##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q/A
 (Amendment No. 2)
 Quarterly Report Pursuant To Section 13 or 15(d) of
the Securities Exchange Act of 1934
 For the Quarter Ended March 31, 2006
 Commission file number 0-50289
 Syntax-Brillian Corporation
  Delaware
    
    05-0567906(State or Other Jurisdiction
    
    (I.R.S. Employer Identification No.)of Incorporation or Organization)1600 North Desert Drive, Tempe, Arizona
    
    85281(Address of Principal Executive Offices)
    
    (Zip Code)
 (Registrants telephone number, including area code)
 þ o
  o o þ
 o þ
  CLASS
    
    OUTSTANDING AS OF MAY 12, 2006Common
    
    
    48,474,186Par value $.001 per share




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##### Table of Contents



EXPLANATORY NOTE




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##### 



SYNTAX-BRILLIAN CORPORATION
QUARTERLY REPORT ON FORM 10-Q/A
FOR QUARTER ENDED MARCH 31, 2006
TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTS:Condensed Consolidated Balance Sheets -
March 31, 2006 (unaudited) and June 30, 2005
    
    
    1Condensed Consolidated Statements of Operations (unaudited) -
Three Months and Nine Months Ended March 31, 2006 and 2005
    
    
    2Condensed Consolidated Statements of Cash Flows (unaudited) -
Nine Months Ended March 31, 2006 and 2005
    
    
    3Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    4ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
    
    
    20ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    31ITEM 4. CONTROLS AND PROCEDURES
    
    
    32PART II  OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGS
    
    
    33ITEM 1A. RISK FACTORS
    
    
    33ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    33ITEM 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    33ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    33ITEM 5. OTHER INFORMATION
    
    
    33ITEM 6. EXHIBITS
    
    
    34SIGNATURES
    
    
    35EX-31.1EX-31.2EX-32.1EX-32.2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 SYNTAX-BRILLIAN CORPORATION
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
  MARCH 31,
    
    
    JUNE 30,2006
    
    
    2005(unaudited)ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    13,978
    
    
    $
    1,804Accounts receivable and due from factor, net
    
    
    37,514
    
    
    
    15,573Inventories, net
    
    
    25,650
    
    
    
    15,139Deposit with Kolin (a related party)
    
    
    7,976
    
    
    
    847Deferred income taxes, current portion
    
    
    1,060
    
    
    
    2,060Other current assets
    
    
    1,765
    
    
    
    925Total current assets
    
    
    87,943
    
    
    
    36,348Property, plant and equipment, net
    
    
    11,545
    
    
    
    816Deferred income taxes, non-current portion
    
    
    1,000
    
    
    
    Investments
    
    
    694
    
    
    
    424Intangible assets, net
    
    
    21,051
    
    
    
    Goodwill
    
    
    6,990
    
    
    
    Other assets
    
    
    1,821
    
    
    
    46Total Assets
    
    $
    131,044
    
    
    $
    37,634LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Loan payable, bank
    
    $
    22,800
    
    
    $
    12,049Notes payable
    
    
    850
    
    
    
    461Accounts payable
    
    
    10,575
    
    
    
    9,287Accrued rebates payable
    
    
    7,215
    
    
    
    1,382Deferred warranty revenue
    
    
    4,045
    
    
    
    1,995Income taxes payable
    
    
    96
    
    
    
    1,510Other current liabilities
    
    
    5,698
    
    
    
    2,667Current portion of redeemable convertible preferred stock
    
    
    1,377
    
    
    
    Total Current Liabilities
    
    
    52,656
    
    
    
    29,351Long-term debt (net of $2,972 discount)
    
    
    3,388
    
    
    
    Redeemable, convertible preferred stock (net of $10,125 discount)
    
    
    4,498
    
    
    
    Deferred income taxes
    
    
    2,022
    
    
    
    49Stockholders Equity:Common stock, $.001 par value; 120,000,000 shares
authorized, 48,474,186 shares issued at March 31, 2006
    
    
    48
    
    
    
    7Additional paid-in capital
    
    
    82,669
    
    
    
    9,084Accumulated deficit
    
    
    (14,237
    )
    
    
    (857
    )Total stockholders equity
    
    
    68,480
    
    
    
    8,234Total Liabilities and Stockholders Equity
    
    $
    131,044
    
    
    $
    37,364
  1




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SYNTAX-BRILLIAN CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
   Three Months
    
    
    Nine MonthsEnded March 31,
    
    
    Ended March 31,2006
    
    
    2005
    
    
    2006
    
    
    2005Net sales
    
    $
    45,671
    
    
    $
    21,255
    
    
    $
    133,184
    
    
    $
    59,722Cost of sales
    
    
    41,514
    
    
    
    17,570
    
    
    
    116,573
    
    
    
    51,8234,157
    
    
    
    3,685
    
    
    
    16,611
    
    
    
    7,899Operating expenses:Selling, distribution, and marketing
    
    
    2,527
    
    
    
    926
    
    
    
    5,453
    
    
    
    1,995General and administrative
    
    
    4,060
    
    
    
    2,476
    
    
    
    13,646
    
    
    
    5,026Research and development
    
    
    1,936
    
    
    
    
    
    
    
    2,563
    
    
    
    8,523
    
    
    
    3,402
    
    
    
    21,662
    
    
    
    7,021Operating income (loss)
    
    
    (4,366
    )
    
    
    283
    
    
    
    (5,051
    )
    
    
    878Interest, net
    
    
    (7,046
    )
    
    
    (45
    )
    
    
    (8,329
    )
    
    
    (162
    )Net income (loss) before income taxes
    
    
    (11,412
    )
    
    
    238
    
    
    
    (13,380
    )
    
    
    716Income tax expense
    
    
    
    
    
    
    (95
    )
    
    
    
    
    
    
    (351
    )Net income (loss)
    
    $
    (11,412
    )
    
    $
    143
    
    
    $
    (13,380
    )
    
    $
    365Net income (loss) per common share:Basic and diluted
    
    $
    (0.26
    )
    
    $
    
    
    
    $
    (0.35
    )
    
    $
    0.01Weighted average number of common shares:Basic and diluted
    
    
    44,432
    
    
    
    30,462
    
    
    
    38,453
    
    
    
    29,708
  2




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SYNTAX-BRILLIAN CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  Nine Months EndedMarch 31,2006
    
    
    2005Cash Flows from Operating Activities:Net income (loss)
    
    $
    (13,380
    )
    
    $
    365Adjustments to reconcile net income (loss) to net cash used in operating activities:Depreciation and amortization
    
    
    1,469
    
    
    
    131Provision for inventory reserves
    
    
    (10
    )
    
    
    (335
    )Amortization of debenture discount and offering costs
    
    
    4,966
    
    
    
    Amortization of convertible preferred stock discount and costs
    
    
    1,601
    
    
    
    Stock compensation expense
    
    
    4,032
    
    
    
    Deferred income taxes
    
    
    
    
    
    
    (595
    )Provision for doubtful accounts
    
    
    49
    
    
    
    349Changes in assets and liabilities:Increase in accounts receivable and due from factor
    
    
    (21,713
    )
    
    
    (7,822
    )Increase in inventories
    
    
    (6,029
    )
    
    
    (126
    )Increase in other current assets
    
    
    (7,390
    )
    
    
    (3,074
    )Increase in other assets
    
    
    (307
    )
    
    
    Increase in accrued rebates payable
    
    
    5,833
    
    
    
    717Increase in deferred warranty revenue
    
    
    2,050
    
    
    
    757Increase (decrease) in income taxes payable
    
    
    (1,414
    )
    
    
    875Decrease in accounts payable
    
    
    (1,556
    )
    
    
    (376
    )Increase (decrease) in other accrued liabilities
    
    
    864
    
    
    
    (252
    )Net cash used in operating activities
    
    
    (30,935
    )
    
    
    (9,386
    )Cash Flows from Investing Activities:Purchases of property, plant, and equipment
    
    
    (974
    )
    
    
    (605
    )Merger costs
    
    
    (2,081
    )
    
    
    Investment in joint venture
    
    
    (270
    )
    
    
    Restricted cash
    
    
    
    
    
    
    500Net cash used in investing activities
    
    
    (3,325
    )
    
    
    (105
    )Cash Flows from Financing Activities:Proceeds of redeemable convertible preferred stock offering
    
    
    14,822
    
    
    
    Proceeds of stock offering
    
    
    14,750
    
    
    
    Stock issued pursuant to Employee Stock Purchase Plan
    
    
    85
    
    
    
    Net proceeds from bank loan payable
    
    
    10,751
    
    
    
    6,999Proceeds from issuance of notes payable
    
    
    850
    
    
    
    Repayments of long-term debt and notes payable
    
    
    (461
    )
    
    
    (1,786
    )Net transfers from Syntax Groups Corporation
    
    
    4,200
    
    
    
    3,945Warrants exercised
    
    
    1,367
    
    
    
    Stock options exercised
    
    
    70
    
    
    
    Net cash provided by financing activities
    
    
    46,434
    
    
    
    9,158Net increase (decrease) in cash and cash equivalents
    
    
    12,174
    
    
    
    (333
    )Cash and cash equivalents, beginning of period
    
    
    1,804
    
    
    
    769Cash and cash equivalents, end of period
    
    $
    13,978
    
    
    $
    436Supplemental Cash Flow Information:Cash paid for interest
    
    $
    1,179
    
    
    $
    165Cash paid for income taxes
    
    $
    1,645
    
    
    $
    70
  3




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SYNTAX-BRILLIAN CORPORATION
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 Note A
     4




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Note B
 Basis of Presentation
 Use of Estimates. .
 Fair Value of Financial Instruments
 Reclassification.
 Cash and Cash Equivalents
 Accounts Receivable / Due from Factor.
 Inventories.
 5




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Vendor Allowances.
 Property and Equipment
 YearsMachinery and equipment
    
    3  5Office furniture and fixtures
    
    
    5Building improvements
    
    
    4
  Capitalized Software Costs.
 Goodwill and Intangibles.
 Investments.
 Impairment of Long-Lived Assets.
 Deferred Income Taxes. .
 Warranties.
 6




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Stock-Based Compensation.
 Revenue Recognition
 Shipping and Handling Costs.
 Advertising Costs. .
 Segment Reporting. on
 Recent Accounting Pronouncements.
 7




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Note C
     8




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Balance SheetIncrease toIncrease
    
    
    DeferredTotal
    
    
    
    
    
    
    (Decrease) to
    
    
    WarrantyPurchases
    
    
    Cost of Sales
    
    
    Inventory
    
    
    RevenueNine months ended March 31, 2005Purchases
    
    $
    69,510
    
    
    $
    60,599
    
    
    $
    8,911
    
    
    $
    Rebates, based on percentage of purchases:Market development
    
    
    (2,998
    )
    
    
    (2,808
    )
    
    
    (190
    )
    
    
    Technical know how
    
    
    (2,320
    )
    
    
    (2,093
    )
    
    
    (228
    )
    
    
    Volume incentive
    
    
    (1,762
    )
    
    
    (1,572
    )
    
    
    (190
    )
    
    
    Excess warranty expense reimbursements
    
    
    (1,254
    )
    
    
    (496
    )
    
    
    
    
    
    
    (758
    )Price protection
    
    
    (18,610
    )
    
    
    (18,610
    )
    
    
    
    
    
    
    Price protection guaranteed minimum
    
    
    (1,226
    )
    
    
    
    
    
    
    (1,226
    )
    
    
    Net activity, nine months ended March 31, 2005
    
    
    41,340
    
    
    
    35,020
    
    
    
    7,078
    
    
    
    (758
    )Prior year balances charged to cost of sales
    
    
    5,072
    
    
    
    5,072
    
    
    
    
    
    
    
    Balance, March 31, 2005
    
    $
    46,412
    
    
    $
    40,092
    
    
    $
    7,078
    
    
    $
    (758
    )Nine months ended March 31, 2006Purchases
    
    $
    169,789
    
    
    $
    142,427
    
    
    $
    27,362
    
    
    $
    Rebates, based on percentage of purchases:Market development
    
    
    (4,627
    )
    
    
    (4,048
    )
    
    
    (579
    )
    
    
    Technical know how
    
    
    (5,708
    )
    
    
    (4,857
    )
    
    
    (851
    )
    
    
    Volume incentive
    
    
    (5,090
    )
    
    
    (4,452
    )
    
    
    (638
    )
    
    
    Excess warranty expense reimbursements
    
    
    (5,265
    )
    
    
    (3,215
    )
    
    
    
    
    
    
    (2,050
    )Price protection
    
    
    (47,741
    )
    
    
    (47,741
    )
    
    
    
    
    
    
    Price protection guaranteed minimum
    
    
    (4,364
    )
    
    
    
    
    
    
    (4,364
    )
    
    
    Net activity, nine months ended March 31, 2006
    
    
    96,994
    
    
    
    78,114
    
    
    
    20,930
    
    
    
    (2,050
    )Prior year balances charged to cost of sales
    
    
    17,203
    
    
    
    17,203
    
    
    
    
    
    
    
    Balance, March 31, 2006
    
    $
    114,197
    
    
    $
    95,317
    
    
    $
    20,930
    
    
    $
    (2,050
    )
   9




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Note D
    March 31,
    
    
    June 30,2006
    
    
    2005Due from factor
    
    $
    24,008
    
    
    $
    8,553Accounts receivable not assigned to factor
    
    
    13,552
    
    
    
    7,180Other receivables
    
    
    163
    
    
    
    766Allowance for doubtful accounts
    
    
    (209
    )
    
    
    (160
    )$
    37,514
    
    
    $
    16,339
  Note E
 March 31,
    
    
    June 30,2006
    
    
    2005Raw materials
    
    $
    3,569
    
    
    $
    1,429Work-in-process
    
    
    354
    
    
    
    Finished goods
    
    
    21,727
    
    
    
    13,710$
    25,650
    
    
    $
    15,139
  10




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Note F
 March 31,
    
    
    June 30,2006
    
    
    2005Leasehold and building improvements
    
    $
    1,139
    
    
    $
    180Machinery and equipment
    
    
    10,690
    
    
    
    550Software
    
    
    340
    
    
    
    252Furniture and fixtures
    
    
    313
    
    
    
    70Projects in progress
    
    
    349
    
    
    
    12,831
    
    
    
    1,052Less accumulated depreciation
    
    
    (1,286
    )
    
    
    (236
    )$
    11,545
    
    
    $
    816
 Note G
   Note H
    Nine Months EndedMarch 31,2006
    
    2005Revenue
    
    $
    133,857
    
    
    $
    61,656Net loss
    
    $
    (29,554
    )
    
    $
    (27,545
    )Net loss per share
    
    $
    (0.77
    )
    
    $
    (0.99
    )
 11




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Fair value of Brillian Stock
    
    $
    29,302Merger related costs
    
    
    4,709Total purchase price
    
    $
    34,011Cash
    
    $
    1,035Accounts receivable
    
    
    277Inventories
    
    
    4,472Other current assets
    
    
    579Property, plant and equipment
    
    
    10,805Intangible assets
    
    
    21,470Other assets
    
    
    921Total assets acquired
    
    
    39,559Less liabilities assumed
    
    
    (12,538
    )Fair value of net assets acquired
    
    
    27,021Goodwill
    
    
    6,990Total purchase price
    
    $
    34,011
  March 31,
    
    
    Amortizablee2006
    
    
    LifeLCoS trade mark and trade names
    
    $
    1,208
    
    
    7.5
yearsBrillian trade mark and trade name
    
    
    148
    
    
    4.0
yearsPatented technology
    
    
    20,114
    
    
    19.0
years$
    21,470Less accumulated amortization
    
    
    (419
    )$
    21,051
  Note I
  a)
    
    $18 million limitation for the issuance of letters of credit, subject to the borrowing base;b)
    
    $9 million for trust receipts and acceptances up to 90 days, subject to the borrowing base;c)
    
    $10 million for trust receipts and general working capital for up to 60 days, subject to the borrowing base;d)
    
    The amounts in (a) plus (b) shall not exceed $18 million;e)
    
    The amounts in (a) plus (b) plus (c) shall not exceed $28 million; andf)
    
    The borrowings under the facility bear interest at Preferred Banks prime rate plus 0.5% (8.25% at March
31, 2006).
 12




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Note J
  Note K
   LCD
    
    LCoS
    
    TotalThree months ended March 31, 2006Net sales
    
    $
    44,591
    
    
    $
    1,080
    
    
    $
    45,671Operating income (loss)
    
    $
    1,323
    
    
    $
    (5,689
    )
    
    $
    (4,366
    )Three months ended March 31, 2005Net sales
    
    $
    21,255
    
    
    $
    
    
    
    $
    21,255Operating income (loss)
    
    $
    283
    
    
    $
    
    
    
    $
    283Nine months ended March 31, 2006Net sales
    
    $
    131,810
    
    
    $
    1,374
    
    
    $
    133,184Operating income (loss)
    
    $
    3,413
    
    
    $
    (8,464
    )
    
    $
    (5,051
    )Nine months ended March 31, 2005Net sales
    
    $
    59,722
    
    
    $
    
    
    
    $
    59,722Operating income (loss)
    
    $
    878
    
    
    $
    
    
    
    $
    878
  13




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NorthAmerica
    
    Asia
    
    Europe
    
    TotalThree months ended March 31, 2006Net sales
    
    $
    43,745
    
    
    $
    1,840
    
    
    $
    86
    
    
    $
    45,671Three months ended March 31, 2005Net sales
    
    $
    18,184
    
    
    $
    3,071
    
    
    $
    
    
    
    $
    21,255Nine months ended March 31, 2006Net sales
    
    $
    120,147
    
    
    $
    12,915
    
    
    $
    122
    
    
    $
    133,184Nine months ended March 31, 2005Net sales
    
    $
    48,696
    
    
    $
    11,026
    
    
    $
    
    
    
    $
    59,722
 Note L
     14




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Note M
      Three Months Ended
    
    Nine Months EndedMarch 31,
    
    March 31,2006
    
    2005
    
    2006
    
    2005Expected life (in years)
    
    
    5
    
    
    
    
    
    
    
    5
    
    
    
    Expected volatility
    
    
    60
    %
    
    
    
    
    
    
    117
    %
    
    
    Risk-free interest rate
    
    
    4.79
    %
    
    
    
    
    
    
    3.93
    %
    
    
    Dividend yield
    
    
    N/A
    
    
    
    
    
    
    
    N/A
    
    
    
    
 15




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Options OutstandingWeightedAverageExerciseNumber of
    
    Price PerShares
    
    ShareOutstanding at June 30, 2005
    
    
    
    
    
    
    Granted
    
    
    1,670,102
    
    
    $
    2.19Added as result of merger
    
    
    1,410,091
    
    
    $
    6.81Exercised
    
    
    35,165
    
    
    $
    2.06Forfeited and expired
    
    
    62,394
    
    
    $
    5.99Outstanding at March 31, 2006
    
    
    2,982,634
    
    
    $
    4.30Exercisable at March 31, 2006
    
    
    2,411,127
    
    
    $
    4.58
 Note N
     16




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Note O
  March 31,
    
    
    June 30,2006
    
    
    2005April 2005 7% Convertible Debentures maturing April 20, 2008, convertible at $1.57 per share
    
    $
    985
    
    
    $
    April 2005 9% Senior Secured Debentures maturing April 20, 2008, secured by a lien on certain
assets
    
    
    2,000
    
    
    
    July 2005 4% Convertible Debentures maturing July 12, 2008, convertible at $2.63 per share
    
    
    1,300
    
    
    
    July 2005 9% Senior Secured Debentures maturing July 12, 2008, secured by a lien on certain
assets
    
    
    2,075
    
    
    
    6,360
    
    
    
    Less:Discount and beneficial conversion feature on convertible debentures
    
    
    (1,993
    )
    
    
    Discount on secured debentures
    
    
    (979
    )
    
    
    Total
    
    $
    3,388
    
    
    $
    
  Note P
      17




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Note Q
  Note R
  Shares of CommonStock Issuable
    
    
    Per ShareExpiration
    
    
    Under
    
    
    ExerciseWarrants relating to issuance of:
    
    Date
    
    
    Warrants
    
    
    PriceApr. 2005 7% Convertible Debentures
    
    
    10/10/2010
    
    
    
    743,837
    
    
    $
    1.57Jul. 2005 4% Convertible Debentures
    
    
    01/08/2011
    
    
    
    770,571
    
    
    $
    2.63Jul. 2005 9% Secured Debentures
    
    
    01/08/2011
    
    
    
    415,000
    
    
    $
    2.63Dec. 2005 Convertible Preferred Stock
    
    
    06/27/2011
    
    
    
    1,500,000
    
    
    $
    5.00Jan. 2006 Convertible Preferred Stock
    
    
    07/02/2011
    
    
    
    100,000
    
    
    $
    5.00Mar. 2006 Common Stock
    
    
    09/26/2010
    
    
    
    750,000
    
    
    $
    5.00Total Warrants Outstanding:
    
    
    
    
    
    
    4,279,408
 Note S
  18




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   Overview
    19




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##### Table of Contents



Critical Accounting Policies and Estimates
     20




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##### Table of Contents



Results of Operations
 Three months ended March 31, 2006 compared to three months ended March 31, 2005
 Net Sales.
 21




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##### Table of Contents



Cost of Sales.
     22




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##### Table of Contents



Selling, Distribution, and Marketing Expense.
 General and Administrative Expense.
 Research and Development Expense.
 Interest Expense .
 23




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##### Table of Contents



Net Income (Loss).
 Nine months ended March 31, 2006 compared to nine months ended March 31, 2005
 Net Sales.
    Cost of Sales.
    24




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##### Table of Contents



Selling, Distribution, and Marketing Expense.
 25




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##### Table of Contents



General and Administrative Expense.
 Research and Development Expense.
 Interest Expense .
 Net Income (Loss).
 Liquidity and Capital Resources
      26




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27




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##### Table of Contents



a)
    
    $17,500,000 limitation for the issuance of letters of credit not subject to the borrowing base;b)
    
    $15,000,000 for trust receipts and acceptances up to 90 days subject to the borrowing base;c)
    
    $2,000,000 for trust receipts and general working capital for up to 60 days subject to the
borrowing base;d)
    
    The amounts in (b) plus (c) shall not exceed $15,000,000;e)
    
    The amounts in (a) plus (b) plus (c) shall not exceed $17,500,000; andf)
    
    Interest to be charged at Preferred Banks prime rate (6.25% at June 30, 2005) plus 0.5%.
   a)
    
    $10,000,000 limitation for the issuance of letters of credit not subject to the borrowing base;b)
    
    $5,000,000 for trust receipts and acceptances up to 90 days subject to the borrowing base;c)
    
    $10,000,000 for trust receipts and general working capital for up to 60 days subject to the
borrowing base;d)
    
    The amounts in (a) plus (b) shall not exceed $10,000,000;e)
    
    The amounts in (a) plus (b) plus (c) shall not exceed $20,000,000; andf)
    
    Interest to be charged at Preferred Banks prime rate (7.25% at September 28, 2005) plus 0.5%.
  a)
    
    $18,000,000 limitation for the issuance of letters of credit not subject to the borrowing base;b)
    
    $9,000,000 for trust receipts and acceptances up to 90 days subject to the borrowing base;c)
    
    $10,000,000 for trust receipts and general working capital for up to 60 days subject to the
borrowing base;d)
    
    The amounts in (a) plus (b) shall not exceed $18,000,000;e)
    
    The amounts in (a) plus (b) plus (c) shall not exceed $28,000,000; andf)
    
    Interest to be charged at Preferred Banks prime rate (8.25% at March 31, 2006) plus .05% .
  28




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Aggregate Contractual Obligations and Commercial Commitments
  Payments due by periodLessThan
    
    1-3
    
    4-5
    
    More than 5Total
    
    1 Year
    
    Years
    
    Years
    
    YearsLong-term debt
    
    $
    6,360
    
    
    
    
    
    
    
    6,360
    
    
    
    
    
    
    
    Loan payable  bank
    
    $
    22,800
    
    
    
    22,800
    
    
    
    
    
    
    
    Redeemable convertible preferred stock
    
    $
    16,000
    
    
    
    3,750
    
    
    
    12,250
    
    
    
    
    
    
    
    Facilities leases
    
    $
    1,217
    
    
    
    512
    
    
    
    705
    
    
    
    
    
    
    
    Purchase orders
    
    $
    43,026
    
    
    
    43,026
    
    
    
    
    
    
    
    
    
    
    
    Investment commitments
    
    $
    210
    
    
    
    210
    
    
    
    
    
    
    
    
    
    
    
    
 Off Balance Sheet Arrangements
  Impact of Recently Issued Standards
   29




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Risk
  Foreign Currency Risk
  Credit Risk
  Equity Price Risk
  
 ITEM 4. CONTROLS AND PROCEDURES
  30




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##### Table of Contents



PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  Proposal 1
 Votes in Favor
    
    Votes Against
    
    Abstain
    
    Broker Non-Votes36,115,443
    
    
    1,698,921
    
    
    
    15,436
    
    
    
    
 
 ITEM 5. OTHER INFORMATION
  31




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ITEM 6. EXHIBITS
 ExhibitNumber
    
    Exhibit31.1
    
    Rule 13a-14(a)/15-14(a) Certification of Chief Executive
Officer31.2
    
    Rule 13a-14(a)/15-14(a) Certification of Chief Financial
Officer32.1
    
    Section 1350 Certification of Chief Executive Officer32.2
    
    Section 1350 Certification of Chief Financial Officer
 32




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##### Table of Contents



SIGNATURES
  SYNTAX-BRILLIAN CORPORATIONDate: October 20, 2006
    By:
    /s/ Vincent F. Sollitto Jr.Vincent F. Sollitto, Jr.Chief Executive OfficerDate: October 20, 2006
    By:
    /s/ Wayne A. PrattWayne A. PrattExecutive Vice President, Chief Financial Officer, Secretary, and Treasurer 33




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Exhibit31.1
    
    Rule 13a-14(a)/15-14(a) Certification of Chief Executive Officer31.2
    
    Rule 13a-14(a)/15-14(a) Certification of Chief Financial Officer32.1
    
    Section 1350 Certification of Chief Executive Officer32.2
    
    Section 1350 Certification of Chief Financial Officer