SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark
One)
T
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Quarterly
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
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For the
quarterly period ended March 31, 2008
or
*
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Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
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For the
transition period from __________ to __________
Commission
file Number 000-17288
SECURE
ALLIANCE HOLDINGS CORPORATION
Delaware
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75-2193593
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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5700
Northwest Central Dr, Ste 350, Houston, Texas
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77092
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (713) 783-8200
Indicate
by check mark whether the registrant: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirement for
the past 90 days. Yes T
No *
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):
Large
accelerated filer *
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Accelerated
filer *
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Non-accelerated
filer T
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(Do
not check if a smaller reporting company)
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Smaller
reporting company *
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Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). Yes T
No *
The
number of shares of common stock outstanding as of the close of business on May
14, 2008 was 19,484,032.
SECURE ALLIANCE HOLDINGS CORPORATION
TABLE
OF CONTENTS
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Page
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PART I.
FINANCIAL INFORMATION
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3
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3
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4
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5
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6
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7
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9
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11
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11
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PART
II. OTHER INFORMATION
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11
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11
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11
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11
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12
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12
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12
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13
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Certification
Pursuant to Section 302
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Certification
Pursuant to Section 906
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PART I. FINANCIAL INFORMATION
ITEM
1. FINANCIAL STATEMENTS
SECURE
ALLIANCE HOLDINGS CORPORATION AND SUBSIDIARIES
(A
DEVELOPMENT STAGE COMPANY)
CONDENSED
BALANCE SHEETS
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March
31, 2008
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September 30,
2007
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(unaudited)
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ASSETS
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Current
Assets:
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Cash
and cash equivalents
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Marketable
securities available-for-sale
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Interest
and other receivables
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Prepaid
expenses and other assets
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LIABILITIES
AND SHAREHOLDERS’ EQUITY
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Commitments
and contingencies
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Common
stock, $.01 par value, authorized 100,000,000 shares; issued and
outstanding 19,484,032 and 19,441,524 shares,
respectively
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Additional
paid-in capital
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Accumulated
other comprehensive income
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Total
shareholders’ equity
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Total
liabilities and shareholders’ equity
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See
accompanying Notes to Condensed Financial Statements.
SECURE ALLIANCE HOLDINGS CORPORATION AND SUBSIDIARIES
(A
DEVELOPMENT STAGE COMPANY)
CONDENSED
STATEMENTS OF OPERATIONS
(UNAUDITED)
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Three
Months Ended
March
31,
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Six
Months Ended
March
31,
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2008
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2007
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2008
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2007
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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Selling,
general and administrative
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505,057 |
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244,850 |
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840,342 |
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620,921 |
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(505,057
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) |
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(244,850
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) |
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(840,342
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) |
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(620,921
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) |
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132,615 |
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148,646 |
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307,298 |
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317,225 |
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Reorganization
fee paid to Laurus
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— |
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— |
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— |
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(6,508,963
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) |
Total
other income (expense)
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132,615 |
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148,646 |
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307,298 |
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(6,191,738
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) |
Loss
from continuing operations
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(372,442
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(96,204
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(533,044
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(6,812,659
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Income
from discontinued operations:
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Gain
on sale of Cash Security business, net of tax
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— |
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— |
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— |
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13,281,116 |
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$ |
(372,442 |
) |
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$ |
(96,204 |
) |
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$ |
(533,044 |
) |
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$ |
6,468,457 |
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Basic
earnings (loss) per share:
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Loss
from continuing operations
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$ |
(0.02 |
) |
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$ |
(0.01 |
) |
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$ |
(0.03 |
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$ |
(0.35 |
) |
Income
from discontinued operations
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— |
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— |
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— |
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0.67 |
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$ |
(0.02 |
) |
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$ |
(0.01 |
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$ |
(0.03 |
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$ |
0.32 |
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Weighted
average common shares outstanding
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19,444,794 |
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19,521,042 |
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19,443,150 |
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19,686,040 |
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Diluted
earnings (loss) per share:
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Loss
from continuing operations
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$ |
(0.02 |
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$ |
(0.01 |
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$ |
(0.03 |
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$ |
(0.35 |
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Income
from discontinued operations
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— |
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— |
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— |
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0.67 |
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$ |
(0.02 |
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$ |
(0.01 |
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$ |
(0.03 |
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$ |
0.32 |
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Weighted
average common and dilutive shares outstanding
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19,444,794 |
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19,521,042 |
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19,443,150 |
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19,726,445 |
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See
accompanying Notes to Condensed Financial Statements.
SECURE ALLIANCE HOLDINGS CORPORATION AND SUBSIDIARIES
(A
DEVELOPMENT STAGE COMPANY)
CONDENSED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
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Three
Months
Ended
March 31,
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Six
Months
Ended
March 31,
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2008
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2007
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2008
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2007
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Net
Income (loss)
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$ |
(372,442 |
) |
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$ |
(96,204 |
) |
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$ |
(533,044 |
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$ |
6,468,457 |
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Other
comprehensive income loss:
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Unrealized
loss on marketable securities available-for-sale
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(60,660
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(311,508
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(202,200
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(103,799
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Comprehensive
income (loss)
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$ |
(433,102 |
) |
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$ |
(407,712 |
) |
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$ |
(735,244 |
) |
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$ |
6,364,658 |
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See
accompanying Notes to Condensed Financial Statements.
SECURE ALLIANCE HOLDINGS CORPORATION AND SUBSIDIARIES
(A
DEVELOPMENT STAGE COMPANY)
CONDENSED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
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Six
Months Ended March 31,
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2008
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2007
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Cash
flows from operating activities:
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Adjustments
to reconcile net income (loss) to net cash used in operating
activities:
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Amortization
of stock options issued to officers
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Expenses
related to issuance of stock pursuant to consulting
agreement
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Changes
in assets and liabilities:
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Interest
and other receivables
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Prepaid
expenses and other assets
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Accounts
payable and accrued liabilities
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Net
cash flows used in discontinued operations
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Net
cash used in operating activities
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Cash
flows from investing activities:
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(Increase)
decrease in time deposits
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Increase
in notes receivable
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Decrease
in marketable securities held-to-maturity
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Net
cash flows provided by discontinued investing
activities
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Net
cash provided by investing activities
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Cash
flows from financing activities:
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Redemption
of shares held by Laurus
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—
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Proceeds
from exercise of warrants and options
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—
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Decrease
in restricted cash
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—
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Net
cash used in financing activities
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Net
increase in cash and cash equivalents
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Cash
and cash equivalents at beginning of period
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Cash
and cash equivalents at end of period
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Supplemental
disclosure of cash flow information:
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Supplemental
disclosure of non-cash financing activities:
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Unrealized
loss on marketable securities available-for-sale
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See
accompanying Notes to Condensed Financial Statements.
SECURE ALLIANCE HOLDINGS CORPORATION AND
SUBSIDIARIES
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
(1)
|
Organization
and Summary of Significant Accounting
Policies
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Organization
and Nature of Business
Secure
Alliance Holdings Corporation (the “Company,” “we,” “us,” or “our”) is a
Delaware corporation formerly engaged in the development, manufacture, sale and
support of automated teller machines (“ATMs”) and electronic cash security
systems, consisting of the Timed Access Cash Controller (“TACC”) products and
the Sentinel products (together, the “Cash Security” products), which were
designed for the management of cash.
Basis
of Financial Presentation
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amount of assets and
liabilities, and the disclosure of contingent assets and liabilities as of the
date of the financial statements, and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates. In management’s opinion, all adjustments necessary
for a fair presentation of the results of the interim periods have been
reflected in the interim financials. All adjustments to the financial
statements are of a normal recurring nature.
Significant
Accounting Policies
There has
been no change in our significant accounting policies from those contained in
our Annual Report on Form 10-K for the year ended September 30, 2007, except as
discussed in the following paragraph.
In July
2006, the FASB issued Final Interpretation No. (“FIN”) 48, Accounting for
Uncertainty in Income Taxes, an Interpretation of SFAS 109, which clarifies the
accounting for income taxes by prescribing the minimum recognition threshold an
uncertain tax position is required to meet before tax benefits associated with
such uncertain tax position are recognized in the financial
statements. FIN 48 also provides guidance on derecognition,
measurement, classification, interest and penalties, accounting in interim
periods, disclosure and transition. In addition, FIN 48 excludes
income taxes from the scope of SFAS 5, Accounting for
Contingencies. FIN 48 is effective for fiscal years beginning after
December 15, 2006. Differences between the amounts recognized in the
consolidated balance sheets prior to the adoption of FIN 48 and the amounts
reported after adoption are accounted for as a cumulative-effect adjustment to
the beginning balance of retained earnings upon adoption of FIN
48. FIN 48 also requires that amounts recognized in the balance sheet
related to uncertain tax positions be classified as a current or non-current
liability, based upon the timing of the ultimate payment to a taxing
authority. We adopted FIN 48 as of October 1, 2007 and management
determined that no tax reserve was required at that time.
Earnings
(Loss) Per Share
Basic
income (loss) per share is computed by dividing the net income (loss)
attributable to the common shareholders (the numerator) by the weighted average
number of shares of common stock outstanding (the denominator) during the
reporting periods. Diluted income (loss) per share is computed by
increasing the denominator by the weighted average number of additional shares
that could have been outstanding from securities convertible into common stock,
such as stock options and warrants.
(2)
|
Merger
Agreement with Sequoia
|
On
December 6, 2007, we entered into a definitive Agreement and Plan of Merger
(“Merger Agreement”) by and among Sequoia Media Group, LC, a private Utah
limited liability company (“Sequoia”), the Company and SMG Utah, LC, a Utah
limited liability company and wholly owned subsidiary of the Company (“Merger
Sub”). Pursuant to the Merger Agreement, Merger Sub will merge with
and into Sequoia (the “Merger”), with Sequoia continuing as the surviving entity
in the Merger and each issued and outstanding Sequoia equity interest will
automatically be converted into the right to receive 0.5806419 shares of the
Company’s common stock, calculated after a 1 for 3 reverse stock split of the
Company’s common stock contemplated to be effected prior to the
Merger. Immediately following the Merger, the members of Sequoia, in
aggregate, will own approximately 80% of the equity interests in the Company and
the shareholders of the Company will own the remaining approximately 20% equity
interests in the combined company.
On March
31, 2008, Company, Sequoia and Merger Sub entered into Amendment No. 1 (the
“Amendment”) to the Merger Agreement. The Amendment was entered into
to, among other things, (i) effect a 1-for-2 reverse stock split instead of a
1-for-3 reverse stock split, (ii) provide that, immediately prior to the
effectiveness of the Merger, the Company will declare and pay to its
shareholders a cash dividend equal to approximately $2.0 million instead of
distributing to shareholders common stock of a newly formed company with certain
enumerated assets that were to be transferred to it by the Company, (iii) amend
the amount of the proposed Merger Consideration to be provided under the Merger
Agreement, such that each issued and outstanding Sequoia equity interest will
automatically be converted into the right to receive 0.87096285 shares of the
Company's common stock instead of the right to receive 0.5806419 shares of the
Company's common stock, which adjustment was made to account for the change from
a 1-for-3 reverse stock split to a 1-for-2 reverse stock split, and (iv) remove
the closing condition that the Company have not less than $9.8 million in net
cash or cash equivalents.
In
addition, pursuant to a Loan and Security Agreement (“Loan Agreement”) entered
into between the Company and Sequoia on December 6, 2007, the Company has loaned
$2.5 million in secured financing to Sequoia through March 31,
2008. Under the terms of the Loan Agreement, Sequoia has agreed to
pay interest on the loan obligations at a rate per annum equal to
10%. Interest on the loan obligations is payable on the scheduled
maturity date, December 31, 2008. In addition, if the loan
obligations have not been paid in full on or prior to the scheduled maturity
date, a monthly fee equal to 10% of the outstanding loan obligations is payable
to the Company by Sequoia on the last day of each calendar month for which the
loan obligations remain outstanding.
Our Board
of Directors approved the Merger Agreement and the foregoing transactions at a
special meeting on November 29, 2007. The Merger is subject to
shareholders approval and other customary conditions. If the Company
terminates the Merger Agreement before the consummation of the Merger in
connection with the Company’s acceptance of a superior proposal, the Company has
agreed to pay Sequoia a termination fee of $1,000,000 in cash under certain
circumstances. At closing of the Merger, outstanding stock options
granted to our executive officers, Jerrell G. Clay and Stephen P. Griggs, to
purchase an aggregate 1,900,000 shares of our common stock at exercise prices of
$0.62 per share will fully vest and become immediately exercisable.
Our Board
of Directors has set a special meeting of shareholders to be held on May 29,
2008 to approve the Merger and other related proposals. Holders of
our common stock as of the record date of April 16, 2008 will be entitled to
vote at the special meeting. A notice and proxy statement was mailed
to shareholders on or about April 23, 2008.
Sequoia
is committed to revolutionizing the way life events and memories are shared and
treasured through personal digital expressions. Sequoia developed
aVinci Experience products to simplify and automate the process of creating
professional-quality multi-media productions using personal photos and
videos. The patented technology provides complete, refined products,
including DVD’s, photo books and posters. aVinci distributes products
through leading retailers, photo websites and image service
providers.
(3)
|
Marketable
Securities Available- for- Sale
|
We own
2,022,000 shares of the common stock of Cashbox plc pursuant to our exercise of
a warrant in September 2005. On or about March 27, 2006, shares of
Cashbox plc began trading on the AIM Market of the London Stock
Exchange. Prior to Cashbox plc going public, we considered their
shares not marketable, thus the shares were carried at cost. Since
the shares are now public and market value is readily available, we determined
the market value of the shares and pursuant to SFAS No. 115 “Accounting for
Investments in Equity and Debt Securities” we classified these shares as
available for sale. Pursuant to the SFAS No. 115 the unrealized
change in fair value was excluded from earnings and recorded net of tax as other
comprehensive income.
As of
March 31, 2008 and September 30, 2007, our common stock in Cashbox plc was
recorded at a fair value of $303,300 and $505,500,
respectively. Unrealized gains on these shares of common stock were
$3,300 and $205,500, which were added to shareholders ' equity as of March
31, 2008 and September 30, 2007, respectively.
Pursuant
to the Loan Agreement, we loaned Sequoia $1,000,000 on December 6, 2007,
$1,000,000 on January 18, 2008 and $500,000 on February 15, 2008. The
aggregate $2,500,000 in promissory notes bear interest at 10% per annum and are
due December 31, 2008. The loans are secured by a pledge of all of
the assets of Sequoia.
At March
31, 2008, we had interest receivable on these notes of $32,054. We
recognized interest income on these notes of $24,931 and $32,054 during the
three months and six months ended March 31, 2008, respectively.
(5)
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Discontinued
Operations
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Sale
of Cash Security Business and Related Agreements with Laurus
On
September 25, 2006, the holders of a majority of shares of our outstanding
common stock approved the sale of our electronic cash security business,
consisting of (a) timed access cash controllers, (b) the Sentinel products, (c)
the servicing, maintenance and repair of the timed access cash controllers or
Sentinel products and (d) all other assets and business operations associated
with the foregoing (the “Cash Security Business Sale”) to Sentinel Operating,
L.P., a buyer led by a management buyout team that included our former director
and Interim Chief Executive Officer, Mark K. Levenick, and our former director,
Raymond P. Landry. The Cash Security Asset Purchase Agreement provided for a
cash purchase price of $15,500,000, less $100,000 as consideration for the buyer
assuming certain potential liability in connection with ongoing litigation, and
less a working capital deficit adjustment of $1,629,968, resulting in a net
purchase price of $13,770,032. In addition, Sentinel Operating L.P.
paid a cash adjustment of $2,458,718 to the Company at closing. The
Cash Security Business Sale was completed on October 2, 2006. During
the year ended September 30, 2007, we recorded a gain on the sale of the Cash
Security business of $13,605,066.
Pursuant
to the Agreement Regarding the NCR Transaction and Other Asset Sales, dated
November 26, 2004 (the “Asset Sales Agreement”), by and between the Company and
Laurus Master Fund, Ltd. (“Laurus”), the Company agreed to pay to Laurus a
portion of the excess net proceeds from the ATM business sale and the Cash
Security Business Sale.
On June
9, 2006, we and Laurus entered into the Laurus Termination Agreement which,
among other things, provided for the payment of a sale fee of $8,508,963 to
Laurus (the “Sale Fee”) in full satisfaction of all amounts payable to Laurus
under the Asset Sales Agreement, including fees payable in respect of the ATM
business sale and the Cash Security Business Sale. The Laurus
Termination Agreement further provided that, upon payment of the Sale Fee and
performance by the Company of its obligations under the Stock Redemption
Agreement described below, neither the Company nor any of its subsidiaries will
have any further obligation to Laurus. Further, each of the Company
and Laurus has granted each other and their respective affiliates and
subsidiaries reciprocal releases from and against any claims and causes of
action that may exist.
We and
Laurus entered a Stock Redemption Agreement on January 12, 2006 and as
subsequently amended. Pursuant to the terms of the Stock Redemption
Agreement: we agreed, among other things, (i) to repurchase from Laurus, upon
the closing of the Cash Security Business Sale, all shares of our common stock
held by Laurus, and (ii) Laurus agreed to the cancellation as of the closing
date of the Cash Security Business Sale of warrants it holds to purchase
4,750,000 shares of our common stock at an exercise price of $.30 per share, and
not to exercise such warrants prior to the earlier to occur of September 30,
2006 and the date on which the Cash Security Asset Purchase Agreement is
terminated.
Following
the Cash Security Business Sale, on October 2, 2006, the Company applied the net
purchase price, the cash adjustment, and $5,400,000 in proceeds (together with
accrued interest of $206,799) from the ATM business sale, to pay the following
amounts to Laurus: (i) $8,508,963 pursuant to the terms of the Laurus
Termination Agreement and (ii) $6,545,340 representing the purchase from Laurus
by the Company of 19,251,000 shares of Company common stock pursuant to the
terms of the Stock Redemption Agreement. Following both such payments to Laurus,
the Company received $6,781,246 in net proceeds from the Cash Security Business
Sale.
On
October 2, 2006, following the foregoing payments to Laurus pursuant to the
terms of the Laurus Termination Agreement and the Stock Redemption Agreement, no
further fees remain payable by the Company to Laurus and, to our knowledge,
Laurus does not own any shares of the Company.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The
financial and business analysis below provides information which we believe is
relevant to an assessment and understanding of financial position and results of
operations. This financial and business analysis should be read in
conjunction with the condensed consolidated financial statements and related
notes.
The
following discussion and certain other sections of this Report on Form 10-Q
contain statements reflecting the Company’s views about its future performance
and constitutes "forward-looking statements" under the Private Securities
Litigation Reform Act of 1995. These views may involve risks and
uncertainties that are difficult to predict and may cause the Company's actual
results to differ materially from the results discussed in such forward-looking
statements. Readers should consider how various factors may affect the
Company’s performance. The Company undertakes no obligation to update
publicly any forward-looking statements, whether as a result of new information,
future events or other.
Critical
Accounting Policies
The
discussion and analysis of financial condition and results of operations is
based upon the condensed consolidated financial statements contained in Item 1
in this Quarterly Report. The condensed financial statements include the
accounts of the Company and its wholly owned subsidiaries. The preparation
of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities as of the date of the
financial statements and the reported amounts of revenues and expenses for the
reporting period. Actual results could differ from those
estimates.
The
discussion included in Item 7 of our Annual Report on Form 10-K for the year
ended September 30, 2007 under the subheading "Critical Accounting Policies and
Estimates" is current and applicable, and is hereby incorporated into this
Quarterly Report on Form 10-Q.
Results
of Operations
Following
the sale of our Cash Security business on October 2, 2006, we have had
substantially no operations and the results of continuing operations have
consisted of corporate overhead and investment-related income.
Quarter
Ended March 31, 2008 Compared with the Quarter Ended March 31, 2007
Selling, general and administrative
expenses for the quarter ended March 31, 2008 increased by approximately
$260,000 from the same period quarter ended March 31, 2007. This
increase is primarily due to higher professional fees associated with the
proposed Merger Agreement with Sequoia and related costs.
We
recorded a net loss from operations of $(0.4) million and $(0.1) million for the
quarters ended March 31, 2008 and March 31, 2007, respectively.
Six
Months Ended March 31, 2008 Compared to the Six Months Ended March 31,
2007
Selling, general and administrative
expense for the six months ended March 31, 2008 was $0.8 million compared
with $0.6 million for the six months ended March 31, 2007. This
increase is primarily due to higher professional fees associated with the
proposed Merger Agreement with Sequoia and related costs.
Income tax expense
(benefit). In assessing the realizability of deferred tax
asset, management considers whether it is more likely than not some portion or
all of the deferred tax assets will be realized. We have established
a valuation allowance for such deferred tax assets to the extent such amounts
are not utilized to offset existing deferred tax liabilities reversing in the
same periods.
We
recorded a net loss from continuing operations of $(0.5) million and $(6.8)
million for the six months ended March 31, 2008 and 2007,
respectively.
Liquidity
and Capital Resources
On
October 2, 2006, we became a shell public company with approximately $12.9
million in cash, cash equivalents and marketable securities
held-to-maturity.
Working
Capital
As of
March 31, 2008, we had working capital of $12.0 million compared with working
capital of $12.6 million at September 30, 2007.
Off-Balance
Sheet Transactions
We had no
off-balance sheet arrangements at March 31, 2008.
Indebtedness
We had no
indebtedness or obligations under operating leases at March 31,
2008.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
At March
31, 2008, our exposure to market risk for changes in interest rates relates to
our investment portfolio, which consists of taxable, short-term money market
instruments and certificates of deposit and debt securities with maturities
between 90 days and one year. We do not use derivative financial
instruments in our investment portfolio. We place our investments
with high-credit quality issuers and we mitigate default risk by investing in
only safe and high-credit quality securities and by monitoring the credit rating
of investment issuers.
ITEM 4T. CONTROLS AND
PROCEDURES
Evaluation
of Disclosure Controls and Procedures
An
evaluation was carried out by the Company’s Chief Executive Officer and
Principal Financial Officer of the effectiveness of the Company’s disclosure
controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the
Securities Exchange Act of 1934, as amended) as of March 31, 2008, the end of
the period covered by this Form 10-Q. Based upon that evaluation, the
Chief Executive Officer and Principal Financial Officer concluded that these
disclosure controls and procedures were effective at a reasonable
level.
A control
system, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are
met. Further, the design of a control system must reflect the fact
that there are resource constraints, and the benefits of controls must be
considered relative to their costs. Because of the inherent
limitations on all control systems, no evaluation of controls can provide
absolute assurance that all errors, control issues and instances of fraud, if
any, with a company have been detected. The design of any system of
controls is also based in part on certain assumptions regarding the likelihood
of future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future
conditions. Therefore, even those systems determined to be effective
can provide only reasonable assurance with respect to financial statement
preparation and presentation.
Changes
in Internal Control Over Financial Reporting
There
have been no changes in the Company’s internal control over financial reporting
(as defined in Rule 13a-15(f) or 15d-15(f) under the Securities Exchange Act of
1934, as amended) during the quarter ended March 31, 2008 that have materially
affected, or are reasonably likely to materially affect the Company’s internal
control over financial reporting.
PART
II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The
Company had no legal proceedings during the quarter ended March 31,
2008.
The
discussion included in Item 1A of our Annual Report on Form 10-K for the year
ended September 30, 2007 under the heading "Risk Factors" is current and
applicable, and is hereby incorporated into this Quarterly Report on Form
10-Q.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE
OF PROCEEDS
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
ITEM 5. OTHER INFORMATION
None.
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Certification
of Chief Executive Officer, Jerrell G. Clay, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
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Certification
of Principal Financial Officer, Stephen P. Griggs, pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
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Certification
of Chief Executive Officer, Jerrell G. Clay, pursuant to 18 U.S.C. Section
1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
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Certification
of Principal Financial Officer, Stephen P. Griggs, pursuant to 18 U.S.C.
Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
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____________
* - Filed
herewith.
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
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SECURE
ALLIANCE HOLDINGS CORPORATION
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(Company)
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May
15, 2008
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/s/
JERRELL G. CLAY
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Jerrell
G. Clay
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Chief
Executive Officer
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May
15, 2008
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/s/
STEPHEN P. GRIGGS
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Stephen
P. Griggs
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Principal
Financial Officer
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