(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, 2007
or
|
o
|
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.)
|
14
Norfolk Avenue
South
Easton, Massachusetts
|
|
02375
|
(Address
of Principal Executive Offices)
|
|
(
Zip Code)
|
(508)
230-1828
|
|
|
(Registrant’s
Telephone Number, Including Area Code)
|
|
|
Securities
registered pursuant to Section 12(b) of the Act:
|
|
Title
of Each Class
|
Name
of Each Exchange on Which Registered
|
Common
Stock, par value $.01 per share
Preferred
Share Purchase Rights
|
The
Nasdaq Stock Market, LLC
|
Securities
registered pursuant to Section 12(g) of the Act:
|
|
|
|
(Title
of Class)
|
Large accelerated filer o | Accelerated filer o |
Non-accelerated filer o
(Do not check if smaller reporting
company)
|
Smaller reporting company x |
Page
|
||
PART
I
|
||
|
|
|
Item
1.
|
Business
|
1
|
|
|
|
Item
1A.
|
Risk
Factors
|
12
|
|
|
|
Item
1B.
|
Unresolved
Staff Comments
|
18
|
Item
2.
|
Properties
|
18
|
Item
3.
|
Legal
Proceedings
|
18
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
18
|
PART
II
|
||
Item
5.
|
Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
|
19
|
|
||
Item
6.
|
Selected
Financial Data
|
20
|
|
|
|
Item
7.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operation
|
20
|
Item
7A.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
28
|
Item
8.
|
Financial
Statements and Supplementary Data
|
29
|
Item
9.
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
49
|
Item
9A.
|
Controls
and Procedures
|
49
|
Item
9B.
|
Other
Information
|
50
|
PART
III
|
||
Item
10.
|
Directors,
Executive Officers and Corporate Governance
|
51
|
Item
11.
|
Executive
Compensation
|
55
|
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
59
|
Item
13.
|
Certain
Relationships and Related Transactions, and Directors
Independence
|
60
|
Item
14.
|
Principal
Accountant Fees and Services
|
61
|
PART
IV
|
||
Item
15.
|
Exhibits
|
62
|
|
-
|
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
preparation;
|
-
|
the
expected development and success of new product
offerings;
|
|
|
-
|
the
potential applications for PCT;
|
-
|
the
expected benefits and results from our research and development efforts;
|
|
-
|
the
expected benefits and results from our collaboration
program;
|
|
|
-
|
our
belief that we have sufficient liquidity to finance operations into
early
2009;
|
-
|
our
expectation of obtaining additional research grants from the government
in
the future;
|
|
|
-
|
the
amount of cash necessary to operate our business;
|
|
-
|
our
ability to raise additional capital when needed;
|
|
-
|
general
economic conditions; and
|
|
-
|
the
anticipated future financial performance and business operations
of our
company.
|
ITEM 1. |
BUSINESS.
|
-
|
sample
preparation for genomic, proteomic, and small molecule
studies;
|
|
-
|
pathogen
inactivation;
|
|
-
|
protein
purification;
|
|
-
|
control
of chemical (enzymatic) reactions; and
|
|
-
|
immunodiagnostics.
|
·
|
Barocycler
NEP2320.
We introduced for sale the Barocycler NEP2320, a smaller, more compact
version of our Barocycler NEP3229. The Barocycler NEP2320 was originally
developed as a demonstration unit for our sales staff. However, we
determined to offer this instrument as a separate product for sale
following market feedback for a smaller instrument with similar
capabilities and features as our larger Barocycler NEP3229.
|
·
|
Expanded
our Consumables Product Line.
We introduced for sale our ProteoSolveLRS
kit to expand our consumables product line. Our ProteoSolveLRS
kit offers researchers a unique method for the safe, rapid, efficient
and
reproducible extraction of proteins from lipid-rich samples, including
adipose and brain tissues, organelles, and membrane preparations,
without
the use of detergents, which can be harmful to the sample extraction
process.
|
·
|
CE
Mark Approval.
Our Barocycler instrumentation received CE Marking, which means that
our
Barocycler instruments meet the essential requirements of the relevant
European health, safety and environmental protection legislation.
The CE
Mark is an important step toward our anticipated full-scale launch
of our
PCT product line in Europe during
2008.
|
·
|
Expanded
Our Sales Force.
We expanded our domestic sales force from one regional sales director
in
the beginning of the year to seven at the end of the year. Additionally,
in February 2008 we re-aligned our senior management team to support
a
full commercialization effort by hiring Matthew B. Potter as our
Vice
President of Sales and allowing Nathan P. Lawrence Ph.D., formerly
responsible for marketing and sales, to focus exclusively on marketing
and
collaboration support, as our Vice President of Marketing.
|
·
|
Expanded
Our International Distribution Network.
We expanded our international distribution network from one long-term
distribution partnership at the beginning of the year to three long-term
partnerships at the end of the year. As of December 31, 2007 our
distribution relationships covered Japan, France, Belgium, Switzerland
and
South Korea.
|
-
|
is
a rapidly growing market;
|
|
-
|
has
a large and immediate need for better technology;
|
|
-
|
is
comprised mostly of research laboratories, which are 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 strong patent protection. |
-
|
the
development of a new application for PCT in sample preparation;
|
-
|
the
advancement and validation of our understanding of PCT within an
area of
the life sciences in which we have already have products;
|
-
|
the
demonstration of effectiveness and impact of PCT to specific research
scientists whom we believe can have a positive impact on market acceptance
of PCT; and
|
-
|
the
expectation of peer-reviewed publications and/or presentations at
scientific meetings by a third party on the merits of PCT.
|
Investigator
|
Institution
|
Title
|
Venue/Journal
|
Venue
Type
|
Date
|
|||||
Nikhil
Patel
|
Bascom
Palmer Eye Institute, University of Miami
|
Strategies
to recover proteins from ocular tissues for proteomics
|
Proteomics
|
Journal
Article
|
March
5, 2008
|
|||||
|
|
|
|
|
|
|||||
Mourad
Ferhat
|
Universite
de Lyon
|
Application
of Pressure Cycling Technology to RNA Extraction from Legionella
Pneumophila Cells
|
Meeting
of the French Association on Legionella
|
Poster
|
October
18-19, 2007
|
|||||
|
|
|
|
|
|
|||||
Patricia
Okubara
|
USDA
ARS
|
Improved
extraction of Rhizoctonia and Pythium DNA from
wheat roots and soil samples using pressure cycling
technology
|
Canadian
Journal of Plant Pathology
|
Journal
Article
|
September
2007
|
|||||
|
|
|
|
|
|
|||||
Paul
Pevsner
|
Department
of Pharmacology, New York University School of Medicine
|
Colon
Cancer: Protein Biomarkers in Tissue and Body Fluids
|
BMSS
29th Annual Meeting, Heriot- Watt University, Edinburgh
|
Poster
|
September
9th – 12th, 2007
|
|||||
|
|
|
|
|
|
|||||
Valerie
S. Calvert
|
George
Mason University
|
A
Systems Biology Approach to the Pathogenesis of Obesity-related
Nonalcoholic Fatty Liver Disease Using Reverse Phase Protein Microarrays
for Multiplexed Cell Signaling Analysis
|
Hepatology
|
Journal
Article
|
June
27, 2007
|
|||||
|
|
|
|
|
|
|||||
Louis
S. Tisa
|
University
of New Hampshire, Department of Microbiology
|
Pressure
Cycling Technology (PCT) Facilitates Analysis of the Frankia
Proteome
|
U.S.
Hupo 2007
|
Poster
|
March
4-8, 2007
|
|||||
|
|
|
|
|
|
|||||
Frank
A. Witzmann
|
Indiana
University Medical School, Department of Cellular and Integrative
Physiology
|
Applications
of Pressure Cycling Technology (PCT) to Tissue Sample Preparation
for
One-and Two-Dimensional Gel Electrophoresis.
|
Electrophoresis
|
Journal
Article
|
February
15, 2007
|
|||||
|
|
|
|
|
|
|||||
Rita
Wong
|
DermTech
International
|
Analysis
of RNA Recovery and Gene Expression in the Epidermis Using Non-invasive
Tape Stripping
|
Journal
of Dermotological Science
|
Journal
Article
|
November
2006
|
|||||
|
|
|
|
|
|
|||||
D.
Alan Kerr
|
University
of Louisville
|
Pressure
Cycling Technology and Its Application in Steroid Receptor
Extraction
|
Journal
of Clinical Ligand Assay
|
Journal
Article
|
Spring
2004
|
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 1A. |
RISK
FACTORS
|
·
|
the
problems, delays, expenses, and complications frequently encountered
by
early-stage companies;
|
·
|
market
acceptance of our pressure cycling technology products and services
for
sample preparation;
|
·
|
the
success of our sales and marketing programs;
and
|
·
|
changes
in economic, regulatory or competitive conditions in the markets
we intend
to serve.
|
·
|
obtain
financing with terms that may have the effect of diluting or adversely
affecting the holdings or the rights of the holders of our common
stock;
|
·
|
obtain
funds through arrangements with future collaboration partners or
others
that may require us to relinquish rights to some or all of our
technologies or products; or
|
·
|
otherwise
reduce planned expenditures and forego other business opportunities,
which
could harm our business.
|
·
|
unanticipated
problems and costs relating to the development, testing, production,
marketing, and sale of our products;
|
·
|
delays
and costs associated with our ability to attract and retain key personnel;
|
·
|
availability
of adequate financing; and
|
·
|
competition.
|
·
|
identify
appropriate candidates for alliances, joint ventures or other business
relationships;
|
·
|
assure
that any candidate for an alliance, joint venture or business relationship
will provide us with the support
anticipated;
|
·
|
successfully
negotiate an alliance, joint venture or business relationship on
terms
that are advantageous to us; or
|
·
|
successfully
manage any alliance or joint
venture.
|
·
|
multiple,
conflicting and changing governmental laws and regulations, including
those that regulate high pressure equipment;
|
·
|
reduced
protection for intellectual property rights in some countries;
|
·
|
protectionist
laws and business practices that favor local companies;
|
·
|
political
and economic changes and
disruptions;
|
·
|
export/import
controls;
|
·
|
tariff
regulations; and
|
·
|
currency
fluctuations.
|
·
|
our
ability to increase our sales of our pressure cycling technology
products
for sample preparation on a consistent quarterly or annual basis;
|
·
|
the
product mix of the Barocycler instruments we install in a given period,
and whether the installations are completed pursuant to sales, rental
or
lease arrangements, and the average selling prices that we are able
to
command for our products;
|
·
|
our
ability to manage our costs and
expenses;
|
·
|
our
ability to continue our research and development activities without
unexpected costs and expenses; and
|
·
|
our
ability to comply with state and federal regulations without incurring
unexpected costs and expenses.
|
·
|
any
patent applications filed by us will result in issued
patents;
|
·
|
patent
protection will be secured for any particular
technology;
|
·
|
any
patents that have been or may be issued to us will be valid or
enforceable;
|
·
|
any
patents will provide meaningful protection to
us;
|
·
|
others
will not be able to design around our patents;
or
|
·
|
our
patents will provide a competitive advantage or have commercial
value.
|
·
|
a
classified board of directors;
|
·
|
advance
notice for stockholder nominations to the board of
directors;
|
·
|
limitations
on the ability of stockholders to remove directors;
and
|
·
|
a
provision that allows a majority of the directors to fill vacancies
on the
board of directors.
|
ITEM 1B. |
UNRESOLVED
STAFF
COMMENTS.
|
ITEM 2. |
PROPERTIES.
|
ITEM 3. |
LEGAL
PROCEEDINGS.
|
ITEM 4. |
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY
HOLDERS.
|
ITEM 5. |
MARKET
FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER
PURCHASES OF EQUITY
SECURITIES.
|
Common Stock Price
|
|||||||
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
|
Fiscal Year Ended December 31, 2007
|
High
|
Low
|
|||||
First
Quarter
|
$
|
4.35
|
$
|
3.50
|
|||
Second
Quarter
|
5.70
|
4.00
|
|||||
Third
Quarter
|
5.00
|
3.67
|
|||||
Fourth
Quarter
|
7.78
|
3.98
|
ITEM 6. |
SELECTED
FINANCIAL
DATA.
|
ITEM
7.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION.
|
-
|
sample
preparation for genomic, proteomic, and small molecule
studies;
|
-
|
pathogen
inactivation;
|
-
|
protein
purification;
|
-
|
control
of chemical (enzymatic) reactions; and
|
-
|
immunodiagnostics.
|
-
|
Acquisition
costs will be generally expensed as incurred;
|
-
|
Noncontrolling
interests (formerly known as “minority interests” – see
SFAS
160 discussion below) will be valued at fair value at the acquisition
date;
|
-
|
Acquired
contingent liabilities will be recorded at fair value at the acquisition
date and subsequently measured at either the higher of such amount
or the
amount determined under existing guidance for non-acquired contingencies;
|
-
|
In-process
research and development will be recorded at fair value as an
indefinite-lived intangible asset at the acquisition date;
|
-
|
Restructuring
costs associated with a business combination will be generally expensed
subsequent to the acquisition date; and
|
-
|
Changes
in deferred tax asset valuation allowances and income tax uncertainties
after the acquisition date generally will affect income tax expense.
|
-
|
ITEM 7A. |
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
|
ITEM 8. |
FINANCIAL
STATEMENTS AND SUPPLEMENTARY
DATA.
|
2007
|
2006
|
||||||
ASSETS
|
|||||||
CURRENT
ASSETS
|
|||||||
Cash
and cash equivalents
|
$
|
5,424,486
|
$
|
5,335,282
|
|||
Accounts
receivable
|
118,471
|
37,495
|
|||||
Inventories
|
172,548
|
19,658
|
|||||
Deposits
|
553,483
|
175,300
|
|||||
Prepaid
income taxes
|
56,863
|
38,687
|
|||||
Income
tax receivable
|
249,541
|
710,013
|
|||||
Prepaid
expenses and other current assets
|
94,783
|
71,476
|
|||||
Investments
in marketable securities
|
-
|
2,060,875
|
|||||
Total
current assets
|
6,670,175
|
8,448,786
|
|||||
PROPERTY
AND EQUIPMENT, NET
|
257,797
|
207,696
|
|||||
OTHER
ASSETS
|
|||||||
Intangible
assets, net
|
328,290
|
376,922
|
|||||
Assets
of discontinued operation
|
-
|
1,420,996
|
|||||
Total
other assets
|
328,290
|
1,797,918
|
|||||
TOTAL
ASSETS
|
$
|
7,256,262
|
$
|
10,454,400
|
|||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
|||||||
CURRENT
LIABILITIES
|
|||||||
Accounts
payable
|
$
|
152,729
|
$
|
174,289
|
|||
Accrued
employee compensation
|
377,190
|
242,497
|
|||||
Accrued
professional fees and other expenses
|
186,840
|
150,978
|
|||||
Income
taxes payable
|
4,519
|
45,962
|
|||||
Deferred
taxes
|
-
|
669,520
|
|||||
Deferred
revenue
|
15,075
|
4,099
|
|||||
Total
current liabilities
|
736,353
|
1,287,345
|
|||||
LONG
TERM LIABILITIES
|
|||||||
Deferred
revenue
|
6,767
|
9,126
|
|||||
Liabilities
of discontinued operation
|
-
|
1,042,493
|
|||||
Total
long term liabilities
|
6,767
|
1,051,619
|
|||||
TOTAL
LIABILITIES
|
743,120
|
2,338,964
|
|||||
COMMITMENTS
AND CONTINGENCIES (Note 9)
|
|||||||
STOCKHOLDERS'
EQUITY
|
|||||||
Preferred
stock; 1,000,000 shares authorized; 0 outstanding
|
-
|
-
|
|||||
Common
stock, $.01 par value; 20,000,000 shares authorized; 2,192,175
and
2,065,425 shares issued and outstanding
|
21,922
|
20,654
|
|||||
Additional
paid-in capital
|
6,284,616
|
5,347,641
|
|||||
Accumulated
other comprehensive income
|
-
|
1,384,876
|
|||||
Retained
earnings
|
206,604
|
1,362,265
|
|||||
Total
stockholders' equity
|
6,513,142
|
8,115,436
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
7,256,262
|
$
|
10,454,400
|
For the Year Ended
|
|||||||
December 31,
|
|||||||
2007
|
2006
|
||||||
REVENUE:
|
|||||||
PCT
Products, services, other
|
$
|
399,787
|
$
|
210,289
|
|||
Grant
revenue
|
246,083
|
-
|
|||||
Total
revenue
|
645,870
|
210,289
|
|||||
COSTS
AND EXPENSES:
|
|||||||
Cost
of PCT products and services
|
209,050
|
165,233
|
|||||
Research
and development
|
2,022,730
|
1,429,711
|
|||||
Selling
and marketing
|
1,386,519
|
528,265
|
|||||
General
and administrative
|
2,174,739
|
2,145,196
|
|||||
Total
operating costs and expenses
|
5,793,038
|
4,268,405
|
|||||
Operating
loss from continuing operations
|
(5,147,168
|
)
|
(4,058,116
|
)
|
|||
OTHER
INCOME:
|
|||||||
Realized
gain on securities available for sale
|
2,028,720
|
517,938
|
|||||
Interest
income
|
286,600
|
381,713
|
|||||
Total
other income
|
2,315,320
|
899,651
|
|||||
Loss
from continuing operations before income taxes
|
(2,831,848
|
)
|
(3,158,465
|
)
|
|||
Income
tax benefit from continuing operations
|
520,214
|
745,354
|
|||||
Loss
from continuing operations
|
(2,311,634
|
)
|
(2,413,111
|
)
|
|||
DISCONTINUED
OPERATIONS:
|
|||||||
Gain
on sale of net assets related to discontinued operations (net of
income
tax of $218,060)
|
1,155,973
|
-
|
|||||
Net
loss
|
$
|
(1,155,661
|
)
|
$
|
(2,413,111
|
)
|
|
Loss
per share from continuing operations - basic and diluted
|
$
|
(1.11
|
)
|
$
|
(1.01
|
)
|
|
Income
per share from discontinued operations - basic and diluted
|
0.55
|
-
|
|||||
Net
loss per share - basic and diluted
|
$
|
(0.56
|
)
|
$
|
(1.01
|
)
|
|
Weighted
average number of shares used to calculate income (loss) per share
- basic
and diluted
|
2,078,657
|
2,396,077
|
For
the Year Ended
|
|||||||
December
31,
|
|||||||
2007
|
2006
|
||||||
Other
Comprehensive Loss
|
|||||||
Net
loss
|
$
|
(1,155,661
|
)
|
$
|
(2,413,111
|
)
|
|
Holding
gain
|
(27,479
|
)
|
(1,383,417
|
)
|
|||
Reclassification
of unrealized gain to realized gain on securities during the
period
|
(2,028,720
|
)
|
(517,938
|
)
|
|||
Unrealized
loss on marketable securities
|
(2,056,199
|
)
|
(1,901,355
|
)
|
|||
Income
tax benefit related to items of other comprehensive loss
|
671,323
|
748,268
|
|||||
Total
other comprehensive loss, net of taxes
|
(1,384,876
|
)
|
(1,153,087
|
)
|
|||
Comprehensive
loss
|
$
|
(2,540,537
|
)
|
$
|
(3,566,198
|
)
|
Accumulated
|
|
|||||||||||||||||||||
Common Stock
|
Additional
|
Other
|
Loan Receivable
|
Total
|
||||||||||||||||||
$.01 Par
|
Paid-In
|
Comprehensive
|
from Officer/
|
Retained
|
Stockholders'
|
|||||||||||||||||
Shares
|
Value
|
Capital
|
Income
|
Director
|
Earnings
|
Equity
|
||||||||||||||||
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
|
|||||||||
|
||||||||||||||||||||||
Issuance
costs relating to private placement
|
|
|
(62,617
|
)
|
|
|
(62,617
|
)
|
||||||||||||||
Stock
issued in private placement
|
126,750
|
1,268
|
632,482
|
633,750
|
||||||||||||||||||
Stock-based
compensation
|
367,110
|
367,110
|
||||||||||||||||||||
Net
loss
|
|
|
|
|
(1,155,661
|
)
|
(1,155,661
|
)
|
||||||||||||||
Unrealized
loss on investments (net of tax)
|
|
|
|
(1,384,876
|
)
|
|
(1,384,876
|
)
|
||||||||||||||
BALANCE,
December 31, 2007
|
2,192,175
|
$
|
21,922
|
$
|
6,284,616
|
$
|
-
|
$
|
-
|
$
|
206,604
|
$
|
6,513,142
|
For the Year Ended
|
|||||||
December 31,
|
|||||||
2007
|
2006
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||
Net
loss
|
$
|
(1,155,661
|
)
|
$
|
(2,413,111
|
)
|
|
Less
gain on sale of discontinued operations
|
(1,155,973
|
)
|
-
|
||||
Loss
from continuing operations
|
$
|
(2,311,634
|
)
|
$
|
(2,413,111
|
)
|
|
Adjustments
to reconcile loss to net cash used in operating
activities:
|
|||||||
Depreciation
and amortization
|
179,446
|
146,256
|
|||||
Non-cash,
stock-based compensation expense
|
367,110
|
660,278
|
|||||
Loss
on disposal of property and equipment
|
-
|
42,781
|
|||||
Interest
received with exchange of stock from Director/CEO
|
-
|
(25,487
|
)
|
||||
Realized
gain on sale of marketable securities
|
(2,028,720
|
)
|
(517,938
|
)
|
|||
Changes
in operating assets and liabilities:
|
|
||||||
Accounts
receivable
|
(80,976
|
)
|
21,303
|
||||
Inventories
|
(152,890
|
)
|
65,549
|
||||
Deposits
|
(378,183
|
)
|
(156,120
|
)
|
|||
Income
tax receivable
|
460,472
|
(178,891
|
)
|
||||
Prepaid
income taxes
|
(18,176
|
)
|
(38,687
|
)
|
|||
Prepaid
expenses and other current assets
|
(23,307
|
)
|
(15,370
|
)
|
|||
Accounts
payable
|
(21,560
|
)
|
117,894
|
||||
Accrued
employee compensation
|
134,693
|
148,143
|
|||||
Other
accrued expenses
|
10,129
|
44,966
|
|||||
Deferred
revenue
|
8,617
|
13,225
|
|||||
Income
taxes payable
|
(41,443
|
)
|
(17,767
|
)
|
|||
Net
cash used in operating activities from continuing
operations
|
(3,896,422
|
)
|
(2,102,976
|
)
|
|||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
Additions
to property and equipment
|
(180,915
|
)
|
(65,609
|
)
|
|||
Proceeds
from sale of marketable securities
|
2,033,397
|
518,463
|
|||||
Net
cash provided by investing activities from continuing
operations
|
1,852,482
|
452,854
|
|||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
Repurchase
of common stock
|
-
|
(323,158
|
)
|
||||
Proceeds
from the issuance of common stock
|
571,133
|
5,400
|
|||||
Net
cash provided by (used in) financing activities from continuing
operations
|
571,133
|
(317,758
|
)
|
||||
CASH
FLOWS FROM DISCONTINUED OPERATIONS:
|
|||||||
Operating
cash flows
|
(218,060
|
)
|
(230,915
|
)
|
|||
Cash
flows from investing activities
|
1,780,071
|
1,117,305
|
|||||
Net
cash provided by discontinued operations
|
1,562,011
|
886,390
|
|||||
CHANGE
IN CASH AND CASH EQUIVALENTS:
|
89,204
|
(1,081,490
|
)
|
||||
Cash
and cash equivalents, beginning of year
|
5,335,282
|
6,416,772
|
|||||
Cash
and cash equivalents, end of year
|
$
|
5,424,486
|
$
|
5,335,282
|
|||
SUPPLEMENTAL
INFORMATION:
|
|||||||
Income
taxes paid
|
$
|
20,800
|
$
|
230,863
|
|||
Income
taxes received
|
723,801
|
-
|
December
31,
|
|||||||
2007
|
2006
|
||||||
Raw
materials
|
$
|
28,115
|
$
|
3,158
|
|||
Finished
goods
|
144,433
|
16,500
|
|||||
Total
|
$
|
172,548
|
$
|
19,658
|
For the Year Ended
|
|||||||
December 31,
|
|||||||
2007
|
2006
|
||||||
Numerator:
|
|||||||
Loss
from continuing operations - basic and diluted
|
$
|
(2,311,634
|
)
|
$
|
(2,413,111
|
)
|
|
Denominator:
|
|||||||
Weighted
Average Shares Outstanding, basic and diluted
|
2,078,657
|
2,396,077
|
|||||
Loss
per share from continuing operations - basic and diluted
|
$
|
(1.11
|
)
|
$
|
(1.01
|
)
|
|
Shares
excluded from calculations
|
211,796
|
118,751
|
Assumptions
|
Outside Board
Members
|
Officers &
Employees |
||
Expected
life
|
5.0
(yrs)
|
6.0
(yrs)
|
||
Expected
volatility
|
55.66%
- 77.86%
|
55.66%
- 92.53%
|
||
Risk-free
interest rate
|
3.69%
- 4.94%
|
3.38%
- 4.94%
|
||
Forfeiture
rate
|
5.00%
|
5.00%
|
||
Expected
dividend yield
|
0.0%
|
0.0%
|
Year Ended December 31,
|
|||||||
2007
|
2006
|
||||||
Cost
of PCT products and services
|
$
|
4,746
|
$
|
9,955
|
|||
Research
and development
|
141,115
|
181,609
|
|||||
Selling
and marketing
|
70,770
|
44,086
|
|||||
General
and administrative
|
150,479
|
424,628
|
|||||
Total
stock-based compensation expense
|
$
|
367,110
|
$
|
660,278
|
- |
Acquisition
costs will be generally expensed as incurred;
|
- |
Noncontrolling
interests (formerly known as “minority interests” – see SFAS 160
discussion below) will be valued at fair value at the acquisition
date;
|
- |
Acquired
contingent liabilities will be recorded at fair value at the acquisition
date and subsequently measured at either the higher of such amount
or the
amount determined under existing guidance for non-acquired contingencies;
|
- |
In-process
research and development will be recorded at fair value as an
indefinite-lived intangible asset at the acquisition date;
|
- |
Restructuring
costs associated with a business combination will be generally expensed
subsequent to the acquisition date; and
|
-
|
Changes
in deferred tax asset valuation allowances and income tax uncertainties
after the acquisition date generally will affect income tax expense.
|
2007
|
2006
|
||||||
Laboratory
and manufacturing equipment
|
$
|
59,361
|
$
|
43,986
|
|||
Office
equipment
|
105,906
|
64,496
|
|||||
PCT
collaboration, demonstration and leased systems
|
351,838
|
227,708
|
|||||
517,105
|
336,190
|
||||||
Less
accumulated depreciation
|
(259,308
|
)
|
(128,494
|
)
|
|||
Net
book value
|
$
|
257,797
|
$
|
207,696
|
2007
|
2006
|
||||||
PCT
Patents
|
$
|
778,156
|
$
|
778,156
|
|||
Less
accumulated amortization
|
(449,866
|
)
|
(401,234
|
)
|
|||
Net
book value
|
$
|
328,290
|
$
|
376,922
|
For the Year Ended
December 31, |
|||||||
2007
|
2006
|
||||||
Current
benefit: federal
|
$
|
481,394
|
$
|
929,961
|
|||
Current
benefit (provision): state
|
38,820
|
(184,607
|
)
|
||||
Total
current benefit
|
520,214
|
745,354
|
|||||
Deferred
provision: federal
|
-
|
-
|
|||||
Deferred
provision: state
|
-
|
-
|
|||||
Total
deferred provision
|
-
|
-
|
|||||
Total
benefit for income taxes from continuing operations
|
$
|
520,214
|
$
|
745,354
|
December
31,
|
|||||||
|
2007
|
2006
|
|||||
Current
deferred taxes:
|
|||||||
Inventories
|
$
|
-
|
$
|
24,512
|
|||
Other
accruals
|
82,748
|
31,536
|
|||||
Unrealized
gain on marketable securities
|
-
|
(669,520
|
)
|
||||
Less:
valuation allowance
|
(82,748
|
)
|
(56,048
|
)
|
|||
Total
current deferred tax liabilities
|
$
|