UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the year ended December 31, 2004
Commission File Number 0-25882
EZENIA! INC.
(Exact name of registrant as specified in its charter)
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DELAWARE |
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04-3114212 |
Northwest Park, 154 Middlesex Turnpike, Burlington, Massachusetts 01803
(Address of principal executive offices, including zip code)
(781) 505-2100
(Registrant’s telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
None
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock $.01 par value
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not 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-K or any amendment to this Form 10-K. Yes x No o
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes o No x
The aggregate market value of the voting and non-voting common stock held by non-affiliates of the Registrant was $8,865,802 (computed by reference to the price at which the Registrant’s common stock was last sold on the OTC Bulletin Board on June 30, 2004). Shares of Common Stock held by each executive officer and director have been excluded since such persons may be deemed affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
The number of shares outstanding of the Registrant’s common stock as of March 15, 2005 was 15,063,005.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive Proxy Statement to be delivered to Shareholders in connection with the Annual Meeting of Shareholders to be held May 25, 2005 are incorporated by reference into Part III hereof. With the exception of the portion of such Proxy Statement that is expressly incorporated herein, such Proxy Statement shall not be deemed filed as part of this Annual Report on Form 10-K.
Ezenia!
Inc.
2004 Form 10-K Annual Report
Table of Contents
This Report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to certain risks and uncertainties, including without limitation those discussed in Item 7 under the heading “Factors which may affect future operations.” Such forward-looking statements speak only as of the date on which they are made, and the Company cautions readers not to place undue reliance on such statements.
The Company’s trademarks include Ezenia!, the Ezenia! Logo, InfoWorkSpace, LaunchPad, and Encounter. All other trademarks referred to in this document are property of their respective companies.
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Founded in 1991, Ezenia! Inc. (“Ezenia” or the “Company”) currently develops and markets products that enable organizations to provide high-quality group communication and collaboration capabilities to commercial, governmental, consumer and institutional users. The Company’s products allow individuals and groups, regardless of proximity constraints, to interact and share information in a natural, spontaneous way—voice-to-voice, face-to-face, mouse-to-mouse, keyboard-to-keyboard, flexibly, securely and in real-time. Using our products, individuals can interact through a natural meeting experience, allowing groups to work together effectively and disseminate vital information quickly in a secure environment.
Ezenia offers one of the most comprehensive lines of collaborative products available commercially. Ezenia’s InfoWorkSpace (IWS) software product, combined with its legacy videoconferencing products, enables voice communication, instant messaging, white boarding, virtual workspaces, and video conferences across a wide range of networks including local area-networks (LAN), intranets, the Internet, and circuit-based networks. Furthermore, because Ezenia products include both software only solutions and configurable hardware solutions, they can be deployed with relative ease at small sites or in locations with a large number of users.
Ezenia has historically sold its legacy videoconferencing products worldwide through leading resellers, integrators and marketers of video collaboration, and networking solutions, and will continue to do so as long as demand exists. Most recently, for the IWS product and services, Ezenia sells to the customers in the Federal government, mostly in the Department of Defense and the Intelligence Community, either directly, or in many instances, in partnership with the premier defense contractors and/or integrators. It is in Ezenia’s interest to leverage the partnerships with well-established contractors and/or integrators to further expand the deployment and provide the support of IWS in large-scale opportunities.
Company Background and Evolution—True Collaboration versus Videoconferencing
In 1991, Ezenia, known at the time as VideoServer, designed, developed, manufactured, and sold Multipoint Control Systems or Units (MCS or MCU) for both the circuit-oriented, Integrated Services Digital Network (ISDN)-based and packet-switched, Internet Protocol (IP)-based videoconferencing applications. The Company MCS were unique at the time with its PC-based, flexible hardware design approach and system configurations, leveraging commercial off-the-shelf base operating systems. Traditional videoconferencing vendors back then concentrated mostly on the development of more and more sophisticated, standard-based endpoints to be used in point-to-point videoconferencing. The Company focused its business, not on the endpoints, but on systems deployed in the infrastructure backroom, to enable three or more sites or parties involved in videoconferencing to properly communicate among themselves, by switching video sources based on audio processing of current and immediately preceding speakers. The Company’s technical advantages were derived by masking and compensating for incompatibilities between endpoints from different manufacturers, algorithmic transcoding, compensation for different bandwidth requirements, and simultaneous multi-windowed video arrangements on the monitor known as “Hollywood Squares”, just to name a few.
For the circuit-switched market segment, the Company offered the Series 2000 MCS which can scale up to forty eight (48) ports or sites with a variety of network capabilities including but not limited to V.35, T1and E1 interfaces, Asynchronous Transfer Mode (ATM) and Frame Relay. Multiple Series 2000 MCS can be cascaded together to allow for large-scale videoconferences. To this day, the Series 2000 MCS is still considered the cornerstone of rock solid reliability in the industry and in many customer installations. The Company still produces, ships, and provides support for the Series 2000 MCS.
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For the packet-switched market segment, the Company offered a low-end, software-only solution NetServer 1000 which provides a cost-effective solution for departmental applications. For comparable deployments to its ISDN counterparts, the Company offered the NetServer 3000 MCS which can also scale up to forty eight (48) ports or sites. Similarly, multiple NetServer 3000 MCS can also be cascaded together to support large-scale video conferences. The Company also offered the NetGate which, with its associated gatekeeper software, controls, monitors, polices, and facilitates communications traffic between the ISDN and IP environments. The Company still produces, ships, and provides support for the NetServer and NetGate MCS.
In the late 90’s, the Company fully realized the limitations and narrowed applicability of the videoconferencing applications which, among many deficiencies, are monolithic, require highly specialized support and services, stand apart from the normal office environment that most information workers are accustomed to, and behave at best unfriendly with the need to truly collaborate and disseminate information in real time. Contrary to how most videoconferencing vendors would like to indoctrinate potential customers, video—in particular talking heads as in the case of most video conferences—was and is, now more than ever, far from being the “piece de resistance” of true, meaningful real-time collaboration. Furthermore, its monolithic approach, whereby you either get a successful videoconference session or get nothing, relegates all other more critical collaboration activities second to video talking heads. Most importantly, the lack of presence awareness detection and inability to leverage the web for ease of access prevent flexible, on-demand, free-flowing collaboration sessions whereby participants can come, go, or be invited at will.
In March 2001, the Company completed the first phase of its transformation with the acquisition of the IWS business from General Dynamics. As an application solution and technology built on top of Placeware’s (see Third Party Technology note below) web conferencing technology, IWS allows users to be aware of the online presence of colleagues, enables true multimedia collaboration sessions starting with the simplest instant messaging (keyboard-to-keyboard) and expanding to the most complex all-encompassing (mouse-to-mouse) sharing and dissemination of mission critical information simultaneously with in-session, super-imposed audio conferencing and/or video streaming, leverages commercially off-the-shelf base operating systems such as the Windows and Solaris platforms, and fits into the virtual office environment that most information workers are familiar with.
The use and growth of real-time collaborative technologies within commercial or governmental enterprises, while still early in its adoption curve, are beginning to accelerate. The investment in information and collaborative technologies helps customers flatten their organizations, improve enterprise wide communication, shorten the decision-making process, and facilitate real-time reactions to critical issues. Rather than just providing access to inert data stored on a server, the goal today is to find ways to enable information workers to collaborate and share their expertise to derive knowledge from databases in real time and in a secure environment. Collaborative technologies are about creating informational value through better, faster and more efficient human interaction and cooperation, not just more data. Businesses and governmental organizations today need solutions that make it easier for people to work together, share information and expertise, coordinate activities across departments, networks, agencies, building complexes, facilities spread all over the country, and field deployments around the world.
Ezenia’s expertise is in developing products that deliver highly secure and flexible support for informational collaboration, in-session audio conferencing, and video streaming capabilities across a wide range of platforms. The Company’s products have been designed with a scaleable, modular architecture to give customers the flexibility to add capacity, processing power and conferencing features as the customer network and application requirements grow. Using a common set of hardware and software building blocks, customers can choose from a wide range of product configurations that differ in capacity, price,
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network connectivity and features, all of which share the same operating software user interface. Products may be configured for use in customer premises environments or may be configured with specialized packaging for use in a telephone carrier’s central office setting. The Company believes a key differentiator for its products are the built-in robust security features, allowing them to be installed in some of the highest clearance and security sites in the market.
InfoWorkSpace
InfoWorkSpace is a comprehensive suite of collaboration applications designed to allow any organization to more efficiently communicate, particularly when attempting to work as, and within, a group. From an overall perspective, IWS when used effectively can reduce or even eliminate the dependency on travel, traditional video conferencing, traditional audio conferencing and phone, and even e-mail and file servers. Essentially, IWS is like a corporate campus or enterprise whose resources can be accessed by an information worker through his or her own desktop or laptop PC. Users can browse through the virtual campus, facility, or building to locate the room to be used for a meeting, or just pick the needed contact(s) and initiate the meeting with the click of the mouse.
Our customers, including the U.S. Intelligence Community, the U.S. Joint Forces Command, and various branches of the U.S. Armed Forces including the Marines, Navy, Air Force and Army, have leveraged the flexibility of IWS to aid in a myriad of missions. From daily mission briefs to Medivac procedures in Afghanistan to operational support in Fallujah, IWS has increasingly become a vital part of the U.S. defense network. IWS’s stability, scalability and security allow our customers to depend on our software to complete mission-critical assignments and save lives in some of the world’s most dangerous areas.
At a basic level, IWS is a cross-platform solution in a box, supporting both UNIX and Windows base operating systems. A standard software suite comes complete with our server software package, database, application server, and user directory along with a number of ancillary add-ons. This provides a self-sufficient workgroup environment for a user base of up to several hundred users. However, with a few simple system configurations, IWS servers can be federated in such a way that multiple servers can trust one another in order to support collaboration across an enterprise with thousands of war fighters or participants.
IWS security infrastructure is built upon the best practices that have been in use in operating systems for decades. Much like a UNIX administrator can limit access to a directory or even a file to a limited set of users, IWS administrators can lock rooms down to restrict users from seeing sensitive data that is outside their area of responsibility. Permission-based access allows administrators to finely tune a user’s access profile to the file level, if necessary. Data can be encrypted using standard SSL protocols and access can be controlled with PKI and X.509 certificates. All data within the application can be audited and searched for specific words or patterns of words. IWS provides a high level of security capabilities as well as a safety net to capture any breaches that may arise from human errors.
The stability, scalability, flexibility and security capabilities of IWS are critically important for our customers, but the true power of IWS is obviously in the collaboration applications available. Users can participate in an interactive conference with absolutely no set up procedures. This is a significant leap forward from where the industry was just a few years ago, using videoconferences as the only interactive medium. With IWS, no longer is a heavy piece of hardware required at each terminal point of collaboration. No longer is it necessary to schedule a conference with a bridge operator, and no longer does it require a whole new network infrastructure to support an interactive conferencing capability. Information workers, once logged in to IWS can initiate a conference by going to a virtual room and inviting the participants as needed. Rooms are either pre-defined or created on demand as the needs dictate. Once inside a room, either by joining or being invited into a session, participants can have an audio
5
conference straight from the software. No set up is required. No additional cost is incurred. As a matter of fact, participants can be in multiple rooms at the same time, offering an even more productive virtual environment than in the physical world. Participants can share and work on documents from the file cabinet associated with a room. Users can have an interactive white board session and save the results. Users can also manage their calendar and participate in message boards and save that information back to the server where they can access it any time from any place.
A high-level summary of IWS features and functions is listed below:
· Text chat, in a one-to-one arrangement, in a conference environment, or in multiple combinations of one-on-one and/or conference environments
· Audio chat, in a one-to-one arrangement, in a conference environment, or in multiple combinations of one-on-one and/or conference environments
· Interactive whiteboard where all users can see and modify the white board in real time
· Application sharing, where the screen view of any application on any desktop or laptop PC of any information worker can be broadcasted to all other participants
· Secured file cabinet, from which permission-based access allows for documents to be stored, retrieved, and monitored at any time from any place
· SSL and PKI encryption, when configured, renders traffic secure across the wire
· Full system auditing, which allows all data and actions to be audited and searchable
· Instant messaging, a lightweight application that provides all interactive capabilities
· Virtual meeting area, a more robust application that provides both the real-time collaborative capabilities as well as the static functions like file cabinet, message board, calendaring, etc.
Encounter MCS Family
The Encounter product line includes:
· Encounter 3000 NetServer: real-time collaboration server designed to support the large enterprise and service provider customers.
· Encounter 3000 NetGate: gateway solution that allows traditional videoconferencing systems to participate in IP-based collaboration sessions.
· Encounter 1000 NetServer: real-time collaboration server geared towards smaller, departmental workgroups or more distributed organizations
Series 2000 MCS
The Series 2000 MCS product line, designed for switched digital circuit networks, includes a number of platform configurations that can be expanded by the customer selection of optional processing modules and software applications. The following table lists the configurations offered by the Company:
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MODEL |
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CAPACITY |
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TARGET MARKET/APPLICATION |
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2007 |
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8 users |
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Mid-range CPE for distributed network environments |
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2020 |
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48 users |
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Large CPE/central office network with extensive multimedia applications |
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CO |
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48 users |
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High availability central office server |
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At this time, Ezenia markets its IWS products and related services to customers within the US federal government, primarily to the US Department of Defense and to the US Intelligence Community worldwide. Ezenia also provides these products and services to the defense and intelligence organizations of foreign allies of the United States government.
The IWS products and services are sold on an annual subscription and renewal basis, during which software updates and basic technical support are included as part of the base offerings. Enhanced service offerings are also offered in a subscription model. Training, installation, and customization are sold on an incidental basis.
The government marketplace worldwide is best understood as a matrix of customers, sales vehicles (contracts), and sales channels. Ezenia employs a sales model which is an analog to this government market matrix. IWS products and related services are made available to specific segments of the government marketplace using various vehicles, including Ezenia’s own GSA Schedule, and multiple channels both directly, with the Company’s own sales force, and indirectly. For indirect channels, Ezenia partners with General Dynamics, SAIC, and Northrop Grumman among others.
In fiscal year 2004, approximately 60% of the Company sales of IWS products and related services were attributed to our indirect channels and Ezenia’s top three customers were US Joint Forces Command, Defense Intelligence Agency, and the US Army.
Meanwhile, our legacy MCS sales were primarily to international customers and end users. Ezenia delivered these products through distributors, dealers, vertical market resellers, and systems integrators, as well as directly to end-users
Revenue from international markets accounted for approximately 2%, 14%, and 24% of the Company’s revenue for the years ended December 31, 2004, 2003, and 2002, respectively. Ezenia! conducts its sales and marketing activities from its principal offices in Burlington, Massachusetts, as well as from two other sales locations in the United States.
Research and Product Development
The Company believes that its future success depends on its ability to continue to enhance and expand its existing enterprise collaboration products and to develop new products that maintain its technology leadership. Ezenia has invested and will continue to invest in the development of products and core technologies while also leveraging the integration of “best-of-breed” software components through strategic partnerships. Extensive product development input is obtained via direct feedback from end users and suggested improvements from strategic partners and resellers. The Company carefully monitors migration of industry standards and remains committed to developing products utilizing such standards. This includes the development of interoperable collaboration products to meet either industry needs and/or DOD-driven interoperability criteria, while maintaining a keen focus on the security aspects of enterprise collaboration, including solutions in the Web conferencing arena.
As of December 31, 2004, Ezenia’s research and development staff consisted primarily of software engineers augmented with US-based and US-citizen software contractors. Many of our software engineers carry top-secret levels of security clearance. The Company’s net research and development expenditures were approximately $1.1 million, $1.9 million, and $4.6 million in 2004, 2003 and 2002, representing approximately 10%, 23%, and 41% of revenue, respectively. All software development costs have been expensed as incurred because costs eligible for capitalization have not been material to date.
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The Company provides technical support and services to its resellers and direct customers. A high level of continuing service and support is critical to the Company’s objective of developing long-lasting relationships with customers and partners. The Company’s partners and resellers offer a broad range of support including installation, maintenance and on-site and headquarters-level technical support of products to their end-user customers. Ezenia provides a comprehensive service program including problem management, training, diagnostic tools, software updates and upgrades, as well as spare parts programs to facilitate and supplement the efforts of our partners and resellers.
The Company offers a technical support hotline to its resellers and customers, which is staffed by our network engineers who generally provide either immediate or same-day responses to most questions. As our products have built-in remote diagnostic capabilities, most problems can be diagnosed without incurring actual travel and on-site visits. When necessary, however, support engineers are dispatched to the customer’s facility for critical situations. All of our support engineers carry top-secret level of security clearance.
With respect to the Series 2000 and Encounter MCS, the Company warranties related software and hardware products for 90 days. The Company also offers post-warranty support programs ranging from services on a time-and-material basis to full-service contracts on a 24-hour, 7-day-a-week basis as well as training courses.
Manufacturing—Series 2000 and Encounter Systems
The Company’s manufacturing operations consist primarily of materials management, quality control, test engineering, production, shipping and logistics related to its legacy videoconferencing hardware products. The Company employs an outsourced manufacturing model in which it designs the significant hardware subassemblies for its products and uses independent third-party contract assembly companies to perform printed circuit board assembly and other production activities with internal efforts generally limited to final product configuration, assembly and testing. This manufacturing model offers the capability to quickly fulfill orders with limited lead times thus providing enhanced customer satisfaction and improved inventory management. Because of the generally short cycle between order and shipment and because the majority of the Company’s sales in each quarter result from orders booked in that quarter, the Company does not have a material backlog. The Company achieved International Standard Organization (ISO) 9002 certification in 1994.
The Company utilizes certain technology which it licenses from third parties, including software which is integrated with internally developed software, and used in the Company’s products to perform key functions. There can be no assurance that functionally similar technology will continue to be available on commercially reasonable terms in the future, or at all. In particular, in February 2005 the Company entered into a new agreement with Microsoft Corporation, with an effective date of January 1, 2005, to extend an existing software distribution license agreement through December 2007. The software distribution license agreement allows the Company to integrate Microsoft’s live communication software into the Company’s IWS product line.
The market for multimedia collaboration products is highly competitive. For our InfoWorkSpace software product, we consider our primary real-time collaboration competitors to be IBM Lotus, Documentum and Groove Networks. We also face competition or potential competition from companies that provide similar, but not directly competing products, such as Centra Software, WebEx
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Communications, Oracle, Cisco Systems, and Microsoft, or companies that could expand their offerings and develop a product similar to ours. Many of these companies, as well as other current and potential competitors, have substantially greater financial, technical and sales and marketing resources than the Company. If we are unable to retain our existing customers in the US government, or are unable to convince a sufficient number of new companies or customers with an interest in collaborative technologies to adopt our InfoWorkSpace collaborative software product over alternative technologies marketed by our competitors, our financial results will suffer, through price reductions and loss of market share.
With respect to our legacy videoconferencing hardware products, we consider our primary videoconferencing competitors to be Polycom, RADvision and Tandberg Telecom(Tandberg).
The principal competitive factors in the market for multimedia collaboration are, and should continue to be, breadth of capabilities, security, demonstrated interoperability, price, performance, network management capabilities, reliability and customer support. We plan to compete by offering secure collaboration and enterprise products with a broad range of capabilities and high performance. However, we cannot be certain that potential customers will be attracted to our products, especially if our competitors were to invest substantially more money into their products and technology.
The Company relies on a combination of contractual rights, trade secrets and copyright laws to establish and protect its intellectual property rights. The Company believes that, because of the rapid pace of technological change in the data communications and telecommunications industries, the intellectual property protection for its products is only one factor in the Company’s success, complementing the knowledge, abilities and experience of the Company’s employees, the frequency of its product enhancements, its relationships with its partners, its relationships with its customers and their satisfaction with the performance of IWS, the effectiveness of its marketing activities, and the responsiveness and quality of its services.
In August 2002, the Company entered into an agreement with Tandberg Telecom AS to sell all patents and pending applications related to its videoconferencing products, which was completed in October 2002. In exchange for an up-front license fee of $1.25 million, a loan for an additional $1.25 million which was forgiven at the closing, and an additional $2.4 million also received at the closing, the Company granted Tandberg a fully paid, non-exclusive, non-transferable license under the patents and pending applications relating to the Company’s videoconferencing technology (the video patent portfolio). Additionally, the Company retained a fully paid, non-exclusive, non-transferable license for the Company’s use in connection with its videoconferencing and enterprise collaboration products.
In June 2000, the Company settled its patent infringement suit against Accord Networks Ltd. (Accord) in the United States District Court for the District of Massachusetts. The settlement agreement provided, among other things, that the Company receive $6.5 million, which the Company received net of foreign tax withholding of $975 thousand, pending a resolution of certain tax matters related to the settlement with the tax authorities in Israel. In April 2004, the Company reached a settlement agreement with the Israeli Tax Commission (ITC), resulting in the receipt by the Company of cash proceeds related to the disputed amount, net of interest earned and associated fees, of approximately $706 thousand.
At December 31, 2004, the Company employed a total of 35 persons, including 11 in research and development, 8 in customer support, 9 in sales and marketing, and 7 in finance and administration. None of the Company’s employees are represented by a labor organization.
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The Company’s success depends, to a significant degree, upon the continuing contributions of its key management, sales, marketing and research and development personnel, many of whom would be difficult to replace, including Khoa Nguyen, the Company’s Chief Executive Officer, President and Chief Financial Officer. Early in 2004, Mr. Nguyen experienced a medical problem that required him to take a short-term leave of absence in order to recuperate and, since June 2004, Mr. Nguyen returned to work full time on a daily basis. The Company does not carry key-man life insurance on any of its employees, including Mr. Nguyen. The Company does not have employment contracts with its key personnel other than Mr. Nguyen. The Company believes that its future success will depend in large part upon its ability to attract and retain such key employees.
Executive Officer of the Registrant
Khoa D. Nguyen, age 51, is the sole executive officer of the Company. Mr. Nguyen has served as a Director since December 1997 and was named Chairman of the Board of Directors in March 2000. Mr. Nguyen has served as President and CEO of the Company since April 1998 and as the Chief Financial Officer since August 2002. Previously he had been Executive Vice President and Chief Operating Officer of the Company since September 1997. Prior to joining the Company, Mr. Nguyen was employed at PictureTel Corporation, a videoconferencing company, where he served as Chief Technology Officer and General Manager of the Group Systems and Networking Products divisions from February 1994 to August 1996, and Vice President of Engineering from January 1993 to February 1994. From August 1991 to December 1992, he was Vice President of Engineering at VTEL Corporation, a videoconferencing company, and has also held various engineering management positions with International Business Machines, a computer manufacturer.
Officers are elected on an annual basis to serve at the discretion of the Board of Directors.
ITEM 2. DESCRIPTION OF PROPERTY
The Company’s corporate office and principal research, development and manufacturing facility is located in Burlington, Massachusetts, in an approximately 9,000 square foot facility. On March 15, 2005 the Company entered into an agreement to move the Company’s corporate office to a 6,000 square foot facility located in Nashua, New Hampshire at the conclusion of its’ current lease. The Company decided to move into this facility as part of an effort to reduce expenses and excess capacity. The Company also has a sales and service office located in Sterling, Virginia and a research, development and service office located in Colorado Springs, Colorado. As of December 31, 2003, the Company had closed all foreign offices, and therefore, no longer has any leases outside of the United States.
The Company is engaged from time to time in routine lawsuits incidental to its business. Company management does not believe that any current proceedings, individually or in the aggregate, are likely to have a material effect on its business or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth quarter of fiscal 2004.
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ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
In May 2003, after failing to comply with certain continued listing standards for the NASDAQ SmallCap Market, including maintaining a minimum bid price of at least $1.00 per share, or the requirement for the company to have a minimum $2.5 million in stockholders equity, the Company received a delisting notification from NASDAQ. After exercising its right for an appeal of this determination to a NASDAQ Listing Qualifications Panel, the Panel determined to delist the Company’s securities in August 2003. Since then, the Company’s common stock has been quoted on the OTC Bulletin Board, under the symbol “EZEN.OB”. Prior to the delisting in August 2003, Ezenia’s common stock was listed on the NASDAQ SmallCap Market under the symbol “EZEN.” The following table sets forth, for the periods indicated, the high and low bid or sale prices per share of our common stock as reported on both the OTC Bulletin Board or, prior to the delisting noted above, the NASDAQ SmallCap Market.
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Quarter ended |
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March 31 |
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June 30 |
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September 30 |
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December 31 |
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2004 |
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Common stock price—high |
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$ |
.47 |
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$ |
.80 |
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$ |
1.26 |
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$ |
1.48 |
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Common stock price—low |
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$ |
.22 |
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$ |
.28 |
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$ |
.51 |
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$ |
.87 |
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2003 |
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Common stock price—high |
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$ |
.21 |
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$ |
.96 |
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$ |
.84 |
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$ |
.47 |
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Common stock price—low |
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