UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: SEPTEMBER 30, 2004
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
EXCHANGE ACT
For the transition period from _______________ to ______________
Commission file number 0-49763
CIROND CORPORATION
(Exact name of small business issuer as specified in its charter)
NEVADA 88-0469593
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
4185 STILL CREEK DRIVE #B-101, BURNABY, BRITISH COLUMBIA, CANADA V5C 6G9
(Address of principal executive offices)
(604) 205-5039
(Issuer's telephone number)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such 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
---- ----
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
37,060,000 SHARES OF COMMON STOCK, $0.001 PAR VALUE, AS OF NOVEMBER 5, 2004
Transitional Small Business Disclosure Format (check one): Yes No X
---- ----
Consolidated Interim Financial Statements of
CIROND CORPORATION (FORMERLY EXMAILIT.COM)
(A Development Stage Enterprise)
(Expressed in United States dollars)
Nine-months ended September 30, 2004
2
CIROND CORPORATION (FORMERLY EXMAILIT.COM)
(A Development Stage Enterprise)
Consolidated Balance Sheets
(Expressed in United States dollars)
September 30, 2004 and December 31, 2003
===============================================================================================================
September 30, 2004
(unaudited) December 31, 2003
- ---------------------------------------------------------------------------------------------------------------
ASSETS
Current assets:
Cash $ 59,301 $ 86,066
Amounts receivable, net of allowance of $nil (2003 - $nil) 24,428 19,679
Prepaid expenses and deposits 12,718 12,492
----------------------------------------------------------------------------------------------------------
96,447 118,237
Property, plant and equipment 63,732 54,497
Website development 5,550 9,512
- ---------------------------------------------------------------------------------------------------------------
$ 165,729 $ 182,246
===============================================================================================================
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Accounts payable and accrued liabilities (note 3) $ 143,428 $ 165,522
Consulting fees payable (note 4) 110,516 130,000
Share subscriptions payable (note 5(a)) 25,000 375,000
Deferred revenue 30,874 6,884
Loan payable (note 5(b)) 400,000 75,000
Due to stockholder 161,575 171,576
----------------------------------------------------------------------------------------------------------
871,393 923,982
Stockholders' deficiency:
Capital stock:
25,000,000 preferred shares, issuable in series, with a
par value of $0.001 per share authorized,
nil issued
100,000,000 voting common shares, with $0.001 par value
authorized, 37,060,000 issued
(December 31, 2003 - 34,460,000) 37,060 34,460
Additional paid-in capital 1,690,813 915,913
Deficit accumulated during the development stage (2,433,537) (1,692,109)
----------------------------------------------------------------------------------------------------------
(705,664) (741,736)
Going concern (note 2(a))
Commitments (note 7)
Subsequent event (note 9)
- ---------------------------------------------------------------------------------------------------------------
$ 165,729 $ 182,246
===============================================================================================================
See accompanying notes to consolidated interim financial statements.
3
CIROND CORPORATION (FORMERLY EXMAILIT.COM)
(A Development Stage Enterprise)
Consolidated Statements of Loss
(Expressed in United States dollars)
(Unaudited)
===============================================================================================================
From inception Nine months Nine months
(March 7, 2001) ended ended
to September 30, September 30, September 30,
2004 2004 2003
- ---------------------------------------------------------------------------------------------------------------
Revenue:
Sales (note 8) $ 932,757 $ 905,108 $ 10,545
Expenses:
Advertising and promotion 315,016 202,942 48,988
Amortization 49,805 18,278 8,358
Consulting fees (notes 4 and 6) 803,940 433,927 151,679
Foreign currency loss (gain) 2,387 (3,527) 216
Interest 3,426 1,448 812
Office and administrative 80,197 49,824 15,377
Professional fees 313,278 160,292 32,201
Research and development 1,124,605 468,281 246,625
Salaries and benefits 284,722 185,828 81,967
Travel 267,886 132,591 66,601
----------------------------------------------------------------------------------------------------------
3,245,262 1,649,884 652,824
- ---------------------------------------------------------------------------------------------------------------
Loss before interest income (2,312,505) (744,776) (642,279)
Interest income 3,615 3,348 5
- ---------------------------------------------------------------------------------------------------------------
Loss $ (2,308,890) $ (741,428) $ (642,274)
===============================================================================================================
Weighted average number of common
shares outstanding, basic and diluted 21,086,955 34,983,540 17,000,000
Loss per share, basic and diluted $ (0.11) $ (0.02) $ (0.04)
===============================================================================================================
See accompanying notes to consolidated interim financial statements.
4
CIROND CORPORATION (FORMERLY EXMAILIT.COM)
(A Development Stage Enterprise)
Consolidated Statements of Loss
$ United States
(Unaudited)
===============================================================================================================
Three months Three months
ended ended
September 30, September 30,
2004 2003
- ---------------------------------------------------------------------------------------------------------------
Revenue:
Sales (note 8) $ 83,546 $ 8,893
Expenses:
Advertising and promotion 44,860 15,752
Amortization 7,848 2,947
Consulting fees (note 4) 264,279 37,431
Foreign currency loss (gain) (7,316) 6,189
Interest 551 256
Office and administrative 12,545 1,582
Professional fees 33,762 -
Research and development 120,477 88,395
Salaries and benefits 65,836 28,347
Travel 25,435 7,654
----------------------------------------------------------------------------------------------------------
568,277 188,553
- ---------------------------------------------------------------------------------------------------------------
Loss before interest income (484,731) (179,660)
Interest income 227 -
- ---------------------------------------------------------------------------------------------------------------
Loss $ (484,504) $ (179,660)
===============================================================================================================
Weighted average number of common
shares outstanding, basic and diluted 35,286,374 17,000,000
Loss per share, basic and diluted $ (0.01) $ (0.01)
===============================================================================================================
See accompanying notes to consolidated financial statements.
5
CIROND CORPORATION (FORMERLY EXMAILIT.COM)
(A Development Stage Enterprise)
Consolidated Statement of Stockholders' Deficiency and Comprehensive Income
(Loss)
(Expressed in United States dollars)
From inception (March 7, 2001) to September 30, 2004
(Unaudited)
======================================================================================================================
Deficit
accumulated Total
Additional during the stockholders'
Common Stock paid-in development equity
Shares Amount capital stage (deficiency)
- ----------------------------------------------------------------------------------------------------------------------
Shares issued for cash 16,540,312 $ 1,654 $ (220) $ - $ 1,434
on March 7, 2001
Comprehensive loss:
LOSS - - - (5,466) (5,466)
- ----------------------------------------------------------------------------------------------------------------------
Balance, December 31, 2001 16,540,312 1,654 (220) (5,466) (4,032)
Shares issued for cash from
February 12 to March 25, 2002
at $0.75 per share 459,688 46 298,892 - 298,938
Comprehensive loss:
LOSS - - - (498,034) (498,034)
- ----------------------------------------------------------------------------------------------------------------------
Balance, December 31, 2002 17,000,000 1,700 298,672 (503,500) (203,128)
Shares held by Cirond
stockholders and effect of
recapitalization transaction 16,160,000 1 - (124,647) (124,646)
Promissory notes converted
to shares at $0.50 per share 1,300,000 130 649,870 - 650,000
Adjustment to capital stock to
equal par value of Cirond
capital stock - 32,629 (32,629) - -
Comprehensive loss:
LOSS - - - (1,063,962) (1,063,962)
- ----------------------------------------------------------------------------------------------------------------------
Balance,
December 31, 2003 34,460,000 34,460 915,913 (1,692,109) (741,736)
Common shares issued for
share subscriptions at $0.50
per share (net of costs) 1,400,000 1,400 672,100 - 673,500
Common shares issued for
consulting services held in
escrow (note 6(b)) 1,200,000 1,200 102,800 - 104,000
Comprehensive loss:
Net loss - - - (741,428) (741,428)
- ----------------------------------------------------------------------------------------------------------------------
Balance,
September 30, 2004 (unaudited) 37,060,000 $ 37,060 $ 1,690,813 $ (2,433,537) $ (705,664)
======================================================================================================================
See accompanying notes to consolidated interim financial statements.
6
CIROND CORPORATION (FORMERLY EXMAILIT.COM)
(A Development Stage Enterprise)
Consolidated Statements of Cash Flows
(Expressed in United States dollars)
(Unaudited)
===============================================================================================================
From inception Nine months Nine months
(March 7, 2001) ended, ended
to September 30, September 30, September 30,
2004 2004 2003
- ---------------------------------------------------------------------------------------------------------------
Cash provided by (used in):
Operations:
Loss $ (2,308,890) $ (741,428) $ (642,274)
Item not involving cash:
Amortization 49,805 18,278 8,358
Common shares issued for services 104,000 104,000 -
Changes in non-cash working capital:
Amounts receivable (24,428) (4,749) (4,933)
Prepaid expenses and deposits (12,718) (226) (11,552)
Accounts payable and accrued liabilities 142,233 (22,095) (6,717)
Consulting fees payable 110,516 (19,484) 85,000
Deferred revenue 30,874 23,990 -
----------------------------------------------------------------------------------------------------------
(1,908,608) (641,714) (572,118)
Financing:
Common shares issued for cash (net of costs) 300,372 - -
Promissory note proceeds 650,000 - -
Share subscriptions proceeds 698,500 323,500 -
Loans payable 325,000 325,000 -
Advances from related parties - - 495,000
Advances from (to) stockholder 161,575 (10,001) 55,424
----------------------------------------------------------------------------------------------------------
2,135,447 638,499 550,424
Investing:
Expenditures on website development (19,025) - -
Expenditures on property, plant and equipment (100,061) (23,550) (36,559)
Advances to Cirond prior to recapitalization
transaction (55,157) - -
Cash acquired on recapitalization transaction 6,705 - -
----------------------------------------------------------------------------------------------------------
(167,538) (23,550) (36,559)
- ---------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash 59,301 (26,765) (58,253)
Cash, beginning of period - 86,066 60,135
- ---------------------------------------------------------------------------------------------------------------
Cash, end of period $ 59,301 $ 59,301 $ 1,882
===============================================================================================================
Supplementary information:
Interest paid $ 3,426 $ 1,448 $ 812
Income taxes paid $ - $ - $ -
===============================================================================================================
Non-cash financing and investing activities:
Common shares issued for share subscriptions
proceeds received in previous period $ 673,500 $ 673,500 -
Common shares issued upon conversion of
promissory notes $ 650,000 - -
Net liabilities assumed on recapitalization
Transaction $ 76,194 - -
===============================================================================================================
See accompanying notes to consolidated interim financial statements.
7
CIROND CORPORATION (FORMERLY EXMAILIT.COM)
(A Development Stage Enterprise)
Consolidated Statements of Cash Flows
(Expressed in United States dollars)
(Unaudited)
===============================================================================================================
Three months Three months
ended, ended
September 30, September 30,
2004 2003
- ---------------------------------------------------------------------------------------------------------------
Cash provided by (used in):
Operations:
Loss $ (484,504) $ (179,660)
Item not involving cash:
Amortization 7,848 2,947
Common shares issued for services 104,000 -
Changes in non-cash working capital:
Amounts receivable (6,592) (2,328)
Prepaid expenses and deposits (712) 301
Accounts payable and accrued liabilities (40,234) (22,454)
Consulting fees payable 3,816 106,282
Deferred revenue (33,500) -
----------------------------------------------------------------------------------------------------------
(449,878) (94,912)
Financing:
Share subscriptions proceeds (costs) (1,500) -
Advances from related parties - 70,000
Advances from stockholder (10,001) 6,451
----------------------------------------------------------------------------------------------------------
(11,501) 76,451
Investing:
Expenditures on property, plant and equipment (1,116) (3,799)
- ---------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash (462,495) (22,260)
Cash, beginning of period 521,796 24,142
- ---------------------------------------------------------------------------------------------------------------
Cash, end of period $ 59,301 $ 1,882
===============================================================================================================
Supplementary information:
Interest paid $ 551 $ 256
Income taxes paid $ - $ -
===============================================================================================================
Non-cash financing and investing activities:
Common shares issued for share subscriptions
proceeds received in previous period $ 298,500 $ -
===============================================================================================================
See accompanying notes to consolidated interim financial statements.
8
CIROND CORPORATION (FORMERLY EXMAILIT.COM)
(A Development Stage Enterprise)
Notes to Consolidated Interim Financial Statements
(Expressed in United States dollars)
Nine months ended September 30, 2004
(Unaudited)
================================================================================
1. OPERATIONS:
Cirond Corporation ("Cirond" or the "Company") is incorporated under the
laws of the State of Nevada. The Company develops software solutions and
provides network security products and consulting services to governments
and private sector businesses to combat the threat to wired networks
represented by the deployment of unauthorized wireless networks. The
Company's solutions can also be used to implement, secure and manage
wireless networks. To September 30, 2004, the Company has not generated
significant recurring product sales and is continuing to develop its
business model. Accordingly, the Company is in the development stage for
financial reporting purposes.
2. SIGNIFICANT ACCOUNTING POLICIES
a) Going concern
These financial statements have been prepared on the going concern
basis, which assumes the realization of assets and liquidation of
liabilities and commitments in the normal course of business for the
foreseeable future. As shown in the unaudited financial statements, the
Company has a loss of $2,308,890 for the period from inception (March
7, 2001) to September 30, 2004, and has a working capital deficiency of
$774,946 at September 30, 2004. The Company does not currently have
sufficient resources to repay the $400,000 demand loan (note 5(b)), if
demanded by the lender. These factors raise substantial doubt as to the
Company's ability to continue as a going concern.
The application of the going concern concept is dependent upon the
Company's ability to receive continued financial support from its
creditors, stockholders and external investors and attaining profitable
operations through the sale of its software. These consolidated
financial statements do not give effect to any adjustment should the
Company be unable to continue as a going concern and, therefore, be
required to realize its assets and discharge its liabilities in other
than the normal course of business and at amounts differing from those
reflected in the consolidated financial statements. Management plans to
obtain equity and debt financing from external investors and to
actively market its wireless technology applications.
Management believes the plan described above will be sufficient to meet
the Company's liabilities and commitments as they become payable over
the next twelve months. There can be no assurance that management's
plan will be successful. Failure to obtain the support of additional
external investors to finance the development and marketing of the
Company's wireless technology applications will cause the Company to
curtail operations and impair the Company's ability to continue as a
going concern.
9
CIROND CORPORATION (FORMERLY EXMAILIT.COM)
(A Development Stage Enterprise)
Notes to Consolidated Interim Financial Statements
(Expressed in United States dollars)
Nine months ended September 30, 2004
(Unaudited)
================================================================================
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
b) Basis of presentation
The information included in the accompanying consolidated interim
financial statements is unaudited and should be read in conjunction
with the annual audited consolidated financial statements and notes
thereto contained in the Company's Report on Form 10-KSB for the fiscal
year ended December 31, 2003. In the opinion of management, all
adjustments, consisting of normal recurring adjustments, necessary for
fair presentation of the results of operations for the interim periods
presented have been reflected herein. The results of operations for the
interim periods presented are not necessarily indicative of the results
to be expected for the entire fiscal year.
3. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES:
Included in accounts payable and accrued liabilities at September 30, 2004
is $50,776 (December 31, 2003 - $50,776) that is currently being disputed
by management with the supplier.
4. RELATED PARTY TRANSACTIONS:
During the three months and nine months ended September 30, 2004, the
Company incurred consulting fees from a company controlled by the president
totaling $45,000 and $135,000 (December 31, 2003 - $30,000 and $90,000
respectively). At September 30, 2004, $40,000 (December 31, 2003 - $30,000)
of these consulting fees were included in consulting fees payable.
The amounts were subject to a written agreement, were incurred in the
normal course of operations and are recorded at the exchange amount, which
is the amount established and agreed to by the related parties.
5. SHARE SUBSCRIPTIONS PAYABLE AND LOAN PAYABLE:
a) Share subscriptions outstanding at September 30, 2004, consist of
subscriptions to acquire 50,000 common shares at a price of $0.50 per
share.
b) During the nine months ended September 30, 2004, the Company received a
subscription for 4,000,000 common shares and common share purchase
warrants for aggregate cash proceeds of $2 million. The subscriber was
granted common share purchase warrants as follows:
=======================================================================
Number of common shares Exercise price Expiry date
-----------------------------------------------------------------------
1,000,000 $ 0.50 April 19, 2005
1,000,000 $ 0.75 April 19, 2005
1,000,000 $ 1.00 April 19, 2006
1,000,000 $ 1.25 April 19, 2006
=======================================================================
10
CIROND CORPORATION (FORMERLY EXMAILIT.COM)
(A Development Stage Enterprise)
Notes to Consolidated Interim Financial Statements
(Expressed in United States dollars)
Nine months ended September 30, 2004
(Unaudited)
================================================================================
5. SHARE SUBSCRIPTIONS PAYABLE AND LOAN PAYABLE (CONTINUED):
b) In May 2004, the subscriber retracted their share subscription and the
Company returned $1.5 million of the $2 million share subscription to
the subscriber. The remaining share subscription of $500,000 was
converted into a demand loan, with an unspecified maturity date, is
unsecured and bears interest at 5% per annum. The demand loan is not
subject to a written agreement. The Company returned $100,000 of the
remaining $500,000 when a finder's fee of $100,000, paid in conjunction
with the subscription, was refunded to the Company. As at September 30,
2004, the lender has not taken steps to demand repayment.
6. SHARE CAPITAL:
a) During the nine months ended September 30, 2004, 1,400,000 shares were
issued for cash proceeds of $700,000, less offering costs of $26,500,
relating to two separate financings conducted at $.50 per share.
b) On August 2, 2004, Cirond entered into a Management Services Agreement
with Securities Trading Services Inc. ("STS"). The agreement was
effective as of August 2, 2004 and has a term of two years. Pursuant to
the terms of the agreement, Cirond must issue 1,200,000 shares of its
common stock to STS in consideration of services to be provided by STS.
Common shares in the name of STS will be held in escrow by Cirond, with
Cirond releasing 50,000 shares from escrow for every month as services
are performed. STS may not vote any unearned shares held in escrow. In
the event of a termination of the agreement by Cirond for breach or
cause, Cirond may repurchase and cancel any unearned shares for $0.001
per share in an amount equal to 50,000 shares times the number of
months remaining under the agreement after termination. STS was granted
piggy-back registration rights in connection with the agreement and the
shares are subject to anti-dilution provisions in the event of a
consolidation of Cirond's share capital. In addition, upon closing of
an equity financing of $1 million dollars, Cirond shall pay a
consulting fee in the amount of $5,000 to STS upon the first day of
each month over the remaining term of the contract. Upon closing of an
equity financing of $5 million or more, the consulting fee shall be
increased to $8,000 per month. The agreement also provides for the
accelerated release of shares from escrow, if STS secures financing for
Cirond, as follows:
o 100,000 shares upon STS securing an equity financing of $1 million.
o An additional 200,000 shares upon STS securing and additional $2
million of equity financing.
o An additional 450,000 shares upon STS securing an additional $5
million of equity financing.
o An additional 450,000 shares upon STS securing an additional $5
million of equity.
11
CIROND CORPORATION (FORMERLY EXMAILIT.COM)
(A Development Stage Enterprise)
Notes to Consolidated Interim Financial Statements
(Expressed in United States dollars)
Nine months ended September 30, 2004
(Unaudited)
================================================================================
6. SHARE CAPITAL (CONTINUED):
Common shares are valued as services are performed and common shares
are earned and eligible for release from escrow. To September 30, 2004,
$104,000 in compensation expense was recorded for the quarter in
consulting fees and 100,000 shares earned and released from escrow.
Unearned shares that have not been released from escrow have not been
included in the calculation of the weighted average number of common
shares, basic and diluted.
c) The Company has an outstanding stock option plan, that is subject to
final shareholder approval, pursuant to which the Company has reserved
5,281,500 shares of common stock to grant to certain employees,
officers, directors and consultants. As at September 30, 2004, the
Company's board of directors has authorized the grant of options to
purchase up to 5,110,000 common shares, subject to shareholder adoption
of the plan, which is expected to occur in the fourth quarter of 2004
or the first quarter of 2005.
7. COMMITMENTS:
On May 1, 2003, the Company entered an operating lease for office premises
that requires the following annual minimum lease payments:
===========================================================================
2004 $ 21,893
2005 $ 24,158
2006 $ 8,305
===========================================================================
8. REVENUE:
During the nine months ended September 30, 2004, the Company issued a
perpetual license for the use of its source code for its existing software
products to a third party in exchange for cash proceeds of $700,000. In
conjunction with this agreement, the Company will provide support and
maintenance services for a one year term for cash proceeds of $100,000.
Support and maintenance services are renewable, at the option of the
customer, at $100,000 per annum.
9. SUBSEQUENT EVENT:
Subsequent to September 30, 2004, the Company received $250,000 cash from a
subscriber for Units, at a price of $1.00 per Unit. Each Unit consists of
one share of common stock and one warrant to acquire an additional share of
common stock at a price of $1.00 per share for a period of 12 months from
the date of subscription. The Company is in the process of completing the
documentation necessary to accept the subscription and the funds have been
accounted for as a subscription payable. If the Company does not complete
the documentation to accept the subscription and/or if the investor decides
to rescind the subscription, the Company may have to return the funds to
the investor.
12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
OVERVIEW
On November 25, 2003, pursuant to a Stock Exchange Agreement (the
"Stock Exchange Agreement") with Seaside Holdings Inc. (f/k/a Cirond
Technologies Inc.), a Colorado corporation ("CTI"), as amended by the First
Amendment to the Stock Exchange Agreement dated November 13, 2003 (the "First
Amendment") (the Exchange Agreement and the First Amendment are collectively
referred to herein as the "Agreement"), we acquired all of the issued and
outstanding capital stock of CTI's wholly owned subsidiary, Cirond Networks,
Inc., a Nevada corporation ("CNI"), in exchange for 17,000,000 post-Forward
Split shares of our common stock. As a result of this share exchange, CTI owned
approximately 51.2% (not taking into account the issuance of 750,000 shares of
our common stock in a private placement, the certificates for which were issued
subsequent to December 31, 2003, or 1,300,000 shares of common stock issued for
the CNI Indebtedness described below) of our issued and outstanding shares. In
addition, pursuant to the terms of the Agreement, we issued an aggregate of
1,300,000 post-Forward Split shares of our common stock in exchange for $650,000
in indebtedness of CNI (the "CNI Indebtedness"), which was held by Cirond
Venture Partners Inc., Stumdell Limited, and Steven Velardi.
As a result of the Agreement, effective November 25, 2003, CNI became
our wholly-owned subsidiary. We changed our name to Cirond Corporation as of
October 14, 2003.
For accounting purposes, the acquisition of CNI has been accounted for
as a recapitalization transaction. Under recapitalization accounting, CNI is
considered to have issued shares for consideration equal to our net monetary
assets with the results of our operations included in the consolidated financial
statements from the date of recapitalization on November 25, 2003.
CNI entered into a non-exclusive Source Code Licensing Agreement (the
"Agreement") with a third party on January 21, 2004, which included an annual
support fee renewable at the option of the licensee. The details of the
agreement are confidential. As a result of the Agreement, our revenues increased
significantly during the first three quarters of 2004 from the recording of the
licensing fee and approximately nine months of the annual support fee. Almost
all of the increase in revenue is attributable to the Agreement. All of the
payments due to us under this agreement were paid at the time of the contract
and, at this time, we do not anticipate any further payments; however, we will
record $8,333 of the fees received as revenue each month for the 12 months from
January 21, 2004 to January 20, 2005 relating to the support fees earned in
connection with this agreement.
On March 29, 2004, we received $2,000,000 in funds from a private
investor in connection with a private placement offering. During the quarter
ended June 30, 2004, we agreed with the investor to restructure the investment
and to return $1,500,000 to the investor.
13
The remaining $500,000 was restructured as a loan to us. In connection with the
private placement, we paid a $100,000 finder's fee. During the quarter ended
June 30, 2004, we recovered the finder's fee, which we repaid to the investor to
reduce the outstanding principal balance on the loan. It is our intent to repay
the $400,000 balance of the loan, along with accrued interest at a commercial
rate, at such time as we have completed a further financing with sufficient
proceeds to repay the loan.
SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES
Our discussion and analysis of our financial condition and results of
operations are based upon our consolidated interim financial statements, which
have been prepared in accordance with accounting principles generally accepted
in the United States of America. The preparation of these consolidated financial
statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosures
of contingent assets and liabilities. On an ongoing basis, we evaluate our
estimates, including those related to the valuation of accounts receivable and
inventories, the impairment of long-lived assets, any potential losses from
pending litigation and deferred tax assets or liabilities. We base our estimates
on historical experience and on various other assumptions that we believe to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying value of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions; however, we believe that
our estimates, including those for the above-described items, are reasonable.
GOING CONCERN
The accompanying consolidated financial statements have been prepared
in conformity with accounting principles generally accepted in the United States
of America, which contemplate continuation of our company as a going concern. We
had a net loss of $484,504 and $741,428 for the three months and nine months
ended September 30, 2004, respectively. At September 30, 2004, we had an
accumulated deficit of $2,433,537 and a working capital deficit of $774,946.
These factors raise substantial doubt as to our ability to continue as a going
concern.
The application of the going concern concept is dependent upon our
ability to receive continued financial support from our creditors, stockholders
and external investors and attaining profitable operations through the sale of
our software. These consolidated financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts, or amounts and classification of liabilities that might be necessary
should we be unable to continue as a going concern. Management plans to obtain
equity and debt financing from external investors and to actively market our
network security applications.
Management believes the plan described above will be sufficient to meet
our liabilities and commitments as they become payable over the next twelve
months. There can be no assurance that management's plan will be successful.
Failure to obtain the support of additional
14
external investors to finance the development and marketing of our network
security applications will cause us to curtail operations and impair our ability
to continue as a going concern.
BASIS OF CONSOLIDATION. Effective November 25, 2003, we issued
17,000,000 common shares in consideration for 100% of the outstanding common
shares of CNI. As CNI stockholders obtained control of Cirond Corporation
through the exchange of shares, the acquisition of CNI has been accounted for in
the consolidated financial statements as a recapitalization transaction,
effectively as if CNI had issued shares for consideration equal to our net
monetary assets followed by a recapitalization of CNI's common shares. On
October 14, 2003, our name was changed from eXmailit.com to Cirond Corporation.
The consolidated statements of loss, stockholders' deficiency and comprehensive
loss and cash flows reflect the results of operations and changes in financial
position of CNI, for the period from its incorporation on March 7, 2001 to
September 30, 2004, combined with those of the legal parent, Cirond Corporation,
from November 25, 2003, the date of the recapitalization, in accordance with
accounting principles generally accepted in the United States of America.
REVENUE RECOGNITION. Revenue from one-time software license sales is
generally recognized once delivery has occurred, evidence of an arrangement
exists, the fee is fixed and determinable and collection of the fee is probable,
provided there are no significant vendor obligations remaining. For multiple
element arrangements, where Vendor Specific Objective Evidence ("VSOE") of fair
value is available for all elements, the contract value is allocated to each
element proportionately based upon relative VSOE of fair value and revenue is
recognized separately for each element. Where VSOE of fair value is available
for all undelivered elements, the residual method is used to value the delivered
elements. Where VSOE of fair value is not available for an undelivered element,
contract accounting is used to account for the entire contract value.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 2003
Revenues from operations increased from $8,893 for the three month
period ended September 30, 2003 to $83,546 for the three month period ended
September 30, 2004. Revenue during the three month period ended September 30,
2004, was derived principally from software customization and sales of our Winc,
pocketWinc and recently-introduced AirPatrol Mobile, AirPatrol Sentinel and
AirPatrol Enterprise software products. Revenue also included the recording of
support service fees received under the Source Code Licensing agreement
described above which closed in the first quarter of 2004. Our revenues during
the three month period ended September 30, 2004 increased significantly compared
to the same period in 2003. The increase is attributable to the release of new
products (AirPatrol Enterprise and AirPatrol Sentinel) as well as increased
marketing initiatives including print and online advertising - as well as the
Source Code Licensing Agreement (which accounted for a minority of revenue in
the quarter). All of the payments due to us under the Source Code Licensing
Agreement were paid at the time of the contract and, at this time, we do not
anticipate any further payments; however, we will record a portion of the fees
received as revenue each month for the 12 months from January
15
21, 2004 to January 20, 2005 relating to the support fees earned in connection
with this agreement. In addition, management also expects greater contributions
to revenue from licensing our network security products in late 2004, as
anticipated marketing initiatives for the AirPatrol Enterprise, AirPatrol
Sentinel, AirPatrol Mobile and AirSafe product lines get underway. Management is
also seeking to enter into other license agreements for our technology during
the next 12 months; however, there are no assurances that we will be successful
in entering into any such agreements.
During the third quarter, we invested in a variety of television,
online and print marketing initiatives - along with on-going public relations
work and the development of new marketing materials related to the new AirPatrol
product line - all of which contributed to an increase in marketing expenses
compared to the prior year. In addition, we increased our expenditures for
research and development in the quarter - which resulted in the shipment of
AirPatrol Enterprise, AirPatrol Sentinel, AirSafe, Winc 2.1 and pocketWinc 2.0
in the quarter.
We also undertook initiatives to attain new financing. Throughout the
quarter, management met with potential investment partners and in August 2004,
entered into an investment banking agreement with Ascendiant Securities, LLC.
During the third quarter, we also engaged California-based Regency
Capital, Ltd. to assist us in actively pursuing opportunities with potential
government customers, particularly in the United States. Regency Capital has, in
turn, sub-contracted Atlantic Systems Corporation of Arlington, Virginia (and
its Point One, Inc. subsidiary) to work closely with us.
Our net loss for the three months ended September 30, 2004 was $484,504
compared to a net loss of $179,660 for the three months ended September 30,
2003. The increase in the net loss is primarily the result of increases in
advertising and promotion, consulting fees, research and development, and
salaries and benefits. Advertising was $44,860 for the quarter compared to
$15,752 for 2003 as our products have advanced from the development stage in
2003 to the sales stage in 2004. Professional fees for the quarter were $33,762
compared to $nil for 2003 due to costs incurred in the quarter as a result of
being a public company compared to 2003 when CNI was privately held and includes
legal fees, accounting fees and costs associated with corporate communications.
Compared to 2003, consulting fees increased by $226,848 during the quarter as a
result of increased fees paid for online marketing initiatives, corporate
finance initiatives and the expensing of the fair value of shares issued in
exchange for services totaling approximately $104,000. Also affecting 2004
consulting fees was the fact that we retained on-going marketing and public
relations services in 2004 which we had not needed in the same period in 2003,
when our products were at an earlier stage of development. Salaries and benefits
for the quarter were $65,836 compared to $28,347 for 2003 as a result of our
having two more employees in 2004. Research and development during the three
months ended September 30, 2004, increased $32,082 compared to 2003 as continued
additions were made to the development team in 2004. Expenses are expected to
stay at levels on par with the three months ended September 30, 2004 until we
have completed significant financings in 2004 that will support increasing
staffing levels in research and development and sales and marketing.
16
No cash dividends were declared during the three months ended September
30, 2004.
NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2003
Revenues from operations increased from $10,545 for the nine month
period ended September 30, 2003 to $905,108 for the nine month period ended
September 30, 2004. Revenue from the Source Code Licensing agreement described
above, which closed in the first quarter of 2004, accounted for approximately
85% of revenues for the nine months ended September 30, 2004. We also received
revenue from software customization and licensing of our Winc Manager, Winc,
pocketWinc and recently-introduced AirPatrol Mobile, AirPatrol Sentinel and
AirPatrol Enterprise software products. Our revenues during the nine month
period ended September 30, 2004 increased significantly compared to the same
period during 2003; however, almost all of the increase is attributable to the
Source Code Licensing Agreement. All of the payments due to us under this
agreement were paid at the time of the contract and, at this time, we do not
anticipate any further payments; however, we will record a portion of the fees
received as revenue each month for the 12 months from January 21, 2004 to
January 20, 2005 relating to the support fees earned in connection with this
agreement. In addition, management also expects greater contributions to revenue
from licensing our network security products in late 2004, as advertising for
the AirPatrol Enterprise, AirPatrol Sentinel and AirSafe products begin.
Management is also seeking to enter into other license agreements for our
technology during the next 12 months; however, there are no assurances that we
will be successful in entering into any such agreements.
During the first nine months of 2004, our expenses increased over the
same period in the prior year as we invested in a variety of television, print
and online marketing initiatives and attended four major industry exhibitions in
the United States and the United Kingdom - all of which contributed to an
increase in marketing expenses compared to the prior year. In addition, we
increased expenditures for research and development in that period - all of
which resulted in the announcement and shipment of Winc Manager 2.0, AirPatrol
Mobile, AirPatrol Enterprise, AirPatrol Sentinel, AirSafe, Winc 2.1 and
pocketWinc 2.0. We also undertook initiatives to expand our distribution, which
resulted in the conclusion of agreements with hardware vendor Netgear as well as
leading online mobile computer software vendors Handango and Pocketgear to carry
our products. We also expanded our range of international distribution
agreements during this period.
Our net loss for the nine months ended September 30, 2004 was $741,428
compared to a net loss of $642,274 for the nine months ended September 30, 2003.
The increase in the net loss is primarily a result of increased expenses
compared to the nine-month period ended September 30, 2003. During the
nine-month period ended September 30, 2004, the most dramatic increases in
expenses were in the areas of advertising and promotion, consulting fees,
professional fees, research and development and salaries and benefits.
Advertising and promotion and travel expenses have increased as our products
have reached the sales portion of the sales cycle. Professional fees for the
nine month period in 2004 were $160,292 compared to $32,201 during 2003 due to
costs incurred in 2004 as a result of being a public company, compared to 2003
when CNI was privately held, and includes legal fees, accounting fees and costs
associated with
17
corporate communications. Salaries and benefits for the nine month period in
2004 were $185,828 compared to $81,967 for 2003 as a result of our having two
more employees in 2004 than in 2003. During the nine months ended September 30,
2004, consulting fees increased by $282,248 compared to the same period during
2003. The increase in consulting fees is due to increased fees paid for online
marketing initiatives, corporate finance initiatives and the expensing of the
fair value of shares issued in exchange for services totaling approximately
$104,000. Also contributing was the fact that we retained on-going marketing and
public relations services in 2004 which we did not need in the same period in
2003, when our products were at an earlier stage of development. Travel has also
increased as sales and marketing personnel attended more trade shows in 2004
compared to 2003. Research and development is also higher in 2004 as a result of
$100,000 of purchased research and development. Expenses are expected to stay at
levels on par with three months ended September 30, 2004 until we have completed
significant financings in 2004 and 2005 that will support increasing staffing
levels in research and development and sales and marketing.
No cash dividends were declared during the nine months ended September
30, 2004.
LIQUIDITY AND CAPITAL RESOURCES
As at September 30, 2004, we had cash of $59,301 and a working capital
deficiency of $774,946.
Although our revenues increased over the same period in 2003, our
expenses also increased significantly and, as a result, at September 30, 2004,
we had less cash than at December 31, 2003. During the nine months ended
September 30, 2004, we received the $400,000 loan from the investor (discussed
above) and sold 700,000 shares of our common stock in a private placement for
gross proceeds of $350,000; however, we did not receive sufficient cash from
these activities to offset the increased expenses during the period. Subsequent
to September 30, 2004, we received $250,000 from a subscriber for Units, at a
price of $1.00 per Unit. Each Unit consists of one share of our common stock and
one warrant to acquire an additional share of common stock at a price of $1.00
per share for a period of 12 months from the date of subscription. As of the
date of this report, we are in the process of completing the documentation
necessary to accept the subscription and the funds have been accounted for as a
subscription payable. If we do not complete the documentation to accept the
subscription and/or if the investor decides to rescind the subscription, we may
have to return the funds to the investor.
Receivables of approximately $24,428 consisted of sales made to Guest
Tek Corporation in August and sales on Esellerate and Handango websites in
September and paid to us in October, as well as refundable taxes from the
Canadian government. The amounts receivable at December 31, 2003 of $19,679 were
collected in the first quarter of 2004.
Prepaid expenses consisted of prepaid rent.
18
Property plant and equipment consisted of hardware equipment purchased
from independent suppliers in North America for the development of our products.
Consulting fees payable consisted of payables owed to two of our
officers, Nicholas Miller and Mitchell Burton. During the nine months ended
September 30, 2004, consulting fees payable decreased by $19,484 due mostly to
an extra payment made to Mr. Miller.
Deferred revenue includes support revenue in connection with the Source
Code Licensing Agreement, which is being recognized each month for the 12 months
from January 21, 2004 to January 20, 2005.
Accounts payable decreased from December 31, 2003 to September 30, 2004
as a result of liabilities relating to accrued vacation pay for employees being
reduced as our employees took vacations during the period and payment of
payables outstanding at year end for legal fees relating to our acquisition of
CNI. Loan payable was higher at September 30, 2004, compared to December 31,
2003, as a result of the $400,000 loan resulting from the restructuring of the
$2 million investment transaction (discussed above).
Share subscriptions payable consisted of $25,000 received by us during
the quarter by an investor subscribing for shares of our common stock. As of the
date of this report, we are in the process of issuing the shares of common stock
to the subscriber.
During the nine month period ended September 30, 2004, the net cash
used by operating activities was $641,714. In order to proceed with business
development and normal operations, net cash used in investing activities was
$23,550.
As disclosed above, on March 29, 2004, we received funds from a private
investor in connection with a private placement which, during the quarter ended
June 30, 2004, was restructured resulting in a return of $1,600,000 to the
investor and a loan to us of $400,000. We also received $350,000 from the sale
of our common stock during the nine months ended September 30, 2004; however,
the sale of the common stock and the loan from the investor did not provide us
with sufficient funds to meet all of our cash obligations. As a result, we
experienced a net decrease in cash and cash equivalents of $26,765 during the
nine months ended September 30, 2004.
In order to meet our continuing cash requirements and to successfully
implement our growth strategy, in addition to relying on revenue from our
operating activities, we will continue to seek additional funding from potential
investors. In the event that additional financing is required, no assurances can
be given that such financing will be available in the amount required or, if
available, that it can be on terms satisfactory to us. The Auditors' report on
our consolidated financial statements for the year ended December 31, 2003
includes an explanatory paragraph that states that we have incurred losses since
inception and had a working capital deficiency at December 31, 2003, factors
which raise substantial doubt about our ability to continue as a going concern.
There has been no change in these factors during the nine months ended September
30,
19
2004. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
PLAN OF OPERATION
We believe we do not have sufficient funds to cover our operating
overhead. Management is in the process of negotiating various financing
transactions through the sale of our securities which we hope will raise
sufficient capital to provide us with financing to fund our operations for at
least eight months. There are no assurances, however, that we will be successful
in completing any such financing transactions. If we are unable to raise
additional capital, we may have to cease operations. In addition, we do not have
sufficient funds to repay the aforementioned $400,000 loan.
In order to satisfy our cash requirements in the next twelve months, we
will need to raise additional funds. Accordingly, we intend to conduct
additional financings to raise funds from private investors; however, there are
no assurances that we will be able to complete any such financings.
During June 2004, we began a private placement offering of 2,000,000
shares of common stock at a price of $0.50 per share for an aggregate of
$1,000,000. As of September 30, 2004, we had received subscriptions in the
offering totaling $350,000 and we had issued 650,000 shares of common stock to
the subscribers. We are in the process of issuing the remaining 50,000 shares.
Subsequent to September 30, 2004, we received $250,000 from a subscriber for
Units, at a price of $1.00 per Unit. Each Unit consists of one share of our
common stock and one warrant to acquire an additional share of common stock at a
price of $1.00 per share for a period of 12 months from the date of
subscription. As of the date of this report, the Company is in the process of
completing the documentation necessary to accept the subscription and the funds
have been accounted for as a subscription payable. If we do not complete the
documentation to accept the subscription and/or if the investor decides to
rescind the subscription, we may have to return the funds to the investor.
We intend to continue our product research and development activities
to further enhance our existing product line and to create new products focused
on the same markets. We have budgeted approximately $700,000 for research and
development costs during fiscal 2004 and we have budgeted at least $800,000 for
research and development costs during the first nine months of fiscal 2005. Our
spending on research and development is contingent upon us receiving sufficient
funding to support such expenditures.
We do not plan to purchase or sell any significant plant or equipment
during the remainder of 2004 or during the first nine months of 2005.
We expect to increase the number of employees by approximately 10 to 20
individuals in the areas of engineering, marketing, sales, and customer support
during the remainder of fiscal 2004 and/or during the first nine months of 2005,
provided we have sufficient funding to support the hiring of additional
employees.
20
We develop software solutions and provide network security products
and consulting services to governments and private sector businesses to combat
the threat to wired networks represented by the deployment of unauthorized
wireless networks. Our solutions can also be used to implement, secure and
manage wireless networks. We anticipate that, if sufficiently funded over the
next twelve months our focus will be: marketing our products, supporting
customers, and conducting on-going research and development.
We also intend to enter into other license agreements for our
technology, similar to the source code licensing agreement described above,
during the next 12 months; however, there are no assurances that we will be
successful in entering into any such agreements.
If we are successful in implementing our growth strategy, management
believes that we can undergo a period of rapid growth. For our AirPatrol
technology, we will actively search for more partners for the provision of
software licenses and related software consultancy and engineering services in
relation to its further development. Management expects AirPatrol Mobile,
AirPatrol Enterprise, AirPatrol Sentinel, AirSafe, Winc 2.1 and pocketWinc 2.0
to ship in greater numbers in late 2004 and 2005, and thus will require further
software developments and upgrades for the remainder of the year.
OFF BALANCE SHEET ARRANGEMENTS
We do not have any material off balance sheet arrangements that have or
are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources.
FORWARD-LOOKING STATEMENTS
Certain statements in this Quarterly Report on Form 10-QSB, as well as
statements made by us in periodic press releases, oral statements made by our
officials to analysts and shareholders in the course of presentations about us,
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties, and other factors that may cause
our actual results, performance or achievements to be materially different from
any future results, performance or achievements expressed or implied by the
forward looking statements. There are many factors that could cause these
forward-looking statements to be incorrect including, but not limited to, the
following:
o our ability to generate desired technologies;
o the lack of liquidity of our common stock;
o the risks associated with technology companies;
o our ability to find and retain skilled personnel;
o availability of capital;
o the strength and financial resources of our competitors; and
21
o general economic conditions.
ITEM 3. CONTROLS AND PROCEDURES.
As required by SEC rules, we have evaluated the effectiveness of the
design and operation of our disclosure controls and procedures at the end of the
period covered by this report. This evaluation was carried out under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer. Based on this
evaluation, these officers have concluded that the design and operation of our
disclosure controls and procedures are effective. There were no changes in our
internal control over financial reporting or in other factors that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
Disclosure controls and procedures are our controls and other
procedures that are designed to ensure that information required to be disclosed
by us in the reports that we file or submit under 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 us in the reports that we file or submit under the Exchange
Act is accumulated and communicated to our management, including our principal
executive officer and principal financial officer, as appropriate, to allow
timely decisions regarding required disclosure.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
We are not a party to any pending legal proceedings.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
During June 2004, we began conducting an offering of 2,000,000 common
shares at a price of $0.50 per share, for an aggregate of $1,000,000.
We did not utilize any underwriters in connection with the offering;
however, we agreed to pay commissions of up to 10% to persons who
assisted us with the offering. We offered the common shares only to
accredited investors and, as such, the securities were offered and
sold pursuant to the exemption from registration contained in Section
4(2) of the Securities Act of 1933, as amended, and Rule 506 of
Regulation D promulgated thereunder. As of September 30, 2004, we had
received subscriptions for an aggregate of $350,000 (700,000 common
shares) from eight investors. During the quarter ended September 30,
2004, we issued 650,000 shares of common stock to the investors and we
are in the process of issuing the remaining 50,000 shares of common
stock.
22
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
By written consent dated September 21, 2004, shareholders holding
18,000,000 of the 35,260,000 shares (51.1%) of our common stock which
were issued and outstanding and entitled to vote as of September 21,
2004, approved and adopted our 2004 Stock Option Plan. The shareholder
approval is effective 20 days from the date that a definitive
information statement is mailed to our shareholders pursuant to Rule
14c2-(b) promulgated by the Securities and Exchange Commission under
the Securities Exchange Act of 1934, as amended. If the definitive
information statement is not mailed to our shareholders by August 31,
2005, any options granted under the 2004 Stock Option Plan will be
rescinded and void.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS.
Exhibits:
----------------------------------------------------------------------
REGULATION
S-B NUMBER EXHIBIT
----------------------------------------------------------------------
2.1 Stock Exchange Agreement by and between Cirond
Corporation (f/k/a eXmailit.com) and Seaside Holdings
Inc. (f/k/a Cirond Technologies Inc.) dated August 29,
2003 (1)
----------------------------------------------------------------------
2.2 First Amendment to Stock Exchange Agreement by and
between Cirond Corporation and Seaside Holdings Inc.
(f/k/a Cirond Technologies Inc.) dated November 13,
2003 (1)
----------------------------------------------------------------------
2.3 Articles of Exchange (2)
----------------------------------------------------------------------
3.1 Articles of Incorporation, as amended (2)
----------------------------------------------------------------------
3.2 Bylaws, as amended (2)
----------------------------------------------------------------------
10.1 Management Advisory Services Agreement with Amber Tiger
Holdings Corp. dated February 1, 2002 (2)
----------------------------------------------------------------------
10.2 Management Advisory Services Agreement with Headline
Technologies Ltd. dated February 1, 2002 (2)
----------------------------------------------------------------------
10.3 2003 Stock Option Plan (2)
----------------------------------------------------------------------
10.4 Management Advisory Services Agreement with Amber Tiger
Holdings Corp. dated January 1, 2004 (2)
----------------------------------------------------------------------
10.5 2004 Stock Option Plan (3)
----------------------------------------------------------------------
31.1 Rule 13a-14(a) Certification of Chief Executive Officer
----------------------------------------------------------------------
31.2 Rule 13a-14(a) Certification of Chief Financial Officer
----------------------------------------------------------------------
23
----------------------------------------------------------------------
REGULATION
S-B NUMBER EXHIBIT
----------------------------------------------------------------------
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 of Chief Executive Officer
----------------------------------------------------------------------
32.2 Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 of Chief Financial Officer
----------------------------------------------------------------------
-------------------
(1) Incorporated by reference to the exhibits to the registrant's
current report on Form 8-K dated November 25, 2003, filed
December 5, 2003.
(2) Incorporated by reference to the exhibits to the registrant's
Annual Report on Form 10-KSB, filed May 7, 2004.
(3) Incorporated by reference to the exhibits to the registrant's
current report on Form 8-K dated September 20, 2004, filed
October 5, 2004.
24
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CIROND CORPORATION
Date: November 12, 2004 By: /s/ DAVID REDEKOP
-------------------------------------
David Redekop
Chief Financial Officer
25