eMagin corporation - Page 17

eMagin Corporation announces completion of a $1.7 million private placement of its common stock and warrants with both new and existing institutional investors. The net proceeds from the financing will be used to provide working capital.

Under the agreements, investors agreed to purchase 1,586,539 shares of common stock at a price of $1.04 per share and warrants to purchase 793,273 shares of common stock at an exercise price of $1.30 per share with the warrants expiring April 2, 2013.

We are pleased to receive the support of both existing and new investors," said Admiral Thomas Paulson, eMagin’s interim chief executive officer. "These funds will not only help to support our balance sheet, but will also allow us to undertake capital expenditures on our production line to support our efforts to increase revenues and meet expected demand this year and enhance the introduction of new products that will drive our growth in the years to come.

The results show record revenues with year-over-year results improving by 121% for the quarter and 130% for the first nine months of 2007.

Financial Summary:

• Revenue for the three and nine months ending September 30, 2007, of $5.1 million and $12.9 million represent increases of 121% and 130% from $2.3 million and $5.6 million in 2006.
• The company achieved quarterly operating profit for the first time with $14,000 of operating income during the third quarter as compared to an operating loss of $3.5 million during the third quarter of 2006. For the nine month period operating loss declined 73% to $3.7 million in 2007, down from $13.5 million in 2006.
• During the quarter the company completed a deferral of approximately $6 million of secured notes.

With third quarter’s strong operating performance revenue for the full year ended December 31, 2007 is expected to comfortably exceed our projections of more than $16 million or an increase of more than 100% over $8.2 million in 2006.

Saab Avitronics has chosen eMagin microdisplays for its news Multi-Purpose Virtual Image Display (VID). The unit comprises high-performance magnifying optics and the OLED, sealed in an aluminum casing.

Saab's compact VID is suitable for combat vehicles, aircraft, helicopters, and naval vessels using a wide range of sensors such as electro-optical, infrared, low-light television, and radars. Its collimating lens provides a comfortable viewing distance even at very close range. Sealed in an aluminum casing, the VID offers a compact, lightweight, rugged alternative to legacy CRT-based systems.

eMagin Corporation will begin taking orders for its SVGA 3DS OLED-XL microdisplay at next week’s Night Vision Conference in Washington, D,C. The company expects to begin shipping the product in the first quarter of 2008.

The SVGA-3DS microdisplay offers both analog and digital signal processing in a compact display (0.44-inch) with greater power efficiency. This high-density OLED-on-silicon microdisplay promises an affordable, easy-to-integrate solution for many virtual imaging systems. eMagin’s SVGA-3DS microdisplays eliminate the need for extra circuitry and components while allowing for a smaller display module design with increased functionality, with no increase in power consumption.

Specific improvements include increased pixel uniformity, improved color gamut, on-chip temperature sensor and compensation, and compatibility with both analog RGB and digital video signals. The 800 x 600-pixel array comprises triads of vertical sub-pixels stacked side by side to make up each 11.1 x 11.1-micrometer color pixel. Versatile timing controls accommodate a variety of video formats. On-board circuitry ensures consistent color and brightness over a wide range of operating temperatures.

eMagin Corporation has issued preliminary financial results for its second quarter ending June 30, 2007. The results show record revenues with year-over-year revenues improving by 153% for the quarter and 137% for the first six months of 2007.

Financial Summary

• Revenue for the three and six months ending June 30, 2007, of $4.2 million and $7.8 million represent increases of 153% and 137% from $1.7 million and $3.3 million in 2006. Once again, increases in microdisplay demand fueled the reported growth and eMagin’s eighth consecutive quarter of revenue increases.
• Gross margins in 2007 grew to 30% of revenue or $1.3 million for the quarter and 23% or $1.8 million for the six-month period as compared to gross losses of $1.3 million (77%) of revenue and $2.7 million (81%) of revenue in 2006. These results reflect improvements of $2.6 million and $4.5 million for the three and six month periods ended June 30, 2007 as compared to 2006.
• Operating expenses declined 32% and 25% from $2.4 million and $5.5 million for the three and six month periods ending June 30, 2007, as compared to $3.6 million and $7.4 million in 2006.
• Operating loss declined 76% for the three months ending June 30, 2007, to $1.1 million from $4.8 million in 2006. Excluding $384,000 of non-cash expenses, the operating losses for the quarter totaled $760,000. For the six-month period, losses were $3.7 million in 2007 down 63% or $6.3 million from $10.1 million in 2006.
• Net losses for the three and six month periods ending June 2007 were $1.7 million or $0.15 per share and $4.7 million or $0.42 per share as compared to a net loss of $4.8 million or $0.48 per share and $10.0 million or $1.00 per share for the periods in 2006.

eMagin anticipates revenues to exceed $16 million for the full year, ending December 31, 2007. Built on our pioneering work in OLED microdisplay technology and on-going customer development and support, our combination of manufacturing and financial discipline with marketing focus has enabled us to improve the business substantially during the first half of 2007, said K.C. Park, interim CEO and president, eMagin Corporation. With this solid footing established we’re excited about our opportunities and look forward to continuing our growth.

FLIR Systems has chosen eMagin OLED microdisplays for its innovative ThermaCAM P640 thermal video camera. Ideal for top-level thermography, the P640 can resolve greater detail with smaller targets, yielding more informative and higher quality thermal images.

The device features a new 640x480-pixel sensor that quadruples the typical high-end thermal sensor's 320x240-pixel resolution and is 16X the standard 160x120 thermal imager. The camera also supports interchangeable lenses and features an 8:1 continuous digital zoom with full pan technology. Users can choose between auto or manual focus, or use both in combination. Its aiming system is based on built-in Laser LocatIR(TM).

eMagin assigned to Kodak all rights, title and interest to a patent entitled "Serially-connected Organic Light Emitting Diode Stack Having Conductors Sandwiching Each Light Emitting Layer" (the "Patent"). In consideration to the Company for the transfer of the rights to the Patent, Kodak agreed that:

(1) Each of the Company's quarterly royalty payments owed to Kodak under the certain Nonexclusive Field of Use License Agreement Relating to OLED Technology for Miniature, High Resolution Displays, dated March 29, 1999 between the Company and Kodak, as amended(the "License Agreement") for the second half (from July 1 through December 31) of calendar year 2007 shall be reduced by fifty percent (50%); and

(2) Each of the Company's quarterly royalty payments owed to Kodak under
Section 4.2 of the License Agreement for the calendar year 2008 shall be reduced by fifty percent (50%).

DisplaySearch revealed in its latest Quarterly OLED Shipment and Forecast Report that Q1'07 OLED shipments were 19.1M, up 71%Y/Y and revenues were $121M, up 56% Y/Y. Shipments and revenue were down Q/Q, 14% and 13%, respectively, due to seasonality. OLED displays compete with LCDs in small/medium applications such as mobile phone main displays and sub-displays, MP3s, and automotive consoles.

Active matrix OLEDs displays continued volume shipments with Samsung SDI, Kodak, Sony and eMagin shipping 335K displays in Q1'07.  By Q2'07, the volume is expected to grow to 685K displays. Applications include MP3s, mobile phones and near eye.

Overall, RiTdisplay led in units, with 5.1M closely followed by Pioneer, also at 5.1M, Samsung SDI at 3.7M, LGE at 3.1M and TDK at 1.5M.  Univision, which had shut down due to financial problems has restarted production and shipped 900K units in Q1'07 and is expected to grow volume to 1.5M units next quarter, recovering to a leadership position.

Sub-displays and MP3 player displays combined to account for about 87% of shipments at 12.6M and 4.0M, respectively. Of the remaining applications, main displays and industrial applications showed strong growth, but volume remained low.

Sub-display volume is very strong in Japan and is the major cause of the growth in the category. Main display growth is primarily due to the Kyocera cell phone which uses the Samsung SDI 2.4" QVGA AMOLED panel.

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eMagin Corporation will demonstrate the latest innovations in power-efficient microdisplays, its prototype SVGA-3DS microdisplay, at this year’s Society for Information Display Conference and Exhibition. Located in Booth 1717 at the Long Beach Convention Center, eMagin will also demonstrate a number of applications for personal display systems based on its OLED microdisplays and modules.

With first prototype units already in the hands of developers, the SVGA-3DS microdisplay offers both analog and digital signal processing in a compact display (0.44-inch) with greater power efficiency. This high-density OLED-on-silicon microdisplay promises an affordable, easy-to-integrate solution for many virtual imaging systems. eMagin’s SVGA-3DS microdisplays eliminate the need for extra circuitry and components while allowing for a smaller display module design with increased functionality, with no increase in power consumption.

Specific improvements include increased pixel uniformity, improved color gamut, on-chip temperature sensor and compensation, and compatibility with both analog RGB and digital video signals. The 800 x 600-pixel array comprises triads of vertical sub-pixels stacked side by side to make up each 11.1 x 11.1-micrometer color pixel. Versatile timing controls accommodate a variety of video formats. On-board circuitry ensures consistent color and brightness over a wide range of operating temperatures.

Built on eMagin’s original active matrix SVGA-3D and SVGA+ integrated circuits, the current OLED-XL displays typically demonstrate 4X improvements in efficiency of eMagin’s original products. This gain in efficiency enables the OLED-XL microdisplays to provide significantly higher luminance at levels power consumption equivalent to those required by the first and second generation products.