Our business consists primarily of two integrated business segments: (i) marketing services and (ii) communications services. Our corporate administrative functions are tracked separately and the associated costs are not pushed down to the operating segments. The following table summarizes selected financial information for each operating segment:
There were no intersegment sales. All of the Company’s business activities are conducted within the United States geographic boundaries.
Enversa receives administrative support from Internet University, Inc., which was one of the three former members of Leadstream. Included in such administrative support are human resources and payroll services which totaled less than $10,000 for the three month period ended July 31, 2011.
As part of the Enversa acquisition, the Company borrowed $1,500,000 from Internet University, Inc., Marc Blumberg and Marc Pickren (collectively, the “Enversa Sellers”). Mr. Blumberg is a member of the Company’s Board of Director as well as the president of Internet University, Inc. and Mr. Pickren is the President of the Company. On March 30, 2011, the Company entered into amendments to its promissory notes with the Enversa Sellers (collectively the “Tier 4 Junior Notes”). The amendments to the Tier 4 Junior Notes revised the repayment schedules of the Tier 4 Junior Notes such that principal payments would be payable annually beginning on March 31, 2012 until such time as the Tier 4 Junior Notes mature on March 31, 2016. Interest payments are payable monthly at a revised rate of 15% per annum. The Company recorded interest of $52,294 and $43,552 on this facility during the three month periods ended July 31, 2011 and 2010, respectively. The balance of the facility totaled $1,364,199 at July 31, 2011.
CornerWorld Corporation
Notes to the Unaudited Condensed Consolidated Financial Statements – (Continued)
As part of the February 23, 2009 Woodland Acquisition, the Company borrowed $1,900,000 from IU Investments LLC. On March 30, 2011, the Company entered into Amendment No. 3 (“IU Amendment No. 3”) to its Promissory Note to IU Investments, LLC (the “Tier 3 Junior Note”). IU Amendment No. 3 revised the repayment schedule of the Tier 3 Junior Note such that the Company will make principal payments totaling $27,417/month until February 28, 2012, after which time the Company will pay $67,200 annually beginning March 31, 2012 until such time as the Tier 3 Junior Note is paid in full on March 31, 2016. Interest payments are payable monthly at a rate of 10% per annum. A member of the Company’s Board of Directors as well as one of the selling partners of Enversa is an employee of the parent of IU Investments, LLC. The Company recorded interest of $14,892 and $26,819 on this facility during the three month periods ended July 31, 2011 and 2010, respectively. The balance of this note totaled $527,915 at July 31, 2011.
On March 30, 2011, the Company entered into a subordinated $1.5 million promissory note (the “Tier 2 Junior Note”) with IU Holdings, LP (“IUH”). Principal under the Tier 2 Junior Note is payable in quarterly installments of $187,500 commencing on May 31, 2011 until such point as the Tier 2 Junior Note matures on February 28, 2013. Interest on the outstanding principal amount under the Tier 2 Junior Note is payable monthly in arrears at a rate of 12% per annum. As additional consideration to induce the Tier 2 Junior Lender to enter into this Promissory Note, the Company issued the Tier 2 Junior Lender, 48,414,132 shares of CornerWorld Corporation Common stock. IUH is a partnership whose limited partners include friends and family of the Company’s Chief Executive Officer. The Company paid approximately $45,370 in interest on this facility, during the three month period ended July 31, 2011, to IUH as a result of this note. The balance of this note totaled $1,500,000 at July 31, 2011.
On March 30, 2011, the Company entered into a subordinated $400,000 promissory note (the “Tier 5 Junior Note”) with Internet University. Principal under the Tier 5 Junior Note is payable in monthly installments of $25,000 commencing on April 30, 2011 until such point as the Tier 5 Junior Note matures on April 30, 2012. Interest on the outstanding principal amount under the Tier 5 Junior Note is payable monthly in arrears at a rate of 15% per annum. As additional consideration to induce the Tier 5 Junior Lender to enter into this Promissory Note, the Company issued the Tier 5 Junior Lender, 12,910,435 shares of CornerWorld Corporation Common stock. The Company recorded interest of $13,233 on this facility during the three month period ended July 31, 2011. The balance of this note totaled $300,000 at July 31, 2011.
On March 30, 2011, the Company entered into a subordinated $389,942 promissory note (the “Tier 7 Junior Note”) with Scott N. Beck, the Company’s Chief Executive Officer. Principal under the Tier 7 Junior Note is payable in monthly installments of $12,746 commencing on April 30, 2011 until such point as the Tier 7 Junior Note matures on September 30, 2013. Interest on the outstanding principal amount under the Tier 7 Junior Note is payable monthly in arrears at a rate of 10% per annum. As additional consideration to induce Mr. Beck to enter into this Promissory Note, the Company issued Mr. Beck 12,585,802 shares of CornerWorld Corporation Common stock. The Tier 7 Junior Note consists primarily of prior accounts payable. The Company recorded interest of $9,186 on this facility during the three month period ended July 31, 2011. The balance of this note totaled $338,958 at July 31, 2011.
On March 30, 2011, the Company entered into an unsecured $37,976 promissory note (the “Tier 8 Junior Note”) with Kelly Larabee Morlan; Ms. Morlan is the Secretary of the Company. Principal under the Tier 8 Junior Note is payable in monthly installments of $3,165 commencing on April 30, 2011 until such point as the Tier 8 Junior Note matures on March 30, 2012. Interest on the outstanding principal amount under the Tier 8 Junior Note is payable monthly in arrears at a rate of 10% per annum. As additional consideration to induce Ms. Morlan to enter into this Promissory Note, the Company issued Ms. Morlan 1,194,215 shares of CornerWorld Corporation Common stock. The Tier 8 Junior Note is unsecured. The Company recorded interest of $798 on this facility during the three month period ended July 31, 2011. The balance of this note totaled $25,316 at July 31, 2011.
In addition, the Company leases office space with an entity that is controlled by the family of the Company’s CEO. During the three month period ended July 31, 2011, the Company paid $50,761 in rent as a result of this lease.
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CornerWorld Corporation
Notes to the Unaudited Condensed Consolidated Financial Statements – (Continued)
9. Subsequent Events
On September 6, 2011, the Company entered into Amendment No. 2 (“IUH Amendment No. 2”) to its Promissory Note with IU Holdings LP (the “IUH Note”) dated March 30, 2011. IUH Amendment No. 2 revised the repayment schedule of the IUH Note such that principal payments were deferred by six months. They will resume on February 29, 2012 and continue through November 30, 2013, after which point the IUH Note will be paid in its entirety. In addition, the interest rate was lowered to 10% per annum but interest payment dates and other terms remained unchanged. IUH is a partnership whose limited partners include friends and family of the Company’s Chief Executive Officer.
On September 6, 2011, the Company entered into Amendment No. 4 (“IUI Amendment No. 4”) to its Promissory Note with IU Investments, LLC (the “IUI Note”) dated February 23, 2009. IUI Amendment No. 4 revised the repayment schedule of the IUI Note such that principal payments were deferred by six months. They will resume with a $191,919 balloon payment on February 29, 2012 and continue through March 31, 2016, after which the IUI Note will be paid in its entirety. In addition, the interest rate was lowered to 10% per annum but interest payment dates and other terms remained unchanged. Internet University, Inc. is a member of IU Investments, LLC.
On September 6, 2011, the Company entered into Amendment No. 3 to each of its Promissory Notes dated August 27, 2008 with Internet University, Inc, LLC (“IU Note Amendment 3”) Marc Blumberg (“Blumberg Note Amendment 3”) and Marc Pickren (“Pickren Note Amendment 3”) (IU Note Amendment 3, Blumberg Note Amendment 3 and Pickren Note Amendment 3 collectively the “Amendments). The Amendments lowered the interest rates on the IU Note, the Blumberg Note and the Pickren Note to 10% per annum but interest payment dates and other terms remained unchanged. Internet University, Inc. owns 14.0% of the Company’s currently outstanding common stock. Mr. Blumberg sits on the Company’s Board of Directors and owns 2.7% of the Company’s currently outstanding common stock. Mr. Pickren is the President of the Company and owns 3.9% of the Company’s currently outstanding common stock..
On September 6, 2011, the Company entered into Amendment No. 1 (“IU Amendment No. 1”) to its Promissory Note with Internet University, Inc. (the “IU Note”) dated March 30, 2011. IU Amendment No. 1 revised the repayment schedule of the IUI Note such that principal payments were deferred by six months. They will resume on February 29, 2012 and continue through October 31, 2012, after which the IU Note will be paid in its entirety. In addition, the interest rate was lowered to 10% per annum but interest payment dates and other terms remained unchanged. Internet University, Inc. owns 14.0% of the Company’s currently outstanding common stock.
On September 6, 2011, the Company entered into Amendment No. 1 (“Beck Amendment No. 1”) to its Promissory Note with Scott Beck (the “Beck Note”) dated March 30, 2011. Beck Amendment No. revised the repayment schedule of the Beck Note such that principal payments were deferred by six months. They will resume on February 29, 2012 and continue through March 31, 2014, after which point the Beck Note will be paid in its entirety. Interest payments and other terms remained unchanged. Mr. Beck is the Company’s Chairman and Chief Executive Officer and owns 19.6% of the Company’s currently outstanding common stock.
On September 6, 2011, the Company entered into Amendment No. 1 (“Larabee Amendment No. 1”) to its Promissory Note with Kelly Larabee Morlan (the “Larabee Note”) dated March 30, 2011. Larabee Amendment No. revised the repayment schedule of the Larabee Note such that principal payments were deferred by six months. They will resume on February 29, 2012 and continue through September 30, 2012, after which point the Larabee Note will be paid in its entirety. Interest payments and other terms remained unchanged. Ms. Morlan is the Company’s secretary.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview
CornerWorld Corporation (hereinafter referred to as “CornerWorld,” the “Company,” “we,” “our,” or “us”) is a marketing and technology services company building services for the increased accessibility of content across mobile, television and Internet platforms. Our key asset is a patented 611 Roaming Service™ from RANGER Wireless Solutions®, which generates revenue by processing over 14 million calls per year from wireless customers and seamlessly connecting them to their service provider.
Three Months ended July 31, 2011 Highlights:
| | |
| • | We paid down approximately $329,984 in principal on our outstanding debt. |
| | |
| • | After removal of non-cash amortization of loan discounts (interest expense) totaling $255,217, depreciation & amortization and stock-based compensation expense totaling $577,251 and $37,446, respectively, the Company’s pro-forma profit for the three months ended July 31, 2011 would have totaled approximately $348,254. See the table that follows for more details. The Company expects to generate positive operating cash flows for the fiscal year ending April 30, 2012. |
We define “Adjusted Net Income1” as net loss after removal of non-cash charges including amortization of loan discounts (interest expense), depreciation, amortization of intangibles and stock-based compensation. Management believes pro-forma net income provides useful additional information concerning the Company’s potential profitability. However, Adjusted Net Income is not a measure of financial performance under Generally Accepted Accounting Principles (“GAAP”). Accordingly, Adjusted Net Income should not be considered an alternative to net income as an indicator of operating performance. The table that follows provides a reconciliation between GAAP net income and Adjusted Net Income.
___________________________
1 This measure presented may not be comparable to similarly titled measures reported by other companies.
Reconciliation between GAAP Net Income and Adjusted Net Income:
| | | | | | | |
| | For the three
month period ended
July 31, 2011 | | Per share data | |
| | | | | |
Net loss | | $ | (521,660 | ) | $ | 0.00 | |
| | | | | | | |
| | | | | | | |
Non-cash charges: | | | | | | | |
Amortization of loan discounts (interest) | | | 255,217 | | | 0.00 | |
Stock-based compensation | | | 37,446 | | | 0.00 | |
Depreciation and amortization | | | 577,251 | | | 0.00 | |
| | | | | | | |
Total non-cash charges | | | 869,914 | | | 0.00 | |
| | | | | | | |
| | | | | | | |
Pro-forma net income | | $ | 348,254 | | $ | 0.00 | |
| | | | | | | |
Weighted average common shares outstanding: | | | | | | | |
Basic and diluted | | | 146,972,901 | | | 146,972,901 | |
| | | | | | | |
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Service Offerings
Our business consists primarily of two integrated business segments: (i) marketing services and (ii) communications services. Our corporate administrative functions are tracked separately and the associated costs are not pushed down to the operating segments. See also Note 7 of the Notes to the Unaudited Condensed Consolidated Financial Statements – Business Segments for additional segment information.
Critical Accounting Policies and Estimates
Use of Estimates and Critical Accounting Policies
In preparing our condensed consolidated unaudited financial statements, we make estimates, assumptions and judgments that can have a significant effect on our revenues, income (loss) from operations, and net income (loss), as well as on the value of certain assets on our consolidated balance sheet. We believe that there are several accounting policies that are critical to an understanding of our historical and future performance as these policies affect the reported amounts of revenues, expenses and significant estimates and judgments applied by management. While there are a number of accounting policies, methods and estimates affecting our financial statements, areas that are particularly significant include allowance for doubtful accounts, impairment of long-lived assets (including goodwill), revenue recognition and stock-based compensation. In addition, please refer to Note 2 of the Notes to the Unaudited Condenses Consolidated Financial Statements for further discussion of our accounting policies.
Allowance for Doubtful Accounts
We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The allowance for doubtful accounts is based on an estimate of buckets of customer accounts receivable, stratified by age, that, historically, have proven to be uncollectible; in addition, in certain cases, the allowance estimate is supplemented by specific identification of larger customer accounts and our best estimate of the likelihood of potential loss, taking into account such factors as the financial condition and payment history of major customers. We evaluate the collectibility of our receivables at least quarterly. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The differences could be material and could significantly impact cash flows from operating activities.
Impairment of Long-Lived Assets
The Company’s management assesses the recoverability of its long-lived assets by determining whether the depreciation and amortization of long-lived assets over their remaining lives can be recovered through projected undiscounted future cash flows. The amount of long-lived asset impairment is measured based on fair value and is charged to operations in the period in which long-lived asset impairment is determined by management.
Goodwill
Goodwill represents the excess of acquisition cost over the net assets acquired in a business combination. Management reviews, on an annual basis, the carrying value of goodwill in order to determine whether impairment has occurred. Impairment is based on several factors including the Company’s projection of future undiscounted operating cash flows. If an impairment of the carrying value were to be indicated by this review, the Company would adjust the carrying value of goodwill to its estimated fair value.
Income Taxes
The Company accounts for income tax in accordance with ASC No. 740 which requires the use of the asset and liability method of accounting of income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
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Revenue Recognition
It is the Company’s policy that revenue from product sales or services will be recognized in accordance with Staff Accounting Bulletin No. 104, “Revenue Recognition” (“SAB No. 104”), which superseded Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” (“SAB No. 101”). SAB No. 104 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product was not delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.
Stock-Based Compensation
The Company accounts for awards made under its two stock-based compensation plans pursuant to the fair value provisions of ASC No. 718. ASC No. 718 requires the recognition of stock-based compensation expense, using a fair-value based method, for costs related to all share-based payments including stock options. ASC No. 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The Company accounts for stock-based compensation in accordance with ASC No. 718 and estimates its fair value based on using the Black-Scholes option valuation model.
The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. This model also requires the input of highly subjective assumptions including:
| | |
| (a) | The expected volatility of our common stock price, which we determine based on historical volatility of our common stock over the prior eighteen month period; |
| | |
| (b) | Expected dividends (which do not apply, as we do not anticipate issuing dividends); |
| | |
| (c) | Expected life of the award, which is estimated based on the historical award exercise behavior of our employees; and |
| | |
| (d) | The risk-free interest rate which we determine based on the yield of a U.S. Treasury bond whose maturity period equals the options expected term. |
These factors could change in the future, affecting the determination of stock-based compensation expense in future periods. In the future, we may elect to use different assumptions under the Black-Scholes valuation model or a different valuation model, which could result in a significantly different impact on our net income or loss.
The Company’s determination of fair value of share-based payment awards is made as of their respective dates of grant using the Black Scholes option valuation model. Because the Company’s options have certain characteristics that are significantly different from traded options, the Black Scholes option valuation model may not provide an accurate measure of the fair value of the Company’s options. Although the fair value of the Company’s options is determined in accordance with ASC No. 718, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction. The calculated compensation cost is recognized on a straight-line basis over the vesting period of the options.
See also Note 6 – Stock Based Compensation of the Notes to the Unaudited Condensed Consolidated Financial Statements for additional information regarding our accounting policies for stock-based compensation.
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Recent Accounting Pronouncements
There were various accounting standards and interpretations issued during the three months ended July 31, 2011, none of which are expected to have a material impact on the Company’s consolidated financial position, operations, or cash flows.
Results of Operations
Comparison of the three months ended July 31, 2011 to the three months ended July 31, 2010
Marketing services
Our marketing services segment consists of our Enversa division.
Revenues and Gross profit:
Our marketing services segment had revenues totaling $1,469,573 for the three month period ended July 31, 2011 as compared to $1,176,030 for the three month period ended July 31, 2010. This increase is due to additional revenues generated as a result of new offerings from our growing Gulf subsidiary which did not exist at this point in the prior year.
Similarly, gross profit at our direct marketing segment increased for the three months ended July 31, 2011 to $831,323 from $494,316 for the three month period ended July 31, 2010. Gross profit as a percentage of revenue increased from 42.0% to 56.6% due to an increase in search engine optimization and site leases at Gulf which typically includes higher margin services.
Selling, General and Administrative
Selling, general and administrative (“SG&A”) expenses totaled $715,002 for the three months ended July 31, 2011 as compared to $553,977 for the corresponding period in the prior year. The increase of $161,025 is primarily due to increases in headcount, rent and utilities associated with the build-up of our Gulf division.
Net Income
Net income totaled $28,638 for the three months ended July 31, 2011 as compared to net income of $146,752 for the corresponding period in the prior year. The net income improvement is primarily due to the margin improvements associated with the investment in Gulf and cost reductions enacted in our marketing services segment.
Communications services
Our communications services segment consists of all the businesses acquired in the Woodland Acquisition.
Revenues and Gross profit:
Our communications services segment had revenues totaling $1,472,100 for the three month period ended July 31, 2011 as compared to $1,701,573 for the three month period ended July 31, 2010. This decrease is primarily due to the fact that our two largest customers merged in the second half of calendar year 2009 and, accordingly, the Company experienced a reduction in roaming revenues.
For the same reasons, gross profit decreased for the three months ended July 31, 2011 to $1,258,853 from $1,354,903 for the three month period ended July 31, 2010. Gross profit as a percentage of revenue improved to 85.5% during the three months ended July 31, 2011 versus 79.6% during the corresponding period in the prior year. The margin improvement was primarily due to the implementation of new agreements with lower rates from the carriers who provide our network infrastructure.
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Selling, General and Administrative
SG&A expenses totaled $126,949 for the three months ended July 31, 2011 as compared to $529,739 for the corresponding period in the prior year. The decrease of $402,790 is primarily due to the removal of all non-recurring legal expenses which totaled $173,417 incurred during the three month period ended July 31, 2010 and staffing reductions and other cost saving measures enacted at our communications services segment.
Net Income
Net income totaled $298,485 for the three months ended July 31, 2011 as compared to net income of $556,164 for the corresponding period in the prior year. The decrease of $257,679 is primarily due to the fact that we received a favorable lawsuit settlement during the quarter ended July 31, 2010.
Corporate
Selling, General and Administrative
SG&A costs totaled $494,060 for the quarter ended July 31, 2011 versus $337,688 for the corresponding period in the prior year. The increase of $156,372 is primarily due to the fact the fact that we hired additional accounting and IT personnel at the corporate level, primarily resulting from the build-out of Gulf. Expenses for this segment also include all costs associated with corporate overhead, including accounting, legal, corporate governance and other related costs involved in being a publicly traded company.
Liquidity and Capital Resources
As of July 31, 2011, we had a working capital deficit of approximately $2.7 million and cash of $444,986. Our working capital deficit is primarily related to certain large accounts payable associated with our 2009 Woodland Acquisition as well as the short-term nature of selected tranches of the debt we issued in March 2011 when we recapitalized the Company. Our working capital deficit has decreased substantially from our July 31, 2010 year end deficit which totaled approximately $4.2 million. This improvement is due to the fact that, as a result of the March 2011 recapitalization, we extended the maturities of substantially all of our debt. We believe the cash flows from our existing operations will be adequate to manage our debt commitments and we have good relationships with the vendors associated with the large accounts payable who we continue to pay with excess cash flow. Management expects that its current cash and operational cash flow will be sufficient to meet our liquidity needs for the next year.
Our investing activity for the three month period ended July 31, 2011, consisted primarily of $13,101 of capital expenditures, primarily associated with the relocation of several of our facilities, including our home office. Management believes the reduced rents in the new locations will more than offset the capital expenditures.
We have no other bank financing or other external sources of liquidity. We source all of our liquidity through our operations. We expect that trend to continue.
We will most likely need to obtain additional capital in order to further expand our operations. We are currently investigating other financial alternatives, including additional equity and/or debt financing. In order to obtain capital, we may need to sell additional shares of our common stock or borrow funds from private lenders. However, there can be no assurance that any additional financing will become available to us, and if available, that such financing will be on terms acceptable to us.
Off-balance sheet arrangements
We have not entered into any off-balance sheet arrangements.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (the Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in its reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
The Company’s management, with the participation of its principal executive officer and its chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in the Exchange Act Rules 13a-15(e) or 15d-15(e)) as of July 31, 2011. Based on that evaluation, the Company’s chief executive officer and chief financial officer concluded that, as of that date, the Company’s disclosure controls and procedures, were not effective at a reasonable assurance level.
Management’s Remediation Plan
Management determined that a material weakness existed due to an inability to appropriately segregate duties in the accounting department due to a lack of the number of personnel in the accounting department. The Company has hired a chief financial officer and has replaced selected accounting personnel with more seasoned professionals, including additional certified public accountants, to help perform certain accounting and financial functions. In addition, management has included additional reviews and controls to mitigate the size of the accounting department and the overlap of responsibilities. Management believes the foregoing efforts will effectively remediate this material weakness but the Company can give no assurance that the additional controls will be effective. As the Company continues to evaluate and work to improve its internal control over financial reporting, management may determine to take additional measures to address control deficiencies or determine to modify the remediation plan described above. We cannot assure you that, as circumstances change, any additional material weakness will not be identified.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
Not applicable.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. [Removed and Reserved]
Item 5. Other information
None.
Item 6. Exhibits
The following exhibits are filed as part of this report:
| | | | |
Exhibit
Numbers | | Description | | Method of
Filing |
| | | | |
3.1 | | Articles of Incorporation of CornerWorld Corporation, formerly known as Olympic Weddings International, Inc., dated November 9, 2004 (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form SB-2, filed September 27, 2005) | | |
3.2 | | Certificate of Correction of CornerWorld Corporation, formerly known as Olympic Weddings International, Inc., dated November 24, 2004 (incorporated by reference to Exhibit 3.2 to the Company’s Form 10-Q, filed December 15, 2010) | | |
3.3 | | Certificate of Change of CornerWorld Corporation, formerly known as Olympic Weddings International, Inc., dated October 18, 2006 (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K, filed October 25, 2006) | | |
3.4 | | Certificate of Amendment to Articles of Incorporation For Nevada Profit Corporations of CornerWorld Corporation, formerly known as Olympic Weddings International, Inc., dated May 4, 2007 (incorporated by reference to Exhibit 3.2 to the Company’s Form 10-Q, filed December 15, 2010) | | |
3.5 | | Bylaws of CornerWorld Corporation, formerly known as Olympic Weddings International, Inc., dated November 9, 2004 (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form SB-2, filed September 27, 2005) | | |
10.1 | | Employment Agreement by and between Cornerworld Corporation and Marc Pickren dated September 13, 2011 | | (1)w |
31.1 | | Rule 13a-14(a) Certification by our chief executive officer | | (1) |
31.2 | | Rule 13a-14(a) Certification by our chief financial officer | | (1) |
32.1 | | Section 1350 Certification by our chief executive officer | | (2) |
32.2 | | Section 1350 Certification by our chief financial officer | | (2) |
101 | | Interactive Data Files of Financial Statements and Notes. | | (3) |
__________
| |
(1) | Filed herewith. |
(2) | Furnished (and not filed) herewith pursuant to Item 601(b)(32)(ii) of Regulation S-K under the Exchange Act. |
(3) | Furnished (and not filed) herewith pursuant to Regulation S-T under the Exchange Act. |
w | Management plan, compensatory arrangement or employment agreement. |
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| |
| CORNERWORLD CORPORATION |
| |
| Registrant |
| |
September 14, 2011 | /s/ V. Chase McCrea III |
| |
| V. Chase McCrea III |
| Chief Financial Officer |
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