U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________________ to __________________
Oak Ridge Micro-Energy, Inc.
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(Name of Small Business Issuer in its Charter)
COLORADO 94-3431032
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(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
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Issuer's Telephone Number: (801) 556-9928
Securities Registered under Section 12(b) of the Exchange Act: None.
Securities Registered under Section 12(g) of the Exchange Act:
Common Stock, $0.001 par value
Check whether the Issuer is not required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act. [ ]
Check whether the Issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the Issuer was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
(1) Yes X (2) Yes X
Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10- KSB or any amendment to this Form 10-KSB. [ ]
Indicate by check mark whether the Issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act.) No X
State Issuer's revenues for its most recent calendar year: December 31, 2005 - $0.
State the aggregate market value of the common voting stock of the Issuer held by non-affiliates computed by reference to the price at which the stock was sold, or the average bid and asked prices of such stock, as of a specified date within the past 60 days: March 29, 2006 - $12,004,820.80. There are approximately 37,515,065 shares of our common voting stock held by non-affiliates; the presented value is based upon the average of the bid and asked prices ($0.32) of our common stock on the OTC Bulletin Board of the National Association of Securities Dealers, Inc. (the "NASD").
Issuers Involved in Bankruptcy Proceedings During the past Five Years
None; not applicable.
Applicable Only to Corporate Registrants
State the number of outstanding shares of each of the Issuer's classes of common equity, as of the latest practicable date: March 29, 2006 - Common stock - 72,125,707 shares.
Documents Incorporated by Reference
See Part III, Item 13.
Transitional Small Business Issuer Format Yes X
As used herein, the words and phrases "Oak Ridge Micro-Energy," the "Registrant, "Company" or "Oak Ridge," and "we," "our," "us" and similar words of import, shall be considered synonymous references to Oak Ridge Micro-Energy, Inc.
PART I
Item 1. Description of Business.
Business.
Background summary.
We produce thin-film, solid-state batteries for industrial, government, and medical applications. Our thin-film battery is rechargeable, lithium-based, and the active battery layers are significantly thinner than common plastic wrap. Our batteries are intended for applications such as wireless smart sensors that operate in harsh environments, security cards, radio frequency identification (RFID) tags, semiconductor non-volatile memory chips, and implantable medical devices. The small size of this new battery technology will improve existing products and enable the development of many new products. Our fully packaged cells on ceramic substrates typically supplied to customers are 0.024" (0.62 mm) thick.
Thin-film rechargeable lithium and lithium-ion batteries in which the component layers are less than 5 micrometers (0.0002 inches) thick were developed by Dr. John B. Bates and his team of scientists and engineers from more than a decade of research at the Oak Ridge National Laboratory (ORNL). Dr. John B. Bates retired from ORNL and is now our Chief Technology Officer and a member of our Board of Directors. The U. S. Department of Energy has released the technology for commercialization through their licensing agent, UT Battelle LLC. We are one of a number of non-exclusive licensees of this technology. The batteries must be substantially manufactured in the United States, under our licensing agreement (the "Licensing Agreement"), unless a waiver is obtained. There may be exportation limitations into certain countries; there are no environmental compliance issues that we know of; and raw materials and manufacturing equipment are readily available from several vendors in the United States.
Unlike conventional batteries, thin-film batteries can be deposited directly onto chips or chip packages in any shape or size, and when fabricated on plastics or thin metal foils, the batteries are quite flexible. Some of the unique properties of thin-film batteries that distinguish them from conventional batteries include:
*all solid state construction;
*can be deep cycled thousands of times;
*can be operated at high and low temperatures (tests have been conducted between -20 degrees C and 160 degrees C);
*can be made in any shape or size;
*cost does not increase with reduction in size (constant $/cm2); and
*completely safe under all operating conditions.
Thin-film lithium-ion batteries have the additional advantage of being unaffected by heating to over 280 degrees centigrade. Many integrated circuits or IC's are assembled by the solder reflow or surface mount process, in which all of the electronic components are soldered on the board at the same time by heating to temperatures as high as 280 degrees C for a few minutes. Conventional batteries, such as coin or button cells, contain organic liquid electrolytes that cannot survive such temperatures, and therefore must be added to the circuits as a separate component, often manually.
We are presently manufacturing in limited quantities lithium-ion batteries (model ORLI.0.5CL) on one small production line and we are developing new batteries using our laboratory-scale hardware. Batteries have been delivered to a variety of potential customers who desire samples to evaluate for integration into their products. In order to preserve capital, we are seeking a relationship with a third party manufacturing partner who will be able to scale up our manufacturing process and produce large numbers of batteries for high-volume markets.
We currently have four full-time employees and two part-time employees.
In February, we completed installation of our two, small-scale thin-film production sputtering tools and began testing and calibration runs on all of the five layers of the battery. We developed a complete manufacturing process for thin-film batteries including a new hermetic package. The first production run of three hundred twenty four (324) ORLI.0.5.CL batteries was made in October with a higher than expected yield. Specifications and detailed performance data have been posted on our web site. Up to December 31, 2005, about 1000 batteries have been manufactured, and samples have been provided to potential customers in the U.S. and abroad. During the year, we filed a patent application on our packaging process with the United States Patent Office.
During 2004, we began the year with a successful equity raise. A net total of $2.9 million, after commissions, was raised during offerings conducted simultaneously in the United States and Europe. Our equity raise was accomplished by the sale of units consisting of one share of common stock and one warrant to purchase an additional share of common stock.
We completed Phase I of our business and strategic plan and entered Phase II. Phase II is geared towards expansion, mass prototyping and entry into highly specialized markets. Specialized markets for our thin-film battery include wireless semiconductor processing diagnostic wafers and miniature implantable medical devices. However, such markets are only the beginning, and we are confident we will be able to announce new contracts and new battery designs in the future. As demand for our product grows, we will advance to Phase III of our long range plan, to find manufacturing partners and begin mass production of our thin-film batteries.
During 2004, we introduced Mr. Yuri Trachuk to our Company as Vice President of Manufacturing. Mr. Trachuk has brought a wealth of experience to our Company, having held senior engineering positions at several companies, including Applied Materials, Komag and Advanced Energy. He has international business experience in Russia, Israel and Malaysia. Mr. Trachuk holds a Masters of Science degree in vacuum electronics from the Politechnical Institute Lvov in the former Soviet Union.
During 2004, our Company was awarded a patent, "Thin Film Battery and Electrolyte Therefor," US 6,818,356 B1, with 22 claims. The claims relate to a range of compositions for a new thin-film lithium electrolyte, a method of making the electrolyte and a thin-film battery utilizing the new electrolyte. Our Company will continue to improve on the thin-film battery. With a full- fledged research facility in Oak Ridge, we expect to be an innovative leader in the micro-energy market.
On June 1, 2004, our Board of Directors authorized a three for one forward split of our common stock by dividend. See our 8-K Current Report dated May 10, 2004, and filed with the Securities and Exchange Commission on May 25, 2004, which is incorporated herein by reference. See Part III, Item 13. All computations herein take into account this forward split.
We exercised our right to acquire a non-exclusive Licensing Agreement of thin- film battery technology from the U.S. Department of Energy on January 9, 2003. Previously, we had held an option to license this technology, and based upon our independent development of additional technology, intellectual property and processes related to the thin-film battery, we exercised our option.
In January, 2003, we were awarded a contract with the Department of Defense to develop advanced battery materials. The program, funded through the Office of the Secretary of Defense, will develop new, nano-structured electrode materials for thin-film batteries. The $100,000 contract was a Phase I Small Business Innovative Research ("SBIR") grant, with a Phase II potential of $750,000 that was awarded to another applicant.
For additional information on other material business developments concerning our Company that occurred during the years ended December 31, 2003, 2002, 2001 and 2000, see our 10-KSB Annual Reports for the years then ended, which have been previously filed with the Securities and Exchange Commission and which are incorporated herein by reference, in Part III, Item 13.
Thin-film lithium and lithium-ion batteries are ideally suited for a variety of applications where a small power source is needed. They can be manufactured in a variety of shapes and sizes, as required by the customer. By using the available space within a device, the battery can provide the required power while occupying otherwise wasted space and adding negligible mass.
The range of possible applications of these batteries derives from their important advantages as compared to conventional battery technologies. They can be made in virtually any shape and size to meet the requirements of each application. The batteries are rechargeable, which means their size needs to be no larger than required to satisfy the energy requirements on a single cycle, thus reducing cost and weight, which in itself may give birth to new applications.
We believe that numerous new applications will become apparent continually. At this point, anticipated uses include:
*diagnostic wafers for the semiconductor industry;
*wireless imbeded sensors;
*active radio frequency identification tags;
*non-volatile memory backup; and
*implantable medical devices
As a consequence of their ultra thin profile, low thermal mass, and their ability to operate in harsh environments, thin-film batteries are uniquely suited as power sources for wireless semiconductor processing diagnostic wafers. The sale of diagnostic wafers is estimated at $100 million per year, and thin-film batteries will provide the power source for a significant portion of this market.
Thin-film lithium batteries will eventually power wireless sensors smaller than the size of a dime that can detect biological or chemical contaminants, movement and pressure, and transmit this information to a local receiver.
Two decades ago, bar code technology revolutionized the way goods and merchandise were identified, priced and inventoried. However, bar code technology is limited in its application by the need for an unobstructed line- of-sight or physical contact between the bar code and the reader. Radio frequency identification eliminates this limitation. Active tags would contain circuitry that enables them to radio their location to a central receiver which would sort out the information as needed. Some tags require a very thin battery to power the devices contained within it.
Non-volatile static random access memory is used in numerous products such as computers, time keeping chips and flash memory. When the active power of a device with static random access memory is turned off, it is necessary to have a backup source of energy in order to retain memory in the chips. Because of the very low leakage currents of the complimentary metal-oxide semiconductor transistors that make up the memory, only small batteries are necessary to retain the memory during periods when the device is removed from active power, such as might occur in a power outage. Presently, non-rechargeable coin cells are used to backup non-volatile static access memory, but because they are not rechargeable and are produced in standard minimum sizes, the battery often dominates the size of the static random access memory package. Since thin-film batteries have a very long cycle life, a thin-film battery many times smaller than a coin cell can be used as a backup power source. Also, only solid-state thin-film lithium-ion batteries can withstand the high temperatures required for solder reflow assembly, allowing them to be integrated into circuits along with the other components. Conventional coin cells must be added by hand. Thin-film batteries can also be deposited directly onto memory chips or chip packages, reducing the volume they occupy even further.
Because of their all solid state construction, small size, and long cycle life, thin film batteries are ideally suited for implantable medical devices such as neural stimulators, smart pacemakers and wireless diagnostic systems.
We have made projections of revenues based on the achievement of certain critical cost/performance goals. In addition, these goals must meet with a willing marketplace learning to use a new technology. Our Company is actively engaged in the commercialization and continued optimization of thin-film battery technology. Accordingly, our goal is to generate returns to our investors through commercial prototyping for a variety of thin-film battery applications, intellectual property creation and the ongoing advancement of battery materials. We are developing partnerships based upon commercial applications of thin-film batteries and the development of advanced battery materials.
We continue to develop projections of the market potential of our technology. In the event that we are successful in our efforts to commercialize thin-film batteries and advanced battery materials, a significant revenue stream is possible. The market for the overall lithium based rechargeable batteries is several billion dollars annually. While the share of that market which can be considered a "micro-battery" is currently small, several factors are stimulating the development of a business opportunity. The market for portable electronics devices, specifically card-like and miniature products, is expected to grow dramatically based on applications in supply chain management, national defense, homeland security and medicine.
Projections of our ongoing viability are based on the near term attraction of additional investment, technical success of our contract research effort, and development and commercial launch of our first application of the thin-film battery in 2005. A significant amount of resources, including people, equipment and working capital must come on line in concert with the achievement of critical manufacturing milestones for our projections to be realized.
While our Company is pursuing additional investment, we are also actively engaged in the pursuit of new federal support for our advanced materials development efforts. We were awarded a Small Business Innovative Research grant by the Department of Defense in January of 2003. Additional programs of this nature will be proposed now and for several years to agencies such as the National Science Foundation, the National Institutes of Health and other federal agencies as we gain capacity.
We also intend to create revenue through the sale of prototypes. We have begun manufacturing thin-film batteries and have supplied samples to U.S. and foreign organizations.
Success in our Company's prototyping activities will lead to revenues as new products are distributed across global markets. With the success of our current capitalization program, we expect to accomplish enough prototyping programs in the near future in order to identify and launch at least one commercial application in 2006. Certain critical cost/performance milestones must be met with suitable partners, applications and additional investment, for a successful commercial launch to occur.
The heightened need for security coupled with the critically important national defense requirements ensures that many of the applications enabled by the thin-film battery will be funded through prototyping. Federal agencies, combined with their defense contractors, will be responsible to initiate an unprecedented security upswing with a worldwide clientele. The Homeland Security Initiative is forecasted to spend more than $300 billion in the next few years, but has yet to devise a development plan. A new breed of micro- electronic systems will spring from this funds pool, fueling growth in the sensor, card, wireless and chip markets.
Research and Development expenditures for 2005 and 2004 were $298,604 and $323,627, respectively.
We have raised in certain private placements in late 2003 and early 2004 of our units consisting of common stock and warrants gross proceeds of approximately $3,142,695 (net proceeds were approximately $2,900,000). A general illustration of the use of these proceeds is as follows.
Estimated cash requirements for those funds during the 24 months that followed that equity raise were:
Personnel $ 400,000
Equipment $ 800,000
Intellectual property and license $ 200,000
Working Capital $ 1,500,000
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Total $ 2,900,000
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At December 31, 2005, we had $1,232,594 in cash resources remaining from these proceeds.
Presently, there are five other U.S. companies that have licenses for manufacturing thin-film batteries using the Department of Energy's technology:
Infinite Power Solutions, Inc. (Littleton, CO); Front Edge Technology, Inc. (Baldwin Park, CA); Cymbet Corporation (Minneapolis, MN); Teledyne Electronic Technologies (Newport Beach, CA); and Excellatron (Atlanta, GA). The worldwide market for thin-film batteries may become quite large, and we view these other licensees as allies in promoting the value of thin-film batteries in the early years, whereas all licensees may become more competitive in later years. The other licensees began their businesses in 1998 or later. Some are better capitalized than we are; and some have greater manufacturing capacity at this point. Some are focused solely on developing batteries, while others are diversified.
On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"). The Sarbanes-Oxley Act imposes a wide variety of new regulatory requirements on publicly-held companies and their insiders. Many of these requirements will affect us. For example:
*our chief executive officer and chief financial officer must now certify the accuracy of all of our periodic reports that contain financial statements;
*our periodic reports must disclose our conclusions about the effectiveness of our disclosure controls and procedures; and
*we may not make any loan to any director or executive officer and we may not materially modify any existing loans.
The Sarbanes-Oxley Act has required us to review our current procedures and policies to determine whether they comply with the Sarbanes-Oxley Act and the new regulations promulgated thereunder. We will continue to monitor our compliance with all future regulations that are adopted under the Sarbanes- Oxley Act and will take whatever actions are necessary to ensure that we are in compliance.
Our common stock is "penny stock" as defined in Rule 3a51-1 of the Securities and Exchange Commission. Penny stocks are stocks:
*with a price of less than five dollars per share;
*that are not traded on a "recognized" national exchange;
*whose prices are not quoted on the NASDAQ automated quotation system; or
*in issuers with net tangible assets less than $2,000,000, if the issuer has been in continuous operation for at least three years, or $5,000,000, if in continuous operation for less than three years, or with average revenues of less than $6,000,000 for the last three years.
Section 15(g) of the Exchange Act and Rule 15g-2 of the Securities and Exchange Commission require broker/dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document before making any transaction in a penny stock for the investor's account. You are urged to obtain and read this disclosure carefully before purchasing any of our shares.
Rule 15g-9 of the Securities and Exchange Commission requires broker/dealers in penny stocks to approve the account of any investor for transactions in these stocks before selling any penny stock to that investor.
This procedure requires the broker/dealer to:
* get information about the investor's financial situation, investment experience and investment goals;
* reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor can evaluate the risks of penny stock transactions;
* provide the investor with a written statement setting forth the basis on which the broker/dealer made his or her determination; and
* receive a signed and dated copy of the statement from the investor, confirming that it accurately reflects the investors' financial situation, investment experience and investment goals.
Compliance with these requirements may make it harder for our stockholders to resell their shares.
Section 14(a) of the Exchange Act requires all companies with securities registered pursuant to Section 12(g) of the Exchange Act to comply with the rules and regulations of the Securities and Exchange Commission regarding proxy solicitations, as outlined in Regulation 14A. Matters submitted to stockholders of our Company at a special or annual meeting thereof or pursuant to a written consent will require our Company to provide our stockholders with the information outlined in Schedules 14A or 14C of Regulation 14; preliminary copies of this information must be submitted to the Securities and Exchange Commission at least 10 days prior to the date that definitive copies of this information are forwarded to our stockholders.
We are also required to file annual reports on Form 10-KSB and quarterly reports on Form 10-QSB with the Securities Exchange Commission on a regular basis, and will be required to timely disclose certain material events (e.g., changes in corporate control; acquisitions or dispositions of a significant amount of assets other than in the ordinary course of business; and bankruptcy) in a current report on Form 8-K.
The integrated disclosure system for small business issuers adopted by the Securities and Exchange Commission in Release No. 34-30968 and effective as of August 13, 1992, substantially modified the information and financial requirements of a "Small Business Issuer," defined to be an issuer that has revenues of less than $25,000,000; is a U.S. or Canadian issuer; is not an investment company; and if a majority-owned subsidiary, the parent is also a small business issuer. We are deemed to be a "small business issuer."
Item 2. Description of Property.
We have a five year lease on a 5,000 square foot laboratory facility in the city of Oak Ridge, Tennessee. The rental cost is $2,200 per month. This facility is adequate for us to develop prototypes in small quantities for research and for supplying potential customers for their evaluation. If we contract with a third party manufacturer for large quantities of the thin-film battery, then this laboratory facility may remain adequate for years. In the future, we may elect to uses our current facility as a research center and move all production to a new facility.
Dr. Bates' prior association with the Oak Ridge National Laboratory allows us, through the ORNL Laboratory's user program for corporations (also available to other licensees of the thin-film battery technology), to gain access to specialized equipment. This eliminates the need for us to purchase expensive equipment that is infrequently used but is critically important to our intended business. In addition to the personnel at ORNL, the city of Oak Ridge has a large talent pool of former and/or retired employees with special skills in chemistry, physics and materials characterization. These specialists can be hired as permanent or part-time employees or as consultants.
Item 3. Legal Proceedings.
Except as indicated below, we are not the subject of any pending legal proceedings; and to the knowledge of management, no proceedings are presently contemplated against us by any federal, state or local governmental agency.
Further, and except as indicated below, to the knowledge of management, no director or executive officer is party to any action in which any has an interest adverse to us.
On August 27, 2004, we commenced an action against Timothy Rock, Andrew Goodell, Water & Gold, Inc. and Jeffrey Kohutka in the Third Judicial District Court, State of Utah, County of Salt Lake, Case No. 040918223. We asserted claims against these individuals for violations of Utah's Uniform Securities Act, Utah Code Ann. Section 61-1-1 et seq.; Fraudulent Inducement and Conspiracy to Defraud; Misappropriation and conversion; and Breach of Contract. We also sought a Preliminary and Permanent Injunction against defendants enjoining them from selling, transferring or otherwise encumbering any of the shares these individuals had obtained from us pending the outcome of the case. On September 1, 2004, we obtained a Temporary Restraining Order against Messrs. Rock, Goodell, Kohutka and Water & Gold enjoining those individuals, entities and their agents from attempting to sell, assign or encumber or selling, assigning or encumbering any Oak Ridge stock owned by them or their agents. On November 5, 2004, the defendants filed an Answer and Counterclaim against us and our President, Mark Meriwether, alleging violation of the Utah Uniform Securities Act, Utah Code Ann. Section 61-1-1 et seq. against Meriwether and Oak Ridge, and Breach of Contract against us. On December 21 and December 22, 2004, the Court held a Preliminary Injunction Hearing on our request to enjoin the defendants from transferring, selling or otherwise encumbering their shares pending the outcome of the case. After the two-day hearing in which evidence was presented by both sides, the Court issued Findings of Fact and Conclusions of Law. In its Findings, the Court determined that an injunction was appropriate. The Court specifically found that we had established a substantial likelihood of prevailing on the merits of our claims that Messrs. Rock, Kohutka, Goodell and Water & Gold violated Utah's Uniform Securities Act, Utah Code Ann. Section 61-1-1 et seq.; that if the injunction was not issued, we would be irreparably harmed; that harm to us in the event an injunction was not issued would not outweigh any harm to Rock, Goodell, Kohutka and Water & Gold; and that the public interest would not be affected by the granting of the Preliminary Injunction. The Court also ordered us to post a $100,000 bond.
Evidence presented at the hearing detailed approximately 5,000,000 shares that were the subject of the Preliminary Injunction.
In furtherance of the Court's Preliminary Injunction and at a hearing held on Oak Ridge's Motion on May 10, 2005, the Court verbally ordered defendants Rock, Goodell, Kohutka and Water & Gold to forthwith deliver or cause to be delivered all shares of Oak Ridge common stock that were the subject of the Preliminary Injunction, whether held by the defendants or deposited in their respective brokerage accounts or other repositories, to the Clerk of the Court, to be held by such Clerk until a final adjudication of Oak Ridge's legal action. The Court Order was reduced to writing and the defendants have deposited substantially all of these shares with the Clerk of the Court. See our 8-K Current Report dated December 12, 2004, as amended, and filed with the Securities and Exchange Commission on May 16, 2005, as referenced in Part III, Item 13.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to our shareholders during the year ended December 31, 2005.
PART II
Our common stock is presently quoted on the OTC Bulletin Board of the NASD under the symbol "OKME" as reflected below, though the current trading volume is small. No assurance can be given that any market for our common stock will continue in the future or be maintained. If an "established trading market" ever develops in the future, the sale of "restricted securities" (common stock) pursuant to Rule 144 of the Securities and Exchange Commission by members of management or others may have a substantial adverse impact on any such market.
The range of high and low bid quotations for our common stock during the each quarter of the years ended December 31, 2005, and 2004, is shown below. Prices are inter-dealer quotations as reported by the NQB, LLC, and do not necessarily reflect transactions, retail markups, mark downs or commissions.
Quarter ended: High Low -------------- ---- --- March 31, 2004 3.70 2.00 April 1, 2004 through May 28, 2004* 3.05 2.10 June 1, 2004 through June 30, 2004* 1.45 .70 September 30, 2004* .75 .40 December 31, 2004* .40 .31 March 31, 2005 .60 .35 June 30, 2005 .55 .25 September 30, 2005 .371 .16 December 31, 2005 .23 .11 |
*After a 3 for 1 forward split
The number of record holders of our common stock as of March 29, 2006, was approximately 555; this number does not include an indeterminate number of stockholders whose shares are held by brokers in street name.
There are no present material restrictions that limit our ability to pay dividends on common stock or that are likely to do so in the future. We have not paid any dividends with respect to our common stock, with the exception of the dividend by which we effected a three for one forward split in 2004, and do not intend to pay dividends in the foreseeable future.
The following "restricted securities" have been sold by us during the past three years:
Common Stock Issued for Number of Shares Year ----------------------- ---------------- ---- Issuance of common stock for 88,500 2003 services at $.42 per share Issuance of common stock for 8,640,000 2003 services at $.09 per share Sale of common stock at $.42 195,060 2003 per share Issuance of common stock for 975,000 2003 services at $.40 per share Issuance of common stock for 6,975,000 2004 services at $0.11 per share Sale of common stock at $.42 per 9,012,390 2004 share Common stock issued for services 9,490,071 2004 at $.13 per share Common stock issued for 41,208 2004 services at $0.15 per share Common stock issued for UT-Battelle 47,619 2004 license at $0.42 per share Common stock issued for 64,614 2004 services at $0.11 Issuance of common 5,040,000 2005 stock for services at $0.1114 per share to Board Members and Consultants* Sale of common stock 30,000 2005 at $0.42 per share to one person Sale of common stock 300,000 2005 at $0.20 per share to one person Issuance of common 75,000 2005 stock for services at $0.32 per share to an employee |
* See our 8-K Current Report dated May 10, 2004, and filed with the Securities and Exchange Commission on May 25, 2004, which is incorporated herein by reference.
We issued these securities to persons who were either "accredited investors," or "sophisticated investors" who, by reason of education, business acumen, experience or other factors, were fully capable of evaluating the risks and merits of an investment in our Company; and each had prior access to all material information about us. We believe that the offer and sale of these securities was exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Sections 4(2) and 4(6) thereof, and Rule 506 of Regulation D of the Securities and Exchange Commission and from various similar state exemptions, and with respect to the foreign investors, pursuant to Regulation S of the Securities and Exchange Commission.
There were no proceeds received during the calendar year ended December 31, 2005, for the sale of registered securities.
There were no purchases of our equity securities by us or any affiliated purchasers during the calendar year ended December 31, 2005.
We have no equity compensation plans as of the date of this Annual Report.
Oak Ridge Micro-Energy is developing a new, thin-film lithium battery technology for commercial, consumer, industrial, security and military use. Our corporate objective is to capitalize on delivering solutions for the world's micro-power needs.
The battery is lithium-based and is manufactured to be thinner than common plastic wrap. Like the larger, traditional lithium batteries that power laptops and cell phones, this lithium battery is also rechargeable. Unlike traditional lithium batteries, the thin-film battery is intended for small, hi-tech, low power applications, some of which have not yet been developed or brought to market.
Current anticipated uses include "smart" credit cards, security cards, wireless sensors, radio frequency identification tags, chip memory backup and advanced drug delivery devices. Future applications will grow as the availability of thin-film batteries increases.
The technology has evolved over the past decade at the Oak Ridge National Laboratories ("ORNL"), a U. S. Government laboratory in Oak Ridge, Tennessee. The U. S. Department of Energy has released the technology for commercialization through their licensing agent, UT Battelle LLC. We are one of a number of non-exclusive licensees of this technology. The primary inventor of the technology for ORNL, Dr. John B. Bates, retired from ORNL who is now our Chief Technology Officer and a member of our Board of Directors.
The batteries must be substantially manufactured in the United States, under our licensing agreement (the "Licensing Agreement"), unless a waiver is obtained. There may be exportation limitations into certain countries; there are no environmental compliance issues that we know of; and raw materials and manufacturing equipment are readily available from several vendors in the United States.
We are developing prototype batteries using our current laboratory-scale hardware. We recently raised additional capital to acquire equipment to manufacture thin-film batteries for pilot production requirements. Prototype batteries will be delivered to a variety of potential clients who desire samples to evaluate for integration into their products. We will likely develop a relationship with a third party manufacturing partner when quantities dictate to preserve capital. Batteries will be shipped directly to our customers, without the need for a distributor, in the short term.
Until such time as our Company's prospective clients have evaluated prototypes and made commitments for commercial quantities of our product, we intend to apply for revenue from U. S. Government grants and research contracts, like similar grants we have received from the Department of Defense. During fiscal 2006, we anticipate that we may have between one and four clients, and would expect that number to grow in future years, as applications and the availability of thin-film batteries increases. Dr. Bates and our staff will continue to advance thin-film technology, which will result in the creation of an intellectual property portfolio for our Company and our shareholders.
Currently, we have made patent applications for an improved electrolyte on which we have been granted a patent for 22 claims; a new barrier coating to help the battery resist corrosion; to improve the performance of the battery; and to better protect the battery from natural elements.
We currently have four full-time employees and two part-time employees.
On August 27, 2004, we commenced an action against Timothy Rock, Andrew Goodell, Water & Gold, Inc. and Jeffrey Kohutka in the Third Judicial District Court, State of Utah, County of Salt Lake, Case No. 040918223. We asserted claims against these individuals for violations of Utah's Uniform Securities Act, Utah Code Ann. Section 61-1-1 et seq.; Fraudulent Inducement and Conspiracy to Defraud; Misappropriation and conversion; and Breach of Contract. We also sought and obtained a Preliminary and Permanent Injunction against the defendants enjoining them from selling, transferring or otherwise encumbering any of the shares these individuals had obtained from us pending the outcome of the case. We do not expect this case to have a material impact on our Company. See Part I, Item 3.
Revenue.
We had no revenue for 2005, and $1,260 in 2004.
Operating Expenses.
Research and development expenses in the fiscal year of 2005 were $298,604, compared to $323,627 during the fiscal year of 2004. Research and development expense consists mainly of salaries to a small technical staff and materials used in the further development and prototyping of the thin-film lithium battery.
General and Administrative expenses were $2,178,737 in the fiscal year of 2005, compared to $2,783,818 in the fiscal year of 2004. These charges consisted of rent, utilities, travel expenses, legal and professional charges and other miscellaneous charges related to general business operations. The majority of general and administrative expenses of the fiscal year of 2005 were from the issuance of common stock to various consultants and members of our Board of Directors, valued at $1,903,001.
Financial Condition.
In the opinion of the management, the data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of (a) the financial position at December 31, 2005, and December 31, 2004; (b) the results of operations for the fiscal year ended December 31, 2005, and 2004; (c) statement of changes to stockholders' equity for December 31, 2005; and (d) cash flows for the fiscal year ended December 31, 2005 and 2004.
Our Company incurred a net loss for operations of $2,618,616 for the fiscal year ended December 31, 2005. Cash on hand totaled $1,232,594. We believe cash on hand will be sufficient to finance current business operations for at least the next 12 months.
Our cash resources for fiscal 2005 were provided primarily by our sales of our equity securities, amounting to $72,500, as compared to revenues of $1,260 in fiscal 2004 and proceeds from the sale of our equity securities during fiscal 2004 of $2,736,769. Our cash resources at December 31, 2005, were $1,232,594, compared to $1,866,034 at December 31, 2004.
ALL FORWARD-LOOKING STATEMENTS CONTAINED HEREIN, AND SPECIFICALLY UNDER THIS HEADING, ARE DEEMED BY OUR COMPANY TO BE COVERED BY AND TO QUALIFY FOR THE SAFE HARBOR PROTECTION PROVIDED BY THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. STOCKHOLDERS AND PROSPECTIVE STOCKHOLDERS SHOULD UNDERSTAND THAT SEVERAL FACTORS GOVERN WHETHER ANY FORWARD-LOOKING STATEMENT CONTAINED HEREIN WILL BE OR CAN BE ACHIEVED. ANY ONE OF THESE FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED HEREIN. THESE FORWARD- LOOKING STATEMENTS INCLUDE PLANS AND OBJECTIVES OF MANAGEMENT FOR FUTURE OPERATIONS, INCLUDING PLANS AND OBJECTIVES RELATING TO THE PRODUCTS AND THE FUTURE ECONOMIC PERFORMANCE OF OUR COMPANY. ASSUMPTIONS RELATING TO THE FOREGOING INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER THINGS, FUTURE ECONOMIC, COMPETITIVE AND MARKET CONDITIONS, FUTURE BUSINESS DECISIONS, AND THE TIME AND MONEY REQUIRED TO SUCCESSFULLY COMPLETE DEVELOPMENT PROJECTS, ALL OF WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY AND MANY OF WHICH ARE BEYOND THE CONTROL OF OUR COMPANY. ALTHOUGH WE BELIEVE THAT THE ASSUMPTIONS UNDERLYING THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN ARE REASONABLE, ANY OF THOSE ASSUMPTIONS COULD PROVE INACCURATE AND, THEREFORE, THERE CAN BE NO ASSURANCE THAT THE RESULTS CONTEMPLATED IN ANY OF THE FORWARD- LOOKING STATEMENTS CONTAINED HEREIN WILL BE REALIZED. BASED ON ACTUAL EXPERIENCE AND BUSINESS DEVELOPMENTS, THE IMPACT OF WHICH MAY CAUSE OUR COMPANY TO ALTER OUR MARKETING, CAPITAL EXPENDITURE PLANS OR OTHER BUDGETS, WHICH MAY IN TURN AFFECT OUR COMPANY'S RESULTS OF OPERATIONS IN LIGHT OF THE SIGNIFICANT UNCERTAINTIES INHERENT IN THE FORWARD-LOOKING STATEMENTS INCLUDED HEREIN, THE INCLUSION OF ANY SUCH STATEMENT SHOULD NOT BE REGARDED AS A REPRESENTATION BY OUR COMPANY OR ANY OTHER PERSON THAT THE OBJECTIVES OR PLANS OF OUR COMPANY WILL BE ACHIEVED.
Mantyla McReynolds LLC
The CPA. Never Underestimate The Value. [Letterhead]
Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders
Oak Ridge Micro-Energy, Inc.
We have audited the accompanying balance sheet of Oak Ridge Micro-Energy, Inc., as of December 31, 2005 and the related statements of operations, stockholders' equity, and cash flows for the year ended December 31, 2005. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Oak Ridge Micro-Energy, Inc. as of December 31, 2005 and the results of operations and cash flows for the year ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America.
/s/ Mantyla McReynolds, LLC Mantyla McReynolds, LLC Salt Lake City, Utah March 24, 2006 |
MADSEN & ASSOCIATES, CPA's INC. 684 East Vine St, # 3
Certified Public Accountants and Business Consultants Murray, Utah 84107
Telephone 801-268-2632
Fax 801-262-3978
|
Board of Directors
Oak Ridge Micro-Energy, Inc.
Salt Lake City, Utah
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have audited the accompanying balance sheet of Oak Ridge Micro-Energy, Inc. ( development stage company) at December 31, 2004 and the related statement of operations, stockholders' equity, and cash flows for the years ended December 31, 2004 and the period January 1, 1996 (date of inception of development stage) to December 31, 2004. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall balance sheet presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Oak Ridge Micro-Energy, Inc. at December 31, 2004, and the results of operations, and cash flows for the years ended December 31, 2004 and the period January 1, 1996 (date of inception of development stage) to December 31, 2004, in conformity with accounting principles generally accepted in the United States of America.
April 13, 2005 s/Madsen & Associates, CPA's Inc. Salt Lake City, Utah |
OAK RIDGE MICRO-ENERGY, INC.
(Development Stage Company)
BALANCE SHEET
December 31, 2005
Assets
Current assets
Cash and cash equivalents $ 1,232,594
-----------
Total Current Assets 1,232,594
-----------
Furniture, fixtures, equipment, net 744,855
Intangible assets, net 13,493
Other long-term assets 2,200
-----------
Total Assets $ 1,993,142
===========
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable 18,884
Accrued liabilities - related parties 5,563
----------
Total Current Liabilities 24,447
----------
Stockholders' Equity
Common stock
100,000,000 shares authorized at $.001
par value; 68,125,707 issued and
outstanding 68,126
Additional paid-in capital 15,985,604
Deficit accumulated prior to development
stage (2,319,595)
Deficit accumulated during development
stage (11,765,438)
-----------
Total Stockholders' Equity 1,968,695
-----------
Total liabilities and stockholders' equity $ 1,993,142
===========
|
The accompanying notes are an integral part of these financial statements.
OAK RIDGE MICRO-ENERGY, INC.
(Development Stage Company)
STATEMENTS OF OPERATIONS
Period
Dec 31, Dec 31, Jan 1, 1996
2005 2004 to Dec 31, 2005
Revenues $ 0 $ 1,260 $ 117,466
Operating expenses:
General and administrative 2,178,737 2,783,818 7,199,344
Research and development 298,604 323,627 1,007,432
Sales and marketing 2,880 - 2,880
Depreciation & amortization 165,735 128,262 395,910
---------- ---------- ----------
Total operating expenses 2,645,956 3,235,707 8,605,566
---------- ---------- ----------
Operating income (loss) (2,645,956) (3,234,447) (8,488,100)
---------- ---------- ----------
Other income/expenses:
Interest and other income 27,341 17,601 56,506
Interest expense - - (340,159)
Loss on sale of assets - - (4,608,767)
Gain on Settlement of debt - - 1,615,082
---------- ---------- -----------
Total other income/expense 27,341 17,601 (3,277,338)
---------- ---------- ----------
Net income (loss) $(2,618,616)$(3,216,846) $(11,765,438)
========== ========== ===========
Earnings (loss) per share:
Basic $ (.04)$ (.07)
Weighted average shares outstanding:
Basic 65,403,207 49,434,000
========== ==========
|
The accompanying notes are an integral part of these financial statements.
OAK RIDGE MICRO-ENERGY, INC.
(Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value Deficit
Balance January 1, 1996 1,215,252 $ 1,215 $ 5,421,856 $(2,319,595)
Issuance of common stock for
services at $.70 - 1996 89,694 90 20,843 -
Net operating loss for the year
ended December 31, 1996 - - - (4,748,837)
Net operating loss for the year
ended December 31, 1997 - - - (111,272)
Net operating loss for the year
ended December 31, 1998 - - - (31,347)
Net operating loss for the year
ended December 31, 1999 - - - (31,347)
Issuance of common stock for
services at $.032 2,970,000 2,970 28,500 -
Issuance of common stock for
expenses at $.035 2,036,190 2,036 21,694 -
Issuance of common stock for
payment of debt at $.018 28,444,776 28,445 146,045 -
Issuance of common stock for
retirement of preferred stock 233,106 233 32,962 -
Contributions to capital-expenses - - 15,000 -
Net operating profit for the year
ended December 31, 2000 - - - 1,473,829
Return and cancellation of
common stock (12,000,000) (12,000) 12,000 -
Issuance of common stock for
payment of debt at $.28 525,000 525 48,191 -
Issuance of common stock for
cash at $2.00 60,000 60 39,940 -
Net operating loss for the year
ended December 31, 2001 - - - (116,761)
Issuance of common stock for all
stock of Oak Ridge Micro
Energy - note 4 89,709 90 9,910 -
Issuance of common stock for
cash - net of costs - at $2.37
- May 2002 1,800,018 1,800 1,386,200 -
Issuance of common stock for
cash at $2.00 - September 2002 112,500 112 74,888 -
Issuance of common stock for
services at $2.00 - December 2002 375,000 375 61,625 -
Net operating loss for the year
ended December 31, 2002 - - - (697,953)
---------- ------ ---------- ----------
|
Balance December 31, 2002 25,951,245 25,951 7,319,654 (6,583,283)
The accompanying notes are an integral part of these financial statements
OAK RIDGE MICRO-ENERGY, INC.
(Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value Deficit
Issuance of common stock for
services at $.39 average - 2003 10,041,501 10,041 1,297,249 -
Issuance of common stock for
cash at $1.25 - June 20, 2003 195,060 195 81,080 -
Net operating loss for the year
ended December 31, 2003 - - - (1,666,290)
Balance December 31, 2003 36,187,806 36,187 8,697,983 (8,249,573)
Issuance of common stock for
cash at $.42 - $.66 9,057,390 9,058 2,955,518 -
Issuance of common stock for
services and expenses at
average $.13 17,387,892 17,388 2,318,094 -
Issuance of common stock for
license at $.42 47,619 48 19,952 -
Net operating loss for the year
ended December 31, 2004 - - - (3,216,846)
Balance December 31, 2004 62,680,707 62,681 13,991,547 (11,466,419)
Issuance of common stock for
services @ $0.1114 per share 5,040,000 5,040 1,897,961
Sale of common stock at $0.42
per share 30,000 30 12,470
Sale of common stock at $0.20
per share 300,000 300 59,700
Issuance of common stock for
services at $0.32 per share 75,000 75 23,925
Net operating loss for the year
ended December 31, 2005 (2,618,616)
---------- ------- ----------- -----------
Balance, December 31, 2005 68,125,707 $68,126 $15,985,604 $(14,085,033)
========== ======= =========== ===========
|
The accompanying notes are an integral part of these financial statements
OAK RIDGE MICRO-ENERGY, INC.
(Development Stage Company)
STATEMENTS OF CASH FLOWS
Period
Dec 31, Dec 31, Jan 1, 1996
2005 2004 to Dec 31, 2005
Operations
Net income (loss) $(2,618,616) $ (3,216,846) $ (11,765,438)
Adjustments to reconcile net income
(loss) to net cash provided by
operations
Changes in accounts payable (168,624) 128,262 400,640
Changes in deposits - - (2,200)
Depreciation & amortization 165,735 173,754 395,910
Issuance of common stock for
expenses and contributions to
capital for expenses 1,927,002 2,355,482 5,742,907
Loss of assets - - 4,608,767
Gain on settlement of debt - - (1,615,082)
----------- ------------ -------------
Net cash from operations (694,503) (559,348) (2,234,496)
----------- ------------ -------------
Investing
Additions to furniture, fixtures
and equipment (4,546) (635,548) (1,127,486)
Additions to intangible assets (6,891) (3,517) (26,775)
----------- ------------ -------------
Net cash used for investing (11,437) (639,065) (1,154,261)
----------- ------------ -------------
Financing
Proceeds from stock issued 72,500 2,736,769 4,621,351
----------- ------------ -------------
Net cash received from financing 72,500 2,736,769 4,621,351
----------- ------------ -------------
Net change in cash and cash
equivalents (633,440) 1,538,356 1,232,594
Cash and cash equivalents, beginning
of period 1,866,034 327,678 -
----------- ------------ -------------
Cash and cash equivalents, end of
period $ 1,232,594 $ 1,866,034 $ 1,232,594
=========== ============ =============
|
The accompanying notes are an integral part of these financial statements
OAK RIDGE MICRO-ENERGY, INC.
(Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
Note 1 Description of Business and Liquidity
Oak Ridge Micro-Energy, Inc. (referred to hereafter as "the Company" or "Oak Ridge") was incorporated on August 15, 1986 under the laws of the state of Colorado, with the original name "Vates Corp.". Since inception, the company has completed six name changes resulting in its present name. With the 2002 acquisition of its sole subsidiary, Oak Ridge Micro-Energy, Inc., a Nevada Corporation ("Oak Ridge Nevada"), the name of the Company was changed from Global Acquisitions, Inc. and the subsidiary was merged into the parent. The Company has changed the par value of its stock and effected four stock splits. The accompanying financial statements have been prepared showing the after spilt effect with a par value of $0.001 since inception.
The Company became inactive after 1995 and is considered to be in the development stage after that date. The Company's principal operation is the further development and commercialization of the rechargeable thin-film lithium battery.
Note 2 Summary of Accounting Methods
Accounting Methods
The Company recognizes income and expenses based on the accrual method of
accounting.
Dividend Policy
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
The Company utilizes the asset/liability method of accounting for income
taxes. Under this method deferred tax assets and liabilities are determined
based on the differences between financial reporting and the tax bases of the
assets and liabilities and are measured using the enacted tax rates and laws
that are anticipated to be in effect, when the differences are expected to
reverse. An allowance against deferred tax assets is recorded, when it is more
likely than not, that such tax benefits will not be realized.
Below is a summary of deferred tax asset calculations on net operating loss carry forward amounts. Loss carry forward amounts expire at various times through 2025. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax asset will not be realized.
Description Balance Tax Rate Net Operating Loss $8,125,676 $2,762,730 34% Valuation allowance (2,762,730) (34%) Deferred tax asset $0 0% |
The valuation allowance has increased approximately $1,119,000 from $1,644,000 at December 31, 2004. The increase is due to the benefits of current year net operating loss carry forwards.
OAK RIDGE MICRO-ENERGY, INC.
(Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
Research and Development
All costs of research and development, including wages, supplies, consultants,
and depreciation on equipment used in the research and development, are
expensed as incurred.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements in
accordance with accounting principles generally accepted in the United States
of America. Those estimates and assumptions affect the reported amounts of the
assets and liabilities, the disclosure of contingent assets and liabilities,
and the reported revenues and expenses. Actual results could vary from the
estimates that were assumed in preparing the financial statements.
Equipment
Equipment consists of office and other equipment used in the research and
development of the thin-film lithium battery and is being depreciated over
five and seven years using the straight-line method of depreciation.
Cost $ 1,121,078 Accumulated depreciation $ 376,223
Long Lived-Assets
The Company periodically evaluates the economic lives of its long-lived assets
and if there has been impairment in the value a loss would be recognized in
the operating statement.
Patents Pending
Patents pending have been determined by management to have an economic useful
life of five years from the date of filing.
Financial Instruments
The carrying amounts of financial instruments, including cash and accounts
payable, are considered by management to be their estimated fair values.
Basic and Diluted Net Income (Loss) Per Share Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common shares and common equivalent shares outstanding as if the shares had been issued on the exercise of any common share rights unless the exercise becomes anti- dilutive and then only the basic per share amounts are shown in the report.
Revenue Recognition
Revenue is recognized on the sale and delivery of a product or the completion
of services provided.
Statement of Cash Flows
For the purposes of the statement of cash flows, the Company considers all
highly liquid investments with maturity of three months or less to be cash
equivalents.
Financial and Concentrations Risk
The Company does not have any concentration or related financial credit risk
except that the Company maintains cash in banks over the insured amounts of
$100,000; however, they are considered to be in banks of high quality. The
amount in excess of the federally insured amount as of December 31, 2005 was
$1,132,497.
Advertising and Market Development
The company expenses advertising and market development costs as incurred.
OAK RIDGE MICRO-ENERGY, INC.
(Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
Other Recent Accounting Pronouncements
The Company does not expect that the adoption of other recent accounting
pronouncements will have a material impact on its financial statements.
Note 3 Technology License Agreement
On December 28, 2001 the Company entered into a license and royalty agreement to further develop and market a rechargeable thin-film lithium battery for use in a variety of applications, such as, RFID tags for airlines and supply chain management, drug delivery systems and implantable medical devices, and non- volatile memory backup. The terms of the agreement included payments of $90,000 in cash and stock of the Company (completed) and the payment of a 5% royalty on all net sales with minimum royalties to begin in 2006 as follows:
2006 $ 20,000 2007 $ 40,000 2008 and thereafter $ 60,000 |
Note 4- Purchase of all shares of Oak Ridge Micro-Energy, Inc.
On January 15, 2002 the Company acquired all of the outstanding stock of Oak Ridge Micro-Energy, Inc., a Nevada corporation ("Oak Ridge Nevada") from its sole stockholder John B. Bates, PhD. in a forward triangular merger between our newly formed wholly-owned subsidiary and Oak Ridge Nevada. The shares of Oak Ridge Nevada were converted into and exchanged for approximately 29% of the post-acquisition outstanding stock after the cancellation of certain shares that were owned by Mark Meriwether, President and sole pre-acquisition director and executive officer, and as part of the acquisition on February 13, 2002 the Company changed its name to Oak Ridge Micro- Energy, Inc. On February 13, 2002 the subsidiary was merged into the parent.
Oak Ridge Nevada was organized under the laws of the state of Nevada on December 12, 2001 for the purpose of the commercializing the thin-film battery outlined in note 3. Oak Ridge Nevada has had no operations and its only asset was the license and royalty agreement outlined in note 3.
The acquisition has been recorded under the purchase method of reporting with no good will recognized.
Note 5 Stockholders' Equity
The Company's only issued and authorized equity shares consist of common stock, par value $0.001. Effective June 1, 2004, the Company effected a one to three forward split of its outstanding common stock, while retaining the current par value of $0.001. The accompanying financial statements have been prepared retroactively showing the after spilt effect with a par value of $0.001 since inception.
During the second quarter of 2005, the Company issued 5,025,000 to members of the Board of Directors and attorneys. These shares are subject to lock- up/leak-out conditions which do not allow the shares to be traded for a period of two years from the date of issuance, and then commencing at the beginning of the third year from the date of issuance, no more than one-twelfth of these shares may be traded in any monthly period for the next two consecutive months. These shares were recorded at their estimated fair value of $1,903,001 and expensed during the three-month period ending June 30, 2005.
During the third quarter of 2005, the Company issued 75,000 shares to an employee of the Company. These shares were recorded at their estimated fair value of $24,000 and expensed during the three-month period ending September 30, 2005.
OAK RIDGE MICRO-ENERGY, INC.
(Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
Note 6 Related Parties
Officers-directors and their families have acquired 57% of the outstanding common stock.
During the second quarter of 2005, members of the board of directors were issued a combined 4,500,000 shares (these shares are part of the 5,025,000 discussed under note 4) for general business services. The services were recorded at their estimated fair value of $1,704,180 and recognized as expense during the three-month period ending June 30, 2005.
The Company currently owes its' President and Chief Executive Officer, $5,563 for money loaned to the Company. This note is non-interest bearing and payable on demand.
Note 7 Continuing Liabilities
The Company has an operating lease for its office space located in Oak Ridge, Tennessee. The rental expense for 2004 was $26,400 and for 2005 $26,400. Future minimum rental payments required under the non-cancelable operating lease follows:
Year ending December 31
2006 $ 11,000
2007 $ 0
Note 8 Legal Action
|
On August 27, 2004, Oak Ridge Micro-Energy, Inc. commenced an action against Timothy Rock, Andrew Goodell, Water & Gold, Inc. and Jeffrey Kohutka in the Third Judicial District Court, State of Utah, County of Salt Lake, Case No. 040918223. Oak Ridge asserted claims against these individuals for violations of Utah's Uniform Securities Act, Utah Code Ann. Section 61-1-1 et seq.; Fraudulent Inducement and Conspiracy to Defraud; Misappropriation and conversion; and Breach of Contract. Oak Ridge also sought a Preliminary and Permanent Injunction against defendants enjoining them from selling, transferring or otherwise encumbering any of the shares these individuals had obtained from Oak Ridge pending the outcome of the case.
On September 1, 2004, Oak Ridge obtained a Temporary Restraining Order against Messrs. Rock, Goodell, Kohutka and Water & Gold enjoining those individuals, entities and their agents from attempting to sell, assign or encumber or selling, assigning or encumbering any Oak Ridge stock owned by them or their agents.
On November 5, 2004, the defendants filed an Answer and Counterclaim against Oak Ridge and its President, Mark Meriwether alleging violation of the Utah Uniform Securities Act, Utah Code Ann. Section 61-1-1 et seq. against Meriwether and Oak Ridge, and Breach of Contract against Oak Ridge.
OAK RIDGE MICRO-ENERGY, INC.
(Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
On December 21 and December 22, 2004, the Court held a Preliminary Injunction Hearing on Oak Ridge's request to enjoin the defendants from transferring, selling or otherwise encumbering their shares pending the outcome of the case. After the two-day hearing in which evidence was presented by both sides, the Court issued Findings of Fact and Conclusions of Law. In its Findings, the Court determined that an injunction was appropriate. The Court specifically found that Oak Ridge had established a substantial likelihood of prevailing on the merits of its claims that defendants Rock, Goodell, Water & Gold and Kohutka violated Utah's Uniform Securities Act, Utah Code Ann. Section 61-1-1; that if the injunction was not issued, Oak Ridge would be irreparably harmed; that the harm to Oak Ridge in the event an injunction was not issued would not outweigh any harm to Rock, Goodell, Kohutka and Water & Gold; and that the public interest would not be affected by the granting of the Preliminary Injunction. The Court also ordered Oak Ridge to post a $100,000 bond.
Evidence presented at the hearing detailed 4,744,800 shares that were the subject of the Preliminary Injunction. In furtherance of the Court's Preliminary Injunction and at a hearing held on Oak Ridge's Motion on May 10, 2005, the Court verbally ordered defendants Rock, Goodell, Kohutka and Water & Gold to forthwith deliver or cause to be delivered all shares of Oak Ridge common stock that were the subject of the Preliminary Injunction, whether held by the defendants or deposited in their respective brokerage accounts or other repositories, to the Clerk of the Court, to be held by such Clerk until a final adjudication of Oak Ridge's legal action.
Note 9 Subsequent Events
On March 24, 2006, pursuant to resolutions adopted by the Board of Directors and an S-8 Registration Statement that was filed on that date with the Securities and Exchange Commission, the Company issued 5,300,000 shares of its $0.001 par value common stock to three individuals pursuant to written compensation agreements at a price of $0.23 per share for gross aggregate compensation of $1,219,000. Mark Meriwether, our President, Secretary and a director, received 4,400,000 of these shares as a bonus under his Amended and Restated Employment Agreement with the Company.
We were notified that effective January 30, 2004, that Sellers and Andersen, L.L.C., our former auditors, had merged with Ted Madsen, CPA to form Madsen & Associates, CPA's, Inc. On February 19, 2004, our Board of Directors resolved to engage Madsen & Associates, CPA's, Inc., Certified Public Accountants, of Salt Lake City, Utah, to audit our financial statements for the calendar year ended December 31, 2003. That firm also audited our financial statements for the calendar year ended December 31, 2004.
We dismissed Madsen & Associates on August 12, 2005.
On August 11, 2005, our Board of Directors unanimously resolved to engage De Joya Griffith & Company, LLC, Certified Public Accountants, of Henderson, Nevada, to review our unaudited financial statements for the quarter ended June 30, 2005.
On November 8, 2005, our Board of Directors dismissed De Joya Griffith and Company, LLC, Certified Public Accountants.
On November 8, 2005, our Board of Directors unanimously resolved to engage Mantyla, McReynolds, LLC, Certified Public Accountants, of Salt Lake City, Utah, as our auditors to review our quarterly financial statements for the quarter ended September 30, 2005, and audit our financial statements for the year ended December 31, 2005.
For more information on these changes in our auditors, see our 8-K Current Reports as amended and filed with the Securities and Exchange Commission on August 22, 2005; September 1, 2005; November 15, 2005; and December 2, 2005, as referenced in Part III, Part 13.
As of the end of the period covered by this Annual Report, we carried out an evaluation, under the supervision and with the participation of our President and Secretary/Treasurer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our President and Chief Financial Officer concluded that our disclosure controls and procedures are effectively designed to ensure that information required to be disclosed or filed by us is recorded, processed or summarized, within the time periods specified in the rules and regulations of the Securities and Exchange Commission. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. In addition, we reviewed our internal controls, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of their last evaluation.
Subsequent to the date of this Annual Report, we filed an S-8 Registration Statement for 5,300,000 shares valued at $0.23 per share for an Amended and Restated Employment Agreement and two Engagement Letters. 4,400,000 of those shares were issued to our President, Mark Meriwether. See the S-8 Registration Statement filed with the Securities and Exchange Commission on March 24, 2006 and which is incorporated herein by reference. See Part III, Item 13.
The following table sets forth, in alphabetical order, the names and the nature of all positions and offices held by all directors and executive officers of our Company for the calendar year ended December 31, 2005, and to the date of this Annual Report, and the period or periods during which each such director or executive officer has served in his respective positions.
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
---- --------- ----------- --------------
John B. Bates, President & 1/15/02 3/31/02
Ph.D. Director 1/15/02 *
CEO 1/15/02 3/31/02
CTO 3/31/02 *
Mark Meriwether
CEO 3/31/02 *
President 2/14/01 1/15/02
President 3/31/02 *
Director 2/14/01 *
Secretary 2/14/01 *
Treasurer 2/14/01 *
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* These persons presently serve in the capacities indicated opposite their respective names.
The term of office of our current directors shall continue until the annual meeting of our stockholders, which is scheduled in accordance with the direction of our Board of Directors. The annual meeting of our Board of Directors immediately follows the annual meeting of our stockholders, at which officers for the coming year are elected.
Dr. John B. Bates, Ph.D. Dr. Bates is 64 years of age and was employed by Oak Ridge National Laboratory or ORNL for nearly 30 years. He recently left ORNL with a plan to commercialize the thin-film batteries. Dr. Bates invented or co-invented 12 patents, authored or co-authored 60 articles and wrote three book chapters in the field of rechargeable thin-film lithium batteries while at ORNL. Awards and honors include: the 1996 Lockheed-Martin Energy Systems Inventor of the Year; the 1996 R&D 100 Award (Thin-Film Battery); the 1998 Lockheed-Martin Energy Research Corp. Technical Achievement Award; and the 2000 Electrochemical Society Battery Research Award. Through his scientific achievements, Dr. Bates is internationally recognized as the foremost authority in thin-film battery technology.
Mark Meriwether. Mr. Meriwether is 50 years of age, and for the past 18 years, his principal occupation has involved providing services to public and private companies in the areas of corporate restructuring and reorganizations, mergers and funding as an independent contractor.
To the knowledge of management, no present or former director, person nominated to become a director, executive officer, promoter or control person of our Company:
(1) Was a general partner or executive officer of any business by or against which any bankruptcy petition was filed, whether at the time of such filing or two years prior thereto;
(2) Was convicted in a criminal proceeding or named the subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
(3) Was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting, the following activities:
(i) Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
(ii) Engaging in any type of business practice; or
ii) Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws;
(4) Was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described above under this Item, or to be associated with persons engaged in any such activity;
(5) Was found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission to have violated any federal or state securities law, and the judgment in such civil action or finding by the Securities and Exchange Commission has not been subsequently reversed, suspended, or vacated; or
(6) Was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated.
On May 24, 2004, John B. Bates, a director, filed with the Securities and Exchange Commission a Form 4, Statement of Changes in Beneficial Ownership, disclosing his acquisition of 1,500,000 shares of our common stock on May 20, 2004.
On May 25, 2004, Mark Meriwether, our President, filed with the Securities and Exchange Commission a Form 4, Statement of Changes in Beneficial Ownership, disclosing his acquisition of 1,500,000 shares of our common stock on May 20, 2004.
On September 17, 2004, Mark Meriwether filed with the Securities and Exchange Commission a Form 4, Statement of Changes in Beneficial Ownership, disclosing his gift of 600,000 shares of our common stock and the sale of 210,000 shares of our common stock on September 15, 2004.
On October 22, 2004, Mark Meriwether filed with the Securities and Exchange Commission a Form 4, Statement of Changes in Beneficial Ownership, disclosing his sale of 313,000 shares of our common stock on October 7, 2004.
On January 4, 2005, Mark Meriwether filed with the Securities and Exchange Commission a Form 4, Statement of Changes in Beneficial Ownership, disclosing his sale of 400,000 shares of our common stock on December 30, 2004.
On March 17, 2005, Mark Meriwether filed with the Securities and Exchange Commission a Form 4, Statement of Changes in Beneficial Ownership, disclosing his gift of 90,000 shares of our common stock on March 2, 2005.
On April 7, 2005, Mark Meriwether filed with the Securities and Exchange Commission a Form 4, Statement of Changes in Beneficial Ownership, disclosing his sale of 250,000 shares of our common stock on April 1, 2005.
On April 26, 2005, Mark Meriwether filed with the Securities and Exchange Commission a Form 4, Statement of Changes in Beneficial Ownership, disclosing his sale of 330,000 shares of our common stock on April 22, 2005.
On September 15, 2005, Mark Meriwether filed with the Securities and Exchange Commission a Form 4, Statement of Changes in Beneficial Ownership, disclosing his gift of 200,000 shares of our common stock on September 6, 2005.
On January 18, 2006, Mark Meriwether filed with the Securities and Exchange Commission a Form 4, Statement of Changes in Beneficial Ownership, disclosing his gift of 600,000 shares of our common stock on January 18, 2006.
On March 28, 2006, Mark Meriwether filed with the Securities and Exchange Commission a Form 4, Statement of Changes in Beneficial Ownership, disclosing his acquisition of 4,400,000 shares of our common stock on March 24, 2006.
To the best knowledge of our management, all required reports of directors, executive officers and 10% stockholders required to be filed under Section 16(a) of the Exchange Act have been timely filed and no other report are presently required to be filed.
We have adopted a Code of Ethics, and it was attached as Exhibit 14 to our Annual Report on Form 10-KSB for the year ended December 31, 2003. See Part III, Item 13.
We do not have an Audit Committee; however, we do not believe that the failure to have an Audit Committee is material, based upon our current operations.
We have not established a Compensation Committee because we believe that our tw0 member Board of Directors is able to effectively manage the issues normally considered by a Compensation Committee.
We have not established a Nominating and Corporate Governance Committee because we believe that our two member Board of Directors is able to effectively manage the issues normally considered by a Nominating and Corporate Governance Committee.
The following table sets forth the aggregate executive compensation paid by our Company for services rendered during the periods indicated:
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Years or Other All
principal periods Annual Restricted Option/ LTIP Other
position Ended $ $ Compen- Stock SAR's Payouts Compen-
Salary Bonus sation Awards$ # $ sation
------------------------------------------------------------------------------
Mark 12/31/05 0 0 $ 3,000 (1) 0 0 0
Meriwether 12/31/04 0 0 $122,100 (2) 0 0 0
President 12/31/03 0 0 $37,914 (3) 0 0 0
Sec'y/
Treasurer
Director
John B. 12/31/05 $120,000 0 0 0 0 0 0
Bates 12/31/04 $101,250 0 0 (2) 0 0 0
CTO 12/31/03 $ 66,666 0 0 (3) 0 0 0
and Director
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(1) On March 24, 2006, pursuant to resolutions adopted by the Board of Directors and an S-8 Registration Statement that was filed on that date with the Securities and Exchange Commission, the Company issued 5,300,000 shares of its $0.001 par value common stock to three individuals pursuant to written compensation agreements at a price of $0.23 per share for gross aggregate compensation of $1,219,000. Mark Meriwether, our President, Secretary and a director, received 4,400,000 of these shares as a bonus under his Amended and Restated Employment Agreement with the Company. See
Part III, Item 13.
(2) On May 20, 2004, our Board of Directors adopted resolutions to issue shares of "restricted securities" (common stock), as follows: 4,500,000 shares to Mark Meriwether, 2,250,000 shares effective May 14, 2004, and 2,250,000 shares at May 14, 2005; and 4,500,000 shares to John B. Bates, 2,250,000 shares effective May 14, 2004, and 2,250,000 shares at May 14, 2005. See our 8-K Current Report dated May 10, 2004, and filed with the Securities and Exchange Commission on May 25, 2004, and incorporated herein by reference. See Part III Item 13.
(3) On May 23, 2003, our Board of Directors resolved to issue Mark Meriwether 7,050,000 shares of our common stock that were "restricted securities" as compensation, 4,050,000 shares on that date and 3,000,000 shares on March 31, 2004. Our Board of Directors also resolved to issue John B. Bates 6,450,000 shares of our common stock that were "restricted securities" as compensation, 3,450,000 shares on that date and 3,000,000 shares o on March 31, 2004. Pursuant to an Addendum to the Employment Agreements of Messrs. Meriwether and Bates effective on May 23, 2003, Messrs. Meriwether and Bates were also resolved to be issued 195,000 shares each that would be registered on an S-8 Registration Statement; and on December 12, 2003, Mr. Meriwether's Employment Agreement was again amended by an Addendum to provide for the issuance of an additional 555,000 shares that would also be included in an S-8 Registration Statement. This Registration Statement was filed with the Securities and Exchange Commission on December 3, 2003, and is incorporated herein by reference. See Parr III, Item 13. For additional information about these grants, see our 8-K Current Report dated May 23, 2003, and filed with the Securities and Exchange Commission on June 9, 2003, and referenced in Part III, Item 1.
For information on the Amended and Restated Employment Agreements of Messrs. Meriwether and Bates, see Part III, Item 13.
There are no cash compensation, deferred compensation or long term incentive plans that have been adopted by our Company. Further, except as indicated in the note to the Summary Compensation Table above, no member of our Company's management has been granted any option or stock appreciation right; accordingly, no tables relating to such items have been included within this Item. However, it is anticipated that a Stock Option Plan and management "restricted securities" grants or other options and awards will be considered and adopted by the Board of Directors in the future to compensate our current members of management, attract new members of management and to retain persons presently serving with us.
There are no standard arrangements pursuant to which our Company's directors are compensated for any services provided as director. No additional amounts are payable to our Company's directors for committee participation or special assignments.
There are no arrangements pursuant to which any of our Company's directors was compensated during our Company's last completed calendar year or the previous two calendar years for any service provided as director. See the Summary Compensation Table of this Item.
There are presently no compensatory plans or arrangements, including payments to be received from our Company, with respect to any person named in the Summary Compensation Table set out above which would in any way result in payments to any such person because of his resignation, retirement or other termination of such person's employment with our Company or our subsidiaries, or any change in control of our Company, or a change in the person's responsibilities following a change in control of our Company.
The following table sets forth the share holdings of those persons who own more than 5% of our Company's common stock as of March 29, 2006:
Number and Percentage
Name and Address of Shares Beneficially Owned (1)
---------------- --------------------------------
John B. Bates, Ph.D. 18,059,706 - 25.0%
74 Rolling Links Blvd.
Oak Ridge, TN 37830
Confetti Enterprises, Inc. (2) 1,200,000 - 1.7%
3046 East Brighton Place
Salt Lake City, Utah 84121
Mark Meriwether (3) 18,350,936 - 25.4%
3046 East Brighton Place
Salt Lake City, Utah 84121
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(1) Percentages are based on 72,125,707 shares of common stock outstanding at March 29, 2006.
(2) Confetti Enterprises is solely owned by Mr. Meriwether's wife, Collette Meriwether.
(3) Mr Meriwether owns 16,942,436 shares in his own name; 60,000 shares that are in the name of Collette Meriwether, and 30,000 shares in the name of C. Meriwether, Mr. Meriwether's wife; 264,000 shares in the name of C. Dobney, maiden name of Collette Meriwether; and 1,054,500 shares in the name of BC Ventures, a company that Mark Meriwether owns.
The following table sets forth the share holdings of our Company's directors and executive officers as of April 15, 2005:
Number and Percentage
Name and Address of Shares Beneficially Owned (1)
---------------- --------------------------------
John B. Bates, Ph.D. 18,059,706 - 25.0%
74 Rolling Links Blvd.
Oak Ridge, TN 37830
Mark Meriwether (2) 19,550,936 - 27.1%
3046 East Brighton Place
Salt Lake City, Utah 84121
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(1) Percentages are based on 72,125,707 shares of common stock outstanding at March 29, 2006.
(2) Mr Meriwether owns 16,942,436 shares in his own name; Confetti Enterprises, which is solely owned by Mr. Meriwether' wife, owns 1,200,000 shares of our common stock; 60,000 shares that are in the name of Collette Meriwether, and 30,000 shares in the name of C. Meriwether, Mr. Meriwether's wife; 264,000 shares in the name of C. Dobney, maiden name of Collette Meriwether; and 1,054,500 shares in the name of BC Ventures, a company that Mark Meriwether owns.
We have no agreements that would result in a change of control of our Company.
Except as indicated above under Part II, Items 5, 10 and 11, there were no material transactions, or series of similar transactions, during our last two calendar years, or any currently proposed transactions, or series of similar transactions, to which we or any of our subsidiaries was or is to be a party, in which the amount involved exceeded $60,000 and in which any director, executive officer, any security holder who is known to us to own of record or beneficially more than 5% of any class of our common stock, or any member of the immediate family of any of the foregoing persons, or any promoter had a material interest.
8-K Current Report, as amended, dated February 19, 2004, and filed with the Securities and Exchange Commission on February 24, 2004.**
8-K Current Report, as amended, dated April 30, 2005, and filed with the Securities and Exchange Commission on May 7, 2005.**
8-K Current Report, dated December 22, 2004, and filed with the Securities and Exchange Commission on January 6, 2005.**
8-K Current Report, as amended, dated May 10, 2004, and filed with the Securities and Exchange Commission on May 25, 2004.**
8-K Current Report, dated March 22, 2005, and filed with the Securities and Exchange Commission on March 22, 2005.**
8-K Current Report, dated December 12,2004, as amended, and filed with the Securities and Exchange Commission on May 16, 2005.**
8-K Current Report dated August 11, 2005, and filed with the Securities and Exchange Commission on August 22, 2005.**
8-K Current Report dated August 12, 2005, and filed with the Securities and Exchange Commission on September 1, 2005.**
8-K Current Report dated November 15, 2005, as amended, and filed with the Securities and Exchange Commission on November 15, 2005.**
23.1 Consent of Mantyla McReynolds, LLC.
23.2 Consent of Madsen & Associates
31 302 Certification of Mark Meriwether
32 906 Certification
(ii) Where Incorporated
In This Annual Report
---------------------
S-8 Registration Statement filed March 24, Part III, Item 8
2006**
Exhibit No. 99.1: Amended and Restated
Employment Agreement of Mark Meriwether**
S-8 Registration Statement filed December Part I, Item 1
3, 2003**
Exhibit No. 99.21: Amended and Restated
Employment Agreement of John Bates**
8-K Current Report dated May 23, 2003, filed Part II, Item 10
June 9, 2003**
Form 8-A Registration Statement filed Part I, Item 1
August 10, 2002**
Exhibit 3: Amended and Restated
Articles of Incorporation**
10-KSB Annual Report for the year ended
December 31, 2003** Part II, Item 9
10-KSB Annual Report for the year ended Part I, Item 1
December 31, 2002**
8-K Current Report dated January 15, 2002, Part II, Item 11
filed January 24, 2002**
10-KSB Annual Report for the year ended Part I, Item 1
December 31, 2001**
8-K Current Report dated January 6, 2001, Part II, Item 11
filed February 14, 2001.
10-KSB Annual Report for the year ended
December 31, 2000** Part I, Item 1
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* Summaries of all Exhibits are modified in their entirety by reference to the actual Exhibit.
** These documents and related Exhibits have previously been filed with the Securities and Exchange Commission and are incorporated herein by this reference.
The following is a summary of the fees billed to Oak Ridge by its principal accountants during the calendar years ended December 31, 2005 and 2004:
Fee category 2005 2004
------------ ---- ----
Audit fees $5,000 $8,275
Audit-related fees $ 800 $ 0
Tax fees $ 0 $ 250
All other fees $ 0 $ 0
------ ------
Total fees $5,800 $8,525
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Audit fees. Consists of fees for professional services rendered by our principal accountants for the audit of our annual financial statements and the review of financial statements included in our Forms 10-QSB Quarterly Reports or services that are normally provided by our principal accountants in connection with statutory and regulatory filings or engagements.
Audit-related fees. Consists of fees for assurance and related services by our principal accountants that are reasonably related to the performance of the audit or review of Oak Ridge's financial statements and are not reported under "Audit fees."
Tax fees. Consists of fees for professional services rendered by our principal accountants for tax compliance, tax advice and tax planning.
All other fees. Consists of fees for products and services provided by our principal accountants, other than the services reported under "Audit fees," "Audit-related fees" and "Tax fees" above.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.
OAK RIDGE MICRO-ENERGY, INC.
Date: 03/30/06 By /s/ Mark Meriwether
Mark Meriwether, President and Director
Date: 03/30/06 By /s/ John B. Bates
John B. Bates, Director and CTO
In accordance with the Exchange Act, this Annual Report has been signed
below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated:
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OAK RIDGE MICRO-ENERGY, INC.
Date: 03/30/06 By /s/ Mark Meriwether
Mark Meriwether, President/CEO and Director
Date: 03/30/06 By /s/ John B. Bates
John B. Bates, Director and CTO
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Exhibit 23.1
Mantyla McReynolds LLC
The CPA. Never Underestimate The Value. [Letterhead]
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statements No. 333-132697 and No. 333-110888 on Form S-8, of our report dated March 24, 2006, relating to the financial statements of Oak Ridge Micro-Energy, Inc. appearing in this Annual Report on Form 10-KSB for the year ended December 31, 2005.
/s/ Mantyla McReynolds, LLC Mantyla McReynolds, LLC Salt Lake City, Utah March 30, 2006 |
Exhitit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statements No. 333-132697 and No. 333-110888 on Form S-8, of our report dated April 13, 2005, relating to the financial statements of Oak Ridge Micro-Energy, Inc. for the year ended December 31, 2004 which also appear in the Annual Report on Form 10-KSB for the year ended December 31, 2005.
/s/ Madsen & Associates CPA's, Inc. Madsen & Associates CPA's, Inc. Salt Lake City, Utah March 30, 2006 |
Exhibit 31
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Mark Meriwether, President, CEO, Secretary/Treasurer of Oak Ridge Micro- Energy, Inc. (the "small business issuer"), certify that:
1. I have reviewed this Annual Report on Form 10-KSB of the Registrant;
2. Based on my knowledge, this Annual Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Annual Report;
3. Based on my knowledge, the financial statements, and other financial information included in this Annual Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Annual Report;
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and I have:
a) designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this Annual Report is being prepared;
b) evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this Annual Report (the "Evaluation Date"); and
c) presented in this Annual Report my conclusions about the effectiveness of the disclosure controls and procedures based on My evaluation as of the Evaluation Date;
5. I have disclosed, based on my most recent evaluation, to the Registrant's auditors and the audit committee of Registrant's board of directors (or persons performing the equivalent function);
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant's ability to record, process, summarize and report financial data and have identified for the Registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls.
Dated: 03-30-06 Signature: /s/Mark Meriwether
-------- -------------------------
Mark Meriwether
President, CEO, Secretary/Treasurer
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Exhibit 32
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Oak Ridge Micro-Energy, Inc. (the "Registrant") on Form 10-KSB for the period ended December 31, 2005, as filed with the Securities and Exchange Commission on the date hereof (the "Annual Report"), I, Mark Meriwether, CEO, President, Secretary/Treasurer and director of the Registrant, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Annual Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Annual Report fairly presents, in all material respects, the financial condition and result of operations of the Registrant.
Dated: 3/30/2006 /s/Mark Meriwether
-------------------------
President
CEO
Secretary
Treasurer
Director
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