(Mark
One)
|
|
x
|
Annual
Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934
|
For
the fiscal year ended December 31, 2006 or
|
|
¨
|
Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934
|
For
the transition period from ___________________ to
_______________________
|
Massachusetts
|
|
04-2652826
|
(State
or Other Jurisdiction of Incorporation or Organization)
|
|
(I.R.S.
Employer Identification No.)
|
321
Manley Street,
West
Bridgewater, Massachusetts
|
|
02379-1040
|
(Address
of Principal Executive Offices)
|
|
(zip
code)
|
(508)
580-1818
|
|
|
(Issuer’s
telephone number)
|
|
|
Securities
registered pursuant to Section 12(b) of the
Act:
|
Common
Stock, par value $.01 per share
Preferred
Share Purchase Rights
|
Securities
registered pursuant to Section 12(g) of the
Act:
|
(Title
of Class)
|
|
|
|
Page
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|
|
|
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PART
I
|
|||
|
|
|
|
Item
1.
|
Description
of Business
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|
4
|
|
|
|
|
Item
2.
|
Description
of Property
|
|
12
|
|
|
|
|
Item
3.
|
Legal
Proceedings
|
|
12
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|
|
|
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
|
12
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|
|
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PART
II
|
|||
|
|
|
|
Item
5.
|
Market
for Common Equity, Related Stockholder Matters and Small Business
Issuer
Purchases of Equity Securities
|
|
12
|
|
|
|
|
Item
6.
|
Management’s
Discussion and Analysis or Plan of Operation
|
|
14
|
|
|
|
|
Item
7.
|
Financial
Statements
|
|
28
|
|
|
|
|
Item
8.
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
|
47
|
|
|
|
|
Item
8A.
|
Controls
and Procedures
|
|
47
|
|
|
|
|
Item
8B.
|
Other
Information
|
|
47
|
|
|
|
|
PART
III
|
|||
|
|
|
|
Item
9.
|
Directors,
Executive Officers, Promoters and Control Persons and Corporate
Governance; Compliance with Section 16(a) of the Exchange
Act
|
|
48
|
|
|
|
|
Item
10.
|
Executive
Compensation
|
|
50
|
|
|
|
|
Item
11.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
|
50
|
|
|
|
|
Item
12.
|
Certain
Relationships and Related Transactions, and Directors Independence
|
|
50
|
|
|
|
|
Item
13.
|
Exhibits
|
|
51
|
|
|
|
|
Item
14.
|
Principal
Accountant Fees and Services
|
|
54
|
|
•
|
our
plans and expectations with respect to our pressure cycling technology
(PCT) operations;
|
•
|
potential
growth in the market for our PCT products;
|
|
|
•
|
market
acceptance and the potential for commercial success of our PCT
products;
|
•
|
our
belief that PCT provides a superior solution for sample
extraction;
|
|
•
|
the
potential applications for PCT;
|
|
|
•
|
our
belief that we have sufficient liquidity to finance operations based
upon
current projections;
|
|
•
|
our
intent to sell our shares of Panacos Pharmaceuticals and the timing
thereof;
|
|
•
|
the
amount of cash necessary to operate our business;
|
|
•
|
our
ability to raise additional capital when and if needed;
|
|
•
|
general
economic conditions; and
|
|
•
|
the
anticipated future financial performance and business operations
of our
Company.
|
ITEM
1.
|
DESCRIPTION
OF BUSINESS.
|
- |
sample
preparation for genomic, proteomic, and small molecule studies;
|
- |
control
of chemical (enzymatic) reactions;
|
- |
protein
purification;
|
- |
pathogen
inactivation;
|
- |
immunodiagnostics;
|
- |
DNA
sequencing; and
|
- |
food
safety.
|
- |
is
a rapidly growing market;
|
- |
has
a large and immediate need for better
technology;
|
- |
is
comprised mostly of research laboratories and thus subject to minimal
governmental regulation;
|
- |
is
the least technically challenging application for the development
of our
products;
|
- |
is
compatible with our technical core competency; and
|
- |
is
the area in which we currently have our strongest patent
protection.
|
· |
Plant
genomics - Improvements by PCT in the extraction of pathogen DNA
in plants
and soil
|
· |
Proteomics
- Signal pathway analysis of human adipose tissue extracted by PCT
for
research in the areas of Non-alcoholic Fatty Liver Disease and
Diabetes
|
· |
Human
genomics - Analysis of RNA recovery and gene expression in the epidermis
after PCT extraction
|
Incumbent
Technologies
|
|||||||
Key
Attributes
|
Sonication
|
Bead
Beating
|
Tissue
Homogenizer
|
Mortar
Pestle
|
French
Press
|
PCT
|
|
Safety
|
Closed
System
|
-
|
+
|
-
|
-
|
-
|
+
|
Storage,
Transport
|
-
|
+
|
-
|
-
|
-
|
+
|
|
Versatility
|
-
|
-
|
-
|
-
|
-
|
+
|
|
Reproducibility
|
-
|
-
|
-
|
-
|
-
|
+
|
|
Efficiency
|
-
|
-/+
|
-
|
-
|
-
|
+
|
|
Shearing
Molecules
|
Yes
|
Yes
|
Yes
|
Min
|
Yes
|
Min
|
ITEM
2.
|
DESCRIPTION
OF PROPERTY
|
ITEM
3.
|
LEGAL
PROCEEDINGS.
|
ITEM
4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY
HOLDERS.
|
ITEM
5.
|
MARKET
FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
ISSUER
PURCHASES OF EQUITY
SECURITIES.
|
Common
Stock Price
|
|||||||
Fiscal
Year Ended December 31, 2005
|
High
|
Low
|
|||||
First
Quarter
|
$
|
3.68
|
$
|
2.70
|
|||
Second
Quarter
|
3.65
|
2.28
|
|||||
Third
Quarter
|
6.70
|
2.50
|
|||||
Fourth
Quarter
|
5.72
|
4.15
|
|||||
Fiscal
Year Ended December 31, 2006
|
High
|
Low
|
|||||
First
Quarter
|
$
|
4.80
|
$
|
3.67
|
|||
Second
Quarter
|
4.10
|
3.04
|
|||||
Third
Quarter
|
3.48
|
2.88
|
|||||
Fourth
Quarter
|
5.80
|
3.01
|
Period
|
Total
Number of Shares
Purchased
|
Average
Price Paid per
Share
|
Total
Number of Shares
Purchased
as Part of
Publicly
Announced
Plans
or Programs
|
Maximum
Number of
Shares
(or Approximate Dollar Value) that May Yet Be
Purchased
Under the
Plans
or Programs
|
|||||||||
October
1, 2006 - October 31, 2006
|
106,600
|
$
|
2.90
|
106,600
|
$
|
190,860(1
|
)
|
||||||
November
1, 2006 - November 30, 2006
|
4,289
|
$
|
3.33
|
4,289
|
176,842(1
|
)
|
|||||||
December
1, 2006 - December 31, 2006
|
249,875(2
|
)
|
$
|
4.10(2
|
)
|
0
|
176,842(1
|
)
|
|||||
Total
|
360,764
|
$
|
3.74
|
110,889
|
$
|
176,842(1
|
)
|
(1) |
Of
the $500,000 authorized for the Stock Buy-Back Program, $176,842
of
authorized cash resources remain available for additional purchases.
|
(2) |
Pursuant
to Mr. Schumacher’s Loan Repayment.
|
ITEM
6.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION.
|
- |
sample
preparation for genomic, proteomic and small molecule
studies;
|
- |
control
of chemical (enzymatic) reactions;
|
- |
protein
purification;
|
- |
pathogen
inactivation;
|
- |
immunodiagnostics;
|
- |
DNA
sequencing; and
|
- |
food
safety.
|
Contractual
Obligations
|
Total
|
Less
than
1
year
|
More
than
1
year
|
|||||||
Lease
for Maryland operating office (1)
|
$
|
13,000
|
$
|
13,000
|
$
|
0
|
||||
Obligations
relating to Discontinued Operations (2)
|
6,294
|
2,040
|
4,254
|
|||||||
Total
Contractual Obligations
|
$
|
19,294
|
$
|
15,040
|
$
|
4,254
|
(1)
On June 1, 2006 we entered into a lease agreement with Scheer Partners
and
the Maryland Economic Development Corporation, pursuant to which
we lease
laboratory and office space in Rockville, Maryland. The lease expires
on
May 31, 2007. We pay $2,600 per month for the use of these facilities.
|
||||||||||
|
||||||||||
(2)
In December 2000, we exited the clinical laboratory testing services
segment and in February 2001, we sold the assets of our wholly owned
subsidiary, BBI Clinical Laboratories, Inc. to Specialty Laboratories,
Inc. of Santa Monica, CA. Our estimate of remaining short and long
term accrued liabilities to exit the clinical laboratory testing
business
is $6,294 as of December 31, 2006.
|
ITEM
7.
|
FINANCIAL
STATEMENTS
|
ASSETS
|
||||
CURRENT
ASSETS
|
||||
Cash
and cash equivalents
|
$
|
5,335,282
|
||
Accounts
receivable
|
37,495
|
|||
Inventories
|
19,658
|
|||
Prepaid
income taxes
|
38,687
|
|||
Income
tax receivable
|
710,013
|
|||
Prepaid
expenses, deposits, and other current assets
|
246,776
|
|||
Investments
in marketable securities
|
2,060,875
|
|||
|
||||
Total
current assets
|
8,448,786
|
|||
|
||||
PROPERTY
AND EQUIPMENT, NET
|
207,696
|
|||
|
||||
OTHER
ASSETS
|
||||
Intangible
assets, net
|
376,922
|
|||
Assets
transferred under contractual arrangements
|
1,420,996
|
|||
Total
other assets
|
1,797,918
|
|||
|
||||
TOTAL
ASSETS
|
$
|
10,454,400
|
||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||
|
||||
CURRENT
LIABILITIES
|
||||
Accounts
payable
|
$
|
174,289
|
||
Accrued
employee compensation
|
242,497
|
|||
Other
accrued expenses
|
150,978
|
|||
Income
taxes payable
|
45,962
|
|||
Deferred
tax liability
|
669,520
|
|||
Deferred
revenue
|
4,099
|
|||
Total
current liabilities
|
1,287,345
|
|||
LONG
TERM LIABILITIES
|
||||
Deferred
revenue
|
9,126
|
|||
Liabilities
transferred under contractual arrangements
|
1,042,493
|
|||
Total
long term liabilities
|
1,051,619
|
|||
TOTAL
LIABILITIES
|
2,338,964
|
|||
COMMITMENTS
(NOTE 9)
|
||||
STOCKHOLDERS'
EQUITY
|
||||
Common
stock, $.01 par value; 20,000,000 shares authorized;
|
||||
2,315,300
issued and 2,065,425 outstanding
|
20,654
|
|||
Additional
paid-in capital
|
5,347,641
|
|||
Accumulated
other comprehensive income
|
1,384,876
|
|||
Retained
earnings
|
1,362,265
|
|||
Total
stockholders' equity
|
8,115,436
|
|||
TOTAL
LIABILITIES & STOCKHOLDERS' EQUITY
|
$
|
10,454,400
|
2006
|
2005
|
||||||
(restated)
|
|||||||
REVENUE:
|
|||||||
PCT
Products, services, other
|
$
|
210,289
|
$
|
105,526
|
|||
Total
revenue
|
210,289
|
105,526
|
|||||
COSTS
AND EXPENSES:
|
|||||||
Cost
of PCT products & services
|
165,233
|
177,350
|
|||||
Research
and development
|
1,429,711
|
498,584
|
|||||
Selling
and marketing
|
528,265
|
157,493
|
|||||
General
and administrative
|
2,145,196
|
1,691,214
|
|||||
Total
operating costs and expenses
|
4,268,405
|
2,524,641
|
|||||
Operating
loss from continuing operations
|
(4,058,116
|
)
|
(2,419,115
|
)
|
|||
OTHER
INCOME (EXPENSE):
|
|||||||
Realized
gain on securities available for sale
|
517,938
|
3,829,677
|
|||||
Other
operating, net
|
-
|
(477,154
|
)
|
||||
Interest
income
|
381,713
|
269,535
|
|||||
Total
other income
|
899,651
|
3,622,058
|
|||||
(Loss)
income from continuing operations before income taxes
|
(3,158,465
|
)
|
1,202,943
|
||||
Income
tax benefit (provision) from continuing operations
|
745,354
|
(352,694
|
)
|
||||
(Loss)
income from continuing operations
|
(2,413,111
|
)
|
850,249
|
||||
Discontinued
operations:
|
|||||||
Income
from discontinued operations (net of income tax
|
|||||||
provision
of $35,054)
|
-
|
50,574
|
|||||
Gain
on sale of net assets related to discontinued operations
|
|||||||
(includes
effect of income taxes of $703,269)
|
-
|
703,269
|
|||||
Net
income from discontinued operations
|
-
|
753,843
|
|||||
Net
(loss) income
|
$
|
(2,413,111
|
)
|
$
|
1,604,092
|
||
(Loss)
income per share from continuing operations - basic
|
$
|
(1.01
|
)
|
$
|
0.29
|
||
Income
per share from discontinued operations - basic
|
$
|
-
|
$
|
0.25
|
|||
Net
(loss) income per share - basic
|
$
|
(1.01
|
)
|
$
|
0.54
|
||
(Loss)
income per share from continuing operations - diluted
|
$
|
(1.01
|
)
|
$
|
0.27
|
||
Income
per share from discontinued operations - diluted
|
$
|
-
|
$
|
0.25
|
|||
Net
(loss) income per share - diluted
|
$
|
(1.01
|
)
|
$
|
0.52
|
||
Weighted
average number of shares used to calculate net (loss) income per
share -
basic
|
2,396,077
|
2,972,662
|
|||||
Weighted
average number of shares used to calculate net (loss) income per
share -
diluted
|
2,396,077
|
3,107,973
|
Other
Comprehensive Income (Loss):
|
2006
|
2005
|
|||||
(restated)
|
|||||||
Net
(loss) income
|
$
|
(2,413,111
|
)
|
$
|
1,604,092
|
||
Holding
(loss) gain
|
(1,383,417
|
)
|
7,787,303
|
||||
Reclassification of unrealized gain to realized gain on securities sold during the period |
(517,938
|
)
|
(3,829,677
|
)
|
|||
Unrealized
(loss) gain on marketable securities
|
(1,901,355
|
)
|
3,957,626
|
||||
Income
tax benefit (provision) related to items of other comprehensive (loss)
income
|
748,268
|
(1,419,663
|
)
|
||||
Total
other comprehensive (loss) income, net of taxes
|
(1,153,087
|
)
|
2,537,963
|
||||
Comprehensive
(loss) income
|
$
|
(3,566,198
|
)
|
$
|
4,142,055
|
Common
Stock
|
|
|
|
|
||||||||||||||||||
Shares
|
$.01
Par
Value
|
Additional
Paid-In
Capital
|
Accumulated
Other Comprehensive Income
|
Loan
Receivable from Officer/Director
|
Retained
Earnings
|
Total
Stockholders' Equity
|
||||||||||||||||
BALANCE,
December 31, 2004
|
6,872,915
|
$
|
68,729
|
$
|
22,286,395
|
$
|
-
|
$
|
(1,134,262
|
)
|
$
|
2,171,284
|
$
|
23,392,146
|
||||||||
Stock
options and other warrants exercised
|
761,275
|
7,543
|
2,142,141
|
-
|
-
|
-
|
2,149,684
|
|||||||||||||||
Proceeds
from interest on
|
||||||||||||||||||||||
loan
receivable from CEO/Director
|
-
|
-
|
-
|
-
|
134,262
|
-
|
134,262
|
|||||||||||||||
Repurchase
shares via tender offer
|
(5,210,001
|
)
|
(52,030
|
)
|
(18,401,516
|
)
|
-
|
-
|
-
|
(18,453,546
|
)
|
|||||||||||
Net
income
|
-
|
-
|
-
|
-
|
1,604,092
|
1,604,092
|
||||||||||||||||
Unrealized
gain on investments (net of tax)
|
-
|
-
|
-
|
2,537,963
|
-
|
-
|
2,537,963
|
|||||||||||||||
BALANCE,
December 31,2005
|
2,424,189
|
$
|
24,242
|
$
|
6,027,020
|
$
|
2,537,963
|
$
|
(1,000,000
|
)
|
$
|
3,775,376
|
$
|
11,364,601
|
||||||||
Stock
options and other warrants exercised
|
2,000
|
20
|
5,380
|
-
|
-
|
-
|
5,400
|
|||||||||||||||
Interest
accrued on loan
|
||||||||||||||||||||||
receivable
from CEO/Director
|
-
|
-
|
-
|
-
|
(25,487
|
)
|
-
|
(25,487
|
)
|
|||||||||||||
Exchange
of shares for payoff of
|
|
|
||||||||||||||||||||
loan
receivable from CEO/Director
|
(249,875
|
)
|
(2,499
|
)
|
(1,022,988
|
)
|
-
|
1,025,487
|
-
|
-
|
||||||||||||
Repurchase
shares via stock buy-back program
|
(110,889
|
)
|
(1,109
|
)
|
(322,049
|
)
|
-
|
-
|
-
|
(323,158
|
)
|
|||||||||||
Stock-based
compensation
|
-
|
-
|
660,278
|
-
|
-
|
-
|
660,278
|
|||||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
-
|
(2,413,111
|
)
|
(2,413,111
|
)
|
|||||||||||||
Unrealized
loss on investments (net of tax)
|
-
|
-
|
-
|
(1,153,087
|
)
|
-
|
-
|
(1,153,087
|
)
|
|||||||||||||
BALANCE,
December 31, 2006
|
2,065,425
|
$
|
20,654
|
$
|
5,347,641
|
$
|
1,384,876
|
$
|
-
|
$
|
1,362,265
|
$
|
8,115,436
|
2006
|
2005
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
(restated)
|
||||||
Net
(loss) income
|
$
|
(2,413,111
|
)
|
$
|
1,604,092
|
||
Less
income from discontinued operations
|
-
|
753,843
|
|||||
(Loss)
income from continuing operations
|
(2,413,111
|
)
|
850,249
|
||||
Adjustments
to reconcile (loss) income from continuing operations to net
cash
|
|||||||
used
in operating activities :
|
|||||||
Depreciation
and amortization
|
146,256
|
106,552
|
|||||
Non-cash,
stock-based, compensation expense
|
660,278
|
-
|
|||||
Loss
on disposal of property and equipment
|
42,781
|
-
|
|||||
Assets
and liabilities transferred under contractual arrangements,
(net)
|
-
|
442,348
|
|||||
Realized
gain on sale of marketable securities
|
(517,938
|
)
|
(3,829,677
|
)
|
|||
Interest
receivable on loan outstanding from Director / CEO
|
-
|
134,263
|
|||||
Interest
received with exchange of stock from Director/CEO
|
(25,487
|
)
|
-
|
||||
Changes
in operating assets and liabilities:
|
|||||||
Accounts
receivable
|
21,303
|
152,500
|
|||||
Inventories
|
65,549
|
72,610
|
|||||
Investments
- other
|
-
|
6,016
|
|||||
Income
tax receivable
|
(178,891
|
)
|
(531,123
|
)
|
|||
Prepaid
income taxes
|
(38,687
|
)
|
-
|
||||
Escrow
deposits and deferred costs related to tender offer
|
-
|
110,529
|
|||||
Prepaid
expenses and other current assets
|
(171,490
|
)
|
(43,103
|
)
|
|||
Restricted
cash payable to SeraCare
|
(9,100
|
)
|
(225,796
|
)
|
|||
Accounts
payable
|
117,894
|
15,120
|
|||||
Accrued
employee compensation
|
148,143
|
7,830
|
|||||
Other
accrued expenses
|
44,966
|
(205,320
|
)
|
||||
Deferred
revenue
|
13,225
|
-
|
|||||
Income
taxes payable
|
(17,767
|
)
|
(111,281
|
)
|
|||
Accrued
expenses due to SeraCare
|
-
|
218,454
|
|||||
Net
cash used in operating activities
|
(2,112,076
|
)
|
(2,829,829
|
)
|
|||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
Payments
for additions to property and equipment
|
(65,609
|
)
|
(320,905
|
)
|
|||
Proceeds
from sale of marketable securities
|
518,463
|
3,833,712
|
|||||
Net
cash provided by investing activities
|
452,854
|
3,512,807
|
|||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
Use
of funds to repurchase common stock
|
(323,158
|
)
|
(18,453,547
|
)
|
|||
Proceeds
from the issuance of common stock
|
5,400
|
2,149,684
|
|||||
Net
cash used in financing activities
|
(317,758
|
)
|
(16,303,863
|
)
|
|||
CASH
FLOW FROM DISCONTINUED OPERATIONS:
|
|||||||
Cash
flows from operating activities, net of taxes
|
(1,866
|
)
|
(4,035
|
)
|
|||
Cash
flows from investing activities
|
1,117,305
|
839,902
|
|||||
Deferred
tax liability on installment sale gain
|
(219,949
|
)
|
-
|
||||
Net
cash provided by discontinued operations
|
895,490
|
835,867
|
|||||
DECREASE
IN CASH AND CASH EQUIVALENTS:
|
(1,081,490
|
)
|
(14,785,018
|
)
|
|||
Cash
and cash equivalents, beginning of year
|
6,416,772
|
21,201,790
|
|||||
Cash
and cash equivalents, end of year
|
$
|
5,335,282
|
$
|
6,416,772
|
|||
SUPPLEMENTAL
INFORMATION:
|
|||||||
Income
Taxes Paid
|
$
|
230,863
|
$
|
23,508
|
|||
Interest
Paid
|
21,281
|
-
|
Raw
materials
|
$
|
3,158
|
||
Finished
goods
|
16,500
|
|||
Total
|
$
|
19,658
|
For
the Year Ended
December
31,
|
|||||||
2006
|
2005
|
||||||
Numerator:
|
|||||||
(Loss)
income from continuing operations, basic and diluted
|
$
|
(2,413,111
|
)
|
$
|
850,249
|
||
Demoninator:
|
|||||||
Weighted
Average Shares Outstanding, basic
|
2,396,077
|
2,972,662
|
|||||
Net
effect of dilutive common stock equivalents-based on treasury stock
method
using average market price
|
-
|
135,311
|
|||||
Weighted
Average Shares Outstanding, diluted
|
2,396,077
|
3,107,973
|
|||||
(Loss)
income per share from continuing operations - basic
|
$
|
(1.01
|
)
|
$
|
0.29
|
||
(Loss)
income per share from continuing operations - diluted
|
$
|
(1.01
|
)
|
$
|
0.27
|
Assumptions
|
Outside
Board Members
|
CEO
and other Officers & Employees
|
||
Expected
Life
|
5.0
|
6.0
|
||
Expected
Volatility
|
74.6%
- 77.9%
|
88.2%
- 92.5%
|
||
Risk-Free
Interest Rate
|
4.94%
|
4.94%
|
||
Expected
Dividend Yield
|
0.0%
|
0.0%
|
Cost
of PCT products & services
|
$
|
9,955
|
||
Research
and development
|
181,609
|
|||
Selling
and marketing
|
44,086
|
|||
General
and administrative
|
424,628
|
|||
Total
stock-based compensation expense
|
$
|
660,278
|
For
the Year Ended
|
||||
December
31, 2005
|
||||
Net
income - as reported
|
$
|
1,604,092
|
||
Add
back: Stock-based compensation
|
||||
in
net income, as reported
|
-
|
|||
Deduct:
Stock-based employee compensation
|
||||
expense
determined under fair value based method
|
||||
for
all awards, net of related tax effects
|
(151,982
|
)
|
||
Net
income - pro forma
|
$
|
1,452,110
|
||
Basic
net income per share - as reported
|
$
|
0.54
|
||
Basic
net income per share - pro forma
|
$
|
0.49
|
||
Diluted
net income per share - as reported
|
$
|
0.52
|
||
Diluted
net income per share - pro forma
|
$
|
0.47
|
Laboratory
and manufacturing equipment
|
$
|
43,986
|
||
Office
equipment
|
64,496
|
|||
PCT
collaboration / demo / lease systems
|
227,708
|
|||
336,190
|
||||
Less
accumulated depreciation
|
(128,494
|
)
|
||
Net
book value
|
$
|
207,696
|
PCT
Patents
|
$
|
778,156
|
||
Less
accumulated amortization
|
(401,234
|
)
|
||
Net
book value
|
$
|
376,922
|
For
the Year Ended
|
|||||||
December
31,
|
|||||||
2006
|
2005
|
||||||
Current
benefit (provision): federal
|
$
|
929,961
|
$
|
(239,023
|
)
|
||
Current
(provision): state
|
(184,607
|
)
|
(113,671
|
)
|
|||
Total
current benefit (provision)
|
745,354
|
(352,694
|
)
|
||||
Deferred
provision: federal
|
-
|
-
|
|||||
Deferred
provision: state
|
-
|
-
|
|||||
Total
deferred provision
|
-
|
-
|
|||||
Total
benefit (provision) for income taxes from continuing
operations
|
$
|
745,354
|
$
|
(352,694
|
)
|
Current
deferred taxes:
|
||||
Inventories
|
$
|
24,512
|
||
Other
accruals
|
31,536
|
|||
Unrealized
gain on marketable securities
|
(669,520
|
)
|
||
Less:
valuation allowance
|
(56,048
|
)
|
||
Total
current deferred tax assets (liabilities)
|
$
|
(669,520
|
)
|
|
Long
term deferred taxes:
|
||||
Accelerated
tax depreciation
|
$
|
(721
|
)
|
|
Source
Scientific Note, OID
|
57,989
|
|||
Non-cash,
stock-based compensation, NQ
|
156,035
|
|||
Goodwill
and intangibles
|
(151,787
|
)
|
||
Operating
loss carryforwards
|
1,359,572
|
|||
Less:
valuation allowance
|
(1,421,088
|
)
|
||
Total
long term deferred tax assets (liabilities), net
|
-
|
|||
Total
net deferred tax liabilities
|
$
|
(669,520
|
)
|
For
the Year Ended
|
||||||||
December
31,
|
||||||||
2006
|
2005
|
|||||||
Federal
tax benefit (provision) rate
|
34
|
%
|
(34
|
)%
|
||||
Permanent
differences
|
(2
|
)%
|
2
|
%
|
||||
State
tax expense
|
(4
|
)%
|
(6
|
)%
|
||||
Valuation
allowance
|
(4
|
)%
|
9
|
%
|
||||
Effective
income tax benefit (provision) rate from continuing
operations
|
24
|
%
|
(29
|
)%
|
Stock
Options
|
Warrants
|
Total
|
|||||||||||||||||
Shares
|
Weighted
Average price per share
|
Shares
|
Weighted
Average price per share
|
Shares
|
Exercisable
|
||||||||||||||
Balance
outstanding, 12/31/2004
|
1,071,342
|
$
|
2.93
|
135,556
|
$
|
3.60
|
1,206,898
|
520,556
|
|||||||||||
Granted
|
360,000
|
2.98
|
360,000
|
||||||||||||||||
Exercised
|
(761,275
|
)
|
2.85
|
(761,275
|
)
|
||||||||||||||
Expired
|
(35,067
|
)
|
3.75
|
(135,556
|
)
|
3.60
|
(170,623
|
)
|
|||||||||||
Forfeited
|
(50,000
|
)
|
2.92
|
(50,000
|
)
|
||||||||||||||
Balance
outstanding, 12/31/2005
|
585,000
|
$
|
2.96
|
-
|
585,000
|
385,000
|
|||||||||||||
Granted
|
382,000
|
3.91
|
382,000
|
||||||||||||||||
Exercised
|
(2,000
|
)
|
2.70
|
(2,000
|
)
|
||||||||||||||
Expired
|
(19,500
|
)
|
4.11
|
(19,500
|
)
|
||||||||||||||
Forfeited
|
-
|
-
|
|||||||||||||||||
Balance
outstanding, 12/31/2006
|
945,500
|
$
|
3.32
|
-
|
945,500
|
524,000
|
Options
Outstanding
|
Options
Exercisable
|
||||||||||||||||||
Range
of Exercise Prices
|
Number
of
Options
|
Remaining
Contractual Life (yrs)
|
Exercise
Price
|
Number
of
Options
|
Remaining
Contractual Life (yrs)
|
Exercise
Price
|
|||||||||||||
$2.50
- $2.70
|
159,000
|
5.7
|
$
|
2.64
|
159,000
|
5.7
|
$
|
2.64
|
|||||||||||
2.71
- 3.08
|
343,000
|
7.7
|
2.96
|
209,000
|
7.1
|
2.98
|
|||||||||||||
3.09
- 3.95
|
316,500
|
9.1
|
3.77
|
29,000
|
8.0
|
3.47
|
|||||||||||||
3.96
- 4.25
|
127,000
|
8.9
|
4.05
|
127,000
|
8.9
|
4.05
|
|||||||||||||
$2.50
- $4.25
|
945,500
|
8.0
|
$
|
3.32
|
524,000
|
7.2
|
$
|
3.17
|
ITEM
8.
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
|
ITEM
8A.
|
CONTROLS
AND PROCEDURES.
|
ITEM
8B.
|
OTHER
INFORMATION.
|
ITEM
9.
|
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERANCE;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
ACT
|
Name
|
|
Age
|
|
Position
|
Richard
T. Schumacher
|
|
56
|
|
President,
Chief Executive Officer and
Director
|
Edward
H. Myles
|