UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2009
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Transition Period from                         to
	COMMISSION FILE NUMBER: 0-49737

UNI-PIXEL, INC.

(Exact Name of Registrant as Specified in Its Charter)

DELAWARE	75-2926437
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

8708 Technology Forest Place, Suite 100
The Woodlands, Texas 77381

(Address of Principal Executive Offices)

(281) 825-4500

(Issuer’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   x Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes o   No o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes o   No x

As of May 1, 2009, the issuer had 22,897,418 shares of issued and outstanding common stock, par value $0.001 per share.

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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer o
Non-accelerated filer o	(Do not check if a smaller reporting company)	Smaller reporting company x

TABLE OF CONTENTS

Part I.	Financial Information
Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheets
	March 31, 2009 (unaudited) and December 31, 2008
	Consolidated Statements of Operations
	Three months ended March 31, 2009 (unaudited) and March 31, 2008 (unaudited) and cumulative period from inception (February 17, 1998) to March 31, 2009 (unaudited)
	Consolidated Statements of Shareholders’ Equity (Deficit)
	From inception (February 17, 1998) to March 31, 2009 (unaudited)
	Consolidated Statements of Cash Flows
	Three months ended March 31, 2009 (unaudited) and March 31, 2008 (unaudited) and cumulative period from inception (February 17, 1998) to March 31, 2009 (unaudited)
	Notes to Unaudited Consolidated Financial Statements
Item 2.	Management’s Discussion and Analysis or Plan of Operation
Item 3.	Quantitative and Qualitative Disclosures About Market Risk
Item 4.	Controls and Procedures
Part II.	Other Information
Item 6.	Exhibits

2

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

Uni-Pixel, Inc.

(A Development Stage Company)

Consolidated Balance Sheets

	March 31, 2009			December 31, 2008
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	1,138,677		$	2,035,547
Prepaid expenses	3,400			3,400
Total current assets	1,142,077			2,038,947
Property and equipment, net of accumulated depreciation of $1,092,983 and $1,013,967, at March 31, 2009 and December 31, 2008, respectively	513,040			592,056
Restricted cash, less current portion	34,877			34,877
Intangible assets, net of accumulated amortization of $48,887 and $44,637, at March 31, 2009 and December 31, 2008, respectively	181,002			185,252
Total assets	$	1,870,996		$	2,851,132
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities
Accounts payable	$	834,639		$	731,022
Accrued expenses	483,076			383,039
Deferred revenue	33,333			33,333
Total current liabilities	1,351,048			1,147,394
Total liabilities	1,351,048			1,147,394
Commitments and contingencies (Note 4)	—			—
Redeemable convertible Series B Preferred stock, $0.001 par value; $3.75 per share liquidation preference; 3,200,000 shares authorized, issued and outstanding at March 31, 2009 and December 31, 2008, less unamortized discount of $4,272,942 and $4,644,502 at March 31, 2009 and December 31, 2008, respectively	9,765,414			9,159,771
Redeemable convertible Series C Preferred stock, $0.001 par value; $11.20 per share liquidation preference; 892,858 shares authorized, issued and outstanding at March 31, 2009 and December 31, 2008, less unamortized discount of $5,333,502 and $5,714,466 at March 31, 2009 and December 31, 2008, respectively	5,786,934			5,210,901
Shareholders’ deficit
Common stock, $0.001 par value; 100,000,000 shares authorized at March 31, 2009 and December 31, 2008, 22,897,418 shares issued and outstanding at March 31, 2009 and December 31, 2008	22,897			22,897
Additional paid-in capital	30,239,680			30,785,560
Accumulated deficit during development stage	(45,294,977		)	(43,475,391		)
Total shareholders’ deficit	(15,032,400		)	(12,666,934		)
Total liabilities and shareholders’ deficit	$	1,870,996		$	2,851,132

See accompanying notes to these consolidated financial statements.

3

Uni-Pixel, Inc.

(A Development Stage Company)

Consolidated Statements of Operations

(unaudited)

	Three Months Ended March 31,						Cumulative Period from February 17, 1998 (date of inception) to March 31,
	2009			2008			2009
Revenues
Development contract revenue	$	—		$	—		$	1,158,201
Total revenues	—			—			1,158,201
Cost of revenues	—			—			456,648
Gross margin	—			—			701,553
Selling, general and administrative expenses	812,770			836,844			20,454,739
Research and development	1,010,346			2,268,137			22,778,224
Operating loss	(1,823,116		)	(3,104,981		)	(42,531,410		)
Other income (expense)
Net decrease in fair value of derivative liability	—			—			845,079
Other income	—			—			886,886
Debt issuance expense	—			—			(644,346		)
Interest income (expense), net	3,530			96,720			(2,084,460		)
Net loss	$	(1,819,586	)	$	(3,008,261	)	$	(43,528,251	)
Preferred stock dividends and amortization of discount	(1,181,676		)	(1,186,497		)	(10,451,356		)
Net loss attributable to common shareholders	$	(3,001,262	)	$	(4,194,758	)	$	(53,979,607	)
Per share information
Net loss – basic and diluted	$	(0.08	)	$	(0.13	)	$	(4.43	)
Preferred stock dividends	(0.05		)	(0.05		)	(1.06		)
Net loss attributable to common shareholders — basic and diluted	$	(0.13	)	$	(0.18	)	$	(5.49	)
Weighted average number of basic and diluted common shares outstanding	22,897,418			22,897,418			9,835,495

See accompanying notes to these consolidated financial statements.

4

Uni-Pixel, Inc.

(A Development Stage Company)

Consolidated Statements of Shareholders’ Equity (Deficit)

	Series A Preferred Stock														Accumulated Deficit			Total
	Number					Common Stock			Additional			Deferred			During			Shareholders’
	of Shares		Amount			Number of Shares	Amount		Paid-In Capital			Stock-Based Compensation			Development Stage			Equity (Deficit)
Founder shares issued at inception at February 17, 1998	—		$	—		4,500,000	$	4,500	$	(500	)	$	—		$	—		$	4,000
Stock issued during 1999 (prices ranging from $0.50 - $0.62 per share)	—		—			180,000	180		183,820			—			—			184,000
Stock issued during 2000 (prices ranging from $11.34 - $17.00 per share)	—		—			63,750	64		956,186			—			—			956,250
Stock issued during 2001 (prices ranging from $10.00 - $17.00 per share)	—		—			28,176	28		404,227			—			—			404,255
Stock issued during 2002 (prices ranging from $2.00 - $10.00 per share)	—		—			157,327	157		353,783			—			—			353,940
Deferral of stock-based compensation	—		—			—	—		1,100,000			(1,100,000		)	—			—
Amortization of stock-based compensation	—		—			—	—		—			206,250			—			206,250
Net loss	—		—			—	—		—			—			(3,968,540		)	(3,968,540		)
Balance, December 31, 2002	—		$	—		4,929,253	$	4,929	$	2,997,516		$	(893,750	)	$	(3,968,540	)	$	(1,859,845	)
Stock issued during 2003 (prices ranging from $1.00 - $2.00 per share)	—		—			210,827	211		263,943			—			—			264,154
Amortization of stock-based compensation	—		—			—	—		—			275,000			—			275,000
Warrants issued	—		—			—	—		500,000			—			—			500,000
Net loss	—		—			—	—		—			—			(2,492,123		)	(2,492,123		)
Balance, December 31, 2003	—		$	—		5,140,080	$	5,140	$	3,761,459		$	(618,750	)	$	(6,460,663	)	$	(3,312,814	)
Issuance of common stock for services	—		—			738,309	738		316,975			—			—			317,713
Conversion of note payable for common stock	—		—			51,008	51		95,052			—			—			95,103
Exercise of stock options	—		—			1,490,000	1,490		28,310			—			—			29,800
Exercise of warrants	—		—			512,500	513		34,487			—			—			35,000
Amortization of stock-based compensation	—		—			—	—		—			618,750			—			618,750
Conversion of bridge loans	256,643		257			850,625	851		1,834,242			—			—			1,835,350
Issuance of preferred stock	2,565,000		2,565			—	—		7,646,765			—			—			7,649,330
Issuance of common stock for net assets of REFL	—		—			1,100,808	1,101		(1,101		)	—			—			—
Issuance of common stock for net assets of Gemini	—		—			2,917,250	2,917		26,255			—			—			29,172
Net loss	—		—			—	—		—			—			(2,315,332		)	(2,315,332		)
Balance, December 31, 2004	2,821,643		$	2,822		12,800,580	$	12,801	$	13,742,444		$	—		$	(8,775,995	)	$	4,982,072
Issuance of preferred stock	930,000		930			—	—		2,798,370			—			—			2,799,300
Conversion of preferred stock into common stock and payment of preferred stock dividend	(1,222,499	)	(1,223		)	2,594,477	2,594		260,296			—			(261,667		)	—
Issuance of preferred stock for dividends	156,507		157			—	—		547,618			—			(547,775		)	—
Net loss	—		—			—	—		—			—			(4,966,790		)	(4,966,790		)
Balance, December 31, 2005	2,685,651		$	2,686		15,395,057	$	15,395	$	17,348,728		$	—		$	(14,552,227	)	$	2,814,582
Conversion of preferred stock into common stock and payment of preferred stock dividend	(450,317	)	(451		)	916,916	917		28,039			—			(28,505		)	—
Stock compensation expense	—		—			—	—		914,755			—			—			914,755
Issuance of warrants to placement agent	—		—			—	—		37,596			—			—			37,596
Issuance of preferred stock for dividends	134,117		134			—	—		469,289			—			(469,423		)	—
Net loss	—		—			—	—		—			—			(6,485,618		)	(6,485,618		)
Balance, December 31, 2006	2,369,451		$	2,369		16,311,973	$	16,312	$	18,798,407		$	—		$	(21,535,773	)	$	(2,718,685	)
Conversion of preferred stock into common stock and payment of preferred stock dividend	(2,369,451	)	(2,369		)	6,545,445	6,545		455,180			—			(459,356		)	—
Stock compensation expense	—		—			—	—		2,029,326			—			—			2,029,326
Issuance of warrants to consultants	—		—			—	—		297,891			—			—			297,891
Issuance of warrants to Series B Preferred Stock Investors	—		—			—	—		3,715,602			—			—			3,715,602
Intrinsic value of beneficial conversion option on Series B Preferred Stock	—		—			—	—		3,715,602			—			—			3,715,602
Issuance of common stock for services	—		—			40,000	40		52,360			—			—			52,400
Issuance of warrants to Series C Preferred Stock Investors	—		—			—	—		3,809,644			—			—			3,809,644
Intrinsic value of beneficial conversion option on Series C Preferred Stock	—		—			—	—		3,809,644			—			—			3,809,644
Amortization of discount of Series B Preferred Stock	—		—			—	—		(1,300,460		)	—			—			(1,300,460		)
Amortization of discount of Series C Preferred Stock	—		—			—	—		(380,964		)	—			—			(380,964		)
Series B Preferred Stock dividends	—		—			—	—		(844,274		)	—			—			(844,274		)
Series C Preferred Stock dividends	—		—			—	—		(206,028		)	—			—			(206,028		)
Reclassification of derivative liabilities to equity	—		—			—	—		560,368			—			—			560,368
Net loss	—		—			—	—		—			—			(10,895,846		)	(10,895,846		)
Balance, December 31, 2007	—		$	—		22,897,418	$	22,897	$	34,512,298		$	—		$	(32,890,975	)	$	1,644,220
Stock compensation expense	—		—			—	—		1,037,441			—			—			1,037,441
Issuance of warrants to consultants	—		—			—	—		5,919			—			—			5,919
Amortization of discount of Series B Preferred Stock	—		—			—	—		(1,486,240		)	—			—			(1,486,240		)
Amortization of discount of Series C Preferred Stock	—		—			—	—		(1,523,858		)	—			—			(1,523,858		)
Series B Preferred Stock dividends	—		—			—	—		(960,000		)	—			—			(960,000		)
Series C Preferred Stock dividends	—		—			—	—		(800,000		)	—			—			(800,000		)
Net loss	—		—			—	—		—			—			(10,584,416		)	(10,584,416		)
Balance, December 31, 2008	—		$	—		22,897,418	$	22,897	$	30,785,560		$	—		$	(43,475,391	)	$	(12,666,934	)
Stock compensation expense	—		—			—	—		635,796			—			—			635,796
Amortization of discount of Series B Preferred Stock	—		—			—	—		(371,561		)	—			—			(371,561		)
Amortization of discount of Series C Preferred Stock	—		—			—	—		(380,964		)	—			—			(380,964		)
Series B Preferred Stock dividends	—		—			—	—		(234,082		)	—			—			(234,082		)
Series C Preferred Stock dividends	—		—			—	—		(195,069		)	—			—			(195,069		)
Net loss	—		—			—	—		—			—			(1,819,586		)	(1,819,586		)
Balance, March 31, 2009	—		$	—		22,897,418	$	22,897	$	30,239,680		$	—		$	(45,294,977	)	$	(15,032,400	)

See accompanying notes to these consolidated financial statements.

5

Uni-Pixel, Inc.

(A Development Stage Company)

Consolidated Statements of Cash Flows

(unaudited)

	Three Months Ended March 31,						Cumulative Period from February 18, 1998 (date of inception) to March 31,
	2009			2008			2009
Cash flows from operating activities
Net loss	$	(1,819,586	)	$	(3,008,261	)	$	(43,528,251	)
Adjustments to reconcile net loss to net cash used in operating activities:
Interest forgiven	—			—			(91,421		)
Employee compensation notes payable forgiven	—			—			(795,465		)
Depreciation and amortization	83,266			69,758			1,184,689
Stock issued for services	—			—			512,462
Stock compensation expense	635,796			336,018			4,617,318
Non-cash compensation expense	—			—			1,100,000
Amortization of debt issuance costs	—			—			644,346
Amortization of discounts on notes payable	—			—			1,480,448
Net decrease in fair value of derivatives	—			—			(845,077		)
Issuance of warrants to consultants	—			5,919			303,810
Change in operating assets and liabilities:
Increase in cash restricted for note payable and lease obligations	—			—			(34,877		)
Decrease (increase) in prepaid expenses and other current assets	—			1,900			(147,745		)
Increase in accounts payable	103,617			296,639			834,634
Increase in accrued interest payable	—			—			180,943
Increase (decrease) in accrued expenses and other liabilities	100,037			(148,185		)	1,278,541
Increase in deferred revenue	—			—			33,333
Net cash used in operating activities	(896,870		)	(2,446,212		)	(33,272,312		)
Cash flows from investing activities
Purchase of property and equipment	—			(161,493		)	(1,654,352		)
Proceeds from the sale of property and equipment	—			—			27,792
Purchases of patents, trademarks and organization costs	—			—			(264,336		)
Net cash used in investing activities	—			(161,493		)	(1,890,896		)
Cash flows from financing activities
Proceeds from notes payable to related party	—			—			115,103
Payments on notes payable to related party	—			—			(164,328		)
Proceeds from convertible notes payable	—			—			3,390,000
Payments on convertible notes payable	—			—			(1,470,672		)
Net repayments from notes payable	—			—			(62,833		)
Issuance of warrants to placement agent	—			—			37,596
Proceeds from the issuance of preferred stock, net	—			—			32,367,969
Proceeds from the issuance of common stock, net	—			—			2,089,050
Net cash provided by financing activities	—			—			36,301,885
Net increase (decrease) in cash and cash equivalents	(896,870		)	(2,607,705		)	1,138,677
Cash and cash equivalents, beginning of period	2,035,547			11,697,425			—
Cash and cash equivalents, end of period	$	1,138,677		$	9,089,720		$	1,138,677
Supplemental disclosures of cash flow information:
Cash paid for interest	$	—		$	—		$	960,727
Cash paid for income taxes	$	—		$	—		$	—
Interest capitalized into notes payable	$	—		$	—		$	8,250
Debt issuance cost for warrant issued	$	—		$	—		$	500,000
Preferred stock dividend and amortization of discount	$	1,181,676		$	1,186,497		$	10,451,356
Conversion of notes payable for preferred stock	$	—		$	—		$	898,250
Conversion of notes payable for common stock	$	—		$	—		$	980,103
Stock issued for services	$	—		$	—		$	1,612,462
Stock issued for interest	$	—		$	—		$	81,272
Reclassification of derivatives to equity	$	—		$	—		$	560,368
Intrinsic value of beneficial conversion options on Preferred Stock	$	—		$	—		$	7,525,246
Issuance of warrants to Preferred Stock investors	$	—		$	—		$	7,525,246

See accompanying notes to these consolidated financial statements.

6

Uni-Pixel, Inc.

(A Development Stage Company)

Notes to Unaudited Consolidated Financial Statements

Note 1 — Basis of Presentation, Business and Organization

Uni-Pixel, Inc., a Delaware corporation, is the parent company of Uni-Pixel Displays, Inc., its wholly-owned operating subsidiary.  As used herein, “Uni-Pixel,” “we,” “us,” and “our” refer to Uni-Pixel, Inc. and Uni-Pixel Displays, Inc.  Our common stock, par value $0.001 per share, is quoted on the NASDAQ Over the Counter — Bulletin Board (“OTCBB”) under the ticker symbol “UNXL.”

Uni-Pixel is a development stage company that has developed, patented and demonstrated a new color display technology in the form of proof of concept prototypes which we call Time Multiplexed Optical Shutter (“TMOS”).  We intend to be a leader in the research, development and commercialization of new flat panel displays using TMOS in a variety of applications, such as mobile phones, digital cameras, notebook computers, televisions and other consumer electronic devices. Our work developing TMOS has led to advances in the thin film arena that have other marketable applications.  We intend to explore the business potential within these applications and pursue those thin film markets that offer profitable opportunities either through licensing or direct production and sales.  As of March 31, 2009, we had accumulated a total deficit of $45.3 million from operations in pursuit of these objectives.

We anticipate that our TMOS displays will be thin, lightweight, and power-efficient devices, which are highly suitable for use in full-color display applications.  We believe TMOS displays will be able to capture a share of the growing $90+ billion flat panel display market due to the significant advantages it should provide over competing displays with respect to manufacturing and materials cost, brightness, power efficiency, viewing angle, and video response time and image quality.  We believe that our technology leadership and intellectual property position will enable us to generate revenues initially from TMOS displays for existing vertical market segments such as the military, avionics, and automotive segments, and then subsequently from consumer electronics markets (i.e., TVs, monitors, personal computers, cameras, games, etc.).

Our strategy is to further develop our proprietary TMOS technology to the point of being able to transition the technology to manufacturing partners.  We have and will continue to utilize contract manufacturing for prototype fabrication to augment our internal capabilities in the short term.  We also plan to be a supplier of our key thin film component and to enter into joint ventures in certain vertical market segments to exploit the existing manufacturing and distribution channels of our targeted partners.  We plan to license our technology to display manufacturers and supporting partner companies for use in applications such as mobile phones, digital cameras, laptop computers, and other consumer electronic devices. Through our internal research and development efforts we have established a portfolio of TMOS-related patents and patent applications and other intellectual property rights that support these joint venture and licensing strategies.  We currently have 32 issued patents, 4 allowed patents, and 81 pending patent applications filed in key venues worldwide including regionally in Europe, Asia Pacific, South America and North America. We also contemplate obtaining exclusive field-of-use licenses (which would include the right to sublicense) to complementary technologies from targeted strategic partners and U.S. national laboratories.

During the course of 2008 we developed our first independent thin film product opportunity.  This unique variation of the thin film developed for TMOS can be applied to a variety of touch screen product devices as a protective cover.  We intend to market this thin film product under our brand, Opcuity™, to various potential distribution and channel partners.

Since our inception, we have been primarily engaged in developing our initial product technologies, recruiting personnel, commencing our U.S. operations and obtaining sufficient capital to meet our working capital needs. In the course of our development activities, we have sustained losses and expect such losses to continue through at least May 2009. We will finance our operations primarily through our existing cash and possible future financing transactions.

Our ability to operate profitably under our current business plan is largely contingent upon our success in developing our products beyond proof of concept to final prototypes, supporting transferable manufacturing processes to partners to produce our products and successfully developing markets and manufacturing relationships for our products.  We may be required to obtain additional capital in the future to expand our operations. No assurance can be given that we will be able to develop our products, successfully develop the markets or profitable manufacturing methods for our products, or raise any such additional capital as we might need, either through equity or debt financing, on satisfactory terms or at all. Additionally, no assurance can be given that any such financing, if obtained, will be adequate to meet our ultimate capital needs or to support our growth. If adequate capital cannot be obtained on satisfactory terms, our operations could be negatively impacted.

If we achieve growth in our operations in the next few years, such growth could place a strain on our management, administrative, operational and financial infrastructure. Our ability to manage our current operations and future growth requires the

7

continued improvement of operational, financial and management controls, reporting systems and procedures. In addition, we may find it necessary to hire additional management, financial and sales and marketing personnel to manage our expanding operations. If we are unable to manage this growth effectively, our business, operating results and financial condition may be materially adversely affected.

As of March 31, 2009, we had cash and cash equivalents of $1.1 million.  We believe that our existing capital resources are adequate to finance our operations until May 2009.  However, our long-term viability is dependent upon our ability to successfully operate our business, develop our manufacturing process, sign partnership agreements, develop our products and raise additional debt and equity to meet our business objectives.

Acquisition and merger and basis of presentation

Uni-Pixel, Inc. was originally incorporated in the State of Nevada as Super Shops, Inc. On November 15, 1999, Super Shops and its sister companies filed an amended petition under Chapter 11 of the United States Bankruptcy Code. On July 31, 2000, the court approved Super Shops’ Amended Joint Plan of Reorganization. On October 13, 2000, and in accordance with the Plan of Reorganization, the management of Super Shops changed its state of incorporation from Nevada to Delaware by merging with and into NEV Acquisition Corp., a Delaware corporation formed solely for the purpose of effecting the reincorporation. On June 13, 2001, NEV Acquisition Corp. changed its corporate name to Real-Estateforlease.com, Inc., as a result of the merger transaction discussed in the following paragraph.

Real-Estateforlease.com, Inc. was incorporated on May 24, 2001, in the State of Delaware to serve as a business-to-business internet information intermediary providing turnkey marketing services to facilitate the leasing of commercial real estate properties. On June 13, 2001, the management of NEV Acquisition Corp. entered into an Agreement and Plan of Merger with Real-Estateforlease.com, Inc. pursuant to which the sole stockholder and founder of Real-Estateforlease.com, Inc. exchanged his equity ownership interest in Real-Estateforlease.com, Inc. for 9,500,000 shares (or approximately 96%) of NEV Acquisition Corp.’s common stock. At the time of the merger between Real-Estateforlease.com, Inc. and NEV Acquisition Corp., Real-Estateforlease.com, Inc. had no operations and essentially no assets. Efforts by Real-Estateforlease.com, Inc. to implement its business plan ceased in June 2002. Prior to Real-Estateforlease.com, Inc.’s merger with Uni-Pixel Displays, Inc., as described in the next paragraph, Real-Estateforlease.com, Inc. had no operations and no material assets or liabilities.

Our wholly-owned subsidiary, Uni-Pixel Displays, Inc., was originally incorporated as Tralas Technologies, Inc., a Texas corporation, on February 17, 1998. Tralas Technologies, Inc. changed its name to Uni-Pixel Displays, Inc. during 2001. On December 7, 2004, Real-Estateforlease.com, Inc. entered into a merger agreement with Uni-Pixel Displays, Inc. and certain other parties pursuant to which Uni-Pixel Displays, Inc. became a wholly-owned subsidiary of Real-Estateforlease.com, Inc. Pursuant to the merger, we changed our name to “Uni-Pixel, Inc.” at the annual meeting of our stockholders held in January 2005.

The consolidated financial statements presented in this quarterly report include Uni-Pixel, Inc. and our wholly-owned subsidiary, Uni-Pixel Displays, Inc. All significant intercompany transactions and balances have been eliminated. Uni-Pixel Displays, Inc. was, for accounting purposes, the surviving entity of the merger, and accordingly for the periods prior to the merger, the financial statements reflect the financial position, results of operations and cash flows of Uni-Pixel Displays, Inc.  The assets, liabilities, operations and cash flows of Real-Estateforlease.com, Inc. are included in the consolidated financial statements from December 10, 2004 onward.

Note 2 -Going Concern

Our accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business.  However, Uni-Pixel has sustained losses and negative cash flows from operations since its inception. As shown in the accompanying consolidated financial statements, Uni-Pixel incurred recurring net losses of $1.8 million and $3.0 million for the three months ended March 31, 2009 and 2008, respectively, has negative working capital of $0.2 million and has an accumulated deficit of $45.3 million as of March 31, 2009.  The Company’s ability to meet its obligations in the ordinary course of business is dependent upon its ability to establish profitable operations, raise additional financing through public or private equity financings, enter into collaborative or other arrangements with corporate sources, or secure other sources of financing to fund operations.  In the 4th quarter of 2008, the Company’s management began to reduce operating expenses and delay planned expenditures to preserve the Company’s working capital.

On February 13, 2007, the Company raised $12 million in a private placement of its Series B Convertible Preferred Stock (see Note 5) and on September 28, 2007, the Company raised an additional $10 million in a private placement of its Series C Convertible Preferred Stock (see Note 5), which management believes will enable the Company to continue operations until May 2009.

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Our growth and continued operations could be impaired by limitations on our access to the capital markets.  In the event that we do not raise additional funding, we may be forced to further scale back our operations which would have a material adverse impact upon our ability to pursue our business plan.  We have no commitments from officers, directors or affiliates to provide funding.  There can be no assurance that capital from outside sources will be available, or if such financing is available, it may involve issuing securities senior to our common stock or equity financings which are dilutive to holders of our common stock.  In addition, in the event we do not raise additional capital from conventional sources, it is likely that our growth will be restricted and we may need to scale back or curtail implementing our business plan.

Our ability to reach profitably under our current business plan is largely contingent upon our success in developing beyond proof of concept to final prototypes and supporting transferable manufacturing processes to partners to produce for sale our products and upon our successful development of markets for our products and successful manufacturing relationships.  We will need to obtain additional capital in the future to expand our operations. No assurance can be given that we will be able to develop our products, successfully develop the markets for our products or profitable manufacturing methods, or raise any such additional capital as we might need, either through equity or debt financing, on satisfactory terms or at all. Additionally, no assurance can be given that any such financing, if obtained, will be adequate to meet our ultimate capital needs or to support our growth. If adequate capital cannot be obtained on satisfactory terms, our operations could be negatively impacted.

The conditions described above create substantial doubt as to Uni-Pixel’s ability to continue as a going concern.  The March 31, 2009 consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of this uncertainty.

Note 3 - Summary of Significant Accounting Policies

Interim financial information

The consolidated financial statements included herein, which have not been audited pursuant to the rules and regulations of the Securities and Exchange Commission, reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods on a basis consistent with the annual audited statements. All such adjustments are of a normal recurring nature. The results of operations for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for a full year. Certain information, accounting policies and footnote disclosures normally included in consolidated financial statements prepared in conformity with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations, although we believe that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with our audited consolidated financial statements included in our Form 10-K, for the year ended December 31, 2008, filed with the Securities and Exchange Commission on March 6, 2009.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Examples include provisions for bad debts, useful lives of property and equipment and intangible assets, impairment of property and equipment and intangible assets, deferred taxes, and the provision for and disclosure of litigation and loss contingencies. Actual results may differ materially from those estimates.

Statement of cash flows

For purposes of the statements of cash flows, we consider all highly liquid investments (i.e., investments which, when purchased, have original maturities of three months or less) to be cash equivalents.

Concentration of credit risk

We maintain our cash primarily with major U.S. domestic banks.   The amounts held in interest bearing accounts periodically exceed the insured limit of $250,000 at March 31, 2009 and December 31, 2008.  The amounts held in these banks did not exceed the insured limit of $250,000 as of March 31, 2009 and December 31, 2008, respectively.  The terms of other deposits are on demand and are subject to guarantees in full by FDIC under the Transaction Account Guarantee Program.   We have not incurred losses related to these deposits.  In addition, on March 31, 2009 and December 31, 2008, we held an investment account

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of $666,477 and $1,662,973, respectively, with a financial institution other than a bank.  These funds are invested in money market funds.  We have not incurred losses related to these deposits.

Restricted cash

As of March 31, 2009 and December 31, 2008, we had restricted cash of $34,877.  This amount secured certain obligations under our lease agreement for our principal facility located in The Woodlands, Texas as of both March 31, 2009 and December 31, 2008.  The restricted cash has been segregated into current and long-term classifications based on its anticipated liquidation.

Property and equipment

Property and equipment, consisting primarily of lab equipment, computer equipment, software, leasehold improvements, and office furniture and fixtures is carried at cost less accumulated depreciation and amortization. Depreciation and amortization for financial reporting purposes is provided by the straight-line method over the estimated useful lives of three to five years. Leasehold improvements are amortized using the straight-line method over the remaining lease term or the life of the asset, whichever is shorter. The cost of repairs and maintenance is charged as an expense as incurred.  Gains or losses related to retirements or dispositions of fixed assets are recognized in the period incurred.

Intangible assets

Our intangible assets represent patents and patent applications, acquired from third parties, which are recorded at cost and amortized over the life of the patent.  We review the value recorded for intangible assets to assess recoverability from future operations using undiscounted cash flows. Impairments are recognized in operating results to the extent the carrying value exceeds fair value determined based on the net present value of estimated future cash flows.  Impairment would then be measured as the difference between the fair value of the fixed or amortizing intangible asset and the carrying value to determine the amount of the impairment.

Derivative instruments

We account for all derivative financial instruments in accordance with SFAS No.  133, “Accounting for Derivative Instruments and Hedging Activities” and related Emerging Issues Task Force (“EITF”) interpretations and Securities and Exchange Commission (“SEC”) rules, which require that certain embedded and freestanding derivative instruments be classified as a liability and measured at fair value with changes in fair value recognized currently in earnings.  The Company has recorded changes in fair value as an other expense in the consolidated statements of operations.

Revenue recognition

We recognize revenue over the period the service is performed in accordance with SEC Staff Accounting Bulletin No. 104, “Revenue Recognition in Financial Statements” (“SAB 104”). In general, SAB 104 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence that an arrangement exists, (2) delivery has occurred or services rendered, (3) the fee is fixed and determinable, and (4) collectibility is reasonably assured.

Revenue from licenses and other up front fees are recognized on a ratable basis over the term of the respective agreement.

Revenue from development contracts are recognized when the contract is completed and collectibility is reasonably assured.  Deferred revenue on these contracts of $33,333 as of March 31, 2009 and December 31, 2008 consists of a development contract to produce and deliver a prototype device.

Research and development expenses

Research and development costs are expensed as incurred and include salaries and benefits, costs paid to third-party contractors for research, development and manufacturing of materials and devices, and a portion of facilities cost. Prototype development costs are a significant component of research and development expenses and include costs associated with third-party contractors. Invoicing from third-party contractors for services performed can lag several months.  We accrue the costs of services rendered in connection with third-party contractor activities based on our estimate of management fees, site management and monitoring costs and data management costs. Actual costs may differ from estimated costs in some cases and are adjusted for in the period in which they become known.

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Stock-based compensation

We recognize the cost of stock options and restricted stock in accordance with SFAS No. 123 (Revised 2004) (“SFAS No. 123(R)”), “Share Based Payment.”  SFAS No. 123(R) requires us to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award.  That cost will be recognized over the period during which an employee is required to provide service in exchange for the reward — known as the requisite service period. No compensation cost is recognized for equity instruments for which employees do not render the requisite service. The grant-date fair value of employee share options and similar instruments will be estimated using option-pricing models adjusted for the unique characteristics of those instruments.  SFAS No. 123 must be applied to all options granted or modified after its effective date and also to recognize the cost associated with the portion of any option award made before its effective date for which the associated service has not been rendered as of its effective date.

We may, from time to time, issue common stock, stock options or common stock warrants to acquire services or goods from non-employees. Common stock, stock options and common stock warrants issued to persons other than employees or directors are recorded on the basis of their fair value, as required by SFAS No. 123(R),  which is measured as of the date required by EITF Issue 96-18 (“EITF 96-18”), “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services.”  In accordance with EITF 96-18, the stock options or common stock warrants are valued using the Black-Scholes model on the basis of the market price of the underlying common stock on the “valuation date,” which for options and warrants related to contracts that have substantial disincentives to non-performance, is the date of the contract, and for all other contracts is the vesting date. Expense related to the options and warrants is recognized on a straight-line basis over the shorter of the period over which services are to be received or the vesting period. Where expense must be recognized prior to a valuation date, the expense is computed under the Black-Scholes model on the basis of the market price of the underlying common stock at the end of the period, and any subsequent changes in the market price of the underlying common stock through the valuation date is reflected in the expense recorded in the subsequent period in which that change occurs.

Income taxes

An asset and liability approach is used for financial accounting and reporting for income taxes. Deferred income taxes arise from temporary differences between income tax and financial reporting and principally relate to recognition of revenue and expenses in different periods for financial and tax accounting purposes and are measured using currently enacted tax rates and laws. In addition, a deferred tax asset can be generated by net operating loss carryforwards.   If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.

The Company has losses carried forward for income tax purposes to March 31, 2009. There are no current or deferred tax expenses for the three month periods ended March 31, 2009 and 2008 due to the Company’s loss position. The Company has fully reserved for any benefits of these losses. The deferred tax consequences of temporary differences in reporting items for financial statement and income tax purposes are recognized, as appropriate. Realization of the future tax benefits related to the deferred tax assets is dependent on many factors, including the Company’s ability to generate taxable income within the net operating loss carryforward period. Management has considered these factors in reaching its conclusion as to the valuation allowance for financial reporting purposes. Accordingly, no benefit has been recognized on the net loss as the realization of the net operating loss carryforward cannot be assured.

Loss per share data

Basic loss per share is calculated based on the weighted average common shares outstanding during the period, after giving effect to the manner in which the merger was accounted for as described in Note 1. Diluted earnings per share also gives effect to the dilutive effect of stock options, warrants (calculated based on the treasury stock method) and convertible notes and convertible preferred stock. The Company does not present diluted earnings per share for years in which it incurred net losses as the effect is antidilutive.

At March 31, 2009, options and warrants to purchase 19,940,843 shares of common stock at exercise prices ranging from $1.10 to $2.00 per share were outstanding, but were not included in the computation of diluted earnings per share as their effect would be antidilutive.  Further, at March 31, 2009, 18,717,808 shares of common stock, convertible from Series B Convertible Preferred Stock and associated dividends, were not included in the computation of diluted earnings per share as there effect would be antidilutive.  Further, at March 31, 2009, 8,000,790 shares of common stock, convertible from Series C Convertible Preferred Stock and associated dividends, were not included in the computation of diluted earnings per share as their effect would be antidilutive.

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Fair value of financial instruments

Our financial instruments consist of accounts receivable, accounts payable, notes payable and derivative liabilities. We believe the fair values of our accounts receivable, accounts payable, notes payable and derivative liabilities reflect their respective carrying amounts.

Recently adopted accounting pronouncements

Effective January 1, 2008, the Company partially adopted SFAS 157, which provides a framework for measuring fair value. Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The partial adoption of this standard only resulted in additional disclosure requirements and had no financial statement impact. Delayed application of this statement is permitted for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually), until fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. As of January 1, 2009, the Company has applied the provisions of SFAS 157 for intangible assets and long-lived assets measured for fair value for impairment assessment under Statement 144, Accounting for the Impairment or Disposal of Long-Lived Assets. The adoption of SFAS 157 did not impact the Company’s consolidated financial statements.

Effective January 1, 2008, the Company adopted SFAS No. 159, The Fair Value Option for Financial Assets and Liabilities — Including an Amendment of SFAS No. 115 (SFAS 159). This standard permits an entity to choose to measure many financial instruments and certain other items at fair value. Most of the provisions in SFAS No. 159 are elective; however, the amendment to SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, applies to all entities with available-for-sale and trading securities. The fair value option established by SFAS 159 permits the Company to choose to measure eligible items at fair value at specified election dates. The Company will report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. The fair value option: (a) may be applied instrument by instrument, with a few exceptions, such as investments  otherwise accounted for by the equity method; (b) is irrevocable (unless a new election date occurs); and (c) is applied only to entire instruments and not to portions of instruments. In connection with the adoption of this standard, the Company did not elect any additional financial instruments to be recorded at fair value.

Effective December 31, 2008, the Company adopted the Emerging Issues Task Force (“EITF”) Issue No. 08-4: Transition Guidance for Conforming Changes to Issue No. 98-5 (EITF 08-4), which was ratified by the consensus of the FASB in June 2008.  The objective of EITF 08-4 is to provide transition guidance for conforming changes made to Issue No. 98-5 “Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios” that resulted from Issue No. 00-27, “Application of Issue No. 98-5 to Certain Convertible Instruments,” and FASB Statement No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. This transition guidance is unique in that the current changes reflect matters that should have been addressed in the past, but were missed. Issue No. 08-4 concludes that conforming changes made to Issue No. 98-5 that result from Issue No. 00-27 and Statement No. 150 are effective for financial statements issued for fiscal  years ending after December 15, 2008. The effect of these changes is to be applied retrospectively with the cumulative effect of the change being reported in retained earnings. If a company must make a change in its accounting to implement these changes, then the disclosure requirements in FAS 154 should be followed. The Company is currently evaluating the impact of adoption of EITF 08-4.   The adoption of EITF 08-4 did not impact the Company’s consolidated financial statements.

In May 2008, the FASB issued Staff Position (FSP) EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities. This staff position addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the allocation in computing earnings per share under the two-class method described in SFAS 128, Earnings Per Share. The FASB concluded that all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends participate in undistributed earnings with common shareholders. If awards are considered participating securities, the Company is required to apply the two-class method of computing basic and diluted earnings per share. FSP EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years. Early adoption is prohibited. The implementation of EIFT 03-6-1 did not impact the Company’s consolidated financial statements.

In November 2007, FASB issued EITF 07-1, “Accounting for Collaborative Arrangements” (“EITF 07-1”).”   EITF 07-1 requires additional disclosures related to collaborative arrangements. EITF 07-1 is effective for fiscal years beginning after December 15, 2008.  The implementation of EIFT 07-1 did not impact the Company’s consolidated financial statements.

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Recently issued accounting pronouncements

In March 2008, the Financial Accounting Standards Board issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities — an Amendment of Statement No. 133 (SFAS 161). SFAS 161 enhances disclosure requirements about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. This statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company is currently evaluating the impact of adoption of SFAS 161.

Note 4 -Commitments and Contingencies

Leases

The Company has entered into a lease for office, warehouse and laboratory facilities in The Woodlands, Texas under a third party non-cancelable operating lease through 2010. Future minimum lease commitments as of March 31, 2009 are as follows:

Year Ending December 31
2009	$	154,768
2010	191,825
2011	—
2012	—
2013	—
Thereafter	—
Total	$	346,593

This lease provides the Company with a 5-year renewal option.

Note 5 -Redeemable Preferred Stock, Equity, Stock Plan and Warrants

Equity instruments issued to non-employees

From time to time, in order to preserve cash and to fund our operating activities, common stock or other equity instruments may be issued for cash or in exchange for goods or services. Equity instruments issued for goods or services are recorded at the fair value of the goods or services received or the fair value of the equity instruments issued, whichever is more reliably measurable.  During 2007, we did the following:

·Effective January 15, 2007, we requested and Lusierna Asset Management, Ltd. (the “Consultant”) agreed to provide consulting and advisory services to us pursuant to and in accordance with our request, including but not limited to, advice regarding corporate structuring, the identification of potential candidates for our board of directors and transaction structuring.  In consideration of the consulting services, we agreed that at the time of, and subject to, the closing of no less than gross proceeds of $12,000,000 from the sale of the Company’s equity in a private placement, (the “Offering Threshold Closing”), the Company (i) issued to the Consultant, simultaneously with the Offering Threshold Closing, initial closing, a three year warrant to purchase 750,000 shares (the “Option Shares”) of our common stock, at an exercise price of $1.10 per Option Share, with a cashless exercise provision and no anti-dilution adjustment, and (ii) we paid to the Consultant a fee of $480,000.  The Company utilized the Black-Scholes methodology in determining the fair market value of the warrants of $217,007 and recorded the expense in the first quarter of 2007.  The Consultants’ fee of $480,000 was paid from the proceeds of the Purchase Agreement, described below, and expensed in the first quarter of 2007.

·Effective February 13, 2007 we entered into an Investor Relations Agreement with Lusierna Asset Management, Ltd. (the “Consultant”) which provides that the Agreement will terminate on the date twelve (12) months from the Commencement Date, unless otherwise subject to earlier termination.  During the term of this Agreement, the Consultant shall provide public and investor relations services (collectively, the “Services”) to us, to result in improved investor recognition of Uni-Pixel, Inc., a broader following by analysts and institutions to include providing directly, or managing the delivery of, a wide range of services, including, but not limited to:

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·Proactive marketing of the Company directly to security analysts, stockbrokers and portfolio managers and investors.

·Assisting the Company in gaining media coverage both locally and nationally.

·Assisting in the preparation of press releases, including monitoring wire service coverage of the Company for accuracy and pickup.

·Preparing presentations relating to the Company for meetings with analysts, registered representatives and portfolio managers, other large investors, and sponsored forums.

·Assisting in preparing information kits about the Company in response to press and/or investor inquiries.

·Providing such other services and assistance as Consultant and the Company shall deem necessary or appropriate to enhance the Company’s business.

The Consultant shall receive $10,000 per month payable monthly on the tenth (10th) day of each month, commencing on the tenth (10th) day of the month following the month in which the Commencement Date occurs and a three (3) year warrant (the “Warrant”) to purchase 300,000 shares of restricted Uni-Pixel, Inc. common stock at an exercise price of $1.10 per share, with a cashless exercise provision and no anti-dilution adjustment. The Warrant shall vest in twelve (12) monthly installments on the tenth (10th) day of each month, commencing in the First Payment Month. The initial payment shall be for 75,000 shares, with the remaining 225,000 shares equally divided into the remaining eleven (11) installments.  The Company utilized the Black-Scholes methodology in determining the fair market value of the warrants of $86,803 and this amount is expensed over 12 months.

Common Stock

During the three months ended March 31, 2009, (1) we issued no shares of common stock for cash in connection with the exercise of stock options; (2) issued no shares of common stock in exchange for cashless exercise of warrants; (3) issued no shares of common stock in connection with the conversion of Series B Preferred Stock and accrued dividends; and (4) issued no shares of common stock in connection with the conversion of Series C Preferred Stock and accrued dividends.

Series B Convertible Preferred Stock

On February 13, 2007, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with The Raptor Global Portfolio Ltd., The Tudor BVI Global Portfolio Ltd., Tudor Proprietary Trading, L.L.C. and The Altar Rock Fund L.P. (collectively, the “Purchasers”) pursuant to which the Company sold on that date in a private placement to the Purchasers (a) 3,200,000 shares of the Company’s Series B Convertible Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”), and (b) warrants (the “Series B Warrants”) to purchase, in aggregate, up to 6,839,279 shares of the Company’s common stock, par value $0.001 for an aggregate purchase price of $12,000,000.  As the Series B Preferred Stock is redeemable for cash at the option of the holder after five years, the Series B Preferred Stock is classified as temporary equity on the balance sheet.  In accordance with EITF 00-27, the Company determined that the Series B Preferred Stock contained a beneficial conversion feature with an intrinsic value of $3,715,602, which was credited to additional paid-in capital in the first quarter of 2007, and is being amortized over five years.  The Company utilized the Black-Scholes methodology in determining the fair market value of the Series B Warrants of $3,715,602, which was credited to additional paid-in capital in the first quarter of 2007, and is being amortized over five years.

Dividends shall accrue, whether or not declared and paid, on the Series B Preferred Stock at the rate per annum of 8%, and shall be cumulative as to any dividends not declared and paid in any year, compounding annually at the same rate.  These dividends are charged to additional paid-in capital.  Each share of Series B Preferred Stock may, at the option of the holder, be converted at any time into a number of fully paid and non-assessable shares of common stock of the Company equal to the quotient obtained by dividing the original issue price of $3.75 for the Series B Preferred Shares, plus all accrued and unpaid Series B Preferred Stock dividends and any other declared and unpaid dividends, by the initial Series B Preferred Stock conversion price of $0.75, which is subject to adjustment from time to time in accordance with the Certificate of Designations.  As of March 31, 2009, there were 3,200,000 shares of Series B Preferred Stock outstanding, with cumulative unpaid dividends of approximately $2,038,356 or 543,562 shares of Series B Preferred Stock.

Series C Convertible Preferred Stock

On September 28, 2007, the Company entered into a Securities Purchase Agreement (the “ ML Purchase Agreement”) with Merrill Lynch Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) pursuant to which the Company sold on that date in a private placement to Merrill Lynch (a) 892,858 shares of the Company’s Series C Convertible Preferred Stock, par value $0.001 per share (the “Series C Preferred Stock”), and (b) warrants (the “ML Warrants”) to purchase, in aggregate, up to 3,214,289 shares of the Company’s common stock, par value $0.001 for an aggregate purchase price of $10,000,010.  As the Series C Preferred

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Stock is redeemable for cash at the option of the holder after five years, the Series C Preferred Stock is classified as temporary equity on the balance sheet.  In accordance with EITF 00-27, the Company determined that the Series C Preferred Stock contained a beneficial conversion feature with an intrinsic value of $3,809,644, which was credited to additional paid-in capital in the third quarter of 2007, and is being amortized over five years.  The Company utilized the Black-Scholes methodology in determining the fair market value of the ML Warrants of $3,809,644, which was credited to additional paid-in capital in the third quarter of 2007, and is being amortized over five years.

Dividends shall accrue, whether or not declared and paid, on the Series C Preferred Stock at the rate per annum of 8%, and shall be cumulative as to any dividends not declared and paid in any year, compounding annually at the same rate. These dividends are charged to additional paid-in capital.  Each share of Series C Preferred Stock may, at the option of the holder, be converted at any time into a number of fully paid and non-assessable shares of common stock of the Company equal to the quotient obtained by dividing the original issue price of $11.20 for the Series C Preferred Shares, plus all accrued and unpaid Series C Preferred Stock dividends and any other declared and unpaid dividends, by the initial Series C Preferred Stock conversion price of $1.40, which is subject to adjustment from time to time in accordance with the Certificate of Designations.  As of March 31, 2009, there were 892,858 shares of Series C Preferred Stock outstanding, with cumulative unpaid dividends of approximately $1,201,097 or 107,241 shares of Series C Preferred Stock.

Stock-based Compensation

2005 Stock Incentive Plan

Effective January 27, 2005, we adopted the Uni-Pixel, Inc. 2005 Stock Incentive Plan. The Stock Incentive Plan is discretionary and allows for an aggregate of up to 2,000,000 shares of our common stock to be awarded through incentive and non-qualified stock options and stock appreciation rights. The Stock Incentive Plan is administered by our Board of Directors, which has exclusive discretion to select participants who will receive the awards and to determine the type, size and terms of each award granted.

In the first quarter of 2009, we did not grant any options under the 2005 Stock Incentive Plan.

2007 Stock Incentive Plan

Effective August 21, 2007, we adopted the Uni-Pixel, Inc. 2007 Stock Incentive Plan. The Stock Incentive Plan is discretionary and allows for an aggregate of up to 4,000,000 shares of our common stock to be awarded through incentive and non-qualified stock options and stock appreciation rights. The Stock Incentive Plan is administered by our Board of Directors, which has exclusive discretion to select participants who will receive the awards and to determine the type, size and terms of each award granted.

In the first quarter of 2009, we granted a total of 575,000 options to purchase our common stock with an exercise price of $1.45 per share to twenty-three employees.  These options vested on the date of grant.    In the first quarter of 2009, 82,639 options to purchase our common stock with an exercise price of $1.45 per share were retired.

Other Stock Options

In the first quarter of 2009, we did not grant any other stock options.

The following disclosures provide information regarding the Company’s stock-based compensation awards, all of which are classified as equity awards in accordance with SFAS No. 123(R):

Stock options. The Company grants stock options to employees that allow them to purchase shares of the Company’s common stock. Options are also granted to members of the Board of Directors.  The Company determines the fair value of stock options at the date of grant using the Black-Scholes valuation model.  Most options vest annually over a three-year service period.  The Company will issue new shares upon the exercise of stock options.

Total compensation expense recognized for options was approximately $0.6 million and $0.3 million for the three months ended March 31, 2009 and March 31, 2008, respectively.  The Company has recorded approximately $0.2 million of stock compensation expense in selling, general and administrative expenses and approximately $0.4 million in research and development expense for the three months ended March 31, 2009 and approximately $0.2 million of stock compensation expense in selling, general and administrative expenses and approximately $0.1 million in research and development expense for the three months ended March 31, 2008.

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A summary of the changes in the total stock options outstanding during the three months ended March 31, 2009 follows:

			Weighted
			Average
	Options		Exercise Price
Outstanding at December 31, 2008	5,602,014		$	1.56
Granted	575,000		1.45
Forfeited or expired	(82,639	)	1.45
Exercised	—		—
Outstanding at March 31, 2009	6,094,375		$	1.55
Vested and exercisable at March 31, 2009	4,542,839		$	1.59

The fair value of the Company’s options were estimated on the date of grant using the Black-Scholes valuation model with the following weighted-average assumptions:

	Three Months ended March 31, 2009		Three Months ended March 31, 2008
Expected life (years)	5 years		5 years
Interest rate	1.85	%	3.14 to 3.27	%
Dividend yield	—		—
Volatility	135.15	%	108.47	%
Forfeiture rate	—		—

At March 31, 2009, there was $1.3 million of total unrecognized compensation cost related to non-vested stock option awards which is expected to be recognized over a weighted-average period of 0.92 years.  There were 734,809 options that became vested during the three months ended March 31, 2009.

Note 6 -    Fair Value Measurements

As of January 1, 2008, the Company implemented FAS No. 157, Fair Value Measurements (“FAS 157”) for its financial assets and liabilities that are remeasured and reported at fair value at each reporting period and non-financial assets and liabilities that are remeasured and reported at fair value at least annually. In accordance with the provisions of FSP No. FAS 157-2, Effective Date of FASB Statement No. 157, the Company elected to defer implementation of FAS 157 as it relates to its non-financial assets and non-financial liabilities that are recognized and disclosed at fair value in the consolidated financial statements on a nonrecurring basis until January 1, 2009.

In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. The following table presents information about the Company’s financial assets that have been measured at fair value as of March 31, 2009, and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands):

			Quoted		Significant
	Fair Value		Prices in		Other
	at		Active		Observable
	March 31,		Markets		Inputs
Description	2009		(Level 1)		(Level 2)
Assets:
Cash and cash equivalents	$	1,138,677	$	1,138,677	$	—
Assets measured at fair value at March 31, 2009	$	1,138,677	$	1,138,677	$	—

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATON.

Forward Looking Statements

Some of the information in this report contains forward-looking information that involve risks and uncertainties.  Our forward-looking statements express our current expectations or forecasts of possible future results or events, including projections of future performance, statements of management’s plans and objectives, future contracts, and forecasts of trends and other matters.  You can identify these statements by the fact that they do not relate strictly to historic or current facts and often use words such as “anticipate,” “believe,” “plan,” “expect,” “future,” “intend,” “may,” “will,” “should,” “estimate,” “predict,” “potential,” “continue,” and other words and expressions of similar meaning.  No assurance can be given that the results in any forward-looking statement will be achieved and actual results could be affected by one or more factors, which could cause them to differ materially.  For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act. You should also consider carefully the statements under “Description of Business - Risk Factors” in our 2008 Form 10-K, which address factors that could cause our actual results to differ from those set forth in the forward-looking statements.

CRITICAL ACCOUNTING POLICIES

The following discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States of America. Our significant accounting policies are more fully described in Note 3 of Notes to the unaudited Consolidated Financial Statements. However, certain accounting policies and estimates are particularly important to the understanding of our financial position and results of operations and require the application of significant judgment by our management or can be materially affected by changes from period to period in economic factors or conditions that are outside of our control.  As a result, they are subject to an inherent degree of uncertainty. In applying these policies, our management uses their judgment to determine the appropriate assumptions to be used in the determination of certain estimates. Those estimates are based on our historical operations, our future business plans and projected financial results, the terms of existing contracts, our observance of trends in the industry, information provided by our customers and information available from other outside sources, as appropriate. The following discusses our significant accounting policies and estimates.

Revenue Recognition:  We recognize revenue over the period the service is performed in accordance with SEC Staff Accounting Bulletin No. 104, “Revenue Recognition in Financial Statements” (“SAB 104”). In general, SAB 104 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence that an arrangement exists, (2) delivery has occurred or services rendered, (3) the fee is fixed and determinable, and (4) collectibility is reasonably assured.

Advance payments are deferred until shipment. The amount of the revenue deferred represents the fair value of the remaining undelivered products measured in accordance with Emerging Issues Task Force Issue (“EITF”) 00-21, “Accounting for Revenue Arrangements with Multiple Deliverables,” which addresses the issue of accounting for arrangements that involve the delivery of multiple products or services.

Revenue from licenses and other up-front fees are recognized on a ratable basis over the term of the respective agreement.

Cost of Revenues and Selling, General and Administrative Expenses and Research and Development Expenses:  In an effort to consolidate our executive management team, we moved our headquarters from Austin, Texas to The Woodlands, Texas during the third quarter of 2005.  The primary purpose of our facility in The Woodlands, Texas is to conduct research on the development, testing and delivery of our prototype devices, and the commercialization of our products.

If, in the future, the purposes for which we operate our facility in The Woodlands, Texas, or any new facilities we open, changes, the allocation of the costs incurred in operating that facility between cost of sales and research and development expenses could change to reflect such operational changes.

Research and Development Expenses:  Research and development costs are expensed as incurred and include salaries and benefits, costs paid to third-party contractors for research, development and manufacturing of materials and devices, and a portion of facilities cost. Prototype development costs are a significant component of research and development expenses and include costs associated with third-party contractors. Invoicing from third-party contractors for services performed can lag several months. We accrue the costs of services rendered in connection with third-party contractor activities based on our estimate of management fees, site management and monitoring costs and data management costs. Actual costs may differ in some cases from estimated costs and are adjusted for in the period in which they become known.

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Intangible Assets:  Our intangible assets represent patents and patent applications, acquired from third parties, which are recorded at cost and amortized over the life of the patent.  We review the value recorded for intangible assets to assess recoverability from future operations using undiscounted cash flows. Impairments are recognized in operating results to the extent the carrying value exceeds fair value determined based on the net present value of estimated future cash flows.  Impairment would then be measured as the difference between the fair value of the fixed or amortizing intangible asset and the carrying value to determine the amount of the impairment.

Stock-Based Compensation:  We recognize the cost of stock options and restricted stock in accordance with SFAS No. 123 (Revised 2004) (“SFAS No. 123(R)”), “Share Based Payment.”  SFAS No. 123(R) requires us to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award.  That cost will be recognized over the period during which an employee is required to provide service in exchange for the reward—known as the requisite service period. No compensation cost is recognized for equity instruments for which employees do not render the requisite service. The grant-date fair value of employee share options and similar instruments will be estimated using option-pricing models adjusted for the unique characteristics of those instruments. SFAS No. 123 must be applied to all options granted or modified after its effective date and also to recognize the cost associated with the portion of any option awards made before its effective date for which the associated service has not been rendered as of its effective date.

RESULTS OF OPERATIONS

Comparison of the three months ending March 31, 2009 and 2008

REVENUES.  We are a development stage company that has developed, patented and demonstrated a new color display technology in the form of proof of concept prototypes which we call Time Multiplexed Optical Shutter (“TMOS”).  We intend to be a leader in the research, development and commercialization of new flat panel displays using TMOS in a variety of applications, such as mobile phones, digital cameras, notebook computers, televisions and other consumer electronic devices. From inception, we have had a limited amount of revenue that is derived from development contracts.

Revenues were $0 for the three months ended March 31, 2009 and the three months ended March 31, 2008.

COST OF REVENUES.  Cost of revenues include all direct expenses associated with the delivery of services including internal labor costs. Cost of revenues for the three months ended March 31, 2009 and the three months ended March 31, 2008 was $0.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and administrative expenses decreased by 3% or approximately $24,000, to $812,770 for the three months ended March 31, 2009 from $836,844 for the three months ended March 31, 2008.  The major components of the decrease are as follows:

a)  Salaries and benefits increased by approximately $76,000 to $487,000 for the three months ended March 31, 2009 compared to $411,000 for the three months ended March 31, 2008 due to an increase in stock compensation expense of approximately $29,000 to $237,000 for the three months ended March 31, 2009 compared to $208,000 for the three months ended March 31, 2008;

b) Contract labor decreased by approximately $3,000 to $0 for the three months ended March 31, 2009 compared to $3,000 for the three months ended March 31, 2008;

c) Legal expense decreased by approximately $27,000 to $38,000 for the three months ended March 31, 2009 compared to $65,000 for the three months ended March 31, 2008;

d) Accounting expense decreased by approximately $6,000 to $26,000 for the three months ended March 31, 2009 compared to $32,000 for the three months ended March 31, 2008;

e) Office expense decreased by approximately $22,000 to $3,000 for the three months ended March 31, 2009 compared to $25,000 for the three months ended March 31, 2008;

f) Travel expense decreased by approximately $8,000 to $5,000 for the three months ended March 31, 2009 compared to $13,000 for the three months ended March 31, 2008;

g) Depreciation and amortization expense increased by approximately $13,000 to $83,000 for the three months ended March 31, 2009 compared to $70,000 for the three months ended March 31, 2008.

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RESEARCH AND DEVELOPMENT. Research and development expenses decreased by approximately $1,258,000 during the three months ended March 31, 2009 to $1,010,346 from $2,268,137 for the three months ended March 31, 2008. The major components of the decrease are as follows:

a) Salaries and benefits attributable to research and development increased by approximately $240,000 to $849,000 for the three months ended March 31, 2009 compared to $609,000 for the three months ended March 31, 2008 due to an increase in stock compensation expense of approximately $270,000 to $398,000 for the three months ended March 31, 2009 compared to $128,000 for the three months ended March 31, 2008;

b) Consulting expense attributable to research and development decreased by approximately $471,000 to $36,000 for the three months ended March 31, 2009 compared to $507,000 for the three months ended March 31, 2008;

c) Lab expense decreased by approximately $933,000 to $53,000 for the thee months ended March 31, 2009 compared to $986,000 for the three months ended March 31, 2008 primarily due to decreased services related to prototype development; and

d) Travel expense attributable to research and development decreased by approximately $77,000 to $26,000 for the three months ended March 31, 2009 compared to $103,000 for the three months ended March 31, 2008.

OTHER INCOME (EXPENSE).

a) Interest income (expense), net decreased to $3,530 for the three months ended March 31, 2009 as compared to $96,720 for the three months ended March 31, 2008 primarily due to less cash on hand.

NET LOSS.   Net loss decreased to $1,819,586 for the three months ended March 31, 2009, as compared to $3,008,261 for the three months ended March 31, 2008. We compute our net loss per share on the basis of net loss attributable to common stockholders, which included the effects of certain items not included in the determination of net loss. Net loss attributable to common stockholders for the three months ended March 31, 2009 was $3,001,261 as compared to a net loss attributable to common stockholders of $4,194,758 for the three months ended March 31, 2008. The net loss attributable to common stockholders for the three months ended March 31, 2009 includes $1,181,676 of accrued but unpaid preferred stock dividends and amortization of preferred stock discount.  The net loss attributable to common stockholders for the three months ended March 31, 2008 includes $1,186,497 of accrued but unpaid preferred stock dividends.

Off-Balance Sheet Transactions

We do not engage in material off-balance sheet transactions.

LIQUIDITY AND CAPITAL RESOURCES

Operating Activities

Cash used in operating activities during the three months ended March 31, 2009 decreased to $896,870 as compared to $2,446,212 used for the three months ended March 31, 2008. This is primarily attributable to a decrease in research and development expense for the three months ended March 31, 2009.

Investing Activities

Cash used for investing activities during the three months ended March 31, 2009 amounted to $0, as compared to $161,493 used for investing activities for the three months ended March 31, 2008. This is primarily attributable to the acquisition of approximately $161,000 of property and equipment during the three months ended March 31, 2008.

Financing Activities

We have financed our operating and investing activities primarily from the proceeds of private placements of common stock, convertible investor notes, Series A Convertible Preferred Stock offering which we closed in December 2004 and January 2005 and Series B Convertible Preferred Stock offering which we closed in February 2007 and Series C Convertible Preferred Stock offering we closed in September 2007. During the three months ended March 31, 2009, the total net cash provided by financing activities was $0.  During the three months ended March 31, 2008, the total net cash provided by financing activities was $0.

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Working Capital

As of March 31, 2009, we had a cash balance of $1.1 million. In the 4th quarter of 2008, the Company’s management began to reduce operating expenses and delay planned expenditures to preserve the Company’s working capital.  We project that current cash reserves will sustain our operations at least through May 2009, and we are not aware of any trends or potential events that are likely to impact our short term liquidity through this term.

On February 13, 2007, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with The Raptor Global Portfolio Ltd., The Tudor BVI Global Portfolio Ltd., Tudor Proprietary Trading, L.L.C. and The Altar Rock Fund L.P. (collectively, the “Purchasers”) pursuant to which we sold on that date in a private placement to the Purchasers (a) 3,200,000 authorized but unissued shares of the Company’s Series B Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”), and (b) warrants (the “Warrants”) to purchase, in aggregate, up to 6,839,279 shares at $1.24 per share, of the Company’s common stock, par value $0.001, for an aggregate purchase price of $12,000,000.

On September 28, 2007, the Company entered into a Securities Purchase Agreement (the “ ML Purchase Agreement”) with Merrill Lynch Pierce, Fenner & Smith Incorporated (the “ ML Purchaser”) pursuant to which the Company sold on that date in a private placement to the ML Purchaser (a) 892,858 authorized but unissued shares of the Company’s Series C Preferred Stock, par value $0.001 per share (the “Series C Preferred Stock”), and (b) warrants (the “ML Warrants”) to purchase, in aggregate, up to 3,214,289 shares of the Company’s common stock, par value $0.001 for an aggregate purchase price of $10,000,010.

We are a development stage company and have not experienced significant operations since our formation. We reached a positive working capital position as of the first quarter of 2005 as a result of our financing activities. We have incurred significant operating losses during the years ended December 31, 2002, 2003, 2004, 2005, 2006, 2007 and 2008 and the three months ended March 31, 2009. We intend to utilize a proprietary methodology for development of our displays. Our principal activities, from the beginning of the development stage, have been organizational matters, capital raising activities including issuance of stock, product research and development, fund raising, and market research.

To date, we have had only a few revenue-generating services or development contracts.  These include a prototype development agreement with a large personal computer company, and a Small Business Innovation Research (SBIR) Phase One agreement with the U.S. Air Force for $98,214 and a follow-on Phase Two agreement for $686,966.  We also entered into a prototype development agreement with Lockheed Martin, a large military contractor, in October 2005, for which we have received full payment.  Our immediate customer prospects are limited to Lockheed Martin, with which we entered into a License and Strategic Business Agreement dated October 5, 2005.  See “Risk Factors” included in our 2008 Form 10-K.

Management will work to establish specific applications for our display technology that will generate significant revenues and cash flows to support operations.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4.  CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

As of March 31, 2009, management, including our Chief Executive Officer and Chief Financial Officer, performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934.  Based on their evaluation, management concluded that, as of March 31, 2009, our disclosure controls and procedures are effective to ensure that material information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that it is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

We maintain a system of internal control over financial reporting that is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States.  Based on the most recent evaluation, our Chief Executive Officer and Chief Financial Officer have determined that no significant changes in our internal control over financial

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reporting occurred during our most recent fiscal quarter that have materially affected, or are reasonably like to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 6. EXHIBITS.

Exhibit No.	Description
3.1	Amended and Restated Certificate of Incorporation of Real-Estateforlease.com, Inc. (1)
3.2	Amended and Restated Bylaws of Uni-Pixel, Inc. (1)
4.1	Certificate of Designations of Real-Estateforlease.com, Inc. Series A Convertible Preferred Stock (1)
4.2	Junior Subordinated Unsecured Promissory Note (1)
4.3	Common Stock Purchase Warrant No. 1 (1)
4.4	Common Stock Purchase Warrant No. 2 (1)
4.5	Common Stock Purchase Warrant No. 3 (1)
4.6	Form of Common Stock certificate (2)
4.7	Uni-Pixel, Inc. 12% Senior Secured Convertible Debenture No. 1 issued to Trident Growth Fund, L.P., dated May 24, 2006. (3)
4.8	Uni-Pixel, Inc. 12% Senior Secured Convertible Debenture No. 1 issued to CapSource Fund, L.P., dated May 24, 2006. (3)
4.9	Uni-Pixel, Inc. 10% Senior Unsecured Convertible Debenture dated September 12, 2006. (4)
4.10	Common Stock Purchase Warrant No. 1 issued to Trident Growth Fund, L.P., dated May 24, 2006. (3)
4.11	Common Stock Purchase Warrant No. 1 issued to CapSource Fund, L.P., dated May 24, 2006. (3)
4.12	Common Stock Purchase Warrant dated September 12, 2006. (4)
10.1	Securities Purchase Agreement dated May 24, 2006, by and between Uni-Pixel, Inc., Uni-Pixel Displays, Inc., Trident Growth Fund, L.P. and CapSource Fund, L.P. (3)
10.2	Security Agreement dated May 24, 2006, by and between Uni-Pixel, Inc., Uni-Pixel Displays, Inc., Trident Growth Fund, L.P. and CapSource Fund, L.P. (3)
10.3	Securities Purchase Agreement dated September 12, 2006 (4)
31.1	Certification of the President and Principal Executive Officer of Uni-Pixel, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (5)
31.2	Certification of the Chief Financial Officer of Uni-Pixel, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (5)
32.1	Certification of the President and Principal Executive Officer of Uni-Pixel, Inc., pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (5)
32.2	Certification of the Chief Financial Officer of Uni-Pixel, Inc., pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (5)

(1)Previously filed as an exhibit to the Company’s Form 10-SB, filed on February 18, 2005, and incorporated by reference hereto.

(2)Previously filed as an exhibit to the Company’s Form 10-KSB, filed on March 28, 2006, and incorporated by reference hereto.

(3)Previously filed as an exhibit to the Company’s Form 10-QSB, filed on August 14, 2006, and incorporated by reference hereto.

(4)Previously filed as an exhibit to the Company’s Form 8-K, filed on September, 2006, and incorporated by reference hereto.

(5)Filed herewith

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	UNI-PIXEL, INC.
May 1, 2009	By:	/s/ James A. Tassone
Date		James A. Tassone, Chief Financial Officer

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