FILED PURSUANT TO RULE 424(B)(3)
REGISTRATION STATEMENT NO. 333-122394
EMRISE CORPORATION
PROSPECTUS SUPPLEMENT NO. 1 DATED AUGUST 9, 2005
TO PROSPECTUS DATED JUNE 30, 2005
The prospectus of Emrise Corporation dated June 30, 2005 is supplemented to
include the following updated information:
Emrise's common stock is scheduled to begin trading on the Archipelago
Exchange(SM) (ArcaEx(R)), a facility of the Pacific Exchange(R), on
Wednesday, August 10, 2005, under the symbol "ERI."
"Private Placements Through Which the Selling Security Holders Obtained
Beneficial Ownership of the Offered Shares - January 2005 Private Placement
of Common Stock and Warrants" at page 100 of the prospectus is corrected to
reflect that the per share exercise price of the placement agent warrants
issued to Roth Capital Partners, LLC is $1.73.
"Private Placements Through Which the Selling Security Holders Obtained
Beneficial Ownership of the Offered Shares - Other Private Placement
Transactions" at page 102 of the prospectus is updated to reflect the following:
In April 2001, we issued to Coffin Partners LLC a five-year warrant
to purchase up to 35,000 shares of common stock at a per share exercise price
of $0.39 in consideration for investor relations services to be rendered by its
affiliate, Coffin Communications Group. We have included these underlying
shares for resale under this prospectus. On August 8, 2005, Coffin Partners LLC
received 35,000 shares of common stock upon exercise of this entire warrant.
In September 2002, we issued to Jacques Moisset a three-year warrant
to purchase up to 120,000 shares of common stock at a per share exercise price
of $0.50 in consideration for post-retirement business services rendered. We
have included these underlying shares for resale under this prospectus. On
August 3, 2005, Mr. Moisset received 78,042 shares of common stock through a
cashless exercise of this entire warrant.
The "Selling Security Holder Table" at pages 96 through 100 of the
prospectus is revised to reflect the following updated beneficial ownership
information for the following selling security holders, which information is
provided as of August 9, 2005 based upon 37,497,750 shares of Emrise common
stock outstanding as of that date:
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SHARES OF SHARES OF
COMMON STOCK COMMON STOCK
BENEFICIALLY OWNED BENEFICIALLY OWNED
PRIOR TO OFFERING SHARES OF AFTER OFFERING
NAME OF -------------------------- COMMON STOCK --------------------
BENEFICIAL OWNER NUMBER PERCENTAGE BEING OFFERED NUMBER PERCENTAGE
----------------------------------------- ------------- ---------- ------------- ------- ----------
JLF Offshore Fund, Ltd................... 2,062,175 (1) 5.44% 2,062,175 (1) -- --
JLF Partners I, LP....................... 1,398,859 (2) 3.70% 1,336,225 (2) 62,634 *
JLF Partners II, LP...................... 104,966 (3) * 101,600 (3) 3,366 *
The Pinnacle Fund, L.P................... 3,127,800 (4) 8.20% 3,125,000 (4) 2,800 *
Bonanza Master Fund Ltd.................. 1,750,000 (5) 4.62% 1,750,000 (5) -- --
Roaring Fork Capital SBIC, L.P........... 1,706,250 (6) 4.51% 1,706,250 (6) -- --
Lagunitas Partners LP.................... 1,125,000 (7) 2.99% 1,125,000 (7) -- --
Gruber & McBaine International........... 250,000 (8) * 250,000 (8) -- --
Jon D. Gruber & Linda W. Gruber JTWROS... 1,581,250 (9) 4.19% 206,250 (10) -- --
J. Patterson McBaine..................... 1,481,250 (11) 3.92% 106,250 (12) -- --
MicroCapital Fund LP..................... 1,080,000 (13) 2.87% 1,080,000 (13) -- --
MicroCapital Fund Ltd.................... 607,500 (14) 1.62% 607,500 (14) -- --
Omicron Master Trust..................... 217,125 (15) * 217,125 (15) -- --
Stratford Partners, L.P.................. 431,250 (16) 1.15% 431,250 (16) -- --
Select Contrarian Value Partners, L.P.... 375,000 (17) 1.00% 375,000 (17) -- --
Precept Capital Master Fund, G.P......... 281,250 (18) * 281,250 (18) -- --
Roth Capital Partners, LLC............... 650,310 (19) 1.71% 650,310 (19) -- --
Noel C. McDermott, Trustee of the
Noel C. McDermott Revocable
Living Trust dated
December 18, 1995..................... 764,211 (20) 2.04% 764,211 (20) -- --
Warren P. Yost and Gail A. Yost,
Co-Trustees Under Declaration
of Trust dated March 9, 1988.......... 599,381 (21) 1.60% 599,381 (21) -- --
Hayden Communications, Inc............... 125,000 (22) * 125,000 (22) -- --
Coffin Partners LLC...................... 35,000 (23) * 35,000 (23) -- --
George Farndell.......................... 314,748 (24) * 150,000 (24) 164,748 *
Steven Jacobus........................... 50,000 (25) * 50,000 (25) -- --
Jacques Moisset.......................... 78,042 (26) * 78,042 (26) -- --
Jason Oliva.............................. 401,708 (27) 1.07% 200,500 (27) 201,208 *
Joseph Mirabella......................... 50,000 (28) * 50,000 (28) -- --
Placido Albanese......................... 15,000 (29) * 15,000 (29) -- --
-------------
* Less than 1.00%
(1) Includes 413,675 shares underlying warrants. Power to vote or dispose
of the shares is held by Jeffrey L. Feinberg, as managing member of JLF
Asset Management, LLC. JLF Asset Management, LLC is investment manager
of JLF Offshore Fund, Ltd. and of JLF Partners I, LP and JLF Partners
II, LP, two other selling security holders. The address for Mr.
Feinberg is c/o JLF Asset Management, LLC, 2775 Via de la Valle, Suite
204, Del Mar, CA 92014.
(2) Includes 265,925 shares underlying warrants. Power to vote or dispose
of the shares is held by Jeffrey L. Feinberg, as managing member of JLF
Asset Management, LLC. See footnote (1) above for information regarding
JLF Asset Management, LLC.
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(3) Includes 20,400 shares underlying warrants. Power to vote or dispose
of the shares is held by Jeffrey L Feinberg, as managing member of JLF
Asset Management, LLC. See footnote (1) above for information regarding
JLF Asset Management, LLC.
(4) Includes 625,000 shares underlying a warrant. Power to vote or dispose
of the shares is held by Barry M. Kitt, as sole member of Pinnacle Fund
Management, LLC, which entity is the general partner of Pinnacle
Advisers, L.P., which entity is the general partner of The Pinnacle
Fund, L.P. The address for Mr. Kitt is c/o The Pinnacle Fund, L.P.,
4965 Preston Park, Blvd., Suite 240, Plano, TX 75093.
(5) Includes 350,000 shares underlying a warrant. Power to vote or dispose
of the shares is held by Bernay Box, as president of Bernay Box & Co.,
which entity is the general partner of Bonanza Master Fund Ltd.
(6) Includes 341,250 shares underlying a warrant. Sole power to vote or
dispose of the shares is held by Eugene McColley as manager of Roaring
Fork Management, LLC, which entity is the general partner of Roaring
Fork Capital SBIC, L.P.
(7) Includes 225,000 shares underlying a warrant. Power to vote or dispose
of the shares is held by Jon D. Gruber and J. Patterson McBaine, as
managers of Gruber & McBaine Capital Management, which entity is the
general partner of Lagunitas Partners LP.
(8) Includes 50,000 shares underlying a warrant. Power to vote or dispose
of the shares is held by Jon D. Gruber and J. Patterson McBaine, as
managers of Gruber & McBaine Capital Management, which entity is the
investment advisor to Gruber & McBaine International.
(9) Includes 165,000 outstanding shares and 41,250 shares underlying a
warrant held by Jon D. Gruber and Linda W. Gruber JTWROS. Also includes
aggregates of 1,100,000 outstanding shares and 275,000 shares
underlying warrants held by Lagunitas Partners, LP and Gruber & McBaine
International, two other selling security holders.
(10) Represents 165,000 outstanding shares and 41,250 shares underlying a
warrant held by Jon D. Gruber and Linda W. Gruber JTWROS.
(11) Includes 85,000 outstanding shares and 21,250 shares underlying a
warrant held by Mr. McBaine. Also includes aggregates of 1,100,000
outstanding shares and 275,000 shares underlying warrants held by
Lagunitas Partners, LP and Gruber & McBaine International, two other
selling security holders.
(12) Represents 85,000 outstanding shares and 21,250 shares underlying a
warrant held by Mr. McBaine.
(13) Includes 216,000 shares underlying a warrant. MicroCapital LLC is the
general partner and investment advisor to MicroCapital Fund LP and
MicroCapital Fund Ltd. Ian P. Ellis is the principal owner of
MicroCapital LLC and has sole responsibility for the selection,
acquisition and disposition of the portfolio securities by MicroCapital
LLC on behalf of its funds.
(14) Includes 121,500 shares underlying a warrant. MicroCapital LLC is the
general partner and investment advisor to MicroCapital Fund LP and
MicroCapital Fund Ltd. Ian P. Ellis is the principal owner of
MicroCapital LLC and has sole responsibility for the selection,
acquisition and disposition of the portfolio securities by MicroCapital
LLC on behalf of its funds.
(15) Represents 217,125 shares underlying a warrant. Omicron Capital, L.P.,
a Delaware limited partnership (Omicron Capital), serves as investment
manager to Omicron Master Trust, a trust formed under the laws of
Bermuda (Omicron). Bruce Bernstein is the managing member of Omicron
Capital. Omicron Capital, Inc., a Delaware corporation (OCI), serves as
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general partner of Omicron Capital, and Winchester Global Trust Company
Limited (Winchester) serves as the trustee of Omicron. By reason of
such relationships, Omicron Capital and OCI may be deemed to share
dispositive power over the shares of our common stock owned by Omicron,
and Winchester may be deemed to share voting and dispositive power over
the shares of our common stock owned by Omicron. Omicron Capital, OCI
and Winchester disclaim beneficial ownership of such shares of our
common stock. No other person has sole or shared voting or dispositive
power with respect to the shares of our common stock being offered by
Omicron, as those terms are used for purposes of Regulation 13D-G under
the Exchange Act. Omicron and Winchester are not "affiliates" of one
another, as that term is used for purposes of the Exchange Act, or of
any other person named in this prospectus as a selling security holder.
No person or "group" (as that term is used in Section 13(d) of the
Exchange Act or Regulation 13D-G) controls Omicron and Winchester.
(16) Includes 86,250 shares underlying a warrant. Power to vote or dispose
of the shares is shared by Mark Fain and Chad Comiteau, as managing
directors of Stratford Advisors LLC, which entity is the general
partner of Stratford Partners, L.P.
(17) Includes 75,000 shares underlying a warrant. Power to vote or dispose
of the shares is held by David W. Berry as principal of Kaizen Capital,
LLC, which entity is the general partner of Select Contrarian Value
Partners, L.P.
(18) Includes 56,250 shares underlying a warrant. Power to vote or dispose
of the shares is held by D. Blair Baker, as president of Precept
Management, LLC, which entity is the general partner of Precept Capital
Management, L.P., which entity is the agent of Precept Capital Master
Fund, G.P.
(19) Represents 650,310 shares underlying a warrant. Power to vote or
dispose of the shares is held by Byron Roth, as Chief Executive
Officer, and Gordon J. Roth, as Chief Financial Officer, of Roth
Capital.
(20) Includes 84,066 shares underlying a warrant. Sole power to vote or
dispose of the shares is held by Mr. McDermott as trustee. Mr.
McDermott was an officer and shareholder of Larus Corporation until its
acquisition by Emrise in July 2004.
(21) Includes 65,934 shares underlying a warrant. Mr. Yost was an officer
and shareholder of Larus Corporation until its acquisition by Emrise in
July 2004.
(22) Represents 125,000 shares underlying warrants. Power to vote or dispose
of the shares is held by Matthew Hayden as president of Hayden
Communications, Inc. Hayden Communications, Inc. acts as an investor
relations consultant to Emrise.
(23) Power to vote or dispose of the shares is held by William F. Coffin as
Chief Executive Officer of Coffin Communications Group, an affiliate of
Coffin Partners LLC. Coffin Communications Group is a former investor
relations consultant to Emrise.
(24) Includes 150,000 shares underlying a warrant and 103,181 shares held by
Mr. Farndell's spouse. Mr. Farndell is a former human resources
consultant to Emrise and is the brother-in-law of Carmine T. Oliva, who
is an executive officer and director of Emrise.
(25) Includes 50,000 shares underlying a warrant. Mr. Jacobus is a former
financial advisor to Emrise.
(26) Mr. Moisset is a former employee of and former consultant to Emrise.
(27) Includes 200,500 shares underlying warrants. Jason Oliva is a former
financial advisor to Emrise and is the son of Carmine T. Oliva, who is
an executive officer and director of Emrise.
(28) Mr. Mirabella is a former consultant to Emrise.
(29) Mr. Albanese is a former financial advisor to Emrise.
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