-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GL2OpnCfizmTN3dV85g/ZgMyeUmghkM1fhvBHTV5kPcHNEBGl6E+nN842kIu+f1c ZzCJH73Y50RyLVS0JRVoQg== 0001144204-04-020041.txt : 20041122 0001144204-04-020041.hdr.sgml : 20041122 20041122145858 ACCESSION NUMBER: 0001144204-04-020041 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040930 FILED AS OF DATE: 20041122 DATE AS OF CHANGE: 20041122 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Corridor Communications Corp CENTRAL INDEX KEY: 0001069389 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATIONS EQUIPMENT, NEC [3669] IRS NUMBER: 330821967 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-29645 FILM NUMBER: 041160456 BUSINESS ADDRESS: STREET 1: 3450 HILLVIEW AVENUE CITY: PALO ALTO STATE: CA ZIP: 94304 BUSINESS PHONE: 6508550200 MAIL ADDRESS: STREET 1: 3450 HILLVIEW AVENUE CITY: PALO ALTO STATE: CA ZIP: 94304 FORMER COMPANY: FORMER CONFORMED NAME: AMNIS SYSTEMS INC DATE OF NAME CHANGE: 20001018 FORMER COMPANY: FORMER CONFORMED NAME: GRAFFITI-X INC DATE OF NAME CHANGE: 20000114 10QSB 1 v09139.txt 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 _______________ 000-29645 (Commission file number) CORRIDOR COMMUNICATIONS CORP. (Exact name of small business issuer as specified in its charter) Delaware 94-3402831 (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) 9333 East Main Street, Suite 122, Mesa, Arizona 85207 (Address of principal executive offices) (480) 380-5855 (Issuer's telephone number) 1235 Pear Avenue, Suite 109 Mountain View, California 94043 (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: As of November 18, 2004 - 922,651,613 shares of common stock Transitional Small Business Disclosure Format (check one): Yes |_| No |X| CORRIDOR COMMUNICATIONS CORP. Index
Page Number ------ PART I. FINANCIAL INFORMATION 2 Item 1. Consolidated Financial Statements (unaudited) 2 Consolidated Balance Sheet as of September 30, 2004 (unaudited) 2 Consolidated Statements of Operations for the three and nine months ended September 30, 2004 and 2003 (unaudited) 3 Consolidated Statements of Cash Flows for the nine months ended September 30, 2004 and 2003 (unaudited) 4 Notes to Consolidated Financial Statements (unaudited) 5 Item 2. Management's Discussion and Analysis or Plan of Operations 14 Item 3. Controls and Procedures 18 PART II. OTHER INFORMATION Item 1. Legal Proceedings 19 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 19 Item 3. Defaults Upon Senior Securities 19 Item 4. Submission of Matters to a Vote of Security Holders 19 Item 5. Other Information 19 Item 6. Exhibits 20 SIGNATURES 20
1 PART I. FINANCIAL INFORMATION Item 1. Financial Statements
Corridor Communications Corp. and Subsidiaries (formerly Amnis Systems, Inc.) Consolidated Balance Sheet September 30, 2004 ==================================================================================================================================== (unaudited) - ------------------------------------------------------------------------------------------------------------------------------------ Assets Current Assets: Cash and cash equivalents $ 81,421 Accounts receivable, net of allowance for doubtful accounts of $ 146,441 225,707 Inventories, net of reserve of $905,762 33,501 Prepaid expenses and other current assets 33,047 Debt issuance costs 10,051 - ------------------------------------------------------------------------------------------------------------------------------------ Total current assets 383,727 - ------------------------------------------------------------------------------------------------------------------------------------ Property and Equipment, net of accumulated depreciation of $14,661 670,137 Franchise, net of accumulated amortization of $2,450 46,550 Customer list, net of accumulated amortization of $49,267 1,362,862 Debt Issuance Costs 37,841 Goodwill 11,542 - ------------------------------------------------------------------------------------------------------------------------------------ $ 2,512,659 - ------------------------------------------------------------------------------------------------------------------------------------ Liabilities and Stockholders' Deficit Current Liabilities: Secured promissory note, net of discount of $32,705 $ 267,295 Stockholders' notes payable 155,000 Notes payable, current portion 7,335 Accounts payable 2,067,976 Accrued salaries 1,597,036 Accrued vacation 231,128 Accrued interest payable 713,746 Customer deposits 19,870 Convertible notes payable, current portion (net of discount of $170,284) 2,045,390 Deferred revenue 260,628 Other accrued expenses 928,998 - ------------------------------------------------------------------------------------------------------------------------------------ Total current liabilities 8,294,402 Long-Term Liabilities: Deferred revenue 79,008 Note payable, long-term portion 53,960 Convertible note payable, long-term portion (net of discount of $375,775) 599,802 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 9,027,172 - ------------------------------------------------------------------------------------------------------------------------------------ Stockholders' Deficit: Preferred stock, $0.0001 par value; 20,000,000 authorized Series A preferred stock; 1,457 shares issued and outstanding 2,241,000 Common stock, $0.0001 par value: Authorized - 1,600,000,000 shares Issued and outstanding - 787,086,499 shares 78,708 Additional paid-in capital 34,007,698 Accumulated deficit (42,841,919) - ------------------------------------------------------------------------------------------------------------------------------------ Total stockholders' deficit (6,514,513) - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities and stockholder's deficit $ 2,512,659 - ------------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated financial statements. 2
Corridor Communications Corp. and Subsidiaries (formerly Amnis Systems, Inc.) Consolidated Statements of Operations ==================================================================================================================================== September 30, September 30, ---------------------------- ----------------------------- For the three and nine months ended 2004 2003 2004 2003 - ------------------------------------------------------------------------------------------------------------------------------------ (unaudited) (unaudited) (unaudited) (unaudited) Sales $ 283,242 $ -- $ 283,242 $ -- Cost of Goods Sold 53,616 -- 53,616 -- - ------------------------------------------------------------------------------------------------------------------------------------ Gross profit 229,626 -- 229,626 -- - ------------------------------------------------------------------------------------------------------------------------------------ Operating Expenses General and administrative 1,035,519 -- 1,641,805 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total operating exenses 1,035,519 -- 1,641,805 -- - ------------------------------------------------------------------------------------------------------------------------------------ Loss from operations (805,893) -- (1,412,179) -- Other Income (Expense) Interest expense, net (178,625) (132,911) (498,961) (338,113) Amortization of discount on convertible notes payable (163,875) (297,764) (844,714) (713,256) Financing costs (146,654) (200,747) (214,137) (1,091,737) Change in fair value of detachable warrants -- 211,361 -- (135,459) Other, net -- (931) -- (1,316) - ------------------------------------------------------------------------------------------------------------------------------------ Total other income (expense) (489,154) (420,992) (1,557,812) (2,279,881) - ------------------------------------------------------------------------------------------------------------------------------------ Net loss before taxes and discontinued operations (1,295,047) (420,992) (2,969,991) (2,279,881) - ------------------------------------------------------------------------------------------------------------------------------------ Income Tax -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net loss from continuing operations (1,295,047) (420,992) (2,969,991) (2,279,881) Discontinued operations Loss from operations of discontinued operations (59,109) (1,216,703) (1,219,732) (2,923,962) - ------------------------------------------------------------------------------------------------------------------------------------ Net loss (1,354,156) (1,637,695) (4,189,723) (5,203,843) Preferred stock dividends (57,847) -- (57,847) -- - ------------------------------------------------------------------------------------------------------------------------------------ Net loss attributed to common stockholders $ (1,412,003) $ (1,637,695) $ (4,247,570) $ (5,203,843) - ------------------------------------------------------------------------------------------------------------------------------------ Basic and Diluted Loss per Common Share Continuing operations $ (0.00) $ (0.00) $ (0.01) $ (0.02) Discontinued operations (0.00) (0.01) (0.00) (0.03) - ------------------------------------------------------------------------------------------------------------------------------------ $ (0.00) $ (0.01) $ (0.01) $ (0.05) - ------------------------------------------------------------------------------------------------------------------------------------ Weighted average shares outstanding - basic & diluted 633,498,563 123,033,241 444,913,593 97,765,671 - ------------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated financial statements. 3
Corridor Communications Corp. and Subsidiaries (formerly Amnis Systems, Inc.) Consolidated Statements of Cash Flows ==================================================================================================================================== September 30, -------------------------------- For the nine months ended 2004 2003 - ------------------------------------------------------------------------------------------------------------------------------------ (unaudited) (unaudited) Cash Flows from Operating Activities: Net loss $(4,189,723) $(5,203,843) Adjustments to reconcile net loss to net cash used in operating activities: Common stock and options issued for services 1,297,985 701,954 Value of warrants issued for financing costs 179,240 -- Employee salaries exchanged for stock 62,522 29,598 Depreciation and amortization 66,378 42,015 Amortization of discounts on convertible notes payable 844,714 713,256 Amortization of debt issuance costs 110,583 28,632 Loss on disposal of property and equipment -- 945 Change in fair value of warrant liability -- 135,459 Changes in operating assets and liabilities: Accounts receivable (122,154) 38,770 Inventories 12,499 (7,322) Prepaid expenses and other assets 35,480 (31,494) Accounts payable 87,738 52,084 Accrued salaries 68,499 992,484 Accrued vacation (14,668) 23,172 Accrued interest payable 390,673 339,868 Customer deposits (480) -- Deferred revenue 148,991 6,289 Other accrued expenses (131,085) 1,146,642 - ------------------------------------------------------------------------------------------------------------------------------------ Net cash used in operating activities (1,152,808) (991,491) - ------------------------------------------------------------------------------------------------------------------------------------ Cash Flows from Investing Activities: Payments for acquisition of companies, net (1,756,235) -- Purchases of property and equipment (24,693) (23,503) - ------------------------------------------------------------------------------------------------------------------------------------ Net cash used in investing activities (1,780,928) (23,503) - ------------------------------------------------------------------------------------------------------------------------------------ Cash Flows from Financing Activities: Proceeds from financing obligations collateralized by accounts receivable - -- 891,702 Payments on financing obligations collateralized by accounts receivable -- (1,277,971) Payment of debt issuance costs -- (147,500) Payments on secured promissory notes (500,000) -- Payment on notes payable (4,277) -- Proceeds from issuance of common stock -- -- Proceeds from convertible debentures -- 1,250,000 Proceeds from sale of Series A preferred stock 2,550,000 -- Payment of offering costs (309,000) -- Proceeds from the exercise of options and warrants 25,000 530,920 Proceeds from secured promissory notes 800,000 -- - ------------------------------------------------------------------------------------------------------------------------------------ Net cash provided by financing activities 2,561,723 1,247,151 - ------------------------------------------------------------------------------------------------------------------------------------ Net decrease in cash and cash equivalents (372,013) 232,157 Cash and cash equivalents, beginning of period 453,434 87,470 - ------------------------------------------------------------------------------------------------------------------------------------ Cash and cash equivalents, end of period $ 81,421 $ 319,627 - ------------------------------------------------------------------------------------------------------------------------------------ Non Cash Investing and Financing Activities: Common stock issued for sevices $ 1,243,985 $ 250,248 Accrued salaries exchanged for common stock 62,522 29,598 Debt and accrued interest exchanged for common stock 88,626 327,073 Accrued penalties in exchange for common stock 330,104 -- Convertible note payable exchanged for common stock 771,821 271,700 Stockholder purchase of financing oligation from bank -- 531,397 Discount on convertible note payable/promissory notes 211,945 1,468,247 - ------------------------------------------------------------------------------------------------------------------------------------ Supplemental Disclosures of Cash Flow Information: Cash paid for income taxes $ -- $ -- Cash paid for interest $ -- $ -- - ------------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated financial statements. 4 CORRIDOR COMMUNICATIONS CORP. AND SUBSIDIARIES (formerly Amnis Systems, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - BASIS OF PRESENTATION The unaudited consolidated financial statements have been prepared by Corridor Communications Corp. (the "Company"), pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes for the year ended December 31, 2003 included in the Company's Annual Report on Form 10-KSB. The results of the nine months ended September 30, 2004 are not necessarily indicative of the results to be expected for the full year ending December 31, 2004. 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 the Company as a going concern. The Company incurred a net loss for the nine months ended September 30, 2004 of $4,189,723 and at September 30, 2004, had an accumulated deficit of $42,841,919 and a working capital deficit of $7,910,675 These conditions raise substantial doubt as to the Company's ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. 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 the Company be unable to continue as a going concern. The Company plans to take the following steps that it believes will be sufficient to provide the Company with the ability to continue in existence. The Company has recently acquired Corridor Communications Corporation, Ashcreek Wireless, Quik Internet of the Valley, Inc. and Eagle West Communications, Inc. The Company believes that with the new acquisitions and sufficient capital to fund operations that the Company will be able to achieve profitable operations, but there can be no assurance that the Company will generate positive cash flows from operations sufficient to sustain operations in the near term. NOTE 2 - STOCK OPTIONS The Company has adopted only the disclosure provisions of SFAS No. 148 and 123, "Accounting for Stock-Based Compensation." It applies Accounting Principles Bulletin ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations in accounting for its Stock Option Plan and does not recognize compensation expense for its Stock Option Plan other than for restricted stock and options issued to outside third parties. If the Company had elected to recognize compensation expense based upon the fair value at the grant date for awards under the Stock Option Plan consistent with the methodology prescribed by SFAS No. 123, the Company's net loss and loss per share would be reduced to the pro forma amounts indicated below for the nine months ended September 30, 2004 and 2003: 5 CORRIDOR COMMUNICATIONS CORP. AND SUBSIDIARIES (formerly Amnis Systems, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
2004 2003 ----------- ----------- Net loss as reported $(4,189,723) $(5,203,843) Expense recognized -- -- Pro forma expense (40,036) (824,879) ----------- ----------- Pro forma net loss $(4,229,759) $(6,028,722) =========== =========== Basic and diluted loss per common share: As reported $ (0.01) $ (0.05) Pro forma $ (0.01) $ (0.06)
The fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions for the nine months ended September 30, 2004 and 2003: risk-free interest rate of 3.0% and 4.0%; dividend yields of 0% and 0%; volatility factors of the expected market price of the Company's common stock of 386% and 242%; and a weighted average expected life of the option of 1 and 2 years, respectively. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company's employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of employee stock options. NOTE 3 - EARNINGS PER SHARE In accordance with SFAS No. 128, "Earnings Per Share," the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. At September 30, 2004, the Company had outstanding warrants and options to purchase shares of common stock of 253,658,401, of which all were antidilutive and at September 30, 2004. NOTE 4 - NOTE RECEIVABLE The Company advanced to Corridor Communication Corporation, an Oregon corporation (See Note 9) $60,000 pursuant to a promissory note dated March 16, 2004. The note bears interest at 8% per annum and is due on March 16, 2005. This note was forgiven on June 30, 2004 and was considered part of the purchase price for Ashcreek Wireless. (See Note 9). 6 CORRIDOR COMMUNICATIONS CORP. AND SUBSIDIARIES (formerly Amnis Systems, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 5 - SECURED PROMISSORY NOTE On March 2, 2004, the Company issued four (4) secured promissory notes for $75,000 each to Alpha Capital Aktiengesellschaft, Stonestreet Limited Partnership, SDS Merchant Fund and Bristol Capital. The notes bear interest at 12% per annum and were due on March 15, 2004. These notes were repaid in July 2004 from the proceeds of the sale of 1,457 shares of the Company's Series A Convertible Preferred Stock. (See Note 8). On April 28, 2004 and May 4, 2004, the Company issued secured promissory notes for $100,000 each to Bristol Capital. The notes bear interest at 12% per annum and were due on June 15, 2004. These notes were repaid in July 2004 from the proceeds of the sale of 1,457 shares of the Company's Series A Convertible Preferred Stock. (See Note 8). In addition, in connection with these two promissory notes, the Company issued to Bristol Capital a total of 30,000,000 warrants to purchase shares of the Company's common stock for $0.005 per shares. In accordance with EITF 00-27, the Company first determined the value of the notes and the fair value of the detachable warrants issued in connection with these promissory notes. The estimated value of the warrants of $240,000 was determined using the Black-Scholes option pricing model and the following assumptions: term of 7 years, a risk free interest rate of 3.5%, a dividend yield of 0% and volatility of 402%. The face amount of the notes of $200,000 was proportionately allocated to the notes and the warrants in the amount of $91,334 and $108,666, respectively. The amount allocated to the warrants of $108,666 was recorded as a discount on the notes and as an addition to additional paid in capital. The discount of $108,666 was amortized over the life of the notes. As of June 30, 2004, the entire discount of $180,666 has been amortized to financings costs in the accompanying consolidated statements of operations. On August 20, 2004, the Company issued a secured promissory note for $300,000 to Bristol Capital. The note bears interest at 0.555556% per day and is due on October 19, 2004. Bristol Capital extended the due date of the note until November 22, 2004 for an additional interest payment of $50,000. In addition, in connection with this promissory note, the Company issued to Bristol Capital 45,000,000 warrants to purchase shares of the Company's common stock for $0.0035 per shares. In accordance with EITF 00-27, the Company first determined the value of the notes and the fair value of the detachable warrants issued in connection with these promissory notes. The estimated value of the warrants of $157,500 was determined using the Black-Scholes option pricing model and the following assumptions: term of 7 years, a risk free interest rate of 3.5%, a dividend yield of 0% and volatility of 402%. The face amount of the note of $300,000 was proportionately allocated to the notes and the warrants in the amount of $196,721 and $103,279, respectively. The amount allocated to the warrants of $103,279 was recorded as a discount on the note and as an addition to additional paid in capital. The discount of $103,279 is being amortized over the life of the note. As of September 30, 2004, $70,574 of the discount has been amortized to financings costs in the accompanying consolidated statements of operations. 7 CORRIDOR COMMUNICATIONS CORP. AND SUBSIDIARIES (formerly Amnis Systems, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 6 - CONVERTIBLE NOTES PAYABLE A rollforward of the convertible notes payable is as follows: Balance, December 31, 2003 $ 2,572,299 Conversions into equity (771,821) Amortization of discounts 844,714 ----------- Balance, September 30, 2004 2,645,192 Less current portion (2,045,390) ----------- Long-term portion $ 599,802 =========== NOTE 7 - OTHER ACCRUED EXPENSES Other accrued expenses at September 30, 2004 consisted of the following:
Penalty for not registering shares issued in February 2002 $243,641 Penalty for not registering shares underlying convertible debentures 316,567 Value of reset option provision in September 18, 2002 agreement 238,000 Other 130,790 -------- $928,998
NOTE 8 - STOCKHOLDERS' DEFICIT Preferred Stock On July 23, 2004 the Company issued 1,457 shares of its Series A Convertible Preferred Stock to existing investors for gross proceeds of $2,550,000. The net proceeds received by the Company were $1,741,000 after repaying the secured promissory notes of $500,000, the payment of $255,000 in commissions and the payment of $54,000 in legal fees associated with the transaction. The shares of Series A Convertible Preferred Stock are convertible into shares of common stock at the price of $.02 per share; provided, however, under certain circumstances amounting to a breach of the Company's obligations under its agreements with the Investors, the conversion price is the lesser of $0.02 or 80% of the average of the three lowest intraday trading prices during the 20 trading days immediately prior to the conversion date. The investors shall be entitled to receive cumulative dividends at the rate of 10% per annum during the first year after closing and 12% per annum thereafter. In addition, the Company granted to each investor a warrant to purchase 87,500 shares of the Company's common stock for $0.02 for each shares of Series A purchased. The estimated value of the warrants of $790,422 was determined using the Black-Scholes option pricing model and the following assumptions: term of 7 years, a risk free interest rate of 3.5%, a dividend yield of 0% and volatility of 402%. There is no beneficial conversion feature associated with the Series A Convertible Preferred Stock. The relative value of the warrants of $603,378 was recorded as a preferred stock dividend at the date of issuance. 8 CORRIDOR COMMUNICATIONS CORP. AND SUBSIDIARIES (formerly Amnis Systems, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Common Stock During the nine months ended September 30, 2004, the Company issued the following shares of its common stock: o 93,232,524 shares to two officers of the Company for services rendered valued at $559,395. The value of the services was based on the market price of the Company's stock at the date of grant times the number of shares issued; o 141,611,423 shares to consultants for services rendered valued at $684,592. The value of the services was based on the market price of the Company's stock at the date of grant times the number of shares issued; o 177,096,174 shares to investors in connection with the conversion of $771,821 of convertible notes payable; o 23,402,180 shares to investors in connection with the conversion of accrued interest on convertible notes payable of $88,626; o 63,212,121 shares to an investor in connection with accrued penalties of $313,600 associated with a reset option provision; o 2,120,000 shares to employees for payment of $62,522 in accrued salaries; o 5,000,000 shares to a consultant in connection with the exercise of warrants; and o 27,000,000 shares in connection with the acquisitions of Corridor Communications Corporation, an Oregon corporation, Ashcreek Wireless, a sole proprietorship, and Quik Internet of the Valley, Inc., an Oregon corporation. During the nine months ended, the Company issued to a consultant a total of 5,000,000 warrants to purchase 5,000,000 shares of the Company's common stock at $0.005 per share. These warrants were valued at $54,000 using the Black-Scholes option pricing model using the following assumptions: term of 0.083 years, a risk-free interest rate of 3.5%, a dividend yield of 0% and volatility of 735%. These warrants were exercised during the nine months ended September 30, 2004. NOTE 9 - ACQUISITIONS Corridor Communications Corporation On May 6, 2004, the Company purchased all the assets of Corridor Communications Corporation, an Oregon corporation ("CCC") for 12,000,000 shares of the Company's common stock. The 12,000,000 shares were valued at $108,000, the market value of the Company's stock at the acquisition date. This transaction was accounted for by the purchase method of accounting, as required by SFAS No. 141, "Business Combinations," and accordingly, the purchase price has been allocated to the assets acquired and the liabilities assumed based upon the estimated fair values at the date of acquisition. The allocation of the purchase price as shown below is preliminary, and may be adjusted upon the completion of an appraisal of the property and equipment and other future analyses. 9 CORRIDOR COMMUNICATIONS CORP. AND SUBSIDIARIES (formerly Amnis Systems, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The allocation of the purchase price is as follows: Property and equipment $108,000 -------- Purchase price $108,000 ======== Ashcreek Wireless On June 30, 2004, the Company purchased all the assets of Ashcreek Wireless, a sole proprietorship ("Ashcreek") for 7,500,000 shares of the Company's common stock plus $60,000 in cash that was previously paid to Ashcreek. The 7,500,000 shares were valued at $63,750, the market value of the Company's stock at the acquisition date. This transaction was accounted for by the purchase method of accounting, as required by SFAS No. 141, "Business Combinations," and accordingly, the purchase price has been allocated to the assets acquired and the liabilities assumed based upon the estimated fair values at the date of acquisition. The allocation of the purchase price as shown below is preliminary, and may be adjusted upon the completion of an appraisal of the property and equipment and other future analyses. The allocation of the purchase price is as follows: Cash $ 3,765 Accounts receivable 6,690 Property and equipment 80,980 Customer list 48,700 Goodwill 11,542 Unearned revenue (7,577) Customer deposits (20,350) --------- Purchase price $ 123,750 ========= Quik Internet On June 30, 2004 the Company purchased all the assets of Quik Internet of the Valley, Inc., an Oregon corporation ("Quik") for 7,5000,000 shares of Corridor's common stock plus the issuance of a $50,000 note payable to the sellers and the assumption of a related party note payable of $65,572. The 7,500,000 shares were valued at $63,750, the market value of the Company's stock at the acquisition date. This transaction was accounted for by the purchase method of accounting, as required by SFAS No. 141, "Business Combinations," and accordingly, the purchase price has been allocated to the assets acquired and the liabilities assumed based upon the estimated fair values at the date of acquisition. The allocation of the purchase price as shown below is preliminary, and may be adjusted upon the completion of an appraisal of the property and equipment and other future analyses. 10 CORRIDOR COMMUNICATIONS CORP. AND SUBSIDIARIES (formerly Amnis Systems, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The allocation of the purchase price is as follows: Accounts receivable 15,299 Property and equipment 2,525 Franchise 49,000 Customer list 132,029 Accounts payable (10,710) Unearned revenue (8,821) Note payable to sellers (50,000) Note payable to bank (65,572) --------- Purchase price $ 63,750 ========= Eagle West Communications, Inc. On August 25, 2004 the Company closed an Asset Purchase Agreement with Eagle West Communications, Inc. ("Eagle West"), a Nevada company, whereby the Company acquired all of the assets of Eagle West for a purchase price of $1,700,000. Eagle West acquired the assets from Eagle West, LLC, a Kansas limited liability company ("Eagle LLC"), which had filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Arizona on February 18, 2003. On May 12, 2004, the Bankruptcy Court granted Eagle LLC the authority to proceed with the sale of its assets to Eagle West. The transaction was funded by utilizing cash generated from the sale of the Company's Series A Convertible Preferred Stock in connection. The Company did not assume any liabilities of Eagle West. Eagle West, Eagle LLC and their respective affiliates are unrelated parties to the Company and its affiliates, and the purchase price was determined by arms-length negotiations. This transaction was accounted for by the purchase method of accounting, as required by SFAS No. 141, "Business Combinations," and accordingly, the purchase price has been allocated to the assets acquired and the liabilities assumed based upon the estimated fair values at the date of acquisition. The allocation of the purchase price as shown below is preliminary, and may be adjusted upon the completion of an appraisal of the property and equipment and other future analyses. The allocation of the purchase price is as follows: Cable system equipment 396,200 Vehicles 72,400 Customer list 1,231,400 ---------- Purchase price $1,700,000 ========== The operating results of CCC, Ashcreek and Quik will be included in the Company's consolidated results of operations from their respective acquisition dates. The following unaudited proforma summary presents the consolidated results of operations as if the acquisitions had occurred on January 1, 2003. These proforma results have been presented for comparative purposes only and are not indicative of what would have occurred had the acquisitions been made as of January 1, 2003, appropriately, or of any potential results which may occur in the future. 11 CORRIDOR COMMUNICATIONS CORP. AND SUBSIDIARIES (formerly Amnis Systems, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Nine Months Ended September 30, ------------------------------------- 2004 2003 ----------------- ----------------- Net sales $ 463,859 $ 255,492 ================= ================= Gross profit $ 335,273 $ 123,164 ================= ================= Operating expenses $ 1,861,160 $ 162,731 ================= ================= Net loss $ 4,198,291 $ 5,238,841 ================= ================= Basic and diluted loss per share $ 0.01 $ 0.04 ================= ================= Weighted average shares 462,913,593 124,765,671 ================= =================
NOTE 10 - DISCONTINUED OPERATIONS In January 2004, the Company made the decision to discontinue its video operation which consisted of the manufacturing of hardware and software products for the creation, management and transmission of high-quality digital video over computer networks. At that time the Company decided to focus its efforts on the acquisition of certain businesses in the wireless internet service business. All of the principal assets associated with the Company's video operations were written down as of December 31, 2003. The Company is still responsible for all the liabilities incurred by its video operations which continue to be presented under their proper captions in the accompanying consolidated balance sheet. The operating results of the Company's video operations have been presented as discontinued operations in the accompanying consolidated statements of operations. Below is a summary of the operating results of the Company's video operations for the nine months ended September 30, 2004 and 2003: Nine Months Ended September 30, ----------------------- 2004 2003 ---------- ---------- Net sales $ 234,949 $1,217,673 ========== ========== Gross profit $ 72,240 $ 347,417 ========== ========== Operating expenses $1,291,972 $3,271,319 ========== ========== Loss from operations $1,219,732 $2,923,962 ========== ========== NOTE 11 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In December 2003, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin ("SAB") No. 104, "Revenue Recognition." SAB 104 supersedes SAB 101, "Revenue Recognition in Financial Statements." SAB 104's primary purpose is to rescind accounting guidance contained in SAB 101 related to multiple element revenue arrangements, superseded as a result of the issuance of EITF 00-21, "Accounting for Revenue Arrangements with Multiple Deliverables." Additionally, SAB 104 rescinds the SEC's Revenue Recognition in Financial Statements Frequently Asked Questions and Answers ("the FAQ") issued with SAB 101 that had been codified in SEC Topic 13, Revenue Recognition. Selected portions of the FAQ have been incorporated into SAB 104. While the wording of SAB 104 has changed to reflect the issuance of EITF 00-21, the revenue recognition principles of SAB 101 remain largely unchanged by the issuance of SAB 104, which was effective upon issuance. The adoption of SAB 104 did not impact the consolidated financial statements. 12 CORRIDOR COMMUNICATIONS CORP. AND SUBSIDIARIES (formerly Amnis Systems, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 12 - SUBSEQUENT EVENTS From October 1, 2004 to November 18, 2004, the Company has issued 135,565,114 shares of common stock in connection with the conversion of convertible notes payable into common stock. 13 Item 2. Management's Discussion and Analysis or Plan of Operations GENERAL The following discussion and analysis should be read in conjunction with the consolidated financial statements and related footnotes for the year ended December 31, 2003 included in our Annual Report on Form 10-KSB. The discussion of results, causes and trends should not be construed to imply any conclusion that such results or trends will necessarily continue in the future. In addition to historical information, this Quarterly Report on Form 10-QSB contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in this section. You should carefully review the risks described in other documents we file from time to time with the Securities and Exchange Commission. When used in this report, the words "expects," "anticipates," "intends," "plans," "believes," "seeks," "targets," "estimates," "looks for," "looks to," and similar expressions are generally intended to identify forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-QSB. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document. OVERVIEW We are a Delaware corporation formed in July 1998. Until our discontinuance of video operation in January 2004 we made hardware and software products for the creation, management and transmission of high-quality digital video over computer networks. In May 2004 we acquired the assets of Corridor Communications Corporation, a wireless fidelity internet service provider and in June 2004 we acquired the assets of Quik Internet an Internet Service Provider and AshCreek Wireless, both located in Salem, Oregon. On August 25, 2004, we closed an Asset Purchase Agreement with Eagle West Communications, Inc. ("Eagle West"), a Nevada company engaged in the provision of cable services in the Southwest United States, whereby we acquired all of the assets of Eagle West for a purchase price of $1,700,000. CRITICAL ACCOUNTING POLICIES There are no other critical accounting policies other than those noted in Note 1 in our annual consolidated financial statements included in Form 10-KSB for the year ended December 31, 2003. RESULTS OF OPERATIONS Discontinued Operations In January 2004, we made the decision to discontinue our video operation, which consisted of the manufacturing of hardware and software products for the creation, management and transmission of high-quality digital video over computer networks. All of the principal assets associated with our video operations were written down as of December 31, 2003. We are still responsible for all the liabilities incurred by our video operations which continue to be presented under their proper captions in the accompanying consolidated balance sheet included elsewhere in this Form 10-QSB. The operating results of our video operations have been presented as discontinued operations in the accompanying consolidated statements of operations included elsewhere in this Form 10-QSB. 14 Below is a summary of the operating results of our video operations for the nine months ended September 30, 2004 and 2003: Nine Months Ended September 30, ----------------------- 2004 2003 ---------- ---------- Net sales $ 234,949 $1,217,673 ========== ========== Gross profit $ 72,240 $ 347,417 ========== ========== Operating expenses $1,291,972 $3,271,319 ========== ========== Loss from operations $1,219,732 $2,923,962 ========== ========== Three Months Ended September 30, 2004 as compared to the Three Months Ended September 30, 2003 Sales: Sales for the three months ended September 30, 2004 were $283,242 which was generated from our wireless internet operations and our cable operations. Revenue generated from our video operations of $516,185 for the three months ended September 30, 2003 has been presented in discontinued operations. Cost of Goods Sold: Cost of goods sold for the three months ended September 30, 2004 were $53,616 or 18.9% of sales. Cost of goods sold from our video operations of $366,379 for the three months ended September 30, 2003 has been presented in discontinued operations Operating expenses: Our operating expenses for the three months ended September 30, 2004 were $1,035,519 which consisted of expenses associated with our wireless internet operations, our cable operations and general corporate overhead. A significant part of our operating expenses was the issuance of 139,447,360 shares of our common stock to various consultants for services rendered valued at $624,457. Operating expenses associated with our video operations for the three months ended September 30, 2003 amounted to $1,366,509. Other income (Expense): Interest expense increased 34.4% or $45,714 to $178,625 for the three months ended September 30, 2004 from $132,911 for the three months ended September 30, 2003. The increase is principally due to the interest being charged on the $300,000 promissory note due on November 22, 2004. Amortization on discount of convertible notes payable decreased 44.9% or $133,889 for the three months ended September 30, 2004 to $163,875 from $297,764 for the three months ended September 30, 2003 due to less conversions of debentures which resulted in the immediate amortization of any unamortized discounts associated with the amounts converted. Financing costs in 2003 are penalties for not filing and obtaining effectiveness of a registration statement registering the shares of the Company's common stock underlying the February 2002 private placement and the two June 2002 convertible debentures. Incurrence of penalties ceased on September 5, 2003 when the registration statement became effective. The value of detachable warrants associated with the convertible debentures is computed at the end of each accounting period using Black Sholes calculations. As of December 31, 2003 there was no further liability associated with the warrants due to the effective registration of such warrants. For the three months ended September 30, 2004, we recognized financing costs for the issuance of 45,000,000 warrants associated with a $300,000 promissory notes. 15 Nine Months Ended September 30, 2004 as compared to the Nine Months Ended September 30, 2003 Sales: Sales for the nine months ended September 30, 2004 were $283,242 which was generated from our wireless internet operations and our cable operations. Revenue generated from our video operations of $1,217,673 for the nine months ended September 30, 2003 has been presented in discontinued operations. Cost of Goods Sold: Cost of goods sold for the nine months ended September 30, 2004 were $53,616 or 18.9% of sales. Cost of goods sold from our video operations of $870,256 for the nine months ended September 30, 2003 has been presented in discontinued operations Operating expenses: Our operating expenses for the nine months ended September 30, 2004 were $1,641,805 which consisted of expenses associated with our wireless internet operations, our cable operations and general corporate overhead. A significant part of our operating expenses was the issuance of 234,843,947 shares of our common stock to two executives and various consultants for services rendered valued at $1,243,985. Operating expenses associated with our video operations for the nine months ended September 30, 2003 amounted to $3,271,379. Other income (Expense): Interest expense increased 47.6% or $160,848 to $498,961 for the nine months ended September 30, 2004 from $338,113 for the nine months ended September 30, 2003. The increase is principally due to the interest being charged on the $300,000 promissory note due on November 22, 2004 and the $500,000 of promissory notes issued in the 1st and 2nd quarter of 2004. Amortization on discount of convertible notes payable increased 44.9% or $131,458 for the nine months ended September 30, 2004 to $844,714 from $713,256 for the nine months ended September 30, 2003 due to more conversions of debentures which resulted in the immediate amortization of any unamortized discounts associated with the amounts converted. Financing costs in 2003 are penalties for not filing and obtaining effectiveness of a registration statement registering the shares of the Company's common stock underlying the February 2002 private placement and the two June 2002 convertible debentures. Incurrence of penalties ceased on September 5, 2003 when the registration statement became effective. The value of detachable warrants associated with the convertible debentures is computed at the end of each accounting period using Black Sholes calculations. As of December 31, 2003 there was no further liability associated with the warrants due to the effective registration of such warrants. For the nine months ended September 30, 2004, we recognized financing costs for the issuance of 45,000,000 warrants associated with three secured promissory notes. 16 LIQUIDITY AND CAPITAL RESOURCES At December 31, 2003, we had cash and cash equivalents of $453,434 compared to $81,421 at September 30, 2004. In the nine months ended September 30, 2004, negative working capital has deteriorated by $2,254,926 to $7,910,675 at September 30, 2004 from $5,655,749 at December 31, 2003 due to an increase in short term financing of $300,000 and an increase in the amount of convertible debentures that come due within the next twelve months. We had continuing losses from operations in the nine months ended September 30, 2004 of $1,412,179. We are currently unable to project when the business may no longer generate a loss. On May 9, 2003, we entered into a securities purchase agreement with nine investors for the sale of (i) $1,000,000 in convertible debentures and (ii) warrants to buy 5,000,000 shares of our common stock. In addition, in exchange for cancellation of a reset option by one investor, the Company issued an investor a convertible debenture in the amount of $910,120. In September 2003, we entered into a financing agreement with an accredited investor, pursuant to which we issued and sold 12% two-year secured convertible debentures in the principal amount of $250,000 and 1,250,000 warrants to purchase shares of our common stock, subject to antidilution adjustment. In October 2003, we entered into an agreement with two creditors whereby we agreed to pay the creditors, in connection with a senior security interest in the amount of $531,397, in shares of common stock. In November 2003, we entered into a financing agreement with accredited investors, pursuant to which we issued and sold 12% two-year secured convertible debentures in the principal amount of $1,100,000 and 5,500,000 warrants to purchase shares of our common stock, subject to antidilution adjustment. In March 2004, we obtained $300,000 from our current investors. These funds were repaid from the proceeds of the issuance of 1,457 shares of our Series A Convertible Preferred Stock in July 2004. In April and May 2004, we obtained an additional $200,000 from a current investor. These funds were repaid from the proceeds of the issuance of 1,457 shares of our Series A Convertible Preferred Stock in July 2004. In July 2004 we issued 1,457 shares of our Series A Convertible Preferred Stock to existing investors for gross proceeds of $2,550,000. The net proceeds received by us were $1,741,000 after repaying the secured promissory notes of $500,000, the payment of $255,000 in commissions and the payment of $54,000 in legal fees associated with the transaction. On August 20, 2004, we issued a secured promissory note for $300,000 to a current investor. The note bears interest at 0.555556% per day and is due on November 22, 2004. We believe we will still need additional investments in order to fund operations until such time that we are able to generate positive cash flow from our operations. 17 Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of our common stock and the downturn in the U.S. stock and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations again. 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 under the Exchange Act is accumulated and communicated to our management, including principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. 18 Part II. OTHER INFORMATION Item 1. Legal Proceedings From time to time, we are a party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not involved currently in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During the three months ended September 30, 2004, the Company issued the following shares of its common stock: o 139,447,360 shares to various consultants of the Company for services rendered valued at $624,457. The value of the services was based on the market price of the Company's stock at the date of grant times the number of shares issued; o 14,707,561 shares to investors in connection with the conversion of $50,000 of convertible notes payable; o 23,402,180 shares to investors in connection with the conversion of accrued interest on convertible notes payable of $88,626; and o 42,213,333 shares to investors in connection with penalties of $150,104. All of the above offerings and sales were deemed to be exempt under rule 506 of Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended. No advertising or general solicitation was employed in offering the securities. The offerings and sales were made to a limited number of persons, all of whom were accredited investors, business associates of the Company or executive officers of the Company and transfer was restricted by the Company in accordance with the requirements of the Securities Act of 1933. In addition to representations by the above-referenced persons, we have made independent determinations that all of the above-referenced persons were accredited or sophisticated investors, and that they were capable of analyzing the merits and risks of their investment, and that they understood the speculative nature of their investment. Furthermore, all of the above-referenced persons were provided with access to our Securities and Exchange Commission filings. Item 3. Defaults Upon Senior Securities Not applicable Item 4. Submission of Matters to a Vote of Security Holders The following matters were approved by stockholders of our company holding a majority of the outstanding shares of common stock pursuant to a written consent dated September 23, 2004 in lieu of a special meeting of the stockholders: 19 o the amendment of the our Certificate of Incorporation, as amended, to increase the number of authorized shares of common stock from 1,600,000,000 shares to 10,000,000,000 shares; and o the amendment of our Certificate of Incorporation, as amended, to implement a reverse split of our common stock at a ratio of 1-for-10, 1-for-20 or 1-for-30. The ratio at which the reverse stock split will be implemented will be selected by our Board of Directors in its discretion. Item 5. Other Information Not applicable Item 6. Exhibits - ------------------- ------------------------------------------------------------ Number Exhibit - ------------------- ------------------------------------------------------------ 31.1 Rule 13a-14(a) Certification - ------------------- ------------------------------------------------------------ 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - ------------------- ------------------------------------------------------------ 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. CORRIDOR COMMUNICATIONS CORP. November 19, 2004 By: /s/ J. Michael Heil --------------------------------------- J. Michael Heil Chief Executive Officer and Acting Chief Financial Officer 20 < EX-31.1 2 v09139_ex31-1.txt Exhibit 31.1 CERTIFICATIONS I, J. Michael Heil, CEO of Corridor Communications Corp., certify that: 1. I have reviewed this Quarterly Report on Form 10-QSB of Corridor Communications Corp.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. The small business issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any changes in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of small business issuer's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. November 19, 2004 By: /s/ J. Michael Heil ---------------------------------------- J. Michael Heil Chief Executive Officer Acting Chief Financial Officer 21 EX-32.1 3 v09139_ex32-1.txt 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 In connection with the Quarterly Report of Corridor Communications Corp. (the "Company") on Form 10-QSB for the quarter ending September 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned, in the capacities and on the date indicated below, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge: (1) The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. November 19, 2004 By: /s/ J. Michael Heil ------------------------------- J. Michael Heil Chief Executive Officer Acting Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----