Delaware
|
33-0325826
|
(State
or Other Jurisdiction of
|
(I.R.S.
Employer
|
Incorporation
or Organization)
|
Identification
No.)
|
Page
|
|||||||
Part
I
|
4
|
||||||
Item
1.
|
|
Business
|
4
|
||||
Item
1A.
|
|
Risk
Factors
|
10
|
||||
Item
2.
|
|
Properties
|
15
|
||||
Item
3.
|
|
Legal
Proceedings
|
15
|
||||
Item
4.
|
|
Submission
of Matters to a Vote of Security Holders
|
15
|
||||
|
|
||||||
Part
II
|
16
|
||||||
Item
5.
|
|
Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
|
16
|
||||
Item
6.
|
|
Selected
Financial Data
|
18
|
||||
Item
7.
|
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
19
|
||||
Item
7A.
|
|
Quantitative
and Qualitative Disclosures about Market Risk
|
27
|
||||
Item
8.
|
|
Financial
Statements and Supplementary Data
|
28
|
||||
Item
9.
|
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
53
|
||||
Item
9A.
|
|
Controls
and Procedures
|
53
|
||||
Item
9B.
|
|
Other
Information
|
54
|
||||
|
|
||||||
Part
III
|
54
|
||||||
Item
10.
|
|
Directors,
Executive Officers and Corporate Governance
|
54
|
||||
Item
11.
|
|
Executive
Compensation
|
54
|
||||
Item
12.
|
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
54
|
||||
Item
13.
|
|
Certain
Relationships and Related Transactions, and Director
Independence
|
55
|
||||
Item
14.
|
|
Principal
Accountant Fees and Services
|
55
|
||||
|
|
||||||
Part
IV
|
55
|
||||||
Item
15.
|
|
Exhibits
and Financial Statement Schedules
|
55
|
||||
Signatures
|
59
|
Ex-31.1 |
Section
302 Certification of CEO
|
||||||||
Ex-31.2 |
Section
302 Certification of CFO
|
||||||||
Ex-32.1 |
Section
906 Certification of CEO
|
||||||||
Ex-32.2 |
Section
906 Certification of CFO
|
Item 1 |
Business
|
·
|
Optoelectronic
semiconductor design and micro fabrication of Silicon (Si) and III-V
compound semiconductor devices including photodetectors and terahertz
transmitters/receiver antenna,
|
·
|
MBE
growth of high-speed III-V compound semiconductor material including
GaAs,
InAlAs and InP,
|
·
|
Opto-electronic
hybrid packaging of semiconductor devices combining opto-electronic
devices with high-speed electronics and fiber
optics,
|
·
|
Vapor
deposition and/or ion implantation for Silicon based PIN & APD
photo-detectors,
|
·
|
Terahertz
(THz) systems, subsystems, transmitters and receivers,
and
|
·
|
Femtosecond
laser pulse control and system integration.
|
·
|
High
Speed Optical Receivers (10Gb/s & 40Gb/s) which are packaged InP,
InAlAs, or GaAs PIN and/or APD photodiodes with
amplifiers
|
·
|
Packaged
PIN and APD photodiodes in S
|
·
|
Packaged
Si APD components, with and without thermo-electric
coolers
|
·
|
Packaged
Si LAAPDcomponents
|
·
|
Packaged
Si photodiodes with patented FILTRODE® technology integrating optical
filters directly on photodiode
chips
|
·
|
Terahertz
Systems & subsystems utilizing III-V materials for Terahertz
transmitters &/or receivers
|
· |
Space
|
· |
Defense
|
· |
Manufacturing
|
· |
Instrumentation
|
· |
Display
|
· |
Diagnostic
& Monitoring
|
· |
Ophthalmic
Equipment
|
· |
Medical
Imaging
|
· |
Telecom
Equipment
|
· |
Test
and Measurement
|
· |
Wireless
Communications Equipment
|
· |
Baggage/Cargo
Scanning
|
· |
Passenger
Screening
|
Year
ended
March
31, 2006
|
||||
Net
Income (loss), as reported
|
$
|
(5,262,000
|
)
|
|
Net
income (loss), proforma
|
$
|
(5,409,000
|
)
|
|
Basic
income (loss) per share, as reported
|
$
|
(0.30
|
)
|
|
Basic
income (loss) per share, proforma
|
$
|
(0.30
|
)
|
· |
The
next generation photodiodes and high-speed optical receivers for
both the
10G and 40G telecommunications market,
|
· |
THz
-
Application development of the T-Ray™ 4000 product platform for research,
homeland security/military, aerospace, consumer, pharmaceutical and
industrial QC markets,
|
· |
Si
APD performance enhancements - designed specifically for certain
military
and medical imaging applications,
and
|
· |
Si
PIN photodiodes developments to meet unique customer requirements,
such as
higher speeds, lower electrical noise, and unique multi-element
geometries.
|
Patent
#
|
Title
|
Issue
Date
|
142,195
|
HIGHLY-DOPED
P-TYPE CONTACT FOR HIGH-SPEED, FRONT-SIDE ILLUMINATED
PHOTODIODE
|
Apr-05
|
660,471
|
HIGHLY-DOPED
P-TYPE CONTRACT FOR HIGH-SPEED, FRONT-SIDE ILLUMINATED
PHOTODIODE
|
Apr-06
|
765,715
|
HIGHLY-DOPED
P-TYPE CONTACT FOR HIGH-SPEED, FRONT-SIDE ILLUMINATED
PHOTODIODE
|
Jan-04
|
1,230,578
|
COMPACT
FIBER PIGTAIL TERAHERTZ IMAGING SYSTEM
|
Aug-06
|
2,345,153
|
HIGHLY-DOPED
P-TYPE CONTACT FOR HIGH-SPEED, FRONT-SIDE ILLUMINATED
PHOTODIODE
|
Mar-04
|
4,717,946
|
THIN
LINE JUNCTION PHOTODIODE
|
Jan-88
(by
predecessor co.)
|
4,782,382
|
HIGH
QUANTUM EFFICIENCY PHOTODIODE DEVICES
|
Nov-88
(by
predecessor co.)
|
5,021,854
|
SILICON
AVALANCHE PHOTODIODE ARRAY
|
Jun-91
|
5,057,892
|
LIGHT
RESPONSIVE AVALANCHE DIODE
|
Oct-91
|
5,146,296
|
DEVICES
FOR DETECTING AND/OR IMAGING SINGLE PHOTOELECTRON
|
Sep-92
|
5,311,044
|
AVALANCHE
PHOTOMULTIPLIER TUBE
|
May-94
|
5,477,075
|
SOLID
STATE PHOTODETECTOR WITH LIGHT RESPONSIVE REAR FACE
|
Dec-95
|
5,757,057
|
LARGE
AREA AVALANCHE ARRAY
|
May-98
|
5,801,430
|
SOLID
STATE PHOTODETECTOR WITH LIGHT RESPONSIVE REAR FACE
|
Sep-98
|
6,005,276
|
SOLID
STATE PHOTODETECTOR WITH LIGHT RESPONSIVE REAR FACE
|
Dec-99
|
6,029,988
|
COMPACT
FIBER PIGTAILED TERAHERTZ IMAGING SYSTEM
|
Aug-06
|
6,111,299
|
ACTIVE
LARGE AREA AVLANCHE PHOTODIODE ARRAY
|
Aug-00
|
6,262,465
|
HIGHLY-DOPED
P-TYPE CONTACT FOR HIGH-SPEED, FRONT-SIDE ILLUMINATED
PHOTODIODE
|
Jul-01
|
6,320,191
|
A
DISPERSIVE PRECOMPENSATOR FOR USE IN AN ELECTROMAGNETIC RADIATION
GENERATION AND DETECTION SYSTEM
|
Nov-01
|
6,816,647
|
COMPACT
FIBER PIGTAILED TERAHERTZ IMAGING SYSTEM
|
Nov-04
|
6,849,852
|
SYSTEM
AND METHOD FOR MONITORING CHANGES IN STATE OF MATTER WITH TERAHERTZ
RADIATION
|
Feb-05
|
6,936,821
|
AMPLIFIED
PHOTOCONDUCTIVE GATE
|
Aug-05
|
7,039,275
|
FOCUSING
FIBER OPTIC
|
May-06
|
7,078,741
|
HIGH-SPEED
ENHANCED RESPONSIVITY PHOTO DETECTOR
|
Jul-06
|
· |
foreign
countries could change regulations or impose currency restrictions
and
other restraints;
|
· |
changes
in foreign currency exchange rates and hyperinflation or deflation
in the
foreign countries in which we
operate;
|
· |
exchange
controls;
|
· |
some
countries impose burdensome tariffs and
quotas;
|
· |
political
changes and economic crises may lead to changes in the business
environment in which we operate;
|
· |
international
conflict, including terrorist acts, could significantly impact our
financial condition and results of operations;
and
|
· |
economic
downturns, political instability and war or civil disturbances may
disrupt
distribution logistics or limit sales in individual
markets.
|
· |
quarterly
variations in our operating results;
|
· |
operating
results that vary from the expectations of securities analysts and
investors;
|
· |
changes
in expectations as to our future financial performance, including
financial estimates by securities analysts and investors;
|
· |
announcements
of technological innovations or new products by us or our competitors;
|
· |
announcements
by us or our competitors of significant contracts, acquisitions,
strategic
partnerships, joint ventures or capital commitments;
|
· |
changes
in the status of our intellectual property rights;
|
· |
announcements
by third parties of significant claims or proceedings against us;
|
· |
additions
or departures of key personnel;
|
· |
future
sales of our ordinary shares; and
|
· |
stock
market price and volume fluctuations.
|
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
|
1st
Quarter
|
2nd
Quarter
|
3rd
Quarter
|
4th
Quarter
|
||||||||||||||||||||||
2007
|
2006
|
2007
|
2006
|
2007
|
2006
|
2007
|
2006
|
||||||||||||||||||
Common
Stock1
|
|||||||||||||||||||||||||
High
|
2.74
|
3.09
|
2.35
|
3.56
|
2.30
|
3.24
|
2.30
|
2.97
|
|||||||||||||||||
Low
|
1.57
|
2.04
|
1.44
|
2.62
|
1.68
|
2.39
|
1.90
|
2.59
|
Item 6 |
Selected
Financial Data
|
(in
thousands, except per share data)
|
||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||
Net
Sales
|
$
|
23,588
|
$
|
23,585
|
$
|
14,803
|
$
|
12,401
|
$
|
9,147
|
||||||
|
||||||||||||||||
Gross
Profit
|
$
|
10,895
|
$
|
9,183
|
$
|
4,732
|
$
|
4,297
|
$
|
2,699
|
||||||
as
a percentage of Sales
|
46
|
%
|
39
|
%
|
32
|
%
|
35
|
%
|
30
|
%
|
||||||
|
||||||||||||||||
Net
Income (Loss)
|
$
|
(4,646
|
)
|
$
|
(5,262
|
)
|
$
|
5,078
|
$
|
794
|
$
|
(803
|
)
|
|||
|
||||||||||||||||
Earnings
(Loss) per common share-Basic
|
$
|
(0.24
|
)
|
$
|
(0.30
|
)
|
$
|
0.38
|
$
|
0.06
|
$
|
(0.06
|
)
|
|||
Earnings
(Loss) per common share-Diluted
|
$
|
(0.24
|
)
|
$
|
(0.30
|
)
|
$
|
0.33
|
$
|
0.06
|
$
|
(0.06
|
)
|
|||
Weighted
average common shares outstanding
|
19,065
|
17,477
|
13,461
|
13,400
|
12,356
|
|||||||||||
|
||||||||||||||||
Total
Assets
|
$
|
35,242
|
$
|
38,001
|
$
|
23,355
|
$
|
12,574
|
$
|
11,552
|
||||||
|
||||||||||||||||
Current
Liabilities
|
$
|
9,253
|
$
|
5,135
|
$
|
3,185
|
$
|
2,858
|
$
|
2,640
|
||||||
Long
Term Liabilities
|
$
|
4,866
|
$
|
7,403
|
$
|
3,834
|
$
|
11
|
$
|
22
|
||||||
Class
A redeemable convertible preferred stock
|
$
|
32
|
$
|
32
|
$
|
32
|
$
|
32
|
$
|
32
|
||||||
Shareholders'
Equity
|
$
|
21,091
|
$
|
25,431
|
$
|
16,304
|
$
|
9,673
|
$
|
8,858
|
||||||
|
||||||||||||||||
Working
Capital
|
$
|
2,424
|
$
|
9,330
|
$
|
11,261
|
$
|
5,802
|
$
|
4,811
|
||||||
Dividends
declared on Capital Stock
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
Item 7 |
Management’s
Discussion and Analysis of Financial Condition and Results of Operation
|
Twelve
months ended
|
|||||||||||||
March
31,2007
|
March
31,2006
|
||||||||||||
Telecommunications
|
$
|
5,850,000
|
25
|
%
|
$
|
3,129,000
|
13
|
%
|
|||||
Industrial
Sensing/NDT
|
10,041,000
|
43
|
%
|
10,359,000
|
44
|
%
|
|||||||
Military/Aerospace
|
5,157,000
|
22
|
%
|
5,860,000
|
25
|
%
|
|||||||
Medical
|
2,467,000
|
10
|
%
|
2,228,000
|
9
|
%
|
|||||||
Homeland
Security
|
73,000
|
0
|
%
|
2,009,000
|
9
|
%
|
|||||||
Total
Revenues
|
$
|
23,588,000
|
100
|
%
|
$
|
23,585,000
|
100
|
%
|
Twelve
months ended
|
|||||||||||||
March
31,2006
|
March
27, 2005
|
||||||||||||
Telecommunications
|
$
|
3,129,000
|
13
|
%
|
$
|
86,000
|
1
|
%
|
|||||
Industrial
Sensing/NDT
|
10,359,000
|
44
|
%
|
7,360,000
|
49
|
%
|
|||||||
Military/Aerospace
|
5,860,000
|
25
|
%
|
4,875,000
|
33
|
%
|
|||||||
Medical
|
2,228,000
|
9
|
%
|
2,482,000
|
17
|
%
|
|||||||
Home
Land Security
|
2,009,000
|
9
|
%
|
--
|
0
|
%
|
|||||||
Total
Revenues
|
$
|
23,585,000
|
100
|
%
|
$
|
14,803,000
|
100
|
%
|
Convertible
notes - Face value
|
Notes
Converted
|
Convertible
notes - Balance 3/31/07
|
Conversion
Price
|
Outstanding
Warrants
|
Exercise
Price
|
||||||||||||||
Round
1 financing
|
$
|
5,000,000
|
$
|
3,475,000
|
$
|
1,525,000
|
$
|
1.9393
|
680,658
|
$
|
1.78
|
||||||||
Round
2 financing
|
5,000,000
|
1,000,000
|
4,000,000
|
$
|
2.1156
|
765,740
|
$
|
1.78
|
|||||||||||
Total
|
$
|
10,000,000
|
$
|
4,475,000
|
$
|
5,525,000
|
1,446,398
|
Contractual
Obligations
|
Payments
due by period
|
|||||||||||||||
Total
|
Within
1 year
|
1
- 3 years
|
3
- 5 years
|
More
than 5 years
|
||||||||||||
Long-term
Bank loan
|
$
|
2,608,000
|
$
|
1,021,000
|
$
|
1,214,000
|
$
|
373,000
|
-
|
|||||||
Long-term
MEDC loan
|
1,522,000
|
-
|
937,000
|
585,000
|
-
|
|||||||||||
Convertible
notes
|
5,525,000
|
5,525,000
|
-
|
-
|
-
|
|||||||||||
Discount
on convertible notes
|
(1,364,000
|
)
|
(1,364,000
|
)
|
-
|
-
|
-
|
|||||||||
Debt
to related parties
|
2,401,000
|
550,000
|
1,851,000
|
-
|
-
|
|||||||||||
Subtotal
- Balance Sheet
|
10,692,000
|
5,732,000
|
4,002,000
|
958,000
|
-
|
|||||||||||
Operating
lease obligations
|
3,096,000
|
1,170,000
|
1,926,000
|
-
|
-
|
|||||||||||
Purchase
obligations
|
1,873,000
|
1,873,000
|
-
|
-
|
-
|
|||||||||||
Total
|
$
|
15,661,000
|
$
|
8,775,000
|
$
|
5,928,000
|
$
|
958,000
|
-
|
Item 7A |
Quantitative
and Qualitative Disclosures about Market
Risk
|
Item 8. |
Financial
Statements and Supplementary
Data
|
Page
|
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
29
|
FINANCIAL
STATEMENTS:
|
|
Consolidated
Balance Sheets,
|
|
As
of March 31, 2007 and March 31, 2006
|
30
|
Consolidated
Statements of Operations
|
|
for
the years ended March 31, 2007, March 31, 2006 and March 27,
2005
|
32
|
Consolidated
Statements of Shareholders' Equity
|
|
for
the years ended March 31, 2007, March 31, 2006 and March 27,
2005
|
33
|
Consolidated
Statements of Cash Flows
|
|
for
the years ended March 31, 2007, March 31, 2006 and March 27,
2005
|
34
|
Notes
to Consolidated Financial Statements
|
36
|
As
of:
|
March
31, 2007
|
March
31, 2006
|
|||||
Assets
|
|||||||
Current
assets:
|
|||||||
Cash
and cash equivalents
|
$
|
3,274,000
|
$
|
5,933,000
|
|||
Accounts
receivable, net of allowance for doubtful accounts of $51,000 and
$46,000
in 2007 and 2006, respectively
|
3,587,000
|
4,387,000
|
|||||
Inventory,
less allowance of $924,000 and $2,181,000 in 2007 and 2006,
respectively
|
4,439,000
|
3,434,000
|
|||||
Prepaid
expenses and other current assets
|
377,000
|
711,000
|
|||||
Total
current assets:
|
11,677,000
|
14,465,000
|
|||||
Equipment
and leasehold improvements:
|
|||||||
Equipment
and leasehold improvements
|
10,301,000
|
7,923,000
|
|||||
Accumulated
depreciation
|
(5,565,000
|
)
|
(4,548,000
|
)
|
|||
Equipment
and leasehold improvements, net
|
4,736,000
|
3,375,000
|
|||||
Other
assets:
|
|||||||
Goodwill,
net of accumulated amortization of $353,000 in 2007 and 2006,
respectively
|
4,579,000
|
4,719,000
|
|||||
Intangibles,
net of accumulated amortization of $2,921,000 and $1,399,000 in 2007
and
2006, respectively
|
12,285,000
|
14,155,000
|
|||||
Patents,
net of accumulated amortization of $62,000 and $55,000 for 2007 and
2006,
respectively
|
45,000
|
16,000
|
|||||
Patents
pending
|
310,000
|
184,000
|
|||||
Prepaid
capital finance expense, net of current portion and accumulated
amortization in 2007 and 2006 of $238,000 and $181,000,
respectively
|
--
|
84,000
|
|||||
Deferred
income taxes
|
1,225,000
|
623,000
|
|||||
Certificate
of deposit
|
285,000
|
275,000
|
|||||
Security
deposits and other assets
|
100,000
|
105,000
|
|||||
Total
other assets
|
18,829,000
|
20,161,000
|
|||||
Total
assets:
|
$
|
35,242,000
|
$
|
38,001,000
|
March
31, 2007
|
March
31, 2006
|
||||||
Liabilities
and shareholders' equity
|
|||||||
Current
liabilities:
|
|||||||
Line
of credit
|
$
|
741,000
|
$
|
1,000,000
|
|||
Accounts
payable
|
1,401,000
|
982,000
|
|||||
Compensation
and related withholdings
|
1,091,000
|
697,000
|
|||||
Customer
deposits
|
--
|
1,000
|
|||||
Deferred
income
|
--
|
76,000
|
|||||
Interest
payable
|
325,000
|
183,000
|
|||||
Other
accrued expenses
|
610,000
|
769,000
|
|||||
Current
portion of long-term debt, related party
|
550,000
|
500,000
|
|||||
Current
portion of long-term debt
|
4,535,000
|
927,000
|
|||||
Total
current liabilities
|
9,253,000
|
5,135,000
|
|||||
Long-term
debt, less current portion
|
3,015,000
|
5,002,000
|
|||||
Long-term
debt, less current portion - related party
|
1,851,000
|
2,401,000
|
|||||
Total
liabilities
|
14,119,000
|
12,538,000
|
|||||
Commitments
and contingencies
|
|||||||
Class
A
redeemable convertible preferred stock, $.001 par value; 780,000
shares
authorized; 2007 and 2006 - 40,000 shares issued and outstanding;
liquidation preference $32,000
|
32,000
|
32,000
|
|||||
Shareholders'
equity
|
|||||||
Preferred
stock,
$.001 par value; 10,000,000 shares authorized; 780,000 shares designated
Class A redeemable convertible; 2007 and 2006 - no shares issued
and
outstanding
|
--
|
--
|
|||||
Class
A Common
Stock,
$.001 par value, 50,000,000 authorized; 2007 - 19,226,006 shares
issued
and outstanding; 2006 - 18,885,006 shares issued and
outstanding.
|
19,000
|
19,000
|
|||||
Class
B Common
Stock,
$.001 par value; 4,420,113 shares authorized, 2007 and 2006 - 31,691
issued and outstanding.
|
--
|
--
|
|||||
Additional
paid-in capital
|
43,887,000
|
43,581,000
|
|||||
Accumulated
deficit
|
(22,815,000
|
)
|
(18,169,000
|
)
|
|||
Total
shareholders' equity
|
21,091,000
|
25,431,000
|
|||||
Total
liabilities and shareholders' equity
|
$
|
35,242,000
|
$
|
38,001,000
|
For
the years ended March 31, 2007, March 31, 2006 and March 27,
2005
|
2007
|
2006
|
2005
|
|||||||
Sales,
net
|
$
|
23,588,000
|
$
|
23,585,000
|
$
|
14,803,000
|
||||
Cost
of products sold
|
12,693,000
|
14,402,000
|
10,071,000
|
|||||||
Gross
profit
|
10,895,000
|
9,183,000
|
4,732,000
|
|||||||
Research
and development expenses
|
4,015,000
|
3,019,000
|
146,000
|
|||||||
Sales
and marketing expenses
|
2,174,000
|
1,930,000
|
1,214,000
|
|||||||
General
and administrative expenses
|
4,656,000
|
4,157,000
|
2,508,000
|
|||||||
Amortization
expense
|
1,528,000
|
1,403,000
|
117,000
|
|||||||
Amortization
- capital finance expense
|
148,000
|
387,000
|
81,000
|
|||||||
Stock
option compensation
|
361,000
|
--
|
--
|
|||||||
Wafer
fabrication relocation expense
|
720,000
|
--
|
--
|
|||||||
Loss
on impairment of intangible asset
|
349,000
|
--
|
--
|
|||||||
Loss
on impairment of goodwill
|
140,000
|
814,000
|
--
|
|||||||
Total
operating expenses
|
14,091,000
|
11,710,000
|
4,066,000
|
|||||||
Income
(loss) from operations
|
(3,196,000
|
)
|
(2,527,000
|
)
|
666,000
|
|||||
Other
income (expense):
|
||||||||||
Interest
income
|
213,000
|
43,000
|
43,000
|
|||||||
Interest
expense
|
(322,000
|
)
|
(322,000
|
)
|
(13,000
|
)
|
||||
Interest
expense related to convertible notes
|
(504,000
|
)
|
(208,000
|
)
|
(141,000
|
)
|
||||
Interest
expense, warrant discount
|
(1,528,000
|
)
|
(1,978,000
|
)
|
(176,000
|
)
|
||||
Interest
expense, related party
|
(224,000
|
)
|
(206,000
|
)
|
--
|
|||||
Other
income (expense)
|
(5,000
|
)
|
(36,000
|
)
|
(35,000
|
)
|
||||
Income
(Loss) before provision (benefit) for income taxes
|
(5,566,000
|
)
|
(5,234,000
|
)
|
344,000
|
|||||
Provision
(benefit) for income taxes:
|
||||||||||
Provision
(benefit) for income taxes - current
|
62,000
|
|
28,000
|
18,000
|
||||||
Provision
(benefit) for income taxes - deferred
|
(920,000
|
)
|
--
|
(4.752,000
|
)
|
|||||
Total
provision (benefits) for income taxes
|
--
|
28,000
|
(4,734,000
|
)
|
||||||
Net
income (loss)
|
$
|
(4,646,000
|
)
|
$
|
(5,262,000
|
)
|
$
|
5,078,000
|
||
Basic
earnings (loss) per share
|
$
|
(0.24
|
)
|
$
|
(0.30
|
)
|
$
|
0.38
|
||
Diluted
earnings (loss) per share
|
$
|
(0.24
|
)
|
$
|
(0.30
|
)
|
$
|
0.33
|
||
Weighted
average common shares outstanding
|
19,065,000
|
17,477,000
|
13,461,000
|
For
the years ended March 31, 2007, March 31, 2006 and March
27, 2005
|
Class
A
Common
Stock
|
Class
B
Common
Stock
|
Additional
Paid-in Capital
|
Accumulated
Deficit
|
||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Restated
|
Restated
|
Total
|
||||||||||||||||
BALANCE
AT MARCH 28, 2004
|
13,397,059
|
$
|
13,000
|
31,691
|
--
|
$
|
27,646,000
|
$
|
(17,986,000
|
)
|
$
|
9,673,000
|
||||||||||
Exercise
of Options
|
2,000
|
--
|
--
|
--
|
1,000
|
--
|
1,000
|
|||||||||||||||
Shares
issued to acquire PDI
|
113,572
|
--
|
--
|
--
|
207,000
|
--
|
207,000
|
|||||||||||||||
Discount
on note payable (fair value of detachable warrants issued)
|
--
|
--
|
--
|
--
|
1,344,000
|
--
|
1,344,000
|
|||||||||||||||
Net
Income
|
--
|
--
|
--
|
--
|
--
|
5,078,000
|
5,078,000
|
|||||||||||||||
BALANCE
AT MARCH 27, 2005
|
13,512,631
|
$
|
13,000
|
31,691
|
--
|
$
|
29,198,000
|
$
|
(12,907,000
|
)
|
$
|
16,304,000
|
||||||||||
Exercise
of Options
|
266,500
|
--
|
--
|
--
|
272,000
|
--
|
272,000
|
|||||||||||||||
Notes
Conversions
|
2,264,560
|
3,000
|
--
|
--
|
4,473,000
|
--
|
4,476,000
|
|||||||||||||||
Shares
issued for interest
|
11,069
|
--
|
--
|
--
|
21,000
|
--
|
21,000
|
|||||||||||||||
Discount
on note payable (fair value of detachable warrants issued)
|
--
|
--
|
--
|
--
|
3,732,000
|
--
|
3,732,000
|
|||||||||||||||
Warrants
exercised
|
255,246
|
--
|
--
|
--
|
454,000
|
--
|
454,000
|
|||||||||||||||
Shares
issued to acquire Picometrix
|
2,575,000
|
3,000
|
--
|
--
|
5,431,000
|
--
|
5,434,000
|
|||||||||||||||
Net
Income
|
--
|
--
|
--
|
--
|
--
|
(5,262,000
|
)
|
(5,262,000
|
)
|
|||||||||||||
BALANCE
AT MARCH 31, 2006
|
18,885,006
|
$
|
19,000
|
31,691
|
$
|
-
|
$
|
43,581,000
|
$
|
(18,169,000
|
)
|
$
|
25,431,000
|
|||||||||
Exercise
of Options
|
341,000
|
--
|
355,000
|
355,000
|
||||||||||||||||||
Stock
Compensation 123(R)
|
361,000
|
361,000
|
||||||||||||||||||||
Adjustment
of discount on note payable (fair value of detachable warrants
issued)
|
(31,000
|
)
|
(31,000
|
)
|
||||||||||||||||||
Deferred
tax liability on beneficial conversion
|
(379,000
|
)
|
(379,000
|
)
|
||||||||||||||||||
Net
Income
|
(4,646,000
|
)
|
(4,646,000
|
)
|
||||||||||||||||||
BALANCE
AT MARCH 31, 2007
|
19,226,006
|
$
|
19,000
|
31,691
|
$
|
--
|
$
|
43,887,000
|
$
|
(22,815,000
|
)
|
$
|
21,091,000
|
For
the years ended March 31, 2007, March 31, 2006 and March 27,
2005
|
2007
|
2006
|
2005
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||||
Net
income (loss):
|
$
|
(4,646,000
|
)
|
$
|
(5,262,000
|
)
|
$
|
5,078,000
|
||
Adjustment
to reconcile net income (loss) to net cash
provided
by (used in) operating activities:
|
Depreciation
|
1,076,000
|
829,000
|
369,000
|
|||||||
Amortization
|
1,676,000
|
1,790,000
|
198,000
|
|||||||
Stock
compensation expense
|
361,000
|
--
|
--
|
|||||||
Goodwill
impairment charges
|
140,000
|
814,000
|
--
|
|||||||
Loss
on impairment of intangible asset
|
349,000
|
--
|
--
|
|||||||
Amortization,
convertible note discount
|
1,528,000
|
1,978,000
|
176,000
|
Deferred
income taxes
|
(602,000
|
)
|
--
|
--
|
||||||
Disposal
of fixed assets
|
--
|
--
|
56,000
|
|||||||
Provision
for warranty expense
|
20,000
|
--
|
15,000
|
|||||||
Other
provisions
|
128,000
|
821,000
|
--
|
|||||||
Increase
(decrease) in deferred tax valuation allowance
|
--
|
--
|
(4,749,000
|
)
|
||||||
Changes
in operating assets and liabilities:
|
||||||||||
Accounts
receivable
|
800,000
|
(712,000
|
)
|
71,000
|
||||||
Inventories
|
(1,133,000
|
)
|
137,000
|
(291,000
|
)
|
|||||
Prepaid
expenses and other current assets
|
284,000
|
(355,000
|
)
|
(193,000
|
)
|
|||||
Prepaid
acquisition costs
|
--
|
--
|
(134,000
|
)
|
||||||
Prepaid
capital finance expense
|
--
|
--
|
(398,000
|
)
|
||||||
Other
assets
|
(398,000
|
)
|
158,000
|
--
|
||||||
Accounts
payable
|
419,000
|
(336,000
|
)
|
428,000
|
||||||
Customer
deposit liability
|
--
|
--
|
(477,000
|
)
|
||||||
Accrued
expenses
|
254,000
|
(645,000
|
)
|
79,000
|
||||||
Net
cash provided by (used in) operating activities
|
256,000
|
(783,000
|
)
|
228,000
|
||||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||||
Capital
expenditures
|
(2,437,000
|
)
|
(263,000
|
)
|
(193,000
|
)
|
||||
Patent
expenditures
|
(162,000
|
)
|
(191,000
|
)
|
--
|
|||||
Short
term investments
|
--
|
--
|
1,700,000
|
|||||||
Change
in restricted cash
|
--
|
1,254,000
|
(1,254,000
|
)
|
||||||
Cash
acquired through acquisition of Photonic Detectors, Inc.
|
--
|
--
|
44,000
|
|||||||
Cash
acquired through acquisition of Picotronix, Inc.
|
--
|
678,000
|
--
|
|||||||
Cash
paid for Picotronix, Inc. acquisition
|
--
|
(3,500,000
|
)
|
--
|
||||||
Cash
paid for acquisition related costs
|
--
|
(936,000
|
)
|
--
|
||||||
Purchase
of outstanding shares of Photonic Detectors, Inc.
common
stock
|
--
|
--
|
(1,117,000
|
)
|
||||||
Loan
to Picometrix, Inc.
|
--
|
--
|
(4,228,000
|
)
|
||||||
Net
cash used in investing activities
|
(2,599,000
|
)
|
(2,958,000
|
)
|
(5,048,000
|
)
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||||
Repayment
of Photonic Detectors, Inc. line of credit
|
--
|
--
|
(78,000
|
)
|
||||||
Proceeds
from bank term loan
|
1,867,000
|
2,700,000
|
--
|
|||||||
Payments
on bank term loan
|
(1,950,000
|
)
|
(750,000
|
)
|
(900,000
|
)
|
||||
Advanced
Photonix, Inc. revolving line of credit (asset-based)
|
(259,000
|
)
|
--
|
1,000,000
|
||||||
Payments
on notes payable
|
--
|
119,000
|
--
|
|||||||
Proceeds
from private placement of convertible note
|
--
|
5,000,000
|
5,000,000
|
|||||||
Proceeds
from MEDC term loan
|
172,000
|
600,000
|
--
|
|||||||
Proceeds
from exercise of warrants
|
--
|
455,000
|
--
|
|||||||
Payments
on related party debt
|
(501,000
|
)
|
--
|
--
|
||||||
Proceeds
from exercise of stock options
|
355,000
|
47,000
|
2,000
|
|||||||
Net
cash provided by (used in) financing activities
|
(316,000
|
)
|
8,171,000
|
5,024,000
|
||||||
NET
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
|
(2,659,000
|
)
|
4,430,000
|
204,000
|
||||||
CASH
AND CASH EQUIVALENTS AT BEGINNING OF
YEAR
|
5,933,000
|
1,503,000
|
1,299,000
|
|||||||
CASH
AND CASH EQUIVALENTS AT END OF YEAR
|
$
|
3,274,000
|
$
|
5,933,000
|
$
|
1,503,000
|
2007
|
2006
|
2005
|
||||||||
Cash
paid for interest
|
$
|
795,000
|
$
|
623,000
|
$
|
153,000
|
||||
Cash
paid for income taxes
|
$
|
26,000
|
$
|
17,000
|
$
|
19,000
|
Assets
acquired
|
$
|
19,404,000
|
||
Liabilities
assumed
|
(2,406,000
|
)
|
||
Net
assets acquired
|
16,998,000
|
|||
Cash
Paid
|
(3,500,000
|
)
|
||
Broker
fees and other direct costs
|
(936,000
|
)
|
||
12,562,000
|
||||
Non-cash
investing activities:
|
||||
Common
stock issued
|
(5,433,000
|
)
|
||
Note
payable - related
|
(2,901,000
|
)
|
||
Picometrix
note retired
|
(4,228,000
|
)
|
||
Net
balance
|
$
|
--
|
1. |
Summary
of the Company and Significant Accounting Policies
|
Principles
of Consolidation
-
The consolidated financial statements include the financial statements
of
the Company and its wholly-owned subsidiaries. All significant
inter-company balances and transactions have been eliminated in
consolidation.
|
Fiscal
Year-End -
Effective with the FY 2006 year-end, the Company’s fiscal year ends on the
last calendar day in March. Prior fiscal years ended on the last
Sunday of
March. As a result of this change, fiscal year ended March 31, 2007
contains fifty-two weeks and fiscal year ended March 31, 2006 contains
fifty-three weeks. The prior fiscal year ending March 27, 2005 contained
fifty-two weeks.
|
Operating
Segment Information
-
The Company operates as one segment in accordance with SFAS 131,
“Disclosures about Segments of an Enterprise and Related Information.”
The
Company’s chief operating decision maker and management personnel view the
Company’s performance and make resource allocation decisions by looking at
the Company as a whole. Although there are different product lines
within
the Company, they are economically similar and are also similar in
terms
of the five criteria set forth in SFAS 131 that must be met to combine
segments. The Company’s products are light and radiation detection
devices. The nature of the production process is similar for all
product
lines, and manufacturing for the different product lines occurs in
common
facilities. Generally, the same engineers with the same qualifications
design and manufacture products for all product lines. The types
and class
of customers are similar across all product lines, and products are
distributed through common channels and distributor
networks.
|
Fair
Value of Financial Instruments
-
The carrying value of all financial instruments potentially subject
to
valuation risk (principally consisting of cash equivalents, accounts
receivable, accounts payable, notes receivable and notes payable)
approximates fair value based upon prevailing interest rates available
to
the Company.
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Cash
and Cash Equivalents
-
The Company considers all highly liquid investments, with an original
maturity of three months or less when purchased, to be cash
equivalents.
|
|
Accounts
receivable are unsecured and the Company is at risk to the extent
such
amount becomes uncollectible. The Company performs periodic credit
evaluations of its customers’ financial condition and generally does not
require collateral. As of March 31, 2007, one customer comprised
11% of
accounts receivable. As of March 31, 2006, one customer comprised
14% of
accounts receivable.
|
Equipment
and Leasehold Improvements
-
Equipment and leasehold improvements are stated at cost. Depreciation
and
amortization are computed using the straight-line method over the
estimated useful lives of the assets or lease term ranging from three
to
nine years.
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Intangible
Assets
|
|
Revenues
from research and development cost reimbursement-type contracts are
recorded as costs are incurred based upon the relationship between
actual
incurred costs, total estimated costs and the amount of the contract
or
grant award. Estimation of cost is reviewed periodically and any
anticipated losses are recognized in the period in which they first
become
determinable.
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