UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2007
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Commission File Number 0-31729
INTEGRATED DATA CORP.
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(Exact name of small business issuer as specified in its charter)
Delaware 23-2498715
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(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
1000 N. West Street, Suite 1200, Wilmington, DE 19801
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(Address of principal executive offices)
Telephone: (302) 295-5057
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act 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[ ] No[X]
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes[ ] No[X]
Check whether the registrant filed all documents and reports required to be
filed by Sections 12, 13 or 15(d) of the Securities Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes[X] No[ ]
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practical date:
As of August 18, 2008: Common Stock = 9,525,590 shares;
Preferred Stock = 2,566 shares
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Transitional Small Business Disclosure Format (Check one): Yes[ ] No[X]
INTEGRATED DATA CORP.
INDEX TO FORM 10-QSB
PAGE
PART I. FINANCIAL INFORMATION.............................................1
Item 1. Financial Statements.........................................1
Consolidated Balance Sheets at March 31, 2007 (unaudited)
and June 30, 2006 (audited)......................................1
Consolidated Statements of Operations for the three and nine
month periods ended March 31, 2007 and 2006 (unaudited)..........2
Consolidated Statement of Stockholders' Equity (Deficit)
for the nine month period ended March 31, 2007 (unaudited).......3
Consolidated Statements of Cash Flows for the nine month periods
ended March 31, 2007 and 2006 (unaudited)........................4
Notes to Consolidated Financial Statements (unaudited)...........6
Item 2. Management's Discussion and Analysis or
Plan of Operation...........................................18
Item 3. Controls and Procedures.....................................23
PART II. OTHER INFORMATION...............................................24
Item 1. Legal Proceedings...........................................24
Item 2. Unregistered Sales of Equity Securities
and Use of Proceeds.........................................24
Item 3. Defaults Upon Senior Securities.............................24
Item 4. Submission of Matters to a Vote of Security Holders.........24
Item 5. Other Information...........................................24
Item 6. Exhibits....................................................25
SIGNATURES................................................................26
-i-
NOTE REGARDING FORWARD LOOKING STATEMENTS
This quarterly report on Form 10-QSB, including exhibits thereto, contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. These forward-looking statements are typically identified
by the words "anticipates", "believes", "expects", "intends", "forecasts",
"plans", "future", "strategy", or words of similar meaning. Various factors
could cause actual results to differ materially from those expressed in the
forward-looking statements. The Company assumes no obligations to update
these forward-looking statements to reflect actual results, changes in
assumptions, or changes in other factors, except as required by law.
-ii-
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
INTEGRATED DATA CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars and Shares in Thousands)
March 31, June 30,
2007 2006
----------- ---------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 6,902 $ 12
Note receivable from related parties - 59
Investment escrow receivable 983 -
Prepaid expenses - 8
--------- ---------
Total Current Assets 7,885 79
INVESTMENT IN AFFILIATE 13,000 3,228
LOAN RECEIVABLE FROM AFFILIATE 1,600 -
--------- ---------
TOTAL ASSETS $ 22,485 $ 3,307
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities 353 207
Short-term borrowings from related party - 171
--------- ---------
Total Current Liabilities 353 378
LONG TERM ACQUISITION LIABILITY 3,000 -
--------- ---------
TOTAL LIABILITIES 3,353 378
--------- ---------
STOCKHOLDERS' EQUITY
Preferred Stock
$0.001 par value; authorized 2,000 shares;
no shares issued and outstanding at
March 31, 2007 and June 30, 2006 - -
Common Stock
$0.001 par value; 50,000 shares authorized;
issued and outstanding, 7,884 shares at
March 31, 2007 and June 30, 2006 8 8
Additional paid-in capital 285,380 285,380
Accumulated deficit (272,376) (282,468)
Common stock to be issued related to acquisition 6,120 -
Accumulated other comprehensive income - 9
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 19,132 2,929
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 22,485 $ 3,307
========= =========
The accompanying notes are an integral part of these consolidated financial
statements.
-1-
INTEGRATED DATA CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(Dollars and Shares in Thousands, Except Per Share Amounts)
Three Months Ended Nine Months Ended
March 31, March 31,
------------------ ------------------
2007 2006 2007 2006
-------- -------- -------- --------
REVENUE $ - $ - $ - $ 72
COST OF REVENUES - - - 94
-------- -------- -------- --------
- - - (22)
OPERATING EXPENSES
Marketing - - 1 -
Depreciation and amortization - - - 1
General and administrative 97 31 214 218
-------- -------- -------- --------
LOSS BEFORE OTHER INCOME (97) (31) (215) (241)
-------- -------- -------- --------
OTHER INCOME (EXPENSES)
Other income 174 - 174 187
Other expense - - - (46)
Equity in earnings - DataWave - 153 304 384
Gain on sale of investment
in DataWave 9,627 27 9,627 27
Gain on sale of investment in ICS 208 - 208 -
Gain on disposal of fixed assets - - - 11
-------- -------- -------- --------
TOTAL OTHER INCOME 10,009 180 10,313 563
-------- -------- -------- --------
NET INCOME BEFORE INCOME TAX 9,912 149 $ 10,098 $ 322
Provision for income taxes (200) - (200) -
-------- -------- -------- --------
NET INCOME 9,712 149 9,898 322
======== ======== ======== ========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 7,884 7,884 7,884 7,884
======== ======== ======== ========
BASIC AND DILUTED NET INCOME
PER COMMON SHARE $ 1.23 $ 0.02 $ 1.26 $ 0.04
======== ======== ======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
-2-
INTEGRATED DATA CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
NINE MONTHS ENDED MARCH 31, 2007
(Dollars and Shares in Thousands)
COMMON STOCK
---------------
NUMBER ADD'L
OF PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT
------ ------ --------- -----------
BALANCES, JUNE 30, 2006 7,884 $ 8 $ 285,380 $(282,468)
Nine months ended
March 31, 2007
(Unaudited):
Adjustment related to Investment
in DataWave (see Note 5) - - - 194
Net income - - - 9,898
Foreign currency translation
adjustment - - - -
------ ------ -------- ----------
BALANCES, MARCH 31,
2007 (Unaudited) 7,884 $ 8 $ 285,380 $(272,376)
====== ====== ========= ==========
ACCUMULATED
-CONTINUED- OTHER
COMPREHENSIVE COMPREHENSIVE
INCOME INCOME
------------- -------------
BALANCES, JUNE 30, 2006 $ 9
Nine months ended
March 31, 2007
(Unaudited):
Adjustment related to Investment
in DataWave (see Note 5) - -
Net income 9,898 -
Foreign currency translation
adjustment (9) (9)
---------- ----------
BALANCES, MARCH 31,
2007 (Unaudited) $ 9,889 $ -
========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
-3-
INTEGRATED DATA CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Dollars in Thousands)
Nine Months Ended Nine Months Ended
March 31, 2007 March 31, 2006
----------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 9,898 $ 322
Adjustments to reconcile net income to net
cash flows provided by (used in)
operating activities:
Depreciation and amortization - 1
Equity Income From Investment (304) (384)
Gain on sale of investment in DataWave (9,627) (27)
Gain on sale of investment in ICS (208) -
Stock issued for compensation - 40
Changes in assets and liabilities which
increase (decrease) cash:
Prepaid expenses 8 (8)
Other assets - 4
Accounts payable and accrued expenses 175 (34)
--------- ---------
Net cash provided by (used in)
operating activities (58) (86)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investment
in DataWave 12,369 -
Proceeds from (repayments to)
note receivable from related party 59 (95)
Purchase of investment in affiliate (MHL) (3,880) -
Advance to affiliate (1,600) -
--------- ---------
Net cash provided by (used in)
investing activities 6,948 (95)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings - 167
--------- ---------
Net cash provided by (used in)
financing activities - 167
--------- ---------
EFFECT OF EXCHANGE RATE CHANGES ON CASH - 15
--------- ---------
NET CHANGE IN CASH AND EQUIVALENTS 6,890 1
CASH AND EQUIVALENTS, BEGINNING OF PERIOD 12 10
--------- ---------
CASH AND EQUIVALENTS, END OF PERIOD $ 6,902 $ 11
========= =========
-4-
INTEGRATED DATA CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)
(Dollars in Thousands)
Nine Months Ended Nine Months Ended
March 31, 2007 March 31, 2006
----------------- -----------------
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES
Sale of Investment in DataWave in
in satisfaction of short-term borrowings $ - $ 566
Note receivable sold in satisfaction of
short-term borrowings $ - $ 600
Adjustment to accumulated deficit related
to Investment in DataWave (see Note 5) $ 194 $ 275
Investment escrow receivable due
from sale of DataWave $ 983 $ -
Long term acquisition liability due to
purchase of Montana Holdings Ltd $ 3,000 $ -
Common stock to be issued related to
purchase of Montana Holdings Ltd $ 6,120 $ -
The accompanying notes are an integral part of these consolidated financial
statements.
-5-
INTEGRATED DATA CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2007 AND 2006
NOTE 1 - BASIS OF INTERIM PRESENTATION
The accompanying interim period financial statements of Integrated Data Corp.
("IDC" or the "Company") are unaudited, pursuant to certain rules and
regulations of the Securities and Exchange Commission, and include, in the
opinion of management, all adjustments (consisting of only normal recurring
accruals) necessary for a fair statement of the results for the periods
indicated, which, however, are not necessarily indicative of results that may
be expected for the full year. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with
accounting principles generally accepted in the United States have been
condensed or omitted pursuant to such rules and regulations. The financial
statements should be read in conjunction with the financial statements and the
notes thereto included in IDC's June 30, 2006 Form 10-KSB and other
information included in IDC's Forms 8-Ks and amendments thereto as filed with
the Securities and Exchange Commission.
NOTE 2 - HISTORY AND NATURE OF THE BUSINESS
Integrated Data Corp. ("IDC") is a non-operating U.S. holding company with
interests in the U.S. and the Bahamas. IDC and its subsidiaries, C3
Technologies Inc. ("C3") and on January 23, 2007 the Company acquired a 20%
interest in Montana Holdings Ltd ("MHL")(see Note 6), (collectively the
"Company", "We", or "Our"), offer wireless communication services and resort
real estate. DataWave Systems Inc. ("DataWave"), in which the Company held a
38.859% minority interest at the beginning of this reporting period, offered
point-of-sale activation, financial transaction, and other services. On
January 5, 2007 DataWave was wholly acquired by InComm Holdings Inc. for cash.
(See Note 5 below.)
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fiscal Year End
---------------
The Company's fiscal year ends on June 30. In these financial statements, the
three-month periods ended March 31, 2007 and 2006 are referred to as Fiscal
3Q07 and Fiscal 3Q06, respectively, and the nine-month periods ended March 31,
2006 and 2005 are referred to as Fiscal Nine Months 2007 and Fiscal Nine
Months 2006, respectively.
-6-
INTEGRATED DATA CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2007 AND 2006
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Principles of Consolidation and Basis of Presentation
-----------------------------------------------------
The consolidated financial statements include the accounts of the Company and
its wholly-owned and majority owned subsidiaries. All significant inter-
company transactions have been eliminated in consolidation.
In Fiscal 2006, the Company adopted the equity method of accounting to reflect
its 38.859% minority interest in DataWave and retrospectively applied the
equity method to Fiscal 3Q06 and Fiscal Nine Months 2006 as a change in
reporting entity in accordance with SFAS No. 154, "Accounting Changes and
Error Corrections". (See Note 5.)
The Company has adopted the equity method of accounting to reflect its 20.0%
minority interest in MHL. Equity in earnings for its minority interests are
reported in the Company's consolidated financial statements with a three month
lag. The reason for this is MHL requires additional time to properly reflect
its financial position and results of operations.
Foreign Currency Translation
----------------------------
Assets and liabilities of its foreign subsidiaries have been translated using
the exchange rate at the balance sheet date. The average exchange rate for
the period has been used to translate revenues and expenses. Translation
adjustments are reported separately and accumulated in a separate component of
equity (accumulated other comprehensive income).
Reporting Currency
------------------
The reporting currency of all subsidiary and minority interest companies is
the United States Dollar ("USD").
Estimates
---------
The preparation of financial statements in conformity with generally accepted
accounting principles requires the use of estimates based on management's
knowledge and experience. Accordingly actual results may differ from those
estimates.
-7-
INTEGRATED DATA CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2007 AND 2006
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Impairment of Long-Lived Assets
-------------------------------
The Company reviews its long-lived assets, other than goodwill, for impairment
whenever events or changes in circumstances indicate that the carrying value
of such assets may not be recoverable. To determine recoverability, the
Company compares the carrying value of the assets to the estimated future
undiscounted cash flows. Measurement of an impairment loss for long-lived
assets held for use is based on the fair value of the asset. Long-lived
assets classified as held for sale are reported at the lower of carrying value
and fair value less estimated selling costs. For assets to be disposed of
other than by sale, an impairment loss is recognized when the carrying value
is not recoverable and exceeds the fair value of the asset. For goodwill, an
impairment loss will be recorded to the extent that the carrying amount of the
goodwill exceeds its fair value. No impairment losses were identified or
recorded for Fiscal Nine Months 2007.
Comprehensive Income (Loss)
---------------------------
The Company has adopted SFAS No. 130, "Reporting Comprehensive Income". This
statement establishes rules for the reporting of comprehensive income (loss)
and its components. The component of comprehensive income consists of foreign
currency translation adjustments.
Net Income Per Common Share
---------------------------
Net income per common share is based upon the weighted average number of
common shares outstanding during the period. The treasury stock method is
used to calculate dilutive shares. Such method reduces the number of dilutive
shares by the number of shares purchasable from the proceeds of the options
and warrants assumed to be exercised. Basic and diluted weighted average
shares outstanding for Fiscal 3Q07 and 3Q06 and Fiscal Nine Months 2007 and
Fiscal Nine Months 2006 were the same because the effect of using the treasury
stock method would be anti-dilutive.
-8-
INTEGRATED DATA CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2007 AND 2006
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Recently Issued Accounting Pronouncements
-----------------------------------------
In June 2006, the FASB issued Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes". FIN 48 prescribes detailed guidance for the
financial statement recognition, measurement and disclosure of uncertain tax
positions recognized in an enterprise's financial statements in accordance
with FASB Statement No. 109, "Accounting for Income Taxes". Tax positions
must meet a more-likely-than-not recognition threshold at the effective date
to be recognized upon the adoption of FIN 48 and in subsequent periods. FIN
48 will be effective for fiscal years beginning after December 15, 2006 and
will become effective for the Company beginning with the first quarter of
Fiscal 2008. The provisions of FIN 48 will be applied to all tax positions
under Statement No. 109 upon initial adoption. The cumulative effect of
applying the provisions of this interpretation will be reported as an
adjustment to the opening balance of retained earnings for that fiscal year.
The Company is currently evaluating the potential impact of FIN 48 on its
consolidated financial statements.
In September 2006, the SEC issued Staff Accounting Bulletin No. 108 ("SAB No.
108"). SAB No. 108 addresses the process and diversity in practice of
quantifying financial statement misstatements resulting in the potential build
up of improper amounts on the balance sheet. The Company will be required to
adopt the provisions of SAB No. 108 in Fiscal 2007. The Company currently
does not believe that the adoption of SAB No. 108 will have a material impact
on our consolidated financial statements.
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements",
("SFAS No. 157"). SFAS No. 157 establishes a framework for measuring fair
value and expands disclosures about fair value measurements. The changes to
current practice resulting from the application of SFAS No. 157 relate to the
definition of fair value, the methods used to measure fair value, and the
expanded disclosures about fair value measurements. SFAS No. 157 is effective
for fiscal years beginning after November 15, 2007 and will become effective
for the Company beginning with the first quarter of Fiscal 2009. We do not
believe that the adoption of the provisions of SFAS No. 157 will materially
impact our financial position and results of operations.
-9-
INTEGRATED DATA CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2007 AND 2006
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities. This Statement permits entities
to choose to measure many financial instruments and certain other items at
fair value that are not currently required to be measured at fair value. The
objective is to improve financial reporting by providing entities with the
opportunity to mitigate volatility in reported earnings caused by measuring
related assets and liabilities differently without having to apply complex
hedge accounting provisions. This statement also establishes presentation and
disclosure requirements designed to facilitate comparisons between entities
that choose different measurement attributes for similar types of assets and
liabilities. This Statement is effective for financial statements issued for
fiscal years beginning after November 15, 2007 and will become effective for
the Company beginning with the first quarter of Fiscal 2009. The Company has
not yet determined the impact of the adoption of SFAS No. 159 on its financial
statements and footnote disclosures.
NOTE 4. NOTE RECEIVABLE FROM RELATED PARTIES
As of June 30, 2006 the Company was due $58,889 from Integrated Technologies &
Systems Ltd. ("IT&S"), a greater than 5% shareholder. It was repaid during
Fiscal 1Q07.
NOTE 5. INVESTMENT IN DATAWAVE
On December 12, 2002, the Company acquired an approximate 41% interest in
DataWave Systems Inc. ("DataWave") for 1,794,900 newly issued shares of the
Company's common stock valued at $1.00 per share.
Effective January 14, 2003, the Company agreed to purchase an additional
4,023,030 freely tradable shares of DataWave. The shares were purchased in
off-market transactions for consideration of 402,303 newly issued Rule 144
restricted shares of the Company (one share of the Company's common stock
being exchanged for each ten shares of DataWave) valued at $1.00 per share.
These shares, when added to 17,949,000 shares acquired in December 2002, bring
the Company's total holdings in DataWave to 21,972,030 shares, creating a
majority interest in DataWave of 50.062%. The acquisition was accounted for
under the purchase method of accounting.
As of June 30, 2004, the Company's total holdings in DataWave were adjusted to
21,947,030, or a 50.005% majority interest. This adjustment was made because
of default on the transfer of 25,000 shares of DataWave under the Share
Exchange Agreements of January 14, 2003 (see above paragraph).
-10-
INTEGRATED DATA CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2007 AND 2006
NOTE 5. INVESTMENT IN DATAWAVE (continued)
On February 1, 2005, the Company acquired an additional 2,937,500 shares of
common stock of DataWave Systems, Inc increasing the Company's total holding
in DataWave to 24,884,530 shares of common stock, a 53.142% majority interest.
As a result of this change in ownership interest, the Company recorded a
$128,000 adjustment to accumulated deficit. The acquisition was accounted for
under the purchase method of accounting.
On January 3, 2006, the Company sold 3,773,918 of DataWave Systems, Inc.
common stock resulting in an approximate 8.059% decrease in the interest of
DataWave Systems. At June 30, 2006, DataWave's issued and authorized common
stock was 54,326,834 whereby the company's current ownership of 21,110,612
shares has created a 38.859% minority interest. As a result of the change in
ownership interest, the Company recorded a $63,000 adjustment to accumulated
deficit. The Company for period ending June 30, 2006 reflects the DataWave
investment utilizing the equity method of accounting due to its current
minority interest. The book value of the DataWave investment at June 30, 2006
incorporating the equity method is $3,227,918. The Company recorded equity
income of -0- for Fiscal 3Q07 and $153,017 for Fiscal 3Q06. The Company
recorded equity income of $303,668 for Fiscal Nine Months 2007 and $384,045
for Fiscal Nine Months 2006.
On January 5, 2007 DataWave was wholly acquired by InComm Holdings Inc. for
cash (the "DataWave Acquisition"). As a result the Company exchanged its
21,110,612 common shares of DataWave for the following:
Cash, January 5, 2007 $12,369,490
Escrow amount received August 31, 2007
net of expenses of $305,218 $522,212
Escrow amount received January 22, 2008
net of expenses of $212,183 460,698 982,910
-------- -----------
Net Proceeds $13,352,400
===========
The proceeds of $13,352,400 net of carrying amount of the investment of
$3,725,700 resulted in a gain on sale of $9,626,700.
-11-
INTEGRATED DATA CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2007 AND 2006
NOTE 6. INVESTMENT IN MONTANA HOLDINGS LTD ("MHL")
On January 23, 2007 the Company acquired a 20% equity interest in MHL through
the purchase of 1,120 shares of the 5,600 outstanding shares of MHL. MHL and
its resort development on Rum Cay in the Bahamas has been independently valued
at US$65,000,000; therefore, total consideration for 20% of MHL was
$13,000,000 payable as: (1) $3,880,000 in cash; (2) $6,120,000 in the form of
3,060,000 restricted shares of common stock of the Company; and (3) $3,000,000
in the form of an unsecured loan from MHL bearing an accrued interest rate of
3% per annum and payable in cash on the 5th anniversary of the Sale and
Purchase Contract or, at the Company's sole discretion, at any time prior to
the 5th anniversary in restricted shares of common stock of Company at a fixed
price of $2.00 per share. This investment is being accounted for under the
equity method of accounting. However, due to the three month lag, no results
of operations have been reported for the three months ended March 31, 2007.
Net investment in MHL is represented by the following (in thousands):
As of January 31, 2007
----------------------
Net current assets $ 2,001
Land 41,256
Construction in progress 8,137
Other fixed assets 148
Net current liabilities (846)
Long-term debt (17,700)
Interests of other shareholders (26,397)
----------
Company's interest 6,599
Goodwill 6,401
----------
Net Investment $ 13,000
==========
Subsequent to this reporting period on April 3, 2007, the Company repaid
$1,000,000 against the unsecured loan principal.
NOTE 7. MONTANA HOLDINGS LTD ("MHL") LOAN FACILITY
Effective March 8, 2007, the Company entered into an agreement to provide MHL
an ongoing loan facility of up to $7 million to be utilized in defraying the
general costs of MHL's Rum Cay development program in the Bahamas during the
whole of 2007. These funds were to supplement the in excess of $20 million
construction line of credit MHL had secured from Matrix/Bank of Scotland. On
March 9, 2007 the Company loaned MHL $1,600,000 under this loan facility as
reported as Loan receivable from affiliate on the Company's Balance Sheet as
of March 31, 2007.
-12-
INTEGRATED DATA CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2007 AND 2006
NOTE 7. MONTANA HOLDINGS LTD ("MHL") LOAN FACILITY (continued)
On July 30, 2007 both parties agreed to reduce the maximum loan amount under
this loan facility from $7 million to $5 million. On November 27, 2007 the
MHL loan facility obligation was fully satisfied via a transferrable
Promissory Note in the amount of $4,050,000 by MHL and the loan facility was
then terminated. The company continues to hold a 20% equity interest in MHL
as of the filing date of this quarterly report.
NOTE 8. ACQUISITIONS AND DISPOSITIONS
On December 11, 2002, the Company acquired all of the outstanding capital
stock of C4 Services, Ltd. ("C4 Services") for 4,200,000 newly issued shares
of the Company's common stock valued at $1.00 per share. The acquisition was
accounted for under the purchase method and the results of C4 Services have
been included in the Company's consolidated results effective December 31,
2002. At the time of acquisition, C4 Services owned the exclusive
international (excluding the Americas) DataWave technology license and
Integrated Communication Services Ltd ("ICS"). Both were transferred directly
to the parent company, Integrated Data Corp, and the C4 Services entity was
discontinued. Hence, the Company owned the exclusive worldwide (excluding the
Americas) rights to own, operate, and license any and all DataWave
technologies and services (the "DataWave International License") before the
license was sold to DataWave System, Inc. during the 2005 fiscal year.
Effective February 1, 2005, the DataWave International License acquired in
December 2002 with the acquisition of C4 Services was effectively transferred
back to DataWave through termination of the DataWave International License.
Consideration from DataWave amounted to $865,000 -- $265,000 in cash and
$600,000 in the form of a Promissory Note.
On May 5, 2006, the Company sold its 60% interest, including all assets and
liabilities, in the non-operating, Italian entity IDC Italia Srl to a private
Italian citizen for one (1) Euro. Integrated Data Technologies Ltd, a non-
operating, wholly-owned UK subsidiary, was sold along with all assets and
liabilities to AMB Management Services (Gibraltar) Ltd on June 15, 2006 for
one (1) Euro.
As of June 30, 2006, the management and board of Integrated Communication
Services Ltd ("ICS") elected to cease operations of ICS because it was deemed
that profitable operation of the business was no longer possible. On January
25, 2007, the Company sold the ICS shell along with all assets and liabilities
to AMB Management Services (Gibraltar) Ltd for one (1) Euro.
-13-
INTEGRATED DATA CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2007 AND 2006
NOTE 9. SHORT-TERM BORROWINGS FROM RELATED PARTY
ICS, a wholly-owned subsidiary of the Company, borrowed money from IT&S and/or
affiliates for its working capital requirements. The balance owed as of June
30, 2006 was $171,000. This liability remained with ICS upon its disposition
on January 25, 2007; hence, the short-term borrowings from a related party
balance as of March 31, 2007 was -0-.
NOTE 10. INCOME TAXES
The Company realized income before taxes of $9,912,000 during the reporting
period primarily due to the gain on the sale of its investment in DataWave.
At June 30, 2006 the Company had net operating loss carry forwards for Federal
income tax purposes of approximately $242,000,000 and adequate net operating
loss carry forwards for state income tax purposes which, in the opinion of
Company management, is available to offset a significant portion of its
taxable income. However, the Company has provided for income taxes of
$200,000 representing an estimate for the alternative minimum tax.
A valuation allowance has been provided for the income tax benefits of the
remaining net operating loss carry forwards due to the uncertainty of their
realization.
NOTE 11. COMMITMENTS AND CONTINGENCIES
Legal Proceedings
-----------------
The Company, from time to time, during the normal course of its business
operations, may be subject to various litigation claims and legal disputes.
Currently there are no claims or disputes.
Leases
------
At March 31, 2007 the Company leased office space via a sublease from an
unrelated party on a month-to-month basis. Under this sublease, rent expense
varied on a quarterly basis based on the amount of office space utilized by
the Company versus the use of the Company's office assets by the unrelated
party. Rent expense for Fiscal 3Q07 was $225 and the rent expense for Fiscal
3Q06 was $2,025. Rent expense for Fiscal Nine Months 2007 and Fiscal Nine
Months 2006 were $2,925 and $14,734 respectively. There are no future minimum
payments with respect to leases for equipment or furniture.
-14-
INTEGRATED DATA CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2007 AND 2006
NOTE 12. SHARE-BASED PAYMENT
In December 2004, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard SFAS 123 (revised 2004), Share-
Based Payment ("SFAS 123(R)"). SFAS 123(R) supersedes APB Opinion No. 25,
Accounting for Stock Issued to Employees, and amends SFAS No. 95, Statement of
Cash Flows. Generally, the approach in SFAS 123(R) is similar to the approach
described in SFAS 123. However, SFAS 123(R) requires share-based payments to
employees, including grants of employee stock options, to be recognized in the
income statement based on their fair values at the date of grant. Pro forma
disclosure is no longer an alternative.
On July 1, 2006, the Company adopted SFAS 123(R) using the modified
prospective method as permitted under SFAS 123(R). Under this transition
method, compensation cost recognized in the first quarter ended September 30,
2006 includes compensation cost for all share-based payments granted prior to
but not yet vested as of June 30, 2006, based on the grant-date fair value
estimated in accordance with the provisions of SFAS 123. In accordance with
the modified prospective method of adoption, the Company's results of
operations and financial position for prior periods have not been restated.
The Company uses the Black-Scholes option pricing model to calculate the
grant-date fair value of an award.
As of July 1, 2006, there were no unrecognized compensation expense related to
non-vested, market-based share awards.
Prior to June 30, 2006, the Company followed the provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation". The provisions of SFAS No. 123
allowed companies to either expense the estimated fair value of stock options
or to continue to follow the intrinsic value method set forth in Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
("APB 25"), but disclose the pro forma effects on net income had the fair
value of the options been expensed. The Company elected to apply APB 25 in
accounting for its stock option incentive plans. Since there were no market-
based share awards issued to employees during Fiscal 3Q07 and Fiscal Nine
Months 2007, there is no requirement for pro forma disclosure.
In accordance with APB 25 and related interpretations, compensation expense
for stock options was recognized in income based on the excess, if any, of the
quoted market price of the stock at the grant date of the award or other
measurement date over the amount an employee must pay to acquire the stock.
Generally, the exercise price for stock options granted to employees was equal
to the fair market value of the Company's common stock at the date of grant,
thereby resulting in no recognition of compensation expense by the Company
prior to June 30, 2006.
-15-
INTEGRATED DATA CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2007 AND 2006
NOTE 12. SHARE-BASED PAYMENT (continued)
Stock Option Plan
-----------------
The Company, with stockholder approval, adopted a Stock Option Plan (the
"Plan") in November 1991 providing for the granting of options to officers,
key employees, certain consultants and others. Options to purchase the
Company's common stock could be made for a term of up to ten years at the fair
market value at the time of the grant. Incentive options granted to a ten
percent or more stockholders could not be for less than 110% of fair market
value or for a term of more than five years. The aggregate fair market value
of the stock for which an employee could be granted incentive options first
exercisable in any calendar year could not exceed $100,000.
The Stock Option Plan terminated by default in November 2001. All options
granted under the Stock Option Plan remain valid through the specified life of
the option, typically 10 years. As of June 30, 2006 there were 1,566 common
share options outstanding with none of the options being "in the money".
During Fiscal 3Q07 and Fiscal 3Q06, no options were exercised under the Stock
Option Plan.
Stock Options
-------------
Prior to November 1991 the Company's Board of Directors periodically
authorized the issuance of options to purchase the Company's common stock to
employees and members of the Board of Directors. These options could
generally be exercised at the fair market value of the common stock on the
date of the grant. The following table summarizes activity for stock options
during the nine months ended March 31, 2007:
Weighted Average
Shares Exercise Price Exercise Price
(000) Per Share Per Share
------ -------------- ----------------
Options outstanding and
exercisable, 6/30/06 2 $475.00 - $1,188.00 $902.00
and 3/31/07
There were no stock options issued during Fiscal Nine Months 2007.
-16-
INTEGRATED DATA CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2007 AND 2006
NOTE 13. SUBSEQUENT EVENTS
Subsequent to this reporting period on October 26, 2007, the Company formed a
new subsidiary in partnership with Palm Acquisition Partners LLC, a Florida
limited liability company. The new entity is doing business under the name of
IDC Palm Energy, LLC and is a Delaware limited liability company. With a
50.01% interest in this new subsidiary, IDC will be consolidating the
financial statements of IDC Palm Energy, LLC into its own financial
statements.
-17-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS.
The following discussion and analysis of our results of operations and
financial position should be read in conjunction with our consolidated
financial statements and the notes thereto included elsewhere in this Report.
General Operations
------------------
Integrated Data Corp. ("IDC") is a non-operating U.S. holding company with
interests in the U.S and the Bahamas. IDC and its subsidiaries (collectively
the "Company", "We", or "Our") are involved in wireless communication systems
and services and resort real estate development and sales.
As of March 31, 2007 our holdings were as follows:
CORPORATION OR INTEREST PERCENT OWNERSHIP
C3 Technologies Inc. 100%
Montana Holdings Ltd. 20%
Results of Operations
---------------------
Integrated Communications Services Ltd ("ICS"), a wholly-owned, London-based
subsidiary of the IDC, ceased operations as of June 30, 2006 after posting
consecutive quarterly losses and finding it difficult to continue to raise
working capital. In January of 2007, we disposed of this British shell
company, including all assets and liabilities, to AMB Management Services
(Gibraltar) Ltd. C3 Technologies Inc. also ceased operations due to a lack of
working capital. During Fiscal 3Q07, our 38.9% interest in DataWave Systems
Inc. was purchased for cash by InComm Holdings, Inc. ("InComm") and we
acquired a 20% equity interest in Montana Holdings Ltd. ("MHL"), the owner and
developer of Rum Cay Resort Marina (www.RumCay.com).
As a publicly traded company, DataWave maintained current filings with the
U.S. Securities and Exchange Commission including annual reports on Form 10-
KSB, quarterly reports on Form 10-QSB, and current reports on Form 8-K up
until its acquisition by InComm on January 3, 2007 (the "DataWave
Acquisition). Detailed information on DataWave can be found by accessing
these filings through the SEC website (www.sec.gov). After its acquisition by
InComm, as a wholly-owned subsidiary DataWave ceased filing reports with the
SEC. More information on DataWave can be found on its corporate website
(www.datawave.com); however, the information in, or that can be accessed
through, the DataWave website is not part of this report.
As a result of the DataWave Acquisition, in January 2007 we exchanged our
remaining 21,110,612 common shares of DataWave for $12,369,490 in cash. Upon
InComm completing an audit of the DataWave financials, on August 31, 2007
InComm authorized the release of escrowed funds held back at closing as a
working capital contingency. As a result we netted an additional $522,212 in
-18-
cash from the DataWave Acquisition. Upon the 12-month anniversary of the
DataWave Acquisition, InComm authorized the release of final escrowed funds
held as contingency in case there were any indemnity claims against DataWave
during this one-year waiting period. As a result in January 2008 we netted an
additional $460,698 in cash from the DataWave Acquisition.
With the knowledge that we would soon be receiving approximately $13 million
in cash from the DataWave Acquisition, in late 2006 we began investigating new
investment strategies and were presented with the opportunity to invest in an
ongoing resort development project on the island of Rum Cay in the Bahamas.
This project, Rum Cay Resort Marina (www.RumCay.com) owned by Montana Holdings
Ltd ("MHL"), a private limited company registered in the Bahamas, had an
independent valuation of $65 million. MHL's CEO, Mr. John Mittens, was
interested in obtaining a corporate investor to replace a number of minority
investors who wanted to sell their interests in MHL. Therefore, on January
23, 2007, we entered into a Sale and Purchase Contract with Mr. Mittens, the
majority shareholder of MHL, to acquire a 20% equity interest in MHL for $13
million payable as follows:
(i) $3,880,000 in cash;
(ii) $6,120,000 in the form of 3,060,000 restricted shares of common stock
of the Company; and
(iii) $3,000,000 in the form of an unsecured loan from Mr. Mittens to us
Bearing accruing interest of 3% per annum and payable in cash on the
5th anniversary of the Sale and Purchase Contract or, at our sole
discretion, at any time prior to the 5th anniversary in restricted
shares of common stock of Company at a fixed price of $2.00 per share.
On April 3, 2007, we made a $1 million cash payment against the unsecured loan
from Mr. Mittens. The loan balance as of June 30, 2007, including interest,
was $2,088,265. On June 30, 2007 we renegotiated the conversion share value
for IDC common stock based on IDC's future earning potential from its oil &
gas subsidiary, IDC Palm Energy, LLC. As of June 30, 2007 Mr. Mittens agreed
to convert item ii above and the balance of item iii at a conversion price of
$5.00 per share of IDC common stock. Consequently we issued 1,224,000 shares
and 417,653 shares respectively for a total of 1,641,653 newly issued
restricted shares of IDC common stock to retire the equity and debt
consideration owed to Mr. Mittens.
We also entered into an agreement to provide MHL an ongoing loan facility of
up to $7 million to be utilized in defraying the general costs of MHL's Rum
Cay development program in the Bahamas during the whole of 2007. These funds
were to supplement the $20+ million construction line of credit MHL had
secured from Matrix/Bank of Scotland. On July 30, 2007 both parties agreed to
reduce the maximum loan amount under this loan facility from $7 million to $5
million. On November 27, 2007 the MHL loan facility obligation was fully
satisfied by MHL and the loan facility was then terminated. We continue to
hold a 20% equity interest in MHL as of the filing date of this quarterly
report.
-19-
Continuing with our land and resort investment strategy and with a desire to
diversify our holdings, on July 30, 2007 we entered into an agreement with
Montana Land Resources Ltd to provide it with an ongoing loan facility of up
to $4 million convertible at our sole option pro rata into up to a 20% equity
interest in the company. Montana Land Resources, that has since changed its
name to New England Land Resources Ltd ("NELR"), holds a purchase agreement
for Snow Bay Peninsula on the island of San Salvador in the Bahamas through
its wholly-owned subsidiary Columbus Island Ltd and is a partial owner and
operator of Sumner Point Marina (www.RumCayMarina.com) on Rum Cay. NELR holds
an option to buy out its partner in Sumner Point Marina and to acquire more
property surrounding the marina.
Funding of NELR continues under the NELR loan facility, and on November 27,
2007 the NELR loan facility agreement was amended by mutual consent to (1)
increase the maximum loan amount from $4 million to $7 million and (2) upgrade
the associated convertibility terms from a pro rata 20% equity interest to a
pro rata 60% equity interest. The current loan balance under this loan
facility as of August 1, 2008, including interest, is approximately
$6,996,000.
On August 2, 2007, we entered into a three-year employment agreement with Mr.
David C. Bryan hiring him on as full-time President beginning September 1,
2007.
In partnership with Palm Acquisition Partners LLC, a Florida limited liability
company, we formed a new subsidiary on October 26, 2007 by the name of IDC
Palm Energy, LLC, a Delaware limited liability company. Under the terms of
the operating agreement, IDC has a 50.01% interest in IDC Palm Energy with
Palm Acquisition Partners holding the other 49.99%. Also under the terms of
the operating agreement, we made an initial capital loan to IDC Palm Energy of
$1,200,000 on October 30, 2007.
IDC Palm Energy, LLC ("IDCPE") is a Delaware Limited Liability Company formed
for the purpose of acquiring and operating mature oil and gas production in
the continental United States of America. IDCPE is actively pursuing
acquisition opportunities of mature "stripper" oil and gas well producing
properties that generally have the following attributes:
- Multiple wells with some current production and revenue
- Opportunities to employ modern production methodologies including new
lifting technologies to enhance existing production
- Existing producing infrastructure such as salt water disposal
facilities, pipelines, etc.
- Upside potential via either enhancement of existing producing wells,
re-entry or re-work of non-producing wellbores on existing leasehold
properties, re-completion of existing wellbores, or application of
new technology
As of August 1, 2008, the company has acquired a majority interest in two
separate acquisitions with a total of 207 existing wellbores (118 producing
wells) and monthly production of approximately 4,000 Barrels of Oil (BO) and
21,000 Thousand Cubic Feet (MCF) of gas.
-20-
Three Months Ended March 31, 2007 (Fiscal 3Q07)
vs. Three Months Ended March 31, 2006 (Fiscal 3Q06)
------------------------------------------------------
For Fiscal 3Q07, we incurred net income of $9,712,000 or $1.23 per share as
compared to a net income of $149,000, or $0.02 per share for Fiscal 3Q06. The
dramatic increase in net income is attributable to the sale of our 38.9%
ownership interest in DataWave. We had no revenues in Fiscal 3Q07 because we
disposed of our only operating wholly-owned subsidiary, Integrated
Communications Services Ltd. Our general and administrative operating
expenses increase from $31,000 in Fiscal 3Q06 to $97,000 in Fiscal 3Q07 due to
increases in our consulting and accounting fees. There was no depreciation
and amortization expense in Fiscal 3Q07 because all our fixed and intangible
assets are fully depreciated or amortized.
We posted $174,000 in other income which was the result of interest income on
the lump sum payment we received from the sale of our DataWave stock. We also
realized a $9,835,000 income from investments, $9,627,000 from the sale of
DataWave and $208,000 from the disposition of ICS.
Our assets reflect the influx of cash from the DataWave sale and the
reinvestment of a portion of the cash received into an 20% equity ownership
position in MHL and a $1.6 million loan to MHL. The long-term liability of
$3,000,000 reflects the payment consideration balance on the purchase of 20%
of MHL.
Nine Months Ended March 31, 2007 ("Fiscal Nine Months 2007")
vs. Nine Months Ended March 31, 2006 ("Fiscal Nine Months 2006")
-----------------------------------------------------------------
For Fiscal Nine Months 2007, we incurred net income of $9,898,000, or $1.26
per share compared to net income of $322,000, or $0.04 per share for Fiscal
Nine Months 2006. We had no revenues in Fiscal Nine Months 2007 because we
ceased the operations and disposed of our only operating wholly-owned
subsidiary, Integrated Communications Services Ltd. Our general and
administrative operating expenses remained fairly constant at $218,000 in
Fiscal Nine Months 2006 versus $214,000 in Fiscal Nine Months 2007. There was
no depreciation and amortization expense in Fiscal Nine Months 2007 because
all our fixed and intangible assets are fully depreciated or amortized.
We posted $174,000 in other income which was the result of interest income on
the lump sum payment we received from the sale of our DataWave stock. We also
posted a $9,835,000 income from investment, $9,627,000 from the sale of
DataWave and $208,000 from the disposition of ICS.
-21-
Liquidity and Capital Resources
-------------------------------
At March 31, 2007, we had a working capital surplus of $7,532,000 (including a
cash balance of $6,902,000) as compared to a working capital deficit of
$299,000 (including a cash balance of $12,000) at June 30, 2006. The working
capital increase of $7,831,000 was primarily due to the sale of our 38.9%
equity position in DataWave less the cash required to purchase our 20% equity
position in MHL. In addition accounts payable and accrued expenses were
reduced significantly and short-term borrowings from related party were
eliminated due to the disposition of ICS.
From the sale of DataWave stock we received $12,369,000 in cash during the
reporting period. Subsequent to the reporting period we netted an additional
$983,000 in cash from the DataWave sale escrow distributions that took place
in August 2007 and January 2008. Our purchase of a 20% equity interest in MHL
in late January 2007 required $3,880,000 in cash.
We expect to operate the Company for the foreseeable future on interest
generated from our cash reserves. Future mergers and acquisitions may require
additional funding. There can be no assurances that such funding will be
generated or available, or if available, on terms acceptable to the Company.
Off-Balance Sheet Arrangements
------------------------------
We do not have any off-balance sheet arrangements.
Significant Accounting Policies
-------------------------------
Our accounting policies are set out in Note 3 of the accompanying consolidated
financial statements of IDC. In presenting our financial statements in
conformity with accounting principles generally accepted in the United States,
we are required to make estimates and assumptions that affect the amounts
reported therein. Several of the estimates and assumptions we are required to
make relate to matters that are inherently uncertain as they pertain to future
events. However, events that are outside of our control cannot be predicted
and, as such, they cannot be contemplated in evaluating such estimates and
assumptions. If there is a significant unfavorable change to current
conditions, it will likely result in a material adverse impact to our
consolidated results of operations, financial position and in liquidity. We
believe that the estimates and assumptions we used when preparing our
financial statements were the most appropriate at that time.
-22-
ITEM 3. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
------------------------------------------------
Under the supervision and with the participation of our management, including
our principal executive officer and principal financial officer, we conducted
an evaluation of our disclosure controls and procedures, as such term is
defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the
Securities Exchange Act of 1934, as amended (Exchange Act), as of March 31,
2007. Based on this evaluation, our principal executive officer and principal
financial officers have concluded that our disclosure controls and procedures
are effective to ensure that information required to be disclosed by us in the
reports we file or submit under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in the Securities
and Exchange Commission's rules and forms and that our disclosure and controls
are designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is accumulated and
communicated to our management, including our principal executive and
principal financial officers, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Controls
----------------------------
We have not made any significant changes to our internal controls subsequent
to the Evaluation Date. We have not identified any significant deficiencies
or material weaknesses or other factors that could significantly affect these
controls, and therefore, no corrective action was taken.
-23-
PART II. - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company was not involved in any legal proceedings during the reporting
period.
Subsequent to this reporting period on December 10, 2007, IDC was named a co-
defendant on a complaint against MHL alleging causes of action for violation
of Section 772.103(3), Florida Statutes; violation of a civil RICO conspiracy,
Section 772.1 03(4), Florida Statutes; and for unfair and deceptive trade
practices under Section 501.204, Florida Statutes. On February 15, 2008, the
Company filed a motion to dismiss for lack of personal jurisdiction asserting
that it did not conspire to commit any tortious act in the State of Florida
and that it lacked minimum contacts with the State of Florida such that it
would offend notions of fair play and substantial justice under Florida law
and the Due Process Clause of the United States Constitution. After a non-
evidentiary hearing on May 2, 2008 and an evidentiary hearing on June 5, 2008,
the court upheld IDC's motion to dismiss and an order for dismissal for lack
of personal jurisdiction was issued on June 17, 2008.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
None.
-24-
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Exhibit
No. Description
------- -----------
31.1* Certification of Chief Executive Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
31.2* Certification of Chief Financial Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
32.1* Certification of Chief Executive Officer Pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002
32.2* Certification of Chief Financial Officer Pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002
99.1* 6/27/08 Amendment to the 1/22/08 Sale and Purchase Contract Relating
to Montana Holdings Ltd.
99.2* 6/30/08 Conversion Agreement relating to the 1/22/08 Sale and
Purchase Contract Relating to Montana Holdings Ltd.
*filed herewith
Reports on Form 8-K
-------------------
The Company filed the following Current Reports on Form 8-K during the quarter
ended March 31, 2007:
- A Current Report on Form 8-K dated January 5, 2007 was filed to announce:
(1) the closing of the DataWave acquisition by InComm Holdings and cash
received; (2) the purchase of a 20% equity position in Montana Holdings Ltd;
and (3) the acceptance by Montana Holding Ltd of an offer to provide loan
facilities to Montana Holdings Ltd of up to US$7 million.
- A Current Report on Form 8-K dated March 8, 2007 was filed to announce (1)
the signing of the US$7 million Loan Facility Agreement with MHL and (2) the
initial drawdown of US$1.6 million by MHL against the Loan Facility.
Subsequent to the current reporting period, the Company filed the following
Form 8-K Current Report:
- A Current Report on Form 8-K dated October 31, 2007 announcing the
formation of IDC Palm Energy, LLC with the Company owning 50.01% of the new
entity.
-25-
SIGNATURES
----------
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
INTEGRATED DATA CORP.
By: /s/Abe Carmel
-------------
Abe Carmel
Chief Executive Officer
By: /s/David C. Bryan
-----------------
David C. Bryan
President and acting
Chief Financial Officer
(Principal Financial Officer)
Date: August 26, 2008
-26-