Saturday, April 15, 2006

Alien: Form S-1 Registration Statement

Out of these world cogs and operating expenses:

"For the fiscal year ended September 30, 2005, we generated revenue of approximately $19.8 million, consisting of $12.7 million in product revenue and $7.1 million in service revenue. For the three months ended December 31, 2005, we generated revenue of approximately $5.1 million, consisting of $2.4 million in product revenue and $2.7 million of service revenue. We incurred net losses of $53.0 million in fiscal 2005 and $17.9 million in the three months ended December 31, 2005. Net loss before cumulative effect of change in accounting principle was $10.4 million in the three months ended December 31, 2005. As of December 31, 2005, we had an accumulated deficit of $201.2 million. "

We have a history of losses, and we expect to incur additional losses in the future. We cannot be certain that we will achieve or sustain profitability.


We have never been profitable. We have experienced operating losses in the past, and we expect to continue to incur additional operating losses in the future. We incurred net losses of $19.1 million, $27.6 million and $53.0 million in fiscal 2003, fiscal 2004 and fiscal 2005, respectively, and $17.9 million in the three months ended December 31, 2005. Net loss allocable to common stockholders was $44.5 million, $27.6 million and $53.0 million in fiscal 2003, fiscal 2004 and fiscal 2005, respectively. As of December 31, 2005, we had an accumulated deficit of $201.2 million. Our ability to achieve or sustain profitability is based on a number of factors, many of which are out of our control, including the development of the market for RFID products generally, and the demand for our RFID products, in particular. We may never be able to generate sufficient revenues or sell a sufficient volume of RFID tags to achieve or sustain profitability on a quarterly or annual basis. In addition, we have not reported positive gross margins on the sale of our RFID products since we began selling such products in 2002. We do not expect to have positive gross margins on sales of our Gen 2 RFID tag products until our sales volumes for our Gen 2 tags increase substantially and we complete our anticipated transition to using our proprietary FSA-based tag manufacturing processes and our newly designed ICs in these products. The completion of this transition to our FSA-based tag manufacturing process is not currently anticipated to occur until the first half of fiscal 2007 and may take longer. We currently use the more expensive flip chip assembly processes to manufacture our Gen 2 RFID tag products. In addition, we purchase ICs for our Gen 2 products that cost more than our newly designed ICs. Any delays in the transition to our newly designed Gen 2 ICs will adversely affect our gross margins

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