UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM 10-QSB/A
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Period Ended
March 31, 2005 Commission File No. 0-18399
SIRICOMM, INC.
-----------------------------------------------------
(Exact name of Registrant as specified in its Charter)
Delaware 62-1386759
------------------------------ ---------------------------------
(State or jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
2900 Davis Boulevard, Suite 130, Joplin, Missouri 64804
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(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (417) 626-9961
Former name, former address and former fiscal year, if changed since last
report: N/A
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for a shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
The number of shares outstanding of the Registrant's Common Stock, $.001 par
value, as of May 11, 2005 was 19,773,117
================================================================================
SiriCOMM, Inc. hereby amends and restates in its entirety its Quarterly Report
on Form 10-QSB for the period ending March 31, 2005, which was filed on
May 12, 2005, by filing this amended quarterly report as provided by the
applicable rules under the Securities and Exchange Act of 1934. The Company has
revised portions of its financial statements and legal disclosure in response to
comments made by the staff of the Securities and Exchange Commission during
their review of the Company's 10-KSB. This Form 10-QSB/A contains a restatement
of the Company's quarterly financial statements and related disclosure to
reflect its responses to those comments.
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Operations for the six
months ended March 31, 2005 and March 31, 2004 4
Condensed Consolidated Statements of Changes in Stockholders'
Equity for the six months ended March 31, 2005 and 2004 5
Condensed Consolidated Statements of Cash Flows for the six months
ended March 31, 2005 and March 31, 2004 6
Notes to the Condensed Consolidated Financial Statements 7
2
SIRICOMM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, September 30,
2005 2004
------------ ------------
(Unaudited) Restated
Restated
Assets
Current Assets
Cash $ 776,782 $ 1,019,616
Prepaid expenses and other 10,253 16,563
------------ ------------
Total current assets 787,035 1,036,179
------------ ------------
Property and Equipment, At Cost
Equipment 2,269,248 111,818
Network equipment in progress of installation 105,400 646,000
------------ ------------
2,374,648 757,818
Less accumulated depreciation 181,197 62,032
------------ ------------
2,193,451 695,786
------------ ------------
Software, net of amortization 59,556 19,934
------------ ------------
Other prepaid consulting services 2,476,791 -
------------ ------------
Total assets $ 5,516,833 $ 1,751,899
============ ============
Liabilities and Stockholders' Equity
Current Liabilities
Note payable to bank $ 444,743 $ 122,000
Current maturities of long-term debt - 25,000
Accounts payable 213,882 50,816
Accrued salaries 269,125 269,125
Other accrued expenses 198,764 45,928
Deferred revenue 16,209
------------ ------------
Total current liabilities 1,142,723 512,869
------------ ------------
Total liabilities 1,142,723 512,869
------------ ------------
Preferred stock - Redeemable and convertible, Series A par value $.001; 500,000
shares authorized; 213,417 shares issued and outstanding; dividend rate of
0.025 per share per quarter commencing March 2004; liquidation preference of
$1 per outstanding share cash payment 261,436 250,765
Stockholders' Equity
Common stock - par value $.001; 50,000,000 shares authorized; 18,701,450 -
March 31, 2005, 16,255,650-September 30, 2004, issued and outstanding 18,698 16,252
Additional paid-in capital 13,024,172 8,379,044
Deferred compensation (932,016) (722,016)
Retained deficit (7,998,180) (6,685,015)
------------ ------------
Total stockholders' equity 4,112,674 988,265
------------ ------------
Total liabilities and stockholders' equity $ 5,516,833 $ 1,751,899
============ ============
See Notes to Condensed Consolidated Financial Statements
3
SIRICOMM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Restated
March 31, 2005 March 31, 2004
-------------------------------------- ---------------------------------------
3 months ended 6 months ended 3 months ended 6 months ended
-------------- -------------- -------------- --------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues $ 27,175 $ 33,448 $ - $ -
Operating Expenses:
General and administrative 186,128 336,320 361,576 709,019
Salaries 333,813 569,150 90,554 219,734
Satellite access fees 196,759 290,629 - -
Stock-based compensation - - - 50,000
Research and development 12,180 24,780 14,770 29,470
Depreciation and amortization 114,778 122,066 5,107 9,930
------------ ------------ ------------ ------------
Total operating expenses 843,657 1,342,944 472,007 1,018,153
------------ ------------ ------------ ------------
Operating loss (816,482) (1,309,496) (472,007) (1,018,153)
------------ ------------ ------------ ------------
Other Income (Expense)
Interest income 3,737 5,597 1,572 1,572
Other income - - 18 18
Interest expense (4,805) (9,265) (3,903) (18,680)
Loan costs - - (69,133) (185,263)
------------ ------------ ------------ ------------
(1,069) (3,669) (71,446) (202,353)
------------ ------------ ------------ ------------
Net loss $ (817,551) $ (1,313,165) $ (543,453) $ (1,220,506)
============ ============ ============ ============
Add: Dividents declared on preferred
stock (5,336) (10,671) - -
------------ ------------ ------------ ------------
Loss available to common shareholders $ (8,22,887) $ (1,323,836) $ (543,453) $ (1,220,506)
============ ============ ============ ============
Basic and diluted loss per common share $ (0.05) $ (0.08) $ (0.04) $ (0.09)
============ ============ ============ ============
Weighted average shares,
basic and diluted 17,606,094 16,930,993 13,555,555 13,250,744
============ ============ ============ ============
See Notes to Condensed Consolidated Financial Statements
4
SIRICOMM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited)
Restated
Common Stock Additional Deferred
------------------- Paid-in Compen- Accumulated Treasury
Shares Amount Capital sation Deficit Stock Total
---------- ------- ----------- --------- ------------ --------- -----------
For the six months ended
March 31, 2004
Balance, September 30, 2003 12,966,593 $12,967 $ 3,847,485 $ 0 $ (3,906,608) $(458,838)$ (504,994)
Fair value of conversion options
added to preferred stock - - (21,342) - - - (21,342)
Conversion of debt to equity 426,592 426 429,555 - - - 429,981
Stock issued for loan costs 9,593 10 13,670 - - - 13,680
Stock issued for services 34,000 34 38,590 - - - 38,624
Stock warrants exercised 176,000 176 87,824 - - - 88,000
Stock options issued for services - - 57,500 - - - 57,500
Proceeds from stock issuance 1,925,000 1,925 1,828,075 - - - 1,830,000
Issuance of options to employees - - 50,000 - - - 50,000
Treasury stock retired (195,250) (195) (458,643) - - 458,838 -
Net loss for the period - - - - (1,220,506) - (1,220,506)
---------- ------- ----------- --------- ------------ --------- -----------
Balance, March 31, 2004 15,342,528 $15,343 $ 5,872,714 $ - $ (5,127,114) $ - $ 760,943
========== ======= =========== ========= ============ ========= ===========
For the six months ended
March 31, 2005
Balance, September 30, 2004 16,255,650 $16,252 $ 8,379,044 $(722,016) $ (6,685,015) $ - $ 988,265
Stock warrants issued for services - - 600,000 (210,000) - - 390,000
Stock warrants exercised 90,000 90 174,910 - - - 175,000
Stock options exercised 26,800 27 26,773 - - - 26,800
Stock options issued for services - - 91,800 - - - 91,800
Stock issued for services 2,010,000 2,010 3,212,055 - - - 3,214,065
Proceeds from stock issuance
completed January 3, 2005; net of
consideration of $87,420 319,000 319 550,261 - - - 550,580
Accrued dividends - - (10,671) - - - (10,671)
Net Loss for the period - - - - (1,313,165) - (1,313,165)
---------- ------- ----------- --------- ------------ --------- -----------
Balance, March 31, 2005 18,701,450 $18,698 $13,024,172 $(932,016) $ (7,998,180) $ - $ 4,112,674
========== ======= =========== ========= ============ ========= ===========
See Notes to Condensed Consolidated Financial Statements.
5
SIRICOMM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended
March 31,
2005 2004
------------ ------------
(Unaudited) Restated
(Unaudited)
Operating Activities
Net loss $ (1,313,165) $ (1,220,506)
Items not requiring cash
Depreciation 122,065 9,930
Loan costs - 159,264
Stock-based compensation for services - 181,066
Stock-based compensation to employees - 50,000
Amortization of long-term prepaid contracts 130,599 1,373
Changes in assets and liabilities:
Current assets 10,900 359,512
Accounts payable 177,131 897
Accrued expenses 152,837 29,562
Deferred revenues 16,209 -
------------ ------------
Net cash flows used in operating activities (703,424) (428,902)
------------ ------------
Investing Activities
Purchase of furniture and equipment (589,533) (2,837)
------------ ------------
Net cash flows used in investing activities (589,533) (2,837)
------------ ------------
Financing Activities
Borrowings under line of credit, net 322,743 -
Payment of notes payable (25,000) (176,640)
Proceeds from exercise of stock options and warrants 201,800
Proceeds from sale of common stock 550,580 1,918,000
------------ ------------
Net cash flows provided by financing activities 1,050,123 1,741,360
------------ ------------
Increase (Decrease) in Cash (242,834) 1,309,621
Cash, beginning of period 1,019,616 56,300
------------ ------------
Cash, end of period $ 776,782 $ 1,365,921
============ ============
Supplemental Cash Flows Information
Interest paid $ 11,022 $ 9,385
Stock and warrants issued in exchange for services and equipment $ 3,814,065 $ 38,624
Stock options issued in exchange for prepaid consulting services $ 91,800 -
Accrued dividends for Series A preferred stock $ 10,671 -
Shares of common stock issued for loan costs $ - $ 13,680
Conversion of debt to equity $ - $ 642,026
Fair Value of conversion options added to preferred stock $ - $ 21,342
See Notes to Condensed Consolidated Financial Statements
6
SIRICOMM, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED MARCH 31, 2005 AND 2004
1. Nature of operations and summary of significant accounting policies:
Nature of Operations:
SiriCOMM, Inc., a Delaware corporation (the "Company"), through its wholly
owned subsidiary of the same name, which was incorporated in the State of
Missouri on April 24, 2000, has developed broadband wireless application
service technologies intended for use in the marine and transportation
industries. The Company opened its network in December, 2004 for commercial
operation and has commenced selling its InTouch(TM) Internet Service to
individual subscribers.
The Company was considered to be in the development stage during its recent
reporting period ending September 30, 2004. Since September 30, 2004, the
Company has commenced revenue producing operations and continues to market
its service technologies, including satellite communications, wireless
networking, and productivity enhancing software.
Use of Estimates:
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
reflect all adjustments that are in the opinion of the Company's
management, necessary to fairly present the financial position, results of
operations and cash flows of the Company. Those adjustments consist only of
normal recurring adjustments.
The condensed balance sheet of the Company as of September 30, 2004 has
been derived from the audited consolidated balance sheet of the Company as
of that date. Certain information and note disclosures normally included in
the Company's annual financial statements prepared in accordance with
accounting principles generally accepted in the United States of America
have been condensed or omitted. These condensed consolidated financial
statements should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's Form 10-KSB annual
report for fiscal year ended September 31, 2004 filed with the Securities
and Exchange Commission.
7
SIRICOMM, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED MARCH 31, 2005 AND 2004
1. Nature of operations and summary of significant accounting policies
(continued):
The results of operations for the period are not necessarily indicative of
the results to be expected for the full year.
Stock-based Compensation:
The Company accounts for compensation costs associated with stock options
issued to employees under the provisions of Accounting Principles Board
Opinion No. 25 whereby compensation is recognized to the extent the market
price of the underlying stock at the grant date exceeds the exercise price
of the option granted. Stock-based compensation to non-employees is
accounted for using the fair-value based method prescribed by Financial
Accounting Standard No. 123 - Accounting for Stock-Based Compensation. The
Company uses the trinomial options-pricing model to determine the fair
value of stock-based compensation and capital contributions. Previously,
the Company had used the Black-Scholes model, but it has determined that
the trinomial model is better suited to evaluate the variability of
uncertain holding horizons.
Had compensation cost for the Company's stock option plan been determined
on the fair value at the grant dates for stock-based employee compensation
arrangements consistent with the method required by SFAS 123, the Company's
net loss and net loss per common share would have been the pro forma
amounts indicated below.
Six Months Ended
March 31,
2005 2004
------------ ------------
Net loss, as reported $ (1,313,165) $ (1,220,506)
Add back intrinsic values of stock
issued to employees -- 50,000
Less: stock-based employee compensation
under the fair value based method (57,929) (179,450)
------------ ------------
Pro forma net loss under fair value method $ (1,371,094) $ (1,349,956)
Net loss per common share-basic and diluted:
As reported $ (.08) $ (.09)
Pro forma under fair value method $ (.08) $ (.10)
8
SIRICOMM, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED MARCH 31, 2005 AND 2004
1. Nature of operations and summary of significant accounting policies
(continued):
Research and development costs:
The Company incurs costs, associated with computer software to be marketed
in the future. Costs incurred in connection with establishing technological
feasibility have been expensed as research and development costs.
Net loss per share:
Net loss per share represents the net loss available to common stockholders
divided by the weighted average number of common shares outstanding during
the year. Diluted earnings per share reflect the potential dilution that
could occur if convertible preferred stock was converted into common stock.
Diluted net loss per share is considered to be the same as basic net loss
per share since the effect of the issuance of common stock associated with
the convertible stock is anti-dilutive.
Reclassification
Certain reclassifications have been made to the March 31, 2004 financial
statements to conform to the March 31, 2005 financial statement
presentation. These reclassifications had no effect on net losses.
2. Line of Credit:
During 2004, the Company entered into a line of credit with Southwest
Missouri Bank for the purchase of network infrastructure equipment up to a
maximum of $1,000,000. This note is 80% guaranteed by the US Department of
Agriculture and is secured by the network equipment. This note is further
personally guaranteed by the Company's majority shareholder. The note is a
demand note, but if no demand is made then monthly payments of accrued
interest at an initial rate of 5.5% on the guaranteed portion and 7.0% on
the unguaranteed portion plus monthly principal payments of $2,358. The
note is amortized over 59 months beginning September 25, 2004 with a final
payment on August 25, 2009.
3. Stockholders' Equity:
Pursuant to a contract between Pilot Travel Centers and the Company which
stated, in consideration for Pilot's permitting the Company to install its
broadband wireless network in Pilot's 255 travel centers, the Company
issued, upon completion of the installation and testing in October 2004,
255,000 Common Stock Purchase Warrants exercisable for five years, expiring
on May 27, 2009 at an exercise price of $4.50 per share. The transaction
resulted in the Company recording $91,800 as a prepaid consulting service
and additional paid-in capital. The prepaid asset is being amortized over
the contract period which expires May 27, 2009.
9
SIRICOMM, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED MARCH 31, 2005 AND 2004
On October 18, 2004 and December 15, 2004, the Company's Chief Financial
Officer and a Director, exercised 700 and 800 stock options, respectively,
at $1.00 per share. The options were granted pursuant to the Company's 2002
Equity Incentive Plan.
On November 1, 2004, an employee of the Company exercised 7,500 stock
options at $1.00 per share. The options were granted pursuant to the
Company's 2002 Equity Incentive Plan.
SiriCOMM, Inc. consummated the private placement of its units (the "Units")
pursuant to a Confidential Investment Proposal dated October 11, 2004 and
amended on December 20, 2004. Funds were disbursed from escrow to the
Company as of January 3, 2005 and shares and warrant certificates were
issued at that time. Each Unit consisted of 50,000 shares (the "Shares") of
the Company's common stock and a Common Stock Warrant to purchase 37,500
shares of Common Stock. In the private placement, the Company sold an
aggregate of 6.38 Units (319,000 Shares and Warrants to purchase 239,250
shares of Common Stock) for an aggregate purchase price of $638,000, or
$100,000 per Unit.
The Warrants entitle the holders to purchase shares of the Common Stock
(the "Warrant Shares") for a period of five years from the date of issuance
at an exercise price of $2.40 per share. The Warrants contain certain
anti-dilution rights and are redeemable by the Company, on terms specified
in the Warrants.
In connection with the private placement, Sands Brothers International
Limited, the placement agent in the private placement, received subsequent
to this quarter's filing, a cash commission fee of nine (9%) of the gross
proceeds to the Company of the securities sold at the closing, a payment of
$30,000 representing the fees and expenses of its counsel in the private
placement and Warrants (the "Agent Warrants") to purchase ten percent (10%)
of the Shares sold in the Private Placement (the "Agent Shares"). The Agent
Warrants are exercisable for a period of five years at an exercise price of
$2.40 per share and contain the same anti-dilution rights as the Warrants.
Pursuant to the Offering Documents, the Company also agreed to file with
the Securities and Exchange Commission a Registration Statement covering
the Shares, the Warrant Shares and the Agent Shares. If such Registration
Statement is not filed within the required time frame, or does not become
effective within 120 days of the closing date, the Company has agreed to
pay to the investors 1% of the gross proceeds of the Private Placement for
each thirty (30) day period in which the Company fails to comply with such
requirements. The Company filed the Registration Statement on a timely
basis and expects it to become effective within the allotted time frame.
On January 5, 2005, the Company issued an aggregate of 85,000 shares of its
Common Stock upon the exercise of a like number of warrants, exercisable at
$2.00 per share. The warrants were originally issued in January 2004
pursuant to a private placement of the Company's units consisting of common
stock and warrants.
10
SIRICOMM, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED MARCH 31, 2005 AND 2004
As an inducement to the investors exercising their warrants, the Company
issued an aggregate of 63,750 new warrants to the investors. The new
warrants entitle the holders to purchase shares of the Company's common
stock reserved for issuance thereunder for a period of five years from the
date of issuance at an exercise price of $2.40 per share. The warrants
contain anti-dilution rights and are redeemable by the Company, in whole or
in part, on terms specified in the warrants.
As a further inducement to the investors exercising their warrants, the
Company also agreed to file with the Securities and Exchange Commission a
Registration Statement covering the shares purchased by each investor as
part of the units, the shares issued upon exercise of the warrants and the
shares underlying the new warrants.
On February 7, 2005 the Company entered into a Network Installation
Agreement (the "Agreement") with Sat-Net Communications, Inc. ("Sat-Net").
The term of the Agreement is for sixty (60) months commencing on February
7, 2005. The Agreement will be automatically extended on a year-to-year
basis upon expiration of the initial term unless terminated in writing by
either party.
During the term of the Agreement, Sat-Net will provide and install VSAT
terminals at up to 400 truck-stop locations at a predetermined turnkey
price.
Pursuant to the Agreement, the Company is issuing to Sat-Net 2,000,000
shares of its Common Stock and 1,000,000 Common Stock Purchase Warrants
(the "Warrants") exercisable for a period of three years at a price of
$2.00 per share. The Warrants are subject to vesting at the rate of 2,500
warrants per truck-stop location installed
In addition, the 2,000,000 shares of Common Stock have "piggy-back"
registration rights.
On March 16, 2005, the Company issued an aggregate of 10,000 shares to the
partners of the Company's Securities Counsel, Sommer & Schneider LLP. The
shares were issued in lieu of $8065 in unpaid invoices due the firm at the
time and a $6,000 credit to cover the Company's April 2005 retainer with
the firm. The shares were issued under the Company's 2002 Equity Incentive
Plan, and were registered on Form S-8 on April 14, 2003
On March 13, 2005, the Company's Chief Executive Officer granted an
aggregate of 102,500 options to various Company employees exercisable at
prices per share from $1.75 to $2.00. The shares were issued under the
Company's 2002 Equity Incentive Plan and were registered on Form S-8 on
April 14, 2003
4. Commitments and Contingencies:
Litigation:
On December 17, 2004, certain officers and directors of the Company were
named defendants in a lawsuit entitled Greg Sanders v. Henry Hoffman et al.
Messrs. Hoffman, Dillman, Mendez and Iler are officers and directors of the
Company, Mr. Thompson is a director of the Company and Mr. Noland is a
former officer and director of the Company. The action alleges fraud,
misrepresentation and breach of fiduciary duty relating to a settlement
agreement entered into between the Company and Mr. Sanders. The complaint
seeks damages in excess of $9,679,903. Although the Company was not named
as a defendant, it will pay all expenses relating to the defense of this
matter. In management's opinion this case is without merit and the
defendants intend on defending this matter vigorously.
11
SIRICOMM, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED MARCH 31, 2005 AND 2004
5. Subsequent Events:
On April 11, 2005, SiriCOMM, Inc. consummated the private sale of its
securities to Sunflower Capital, LLC. The securities sold consisted of
units comprised of shares of the Registrant's common stock (the "Shares")
and warrants to purchase shares of the Company's common stock (the
"Warrants"). At the closing, the Company sold an aggregate of 1,066,667
units at an aggregate purchase price of $1,600,000 or $1.50 per unit. At
the closing the Company delivered an aggregate of 1,066,667 Shares and
delivered Warrants to purchase an additional 1,066,667 shares of the
Company's common stock.
The Warrants entitle the holder to purchase shares of the Company's common
stock reserved for issuance thereunder (the "Warrant Shares") for a period
of five years from the date of issuance at an exercise price of $2.50 per
share. The Warrants contain certain anti-dilution rights and are redeemable
by the Company, in whole or in part, on terms specified in the Warrants.
In a separate transaction also consummated on April 11, 2005 the Company
sold 413,605 warrants to Sunflower Capital, LLC at a purchase price of
$53,333 or approximately $.13 per warrant. These warrants entitle the
holder to purchase shares of the Company's common stock reserved for
issuance thereunder for a period of five (5) years from the date of
issuance at an exercise price of $3.00 per share. These warrants contain
certain anti-dilution rights and are redeemable by the Company, in whole or
in part, on terms specified in these warrants.
William P. Moore, a shareholder beneficially owning approximately 9.10% of
the issued and outstanding shares of the Company's common stock is the
managing member of Sunflower Capital, LLC.
On April 13, 2005, the Company's Chief Financial Officer and a Director of
the Company received 15,000 options exercisable at $1.90 per share. The
shares were issued under the Company's 2002 Equity Incentive Plan and were
registered on Form S-8 on April 14, 2003 (SEC File No. 333-104508).
On April 13, 2005, a Director of the Company received 10,000 options
exercisable at $1.90 per share. The shares were issued under the Company's
2002 Equity Incentive Plan and were registered on Form S-8 on April 14,
2003.
The Company issued 10,000 shares (5,000-April 4 and 5,000-April 8) of its
Common Stock to Staunton McLane pursuant to the exercise of a stock option
for a like number of shares in April 2005. The exercise price of these
options is $1.00. The shares underlying the option were registered on Form
S-8 on April 14, 2003.
6. Restatement of Prior Financial Statements
During the fourth quarter of fiscal 2005 the Company changed its method of
accounting for it Series A redeemable, convertible preferred stock. The
March 31, 2005 and September 30, 2004 financial statements, as previously
presented, included preferred stock at par value as a component of
stockholders' equity. The Company has retroactively restated its March 31,
2005, December 31, 2004 and September 30, 2004 financial statements to
report the redemption value of Series A preferred stock outside of
liabilities and stockholders' equity. This change had no effect on loss
before income taxes or net loss. As a result of this change, current
liabilities and stockholders' equity as of March 31, 2005 have decreased
from the previously reported totals by $26,677 and $234,759, respectively.
Current liabilities and stockholders' equity as of September 30, 2004 have
decreased from the previously reported totals by $16,006 and $234,759,
respectively.
12
Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations
Background
The Company was incorporated as a Delaware corporation under the name
"Fountain Pharmaceuticals, Inc." (the "Company"), in April 1989. In
approximately November 2002, the shareholders of SiriCOMM, Inc., a
privately-held Missouri corporation, incorporated in 2000 ("SiriCOMM Missouri"),
exchanged all of the issued and outstanding common stock of SiriCOMM Missouri
for a controlling interest in the Company (the "Reverse Transaction"). As part
of the Reverse Transaction, all of the then officers and directors of the
Company resigned and were replaced by persons designated by SiriCOMM Missouri
and the name of the Company was changed from Fountain Pharmaceuticals, Inc. to
SiriCOMM, Inc. As a result of the Reverse Transaction, SiriCOMM Missouri became
a wholly-owned subsidiary of the Company and the prior shareholders of SiriCOMM
Missouri became the controlling shareholders, officers and directors of the
Company. The Company and SiriCOMM Missouri are hereinafter collectively referred
to as the "Company."
The Company's corporate address is 2900 Davis Boulevard, Suite 130,
Joplin, Missouri 64809, its telephone number is 417-626-9971 and its fax number
is 417-782-0475.
SiriCOMM Missouri was founded in 2000 to become a broadband wireless
application service provider to supply productivity and cost reduction software
applications to the commercial vehicle industry and other users whose
effectiveness "over-the-road" requires affordable driver connectivity and
vehicle-access software productivity tools.
The Company announced on October 8, 2004 that it has completed and
intends to open the first phase installation of a nationwide broadband wireless
network (the "Network") that will enable delivery of a wide range of service
provider applications to those businesses and governmental entities directly and
indirectly dependent on the nation's highway transportation system. In April
2005, the Company began installing test sites pursuant to its agreement with
Pre-Pass which will ultimately enable the Company to install an additional 260
sites. The Company began generating revenues in early December 2004, but
revenues to date are still not sufficient to cover the Company's operating
expenses.
Critical Accounting Policies and Estimates:
Our financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America. The
preparation of these financial statements requires us to make significant
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues, expenses and related disclosure of contingent assets and liabilities.
We evaluate our estimates, including those related to contingencies, on an
ongoing basis. We base our estimates on historical experience and on various
other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under different
assumptions or conditions.
13
We believe the following critical accounting policy, among others;
involve the more significant judgments and estimates used in the preparation of
our consolidated financial statements:
The Company accounts for compensation costs associated with stock
options and warrants issued to non-employees using the fair-value based method
prescribed by Financial Accounting Standard No. 123 - Accounting for Stock-Based
Compensation. The Company uses the tri-nomial options-pricing model to determine
the fair value of these instruments as well as to determine the values of
options granted to certain lenders by the principal stockholder. The following
estimates are used for grants in 2005: Expected future volatility over the
expected lives of these instruments is estimated to mirror historical experience
of 75%; expected lives of 2 years is estimated based on management's judgment of
the time period by which these instruments will be exercised.
Information Relating To Forward-Looking Statements
When used in this Report on Form 10-QSB, the words "may," "will,"
"expect," "anticipate," "continue," "estimate," "intend," "plans", and similar
expressions are intended to identify forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 regarding events, conditions and financial
trends which may affect the Company's future plans of operations, business
strategy, operating results and financial position. Such statements are not
guarantees of future performance and are subject to risks and uncertainties and
actual results may differ materially from those included within the
forward-looking statements as a result of various factors. Such factors include,
among others: (i) the Company's ability to obtain additional sources of capital
to fund continuing operations; in the event it is unable to timely generate
revenues (ii) the Company's ability to retain existing or obtain additional
licensees who will act as distributors of its products; (iii) the Company's
ability to obtain additional patent protection for its technology; and (iv)
other economic, competitive and governmental factors affecting the Company's
operations, market, products and services. Additional factors are described in
the Company's other public reports and filings with the Securities and Exchange
Commission. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date made. The Company
undertakes no obligation to publicly release the result of any revision of these
forward-looking statements to reflect events or circumstances after the date
they are made or to reflect the occurrence of unanticipated events.
Plan of Operations
SiriCOMM is engaged in the development of broadband wireless software
and network infrastructure solutions for the commercial transportation industry
and government market. The Company has a vertically integrated technology
platform incorporating both software applications and broadband network
infrastructure and access. The vertical-specific, enterprise-grade software
solutions are designed to help businesses of any size and the government to
significantly increase profitability, reduce operating costs, improve
productivity and operational efficiencies, enhance safety, and strengthen
security. The Company's unique, commercial-grade private network solution is
built for enterprises and integrates multiple technologies to enable an ultra
high-speed, open-architecture wireless data network for its software
applications and Internet access. The Company believes that its
vertical-specific software, network technology, deep industry relationships, and
low cost of operations represent significant value to the commercial
transportation industry and the government market.
14
SiriCOMM's patent-pending network infrastructure solution provides
considerable benefits when compared to other solutions competing in the space.
The architecture transmits data at speeds of up to 48,000 kilobits per seconds
("kbps"), or 20 to 100 times faster than other wireless solutions such as GSM
(9.6 kbps), CDMA2000-1XRTT (144 kbps), or Qualcomm's USAT (2 kbps). SiriCOMM
will install network access nodes using Wireless Fidelity (Wi-Fi) access points
at strategic locations nationwide. Each wireless local area network is
interconnected using satellite communications and the Company's proprietary
server solution. The point-to-multipoint broadcast feature of the Company's
network provides considerable cost-to-bandwidth efficiencies. SiriCOMM's
software applications leverage this optimized data network to deliver
significant cost reduction and productivity improvement opportunities to
subscribing companies. For a flat, low monthly fee subscribers will have access
to a suite of productivity software, the Internet, e-mail, proprietary company
intranet information, and similar business tools. Users will connect to the
network using any 802.11-compatible device. For the most mobile subscribers,
SiriCOMM recommends a Wi-Fi-enabled Palm OS handheld computer. SiriCOMM's
solutions are expected to become commercially available during the third
quarter of the fiscal year 2005.
The Company plans to market its products and services principally
through assorted value added reseller agreements and a select small sales team.
As the trucking industry is highly fragmented and comprised of numerous small to
medium-sized fleet owners, it is impractical to individually reach these fleets,
thus, by using resellers who are similarly selling into this market, the Company
can better manage its cost of sales. Similarly, the Company's own salesforce can
better expend its efforts on the much larger fleets.
Results of Operations
Revenues
SiriCOMM has generated revenues of $27,175 and $33,448 respectively,
for the three and six month period ending March 31, 2005 while not generating
any revenues during fiscal 2004. Revenues were solely derived from the Company's
offering of its InTouch product, or Internet service providing. No advertising
or other marketing of this service has been conducted at present and no
assurances can be offered that the Company will generate any meaningful revenues
from the offering of this service in the future.
Operating Expenses
The Company has increased its number of employees in accounting and
software development and entered into consulting agreements which have
contributed to the increase in net operating losses. These expenses were
necessary to build the Company's infrastructure and improve the Company's
Corporate Governance.
During the three and six months ended March 31, 2005, net losses
totaled $817,551 and $1,313,165 as compared to net losses of $543,453 and
$1,220,506, for the three and six months ended March 31, 2004, respectively. For
the three and six months ending March 31, 2005, SiriCOMM's general and
administrative expenses totaled $186,128 and $336,320, or 22.% and 25% of total
operating expenses, while for the three and six months ended March 31, 2004
general and administrative expenses totaled $361,576 and $709,019, or 76.6% and
69.6% of total operating expenses.
15
For the three and six months ending March 31, 2005, SiriCOMM incurred
salaries of $333,813 and $569,150, representing 39.6% and 42.4% of operating
expenses, as compared to the three and six months ended March 31, 2004,
respectively; $90,554 and $219,734, or 19.2% and 21.6% of total operating
expenses.
Satellite access fees have been incurred as a result of the Company's
launching of its proprietary network, expenses were realized for the three and
six month period ended of $196,759 and $290,629, or 23.3% and 21.6%
respectively.
For the three and six months ending March 31, 2005, interest expense
was $4,805 and $9,265 as compared to $3,903 and $18,680 during the three month
and six months ended March 31, 2004.
Liquidity and Capital Resources
In October, 2004, the Company borrowed $200,000 on its line of credit
facility with Southwest Missouri Bank. The proceeds were paid to Sat-Net in
conjunction with the installation and distribution of hotspots.
As of December 31, 2004, SiriCOMM, Inc. consummated the private
placement of its units (the "Units") pursuant to a Confidential Investment
Proposal dated October 11, 2004 and amended on December 20, 2004. Funds were
disbursed from escrow to the Company as of January 3, 2005 and shares and
warrant certificates were issued at that time. Each Unit consisted of 50,000
shares (the "Shares") of the Company's common stock and a Common Stock Warrant
to purchase 37,500 shares of Common Stock. In the Private Placement, the Company
sold an aggregate of 6.38 Units (319,000 Shares and Warrants to purchase 239,250
shares of Common Stock) for an aggregate purchase price of $638,000, or $100,000
per Unit.
The Warrants entitle the holders to purchase shares of the Common Stock
(the "Warrant Shares") for a period of five years from the date of issuance at
an exercise price of $2.40 per share. The Warrants contain certain anti-dilution
rights and are redeemable by the Company, on terms specified in the Warrants.
In connection with the Private Placement, Sands Brothers International
Limited, the placement agent in the Private Placement, received a cash
commission fee of nine percent (9%) of the gross proceeds to the Company of the
securities sold at the closing, a payment of $30,000 representing the fees and
expenses of its counsel in the Private Placement and Warrants (the "Agent
Warrants") to purchase ten percent (10%) of the Shares sold in the Private
Placement (the "Agent Shares"). The Agent Warrants are exercisable for a period
of five years at an exercise price of $2.40 per share and contain the same
anti-dilution rights as the Warrants.
16
Pursuant to the Offering Documents, the Company also agreed to file
with the Securities and Exchange Commission a Registration Statement covering
the Shares, the Warrant Shares and the Agent Shares. If such Registration
Statement is not filed within the required time frame, or does not become
effective within 120 days of the closing date, the Company has agreed to pay to
the investors 1% of the gross proceeds of the Private Placement for each thirty
(30) day period in which the Company fails to comply with such requirements
On January 5, 2005, the Company issued an aggregate of 85,000 shares of
its Common Stock upon the exercise of a like number of warrants, exercisable at
$2.00 per share. The warrants were originally issued in January 2004 pursuant to
a private placement of the Company's units consisting of common stock and
warrants.
As an inducement to the investors exercising their warrants, the
Company issued an aggregate of 63,750 new warrants to the investors. The new
warrants entitle the holders to purchase shares of the Company's common stock
reserved for issuance thereunder for a period of five years from the date of
issuance at an exercise price of $2.40 per share. The warrants contain
anti-dilution rights and are redeemable by the Company, in whole or in part, on
terms specified in the warrants.
As a further inducement to the investors exercising their warrants, the
Company also agreed to file with the Securities and Exchange Commission a
Registration Statement covering the shares purchased by each investor as part of
the units, the shares issued upon exercise of the warrants and the shares
underlying the new warrants.
The cash proceeds of the above sales of securities of the Company were
used for general corporate purposes in developing the Company's planned
services.
The Company will continue its installation plans toward denser coverage
of its nation wide network. Additional financing will be required to fund such
installations, but there can be no assurances that the Company will be able to
obtain such funds under acceptable terms.
On January 24, 2005, the Company repaid the note payable of $25,000
plus accrued interest to an individual investor.
On January 30, 2005, the Company granted 2,000,000 shares of restricted
stock plus 1,000,000 warrants exercisable at $2.00 for a term of three years to
Sat-Net under the terms of a Memorandum of Understanding.
On March 11, 2005, the Company borrowed $150,000 on its line of credit
facility with Southwest Missouri Bank. The proceeds were paid to Via-Sat in
conjunction with the installation and distribution of hotspots.
On April 11, 2005, SiriCOMM, Inc consummated the private sale of its
securities to Sunflower Capital, LLC. The securities sold consisted of units
comprised of shares of the Company's common stock (the "Shares") and warrants to
purchase shares of the Registrant's common stock (the "Warrants"). At the
closing, the Company sold an aggregate of 1,066,667 units at an aggregate
purchase price of $1,600,000 or $1.50 per unit. At the closing the Company
17
delivered an aggregate of 1,066,667 Shares and delivered Warrants to purchase an
additional 1,066,667 shares of the Company's common stock.
The Warrants entitle the holder to purchase shares of the Company's
common stock reserved for issuance thereunder (the "Warrant Shares") for a
period of five years from the date of issuance at an exercise price of $2.50 per
share. The Warrants contain certain anti-dilution rights and are redeemable by
the Company, in whole or in part, on terms specified in the Warrants.
In a separate transaction also consummated on April 11, 2005 the
Company sold 413,605 warrants to Sunflower Capital, LLC at a purchase price of
$53,333 or approximately $.13 per warrant. These warrants entitle the holder to
purchase shares of the Company's common stock reserved for issuance thereunder
for a period of five (5) years from the date of issuance at an exercise price of
$3.00 per share. These warrants contain certain anti-dilution rights and are
redeemable by the Company, in whole or in part, on terms specified in these
warrants.
William P. Moore, a shareholder beneficially owning approximately 9.10%
of the issued and outstanding shares of the Company's common stock is the
managing member of Sunflower Capital, LLC.
The securities discussed above were offered and sold in reliance upon
exemptions from the registration requirements of Section 5 of the Securities Act
of 1933, as amended (the "Act"), pursuant to Section 4(2) of the Act and Rule506
promulgated thereunder. Such securities were sold exclusively to accredited
investors as defined by Rule 501(a) under the Act.
Contractual Obligations and Commercial Commitments
Contractual obligations as of March 31, 2005 are as follows:
Payments Due by Period
Contractual Less than After
Obligations Total 1 year 1-3 years 4-5 years 5 years
- ----------------------------- --------------- ---------------- ---------------- -------------- --------------
Line of credit and note payable $ 444,743 $444,743 $ - $ - $ -
Operating leases - - - - -
Total contractual cash obligations $444,743 $444,743 $ - $ - $ -
- ----------------------------- --------------- ---------------- ---------------- -------------- --------------
Recent Accounting Pronouncements
In December 2003, the FASB issued Interpretation No. 46 (revised),
"Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51,"
("FIN 46R"). FIN 46R addresses how a business enterprise should evaluate whether
it has a controlling financial interest in an entity through means other than
voting rights and, accordingly, should consolidate the variable interest entity
("VIE"). Fin 46R replaces FIN46 that was issued in January 2003. All public
companies were required to fully implement FIN 46R no later than the end of the
18
first reporting period ending after March 15, 2004. The adoption of FIN 46R had
no impact on SiriCOMM's financial condition or results of operations.
On December 16, 2004, the Financial Accounting Standards Board (FASB)
issued FASB Statement No. 123 (revised 2004), Share-Based Payment, which is a
revision of FASB Statement No. 123, Accounting for Stock-Based Compensation.
Statement 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to
Employees, and amends FASB Statement No. 95, Statement of Cash Flows. The
approach to accounting for share-based payments in Statement 123(R) is similar
to the approach described in Statement 123. However, Statement 123(R) requires
all share-based payments to employees, including grants of employee stock
options, to be recognized in the financial statements based on their fair values
and no longer allows pro forma disclosure as an alternative to financial
statement recognition. The Company will be required to adopt Statement 123(R) at
the beginning of its year ending September 30, 2007. The Company has not
determined what financial statement impact Statement 123(R) will have on the
Company.
COMMITMENTS
We do not have any commitments that are required to be disclosed in
tabular form as of March 31, 2005.
OFF BALANCE SHEET ARRANGEMENTS
We do not have any off balance sheet arrangements.
Item 3: Controls and Procedures
The Company maintains disclosure controls and procedures that are
designed to ensure that information required to be disclosed in the Company's
Exchange Act reports is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission's rules and
forms and that such information is accumulated and communicated to the Company's
management, including its Chief Executive Officer and Chief Financial Officer,
as appropriate, to allow for timely decisions regarding required disclosure. In
designing and evaluating the disclosure controls and procedures, management
recognizes that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives, and management is required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures.
19
As required by SEC Rule 13a-15(b), the Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and the Company's
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures as of the end of the quarter
covered by this report. Based on the foregoing, the Company's Chief Executive
Officer and Chief Financial Officer concluded that the Company's disclosure
controls and procedures were effective at the reasonable assurance level;
however, to ensure that these controls and procedures remain effective, the
Company hired a full time comptroller, who reports directly to the Company's
Chief Financial Officer.
Management has also acknowledged the need to seek advice of its
auditors and counsel prior to the issuance of the Company's securities so as to
determine the effects of such issuance on the Company's financial statements
prior to issuance.
There has been no other change in the Company's internal controls over
financial reporting during the Company's most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the Company's
internal controls over financial reporting.
20
PART II - OTHER INFORMATION
Item 1: Legal Proceedings
On December 17, 2004, Henry Hoffman, Kory Dillman, David Mendez, Tom
Noland, Richard Iler and Terry Thompson were named defendants in a lawsuit
entitled Greg Sanders v. Henry Hoffman et al. Messrs. Hoffman, Dillman, Mendez
and Iler are officers and directors of the Company, Mr. Thompson is a director
of the Company and Mr. Noland is a former officer and director of the Company.
The action was brought in the Circuit Court of Jackson County, Missouri at
Kansas City (04CV236387). The action alleges fraud, misrepresentation and breach
of fiduciary duty relating to a settlement agreement entered into between the
Company and Mr. Sanders. The Company is not a party to this lawsuit. The
complaint seeks damages in excess of $9,679,903. The Company will pay all
expenses relating to the defense of this matter. In management's opinion this
case is without merit and the defendants intend on defending this matter
vigorously.
Item 2: Changes in Securities and Use of Proceeds
(a) None
(b) None
(c) On January 5, 2005 the Company issued an aggregate of 85,000 shares
of its Common Stock upon the exercise of a like number of warrants, exercisable
at $2.00 per share. The warrants were originally issued in January 2004 pursuant
to a private placement of the Company's units consisting of common stock and
warrants.
As an inducement to the seven investors exercising their warrants, the
Company issued an aggregate of 63,750 new warrants to the investors. The new
warrants entitle the holders to purchase shares of the Company's common stock
reserved for issuance thereunder for a period of five years from the date of
issuance at an exercise price of $2.40 per share. The warrants contain
anti-dilution rights and are redeemable by the Company, in whole or in part, on
terms specified in the warrants.
As a further inducement to the investors exercising their warrants, the
Company also agreed to file with the Securities and Exchange Commission a
Registration Statement covering the shares purchased by each investor as part of
the units, the shares issued upon exercise of the warrants and the shares
underlying the new warrants.
On January 25, 2005 the Company pursuant to a contract between Pilot
Travel Centers and the Company in consideration for Pilot's permitting the
Company to install its broadband wireless network in Pilot's 255 travel centers,
has issued 255,000 warrants exercisable for five years at an exercise price of
$4.50 per share.
On February 7, 2005, the Company entered into a Network Installation
Agreement with Sat-Net Communications, Inc. ("Sat-Net"). Pursuant to the
Agreement, the Company issued to Sat-Net 2,000,000 shares of its Common Stock
and 1,000,000 Common Stock Purchase Warrants (the "Warrants"). Each Warrant is
exercisable for a period of three (3) years at a price of $2.00 per share. The
Warrants are subject to vesting at the rate of 2,500 warrants per truck-stop
21
location installed; provided, however, that the vesting with respect to the
first 250 locations will be deemed to occur when the wireless infrastructure is
"network operational" as defined in the Agreement. In addition, the 2,000,000
shares of Common Stock have "piggy-back" registration rights.
Sat-Net represents that it is accredited and the issuance of the
Company's securities was negotiated between itself and the Company without a
broker-dealer or payment of a commission in reliance of Section 4(2) of the Act.
On March 13, 2005, the Company granted 102,500 stock options to various
employees, a Director of the Company. These options were granted under the
Company's 2002 Equity Incentive Plan. The exercise price of these options ranged
from $1.75 to $2.00 per share. The shares underlying the options were registered
on Form S-8 on April 14, 2003 (SEC File No. 333-104508).
On March 16, 2005, the Company issued an aggregate of 10,000 shares to
Joel C. Schneider, Esq. (5,000) and Herbert H. Sommer (5,000), partners of the
Company's Securities Counsel, Sommer & Schneider LLP. The shares were issued in
lieu of $14,065.25 of legal fees due the firm. The shares were issued under the
Company's 2002 Equity Incentive Plan and were registered on Form S-8 on April
14, 2003 (SEC File No. 333-104508).
On April 11, 2005, SiriCOMM, Inc. (the "Registrant") consummated the
private sale of its securities to Sunflower Capital, LLC. The securities sold
consisted of units comprised of shares of the Registrant's common stock (the
"Shares") and warrants to purchase shares of the Registrant's common stock (the
"Warrants"). At the closing, the Registrant sold an aggregate of 1,066,667 unit
sat an aggregate purchase price of $1,600,000 or $1.50 per unit. At the closing
the Registrant delivered an aggregate of 1,066,667 Shares and delivered Warrants
to purchase an additional 1,066,667 shares of the Registrant's common stock.
The Warrants entitle the holder to purchase shares of the Registrant's
common stock reserved for issuance thereunder (the "Warrant Shares") for a
period of five years from the date of issuance at an exercise price of $2.50 per
share. The Warrants contain certain anti-dilution rights and are redeemable by
the Registrant, in whole or in part, on terms specified in the Warrants.
In a separate transaction also consummated on April 11, 2005 the
Registrant sold 413,605 warrants to Sunflower Capital, LLC at a purchase price
of $53,333 or approximately $.13 per warrant. These warrants entitled the holder
to purchase shares of the Registrant's common stock reserved for issuance
thereunder for a period of five (5) years from the date of issuance at an
exercise price of $3.00 per share. These warrants contain certain anti-dilution
rights and are redeemable by the Registrant, in whole or in part, on terms
specified in these warrants.
William P. Moore, a shareholder beneficially owning approximately
9.10%of the issued and outstanding shares of the Registrant's common stock is
the managing member of Sunflower Capital, LLC.
The securities discussed above were offered and sold in reliance upon
exemptions from the registration requirements of Section 5 of the Securities Act
of 1933, as amended (the "Act"), pursuant to Section 4(2) of the Act and Rule506
promulgated thereunder. Such securities were sold exclusively to accredited
investors as defined by Rule 501(a) under the Act.
22
The Company issued an aggregate of 10,000 shares to Staunton McLane
pursuant to the exercise of a stock option for a like number of shares. The
exercise price of these options is $1.00. The Shares underlying the option were
registered on Form S-8 on April 14, 2003 (SEC File No. 333-104508). As of the
date of this report, Staunton McLane has a balance of 38,900 options, each
exercisable at $1.00 per share.
On April 13th, 2005, the Company granted 15,000 stock options to J.
Richard Iler, our Chief Financial Officer. These options were granted under the
Company's 2002 Equity Incentive Plan. The exercise price of these options is
$1.90 per share. The shares underlying the options were registered on Form S-8
on April 14, 2003 (SEC File No. 333-104508).
On April 13th, 2005, the Company granted 10,000 stock options to Terry
Thompson, a Director of the Company. These options were granted under the
Company's 2002 Equity Incentive Plan. The exercise price of these options is
$1.90 per share. The shares underlying the options were registered on Form S-8
on April 14, 2003 (SEC File No. 333-104508).
The cash proceeds of the above sales of securities of the Company were
used for general corporate purposes in developing the Company's planned
services.
(d) Not Applicable
Item 3.: Defaults upon Senior Securities
None
Item 4.: Submission of Matters to a Vote of Security Holders
None
Item 5.: Other Information
None
23
Item 6.: Exhibits
The following exhibits are filed as part of this report:
31.1 Certification of Chief Executive Officer of Periodic
Report Pursuant to Rule 13a-14(a) and Rule 15d-14(a).
31.2 Certification of Chief Financial Officer of Periodic
Report Pursuant to Rule 13a-14(a) and Rule 15d-14(a).
32.1 Certification of Chief Executive Officer pursuant to
18 U.S.C. Section 1350
32.2 Certification of Chief Financial Officer pursuant to
18 U.S.C. Section 1350
24
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: September 30, 2005 SIRICOMM, INC.
By: /s/ Henry P. Hoffman
------------------------------------------
Henry P. Hoffman, President and
Chief Executive Officer
By: /s/ J. Richard Iler
------------------------------------------
J. Richard Iler, Executive Vice President
and Chief Financial Officer
25