer
options
|
975,000
|
187,500
|
|||||
Other
compensation
|
120,280
|
-
|
|||||
Other
options awarded
|
107,250
|
39,600
|
|||||
Professional
fees
|
385,285
|
74,059
|
|||||
Office
expenses
|
147,521
|
36,005
|
|||||
Filco
Impairment
|
4,700,839
|
-
|
|||||
FILCO
audit fees
|
195,676
|
-
|
|||||
Penalties
|
281,281
|
-
|
|||||
Rent
|
87,627
|
58,800
|
|||||
Travel
and entertainment
|
76,714
|
30,656
|
|||||
Depreciation
and amortization
|
-
|
100,507
|
|||||
Product
development
|
496,902
|
369,666
|
|||||
Director
awards
|
-
|
50,500
|
|||||
Shipping
|
172,840
|
-
|
|||||
Payroll
taxes
|
69,996
|
40,959
|
|||||
Other
expenses
|
331,652
|
140,411
|
|||||
|
$
|
9,758,435
|
$
|
2,529,775
|
2011
|
$
|
206,952
|
||
2012
|
129,092
|
|||
2018
|
486,799
|
|||
2019
|
682,589
|
|||
2020
|
501,169
|
|||
2021
|
775,403
|
|||
2022
|
590,764
|
|||
2023
|
2,233,386
|
|||
2024
|
2,493,486
|
|||
2025
|
10,309,634
|
|
Current
|
Non-current
|
Total
|
|||||||
Deferred
Tax Assets
|
$
|
4,117,668
|
$
|
2,653,960
|
$
|
6,771,628
|
||||
Valuation
Allowance
|
3,189,801
|
2,653,960
|
5,843,761
|
|||||||
Balance
Recognized
|
$
|
927,867
|
$
|
-
|
$
|
927,867
|
|
2005
|
2004
|
|||||
Interest
|
$
|
9,741
|
$
|
26,239
|
|||
Income
taxes
|
0
|
500
|
Name
|
Age
|
Position
|
Peter
Amico
|
61
|
President
and Chairman of the Board of Directors
|
D.
Barney Harris
|
43
|
Executive
Vice President and Director
|
Nicholas
E. Fenelli*
|
51
|
Chief
Operations Officer
|
James
Hudson
|
61
|
Director
|
William
Hungerville
|
68
|
Director
|
Fil
Filipov
|
58
|
Director
|
Andrew
G. Guzzetti*
|
58
|
Director
|
Other
|
||||||||
Annual
Restricted Options LTIP
|
||||||||
Name
& Principal
|
|
|
|
All
Other
|
Stock
|
SARs
|
Payouts
|
All
Other
|
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Compensation($)
|
Awards
($)
|
(#)
|
($)
|
Compensation
|
Peter
Amico
|
2005
|
303,751(1)
|
0
|
-
|
-
|
-
|
-
|
-
|
President
and
|
|
|
|
|
||||
Chairman
|
2004
|
185,000(1)
|
0
|
187,500(3)
|
-
|
-
|
-
|
-
|
of
the Board
|
|
|
||||||
of
Directors
|
2003
|
100,000(1)
|
0
|
1,000(2)
|
-
|
-
|
-
|
-
|
|
|
Number
of
|
|||
|
Securities
|
%
of Total Options
|
||
|
Underlying
|
Granted
to
|
||
|
Options
Granted
|
Employees
in Fiscal
|
Exercise
|
|
Name
|
(#)
|
Year
|
Price
($/sh)
|
Expiration Date |
|
||||
Peter
Amico
|
50,000
|
8%(1)
|
$
-(1)
|
None(1)
|
President
and Chairman
|
500,000
|
83%(1)
|
$.85(1)
|
None(1)
|
|
|
|||
|
|
Underlying
Unexercised
Options
at
|
Value
of Unexercised
Options
at
|
In-the-Money
|
Name
|
FY-End
(#)
|
(Exercisable/Unexercisable)
|
(Exercisable/Unexercisable)
|
FY-End
($)
|
Peter
Amico President
and
|
50,000
|
50,000
|
.85
|
$42,500
|
Chairman
|
500,000
|
500,000
|
.39
|
$195,000
|
Peter
Amico(1)
|
Common
Stock
|
3,038,846
(6)
|
13.64%
(2)
|
200
Freeway Drive, Unit 1
|
Preferred
Stock
|
2,750,000
(3)(5)
|
100%
|
Blackwood,
NJ 08012
|
|||
Nicholas
Fenelli
|
Common
Stock
|
135,500
|
*
|
200
Freeway Drive, Unit 1 Preferred Stock
|
|
0
|
0%
|
Blackwood,
NJ 08012
|
|||
D.
Barney Harris(1)
|
Common
Stock
|
151,301
(7)
|
*
(2)
|
200
Freeway Drive, Unit 1
|
Preferred
Stock
|
0
|
0%
|
Blackwood,
NJ 08012
|
|||
Frank
Basile(1)
|
Common
Stock 137,046 (8)
|
*
|
|
200
Freeway Drive, Unit 1
|
Preferred
Stock
|
0
|
0%
|
Blackwood,
NJ 08012
|
|||
James
Hudson(1)
|
Common
Stock
|
75,800
(9)
|
*
|
200
Freeway Drive, Unit 1
|
Preferred
Stock
|
0
|
0%
|
Blackwood,
NJ 08012
|
|||
William
Hungerville(1)
|
Common
Stock
|
157,650
(10)
|
*(2)
|
200
Freeway Drive, Unit 1
|
Preferred
Stock
|
0
|
0%
|
Blackwood,
NJ 08012
|
|||
Andrew
Guzzetti
|
Common
Stock
|
0
|
0%
|
200
Freeway Drive, Unit 1
|
Preferred
Stock
|
0
|
0%
|
Blackwood,
NJ 08012
|
|||
All
Officers and Directors
|
Common
Stock
|
3,560,643
(11)
|
15.98%
(2)
|
As
a Group (7 persons) Preferred Stock
|
|
2,750,000
|
100%
|
Arcon
Corp.
|
Common
Stock
|
1,916,702
(4)
|
8.60%
(2)
|
200
Freeway Drive, Unit 1
|
Preferred
Stock
|
2,750,000
(3)(5)
|
100%
|
Blackwood,
NJ 08012
|
3.1 |
Certificate
of Incorporation of AirTrax, Inc. dated April 11, 1997. (Filed as
an
exhibit to the Company's Form 8-K filed with the Securities and Exchange
Commission on November 19, 1999).
|
3.2 |
Certificate
of Correction of the Company dated April 30, 2000 (Filed as an exhibit
to
Company's Form 8-K filed with the Securities and Exchange Commission
on
November 17, 1999).
|
3.3 |
Certificate
of Amendment of Certificate of Incorporation dated March 19, 2001
(Filed
as an exhibit to Company's Form 8-K filed with the Securities and
Exchange
Commission on November 17, 1999).
|
3.4 |
Amended
and Restated By-Laws of the Company. (Filed as an exhibit to the
Company's
Form 8-K filed with the Securities and Exchange Commission on November
19,
1999).
|
4.1 |
Form
of Common Stock Purchase Warrant issued to investors pursuant to
the May
2004 private placement.
|
4.2 |
Form
of Common Stock Purchase Warrant dated as of November 22, 2004 and
November 23, 2004. (Filed as an exhibit to the Company's Form 8-K
filed
with the Securities and Exchange Commission on November 30,
2004).
|
4.3 |
Form
of Series A Convertible Note dated as of February 11, 2005 (Filed
as an
exhibit to the Company's Form 8-K filed on February 11,
2005).
|
4.4 |
Form
of Class A Common Stock Purchase Warrant dated as of February 11,
2005
(Filed as an exhibit to the Company's Form 8-K filed on February
11,
2005).
|
4.5 |
Form
of Class B Common Stock Purchase Warrant dated as of February 11,
2005
(Filed as an exhibit to the Company's Form 8-K filed on February
11,
2005).
|
4.6 |
Form
of Broker's Common Stock Purchase Warrant dated as of February
11,
2005
(Filed as an exhibit to the Company's Form 8-K filed on February
11,
2005).
|
10.1 |
Agreement
and Plan of Merger by and between MAS Acquisition IX Corp. and
AirTrax
, Inc. dated November 5, 1999. (Filed as an exhibit to the Company's
Form 8-K filed with the Securities and Exchange Commission on January
13,
2000).
|
10.2 |
Employment
agreement dated April 1, 1997 by and between the Company and Peter
Amico. (Filed as an exhibit to the Company's Form 8-K/A filed with
the
Securities and Exchange Commission on January 13,
2000).
|
10.3 |
Employment
agreement dated July 12, 1999, by and between the Company and D.
Barney Harris. (Filed as an exhibit to the Company's Form 8-K/A
filed
with
the Securities and Exchange Commission on January 13,
2000).
|
10.4 |
Consulting
Agreement by and between MAS Financial Corp. and AirTrax, Inc.
dated October 26, 1999. (Filed as exhibit to the Company's Form
8-K
filed
with the Securities and Exchange Commission on November 19,
1999).
|
10.5 |
Employment
Agreement effective July 1, 2002 by and between the Company and
Peter Amico (filed as an exhibit to the Company's Form 10-KSB for
the
period ended December 31, 2002)
|
10.6 |
Agreement
dated July 15, 2002 by and between the Company and Swingbridge
Capital
LLC and Brian Klanica. (Filed as an exhibit to the Company's Form
8-K filed on August 7, 2002).
|
10.7 |
Product
Development, Sales and Manufacturing Representation Agreement dated
March 13, 2004 by and between AirTrax, Inc., and MEC Aerial Platform
Sales Corporation. (Filed as an exhibit to the Company's Form 8-K
filed on March 15, 2004).
|
10.8 |
General
Sales Contract and Amendment dated March 10, 2004 by and between
AirTrax
, Inc with Incomex Saigon. (Filed as an exhibit to the Company's
Form
8-K filed on March 22, 2004).
|
10.9 |
Purchase
Agreement, dated November 22, 2004, by and among AirTrax, Inc.
and
Excalibur Limited Partnership, Stonestreet Limited Partnership,
Whalehaven
Capital Fund. (Filed as an exhibit to the Company's Form 8-K filed
on November 30, 2004).
|
10.10 |
Joinder
to the Purchase Agreement, dated November 23, 2004, by and among
AirTrax,
Inc. and Excalibur Limited Partnership, Stonestreet Limited Partnership
and Linda Hechter. (Filed as an exhibit to the Company's Form
8-K filed on November 30,
2004).
|
10.11 |
Registration
Rights Agreement, dated November 22, 2004, by and among AirTrax,
Inc. and Excalibur Limited Partnership, Stonestreet Limited Partnership,
Whalehaven Capital Fund and First Montauk Securities Corp. (Filed as
an exhibit to the Company's Form 8-K filed on November 30, 2004).
|
10.12 |
Joinder
to the Registration Rights Agreement, dated November 23, 2004,
by
and among AirTrax, Inc. and Excalibur Limited Partnership, Stonestreet
Limited Partnership, Linda Hechter and First Montauk Securities
Corp. (Filed as an exhibit to the Company's Form 8-K filed on November
30, 2004).
|
10.13 |
Subscription
Agreement dated February 11, 2005 by and among AirTrax, Inc.
and the investors named in the signature pages thereto (Filed as
an
exhibit
to the Company's Form 8-K filed on February 11,
2005).
|
10.14 |
Series
B Unsecured Convertible Debenture and Warrants Purchase Agreement,
dated May 31, 2005, by and between AirTrax, Inc. and the investor
named on the signature page thereto (Filed as an exhibit to the Company's
Form 8-K filed on June 6, 2005).
|
10.15 |
Registration
Rights Agreement dated May 31, 2005, by and between AirTrax,
Inc. and the investor named on the signature page thereto (Filed
as an exhibit to the Company's Form 8-K filed on June 6,
2005).
|
10.16 |
Series
B Unsecured Convertible Debenture of AirTrax, Inc. (Filed as an
exhibit
to the Company's Form 8-K filed on June 6,
2005).
|
10.17 |
Form
of Stock Purchase Warrant of AirTrax, Inc. (Filed as an exhibit to
the
Company's Form 8-K filed on June 6,
2005).
|
10.18 |
Letter
Agreement dated May 31, 2005 by and among AirTrax, Inc. and the
investors
named on the signature page thereto (Filed as an exhibit to the
Company's Form 8-K filed on June 6,
2005).
|
10.19 |
Series
C Unsecured Convertible Debenture and Warrants Purchase Agreement,
dated October 18, 2005 by and between AirTrax, Inc. and the investor
named on the signature page thereto (Filed as an exhibit to the
Company's
Form 8-K filed on October 24,
2005).
|
10.20 |
Registration
Rights Agreement dated October 18, 2005, by and between AirTrax,
Inc. and the investor named on the signature page thereto (Filed
as an exhibit to the Company's Form 8-K filed on October 24, 2005).
|
10.21 |
Series
C Unsecured Convertible Debenture of AirTrax, Inc. (Filed as an
exhibit
to the Company's Form 8-K filed on October 24,
2005).
|
10.22 |
Form
of Stock Purchase Warrant of AirTrax, Inc. (Filed as an exhibit to
the
Company's Form 8-K filed on October 24,
2005).
|
10.23 |
Amended
and Restated Stock Acquisition Agreement effective as of as of
February
19, 2004 by and between AirTrax, Inc. and Fil Filipov (Filed as
an
exhibit to the Company's Form SB-2 filed on January 11,
2006).
|
10.24 |
Promissory
Note of Filco GmbH dated as of January 15, 2005 issued to AirTrax,
Inc. (Filed as an exhibit to the Company's Form SB-2 filed
on January
11, 2006).
|
10.25 |
Promissory
Note of Filco GmbH dated as of June 5, 2005 issued to AirTrax,
Inc. (Filed as an exhibit to the Company's Form SB-2 filed on January
11, 2006).
|
10.26 |
Assignment
and Purchase Agreement dated as of August 25, 2005 by and
between
Werner Faenger and AirTrax, Inc. (Filed as an exhibit to the Company's
Form SB-2 filed on January 11,
2006).
|
10.27 |
Promissory
Note of Filco GmbH with Guarantees dated as of November 25, 2005
issued to AirTrax, Inc. (Filed as an exhibit to the Company's Form
SB-2
filed on January 11, 2006).
|
10.28 |
Form
of Subscription Agreement of AirTrax, Inc. dated as of February 13,
2006.
(Filed as an exhibit to the Company's Form 8-K filed on February
27,
2006).
|
10.29 |
Series
D Unsecured Convertible Debenture of AirTrax, Inc. (Filed as an
exhibit
to the Company's Form 8-K filed on February 27,
2006).
|
10.30 |
Form
of Stock Purchase Warrant of AirTrax, Inc. (Filed as an exhibit
to
the
Company's Form 8-K filed on February 27,
2006).
|
31.1 |
Certification
by Chief Executive Officer and Chief Financial Officer pursuant
to Sarbanes-Oxley Section 302 (filed
herewith).
|
32.1 |
Certification
by Chief Executive Officer and Chief Financial Officer pursuant
to 18 U.S.C. Section 1350 (filed
herewith).
|
AIRTRAX, INC., A NEW JERSEY CORPORATION | ||
|
|
|
Date: April 25, 2007 | By: | /s/ Robert M. Watson |
Robert
M. Watson, President,
Chief
Executive Officer,
Director,
and Acting
Chief
Financial Officer
|
||
SIGNATURE
|
TITLE
|
DATE
|
|||||
By: /s/ Robert M. Watson
Robert M. Watson |
President,
Chief Executive
Officer,
Acting
Chief
Financial Officer and
Director
|
April
25, 2007
|
|||||
|
|||||||
By:
/s/ D. Barney Harris
D.
Barney Harris
|
|
|
Director
|
|
|
April
25, 2007
|
|
|
|||||||
By:
/s/ James Hudson
James Hudson |
Director
|
April
25, 2007
|
|||||
By:
/s/ William Hungerville
William Hungerville |
Director
|
April
25, 2007
|
|||||
By:
Fil Filipov
|
Director
|
April
25, 2007
|
|||||
By: /s/Andrew Guzzetti
Andrew Guzzetti |
Director
|
April
25, 2007
|
|||||
By: /s/ Peter Amico
Peter Amico, Jr. |
Director
|
April
25, 2007
|
|||||
By: /s/ Robert Borski
|
Director
|
April
25, 2007
|
|||||