Oklahoma
|
73-1479206
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
incorporation
or organization)
|
Identification
No.)
|
Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer o (do
not
check
if smaller reporting company)
|
Smaller
reporting company x
|
Page
|
||
PART
I
|
3
|
|
Item
1.
|
Financial
Statements
|
3
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operation
|
20
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
26
|
Item
4T.
|
Controls
and Procedures
|
26
|
PART
II
|
26
|
|
Item
1.
|
Legal
Proceedings
|
26
|
Item
1A.
|
Risk
Factors
|
26
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
26
|
Item
3.
|
Defaults
Upon Senior Securities
|
26
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
26
|
Item
5.
|
Other
Information
|
27
|
Item
6.
|
Exhibits
|
27
|
SIGNATURES
|
28
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Page
|
|
Balance
Sheets as of March 31, 2009 (Unaudited) and December 31, 2008
(Audited)
|
4
|
Statements
of Operations for the three months ended March 31, 2009 and 2008 and
period from inception (January 1, 2001) to March 31, 2009
(Unaudited)
|
5
|
Statements
of Changes in Stockholders' Deficiency for period from inception (January
1, 2001) to March 31, 2009 (Unaudited)
|
6
|
Statements
of Cash Flows for the three months ended March 31, 2009 and 2008
and period from inception (January 1, 2001) to March 31, 2009
(Unaudited)
|
9
|
Notes
to Financial Statements, March 31, 2009 (Unaudited)
|
10
|
March 31, 2009
(Unaudited)
|
December 31, 2008
(Audited)
|
|||||||
Assets
|
||||||||
Current
assets:
|
||||||||
Cash
|
$ | 24,430 | $ | 48,400 | ||||
Prepaid
expenses
|
21,750 | 16,113 | ||||||
Total
current assets
|
46,180 | 64,513 | ||||||
Net
property and equipment
|
29,552 | 31,537 | ||||||
Debt
issue costs, net
|
46,910 | 56,978 | ||||||
Deposits-other
|
17,315 | 17,315 | ||||||
Total
Assets
|
$ | 139,957 | $ | 170,343 | ||||
Liabilities
and Stockholders' Deficiency
|
||||||||
Current
liabilities:
|
||||||||
Current
maturities of convertible debentures payable
|
$ | 252,500 | $ | 364,000 | ||||
Warrant
exercise advances
|
49,130 | 140,500 | ||||||
Accounts
payable
|
1,390,235 | 1,135,887 | ||||||
Accrued
salaries
|
70,649 | 59,615 | ||||||
Accrued
interest on debentures
|
17,720 | 6,808 | ||||||
Total
current liabilities
|
1,780,234 | 1,706,810 | ||||||
Convertible
debentures payable, less current maturities
|
674,199 | 675,279 | ||||||
Total
Liabilities
|
2,454,433 | 2,382,089 | ||||||
Stockholders'
deficiency:
|
||||||||
Common
stock $.0002 par, 250,000,000 shares authorized; 175,505,294 and
157,515,766 shares issued and outstanding at March 31, 2009 and December
31, 2008, respectively
|
35,101 | 31,503 | ||||||
Additional
paid-in capital
|
9,163,240 | 8,766,830 | ||||||
Deficit
accumulated during development stage
|
(11,512,817 | ) | (11,010,079 | ) | ||||
Total
stockholders' deficiency
|
(2,314,476 | ) | (2,211,746 | ) | ||||
Total
Liabilities and Stockholders' Deficiency
|
$ | 139,957 | $ | 170,343 |
Three Months
Ended
March 31, 2009
|
Three Months
Ended
March 31, 2008
|
Inception to
March 31, 2009
|
||||||||||
Income:
|
||||||||||||
License
Fee
|
$ | - | $ | - | $ | 25,000 | ||||||
Sales
|
- | - | 17,900 | |||||||||
Total
income
|
- | - | 42,900 | |||||||||
Expenses:
|
||||||||||||
Research
and development
|
46,695 | 300,000 | 2,510,256 | |||||||||
General
and administrative
|
435,442 | 917,828 | 8,783,468 | |||||||||
Interest
|
20,601 | 32,867 | 261,993 | |||||||||
Total
expenses
|
502,738 | 1,250,695 | - | |||||||||
Net
loss
|
$ | ( 502,738 | ) | $ | (1,250,695 | ) | $ | (11,512,817 | ) | |||
Loss
per share:
|
||||||||||||
Basic
and diluted
|
$ | (0.003 | ) | $ | (0.009 | ) | ||||||
Weighted
average shares outstanding,
Basic and diluted |
163,635,313 | 136,679,793 |
Deficit
|
||||||||||||||||||||
Accumulated
|
||||||||||||||||||||
Common
Stock
|
Additional
|
During
the
|
||||||||||||||||||
Shares
|
Par
Value
|
Paid-In
Capital
|
Development
Stage
|
Total
|
||||||||||||||||
Balance,
January 1, 2001 – as reorganized
|
27,723,750 | $ | 27,724 | $ | 193,488 | $ | - | $ | 221,212 | |||||||||||
Adjustment
to accrue compensation earned but not recorded
|
- | - | - | (60,000 | ) | (60,000 | ) | |||||||||||||
Stock
issued for services
|
2,681,310 | 2,681 | 185,450 | - | 188,131 | |||||||||||||||
Stock
issued for cash
|
728,500 | 729 | 72,121 | - | 72,850 | |||||||||||||||
Net
loss for the year
|
- | - | - | (259,221 | ) | (259,221 | ) | |||||||||||||
Balance,
December 31, 2001
|
31,133,560 | 31,134 | 451,059 | (319,221 | ) | 162,972 | ||||||||||||||
Adjustment
to record compensation earned but not recorded
|
- | - | - | (60,000 | ) | (60,000 | ) | |||||||||||||
Stock
issued for services
|
3,077,000 | 3,077 | 126,371 | - | 129,448 | |||||||||||||||
Stock
issued for cash
|
1,479,000 | 1,479 | 146,421 | - | 147,900 | |||||||||||||||
Net
loss for the year
|
- | - | - | (267,887 | ) | (267,887 | ) | |||||||||||||
Balance,
December 31, 2002
|
35,689,560 | 35,690 | 723,851 | (647,108 | ) | 112,433 | ||||||||||||||
Adjustment
to record compensation earned but not recorded
|
- | - | - | (90,000 | ) | (90,000 | ) | |||||||||||||
Stock
issued for services
|
15,347,000 | 15,347 | - | - | 15,347 | |||||||||||||||
Stock
issued for cash
|
1,380,000 | 1,380 | 33,620 | - | 35,000 | |||||||||||||||
Reverse
split 1:10
|
(47,174,904 | ) | - | - | - | - | ||||||||||||||
Par
value $0.0001 to $0.0002
|
- | (51,369 | ) | 51,369 | - | - | ||||||||||||||
Net
loss for the year
|
- | - | - | (51,851 | ) | (51,851 | ) | |||||||||||||
Balance,
December 31, 2003
|
5,241,656 | 1,048 | 808,840 | (788,959 | ) | 20,929 | ||||||||||||||
Additional
Founders shares issued
|
25,000,000 | 5,000 | (5,000 | ) | - | - | ||||||||||||||
Stock
issued for services
|
24,036,000 | 4,807 | 71,682 | - | 76,489 | |||||||||||||||
Stock
issued for cash
|
360,000 | 72 | 28,736 | - | 28,808 | |||||||||||||||
Warrants
issued to purchase common stock at $.025
|
- | - | 18,900 | - | 18,900 | |||||||||||||||
Warrants
issued to purchase common stock at $.05
|
- | - | 42,292 | - | 42,292 | |||||||||||||||
Stock
warrants exercised
|
2,100,000 | 420 | 60,580 | - | 61,000 | |||||||||||||||
Net
loss for the year
|
- | - | - | (617,875 | ) | (617,875 | ) | |||||||||||||
Balance,
December 31, 2004
|
56,737,656 | 11,347 | 1,026,030 | (1,406,834 | ) | (369,457 | ) | |||||||||||||
Stock
issued for services
|
5,850,000 | 1,170 | 25,201 | - | 26,371 | |||||||||||||||
Stock
issued to settle liabilities
|
5,000,000 | 1,000 | 99,000 | - | 100,000 | |||||||||||||||
Stock
issued for cash
|
1,100,000 | 220 | 72,080 | - | 72,300 |
Deficit
|
||||||||||||||||||||
Accumulated
|
||||||||||||||||||||
Additional
|
During
the
|
|||||||||||||||||||
Common
|
Stock
|
Paid-In
|
Development
|
|||||||||||||||||
Shares
|
Par Value
|
Capital
|
State
|
Total
|
||||||||||||||||
Warrants
issued to purchase common stock at $.025
|
- | - | 62,300 | - | 62,300 | |||||||||||||||
Warrants
issued to purchase common stock at $.05
|
- | - | 140,400 | - | 140,400 | |||||||||||||||
Stock
warrants exercised
|
5,260,000 | 1,052 | 172,948 | - | 174,000 | |||||||||||||||
Net
loss for the year
|
- | - | - | (592,811 | ) | (592,811 | ) | |||||||||||||
Balance,
December 31, 2005
|
73,947,656 | 14,789 | 1,597,959 | (1,999,645 | ) | (386,897 | ) | |||||||||||||
Stock
issued for services
|
4,700,000 | 940 | 205,597 | - | 206,537 | |||||||||||||||
Debentures
converted
|
3,000,000 | 600 | 149,400 | - | 150,000 | |||||||||||||||
Stock
issued for cash
|
200,000 | 40 | 16,160 | - | 16,200 | |||||||||||||||
Warrants
issued to purchase common stock
|
- | - | 33,800 | - | 33,800 | |||||||||||||||
Warrants
converted to purchase common stock
|
16,489,000 | 3,297 | 565,203 | - | 568,500 | |||||||||||||||
Net
loss for the year
|
- | - | - | (1,469,888 | ) | (1,469,888 | ) | |||||||||||||
Balance,
December 31, 2006
|
98,327,656 | 19,666 | 2,568,119 | (3,469,533 | ) | (881,748 | ) | |||||||||||||
Stock
issued for services
|
817,727 | 164 | 155,262 | - | 155,426 | |||||||||||||||
Stock
issued for interest
|
767,026 | 153 | 38,198 | - | 38,351 | |||||||||||||||
Options
issued for services
|
- | - | 1,274,666 | - | 1,274,666 | |||||||||||||||
Debentures
converted
|
17,215,200 | 3,442 | 1,673,741 | - | 1,677,183 | |||||||||||||||
Stock
issued for cash
|
1,188,960 | 238 | 191,898 | - | 192,136 | |||||||||||||||
Options
exercised
|
222,707 | 45 | (45 | ) | - | - | ||||||||||||||
Warrants
issued to purchase common stock
|
- | - | 87,864 | - | 87,864 | |||||||||||||||
Warrants
converted to purchase common stock
|
8,585,956 | 1,717 | 462,203 | - | 463,920 | |||||||||||||||
Net
loss for the year
|
- | - | - | (3,928,996 | ) | (3,928,996 | ) | |||||||||||||
Balance,
December 31, 2007
|
127,125,232 | 25,425 | 6,451,906 | (7,398,529 | ) | (921,198 | ) |
Deficit
|
||||||||||||||||||||
Accumulated
|
||||||||||||||||||||
Additional
|
During
the
|
|||||||||||||||||||
Common
|
Stock
|
Paid-In
|
Development
|
|||||||||||||||||
Shares
|
Par Value
|
Capital
|
Stage
|
Total
|
||||||||||||||||
Stock
issued for cash
|
515,677 | $ | 103 | $ | 24,897 | $ | - | $ | 25,000 | |||||||||||
Warrants
exercised
|
1,347,261 | 269 | 362,425 | - | 362,694 | |||||||||||||||
Options
issued and accrued
|
- | - | 654,199 | - | 654,199 | |||||||||||||||
Debentures
converted
|
15,257,163 | 3,052 | 962,257 | - | 965,309 | |||||||||||||||
Options
exercised and escrowed shares
|
8,671,460 | 1,734 | (1,734 | ) | - | - | ||||||||||||||
Stocks
issued for service
|
4,598,973 | 920 | 312,880 | - | 313,800 | |||||||||||||||
Net
loss for the year
|
- | - | - | (3,611,550 | ) | (3,611,550 | ) | |||||||||||||
Balance,
December 31, 2008
|
157,515,766 | 31,503 | 8,766,830 | (11,010,079 | ) | (2,211,746 | ) | |||||||||||||
Stock
issued for cash
|
666,666 | 133 | 19,867 | - | 20,000 | |||||||||||||||
Warrants
exercised
|
10,800 | 2 | 117,718 | - | 117,720 | |||||||||||||||
Debentures
converted
|
10,454,272 | 2,091 | 110,939 | - | 113,030 | |||||||||||||||
Stocks
issued for service
|
6,857,790 | 1,372 | 147,866 | - | 149,258 | |||||||||||||||
Net
loss for the period
|
- | - | - | (502,738 | ) | (502,738 | ) | |||||||||||||
Balance,
March 31, 2009
|
175,505,294 | $ | 35,101 | $ | 9,163,240 | $ | (11,512,817 | ) | $ | (2,314,476 | ) |
Three Months
Ended
March 31, 2009
|
Three Months
Ended
March 31, 2008
|
Inception to
March 31,
2009
|
||||||||||
Cash
Flows from Operating Activities
|
||||||||||||
Net
loss
|
$ | (502,738 | ) | $ | (1,250,695 | ) | $ | (11,512,817 | ) | |||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||||
Options
issued for services
|
- | 447,897 | 1,928,865 | |||||||||
Stock
issued for services
|
149,258 | - | 1,260,808 | |||||||||
Stock
issued for interest
|
- | - | 38,351 | |||||||||
Depreciation
|
1,985 | 978 | 9,729 | |||||||||
Amortization
of deferred debt issue costs
|
10,068 | 10,080 | 15,371 | |||||||||
Asset
impairments
|
- | - | 292,202 | |||||||||
Change
in:
|
||||||||||||
Prepaid
expenses and other assets
|
(5,637 | ) | 8,340 | ( 178,287 | ) | |||||||
Accounts
payable and accrued liabilities
|
276,294 | 122,484 | 1,507,602 | |||||||||
Net
cash used in operating activities
|
(70,770 | ) | (660,916 | ) | ( 6,638,176 | ) | ||||||
Cash
Flows from Investing Activities
|
||||||||||||
Purchase
of office furniture and equipment
|
- | (5,649 | ) | ( 39,281 | ) | |||||||
Cash
Flows from Financing Activities
|
||||||||||||
Proceeds
from stock and warrant sales and exercise of warrants
|
46,800 | 94,270 | 2,793,164 | |||||||||
Proceeds
from issuance of debentures
|
- | 746,213 | 3,908,713 | |||||||||
Net
cash provided by financing activities
|
46,800 | 840,483 | 6,701,877 | |||||||||
Net
increase (decrease) in cash
|
(23,970 | ) | 173,918 | 24,420 | ||||||||
Cash,
beginning of period
|
48,400 | 705,519 | 10 | |||||||||
Cash,
end of period
|
$ | 24,430 | $ | 879,437 | $ | 24,430 | ||||||
Supplemental Disclosures
|
||||||||||||
Non-Cash
Investing and Financing Activities
|
||||||||||||
Conversion
of debentures to common stock
|
$ | 208,950 | $ | 273,351 | $ | 3,001,441 | ||||||
Cash
paid for interest
|
$ | 6,808 | $ | 32,867 | $ | 239,134 |
March
31,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
Senior
Convertible Debentures:
|
||||||||
9.75%
Debenture due July 31, 2009
|
$ | 252,500 | $ | 364,000 | ||||
6.25%
Debenture due 2009
|
- | - | ||||||
6.25%
Debenture due 2010
|
578,601 | 578,601 | ||||||
4.75%
Debentures due 2011
|
95,598 | 96,678 | ||||||
Total
Debentures
|
926,699 | 1,039,279 | ||||||
Less
Current Maturities
|
(252,500 | ) | (364,000 | ) | ||||
Long-term
Debentures
|
$ | 674,199 | $ | 675,279 |
|
·
|
Annual salary of
$250,000;
|
|
·
|
Cash bonus equal to twenty-five
percent (25%) of the annual salary in the event the Company records
revenue of $500,000 for the calendar year 2007; and Mr. Bhaman is an
employee of the Company;
|
|
·
|
Grant of 100,000 stock options
valued at $21,032 with a term of 10 years and an exercise price of $0.080
per share which vest on the commencement date of employment,
May 1, 2007;
|
|
·
|
Grant of 200,000 stock options
valued at $44,064 with a term of 10 years and an exercise price of $1.00
per share which vest on May 1, 2008;
and
|
|
·
|
Grant of 200,000 stock options
valued at $32,211 with a term of 10 years and an exercise price of $1.50
per share which vest on May 1,
2009.
|
|
·
|
Annual salary of $175,000 until
the achievement of certain technical milestones as provided in the
Employment Agreement (the “Technical Milestones”). Upon achievement of the
Technical Milestones, the annual salary shall increase to
$200,000;
|
|
·
|
Commission which shall not exceed
3% of sales of the Company’s Pixel Precision™ and CSpace™ technologies
products, which commission shall not exceed $30,000 for the 12 month
period commencing on October 1, 2008 and $50,000 for the 12 month period
commencing on October 1, 2009;
and
|
|
·
|
Grant of 5,000,000 incentive
stock options with a term of 10 years and an exercise price of $0.085 per
share which vest as follows:
|
|
1.
|
The first installment of 500,000
options, valued at $33,622, are vested and exercisable on October 1, 2008,
the date Dr. Refai commences full-time
employment;
|
|
2.
|
3,500,000 options, valued at
$235,357, vesting in accordance with certain technical achievements,
deliverables and milestones as provided in the Employment Agreement;
and
|
|
3.
|
1,000,000 options vesting in
accordance with certain non-technical, general milestones as provided in
the Employment Agreement or upon severance of the Employment Agreement
under certain conditions as provided in the Employment
Agreement.
|
Attached
Warrants
|
Golden State
Warrants
|
Options
|
||||||||||
Outstanding
December 31, 2008
|
852,321
|
966,783
|
20,111,540
|
|||||||||
Granted
|
333,334
|
-
|
-
|
|||||||||
Exercised
|
-
|
|
(10,800)
|
-
|
||||||||
Cancelled
|
-
|
|
-
|
(6,575,000
|
)
|
|||||||
Outstanding
March 31, 2009
|
1,185,655
|
955,983
|
13,536,540
|
2009
|
$
|
20,377
|
||
2010
|
27,570
|
|||
2011
|
11,573
|
|||
$
|
59,520
|
Description
of Provisional Patent Application as Filed
|
Description
of Utility Patent
Application
Filing (Combined)
|
Date
of Filing
|
||
Swept
Volume Display
|
Swept
Volume Display
|
September
2006
|
||
Colorful
Translation Light Surface 3D Display
|
Light
Surface Display for
|
April
2007
|
||
Colorful
Translation 3D Volumetric Display
|
Rendering
Three-Dimensional
|
|||
3D
Light Surface Display
|
Image
(Combined)
|
|||
Volumetric
Liquid Crystal Display
|
Volumetric
Liquid Crystal Display
|
April
2007
|
||
for
Rendering Three-Dimensional
|
||||
Image
(Combined)
|
||||
Computer
System Interaction with DMD
|
Computer
System Interaction with DMD
|
January
2008
|
||
Virtual
Moving Screen for Rendering Three Dimensional Image
|
Utility
Patent Application to be filed
|
January
2008
(Provisional)
|
||
Optically
Controlled Light Emitting and System for Optically Written 2D and 3D
Displays
|
|
Utility
Patent Application to be filed
|
|
April
2008
(Provisional)
|
·
|
Continue
work on development of blue and red up-conversion
materials.
|
|
·
|
Synthesize
near-transparent projection media suitable for dispersion of display
materials.
|
|
·
|
Investigate
the use of additional technologies for development of image space that
enhance the commercialization of the technology. Dr. Hakki Refai has begun
collaboration with parties outside of OU to explore alternate material
development strategies.
|
|
·
|
Demonstrate
improvements in optical properties for transparent projection materials
for Static Volumetric Display and
Nano-materials.
|
|
·
|
Continue
to generate revenue from Pixel Precision™ the DMD Control Software for DMD
Application development markets
|
|
·
|
Develop
next generation of Pixel Precision™ software for controlling multiple DMDs
as well as for controlling the next generation of the DMD-Discovery™
series
|
·
|
Support Pixel Precision™ for the Discovery 4000 series (D4000). |
|
·
|
Continue
to pursue new 3D opportunities across a broad technological spectrum, with
the ultimate goal of the creation of a “free space” 3D display (i.e., one
without a visible containment
vessel).
|
|
·
|
Research
and development expenses pursuant to our Sponsored Research Agreement with
the University of Oklahoma. This includes development of an initial
demonstrable prototype and a second prototype for static volume
technology
|
|
·
|
Acceleration
of R&D through increased research personnel as well as other
research agencies
|
|
·
|
General
and Administrative expenses: salaries, insurance, investor related
expenses, rent, travel, website,
etc.
|
|
·
|
Hiring
executive officers for technology, operations and
finance
|
|
·
|
Development,
support and operational costs related to Pixel Precision™
software
|
|
·
|
Professional
fees for accounting and audit; legal services for securities and
financing; patent research and
protection
|
Exhibit
Number
|
Description of Exhibit
|
|
31.1
|
Certifications
required by Rule 13a-14, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
31.2
|
|
Certification
of Chief Executive Officer and Principal Accounting Officer pursuant to 18
U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
|
3DICON
CORPORATION
|
||
|
||
/s/
Martin Keating
|
||
May
20, 2009
|
Martin
Keating
|
|
Chief
Executive Officer, Acting Chief Financial
Officer
and Director (Principal Executive Officer,
Principal
Accounting Officer and
Principal
Financial Officer)
|
a)
|
designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;
|
b)
|
designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
c)
|
evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such
evaluation;
|
d)
|
disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting;
|
Dated:
May 20, 2009
|
By:
|
/s/ Martin Keating
|
Martin
Keating
Chief
Executive Officer and Acting Chief Financial
Officer
|
|
(1)
|
The
Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934;
and
|
|
(2)
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
Date:
May 20, 2009
|
By:
|
/s/ Martin Keating
|
Martin
Keating
Chief
Executive Officer and Acting Chief Financial
Officer
|