x
|
Annual
report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
For
the fiscal year ended December 31, 2007.
|
¨
|
Transition
report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
For
the transition period from ________ to ________.
|
Michigan
|
38-2191935
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification Number)
|
49113
Wixom Tech Drive, Wixom, Michigan
|
48393
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Issuer's
telephone number, including area code: (248)
668-9230
|
2006
|
2007
|
|||||||||||||||||||||||||||||||
Mar 31
|
Jun 30
|
Sept 30
|
Dec 31
|
Mar 31
|
Jun 30
|
Sept 30
|
Dec 31
|
|||||||||||||||||||||||||
High
|
$ | 2.00 | $ | 1.80 | $ | 1.30 | $ | 0.75 | $ | 0.70 | $ | 0.51 | $ | 0.49 | $ | 0.28 | ||||||||||||||||
Low
|
1.56 | 0.94 | 0.49 | 0.28 | 0.49 | 0.28 | 0.28 | 0.06 |
Equity Compensation Plan Information
|
||||||||||||
Plan Category
|
Number of
Securities to be
issued upon
exercise of
outstanding
options, warrants,
and rights
|
Weighted-average
exercise price of
outstanding
options, warrants,
and rights
|
Number of securities
remaining available for
future issuance under equity
compensation plans
(excluding securities
reflected in column (a))
|
|||||||||
(a)
|
(b)
|
c
|
||||||||||
Equity
compensation plans approved by security holders
|
1,496,000 | $ | 0.71 | 99,000 | ||||||||
Equity
compensation plans not approved by security holders
|
- | - | - | |||||||||
Total
|
1,496,000 | $ | 0.71 | 99,000 |
ITEM 8.
|
Changes in and
Disagreements with Accountants on Accounting and Financial
Disclosure
|
ITEM 9.
|
Directors, Executive
Officers, Promoters, Control Persons and Corporate Governance; Compliance
with Section 16(a) of the Exchange
Act
|
ITEM 10.
|
Executive
Compensation
|
ITEM 11.
|
Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder
Matters
|
ITEM 12.
|
Certain Relationships
and Related Transactions, and Director
Independence
|
Greater than 5% shareholder
|
Director
|
|||||||||||||||
John Hunter
|
John R. Kiely, III.
|
Max A. Coon
|
Total
|
|||||||||||||
Outstanding balance
as of December 31, 2006
|
||||||||||||||||
Class
2
|
$ | 150,000 | $ | 150,000 | $ | - | ||||||||||
Class
3
|
$ | - | $ | - | $ | - | ||||||||||
Total
|
$ | 150,000 | $ | 150,000 | $ | - | $ | 300,000 | ||||||||
Largest
aggregate amount of principle outstanding during period
|
||||||||||||||||
2007
|
$ | 1,184,000 | $ | 1,050,000 | $ | 250,000 | ||||||||||
2006
|
$ | 150,000 | $ | 150,000 | $ | - | ||||||||||
Aggregate
amount of transactions (See "Related Party Transaction Detail" table
below)
|
||||||||||||||||
2007
|
$ | 1,034,000 | $ | 900,000 | $ | 250,000 | ||||||||||
2006
|
$ | 150,000 | $ | 150,000 | $ | - | ||||||||||
Outstanding
balance as of December 31, 2007
|
||||||||||||||||
Class
2
|
$ | 1,184,000 | $ | 1,050,000 | $ | 250,000 | ||||||||||
Class
3
|
$ | - | $ | - | $ | - | ||||||||||
Total
|
$ | 1,184,000 | $ | 1,050,000 | $ | 250,000 | $ | 2,484,000 | ||||||||
Outstanding
balance as of November 22, 2010
|
||||||||||||||||
Class
2
|
$ | 1,781,112 | $ | 710,945 | $ | 125,000 | ||||||||||
Class
3
|
$ | 1,490,167 | $ | 1,321,844 | $ | 298,161 | ||||||||||
Total
|
$ | 3,271,279 | $ | 2,032,789 | $ | 423,161 | $ | 5,727,229 | ||||||||
Amount
of principal paid during year
|
||||||||||||||||
2007
|
$ | 61,000 | $ | - | $ | - | ||||||||||
2006
|
$ | - | $ | - | $ | - | ||||||||||
Amount
of interest paid during year
|
||||||||||||||||
Cash
2007
|
$ | - | $ | - | $ | - | ||||||||||
Notes
issued in payment of interest 2007
|
$ | - | $ | - | $ | - | ||||||||||
Value
of warrants issued 2007
|
$ | - | $ | 14,099 | $ | - | ||||||||||
Total
2007
|
$ | - | $ | 14,099 | $ | - | $ | 14,099 | ||||||||
Cash
2006
|
$ | - | $ | - | $ | - | ||||||||||
Notes
issued in payment of interest 2006
|
$ | - | $ | - | $ | - | ||||||||||
Value
of warrants issued 2006
|
$ | - | $ | - | $ | - | ||||||||||
Total
2006
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Accrued
interest at December 31
|
||||||||||||||||
Cash
2007
|
$ | 69,200 | $ | 59,292 | $ | 20,479 | ||||||||||
Value
of warrants accrued not issued 2007
|
$ | 726 | $ | 388 | $ | 215 | ||||||||||
Total
2007
|
$ | 69,926 | $ | 59,680 | $ | 20,694 | $ | 150,300 | ||||||||
Cash
2006
|
$ | 1,089 | $ | 519 | $ | - | ||||||||||
Value
of warrants accrued not issued 2006
|
$ | 2,524 | $ | 1,203 | $ | - | ||||||||||
Total
2006
|
$ | 3,613 | $ | 1,722 | $ | - | $ | 5,335 |
Related Party
|
|||||||||||||||||||||||
Note
|
Transaction Detail for
|
Transaction
|
Interest
|
Warrant
|
|||||||||||||||||||
Number
|
2007
|
Class 2 Note
|
Classs 3 Note
|
Date
|
Date due
|
rate
|
accrual rate (2)
|
||||||||||||||||
58
|
J.N.
Hunter
|
$ | 50,000 | $ | - |
01/22/07
|
01/11/08
|
10
|
1
|
||||||||||||||
59
|
J.N.
Hunter
|
$ | 145,000 | $ | - |
01/22/07
|
01/11/08
|
10
|
1
|
||||||||||||||
59
|
J.N.
Hunter (1)
|
$ | (61,000 | ) | $ | - |
02/07/07
|
n/a
|
n/a
|
|
N/A
|
||||||||||||
62
|
J.N.
Hunter
|
$ | 70,000 | $ | - |
02/22/07
|
01/11/08
|
10
|
1
|
||||||||||||||
65
|
J.N.
Hunter
|
$ | 75,000 | $ | - |
03/26/07
|
01/11/08
|
10
|
1
|
||||||||||||||
69
|
J.N.
Hunter
|
$ | 112,500 | $ | - |
04/24/07
|
01/11/08
|
10
|
1
|
||||||||||||||
70
|
J.N.
Hunter
|
$ | 92,500 | $ | - |
05/23/07
|
01/11/08
|
10
|
1
|
||||||||||||||
76
|
J.N.
Hunter
|
$ | 50,000 | $ | - |
07/17/07
|
01/11/08
|
10
|
|
1
|
|||||||||||||
78
|
J.N.
Hunter
|
$ | 100,000 | $ | - |
07/26/07
|
01/11/08
|
10
|
1
|
|
|||||||||||||
81
|
J.N.
Hunter
|
$ | 50,000 | $ | - |
08/23/07
|
01/11/08
|
10
|
1
|
||||||||||||||
82
|
J.N.
Hunter
|
$ | 50,000 | $ | - |
08/29/07
|
01/11/08
|
10
|
1
|
||||||||||||||
85
|
J.N.
Hunter
|
$ | 75,000 | $ | - |
09/25/07
|
01/11/08
|
10
|
1
|
||||||||||||||
87
|
J.N.
Hunter
|
$ | 100,000 | $ | - |
10/25/07
|
01/11/08
|
10
|
1
|
||||||||||||||
89
|
J.N.
Hunter
|
$ | 75,000 | $ | - |
11/26/07
|
01/11/08
|
10
|
1
|
||||||||||||||
91
|
J.N.
Hunter
|
$ | 50,000 | $ | - |
12/21/07
|
01/11/08
|
12
|
None
|
||||||||||||||
$ | 1,034,000 | $ | - | ||||||||||||||||||||
60
|
John
R. Kiely, III
|
$ | 50,000 | $ | - |
01/22/07
|
01/11/08
|
10
|
1
|
|
|||||||||||||
61
|
John
R. Kiely, III
|
$ | 70,000 | $ | - |
02/22/07
|
01/11/08
|
10
|
1
|
||||||||||||||
64
|
John
R. Kiely, III
|
$ | 75,000 | $ | - |
03/26/07
|
01/11/08
|
10
|
|
1
|
|||||||||||||
67
|
John
R. Kiely, III
|
$ | 112,500 | $ | - |
04/23/07
|
01/11/08
|
10
|
1
|
||||||||||||||
72
|
John
R. Kiely, III
|
$ | 50,000 | $ | - |
05/24/07
|
01/11/08
|
10
|
1
|
||||||||||||||
73
|
John
R. Kiely, III
|
$ | 42,500 | $ | - |
05/29/07
|
01/11/08
|
10
|
1
|
||||||||||||||
77
|
John
R. Kiely, III
|
$ | 50,000 | $ | - |
07/17/07
|
01/11/08
|
10
|
1
|
||||||||||||||
79
|
John
R. Kiely, III
|
$ | 75,000 | $ | - |
08/07/07
|
01/11/08
|
10
|
|
1
|
|||||||||||||
80
|
John
R. Kiely, III
|
$ | 75,000 | $ | - |
08/23/07
|
01/11/08
|
10
|
1
|
||||||||||||||
86
|
John
R. Kiely, III
|
$ | 125,000 | $ | - |
09/27/07
|
01/11/08
|
10
|
1
|
||||||||||||||
88
|
John
R. Kiely, III
|
$ | 100,000 | $ | - |
10/26/07
|
01/11/08
|
10
|
1
|
||||||||||||||
90
|
John
R. Kiely, III
|
$ | 75,000 | $ | - |
11/26/07
|
01/11/08
|
10
|
1
|
||||||||||||||
$ | 900,000 | $ | - | ||||||||||||||||||||
63
|
Max
A. Coon
|
$ | 250,000 | $ | - |
3/8/2007
|
01/11/08
|
10
|
1
|
||||||||||||||
$ | 250,000 | $ | - | ||||||||||||||||||||
Total net transactions
at December
31,
2007
|
$ | 2,184,000 | $ | - |
|
(1)
|
Principal
paid with cash
|
|
(2)
|
Expressed
as warranants/$/year. Note holder can elect to receive no warrants and
earn an additional 2% interest.
|
Related Party
|
|||||||||||||||||||||||
Note
|
Transaction Detail for
|
Transaction
|
Interest
|
Warrant
|
|||||||||||||||||||
Number
|
2006
|
Class 2 Note
|
Classs 3 Note
|
Date
|
Date due
|
rate
|
accrual rate (1)
|
||||||||||||||||
51
|
J.N.
Hunter
|
$ | 75,000 | $ | - |
11/21.06
|
01/11/08
|
|
10
|
1
|
|||||||||||||
56
|
J.N.
Hunter
|
$ | 75,000 | $ | - |
12/18/06
|
01/11/08
|
10
|
1
|
||||||||||||||
$ | 150,000 | $ | - | ||||||||||||||||||||
53
|
John
R. Kiely, III
|
$ | 94,000 | $ | - |
12/18/06
|
01/11/08
|
10
|
1
|
||||||||||||||
54
|
John
R. Kiely, III
|
$ | 56,000 | $ | - |
12/19/06
|
01/11/08
|
10
|
1
|
||||||||||||||
$ | 150,000 | $ | - | ||||||||||||||||||||
Total net transactions
at December
31,
2006
|
$ | 300,000 | $ | - |
|
(1)
|
Expressed
as warranants/$/year. Note holder can elect to receive no warrants and
earn an additional 2% interest.
|
Exhibit
|
||
Number
|
Description of Document
|
|
3.1
|
Articles
of Incorporation, as amended (filed as Exhibit 3.1 to the registrant's
Form 10-K for the year ended December 31, 1995, SEC file 0-12728, and
incorporated herein by reference).
|
|
3.2
|
Bylaws
of the Registrant, as amended (filed as Exhibit 3.2 to the registrant's
Form 10-K for the year ended December 31, 1994, SEC file 0-12728, and
incorporated herein by reference).
|
|
4.1
|
Form
of Fourth Amended Note and Warrant Purchase Agreement including Form of
Integral Vision, Inc. Class 3 Note (filed as Exhibit 4.8 to registrant’s
Form 10-K for the year ended December 31, 2003, SEC file 0-12728, and
incorporated herein by reference).
|
|
4.2
|
Securities
Purchase Agreement, Effective April 12, 2005 (filed as Exhibit 4.(A) to
registrant’s Form 8-K filed April 14, 2005, SEC file 0-12728, and
incorporated herein by reference).
|
|
4.3
|
Form
of Consent to Modifications dated November 14, 2006 modifying the terms of
the Fourth Amended Note and Warrant Purchase Agreement including Form of
Integral Vision, Inc. Class 2 Warrant (filed as Exhibit 4.9 to
registrant’s Form 10-Q for the quarter ended September 30, 2006, SEC file
0-12728, and incorporated herein by reference).
|
|
4.4
|
Form
of Consent to Modifications dated August 13, 2007 modifying the terms of
the Fourth Amended Note and Warrant Purchase Agreement (filed as Exhibit
4.4 to registrant’s Form 10-QSB for the quarter ended June 30, 2007, SEC
file 0-12728, and incorporated herein by reference).
|
|
4.5
|
Form
of Consent to Modifications dated October 10, 2007 modifying the terms of
the Fourth Amended Note and Warrant Purchase Agreement (filed as Exhibit
4.6 to registrant’s Form 10-QSB for the quarter ended September 30, 2007,
SEC file 0-12728, and incorporated herein by
reference).
|
|
4.6
|
Form
of Consent to Modifications dated January 18, 2008 modifying the terms of
the Fourth Amended Note and Warrant Purchase
Agreement.*
|
|
4.7
|
Form
of Amended Collateral Assignment of Proprietary Rights dated March 5,
2008.*
|
4.8
|
Form
of Amended Security Agreement dated March 6, 2008.*
|
|
4.9
|
Consent
to Amend and Replace Agreements dated March 12, 2008.
|
|
4.10
|
Form
of Fifth Amended and Restated Note and Warrant Purchase
Agreement.*
|
|
10.1
|
Integral
Vision, Inc. Employee Stock Option Plan (filed as Exhibit 10.5 to the
registrant's Form 10-Q for the quarter ended September 30, 1995, SEC file
0-12728, and incorporated herein by reference).
|
|
10.2
|
Form
of Confidentiality and Non-Compete Agreement Between the Registrant and
its Employees (filed as Exhibit 10.4 to the registrant's Form 10-K for the
year ended December 31, 1992, SEC File 0-12728, and incorporated herein by
reference).
|
10.3
|
Integral
Vision, Inc. 1999 Employee Stock Option Plan (filed as exhibit 10.5 to the
registrant’s Form 10-Q for the quarter ended June 30, 1999 and
incorporated herein by reference).
|
|
10.4
|
Integral
Vision, Inc. 2004 Employee Stock Option Plan (filed as exhibit 10.11 to
the registrant’s Form 10-Q for the quarter ended June 30, 2004 and
incorporated herein by reference).
|
|
10.5
|
Integral
Vision, Inc. 2008 Equity Incentive Plan.*
|
|
14
|
Code
of Ethics.*
|
|
23.1
|
Consent
of Rehmann Robson, independent registered public accounting
firm.*
|
|
31.1
|
Certification
of Chief Executive Officer of Periodic Report pursuant to Rule 13a-15(e)
or Rule 15d-15(e).
|
|
31.2
|
Certification
of Chief Financial Officer of Periodic Report pursuant to Rule 13a-15(e)
or Rule 15d-15(e).
|
|
32.1
|
Certification
by Chief Executive Officer of Periodic Report Pursuant to 18 U.S.C.
Section 1350.
|
|
32.2
|
Certification
by Chief Financial Officer of Periodic Report Pursuant to 18 U.S.C.
Section 1350.
|
*
Filed as an Exhibit to
registrant’s Form 10-KSB filed March 31, 2008, SEC file 000-12728, and
incorporated herein by
reference.
|
By:
|
/S/ CHARLES J. DRAKE
|
Charles
J. Drake, Chairman of the Board
and
Chief Executive Officer
|
|
Date: December
20, 2010
|
|
By:
|
/S/ MARK R. DOEDE
|
Mark
R. Doede, President, Chief Operating
Officer,
Chief Financial Officer, and Principal
Accounting
Officer
|
|
Date: December
20,
2010
|
/S/ CHARLES J. DRAKE
|
Chairman
of the Board, Chief
|
|
Charles
J. Drake
|
Executive
Officer, and Director
|
|
Date: December
20, 2010
|
||
/S/ MAX A. COON
|
Vice
Chairman, Secretary and Director
|
|
Max
A. Coon
|
||
Date: December
20, 2010
|
||
/S/ VINCENT SHUNSKY
|
Treasurer
and Director
|
|
Vincent
Shunsky
|
||
Date: December
20, 2010
|
||
/S/ WILLIAM B. WALLACE
|
Director
|
|
William
B. Wallace
|
||
Date: December
20, 2010
|
/S/
Rehmann Robson, P.C.
|
December 31
|
||||
|
2007
|
|||
|
(in thousands)
|
|||
Assets
|
||||
Current
assets
|
||||
Cash
|
$ | 11 | ||
Accounts
receivable
|
75 | |||
Inventories
- Note B
|
265 | |||
Other
current assets
|
97 | |||
Total
current assets
|
448 | |||
Property
and equipment
|
||||
Building
improvements
|
4 | |||
Production
and engineering equipment
|
234 | |||
Furniture
and fixtures
|
80 | |||
Computer
Equipment
|
190 | |||
Marketing/demonstration
equipment
|
139 | |||
|
647 | |||
Less
accumulated depreciation
|
431 | |||
Net
property and equipment
|
216 | |||
Other
assets - net of accumulated amortization of $1,493,000
|
34 | |||
|
34 | |||
|
$ | 698 | ||
Liabilities
and Stockholders' Deficit
|
||||
Current
liabilities
|
||||
Notes
payable
|
$ | 858 | ||
Notes
payable to related parties (see Note D)
|
2,484
|
|||
Accounts
payable
|
75 | |||
Accrued
compensation and related costs
|
298 | |||
Accrued
interest
|
46 | |||
Accrued
interest payable to related parties (see Note D)
|
150
|
|||
Accrued
product warranty
|
82 | |||
Other
accrued liabilities
|
40 | |||
Total
current liabilities
|
4,033 | |||
Long-term
debt
|
- | |||
Total
liabilities
|
4,033 | |||
Stockholders'
deficit
|
||||
Preferred
stock, 400,000 shares authorized; none issued
|
- | |||
Common
stock, without par value, stated value $.20 per share; 50,000,000 shares
authorized; 29,566,409 shares issued and outstanding
|
5,913 | |||
Additional
paid-in capital
|
39,407 | |||
Accumulated
deficit
|
(48,655 | ) | ||
Total
stockholders' deficit
|
(3,335 | ) | ||
|
$ | 698 |
Year Ended December 31,
|
||||||||
2007
|
2006
|
|||||||
(In thousands, except per share data)
|
||||||||
Revenues:
|
||||||||
Net
product sales
|
$ | 1,059 | $ | 663 | ||||
Net
revenue from product development agreements
|
92 | 172 | ||||||
Total
net revenues (See Note-B)
|
1,151 | 835 | ||||||
Costs
of sales:
|
||||||||
Costs
of sales for products
|
781 | 488 | ||||||
Cost
of sales for product development agreements
|
97 | 199 | ||||||
Depreciation
and amortization
|
17 | 54 | ||||||
Total
costs of sales
|
895 | 741 | ||||||
Gross
margin
|
256 | 94 | ||||||
Other
costs and expenses:
|
||||||||
Marketing
|
608 | 653 | ||||||
General
and administrative - net
|
1,327 | 1,250 | ||||||
Engineering
and development - net
|
1,146 | 1,214 | ||||||
Total
other costs and expenses
|
3,081 | 3,117 | ||||||
Operating
loss
|
(2,825 | ) | (3,023 | ) | ||||
Other
income
|
13 | 46 | ||||||
Interest
income
|
- | 42 | ||||||
Interest
expense
|
(68 | ) | (30 | ) | ||||
Interest
expense for related parties
|
(162
|
) |
(2
|
) | ||||
Foreign
currency translation gain (loss)
|
1 | (7 | ) | |||||
Loss
from operations before income taxes
|
(3,041 | ) | (2,974 | ) | ||||
Income
taxes
|
- | - | ||||||
Net
loss
|
$ | (3,041 | ) | $ | (2,974 | ) | ||
Basic
and diluted loss per share:
|
||||||||
Net
loss
|
$ | (0.10 | ) | $ | (0.10 | ) | ||
Weighted
average number of shares outstanding of common stock and common
stock equivalents, where applicable
|
29,534 | 29,491 |
Number of
Common
Shares
Outstanding
|
Common
Stock
|
Preferred
Stock
|
Additional
Paid-In
Capital
|
Accumulated
Deficit
|
Total
|
|||||||||||||||||||
(in thousands, except number of common shares outstanding)
|
||||||||||||||||||||||||
Balances
at January 1, 2006
|
29,491,409 | $ | 5,898 | $ | - | $ | 39,126 | $ | (42,640 | ) | $ | 2,384 | ||||||||||||
Net
loss for the year
|
(2,974 | ) | (2,974 | ) | ||||||||||||||||||||
Share-based
compensation
|
170 | 170 | ||||||||||||||||||||||
Balances
at December 31, 2006
|
29,491,409 | $ | 5,898 | $ | - | $ | 39,296 | $ | (45,614 | ) | $ | (420 | ) | |||||||||||
Net
loss for the year
|
(3,041 | ) | (3,041 | ) | ||||||||||||||||||||
Stock
options exercised
|
75,000 | 15 | (7 | ) | 8 | |||||||||||||||||||
Warrants
issued
|
21 | 21 | ||||||||||||||||||||||
Share-based
compensation
|
97 | 97 | ||||||||||||||||||||||
Balances
at December 31, 2007
|
29,566,409 | $ | 5,913 | $ | - | $ | 39,407 | $ | (48,655 | ) | $ | (3,335 | ) |
Year Ended December 31
|
||||||||
2007
|
2006
|
|||||||
(in thousands)
|
||||||||
Cash
Flows From Operating Activities:
|
||||||||
Net
loss
|
$ | (3,041 | ) | $ | (2,974 | ) | ||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||
Depreciation
|
70 | 48 | ||||||
Amortization
|
11 | 48 | ||||||
Equipment
abandonment loss
|
16 | - | ||||||
Warrants
issued in settlement of interest
|
21 | - | ||||||
Warrants
issued in settlement of interest for related parties (see Note
D)
|
- | - | ||||||
Share-based
compensation
|
97 | 170 | ||||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
(54 | ) | 56 | |||||
Inventories
|
117 | (172 | ) | |||||
Other
current assets
|
22 | (17 | ) | |||||
Accounts
payable and other current liabilities
|
116 | 108 | ||||||
Net
cash used in operating activities
|
(2,625 | ) | (2,733 | ) | ||||
Cash
Flows From Investing Activities:
|
||||||||
Purchase
of property and equipment
|
(35 | ) | (49 | ) | ||||
Additional
patent expenditures
|
(8 | ) | (12 | ) | ||||
Net
cash used in investing activities
|
(43 | ) | (61 | ) | ||||
Cash
Flows From Financing Activities:
|
||||||||
Proceeds
from sale of Class 2 Notes-net
|
491 | 50 | ||||||
Proceeds
from sale of Class 2 Notes from related parites (see Note
D)
|
2,184
|
300 | ||||||
Payments
of Class 2 Notes to related parties (see Note D)
|
(61 | ) | - | |||||
Proceeds
from exercise of stock options
|
8 | - | ||||||
Net
cash provided by financing activities
|
2,622 | 350 | ||||||
Decrease
in cash
|
(46 | ) | (2,444 | ) | ||||
Cash
at beginning of year
|
57 | 2,501 | ||||||
Cash
at end of year
|
$ | 11 | $ | 57 | ||||
Supplemental
cash flows information:
|
||||||||
Interest
paid
|
$ | 30 | $ | 30 | ||||
Supplemental
noncash investing activity:
|
||||||||
Reclassification
of inventory to equipment
|
$ | - | $ | 153 |
2007
|
||||
(in thousands)
|
||||
Raw
materials
|
$ | 265 | ||
Work
in process
|
- | |||
Finished
goods
|
- | |||
$ | 265 |
2007
|
2006
|
|||||||
(in thousands)
|
||||||||
Gross
G&A Expense
|
$ | 1,335 | $ | 1,288 | ||||
Less
allocation to cost of sales from product development
agreements
|
(8 | ) | (38 | ) | ||||
Remaining
G&A Expense
|
$ | 1,327 | $ | 1,250 |
2007
|
2006
|
|||||||
(in thousands)
|
||||||||
Gross
Engineering and Development Expense
|
$ | 1,166 | $ | 1,351 | ||||
Less
allocation to cost of sales from product development
agreements
|
(20 | ) | (137 | ) | ||||
Remaining
Engineering and Development Expense
|
$ | 1,146 | $ | 1,214 |
|
1)
|
Grant
the holders of Class 2 Notes the right to participate in future equity
financings up to the face amount of their respective
Notes.
|
|
2)
|
Issue
warrants accrued on Class 2 Notes through July 30, 2007 if requested. The
number of warrants requested by and issued to the Class 2 Note Holders was
335,545. The value of the warrants issued was $21,118 as determined using
the Black-Scholes option-pricing
model.
|
|
3)
|
Allow
Class 2 Note Holders to elect to receive accrued Class 2 warrants at the
time they amend their notes and once each
quarter.
|
|
4)
|
Extend
the maturity date to April 30,
2008.
|
2007
|
2006
|
|||||||
(in thousands)
|
||||||||
Long
Term Debt:
|
||||||||
Class
3 Notes
|
$ | - | $ | 378 | ||||
Net
Long Term Debt
|
$ | - | $ | 378 | ||||
Short
Term Debt:
|
||||||||
Class
2 Notes
|
$ | 2,964 | $ | 350 | ||||
Class
3 Notes
|
$ | 378 | $ | - | ||||
Total
Short Term Debt
|
$ | 3,342 | $ | 350 |
Greater than 5% shareholder
|
Director
|
|||||||||||||||
John Hunter
|
John R. Kiely, III.
|
Max A. Coon
|
Total
|
|||||||||||||
Outstanding
balance as of December 31, 2007
|
||||||||||||||||
Class
2
|
$ | 1,184,000 | $ | 1,050,000 | $ | 250,000 | ||||||||||
Class
3
|
$ | - | $ | - | $ | - | ||||||||||
Total
|
$ | 1,184,000 | $ | 1,050,000 | $ | 250,000 | $ | 2,484,000 | ||||||||
Amount
of principal paid during year
|
||||||||||||||||
2007
|
$ | 61,000 | $ | - | $ | - | ||||||||||
2006
|
$ | - | $ | - | $ | - | ||||||||||
Amount
of interest paid during year
|
||||||||||||||||
Cash
2007
|
$ | - | $ | - | $ | - | ||||||||||
Notes
issued in payment of interest 2007
|
$ | - | $ | - | $ | - | ||||||||||
Value
of warrants issued 2007
|
$ | - | $ | 14,099 | $ | - | ||||||||||
Total
2007
|
$ | - | $ | 14,099 | $ | - | $ | 14,099 | ||||||||
Cash
2006
|
$ | - | $ | - | $ | - | ||||||||||
Notes
issued in payment of interest 2006
|
$ | - | $ | - | $ | - | ||||||||||
Value
of warrants issued 2006
|
$ | - | $ | - | $ | - | ||||||||||
Total
2006
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Accrued
interest at December 31
|
||||||||||||||||
Cash
2007
|
$ | 69,200 | $ | 59,292 | $ | 20,479 | ||||||||||
Value
of warrants accrued not issued 2007
|
$ | 726 | $ | 388 | $ | 215 | ||||||||||
Total
2007
|
$ | 69,926 | $ | 59,680 | $ | 20,694 | $ | 150,300 | ||||||||
Cash
2006
|
$ | 1,089 | $ | 519 | $ | - | ||||||||||
Value
of warrants accrued not issued 2006
|
$ | 2,524 | $ | 1,203 | $ | - | ||||||||||
Total
2006
|
$ | 3,613 | $ | 1,722 | $ | - | $ | 5,335 |
2007
|
2006
|
|||||||
(in thousands)
|
||||||||
Deferred
tax liabilities:
|
||||||||
Tax
depreciation
|
$ | 20 | $ | - | ||||
Total
deferred tax liabilities
|
20 | - | ||||||
Deferred
tax assets:
|
||||||||
Net
operating loss carryforwards
|
16,301 | 15,294 | ||||||
Credit
carryforwards
|
331 | 331 | ||||||
Inventory
reserve
|
27 | 27 | ||||||
Warranty
reserve
|
28 | 17 | ||||||
Other
|
103 | 113 | ||||||
Total
deferred tax assets
|
16,790 | 15,782 | ||||||
Valuation
allowance for deferred tax assets
|
16,770 | 15,782 | ||||||
Net
deferred tax assets
|
20 | - | ||||||
Net
deferred taxes
|
$ | - | $ | - |
2007
|
2006
|
|||||||
(in thousands)
|
||||||||
Net
income (loss)
|
$ | (3,041 | ) | $ | (2,974 | ) | ||
Foreign
net income (loss)
|
- | - | ||||||
U.S.
net income (loss)
|
$ | (3,041 | ) | $ | (2,974 | ) | ||
Tax
provision (benefit) at U.S. statutory rates
|
$ | (1,034 | ) | $ | (1,011 | ) | ||
Change
in valuation allowance
|
989 | 957 | ||||||
Nondeductible
expenses
|
45 | 54 | ||||||
$ | - | $ | - |
2007
|
2006
|
|||||||
(in thousands, except per share data)
|
||||||||
Numerator
for basic and diluted loss per share - loss available to common
stockholders
|
||||||||
Net
loss
|
$ | (3,041 | ) | $ | (2,974 | ) | ||
*there
was no effect of dilutive securities, see below
|
||||||||
Denominator
for basic and diluted loss per share - weighted average
shares
|
29,534 | 29,491 | ||||||
*there
was no effect of dilutive securities, see below
|
||||||||
Basic
and diluted loss per share:
|
||||||||
Net
loss
|
$ | (0.10 | ) | $ | (0.10 | ) |
Year Ended December 31
|
||||||||
2007
|
2006
|
|||||||
(in thousands)
|
||||||||
Expected
Life (in years)
|
6.0 | 6.0 | ||||||
Expected
volatility
|
77.70 | % | 82.7 | % | ||||
Risk-free
interest rate
|
4.11 | % | 4.90 | % | ||||
Expected
dividend yield
|
0 | % | 0 | % | ||||
Expected
forfeiture rate
|
0 | % | 0 | % |
2007
|
2006
|
|||||||||||||||
Shares
|
Weighted
Average
Exercise Price
|
Shares
|
Weighted
Average
Exercise Price
|
|||||||||||||
(number of shares in thousands) | ||||||||||||||||
Outstanding
at January 1
|
1,309 | $ | 0.95 | 1,114 | $ | 0.97 | ||||||||||
Granted
|
475 | 0.36 | 210 | 0.60 | ||||||||||||
Exercised
|
(75 | ) | 0.10 | 0 | 0.00 | |||||||||||
Expired
|
(213 | ) | 1.53 | (15 | ) | 6.25 | ||||||||||
Outstanding at
December 31($.10
to $1.71 per share)
|
1,496 | $ | 0.71 | 1,309 | $ | 0.95 | ||||||||||
Exercisable
($.10 to $1.71 per share)
|
846 | $ | 0.80 | 1,099 | $ | 0.90 |
Shares
|
Weighted
Average Grant-Date Fair
ValueExercise
Price
|
|||||||
Nonvested
at January 1, 2007
|
210,000 | $ | 0.77 | |||||
Granted
|
475,000 | 0.36 | ||||||
Forfeited
|
(35,000 | ) | 0.77 | |||||
Vested
|
0 | 0.00 | ||||||
Nonvested
at December 31, 2007
|
650,000 | $ | 0.47 |
2007
|
2006
|
|||||||
(in
thousands)
|
||||||||
Marketing
|
$ | 29 | $ | 33 | ||||
Engineering
and Development
|
38 | 94 | ||||||
General
and Administrative
|
30 | 43 | ||||||
Total
share-based compensation expense
|
$ | 97 | $ | 170 |
Range
of
Exercise
Prices
|
Number
Outstanding
|
Weighted
Average
Remaining
Life
|
Number
Exercisable
|
|||||||||
(number
of shares in thousands)
|
||||||||||||
$.10
to $.60
|
1,009 | 7.6 | 359 | |||||||||
$1.03
to $1.71
|
487 | 5.3 | 487 | |||||||||
$.10
to $1.71
|
1,496 | 6.8 | 846 |
Weighted
Average
Exercise
Price
|
Number
Outstanding
|
Weighted
Average
Remaining
Life
|
Number
Exercisable
|
|||||||||||||
(number
of shares in thousands)
|
||||||||||||||||
Warrants
|
$ | 1.60 | 3,500 | 2.28 | 3,500 | |||||||||||
Class
2 Notes
|
$ | 1.31 | 657 | 2.43 | 657 | |||||||||||
Class
3 Notes
|
$ | 1.00 | 378 | 0.25 | 378 | |||||||||||
1995
Employee Stock Option Plan
|
$ | 0.54 | 312 | 3.08 | 312 | |||||||||||
1999
Employee Stock Option Plan
|
$ | 0.28 | 205 | 4.53 | 205 | |||||||||||
2004
Employee Stock Option Plan
|
$ | 0.78 | 979 | 8.52 | 329 | |||||||||||
$ | 1.30 | 6,031 | 3.30 | 5,381 |
2007
|
2006
|
|||||||
(in
thousands)
|
||||||||
Balance
as of January 1
|
$ | 49 | $ | 77 | ||||
Charges/(credits)
to expense
|
40 | (12 | ) | |||||
Utilization/payment
|
(7 | ) | (16 | ) | ||||
Balance
as of December 31
|
$ | 82 | $ | 49 |
Year
Ended December 31
|
||||||||
2007
|
2006
|
|||||||
(in
thousands)
|
||||||||
Net
revenues by geographic area:
|
||||||||
North
America
|
$ | 528 | $ | 835 | ||||
Europe
|
166 | - | ||||||
Asia
|
457 | - | ||||||
$ | 1,151 | $ | 835 |
Corporate
Officers
|
Corporate
Directory
|
|
Charles J. Drake, 67, is
CEO and Chairman of the Board of Integral Vision, Inc. Mr.
Drake founded the Company (originally known as Medar) in 1969 and has
served as Chief Executive Officer since 1978.
|
Corporate
Headquarters
49113
Wixom Tech Drive
Wixom,
MI 48393
+1
(248) 668-9230
+1
(248) 668-9384 fax
|
|
Mark R. Doede, 50, is
President, Chief Operating Officer, and Chief Financial Officer of
Integral Vision Inc. Mr. Doede has served as an officer since
1989.
|
Independent
Auditors
Rehmann
Robson
Troy,
MI
|
|
General
Counsel
|
||
Jeffrey J. Becker, 46,
is Senior Vice President of Integral Vision, Inc.
|
J.M.
Warren Law Offices, P.C.
Lansing,
MI
|
|
Andrew Blowers, 40, is
Chief Technical Officer of Integral Vision, Inc.
|
Stock
Trading
Over
the Counter Bulletin Board (OTCBB)
Symbol: INVI
|
|
Paul Zink, 42, is Vice
President of
|
||
Applications
of Integral Vision, Inc.
|
Stock Registrar and Transfer
Agent
Registrar
and Transfer Company
Cranford,
NJ
+1
(908) 497-2300
|
|
Board
of Directors
|
||
Form
10-KSB
|
||
Charles
J. Drake
Chairman
of the Board of Directors, Integral Vision, Inc.
Chief Executive Officer, Integral Vision, Inc.
|
Interested
stockholders may obtain, without charge, a copy of the Company’s Annual
Report
on Form 10-KSB, as filed with the Securities and Exchange Commission, upon
written request to:
|
|
Max
A. Coon
|
||
Vice
Chairman and Secretary of the Board of
|
Investor
Relations
|
|
Directors,
Integral Vision, Inc.
|
Integral
Vision, Inc.
|
|
President
and Chairman of the Board, Maxco, Inc.
|
49113
Wixom Tech Drive
|
|
Wixom,
MI 48393
|
||
Vincent
Shunsky
|
||
Director,
Integral Vision, Inc.
|
Investor/Analyst
Information
|
|
Treasurer,
Integral Vision, Inc.
Partner,
Gannon Group, P.C.
|
Stockholder
and analyst inquiries concerning
the
Company should be addressed to:
|
|
William
B. Wallace
|
Investor
Relations
|
|
Director,
Integral Vision, Inc.
|
Integral
Vision, Inc.
|
|
Senior
Managing Director, Equity Partners, Ltd.
|
49113
Wixom Tech Drive
|
|
Wixom,
MI 48393
|
||
Guerrant
Associates
|
||
Laura
Guerrant
|
||
+1
(808) 882-1467
|
||
E-Mail
Investor Relations
|
||
cdrake@iv-usa.com
|
||
lguerrant@guerrantir.com
|
||
On
the World Wide Web
|
||
www.iv-usa.com
|
Exhibit
Number
|
Exhibit
Index Description
|
|
4.6
|
Form
of Consent to Modifications dated January 18, 2008 modifying the terms of
the Fourth Amended Note and Warrant Purchase Agreement.*
|
|
4.7
|
Form
of Amended Collateral Assignment of Proprietary Rights dated March 5,
2008.*
|
|
4.8
|
Form
of Amended Security Agreement dated March 6, 2008.*
|
|
4.9
|
Consent
to Amend and Replace Agreements dated March 12, 2008.
|
|
4.10
|
Form
of Fifth Amended and Restated Note and Warrant Purchase
Agreement.*
|
|
10.5
|
Integral
Vision, Inc. 2008 Equity Incentive Plan.*
|
|
14
|
Code
of Ethics.*
|
|
23.1
|
Consent
of Rehmann Robson, independent registered public accounting
firm.*
|
|
31.1
|
Certification
of Chief Executive Officer of periodic report pursuant to Rule 13a-15(e)
or Rule 15d-15(e).
|
|
31.2
|
Certification
of Chief Financial Officer of periodic report pursuant to Rule 13a-15(e)
or Rule 15d-15(e).
|
|
32.1
|
Certification
by Chief Executive Officer of Periodic Report Pursuant to 18 U.S.C.
Section 1350.
|
|
32.2
|
Certification
by Chief Financial Officer of Periodic Report Pursuant to 18 U.S.C.
Section 1350.
|