(X)
|
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
( )
|
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Utah
|
87-0543981
|
(State
or other jurisdiction of incorporation or organization)
|
(IRS
Employer Identification No.)
|
Page
No.
|
|||
PART
I. FINANCIAL INFORMATION
|
|||
Item
1.
|
Financial
Statements
|
||
Unaudited
Condensed Consolidated Balance Sheet as of December 31, 2007 (As
Restated)
|
4
|
||
Unaudited
Condensed Consolidated Statements of Operations for the three months ended
December 31, 2007 and 2006 (As Restated)
|
5
|
||
Unaudited
Condensed Consolidated Statements of Cash Flows for the three months ended
December 31, 2007 and 2006 (As Restated)
|
6
|
||
Unaudited
Notes to Condensed Consolidated Financial Statements (As
Restated)
|
8
|
||
Item
2.
|
Management's
Discussion and Analysis or Plan of Operation
|
19
|
|
Item
3.
|
Controls
and Procedures
|
25
|
|
PART
II. OTHER INFORMATION
|
|||
Item
1.
|
Legal
Proceedings
|
26
|
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
26
|
|
Item
6.
|
Exhibits
and Reports on Form 8-K
|
27
|
|
Signatures
|
30
|
||
Certifications
|
|
1)
|
The
Company reviewed its existing contracts for compliance with its revenue
recognition policies. After reviewing its existing contracts, the Company
determined that $1,300,000 of revenues (with its associated cost of
revenues of $952,341) previously recorded for the year ended September 30,
2007 did not meet the requirements of SAB 104 and EITF
00-21. Of the $1,300,000 of deferred revenue as of September
30, 2007, $33,333 (with its associated cost of revenues of $22,894) was
recognized during the three months ended December 31,
2007.
|
|
2)
|
For
the three months ended December 31, 2007, the Company reported
amortization expense of $211,181 and communication expense of $438,832
related to non-billable units as selling, general and administrative
expenses. A non-billable unit is a TrackerPAL device that did not generate
any monitoring service revenue for the period. Upon further
review, the Company was unable to identify any accounting pronouncements
specifying the appropriate classification of these expenses in the
statement of operations. Therefore, the Company looked to
general practices of similar companies and determined to reclassify these
expenses to cost of revenues. The Company believes this
reclassification is appropriate because the non-billable units do not
directly meet the definition of research and development assets, they are
not promotional assets, and they are not used by the Company for internal
purposes.
|
Previously
Reported
|
As
Restated
|
|||||||
Balance
Sheet Items - 2007:
|
||||||||
Monitoring
equipment, net of accumulated depreciation
|
$ | 2,119,798 | $ | 3,049,245 | ||||
Total
assets
|
21,988,109 | 22,917,556 | ||||||
Deferred
revenue
|
34,894 | 1,301,560 | ||||||
Total
current liabilities
|
11,062,996 | 12,329,662 | ||||||
Accumulated
deficit
|
(135,101,671 | ) | (135,438,890 | ) | ||||
Total
stockholders’ equity
|
3,932,491 | 3,595,272 | ||||||
Total
liabilities and stockholders’ equity
|
21,988,109 | 22,917,556 | ||||||
Statement
of Operations Items - 2007:
|
||||||||
Revenues
|
3,605,545 | 3,638,878 | ||||||
Cost
of revenues
|
2,184,100 | 2,857,007 | ||||||
Selling,
general and administrative expenses
|
4,967,242 | 4,317,229 | ||||||
Net
loss
|
(2,352,383 | ) | (2,341,944 | ) | ||||
Net
loss attributable to common stockholders
|
(2,519,520 | ) | (2,509,081 | ) | ||||
Net
loss per common share – basic and diluted
|
(0.02 | ) | (0.02 | ) | ||||
Statement
of Operations Items - 2006:
|
||||||||
Revenues
|
988,237 | 588,237 | ||||||
Cost
of revenues
|
2,205,393 | 1,930,665 | ||||||
Net
loss
|
(7,813,649 | ) | (7,938,921 | ) | ||||
Net
loss attributable to common stockholders
|
(8,051,505 | ) | (8,176,777 | ) | ||||
Net
loss per common share – basic and diluted
|
(0.10 | ) | (0.10 | ) | ||||
December
31, 2007
|
||||
Assets
|
||||
Current
assets:
|
||||
Cash
|
$ | 7,713,104 | ||
Accounts
receivable, net of allowance for doubtful accounts
of $303,068
|
6,170,561 | |||
Inventories
(note 2)
|
47,059 | |||
Receivables
|
622,927 | |||
Prepaid
expenses
|
217,114 | |||
Total
current assets
|
14,770,765 | |||
Property
and equipment, net of accumulated depreciation and amortization
of $1,680,958 (note 3)
|
2,050,433 | |||
Monitoring
equipment, net of accumulated depreciation and amortization of $2,977,486
(note 4)
|
3,049,245 | |||
Goodwill
and other intangible assets (note 5)
|
2,989,754 | |||
Other
assets
|
57,359 | |||
Total
assets
|
$ | 22,917,556 | ||
Liabilities
and Stockholders’ Equity
|
||||
Current
liabilities:
|
||||
Bank
line of credit (note 6)
|
$ | 3,670,451 | ||
Accounts
payable
|
2,690,536 | |||
Accrued
liabilities (note 7)
|
835,134 | |||
Dividends
payable
|
289,948 | |||
Deferred
revenue
|
1,301,560 | |||
Current
portion of long-term debt (note 8)
|
3,542,033 | |||
Total
current liabilities
|
12,329,662 | |||
Related-party
line of credit (note 9)
|
8,053 | |||
Long-term
debt, net of current portion (note 8)
|
629,518 | |||
Total
liabilities
|
12,967,233 | |||
Minority
interest (note 10)
|
2,765,051 | |||
SecureAlert
Series A Preferred Stock
|
3,590,000 | |||
Stockholders’
equity:
|
||||
Preferred
stock:
|
||||
Series
A, 10% dividend, convertible, non-voting, $0.0001 par value: 40,000 shares
designated; 19 shares outstanding (aggregate liquidation preference of
$450)
|
1 | |||
Series
B, convertible, $0.0001 par value: 2,000,000 shares designated; 10,999
shares outstanding (aggregate liquidation preference of
$32,997)
|
1 | |||
Series
C, convertible, $0.0001 par value: 7,357,144 shares designated; no shares
outstanding (aggregate liquidation preference of $0)
|
- | |||
Common
stock, $0.0001 par value: 175,000,000 shares authorized,
130,515,291 shares outstanding
|
13,052 | |||
Additional
paid-in capital
|
145,096,450 | |||
Deferred
compensation
|
(6,075,342 | ) | ||
Accumulated
deficit
|
(135,438,890 | ) | ||
Total
stockholders’ equity
|
3,595,272 | |||
Total
liabilities and stockholders’ equity
|
$ | 22,917,556 |
Three
Months Ended
|
||||||||
December
31,
|
||||||||
2007
|
2006
|
|||||||
Revenues:
|
||||||||
Products
|
$ | 1,238,971 | $ | 152,854 | ||||
Monitoring
services
|
2,399,907 | 435,383 | ||||||
Total
revenues
|
3,638,878 | 588,237 | ||||||
Cost
of revenues:
|
||||||||
Products
|
693,043 | 93,484 | ||||||
Monitoring
services
|
2,163,964 | 1,837,181 | ||||||
Total
cost of revenues
|
2,857,007 | 1,930,665 | ||||||
Gross
margin (deficit)
|
781,871 | (1,342,428 | ) | |||||
Operating
expenses:
|
||||||||
Selling,
general and administrative expenses (including $2,019,945 and $1,660,636
of compensation expense paid in stock or stock option / warrants,
respectively)
|
4,317,229 | 5,196,926 | ||||||
Research
and development expenses
|
1,040,447 | 1,219,659 | ||||||
Loss
from operations
|
(4,575,805 | ) | (7,759,013 | ) | ||||
Other
income (expense):
|
||||||||
Gain
on sale of intellectual property
|
2,400,000 | - | ||||||
Gain
on revalued registration rights
|
- | 52,500 | ||||||
Minority
interest allocation
|
165,580 | - | ||||||
Interest
income
|
33,189 | 51,521 | ||||||
Interest
expense
|
(375,510 | ) | (284,285 | ) | ||||
Other
income
|
10,602 | 356 | ||||||
Net
loss
|
(2,341,944 | ) | (7,938,921 | ) | ||||
Dividends
on Series A and C preferred stock
|
(167,137 | ) | (237,856 | ) | ||||
Net
loss attributable to common stockholders
|
$ | (2,509,081 | ) | $ | (8,176,777 | ) | ||
Net
loss per common share – basic and diluted
|
$ | (0.02 | ) | $ | (0.10 | ) | ||
Weighted
average common shares outstanding – basic and diluted
|
129,617,000 | 83,018,000 |
Three Months Ended
|
||||||||
December
31,
|
||||||||
2007
|
2006
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net loss
|
$ | (2,341,944 | ) | $ | (7,938,921 | ) | ||
Adjustments
to reconcile net loss to net cash (used in) provided by
operating
activities:
|
||||||||
Depreciation
and amortization
|
441,165 | 471,676 | ||||||
Common
stock issued for services
|
621,085 | 557,550 | ||||||
Amortization
of deferred financing and consulting costs
|
1,393,656 | 205,320 | ||||||
Gain
on registration rights liability
|
- | (52,500 | ) | |||||
Stock
options vested during the period and/or issued for
services
|
183,610 | 982,567 | ||||||
Increase
in related-party line of credit for services
|
204,509 | 150,639 | ||||||
Minority
interest expense, net
|
(165,582 | ) | - | |||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable, net
|
(638,080 | ) | (633,604 | ) | ||||
Interest
receivable
|
(9,068 | ) | 15,604 | |||||
Inventories
and monitoring equipment
|
27,194 | (390,122 | ) | |||||
Prepaid
expenses and other assets
|
102,134 | 2,095,248 | ||||||
Accounts
payable
|
(799,393 | ) | 3,586,883 | |||||
Accrued
liabilities
|
(261,826 | ) | 1,116,701 | |||||
Deferred
revenue
|
(42,199 | ) | 385,681 | |||||
Net
cash (used in) provided by operating activities
|
(1,284,739 | ) | 552,722 | |||||
Cash
flows from investing activities:
|
||||||||
Purchase
of property and equipment
|
(43,313 | ) | - | |||||
Purchase
of monitoring equipment
|
- | (7,148,146 | ) | |||||
Net
cash used in investing activities
|
(43,313 | ) | (7,148,146 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Payment
of accrued SecureAlert Series A Preferred Stock dividends
|
- | (20,877 | ) | |||||
Payments
on related-party line of credit
|
(436,219 | ) | (128,839 | ) | ||||
Payments
on bank line of credit
|
(188,534 | ) | (26,796 | ) | ||||
Payments
on notes payable
|
(78,644 | ) | - | |||||
Cash
acquired through acquisitions
|
160,898 | - | ||||||
Proceeds
from sale of common stock
|
- | 6,000,000 | ||||||
Proceeds
from issuance of subsidiary stock
|
1,575,000 | - | ||||||
Proceeds
from exercise of warrants
|
2,452,380 | 75,000 | ||||||
Net
cash provided by financing activities
|
3,484,881 | 5,898,488 | ||||||
Net
increase (decrease) in cash
|
2,156,829 | (696,936 | ) | |||||
Cash,
beginning of period
|
5,556,275 | 5,872,529 | ||||||
Cash,
end of period
|
$ | 7,713,104 | $ | 5,175,593 |
Three
Months Ended
|
||||||||
December
31,
|
||||||||
2007
|
2006
|
|||||||
Cash
paid for interest
|
$ | 197,104 | $ | 196,834 | ||||
Supplemental
schedule of non-cash investing and financing activities:
|
||||||||
Notes
payable issued in acquisition of Midwest Monitoring & Surveillance,
Inc.
|
1,800,000 | - | ||||||
Note
payable issued in acquisition of Court Programs, Inc., Court Programs of
Florida, Inc., and Court Programs of Northern Florida,
Inc.
|
1,147,500 | - | ||||||
Issuance
of shares of common stock in exchange for shares of Series A preferred
stock
|
- | 1 | ||||||
Issuance
of shares of common stock in exchange for shares of Series B preferred
stock
|
1 | 4 | ||||||
Issuance
of Preferred Series A for stock dividends
|
- | 237,856 | ||||||
Exercise
of options for receivable
|
- | 1,580,464 | ||||||
SecureAlert
Series A dividends
|
167,035 | 91,542 | ||||||
Penalty
shares issued for accrued liability
|
- | 291,000 |
December 31,
2006
|
|
Risk
free interest rate
|
4.69%
|
Expected
life
|
5
Years
|
Dividend
yield
|
n/a
|
Volatility
|
145%
|
Weighted
|
|||||||||||||
Weighted
|
Average
|
||||||||||||
Shares
|
Average
|
Remaining
|
Aggregate
|
||||||||||
Under
|
Exercise
|
Contractual
|
Intrinsic
|
||||||||||
Option
|
Price
|
Life
|
Value
|
||||||||||
Outstanding
at September 30, 2007
|
3,295,000 | $ | 0.64 | ||||||||||
Granted
|
- | - | |||||||||||
Exercised
|
(950,000 | ) | 0.63 | ||||||||||
Forfeited
|
- | - | |||||||||||
Expired
|
- | - | |||||||||||
Outstanding
at December 31, 2007
|
2,345,000 | $ | 0.65 |
3.80
Years
|
6,714,500 | ||||||||
Exercisable
at December 31, 2007
|
190,000 | $ | 1.04 |
3.91
Years
|
469,749 |
Weighted
|
||||||||
Average
|
||||||||
Non-Vested
|
Grant
Date
|
|||||||
Options
|
Fair
Value
|
|||||||
Non-vested
at September 30, 2007
|
2,155,000 | $ | 0.61 | |||||
Granted
|
- | - | ||||||
Vested
|
- | - | ||||||
Forfeited
|
- | - | ||||||
Non-vested
at December 31, 2007
|
2,155,000 | $ | 0.61 |
Weighted
|
|||||||||||||
Weighted
|
Average
|
||||||||||||
Shares
|
Average
|
Remaining
|
Aggregate
|
||||||||||
Under
|
Exercise
|
Contractual
|
Intrinsic
|
||||||||||
Option
|
Price
|
Life
|
Value
|
||||||||||
Outstanding
at September 30, 2006
|
3,607,500 | $ | 0.63 | ||||||||||
Granted
|
150,000 | 1.85 | |||||||||||
Exercised
|
(225,000 | ) | 0.58 | ||||||||||
Forfeited
|
- | - | |||||||||||
Expired
|
- | - | |||||||||||
Outstanding
at December 31, 2006
|
3,532,500 | $ | 0.69 |
4.12
Years
|
3,261,475 | ||||||||
Exercisable
at December 31, 2006
|
1,327,500 | $ | 1.22 |
4.11
Years
|
1,094,325 |
Weighted
|
||||||||
Average
|
||||||||
Non-Vested
|
Grant
Date
|
|||||||
Options
|
Fair
Value
|
|||||||
Non-vested
at September 30, 2006
|
3,095,001 | $ | 0.56 | |||||
Granted
|
- | - | ||||||
Vested
|
(890,000 | ) | 0.56 | |||||
Forfeited
|
- | - | ||||||
Non-vested
at December 31, 2006
|
2,205,001 | $ | 0.56 |
(2)
|
INVENTORIES
|
(3)
|
PROPERTY AND
EQUIPMENT
|
Property
and equipment
|
$ | 3,731,391 | ||
Less: accumulated
depreciation
|
(1,680,958 | ) | ||
Total
|
$ | 2,050,433 |
Monitoring
equipment
|
$ | 6,026,731 | ||
Less: accumulated
depreciation
|
(2,977,486 | ) | ||
Total
|
$ | 3,049,245 |
Goodwill
and other intangibles assets
|
||||
Goodwill
|
||||
Midwest
|
$ | 78,585 | ||
Court
Programs
|
587,386 | |||
Other
intangible assets
|
||||
Midwest
|
1,699,275 | |||
Court
Programs
|
624,508 | |||
Total
goodwill and other intangible assets
|
$ | 2,989,754 |
Three
Months Ended
|
||||||||
December
31,
|
||||||||
2007
|
2006
|
|||||||
Revenues:
|
||||||||
Products
|
$ | 1,238,971 | $ | 152,854 | ||||
Monitoring
services
|
3,317,846 | 1,694,084 | ||||||
Total
revenues
|
4,556,817 | 1,846,938 | ||||||
Cost
of revenues:
|
||||||||
Products
|
693,043 | 93,484 | ||||||
Monitoring
services
|
2,654,527 | 2,791,922 | ||||||
Total
cost of revenues
|
3,347,570 | 2,885,406 | ||||||
Gross
margin (deficit)
|
1,209,247
|
(1,038,468
|
)
|
|||||
Operating
expenses:
|
||||||||
Selling,
general and administrative expenses
|
4,769,128 | 5,796,809 | ||||||
Research
and development expenses
|
1,040,447 | 1,219,659 | ||||||
Loss
from operations
|
(4,600,328 | ) | (8,054,936 | ) | ||||
Other
income (expense):
|
||||||||
Gain
on sale of intellectual property
|
2,400,000 | - | ||||||
Gain
on revalued registration rights
|
- | 52,500 | ||||||
Minority
interest allocation
|
165,580 | - | ||||||
Other
income
|
10,602 | 356 | ||||||
Interest
income
|
33,189 | 51,521 | ||||||
Interest
expense
|
(391,665 | ) | (315,636 | ) | ||||
Net
loss
|
(2,382,622 | ) | (8,266,195 | ) | ||||
Dividends
on Series A and C preferred stock
|
(167,137 | ) | (237,856 | ) | ||||
Net
loss attributable to common stockholders
|
$ | (2,549,759 | ) | $ | (8,504,051 | ) | ||
Net
loss per common share – basic and diluted
|
$ | (0.02 | ) | $ | (0.10 | ) | ||
Weighted
average common shares outstanding – basic and diluted
|
130,267,000 | 83,018,000 |
Accrued
payroll, taxes and employee benefits
|
$ | 243,581 | ||
Accrued
consulting costs
|
126,500 | |||
Accrued
communication costs
|
113,935 | |||
Accrued
interest
|
83,420 | |||
Accrued
engineering costs
|
68,460 | |||
Accrued
bonuses and directors fees
|
55,000 | |||
Accrued
rental expenses
|
55,000 | |||
Accrued
monitoring center costs
|
32,170 | |||
Accrued
professional expenses
|
22,377 | |||
Accrued
commissions
|
15,000 | |||
Other
accrued expenses
|
19,691 | |||
Total
|
$ | 835,134 |
Notes
payable due to three individuals for the acquisition of
Midwest. The notes are due January 20,
2008. Subsequent to December 31, 2007, the Company paid off
these notes.
|
$ | 1,800,000 | ||
Note
payable due to an individual for the acquisition of Court
Programs. The note is due January 20,
2008. Subsequent to December 31, 2007, the Company paid off
this note.
|
1,147,500 | |||
Notes
payable to a financial institution bearing interest at 9%. The
notes mature in June 2011 and June 2016. The notes are secured
by property.
|
305,845 | |||
Note
payable due to the Small Business Association (“SBA”). The note
bears interest at 4.17% and matures on April 6, 2037.
|
233,081 | |||
Notes
payable for monitoring equipment. The notes bear interest at
10% and mature December 2008 and January 2009. The notes are
secured by the monitoring equipment.
|
215,928 | |||
Unsecured
notes payable to former SecureAlert stockholders, with interest at 5%,
payable in installments of $80,000 per month until paid in
full. These notes are currently in default, although these
notes are subject to an offset provision which has never been provided to
the Company.
|
169,676 | |||
Automobile
loans with several financial institutions secured by the
vehicles. Interest rates range between 4.65% and 15.96%, due
between November 2008 and November 2011.
|
114,272 | |||
Notes
payable to three stockholders of Midwest. Notes bear interest
at rates ranging between 5% and 10% maturing on February
2013.
|
104,523 | |||
Unsecured
revolving line of credit with a bank, with interest at
14.24%.
|
43,010 | |||
Unsecured
revolving line of credit with a bank, with interest at
8.85%.
|
37,716 | |||
Total
debt obligations
|
4,171,551 | |||
Less
current portion
|
3,542,033 | |||
Long-term
portion
|
$ | 629,518 |
Minority
Interest
|
||||
Volu-Sol
Reagents
|
$ | 2,789,945 | ||
Midwest
|
58,321 | |||
Court
Programs
|
(83,215 | ) | ||
Total
|
$ | 2,765,051 |
|
·
|
130,000
shares were issued for services performed for a value of
$621,085.
|
|
·
|
15,000
shares were issued from Series B Preferred Stock
conversions.
|
|
·
|
2,854,453
shares were issued from the exercise of
warrants.
|
|
·
|
175,753
shares were issued for dividends on SecureAlert Series A Preferred
stock.
|
Three Months Ended
|
||||||||
December
31,
|
||||||||
2007
|
2006
|
|||||||
Sales
to external customers:
|
||||||||
Electronic
monitoring
|
$ | 3,469,286 | $ | 435,383 | ||||
Reagents
|
169,592 | 152,854 | ||||||
$ | 3,638,878 | $ | 588,237 | |||||
Loss
from operations:
|
||||||||
Electronic
monitoring
|
$ | (2,133,865 | ) | $ | (4,825,688 | ) | ||
Reagents
|
(284,246 | ) | (66,722 | ) | ||||
Other
(unallocated)
|
(2,157,694 | ) | (2,866,603 | ) | ||||
$ | (4,575,805 | ) | $ | (7,759,013 | ) | |||
As
of
|
||||||||
Identifiable
assets:
|
December
31, 2007
|
|||||||
Electronic
monitoring
|
$ | 14,892,645 | ||||||
Reagents
|
2,494,825 | |||||||
Other
(unallocated)
|
5,530,086 | |||||||
Total
assets
|
$ | 22,917,556 | ||||||
|
1)
|
Issued
212,000 shares of common stock and paid cash of $300,000 as payment in
full on the note payable in connection with the acquisition of Court
Programs.
|
|
2)
|
Issued
438,000 shares of common stock and paid cash of $1,800,000 as payment in
full on the $1,800,000 notes payable in connection with the acquisition of
Midwest.
|
|
3)
|
Issued
345,755 shares of common stock for services
rendered.
|
|
4)
|
Issued
10,000 shares upon the exercise of options for cash proceeds of
$6,000.
|
|
5)
|
Sold
3,000,000 shares of Volu-Sol common stock for $2,400,000 in
cash.
|
|
.
|
December 31,
2006
|
|
Risk
free interest rate
|
4.69%
|
Expected
life
|
5
Years
|
Dividend
yield
|
n/a
|
Volatility
|
145%
|
Weighted
|
|||||||||||||
Weighted
|
Average
|
||||||||||||
Shares
|
Average
|
Remaining
|
Aggregate
|
||||||||||
Under
|
Exercise
|
Contractual
|
Intrinsic
|
||||||||||
Option
|
Price
|
Life
|
Value
|
||||||||||
Outstanding
at September 30, 2007
|
3,295,000 | $ | 0.64 | ||||||||||
Granted
|
- | - | |||||||||||
Exercised
|
(950,000 | ) | 0.63 | ||||||||||
Forfeited
|
- | - | |||||||||||
Expired
|
- | - | |||||||||||
Outstanding
at December 31, 2007
|
2,345,000 | $ | 0.65 |
3.80
Years
|
6,714,500 | ||||||||
Exercisable
at December 31, 2007
|
190,000 | $ | 1.04 |
3.91
Years
|
469,749 |
Weighted
|
||||||||
Average
|
||||||||
Non-Vested
|
Grant
Date
|
|||||||
Options
|
Fair
Value
|
|||||||
Non-vested
at September 30, 2007
|
2,155,000 | $ | 0.61 | |||||
Granted
|
- | - | ||||||
Vested
|
- | - | ||||||
Forfeited
|
- | - | ||||||
Non-vested
at December 31, 2007
|
2,155,000 | $ | 0.61 |
Selling,
General and Administrative Expenses
|
Interest
Income and Expense
|
|
1)
|
Issued
212,000 shares of common stock and paid off the $300,000 note payable in
connection with the acquisition of Court
Programs.
|
|
2)
|
Issued
438,000 shares of common stock and paid off the $1,800,000 notes payable
in connection with the acquisition of
Midwest.
|
|
3)
|
Issued
345,755 shares of common stock for services
rendered.
|
|
4)
|
Issued
10,000 shares upon the exercise of options for cash proceeds of
$6,000.
|
|
5)
|
Sold
3,000,000 shares of Volu-Sol for $2,400,000 in
cash.
|
|
.
|
|
·
|
130,000
shares were issued for services performed for a value of
$621,085. These shares were issued without registration under
the Securities Act of 1933, as amended (“Securities Act”), in reliance on
Section 4(2) of the Securities Act and the rules and regulations
promulgated thereunder. In each case, the shares were issued
pursuant to privately negotiated transactions with individuals or entities
who had provided service to the Company; there was no public offering of
the securities, no general solicitation or advertising was made or done in
connection with the issuances, and the shares were issued in paper
certificate form with appropriate restrictive legends prominently affixed
on the certificates.
|
|
·
|
15,000
shares upon Series B Preferred Stock conversions. These shares
were issued without registration under the Securities Act in reliance on
Sections 3(a)(9) and 4(2) of the Securities Act and the rules and
regulations promulgated thereunder. The recipients of the
common stock were accredited investors and were already security holders
of the Company. The common shares were issued pursuant to the
terms of the rights and preferences of the preferred class of securities
that were converted, and there was no public offering of
securities. Additionally, no general solicitation or general
advertising was made or done in connection with the issuances, and no cash
consideration was paid in connection with the conversion of the preferred
stock.
|
|
·
|
2,854,453
shares upon the exercise of warrants. These shares were issued
without registration under the Securities Act in reliance on Section 4(2)
of the Securities Act and the rules and regulations promulgated
thereunder. There was no public offering of securities in
connection with these issuances. Additionally, no general
solicitation or advertising was done in connection with the issuance, and
the shares issued upon exercise of the warrants were issued in paper
certificate form, with appropriate restrictive legends prominently affixed
on the certificates.
|
|
·
|
175,753
shares were issued for dividends on SecureAlert Series A Preferred stock.
These shares were issued without registration under the Securities Act in
reliance on Sections 3(a)(9) and 4(2) of the Securities Act and the rules
and regulations promulgated thereunder. The recipients of the
common stock were accredited investors and were already security holders
of the Company. The common shares were issued pursuant to the
terms of the rights and preferences of the preferred class of securities
that were converted, and there was no public offering of
securities. Additionally, no general solicitation or general
advertising was made or done in connection with the issuances, and no cash
consideration was paid in connection with the conversion of the preferred
stock.
|
|
3.01
|
Articles
of Incorporation (incorporated by reference to the Company's Registration
Statement and Amendments thereto on Form 10-SB, effective December 1,
1997).
|
|
3.01(1)
|
Amendment
to Articles of Incorporation for Change of Name (previously filed as
Exhibit on Form 10-KSB for the year ended September 30,
2001)
|
|
3.01(2)
|
Amendment
to Articles of Incorporation Amending Rights and Preferences of Series A
Preferred Stock (previously filed as Exhibit on Form 10-KSB for the year
ended September 30, 2001)
|
|
3.01(3)
|
Amendment
to Articles of Incorporation Adopting Designation of Rights and
Preferences of Series B Preferred Stock (previously filed as Exhibit on
Form 10-QSB for the six months ended March 31,
2002)
|
|
3.01(4)
|
Certificate
of Amendment to the Designation of Rights and Preferences Related to
Series A 10% Cumulative Convertible Preferred Stock of RemoteMDx, Inc.
(incorporated by reference to the Company’s annual report on Form 10-KSB
for the year ended September 30,
2001)
|
|
3.01(5)
|
Certificate
of Amendment to the Designation of Rights and Preferences Related to
Series C 8% Convertible Preferred Stock of RemoteMDx, Inc. (incorporated
by reference to the Company’s Current Report on Form 8-K, filed with the
Commission on March 24, 2006)
|
|
3.01(6)
|
Articles
of Amendment to Articles of Incorporation filed July 12, 2006 (previously
filed as exhibits to the Company’s current report on Form 8-K filed July
18, 2006, and incorporated herein by
reference).
|
|
3.02
|
Bylaws
(incorporated by reference to the Company’s Registration Statement on Form
10-SB, effective December 1, 1997)
|
|
3.03
|
Articles
of Amendment to the Fourth Amended and Restated Designation of Right and
Preferences of Series A 10% Convertible Non-Voting Preferred Stock of
RemoteMDx, Inc. (previously filed as Exhibit on Form 10-QSB for the nine
months ended June 30, 2007, filed in August
2007).
|
|
3.04
|
Articles
of Amendment to the Designation of Right and Preferences of Series A
Convertible Redeemable Non-Voting Preferred Stock of SecureAlert, Inc.
(previously filed as Exhibit on Form 10-QSB for the nine months ended June
30, 2007, filed in August 2007).
|
|
4.01
|
2006
Equity Incentive Award Plan (previously filed in August 2006 the Form
10-QSB for the nine months ended June 30,
2006)
|
|
10.01
|
Distribution
and Separation Agreement (incorporated by reference to the Company's
Registration Statement and Amendments thereto on Form 10-SB, effective
December 1, 1997).
|
|
10.02
|
1997
Stock Incentive Plan of the Company, (incorporated by reference to the
Company’s Registration Statement and Amendments thereto on Form 10-SB,
effective December 1, 1997).
|
|
10.03
|
1997
Transition Plan (incorporated by reference to the Company’s Registration
Statement and Amendments thereto on Form 10-SB, effective December 1,
1997).
|
|
10.04
|
Securities
Purchase Agreement for $1,200,000 of Series A Preferred Stock
(incorporated by reference to the Company’s Registration Statement and
Amendments thereto on Form 10-SB, effective December 1,
1997)
|
|
10.05
|
Loan
Agreement (as amended) dated June 2001 between ADP Management and the
Company (incorporated by reference to the Company’s annual report on Form
10-KSB for the year ended September 30,
2001)
|
|
10.06
|
Loan
Agreement (as amended and extended) dated March 5, 2002 between ADP
Management and the Company, effective December 31, 2001 (filed as an
exhibit to the Company’s quarterly report on Form 10-QSB for the quarter
ended December 31, 2001)
|
|
10.07
|
Agreement
with ADP Management, Derrick and Dalton (April 2003) (previously filed as
Exhibit on Form 10-QSB for the six months ended March 31,
2003)
|
|
10.08
|
Security
Agreement between Citizen National Bank and the Company (previously filed
on Form 8-K in July 2006).
|
|
10.09
|
Promissory
Note between Citizen National Bank and the Company (previously filed on
Form 8-K in July 2006).
|
|
10.10
|
Common
Stock Purchase Agreement dated as of August 4, 2006 (previously filed as
an exhibit to the Company’s current report on Form 8-K filed August 7,
2006 and incorporated herein by
reference).
|
|
10.11
|
Change
in Terms Agreement between Citizen National Bank and the Company
(previously filed as Exhibit on Form 10-KSB for the year ended September
30, 2006)
|
|
10.12
|
Securities
Purchase Agreement between the Company and VATAS Holding GmbH, a German
limited liability company (previously filed on Form 8-K in November
2006).
|
|
10.13
|
Common
Stock Purchase Warrant between the Company and VATAS Holding GmbH dated
November 9, 2006 (previously filed as Exhibit on Form 10-QSB for the three
months ended December 31, 2006, filed in February
2007).
|
|
10.14
|
Settlement
Agreement and Mutual Release between the Company and Michael Sibbett and
HGR Enterprises, LLC, dated as of February 1, 2007 (previously filed as
Exhibit on Form 10-QSB for the three months ended December 31, 2006, filed
in February 2007).
|
|
10.15
|
Distributor
Sales, Service and License Agreement between the Company and Seguridad
Satelital Vehicular S.A. de C.V., dated as of February 5, 2007 (previously
filed as Exhibit on Form 10-QSB for the three months ended December 31,
2006, filed in February 2007).
|
|
10.16
|
Distributor
Agreement between the Company and QuestGuard, dated as May 31,
2007. Portions of this exhibit were redacted pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission (previously filed as Exhibit on Form 10-QSB for the nine months
ended June 30, 2007, filed in August
2007).
|
|
10.17
|
Stock
Purchase Agreement between the Company and Midwest Monitoring &
Surveillance, Inc., dated effective December 1, 2007 (previously filed as
Exhibit on Form 10-KSB for the year ended September 30, 2007, filed in
January 2008).
|
|
10.18
|
Stock
Purchase Agreement between the Company and Court Programs, Inc., Court
Programs of Florida Inc., and Court Programs of Northern Florida, Inc.,
dated effective December 1, 2007 (previously filed as Exhibit on Form
10-KSB for the year ended September 30, 2007, filed in January
2008).
|
|
10.19
|
Sub-Sublease
Agreement between the Company and Cadence Design Systems, Inc., a Delaware
corporation, dated March 10, 2005 (previously filed as Exhibit on Form
10-KSB/A for the year ended September 30, 2007, filed in April
2008).
|
|
10.20
|
Patent
Assignment Agreement between Futuristic Medical Devices, LLC, dated
September 14, 2007 (previously filed as Exhibit on Form 10-KSB/A for the
year ended September 30, 2007, filed in April
2008).
|
|
10.21
|
Patent
Assignment Agreement between Futuristic Medical Devices, LLC, dated
September 14, 2007 (previously filed as Exhibit on Form 10-KSB/A for the
year ended September 30, 2007, filed in April
2008).
|
|
10.22
|
Patent
Assignment Agreement between Futuristic Medical Devices, LLC, dated
September 14, 2007 (previously filed as Exhibit on Form 10-KSB/A for the
year ended September 30, 2007, filed in April
2008).
|
|
10.23
|
Patent
Assignment Agreement between Futuristic Medical Devices, LLC, dated
December 20, 2007 (previously filed as Exhibit on Form 10-KSB/A for the
year ended September 30, 2007, filed in April
2008).
|
|
10.24
|
Stock
Purchase Agreement (sale of Volu-Sol Reagents Corporation shares to
Futuristic Medical, LLC), dated January 15, 2008, including voting
agreement (previously filed as Exhibit on Form 10-KSB/A for the year ended
September 30, 2007, filed in April
2008).
|
|
14
|
Code
of Business Conduct and Ethics (previously filed as Exhibit on Form 10-KSB
for the year ended September 30, 2007, filed in January
2008).
|
|
31.1
|
Certification
of President and Chief Executive Officer under Section 302 of
Sarbanes-Oxley Act of 2002
|
|
31.2
|
Certification
of Chief Financial Officer under Section 302 of Sarbanes-Oxley Act of
2002
|
|
32
|
Certification
under Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. section
1350)
|
REMOTEMDX,
INC.
|
|||
Date:
June 18, 2008
|
By:
|
/s/ David G. Derrick
|
|
David
G. Derrick,
|
|||
Chief
Executive Officer
|
|||
Date:
June 18, 2008
|
By:
|
/s/ Michael G. Acton
|
|
Michael
G. Acton,
|
|||
Principal
Accounting Officer
|