**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

**FORM 10-KSB**

**(Mark One)**

**x**                              ANNUALREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934

**Forthe fiscal year ended December 31, 2004**

**OR**

**o**                                 TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934

**Forthe transition period from***       * to *             *

**Commissionfile number:  000-30656**

**APOGEE TECHNOLOGY, INC.**

(Exact name of smallbusiness issuer as specified in its charter)

| **DELAWARE**                                                     | **04-3005815**                        |
|------------------------------------------------------------------|---------------------------------------|
| (State or other  jurisdiction  of incorporation or organization) | (I.R.S. Employer  Identification No.) |
| **129  MORGAN DRIVE**                                            | ** **                            |
| **NORWOOD,  MASSACHUSETTS**                                      | **02062**                             |
| (Address of  principal executive offices)                        | (Zip Code)                            |

 

Registrant’s telephonenumber, including area code: **(781) 551-9450**

Securities registeredpursuant to Section 12(b) of the Exchange Act:

|                                         | **Title of each class**  | ** ** | ** ** | **Name of each exchange on which registered** | ** ** |
|-----------------------------------------|--------------------------|------------|------------|-----------------------------------------------|------------|
| Common Stock,  $.01 Par Value Per Share | American Stock  Exchange |

 

Securities registeredpursuant to Section 12(g) of the Exchange Act:  **None**

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

Indicate by check mark ifdisclosure of delinquent filers pursuant to Item 405 of Regulation S-K is notcontained herein, and will not be contained, to the best of registrant’sknowledge, in definitive proxy or information statements incorporated byreference in Part III of this Form 10-KSB or any amendment tothis Form 10-KSB   o

Indicate by check markwhether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).Yes o   No x

For the year ended December 31,2004, the unaudited revenues of the Registrant were $6,947,936.

The aggregate market valueof the registrant’s voting and non-voting common stock held by non-affiliatesof the registrant on April 15, 2005, based on the closing price of theCommon Stock on The American Stock Exchange of $1.30 per share on such date was$9,156,849.

As of April 15, 2005,the registrant had 11,838,332 shares of common stock outstanding.

 

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**DOCUMENTS INCORPORATED BY REFERENCE**

The following documents(or parts thereof) are incorporated by reference into the following parts ofthis Form 10-KSB: Certain information required in Part III ofthis Annual Report on Form 10-KSB is incorporated from theRegistrant’s Proxy Statement for the Annual Meeting of Stockholders.

**NOTE**

**DUE TO THE COMPANY’SINABILITY TO COMPLETE THE AUDIT PROCESS FOR ITS FINANCIAL STATEMENTS FOR THEFISCAL YEAR ENDED DECEMBER 31, 2004, AUDITED FINANCIAL STATEMENTS, MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ANDOTHER FINANCIAL INFORMATION ARE NOT INCLUDED IN THIS DOCUMENT.**

**THE COMPANY ISUNABLE TO FILE ITS AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31,2004 AS A RESULT OF (I) THE RESIGNATION OF THE COMPANY’S INDEPENDENT REGISTEREDPUBLIC ACCOUNTANTS ON APRIL 12, 2005, AND (II) THE COMPANY’S REVIEW OF REVENUERECOGNITION FOR ITS CUSTOMERS DURING 2003 AND 2004.**

**UNAUDITED FINANCIALINFORMATION FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004, WHICH IS SUBJECT TOCHANGE UPON COMPLETION OF THE AUDIT, HAS BEEN INCLUDED IN A CURRENT REPORT ON FORM 8-KFILED ON THIS DATE. THE COMPANY EXPECTS TO BE ABLE TO COMPLETE THE RE-AUDITPROCSS FOR ITS 2003 FINANCIAL STATEMENTS AND TO COMPLETE THE AUDIT PROCESS FORITS 2004 FINANCIAL STATEMENTS BY JUNE 30, 2005.**

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**PART I**

**THIS ANNUAL REPORT ON FORM 10-KSB CONTAINSFORWARD-LOOKING STATEMENTS AS DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACTOF 1995. FOR THIS PURPOSE, ANY STATEMENTS CONTAINED HEREIN THAT ARE NOTSTATEMENTS OF HISTORICAL FACT MAY BE DEEMED TO BE FORWARD-LOOKINGSTATEMENTS. WITHOUT LIMITING THE FOREGOING, THE WORDS “BELIEVES”, “ANTICIPATES”,“PLANS”, “EXPECTS”, AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFYFORWARD-LOOKING STATEMENTS. THE IMPORTANT FACTORS DISCUSSED IN ITEM 1, “DESCRIPTIONOF BUSINESS”, AND ITEM 7, “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIALCONDITION AND RESULTS OF OPERATIONS”, AMONG OTHERS, COULD CAUSE ACTUAL FUTURERESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY FORWARD-LOOKING STATEMENTSMADE HEREIN AND PRESENTED ELSEWHERE BY MANAGEMENT FROM TIME TO TIME.**

**Item 1.**                        BUSINESS

Apogee Technology, Inc. (“Apogee” or the “Company”)designs, develops and markets silicon based products that incorporateproprietary technologies. The Company’s patented all-digital, high efficiencyDirect Digital Amplification (DDX®) integrated circuits (“ICs”) havebeen used by over 20 major consumer electronic brands in a wide range of audioproducts. The company is developing new System-on-Chip (“SOC”) products usingits analog and digital circuit designs and Micro-Electromechanical Systems (“MEMS”)technology for the consumer, automotive, communications and medical markets. TheCompany operates a worldwide marketing and sales organization and has officesin the US, China, Hong Kong, Taiwan and Japan.

In May 2004, the Company acquired the portfolioof MEMS intellectual property, trade secrets and know-how developed by StandardMEMS, Inc. Concurrently the Company hired a key staff from the formerStandard MEMS, Inc. and established a MEMS Division located in GreatRiver, New York. MEMS are devices produced using high volume IC manufacturingtechniques that include both microscopic mechanical systems and electricalcircuits. The Company intends to design, develop and market MEMS ICs to themedical, automotive, communications and consumer markets. At the appropriatetime, the Company will segment the financial reporting of the MEMS division.

Apogee was organized as a Delaware corporation on July 1,1987, and initially operated through its wholly owned subsidiary, ApogeeAcoustics, Incorporated (“Acoustics”). Apogee discontinued its loudspeakerbusiness under Acoustics in 1994 and, since that time has focused on theresearch, development and commercialization of DDX amplifier technology and,since May 2004, MEMS devices.

Apogee maintains an Internet site at *http://www.apogeeddx.com*. The information contained on theCompany’s Internet site is not incorporated by reference in this report, and itshould not be considered part of this report. The Company’s Annual Reports on Form 10-KSB,Quarterly Reports on Form 10-QSB, Current Reports on Form 8-K, andany amendments to those reports, are available free of charge on our website assoon as reasonably practicable after they are filed with, or furnished to, theSecurities and Exchange Commission.

Unless the contextotherwise requires, the terms “we”, “our”, “Company”, and “Apogee” as usedherein refer to Apogee Technology, Inc. and its subsidiary.

***Audio Division***

The Company believes the DDX technology’s all-digitaldesign and high efficiency operation has significant commercial benefits forconsumer electronic manufacturers, as well as end users, compared totraditional audio amplifier technology. The benefits include reducing finalproduct size and cost, providing 

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true digital audioreproduction, increasing audio functionality through digital integration andextending playback time in battery applications. DDX-based IC products areintended for a range of audio applications, including home theater systems,flat-panel TVs, powered speakers, car audio, commercial audio, and PCmulti-media. The Company markets DDX products using a worldwide network ofdirect sales staff, independent sales representatives and distributors.

Under a licensing agreement with STMicroelectronics,NV, one of the world’s largest semiconductor companies, the Company isproviding intellectual property to be used in royalty-bearing DDX-based ICproducts produced by STMicroelectronics. In addition, the Company andSTMicroelectronics have entered into a development agreement whereby thecompanies are developing and marketing new semiconductor products that leverageApogee’s DDX technology and STMicroelectronics’ intellectual property andsemiconductor design, development and manufacturing capability. The Company, in2004, also licensed its DDX-Controller technology to Zoran Corporation,Infra-Com Ltd., and a video IC company in order to expand market opportunitiesfor its DDX products.

The Company began the design, development andmarketing of audio amplifier ICs in 1996 based upon its DDX technology. The DDXamplifier solution is implemented by the combination of a DDX Controller and aDDX Power Device IC. The Company released its first Controller IC, the “DDX-2000”,in 1999 and since that time has released six additional Controller ICs. Thesedevices integrate from two to eight channels of DDX amplifier processing alongwith a range of digital audio processing functions. By combining DDX processingwith audio functions, such as bass/treble, the Company can provide a low cost,full system amplifier solution to consumer electronic manufacturers. Sinceinception, the Company has developed and released 13 DDX power devices that canprovide up to 240 watts of audio power. These integrated switched mode powerdevices operate at two to three times the efficiency of traditional audioamplifier ICs, thereby reducing amplifier size and cost. In 2004, the Companyintroduced a new family of all-in-one DDXi (“i” for integrated) amplificationsolutions that combine a DDX Controller and DDX Power Device into a singledevice. DDXi IC solutions significantly reduce system cost, size and complexityby eliminating the need for a separate audio processor, digital to analogconverter and amplifier chips. The Company expects to release one new DDXcontroller device, four new DDX power solutions and three new DDXi IntegratedAll-in-One solutions in 2005. The new ICs will extend the market opportunityfor DDX technology while also providing better value for current and new applications.These ICs are being developed to target specific high growth applications inthe consumer electronics market including flat-panel TVs, multimedia poweredspeakers and home theater systems.

In August 2004 the Company announced an agreementwith Infra-Com Ltd. to jointly develop and market ICs that will enablemanufacturers to provide pure digital wireless connectivity and amplificationto speakers. The Israel-U.S. Bi-national Industrial Research and Development(BIRD) Foundation awarded this joint program $560,000 for research anddevelopment because of its technological and marketing innovation. The Companyand Infra-Com have been working collaboratively in marketing and sellingcurrent chipset solutions and to design and develop an integrated IrGate/DDXsolution.

The Company markets its products using a worldwidenetwork of direct sales staff, independent sales representatives anddistributors. The Company’s sales headquarters are located in Norwood,Massachusetts with additional locations in China, Hong Kong, Japan and Taiwan. In addition, theCompany’s office located in Great River, New York will focus on marketing andselling MEMS related products. The Company also utilizes salesrepresentatives in Korea and Brazil as well as independent distributors in HongKong, China, Japan, Taiwan, and Singapore.

The Company’s audio ICshave been incorporated into a range of consumer electronic products. Themajority of these products are DVD receivers, which are part of an all-in-onehome theater system that combines a DVD player, AM/FM tuner, three to eightchannels of amplification, and speakers. DDX amplifiers are also being used incombination DVD/VCR receivers, A/V receivers, powered speaker 

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systems,high-end TVs, professional audio/video equipment, commercial audio systems,communication equipment, gaming systems and automotive systems. Over 30 millionDDX IC’s have been sold to date and have been used in over 50 differentconsumer products since their release by Apogee and its partnerSTMicroelectronics approximately 3.5 years ago. Some of the consumer electronicbrands using DDX technology include: Boston Acoustic, Daewoo, Fujitsu, HarmanKardon, Hitachi, JBL, JVC, Kenwood, LG, Magnavox, Marantz, Mustek, Philips,RCA, Samsung, Sharp, TEAC, Thomson Multimedia, Toshiba, Vestel, Xbox andZenith.

**IndustryTrends and the DDX Advantage**

Digital technology is rapidly transforming the wayconsumers obtain, record, view and listen to content. Traditional analogformats of TV, radio, VCR and cassettes are being replaced with digitalstandards like DVDs, CDs, Digital Cable, MP3/Internet audio and digital radio,which provide better audio/video quality. The Company believes that over thenext several years most audio/video material will be distributed using digitaltechnology. Along with this transition, the consumer is demanding smaller, moreintegrated systems, such as the DVD receiver that includes a DVD/CD player,radio tuner, multi-channel amplification and speakers.

The Company believes that it is well positioned totake advantage of these market trends because the DDX technology providesdigital quality audio reproduction, reduces system cost, and is compactcompared to traditional audio amplifier solutions. These benefits are derivedfrom the system’s all-digital design and its high operational efficiency.

Existing audio products use analog audio amplifier ICsto amplify analog signals. This technology is suitable for products such asrecord players and cassette tapes that produce analog signals. However, with theadvent of digital audio playback, an additional IC, digital to analog converter(“DAC”), is required to convert the digital signal to an analog signal suitablefor amplification. DDX’s all-digital design eliminates the cost of the DAC andthe potential quality losses in the conversion and transmission of the analogsignals. Thus, with DDX, consumers can enjoy true digital audio reproduction ina low-cost product. In addition, because DDX is a digital implementation, otheraudio functions such as bass/treble and volume can be integrated easily intoDDX-based ICs, thereby lowering overall system cost.

An additional problem with analog amplifier solutionsis their low operational efficiency. The goal of an analog amplifier is toproduce power to drive a speaker, but because of its poor efficiency it alsoproduces waste heat, which has to be dissipated using a large piece of metal,or heat sink. Because of the size of the heat sink, analog amplifiers arevirtually eliminated from use in compact integrated products such as a DVDreceiver.

Analog amplifiers’ poor efficiency also increases thesize and cost of the amplifier power supply. As an example, analog amplifiershave a peak efficiency of approximately 60% compared to DDX, which has a peakefficiency of 90%. A typical DVD receiver, which outputs approximately 300watts of audio power, would require a 500 watt power supply with an analogamplifier solution. A DDX-based design would only require a 330 watt powersupply to output 300 watts of audio power, which we believe would create asignificant savings for a consumer product.

The Company believes that DDX’s digital design andhigh efficiency will benefit both existing and emerging audio applications.These products include: DVD receivers, digital TVs, cable system components,and fully integrated digital-powered speaker systems. Newer technologies, suchas MP3 players, digital playback devices and Internet appliances, can be madefully digital with DDX amplifier solutions.

With the emergence of home networking, DDX can beintegrated with the network interface to provide consumers with pure digitalsound throughout their homes at a low cost. DDX allows audio 

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systems to be installed inwall or ceiling spaces without the typical thermal problems associated with analogamplifier installations. In addition, because of DDX’s higher efficiency, moreamplifiers can be powered and a higher audio output can be produced in networkapplications operating from a remote power source.

DDX amplifier solutionscan also meet the requirements of many traditional audio applications. In thehome audio and PC multimedia markets, the Company expects that originalequipment manufacturers will recognize efficiencies gained through theincorporation of smaller configuration DDX amplifiers in powered speakers. DDX’ssmaller and more efficient design will enable car audio designs to deliver morepower in a smaller space. Portable audio, hand-held systems and mobilecommunication devices will also benefit from longer battery life resulting fromDDX’s greater efficiency.

**Audio Products**

The Company iscommercializing its audio technology by developing and providing intellectualproperty products to its licensees, STMicroelectronics, Zoran Corporation andothers, as well as marketing and selling custom semiconductor products toelectronics manufacturers. The Company also supplies customers with circuitboards to support the marketing and sales of its semiconductor products.

***a)***   IntellectualProperty Products

The Company has developedand delivered DDX controller core and DDX power technology intellectualproperty products to support its licensing activities with STMicroelectronicsand other customers. DDX Controller core products offered by the Companyinclude; one, two, three, four and eight channel designs some of which includeaudio processing functionality, interface logic and other functions. TheCompany intends to develop new intellectual property products to expand itslicensing activities. This activity is expected to allow the Company to increaselicensing revenue while expanding the applications for its DDX power devices.In addition, by integrating the DDX Controller core with other complimentarytechnologies the Company hopes to enable new low cost solutions that cannot besupported effectively by stand-alone DDX chip set solutions.

***b)***   SemiconductorProducts

The Company’s DDX amplifier solution utilizes twodifferent types of ICs. The first is a digital IC that implements DDX and otherdigital audio processing and is referred to as a “Controller”. DDX ControllerICs are manufactured utilizing standard digital IC processes. The secondcomponent or “Power Device” converts the Controller outputs into power outputsto drive a loudspeaker. DDX Power ICs are manufactured using a proprietarysemiconductor process developed by STMicroelectronics. Both a DDX Controllerand a DDX Power Device are required to implement a complete audio amplifiersolution. In November 2004, the Company released the first of a new familyof all-in-one DDXi (“i” for integrated) amplification solutions that combine aDDX Controller and a DDX Power Device in a single IC.

The Company has released seven Controllers, thirteenPower Devices and three DDXi All-in-One Integrated ICs developed for medium andhigh power audio applications. The Company plans to develop and release up toseven new audio ICs in 2005 to expand the market opportunities for itsproducts.

The latest generation of DDX Controller devicefeatures Apogee’s AutomodeTM technology. This preset audio processing modeenables rapid evaluation, design and implementation of advanced featureswithout the hassle of customized programming.

The following semiconductor products have beenreleased or will soon be on the market:

*DDXi-2051, 2101 & 2161 (“i” forintegrated) All-in-One Integrated Amplifiers:  *The DDXi-2051,2101 and 2161 are the world’s first fully integrated, all-digital, high poweraudio amplifiers that include a complete set of digital audio processing features.The DDXi combine a 2.1 channel DDX processor with a 

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40, 60 or 80 watt perchannel, high efficiency DDX power stage, respectively. This one-chip solutionsignificantly reduces system cost, size and complexity by eliminating the needfor a separate audio processor, digital to analog converter and amplifierchips. These benefits make the DDXi ICs ideal solutions for Digital TVs, CD/DVDmini/micro systems, gaming systems, and multi-media speakers. The DDXi-2051,2101 & 2161 features Apogee’s new AutomodeTM. These devices werereleased to production in February 2005.

*DDX-2001 Controller:  *TheDDX 2001 Controller combines an advanced digital audio processor with patentedDDX processing that supports up to three channels of high efficiency DDX audioamplification. The Controller replaces analog signal processors with digitalsignal processing to provide a full complement of audio features. The DDX-2001supports the full line of high-efficiency DDX Power Devices and can beconfigured in stereo mode or in a 2.1 channel mode to support products thatinclude a separate subwoofer loudspeaker. The IC features Apogee’s AutomodeTMpreset audio processing modes that enable rapid evaluation, design andimplementation of advanced features without the hassle of customizedprogramming. The device was released to production in February 2005.

*DDX-8001 Controller:  *TheDDX-8001, Apogee’s fourth generation digital amplifier controller, combines anadvanced digital audio processor with Apogee’s patented DDX®processing that supports up to eight channels of high efficiency DDX®amplification. The device was released to production in November 2003. TheDDX-8001 features Apogee’s new AutomodeTM. The device was released to productionin February 2004.

*DDX-8229 Controller:  *TheDDX-8229, Apogee’s fourth generation digital amplifier controller, is a highperformance, single-chip solution for multi-channel audio applications. Itprovides 4 channels of high-performance DDX output plus 4 channels of binaryoutput capable of driving any of Apogee’s high-efficiency output stages. TheDDX-8229 features Apogee’s new AutomodeTM, with simple and quick pre-selectcustom settings built into the IC to shorten the design cycle. The device wasreleased to production in April 2004.

*DDX-8000 Controller:  *TheDDX-8000 integrates a configurable audio serial interface, specialized audioprocessing and eight channels of DDX output. The device was released toproduction in December 2002.

*DDX-8228 Controller:  *TheDDX-8228 includes a complete audio processing feature set and four channels ofDDX output. The device also includes an output mode to implement a low cost 5.1channel design utilizing only two DDX power devices. The device was released toproduction in March 2003.

*DDX-4100/DDX-4100A Controller:  *TheDDX-4100 and the DDX-4100A integrate multiple digital audio interfaces, volume,bass/treble, dynamic compression and other digital audio functions, plus 4.1 channelsof DDX outputs. In January 2002 the Company released the DDX-4100A, arevised design of the original DDX-4100, with some improved features.

*DDX-2000 Controller:  *Atwo-channel DDX Controller that includes a standard audio serial interface,volume control, and a dynamic compression algorithm to reduce amplifierdistortion at high power. The device was released to production in December 2000.

*DDX-2240 Power Device:  *TheDDX-2240 is a surface mount high efficiency power IC that provides two channelsof up to 120 watts into a 6 Ohm speaker load, or 240 watts into a 4 Ohm speakerload at 10% Total Harmonic Distortion (THD) to meet the key power level forpremium products. The device is expected to be released to production in thesecond quarter of 2005.

*DDX-2200 Power Device:  *TheDDX-2200 is a surface mount high efficiency power IC that provides two channelsof up to 100 watts into a 8 Ohm speaker load, or 200 watts into a 4 Ohm speakerload at 10% 

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Total Harmonic Distortion(THD) to meet the key power level for premium products. The device is expectedto be released to production in the second quarter of 2005.

*DDX-2160 Power Device:  *TheDDX-2160 is a surface mount high efficiency power IC that provides two channelsof up to 80 watts into a 6 Ohm speaker load, or 160 watts into a 3 Ohm speakerload at 10% Total Harmonic Distortion (THD) to meet the key power level forpremium products. The device was released to production in December 2003.

*DDX-2120 Power Device:  *TheDDX-2120 is a surface mount high efficiency power IC that provides over 60watts per channel in stereo and over 120 watts in mono mode into 8 Ohms at 10%Total Harmonic Distortion (THD). This device was released to production in thefirst quarter of 2004.

*DDX-2100Power Device:  *The DDX-2100 is a high efficiency power ICthat provides two channels of up to 50 watts into a standard 8 Ohm speakerload, or one channel of 100 watts in a 4 Ohm speaker load. The device wasreleased to production in April 2002.

*DDX-2060 Power Device:  *TheDDX-2060 is a surface mount high efficiency power IC that provides two channelsof up to 35 watts into a standard 8 Ohm speaker load, or 70 watts into a 4 Ohmspeaker load. The device was released to production in May 2001.

*DDX-2050 Power Device:  *TheDDX-2050 Power Device is a surface mount high efficiency power IC that providesover 25 watts per channel in stereo mode and over 50 watts in mono mode. Thedevice was released to production in June 2003.

*DDX-1080 Power Device:  *TheDDX-1080 Power Device is a surface mount high efficiency power IC that providesover 80 watts per channel in bridge mode or 40 watts per 1⁄2 bridge. The devicewas released to production in April of 2004.

*DDX-1060 Power Device:  *TheDDX-1060 Power Device is a surface mount high efficiency power IC that providesover 60 watts per channel in bridge mode or 30 watts per 1⁄2 bridge. The devicewas released to production in April of 2004.

*DDX-1050 Power Device:  *TheDDX-1050 Power Device is a surface mount high efficiency power IC that providesover 50 watts per channel in bridge mode or 25 watts per 1⁄2 bridge.

*ATA-120 Analog IntegratedAmplifier:  *The ATA-120 is a single-ended Class-D audioamplifier that converts analog audio input signals into PWM pulses. The devicewas released to production in August of 2004.

**Amplification Products by Application**

**HomeTheater Applications (5.1, 6.1, 7.1 Channels)**

DVD/AVReceivers, Powered Speakers, Home Theater-in-a-Box
| **Application  Total Power Range** | ** ** | ** ** | ** ** | **Controller**                                                  | ** ** | **Applicable Power Devices** |
|------------------------------------|------------|------------|------------|-----------------------------------------------------------------|------------|------------------------------|
| **<200 Watts**                  |       | DDX-8229   |       | DDX-1050, 1060, 1080,  2052, 2062, 2102                         |
| **200W – 400Watts**           |       | DDX-8001   |       | DDX-1050, 1060, 1080,  2052, 2062, 2100, 2102, 2120, 2200, 2240 |
| **400 Watts and higher**           |       | DDX-8001   |       | DDX-1050, 1060, 1080, 2100, 2120, 2160, 2200, 2240              |

 

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**Stereo &Mono Applications**
| Application                                                                                                                            | ** ** | ** **                      | ** ** | **All-in-One Solution or Controller**                                 | ** ** | **Applicable Power Devices** |
|----------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------|------------|-----------------------------------------------------------------------|------------|------------------------------|
| **Flat-Panel TV 10 – 25 Watts**                                                                                                   |       | DDXi-2051,  2101, ATA-120       |       |                                                                  |
|                                                                                                                                        |       | DDX-2001                        |       | DDX-2052, 2102                                                        |
| **Mini/Micro Systems 2, 2.1, 2.2 & 4  Powered Speakers w/ DSP 2 & 2.1  Custom Install Audio 2, 2.1 & Mono** |       |                            |       |                                                                  |
| **< 160 Watts**                                                                                                                     |       | DDXi-2051, 2101, 2161, ATA-120  |       |                                                                  |
| **> 160 Watts**                                                                                                                     |       | DDX-2001, 8229                  |       | DDX-1050, 1060, 1080, 2052, 2062, 2100, 2102, 2120,  2160, 2200, 2240 |
| **Powered Subwoofer Mono**                                                                                                             |       | DDX-2161,  ATA-120 with FETS    |       |                                                                  |
| **Gaming (Slots, Arcade)  2 & 2.1**                                                                                           |       | DDXi-2051,  2101, 2161, ATA-120 |       |                                                                  |
| **Automotive Trunk Amps 2, 2.1**                                                                                                       |       | DDX-8001, 8229                  |       | DDX-2052, 2062, 2100,  2102, 2120, 2160, 2200, 2240                   |

 

***c)***   BoardProducts

The Company is developingcircuit boards for evaluation and reference purposes in order to demonstratethe application of its DDX semiconductor products. These products are providedto customers to support technology and product evaluation and to supportcustomer engineering design activities. At this time, the Company has releasedthree evaluation boards and eight reference boards.

**Competition**

Integrated audio amplifier ICs marketed todayprimarily consist of: (1) analog amplifiers known as Class A/Bamplifiers; (2) analog high efficiency designs, known as Class Damplifiers, and (3) digital high efficiency Class D designs like DDX.There are several companies currently marketing analog Class D amplifierproducts, including: Monolithic Power Systems, National Semiconductor Corp.,Philips Electronics, STMicroelectronics, Texas Instruments, Inc. AnalogDevices, Maxim and Tripath Technology, Inc. STMicroelectronics, under alicensing agreement with Apogee, and Texas Instruments, Inc. are currentlymarketing complete digital Class D solutions. Companies including PulsusTechnologies, Inc., Wolfson Microelectronics and NeoFidelity, Inc.are marketing digital Class D Controller solutions without an integratedpower device.

The Company believes that the competitive advantage ofits products is the level of integration and operational efficiency, as well asits low cost solution. The DDX Controller design is digital, which allows theintegration of other digital audio functions such as bass/treble, volume, andequalization, to lower overall system cost—an approach that the Companybelieves cannot be accomplished economically using analog solutions in a singleIC. DDX efficiency is also greater than analog Class A/B and analog Class Damplifiers, providing manufacturers with power supply and product savings. Theagreements with STMicroelectronics and OKI Semiconductor provide for a coststructure that Apogee believes will allow it to compete effectively in themarketplace with acceptable operating margins.

The Company believes that its ability to offer both Class Dcontrollers and power devices provides a distinct competitive and marketadvantage for gaining overall market share. Some of the Company’s controllercompetitors currently do not offer power devices and are utilizing Apogee’s DDXpower devices. As such, the Company believes that its DDX power devices areapproaching use as an industry standard.

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The Company believes that there will be a steadytransition of products from analog to digital amplifiers. The Company believesthat this transition will lead to increased sales and market share for DDX’sall-digital, high efficiency solution.

One of the competitiveadvantages of DDX technology is that it can be readily integrated with otherdigital functions to make System on Chip, or SOC, solutions. This cannot beeasily accomplished with analog Class D technology. This high level of ICintegration enables manufacturers to build products with lower cost, greatersimplicity, and smaller size. The Company believes the inclusion of its DDXController technology into SOC solutions will enable Apogee to expand theadoption of its technology into highly integrated products and will provide theCompany the opportunity to work with the customer to design in a DDX powerdevice.

***MEMS/Nanotechnology Division***

In May 2004, the Company acquired the portfolioof Micro-Electro-Mechanical Systems (“MEMS”) intellectual property, tradesecrets and know-how developed by Standard MEMS, Inc. (“SMI”).Concurrently the Company hired key staff from the former SMI and established aMEMS Division in Great River, New York. The Company’s strategy is to leverageSMI’s investment in MEMS manufacturing technologies, product designs and marketdevelopment. SMI developed over 12 products and shipped over 50 million MEMSdevices, including pressure and gas sensors, biomedical devices, optical and RFswitches, ink jet printer heads and infra-red sensors.

The Company intends to utilize its analog and digitalcircuit designs capability to develop MEMS products for the consumer,automotive, communications and medical markets. The Company will rely on MEMSfoundry providers to produce its products, following the same business modelused by the Company’s audio semiconductor business. The MEMS marketing andsales efforts will be supported by both the Great River Office and the Company’sUS and foreign sales offices. The Company intends to add additionaldistributors to handle specific MEMS products.

The Company’s initial MEMSdevelopment efforts are being directed towards the development of novelpressure sensor products for the industrial and automotive markets as well asthe development of medical devices for the transdermal drug delivery (“TDD”)market. The following provides a summary of the Company’s MEMS products and theassociated market opportunities.

***MEMS Sensor Products:***

MEMS based pressure sensors are currently utilized ina wide range of markets including: automotive, industrial, medical and consumerproducts. MEMS technology was adapted for these applications because it enablessensor and electronics integration resulting in significantly lower systemscost and size compared to previous approaches which utilized multiple machinedcomponents and separate, discrete electronics. Applications using MEMS pressuresensors include: engine control, tire pressure monitoring, pump control, bloodpressure monitoring and barometric pressure measurement. The total market sizefor pressure sensors in 2004 was approximately $2.2 billion, with the MEMSportion making up approximately $830 million according to In Stat MDR, aleading MEMS research group.

In November of 2004, the Company established apressure sensor test capability and began the evaluation of its initial productdesigns. The Company is optimizing these designs and expects to transitionthese devices to production in the second half of 2005. In parallel, theCompany has established relationships with potential automotive customers and isworking with a manufacturing partner to fabricate these products. The Companyplans to leverage these designs to build a portfolio of pressure sensors forconsumer, medical and industrial applications.

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The Company believes that its pressure sensor producthas a cost and reliability advantage over existing products on the marketbecause of the unique process used to manufacture the sensor. Companiesdeveloping or marketing similar sensor products include All SensorsCorporation, Delphi Corporation, Endevco Corporation, Freescale Semiconductor,Inc, General Electric Company, Honeywell International, Inc., InfineonTechnologies AG, Measurement Specialties, Inc., Silicon MicrostructureInc. and Texas Instruments, Inc.

In order to expand itssensor technology the Company signed a cooperative agreement, in November 2004,with The Research Foundation of State University of New York at Stony Brook andThe Center for Advanced Technology (SensorCAT), to jointly developmanufacturing technologies to produce highly accurate, low cost micro-sensors. Underthe agreement, the Company will have the option to exclusively license therights to commercialize jointly developed technology. The research activitiesare focused on combining nano-composite materials and silicon-basedmicro-fabrication processes. The agreement is for a one-year term and can berenewed by mutual agreement.

***MEMS Medical Devices***

The Company is developing a unique MEMS-based drugdelivery system targeted for use in the TDD market. This development buildsupon the intellectual property, product designs and clinical testing performedby SMI. The Company is in the process of filing a patent on the design and theapplication approach. The Company intends to design, develop and market thedrug delivery system to pharmaceutical and medical device manufactures.

TDD systems, commonly know as a “patch”, is anon-invasive, convenient and painless dosage method that can offer patientbenefits such as steady delivery, reduced side effects and improved patientcompliance. However, TDD has limited drug applications to small molecule drugsbecause the skin is an effective barrier to drug transmission to the body.Thus, it is impractical to transdermally deliver large molecule drugs such asproteins, vaccines and most biopharmaceuticals, without the addition of achemical or physical method to enhance drug delivery. Research is ongoing inthe development of transdermal technologies to increase drug delivery ratesusing electrical, pressure and thermal energy. Another area of research is inthe creation of micro-pores in the skin to enhance TDD. These devices includemicrostructures made of various materials such as metal, glass, silicon, etc.The advantages of a silicon based design are that they a can be manufacturedusing batch semiconductor process techniques, which lowers cost. In addition,the designs can be readily combined with electronic circuits to enhancedelivery or increase the systems’ functionality. The Company believes thisapproach provides the best solution for long-term TDD innovation.

The TDD market continues to grow as new drugs areapproved for this application. Currently the FDA has approved over 13 specificTDD drug types to be administered using TDD and over 35 TDD applications forTDD systems. According to Frost and Sullivan, the U.S. market forTDD was $1.6 billion in 2002 with expected growth of 300 percent through 2010.The Company believes this growth rate could be enhanced by the adoption ofthese designs that could expand the range of potential transdermal drugs.Potential applications for enhanced TDD systems include pain managementtherapies, anxiety therapeutics, antidepressants, sexual dysfunction, vaccinesand diabetes.

In November 2004, the Company received the firstengineering samples of its silicon based drug delivery system. In order to evaluatethe performance of the design, the Company became a member of the New JerseyCenter for Biomaterials, a leading US test lab. The Company expects to validatethe effectiveness of the design in the first half of 2005 and if the design isvalidated, plans to establish partnerships with pharmaceutical companies tocommercial the design. The Company is also investigating non-drug deliveryrelated transdermal applications for the device.

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The Company believes thatits MEMS drug delivery design is more robust, has greater design flexibility,because it is silicon based, and has a lower cost to manufacture compared withcompetitive technologies being developed. Companies developing similar productsinclude: 3M, Alza Corporation, BioValve Incorporated, NanoPass TechnologiesLimited, and Procter & Gamble.

**Research and Development**

The Company’s research and development activities aredirected towards extending its patent protection for its DDX technology,improving the overall performance of the DDX technology, increasing the numberof DDX IC designs, and developing new product applications and expanding itstechnology base. The Company’s core technology competencies include: digitalsignal processing, digital, analog and power IC design and product systemapplications.

The Company has been granted four patents on its DDXtechnology and has six additional patents in development for DDX, power supplyand related circuit designs.

The Company significantly increased its IC designstaff in the last 18 months to develop new DDX and non-DDX products. Thisinvestment supported the release of 15 new ICs in 2004. We believe that thesedesigns extend our leadership position including a wider range of power optionscoupled with a higher performance DDX core and new audio processing features toreduce system design complexity and cost. The Company expects to continue todevelop new DDX and non-DDX ICs to meet the requirements of new productapplications.

The Company also hasinvested in new research and development staff to support itsMEMS/Nanotechnology business. This staff is engaged in developing proprietarymanufacturing processes, product designs, product test and evaluation andpackaging solutions. The Company expects the investment in MEMS/Nanotechnologyresearch and development to increase as the first products are released in2005.

**Marketing and Sales**

The Company relies on a direct sales force,independent sales representatives and distributors to promote its productsworldwide. The Company’s sales headquarters are located in Norwood,Massachusetts. In Asia, where most of the world’s consumer electronics productsare manufactured, the Company has opened sales and application support officesin Hong Kong, Japan and Taiwan. The Company also utilizes sales representativesin Korea and Brazil and independent distributors in Hong Kong, China, Japan,Taiwan, Singapore, Malaysia, Philippines, Thailand and India.

In October 2004 the Company hired Mr. JeffGray, Vice President of Marketing and Sales. Mr. Gray brings to Apogeeover 15 years of experience in the high technology industry primarily focusingon technology with Application and System Architecture.

The Company’s audio business sales strategy is builtaround making it easy for the customer to utilize its audio ICs and technology.The Company has developed and is providing to customers data sheets,application information, evaluation boards reference designs and, for someproducts, complete system designs. The Company believes that this information,along with the Company’s application engineering support, will enable customersto quickly develop and bring to market high quality audio products.

The Company is promoting the DDX trademark to enhancethe value of its products to manufacturers and consumers. The DDX trademark hasbeen registered in the United States and the Company has applied to registerthe DDX trademark in other countries.

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The marketing and sales efforts of theMEMS/Nanotechnology Division will be supported by both the Great River Officeand the Company’s US and foreign sales offices. The Company intends to addadditional distributors to handle specific MEMS products.

The Company also marketsits products by attending and exhibiting its products at key industrytradeshows, as well as through the Company’s website: *http://www.apogeeddx.com.*

**Manufacturing and Quality**

The Company currently utilizes several independentcompanies to manufacture, package and test its IC products. Independentcontract manufacturers are utilized to produce and test the Company’s circuitboard assemblies. The Company inventories and ships ICs and circuit boardproducts from its headquarters in Norwood, Massachusetts and from a warehousein Hong Kong.

OKI Semiconductor supplies the DDX-2000 device andSTMicroelectronics supplies the remaining DDX ICs. Pursuant to the terms of theCompany’s licensing agreement with STMicroelectronics, all future DDX audioproducts will be manufactured and supplied by STMicroelectronics. The Companyreceives packaged, fully tested devices that pass the suppliers’ internalquality control from both suppliers. The Company believes that its supplierswill have the capacity to meet Apogee’s projected requirements for 2005. TheCompany added two additional semiconductor foundries to produce new IC productsin 2004 and plans to contract with independent assembly and test companies tosupport the manufacturing of its products. The Company also has contracted anISO certified foundry to produce its MEMS products.

The Company alsoestablished a quality management system and procedures and expects to receiveISO certification in 2005.

**Employees**

As of December 31, 2004, the Company had 35employees, of which 34 were full-time employees, including 22 in research anddevelopment, 8 in sales and marketing and 5 in general and administration. Ofthe 8 employees in sales and marketing, two of them also support applicationsand design activities through the Company’s Hong Kong office. None of theemployees are represented by a collective bargaining agreement, nor has theCompany experienced work stoppages. The Company believes that relations withits employees are good.

The following table setsforth certain information with respect to the executive officers of ApogeeTechnology. All officers serve at the pleasure of the Board of Directors.

**ExecutiveOfficers of the Company**
| **Name**         | ** ** | ** ** | ** ** | **Age**                                                                  | ** ** | **Position** |
|------------------|------------|------------|------------|--------------------------------------------------------------------------|------------|--------------|
| Herbert M. Stein |       | 76         |       | President, Treasurer,  Chief Executive Officer and Chairman of the Board |
| David B. Meyers  |       | 46         |       | Chief Operating Officer                                                  |
| Andrew A. Adrian |       | 41         |       | Vice President of Engineering                                            |

 

Mr. Herbert M. Stein has served as the Company’sChief Executive Officer since January 2001. Mr. Stein has been aDirector of the Company since 1996, has been Chairman of the Board andPresident since January 2000, and has been Treasurer since November 2003.Mr. Stein was Chairman of the Board of Directors of Organogenesis Inc.from 1991 through 1999 and was Chief Executive Officer of Organogenesis from1987 through 1999.

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Mr. David B. Meyers was appointed the Company’sChief Operating Officer in February 2001. From January 2000 until February 2001he was the Company’s Vice-President, Business Development. Prior to joining theCompany in 1996, Mr. Meyers was a principal engineer with Arinc ResearchCorporation and held various engineering and research positions at NorthropGrumman Corporation and Rockwell International.

Mr. Andrew A. Adrianhas served as the Company’s Vice President of Engineering since August 2001.From 1995 to 2001 he was a principal engineer with the Company. Prior tojoining the Company in 1995, Mr. Adrian was a design engineer withNorthrop Grumman Corporation.

**CERTAIN RISKFACTORS THAT MAY AFFECT FUTURE RESULTS OF OPERATIONSAND OUR COMMON STOCK PRICE**

There are a number ofimportant factors that could cause our actual results to differ materially fromthose indicated or implied by forward-looking statements. Factors that couldcause or contribute to such differences include those discussed below, as well asthose discussed elsewhere in this Form 10-KSB. We disclaim any intentionor obligation to update or revise any forward-looking statements, whether as aresult of new information, future events or otherwise except as may be requiredby law.

**RISKS RELATED TO OUR BUSINESS**

**WEHAVE NOT BEEN ABLE TO COMPLETE THE AUDIT OF OUR 2004 FISCAL YEAR FINANCIALSTATEMENTS AND WILL HAVE TO HAVE OUR 2003 FISCAL YEAR FINANCIAL STATEMENTSRE-AUDITED.**

As a result of a disagreement over a revenuerecognition issue with our independent registered public accounting firm,Anchin, Block & Anchin LLP, as a result of which they have resigned,we have not been able to complete the audit process with respect to ourfinancial statements for the fiscal year ended December 31, 2004. Althoughwe have included unaudited financial statements for that fiscal year in aCurrent Report on Form 8-K, no assurance can be given that those resultswill not change following the completion of the audit process.

In addition, our auditors have concluded that theiraudit opinion with respect to our financial statements for the fiscal yearended December 31, 2003 may not be relied upon. As a result of the ongoingreview of our financial statements, we may have to restate our previouslyreported 2003 financial statements and recognize revenue in different periodsthan previously reported.

We are working diligently to retain new independentregistered public accountants and to complete a re-audit of our financialstatements for the fiscal year ended December 31, 2003 and the audit of ourfinancial statements for the fiscal year ended December 31, 2004 asexpeditiously as possible, and we hope to file these audited financialstatements prior to June 30, 2005. However, we cannot assure you that we willbe successful in meeting that time frame, or that material adjustments in ourfinancial statements for either period will not be necessary.

**WEHAVE HAD A HISTORY OF LOSSES AND MAY NOT BE ABLE TO SUSTAIN PROFITABILITY.**

Our ability to generatefuture revenue and sustain profitability will depend on a number of factors,many of which are described throughout this risk factor section. If we areunable to achieve and maintain profitability, our share price would likelydecline.

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**THECOMPANY HAS ONLY A SMALL NUMBER OF CUSTOMERS, AND THE LOSS OF THESE CUSTOMERSWOULD HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY’S BUSINESS.**

During the twelve monthsended December 31, 2004, the Company derived approximately 81% of both itstotal revenue and product revenue from five customers and four customers,respectively. The loss of any of the Company’s customers would have a materialadverse effect on its business, financial condition and results of operations. TheCompany is working to diversify its customer base in order to reduce itsdependence on a small number of customers. The Company may not be able tosucceed in these efforts.

**OURBUSINESS IS CONCENTRATED IN A LIMITED NUMBER OF MARKETS AND ANY SIGNIFICANTCHANGE IN THESE MARKETS COULD HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY’SBUSINESS.**

Approximately 58% and 30%of the Company’s total revenue for the twelve months ended December 31,2004 were to customers in Asia and Europe, respectively. In addition, 92% ofproduct revenue was from customers in Asia. A significant percentage of theCompany’s product revenue is to manufacturers producing DVD Receivers. This isa relatively new consumer electronic product with a limited sales history. Althoughthe Company intends to develop new markets in order to diversify the marketapplications of its products, there is no guaranty that it will be successful.

**OURMARKETS ARE SUBJECT TO RAPID TECHNOLOGICAL CHANGE AND, THEREFORE, OUR SUCCESSDEPENDS ON OUR ABILITY TO INTRODUCE NEW PRODUCTS IN A TIMELY FASHION.**

The life cycle ofthe technology and any future products developed by us may be limited by theemergence of new products and technologies, changes in consumer preferences andother factors. Our future performance will depend on our ability toconsistently:

·       identifyemerging technological trends in our market;

·       identifychanging consumer requirements;

·       developor maintain competitive technology, including new product offerings;

·       improvethe performance, features and reliability of our products, particularly inresponse to technological change and competitive offerings;

·       bringtechnology to market quickly at cost-effective prices, and

·       protectour intellectual property.

We may not succeed indeveloping and marketing new products that respond to technological andcompetitive developments and changing customer needs, or such products may notgain market acceptance and be incorporated into the technology or products ofthird parties. Any significant delay or failure to develop new enhancedtechnologies, including new product offerings, and any failure of themarketplace to accept any new technology and product offerings would have amaterial adverse effect on our business, financial condition and results ofoperations.

**WE MAY REQUIREADDITIONAL CAPITAL TO FUND OUR OPERATIONS AND RESEARCH AND DEVELOPMENT.**

With the exception of thefiscal year ended December 31, 2003, we have sustained losses and have hadonly a limited amount of cash generated from operations. We have funded ouroperating activities to date primarily from the sale of securities. We willlikely require additional capital in the future, which may be in the form ofadditional sales of securities. The additional capital may not be readily availableto us on 

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favorableterms, if at all. Any sale of securities would result in dilution to ourcurrent stockholders’ ownership in the Company.

**OURABILITY TO ACHIEVE SUSTAINED REVENUE GROWTH WILL BE HARMED IF WE ARE UNABLE TOMAINTAIN OUR EXISTING LICENSING RELATIONSHIPS.**

Part of our businessstrategy is to expand our licensing activities with STMicroelectronics and toenter into licensing relationships with other companies in order to offerproducts to a larger customer base than could be reached through our owndevelopment and marketing efforts. We believe that such relationships canaccelerate market penetration of our products and technologies, while limitingour manufacturing exposure and sales and marketing costs. However, we may notbe able to expand or maintain our existing licensing relationships or establishnew licensing relationships on commercially reasonable terms, if at all. Anyfuture inability by us to maintain our licensing relationships or to enter intoadditional licensing relationships, or the failure of one or more of ourlicensing relationships to contribute to the development and maintenance of amarket for our products, could have a material adverse effect on our business,operating results and financial condition.

**OURQUARTERLY OPERATING RESULTS MAY FLUCTUATE.**

We have experiencedfluctuations in our quarterly operating results in the past and it is likelythat these fluctuations will continue in the future. These fluctuations arecaused by many factors, including, but not limited to:

·       availabilityand pricing from our suppliers;

·       changesin the demand for our products by customers;

·       introductionsor enhancements of products, or delays in the introductions or enhancements ofproducts, by us or our competitors;

·       rateand success of new customer development;

·       changesin our pricing policies or those of our competitors;

·       successin attracting, retaining and motivating qualified personnel; and

·       changesin general economic conditions.

A substantial portion of our operating expenses isrelated to personnel, facilities, and sales and marketing programs and arefixed. Our expense level is based in part on our expectations of future ordersand sales, which are extremely difficult to predict. Accordingly, we may not beable to adjust our fixed expenses quickly enough to address any significantshortfall in demand for our products in relation to our expectations.

Fluctuations in ouroperating results may also result in fluctuations in our common stock price. Insuch event, the trading price of our common stock would likely suffer andadversely affect our ability to raise capital and the value of your investmentin the Company.

**IF WEARE UNABLE TO HIRE OR RETAIN KEY PERSONNEL, WE MAY NOT BE ABLE TO OPERATEOUR BUSINESS SUCCESSFULLY.**

We may not be successfulin recruiting and retaining executive officers and other key management andtechnical personnel. The competition for employees with the necessary highlevel of technical expertise to design, market and sell our products isintense, particularly in eastern Massachusetts and Asia. We will need to hire anumber of additional technical personnel if we are to increase the rate atwhich we develop new products. Because competition for highly skilled technicalpersonnel is so intense, companies 

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in Apogee’sindustry are subject from time to time to complaints brought by competitorsalleging interference with contractual relations or wrongful hiring ofemployees. Such lawsuits may be costly, may divert management attention andresources from the operation of our business, and may therefore adverselyaffect our financial condition and results of operations. In addition, the lossof the management and technical expertise of our senior management couldseriously harm us. Our employees may also be recruited away from us by ourcompetitors. The Company does not have in place employment contracts for somemembers of its senior management, including the COO and Vice President ofEngineering.

**THEREIS A NEW EUROPEAN DIRECTIVE TO ELIMINATE HAZARDOUS MATERIALS IN ELECTRONICPRODUCTS AND AS SUCH WE MAY NOT BE ABLE TO TRANSITION OUR IC PRODUCTSTIMELY TO MEET CUSTOMER NEEDS AND MAY HAVE INVENTORY THAT CAN ONLY BE SOLDIN LIMITED MARKETS.**

The IC industry isresponding to the European directive of Restriction of Hazardous Materials(RoHS) that will become effective in July of 2006. As a result of thisdirective, semiconductor companies are working to remove lead and otherhazardous materials used in their IC products. The Company expects totransition all of its IC products to conform to the RoHS standard during thefirst have of 2005. However, the Company may not be able to meet customerdelivery requirements to support the 2005 consumer electronic design cycle. Inaddition, the Company currently has inventory to support European customersthat may have to be sold in other markets.

**WE DONOT HAVE MANUFACTURING CAPABILITIES, AND AS A RESULT, WE RELY ON OUTSIDEFOUNDRIES TO MANUFACTURE OUR SEMICONDUCTOR PRODUCTS.**

We have nomanufacturing capabilities, nor do we have plans to establish any suchcapabilities. Accordingly, we utilize outside semiconductor foundries, assemblyand test companies to manufacture our semiconductor products. There aresignificant risks associated with our reliance on these foundries that canadversely affect our business, operating results and financial condition. Theserisks include:

·       theability to maintain foundry relationships, the failure of which could result insignificant delays in product introduction due to the time necessary toestablish new relationships;

·       delaysin production or shortages in product delivery as a result of productionproblems at outside contractors;

·       theloss of foundry priority that may result in limiting our ability to obtainproducts on schedule;

·       limitedcontrol over product quality that could result in product returns and the lossof customers;

·       inabilityto control manufacturing yield that could increase production costs, therebyreducing sales potential and operating margins; and

·       lack of access or controlover new processes and manufacturing technologies to maintain productcompetitiveness in the market.

**OURPRODUCTS USE NEW TECHNOLOGY AND MAY HAVE MANUFACTURING DEFECTS OR OTHERCHARACTERISTICS THAT ARE ONLY DETECTED AFTER INSTALLATION IN CUSTOMERAPPLICATIONS, WHICH MAY HARM OUR BUSINESS.**

Our products are based onrecently developed technology and are manufactured using state-of-the-artmanufacturing processes. Our approach to product qualification and testing maynot fully evaluate or identify product characteristics or defects that couldadversely affect the product’s ability to operate in the intended application. Ifsuch defects or characteristics are discovered after installation, productrevenue 

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might besignificantly delayed and our ability to maintain existing customers and toretain new customers may be seriously affected.

**OURABILITY TO ACHIEVE REVENUE GROWTH WILL BE HARMED IF WE ARE UNABLE TO PERSUADETHE MARKET TO ADOPT OUR AMPLIFIER AND MEMS TECHNOLOGIES.**

We face challenges inpersuading manufacturers to adopt our products using our DDX amplifier and MEMStechnologies. Traditional amplifiers use design approaches developed in the1930s. These approaches are still used in most amplifiers and engineers arefamiliar with these design approaches. In order to adopt our products,manufacturers and engineers must understand and accept our new technology. Inaddition, our amplifier and MEMS technologies may be more expensive for someapplications than traditional technologies. For these reasons, prospectivecustomers may be reluctant to adopt our technologies.

**INTENSECOMPETITION IN THE SEMICONDUCTOR AND CONSUMER AUDIO INDUSTRY COULD PREVENT USFROM SUSTAINING PROFITABILITY.**

The semiconductor andconsumer audio industry is highly competitive, and we expect the intensity ofthe competition to increase. Many of our competitors have greater financial,technical, research, marketing, sales, distribution, service and otherresources than we do. Moreover, our competitors may offer broader product linesand have greater name recognition than we do, and may offer discounts as acompetitive tactic. In addition, several development stage companies arecurrently creating or developing technologies and products that compete with orare being designed to compete with our technologies and products. Ourcompetitors may develop or market technologies or products that are moreeffective or more commercially attractive than our current or future products,or that may render our technologies or products less competitive or obsolete. Accordingly,if competitors introduce superior technologies or products and we cannot makeenhancements to our technologies and products necessary for them to remaincompetitive, our competitive position, and in turn, our business, revenues andfinancial condition, will be seriously harmed.

**OURBUSINESS COULD SUFFER IF WE EXPERIENCE DIFFICULTIES IN INTEGRATING ANYTECHNOLOGIES, PRODUCTS OR BUSINESSES WE ACQUIRE.**

In May of 2004, the Company acquired theintellectual property and other intangibles and hired staff from Standard MEMS, Inc.Acquisitions typically entail many risks and could result in difficulties inintegrating the operations and personnel of companies that we acquire or thetechnologies and products that we acquire. If we are not able to successfullyintegrate our acquisitions, we may not obtain the advantages that theacquisitions were intended to create, which could adversely affect our resultsof operations, financial condition and cash flows. In addition, in connectionwith acquisitions, we could experience disruption in our business or employeebase. There is also a risk that key employees of companies that we acquire orkey employees necessary to successfully commercialize technologies and productsthat we acquire may seek employment elsewhere, including with our competitors.

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**RISKS RELATED TO OUR INTELLECTUAL PROPERTY**

**OURINTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS MAY BE INSUFFICIENT TOPROTECT OUR COMPETITIVE POSITION.**

Our business depends, in part, on our ability toprotect our intellectual property. We rely primarily on patent, copyright,trademark and trade secret laws to protect our proprietary technologies. Wecannot be sure that such measures will provide meaningful protection for ourproprietary technologies and processes. We have four issued United Statespatents and three pending patent applications. In addition, we recentlyacquired a portfolio of MEMS intellectual property and the Company is reviewingthis portfolio to determine which of the acquired rights will be most useful inits business. We cannot be sure that any existing or future patents will not bechallenged, invalidated or circumvented, or that any rights granted thereunderwould provide us meaningful protection. The failure of any patents to provideprotection to our technology would make it easier for our competitors to offersimilar products.

We also generally enterinto confidentiality agreements with our employees and strategic partners, andgenerally control access to and distribution of our documentation and otherproprietary information. Despite these precautions, it may be possible for athird party to copy or otherwise obtain and use our products or technologywithout authorization, develop similar technology independently or designaround our patents. In addition, effective copyright, trademark and tradesecret protection may be unavailable or limited in certain foreign countries inwhich we operate.

**WE MAY BESUBJECT TO INTELLECTUAL PROPERTY RIGHTS DISPUTES, WHICH COULD DIVERT MANAGEMENT’SATTENTION AND COULD BE COSTLY.**

The semiconductor and consumer audio industries arecharacterized by vigorous protection and pursuit of intellectual propertyrights. From time to time, we may receive notices of claims of infringement,misappropriation or misuse of other parties’ proprietary rights. We cannot be surethat we will prevail in these actions, or that other actions alleginginfringement by us of third-party patents, misappropriation or misuse by us ofthird-party trade secrets or the invalidity of one or more patents held by uswill not be asserted or prosecuted against us, or that any assertions ofinfringement, misappropriation or misuse or prosecutions seeking to establishthe invalidity of our patents will not seriously harm our business. Forexample, in a patent or trade secret action, an injunction could be issuedagainst us requiring that we withdraw particular products from the market ornecessitating that specific products offered for sale or under development beredesigned.

Irrespective of thevalidity or successful assertion of various claims of infringement,misappropriation or misuse of other parties’ proprietary rights, we wouldlikely incur significant costs and diversion of our management and personnelresources with respect to the defense of such claims, which could seriouslyharm our business. If any claims or actions are asserted against us, we mayseek to obtain a license under a third party’s intellectual property rights. Wecannot be sure that under such circumstances a license would be available oncommercially reasonable terms, if at all. Moreover, we often incorporate theintellectual property of our strategic customers into our designs, and we havecertain obligations with respect to the non-use and non-disclosure of suchintellectual property. We cannot be sure that the steps taken by us to preventour or our customers’ misappropriation or infringement of the intellectualproperty will be successful.

**RISKS RELATING TO OUR COMMON STOCK**

**FACTORSUNRELATED TO OUR BUSINESS COULD NEGATIVELY IMPACT THE MARKET PRICE OF OURCOMMON STOCK.**

The stock marketshave experienced extreme price and volume fluctuations that have affected andcontinue to affect the market prices of equity securities of many technologycompanies. These fluctuations 

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oftenhave been unrelated or disproportionate to the operating performance of thosecompanies. We expect that the market price of our Common Stock will fluctuateas a result of variations in our quarterly operating results, or for otherreasons that are not related to the performance of our business. These fluctuationsmay be exaggerated if the trading volume of our Common Stock is low. Inaddition, due to the technology-intensive nature of our business, the marketprice for our Common Stock may rise and fall in response to various factorsincluding:

·       announcementsof technological innovations or new products, or competitive developments;

·       investorperceptions and expectations regarding our or our competitors’ products;

·       acquisitionsor strategic alliances by us or our competitors; or

·       thegain or loss of a significant customer or order.

In addition, marketfluctuations, as well as general economic, political and market conditions suchas recessions, interest rate changes or international currency fluctuations,may negatively impact the market price of our Common Stock.

**Item 2.**                        PROPERTIES

The Company leasesapproximately 5,000 square feet of office space at 129 Morgan Drive, Norwood,Massachusetts. The term of this lease expired on September 30, 2004. Currentlythe Company is renting this facility on a month-to-month basis. The 5,000square foot area is leased at a below-market rate. In addition, the Companyleases an office in Great River, New York as well as an office in Hong Kong.

**Item 3.**                        LEGALPROCEEDINGS

The Company is not a partyto any litigation in any court, and management is not aware of any contemplatedproceeding by any governmental authority against the Company.

**Item 4.**                        SUBMISSIONOF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of the securityholders of the Company during the fourth quarter of the year ended December 31,2004.

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**PART II**

**Item 5.**                        MARKET FORREGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

**Market Information**

The Company’s Common Stock was listed on the NASDAQStock Market (formerly the National Association of Securities Dealers’Automated Quotation System) from July 15, 1988 to June 8, 1992 underthe symbol APGG. The Common Stock was also listed on the Boston Stock Exchangeunder the symbol APG from February 14, 1990 until December 18, 1992.

From June 9, 1992 to September 1, 1999, theCompany’s Common Stock was quoted on the Over-the-Counter Bulletin Board (the “OTCBB”)of the NASDAQ Stock Market, Inc. under the symbol APGT. From September 1,1999, the Company’s Common Stock was no longer eligible for quotation on theOTCBB due to the phase-in implementation of NASD Rule 6530 requiring allOTCBB quoted companies to report their current financial information to theSecurities and Exchange Commission. From September 1, 1999 to September 12,2000, the Company’s Common Stock was quoted on the National Quotation Bureau’sPink Sheets. On August 29, 2000, the Company’s Registration Statement on Form 10-SBto register its Common Stock under the Securities Exchange Act of 1934 wasdeclared effective by the Securities and Exchange Commission and on September 12,2000, the Common Stock resumed being quoted on the Over the Counter BulletinBoard (the “OTCBB”) under the symbol APGT. From September 14, 2001 to October 8,2003 the Common Stock was quoted on The Nasdaq SmallCap Market under the symbolAPGT. On October 5, 2003, The American Stock Exchange approved the Company’sapplication to list its securities on the American Stock Exchange under thesymbol ATA.

Thefollowing table sets forth, for the periods indicated, the high and low salesprices for the Common Stock as reported by the American Stock Exchange and TheNasdaq SmallCap Market, as indicated. The bid quotations represent inter-dealerprices, without adjustment for mark-ups, mark-downs or commissions and do notnecessarily represent actual transactions. All prices listed below have beenadjusted to reflect post split prices.
| ** **                                                          | ** ** | **Common Stock** | ** ** |
|---------------------------------------------------------------------|------------|-----------------------|------------|
| ** **                                                          | ** ** | **High**              | ** ** | **Low** | ** ** |
| **2003:**                                                           | ** ** | ** **            | ** ** | ** ** | ** ** |
| First Quarter  (Nasdaq Small Cap Market from September 14, 2001)    |       | 5.2500                |       | 2.5900 |   |
| Second Quarter                                                      |       | 5.7700                |       | 2.3300 |   |
| Third Quarter                                                       |       | 10.5000               |       | 4.6000 |   |
| Fourth Quarter  (American Stock Exchange from October 9, 2003) |       | 14.8500               |       | 9.3100 |   |
| **2004:**                                                           | ** ** | ** **            | ** ** | ** ** | ** ** |
| First Quarter                                                       |       | 11.7900               |       | 8.6000 |   |
| Second Quarter                                                      |       | 9.1500                |       | 8.3000 |   |
| Third Quarter                                                       |       | 8.4000                |       | 3.7000 |   |
| Fourth Quarter                                                      |       | 4.7000                |       | 3.4500 |   |

 

**Stockholders**

As of March 15, 2005,there were approximately 90 holders of record and approximately 807 beneficialholders of 11,838,332 outstanding shares of Common Stock.

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**Dividends**

On August 12, 2003,the Board of Directors approved a two for one split of the Company’s CommonStock in the form of a 100% stock dividend. On December 11, 2003 eachstockholder of record as of the close of business on November 17, 2003received one share of Common Stock for each share held.

**Unregistered Sales of Securities**

Set forth in chronological order is informationregarding shares of Common Stock sold and options granted by the Company duringthe period covered by this Annual Report on Form 10-KSB and notpreviously reported on the Company’s Quarterly Reports on Form 10-QSB.Also included is the consideration, if any, received by the Company for suchshares and options and information relating to the section of the SecuritiesAct of 1933, as amended, or rule of the Securities and Exchange Commissionunder which exemption from registration was claimed. All of the followingsecurities were issued directly by the Company and there were no underwritersor selling agents involved in these transactions.

On December 8, 2004, 2,000 shares of the Company’sCommon Stock were issued to investors as a result of the exercise of warrantsissued pursuant to a Stock Subscription Agreement in a private placement dated January 25,2000. The exercise price for these shares was $1.25 per share. The exemptionfrom registration relied upon was Section 4(2) of the Securities Actof 1933, as amended.

On December 14, 2004, 40,000 shares of theCompany’s Common Stock were issued to a former director as a result of theexercise of certain options pursuant to the Company’s 1997 Employee, Director,and Consultant Stock Option Plan. The exercise price for these shares was $.275per share.

From October 4, 2004to December 2, 2004, the Company granted options to purchase 87,500 sharesof Common Stock under its 1997 Employee, Director, and Consultant Stock OptionPlan to certain employees at exercise prices ranging from $3.85 to $4.04 pershare.

**Item 6.**                        SELECTEDFINANCIAL DATA

THIS INFORMATION REQUIRED BY THIS ITEM 6 WILL BE FILEDUPON COMPLETION OF THE AUDIT PROCESS FOR THE 2004 FISCAL YEAR.

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**Item 7.**                        MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE FINANCIAL INFORMATION REQUIRED BY THIS ITEM 7 WILLBE FILED UPON COMPLETION OF THE AUDIT PROCESS FOR THE 2004 FISCAL YEAR.

**Overview**

The Company designs, develops and markets siliconbased products incorporating proprietary technologies. The Company’s patentedall-digital, high efficiency Direct Digital Amplification (DDX®)technology Integrated Circuits (“ICs”) are used in a range of audioapplications including: home theater systems, powered speakers, car audio,commercial audio, and PC multi-media. The Company is developing new System-on-Chip (SOC) products using itsanalog and digital circuit designs and Micro-Electromechanical Systems (MEMS)technology for the consumer, automotive, communications and medical markets. Atthe appropriate time, the Company will segment the reporting of the MEMSdivision.

From 1981 until 1995, the Company was in the businessof engineering, manufacturing and marketing high quality, high-end patentedribbon loudspeaker systems for use in home audio and video entertainmentsystems. Since 1995, the Company has focused exclusively on the development andcommercialization of its proprietary amplifier technology, known as DDX®.DDX technology is an all-digital, high efficiency amplifier technologythat provides true digital audio reproduction while lowering manufacturing costcompared to traditional analog amplifier solutions. The Company’s initial DDXdevelopment efforts were directed toward the implementation of a digitalcontroller design and the specifications of power designs to support DDXlicensing objectives. The Company signed an exclusive licensing agreement foraudio applications with STMicroelectronics in February 2001. Under thislicensing agreement with STMicroelectronics NV (ST), the Company develops andprovides intellectual property to be used in royalty bearing products producedby ST. In addition, the Company is working under a development agreement withST to develop and market new semiconductor products that leverage Apogee’s DDXtechnology and ST’s intellectual property and semiconductor design, developmentand manufacturing capability. ST iscurrently shipping eighteen royalty bearing DDX-based semiconductor products tocustomers. The Company continues to support its licensing activitieswith STMicroelectronics and other companies.

In 1996 the Company started the development ofDDX-based semiconductor products. The Company uses two independent suppliers toproduce its semiconductor products. The first DDX-based IC product was releasedto production in late 2000 and since that time the Company has released 24additional IC products. The Company markets and sells its semiconductorproducts to audio manufacturers using a worldwide sales and distributionnetwork. The Company uses contract manufacturers to produce circuit boards forcustomers who support the Company’s IC marketing activities.

The Company outsources themanufacturing, assembly and preliminary testing of its semiconductor productsand evaluation boards. Cost of revenue includes the third-party manufacturing,testing and assembly costs as well as costs associated with shipping. Researchand development expenses consist primarily of salaries and related overhead costsassociated with engineering activities as well as other materials and relatedservices used in the development of the Company’s semi-conductor chips.Selling, general and administrative expenses consist primarily of employeecompensation and overhead charges as well as expenses directly associated withthe marketing of the Company’s products.

**Critical Accounting Policies**

The Company prepares itsconsolidated financial statements in conformity with accounting principlesgenerally accepted in the United States of America. The preparation of thesefinancial statements requires us to make estimates, judgments and assumptionsthat we believe are reasonable based upon the 

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informationcurrently available. These estimates and assumptions affect the reported amountsof assets and liabilities at the date of the financial statements and thereported amounts of revenues and expenses during the periods presented. Anyfuture changes to these estimates and assumptions could have a significantimpact on the reported amounts of revenue, expenses, assets and liabilities inour financial statements. The significant accounting policies which we believeare the most critical to aid in fully understanding and evaluating our reportedfinancial results include the following:

**Revenue Recognition**

Apogee recognizes revenuefrom product sales at the time of shipment, when the sales price is fixed anddeterminable and collectibility is reasonably assured. The Company does notoffer a right of return on product sales. Any price adjustment after shipmentof goods is recorded as an offset to revenue. For sales transactions, we complywith the provisions of Staff Accounting Bulletin 104, Revenue Recognition,which states that revenue should be recognized when the following revenuerecognition criteria are met: (1) persuasive evidence of an arrangementexists; (2) the product has been shipped and the customer takes ownershipand assumes the risk of loss; (3) the selling price is fixed ordeterminable; and (4) collection of the resulting receivable is reasonablyassured. In addition, the Company records royalty revenue when earned inaccordance with the underlying agreements. Consulting revenue is recognized asservices are performed.

**Accounts Receivable**

The Company performscredit evaluations of customers and determines credit limits based upon paymenthistory, customers’ creditworthiness and other factors, as determined by ourreview of their current credit information. For a majority of our larger sales,we can require the issuance of a Letter of Credit. Smaller accounts must eitherpay via credit card or in advance of shipment. We continuously monitorcollections and payments from our customers, and we maintain a provision forestimated credit losses based upon our historical experience and any specificcustomer collection issues that we have identified. We cannot guarantee that wewill avoid credit losses in the future. If the financial condition of theCompany’s customers were to deteriorate, resulting in an impairment of theirability to make payments, additional allowances may be required. Since ouraccounts receivable are highly concentrated in a small number of customers, asignificant change in the liquidity or financial position of any one of thesecustomers could have a material adverse impact on the collectibility of ouraccounts receivable, our liquidity or our future results of operations.

**Inventory**

Apogeestates its inventory at the lower of cost (first-in, first-out) or market. TheCompany maintains allowances for estimated excess or obsolete inventories basedon the Company’s review of inventory levels, projected future sales andcomparison of actual manufacturing costs to standard costs. If actual marketconditions are less favorable than those projected by management, additionalallowances may be required.

**Valuation of Long-Lived Assets**

Property, plant andequipment, patents, trademarks and other intangible assets are amortized overtheir estimated useful lives. Useful lives are based on management’s estimatesover the period that such assets will generate revenue. Intangible assets arereviewed for impairment whenever events or changes in circumstances indicatethat the carrying value of an asset may not be recoverable. Future adversechanges in market conditions or poor operating results of underlying capitalinvestments or intangible assets could result in losses or an inability torecover the carrying value of such assets, thereby possibly requiring animpairment charge in the future.

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**Item 7A.**                QUANTITATIVE ANDQUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company’s financial instruments include: cash,cash equivalents, accounts receivable and accounts payable. At December 31,2004, the carrying value of the Company’s cash, cash equivalents, accountsreceivable and accounts payable approximate fair values given the shortmaturity of these instruments.

Although the Company’s sales are predominately tointernational markets, the Company believes that it does not have materialforeign currency exchange rate risk since international sales are in U.S.dollars and material purchases from foreign suppliers are typically alsodenominated in U.S. dollars. Additionally, the functional currency of theCompany’s foreign sales office is the U.S. dollar.

It is the Company’s policynot to enter into derivative financial instruments for speculative purposes.

**Item 8.**                        FINANCIALSTATEMENTS AND SUPPLEMENTARY DATA

THE INFORMATION REQUIREDBY THIS ITEM 8 WILL BE FILED UPON COMPLETION OF THE AUDIT PROCESS FOR THE 2004FISCAL YEAR.

**Item 9.**                        CHANGES INAND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

PLEASE SEE THE DISCLOSURESET FORTH IN THE COMPANY’S FORM 8-K FILED ON THE SAME DAY AS THIS FORM10-KSB.

**Item 9A.**                CONTROLS ANDPROCEDURES

(a)   *Evaluation of Disclosure Controls and Procedures*.   Ourprincipal executive officer and principal financial officer, after evaluatingthe effectiveness of our disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of theperiod covered by this Annual Report on Form 10-KSB, have concluded that,based on such evaluation, our disclosure controls and procedures were adequateand effective to ensure that material information relating to us, including ourconsolidated subsidiaries, was made known to them by others within thoseentities, particularly during the period in which this Annual Report on Form 10-KSBwas being prepared.

(b)   *Changes in Internal Controls*.   There were no changes inour internal control over financial reporting identified in connection with theevaluation of such internal control that occurred during the fourth quarter ofour last fiscal year that have materially affected, or are reasonably likely tomaterially affect, our internal control over financial reporting. 

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**PART III**

**Item 10.**                 DIRECTORSAND EXECUTIVE OFFICERS OF THE REGISTRANT

The response to this itemis incorporated by reference from the discussion responsive thereto under thecaptions “Management,” “Compliance with Section 16(a) of theSecurities Exchange Act of 1934,” and “Code of Conduct and Ethics” in theCompany’s Proxy Statement for the 2005 Annual Meeting of Stockholders.  Disclosure regarding any amendments to, orwaivers from, provisions of the Code of Conduct and Ethics that apply to ourprincipal executive and financial officers will be included in a Current Reporton Form 8-K within four business days following the date of theamendment or waiver, unless website posting of such amendments or waivers ispermitted by the rules of the American Stock Exchange, Inc.

**Item 11.**                 EXECUTIVECOMPENSATION

The response to this itemis incorporated by reference from the discussion responsive thereto under thecaption “Executive Compensation” in the Company’s Proxy Statement for the 2005Annual Meeting of Stockholders.

**Item 12.**                 SECURITYOWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERS

The response to this itemis incorporated by reference from the discussion responsive thereto under thecaption “Share Ownership” in the Company’s Proxy Statement for the 2005 AnnualMeeting of Stockholders.

**Item 13.**                 CERTAINRELATIONSHIPS AND RELATED TRANSACTIONS

The response to this itemis incorporated by reference from the discussion responsive thereto under thecaptions “Certain Relationships and Related Transactions” and “ExecutiveCompensation—Employment Agreements, Termination of Employment and Change ofControl Arrangements” in the Company’s Proxy Statement for the 2005 AnnualMeeting of Stockholders.
| **Item 14.**      | **EXHIBITS** |
|-------------------|--------------|
| **Item 14(a)**    | Not Included |
| **Item 14(a)(1)** | Not Included |
| **and (2)**       |         |

 

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| **Item 14(a)(3)** | *Exhibits* |
|-------------------|------------|

 

Thefollowing is a list of exhibits filed as part of this Annual Report on Form 10-KSB.
| Exhibit  No. | ** ** | ** **                                                                                                                                                                                                                                                                                             | ** ** | **Description** |
|--------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------|
| 3.1          |       | Certificate of Incorporation of Apogee  Technology, Inc., incorporated herein by reference to Exhibit 3.1  to the Registrant’s Form 10-SB, as amended (File No. 000-17053).                                                                                                   |
| 3.2          |       | Amendment of Certificate of Incorporation of Apogee  Technology, Inc., incorporated herein by reference to Exhibit 3.2  to the Registrant’s Form 10-SB, as amended (File No. 000-17053).                                                                                      |
| 3.3          |       | Certificate of Amendment to Certificate of  Incorporation of Apogee Technology, Inc., incorporated herein by  reference from Exhibit 3.3 to the Registrant’s Quarterly Report on  Form 10-QSB for the quarter ended June 30, 2001 (File.  No. 000-30656).                |
| 3.4          |       | Restated By-Laws of Apogee Technology, Inc.,  incorporated herein by reference from Exhibit 3.4 to the Registrant’s  Quarterly Report on Form 10-QSB for the quarter ended June 30, 2001  (File. No. 000-30656).                                                         |
| 10.1*        |       | License Agreement dated February 2, 2001 by and  between the Registrant and STMicroelectronics, NV, incorporated herein by  reference from Exhibit 10.1 to the Registrant’s Quarterly Report on  Form 10-QSB for the quarter ended March 31, 2001 (File  No. 000-30656). |
| 10.2         |       | Form of 1999 Stock and Warrant Subscription  Agreement, incorporated herein by reference to Exhibit 10.1 to the  Registrant’s Form 10-SB, as amended (File No. 000-17053).                                                                                                    |
| 10.3         |       | Form of 1999 Warrant to purchase shares of  Common Stock of the Registrant, incorporated herein by reference to  Exhibit 10.2 to the Registrant’s Form10-SB, as amended (File  No. 000-17053).                                                                                     |
| 10.4         |       | Form of 2000 Stock Subscription Agreement,  incorporated herein by reference to Exhibit 10.3 to the Registrant’s  Form 10-SB, as amended (File No. 000-17053).                                                                                                                |
| 10.5         |       | Securities Purchase Agreement, incorporated herein  by reference to Exhibit 10.1 to the Registrant’s Current Report on  Form 8-K, dated April 29, 2001 (File No. 001-10456).                                                                                                  |
| 10.6         |       | Registration Rights Agreement, incorporated herein  by reference to Exhibit 10.2 to the Registrant’s Current Report on  Form 8-K, dated April 29, 2001 (File No. 001-10456).                                                                                                  |
| 10.7         |       | Form of Warrant, incorporated herein by  reference to Exhibit 10.3 to the Registrant’s Current Report on  Form 8-K, dated April 29, 2001 (File No. 001-10456).                                                                                                           |
| 10.8         |       | Addendum to Securities Purchase Agreement,  incorporated herein by reference to Exhibit 10.4 to the Registrant’s  Current Report on Form 8-K, dated April 29, 2001 (File  No. 001-10456).                                                                                     |
| 14           |       | Code of Conduct and Ethics, incorporated herein by  reference to Exhibit 14 to the Registrant’s Form 10-KSB for the  year ended December 31, 2003 (File No. 000-30656).                                                                                                       |

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*                    Confidentialtreatment requested as to certain portions of the document, which portions havebeen omitted and filed separately with the Securities and Exchange Commission.

Where adocument is incorporated by reference from a previous filing, the exhibitnumber of the document in that previous filing is indicated in parentheses afterthe description of such document.

**Item 15.**                 PRINCIPALACCOUNTANT FEES AND SERVICES

The response to this item is incorporated by referencefrom the discussion responsive thereto under the caption “Independent PublicAccountants” in the Company’s Proxy Statement for the 2005 Annual Meeting ofStockholders.

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**SIGNATURES**

Pursuantto the requirements of Section 13 or 15(d) of the Securities ExchangeAct of 1934, the registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized, on April 18, 2005.
|        |     | **APOGEE TECHNOLOGY, INC.**           |
|--------|----------|---------------------------------------|
|   | By:      | /s/ HERBERT M. STEIN                  |
|   |     | Herbert M. Stein                      |
|   | * * | *President, Chief Executive Officer,* |
|   | * * | *Treasurer and Chairman of the Board* |

 

Pursuantto the requirements of the Securities Exchange Act of 1934, this report hasbeen signed below by the following persons on behalf of the registrant and inthe capacities indicated below and on the dates indicated.
|        | **Signatures** | ** **             | ** ** | ** **                          | **Title** | ** **           | ** ** | ** ** | **Date** | ** ** |
|--------|----------------|------------------------|------------|-------------------------------------|-----------|----------------------|------------|------------|----------|------------|
| By:    |           | /s/ HERBERT M. STEIN   |       | President, Chief  Executive Officer |      | April 18,  2005 |
|   |           | Herbert M. Stein       |       | Treasurer and Chairman of the Board |      |                 |
| By:    |           | /s/ CRAIG A. DUBITSKY  |       | Director                            |      | April  18, 2005      |
|   |           | Craig A. Dubitsky      |       |                                |      |                 |
| By:    |           | /s/ ARTHUR S. REYNOLDS |       | Director                            |      | April 18,  2005 |
|   |           | Arthur S. Reynolds     |       |                                |      |                 |
| By:    |           | /s/ SHERYL B. STEIN    |       | Director                            |      | April 18,  2005 |
|   |           | Sheryl B. Stein        |       |                                |      |                 |
| By:    |           | /s/ ALAN W. TUCK       |       | Director                            |      | April 18,  2005 |
|   |           | Alan W. Tuck           |       |                                |      |                 |
|        |                |                        |            |                                     |           |                      |            |            |          |            |  |  |

 

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