**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**--------------------------------------**

**FORM 10-Q**

**--------------------------------------**

 

**[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2006**

 

**or**

 

**o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (For the transition period from ___ to ___ ).**

 

**Commission File Number: 000-31973**

 

**Beacon Power Corporation**

**(Exact name of registrant as specified in its charter)**

 

| **Delaware******                | **04-3372365******  |
|---------------------------------|---------------------|
| (State or other jurisdiction of | (I.R.S. Employer    |
| incorporation or organization)  | Identification No.) |

 

 

| **234 Ballardvale Street******           | ** **         |
|------------------------------------------|--------------------|
| **Wilmington, Massachusetts******        | **01887-1032****** |
| (Address of principal executive offices) | (Zip code)         |

 

 

**(978) 694-9121**

 (Registrant's telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes _X_  No ___

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act.) 

 

| Large accelerated filer ___ | Accelerated filer ___ | Non-accelerated filer _X_ |
|-----------------------------|-----------------------|---------------------------|

 

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act.) Yes ____  No __X__

 

The number of shares of the Registrant's common stock, par value $.01 per share, outstanding as of May 1, 2006 was 58,412,130.

 

 

 

 

**BEACON POWER CORPORATION AND SUBSIDIARY**

**(A Development Stage Company)**

**Table of Contents**

 

 

| Page |
|------|

 

PART I.  Financial Information

 

| Item 1.  Financial Statements. |
|--------------------------------|

 

| Consolidated Balance Sheets at March 31, 2005 (unaudited) and December 31, 2005 (audited). | 1 |
|--------------------------------------------------------------------------------------------|---|

 

Unaudited Consolidated Statements of Operations for the three months ended March 31, 2006

| and 2005 and for the period from May 8, 1997 (date of inception) to March 31, 2006. | 2 |
|-------------------------------------------------------------------------------------|---|

 

| Unaudited Consolidated Statements of Cash Flows for three months ended March 31, 2006 |  
 
and 2005 and for the period from May 8, 1997 (date of inception) to March 31, 2006.

3

 

Notes to Unaudited Consolidated Financial Statements.

5-11

 

Item 2.  Management's Discussion and Analysis of Financial Condition and

 
 
Results of Operations.

12-19

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

19

 

Item 4.  Controls and Procedures.  

19

 

PART II.  Other Information

 

Item 1.  Legal Proceedings.

20

Item 1A. Risk Factors

20

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

20

Item 3.  Defaults Upon Senior Securities.

20

Item 4.  Submission of Matters to a Vote of Security Holders.

20

Item 5.  Other Information.

20

Item 6.  Exhibits.

21

 

Signatures

24

 

 

1

 

 

 

**PART 1 – FINANCIAL INFORMATION**

 

**Item 1. Financial Statements**

 

**BEACON POWER CORPORATION AND SUBSIDIARY**

**(A Development Stage Company)**

**Consolidated Balance Sheets**

 

 

 

 

**March 31,**

 

**December 31,**

 

 

 

 

**2006 (unaudited)**

 

**2005**

**Assets**

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$       12,546,304 

 

$       13,890,162 

 

Accounts receivable, trade, net

 

358,822 

 

588,440 

 

Unbilled costs on contracts in progress

 

36,811 

 

437,759 

 

Prepaid expenses and other current assets

 

679,480 

 

777,385 

 

 

Total current assets

 

13,621,417 

 

15,693,746 

Property and equipment, net

 

191,067 

 

212,296 

Restricted cash

 

219,568 

 

219,568 

Total assets

 

$       14,032,052 

 

$       16,125,610 

**Liabilities and Stockholders' Equity**

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$            158,866 

 

$            137,290 

 

Accrued compensation and benefits

 

396,371 

 

151,318 

 

Other accrued expenses

 

877,391 

 

844,742 

 

Advance billings on contracts

 

148,331 

 

74,820 

 

Accrued contract loss

 

193,280 

 

548,614 

 

Restructuring reserve

 

621,954 

 

713,469 

 

 

Total current liabilities

 

2,396,193 

 

2,470,253 

 

 

 

 

 

 

 

Commitments (Note 5)

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

Preferred Stock, $.01 par value; 10,000,000 shares authorized

 

 

 

 

 

no shares issued or outstanding

 

-- 

 

-- 

 

Common stock, $.01 par value; 110,000,000 shares authorized;

 

 

 

 

 

58,700,036 and 58,700,036 shares issued and outstanding at

 

 

 

 

 

March 31, 2006 and December 31, 2005, respectively

 

587,000 

 

587,000 

 

Deferred stock compensation

 

(602,856)

 

(1,063,145)

 

Additional paid-in-capital

 

153,431,705 

 

153,089,842 

 

Deficit accumulated during the development stage

 

(141,067,151)

 

(138,245,501)

 

Treasury stock, 421,692 shares at cost

 

(712,839)

 

(712,839)

 

 

Total stockholders' equity

 

11,635,859 

 

13,655,357 

Total liabilities and stockholders' equity

 

$       14,032,052 

 

$       16,125,610 

See notes to unaudited consolidated financial statements.

 

 

- 1 -

 

 

 

**BEACON POWER CORPORATION AND SUBSIDIARY**

**(A Development Stage Company)**

**Consolidated Statements of Operations (Unaudited)**

 

 

 

 

 

 

 

 

 

Cumulative from

 

 

 

 

 

** **

 

** **

 

May 8, 1997

 

 

 

 

 

 

 

 

 

(date of inception)

 

 

 

 

 

Three months ended March 31,

 

through March 31,

 

 

 

 

 

2006

 

2005

 

2006

Revenue

 

$     288,595 

 

$     636,134 

 

$        2,363,136 

Cost of goods sold

 

244,925 

 

670,507 

 

3,840,453 

Gross profit

 

43,670 

 

(34,373)

 

(1,477,317)

Operating expenses:

 

 

 

 

 

 

 

Selling, general and administrative

 

1,929,532 

 

1,172,379 

 

38,590,641 

 

Research and development

 

1,061,445 

 

486,238 

 

57,428,158 

 

Loss on sales and contract commitments

 

-- 

 

547,707 

 

1,905,408 

 

Depreciation and amortization

 

21,229 

 

18,191 

 

4,242,226 

 

Restructuring charges

 

-- 

 

-- 

 

2,159,280 

 

Loss on impairment of assets

 

-- 

 

-- 

 

4,663,916 

 

 

 

Total operating expenses

 

3,012,206 

 

2,224,515 

 

108,989,629 

Loss from operations

 

(2,968,536)

 

(2,258,888)

 

(110,466,946)

Other income (expense):

 

 

 

 

 

 

Interest income

 

145,504 

 

14,888 

 

4,190,423 

Interest expense

 

-- 

 

-- 

 

(1,093,703)

Gain on sale of investment

 

-- 

 

-- 

 

3,562,582 

Other income (expense)

 

1,382 

 

(1,000)

 

(253,314)

 

Total other income (expense), net

 

146,886 

 

13,888 

 

6,405,988 

Net loss

 

(2,821,650)

 

(2,245,000)

 

(104,060,958)

Preferred stock dividends

 

-- 

 

-- 

 

(36,825,680)

Accretion of convertible preferred stock

 

-- 

 

-- 

 

(113,014)

Loss to common shareholders

 

$(2,821,650)

 

$(2,245,000)

 

$  (140,999,652)

Loss per share, basic and diluted

 

$          (0.05)

 

$          (0.05)

 

 

Weighted-average common shares outstanding

 

58,700,036

 

43,792,791 

 

 

See notes to unaudited consolidated financial statements.

 

 

- 2 -

 

 

 

**BEACON POWER CORPORATION AND SUBSIDIARY**

**(A Development Stage Company)**

**Consolidated Statements of Cash Flows (Unaudited)**

 

 

 

 

 

 

**Cumulative from**

 

 

 

 

 

**May 8, 1997**

 

 

 

 

 

**(date of inception)**

 

 

 

**Three months ended March 31,**

**through March 31,**

 

 

 

**2006**

**2005**

**2006**

Cash flows from operating activities:

 

 

 

 

Net loss

$       (2,821,650)

$       (2,245,000)

$     (104,060,957)

 

Adjustments to reconcile net loss to net cash used in

 

 

 

 

operating activities:

 

 

 

 

 

Depreciation and amortization

21,229 

18,191 

4,242,227 

 

 

Loss on sale of fixed assets

--  

--  

196,169 

 

 

Impairment of assets

--  

--  

4,532,027 

 

 

Restricted cash

--  

--  

(219,568)

 

 

(Expenses paid) restructuring charge

(91,515)

(85,886)

621,954 

 

 

Interest expense relating to issuance of warrants

--  

--  

371,000 

 

 

Non-cash charge for change in option terms

--  

--  

346,591 

 

 

Non-cash charge for settlement of lawsuit

--  

--  

303,160 

 

 

Amortization of deferred consulting expense, net

--  

--  

1,160,784 

 

 

Amortization of deferred stock compensation

460,289 

278,010 

3,096,865 

 

 

Options and warrants issued for consulting services

--  

--  

1,585,654 

 

 

Services and interest expense paid in preferred stock

--  

--  

11,485 

 

 

Gain on sale of investments

--  

--  

(3,562,582)

 

 

Stock-based compensation

341,863 

--  

341,863 

 

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

229,618 

51,210 

(358,822)

 

 

Inventory

--  

222,593 

--  

 

 

Unbilled costs under government contracts

400,948 

(416,705)

(36,811)

 

 

Prepaid expenses and other current assets

97,905 

217,738 

(779,140)

 

 

Accounts payable

21,576 

(204,242)

158,866 

 

 

Accrued compensation and benefits

245,053 

66,090 

396,371 

 

 

Advance billings on contracts

73,511 

--  

148,331 

 

 

Accrued interest

--  

--  

275,560 

 

 

Accrued loss on contract commitments

(355,334)

320,646 

193,280 

 

 

Other accrued expenses and current liabilities

32,649 

72,627 

886,061 

 

 

Net cash used in operating activities

(1,343,858)

(1,704,728)

(90,149,632)

Cash flows from investing activities:

 

 

 

 

Purchase of investments

--  

--  

(1,190,352)

 

Sale of investments

--  

--  

4,752,934 

 

Increase in other assets

--  

--  

(412,072)

 

Purchases of property and equipment

--  

(36,860)

(8,494,404)

 

Sale of property and equipment

--  

--  

198,597 

 

 

Net cash used in investing activities

--  

(36,860)

(5,145,297)

Cash flows from financing activities:

 

 

 

 

Initial public stock offering, net of expenses

--  

--  

49,341,537 

 

Private stock offering, net of expenses

--  

--  

17,108,477 

 

Payment of dividends

--  

--  

(1,159,373)

 

Shares issued under employee stock purchase plan

--  

--  

132,065 

 

Exercise of employee stock options

--  

5,833 

2,149,222 

 

Cash paid for financing costs

--  

(26,838)

--  

 

 

- 3 -

 

 

 

 

 

Issuance of preferred stock

--  

--  

32,868,028 

 

Repayment of subscription receivable

--  

--  

5,000,000 

 

Proceeds from capital leases

--  

--  

495,851 

 

Repayment of capital leases

--  

--  

(1,031,395)

 

Repurchase company stock

--  

--  

(613,179)

 

Proceeds from notes payable issued to investors

--  

--  

3,550,000 

 

 

Net cash provided by (used in) financing activities

--  

(21,005)

107,841,233 

(Decrease) increase in cash and cash equivalents

(1,343,858)

(1,762,593)

12,546,304 

Cash and cash equivalents, beginning of period

13,890,162 

5,097,188 

--  

Cash and cash equivalents, end of period

$       12,546,304 

$         3,334,595 

$         12,546,304 

Supplemental disclosure of cash  flow information:

 

 

 

 

Cash paid for interest

$                        -- 

$                        -- 

$              488,126 

 

Cash paid for taxes

$                        -- 

$                        -- 

$                 32,750 

 

Assets acquired through capital lease

$                        -- 

$                        -- 

$              535,445 

See notes to unaudited consolidated financial statements.

 

- 4 -

 

 

 

**BEACON POWER CORPORATION AND SUBSIDIARY**

**(A Development Stage Company)**

**Notes to Consolidated Financial Statements**

 

**Note 1.  Nature of Business and Operations**

 

*Nature of Business.*

 

Beacon Power Corporation (the "Company", "Beacon", “we”, “our”, or “us”) (a development stage company) was incorporated on May 8, 1997 as a wholly owned subsidiary of SatCon Technology Corporation.  Since our inception, we have been primarily engaged in the development of flywheel devices for storing and transmitting energy kinetically.  During 2000 we completed an initial public offering of our common stock and raised approximately $49.3 million net of offering expenses, and during 2005 we raised approximately $17 million in private equity.  Because we have not yet generated a significant amount of revenue from our principal operations, we are accounted for as a development stage company under Statement of Financial Accounting Standards No. 7.  

 

*Operations*

 

We have experienced net losses since our inception and, as of March 31, 2006, had an accumulated deficit of approximately $141 million.  We are focused on the development and commercialization of our Smart Energy Matrix flywheel system for frequency regulation and completion of our research and development contracts.  This ongoing research and development will require substantial additional outlays of capital.  

 

We do not expect to become profitable or cash flow positive until at least 2009 and must raise additional equity to execute our business plan and continue as a going concern.  Based on our planned cash usage rates we believe that we have adequate cash to fund operations into the first quarter of 2007.  We expect to raise capital to execute our business plan by issuing and selling additional common stock in an equity financing later this year.  

 

**Note 2.  Basis of Presentation and Summary of Significant Accounting Policies**

 

**Basis of Presentation**

 

The accompanying unaudited consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America except that certain information and footnote disclosure normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this Form 10-Q.  We suggest that these consolidated financial statements presented herein be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K/A, for the year ended December 31, 2005.  In our management’s opinion, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation, have been included in the accompanying unaudited financial statements.  Operating results for the three months ended March 31, 2006 arenot necessarily indicative of the results that may be expected for the full year ending December 31, 2006.

 

*Going Concern*

 

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  As shown in our consolidated financial statements, we have had minimal revenues, and incurred significant losses of approximately $141 million, since our inception including losses during the three months ending March 31, 2006 of $2.8 million.  We have approximately $12,546,000 of cash and cash equivalents on hand at March 31, 2006.  Since our operating cash requirements far exceed the cash generated from operations, we may be unable to continue as a going concern.  The consolidated financial statements contained herein do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should we be unable to continue as a going concern.

 

We recognize that our continuation as a going concern is dependent upon our ability to generate sufficient cash flow to allow us to satisfy our obligations on a timely basis.  The generation of sufficient cash flow is dependent, in the short term, on our ability to obtain adequate equity investments, and in the long term, on the successful expansion of our share of the market for our current products and the establishment of new markets for products under development.  We believe that the successful achievement of these initiatives should provide us with sufficient resources to meet our cash requirements.  In addition we are also considering a number of other strategic financing alternatives, and have incurred substantial costs in these efforts; however, no assurance can be made with respect to the success of these efforts or the viability of our company.

 

- 5 -

 

 

 

*Consolidation*

 

The accompanying consolidated financial statements include the accounts of Beacon Power Corporation and our subsidiary Beacon Power Securities Corporation.  Our other subsidiary, Beacon Acquisition Co. was inactive in 2005 and was dissolved in January 2006.  All significant inter-company accounts and transactions have been eliminated in consolidation.

 

*Loss Per Share – Basic and Diluted*

 

Basic loss per share has been computed using the weighted-average number of shares of common stock outstanding during each period.  Diluted loss per share was computed in the same manner.  Potentially dilutive securities have been excluded from the computation as their effect is antidilutive.

 

**Summary of Significant Accounting Policies**

 

*Use of Estimates.*

 

The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

 

*Stock-Based Compensation.*

 

During the first quarter of 2006, we adopted the provisions of and account for stock-based compensation in accordance with, the Financial Accounting Standards Board’s (“FASB”) Statement of Financial Accounting Standards No. 123—revised 2004 (“SFAS 123R”), “Share-Based Payment” which replaced Statement of Financial Accounting Standards No. 123 (“SFAS 123”), “Accounting for Stock-Based Compensation” and supersedes APB Opinion No. 25 (“APB 25”), “Accounting for Stock Issued to Employees.” Under the fair value recognition provisions of SFAS 123R, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense as it is earned over the requisite service period, which is the vesting period. To implement this standard, we elected the modified-prospectivetransition method, under which prior periods are not revised for comparative purposes. The valuation provisions of SFAS 123R apply to new grants and to grants that were outstanding as of the effective date and are subsequently modified. Estimated compensation expense for grants that were outstanding as of the effective date will be recognized over the remaining vesting period using the compensation cost estimated for the SFAS 123 pro forma disclosures.

 

The adoption of SFAS 123R had a material impact on our consolidated financial position, results of operations and cash flows. See Note 8 for further information regarding our stock-based compensation assumptions and expenses, including pro forma disclosures for prior periods as if we had recorded stock-based compensation expense.

 

*Recent Accounting Pronouncements*

 

In February 2006, the FASB issued Statement of Financial Accounting Standards No. 155 (“SFAS 155”), “Accounting for Certain Hybrid Financial Instruments” which amends Statement of Financial Accounting Standards No. 133 (“SFAS 133”), “Accounting for Derivative Instruments and Hedging Activities” and Statement of Financial Accounting Standards No. 140 (“SFAS 140”), “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.” SFAS 155 simplifies the accounting for certain derivatives embedded in other financial instruments by allowing them to be accounted for as a whole if the holder elects to account for the whole instrument on a fair value basis. SFAS 155 also clarifies and amends certain other provisions of SFAS 133 and SFAS 140. SFAS 155 is effective for all financial instruments acquired, issuedor subject to a remeasurement event occurring in fiscal years beginning after September 15, 2006. Earlier adoption is permitted, provided the Company has not yet issued financial statements, including for interim periods, for that fiscal year. We do not expect the adoption of SFAS 155 to have a material impact on our consolidated financial position, results of operations or cash flows.

 

In May 2005 the FASB issued Statement of Financial Accounting Standards No. 154 (“SFAS 154”), “Accounting Changes and Error Corrections,” which replaces Accounting Principles Board No. 20 (“APB 20”), “Accounting Changes,” and Statement of Financial Accounting Standards No. 3, “Reporting Accounting Changes in Interim Financial Statements.” SFAS 154 applies to all voluntary changes in accounting principle, and changes the requirements for accounting for and reporting of a change in accounting principle. SFAS 154 requires retrospective application to prior periods’ financial statements of a voluntary change in accounting principle unless it is impracticable. APB 20 previously required that most voluntary changes in accounting principle be 

 

- 6 -

 

 

recognized with a cumulative effect adjustment in net income of the period of the change. SFAS 154 is effective for accounting changes made in annual periods beginning after December 15, 2005.

 

Other than those noted above, there have been no significant additions to or changes in our accounting policies since December 31, 2005.  For a complete description of our accounting policies, see Note 2 to the Consolidated Financial Statements in our Annual Report on Form 10-K/A for the year ended December 31, 2005.

 

**Note 3.  Accounts Receivable**

 

Our trade accounts receivable include amounts due from customers and are reported net of a bad debt reserve as follows:

 

 

 

March 31,

 

December 31, 

 

 

2006

 

2005

Accounts receivable, trade

 

$        372,052 

 

$        601,669 

Reserve for uncollectible accounts

 

(13,230)

 

(13,230)

Accounts receivable, trade, net

 

$        358,822 

 

$        588,440 

 

Two of our research and development contracts contain holdback provisions that allow our customers to withhold 10% from each invoice payment. At both, March 31, 2006 and December 31, 2005 we had approximately $49,000 of holdbacks in our accounts receivable balance.  These holdbacks are payable once work has been satisfactorily completed and the final report has been received and approved. We believe these holdbacks will be collected upon completion of the contract, and therefore have not recorded any reserve against these amounts.

 

**Note 4.  Property and Equipment**

 

Details o

f our property and equipment follows:

 

 

 

Estimated

 

 

 

 

 

 

Useful

 

March 31,

 

December 31,

 

 

Lives

 

2006

 

2005

Machinery and equipment

5 years

 

$            570,424 

 

$            570,424 

Service vehicles

5 years

 

16,762 

 

16,762 

Furniture and fixtures

7 years

 

255,940 

 

255,940 

Office equipment

3 years

 

1,433,947 

 

1,433,947 

Leasehold improvements

Lease term

 

533,352 

 

533,352 

Equipment under capital lease obligations

Lease term

 

918,285 

 

918,285 

 

Total

 

 

$         3,728,710 

 

$         3,728,710 

Less accumulated depreciation and amortization

 

 

(3,537,643)

 

(3,516,414)

 

Property and equipment, net

 

 

$            191,067 

 

$            212,296 

 

 

**Note 5.  Commitments and Contingencies**

 

The following table summarizes our commitments at March 31, 2006:

 

 

 

Nine months ending December 31,

 

Year ending December 31,

 

 

 

 

Description of Commitment

 

2006

 

2007

 

Thereafter

 

Total

Operating leases

 

397,059 

 

397,059 

 

-- 

 

794,118 

Purchase obligations

 

1,030,000 

 

-- 

 

-- 

 

1,030,000

Total Commitments

 

1,427,059

 

397,059 

 

-- 

 

1,824,118

 

We lease office, light manufacturing and assembly space under an operating lease through September 30, 2007.  At March 31, 2006, we had provided the lessor with an irrevocable letter of credit securing our performance under this lease with a balance of $219,568 which is reduced annually during the lease term.  This letter of credit is secured by a cash deposit, which is included in restricted cash in the accompanying consolidated balance sheets.

 

- 7 -

 

 

 

At March 31, 2006 we had firm, non-cancelable purchase commitments with our suppliers to acquire components for the development of the Smart Energy Matrix and to satisfy contractual obligations for our research and development programs in the amount of approximately $1,030,000. 

 

*Legal Proceedings.*

 

We may be subject to various legal proceedings, many involving routine litigation incidental to our business.  The outcome of any legal proceeding is not within our complete control, is often difficult to predict and is resolved over very long periods of time.  Estimating probable losses associated with any legal proceedings or other loss contingencies is very complex and requires the analysis of many factors including assumptions about potential actions by third parties.  A loss contingency is recorded as a liability in the consolidated financial statements when it is both, (i) probable or known that a liability has been incurred and (ii) the amount of the loss is reasonably estimable.  If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the minimum amount of the range is recorded as a liability.  If a loss contingency is not probable ornot reasonably estimable, a liability is not recorded in the consolidated financial statements. 

 

**Note 6.  Restructuring and Asset Impairment Charges.**

 

We periodically evaluate all of our property and equipment as required by Statement of Financial Accounting Standards No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets.” In 2002, we incurred a restructuring and impairment charge of $6.5 million of which $4.3 million represents impaired capital equipment and leasehold improvements, $.3 million relates to severance costs and $1.9 million relates to a reserve against future lease payments and related facility costs.  The reserve against future lease payments is classified as “Restructuring Reserve” in the current liabilities section of the balance sheet. 

 

At March 31, 2006, the restructuring reserves are as follows:

 

 

 

Three months ended March 31,

 

 

2006

 

2005

Beginning balance

 

$        713,469 

 

$    1,062,644 

Charges for the period

 

--   

 

--   

Payments

 

(91,515)

 

(85,886)

Ending balance

 

$        621,954 

 

$        976,758 

 

 

**Note 7.  Stock Warrants**

 

The following schedule shows warrants outstanding as of March 31, 2006:

 

**Description**

 

**Grant Date**

 

**Expiration Date**

 

**Strike Price**

 

**Issued and Outstanding**

Class F extended

 

5/23/2000

 

5/23/2007

 

$        2.25 

 

1,333,333 

April, 2005 Financing

 

5/24/2005

 

5/24/2010

 

$      1.008 

 

800,000 

November, 2005 Financing

 

11/8/2005

 

11/8/2010

 

$        2.21 

 

2,960,527 

**Total warrants outstanding**

 

** **

 

** **

 

**5,093,860**

 

We have outstanding three series of warrants to purchase Beacon common stock. The exercise price and the number of shares of our common stock to be issued upon exercise of the warrants will be adjusted under certain circumstances, including:

•

subdivisions, stock dividends or combinations of our common stock;

•

reclassifications, exchanges, substitutions, or in-kind distributions that result in a change in the number and/or class of the securities issuable upon exercise of the warrants; 

•

reorganizations, mergers and similar transactions; and

•

the issuance of additional shares of our common stock or securities convertible into our common stock at a price per share less than the exercise price in effect immediately prior to the issuance of the additional securities. 

 

Holders of the warrants are not entitled to receive dividends, vote, receive notice of any meetings of stockholders or otherwise have any right as stockholders. 

 

*Class F Preferred Stock Financing Warrant*

 

- 8 -

 

 

 

The warrant, originally issued in connection with our Class F Preferred Stock financing, is exercisable for 1,333,333 shares of our common stock at an exercise price of $2.25 per share.  In connection with the Investment Agreement among us, Perseus Capital, L.L.C. and Perseus 2000 Expansion, L.L.C. dated April 22, 2005, we extended, by two years, the term of the warrant.  The holder of this warrant, Perseus Capital, L.L.C., may exercise the warrant at any time prior to its expiration on May 23, 2007. 

 

*April 2005 Financing Warrant*

 

In connection with the investment by Perseus 2000 Expansion, L.L.C., we issued a warrant for 800,000 shares of our common stock, at an exercise price of $1.008.

 

*November 2005 Financing Warrants*

 

As part of a financing transaction, we issued warrants to purchase an aggregate of 2,960,527 shares of our common stock to ten “accredited investors.”  Each warrant is exercisable for a period of five years and the per share exercise price for the warrant shares is $2.21.

 

**Note 8.  Stock Based Compensation**

 

**Description of Plans**

 

*Stock Option Plan*

 

Our Third Amended Restated 1998 Stock Incentive Plan provides for the granting of stock options to purchase up to 23,000,000 shares of our common stock.  Options may be granted to our employees, officers, directors and consultants.  Under the terms of the option plan, incentive stock options ("ISOs") are to be granted at fair market value of our common stock at the date of grant, and nonqualified stock options (“NSOs”) are to be granted at a price determined by the Board of Directors.  ISOs and NSOs generally vest ratably over a period of one to three years from the grant date and are granted for terms of up to 10 years.  Our stock option program is a long-term retention program that is intended to attract, retain and provide incentives for talented employees, officers and directors, and to align stockholder and employee interests.  We consider our option program critical to ouroperation and productivity; essentially all of our employees participate.  At March 31, 2006 we had 12,632,907 shares reserved for issuance under this plan.  

 

*Employee Stock Purchase Plan*

 

Our Employee Stock Purchase Plan (the “ESPP”) allows substantially all of our employees to participate in the plan and to purchase shares of our common stock at a discount through payroll deductions.  Participating employees may purchase our common stock at a purchase price equal to 85% of the lower of the fair market value of the common stock at the beginning of an offering period or on the exercise date.  Employees may designate up to 15% of their base compensation for the purchase of common stock under this plan.  The ESPP provides for the purchase of up to 2,000,000 shares of our common stock.  At March 31, 2006, we had 1,877,853 shares reserved for issuance under this plan.  

 

*Restricted Stock Unit Plan*

 

Our restricted stock unit (RSU) plan was established under our Third Amended Restated 1998 Stock Incentive Plan to align and motivate our employees to (i) achieve key product development milestones and thus create stockholder value, (ii) retain key employees by providing bonuses to our employees and (iii) conserve cash by paying out bonuses in the form of deferred stock units in lieu of cash.  Under this plan, participants, based on performance, receive RSUs that are automatically converted into shares of common stock in four quarterly tranches in the fiscal year following the year of performance once certain quarterly vesting dates are met.

 

 

- 9 -

 

 

 

**Stock Option Plan Schedules**

 

Stock option activity for the first three months of 2006 is as follows:

 

 

 

 

Weighted-

Weighted-

 

 

 

Average

Average

 

 

Number of

Exercise

Fair

 

 

Shares

Price

Value

Outstanding, December 31, 2005

5,581,803 

1.18 

 

 

Granted

377,500 

1.74 

$      1.17 

 

Exercised

-- 

-- 

 

 

Canceled, forfeited or expired

-- 

-- 

 

Outstanding, March 31, 2006

5,959,303 

1.21 

 

 

 

The following table summarizes information about stock options outstanding at March 31, 2006:

 

 

 

 

 

Weighted-

 

 

 

Vested

 

 

 

 

Average

 

Weighted-

 

 

 

Weighted-

 

 

Number

 

Remaining

 

Average

 

 

 

Average

 

 

of Options

 

Contractual

 

Exercise

 

Number

 

Exercise

Exercise Price

 

Outstanding

 

Life (Years)

 

Price

 

of Options

 

Price

$.255-$.74

 

3,339,886

 

8.34

 

$0.70 

 

3,339,886

 

$0.70 

$.87 - $1.24

 

1,284,896

 

5.60

 

$0.92 

 

1,284,896

 

$0.92 

$1.54-$2.19

 

877,271

 

8.50

 

$1.98 

 

313,305

 

$2.12 

$2.50-$3.10

 

130,000

 

4.17

 

$2.64 

 

130,000

 

$2.64 

$4.10-$5.27

 

222,250

 

4.92

 

$4.40 

 

222,250

 

$4.40 

$6.00 - $9.31

 

105,000

 

4.56

 

$6.40 

 

105,000

 

$6.40 

 

 

**Stock Compensation**

 

Beginning on January 1, 2006, we adopted SFAS 123R. See Note 2 for a description of our adoption of SFAS 123R. We currently use the Black-Scholes option pricing model to determine the fair value of stock options and employee stock purchase plan shares. The determination of the fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables include our stock price volatility, expected life of the option, risk-free interest rate and expected dividends, if any.

 

We estimate the volatility of our common stock by using historical volatility.  We estimate the expected term and use a risk-free interest rate based on U.S. Treasury issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in the foreseeable future and therefore use an expected dividend yield of zero in the option valuation model. We are required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods. All stock-based payment awards are amortized as they are earned over the requisite service periods of the awards, which are generally the vesting periods.

 

Prior to the adoption of SFAS 123R, we recognized the estimated compensation cost of restricted stock units over the vesting term. The estimated compensation cost is based on the fair value of our common stock using the closing stock price on the last day of the fiscal year in which the compensation is earned. We will continue to recognize the compensation cost, net of estimated forfeitures, over the vesting term.

 

 

- 10 -

 

 

 

The assumptions used to value stock option grants for the quarter ended March 31, 2006 are as follows: 

 

 

 

Three months ended March 31,

 

 

2006

Risk-free interest rate

 

4.68% - 4.77%

Expected life of option

 

3 years

Expected dividend payment rate, as a percentage of the stock price on the date of grant

 

0%

Assumed volatility

 

107% - 108%

Expected forfeitures

 

10%

Total stock-based compensation expense as a result of FAS 123R recognized on our consolidated statement of operations for the quarter ended March 31, 2006 is as follows: 

 

 

 

 

Three months ended March 31,

 

 

2006

Selling, general and administrative

 

265,884 

Research and development

 

75,979 

Total

 

341,863 

 

 

For comparison purposes, the following table sets forth the pro forma amounts of net income and net income per share, for the three months ended March 31, 2005, that would have resulted if we had accounted for our employee stock plans under the fair value recognition provisions of SFAS 123R at that time:

 

 

 

Three months ended March 31,

 

 

2005

Net loss to common shareholders as reported

 

$          (2,245,000)

Pro forma compensation expense

 

82,686 

Net loss--pro forma

 

$          (2,327,686)

Loss per share--as reported

 

$                    (0.05)

Loss per share--pro forma

 

$                    (0.05)

 

As of March 31, 2006, there was approximately $456,000 of unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested stock-based payments granted to our employees and directors. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures and recognized over the remaining vesting periods of the stock option grants. Additionally, as of March 31, 2006, there was $603,000 of unamortized deferred compensation, related to our restricted stock unit program, which will be recognized over the remainder of 2006.

 

 

- 11 -

 

 

 

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations**

 

**Note Regarding Forward Looking Statements:**

 

This Quarterly Report on Form 10-Q contains forward-looking statements concerning, among other things, our expected future revenues, operations and expenditures and estimates of the potential markets for our products and services.  Such statements made may fall within the meaning of the Private Securities Litigation Reform Act of 1995, as amended.  All such forward-looking statements are necessarily only estimates of future results and the actual results we achieve may differ materially from these projections due to a number of factors as discussed in the section entitled "Risk Factors" of this Form 10-Q.

 

**Critical Accounting Policies and Estimates**

 

The preparation of financial statements requires management to make estimates and judgments that may significantly affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. On an ongoing basis, management evaluates our estimates and assumptions including, but not limited to, those related to revenue recognition, asset impairments, inventory valuation, warranty reserves and other assets and liabilities.  Management bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.

 

*Revenue Recognition*

 

Although we have shipped products and recorded contract revenues, our operations have not yet reached a level that would qualify us to emerge from the development stage.  Therefore we continue to be accounted for as a development stage company under Statement of Financial Accounting Standards No. 7 “Accounting and Reporting by Development Stage Enterprises.”  

 

We recognize revenues in accordance with accounting principles generally accepted in the United States of America.  Generally, revenue is recognized on transfer of title, typically when products are shipped and all related costs are estimable.  For sales to distributors, we make an adjustment to defer revenue until they are subsequently sold by distributors to their customers.  

 

*Research and Development Contract Revenue Recognized on the Percentage-of-Completion Method*

 

We recognize contract revenues using the percentage-of-completion method, based primarily on contract costs incurred to date compared with total estimated contract costs.  Changes to total estimated contract costs or losses, if any, are recognized in the period in which they are determined.  Revenues recognized in excess of amounts billed are classified as current assets, and included in “Unbilled costs on contracts in process” in our balance sheets.  Amounts billed to clients in excess of revenues recognized to date are classified as current liabilities under “Advance billings on contracts.”  Changes in project performance and conditions, estimated profitability, and final contract settlements may result in future revisions to construction contract costs and revenue. 

 

All of our research and development contracts are subject to cost review by the respective government agencies. Our reported results from these contracts could change adversely as a result of these reviews.

 

*Loss on Contract Commitments*

 

Each quarter, we perform an evaluation of expected costs to complete our in-progress contracts that we account for using the percentage-of-completion method.  In the event that the total expected costs to complete a contract exceed the expected total contract revenue, we immediately record a loss on the contract to the extent that the expected loss exceeds the expected revenue from the contract.  

 

*Warranty Reserves*

 

Our warranties require us to repair or replace defective products returned to us during the applicable warranty period at no cost to the customer. We record an estimate for warranty-related costs based on actual historical return rates, anticipated return rates, and repair costs at the time of sale. A significant increase in product return rates, or a significant increase in the costs to repair products, could have a material adverse impact on future operating results for the period or periods in which such returns or additional costs materialize and thereafter.

 

 

- 12 -

 

 

 

*Income Taxes*

 

Deferred tax assets and liabilities are determined based on differences between the financial reporting and income tax bases of assets and liabilities as well as net operating loss and tax credit carryforwards and are measured using the enacted tax rates and laws that will be in effect when the differences reverse.  Deferred tax assets are reduced by a 100% valuation allowance to reflect the uncertainty associated with their ultimate realization.

 

Significant management judgment is required in determining the provision for income taxes, the deferred tax assets and liabilities and any valuation allowance recorded against deferred tax assets.  The valuation allowance is based on our estimates of taxable income and the period over which our deferred tax assets will be recoverable.  In the event that actual results differ from these estimates or we adjust these estimates in future periods we may need to establish an additional valuation allowance or reduce our current valuation allowance which could materially impact our tax provision.

 

*Long-Lived Assets*

 

In accordance with Statement of Financial Accounting Standards No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets”, long-lived assets we held and used are reviewed to determine whether any events or changes in circumstances indicate that the carrying value of the asset may not be recoverable.  The conditions to be considered include whether or not the asset is in service, has become obsolete, or whether external market circumstances indicate that the carrying amount may not be recoverable.  When appropriate we recognize a loss for the difference between the estimated fair value of the asset and the carrying amount.  The fair value of the asset is measured using either available market prices or estimated discounted cash flows.  

 

**Overview**

 

Our initial product strategy was to develop high energy, composite flywheels for back-up powering of telecommunica-tions applications.  With the collapse of the telecommunications market, which began in 2001, we recognized that our Smart Energy flywheel products as alternative backup solutions to the telecommunications industry were not a means to produce meaningful revenues.  With that recognition, we initiated a series of cost cutting measures throughout 2002 and 2003.  The focus of these efforts was to reduce cash usage while preserving our intellectual properties and maintaining the integrity of our public company requirements while evaluating all potential product markets for our technologies and considering acquisitions or mergers that could lead to increased shareholder value.  We have:

 

(i)

identified promising applications for our Smart Energy Matrix design in the electric utility power grid marketplace.  In 2005 we were awarded development contracts by CEC and NYSERDA to demonstrate the viability of our flywheel technologies for frequency regulation by grid operators. The demonstrations are one-tenth-power prototype of the Smart Energy Matrix.  Both units are installed and operational, validating the capability of our systems ability to provide frequency regulation services to the electricity grid;

(ii)

pursued additional development and design contracts for a variety of flywheel-related applications for federal agencies.  We have been successful in obtaining contracts and are continuing our efforts to obtain additional research and development funding; and

(iii)

introduced the Smart Power M5 inverter system into the renewable energy market in December 2003.  We have not been able to gain market share with this product and have slowed development of further inverter products but are continuing to offer the product for sale through a distribution network.  Although we are continuing to support the product, we do not believe that inverters will be a significant portion of our business going forward.

 

We must raise additional funds to execute our business plan.  Based on our rate of expenditure of cash and the additional expenditures expected to support our business plan, we estimate that we have sufficient cash to fund operations through approximately the first quarter of 2007. We need to obtain additional investments during 2006 to fund:

 

**•**

ongoing research and development of the 25kWh flywheel and the Smart Energy Matrix;

**•**

ramp up of our manufacturing and assembly capacity;

 
**•**

continuing as a going concern;

 
**•**

working capital requirements; and

 
**•**

developing new business.

 
 

We are continuing to develop the 25kWh flywheel system, which is the core component of the Smart Energy Matrix.  In order to complete development of the Smart Energy Matrix and field a full-scale one megawatt prototype we will need to raise $20 to $30 million of additional working capital.  

 

 

- 13 -

 

 

 

As part of our new business development, we will continue to evaluate possible acquisitions of enterprises or technologies that we would consider synergistic from a market, technology or product perspective.  

 

From inception through March 31, 2006, we have incurred losses of approximately $141 million. We expect to continue to incur losses as we expand our product development and begin to increase our manufacturing and assembly capacity. 

 

We recognized an asset impairment charge in 2003 and restructuring and asset impairment charges in 2002.  As required by Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” we periodically evaluate all of our property and equipment in light of facts and circumstances and the outlook for future cash flows.  As a result of our ongoing evaluations, in 2003 we recorded a non-cash charge of approximately $0.4 million representing the impairment of capitalized costs of internally developed intellectual property including various patents and patents pending relating to our flywheel technology.  In 2002 we took a non-cash charge of $6.5 million of which $4.3 million represented impaired capital equipment and leasehold improvements, $1.9 million related to a reserve against future lease payments and related facility costsand $0.3 million relating to severance costs.  These charges related to a substantial portion of our long-term assets being idled, including machinery and equipment, tooling, office furniture and fixtures and leasehold improvements.  The portion of the reserve that relates to future lease payments is classified as “Restructuring reserve” in the current liabilities section of the balance sheet.

 

*Revenues*

 

We have been awarded fixed price research and development contracts from government agencies and are pursuing similar contracts from other government agencies.  We have determined that we will recognize revenues using the percentage of completion method for such contracts.  We are continuing to evaluate markets for our flywheel systems but we have not recognized revenues from these products.  We have placed development prototype flywheels with potential customers and shipped pre-production units.  These flywheel products were provided to potential customers without charge or on a demonstration basis to allow us access to field test information and to demonstrate the application of our technologies.  We sell our Smart Power M5 inverter system in the solar renewable energy market through domestic distributors who in turn sell our products to installers who then make sales to residentialhomeowners or commercial customers.  We will recognize revenues on our inverter products when they are sold by our distributors to their customers.  Although we are continuing to support our inverter product, we do not believe that inverters will be a significant portion of our business going forward and we are uncertain as to when or at what price we will be able to sell the reminder of our inventories. 

 

*Cost of Goods Sold*

 

Cost of goods sold on fixed price research and development contracts are predominantly being recorded on the percentage of completion method and consist of direct labor and material, subcontracting and associated overhead costs. 

 

In 2004, we established a reserve for all of our inverter product inventory as a result of lower than anticipated customer demand and uncertainty of our ability to sell those inventories.  In 2005 we continued to have modest sales of our inverter products.  The costs related to these sales are not fully reflected in COGS as a result of the inventory being reserved in a prior year.  Therefore our cost of goods sold does not accurately reflect the costs associated with these revenues.

 

*Selling, General and Administrative Expenses*

 

Our sales and marketing expenses consist primarily of compensation and benefits for sales and marketing personnel and related business development expenses.  In 2006 we added a director of business development to investigate additional applications for our technologies.  We expect sales and marketing expenses to continue to increase as we expand efforts to define new markets for our products.  We continue to rely on our engineering personnel to provide technical specifications and product overviews to our potential customer base.  General and administrative expenses consist primarily of compensation and benefits related to our corporate staff, professional fees, insurance and travel.  In 2005 we incurred significant non-recurring professional expenses relating to the failed attempt to acquire NxtPhase T&D Corporation and our fundraising efforts.  We expect our selling, general andadministrative expenses to increase in 2006 over 2005 due primarily to the implementation and reporting expenses associated with compliance with Section 404 of the Sarbanes-Oxley Act of 2002, fundraising activities, marketing and business development expenses associated with flywheel products and compensation costs associated with equity based compensation.

 

*Research and Development*

 

Our cost of research and development consists primarily of the cost of compensation and benefits for research and development, and support staff, as well as materials and supplies used in the engineering design and development process.  These costs are expected to increase in 2006 as compared to 2005 as we accelerate the development of the 25kWh flywheel for frequency regulation applications and begin to record compensation costs associated with equity based compensation.  

 

- 14 -

 

 

 

*Loss on Contract Commitments*

 

We will establish reserves for anticipated losses on contract commitments if, based on cost estimates to complete the commitment, we determine that a loss will be incurred.  We recorded a $1.5 million charge during 2005 for anticipated losses on our research and development contracts.  We did not accrue such losses during 2004.  We will most likely recognize probable losses on contract commitments early in a product’s introduction prior to being able to realize expected decreases in cost per unit through engineering design changes, operating efficiencies, and volume purchasing discounts.  On government contracts, we will, on a quarterly basis, evaluate our estimated costs to complete and establish reserves when appropriate.

 

*Restructuring and asset impairment charges*

 

We did not recognize any asset impairment charges in 2005 or 2004. 

 

*Depreciation and Amortization*

 

Our depreciation and amortization is primarily related to depreciation on capital expenditures and the amortization of lease and leasehold costs related to our facilities.  We have intellectual property in the form of patents on our flywheel vacuum system, our heat pipe cooling systems, DC output paralleling, metal hub, low-loss motor, co-mingled rims and earthquake-tolerant bearings on our flywheel products, and anti-islanding software, drawings, source code, and production know-how on our Smart Power M5 inverter system, and expect to obtain other patents during 2006 and beyond.  These costs were being amortized during 2004, but we recorded impairment charges to write down these assets to zero on the balance sheet at December 31, 2004.  These impairment charges were made due to the uncertainty of realizing any future value from this property mainly due the lack of substantial revenues to date.

 

*Interest and Other Income/Expense, net*

 

Our non-operating income and expenses are primarily attributable to realized gains on the sale of our available-for-sale securities and a warrant, a write-back resulting from loan payments on a reserved loan to a former officer of the Company, a cash settlement relating to our failed attempt to acquire NxtPhase T&D Corporation, interest income resulting from cash on hand, accrued dividends receivable and the 7% conversion premium from the conversion of our holdings of Series A Preferred Stock of Evergreen Solar, Inc., partially offset by interest expense associated with its capital leases.  

 

 

- 15 -

 

 

 

**Results of Operations**

 

**Comparison of Year ended March 31, 2006 and 2005**

 

Three months ended March 31,

 

2006

2005

$ Change

% Change

 

(in thousands)

Revenues

$      289 

$    636 

$   (347)

55%

Cost of goods sold

245 

671 

(426)

63%

Gross margin

44 

(35)

79 

226%

Selling, general and administrative

1,930 

1,172 

758 

65%

Research and development

1,061 

486 

575 

118%

Loss on sales and contract commitments

-- 

548 

(548)

100%

Depreciation and amortization

21 

18 

3 

17%

Interest and other income, net

147 

14 

133 

950%

Net loss

(2,822)

(2,245)

(577)

26%

 

*Revenue*

 

In the first quarter of 2006 we recorded revenue from flywheel related research and development contracts calculated using the percentage of completion method of approximately $244,000 and recorded $45,000 from the sale of Smart Power M5 inverter systems and related products.  In the first quarter of 2005 we recorded research and development contract revenue of approximately $620,000 and approximately $16,000 from the sale of our Smart Power M5 inverter systems and related products.  Contract revenue was lower in 2006 compared to 2005 by approximately $376,000 or 61% primarily the result of the completion of the majority of the milestones on our CEC and NYSERDA contracts in 2005 offset by higher inverter revenues of approximately $29,000.

 

*Cost of Goods Sold*

 

Cost of goods sold in the first quarter of 2006 includes costs incurred in performance of our research and development contracts calculated using the percentage of completion method in the amount of approximately $243,000 and the cost of materials, labor, overheads and warranty accruals for inverter products sold in the amount of approximately $2,000.  In 2005, cost of goods sold included costs for our flywheel development contracts in the amount of approximately $617,000, and materials, labor and warranty accruals for shipments of our Smart Power M5 inverter product sold in the quarter of approximately $6,000.  

 

*Selling, General and Administrative Expense*

 

** **

 

**Amount**

 

 

(in thousands) 

Three months ended March 31, 2005

 

$             1,172 

Increases:

 

 

Merit increases, new hires, bonus accrual

 

284 

Stock compensation

 

266 

Legal & audit

 

74 

Public company expenses (including SOX 404)

 

73 

Other

 

33 

Office equipment upgrades

 

28 

Three months ended March 31, 2006

 

$             1,930 

 

The increase in the quarter ended March 31, 2006 compared to the quarter ended March 31, 2005 of approximately $758,000 or 65% was primarily the result of additional employee costs of $284,000, expensing stock compensation due to the implementation of FAS 123R of approximately $266,000, higher legal and audit expenses of $74,000, additional public company expense of $73,000 primarily relating to our preparations for the requirements of Section 404 of the Sarbanes Oxley Act of 2002, office equipment upgrades of approximately $28,000 and other various items of $33,000.  We expect our selling, general and administrative expenses to be somewhat higher in the remainder of 2006 than over the same period in 2005 due primarily to stock option expensing, additional costs expected in the implementation and reporting expenses associated with compliance with Section 

 

- 16 -

 

 

404 of the Sarbanes-Oxley Act of 2002, fundraising activities and increased marketing and business development expenses associated with flywheel products. 

 

*Research and Development Expense*

 

** **

 

**Amount**

 

 

(in thousands) 

Three months ended March 31, 2005

 

$                486 

Decreases:

 

 

Engineering and manufacturing overheads applied

 

(144)

Increases:

 

 

Expense materials

 

221 

Merit increases, new hires, bonus accrual

 

206 

Consultants

 

90 

Stock compensation

 

76 

Research software

 

54 

Facility costs

 

47 

Recruiting

 

25 

Three months ended March 31, 2006

 

$             1,061 

 

The increase in the quarter ended March 31, 2006 compared to the quarter ended March 31, 2005 of approximately $575,000, or 118%, is primarily due to increased expenses for development materials of approximately $221,000, additional employee costs of $206,000, increased usage of consultants of $90,000, FAS123R stock compensation expense of approximately $76,000, increased costs for development software of $54,000, higher facility costs of $47,000 and higher recruiting charges of $25,000, offset by higher allocations to our research and development contracts.  We expect the cost of research and development for the remainder of 2006 to be significantly higher than in the same period during 2005 due to increased headcount and development material required for the 25kWh flywheel development and development activities on the Smart Energy Matrix.

 

*Loss on Contract Commitments*

 

We recorded contract commitment losses in the first quarter of 2005 at the time we signed our CEC and NYSERDA research and development contracts for expected cost overruns related to material, labor and overheads.   These costs were originally planned for us to provide as cost share under these contracts.  No such losses were recorded in the first quarter of 2006.

 

*Depreciation and Amortization*

 

The increase from 2005 to 2006 of approximately $3,000, or 17%, is primarily attributable to depreciation on new assets acquired during the latter half of 2005 partially offset by continuing reductions in the depreciable base of our existing assets.  We expect depreciation in the remainder of 2006 will be higher than 2005 due to required upgrades to our office equipment and other capital expenditures relating to production capability for the Smart Energy Matrix.

 

*Interest and Other Income/ (Expense), net*

 

The increase from 2005 to 2006 of approximately $133,000, or 950%, is primarily attributable to increases in interest income due to higher cash balances than during the same period in 2005.  

 

*Net Loss*

 

As a result of the changes discussed above, the net loss for the first quarter of 2006 was approximately $2,822,000 which compares to a net loss in 2005 of approximately $2,245,000, an increase in net loss of approximately $577,000 or 26%.

 

 

 

- 17 -

 

 

 

**Liquidity and Capital Resources**

 

 

 

 

Three months ended March 31,

 

 

 

2006

 

2005

 

 

 

(in thousands)

Cash and cash equivalents

 

$          12,546 

 

$            3,335 

Working capital

 

11,225 

 

2,207 

Cash provided by (used in)

 

 

 

 

 

Operating activities

 

(1,344)

 

(1,705)

 

Investing activities

 

--   

 

(37)

 

Financing activities

 

--   

 

(21)

Net decrease in cash and cash equivalents

 

$          (1,344)

 

$          (1,763)

Current ratio

 

5.7 

 

2.0 

 

Our cash requirements depend on many factors, including but not limited to, research and development activities, continued efforts to commercialize our products, facilities costs, and general and administrative expenses.  Since we are still in the development stage and have not yet begun our expected principal operations of providing frequency regulation services to the electricity grid, we do not generate enough cash from operations to satisfy our working capital requirements.  We expect to make significant expenditures to fund our operations, develop technologies and explore opportunities to find and develop additional markets to sell our products.  Over the last three years we have taken significant actions to reduce our cash expenditures for product development, infrastructure and production readiness by significantly reducing headcount, development spending and capital expenditures.  Wehave focused our activity on market analysis in terms of size of markets, competitive aspects and advantages that our products could provide.  We expect to use more cash resources during 2006 as we continue to work on our government research and development contracts and mobilize our engineering team to develop the 25kWh flywheel and the Smart Energy Matrix.  

 

We must raise additional equity to execute our business plan.  Based on our rate of expenditure of cash and the additional expenditures expected to support our business plan we have sufficient cash to fund operations through approximately the first quarter of 2007. We need to obtain additional investments during 2006 to fund:

 

**•**

ongoing research and development of the 25kWh flywheel and the Smart Energy Matrix;

**•**

ramp up of our manufacturing and assembly capacity;

 
**•**

continuing as a going concern;

 
**•**

working capital requirements; and

 
**•**

developing new business.

 
 

We are continuing to develop the 25kWh flywheel system, which is the core component of the Smart Energy Matrix.  In order to complete development of the Smart Energy Matrix and field a full-scale one megawatt prototype, we will need to raise $20 to $30 million of additional working capital.  

 

**Operating Activities**

 

Net cash used in operating activities was approximately ($1,344,000) and approximately ($1,705,000) for the three months ended March 31, 2006 and 2005, respectively.  The primary component to the negative cash flow from operations is from net losses.  For 2006, we had a net loss of approximately ($2,822,000).  Other items affecting cash flow included facility related cash payments charged against restructuring reserves of approximately ($92,000) offset by non-cash stock compensation of approximately $802,000, and depreciation and amortization of approximately $21,000.  Changes in operating assets and liabilities generated approximately $746,000 and approximately $330,000 of cash during 2006 and 2005, respectively.  

 

**Investing Activities**

 

Net cash used in investing activities was $0 and approximately ($37,000) for the three months ending March 31, 2006 and 2005, respectively.  The principal use of cash during 2005 was from the purchase of property and equipment of approximately ($37,000).  

 

 

- 18 -

 

 

 

**Financing Activities**

 

Net cash generated/(used) by financing activities was $0 and approximately ($21,000) for the first three months of 2006 and 2005, respectively.  For 2005 the primary use of cash was from prepaid financing costs related to our financing activities of approximately ($27,000) offset by company proceeds from the exercise of employee stock options of approximately $6,000.  

 

As part of our new business development, we may evaluate possible acquisitions of enterprises or technologies that we consider synergistic from a market, technology or product perspective. We may make investments in companies for strategic business reasons.  Because our primary motivation in making these investments may not be to realize a profit on the investment itself, but rather to expand our business prospects, these investments may lack any financial return to the Company and may result in a loss of principal and may lack liquidity. 

 

Inasmuch as we are not expecting to become cash flow positive until at least 2009, our ability to continue as a going concern will depend on our ability to raise additional capital.  We may not be able to raise this capital at all, or if it we are able to do so, it may be on terms that are adverse to existing shareholders.  We believe that debt financing will not be available to us to meet our cash requirements for 2006 or 2007. 

 

**Inflation**

 

Our operations have not been materially affected by inflation.

 

**Purchases of Equity Securities by the Issuer and Affiliated Purchasers**

 

None

 

**Item 3.  Quantitative and Qualitative Disclosure About Market Risk**

 

Our cash equivalents and investments, all of which have maturities of less than three months, may expose our assets to interest rate risk but not to market risk of principal.  At March 31, 2006, we had approximately $160,000 of cash equivalents that were held in non-interest bearing accounts.  Also at March 31, 2006, we had approximately $433,000 of cash equivalents that were held in interest bearing checking accounts, $7,000,000 invested in short-term highly-rated bonds and approximately $4,953,000 invested in interest-bearing money market accounts at high-quality financial institutions.  Our exposure to market risk through financial instruments is not material.

 

**Item 4.  Controls and Procedures**

 

Our management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Quarterly Report on Form 10-Q.  Based on that evaluation, the chief executive officer and chief financial officer have concluded that our disclosure controls and procedures are effective in enabling us to record, process, summarize and report information required to be included in our periodic SEC filings within the required time period.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated andcommunicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2006, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

 

In addition, our management, with the participation of our chief executive officer and chief financial officer, has evaluated whether any change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) occurred during the period covered by this Quarterly Report on Form 10-Q.  Based on that evaluation, the chief executive officer and chief financial officer have concluded that there has been no change in our internal control over financial reporting during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 

 

 

- 19 -

 

 

 

**Part II – OTHER INFORMATION**

 

**Item 1.  Legal Proceedings**

 

None

 

**Item 1A.  Risk Factors**

 

There have not been any material changes during the quarter ended March 31, 2006 to the risk factors set forth in Part I, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2005 filed with the SEC on March 30, 2006.

 

**Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds**

 

None

 

**Item 3.  Defaults Upon Senior Securities**

 

None.

 

**Item 4.  Submission of Matters to a Vote of Security Holders**

 

None.

 

**Item 5.  Other Information**

 

On May 8, 2006, Beacon entered into employment agreements, long-term compensation arrangements and performance-based long-term compensation arrangements with the following three executive officers:  F. William Capp, President and Chief Executive Officer, James M. Spiezio, Vice President and Chief Financial Officer, and Matthew L. Lazarewicz, Vice President and Chief Technical Officer.  

 

The full text of these agreements are attached as exhibits to this Quarterly Report on Form 10-Q.  

 

- 20 -

 

 

 

**Item 6.  Exhibits**

 

**Exhibit**

** **

** **

**Number**

**Ref******

**Description of Document******

 

 

 

3.1

(1)

Sixth Amended and Restated Certificate of Incorporation.

 

 

 

3.2

(1)

Amended and Restated Bylaws.

 

 

 

3.3

(2)

Certificate of Designation of Series A Junior Participating Preferred Stock, filed with the Secretary of State of Delaware on October 4, 2002.

 

 

 

4.1

(3)

Rights Agreement dated as of September 25, 2002 between the Company and Equiserve Trust Company, NA.

 

 

 

4.2

(4)

Amendment No. 1 to Rights Agreement dated as of December 27, 2002.

 

 

 

4.3

(5)

Form of specimen stock certificate.

 

 

 

10.1.1

(1)

Securities Purchase Agreement dated May 23, 2000 among the Company, Perseus Capital, L.L.C., DQE Enterprises, Inc., Micro-Generation Technology Fund, L.L.C., Mechanical Technology Incorporated, GE Capital Equity Investments, Inc., The Beacon Group Energy Investment Fund II, L.P. and Penske Corporation.

 

 

 

10.1.2

(6)

Third Amended and Restated 1998 Stock Incentive Plan.

 

 

 

10.1.3

(2)

Form of Incentive Stock Option Agreement.

 

 

 

10.1.4

(2)

Form of Non-Qualified Stock Option Agreement.

 

 

 

10.1.5

(1)

Form of Non-Qualified Stock Option Agreement issued to certain consultants on July 24, 2000 and list of holders thereof.

 

 

 

10.1.6

(6)

Employee Stock Purchase Plan.

 

 

 

10.1.7

(1)

Amended and Restated License Agreement dated October 23, 1998 between the Company and SatCon Technology Corporation.

 

 

 

10.1.8

(1)

Lease dated July 14, 2000 between the Company and BCIA New England Holdings LLC.

 

 

 

10.1.9

(7)

Form of Director and Officer Indemnification Agreement.

 

 

 

10.1.10

(2)

Form of Restricted Stock Unit Agreement.

 

 

 

10.1.11

(8)

Agreement dated January 31, 2005 between the Company and the New York State Energy Research and Development Authority.

 

 

 

10.1.12

(9)

Agreement dated January 31, 2005 between the Company and California State Energy Resources Conservation and Development Commission.

 

 

 

10.1.13

(10)

Investment Agreement dated April 22, 2005 among the Company, Perseus 2000 Expansion, L.L.C. and Perseus Capital, L.L.C.

 

 

- 21 -

 

 

 

 

 

 

 

10.1.14

(11)

Common Stock Purchase Warrant dated May 24, 2005 issued to Perseus 2000 Expansion, L.L.C.

 

 

 

10.1.15

(11)

Amended and Restated Common Stock Purchase Warrant dated May 24, 2005 issued to Perseus Capital, L.L.C.

 

 

 

10.1.16

(11)

Registration Rights Agreement dated May 24, 2005 among the Company, Perseus 2000 Expansion, L.L.C. and Perseus Capital L.L.C.

 

 

 

10.1.17

(12)

Option Agreement dated July 25, 2005 between the Company and Lisa Zappala.

 

 

 

10.1.18

(13)

Agreement dated October 7, 2005 between the Company and the Air Force Research Laboratory.

 

 

 

10.1.19

(14)

Securities Purchase Agreement dated November 4, 2005 among the Company and Iroquois Master Fund Ltd., Gryphon Master Fund, LP, GSSF Master Fund, LP, Nite Capital LP, Enable Growth Partners, LP, Enable Opportunity Partners, LP, Truk Opportunity Fund, LLC, Truk International Fund, LP, Capital Ventures International and UBS O'Connor LLC FBO O'Connor PIPES Corporate Strategies Master Limited.

 

 

 

10.1.20

(14)

Form of Warrant issued pursuant to the November 2005 financing.

 

 

 

10.1.21

+

Employment Agreement dated May 8, 2006 between the Company and F. William Capp.

 

 

 

10.1.22

+

Employment Agreement dated May 8, 2006 between the Company and James M. Spiezio.

 

 

 

10.1.23

+

Employment Agreement dated May 8, 2006 between the Company and Matthew L. Lazarewicz.

 

 

 

10.1.24

+

Performance-based Restricted Stock Unit Agreement dated May 8, 2006 between the Company and F. William Capp.

 

 

 

10.1.25

+

Performance-based Restricted Stock Unit Agreement dated May 8, 2006 between the Company and James M. Spiezio.

 

 

 

10.1.26

+

Performance-based Restricted Stock Unit Agreement dated May 8, 2006 between the Company and Matthew L. Lazarewicz.

 

 

 

10.1.27

+

Restricted Stock Unit and Option Agreement dated May 8, 2006 between the Company and F. William Capp.

 

 

 

10.1.28

+

Restricted Stock Unit and Option Agreement dated May 8, 2006 between the Company and James M. Spiezio.

 

 

 

10.1.29

+

Restricted Stock Unit and Option Agreement dated May 8, 2006 between the Company and Matthew L. Lazarewicz.

 

 

 

31.1

+

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

 

 

 

- 22 -

 

 

 

 

31.2

+

Certification of Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

 

32.1

+

Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 

 

32.1

+

Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 

(1) Incorporated by reference from the Form S-1 filed on November 16, 2000 (File No. 333-43386).

(2) Incorporated by reference from the Form 10-K filed on March 30, 2006 (File No. 000-31973).

(3) Incorporated by reference from the Form 8-K filed on October 4, 2002 (File No. 001-16171).

(4) Incorporated by reference from the Form 10-K filed on March 31, 2003 (File No. 001-16171).

(5) Incorporated by reference from the Form S-3 filed on December 8, 2005 (File No. 333-130207).

(6) Incorporated by reference from the Form S-8 filed on March 22, 2006 (File No. 333-132638).

(7) Incorporated by reference from the Form 8-K filed on May 10, 2005 (File No. 001-16171).

(8) Incorporated by reference from the Form 8-K filed on February 14, 2005 (File No. 001-16171).

(9) Incorporated by reference from the Form 8-K filed on February 16, 2005 (File No. 001-16171).

(10) Incorporated by reference from the Form 8-K filed on April 25, 2005 (File No. 001-16171).

(11) Incorporated by reference from the Form 8-K filed on July 29, 2005 (File No. 001-16171).

(12) Incorporated by reference from the Form 8-K filed on April 25, 2005 (File No. 001-16171).

(13) Incorporated by reference from the Form 8-K filed on October 13, 2005 (File No. 001-16171).

(14) Incorporated by reference from the Form 8-K filed on November 7, 2005 (File No. 001-16171).

 

+ Filed herewith.

 

 

- 23 -

 

 

 

 

**SIGNATURES**

 

Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

BEACON POWER CORPORATION

 

Date:  May 8, 2006

By:  /s/ F. William Capp

F. William Capp

President and Chief Executive Officer

 

 

May 8, 2006

By: /s/ James M. Spiezio

 
 
James M. Spiezio

 
 
Vice President of Finance, Chief Financial Officer,

 
Treasurer and Secretary

 
 
Principal Financial Officer

 
 

 

 

- 24 -

 

 

  |
|---------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|