-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AZTUg4F8RPK71e4IOs+6pxrW+ZeOK1UfQN0CtxC4pXr73/sGphtXlv2CIRcyWZlD 4MkOVDQqYQFwNsS7Xp9gow== 0000905718-08-000160.txt : 20080214 0000905718-08-000160.hdr.sgml : 20080214 20080214111139 ACCESSION NUMBER: 0000905718-08-000160 CONFORMED SUBMISSION TYPE: SC 13G/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20080214 DATE AS OF CHANGE: 20080214 GROUP MEMBERS: CALLIOPE CAPITAL CORPORATION GROUP MEMBERS: DAVID GRIN GROUP MEMBERS: EUGENE GRIN GROUP MEMBERS: LAURUS CAPITAL MANAGEMENT, LLC GROUP MEMBERS: PSOURCE STRUCTURED DEBT LIMITED SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: Lattice INC CENTRAL INDEX KEY: 0000350644 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 222011859 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13G/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-34249 FILM NUMBER: 08609860 BUSINESS ADDRESS: STREET 1: 1919 SPRINGDALE RD CITY: CHERRY HILL STATE: NJ ZIP: 08003 BUSINESS PHONE: 8564240068 MAIL ADDRESS: STREET 1: 1919 SPRINGDALE RD CITY: CHERRY HILL STATE: NJ ZIP: 08003 FORMER COMPANY: FORMER CONFORMED NAME: SCIENCE DYNAMICS CORP DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: LAURUS MASTER FUND LTD CENTRAL INDEX KEY: 0001189294 IRS NUMBER: 980337673 STATE OF INCORPORATION: E9 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13G/A BUSINESS ADDRESS: STREET 1: 152 W 57TH ST CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2125415800 SC 13G/A 1 lattice13gam2.txt SC13GAM2 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13G UNDER THE SECURITIES EXCHANGE ACT OF 1934 (Amendment No. 2) LATTICE INCORPORATED - -------------------------------------------------------------------------------- (Name of Issuer) COMMON STOCK, PAR VALUE $0.01 PER SHARE - -------------------------------------------------------------------------------- (Title of Class of Securities) 518414107 - -------------------------------------------------------------------------------- (CUSIP Number) December 31, 2007 - -------------------------------------------------------------------------------- (Date of Event Which Requires Filing of this Statement) Check the appropriate box to designate the rule pursuant to which this Schedule 13G is filed: [ ] Rule 13d-1(b) [X] Rule 13d-1(c) [ ] Rule 13d-1(d) *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 518414107 - -------------------------------------------------------------------------------- (1) Names of Reporting Persons. I.R.S. Identification Nos. of Above Persons (entities only): Laurus Master Fund, Ltd. 98-0337673 - -------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- (3) SEC Use Only - -------------------------------------------------------------------------------- (4) Citizenship or Place of Organization: Cayman Islands - -------------------------------------------------------------------------------- Number of Shares Beneficially Owned by Each Reporting Person With (5) Sole Voting Power: 0* -------------------------------------- (6) Shared Voting Power: 1,661,321* -------------------------------------- (7) Sole Dispositive Power: 0* -------------------------------------- (8) Shared Dispositive Power: 1,661,321* -------------------------------------- - -------------------------------------------------------------------------------- (9) Aggregate Amount Beneficially Owned by Each Reporting Person: 1,661,321 - -------------------------------------------------------------------------------- (10) Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See Instructions): [X] - -------------------------------------------------------------------------------- (11) Percent of Class Represented by Amount in Row (9): 9.99% - -------------------------------------------------------------------------------- (12) Type of Reporting Person (See Instructions): CO - -------------------------------------------------------------------------------- * Based upon 16,629,848 shares of the common stock, par value $.01 per share (the "Shares") of Lattice Incorporated, a Delaware corporation (the "Company") as of November 16, 2007, as disclosed in the Company's Quarterly Report on Form 10QSB for the quarterly period ending September 30, 2007. As of December 31, 2007, PSource Structured Debt Limited ("PSource") and Calliope Capital Corporation ("Calliope" and together with PSource, the "Investors") held (i) warrants, as amended, to purchase up to 600,000 Shares at an exercise price of $1.10 per share, subject to certain adjustments (the "First Warrants"), (ii) warrants to purchase 1,458,333 Shares at an exercise price of $0.10 per Share, subject to certain adjustments (the "Second Warrant"), (iii) warrants to purchase 20,000 Shares at an exercise price of $0.52 per Share, subject to certain adjustments (the "Third Warrant"); (iv) warrants to purchase 25,000 Shares, exercisable as follows: 12,500 Shares at an exercise price of $0.99 per Share; 7,500 Shares at an exercise price of $1.07 per Share; and 5,000 Shares at an exercise price of $1.24 per Share, each subject to certain adjustments (the "Fourth Warrant", and together with the First Warrant and the Third Warrant, the "Older Warrants"), and (v) 100,000 Shares. The number of Shares underlying all warrants described herein have been adjusted to take into account a 10:1 split of the Company's Shares that occurred on February 4, 2007. Each of the Older Warrants contains an issuance limitation prohibiting the Investors from converting those securities to the extent that such conversion would result in beneficial ownership by the Investors of more than 4.99% of the Shares then issued and outstanding (the "4.99 Issuance Limitation"). The Second Warrant contains an issuance limitation prohibiting the Investors from converting those securities to the extent that such conversion would result in beneficial ownership by the Investors of more than 9.99% of the Shares then issued and outstanding (the "9.99 Issuance Limitation" and, together with the 4.99 Issuance Limitation, the "Issuance Limitations"). The Issuance Limitations may be waived by Investors upon at least 61 days prior notice to the Company. In addition, with respect to the Second Warrant, the Issuance Limitation shall also automatically become null and void upon notice to the holder of the occurrence and/or continuance of an event of default (as defined in and pursuant to the terms of the applicable instrument). In addition, with respect to the First Warrant and the Third Warrant, the Issuance Limitation shall also automatically become null and void upon the occurrence and/or continuance of an event of default (as defined in and pursuant to the terms of the applicable instrument). Calliope is a wholly owned subsidiary of Laurus Master Fund, Ltd. (the "Fund"). PSource and the Fund are managed by Laurus Capital Management, LLC. Eugene Grin and David Grin, through other entities, are the controlling principals of Laurus Capital Management, LLC and share sole voting and investment power over the securities owned by the Investors reported in this Schedule 13G, as amended. CUSIP No. 518414107 - -------------------------------------------------------------------------------- (1) Names of Reporting Persons. I.R.S. Identification Nos. of Above Persons (entities only): Laurus Capital Management, LLC 13-4150669 - -------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- (3) SEC Use Only - -------------------------------------------------------------------------------- (4) Citizenship or Place of Organization: Delaware - -------------------------------------------------------------------------------- Number of Shares Beneficially Owned by Each Reporting Person With (5) Sole Voting Power: 0* -------------------------------------- (6) Shared Voting Power: 1,661,321* -------------------------------------- (7) Sole Dispositive Power: 0* -------------------------------------- (8) Shared Dispositive Power: 1,661,321* -------------------------------------- - -------------------------------------------------------------------------------- (9) Aggregate Amount Beneficially Owned by Each Reporting Person: 1,661,321* - -------------------------------------------------------------------------------- (10) Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See Instructions): [X] - -------------------------------------------------------------------------------- (11) Percent of Class Represented by Amount in Row (9): 9.99% - -------------------------------------------------------------------------------- (12) Type of Reporting Person (See Instructions): OO - -------------------------------------------------------------------------------- * Based upon 16,629,848 shares of the common stock, par value $.01 per share (the "Shares") of Lattice Incorporated, a Delaware corporation (the "Company") as of November 16, 2007, as disclosed in the Company's Quarterly Report on Form 10QSB for the quarterly period ending September 30, 2007. As of December 31, 2007, PSource Structured Debt Limited ("PSource") and Calliope Capital Corporation ("Calliope" and together with PSource, the "Investors") held (i) warrants, as amended, to purchase up to 600,000 Shares at an exercise price of $1.10 per share, subject to certain adjustments (the "First Warrants"), (ii) warrants to purchase 1,458,333 Shares at an exercise price of $0.10 per Share, subject to certain adjustments (the "Second Warrant"), (iii) warrants to purchase 20,000 Shares at an exercise price of $0.52 per Share, subject to certain adjustments (the "Third Warrant"); (iv) warrants to purchase 25,000 Shares, exercisable as follows: 12,500 Shares at an exercise price of $0.99 per Share; 7,500 Shares at an exercise price of $1.07 per Share; and 5,000 Shares at an exercise price of $1.24 per Share, each subject to certain adjustments (the "Fourth Warrant", and together with the First Warrant and the Third Warrant, the "Older Warrants"), and (v) 100,000 Shares. The number of Shares underlying all warrants described herein have been adjusted to take into account a 10:1 split of the Company's Shares that occurred on February 4, 2007. Each of the Older Warrants contains an issuance limitation prohibiting the Investors from converting those securities to the extent that such conversion would result in beneficial ownership by the Investors of more than 4.99% of the Shares then issued and outstanding (the "4.99 Issuance Limitation"). The Second Warrant contains an issuance limitation prohibiting the Investors from converting those securities to the extent that such conversion would result in beneficial ownership by the Investors of more than 9.99% of the Shares then issued and outstanding (the "9.99 Issuance Limitation" and, together with the 4.99 Issuance Limitation, the "Issuance Limitations"). The Issuance Limitations may be waived by Investors upon at least 61 days prior notice to the Company. In addition, with respect to the Second Warrant, the Issuance Limitation shall also automatically become null and void upon notice to the holder of the occurrence and/or continuance of an event of default (as defined in and pursuant to the terms of the applicable instrument). In addition, with respect to the First Warrant and the Third Warrant, the Issuance Limitation shall also automatically become null and void upon the occurrence and/or continuance of an event of default (as defined in and pursuant to the terms of the applicable instrument). Calliope is a wholly owned subsidiary of Laurus Master Fund, Ltd. (the "Fund"). PSource and the Fund are managed by Laurus Capital Management, LLC. Eugene Grin and David Grin, through other entities, are the controlling principals of Laurus Capital Management, LLC and share sole voting and investment power over the securities owned by the Investors reported in this Schedule 13G, as amended. CUSIP No. 518414107 - -------------------------------------------------------------------------------- (1) Names of Reporting Persons. I.R.S. Identification Nos. of Above Persons (entities only): PSource Structured Debt Limited - -------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- (3) SEC Use Only - -------------------------------------------------------------------------------- (4) Citizenship or Place of Organization: Guernsey - -------------------------------------------------------------------------------- Number of Shares Beneficially Owned by Each Reporting Person With (5) Sole Voting Power: 0* -------------------------------------- (6) Shared Voting Power: 1,661,321* -------------------------------------- (7) Sole Dispositive Power: 0* -------------------------------------- (8) Shared Dispositive Power: 1,661,321* -------------------------------------- - -------------------------------------------------------------------------------- (9) Aggregate Amount Beneficially Owned by Each Reporting Person: 1,661,321 - -------------------------------------------------------------------------------- (10) Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See Instructions): [X] - -------------------------------------------------------------------------------- (11) Percent of Class Represented by Amount in Row (9): 9.99% - -------------------------------------------------------------------------------- (12) Type of Reporting Person (See Instructions): OO - -------------------------------------------------------------------------------- * Based upon 16,629,848 shares of the common stock, par value $.01 per share (the "Shares") of Lattice Incorporated, a Delaware corporation (the "Company") as of November 16, 2007, as disclosed in the Company's Quarterly Report on Form 10QSB for the quarterly period ending September 30, 2007. As of December 31, 2007, PSource Structured Debt Limited ("PSource") and Calliope Capital Corporation ("Calliope" and together with PSource, the "Investors") held (i) warrants, as amended, to purchase up to 600,000 Shares at an exercise price of $1.10 per share, subject to certain adjustments (the "First Warrants"), (ii) warrants to purchase 1,458,333 Shares at an exercise price of $0.10 per Share, subject to certain adjustments (the "Second Warrant"), (iii) warrants to purchase 20,000 Shares at an exercise price of $0.52 per Share, subject to certain adjustments (the "Third Warrant"); (iv) warrants to purchase 25,000 Shares, exercisable as follows: 12,500 Shares at an exercise price of $0.99 per Share; 7,500 Shares at an exercise price of $1.07 per Share; and 5,000 Shares at an exercise price of $1.24 per Share, each subject to certain adjustments (the "Fourth Warrant", and together with the First Warrant and the Third Warrant, the "Older Warrants"), and (v) 100,000 Shares. The number of Shares underlying all warrants described herein have been adjusted to take into account a 10:1 split of the Company's Shares that occurred on February 4, 2007. Each of the Older Warrants contains an issuance limitation prohibiting the Investors from converting those securities to the extent that such conversion would result in beneficial ownership by the Investors of more than 4.99% of the Shares then issued and outstanding (the "4.99 Issuance Limitation"). The Second Warrant contains an issuance limitation prohibiting the Investors from converting those securities to the extent that such conversion would result in beneficial ownership by the Investors of more than 9.99% of the Shares then issued and outstanding (the "9.99 Issuance Limitation" and, together with the 4.99 Issuance Limitation, the "Issuance Limitations"). The Issuance Limitations may be waived by Investors upon at least 61 days prior notice to the Company. In addition, with respect to the Second Warrant, the Issuance Limitation shall also automatically become null and void upon notice to the holder of the occurrence and/or continuance of an event of default (as defined in and pursuant to the terms of the applicable instrument). In addition, with respect to the First Warrant and the Third Warrant, the Issuance Limitation shall also automatically become null and void upon the occurrence and/or continuance of an event of default (as defined in and pursuant to the terms of the applicable instrument). Calliope is a wholly owned subsidiary of Laurus Master Fund, Ltd. (the "Fund"). PSource and the Fund are managed by Laurus Capital Management, LLC. Eugene Grin and David Grin, through other entities, are the controlling principals of Laurus Capital Management, LLC and share sole voting and investment power over the securities owned by the Investors reported in this Schedule 13G, as amended. CUSIP No. 518414107 - -------------------------------------------------------------------------------- (1) Names of Reporting Persons. I.R.S. Identification Nos. of Above Persons (entities only): Calliope Capital Corporation 57-1237865 - -------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- (3) SEC Use Only - -------------------------------------------------------------------------------- (4) Citizenship or Place of Organization: Delaware - -------------------------------------------------------------------------------- Number of Shares Beneficially Owned by Each Reporting Person With (5) Sole Voting Power: 0* -------------------------------------- (6) Shared Voting Power: 1,661,321* -------------------------------------- (7) Sole Dispositive Power: 0* -------------------------------------- (8) Shared Dispositive Power: 1,661,321* -------------------------------------- - -------------------------------------------------------------------------------- (9) Aggregate Amount Beneficially Owned by Each Reporting Person: 1,661,321 - -------------------------------------------------------------------------------- (10) Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See Instructions): [X] - -------------------------------------------------------------------------------- (11) Percent of Class Represented by Amount in Row (9): 9.99% - -------------------------------------------------------------------------------- (12) Type of Reporting Person (See Instructions): OO - -------------------------------------------------------------------------------- * Based upon 16,629,848 shares of the common stock, par value $.01 per share (the "Shares") of Lattice Incorporated, a Delaware corporation (the "Company") as of November 16, 2007, as disclosed in the Company's Quarterly Report on Form 10QSB for the quarterly period ending September 30, 2007. As of December 31, 2007, PSource Structured Debt Limited ("PSource") and Calliope Capital Corporation ("Calliope" and together with PSource, the "Investors") held (i) warrants, as amended, to purchase up to 600,000 Shares at an exercise price of $1.10 per share, subject to certain adjustments (the "First Warrants"), (ii) warrants to purchase 1,458,333 Shares at an exercise price of $0.10 per Share, subject to certain adjustments (the "Second Warrant"), (iii) warrants to purchase 20,000 Shares at an exercise price of $0.52 per Share, subject to certain adjustments (the "Third Warrant"); (iv) warrants to purchase 25,000 Shares, exercisable as follows: 12,500 Shares at an exercise price of $0.99 per Share; 7,500 Shares at an exercise price of $1.07 per Share; and 5,000 Shares at an exercise price of $1.24 per Share, each subject to certain adjustments (the "Fourth Warrant", and together with the First Warrant and the Third Warrant, the "Older Warrants"), and (v) 100,000 Shares. The number of Shares underlying all warrants described herein have been adjusted to take into account a 10:1 split of the Company's Shares that occurred on February 4, 2007. Each of the Older Warrants contains an issuance limitation prohibiting the Investors from converting those securities to the extent that such conversion would result in beneficial ownership by the Investors of more than 4.99% of the Shares then issued and outstanding (the "4.99 Issuance Limitation"). The Second Warrant contains an issuance limitation prohibiting the Investors from converting those securities to the extent that such conversion would result in beneficial ownership by the Investors of more than 9.99% of the Shares then issued and outstanding (the "9.99 Issuance Limitation" and, together with the 4.99 Issuance Limitation, the "Issuance Limitations"). The Issuance Limitations may be waived by Investors upon at least 61 days prior notice to the Company. In addition, with respect to the Second Warrant, the Issuance Limitation shall also automatically become null and void upon notice to the holder of the occurrence and/or continuance of an event of default (as defined in and pursuant to the terms of the applicable instrument). In addition, with respect to the First Warrant and the Third Warrant, the Issuance Limitation shall also automatically become null and void upon the occurrence and/or continuance of an event of default (as defined in and pursuant to the terms of the applicable instrument). Calliope is a wholly owned subsidiary of Laurus Master Fund, Ltd. (the "Fund"). PSource and the Fund are managed by Laurus Capital Management, LLC. Eugene Grin and David Grin, through other entities, are the controlling principals of Laurus Capital Management, LLC and share sole voting and investment power over the securities owned by the Investors reported in this Schedule 13G, as amended. CUSIP No. 518414107 - -------------------------------------------------------------------------------- (1) Names of Reporting Persons. I.R.S. Identification Nos. of Above Persons (entities only): David Grin - -------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- (3) SEC Use Only - -------------------------------------------------------------------------------- (4) Citizenship or Place of Organization: Israel - -------------------------------------------------------------------------------- Number of Shares Beneficially Owned by Each Reporting Person With (5) Sole Voting Power: 0* -------------------------------------- (6) Shared Voting Power: 1,661,321* -------------------------------------- (7) Sole Dispositive Power: 0* -------------------------------------- (8) Shared Dispositive Power: 1,661,321* -------------------------------------- - -------------------------------------------------------------------------------- (9) Aggregate Amount Beneficially Owned by Each Reporting Person: 1,661,321 - -------------------------------------------------------------------------------- (10) Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See Instructions): [X] - -------------------------------------------------------------------------------- (11) Percent of Class Represented by Amount in Row (9): 9.99% - -------------------------------------------------------------------------------- (12) Type of Reporting Person (See Instructions): IN - -------------------------------------------------------------------------------- * Based upon 16,629,848 shares of the common stock, par value $.01 per share (the "Shares") of Lattice Incorporated, a Delaware corporation (the "Company") as of November 16, 2007, as disclosed in the Company's Quarterly Report on Form 10QSB for the quarterly period ending September 30, 2007. As of December 31, 2007, PSource Structured Debt Limited ("PSource") and Calliope Capital Corporation ("Calliope" and together with PSource, the "Investors") held (i) warrants, as amended, to purchase up to 600,000 Shares at an exercise price of $1.10 per share, subject to certain adjustments (the "First Warrants"), (ii) warrants to purchase 1,458,333 Shares at an exercise price of $0.10 per Share, subject to certain adjustments (the "Second Warrant"), (iii) warrants to purchase 20,000 Shares at an exercise price of $0.52 per Share, subject to certain adjustments (the "Third Warrant"); (iv) warrants to purchase 25,000 Shares, exercisable as follows: 12,500 Shares at an exercise price of $0.99 per Share; 7,500 Shares at an exercise price of $1.07 per Share; and 5,000 Shares at an exercise price of $1.24 per Share, each subject to certain adjustments (the "Fourth Warrant", and together with the First Warrant and the Third Warrant, the "Older Warrants"), and (v) 100,000 Shares. The number of Shares underlying all warrants described herein have been adjusted to take into account a 10:1 split of the Company's Shares that occurred on February 4, 2007. Each of the Older Warrants contains an issuance limitation prohibiting the Investors from converting those securities to the extent that such conversion would result in beneficial ownership by the Investors of more than 4.99% of the Shares then issued and outstanding (the "4.99 Issuance Limitation"). The Second Warrant contains an issuance limitation prohibiting the Investors from converting those securities to the extent that such conversion would result in beneficial ownership by the Investors of more than 9.99% of the Shares then issued and outstanding (the "9.99 Issuance Limitation" and, together with the 4.99 Issuance Limitation, the "Issuance Limitations"). The Issuance Limitations may be waived by Investors upon at least 61 days prior notice to the Company. In addition, with respect to the Second Warrant, the Issuance Limitation shall also automatically become null and void upon notice to the holder of the occurrence and/or continuance of an event of default (as defined in and pursuant to the terms of the applicable instrument). In addition, with respect to the First Warrant and the Third Warrant, the Issuance Limitation shall also automatically become null and void upon the occurrence and/or continuance of an event of default (as defined in and pursuant to the terms of the applicable instrument). Calliope is a wholly owned subsidiary of Laurus Master Fund, Ltd. (the "Fund"). PSource and the Fund are managed by Laurus Capital Management, LLC. Eugene Grin and David Grin, through other entities, are the controlling principals of Laurus Capital Management, LLC and share sole voting and investment power over the securities owned by the Investors reported in this Schedule 13G, as amended. CUSIP No. 518414107 - -------------------------------------------------------------------------------- (1) Names of Reporting Persons. I.R.S. Identification Nos. of Above Persons (entities only): Eugene Grin - -------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- (3) SEC Use Only - -------------------------------------------------------------------------------- (4) Citizenship or Place of Organization: United States - -------------------------------------------------------------------------------- Number of Shares Beneficially Owned by Each Reporting Person With (5) Sole Voting Power: 0* -------------------------------------- (6) Shared Voting Power: 1,661,321* -------------------------------------- (7) Sole Dispositive Power: 0* -------------------------------------- (8) Shared Dispositive Power: 1,661,321* -------------------------------------- - -------------------------------------------------------------------------------- (9) Aggregate Amount Beneficially Owned by Each Reporting Person: 1,661,321 - -------------------------------------------------------------------------------- (10) Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See Instructions): [X] - -------------------------------------------------------------------------------- (11) Percent of Class Represented by Amount in Row (9): 9.99% - -------------------------------------------------------------------------------- (12) Type of Reporting Person (See Instructions): IN - -------------------------------------------------------------------------------- * Based upon 16,629,848 shares of the common stock, par value $.01 per share (the "Shares") of Lattice Incorporated, a Delaware corporation (the "Company") as of November 16, 2007, as disclosed in the Company's Quarterly Report on Form 10QSB for the quarterly period ending September 30, 2007. As of December 31, 2007, PSource Structured Debt Limited ("PSource") and Calliope Capital Corporation ("Calliope" and together with PSource, the "Investors") held (i) warrants, as amended, to purchase up to 600,000 Shares at an exercise price of $1.10 per share, subject to certain adjustments (the "First Warrants"), (ii) warrants to purchase 1,458,333 Shares at an exercise price of $0.10 per Share, subject to certain adjustments (the "Second Warrant"), (iii) warrants to purchase 20,000 Shares at an exercise price of $0.52 per Share, subject to certain adjustments (the "Third Warrant"); (iv) warrants to purchase 25,000 Shares, exercisable as follows: 12,500 Shares at an exercise price of $0.99 per Share; 7,500 Shares at an exercise price of $1.07 per Share; and 5,000 Shares at an exercise price of $1.24 per Share, each subject to certain adjustments (the "Fourth Warrant", and together with the First Warrant and the Third Warrant, the "Older Warrants"), and (v) 100,000 Shares. The number of Shares underlying all warrants described herein have been adjusted to take into account a 10:1 split of the Company's Shares that occurred on February 4, 2007. Each of the Older Warrants contains an issuance limitation prohibiting the Investors from converting those securities to the extent that such conversion would result in beneficial ownership by the Investors of more than 4.99% of the Shares then issued and outstanding (the "4.99 Issuance Limitation"). The Second Warrant contains an issuance limitation prohibiting the Investors from converting those securities to the extent that such conversion would result in beneficial ownership by the Investors of more than 9.99% of the Shares then issued and outstanding (the "9.99 Issuance Limitation" and, together with the 4.99 Issuance Limitation, the "Issuance Limitations"). The Issuance Limitations may be waived by Investors upon at least 61 days prior notice to the Company. In addition, with respect to the Second Warrant, the Issuance Limitation shall also automatically become null and void upon notice to the holder of the occurrence and/or continuance of an event of default (as defined in and pursuant to the terms of the applicable instrument). In addition, with respect to the First Warrant and the Third Warrant, the Issuance Limitation shall also automatically become null and void upon the occurrence and/or continuance of an event of default (as defined in and pursuant to the terms of the applicable instrument). Calliope is a wholly owned subsidiary of Laurus Master Fund, Ltd. (the "Fund"). PSource and the Fund are managed by Laurus Capital Management, LLC. Eugene Grin and David Grin, through other entities, are the controlling principals of Laurus Capital Management, LLC and share sole voting and investment power over the securities owned by the Investors reported in this Schedule 13G, as amended. Item 1(a). Name Of Issuer: LATTICE INCORPORATED Item 1(b). Address of Issuer's Principal Executive Offices: 7150 N. Park Drive Suite 500 Pennsauken, NJ 08109 Item 2(a). Name of Person Filing: Laurus Master Fund, Ltd. This Schedule 13G, as amended, is also filed on behalf of Laurus Capital Management, LLC, a Delaware limited liability company, Calliope Capital Corporation, a Delaware corporation, PSource Structured Debt Limited, a closed ended company incorporated with limited liability in Guernsey, Eugene Grin and David Grin. Calliope is a wholly owned subsidiary of Laurus Master Fund Ltd. Laurus Capital Management, LLC manages Laurus Master Fund, Ltd. and PSource Structured Debt Limited. Eugene Grin and David Grin, through other entities, are the controlling principals of Laurus Capital Management, LLC and share sole voting and investment power over the shares owned by PSource Structured Debt Limited and Calliope Capital Corporation reported in this Schedule 13G, as amended. Information related to each of Laurus Capital Management, LLC, Calliope Capital Corporation, PSource Structured Debt Limited, Eugene Grin and David Grin is set forth on Appendix A hereto. Item 2(b). Address of Principal Business Office or, if None, Residence: c/o Laurus Capital Management, LLC 335 Madison Avenue, 10th Floor New York, NY 10017 Item 2(c). Citizenship: Cayman Islands Item 2(d). Title of Class of Securities: Common Stock Item 2(e). CUSIP No.: 518414107 Item 3. If This Statement Is Filed Pursuant to Sections 240.13d-1(b) or 240.13d-2(b) or (c), check whether the Person Filing is a: Not Applicable. Item 4. Ownership: (a) Amount Beneficially Owned: 1,661,321* (b) Percent of Class: 9.99%* (c) Number of Shares as to which the person has: (i) sole power to vote or to direct the vote 0* (ii) shared power to vote or to direct the vote 1,661,321* (iii) sole power to dispose or to direct the disposition of 0* (iv) shared power to dispose or to direct the disposition of 1,661,321* - ------------------- * Based upon 16,629,848 shares of the common stock, par value $.01 per share (the "Shares") of Lattice Incorporated, a Delaware corporation (the "Company") as of November 16, 2007, as disclosed in the Company's Quarterly Report on Form 10QSB for the quarterly period ending September 30, 2007. As of December 31, 2007, PSource Structured Debt Limited ("PSource") and Calliope Capital Corporation ("Calliope" and together with PSource, the "Investors") held (i) warrants, as amended, to purchase up to 600,000 Shares at an exercise price of $1.10 per share, subject to certain adjustments (the "First Warrants"), (ii) warrants to purchase 1,458,333 Shares at an exercise price of $0.10 per Share, subject to certain adjustments (the "Second Warrant"), (iii) warrants to purchase 20,000 Shares at an exercise price of $0.52 per Share, subject to certain adjustments (the "Third Warrant"); (iv) warrants to purchase 25,000 Shares, exercisable as follows: 12,500 Shares at an exercise price of $0.99 per Share; 7,500 Shares at an exercise price of $1.07 per Share; and 5,000 Shares at an exercise price of $1.24 per Share, each subject to certain adjustments (the "Fourth Warrant", and together with the First Warrant and the Third Warrant, the "Older Warrants"), and (v) 100,000 Shares. The number of Shares underlying all warrants described herein have been adjusted to take into account a 10:1 split of the Company's Shares that occurred on February 4, 2007. Each of the Older Warrants contains an issuance limitation prohibiting the Investors from converting those securities to the extent that such conversion would result in beneficial ownership by the Investors of more than 4.99% of the Shares then issued and outstanding (the "4.99 Issuance Limitation"). The Second Warrant contains an issuance limitation prohibiting the Investors from converting those securities to the extent that such conversion would result in beneficial ownership by the Investors of more than 9.99% of the Shares then issued and outstanding (the "9.99 Issuance Limitation" and, together with the 4.99 Issuance Limitation, the "Issuance Limitations"). The Issuance Limitations may be waived by Investors upon at least 61 days prior notice to the Company. In addition, with respect to the Second Warrant, the Issuance Limitation shall also automatically become null and void upon notice to the holder of the occurrence and/or continuance of an event of default (as defined in and pursuant to the terms of the applicable instrument). In addition, with respect to the First Warrant and the Third Warrant, the Issuance Limitation shall also automatically become null and void upon the occurrence and/or continuance of an event of default (as defined in and pursuant to the terms of the applicable instrument). Calliope is a wholly owned subsidiary of Laurus Master Fund, Ltd. (the "Fund"). PSource and the Fund are managed by Laurus Capital Management, LLC. Eugene Grin and David Grin, through other entities, are the controlling principals of Laurus Capital Management, LLC and share sole voting and investment power over the securities owned by the Investors reported in this Schedule 13G, as amended. Item 5. Ownership of Five Percent or Less of a Class: Not Applicable Item 6. Ownership of More Than Five Percent on Behalf of Another Person: Not Applicable Item 7. Identification and Classification of the Subsidiary Which Acquired the Securities: Not Applicable Item 8. Identification and Classification of Members of the Group: Not Applicable Item 9. Notice of Dissolution of Group: Not Applicable Item 10. Certification By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect. SIGNATURE --------- After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. February 14, 2008 ---------------------------------- Date LAURUS MASTER FUND, LTD. /s/ David Grin ---------------------------------- David Grin Director Attention: Intentional misstatements or omissions of fact constitute Federal criminal violations (See 18 U.S.C. 1001) CUSIP No. 518414107 APPENDIX A A. Name: Laurus Capital Management, LLC, a Delaware limited liability company Business Address: 335 Madison Avenue, 10th Floor New York, New York 10017 Place of Organization: Delaware B. Name: Calliope Capital Corporation, a Delaware corporation Business Address: 335 Madison Avenue, 10th Floor New York, New York 10017 Place of Organization: Delaware C. Name: PSource Structured Debt Limited, a closed-ended company incorporated with limited liability in Guernsey Business Address: 335 Madison Avenue, 10th Floor New York, New York 10017 Place of Organization: Guernsey D. Name: Eugene Grin Business Address: 335 Madison Avenue, 10th Floor New York, New York 10017 Principal Director of Laurus Master Fund, Ltd. Occupation: Principal of Laurus Capital Management, LLC Citizenship: United States E. Name: David Grin Business Address: 335 Madison Avenue, 10th Floor New York, New York 10017 Principal Director of Laurus Master Fund, Ltd. Occupation: Principal of Laurus Capital Management, LLC Citizenship: Israel CUSIP No. 518414107 Each of Laurus Capital Management, LLC, Calliope Capital Corporation, PSource Structured Debt Limited, David Grin and Eugene Grin hereby agrees, by their execution below, that the Schedule 13G, as amended, to which this Appendix A is attached is filed on behalf of each of them, respectively. Calliope Capital Corporation PSource Structured Debt Limited Laurus Capital Management, LLC By: Laurus Capital Management, LLC Individually and as investment manager /s/ David Grin - ------------------------------- David Grin Principal February 14, 2008 /s/ David Grin - ---------------------------------------- David Grin, on his individual behalf February 14, 2008 /s/ Eugene Grin - ----------------------------------------- Eugene Grin, on his individual behalf February 14, 2008 -----END PRIVACY-ENHANCED MESSAGE-----