Attached files
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| EX-32.2 - CERTIFICATION - IOTA COMMUNICATIONS, INC. | exh32-2_17085.htm |
| EX-31.2 - CERTIFICATION - IOTA COMMUNICATIONS, INC. | exh31-2_17085.htm |
| EX-32.1 - CERTIFICATION - IOTA COMMUNICATIONS, INC. | exh32-1_17085.htm |
| EX-31.1 - CERTIFICATION - IOTA COMMUNICATIONS, INC. | exh31-1_17085.htm |
UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Amendment No. 1)
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(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE QUARTERLY PERIOD ENDED: November 30, 2010
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _____________ to _____________ .
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ARKADOS GROUP, INC.
(Exact name of Registrant as specified in its charter)
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Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
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22-3586087
(I.R.S. Employer
Identification No.)
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220 Old New Brunswick Road, Piscataway, NJ 08854
(Address of principal executive offices) (Zip Code)
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(732) 465-9300
(Registrant’s telephone number)
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(Former Name, Former Address and Former Fiscal Year, if changed since last report)
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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 ý No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
(Do not check if a smaller reporting company)
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Smaller reporting company ý
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý
The number of the registrant’s shares of common stock outstanding was 45,176,671 as of December 31, 2010
Arkados Group, Inc.
Amendment No. 1 to
Quarterly Report on Form 10-Q
Quarter Ended November 30, 2010
Table of Contents
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PART I—FINANCIAL INFORMATION
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Item 4
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Controls and Procedures
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25
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Signatures
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27
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EXPLANATORY NOTES
As used in this Amendment No. 1 to Report on Form 10-Q, the terms “we”, “our” or “us” mean Arkados Group, Inc., a Delaware corporation and its consolidated subsidiaries, unless the context indicates otherwise.
This Amendment No. 1 to the Report on Form 10-Q of Arkados Group, Inc. contains registered and unregistered trademarks of Arkados Group, Inc and its subsidiaries and other companies, as indicated. Unless otherwise clear from the context or noted in this Annual Report, marks identified by “ ® ” and “™” are registered marks and trademarks of Arkados Group, Inc. or its subsidiaries. All other trademarks and service marks are the property of their respective owners. iPod® is a registered trademark of Apple Computer, Inc. HomePlug® is a registered trademark of the HomePlug Powerline Alliance, of which Arkados is a member.
We are filing this Amendment No. 1 to our Form 10-Q for the period ended November 30, 2010 (“Quarterly Report”), initially filed on January 12, 2011, in order to respond to certain comments we received from the Securities and Exchange Commission. This amendment does not reflect events occurring after the initial filing of the Quarterly Report, except as related to any amended disclosures, nor does it modify or update the disclosures and information contained in the Form 10-Q in any way other than described in this paragraph.
We are only filing the items of our Quarterly Report that have been revised in response to the Staff’s comments and all other information in our Quarterly Report remains unchanged, except for the correction of certain typographical errors. Accordingly, this Amendment should be read in conjunction with our Quarterly Report. Unless otherwise provided, all information contained in this Amendment is as of January 12, 2011 the original filing date of our Annual Report. This Amendment does not reflect events that have occurred after the filing of the Annual Report and does not modify or update the disclosure therein in any way other than as required to reflect the matters set forth herein.
Pursuant to the Rule 12b-15 of the Securities Exchange Act of 1934, currently dated certifications from our principal executive and principal financial officer, as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, are filed or furnished herewith, as applicable.
INTRODUCTORY NOTES
This Report on Form 10-Q for Arkados Group, Inc. (“Arkados” or the “Company”) may contain forward-looking statements. You can identify these statements by forward-looking words such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “estimate” and “continue” or similar words. Forward-looking statements include information concerning possible or assumed future business success or financial results. You should read statements that contain these words carefully because they discuss future expectations and plans, which contain projections of future results of operations or financial condition or state other forward-looking information. We believe that it is important to communicate future expectations to investors. However, there may be events in the future that we are not able to accurately predict or control. Accordingly, we do not undertake any obligation to update any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.
The forward-looking statements included herein are based on current expectations that involve a number of risks and uncertainties set forth under “Risk Factors” in our Annual Report on Form 10-K for the year ended May 31, 2009 and other periodic reports filed with the SEC. Accordingly, to the extent that this Report contains forward-looking statements regarding the financial condition, operating results, business prospects or any other aspect of the Company, please be advised that Arkados’ actual financial condition, operating results and business performance may differ materially from that projected or estimated in such forward-looking statements.
The Company filed a Form 8-K Report on December 29, 2010 reporting, among other things, the issuance of 10,250,000 shares of common stock to settle $401,000 of unsecured debt, the entry into a license agreement and asset purchase agreement (“APA) and the settlement of approximately $12.4 million of secured debt (including interest and penalties) for a payment of approximately $5.5 million from the licence fee received, the payment of a substantial portion of unpaid compensation due employees and the resignation and appointment a CEO and director. As, reported, the Company agreed to sell assets used in the Company’s semiconductor business to STMicroelectronics for aggregate consideration of $11 million, of which $7 million was paid on the execution of the APA pursuant to the License and the balance is due at closing. The Company will focus on development, manufacturing, and sales of consumer electronics and Smart Grid products based on power line communication semiconductors. The Company will also continue to provide consulting and development services to existing customers and users of powerline communication semiconductors. At the same time, ST hired most of the Company’s employees, each of whom were engaged in the Company’s semiconductor business. The information contained in this report, except as specifically dated, is as of November 30, 2010 and does not give effect to the changes to the Company’s business or prospects which occurred or may occur as a result of the forgoing.
PART I. FINANCIAL INFORMATION
Item 4. Controls and Procedures.
Based on an evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) required by paragraph (b) of Rule 13a-15 or Rule 15d-15, as of Novenber 30, 2010, our Chief Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms.
In connection with the preparation of our annual financial statements, our management performed an assessment of the effectiveness of internal control over financial reporting as of May 31, 2010. Management's assessment included an evaluation of the design of our internal control over financial reporting and the operational effectiveness of those controls. Based on this evaluation, management determined that, as of May 31, 2010, there were material weaknesses in our internal control over financial reporting. The material weaknesses identified during management's assessment were (i) a lack of sufficient internal accounting personnel having expertise to provide reasonable assurance that our financial statements and notes thereto, are prepared in accordance with generally accepted accounting principles (GAAP) and (ii) we failed to maintain n effective anti-fraud program designed to detect and prevent fraud relating to (i) an effective whistle-blower program or other comparable mechanism and (ii) an ongoing program to manage identified fraud risks. . In light of these material weaknesses, management concluded that, as of May 31, 2010, we did not maintain effective internal control over financial reporting. As defined by Regulation S-X, Rule 1-02(a)(4), a material weakness is a deficiency or a combination of deficiencies, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected.
We have insufficient cash or other resources to formulate or implement a plan of remediation. As of January 31, 2011 we have one executive officer and, although the board of directors and audit committee have been supportive of plans to seek a qualified Chief Financial Officer and staff, absent financing, there are no resources to do so. If and when we are able to raise sufficient resources we plan to seek and hire qualified personnel to develop a remedial plan and implement such plan.
These measures are insufficient to address any of the identified material weaknesses and material misstatements in our interim or annual financial statements may occur in the future and we to be delinquent in our filings. In addition to adequate financial resources to pay qualified individuals, a key element of our remediation effort is the ability to recruit and retain qualified individuals to support our remediation efforts. In addition to financial constraints, improvement in internal control will be hampered if we can not recruit and retain more qualified professionals. Among other things, any unremediated material weaknesses could result in material post-closing adjustments in future financial statements.
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the relationship between the benefit of desired controls and procedures and the cost of implementing new controls and procedures.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
During the quarter ended November 30, 2010, no changes were identified with respect to our internal control over financial reporting that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 6. Exhibits.
(a) Exhibits.
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31.1
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Certification of Chief Executive Officer of Periodic Report pursuant to Rule 13a-14a and Rule 15d-14(a).
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31.2
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Certification of Chief Financial Officer of Periodic Report pursuant to Rule 13a-14a and Rule 15d-14(a).
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32.1
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Certificate of Chief Executive Officer pursuant to 18 U.S.C. Section 1350
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32.2
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Certificate of Chief Financial Officer pursuant to 18 U.S.C. Section 1350
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Dated: April 4, 2011
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ARKADOS GROUP, INC.
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| By: | /s/ Andreas Typaldos | |||
| Acting Chief Executive Officer | ||||