Delaware
|
7372
|
95-4868120
|
(State
or other jurisdiction of
incorporation
or organization)
|
(Primary
Standard Industrial
Classification
Code Number)
|
(I.R.S.
Employer)
Identification
No.
|
Title
of Each Class of Securities to be Registered
|
Amount
To Be Registered
|
Proposed
Maximum Offering Price Per Share (1)
|
Proposed
Maximum Aggregate Offering Price
|
Amount
of Registration Fee
|
|||||||||
Common
Stock, $.001 par value per share (2)
|
52,000,000
|
$
|
0.024
|
$
|
1,248,000.00
|
$
|
133.54
|
||||||
Common
Stock, $.001 par value per share (3)
|
23,000,000
|
$
|
0.024
|
$
|
552,000
|
$
|
59.06
|
||||||
Total
|
75,000,000
|
$
|
1,800,000.00
|
$
|
192.60
|
Page
|
|
Prospectus
Summary
|
5
|
Risk
Factors
|
8
|
Forward
Looking Statements
|
12
|
Use
of Proceeds
|
12
|
Management's
Discussion and Analysis of
|
|
Financial
Condition or Plan of Operation
|
12
|
Description
of Business
|
19
|
Description
of Property
|
30
|
Legal
Proceedings
|
30
|
Directors
and Executive Officers
|
30
|
Executive
Compensation
|
33
|
Changes
In and Disagreements With Accountants on
|
|
Accounting
and Financial Disclosure
|
37
|
Market
for Common Equity and Related
|
|
Stockholder
Disclosure
|
37
|
Security
Ownership of Certain Beneficial Owners
|
|
and
Management
|
39
|
Selling
Shareholders
|
41
|
Certain
Relationships and Related Transactions
|
41
|
Description
of Securities
|
43
|
Plan
of Distribution
|
43
|
Legal
Matters
|
45
|
Experts
|
45
|
Where
You Can Find More Information
|
45
|
Disclosure
of Commission Position on Indemnification
|
|
for
Securities Act Liabilities
|
46
|
Index
to Consolidated Financial Statements
|
F-1
|
Shares
offered by Selling Stockholders
|
Up
to 75,000,000 shares, based on current market prices, including (i)
up to
52,000,000shares issuable upon conversion of our principal amount
$2,825,000 10% secured convertible debentures, which are convertible
into
shares of our common stock at a fixed price equal to $.04 per share,
and (ii) 23,000,000 shares issuable upon the exercise of warrants at
an exercise price equal to $.025 per share.
This
number represents approximately 9.99% of our current outstanding
stock.
|
Common
Stock to be outstanding after the offering
|
825,998,259
*
|
Use
of Proceeds
|
We
are not selling any shares of common stock in this offering and therefore
will not receive any proceeds from this offering. We will, however,
receive proceeds from the exercise of warrants to purchase 23,000,000
shares of common stock in the aggregate amount of $575,000, if such
warrants are exercised and if such warrants are exercised on a cash
basis.
We intend to use such proceeds, if any, for working capital and general
corporate purposes. See “Use of Proceeds” for a complete
description.
|
Risk
Factors
|
The
purchase of our common stock involves a high degree of risk. You
should
carefully review and consider "Risk Factors" beginning on page
8.
|
OTC
Bulletin Board Trading Symbol
|
IVHG.OB
|
Lender
|
Amount
of Loan
|
Date
of Loan
|
Due
Date
|
|||||||
Eugene
Gartlan
|
$
|
40,000
|
September
19, 2005
|
October
19, 2005
|
||||||
Jerry
Horne
|
$
|
50,000
|
September
22, 2005
|
October
22, 2005
|
||||||
James
Marks
|
$
|
30,000
|
September
22, 2005
|
October
22, 2005
|
||||||
Eugene
Gartlan
|
$
|
5,000
|
October
5, 2005
|
January
5, 2006
|
||||||
Rick
Wynns
|
$
|
30,000
|
October
3, 2005
|
November
3, 2005
|
||||||
Rick
Wynns
|
$
|
30,000
|
October
14, 2005
|
February
14, 2006
|
||||||
Gary
McNear
|
$
|
1,000
|
November
22, 2005
|
February
22, 2006
|
||||||
Jerry
Horne
|
$
|
50,000
|
November
28, 2005
|
December
28, 2005
|
||||||
James
Marks
|
$
|
21,000
|
December
21, 2005
|
March
21, 2006
|
·
|
Guidance
Systems
|
·
|
Sensor
Systems
|
·
|
Voice
Control Systems
|
·
|
Tactile
Control Systems
|
·
|
Laser
Welding
|
·
|
Material
Handling
|
·
|
Medical
Applications
|
·
|
Elder
Care Control Systems
|
·
|
Plasma
Cutting
|
·
|
Autonomous
Underwater Vehicles
|
·
|
Homeland
Security Systems
|
·
|
Security
Systems
|
·
|
Pharmaceutical
Production
|
·
|
TIG/MIG
Welding
|
·
|
Medical
Robotics
|
·
|
worldwide
investment in industrial robots was up 17 percent in 2004 and in
the first
half of 2005, orders were up another 13
percent
|
·
|
North
American robotics companies posted record new orders in 2005, surpassing
its previous high set in 1999. A total of 18,228 robots valued at
$1.16
billion were ordered by North American manufacturing companies, an
increase of 23% in units and 17% in dollars over 2004 totals. When
orders
placed by companies outside of North America are added, the final
totals
are 19,445 robots valued at $1.22 billion, gains of 21% in units
and 15%
in dollars over last year.
|
|
Yearly
Installations
|
Operational
Stock at Year End
|
|||||||||||||||||||||||
Country
|
2002
|
2003
|
2004
|
2008
|
2002
|
2003
|
2004
|
2008
|
|||||||||||||||||
Japan
|
25,373
|
31,588
|
37,086
|
45,900
|
350,169
|
348,734
|
356,483
|
390,500
|
|||||||||||||||||
North
American
|
9,955
|
12,693
|
13,444
|
16,500
|
103,515
|
112,390
|
121,937
|
155,700
|
|||||||||||||||||
(US,
Canada, Mexico)
|
|||||||||||||||||||||||||
Germany
|
11,862
|
13,081
|
13,401
|
14,900
|
105,212
|
112,393
|
120,544
|
151,100
|
|||||||||||||||||
Europe,
rest of
|
14,816
|
14,751
|
15,895
|
18,800
|
139,566
|
149,632
|
158,362
|
197,000
|
|||||||||||||||||
Asia/Australia
|
5,123
|
8,991
|
15,225
|
24,500
|
60,427
|
73,987
|
86,710
|
142,400
|
|||||||||||||||||
Other
Countries*
|
1,466
|
372
|
317
|
400
|
11,216
|
3,337
|
3,728
|
5,000
|
|||||||||||||||||
|
|||||||||||||||||||||||||
Totals
|
68,595
|
81,476
|
95,368
|
121,000
|
770,105
|
800,473
|
847,764
|
1,041,700
|
·
|
Underwater
systems
|
·
|
Cleaning
robots
|
·
|
Laboratory
robots
|
·
|
Demolition
and construction
|
·
|
Medical
robots
|
·
|
Mobile
robot platforms/general
|
·
|
Defense,
rescue, security
|
·
|
Field
robots (milking, forestry)
|
·
|
construction
of the details of the new plan that led to the decision to transform
and
then divest HTCS
|
·
|
restructuring
of the personnel and reduction of costs and writing off unproductive
assets
|
·
|
engagement
of key professionals
|
·
|
negotiating
with sources of new investment
|
·
|
identifying
and negotiating with acquisition
targets
|
(a) |
Warrants
to purchase 10,000,000 shares if through the Consultant’s direct efforts
and introductions, our sales (including its subsidiaries’ sales) are
increased by $5,000,000.
|
(b) |
Warrants
to purchase an additional 10,000,000 shares if through the Consultant’s
direct efforts and introductions, our sales (including its subsidiaries’
sales) are increased by an additional $10,000,000 for a total increase
of
Fifteen Million Dollars in sales.
|
Name
|
Age
|
Position
|
|
|
|
Walter
K. Weisel
|
66
|
Chairman,
Chief Executive Officer and Director
|
|
|
|
Martin
Nielson
|
54
|
Previously
Chief Executive Officer and Chairman of the Board of Directors;
Director
|
|
|
|
Gary
F. McNear
|
61
|
Director;
Previously C F O, Vice President, and Secretary
|
|
|
|
Craig
W. Conklin
|
56
|
Director;
Previously Chief Operating Officer and Vice President
|
|
|
|
Rick
Wynns
|
59
|
Director
|
|
|
|
Eugene
V. Gartlan
|
62
|
Chief
Financial Officer
|
|
|
|
Sheri
Aws
|
45
|
Vice
President and Secretary
|
|
|
|
|
|
Restricted
|
|
|
|
|||||||||||||||||
Name
& Position
|
Year
|
Salary
|
Bonus
|
Other
|
Stock
|
Options
|
LTIP
|
All
Other
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Walter
K. Weisel
|
2005
|
$
|
150,000
|
0.000
|
0
|
0
|
20,000,000
|
0
|
$
|
69,100
|
(1)
|
||||||||||||||
Chairman
and CEO (1) (3)
|
2004
|
$
|
150,000
|
0.000
|
0
|
0
|
5,000,000
|
0
|
0
|
||||||||||||||||
|
2003
|
$
|
150,000
|
0.000
|
0
|
0
|
0
|
0
|
0
|
||||||||||||||||
|
|||||||||||||||||||||||||
Martin
Nielson
|
2005
|
$
|
0
|
0.000
|
0
|
0
|
0
|
0
|
|
(2)
|
|||||||||||||||
Chairman
and CEO (1) (2) (3)
|
2004
|
$
|
100,000
|
0.000
|
0
|
0
|
5,000,000
|
0
|
|
(2)
|
|||||||||||||||
|
2003
|
$
|
116,667
|
0.000
|
0
|
0
|
0
|
0
|
0
|
||||||||||||||||
|
|||||||||||||||||||||||||
Eugene
V. Gartlan
|
2005
|
$
|
0
|
0.000
|
0
|
12,000,000
|
18,000,000
|
0
|
$
|
12,000
|
(4)
|
||||||||||||||
Chief
Financial Officer
|
Options
in Year Ended December 31, 2005
|
Individual
Grants
|
Name
|
Number
of Shares Underlying Options
|
|
|
%
of Total Options Granted to Employees
|
|
|
Exercise
Price
|
|
|
Market
Price
|
|
|
Expiration
Date
|
Walter
K. Weisel
|
15,000,000
|
(1)
|
30.8
|
%
|
$
|
.017
|
(1)
|
$
|
.017
|
4/11/2015
|
||||||
Martin
Nielson
|
0
|
0
|
--
|
--
|
--
|
|||||||||||
Eugene
V. Gartlan
|
18,000,000
|
(2)
|
37.0
|
%
|
$
|
.036
|
(2)
|
$
|
.035
|
6/21/2015
|
Plan
Category
|
Number
of shares to be issued upon exercise of outstanding
options
|
Weighted
average exercise price of outstanding options
|
Number
of securities remaining available for future issuance
|
|||||||
Equity
compensation plans approved by security holders
|
0
|
0
|
0
|
|||||||
|
||||||||||
Equity
compensation plans not approved by security holders
|
103,107,400
|
$
|
0.016
|
5,042,600
|
||||||
|
||||||||||
Total
|
103,107,400
|
$
|
0.016
|
5,042,600
|
Common
Stock
|
|
|
|||||
|
|
|
|||||
Year
Ended December 31, 2004
|
High
|
Low
|
|||||
First
quarter
|
$
|
0.056
|
$
|
0.012
|
|||
Second
quarter
|
$
|
0.017
|
$
|
0.006
|
|||
Third
Quarter
|
$
|
0.014
|
$
|
0.006
|
|||
Fourth
Quarter
|
$
|
0.010
|
$
|
0.005
|
Year
Ended December 31, 2005
|
High
|
Low
|
|||||
First
quarter
|
$
|
0.032
|
$
|
0.008
|
|||
Second
quarter
|
$
|
0.067
|
$
|
0.015
|
|||
Third
quarter
|
$
|
0.042
|
$
|
0.010
|
|||
Fourth
quarter
|
$
|
0.023
|
$
|
0.009
|
Year
Ended December 31, 2006
|
High
|
Low
|
|||||
First
quarter
|
$
|
0.024
|
$
|
0.006
|
|||
Second
quarter
|
$
|
0.045
|
$
|
0.011
|
|||
Third
Quarter*
|
$
|
0.033
|
$
|
0.012
|
·
|
Each
person or entity known by us to beneficially own more than 5% of
the
outstanding shares of our common
stock;
|
·
|
Each
of our executive officers and directors;
and
|
·
|
All
of our executive officers and directors as a
group.
|
Walter
K. Weisel
|
62,128,047
|
8.14
|
%
|
||||
|
|||||||
Martin
Nielson (1)
|
36,751,700
|
4.85
|
%
|
||||
|
|||||||
Gary
McNear (2)
|
21,902,117
|
2.89
|
%
|
||||
|
|||||||
Craig
Conklin (3)
|
23,223,617
|
3.07
|
%
|
||||
|
|||||||
Eugene
V. Gartlan (4)
|
46,437,196
|
6.01
|
%
|
||||
|
|||||||
Jerry
E. Horne
|
74,329,227
|
9.90
|
%
|
||||
|
|||||||
Richard
K. and Johanna Wynns
|
47,020,748
|
6.24
|
%
|
||||
|
|||||||
Sheri
Aws
|
6,034,483
|
*
|
|||||
|
|||||||
Directors
and Officers as a Group
|
196,497,160
|
24.21
|
%
|
Total
|
|||||||
Total
Shares of
|
Percentage
|
Percentage
|
|||||
Common
Stock
|
of
Common
|
Shares
of
|
Beneficial
|
of
Common
|
|||
Issuable
Upon
|
Stock,
|
Common
Stock
|
Beneficial
|
Percentage
of
|
Ownership
|
Stock
Owned
|
|
Conversion
of
|
Assuming
|
Included
in
|
Ownership
|
Common
Stock
|
After
the
|
After
|
|
Name
|
Notes
|
Full
|
Prospectus
|
Before
the
|
Owned
Before
|
Offering
|
Offering
|
and/or
Warrants
|
Conversion
(1)
|
Offering
|
Offering*
|
(2)
|
(2)
|
||
Cornell
Capital
Partners,
L.P. (3)
|
163,625,000
|
17.9%
|
Up
to
75,000,000(4)
shares
|
37,474,813
|
4.99%
|
0
|
--
|
Lender
|
Amount
of Loan
|
Date
of Loan
|
Due
Date
|
|||||||
Eugene
Gartlan
|
$
|
40,000
|
September
19, 2005
|
October
19, 2005
|
||||||
Jerry
Horne
|
$
|
50,000
|
September
22, 2005
|
October
22, 2005
|
||||||
Eugene
Gartlan
|
$
|
5,000
|
October
5, 2005
|
January
5, 2006
|
||||||
Rick
Wynns
|
$
|
30,000
|
October
3, 2005
|
November
3, 2005
|
||||||
Rick
Wynns
|
$
|
30,000
|
October
14, 2005
|
February
14, 2006
|
||||||
Gary
McNear
|
$
|
1,000
|
November
22, 2005
|
February
22, 2006
|
||||||
Jerry
Horne
|
$
|
50,000
|
November
28, 2005
|
December
28, 2005
|
·
|
Block
trades in which the broker or dealer so engaged will attempt to sell
the
common stock as agent but may position and resell a portion of the
block
as principal to facilitate the
transaction;
|
·
|
An
exchange distribution in accordance with the rules of any stock exchange
on which the common stock is
listed;
|
·
|
Ordinary
brokerage transactions and transactions in which the broker solicits
purchases;
|
·
|
Privately
negotiated transactions;
|
·
|
In
connection with short sales of company
shares;
|
·
|
Through
the distribution of common stock by the selling stockholder to its
partners, members or stockholders;
|
·
|
By
pledge to secure debts of other
obligations;
|
·
|
In
connection with the writing of non-traded and exchange-traded call
options, in hedge transactions and in settlement of other transactions
in
standardized or over-the-counter
options;
|
·
|
Purchases
by a broker-dealer as principal and resale by the broker-dealer for
its
account; or
|
·
|
In
a combination of any of the above.
|
·
|
that
a broker or dealer approve a person's account for transactions
in penny
stocks; and
|
·
|
the
broker or dealer receive from the investor a written agreement
to the
transaction, setting forth the identity and quantity of the penny
stock to
be purchased.
|
·
|
obtain
financial information and investment experience objectives of the
person;
and
|
·
|
make
a reasonable determination that the transactions in penny stocks
are
suitable for that person and the person has sufficient knowledge
and
experience in financial matters to be capable of evaluating the
risks of
transactions in penny stocks.
|
·
|
sets
forth the basis on which the broker or dealer made the suitability
determination; and
|
·
|
that
the broker or dealer received a signed, written agreement from
the
investor prior to the transaction.
|
ASSETS
|
||||
|
|
|||
Current
assets
|
|
|||
Cash
|
$
|
248,155
|
||
Accounts receivable, net
|
175,587
|
|||
Inventory
|
71,946
|
|||
|
||||
Total current assets
|
495,688
|
|||
|
||||
Property
and equipment, net
|
163,622
|
|||
|
||||
Other
assets
|
741,164
|
|||
Deferred
financing cost
|
296,285
|
|||
|
||||
TOTAL ASSETS
|
$
|
1,696,759
|
||
|
||||
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
||||
Current
liabilities
|
||||
Current maturities of long-term debt
|
$
|
67,382
|
||
Accounts payable
|
1,125,209
|
|||
Accrued expenses
|
1,414,683
|
|||
Notes payable
|
734,501
|
|||
Dividend payable
|
38,950
|
|||
Total current liabilities
|
3,380,725
|
|||
|
||||
Long-term
debt
|
921,718
|
|||
|
||||
Commitments
|
||||
STOCKHOLDERS'
DEFICIT:
|
||||
Preferred stock, $.001 par value, 10,000,000 shares
authorized,
|
||||
492,000 shares issued and outstanding
|
492
|
|||
Common stock, $.001 par value, 900,000,000 shares
authorized,
|
||||
662,926,968 shares issued and outstanding
|
662,928
|
|||
Additional paid-in capital
|
8,548,878
|
|||
Accumulated deficit
|
(11,817,982
|
)
|
||
Total Stockholders' Deficit
|
(2,605,684
|
)
|
||
|
||||
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
$
|
1,696,759
|
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||
|
June
30
|
June
30
|
|||||||||||
|
2006
|
2005
|
2006
|
2005
|
|||||||||
|
|
|
|
|
|||||||||
Revenues
|
$
|
389,981
|
$
|
--
|
$
|
526,471
|
$
|
--
|
|||||
|
|||||||||||||
Cost
of revenues
|
$
|
279,247
|
$
|
--
|
$
|
386,937
|
$
|
--
|
|||||
|
|||||||||||||
Gross
profit
|
$
|
110,734
|
$
|
--
|
$
|
139,534
|
$
|
--
|
|||||
|
|||||||||||||
Operating
expenses:
|
|||||||||||||
|
|||||||||||||
Selling,
general and administrative
|
$
|
849,306
|
$
|
255,825
|
$
|
1,792,215
|
$
|
340,168
|
|||||
Outside
services
|
110,098
|
8,921
|
160,357
|
148,684
|
|||||||||
Legal
fees
|
128,501
|
42,022
|
155,535
|
56,020
|
|||||||||
Professional
fees
|
65,153
|
40,056
|
83,858
|
335,068
|
|||||||||
Depreciation
and amortization
|
7,495
|
1,366
|
12,945
|
1,782
|
|||||||||
|
|||||||||||||
Total
operating expenses
|
$
|
1,160,553
|
$
|
348,190
|
$
|
2,204,910
|
$
|
881,722
|
|||||
|
|||||||||||||
Loss
from operations
|
$
|
(1,049,819
|
)
|
$
|
(348,190
|
)
|
$
|
(2,065,376
|
)
|
$
|
(881,722
|
)
|
|
|
|||||||||||||
Interest
expense
|
(44,517
|
)
|
(36,773
|
)
|
(131,299
|
)
|
(60,310
|
)
|
|||||
|
|||||||||||||
Derivative
income (loss)
|
(127,200
|
)
|
--
|
(141,192
|
)
|
--
|
|||||||
|
|||||||||||||
Other
income
|
28,025
|
--
|
28,025
|
--
|
|||||||||
|
|||||||||||||
Net
loss
|
$
|
(1,193,511
|
)
|
$
|
(384,963
|
)
|
$
|
(2,309,842
|
)
|
$
|
(942,032
|
)
|
|
|
|||||||||||||
Loss
applicable to common shareholders:
|
|||||||||||||
Net
loss
|
$
|
(1,193,511
|
)
|
$
|
(384,963
|
)
|
$
|
(2,309,842
|
)
|
$
|
(942,032
|
)
|
|
Beneficial
conversion features and
|
|||||||||||||
Accretions
of preferred stock
|
--
|
(2,500
|
)
|
(22,610
|
)
|
(146,500
|
)
|
||||||
|
|||||||||||||
Net
loss applicable to common shareholders
|
$
|
(1,193,511
|
)
|
$
|
(387,463
|
)
|
$
|
(2,332,452
|
)
|
$
|
(1,088,532
|
)
|
|
|
|||||||||||||
Net
loss per share:
|
|||||||||||||
Basic
and diluted
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
|
|
|||||||||||||
Weighted
averaged shares outstanding:
|
|||||||||||||
Basic
and diluted
|
630,866,733
|
444,345,676
|
576,564,309
|
444,345,676
|
|
2006
|
2005
|
|||||
|
|
|
|||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|||||
Net loss
|
$
|
(2,309,842
|
)
|
$
|
(942,032
|
)
|
|
Adjustments to reconcile net loss to cash used in
|
|||||||
operating activities:
|
|||||||
Depreciation and amortization
|
12,945
|
1,782
|
|||||
Stock based compensation
|
597,227
|
--
|
|||||
Common stock issued for services
|
50,000
|
552,533
|
|||||
Option expense for services
|
--
|
12,871
|
|||||
Amortization of deferred financing costs
|
2,900
|
--
|
|||||
Amortization of debt discount
|
56,021
|
--
|
|||||
Derivative (income) loss
|
141,192
|
--
|
|||||
Changes in assets and liabilities:
|
|||||||
Increase in inventory
|
(11,784
|
)
|
--
|
||||
Increase in accounts receivable
|
(77,041
|
)
|
--
|
||||
Increase (decrease) in accounts payable
|
109,158
|
(1,286
|
)
|
||||
Increase (decrease) in accrued expenses
|
(215,677
|
)
|
22,589
|
||||
CASH
FLOWS USED BY OPERATING ACTIVITIES
|
(1,644,901
|
)
|
(353,543
|
)
|
|||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|||||||
Additions to property and equipment
|
(39,103
|
)
|
(17,632
|
)
|
|||
Purchase of CoroWare assets, net of liabilities
|
|||||||
assumed and amounts owed
|
(2,422
|
)
|
--
|
||||
CASH
FLOWS PROVIDED(USED)BY INVESTING ACTIVITIES
|
(41,525
|
)
|
(17,632
|
)
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|||||||
Proceeds from sale of common stock
|
2,304,130
|
368,000
|
|||||
Proceeds from sale of preferred stock
|
--
|
148,166
|
|||||
Payments of notes payable
|
(404,335
|
)
|
--
|
||||
Proceeds from notes payable
|
28,000
|
--
|
|||||
CASH
FLOW PROVIDED BY FINANCING ACTIVITIES
|
1,927,795
|
516,166
|
|||||
NET
INCREASE IN CASH
|
241,369
|
144,991
|
|||||
Cash,
beginning of period
|
6,786
|
2,794
|
|||||
Cash,
end of period
|
$
|
248,155
|
$
|
147,785
|
|||
SUPPLEMENTAL
CASH FLOW INFORMATION:
|
|||||||
Interest paid
|
$
|
33,584
|
$
|
19,876
|
|||
Income taxes paid
|
$
|
--
|
$
|
--
|
|||
Supplemental
Disclosure of Non-cash Transactions:
|
|||||||
Amortization of deferred financing costs
|
$
|
99,315
|
$
|
--
|
|||
Conversion of series A preferred stock
|
$
|
58,840
|
$
|
--
|
|||
Common stock issued for property and equipment
|
$
|
--
|
$
|
32,500
|
Outstanding,
December 31, 2005
|
103,107,400
|
||||
Granted
|
61,830,000
|
||||
Cancelled
|
--
|
||||
Exercised
|
--
|
||||
Outstanding,
June 30, 2006
|
164,937,400
|
||||
Weighted-average
grant-date fair
|
|||||
value of options
|
$
|
0.011
|
|||
Weighted-average
remaining years
|
|||||
of contractual life
|
9.2
|
|
Purchase
Allocation
|
Fair
Values
|
||||||
Current
assets
|
$
|
126,125
|
$
|
126,125
|
||||
Long-lived
assets:
|
||||||||
Acquired customer lists
|
605,242
|
822,000
|
||||||
Acquired employment contracts
|
132,977
|
180,600
|
||||||
Fixed assets
|
23,409
|
33,026
|
||||||
Accounts
payable and accrued liabilities
|
(281,353
|
)
|
(282,261
|
)
|
||||
|
$
|
606,400
|
$
|
879,490
|
||||
|
||||||||
Purchase
price:
|
||||||||
Cash
|
$
|
100,000
|
||||||
Common stock
|
150,000
|
|||||||
Common stock options
|
356,400
|
|||||||
|
$
|
606,400
|
|
(a)
|
Customer
lists are estimated to have an economic life of three years. The
Company
will amortize this acquired intangible asset using the straight-line
method over the estimated life.
|
|
(b)
|
Acquired
employment contracts with key members of former CoroWare management
have
terms of five years and embody significant restrictive covenants
and
non-competition agreements. The fair value of these intangible assets
will
be amortized over the contractual term of five years using the
straight-line method.
|
Six
months ended
|
|||||||
|
June
30, 2006
|
June
30, 2005
|
|||||
Revenues
|
$
|
849,717
|
$
|
459,030
|
|||
|
|||||||
Net
loss
|
$
|
(296,777
|
)
|
$
|
(438,371
|
)
|
|
|
|||||||
Earnings
Per Share
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
|
Martin
Nielson
|
30,085,033
shares
|
|
|
Gary
McNear
|
3,900,000
shares
|
|
|
Craig
Conklin
|
3,900,000
shares
|
|
Current
assets
|
|
|||
Cash
|
$
|
6,786
|
||
Inventory
|
60,162
|
|||
|
||||
Total
current assets
|
66,948
|
|||
|
||||
Property
and equipment, net
|
116,091
|
|||
|
||||
Deferred
financing cost
|
398,500
|
|||
|
||||
TOTAL
ASSETS
|
$
|
581,539
|
||
|
||||
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
||||
|
||||
Current
liabilities
|
||||
Current
maturities of long-term debt
|
$
|
67,382
|
||
Accounts
payable
|
844,548
|
|||
Accrued
expenses
|
1,519,602
|
|||
Notes
payable
|
984,780
|
|||
Dividend
payable
|
33,894
|
|||
Derivative
liability
|
44,308
|
|||
|
||||
Total
current liabilities
|
3,494,514
|
|||
|
||||
Long-term
debt
|
921,718
|
|||
|
||||
Mandatorily
redeemable Series A Preferred Stock
|
58,840
|
|||
|
||||
Total liabilities
|
4,475,072
|
|||
|
||||
Commitments
|
||||
|
||||
STOCKHOLDERS'
DEFICIT:
|
||||
Preferred
stock, $.001 par value, 10,000,000 shares authorized,
|
||||
492,000
Series B shares issued and outstanding
|
492
|
|||
Common
stock, $.001 par value, 900,000,000 shares authorized,
|
||||
467,074,046
shares issued and outstanding
|
467,075
|
|||
Additional
paid-in capital
|
5,124,395
|
|||
Accumulated
deficit
|
(9,485,495
|
)
|
||
|
||||
Total
Stockholders' Deficit
|
(3,893,533
|
)
|
||
|
||||
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
$
|
581,539
|
|
|
|
|||||
|
2005
|
2004
|
|||||
|
|
|
|||||
Revenues
|
$
|
--
|
$
|
--
|
|||
|
|||||||
Cost
of revenues
|
--
|
--
|
|||||
|
|||||||
Gross
profit
|
--
|
--
|
|||||
|
|||||||
Operating
expenses:
|
|||||||
|
|||||||
Selling,
general and administrative
|
857,515
|
270,059
|
|||||
Merger
related costs
|
--
|
570,874
|
|||||
Outside
services
|
411,707
|
262,050
|
|||||
Legal
fees
|
83,212
|
135,869
|
|||||
Professional
fees
|
392,885
|
85,763
|
|||||
Depreciation
and amortization
|
12,954
|
1,363
|
|||||
|
|||||||
Total
operating expenses
|
1,758,273
|
1,325,978
|
|||||
|
|||||||
Loss
from operations
|
(1,758,273
|
)
|
(1,325,978
|
)
|
|||
|
|||||||
Interest
expense
|
(133,544
|
)
|
(100,953
|
)
|
|||
Derivative
income (loss)
|
10,692
|
--
|
|||||
|
|||||||
Net
loss
|
$
|
(1,881,125
|
)
|
$
|
(1,426,931
|
)
|
|
|
|||||||
Loss
applicable to common shareholders:
|
|||||||
|
|||||||
Net
loss
|
$
|
(1,881,125
|
)
|
$
|
(1,426,931
|
)
|
|
Beneficial
conversion features and accretions of preferred stock
|
(149,758
|
)
|
(150,100
|
)
|
|||
Loss
applicable to common shareholders
|
$
|
(2,030,883
|
)
|
$
|
(1,577,031
|
)
|
|
|
|||||||
Loss
per common share:
|
|||||||
|
|||||||
Basic
and diluted
|
$
|
0.00
|
$
|
0.00
|
|||
|
|||||||
Weighted
averaged shares outstanding:
|
|||||||
Basic
and diluted
|
430,119,706
|
371,296,897
|
Additional
|
||||||||||||||||||||||
Common
Stock
|
Preferred
Stock
|
paid-in
|
Accumulated
|
|||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
capital
|
deficit
|
Total
|
||||||||||||||||
$
|
$
|
$
|
$
|
$
|
||||||||||||||||||
Balance,
December 31, 2003
|
192,645,050
|
192,645
|
--
|
--
|
3,276,621
|
(5,863,749
|
)
|
(2,394,483
|
)
|
|||||||||||||
Issuance
of common stock for notes payable
|
61,820,488
|
61,821
|
--
|
--
|
441,783
|
--
|
503,604
|
|||||||||||||||
Common
stock issued for services rendered
|
25,534,462
|
25,534
|
--
|
--
|
182,472
|
--
|
208,006
|
|||||||||||||||
Issuance
of common stock in connection with
reverse
merger and recapitalization
|
91,296,897
|
91,297
|
--
|
--
|
(774,862
|
)
|
--
|
(683,565
|
)
|
|||||||||||||
Issuance
of Series B Preferred Stock
|
--
|
--
|
376,834
|
377
|
376,457
|
--
|
376,834
|
|||||||||||||||
Dividend
declared on preferred stock
|
--
|
--
|
--
|
--
|
(9,850
|
)
|
--
|
(9,850
|
)
|
|||||||||||||
Beneficial
conversion feature embedded in mandatorily redeemable Series A
preferred stock
|
--
|
--
|
--
|
--
|
48,300
|
(3,600
|
)
|
44,700
|
||||||||||||||
Beneficial
conversion feature embedded in Series B preferred
stock
|
--
|
--
|
--
|
--
|
146,500
|
(146,500
|
)
|
--
|
||||||||||||||
Net
loss
|
--
|
--
|
--
|
--
|
--
|
(1,426,931
|
)
|
(1,426,931
|
)
|
|||||||||||||
Balance,
December 31, 2004
|
371,296,897
|
371,297
|
376,834
|
377
|
3,687,421
|
(7,440,780
|
)
|
(3,381,685
|
)
|
|||||||||||||
Issuance
of Series B preferred stock
|
--
|
--
|
148,166
|
148
|
148,018
|
--
|
148,166
|
|||||||||||||||
Common
stock issued for services rendered
|
54,508,303
|
54,508
|
--
|
--
|
650,525
|
--
|
705,033
|
|||||||||||||||
Sale
of common stock
|
25,933,334
|
25,934
|
--
|
--
|
442,066
|
--
|
468,000
|
|||||||||||||||
Conversion
of Series A preferred stock into common stock
|
8,735,511
|
8,736
|
--
|
--
|
36,064
|
(13,832
|
)
|
30,968
|
||||||||||||||
Conversion
of Series B preferred stock into common stock
|
6,600,001
|
6,600
|
(33,000
|
)
|
(33
|
)
|
(6,567
|
)
|
--
|
--
|
||||||||||||
Dividend
declared on preferred stock
|
--
|
--
|
--
|
--
|
(25,293
|
)
|
--
|
(25,293
|
)
|
|||||||||||||
Beneficial
conversion feature embedded in Series B preferred stock
|
--
|
--
|
--
|
--
|
141,500
|
(141,500
|
)
|
--
|
||||||||||||||
Beneficial
conversion feature embedded in convertible note
payable
|
--
|
--
|
--
|
--
|
30,000
|
--
|
30,000
|
|||||||||||||||
Dividend related
to beneficial conversion feature
|
--
|
--
|
--
|
--
|
--
|
(8,258
|
)
|
(8,258
|
)
|
|||||||||||||
Financing
costs in association with equity line of credit
|
--
|
--
|
--
|
--
|
(4,400
|
)
|
--
|
(4,400
|
)
|
|||||||||||||
Stock
option expense
|
--
|
--
|
--
|
--
|
25,061
|
--
|
25,061
|
|||||||||||||||
Net
loss
|
--
|
--
|
--
|
--
|
--
|
(1,881,125
|
)
|
(1,881,125
|
)
|
|||||||||||||
Balance
December 31, 2005
|
467,074,046
|
$
|
467,075
|
492,000
|
$
|
492
|
$
|
5,124,395
|
$
|
(9,485,495
|
)
|
$
|
(3,893,533
|
)
|
|
2005
|
2004
|
|||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|||||
Net
loss
|
$
|
(1,881,125
|
)
|
$
|
(1,426,931
|
)
|
|
Adjustments
to reconcile net loss to cash used in
|
|||||||
operating
activities:
|
|||||||
Depreciation
and amortization
|
12,954
|
1,363
|
|||||
Stock
option expense
|
25,061
|
--
|
|||||
Non
cash interest expense
|
40,280
|
--
|
|||||
Derivative
income
|
(10,692
|
)
|
--
|
||||
Common
stock issued for services rendered
|
605,033
|
208,006
|
|||||
Common
stock issued for interest expense
|
--
|
58,629
|
|||||
Changes
in assets and liabilities:
|
|||||||
Increase
in inventory
|
(60,162
|
)
|
--
|
||||
Increase
in accounts payable
|
267,710
|
226,732
|
|||||
Increase
in accrued expenses
|
176,124
|
610,940
|
|||||
|
|||||||
CASH
FLOWS USED IN OPERATING ACTIVITIES
|
(824,817
|
)
|
(321,261
|
)
|
|||
|
|||||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|||||||
|
|||||||
Additions
to property and equipment
|
(121,357
|
)
|
(5,896
|
)
|
|||
|
|||||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
(121,357
|
)
|
(5,896
|
)
|
|||
|
|||||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|||||||
Proceeds
from notes payable
|
336,500
|
158,000
|
|||||
Payments
on notes payable
|
(2,500
|
)
|
--
|
||||
Proceeds
from sale of common & preferred stock
|
616,166
|
391,834
|
|||||
Payments
on long-term debt
|
--
|
(224,999
|
)
|
||||
|
|||||||
CASH
FLOW FROM FINANCING ACTIVITIES
|
950,166
|
324,835
|
|||||
|
|||||||
NET
INCREASE (DECREASE) IN CASH
|
3,992
|
(2,322
|
)
|
||||
|
|||||||
Cash,
beginning of period
|
2,794
|
5,116
|
|||||
|
|||||||
Cash,
end of period
|
$
|
6,786
|
$
|
2,794
|
|||
|
|||||||
SUPPLEMENTAL
CASH FLOW INFORMATION:
|
|||||||
Interest
paid
|
$
|
19,876
|
$
|
99,597
|
|||
|
|||||||
Income
taxes paid
|
$
|
--
|
$
|
--
|
|||
|
|||||||
NON
CASH TRANSACTIONS:
|
|||||||
Common
stock issued for commitment fee
|
$
|
100,000
|
$
|
--
|
|||
Issuance
of convertible note for commitment fee
|
$
|
300,000
|
$
|
--
|
|
2005
|
2004
|
|||||
|
|
|
|||||
Loss
applicable to common shareholders
|
$
|
(2,030,883
|
)
|
$
|
(1,577,031
|
)
|
|
Deduct:
Intrinsic value expense recorded
|
--
|
--
|
|||||
Add:
total stock-based employee
|
|||||||
compensation
determined under fair value
|
|||||||
based
method
|
(37,628
|
)
|
--
|
||||
Pro
forma net loss applicable to common
|
|||||||
shareholders
|
($2,068,511
|
)
|
($1,577,031
|
)
|
|||
|
|||||||
Loss
per common share:
|
|||||||
|
|||||||
Basic
and diluted - as reported
|
$
|
(.00
|
)
|
$
|
(.00
|
)
|
|
|
|||||||
Basic
and diluted - pro forma
|
$
|
(.00
|
)
|
$
|
(.00
|
)
|
Shares
issued to shareholders as of December 31, 2003
|
192,645,050
|
|||
Shares
issued to shareholders for conversion of notes payable
|
61,820,488
|
|||
Shares
issued to shareholders for services rendered
|
25,534,462
|
|||
|
||||
Total
shares issued in reverse merger
|
280,000,000
|
Outstanding,
December 31, 2003
|
14,425,486
|
||||
Granted
|
33,962,655
|
||||
Cancelled
|
--
|
||||
Exercised
|
--
|
||||
Outstanding,
December 31, 2004
|
48,388,141
|
||||
Granted
|
80,719,259
|
||||
Cancelled
|
(26,000,000
|
)
|
|||
Exercised
|
--
|
||||
Outstanding,
December 31, 2005
|
103,107,400
|
||||
Weighted-average
grant-date fair
|
|||||
value
of options
|
$
|
0.016
|
|||
Weighted-average
remaining years
|
|||||
of
contractual life
|
9.1
|
Years
Ending December 31,
|
|
||||
2006
|
$
|
1,091,717
|
|||
2007
|
20,884
|
||||
2008
|
21,633
|
||||
2009
|
22,510
|
||||
2010
|
23,523
|
||||
Thereafter
|
793,613
|
||||
|
1,973,880
|
||||
Less:
current portion
|
(1,052,162
|
)
|
|||
|
$
|
921,718
|
Current
Operations
|
$
|
640,000
|
|||
Less,
Change in valuation allowance
|
(640,000
|
)
|
|||
Net
refundable amount
|
$
|
-
|
Net
operating loss carryover
|
$
|
3,100,000
|
|||
Less,
Change in valuation allowance
|
(3,100,000
|
)
|
|||
Net
deferred tax asset
|
$
|
-
|
ASSETS
|
|
|
|||||
|
March
31,
|
December
31,
|
|||||
|
2006
|
2005
|
|||||
|
(Unaudited)
|
|
|||||
Current
assets:
|
|
|
|||||
Cash
|
$
|
157,674
|
$
|
16,919
|
|||
Accounts
receivable, net of allowance of doubtful accounts
|
|||||||
of
$0 and $0, respectively
|
102,155
|
142,269
|
|||||
Total
current assets
|
259,829
|
159,188
|
|||||
|
|||||||
Property
and equipment, net
|
35,934
|
25,786
|
|||||
Other
assets
|
598
|
-
|
|||||
Total
assets
|
$
|
296,361
|
$
|
184,974
|
|||
|
|||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|||||||
Current
liabilities:
|
|||||||
Line
of credit
|
$
|
23,693
|
$
|
24,846
|
|||
Accounts
payable
|
227,710
|
154,900
|
|||||
Accounts
payable, related party
|
19,452
|
27,780
|
|||||
Accrued
liabilities
|
12,605
|
29,658
|
|||||
Advances
from officers
|
26,745
|
8,745
|
|||||
Other
current liabilities
|
-
|
667
|
|||||
Total
current liabilities
|
310,205
|
246,596
|
|||||
|
|||||||
Commitments
and contingencies
|
|||||||
|
|||||||
Stockholders’
equity (deficit):
|
|||||||
Preferred
stock, no par value, 10,000,000 shares
|
|||||||
authorized;
8,000,000 undesignated
|
-
|
-
|
|||||
Preferred
stock, Series A, no par value, 2,000,000
|
|||||||
shares
designated, 470,000 and 280,000 issued
|
|||||||
and
outstanding in 2006 and 2005, respectively
|
216,432
|
94,845
|
|||||
Common
stock: no par value, 10,000,000 shares
|
|||||||
authorized;
100,000 shares issued and
|
|||||||
outstanding
in 2006 and 2005
|
5,000
|
5,000
|
|||||
Accumulated
deficit
|
(235,276
|
)
|
(161,467
|
)
|
|||
Total
stockholders’ equity (deficit)
|
(13,844
|
)
|
(61,622
|
)
|
|||
Total
liabilities and stockholders’ equity (deficit)
|
$
|
296,361
|
$
|
184,974
|
|
2005
|
2004
|
|||||
|
|
|
|||||
Services
revenue
|
$
|
1,278,618
|
$
|
272,858
|
|||
|
|||||||
Operating
costs and expenses:
|
|||||||
Cost
of services revenues
|
1,078,481
|
209,683
|
|||||
Marketing
|
86,626
|
25,861
|
|||||
Payroll
and related benefits
|
70,206
|
7,589
|
|||||
General
and administrative and other operating
|
61,740
|
12,970
|
|||||
Professional
fees
|
47,202
|
4,373
|
|||||
Bad
debt expense
|
5,000
|
14,535
|
|||||
Consulting
|
-
|
30,785
|
|||||
Total
operating costs and expenses
|
1,349,255
|
305,796
|
|||||
|
|||||||
Loss
from operations
|
(70,637
|
)
|
(32,938
|
)
|
|||
|
|||||||
Other
income (expense):
|
|||||||
Loss
on extinguishment of debt
|
-
|
(60,810
|
)
|
||||
Interest
expense
|
(2,641
|
)
|
(1,251
|
)
|
|||
Other
income
|
12,222
|
-
|
|||||
Total
other income (expense)
|
9,581
|
(62,061
|
)
|
||||
Loss
before income taxes
|
(61,056
|
)
|
(94,999
|
)
|
|||
Income
taxes
|
-
|
-
|
|||||
|
|||||||
Net
loss
|
$
|
(61,056
|
)
|
$
|
(94,999
|
)
|
|
|
|||||||
Basic
and diluted loss per share
|
$
|
(0.48
|
)
|
$
|
(0.76
|
)
|
|
|
|||||||
Weighted
average shares
|
128,375
|
125,813
|
|
2006
|
2005
|
|||||
|
|
|
|||||
Services
revenue
|
$
|
571,833
|
$
|
182,563
|
|||
|
|||||||
Operating
costs and expenses:
|
|||||||
Cost
of services revenues
|
389,624
|
150,067
|
|||||
Consulting
|
122,087
|
-
|
|||||
Marketing
|
27,263
|
17,683
|
|||||
Payroll
and related benefits
|
34,753
|
10,190
|
|||||
General
and administrative and other operating
|
25,454
|
14,290
|
|||||
Professional
fees
|
42,120
|
1,827
|
|||||
Bad
debt expense
|
955
|
-
|
|||||
Total
operating costs and expenses
|
642,256
|
194,057
|
|||||
Loss
from operations
|
(
70,423
|
)
|
(
11,494
|
)
|
|||
Other
income (expense):
|
|||||||
Interest
expense
|
(4,432
|
)
|
(2,418
|
)
|
|||
Other
income
|
1,045
|
5,193
|
|||||
Total
other income (expense)
|
(
3,387
|
)
|
2,775
|
||||
|
|||||||
Loss
before income taxes
|
(73,810
|
)
|
(8,719
|
)
|
|||
|
|||||||
Income
taxes
|
-
|
-
|
|||||
|
|||||||
Net
loss
|
$
|
(
73,810
|
)
|
($8,719
|
)
|
||
|
|||||||
Basic
and diluted loss per share
|
($0.58
|
)
|
($0.07
|
)
|
|||
|
|||||||
Weighted
average shares
|
127,000
|
129,500
|
|
Preferred
Stock
|
Common
Stock
|
Accumulated
|
|
|||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Deficit
|
Total
|
|||||||||||||
|
|
|
|
|
|
|
|||||||||||||
Balances,
|
|
|
|
|
|
|
|||||||||||||
January
1, 2004
|
-
|
$
|
-
|
100,000
|
$
|
5,000
|
($5,412
|
)
|
($412
|
)
|
|||||||||
|
|||||||||||||||||||
Conversion
of loan
|
200,000
|
64,810
|
-
|
-
|
-
|
64,810
|
|||||||||||||
|
|||||||||||||||||||
Preferred
stock issued for
|
|||||||||||||||||||
services
and debt
|
95,000
|
30,785
|
-
|
-
|
-
|
30,785
|
|||||||||||||
|
|||||||||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
(
94,999
|
)
|
(
94,999
|
)
|
|||||||||||
|
|||||||||||||||||||
Balances,
|
|||||||||||||||||||
December
31, 2004
|
295,000
|
95,595
|
100,000
|
5,000
|
(100,411
|
)
|
184
|
||||||||||||
|
|||||||||||||||||||
Repurchase
of preferred
|
|||||||||||||||||||
stock
|
(15,000
|
)
|
(750
|
)
|
-
|
-
|
-
|
(750
|
)
|
||||||||||
|
|||||||||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
(
61,056
|
)
|
(
61,056
|
)
|
|||||||||||
|
|||||||||||||||||||
Balances,
|
|||||||||||||||||||
December
31, 2005
|
280,000
|
$
|
94,845
|
100,000
|
$
|
5,000
|
$
|
(
161,467
|
)
|
$
|
(
61,622
|
)
|
|
2005
|
2004
|
|||||
Cash
flows from operating activities:
|
|
|
|||||
Net
loss
|
($61,056
|
)
|
($94,999
|
)
|
|||
Adjustments
to reconcile net loss to net cash
|
|||||||
flows
from operating activities:
|
|||||||
Depreciation
|
7,268
|
1,943
|
|||||
Loss
on extinguishment of debt
|
-
|
60,810
|
|||||
Issuance
of stock for services
|
-
|
30,785
|
|||||
Changes
in operating accounts:
|
|||||||
Accounts
receivable
|
(141,234
|
)
|
405
|
||||
Other
assets
|
(4,201
|
)
|
4,201
|
||||
Accounts
payable
|
92,384
|
57,860
|
|||||
Accounts
payable, related party
|
27,780
|
-
|
|||||
Accrued
liabilities
|
(10,969
|
)
|
40,477
|
||||
|
|||||||
Net
cash flows from operating activities
|
(
90,028
|
)
|
101,482
|
||||
|
|||||||
Cash
flows from investing activities:
|
|||||||
Purchases
of property and equipment
|
(16,168
|
)
|
(15,643
|
)
|
|||
|
|||||||
Net
cash flows from investing activities
|
(
16,168
|
)
|
(
15,643
|
)
|
|||
|
|||||||
Cash
flows from financing activities:
|
|||||||
Purchase
preferred stock
|
(750
|
)
|
-
|
||||
(Repayment
of) proceeds from
|
|||||||
short-term
borrowings
|
(7,333
|
)
|
8,000
|
||||
Proceeds
from line of credit, net
|
24,846
|
-
|
|||||
Advances
from officers
|
7,500
|
2,236
|
|||||
|
|||||||
Net
cash flows from financing activities
|
24,263
|
10,236
|
|||||
|
|||||||
Net
increase (decrease) in cash
|
(81,933
|
)
|
96,075
|
||||
|
|||||||
Cash,
beginning of period
|
98,852
|
2,777
|
|||||
|
|||||||
Cash,
end of period
|
$
|
16,919
|
$
|
98,852
|
Cash
paid for interest
|
$
|
2,641
|
$
|
1,251
|
|||
|
|||||||
Cash
paid for income taxes
|
$
|
-
|
$
|
-
|
|
2006
|
2005
|
|||||
Cash
flows from operating activities:
|
|
|
|||||
Net
loss
|
($73,810
|
)
|
($8,719
|
)
|
|||
Adjustments
to reconcile net loss to
|
|||||||
net
cash flows from operating activities:
|
|||||||
Depreciation
|
1,900
|
1,141
|
|||||
Issuance
of preferred stock for services
|
122,087
|
-
|
|||||
Changes
in operating accounts:
|
|||||||
Accounts
receivable
|
40,114
|
(58,369
|
)
|
||||
Other
assets
|
(598
|
)
|
(4,201
|
)
|
|||
Accounts
payable
|
70,786
|
12,916
|
|||||
Accounts
payable, related party
|
(8,328
|
)
|
-
|
||||
Accrued
liabilities
|
(17,053
|
)
|
(37,889
|
)
|
|||
|
|||||||
Net
cash flows from operating activities
|
135,098
|
(
95,121
|
)
|
||||
|
|||||||
Cash
flows from investing activities:
|
|||||||
Purchases
of property and equipment
|
(10,023
|
)
|
(4,911
|
)
|
|||
Net
cash flows from investing activities
|
(
10,023
|
)
|
(
4,911
|
)
|
|||
|
|||||||
Cash
flows from financing activities:
|
|||||||
Re-purchase
of preferred stock
|
(500
|
)
|
(250
|
)
|
|||
Advances
(payments) from officers
|
18,000
|
(
3,642
|
)
|
||||
Principal
payments on short-term borrowings
|
(667
|
)
|
(2,000
|
)
|
|||
(Repayment
of) borrowings on line of credit
|
(1,153
|
)
|
19,951
|
||||
|
|||||||
Net
cash flows from financing activities
|
15,680
|
14,059
|
|||||
|
|||||||
Net
increase (decrease) in cash
|
140,755
|
(85,973
|
)
|
||||
|
|||||||
Cash,
beginning of period
|
16,919
|
98,852
|
|||||
|
|||||||
Cash,
end of period
|
$
|
157,674
|
$
|
12,879
|
Cash
paid for interest
|
$
|
4,432
|
$
|
2,418
|
|||
|
|||||||
Cash
paid for income taxes
|
$
|
-
|
$
|
-
|
|
2006
|
2005
|
|||||
|
(Unaudited)
|
|
|||||
Computer
equipment
|
$
|
42,329
|
$
|
32,306
|
|||
Tradeshow
equipment
|
2,762
|
2,762
|
|||||
|
45,091
|
35,068
|
|||||
Less
accumulated depreciation
|
(
9,157
|
)
|
(
9,282
|
)
|
|||
|
$
|
35,934
|
$
|
25,786
|
|
2005
|
|||
Current:
|
|
|||
Federal
|
$
|
-
|
||
State,
net of federal benefit
|
-
|
|||
|
-
|
|||
Deferred
|
-
|
|||
$
|
-
|
|
2005
|
|||
Net
current:
|
|
|||
Accounts
receivable reserves
|
$
|
1,865
|
||
Net
non-current:
|
||||
Fixed
assets
|
(
7,594
|
)
|
||
Net
operating loss
|
36,046
|
|||
|
||||
Valuation
allowance
|
(
30,317
|
)
|
||
|
$
|
-
|
|
2005
|
2004
|
|||||
Federal
statutory rate
|
(34.00
|
%)
|
(34.00
|
%)
|
|||
State
income taxes, net of federal benefit
|
(3.30
|
%)
|
(3.30
|
%)
|
|||
Non-deductible
share-based payments
|
--
|
34.34
|
%
|
||||
IRS
expense limitations (travel, penalties entertainment)
|
6.50
|
%
|
1.70
|
%
|
|||
Change
in valuation allowance
|
30.80
|
%
|
(1.26
|
%)
|
|||
Effective
income tax rate
|
0.00
|
%
|
0.00
|
%
|
|
·
|
During
the three months ended March 31, 2006, the Company issued 200,000
shares
of Series A Preferred Stock as compensation. The issued shares and
related
compensation expense were recorded at the estimated fair value of
the
Series A Preferred Stock of
$122,087.
|
|
·
|
During
the three months ended March 31, 2006, the Company re-purchased 10,000
shares of Series A Preferred Stock for $500. The shares were
retired.
|
|
·
|
During
the year ended December 31, 2005, the Company re-purchased 15,000
shares
of Series A Preferred Stock for $750. The shares were
retired.
|
|
·
|
During
the year ended December 31, 2004, the Company issued 200,000 shares
of
Series A Preferred Stock to partially settle an outstanding loan
of
$4,000. The issued shares were recorded at their estimated fair value
of
$64,810, resulting in a debt extinguishment loss of
$60,810.
|
|
·
|
During
the year ended December 31, 2004, the Company issued 95,000 shares
of
Series A Preferred Stock as compensation. The issued shares and related
compensation expense were recorded at the estimated fair value of
the
Series A Preferred Stock of
$30,785.
|
Three
months ended March 31, 2006:
|
86%
and 10% from two customers
|
Three
months ended March 31, 2005:
|
53%,
30% and 14% from three customers
|
Year
ended December 31, 2005:
|
60%,
13% and 10% from three customers
|
Year
ended December 31, 2004:
|
39%,
30%, 17% and 12% from four
customers
|
|
Innova
Historical
|
CoroWare
Historical
|
Adjustments
|
Notes
|
Pro
Forma
|
|||||||||||
Assets
|
|
|
|
|
|
|||||||||||
Cash
|
$
|
30,157
|
$
|
157,674
|
$
|
187,831
|
||||||||||
Accounts
receivable
|
38,217
|
102,155
|
140,372
|
|||||||||||||
Inventory
|
39,072
|
--
|
39,072
|
|||||||||||||
Total
current assets
|
107,446
|
259,829
|
367,275
|
|||||||||||||
Property
|
116,604
|
35,934
|
(3,061
|
)
|
(a)
|
|
149,477
|
|||||||||
Intangible
assets
|
--
|
--
|
623,305
|
(a)
|
|
623,305
|
||||||||||
Other
assets
|
346,285
|
598
|
346,883
|
|||||||||||||
|
$
|
570,335
|
$
|
296,361
|
$
|
1,486,940
|
||||||||||
Liabilities
and Capital
|
||||||||||||||||
Other
current liabilities
|
$
|
3,299,115
|
$
|
310,205
|
100,000
|
(b)
|
|
$
|
3,709,320
|
|||||||
Current
debt maturities
|
67,382
|
--
|
67,382
|
|||||||||||||
Derivative
liabilities
|
31,800
|
--
|
31,800
|
|||||||||||||
Total
current liabilities
|
3,398,297
|
310,205
|
3,808,502
|
|||||||||||||
Long-term
debt
|
921,718
|
--
|
921,718
|
|||||||||||||
Stockholders’
deficit
|
(3,749,680
|
)
|
(13,844
|
)
|
520,244
|
(b)
|
|
(3,243,280
|
)
|
|||||||
|
$
|
570,335
|
$
|
296,361
|
$
|
1,486,940
|
|
(a)
|
These
adjustments represent adjustments to the net tangible assets of CoroWare
acquired had the acquisition occurred on March 31, 2006. The following
table reflects the preliminary allocation of our purchase
price:
|
|
Fair
Values
|
Preliminary
|
|||||
|
Assets/liabilities
|
Allocation
|
Current
assets
|
$
|
259,829
|
$
|
259,829
|
|||
Property
and other assets (i)
|
36,532
|
33,471
|
|||||
Intangible
assets:
|
|||||||
Customer
lists (i)
|
512,300
|
469,380
|
|||||
Employment
contracts (i)
|
168,000
|
153,925
|
|||||
Current
liabilities
|
(310,205
|
)
|
(310,205
|
)
|
|||
Fair
value of consideration
|
$
|
606,400
|
|
(i)
|
For
purposes of this allocation, the fair values of long-lived assets
were
reduced by the excess of the fair value of net assets acquired over
the
fair value of the consideration on a relative fair value
basis.
|
|
(ii)
|
The
allocation is preliminary and subject to change for the final allocation
of the purchase price to the intangible
assets.
|
|
(b)
|
These
adjustments represent the guaranteed purchase price consisting of
(i)
$100,000 in cash, (ii) 5,000,000 shares of common stock with a fair
value
of $180,000 and (iii) stock options valued at $356,400, using the
Black-Scholes-Merton valuation technique. The contingent elements
of the
purchase price are not included in the allocation. The fair value
of the
common stock issued was based in all instances on the average trading
prices for a period before and after the
purchase.
|
|
Innova
Historical
|
CoroWare
Historical
|
Adjustments
|
Notes
|
Pro
Forma
|
|||||||||||
Revenues
|
$
|
136,490
|
$
|
571,833
|
$
|
708,323
|
||||||||||
Operating
costs:
|
||||||||||||||||
Cost
of revenues
|
107,690
|
389,624
|
497,314
|
|||||||||||||
Selling
and administrative
|
942,909
|
209,557
|
14,000
|
(b)
|
|
1,166,466
|
||||||||||
Other
operating costs
|
101,448
|
43,075
|
(22
|
)
|
(c)
|
|
144,501
|
|||||||||
Amortization
|
--
|
--
|
50,203
|
(d)
|
|
50,203
|
||||||||||
|
(1,015,557
|
)
|
(70,423
|
)
|
(1,150,161
|
)
|
||||||||||
|
||||||||||||||||
Other
income (expense)
|
(100,774
|
)
|
(3,387
|
)
|
(104,161
|
)
|
||||||||||
Net
loss
|
($
1,116,331
|
)
|
($
73,810
|
)
|
($1,254,322
|
)
|
||||||||||
|
||||||||||||||||
Net
loss per common share
|
($
0.00
|
)
|
(e)
|
|
($
0.00
|
)
|
||||||||||
Weighted
average shares
|
519,917,518
|
5,000,000
|
(e)
|
|
524,917,518
|
|
(a)
|
The
pro forma statement of operations, above, gives effect to the purchase
of
CoroWare as if it had occurred on January 1, 2006. Had the purchase
occurred on that date, the preliminary allocation of the purchase
price
would have been as follows:
|
|
Fair
Values
|
Preliminary
|
|||||
|
Assets/liabilities
|
Allocation
|
Current
assets
|
$
|
159,188
|
$
|
159,188
|
|||
Property
and other assets (i)
|
25,786
|
25,337
|
|||||
Intangible
assets:
|
|||||||
Customer
lists (i, ii)
|
512,300
|
503,392
|
|||||
Employment
contracts (i, ii)
|
168,000
|
165,079
|
|||||
Current
liabilities
|
(246,596
|
)
|
(246,596
|
)
|
|||
Fair
value of consideration
|
$
|
606,400
|
|
(i)
|
For
purposes of this allocation, the fair values of long-lived assets
were
reduced by the excess of the fair value of net assets acquired over
the
fair value of the consideration on a relative fair value
basis.
|
|
(ii)
|
The
allocation is preliminary and subject to change for the final allocation
of the purchase price to the intangible
assets.
|
|
(b)
|
This
pro forma adjustment represents the incremental increase in contractual
compensation that would be paid to officers of CoroWare, pursuant
to
employment contracts.
|
|
(c)
|
This
pro forma adjustment represents the reduction in depreciation expense
resulting from the adjustment referred to in (a)(i),
above.
|
|
(d)
|
This
pro forma adjustment represents the amortization of the intangible
assets
acquired in the acquisition. Customer lists are subject to three-year
amortization using the straight-line method. Employment contracts
are
subject to five-year amortization using the straight-line method.
Amortization expense for customer lists and employment contracts
amounts
to $41,949 and $8,254, respectively, for the three months ended March
31,
2006.
|
(e)
|
This
pro forma adjustment represents the issuance of common stock in connection
with the purchase of CoroWare. Common stock equivalents are anti-dilutive
and, therefore, excluded.
|
|
Innova
Historical
|
CoroWare
Historical
|
Adjustments
|
Notes
|
Pro
Forma
|
|||||||||||
Revenues
|
$
|
--
|
$
|
1,278,618
|
$
|
1,278,618
|
||||||||||
Operating
costs:
|
||||||||||||||||
Cost
of revenues
|
--
|
1,078,481
|
1,078,481
|
|||||||||||||
Selling
and administrative
|
857,515
|
218,572
|
100,000
|
(b)
|
|
1,176,087
|
||||||||||
Other
operating costs
|
900,758
|
52,202
|
(359
|
)
|
(c)
|
|
952,601
|
|||||||||
Amortization
|
--
|
--
|
182,651
|
(d)
|
|
182,651
|
||||||||||
|
(1,758,273
|
)
|
(
70,637
|
)
|
(2,111,202
|
)
|
||||||||||
|
||||||||||||||||
Other
income (expense)
|
(122,852
|
)
|
9,581
|
(e)
|
|
(113,271
|
)
|
|||||||||
Net
loss
|
$
|
(1,881,125
|
)
|
($
61,056
|
)
|
($2,224,473
|
)
|
|||||||||
|
||||||||||||||||
Net
loss per common share
|
$
|
(0.00
|
)
|
(f)
|
|
$
|
(0.01
|
)
|
||||||||
Weighted
average shares
|
430,119,706
|
5,000,000
|
(f)
|
|
435,119,706
|
|
(a)
|
The
pro forma statement of operations, above, gives effect to the purchase
of
CoroWare as if it had occurred on January 1, 2005. Had the purchase
occurred on that date, the preliminary allocation of the purchase
price
would have been as follows:
|
|
Fair
Values
|
Preliminary
|
|||||
|
Assets/liabilities
|
Allocation
|
Current
assets
|
$
|
99,887
|
$
|
99,887
|
|||
Property
and other assets (i)
|
16,886
|
15,092
|
|||||
Intangible
assets:
|
|||||||
Customer
lists (i,ii)
|
512,300
|
457,862
|
|||||
Employment
contracts (i,ii)
|
168,000
|
150,148
|
|||||
Current
liabilities
|
(116,589
|
)
|
(116,589
|
)
|
|||
Fair
value of consideration
|
$
|
606,400
|
|
(i)
|
For
purposes of this allocation, the fair values of long-lived assets
were
reduced by the excess of the fair value of net assets acquired over
the
fair value of the consideration on a relative fair value
basis.
|
|
(ii)
|
The
allocation is preliminary and subject to change for the final allocation
of the purchase price to the intangible
assets.
|
|
(b)
|
This
pro forma adjustment represents the incremental increase in contractual
compensation that would be paid to officers of CoroWare, pursuant
to
employment contracts.
|
|
(c)
|
This
pro forma adjustment represents the reduction in depreciation expense
resulting from the adjustment referred to in (a)(i),
above.
|
|
(d)
|
This
pro forma adjustment represents the amortization of the intangible
assets
acquired in the acquisition. Customer lists are subject to three-year
amortization using the straight-line method. Employment contracts
are
subject to five-year amortization using the straight-line method.
Amortization expense for customer lists and employment contracts
amounts
to $152,621 and $30,030, respectively, for the three months ended
March
31, 2006.
|
(e)
|
This
pro forma adjustment represents the elimination of CoroWare’s provision
for income taxes.
|
|
(f)
|
This
pro forma adjustment represents the issuance of common stock in connection
with the purchase of CoroWare. Common stock equivalents were anti-dilutive
and, therefore, excluded.
|
Securities
and Exchange Commission Registration Fee
|
$
|
192.60
|
||
Accounting
Fees and Expenses
|
$
|
15,000*
|
||
Legal
Fees and Expenses
|
$
|
35,000*
|
||
Total
|
$
|
50,192.60
|
Alan
B. & Patricial A. Canfield
|
20,000
|
Charles
Burton Adams
|
25,000
|
Daniel
McNeill
|
5,000
|
David
C. Yerger
|
4,000
|
David
W. Vaughn
|
3,000
|
Etta
Lou Jess
|
3,000
|
Eugene
V. Gartlan
|
25,166
|
Fielding
Thomas Da Meron
|
10,000
|
James
& Rebecca Marks, JTICWROS
|
25,000
|
Jeffrey
Bertoia
|
5,000
|
Jem
Wynns
|
3,500
|
Jennifer
V. Yerger
|
1,000
|
Johana
Lisik
|
49,834
|
John
& Cindy Lisik
|
4,500
|
John
& Mary Ranalli
|
2,000
|
Jon
& Steven Joos
|
10,000
|
Ken
Kareta
|
10,000
|
Larry
& Kelly Wynns
|
15,000
|
Mark
& Tommye Humphries
|
5,000
|
Melvin
Ketchel
|
10,000
|
Neal
& Mary Bennett
|
5,000
|
Paul
& Kathryn Ireson
|
13,000
|
Reynaert
Management Group
|
25,000
|
Richard
& Johanna Wynns JTWROS
|
112,500
|
Richard
D. Jess
|
20,000
|
Richard
J. Bertoia
|
5,000
|
Richie
& Amanda Wynns
|
1,000
|
Robert
& Barbara Ihrig
|
42,000
|
Robert
& Muriel Sandbo
|
10,000
|
Robert
D. & Elizabeth Jess
|
10,000
|
Robert
Lewis
|
11,000
|
Scott
& Julianna Puras
|
12,500
|
Sharon
Lightner
|
2,000
|
Stephen
A. Puras
|
3,000
|
Steven
Ranalli
|
2,000
|
Timothy
& Regina Powers
|
5,000
|
Helmuth
Twietmeyer
|
10,000
|
Total
Shares
|
525,000
|
12,266,667
|
|
Harold
C. Claypool
|
2,000,000
|
Michael
Etchison
|
4,000,000
|
Kenneth
Martin
|
1,000,000
|
Total
Private placement
|
19,266,667
|
666,667
|
|
Richard
K. Wynns
|
1,000,000
|
Eugene
V. Gartlan(1)
|
1,666,667
|
James
Snyder
|
1,666,667
|
Scott
Cray
|
1,666,667
|
Exhibit | Description |
2.1
|
Exchange
Agreement (1)
|
|
|
2.2
|
Agreement
and Plan of Merger dated as of April 29, 2003 between The Company
and
Sanjay Haryama (4)
|
|
|
2.3
|
Certificate
of Merger between The Company and Sanjay Haryama as filed with the
Delaware Secretary of State on April 29, 2003. (4)
|
|
|
2.4
|
Agreement
and Plan of Merger among the Company, RWT Acquisition, Inc and Robotic
Workspace Technologies, Inc. dated July 21, 2004. (5)
|
|
|
2.5
|
Agreement
between the Company and Encompass Group Affiliates, Inc. dated June
23,
2004. (5)
|
|
|
2.6
|
Agreement
between the Company and Aegis Finance, Inc. dated August 18, 2004
(13)
|
|
|
3.1
|
Articles
of Incorporation (2)
|
|
|
3.2
|
Bylaws
(2)
|
5.1
|
Opinion
of Sichenzia Ross Friedman Ference LLP*
|
10.3
|
Convertible
Debenture Purchase Agreement dated as of April 21, 2003 between Sanjay
Haryama and HEM Mutual Assurance LLC. (4)
|
|
|
10.4
|
Convertible
Debenture Purchase Agreement dated as of April 28, 2003 between The
Company and HEM Mutual Assurance Fund Limited. (4)
|
|
|
10.5
|
Option
Purchase Agreement between the Company and SunTrust Bank
(4)
|
|
|
10.6
|
License
Agreement between the Company and Encompass Group Affiliates, Inc.
dated
June 23, 2004 for customer list (5)
|
|
|
10.7
|
License
Agreement between the Company and Encompass Group Affiliates, Inc.
dated
June 23, 2004 for website (5)
|
|
|
10.8
|
Assumption
Agreement between the Company and Encompass Group Affiliates, Inc.
dated
June 23, 2004 (5)
|
10.9
|
Noncompetition
and Nondisclosure Agreement between the Company and Encompass Group
Affiliates, Inc. dated June 23, 2004 (5)
|
|
|
10.1
|
Employment
Agreement of Sheri Aws dated February 24, 2004 (7)
|
|
|
10.11
|
Renewal
Promissory Note payable to Fifth Third Bank, Florida for $225,000
effective July 22, 2003 (8)
|
|
|
10.12
|
Security
Agreement in favor of Fifth Third Bank, Florida effective July 22,
2003
(8)
|
|
|
10.13
|
Consulting
Agreements with Stratex Solutions, LLC (9)
|
|
|
10.14
|
Business
Development Agreement with B. Smith Holdings, Inc (9)
|
|
|
10.15
|
Employment
Agreement with Walter K. Weisel dated July 19, 2000 (9)
|
|
|
10.16
|
Standby
Equity Distribution Agreement with Cornell Capital Partners, LP dated
June
14, 2005 (10)
|
|
|
10.17
|
Registration
Rights Agreement with Cornell Capital Partners, LP dated June 14,
2005
(10)
|
|
|
10.18
|
Escrow
Agreement with Cornell Capital Partners, LP and David Gonzalez, Esq.
dated
June 14, 2005 (10)
|
|
|
10.19
|
Promissory
Note for $300,000 issued to Cornell Capital Partners, LP dated June
14,
2005 (10)
|
|
|
10.20
|
Placement
Agent Agreement with Monitor Capital Inc. dated June 14, 2005
(10)
|
10.21
|
Securities
Purchase Agreement with Cornell Capital Partners, LP dated October
7, 2005
(11)
|
|
|
10.22
|
Registration
Rights with Cornell Capital Partners, LP dated October 7, 2005
(11)
|
|
|
10.23
|
Convertible
Debenture issued to Cornell Capital Partners, LP dated October 7,
2005
(11)
|
|
|
10.24
|
Security
Agreement with Cornell Capital Partners, LP dated October 7, 2005
(11)
|
|
|
10.25
|
Escrow
Agreement with David Gonzalez and Cornell Capital Partners, LP dated
October 7, 2005 (11)
|
|
|
10.26
|
Employment
Agreement dated June 30, 2005 between Eugene Gartlan and Innova Holdings,
Inc. (12)
|
|
|
10.27
|
Termination
of Consulting Agreement dated June 30, 2005 between Stratex Solutions,
LLC
and Innova Holdings, Inc. (12)
|
|
|
10.28
|
Stock
Option Plan adopted on April 12, 2005 and amended on April 12, 2006
(14)
|
|
|
10.29
|
Amended
and Restated Stock Option Plan amended on July 24, 2006
(15)
|
10.30
|
Convertible
Debenture dated July 21, 2006 (16)
|
10.31
|
Form
of $0.05 Warrant (16)
|
10.32
|
Form
of $0.10 Warrant (16)
|
10.33
|
Form
of $0.025 Warrant (16)
|
10.34
|
Form
of $0.065 Warrant (16)
|
10.35
|
Form
of $0.075 Warrant (16)
|
10.36
|
Securities
Purchase Agreement dated July 21, 2006 between the Company and Cornell
(16)
|
10.37
|
Investor
Registration Rights Agreement dated July 21, 2006 between the Company
and
Cornell (16)
|
10.38
|
Security
Agreement dated July 21, 2006 by and between the Company and Cornell
(16)
|
10.39
|
Subsidiary
Security Agreement dated July 21, 2006 by and between Coroware
Technologies, Inc. and Cornell (16)
|
10.40
|
Strategic
Alliance Agreement dated June 16, 2006, by and between Innova Holdings,
Inc. and Mesa Robotics, Inc. (17)
|
10.41
|
Asset
Purchase Agreement by and among Innova Holdings, Inc., Coroware
Technologies Inc. and Coroware, Inc. dated May 12, 2006.
(18)
|
10.42
|
Form
of Executive Employment Agreement. (18)
|
10.43
|
Memorandum
of Understanding dated April 26, 2006, by and between Innova Holdings,
Inc. and Mesa Robotics, Inc. (19)
|
14.1
|
Code
of Ethics (9)
|
|
|
23.1
|
Consent
of Sichenzia Ross Friedman Ference LLP (included in Exhibit
5.1)*
|
23.2
|
Consent
of LBB & Associates Ltd., LLP (formerly Lopez, Blevins, Bork &
Associates, LLP)*
|
23.3
|
Consent
of LBB & Associates Ltd., LLP*
|
INNOVA
HOLDINGS, INC.
|
|
By:
/s/ Walter K. Weisel
|
|
Walter
K. Weisel
|
|
Chief
Executive Officer (Principal Executive Officer)
|
|
By:
/s/ Eugene V. Gartlan
|
|
Eugene
V. Gartlan
|
|
Chief
Financial Officer (Principal Financial and Accounting
Officer)
|
Signature
|
Title
|
Date
|
/s/
Walter K.
Weisel
Walter
K. Weisel
|
Chief
Executive Officer (Principal Executive Officer) and Chairman of the
Board
|
August
21, 2006
|
/s/
Eugene V.
Gartlan
Eugene
V. Gartlan
|
Chief
Financial Officer (Principal Financial and Accounting Officer)
|
August
21, 2006
|
/s/
Martin
Nielson
Martin
Nielson
|
Director
|
August
21, 2006
|
/s/
Gary F.
McNear
Gary
F. McNear
|
Director
|
August
21, 2006
|
/s/
Craig W.
Conklin
Craig
W. Conklin
|
Director
|
August
21, 2006
|
/s/
Rick
Wynns
Rick
Wynns
|
Director
|
August
21, 2006
|