AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 11,
2008
Registration
No. 333-___________
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Pre-Effective
Amendment No. 1 to
FORM
S-3
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
NEW
GENERATION BIOFUELS HOLDINGS, INC.
(
Exact
name of registrant as specified in its charter)
Florida
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26-0067474
|
(State
or other jurisdiction of incorporation or organization)
|
|
(I.R.S.
Employer Identification No.)
|
1000
Primera Boulevard,
Lake Mary, Florida
32746
(443)
535-8660
(Address,
including zip code , and telephone number, including area code, of registrant’s
principal executive offices)
Cary
J. Claiborne
Chief
Financial Officer and Secretary
New
Generation Biofuels Holdings, Inc.
1000
Primera Boulevard
Lake
Mary, Florida 32746
(443)
535-8660
(Name,
address including zip code , and telephone number, including area code , of
agent for service)
Copy
to:
Steven
M. Kaufman, Esq.
Hogan
& Hartson LLP
555
Thirteenth Street N.W.
Washington,
DC 20004
Tel:
(202) 637-5600
Approximate
date
of
commencement of proposed sale to the public:
As
soon as practicable after the effective date of this
Registration
Statement
and
from time to time thereafter.
If
the
only securities being registered on this form are being offered pursuant to
dividend or interest reinvestment plans, please check the following box.
o
If
any of
the securities being registered on this form are to be offered on a delayed
or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box.
x
If
this
form is filed to register additional securities for an offering pursuant to
Rule
462(b) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.
o
If
this
form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering.
o
If
this
Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box.
o
If
this
Form is a post-effective amendment to a registration statement filed pursuant
to
General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check
the following box.
o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 13b-2 of the Exchange Act. (Check One)
|
Large
accelerated filer
|
o
|
Accelerated
Filer
|
o
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|
Non-accelerated
filer
(Do
not check if a smaller reporting company)
|
o
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Smaller
reporting company
|
x
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CALCULATION
OF REGISTRATION FEE
Title
of each class of
securities
to be registered
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Amount
being registered (1)
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|
Proposed
maximum offering price per share
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|
Proposed
maximum aggregate offering price
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Amount
of registration
fee
|
|
Common
stock, par value $0.001 per share (2)
|
|
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2,341,402
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$
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5.93
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(3)
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$
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13,884,513.86
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|
$
|
545.66
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|
Common
stock, par value $0.001 per share (4)
|
|
|
639,350
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$
|
6.25
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(5)
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$
|
3,995,937.50
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$
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157.04
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Total
Registration Fee
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|
|
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|
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$
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702.70
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(6)
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(1)
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Pursuant
to Rule 416 under the Securities Act, this registration statement
shall
also cover any additional shares of common stock that shall become
issuable by reason of any stock dividend, stock split, recapitalization,
certain adjustments or other similar transaction effected without
the
receipt of consideration that results in an increase in the number
of the
outstanding shares of common stock.
|
(2)
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Represents
the maximum number of shares of common stock issuable upon conversion
of
Series B preferred stock, including shares issuable as dividends
on the
Series B preferred stock or upon conversion if dividends are accrued
and added to the stated value.
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(3)
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Estimated
solely for the purpose of calculating the registration fee pursuant
to
Rule 457(c) under the Securities Act of 1933, as amended, based upon
the
average of the high and low prices as reported on the American Stock
Exchange on May 27, 2008.
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4)
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Represents
shares of common stock issuable upon the exercise of warrants at
a price
of $6.25.
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(5)
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Calculated
pursuant to Rule 457(g).
|
____________________________
THE
REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS
MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A
FURTHER
AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES
ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
T
he
information in this prospectus is not complete and may be changed. Our selling
stockholders may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities, and it is not soliciting offers to
buy
these securities in any state where the offer or sale is not
permitted.
SUBJECT
TO COMPLETION, DATED JULY __, 2008
NEW
GENERATION BIOFUELS HOLDINGS, INC.
2,980,752
Shares
Common
Stock
This
prospectus relates to the sale of up to
2,980,752
shares
of our common stock by the non-affiliate selling stockholders listed in this
prospectus. The shares offered by this prospectus relate to securities issued
in
private placements completed in March 2008 and May 2008 and
include:
·
up
to
1,850,367
shares
of our common stock issuable upon the i
nitial
conversion of our Series B cumulative convertible preferred stock, referred
to
as our Series B preferred stock,
·
up
to 491,035 shares of our common
stock that may be issued upon conversion of our Series B preferred stock
if
dividends are accrued and added to the stated value; and
·
639,350
shares of our common stock
issuable upon exercise of warrants to purchase our common
stock.
The
registration of shares covered by this prospectus does not necessarily mean
that
any of the shares will be offered or sold by the selling stockholders. The
timing and amount of sale are within the sole discretion of the selling
stockholders. These shares may be sold by the selling stockholders from time
to
time on the American Stock Exchange or on any national securities exchange
or
automated interdealer quotation system on which our common stock is then listed
or quoted, through negotiated transactions or otherwise, at market prices
prevailing at the time of sale or at negotiated prices.
The
distribution of the shares by the selling stockholders is not subject to any
underwriting agreement. We will not receive any proceeds from the sale of
common stock under this prospectus, except upon exercise of the warrants. We
will pay all expenses of registration incurred in connection with this
offering, but the selling stockholders will pay all of their selling
and related expenses.
Our
common stock began trading on the American Stock Exchange on April 15, 2008
under the symbol “GNB.” On June 30, 2008, there were 18,872,712 shares of
our common stock outstanding. On June 30, 2008, the closing price of our
common stock on the American Stock Exchange was $4.65 per share.
We
may
amend or supplement this prospectus from time to time by filing amendments
or
supplements as required. You should read this entire prospectus and any
amendments or supplements carefully before you make your investment
decision.
___________________________________
Investing
in these securities involves a high degree of risk. Please carefully review
the
section entitled “Risk Factors” beginning on page 6 and the risk factors
that are incorporated by reference in this prospectus from our Annual Report
on
Form 10-K for the year ended December 31, 2007.
___________________________________
The
shares have not been registered under the securities laws of any state or other
jurisdiction as of the date of this prospectus. Brokers or dealers should
confirm the existence of an exemption from registration or effectuate such
registration in connection with any offer and/or sale of the shares.
___________________________________
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or passed upon the adequacy or
accuracy or this prospectus. Any representation to the contrary is a criminal
offense.
___________________________________
In
considering the acquisition of the common stock described in this prospectus,
you should rely only on the information contained in this
prospectus. We have not authorized anyone to provide you with
information different from that contained in this prospectus. The
information contained in this prospectus is complete and accurate only as
of the
date on the front cover of this prospectus, regardless of the time of delivery
of this prospectus or of any sale of the shares of common
stock.
___________________________________
The
date of this prospectus is July ___, 2008.
TABLE
OF CONTENTS
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Page
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ABOUT
THIS PROSPECTUS
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2
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CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
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2
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SUMMARY
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3
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RISK
FACTORS
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6
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USE
OF PROCEEDS
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7
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DERTERMINATION
OF OFFERING PRICE
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8
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SELLING
STOCKHOLDERS
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9
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PLAN
OF DISTRIBUTION
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16
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LEGAL
MATTERS
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19
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EXPERTS
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19
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WHERE
YOU CAN FIND MORE INFORMATION
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19
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INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
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20
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ABOUT
THIS PROSPECTUS
We
have
filed with the Securities and Exchange Commission (the “SEC”) a registration
statement on Form S-3, of which this prospectus is a part, under the Securities
Act of 1933, as amended (the “Securities Act”), with respect to the offered
shares. This prospectus does not contain all of the information set forth in
the
registration statement, portions of which we have omitted as permitted by the
rules and regulations of the SEC. Statements contained in this prospectus as
to
the contents of any contract or other document are not necessarily complete.
You
should refer to the copy of each contract or document filed as an exhibit to
or
incorporated by reference into the registration statement for a complete
description.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus
contains “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995 that involve numerous assumptions,
risks and uncertainties, many of which are beyond our control. Our actual
results could differ materially from anticipated results. Important factors
that
may cause actual results to differ from projections include without
limitation:
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•
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our
lack of operating history;
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•
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our
dependence on additional financing;
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•
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our
inability to generate revenues from sales of our biofuel and to establish
production facilities;
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•
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our
inability to enter into acceptable sublicensing agreements with respect
to
our technology or the inability of any sublicensee to successfully
manufacture, market or sell biofuel utilizing our licensed
technology;
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•
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our
inability to compete effectively in the renewable fuels
market;
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governmental
regulation and oversight, including whether or not we are able to
obtain
the governmental approvals necessary to allow our biofuel to be marketed
as “bio-diesel,” or as a new class of biofuel;
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•
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market
acceptance of our biofuel;
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•
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unexpected
costs and operating deficits;
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•
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adverse
results of any material legal proceedings; and
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•
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other
specific risks set forth or incorporated by reference under the heading
“Risk Factors” beginning on page 7 of this
report.
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All
statements that are not clearly historical in nature regarding our strategy,
future operations, financial position, prospects, plans and management
objectives are forward-looking statements. When used in this report, the words
“will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,”
“project,” “plan” and similar expressions generally are intended to identify
forward-looking statements, although not all forward-looking statements contain
such identifying words. All forward-looking statements are based on information
available at the time the statement was made. We undertake no obligation to
update any forward-looking statements or other information contained in this
report as a result of new information, future events or otherwise. You should
not place undue reliance on these forward-looking statements. Although we
believe that our plans, intentions and expectations reflected in or suggested
by
the forward-looking statements are reasonable, these plans, intentions or
expectations may not be achieved.
References
in this prospectus to “New Generation
Biofuels Holdings, Inc.,” “we,” “us” and “our” are to New Generation Biofuels
Holdings, Inc.
SUMMARY
You
should read the following summary together with the more detailed information
contained elsewhere in this prospectus, including the section titled “Risk
Factors,” regarding us and the common stock being sold in this
offering.
Our
Business
We
are a
development stage renewable fuels provider. We hold an exclusive license for
North America, Central America and the Caribbean to commercialize proprietary
technology to manufacture alternative biofuels from vegetable oils and animal
fats that we intend to market as a new class of biofuel for power generation,
heavy equipment use, marine use and as a heating fuel. We believe our
proprietary biofuel can provide a cheaper, renewable alternative energy source
with significantly lower emissions than traditional fuels.
In
March
2006, we acquired the rights to our proprietary technology through an exclusive
license agreement with the inventor of the technology, Ferdinando
Petrucci. Under the license agreement, we are required to pay $6.0
million over the next six years. Compared to current methods used in
the production of bio-diesel fuel, we believe that this proprietary technology
is a substantially less complex and less expensive process.
Our
near-term business strategy involves developing a revenue stream from direct
sales of our biofuel produced at manufacturing plants that we may purchase
or
build, either directly or through joint ventures. To execute this strategy,
we
are pursuing an active test burn program with a number of energy producers
to
validate our biofuel.
In
2007,
we conducted three successful test burns of our biofuel for power generation
applications at an Oakland, California combustion turbine facility operated
by
Dynegy, a wholesale power generation provider. Results indicated that there
were
no shortfalls in engine output and nitrogen oxide emissions were significantly
lower with our biofuel than when firing distillate fuel oil. In September
2007,
we completed our first test burn by initially firing the turbines using
distillate fuel oil, then switching to our biofuel. In November 2007, we
completed the second test burn that focused on the capabilities of our hybrid
formulation, which is designed for customer applications where a higher flash
point product is required. In December 2007, we completed the third test
burn,
where we used a formulation made from recycled vegetable oil.
After
several successful test burns of our biofuel, in June 2008, we entered
into our
first biofuel sales agreement with Dynegy. The agreement provides for Dynegy
to
purchase up to 1.7 million gallons of biofuel per year for use at Dynegy’s power
plant in Oakland, California, based on Dynegy’s forecasts of a portion of the
historical fuel consumption at their facility. There is no minimum purchase
requirement. The product price is based on a variable pricing formula. The
contract contemplates purchases of our “Classic” product formula based on
refined vegetable oil but allows us the flexibility to produce the fuel
from any
feedstock as long as the product meets certain specifications. The contract
is
for a term until March 31, 2010 and from month to month thereafter, unless
terminated by either party at any time with at least sixty (60) days’ written
notice. Based on current prices and terms, we anticipate that the contract
could
generate up to $13 million in sales over the next two
years.
In
December 2007, we entered into a test burn agreement with Mirant Energy Trading
to evaluate our proprietary biofuel in power generation applications. The test
burn agreement requires us to supply our biofuel for a test program that will
be
performed by Mirant. The test program will include the evaluation of both
technical and environmental performance characteristics of our biofuel. The
test
burn agreement also requires us to pay 50% of all costs of environmental
emissions testing conducted in connection with the test program, up to a maximum
of $150,000. In February 2008, we conducted our first of three test burns at
one
of Mirant’s power generation facilities in Maryland. If the testing is
successful, both parties intend to negotiate a mutually agreeable purchase
agreement for our biofuel.
In
November 2007, we entered into a vehicle test program with the City of Orlando,
Florida to demonstrate the capabilities of our proprietary biofuel in fleet
vehicle applications. The test program, to be carried out over several months,
will be conducted using a vehicle in the City’s truck fleet and will include a
comprehensive series of performance and tailpipe emissions tests.
In
March
2008, we entered into a test burn agreement with FirstEnergy Corporation to
evaluate our proprietary biofuel technology in power generation
applications. Under the agreement, we and FirstEnergy contemplate conducting
three full and partial load test burns that may consume approximately 30,000
gallons of our biofuel at FirstEnergy’s combustion turbine power plant in
Lorain, Ohio. The tests will evaluate both the technical and environmental
performance characteristics of the our biofuel. We will supply and deliver
the
biofuel to the testing site and are obligated to pay 50% of all costs of
environmental emissions testing conducted in connection with the test program,
up to a maximum of $15,000. FirstEnergy is entitled to all revenue arising
from
sales of electricity generated during the testing. If the testing is successful,
both parties intend to negotiate a mutually agreeable purchase agreement for
our
biofuel.
In
August
2007, we placed into service our first biofuel production plant, a 3 million
gallon per year pilot facility, jointly developed with Twin Rivers Technologies
and co-located at Twin Rivers’ facility in Cincinnati, Ohio. We are leasing the
equipment used at the plant but own all rights to the fuel produced at the
facility. The facility will be used initially to manufacture fuel for our
application testing program and then later for early commercial sales until
a
full-scale production plant is completed. In March 2007, we entered into a
letter of intent with Twin Rivers Technologies to potentially develop a
production plant at Twin Rivers’ facility located in Quincy, Massachusetts. The
letter of intent contemplates a period during which we will negotiate with
Twin Rivers regarding definitive agreements covering the siting, construction,
operation and management of our proposed initial 25 million gallon per year
production facility and covering the supply of vegetable oils and other
commodity feedstocks and the off take of finished biofuel by Twin Rivers from
the facility. We began discussions with Twin Rivers in the second half of
2007.
We
also
have commenced the process of procuring raw materials for production of our
biofuel but have not made any significant commitments or procurements at this
point. As a second potential revenue stream, our business plan contemplates
collecting royalties through sublicensing our proprietary technology where
it is
more efficient for manufacturers to produce our biofuel at their own plants
rather than requiring production at our proposed facilities. We also are
actively pursuing our eligibility and qualification for tax credits and other
government incentives to strengthen the competitive position of our biofuel.
We
have
fully funded our operating budget for 2008. However, we intend to raise
additional financing during 2008 to fund long term business growth
objectives if such financing is available on favorable terms.
As
a
development stage company, our business also involves a high degree of risk,
as
described in more detail in “Risk Factors” beginning on page 6,
including:
·
our
early
stage and lack of revenues,
·
our
need
for significant additional capital to fund our operations, and
·
the
lack
of current market acceptance of our proprietary technology and
product.
About
this Offering
This
prospectus relates to the offering of up to 2,980,752 shares of our common
stock by the non-affiliate selling stockholders listed in this prospectus,
representing, as of June 30, 2008, approximately 15.8% of our total
outstanding common stock. The shares offered by this prospectus relate to
securities issued in private placements in March and May 2008 and
include:
·
up
to 1,850,367
shares
of our common stock issuable upon conversion of our Series B preferred
stock,
·
up
to 491,035 shares of our
common stock that may be issued upon conversion of our Series B preferred
stock
if dividends are accrued and added to the stated value; and
·
639,350
shares of our common stock
issuable upon exercise of warrants to purchase our common stock, including
462,583 shares underlying warrants issued to investors in the March and
May 2008
private placement and 176,767 shares underlying warrants issued as payment
of
commissions to our placement agents.
The
1,850,367 shares of common stock issuable upon conversion of our
Series B
preferred stock is calculated by adding together the sum of the conversion
shares issuable to each investor. The number of conversion shares
issuable to
each investor is calculated by dividing the total dollar stated value
invested
by each investor by the conversion price of $4.25, rounded up to
the next whole
share. The number of conversion shares being registered excludes
18,000 shares
of common stock, issuable to investors which may be deemed affiliated
with the
Company, that are not being registered.
The
491,035 shares of common stock that may be issued upon conversion
of the Series
B preferred stock assuming dividends accrue and are added to the
stated value
over the next three years, calculated by adding together the sum
of the
accretion shares issuable to each investor. For each investor, accretion
shares
are calculated by adding the accrued and unpaid dividend (at an 8%
annual rate)
to the stated value for each investor at each semi-annual dividend
payment date.
The stated value, including the dividend accrual, is then divided
by the
conversion price of $4.25 per share, and the resulting number of
shares is
rounded up to the next whole share. In computing this number the
Company has
reflected that since dividends accrete by being added to stated value,
for each
subsequent dividend period the accrued dividends effectively compound.
The
number of dividend shares being registered excludes 4,779 shares
of common stock
issuable to investors which may be deemed affiliated with the Company
that are
not being registered.
The
639,350 shares of common stock underlying warrants registered in connection
with
the March and May 2008 private placement includes 462,583 shares underlying
warrants issued to non-affiliated investors who purchased Series B
preferred
stock (calculated based on 25% of the 1,850,367 shares of common stock
issuable
upon conversion of the Series B preferred stock rounded down to the
nearest
whole share on an individual basis) plus 176,767 shares underlying
warrants
issued as commissions to our placement agents.
March
and May 2008 Private Placement
In
our
private placement in March and May 2008, we sold 75,891 shares of our Series
B preferred stock and warrants to purchase 446,413 shares of our common
stock to "accredited investors" as defined in the Securities Act for total
gross
proceeds of $7,589,100.
A
summary
of key terms of our March/May Offering is provided below and is qualified
in its
entirety by reference to our Articles of Amendment to our Amended and Restated
Articles of Incorporation (filed as Exhibit 3.2 to the Current Report on
Form
8-K filed with the Securities Exchange Commission on March 31, 2008), the
warrants and other offering documents:
Series
B Convertible Preferred Stock.
Each
share of Series B preferred stock initially will be convertible into shares
of
our common stock, at a conversion price of $4.25 per share. The Series B
preferred stock also includes the following key terms that are summarized
below
but qualified in their entirety by reference to the preferred stock designations
included in our Articles of Amendment to:
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·
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Ranking.
The
Series B preferred stock will rank junior to the Series A preferred
stock
and senior to the common stock with respect to the payment of dividends
and amounts payable upon liquidation, dissolution or winding up
of the
Company.
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|
·
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Dividends
and Increase in Stated Value.
Dividends
will be payable from the date of issuance at a rate of 8% per year
when
and as declared by the Board of Directors. To the extent that dividends
are not declared, or cannot be paid, there will be an increase
in the
Stated Value of the Series B preferred stock in the amount of 8%
per year.
In the event dividends are declared by the Board and paid by the
Company
on the Common Stock, holders of Series B preferred stock will either
share
ratably in such dividends based on the number of shares of common
stock
into which the Series B preferred stock may be converted or (to
the extent
that dividends are not declared or cannot be paid), there will
be a
corresponding increase in the Stated Value. Dividends will be paid
semiannually, at the Company’s election, in cash, in shares of Series B
preferred stock (valued at Stated Value) or in common stock valued
at the
market price, on September 30 and March 31 of each year beginning
on
September 30, 2008 to holders of record on the 15
th
day of the preceding month. If there is an increase in Stated Value
because dividends were not or could not be paid, that increase
will occur
semiannually on the dates that dividends would have been paid.
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|
·
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Liquidation.
Upon
any Liquidation of the Company, after the Company has made the
required
distributions to the holders of Series A preferred stock (and any
other
preferred stock then outstanding, if any, ranking in liquidation
senior to
the Series B preferred stock), and before any distribution is made
to the
holders of common stock (and any other stock ranking in liquidation
junior
to the Series B preferred stock), the holders of Series B preferred
stock
will be entitled to be paid an amount in cash equal to the aggregate
liquidation value of Series B preferred
stock.
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·
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Liquidation
Value.
T
he
liquidation value of the Series B preferred stock is an amount
in cash
equal to the Stated Value ($100.00) plus all accrued dividends
not
previously paid or added to the Stated Value. Each share of
Series B
preferred stock is convertible into shares of our common stock
at a
conversion price of $4.25 per share, and each share automatically
converts
upon three years from the date of issuance. The number of conversion
shares is determined by dividing the sum of the Stated Value
and all
accrued dividends not previously paid or added to the Stated
Value at the
time of conversion by the conversion price. Assuming dividends
accrue and
are compounded semiannually and automatic conversion after
three years,
each share of Series B preferred stock will automatically convert
into 30
shares of common stock, rounded up to the nearest whole share,
at the
$4.25 conversion price. Under these same assumptions, the liquidation
value of each share of Series B preferred stock would accrete
to
approximately $126.53.
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·
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Redemption.
The
Series B preferred stock is not
redeemable.
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·
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Voting.
The
holders of the Series B preferred stock will be entitled to notice
of all
shareholders’ meetings and will be entitled to vote on all matters
submitted to the shareholders for a vote, together with the holders
of
Series A preferred stock on an as-converted basis and the common
stock,
voting together as a single class. Each share of Series B preferred
stock
will be entitled to one vote for each share of common stock issuable
upon
conversion of the Series B preferred stock as of the record date
for such
vote or, if no record date is specified, as of the date of such
vote.
|
|
·
|
Automatic
Conversion.
Upon
the third anniversary of the initial issue date of the Series B
preferred
stock, each share of Series B preferred stock will automatically
convert
into the number of shares of common stock into which it is then
convertible. That number is determined by dividing the sum of the
Stated
Value and all accrued dividends not previously paid or added to
the Stated
Value to the date of such conversion by the Conversion Price then
in
effect. The conversion price is $4.25 per share, subject to adjustment
upon the occurrence of certain major corporate events such as
reorganizations and stock splits (the “Conversion
Price”).
|
|
·
|
Optional
Conversion.
At
any time, any holder of Series B preferred stock may convert all
or a
portion of their shares. The number of shares of common stock into
which
each share of Series B preferred stock is convertible is determined
by
dividing the sum of the Stated Value and all accrued dividends
not
previously paid or added to the Stated Value to the date of such
conversion by the Conversion Price then in
effect.
|
|
·
|
Antidilution
and Adjustments to Conversion Price.
If
at any time prior to the first to occur of (i) the first anniversary
of the registration of the common stock underlying the Series B
preferred
stock or (ii) 18 months after the closing , the Company issues
any
additional shares of Common Stock with a purchase price less than
the
Conversion Price of the Series B preferred stock, or additional
convertible securities with a conversion price less than the Conversion
Price of the Series B preferred stock, the Conversion Price of
the Series
B preferred stock will be reduced to the purchase price at which
such
Common Stock has been issued or the conversion price of such additional
convertible securities, but not below a Conversion Price of $3.00
per
share.
|
|
·
|
Protective
Provisions.
The
Company will not, without approval of a majority of the holders
of the
shares of the Series B preferred stock voting as a separate
class;
|
|
(a)
|
alter
or change the rights, preferences or privileges of the Series B
preferred
stock or any other class or series of preferred stock in any manner
adversely affecting the rights of the Series B preferred
stock;
|
|
(b)
|
create
or issue any new class or series of equity securities of the Company
having a preference senior to the Series B preferred stock with
respect to
redemption, voting, liquidation or dividend
rights;
|
|
(c)
|
pay
or declare any dividend on or other distribution with respect to
any
shares of the Company’s capital stock which are junior to the Series B
preferred stock (except dividends payable solely in shares of common
stock
or in the junior preferred stock);
or
|
|
(d)
|
redeem
or acquire any shares of the Company’s capital stock which are junior to
the Series B preferred stock (other than common stock from employees,
officers or directors of the Company or its subsidiaries upon termination
of employment pursuant to the terms of agreements approved by the
Company’s board of directors or common stock from any affiliate of the
Company (which for this purpose shall include any holder of 10%
or more of
the common stock or other voting stock of the Company) or any strategic
partner of the Company).
|
|
·
|
Reorganization,
Consolidation, Merger or Sale.
Prior
to any recapitalization, reorganization, reclassification, consolidation,
merger, sale of all or substantially all of the Company’s assets or other
transaction where the holders of common stock are entitled to receive
(either directly or upon subsequent liquidation) stock, securities
or
assets with respect to or in exchange for common stock (an “Organic
Change”), the Company will make appropriate provision to ensure that the
holders of Series B preferred stock will have the right to acquire
and
receive, upon the conversion of Series B preferred stock, in lieu
of
common stock, such shares of stock, securities or assets as such
holder
would have received in connection with such Organic Change if such
holder
had converted its Series B preferred stock immediately prior to
such
Organic Change.
|
Warrants.
Each
investor in the March/May Offering also received warrants exercisable for
a
number of shares of our common stock equal to 25% of the number of shares
of
common stock that would be issuable upon initial conversion of the Series
B
preferred stock. The initial exercise price of the warrant is $6.25 per share.
The warrants are exercisable at any time after the six month anniversary
of the
issue date but prior to the fifth anniversary of the issue date. If at any
time
prior to the first anniversary of the registration of the common stock
underlying the warrants or eighteen months from the date of closing, the
Company
issues certain additional equity securities with a purchase price or conversion
price less than $4.25 per share of Common Stock or any additional warrants
with
an exercise price less than $6.25 per share, the exercise price of the Warrant
will be reduced to the purchase price or the conversion price of the additional
equity securities or to the exercise price of the additional warrants, but
not
below $3.00 per share.
Exceptions
to Antidilution Adjustments.
The antidilution adjustments in the Series B
preferred stock and warrants will not apply to certain issuances of equity
securities or warrants, including those not issued in capital-raising
transactions (such as to customers, suppliers, joint venture partners or
in
connection with acquisitions of property) or in connection with equity
award or
options granted by the Company to employees, consultants and directors
under
employee benefit plans approved by the Board of Directors under which options
generally are granted with exercise prices at least equal to the Company’s stock
price on the grant dates.
Registration
Rights.
In
connection with the March/May Offering, we agreed to register the resale of
the shares of common stock issuable to investors upon conversion of the Series
B
preferred stock, upon the exercise of any warrants and as may be issued or
distributed through a stock dividend or stock split or other distribution,
recapitalization or reclassification. Under the registration rights agreements
with each investor, we are required to file a “resale” registration statement
with the SEC covering such shares on or before the 30th day following the
closing date. We are obligated to maintain the effectiveness of the “resale”
registration statement from the effective date of the registration statement
through and until the shares have been disposed of in accordance with the
registration statement, the shares have been distributed to the public or
could
be sold by the investor pursuant to Rule 144 under the Securities Act, or
the
shares have ceased to be outstanding. We agreed to use our reasonable best
efforts to have the “resale” registration statement declared effective by the
SEC as promptly as practicable after the initial filing, but by no later
than
180 days after the effective date. If we fail to meet these registration
obligations, we may be required to pay a penalty in cash or additional shares
of
our common stock, at our election, to investors in the March/May Offering,
in an
amount not to exceed 6.0% of the aggregate purchase price of the Series B
preferred stock purchased in the March/May Offering.
Commissions
and Fees.
For
the
March/May Offering we agreed to pay a cash commission of 8% of the total
proceeds and a warrant commission of 10% of the total number of shares purchased
in the March/May Offering. Some of our finders chose to participate in the
March/May Offering by investing a portion of their cash commission on the
same
terms as other investors. Ultimately, we paid commissions of $249,288 in
cash,
issued 3,514 shares of our Series B preferred stock and issued warrants to
purchase 197,437 shares of our common stock to Empire Financial Group, William
Corbett, Michael Jacks and Dennis Lavelle for services as finders in connection
with the transactions.
Accounting
Treatment of the Series B Preferred Stock and Warrants.
We
will
recognize a Preferred Stock dividend of approximately $1,567,000 during
the
quarter ended June 30, 2008 relating to the beneficial conversion feature
of the
Series B Preferred Stock issued in May 2008. The Preferred Stock dividend
is
calculated as the difference between the share price of its common stock
at date
of issuance and the initial conversion price of the Series B Preferred
Stock. We
will allocate the proceeds received for the Series B Preferred Stock
between the
Series B Preferred Stock and warrants issued based on estimated fair
values. We
will record a derivative liability for the conversion option of the Series
B
Preferred Stock and warrants issued during 2008, if material, as a liability
at
estimated fair value and “mark it to market” each reporting period. The impact
of the adjusting provisions for the conversion of the Series B Preferred
Stock
and warrants issued during 2008, if such an adjustment were to occur,
would
result in additional shares of common stock to be issued upon conversion,
which
would further dilute existing shareholders. This derivative liability
will be
marked to market each quarterly reporting period. The fair value of the
warrants
issued with the Series B Convertible Preferred Stock issued in May 2008
has been
estimated, utilizing the Black Scholes option pricing model, at approximately
$950,000. The warrants will be classified as Stockholder’s Equity. The fair
value of any adjusting provisions will be recognized as a derivative
liability,
if material.
An
investment in our common stock involves a high degree of risk. You
should carefully consider the following material risks and those incorporated
by
reference from our Annual Report on Form 10-K for the year ended December 31,
2007, together with the other information contained in this prospectus, before
you decide to buy our common stock. If any of the following risks
actually occur, our business, results of operations and financial condition
would likely suffer. In these circumstances, the market price of our
common stock could decline, and you may lose all or part of your
investment.
Risks
Related to Our Common Stock
Our
Series B preferred stock and warrants issued in our March and May
2008 private placements include antidilution provisions that, if triggered,
could dilute the ownership interests of our existing common
stockholders.
Both
the
Series B preferred stock and the warrants issued in our March and May 2008
private placements include antidilution provisions that, if triggered, would
result in the issuance of additional shares that would dilute the interests
of existing common stockholders. These antidilution provisions will apply
if we issue equity in certain capital-raising transactions for a price
below the $4.25 conversion price of the Series B preferred stock or the $6.25
exercise price of the warrants within the first to occur of one year
from the date of registration of the underlying common stock from our March
2008
private placement or 18 months from March 31, 2008 for our March 2008
private placement and within the first to occur of one year from the date
of registration of the underlying common stock from our May 2008 private
placement or 18 months from May 13, 2008 for our May 2008 private
placement. If these provisions are triggered, the conversion price of the Series
B preferred stock or the exercise price of the warrants would be adjusted
downward, but not below a floor of $3.00 per share. Any sales of additional
equity that trigger these antidilution provisions could be disproportionately
dilutive and adversely affect the prevailing market prices of our common stock.
The existence of conversion features also may result in short selling of
our common stock that may further depress the market price.
If
we do not meet the American Stock Exchange (AMEX) requirements for continued
listing, our common stock may be delisted which could negatively impact
our
stock’s liquidity.
Under
AMEX listing rules, our common stock could be delisted from AMEX if we
do not
meet certain standards regarding our financial condition and operating
results
(including, among other factors, maintaining adequate stockholders’ equity and
market capitalization and minimizing losses from continuing operations
over
multiple years), the distribution of our publicly held securities and compliance
with AMEX listing agreements and SEC rules and regulations. If our securities
are delisted from AMEX, they likely will be quoted again for trading on
the OTC
Bulletin Board which may depress demand for our shares and limit market
liquidity due to the reluctance or inability of certain investors to buy
stocks
on the OTC Bulletin Board. Consequently, an investor may find it more difficult
to trade our securities, which may adversely affect the ability to resell
securities purchased from the selling stockholders.
A
significant number of our shares are eligible for sale, and their sale
could
depress the market price of our common stock.
Sales
of a significant number of shares of our common stock in the public market
could
depress the market price of our common stock. In 2007, we registered on
currently effective registration statements a total of 11,173,050 shares
of our
common stock held by non-affiliate selling stockholders that are now eligible
for trading in the public market, including shares issuable upon conversion
or
exercise of rights to purchase that are not currently outstanding. In 2008,
we
are seeking to register on pending registration statements an
additional 4,809,438 shares of our common stock held by non-affiliate
selling stockholders in connection with private placements of our Series
B
convertible preferred stock and warrants that closed in December 2007 and
March
and May 2008. Many of the shares sold to selling stockholders listed in
these
registration statements were offered by the Company at prices less than
the
recent market price of the Company’s common stock, which closed on AMEX on June
30, 2008 at $4.65 per share. In addition, we may be obligated to register
shares
held by Xethanol to facilitate the spinoff to Xethanol’s stockholders of the
shares of our common stock issued to Xethanol in the reverse merger. Such
registration would make 5,490,000 additional shares of our common stock
eligible
for trading in the public market. Some or all of these shares of common
stock
may be offered from time to time in the open market pursuant to a registration
statement or Rule 144, and these sales may depress the market price for
shares
of our common stock.
Our
common stock is thinly traded and subject to
volatility.
Although
our common stock is traded on
AMEX,
it
has traded in relatively small volumes. During the second quarter of 2008,
an
average of only about 50,000 shares traded each day. If our common stock
continues to be thinly traded, it may enhance volatility in the share price
and
make it difficult for investors to buy or sell shares in the public market
without materially affecting the quoted share price. Further, investors
seeking
to buy or sell a certain quantity of our shares in the public market may
be
unable to do so within one or more trading days. If limited trading in
our stock
continues, it may be difficult for holders to sell their shares in the
public
market at any given time at prevailing prices, which may limit the liquidity
of
our common stock.
USE
OF PROCEEDS
This
prospectus relates to shares of our common stock that may be offered and sold
from time to time by the selling stockholders who will receive all of the
proceeds from the sale of the shares. We will not receive any proceeds from
the
sale of shares of common stock in this offering except upon the exercise of
outstanding warrants. We could receive up to $3,995,938 from the cash exercise
price upon exercise of warrants held by selling stockholders. We expect to
use
the proceeds received from the exercise of the warrants, if any, for working
capital and general corporate purposes. We will bear all expenses of
registration incurred in connection with this offering, but the selling
stockholders will bear all commissions, selling and other expenses to
underwriters, agents, brokers and dealers.
DETERMINATION
OF OFFERING PRICE
This
offering is being made solely to allow the selling stockholders to offer and
sell shares of our common stock to the public. The selling stockholders may
offer for resale some or all of their shares at the time and price that they
choose. On any given day, the price per share is likely to be based on the
market price for our common stock, as quoted on the American Stock Exchange
on
the date of sale, unless shares are sold in private transactions. Consequently,
we cannot currently determine the price at which shares offered for resale
pursuant to this prospectus may be sold.
SELLING
STOCKHOLDERS
Selling
Stockholder
Table
This
prospectus covers shares of our common stock underlying securities that we
sold
in a private placement in March and May 2008 to “accredited investors” as
defined by Rule 501(a) under the Securities Act, pursuant to a registration
exemption under Section 4(2) of the Securities Act. The selling stockholders
may
from time to time offer and sell under this prospectus any or all of the
shares
listed opposite each of their names below as shown in the "Shares Offered
Hereby" column. Under registration rights agreements with each investor in
the
private placement, we are required to register for resale the shares of our
common stock described in the table below.
We
have
prepared the table below based upon the information furnished to us by the
selling stockholders as of May 27, 2008. The selling stockholders identified
below may have sold, transferred or otherwise disposed of some or all of their
shares since the date on which the information in the following table is
presented in transactions exempt from or not subject to the registration
requirements of the Securities Act. Certain selling stockholders may be deemed
to be “underwriters” as defined in the Securities Act. Any profits realized by
the selling stockholder may be deemed to be underwriting commissions.
Information concerning the selling stockholders may change from time to time
and, if necessary, we will amend or supplement this prospectus accordingly.
We
cannot give an estimate as to the number of shares of common stock that will
be
held by the selling stockholders upon termination of this offering because
the
selling stockholders may offer some or all of their common stock under the
offering contemplated by this prospectus. The total number of shares that may
be
sold hereunder will not exceed the number of shares offered hereby. Please
read
the section entitled “Plan of Distribution” in this prospectus.
As
noted
in the footnotes to the table below, we have been advised that each of such
selling stockholders purchased our common stock and warrants in the ordinary
course of business, not for resale, and that none of such selling stockholders
had, at the time of purchase, any agreements or understandings, directly
or
indirectly, with any person to distribute the related common stock.
Unless
otherwise indicated in the footnotes to the table below, none of the selling
stockholders has or had any position, office or other material relationship
with
the company or any of its predecessors or affiliates within the past three
years.
The
following table sets forth:
|
·
|
the
name of each selling stockholder;
|
|
·
|
the
number of shares of our common stock beneficially owned by the
selling
stockholders as of May 27, 2008, including shares underlying
warrants
exercisable by each holder outside of 60 days but that which
are required
to be registered pursuant to the registration rights agreements
we entered
into with each
investor;
|
|
·
|
the
maximum number of shares of our common stock that may be offered
for the
account of the selling stockholders under this prospectus;
and
|
|
·
|
the
amount and percentage of common stock that would be owned by the
selling
stockholders after completion of the offering, assuming a sale of
all of
the common stock that may be offered by this
prospectus.
|
Under
SEC
rules, beneficial ownership includes any shares of common stock as to which
a
person has sole or shared voting power or investment power and any shares of
common stock which the person has the right to acquire within 60 days through
the exercise of any option, warrant or right, through conversion of any security
or pursuant to the automatic termination of a power of attorney or revocation
of
a trust, discretionary account or similar arrangement. Beneficial ownership
is
calculated based on 18,758,167 shares of our common stock outstanding as of
May
27, 2008. In calculating the number of shares beneficially owned by a selling
stockholder and the percentage ownership, shares of common stock subject to
preferred stock conversion rights, options or warrants held by that person
that
are currently exercisable or convertible or become exercisable or convertible
within 60 days after May 27, 2008 are deemed outstanding even if they have
not
actually been exercised or converted. The shares issuable under these securities
are treated as outstanding for computing the percentage ownership of the person
holding these securities but are not treated as outstanding for the purpose
of
computing the percentage ownership of any other person.
Name of Selling Security
Holder
|
|
Shares Owned
Represented by
Common Stock,
Preferred Stock and
Warrants Before the
Offering
(1)
|
|
Shares Offered
Hereby
(2)
|
|
Shares Owned
After the
Offering
(3)
|
|
Percentage of
Outstanding Shares
Owned After the
Offering
|
|
Alpha
Capital Anstalt (4)
|
|
|
125,758
|
|
|
125,758
|
|
|
0
|
|
|
|
|
Alan
Andalman (5)
|
|
|
67,870
|
|
|
37,870
|
|
|
0
|
|
|
-
|
|
Brett
Casebolt (6)
|
|
|
37,870
|
|
|
37,870
|
|
|
0
|
|
|
|
|
Bristol
Investment Fund, Ltd. (7)
|
|
|
125,758
|
|
|
125,758
|
|
|
0
|
|
|
-
|
|
William
Corbett (8)
|
|
|
232,777
|
|
|
87,537
|
|
|
0
|
|
|
|
|
Cranshire
Capital, LP (9)
|
|
|
337,813
|
|
|
184,873
|
|
|
0
|
|
|
-
|
|
Crestview
Capital Master, LLC (10)
|
|
|
108,820
|
|
|
90,920
|
|
|
0
|
|
|
-
|
|
Philip
Ditmanson & Donna Zimmerman (11)
|
|
|
18,936
|
|
|
18,936
|
|
|
0
|
|
|
-
|
|
Donald
Drapkin (12)
|
|
|
422,470
|
|
|
126,220
|
|
|
0
|
|
|
-
|
|
EDJ
Limited (13)
|
|
|
24,080
|
|
|
17,830
|
|
|
0
|
|
|
-
|
|
Stanley
& Carol Eilers (14)
|
|
|
37,870
|
|
|
37,870
|
|
|
0
|
|
|
-
|
|
Empire
Financial Holding Company (15)
|
|
|
144,548
|
|
|
90,057
|
|
|
0
|
|
|
-
|
|
Enable
Growth Partners LP (16)
|
|
|
181,840
|
|
|
181,840
|
|
|
0
|
|
|
-
|
|
Enable
Opportunity Partners LP (17)
|
|
|
45,460
|
|
|
45,460
|
|
|
0
|
|
|
-
|
|
Excalibur
Small Cap Opportunities LP (18)
|
|
|
151,534
|
|
|
151,534
|
|
|
0
|
|
|
-
|
|
Greg
Freitag (19)
|
|
|
18,936
|
|
|
18,936
|
|
|
0
|
|
|
-
|
|
Gimmel
Partners, LP (20)
|
|
|
1,634,378
|
|
|
363,678
|
|
|
0
|
|
|
-
|
|
Michael
R. Jacks (21)
|
|
|
232,777
|
|
|
87,537
|
|
|
0
|
|
|
-
|
|
Phyllis
D. Kalista 401K (22)
|
|
|
15,154
|
|
|
15,154
|
|
|
0
|
|
|
-
|
|
Dennis
Lavelle (23)
|
|
|
74,812
|
|
|
74,812
|
|
|
0
|
|
|
-
|
|
Stifel
Nicolaus Custodian for Dennis LaValle IRA (24)
|
|
|
101,513
|
|
|
101,513
|
|
|
0
|
|
|
-
|
|
H.
Vincent O'Connell (25)
|
|
|
18,936
|
|
|
18,936
|
|
|
0
|
|
|
-
|
|
Porter
Partners (26)
|
|
|
96,312
|
|
|
71,312
|
|
|
0
|
|
|
-
|
|
Robbins
Capital Partners L.P. (27)
|
|
|
1,186,737
|
|
|
192,537
|
|
|
0
|
|
|
-
|
|
Rockmore
Investment
Master
Fund Ltd (28)
|
|
|
235,333
|
|
|
113,563
|
|
|
0
|
|
|
-
|
|
Theodore
Seelye (29)
|
|
|
186,581
|
|
|
64,181
|
|
|
0
|
|
|
-
|
|
Allan
Steffes (30)
|
|
|
148,212
|
|
|
75,740
|
|
|
0
|
|
|
-
|
|
David
Lee Street (31)
|
|
|
30,308
|
|
|
30,308
|
|
|
0
|
|
|
-
|
|
Scott
and Mary Strickland (32)
|
|
|
90,920
|
|
|
90,920
|
|
|
0
|
|
|
-
|
|
Truk
International Fund L.P. (33)
|
|
|
29,418
|
|
|
29,418
|
|
|
0
|
|
|
-
|
|
Truk
Opportunity Fund LLC (34)
|
|
|
59,726
|
|
|
59,726
|
|
|
0
|
|
|
-
|
|
Whalehaven
Capital Fund Limited (35)
|
|
|
151,534
|
|
|
151,534
|
|
|
0
|
|
|
-
|
|
Worthington
Growth LP (36)
|
|
|
257,489
|
|
|
60,614
|
|
|
0
|
|
|
-
|
|
TOTAL
|
|
|
6,632,480
|
|
|
2,980,752
|
|
|
|
|
|
|
|
(1)
May
include shares owned by the selling stockholders that are registered for
resale
on other registration statements.
(2)
Reflects the number of shares offered for resale by this prospectus on
behalf of
each selling stockholder.
(3)
Assumes that the selling stockholders have sold all of the shares offered
for
resale by this prospectus and any other prospectus that offers shares owned
by
the selling stockholders for resale.
(4)
Includes
82,989 shares of common stock issuable upon initial conversion of our
Series B preferred shares, 22,022 shares of common stock issuable as dividends
on our Series B preferred stock and 20,747 shares of common stock underlying
warrants. The address for Alpha Capital is
Pradafant
7, Furstentums 9490, Vaduz, Liechtenstein
. Konrad Ackerman has
sole power to vote and dispose of the securities held. The selling stockholder
is not affiliated with a broker−dealer and acquired the securities to be resold
solely for the account of the selling stockholder, and not for the account
of
any other person or with a view to any resale or distribution
thereof.
(5)
Includes
30,000 shares of common stock currently outstanding, 24,989 shares of common
stock issuable upon initial conversion of our Series B preferred stock,
6,634 shares of common stock issuable as dividends on our Series B preferred
stock and 6,247 share of common stock underlying warrants. The selling
stockholder is not affiliated with a broker−dealer and acquired the securities
to be resold solely for the account of the selling stockholder, and not for
the
account of any other person or with a view to any resale or distribution
thereof.
(6)
Includes
24,989 shares of common stock issuable upon initial conversion of our Series
B
preferred stock, 6,634 shares of common stock issuable as dividends on our
Series B preferred stock and 6,247 shares of common stock underlying warrants.
The selling stockholder is not affiliated with a broker−dealer and acquired
the securities to be resold solely for the account of the selling stockholder,
and not for the account of any other person or with a view to any resale
or
distribution thereof.
(7)
Includes
82,989 shares of common stock issuable upon initial conversion of our Series
B
preferred stock , 22,022 shares of common stock issuable as dividends on
our
Series B preferred stock and 20,747 shares of common stock underlying warrants.
The address for Bristol Investment Fund, Ltd. is c/o Bristol Capital Advisors,
LLC 10990 Wilshire Blvd., Suite 1410, Los Angeles, CA 90024.
Bristol
Capital Advisors, LLC (“BCA”) is the investment advisor to Bristol Investment
Fund, Ltd. (“Bristol”). Paul Kessler is the manager of BCA and as such has
voting and investment control over the securities held by Bristol. Mr. Kessler
disclaims beneficial ownership of these securities.
The selling
stockholder is not affiliated with a broker−dealer and acquired the securities
to be resold solely for the account of the selling stockholder, and not for
the
account of any other person or with a view to any resale or distribution
thereof.
(8)
Includes
20,800 shares of common stock issuable upon initial conversion of the Series
B
preferred stock, 5,521 shares of common stock issuable as dividend on our
Series
B preferred stock and 206,456 shares of common stock underlying warrants,
all of
which were issued as placement agent compensation in connection with the
March/May 2008 offering,
except
for warrants to purchase 145,240 shares that were issued as placement agent
compensation in prior offerings.
The selling stockholder is
affiliated with a broker−dealer and acquired the securities to be resold solely
for the account of the selling stockholder, and not for the account of any
other
person or with a view to any resale or distribution thereof.
(9)
Includes
78,000 shares of common stock currently outstanding, 122,000 shares of common
stock issuable upon initial conversion of the Series B Preferred Stock, 32,373
shares of common stock issuable as dividends on our Series B preferred stock
and
105,500 shares of common stock underlying warrants. The address for Cranshire
Capital, L.P. (“Cranshire”) is 3100 Dundee Rd. Suite 703 Northbrook, IL 60062.
Downsview Capital, Inc. (“Downsview”) is the general partner of Cranshire and
consequently has voting control and investment discretion over securities
held
by Cranshire. Mitchell P. Kopin (“Mr. Kopin”), President of Downsview, has
voting control over Downsview. As a result, each of Mr. Kopin, Downsview
and
Cranshire may be deemed to have beneficial ownership (as determined under
Section 13(d) of the Securities Exchange Act of 1934, as amended) of the
shares
owned by Cranshire which are being registered hereunder. The selling stockholder
is not affiliated with a broker−dealer and acquired the securities to be resold
solely for the account of the selling stockholder, and not for the account
of
any other person or with a view to any resale or distribution
thereof.
(10)
Includes
17,900 shares of common stock currently outstanding, 60,000 shares of common
stock issuable upon initial conversion of our Series B preferred stock, 15,920
shares of common stock issuable as dividends on our Series B preferred stock
and
15,000 shares of common stock underlying warrants. The address for Crestview
Capital Master, LLC is 95 Revere Dr, Suite A, Northbrook, IL 60062.
Crestview Capital Partners LLC
has
sole
power to vote and dispose of the securities held. The general partners of
Crestview Capital Partners LLC are Stewart Fink, Bob Hoyt and Daniel Warsh.
The
selling stockholder is not affiliated with a broker−dealer and acquired the
securities to be resold solely for the account of the selling stockholder,
and
not for the account of any other person or with a view to any resale or
distribution thereof.
(11)
Includes
12,495 shares of common stock issuable upon initial conversion of our Series
B
preferred stock, 3,318 shares of common stock issuable as dividends on our
Series B preferred stock and 3,123 shares of common stock underlying warrants.
Mr. Ditmanson and Ms. Zimmerman have shared power to vote and dispose of
the
securities held. The selling stockholder is not affiliated with a broker−dealer
and acquired the securities to be resold solely for the account of the selling
stockholder, and not for the account of any other person or with a view to
any
resale or distribution thereof.
(12)
Includes 165,000 shares of common stock currently outstanding, 87,500 shares
of
common stock issuable upon initial conversion of our Series A preferred
stock, 83,295 shares of common stock issuable upon initial conversion of
our
Series B preferred stock, 22,102 shares of common stock issuable as dividends
on
our Series B preferred stock and 64,573 shares of common stock underlying
warrants. The selling stockholder is not affiliated with a broker−dealer and
acquired the securities to be resold solely for the account of the selling
stockholder, and not for the account of any other person or with a view
to any
resale or distribution thereof.
(13)
Includes
11,765 shares of common stock issuable upon initial conversion of our Series
B
preferred stock, 3,124 shares of common stock issuable as dividends on our
Series B preferred stock and 9,191 shares of common stock underlying warrants.
The address for EDJ Limited is 300 Drakes Landing Road, Suite 175, Greenbrae,
CA
94904. Jeffrey H. Porter has sole power to vote and dispose of the securities
held. The selling stockholder is not affiliated with a broker−dealer and
acquired the securities to be resold solely for the account of the selling
stockholder, and not for the account of any other person or with a view to
any
resale or distribution thereof.
(14)
Includes
24,989 shares of common stock issuable upon initial conversion of our Series
B
preferred stock, 6,634 shares of common stock issuable as dividends on our
Series B preferred stock and 6,247 shares of common stock underlying warrants.
Stanley G. and Carol R. Eilers have shared power to vote and dispose of the
securities held. The selling stockholder is not affiliated with a broker−dealer
and acquired the securities to be resold solely for the account of the selling
stockholder, and not for the account of any other person or with a view to
any
resale or distribution thereof.
(15)
Includes
27,742 shares of common stock issuable upon initial conversion of the Series
B
preferred stock, 7,365 shares issuable as dividends on our Series B preferred
stock and 109,441 shares of common stock underlying warrants
, all
of which were issued as placement agent compensation in connection with
the
March/May 2008 offering
,
except
for warrants to purchase 54,491 shares that were issued as placement agent
compensation in prior offerings.
The address for Empire Financial
Group, Inc. is 2170 West St. Road 434, Suite 100, Longwood, FL 32779. The
person
with the power to vote and dispose of the securities held by Empire Financial
Group, Inc. is James Matthew. The selling stockholder is a broker−dealer and
acquired the securities to be resold solely for the account of the selling
stockholder, and not for the account of any other person or with a view
to any
resale or distribution thereof.
(16)
Includes
120,000 shares of common stock issuable upon initial conversion of our
Series B preferred stock, 31,840 shares of common stock issuable as dividends
on
our Series B preferred stock and 30,000 shares of common stock underlying
warrants. The address for Enable Growth Partners LP is One Ferry Building,
Suite
255, San Francisco, CA 94111. Mitchell Levine has sole power to vote
and dispose of the securities held. The selling stockholder is not affiliated
with a broker−dealer and acquired the securities to be resold solely for the
account of the selling stockholder, and not for the account of any other
person
or with a view to any resale or distribution thereof.
(17)
Includes
30,000 shares of common stock issuable upon initial conversion of our Series
B
preferred stock, 7,960 shares of common stock issuable as dividends on our
Series B preferred stock and 7,500 shares of common stock underlying warrants.
The address for Enable Opportunity Partners LP is One Ferry Building, Suite
255,
San Francisco, CA 94111. Mitchell Levine has sole power to vote and
dispose of the securities held. The selling stockholder is not affiliated
with a
broker−dealer and acquired the securities to be resold solely for the account of
the selling stockholder, and not for the account of any other person or with
a
view to any resale or distribution thereof.
(18)
Includes
100,000 shares of common stock issuable upon initial conversion of our Series
B
preferred stock, 26,534 shares of common stock issuable as dividends on our
Series B preferred stock and 25,000 shares of common stock underlying warrants.
The address for Excalibur Small Cap Opportunities LP is 150 Bloor St. West,
Suite 14, Toronto, Ontario, Canada M5S 2X9. William Hechter has sole
power to vote and dispose of the securities held. The selling stockholder
is not
affiliated with a broker−dealer and acquired the securities to be resold solely
for the account of the selling stockholder, and not for the account of any
other
person or with a view to any resale or distribution thereof.
(19)
Includes
12,495 shares of common stock issuable upon initial conversion of our Series
B
preferred stock, 3,318 shares of common stock issuable as dividends on our
Series B preferred stock and 3,123 shares of common stock underlying warrants.
The selling stockholder is not affiliated with a broker−dealer and acquired the
securities to be resold solely for the account of the selling stockholder,
and
not for the account of any other person or with a view to any resale or
distribution thereof.
(20)
Includes
833,200 shares of common stock currently outstanding, 125,000 shares of common
stock issuable upon initial conversion of our Series A preferred stock,
240,000 shares of common stock issuable upon initial conversion of our Series
B
preferred stock, 63,678 shares of common stock issuable as dividends on our
Series B preferred stock and 372,500 shares of common stock underlying warrants.
The address for Gimmel Partners, LP is 767 3rd Ave. New York, NY 10017. Alan
Weichselbaum has the power to vote and dispose of the securities held by
Gimmel
Partners, LP. The selling stockholder is not affiliated with a broker−dealer and
acquired the securities to be resold solely for the account of the selling
stockholder, and not for the account of any other person or with a view to
any
resale or distribution thereof.
(21)
Includes
20,800 shares of common stock issuable upon initial conversion of our Series
B
preferred stock, 5,521 shares of common stock issuable as dividends on
our
Series B preferred stock and 206,456 shares of common stock underlying
warrants
,
all of
which were issued as placement agent compensation in connection with the
March/May 2008 offering
,
except
for warrants to purchase 145,240 shares that were issued as placement agent
compensation in prior offerings.
The
selling stockholder is affiliated with a broker−dealer and acquired the
securities to be resold solely for the account of the selling stockholder,
and
not for the account of any other person or with a view to any resale or
distribution thereof.
(22)
Includes
10,000 shares of common stock issuable upon initial conversion of the Series
B
Preferred Stock, 2,654 shares of common stock issuable as dividends on our
Series B preferred stock and 2,500 shares of common stock underlying warrants.
The address for the Phyllis D. Kalista 401K is
150
First
Avenue, Suite 600, King of Prussia, PA 19406
.
Phyllis
Kalista has sole power to vote and dispose of the securities held. The selling
stockholder is affiliated with a broker−dealer and acquired the securities to be
resold solely for the account of the selling stockholder, and not for the
account of any other person or with a view to any resale or distribution
thereof.
(23)
Includes 38,331 shares of common stock issuable upon initial conversion
of our
Series B preferred stock, 10,179 shares of common stock issuable as dividends
on
our Series B preferred stock and 26,302 shares of common stock underlying
warrants, of which 13,342 shares of common stock issuable upon the conversion
of
our Series B preferred stock, 3,545 shares of common stock issuable upon
the
payment of dividends on our Series B preferred stock and warrants to purchase
20,055 shares were issued as placement agent compensation in connection
with the
March/May 2008 offering. The selling stockholder is affiliated with a
broker−dealer and acquired the securities to be resold solely for the account
of
the selling stockholder, and not for the account of any other person or
with a
view to any resale or distribution thereof.
(24)
Includes 66,989 shares of common stock issuable upon initial conversion
of our
Series B preferred stock, 17,777 shares of common stock issuable as dividends
on
our Series B preferred stock and 16,747 shares of common stock underlying
warrants. The address of Stifel Nicolaus Custodian for Dennis LaValle IRA
is 501
N. Broadway, St. Louis, MO 63102. Cathy Fassel is the custodian and has
power to
vote and dispose of the securities held by Stifel Nicolaus Custodian for
Dennis
LaValle IRA. The selling stockholder is affiliated with a broker−dealer and
acquired the securities to be resold solely for the account of the selling
stockholder, and not for the account of any other person or with a view
to any
resale or distribution thereof.
(25)
Includes
12,495 shares of common stock issuable upon initial conversion of our Series
B
preferred stock, 3,318 shares of our common stock issuable as dividends on
our
Series B preferred stock and 3,123 shares of common stock underlying warrants.
The selling stockholder is not affiliated with a broker−dealer and acquired the
securities to be resold solely for the account of the selling stockholder,
and
not for the account of any other person or with a view to any resale or
distribution thereof.
(26)
Includes 47,059 shares of common stock issuable upon initial conversion
of our
Series B preferred stock, 12,489 shares of common stock issuable as dividends
on
our Series B preferred stock and 36,764 shares of common stock underlying
warrants. The selling stockholder is not affiliated with a broker−dealer and
acquired the securities to be resold solely for the account of the selling
stockholder, and not for the account of any other person or with a view
to any
resale or distribution thereof.
(27)
Includes
464,200 shares of common stock currently outstanding, 200,000 shares of common
stock issuable upon initial conversion of our Series A preferred stock,
127,059 shares of common stock issuable upon initial conversion of our Series
B
preferred stock, 33,714 shares of common stock issuable as dividends on our
Series B preferred stock and 361,764 shares of common stock underlying warrants.
The address for Robbins Capital Partners L.P. is 100 First Stamford Place,
6th
Floor East Stamford, CT 06902. T. Robbins Capital Management is the registered
Investment Advisor and is the managing partner of Robbins Capital Partners,
L.P.
Thayer B. Robbins has sole power to vote and dispose of the securities held
by
Robbins Capital Partners L.P. The selling stockholder is not affiliated with
a
broker−dealer and acquired the securities to be resold solely for the account of
the selling stockholder, and not for the account of any other person or with
a
view to any resale or distribution thereof.
(28)
Includes
64,627 shares of common stock currently outstanding, 74,942 shares of common
stock issuable upon initial conversion of the Series B preferred stock,
19,886 shares of common stock issuable as dividends on our Series B preferred
stock and 75,878 shares of common stock underlying warrants. The address
for Rockmore Investment Master Fund Ltd. is 150 East 58th Street, 28th Floor
New
York, NY 10155. Rockmore Capital, LLC (“Rockmore Capital”) and Rockmore
Partners, LLC (“Rockmore Partners”), each a limited liability company formed
under the laws of the State of Delaware, serve as the investment manager
and
general partner, respectively, to Rockmore Investments (US) LP, a Delaware
limited partnership, which invests all of its assets through Rockmore Investment
Master Fund Ltd., an exempted company formed under the laws of Bermuda
(“Rockmore Master Fund”). By reason of such relationships, Rockmore Capital and
Rockmore Partners may be deemed to share dispositive power over the shares
of
our common stock owned by Rockmore Master Fund. Rockmore Capital and Rockmore
Partners disclaim beneficial ownership of such shares of our common stock.
Rockmore Partners has delegated authority to Rockmore Capital regarding the
portfolio management decisions with respect to the shares of common stock
owned
by Rockmore Master Fund and, as of May 27, 2008, Mr. Bruce T. Bernstein and
Mr.
Brian Daly, as officers of Rockmore Capital, are responsible for the portfolio
management decisions of the shares of common stock owned by Rockmore Master
Fund. By reason of such authority, Messrs. Bernstein and Daly may be deemed
to
share dispositive power over the shares of our common stock owned by Rockmore
Master Fund. By reason of such authority, Messrs. Bernstein and Daly may
be
deemed to share dispositive power over the shares of our common stock owned
by
Rockmore Master Fund. Messrs. Bernstein and Daly disclaim beneficial ownership
of such shares of our common stock and neither of such persons has any legal
right to maintain such authority. No other person has sole or shared voting
or
dispositive power with respect to the shares of our common stock as those
terms
are used for purposes under Regulation 13D-G of the Securities Exchange Act
of
1934, as amended. No person or “group” (as that term is used in Section 13(d) of
the Securities Exchange Act of 1934, as amended, or the SEC’s Regulation 13D-G)
controls Rockmore Master Fund. The selling stockholder is not affiliated
with a
broker−dealer and acquired the securities to be resold solely for the account of
the selling stockholder, and not for the account of any other person or with
a
view to any resale or distribution thereof.
(29)
Includes
62,400 shares of common stock currently outstanding, 42,353 shares of common
stock issuable upon initial conversion of the Series B preferred
stock, 11,240 shares of common stock issuable as dividends on our Series B
preferred stock and 70,588 shares of common stock underlying warrants. The
selling stockholder is not affiliated with a broker−dealer and acquired the
securities to be resold solely for the account of the selling stockholder,
and
not for the account of any other person or with a view to any resale or
distribution thereof.
(30)
Includes
72,472 shares of common stock currently outstanding, 49,978 shares of common
stock issuable upon initial conversion of our Series B preferred
shares, 13,268 shares of common stock issuable as dividends on our Series B
preferred stock and 12,494 shares of common stock underlying warrants. The
selling stockholder is not affiliated with a broker−dealer and acquired the
securities to be resold solely for the account of the selling stockholder,
and
not for the account of any other person or with a view to any resale or
distribution thereof.
(31)
Includes
20,000 shares of common stock issuable upon initial conversion of our Series
B
preferred stock, 5,308 shares of common stock issuable as dividends on our
Series B preferred stock and 5,000 shares of common stock underlying warrants.
The selling stockholder is not affiliated with a broker−dealer and acquired the
securities to be resold solely for the account of the selling stockholder,
and
not for the account of any other person or with a view to any resale or
distribution thereof.
(32)
Includes
60,000 shares of common stock issuable upon initial conversion of our Series
B
preferred stock, 15,920 shares of common stock issuable as dividends on our
Series B preferred stock and 15,000 shares of common stock underlying warrants.
Scott and Mary Strickland have shared power to vote and dispose of the
securities held. The selling stockholder is not affiliated with a broker−dealer
and acquired the securities to be resold solely for the account of the selling
stockholder, and not for the account of any other person or with a view to
any
resale or distribution thereof.
(33)
Includes
19,412 shares of common stock issuable upon initial conversion of our Series
B
preferred stock, 5,153 shares of common stock issuable as dividends on our
Series B preferred stock and 4,853 shares of common stock underlying warrants.
The address for Truk International Fund, L.P. is 1 East 52
nd
Street,
6
th
Floor,
New York, NY 10222. Michael Fein and Stephen Saltzstein have shared power
to
vote and dispose of the securities held. The selling stockholder is not
affiliated with a broker−dealer and acquired the securities to be resold solely
for the account of the selling stockholder, and not for the account of any
other
person or with a view to any resale or distribution thereof.
(34)
Includes
39,412 shares of common stock issuable upon initial conversion of our Series
B
preferred stock, 10,461 shares issuable as dividends on our Series B preferred
stock and 9,853 shares of common stock underlying warrants. The address
for Truk
Opportunity
Fund,
LLC
is 1 East 52
nd
Street,
6
th
Floor,
New York, NY 10222. Michael Fein has sole power to vote and dispose of
the
securities held. The selling stockholder is not affiliated with a broker−dealer
and acquired the securities to be resold solely for the account of the
selling
stockholder, and not for the account of any other person or with a view
to any
resale or distribution thereof.
(35)
Includes
100,000 shares of common stock issuable upon initial conversion of our Series
B
preferred shares, 26,534 shares of common stock issuable as dividends on
our
Series B preferred shares and 25,000 shares of common stock underlying warrants.
The address for Whalehaven Capital Fund Limited is
160
Summit Avenue, Montvale, NJ 07645
.
Brian
Mazzella, Trevor Williams, Arthur Jones and Jason Adkins have shared power
to
vote and dispose of the securities held. The selling stockholder is not
affiliated with a broker−dealer and acquired the securities to be resold solely
for the account of the selling stockholder, and not for the account of any
other
person or with a view to any resale or distribution thereof.
(36)
Includes
131,250 shares of common stock currently outstanding, 40,000 shares of
common stock issuable upon initial conversion of our Series B preferred shares,
10,614 shares of common stock issuable as dividends on our Series B preferred
shares and 75,625 shares of common stock underlying warrants. The address
for
Worthington Growth LP is
256
North
Street, Rye, NY 10580
.
Clifford Henry has sole power to vote and dispose of the securities held.
The
selling stockholder is not affiliated with a broker−dealer and acquired the
securities to be resold solely for the account of the selling stockholder,
and
not for the account of any other person or with a view to any resale or
distribution thereof.
PLAN
OF DISTRIBUTION
Distribution
by Selling Stockholders
This
prospectus relates to shares of our common stock held by the selling
stockholders. Each selling stockholder of the common stock and any of their
pledgees, assignees and successors-in-interest may, from time to time, sell
any
or all of their shares of common stock through the American Stock Exchange,
any
market or trading facility on which the shares are traded or in private
transactions. These sales may be at fixed or negotiated prices. A
selling stockholder may use any one or more of the following methods when
selling shares:
|
·
|
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 effective date of the registration
statement of which this prospectus is a
part,
|
|
·
|
broker-dealers
may agree with the selling stockholders to sell a specified number
of such
shares at a stipulated price per
share,
|
|
·
|
through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or
otherwise,
|
|
·
|
a
combination of any such methods of sale,
or
|
|
·
|
any
other method permitted pursuant to applicable
law.
|
The
selling stockholders also may sell shares under Rule 144 under the Securities
Act of 1933, as amended, if available, rather than under this
prospectus.
Broker-dealers
engaged by the selling stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or
discounts from the selling stockholders (or, if any broker-dealer acts as agent
for the purchaser of shares, from the purchaser) in amounts to be negotiated,
but, except as set forth in a supplement to this prospectus, in the case of
an
agency transaction not in excess of a customary brokerage commission in
compliance with NASDR Rule 2440; and in the case of a principal transaction
a
markup or markdown in compliance with NASDR IM-2440.
In
connection with the sale of the common stock or interests therein, the selling
stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume. The selling
stockholders also may sell shares of the common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The
selling stockholders also may enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).
The
selling stockholders and any broker-dealers or agents that are involved in
selling the shares may be considered “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
Because
selling stockholders may be considered “underwriters” within the meaning of the
Securities Act, they will be subject to the prospectus delivery requirements
of
the Securities Act including Rule 172 thereunder. In addition, any
securities covered by this prospectus which qualify for sale pursuant to Rule
144 under the Securities Act may be sold under Rule 144 rather than under this
prospectus. There is no underwriter or coordinating broker acting in
connection with the proposed sale of the shares by the selling
stockholders.
We
agreed
to keep this prospectus effective until all securities registered under the
registration statement have been sold or are otherwise able to be sold pursuant
to Rule 144 under the Securities Act, without regard to volume limitations,
provided we comply with our reporting obligations. The shares will be
sold only through registered or licensed brokers or dealers if required under
applicable state securities laws. In addition, in certain states, the shares
may
not be sold unless they have been registered or qualified for sale in the
applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
Under
applicable rules and regulations under the Securities Exchange Act of 1934,
any
person engaged in the distribution of the shares may not simultaneously engage
in market making activities with respect to the common stock for the applicable
restricted period, as defined in Regulation M, prior to the commencement of
the
distribution. In addition, the selling stockholders will be subject
to applicable provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, which may limit the timing of purchases
and
sales of shares of the common stock by the selling stockholders or any other
person. We will make copies of this prospectus available to the
selling stockholders and will inform them of the need to deliver a copy of
this
prospectus to each purchaser at or prior to the time of the sale (including
by
compliance with Rule 172 under the Securities Act).
We
are
required to pay certain fees and expenses incurred by us incident to the
registration of the shares. We have agreed to indemnify the selling
stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.
The
selling stockholders may offer all of the shares of common stock for
sale. Further, because it is possible that a significant number of
shares could be sold at the same time under this prospectus, such sales, or
that
possibility, may depress the market price of our common stock. We
cannot assure you, however, that any of the selling stockholders will sell
any
or all of the shares of common stock they may offer.
Transfer
Agent
The
transfer agent and registrar for our common stock is:
Olde
Monmouth Stock Transfer Co., Inc.
200
Memorial Parkway
Atlantic
Highlands, NJ 07716.
(732)
872-2727
We
serve
as warrant agent for our warrants.
Provisions
of Florida Law
We
are
governed by two Florida statutes that may deter or frustrate takeovers of
Florida corporations. The Florida Control Share Act generally provides that
shares acquired in a “control share acquisition” will not possess any voting
rights unless such voting rights are approved by a majority of the corporation’s
disinterested shareholders. A “control share acquisition” is an acquisition,
directly or indirectly, by any person of ownership of, or the power to direct
the exercise of voting power with respect to, issued and outstanding “control
shares” of a publicly held Florida corporation. “Control shares” are shares,
which, except for the Florida Control Share Act, would have voting power that,
when added to all other shares owned by a person or in respect to which such
person may exercise or direct the exercise of voting power, would entitle such
person immediately after acquisition of such shares, directly or indirectly,
alone or as part of a group, to exercise or direct the exercise of voting power
in the election of directors within any of the following ranges: (1) at least
20% but less than 33−1/3% of all voting power; (2) at least 33−1/3% but less
than a majority of all voting power; or (3) a majority or more of all voting
power. The Florida Affiliated Transactions Act generally requires
supermajority approval by disinterested shareholders of certain specified
transactions between a public corporation and holders of more than 10% of the
outstanding voting shares of the corporation (or their affiliates).
Florida
law and our bylaws also authorize us to indemnify our directors, officers,
employees and agents under certain circumstances. In addition,
Florida law presently limits the personal liability of corporate directors
for
monetary damages, except where the directors (i) breach their fiduciary duties
and (ii) such breach constitutes or includes certain violations of criminal
law,
a transaction from which the directors derived an improver personal benefit,
certain unlawful distributions or certain other reckless, wanton or willful
acts
or misconduct.
LEGAL
MATTERS
Hogan
& Hartson LLP, 555 Thirteenth Street N.W., Washington, DC
20004 will pass upon the validity of the shares of common stock offered in
this prospectus.
EXPERTS
The
consolidated financial statements as of December 31, 2007 and 2006 and the
related consolidated statements of operations, stockholders’ equity, and cash
flows for the year ended December 31, 2007 and for the period from February
28,
2006 (inception) to December 31, 2006 incorporated in this prospectus by
reference from our Annual Report on Form 10-K for the year ended
December 31, 2007 and 2006 have been audited by Imowitz Koenig & Co.,
LLP, an independent registered public accounting firm, as stated in their
report, which is incorporated herein by reference, and has been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We
file
annual, quarterly and current reports, proxy statements and other information
with the SEC. Here are ways you can review and obtain copies of this
information:
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What
is Available
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Where
to Get it
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Paper
copies of information
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SEC’s
Public Reference Room
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100
F Street, N.E.
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Washington, D.C.
20549
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On-line
information, free of charge
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SEC’s
Internet website at
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www.sec.gov
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Information
about the SEC’s Public Reference Room
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Call
the SEC at 1-800-SEC-0330
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We
have
filed with the SEC a registration statement under the Securities Act, as
amended, that registers the distribution of these securities. The registration
statement, including the attached exhibits and schedules, contains additional
relevant information about us and the securities. This prospectus does
not
contain all of the information set forth in the registration statement. You
can
get a copy of the registration statement, at prescribed rates, from the sources
listed above. The registration statement and the documents referred to below
under “Incorporation of Certain Information by Reference” are also available on
our Internet website,
www.newgenerationbiofuels.com
,
under
“Recent Company Filings.” Information contained on our Internet website does not
constitute a part of this prospectus. You can also obtain these documents from
us, without charge (other than exhibits, unless the exhibits are specifically
incorporated by reference), by requesting them in writing or by telephone at
the
following address:
New
Generation Biofuels Holdings, Inc.
Attn:
Cary J. Claiborne
1000
Primera Boulevard
Lake
Mary, FL 32746
(443)
535-8660
Internet
Website:
www.newgenerationbiofuels.com
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The
SEC
allows us to “incorporate by reference” information into this prospectus. This
means that we can disclose important information to you by referring you
to
another document filed separately with the SEC. The information incorporated
by
reference is considered to be a part of this prospectus, except for any
information that is superseded by other information that is included in or
incorporated by reference into this document. We incorporate by reference
each
of the documents listed below:
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our
Annual Report on Form 10-K for the year ended December 31, 2007
(SEC File No. 000-51903);
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•
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our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2008
(SEC File No. 001-34022);
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•
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our
Current Reports on Form 8-K filed with the SEC on January 11, 2008,
February 25, 2008, March 27, 2008, March 31, 2008, April 22, 2008,
May 14,
2008 and June 6, 2008 (SEC File Nos. 000-51903 and 001-34022);
and
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•
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the
description of our capital stock contained in our Registration
Statement
on Form 8-A filed with the SEC on April 14, 2008 (SEC File No.
001-34022).
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We
incorporate by reference any additional documents that we may file with the
SEC
under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934
(other
than those “furnished” pursuant to Item 2.02 or Item 7.01 of Form 8-K or other
information “furnished” to the SEC)
from the date of the registration
statement of which this prospectus is part until the termination of the offering
of the securities. These documents may include annual, quarterly and current
reports, as well as proxy statements. Any material that we later file with
the
SEC will automatically update and replace the information previously filed
with
the SEC.
For
purposes of this registration statement, any statement contained in a document
incorporated or deemed to be incorporated herein by reference shall be deemed
to
be modified or superseded to the extent that a statement contained herein or
in
any other subsequently filed document which also is or is deemed to be
incorporated herein by reference modifies or supersedes such statement in such
document.
NEW
GENERATION BIOFUELS HOLDINGS, INC.
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution.
Registration
Fees
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$
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703
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Transfer
Agent Fees
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1,200
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Legal
Fees and Expenses
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30,000
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Printing
and Engraving Expenses
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1,300
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Accounting
Fees and Expenses
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20,000
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Miscellaneous
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0
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Total
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$
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53,203
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Item
15. Indemnification of Directors and Officers.
Section
607.0850 of the Florida Business Corporation Act provides for the
indemnification of officers, directors, employees, and agents. A corporation
shall have power to indemnify any person who was or is a party to any proceeding
(other than an action by, or in the right of, the corporation), by reason of
the
fact that he or she is or was a director, officer, employee, or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership,
joint
venture, trust, or other enterprise against liability incurred in connection
with such proceeding, including any appeal thereof, if he or she acted in good
faith and in a manner he or she reasonably believed to be in, or not opposed
to,
the best interests of the corporation and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his or her conduct was
unlawful. The termination of any proceeding by judgment, order, settlement,
or
conviction or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the person did not act in good faith and
in a
manner which he or she reasonably believed to be in, or not opposed to, the
best
interests of the corporation or, with respect to any criminal action or
proceeding, had reasonable cause to believe that his or her conduct was
unlawful.
We
have
agreed to indemnify each of our directors and certain officers against certain
liabilities, including liabilities under the Securities Act. Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to our directors, officers and controlling persons pursuant to the
provisions described above, or otherwise, we have been advised that in the
opinion of the U.S. Securities and Exchange Commission such indemnification
is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
In the
event that a claim for indemnification against such liabilities (other than
our
payment of expenses incurred or paid by our director, officer or controlling
person in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
securities being registered, we will, unless in the opinion of our counsel
the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by
the final adjudication of such issue.
Item 16.
Exhibits.
The
Exhibit Table included elsewhere in this registration statement is incorporated
herein by reference.
Item 17.
Undertakings.
The
undersigned registrant hereby undertakes:
(1)
To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i)
To
include any propectus required by section 10(a)(3) of the Securities Act
of
1933;
(ii)
To
reflect in the prospectus any facts or events arising after the effective
date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental
change
in the information set forth in the registration statement. Notwithstanding
the
foregoing, any increase or decrease in volume of securities offered (if
the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) (§230.424(b) of this chapter) if, in the
aggregate, the changes in volume and price represent no more than 20% change
in
the maximum aggregate offering price set forth in the “Calculation of
Registration Fee” table in the effective registration
statement.
(iii)
To
include any material information with respect to the plan of distribution
not
previously disclosed in the registration statement or any material change
to
such information in the registration statement;
provided,
however
, t
hat
p
aragraphs
(a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the
registration statement is on Form S-3 (§239.13 of this chapter) or Form F-3
(§239.33 of this chapter) and the information required to be included in
a
post-effective amendment by those paragraphs is contained in reports filed
with
or furnished to the Commission by the registrant pursuant to section 13
or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by
reference in the registration statement, or is contained in a form of prospectus
filed pursuant to Rule 424(b) (§230.424(b) of this chapter) that is part of the
registration statement.
(2)
That,
for the purpose of determining any liability under the Securities Act of
1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3)
To
remove from registration by means of a post-effective amendment any of
the
securities being registered which remain unsold at the termination of the
offering.
(4)
That,
for the purpose of determining liability under the Securities Act of 1933
to any
purchaser, each prospectus filed pursuant to Rule 424(b) as part of a
registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance
on
Rule 430A (§230.430A of this chapter), shall be deemed to be part of and
included in the registration statement as of the date it is first used
after
effectiveness.
Provided,
however,
that
no
statement made in a registration statement or prospectus that is part of
the
registration statement or made in a document incorporated or deemed incorporated
by reference into the registration statement or prospectus that is part
of the
registration statement will, as to a purchaser with a time of contract
of sale
prior to such first use, supersede or modify any statement that was made
in the
registration statement or prospectus that was part of the registration
statement
or made in any such document immediately prior to such date of first
use.
(5) That,
for the purposes of determining any liability under the Securities Act of
1933,
each filing of the registrant’s annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan’s annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(6)
To
deliver or cause to be delivered with the prospectus, to each person to whom
the
prospectus is sent or given, the latest annual report to security holders
that
is incorporated by reference in the prospectus and furnished pursuant to
and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information required to
be
presented by Article 3 of Regulation S-X are not set forth in the prospectus,
to
deliver, or cause to be delivered to each person to whom the prospectus is
sent
or given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial
information.
(7)
Insofar as indemnification for liabilities arising under the Securities
Act of
1933 may be permitted to directors, officers and controlling persons of
the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and
is,
therefore, unenforceable. In the event that a claim for indemnification
against
such liabilities (other than the payment by the registrant of expenses
incurred
or paid by a director, officer or controlling person of the registrant
in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being
registered, the registrant will, unless in the opinion of its counsel the
matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public
policy as expressed in the Act and will be governed by the final adjudication
of
such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of
the
requirements for filing on Form S-3 and has duly caused this Pre-Effective
Amendment No. 1 to the registration statement to be signed on its behalf
by the
undersigned, thereunto duly authorized, in the City of Houston, State of
Texas
on July 11, 2008.
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NEW
GENERATION BIOFUELS HOLDINGS, INC.
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By:
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/s/
David A. Gillespie
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David
A. Gillespie
President and Chief Executive Officer
(principal
executive officer)
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Pursuant
to the requirements of the Securities Act of 1933, this Pre-Effective Amendment
No. 1 to the registration statement has been signed by the following persons
in
the capacities and on the dates indicated.
Name
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Title
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Date
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/s/
David A. Gillespie
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President,
Chief Executive Officer and Director (principal executive
officer)
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July
11, 2008
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David
A. Gillespie
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/s/
Cary J. Claiborne
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Chief
Financial Officer (principal financial and accounting
officer)
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Cary
J. Claiborne
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/s/
Lee S. Rosen*
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Chairman
of the Board
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Lee
S. Rosen
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/s/
Phillip E. Pearce*
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Director
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Phillip
E. Pearce
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/s/
John E. Mack*
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Director
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John
E. Mack
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/s/
James R. Sheppard, Jr.*
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Director
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James
R. Sheppard, Jr.
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/s/
Steven F. Gilliland*
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Director
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Steven
F. Gilliland
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*
By:
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/s/
David A. Gillespie
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David
A. Gillespie
Attorney-in-Fact
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EXHIBIT
INDEX
Exhibit
No.
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Exhibit
Description
|
4.1
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Form
of $6.25 Warrant (incorporated by reference to Exhibit 4.1 to the
Current
Report on 8-K filed March 31, 2008).
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5.1*
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Opinion
of Hogan & Hartson LLP.
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23.1*
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Consent
of Imowitz Koenig & Co., LLP.
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23.2*
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Consent
of Hogan & Hartson, LLP (included in Exhibit
5.1).
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24.1
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Power
of Attorney (included on signature
page).
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*
Filed
herewith.
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