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As filed with the Securities and Exchange Commission on December 1, 2010

Registration No. 333-169279

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 3

to

Form S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

UNI-PIXEL, INC.

(Exact Name of Registrant as Specified in Its Charter)

8708 Technology Forest Pl, Ste 100

The Woodlands, TX 77381

(281) 825-4500

 (Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Reed J. Killion

President and Chief Executive Officer

Uni-Pixel, Inc.

8708 Technology Forest Place, Suite 100

The Woodlands, Texas 77381

(281) 825-4500

 (Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

As soon as practicable after the effective date of this Registration Statement.

(Approximate date of commencement of proposed sale to the public)

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box.  o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

CALCULATION OF REGISTRATION FEE

(1)          Includes 450,000 shares of our common stock that the underwriter has the option to purchase to cover over-allotments, if any.

(2)          Estimated in accordance with Rule 457(o) under the Securities Act of 1933, as amended, solely for the purpose of calculating the registration fee.  See "Underwriting" beginning on page 46 of the prospectus contained within this Registration Statement for information on underwriting arrangements relating to this Offering.

(3)          Previously paid.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED DECEMBER 1, 2010

PRELIMINARY PROSPECTUS

  3,000,000 Shares

Uni-Pixel, Inc.

Common Stock

We are offering 3,000,000 shares of our common stock.

Our common stock is quoted on the Over-the-Counter Bulletin Board (OTC Bulletin Board) under the symbol “UNXL.OB.”  Prior to the effectiveness of the registration statement of which this prospectus is a part, we will effect a reverse stock split anticipated to be on a 1-for-15 basis.  On November 29, 2010, the last reported sale price for our common stock was $7.20 per share (after giving effect to the anticipated 1-for-15 reverse stock split). We anticipate that the offering price will be $5.00 per share.  The aggregate price of the shares offered hereby, excluding shares that may be sold on exercise of the underwriter’s over- allotment option, is $15 million.

We have applied for listing of our common stock on The NASDAQ Capital Market under the symbol “UNXL,” which listing we expect to occur immediately following the consummation of this offering. No assurance can be given that our application will be approved. If the application is not approved, we will not complete this offering and the shares of our common stock will continue to be traded on the OTC Bulletin Board.

Investing in our common stock involves a high degree of risk. See “Risk Factors” beginning on page 6 for a discussion of information that should be considered in connection with an investment in our securities.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriter also may purchase up to an additional 450,000 shares of our common stock within 45 days of the date of this prospectus to cover over-allotments, if any, on the same terms set forth above.

In connection with this offering, we have also agreed to issue to MDB Capital Group LLC a warrant to purchase shares of our common stock in an amount up to 10% of the shares of common stock sold in this offering. If MDB Capital Group LLC exercises this warrant, we anticipate each share of common stock may be purchased at $6.00 per share (120% of the price of the shares of common stock sold in this offering).

The underwriter expects to deliver the shares on or about           , 2010.

MDB Capital Group LLC

The date of this prospectus is          , 2010.

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Unless otherwise stated or the context otherwise requires, the terms “Uni-Pixel,” “we,” “us,” “our” and the “Company” refer to Uni-Pixel, Inc. and its subsidiary on a consolidated basis.

You should rely only on the information contained in this prospectus.  We have not authorized anyone to provide you with additional or different information.  The information contained in this prospectus is accurate only as of the date on the front cover of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock.

No dealer, salesperson or any other person is authorized in connection with this offering to give any information or make any representations about us, the securities offered hereby or any matter discussed in this prospectus, other than those contained in this prospectus and, if given or made, the information or representations must not be relied upon as having been authorized by us. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any security other than the securities offered by this prospectus, or an offer to sell or a solicitation of an offer to buy any securities by anyone in any circumstance in which the offer or solicitation is not authorized or is unlawful.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND OTHER INFORMATION CONTAINED IN THIS PROSPECTUS

This prospectus contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or Exchange Act. Forward looking statements give our current expectations or forecasts of future events.  You can identify these statements by the fact that they do not relate strictly to historical or current facts.  You can find many (but not all) of these statements by looking for words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “would,” “should,” “could,” “may,” “will” or other similar expressions in this prospectus. These statements may be found under the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business” included in this prospectus, as well as in this prospectus generally.  In particular, these include statements relating to future actions, prospective products and technologies, future performance or results of anticipated products, expenses, and financial results. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

·                       Our limited cash and a history of losses;

·                       The limited number of suppliers for some of our components;

·                       Our market being characterized by rapidly advancing technology;

·                       Fluctuations in product demand;

·                       The impact of competitive products, technologies and pricing;

·                       Manufacturing capacity constraints and difficulties;

·                       Local, regional, national and international economic conditions and events and the impact they may have on us and our customers;

·                       Continued volatility in the credit and equity markets and the resulting effect on the general economy; and

·                       Our success at managing the risks involved in the foregoing items.

The forward-looking statements are based upon management’s beliefs and assumptions and are made as of the date of this prospectus. We undertake no obligation to publicly update or revise any forward-looking statements included in this prospectus or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise, except to the extent required by federal securities laws. Actual future results may vary materially as a result of various factors, including, without limitation, the risks outlined under the section entitled “Risk Factors” and matters described in this prospectus generally.  In light of these risks and uncertainties, there can be no assurance that the forward looking statements contained in this prospectus will in fact occur.  You should not place undue reliance on these forward looking statements.

Third Party Data

This prospectus also contains estimates and other information concerning our industry, including market size and growth rates, that are based on industry publications, surveys and forecasts, including those generated by the Company.  This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates.  Although we believe the information in these industry publications, surveys and forecasts is reliable, we have not independently verified the accuracy or completeness of the information.  The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors.

Over-Allotment Option

Unless otherwise indicated, information in this prospectus assumes that the underwriter will not exercise its option to purchase additional shares.

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PROSPECTUS SUMMARY

This summary highlights selected information contained elsewhere in this prospectus and does not contain all the information that you need to consider in making your investment decision. You should carefully read this entire prospectus, as well as the information to which we refer you, before deciding whether to invest in the common stock. You should pay special attention to the “Risk Factors” section of this prospectus to determine whether an investment in the common stock is appropriate for you.

This registration statement, including the exhibits and schedules thereto, contains additional relevant information about us and our capital stock. With respect to the statements contained in this prospectus regarding the contents of any agreement or any other document, in each instance, the statement is qualified in all respects by the complete text of the agreement or document, a copy of which has been filed or incorporated by reference as an exhibit to the registration statement.

We file annual, quarterly, and current reports, proxy statements, and other information with the SEC. You may read and copy any document we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. You can also request copies of the documents, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. These SEC filings are also available to the public from the SEC’s web site at http://www.sec.gov.

 About Uni-Pixel, Inc.

We are one of the technology leaders in the optical design and manufacturing of large area microstructured polymer film materials and related technologies for the display, flexible electronics, energy, transportation and entertainment industries.  Our microstructured polymer films, which we refer to as Performance Engineered Films (PEFs), are designed to lower the cost and improve functionality and performance of devices in the display market.  Recently, we have made key technological advances that have enabled our PEFs to be produced at high volume with low costs, and over wide area flexible substrates. We have developed two products from these processes. These products are our patent-pending Fingerprint Resistant Films and our transparent conducting film produced with our patent pending UniBoss™ process.

We are a Delaware corporation and were established on February 17, 1998.  Our principal executive offices are located at 8708 Technology Forest Place, Ste 100, The Woodlands, Texas 77381. Our telephone number is (281) 825-4500.  Our website can be accessed at www.unipixel.com.

 Our Proprietary Technologies

We focus our research and development on projects that will generate short term revenue that will lead to long term high volume product purchases.  In addition to research and development, we may work on related projects if they are customer funded.  Of our 14 employees, the majority have degrees or advanced degrees in physics, mathematics, chemistry, materials science, and optics.  Historically our development efforts have yielded numerous patents, as well as trade secrets and manufacturing know how that we believe gives us a competitive advantage with respect to our current intellectual properties. In May 2010, we sold 20 US Patents, 104 patent applications, and 23 foreign patents.  See “Recent Events” on page 3.  As of November 30, 2010, we have two US patents, seven US patent applications, and three foreign patents applications that cover technology including our Performance Engineered Films and our UniBoss™ process.  Our historic development efforts have guided our recent technological advances and the generation of new intellectual property with respect to our PEFs. Our patent-pending UniBoss™ process is a new flexible electronic manufacturing process whereby we can precisely pattern fine line conductors on a variety of substrates such as glass, circuit boards, and flexible polymer rolls of film in a continuous roll to roll and semi continuous sheet process with high optical transparency.  We are targeting films made by the UniBoss™ process as an alternative to traditional indium tin oxide coated transparent materials used in a variety of electronic products.  By replacing the Indium tin oxide (ITO) in a display device we can lower the device production cost, reduce the product thickness and weight, and improve the overall efficiency and performance. Furthermore, this process is adaptive with polymer substrates and as a result may enable the production flexible displays. Additionally, during the development of our PEF technology we were able to produce precise microstructured patterns on films that are capable of reducing the appearance of fingerprints on a touch screen as well as improving the responsiveness to touch. We believe our in house design and prototyping capabilities along with our toll manufacturing partners allows us to be one of the low cost producers for micro-structured films for our markets of interest.

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Our Target Markets

We are currently focusing our efforts on applications of our proprietary micro-structure films technology that we call Performance Engineered Films in the following areas:

Transparent Electrically Conductive Films

Our recent development of the UniBoss™  process, which is the ability to print very conductive fine lines with very high light transmission, enables us to enter a large and growing market for transparent touch screens. We believe this technology is a superior replacement to ITO as the transparent conducting layer in a touch screen device. Per calculations derived from DisplaySearch forecasts of the worldwide touch panel market, we believe the UniBoss™  film market for touch panels will be $3-5 billion dollars per year in films sales alone in the next five years. Our breakthrough has its origins in our capabilities to engineer polymer surface structure and energies that allows the deposition of very conductive fine line metal traces. Our transparent conductive films can be produced with our UniBoss™  process at low cost and on large flexible polymer substrates. We believe this enables manufacturers to effectively produce large area touch screens at commercially viable costs with enhanced performance and functionality. In addition, the insertion of this technology into smaller devices will lead to thinner, lighter, lower cost and higher efficiency products.

Since our announcement of the technology in May 2010, we have been approached by several touch screen manufacturers and end users throughout the world to design products based on our technological achievements or know-how.  We are aggressively pursuing these commercial opportunities in an expedient fashion.

Finger Print Resistant Cover Films

During the past two years we have designed, developed, and demonstrated large scale production of micro-structured films for use as protective cover films for touch and multi touch electronic computing devices.  We are currently shipping our Clearly Superior Finger Print Resistant (FPR) protective cover films to end users both domestically and internationally.  Our FPR films are unique in the market over other similar products in that our unique microstructure makes our films truly finger print resistant versus competitive films. Our Roll-to-Roll production capabilities lead to low production costs which allow us to competitively price our product at or below the price of other products in the market today that we believe are inferior to our products. We sell our films under the Clearly Superior brand as well as private label and original equipment manufacturer, or OEM.  We are currently in discussion with numerous large office products manufacturers, retailers and consumer product manufacturers for incorporation of the product into their stores or at the factory.

Light Extraction and Management Films

We also intend to sell our films as sub-components for use in liquid crystal display (LCD), field sequential LCD (FSC-LCD) and Time Multiplexed Optical Shutter (TMOS) display as back light films and active film sub-components.  We currently are in discussions with a major lighting systems company to integrate our micro-structured light extraction films into both LCD panels and general lighting application.  Both of those opportunities currently utilize billions of square feet of product on an annual basis. We believe our films can capture market share in both applications.

Self Cleaning Films

Our ability to micro-texture and manipulate surface energy properties allow us to create polymer films that are self cleaning.  Basically a self cleaning film is one where the water contact angle is so high that water beads up and rolls off the surface carrying any dirt or contamination along with it during the process.  This process is called the “Lotus Effect” and demonstrated in nature by the Lotus Leaf. We have identified two markets that may be able to take advantage of this type of film which if successful could generate significant revenues for us.  Photovoltaic solar cell modules need these types of films to maintain the efficiency of power generation during exposure to sunlight.  Small amounts of dust and dirt on the surface on the modules can decrease efficiency by as much as 30% so keeping the modules clean is paramount to cost-effectiveness of that product.  Anti-icing films are also of interest to us because of the time and expense spent each year de-icing airplanes that not only cause air traffic delays but also pollutes the environment with hazardous chemicals.  We have film designs under test in both of these areas in order to establish their outdoor weather ability and durability for extended periods of time.

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3-D Films

With the release of the movie Avatar in 2009 significant interest has been generated in 3-D content for consumer products such as video games and movies for portable devices.  Since late 2009, we have been engaged by a company to develop micro-structured and printed films to enable a 3-D visual experience on any type of display device.  We demonstrated our first prototype in January 2010 at the Consumer Electronics show in Las Vegas and based on the positive response at that show we continue to improve and enhance the films’ performance for the potential deployment by end-users and consumers for use with their Apple iPhones and iPads.  We have made significant progress on the design and manufacturing of these 3-D films and believe we can have a commercial product ready in 2011.

Recent Events

In May 2010, we sold our patents portfolio relating to our next generation color display technology that we called Time Multiplexed Optical Shutter (TMOS) to Rambus Inc., (Rambus).  Following this sale, we no longer are pursuing business opportunities relating to the commercialization of flat panel displays using TMOS architecture and techniques.  We will focus on sub-components in display systems that utilize microstructured and conductive thin films, such as backlights and touch panels.  As part of the patent sale, we entered into an engineering services agreement with Rambus pursuant to which we may choose to provide engineering services as work for hire to further develop the intellectual property Rambus acquired in the sale, as well as provide the micro-structured films used in the manufacture of those devices as a films supplier.

Corporate Information

Our facilities and executive offices are located at 8708 Technology Forest Place, Suite 100, The Woodlands, Texas, 77381, and our telephone number is (281) 825-4500. We were incorporated in Delaware on May 24, 2001.  Additional information about us is available on our website at www.unipixel.com.  The information contained on or that may be obtained from our website is not, and shall not be deemed to be, a part of this prospectus.  Our common stock is currently traded on the OTC Bulletin Board under the symbol “UNXL.OB.”

 Risk Factors

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described under “Risk Factors” beginning on page 6 of this prospectus, as well as other information included in this prospectus, including our consolidated financial statements and the notes thereto, before making an investment decision.

 The Offering

The following summary contains basic information about the offering and our common stock and is not intended to be complete. It does not contain all the information that is important to you. For a more complete understanding of our common stock, please refer to the section of this prospectus entitled “Description of Capital Stock.”

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(1)               The number of shares of our common stock to be outstanding after this offering is based on the number of shares outstanding as of November 30, 2010, giving effect to a 1-for-15 reverse stock split to be effected prior to the effectiveness of the registration statement of which this prospectus is a part, and, excludes:

·                       675,507 shares of our common stock issuable upon conversion of convertible debt in the principal amount of $3,100,000, plus accrued interest, giving effect to a 1-for-15 reverse stock split to be effected prior to the effectiveness of the registration statement of which this prospectus is a part and an anticipated offering price of $5.00 per share;

·                       832,359 shares of our common stock issuable upon exercise of stock options under our stock plans at a weighted average exercise price of $9.00 per share, giving effect to a 1-for-15 reverse stock split to be effected prior to the effectiveness of the registration statement of which this prospectus is a part;

·                       1,118,431 shares of our common stock reserved for issuance under various outstanding warrant agreements, at a weighted average exercise price of $7.74 per share, in each case giving effect to a 1-for-15 reverse stock split to be effected prior to the effectiveness of the registration statement of which this prospectus is a part and an anticipated offering price of $5.00 per share; and

·                       20,000 shares of our common stock reserved for future issuance under our 2005 Equity Incentive Plan; 114,307 shares of our common stock reserved for future issuance under our 2007 Equity Incentive Plan; and 120,000 shares of our common stock reserved for future issuance under our 2010 Equity Incentive Plan, giving effect to a 1-for-15 reverse stock split to be effected prior to the effectiveness of the registration statement of which this prospectus is a part.

Unless otherwise specifically stated, information throughout this prospectus assumes that none of our outstanding options or warrants to purchase shares of our common stock are exercised.

(2)               Unless otherwise indicated, the number of shares of common stock presented in this prospectus excludes shares issuable pursuant to the exercise of the underwriter’s over-allotment option.

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SUMMARY SELECTED CONSOLIDATED FINANCIAL INFORMATION

You should read the summary selected consolidated financial information presented below in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and our consolidated financial statements and the notes to those consolidated financial statements included in this prospectus.

The following tables set forth selected consolidated financial data for us at and for each of the years in the five-year period ended December 31, 2009 and at and for the nine month periods ended September 30, 2010 and September 30, 2009.  The weighted average number of shares outstanding does not reflect the proposed 1-for-15 reverse stock split.

The selected statement of operations data for the years ended December 31, 2009 and 2008, and the selected statement of financial condition data as of December 31, 2009 and 2008, have been derived from our audited consolidated financial statements for the fiscal year ended December 31, 2009 included in this prospectus.  The selected statement of operations data for the years ended December 31, 2007, 2006 and 2005 and the selected statement of financial condition data as of December 31, 2007, 2006 and 2005 have been derived from our audited consolidated financial statements that are not included in this prospectus.  See “Where You Can Find More Information” to obtain copies of our audited consolidated financial statements for the fiscal years ended December 31, 2007, 2006 and 2005.

The summary financial data at and for the nine month periods ended September 30, 2010 and September 30, 2009 have been derived from our unaudited interim consolidated financial statements included in our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2010, which are included in this prospectus. These unaudited interim consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) that we consider necessary for a fair presentation of our financial condition and results of operations as of the dates and for the periods indicated. Historical results are not necessarily indicative of future results and the results for the nine months ended September 30, 2010 are not necessarily indicative of our expected results for the full year ending December 31, 2010.

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RISK FACTORS

We are subject to various risks that may materially harm our business, financial condition and results of operations and an investment in our common stock involves a high degree of risk. In evaluating an investment in shares of our common stock, you should carefully consider the risks described below, together with the other information included in this prospectus.

The risks described below are not the only risks we face.  If any of the events described in the following risk factors actually occurs, or if additional risks and uncertainties not presently known to us or that we currently deem immaterial materialize, then our business, results of operations and financial condition could be materially adversely affected. In that event, the trading price of our common stock could decline, and you may lose all or part of your investment in our shares.  The risks discussed below include forward-looking statements, and our actual results may differ substantially from those discussed in these forward-looking statements.

Risks Related to Our Business

Our independent registered public accounting firm has issued an unqualified opinion with an explanatory paragraph to the effect that there is substantial doubt about our ability to continue as a going concern.

Our independent registered public accounting firm has issued an unqualified opinion with an explanatory paragraph to the effect that there is substantial doubt about our ability to continue as a going concern.  This unqualified opinion with an explanatory paragraph could have a material adverse effect on our business, financial condition, results of operations and cash flows. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” and Note 2 to our consolidated financial statements for the fiscal year ended December 31, 2009, included elsewhere in this prospectus.

We have no committed sources of capital and do not know whether additional financing will be available when needed on terms that are acceptable, if at all.  This going concern statement from our independent registered public accounting firm may discourage some investors from purchasing our stock or providing alternative capital financing.  The failure to satisfy our capital requirements will adversely affect our business, financial condition, results of operations and prospects.

Unless we raise additional funds, either through the sale of equity securities or one or more collaborative arrangements, we will not have sufficient funds to continue operations.  Even if we take these actions, they may be insufficient, particularly if our costs are higher than projected or unforeseen expenses arise.

We are in default on some of our convertible promissory notes. If we are unable to reach an agreement with our convertible note holders, the note holders could foreclose on our assets, which ultimately could require us to curtail or cease our operations.

On June 10, 2009, June 30, 2009, August 31, 2009, September 30, 2009 and October 2, 2009, we entered into Subscription Agreements with various accredited investors and issued convertible 8% promissory notes in the aggregate principal amount of $2,075,000, together with warrants to purchase an aggregate of 1,037,500 shares of our common stock for $0.50 per share, not giving effect to a 1-for-15 reverse stock split to be effective prior to the effectiveness of the registration statement of which this prospectus is a part. The promissory notes are convertible by the holders at any time into shares of our common stock at a conversion price of $0.50 per share.  The promissory notes contain anti-dilution protections for the investors that in the event we issue shares of our common stock for cash consideration of less than $0.50 per share, the conversion price is automatically adjusted downward to the price per share received by us.  Giving effect to a 1-for-15 reverse stock split and an anticipated offering price of $5.00 per share, the promissory notes would be convertible by the holders into shares of our common stock at a conversion price equal to the offering price of $5.00 per share, rather than $7.50 per share. 

A total of $650,000 and $1,425,000 of these convertible promissory notes were originally due and payable on July 9, 2010 and October 22, 2010, respectively, together with accrued but unpaid interest. All amounts owed under these promissory notes are still outstanding. We have negotiated an extended maturity date of December 31, 2010 for $1,250,000 principal amount of these promissory notes, but we are currently in default under the remaining $825,000 principal amount of these promissory notes for failing to pay all principal and accrued interest when due.  We are currently negotiating with the holders of the promissory notes in default to extend the maturity date of those promissory notes to December 31, 2010. No agreement has been reached to extend the maturity date and we may not be able to reach an agreement with those holders.  Because we are in default under these notes, we are incurring materially higher interest expenses, and the holders could commence legal action against us to recover the amounts due which ultimately could require the disposition of some or all of our assets. Any such action may require us to curtail or cease our operations.

We are a company with limited operating history and our future profitability is uncertain and we anticipate future losses and negative cash flow, which may limit or delay our ability to become profitable.

We are a company with a limited operating history and no significant revenues to date.  To date, we have had only a few revenue-generating services and development contracts.  We expect to expend significant resources on consultants,

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intellectual property protection, research and development, advertising, hiring of personnel and startup costs.  We are attempting to obtain the necessary working capital for operations, but we may not be able to obtain financing in a sufficient amount or at all.  We have not yet demonstrated our ability to generate revenue, and we may never be able to produce material revenues or operate on a profitable basis.  As a result, we have incurred losses since our inception and expect to experience operating losses and negative cash flow for the foreseeable future.  As of September 30, 2010, we had an accumulated total deficit of $52.9 million.

We anticipate our losses will continue to increase from current levels because we expect to incur additional costs and expenses related to prototype development, consulting costs, laboratory development costs, marketing and other promotional activities, the addition of engineering and manufacturing personnel, and the continued development of relationships with strategic business partners.  Moreover, planned products based upon our Performance Engineered Film technology may never become commercially viable and thus may never generate any revenues. Even if we find commercially viable applications for our Performance Engineered Film technology and materials, we may never recover our research and development expenses.

We may be required to raise additional financing by issuing new securities with terms or rights superior to those of our shares of common stock, which could adversely affect the market price of our shares of common stock and our business.

We will require additional financing to fund future operations, including expansion in current and new markets, development and acquisition, capital costs and the costs of any necessary implementation of technological innovations or alternative technologies. We may not be able to obtain financing on favorable terms, if at all. If we raise additional funds by issuing equity securities, the percentage ownership of our current stockholders will be reduced, and the holders of the new equity securities may have rights superior to those of the holders of shares of common stock, which could adversely affect the market price and the voting power of shares of our common stock. If we raise additional funds by issuing debt securities, the holders of these debt securities would similarly have some rights senior to those of the holders of shares of common stock, and the terms of these debt securities could impose restrictions on operations and create a significant interest expense for us which could have a materially adverse affect on our business.

Current worldwide economic conditions may adversely affect our business, operating results and financial condition.

The United States economy has recently experienced, and continues to experience, a financial downturn, with some financial and economic analysts predicting that the world economy may be entering into a prolonged economic downturn characterized by high unemployment, limited availability of credit, increased rates of default and bankruptcy, and decreased consumer and business spending.  These developments could negatively affect our business, operating results and financial condition in a number of ways.  For example, current or potential customers may delay or decrease spending with us or may not pay us, or may delay paying us for previously purchased products. In addition, this downturn has had, and may continue to have, an unprecedented negative impact on the global credit markets.  Credit has tightened significantly in the last several months, resulting in financing terms that are less attractive to borrowers, and in many cases, the unavailability of certain types of debt financing.  If this crisis continues or worsens, and if we are required to obtain financing in the near term to meet our working capital or other business needs, we may not be able to obtain that financing.  Further, even if we are able to obtain the financing we need, it may be on terms that are not favorable to us, with increased financing costs and restrictive covenants.

If we do not receive additional financing when and as needed in the future, we may not be able to continue the research, development and commercialization of our technology and materials.

Our capital requirements have been and will continue to be significant. We will likely require substantial additional funds in excess of our current financial resources in the future for research, development and commercialization of our Performance Engineered Film technology and materials, to obtain and maintain patents and other intellectual property rights in these technologies and materials, and for working capital and other purposes, the timing and amount of which are difficult to ascertain. Our cash on hand will likely not be sufficient to meet all of our future needs. When and as we need additional funds, such funds may not be available on commercially reasonable terms or at all. If we cannot obtain additional funding when and as needed, our business might fail. Additionally, if we attempt to raise funds in a future offering of shares of our common stock, preferred stock, warrants or depositary shares, or if we engage in acquisitions involving the issuance of such securities, the issuance of these shares could dilute the ownership of our then-existing stockholders.

Our brand name and technology may not be recognized in our marketplace, so our results of operations and financial condition may suffer.

Our brand name and technology are new and unproven.  If we are unable to effectively develop and timely promote our brand and technology and establish a leading position in our marketplace, our results of operations and financial condition

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will suffer.  We believe that the importance of brand recognition and technology will increase over time.  In order to gain brand recognition, we may increase our marketing and advertising budgets to create and maintain brand loyalty.  We may not be able to increase, or maintain, an advertising budget to create and maintain brand loyalty.

We may fail to protect adequately our proprietary technology, which would allow our competitors to take advantage of our research and development efforts.

Our long-term success largely depends on our ability to market technologically competitive processes and products.  We rely on a combination of patent, trade secret and other intellectual property laws, confidentiality and security procedures and contractual provisions to establish and protect our proprietary rights in our technology, products and processes.  If we fail to obtain or maintain these protections, we may not be able to prevent third parties from using our proprietary technologies.  Our currently pending or future patent applications may not result in issued patents.  In addition, our issued patents may not contain claims sufficiently broad to protect us against third parties with similar technologies or products or from third parties infringing our patents or misappropriating our trade secrets or provide us with any competitive advantage.  In addition, effective patent and other intellectual property protection may be unenforceable or limited in foreign countries.  If a third party initiates litigation regarding the validity of our patents, and is successful, a court could revoke our patents or limit the scope of coverage for those patents.

We also rely upon trade secrets, proprietary know-how and continuing technological innovation to remain competitive.  We protect this information with reasonable security measures, including the use of confidentiality and invention assignment agreements with our employees and consultants and confidentiality agreements with strategic partners.  It is possible that these agreements may not be sufficient or that these individuals or companies may breach these agreements and that any remedies for a breach will be insufficient to allow us to recover our costs and damages.  Furthermore, our trade secrets, know-how and other technology may otherwise become known or be independently discovered by our competitors.

If we fail to enter cooperative research agreements, we might not succeed in commercializing our technology and materials.

Research and development of commercially viable applications for our Performance Engineered Film technology and materials may at some point depend substantially on the success of the work conducted by and with our present and future research partners. We cannot be certain that these research partners will make the additional advances in these technologies and materials that may be essential to successfully commercialize our Performance Engineered Film technology and materials. Moreover, although we fund Performance Engineered Film technology research, the scope and technical aspects of this research and the resources and efforts directed to this research currently are and may remain in large part subject to the control of our research partners.

If we cannot form and maintain lasting business relationships with targeted partners, or if we cannot obtain proprietary materials, our business strategy could suffer or fail.

Our business strategy includes some dependence upon our development and maintenance of commercial licensing and material supply relationships. All of our current relationship discussions with product manufacturers are limited to technology exploration and the evaluation of our Performance Engineered Film technology and materials for possible use in commercial applications. Some or all of these relationships may not succeed or, even if they are successful, may not result in the manufacturers’ entering into commercial licensing and material supply relationships with us.

Under our planned technology development and evaluation agreements, we intend to work with strategic partners to incorporate our technologies into their products. However, many of these technology development and evaluation agreements may last for limited periods of time, such that our relationships with these partners could expire unless they are continually renewed. Our partners may not agree to renew their relationships with us on a continuing basis, or may do so on terms that are less favorable to us. In addition, we may continue working with certain strategic partners in evaluating our Performance Engineered Film technology and materials after our existing agreements with them have expired while we are attempting to negotiate contract extensions or new agreements with them. Should our relationships with these partners not materialize, or once in place, not continue to be renewed, our business could suffer.

Our ability to enter into commercial licensing and material supply relationships, or to maintain our existing technology development and evaluation relationships, may require us to make financial or other commitments. We might not be able, for financial or other reasons, to enter into or continue these relationships on commercially acceptable terms, or at all. Failure to do so will likely harm our business strategy, operating results and long-term business prospects.

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Our business prospects also depend significantly on our ability to obtain proprietary materials for our own use and for potential sale to display manufacturers and OEMs that incorporate displays in their products.  Our inability to reach agreements to obtain certain other materials from other sources could have a materially adverse effect on our ability to generate revenues from sales of these materials, as well as on our ability to perform research and development work. Further, failure to complete long term agreements could preclude our ability to support these manufacturers and OEMs that would choose to license our Performance Engineered Film technology and materials for possible commercial use.

Our potential for rapid growth and our entry into new markets make it difficult for us to evaluate our current and future business prospects, and we may be unable to effectively manage any growth associated with these new markets, which may increase the risk of your investment and could harm our business, financial condition, results of operations and cash flow.

Our recent development of the UniBoss™ process enables us to enter a large and growing market for transparent touch screens. We believe this technology is a superior replacement to ITO as the transparent conducting layer in a touch screen device. Because this UniBoss™ process is relatively new and we have recently entered new markets in connection therewith, we may be unable to evaluate its relative success and future prospects, particularly in light of our goals to continually grow our existing and new customer base, expand our product offerings, integrate complementary businesses and enter additional new markets.

In addition, our potential growth, recent product introductions and entry into new markets may place a significant strain on our resources and increase demands on our executive management, personnel and systems, and our operational, administrative and financial resources may be inadequate. We may also not be able to effectively manage any expanded operations, or achieve planned growth on a timely or profitable basis, particularly if the number of customers using our products and services significantly increase or their demands and needs change as our business expands. If we are unable to manage expanded operations effectively, we may experience operating inefficiencies, the quality of our products and services could deteriorate, and our business and results of operations could be materially adversely affected.

We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights.

A third party may sue us or one of our strategic collaborators for infringing its intellectual property rights.  Likewise, we may need to resort to litigation to enforce our patent rights or to determine the scope and validity of third-party intellectual property rights.

The cost to us of any litigation or other proceeding relating to intellectual property rights, even if resolved in our favor, could be substantial, and the litigation would divert our efforts.  Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources.  If we do not prevail in this type of litigation, we or our strategic collaborators may be required to pay monetary damages; stop commercial activities relating to the affected products or services; obtain a license in order to continue manufacturing or marketing the affected products or services; or attempt to compete in the market with a substantially similar product.

Uncertainties resulting from the initiation and continuation of any litigation could limit our ability to continue some of our operations.  In addition, a court may require that we pay expenses or damages, and litigation could disrupt our commercial activities.

If we are unable to keep up with rapid technological changes, our processes, products or services may become obsolete.

The flat panel display market is characterized by significant and rapid technological change.  Although we will continue to expand our technological capabilities in order to remain competitive, research and discoveries by others may make our processes, products or services less attractive or even obsolete.

Our efforts may never demonstrate the feasibility of our Performance Engineered Film technology and materials for broad-based product applications.

Our research and development efforts remain subject to all of the risks associated with the development of new products based on emerging and innovative technologies, including without limitation unanticipated technical or other problems and the possible insufficiency of funds for completing development of these products. Technical problems may result in delays and cause us to incur additional expenses that would increase our losses. If we cannot complete, or if we experience significant delays in completing, research and development of our Performance Engineered Film technology and materials for use in potential commercial applications, particularly after incurring significant expenditures, our business may fail.

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Many of our competitors have greater resources, and it may be difficult to compete against them.

The flat panel display industry is characterized by intense competition. Many of our competitors have better name recognition and substantially greater financial, technical, manufacturing, marketing, personnel and/or research capabilities than we do. They have made and continue to make substantial investments in improving their technologies and manufacturing processes.  In addition, we believe that at times in the past certain plasma and LCD display panel manufacturers have priced their products below the marginal cost of production in an attempt to establish, retain or increase market share. Because of these circumstances, it may be difficult to compete successfully in the display market.

The loss of the services of our key management and personnel or the failure to attract additional key personnel could adversely affect our ability to operate our business.

A loss of one or more of our current officers or key employees could severely and negatively impact our operations. Specifically, the loss of services of Reed J. Killion, CEO and President, Dan Van Ostrand, Senior Vice President of Engineering, Research & Development, or Robert Petcavich, Chief Technology Officer & General Manager Films, none of whom has an employment agreement with us, could significantly harm our business. We have no present intention of obtaining key-man life insurance on any of our executive officers or management. Additionally, competition for highly skilled technical, managerial and other personnel is intense. As our business develops, we might not be able to attract, hire, train, retain and motivate the highly skilled managers and employees we need to be successful. If we fail to attract and retain the necessary technical and managerial personnel, our business will suffer and might fail.

The flat panel display industry has historically experienced significant downturns, which may adversely affect the demand for and pricing of our technology and materials.

The flat panel display industry has experienced significant periodic downturns, often in connection with, or in anticipation of, declines in general economic conditions. These downturns have been characterized by lower product demand, production overcapacity and erosion of average selling prices. Industry-wide fluctuations and downturns in the demand for flat panel displays would likely affect the demand for and pricing of our Performance Engineered Film technologies and materials and could cause significant harm to our business.

The reliability of market data included in our public filings is uncertain.

Since we operate in a rapidly changing market, we have in the past, and may from time to time in the future, include market data from industry publications and our own internal estimates in some of the documents we file with the SEC.  This data may be inaccurate, incomplete or unreliable. Industry publications generally state that the information contained in these publications has been obtained from sources believed to be reliable, but that its accuracy and completeness is not guaranteed.  Although we believe that the market data used in our filings with the SEC is and will be reliable, it has not been and will not be independently verified.  Similarly, internal company estimates, while believed by us to be reliable, have not been and will not be verified by any independent sources.

Risks Related to this Offering and Owning Our Common Stock

Our common stock has traded only sporadically and is expected to experience significant price and volume volatility in the future which substantially increases the risk of loss to persons owning our common stock.

We have applied for listing of our common stock on The NASDAQ Capital Market, which listing we expect to occur immediately following the consummation of this offering. No assurance can be given that our application will be approved. If the application is not approved, we will not complete this offering and the shares of our common stock will continue to be traded on the OTC Bulletin Board.

There was no public market for our common stock prior to February 3, 2005.  Our common stock is quoted on the OTC Bulletin Board, where the shares of our common stock have historically been sporadically or “thinly-traded”, meaning that the number of persons interested in purchasing our common shares at or near bid prices at any given time may be relatively small or non-existent. Because of the limited trading market for our common stock, and the possible price volatility, you may not be able to sell your shares of common stock when you desire to do so.  The inability to sell your shares in a rapidly declining market may substantially increase your risk of loss because of such illiquidity and because the price for our common stock may suffer greater declines because of its price volatility.

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We cannot predict the extent to which investor interest in our stock will create or sustain an active and orderly trading market.  If such a market were to develop, the market price of our common stock may continue to be highly volatile.  The sale of a large block of shares could depress the price of our common stock to a greater degree than a company that typically has a higher volume of trading in its securities.  The value of your investment could decline due to the impact of any of the following factors upon the market price of our common stock:

·                       Disappointing results from our development efforts;

·                       Failure to meet our revenue or profit goals or operating budget;

·                       Decline in demand for our common stock;

·                       Downward revisions in securities analysts’ estimates or changes in general market conditions;

·                       Technological innovations by competitors or in competing technologies;

·                       Investor perception of our industry or our prospects;

·                       General economic trends;

·                       Variations in our quarterly operating results;

·                       Our inability to increase revenues:

·                       Announcement of new customer relationships by our competitors;

·                       Departures of our executive officers;

·                       General conditions in the worldwide economy, including fluctuations in interest rates;

·                       Developments in patents or other intellectual property rights and litigation;

·                       Developments in our relationships with our customers and suppliers;

·                       Any significant acts of terrorism against the United States; and

·                       Our currently limited public float.

Our common stock has traded on the OTC Bulletin Board as low as $2.25 and as high as $22.50 during a period from January 1, 2008 through November 29, 2010, giving effect to a 1-for-15 reverse stock split to be effected prior to the effectiveness of the registration statement of which this prospectus is a part.  In addition to volatility associated with Bulletin Board securities in general, the markets for high technology stocks have experienced extreme volatility that has often been unrelated to the operating performance of the particular companies.  These broad market fluctuations may adversely affect the trading price of shares our common stock.

We have a significant number of outstanding warrants and options, and future sales of the underlying shares of common stock could adversely affect the market price of our common stock.

As of November 30, 2010, we had outstanding warrants and options exercisable for an aggregate of 1,950,791 shares of common stock at a weighted average exercise price of $8.28 per share, giving effect to a 1-for-15 reverse stock split to be effected prior to the effectiveness of the registration statement of which this prospectus is a part and an anticipated offering price of $5.00 per share.  The holders may sell these shares in the public markets from time to time, without limitations on the timing, amount or method of sale.  As our stock price rises, the holders may exercise their warrants and options and sell a large number of shares.  This could cause the market price of our common stock to decline.

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Our common shares are thinly traded and you may be unable to sell at or near ask prices or at all if you need to sell your shares to raise money or otherwise desire to liquidate your shares.

We cannot predict the extent to which an active public market for our common stock will develop or be sustained. It is a condition to the closing of this offering that we be listed on The NASDAQ Capital Market, but we cannot assure you that we will be able to meet the requirements for continued listing going forward.

Our common shares have historically been sporadically or “thinly-traded” on the OTC Bulletin Board, meaning that the number of persons interested in purchasing our common shares at or near bid prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors, including the fact that we are a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. It is possible that a broader or more active public trading market for our common stock will not develop or be sustained, or that current trading levels will be sustained.

The market price for our common stock is particularly volatile given our status as a relatively small company with a small and thinly traded “float” and lack of current revenues that could lead to wide fluctuations in our share price. The price at which you purchase our common stock may not be indicative of the price that will prevail in the trading market. You may be unable to sell your common stock at or above your purchase price if at all, which may result in substantial losses to you.

The market for our common shares is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. The volatility in our share price is attributable to a number of factors. First, as noted above, our common shares are sporadically and/or thinly traded. As a consequence of this lack of liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately influence the price of those shares in either direction. The price for our shares could, for example, decline precipitously in the event that a large number of our common shares are sold on the market without commensurate demand, as compared to a seasoned issuer which could better absorb those sales without adverse impact on its share price. Secondly, we are a speculative or “risky” investment due to our lack of revenues or profits to date and uncertainty of future market acceptance for our current and potential products. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a seasoned issuer.

The following factors may add to the volatility in the price of our common shares: actual or anticipated variations in our quarterly or annual operating results; adverse outcomes, additions or departures of our key personnel, as well as other items discussed under this “Risk Factors” section, as well as elsewhere in this prospectus. Many of these factors are beyond our control and may decrease the market price of our common shares, regardless of our operating performance. We cannot make any predictions or projections as to what the prevailing market price for our common shares will be at any time, including as to whether our common shares will sustain their current market prices, or as to what effect that the sale of shares or the availability of common shares for sale at any time will have on the prevailing market price.

There is no guarantee that our shares will be listed on The NASDAQ Capital Market.

Immediately following the filing of the registration statement of which this prospectus is a part we applied for listing of our common stock on The NASDAQ Capital Market. After the reverse split of our common stock as described herein, we believe that we will satisfy the listing requirements of The NASDAQ Capital Market. Such listing, however, is not guaranteed. If the application is not approved, we will not complete this offering and the shares of our common stock will continue to be traded on the OTC Bulletin Board. Even if such listing is approved, we may not be able to meet the requirements for continued listing, and there may not be any broker interested in making a market for our stock. Therefore, it may be difficult to sell your shares of common stock if you desire or need to sell them.  Our underwriter, MDB Capital Group, LLC, is not obligated to make a market in our securities, and even if it chooses to do so it can discontinue at any time without notice. It is possible that an active and liquid trading market in our securities may never develop or, if one does develop, that the market will continue.

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We will incur significant increased costs as a result of being listed on the NASDAQ Capital Market, and our management will be required to devote substantial time to meet compliance obligations.

As a public company that may become an accelerated filer, we will incur significant legal, accounting and other expenses that we did not incur as a smaller reporting company. We may be subject to additional reporting requirements of the Exchange Act and the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, as well as rules subsequently implemented by the SEC and the Nasdaq Capital Market, or Nasdaq, that impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. In addition, on July 21, 2010, the Dodd-Frank Wall Street Reform and Protection Act, or the Dodd-Frank Act, was enacted. There are significant corporate governance and executive compensation-related provisions in the Dodd-Frank Act that will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and may also place undue strain on our personnel, systems and resources. Our management and other personnel will need to devote a substantial amount of time to these new compliance initiatives. In addition, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified people to serve on our board of directors, our board committees or as executive officers.

Our common stock is currently and may in the future be subject to the “penny stock” rules of the Securities and Exchange Commission and the trading market in our securities is limited, which makes transactions in our common stock cumbersome and may reduce the value of an investment in our common stock.

The Securities and Exchange Commission has adopted Rule 3a51-1 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that (i) has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share or (ii) is not registered on a national securities exchange or listed on an automated quotation system sponsored by a national securities exchange. Currently, our common stock is subject to these “penny stock” rules.  In addition, after the reverse stock split has been effected, although we anticipate the offering price of our common stock in this offering will be a minimum of $5.00 and we expect the market price of our common stock to be greater than $5.00, it is possible that the market price could fall below this amount, and thus we would again be subject to the “penny stock” rules.

For any transaction involving a penny stock, unless exempt, Rule 15g-9 of the Securities Exchange Act of 1934, as amended, referred to as the Exchange Act, requires:

·                  that a broker or dealer approve a person’s account for transactions in penny stocks; and

·                  the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:

·                  obtain financial information and the investment experience objectives of the person; and

·                  make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form:

·                  sets forth the basis on which the broker or dealer made the suitability determination; and

·                  attests that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading, about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies made available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

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Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our common stock.

Shares eligible for future sale may adversely affect the market.

From time to time, certain of our stockholders may be eligible to sell all or some of their shares of common stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144, promulgated under the Securities Act, subject to certain limitations. In general, pursuant to Rule 144, non-affiliate stockholders may sell freely after six months subject only to the current public information requirement (which disappears after one year). Affiliates may sell after six months subject to the Rule 144 volume, manner of sale (for equity securities), current public information and notice requirements. Of the 3,473,369 shares of our common stock outstanding as of November 30, 2010 (after giving effect to the anticipated 1-for-15 reverse stock split), approximately 1.4 million shares are held by non-“affiliates” and are, or will be, freely tradable without restriction, and the remaining shares are held by our “affiliates”, as of such date.  In addition, 675,507 shares of our common stock are issuable upon conversion of convertible debt in the principal amount of $3,100,000, plus accrued interest (after giving effect to the anticipated 1-for-15 reverse stock split and offering price of $5.00 per share), all of which if issued would be freely tradable without restriction.  Any substantial sale of our common stock pursuant to Rule 144 or pursuant to any resale prospectus (including sales by investors of securities acquired in connection with this offering) may have a material adverse effect on the market price of our common stock.

We do not expect to pay dividends in the foreseeable future.

We have never paid cash dividends on our shares of common stock, and have no plans to do so in the foreseeable future.  We intend to retain earnings, if any, to develop and expand our business operations.

Management will have broad discretion as to the use of the proceeds from this offering, and we may not use the proceeds effectively.

We have not designated the amount of net proceeds from this offering to be used for any particular purpose.  Accordingly, our management will have broad discretion as to the application of the net proceeds from this offering and could use them for purposes other than those contemplated at the time of this offering.  Our stockholders may not agree with the manner in which our management chooses to allocate and spend the net proceeds.  Moreover, our management may use the net proceeds for corporate purposes that may not increase our profitability or market value.

You will experience immediate dilution in the book value per share of the common stock you purchase.

Because the price per share of our common stock being offered is substantially higher than the book value per share of our common stock, you will suffer substantial dilution in the net tangible book value of the common stock you purchase in this offering.  Based on an assumed offering price of $5.00 per share, if you purchase shares of common stock in this offering, you will suffer immediate and substantial dilution of $3.38 per share in the net tangible book value of the common stock at September 30, 2010. See the section entitled “Dilution” below for a more detailed discussion of the dilution you will incur if you purchase common stock in this offering.

A large number of shares may be sold in the market following this offering, which may depress the market price of our common stock.

A large number of shares may be sold in the market following this offering, which may depress the market price of our common stock.  Sales of a substantial number of shares of our common stock in the public market following this offering could cause the market price of our common stock to decline.  If there are more shares of common stock offered for sale than buyers are willing to purchase, then the market price of our common stock may decline to a market price at which buyers are willing to purchase the offered shares.

Upon completion of this offering and assuming the sale of all 3,000,000 shares of our common stock offered pursuant to this prospectus, we will have approximately 6,473,369 shares of our common stock outstanding and 2,626,297 shares of common stock equivalents (including the conversion of $3.1 million principal amount of convertible debt, plus accrued interest), giving effect to a 1-for-15 reverse stock split to be effected prior to the effectiveness of the registration statement of which this prospectus is a part and an anticipated offering price of $5.00 per share.

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Our charter documents and Delaware law may inhibit a takeover that stockholders consider favorable.

Upon the closing of this offering, provisions of our amended and restated certificate of incorporation and amended and restated bylaws and applicable provisions of Delaware law may delay or discourage transactions involving an actual or potential change in our control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests. These provisions:

·                  authorize our board of directors to issue preferred stock without stockholder approval and to designate the rights, preferences and privileges of each class; if issued, such preferred stock would increase the number of outstanding shares of our capital stock and could include terms that may deter an acquisition of us;

·                  establish advance notice requirements for nominations to the board of directors or for proposals that can be acted on at stockholder meetings;

·                  limit who may call stockholder meetings;

·                  do not provide for cumulative voting rights; and

·                  provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum.

In addition, Section 203 of the Delaware General Corporation Law generally limits our ability to engage in any business combination with certain persons who own 15% or more of our outstanding voting stock or any of our associates or affiliates who at any time in the past three years have owned 15% or more of our outstanding voting stock. These provisions may have the effect of entrenching our management team and may deprive you of the opportunity to sell your shares to potential acquirers at a premium over prevailing prices. This potential inability to obtain a control premium could reduce the price of our common stock.

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BUSINESS

OVERVIEW

We are a production stage company delivering its Clearly Superior™ Performance Engineered Films to the Lighting & Display, Solar and Flexible Electronics market segments. Our newly developed UniBoss™ thin film high volume roll to roll or continuous flow manufacturing process offers high fidelity replication of advanced micro-optic structures and surface characteristics over large area, combined with a thin film conductive element. We will sell our films as sub-components for use in liquid crystal display (LCD) as a back light film and active film sub-component.   We are currently shipping our Clearly Superior ™ Finger Print Resistant protective cover films for multiple touch enabled devices. We sell our films under the Clearly Superior™ brand as well as private label to original equipment manufacturers (OEMs).

We are developing 3D Films, ITO-Less Touch Films, Privacy Films and Flexible Electronic Films based on our newly-developed UniBoss™ manufacturing process for flexible thin-film conductors. In addition, our work in developing TMOS, which we have recently sold, has led to advances in the thin-film and advanced optics arenas that can be leveraged for other marketable applications.  We intend to explore the business potential within these applications and pursue those markets that offer profitable opportunities either through licensing or direct production and sales.  As of September 30, 2010, we had accumulated a total deficit of $52.9 million from operations in pursuit of these objectives.

We anticipate that our initial film sales will allow us to fund and support further technology developments in the Lighting & Display, 3D displays, Solar photovoltaics, Avionics and Flexible Electronics market segments.

Our strategy is to further develop our proprietary Clearly Superior™ Performance Engineered Films technology around the 5 vertical markets that we have identified as high growth profitable market opportunities.  We have and will continue to utilize contract manufacturing for prototype fabrication to augment our internal capabilities in the short term. We also plan to supply our key thin film components and enter into joint developments or ventures in key vertical market segments to exploit the existing manufacturing and distribution channels of our targeted partners.

Formation History

We were originally incorporated in the State of Nevada as Super Shops, Inc. On November 15, 1999, Super Shops and its sister companies filed an amended petition under Chapter 11 of the United States Bankruptcy Code. On July 31, 2000, the court approved Super Shops’ Amended Joint Plan of Reorganization. On October 13, 2000, and in accordance with the Plan of Reorganization, the management of Super Shops changed its state of incorporation from Nevada to Delaware by merging with and into NEV Acquisition Corp., a Delaware corporation formed solely for the purpose of effecting the reincorporation.

On June 13, 2001, Real-Estateforlease.com, Inc., a Delaware corporation, merged with and into NEV Acquisition Corp.  Following the merger, NEV Acquisition Corp. changed its name to Real-Estateforlease.com, Inc.  Real-Estateforlease.com, Inc. was incorporated on May 24, 2001, in the State of Delaware to serve as a business-to-business internet information intermediary providing turnkey marketing services to facilitate the leasing of commercial real estate properties.

Pursuant to the Agreement and Plan of Merger between NEV Acquisition Corp. and Real-Estateforlease.com, Inc., the sole stockholder and founder of Real-Estateforlease.com, Inc. exchanged his equity ownership interest in Real-Estateforlease.com, Inc. for 9,500,000 shares (or approximately 96%) of NEV Acquisition Corp.’s common stock. At the time of the merger between Real-Estateforlease.com, Inc. and NEV Acquisition Corp., Real-Estateforlease.com, Inc. had no operations and essentially no assets. Efforts by Real-Estateforlease.com, Inc. to implement its business plan ceased in June 2002.

Our wholly owned subsidiary, Uni-Pixel Displays, Inc. was originally incorporated as Tralas Technologies, Inc., a Texas corporation, on February 17, 1998. Tralas Technologies, Inc. changed its name to Uni-Pixel Displays, Inc. during 2001. On December 7, 2004, Real-Estateforlease.com, Inc. entered into a merger agreement with Uni-Pixel Displays, Inc. and certain other parties pursuant to which Uni-Pixel Displays, Inc. became a wholly-owned subsidiary of Real-Estateforlease.com, Inc. At the time of this merger, Real-Estateforlease.com, Inc. had no operations and no material assets or liabilities.  Pursuant to the merger, we changed our name from Real-Estateforlease.com, Inc. to Uni-Pixel, Inc. at the annual meeting of our stockholders held in January 2005.

Uni-Pixel, Inc. is now the parent company of our wholly-owned operating subsidiary, Uni-Pixel Displays, Inc. As used in this document, “Uni-Pixel,” “we,” “us,” and “our” refer to Uni-Pixel, Inc. and our wholly-owned consolidated subsidiary, Uni-Pixel Displays, Inc.

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The common stock, par value $0.001 per share, of Uni-Pixel is quoted on the OTC Bulletin Board since January 18, 2006 under the ticker symbol “UNXL.OB”.

The Flat Panel Display Market

History.  The commercialization of the liquid crystal display (LCD) began in 1973, with the launch of the world’s first electronic calculator, incorporating a segmented, black-and-white (monochrome) display.  The technology was quickly adopted in applications such as watches, and evolved into more complex dot matrix displays using passive addressing — or passive matrix (PM) — systems.  In time, the emergence of passive Super Twisted Nematic (STN) PM-LCDs and the development of color STN (CSTN) PM-LCDs, facilitated new applications such as notebook PCs.  Eventually, the demand for higher resolution, full-color video images and faster refresh rates, saw the commercialization of active matrix (AM) amorphous, (a-Si) Thin-Film-Transistor (TFT) LCDs.  This technology quickly gained acceptance in the notebook PC market, where it completely replaced the incumbent CSTN technology.  Similarly, there has been rapid, supply driven penetration of TFT-LCDs in all forms of display applications specifically as demonstrated in desktop monitors and large flat panel TVs.

Proliferation of Mobile Consumer Electronics Devices.  Consumers throughout the world are rapidly adopting mobile consumer electronics devices such as mobile phones, personal digital assistants (PDAs), MP3 players, portable DVD players, mobile gaming devices and digital cameras and camcorders. Advances in component technology are driving down the cost of these products and expanding their functionality. Early mobile devices were equipped with simple, small monochrome displays with limited functionality. As the cost of color displays decreased and quality improved, consumers began rapidly adopting mobile devices with color displays. This trend towards greater display functionality in mobile devices continues with the introduction of new phones with dual displays, embedded cameras and television tuner video functionality.

The overall Flat Panel Display (FPD) industry is continuing to experience significant growth.  The FPD industry growth is being driven by a number of market forces including:

·                  Increased demand for large format high resolution televisions and computer monitors;

·                  Steady growth in usage of notebook, netbook, and new “tablet” computers;

·                  A migration to larger color screens, which are multi-touch enabled, for mobile phones and other handheld devices; and

·                  Decreasing costs economics, increasing throughput and improving efficiency of FPD production as newer generation LCD fabrication plants are increasing production.

These factors in combination with additional market forces are driving overall growth and shifting the mix of product applications within the FPD industry.

Applications.  With the proliferation of the internet, there has not only been an explosion in the amount of available content, but a rapid evolution of the form in which it appears.  No longer is information a two-dimensional, text-only experience; online content is now being delivered in graphic rich, animated and video formats.  As the sophistication of the user base continues to heighten and bandwidth continues to increase, there will be demand for superior, high resolution visual experiences that we believe only FPDs will be able to deliver — particularly in mobile wireless devices.  Flowing from this demand, new types of applications and functionality will evolve that, in turn, will enhance existing markets and create new ones.

Industry drivers such as new content explosion, high resolution capability, increased bandwidth and improved manufacturing efficiencies are driving new functionality in existing applications, as well as enabling the creation of new application markets that will drive the FPD industry through high volumes.

With the emergence of new technologies such as touch enabled smart phones, MP3 Players, TV Tuners and Bluetooth, new functionality in existing applications will likely fuel demand growth in what have become relatively mature markets.  For instance, while the mobile phone market has seen relatively slow growth rates, a large pool of sophisticated users now exists who are providing the demand for new technologies such as Phone Cameras and Phone TVs.  These enhanced devices will incorporate high performance, next generation displays that we believe will move away from Passive Matrix-LCDs towards Active Matrix-LCDs, as well as other emerging display types such as organic light emitting diodes (OLEDs). Additionally, FPD technology is increasingly taking forms beyond consumer electronic devices.  FPDs are increasingly used in emerging applications including retail signage, car navigation systems, instrumentation, and household appliances.

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The FPD market is currently dominated by LCDs, which account for over 90% of total FPD sales, and demand is increasing across multiple applications with FPD formats generating industry-wide momentum.

Films for Displays.  Glass and plastics are the principal materials being used as first surfaces for display systems.  As displays are incorporated into devices that are used extensively and transportably on daily basis, the displays are subject to damage and the effects of use.  A large and growing business has developed in films that are designed to provide protection and other functional uses on top of the display surface.  UniPixel has found that the technologies that it has developed can be applied to a variety of functional uses in films for display products.  Its Clearly Superior™ FPR product can protect a touch screen device from damage while also preventing fingerprints and smudges from obscuring the viewing experience.  Incorporating patterned conductors into the film also offers unique functional uses to the film as material for touch screen control.  Engineering the structures to specific patterns and distributions can control light output and reflectance.  UniPixel’s Performance Engineered Films™ have demonstrated that they can be applied to solutions for all of these aspects.

Comparing Touchscreen Technologies

The touch screen is one of the easiest PC interfaces to use, making it the interface of choice for a wide variety of applications.  Accordingly, there are several technologies that compete to capitalize on this market.  The following are some examples of these technologies:

4-Wire Resistive Touchscreens

It is a reliable and affordable technology that is widely used by individuals and in less demanding workplace applications. It is pressure sensitive so it responds to any input device, including finger, gloved hand, or pen stylus.

4-Wire Resistive touch technology consists of a glass or acrylic panel that is coated with electrically conductive and resistive layers. The thin layers are separated by invisible separator dots. When operating, an electrical current moves through the screen. When pressure is applied to the screen the layers are pressed together, causing a change in the electrical current and a touch event to be registered.

4-Wire Resistive type touch screens are generally the most affordable. Although clarity is less than with other touch screen types, resistive screens are very durable and can be used in a variety of environments. This type of screen is recommended for individual, home, school, or office use, or less demanding point-of-sale systems, restaurant systems, etc.

Advantages

·                  High touch resolution

·                  Pressure sensitive, works with any stylus

·                  Not affected by dirt, dust, water, or light

·                  Affordable touchscreen technology

Disadvantages

·                  75 % clarity

·                  Resistive layers can be damaged by a sharp object

·                  Less durable then 5-Wire Resistive technology

Capacitive Touchscreens

It is a durable technology that is used in a wide range of applications including point-of-sale systems, industrial controls, and public information kiosks. It has a higher clarity than Resistive technology, but it only responds to finger contact and will not work with a gloved hand or pen stylus.

A capacitive touch screen consists of a glass panel with a capacitive (charge storing) material coating its surface. Circuits located at corners of the screen measure the capacitance of a person touching the overlay. Frequency changes are measured to determine the X and Y coordinates of the touch event.

Capacitive type touch screens are very durable, and have a high clarity. They are used in a wide range of applications, from restaurant and POS use to industrial controls and information kiosks.

Advantages

·                  High touch resolution

·                  High image clarity

·                  Not affected by dirt, grease, moisture.

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Disadvantages

·                  Must be touched by finger, will not work with any non-conductive input

Surface Acoustic Wave Touchscreens

It is a very durable screen that is widely used in applications such as computer based training and information kiosk displays. The SAW screen is a good choice for applications where image clarity is important, but it may not perform well in extremely dirty or dusty environments. Responds to finger or soft rubber tipped stylus.

Surface Acoustic Wave technology is one of the most advanced touch screen types. It is based on sending acoustic waves across a clear glass panel with a series of transducers and reflectors. When a finger touches the screen, the waves are absorbed, causing a touch event to be detected at that point.

Because the panel is all glass there are no layers that can be worn, giving this technology the highest durability factor and also the highest clarity. This technology is recommended for public information kiosks, computer based training, or other high traffic indoor environments.

Advantages

·                  High touch resolution

·                  Highest image clarity

·                  All glass panel, no coatings or layers that can wear out or damage

Disadvantages

·                  Must be touched by finger, gloved hand, or soft-tip stylus. Something hard like a pen won’t work

·                  Not completely sealable, can be affected by large amounts of dirt, dust, and / or water in the environment.

Infrared Touchscreens

This is the only type of touch technology that we have available for large displays such as 42-inch Plasma screens. It is a durable technology that offers high image clarity. Responds to any input device or stylus.

5-Wire Resistive Touchscreens

It is a durable and accurate technology that is widely used in demanding workplace applications such as point-of-sale systems, industrial controls, and medical systems. It is pressure sensitive so it responds to any input device, including finger, gloved hand, or pen stylus.

5-Wire Resistive touch technology consists of a glass or acrylic panel that is coated with electrically conductive and resistive layers. The thin layers are separated by invisible separator dots. When operating, an electrical current moves through the screen. When pressure is applied to the screen the layers are pressed together, causing a change in the electrical current and a touch event to be registered.

5-Wire Resistive type touch screens are generally more durable than the similar 4-Wire Resistive type. Although clarity is less than with other touch screen types, resistive screens are very durable and can be used in a variety of environments. This type of screen is recommended for demanding point-of-sale systems, restaurant systems, industrial controls, and other workplace applications.

Advantages

·                  High touch resolution

·                  Pressure sensitive, works with any stylus

·                  Not affected by dirt, dust, water, or light

·                  More durable then 4-Wire Resistive technology

Disadvantages

·                  75 % clarity

·                  Resistive layers can be damaged by a sharp object

PenTouch Capacitive Touchscreens

This screen combines durable Capacitive technology with a tethered pen stylus. The screen can be set to respond to finger input only, pen input only, or both. The pen stylus is a good choice for signature capture, on-screen annotations, or for applications requiring precise input.

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The PenTouch Capacitive screen is a durable Capacitive type touchscreen with an attached pen stylus. The PenTouch screen can be set to respond to finger input only, pen input only, or both. A capacitive touch screen consists of a glass panel with a capacitive (charge storing) material coating its surface. Circuits located at corners of the screen measure the capacitance of a person touching the overlay. Frequency changes are measured to determine the X and Y coordinates of the touch event.

Capacitive type touch screens are very durable, and have a high clarity. They are used in a wide range of applications, from restaurant and POS use to industrial controls and information kiosks.

Advantages

·                  High touch resolution

·                  High image clarity

·                  Not affected by dirt, grease, moisture.

·                  Attached pen stylus for precise input

Disadvantages

·                  Must be touched by finger or attached pen stylus, will not work with any non-conductive input

Near Field Imaging Touchscreens

It is an extremely durable screen that is suited for use in industrial control systems and other harsh environments. The NFI type screen is not affected by most surface contaminants or scratches. Responds to finger or gloved hand.

Touch Screen Construction

There are several principal ways to build a touchscreen. The key goals are to recognize one or more fingers touching a display, to interpret the command that this represents, and to communicate the command to the appropriate application.

In the most popular techniques, the capacitive or resistive approach, there are typically four layers;

1.              Top polyester layer coated with a transparent metallic conductive coating on the bottom

2.              Adhesive spacer

3.              Glass layer coated with a transparent metallic conductive coating on the top

4.              Adhesive layer on the backside of the glass for mounting

When a user touches the surface, the system records the change in the electrical current that flows through the display.  The system determines the intended command based on the controls showing on the screen at the time and the location of the touch.

UNI-PIXEL’S TECHNOLOGY

Overview: We developed a color display technology called Time Multiplexed Optical Shutter (“TMOS”). A TMOS display is constructed by the addition of a single thin film layer positioned above the planar surface of a light guide constructed of glass or a polycarbonate substrate.  This positioning and bonding of the thin film forms a drum type of structure at each individual pixel.  The drum structure places two conductors parallel to each other with a dielectric air gap separation.  The light guide’s conductor at each pixel is either driven by local transistors (in the form of Thin Film Transistors, TFTs) or through connection to transistors that are off the light guide. The thin film layer comprising the drum head is targeted to be composed of a base substrate layer of polyester film, or PET film, the addition of surface micro-optic features, and a conductor.

The implementation of the thin film layer of material creates a matrix of optical shutters on the surface that are opened or closed as controlled by the TFTs.  This opening and closing process is the oscillation of the thin film in and out of contact with the light guide allowing the frustration of totally internally reflected (TIR) light.  Once the TIR light is frustrated, the micro-optic structures couple and direct the light to the viewer.  The panel unit should be simpler to manufacture than Plasma or LCD as the single PET film included in the system replaces several other materials and steps required for the production of Plasma or LCD.

Successful Prototypes: We built prototypes that have demonstrated proof of concept, technical viability, and the operation of the sub-systems within our TMOS technology. During 2008, we debuted fully functional TMOS display prototypes at the Society for Informational Display (SID) conference in Los Angeles.  Our prototyping efforts in furtherance of TMOS were focused on the process of optimizing the materials and assembly of the display to advance to manufacturability.

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Sale of TMOS Technology: In May 2010, we sold all of our TMOS related patents to Rambus, Inc.  In connection with this sale, we entered into an agreement with Rambus whereby we may choose to provide engineering support services to Rambus in furtherance of its development of the TMOS technology.  The engineering services we may provide are at our discretion, and we do not believe they constitute a material part of our business plan.

Spin-off Products:  During the development of the TMOS technology, we developed key core technology and know-how in many different areas that were necessary for the successful development of TMOS displays.  Through these efforts, we gained a significant understanding of thin polymer films.  Additionally, we had to develop the technology to make large area, high fidelity masters of our optical micro-structures and then replicate those optical micro-structures on a large area thin polymer film.  Subsequently, we developed the ability to make large quantities of these large area micro-structured films.  The first product, developed as a spin-off from the core TMOS developed technology, was our FingerPrint Resistant (FPR) film.  Our UniBoss™ platform, also developed as a spin-off from the core TMOS developed technology, enables the highly efficient manufacturing of transparent touch screens.  We also have other spin-off products under development, such as LCD backlights, general lighting films and 3D films.

STRATEGY

Ourbusiness strategy is to penetrate existing applications markets with our Clearly Superior™ family of Performance Engineered Film™ technologies including UniBoss™ produced touch panels and our FPR films. We have already made significant progress in penetrating direct film product markets leveraging the capabilities and competencies achieved in the development of our functional application specific films. We are presently focused on the following steps to implement our business strategy:

·                  Develop Strategic Relationships.  We plan to target strategic partners to further our efforts in the development and commercialization of UniBoss produced touch panel films and our FPR films. We believe that if these efforts are successful, they could result in UniBoss based touch panels reaching commercial markets in products within two years.  We are already selling our FPR films.  We believe that gaining the assistance of technology leading OEMs in the deployment of UniBoss produced touch panel films for their products is a significant step for our commercialization effort of this product.  As a result, we will seek to build relationships that will allow us to leverage our existing knowledge, scale, infrastructure, manufacturing and expertise in thin films, optics, control circuitry, assembly, and logistics.

·                  Enhance the Company’s Existing Performance Engineered Film Technology.  We believe that continuing development and enhancement of our PEF technology is critical to our success. Consequently, we intend to enhance our competitive technology position through internal development efforts that expand our intellectual property portfolio, collaborative relationships, and other strategic opportunities. Our primary focus is to expand our intellectual property through development of additional prototypes and materials that enhance and extend our product capabilities or the processes by which the systems are produced, thereby allowing them to be used in a broader array of applications and to maintain performance and market leadership over time.

·                  Develop Prototypes Suitable for Industry Demonstration.  We plan to produce prototypes that will demonstrate our ability to meet the most demanding requirements with a superior performing system and superior performing film products.  We have developed partners that provide a small volume pilot production line that provides limited quantities of films to meet demonstrate our production solutions for all applications.

·                  Finalize a Manufacturing Process.  We have completed the development of the core and foundation of our film manufacturing processes and have endeavored to protect the know-how and intellectual property in the developed processes.  While we use toll coaters to manufacture the FPR film, we intend to acquire all necessary equipment to manufacture the UniBoss films internally.

·                  Target Leading Manufacturers.  We plan to target leading display, materials and electronics manufacturers as potential partners and/or integrators of our Performance Engineered Film products. We will provide extensive technical assistance and support to manufacturers who are early evaluators, developers, or users of our FPR and UniBoss touch screen films. We will also employ a pull strategy (targeting end device OEMs), or “pull through” strategy, of our technologies by actively marketing their advantages to these manufacturers that incorporate touch screen technology into their devices.  This would allow our production partners to gain access to the OEM supply chain driven by end OEMs seeking the competitive product advantages offered by our Performance Engineered Film technologies.  We will also target Original Design Manufacturers (ODMs) targeted to assemble our sub-components and films into OEM products.

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·                  Drive Adoption by End-Product Original Equipment Manufacturers.  We plan to employ a “pull through” strategy by using prototype devices and films to demonstrate our technology to OEMs and ODMs that produce end user products. We believe that the significant advantages that our films will offer in performance and protection can position us to be the standard and will induce OEMs to request our solutions from their existing suppliers.

·                  Build the Company’s Revenue Sources.  We believe that we will be able to produce revenues from three distinct sources, licenses, film sales (UniBoss, FPR, and other film sales), and funded engineering services (in support of one of our products, paid for by a customer).

We plan to conduct research on the use of a variety of different thin-film technology in surface modification applications and the construction of multi-layer stacks where micro-structures can play unique functional roles. Our focus on next-generation technologies is designed to establish and extend our position as the leading provider of Performance Engineered Films as new markets and applications emerge.

MILESTONES TO COMMERCIALIZATION

We will continue to focus on technical and business development milestones. The execution of our overall business plan includes a planned push (targeting manufacturers) and pull (targeting end device OEMs) strategy for accelerating product development, supporting market entry, and the expansion of production capability and capacity.  Over the course of the last two years, we have pursued a technical development roadmap specific to FPR and UniBoss technology that seeks to accomplish the following:

·                  Finalization of micro-structure design and film materials for FPR;

·                  Characterization of FPR film performance across numerous touch screen devices;

·                  Implementation of high volume production of FPR film;

·                  Establishment of numerous sales channels for FPR film;

·                  Development of the Uniboss process; and

·                  Finalization of specifications for the production of UniBoss films.

Specific to other Performance Engineered films, we have pursued:

·                  Completion of designs for marketable products

·                  Completion of production processes for those products

·                  Completion of Joint Development and Supply and Manufacturing Agreements

Our senior management team will work with various targeted strategic partners in each step of the process to provide certain market and technical support resources.  We have established the leverage of access to partner pilot lines in launching and growing a continuous flow manufacturing system.  This pilot line has been the initial platform for the finalization of the specifications to be included in the continuous flow manufacturing system.

CUSTOMERS AND PARTNERS

We believe the future customers for the FPR film and UniBoss touch screen film will be the device manufacturers and OEMs that currently use touch screens with the LCD and OLED displays in their products. Initially, our strategic partners will be our primary customers through the commercialization process, including our development partners, manufacturing partners, and other vertical market partners.

We expect that we will pursue discussions with a variety of potential assembly and manufacturing partners as we achieve our technical milestones for our UniBoss touch screen film.  These discussions will include the demonstration of touch screen film that can either directly displace alternative technologies, or allow for unique new design implementations.  If design contracts for our films are secured, we will leverage these OEM customers for product unit demand to target potential manufacturing partners to expand production capacity.  We have completed development work within several contracts and with partners that provide comprehensive validation of our Performance Engineered Film technology and we believe that will serve as a basis for future customer growth.

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Our future Performance Engineered Films customers should include a variety of companies from device OEMs to channel distribution partners.  We will seek to sell rolls of film in uncut format as well as films that are die-cut and packaged as direct to market products.  The type and variety of film sales will depend on the nature of the specific buyer and target application for the film.

Current Partners

·                  Avery Dennision: We engaged Avery Dennison as an exclusive production partner for specific varieties of its FPR film products.  Avery provides assistance in the development and manufacturing of its thin film designs.  Implementation of Performance Engineered Films can be accomplished using a variety of materials that can achieve the required properties’ and characteristics.  No new or unique materials will be required, rather just the optimization of existing materials as implemented within the Avery process and system.  Initially we engaged Avery for development work with the objective of reaching a production agreement or joint venture with one or more thin film manufacturers.  During the course of 2010, we secured a subcontracted manufacturing capacity for our initial thin film production and also signed separate non-binding Memorandums of Understanding with other production partners to provide alternative manufacturing capacity.

·                  Rambus: We sold our TMOS related patents and related intellectual property to Rambus in May of 2010.  We also signed an Engineering Services Agreement with Rambus as part of that sale, pursuant to which we may continue to support the development of TMOS and other related product development for Rambus through the provision of engineering services.  The provision of these services is at our discretion and they are not viewed as material to our business.

Targeted Partners

·                  Drive Control Circuitry: Although not material to our business plans, wee will continue the development of our unique MEMs drive control circuitry.  We have developed unique intellectual property that will be implemented through a “fab-less” semiconductor model.  This may include potential development of new intellectual property, cross licensing, and the use of certain existing semiconductor capabilities from one or more partners.  We have developed a means to use off-the-shelf parts for certain drive control requirements that will allow us to produce prototypes in the short term, as well as leveraging the enhancements that we create over the longer term.

·                  Manufacturing and Assembly Partners: We are seeking strategic partners that are currently manufacturing or integrating touch screen panels into end user products.

Target Customers

·                  Large OEM and ODM for UniBoss touch screens and FPR films: We have demonstrated unique proof of concept prototype devices and film products to large computer system OEMs under non-disclosure agreements to advance the evaluation of the technologies.  The initial prototypes established the first products for testing, evaluation and performance characterization necessary to gather direct performance feedback.  Additional work continues specific to advancing the prototypes to implementation within an end user product.

·                  Consumer Electronics Manufacturers (OEMs): We have held initial exploratory meetings with a variety of consumer electronics OEMs, including cell phone, computer and television system manufacturers, that have all expressed a desire to possibly leverage UniBoss touch screen films and FPR films for their unique attributes in their products.  Each of these interactions has resulted in an invitation to return for further engineering specific meetings as our product development advances.

SALES AND MARKETING

We are seeking end user product OEMs that desire to integrate UniBoss touch screens into their products once available and demonstrating its superior performance.  We believe that some of the OEMs that have been engaged in these discussions will be interested in pursuing the advantages of UniBoss touch screens as a differentiator for their products relative to their competition in their individual market segments over time.  We believe that the proven entry into a single vertical market or application will drive the demand for that product for expanded applications to other product markets.

Our sales strategy intends to build a diverse revenue base that will derive revenues from multiple sources:

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·                  Product revenues — Proceeds from the sales of Performance Engineered Film products from retail, wholesale and OEM sales channels.

·                  Critical materials — Proceeds from the sales of Performance Engineered Film products to integrators or manufacturers that produce or assemble devices with touch screens.

·                  Engineering support contracts — Integrators that are seeking differentiate their products by leveraging the unique attributes that our Performance Engineered Films can potentially provide.

We plan to continue to create demand for its products by targeting specific OEMs in various market segments.  We will actively pursue OEMs by using our prototypes to demonstrate the advantages that our Performance Engineered Films can provide in the form of improved efficiencies and performance. We expect to create OEM interest in our products by gaining design wins for integration of FPR films and UniBoss touch screens into established end user devices and applications.

We will advance our “Clearly Superior” tag line and actively demonstrate the elegance and performance advantages of our unique solutions within the industry in support of our direct sales work with OEMs.  If our initial products reach the market and we begin to build momentum and manufacturing capacity within the industry, we may launch a marketing program to drive awareness of our technology as a component “brand” within the end user products.  This can currently be seen on our FPR packaging.  We expect that this marketing program will be designed to drive awareness and education among OEMs, wholesale and retail channels supporting our unique capabilities and enhanced performance.  We believe that we will be able to promote our brand as a valued component brand included within the OEM products as a part of our relationship with the end product OEMs.  Ultimately the goal of this marketing program will be to establish us and our unique technologies independently as a differentiating factor in end user products and to help promote our component value proposition through our partner OEMs that implement our Performance Engineered Film technology in their products similar to what has been done in the PC industry by certain semiconductor companies.

RESEARCH AND DEVELOPMENT

For the nine months ended September 30, 2010 and 2009, we have spent approximately $2.2 million and $2.5 million, respectively, on research and development activities.  We continue conducting research and development both internally and externally and anticipates investments going forward.

As of November 30, 2010, we had one principal location conducting internal research.  Our headquarters and primary development site are located in The Woodlands, Texas.  The headquarters location includes a Class 100 clean room where PEF materials development and testing is conducted, an electronics lab, optical testing facilities, test and measurement equipment, and electronics development systems.

Currently, we are engaged in the development of next generation products and prototypes to further demonstrate the full functionality of the PEF technology across multiple applications and markets in a variety of implementations. We have consolidated our vendors to a small group that assist our prototype efforts.  Working with our strategic partners, we hope to advance to our next generation working prototype devices.

The next phase prototypes should serve to support a product roadmap that targets the production of viable commercial UniBoss touch screens within 6-12 months. The development process is intended to also include selecting and completing the preferable manufacturing processes.

We plan to complete the acquisition and installation of the preferred manufacturing process for our UniBoss film products and have engaged a small-scale pilot production line that has been the research and development proving ground for a continuous flow manufacturing process followed by a roll to roll manufacturing process for all of our Performance Engineered Films.

Research and development costs are expensed as incurred and include salaries and benefits, costs to third party contractors to perform research or other activities related to our research, professional fees related to intellectual property work, and a portion of facilities costs.

COMPETITION

The industry in which we operate is highly competitive. While existing touch screen technologies based on the use of Indium Tin Oxide (ITO) currently dominate the marketplace, we will be more specifically competing against other emerging technologies that also seek to improve the performance of touch screen systems.  It is our objective to enable the existing touch

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screen manufacturing infrastructure to incorporate the use of UniBoss touch screen films into their current manufacturing and assembly operations.  In this way, we believe UniBoss touch screen products can penetrate the touch screen industry quicker and overcome the resistance to change.  Given the potentially compelling advantages that UniBoss touch screen films offer, we believe that this should be a relatively quick, inexpensive and profitable process for these manufacturers.

Compared to our competition, we believe we follows a more broadly developed business model allowing us to benefit from the following factors:

·                  A wide range of opportunity to enter the market;

·                  The flexibility to pursue multiple entry points to multiple market segments;

·                  The ability to be a supplier of key materials;

·                  The ability to profitably produce relatively small volumes of products; and

·                  The ability to leverage established infrastructures.

EMPLOYEES

As of November 30, 2010, we have 14 full-time employees and no part-time employees. None of these employees is covered by a collective bargaining agreement, and we believe our relationship with our employees is good. We also employ consultants on an as-needed basis to supplement existing staff.

OUR COMPLIANCE WITH ENVIRONMENTAL PROTECTION LAWS

We are not aware of any current federal, state or local environmental compliance regulations that have a material effect on our business activities. We have not expended material amounts to comply with any environmental protection statutes and do not anticipate having to do so in the foreseeable future.

PROPERTIES

Our main corporate offices and research and development facility are located at 8708 Technology Forest Place, Suite 100, The Woodlands, Texas 77381. We currently lease approximately 13,000 square feet of space at this facility.

LEGAL PROCEEDINGS

We may from time to time be involved in litigation relating to claims arising out of its ordinary course of business. Our management does not believe that there are any claims or actions pending or threatened against us, the ultimate disposition of which would have a material impact on our financial position, results of operations or cash flows.

MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information.  Since January 18, 2006, our common stock has been traded on the OTC Bulletin Board under the symbol “UNXL.OB”. From February 3, 2005 to January 17, 2006, our common stock was quoted on the “pink sheets” published by the Pink Sheets LLC under the symbol “UNXL.” Prior to February 3, 2005, our shares of common stock were traded under the symbol “REFL.” We changed our name to “Uni-Pixel, Inc.” from “Real-Estateforlease.com, Inc.” at the annual meeting of our stockholders held in January 2005. See “Price Range of Common Stock” for the range of high and low bid information of our common stock on the OTC Bulletin Board, as reported on the website of The NASDAQ Stock Market, giving effect to the 1-for-15 reverse stock split to be effected prior to the effectiveness of the registration statement of which this prospectus is a part.

See “Price Range of Common Stock” for information related to the number of holders of our common stock.  See “Dividend Policy” for information related to the payment of dividends by us on shares of our common stock.

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Equity Compensation Plan Information.  The following table presents information about shares of our common stock that may be issued upon the exercise of stock options under all of our existing equity compensation plans as of December 31, 2009.

(1)                                 As of December 31, 2009, there were 50,000 shares remaining available for future issuance under the 2005 Stock Incentive Plan and there were 1,398,881 shares remaining available for future issuance under the 2007 Stock Incentive Plan.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with “Summary Selected Consolidated Financial Information” and our consolidated financial statements and related notes appearing elsewhere in this prospectus.  In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions.  Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited, to those set forth under “Risk Factors” and elsewhere in this prospectus.

CRITICAL ACCOUNTING POLICIES

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

Revenue Recognition:  We recognize revenue over the period the service is performed. In general, this requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence that an arrangement exists, (2) delivery has occurred or services rendered, (3) the fee is fixed and determinable, and (4) collectability is reasonably assured.

Advance payments are deferred until shipment.

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

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

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

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

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

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

Derivatives: We record and carry certain derivatives (embedded and free standing instruments) on the balance sheet as either liabilities or assets at fair value.  Derivatives are measured at fair value with changes in fair value recognized through earnings as they occur.

RESULTS OF OPERATIONS

Comparison of the nine months ending September 30, 2010 and 2009

REVENUES.  During the first quarter of 2010 we began to manufacture, market and sell our thin film product, and we are no longer considered a development stage entity as defined by the Financial Accounting Standards Board.

Revenues were $140,037 for the nine months ended September 30, 2010 and $0 for the nine months ended September 30, 2009.  The revenue for the nine months ended September 30, 2010 was primarily related to the sale and marketing of our thin film product.

COST OF REVENUES.  Cost of revenues include all direct expenses associated with the delivery of services including internal labor costs. Cost of revenues were $1,075 for the nine months ended September 30, 2010 and $0 for the nine months ended September 30, 2009. We began incurring cost of revenue during the third quarter of 2010 related to our thin film sales, as the thin film was recorded as research and development expense in 2009 and for the six months ended June 30, 2010.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and administrative expenses increased by 5%, or approximately $105,000, to $2,285,178 for the nine months ended September 30, 2010 from $2,179,777 for the nine months ended September 30, 2009.  The major components of the increase are as follows:

a)  Salaries and benefits increased by approximately $363,000 to $1,633,000 for the nine months ended September 30, 2010 compared to $1,270,000 for the nine months ended September 30, 2009.  This increase was due largely to an increase in stock compensation expenses to $1,224,000 for the nine months ended September 30, 2010 compared to $490,000 for the nine months ended September 30, 2009, while salaries decreased to $326,000 for the nine months ended September 30, 2010 compared to $504,000 for the nine months ended September 30, 2009;

b) Legal expense decreased by approximately $83,000 to $155,000 for the nine months ended September 30, 2010 compared to $238,000 for the nine months ended September 30, 2009;

c) Accounting expense decreased by approximately $4,000 to $53,000 for the nine months ended September 30, 2010 compared to $57,000 for the nine months ended September 30, 2009;

d) Office expense increased by approximately $3,000 to $14,000 for the nine months ended September 30, 2010 compared to $11,000 for the nine months ended September 30, 2009;

e) Travel expense decreased by approximately $11,000 to $7,000 for the nine months ended September 30, 2010 compared to $18,000 for the nine months ended September 30, 2009;

f) Depreciation and amortization expense decreased by approximately $66,000 to $183,000 for the nine months ended September 30, 2010 compared to $249,000 for the nine months ended September 30, 2009.

RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses decreased by approximately $241,000 during the nine months ended September 30, 2010 to $2,211,015 from $2,452,030 for the nine months ended September 30, 2009. The major components of the decrease are as follows:

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a) Salaries and benefits attributable to research and development decreased by approximately $157,000 to $1,714,000 for the nine months ended September 30, 2010 compared to $1,871,000 for the nine months ended September 30, 2009 due to a decrease in salaries to $693,000 for the nine months ended September 30, 2010 compared to $1,013,000 for the nine months ended September 30, 2009; and stock compensation expense increased to $894,000 for the nine months ended September 30, 2010 compared to $553,000 for the nine months ended September 30, 2009;

b) Consulting expense attributable to research and development decreased by approximately $17,000 to $112,000 for the nine months ended September 30, 2010 compared to $129,000 for the nine months ended September 30, 2009;

c) Lab expense decreased by approximately $42,000 to $176,000 for the nine months ended September 30, 2010 compared to $218,000 for the nine months ended September 30, 2009 primarily due to decreased services related to prototype development; and

d) Travel expense attributable to research and development decreased by $12,000 to $73,000 for the nine months ended September 30, 2010 compared to $85,000 for the nine months ended September 30, 2009.

OTHER INCOME (EXPENSE).

a) In May 2010, we sold our intellectual property portfolio relating to our next generation color display technology that we called Time Multiplexed Optical Shutter (TMOS) to Rambus, Inc. for $2,250,000.  The intellectual property sold was recorded at $161,165, net.  In furtherance of this sale, we entered into an engineering services agreement with Rambus pursuant to which we may, at our option, elect to provide engineering services to support Rambus’ development of this technology.  These services are at our election and do not constitute a material part of our business plan.

b) Debt issuance expense increased to $461,949 for the nine months ended September 30, 2010, as compared to $54,951 during the nine months ended September 30, 2009, due to the debt raised in the last three quarters of 2009 and the first quarter of 2010.

c) Interest expense, net decreased to ($219,283) for the nine months ended September 30, 2010, as compared to an expense of $22,179 for the nine months ended September 30, 2009 primarily due to less cash on hand and interest expense associated with the debt raised in the last three quarters of 2009 and the first quarter of 2010.

NET LOSS.   Net loss decreased to $2,949,628 for the nine months ended September 30, 2010, as compared to net loss of $4,708,937 for the nine months ended September 30, 2009. We compute our net income (loss) per share on the basis of net loss attributable to common stockholders, which included the effects of certain items not included in the determination of net loss. Net loss attributable to common stockholders for the nine months ended September 30, 2010 was $2,949,628 as compared to a net loss attributable to common stockholders of $8,278,073 for the nine months ended September 30, 2009. The net loss attributable to common stockholders for the nine months ended September 30, 2009 includes $3,569,136 of accrued but unpaid preferred stock dividends.

Comparison of Fiscal Years Ending December 31, 2009 and 2008

REVENUES.  At all times during fiscal years 2009 and 2008, we were a development stage company.  Revenues remained constant at $0 for the year ended December 31, 2009, as compared to the year ended December 31, 2008.

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

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and administrative expenses decreased by 28% or $927,749, to $2,365,613 for the year ended December 31, 2009 from $3,293,362 for the year ended December 31, 2008. The major components of the decrease are as follows:

a)  Salaries and benefits decreased by approximately $357,000 to $1,236,000 for the year ended December 31, 2009 from $1,593,000 for the year ended December 31, 2008.  This decrease was due primarily to a decrease in bonus expense to $201,000 for the twelve months ended December 31, 2009 from $44,000 for the twelve months ended December 31, 2008, and was offset by an increase in stock compensation expense to $617,000 for the twelve months ended December 31, 2009 from $602,000 for the twelve months ended December 31, 2008;

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b) Contract labor decreased by approximately $8,000 to $0 for the year ended December 31, 2009 from $8,000 for the year ended December 31, 2008;

c) Legal expense decreased by approximately $186,000 to $280,000 for the year ended December 31, 2009 from $466,000 for the year ended December 31, 2008 as a result of decreased patent work;

d) Accounting expense decreased by approximately $11,000 to $70,000 for the year ended December 31, 2009 from $81,000 for the year ended December 31, 2008;

e) Office expense decreased by approximately $55,000 to $14,000 for the year ended December 31, 2009 from $69,000 for the year ended December 31, 2008;

f) Travel expense decreased by approximately $23,000 to $20,000 for the year ended December 31, 2009 from $43,000 for the year ended December 31, 2008;

g) Depreciation and amortization expense increased by approximately $32,000 to $332,000 for the year ended December 31, 2009 from $300,000 for the year ended December 31, 2008 as a result of an  increase in the amortization of intangible assets during the twelve months ended December 31, 2009; and

RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses decreased by $4,709,871 during the year ended December 31, 2009 to $2,765,658 from $7,475,529 for the year ended December 31, 2008. The major components of the decrease are as follows:

a) Salaries and benefits attributable to research and development decreased by approximately $894,000 to $1,972,000 for the year ended December 31, 2009 from $2,866,000 for the year ended December 31, 2008 due to a) a decrease in the number of research and development employees in 2009, b) stock compensation expense increased to $618,000 for the twelve months ended December 31, 2009 from $436,000 for the twelve months ended December 31, 2008, and c) bonus expense decreased to $182,000 for the twelve months ended December 31, 2009 from $84,000 for the twelve months ended December 31, 2008;

b) Consulting expense attributable to research and development decreased by approximately $878,000 to $205,000 for the year ended December 31, 2009 from $1,083,000 for the year ended December 31, 2008 primarily due to decreased services related to prototype development;

c) Lab expense decreased by approximately $2,669,000 to $273,000 for the year ended December 31, 2009 from $2,942,000 for the year ended December 31, 2008 primarily due to decreased services related to prototype development; and

d) Travel expense attributable to research and development decreased by approximately $202,000 to $117,000 for the year ended December 31, 2008 from $319,000 for the year ended December 31, 2007.

OTHER INCOME (EXPENSE).

a) Debt issuance expense increased to $164,960 for the year ended December 31, 2009 due to the debt raised in 2009.

c) Interest expense, net decreased to an expense of $76,607 for the year ended December 31, 2009 as compared to an interest income, net of $184,475 for the year ended December 31, 2008 primarily due to interest expense associated with the debt raised in 2009.

NET LOSS.  Net loss decreased to $5,372,838 for the year ended December 31, 2009, as compared to $10,584,416 for the year ended December 31, 2008. We compute our net loss per share on the basis of net loss attributable to common stockholders, which included the effects of certain items not included in the determination of net loss. Net loss attributable to common stockholders for the year ended December 31, 2009 was $10,002,269 as compared to a net loss attributable to common stockholders of $15,354,514 for the year ended December 31, 2008. The net loss attributable to common stockholders for the twelve months ended December 31, 2009 includes $3,569,136 preferred stock dividends and amortization of preferred stock discount and $1,060,295 for additional warrants and dividends issued to Series B and C Preferred Stock holders to induce conversion to common stock.  The net loss attributable to common stockholders for the twelve months ended December 31, 2008, includes $4,770,098 of accrued but unpaid preferred stock dividends and amortization of preferred stock discount.

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OFF-BALANCE SHEET TRANSACTIONS

We do not have any off-balance sheet transactions.

LIQUIDITY AND CAPITAL RESOURCES

Operating Activities

Cash used in operating activities during the nine months ended September 30, 2010 decreased to $2,251,511 as compared to $2,840,371 used for the nine months ended September 30, 2009. This is primarily attributable to a decrease in research and development expense for the nine months ended September 30, 2010.

Investing Activities

Cash flows from investing activities during the nine months ended September 30, 2010 increased to $2,250,000 as compared to $0 for the nine months ended September 30, 2009.  In May 2010, the Company sold its patent portfolio for TMOS technology to Rambus, Inc. for $2,250,000.

Financing Activities

We have financed our operating and investing activities primarily from the proceeds of our private placement of common stock, convertible notes and preferred stock.  During the nine months ended September 30, 2010, the total net cash provided by financing activities was $666,274, from the net proceeds received from the private placement of convertible notes.  During the nine months ended September 30, 2009, the total net cash provided by financing activities was $1,684,570, all from net proceeds received from the private placement of convertible notes.

Working Capital

Our primary sources of liquidity have been short-term loans from private placements of convertible notes, private placements of equity securities, and the sale of certain intellectual property.  In the fourth quarter of 2008, we began to reduce operating expenses and delay planned expenditures to preserve our working capital.  In the second, third and fourth quarters of 2009 and first quarter of 2010 we raised $650,000, $1,275,000, $400,000 and $775,000 in convertible notes, respectively, all of which will be due and payable upon the consummation of this offering.  In the second quarter of 2010, we raised $2,250,000 through the sale of certain intellectual property to Rambus, Inc.

As of September 30, 2010, we had a cash balance of approximately $1.0 million.  We project that current cash reserves, before inclusion of proceeds from this offering, will sustain our operations through December 31, 2010, and we are not aware of any trends or potential events that are likely to adversely impact our short term liquidity through this term.  After December 31, 2010, absent proceeds from this offering, we do not believe we will have sufficient proceeds to meet our anticipated working capital needs.

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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table sets forth the names and ages of all of our directors and executive officers as of November 30, 2010. Our officers are appointed by, and serve at the pleasure of, the Board of Directors.

Biographical information with respect to our executive officers and directors is provided below. There are no family relationships between any of our executive officers or directors.

Reed J. Killion, Chief Executive Officer, President, Principal Executive Officer and Director —Mr. Killion is a member of our board of directors and has served as our President and Principal Executive Officer since September 2004. As of May 1, 2008, Mr. Killion was promoted to Chief Executive Officer.  Mr. Killion is also the Chairman of the Board for Animal Innovations, Inc. Mr. Killion is an active Board Member and Trustee of the Texas A&M Research Foundation. Previously Mr. Killion served as our Executive Vice President of Business Development and has been a member of ours board of directors since April 2002.  Prior to joining Uni-Pixel, Mr. Killion was Vice President of Business Development for LogiCom from 1999 until 2002.  HP/Compaq, Dell, DEC, Siemens, NVIDIA, Vanguard, Atmel, Foxconn, Seiko (SMOS) and DCM Technologies are among the companies Mr. Killion has represented and consulted with over his 20 years in the high tech industry.  Mr. Killion holds a Bachelors Degree in Finance from the University of Mississippi.

Mr. Killion’s eight years of leadership with us makes him highly qualified to be a member of our board.  He has a comprehensive understanding of our company and management, operations, financial requirements and technologies.  Mr. Killion’s management experience and active involvement in various industries enable him to guide our business strategy in an increasingly complex business environment.

Robert J. Petcavich, Vice President and General Manager — Dr. Petacavich has been the Vice President and General Manager of Uni-Pixel since he joined us in January 2008.  Dr Petcavich was also the cofounder of Health Beacons Inc. in Kirkland, Washington, a company that develops leading edge implantable RFID technology for the medical surgical cancer field. Dr Petcavich was Senior Vice President and Chief Technology Officer of Lumera Corporation (NASDAQ:LMRA) in Bothell, Washington, a publicly traded nanotechnology polymer platform bioscience and molecular photonics technology company. Dr. Petcavich has been the Chairman, CEO and CTO of several advanced materials and medical informatics technology companies. Dr. Petcavich was Vice President of Deposition Technologies Inc. from 1982 to 1988, an advanced materials company involved in electro optic and aerospace thin film materials development and manufacturing which was subsequently acquired by Brunswick Defense (NYSE:BC) and Material Sciences Corporation (NYSE:MSC) in 1986. From August 1988 until September 1995, Dr. Petcavich was President and CEO of Alphascribe Express Inc., an electronic medical records service enterprise, which was subsequently sold to Rodeer Systems.  Dr. Petcavich was also founder, Chairman and CTO of Planet Polymer Technologies Inc. (Nasdaq:POLY now PLNT) from 1992 until 2002, an advanced materials intellectual property development company which merged with Allergy Free Inc. of Houston, Texas.  Dr. Petcavich was also founder, CEO and Chairman from 1996 until 2001 of Alife Medical Inc a Natural Language Processing software services provider for the medical billing industry now majority owned by Medquist (NASDAQ:MEDQ) a subsidiary of Philips Electronics. Dr. Petcavich was also founder and board member of Molecular Reflections Inc., a MEMS based biotech design and discovery Platform Company as well as Polytronix Inc., a custom LCD manufacturer of Richardson, Texas. Dr Petcavich has a Ph.D. degree in Polymer Science, a Master of Science Degree in Solid State Science, and a B.S. degree in Chemistry from the Pennsylvania State University, and completed the PMD executive management degree program at Harvard.  Dr. Petcavich holds 24 issued United States patents in fields such as electro optic LCD displays, biotechnology MEMS devices, time released animal neutraceuticals, fruit shelf life extension technology, and handheld wireless devices. Dr. Petcavich is also on the Board of Directors of the College of Science and College of Material Science and Engineering at the Pennsylvania State University and Carbon Nanoprobes Inc. in Seattle, Washington.

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Dan Van Ostrand, Vice President Research & Development — Mr. Van Ostrand is one of our founders and has served in a Senior Executive position since our inception in February of 1998.  Mr. Van Ostrand has many years of experience in corporate operations, project management, systems engineering and systems design and has been involved in our establishment, funding and management.  Since 2004, he has been leading our corporate R&D activities, including microstructure mastering and Intellectual Property development.  In 2009 he also took over responsibility for all of our Engineering activities.  As co-owner from 1984 through 1992 of a closely-held company that designed ruggedized VME-based tactical computer systems for the United States Army, he was exposed to and became interested in the design, development and engineering principles of flat panel display technology.  Mr. Van Ostrand was a Systems Engineer from 1980 until 1992 for Informatics General, Magnavox, Teledyne and the Jet Propulsion Laboratory.  He has a BA with a double major in Math and Computer Science from Mid-America Nazarene University.

Jeffrey Tomz, Chief Financial Officer — On March 14, 2010, Jeffrey Tomz became our principal financial officer and on July 1, 2010, the board of directors formally designated Mr. Tomz as our Chief Financial Officer. Since June 2005, Mr. Tomz has been our VP of Finance. From August 2001 to April 2005, Mr. Tomz was the Chief Financial Officer of Isolagen, Inc. (AMEX:ILE) and was instrumental in raising over $190 million in equity and debt for Isolagen. From October 1999 to August 2001, Mr. Tomz was a Principal at Benchmark Equity Group, Inc. Mr. Tomz has served on the board of directors of various companies, including InfoHighway Communication Corp., a private communication company from September 1998 to September 2000. Prior to joining Benchmark in the fall of 1997, Mr. Tomz began his career as a certified public accountant with Arthur Andersen Worldwide. Mr. Tomz received his MPA from The University of Texas at Austin.

Carl J. Yankowski, Director— Mr. Yankowski has served as a director since March 16, 2007.  Mr. Yankowski has served as the CEO of Ambient Devices, Inc. since August 2007.  Mr. Yankowski was named CEO of Palm, Inc. in December 1999, three months before its initial pubic offering that raised in excess of $1 billion.  Immediately prior to joining Palm, Mr. Yankowski was CEO of the Reebok Brand, where he led the worldwide Reebok-brand business, a multibillion dollar enterprise that recently merged with Adidas.  During his tenure at Reebok, Mr. Yankowski successfully reorganized the Company for growth, significantly streamlined operations, and improved profitability.  Mr. Yankowski spent over four years at Sony Electronics, Inc. as President and COO where he was responsible for the development and launch of numerous successful products in growing markets and new business categories for Sony, including DVD, CDMA, digital imaging, and VAIO personal computers.  He also oversaw the initial U.S. launch of PlayStation.  Mr. Yankowski led Sony to profitable U.S. revenue growth from $6+ Billion to over $10 Billion, and oversaw a dramatic expansion of U.S. manufacturing.  In an earlier position as Chairman of Polaroid’s Asia Pacific Region, Mr. Yankowski led growth in the business imaging market globally and set up the Company’s Asia Pacific headquarters.  Mr. Yankowski has held marketing and strategic leadership positions in several other prestigious technology and consumer-products companies, including General Electric Co., Pepsi, Memorex and Procter & Gamble.  Mr. Yankowski earned simultaneous bachelors of Science degrees in electrical engineering materials science and management from Massachusetts Institute of Technology (“MIT”).  He is a Director of Informatica, Avidyne, and several other firms.  He serves or has served on the visiting committee of MIT Media Lab, and on the Boards of the Boston College Carroll School of Business and MIT Sloan School.

Mr. Yankowski’s leadership roles in numerous fortune 500 companies make him a valuable member of our board of directors and audit committee.  The extensive management experience he has acquired in these roles provide him with the knowledge to deal with financial, accounting, regulatory and administrative matters.  Mr. Yankowksi is well-versed in accounting principals and financial reporting rules and regulations, and is equipped to evaluate financial results and lead our audit committee.

Bernard Marren, Director— Mr. Marren has served as a director since March 16, 2007 and has been Chairman of our board of directors since May 1, 2008.  Mr. Marren is currently the President and CEO of OPTi, Inc., a company that licenses intellectual property for logic chips. He is also a Director of Microtune, Inc. and InFocus Corporation.  In a career that spans more than 40 years, Mr. Marren was both a founder of and the top executive with multiple companies that pioneered new semiconductor technologies. He also served as chief executive with a number of high-tech firms, and is widely regarded for his leadership in sales and marketing, engineering and operations. He has been associated in his career with Western Micro Technology, Inc., Silicon Engineering, Inc., INNO COMM Wireless, American MicroSystems, Inc., and  Fairchild Semiconductor. Extending his executive leadership to the electronics industry as a whole, Mr. Marren was a founder and the first President of the Semiconductor Industry Association. He is also a past President and Chairman of the National Electronic Distributors Association and a past President of the Electronic Industry Show Corporation.  Mr. Marren is a graduate of the Illinois Institute of Technology (BSEE).

Mr. Marren’s technology industry experience, particularly as it relates to our industry, makes him highly qualified to lead our board.  With his business experience and educational background, Mr. Marren is well-versed in the review and

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evaluation of financial statements of publicly traded companies, which enables him to provide valuable insight to our board of directors.

Bruce Berkoff, Director— Mr. Berkoff has served as a director since March 16, 2007. Mr. Berkoff is the Chairman of the LCD TV Association which is a global not-for-profit marketing trade association to help “inform, promote, improve, and connect” the entire supply chain involved with the large and growing multibillion dollar LCD TV industry.  Mr. Berkoff is also a Director of LG Display.  Previously, Mr. Berkoff was the CEO and later Chairman of Enuclia Semiconductor, a fab-less semiconductor startup in the HDTV video processor space, and prior to that for 6 years in Seoul Korea he was the Executive Vice-President and Chief Marketing Officer (CMO) of LG.Philips LCD, one of the world’s leading TFT-LCD manufacturers. Before that, Mr. Berkoff served as general manager of Philips Flat Display Systems’ software and electronics business unit in Silicon Valley. He has also held executive management positions at several technology companies, including UMAX Computer Corporation, Radius, and SuperMac Technologies.  Mr. Berkoff is well-known for his visionary keynote addresses, panel chairmanships and other roles at display and electronics industry events, including the Symposium on Information Displays (SID) Business & Investor Conferences, USDC (US Display Consortium) Conferences, DisplayForum Europe, HDTV Forum, Asia SID (ASID), EuroDisplays (ESID), the U.S. Flat Panel Display (US FPD) Conference, the Flat Information Display (FID) Conference and the Consumer Electronics Show (CES) in Las Vegas.  Mr. Berkoff holds undergraduate and graduate degrees in physics and biophysics from Princeton and the University of California, Berkeley, respectively, and also has display-related patents both granted and pending in the U.S. and China.

Mr. Berkoff’s technology industry experience, particularly as it relates to our industry, makes him highly qualified to serve as a member of our board of directors and other board committee.  With his business experience and educational background, Mr. Berkoff is well-versed in the review and evaluation of financial statements of publicly traded companies.  He provides valuable insight to our board of directors and other board committees.

Ross Young, Director— Mr. Young has served as a director since May 20, 2008. Mr. Young founded DisplaySearch, the leading provider of market intelligence on displays and related technology, in 1996 and is credited with building the firm to what it is today. Mr. Young has made multiple appearances on television, including NBC’s  The Today Show as a display industry expert, and has been an invited speaker at over 30 different conferences worldwide. Mr. Young received The NPD Group’s prestigious John Byington Award for outstanding creativity and innovation in November 2006, was appointed to the Board of Directors at Westar Display Technologies in February 2005 and was named to the VLSI Research Executive All-Star Team in 1994. Prior to founding DisplaySearch in 1996, he served in senior marketing positions at OWL Displays, Brooks Automation, Fusion Semiconductor and GCA in the driver IC, flat panel automation, etch and strip and lithography markets. He is also a published author, having written a book on U.S. - Japanese competition titled  Silicon Sumo: U.S.-Japan Competition and Industrial Policy in the Semiconductor Equipment Industry . As of September 2008, Mr. Young is currently a Vice President at Samsung Electronics. Mr. Young holds a Bachelor Degree in economics from the University of California at San Diego.

Mr. Young’s technology industry experience, particularly as it relates to our industry, makes him highly qualified to serve as a member of our board of directors and other board committee.  With his business experience, Mr. Young is well-versed in new technologies to help lead our company.  He provides valuable insight to our board of directors and other board committees.

The Board members serve for the latter of a period of one year or until the next annual meeting of stockholders.

Our executive officers are appointed by our board of directors and hold office until removed by the board.

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EXECUTIVE COMPENSATION

The table below summarizes the total compensation paid to or earned by our principal executive officer, our principal financial officer and each of our two other executive officers other than our principal executive officer and principal financial officer.  The amounts represented in the “Option Awards” column reflect the stock compensation expense recorded by the Company pursuant to ASC Topic 718 and does not necessarily equate to the income that will ultimately be realized by the named executive officers for such awards.

2009 Summary Compensation Table

(1)                                  Amounts reflect the aggregate annual cash bonus earned by each of our named executive officers for fiscal years 2009 and 2008.  There were no cash bonus paid for fiscal years 2009 and 2008.

(2)                                  For 2009 and 2008, the amounts reflect the compensation cost recognized in 2009 and 2008, respectively, for stock options in accordance with ASC Topic 718, which reflects the fair value of all stock-based compensation on the date of grant.  For additional information relating to the assumptions made by us in connection with the valuation of these awards for 2009, refer to Note 3 of our financial statements herein.  For additional information relating to the assumptions made by us in connection with the valuation of these awards for 2008, refer to Note 3 of our financial statements in our Annual Report on Form 10-KSB for the year ended December 31, 2008.

(3)                                  Excludes perquisites and other personal benefits unless such compensation was greater than $10,000.  For Mr. Killion and Mr. Tassone, amounts include a car allowance.

(4)                                  Effective March 14, 2010, Mr. Tassone resigned as chief financial officer.

401(k) Plan

Effective February 2007, we created an employee benefit plan available to all full-time employees under Section 401(k) of the Internal Revenue Code (“401(k) plan”). Employees may make contributions up to a specified percentage of their compensation, as defined. We are not obligated to make contributions under the 401(k) plan. In addition, we did not make any matching employer contribution to the 401(k) Plan in 2009 or 2008.

Employment Agreements

As of September 30, 2010, we do not have any employment agreements in effect.

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Outstanding Equity Awards at December 31, 2009

(a)          Vests monthly over 36 months beginning September 13, 2007.

(b)         Vests monthly over 36 months beginning April 18, 2008.

(c)          Vests monthly over 36 months beginning January 7, 2008.

Director Compensation

The table below summarizes the total compensation paid to or earned by our directors during 2009. The amounts represented in the “Option Awards” column reflects the stock compensation expense recorded by us and does not necessarily equate to the income that will ultimately be realized by the director for such awards.   The table does not include Mr. Killion whose compensation is described in the Summary Compensation Table above.

2009 Director Summary Compensation Table

Overview

Our director compensation program consists of cash-based, as well as equity-based, compensation. Our board of directors recognizes that cash compensation is an integral part of the compensation program and has instituted a fixed fee structure to provide compensation relative to the required time commitment of each director. The equity component of our

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director compensation program is designed to build an ownership stake in our company while conveying an incentive to directors relative to the returns recognized by our shareholders.

Cash-Based Compensation

Non-employee directors receive an annual stipend of $40,000 paid in equal monthly installments.   All directors are reimbursed ordinary and reasonable expenses incurred in exercising their responsibilities in accordance with our Travel and Entertainment Expense Reimbursement policy applicable to all of our employees.  The non-employee directors waived their cash compensation fees in November 2008 and December 2008 and for all of fiscal 2009 and 2010.

Equity-Based Compensation

Under provisions adopted by the board of directors, each non-employee director receives an option to purchase 100,000 shares of our common stock issued upon his first election to the board.  These options vest monthly over three years. Stock options granted under the plan are priced at the closing market price of our stock on the day of grant.

Pension and Benefits

The non-employee directors are not eligible to participate in our benefits plans, including the 401(k) plan.

Indemnification Agreements

Our certificate of incorporation requires us to indemnify both our directors and officers to the fullest extent permitted by Delaware state law.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

We have set forth in the following table certain information regarding our common stock, on an as converted basis, beneficially owned by (i) each stockholder we know to be the beneficial owner of 5% or more of our outstanding common stock, (ii) each of our directors and named executive officers, and (iii) all executive officers and directors as a group. Generally, a person is deemed to be a “beneficial owner” of a security if that person has or shares the power to dispose or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which the person has the right to acquire beneficial ownership within 60 days pursuant to options, warrants, conversion privileges or similar rights.  Unless otherwise indicated, ownership information is as of November 30, 2010.