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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 10-K/A
 Amendment No. 1
      þ
    ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934  For the fiscal year 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: 0-30539
 TVIA, INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware

94-3175152(State or other jurisdiction
    of
    incorporation or organization)

(IRS Employer
    Identification No.)4001 Burton Drive,
    Santa Clara, California 95054(Address of principal
    executive offices)

(408) 982-8588(Registrants
    telephone number,
    including area code)   Securities registered to Section 12(b) of the Act:
    None
  Securities registered pursuant to Section 12(g) of the
    Act:
  Common Stock, par value $0.001 per share
  o þ
  Indicate
    by check mark if the registrant is not required to file reports
    pursuant to Section 13 or Section 15(d) of the
    Act.  Yes o     No þ
  Indicate
    by check mark whether the registrant (1) has filed all
    reports required 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 þ     No o
  Indicate
    by check mark if disclosure of delinquent filers pursuant to
    Item 405 of
    Regulation S-K
    (Section 229.405 of this chapter) is not contained herein,
    and will not be contained, to the best of registrants
    knowledge, in definitive proxy or information statements
    incorporated by reference in Part III of this
    Form 10-K
    or any amendment to this
    Form 10-K.þ
  Indicate
    by check mark whether the registrant is a large accelerated
    filer, an accelerated filer, or a non-accelerated filer. See
    definition of accelerated filer and large accelerated
    filer in
    Rule 12b-2
    of the Exchange Act).
  Large
    accelerated
    filer o     Accelerated
    filer o     Non-accelerated
    filer þ
  Indicate
    by check mark whether the registrant is a shell company (as
    defined in
    Rule 12b-2
    of the Exchange
    Act).  Yes o     No þ
  The
    aggregate market value of Common Stock held by non-affiliates
    (based upon the closing sale price on the Nasdaq Small Cap
    Market) on September 30, 2005 was approximately
    $29.6 million.
  As of
    May 31, 2006 there were 24,106,917 shares of Common
    Stock, $0.001 per share par value, outstanding.
  DOCUMENTS
    INCORPORATED BY REFERENCE




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EXPLANATORY
    NOTE
  Form 10-K/A Form 10-K
  Form 8-K
  Form 10-K/A. Form 10-K/A
    
    Item 1. Business
    Item 1A. Risk Factors    
    Item 6. Selected Financial Data
    Item 7. Managements Discussion and Analysis of
    Financial Condition and Results of Operations
    Item 8. Financial Statements and Supplementary
    Data
    Item 9A. Controls and Procedures   1




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This document contains forward-looking statements that
    involve risks and uncertainties. Tvias actual results may
    differ materially from the results discussed in such
    forward-looking statements. Factors that might cause such
    differences include, but are not limited to, fluctuations in
    customer demand, risks associated with competition, risks
    associated with product development, reliance on foreign
    manufacturers, foreign business, political and economic risks
    and risks identified in the Companys Securities and
    Exchange Commission, filings, including, but not limited to,
    those discussed elsewhere in this
    Form 10-K
    under the heading Risk Factors located in
    Item 1A.
  All references to Tvia, we,
    us, our or the Company mean
    Tvia, Inc. and its subsidiary, except where it is made clear
    that the term means only the parent company.
  Item 1.
    Business        Available
    Information
  http:// www.tvia.com. Form 10-K, Form 10-Q, Forms 8-K,
  Industry
    Background
    
    Standard Definition TV (SDTV)  SDTV is the
    basic level of quality display and resolution for both analog
    and digital. Transmission of SDTV may be in either the
    traditional (4:3) or widescreen (16:9) format.
    Enhanced Definition TV (EDTV)  EDTV is a step
    up from Analog Television. EDTV comes in 480p widescreen (16:9)
    or traditional (4:3) format and provides better picture quality
    than SDTV, but not as high as HDTV.
    High Definition TV (HDTV)  HDTV in widescreen
    format (16:9) provides the highest resolution and picture
    quality of all digital broadcast formats. Combined with
    digitally enhanced sound technology, HDTV sets new standards for
    sound and picture quality in television. 2




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
    We believe our display processors provide high quality,
    efficient silicon de-interlacing and scaling that allow our
    customers to produce high-quality progressive scan CRT
    television and LCD television at an attractive price.
    We believe our display processors, software, reference design
    kit and design support enable our OEM customers to accelerate
    their time to market by reducing their systems engineering
    development. Our engineers work closely with our customers
    engineers to facilitate systems design. These benefits enable
    our OEM customers to quickly bring products with rich features
    and differentiated systems to market.  Products
   3




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picture-in-picture
    Customers
      Sales and
    Marketing
     4




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on-site
    Research and
    Development
        Manufacturing
       5




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Competition
    
    Functionality;
    Complete solution,
    Performance;
    Time to market;
    Price;
    Conformity to industry standards;
    Product road maps; and
    Technical support.    Intellectual
    Property
           6




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Backlog
    Seasonality
    Employees
    Item 1A
    RISK
    FACTORS  Our future
    operating results are likely to fluctuate and may fail to meet
    expectations, which could cause our stock price to
    decline.
    
    the general condition of the semiconductor industry market;
    fluctuations in the volume of product sales, changes in product
    mix and pricing concessions on sales; 7




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
    the timing, rescheduling or cancellation of significant customer
    orders;
    the timing of investments in, and the results of, research and
    development;
    changes in industry standards;
    introduction of interactive television services by service
    providers;
    availability of manufacturing capacity and raw materials, and
    inventory write-offs;
    product introductions and price changes by our competitors;
    our ability to specify, develop, introduce and market new
    products with smaller geometries, more features and higher
    levels of design integration in accordance with design
    requirements and design cycles;
    the level of orders received that can be shipped in a given
    period;
    changes in earning estimates or investment recommendations by
    analysts;
    changes in investors perceptions; and
    the effect of the terrorist attacks in the United States and any
    related conflicts or similar events worldwide.  We currently
    rely on certain international customers for a substantial
    portion of our revenues and are subject to risks inherent in
    conducting business outside of the United
    States.
    
    difficulties in collecting accounts receivable
    difficulties in managing distributors or representatives
    exchange rate variations, tariffs, import restrictions and other
    trade barriers
    political and economic instability
    unexpected changes in regulatory requirements    We were
    required to defer significant amounts of revenue, and we may not
    be able to recognize those amounts if our customers do not pay
    us.
   8




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New product
    announcements could result in decreased demand for our older
    products or a decline in our inventory value, which in turn may
    harm our business, financial position and operating
    results.
    We identified
    two material weaknesses in internal control over financial
    reporting during fiscal year 2006. If we fail to maintain an
    effective system of internal controls, we may not be able to
    report our financial results accurately, which may cause
    investors to lose confidence in our reported financial
    information and have an adverse effect on the price of our
    common stock.
      A significant
    amount of our revenues comes from a few customers and any
    decrease in revenues from these customers could significantly
    impact our financial results.
   9




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If we fail to
    develop new products and enhance our existing products in order
    to react to rapid technological change and market demands, our
    business will suffer.
      We expect
    continuing losses and may not achieve profitability, which could
    affect our ability to expand our business.
    Our operating
    expenses may increase as we build our business and these
    increased expenses may impact our ability to become
    profitable.
    Our industry
    is highly competitive, and we cannot assure you that we will be
    able to effectively compete.
    
    functionality; 10




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
    performance;
    time to market;
    price;
    conformity to industry standards;
    product road maps; and
    technical support.      A slow down in
    the DTV market could significantly affect our revenue
    growth.
    Because of our
    long product development process and sales cycle, we incur
    substantial expenses before we generate revenues and may not
    recover our expenditures.
     11




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If we fail to
    successfully develop, introduce and sell new products, we may be
    unable to effectively compete in the future.
    
    our failure to complete new product designs in a timely manner;
    our inability to manufacture our new products according to
    design specifications;
    our inability to deliver our products to our customers in a
    timely manner for any reason, including lack of manufacturing
    capacity or the failure of our contracted foundries to meet
    targeted-manufacturing yields; and
    our sales forces and independent distributors
    inability to create adequate demand for our products.  We depend on
    two independent foundries to manufacture our products based on
    our forecasts, which could result in an oversupply or
    undersupply of products.
      We may
    encounter periods of semiconductor oversupply, resulting in
    pricing pressure, as well as undersupply, resulting in a risk
    that we could be unable to fulfill our customers
    requirements.
   12




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If we have to
    qualify new independent foundries for any of our products and do
    not have sufficient supply of our products on hand, we may lose
    revenues and damage our customer relationships.
        Our
    semiconductors are complex to manufacture and may have errors or
    defects, which could be costly to correct.
    Our software
    is complex and may have bugs or defects which could be costly to
    correct.
   13




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If the
    industries into which we sell our products experience recession
    or other cyclical effects impacting our customers budgets,
    our operating results could be negatively
    impacted.
      The rapid growth of our business and operations has strained
    and may continue to strain our administrative, operational and
    financial resources, and our failure to manage our future growth
    could affect our operations and our future ability to expand.
    We depend on
    key personnel, the loss of whom would impair or inhibit the
    growth of our business.
   14




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We rely on
    strategic relationships to commercialize our products, and these
    relationships may require that we expend significant resources
    without guarantees that our endeavors will be
    profitable.
    We depend on
    third-party subcontractors for assembly of our semiconductors
    which reduces our control over the delivery, quantity, quality,
    or cost of our products.
    Political
    instability in the Peoples Republic of China or Taiwan
    could harm our manufacturing and research and development
    capabilities and negatively impact our product
    sales.
    If our
    competitors use our intellectual property and proprietary
    rights, our ability to compete would be impaired.
   15




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We may face
    intellectual property infringement claims that could be costly
    and could result in the loss of proprietary rights which are
    necessary to our business.
    Regulation of
    our customers products may slow the process of introducing
    new products and could impair our ability to
    compete.
   16




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PART II  Item 6.
    Selected
    Financial Data    Year Ended
    March 31,2006


2005


2004


2003


2002Restated(1)(In thousands,
    except per share data)Consolidated Statements of
    Operations Data:Revenues:Product sales

$
5,034


$
3,098


$
2,042


$
1,771


$
11,342Development contracts and other


566



183



267



461



498Total revenues


5,600



3,281



2,309



2,232



11,840Cost of revenues:Product sales


2,521



1,587



1,235



1,460



8,522Development contracts and other


5



198



88



83



109Total cost of revenues


2,526



1,785



1,323



1,543



8,631Gross profit


3,074



1,496



986



689



3,209Operating expenses:Research and development


6,065



5,829



6,823



8,983



12,664Sales and marketing


3,027



1,338



838



1,506



2,940General and administrative


3,964



2,365



1,829



2,039



2,116Amortization of deferred stock
    compensation














595



1,572Restructuring costs














950



Total operating expenses


13,056



9,532



9,490



14,073



19,292Operating loss


(9,982
)


(8,036
)


(8,504
)


(13,384
)


(16,083
)Other income (expense), netInterest income


606



406



401



703



1,818Interest expense


(204
)


(10
)


(11
)


(14
)


Gain on sale of software business










9,075







Net income (loss) before taxes


(9,580
)


(7,640
)


961



(12,695
)


(14,265
)Income taxes










25Net income (loss)

$
(9,580
)

$
(7,640
)

$
936


$
(12,695
)

$
(14,265
)Basic and diluted net income
    (loss) attributable to common stockholders

$
(0.41
)

$
(0.33
)

$
0.04


$
(0.58
)

$
(0.66
)Shares used in computing basic and
    diluted net income (loss) per share to common stockholders


23,471



22,827



23,982



21,952



21,631  17




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2006


2005


2004


2003


2002Restated(In thousands,
    except per share data)Consolidated Balance Sheet
    Data:Cash and cash equivalents and
    short-term investments

$
12,957


$
21,742


$
27,206


$
24,417


$
35,505Working capital


14,437



21,513



28,000



24,273



35,979Total assets


22,637



25,487



31,403



31,193



43,387Long-term liabilities


211



345







486



Total stockholders equity

$
15,457


$
22,642


$
30,059


$
28,766


$
40,925     (1)
    
    For additional information regarding the restatement, see
    Item 7. Managements Discussion and Analysis of
    Financial Condition and Results of Operations and Note 13
    of the Consolidated Financial Statements. 18




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Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following discussion and analysis should be read in
    conjunction with Selected Financial Data and our
    Consolidated Financial Statements and Notes thereto included
    elsewhere in this
    Form 10-K.
    This document contains forward-looking within the meaning of the
    Private Security Litigation Reform Act of 1995. When used in
    this Report, the words expects,
    anticipates, intends,
    estimates, plans, believes,
    and similar expressions are intended to identify forward-looking
    statements. These are statements that relates to future periods
    and are subject to risks and uncertainties. Forward-looking
    statements include our beliefs with respect to the factors that
    may impact our gross margins, the reasons for and extent of our
    restatement, what we believe comprise our critical accounting
    policies, and significant judgments and estimates, the
    attributes of digital television and our products, the benefits
    customers derive from using our products, the potential growth
    of the digital television market, our levels of spending on
    research and development and the success of any future products
    or product enhancements, the factors that impact sales of our
    products, how long our existing cash reserves will last, our
    expectations regarding future expense levels, the amount of
    stock based compensation expense in future periods and the
    impact of recent accounting pronouncements on our business.
    Tvias actual results may differ materially from the
    results discussed in such forward-looking statements. Factors
    that might cause such differences include, but are not limited
    to, fluctuations in customer demand, risks associated with
    competition, risks associated with product development, reliance
    on foreign manufacturers, foreign business, political and
    economic risks and risks identified in the Companys
    Securities and Exchange Commission, filings, including, but not
    limited to, those discussed elsewhere in this
    Form 10-K
    under the heading Risk Factors located in
    Item 1A, of this
    Form 10-K.
    These forward-looking statements speak only as of the date
    hereof, and Tvia disclaims any obligation to update these
    statements.
  Restatement
  Form 8-K
  Overview
    We currently offer three product families:
 19




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Critical
    Accounting Policies and Estimates
      Revenues.
   20




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Receivables.
  Inventory. (first-in,
  Impairment of Long-Lived Assets. Accounting for the Impairment or
    Disposal of Long-Lived Assets.
  Stock Based Compensation Expense.
 21




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Accounting for Stock-Based
    Compensation Accounting for Stock-Based Compensation, Transition and
    Disclosure.
    Results of
    Operations
    Year Ended
    March 31,2006


2005


2004RestatedConsolidated Statement of
    Operations Data:Revenues:Product sales


90
%


94
%


88
%Development contracts and others


10



6



12Total revenues


100



100



100Cost of revenues:Product sales


45



48



53Development contracts and others






6



4Total cost of revenues


45



54



57Gross profit


55



46



43Operating expenses:Research and development


108



178



295Sales and marketing


54



41



37General and administrative


71



72



79Total operating expenses


233



291



411Operating loss


(178
)


(245
)


(368
)Other income (expense), netInterest income


11



12



17Interest expense


(4
)






Gain on sale of software business










393Other income, net


7



12



410Net income (loss) before taxes


(171
)


(233
)


42Income taxes










1Net income (loss)


(171
)


(233
)


41  22




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Results of
    Operations for the Fiscal Years Ended March 31, 2006, 2005
    and 2004
  Revenues.
    Gross margin.
  Research and development. SFAS No. 123(R) Form 10-K.
  Sales and marketing.
 23




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SFAS No. 123(R) Form 10-K.
  General and administrative. SFAS No. 123(R) Form 10-K.
  Gain on Sale of Software Unit.
  Restructuring Charges.
  Other income (expense), net.
  Provision for income taxes.
 24




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Liquidity and
    Capital Resources
          Off-Balance Sheet
    Arrangements
    Contractual
    Obligations
   25




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Contractual

Payments Due by
    PeriodObligations

Total


Less than
    1 Year


1-3 Years


3-5 Years


More than
    5 YearsNotes Payable


775



550



225







Operating LeaseObligations

$
555


$
320


$
235







Total

$
1,330


$
870


$
460







     Recently Issued
    Accounting Pronouncements
       26




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##### 



Item 8.
    Financial
    Statements and Supplementary Data  Index to
    Consolidated Financial Statements
   
 PageConsolidated Financial
    Statements of Tvia, Inc.Report of
    Independent Registered Public Accounting Firm for the fiscal
    year ended March 31, 2006


28Report of
    Independent Registered Public Accounting Firm for the fiscal
    years ended March 31, 2005 and 2004


29Consolidated
    Balance Sheets


30Consolidated
    Statements of Operations


31Consolidated
    Statements of Stockholders Equity


32Consolidated
    Statements of Cash Flows


33Notes to
    Consolidated Financial Statements


34EXHIBIT 23.1EXHIBIT 23.2EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2   27




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Report
    of Independent Registered Public Accounting Firm           ,
      
    28




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Report of
    Independent Registered Public Accounting Firm      
    29




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TVIA, INC. AND
    SUBSIDIARY



CONSOLIDATED BALANCE SHEETS  March 31,2006


2005Restated(In thousands,
    except per share data)ASSETSCurrent assets:Cash and cash equivalents

$
8,455


$
4,078Investments


4,502



17,664Accounts receivable, net


3,662



792Inventories, net


2,601



598Other current assets and prepaid
    expenses


902



881Deferred cost of sales


1,284



Total current assets


21,406



24,013Property and equipment, net


928



1,088Other assets


303



386Total assets

$
22,637


$
25,487LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
802


$
302Accrued liabilities and other


2,327



1,709Short-term portion of notes payable


541



460Deferred revenue


2,733



Cash settled stock appreciation
    rights (Note 8)


566



29Total current liabilities


6,969



2,500Long-term portion of notes payable


211



345Total liabilities


7,180



2,845Commitments and contingencies
    (Note 11)Stockholders equityCommon stock, $0.001 par
    value: 125,000 shares authorized; 23,866 and
    23,171 shares outstanding, respectively


24



23Additional
    paid-in-capital


95,395



93,118Accumulated other comprehensive
    income (loss)


28



(89
)Accumulated deficit


(79,240
)


(69,660
)Treasury stock: 204,400 shares


(750
)


(750
)Total stockholders equity


15,457



22,642Total liabilities and
    stockholders equity

$
22,637


$
25,487  30




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TVIA, INC. AND
    SUBSIDIARY



CONSOLIDATED STATEMENTS OF OPERATIONS  Year Ended
    March 31,2006


2005


2004Restated(In thousands,
    exceptper share
    amounts)Revenues:Product sales

$
5,034


$
3,098


$
2,042Non-recurring
    charges/reimbursements


566



183



267Total revenues


5,600



3,281



2,309Cost of revenues:Product sales


2,521



1,587



1,235Non-recurring
    charges/reimbursements


5



198



88Total cost of revenues


2,526



1,785



1,323Gross profit


3,074



1,496



986Operating expenses:Research and development


6,065



5,829



6,823Sales and marketing


3,027



1,338



838General and administrative


3,964



2,365



1,829Total operating expenses


13,056



9,532



9,490Operating loss


(9,982
)


(8,036
)


(8,504
)Other income (expense), net:Interest income


606



406



401Interest expense


(204
)


(10
)


(11
)Sale of software business










9,075Other income (expense), net


402



396



9,465Income (loss) before taxes


(9,580
)


(7,640
)


961Income taxes










25Net income (loss) after taxes

$
(9,580
)

$
(7,640
)

$
936Basic and diluted net income
    (loss) per share

$
(0.41
)

$
(0.33
)

$
0.04Shares used in computing basic net
    income (loss) per share


23,471



22,827



22,323Shares used in computing diluted
    net income (loss) per share


23,471



22,827



23,982    31




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TVIA, INC. AND
    SUBSIDIARY



CONSOLIDATED STATEMENTS OF STOCKHOLDERS
    EQUITY  RESTATED  AccumulatedCommon
    Stock


Additional


OtherPar


Paid-in


Comprehensive


Accumulated


Treasury


StockholdersShares


Amount


Capital


Income
    (loss)


Deficit


Stock


Equity(In thousands,
    except share data)Balance at March 31,
    2003


22,163,222


$
22


$
92,444


$
6


$
(62,956
)

$
(750
)

$
28,766Issuance of Common stock under ESPP
    and through exercises of stock options


412,767



1



354















355Unrealized gain on
    available-for-sale
    investments














2











2Net Income


















936







936Balance at March 31,
    2004


22,575,989



23



92,798



8



(62,020
)


(750
)


30,059Issuance of Common stock under ESPP
    and through exercises of stock options


595,057







320















320Unrealized loss on
    available-for-sale
    investments














(97
)










(97
)Net loss


















(7,640
)






(7,640
)Balance at March 31,
    2005


23,171,046



23



93,118



(89
)


(69,660
)


(750
)


22,642Issuance of Common stock under
    ESPP, exercises of stock options


694,805



1



615















616Stock issued in settlement of
    lawsuit










148















148Stock compensation 
    equity plans










1,514















1,514Unrealized loss on
    available-for-sale
    investments














117











117Net loss


















(9,580
)






(9,580
)Balance at March 31,
    2006


23,865,851


$
24


$
95,395


$
28


$
(79,240
)

$
(750
)

$
15,457  32




---



##### Table of Contents



TVIA, INC. AND
    SUBSIDIARY



CONSOLIDATED STATEMENTS OF CASH FLOWS  Year Ended
    March 31,2006


2005


2004Restated(In
    thousands)Cash Flows from Operating
    Activities:Net income (loss)

$
(9,580
)

$
(7,640
)

$
936Adjustments to reconcile net income
    (loss) to net cash used in operating activities:Depreciation and mortization


1,075



1,276



1,748Write-down of license technology










1,449Gain on sale of software unit










(9,075
)Loss on retirement of fixed assets






104



Change in accounts receivable
    allowance


110







Stock issued in settlement of
    lawsuit


148







Stock compensation
    expense  equity plans


1,514







Changes in operating assets and
    liabilities:Accounts receivable


(2,980
)


(497
)


36Inventories


(2,003
)


4



453Other current assets and prepaid
    expenses


163



126



(269
)Deferred cost of sales


(1,284
)Accounts payable


500



101



(150
)Accrued liabilities and other


618



1,081



(518
)Deferred revenue


2,733







Cash settled stock appreciation
    rights


537







Net cash used in operating
    activities


(8,449
)


(5,445
)


(5,390
)Cash Flows from Investing
    Activities:Purchase of
    available-for-sale
    investments


(11,968
)


(6,137
)


(39,977
)Proceeds from sale of
    available-for-sale
    investments


25,247



12,324



29,369Proceeds from sale of software unit






753



8,373Purchase of property and equipment


(482
)


(503
)


(92
)Purchase of intangible assets










(44
)Net cash provided by (used in)
    investing activities


12,797



6,437



(2,371
)Cash Flows from Financing
    Activities:Repayments of capital leases






(493
)


(415
)Repayments of notes payable


(587
)






Proceeds from issuance of common
    stock


616



320



355Net cash provided by (used in)
    financing activities


29



(173
)


(60
)Net increase (decrease) in cash and
    cash equivalents


4,377



819



(7,821
)Cash and cash equivalents at
    beginning of period


4,078



3,259



11,080Cash and cash equivalents at end of
    period

$
8,455


$
4,078


$
3,259Supplemental Cash Flow Information:Interest paid

$
48


$
10


$
11Notes payable issued for the right
    to the use of design software

$
519


$
920


$
  33




---



##### Table of Contents



TVIA, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Note 1.
    Description of
    Business and Summary of Significant Accounting
    Policies  Description of
    Business
      Use of
    Estimates
      Principles of
    Consolidation
    Cash and Cash
    Equivalents and Short-Term Investments
  available-for-sale
  Allowance for
    Sales Returns and Doubtful Accounts
   34




---



##### Table of Contents



TVIA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Inventories
  first-in,
  Property and
    Equipment
    Impairment of
    Long-Lived Assets
    Revenue
    Recognition
  Revenues.
       35




---



##### Table of Contents



TVIA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      Software
    Development Costs
    Research and
    Development Expenses
    Income
    Taxes
  Accounting for Income
    Taxes.
  Comprehensive
    Income (Loss)
    For the Year
    Ended March 31,2006


2005


2004RestatedNet income (loss)

$
(9,580
)

$
(7,640
)

$
936Unrealized gain (loss) on
    available-for-sale-investments


117



(97
)


2Comprehensive income (loss)

$
(9,463
)

$
(7,737
)

$
938   Stock-Based
    Compensation Expense
  Effect of Early
    Adoption of SFAS 123(R)
   36




---



##### Table of Contents



TVIA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      Accounting for Stock-Based
    Compensation Accounting for Stock-Based Compensation, Transition and
    Disclosure.
      Foreign
    Currency Translation
    Net Income
    (Loss) Per Share
   37




---



##### Table of Contents



TVIA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Recent
    Accounting Pronouncements
       38




---



##### Table of Contents



TVIA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Note 2.
    Balance Sheet
    Components (in thousands)  March 31,


March 31,2006


2005RestatedAccounts receivable, net:Trade receivables

$
3,672


$
912Less: Allowance for doubtful
    accounts


(10
)


(120
)$
3,662


$
792Inventories, net:Work in process

$
1,716


$
515Finished goods


885



83$
2,601


$
598Property and equipment, net:Furniture and fixtures

$
175


$
76Machinery and equipment


3,123



2,838Software


2,943



2,8516,241



5,765Less: Accumulated depreciation and
    amortization


(5,313
)


(4,677
)$
928


$
1,088     Accrued liabilities and other:Accrued compensation costs

$
1,203


$
463Accrued license technology






700Accrued audit and legal


193



192Accrued inventory purchases


777



189Other


154



165$
2,327


$
1,709   Note 3.
    Short-term
    Investments    As of
    March 31, 2006

Mature Less Than
    12 MonthsAggregate


UnrealizedCost
    Value


Fair
    Value


Gain/(Loss)(In
    thousands)U.S. corporate and bank debt

$
4,505


$
4,502


$
(3
)   39




---



##### Table of Contents



TVIA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  As of
    March 31, 2005

Mature Less Than
    12 MonthsAggregate


UnrealizedCost
    Value


Fair
    Value


Gain/(Loss)(In
    thousands)U.S. government and agency
    securities

$
7,000


$
6,958


$
(42
)U.S. corporate and bank debt


10,753



10,706



(47
)Total

$
17,753


$
17,664


$
(89
)   Note 4.
    Sale of Software
    Business and Software-Related Assets    Note 5.
    Restructuring
    Charges and Impairment Charges  Restructuring
    Charges
    Impairment
    Charges
    Note 6.
    Income
    Taxes    Year Ended
    March 31,2006


2005


2004Restated(In
    thousands)Domestic

$
(9,678
)

$
(9,599
)

$
2,036Foreign


98



1,959



(1,075
)Total

$
(9,580
)

$
(7,640
)

$
961  40




---



##### Table of Contents



TVIA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      March 31,2006


2005Restated(In
    thousands)Net operating losses

$
24,416


$
19,566Reserve for accruals not deducted
    for tax purposes


275



677Available tax credit carry forwards


2,928



2,618Other timing differences


1,633



1,818Gross deferred tax asset


29,252



24,679Valuation allowance


(29,252
)


(24,679
)Net deferred tax asset

$



$
            41




---



##### Table of Contents



TVIA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    March 31,2006


2005


2004(In
    thousands)Tax provision (benefit) at
    statutory rate


(34.0
)%


(34.0
)%


34.0
%Valuation allowance


34.0
%


39.0
%


25.4
%Other


(3.8
)%


(5.0
)%


3.6
%Utilization of net operating losses


0.0
%


0.0
%


(60.2
)%Stock options


3.8
%


0.0
%


0.0
%0.0
%


0.0
%


2.8
%   Note 7.
    Earnings per
    Share    Year Ended
    March 31,2006


2005


2004Restated(In thousands,
    except per share data)Net income (loss)

$
(9,580
)

$
(7,640
)

$
936Basic and diluted:Weighted average shares of common
    stock outstanding


23,471



22,827



22,340Less: Weighted average shares of
    common stock subject to repurchase










(17
)Weighted average shares used in
    computing basic net income (loss) per share


23,471



22,827



22,323Diluted effect of common stock
    equivalents










1,659Weighted average shares used in
    computing diluted net income (loss) per share


23,471



22,827



23,982Basic and diluted net income
    (loss) per share

$
(0.41
)

$
(0.33
)

$
0.04Options and warrants excluded from
    the computation of diluted net income (loss) per share


7,523



5,382



1,364    42




---



##### Table of Contents



TVIA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Note 8.
    Stockholders
    Equity and Employee Compensation Plans  Stock Option
    Plans
  2000 Stock
    Incentive Plan and 2000 Employee Stock Purchase
    Plan
      1999 Stock
    Incentive Plan
     43




---



##### Table of Contents



TVIA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  SARS Plan
    (Stock Appreciation Rights)
    Out-of-Plan
    Options
    out-of-plan
  WeightedOptions





AverageAvailable


Outstanding


Exercise Pricefor
    Grant


Options


Per
    ShareBalance at March 31, 2003


2,997



4,444


$
1.79Annual increase


730







Granted


(1,347
)


1,347



1.41Exercised






(295
)


0.64Forfeitures


595



(595
)


1.88Balance at March 31, 2004


2,975



4,901


$
1.75Annual increase


730







Granted


(1,607
)


1,607



1.44Exercised






(497
)


0.51Forfeitures


629



(629
)


2.27Balance at March 31, 2005


2,727



5,382


$
1.71Annual increase


730







Granted


(3,060
)


3,060



1.76Exercised






(623
)


1.06Forfeitures


296



(296
)


2.86Balance at March 31, 2006


693



7,523


$
1.73    44




---



##### Table of Contents



TVIA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    WeightedOptions





AverageAvailable for


Outstanding


Exercise PriceGrant


Options


Per
    ShareBalance at March 31, 2003


1,269



231


$
1.70Granted


(78
)


78



1.57Exercised


22



(22
)


0.57Forfeitures


119



(119
)


1.98Balance at March 31, 2004


1,332



168


$
1.58Granted


(192
)


192



1.28Exercised


27



(27
)


0.72Forfeitures


4



(4
)


3.29Balance at March 31, 2005


1,171



329


$
1.27Granted


(174
)


174



1.62Exercised


22



(22
)


1.14Forfeitures


13



(13
)


1.48Balance at March 31, 2006


1,032



468


$
1.40       Options
    OutstandingWeighted








Options
    ExercisableAverage


Weighted








WeightedRemaining


Average








AverageContractual


Exercise


Aggregate





Exercise


AggregateNumber


Life


Price per


Intrinsic


Number


Price per


IntrinsicRange of Exercise
    Prices

Outstanding


(in
    Years)


Share


Value


Exercisable


Share


Value$0.12 - $1.20


694



6.77


$
0.63


$
1,520



512


$
0.55


$
1,162$1.27 - $1.27


1,000



5.67



1.27



1,550



1,000



1.27



1,550$1.35 - $1.35


25



8.96



1.35



37



13



1.35



19$1.39 - $1.39


1,764



6.25



1.39



2,523



50



1.39



72$1.42 - $1.47


1,052



8.47



1.44



1,452



437



1.45



599$1.50 - $1.57


936



7.64



1.55



1,189



585



1.55



743$1.67 - $2.08


780



8.16



1.79



803



307



1.73



335$2.10 - $2.63


834



8.23



2.43



325



295



2.33



145$2.82 - $9.00


408



3.62



5.24







207



7.57



$11.00 - $11.00


30



4.33



11.00







30



11.00



$0.12 - $11.00


7,523



6.98


$
1.73


$
9,398



3,436


$
1.83


$
4,624   in-the-money
 45




---



##### Table of Contents



TVIA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    SARS
    OutstandingWeighted








SARS
    ExercisableAverage


Weighted








WeightedRemaining


Average








AverageContractual


Exercise


Aggregate





Exercise


AggregateNumber


Life


Price per


Intrinsic


Number


Price per


IntrinsicRange of
    Prices

Outstanding


(in
    Years)


Share


Value


Exercisable


Share


Value$0.50 - $0.50


33



3.35


$
0.50


$
77



31


$
0.50


$
72$1.20 - $1.20


108



8.60



1.20



175



38



1.20



62$1.38 - $1.38


71



3.34



1.38



102



25



1.38



36$1.39 - $1.39


60



3.08



1.39



86











$1.45 - $1.45


1



6.08



1.45



1



1



1.45



1$1.57 - $1.57


57



7.50



1.57



71



32



1.57



40$1.65 - $1.65


15



5.03



1.65



18



15



1.65



18$1.67 - $1.67


10



6.01



1.67



12



10



1.67



12$1.74 - $1.74


113



4.67



1.74



122



2



1.74



2$2.10 - $2.10






5.32



2.10











2.10



$0.50 - $2.10


468



5.47


$
1.40


$
663



154


$
1.25


$
242     Valuation and
    Expense Information under SFAS 123(R)
    Total For theYear EndedMarch 31,2006Stock-based compensation expense
    included in cost of sales

$
79Research and development


766Sales and marketing


557General and administrative


649Stock-based compensation expense
    included in operating expense


1,972Stock-based compensation expense
    related to employee stock options, employee stock purchases and
    stock appreciation rights

$
2,051  46




---



##### Table of Contents



TVIA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  ®
  For the Year
    Ended March 31, 2006(Restated)Using Previous


SFAS 123(R)


AsAccounting


Adjustment


ReportedLoss from operations

$
(7,931
)

$
(2,051
)

$
(9,982
)Net loss

$
(7,529
)

$
(2,051
)

$
(9,580
)Basic and diluted net loss per
    share

$
(0.32
)

$
(0.09
)

$
(0.41
)Net cash used in operating
    activities

$
(8,449
)





$
(8,449
)Net cash provided by investing
    activities

$
12,797






$
12,797Net cash provided by financing
    activities

$
29






$
29   Valuation
    Assumptions for Stock Options
    Quarter Ended


Quarter Ended


Quarter Ended


Quarter EndedMarch 31,


December 31,


September 30,


June 30,2006


2005


2005


2005Stock Option PlanRisk-free Interest rate


4.6
%


4.2
%


3.6
%


3.8
%Expected life (in years)


3.1



3



3.2



5.4Volatility


101
%


90
%


90
%


91
%SARS PlanRisk-free Interest rate


4.6
%


4.2
%


3.6
%


3.8
%Expected life (in years)


1.6



1.9



2.3



2.4Volatility


101
%


90
%


90
%


91
%Employee Stock Purchase Plan
    (ESPP)Risk-free Interest rate


4.6
%






3.6
%


Expected life (in years)


0.5







0.05



Volatility


230
%






65
%


          47




---



##### Table of Contents



TVIA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Pro Forma
    Information Under SFAS 123 for Periods Prior to Fiscal Year
    Ended March 31, 2005
    For the Year
    Ended March 31,2005


2004Net income (loss) as reported

$
(7,640
)

$
936Less: stock based compensation
    determined under SFAS 123


(1,071
)


(1,315
)Pro forma net income (loss)

$
(8,711
)

$
(379
)Basic and diluted net income
    (loss) per share:As reported

$
(0.33
)

$
0.04Pro forma

$
(0.38
)

$
(0.02
)   Deferred Stock
    Compensation
    Stock
    Repurchase Agreements
    401(k)
    Plan
   48




---



##### Table of Contents



TVIA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Note 9.
    Certain
    Risks      For the Year
    Ended March 31,2006


2005


2004RestatedCustomer A


16
%


*



*Customer B


13
%


34
%


12
%Customer C


10
%


*



*Customer D


*



17
%


15
%Customer E


*



10
%


*         Fiscal Year
    EndedMarch 31,


March 31,


March 31,Product
    Family

2006


2005


2004Restated5700 TrueView


23
%


7
%


5600 TrueView


29
%


1
%


5300 CyberPro


6
%


38
%


16
%5200 CyberPro


27
%


46
%


28
%5000 CyberPro


6
%


7
%


42
%2000 CyberPro










4
%NRE and other


10
%


1
%


10
%100
%


100
%


100
%   Concentration
    of Credit Risk
   49




---



##### Table of Contents



TVIA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    March 31,2006


2005Customer A


24
%


*Customer B


17
%


27
%Customer C


11
%


20
%Customer D


11
%


*Customer E


*



16
%Customer F


*



27
%         Balance at


Charged toBeginning of


Costs and





Balance atDescription

Period


Expenses


Write-offs


End of
    PeriodYear Ended March 31, 2006
    Allowance for doubtful accounts

$
120


$
(110
)

$



$
10Year Ended March 31, 2005
    Allowance for doubtful accounts

$
3


$
117


$



$
120Year Ended March 31, 2004
    Allowance for doubtful accounts

$
50


$
15


$
62


$
3   Vendor
    Concentration
     50




---



##### Table of Contents



TVIA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Note 10.
    Segment and
    Geographic Information        For the Year
    Ended March 31,2006


2005


2004RestatedUnited States


20
%


11
%


24
%Europe


14
%


34
%


24
%China


40
%


13
%


18
%Japan


25
%


20
%


15
%Korea


*



10
%


*       Note 11.
    Commitments and
    Contingencies  Stock
    Repurchase
    Litigation
      and/or
 51




---



##### Table of Contents



TVIA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Lease
    Commitments
          Notes


OperatingFiscal
    Year

Payable


Leases


Total2007

$
550


$
320


$
8702008


225



203



4282009






31



31Total minimum payments


775



554



1,329Less: Amount representing interest


(23
)Present value of minimum payments


752Less: Current portion


(541
)Long-term portion

$
211   Note 12.
    Quarterly
    Information (Unaudited)  4th Quarter


3rd Quarter


2nd Quarter


1st Quarter(In thousands,
    except per share amounts)Quarterly
    Financial Data:

Restated


RestatedFiscal 2006:Revenues

$
802


$
1,935


$
1,755


$
1,108Gross margin

$
754


$
1,029


$
794


$
498Net (loss)

$
(3,090
)

$
(2,027
)

$
(2,421
)

$
(2,042
)Basic and diluted net (loss) per
    share

$
(0.13
)

$
(0.09
)

$
(0.10
)

$
(0.09
)   4th Quarter


3rd Quarter


2nd Quarter


1st QuarterFiscal 2005:Revenues

$
1,046


$
1,090


$
617


$
528Gross margin

$
493


$
501


$
266


$
236Net (loss)

$
(2,937
)

$
(1,580
)

$
(1,598
)

$
(1,525
)Basic and diluted net (loss) per
    share

$
(0.13
)

$
(0.07
)

$
(0.07
)

$
(0.07
)    52




---



##### Table of Contents



TVIA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
   
    The Company recorded additional compensation expense of $445,000
    for cash settled stock appreciation rights that are issued to
    employees of the Companys foreign operations to correct
    errors in the calculation of the total liability under
    SFAS 123(R).
    The Company recorded a reduction of $377,000 to its bad debt
    reserve related to accounts receivable that were previously
    considered uncollectible but were subsequently collected.
    The Company recorded a reduction of $145,000 to its warranty
    reserve. The Company did not experience previously anticipated
    warranty costs and returns related to new product introductions.  Note 13.
    Restatement  Form 8-K
 53




---



##### Table of Contents



TVIA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Form 10-K
  Year Ended
    March 31, 2006(In thousands,
    except per share amounts)AsPreviouslyReported


Adjustments


As
    RestatedRevenues:Product sales

$
7,767


$
(2,733
)(1)

$
5,034Non-recurring charges/reimbursements


566







566Total revenues


8,333



(2,733
)


5,600Cost of revenues:Product sales


3,805



(1,284
)(2)


2,521Non-recurring charges/reimbursements


5







5Total cost of revenues


3,810



(1,284
)


2,526Gross profit


4,523



(1,449
)


3,074Operating expenses:Research and development


6,065







6,065Sales and marketing


3,301



(274
)(3)


3,027General and administrative


3,964







3,964Total operating expenses


13,330



(274
)


13,056Operating loss


(8,807
)


(1,175
)


(9,982
)Other income (expense), net:Interest income


606







606Interest expense


(204
)






(204
)Sale of software business










Other income (expense), net


402







402Income (loss) before taxes


(8,405
)


(1,175
)


(9,580
)Income taxes










Net income (loss) after taxes

$
(8,405
)

$
(1,175
)


(9,580
)Basic and diluted net income (loss)
    per share:

$
(0.36
)

$
(0.05
)

$
(0.41
)Shares used in computing basic net
    income (loss) per share


23,471



23,471



23,471Shares used in computing diluted
    net income (loss) per share


23,471



23,471



23,471    54




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##### Table of Contents



TVIA, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  March 31,
    2006(In
    thousands)As previously


Current Year


AsReported


Adjustments


RestatedASSETSCurrent assets:Cash and cash equivalents

$
8,455






$
8,455Short-term investments


4,502







4,502Accounts receivable, net


3,662







3,662Inventories


2,601







2,601Deferred cost of goods sold






1,284(2
)


1,284Other current assets and prepaid
    expenses


902







902Total current assets


20,122



1,284



21,406Property and equipment, net


928







928Other assets


303







303Total assets

$
21,353


$
1,284


$
22,637LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
802






$
802Accrued liabilities and other


2,600



(273
)(3)


2,327Short-term portion of notes payable


541







541Deferred revenue






2,733(1
)


2,733Cash settled stock appreciation
    rights


566







566Total current liabilities


4,509



2,460



6,969Long-term portion of notes payable


211







211Total liabilities


4,720



2,460



7,180Commitments and contingenciesStockholders equityCommon stock, $0.001 par
    value: 125,000 shares authorized; 23,466 and
    23,171 shares outstanding, respectively


24







24Additional
    paid-in-capital


95,395







95,395Accumulated comprehensive income
    (loss)


28







28Accumulated deficit


(78,064
)


(1,176
)


(79,240
)Treasury stock


(750
)






(750
)Total stockholders equity


16,633



(1,176
)


15,457Total liabilities and
    stockholders equity

$
21,353


$
1,284


$
22,637     (1)
    
    Reflects the deferral of revenue(2)
    
    Reflects the COGS adjustment related to (1) above(3)
    
    Reflects the adjustment of accrued sales commissions as a result
    of (1) above   55




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##### Table of Contents



Item 9A.
    Controls and
    Procedures  Managements
    Report on Internal Control Over Financial Reporting
  Evaluation of disclosure controls and
    procedures. Rule 13a-15(e)
      Form 10-K, Rule 13a-15(e)
   56




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##### Table of Contents



Form 8-K
      Conclusion
    Regarding the Effectiveness of Disclosure Controls and
    Procedures
  Form 10-K
  Changes in
    Internal Controls
  Rule 13a-15(f)
 57




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##### Table of Contents



SIGNATURES
       By
    /s/  ELI
    PORAT       Name

Title

Date/s/  ELI
    PORATEli
    Porat

Chairman of the Board, Chief
    Executive Officer and President (Principal Executive Officer)

November 22, 2006/s/  KEITH
    P.
    YEEKeith
    Yee

Vice President, Finance and Chief
    Financial Officer

November 22, 2006/s/  JAMES
    BUNKER*James
    Bunker

Director

November 22, 2006/s/  R.
    DAVID DICIOCCIO*R.
    David Dicioccio

Director

November 22, 2006/s/  DR.
    BAICHUAN DU*Dr. Baichuan
    Du

Director

November 22, 2006/s/  YVES
    FAROUDJA*Yves
    Faroudja

Director

November 22, 2006/s/  MARK
    MANGIOLA*Mark
    Mangiola

Director

November 22, 2006/s/  TOM
    OSWOLD*Tom
    Oswold

Director

November 22, 2006By: /s/  *ELI
    PORATEli
    Porat

Attorney-in-fact

November 22, 2006  58




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##### Table of Contents



POWER OF
    ATTORNEY
  attorneys-in-fact, Form 10-K attorneys-in-fact
    /s/  TOM
    OSWOLDTom
    Oswold

Director

November 22, 2006  59




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber

Description of
    Document3(i)
.1

Amended and Restated Certificate
    of Incorporation (incorporated by reference to Exhibit 3.3
    to Amendment No. 8 to the Companys Registration Statement
    on
    Form S-1
    (File
    No. 333-34024)).3(ii)
.1

Amended and Restated Bylaws of
    Tvia, Inc. (Incorporated by reference to the exhibit of the same
    number in the Registrants
    Form 10-Q
    for the quarter ended June 30, 2005, as filed with the SEC
    on August 15, 2005).4
.1

Form of Common Stock Certificate
    (incorporated by reference to Exhibit 4.1 to Amendment
    No. 2 to the Companys Registration Statement on
    Form S-1
    (File
    No. 333-34024)).4
.2

Form of Amended and Restated
    Registration Rights Agreement dated as of April 3, 2000
    (incorporated by reference to Exhibit 4.2 to the
    Companys Registration Statement on
    Form S-1
    (File
    No. 333-34024)).10
.1#

Amended and Restated 1999 Stock
    Incentive Plan of Tvia, Inc. (incorporated by reference to
    Exhibit 10.1 to Amendment No. 1 to the Companys
    Registration Statement on
    Form S-1
    (File
    No. 333-34024)).10
.2#

Amended and Restated 2000 Stock
    Incentive Plan of Tvia, Inc. (incorporated by reference to
    Exhibit 10.2 to the Companys Annual Report on
    Form 10-K
    for the fiscal year ended March 31, 2002).10
.3#

Amended and Restated 2000 Employee
    Stock Purchase Plan of Tvia, Inc. (incorporated by reference to
    Exhibit 10.3 to the Companys Annual Report on
    Form 10-K
    for the fiscal year ended March 31, 2004 (File No.
    000-30539)).10
.4

Form of Directors and
    Officers Indemnification Agreement (incorporated by
    reference to Exhibit 10.4 to Amendment No. 3 to the
    Companys Registration Statement on
    Form S-1
    (File
    No. 333-34024)).10
.5

UMC Wafer Foundry Standard Terms
    and Conditions (incorporated by reference to Exhibit 10.6
    to Amendment No. 1 to the Companys Registration Statement
    on
    Form S-1
    (File
    No. 333-34024)).10
.6#

Form of Executive Severance
    Agreement (incorporated by reference to Exhibit 10.9 to
    Amendment No. 2 to the Companys Registration
    Statement on
    Form S-1
    (File
    No. 333-34024)).10
.7#

Confidential Severance Agreement
    and Change Status Release dated March 11, 2005 by and
    between the Company and Kenny Liu (incorporated by reference to
    Form 8-K,
    filed March 15, 2005) (File No. 0-30539)10
.8

Multi-Tenant Single-Building
    Modified-Net Lease dated October 27, 1995 between
    Koll/Intereal Bay Area and Integraphics System, Inc.
    (incorporated by reference to Exhibit 10.13 to the
    Companys Registration Statement on
    Form S-1
    (File
    No. 333-34024)).10
.9

First Amendment to Lease Agreement
    dated January 15, 1999 between Koll/Intereal Bay Area and
    IGS Technologies, Inc. (incorporated by reference to
    Exhibit 10.14 to the Companys Registration Statement
    on
    Form S-1
    (File
    No. 333-34024)).10
.10

Second Amendment to Lease
    Agreement dated May 6, 1999 between Koll/Intereal Bay Area
    and IGS Technologies, Inc. (incorporated by reference to
    Exhibit 10.15 to the Companys Registration Statement
    on
    Form S-1
    (File No.
    333-34024)).10
.11

Third Amendment to Lease Agreement
    dated June 27, 2003 between Koll/Intereal Bay Area and IGS
    Technologies, Inc. (incorporated by reference to
    Exhibit 10.15 to the Companys Registration Statement
    on
    Form S-1
    (File No.
    333-34024)).10
.12

Fourth Amendment to Lease
    Agreement dated June 7, 2004 between Koll/Intereal Bay Area
    and IGS Technologies, Inc. (incorporated by reference to
    Exhibit 10.15 to the Companys Registration Statement
    on
    Form S-1
    (File No.
    333-34024)).10
.13

Fifth Amendment to Lease Agreement
    dated May 17, 2005 between Koll/Intereal Bay Area and IGS
    Technologies, Inc. (incorporated by reference to
    Exhibit 10.15 to the Companys Registration Statement
    on
    Form S-1
    (File No.
    333-34024)). 60




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##### Table of Contents



ExhibitNumber

Description of
    Document10
.14#

Option Agreement between the
    Company and Eli Porat dated November 30, 2001 (incorporated
    by reference to Exhibit 10.18 to the Companys
    Quarterly Report on
    Form 10-Q
    for the period ended December 31, 2001).10
.15#

Option agreement between the
    Company and Eli Porat dated November 30, 2001 (incorporated
    by reference to Exhibit 10.19 to the Companys
    Quarterly Report on
    Form 10-Q
    for the period ended December 31, 2001).10
.16#

Agreement and Release of Claims by
    and between the Company and Jack Guedj dated January 31,
    2002 (incorporated by reference to Exhibit 10.21 to the
    Companys Annual Report on
    Form 10-K
    for the fiscal year ended March 31, 2002).21
.1

Subsidiaries of the Company
    (incorporated by reference to Exhibit 21.1 to the
    Companys Annual Report on
    Form 10-K
    for the fiscal year ended March 31, 2005).23
.1

Consent of BDO Seidman, LLP,
    Independent Registered Public Accounting Firm.23
.2

Consent of PricewaterhouseCoopers
    LLP, Independent Registered Public Accounting Firm.24
.1

Power of Attorney (previously
    filed)24
.2

Power of Attorney (See page 59)31
.1

Rule 13a-14(a)
    certification of Chief Executive Officer31
.2

Rule 13a-14(a)
    certification of Chief Financial Officer32
.1**

Statement of Chief Executive
    Officer under Section 906 of the Sarbanes-Oxley Act of 2002
    (18 U.S.C.ss.1350).32
.2**

Statement of Chief Financial
    Officer under Section 906 of the Sarbanes-Oxley Act of 2002
    (18 U.S.C.ss.1350).     **
    
    In accordance with Item 601(b)(32)(ii) of
    Regulation S-K
    and SEC Release Nos.
    33-8238 and
    34-47986,
    Final Rule: Managements Reports on Internal Control Over
    Financial Reporting and Certification of Disclosure in Exchange
    Act Periodic Reports, the certifications furnished in
    Exhibits 32.1 and 32.2 hereto are deemed to accompany this
    Form 10-K
    and will not be deemed filed for purpose of
    Section 18 of the Exchange Act. Such certifications will
    not be deemed to be incorporated by reference into any filing
    under the Securities Act or the Exchange Act, except to the
    extent that the registrant specifically incorporates it by
    reference.#
    
    Indicates management contact or compensatory plan or arrangement.
    
    Confidential treatment has been requested or granted with
    respect to certain portions of these agreements. 61