##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 Quarterly Report Pursuant To Section 13 or 15(d) of
the Securities Exchange Act of 1934
 For the Quarter Ended March 31, 2007
 Commission file number 0-50289
 
 Syntax-Brillian Corporation
  Delaware
    
    05-0567906(State or Other Jurisdiction 
of Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)1600 North Desert Drive, Tempe, Arizona
    
    85281(Address of Principal Executive Offices)
    
    (Zip Code)
  (Registrants telephone number, including area code)
 þ o
  o þ o
 o þ
  CLASS
    
    OUTSTANDING AS OF MAY 10, 2007Common
    
    62,776,047Par value $.001 per share




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##### 



SYNTAX-BRILLIAN CORPORATION
QUARTERLY REPORT ON FORM 10-Q
 FOR QUARTER ENDED MARCH 31, 2007
 TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTS:Condensed Consolidated Balance Sheets  March 31, 2007 (unaudited) and June 30, 2006
    
    
    1Condensed Consolidated Statements of Operations (unaudited)  Three and Nine-Months Ended March 31, 2007 and 2006
    
    
    2Condensed Consolidated Statements of Cash Flows (unaudited)  Nine-Months Ended March 31, 2007 and 2006
    
    
    3Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    4ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    25ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    35ITEM 4. CONTROLS AND PROCEDURES
    
    
    36PART II  OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGS
    
    
    36ITEM 1A. RISK FACTORS
    
    
    36ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    49ITEM 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    50ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    50ITEM 5. OTHER INFORMATION
    
    
    50ITEM 6. EXHIBITS
    
    
    61SIGNATURES
    
    
    62EX-10.38EX-10.49EX-10.53EX-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 30,2007
    
    
    2006(unaudited)ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    16,946
    
    
    $
    7,375Accounts receivable and due from factor, net
    
    
    220,978
    
    
    
    50,829Inventories
    
    
    39,762
    
    
    
    13,151Deposit with Kolin (a related party)
    
    
    39,574
    
    
    
    5,067Deferred tax asset
    
    
    2,666
    
    
    
    2,666Other current assets
    
    
    2,896
    
    
    
    1,370Total Current Assets
    
    
    322,822
    
    
    
    80,458Fixed assets, net
    
    
    15,466
    
    
    
    16,703Long-term investments
    
    
    1,290
    
    
    
    1,307Intangible assets, net
    
    
    37,216
    
    
    
    20,737Goodwill
    
    
    27,435
    
    
    
    6,990Other assets
    
    
    480
    
    
    
    1,461Total Assets
    
    $
    404,709
    
    
    $
    127,656LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Loans payable, bank
    
    $
    73,900
    
    
    $
    30,800Notes payable
    
    
    
    
    
    
    650Accounts payable
    
    
    125,884
    
    
    
    3,924Accrued rebates payable
    
    
    14
    
    
    
    4,043Deferred warranty revenue
    
    
    18,195
    
    
    
    4,551Income taxes payable
    
    
    4,780
    
    
    
    96Other current liabilities
    
    
    17,026
    
    
    
    5,540Current portion of redeemable convertible preferred stock
(net of $750 and $3,390 discount)
    
    
    2,864
    
    
    
    3,432Total Current Liabilities
    
    
    242,663
    
    
    
    53,036Long-term debt (net of $2,635 discount)
    
    
    
    
    
    
    3,758Redeemable convertible preferred stock (net of $3,390 discount)
    
    
    
    
    
    
    3,432Deferred income taxes
    
    
    2,628
    
    
    
    2,628Stockholders Equity:Common stock, $.001 par value; 120,000,000 shares
authorized, 62,502,792 and 48,485,912 shares issued and
outstanding at March 31, 2007 and June 30, 2006
respectively
    
    
    63
    
    
    
    49Additional paid-in capital
    
    
    157,674
    
    
    
    84,489Retained
earnings (accumulated deficit)
    
    
    1,681
    
    
    
    (19,736
    )Total stockholders equity
    
    
    159,418
    
    
    
    64,802Total Liabilities and Stockholders Equity
    
    $
    404,709
    
    
    $
    127,656
  1




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SYNTAX-BRILLIAN CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
   Three Months
    
    
    Nine MonthsEnded March 31,
    
    
    Ended March 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Net sales
    
    $
    162,880
    
    
    $
    45,671
    
    
    $
    492,378
    
    
    $
    133,184Cost of sales
    
    
    133,385
    
    
    
    41,514
    
    
    
    409,430
    
    
    
    116,573Gross Profit
    
    
    29,495
    
    
    
    4,157
    
    
    
    82,948
    
    
    
    16,611Operating expenses:Selling, distribution, and marketing
    
    
    5,652
    
    
    
    2,527
    
    
    
    14,637
    
    
    
    5,453General and administrative
    
    
    9,442
    
    
    
    4,060
    
    
    
    21,409
    
    
    
    13,646Research and development
    
    
    1,475
    
    
    
    1,936
    
    
    
    4,825
    
    
    
    2,563Total operating expense
    
    
    16,569
    
    
    
    8,523
    
    
    
    40,871
    
    
    
    21,662Operating income (loss)
    
    
    12,926
    
    
    
    (4,366
    )
    
    
    42,077
    
    
    
    (5,051
    )Interest expense
    
    
    (4,629
    )
    
    
    (7,046
    )
    
    
    (15,316
    )
    
    
    (8,329
    )Interest income and other income (expense)
    
    
    (320
    )
    
    
    
    
    
    
    (159
    )
    
    
    Total non-operating income (expense)
    
    
    (4,949
    )
    
    
    (7,046
    )
    
    
    (15,475
    )
    
    
    (8,329
    )Net income (loss) before income taxes
    
    
    7,977
    
    
    
    (11,412
    )
    
    
    26,602
    
    
    
    (13,380
    )Income tax expense
    
    
    (2,484
    )
    
    
    
    
    
    
    (5,184
    )
    
    
    Net income (loss)
    
    $
    5,493
    
    
    $
    (11,412
    )
    
    $
    21,418
    
    
    $
    (13,380
    )Net income (loss) per common share:Basic
    
    $
    0.09
    
    
    $
    (0.26
    )
    
    $
    0.39
    
    
    $
    (0.35
    )Diluted
    
    $
    0.09
    
    
    $
    (0.26
    )
    
    $
    0.37
    
    
    $
    (0.35
    )Weighted average number of common shares:Basic
    
    
    59,972
    
    
    
    44,432
    
    
    
    54,304
    
    
    
    38,453Diluted
    
    
    64,228
    
    
    
    44,432
    
    
    
    58,761
    
    
    
    38,453
  2




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SYNTAX-BRILLIAN CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  Nine Months EndedMarch 31,2007
    
    
    2006Operating Activities:Net income (loss)
    
    $
    21,418
    
    
    $
    (13,380
    )Adjustments to reconcile net income (loss) to net cash used in operating activities:Depreciation and amortization
    
    
    4,521
    
    
    
    1,469Provision
for inventory losses
    
    
    9,581
    
    
    
    9,401Provision for doubtful accounts
    
    
    4,286
    
    
    
    49Amortization of debenture discount and offering costs
    
    
    3,016
    
    
    
    4,966Amortization
of redeemable convertible preferred stock discount and costs
    
    
    7,928
    
    
    
    1,601Stock compensation expense
    
    
    2,647
    
    
    
    4,032Gain on sale of assets
    
    
    (6
    )
    
    
    Gain on sale of investment
    
    
    (176
    )
    
    
    Joint venture loss
    
    
    377
    
    
    
    Income tax expense recorded as a reduction of goodwill
    
    
    500Changes in assets and liabilities:Increase in accounts receivable and due from factor
    
    
    (155,200
    )
    
    
    (21,173
    )Increase in inventories
    
    
    (16,387
    )
    
    
    (15,440
    )Decrease (increase) in other current assets
    
    
    5,570
    
    
    
    (7,390
    )Increase in other assets
    
    
    (186
    )
    
    
    (307
    )Increase (decrease) in accrued rebates payable
    
    
    (4,029
    )
    
    
    5,833Increase in deferred warranty revenue
    
    
    13,644
    
    
    
    2,050Increase (decrease) in income taxes payable
    
    
    4,684
    
    
    
    (1,414
    )Increase (decrease) in accounts payable
    
    
    32,695
    
    
    
    (1,556
    )Increase in other accrued liabilities
    
    
    6,800
    
    
    
    864Net cash used in operating activities
    
    
    (58,317
    )
    
    
    (30,935
    )Investing Activities:Fixed assets purchased
    
    
    (1,274
    )
    
    
    (974
    )Fixed assets sold
    
    
    25
    
    
    
    Cash acquired in acquisition of Vivitar
    
    
    6,024Long-term investments sold
    
    
    600
    
    
    
    Long-term investments purchased
    
    
    (784
    )
    
    
    (2,351
    )License purchased
    
    
    (5,551
    )
    
    
    Net cash used in investing activities
    
    
    (960
    )
    
    
    (3,325
    )Financing Activities:Proceeds from issuance of common stock
    
    
    25,500
    
    
    
    14,822Proceeds of redeemable convertible preferred stock offering
    
    
    
    
    
    
    14,750Stock issued pursuant to Employee Stock Purchase Plan
    
    
    205
    
    
    
    85Net proceeds from bank loan payable
    
    
    43,100
    
    
    
    10,751Proceeds of long-term debt and notes payable
    
    
    
    
    
    
    850Repayment of long-term debt and notes payable
    
    
    (4,759
    )
    
    
    (461
    )Net transfers from Syntax Groups Corporation
    
    
    
    
    
    
    4,200Proceeds from warrants exercised
    
    
    3,004
    
    
    
    1,367Proceeds from stock options exercised
    
    
    1,798
    
    
    
    70Net cash provided by financing activities
    
    
    68,848
    
    
    
    46,434Net increase in cash and cash equivalents
    
    
    9,571
    
    
    
    12,174Cash and cash equivalents, beginning of period
    
    
    7,375
    
    
    
    1,804Cash and cash equivalents, end of period
    
    $
    16,946
    
    
    $
    13,978Supplemental Cash Flow Information:Cash paid for interest
    
    $
    3,517
    
    
    $
    1,179Cash paid for income taxes
    
    $
    
    
    
    $
    1,645Supplemental Schedule of Non-cash Investing Activities:Increase in deposits with Kolin and its related accounts payable
    
    $
    39,574
    
    
    $
    Stock issued for Vivitar acquisition
    
    $
    26,000
    
    
    $
    
  3




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




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Use of Estimates.
 Fair Value of Financial Instruments
 Reclassification
 Cash and Cash Equivalents
 Accounts Receivable / Due from Factor
 Inventories
 Vendor Allowances
 Fixed Assets
 5




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Estimated Useful LifeMachinery and equipment
    
    3  5 yearsOffice furniture and fixtures
    
    5 yearsBuilding improvements
    
    4 years
  Capitalized Software Costs
 Goodwill and Intangibles
 Investments
 Impairment of Long-Lived Assets
 Deferred Income Taxes
 Warranties
 Stock-Based Compensation
 6




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Revenue Recognition
 Shipping and Handling Costs
 Advertising Costs
 Segment Reporting
 Recent Accounting Pronouncements
   7




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8




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Note B
      9




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Income Statement
    
    
    Balance SheetIncrease toIncrease
    
    
    DeferredTotal
    
    
    
    
    
    
    (decrease) to
    
    
    WarrantyThree Months Ended March 31, 2006:
    
    Purchases
    
    
    Cost of Sales
    
    
    Inventory
    
    
    RevenuePurchases
    
    $
    53,064
    
    
    $
    57,086
    
    
    $
    (4,022
    )
    
    $
    Rebates, based on percentage of purchases:Market development
    
    
    (1,176
    )
    
    
    (1,352
    )
    
    
    176
    
    
    
    Technical development
    
    
    (1,566
    )
    
    
    (1,622
    )
    
    
    56
    
    
    
    Volume incentive
    
    
    (1,293
    )
    
    
    (1,486
    )
    
    
    193
    
    
    
    Excess warranty expense reimbursements
    
    
    (1,727
    )
    
    
    (1,327
    )
    
    
    
    
    
    
    (400
    )Price protection
    
    
    (18,502
    )
    
    
    (18,502
    )
    
    
    
    
    
    
    Price protection guaranteed minimum
    
    
    567
    
    
    
    
    
    
    
    567
    
    
    
    Net activity, three months ended March 31, 2006
    
    
    29,367
    
    
    
    32,797
    
    
    
    (3,030
    )
    
    
    (400
    )Prior period purchases charged to cost of sales
    
    
    3,077
    
    
    
    3,077
    
    
    
    
    
    
    
    Balance March 31, 2006
    
    $
    32,444
    
    
    $
    35,874
    
    
    $
    (3,030
    )
    
    $
    (400
    )
 Income Statement
    
    
    Balance SheetIncrease toIncrease
    
    
    DeferredTotal
    
    
    
    
    
    
    (decrease) to
    
    
    WarrantyThree Months Ended March 31, 2007:
    
    Purchases
    
    
    Cost of Sales
    
    
    Inventory
    
    
    RevenuePurchases
    
    $
    137,749
    
    
    $
    152,595
    
    
    $
    (14,846
    )
    
    $
    Rebates, based on percentage of purchases:Market development
    
    
    (5,721
    )
    
    
    (5,913
    )
    
    
    192
    
    
    
    Technical development
    
    
    (6,865
    )
    
    
    (7,096
    )
    
    
    231
    
    
    
    Volume incentive
    
    
    (6,293
    )
    
    
    (6,505
    )
    
    
    212
    
    
    
    Excess warranty expense reimbursements
    
    
    (13,538
    )
    
    
    (11,694
    )
    
    
    
    
    
    
    (1,844
    )Price Protection
    
    
    (13,613
    )
    
    
    (13,613
    )
    
    
    
    
    
    
    Royalty
    
    
    (2,453
    )
    
    
    (2,453
    )
    
    
    
    
    
    
    Net
activity, three months ended March 31, 2007
    
    
    89,266
    
    
    
    105,321
    
    
    
    (14,211
    )
    
    
    (1,844
    )Prior period purchases charged to cost of sales
    
    
    9,402
    
    
    
    9,402
    
    
    
    
    
    
    
    Balance March 31, 2007
    
    $
    98,668
    
    
    $
    114,723
    
    
    $
    (14,211
    )
    
    $
    (1,844
    )
 Income Statement
    
    
    Balance SheetIncrease toIncrease
    
    
    DeferredTotal
    
    
    
    
    
    
    (decrease) to
    
    
    WarrantyNine Months Ended March 31, 2006:
    
    Purchases
    
    
    Cost of Sales
    
    
    Inventory
    
    
    RevenuePurchases
    
    $
    169,789
    
    
    $
    142,427
    
    
    $
    27,362
    
    
    $
    Rebates, based on percentage of purchases:Market development
    
    
    (4,627
    )
    
    
    (4,048
    )
    
    
    (579
    )
    
    
    Technical development
    
    
    (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 period purchases charged to cost of sales
    
    
    17,203
    
    
    
    17,203
    
    
    
    
    
    
    
    Balance March 31, 2006
    
    $
    114,197
    
    
    $
    95,317
    
    
    $
    20,930
    
    
    $
    (2,050
    )
 10




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##### Table of Contents



Income Statement
    
    
    Balance SheetIncrease toIncrease
    
    
    DeferredTotal
    
    
    
    
    
    
    (decrease) to
    
    
    WarrantyNine Months Ended March 31, 2007:
    
    Purchases
    
    
    Cost of Sales
    
    
    Inventory
    
    
    RevenuePurchases
    
    $
    456,899
    
    
    $
    437,057
    
    
    $
    19,842
    
    
    $
    Rebates, based on percentage of purchases:Market development
    
    
    (11,533
    )
    
    
    (11,181
    )
    
    
    (352
    )
    
    
    Technical development
    
    
    (13,839
    )
    
    
    (13,417
    )
    
    
    (422
    )
    
    
    Volume incentive
    
    
    (12,686
    )
    
    
    (12,299
    )
    
    
    (387
    )
    
    
    Excess warranty expense reimbursements
    
    
    (26,403
    )
    
    
    (12,969
    )
    
    
    
    
    
    
    (13,434
    )Price Protection
    
    
    (38,313
    )
    
    
    (38,313
    )
    
    
    
    
    
    
    Royalty
    
    
    (2,453
    )
    
    
    (2,453
    )
    
    
    
    
    
    
    Net activity, nine months ended March 31, 2007
    
    
    351,672
    
    
    
    346,425
    
    
    
    18,681
    
    
    
    (13,434
    )Prior period purchases charged to cost of sales
    
    
    23,146
    
    
    
    23,146
    
    
    
    
    
    
    
    Balance March 31, 2007
    
    $
    374,818
    
    
    $
    369,571
    
    
    $
    18,681
    
    
    $
    (13,434
    )
 Note C
    March 31,
    
    
    June 30,2007
    
    
    2006Due from factor, net
    
    $
    12,049
    
    
    $
    17,049Accounts receivable not assigned
to factor, net
    
    
    211,828
    
    
    
    34,097Other receivables
    
    
    235
    
    
    
    77Allowance for doubtful
accounts
    
    
    (3,134
    )
    
    
    (394
    )Total accounts receivable and due
from factor
    
    $
    220,978
    
    
    $
    50,829
 11




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Note D
 March 31,
    
    
    June 30,2007
    
    
    2006Raw materials
    
    $
    8,002
    
    
    $
    2,468Work-in-process
    
    
    3
    
    
    
    425Finished goods
    
    
    31,757
    
    
    
    10,258Total inventories
    
    $
    39,762
    
    
    $
    13,151
  Note E
   Note F
 March 31,
    
    
    June 30,2007
    
    
    2006Leasehold and building improvements
    
    $
    1,253
    
    
    $
    1,163Machinery and equipment
    
    
    17,039
    
    
    
    11,068Software
    
    
    434
    
    
    
    348Furniture and fixtures
    
    
    2,361
    
    
    
    292Equipment not yet placed in service
    
    
    843
    
    
    
    5,810Total fixed assets
    
    
    21,930
    
    
    
    18,681Less accumulated depreciation
    
    
    (6,464
    )
    
    
    (1,978
    )Total net fixed assets
    
    $
    15,466
    
    
    $
    16,703
 Note G
  12




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Note H
    Nine MonthsEndedMarch 31, 2006Net sales
    
    $
    133,857Net loss
    
    $
    (29,554
    )Net loss per common share
    
    $
    (0.77
    )
 13




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##### Table of Contents



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
   Three
MonthsEnded March 31,
    
    Nine Months Ended March 31,2006
    
    2007
    
    2006Net sales
    
    $
    72,880
    
    
    $
    538,372
    
    
    $
    239,672Net income (loss)
    
    $
    (12,028
    )
    
    $
    25,961
    
    
    $
    (17,206
    )Net income
(loss) per diluted
common share
    
    $
    (0.27
    )
    
    $
    0.44
    
    
    $
    (0.45
    )
  Fair value of stock issued to acquire Vivitar
    
    $
    26,000Acquisition related costs
    
    
    160Total purchase price
    
    $
    26,160Cash
    
    $
    6,024Accounts receivable
    
    
    19,235Inventories
    
    
    19,806Other current assets
    
    
    2,029Property, plant and equipment
    
    
    186
 14




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Intangible assets
    
    
    12,708Other assets
    
    
    70Total assets acquired
    
    
    60,058Less liabilities assumed
    
    
    (54,843
    )Fair value of net assets acquired
    
    
    5,215Goodwill
    
    
    20,945Total purchase price
    
    $
    26,160
  Note I
  March 31,
    
    
    June 30,
    
    
    Amortizable2007
    
    
    2006
    
    
    LifeLCoS trademark and
trade name
    
    $
    1,208
    
    
    $
    1,208
    
    
    7.5 yearsBrillian trademark
and trade
name
    
    
    148
    
    
    
    148
    
    
    4.0 yearsTechnology license
    
    
    5,551
    
    
    
    
    
    
    5.0 yearsVivitar trade name
    
    
    11,095
    
    
    
    
    
    
    15.0 yearsVivitar customer
list
    
    
    1,613
    
    
    
    
    
    
    15.0 yearsPatented
technology
    
    
    20,114
    
    
    
    20,114
    
    
    19.0 years39,729
    
    
    
    21,470Less accumulated
amortization
    
    
    (2,513
    )
    
    
    (733
    )$
    37,216
    
    
    $
    20,737
    Fiscal Year2007
    
    $
    8042008
    
    
    3,2142009
    
    
    3,2142010
    
    
    3,1932011
    
    
    3,177Thereafter
    
    
    23,614$
    37,216
 Note J
  15




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16




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March 31,
    
    
    June 30,2007
    
    
    2006Preferred Bank $55 million promissory note
    
    $
    49,277
    
    
    
    Preferred Bank $12 million promissory note
    
    
    12,000
    
    
    
    Preferred Bank $3.8 million promissory
note
    
    
    5,800
    
    
    
    CIT $15 million credit facility
    
    
    6,026
    
    
    
    DBS Bank, Ltd. $20 million credit facility
    
    
    797
    
    
    
    Previous Preferred Bank credit facility
    
    
    
    
    
    
    30,800Total
    
    $
    73,900
    
    
    $
    30,800
  Note K
  Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Basic earnings (loss) per share:Net income (loss)
    
    $
    5,493
    
    
    $
    (11,412
    )
    
    $
    21,418
    
    
    $
    (13,380
    )Weighted average common shares
    
    
    59,972
    
    
    
    44,432
    
    
    
    54,304
    
    
    
    38,453Basic earnings (loss) per share
    
    $
    0.09
    
    
    $
    (0.26
    )
    
    $
    0.39
    
    
    $
    (0.35
    )Diluted earnings (loss) per share:Net income (loss)
    
    $
    5,493
    
    
    $
    (11,412
    )
    
    $
    21,418
    
    
    $
    (13,380
    )Add back:Dividends on convertible preferred
stock
    
    
    93
    
    
    
    
    
    
    
    489
    
    
    
    Adjusted net income (loss)
    
    $
    5,586
    
    
    $
    (11,412
    )
    
    $
    21,208
    
    
    $
    (13,380
    )Common
Stock Equivalents:Weighted average common shares
    
    
    59,972
    
    
    
    44,432
    
    
    
    54,304
    
    
    
    38,453Options and warrants assumed
exercised
    
    
    3,019
    
    
    
    
    
    
    
    2,281
    
    
    
    Assumed shares issued for
convertible
preferred stock
    
    
    1,237
    
    
    
    
    
    
    
    2,175
    
    
    
    Total common shares plus common
stock equivalents
    
    
    64,228
    
    
    
    44,432
    
    
    
    58,761
    
    
    
    38,453Diluted income (loss) per share:
    
    $
    0.09
    
    
    $
    (0.26
    )
    
    $
    0.37
    
    
    $
    (0.35
    )
 Note L
  17




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DigitalLCD
    
    LCoS
    
    Camera
    
    TotalThree months ended
March 31, 2007Net sales
    
    $
    148,957
    
    
    $
    440
    
    
    $
    13,484
    
    
    $
    162,880Operating income (loss)
    
    $
    21,395
    
    
    $
    (6,355
    )
    
    $
    (2,114
    )
    
    $
    12,926Depreciation and amortization
    
    $
    702
    
    
    $
    883
    
    
    $
    342
    
    
    $
    1,927Total assets
    
    $
    298,858
    
    
    $
    51,393
    
    
    $
    54,458
    
    
    $
    404,709Three months ended
March 31, 2006Net sales
    
    $
    44,591
    
    
    $
    1,080
    
    
    $
    
    
    
    $
    45,671Operating income (loss)
    
    $
    1,323
    
    
    $
    (5,689
    )
    
    $
    
    
    
    $
    (4,366
    )Depreciation and amortization
    
    $
    119
    
    
    $
    971
    
    
    $
    
    
    
    $
    1,090Total assets
    
    $
    80,308
    
    
    $
    48,763
    
    
    $
    
    
    
    $
    129,071Nine months ended
March 31, 2007Net sales
    
    $
    461,847
    
    
    $
    3,654
    
    
    $
    26,877
    
    
    $
    492,378Operating income (loss)
    
    $
    64,418
    
    
    $
    (20,064
    )
    
    $
    (2,024
    )
    
    $
    42,077Depreciation and amortization
    
    $
    1,533
    
    
    $
    2,642
    
    
    $
    347
    
    
    $
    4,521Total assets
    
    $
    298,858
    
    
    $
    51,393
    
    
    $
    54,458
    
    
    $
    404,709Nine months ended
March 31, 2006Net sales
    
    $
    131,810
    
    
    $
    1,374
    
    
    $
    
    
    
    $
    133,184Operating income (loss)
    
    $
    3,413
    
    
    $
    (8,464
    )
    
    $
    
    
    
    $
    (5,051
    )Depreciation and amortization
    
    $
    314
    
    
    $
    1,260
    
    
    $
    
    
    
    $
    1,574Total assets
    
    $
    80,308
    
    
    $
    48,763
    
    
    $
    
    
    
    $
    129,071
    18




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NorthAmerica
    
    Asia
    
    Europe
    
    TotalThree months ended
March 31, 2007Net sales
    
    $
    88,843
    
    
    $
    67,057
    
    
    $
    6,980
    
    
    $
    162,880Three months ended
March 31, 2006Net sales
    
    $
    43,745
    
    
    $
    1,840
    
    
    $
    86
    
    
    $
    45,671Nine months ended
March 31, 2007Net sales
    
    $
    229,119
    
    
    $
    249,310
    
    
    $
    13,949
    
    
    $
    492,378Nine months ended
March 31, 2006Net sales
    
    $
    120,147
    
    
    $
    12,915
    
    
    $
    122
    
    
    $
    133,184
 Note M
       19




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Note N
   20




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Three Months Ended
    
    Nine Months EndedMarch 31,
    
    March 31,2007
    
    2006
    
    2007
    
    2006Expected life (in years)
    
    
    5
    
    
    
    5
    
    
    
    5
    
    
    
    5Expected volatility
    
    
    82
    %
    
    
    60
    %
    
    
    82
    %
    
    
    117
    %Risk-free interest rate
    
    
    4.71
    %
    
    
    4.79
    %
    
    
    4.92
    %
    
    
    3.93
    %Dividend yield
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    Options OutstandingWeightedAverageNumber of
    
    Exercise PriceShares
    
    Per ShareOutstanding at July 1, 2006
    
    
    3,047,733
    
    
    $
    4.17Granted July 1, 2006 through March 31,
2007
    
    
    1,459,950
    
    
    $
    3.34Exercised
    
    
    (337,170
    )
    
    $
    2.01Forfeited and expired
    
    
    (71,706
    )
    
    $
    6.99Outstanding at March 31, 2007
    
    
    4,098,807
    
    
    $
    4.01Exercisable at March 31, 2007
    
    
    2,667,250
    
    
    $
    4.44
 21




---



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2003 Employee Stock Purchase Plan
  OfferingPeriod
    
    Start Date
    
    End Date
    
    Offering Price
    
    Shares issued
    
    Date Issued1st
    
    
    9/16/2003
    
    
    
    12/31/2003
    
    
    $
    7.14
    
    
    
    13,502
    
    
    
    1/2/20042nd
    
    
    1/1/2004
    
    
    
    6/30/2004
    
    
    $
    6.83
    
    
    
    21,389
    
    
    
    7/1/20043rd
    
    
    7/1/2004
    
    
    
    12/31/2004
    
    
    $
    2.93
    
    
    
    43,903
    
    
    
    1/3/20054th
    
    
    1/1/2005
    
    
    
    6/30/2005
    
    
    $
    2.24
    
    
    
    36,329
    
    
    
    7/1/20055th
    
    
    7/1/2005
    
    
    
    12/31/2005
    
    
    $
    2.13
    
    
    
    39,928
    
    
    
    1/3/20066th
    
    
    1/1/2006
    
    
    
    6/30/2006
    
    
    $
    2.04
    
    
    
    49,538
    
    
    
    7/3/20067th
    
    
    7/1/2006
    
    
    
    12/31/2006
    
    
    $
    2.04
    
    
    
    51,254
    
    
    
    12/29/20068th
    
    
    1/1/2007
    
    
    open
  Note O
 4 01(k) Profit Sharing Plan
  Note P
  March 31,
    
    
    June 30,2007
    
    
    2006April 2005 7% Convertible Debentures
maturing April 20, 2008, convertible at
$1.57 per share
    
    $
    
    
    
    $
    985April 2005 9% Senior Secured Debentures
maturing April 20, 2008, secured by a lien
on certain assets
    
    
    
    
    
    
    2,000July 2005 4% Convertible Debentures
maturing July 12, 2008, convertible at
$2.63 per share
    
    
    
    
    
    
    1,300July 2005 9% Senior Secured Debentures
maturing July 12, 2008, secured by a lien
on certain assets
    
    
    
    
    
    
    2,075Other long-term debt
    
    
    
    
    
    
    33Total long-term debt
    
    
    
    
    
    
    6,393Less:Discount and beneficial conversion feature
on convertible debentures
    
    
    
    
    
    
    (1,763
    )Discount on secured
debentures
    
    
    
    
    
    
    (872
    )Total net long-term debt
    
    $
    
    
    
    $
    3,758
 22




---



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Note Q
       23




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Note R
    Note S
  Shares of Common
    
    Per ShareExpiration
    
    Stock Issuable
    
    ExerciseWarrants relating to issuance of :
    
    Date
    
    Under Warrants
    
    PriceApr. 2005 7% Convertible Debentures
    
    
    10/10/2010
    
    
    
    25,988
    
    
    $
    1.57Jul. 2005 4% Convertible Debentures
    
    
    01/08/2011
    
    
    
    256,656
    
    
    $
    2.63Jul. 2005 9% Secured Debentures
    
    
    01/08/2011
    
    
    
    45,000
    
    
    $
    2.63Dec. 2005 Convertible Preferred
Stock
    
    
    12/27/2010
    
    
    
    1,482,500
    
    
    $
    5.00Jan. 2006 Convertible Preferred
Stock
    
    
    01/02/2011
    
    
    
    100,000
    
    
    $
    5.00Mar. 2006 Common Stock
    
    
    09/26/2011
    
    
    
    750,000
    
    
    $
    5.00Dec. 2006 Common Stock
    
    
    05/31/2010
    
    
    
    64,683
    
    
    $
    9.28Mar. 2007 Common Stock
    
    
    09/24/2010
    
    
    
    211,817
    
    
    $
    8.78Total Warrants Outstanding:
    
    
    
    
    
    
    2,936,644
 24




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Note T
  Note U :
    
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   25




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Overview
    Net Sales
 Cost of Sales.
 Selling, Distribution, and Marketing Expense.
 General and Administrative Expense.
 Research and Development Expense.
 Related
Party Transactions.
    Results of Operations
 Three months ended March 31, 2007 compared with three months ended March 31, 2006
 Net Sales.
 26




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Cost of Sales.
    27




---



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Selling, Distribution, and Marketing Expense.
 General and Administrative Expense.
 Research and Development Expense.
 Interest Expense .
 Income Tax
  28




---



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Net Income (Loss).
 Nine months ended March 31, 2007 compared with nine months ended March 31, 2006
 Net
Sales.
      Cost
of Sales.
    29




---



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Selling, Distribution, and Marketing Expense
 General and Administrative Expense
 Research and Development Expense
 Interest Expense
 Income Tax
  30




---



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Net Income (Loss)
 Liquidity and Capital Resources
       31




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32




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March 31,
    
    
    June 30,2007
    
    
    2006Preferred Bank $55 million promissory note
    
    $
    55,076
    
    
    
    Preferred Bank $10 million promissory note
    
    
    10,000
    
    
    
    Preferred Bank $2 million promissory note
    
    
    2,000
    
    
    
    CIT $15 million credit facility
    
    
    6,027
    
    
    
    DBS Bank, Ltd. $20 million credit facility
    
    
    797
    
    
    
    Previous Preferred Bank credit facility
    
    
    
    
    
    
    30,800Total
    
    $
    73,900
    
    
    $
    30,800
 Aggregate Contractual Obligations and Commercial Commitments
  Less Than 1
    
    
    
    
    
    
    
    
    
    More thanTotal
    
    Year
    
    1-3 Years
    
    4-5 Years
    
    5 YearsLoans payable  bank
    
    
    73,900
    
    
    
    73,900
    
    
    
    
    
    
    
    
    
    
    
    Redeemable convertible
preferred stock
redemptions
    
    
    3,932
    
    
    
    3,932
    
    
    
    
    
    
    
    
    
    
    
    Redeemable convertible
preferred stock
dividends
    
    
    98
    
    
    
    98
    
    
    
    
    
    
    
    
    
    
    
    Facilities leases
    
    
    5,171
    
    
    
    2,858
    
    
    
    2,281
    
    
    
    32
    
    
    
    Purchase orders
    
    
    154,776
    
    
    
    154,776
    
    
    
    
    
    
    
    
    
    
    
    Advertising commitments
    
    
    45,042
    
    
    
    15,092
    
    
    
    29,950
    
    
    
    
    
    
    
    Investment commitments
    
    
    290
    
    
    
    290
    
    
    
    
    
    
    
    
    
    
    
    
 Off Balance Sheet Arrangements
  33




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Impact of Recently Issued Standards
       34




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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Risk
  Foreign Currency Risk
  Credit Risk
  35




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Equity Price Risk







ITEM 4. CONTROLS AND PROCEDURES







PART II  OTHER INFORMATION





ITEM 1. LEGAL PROCEEDINGS













ITEM 1A. RISK FACTORS




Risks
    Related to Our Business
  We derive
    a large percentage of our revenue from sales of HDTVs,
    particularly LCD HDTVs, and any decline in demand for these
    products could severely harm our ability to generate
    revenue.
     36




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##### Table of Contents



We will
    require significant additional capital to fund the expansion of
    our business.
      Our
    revenue depends on sales by various retailers and distributors,
    some of which account for a significant portion of our
    sales.
      
    we may be unable to secure and maintain favorable relationships
    with retailers and distributors;
    we may be unable to control the timing of delivery of our
    products to end-user consumers;
    our retailers and distributors are not subject to minimum sales
    requirements or any obligation to market our products to their
    customers;
    our retailers and distributors may terminate their relationships
    with us at any time; and
    our retailers and distributors market and distribute competing
    products. 37




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##### Table of Contents



We have
    significant accounts receivable from our largest
    distributor.
  120-day
  We face
    competition from a number of the worlds leading consumer
    electronics companies.
  start-up
    
    our success in developing and producing new products;
    our ability to address the needs of our customers;
    the pricing, quality, performance, reliability, features, ease
    of use, and diversity of our products;
    our ability to effectively market our brands and products;
    the quality of our customer service;
    our efficiency of production;
    product or technology introductions by our competitors; and
    foreign currency devaluations, especially in Asian currencies,
    such as the Japanese yen, the Korean won, and the Taiwanese
    dollar, which may cause a foreign competitors products to
    be priced significantly lower than our products.   38




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##### Table of Contents



We rely
    on contract manufacturers and assemblers for a portion of our
    production requirements, and any interruptions of these
    arrangements could increase our costs, disrupt our supply chain,
    and result in our inability to deliver our HDTV products, which
    would adversely affect our results of operations.
      Shortages
    of components and materials necessary to the production of our
    products may delay or reduce our sales and increase our
    costs.
    near-to-eye
  If we do
    not accurately forecast our needs for components and
    materials, we may be forced to make inventory adjustments, which
    may adversely affect our results of operations.
   39




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We have
    never achieved profitability on an annual basis, and we may be
    unable to sustain profitability in future periods.
    We must
    effectively manage our growth.
    
    enhance our operational, financial, and management systems;
    expand our international resources;
    expand our facilities and equipment; and
    successfully hire, train, and motivate additional employees,
    including the technical personnel necessary to operate our
    production facility in Arizona.  We may
    not realize the benefits we expected from the merger between
    Brillian Corporation and Syntax Groups Corporation or our
    acquisition of Vivitar.
    
    integrating the business, operations, and technologies of the
    companies;
    retaining and assimilating the key personnel of each company;
    retaining existing customers of each company and attracting
    additional customers;
    retaining strategic partners of each company and attracting new
    strategic partners;
    creating uniform standards, controls, procedures, policies, and
    information systems; and
    meeting the challenges inherent in efficiently managing an
    increased number of employees over large geographic distances,
    including the need to implement appropriate systems, policies,
    benefits, and compliance programs.   40




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##### Table of Contents




    the potential disruption of ongoing business and distraction of
    our management;
    the potential strain on our financial and managerial controls
    and reporting systems and procedures;
    unanticipated expenses and potential delays related to
    integration of the operations, technology, and other resources
    of the two companies;
    our ability to leverage the Vivitar brand and distribution
    network;
    the impairment of relationships with employees, suppliers, and
    customers as a result of any integration of new management
    personnel;
    greater than anticipated costs and expenses related to the
    integration of our businesses; and
    potential unknown liabilities associated with the merger and the
    combined operations.    Our
    operations and sales in foreign countries expose us to a variety
    of risks.
    
    difficulties in staffing, managing, and operating an
    international operation;
    longer payment cycles for sales in foreign countries and
    difficulties in collecting accounts receivable;
    the burdens and costs of compliance with multiple and sometimes
    conflicting laws and regulatory requirements as well as changes
    in those laws and requirements;
    imposition of governmental controls, including trade and
    employment restrictions and restrictions on currency conversion
    or the transfer of funds;
    transportation delays or interruptions and other effects of less
    developed infrastructures;
    fluctuations in foreign currency exchange rates and difficulties
    in hedging foreign currency transaction exposures;
    economic instability, such as higher interest rates and
    inflation, which could reduce our customers ability to
    obtain financing for consumer electronics products or which
    could make our products more expensive in those countries;
    employment and severance issues, including possible employee
    turnover or labor unrest;
    overlap or conflict of tax issues;
    tariffs and duties;
    potential loss of proprietary information as a result of piracy,
    misappropriation, or laws that may be less protective of our
    intellectual property rights;
    limitations on future growth or inability to maintain current
    levels of revenue from international operations if we do not
    invest sufficiently in our international operations;
    difficulties in coordinating the activities of our
    geographically dispersed and culturally diverse operations; 41




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
    seasonal reductions in business activity in the summer months in
    Asia and in other periods in other countries;
    costs and delays associated with developing our products in
    multiple languages; and
    political unrest, war, terrorism, or actual or perceived health
    risks in areas in which we do business.    non-U.S. currencies non-U.S. currencies.
    Our
    business depends on new products and technologies.
    
    designing and developing new products and product enhancements
    that appeal to consumers;
    meeting the expectations of our sales channel customers and
    end-user consumers in terms of product design, product cost,
    performance, and service;
    responding to changing consumer tastes;
    expanding our manufacturing resources;
    continuing research and development activities on existing and
    potential products;
    engaging additional engineering and other technical personnel;
    purchasing advanced design, production, and test
    equipment; and
    maintaining and enhancing our technological capabilities.      
    innovative development of new products and technologies;
    efficient, timely, and cost-effective manufacture of our
    products;
    the acceptance of our products and technologies; and
    utilization of advances in technology. 42




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We must
    protect our intellectual property and could be subject to
    infringement claims by others.
    
    intellectual property laws may not protect our intellectual
    property rights;
    third parties may challenge, invalidate, or circumvent any
    patents issued to us;
    rights granted under patents issued to us may not provide
    competitive advantages to us;
    unauthorized parties may obtain and use information that we
    regard as proprietary despite our efforts to protect our
    proprietary rights;
    others may independently develop similar technology or design
    around any patents issued to us; and
    effective protection of intellectual property rights may be
    limited or unavailable in some foreign countries in which we
    operate.        
    pay damages (including the potential for treble damages),
    license fees, or royalties (including royalties for past
    periods) to the party claiming infringement;
    stop licensing products or providing services that use the
    challenged intellectual property;
    obtain a license from the owner of the infringed intellectual
    property to sell or use the relevant technology, which license
    may not be available on reasonable terms or at all; or
    redesign the challenged technology, which could be
    time-consuming and costly, or not be accomplished.  The
    cyclical nature of the consumer electronics industry may cause
    substantial
    period-to-period
    fluctuations in our operating results.
   43




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period-to-period
      Our
    operating results may have significant periodic and seasonal
    fluctuations.
    
    market acceptance of our products;
    the seasonal nature of our sales;
    product introductions or enhancements by us and our competitors;
    pricing and availability of competitive products;
    effectiveness in managing manufacturing processes;
    changes in cost and availability of labor and components;
    the timing and volume of orders relative to our capacity;
    evolution in the life cycles of products;
    timing of expenditures in anticipation of future orders;
    product mix;
    changes or anticipated changes in economic conditions;
    the cancellation or deferral of product purchases as a result of
    weak or uncertain economic and industry conditions or the
    anticipation of new products or product updates by us or our
    competitors;
    changes in the competitive landscape as a result of mergers,
    acquisitions, or strategic alliances that could allow our
    competitors to gain market share;
    the unpredictability of the timing and magnitude of our sales
    through direct sales channels and indirect sales channels;
    changes in our pricing and distribution terms or those of our
    competitors; and
    the possibility that our business will be adversely affected as
    a result of the threat of terrorism or military actions taken by
    the United States or its allies.   44




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Our
    products are complex and may require modifications to resolve
    undetected errors or unforeseen failures, which could lead to an
    increase in our warranty claims and costs, a loss of customers,
    or a delay in market acceptance of our products.
    Our LCoS
    products may not achieve commercial success or widespread market
    acceptance.
    
    larger form factor;
    consumer tastes;
    competition with products utilizing other technologies;
    technological complexities in terms of manufacturing processes;
    difficulties with other suppliers of components for the products;
    price considerations;
    lack of anticipated or actual market demand for the
    products; and
    unfavorable comparisons with products of others.  near-to-eye
  We
    previously experienced low manufacturing yields in commencing
    production of LCoS microdisplays, and our business depends on
    our ability to maintain satisfactory manufacturing
    yields.
  ramp-up
    
    the availability of a sufficient quantity of quality materials; 45




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
    the implementation of new manufacturing techniques;
    the incorporation of new handling procedures;
    the maintenance of clean manufacturing environments; and
    the ability to master precise tolerances in the manufacturing
    process.  Our
    Arizona facility and its high-volume LCoS microdisplay
    manufacturing line are important to our LCoS success.
    Our
    executive officers and key personnel are critical to our
    business, and these officers and personnel may not remain with
    us in the future.
    Any
    acquisitions that we undertake could be difficult to integrate,
    disrupt our business, dilute stockholder value, and harm our
    operating results.
      
    problems integrating the purchased operations, technologies,
    products, or services with our own;
    unanticipated costs associated with the acquisition;
    diversion of managements attention from our core
    businesses;
    adverse effects on existing business relationships with
    suppliers and customers;
    risks associated with entering markets in which we have no or
    limited prior experience;
    potential loss of key employees and customers of purchased
    organizations;
    increased costs and efforts in connection with compliance with
    Section 404 of the Sarbanes-Oxley Act; and
    risk of impairment charges related to potential write-downs of
    acquired assets in future acquisitions.    46




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Charges
    to earnings resulting from the application of the purchase
    method of accounting may adversely affect the market value of
    our common stock.
    We are
    subject to governmental regulations.
    Our
    effective tax rate may increase or fluctuate, which could
    increase our income tax expense and reduce our net
    income.
    Risks
    Related to Our Common Stock
  The
    market price for our common stock may be volatile.
    
    variations in our quarterly results;
    announcements of technological innovations by us or by our
    competitors;
    introductions of new products or new pricing policies by us or
    by our competitors;
    acquisitions or strategic alliances by us or by our competitors; 47




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
    recruitment or departure of key personnel;
    the gain or loss of significant orders;
    the gain or loss of significant customers;
    changes in the estimates of our operating performance or changes
    in recommendations by any securities analysts that follow our
    stock;
    changes in laws affecting HDTVs; and
    market conditions in our industry, the industries of our
    customers, and the economy as a whole.    Substantial
    sales of our common stock, or the perception that such sales
    might occur, could depress the market price of our common
    stock.
    Failure
    to achieve and maintain effective internal controls in
    accordance with Section 404 of the Sarbanes-Oxley Act could
    have a material adverse effect on our ability to produce
    accurate financial statements and on our stock price.
  Form 10-K
 48




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Provisions
    in our certificate of incorporation, our bylaws, and Delaware
    law could make it more difficult for a third party to acquire
    us, discourage a takeover, and adversely affect existing
    stockholders.
        Since we
    do not expect to pay any dividends for the foreseeable future,
    investors in our common stock may be forced to sell their stock in
    order to obtain a return on their investment.
   
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  49




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##### Table of Contents



ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
  BUSINESS
  Introduction
    near-to-eye
  Industry
    Background
     50




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Our Core
    Competencies
    Focus on
    HDTV Solutions
    Global
    Virtual Manufacturing Model
    Deep
    Systems-Level Expertise
  front-of-screen
  Optimal
    Price and Performance
   51




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Our
    Strategy
    Increase
    Consumer Awareness of Our Brands and Products
    Expand
    Our Product Distribution Channels
    Leverage
    Our Global Virtual Manufacturing Model
  bill-of-material
  Capitalize
    on Our LCoS Technological Expertise
    Pursue
    Additional Strategic Acquisitions and Relationships
   52




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Products
  High-Definition
    Televisions
      3-Series


5-Series


7-SeriesScreen Size


23, 27, 32,
    37, 42


27, 32, 37,
    42, 65


42, 47Display Technology


LCD


LCD, LCoS


LCDVideo Processor


Pixelworks


AMD & Media Tek


SiliconOptix HQVResolution


720p, 1080i


720p, 1080i (LCoS 1080p)


1080pInputs


1 HDMI


1 HDMI


2 HDMITuner


NTSC Tuner


Combo Tuner


Dual TunerHD Capabilities


HDTV-Ready


HDTV Built-in


HDTV Built-inTarget Sales Channel


Online


National


Specialty   170-degree
  Digital
    Imaging Products
  easy-to-use
    serious-amateur
 53




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5 Megapixel


7 Megapixel


10 MegapixelCameras


Cameras


CamerasImage Resolution


Up to 2560 x 1920


Up to 3072 x 2304


Up to 3648 x 2736Internal Memory


16 MB


16 or 32 MB


32 MBExternal Memory


SD Cards to 1GB


SD Card to 1GB


SD Card to 2GBLens


Optical Zooms to 3x


Optical Zooms to 4x


Optical Zooms to 6xDigital Zoom


4x


Up to 5x


Up to 10.4x   Microdisplay
    Products
  near-to-eye
  near-to-eye
  Projection Applications.
  Near-to-Eye
    Applications. near-to-eye
  near-to-eye
  HDTV
    Technologies
    Direct
    View Technologies
     54




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Rear
    Projection Technologies
        LCD and
    LCoS Advantages
     55




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Manufacturing
          side-by-side
   56




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Suppliers
        Customers
      heads-up
   57




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Sales and
    Marketing
              Competition
   58




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near-to-eye start-up
    Research
    and Development
    
    silicon backplane design to reduce size and cost, increase
    resolution and performance, decrease power consumption, and
    integrate driver functionality;
    video processing software development for HDTV picture quality;
    projection optics, color science, and display characterization
    to optimize the link between the science of LCoS and the
    end-user experience;
    ASIC design to combine and enhance functionality, reduce cost,
    and improve HDTV picture quality;
    basic research and development to characterize, test, and
    incorporate new liquid crystal solutions, silicon substrates,
    and glass. Our engineers and scientists continue to investigate
    alternative combinations of materials to improve picture
    quality, cost, and manufacturability;
    printed circuit board design; and
    LCoS package and test development programs.      Intellectual
    Property
   59




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Government
    Regulation
      Backlog
    Employees
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Properties
   DBS Bank, Ltd.
   
 ITEM 6. EXHIBITS
 Exhibit #
    
    Exhibit10.38
    
    Amended and Restated Business Loan
and Security Agreement, dated as of December 13, 2006, by and
among Preferred Bank, the Registrant, Syntax Groups Corporation, and
Syntax Corporation, as amended February 21, 200710.49
    
    Fourth Amended and Restated
Promissory Note  Variable Rate issued on February 21, 2007
by the Registrant, Syntax Groups Corporation, and Syntax Corporation
in favor of Preferred Bank10.53
    
    Manufacturing Agreement, dated March 9, 2004, between Syntax Groups Corporation and
Taiwan Kolin Company Limited as amended on March 12, 2004,
February 1, 2005, and May 7, 200731.1
    
    Rule 13a14 (a)/15d-14(a) Certification of Chief Executive Officer31.2
    
    Rule 13a14 (a)/15d14(a) Certification of Chief Financial Officer32.1
    
    Section 1350 Certification of Chief Executive Officer32.2
    
    Section 1350 Certification of Chief Financial Officer
 61




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SIGNATURES
  SYNTAX-BRILLIAN CORPORATIONDate: May 10, 2007
    
    By:
    
    /s/ Vincent F. Sollitto, Jr.

Vincent F. Sollitto, Jr.Chief Executive OfficerDate: May 10, 2007
    
    By:
    
    /s/ Wayne A. Pratt

Wayne A. PrattChief Financial Officer
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EXHIBIT INDEX
 ExhibitNumber
    
    Exhibit10.38
    
    Amended and Restated Business Loan
and Security Agreement, dated as of December 13, 2006, by and
among Preferred Bank, the Registrant, Syntax Groups Corporation, and
Syntax Corporation, as amended February 21, 200710.49
    
    Fourth Amended and Restated
Promissory Note  Variable Rate issued on February 21, 2007
by the Registrant, Syntax Groups Corporation, and Syntax Corporation
in favor of Preferred Bank10.53
    
    Manufacturing Agreement, dated March 9, 2004, between Syntax Groups Corporation and
Taiwan Kolin Company Limited as amended on March 12, 2004,
February 1, 2005, and May 7, 200731.1
    
    Rule 13a14 (a)/15d-14(a) Certification of Chief Executive Officer31.2
    
    Rule 13a14 (a)/15d14(a) Certification of Chief Financial Officer32.1
    
    Section 1350 Certification of Chief Executive Officer32.2
    
    Section 1350 Certification of Chief Financial Officer