Page | |
3
|
|
7
|
|
17
|
|
17
|
|
17
|
|
18
|
|
26
|
|
27
|
|
28
|
|
28
|
|
28
|
|
28
|
Common
stock offered by the selling security holders
|
8,244,880
shares
|
Common
stock outstanding prior to this offering
|
37,223,236
shares
|
Common
stock to be outstanding after this offering
|
39,971,533
shares(1)
|
Use
of proceeds
|
All
proceeds of this offering will be received by selling security
holders for
their own accounts. See “Use of Proceeds.”
|
Nasdaq
National Market symbol
|
PEIX
|
·
|
76,000
shares of common stock reserved for issuance under our Amended
1995
Incentive Stock Plan, of which options to purchase 76,000 shares
were
outstanding as of that date, at a weighted average exercise price
of $5.95
per share;
|
·
|
1,677,500
shares of common stock reserved for issuance under our 2004 Stock
Option
Plan, of which options to purchase 665,000 shares were outstanding
as of
that date, at a weighted average exercise price of $7.83 per share;
|
·
|
216,251
shares of common stock underlying warrants outstanding as of that
date,
not including shares of common stock underlying warrants and offered
under
this prospectus, at a weighted average exercise price of $2.21
per share;
and
|
·
|
any
additional shares of common stock we may issue from time to time
after
that date.
|
Three
Months Ended March
31,
|
Year Ended
December 31,
|
|||||||||||||||
2006
|
2005
|
2005
|
2004
|
2003
|
||||||||||||
Consolidated
Statements of Operations Data and other Comprehensive
Income:
|
|
|
|
|
|
|||||||||||
Net
sales
|
$
|
38,239,167
|
$
|
2,301,997
|
$
|
87,599,012
|
$
|
19,764
|
$
|
1,016,594
|
||||||
Cost
of goods sold
|
35,913,920
|
2,254,370
|
84,444,183
|
12,523
|
946,012
|
|||||||||||
Gross
profit
|
2,325,247
|
47,627
|
3,154,829
|
7,241
|
70,582
|
|||||||||||
Selling,
general and administrative expenses
|
2,984,084
|
743,233
|
10,994,630
|
2,277,510
|
647,731
|
|||||||||||
Feasibility
study expensed in connection with acquisition of ReEnergy
|
--
|
852,250
|
852,250
|
--
|
--
|
|||||||||||
Acquisition
cost expense in excess of cash received
|
--
|
--
|
480,948
|
--
|
--
|
|||||||||||
Discontinued
design of cogeneration facility
|
--
|
--
|
310,522
|
--
|
--
|
|||||||||||
Loss
from operations
|
(658,837
|
)
|
(1,547,856
|
)
|
(9,483,521
|
)
|
(2,270,269
|
)
|
(577,149
|
)
|
||||||
Total
other income (expense)
|
51,779
|
(107,853
|
)
|
(433,998
|
)
|
(530,698
|
)
|
(279,930
|
)
|
|||||||
Loss
from operations before income taxes
|
(607,058
|
)
|
(1,655,709
|
)
|
(9,917,519
|
)
|
(2,800,967
|
)
|
(857,079
|
)
|
||||||
Provision
for income taxes
|
4,705
|
1,600
|
5,600
|
1,600
|
1,600
|
|||||||||||
Net
loss
|
$
|
(611,763
|
)
|
$
|
(1,657,309
|
)
|
$
|
(9,923,119
|
)
|
$
|
(2,802,567
|
)
|
$
|
(858,679
|
)
|
|
Other
comprehensive income, net of tax:
|
||||||||||||||||
Cash
flow hedges:
|
||||||||||||||||
Net
change in the fair value of derivatives
|
674,208
|
--
|
--
|
--
|
--
|
|||||||||||
Comprehensive
income (loss)
|
$
|
62,445
|
$
|
(1,657,309
|
)
|
$
|
(9,923,119
|
)
|
$
|
(2,802,567
|
)
|
$
|
(858,679
|
)
|
||
Loss
per share, basic and diluted
|
$
|
(0.02
|
)
|
$
|
(0.10
|
)
|
$
|
(0.40
|
)
|
$
|
(0.23
|
)
|
$
|
(0.07
|
)
|
|
Weighted-average
shares outstanding, basic and diluted
|
29,587,193
|
16,257,942
|
25,065,872
|
12,396,895
|
11,733,200
|
|||||||||||
Consolidated
Balance Sheet Data:
|
||||||||||||||||
Cash
and cash equivalents
|
$
|
4,200,902
|
$
|
20,743,553
|
$
|
4,521,111
|
$
|
42
|
$
|
249,084
|
||||||
Working
capital (deficit)
|
(10,569,314
|
)
|
19,218,405
|
(2,894,133
|
)
|
(1,024,747
|
)
|
(357,576
|
)
|
|||||||
Total
assets
|
63,532,812
|
41,658,982
|
48,184,812
|
7,179,263
|
6,559,634
|
|||||||||||
Stockholders’
equity
|
34,881,141
|
32,745,745
|
28,515,431
|
1,355,732
|
1,367,828
|
Year
Ended
December
31, 2005
|
Year
Ended
December
31, 2004
|
||||||||||||
|
Pacific
Ethanol
|
Pro
Forma
Pacific
Ethanol
and
Acquisitions
|
Pacific
Ethanol
|
Pro
Forma
Pacific
Ethanol
and
Acquisitions
|
|||||||||
Consolidated
Statements of Operations Data:
|
(unaudited
|
)
|
(unaudited
|
)
|
|||||||||
Net
sales
|
$
|
87,599,012
|
$
|
111,186,711
|
$
|
19,764
|
$
|
82,810,168
|
|||||
Cost
of goods sold
|
84,444,183
|
107,644,784
|
12,523
|
79,593,420
|
|||||||||
|
|||||||||||||
Gross
profit
|
3,154,829
|
3,541,927
|
7,241
|
3,216,748
|
|||||||||
Selling,
general and administrative expenses
|
10,994,630
|
11,287,945
|
2,277,510
|
5,532,721
|
|||||||||
Feasibility
study expensed in connection with acquisition of ReEnergy
|
852,250
|
852,250
|
--
|
852,250
|
|||||||||
Acquisition
cost expense in excess of cash received
|
480,948
|
480,948
|
--
|
--
|
|||||||||
Discontinued
design of cogeneration facility
|
310,522
|
310,522
|
--
|
--
|
|||||||||
|
|||||||||||||
Loss
from operations
|
(9,483,521
|
)
|
(9,389,738
|
)
|
(2,270,269
|
)
|
(3,168,223
|
)
|
|||||
Total
other expense
|
(433,998
|
)
|
(433,998
|
)
|
(530,698
|
)
|
(535,535
|
)
|
|||||
|
|||||||||||||
Loss
from operations before income taxes
|
(9,917,519
|
)
|
(9,823,736
|
)
|
(2,800,967
|
)
|
(3,703,758
|
)
|
|||||
Provision
for income taxes
|
5,600
|
5,600
|
1,600
|
2,400
|
|||||||||
|
|||||||||||||
Net
loss
|
$
|
(9,923,119
|
)
|
$
|
(9,829,336
|
)
|
$
|
(2,802,567
|
)
|
$
|
(3,706,158
|
)
|
|
|
|||||||||||||
Loss
per share, basic and diluted
|
$
|
(0.40
|
)
|
$
|
(0.35
|
)
|
$
|
(0.23
|
)
|
$
|
(0.14
|
)
|
|
|
|||||||||||||
Weighted-average
shares outstanding, basic and diluted
|
25,065,782
|
28,192,572
|
12,396,895
|
26,486,347
|
·
|
changing
conditions in the ethanol and fuel markets;
|
·
|
the
volume and timing of the receipt of orders for ethanol from major
customers;
|
·
|
competitive
pricing pressures;
|
·
|
our
ability to produce, sell and deliver ethanol on a cost-effective
and
timely basis;
|
·
|
the
introduction and announcement of one or more new alternatives to
ethanol
by our competitors;
|
·
|
changes
in market valuations of similar companies;
|
·
|
stock
market price and volume fluctuations generally;
|
·
|
regulatory
developments or increased enforcement;
|
·
|
fluctuations
in our quarterly or annual operating results;
|
·
|
additions
or departures of key personnel;
|
·
|
our
inability to obtain construction, acquisition, capital equipment
and/or
working capital financing; and
|
·
|
future
sales of our common stock or other
securities.
|
·
|
D.E.
Shaw Valence Portfolios, L.L.C. is an affiliate of two NASD-registered
broker-dealers, one of which is controlled by D.E. Shaw Valence
Portfolios, L.L.C. and the other of which is under common control
with
D.E. Shaw Valence Portfolios, L.L.C.;
|
·
|
Capital
Ventures International is affiliated with one or more NASD-registered
broker-dealers by virtue of common control;
|
·
|
Stewart
Flink, a Managing Member of Crestview Capital Master, LLC, is the
controlling shareholder of Dillon Capital, Inc., an NASD-registered
broker-dealer;
|
·
|
Evolution
Capital Management, LLC, the investment advisor of Evolution Master
Fund
Ltd. SPC, indirectly owns Tora Trading, LLC, an NASD-registered
broker-dealer;
|
·
|
Hudson
Bay Fund LP is affiliated with XTF Market Making LLC and XTF Capital
LLC,
both of whom are NASD-registered broker-dealers. Sander Gerber
is Managing
Member of XTF Market Making LLC and XTF Capital LLC and is also
a Managing
Member of Hudson Bay Capital Associates LLC, which is the general
partner
of Hudson Bay Fund LP;
|
·
|
Shepherd
Investments International, Ltd. is affiliated with Reliant Trading
and
Shepherd Trading Limited, each of which is an NASD-registered
broker-dealer;
|
·
|
Enable
Growth Partners LP is affiliated with Enable Capital LLC, an
NASD-registered broker-dealer. Mitch Levine is the Managing Member
of
Enable Capital LLC and is also a principal in Enable Capital Management,
LLC, the general partner of Enable Growth Partners LP;
|
·
|
Portside
Growth and Opportunity Fund’s investment advisor is Ramius Capital Group,
L.L.C. Ramius Capital Group, L.L.C. is affiliated with an NASD-registered
broker-dealer;
|
·
|
SF
Capital Partners Ltd. is affiliated with Reliant Trading and Shepherd
Trading Limited, each of which is an NASD-registered
broker-dealer;
|
·
|
Stark
Trading is affiliated with Reliant Trading and Shepherd Trading
Limited,
each of which is an NASD-registered broker-dealer;
|
·
|
Enable
Opportunity Partners LP is affiliated with Enable Capital LLC,
an
NASD-registered broker-dealer. Mitch Levine is the Managing Member
of
Enable Capital LLC and is also a principal in Enable Capital Management,
LLC, the general partner of Enable Opportunity Partners LP;
and
|
·
|
Pierce
Diversified Strategy Master Fund LLC, Ena is affiliated with Enable
Capital LLC, an NASD-registered broker-dealer. Mitch Levine is
the
Managing Member of Enable Capital LLC and is also a principal in
Enable
Capital Management, LLC, the Manager of Pierce Diversified Strategy
Master
Fund LLC, Ena.
|
Name
of
|
Shares
of Common Stock
Beneficially
Owned
Prior
to Offering
|
Shares
of Common Stock
Being
|
Shares
of Common
Stock Beneficially
Owned After
Offering
|
|||||||||||||||||||
Beneficial
Owner
|
Number
|
Percentage
|
Offered
|
Number
|
Percentage
|
|||||||||||||||||
D.E.
Shaw Valence Portfolios, L.L.C.
|
1,200,000
|
(1
|
)
|
3.19
|
%
|
1,200,000
|
(1
|
)
|
-
|
-
|
||||||||||||
Capital
Ventures International
|
568,613
|
(2
|
)
|
1.52
|
%
|
568,613
|
(2
|
)
|
-
|
-
|
||||||||||||
Ardsley
Offshore Fund, Ltd.
|
483,321
|
(3
|
)
|
1.29
|
%
|
483,321
|
(3
|
)
|
-
|
-
|
||||||||||||
Crestview
Capital Master, LLC
|
450,000
|
(4
|
)
|
1.20
|
%
|
450,000
|
(4
|
)
|
-
|
-
|
||||||||||||
QVT
Fund LP
|
426,459
|
(5
|
)
|
1.14
|
%
|
426,459
|
(5
|
)
|
-
|
-
|
||||||||||||
Ardsley
Partners Fund II, L.P.
|
398,028
|
(6
|
)
|
1.07
|
%
|
398,028
|
(6
|
)
|
-
|
-
|
||||||||||||
Evolution
Master Fund Ltd. SPC, Segregated Portfolio M
|
341,250
|
(7
|
)
|
*
|
341,250
|
(7
|
)
|
-
|
-
|
|||||||||||||
Hudson
Bay Fund, LP
|
375,048
|
(8
|
)
|
1.00
|
%
|
298,521
|
(8
|
)
|
76,527
|
*
|
||||||||||||
Credit
Suisse Trust-Small Cap Growth Portfolio
|
294,597
|
(9
|
)
|
*
|
294,597
|
(9
|
)
|
-
|
-
|
|||||||||||||
Highbridge
International LLC
|
284,306
|
(10
|
)
|
*
|
284,306
|
(10
|
)
|
-
|
-
|
|||||||||||||
Iroquois
Master Fund, Ltd.
|
284,306
|
(11
|
)
|
*
|
284,306
|
(11
|
)
|
-
|
-
|
|||||||||||||
Cranshire
Capital, L.P.
|
284,306
|
(12
|
)
|
*
|
284,306
|
(12
|
)
|
-
|
-
|
|||||||||||||
Ardsley
Partners Institutional Fund, L.P.
|
244,503
|
(13
|
)
|
*
|
244,503
|
(13
|
)
|
-
|
-
|
|||||||||||||
Radcliffe
SPC, Ltd. for and on behalf of the Class A Convertible Crossover
Segregated Portfolio
|
225,059
|
(14
|
)
|
*
|
225,059
|
(14
|
)
|
-
|
-
|
|||||||||||||
Shepherd
Investments International, Ltd.
|
225,000
|
(15
|
)
|
*
|
225,000
|
(15
|
)
|
-
|
-
|
|||||||||||||
Enable
Growth Partners LP
|
170,585
|
(16
|
)
|
*
|
170,585
|
(16
|
)
|
-
|
-
|
|||||||||||||
Telluride
Capital Master Fund Ltd.
|
165,000
|
(17
|
)
|
*
|
165,000
|
(17
|
)
|
-
|
-
|
|||||||||||||
Rockmore
Investment Master Fund Ltd.
|
165,000
|
(18
|
)
|
*
|
165,000
|
(18
|
)
|
-
|
-
|
|||||||||||||
Portside
Growth and Opportunity Fund
|
150,000
|
(19
|
)
|
*
|
150,000
|
(19
|
)
|
-
|
-
|
|||||||||||||
SF
Capital Partners Ltd.
|
150,000
|
(20
|
)
|
*
|
150,000
|
(20
|
)
|
-
|
-
|
|||||||||||||
JMG
Capital Partners, LP
|
150,000
|
(21
|
)
|
*
|
150,000
|
(21
|
)
|
-
|
-
|
|||||||||||||
JMG
Triton Offshore Fund, Ltd.
|
150,000
|
(22
|
)
|
*
|
150,000
|
(22
|
)
|
-
|
-
|
|||||||||||||
UBS
O’Connor LLC fbo O’Connor PIPES Corporate Strategies Master
Limited
|
112,500
|
(23
|
)
|
*
|
112,500
|
(23
|
)
|
-
|
-
|
|||||||||||||
Nite
Capital LP
|
112,500
|
(24
|
)
|
*
|
112,500
|
(24
|
)
|
-
|
-
|
|||||||||||||
SDS
Capital Group SPC, Ltd.
|
112,500
|
(25
|
)
|
*
|
112,500
|
(25
|
)
|
-
|
-
|
|||||||||||||
Gryphon
Master Fund, L.P.
|
110,000
|
(26
|
)
|
*
|
110,000
|
(26
|
)
|
-
|
-
|
|||||||||||||
Kamunting
Street Master Fund, Ltd.
|
82,500
|
(27
|
)
|
*
|
82,500
|
(27
|
)
|
-
|
-
|
|||||||||||||
Precept
Capital Master Fund, G.P.
|
82,500
|
(28
|
)
|
*
|
82,500
|
(28
|
)
|
-
|
-
|
|||||||||||||
Stark
Trading
|
75,000
|
(29
|
)
|
*
|
75,000
|
(29
|
)
|
-
|
-
|
|||||||||||||
CAMOFI
Master LDC
|
67,500
|
(30
|
)
|
*
|
67,500
|
(30
|
)
|
-
|
-
|
|||||||||||||
Cordillera
Fund, L.P.
|
56,861
|
(31
|
)
|
*
|
56,861
|
(31
|
)
|
-
|
-
|
|||||||||||||
GSSF
Master Fund, LP
|
55,001
|
(32
|
)
|
*
|
55,001
|
(32
|
)
|
-
|
-
|
|||||||||||||
UBS
O’Connor LLC fbo UBS Global Equity Arbitrage Master
Limited
|
51,500
|
(33
|
)
|
*
|
37,500
|
(33
|
)
|
14,000
|
*
|
|||||||||||||
Credit
Suisse Global Small Cap Fund, Inc.
|
34,500
|
(34
|
)
|
*
|
34,500
|
(34
|
)
|
-
|
-
|
|||||||||||||
Credit
Suisse Trust-Global Small Cap Portfolio
|
34,500
|
(35
|
)
|
*
|
34,500
|
(35
|
)
|
-
|
-
|
|||||||||||||
Enable
Opportunity Partners LP
|
34,116
|
(36
|
)
|
*
|
34,116
|
(36
|
)
|
-
|
-
|
|||||||||||||
Ridgecrest
Partners QP, L.P.
|
30,150
|
(37
|
)
|
*
|
30,150
|
(37
|
)
|
-
|
-
|
|||||||||||||
Civic
Capital Fund I, LLC
|
41,230
|
(38
|
)
|
*
|
28,430
|
(38
|
)
|
12,800
|
*
|
|||||||||||||
Pierce
Diversified Strategy Master Fund LLC, Ena
|
22,745
|
(39
|
)
|
*
|
22,745
|
(39
|
)
|
-
|
-
|
|||||||||||||
Marion
Lynton
|
11,373
|
(40
|
)
|
*
|
11,373
|
(40
|
)
|
-
|
-
|
|||||||||||||
Advantage
Advisors Catalyst Partners L.P.
|
10,500
|
(41
|
)
|
*
|
10,500
|
(41
|
)
|
-
|
-
|
|||||||||||||
Advantage
Advisors Catalyst International Ltd.
|
10,200
|
(42
|
)
|
*
|
10,200
|
(42
|
)
|
-
|
-
|
|||||||||||||
Ridgecrest
Partners Ltd.
|
7,650
|
(43
|
)
|
*
|
7,650
|
(43
|
)
|
-
|
-
|
|||||||||||||
Credit
Suisse Small Cap Growth Fund, Inc.
|
6,000
|
(44
|
)
|
*
|
6,000
|
(44
|
)
|
-
|
-
|
|||||||||||||
Ridgecrest
Partners L.P.
|
1,500
|
(45
|
)
|
*
|
1,500
|
(45
|
)
|
-
|
-
|
(1)
|
Includes
400,000 shares underlying warrants. D. E. Shaw & Co., L.P., as
investment advisor, has voting and investment power over the shares.
Anne
Dinning, Julius Gaudio, Maximilian Stone and Eric Wepsic, or their
designees, exercise voting and investment power over the shares
on behalf
of D. E. Shaw & Co., L.P.
|
(2)
|
Includes
189,538 shares underlying warrants. Heights Capital Management,
Inc., the
authorized agent of Capital Ventures International, has discretionary
authority to vote and dispose of the shares and may be deemed to
be the
beneficial owner of these shares. Martin Kobinger, in his capacity
as
Investment Manager of Heights Capital Management, Inc., may also
be deemed
to have investment discretion and voting power over the shares.
Mr.
Kobinger disclaims any such beneficial ownership of the
shares.
|
(3)
|
Includes
161,107 shares underlying warrants. Power to vote or dispose of
the shares
is held by Philip J. Hempleman as Managing General Partner and
Portfolio
Manager of Ardsley Offshore Fund, Ltd. In addition, an aggregate
of
217,968 shares underlying warrants and an aggregate of 435,936
shares of
common stock are held by Ardsley Partners Fund II, L.P., Ardsley
Partners
Institutional Fund, L.P. and Marion Lynton, which shares are also
offered
under this prospectus, the power to vote or dispose of which is
also held
by Mr. Hempleman.
|
(4)
|
Includes
150,000 shares underlying warrants. Power to vote or dispose of
the shares
is shared by Daniel Warsh, Stewart Flink and Robert Hoyt as Managing
Members of Crestview Capital Master, LLC.
|
(5)
|
Includes
142,153 shares underlying warrants. Management of QVT Fund LP is
vested in
its general partner, QVT Associates GP LLC. QVT Financial LP is
the
Investment Manager for QVT Fund LP and shares voting and investment
control of the shares securities held by QVT Fund LP. QVT Financial
GP LLC
is the general partner of QVT Financial LP and as such has complete
discretion in the management and control of the business affairs
of QVT
Financial LP. The Managing Members of QVT Financial GP LLC are
Daniel
Gold, Lars Bader, Tracy Fu and Nicholas Brumm. Each of QVT Financial
LP,
QVT Financial GP LLC, Daniel Gold, Lars Bader, Tracy Fu and Nicholas
Brumm
disclaims beneficial ownership of the securities held by QVT Fund
LP.
|
(6)
|
Includes
132,676 shares underlying warrants. Power to vote or dispose of
the shares
is held by Philip J. Hempleman as Managing General Partner and
Portfolio
Manager of Ardsley Partners Fund II, L.P. In addition, an aggregate
of
246,399 shares underlying warrants and an aggregate of 492,798
shares of
common stock are held by Ardsley Offshore Fund, Ltd., Ardsley Partners
Institutional Fund, L.P. and Marion Lynton, which shares are also
offered
under this prospectus, the power to vote or dispose of which is
also held
by Mr. Hempleman.
|
(7)
|
Includes
113,750 shares underlying warrants. Power to vote or dispose of
the shares
is held by Michael Lerch as Chief Investment Officer of Evolution
Capital
Management, LLC, the investment advisor of Evolution Master Fund
Ltd. SPC,
Segregated Portfolio M.
|
(8)
|
Includes
99,507 shares underlying warrants. Power to vote or dispose of
the shares
is shared by Yoav Roth, Principal and Portfolio Manager, and John
Doscas,
President, of Hudson Bay Fund LP. Messrs. Roth and Doscas disclaim
beneficial ownership of the securities held by Hudson Bay Fund
LP.
|
(9)
|
Includes
98,199 shares underlying warrants. Power to vote or dispose of
the shares
is held by Laura Granger, as Managing Director and Portfolio Manager
of
Credit Suisse Asset Management, LLC, as Investment Advisor of Credit
Suisse Trust-Small Cap Growth Portfolio. In addition, an aggregate
of
25,000 shares underlying warrants and an aggregate of 50,000 shares
of
common stock are held by Credit
Suisse Global Small Cap Fund, Inc.,
Credit
Suisse Trust-Global Small Cap Portfolio and
Credit
Suisse Small Cap Growth Fund, Inc.,
which shares are also offered under this prospectus, the power
to vote or
dispose of which is also held by Ms. Granger.
|
(10)
|
Includes
94,769 shares underlying warrants. Highbridge Capital Management,
LLC is
the trading manager of Highbridge International LLC and has voting
control
and investment direction over the shares. Glenn Dubin and Henry
Swieca
control Highbridge Capital Management, LLC. Each of Highbridge
Capital
Management, LLC, Glenn Dubin and Henry Swieca disclaim beneficial
ownership of the shares.
|
(11)
|
Includes
94,769 shares underlying warrants. Power to vote or dispose of
the shares
is held by Joshua Silverman as Authorized Signatory of Iroquois
Master
Fund, Ltd. Mr. Silverman disclaims beneficial ownership of the
shares.
|
(12)
|
Includes
94,769 shares underlying warrants. Power to vote or dispose of
the shares
is held by Mitchell P. Kopin as President of Downsview Capital,
Inc., as
General Partner of Cranshire Capital, L.P. Mr. Kopin and Downsview
Capital, Inc. both disclaim beneficial ownership of the
shares.
|
(13)
|
Includes
81,501 shares underlying warrants. Power to vote or dispose of
the shares
is held by Philip J. Hempleman as Managing General Partner and
Portfolio
Manager of Ardsley Partners Institutional Fund, L.P. In addition,
an
aggregate of 297,574 shares underlying warrants and an aggregate
of
595,148 shares of common stock are held by Ardsley Offshore Fund,
Ltd.,
Ardsley Partners Fund II, L.P. and Marion Lynton, which shares
are also
offered under this prospectus, the power to vote or dispose of
which is
also held by Mr. Hempleman.
|
(14)
|
Includes
75,020 shares underlying warrants. Pursuant to an investment management
agreement, RG Capital Management, L.P. serves as the investment
manager of
Radcliffe SPC, Ltd.’s Class A Convertible Crossover Segregated Portfolio.
RGC Management Company, LLC is the general partner of RG Capital
Management, L.P. Steve Katznelson and Gerald Stahlecker serve as
the
managing members of RGC Management Company, LLC. Each of RG Capital
Management, L.P., RGC Management Company, LLC and Messrs. Katznelson
and
Stahlecker disclaims beneficial ownership of the
shares.
|
(15)
|
Includes
75,000 shares underlying warrants. Power to vote or dispose of
the shares
is held by Michael A. Roth and Brian J. Stark, both of whom disclaim
beneficial ownership of the shares. In addition, an aggregate of
75,000
shares underlying warrants and 150,000 shares of common stock are
held by
SF Capital Partners Ltd. and Stark Trading, which shares are also
offered
under this prospectus, the power to vote or dispose of which is
also held
by Michael A. Roth and Brian J. Stark, both of whom disclaim beneficial
ownership of the shares.
|
(16)
|
Includes
56,862 shares underlying warrants. Power to vote or dispose of
the shares
is held by Mitch Levine as Managing Member of Enable Capital Management,
LLC as Manager of Enable Growth Partners LP. In addition, an aggregate
of
18,954 shares underlying warrants and an aggregate of 37,907 shares
of
common stock are held by Enable Opportunity Partners LP and Pierce
Diversified Strategy Master Fund LLC, Ena,
which shares are also offered under this prospectus, the power
to vote or
dispose of which is also held by Mr. Levine. Enable Capital, LLC,
an
affiliate of Enable Growth Partners LP, has been one of our financial
advisors since August 2004, during which period it offered informal
advice
on various financial and capital raising matters. In connection
with our
engagement of Cowen and Company, LLC to act as our exclusive placement
agent in the private offering, the shares resulting from which
are offered
for resale hereunder, Cowen and Company, LLC agreed, at our request,
to
engage Enable Capital, LLC as an advisor in connection with the
private
offering and pay Enable Capital, LLC 15% of the placement agent
fees
earned by Cowen and Company, LLC in connection with the private
offering.
Cowen and Company, LLC paid Enable Capital, LLC approximately $1.1
million
in June 2006 in satisfaction of this obligation.
|
(17)
|
Includes
55,000 shares underlying warrants. Telluride Capital Master Fund
Ltd. is a
private investment fund that is owned by all of its investors and
is
managed by Telluride Asset Management LLC. Telluride Asset Management
LLC,
whose sole member is Peter Hajas, has voting and investment control
over
the shares. Peter Hajas and Telluride Asset Management LLC disclaim
beneficial ownership of the shares.
|
(18)
|
Includes
55,000 shares underlying warrants. Power to vote or dispose of
the shares
is held by Bruce Bernstein as Managing Member of Rockmore Investment
Master Fund Ltd.
|
(19)
|
Includes
50,000 shares underlying warrants. Ramius Capital Group, LLC is
the
investment advisor of Portside Growth and Opportunity Fund and
consequently has voting control and investment discretion over
the shares.
Ramius Capital Group, LLC disclaims beneficial ownership of the
shares.
Peter A. Cohen, Morgan B. Stark, Thomas W. Strauss and Jeffrey
M. Solomon
are the sole managing members of C4S & Co., LLC, the sole managing
member of Ramius Capital Group, LLC. As a result, Messrs. Cohen,
Stark,
Strauss and Solomon may be considered beneficial owners of any
shares
deemed to be beneficially owned by Ramius Capital Group, LLC. Messrs.
Cohen, Stark, Strauss and Solomon disclaim beneficial ownership
of the
shares.
|
(20)
|
Includes
50,000 shares underlying warrants. Power to vote or dispose of
the shares
is held by Michael A. Roth and Brian J. Stark, both of whom disclaim
beneficial ownership of the shares. In addition, an aggregate of
100,000
shares underlying warrants and 200,000 shares of common stock are
held by
Shepherd Investments International Ltd. and Stark Trading, which
shares
are also offered under this prospectus, the power to vote or dispose
of
which is also held by Michael A. Roth and Brian J. Stark, both
of whom
disclaim beneficial ownership of the
shares.
|
(21)
|
Includes
50,000 shares underlying warrants. The general partner of JMG Capital
Partners, L.P. is JMG Capital Management, LLC. The equity interests
of JMG
Capital Management, LLC are owned by JMG Capital Management, Inc.
and
Asset Alliance Holding Corp. Jonathan M. Glaser is the Executive
Officer
and Director of JMG Capital Management, Inc. and holds the power
to voting
and dispose of the shares. In addition, 50,000 shares underlying
warrants
and 100,000 shares of common stock are held by JMG Triton Offshore
Fund,
Ltd., which shares are also offered under this prospectus, the
power to
vote or dispose of which is shared by Mr. Glaser and Roger
Richter.
|
(22)
|
Includes
50,000 shares underlying warrants. The investment manager of JMG
Triton
Offshore Fund, Ltd. is Pacific Assets Management LLC. The equity
interests
of Pacific Assets Management LLC are owned by Pacific Capital Management,
Inc. and Asset Alliance Holding Corp. The equity interests of Pacific
Capital Management, Inc. are owned by Roger Richter, Jonathan M.
Glaser
and Daniel A. David. Messrs. Glaser and Richter share the power
to vote or
dispose of the shares. In addition, 50,000 shares underlying warrants
and
100,000 shares of common stock are held by JMG Capital Partners,
LP, which
shares are also offered under this prospectus, the power to vote
or
dispose of which is held by Mr. Glaser.
|
(23)
|
Includes
37,500 shares underlying warrants. Power to vote or dispose of
the shares
is held by Jeffrey F. Putnam as Executive Director of UBS O’Connor LLC,
the Investment Manager of O’Connor PIPES Corporate Strategies Master
Limited.
|
(24)
|
Includes
37,500 shares underlying warrants. Power to vote or dispose of
the shares
is held by Keith Goodman as Manager of Nite Capital LLC, as General
Partner of Nite Capital LP.
|
(25)
|
Includes
37,500 shares underlying warrants. Power to vote or dispose of
the shares
is held by Steve Derby as Sole Managing Member of SDS Management,
LLC, the
Investment Manager of SDS Capital Group SPC, Ltd. Mr. Derby is
also a
Director of SDS Capital Group SPC, Ltd. Each of Mr. Derby and SDS
Management, LLC disclaims beneficial ownership of the
shares.
|
(26)
|
Includes
36,667 shares underlying warrants. Power to vote or dispose of
the shares
is held by E. B. Lyon, IV as Authorized Agent of Gryphon Master Fund,
L.P.
|
(27)
|
Includes
27,500 shares underlying warrants. Power to vote or dispose of
the shares
is held by Allan Teh as Managing Member of Kamunting Street Management,
LLC, the General Partner of Kamunting Street Capital Management,
L.P., the
Investment Manager of Kamunting Street Master Fund,
Ltd.
|
(28)
|
Includes
27,500 shares underlying warrants. Power to vote or dispose of
the shares
is held by D. Blair Baker as President and CEO of Precept Management,
LLC
as General Partner of Precept Capital Management, LP as agent and
attorney-in-fact of Precept Capital Master Fund, G.P.
|
(29)
|
Includes
25,000 shares underlying warrants. Power to vote or dispose of
the shares
is shared by Michael A. Roth and Brian J. Stark, both of whom disclaim
beneficial ownership of the shares. In addition, an aggregate of
125,000
shares underlying warrants and 250,000 shares of common stock are
held by
Shepherd Investments International Ltd. and SF Capital Partners
Ltd.,
which shares are also offered under this prospectus, the power
to vote or
dispose of which is also held by Michael A. Roth and Brian J. Stark,
both
of whom disclaim beneficial ownership of the shares.
|
(30)
|
Includes
22,500 shares underlying warrants. Power to vote or dispose of
the shares
is held by Richard Smithline as Director of CAMOFI Master
LDC.
|
(31)
|
Includes
18,954 shares underlying warrants. Power to vote or dispose of
the shares
is shared by James P. Andrew and Stephen J. Carter as Co-Chief
Executive
Officers of Andrew Carter Capital, Inc. as General Partner of ACCF
GenPar,
L.P. as General Partner of Cordillera Fund, L.P.
|
(32)
|
Includes
18,334 shares underlying warrants. Power to vote or dispose of
the shares
is held by Tom C. Davis as Authorized Agent of GSSF Master Fund,
LP.
|
(33)
|
Includes
12,500 shares underlying warrants. Power to vote or dispose of
the shares
is held by George Locasto as Managing Director of UBS
O’Connor LLC, the Investment Manager of UBS Global Equity Arbitrage
Master
Limited.
|
(34)
|
Includes
11,500 shares underlying warrantsPower to vote or dispose of the
shares is
held by Laura Granger, as Managing Director and Portfolio Manager
of
Credit Suisse Asset Management, LLC, as Investment Advisor of Credit
Suisse Global Small Cap Fund, Inc.
In addition, an aggregate of 111,699 shares underlying warrants
and an
aggregate of 223,398 shares of common stock are held by Credit
Suisse
Trust-Small Cap Growth Portfolio, Credit
Suisse Trust-Global Small Cap Portfolio and
Credit
Suisse Small Cap Growth Fund, Inc.,
which shares are also offered under this prospectus, the power
to vote or
dispose of which is also held by Ms.
Granger.
|
(35)
|
Includes
11,500 shares underlying warrants. Power to vote or dispose of
the shares
is held by Laura Granger, as Managing Director and Portfolio Manager
of
Credit Suisse Asset Management, LLC, as Investment Advisor of Credit
Suisse Trust-Global Small Cap Portfolio. In
addition, an aggregate of 111,699 shares underlying warrants and
an
aggregate of 223,398 shares of common stock are held by Credit
Suisse
Trust-Small Cap Growth Portfolio, Credit
Suisse Global Small Cap Fund, Inc. and
Credit
Suisse Small Cap Growth Fund, Inc.,
which shares are also offered under this prospectus, the power
to vote or
dispose of which is also held by Ms. Granger.
|
(36)
|
Includes
11,372 shares underlying warrants. Power to vote or dispose of
the shares
is held by Mitch Levine as Managing Member of Enable Capital Management,
LLC as Manager of Enable Opportunity Partners LP. In addition,
an
aggregate of 64,444 shares underlying warrants and an aggregate
of 128,886
shares of common stock are held by Enable Growth Partners LP and
Pierce
Diversified Strategy Master Fund LLC, Ena,
which shares are also offered under this prospectus, the power
to vote or
dispose of which is also held by Mr. Levine. Enable Capital, LLC,
an
affiliate of Enable Opportunity Partners LP, has been one of our
financial
advisors since August 2004, during which period it offered informal
advice
on various financial and capital raising matters. In connection
with our
engagement of Cowen and Company, LLC to act as our exclusive placement
agent in the private offering, the shares resulting from which
are offered
for resale hereunder, Cowen and Company, LLC agreed, at our request,
to
engage Enable Capital, LLC as an advisor in connection with the
private
offering and pay Enable Capital, LLC 15% of the placement agent
fees
earned by Cowen and Company, LLC in connection with the private
offering.
Cowen and Company, LLC paid Enable Capital, LLC approximately $1.1
million
in June 2006 in satisfaction of this obligation.
|
(37)
|
Includes
10,050 shares underlying warrants. Power to vote or dispose of
the shares
is held by Sanford B. Prater as Managing Member of Ridgecrest Capital,
LLC, the General Partner of Ridgecrest Partners QP, L.P. In addition,
an
aggregate of 9,950 shares underlying warrants and an aggregate
of 19,900
shares of common stock are held by Advantage Advisors Catalyst
Partners
L.P., Advantage
Advisors Catalyst International Ltd.,
Ridgecrest Partners Ltd. and Ridgecrest Partners L.P., which shares
are
also offered under this prospectus, the power to vote or dispose
of which
is also held by Mr. Prater.
|
(38)
|
Includes
9,477 shares underlying warrants. Power to vote or dispose of the
shares
is held by John F. DeSantis as President of Civic Capital Fund
I,
LLC.
|
(39)
|
Includes
7,582 shares underlying warrants. Power to vote or dispose of the
shares
is held by Mitch Levine as Managing Member of Enable Capital Management,
LLC as Manager of Pierce
Diversified Strategy Master Fund LLC, Ena. In
addition, an aggregate of 68,234 shares underlying warrants and
an
aggregate of 136,467 shares of common stock are held by Enable
Growth
Partners LP and Enable Opportunity Partners LP, which shares are
also
offered under this prospectus, the power to vote or dispose of
which is
also held by Mr. Levine. Enable Capital, LLC, an affiliate of Pierce
Diversified Strategy Master Fund LLC, Ena,
has been one of our financial advisors since August 2004, during
which
period it offered informal advice on various financial and capital
raising
matters. In connection with our engagement of Cowen and Company,
LLC to
act as our exclusive placement agent in the private offering, the
shares
resulting from which are offered for resale hereunder, Cowen and
Company,
LLC agreed, at our request, to engage Enable Capital, LLC as an
advisor in
connection with the private offering and pay Enable Capital, LLC
15% of
the placement agent fees earned by Cowen and Company, LLC in connection
with the private offering. Cowen and Company, LLC paid Enable Capital,
LLC
approximately $1.1 million in June 2006 in satisfaction of this
obligation.
|
(40)
|
Includes
3,791 shares underlying warrants. Power to vote or dispose of the
shares
is held by Philip J. Hempleman as Investment Advisor to Marion
Lynton.
In
addition, an aggregate of 375,284 shares underlying warrants and
an
aggregate of 750,568 shares of common stock are held by Ardsley
Offshore
Fund, Ltd., Ardsley Partners Fund II, L.P. and Ardsley Partners
Institutional Fund, L.P., which shares are also offered under this
prospectus, the power to vote or dispose of which is also held
by Mr.
Hempleman.
|
(41)
|
Includes
3,500 shares underlying warrants. Power to vote or dispose of the
shares
is held by Sanford B. Prater as Portfolio Manager of Advantage
Advisors
Catalyst Partners L.P. In addition, an aggregate of 16,500 shares
underlying warrants and an aggregate of 33,000 shares of common
stock are
held by Ridgecrest Partners QP, L.P., Ridgecrest Partners Ltd.,
Advantage
Advisors Catalyst International Ltd.
and Ridgecrest Partners L.P., which shares are also offered under
this
prospectus, the power to vote or dispose of which is also held
by Mr.
Prater.
|
(42)
|
Includes
3,400 shares underlying warrants. Power to vote or dispose of the
shares
is held by Sanford B. Prater as Portfolio Manager of Advantage
Advisors Catalyst International Ltd. In
addition, an aggregate of 16,600 shares underlying warrants and
an
aggregate of 33,200 shares of common stock are held by Ridgecrest
Partners
QP, L.P., Advantage Advisors Catalyst Partners L.P., Ridgecrest
Partners Ltd.
and Ridgecrest Partners L.P., which shares are also offered under
this
prospectus, the power to vote or dispose of which is also held
by Mr.
Prater.
|
(43)
|
Includes
2,550 shares underlying warrants. Power to vote or dispose of the
shares
is held by Sanford B. Prater as Managing Member of Ridgecrest Investment
Management LLC, the Investment Manager of Ridgecrest
Partners Ltd. In
addition, an aggregate of 17,450 shares underlying warrants and
an
aggregate of 34,900 shares of common stock are held by Ridgecrest
Partners
QP, L.P., Advantage Advisors Catalyst Partners L.P., Advantage
Advisors Catalyst International Ltd. and
Ridgecrest Partners L.P., which shares are also offered under this
prospectus, the power to vote or dispose of which is also held
by Mr.
Prater.
|
(44)
|
Includes
2,000 shares underlying warrants. Power to vote or dispose of the
shares
is held by Laura Granger, as Managing Director and Portfolio Manager
of
Credit Suisse Asset Management, LLC, as Investment Advisor of Credit
Suisse Small Cap Growth Fund, Inc. In
addition, an aggregate of 121,199 shares underlying warrants and
an
aggregate of 242,398 shares of common stock are held by Credit
Suisse
Trust-Small Cap Growth Portfolio, Credit
Suisse Global Small Cap Fund, Inc.
and Credit
Suisse Trust-Global Small Cap Portfolio,
which shares are also offered under this prospectus, the power
to vote or
dispose of which is also held by Ms. Granger.
|
(45)
|
Includes
500 shares underlying warrants. Power to vote or dispose of the
shares is
held by Sanford B. Prater as Managing Member of Ridgecrest Capital,
LLC,
the General Partner of Ridgecrest Partners L.P. In addition, an
aggregate
of 19,500 shares underlying warrants and an aggregate of 39,000
shares of
common stock are held by Ridgecrest Partners QP, L.P., Advantage
Advisors
Catalyst Partners L.P., Advantage
Advisors Catalyst International Ltd. and Ridgecrest
Partners Ltd., which shares are also offered under this prospectus,
the
power to vote or dispose of which is also held by Mr.
Prater.
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
·
|
block
trades in which the broker-dealer will attempt to sell the shares
as agent
but may position and resell a portion of the block as principal
to
facilitate the transaction;
|
·
|
purchases
by a broker-dealer as principal and resale by the broker-dealer
for its
account;
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
·
|
privately
negotiated transactions;
|
·
|
short
sales;
|
·
|
broker-dealers
may agree with the selling security holders to sell a specified
number of
such shares at a stipulated price per share;
|
·
|
a
combination of any such methods of sale; and
|
·
|
any
other method permitted pursuant to applicable
law.
|
·
|
Our
current report on Form 8-K for June 26, 2006, as filed with the
Commission
on June 27, 2006 (File No. 0-21467);
|
·
|
Our
current report on Form 8-K for June 20, 2006, as filed with the
Commission
on June 21, 2006;
|
·
|
Our
current report on Form 8-K for May 25, 2006, as filed with the
Commission
on May 31, 2006;
|
·
|
Our
quarterly report on Form 10-Q for the three months ended March
31, 2006,
as filed with the Commission on May 15, 2006;
|
·
|
Our
current report on Form 8-K for April 19, 2006, as filed with the
Commission on April 24, 2006;
|
·
|
Our
annual report on Form 10-KSB for the year ended December 31, 2005,
as
filed with the Commission on April 14, 2006;
|
·
|
Our
current report on Form 8-K for April 13, 2006, as filed with the
Commission on April 19, 2006;
|
·
|
Our
current report on Form 8-K for January 26, 2006, as filed with
the
Commission on February 1, 2006; and
|
·
|
The
description of our capital stock contained in Amendment No. 3 to
Registration Statement on Form S-1 (Reg. No. 333-127714), as filed
with
the Commission on November 30, 2005, including any amendments or
reports
filed for the purpose of updating such
description.
|