As
filed with the Securities and Exchange Commission on March 28,
2006
|
Registration
No.
333-124096
|
Delaware
(State
or other jurisdiction of
incorporation
or organization)
|
3845
(Primary
Standard Industrial
Classification
Code Number)
|
22-2457487
(I.R.S.
Employer
Identification
Number)
|
One
University Plaza, Suite 400
Hackensack,
New Jersey 07601
(201)
342-0900
(Address
and Telephone Number of Principal Executive Offices and Principal
Place of
Business)
|
||
Jonathan
Joels
Treasurer
and Chief Financial Officer
One
University Plaza, Suite 400
Hackensack,
New Jersey 07601
(201)
342-0900
(Name,
Address and Telephone Number of Agent For Service)
|
||
Copies to: Bruce
A. Rich, Esq.
Thelen
Reid & Priest LLP
875
Third Avenue
New
York, New York 10022
(212)
603-2000
|
||
Approximate
Date of Proposed Sale to the Public: from
time to time after the effective date of this Registration Statement
as
determined by market conditions and other
factors.
|
Securities
Offered by Selling Stockholders
|
3,578,427
shares, includes 808,396 shares subject
to warrants.
|
Common
Stock to be Outstanding after the Offering
|
4,130,069
shares, assuming the selling stockholders exercise all their options
and
warrants.
|
Use
of Proceeds
|
We
will receive no proceeds from the sale of common stock by the selling
stockholders. However, we will receive $4,050,555 if all of the
warrants
for underlying shares included in this prospectus are exercised.
We will
use these proceeds for general corporate purposes.
|
OTC
Electronic Bulletin Board Symbol
|
“CAPS”
|
Year
Ended September 30
|
Three
Months Ended
December 31 (Unaudited) |
||||||||||||
Summary
of Operations
|
2005
|
2004
|
2005
|
2004
|
|||||||||
Total
revenues
|
$
|
848,802
|
$
|
885,461
|
$
|
240,888
|
$
|
262,659
|
|||||
Loss
from continuing operations
|
(2,538,408
|
)
|
(3,249,963
|
)
|
(693,438
|
)
|
(797,072
|
)
|
|||||
Loss
from operations of discontinued Strax Business
|
-
|
(105,806
|
)
|
-
|
-
|
||||||||
Net
loss
|
(2,538,408
|
)
|
(3,355,769
|
)
|
(693,438
|
)
|
(797,072
|
)
|
|||||
Loss
from continuing operations per share
|
(1.16
|
)
|
(3.18
|
)
|
(0.21
|
)
|
(0.78
|
)
|
|||||
Income
(loss) from discontinued operations per share
|
-
|
(0.10
|
)
|
-
|
-
|
||||||||
Net
loss per common share (basic and diluted)
|
$
|
(1.16
|
)
|
$
|
(3.28
|
)
|
$
|
(0.21
|
)
|
$
|
(0.78
|
)
|
|
Weighted
average common shares outstanding, basic and diluted
|
2,288,543
|
1,022,328
|
3,321,673
|
1,022,328
|
Statement
of Financial Position
|
As
of
September 30, 2005 |
As
of
December 31, 2005 (Unaudited) |
|||||
Cash
and cash equivalents
|
$
|
1,257,158
|
$
|
620,934
|
|||
Total
assets
|
3,173,137
|
2,506,755
|
|||||
Working
capital
|
1,705,187
|
1,086,326
|
|||||
Long-term
debt
|
-
|
-
|
|||||
Stockholders’
equity
|
2,795,540
|
2,102,102
|
Fiscal
Period
|
Fiscal
Year Ending
9/30/06
|
Fiscal
Year Ending
9/30/05
|
Fiscal
Year Ended
9/30/04
|
|||
High
|
Low
|
High
|
Low
|
High
|
Low
|
|
First
Quarter
|
$2.45
|
$1.05
|
$3.80
|
$2.20
|
$6.00
|
$2.20
|
Second
Quarter
|
2.35
|
1.30
|
6.80
|
2.60
|
5.00
|
2.00
|
Third
Quarter
|
—
|
—
|
5.00
|
2.10
|
6.00
|
1.00
|
Fourth
Quarter
|
—
|
—
|
2.98
|
2.00
|
5.00
|
2.20
|
a)
|
No
need to pack containers of medical
waste
|
b)
|
No
need to transport infectious waste through facilities with patients
|
c)
|
No
need to ship infectious medical waste on public
roads
|
d)
|
Environmentally
sound approach for disinfection - uses biodegradable chemicals; does
not
release smoke, odor, steam or other emissions to the air; removes
the need
for incineration
|
e)
|
Noise
level during cycle is approx. 70.1dB(A), regarded below levels of
noise
safety concerns by most government
regulations
|
a)
|
Reduce
the exposure to infectious waste by limiting the time an employee
handles,
stores and packs the waste
|
b)
|
No
need to administer and track waste that is shipped from the
facility
|
c)
|
Ease
of use
|
d)
|
Employee
can continue to perform their regular functions while the SteriMed
treatment cycle is operational
|
a)
|
Easily
installed requiring only electricity, water and sewage outlet. No
special
ventilation or lighting required
|
b)
|
Can
fit through regular doorway
|
c)
|
Limited
training required for operators
|
d)
|
Due
to size, units can be strategically placed in a health care facility
near
high waste generation sites
|
a)
|
Less
labor
time
|
b)
|
No
transportation
costs to incineration site
|
c)
|
Our
preferred business model is to rent the SteriMed Systems to U.S.
facilities generating the infectious clinical waste. This model obviates
the need for capital investment by users, and should also reduce
previous
operating expenses in disposing of medical
waste
|
d)
|
Ability
to fix costs for a given period of time, avoiding future price
increases
and surcharges
|
a)
|
Enable
infectious
medical waste generating facilities to replace existing systems
while
meeting federal, state and local environmental as well as health
regulations.
|
File
No.
|
Country
|
Application
No.
|
Application
Date
|
Trademark
No.
|
Renewal
Date
|
99200
|
Israel
|
113,697
|
7/20/1997
|
113,697
|
07/20/2007
|
99207
|
U.S.A.
|
75/904,419
|
01/28/2000
|
2,724,738
|
10/20/2013
|
99208
|
Canada
|
1035659
|
11/12/1999
|
TMA
596,538
|
12/04/2018
|
99209
|
CTM(European)
|
1380146
|
11/11/1999
|
1380146
|
11/11/2009
|
99210
|
Japan
|
11-103145
|
11/12/1999
|
4462258
|
03/23/2011
|
99211
|
Australia
|
813208
|
11/09/1999
|
813208
|
11/09/2009
|
99212
|
Mexico
|
472508
|
02/23/2001
|
701862
|
02/23/2011
|
99214
|
Russia
|
99719243
|
11/18/1999
|
209618
|
11/18/2009
|
99216
|
Hungary
|
m-9905278
|
11/10/1999
|
165158
|
11/10/2009
|
99218
|
Poland
|
Z-209695
|
11/10/1999
|
148086
|
11/10/2009
|
File
No.
|
Country
|
Application
No.
|
Application
Date
|
Trademark
No.
|
Renewal
Date
|
99200
|
Israel
|
131893
|
11/01/1999
|
131893
|
11/01/2006
|
99201
|
U.S.A.
|
75/904,150
|
01/29/2000
|
2,713,884
|
05/06/2013
|
99202
|
Canada
|
1035658
|
11/12/1999
|
TMA
596,329
|
12/03/2018
|
99203
|
CTM(European)
|
1380195
|
11/11/1999
|
1380195
|
11/11/2009
|
99204
|
Japan
|
11-103144
|
11/12/1999
|
4562185
|
04/19/2007
|
99205
|
Australia
|
813207
|
11/09/1999
|
813207
|
11/09/2009
|
99206
|
Mexico
|
412940
|
02/23/2001
|
656603
|
02/25/2010
|
99213
|
Russia
|
99719294
|
11/18/1999
|
200276
|
11/17/2009
|
99215
|
Hungary
|
M-9905279
|
11/10/1999
|
164682
|
11/10/2009
|
99217
|
Poland
|
Z-209696
|
11/10/1999
|
145760
|
11/10/2009
|
File
No.
|
Country
|
Application
No.
|
Application
Date
|
Patent
No.
|
Patent
Date
|
Valid
Until
|
9346
|
Israel
|
108,311
|
01/10/1994
|
108,311
|
12/23/1999
|
01/10/2014
|
9452
|
Australia
|
10096/95
|
01/09/1995
|
684,323
|
04/2/1998
|
01/09/2015
|
9453
|
Japan
|
7-011844
|
01/23/1995
|
3058401
|
04/21/2000
|
01/27/2015
|
9454
|
U.S.A.
|
08/369,533
|
01/05/1995
|
5,620,654
|
04/15/1997
|
04/15/2014
|
9456
|
Canada
|
2,139,689
|
01/06/1995
|
2,139,689
|
10/5/1999
|
01/06/2015
|
9455
|
Europe
|
95630001.6
|
01/05/1995
|
EP0662346
|
03/28/2001
|
01/05/2015
|
File
No.
|
Country
|
Application
No.
|
Application
Date
|
Patent
No.
|
Patent
Date
|
Valid
Until
|
PCT
|
PCT/IL02/00093
|
02/04/2002
|
WO2002/062479
A1
|
N/A
|
N/A
|
|
2337
|
Australia
|
2002230065
|
02/04/2002
|
Pending*
|
Pending
|
02/04/2022
|
2338
|
Brazil
|
200300398
|
07/31/2003
|
Pending*
|
Pending
|
02/04/2022
|
2339
|
Mexico
|
PA/a/2003/006946
|
08/04/2003
|
Pending*
|
Pending
|
02/04/2022
|
2340
|
Russia
|
2003127023
|
09/04/2003
|
Pending*
|
Pending
|
02/04/2022
|
2341
|
So.
Africa
|
2003/5602
|
07/21/2003
|
2003/5602
|
09/23/2003
|
02/04/2022
|
2342
|
Canada
|
2437219
|
08/01/2003
|
Pending*
|
Pending
|
02/04/2022
|
2343
|
China
|
02806986.2
|
09/22/2003
|
Pending*
|
Pending
|
02/04/2022
|
2712
|
Hong
Kong
|
4106248.3
|
08/20/2004
|
Pending*
|
Pending
|
N/A
|
2344
|
India
|
01389/chenp/03
|
09/02/2003
|
Pending*
|
Pending
|
02/04/2022
|
2373
|
USA
|
09/824,685
|
04/04/2001
|
6494391
|
12/17/2002
|
04/04/2021
|
2313/354
|
Europe
|
02711185.5
|
09/05/2003
|
P210477PCT/EP
|
Pending
|
02/04/2022
|
Name
|
Age
|
Position
|
Director
Since
|
George
Aaron
|
53
|
Chairman
of the Board, President and Chief Executive Officer
|
1999
|
Jonathan
Joels
|
49
|
Chief
Financial Officer, Treasurer, Secretary and Director
|
1999
|
Elliott
Koppel
|
62
|
VP
Sales and Marketing
|
—
|
Sol
Triebwasser, Ph.D. (1)(2)
|
84
|
Director
|
1984
|
Jeffrey
L. Hymes, M.D. (1)(2)
|
53
|
Director
|
2004
|
Annual
Compensation
|
Long
Term Compensation
|
|||||||
Awards
|
Payouts
|
|||||||
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Other
Annual Compensation
($)
|
Restricted
Stock
Award(s) ($)
|
Securities
Underlying Options SARs
(#)
|
LTIP
Payouts ($)
|
All
Other compensation
($)
|
George
Aaron
President/CEO
|
2005
2004
2003
|
240,000
240,000
240,000
|
-0-
-0-
160,000
|
-0-
-0-
-0-
|
-0-
-0-
-0-
|
-0-
-0-
-0-
|
-0-
-0-
-0-
|
-0-
-0-
-0-
|
Jonathan
Joels
CFO
|
2005
2004
2003
|
176,000
176,000
176,000
|
-0-
-0-
112,000
|
-0-
-0-
-0-
|
-0-
-0-
-0-
|
-0-
-0-
-0-
|
-0-
-0-
-0-
|
-0-
-0-
-0-
|
Elliott
Koppel
|
2005
2004
2003
|
92,000
92,000
92,000
|
-0-
-0-
28,000
|
-0-
-0-
-0-
|
-0-
-0-
-0-
|
-0-
5,000
-0-
|
-0-
-0-
-0-
|
-0-
-0-
-0-
|
Individual
Grants
|
||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
Name
|
Number
of Securities Underlying Options/
SARs
Granted (#)
|
%
of Total Options/
SARS
Granted to
Employee(s)
in
Fiscal Year
|
Exercise
on Base
Price
($/sh)
|
Expiration
Date
|
George
Aaron
|
-0-
|
-0-
|
-0-
|
-0-
|
Jonathan
Joels
|
-0-
|
-0-
|
-0-
|
-0-
|
Elliott
Koppel
|
-0-
|
-0-
|
-0-
|
-0-
|
Fiscal
Year End Option Value
|
||
Name
|
Number
of Securities
Underlying Unexercised Options at Sept. 30, 2005 Exercisable/Unexercisable |
Value
of Unexercised In-the-
Money Options At Sept. 30, 2005 Exercisable ($) |
George
Aaron
|
20,000/0
|
$-0-
|
Jonathan
Joels
|
20,000/0
|
$-0-
|
Elliott
Koppel
|
20,000/0
|
$-0-
|
Name
of
Beneficial
Owner*
|
Position
with Company
|
Amount
and
Nature of Beneficial Ownership (1) of Common Stock |
Amount
of
Nature and Beneficial Ownership (1) of Preferred Stock |
Percentage
of Securities ***
|
Austin
W. Marxe and David M. Greenhouse
527 Madison Avenue
New York, NY 10022
|
Holder of over five percent | 2,961,342(2) | 60.4% | |
General
Electric Company
Medical
Services Division
3000
No. Grandview Blvd.
Waukesha
WI 53188
|
None
|
57,989(3)
|
27,000
|
1.7%
|
Shrikant
Mehta
Combine
International
354
Indusco Court
Troy,
Michigan 48083
|
Holder
of over five percent
|
210,894
|
-
|
6.4%
|
George
Aaron
|
Chairman
of the Board; Chief
Executive Officer; President
|
260,012
(4)
|
-
|
7.8%
|
Jonathan
Joels
|
Director;
Chief Financial
Officer; Vice President; Treasurer; Secretary
|
255,226(5)
|
-
|
7.6%
|
Elliott
Koppel
|
VP
Sales & Marketing
|
24,444(6)
|
-
|
**
|
Sol
Triebwasser, Ph.D.
|
Director
|
5,495(7)
|
-
|
**
|
Jeffrey
L. Hymes, M.D.
|
Director
|
2,500(8)
|
-
|
**
|
All
executive officers and Directors as a group (5 persons)
|
547,677(9)
|
-
|
16.4%
|
*
|
Address
of all holders except Special Situations Private Equity Fund, L.P.,
Special Situations Fund III, L.P. and Mr. Mehta is c/o Caprius
Inc., One
University Plaza, Hackensack, New Jersey
07601.
|
**
|
Less
than one percent (1%)
|
***
|
Does
not include the Series B Preferred Stock, as it is non-voting except
on
matters directly related to such
series.
|
(1)
|
Includes
voting and investment power, except where otherwise noted. The
number of
shares beneficially owned includes shares each beneficial owner
and the
group has the right to acquire within 60 days of March 1, 2006
pursuant to
stock options, warrants and convertible
securities.
|
(2)
|
Consists
of (i) 1,034,482 shares, 581,703 shares underlying warrants presently
exercisable and 604,830 shares underlying Series D Convertible
Preferred
Stock held by Special Situations Private Equity Fund, L.P., (ii)
317,037
shares, 178,307 shares underlying warrants presently exercisable
and
185,480 shares underlying Series D Convertible Preferred Stock
held by
Special Situations Fund III, QP, L.P. and (iii) 27,790 shares,
15,593
shares underlying warrants presently exercisable and 16,120 shares
underlying Series D Preferred Stock held by Special Situations
Fund III,
L.P. MGP Advisors Limited ("MGP") is the general partner of Special
Situations Fund III, QP, L.P. and Special Situations Fund III,
L.P. AWM
Investment Company, Inc. ("AWM") is the general partner of MGP.
MG
Advisers, L.L.C. ("MG") is the general partner of and investment
adviser
to the Special Situations Private Equity Fund, L.P. Austin W. Marxe
and
David M. Greenhouse are the principal owners of MGP, AWM and MG.
Through their control of MGP, AWM, and MG, Messrs. Marxe and Greenhouse
share voting and investment control over the portfolio securities
of each
of the funds listed above.
|
(3)
|
Includes
57,989 shares underlying 27,000 shares of Series B Preferred Stock.
|
(4)
|
Includes
(i) 353 shares in retirement accounts, (ii) 8,200 shares underlying
warrants presently exercisable, (iii) 5 shares jointly owned with
his wife
and (iv) 20,000 shares underlying options presently exercisable
and
excludes 100,000 shares underlying options which are currently
not
exercisable
|
(5)
|
Includes
(i) 48,000 shares as trustee for his children, (ii) 8,618 shares
underlying warrants presently exercisable, (iii) 20,000 shares
underlying
options presently exercisable and (iv) 17,241 shares in a retirement
account, and excludes 100,000 shares underlying options which are
currently not exercisable.
|
(6)
|
Includes
(i) 3,894 shares underlying warrants and (ii) 20,000 shares underlying
options presently exercisable, and excludes 25,000 shares underlying
options which are currently not
exercisable.
|
(7)
|
Includes
5,425 shares underlying options presently exercisable, and excludes
20,000
shares underlying options which are currently not
exercisable.
|
(8)
|
Includes
2,500 shares underlying options presently exercisable and excludes
21,250
shares underlying options which are currently not
exercisable.
|
(9)
|
Includes
(i) 20,712 shares underlying warrants and (ii) 67,925 shares underlying
options presently exercisable, and excludes 266,250 shares underlying
options which are currently not
exercisable.
|
Name(1)
|
Shares
Beneficially Owned
Prior To Offering(2) |
|
Percent
Beneficially Owned Before Offering
|
Shares
to
be
Offered |
Amount
Beneficially Owned After Offering(3)
|
|
Percent
Beneficially Owned After Offering
|
|||||||||
George
Aaron
|
260,012(4
|
)
|
7.8
|
%
|
240,012
|
20,000
|
*
|
|||||||||
Diana
Anderson
|
2,000(5
|
)
|
*
|
2,000
|
-
|
*
|
||||||||||
Avenue
Asset Partners
|
18,310
|
*
|
18,310
|
-
|
*
|
|||||||||||
William
Bartholomay
|
18,344
|
*
|
18,344
|
-
|
*
|
|||||||||||
Roberto
Bianchi
|
18,907(6
|
)
|
*
|
18,907
|
-
|
*
|
||||||||||
Bonanza
Trust
|
36,701(5
|
)
|
*
|
29,250
|
7,451
|
*
|
||||||||||
Carcap
Co. LLC
|
9,172
|
*
|
9,172
|
-
|
*
|
|||||||||||
Chicago
Investments Inc.
|
18,344
|
*
|
18,344
|
-
|
*
|
|||||||||||
Marc
A. Cohen
|
9,172
|
*
|
9,172
|
-
|
*
|
|||||||||||
Robert
Cohen
|
24,137(7
|
)
|
*
|
24,137
|
-
|
*
|
||||||||||
James
F. Corman
|
9,137
|
*
|
9,137
|
-
|
*
|
|||||||||||
Dianthus
LLC
|
19,951(5
|
)
|
*
|
12,500
|
7,451
|
*
|
||||||||||
Fiserv
Sec. A/C/F Harvey Kohn SEP IRA
|
17,844
|
*
|
17,844
|
-
|
*
|
|||||||||||
Fiserv
Sec. A/C/F Cary Sucoff Con IRA
|
12,172
|
*
|
12,172
|
-
|
*
|
|||||||||||
Jeff
Glassman
|
9,172
|
*
|
9,172
|
-
|
*
|
|||||||||||
Stanley
Goldberg Rev Trust U/A 12/17/93
|
9,172
|
*
|
9,172
|
-
|
*
|
|||||||||||
Stanley
Goldberg Ttee Lynn Intrater
|
24,137(7
|
)
|
*
|
24,137
|
-
|
*
|
||||||||||
John
J. Harte Ttee / John J. Harte MPP u/a 10/24/01
|
18,344
|
*
|
18,344
|
-
|
*
|
|||||||||||
Jonathan
Joels
|
255,226(8
|
)
|
7.6
|
%
|
235,226
|
20,000
|
*
|
|||||||||
Nicholas
Joels
|
32,144(9
|
)
|
*
|
32,144
|
-
|
*
|
||||||||||
Kanter
Family Foundation
|
17,344
|
*
|
17,344
|
-
|
*
|
|||||||||||
Katie
& Adam Bridge Partners LP
|
9,172
|
*
|
9,172
|
-
|
*
|
|||||||||||
Kurt
Kilstock
|
5,000(10
|
)
|
*
|
5,000
|
-
|
*
|
||||||||||
Helen
Kohn
|
27,500(5
|
)
|
*
|
27,500
|
-
|
*
|
Elliott
Koppel
|
24,444(11
|
)
|
*
|
4,444
|
20,000
|
*
|
||||||||||
KWG
Trust
|
16,750(5
|
)
|
*
|
16,750
|
-
|
*
|
||||||||||
Laidlaw
& Co. (UK) Ltd.
|
5,000(12
|
)
|
*
|
5,000
|
-
|
*
|
||||||||||
Little
Bear Investments LLC
|
2,758(13
|
)
|
*
|
2,758
|
-
|
*
|
||||||||||
Frayda
Mason
|
9,000(5
|
)
|
*
|
9,000
|
-
|
*
|
||||||||||
Shrikant
Mehta
|
210,894
|
6.35
|
%
|
210,894
|
-
|
*
|
||||||||||
Roger
Miller
|
36,724
|
1.11
|
%
|
36,724
|
-
|
*
|
||||||||||
John
Pappajohn
|
71,034
|
2.14
|
%
|
71,034
|
-
|
*
|
||||||||||
Wolf
Prensky
|
3,448(14
|
)
|
*
|
3,448
|
-
|
*
|
||||||||||
Zachary
Prensky
|
14,482(15
|
)
|
*
|
14,482
|
-
|
*
|
||||||||||
Deborah
Steinberger Raz and Amir Raz Jtwros
|
7,344
|
*
|
7,344
|
-
|
*
|
|||||||||||
Deborah
Steinberger Raz
|
1,675(16
|
)
|
*
|
1,675
|
-
|
*
|
||||||||||
David
Roush
|
24,137(7
|
)
|
*
|
24,137
|
-
|
*
|
||||||||||
Alan
Rubin
|
48,276(17
|
)
|
1.45
|
%
|
48,276
|
-
|
*
|
|||||||||
Sands
Brothers Venture Capital LLC
|
18,344
|
*
|
18,344
|
-
|
*
|
|||||||||||
Sands
Brothers Venture Capital LLC II
|
18,344
|
*
|
18,344
|
-
|
*
|
|||||||||||
Sands
Brothers Venture Capital LLC III
|
110,206
|
3.32
|
%
|
110,206
|
-
|
*
|
||||||||||
Sands
Brothers Venture Capital LLC IV
|
27,551
|
*
|
27,551
|
-
|
*
|
|||||||||||
Special
Situations Fund III, L.P.
|
59,503(18)(25
|
)
|
1.77
|
%
|
38,906
|
20,597
|
*
|
|||||||||
Special
Situations Fund III, QP, L.P.
|
680,824(19)(25
|
)
|
18.47
|
%
|
443,851
|
236,973
|
6.43
|
%
|
||||||||
Special
Situations Private Equity Fund, L.P.
|
2,221,015(20)(25
|
)
|
49.27
|
%
|
1,448,274
|
772,741
|
17.14
|
%
|
||||||||
Lisa
Sucoff
|
13,000(5
|
)
|
*
|
13,000
|
-
|
*
|
||||||||||
Ronit
Sucoff
|
27,500(5
|
)
|
*
|
27,500
|
-
|
*
|
||||||||||
Maryellen
Spedale
|
1,250(5
|
)
|
*
|
1,250
|
-
|
*
|
||||||||||
Jonathan
Steinberger
|
8,844(21
|
)
|
*
|
8,844
|
-
|
*
|
||||||||||
Ruth
Steinberger and Michel Steinberger
|
44,150(22
|
)
|
1.33
|
%
|
44,150
|
-
|
*
|
|||||||||
Ruth
Steinberger
|
3,000(23
|
)
|
*
|
3,000
|
-
|
*
|
||||||||||
Howard
Sterling
|
7,500(5
|
)
|
*
|
7,500
|
-
|
*
|
||||||||||
Trude
Taylor
|
36,655
|
1.10
|
%
|
36,655
|
-
|
*
|
||||||||||
Beverly
Tkaczenko
|
8,100(24
|
)
|
*
|
300
|
7,800
|
*
|
||||||||||
Valkyrie
Leasing LLC
|
48,274(17
|
)
|
1.45
|
%
|
48,274
|
-
|
*
|
1.
|
Unless
otherwise indicated in the footnotes to this table, the persons
and
entities named in the table have sole voting and sole investment
power
with respect to all shares beneficially owned, subject to community
property laws where applicable. Beneficial ownership includes shares
of
common stock underlying warrants or options, which are exercisable
within
60 days of March 1, 2006. Ownership is calculated based upon 3,321,673
shares outstanding as of March 1,
2006.
|
2.
|
Beneficial
ownership includes all shares a holder owns directly or may acquire
through exercisable or non-exercisable purchase
rights.
|
3.
|
Assumes
the sale of all shares offered hereby. A portion of the shares
to be
beneficially owned after the offering are to be included in a separate
Registration Statement on Form SB-2, which we intend to file with
the
SEC.
|
4.
|
Includes
(i) 8,200 shares issuable upon exercise of warrants at exercise
prices
ranging from $5.00 to $5.60 per share, (ii) 20,000 shares issuable
upon
exercise of options at an exercise price of $3.00 per share, (iii)
353
shares in retirement accounts and (iv) 5 shares jointly owned with
his
wife. Excludes 100,000 shares underlying options which are not
currently
exercisable.
|
5.
|
Consists
of a portion of 146,250 shares issuable upon exercise of warrants
(initially granted as two dealer warrants) at an exercise price of
$5.60
per share.
|
6.
|
Consists
of 1,666 shares issuable upon exercise of warrants at an exercise
price of
$5.00 per share.
|
7.
|
Includes
6,896 shares issuable upon exercise of warrants at exercise prices
ranging
from $2.90 to $5.60 per share.
|
8.
|
Includes
(i) 8,618 shares issuable upon exercise of warrants at exercise
prices
ranging from of $1.80 to $5.60 per share, (ii) 20,000 shares issuable
upon
exercise of options at an exercise price of $3.00 per share, (iii)
17,241
shares in a retirement account and (iv) 48,000 shares as trustee
for his
children. Excludes 100,000 shares underlying options which are
not
presently exercisable.
|
9.
|
Includes
2,834 shares issuable upon exercise of warrants at an exercise price
of
$5.00 per share.
|
10.
|
Consists
of 5,000 shares issuable upon exercise of warrants at an exercise
price of
$1.80 per share. Mr. Kilstock, the father-in-law of Messrs. Aaron
and
Joels, maintains that neither of them has any beneficial ownership
in his
holdings.
|
11.
|
Includes
(i) 3,894 shares issuable upon exercise of warrants at exercise
prices
ranging from $1.80 to $5.60 per share and (ii) 20,000 shares issuable
upon
exercise of options at exercise prices ranging from $3.00 to $5.00
per
share. Excludes 25,000 shares underlying options which are not
currently
exercisable.
|
12.
|
Consists
of 5,000 shares issuable upon exercise of warrants at an exercise
price of
$5.60 per share.
|
13.
|
Includes
2,758 shares issuable upon exercise of warrants at exercise prices
ranging
from $2.90 to $5.60 per
share.
|
14.
|
Includes
3,448 shares issuable upon exercise of warrants at exercise prices
ranging
from $2.90 to $5.60 per share.
|
15.
|
Includes
14,482 shares issuable upon exercise of warrants at exercise prices
ranging from $2.90 to $5.60 per
share.
|
16.
|
Includes
1,500 shares issuable upon exercise of warrants at an exercise price
of
$1.80 per share. Does not include 5,000 shares owned jointly with
her
husband.
|
17.
|
Includes
13,794 shares issuable upon exercise of warrants at exercise prices
ranging from $2.90 to $5.60 per
share.
|
18.
|
Includes
(i) 15,593 shares issuable upon exercise of warrants at exercise
prices
ranging from $1.50 to $5.60 per share and (ii) 16,120 shares underlying
Series D Convertible Preferred
Stock.
|
19.
|
Includes
(i) 178,307 shares issuable upon exercise of warrants at exercise
prices
ranging from $1.50 to $5.60 per share and (ii) 185,480 shares underlying
Series D Convertible Preferred
Stock.
|
20.
|
Includes
(i) 581,703 shares issuable upon exercise of warrants at exercise
prices
ranging from $1.50 to $5.60 per share and (ii) 604,830 shares underlying
Series D Convertible Preferred
Stock.
|
21.
|
Includes
1,500 shares issuable upon exercise of warrants at an exercise price
of
$1.80 per share.
|
22.
|
Does
not include shares separately owned by Ruth
Steinberger.
|
23.
|
Consists
of 3,000 shares issuable upon exercise of warrants at an exercise
price of
$1.80 per share.
|
24.
|
Includes
(i) 250 shares issuable upon exercise of warrants at an exercise
price of
$1.80 per share and (ii) 7,800 shares issuable upon exercise of
options at
an exercise price of $3.00 per share. Excludes 18,000 shares underlying
options that are not presently exercisable.
|
25.
|
MGP
Advisors Limited ("MGP") is the general partner of Special Situations
Fund
III, QP, L.P. and Special Situations Fund III, L.P. AWM Investment
Company, Inc. ("AWM") is the general partner of MGP. MG Advisers,
L.L.C.
("MG") is the general partner of and investment adviser to the
Special
Situations Private Equity Fund, L.P. Austin W. Marxe and David
M.
Greenhouse are the principal owners of MGP, AWM and MG. Through
their
control of MGP, AWM and MG, Messrs. Marxe and Greenhouse share
voting and
investment control over the portfolio securities of each of the
funds
listed above.
|
·
|
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;
|
·
|
settlement
of short sales entered into after the date of this
prospectus;
|
·
|
broker-dealers
may agree with the selling stockholders 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.
|
Page
|
|
F-2
|
|
F-3
|
|
F-4
|
|
F-5
|
|
F-6
|
|
F-7
- F-19
|
|
F-20
|
|
F-21
|
|
F-22
|
|
F-23
|
|
F-24
- F-27
|
ASSETS
|
||||
Current
Assets:
|
||||
Cash
and cash equivalents
|
$
|
1,257,158
|
||
Accounts
receivable, net of reserve for bad debts of $7,841
|
127,252
|
|||
Inventories,
net
|
668,616
|
|||
Other
current assets
|
29,758
|
|||
Total
current assets
|
2,082,784
|
|||
Property
and Equipment:
|
||||
Office
furniture and equipment
|
197,924
|
|||
Equipment
for lease
|
23,500
|
|||
Leasehold
improvements
|
19,536
|
|||
240,960
|
||||
Less:
accumulated depreciation
|
168,944
|
|||
Net
property and equipment
|
72,016
|
|||
Other
Assets:
|
||||
Goodwill
|
737,010
|
|||
Intangible
assets, net
|
263,917
|
|||
Other
|
17,410
|
|||
Total
other assets
|
1,018,337
|
|||
Total
Assets
|
$
|
3,173,137
|
||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||
Current
Liabilities:
|
||||
Accounts
payable
|
$
|
209,152
|
||
Accrued
expenses
|
63,663
|
|||
Accrued
compensation
|
104,782
|
|||
Total
current liabilities
|
377,597
|
|||
Commitments
and Contingencies
|
-
|
|||
Stockholders’
Equity :
|
||||
Preferred
stock, $.01 par value
|
||||
Authorized
- 1,000,000 shares
|
||||
Issued
and outstanding - Series A, none; Series B, convertible, 27,000
shares.
Liquidation preference $2,700,000
|
2,700,000
|
|||
Common
stock, $.01 par value
|
||||
Authorized
- 50,000,000 shares, issued 3,322,798 shares and outstanding 3,321,673
shares
|
33,228
|
|||
Additional
paid-in capital
|
74,241,755
|
|||
Accumulated
deficit
|
(74,177,193
|
)
|
||
Treasury
stock (1,125 common shares, at cost)
|
(2,250
|
)
|
||
Total
stockholders’ equity
|
2,795,540
|
|||
Total
Liabilities and Stockholders’ Equity
|
$
|
3,173,137
|
Years
Ended September 30,
|
|||||||
2005
|
2004
|
||||||
Revenues:
|
|||||||
Product
sales
|
$
|
727,491
|
$
|
766,119
|
|||
Equipment
rental income
|
13,305
|
69,342
|
|||||
Consulting
and royalty fees
|
108,006
|
50,000
|
|||||
Total
revenues
|
848,802
|
885,461
|
|||||
Operating
Expenses:
|
|||||||
Cost
of product sales and equipment rental income
|
490,827
|
618,944
|
|||||
Research
and development
|
325,486
|
283,697
|
|||||
Selling,
general and administrative
|
2,730,071
|
3,020,212
|
|||||
Total
operating
expenses
|
3,546,384
|
3,922,853
|
|||||
Operating
loss
|
(2,697,582
|
)
|
(3,037,392
|
)
|
|||
Other
Income
|
482,200
|
-
|
|||||
Interest
expense, net
|
(323,026
|
)
|
(212,571
|
)
|
|||
Loss
from continuing operations
|
(2,538,408
|
)
|
(3,249,963
|
)
|
|||
Loss
from operations of discontinued Strax business segment
|
-
|
(105,806
|
)
|
||||
Net
loss
|
(2,538,408
|
)
|
(3,355,769
|
)
|
|||
Beneficial
Conversion feature - Series C Mandatory Convertible Preferred
Stock
|
(124,528
|
)
|
-
|
||||
Net
loss attributable to common stockholders
|
$
|
(2,662,936
|
)
|
$
|
(3,355,769
|
)
|
|
Net
loss per basic and diluted common share
|
|||||||
Continuing
operations
|
$
|
(1.16
|
)
|
$
|
(3.18
|
)
|
|
Discontinued
operations
|
-
|
(0.10
|
)
|
||||
Net
loss per basic and diluted common share
|
$
|
(1.16
|
)
|
$
|
(3.28
|
)
|
|
Weighted
average number of common shares outstanding, basic and
diluted
|
2,288,543
|
1,022,328
|
Series
B Convertible Preferred Stock
|
Series
C Mandatory Convertible Preferred Stock
|
Common
Stock
|
Treasury
Stock
|
|||||||||||||||||||||||||||||||
Number
of Shares
|
Amount
|
Number
of Shares
|
Amount
|
Number
of Shares
|
Amount
|
Additional
Paid-in Capital
|
Accumulated
Deficit
|
Number
of Shares
|
Amount
|
Total
Stockholders’
(Deficiency)
Equity
|
||||||||||||||||||||||||
Balance,
September 30, 2003
|
27,000
|
$
|
2,700,000
|
-
|
$
|
-
|
1,023,453
|
$
|
10,235
|
$
|
67,775,714
|
$
|
(68,283,016
|
)
|
1,125
|
$
|
(2,250
|
)
|
$
|
2,200,683
|
||||||||||||||
Fair
Value of warrants issued in connection with bridge financing- related
parties
|
27,400
|
27,400
|
||||||||||||||||||||||||||||||||
Fair
value of warrants issued in connection with secured convertible
notes
|
28,500
|
28,500
|
||||||||||||||||||||||||||||||||
Beneficial
conversion feature in connection with secured convertible
notes
|
200,000
|
200,000
|
||||||||||||||||||||||||||||||||
Net
loss
|
(3,355,769
|
)
|
(3,355,769
|
)
|
||||||||||||||||||||||||||||||
Balance,
September 30, 2004
|
27,000
|
2,700,000
|
-
|
-
|
1,023,453
|
10,235
|
68,031,614
|
(71,638,785
|
)
|
1,125
|
(2,250
|
)
|
(899,186
|
)
|
||||||||||||||||||||
Issuance
of Series C Mandatory Convertible Preferred Stock
|
45,000
|
4,500,000
|
(434,966
|
)
|
4,065,034
|
|||||||||||||||||||||||||||||
Conversion
of secured convertible notes and bridge financing into Series C
Mandatory
Convertible Preferred Stock
|
21,681
|
2,168,100
|
2,168,100
|
|||||||||||||||||||||||||||||||
Conversion
of Series C Preferred into common stock
|
(66,681
|
)
|
(6,668,100
|
)
|
2,299,345
|
22,993
|
6,645,107
|
-
|
||||||||||||||||||||||||||
Net
loss
|
(2,538,408
|
)
|
(2,538,408
|
)
|
||||||||||||||||||||||||||||||
Balance,
September 30, 2005
|
27,000
|
$
|
2,700,000
|
-
|
$
|
-
|
3,322,798
|
$
|
33,228
|
$
|
74,241,755
|
$
|
(74,177,193
|
)
|
1,125
|
$
|
(2,250
|
)
|
$
|
2,795,540
|
Year
Ended September 30,
|
|||||||
2005
|
2004
|
||||||
Cash
Flows from Operating Activities:
|
|||||||
Net
Loss
|
$
|
(2,538,408
|
)
|
$
|
(3,355,769
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|||||||
Bad
debt expense
|
-
|
77,381
|
|||||
Amortization
of debt discount
|
165,220
|
73,617
|
|||||
Amortization
of deferred financing cost
|
89,542
|
63,958
|
|||||
Depreciation
and amortization
|
310,693
|
350,181
|
|||||
Write-off
of other receivable
|
-
|
101,992
|
|||||
Interest
on secured convertible notes
|
95,300
|
||||||
Changes
in operating assets and liabilities:
|
|||||||
Accounts
receivable, net
|
(53,769
|
)
|
6,177
|
||||
Inventories
|
108,079
|
109,966
|
|||||
Other
assets
|
(14,536
|
)
|
(38,580
|
)
|
|||
Accounts
payable and accrued expenses
|
(1,100,161
|
)
|
(231,286
|
)
|
|||
Net
cash used in operating activities
|
(2,938,040
|
)
|
(2,842,363
|
)
|
|||
Cash
Flows from Investing Activities:
|
|||||||
Proceeds
from sale of Strax business
|
66,000
|
268,629
|
|||||
Increase
of security deposits
|
(4,080
|
)
|
|||||
Acquisition
of property and equipment
|
(32,139
|
)
|
(48,502
|
)
|
|||
Net
cash provided by investing activities
|
29,781
|
220,127
|
|||||
Cash
Flows from Financing Activities:
|
|||||||
Proceeds
from issuance of notes payable - related party
|
-
|
500,000
|
|||||
Proceeds
from issuance of secured convertible notes
|
-
|
1,500,000
|
|||||
Financing
fees in connection with convertible notes
|
(125,000
|
)
|
|||||
Proceeds
from short term loan
|
100,000
|
-
|
|||||
Repayment
from short term loan
|
(100,000
|
)
|
-
|
||||
Proceeds
from short term loans - related party
|
145,923
|
-
|
|||||
Repayment
of short term loans - related party
|
(73,123
|
)
|
-
|
||||
Net
proceeds from issuance of Series C Mandatory Preferred
Stock
|
4,065,034
|
-
|
|||||
Net
cash provided by financing activities
|
4,137,834
|
1,875,000
|
|||||
Net
increase (decrease) in cash and cash equivalents
|
1,229,575
|
(747,236
|
)
|
||||
Cash
and cash equivalents, beginning of year
|
27,583
|
774,819
|
|||||
Cash
and cash equivalents, end of year
|
$
|
1,257,158
|
$
|
27,583
|
|||
Supplemental
Disclosures of Cash Flow Information:
|
|||||||
Cash
paid for interest
|
$
|
49,541
|
$
|
25,697
|
|||
Cash
paid for income taxes
|
$
|
192,672
|
$
|
-
|
|||
Non
Cash Transactions:
|
|||||||
Issuance
of warrants attached with debt issuance
|
$
|
-
|
$
|
55,900
|
|||
Beneficial
conversion feature in connection with debt issuance
|
$
|
-
|
$
|
200,000
|
|||
Transfer
of net
book value of certain equipment for leases to inventory
|
$
|
66,177
|
$
|
-
|
|||
Conversion
of
secured convertible notes and interest into equity
|
$
|
1,595,300
|
$
|
-
|
|||
Conversion
of notes payable - related party into equity
|
$
|
500,000
|
$
|
-
|
|||
Conversion
of
short-term loans payable - related party into equity
|
$
|
72,800
|
$
|
-
|
Asset
Classification
|
Useful
Lives
|
Office
furniture and equipment
|
3-5
years
|
Leasehold
improvements
|
Term
of Lease
|
Equipment
for lease
|
5
years
|
September
30,
|
||
2005
|
2004
|
|
Risk
free interest rate
|
4.00-
5.00%
|
4.00
-5.00%
|
Expected
dividend yield
|
--
|
--
|
Expected
lives
|
10
years
|
10
years
|
Expected
volatility
|
29-
80%
|
29
- 80%
|
Weighted
average value of grants per share
|
$3.32
|
$1.80
|
Weighted
average remaining contractual life of options outstanding
(years)
|
6.35
|
7.3
|
For
the years ended
|
|||||||
September
30,
|
|||||||
2005
|
2004
|
||||||
Net
loss attributable to common stockholders as reported
|
$
|
(2,662,936
|
)
|
$
|
(3,355,769
|
)
|
|
Add:
Stock based employee compensation expense, included in reported
loss.
|
--
|
--
|
|||||
Less:
Stock-based employee compensation as determined under fair value
based
method for all awards.
|
(2,991
|
)
|
(56,371
|
)
|
|||
Pro
forma net loss
|
$
|
(2,665,927
|
)
|
$
|
(3,412,140
|
)
|
|
Net
Loss per share:
|
|
||||||
Basic
and diluted loss attributable to common stockholders - as
reported
|
$
|
(1.16
|
)
|
$
|
(3.28
|
)
|
|
Basic
and diluted loss attributable to common stockholders - pro
forma
|
$
|
(1.17
|
)
|
$
|
(3.33
|
)
|
Accumulated
|
Sept
30,2005
|
|||||||||
Asset
Type
|
Cost
|
Amortization
|
Net
Book Value
|
|||||||
Technology
|
$
|
550,000
|
$
|
504,166
|
$
|
45,834
|
||||
Permits
|
290,000
|
161,917
|
128,083
|
|||||||
Customer
Relationships
|
200,000
|
110,000
|
90,000
|
|||||||
$
|
1,040,000
|
$
|
776,084
|
$
|
263,917
|
Fiscal
Period
|
Amortization
|
|||
2006
|
$
|
143,834
|
||
2007
|
98,000
|
|||
2008
|
22,083
|
|||
$
|
263,917
|
Raw
materials
|
$
|
314,850
|
||
Finished
goods
|
353,766
|
|||
$
|
668,616
|
September
30,
|
|||
2005
|
2004
|
||
Tax
benefit at statutory rate
|
(34.0%)
|
(34.0%)
|
|
Adjustments
for change in valuation allowance
|
34.0%
|
34.0%
|
|
-
|
-
|
Fiscal
Year
|
Amount
|
|
2006
|
$
43,100
|
Number
of
Shares
|
Option
Price
Per
Share
|
Weighted
Average
Exercise
Price
Per
Share
|
|||||||
Balance,
September 30, 2003
|
48,050
|
$3.00
|
$3.00
|
||||||
Granted
in 2004
|
3,750
|
$4.00
|
$4.00
|
||||||
|
|||||||||
Balance,
September 30, 2004
|
51,800
|
$3.00
- $4.00
|
$3.07
|
||||||
Granted
in 2005
|
0
|
-
|
-
|
||||||
Balance,
September 30, 2005
|
51,800
|
$3.00
- $4.00
|
$3.07
|
Number
of
Shares
|
Option
Price
Per
Share
|
Weighted
Average
Exercise
Price
Per
Share
|
|||||||
Balance,
September 30, 2003
|
102,628
|
$2.00-$402.00
|
$10.40
|
||||||
|
|
||||||||
Cancelled
in 2004
|
(50,064)
|
$15.00-316.00
|
$18.00
|
||||||
|
|||||||||
Balance,
September 30, 2004
|
52,654
|
$2.00-$402.00
|
$3.40
|
||||||
Cancelled
in 2005
|
(64)
|
$402.00
|
$402.00
|
||||||
Balance,
September 30, 2005
|
52,500
|
$2.00
- $3.00
|
$2.95
|
Number
of
Shares
|
Option
Price
Per
Share
|
Weighted
Average Exercise Price
Per
Share
|
||||
Balance,
September 30, 2003
|
36,475
|
$3.00
-$100.00
|
$4.80
|
|||
Cancelled
in 2004
|
(125)
|
$58.60
-$100.00
|
$83.40
|
|||
Balance,
September 30, 2004
|
36,350
|
$3.00
-$100.00
|
$4.60
|
|||
Cancelled
in 2005
|
(1,375)
|
$3.00
-$100.00
|
$10.32
|
|||
Balance,
September 30, 2005
|
34,975
|
$3.00
-$100.00
|
$4.27
|
Outstanding
Options
|
||||
Weighted-
|
||||
Number
|
Average
|
Weighted-
|
||
Range
of
|
Outstanding
at
|
Remaining
|
Average
|
|
Exercise
|
September
30,
|
Contractual
|
Exercise
|
|
Prices
|
|
2005
|
Life
(years)
|
Price
|
$2.00
- $5.00
|
138,800
|
6.37
|
3.12
|
|
58.60
|
400
|
.85
|
58.60
|
|
100.00
|
75
|
.70
|
100.00
|
|
|
||||
$2.00
- $100.00
|
|
139,275
|
6.35
|
3.32
|
Exercisable
Options
|
||||
Weighted-
|
||||
Number
|
Average
|
Weighted-
|
||
Range
of
|
Outstanding
at
|
Remaining
|
Average
|
|
Exercise
|
September
30,
|
Contractual
|
Exercise
|
|
Prices
|
|
2005
|
Life
(years)
|
Price
|
$2.00
- $5.00
|
137,550
|
6.35
|
3.11
|
|
58.60
|
400
|
.85
|
58.60
|
|
100.00
|
75
|
.70
|
100.00
|
|
|
|
|||
$2.00
- $100.00
|
|
138,025
|
6.33
|
3.32
|
Total
stock options vested and exercisable at
September
30, 2005
|
Number
of
Shares |
Range
of Exercise Price Per Share
|
Weighted
Average Exercise Price
Per
Share
|
Plan
shares
|
85,525
|
$3.00-$100.00
|
$3.54
|
Non-plan
shares
|
52,500
|
$2.00-
$3.00
|
$2.95
|
138,025
|
$2.00-$100.00
|
$3.32
|
For
the years ended September 30,
|
2005
|
2004
|
|||||
Net
Revenues:
|
|||||||
Israel
|
$
|
398,215
|
$
|
766,119
|
|||
United
States
|
450,587
|
119,342
|
|||||
Revenues
as reported in the accompanying financial statements
|
$
|
848,802
|
$
|
885,461
|
|||
Loss
from continuing operations:
|
|||||||
Israel
|
$
|
(322,161
|
)
|
$
|
(414,890
|
)
|
|
United
States
|
(2,216,247
|
)
|
(2,835,073
|
)
|
|||
Loss
from continuing operations as reported in the accompanying financial
statements
|
$
|
(2,538,408
|
)
|
$
|
(3,249,963
|
)
|
September
30, 2005
|
|
Identifiable
Assets:
|
|
Israel
|
$
471,865
|
United
States
|
2,701,272
|
Total
Assets as reported in the accompanying financial
statements
|
$3,173,137
|
ASSETS
|
||||
Current
Assets:
|
||||
Cash
and cash equivalents
|
$
|
620,934
|
||
Accounts
receivable, net of reserve for bad debts of $11,410
|
163,320
|
|||
Inventories,
net
|
699,285
|
|||
Other
current assets
|
7,440
|
|||
Total
current assets
|
1,490,979
|
|||
Property
and Equipment:
|
||||
Office
furniture and equipment
|
199,494
|
|||
Equipment
for lease
|
23,500
|
|||
Leasehold
improvements
|
20,970
|
|||
243,964
|
||||
Less:
accumulated depreciation
|
176,191
|
|||
Net
property and equipment
|
67,773
|
|||
Other
Assets:
|
||||
Goodwill
|
737,010
|
|||
Intangible
assets, net
|
193,583
|
|||
Other
|
17,410
|
|||
Total
other assets
|
948,003
|
|||
Total
Assets
|
$
|
2,506,755
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||
Current
Liabilities:
|
||||
Accounts
payable
|
$
|
216,612
|
||
Accrued
expenses
|
61,774
|
|||
Accrued
compensation
|
126,267
|
|||
Total
current liabilities
|
404,653
|
|||
Commitments
and Contingencies
|
-
|
|||
Stockholders’
Equity :
|
||||
Preferred
stock, $.01 par value
|
||||
Authorized
- 1,000,000 shares
|
||||
Issued
and outstanding - Series A, none; Series B, convertible, 27,000 shares.
Liquidation preference $2,700,000
|
2,700,000
|
|||
Common
stock, $.01 par value
|
||||
Authorized
- 50,000,000 shares, issued 3,322,798 shares and outstanding 3,321,673
shares
|
33,228
|
|||
Additional
paid-in capital
|
74,241,755
|
|||
Accumulated
deficit
|
(74,870,631
|
)
|
||
Treasury
stock (1,125 common shares, at cost)
|
(2,250
|
)
|
||
Total
stockholders’ equity
|
2,102,102
|
|||
Total
Liabilities and Stockholders’ Equity
|
$
|
2,506,755
|
For
the three months ended,
|
|||||||
December
31, 2005
|
December
31, 2004
|
||||||
Revenues:
|
|||||||
Product
sales
|
$
|
217,282
|
$
|
236,908
|
|||
Equipment
rental income
|
-
|
5,326
|
|||||
Consulting
and royalty fees
|
23,606
|
20,425
|
|||||
Total
revenues
|
240,888
|
262,659
|
|||||
Operating
Expenses:
|
|||||||
Cost
of product sales and equipment rental income
|
168,662
|
161,794
|
|||||
Research
and development
|
81,839
|
76,580
|
|||||
Selling,
general and administrative
|
687,554
|
672,278
|
|||||
Total
operating expenses
|
938,055
|
910,652
|
|||||
Operating
loss
|
(
697,167
|
)
|
(647,993
|
)
|
|||
Interest
income (expense), net
|
3,729
|
(149,079
|
)
|
||||
Net
loss
|
$
|
(693,438
|
)
|
$
|
(797,072
|
)
|
|
Net
loss per basic and diluted common share
|
$
|
(0.21
|
)
|
$
|
(0.78
|
)
|
|
Weighted
average number of common shares outstanding, basic and
diluted
|
|||||||
3,321,673
|
1,022,328 |
Series
B Convertible Preferred Stock
|
Common Stock |
Treasury
Stock
|
||||||||||||||||||||||||||
Number
of Shares
|
Amount
|
Number
of Shares
|
Amount
|
Additional
Paid-in Capital
|
Accumulated
Deficit
|
Number
of Shares
|
Amount
|
Total
Stockholders’ Equity
|
||||||||||||||||||||
Balance,
September 30, 2005
|
27,000
|
$
|
2,700,000
|
3,322,798
|
$
|
33,228
|
$
|
74,241,755
|
$
|
(74,177,193
|
)
|
1,125
|
$
|
(2,250
|
)
|
$
|
2,795,540
|
|||||||||||
Net
Loss
|
(693,438
|
)
|
(693,438
|
)
|
||||||||||||||||||||||||
Balance,
December 31, 2005
|
27,000
|
$
|
2,700,000
|
3,322,798
|
$
|
33,228
|
$
|
74,241,755
|
$
|
(74,870,631
|
)
|
1,125
|
$
|
(2,250
|
)
|
$
|
2,102,102
|
Three
Months Ended December 31,
|
|||||||
2005
|
2004
|
||||||
Cash
Flows from Operating Activities:
|
|||||||
Net
Loss
|
$
|
(693,438
|
)
|
$
|
(797,072
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|||||||
Amortization
of debt discount
|
-
|
54,567
|
|||||
Amortization
of deferred financing cost
|
-
|
38,375
|
|||||
Depreciation
and amortization
|
77,581
|
81,422
|
|||||
Changes
in operating assets and liabilities:
|
|||||||
Accounts
receivable, net
|
(36,068
|
)
|
15,654
|
||||
Inventories
|
(30,669
|
)
|
22,011
|
||||
Other
assets
|
22,318
|
8,999
|
|||||
Accounts
payable and accrued expenses
|
27,056
|
397,250
|
|||||
Net
cash used in operating activities
|
(633,220
|
)
|
(178,794
|
)
|
|||
Cash
Flows from Investing Activities:
|
|||||||
Proceeds
from sale of Strax business
|
-
|
33,000
|
|||||
Acquisition
of property and equipment
|
(3,004
|
)
|
(1,436
|
)
|
|||
Net
cash (used in) provided by investing activities
|
(3,004
|
)
|
31,564
|
||||
Cash
Flows from Financing Activities:
|
|||||||
Proceeds
from short term loans - related party
|
-
|
138,793
|
|||||
Net
cash provided by financing activities
|
-
|
138,793
|
|||||
Net
decrease in cash and cash equivalents
|
(636,224
|
)
|
(8,437
|
)
|
|||
Cash
and cash equivalents, beginning of period
|
1,257,158
|
27,583
|
|||||
Cash
and cash equivalents, end of period
|
$
|
620,934
|
$
|
19,146
|
|||
Supplemental
Disclosures of Cash Flow Information:
|
|||||||
Cash
paid for income taxes
|
$
|
3,110
|
$
|
-
|
|||
Non
Cash -Flow Item:
|
|||||||
Transfer
of net book value of certain equipment for leases to
inventory
|
$
|
-
|
$
|
66,177
|
Three
months ended December 31,
|
|||||||
2005
|
2004
|
||||||
Net
loss attributable to common
stockholders as reported
|
$
|
(693,438
|
)
|
$
|
(797,072
|
)
|
|
Deduct:
Stock-based
employee compensation
determined under
fair value method for
all awards, net of related
tax effects
|
(610
|
)
|
(818
|
)
|
|||
Pro
forma net loss attributable to common
stockholders
|
$
|
(694,048
|
)
|
$
|
(797,890
|
)
|
|
Basic
and diluted loss attributable to
common stockholders
|
|||||||
As
reported
|
$
|
(0.21
|
)
|
$
|
(0.78
|
)
|
|
Pro
forma
|
$
|
(0.21
|
)
|
$
|
(0.78
|
)
|
Raw
materials
|
$396,528
|
Finished
goods
|
302,757
|
$699,285
|
No
dealer, salesperson or other person has been authorized to give
any
information or to make any representations other than those contained
in
this Prospectus in connection with the offering made by this Prospectus,
and, if given or made, such information or representations must
not be
relied upon as having been authorized by the Company or the selling
stockholders. This Prospectus does not constitute an offer to sell
or a
solicitation of an offer to buy any securities other than those
specifically offered hereby or an offer to sell or a solicitation
of an
offer to buy any of these securities in any jurisdiction to any
person to
whom it is unlawful to make such offer or solicitation. Except
where
otherwise indicated, this Prospectus speaks as of the effective
date of
the Registration Statement. Neither the delivery of this Prospectus
nor
any sale hereunder shall under any circumstances create any implication
that there has been no change in the affairs of the Company since
the date
hereof.
TABLE
OF
CONTENTS
Page
OPERATIONS 10
BUSINESS 15
MANAGEMENT 23
TRANSACTIONS 27
EXPERTS 34
|
3,578,427
Shares
of
Common
Stock
CAPRIUS,
INC.
PROSPECTUS
_________,
2006
|
Registration
Fee
|
$1,693
|
Legal
Fees and Expenses
|
50,000
|
Accounting
Fees and Expenses
|
30,000
|
Printing
|
2,500
|
Miscellaneous
Expenses
|
5,807
|
Total
|
$90,000
|
2.1
|
Agreement
and Plan of Merger, dated January 20, 1997, by and among Registrant,
Medial Diagnostics, Inc. (“Strax”), Strax Acquisition Corporation and US
Diagnostic Inc. (incorporated by reference to Exhibit 1 to Registrant’s
Form 8-K filed January 23, 1997).
|
2.2
|
Agreement
and Plan of Merger dated as of June 28, 1999 among Registrant, Caprius
Merger Sub, Opus Diagnostics Inc. (“Opus”), George Aaron and Jonathan
Joels (incorporated by reference to Exhibit 2.1 to Registrant’s Form 8-K,
filed July 1, 1999 (the “July 1999 Form
8-K”)).
|
3.1
|
Certificate
of Incorporation of Registrant. (incorporated by reference to Exhibit
3
filed with Registrant’s Registration Statement on Form S-2, and amendments
thereto, declared effective August 18, 1993 (File No. 033-40201)
(“Registrant’s Form S-2”)).
|
3.2
|
Amendment
to Certificate of Incorporation of Registrant filed November 5, 1993
(incorporated by reference to Exhibit 3.2 to Registrant’s Form S-4, filed
October 9, 1997(File No.
333-37481)).
|
3.3
|
Amendment
to Certificate of Incorporation of Registrant, filed August 31, 1995,
(incorporated by reference to Exhibit 3.1 to Registrant’s Form 8-K for an
event of August 31, 1995 (the “August 1995 Form
8-K”)).
|
3.4
|
Amendment
to Certificate of Incorporation of Registrant, filed September 21,
1995
(incorporated by reference to Exhibit 3.1 to Registrant’s Annual Report on
Form 10-K for the nine months ended September 30, 1995 (the “ANMR 1995
Form 10-K”)).
|
3.5
|
Certificate
of Designation of Series A Preferred Stock of the Registrant (incorporated
by reference to the Registrant’s Form 8-K, filed on March 31,
1996.
|
3.6
|
Certificate
of Designation of Series B Convertible Redeemable Preferred Stock
of
Registrant (incorporated by reference to Exhibit 3.1 to Registrant’s Form
8-K, filed September 2, 1997).
|
3.7
|
Certificate
of Designations, Preferences and Rights of Series C Mandatory Convertible
Preferred Stock (incorporated by reference to Exhibit 3.1 to Registrant’s
Form 8-K, filed for an event of February 15, 2005 (the “February 2005 Form
8-K”)).
|
3.8
|
Certificate
of Designations Preferences and Rights of Series D Convertible
Preferred
Stock (incorporated by reference to Exhibit 3.1 to Registrant’s Form 8-K,
filed for an event of February 17, 2006 (the “February 2006 Form
8-K”)).
|
3.9
|
Certificate
of Merger, filed on June 28, 1999 with the Secretary of State of
the State
of Delaware. (incorporated by reference to Exhibit 3.1 of Form
8-K dated
June 28, 1999).
|
3.10
|
Certificate
of Amendment to Certificate of Incorporation, Filed April 1, 2005
(incorporated by reference to Exhibit 3.1 to Registrant’s Form 8-K, filed
April 5, 2005 (the “April 2005 Form
8-K”).
|
3.11
|
Amended
and Restated By-laws of Registrant (incorporated by reference to
Exhibit
3.4 to Registrant’s Form
S-4).
|
4.1
|
Form
of Warrant issued to certain employees in connection with Registrant’s
Bridge Financing in March 2000 (incorporated by reference to Exhibit
4.7
to Registrant’s July 2000 Form SB-2, filed July 26, 2000 (File No.
333-42222)).
|
4.2
|
Form
of Series A Warrant from Registrant’s April 2000 private placement of
Units (the “April Private Placement”) (incorporated by reference to
Exhibit 10.2 to Registrant’s Form 8-K, filed April 28, 2000 (the “April
2000 Form 8-K”)).
|
4.3
|
Form
of Series B Warrant from the April Private Placement (incorporated
by
reference to Exhibit 10.3 to Registrant’s April 2000 Form
8-K).
|
4.4
|
Form
of Common Stock Purchase Warrants for up to 300,000 shares of Common
Stock, expiring February 28, 2006 (incorporated by Reference to Exhibit
10.3 to the Registrant’s Form 10-QSB for the fiscal quarter ended March
31, 2001).
|
4.5
|
Form
of 2005 Series A Warrant (granted February 15, 2005) (incorporated
by
reference to Exhibit 4.1 to Registrant’s February 2005 Form
8-K).
|
4.6
|
Form
of 2005 Series B Warrant (granted February 15, 2005) (incorporated
by
reference to Exhibit 4.2 to Registrant’s February 2005 Form
8-K).
|
4.7
|
Form
of Dealer Warrant (granted February 15, 2005) (incorporated by reference
to Exhibit 4.3 to Registrant’s February 2005 Form
8-K).
|
4.8
|
Form
of Lock-Up Agreement with George Aaron and Jonathan Joels (incorporated
by
reference to Exhibit 4.4 to Registrant’s February 2005 Form
8-K).
|
4.9
|
Form
of 2006 Series A Warrant (granted February 17, 2006) incorporated
by
reference to Exhibit 4.1 to Registrant’s February 2006 Form
8-K).
|
4.10
|
Form
of 2006 Series B Warrant (granted February 17, 2006) incorporated
by
reference to Exhibit 4.2 to Registrant’s February 2006 Form
8-K).
|
4.11
|
Placement
Agent Warrant, dated February 17, 2006 (incorporated by reference
to
Exhibit 4.3 to Registrant’s February 2006 Form
8-K).
|
4.12
|
Placement
Agent Warrants, dated February 17, 2006 (incorporated by reference
to
Exhibit 4.1 to Registrant’s March 2006 Form
8-K/A-1).
|
5*
|
Opinion
of Thelen Reid & Priest LLP.
|
10.1.1
|
Registration
Rights Agreement, dated August 18, 1997, between Registrant and General
Electric Company (“GE”) (incorporated by reference to Exhibit 10.2 to
Registrant’s Form 8-K, filed September 2, 1997 (the “September 1997 Form
8-K”)).
|
10.1.2
|
Stockholders
Agreement, dated August 18, 1997, between Registrant and GE (incorporated
by reference to Exhibit 10.3 to Registrant’s September 1997 Form
8-K).
|
10.1.3
|
Settlement
and Release Agreement, dated August 18, 1997, between the Registrant
and
GE (incorporated by reference to Exhibit 10.4 to Registrant’s September
1997 Form 8-K).
|
10.1.4
|
License
Agreement, dated August 18, 1997, between Registrant and GE (incorporated
by reference to Exhibit 10.4 to Registrant’s September 1997 Form
8-K).
|
10.2.1
|
Form
of Stock Purchase Agreement regarding the April Private Placement
(incorporated by reference to Exhibit 10.1 to Registrant’s April 2000 Form
8-K).
|
10.2.2
|
Letter
Agreement, dated March 27, 2000, between the Company and certain
purchasers (incorporated by reference to Exhibit 10.4 to Registrant’s
April 2000 Form 8-K).
|
10.2.3
|
Letter
Agreement, dated March 29, 2000, between the Company and certain
purchasers (incorporated by reference to Exhibit 10.5 to Registrant’s
April 2000 Form 8-K).
|
10.2.4
|
Form
of Option Agreement granted to Shrikant Mehta with respect to the
April
Private Placement (incorporated by reference to Exhibit 10.17 to
Registrant’s 2000 Form SB-2).
|
10.3.1
|
Purchase
and Sale Agreement, dated as of October 9, 2002, Among Registrant,
Opus
and Seradyn, Inc. (“Seradyn”) (incorporated by reference to Exhibit 10.1
to Registrant’s Form 8-K for an event of October 9, 2002 (the “October
2002 Form 8-K”)).
|
10.3.2
|
Royalty
Agreement, dated as of October 9, 2002, between Opus and Seradyn
(incorporated by reference to Exhibit 10.2 to Registrant’s October 2002
Form 8-K).
|
10.3.3
|
Non-compete
Agreement dated as of October 9, 2002, between Opus and (incorporated
by
reference to Exhibit 10.3 to Registrant’s October 2002 Form
8-K).
|
10.3.4
|
Consulting
Agreement, dated as of October 9, 2002, between Opus and Seradyn
(incorporated by reference to Exhibit 10.4 to Registrant’s October 2002
Form 8-K).
|
10.4.1
|
Stock
Purchase Agreement, dated December 17, 2002, among Registrant, M.C.M.
Technologies, Ltd. and M.C.M. Environmental Technologies,
Inc.(incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K
for an event of December 17, 2002 (the “December 2002 Form
8-K”).
|
10.4.2
|
Stockholders
Agreement, dated December 17, 2002, among M.C.M. Technologies, Inc.
and
the holders of its outstanding capital stock (incorporated by reference
to
Exhibit 10.2 to Registrant’s December 2002 Form
8-K).
|
10.4.3
|
Form
of Unsecured Promissory Notes, issued for the short-term Loan
(incorporated by reference to Exhibit 10.13.3 to Registrant’s September
2002 Form 10-KSB.)
|
10.4.4
|
Form
of Subscription Agreement relating to the short-term Loan (incorporated
by
reference to Exhibit 10.13.4 to Registrant’s September 2002 Form 10-KSB).
|
10.4.5
|
Form
of Common Stock Purchase Warrant relating to the short-term Loan
(incorporated by reference to Exhibit 10.13.5 to Registrant’s September
2002 Form 10-KSB).
|
10.5
|
Form
of Common Stock Warrant relating to Line of Credit (incorporated
by
reference to Exhibit 10.14 to Registrant’s September 2002 Form
10-KSB).
|
10.6.1
|
Stock
Purchase Agreement, among Registrant, Strax Institute Inc. and Eastern
Medical Technologies, Inc. dated as of September 30, 2003 (incorporated
by
reference to Exhibit 10.1 to Registrant’s Form 8-K for an event of October
9, 2003 (the “October 2003 Form 8-K”)).
|
10.6.2
|
Non-negotiable
Promissory Note of Eastern Medical Technologies, Inc. to Registrant,
dated
September 30, 2003 (incorporated by reference to Exhibit 10.2 to
Registrant’s October 2003 Form 8-K).
|
10.6.3
|
Security
Agreement among Eastern Medical Technologies, Inc., Strax Institute,
Inc.,
and Registrant, dated as of September 30, 2003 (incorporated by reference
to Exhibit 10.3 to Registrant’s October 2003 Form 8-K).
|
10.6.4
|
Management
Services Agreement between Registrant and Strax Institute Inc., dated
as
of September 30, 2003 (incorporated by reference to Exhibit 10.4
to
Registrant’s October 2003 Form 8-K).
|
10.6.5
|
Settlement
Letter among BDC Corp. d/b/a/ BDC Consulting Corp, Registrant and
George
Aaron, dated as of September 30, 2003 (incorporated by reference
to
Exhibit 10.5 to Registrant’s October 2003 Form
8-K).
|
10.7.1
|
Securities
Purchase Agreement, among Registrant and investors dated as of April
26,
2004 (incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K
for an event of April 27, 2004 (the “April 2004 Form 8-K”)).
|
10.7.2
|
Form
of 8% Senior Secured Convertible Promissory Note (incorporated by
reference to Exhibit 10.2 to Registrant’s April 2004 Form 8-K).
|
10.7.3
|
Security
and Pledge Agreement by the Registrant in favor of CAP Agent Associates,
LLC, dated April 26, 2004 (incorporated by reference to Exhibit 10.3
to
Registrant’s April 2004 Form 8-K).
|
10.7.4
|
Registration
Rights Agreement, dated April 26, 2004, between Registrant and the
purchasers of the Notes, and Sands Brothers International Ltd. (“SBIL”)
(incorporated by reference to Exhibit 10.4 to Registrant’s April 2004 Form
8-K).
|
10.7.5
|
Dealer
Agreement, dated April 12, 2004, between Registrant and SBIL (incorporated
by reference to Exhibit 10.5 to Registrant’s April 2004 Form
8-K).
|
10.7.6
|
Common
Stock Purchase Warrant Agreement, dated April 26, 2004, between Registrant
and SBIL (incorporated by reference to Exhibit 10.6 to Registrant’s April
2004 Form 8-K).
|
10.8.1
|
Form
of Secured Promissory Note issued for the short-term Bridge Loans
(incorporated by reference to Exhibit 10.11.1 Registrant’s Form 10-KSB for
fiscal year ended September 30, 2003 (the “2003 Form 10-KSB”)).
|
10.8.2
|
Form
of Common Stock Purchase Warrant relating to the short-term Bridge
Loans
(incorporated by reference to Exhibit 10.11.2 to Registrant’s 2003 Form
10-KSB).
|
10.8.3
|
Form
of Guaranty and Security Agreement relating to the short-term Bridge
Loans
(incorporated by reference to Exhibit 10.11.3 to Registrant’s 2003 Form
10-KSB).
|
10.9
|
License
and Manufacturing Agreement between M.C.M. Environmental Technologies
Inc.
and CID Lines, dated November 26, 2002 (incorporated by reference
to
Exhibit 10.14 to Amendment No. 1 to Registrant’s September 2004 Form SB-2,
filed November 5, 2004 (File No. 333-118869) (“November 2004 Form
SB-2/A-1”)).
|
10.10
|
Distribution
Agreement between M.C.M. Environmental Technologies, LTD and Euromedic
Group, dated November 1, 2002 (incorporated by reference to Exhibit
10.15
to Registrant’s November 2004 Form
SB-2/A-1).
|
10.11
|
Distribution
Agreement between M.C.M. Environmental Technologies, LTD and Lysmed,
L.L.C., dated January 12, 2001 (incorporated by reference to Exhibit
10.16
to Registrant’s November 2004 Form SB-2/A-1).
|
10.12.1
|
Purchase
Agreement for the sale of 45,000 shares of Series C Mandatory Convertible
Preferred Stock and Series A and Series B warrants (incorporated
by
reference to Exhibit 10.1 to Registrant’s February 2005 Form
8-K).
|
10.12.2
|
Registration
Rights Agreement dated February 15, 2005, by and among the Registrant
and
investors (incorporated by reference to Exhibit 10.2 to Registrant’s
February 2005 Form 8-K).
|
10.12.3
|
Amendment
and Conversion Agreement, dated February 15, 2005, by and among the
Registrant and note holders (incorporated by reference to Exhibit
10.3 to
Registrant’s February 2005 Form
8-K).
|
10.12.4
|
Exchange
Agreement dated February 15, 2005, by and among the Registrant and
certain
lenders (incorporated by reference to Exhibit 10.4 to Registrant’s
February 2005 Form 8-K).
|
10.12.5
|
Registration
Rights Agreement, dated February 15, 2005, by and among the Registrant
and
note holders (incorporated by reference to Exhibit 10.5 to Registrant’s
February 2005 Form 8-K).
|
10.13.1
|
Financial
Advisory Agreement, dated January 11, 2005, between the Registrant
and
Laidlaw & Company (UK) Ltd. (incorporated by reference to Exhibit
10.6.1 to Registrant’s February 2005 Form
8-K).
|
10.13.2
|
Amendment
to Financial Advisory Agreement, dated February 9, 2005 (incorporated
by
reference to Exhibit 10.6.2 to Registrant’s February 2005 Form
8-K).
|
10.14.1
|
Purchase
Agreement for sale of Series D Convertible Preferred Stock (incorporated
by reference to Exhibit 10.1 to Registrant’s February 2006 Form
8-K).
|
10.14.2
|
Registration
Rights Agreement, dated February 16, 2006, by and among Registrant
and
investors Purchase (incorporated by reference to Exhibit 10.2 to
Registrant’s February 2006 Form
8-K).
|
14
|
Letter
on change in certifying accountant from BDO Seidman, LLP, addressed
to the
Securities and Exchange Commission, dated March 19, 2004 (incorporated
by
reference to Exhibit 16.1 to Registrant’s Form 8-K filed for an event of
March 15, 2004).
|
23.1*
|
Consent
of Marcum & Kliegman LLP
|
23.2
|
Consent
of Thelen Reid & Priest LLP (filed as part of Exhibit
5)
|
Caprius,
Inc.
|
||
By:
|
/s/
Jonathan Joels
|
|
Jonathan
Joels
Chief
Financial Officer
|
Signature
|
Title
|
/s/
George Aaron
|
Chairman
of the Board and President
|
George
Aaron |
|
/s/
Jonathan Joels
|
Director,
Chief Financial Officer and Chief Accounting Officer
|
Jonathan Joels
|
|
/s/
Sol Triebwasser
|
Director
|
Sol
Triebwasser, Ph.D. |
|
/s/
Jeffrey L. Hymes
|
Director
|
Jeffrey L. Hymes, MD |