UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2005
OR
|_| TRANSITIONAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to _____________
Commission file number 000-28063
DELTATHREE, INC.
A Delaware Corporation I.R.S. Employer No. 13-4006766
75 Broad Street, New York, New York 10004
Telephone Number: (212) 500-4850
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for 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 |_|
Indicate by checkmark whether the registrant is an accelerated filer (as defined
in Rule 12b-2 of the Exchange Act).
Yes |_| No |X|
As of August 12, 2005, 29,979,499 shares of Class A Common Stock, par value
$0.001 per share, were outstanding.
Table of Contents
Item Description Page
- ---- ----------- ----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements..................................................1
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...................................6
Item 3. Quantitative and Qualitative Disclosures About
Market Risk..........................................................10
Item 4. Controls and Procedures..............................................11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings....................................................12
Item 6. Exhibits.............................................................12
Signatures....................................................................13
Exhibit Index.................................................................14
ii
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements.
DELTATHREE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
As of As of
June 30, December
2005 31, 2004
--------- ---------
(unaudited)
($ in thousands)
ASSETS
Current assets:
Cash and cash equivalents ......................... $ 4,918 $ 3,905
Short-term investments ............................ 372 2,723
Accounts receivable, net .......................... 931 325
Prepaid expenses and other current assets ......... 820 528
Inventory ......................................... 205 193
--------- ---------
Total current assets ........................... 7,246 7,674
--------- ---------
--------- ---------
Long -Term investments ............................... 10,120 9,850
--------- ---------
--------- ---------
Property and equipment, net .......................... 4,541 4,642
--------- ---------
Deposits ............................................. 104 107
--------- ---------
Total assets ................................... $ 22,011 $ 22,273
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable .................................. $ 3,212 $ 3,657
Deferred revenues ................................. 1,111 453
Other current liabilities ......................... 1,865 2,034
--------- ---------
Total current liabilities ...................... 6,188 6,144
--------- ---------
Long-term liabilities:
Severance pay obligations ......................... 161 104
--------- ---------
Total liabilities .............................. 6,349 6,248
--------- ---------
Commitments and contingencies
Stockholders' equity:
Class A common stock, - par value $0.001 .......... 30 29
Additional paid-in capital ........................ 167,678 167,301
Other Comprehensive Income:
Unrealized gain on available for sale
securities ....................................... 95 --
Accumulated deficit .................................. (151,931) (151,095)
Treasury stock at cost: 257,600 shares of class A
common stock as of June 30, 2005 and
December 31, 2004 ................................... (210) (210)
--------- ---------
Total stockholders' equity ..................... 15,662 16,025
--------- ---------
Total liabilities and stockholders' equity ..... $ 22,011 $ 22,273
========= =========
See notes to unaudited condensed consolidated financial statements.
1
DELTATHREE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------- ---------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
(unaudited) (unaudited)
($ in thousands, except share data)
Revenues ............................... $ 6,927 $ 4,701 $ 13,531 $ 9,307
Costs and operating expenses:
Cost of revenues .................... 4,284 3,047 8,494 6,056
Research and development expenses ... 777 558 1,591 1,139
Selling and marketing expenses ...... 1,001 822 1,865 1,625
General and administrative expenses . 735 484 1,345 1,091
Depreciation and amortization ....... 534 719 1,144 1,464
------------ ------------ ------------ ------------
Total costs and operating expenses 7,331 5,630 14,439 11,375
------------ ------------ ------------ ------------
Loss from operations ................... (404) (929) (908) (2,068)
Interest income, net ................... 10 49 104 135
------------ ------------ ------------ ------------
Loss before income taxes ............... (394) (880) (804) (1,933)
Income taxes ........................... 15 6 32 44
------------ ------------ ------------ ------------
Net loss ............................... $ (409) $ (886) $ (836) $ (1,977)
============ ============ ============ ============
Net loss per share - basic and diluted . $ (0.01) $ (0.03) $ (0.03) $ (0.07)
============ ============ ============ ============
Weighted average shares outstanding -
basic and diluted (number of shares) .. 29,707,860 29,312,835 29,619,908 29,298,717
============ ============ ============ ============
See notes to unaudited condensed consolidated financial statements
2
DELTATHREE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
---------------------
2005 2004
-------- --------
(unaudited)
Operating activities:
Net loss ............................................ (836) (1,977)
Adjustments to reconcile net loss to net cash
used in operating activities
Depreciation and amortization ................. 1,137 1,464
Increase in liability for severance pay,
net .......................................... 57 2
Changes in assets and liabilities:
Increase in accounts receivable ............... (606) (337)
Decrease (increase) in other current
assets ....................................... (292) 280
Increase in inventory ......................... (12) (81)
Increase (decrease) in accounts payable ....... (635) 519
Increase in deferred revenues ................. 658 137
Decrease in current liabilities .............. (169) (54)
-------- --------
Net cash used in operating activities ............ (698) (47)
-------- --------
Investing activities:
Purchase of property and equipment ............ (846) (633)
Increase in deposits .......................... 3 1
Proceeds from sale of long-term
investments .................................. (3,000) --
Other Comprehensive Income:
Unrealized gain on available for sale
securities ................................... 95 --
Purchase of long-term investments ............. 2,730 (3,750)
-------- --------
Net cash used in investing activities ............ (1,018) (4,382)
-------- --------
Financing activities:
Proceeds from exercise of employee options .... 378 74
Decrease (increase) in short-term
investments, net ............................. 2,351 3,220
-------- --------
Net cash provided by financing activities ........ 2,729 3,294
-------- --------
Increase (decrease) in cash and cash equivalents .... 1,013 (1,135)
Cash and cash equivalents at beginning of year ...... 3,905 1,682
-------- --------
Cash and cash equivalents at end of period .......... $ 4,918 $ 547
======== ========
Supplemental schedule of cash flow information:
Taxes ............................................... $ 24 $ 45
======== ========
Supplemental schedule of no cash investing and
financing activities:
Net cash provided by (used in) financing
activities ...................................... $ 190 $ 350
======== ========
See notes to unaudited condensed consolidated financial statements
3
DELTATHREE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Presentation
The unaudited condensed consolidated financial statements of deltathree, Inc.
and its subsidiaries (collectively referred to in this report as the "Company",
"we", "us", or "our"), of which these notes are a part, have been prepared in
accordance with generally accepted accounting principles for interim financial
information and pursuant to the instructions of Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for annual
financial statements. In the opinion of our management, all adjustments
(consisting only of normal recurring accruals) considered necessary for a fair
presentation of the financial information as of and for the periods presented
have been included.
The results for the interim periods presented are not necessarily indicative of
the results that may be expected for any future period. The unaudited condensed
consolidated financial statements should be read in conjunction with the audited
consolidated financial statements and notes for the year ended December 31, 2004
included in our Annual Report on Form 10-K.
2. Net Loss Per Share
The shares issuable upon the exercise of stock options and warrants are excluded
from the calculation of net loss per share, as their effect would be
antidilutive.
3. Stock-Based Compensation
We follow accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees" and Financial Accounting Standards Board (FASB)
Interpretation No. 44 for our stock-based compensation plans. Pursuant to these
accounting pronouncements, we do not recognize expense for stock options granted
to employees if the exercise price is at least equal to the market value of the
underlying stock at the date of grant. Deferred compensation is amortized to
compensation expense over the vesting period of the options.
In accordance with Statement of Financial Accounting Standards (SFAS) No. 123,
"Accounting for Stock-Based Compensation", as amended by SFAS No. 148, if we had
elected to recognize compensation expense for the issuance of options to our
employees based on the fair value method of accounting prescribed by SFAS No.
123, net income (loss) and earnings (loss) per share would have been reduced to
the pro forma amounts as follows (in thousands, except per share amounts):
4
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------------------------
2 0 0 5 2 0 0 4 2 0 0 5 2 0 0 4
--------- --------- --------- ---------
Net Income (Loss):
Reported net income (loss) ......................... $ (409) $ (886) $ (836) $ (1,977)
Add: Stock-based employee compensation expense,
included in reported net income, net of tax ....... -- -- -- --
Deduct: Stock-based employee compensation expense
determined under fair value method, net of tax .... (110) (94) (219) (188)
--------- --------- --------- ---------
Pro forma net income (loss) ........................ $ (519) $ (980) $ (1,055) $ (2,165)
========= ========= ========= =========
Net income (loss) per share:
Basic and diluted, as reported ..................... $ (0.01) $ (0.03) $ (0.03) $ (0.07)
Basic and diluted, pro forma ....................... $ (0.02) $ (0.03) $ (0.04) $ (0.07)
For the purpose of presenting pro forma information required under SFAS 123, the
fair value option grant has been estimated on the date of grant using the
Black-Scholes option pricing model for grants made after the Company became a
public entity.
There were no grants in the three months periods ended June 30, 2005 and June
30, 2004.
5
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This Management's Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) should be read in conjunction with the Management's Discussion
and Analysis of Financial Condition and Results of Operations and the
Consolidated Financial Statements and the Notes thereto included in our Annual
Report on Form 10-K for the year ended December 31, 2004.
Forward-Looking Statements
This Management's Discussion and Analysis of Financial Condition and Results of
Operation (MD&A) contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
are based on current expectations, estimates, forecasts and projections about
us, our future performance, the industries in which we operate, our beliefs and
our management's assumptions. In addition, other written or oral statements that
constitute forward-looking statements may be made by us or on our behalf. Words
such as "expects," "anticipates," "targets," "goals," "projects," "intends,"
"plans," "believes," "seeks," "estimates," variations of such words and similar
expressions are intended to identify such forward-looking statements. These
statements are not guarantees of future performance and involve certain risks,
uncertainties and assumptions that are difficult to assess. Therefore, actual
outcomes and results may differ materially from what is expressed or forecasted
in such forward-looking statements. These risks and uncertainties include, but
are not limited to, the following: uncertainty of financial estimates and
projections, the competitive environment of Internet telephony and our ability
to compete effectively, our limited operating history, changes in the rates of
all related telecommunications services, the level and rate of customer
acceptance of new products and services, governmental regulation and legal
uncertainties that may affect the Internet telephony industry, and rapid changes
in technology, as well as other risks referenced from time to time in our
filings with the Securities and Exchange Commission (SEC). For a more complete
list and description of such risks and uncertainties, refer to our Form 10-K for
the year ended December 31, 2004. Except as required under the federal
securities laws and the rules and regulations of the SEC, we do not have any
intention or obligation to update publicly any forward-looking statements or
risk factors after the distribution of this MD&A, whether as a result of new
information, future events, changes in assumptions or otherwise.
Results of Operations - Six Months Ended June 30, 2005 Compared to Six Months
Ended June 30, 2004
Revenues
Revenues increased approximately $4.2 million or 45.2% to approximately
$13.5 million for the six months ended June 30, 2005 from approximately $9.3
million for the six months ended June 30, 2004. Revenues from enhanced IP
communications services (primarily PC-to-Phone and Broadband Phone) through
iConnectHere decreased slightly by $0.1 million or 2.8% to approximately $3.5
million for the six months ended June 30, 2005 from approximately $3.6 million
for the six months ended June 30, 2004 due primarily to a slightly reduced
volume of PC-to-Phone and Broadband Phone calls. Revenues from enhanced IP
communications services through our reseller and service provider sales efforts
(including sales of our Hosted Communications Solution) increased approximately
$4.3 million or 75.4% to approximately $10 million for the six months ended June
30, 2005 from approximately $5.7 million for the six months ended June 30, 2004,
due primarily to a greater number of PC-to-Phone and Broadband Phone calls being
placed by an increasing user base. One "Master Reseller/Service Provider"
accounted for approximately 11% of our sales in aggregate during the six months
ended June 2005.
6
Costs and Operating Expenses
Cost of revenues. Cost of revenues increased by approximately $2.4 million
or 39.3% to approximately $8.5 million for the six months ended June 30, 2005
from approximately $6.1 million for the six months ended June 30, 2004, due
primarily to an increase in the amount of traffic being terminated.
Research and development expenses. Research and development expenses
increased by approximately $0.5 million or 45.5% to approximately $1.6 million
for the six months ended June 30, 2005 from approximately $1.1 million for the
six months ended June 30, 2004, due to higher personnel costs associated with
the development of new services and enhancements to our existing services.
Selling and marketing expenses. Selling and marketing expenses increased
by approximately $0.3 million or 18.8% to approximately $1.9 million for the six
months ended June 30, 2005 from approximately $1.6 million for the six months
ended June 30, 2004 due to slightly higher personnel and external marketing
related costs associated with the sales and marketing of our products and
services.
General and administrative expenses. General and administrative expenses
increased by approximately $0.3 million or 30% to approximately $1.3 million for
the six months ended June 30, 2005 from approximately $1 million for the six
months ended June 30, 2004 due to somewhat higher personnel costs associated
with the increased general and administrative activities associated with higher
transaction volumes.
Depreciation and amortization. Depreciation and amortization decreased by
approximately $ 0.4 million or 26.7% to approximately $1.1 million for the six
months ended June 30, 2005 from approximately $1.5 million for the six months
ended June 30, 2004 primarily due to a lower level of certain assets purchased
in prior years being included in the computation of depreciation expense in 2005
compared to 2004 as they have already been fully depreciated in prior periods.
Loss from Operations
Loss from operations decreased by approximately $1.2 million or 57% to
approximately $0.9 million for the six months ended June 30, 2005 from
approximately $2.1 million for the six months ended June 30, 2004, due primarily
to the increase in revenues and relative decrease in indirect operating
expenses, including depreciation and amortization expenses.
Interest Income, Net
Interest income, net decreased by approximately $31,000 or 23% to
approximately $104,000 for the six months ended June 30, 2005 from approximately
$135,000 for the six months ended June 30, 2004.
Income Taxes, Net
We paid net income taxes of approximately $32,000 for the six months ended
June 30, 2005 compared to approximately $44,000 for the six months ended June
30, 2004.
7
Net Loss
Net loss decreased by approximately $1.1 million or 58% to approximately
$0.8 million for the six months ended June 30, 2005 from approximately $1.9
million for the six months ended June 30, 2004 due to the foregoing factors.
Results of Operations - Three Months Ended June 30, 2005 Compared to Three
Months Ended June 30, 2004
Revenues
Revenues increased approximately $2.2 million or 46.8% to approximately
$6.9 million for the three months ended June 30, 2005 from approximately $4.7
million for the three months ended March 31, 2004. Revenues from enhanced IP
communications services (primarily PC-to-Phone and Broadband Phone) through
iConnectHere decreased slightly by $0.1 million or 5.5% to approximately $1.7
million for the three months ended June 30, 2005 from approximately $1.8 million
for the three months ended June 30, 2004 due primarily to a slightly reduced
volume of PC-to-Phone and Broadband Phone calls. Revenues from enhanced IP
communications services through our reseller and service provider sales efforts
(including sales of our Hosted Communications Solution) increased approximately
$2.3 million or 79.3% to approximately $5.2 million for the three months ended
June 30, 2005 from approximately $2.9 million for the three months ended June
30, 2004, due primarily to an increasing PC-to-Phone and Broadband Phone user
base.
Costs and Operating Expenses
Cost of revenues. Cost of revenues increased by approximately $1.3 million
or 43.3% to approximately $4.3 million for the three months ended June 30, 2005
from approximately $3.0 million for the three months ended June 30, 2004, due
primarily to an increase in the amount of traffic being terminated.
Research and development expenses. Research and development expenses
increased by approximately $0.2 million or 33.3% to approximately $0.8 million
for the three months ended June 30, 2005 from approximately $0.6 million for the
three months ended June 30, 2004, due to higher personnel costs associated with
the development of new services and enhancements to our existing services.
Selling and marketing expenses. Selling and marketing expenses increased
by approximately $0.2 million or 25% to approximately $1 million for the three
months ended June 30, 2005 from approximately $0.8 million for the three months
ended June 30, 2004 due to higher personnel and external marketing related costs
associated with the sales and marketing of our products and services.
General and administrative expenses. General and administrative expenses
increased by approximately $0.2 million or 40% to approximately $0.7 million for
the three months ended June 30, 2005 from approximately $0.5 million for the
three months ended June 30, 2004 due primarily to somewhat higher personnel
costs associated with the increased general and administrative activities
associated with higher transaction volumes.
8
Depreciation and amortization. Depreciation and amortization decreased by
approximately $0.2 million or 28.6% to approximately $0.5 million for the three
months ended June 30, 2005 from approximately $0.7 million for the three months
ended June 30, 2004 primarily due to a lower level of certain assets purchased
in prior years being included in the computation of depreciation expense in 2005
compared to 2004 as they have already been fully depreciated in prior periods.
Loss from Operations
Loss from operations decreased by approximately $0.5 million or 55.6% to
approximately $0.4 million for the three months ended June 30, 2005 from
approximately $0.9 million for the three months ended June 30, 2004, due
primarily to the increase in revenues and relative decrease in indirect
operating expenses, including depreciation and amortization expenses.
Interest Income, Net
Interest income, net decreased by approximately $40,000 or 80% to
approximately $10,000 for the three months ended June 30, 2005 from
approximately $50,000 for the three months ended June 30, 2004.
Income Taxes, Net
We paid net income taxes of approximately $15,000 for the three months
ended June 30, 2005 compared to approximately $6,000 for the three months ended
June 30, 2004.
Net Loss
Net loss decreased by approximately $0.5 million or 55.6% to approximately
$0.4 million for the three months ended June 30, 2005 from approximately $0.9
million for the three months ended June 30, 2004 due to the foregoing factors.
Liquidity and Capital Resources
Since our inception in March 1996, we have incurred significant operating
and net losses, due in large part to the start-up and development of our
operations. As of June 30, 2005, we had an accumulated deficit of approximately
$152 million.
As of June 30, 2005, we had cash and cash equivalents of approximately
$4.9 million, marketable securities and other short-term investments of
approximately $0.4 million, long-term investments of $10 million and working
capital of approximately $1 million. We generated negative cash flow from
operating activities of approximately $0.7 million during the six months ended
June 30, 2005 compared with negative cash flow from operating activities of
approximately $47,000 during the six months ended June 30, 2004. Accounts
receivable were approximately $0.9 million and $0.3 million at June 30, 2005 and
June 30, 2004, respectively.
Our capital expenditures were approximately $0.9 million expended in the
six months ended June 30, 2005 compared to approximately $0.6 million expended
in the six months ended June 30, 2004 as we continued to both make moderate
investments and optimize our overall utilization of our existing domestic and
international network infrastructure.
9
Short-term, we obtain our funding from our utilization of the remaining
proceeds from our initial public offering offset by positive or negative cash
flow from our operations. These proceeds are maintained as cash, cash
equivalents, and short-term investments with an original maturity of twelve
months or less. Based on current trends in our operations, we believe that these
funds will be sufficient to meet our working capital requirements, including
operating losses, and capital expenditure requirements for at least the next
fiscal year, assuming that our business plan is implemented successfully, and
that:
o our recent revenue trends, which reflected an increase in our
higher-margin (primarily PC-to-Phone and Broadband Phone) products
and services, continue to increase;
o our indirect expense trends remain at or near the rates of our
second quarter 2005 rates, which were moderately increased compared
to the past twelve months as we make moderate increases in personnel
to support increased revenue generation activities and through the
continued curtailment of discretionary expenditures, and reduced
network rent and termination rates from our carriers; and
o our net cash-burn rate, which was reduced during the past twelve
months due to the foregoing factors, and eliminated for the first
quarter of 2005, continues to improve throughout the remainder of
2005 and beyond.
To the extent that these trends do not remain steady, or if in the
longer-term we are not able to successfully implement our business strategy, we
may be required to raise additional funds for our ongoing operations. Additional
financing may not be available when needed or, if available, such financing may
not be on terms favorable to us. If additional funds are raised through the
issuance of equity securities, our existing stockholders may experience
significant dilution. In addition, we cannot assure you that any third party
will be willing or able to provide additional capital to us on favorable terms
or at all.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The SEC's rule related to market risk disclosure requires that we describe
and quantify our potential losses from market risk sensitive instruments
attributable to reasonably possible market changes. Market risk sensitive
instruments include all financial or commodity instruments and other financial
instruments (such as investments and debt) that are sensitive to future changes
in interest rates, currency exchange rates, commodity prices or other market
factors. We believe that our exposure to market risk is immaterial. We currently
do not invest in, or otherwise hold, for trading or other purposes, any
financial instruments subject to market risk.
10
Item 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures.
Our principal executive officer (CEO) and principal financial officer
(CFO), with the participation of our management, evaluated the effectiveness of
our disclosure controls and procedures. Based on that evaluation, the CEO and
CFO have concluded that as of the end of the period covered by this report, our
disclosure controls and procedures are effective to provide reasonable assurance
that information required to be disclosed by us in reports that we file or
submit under the Securities and Exchange Act of 1934, as amended, is recorded,
processed, summarized and timely reported as provided in the SEC rules and
forms.
(b) Changes in Internal Controls.
There have been no changes in our internal control over financial
reporting that occurred during the quarter ended June 30, 2005 that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
11
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
Final settlement documentation for litigation relating to a number of
initial public offerings, including our own, is in the process of being
approved. We do not presently expect to make any payments under the pending
settlement. The history of this litigation is as follows:
We, as well as certain of our former officers and directors, have been
named as defendants in a number of purported securities class actions in Federal
District Court for the Southern District of New York, arising out of our initial
public offering in November 1999 (the "IPO"). Various underwriters of the IPO
also are named as defendants in the actions. The complaints allege, among other
things, that the registration statement and prospectus filed with the Securities
and Exchange Commission for purposes of the IPO were false and misleading
because they failed to disclose that the underwriters allegedly (i) solicited
and received commissions from certain investors in exchange for allocating to
them shares of our stock in connection with the IPO and (ii) entered into
agreements with their customers to allocate such stock to those customers in
exchange for the customers agreeing to purchase additional shares in the
aftermarket at predetermined prices.
In July 2002, omnibus motions to dismiss the complaints based on common
legal issues were filed on behalf of all issuers and underwriters. On February
19, 2003, the Court issued an opinion granting in part and denying in part those
motions to dismiss. The complaint against the Company was not dismissed as a
matter of law. A final settlement agreement between the plaintiffs and issuer
defendants has been executed and submitted to the Court for approval. Under the
terms of the proposed settlement agreement, we are not conceding any liability
and we will not bear any expenses associated with the settlement, other than
legal fees we may incur.
We are not a party to any other material litigation and are not aware of
any other pending or threatened litigation that could have a material adverse
effect on us or our business taken as a whole.
Item 6. Exhibits
See Exhibit Index on page 14 for a description of the documents that are filed
as Exhibits to this report on Form 10-Q or incorporated by reference herein.
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this quarterly report on Form 10-Q to be signed on
its behalf by the undersigned thereunto duly authorized.
DELTATHREE, INC.
Date: August 15, 2005 By: /s/ Paul C. White
-----------------
Name: Paul C. White
Title: Chief Financial Officer
13
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
31.1 Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
31.2 Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
32 Certifications of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
14