-----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, BR2eFjOckXg4tIzicKV6Ashd/vZ11Mf2jj5KbYxPLtYkZ6FH24AgFHKRP6VbhODe 5IhkW3Ubk32Y66kbxPmU6Q== 0001050502-07-000232.txt : 20070605 0001050502-07-000232.hdr.sgml : 20070605 20070605153713 ACCESSION NUMBER: 0001050502-07-000232 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20060630 FILED AS OF DATE: 20070605 DATE AS OF CHANGE: 20070605 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PLANGRAPHICS INC CENTRAL INDEX KEY: 0000783284 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 840868815 STATE OF INCORPORATION: CO FISCAL YEAR END: 0906 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-14273 FILM NUMBER: 07900926 BUSINESS ADDRESS: STREET 1: 112 EAST MAIN STREET STREET 2: FLOOR 1 CITY: FRANKFORT STATE: KY ZIP: 40601 BUSINESS PHONE: 502 223 1501 MAIL ADDRESS: STREET 1: 19039 E PLAZA DR STREET 2: STE 245 CITY: PARKER STATE: CO ZIP: 80134 FORMER COMPANY: FORMER CONFORMED NAME: INTEGRATED SPATIAL INFORMATION SOLUTIONS INC /CO/ DATE OF NAME CHANGE: 19981015 FORMER COMPANY: FORMER CONFORMED NAME: INTEGRATED SPATIAL INFORMATION SYSTEMS INC DATE OF NAME CHANGE: 19980710 FORMER COMPANY: FORMER CONFORMED NAME: DCX INC DATE OF NAME CHANGE: 19920703 10QSB 1 plang606.txt 10QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2006. OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . -------------- --------------- Commission file number 0-14273 PLANGRAPHICS, INC. ------------------ (Exact name of small business issuer as specified in its charter) COLORADO 84-0868815 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 112 East Main Street Frankfort, KY 40601 ------------------- (Address of principal executive offices) (Zip Code) Administrative Office at 1940 South Parker Road, #533 Parker, CO 80134 (720) 851-0716 -------------- (Registrant's telephone number, including area code) --------------------------------------------- (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 of 1934 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 [ ] No [X] Indicate by check mark whether the small business issuer is a shell company (as defined in Exchange Act Rule 12b-2) Yes [ ] No [X] Indicate by check mark whether the small business issuer is an accelerated filer (as defined in Exchange Act Rule 12b-2) Yes [ ] No [X] Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X] 97,214,418 shares of common stock were outstanding as of May 31, 2007. CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-QSB and the information incorporated by reference may include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. We intend the forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in these sections. All statements regarding our expected financial position and operating results, our business strategy, our financing plans and the outcome of any contingencies are forward-looking statements. These statements can sometimes be identified by our use of forward-looking words such as "may," "believe," "plan," "will," "anticipate," "estimate," "expect," "intend," and other phrases of similar meaning. Known and unknown risks, uncertainties and other factors could cause the actual results to differ materially from those contemplated by the statements. The forward-looking information is based on various factors and was derived using numerous assumptions. Forward-looking statements include, but are not limited to, statements in this Form 10-QSB regarding: o availability of working capital to meet our immediate cash and liquidity needs; o our ability to raise funds through debt and equity financing; o estimates regarding our financing needs; o our prospects for growth; o our ability to reduce costs and expenses o the collectibility of our accounts receivable; o cancellation of our contracts and order assignments; o the continuation of our relationship with the City of New York; o the increase in competition and our ability to compete effectively; o our ability to take advantage of spatial information technology markets; o the strength of our technical expertise and customer service; o the potential fluctuation of the market price of our stock; o the ability of information technology to benefit from geospatial capabilities within their technologies; o the potential gross profit margin in information technology; o the projections regarding our financial results for fiscal years ("FY") 2006 and 2007; o fluctuations in exchange rates; o the impact of recent accounting pronouncements; and o the availability and affordability of alternative lease facilities.. Although we believe that the expectations that we express in these forward-looking statements are reasonable, we cannot promise that our expectations will turn out to be correct or will be accomplished in the time frame we contemplate. Our actual results could be materially different from our expectations, including the following: o We may continue to experience significant liquidity issues and may not overcome the underlying causes; o we may not be able to obtain needed financing; o we may not achieve continued profitability; o we may experience work stoppages by subcontractors due to our late payments; o we may lose customers or fail to grow our customer base; o we may fail to compete successfully with existing and new competitors; o we may not adequately anticipate and respond to technological developments impacting information services and technology; and o we may issue a substantial number of shares of our common stock upon exercise of options and warrants, thereby causing dilution in the value of your investment; This list is intended to identify some of the principal factors that could cause actual results to differ materially from those described in the forward-looking statements included elsewhere in this report. These factors are not intended to represent a complete list of all risks and uncertainties inherent in our business, and should be read in conjunction with the more detailed cautionary statements included in our Annual Report for the year ended September 30, 2005, (filed with the SEC on Form 10-KSB) under the caption "Item 1. Business - Risk Factors" beginning on page 11, our other Securities and Exchange Commission filings, and our press releases. 2 Table of Contents Part I Financial Information 4 Item 1. Consolidated Financial Statements (Unaudited) 4 Consolidated Balance Sheet 4 Consolidated Statements of Operations 5 Consolidated Statements of Cash Flows 6 Notes to Unaudited Consolidated Financial Statements 7 Item 2. Management Discussion and Analysis 13 Item 3. Controls and Procedures 18 Part II Other Information 19 Item 1. Legal Proceedings 19 Item 6. Exhibits 19 Signature Page 20 Exhibits 21 3
Part I Financial Information Item 1. Financial Statements PLANGRAPHICS, INC. CONSOLIDATED BALANCE SHEET (Unaudited) June 30, 2006 ------------ ASSETS CURRENT ASSETS Cash and cash equivalents $ 4,635 Accounts receivable 1,761,843 Prepaid expenses and other 47,193 ------------ Total current assets 1,813,671 ------------ PROPERTY AND EQUIPMENT Equipment and furniture 391,919 ------------ 391,919 Less accumulated depreciation and amortization 336,407 ------------ 55,512 ------------ OTHER ASSETS Goodwill 1,217,107 Software devlopment costs, net of accumulated amortization of $420,735 421,929 Other 21,698 ------------ 1,660,734 ------------ TOTAL ASSETS $ 3,529,917 ============ LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES Notes payable - current maturities $ 86,903 Accounts payable 2,681,434 Accrued payroll costs 540,515 Accrued expenses 404,264 Deferred revenue and prebillings 492,136 ------------ Total current liabilities 4,205,252 ------------ LONG-TERM LIABILITIES Notes payable, less current maturities 100,000 ------------ Total long-term liabilities 100,000 ------------ TOTAL LIABILITIES 4,305,252 ------------ STOCKHOLDERS' DEFICIT Convertible preferred stock, $.001 par value, 20,000,000 shares authorized, no shares issued or outstanding -- Common stock, no par value, 2,000,000,000 shares authorized, 97,214,418 shares issued and outstanding 20,697,839 Accumulated deficit (21,473,174) ------------ Total Stockholders' Deficit (775,335) ------------ TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 3,529,917 ============ See accompanying notes to unaudited consolidated financial statements 4 PLANGRAPHICS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) For the three and nine month periods ended June 30, Nine months ended Three months ended ---------------------------- ---------------------------- 2006 2005 2006 2005 ------------ ------------ ------------ ------------ Revenues $ 3,080,096 $ 5,391,991 $ 963,053 $ 1,908,825 Cost of sales: Direct contract costs 2,160,077 3,460,070 695,638 1,083,824 Salaries and employee benefits 1,023,402 1,201,154 345,895 387,689 General and administrative expenses 696,692 688,857 205,757 240,958 Marketing expenses 57,015 89,257 14,702 25,858 Other operating expenses 173,435 209,228 50,477 61,475 Gain on lease termination -- (333,144) -- (333,144) Impairment of goodwill 240,000 240,000 ------------ ------------ ------------ ------------ Total costs and expenses 4,350,621 5,315,422 1,552,469 1,466,660 ------------ ------------ ------------ ------------ Operating income (loss) (1,270,525) 76,569 (589,416) 442,165 ------------ ------------ ------------ ------------ Other income (expense): Other income 101,344 64,669 12,460 21,356 Interest expense (107,073) (179,753) (41,498) (61,486) ------------ ------------ ------------ ------------ (5,729) (115,084) (29,038) (40,130) ------------ ------------ ------------ ------------ NET INCOME (LOSS) $ (1,276,254) $ (38,515) $ (618,454) $ 402,035 ============ ============ ============ ============ Basic and diluted income (loss) per common share $ (0.01) $ (0.00) $ (0.01) $ 0.00 ============ ============ ============ ============ Weighted average number of shares of common stock outstanding for: Basic and diluted loss per share 97,214,418 97,214,418 97,214,418 97,214,418 ============ ============ ============ ============ See accompanying notes to unaudited consolidated financial statements 5 PLANGRAPHICS, INC. Consolidated Statements of Cash Flows (Unaudited) Nine Months ended June 30, 2006 2005 ----------- ----------- Cash flows provided by operating activities: Net loss $(1,276,254) $ (38,515) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 173,435 209,228 Cancellation of debt -- (49,941) Gain on termination of capital lease -- (333,144) Stock-based compensation 9,721 -- Impairment of goodwill 240,000 -- Changes in operating assets and liabilities Accounts receivable 910,910 80,640 Allowance for doubtful accounts -- 36,081 Prepaid expenses and other 29,510 (91,469) Other assets 5,803 2,521 Accounts payable 156,758 623,900 Accrued expenses 90,629 (220,366) Deferred revenue and prebillings (332,602) 647,500 ----------- ----------- Net cash provided by operating activities 7,910 866,435 ----------- ----------- Cash flows used in investing activities: Purchases of equipment (7,425) (1,719) Proceeds from sale of investment in Jobview 198,250 -- Addition to software held for future use (154,737) -- ----------- ----------- Net cash provided by (used in) investing activities 36,088 (1,719) ----------- ----------- Cash flows used in financing activities: Proceeds from debt 11,500 1,650,900 Payments on debt (34,291) (2,412,454) Payments on obligations under capital lease -- (96,250) Payments on note payable - related parties (18,000) (9,000) ----------- ----------- Net cash used in financing activities (40,791) (866,804) ----------- ----------- Net increae (decrease) in cash 3,207 (2,088) Cash and cash equivalents at beginning of year 1,428 19,557 ----------- ----------- Cash and cash equivalents at end of period $ 4,635 $ 17,469 =========== =========== See accompanying notes to unaudited consolidated financial statements 6
PLANGRAPHICS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) Consolidated Financial Statements The summary of our significant accounting policies is incorporated herein by reference to our annual report of September 30, 2005, on Form 10-KSB filed with the Securities and Exchange Commission. Readers are also herewith advised to read the going concern statement in the report of our Independent Registered Accounting Firm and also the liquidity caution in Note B in our financial statements for the period ended September 30, 2005. The accompanying unaudited consolidated financial statements in this report have been presented on the going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. While we secured an improved factoring agreement for accounts receivable during January 2006, our viability as a going concern is dependent upon our ability to achieve profitable operations through increased sales and the higher profit margins received from Xmarc sales. During the fiscal years of 1998 through 2005, and continuing into fiscal 2006, we have experienced significant operating losses with corresponding reductions in working capital and stockholders' equity. We do not currently have any external financing in place to support operating cash flow requirements. Our revenues and backlog have also decreased substantially. To address the going concern issue, management implemented financial and operational plans to improve operating efficiencies, reduce overhead and accelerate cash from our contracts, reduce and eliminate cash losses, and position us for future profitable operations. We have reduced our general and administrative expenses by reducing occupancy costs, streamlining our executive team, and using attrition of senior and middle management to reduce costs. In August 2006, the Company sold $500,000 of redeemable preferred stock (see subsequent events, below). The accompanying unaudited consolidated financial statements for PlanGraphics, Inc. and its operating subsidiary in this quarterly report reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of the results of operations, financial position and cash flows. All significant inter-company balances and transactions have been eliminated in our consolidation. We believe that the disclosures are adequate to make the information presented not misleading. The results of this interim period are not necessarily indicative of the results for the full fiscal year ending September 30, 2006. These financial statements should be read in conjunction with the Company's financial statements and notes for the year ended September 30, 2005, included in the Company's Annual Report on Form 10-KSB. Certain prior year financial statement amounts have been reclassified to conform to the current year presentation. (2) Going Concern Statement The Company's auditors stated in their report on the financial statements of the Company for the year ended September 30, 2005 that the Company has incurred net losses for the years ended September 30, 2005 and 2004 and these factors raise substantial doubt about the Company's ability to continue as a going concern. For the nine months ended June 30, 2006, the Company incurred net losses of $1,276,254 and cash provided by operations amounted to only $7,910. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence. Management has taken aggressive action to reduce operating costs to the maximum extent possible and has established plans intended to increase the sales of the Company's products and services. Management intends to seek financing to provide funds needed to increase liquidity, fund growth in revenues and to implement its business plan; however, no assurance can be given that the Company will be able to raise any additional capital. 7 (3) Accounts Receivable The components of contract receivable are as follows: June 30, 2006 ---------- Unaudited Contract receivables: Billed receivables $1,083,213 Unbilled 678,630 ---------- 1,761,843 Less allowance for doubtful accounts -- ---------- Accounts receivable, net $1,761,843 At June 30, 2006, customers exceeding 10% of billed accounts receivable were international clients in China, 27%, and the New York City Department of Environmental Engineering (NYDEP), 22%. At the same date, customers exceeding 10% of revenue for the quarter were County of Los Angeles, 16%, and NYDEP, 32%, and China, 17%. At June 30, 2005, the City of New York accounted for 17% of billed accounts receivable. It also accounted for 55% of revenue for the quarterly period ended June 30, 2005. Billing terms are negotiated in a competitive environment and are based on reaching project milestones. When appropriate we establish a reserve ("allowance for doubtful accounts") for estimated uncollectible amounts of billed and unbilled accounts receivable. When we determine that the collection of a billed or unbilled account receivable related to an active contract is not probable, we reduce the contract value accordingly. When we determine that the collection of a billed or unbilled account receivable related to a completed contract is not probable, we record bad debt expense and increase the allowance for doubtful accounts. When we identify that the collection of a reserved account receivable will not be collected, we write off the account receivable and reduce the allowance for doubtful accounts. Deferred revenue amounted to $492,136 at June 30, 2006 and represents amounts billed in excess of amounts earned. (3) Lease Obligations We lease various equipment as well as facilities under operating leases that expire through the year 2011. (4) Stock-Based Compensation. We adopted the provisions of SFAS No. 123R effective January 1, 2006. SFAS No. 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations as compensation expense (based on their fair values) over the vesting period of the awards. Prior to January 1, 2006, we accounted for employee options under the recognition and measurement provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"). Accordingly, we would recognize compensation expense only if we granted options with a discounted exercise price. Any resulting compensation expense would then have been recognized ratably over the associated service period. No stock-based employee compensation expense relating to our stock options was reflected in net loss, as all options granted had an exercise price equal to or greater than the market value of the underlying Common Stock on the respective date of grant. Prior to January 1, 2006, we provided pro-forma disclosure amounts in accordance with Statement of Financial Accounting Standard, ("SFAS") No. 148, "Accounting for Stock-Based Compensation--Transition and Disclosure" ("SFAS No. 148"), as if the fair value method defined by "Accounting for Stock-Based Compensation" ("SFAS No. 123"), SFAS No. 123 had been applied to the stock-based compensation. 8 Effective January 1, 2006, we adopted the fair value recognition provisions of SFAS No. 123R , Share Based Payment, using the modified prospective transition method, and therefore we have not restated prior periods' results. Under this transition method, employee stock-based compensation expense for the three months ended March 31, 2006, would include compensation expense for all stock-based compensation awards granted but not yet fully exercisable, prior to January 1, 2006; all of our preexisting awards were already fully vested as of that date. The fair value of the options granted was determined at the original grant dates in accordance with the provisions of SFAS No. 123. Stock-based compensation expense for all share-based payment awards granted after December 31, 2005, is based on the grant-date fair value estimated in accordance with the provisions of SFAS No. 123R. We recognize these compensation costs over the requisite service period of the award, which is generally the vesting term of the options. Option valuation models (we use the Black-Scholes model) require the input of highly subjective assumptions including the expected life of the option. Because our employee stock options have characteristics significantly different from those of traded options (which we do not have), 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 our employee stock options. We granted options to acquire 972,144 shares of common stock during the quarter ended June 30, 2006 of this nine month period. Under the modified prospective method, results for prior periods have not been restated to reflect the effects of implementing SFAS No. 123R. The following table illustrates the effect on net income and earnings per share for the 2005 first and second quarters as if we had applied the fair value recognition provisions of SFAS No. 123, Accounting for Stock-Based Compensation as amended by SFAS No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure, Amendment of SFAS No. 123, to stock-based employee compensation. Our net Income (losses) and net income (loss) per share for the periods ended June 30, 2005 would have changed to the adjusted net loss shown below. No pro forma disclosure for adjusted net loss has been presented here for the three and nine month periods ended June 30, 2006 as share-based payments to employees have been accounted for under SFAS 123(R)'s fair-value method for such periods and the expense was included in results of operations. Nine months Three months Ended Ended 2005 2005 ---------- ----------- Net loss: As reported $ (38,515) $ 402,035 Add: Stock-based compensation included in reported net loss -- -- Deduct: Proforma option expense (36,382) (18,169) ---------- ----------- Adjusted net income (loss) $ (74,897) $ 383,866 ========== =========== Basic loss per share: As reported $ (0.00) $ 0.00 ========== =========== Adjusted basic income (loss) per share $ (0.00) $ 0.00 ========== =========== Diluted loss per share As reported $ (0.00) $ 0.00 ========== =========== Adjusted diluted income (loss) per share $ (0.00) $ 0.00 ========== =========== 9
Stock Options Shares Range of Weighted-average Underlying Exercise option price Options Prices per share - -------------------------------------------------------------------------------------- Options outstanding at October 1, 2005 10,356,760 $0.015-0.170 $ 0.042 Options granted 972,144 $ 0.015 $ 0.015 Options exercised - $ - $ - Options canceled/expired 42,000 $0.03-0.170 $ 0.070 ---------- ------------ ------- Options outstanding at June 30, 2006 11,286,904 $ 0.042 ========== ======= ========== ======= Options exercisable at June 30, 2006 11,286,904 $ 0.042 ========== ======= There were no options exercised during the period ending June 30, 2006; accordingly, the total intrinsic value of options exercised to date during 2006 is $0. The range of exercise prices, shares, weighted-average remaining contractual life and weighted-average exercise price for all options outstanding at June 30, 2006 is presented below: Range of Remaining Weighted-average Exercise Prices Shares Contractual Life Exercise Price ----------------------------------------------- ---------------- $0.015-$0.040 8,345,646 2.2 $ 0.031 $0.06-$0.070 2,941,258 .85 years $ 0.068 ----------- ------- 11,286,904 $ 0.042 =========== ======= The fair value of the options granted in the periods ending June 30, 2006 and 2005, (including the pro forma disclosure for adjusted net loss, above) was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions for the above years: 2006 2005 ---- ---- Dividend yield 0.00% 0.00% Expected volatility 1.22% 120-140 Risk free interest rates 5.10% 2.75% Expected lives 5 years 5 years The weighted-average grant date fair value for options granted during 2006 and 2005 was approximately $0.01 and $0.04, respectively. For the nine months ended June 30, 2006, net loss and the loss per share reflect the actual deduction for stock-based compensation expense. The total stock-based compensation expense for the nine months ended June 30, 2006 was $9,721. The expense for stock-based compensation is a non-cash expense item. 10 Because we did not have any unvested options or warrants as of June 30, 2006, there was no unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Equity Compensation Plan. (5) Net Loss Per Common Share. Basic loss per share includes no dilution and is computed by dividing income or loss attributable to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution of securities that could share in the earnings of an entity, when appropriate. The total number of shares of common stock issuable upon exercise of warrants and options outstanding and exercisable at June 30, 2006 and 2005, were 15,144,146 and 13,328,965, respectively. 2006 2005 ---------- ---------- Options 11,286,904 8,498,634 Warrants 3,857,212 4,830,331 ---------- ---------- Total outstanding 15,144,146 13,328,965 ========== ========== The following is a reconciliation of the number of shares used in the Basic Earnings Per Share ("EPS") and Diluted EPS computations: Periods ending June 30, Nine months Three months ----------------------- ----------------------- 2006 2005 2006 2005 Basic EPS share quantity 97,214,418 97,214,418 97,214,418 97,214,418 Effect of dilutive options and warrants* -- -- -- -- ----------------------- ----------------------- Dilutted EPS share quantity 97,214,418 97,214,418 97,214,418 97,214,418
*The closing market price of PGRA on June 30, 2005 was lower than the exercise price of all outstanding options and warrants. Because of that, we assume that none of the outstanding options or warrants would have been exercised and therefore none were included in the computation of diluted earnings per share for quarter ended June 30, 2005. Further, for the net-loss periods we excluded any effect of outstanding options and warrants as their effect would be anti-dilutive. (6) Supplemental Cash Flow Information During the nine months ended June 30, 2006, PlanGraphics paid $90,694 of interest. No payments of taxes were made. (7) Impairment of goodwill As a result of an internal analysis of goodwill, the Company has recorded an impairment of $240,000 to goodwill at June 30, 2006. (8) Foreign Currency Translation Assets and liabilities of the Company's foreign subsidiary are translated at the rate of exchange in effect at the end of the period. Net sales and expenses are translated at the average rate of exchange for the period. The total of all foreign currency transactions and translation adjustments were considered to be insignificant as of the end of the reporting period. (9) Provision for Income Taxes At the beginning of this fiscal year we had net operating loss carryforwards of $15.2 million with expirations through 2025. At June 30, 2006, the amount of the net operating loss carryforward balance is estimated at $16.5 million. Since we 11 are unable to determine that deferred tax assets exceeding tax liabilities are more likely than not to be realized, we have recorded a valuation allowance equal to the net deferred tax assets at September 30, 2005 and at June 30, 2006. As a result, no provision or benefit for income tax has been recorded for the three months ended June 30, 2006. (10) Recently Issued Accounting Pronouncements In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159 ("SFAS No. 159"). SFAS No 159, which amends SFAS No. 115 allows certain financial assets and liabilities to be recognized, at the Company's election, at fair market value, with any gains or losses for the period recorded in the statement of income. SFAS No. 159 included available-for-sales securities in the assets eligible for this treatment. Currently, the Company records the gains or losses for the period in the statement of comprehensive income and in the equity section of the balance sheet. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007, and interim periods in those fiscal years. The Company has not determined the impact, if any, of the adoption of SFAS No. 159. (11) Subsequent Events Sale of Preferred Stock. On August 21, 2006, the Company entered into a Series A Preferred Stock Purchase Agreement with Nutmeg Group, LLC pursuant to which it sold and Nutmeg Group, LLC bought, for an aggregate purchase price of $500,000, a total of 1,000 shares (the "Shares") of the Company's Series A 12% Redeemable Preferred Stock (the "Series A Preferred Stock") and a warrant to purchase shares of the Company's common stock equal to 80 percent of the fully diluted outstanding shares with an aggregate exercise price of $10.00 (the "Warrant,") and together with the Shares (the "Securities"). The Company intends to use the net proceeds of the sale of the Securities to pay its independent accountants amounts due to complete the 2005 annual report and subsequent quarterly reports, to satisfy certain of its accounts payable, and for general working capital purposes. Exercise of the Warrant by the investor could result in a change of control. Resignation of Directors. Board Chairman Gary S. Murray and Director Bill Strang tendered their resignations from the Board on August 16 and 17, 2006, respectively. Both Directors cited personal reasons for their resignation. On March 22, 2007, Raymund O'Mara tendered his resignation without citing a reason. Expiration of Contract with Executive. On October 31, 2006, a contract between the Company and its Chief Operating Officer expired without renewal. The officer determined on November 7, 2006, that he would not enter into any further extension. Extension of Employment Agreements for Parent Company Officers. During February 2007 the Company entered into amendments to the employment agreements of its chief executive officer and its chief financial officer, to extend the term of their existing employment agreements through December 31, 2007. Additional information was provided in Form 8-K, dated January 31, 2007 and filed with the Securities and Exchange Commission. Retention of Guilford Securities. On October 1, 2006, the Company retained Guilford Securities as a non-exclusive corporate finance advisor. 12 ITEM 2: MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Executive Summary of PlanGraphics, Inc. PlanGraphics is a full life-cycle systems integration and implementation firm, providing a broad range of services in the design and implementation of information technology related to spatial information management in the public and commercial sectors. During FY 2005 approximately 76% of our sales were to customers in federal, state and local governments, and utilities; 18% to international customers and the remaining 6% to commercial enterprises. Our customers are located in the United States and foreign markets requiring locational or "spatial" information. The mix of customers remained constant through the third quarter of 2006. o We have a working capital deficit at June 30, 2006, of $2,391,581, and have had recurring net losses in all prior fiscal years back to 1998. The future viability of PlanGraphics is dependent upon our ability to achieve profitability in future operations. o Management's foremost challenge is coping with limited cash flows. o The Company does not have a line of credit; we depend on internal cash flow to support operations. Internal cash flow is affected significantly by customer contract terms, delays in foreign currency transfers and our progress achieved on projects. o Management continues to carefully manage payments and from time to time has borrowed funds from officers and employees to meet temporary working capital shortages. o In January 2006 we entered into an extension of our Master Factoring Agreement with Rockland which extended it through June 30, 2007, reduced the required monthly volume down to $350,000 per month and increased to 85% of face value the amount paid on invoices submitted. o We have reduced our general and administrative expenses by reducing occupancy costs, constraining overhead and administrative costs and streamlining our management and production teams. o As a result of our very constrained cash flows, we sometimes delay payments to subcontractors and from time to time have delayed management and employee payrolls. We have experienced the departure of certain technical employees, reduced availability of subcontractors and increased legal costs related to negotiating work-out agreements and settlements with creditors. o About our business: o Our consulting and systems integration and implementation capabilities include business and web-enabled solutions exploiting the advanced technologies of spatial information management systems (also known as geographic information systems), data warehousing, electronic document management systems and internal and external networks. o Our contracts are often awarded as long as two to three years after we initially contact a customer. In many instances we first provide consulting services to determine an appropriate solution to a need and then we subsequently receive a larger contract. o Our consulting and implementation practice operates nationally and abroad. We are also pursuing opportunities related to emergency preparedness and public safety throughout the U.S. 13 o We believe the critical factors for the future success of PlanGraphics are: o Achieving positive cash flows from operations by controlling costs; o Securing financing arrangements to fund operations; o Changing our revenue mix to increase the amount of higher margin software sales; o Increasing lagging revenue through expanded lead generation and sales; and o Attaining net income. Financial Condition The following discussion of liquidity and capital resources addresses our requirements and sources as of June 30, 2006 and should be read in conjunction with the accompanying unaudited consolidated interim financial statements and the notes to those statements appearing elsewhere in this report and our audited consolidated financial statements and the notes thereto for the year ended September 30, 2005, appearing in our FY 2005 Form 10-KSB. Readers should take into account the auditor's going concern statement as well as the liquidity caution appearing in Note B of the September 30, 2005 financial statements. The Company presently continues to encounter liquidity issues and is carefully controlling costs and expenses while managing its resources to deal with very limited cash availability. As a result, from time to time we have experienced delays in making payments of payrolls and amounts owed to subcontractors. Cash Flow The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. During fiscal years 1998 through 2006, we experienced significant losses with corresponding reductions in working capital and net worth, excluding the impact of certain one time gains, and do not currently have any external financing in place to support operating cash flow requirements. Our revenues and backlog have also decreased substantially during the past two years. If we do not have the cash flow necessary to meet our operating and capital requirements, we will be forced to restrict operating expenditures to match available resources or seek additional financing, which may be available only at unfavorable interest rates or not available at all. These factors, among others, raise substantial doubt about our ability to continue as a going concern. We continue to experience significant liquidity issues that cause us to finance the resources needed with funds from operations and accretion of amounts owed to creditors. As a result, from time to time we have delayed payrolls and payment of subcontractor invoices. As of June 30, 2006, we had a net working capital deficit of ($2,391,581) versus a net working capital deficit of ($1,545,375) at September 30, 2005. This additional decrease in working capital resulted from the operating losses. In the nine months ended June 30, 2006, operations provided net cash of $7,910, as compared to $866,435 provided by operations during the period ended June 30, 2005. This $858,525 change was primarily a result of the decrease in the deferred revenue balance. Our accounts receivable at June 30, 2006, have decreased by $910,910 since September 30, 2005, as we collected accounts. Notes payable with current maturities increased $12,209 from September 30, 2005 as a result of the maturing of certain notes. In the period ended June 30, 2006, investing activities provided $36,088 while we used $1,719 in investing activities during the period ended June 30, 2005. The primary reason for the change was the receipt of amounts due for the sale of our investment in Jobview. 14 Financing activities in the period ended June 30, 2006, used $40,791 as compared to net cash used of $866,804 in financing activities in the period ended June 30, 2005. The change was a result of moving from a line of credit to a factoring arrangement in which the factor purchases our invoices. Accounts receivable balances at June 30, 2006 and 2005, include both billed receivables and work-in-process. The payment terms on accounts receivable are generally net 30 days and collections generally average 45 to 90 days after invoicing. Although we experienced some delayed collections, the typical collection period is consistent with industry experience with clients in the public sector. While this sometimes results in increased aging of the billed accounts receivable balance, our history reflects consistent collectibility of the receivable balances. Work-in-process represents work that has been performed but has not yet been billed. This work will be billed in accordance with milestones and other contractual provisions. The amount of unbilled revenues will vary in any given period based upon contract activity. Certain delays in payment are associated with a number of factors, reflecting the financial vagaries of public sector organizations, routine administrative procedures and the normal processing delays often experienced in summer and holiday periods. Management believes that we will receive payment from all remaining sources but with some delays in timeliness. As of June 30, 2006, our billed contract accounts receivable were $1,083,213 and we had no allowance for uncollectible accounts. At the end of the current quarter billed receivables in arrears greater than 60 days increased from $501,181 at September 30, 2005 to 642,447 and four China clients accounted for $644,504 at June 30, 2006. Subsequently $325,231 was collected and the Company believes the remaining balance will ultimately be collected. The elevated levels of aged accounts receivable we experience, coupled with the need to finance projects with cash from operations, places severe cash flow constraints on the Company requiring it to very closely manage its expenses and payables. We do not have a line of credit to support operations cash requirements. From time to time we have also borrowed funds from officers and employees to meet working capital needs. Capital Resources We entered into a First Amendment to the Master Factoring Agreement ("Amendment") with Rockland Credit Finance, LLC ("Rockland") effective January 9, 2006. The Amendment extended the term of the Master Factoring Agreement to June 30, 2007, The Amendment, among other things, increased the amount by which Rockland will pay PlanGraphics for accounts receivable invoices from 80% of the face value to 85% of the face value of such invoices and reduced the minimum monthly volume that PlanGraphics is required to submit to Rockland for purchase from $500,000 to $350,000. As of June 30, 2006, our cash and cash equivalents had increased from September 30, 2005 to $4,365. Operations Outlook While we now have secured an improved new factoring arrangement (see above) and have raised funds from the sale of our interest in Jobview, we expect that our operations will continue to be impacted by liquidity issues through the end of calendar year 2007. We continue to believe that information technology, which includes e-solutions, spatial data management and geographic information systems or "GIS," is a global market that is rapidly evolving and becoming the basis for a myriad of new applications and services to solve customer problems and create additional markets. Subsequent to the economic stress of previous years on our primary customer base, the public sector, we see continuing and increased expenditures in the service areas where we are most significantly involved. In addition, our decision to acquire certain proprietary and licensable technologies for use as middleware to spatial and non spatial databases provides both a solution vehicle for an expanded customer base, inclusive of federal and commercial sectors, and a recurring revenue stream. These solutions include emergency response, non-emergency client/constituent management systems and asset management including utility infrastructure and real property. We believe our decisions were well timed and we further believe that market will produce material additional work flow for the company in response to Homeland and commercial security needs. We believe our purchase of the XMARC intellectual property and spatial integration software components provides us with increased access with additional solution architectures to federal, state and local government clients 15 in addition to commercial enterprises. We have continued to build revenue from maintenance of existing XMARC systems already in the field resulting from additional licensing of Xmarc and STEPs,a derivative product. By combining the XMARC technologies with those of other suppliers of advanced software technologies, we have developed a range of Internet based product and service offerings for use in emergency response and recovery as well as a portal to other enterprise information systems including executive dashboards. We believe our acquisition of Xmarc Limited in the United Kingdom provides us with new customers and Value Added Resellers opportunities in Europe. As of June 30, 2006, we had work backlog and assignments of approximately $7.2 million, a decrease from the $15.2 million reported for September 30, 2005 and from the $13.9 million as of July 31, 2005. All of the backlog at June 30, 2006 was funded versus approximately $11.4 million at September 30, 2005 and $10 million at July 31, 2005. More recently our backlog and assignments as of February 17, 2007, amount to approximately $ 4.8 million, all of which is funded. The decrease in backlog and assignments from June 30, 2005 was caused by the drawdown of multi-year contracts, the termination of contracts with a state and local government agency, the transfer of a China based project with associated backlog to a business partner; delays in the completion of several competitive awards also hampered the process of securing new contracts to replace backlog converted to revenue. We report backlog based on executed contracts. Assignments include contract awards where documentation is pending or task orders based on existing indefinite quantity contract vehicles. A typical contract, standard for the industry, includes terms that permit termination for convenience by either party with 30 days prior notice. The Company's non-binding letter of intent to merge with IceWEB, Inc. of Herndon, Virginia, as amended, expired without action by either party on December 31, 2005 in accordance with its terms. The Board of Directors continues to actively explore strategic alternatives for PlanGraphics, Inc. and retained Guilford Securities in October 2006 to provide advisory services on such efforts. We have made progress in positioning ourselves as a provider of Internet-accessible data repositories and warehouses that leverage spatial data through portals. Several of our current assignments and a material portion of our contract backlog and assignments are associated with these initiatives. Currently, we plan to grow internally through strategic alliances that enhance shareholder value and joint marketing initiatives that allow us to increase business with our limited resources while continuing to examine a diverse range of options to enhance shareholder value, including the sale of operating assets, the licensing of intellectual property and merger and acquisition opportunities. Results of Operations Result of Operations for the three months Ended June 30, 2006 Revenues Our revenues decreased $945,772 or 50% from $1,908,885 for the quarter ended June 30, 2005 to $963,053 for the quarter ended June 30, 2006. This decrease was caused by the winding down of certain projects, by reduced activities on open contracts and by a lower number of active contracts in the 2006 period. Deferred Revenue decreased $332,602 from the beginning of year balance of $824,738 because of work accomplished on certain GIS and Xmarc based contracts that caused revenue to be recognized and thereby reduce deferred revenue. Costs and Expenses Total costs and expenses for the quarter ended June 30, 2006 amounted to $1,552,469, an $85,809 increase from the $1,466,660 for the quarter ended June 30, 2005. This 6% increase is primarily due to expense associated with the impairment of goodwill of $240,000. Had the impairment not been recorded, total costs and expenses for the quarter would have been $1,312,469 for an 11% decrease. 16 Direct contract costs decreased by $388,186, or 36%; the decrease was primarily related to decreases of $75,393, or 15% in direct labor and $319,605, or 80%, in subcontractor expense. However, the overall percent decrease in direct contract costs was lower than the 50% decrease in revenues which contributes to excessively high costs and expenses . Salaries and benefits decreased by approximately $41,794, or 11% as a result of attrition related to the reduced revenue. General and administrative expenses decreased 15% and marketing expenses decreased by $11,156, or 43%, as a result of limited budgets; and finally, other operating costs experienced a decrease of $10,998, or 18%, primarily as a result of less depreciation during the current period. Net loss On a consolidated basis, our operating loss for the quarter ended June 30, 2006 was $589,416, as compared to operating income of $442,165 in the prior year. This change is attributable to decreased revenues during the current quarter coupled with insufficient decrease in cost of sales. Interest expense amounted to $41,498 in the current quarter and compares favorably with $61,486 during the same period of the prior year; the decrease occurred because of the absence of a line of credit. Other income decreased from the prior year total by $8,896. On a consolidated basis, we incurred a net loss of $618,454 for the quarter ended June 30, 2006 as compared to the net income of $402,035 for the prior year period. The impacts noted above account for the change to a net loss. Result of Operations for the nine months Ended June 30, 2006 Revenues Our revenues decreased $2,311,895 or 43% from $5,391,991 for the nine month period ended June 30, 2005 to $3,080,096 for the period ended June 30, 2006. This decrease was caused by the winding down of certain projects, by reduced activities on open contracts and by a lower number of active contracts in the 2006 period. Costs and Expenses Total costs and expenses for the period ended June 30, 2006 amounted to $4,350,621, a decrease of $964,801, or 18%, compared to $5,315,422 for the period ended June 30, 2005. This 18% decrease is significantly less than the 43% decrease in revenue for the period. The current year total includes $240,000 of goodwill impairment expense and did not include a one time gain of $333,144 seen in the prior year. Direct contract costs decreased $1,299,993 or 38% slightly less than the decrease in revenue. Salaries and benefits decreased by approximately $177,752, or 15%, due to staff reductions and attrition related to the reduced revenue. General and administrative expenses increased slightly by 1%, marketing expense decreased $32,242, or 36% due to limited budgets ; and, finally, other operating costs decreased by $35,793, or 17% because of the absence of depreciation expenses in the current year. Net loss On a consolidated basis, our operating loss for the nine month period ended June 30, 2006 was $1,270,525, compared to the prior year operating income of $76,569. This change is attributable to decreased revenues during the current period coupled with insufficient decreases in cost of sales and the goodwill impairment expense. Interest expense amounted to $107,073 in the current nine month period and compares favorably with $179,753 during the same period of the prior year; the decrease is attributable to the absence of line of credit financing during the current year. Other income increased from the prior year total by $36,675 as a result of increased miscellaneous revenue from distributions received for an investment. On a consolidated basis, we incurred a net loss of $1,276,254 for the nine months ended June 30, 2006 as compared to the net loss of $38,515 for the prior year period. The impacts noted above account for the increase in the net loss. 17 Income Taxes and Deferred Tax Valuation Allowance -- FY 2006 We reported a net loss for the nine months ended June 30, 2006. Coupled with losses in prior years, we have generated a sizeable federal tax net operating loss, or NOL, carryforward which totals approximately $16.5 million as of June 30, 2006, versus $15.2 million at September 30, 2005. We have established a 100% valuation allowance on the net deferred tax asset arising from the loss carryforwards in excess of the deferred tax liability. The valuation allowance has been recorded as our management has not been able to determine that it is more likely than not that the deferred tax assets will be realized. As a result, no provision or benefit for federal income taxes has been recorded for the six months ended June 30, 2006. Critical Accounting Policies and Estimates We do not have any updates to the Critical Accounting Policies disclosed in Item 6, Part Two of our Annual Report on Form 10-KSB for September 30, 2005 and filed with the SEC. ITEM 3. CONTROLS AND PROCEDURES Inherent limitations of Control Systems We maintain appropriate internal controls and disclosure controls, and related procedures, that are designed to ensure that financial and other information required to be disclosed in the Company's Exchange Act reports is recorded, processed, summarized and reported promptly and properly to meet the current requirements. Such controls and procedures, no matter how well designed and operated, may have inherent limitations in a cost-effective control system, and therefore misstatements due to error or fraud may occur and not be detected. See the expanded discussion in Item 14 of Part Two in our Form 10-KSB for September 30, 2005. Evaluation of Disclosure Controls and Procedures Based on their most recent evaluation, which was completed as of the end of the period covered by this report, and subject to the limitations above, both the company's Chief Executive Officer and Senior Financial Officer believe that our disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) are effective in timely alerting management to material information required to be included in this Form 10-QSB and other Exchange Act filings. Changes in Internal Controls Based upon their most recent evaluation which was completed as of the end of the period covered by this report, and subject to the limitations above, both our Chief Executive Officer and Senior Financial Officer believe that, other than as described below, there were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any significant deficiencies or material weaknesses of internal controls that would require corrective action. As of the date of filing this Form 10-QSB, we have begun the extensive process of documenting and evaluating our internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act for fiscal year 2005. Section 404 requires an annual management report of the effectiveness of our internal controls over financial reporting and that our independent registered public accounting firm attest to the accuracy of management's evaluation report. 18 PART II- OTHER INFORMATION ITEM 1: LEGAL PROCEEDINGS. There has been no change in status to the information reported in our Form 10-KSB for the year ended September 30, 2005. ITEM 6. EXHIBITS. (a) Exhibits: Exhibit 31.1, Section 302 Certification for the principal executive officer, dated June 1, 2007, and filed on page 21 of this report. Exhibit 31.2, Section 302 Certification for the principal financial officer, dated June 1, 2007, and filed on page 22 of this report. Exhibit 32.1, Sarbanes-Oxley Section 906 Certification for Chief Executive Officer, dated June 1, 2007, and filed on page 23 of this report. Exhibit 32.2, Sarbanes-Oxley Section 906 Certification for principal financial officer, dated April 23, 2007, and filed on page 24, of this report. 19 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PLANGRAPHICS, INC. Dated: June 1, 2007 /S/ Fred Beisser ---------------- Frederick G. Beisser Senior Vice President-Finance, Secretary & Treasurer (Principal financial and accounting officer) 20 EX-31.1 2 plang60631-1.txt CERTIFICATION Exhibit 31.1 SECTION 302 CERTIFICATE OF THE CHIEF EXECUTIVE OFFICER I, John C. Antenucci, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of PlanGraphics, Inc. for the quarterly period ended June 30, 2006; 2. Based on my knowledge, this quarterly 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 annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date. 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: June 1, 2007 /s/ John C. Antenucci ----------------------------------- John C. Antenucci President and Chief Executive Officer EX-31.2 3 plang60631-2.txt CERTIFICATION Exhibit 31.2 SECTION 302 CERTIFICATE OF THE PRINCIPAL FINANCIAL & ACCOUNTING OFFICER I, Frederick G. Beisser, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of PlanGraphics, Inc. for the quarterly period ended June 30, 2006; 2. Based on my knowledge, this quarterly 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 annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date. 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: June 1, 2007 /s/ Fred Beisser ----------------------------------- Frederick G. Beisser Senior Vice President - Finance (principal financial officer) EX-32.1 4 plang60632-1.txt 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 PlanGraphics, Inc. (the "Company") on Form 10-QSB for the period ending June 30, 2006, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 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 result of operations of the Company. /s/ John C. Antenucci - -------------------- John C. Antenucci Chief Executive Officer June 1, 2007 A signed original of this written statement required by Section 906 has been provided to PlanGraphics, Inc. and will be retained by PlanGraphics, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. EX-32.2 5 plang60632-2.txt 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 PlanGraphics, Inc. (the "Company") on Form 10-QSB for the period ending June 30, 2006, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 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 result of operations of the Company. /s/ Fred Beisser - ----------------------------- Frederick G. Beisser Senior Vice President - Finance (principal financial officer) June 1, 2007 A signed original of this written statement required by Section 906 has been provided to PlanGraphics, Inc. and will be retained by PlanGraphics, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----