-----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, HEZNEPOwJSzre3jvmfTX0YPbilC3BU1QfxP6kZMSQeDuOnUBH/3+C4UoRQDsOzKw zLT78JdGlX1cmi+1BgnD9Q== 0000949353-04-000438.txt : 20040820 0000949353-04-000438.hdr.sgml : 20040820 20040819175050 ACCESSION NUMBER: 0000949353-04-000438 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20040630 FILED AS OF DATE: 20040820 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CIROND CORP CENTRAL INDEX KEY: 0001132810 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 880469593 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-49763 FILM NUMBER: 04987183 BUSINESS ADDRESS: STREET 1: 4185 STILL CREEK DRIVE STREET 2: SUITE B-101 CITY: BURNABY STATE: A1 ZIP: V5C 6G9 BUSINESS PHONE: 6042055039 MAIL ADDRESS: STREET 1: 4185 STILL CREEK DR STREET 2: STE B-101 CITY: BURNABY STATE: A1 ZIP: V5C 6G9 FORMER COMPANY: FORMER CONFORMED NAME: EXMAILIT COM DATE OF NAME CHANGE: 20010118 10QSB 1 f10qsb-june2004.txt FORM 10-QSB JUNE 2004 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: JUNE 30, 2004 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from _______________ to ______________ Commission file number 0-49763 CIROND CORPORATION (Exact name of small business issuer as specified in its charter) NEVADA 88-0469593 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 4185 STILL CREEK DRIVE #B-101, BURNABY, BRITISH COLUMBIA, CANADA V5C 6G9 (Address of principal executive offices) (604) 205-5039 (Issuer's telephone number) NOT APPLICABLE (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ------ State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 35,210,000 SHARES OF COMMON STOCK, $0.001 PAR VALUE, AS OF AUGUST 16, 2004 Transitional Small Business Disclosure Format (check one): Yes No X ---- ---- Consolidated Interim Financial Statements of CIROND CORPORATION (FORMERLY EXMAILIT.COM) (A Development Stage Enterprise) (Expressed in United States dollars) Six-months ended June 30, 2004 (Unaudited) 2 CIROND CORPORATION (FORMERLY EXMAILIT.COM) (A Development Stage Enterprise) Consolidated Balance Sheets (Expressed in United States dollars) June 30, 2004 and December 31 2003
============================================================================================================= June 30, 2004 (unaudited) December 31, 2003 - ------------------------------------------------------------------------------------------------------------- ASSETS Current assets: Cash $ 521,796 $ 86,066 Amounts receivable, net of allowance of nil (2003 - $nil) 17,836 19,679 Prepaid expenses and deposits 12,006 12,492 ---------------------------------------------------------------------------------------------------------- 551,638 118,237 Property, plant and equipment 68,086 54,497 Website development 7,927 9,512 - ------------------------------------------------------------------------------------------------------------- $ 627,651 $ 182,246 ============================================================================================================= LIABILITIES AND STOCKHOLDERS' DEFICIENCY Current liabilities: Accounts payable and accrued liabilities (note 3) $ 183,661 $ 165,522 Consulting fees payable (note 4) 106,700 130,000 Share subscriptions payable (note 5(a)) 325,000 375,000 Deferred revenue 64,374 6,884 Loan payable (note 5(b)) 400,000 75,000 Due to stockholder 171,576 171,576 ---------------------------------------------------------------------------------------------------------- 1,251,311 923,982 Stockholders' deficiency: Capital stock: 25,000,000 preferred shares, issuable in series, with a par value of $0.001 per share authorized, nil issued 100,000,000 voting common shares, with $0.001 par value authorized, 35,210,000 issued (December 31, 2003 - 34,460,000) 35,210 34,460 Additional paid-in capital 1,290,163 915,913 Deficit accumulated during the development stage (1,949,033) (1,692,109) ---------------------------------------------------------------------------------------------------------- (623,660) (741,736) Going concern (note 2(a)) Subsequent event (note 5(b) Commitments (note 6) - ------------------------------------------------------------------------------------------------------------- $ 627,651 $ 182,246 =============================================================================================================
See accompanying notes to consolidated interim financial statements. 3 CIROND CORPORATION (FORMERLY EXMAILIT.COM) (A Development Stage Enterprise) Consolidated Statements of Loss (Expressed in United States dollars) (Unaudited)
============================================================================================================== From inception Six months Six months (March 7, 2001) ended ended to June 30, June 30, June 30, 2004 2004 2003 - -------------------------------------------------------------------------------------------------------------- Revenue: Sales (note 7) $ 849,211 $ 821,562 $ 1,652 Expenses: Advertising and promotion 270,156 158,082 33,236 Amortization 41,957 10,430 5,411 Consulting fees (note 4) 539,661 169,648 114,248 Foreign currency loss (gain) 9,703 3,789 (5,973) Interest 2,875 897 556 Office and administrative 67,652 37,279 9,384 Professional fees 279,516 126,530 36,612 Research and development 1,004,128 347,804 158,230 Salaries and benefits 218,886 119,992 53,620 Travel 242,451 107,156 58,947 ---------------------------------------------------------------------------------------------------------- 2,676,985 1,081,607 464,271 - --------------------------------------------------------------------------------------------------------------- Loss before interest income (1,827,774) (260,045) (462,619) Interest income 3,388 3,121 5 - --------------------------------------------------------------------------------------------------------------- Loss $ (1,824,386) $ (256,924) $ (462,614) =============================================================================================================== Weighted average number of common shares outstanding, basic and diluted 20,065,262 34,835,000 17,000,000 Net income (loss) per share, basic and diluted $ (0.09) $ (0.01) $ (0.03) ===============================================================================================================
See accompanying notes to consolidated interim financial statements. 4 CIROND CORPORATION (FORMERLY EXMAILIT.COM) (A Development Stage Enterprise) Consolidated Statements of Loss $ United States (Unaudited)
=============================================================================================================== Three months Three months ended ended June 30, June 30, 2004 2003 - --------------------------------------------------------------------------------------------------------------- Revenue: Sales (note 7) $ 66,987 $ 1,652 Expenses: Advertising and promotion 118,345 9,117 Amortization 6,397 3,259 Consulting fees (note 4) 90,749 69,039 Foreign currency loss (gain) 2,004 (598) Interest 580 447 Office and administrative 15,286 7,318 Professional fees 92,870 26,403 Research and development 186,067 113,888 Salaries and benefits 65,349 8,694 Travel 48,089 35,839 ---------------------------------------------------------------------------------------------------------- 625,736 273,406 - --------------------------------------------------------------------------------------------------------------- Loss before interest income (558,749) (271,754) Interest income 2,376 - - --------------------------------------------------------------------------------------------------------------- Loss $ (556,373) $ (271,754) =============================================================================================================== Weighted average number of common shares outstanding, basic and diluted 35,210,000 17,000,000 Loss per share, basic and diluted $ (0.02) $ (0.02) ===============================================================================================================
See accompanying notes to consolidated financial statements. 5 CIROND CORPORATION (FORMERLY EXMAILIT.COM) (A Development Stage Enterprise) Consolidated Statement of Stockholders' Deficiency and Comprehensive Income (Loss) (Expressed in United States dollars) From inception (March 7, 2001) to June 30, 2004 (Unaudited)
================================================================================================================== Deficit accumulated Total Additional during the stockholders' Common Stock paid-in development equity Shares Amount capital stage (deficiency) - ------------------------------------------------------------------------------------------------------------------ Shares issued for cash 16,540,312 $ 1,654 $ (220) $ - $ 1,434 on March 7, 2001 Comprehensive loss: Loss - - - (5,466) (5,466) - ----------------------------------------------------------------------------------------------------------------- Balance, December 31, 2001 16,540,312 1,654 (220) (5,466) (4,032) Shares issued for cash from February 12 to March 25, 2002 at $0.75 per share 459,688 46 298,892 - 298,938 Comprehensive loss: Loss - - - (498,034) (498,034) - ----------------------------------------------------------------------------------------------------------------- Balance, December 31, 2002 17,000,000 1,700 298,672 (503,500) (203,128) Shares held by Cirond stockholders and effect of recapitalization transaction 16,160,000 1 - (124,647) (124,646) Promissory notes converted to shares at $0.50 per share 1,300,000 130 649,870 - 650,000 Adjustment to capital stock to equal par value of Cirond capital stock - 32,629 (32,629) - - Comprehensive loss: Loss - - - (1,063,962) (1,063,962) - ----------------------------------------------------------------------------------------------------------------- Balance, December 31, 2003 34,460,000 34,460 915,913 (1,692,109) (741,736) Common shares issued for share subscriptions at $0.50 per share 750,000 750 374,250 - 375,000 Comprehensive loss: Net loss - - - (256,924) (256,924) - ----------------------------------------------------------------------------------------------------------------- Balance, June 30, 2004 (unaudited) 35,210,000 $ 35,210 $ 1,290,163 $ (1,949,033) $ (623,660) =================================================================================================================
See accompanying notes to consolidated interim financial statements. 6 CIROND CORPORATION (FORMERLY EXMAILIT.COM) (A Development Stage Enterprise) Consolidated Statements of Cash Flows (Expressed in United States dollars) (Unaudited)
=============================================================================================================== From inception Six months Six months (March 7, 2001) ended, ended to June 30, June 30, June 30, 2004 2004 2003 - --------------------------------------------------------------------------------------------------------------- Cash provided by (used in): Operations: Net income (loss) $ (1,824,386) $ (256,924) $ (462,614) Item not involving cash: Amortization 41,957 10,430 5,411 Changes in non-cash working capital: Amounts receivable (17,836) 1,843 (2,605) Prepaid expenses and deposits (12,006) 486 (11,853) Accounts payable and accrued liabilities 182,467 18,139 15,737 Consulting fees payable 106,700 (23,300) (21,282) Deferred revenue 64,374 57,490 - ---------------------------------------------------------------------------------------------------------- (1,458,730) (191,836) (477,206) Financing: Common shares issued for cash 300,372 - - Promissory note proceeds 650,000 - - Share subscriptions payable 700,000 325,000 425,000 Proceeds from loans payable 500,000 500,000 - Repayment of loans payable (175,000) (175,000) Advances from stockholder 171,576 - 48,973 ---------------------------------------------------------------------------------------------------------- 2,146,948 650,000 473,973 Investing: Expenditures on website development (19,025) - - Expenditures on property, plant and equipment (98,945) (22,434) (32,760) Advances to Cirond prior to recapitalization transaction (55,157) - - Cash acquired on recapitalization transaction 6,705 - - ---------------------------------------------------------------------------------------------------------- (166,422) (22,434) (32,760) - --------------------------------------------------------------------------------------------------------------- Increase (decrease) in cash 521,796 435,730 (35,993) Cash, beginning of period - 86,066 60,135 - --------------------------------------------------------------------------------------------------------------- Cash, end of period $ 521,796 $ 521,796 $ 24,142 =============================================================================================================== Supplementary information: Interest paid $ - $ - $ - Income taxes paid $ - $ - $ - =============================================================================================================== Non-cash financing and investing activities: Common shares issued for share subscriptions proceeds received in previous period $ 375,000 $ 375,000 - Common shares issued upon conversion of promissory notes $ 650,000 - - Net liabilities assumed on recapitalization Transaction $ 76,194 - - ===============================================================================================================
See accompanying notes to consolidated interim financial statements. 7 CIROND CORPORATION (FORMERLY EXMAILIT.COM) (A Development Stage Enterprise) Notes to Consolidated Interim Financial Statements (Expressed in United States dollars) Six months ended June 30, 2004 (Unaudited) ================================================================================ 1. OPERATIONS: Cirond Corporation (the "Company") is incorporated under the laws of the State of Nevada. The Company's principle business activities include the development and marketing of solutions for wireless networking designed to enhance the usability, performance, and security of 802.11b and 802.11a (WiFi) Wireless Local Area Networks (WLAN). The Company is primarily targeting enterprises and institutional customers requiring the use of wireless networks. To June 30, 2004, the Company has not generated significant recurring product sales and is continuing to develop its business model. Accordingly, the Company is in the development stage for financial reporting purposes. 2. SIGNIFICANT ACCOUNTING POLICIES a) Going concern These financial statements have been prepared on the going concern basis, which assumes the realization of assets and liquidation of liabilities and commitments in the normal course of business for the foreseeable future. As shown in the unaudited financial statements, the Company has a loss of $1,824,386 for the period from inception (March 7, 2001) to June 30, 2004, and has a working capital deficiency of $699,673 at June 30, 2004. These factors raise substantial doubt as to the Company's ability to continue as a going concern. The application of the going concern concept is dependent upon the Company's ability to receive continued financial support from its creditors, stockholders and external investors and attaining profitable operations through the sale of its software. These consolidated financial statements do not give effect to any adjustment should the Company be unable to continue as a going concern and, therefore, be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts differing from those reflected in the consolidated financial statements. Management plans to obtain equity and debt financing from external investors and to actively market its wireless technology applications. Management believes the plan described above will be sufficient to meet the Company's liabilities and commitments as they become payable over the next twelve months. There can be no assurance that management's plan will be successful. Failure to obtain the support of additional external investors to finance the development and marketing of the Company's wireless technology applications will cause the Company to curtail operations and impair the Company's ability to continue as a going concern. 8 CIROND CORPORATION (FORMERLY EXMAILIT.COM) (A Development Stage Enterprise) Notes to Consolidated Interim Financial Statements (Expressed in United States dollars) Six months ended June 30, 2004 (Unaudited) ================================================================================ 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) b) Basis of presentation The information included in the accompanying consolidated interim financial statements is unaudited and should be read in conjunction with the annual audited consolidated financial statements and notes thereto contained in the Company's Report on Form 10-KSB for the fiscal year ended December 31, 2003. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for fair presentation of the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the entire fiscal year. 3. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES: Included in accounts payable and accrued liabilities at June 30, 2004 is $50,776 (December 31, 2003 - $50,776) that is currently being disputed by management with a supplier. 4. RELATED PARTY TRANSACTIONS: During the three months and six months ended June 30, 2004, the Company incurred consulting fees from a company controlled by the president totaling $45,000 and $90,000 (2003 - $30,000 and $60,000 respectively). At June 30, 2004, $20,000 (2003 - $40,000) of these consulting fees were included in consulting fees payable. The amounts were not subject to a written agreement but were incurred in the normal course of operations and are recorded at the exchange amount, which is the amount established and agreed to by the related parties. 5. SHARE SUBSCRIPTIONS PAYABLE AND LOAN PAYABLE: a) Share subscriptions outstanding at June 30, 2004, consist of subscriptions to acquire 650,000 common shares at a price of $0.50 per share. b) During the six months ended June 30, 2004, the Company received a subscription for 4,000,000 common shares and common share purchase warrants for aggregate cash proceeds of $2 million. The subscriber was granted common share purchase warrants as follows: ======================================================================= Number of common shares Exercise price Expiry date ----------------------------------------------------------------------- 1,000,000 $ 0.50 April 19, 2005 1,000,000 $ 0.75 April 19, 2005 1,000,000 $ 1.00 April 19, 2006 1,000,000 $ 1.25 April 19, 2006 ======================================================================= 9 CIROND CORPORATION (FORMERLY EXMAILIT.COM) (A Development Stage Enterprise) Notes to Consolidated Interim Financial Statements (Expressed in United States dollars) Six months ended June 30, 2004 (Unaudited) ================================================================================ 5. SHARE SUBSCRIPTIONS PAYABLE AND LOAN PAYABLE (CONTINUED): In May 2004, the subscriber retracted their share subscription and the Company returned $1.5 million of the $2 million share subscription to the subscriber. The remaining share subscription of $500,000 was converted into a demand loan, which matures on September 30, 2004, is unsecured and bears interest at 5% per annum. The Company returned $100,000 of the remaining $500,000 when a finder's fee of $100,000, paid in conjunction with the subscription, was refunded to the Company. The terms of the demand loan is not currently subject to a written agreement. Subsequent to June 30, 2004, the Company has entered into negotiations with the lender to restructure the terms of the loan payable, which is expected to result in the Company issuing an unsecured convertible note, with interest at 5%, which, at the option of the lender, could be converted into 1,000,000 shares of common stock. In addition, it is expected that the Company will issue a warrant to acquire 1,000,000 shares of common stock at a price of $0.40 per share. A formal written agreement has not been finalized by the parties and the final agreed terms could be different than the expected terms indicated above. The outcome of these matters cannot be determined at this time. 6. COMMITMENTS: On May 1, 2003, the Company entered an operating lease for office premises that requires the following annual minimum lease payments: ============================================================================= 2004 $ 21,893 2005 $ 24,158 2006 $ 8,305 ============================================================================= 7. REVENUE: During the six months ended June 30, 2004, the Company issued a perpetual license for the use of its source code for its existing software products to a third party in exchange for cash proceeds of $700,000. In conjunction with this agreement, the Company will provide support and maintenance services for a one year term for cash proceeds of $100,000. Support and maintenance services are renewable, at the option of the customer, at $100,000 per annum. 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION OVERVIEW On November 25, 2003, pursuant to a Stock Exchange Agreement (the "Stock Exchange Agreement") with Seaside Holdings Inc. (f/k/a Cirond Technologies Inc.), a Colorado corporation ("CTI"), as amended by the First Amendment to the Stock Exchange Agreement dated November 13, 2003 (the "First Amendment") (the Exchange Agreement and the First Amendment are collectively referred to herein as the "Agreement"), we acquired all of the issued and outstanding capital stock of CTI's wholly owned subsidiary, Cirond Networks Inc., a Nevada corporation ("CNI"), in exchange for 17,000,000 post-Forward Split shares of our common stock. As a result of this share exchange, CTI owned approximately 51.2% (not taking into account the issuance of 750,000 shares of our common stock in a private placement, the certificates for which were issued subsequent to December 31, 2003, or 1,300,000 shares of common stock issued for the CNI Indebtedness described below) of our issued and outstanding shares. In addition, pursuant to the terms of the Agreement, we issued an aggregate of 1,300,000 post-Forward Split shares of our common stock in exchange for $650,000 in indebtedness of CNI (the "CNI Indebtedness"), which was held by Cirond Venture Partners Inc., Stumdell Limited, and Steven Velardi. As a result of the Agreement, effective November 25, 2003, CNI became our wholly-owned subsidiary. We changed our name to Cirond Corporation as of October 14, 2003. For accounting purposes, the acquisition of CNI has been accounted for as a recapitalization transaction. Under recapitalization accounting, CNI is considered to have issued shares for consideration equal to our net monetary assets with the results of our operations included in the consolidated financial statements from the date of recapitalization on November 25, 2003. CNI entered into a non-exclusive Source Code Licensing Agreement (the "Agreement") with a third party on January 21, 2004, which included an annual support fee renewable at the option of the licensee. The details of the agreement are confidential. As a result of the Agreement, our revenues increased significantly during the first two quarters of 2004 from the recording of the licensing fee and approximately six months of the annual support fee. Almost all of the increase in revenue is attributable to the Agreement. All of the payments due to us under this agreement were paid at the time of the contract and, at this time, we do not anticipate any further payments; however, we will record $8,333 of the fees received as revenue each month for the six months from July 2004 to December 2004 relating to the support services performed. On March 29, 2004, we received $2,000,000 in funds from a private investor in connection with a private placement offering. During the quarter ended June 30, 2004, we agreed with the investor to restructure the investment and to return $1,500,000 to the investor. 11 The remaining $500,000 was restructured as a loan to us repayable at our discretion and bearing interest at 5% per annum. In connection with the private placement, we paid a $100,000 finder's fee. During the quarter ended June 30, 2004, we recovered the finder's fee, which we repaid to the investor to reduce the outstanding principal balance on the loan. We have tentatively agreed with the investor to (1) grant the investor a warrant to acquire 1,000,000 shares of our common stock at a price of $0.40 per share and (2) restructure the terms of the loan as a convertible note with an annual interest rate of 5% which, at the option of the investor, could be converted into 1,000,000 shares of our common stock. As of the date of this report, we are in the process of finalizing the terms of the restructuring of the loan (including the expiration date of the warrant and the due date of the convertible note) and preparing the documents necessary to formalize the restructuring. SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES Our discussion and analysis of our financial condition and results of operations are based upon our consolidated interim financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to the valuation of accounts receivable and inventories, the impairment of long-lived assets, any potential losses from pending litigation and deferred tax assets or liabilities. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions; however, we believe that our estimates, including those for the above-described items, are reasonable. GOING CONCERN The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of our company as a going concern. We had a net loss of $556,373 and $256,924 for the three months and six months ended June 30, 2004, respectively. At June 30, 2004, we had an accumulated deficit of $1,949,033 and a working capital deficit of $699,673. These factors raise substantial doubt as to the Company's ability to continue as a going concern. The application of the going concern concept is dependent upon our ability to receive continued financial support from our creditors, stockholders and external investors and attaining profitable operations through the sale of our software. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. Management plans to obtain equity and debt financing from external investors and to actively market our wireless technology applications. 12 Management believes the plan described above will be sufficient to meet our liabilities and commitments as they become payable over the next twelve months. There can be no assurance that management's plan will be successful. Failure to obtain the support of additional external investors to finance the development and marketing of our wireless technology applications will cause us to curtail operations and impair our ability to continue as a going concern. BASIS OF CONSOLIDATION. Effective November 25, 2003, we issued 17,000,000 common shares in consideration for 100% of the outstanding common shares of CNI. As CNI stockholders obtained control of Cirond Corporation through the exchange of shares, the acquisition of CNI has been accounted for in the consolidated financial statements as a recapitalization transaction, effectively as if CNI had issued shares for consideration equal to our net monetary assets followed by a recapitalization of CNI's common shares. On November 25, 2003, our name was changed from eXmailit.com to Cirond Corporation. The consolidated statements of loss, stockholders' deficiency and comprehensive loss and cash flows reflect the results of operations and changes in financial position of CNI, for the period from its incorporation on March 7, 2001 to June 30, 2004, combined with those of the legal parent, Cirond Corporation, from November 25, 2003, the date of the recapitalization, in accordance with accounting principles generally accepted in the United States of America. REVENUE RECOGNITION. Revenue from one-time software license sales is generally recognized once delivery has occurred, evidence of an arrangement exists, the fee is fixed and determined and collection of the fee is probable, provided there are no significant vendor obligations remaining. For multiple element arrangements, where Vendor Specific Objective Evidence ("VSOE") of fair value is available for all elements, the contract value is allocated to each element proportionately based upon relative VSOE of fair value and revenue is recognized separately for each element. Where VSOE of fair value is available for all undelivered elements, the residual method is used to value the delivered elements. Where VSOE of fair value is not available for an undelivered element, contract accounting is used to account for the entire contract value. RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 2004 COMPARED TO THREE MONTHS ENDED JUNE 30, 2003 Revenues from operations increased from $1,652 for the three month period ended June 30, 2003 to $66,987 for the three month period ended June 30, 2004. Revenue during the three month period ended June 30, 2004, was derived principally from software customization and licensing of our Winc Manager, Winc, pocketWinc and recently-introduced AirPatrol Mobile software products. Revenue also included the recording of support service fees received under the Source Code Licensing agreement described above which closed in the first quarter of 2004. Our revenues during the three month period ended June 30, 2004 increased significantly compared to the same period in 2003. The increase is attributable to the release of new products (AirPatrol Mobile and Winc Manager 2.0) as well as increased marketing initiatives including 13 trade shows, print and online advertising - as well as the Source Code Licensing Agreement (which accounted for a minority of revenue in the quarter). All of the payments due to us under the Source Code Licensing Agreement were paid at the time of the contract and, at this time, we do not anticipate any further payments; however, we will record a portion of the fees received as revenue each month for the 12 months from January 21, 2004 to January 20, 2005 relating to the support fees earned in connection with this agreement. In addition, management also expects greater contributions to revenue from licensing our network security products in 2004, as the Air Patrol Enterprise, Air Patrol Sentinel and AirSafe products begin shipping in the third quarter of 2004. Management is also seeking to enter into other license agreements for our technology during the next 12 months; however, there are no assurances that we will be successful in entering into any such agreements. Management also anticipates continued increase in sales of our AirPatrol Mobile products, particular as further marketing initiatives are undertaken in the third and fourth quarters of this year. During the second quarter, we invested in a variety of print and online marketing initiatives and attended three major industry exhibitions in the United States and the United Kingdom - all of which contributed to an increase in marketing expenses compared to the prior year. In addition, we increased our expenditures for research and development in the quarter - all of which resulted in the announcement of AirPatrol Enterprise, AirPatrol Sentinel, AirSafe, Winc 2.1 and pocketWinc 2.0 in July 2004. We also undertook initiatives to expand our distribution, which resulted in the conclusion of agreements with leading online mobile computer software vendors Handango and Pocketgear to carry our products. Our net loss for the three months ended June 30, 2004 was $556,373 compared to a net loss of $271,754 for the three months ended June 30, 2003. The increase in the net loss is primarily the result of increased expenditures on research and development, as well as sales support and marketing initiatives. Advertising was $118,345 for the quarter compared to $9,117 for 2003 as our products have advanced from the development stage in 2003 to the sales stage in 2004. Research and development during the three months ended June 30, 2004, increased $72,179 compared to 2003 as more people were added to the development team in 2004. Expenses are expected to stay at levels on par with the first half of 2004 until we have completed significant financings in 2004 that will support increasing staffing levels in research and development and sales and marketing. No cash dividends were declared during the three months ended June 30, 2004. SIX MONTHS ENDED JUNE 30, 2004 COMPARED TO SIX MONTHS ENDED JUNE 30, 2003 Revenues from operations increased from $1,652 for the six month period ended June 30, 2003 to $821,562 for the six month period ended June 30, 2004. Revenue from the Source Code Licensing agreement described above, which closed in the first quarter of 2004, accounted for approximately 91% of revenues for the six months ended June 30, 2004. We also received revenue from software customization and licensing of our Winc Manager, Winc, pocketWinc and recently-introduced AirPatrol Mobile software products. Our revenues during the six month period ended June 30, 2004 increased significantly compared to the same period during 2003; 14 however, almost all of the increase is attributable to the Source Code Licensing Agreement. All of the payments due to us under this agreement were paid at the time of the contract and, at this time, we do not anticipate any further payments; however, we will record a portion of the fees received as revenue each month for the 12 months from January 21, 2004 to January 20, 2005 relating to the support fees earned in connection with this agreement. In addition, management also expects greater contributions to revenue from licensing our network security products in 2004, as the Air Patrol Enterprise, Air Patrol Sentinel and AirSafe products begin shipping in the third quarter of 2004. Management is also seeking to enter into other license agreements for our technology during the next 12 months; however, there are no assurances that we will be successful in entering into any such agreements. During the first six months of 2004, our expenses increased over the same period in the prior year as we invested in a variety of print and online marketing initiatives and attended four major industry exhibitions in the United States and the United Kingdom - all of which contributed to an increase in marketing expenses compared to the prior year. In addition, we increased expenditures for research and development in that period - all of which resulted in the announcement of Winc Manager 2.0, AirPatrol Mobile, AirPatrol Enterprise, AirPatrol Sentinel, AirSafe, Winc 2.1 and pocketWinc 2.0. We also undertook initiatives to expand our distribution, which resulted in the conclusion of agreements with hardware vendor Netgear as well as leading online mobile computer software vendors Handango and Pocketgear to carry our products. Our net loss for the six months ended June 30, 2004 was $256,924 compared to a net loss of $462,614 for the six months ended June 30, 2003. The decrease in the net loss is primarily a result of our Source Code Licensing agreement which was entered into during the first quarter of 2004; however, expenses also increased compared to the six-month period ended June 30, 2003. As in the three month period, the most dramatic increases in expenses are in the areas of advertising and promotion and research and development. Both of these areas have seen more intensified expenditures as our products have reached the sales portion of the sales cycle. Travel has also increased as sales and marketing personnel attended more trade shows in 2004 compared to 2003. Research and development is also higher in 2004 as a result of $100,000 of purchased research and development. Expenses are expected to stay at levels on par with the first six months of 2004 until we have completed significant financings in 2004 that will support increasing staffing levels in research and development and sales and marketing. No cash dividends were declared during the six months ended June 30, 2004. LIQUIDITY AND CAPITAL RESOURCES As at June 30, 2004, we had cash of $521,796 and a working capital deficiency of $699,673. As of June 30, 2004, we had significantly more cash than at December 31, 2003, as the result of funds we received from private financings. A portion of the cash is attributable to the $2 million received on March 29, 2004 from a private investor. During the three months ended June 30, 2004, $1,600,000 was returned to the investor and, as described above, the remaining 15 $400,000 was restructured as a loan to us - and is in the process of being restructured as an equity investment as also described above. Additionally, in June 2004, we began another private placement offering. As of June 30, 2004, we had received subscriptions for $325,000 from private placements, which were accounted for as share subscriptions payable. As of the date of this report, the common shares have not been issued to the investors in the private placement, as we are awaiting additional documentation from some of the investors. If the investors are unable to provide the additional documentation, we may have to return the funds to the investors. Additionally, one investor subscribed for less than the minimum subscription amount. If the investor does not increase his subscription, we may have to return the funds to the investor. Receivables of approximately $17,836 consisted of sales made on Esellerate and Handango websites in June and paid to us in July, as well as refundable taxes from the Canadian government. The amounts receivable at December 31, 2003 of $19,679 were collected in the first quarter of 2004, and this contributed to the reduction in accounts receivable. Prepaid expenses consisted of prepaid rent. Property plant and equipment consisted of hardware equipment purchased from independent suppliers in North America for the development of our products. Consulting fees payable consisted of payables owed to two of our officers, Nicholas Miller and Mitchell Burton. During the six months ended June 30, 2004, consulting fees payable decreased by $23,300 due mostly to an extra payment made in the quarter to Mr. Miller. Deferred revenue includes support revenue in connection with the Source Code Licensing Agreement, which is being recognized each month for the 12 months from January 21, 2004 to January 20, 2005. Deferred revenue also includes an $8,500 advance payment related to a customized software license agreement to be delivered in the third quarter. Accounts payable and loan payable were higher at June 30, 2004, compared to December 31, 2003, due to increases in marketing and investor relations and the $400,000 loan resulting from the restructuring of the $2 million investment transaction (discussed above). Share subscriptions payable consisted of $325,000 that was received by us prior to the end of the quarter. During the six month period ended June 30, 2004, the net cash used by operating activities was $191,836. In order to proceed with business development and normal operations, net cash used in investing activities was $22,434. We were able to meet our cash requirements during the six months ended June 30, 2004 as a result of the cash received from subscriptions for our common shares during the second quarter and the loan received from the private placement investor, discussed above at the end of the first quarter. As disclosed above, on March 29, 2004, we received funds from a private investor in connection with a private placement which during the quarter ended June 30, 2004, was 16 restructured resulting in a return of $1,600,000 to the investor and a loan to us of $400,000. With the result of these financing initiatives, the net increase in cash and cash equivalents was $435,730 during the six months ended June 30, 2004. In order to meet our continuing cash requirements and to successfully implement our growth strategy, other than relying on revenue from our operating activities, we will continue to seek additional funding from potential investors. In the event that additional financing is required, no assurances can be given that such financing will be available in the amount required or, if available, that it can be on terms satisfactory to us. The Auditors' report on our consolidated financial statements for the year ended December 31, 2003 includes an explanatory paragraph that states that we have incurred losses since inception and had a working capital deficiency at December 31, 2003, factors which raise substantial doubt about our ability to continue as a going concern. There has been no change in these factors during the six months ended June 30, 2004. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. PLAN OF OPERATION We believe we have sufficient funds to cover our operating overhead for the next three months; however, we do not have sufficient funds to repay the aforementioned $400,000 loan. In order to satisfy our cash requirements in the next twelve months, we will need to raise additional funds. Accordingly, we intend to conduct additional financings to raise funds from private investors; however, there are no assurances that we will be able to complete any such financings. Instead of our repaying the $400,000 loan, we have tentatively agreed with the investor to (1) grant the investor a warrant to acquire 1,000,000 shares of our common stock at a price of $0.40 per share and (2) restructure the terms of the loan as a convertible note with an annual interest rate of 5% which, at the option of the investor, could be converted into 1,000,000 shares of our common stock. As of the date of this report, we are in the process of finalizing the terms of the restructuring of the loan (including the expiration date of the warrant and the due date of the convertible note) and preparing the documents necessary to formalize the restructuring. During June 2004, we began a private placement offering of 2,000,000 shares of common stock at a price of $0.50 per share for an aggregate of $1,000,000. As of June 30, 2004, we had received subscriptions in the offering totaling $325,000, which were recorded as share subscriptions payable. As of the date of this report, we have not issued the common shares in connection with the subscriptions, as we need to obtain further information from some of the investors prior to completing the subscriptions. In the event the investors are unable to provide the requested information, we may have to return the funds to the investors. Additionally, one investor subscribed for less than the minimum subscription amount. If the investor does not increase his subscription, we may have to return the funds to the investor. We intend to continue our product research and development activities to further enhance our existing product line and to create new products focused on the same markets. We 17 have budgeted in the past, and continue to budget, approximately $800,000 for research and development costs during fiscal 2004. We do not plan to purchase or sell any significant plant or equipment in 2004. We expect to increase the number of employees by approximately 10 individuals in the areas of engineering, marketing, sales, and customer support during fiscal 2004, provided we have sufficient funding to support the hiring of additional employees. We are engaged in the marketing of AirPatrol Mobile, AirPatrol Enterprise, AirPatrol Sentinel, AirSafe, Winc 2.1 and pocketWinc 2.0, software products that are intended to improve network security, wireless security and wireless connectivity. We anticipate that, if sufficiently funded over the next twelve months our focus will be: marketing our products, supporting customers, and research and development. We also intend to enter into other license agreements for our technology, similar to the source code licensing agreement described above, during the next 12 months; however, there are no assurances that we will be successful in entering into any such agreements. If we are successful in implementing our growth strategy, management believes that we can undergo a period of rapid growth. For our AirPatrol technology, we will actively search for more partners for the provision of software licenses and related software consultancy and engineering services in relation to its further development. Management expects AirPatrol Mobile, AirPatrol Enterprise, AirPatrol Sentinel, AirSafe, Winc 2.1 and pocketWinc 2.0 to ship in greater numbers in 2004, and thus will require further software developments and upgrades for the remainder of the year. OFF BALANCE SHEET ARRANGEMENTS We do not have any material off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. FORWARD-LOOKING STATEMENTS Certain statements in this Quarterly Report on Form 10-QSB, as well as statements made by us in periodic press releases, oral statements made by our officials to analysts and shareholders in the course of presentations about us, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements. There are many factors that could cause these forward-looking statements to be incorrect including, but not limited to, the following: 18 o our ability to generate desired technologies; o the lack of liquidity of our common stock; o the risks associated with technology companies; o our ability to find and retain skilled personnel; o availability of capital; o the strength and financial resources of our competitors; and o general economic conditions. ITEM 3. CONTROLS AND PROCEDURES As required by SEC rules, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures at the end of the period covered by this report. This evaluation was carried out under the supervision and with the participation of our management, including our principal executive officer and principal financial officer. Based on this evaluation, these officers have concluded that the design and operation of our disclosure controls and procedures are effective. There were no changes in our internal control over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file 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. 19 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS We are not a party to any pending legal proceedings. ITEM 2. CHANGES IN SECURITIES On March 29, 2004, we received $2,000,000 from a private investor in connection with an offering that closed April 19, 2004. The investor purchased, for an aggregate price of $2,000,000, 4,000,000 shares of common stock, a warrant to acquire 1,000,000 shares of common stock at a price of $0.50 per share exercisable until April 19, 2005, a warrant to acquire 1,000,000 shares of common stock at a price of $0.75 per share exercisable until April 19, 2005, a warrant to acquire 1,000,000 shares of common stock at a price of $1.00 per share exercisable until April 19, 2006, and a warrant to acquire 1,000,000 shares of common stock at a price of $1.25 per share exercisable until April 19, 2006. In connection with the private placement, we paid a finder's fee of $100,000 (5% of the gross proceeds) and agreed to pay an additional 5% finder's fee upon the exercise of any warrants by the investor. The investor was accredited and, as such, the securities were offered and sold pursuant to the exemption from registration contained in Section 4(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D promulgated thereunder. Subsequent to the closing, we agreed with the investor to restructure the investment. We have returned $1,600,000 to the investor (including the $100,000 finder's fee which was repaid to us). The remaining $400,000 was restructured as a loan to us repayable at our discretion and bearing interest at 5% per annum. We have been engaged in discussions with the investor to restructure the terms of the $400,000 loan. Tentatively, we have agreed with the investor to (1) grant the investor a warrant to acquire 1,000,000 shares of our common stock at a price of $0.40 per share and (2) restructure the terms of the loan as a convertible note with an annual interest rate of 5% which, at the option of the investor, could be converted into 1,000,000 shares of our common stock. As of the date of this report, we are in the process of finalizing the terms of the restructuring of the loan (including the expiration date of the warrant and the due date of the convertible note) and preparing the documents necessary to formalize the restructuring. During June 2004, we began conducting an offering of 2,000,000 common shares at a price of $0.50 per share, for an aggregate of $1,000,000. We are not utilizing any underwriters in connection with the offering; however, we have agreed to pay commissions of up to 10% to persons who assist us with the offering. We are offering the common shares only to accredited investors, as such, the securities are being offered and sold pursuant to the exemption from registration contained in Section 4(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D 20 promulgated thereunder. As of June 30, 2004, we had received subscriptions for an aggregate of $325,000 (650,000 common shares) from seven prospective investors. As of the date of this report, the common shares have not been issued to the investors, as we are awaiting additional information from certain investors in connection with the offering. In the event the investors cannot provide the required information, we may have to return the funds to the investors. Additionally, one investor subscribed for less than the minimum subscription amount. If the investor does not increase his subscription, we may have to return the funds to the investor. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K Exhibits: ----------------------------------------------------------------------- REGULATION S-B NUMBER EXHIBIT ----------------------------------------------------------------------- 2.1 Stock Exchange Agreement by and between Cirond Corporation (f/k/a eXmailit.com) and Seaside Holdings Inc. (f/k/a Cirond Technologies Inc.) dated August 29, 2003 (1) ----------------------------------------------------------------------- 2.2 First Amendment to Stock Exchange Agreement by and between Cirond Corporation and Seaside Holdings Inc. (f/k/a Cirond Technologies Inc.) dated November 13, 2003 (1) ----------------------------------------------------------------------- 2.3 Articles of Exchange (2) ----------------------------------------------------------------------- 3.1 Articles of Incorporation, as amended (2) ----------------------------------------------------------------------- 3.2 Bylaws, as amended (2) ----------------------------------------------------------------------- 10.1 Management Advisory Services Agreement with Amber Tiger Holdings Corp. dated February 1, 2002 (2) ----------------------------------------------------------------------- 10.2 Management Advisory Services Agreement with Headline Technologies Ltd. dated February 1, 2002 (2) ----------------------------------------------------------------------- 10.3 2003 Stock Option Plan (2) ----------------------------------------------------------------------- 10.4 Management Advisory Services Agreement with Amber Tiger Holdings Corp. dated January 1, 2004 (2) ----------------------------------------------------------------------- 31.1 Rule 13a-14(a) Certification of Chief Executive Officer ----------------------------------------------------------------------- 31.2 Rule 13a-14(a) Certification of Chief Financial Officer ----------------------------------------------------------------------- 21 ----------------------------------------------------------------------- REGULATION S-B NUMBER EXHIBIT ----------------------------------------------------------------------- 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Chief Executive Officer ----------------------------------------------------------------------- 32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Chief Financial Officer ----------------------------------------------------------------------- ------------------- (1) Incorporated by reference to the exhibits to the registrant's current report on Form 8-K dated November 25, 2003, filed December 5, 2003. (2) Incorporated by reference to the exhibits to the registrant's Annual Report on Form 10-KSB, filed May 7, 2004. Reports on Form 8-K: The following reports on Form 8-K were filed during the quarter ended March 31, 2004: (1) Amended Report dated November 25, 2003, filed April 19, 2004, reporting under Item 1 - Changes in Control of Registrant; Item 2 - Acquisition or Disposition of Assets; Item 4 - Changes in Registrant's Certifying Accountant; Item 5 - Other Events and Regulation FD Disclosure; and Item 7 - Financial Statements and Exhibits. The amended report was filed to include the following financial statements: Audited consolidated financial statements of CNI as at December 31, 2002 and 2001 and for the year ended December 31, 2002 and period from inception (March 7, 2001) to December 31, 2001. Unaudited consolidated financial statements of CNI as at September 30, 2003 and for the three months, nine months and period from inception (March 7, 2001) then ended. Unaudited Pro Forma Combined Financial Information for Cirond Corporation and its subsidiaries. (2) Report dated May 10, 2004, filed on May 10, 2004 reporting under Item 5 - Other Events and Regulation FD Disclosure and Item 7 - Financial Statements and Exhibits. 22 SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CIROND CORPORATION Date: August 19, 2004 By: /s/ DAVID REDEKOP ------------------------------------- David Redekop Chief Financial Officer 23 EX-31 2 exh31-1_certification.txt EXH 31-1 CERTIFICATION EXHIBIT 31.1 RULE 13A-14(a) CERTIFICATION I, Nicholas Miller, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Cirond Corporation; 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(s) 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)) 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) 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 c) disclosed in this report any change 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(s) 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 the 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. Date: August 19, 2004 /s/ NICHOLAS MILLER --------------------------------------- Nicholas Miller Chief Executive Officer EX-31 3 exh31-2_certification.txt EXH 31-2 CERTIFICATION EXHIBIT 31.2 RULE 13A-14(A) CERTIFICATION I, David Redekop, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Cirond Corporation; 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(s) 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)) 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) 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 c) disclosed in this report any change 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(s) 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 the 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. Date: August 19, 2004 /s/ DAVID REDEKOP ------------------------------------ David Redekop Chief Financial Officer EX-32 4 exh32-1_certification.txt EXH 32-1 CERTIFICATION 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 Cirond Corporation (the "Company") on Form 10-QSB for the period ending June 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Nicholas Miller, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (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. /s/ NICHOLAS MILLER - ------------------------------------------ Nicholas Miller Chief Executive Officer EX-32 5 exh32-2_certification.txt EXH 32-2 CERTIFICATION EXHIBIT 32.2 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 Cirond Corporation (the "Company") on Form 10-QSB for the period ending June 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, David Redekop, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (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. /s/ DAVID REDEKOP - -------------------------------------- David Redekop Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----