UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-KSB
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Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Fiscal Year Ended December 31, 2003
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Commission File No. 1-10927
SIMTROL, INC.
A Delaware Corporation
(IRS Employer Identification No. 84-1104448)
2200 Norcross Parkway Suite 255
Norcross, Georgia 30071
(770) 242-7566
Securities Registered Pursuant to Section 12(b)
of the Securities Exchange Act of 1934:
None
Securities Registered Pursuant to Section 12(g)
of the Securities Exchange Act of 1934:
Common Stock, $.001 par value per share
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
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [X]
The registrant's revenues for the fiscal year ended December 31, 2003 were
$504,881.
The aggregate market value of the shares of common stock held by non-affiliates
of the registrant was approximately $2,432,131, based on the closing price of
the registrant's common stock as quoted in the Pink Sheets on February 27, 2004.
For the purposes of this response, officers, directors and holders of 5% or more
of the registrant's common stock are considered to be affiliates of the
registrant at that date.
The number of shares outstanding of the registrant's common stock as of February
29, 2004: 23,367,226 shares of $.001 par value common stock.
PART I
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of the
federal securities laws. Forward-looking statements are those that express
management's views of future events, developments, and trends. In some cases,
these statements may be identified by terminology such as "may," "will,"
"should," "expects," "plans," "intends," "anticipates," "believes," "estimates,"
"predicts," "potential," or "continue" or the negative of such terms and other
comparable expressions. Forward-looking statements include statements regarding
our anticipated or projected operating performance, financial results,
liquidity, and capital resources. These statements are based on management's
beliefs, assumptions, and expectations, which in turn are based on the
information currently available to management. Information contained in these
forward-looking statements is inherently uncertain, and our actual operating
performance, financial results, liquidity, and capital resources may differ
materially due to a number of factors, most of which are beyond our ability to
predict or control. Factors that may cause or contribute to such differences
include, but are not limited to, our ability to compete successfully in our
industry and to continue to develop products for new and rapidly changing
markets.
ITEM 1. BUSINESS.
GENERAL
We design, develop, and market Windows-based software solutions that enable the
command, control, and monitoring of otherwise incompatible electronic devices,
particularly corporate audiovisual ("AV") assets. Our end-to-end solutions are
designed to provide Fortune 1000 corporations, government entities and other end
users a cost-effective solution to simplify the automation and integration of AV
and information technology ("IT") assets.
Originally, we developed and marketed hardware-based videoconferencing and
control systems. However, in 2000, management recognized an increased interest
by computer and computer-related manufacturers to expand their existing
technologies into the AV industry. A number of these manufacturers began to
offer plasma screen televisions, digital projection equipment and other similar
devices. At that time, management believed that this would lead to the
commoditization of other AV control hardware, such as touch panel displays.
Accordingly, in conjunction with the commencement of a contract with Boeing, we
shifted our business strategy to a PC-centric software model, thereby
positioning us as the first to market with a fully integrated software solution.
In April 2001, we released the first version of our ONGOERTM PC-based control
software just as a major trend began taking place: IT professionals were taking
over the management of AV applications. We believe that we are well positioned
to take advantage of this growing trend and can become a popular Windows
application for enterprise users over the next three to seven years. As a result
of our strategic shift, we no longer sell videoconferencing systems directly,
although we still maintain service contracts with certain videoconferencing
customers that we are beginning to leverage into future sales opportunities of
our software products. To date, we have spent approximately $3 million in
research and development for our software product offerings.
Our principal executive offices are located at 2200 Norcross Parkway, Suite 255,
Norcross, Georgia 30071, and our telephone number is (770) 242-7566.
RECENT DEVELOPMENTS
During 2003, we continued our plan to restructure our business around the sales
of our ONGOER PC-based control software. The product was originally available
for sale in April 2001 and represented a departure from our previous business of
selling, installing, and servicing our Omega videoconferencing control systems.
Due to the discontinuance of our older Omega product line of videoconferencing
systems and the slower than anticipated increase in sales of ONGOER, in June
2002 we reduced our headcount by approximately 50% in order to conserve
resources and focus our sales and development efforts with select AV
integrators, firms that specialize in the sale, installation, support, and
service of AV equipment, and on software licensing opportunities in order to
reduce our cash used from operations. We also moved to significantly smaller
office space in September 2002 to reduce overhead expenses.
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These changes were necessary because during the year following the launch of
ONGOER 1.0, we learned that integrators would have to change the way they sell,
design, program, invoice, install, and support control system solutions in order
to use our PC-based ONGOER product. Despite obvious benefits of moving to a
PC-based solution, a complete overhaul of internal operations was simply not a
choice integrators were willing to make during an uncertain economic climate.
Despite reduced headcount and a major reduction in expenses, we retained our top
software talent and focused on adding important software features to enhance our
product. During the second half of 2002, success on two important fronts took
place. First, we announced our first licensing agreement with Polycom, the
world's largest videoconferencing company based on revenues. Under our agreement
with Polycom, we license certain ONGOER code for use in Polycom's PC-based
iPower videoconferencing platform. This software, called Meeting Tool Assistant
(MTA), provides Polycom's customers with control capabilities for three serial
devices - a VCR, projector and document camera.
The success of MTA led to an expanded Polycom-Simtrol partnership during
February 2004, when Polycom announced that our ONGOER product could leverage
Polycom's iPower platform to provide seamless, flexible control of a wide
variety of voice, video and peripheral components. This partnership with Polycom
has provided credibility to our software through a proven market leader and has
provided for increased exposure to AV integrators interested in exploring
PC-based solutions.
Second, we have established a strong partnership with Telaid, a
Connecticut-based systems integration and service firm. Together, we have
successfully deployed thirty-one ONGOER units at Morgan Stanley. The Morgan
Stanley account was instrumental in shaping our second software product -
OnGuard monitoring software. Success at Polycom and Telaid has provided us with
increased visibility in the AV integration community, strong reference accounts,
and valuable feedback on additional software features that will further enhance
our ONGOER and OnGuard products.
We issued additional convertible notes and private common stock during 2003 to
fund our operations, however, we continue to use significant cash in operations
and will require additional debt or equity financing. This additional financing
could be in the form of the sale of assets, the issuance of debt or equity
securities, or a combination of these financing methods. The amount of such
funding that may be required will depend primarily on how quickly sales of our
ONGOER product take place and to what extent we are able to work out our overdue
accounts payables with our various vendors. There can be no assurance that we
will be able to obtain such financing if and when needed, or that if obtained,
such financing will be sufficient or on terms and conditions acceptable to us.
If we are unable to obtain this additional funding, our business, financial
condition and results of operations will be adversely affected.
As of December 31, 2003, we had cash and cash equivalents of $3,998. We do not
have sufficient funds for the next 12 months and have relied on periodic
investments in the form of common stock and convertible debt by certain of our
existing shareholders since the fourth quarter of 2001. We currently require
substantial amounts of capital to fund current operations and for the payment of
past due obligations including payroll and other operating expenses and the
continued development and deployment of our ONGOER product line. Our inability
to pay our audit fees on a timely basis resulted in the delay of the filing of
our Forms 10-QSB for 2003. Due to recurring losses from operations, an
accumulated deficit, negative working capital and our inability to date to
obtain sufficient financing to support current and anticipated levels of
operations, our independent public accountant's audit opinion states that these
matters have raised substantial doubt about our ability to continue as a going
concern at December 31, 2003.
PRODUCTS
Our core business is the design, production, and sale of our ONGOER device
control software and our OnGuard monitoring software. Together, these software
products allow a PC to manage, control and monitor a wide variety of AV devices.
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ONGOER
ONGOER allows end users to operate, as a single system, a broad range of
electronic equipment such as projectors, VCRs, computers, sound systems,
lighting and temperature controls and other audio and video devices in a variety
of settings. This is a significant departure from the products currently
available on the AV control systems market in that it is a software-based
system that can be installed to run on readily available third-party hardware
such as PCs. Major competitors' AV control systems are based on proprietary
hardware components employing code written in proprietary scripting languages.
In order to grow sales and to reach and maintain profitability, management
believes that we can better leverage our technological and service competencies
by marketing and selling ONGOER through third-party resellers and system
integrators, by licensing our software to third parties in the AV market, and by
entering new markets for control system technology.
ONGOER(TM) can be operated from any PC with the Windows(R) 2000 or Windows(R) XP
operating system. All interfaces, cables and cards and the hardware controller
itself can be purchased from a wide variety of suppliers. With its unique open
architecture, this software delivers real-time control to AV-system management.
ONGOER's software-based technology allows integrators to change configurations
with ease and any device that can connect to a PC can be controlled with ONGOER.
We have developed OnROAD, ONGOER's remote operations, administration and
diagnostics utility, to facilitate detection and correction of system problems
from any remote location. Integrators no longer have to travel to customers'
locations to fix minor problems. OnROAD allows integrators to diagnose and
repair the vast majority of system conflicts remotely. We provide OnROAD as an
integral part of the base software package and no additional hardware or
software is needed to perform these functions.
The PC controller is the heart of the ONGOER control system. The flexibility of
ONGOER lets integrators choose the controller: anything from a single-box
chassis to a multiprocessor server. There is no need to have an additional PC or
proprietary hardware controller because the PC can handle all of an AV system's
computing needs, as well as any additional software required for presentations
and other applications.
ONGOER(TM) not only makes the PC a control platform for numerous third-party AV
devices, but its broad range of connection methods extends the flexibility
further. Users can choose among numerous devices and connect via a number of
different methods.
End-users normally have contact with ONGOER only through the user interface.
ONGOER provides a great deal of flexibility in creating methods for human
interaction with the system. Because it relies on third-party hardware,
integrators can choose to incorporate a wide range of devices as user interfaces
such as inexpensive VGA monitors, sophisticated touch screens, personal digital
assistants like Palm Pilots, IPaqs, Visors, and even cellular phones. Graphical
user interfaces can be quickly and easily created with Microsoft(R) Visual
Basic. We also provide our OnLooker product as an integral part of the base
software package. OnLooker includes a library of artwork and customized ActiveX
controls to allow integrators to expedite the user interface development
process.
OnGuard
OnGuard is server-based management and monitoring software. The OnGuard Server
connects via standard TCP/IP networking to a set of ONGOER controllers to
monitor and control devices at remote locations. OnGuard displays information
about device health and status via a standard, web-based browser interface.
Technicians can log in from any place at any time using standard web browsers to
view the entire device control network at a glance.
PROPRIETARY TECHNOLOGY
We regard our ONGOER and OnGuard software as proprietary and have implemented
protective measures of both a legal (copyright) and practical nature. We derive
considerable practical protection by supplying and licensing only a
non-modifiable run-time version to our customers and keeping confidential all
versions that can be modified. By licensing the software rather than
transferring title, we in most cases have been able to incorporate restrictions
in the licensing agreements, which impose limitations on the disclosure and
transferability of the software. No determination has been made as to the legal
or practical enforceability of these restrictions, or the extent of customer
liability for violations.
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PRODUCT DEVELOPMENT STRATEGIES
The AV world and the IT world are converging, with more and more devices
becoming network enabled. Like PCs and servers, we believe IT departments will
demand AV products (projectors, audio processors, video codecs, video switchers,
cameras, electronic whiteboards, etc.) be accessible on a corporate network,
where they can be controlled, managed, and monitored from centralized and/or
remote locations. ONGOER and OnGuard install on PCs and servers and support a
product architecture that allows them to control, monitor, and manage any device
connected to them via the network.
Two major efforts are underway to increase the value of the ONGOER and OnGuard
software products. The first effort involves improving our powerful yet simple
software tool called ONGOER Builder (Builder). Builder guides the user through a
streamlined, three-step process to design and program a control system and
graphical user interface. It provides panels, buttons, labels, and image objects
complete with a large graphics library that allows the user to create a variety
of flexible and visually attractive user interfaces. A panel workspace also
enables users to design graphical layouts and a Syntax Assistant enables the
user to select programming functions. Both ONGOER and ONGOER Builder use the
non-proprietary BASIC programming language.
OnGuard version 1.1 features device control panels and improved programmability
and allows user-defined hyperlinks. These features provide functionality such as
custom control panels for remote control of devices, programming of calendaring
programs such as Microsoft Outlook for scheduling device control, and
user-defined hyperlinks allow improved control user interfaces or web-based
device documentation.
As the major PC companies add AV products such as plasma displays, projectors
and LCD touch panels, we believe our software is well positioned to take
advantage of the benefits - low price points and broad availability from a
variety of suppliers - of the PC platform versus our competitors' closed,
proprietary line of controllers and touch panels.
MARKETS
Based on the long-term objective of becoming the industry standard software for
controlling and monitoring AV devices, management has developed a sales and
marketing strategy to aggressively pursue relationships at each point of the
distribution channel. The following provides an overview of the AV distribution
channel.
End Users
Businesses, universities and government agencies purchase device control and
monitoring solutions to aid productivity associated with the use of AV meeting
room assets. During 2002 and 2003, we installed our products with a number of
end users, including: Boeing, Lockheed, Morgan Stanley, and Merrill Lynch.
AV and IT System Integrators
Integrators are hired by end users to "integrate" technology to help them
increase productivity and save money. Integrators purchase hardware and software
products from various manufacturers and design, install, and service those
solutions for end users. The integrator is typically the entry point into the
end user and, therefore, is a critical relationship for us. These include the
Value Added Reseller ("VAR") 500, the top 500 VARs in the U.S., and AV
integrators. We have successfully developed relationships with a number of
integrators, including Telaid and IBM Global Services. Management considers this
a critical element in the distribution channel and is focusing significant
effort on developing relationships with other integrators.
Equipment OEM Partners
Videoconferencing companies, presentation equipment manufacturers and signal
management firms represent alliance partners that could co-brand or private
label our technology into value-add solutions featuring their products. The goal
of alliances is for our partners and us to package turnkey solutions that make
it easier for integrators to deploy at end user customer sites. Hardware from
these companies needs to be controlled by end users for ease-of-use and
monitored by support staff to guarantee the technology works in the meeting
rooms. Providing turnkey solutions straight from the manufacturer helps the
integrator and the end user. The large equipment Original Equipment
Manufacturers ("OEMs") include, for video conferencing: Polycom, Tandberg, Sony,
VCON and VTEL; for presentation equipment: SMART, Polyvision, Hitachi, 3M, and
Panasonic; and for signal management: Altinex and Kramer Electronics. In 2002
and 2003, we established relationships with Polycom and SMART Technologies, Inc.
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OEM relationships also increase our sales leverage in the AV and systems
integrator channels. Each of these OEMs has relationships throughout that
channel, including the VAR 500. As our products are packaged with OEM hardware,
those products are introduced throughout the integrator sales channel, where
they can be added to bids and specification sheets with minimal sales lead time
and expense to us.
PC OEM Partners
Computer manufacturers represent the core platform - the PC and server - that
run our software products. Their products are sold through integrators and
directly to end-users. Computer companies have entered the consumer electronics
business; therefore, providing turnkey control and monitoring software to
integrators could drive additional sales of PCs and servers, plasma monitors,
and other PC hardware required for control applications. Potential PC OEM
partners include Dell, Hewlett-Packard, Gateway, IBM, and Sony.
Operating System Providers
Because the PC manufacturers are beginning to produce turnkey sets of products
for the AV industry, Microsoft Corporation started working with PC companies on
a Media Center PC, a solution specifically designed for media-related computers
used for applications such as home entertainment. We are positioning our
products as the solution for command, control, and monitoring devices within
such an operating system. Management sees this as a long-term possibility for an
additional revenue stream.
COMPETITION
We primarily compete with two companies, both of which have significantly
greater resources and market share. Both companies offer control solutions based
on proprietary hardware and software. We offer control solutions utilizing open
PC technology.
Our two major competitors in the AV control systems market are AMX and
Crestron, who combined currently have close to 100% of the sales in this market.
AMX, headquartered in Richardson, Texas, was established in 1982. This publicly
traded company employs about 400 people, with dealers and distributors in 40
countries. AMX has a strong foothold in Fortune 500 companies. Typical AMX
applications include control of devices in corporate boardrooms, meeting
facilities, professional sporting arenas, museums, hospital operating rooms,
transportation systems, and schools.
Headquartered in Rockleigh, New Jersey, Crestron designs and manufactures
control and automation systems for corporate, industrial, educational, and
residential markets.
Both Crestron and AMX offer hardware-based control systems, the cores of which
are proprietary controllers fitted with proprietary cards and connectors
manufactured by or for them, and running proprietary operating systems. These
proprietary controllers communicate with controlled devices by means of code
written in proprietary languages (each company has developed its own).
Integrators who re-sell systems from each of these companies must send their
technical personnel to training courses offered by the companies themselves and
by several independent organizations.
Because ONGOER is a software-based control system designed to run on commodity
hardware, we believe we have several advantages over AMX and Crestron. The PC
industry is a vast marketplace with enormous economies of scale. Computer
hardware including touch screens, wireless Smart Displays, and serial ports are
extremely powerful and inexpensive. Innovative and wireless network-enabled
devices are regularly introduced into the mass PC market. There are advantages
for end customers in familiarity and cost compared to proprietary,
hardware-based control systems.
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Many end customers also strive for a unified collaboration/control solution,
such as the combination of Polycom iPower and Simtrol ONGOER, or the combination
of a SMART Display and Simtrol ONGOER. When the PC is already part of an AV
room, there are even more compelling cost advantages to adding ONGOER software
to the existing PC and existing display.
End customers are also demanding a new breed of proactively monitored control
solutions. Traditional control systems companies are reacting by introducing
PC-like services and interfaces to PCs and innovative PC wireless Smart
Displays. These PC-like services cannot compete in terms of price and
performance with the much larger PC marketplace.
Traditional control systems position themselves to be the central technology and
view the PC as an "important device." We believe the PC is the central
technology and view traditional hardware control boxes as a declining
technology.
FACTORS AFFECTING FUTURE PERFORMANCE
The following summarizes certain of the risks inherent in our business:
We may not be able to obtain additional capital to finance our operations when
needed.
We require additional capital or other funding to finance our operations, as we
do not generate sufficient cash from operations to sustain our operations. If we
are unable to attain sufficient funding, we will not be able to continue to
operate. We may seek additional equity financing through the sale of securities
on a public or a private placement basis on such terms as are reasonably
attainable. We may not be able to obtain such financing when needed, or that if
obtained, it may not be sufficient or on terms and conditions acceptable to us.
If we sell shares of our common stock, our existing shareholders will suffer
dilution, which could be material.
We may not be able to achieve or sustain profitability.
After 18 years of operations, we have not reported any profits for a full year
of operations and, as of December 31, 2003, we had an accumulated deficit of
$61.7 million. We may not be able to achieve or sustain profitability in the
future, as sales of our ONGOER product have not proven to be sufficient to fund
our operations. As a result, we may incur additional losses and negative cash
flow from operations for the foreseeable future.
If we fail to secure sufficient capital or fail to create a strong marketing
support team, then our efforts to penetrate new markets could fail, resulting in
decreased cash flow.
Expanding our presence in the audiovisual command and control market will
require capital for further software product development, and the creation of
new sales channels. The inability to secure sufficient capital or the failure to
create a strong sales channel/marketing support organization could result in a
failed effort to penetrate these new markets, and adversely affect operating
results and cash flow.
If we fail to develop competitive products in response to technological changes,
our business will not grow or remain competitive.
The market for our products is characterized by rapidly changing technology,
evolving industry standards and frequent product introductions. Product
introductions are generally characterized by increased functionality and quality
at reduced prices. If we are unable, for technological or other reasons, to
develop competitive products in a timely manner in response to changes in the
industry, our business and operating results would be significantly harmed.
Our ability to successfully develop and introduce on a timely basis new and
enhanced products that embody new technology, and achieve levels of
functionality and prices that are acceptable to the market will be a significant
factor in our ability to grow and to remain competitive. For instance, the
ability to transact business via the Internet is becoming increasingly
important. Accordingly, in order to remain competitive, we are currently
developing a system that will allow us to deliver products and services to our
customers via the Internet. We may not be able to timely or effectively
implement this strategy.
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We depend on purchases from a few significant customers, and any loss,
cancellation, or reduction of purchases by these customers could harm our
business.
We currently sell control software and service previously sold videoconferencing
systems for a small number of major customers. During the year ended December
31, 2003, approximately 73% of our revenues were from five large customers.
Further, we do not have long-term contracts with these or any of our other
customers, so our customers could stop purchasing our products at any time. In
October 2002, one customer that represented approximately 24% of our revenue for
2002 did not renew their maintenance contract on their Omega systems. The loss
of any of additional major customers, or any reduction in purchases by these
customers, could significantly harm our business.
If we cannot attract, retain, train or manage our key management or technical
personnel effectively, our ability to develop and sell new products could be
hindered, resulting in a reduction in sales.
Our development, management of our growth and other activities depend on the
efforts of key management and technical employees. Competition for such persons
is intense. Because we do not have long-term employment agreements with our key
management personnel or technical employees, we could lose one or more of our
key management or technical personnel, which could result in significant harm to
our business. Our future success is also dependent upon our ability to
effectively attract, retain, train, motivate and manage our employees, and
failure to do so could hinder the development and marketing of our products and
result in a reduction in sales, and our customers could shift their purchases to
our competitors.
We may not be able to maintain or improve our competitive position because there
are competitors who currently engage in or may enter the market with far greater
technical and financial resources than we have.
Competition in the command and control and video communications markets is
intense. We expect other competitors, some with significantly greater technical
and financial resources, may enter these markets. If we cannot continue to offer
new command and control and videoconferencing products with improved performance
and reduced cost, our competitive position will erode. Moreover, competitive
price reductions may adversely affect our results of operations. In the command
and control market, our primary competitors are AMX, Inc. and Crestron
Electronics, Inc.
Fluctuations in our quarterly performance could adversely affect our total
revenues and net income levels.
Our revenues have historically occurred predominantly in the third month of each
fiscal quarter. Accordingly, our quarterly results of operations are difficult
to predict, and delays in the closing of sales near the end of the quarter could
cause quarterly revenues and, to a greater degree, operating and net income to
fall substantially short of anticipated levels. Our total revenues and net
income levels could also be adversely affected by:
o cancellations or delays of orders,
o changes in customer base or product mix,
o seasonal patterns of capital spending by customers,
o delays in purchase decisions due to new product announcements by us
or our competitors, and
o increased competition and reductions in average selling prices.
The Securities and Exchange Commission's rules regarding penny stocks may
restrict your ability to resell our shares.
Our common stock is subject to Rules 15g-1 through 15g-9 of the Securities
Exchange Act of 1934, which imposes additional sales practice requirements on
broker/dealers who sell such securities to persons other than established
customers and accredited investors. Generally, accredited investors include
institutions with assets in excess of $5,000,000 or individuals with net worth
in excess of $1,000,000 or annual incomes exceeding $200,000 individually or
$300,000 jointly with their spouses. The broker/dealer must make a special
suitability determination for the purchaser and receive the purchaser's written
agreement to the transaction prior to the sale. The broker/dealer must furnish
the purchaser a document outlining the risks associated with investing in penny
stocks. Furthermore, the broker/dealer must inform the purchaser of:
o the bid and offer price quotes for penny stock,
o the number of shares to which the quoted prices apply;
o the brokerage firm's compensation for the trade; and
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o the compensation received by the brokerage firm's salesperson for
the trade.
Consequently, the rules may adversely affect the ability of broker/dealers to
sell our common stock, which may affect your ability to resell our common stock.
RESEARCH AND DEVELOPMENT
Our product engineering, including our costs associated with design and
configuration of fully developed systems for particular customer applications is
accounted for in our financial statements as research and development expenses.
During the year ended December 31, 2003 our expenditures for research and
development of new products or new components for our ONGOER product totaled
$419,361, a decrease of 2% from the total expenditures of $428,810 in 2002. We
decreased our research and development efforts during 2002 due to business
conditions.
EMPLOYEES
As of December 31, 2003, we employed 8 persons full time, including two
executive officers. Of the full-time employees who were not executive officers,
four were engaged in research and development, one in service, and one in
information systems. Employee relations are considered good and we have no
collective bargaining contracts covering any of our employees.
HISTORY
We were incorporated under the laws of the State of Delaware on September 19,
1988. From 1990 to 2001, we primarily designed, manufactured, marketed, and
supported software based command and control systems, including
videoconferencing systems. We still provide maintenance support for certain of
these systems. In September 2001 we changed our name from VSI Enterprises, Inc.
to Simtrol, Inc.
ITEM 2. DESCRIPTION OF PROPERTY.
We maintain our executive and sales offices in 6,400 square feet of leased
office and warehouse space in Norcross, Georgia, under a three-year lease, which
expires in August 2005. We moved to this facility from our former facility in
Norcross, Georgia in September 2002. Monthly rent is approximately $4,010
including common area maintenance charges, taxes, and insurance.
We believe that our current facilities are adequate for our current
requirements.
ITEM 3. LEGAL PROCEEDINGS.
On May 1, 2003, Citibank (West), FSB, filed suit in San Diego Superior
Court, North County Division, against one of our subsidiaries, Quality Software
Associates, Inc. ("QSA"), and Mark Scovel, the individual from whom we acquired
QSA in March 2001. CitiBank seeks to recover $8,000 of credit card indebtedness
under a credit card held by QSA that was personally guaranteed by Mr. Scovel. On
June 24, 2003, Mr. Scovel filed a cross-complaint against QSA and Simtrol, Inc.
claiming that Simtrol had assumed the debt in connection with its acquisition of
QSA. Mr. Scovel's complaint also seeks declaratory relief, seeking a judgment
that QSA and Simtrol are also liable for several other QSA debts, in an
aggregate amount of less than $50,000. Mr. Scovel also seeks attorneys' fees.
We have filed a cross-complaint against Mr. Scovel seeking damages of
approximately $56,000 and alleging a breach of the representations and
warranties relating to the collectibility of certain accounts receivables
contained in the Merger Agreement under which we acquired QSA.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Our common stock has traded in the Pink Sheets under the symbol "SMOL" since May
23, 2003. Prior to that date, our common stock was traded on the OTC Bulletin
Board under the symbol "SMOL."
The following table sets forth the quarterly high and low bid quotations per
share of common stock on the OTC Bulletin Board and the Pink Sheets as reported
for the periods indicated. These prices also represent inter-dealer quotations
without retail mark-ups, markdowns, or commissions and may not necessarily
represent actual transactions.
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HIGH LOW
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FISCAL YEAR ENDED DECEMBER 31, 2002
First Quarter $ 1.01 $ 0.46
Second Quarter 0.66 0.15
Third Quarter 0.28 0.08
Fourth Quarter 0.33 0.08
FISCAL YEAR ENDED DECEMBER 31, 2003
First Quarter $ 0.52 $ 0.20
Second Quarter 0.35 0.15
Third Quarter 0.40 0.12
Fourth Quarter 0.42 0.13
As of February 29, 2004, there were approximately 607 holders of record and in
excess of 4,400 beneficial holders of our common stock.
We have never paid cash dividends on our common stock and have no plans to pay
cash dividends in the foreseeable future. The policy of our Board of Directors
is to retain all available earnings for use in the operation and expansion of
our business. Whether dividends may be paid in the future will depend upon our
earnings, capital requirements, financial condition, prior rights of any
preferred stockholders, and other relevant factors.
12
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The following discussion and analysis should be read in conjunction with the
consolidated financial statements and notes thereto included elsewhere in this
Form 10-KSB.
OVERVIEW
We are an Atlanta-based software technology company specializing in AV control.
We design, manufacture, market, service and support our ONGOER software control
system, which is designed to run on third-party hardware. Previously, our core
business was the design, manufacture, marketing and servicing of software based
command and control systems, including videoconferencing control systems,
through our wholly owned subsidiary, Videoconferencing Systems, Inc. We continue
to service certain of our videoconferencing customers but have discontinued
selling to this market.
Our command and control solutions allow end users to operate, as a single
system, a broad range of electronic equipment such as projectors, VCRs,
computers, sound systems, lighting and temperature controls and other audiovideo
devices in a variety of settings. A typical customer is a large, multi-site
organization that utilizes sophisticated audio, video and communications network
technologies that require complex command and control solutions. These solutions
can be used in a variety of settings, including corporate meetings and
conferences, distance learning and judicial arraignment systems. These customers
also require superior after-the-sale service. Historically, we have utilized a
direct sales model. However, in order to attempt to grow sales and to reach and
maintain profitability, management believes that we can better leverage our
technological and service competencies by marketing and selling our products
through third party resellers and system integrators, who specialize in the
sale, installation, support and service of audiovisual equipment, and by
entering new markets for our control system technology.
During 2000, we undertook a restructuring of our business operations and balance
sheet that are intended to achieve profitable operations and provide positive
operating cash flows. As part of this restructuring, we raised additional equity
capital and paid off debt outstanding at that time. These restructuring
initiatives have enabled us to reposition our product line and to expand our
presence in the AV command and control systems market. This market, which to
some degree overlaps the high-end videoconferencing market historically served
by us, is almost exclusively maintained by thousands of resellers and system
integrators. Our products have been re-engineered such that they may also be
sold through these third party channels. We believe we offer a functionally
superior, lower cost, fully integrated solution which provides command and
control and remote diagnostics for audio, visual and room environment devices,
and for network connectivity.
Once established in the AV command and control market, we envision developing
additional applications for other command and control system markets, including
process control applications in manufacturing environments and the burgeoning
home entertainment market, that may involve licensing our control software to
existing OEM vendors, in addition to third-party reseller channels.
CRITICAL ACCOUNTING POLICIES
We prepare our consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America. As such, we are
required to make certain estimates, judgments and assumptions that we believe
are reasonable based upon the information available. These estimates and
assumptions affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the periods presented. The significant accounting policies which we
believe are the most critical to aid in fully understanding and evaluating our
reported financial results include the following:
o Revenue recognition. Revenue consists of the sale of our PC-based device
control software licenses (ONGOER) and maintenance revenue on our older
videoconferencing systems (Omega). We recognize revenue from ONGOER
software sales upon shipment as we sell the product to AV integrators.
Revenue on Omega maintenance contracts is recognized over the term of the
related contract. Revenue on the sale of hardware is recognized upon
shipment. (See Note 3 to our consolidated financial statements).
13
o Capitalized software research and development costs. Our policy on
capitalized software costs determines the timing of our recognition of
certain development costs. In addition, this policy determines whether the
cost is classified as development expense or capitalized. Software
development costs incurred after technological feasibility has been
established are capitalized and amortized, commencing with product
release, using the greater of the income forecast method or on a
straight-line basis over the useful life of the product. Management is
required to use professional judgment in determining whether development
costs meet the criteria for immediate expense or capitalization.
o Impairments of Assets/Investments. We record impairment losses on assets
and investments when events and circumstances indicate that the assets
might be impaired and the undiscounted cash flows estimated to be
generated by those assets are less than the carrying amount of those
items. Our cash flow estimates are based on historical results adjusted to
reflect our best estimate of future market and operating conditions. The
net carrying value of assets not recoverable is reduced to fair value. Our
estimates of fair value represent our best estimate based on industry
trends and reference to market rates and transactions.
FINANCIAL CONDITION AND LIQUIDITY
General
As of December 31, 2003, we had cash and cash equivalents of $3,998. We do not
have sufficient funds to continue our operations for the next twelve months and
have relied on periodic investments in the form of common stock and convertible
debt by certain of our existing shareholders since the fourth quarter of 2001.
We currently require substantial amounts of capital to fund current operations
and for the payment of past due obligations including payroll and other
operating expenses and the continued development and deployment of our ONGOER
product line. However, there can be no assurance that we will be successful in
our attempts to develop and deploy our ONGOER product line, to generate positive
cash flows or raise sufficient capital essential to our survival. To the extent
that we are unable to generate or raise the necessary operating capital, it will
become necessary to curtail operations. Additionally, even if we do raise
operating capital, there can be no assurance that the net proceeds will be
sufficient to enable us to develop our business to a level where we will
generate profits and positive cash flows.
Due to recurring losses from operations, an accumulated deficit, negative
working capital and our inability to date to obtain sufficient financing to
support current and anticipated levels of operations, our independent public
accountant's audit opinion states that these matters have raised substantial
doubt about our ability to continue as a going concern at December 31, 2003.
We used $597,465 in cash from operating activities in 2003, primarily due to our
loss of $1,645,374, partially offset by debt conversion expense of $431,599 and
depreciation and amortization of $346,917. The decrease in cash used from
operations in 2002 of $1,314,790 was due mainly to our reduced operations due to
business conditions. Cash used in investing activities consisted of $0 for 2003
compared to $21,318 used in 2002, which consisted primarily of leasehold
improvements in our newer office space. In order to continue funding operations
of the company during 2003, we sold 2,825,727 shares of our common stock for
proceeds of $603,700 in private placements to individual investors including
three members of our Board of Directors. The share prices ranged from $0.152 to
$0.358 per share. Offering costs for these transactions were de minimis.
We issued $30,000 of convertible debt ("2003 Debt") to two of our directors
during the year ended December 31, 2003. The 2003 Debt accrued interest at prime
plus 1%. The principal and interest amounts were converted into 128,421 shares
($0.24 per share) of restricted common stock on July 22, 2003.
We also issued an aggregate of $760,000 of convertible debt ("2002 Debt") to
numerous private investors, including four members of the Board of Directors, at
various times during the year ended December 31, 2002. The 2002 Debt accrued
interest at prime rate plus 1% and was due on December 31, 2002. In conjunction
with the issuance of the 2002 Debt, we issued 750,000 common stock purchase
warrants to the holders of the 2002 Debt. The 2002 Debt was convertible
immediately into restricted shares of our common stock at prices originally
ranging from $0.47 to $0.79 per share, which represented the market prices of
the our traded common stock on the date of the issuances of the 2002 Debt. The
warrants, which expire at various dates in 2006, are exercisable immediately at
prices ranging from $0.47 to $0.79 per share, the market price of our traded
common stock on the day the warrants were issued. Each warrant entitles the
holder to purchase one common share of our restricted common stock.
14
On December 31, 2002, we extended the 2002 Debt to January 31, 2003 and as an
inducement to convert, we reduced the conversion price of the debt to $0.24 per
share and the warrants granted at the origination dates of the notes also had
their exercise prices adjusted to $0.24. As a result, we recognized
approximately $58,000 as finance charges over the remaining terms of the notes
to reflect the lowering of the warrant exercise price at December 31, 2002.
In January 2003, $735,000 of the convertible debt plus accrued interest was
converted to 3,204,083 shares of restricted common stock. Pursuant to Statement
of Financial Accounting Standard No. 84 "Induced Conversion of Convertible
Debt", a debt conversion expense of $431,599 was recorded to reflect the fair
value of the additional shares that resulted from lowering the conversion price
to $0.24.
In connection with the issuance of the 2002 Debt, $151,352 of the debt proceeds
was allocated to the fair value of the warrants and $64,993 of the proceeds was
allocated to beneficial conversion factor of the notes. These debt discounts
were amortized as financing costs in 2002.
During 2001, we issued $400,000 of convertible debt to two shareholders ("2001
Debt"). The 2001 Debt accrues interest at prime rate plus 1% (6.5% at the time),
was originally due February 7, 2002 and is collateralized by all of our assets.
The 2001 Debt is convertible into shares of our common stock at $0.49 per share.
In conjunction with the issuance of the convertible debt, we issued 400,000
common stock purchase warrants to the holders of the 2001 Debt. The warrants,
which expire at various dates in 2006, are exercisable immediately and entitle
the holder to purchase one common share of our common stock at prices ranging
from $0.46 to $0.53 per share. Also, the agreement called for the issuance of
additional warrants to the debt holders for each 60 day extension period on the
debt as follows: 100,000 warrants to each debt holder for the first 60 day
extension and 60,000 warrants to each debt holder at the date of each subsequent
60 day extension. On February 7, 2002, the debt holders granted a 60-day
extension and as a result, we issued an additional 100,000 warrants, which
entitle the debt holders to each purchase 100,000 shares of our common stock at
$0.49 per share. In conjunction with the issuance of 100,000 warrants to the
shareholders on February 7, 2002, $88,254 was estimated as the fair value of the
warrants and was expensed over the extended life of the note as the shareholders
agreed to extend the due date of the loans until December 31, 2002 and no
additional warrants were granted.
In connection with the issuance of the convertible debt during 2001, $120,977 of
the debt proceeds was allocated to capital stock to recognize the beneficial
conversion feature of the debentures. This debt discount is to be amortized to
financing costs over the term of the debt. For the year ended December 31, 2002,
$65,564 was expensed as financing costs relating to the amortization of the
beneficial conversion feature.
On December 31, 2002 we extended the due date of the 2001 Notes until January
31, 2003 and as an inducement to convert, the conversion price was reduced to
$0.24 per share. On January 31, 2003, we extended the due date until December
31, 2003. At January 31, 2003 we recorded a beneficial conversion feature in the
amount of $229,284, to reflect the fair value of the additional shares that may
be issued from lowering the conversion price. The beneficial conversion feature
accreted to interest expense over the extended life of the 2001 Debt. During
2003, we amortized all these amounts as finance charges.
During 2003, our total assets decreased approximately 63% to $229,299 from
$611,651 at December 31, 2002. Decreases in capitalized software development
costs and equipment accounted for a most of the decrease. Capitalized software
decreased $277,625 during the year due to amortization of cost capitalized prior
to March 2001 for ONGOER, at which time we began shipping our ONGOER product to
customers. Property and equipment, net, also decreased $69,293 due to current
year depreciation. Current liabilities decreased $784,331 in 2003, or 27%,
principally due to conversion of $735,000 in convertible notes that were
outstanding at December 31, 2002.
We expect to spend less than $35,000 on capital expenditures in 2004.
15
RESULTS OF OPERATIONS
Revenues
Revenues were $504,881 and $1,294,015 in 2003 and 2002, respectively. The
decrease in revenues of 61% from 2002 to 2003 was primarily due to the decrease
in Omega maintenance revenue as former customers have either replaced these
older systems with newer equipment or declined maintenance contracts due to
budgetary considerations. The decline in ONGOER revenues during 2003 was due
mainly to the decrease in orders from our largest ONGOER customer, whose orders
fell due to the business conditions of their customer. During September 2002,
our largest customer for our older Omega line discontinued maintenance,
resulting in an annual decrease of more than $400,000 in revenues. Due to our
small customer base, we face the risk of fluctuating revenues should any of our
customers discontinue using our products. See Note 8 to our financial
statements.
Gross Profit
Gross profit as a percentage of revenues was approximately 28% and 10% in 2003
and 2002, respectively. The increase in gross margin in 2003 as compared to 2002
was due primarily to the write-off of the remainder of our inventory due to
obsolescence in 2002. See "Inventory Obsolescence Charge" below. The gross loss
attributable to software license revenues in 2003 is due to the amortization of
capitalized software development costs exceeding revenues for the year.
Inventory Obsolescence Charge
In the fourth quarter of 2002, we wrote off our remaining inventory of $296,953
because we determined that the inventory was obsolete due to the non-renewal of
most of the Omega maintenance contracts.
Selling, General & Administrative Expenses
Selling, general and administrative expenses were $647,984 and $1,584,178 for
2003 and 2002, respectively. The 59% decrease from 2002 to 2003 resulted
primarily from decreases in personnel of approximately 50% in June 2002 and our
move to a significantly smaller headquarters in September 2002, as well as
curtailing marketing activities due to business conditions.
Research and Development Expenses
We charge research and development costs to expense as incurred until
technological feasibility of a software product has been established. Software
development costs incurred after technological feasibility has been established
are capitalized and amortized, commencing with product release, using the
greater of the income forecast method or on a straight-line basis over the
useful life of the product. These expensed costs were $419,361 and $428,810 for
2003 and 2002, respectively.
Loss on Decline in Market Value of Investment
We wrote off the remainder of our investment in PentaStar Communications, Inc.,
approximately $11,000, during 2002, as PentaStar went into receivership during
the year. We acquired 57,122 common shares of PentaStar Communications, Inc.,
held in escrow, in connection with our sale of Eastern Telecom, Inc. in 2000.
The shares have no value and were abandoned by the Company during 2002. The
declines in the market value of the stock were deemed other than temporary as
described in SFAS 115.
Other Expense, Primarily Finance Charges
Other expense, primarily finance charges were $287,798 and $557,675 for 2003 and
2002, respectively. The decrease from 2002 to 2003 consisted primarily of
finance charges associated with our issuance of convertible debt during the
fourth quarter of 2001 and the first two quarters of 2002. In extending
convertible debt that originally came due on December 31, 2002, we recorded a
new beneficial conversion feature of $229,482 and an increase in the value of
the warrants issued in the amount of $58,460 as a result of lowering the
exercise price of outstanding warrants to $0.24. These amounts were expensed
during 2003 as finance charges. See note 5 to our financial statements.
16
Loss Before Extraordinary Gain
Losses before extraordinary gains were $1,645,374 and $2,438,702 for 2003 and
2002, respectively. The decreased loss in 2003 was primarily due to our lower
operating expenses that resulted from our reductions in personnel during 2002
and our move to a smaller headquarters space.
Extraordinary Gain on Debt Extinguishments
Extraordinary gains in 2002 of $148,915 were due to debt extinguishments of
$84,350 related to our inactive subsidiary, Integrated Network Services, Inc.
and the $64,565 reduction of accounts payable to Glovicom, N.V., resulting from
the exchange of our warrant to purchase 19% of Glovicom for this amount in the
second quarter 2002.
Net Loss
Our net loss for 2003 was $1,645,374, or $0.08 per share, compared to our net
loss for 2002 of $2,289,787, or $0.14 per share. The decreased net loss for 2003
was due primarily to the lower operating expenses incurred during the current
year as a result of decreased personnel and reduced overhead expenses.
OFF BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements.
ITEM 7. FINANCIAL STATEMENTS
The audited financial statements and related notes required by this item 7 are
included as Exhibit 99.1 of this Report and are incorporated herein by
reference.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
ITEM 8A. CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our Securities Exchange Act reports is
recorded, processed, summarized, and reported within the time periods specified
in the SEC's rules and forms, and that such information is accumulated and
communicated to our management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure. In designing and evaluating the disclosure controls and procedures,
management recognized that any controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance of achieving the
desired control objectives, as ours are designed to do, and management
necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.
As of December 31, 2003, an evaluation was performed under the supervision and
with the participation of our management, including the Chief Executive Officer
and the Chief Financial Officer, of the effectiveness of the design and
operation of our disclosure controls and procedures. Based upon that evaluation,
the Chief Executive Officer and the Chief Financial Officer concluded that our
disclosure controls and procedures were effective. Except as discussed in the
following paragraph, subsequent to the date of this evaluation, there have been
no significant changes in our internal controls or in other factors that could
significantly affect these controls.
In connection with the audits of our consolidated financial statements as of and
for the years ended December 31, 2003 and December 31, 2002, Marcum & Kliegman
LLP and Grant Thornton LLP each advised our management and our Audit Committee
that it had identified a deficiency in internal controls, which was designated a
"material weakness." The material weakness indicated that there was inadequate
segregation of duties within our accounting function. We believe this resulted
from continued cost cutting efforts, which resulted in the termination of
various accounting personnel during 2002 and 2003. Management believes that
sufficient compensating controls have been implemented to minimize the risks
associated with this material weakness, including additional Chief Executive
Officer and Board of Directors oversight.
17
PART III
ITEM 9. DIRECTORS , EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
The information relating to our directors and executive officers contained in
our definitive Proxy Statement to be delivered to stockholders in connection
with its 2004 Annual Meeting of Stockholders (the "2004 Proxy Statement") is
incorporated herein by reference.
ITEM 10. EXECUTIVE COMPENSATION.
The information relating to executive compensation contained in the 2004 Proxy
Statement is incorporated herein by reference.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information relating to security ownership of certain beneficial owners and
management contained in the 2004 Proxy Statement is incorporated herein by
reference.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information relating to certain relationships and related transactions
contained in the 2004 Proxy Statement is incorporated herein by reference.
ITEM 13. EXHIBITS AND REPORTS OF FORM 8-K.
(a) Exhibits
The following exhibits are filed with or incorporated by reference into this
report. The exhibits which are denominated by an asterisk (*) were previously
filed as a part of, and are hereby incorporated by reference from either (i) the
Post-Effective Amendment No. 1 to the Company's Registration Statement on Form
S-18 (File No. 33-27040-D) (referred to as "S-18 No. 1"), (ii) Post-Effective
Amendment No. 2 to the Company's Registration Statement on Form S-18 (File No.
33-27040-D) (referred to as "S-18 No. 2"), (iii) Post-Effective Amendment No. 3
to the Company's Registration Statement on Form S-18 (File No. 33-27040-D)
(referred to as "S-18 No. 3"); (iv) the Company's Quarterly Report on Form 10-Q
for the quarter ended December 31, 1992 (referred to as "1992 10-Q"); (v) the
Company's Registration Statement Form S-1 (File No. 33-85754) (referred to as
"S-1"); (vi) the Company's Annual Report on Form 10-K for the year ended
December 31, 1993 (referred to as "1993 10-K"); (vii) the Company's Annual
Report on Form 10-K for the year ended December 31, 1994 (referred to as "1994
10-K"); (viii) the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 (referred to as "1995 10-K"), (ix) the Company's Annual Report
on Form 10-K for the year ended December 31, 1998, as amended (referred to as
"1998 10-K/A"), (x) the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999 (referred to as "June 1999 10-Q"), (xi) the Company's Form
S-8 Registration Statement (File No. 333-18239), (referred to as "Warrant Plan
S-8"), (xii) the Company's Form S-8 Registration Statement (File No. 333-18237),
(referred to as "Option Plan S-8"), (xiii) the Company's Registration Statement
on Form S-3 amended January 31, 1999 ("1999 S-3"), (xiv) the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 2001 (referred to as
"2001 10-Q"), (xv) the Company's Annual Report on Form 10-K for the year ended
December 31, 2001 (referred to as "2001 10-K"); and (xvi) the Company's Annual
Report on Form 10-K for the year ended December 31, 2002 (referred to as "2002
10-K").
18
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
*3.1 Certificate of Incorporation, including Certificate of Stock
Designation dated September 25, 1990, and amendments dated
December 26, 1990, August 19, 1991 and October 17, 1991 (S-18 No.
3, Exhibit 3-1)
*3.2 Amended Bylaws of the Company as presently in use (S-18 No. 1,
Exhibit 3.2)
*3.3 Certificate of Amendment to Certificate of Incorporation filed on
February 10, 1993 (1992 10-Q)
*3.6 Certificate of Amendment to Certificate of Incorporation filed on
February 13, 1995 (1994 10-K)
*3.7 Certificate of Amendment to Certificate of Incorporation filed on
September 8, 1995 (1995 10-K)
*3.9 Certificate of Amendment of Certificate of Incorporation filed on
January 13, 1999 (1998 10-K/A)
*3.10 Certificate of Amendment to Certificate of Incorporation filed on
June 28, 1999 (June 1999 10-Q)
*10.3 1991 Stock Option Plan (S-18 No. 2, Exhibit 10.1(a))
*10.3.1 Amendment No. 1 to 1991 Stock Option Plan (1993 10-K)
*10.3.2 Amendment No. 2 to 1991 Stock Option Plan (S-1)
*10.3.3 Amendment No. 3 to 1991 Stock Option Plan (S-1)
*10.3.4 Amendment No. 4 to 1991 Stock Option Plan (Option Plan S-8,
Exhibit 4.5)
*10.3.5 Amendment No. 5 to 1991 Stock Option Plan (1998 10-K/A)
*10.4 1995 Performance Warrant Plan (Warrant Plan S-8, Exhibit 4.1)
*10.7 1994 Employee Stock Purchase Plan (1994 10-K)
*10.8 Promissory Note, dated November 18, 1999, issued to Thomson
Kernaghan & Co., Ltd. in the principal amount of $900,000 (1998
10-K/A)
*10.14 License Agreement between ACIS, Inc. and the Company dated
September 9, 1999 (1999 S-3)
*10.21 First Amendment and Modification of ACIS, Inc. warrant agreement
dated September 7, 2001 (2001 10-Q)
*10.22 ACIS Technology License Agreement between ACIS, Inc. and the
Company dated September 27,2001 (2001 10-Q)
*10.23 Promissory Note dated November 9, 2001 by and between the Company
and Larry Carr (2001 10-K)
19
*10.24 Promissory Note dated November 9, 2001 by and between the Company
and Edward S. Redstone (2001 10-K)
*14.1 Code of Ethics (2002 10-K)
21.1 Subsidiaries of the Company
23.1 Consent of Marcum & Kliegman LLP
23.2 Consent of Grant Thornton LLP
31.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the
President and Chief Executive Officer.
31.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the
Chief Financial Officer.
32.1 Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
99.1 Independent Auditors' Reports and Financial Statements
(b) Reports on Form 8-K.
There were no reports on Form 8-K filed during the quarter ended December
31, 2003.
ITEM 14. PRINCIPAL ACCOUNTANTS FEES
The information relating to principal accountant fees and services contained in
the 2004 Proxy Statement is incorporated herein by reference.
20
SIGNATURES
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.
SIMTROL, INC.
By: /s/ Richard W. Egan
--------------------------------------
Date: March 30, 2004 Richard W. Egan, Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, the
following persons in the following capacities have signed this report below on
the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Larry M. Carr Chairman of the Board March 30, 2004
---------------------------------
Larry M. Carr
/s/ Richard W. Egan Chief Executive Officer March 30, 2004
---------------------------------
Richard W. Egan
/s/ Stephen N. Samp Chief Financial Officer March 30, 2004
--------------------------------- (Principal Financial and
Stephen N. Samp Accounting Officer)
/s/ Dallas S. Clement Director March 30, 2004
---------------------------------
Dallas S. Clement
/s/ Julia B. North Director March 30, 2004
---------------------------------
Julia B. North
/s/ Edward S. Redstone Director March 30, 2004
---------------------------------
Edward S. Redstone
21