Pennsylvania
|
23-2372688
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer Identification No.)
|
|
incorporation
or organization)
|
||
375
Phillips Boulevard
|
||
Ewing,
New Jersey
|
08618
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Large
accelerated filer ___
|
Accelerated
filer
X
|
Non-accelerated
filer ___ (Do not check if a smaller reporting
company)
|
Smaller
reporting company ___
|
ITEM
1.
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
REVENUE:
|
||||||||
Commercial
revenue
|
$ | 1,369,137 | $ | 1,555,065 | ||||
Developmental
revenue
|
1,464,721 | 1,161,754 | ||||||
Total
revenue
|
2,833,858 | 2,716,819 | ||||||
OPERATING
EXPENSES:
|
||||||||
Cost
of chemicals sold
|
170,987 | 195,476 | ||||||
Research
and development
|
5,219,062 | 4,440,139 | ||||||
Selling,
general and administrative
|
2,622,945 | 2,373,546 | ||||||
Patent
costs
|
731,531 | 711,385 | ||||||
Royalty
and license expense
|
82,931 | 103,185 | ||||||
Total
operating expenses
|
8,827,456 | 7,823,731 | ||||||
Operating
loss
|
(5,993,598 | ) | (5,106,912 | ) | ||||
INTEREST
INCOME
|
253,400 | 919,194 | ||||||
INTEREST
EXPENSE
|
(2,643 | ) | (5,667 | ) | ||||
GAIN
ON STOCK WARRANT LIABILITY
|
173,242 | — | ||||||
NET
LOSS
|
$ | (5,569,599 | ) | $ | (4,193,385 | ) | ||
BASIC
AND DILUTED NET LOSS PER COMMON SHARE
|
$ | (0.15 | ) | $ | (0.12 | ) | ||
WEIGHTED
AVERAGE SHARES USED IN COMPUTING BASIC AND DILUTED NET LOSS PER COMMON
SHARE
|
36,299,967 | 35,770,641 | ||||||
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
loss
|
$ | (5,569,599 | ) | $ | (4,193,385 | ) | ||
Non-cash
charges to statement of operations:
|
||||||||
Depreciation
|
517,472 | 445,937 | ||||||
Amortization
of intangibles
|
423,768 | 423,768 | ||||||
Amortization
of premium and discount on investments, net
|
(144,887 | ) | (438,296 | ) | ||||
Stock-based
employee compensation
|
551,489 | 534,767 | ||||||
Stock-based
non-employee compensation
|
1,998 | 4,119 | ||||||
Non-cash
expense under a Development Agreement
|
309,375 | 241,901 | ||||||
Stock-based
compensation to Board of Directors and Scientific Advisory
Board
|
71,524 | 116,628 | ||||||
Gain
on stock warrant liability
|
(173,242 | ) | — | |||||
(Increase)
decrease in assets:
|
||||||||
Accounts
receivable
|
637,086 | 80,648 | ||||||
Other
current assets
|
(20,988 | ) | 90,525 | |||||
Other
assets
|
(13,719 | ) | 2,500 | |||||
Increase
(decrease) in liabilities:
|
||||||||
Accounts
payable and accrued expenses
|
(498,481 | ) | 285,687 | |||||
Deferred
license fees
|
(170,400 | ) | (128,711 | ) | ||||
Deferred
revenue
|
(426,567 | ) | (111,371 | ) | ||||
Net
cash used in operating activities
|
(4,505,171 | ) | (2,645,283 | ) | ||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchase
of property and equipment
|
(95,801 | ) | (219,578 | ) | ||||
Purchase
of short-term investments
|
(36,479,245 | ) | (30,074,485 | ) | ||||
Proceeds
from sale of short-term investments
|
19,655,000 | 10,922,000 | ||||||
Net
cash used in investing activities
|
(16,920,046 | ) | (19,372,063 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds
from the exercise of common stock options and warrants
|
— | 1,575,848 | ||||||
Payment
of withholding taxes related to stock-based employee
compensation
|
(831,877 | ) | (727,118 | ) | ||||
Net
cash (used in) provided by financing activities
|
(831,877 | ) | 848,730 | |||||
DECREASE
IN CASH AND CASH EQUIVALENTS
|
(22,257,094 | ) | (21,168,616 | ) | ||||
CASH
AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
28,321,581 | 33,870,696 | ||||||
CASH
AND CASH EQUIVALENTS, END OF PERIOD
|
$ | 6,064,487 | $ | 12,702,080 | ||||
The
following non-cash activities occurred:
|
||||||||
Unrealized
gain on available-for-sale securities
|
$ | 14,768 | $ | 83,589 | ||||
Common
stock issued to Board of Directors and Scientific Advisory Board that was
earned in a previous period
|
309,802 | 299,968 | ||||||
Common
stock issued to employees that was earned in a previous
period
|
845,745 | 904,939 | ||||||
Common
stock issued for royalties that was earned in a previous
period
|
81,954 | 66,403 | ||||||
Common
stock issued to non-employee that was earned in a previous
period
|
— | 991 |
1.
|
BACKGROUND
|
2.
|
BASIS
OF PRESENTATION
|
3.
|
CASH,
CASH EQUIVALENTS AND SHORT-TERM
INVESTMENTS
|
Amortized
|
Unrealized
|
Aggregate
Fair
|
||||||||||||||
Investment
Classification
|
Cost
|
Gains
|
(Losses)
|
Market
Value
|
||||||||||||
March
31, 2009 –
|
||||||||||||||||
Certificates
of deposit
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$ | 12,196,897 | $ | 37,335 | $ | (7,640 | ) | $ | 12,226,592 | |||||||
U.S.
Government bonds
|
53,778,356 | 111,723 | (153 | ) | 53,889,926 | |||||||||||
$ | 65,975,253 | $ | 149,058 | $ | (7,793 | ) | $ | 66,116,518 | ||||||||
December
31, 2008 –
|
||||||||||||||||
Certificates
of deposit
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$ | 10,318,000 | $ | 35,577 | $ | (3,323 | ) | $ | 10,350,254 | |||||||
U.S.
Government bonds
|
38,688,122 | 96,121 | (1,878 | ) | 38,782,365 | |||||||||||
$ | 49,006,122 | $ | 131,698 | $ | (5,201 | ) | $ | 49,132,619 |
Fair
Value Measurements, Using
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||||||||||||||||
Total
carrying value as of March 31, 2009
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Quoted
prices in active markets (Level 1)
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Significant
other observable inputs
(Level
2)
|
Significant
unobservable inputs
(Level
3)
|
|||||||||||||
Investments
|
$ | 66,116,518 | $ | 66,116,518 | $ | — | $ | — | ||||||||
4.
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RESEARCH
AND LICENSE AGREEMENTS WITH PRINCETON, USC AND
MICHIGAN
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5.
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EQUITY
AND CASH COMPENSATION UNDER THE PPG
AGREEMENTS
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6.
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SHAREHOLDERS’
EQUITY
|
Unrealized
|
||||||||||||||||||||||||||||||||
Preferred
Stock,
|
Additional
|
Gain
on
|
||||||||||||||||||||||||||||||
Series
A
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Common
Stock
|
Paid-In
|
Available-for-
|
Accumulated
|
Total
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
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Capital
|
Sale
Securities
|
Deficit
|
Equity
|
|||||||||||||||||||||||||
BALANCE,
JANUARY 1, 2009
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200,000 | $ | 2,000 | 36,131,981 | $ | 361,320 | $ | 256,696,849 | $ | 126,497 | $ | (180,472,203 | ) | $ | 76,714,463 | |||||||||||||||||
Cumulative
effect of the adoption of EITF 07-5, see Note 2
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- | - | - | - | (6,557,928 | ) | - | 3,868,818 | (2,689,110 | ) | ||||||||||||||||||||||
Stock-based
employee compensation, net of shares withheld for taxes
(A)
|
- | - | 138,924 | 1,389 | 1,205,675 | - | - | 1,207,064 | ||||||||||||||||||||||||
Stock-based
non-employee compensation
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- | - | 360 | 4 | 1,994 | - | - | 1,998 | ||||||||||||||||||||||||
Issuance
of common stock to Board of Directors and Scientific Advisory Board
(B)
|
- | - | 45,050 | 451 | 380,875 | - | - | 381,326 | ||||||||||||||||||||||||
Issuance
of common stock in connection with Development and License Agreements
(C)
|
- | - | 12,350 | 123 | 84,645 | - | - | 84,768 | ||||||||||||||||||||||||
Net
loss
|
- | - | - | - | - | - | (5,569,599 | ) | (5,569,599 | ) | ||||||||||||||||||||||
Unrealized
gain on available-for-sale securities
|
- | - | - | - | - | 14,768 | - | 14,768 | ||||||||||||||||||||||||
Comprehensive
loss
|
(5,554,831 | ) | ||||||||||||||||||||||||||||||
BALANCE,
MARCH 31, 2009
|
200,000 | $ | 2,000 | 36,328,665 | $ | 363,287 | $ | 251,812,110 | $ | 141,265 | $ | (182,172,984 | ) | $ | 70,145,678 | |||||||||||||||||
(A)
|
Includes
$845,745 that was earned in a previous period and charged to expense when
earned, but issued in 2009.
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(B)
|
Includes
$309,802 that was earned in a previous period and charged to expense when
earned, but issued in 2009.
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(C)
|
The
Company was required to pay Motorola royalties of $163,916 for the year
ended December 31, 2008. As of March 2009, the Company
issued to Motorola 12,015 shares of the Company’s common stock,
valued at $81,954, and paid Motorola $81,962 in cash to satisfy the
royalty obligation.
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7.
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STOCK-BASED
COMPENSATION
|
8.
|
COMMITMENTS
AND CONTINGENCIES
|
9.
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CONCENTRATION
OF RISK
|
·
|
the
timing of our receipt of license fees and royalties, as well as fees for
future technology development and evaluation;
|
·
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the
timing and volume of sales of our OLED materials for both commercial usage
and evaluation purposes;
|
·
|
the
timing and magnitude of expenditures we may incur in connection with our
ongoing research and development activities; and
|
·
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the
timing and financial consequences of our formation of new business
relationships and alliances.
|
·
|
an
increase in operating expenses of $1,003,725, and
|
·
|
a
decrease in interest income of $665,794,
|
·
|
offset
to some extent by an increase in revenues of $117,039 and a gain on stock
warrant liability of $173,242.
|
ITEM
4.
|
ITEM
1.
|
ITEM
1A.
|
Period
|
Total
Number of Shares Purchased
|
Average
Price Paid per Share
|
Total
Number of Shares Purchased as Part of Publicly Announced
Program
|
Approximate
Dollar Value of Shares that May Yet Be Purchased Under the
Program
|
||||||||||||
January
1 – January 31
|
-- | $ | -- | n/a |
--
|
|||||||||||
February
1 – February 28
|
-- | -- | n/a | -- | ||||||||||||
March
1 – March 31
|
567 | 6.57 | n/a | -- | ||||||||||||
Total
|
567 | $ | 6.57 | n/a | -- |
ITEM
3.
|
ITEM
5.
|
ITEM
6.
|
Exhibit
|
|||
Number
|
Description
|
||
10.1*+
|
Amendment
No. 1 to the OLED Technology License and Technical Assistance Agreement
between the registrant and Kyocera Corporation, dated as of January 22,
2009
|
||
10.2*+
|
Amendment
No. 1 to the Commercial OLED Material Supply Agreement between the
registrant and Kyocera Corporation, dated as of January 22,
2009
|
||
10.3*
|
Agreement
and Consent to Assignment and Assumption of Patent License Agreement
between the registrant and Samsung SDI Co., Ltd., dated as of February 4,
2009
|
||
10.4*
|
Amendment
No. 1 to the Commercial Supply Agreement between the registrant and Chi
Mei EL Corporation, dated as of March 16, 2009
|
||
10.5*+
|
Amendment
No. 1 to the Settlement and License Agreement between the registrant and
Seiko Epson Corporation, dated as of March 31, 2009
|
||
31.1*
|
Certifications
of Steven V. Abramson, Chief Executive Officer, as required by
Rule 13a-14(a) or Rule 15d-14(a)
|
||
31.2*
|
Certifications
of Sidney D. Rosenblatt, Chief Financial Officer, as required
by Rule 13a-14(a) or Rule 15d-14(a)
|
||
32.1**
|
Certifications
of Steven V. Abramson, Chief Executive Officer, as required by
Rule 13a-14(b) or Rule 15d-14(b), and by 18
U.S.C. Section 1350. (This exhibit shall not be
deemed “filed” for purposes of Section 18 of the Securities Exchange
Act of 1934, as amended, or otherwise subject to the liability of that
section. Further, this exhibit shall not be deemed to be
incorporated by reference into any filing under the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as
amended.)
|
||
32.2**
|
Certifications
of Sidney D. Rosenblatt, Chief Financial Officer, as required by
Rule 13a-14(b) or Rule 15d-14(b), and by 18
U.S.C. Section 1350. (This exhibit shall not be
deemed “filed” for purposes of Section 18 of the Securities Exchange
Act of 1934, as amended, or otherwise subject to the liability of that
section. Further, this exhibit shall not be deemed to be
incorporated by reference into any filing under the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as
amended.)
|
*
|
Filed
herewith.
|
|
**
|
Furnished
herewith.
|
|
+
|
Confidential
treatment has been requested as to certain portions of this exhibit
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
|
|
Note:
Any of the exhibits listed in the foregoing index not included with this
report may be obtained, without charge, by writing to
Mr. Sidney D. Rosenblatt, Corporate Secretary,
Universal Display Corporation, 375 Phillips Boulevard, Ewing, New
Jersey 08618.
|
Date:
May 7, 2009
|
By:
/s/ Sidney D.
Rosenblatt
|
Sidney
D. Rosenblatt
|
|
Executive
Vice President and Chief Financial
Officer
|
Kyocera
Corporation
|
Universal
Display Corporation
|
|||
By:
|
/s/ Y. Matsumura
|
By:
|
/s/ Steven V. Abramson
|
|
Name:
|
Yasushi Matsumura
|
Name:
|
Steven V. Abramson
|
|
Title:
|
Executive Officer
|
Title:
|
President
|
|
General Manager, Corporate Display Group
|
||||
Date:
|
2009 Jan. 19
|
Date:
|
Jan. 22,
2009
|
Kyocera
Corporation
|
Universal
Display Corporation
|
|||
By:
|
/s/ Y. Matsumura
|
By:
|
/s/ Steven V. Abramson
|
|
Name:
|
Yasushi Matsumura
|
Name:
|
Steven V. Abramson
|
|
Title:
|
Executive Officer
|
Title:
|
President
|
|
General Manager, Corporate Display Group
|
||||
Date:
|
2009 Jan. 19
|
Date:
|
Jan. 22,
2009
|
1.
|
Assignment
. Assignor
hereby assigns, transfers and conveys to Assignee all of the Assignor’s
rights, titles, obligations, and interest in, to and under the License
Agreement and the Supplemental Agreement as of the Assumption
Date.
|
2.
|
Assumption; Bound as
an Original Party.
|
(a)
|
Assignee
unconditionally assumes and shall promptly, fully, completely and
faithfully keep, fulfill, observe, perform and discharge each and every
covenant and obligation that may accrue and become performable, due or
owing under the License Agreement and the Supplemental Agreement on
Assignor’s part to be performed.
|
(b)
|
Assignee
shall perform the obligations of Assignor under the License Agreement and
the Supplemental Agreement and Assignee shall be bound by all of the terms
and conditions of the License Agreement and the Supplemental Agreement in
every way as if Assignee were originally a party
thereto.
|
(c)
|
UDC
shall respect the Assignee as an original party to the License Agreement
and the Supplemental Agreement and accordingly shall continue to perform
all of its obligations under the License Agreement and the Supplemental
Agreement, and UDC shall be bound by all of the terms and conditions of
the License Agreement and the Supplemental Agreement in every respect as
if Assignee were originally a party
thereto.
|
3.
|
Assignor
shall be bound to and responsible for the obligations set forth in the
License Agreement and the Supplemental Agreement accrued before the
Assumption Date and UDC hereby releases Assignor from any and all
covenants, liability or obligations under the License Agreement and the
Supplemental Agreement that may arise on or after the Assumption Date;
provided, however, that the confidentiality obligations bound to Assignor
under Article 6 of the License Agreement shall remain applicable even
after the Assumption Date.
|
4.
|
Assignee
and UDC hereby agree to the assignment of the License Agreement as
prescribed hereunder and to fulfill its obligations under the same to the
other party.
|
5.
|
Pursuant
to Article 9.7 of the License Agreement, Assignee hereby notifies to UDC
that all future communications and notice shall be addressed to Assignee
as follows:
|
6.
|
All
the capitalized terms not defined herein shall have the meaning set forth
in the License Agreement.
|
7.
|
All
the terms and conditions under the License Agreement and the Supplemental
Agreement shall remain unchanged and continue in effect unless otherwise
amended hereunder.
|
UNIVERSAL
DISPLAY CORPORATION
|
||
By:
|
/s/
Steven V. Abramson
|
|
Name:
|
Steven
V. Abramson
|
|
Title:
|
President
|
Assignor
|
Assignee
|
|||
SAMSUNG
SDI CO., LTD.
|
SAMSUNG
MOBILE DISPLAY CO., LTD.
|
|||
By:
|
/s/ Jae Wan Chi
|
By:
|
/s/ Sungrak Son
|
|
Name:
|
Jae Wan Chi
|
Name:
|
Sungrak Son
|
|
Title:
|
Executive Vice President
|
Title:
|
Vice President
|
|
General Counsel
|
Chi
Mei EL Corporation
|
Universal
Display Corporation
|
|||
By:
|
/s/ Sung Soo Park
|
By:
|
/s/ Steven V. Abramson
|
|
Name:
|
Sung Soo Park
|
Name:
|
Steven V. Abramson
|
|
Title:
|
President
|
Title:
|
President
|
|
Date:
|
2009.2.26
|
Date:
|
March 16, 2009
|
1.
|
The
deadline for the credit referred to in the fifth (5th) sentence of Article
4 of the Agreement is hereby extended [The confidential material contained
herein has been omitted and has been separately filed with the
Commission.]
|
2.
|
Except
as set forth in this Amendment No. 1, all other terms and conditions of
the Agreement shall remain in full force and
effect.
|
UNIVERSAL
DISPLAY CORPORATION
|
SEIKO
EPSON CORPORATION
|
|||
By:
|
/s/ Steven V. Abramson
|
By:
|
/s/ Mitsuro Atobe
|
|
Name:
|
Steven V. Abramson
|
Name:
|
Mitsuro Atobe
|
|
Title:
|
President
|
Title:
|
Deputy General
|
|
Administrative Manager,
|
||||
Corporate Research &
|
||||
Development Division
|
||||
Date:
|
March 31, 2009
|
Date:
|
24 Mar.
2009
|
Date:
May 7, 2009
|
By:
/s/ Steven V.
Abramson
|
Steven
V. Abramson
|
|
President
and Chief Executive
Officer
|
Date:
May 7, 2009
|
By:
/s/ Sidney D.
Rosenblatt
|
Sidney
D. Rosenblatt
|
|
Executive
Vice President and Chief Financial
Officer
|
(1)
|
The
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 Report fairly presents, in all material
respects, the financial condition and result of operations of the
Company.
|
Date:
May 7, 2009
|
By:
/s/ Steven V.
Abramson
|
Steven
V. Abramson
|
|
President
and Chief Executive
Officer
|
(1)
|
The
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 Report fairly presents, in all material
respects, the financial condition and result of operations of the
Company.
|
Date:
May 7, 2009
|
By:
/s/ Sidney D.
Rosenblatt
|
Sidney
D. Rosenblatt
|
|
Executive
Vice President and Chief Financial
Officer
|