S-1/A 1 q1100262_s1a-airtouch.htm Unassociated Document


  Registration No. 333-177071
 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Amendment No. 1 to
Form S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
AIRTOUCH COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
 
Delaware
 
3661
 
20-8820679
(State or other jurisdiction
of incorporation or organization)
 
(Primary Standard Industrial
Classification Code Number)
 
(I.R.S. Employer
Identification Number)
 
1401 Dove Street, Suite 330
Newport Beach, CA 92660
Telephone: (949) 825-6570
 (Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
 
Hideyuki Kanakubo
President and Chief Executive Officer
1401 Dove Street, Suite 330
Newport Beach, CA 92660
Telephone: (949) 825-6570
 (Name, address, including zip code, and telephone number, including area code, of agent for service)
 
Copies to:
Harvey J. Kesner, Esq.
Jeff Cahlon, Esq.
Sichenzia Ross Friedman Ference LLP
61 Broadway, 32 nd Floor
New York, New York 10006
Telephone: (212) 930-9700
 
Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.   x
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act of 1933 registration statement number of the earlier effective registration statement for the same offering.   o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   o
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   o
Indicate by a check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):
       
Large Accelerated Filer  o
   
Accelerated Filer  o
Non-Accelerated Filer  o (Do not check if a smaller reporting company)
 
Smaller Reporting Company  þ
 
CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities to be Registered
Amount to be Registered (1)
Proposed Maximum Offering Price per Share (2)
Proposed Maximum Aggregate Offering Price
Amount of Registration Fee
Common stock, par value $.001 per share
10,285,263
$2.75
$28,284,473.25
$3,283.83
Common stock, par value $.001 per share, issuable upon exercise of Warrants
10,132,491
$2.75
$27,864,350.25
$3,235.05
Total
20,417,754
$2.75
$56,148,823.50
$6,518.88*
 
(1)
Pursuant to Rule 416 under the Securities Act, the shares of common stock offered hereby also include an indeterminate number of additional shares of common stock as may from time to time become issuable by reason of stock splits, stock dividends, recapitalizations or other similar transactions.
(2)
With respect to the shares of common stock offered by the selling stockholders named herein, estimated at $ per share, the average of the high and low prices of the common stock as reported on the OTC Bulletin Board on September 23, 2011, for the purpose of calculating the registration fee in accordance with Rule 457(c) under the Securities Act.
 
* Previously paid.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

 
 

 
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
 
SUBJECT TO COMPLETION, DATED NOVEMBER 29, 2011
 
PRELIMINARY PROSPECTUS
 
 
20,417,754 Shares
 
AirTouch Communications, Inc.

 
Common Stock

 
This prospectus relates to the sale by the selling stockholders identified in this prospectus of up to 20,417,754 shares of our common stock.  All of these shares of our common stock are being offered for resale by the selling stockholders.
 
The prices at which the selling stockholders may sell shares will be determined by the prevailing market price for the shares or in negotiated transactions. We will not receive any proceeds from the sale of these shares by the selling stockholders.
 
We will bear all costs relating to the registration of these shares of our common stock, other than any selling stockholders’ legal or accounting costs or commissions.
 
Our common stock is quoted on the Over-the-Counter Bulletin Board under the symbol “ATCH.OB”. The last reported sale price of our common stock as reported by the OTC Bulletin Board on November 23, 2011 , was $2.75 per share.
 
Investing in our common stock is highly speculative and involves a high degree of risk. You should carefully consider the risks and uncertainties described under the heading “Risk Factors” beginning on page 6 of this prospectus before making a decision to purchase our common stock.
 
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
 

 
 
The date of this prospectus is _____, 2011
 

 


 
 

 
 
 TABLE OF CONTENTS
 
PROSPECTUS SUMMARY
3
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
6
RISK FACTORS
6
USE OF PROCEEDS
16
MARKET FOR OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS
16
DIVIDEND POLICY
16
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
16
BUSINESS
20
EXECUTIVE COMPENSATION
29
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
30
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
30
SELLING STOCKHOLDERS
32
DESCRIPTION OF SECURITIES
44
PLAN OF DISTRIBUTION
46
LEGAL MATTERS
48
EXPERTS
48
WHERE YOU CAN FIND ADDITIONAL INFORMATION
48
FINANCIAL STATEMENTS
49
 
You should rely only on the information contained in this prospectus. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where an offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.
 
  
 
2

 
 
PROSPECTUS SUMMARY
 
The following summary highlights information contained elsewhere in this prospectus. This summary may not contain all of the information that may be important to you. You should read this entire prospectus carefully, including the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical financial statements and related notes included elsewhere in this prospectus. In this prospectus, unless the context provides otherwise, the terms “the Company,” “we,” “us,” and “our” refer to AirTouch Communications, Inc. and its subsidiaries (including AirTouch, Inc.).
 
Overview
 
We are a technology firm, located in Newport Beach, CA, that develops and markets communication devices capable of amplifying the wireless signal.  We design these devices based on our patented technology to be a core enabling technology platform that will  be capable of converging other services and applications for the home and office.  We currently offer our DM1000 (cell@home) product through various channels, including several of the major U.S. carriers, and are working to bring our higher performance, lower cost next generation HomeConnex series of products, UFO series of products and Focal Point to   the global market.
 
For the nine months ended September 30, 2011 , and 2010 we had net revenue of $477,217 and $142,844 , and incurred net losses of $6,569,793 and $2,743,200 , respectively. For the years ended December 31, 2010 and 2009, we had net revenue of $160,441 and $147,661, and incurred net losses of $4,850,375 and $1,025,951, respectively.
 
Our History
 
The Company was incorporated as a Delaware corporation with the name “International Vineyard, Inc.” on April 2, 2007 for the purpose of developing a wholesale and distribution business that specializes in providing French and California sourced wines to the Chinese market.  The Company has exited the wine business and is now exclusively designing and developing wireless communications devices.  On February 3, 2011, we amended and restated our certificate of incorporation in order to, among other things, change our name to Waxess Holdings, Inc. and increase our authorized capital stock to 125,000,000 shares of which 100,000,000 are designated as common stock and 25,000,000 are designated as “blank check” preferred stock. On July 21, 2011, we amended our certificate of incorporation to change our name to AirTouch Communications, Inc.
 
On February 4, 2011, we entered into an Agreement of Merger and Plan of Reorganization (the “Merger Agreement”) with AirTouch, Inc., formerly known as Waxess USA, Inc., a privately held California corporation, and Waxess Acquisition Corp., our newly formed, wholly-owned Delaware subsidiary.  Upon closing of the transaction contemplated under the Merger Agreement (the “Merger”), Waxess Acquisition Corp. merged with and into AirTouch, Inc., and AirTouch, Inc., as the surviving corporation, became a wholly-owned subsidiary of the Company. We intend to carry on the business of AirTouch, Inc. as our sole line of business.
 
Recent Developments
 
Between March 15, 2010 and February 1, 2011, AirTouch, Inc. entered into Secured Convertible Note and Securities Purchase Agreements with certain accredited investors pursuant to which AirTouch, Inc. sold to the investors secured convertible promissory notes (the “ Bridge Notes ”) in the aggregate principal amount of $3,410,000 and warrants (the “ Bridge Warrants ”) to purchase an aggregate of 3,360,000 shares of common stock.  Between February 17, 2011 and April 15, 2011, the Company entered into Purchase Agreements with additional investors pursuant to which the Company sold to the investors Bridge Notes in the aggregate principal amount of $1,907,500 and Bridge Warrants to purchase an aggregate of 1,907,500 shares of the Company’s common stock.  Collectively, AirTouch, Inc. and the Company sold an aggregate of $5,317,500 principal amount of Bridge Notes and detachable Bridge Warrants to purchase an aggregate of 5,267,500 shares of common stock.
 
 
3

 
 
On April 28, 2011, investors holding an aggregate of $5,217,500 principal amount of Bridge Notes converted such Bridge Notes into an aggregate of 2,753,214 Units offered by the Company in a private placement (the “Private Placement”), with each Unit consisting of one share of the Company’s common stock and one two-year warrant to purchase an additional share of the Company’s common stock at an exercise price of $3.00.  In connection with the conversion of the Bridge Notes, an aggregate of $288,928 of accrued interest representing 144,464 Units included above was also converted into the Private Placement.
 
In connection with the consummation of the Private Placement, the Bridge Warrants held by the investors were converted into three year warrants to purchase an aggregate of 5,267,500 shares of the Company’s common stock at an exercise price of $2.00 per share (the “Replacement Warrants”).

In July and August of 2011, an aggregate of 1,745,723 warrants originally issued in the Private Placement, 3,222,500 Replacement Warrants and 3,735,888 warrants issued to other shareholders were exchanged for an aggregate of 1,958,779 shares of common stock (the “ Warrant Exchange Shares ”) (including 1,532,049 Warrant Exchange Shares issued in exchange for warrants originally issued in the Private Placement and Replacement Warrants).
 
 On July 11, 2011, July 29, 2011, August 5, 2011, and August 15, 2011 we entered into subscription agreements (the “ Subscription Agreements ”) with certain investors whereby we sold an aggregate of 480 Units, with each Unit consisting of 12,500 shares of the Company’s common stock and one two-year warrant to purchase 12,500 additional shares of common stock at an exercise price of $3.00 per share for a per Unit purchase price of $25,000 and aggregate gross proceeds of $12,000,000. In connection with this offering we paid aggregate placement agent fees consisting of $1,319,470 and issued three-year warrants to purchase a number of Units equal to 9% of the 480 Units sold in the offering, with the same terms as the warrants issued to the investors (the “ Placement Agent Warrants ”).
 
With respect to the warrants issued to investors in the Private Placement, the warrants issued to investors pursuant to the Subscription Agreements, the Replacement Warrants, and the Placement Agent Warrants, (i) if at any time after 12 months from the date of issuance of the warrant there is no effective registration statement registering the resale of the Common Stock underlying the warrants, the warrants may, during such period, be exercised on a “cashless” basis, (ii) during the period beginning on the original date of issuance of the warrant and ending on the earlier to occur of (a) the first anniversary date of the original issuance date and (b) the date there is an effective registration statement on file with the SEC covering the resale of all of the common stock underlying the warrants, the Company issues or sells any shares of Common Stock or securities convertible into common stock (other than an “Exempt Issuance”, as defined in the warrant) for consideration less than a price equal to the exercise price of the warrant (the “New Issuance Price”), then the exercise price of the warrant shall be reduced to an amount equal to New Issuance Price multiplied by 1.5, and (iii) the warrant may be redeemed, at the option of the Company, at a price of $0.001 per share of shares underlying such warrant (“ Redemption Price ”), upon not less than 10 days prior written notice (“ Redemption Period ”) to the holder notifying the holder of the Company’s intent to exercise such right and setting forth a time and date for such redemption; provided, however, that no such redemption may occur unless (a) the Company’s common stock has had a per share closing sales price of at least $5.00 for twenty consecutive trading days and (b) at the date of the redemption notice and during the entire Redemption Period there is an effective registration statement covering the resale of the shares of common stock underlying the warrant.
 
The securities sold in the Private Placement and pursuant to the Subscription Agreements were not registered under the Securities Act, or the securities laws of any state, and were offered and sold in reliance on the exemption from registration afforded by Section 4(2) and Regulation D (Rule 506) under the Securities Act and corresponding provisions of state securities laws, which exempt transactions by an issuer not involving any public offering.
 
 
 
 
4

 
 
THE OFFERING
 
 
Common stock offered by selling stockholders
This prospectus relates to the sale by certain selling stockholders of 20,417,754 shares of our common stock consisting of:
 
 
2,753,214 shares of our common stock issued to investors in the Private Placement;
 
1,007,491 shares of our common stock underlying warrants issued to investors in the Private Placement;
 
2,045,000 shares of our common stock underlying  Replacement Warrants;
 
6,000,000 shares of our common stock issued to investors pursuant to the Subscription Agreements;
 
6,000,000 shares of our common stock underlying the warrants issued to investors pursuant to the Subscription Agreements;
 
540,000 shares of our common stock underlying the Placement Agent Warrants;
 
540,000 shares of our common stock underlying the warrants underlying the Placement Agent Warrants; and
 
 
1,532,049 Warrant Exchange Shares
   
Offering price
Market price or privately negotiated prices.
     
Common stock outstanding before the offering
19,379,569 (1)
 
     
Common stock outstanding after the offering
29,512,060 (assuming the exercise of all the warrants the underlying shares of which are included in this prospectus)
 
     
Use of proceeds
We will not receive any proceeds from the sale of the common stock by the selling stockholders.
 
     
OTC Symbol
ATCH.OB
 
     
Risk Factors
You should carefully consider the information set forth in this prospectus and, in particular, the specific factors set forth in the “Risk Factors” section beginning on page 6 of this prospectus before deciding whether or not to invest in our common stock.
 

(1)
 
Represents the number of shares of our common stock issued and outstanding as of November 15, 2011.
 
 
 
5

 
 
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
 
This prospectus contains forward-looking statements. Such statements include statements regarding our expectations, hopes, beliefs or intentions regarding the future, including but not limited to statements regarding our market, strategy, competition, development plans (including acquisitions and expansion), financing, revenues, operations, and compliance with applicable laws. Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. Factors that could cause actual results to differ materially from such forward-looking statements include the risks described in greater detail in the following paragraphs. All forward-looking statements in this document are made as of the date hereof, based on information available to us as of the date hereof, and we assume no obligation to update any forward-looking statement, except as may be required under applicable securities law. Market data used throughout this prospectus is based on published third party reports or the good faith estimates of management, which estimates are based upon their review of internal surveys, independent industry publications and other publicly available information. Although we believe that such sources are reliable, we do not guarantee the accuracy or completeness of this information, and we have not independently verified such information.
 
RISK FACTORS
 
 There are numerous and varied risks, known and unknown, that may prevent us from achieving our goals.  If any of these risks actually occur, our business, financial condition or results of operation may be materially adversely affected.  In such case, the trading price of our common stock could decline and investors could lose all or part of their investment.
 
Risks Relating to Our Business
 
Since we have a limited operating history it is difficult for potential investors to evaluate our business.
 
We commenced doing business in August 2004 and incorporated in 2008. Our limited operating history makes it difficult for potential investors to evaluate our business or prospective operations. Since our formation, we have generated only limited and sporadic revenues.  As an early stage company, we are subject to the risks inherent in the initial organization, financing, expenditures, complications and delays in a new business. Investors should evaluate an investment in us in light of the uncertainties encountered by developing companies in a competitive environment. Our business is dependent upon the implementation of our business plan. There can be no assurance that our efforts will be successful or that we will ultimately be able to attain profitability.
 
We have a history of losses and a large accumulated deficit and we may not be able to achieve profitability in the future.

For the nine months ended September 30, 2011, and 2010 we incurred net losses of $6,569,793 and $2,743,200 , respectively. For the years ended December 31, 2010 and 2009, we incurred net losses of $4,850,375 and $1,025,951, respectively. As of September 30, 2011 , we have accumulated net losses of $13,336,139 . There can be no assurance that we will be profitable in the future. If we are not profitable and cannot obtain sufficient capital we may have to cease our operations. Our independent registered public accounting firm has issued an unqualified opinion with an explanatory paragraph to the effect that there is substantial doubt about our ability to continue as a going concern. This unqualified opinion with an explanatory paragraph could have a material adverse effect on our business, financial condition, results of operations and cash flows. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” and Footnotes to our financial statements.
 
We may need additional financing to execute our business plan and fund operations, which additional financing may not be available on reasonable terms or at all.
 
We have limited funds and may not be able to execute our current business plan and fund business operations long enough to achieve profitability.  Our ultimate success may depend upon our ability to raise additional capital.  There can be no assurance that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to us.
 
 
6

 
 
We may be required to pursue sources of additional capital through various means, including joint venture projects and debt or equity financings. Future financings through equity investments are likely to be dilutive to existing stockholders. Also, the terms of securities we may issue in future capital transactions may be more favorable for our new investors. Newly issued securities may include preferences, superior voting rights, the issuance of warrants or other derivative securities, and the issuances of incentive awards under equity employee incentive plans, which may have additional dilutive effects. Further, we may incur substantial costs in pursuing future capital and/or financing, including investment banking fees, legal fees, accounting fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which will adversely impact our financial condition.
 
Our ability to obtain needed financing may be impaired by such factors as the capital markets, both generally and specifically in our industry, and the fact that we are not profitable, which could impact the availability or cost of future financings. If the amount of capital we are able to raise from financing activities, together with our revenues from operations, is not sufficient to satisfy our capital needs, even to the extent that we reduce our operations accordingly, we may be required to cease operations.
 
It may be costly and difficult to enforce our intellectual property rights.
 
Our success will depend on our ability to: (i) obtain patents for product technologies and manufacturing methodologies; (ii) defend patents once applied for and obtained; (iii) maintain trade secrets; and (iv) operate without infringing the intellectual property rights of others, both in the United States and foreign countries.  Patent positions can be uncertain and involve complex legal and factual issues for which the legal principles remain largely unresolved.  We cannot promise that our patents will not be challenged, invalidated, or circumvented.  Potential competitors have filed patents in areas related to our research.  We may need to expend funds to litigate to defend or enforce our patents against others.  It may be difficult for us to obtain and enforce worldwide patent protection because of the cost and legal issues attendant with obtaining patents in each country.  Changes in the laws pertaining to the life of a patent may also have an adverse effect on our intellectual property rights.

Our business results will be subject to fluctuations in foreign currencies.

We plan to expand our business into foreign countries.  It is unlikely that we will be able to purchase products and services and sell products and services in United States (U.S.) dollars; therefore, our financial results will be subject to certain risks associated with the value of those foreign currencies relative to the value of the US dollar.  This risk could negatively impact both financial results and cash flows.
 
Our industry is subject to rapid technological change, and we must make substantial investments in new products, services and technologies to compete successfully.

New technological innovations generally require a substantial investment before they are commercially viable. We intend to continue to make substantial investments in developing new products and technologies, and it is possible that our development efforts will not be successful and that our new technologies will not result in meaningful revenues. Our future success will depend on our ability to continue to develop and introduce new products, technologies and enhancements on a timely basis. Our future success will also depend on our ability to keep pace with technological developments, protect our intellectual property, satisfy customer requirements, meet consumer expectations, price our products and services competitively and achieve market acceptance. The introduction of products embodying new technologies and the emergence of new industry standards could render our existing products and technologies, and products and technologies currently under development, obsolete and unmarketable. If we fail to anticipate or respond adequately to technological developments or customer requirements, or experience any significant delays in development, introduction or shipment of our products and technologies in commercial quantities, demand for our products and our customers’ and licensees’ products that use our technologies could decrease, and our competitive position could be damaged.
 
 
7

 
 
Competitive pricing could adversely affect our profits.

Profits suggested by our business plan will attract competitive attention.  We already face competition in the consumer electronics space from companies that may have lower fixed and marginal costs. We expect competitors to challenge our patent estate, invent similar products, and introduce product substitutes.  There is no assurance that our competitors will not develop more effective or affordable technology in an earlier or more efficient manner. The possibility exists that others may develop more cost effective products and/or processes . To the extent that our products threaten competitor’s offerings, these competitors can be expected to engage in price-cutting to protect traditional markets. Many of our potential competitors have significantly greater financial and technical resources, and established sales and marketing teams than we do.

 
Defects or errors in our products and services or in products made by our suppliers could harm our relations with our customers and expose us to liability. If we experience product recalls, we may incur significant expenses and experience decreased demand for our products.

Our products are inherently complex and may contain defects and errors that are detected only when the products are in use. The design process interface issues are more complex as we enter into new domains of technology, which adds risk to yields and reliability.  Because our products are used for both personal and business purposes, such defects or errors could have a serious impact on our end customers, which could damage our reputation, harm our customer relationships and expose us to liability.  Defects or impurities in our components, materials or software, equipment failures or other difficulties could adversely affect our ability, and that of our customers, to ship products on a timely basis as well as customer or licensee demand for our products. Any such shipment delays or declines in demand could reduce our revenues and harm our ability to achieve or sustain desired levels of profitability. We and our customers may also experience component or software failures or defects that could require significant product recalls, rework and/or repairs that are not covered by warranty reserves.
 
If we are unable to attract and retain qualified employees it would adversely impact our business.
 
Our future success depends largely upon the continued service of our board members, executive officers and other key management and technical personnel. Our success also depends on our ability to continue to attract, retain and motivate qualified personnel. In addition, implementing our product and business strategy requires specialized engineering and other talent, and our revenues are highly dependent on technological and product innovations. The market for such specialized engineering and other talented employees in our industry is extremely competitive.  In addition, existing immigration laws make it more difficult for us to recruit and retain highly skilled foreign national graduates of U.S. universities, making the pool of available talent even smaller. Key employees represent a significant asset, and the competition for these employees is intense in the wireless communications industry.  In the event of a labor shortage, or in the event of an unfavorable change in prevailing labor and/or immigration laws, we could experience difficulty attracting and retaining qualified employees. We continue to anticipate increases in human resource needs, particularly in engineering. If we are unable to attract and retain the qualified employees that we need, our business may be harmed. We may have particular difficulty attracting and retaining key personnel in periods of poor operating performance given the significant use of incentive compensation by our competitors. Although we intend to in the near future, we currently do not have employment agreements with our key management personnel and do not maintain key person life insurance on any of our personnel. To the extent that new regulations make it less attractive to grant share-based awards to employees or if stockholders do not authorize shares for the continuation of equity compensation programs in the future, we may incur increased compensation costs, change our equity compensation strategy or find it difficult to attract, retain and motivate employees, each of which could materially and adversely affect our business.
 
We depend upon a limited number of third-party suppliers to manufacture and test component parts, subassemblies and finished goods for our products. If these third-party suppliers do not allocate adequate manufacturing and test capacity in their facilities to produce products on our behalf, or if there are any disruptions in the operations, or the loss, of any of these third parties, it could harm our ability to meet our delivery obligations to our customers, reduce our revenues, increase our cost of sales and harm our business.

 
8

 
 
A supplier’s ability to meet our product manufacturing demand is limited mainly by its overall capacity and current capacity availability. Our ability to meet customer demand depends, in part, on our ability to obtain timely and adequate delivery of parts and components from our suppliers. A reduction or interruption in our product supply source, an inability of our suppliers to react to shifts in product demand or an increase in component prices could have a material adverse effect on our business or profitability. Component shortages could adversely affect our ability and that of our customers to ship products on a timely basis and, as a result, our customers’ demand for our products.  Any such shipment delays or declines in demand could reduce our revenues and harm our ability to achieve or sustain desired levels of profitability.  Additionally, failure to meet customer demand in a timely manner could damage our reputation and harm our customer relationships. Our operations may also be harmed by lengthy or recurring disruptions at any of our suppliers’ manufacturing facilities and by disruptions in the distribution channels from our suppliers and to our customers. Any such disruptions could cause significant delays in shipments until we are able to shift the products from an affected manufacturer to another manufacturer. If the affected supplier was a sole-source supplier, we may not be able to obtain the product without significant cost and delay. The loss of a significant third-party supplier or the inability of a third-party supplier to meet performance and quality specifications or delivery schedules could harm our ability to meet our delivery obligations to our customers and negatively impact our revenues and business operations.
 
Our suppliers may place us on raw material allocation in the event that there are limited supplies of the raw materials that we use in our products.

Our contract manufacturers may place us on an allocation due to limited availability of raw materials.   In this event, the supplier could elect to allocate raw materials and manufacturing capacity to others and reduce deliveries to us to our detriment.  We cannot guarantee that the actions of our suppliers will not cause disruptions in our operations that could harm our ability to meet our delivery obligations to our customers or increase our cost of sales.

We may engage in acquisitions or strategic transactions or make investments that could result in significant changes or management disruption and fail to enhance stockholder value.

From time to time, we may engage in acquisitions or strategic transactions or make investments with the goal of maximizing stockholder value.  We may acquire businesses; enter into joint ventures or other strategic transactions and purchase equity and debt securities, including minority interests in publicly-traded and private companies, non-investment-grade debt securities, equity and debt mutual and exchange-traded funds, and corporate bonds/notes.  Some of our strategic investments may entail a high degree of risk and will not become liquid until more than one year from the date of investment, if at all. Our acquisitions or strategic investments (either those we have completed or may undertake in the future) may not generate financial returns or result in increased adoption or continued use of our technologies. In addition, our other investments may not generate financial returns or may result in losses due to market volatility, the general level of interest rates and inflation expectations. In some cases, we may be required to consolidate or record our share of the earnings or losses of those companies. Our share of any losses will adversely affect our financial results until we exit from or reduce our exposure to these investments.  Achieving the anticipated benefits of acquisitions depends in part upon our ability to integrate the acquired businesses in an efficient and effective manner. The integration of companies that have previously operated independently may result in significant challenges, and we may be unable to accomplish the integration smoothly or successfully.  We cannot assure you that the integration of acquired businesses with our business will result in the realization of the full benefits anticipated by us to result from the acquisition. We may not derive any commercial value from the acquired technology, products and intellectual property or from future technologies and products based on the acquired technology and/or intellectual property, and we may be subject to liabilities that are not covered by indemnification protection we may obtain.

If we are unable to manage future expansion effectively, our business, operations and financial condition may suffer significantly, resulting in decreased productivity.

If our products prove to be commercially valuable, it is likely that we will experience a rapid growth phase that could place a significant strain on our managerial, administrative, technical, operational and financial resources.  Our organization, procedures and management may not be adequate to fully support the expansion of our operations or the efficient execution of our business strategy.  If we are unable to manage future expansion effectively, our business, operations and financial condition may suffer significantly, resulting in decreased productivity.
 
 
 
9

 
 
We are subject to the risks of conducting business outside the United States.
 
A significant part of our strategy involves our continued pursuit of growth opportunities in a number of international market locations. We market, sell and service our products internationally.  We expect to continue to expand our international sales operations and to sell products in additional countries and locations. This expansion will require significant management attention and financial resources to successfully develop direct and indirect international sales and support channels, and we cannot assure you that we will be successful or that our expenditures in this effort will not exceed the amount of any resulting revenues. If we are not able to maintain or increase international market demand for our products and technologies, we may not be able to maintain a desired rate of growth in our business. We believe that the wireless markets in China and India, among others, represent growth opportunities for us. If wireless operators in China or India, or the governments of China or India, make technology deployment or other decisions that result in actions that are adverse to the expansion of our technologies, our business could be harmed.  We are subject to risks in certain global markets in which wireless operators provide subsidies on wireless device sales to their customers. Increases in device prices that negatively impact device sales can result from changes in regulatory policies related to device subsidies.
 
Our earnings are subject to substantial quarterly and annual fluctuations and to market downturns.
 
Our revenues and earnings may fluctuate significantly in the future.  General economic or other political conditions may cause a downturn in the market for our products or technology.  A future downturn in the market for our products or technology could adversely affect our operating results and increase the risk of substantial quarterly and annual fluctuations in our earnings.  Any prolonged credit crisis or currency crisis may result in the insolvency of key suppliers resulting in product delays; delays in reporting and/or payments from our distributors; the inability of our customers to obtain credit to finance purchases of our products; customer insolvencies that impact our customers’ ability to pay us and cause our customers to change delivery schedules, cancel committed purchase orders or reduce purchase order commitment projections; uncertainty in global economies, which could impact demand for our  products in various regions; counterparty failures negatively impacting our treasury operations; and the inability to utilize federal and/or state capital loss carryovers.  Our future operating results may be affected by many factors, including, but not limited to: our ability to retain existing or secure anticipated customers, both domestically and internationally; our ability to develop, introduce and market new products and services on a timely basis; management of inventory by us and our customers and their customers in response to shifts in market demand; changes in the mix of products developed, produced and sold; seasonal customer demand; and disputes with our customers.  These factors affecting our future earnings are difficult to forecast and could harm our quarterly and/or annual operating results.
 
Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses.

Changing laws, regulations and standards relating to corporate governance and public disclosure may create uncertainty regarding compliance matters. New or changed laws, regulations and standards are subject to varying interpretations in many cases. As a result, their application in practice may evolve over time. We are committed to maintaining high standards of corporate governance and public disclosure. Complying with evolving interpretations of new or changed legal requirements may cause us to incur higher costs as we revise current practices, policies and procedures, and may divert management time and attention from revenue generating to compliance activities. If our efforts to comply with new or changed laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, our reputation might also be harmed.
 
Risks Relating to Our Industry
 
Government regulation and policies of industry standards bodies may adversely affect our business.

Our products are subject to various regulations, including Federal Communications Commission (FCC) regulations in the United States and other international regulations, as well as the specifications of national, regional and international standards bodies. Changes in the regulation of our activities, including changes in the allocation of available spectrum by the United States government and other governments, or exclusion or limitation of our technology or products by a government or standards body, could have a material adverse effect on our business, operating results, liquidity and financial position.

 
10

 
 
If wireless devices pose safety risks, we may be subject to new regulations, and demand for our products may decrease.

Concerns over the effects of radio frequency emissions, even if unfounded, may have the effect of discouraging the use of wireless devices, which may decrease demand for our products and those of our customers. In recent years, the FCC and foreign regulatory agencies have updated the guidelines and methods they use for evaluating radio frequency emissions from radio equipment, including wireless phones and other wireless devices. In addition, interest groups have requested that the FCC investigate claims that wireless communications technologies pose health concerns and cause interference with airbags, hearing aids and medical devices. Concerns have also been expressed over the possibility of safety risks due to a lack of attention associated with the use of wireless devices while driving. Any legislation that may be adopted in response to these expressions of concern could reduce demand for our products and those of our customers in the United States as well as foreign countries.
 

Global economic conditions that impact the wireless communications industry could negatively affect our revenues and operating results.
 
A future decline in global economic conditions could have adverse, wide-ranging effects on demand for our products and for the products of our customers.  We cannot predict other negative events that may have adverse effects on the economy, on demand for wireless device products or on wireless device inventories and wireless operators.  Inflation and/or deflation and economic recessions that adversely affect the global economy and capital markets also adversely affect our customers and our end consumers. For example, our customers’ ability to purchase or pay for our products and services, obtain financing and upgrade wireless networks could be adversely affected, leading to cancellation or delay of orders for our products.  Also, our end consumers’ standards of living could be lowered, and their ability to purchase wireless devices based on our technology could be diminished.  Inflation could also increase our costs of raw materials and operating expenses and harm our business in other ways, and deflation could reduce our revenues if product prices fall. Any of these results from worsening global economic conditions could negatively affect our revenues and operating results.  Because we intend to continue to make significant investments in research and development and to maintain extensive ongoing customer service and support capability, any decline in the rate of growth of our revenues will have a significant adverse impact on our operating results.
 
Risks Relating to our Organization and our Common Stock
 
As a result of the Merger, AirTouch, Inc. became a subsidiary of ours and since we are subject to the reporting requirements of federal securities laws, this can be expensive and may divert resources from other projects, thus impairing its ability to grow.
 
As a result of the Merger, AirTouch, Inc., formerly known as Waxess USA, became a subsidiary of ours and, accordingly, is subject to the information and reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and other federal securities laws, including compliance with the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).  The costs of preparing and filing annual and quarterly reports, proxy statements and other information with the Securities and Exchange Commission (SEC) (including reporting of the Merger) and furnishing audited reports to stockholders will cause our expenses to be higher than they would have been if AirTouch, Inc. had remained privately held and did not consummate the Merger.
 
It may be time consuming, difficult and costly for us to develop and implement the internal controls and reporting procedures required by the Sarbanes-Oxley Act.  We will need to hire additional financial reporting, internal controls and other finance personnel in order to develop and implement appropriate internal controls and reporting procedures.  If we are unable to maintain effective disclosure controls and procedures, and internal control over financial reporting, investor confidence and our stock price could be adversely affected.
 
 
 
11

 
 
If we fail to establish and maintain an effective system of internal control, we may not be able to report our financial results accurately or to prevent fraud.  Any inability to report and file our financial results accurately and timely could harm our reputation and adversely impact the trading price of our common stock.
 
Effective internal control is necessary for us to provide reliable financial reports and prevent fraud.  If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be harmed.  As a result, our small size and potential internal control deficiencies may adversely affect our financial condition, results of operation and access to capital.  We have not performed an in-depth analysis to determine if historical un-discovered failures of internal controls exist, and may in the future discover areas of our internal control that need improvement.
 
Public company compliance may make it more difficult to attract and retain officers and directors.
 
The Sarbanes-Oxley Act and new rules subsequently implemented by the SEC have required changes in corporate governance practices of public companies.  As a public company, we expect these new rules and regulations to increase our compliance costs in 2011 and beyond and to make certain activities more time consuming and costly.  As a public company, we also expect that these new rules and regulations may make it more difficult and expensive for us to obtain director and officer liability insurance in the future and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.  As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers.
 
Because we became public with a reverse merger, we may not be able to attract the attention of major brokerage firms.
 
There may be risks associated with our becoming public through a “reverse merger.”  Securities analysts of major brokerage firms may not provide coverage of us since there is no incentive to brokerage firms to recommend the purchase of our common Stock.  No assurance can be given that brokerage firms will, in the future, want to conduct any secondary offerings on behalf of our post-Merger company.

Our stock price may be volatile.
 
The stock market in general, and the stock prices of technology-based and wireless communications companies in particular, have experienced volatility that often has been unrelated to the operating performance of any specific public company.  The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following:
 
 
changes in our industry;
     
 
competitive pricing pressures;
     
 
our ability to obtain working capital financing;
     
 
additions or departures of key personnel;
     
 
limited "public float" in the hands of a small number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market price for our common stock;
     
 
sales of our common stock (particularly following effectiveness of the resale registration statement of which this prospectus forms a part);
     
 
our ability to execute our business plan;
     
 
operating results that fall below expectations;
 
 
 
12

 
 
     
 
loss of any strategic relationship;
     
 
regulatory developments;
     
 
economic and other external factors;
     
 
period-to-period fluctuations in our financial results; and
     
 
inability to develop or acquire new or needed technology.
 
In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.
 
We have not paid dividends in the past and do not expect to pay dividends in the future.  Any return on investment may be limited to the value of our common stock.
 
We have never paid cash dividends on our common stock and do not anticipate doing so in the foreseeable future.  The payment of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting us at such time as our board of directors may consider relevant.  If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if our stock price appreciates.
 
There is currently no liquid trading market for our common stock and we cannot ensure that one will ever develop or be sustained.
 
To date there has been no liquid trading market for our common stock.  We cannot predict how liquid the market for our common stock might become.  Our common stock is quoted for trading on the OTC Bulletin Board, however, and as soon as is practicable we anticipate applying for listing of our common stock on either the NYSE Amex, The Nasdaq Capital Market or other national securities exchange, assuming that we can satisfy the initial listing standards for such exchange.  We currently do not satisfy the initial listing standards, and cannot ensure that we will be able to satisfy such listing standards or that our common stock will be accepted for listing on any such exchange.  Should we fail to satisfy the initial listing standards of such exchanges, or our common stock is otherwise rejected for listing and remain quoted on the OTC Bulletin Board or suspended from the OTC Bulletin Board, the trading price of our common stock could suffer and the trading market for our common stock may be less liquid and our common stock price may be subject to increased volatility.
 
Furthermore, for companies whose securities are traded in the OTC Bulletin Board, it is more difficult (1) to obtain accurate quotations, (2) to obtain coverage for significant news events because major wire services generally do not publish press releases about such companies, and (3) to obtain needed capital.
 
Our common stock is currently deemed a “penny stock,” which makes it more difficult for our investors to sell their shares.
 
Our common stock is subject to the “penny stock” rules adopted under Section 15(g) of the Exchange Act.  The penny stock rules generally apply to companies whose common stock is not listed on The Nasdaq Stock Market or other national securities exchange and trades at less than $1.00 per share, other than companies that have had average revenue of at least $6,000,000 for the last three years or that have tangible net worth of at least $5,000,000 ($2,000,000 if the company has been operating for three or more years).  These rules require, among other things, that brokers who trade penny stock to persons other than “established customers” complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances.  Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited.  If we remain subject to the penny stock rules for any significant period, it could have an adverse effect on the market, if any, for our securities.  If our securities are subject to the penny stock rules, investors will find it more difficult to dispose of our securities.

 
13

 
 
Offers or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline.
 
If our stockholders sell substantial amounts of our common stock in the public market upon the expiration of any statutory holding period, under Rule 144, or issued upon the exercise of outstanding options or warrants, it could create a circumstance commonly referred to as an “overhang” and in anticipation of which the market price of our common stock could fall.  The existence of an overhang, whether or not sales have occurred or are occurring, also could make more difficult our ability to raise additional financing through the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate. 
 
Exercise of options and warrants may have a dilutive effect on our common stock.
 
If the price per share of our common stock at the time of exercise of any warrants, options or any other convertible securities is in excess of the various exercise or conversion prices of such convertible securities, exercise or conversion of such convertible securities would have a dilutive effect on our common stock.  As of November 15, 2011 , we had (i) outstanding warrants to purchase 13,485,666 shares of our common stock; and (ii) 1,708,196 options to purchase shares of our common stock at an exercise price of $2.00 per share.  Further, any additional financing that we secure may require the granting of rights, preferences or privileges senior to those of our common stock and which result in additional dilution of the existing ownership interests of our common stockholders.
 
Investor relations activities, nominal “float” and supply and demand factors may affect the price of our common stock.
 
We expect to utilize various techniques such as non-deal road shows and investor relations campaigns in order to create investor awareness for our company.  These campaigns may include personal, video and telephone conferences with investors and prospective investors in which our business practices are described.  We may provide compensation to investor relations firms and pay for newsletters, websites, mailings and email campaigns that are produced by third-parties based upon publicly-available information concerning us.  We will not be responsible for the content of analyst reports and other writings and communications by investor relations firms not authored by us or from publicly available information.  We do not intend to review or approve the content of such analysts’ reports or other materials based upon analysts’ own research or methods.  Investor relations firms should generally disclose when they are compensated for their efforts, but whether such disclosure is made or complete is not under our control.  Our investors may be willing, from time to time, to encourage investor awareness through similar activities.  Investor awareness activities may also be suspended or discontinued which may impact the trading market of our common stock.
 
The SEC and Financial Industry Regulatory Authority (FINRA) enforce various statutes and regulations intended to prevent manipulative or deceptive devices in connection with the purchase or sale of any security and carefully scrutinize trading patterns and company news and other communications for false or misleading information, particularly in cases where the hallmarks of “pump and dump” activities may exist, such as rapid share price increases or decreases.  We and our shareholders may be subjected to enhanced regulatory scrutiny due to the small number of holders who initially will own the registered shares of our common stock publicly available for resale, and the limited trading markets in which such shares may be offered or sold which have often been associated with improper activities concerning penny-stocks, such as the OTC Bulletin Board or the OTCQB Marketplace (Pink OTC) or pink sheets.  The Supreme Court has stated that manipulative action is a term of art connoting intentional or willful conduct designed to deceive or defraud investors by controlling or artificially affecting the price of securities.  Often times, manipulation is associated by regulators with forces that upset the supply and demand factors that would normally determine trading prices.  Some of our outstanding common stock will initially be available for trading, held by a limited number of individuals or entities.  Accordingly, the supply of common stock for sale will be extremely limited for an indeterminate amount of time, which could result in higher bids, asks or sales prices than would otherwise exist.  Securities regulators have often cited thinly-traded markets, small numbers of holders, and awareness campaigns as components of their claims of price manipulation and other violations of law when combined with manipulative trading, such as wash sales, matched orders or other manipulative trading timed to coincide with false or touting press releases.  There can be no assurance that our or third-parties’ activities, or the small number of potential sellers or small percentage of stock in the “float,” or determinations by purchasers or holders as to when or under what circumstances or at what prices they may be willing to buy or sell stock, will not artificially impact (or would be claimed by regulators to have affected) the normal supply and demand factors that determine the price of stock.
 
 
14

 
 
Because our directors and executive officers are among our largest stockholders, they can exert significant control over our business and affairs and have actual or potential interests that may depart from those of subscribers in the Offering.
 
Our directors and executive officers own or control a significant percentage of the common stock following the Merger. Additionally, the holdings of our directors and executive officers may increase in the future upon vesting or other maturation of exercise rights under any of the options or warrants they may hold or in the future be granted or if they otherwise acquire additional shares of our common stock. The interests of such persons may differ from the interests of our other stockholders. As a result, in addition to their board seats and offices, such persons will have significant influence over and control all corporate actions requiring stockholder approval, irrespective of how the Company’s other stockholders may vote, including the following actions:
 
·
 to elect or defeat the election of our directors;
 
·
 to amend or prevent amendment of our Certificate of Incorporation or By-laws;
 
·
 to effect or prevent a merger, sale of assets or other corporate transaction; and
 
·
 to control the outcome of any other matter submitted to our stockholders for vote.
 
Such persons’ stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of the Company, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.
 
Our certificate of incorporation allows for our board to create new series of preferred stock without further approval by our stockholders, which could adversely affect the rights of the holders of our common stock.
 
Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our board of directors also has the authority to issue preferred stock without further stockholder approval. As a result, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock. In addition, our board of directors could authorize the issuance of a series of preferred stock that has greater voting power than our common stock or that is convertible into our common stock, which could decrease the relative voting power of our common stock or result in dilution to our existing stockholders.
 
Because our common stock is not registered under the Exchange Act, we will not be subject to the federal proxy rules and our directors, executive offices and 10% beneficial holders will not be subject to Section 16 of the Exchange Act. In addition, our reporting obligations under Section 15(d) of the Exchange Act may be suspended automatically if we have fewer than 300 shareholders of record on the first day of our fiscal year.
 
Our common stock is not registered under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), and we do not intend to register our common stock under the Exchange Act for the foreseeable future (provided that, we will register our common stock under the Exchange Act if we have, after the last day of our fiscal year, more than 500 shareholders of record, in accordance with Section 12(g) of the Exchange Act, or if our common stock becomes listed on a national securities exchange in accordance with Section 12(b) of the Exchange Act). As a result, as long as our common stock is not registered under the Exchange Act, we will not be subject to Section 14 of the Exchange Act, which, among other things, prohibits companies that have securities registered under the Exchange Act from soliciting proxies or consents from shareholders without furnishing to shareholders and filing with the Securities and Exchange Commission (“SEC”) a proxy statement and form of proxy complying with the proxy rules. In addition, so long as our common stock is not registered under the Exchange Act, our directors and executive officers and beneficial holders of 10% or more of our outstanding common stock will not be subject to Section 16 of the Exchange Act. Section 16(a) of the Exchange Act requires executive officers and directors, and persons who beneficially own more than 10% of a registered class of equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of common shares and other equity securities, on Forms 3, 4 and 5 respectively. Such information about our directors, executive officers, and beneficial holders will only be available through this registration statement and any other registration statement and periodic reports we file hereafter.  Furthermore, so long as our common stock is not registered under the Exchange Act, our obligation to file reports under Section 15(d) of the Exchange Act will be automatically suspended if, on the first day of any fiscal year (other than a fiscal year in which a registration statement under the Securities Act has gone effective), we have fewer than 300 shareholders of record. This suspension is automatic and does not require any filing with the SEC. In such an event, we may cease providing periodic reports and current or periodic information, including operational and financial information, may not be available with respect to our results of operations.
 
 
15

 
 
USE OF PROCEEDS
 
The selling stockholders will receive all of the proceeds from the sale of the shares offered by them under this prospectus. We will not receive any proceeds from the sale of the shares by the selling stockholders covered by this prospectus.
 
 MARKET FOR OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS
 
Our common stock is quoted on the OTC Bulletin Board under the symbol “ATCH.OB.”  There has been minimal trading to date in our common stock. As of November 15, 2011 , there were approximately 252 holders of record of our common stock.
 
Equity Compensation Plan Information

As of December 31, 2010, we did not have any equity compensation plan.
 

 DIVIDEND POLICY
 
We have not previously paid any cash dividends on our common stock and do not anticipate or contemplate paying dividends on our common stock in the foreseeable future.  We currently intend to use all our available funds to develop our business.  We can give no assurances that we will ever have excess funds available to pay dividends.
 
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
The following discussion and analysis should be read in conjunction with our 2009 and 2010 audited and 2011 interim unaudited condensed consolidated financial statements and related notes included in this prospectus.  This prospectus contains “forward-looking statements”.  The statements contained in this prospectus that are not historic in nature, particularly those that utilize terminology such as “may,” “will,” “should,” “expects,” “anticipates,” “estimates,” “believes,” or “plans” or comparable terminology are forward-looking statements based on current expectations and assumptions.  Various risks and uncertainties could cause actual results to differ materially from those expressed in forward-looking statements.
 
The forward-looking events discussed in this prospectus, the documents to which we refer you and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us.  For these statements, we claim the protection of the “bespeaks caution” doctrine.  All forward-looking statements in this document are based on information currently available to us as of the date of this prospectus, and, except as may be required under applicable securities laws, we assume no obligation to update any forward-looking statements.  Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.

Company History

AirTouch Communications, Inc. (“we” or, the “Company”) was incorporated as a Delaware corporation on April 2, 2007 for the purpose of developing a wholesale and distribution business that specializes in providing French and California sourced wines to the Chinese market.  The Company has exited the wine business and is now exclusively designing and developing wireless communications devices.  On February 3, 2011, we amended and restated our certificate of incorporation in order to, among other things, change our name to Waxess Holdings, Inc. and increase our authorized capital stock to 125,000,000 shares of which 100,000,000 are designated as common stock and 25,000,000 are designated as “blank check” preferred stock. On July 21, 2011, we amended our certificate of incorporation to change our name to AirTouch Communications, Inc.

 
16

 
 
On February 4, 2011, we entered into an Agreement of Merger and Plan of Reorganization (the “Merger Agreement”) with AirTouch, Inc., formerly known as Waxess USA, Inc., a privately held California corporation, and Waxess Acquisition Corp., our newly formed, wholly-owned Delaware subsidiary. Upon closing of the transaction contemplated under the Merger Agreement (the “Merger”), Waxess Acquisition Corp. merged with and into AirTouch, Inc., and AirTouch, Inc., as the surviving corporation, became a wholly-owned subsidiary of the Company.

AirTouch, Inc. began operations in 2004, and was incorporated in California in 2008.  AirTouch, Inc. is engaged in the development and marketing of phone terminals capable of converging traditional landline, cellular and data services based on its patent portfolio.  The business was started by a group of former Uniden executives that observed the migration of landline subscribers to cellular and determined that the migration would continue and create a need for home cellular cordless phones. AirTouch, Inc. currently offers its DM1000 (cell@home) product through various channels, including several of the major U.S. carriers, and is working to bring its higher performance, lower cost next generation HomeConnex series of products, UFO series of products and  Focal Point product lines to market.  To date, AirTouch, Inc. has not generated material revenues or earnings as a result of its activities.  As a result of the Merger, AirTouch, Inc. became a wholly-owned subsidiary of the Company and the Company succeeded to the business of AirTouch, Inc. as its sole line of business.
 
Overview
 
We are a technology firm, located in Newport Beach, CA, that was incorporated in 2008 and develops and markets phone terminals capable of converging traditional landline, cellular and data services based on its patent portfolio.  AirTouch, Inc. currently offers its DM1000 (cell@home) product through various channels, including several of the major U.S. carriers, and is working to bring its higher performance, lower cost next generation UFO, HomeconneX and Focal Point products to the market.
 
 Results of Operations

Comparison of Nine Months Ended September 30 , 2011 To September 30 , 2010

Net revenues for the nine months ended September 30, 2011 were approximately $477,000, compared with $143,000 for the nine months ended September 30, 2010.  The increase of $334,000 was the result of the development and certification of the CDMA version of the Company’s first generation product.
 
Gross profit as a percentage of sales during the nine months ended September 30, 2011 was 25.7%, compared to 6.8% for the nine months ended September 30, 2010.  The Company incurred higher than normal production and freight costs in the prior period in an effort to bring the product to market.
 
Operating expenses for the nine months ended September 30, 2011 were approximately $3,707,000, compared to $2,587,000 for the nine months ended September 30, 2010.  The increase of $1,120,000 or 43.3% was primarily due to an approximate $725,000 increase in research and development costs associated with the Company’s next generation product (X1500) and its derivative products, and an increase of approximately $395,000 in selling, general and administrative expenses, resulting from an increase in labor costs as staffing levels increased.    
 
Other expenses, net for the nine months ended September 30, 2011 were approximately $2,986,000, compared to $166,000 for the nine months ended September 30, 2010. The $2,820,000 increase was primarily attributable to $1,176,000 in noncash adjustments to the fair value of stock options and warrants issued; a $500,000 increase in interest expense primarily attributable to the convertible notes; a $120,000 increase in interest expenses to bridge notes; a $293,000 noncash charge to other expenses related to the issuance of common stock for not filing the registration statement by an agreed upon date; an $85,975 noncash charge to stock compensation expense for stock issued in connection with capital raising efforts; and a $227,000 gain on the cancellation of notes during the nine months ended September 30, 2010 that did not occur in the current period.
 
The resulting net loss for the nine months ended September 30, 2011 was approximately $6,650,000, compared with a loss of approximately $2,743,000 for the nine months ended September 30, 2010, an increase in net loss of $3,907,000 or 149%.

 
17

 
 
Comparison of Three Months Ended September 30 , 2011 To September 30 , 2010
 
Net revenues for the three months ended September 30, 2011 were $0, compared with $139,000 for the three months ended September 30, 2010.  The $139,000 decrease was the result of the Company’s efforts to focus on the development and certification of its next generation products and manage the inventory of its first generation products.
 
Gross profit as a percentage of sales during the three months ended September 30, 2011 was 0.0%, compared to 5.7% for the three months ended September 30, 2010.  The decrease was attributable to no revenue during the quarter.
 
Operating expenses for the three months ended September 30, 2011 were approximately $1,687,000, compared to $749,000 for the three months ended September 30, 2010.  The increase of $939,000 or 125.3% was primarily due to an increase in research and development costs of approximately $425,000 for the Company’s next generation products and an increase of approximately $513,000 in selling, general and administrative expenses.  The increase in Selling, general and administrative expenses was primarily driven by an increase of approximately $211,000 in labor costs resulting from staffing increases; an increase of approximately $62,000 in travel expenses primarily associated with the sale of equity; an increase of approximately $94,000 primarily due to investment relations, public relations, filing fees and other public company costs.
 
Other expenses, net for the three months ended September 30, 2011 were approximately $541,000 compared to approximately $38,000 for the three months ended September 30, 2010. The $503,000 or 1,300% increase is primarily due to an increase in financing costs associated with the sale of the Company's stock; a $293,000 noncash charge to other expenses related to the issuance of common stock for not filing the registration statement by an agreed upon date; and an $85,975 noncash charge to stock compensation expense for stock issued in connection with capital raising efforts.
 
The resulting net loss for the three months ended September 30, 2011 was $2,328,000, compared with a loss of $779,000 for the three months ended September 30, 2010, an increase in net loss of $1,549,000 or 198%.
 
Liquidity and Capital Resources

As of September 30, 2011, cash was $5,914,380, an increase of $5,713,080 from December 31, 2010.  For the nine months ended September 30, 2011, cash from operations decreased approximately $5,537,000.  The decrease was primarily due to operating losses offset by an increase in the noncash adjustment in connection with the valuation of the warrants issued.  During the nine months ended September 30, 2011, the Company sold convertible notes of varying denominations, which resulted in proceeds totaling $2,471,428.  During the nine months ended September 30, 2011 the Company sold 6,385,288 shares of common stock for $11,018,081.  These proceeds were used to fund the development and commercialization of our second generation product and its derivative products.  As of September 30, 2011 the Company invested $2,030,020 in certificates of deposit.
 
  Year Ended December 31, 2010 Compared to the Year Ended December 31, 2009
 
 
Net revenues for the year ended December 31, 2010 were $160,441, compared to $147,661 for the year ended December 31, 2009.  The increase of $12,780 or 8.0% was primarily due to the certification of the CDMA version of the Company’s first generation product.
 
Gross  profit as a percentage of sales during the year ended December 31, 2010 was negative 104%, compared to 21% for the year ended December 31, 2009.  The decrease was primarily due to $151,745 in product returns from two customers for software reprogramming.  The product was reprogrammed and is currently being resold.  The Company also incurred higher than normal charges from air shipping product from China to meet customer shipping requirements.
 
 
18

 
 
Operating expenses for the year ended December 31, 2010 were $3,966,509, compared to $993,356 for the year ended December 31, 2009.  The increase of $2,973,153 or 299% was primarily due to an increase in research and development spending as the Company commenced development of its second generation product, the DM1500, increased labor costs associated with new hires, and costs attributable to the Merger and the associated fundraising activities including  travel, placement agent fees, legal and accounting.   The resulting net loss for the year ended December 31, 2010 was $4,850,375 compared to a net loss of $1,025,951 for the year ended December 31, 2009, an increase in loss of $3,824,424 or 373%.
 
                Liquidity and Capital Resources
 
As of December 31, 2010, cash was $201,299, an increase of $164,794 from December 31, 2009.  For the year ended December 31, 2010, cash from operations decreased $4,072,676.  The decrease was primarily due to operating losses and an increase in inventory levels.  During the year ended December 31, 2010, we sold convertible notes of varying denominations, which resulted in proceeds totaling $3,035,000.  During the year ended December 31, 2010 we sold 774,557 shares of common stock for $1,400,056.  These proceeds were used to fund the development and commercialization of our first and second generation products.  In July 2010, we retired a note payable to the chief executive officer for $120,000.
 
Off-Balance Sheet Arrangements
 
Since our inception, except for standard operating leases, we have not engaged in any off-balance sheet arrangements, including the use of structured finance or special purpose entities.
 
Critical Accounting Policies and Estimates
 
Those material accounting policies that we believe are the most critical to an investor’s understanding of our financial results and condition are discussed below.
 
      Revenue Recognition.    We derive revenue from sale of wireless communication devices.   Revenue is recognized at the time of shipment; however, the timing of revenue recognition and the amount of revenue actually recognized depends upon a variety of factors, including the specific terms of each arrangement and the nature of our deliverables and obligations. Determination of the appropriate amount of revenue recognized involves judgments and estimates that we believe are reasonable, but actual results may differ from our estimates. We record reductions to revenue for customer incentive programs and other volume-related rebate programs.
     
      Valuation of Intangible Assets.      The determination of the value of our intangible assets, primarily patent costs, requires management to make estimates and assumptions that affect our financial statements.  Valuation techniques consistent with the market approach, income approach and/or cost approach are used to measure fair value.  An estimate of fair value can be affected by many assumptions which require significant judgment.  Our estimate of the fair value of certain assets may differ materially from that determined by others who use different assumptions or utilize different business models.  New information may arise in the future that affects our fair value estimates and could result in adjustments to our estimates in the future, which could have an adverse impact on our results of operations.
 
We assess potential impairments to intangible assets when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Our judgments regarding the existence of impairment indicators and future cash flows related to intangible assets are based on operational performance of our businesses, market conditions and other factors. Although there are inherent uncertainties in this assessment process, the estimates and assumptions we use, including estimates of future cash flows, volumes, market penetration and discount rates, are consistent with our internal planning. If these estimates or   their related assumptions change in the future, we may be required to record an impairment charge on all or a portion of our intangible assets.
 
 
19

 
 
       Share-Based Compensation.     Share-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period. We generally estimate the value of stock option awards using a lattice binomial option-pricing model.  Accordingly, the fair value of an option award as determined using an option-pricing model is affected by our stock price on the date of grant as well as assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, our expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rates and expected dividends. For purposes of estimating the fair value of stock options, we used the implied volatility of market-traded options in our stock for the expected volatility assumption input to the binomial model. The assumption inputs related to employee exercise behavior include estimates of the post-vest forfeiture rate and suboptimal exercise factors, which are based on historical experience. In addition, judgment is required in estimating the amount of share-based awards that are expected to be forfeited. We estimate the forfeiture rate based on historical experience. To the extent our actual forfeiture rate is different from our estimate; share-based compensation expense is adjusted accordingly.
 
      Income Taxes.     The Company periodically evaluates the likelihood of the realization of deferred tax assets, and adjusts the carrying amount of the deferred tax assets by a valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not.  The Company considers many factors when assessing the likelihood of future realization of our deferred tax assets, including recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carry-forward periods available to us for tax reporting purposes, and other relevant factors.  At December 31, 2010, based on the weight of available evidence, including cumulative losses in recent years and expectations of future taxable income, the Company determined that it was more likely than not that its deferred tax assets would not be realized.  Accordingly, the Company has recorded a valuation allowance equivalent to 100% of its cumulative deferred tax assets.  Future changes in uncertain tax positions are not expected to have an impact on the effective tax rate due to the existence of the valuation allowance.  The Company will continue to classify income tax penalties and interest, if any, as part of interest and other expenses in its statements of operations. The Company has incurred no interest or penalties as of December 31, 2010.
 
Recently Issued Accounting Pronouncements
 
Accounting standards promulgated by the FASB change periodically. Changes in such standards may have an impact on the Company’s future financial statements. For the Company’s analysis and impact of these accounting standards please see Note 2: Summary of Significant Accounting Policies in our December 31, 2010 and 2009 financial statements.
 
BUSINESS
 
Overview
 
We are a technology firm, located in Newport Beach, CA, that develops and markets communication devices capable of amplifying the wireless signal as a core enabling technology platform and converging them with other services and applications for consumers based on our patent portfolio.  We currently offer our DM1000 (cell@home) product through various channels, including several of the major U.S. carriers, and are working to bring our higher performance, lower cost next generation HomeConnex series of products, UFO series of products and Focal Point to   the global market.
 
Our Industry
 
Consumers Migrate to Mobile
 
The U.S. market is in the midst of a migration from landline to wireless communications.  Landline consumers are migrating to other communication services including mobile, cable and voice over internet protocol (VoIP).  However, many of the current residential landline subscribers reside in areas with limited cellular coverage.  We believe that these subscribers are potential customers. Until the landlines are no longer utilized, we believe our products offer these customers a cost effective way to seamlessly migrate from landline services to wireless services.  Our products converge landline and cellular technology on the same hardware and future products will work with technologies currently being developed, including WiMax, Wi-Fi mesh networks, and LTE 4G network.  The transition to wireless in the U.S. is increasing at a rapid pace driving primarily by lower cost alternatives.  The average cost to add a cellular line to an existing cellular plan is as little as $10 per month compared to $40 to $70 per month for a landline plan.
 
 
20

 
 
Health Concerns
 
While many users migrate to wireless for the lower cost, a continuing concern is the potential health problems that may arise from the prolonged proximity of microwave emitting devices (cell phones) to the user’s head.   Our handsets transmit at only 50mW, substantially less than a mobile phone.
 
Signal Strength

As a result of the health concerns discussed above, the FCC has restricted the signal strength that cellular phones can transmit to 300mW to 400mW, with a Specified Area Radiation (SAR) allowance of 1.6W/kg.  The combination of the two has resulted in a deterioration of cell phone signal quality in home and office buildings.  We believe the primary reason customers switch to different carrier is signal conditions within the home and office environment.  Our products have the cellular module built into the base, which allows the base unit to transmit at 2W, or roughly five times more power than is allowed by cellular phones.  At the same time, there is a 6dB to 10dB increase in reception quality through the use of our antennae system.  The combination of higher transmission power in the base unit and increased reception sensitivity can result in as much as ten times the power of a mobile cellular phone.
 
Carriers Push to Increase ARPU
 
The competition for wireless subscribers has led to price decreases in voice services, which has driven carriers to seek ways to increase Average Revenue Per User (ARPU). The move from landline to wireless has increased wireless customers.   Wireless carriers are also interested in increasing the usage of higher priced data plans, which allows subscribers to use mobile phones to complement or supplement their home computer.  We offer products that can access the internet (data capable) using the cellular network enabling customers to replace both their home phone and “wired or cabled” internet service.
 
Vertical Market
 
While the significant penetration of mobile handsets among the U.S. population allows people to call people, we believe there is remains a need for people to call places. Machine to machine (M2M) markets,  mobile home, RV’s, retail chains, coffee shops, summer homes, kiosks in the shopping malls,  school dormitories, are just a few of the examples of the need to call places not just an individual.  We intend to pursue these markets.

Call Origination is Not Mobile
 
We believe that although cellular phones are frequently called “mobile” phones, most calls are originated in either the home or place of business.  We also believe that most data usage or accessing the internet on a mobile device takes place at home or place of business.  Unfortunately, because of the structural interference, the home and places of business frequently have poor signal quality.  Our products are designed specifically to overcome this hurdle.

Wireless Local Loop
 
Our products can be used as a Fixed Wireless Terminal (FWT) in international markets and as a voice and data solution for the Wireless Local Loop (WLL) market. The WLL is the last mile solution (going from wires on the street into the home) for communications, using wireless transmissions in lieu of building an expensive copper infrastructure. WLL differs from traditional cell phones in that it is used in a fixed point, which allows the terminal to use a directional antenna instead of an omni-directional antenna required to roam. The directional antenna allows significantly improved voice quality and data transmission with the only tradeoff being the lack of roaming capability.  A 2008 report by the Global Industry Analysts called for the WLL market to reach $7 billion globally, with Asia growing the fastest, through 2015 at nearly 20% annually. Sales of FWT units are expected to reach 250 million units annually worldwide. Because most emerging countries have experienced a build out of wireless infrastructure, they are as prepared for the deployment of wireless devices if not more so than most developed countries.  Therefore, there will be global markets demanding wireless terminal products.
 
 
21

 
 
Our Products
 
DM1000 (cell@home series)

For cellular customers seeking a solution to poor voice quality for in-building calls at work and at home, we have developed our first home cellular cordless telephone, the Dual Mode Communication Terminal (D mode CT) or DM1000, which is sold under the cell@home brand name. The phone has a conventional cordless telephone look with multiple handsets but includes an embedded wireless module built into the base for connecting to the cellular network.  It also has a RJ11 jack for conventional landline service thereby enabling the user to have a one or two-line phone. The modules enable the DM1000 to be the first terminal that can be manually switched between cellular (GSM and CDMA networks) and landline services. The increased signal strength of the terminal is due to the powerful transmission from the base unit.   Yet the handset is transmitting at only 50mW resulting in substantially reduced potential health risks compared to other cellular devices.   We believe the powerful signal strength coupled with substantially reduced health risk will provide customers a compelling alternative to landline and broadband communication solutions.
 
X1500 (New voice and data all in one Dual Mode HomeConnex series)

Our second generation terminal, the X1500, will offer more integrated features than the DM1000. The terminal will duplicate all cellular phone features, including data/internet access and other application services.  The X1500 offers Subscriber Line Interface Circuitry (SLIC) that supports up to 4 corded or cordless telephones.  The X1500 has been certified on the Verizon Wireless network and the Company plans to seek certification with other major wireless carriers. We anticipate that the product will be market ready by the fourth quarter of 2011.

X500 (competitive 2G HomeConnex series for voice only solution for international WLL markets)
 
The X500 is a more compact version of the DM100.  It is a cordless phone with a unique design that can support either GSM or CDMA 2G wireless systems.  The X500 is currently in development.  We anticipate its introduction in the first half of 2012.
 
UFO series of products, U250, U300 and U600. (Wi-Fi bridge station with AirTouch pending bridging technology)

The U250 is a non-Wi-Fi bridging station that we have designed specifically for a customer in Mexico.  This product allows any Wi-Fi enabled mobile phone to act as a cordless extension to the landline service at home.  This allows the user to take advantage of the features of both their cellular mobile phone and their landline in their home.  For instance, the user can access the contact information in their mobile phone and make the call through their landline.  The U300 is similar to the U250 with the Wi-Fi built-in, rather than simply using a Wi-Fi enabled mobile phone.  The U600 comes with a 3G module and its amplified signals will “boost” the signal of a Wi-Fi enabled mobile phone in the home or office that would otherwise be too weak to connect to the wireless service.  However, unlike other similar solutions, our products do not require a broadband or high speed internet connection.  The U250 is currently being tested by certain customers for use.  The U300 and U600 are in development.  We anticipate their introduction during the first half of 2012.

X2000 Smart Phone (Advanced HomeConnex product including a smart handset)

The X2000 is a unique combination of all the technological advancements in our product line including the patented cordless telephone integration that made the signal amplification without health risk possible, wireless signals to other communication terminals within home/office, texting capability, conferencing capabilities with more than two communication services, and video chatting. The X2000 is currently in development.  We anticipate it will be market ready by the first quarter of 2012.

Focal Point

Focal Point is a high speed, multiple services access terminal with Wi-Fi technology that utilizes our patent pending wireless/VoIP data/voice bridge technology.  The terminal will converge all of the wireless products and services within a home, including appliances, televisions and security systems, and act as a data delivery hub to each wireless/cellular phone connected to it. The Focal Point is in the early stages of design and we anticipate it will be market ready by the second half of 2012.

 
22

 
 
Manufacturing

The products we sell are manufactured by two third-party manufacturers in Shenzhen, China.  We do not have long-term written agreements with the manufacturers and purchase products from them in accordance with the terms of purchase orders.
 
Customers

In the U.S., we offer our products to the dealer networks of Verizon Wireless (VW), Sprint, and AT&T.  The primary driver of our growth is expected to come from international sales to wireless carriers of our next generation models – the U250, U300, X500, X1500 and X2000. The success of these models outside US will be derived from the pent up demand for an easily deployed wireless access system for voice, data, and other applications and services that do not have adequate landline or terrestrial based infrastructure.
 
In July 2010, we entered into a Global Master Distribution and Services Agreement with Brightpoint, Inc. (“Brightpoint”), one of the largest providers of cellular product distribution and logistics services in the world.  This agreement grants Brightpoint an exclusive right to distribute AirTouch products globally subject to certain conditions.  The agreement also provides for Brightpoint to support AirTouch in the areas of logistics, financing and marketing. The agreement has an initial term of three years and renews automatically for successive one-year terms unless either party provides written of intent to renew at least 90 prior to such automatic renewal.
 
This agreement will assist in getting our products to market as well as provide solutions for inventory financing, logistics and reverse logistics.
 
In March 2009, the DM1000 received a certification from AT&T as part of their Choice Program.  The DM1000 is currently being evaluated for AT&T’s Demo Equipment Program (DEP), which would allow AT&T to offer this product to groups such as the Federal Emergency Management Agency (FEMA) for emergency response.
 
We applied for Verizon Wireless (VW) Open Development Certification Program (ODI) in March 2009 for our DM1000 and received certification.   
  
Our DM1000 received network certification by Sprint in March 2010.  We are now able to market our cell@home terminals to our customers as a co-branded product through the Sprint network.
 
In April 2009, we signed a three-year purchase agreement with Ibratele in Brazil.  This agreement grants Ibratele the exclusive right to market and sell our second generation products in Brazil subject to certain conditions.
 
The Chinese government has provided certain wireless carriers with large subsidies to provide communication services to Central and Western China.  The Chinese government has announced that it is phasing out the Personal Handyphone System (PHS) by 2011.  We believe that the HomeConnex line of products will be a viable replacement for the PHS used in the home.
 
Many African countries have limited landline infrastructure, which creates a high demand for battery backed wireless communication and data systems.  In November 2009, we entered into an agreement with a distributor in Ghana, pursuant to which the distributor agreed to use best efforts to sell our HomeConnex products.

Competition
 
Service

Since our enabling technology is wireless service it faces competition from alternative service providers including broadband solutions.  However, these alternative solutions require access to high speed internet.  In the U.S., only approximately 64% of households have access to high speed internet including  cable, DSL and ADSL ("Broadband Now! So Why Don't Some Use It?" New York Times, October 17, 2009).  The statistics in emerging markets will likely be substantially less than 60%.  Access to broadband requires a separate modem, router or Wi-Fi router and frequently requires installation service from professionals. The AirTouch products simply require power and a cellular signal.
 
 
23

 
 
Hardware

Femtocells use a broadband connection to create a small cellular base station that provides better indoor voice quality from mobile phones. The chief difference between femtocells and our products is that femtocells require a high speed broadband (internet) connection  and therefore we believe this type of solution will not reach approximately 36% of the U.S. population and substantially more of the emerging market population.
 
There are also accessory type products like a cordless telephone with Bluetooth linking capability to mobile phones.  This enables the voice from mobile service to be transferred through a Bluetooth connection to the cordless handsets.  This type of device has not been successful as it is not a net activation proposition for the wireless carriers and does not improve the signal for the mobile phone inside the home or office structure.   Bluetooth provides a short link and therefore the handset has to remain in close proximity to the base station.  Finally, audio quality of Bluetooth is inferior to the AirTouch products.

Some carriers have adopted a 2G fixed wireless product similar to the AirTouch product as a home communication solution but they are not fully integrated to the cordless phone like the AirTouch product.  The 1.9GHZ PCS spectrum has caused some interference with 1.9GHZ handsets (DECT 6.0 utilizes 1.9GHZ frequency) as they are not designed together like the AirTouch product and has caused inferior audio quality.
 
Signal Boosters are another alternative to enhancing the weak signal quality within the home and office structure.  However, these solutions have met with some resistance from the FCC.

Microcell, the term for a type of signal repeater within home, will only compliment our device in remote and rural areas similar to the way it will promote mobile phones.  These Microcells are less expensive than fully functional cellular towers.
  
Broadband

MagicJack - Broadband-based plug-in that allows traditional telephones to be connected to a computer with broadband service. The VoIP system costs $40, plus $20 per year for unlimited phone calls. They have over 6M users but they require 124kbps data bandwidth for their voice to work and there are many areas in USA where people use ADSL and DSL that cannot  accommodate this data rate on a constant basis. MagicJack also operates on VoIP so depending on the quality and speed of the internet connection, the voice can be adversely affected by that on its quality.
 
Mobile Broadband
 
Mobile broadband plans are available through all major cellular carriers, with the majority of the offerings being a USB plug-in or PC Card. The attachments provide mobile broadband to computers using each carrier’s 3G/4G networks. Each unit retails between $129.99 and $349.99, with most available to new subscribers at no cost to $99.99, with the signing of a two-year plan. The monthly charge for mobile broadband ranges from $39.99 to $59.99 for 5GB of monthly data. With the addition of a data plan on a mobile phone, broadband service can be used on a laptop or desktop computer at no additional charge and can be used wherever wireless service is available.  Most of the carriers as of July 2011 have ended their offer of unlimited data supply except for Sprint who has introduced a multi tier pricing based upon data capacity.

Government Regulation
 
Pursuant to its authority under the Communications Act of 1934, as amended (the “Communications Act”), the FCC regulates the licensing, construction, modification, operation, ownership, sale and interconnection of wireless communications systems, as do some state and local regulatory agencies. Congress also periodically revises or enacts laws affecting the telecommunications industry, as do state legislatures. Decisions by these bodies could have a significant impact on the competitive market structure among wireless providers and on the relationships between wireless providers and other carriers. These mandates may also impose significant financial, operational or service obligations on us and other wireless providers. We are unable to predict the scope, pace or financial impact of legal or policy changes that could be adopted in these proceedings.
 
 
24

 
 
Intellectual Property
 
We own or are applying for the following patents:
 
US Patent No./ Application No.
 
Issue Date / Application Date
 
Title
 
Description
6,766,175
 
Issued: 07/20/04
 
Cordless and Wireless Telephone Docking Station
 
This patent describes a method to combine wireless (cellular) telephone and a cordless telephone in one system without complex wiring or embedded into a larger system.
6,987,988
 
Issued: 01/17/06
 
Cordless and Wireless Telephone Interface and Switching Mode
 
A system that combines wireless (cellular) phone, cordless telephone and PSTN landline telephone system in one integrated system which allows connectivity to each system and how the electric switching is performed.
7,072,675
 
Issued: 07/04/06
 
Wireless System and Method for Multiple Handset Cordless Telephone System
 
This is a method outlined to combine a wireless (cellular) phone and a multiple handset cordless telephone system. This system receives voice and data from the wireless telephone. A control unit manages the interconnectivity of the TX/RX units and speakerphone. The TX/RX units communicate with multiple cordless handsets.
11/141.819
 
 
Filed: 06/01/05
 
Dual Mode Communication and Method
 
A full description of D mode CT products where cellular signal is received from wireless carrier and how it’s AT Commands for all functionality are transformed to a cordless telephone CPU to perform as a cellular cordless telephone. It also teaches how an automatic switching is done between PSTN and wireless service and how they are combined to perform as a full two line system.
11/234.297
 
Filed: 09/23/05
 
Cordless Telephone with Internet Connectivity
 
Describes how the paging function of a cordless telephone is used to transfer audio from an internet phone (such as Skype) from a PC to cordless telephone handsets and how dialing out and call receiving is performed on a cordless handset.
11/542.804
 
Filed: 10/04/06
 
Internet Telephone Bridge and its Method
 
Describes how voice and data from one service is transported in its full capacity to another service. This function enables (AirTouch) hardware to perform as a home relay device and thereby making cellular connection seamlessly transported to VoIP and vice versa. This bridging renders and cellular telephone and cellular coverage and extension of the subscribers VoIP service and subscribers
11/593.725
 
Filed: 11/07/06
 
Wireless, Cordless, Internet Telephone Method
 
Further details how cellular, VoIP and other methods of delivery are intertwined within hardware and how the traffic is performed among those services.
 
 
 
25

 
 
We also license the following patents from one of our shareholders; however, to date we have not incurred any costs resulting from this license:

US Patent No./ Application No.
 
Issue Date / Application Date
 
Title
 
Description
7,010,311
 
Issued: 03/07/06
 
Wireless Node Multiple Handset Cordless Telephone
 
A wireless and cordless telephone node system. The system includes a node with a wireless transceiver that communicates wireless signals with a wireless network and a cordless transceiver that communicates cordless signals with multiple cordless terminal units. A switch routes calls between the wireless network and the multiple cordless terminals. A variety of cordless terminals are provided that emulate conventional corded telephones, cordless telephones and wireless telephones. The wireless node is designed for both fixed and portable operation.
7,146,180
 
Issued: 12/05/06
 
Wireless Node Multiple Handset Cordless Telephone
 
A wireless and cordless telephone node system. The system includes a node with a wireless transceiver that communicates wireless signals with a wireless network, a cordless transceiver that communicates cordless signals with multiple cordless terminal units, and one or more landline interfaces that couple metallically with the PSTN. A switch routes calls between the landlines, wireless network and the multiple cordless terminals. A subscriber identity module and card interface is provided for control of wireless account user data. A variety of cordless terminals are provided that emulate conventional corded telephones, cordless telephones and wireless telephones. The wireless node is designed for both fixed and portable operation.
 
On July 12, 2011, the Company entered into an amended and restated license agreement, pursuant to which it was granted the exclusive right to use of the trademark “AirTouch” and associated designs.  At the end of the three years, the Company has the option to either extend the agreement for an additional three years or to purchase the trademarks covered under the agreement.
 
Research & Development
 
The Company owns a 49% interest in AirTouch Labs, Inc.  AirTouch Labs conducts research and development work for the Company and manages outside engineering firms on behalf of the Company.  The Company pays AirTouch Labs a monthly service fee plus an additional fee for achieving certain performance criteria, which are established for each project.

Properties
 
The Company leases 3,507 square feet of office space at 1401 Dove Street, Suite 330 , Newport Beach, CA  92660 for $6,979 per month.  The lease expires on October 31, 2014 .  The Company believes the facilities to be adequate for its needs in the near future.
 
Employees
 
As of November 15, 2011 , we employed approximately 12 US-based and 6 Japan-based full-time employees, none of whom are represented by labor unions. We believe that our relationship with our employees is satisfactory.
 
Legal Proceedings
 
We are not involved in any pending legal proceeding or litigations and, to the best of our knowledge, no governmental authority is contemplating any proceeding to which we are a party or to which any of our properties is subject, which would reasonably be likely to have a material adverse effect on the Company.
 
 
 
26

 

MANAGEMENT
 
The following persons became our executive officers and directors on February 4, 2011, upon effectiveness of the Merger, and hold the positions set forth opposite their respective names.
 
Name
 
Age
 
Position
Hideyuki Kanakubo
 
51
 
President, Chief Executive Officer and Director
Jerome Kaiser
 
51
 
Vice President, Chief Financial Officer and Secretary
Larry Paulson
 
57
 
Chairman of the Board of Directors
James Canton
  59  
Director
J. Steven Roush
  64  
Director

Our directors hold office until the earlier of their death, resignation or removal or until their successors have been qualified.
 
There are no family relationships between any of our directors and our executive officers.
 
Hideyuki Kanakubo – President, Chief Executive Officer and Director.   Mr. Kanakubo has been President, Chief Executive Officer and a director of the Company since the Merger.  Mr. Kanakubo has been President, Chief Executive Officer and a Director of AirTouch, Inc. since it was incorporated in February 2008.  Since its founding in August 2004, he has been the Chief Executive Officer of Waxess Inc.,  From1983 to 2000 he served in various capacities at Uniden, including Division Chief in the Satellite Division, VP of Uniden America, and President of Uniden USA and Uniden Financial, Inc.,  and managing director of Uniden Japan. From 2000 to 2002, he created a joint venture between Uniden and Memorex after he left Uniden.    This entity received a purchase order  but when the manufacturer in Korea failed to timely deliver the product and then sued the company, the company elected to file Chapter 7 bankruptcy due to lack of working capital. Mr. Kanakubo’s experience as President and Chief Executive Officer of AirTouch, Inc. qualify him to be a director of the Company.

Jerome Kaiser – Chief Financial Officer and Secretary.   Mr. Kaiser has been the Chief Financial Officer and Secretary of the Company since the Merger.  Since March 2010, he has served as the Chief Financial Officer and Secretary of AirTouch, Inc.  From March 2006 until July 2009, he served as the Executive Vice President, Chief Financial Officer and Corporate Secretary of ORYXE Energy International, a clean energy company.  From January 2005 until February 2006, he served as a Vice President and Group Finance Director of Liz Claiborne, Inc. (NYSE: LIZ). Prior to 2005, Mr. Kaiser served in various financial management positions with Meguiar’s, Inc., a manufacturer and marketer of car care products; Mikasa, Inc., a publicly traded wholesaler of fine tableware; and Ultramar, Inc., a publicly traded refiner and marketer of integrated oil products.  Mr. Kaiser began his career in public accounting at PriceWaterhouse.  He is a certified public accountant and is a member of the California State Society of Certified Public Accountants and the American Institute of Certified Public Accountants.   Following his departure from ORYXE Energy International, the board of directors elected to assign the assets of ORYXE Energy International to a newly created company, ORYXE International.  ORYXE Energy International subsequently filed for bankruptcy.

Larry Paulson – Chairman of the Board of Directors.   Mr. Paulson has been the Chairman of our Board of Directors since the date of the Merger.  Since January 1, 2011, Mr. Paulson has served as Executive Vice President and Chief Marketing Officer of Brightpoint, Inc. (NASDAQ: CELL), a global leader in providing supply chain solutions to leading stakeholders in the wireless industry.  He has been working closely with Brightpoint since June 2010 as Senior Strategic Development Advisor, where he also served as a member of the Global Executive Team and led critical initiatives in strategic planning, development and investments, and product portfolio and service expansion. From 1997 until November 2010, Mr. Paulson served as Senior Vice President and General Manager of the Nokia CDMA Business Unit and also served as President of Technophone Corporation, a Nokia owned subsidiary, president of Nokia Product Corporation, another Nokia owned subsidiary, and Vice President of Americas Business Development. Mr. Paulson’s business management experience and knowledge qualify him to be a director of the Company.
 
 
27

 
 
Dr. James Canton – Director. Dr. Canton has been a member of our Board of Directors since the date of the Merger. Dr. Canton has served as the Chairman and Chief Executive Officer of the Institute for Global Futures, a leading think tank that he founded in 1990. He advises Global Fortune 1000 companies, including: IBM, BP, Intel, Philips, General Electric, Hewlett Packard, Boeing, FedEx, and Proctor & Gamble. Dr. Canton is a former executive director of the Health Policy Council. He served on the advisory board of MIT’s Media Lab Europe. He is a senior fellow at the Kellogg School of Management Center for Research in Innovation. He serves on the Corporate Eco-Forum Advisory Board. He served as co-chairman of the Futures and Forecasting Track for NASA and has advised three White House administrations. Dr. Canton was also a business and strategic planning executive at Apple Computer. Mr. Canton’s business management and consulting experience and knowledge qualify him to be a director of the Company.

J. Steven Roush – Director.   Mr. Roush has been a member of our Board of Directors since the date of the Merger.  He was with PricewaterhouseCoopers, LLP for 39 years, 30 of those as a partner. He served as an office managing partner, an SEC review partner for 20 years, and a risk management partner. Over his career, Mr. Roush has experience in a diverse number of industries ranging from manufacturing, non-profits and retail, with a concentration in real estate and pharmaceuticals. He has a background in dealing with both private and public company boards of directors. Mr. Roush’s financial and accounting and knowledge and experience qualify him to be a director of the Company.
 
Employment Agreements and Compensation
 
The Company intends to enter into employment agreements with Hideyuki Kanakubo and Jerome Kaiser in the near future.  The terms of such agreements are still being discussed.
 
Involvement in Certain Legal Proceedings
     
Except as set forth in the director and officer biographies above, to the Company’s knowledge, during the past ten (10) years, none of the Company’s directors, executive officers, promoters, control persons, or nominees has been:
 
·  
the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
·  
convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
·  
subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
·  
found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law.

Directors’ and Officers’ Liability Insurance
 
The Company has obtained directors’ and officers’ liability insurance insuring its directors and officers against liability for acts or omissions in their capacities as directors or officers, subject to certain exclusions.  Such insurance also insures us against losses which we may incur in indemnifying our officers and directors.  In addition, the Company may enter into indemnification agreements with key officers and directors and such persons shall also have indemnification rights under applicable laws, and the Company’s Certificate of Incorporation and Bylaws.

Board Independence
 
We currently have four directors serving on our Board of Directors, Mr. Kanakubo, Mr. Paulson, Dr. Canton and Mr. Roush.  We are not a listed issuer and, as such, are not subject to any director independence standards.  Using the definition of independence set forth under the Nasdaq Marketplace Rules, Messrs. Paulson and Roush and Dr. Canton would be considered independent directors of the Company.
 
 
28

 
 
Board Leadership Structure and Role in Risk Oversight
 
We have not adopted a formal policy on whether the Chairman and Chief Executive Officer positions should be separate or combined. Mr. Kanakubo has served as our Chief Executive Officer and Mr. Paulson has served as our Chairman since the Merger.
 
Our Audit Committee , consisting of Larry Paulson, James Canton, and J. Steven Roush, is primarily responsible for overseeing our risk management processes on behalf of our board of directors.  The Audit Committee receives and reviews periodic reports from management, auditors, legal counsel, and others, as considered appropriate regarding our company’s assessment of risks. In addition, the Audit Committee reports regularly to the full Board of Directors, which also considers our risk profile. The Audit Committee and the full Board of Directors focus on the most significant risks facing our company and our company’s general risk management strategy, and also ensure that risks undertaken by our Company are consistent with the Board’s appetite for risk. While the Board oversees our company’s risk management, management is responsible for day-to-day risk management processes. We believe this division of responsibilities is the most effective approach for addressing the risks facing our company and that our Board leadership structure supports this approach.
 
 
EXECUTIVE COMPENSATION
 
Summary Compensation Table
 
The table below sets forth, for the last two fiscal years, the compensation earned by AirTouch, Inc.’s chief executive officer and chief financial officer.  No other executive officer had annual compensation in excess of $100,000 during the last fiscal year. No officer of AirTouch Communications, Inc. received compensation during the years ended December 31, 2010 and 2009.
 
 
Name and Principal Position
Year
Salary
($)
Bonus
($)
Option
Awards
($)
All Other
Compensation
($)
Total
($)
Hideyuki Kanakubo
President and Chief Executive Officer
2009
103,849
0
0
0
103,849
 
2010
225,000
0
0
0
225,000
Jerome Kaiser (1)
Chief Financial Officer and Secretary
2010
158,329
0
0
0
158,329
 
(1)  
Mr. Kaiser was appointed the Chief Financial Officer of AirTouch, Inc. on March 15, 2010

Outstanding Equity Awards at Fiscal Year-End
 
There were no outstanding equity awards issued to our named executive officers as of December 31, 2010.

Director Compensation
 
AirTouch, Inc. and AirTouch Communications, Inc. did not have compensation arrangements for members of its Board of Directors. The Company has entered into agreements with each of its independent directors that set forth, among other things, the compensation to be paid to such director.
 
Pursuant to the terms of his agreement, Larry Paulson shall serve as a director for a two-year period or until his removal (with cause) or resignation, and he shall receive (i) an annual cash fee of $36,000, payable quarterly, so long as he is still a member of the Board of Directors on the payment date; and (ii) options to purchase 451,754 shares of common stock, vesting in eight (8) equal quarterly installments.
 
 
29

 
 
Pursuant to the terms of his agreement, Dr. James Canton shall serve as a director until his resignation or removal, and he shall receive (i) an annual cash fee of $3,500, payable quarterly, so long as he is still a member of the Board of Directors on the payment date; and (ii) options to purchase 100,000 shares of common stock, vesting in eight (8) equal quarterly installments.
 
Pursuant to the terms of his agreement, J. Steven Roush shall serve as a director until his resignation or removal, and he shall receive (i) an annual cash fee of $3,500, payable quarterly, so long as he is still a member of the Board of Directors on the payment date; and (ii) options to purchase 100,000 shares of common stock, vesting in eight (8) equal quarterly installments.

Stock Incentive Plan
 
The Company has adopted a stock incentive plan, pursuant to which 1,500,000 shares of the Company’s common stock will be reserved for issuance to employees, directors, consultants, and other service providers.  For the first twelve (12) months following the closing of the Merger, the Company may not issue options to purchase shares of its common stock at a per share exercise price less than $2.00, unless the non-employee independent directors of the Company determine that it is in the best interests of the Company to terminate such restrictions at an earlier date.
 
Risk Management
 
The Company does not believe risks arising from its compensation policies and practices for its employees are reasonably likely to have a material adverse effect on the Company.
 
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
Except as described below, during the past three years, there have been no transactions, whether directly or indirectly, between the Company and any of its officers, directors or their family members, that exceeded $120,000.
 
During the period of September 2006 to February 2007, Hideyuki Kanakubo, our President and Chief Executive Officer, and his wife loaned an aggregate of $140,000 to AirTouch, Inc.  As of March 31, 2010 the Kanakubo's converted such amounts into 118,106 shares of our common stock.
 
During the period of June 2006 to July 2006, SKCC Inc., a corporation owned by Hideyuki Kanakubo and his wife, loaned an aggregate of $147,500 to AirTouch, Inc.  As of March 31, 2010 SKCC Inc. converted such amounts into 356,957 shares of our common stock.
 
During the period of December 2006 to January 2008, Hideyuki Kanakubo agreed to defer his salary from AirTouch, Inc. in the aggregate amount of $182,000.  As of March 31, 2010 Mr. Kanakubo agreed to forgive such amount.
 
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
The following tables set forth certain information as of November 15, 2011 regarding the beneficial ownership of our common stock, by (i) each person or entity who, to our knowledge, owns more than 5% of our common stock; (ii) our executive officers named in the Summary Compensation Table below; (iii) each director; and (iv) all of our executive officers and directors as a group. Unless otherwise indicated in the footnotes to the following table, each person named in the table has sole voting and investment power and that person’s address is c/o AirTouch Communications, Inc., 1401 Dove Street, Suite 220, Newport Beach, CA 92660.  Shares of common stock subject to options, warrants, or other rights currently exercisable or exercisable within 60 days of November 15, 2011 , are deemed to be beneficially owned and outstanding for computing the share ownership and percentage of the stockholder holding such options, warrants or other rights, but are not deemed outstanding for computing the percentage of any other stockholder.

 
30

 

Name of Beneficial Owner
 
Number of Shares Beneficially Owned
 
Percentage Beneficially
Owned (1)
5% Owners
   
Brightpoint, Inc. (2)
4,656,991
20.3%
SKCC Inc.
1,087,228
5.6%
Jessica Lu
1,013,135
5.2%
Frank K. Liu (3)
1,198,832
6.2%
Executive Officers and Directors :
   
Hideyuki Kanakubo (4)
1,858,143
9.6%
Jerome Kaiser (5)
130,024
*
Larry Paulson (6)
112,939
*
Dr. James Canton (6)
25,000
*
J. Steve Roush (7)
37,500
*
All executive officers and directors as a group (five persons)
2,163,606
11.0%
 
(1)  
Based on 19,379,569 shares of our common stock issued and outstanding as of November 15, 2011 .

(2)  
Includes 3,593,407 shares of common stock underlying warrants with an exercise price of $3.00.
 
(3)  
Includes 599,416 shares of common stock held by Clear Creek Holdings LP of which Mr. Liu has voting and dispositive power.
 
(4)  
Includes 1,087,228 shares of common stock held by SKCC, Inc. of which Mr. Kanakubo has voting and dispositive power.
 
(5)  
Represents shares of common stock issuable upon exercise of stock options with an exercise price of $2.00.

(6)  
Represents shares of common stock issuable upon exercise of options with an exercise price of $2.00 per share.
   
(7)  
Includes 25,000 shares of common stock issuable upon exercise of options with an exercise price of $2.00 per share.
 

 
31

 
 
SELLING STOCKHOLDERS
 
Up to 20,417,754 shares of common stock are being offered by this prospectus, all of which are being registered for sale for the accounts of the selling security holder and consist of:
 

·
2,753,214 shares of our common stock issued to investors in the Private Placement;
 
·
1,007,491 shares of our common stock underlying the warrants issued to investors in the Private Placement;
 
·
2,045,000 shares of our common stock underlying the Replacement Warrants;
 
·
6,000,000 shares of our common stock issued to investors pursuant to the Subscription Agreements;
 
·
6,000,000 shares of our common stock underlying the warrants issued to investors pursuant to the Subscription Agreements;
 
·
540,000 shares of our common stock underlying the Placement Agent Warrants;
 
·
540,000 shares of our common stock underlying the warrants underlying the Placement Agent Warrants; and
 
·
1,532,049 Warrant Exchange Shares
 
The transactions by which the selling stockholders acquired their securities from us were exempt under the registration provisions of the Securities Act.
 
The shares of common stock referred to above are being registered to permit public sales of the shares, and the selling stockholders may offer the shares for resale from time to time pursuant to this prospectus. The selling stockholder may also sell, transfer or otherwise dispose of all or a portion of their shares in transactions exempt from the registration requirements of the Securities Act or pursuant to another effective registration statement covering those shares. We may from time to time include additional selling stockholders in supplements or amendments to this prospectus.
 
The table below sets forth certain information regarding the selling stockholders and the shares of our common stock offered by them in this prospectus. The selling stockholders have had no material relationship with us within the past three years other than as described in the footnotes to the table below or as a result of their acquisition of our shares or other securities. To our knowledge, subject to the community property laws where applicable, each person named in the table has sole voting and investment power with respect to the shares of common stock set forth opposite such person’s name.
 
 
32

 
 
Beneficial ownership is determined in accordance with the rules of the SEC. The selling stockholder’s percentage of ownership of our outstanding shares in the table below is based upon 19,379,569 shares of common stock outstanding as of November 15, 2011 .

   
Ownership Before Offering
 
   
After Offering (1)
 
 
Selling Stockholder
 
 
Common Stock Beneficially Owned
 
   
Number of Shares Offered
 
   
Number of Shares of Common Stock Beneficially Owned
 
   
Percentage of Common Stock Beneficially Owned
 
 
Avi Dayan
 
    52,638       51,088 (2)     1,550       *  
Steve Rikli
 
    52,572       51,022 (3)     1,550       *  
Edward Kowlowitz
 
    716,645       702,695 (4)     13,950       *  
Sandor Capital
 
    860,901       836,101 (5)     24,800       *  
Technocel
 
    525,760       510,260 (6)     15,500       *  
London Family Trust
 
    210,269       204,069 (7)     6,200       *  
JSL Kids Partners
 
    108,348       105,248 (8)     3,100       *  
Cagan Capital, LLC
 
    425,542       419,342 (9)     6,200       *  
Nobuyuki Igarashi
 
    208,046       204,946 (10)     3,100       *  
John Lemak IRA  Rollover Morgan Keegan & Co., Inc. custodian
 
    106,478       103,378 (11)     3,100       *  
Silvio M. Silvi and Joseph Vitiello
 
    25,638       24,863 (12)     775       *  
Jeff and Jamie Foster
 
    104,810       103,260 (13)     1,550       *  
Azah Borham
 
    35,775       34,690 (14)     1,085       *  
Jay Skelton
 
    50,724       49,174 (15)     1,550       *  
John Coughlin
 
    51,769       50,994 (16)     775       *  
Micha Mottale
 
    250,548       242,798 (17)     7,750       *  
Sherman Capital Group
 
    100,094       96,994 (18)     3,100       *  
Annemarie Locher
 
    51,453       50,678 (19)     775       *  
MBK Capital
 
    49,922       48,372 (20)     1,550       *  
 
 
33

 
 
Omnia in Bonum Pty Ltd ATF Omnia In Bonum Trust
 
    205,756       202,656 (21)     3,100       *  
Malcolm Jennings
 
    74,831       72,506 (22)     2,325       *  
Joseph H. Milbank, Sr.
 
    51,371       50,596 (23)     775       *  
J. Steven Roush
 
    50,973       50,198 (24)     775       *  
Pauline and Hector Chea
 
    12,422       12,034 (25)     388       *  
Tony Tang
 
    1,515,042       1,484,042 (26)     31,000       *  
Yoshimi Asano
 
    40,768       40,148 (27)     620       *  
Luc Verelst
 
    1,019,198       1,003,698 (28)     15,500       *  
RHG Koppelman
 
    25,396       24,621 (29)     775       *  
Hans Bernard Visser
 
    25,396       24,621 (29)     775       *  
Brian Dettmann
 
    84,247       82,697 (30)     1,550       *  
William Musser
 
    101,838       100,288 (31)     1,550       *  
John Bishop
 
    50,919       50,144 (32)     775       *  
Robert Kalkoene
 
    50,693       49,143 (33)     1,550       *  
Young Family Trust
 
    50,891       50,116 (34)     775       *  
Mei Shiu Tang
 
    101,834       100,274 (35)     1,550       *  
Ron Bass
 
    50,000 (36)     50,000 (36)     0       0 %
Terry and Denise Alternburg
 
    25,000 (37)     25,000 (37)     0       0 %
Brendon Ayanbadejo
 
    250,000 (37)     250,000 (37)     0       0 %
Nigel Francis Burrow Living Trust U/A  4/1/2008
 
    35,000 (37)     35,000 (37)     0       0 %
Mark Butt
 
    200,000 (37)     200,000 (37)     0       0 %
Virginia Cahal
 
    300,000 (37)     300,000 (37)     0       0 %
Kevin Charos
 
    62,500 (37)     62,500 (37)     0       0 %
Paul Anthony Chimzar
 
    25,000 (37)     25,000 (37)     0       0 %
                                 
Ryan Chimzar, UTMA (Paul Chimzar, Custodian)
 
    25,000 (37)     25,000 (37)     0       0 %
 
 
34

 
 
John Peter Christensen
 
    250,000 (37)     250,000 (37)     0       0 %
Kerston Coombs
 
    12,500 (37)     12,500 (37)     0       0 %
Frank R. Deis and Donna R. Deis, JTWROS
 
    25,000 (37)     25,000 (37)     0       0 %
Rita & Arthur Dunkin
 
    75,000 (37)     75,000 (37)     0       0 %
Drew J. Erato
 
    50,000 (37)     50,000 (37)     0       0 %
Steven Etra
 
    450,000 (37)     450,000 (37)     0       0 %
Stanley Foster-Rooke
 
    150,000 (37)     150,000 (37)     0       0 %
Edward J. Galto
 
    25,000 (37)     25,000 (37)     0       0 %
Steven Gersten
 
    50,000 (37)     50,000 (37)     0       0 %
Walter W. and Karin H. Gloyer Trust
 
    37,500 (37)     37,500 (37)     0       0 %
Subhach C. Gulati
 
    50,000 (37)     50,000 (37)     0       0 %
Ryan Hogan
 
    250,000 (37)     250,000 (37)     0       0 %
George Kafkarkou
 
    50,000 (37)     50,000 (37)     0       0 %
Paul Knowlson
 
    25,000 (37)     25,000 (37)     0       0 %
Bengt Elvir Ling
 
    400,000 (37)     400,000 (37)     0       0 %
John D. Marks
 
    60,000 (37)     60,000 (37)     0       0 %
Michael McManus
 
    50,000 (37)     50,000 (37)     0       0 %
Michael and James Narutowicz, JTWROS
 
    25,000 (37)     25,000 (37)     0       0 %
W.P. O'Reilly & Associates, LTD (39)
 
    300,000 (37)     300,000 (37)     0       0 %
Niamh O'Reilly
 
    425,000 (37)     425,000 (37)     0       0 %
Philip E. Rosensweig
 
    25,000 (37)     25,000 (37)     0       0 %
Steven Mitchell Sack
 
    150,000 (37)     150,000 (37)     0       0 %
Steven Mitchell Sack Trustee, Steven Mitchell Sack PSP
 
    425,000 (37)     425,000 (37)     0       0 %
Samax Family Limited Partnership
 
    250,000 (37)     250,000 (37)     0       0 %
John J. Shaw
 
    350,000 (37)     350,000 (37)     0       0 %
 
 
35

 
 
Brian Christopher Weible
 
    25,000 (37)     25,000 (37)     0       0 %
Martha Zeh
 
    25,000 (37)     25,000 (37)     0       0 %
John M. Alessandro, Jr., IRA
 
    25,000 (37)     25,000 (37)     0       0 %
Valerio G. Ausenda
 
    12,500 (37)     12,500 (37)     0       0 %
James E. Blanchard
 
    100,000 (37)     100,000 (37)     0       0 %
William Bohlken and Kathy Lynn Adams, JTWROS
 
    50,000 (37)     50,000 (37)     0       0 %
Elizabeth Mary Sealy Burrow Living Trust
 
    31,250 (37)     31,250 (37)     0       0 %
Francis and Jeffrey Chan, JTWROS
 
    15,000 (37)     15,000 (37)     0       0 %
Ronnie O. Craft
 
    200,000 (37)     200,000 (37)     0       0 %
Karen T. DeLeon and Ovidi Deleon, JTWROS
 
    12,500 (37)     12,500 (37)     0       0 %
Lauren DeLeon Revocable Trust
 
    12,500 (37)     12.500 (37)     0       0 %
Delta Securities, Ltd.
 
    80,000 (37)     80,000 (37)     0       0 %
Denton Business, Inc.
 
    90,000 (37)     90,000 (37)     0       0 %
Ivy Stewart Duggan, Jr.
 
    30,000 (37)     30,000 (37)     0       0 %
Allison Dwan, IRA
 
    50,000 (37)     50,000 (37)     0       0 %
Steve Elsey
 
    225,000 (37)     225,000 (37)     0       0 %
Evan D. Frankel
 
    25,000 (37)     25,000 (37)     0       0 %
Frederick Reese Freyer
 
    25,000 (37)     25,000 (37)     0       0 %
Brian and Connie Goodman, JTWROS
 
    50,000 (37)     50,000 (37)     0       0 %
John R. B. Gould
 
    50,000 (37)     50,000 (37)     0       0 %
Earl Harper
 
    25,000 (37)     25,000 (37)     0       0 %
Robert Henely
 
    25,000 (37)     25,000 (37)     0       0 %
Brian R. Hersh
 
    12,500 (37)     12,500 (37)     0       0 %
Joe A. Holle
 
    125,000 (37)     125,000 (37)     0       0 %
Ehud and Carl Hubner, JTWROS
 
    25,000 (37)     25,000 (37)     0       0 %
 
 
36

 
 
Daniel A. Hudson, IRA
 
    75,000 (37)     75,000 (37)     0       0 %
George Kelsey and Taffeta Kelsy, JTWROS
 
    50,000 (37)     50,000 (37)     0       0 %
Stephen J. Leppo
 
    75,000 (37)     75,000 (37)     0       0 %
Craig Lindberg
 
    25,000 (37)     25,000 (37)     0       0 %
Gilbert Ludwig, IRA
 
    50,000 (37)     50,000 (37)     0       0 %
Dr. Carl Eric Mayer Revocable Trust
 
    37,500 (37)     37,500 (37)     0       0 %
Connie Walker McComb, IRA
 
    50,000 (37)     50,000 (37)     0       0 %
Randy W. Meeks
 
    25,000 (37)     25,000 (37)     0       0 %
Christopher Millard
 
    25,000 (37)     25,000 (37)     0       0 %
James Anthony Narutowicz, Jr. IRA
 
    25,000 (37)     25,000 (37)     0       0 %
Michael Narutowicz, IRA
 
    25,000 (37)     25,000 (37)     0       0 %
The Pat O’Reilly Private Pension Trust
 
    100,000 (37)     100,000 (37)     0       0 %
James E. Raz Revocable Living Trust U/A 6/6/2001
 
    100,000 (37)     100,000 (37)     0       0 %
Philip E. Rozenweig P/Adm Financial Advisors Network Inc. 401K Plan
 
    25,000 (37)     25,000 (37)     0       0 %
Harry A. Sax Living Trust
 
    25,000 (37)     25,000 (37)     0       0 %
Eduardo and Maria Soto, JTWROS
 
    110,000 (37)     110,000 (37)     0       0 %
Gerald Sperling Grantor Retained Annuity Trust UA 2/2/98
 
    112,000 (37)     112,000 (37)     0       0 %
Gerald and Seena Sperling, JTWROS
 
    250,000 (37)     250,000 (37)     0       0 %
F. Richard Stark
 
    50,000 (37)     50,000 (37)     0       0 %
Martin Richard Stephenson
 
    50,000 (37)     50,000 (37)     0       0 %
 
 
37

 
 
Andrew Turrisi, IRA
 
    75,000 (37)     75,000 (37)     0       0 %
Cheryl Williams
 
    12,500 (37)     12,500 (37)     0       0 %
Robert Zelin
 
    12,500 (37)     12,500 (37)     0       0 %
Robert Bennett Sr. and Robert Bennett Jr.
 
    25,000 (37)     25,000 (37)     0       0 %
Edith Lee Bingle
 
    25,000 (37)     25,000 (37)     0       0 %
Jerome Louis Boschi
 
    25,000 (37)     25,000 (37)     0       0 %
Neil Bourdelaise, IRA
 
    40,000 (37)     40,000 (37)     0       0 %
C. E. Brechin, IRA
 
    57,000 (37)     57,000 (37)     0       0 %
Pamela Corson, IRA
 
    25,000 (37)     25,000 (37)     0       0 %
Charles and Sandra Curtis, JTWROS
 
    50,000 (37)     50,000 (37)     0       0 %
Barry Davis, IRA
 
    100,000 (37)     100,000 (37)     0       0 %
Kim Davis
 
    25,000 (37)     25,000 (37)     0       0 %
Kim Davis, IRA
 
    50,000 (37)     50,000 (37)     0       0 %
Roderick de Greef
 
    50,000 (37)     50,000 (37)     0       0 %
Scott E. Douglass
 
    150,000 (37)     150,000 (37)     0       0 %
Gary Falkin and Arlene Falkin, JTWROS
 
    25,000 (37)     25,000 (37)     0       0 %
Larry M. Geaslin, IRA
 
    50,000 (37)     50,000 (37)     0       0 %
Keith Gerety
 
    50,000 (37)     50,000 (37)     0       0 %
Harvey Glicker Rev Trust U/A 07/07/11
 
    25,000 (37)     25,000 (37)     0       0 %
Constantine Hagepanos, IRA
 
    25,000 (37)     25,000 (37)     0       0 %
Stephen Holzel
 
    100,000 (37)     100,000 (37)     0       0 %
IVM Productions, Inc.
 
    75,000 (37)     75,000 (37)     0       0 %
Peter Kaplan, IRA
 
    80,000 (37)     80,000 (37)     0       0 %
Alessandro Lamon
 
    25,000 (37)     25,000 (37)     0       0 %
Richard A. McKee, IRA
 
    12,500 (37)     12,500 (37)     0       0 %
Fred Militello, IRA
 
    12,500 (37)     12,500 (37)     0       0 %
Alan B. Miller
 
    50,000 (37)     50,000 (37)     0       0 %
 
 
 
38

 
 
Steven M. Nelson
 
    37,500 (37)     37,500 (37)     0       0 %
Shane Pardis
 
    75,000 (37)     75,000 (37)     0       0 %
Jason Paulley, IRA
 
    50,000 (37)     50,000 (37)     0       0 %
Bradley Pollack
 
    25,000 (37)     25,000 (37)     0       0 %
Bruce Robinson
 
    125,000 (37)     125,000 (37)     0       0 %
Bruce Robinson, IRA
 
    175,000 (37)     175,000 (37)     0       0 %
Howard Roth, IRA
 
    50,000 (37)     50,000 (37)     0       0 %
PES Property Corp 401K Profit Sharing Plan
 
    75,000 (37)     75,000 (37)     0       0 %
Alana and Peter Sabesan, JTWROS
 
    25,000 (37)     25,000 (37)     0       0 %
Ronald Vogt
 
    25,000 (37)     25,000 (37)     0       0 %
John Weatherford, IRA
 
    96,000 (37)     96,000 (37)     0       0 %
Ann Weatherford, IRA
 
    25,000 (37)     25,000 (37)     0       0 %
Zens Family Trust U/A 7/23/11
 
    105,000 (37)     105,000 (37)     0       0 %
George A. Anderson
 
    12,500 (37)     12,500 (37)     0       0 %
John Baleno
 
    12,500 (37)     12,500 (37)     0       0 %
John Blum, Jr.
 
    28,000 (37)     28,000 (37)     0       0 %
Michael S. Brodherson
 
    150,000 (37)     150,000 (37)     0       0 %
Philip Brunker
 
    25,000 (37)     25,000 (37)     0       0 %
Cadence Investments III, LLLP (40)
 
    105,000 (37)     105,000 (37)     0       0 %
Eduardo Diaz, IRA
 
    20,000 (37)     20,000 (37)     0       0 %
Joseph DiSaverio, IRA
 
    60,000 (37)     60,000 (37)     0       0 %
Denis Robert Daun
 
    12,500 (37)     12,500 (37)     0       0 %
Michael Fitzgerald and Wendy Lee Fitzgerald, JTWROS
 
    12,500 (37)     12,500 (37)     0       0 %
Adalyn G. Frank, IRA
 
    12,500 (37)     12,500 (37)     0       0 %
William Joel Friedman
 
    12,000 (37)     12,000 (37)     0       0 %
Brian J. Gardinier
 
    25,000 (37)     25,000 (37)     0       0 %
 
 
39

 
 
Frank J. Garofalo
 
    50,000 (37)     50,000 (37)     0       0 %
Thomas Joseph Graham
 
    12,500 (37)     12,500 (37)     0       0 %
James Guistolisi
 
    50,000 (37)     50,000 (37)     0       0 %
Gregory A. Harrison
 
    100,000 (37)     100,000 (37)     0       0 %
George Hervey-Bathurst
 
    50,000 (37)     50,000 (37)     0       0 %
Walter Hogan
 
    25,000 (37)     25,000 (37)     0       0 %
Francis Howard
 
    450,000 (37)     450,000 (37)     0       0 %
InferMark, LLC (41)
 
    12,500 (37)     12,500 (37)     0       0 %
J.G. King
 
    12,500 (37)     12,500 (37)     0       0 %
Mark Linfield
 
    50,000 (37)     50,000 (37)     0       0 %
Adam Linn
 
    25,000 (37)     25,000 (37)     0       0 %
James Martin Lynch
 
    25,000 (37)     25,000 (37)     0       0 %
Patrick Lynch and Zoe Pearl Lynch, JTWROS
 
    100,000 (37)     100,000 (37)     0       0 %
Robert W. Macwha
 
    12,500 (37)     12,500 (37)     0       0 %
Mary Louise Marcin
 
    12,500 (37)     12,500 (37)     0       0 %
Aaron McKenna
 
    20,000 (37)     20,000 (37)     0       0 %
Jeannette Militello, IRA
 
    12,500 (37)     12,500 (37)     0       0 %
Nextview Capital Fund, LP
 
    100,000 (37)     100,000 (37)     0       0 %
Robert J. Ondercik and Robert M. Ondercik, JTWROS
 
    32,500 (37)     32,500 (37)     0       0 %
Roy E. Reichbach and Melissa L. Reichbach, JTWROS
 
    50,000 (37)     50,000 (37)     0       0 %
John R. Rogers
 
    65,000 (37)     65,000 (37)     0       0 %
Paul Sallwasser and Terri Sallwasser, JTWROS
 
    25,000 (37)     25,000 (37)     0       0 %
Christopher Santos
 
    25,000 (37)     25,000 (37)     0       0 %
Stephen Schell
 
    250,000 (37)     250,000 (37)     0       0 %
George D. Shields, IRA
 
    62,500 (37)     62,500 (37)     0       0 %
 
 
40

 
 
SLMI Holdings, LLC
 
    50,000 (37)     50,000 (37)     0       0 %
Riley H. Smith
 
    20,000 (37)     20,000 (37)     0       0 %
Robert Stanger
 
    12,500 (37)     12,500 (37)     0       0 %
David Talesnickx
 
    25,000 (37)     25,000 (37)     0       0 %
Raymond G. Tinney 1995 Intervivos Trust U/A 6/21/95
 
    50,000 (37)     50,000 (37)     0       0 %
Joseph Thomas Watters, III
 
    15,000 (37)     15,000 (37)     0       0 %
Brandon Williams
 
    12,500 (37)     12,500 (37)     0       0 %
William Williams
 
    12,500 (37)     12,500 (37)     0       0 %
Jack Wright
 
    25,000 (37)     25,000 (37)     0       0 %
Jennifer Zhou
 
    6,250 (37)     6,250 (37)     0       0 %
Dawson James Securities, Inc.
 
    442,314 (38)     442,314 (38)     0       0 %
Albert Poliak
 
    90,000 (38)     90,000 (38)     0       0 %
Thom Hands
 
    90,000 (38)     90,000 (38)     0       0 %
Tom Curtis
 
    32,310 (38)     32,310 (38)     0       0 %
Bret Shapiro
 
    78,696 (38)     78,696 (38)     0       0 %
David Weinstein
 
    346,680 (38)     348,680 (38)     0       0 %
* Less than 1%. 

(1)
Represents the amount of shares that will be held by the selling stockholder after completion of this offering based on the assumptions that (a) all shares registered for sale by the registration statement of which this prospectus is part will be sold and (b) no other shares of our common stock are acquired or sold by the selling stockholders prior to completion of this offering. However, the selling stockholder may sell all, some or none of the shares offered pursuant to this prospectus and may sell other shares of our common stock that they may own pursuant to another registration statement under the Securities Act or sell some or all of their shares pursuant to an exemption from the registration provisions of the Securities Act, including under Rule 144. To our knowledge there are currently no agreements, arrangements or understanding with respect to the sale of any of the shares that may be held by the selling stockholder after completion of this offering or otherwise.
 
(2)
Represents (i) 27,760 shares of common stock issued in the Private Placement and (ii) 23,328 Warrant Exchange Shares
 
(3)
Represents (i) 27,709 shares of common stock issued in the Private Placement and (ii) 23,313 Warrant Exchange Shares.
 
(4)
Represents (i) 248,603 shares of common stock issued in the Private Placement, (ii) 124,301 shares of common stock underlying warrants issued in the Private Placement, (iii) 225,000 shares of common stock underlying Replacement Warrants, and (iv) 104,791 Warrant Exchange Shares.
 
 
41

 
(5)
Represents (i) 434,793 shares of common stock issued in the Private Placement and (ii) 401,308 Warrant Exchange Shares.
 
(6)
Represents (i) 277,123 shares of common stock issued in the Private Placement and (ii) 233,137 Warrant Exchange Shares.
 
(7)
Represents (i) 110,822 shares of common stock issued in the Private Placement and (ii) 93,247 Warrant Exchange Shares.
 
(8)
Represents (i) 54,904 shares of common stock issued in the Private Placement and (ii) 50,344 Warrant Exchange Shares.
 
(9)
Represents (i) 109,671 shares of common stock issued in the Private Placement, (ii) 109,671 shares of common stock underlying warrants issued in the Private Placement, and (iii) 200,000 shares of common stock underlying Replacement Warrants.
 
(10)
Represents (i) 52,473 shares of common stock issued in the Private Placement, (ii) 52,473 shares of common stock underlying warrants issued in the Private Placement, and (iii) 100,000 shares of common stock underlying Replacement Warrants.
 
(11)
Represents (i) 53,493 shares of common stock issued in the Private Placement and (ii) 49,885 Warrant Exchange Shares.
 
(12)
Represents (i) 13,356 shares of common stock issued in the Private Placement and (ii) 11,507 Warrant Exchange Shares
 
(13)
Represents (i) 26,630 shares of common stock issued in the Private Placement, (ii) 26,630 shares of common stock underlying warrants issued in the Private Placement, and (iii) 50,000 shares of common stock underlying Replacement Warrants.
 
(14)
Represents (i) 18,608 shares of common stock issued in the Private Placement and (ii) 16,082 Warrant Exchange Shares
 
(15)
Represents (i) 26,288 shares of common stock issued in the Private Placement, and (ii) 22,886 Warrant Exchange Shares.
 
(16)
Represents (i) 12,997 shares of common stock issued in the Private Placement, (ii) 12,997 shares of common stock underlying warrants issued in the Private Placement, and (iii) 25,000 shares of common stock underlying Replacement Warrants.
 
(17)
Represents (i) 129,075 shares of common stock issued in the Private Placement and (ii) 113,723 Warrant Exchange Shares
 
(18)
Represents (i) 51,534 shares of common stock issued in the Private Placement and (ii) 45,460 Warrant Exchange Shares.
 
(19)
Represents (i) 12,839 shares of common stock issued in the Private Placement, (ii) 12,839 shares of common stock underlying warrants issued in the Private Placement, and (iii) 25,000 shares of common stock underlying Replacement Warrants.
 
(20)
Represents (i) 25,671 shares of common stock issued in the Private Placement and (ii) 22,701 Warrant Exchange Shares
 
(21)
Represents (i) 51,328 shares of common stock issued in the Private Placement, (ii) 51,328 shares of common stock underlying warrants issued in the Private Placement, and (iii) 100,000 shares of common stock underlying Replacement Warrants.
 
(22)
Represents (i) 38,466 shares of common stock issued in the Private Placement and (ii) 34,040 Warrant Exchange Shares.
 
(23)
Represents (i) 12,798 shares of common stock issued in the Private Placement, (ii) 12,798 shares of common stock underlying warrants issued in the Private Placement, and (iii) 25,000 shares of common stock underlying Replacement Warrants.
 
(24)
Represents (i) 12,599 shares of common stock issued in the Private Placement, (ii) 12,599 shares of common stock underlying warrants issued in the Private Placement, and (iii) 25,000 shares of common stock underlying Replacement Warrants. The selling stockholder is a director of the Company.
 
 
42

 
(25)
Represents (i) 6,372 shares of common stock issued in the Private Placement and (ii) 5,662 Warrant Exchange Shares.
 
(26)
Represents (i) 504,521 shares of common stock issued in the Private Placement, (ii) 254,521 shares of common stock underlying warrants issued in the Private Placement, (iii) 500,000 shares of common stock underlying Replacement Warrants, and (iv) 225,000 Warrant Exchange Shares.
 
(27)
Represents (i) 10,074 shares of common stock issued in the Private Placement, (ii) 10,074 shares of common stock underlying warrants issued in the Private Placement, and (iii) 20,000 shares of common stock underlying Replacement Warrants.
 
(28)
Represents (i) 251,849 shares of common stock issued in the Private Placement, (ii) 251,849 shares of common stock underlying warrants issued in the Private Placement, and (iii) 500,000 shares of common stock underlying Replacement Warrants.
 
(29)
Represents (i) 12,593 shares of common stock issued in the Private Placement, and 12,028 Warrant Exchange Shares.
 
(30)
Represents (i) 25,151 shares of common stock issued in the Private Placement, (ii) 7,546 Warrant Exchange Shares, and (iii) 50,000 shares of common stock underlying Replacement Warrants.
 
(31)
Represents (i) 25,144 shares of common stock issued in the Private Placement, (ii) 25,144 shares of common stock underlying warrants issued in the Private Placement, and (iii) 50,000 shares of common stock underlying Replacement Warrants.
 
(32)
Represents (i) 12,572 shares of common stock issued in the Private Placement, (ii) 12,572 shares of common stock underlying warrants issued in the Private Placement, and (iii) 25,000 shares of common stock underlying Replacement Warrants.
 
(33)
Represents (i) 25,110 shares of common stock issued in the Private Placement and (ii) 24,033 Warrant Exchange Shares.
 
(34)
Represents (i) 12,558 shares of common stock issued in the Private Placement, (ii) 12,558 shares of common stock underlying warrants issued in the Private Placement, and (iii) 25,000 shares of common stock underlying Replacement Warrants.
 
(35)
Represents (i) 25,137 shares of common stock issued in the Private Placement, (ii) 25,137 shares of common stock underlying warrants issued in the Private Placement, and (iii) 50,000 shares of common stock underlying Replacement Warrants.
 
(36)
Represents shares of common stock underlying Replacement Warrants.
 
(37)
Half of such shares represent shares of common stock issued pursuant to the Subscription Agreement and half of such shares represent shares of common stock underlying warrants issued pursuant to the Subscription Agreements.
 
(38)
Half of such shares