Delaware
|
|
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98-0204758
|
(State
or other jurisdiction of
incorporation
or organization)
|
|
|
(I.R.S.
Employer Identification Number)
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Page
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|
Where You Can Find More Information |
1
|
ospectus Summary |
3
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Risk Factors |
6
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Use of Proceeds |
12
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Price Range of Common Stock |
13
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Dividend Policy |
13
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
14
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Business
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27
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Management
|
34
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Executive Compensation |
37
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Certain Relationships and Related Transactions |
41
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Principal Stockholders |
42
|
Description of Securities |
44
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Selling Stockholders |
46
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Plan of Distribution |
52
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Disclosure of Commission Position on Indemnification for Securities Act Liabilities |
54
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Legal
Matters
|
54
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Experts
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54
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· |
Our
annual report on Form 10-KSB, as amended, for the fiscal year ended
April
30, 2005;
|
· |
Our
quarterly reports on Form 10-QSB, as amended, for the quarters
ended July
31 and October 31, 2005 and January 31, 2006; and
|
· |
Our
current reports on Form 8-K filed on September 14, 2005, December
15,
2005, March 17, 2006, and March 22, 2006.
|
•
|
Our
success is dependent on growth in the deployment of wireless networks,
and
to the extent that such growth slows down, our revenues may decrease
and
our ability to continue operating profitably may be
harmed;
|
•
|
We
have a limited history of profitability which may not
continue;
|
•
|
If
we fail to accurately estimate costs associated with our fixed-price
contracts using percentage-of-completion, our actual results may
vary from
our assumptions, which may reduce our profitability or impair our
financial performance;
|
•
|
Failure
to properly manage projects may result in unanticipated costs or
claims;
|
•
|
The
industry in which we operate has relatively low barriers to entry
and
increased competition could result in margin erosion, which would
make
profitability even more difficult to
sustain;
|
•
|
Our
business depends upon our ability to keep pace with the latest
technological changes, the failure to which could make us less
competitive
in our industry;
|
•
|
Our
failure to attract and retain engineering personnel or maintain
appropriate staffing levels could adversely affect our
business;
|
•
|
If
we are unable to identify and complete future acquisitions, we
may be
unable to continue our growth;
|
•
|
Future
acquired companies could be difficult to assimilate, disrupt our
business,
diminish stockholder value and adversely affect our operating
results;
|
•
|
We
derive a significant portion of our revenues from a limited number
of
customers, the loss of which would significantly reduce our revenues;
and
|
•
|
Amounts
included in our backlog may not result in actual revenue or translate
into
profits.
|
Common stock offered by us........................................................................................................... |
Up
to 4,229,176 shares, including the following:
|
2,083,338 shares of common stock; and | |
up
to 2,083,338 shares of common stock issuable upon the exercise
of common
stock purchase warrants at an exercise price of $8.40 per share,
and up to
62,500 issuable upon the exercise of common stock purchase warrants
at an
exercise price of $4.80 per share.
|
|
Shares outstanding prior to the offering (1)................................................................................... | 4,386,853 shares as of March 31, 2006 |
Shares to be outstanding after the offering (2).............................................................................. | 5,979,639 shares |
Use
of proceeds
................................................................................................................................
|
We may receive proceeds from the sale of our common stock issued upon conversion |
outstanding
warrants. We expect to use the proceeds received from the exercise
of the
warrants, if any, for general working capital purposes or for future
acquisitions. See “Use of Proceeds” for a complete
description.
|
|
NASDAQ Capital Market symbol .................................................................................................. | WPCS. |
•
|
the
timing and size of network deployments and technology upgrades
by our
customers;
|
•
|
fluctuations
in demand for outsourced network
services;
|
•
|
the
ability of certain customers to sustain capital resources to pay
their
trade accounts receivable balances and required changes to our
allowance
for doubtful accounts based on periodic assessments of the collectibility
of our accounts receivable
balances;
|
•
|
reductions
in the prices of services offered by our
competitors;
|
•
|
our
success in bidding on and winning new business;
|
•
|
our
sales, marketing and administrative cost structure;
and
|
•
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effects
of variable accounting for warrant
liability.
|
•
|
quarterly
variations in operating results;
|
•
|
announcements
of new services by us or our
competitors;
|
•
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the
gain or loss of significant
customers;
|
•
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changes
in analysts’ earnings estimates;
|
•
|
rumors
or dissemination of false
information;
|
•
|
pricing
pressures;
|
•
|
short
selling of our common stock;
|
•
|
impact
of litigation;
|
•
|
general
conditions in the market;
|
•
|
changing
the exchange or quotation system on which we list our common stock
for
trading;
|
•
|
political
and/or military events associated with current worldwide conflicts;
and
|
•
|
events
affecting other companies that investors deem comparable to
us.
|
Period |
High
|
Low
|
|||||
Fiscal
Year Ended April 30, 2004:
|
|||||||
First
Quarter
|
$ | 22.56 |
$
|
4.68
|
|||
Second
Quarter
|
20.76 | 12.24 | |||||
Third
Quarter
|
20.40 | 10.92 | |||||
Fourth
Quarter
|
17.28 | 10.80 | |||||
Fiscal
Year Ended April 30, 2005:
|
|||||||
First
Quarter
|
$ | 14.88 | $ | 7.80 | |||
Second
Quarter
|
11.28 | 5.76 | |||||
Third
Quarter
|
8.28 |
4.32
|
|||||
Fourth
Quarter
|
7.80 |
4.50
|
|||||
Fiscal
Year Ending April 30, 2006:
|
|||||||
First
Quarter
|
$ | 9.18 | $ | 4.32 | |||
Second
Quarter
|
9.03 |
5.58
|
|||||
Third
Quarter
|
12.78 |
6.12
|
|||||
Fourth
Quarter, through March 31, 2006
|
12.50 | 7.25 |
•
|
discuss
our future expectations;
|
•
|
contain
projections of our future results of operations or of our financial
condition; and
|
•
|
state
other “forward-looking”
information.
|
·
|
two-way
radio communication systems, which are
used primarily for emergency
dispatching;
|
·
|
Wi-Fi networks, which are wireless local area networks that operate on a set of product compatibility standards; |
·
|
WiMAX networks, which are networks that can operate at higher speeds and over greater distances than Wi-Fi; |
•
|
mesh networks, which are redundant systems to route information between points; |
·
|
millimeter wave networks, which are high capacity networks for high speed wireless access; |
·
|
fixed wireless networks, which are used in point-to-point outdoor communications; |
·
|
Radio Frequency Identification, or RFID, networks, which allow customers to identify and track assets; |
·
|
free-space optics, which is a wireless communication technology that uses light to transmit voice, data and video; and |
·
|
commercial cellular systems, which are used primarily for mobile communications. |
· |
For
the nine months ended January 31, 2006, the specialty communication
systems segment represented approximately 84% of total revenue, and the
wireless infrastructure services segment represented approximately
16% of
total revenue, as compared to approximately 77% and 23%, respectively,
for
the nine months ended January 31, 2005. This shift in revenue
composition
towards the specialty communication systems segment was primarily a
result of our acquisition of Quality in the third fiscal quarter
of
2005.
|
· |
As
we continue to search for acquisitions, our primary goal is
to identify
companies which are performing well financially and are compatible
with
the services that we perform in the specialty communication
systems
segment. This trend could lead to a further shift in our revenue
composition towards the specialty communication systems segment.
We
believe that the strength of our experience in the design and
deployment of specialty communication systems gives us a competitive
advantage.
|
· |
We
also seek to achieve organic growth in our existing business
by maximizing
the value of our existing customer base, maintaining and
expanding our
focus in vertical markets and developing our relationships
with technology
providers.
|
· |
We
believe that the emergence of new and improved technologies
such as WiMAX
will create additional opportunities for us to design and deploy
solutions
through the use of the latest technologies and assisting existing
customers in enhancing the efficiency of their existing wireless
networks
using new technologies.
|
· |
We
believe that the wireless carriers will continue to make expenditures
to
build and upgrade their networks, increase existing capacity,
upgrade
their networks with new technologies and maintain their existing
infrastructure. In response to this trend, we will continue
to provide
network deployment services that address wireless carrier
needs.
|
· |
In
connection with sales of our common stock and warrants to certain
investors during the third fiscal quarter ended January 31,
2005, we
granted certain registration rights that provide for liquidated
damages in
the event of failure to timely perform under the agreements.
The SEC
concluded that under EITF 00-19, common stock and warrants
subject to
registration rights where significant liquidated damages could
be required
to be paid to the holder of the instrument in the event the
issuer fails
to maintain the effectiveness of a registration statement for
a preset
time period, the common stock subject to such liquidated damages
does not
meet the tests required for shareholders' equity classification, and
accordingly must be reflected as temporary equity in the
balance sheet until the conditions are eliminated. Additionally,
the fair
value of warrants should be recorded as a liability, with an
offsetting
reduction to shareholders’ equity, adjusted to market value at the end of
each period. In analyzing instruments under EITF 00-19, the
likelihood or
probability related to the failure to maintain an effective
registration
statement is not a factor.
|
|
|||||||||||||
Year
Ended April 30,
|
|||||||||||||
2005 | 2004 | ||||||||||||
Revenue
|
$
|
40,148,233
|
100.0
|
%
|
$
|
22,076,246
|
100.0
|
%
|
|||||
|
|||||||||||||
Costs
and expenses:
|
|||||||||||||
Cost
of revenue
|
32,445,470
|
80.8
|
%
|
17,286,099
|
78.3
|
%
|
|||||||
Selling,
general and administrative expenses
|
7,028,850
|
17.5
|
%
|
4,441,776
|
20.1
|
%
|
|||||||
Depreciation
and amortization
|
682,397
|
1.7
|
%
|
382,510
|
1.7
|
%
|
|||||||
|
|||||||||||||
Total
costs and expenses
|
40,156,717
|
100.0
|
%
|
22,110,385
|
100.1
|
%
|
|||||||
|
|||||||||||||
Operating
loss
|
(8,484
|
)
|
0.0
|
%
|
(34,139
|
)
|
(0.1
|
%)
|
|||||
Other
(income) expense:
|
|||||||||||||
Interest
expense
|
24,702
|
0.1
|
%
|
14,048
|
0.1
|
%
|
|||||||
Gain
on fair value of warrants
|
(1,414,263 | ) | (3.5 | %) | - | 0.0 | % | ||||||
Income (loss) before income tax provision | 1,381,077 | 3.4 | % | (48,187 | ) |
(0.2
|
%) | ||||||
Income
tax provision
|
52,096 |
0.1
|
%
|
76,000
|
0.4
|
% | |||||||
|
|||||||||||||
Net
Income (loss)
|
$
|
1,328,981
|
|
3.3
|
%
|
$
|
(124,187
|
)
|
(0.6
|
%)
|
|
Nine
Months Ended
|
|
|||||||||||
|
|
January
31,
|
|
||||||||||
|
|
2006
|
|
2005
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||
REVENUE
|
|
$
|
38,243,071
|
|
|
100.0
|
%
|
$
|
29,015,396
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS
AND EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of revenue
|
|
|
27,726,737
|
|
|
72.5
|
%
|
|
23,437,998
|
|
|
80.8
|
%
|
Selling,
general and administrative expenses
|
|
|
6,820,446
|
|
|
17.8
|
%
|
|
4,756,278
|
|
|
16.4
|
%
|
Depreciation
and amortization
|
|
|
633,394
|
|
|
1.7
|
%
|
|
430,438
|
|
|
1.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
costs and expenses
|
|
|
35,180,577
|
|
|
92.0
|
%
|
|
28,624,714
|
|
|
98.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
|
|
3,062,494
|
|
|
8.0
|
%
|
|
390,682
|
|
|
1.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
EXPENSE:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
142,196
|
|
|
0.4
|
%
|
|
18,625
|
|
|
0.0
|
%
|
Loss
on fair value of warrants
|
|
|
11,406,414
|
|
|
29.8
|
%
|
|
840,499
|
|
|
2.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS
BEFORE INCOME TAX PROVISION
|
|
|
(8,486,116
|
)
|
|
(22.2
|
%)
|
|
(468,442
|
)
|
|
(1.6
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax provision
|
|
|
1,153,773
|
|
|
3.0
|
%
|
|
161,736
|
|
|
0.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS
|
|
$
|
(9,639,889
|
)
|
|
(25.2
|
%)
|
$
|
(630,178
|
)
|
|
(2.2
|
%)
|
•
|
Mobility.
Mobile
communications and computing are among the driving forces behind
the
demand for wireless connectivity. The increased functionality and
declining cost of mobile wireless devices has fueled further growth.
Mobile connectivity has led to greater productivity as organizations
transmit data and gather information from remote staff and locations
where
land line connectivity is unavailable. Such mobile connectivity
has
created significant cost savings in data collection, increased
responsiveness, enabled greater access to enterprise resources,
and
improved controls.
|
•
|
Capacity.
Current
technology allows wireless transmission with capacity, quality
and
reliability superior to land line and comparable to fiber. For
example,
current radio technology is capable of two-way data transfer at
rates up
to 1 gigabits per second, allowing wireless networks to transmit
content
as quickly as over fiber.
|
•
|
Cost.
Wireless
networks cost less than comparable land line networks both to deploy
and
to operate. Wireless deployment is less expensive because the installation
of a land line network is more labor-intensive, requires more time
and may
involve substantial right-of-way expenditures, while we expect
the main
cost component of wireless networks - equipment - to continue to
decline
as technology advances and production volumes increase. Operating
costs of
wireless networks are also lower because land lines require extensive
troubleshooting to execute repairs. In addition, wireless networks
bypass
local service providers, eliminating recurring monthly
charges.
|
•
|
Deployment.
Because
enterprise wireless networks do not require negotiating rights
of way,
substantial infrastructure engineering, time-consuming third party
coordination efforts or additional FCC licensing, they can be deployed
quickly and less expensively. Rapid deployment allows organizations
to
install networks more closely in line with immediate needs rather
than
having to commit to time-consuming engineering projects in anticipation
of
future growth.
|
•
|
increased
security of wireless data
transmission;
|
•
|
introduction
of new technologies such as Wi-Fi, WiMAX and
RFID;
|
•
|
increasing
accessibility and affordability of Web-enabled devices;
and
|
•
|
increased
capacity of wireless networks, making them a legitimate substitute
for
land line communications.
|
•
|
Market
additional services to our customers. Each
acquisition we make expands our customer base. We seek to expand
these new
customer relationships by making them aware of the diverse products
and
services we offer. We believe that providing these customers the
full
range of our services will lead to new projects or revenue opportunities
and increased profitability.
|
•
|
Maintain
and expand our focus in vertical markets. We
have deployed successful, innovative wireless solutions for multiple
customers in a number of vertical markets, such as public safety
and the
gaming industry. We will continue to seek additional customers
in these
targeted vertical markets who can benefit from our expertise, and
look for
new ways in which we can design wireless solutions to enhance productivity
within these markets. We also look for new vertical markets where
we can
make a difference with compelling wireless solutions, and will
continue to
expand our vertical market coverage to include these new markets
as
appropriate.
|
•
|
Strengthen
our relationships with technology providers. We
will continue to strengthen the relationships we have with technology
providers such as Avaya and Motorola. These companies rely on us
to deploy
their technology products within their customer base. We have worked
with
these providers in testing new equipment they develop, and our
personnel
maintain certifications on our technology providers’ products. We also
look for innovative products which can be of benefit to our customers,
and
endeavor to establish similar relationships with new technology
providers
as part of our commitment to offering the most complete solutions
to our
customers.
|
•
|
Seek
strategic acquisitions. We
will continue to look for additional acquisitions of compatible
businesses
that can be assimilated into our organization and add accretive
earnings
to our business. Our preferred acquisition candidates will have
experience
with specialty communication systems, engineering capacity in a
design-build format, an expansive customer base, and a favorable
financial
profile.
|
•
|
asset
tracking, which is a wireless network that monitors the location
of mobile
assets such as vehicles or stationary assets such as
equipment;
|
•
|
telematics,
which are instructions sent through a wireless network that controls
a
device such as a slot machine or traffic signal;
and
|
•
|
telemetry,
which is the acquisition of data from a measuring device such as
the
devices used at a water treatment plant to maintain the integrity
of
drinking water.
|
•
|
Installation,
testing and commissioning of base station equipment, which is the
installation of radio frequency equipment inside the shelter at
a cell
site, and testing to ensure that the equipment is operating prior
to cell
site activation;
|
•
|
Equipment
modification and reconfiguration, which involves replacing old
equipment
with new equipment, re-routing cables, and re-locating equipment
at the
cell site;
|
•
|
Network
modifications, which refers to work done on existing cell sites
to
increase capacity or change the direction of sectors or
antennas;
|
•
|
Sectorization,
which is the installation of antennas to existing cell towers to
increase
the capacity of the cell site; and
|
•
|
Maintenance,
which includes antenna maintenance to replace damaged antennas,
installing
tower lighting control panels, sensors or repairing damaged
shelters.
|
•
|
a
wireless network for the asset tracking of ambulances in order
to improve
medical dispatch services for
patients;
|
•
|
the
deployment of laptop computers in ambulances for the transmission
of
patient information to the hospital while in transit;
and
|
•
|
a
wireless network that allows medical staff to access consolidated
patient
medical records throughout the hospital via mobile wireless devices,
improving the accuracy of patient
care.
|
Location |
Expiration
Date
|
Minimum
Lease Annual
Rent
|
|||||
Auburn, California (1) |
month-to-month
|
$
|
64,440
|
||||
Exton, Pennsylvania |
February
1, 2008
|
$
|
48,725
|
||||
Fairfield, California (2) |
February
28, 2011
|
$ | 94,125 | ||||
Lakewood, New Jersey |
August
31, 2007
|
$
|
90,370
|
||||
Rocklin, California |
January
31, 2008
|
$
|
27,000
|
||||
San Leandro, California |
July
31, 2006
|
$ | 13,756 | ||||
St. Louis, Missouri |
August
31, 2008
|
$
|
56,142
|
||||
Name
|
Age
|
Position | ||
Andrew Hidalgo |
49
|
Chairman, Chief Executive Officer and Director | ||
Joseph Heater |
42
|
Chief Financial Officer | ||
Donald Walker |
43
|
Executive Vice President | ||
James Heinz |
46
|
Executive Vice President | ||
Richard Schubiger |
40
|
Executive Vice President | ||
Norm Dumbroff |
45
|
Director | ||
Neil Hebenton |
50
|
Director | ||
Gary Walker |
51
|
Director | ||
William Whitehead |
50
|
Director |
Summary
Compensation Table
|
|
||||||||||||||||||||||||
|
|
Long-Term
Compensation
|
|
|
|
||||||||||||||||||||
|
|
Annual
Compensation
|
|
Awards
|
|
Payouts
|
|
|
|
||||||||||||||||
Name
and Principal Position
|
|
Fiscal
Year
|
|
Annual
Salary
($)
|
|
Annual
Bonus
($)
|
|
Other
Annual
Compensation
($)
|
|
Restricted
Stock Awards
($)
|
|
Securities
Underlying
Options/SARs
(#)
(5)
|
|
LTIP
Payouts
($)
|
|
All
Other
Compensation
($)
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Andrew
Hidalgo,
|
|
|
2005
|
|
|
168,000
|
|
|
—
|
|
|
9,549
|
(6)
|
|
—
|
|
|
154,167
|
|
|
—
|
|
|
—
|
|
Chairman,
CEO and
|
|
|
2004
|
|
|
155,250
|
|
|
17,000
|
|
|
7,958
|
(6)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Director
|
|
|
2003
|
|
|
142,327
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Donald
Walker,
|
|
|
2005
|
|
|
140,000
|
|
|
19,069
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Executive
Vice President (1)
|
|
|
2004
|
|
|
141,487
|
|
|
26,963
|
|
|
—
|
|
|
—
|
|
|
16,667
|
|
|
—
|
|
|
—
|
|
|
|
|
2003
|
|
|
41,160
|
|
|
2,669
|
|
|
—
|
|
|
—
|
|
|
---
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary
Walker,
|
|
|
2005
|
|
|
140,000
|
|
|
19,069
|
|
|
—
|
|
|
—
|
|
|
2,084
|
|
|
—
|
|
|
—
|
|
President-Walker
Comm
|
|
|
2004
|
|
|
143,712
|
|
|
26,963
|
|
|
—
|
|
|
—
|
|
|
16,667
|
|
|
—
|
|
|
—
|
|
and
Director (2)
|
|
|
2003
|
|
|
42,333
|
|
|
2,669
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James
Heinz,
|
|
|
2005
|
|
|
140,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,000
|
|
|
—
|
|
|
—
|
|
Executive
Vice President (3)
|
|
|
2004
|
|
|
10,231
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
2003
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph
Heater,
|
|
|
2005
|
|
|
132,000
|
|
|
---
|
|
|
—
|
|
|
—
|
|
|
35,000
|
|
|
—
|
|
|
—
|
|
Chief
Financial Officer (4)
|
|
|
2004
|
|
|
97,654
|
|
|
8,000
|
|
|
—
|
|
|
—
|
|
|
33,334
|
|
|
—
|
|
|
—
|
|
|
|
|
2003
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Name
|
|
|
No.
of Securities Underlying Options Granted (#)
|
|
|
%
of Total Options Granted to Employees in Fiscal
Year
|
|
|
Exercise
Price ($/Share)
|
|
|
Expiration
Date
|
|
Andrew
Hidalgo
|
|
|
154,167
|
|
|
57.8
|
%
|
|
6.60
|
|
|
10/6/2009
|
|
Gary
Walker
|
|
|
2,084
|
|
|
0.8
|
%
|
|
4.80
|
|
|
12/20/2009
|
|
James
Heinz
|
|
|
10,000
|
|
|
3.8
|
%
|
|
5.25
|
|
|
2/1/2010
|
|
Joseph
Heater
|
|
|
25,000
|
|
|
9.4
|
%
|
|
6.60
|
|
|
10/6/2009
|
|
Joseph
Heater
|
|
|
10,000
|
|
|
3.8
|
%
|
|
5.25
|
|
|
2/1/2010
|
|
|
|
|
|
|
Number
of Securities Underlying Unexercised Options at Fiscal Year-End
(#)
|
|
Value
of Unexercised In-the-Money Options at Fiscal Year-End ($)
(1)
|
|||||
Name
|
|
Shares
Acquired on Exercise (#)
|
|
Value
Realized
|
|
Exercisable
|
|
Unexercisable
|
|
Exercisable
|
|
Unexercisable
|
Andrew
Hidalgo
|
|
—
|
|
—
|
|
154,167
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary
Walker
|
|
—
|
|
—
|
|
2,084
|
|
—
|
|
$
313
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James
Heinz
|
|
—
|
|
—
|
|
10,000
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph
Heater
|
|
—
|
|
—
|
|
25,000
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph
Heater
|
|
—
|
|
—
|
|
10,000
|
|
—
|
|
—
|
|
—
|
•
|
by
each person who is known by us to beneficially own more than 5% of
our
common stock;
|
•
|
by
each of our officers and directors;
and
|
•
|
by
all of our officers and directors as a
group.
|
|
|
|
Percentage
of Class
|
|
Percentage
of Class
|
|
Name And
Address Of Beneficial Owner (1)
|
|
Number
of Shares Owned
(2)
|
|
Prior
to Offering (3)
|
|
After
Offering (4)
|
Andrew
Hidalgo
|
|
485,074
(5)
|
|
10.39%
|
|
7.75%
|
|
|
|
|
|
|
|
Joseph
Heater
|
|
131,679
(5)
|
|
2.91%
|
|
2.15%
|
|
|
|
|
|
|
|
Donald
Walker
|
|
16,667
(5)
|
|
*
|
|
*
|
|
|
|
|
|
|
|
James
Heinz
|
|
69,524
(5)
|
|
1.58%
|
|
1.16%
|
|
|
|
|
|
|
|
Richard
Schubiger
|
|
10,000
(5)
|
|
*
|
|
*
|
|
|
|
|
|
|
|
Norm
Dumbroff
|
|
92,738
(5)
|
|
2.10%
|
|
1.55%
|
|
|
|
|
|
|
|
Neil
Hebenton
|
|
23,988
(5)
|
|
*
|
|
*
|
|
|
|
|
|
|
|
Gary
Walker
|
|
114,051
(5)
|
|
2.58%
|
|
1.90%
|
|
|
|
|
|
|
|
William
Whitehead
|
|
30,155
(5)
|
|
*
|
|
*
|
|
|
|
|
|
|
|
All
Officers and Directors as a Group
(9
persons)
|
|
973,876
(5)
|
|
19.69%
|
|
14.89%
|
|
|
|
|
|
|
|
Special
Situations Private Equity Fund, L.P.
|
|
820,845(6)
|
|
16.73%
|
|
12.63%
|
153 E. 53rd Street, 55th Floor | ||||||
New
York, NY 10022
|
||||||
|
|
|
|
|
|
|
Special
Situations Fund III QP, L.P.
|
|
1,065,586(6)
|
|
21.07%
|
|
16.02%
|
153 E. 53rd Street, 55th Floor | ||||||
New
York, NY 10022
|
(1)
|
The
address for each of our officers and directors is One East Uwchlan
Avenue,
Exton, PA 19341.
|
(2)
|
Beneficial
ownership is determined in accordance with the rules of the Securities
and
Exchange Commission and generally includes voting or investment power
with
respect to securities. Shares of common stock subject to options
or
warrants currently exercisable or convertible, or exercisable or
convertible within 60 days of March 31, 2006 are deemed outstanding
for
computing the percentage of the person holding such option or warrant
but
are not deemed outstanding for computing the percentage of any other
person.
|
(3)
|
Percentage
based on 4,386,853 shares of common stock issued and outstanding
on March
31, 2006.
|
(4)
|
Percentage
based on 5,979,639 shares of common stock outstanding, assuming exercise
of all warrants.
|
(5)
|
Includes
the following number of shares of common stock which may be acquired
by
certain officers and directors through the exercise of stock options
which
were exercisable as of March 31, 2006 or become exercisable within
60 days
of that date: Andrew Hidalgo, 280,857 shares; Joseph Heater, 131,679
shares; Donald Walker, 16,667 shares; James Heinz, 10,000 shares;
Richard
Schubiger, 10,000 shares; Norm Dumbroff, 21,904 shares; Neil Hebenton,
23,988; Gary Walker, 36,487 shares; William Whitehead, 28,155 shares;
and
all officers and directors as a group, 559,737 shares.
|
(6)
|
Includes
the following number of shares of common stock which may be acquired
through the exercise of common stock purchase warrants which were
exercisable as of March 31, 2006 or become exercisable within 60
days of
that date: Special Situations Private Equity Fund, L.P., 520,831
shares
and Special Situations Fund III QP, L.P., 670,402 shares. Information
based upon a Form 13D/A filed on February 13, 2006 by Austin W. Marxe
and David M. Greenhouse who share voting and investment control over
all
securities held by Special Situations Private Equity Fund, L.P. and
Special Situations Fund III QP,
L.P.
|
Prior
to the Offering
|
After
the Offering
|
|||||||||||||||
Number
of
|
Number
of
|
Percent
of
|
||||||||||||||
Number
of
|
Shares Already
|
Remaining
|
Number
of
|
Shares
Beneficially
|
||||||||||||
Selling
Stockholder
|
Shares
|
Sold in Offering | Shares Offered (1) |
Shares
(3)
|
Owned (3)
|
|||||||||||
|
||||||||||||||||
Special
Situations Funds III, L.P. (4)
|
1,458,334
|
299,250
|
93,495
|
—
|
—
|
|||||||||||
Special
Situations Private Equity Fund, L.P. (4)
|
1,041,668
|
220,819
|
820,848
|
—
|
—
|
|||||||||||
Special
Situations Funds III QP, L.P. (4)
|
—
|
—
|
1,065,589
|
—
|
—
|
|||||||||||
Barron
Partners, L.P. (5)
|
833,334
|
803,052
|
30,282
|
—
|
—
|
|||||||||||
SF
Capital Partners Ltd. (2) (6)
|
416,668
|
208,333
|
208,334
|
—
|
—
|
|||||||||||
Wasatch
Funds, Inc. (2) (7)
|
208,334
|
208,334
|
—
|
—
|
—
|
|||||||||||
RationalWave
Onshore Equity Fund, L.P. (8)
|
104,168
|
29,999
|
74,168
|
—
|
—
|
|||||||||||
Woodmont
Investment Limited (9)
|
36,460
|
18,229
|
18,230
|
—
|
—
|
|||||||||||
Sedna
Partners, LP (10)
|
67,710
|
33,854
|
33,855
|
—
|
—
|
|||||||||||
Punk,
Ziegel & Company (11)
|
62,500
|
62,500
|
—
|
—
|
—
|
|||||||||||
TOTAL
|
4,229,176
|
1,884,370
|
2,344,806
|
—
|
—
|
Prior
to the Offering
|
After to
the Offering
|
|||||||||||||||
Number
of
|
Number
of
|
Percent
of Shares
|
||||||||||||||
Number
of
|
Shares
Already
|
Remaining
Shares
|
Number
of
|
Beneficially
|
||||||||||||
Selling
Stockholder
|
Shares
|
Sold
in Offering
|
Offered (1)
|
Shares
(2)
|
Owned
(2)
|
|||||||||||
Delta
Realty Limited (3)
|
57,637
|
299,250
|
57,637
|
—
|
—
|
|||||||||||
Jetco
Holdings Ltd. (4)
|
46,458
|
220,819
|
46,458
|
—
|
—
|
|||||||||||
James
Heinz (5)
|
59,524
|
—
|
59,524
|
—
|
—
|
|||||||||||
TOTAL
|
163,619
|
1,884,370
|
163,619
|
—
|
—
|
Prior to
Offering
|
After
the Offering
|
|||||||||||||||
Number
of
|
Number
of
|
Percentage
of
|
||||||||||||||
Shares
|
Remaining
|
Shares
|
||||||||||||||
Number of
|
Already
Sold
|
Shares
|
Number
off
|
Beneficially
|
||||||||||||
Selling Stockholder |
Shares
|
in
Offering
|
Offered(1)
|
Shares
(2)
|
Owned
(2)
|
|||||||||||
Asirwatham,
Ronald T.
|
18,518
(3
|
)
|
—
|
18,518
(3
|
)
|
—
|
—
|
|||||||||
Ballinger,
Arthur J.
|
8,444
(3
|
)
|
—
|
8,444
(3
|
)
|
—
|
—
|
|||||||||
Barron
Partners, LP
|
237,346
(3
|
)
|
—
|
237,346
(3
|
)
|
—
|
—
|
|||||||||
Bearden,
Dale
|
6,667
(4
|
)
|
—
|
6,667
(4
|
)
|
—
|
—
|
|||||||||
Benil
Finance, Ltd.
|
29,630
(3
|
)
|
—
|
29,630
(3
|
)
|
—
|
—
|
|||||||||
Bloom,
Eric
|
1,667
(4
|
)
|
1,667
|
—
|
—
|
—
|
||||||||||
Blue
Green T., LLC
|
14,814
(3
|
)
|
—
|
14,814
(3
|
)
|
—
|
—
|
|||||||||
Brandenburg,
Steven
|
1,852
(3
|
)
|
—
|
1,852
(3
|
)
|
—
|
—
|
|||||||||
Brandenburg,
IRA, Steven
|
26
(4
|
)
|
—
|
26
(4
|
)
|
—
|
—
|
|||||||||
Coar,
Robert M.
|
1,852
(3
|
)
|
—
|
1,852
(3
|
)
|
—
|
—
|
|||||||||
Chahin,
Dr. Jacques
|
105
(4
|
)
|
—
|
105
(4
|
)
|
—
|
—
|
|||||||||
Chung,
Peter
|
12,083
(4
|
)
|
—
|
12,083
(4
|
)
|
—
|
—
|
|||||||||
David
G. Gove and Sharon K. Gove Revocable Trust, dated July 7,
1995
|
68,871
|
—
|
68,871
|
—
|
—
|
|||||||||||
Dean
Jr., Philip
|
7,408
(3
|
)
|
—
|
7,408
(3
|
)
|
—
|
—
|
|||||||||
Deck,
J.E.
|
105
(4
|
)
|
—
|
105
(4
|
)
|
—
|
—
|
|||||||||
Di
Benedetto, LP
|
13,334
(3
|
)
|
—
|
13,334
(3
|
)
|
—
|
—
|
|||||||||
Doss
& Company, Inc.
|
7,408
(3
|
)
|
—
|
7,408
(3
|
)
|
—
|
—
|
|||||||||
Doss,
John R.
|
29,630
(3
|
)
|
—
|
29,630
(3
|
)
|
—
|
—
|
|||||||||
Dumbroff,
Norm (9)
|