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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Fiscal Year Ended: December 31, 2009
 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: 0-21878
 SIMON WORLDWIDE, INC.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    04-3081657(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 5200 W. Century Boulevard, Los Angeles, California 90045
 (310) 417-4660
 Securities registered pursuant to Section 12(b) of the Act:
 Name of each exchangeTitle of each class
    
    on which registeredCommon Stock, $0.01 Par Value Per Share
    
    NONE
 Securities registered pursuant to Section 12(g) of the Act:
  o þ
 o þ
 þ o
 þ o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ




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##### 



SIMON WORLDWIDE, INC.
FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009
 INDEX
 PART I
    
    
    3Item 1. Business
    
    
    3Item 1A. Risk Factors
    
    
    6Item 1B. Unresolved Staff Comments
    
    
    7Item 2. Properties
    
    
    7Item 3. Legal Proceedings
    
    
    7Item 4. Reserved
    
    
    7PART II
    
    
    8Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    8Item 6. Selected Financial Data
    
    
    10Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    10Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    19Item 8. Financial Statements and Supplementary Data
    
    
    20Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    20Item 9A. Controls and Procedures
    
    
    20Item 9A(T). Controls and Procedures
    
    
    20Item 9B. Other Information
    
    
    21PART III
    
    
    22Item 10. Directors, Executive Officers and Corporate Governance
    
    
    22Item 11. Executive Compensation
    
    
    24Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    30Item 13. Certain Relationships, Related Transactions and Director Independence
    
    
    32Item 14. Principal Accounting Fees and Services
    
    
    32PART IV
    
    
    34Item 15. Exhibits and Financial Statement Schedules
    
    
    34SIGNATURES
    
    
    35EX-31EX-32
  2




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PART I
 
 Item 1. Business
 General
      3




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4




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2001 Sale of Business
      5




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Item 1A. Risk Factors
  Uncertain Outlook
    Dependence on Key Personnel
  Investments
  Forward Looking Information
  6




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Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
  
 Item 3. Legal Proceedings
  
 Item 4. Reserved
 7




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PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
  2009
    
    2008High
    
    Low
    
    High
    
    LowFirst quarter
    
    $
    0.37
    
    
    $
    0.17
    
    
    $
    0.43
    
    
    $
    0.30Second quarter
    
    
    0.35
    
    
    
    0.15
    
    
    
    0.51
    
    
    
    0.30Third quarter
    
    
    0.35
    
    
    
    0.15
    
    
    
    0.45
    
    
    
    0.29Fourth quarter
    
    
    0.35
    
    
    
    0.21
    
    
    
    0.40
    
    
    
    0.15
    Stock Performance Graph
   8




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##### Table of Contents



Fiscal Year Ended2004
    
    2005
    
    2006
    
    2007
    
    2008
    
    2009SWWI
    
    $
    100
    
    
    $
    169
    
    
    $
    223
    
    
    $
    308
    
    
    $
    285
    
    
    $
    262NASDAQ
    
    
    100
    
    
    
    101
    
    
    
    111
    
    
    
    122
    
    
    
    72
    
    
    
    104Russell 2000
    
    
    100
    
    
    
    104
    
    
    
    121
    
    
    
    118
    
    
    
    77
    
    
    
    96
  9




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##### Table of Contents



Item 6. Selected Financial Data
  For the Years Ended December 31,2009
    
    2008
    
    2007
    
    2006
    
    2005(in thousands, except share data)Selected income statement data:Continuing operations:Net sales
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Net loss
    
    
    (2,035
    )
    
    
    (1,156
    )
    
    
    (2,093
    )
    
    
    (2,625
    )
    
    
    (2,684
    )Income (loss) per common share available
to common shareholders:Basic
    
    
    (0.04
    )
    
    
    0.65
    
    
    
    (0.21
    )
    
    
    (0.23
    )
    
    
    (0.23
    )Diluted
    
    
    (0.04
    )
    
    
    0.62
    
    
    
    (0.21
    )
    
    
    (0.23
    )
    
    
    (0.23
    )Discontinued operations:Net sales
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    
    (81
    )
    
    
    1,777
    
    
    
    312
    
    
    
    707
    
    
    
    (478
    )Income (loss) per common share available
to common shareholders:Basic
    
    
    0.00
    
    
    
    0.07
    
    
    
    0.02
    
    
    
    0.04
    
    
    
    (0.03
    )Diluted
    
    
    0.00
    
    
    
    0.06
    
    
    
    0.02
    
    
    
    0.04
    
    
    
    (0.03
    )
 December 31,2009
    
    2008
    
    2007
    
    2006
    
    2005(in thousands)Selected balance sheet data:Cash and cash equivalents (a)
    
    $
    14,765
    
    
    $
    16,660
    
    
    $
    16,134
    
    
    $
    17,637
    
    
    $
    16,473Total assets
    
    
    15,443
    
    
    
    17,946
    
    
    
    20,427
    
    
    
    26,590
    
    
    
    31,822Redeemable preferred stock
    
    
    
    
    
    
    
    (b)
    
    
    33,696
    
    
    
    32,381
    
    
    
    31,118Stockholders equity (deficit)
    
    
    14,675
    
    
    
    16,922
    
    
    
    (14,868
    )
    
    
    (7,236
    )
    
    
    (841
    )
 
 (a)
    
    Includes only non-restricted cash and cash included in discontinued operations in the balance
sheets of $198, $84, $0, $408, and $163 as of December 31, 2009, 2008, 2007, 2006 and 2005,
respectively.(b)
    
    At a special meeting held on September 18, 2008, the stockholders of the Company approved
amendments to the Companys certificate of incorporation in order to effect a recapitalization of
the Company wherein the Company issued 37,940,756 shares of common stock in exchange for 34,717
shares of preferred stock (representing all outstanding preferred shares) with a carrying value of
$34.7 million. 
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward-Looking Statements and Associated Risks
  10




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Business Conditions
      11




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Critical Accounting Policies
   Long-Term Investments
     12




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Contingencies
     13




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Recently Issued Accounting Standards
 TM Subsequent Events
  TM
    14




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Significant Contractual Obligations
  Payments Due by PeriodLess Than
    
    
    1-3
    
    
    4-5
    
    
    After 5Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    Years(in thousands)Operating leases (a)
    
    $
    49
    
    
    $
    49
    
    
    $
    
    
    
    $
    
    
    
    $
    
 
 (a)
    
    Payments for operating leases are recognized as an expense in the consolidated statement of
operations on a straight-line basis over the term of the lease. Other Commercial Commitments
  TotalCommitted atDecember 31,
    
    
    Total Committed at end of2009
    
    
    1 Year
    
    
    2 Years
    
    
    3 Years
    
    
    4 Years
    
    
    5 Years
    
    
    Thereafter(in thousands)Standby letters of credit
    
    $
    36
    
    
    $
    36
    
    
    $
    36
    
    
    $
    36
    
    
    $
    36
    
    
    $
    36
    
    
    $
    36
  Results of Continuing and Discontinued Operations
  Continuing Operations
 2009 Compared to 2008
    15




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2008 Compared to 2007
      16




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Discontinued Operations
 2009 Compared to 2008
     17




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2008 Compared to 2007
    Liquidity and Capital Resources
    Continuing Operations
    18




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Discontinued Operations
       Off-Balance Sheet Arrangements
  
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk
   19




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Item 8. Financial Statements and Supplementary Data
 Description
    
    PageReport of Independent Registered Public Accounting Firm
    
    
    F-1Consolidated Balance Sheets as of December 31, 2009 and 2008
    
    
    F-2Consolidated Statements of Operations for the years ended December 31, 2009, 2008 and 2007
    
    
    F-3Consolidated Statements of Stockholders Equity (Deficit) for the years ended December
31, 2009, 2008 and 2007
    
    
    F-4Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008 and 2007
    
    
    F-5Notes to Consolidated Financial Statements
    
    
    F-6
 
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
  
 Item 9A(T). Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Report of Management on Internal Control Over Financial Reporting
     20




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Changes in Internal Control Over Financial Reporting
  
 Item 9B. Other Information
  21




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PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance
    Year TermName
    
    Age
    
    Class
    
    Expires
    
    Service as DirectorJoseph W. Bartlett
    
    76
    
    I
    
    2009
    
    1993 to presentAllan I. Brown
    
    69
    
    I
    
    2009
    
    1999 to presentGreg Mays
    
    63
    
    II
    
    2010
    
    2004 to presentBradford Nugent
    
    30
    
    II
    
    2010
    
    2009 to presentIra Tochner
    
    48
    
    II
    
    2010
    
    2006 to presentTerrence Wallock
    
    65
    
    III
    
    2008
    
    2006 to present
   Business History of Directors and Executive Officers
   22




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Section 16(a) Beneficial Ownership Reporting Compliance
  Code of Ethics
  23




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Audit Committee Financial Expert
   
 Item 11. Executive Compensation
 Compensation Discussion and Analysis
 Overview
  
    
    to discharge the Board of Directors responsibilities relating to the compensation of
the Companys directors, officers and key employees;
    
    to be responsible for the administration of the Companys incentive compensation and
stock plans;
    
    to be responsible for the review and recommendation to the Board of Directors of the
Companys Compensation Discussion and Analysis; and
    
    to be responsible for the production of an annual report on executive compensation for
inclusion in the Companys proxy statement or Form 10-K, as applicable.
  Compensation Philosophy and Objectives
  
    
    provide competitive compensation that will attract and retain qualified officers
and key employees;
    
    reward officers and key employees for their contributions to the Company; and
    
    align officers and key employees interests with the interests of shareholders.
  Setting Executive Compensation
   24




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2009 Executive Compensation Components
     Tax and Accounting Implications
 Deductibility of Executive Compensation:
  Nonqualified Deferred Compensation:
  Accounting for Stock-Based Compensation:
  25




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Summary Compensation Table
  (b)(a)
    
    All OtherName
    
    Year
    
    Salary
    
    Compensation
    
    TotalGreg Mays
    
    
    2009
    
    
    $
    210,000
    
    
    $
    56,000
    (c)
    
    $
    266,000Chief Executive Officer,
    
    
    2008
    
    
    
    210,000
    
    
    
    74,000
    (d)
    
    
    284,000Chief Financial Officer,
and Director
    
    
    2007
    
    
    
    210,000
    
    
    
    66,000
    (e)
    
    
    276,000
 
 (a)
    
    All cash compensation received in capacity as an executive officer consists of salary.(b)
    
    In accordance with the rules of the Securities and Exchange Commission, other compensation in
the form of perquisites and other personal benefits have been omitted because the aggregate amount
of such perquisites and other personal benefits was less than $10,000.(c)
    
    Amount consists of $50,000 for board retainer and $6,000 for board meeting fees.(d)
    
    Amount consists of $50,000 for board retainer and $24,000 for board meeting fees.(e)
    
    Amount consists of $50,000 for board retainer and $16,000 for board meeting fees. Grants of Plan-Based Awards
  Executive Services Agreements with Officers
     26




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Outstanding Equity Awards at Fiscal Year-End
  Number ofSecuritiesUnderlyingUnexercised
    
    Option
    
    OptionOptions
    
    Exercise
    
    ExpirationName and Principal Position
    
    Exercisable
    
    Price
    
    DateGreg Mays
    
    
    10,000
    
    
    $
    0.10
    
    
    
    05/09/13Chief Executive Officer,Chief Financial Officer, andDirector
 Option Exercises and Stock Vested
  Post-Employment Compensation
  Potential Payments upon Termination
 Voluntary Termination:
  Involuntary Termination:
  Retirement:
  Change in Control:
  Health Insurance Benefits:
  27




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Directors Compensation
  (a)FeesEarnedor PaidName
    
    in Cash
    
    TotalJoseph Bartlett
    
    $
    110,000
    (b)
    
    $
    110,000Allan Brown
    
    
    105,000
    (c)
    
    
    105,000Bradford Nugent
    
    
    53,833
    (d)
    
    
    53,833Erika Paulson
    
    
    4,167
    (e)
    
    
    4,167Ira Tochner
    
    
    56,000
    (f)
    
    
    56,000Terry Wallock
    
    
    58,000
    (g)
    
    
    58,000
 
 (a)
    
    Directors are paid an annual retainer of $50,000. Directors also receive a fee of $2,000
for each Board of Directors, Audit and Compensation Committee meeting attended. The chairmen of
the Audit and the Compensation Committees also receive annual retainers of $7,500 and $5,000,
respectively, plus an additional $500 for each committee meeting they chair.(b)
    
    Amount consists of $50,000 for board retainer, $20,500 for board meeting fees, $12,000 in
other board fees, $20,000 for Special Committee fee, and $7,500 for Audit Committee chair fee. Mr.
Bartlett held 30,000 stock options, all of which were vested, at December 31, 2009.(c)
    
    Amount consists of $50,000 for board retainer, $18,000 for board meeting fees, $12,000 in
other board fees, $20,000 for Special Committee fee, and $5,000 for Compensation Committee chair
fee. Mr. Brown held 20,000 stock options, all of which were vested, at December 31, 2009.(d)
    
    Amount consists of $45,833 for board retainer and $8,000 for board meeting fees. Mr. Nugent
joined the Companys Board of Directors effective January 31, 2009.(e)
    
    Amount is for board retainer. Ms. Paulson resigned from the Companys Board of Directors
effective January 31, 2009.(f)
    
    Amount consists of $50,000 for board retainer and $6,000 for board meeting fees.(g)
    
    Amount consists of $50,000 for board retainer and $8,000 for board meeting fees. Mr. Wallock
held 5,000 stock options, all of which were vested, at December 31, 2009. Executive Services Agreements with Directors
  28




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Compensation Committee Interlocks and Insider Participation
  Compensation Committee Report
   
  29




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##### Table of Contents



Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
  Security Ownership of Certain Beneficial Owners
  Number of SharesName and Address
    
    Of Common Stock
    
    Percentage OfOf Beneficial Owner (a)
    
    Beneficially Owned
    
    ClassYucaipa and affiliates (b)(c)(d)
Overseas Toys, L.P.
OA3, LLC
Multi-Accounts, LLC
Ronald W. Burkle
    
    
    37,940,756
    
    
    
    70.0
    %Everest Special Situations Fund L.P. (c)(d)
Maoz Everest Fund Management Ltd.
Elchanan Maoz
Platinum House
21 H arba a Street
Tel Aviv 64739 Israel
    
    
    3,388,091
    
    
    
    6.25
    %
 
 (a)
    
    The number of shares beneficially owned by each stockholder is determined in accordance with
the rules of the Securities and Exchange Commission and is not necessarily indicative of beneficial
ownership for any other purpose. Under these rules, beneficial ownership includes those shares of
common stock that the stockholder has sole or shared voting or investment power and any shares of
common stock that the stockholder has a right to acquire within sixty (60) days after March 12,
2010, through the exercise of any option, warrant or other right. The percentage ownership of the
outstanding common stock, however, is based on the assumption, expressly required by the rules of
the Securities and Exchange Commission, that only the person or entity whose ownership is being
reported has converted options, warrants or other rights into shares of common stock.(b)
    
    Overseas Toys, L.P. is an affiliate of Yucaipa. Multi-Accounts, LLC is the sole general
partner of Overseas Toys, L.P., and OA3, LLC is the sole managing member of Multi-Accounts, LLC.
Ronald W. Burkle is the sole managing member of OA3, LLC. The address of each of Overseas Toys,
L.P., Multi-Accounts, LLC, OA3, LLC, and Ronald W. Burkle is 9130 West Sunset Boulevard, Los
Angeles, California 90069.(c)
    
    Based on 54,201,080 shares of common stock outstanding as of March 12, 2010.(d)
    
    The information concerning these holders is based solely on information contained in filings
pursuant to the Securities Exchange Act of 1934. 30




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Security Ownership of Management
  Number of SharesName and Address
    
    Of Common Stock
    
    Percentage OfOf Beneficial Owner (a)
    
    Beneficially Owned
    
    Class (b)Allan I. Brown (c)
    
    
    1,133,023
    
    
    
    2.1
    %Joseph W. Bartlett (d)
    
    
    30,000
    
    
    
    *Greg Mays (e)
    
    
    10,000
    
    
    
    *Bradford Nugent
    
    
    
    
    
    
    Ira Tochner
    
    
    
    
    
    
    Terrence Wallock (f)
    
    
    5,000
    
    
    
    *All directors and executive officers as
a group (6 persons)
    
    
    1,178,023
    
    
    
    2.2
    %
 
 *
    
    Represents less than 1%(a)
    
    The address of each of the directors and executive officers is c/o Simon Worldwide, Inc., 5200
W. Century Boulevard, Suite 420, Los Angeles, California, 90045. The number of shares beneficially
owned by each stockholder is determined in accordance with the rules of the Securities and Exchange
Commission and is not necessarily indicative of beneficial ownership for any other purpose. Under
these rules, beneficial ownership includes those shares of common stock that the stockholder has
sole or shared voting or investment power and any shares of common stock that the stockholder has a
right to acquire within sixty (60) days after March 12, 2010, through the exercise of any option,
warrant or other right. The percentage ownership of the outstanding common stock, however, is
based on the assumption, expressly required by the rules of the Securities and Exchange Commission,
that only the person or entity whose ownership is being reported has converted options, warrants or
other rights.(b)
    
    Based on 54,201,080 shares of common stock outstanding as of March 12, 2010.(c)
    
    Includes 20,000 shares issuable pursuant to stock options exercisable within 60 days of March
12, 2010. Mr. Brown has the sole power to vote, or to direct the vote of, and the sole power to
dispose, or to direct the disposition of, 1,113,023 shares of common stock.(d)
    
    The 30,000 shares are issuable pursuant to stock options exercisable within 60 days of March
12, 2010.(e)
    
    The 10,000 shares are issuable pursuant to stock options exercisable within 60 days of March
12, 2010.(f)
    
    The 5,000 shares are issuable pursuant to stock options exercisable within 60 days of March 12,
2010. 31




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Securities Authorized for Issuance Under Equity Compensation Plans
  Number of Sharesof Common StockNumber of Shares
    
    
    
    
    
    Available forof Common Stock
    
    Weighted-
    
    Future Issuanceto be Issued Upon
    
    Average
    
    (excluding thoseExercise of
    
    Exercise Price
    
    in column (a))Outstanding Stock
    
    of Outstanding
    
    Under the StockOptions
    
    Stock Options
    
    Option PlansPlans Approved by Stockholders
    
    
    65,000
    
    
    $.92 per share
    
    NonePlans Not Approved by
Stockholders
    
    Not applicable
    
    Not applicable
    
    Not applicableTotal
    
    
    65,000
    
    
    $.92 per share
    
    None
 
 Item 13. Certain Relationships, Related Transactions and Director Independence
  
 Item 14. Principal Accounting Fees and Services
  Fiscal Year2009
    
    
    2008(in thousands)Audit fees (a)
    
    $
    139
    
    
    $
    168Audit-related fees (b)
    
    
    
    
    
    
    Tax fees (c)
    
    
    35
    
    
    
    40All other fees (d)
    
    
    
    
    
    
    Total
    
    $
    174
    
    
    $
    208
 
 (a)
    
    Audit fees are related to the audit of the Companys consolidated annual financial statements,
review of the interim consolidated financial statements, and services normally provided by the
Companys independent registered public accounting firm in connection with statutory and regulatory
filings and engagements.(b)
    
    Audit-related fees are for assurance and related services that are reasonably related to the
performance of the audit or review of the Companys consolidated financial statements and are not
reported under Audit fees.(c)
    
    Tax fees are related to tax compliance, planning, and consulting.(d)
    
    All other fees are for services other than those reported in the other categories. 32




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Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent Auditor
  33




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PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
 Documents Filed as Part of this Report
  
    
    Consolidated Balance Sheets as of December 31, 2009 and 2008
    
    Consolidated Statements of Operations for the years ended December 31, 2009, 2008
and 2007
    
    Consolidated Statements of Stockholders Equity (Deficit) for the years ended
December 31, 2009, 2008 and 2007
    
    Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008
and 2007
    
    Notes to Consolidated Financial Statements
  Exhibits
  34




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SIGNATURES
  SIMON WORLDWIDE, INC./s/ Greg Mays

Greg MaysChief Executive Officer andChief Financial OfficerMarch 26, 2010
  /s/ Joseph W. Bartlett

Joseph W. Bartlett
    
    Director
    
    March 26, 2010/s/ Allan I. Brown

Allan I. Brown
    
    Director
    
    March 26, 2010/s/ Greg Mays

Greg Mays
    
    Director, Chief Executive Officer, and Chief
Financial Officer
    
    March 26, 2010/s/ Bradford Nugent

Bradford Nugent
    
    Director
    
    March 26, 2010/s/ Ira Tochner

Ira Tochner
    
    Director
    
    March 26, 2010/s/ Terrence Wallock

Terrence Wallock
    
    Director
    
    March 26, 2010
 35




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##### Table of Contents



EXHIBITS
 ExhibitNumber
    
    Description2.1(4)
    
    Securities Purchase Agreement dated September 1, 1999, between the Registrant and
Overseas Toys, L.P.2.2(6)
    
    Purchase Agreement between the Company and Rockridge Partners, Inc., dated January
20, 2001, as amended by Amendment No. 1 to the Purchase Agreement, dated February 15,
20012.3(7)
    
    March 12, 2002, Letter Agreement between Cyrk and Simon, as amended by Letter
Agreement dated as of March 22, 20022.4(7)
    
    Mutual Release Agreement between Cyrk and Simon2.5(8)
    
    Letter Agreement Between Cyrk and Simon, dated December 20, 20022.6(10)
    
    Settlement Agreement and Mutual General Release between Cyrk and Simon dated January
31, 20062.7(10)
    
    Subordinated Promissory Note in the principal amount of $1,410,000 from Cyrk to Simon
dated January 31, 20063.1(11)
    
    Restated Certificate of Incorporation of the Registrant3.2(10)
    
    Amended and Restated By-laws of the Registrant, effective March 27, 20063.3(5)
    
    Certificate of Designation for Series A Senior Cumulative Participating Convertible
Preferred Stock4.1(1)
    
    Specimen certificate representing Common Stock10.1(2)(3)
    
    1993 Omnibus Stock Plan, as amended10.10(5)
    
    Registration Rights Agreement between the Company and Overseas Toys, L.P.10.18(6)
    
    Subordinated Promissory Note by Rockridge Partners, Inc. in favor of the Company
dated February 15, 200110.28(9)
    
    February 7, 2003, letter agreement with Greg Mays regarding 2002 and 2003 compensation10.29(9)
    
    May 30, 2003, Executive Services Agreements with Joseph Bartlett, Allan Brown,
Gregory Mays, and Terrence Wallock10.30(10)
    
    May 3, 2004, Amendment No. 1 to Executive Services Agreements with Messrs. Bartlett
and Brown, (replaces previously filed copies of these amendments)10.31(10)
    
    March 27, 2006, Amendment No. 2 to Wallock Executive Services Agreement10.32(10)
    
    March 27, 2006, New Executive Services Agreement with Mr. Mays31
    
    Certifications pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
(the Exchange Act), filed herewith32
    
    Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906
of the Sarbanes- Oxley Act of 2002, filed herewith
 36




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##### Table of Contents



Footnotes:(1)
    
    Filed as an exhibit to the Registrants Registration Statement on
Form S-1 (Registration No. 33-63118) or an amendment thereto and
incorporated herein by reference.(2)
    
    Management contract or compensatory plan or arrangement.(3)
    
    Filed as an exhibit to the Annual Report on Form 10-K for the year
ended December 31, 1994, and incorporated herein by reference.(4)
    
    Filed as an exhibit to the Registrants Report on Form 8-K dated
September 1, 1999, and incorporated herein by reference.(5)
    
    Filed as an exhibit to the Annual Report on Form 10-K for the year
ended December 31, 1999, and incorporated herein by reference.(6)
    
    Filed as an exhibit to the Registrants Report on Form 8-K dated
February 15, 2001, and incorporated herein by reference.(7)
    
    Filed as an exhibit to the Registrants original Report on Form 10-K
for the year ended December 31, 2001, filed on March 29, 2002, and
incorporated herein by reference.(8)
    
    Filed as an exhibit to the Registrants Report on Form 10-K/A for the
year ended December 31, 2001, filed on April 18, 2003, and
incorporated herein by reference.(9)
    
    Filed as an exhibit to the Registrants Report on Form 10-K for the
year ended December 31, 2002, filed on July 29, 2003, and
incorporated herein by reference.(10)
    
    Filed as an exhibit to the Registrants Report on Form 10-K for the
year ended December 31, 2005, filed on March 31, 2006, and
incorporated herein by reference.(11)
    
    Filed as an exhibit to the Registrants Report on Form 10-Q for the
quarter ended December 31, 2008, filed on November 13, 2008, and
incorporated herein by reference. 37




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    Accounting for Purchases of Life Insurance 
Determining the Amount That Could Be Realized in Accordance with FASB Technical Bulletin No. 85-4 Investments in
Insurance Contracts
   
 F-1




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##### Table of Contents



PART IV  FINANCIAL INFORMATION
 SIMON WORLDWIDE, INC.
 
 CONSOLIDATED BALANCE SHEETS
  December 31,
    
    
    December 31,2009
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    14,567
    
    
    $
    16,576Prepaid expenses and other current assets
    
    
    155
    
    
    
    180Other receivable
    
    
    
    
    
    
    350Assets from discontinued operations to be disposed of  current (Note 4)
    
    
    198
    
    
    
    84Total current assets
    
    
    14,920
    
    
    
    17,190Investments
    
    
    137
    
    
    
    295Other assets
    
    
    24
    
    
    
    25Assets from discontinued operations to be disposed of  non-current (Note 4)
    
    
    362
    
    
    
    436Total non-current assets
    
    
    523
    
    
    
    756$
    15,443
    
    
    $
    17,946LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable  trade
    
    $
    56
    
    
    $
    125Accrued expenses and other current liabilities
    
    
    152
    
    
    
    379Liabilities from discontinued operations  current (Note 4)
    
    
    560
    
    
    
    520Total current liabilities
    
    
    768
    
    
    
    1,024Stockholders equity:Common stock, $.01 par value; 100,000,000 shares authorized;
54,201,080 shares issued and outstanding net of 412,869 treasury shares
at par value at December 31, 2009 and 2008
    
    
    542
    
    
    
    542Additional paid-in capital
    
    
    153,303
    
    
    
    153,303Deficit
    
    
    (139,171
    )
    
    
    (137,055
    )Accumulated other comprehensive income
    
    
    1
    
    
    
    132Total stockholders equity
    
    
    14,675
    
    
    
    16,922$
    15,443
    
    
    $
    17,946
  F-2




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##### Table of Contents



SIMON WORLDWIDE, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
   2009
    
    
    2008
    
    
    2007Revenue
    
    $
    
    
    
    $
    
    
    
    $
    General and administrative expenses
    
    
    2,189
    
    
    
    3,560
    
    
    
    2,896Operating loss from continuing operations
    
    
    (2,189
    )
    
    
    (3,560
    )
    
    
    (2,896
    )Interest income
    
    
    140
    
    
    
    330
    
    
    
    800Gain (loss) on settlement
    
    
    7
    
    
    
    (50
    )
    
    
    Investment income (Note 5)
    
    
    
    
    
    
    23
    
    
    
    3Equity in Yucaipa AEC earnings (Note 5)
    
    
    7
    
    
    
    2,101
    
    
    
    Loss from continuing operations before income taxes
    
    
    (2,035
    )
    
    
    (1,156
    )
    
    
    (2,093
    )Income tax provision
    
    
    
    
    
    
    
    
    
    
    Net loss from continuing operations
    
    
    (2,035
    )
    
    
    (1,156
    )
    
    
    (2,093
    )Income (loss) from discontinued operations, net of tax
(Note 4)
    
    
    (81
    )
    
    
    1,777
    
    
    
    312Net income (loss)
    
    
    (2,116
    )
    
    
    621
    
    
    
    (1,781
    )Excess of carrying value of preferred stock over fair value
of common stock issued (Note 9)
    
    
    
    
    
    
    19,688
    
    
    
    Preferred stock dividends (Note 9)
    
    
    
    
    
    
    (979
    )
    
    
    (1,322
    )Net income (loss) available to common stockholders
    
    $
    (2,116
    )
    
    $
    19,330
    
    
    $
    (3,103
    )Income (loss) per share from continuing operations available
to common stockholders:Income (loss) per common share  basic
    
    $
    (0.04
    )
    
    $
    0.65
    
    
    $
    (0.21
    )Income (loss) per common share  diluted
    
    $
    (0.04
    )
    
    $
    0.62
    
    
    $
    (0.21
    )Weighted average shares outstanding  basic
    
    
    54,201
    
    
    
    27,041
    
    
    
    16,465Weighted average shares outstanding  diluted
    
    
    54,201
    
    
    
    30,054
    
    
    
    16,465Income per share from discontinued operations:Income per common share  basic
    
    $
    0.00
    
    
    $
    0.07
    
    
    $
    0.02Income per common share  diluted
    
    $
    0.00
    
    
    $
    0.06
    
    
    $
    0.02Weighted average shares outstanding  basic
    
    
    54,201
    
    
    
    27,041
    
    
    
    16,465Weighted average shares outstanding  diluted
    
    
    54,201
    
    
    
    30,054
    
    
    
    16,465Net income (loss) per share available to common
stockholders:Income (loss) per common share  basic
    
    $
    (0.04
    )
    
    $
    0.72
    
    
    $
    (0.19
    )Income (loss) per common share  diluted
    
    $
    (0.04
    )
    
    $
    0.68
    
    
    $
    (0.19
    )Weighted average shares outstanding  basic
    
    
    54,201
    
    
    
    27,041
    
    
    
    16,465Weighted average shares outstanding  diluted
    
    
    54,201
    
    
    
    30,054
    
    
    
    16,465
  F-3




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##### Table of Contents



SIMON WORLDWIDE, INC.
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)
   AccumulatedCommon
    
    
    Additional
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    TotalStock
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    Comprehensive
    
    
    Stockholders'($.01 Par Value)
    
    
    Capital
    
    
    Deficit
    
    
    Income (Loss)
    
    
    Income (Loss)
    
    
    Equity (Deficit)Balance, December 31, 2006
    
    $
    167
    
    
    $
    138,502
    
    
    $
    (153,990
    )
    
    
    
    
    
    $
    8,085
    
    
    $
    (7,236
    )Change in accounting principle
    
    
    
    
    
    
    
    
    
    
    708
    
    
    
    
    
    
    
    
    
    
    
    708Treasury shares
    
    
    (4
    )
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    (1,781
    )
    
    $
    (1,781
    )
    
    
    
    
    
    
    (1,781
    )Other comprehensive loss:Unrealized loss on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,237
    )
    
    
    (5,237
    )
    
    
    (5,237
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (7,018
    )Dividends on preferred stock
    
    
    
    
    
    
    
    
    
    
    (1,322
    )
    
    
    
    
    
    
    
    
    
    
    (1,322
    )Balance, December 31, 2007
    
    
    163
    
    
    
    138,506
    
    
    
    (156,385
    )
    
    
    
    
    
    
    2,848
    
    
    
    (14,868
    )Conversion of preferred
stock to common stock
    
    
    379
    
    
    
    14,797
    
    
    
    19,688
    
    
    
    
    
    
    
    
    
    
    
    34,864Comprehensive loss:Net income
    
    
    
    
    
    
    
    
    
    
    621
    
    
    $
    621
    
    
    
    
    
    
    
    621Other comprehensive loss:Unrealized loss on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,716
    )
    
    
    (2,716
    )
    
    
    (2,716
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (2,095
    )Dividends on preferred stock
    
    
    
    
    
    
    
    
    
    
    (979
    )
    
    
    
    
    
    
    
    
    
    
    (979
    )Balance, December 31, 2008
    
    
    542
    
    
    
    153,303
    
    
    
    (137,055
    )
    
    
    
    
    
    
    132
    
    
    
    16,922Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    (2,116
    )
    
    $
    (2,116
    )
    
    
    
    
    
    
    (2,116
    )Other comprehensive loss:Unrealized loss on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (131
    )
    
    
    (131
    )
    
    
    (131
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (2,247
    )Balance, December 31, 2009
    
    $
    542
    
    
    $
    153,303
    
    
    $
    (139,171
    )
    
    
    
    
    
    $
    1
    
    
    $
    14,675
  F-4




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##### Table of Contents



SIMON WORLDWIDE, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
  2009
    
    
    2008
    
    
    2007Cash flows from operating activities:Net income (loss)
    
    $
    (2,116
    )
    
    $
    621
    
    
    $
    (1,781
    )Income (loss) from discontinued operations
    
    
    (81
    )
    
    
    1,777
    
    
    
    312Loss from continuing operations
    
    
    (2,035
    )
    
    
    (1,156
    )
    
    
    (2,093
    )Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:Equity in Yucaipa AEC earnings
    
    
    (7
    )
    
    
    (119
    )
    
    
    Gain on settlement
    
    
    (7
    )
    
    
    
    
    
    
    Charge for impaired investment
    
    
    3
    
    
    
    30
    
    
    
    2Cash provided by discontinued operations
    
    
    32
    
    
    
    1,867
    
    
    
    391Cash transferred from (to) discontinued operations
    
    
    (81
    )
    
    
    (103
    )
    
    
    387Increase (decrease) in cash from changes
in working capital items:Prepaid expenses and other current assets
    
    
    375
    
    
    
    115
    
    
    
    (91
    )Accounts payable
    
    
    (69
    )
    
    
    (262
    )
    
    
    57Accrued expenses and other current liabilities
    
    
    (220
    )
    
    
    66
    
    
    
    18Net cash provided by (used in) operating activities
    
    
    (2,009
    )
    
    
    438
    
    
    
    (1,329
    )Cash flows from investing activities:Cash provided by discontinued operations
    
    
    
    
    
    
    
    
    
    
    208Other, net
    
    
    
    
    
    
    4
    
    
    
    26Net cash provided by investing activities
    
    
    
    
    
    
    4
    
    
    
    234Net increase (decrease) in cash and cash equivalents
    
    
    (2,009
    )
    
    
    442
    
    
    
    (1,095
    )Cash and cash equivalents, beginning of period
    
    
    16,576
    
    
    
    16,134
    
    
    
    17,229Cash and cash equivalents, end of period
    
    $
    14,567
    
    
    $
    16,576
    
    
    $
    16,134Supplemental disclosure of cash flow information:Cash paid during the period for:Income taxes
    
    $
    76
    
    
    $
    11
    
    
    $
    57
  F-5




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##### Table of Contents



SIMON WORLDWIDE, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Nature of Business, Loss of Customers, Resulting Events, Going Concern and Managements Plans
      F-6




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##### Table of Contents



2. Significant Accounting Policies
 Principles of Consolidation
  Change in Accounting Principle
 Investments in Insurance Contracts
 Stock-Based Compensation
  Use of Estimates
  Concentration of Credit Risk
  Financial Instruments
  F-7




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##### Table of Contents



Cash Equivalents
  Investments
   Income Taxes
  Earnings (Loss) Per Common Share
  Recently Issued Accounting Standards
 TM Subsequent Events
  TM
 F-8




---



##### Table of Contents



3. Commitments and Contingencies
    F-9




---



##### Table of Contents



F-10




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##### Table of Contents



4. Discontinued Operations
   December 31,
    
    
    December 31,2009
    
    
    2008Assets:Cash and cash equivalents
    
    $
    198
    
    
    $
    84Total current assets
    
    
    198
    
    
    
    84Other assets
    
    
    362
    
    
    
    436Assets from discontinued operations to be disposed of
    
    $
    560
    
    
    $
    520Liabilities:Accrued expenses and other current liabilities
    
    $
    560
    
    
    $
    520Total current liabilities
    
    
    560
    
    
    
    520Liabilities from discontinued operations
    
    $
    560
    
    
    $
    520
  2009
    
    
    2008
    
    
    2007Net sales
    
    $
    
    
    
    $
    
    
    
    $
    Cost of sales
    
    
    
    
    
    
    
    
    
    
    Gross profit
    
    
    
    
    
    
    
    
    
    
    General and administrative expenses
    
    
    114
    
    
    
    548
    
    
    
    47Gain on settlements
    
    
    (33
    )
    
    
    (2,380
    )
    
    
    (314
    )Operating income (loss)
    
    
    (81
    )
    
    
    1,832
    
    
    
    267Interest income
    
    
    
    
    
    
    19
    
    
    
    45Net income (loss) from
discontinued operations
    
    
    (81
    )
    
    
    1,851
    
    
    
    312Income tax provision
    
    
    
    
    
    
    (74
    )
    
    
    Net income (loss)
    
    $
    (81
    )
    
    $
    1,777
    
    
    $
    312
 General and Administrative Expenses
  F-11




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##### Table of Contents



Gain on Settlement of Obligations
    Interest Income
  5. Investments
 Yucaipa AEC Associates
    F-12




---



##### Table of Contents



Other Investments
    6. Lease Obligations and Other Commercial Commitments
    7. Income Taxes
  F-13




---



##### Table of Contents



2009
    
    
    2008Deferred tax assets:Net operating losses
    
    $
    26,476
    
    
    $
    25,313Capital losses
    
    
    6,599
    
    
    
    295Other asset reserves
    
    
    4,965
    
    
    
    9,324AMT credit
    
    
    649
    
    
    
    649Deferred compensation
    
    
    49
    
    
    
    36Depreciation
    
    
    (1
    )
    
    
    1Valuation allowance
    
    
    (38,737
    )
    
    
    (35,618
    )$
    
    
    
    $
    
   2009
    
    2008
    
    2007Federal tax (benefit) rate
    
    
    (34
    )%
    
    
    (34
    )%
    
    
    (34
    )%Increase (decrease) in taxes resulting from:State income taxes
    
    
    (6
    )
    
    
    (6
    )
    
    
    (6
    )Change in valuation allowance
    
    
    38
    
    
    
    40
    
    
    
    37Life insurance
    
    
    (2
    )
    
    
    
    
    
    
    30
    %
    
    
    0
    %
    
    
    0
    %
  F-14




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##### Table of Contents



8. Accrued Expenses and Other Current Liabilities
  Discontinued
    
    
    ContinuingOperations
    
    
    Operations
    
    
    TotalAs of December 31,2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008(in thousands)Accrued payroll, related items and
deferred compensation
    
    $
    
    
    
    $
    
    
    
    $
    34
    
    
    $
    28
    
    
    $
    34
    
    
    $
    28Contingent loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    167
    
    
    
    
    
    
    
    167Professional fees
    
    
    
    
    
    
    
    
    
    
    118
    
    
    
    119
    
    
    
    118
    
    
    
    119Insurance premiums
    
    
    560
    
    
    
    520
    
    
    
    
    
    
    
    
    
    
    
    560
    
    
    
    520Income taxes payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    65
    
    
    
    
    
    
    
    65$
    560
    
    
    $
    520
    
    
    $
    152
    
    
    $
    379
    
    
    $
    712
    
    
    $
    899
 9. Redeemable Preferred Stock
      F-15




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##### Table of Contents



10. Stock Plan
 1993 Omnibus Stock Plan
    1997 Acquisition Stock Plan
   2009
    
    2008
    
    2007Weighted
    
    
    
    
    
    Weighted
    
    
    
    
    
    WeightedExercise
    
    
    
    
    
    Exercise
    
    
    
    
    
    ExerciseShares
    
    Price
    
    Shares
    
    Price
    
    Shares
    
    PriceOutstanding at the beginning of year
    
    
    100,000
    
    
    $
    2.59
    
    
    
    175,000
    
    
    $
    4.40
    
    
    
    180,000
    
    
    $
    4.62Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Expired/Forfeited
    
    
    35,000
    
    
    
    5.69
    
    
    
    75,000
    
    
    
    6.82
    
    
    
    5,000
    
    
    
    12.25Outstanding at end of year
    
    
    65,000
    
    
    
    0.92
    
    
    
    100,000
    
    
    
    2.59
    
    
    
    175,000
    
    
    
    4.40Options exercisable at year-end
    
    
    65,000
    
    
    
    0.92
    
    
    
    100,000
    
    
    
    2.59
    
    
    
    175,000
    
    
    
    4.40Options available for future grant
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted average fair value of
options granted during the year
    
    Not applicable
    
    
    
    
    
    
    Not applicable
    
    
    
    
    
    
    Not applicable
 F-16




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##### Table of Contents



Options Outstanding

    

    Options ExercisableWeightedAverageRange of
    
    
    
    
    
    
    Remaining
    
    
    Weighted
    
    
    Aggregate
    
    
    
    
    
    
    Weighted
    
    
    AggregateExercise
    
    
    Number
    
    
    Contractual
    
    
    Average
    
    
    Intrinsic
    
    
    Number
    
    
    Average
    
    
    IntrinsicPrices
    
    
    Outstanding
    
    
    Life (Years)
    
    
    Price
    
    
    Value
    
    
    Exercisable
    
    
    Price
    
    
    Value$
    0.10

    
    
    
    
    $
    1.99
    
    
    
    55,000
    
    
    
    3.35
    
    
    $
    0.10
    
    
    $
    13,200
    
    
    
    55,000
    
    
    $
    0.10
    
    
    $
    13,200$
    2.00

    
    
    
    
    $
    5.38
    
    
    
    5,000
    
    
    
    1.24
    
    
    
    2.00
    
    
    
    
    
    
    
    5,000
    
    
    
    2.00
    
    
    
    $
    7.56

    
    
    
    
    $
    8.81
    
    
    
    5,000
    
    
    
    0.24
    
    
    
    8.81
    
    
    
    
    
    
    
    5,000
    
    
    
    8.81
    
    
    
    $
    0.10

    
    
    
    
    $
    8.81
    
    
    
    65,000
    
    
    
    2.95
    
    
    $
    0.92
    
    
    
    
    
    
    
    65,000
    
    
    $
    0.92
  11. Related Party Transactions
      12. Segments and Related Information
   F-17




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##### Table of Contents



13. Earnings per Share Disclosure
   2009
    
    
    2008
    
    
    2007Weighted average shares outstanding  basic
    
    
    54,201,080
    
    
    
    27,041,304
    
    
    
    16,465,062Convertible preferred stock
    
    
    
    
    
    
    3,012,392
    
    
    
    Weighted average shares outstanding  diluted
    
    
    54,201,080
    
    
    
    30,053,696
    
    
    
    16,465,062
   2009
    
    
    2008
    
    
    2007Income
    
    
    Shares
    
    
    Per Share
    
    
    Income
    
    
    Shares
    
    
    Per Share
    
    
    Income
    
    
    Shares
    
    
    Per Share(Numerator)
    
    
    (Denominator)
    
    
    Amount
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    Amount
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    AmountBasic EPS:Loss from continuing operations
    
    $
    (2,035
    )
    
    
    
    
    
    
    
    
    
    $
    (1,156
    )
    
    
    
    
    
    
    
    
    
    $
    (2,093
    )Excess of carrying value of
preferred stock over fair value
of common stock issued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,688
    
    
    
    
    
    
    
    
    
    
    
    Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (979
    )
    
    
    
    
    
    
    
    
    
    
    (1,322
    )Income (loss) from continuing
operations available to
common stockholders
    
    $
    (2,035
    )
    
    
    54,201,080
    
    
    $
    (0.04
    )
    
    $
    17,553
    
    
    
    27,041,304
    
    
    $
    0.65
    
    
    $
    (3,415
    )
    
    
    16,465,062
    
    
    $
    (0.21
    )Income from discontinued operations
    
    $
    (81
    )
    
    
    54,201,080
    
    
    $
    0.00
    
    
    $
    1,777
    
    
    
    27,041,304
    
    
    $
    0.07
    
    
    $
    312
    
    
    
    16,465,062
    
    
    $
    0.02Net income (loss)
    
    $
    (2,116
    )
    
    
    
    
    
    
    
    
    
    $
    621
    
    
    
    
    
    
    
    
    
    
    $
    (1,781
    )Excess of carrying value of
preferred stock over fair value
of common stock issued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,688
    
    
    
    
    
    
    
    
    
    
    
    Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (979
    )
    
    
    
    
    
    
    
    
    
    
    (1,322
    )Net income (loss) available to
common stockholders
    
    $
    (2,116
    )
    
    
    54,201,080
    
    
    $
    (0.04
    )
    
    $
    19,330
    
    
    
    27,041,304
    
    
    $
    0.72
    
    
    $
    (3,103
    )
    
    
    16,465,062
    
    
    $
    (0.19
    )
 F-18




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##### Table of Contents



2009
    
    
    2008
    
    
    2007Income
    
    
    Shares
    
    
    Per Share
    
    
    Income
    
    
    Shares
    
    
    Per Share
    
    
    Income
    
    
    Shares
    
    
    Per Share(Numerator)
    
    
    (Denominator)
    
    
    Amount
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    Amount
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    AmountDiluted EPS:Loss from continuing operations
    
    $
    (2,035
    )
    
    
    
    
    
    
    
    
    
    $
    (1,156
    )
    
    
    
    
    
    
    
    
    
    $
    (2,093
    )Excess of carrying value of
preferred stock over fair value
of common stock issued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,688
    
    
    
    
    
    
    
    
    
    
    
    Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,322
    )Income (loss) from continuing
operations available to
common stockholders
    
    $
    (2,035
    )
    
    
    54,201,080
    
    
    $
    (0.04
    )
    
    $
    18,532
    
    
    
    30,053,696
    
    
    $
    0.62
    
    
    $
    (3,415
    )
    
    
    16,465,062
    
    
    $
    (0.21
    )Income from discontinued operations
    
    $
    (81
    )
    
    
    54,201,080
    
    
    $
    0.00
    
    
    $
    1,777
    
    
    
    30,053,696
    
    
    $
    0.06
    
    
    $
    312
    
    
    
    16,465,062
    
    
    $
    0.02Net income (loss)
    
    $
    (2,116
    )
    
    
    
    
    
    
    
    
    
    $
    621
    
    
    
    
    
    
    
    
    
    
    $
    (1,781
    )Excess of carrying value of
preferred stock over fair value
of common stock issued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,688
    
    
    
    
    
    
    
    
    
    
    
    Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,322
    )Net income (loss) available to
common stockholders
    
    $
    (2,116
    )
    
    
    54,201,080
    
    
    $
    (0.04
    )
    
    $
    20,309
    
    
    
    30,053,696
    
    
    $
    0.68
    
    
    $
    (3,103
    )
    
    
    16,465,062
    
    
    $
    (0.19
    )
  F-19




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##### Table of Contents



14. Quarterly Results of Operations (Unaudited)
  First
    
    Second
    
    Third
    
    Fourth2009
    
    Quarter
    
    Quarter
    
    Quarter
    
    Quarter(in thousands, except per share data)Continuing operations:Net sales
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Gross profit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    
    (387
    )
    
    
    (479
    )
    
    
    (562
    )
    
    
    (607
    )Loss per common share available to common stockholders  basic and diluted
    
    
    (0.01
    )
    
    
    (0.01
    )
    
    
    (0.01
    )
    
    
    (0.01
    )Discontinued operations:Net sales
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Gross profit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    
    (94
    )
    
    
    13
    
    
    
    
    
    
    
    Income per common share available to common stockholders  basic and diluted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 First
    
    Second
    
    Third
    
    Fourth2008
    
    Quarter
    
    Quarter
    
    Quarter
    
    Quarter(in thousands, except per share data)Continuing operations:Net sales
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Gross profit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    
    (811
    )
    
    
    1,154
    
    
    
    (1,296
    )
    
    
    (203
    )Income (loss) per common share available to common stockholders  basic
    
    
    (0.07
    )
    
    
    0.05
    
    
    
    0.85
    
    
    
    (0.18
    )Income (loss) per common share available to common stockholders  diluted
    
    
    (0.07
    )
    
    
    0.04
    
    
    
    0.74
    
    
    
    (0.09
    )Discontinued operations:Net sales
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Gross profit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    
    (36
    )
    
    
    406
    
    
    
    1,571
    
    
    
    (164
    )Income (loss) per common share available to common stockholders  basic
    
    
    
    
    
    
    0.02
    
    
    
    0.08
    
    
    
    (0.03
    )Income (loss) per common share available to common stockholders  diluted
    
    
    
    
    
    
    0.02
    
    
    
    0.06
    
    
    
    (0.02
    )
 F-20