Attached files
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EX-31.2 - HORNE INTERNATIONAL, INC. | v184519_ex31-2.htm |
EX-32.1 - HORNE INTERNATIONAL, INC. | v184519_ex32-1.htm |
EX-31.1 - HORNE INTERNATIONAL, INC. | v184519_ex31-1.htm |
EX-10.20 - HORNE INTERNATIONAL, INC. | v184519_ex10-20.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM 10-Q
(Mark One)
|
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the
quarterly period ended: March 28,
2010
OR
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the
transition period from ________________ to ________________
Commission
File Number: 000-50373
Horne
International, Inc.
(Exact
name of registrant as specified in its charter)
Delaware
|
90-0182158
|
|
(State
or other jurisdiction of
incorporation
or organization)
3975
University Drive, Suite 100,
Fairfax,
Virginia
|
(I.R.S.
Employer
Identification
No.)
22030
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant’s
telephone number, including area code: 703-641-1100
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, and (2) has been subject to such filing requirements for
the past 90 days.
Yes x No
¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange
Act.
Large
Accelerated filer ¨
Accelerated Filer ¨ Non-Accelerated
Filer ¨ Small
Reporting Company 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
As of
April 29, 2010 there were 42,687,324 shares of the
issuer’s common stock, par value $0.0001 per share, outstanding.
TABLE
OF CONTENTS
PART
I - FINANCIAL INFORMATION
|
|
Item
1. Financial Statements
|
|
Consolidated
Balance Sheets as of March 28, 2010 (Unaudited) and December 27,
2009
|
2
|
Consolidated
Statements of Operations (Unaudited) for the three months ended March 28,
2010 and March 29, 2009
|
3
|
Consolidated
Statement of Stockholders’ Deficit (Unaudited) for the three months
ended
|
|
March
28, 2010
|
4
|
Condensed
Consolidated Statements of Cash Flows (Unaudited) for the three months
ended
|
|
March
28, 2010 and March 29, 2009
|
5
|
Notes
to (Unaudited) Consolidated Financial Statements
|
6
|
Item
2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
|
13
|
Item
3. Quantitative and Qualitative Disclosures about Market
Risk
|
16
|
Item
4. Controls and Procedures
|
16
|
PART
II - OTHER INFORMATION
|
|
Item
1. Legal Proceedings
|
17
|
Item
1A Risk Factors
|
17
|
Item
6. Exhibits
|
18
|
HORNE
INTERNATIONAL, INC.
Consolidated
Balance Sheets
(Dollars
shown in 000’s except share amounts)
March
28,
|
December
27,
|
|||||||
2010 (Unaudited)
|
2009
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 110 | $ | 15 | ||||
Receivables,
net
|
788 | 1,228 | ||||||
Prepaid
expenses & other current assets
|
37 | 30 | ||||||
Current
assets of discontinued operations
|
- | 2 | ||||||
Total
current assets
|
935 | 1,275 | ||||||
Property
and equipment, net
|
69 | 77 | ||||||
Other
assets
|
59 | 57 | ||||||
Other
assets of discontinued operations
|
- | 1,745 | ||||||
TOTAL
ASSETS
|
$ | 1,063 | $ | 3,154 | ||||
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 259 | $ | 419 | ||||
Accrued
expenses
|
529 | 601 | ||||||
Deferred
revenues
|
57 | 57 | ||||||
Current
portion of debt
|
495 | 495 | ||||||
Current
liabilities of discontinued operations
|
167 | 304 | ||||||
Total
current liabilities
|
1,507 | 1,876 | ||||||
Long-term
liabilities:
|
||||||||
Non-current
liabilities of discontinued operations
|
5 | 1,696 | ||||||
TOTAL
LIABILITIES
|
1,512 | 3,572 | ||||||
Commitments
and contingencies (Note 10)
|
||||||||
Stockholders'
deficit:
|
||||||||
Preferred
stock, $0.0001 par value; 20,000,000 shares
|
||||||||
authorized,
none issued
|
- | - | ||||||
Common
stock, $0.0001 par value; 80,000,000 shares authorized,
|
||||||||
42,687,324
issued and outstanding
|
4 | 4 | ||||||
Additional
paid-in capital
|
79,546 | 79,029 | ||||||
Accumulated
deficit
|
(79,999 | ) | (79,451 | ) | ||||
Total
stockholders' deficit
|
(449 | ) | (418 | ) | ||||
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
$ | 1,063 | $ | 3,154 |
See accompanying notes to (unaudited)
consolidated financial statements.
2
HORNE
INTERNATIONAL, INC.
Consolidated
Statements of Operations (Unaudited)
(Dollars
shown in 000’s except share and per share amounts)
Three
months ended
|
||||||||
March
28,
|
March
29,
|
|||||||
2010
|
2009
|
|||||||
Revenues
|
$ | 994 | $ | 950 | ||||
Cost
of Revenue
|
696 | 622 | ||||||
Gross
Profit
|
296 | 328 | ||||||
Operating
Expense
|
862 | 462 | ||||||
Net
Operating Loss
|
(564 | ) | (134 | ) | ||||
Non-operating
expense, net
|
(30 | ) | (48 | ) | ||||
Loss
before income taxes
|
(594 | ) | (182 | ) | ||||
Income
tax expense
|
(2 | ) | (2 | ) | ||||
Loss
from continuing operations
|
(596 | ) | (184 | ) | ||||
Income(loss)
from discontinued operations
|
48 | (64 | ) | |||||
Net
and total comprehensive loss
|
$ | (548 | ) | $ | (248 | ) | ||
Weighted
average common shares outstanding:
|
||||||||
Basic
and diluted
|
42,687,324 | 42,687,324 | ||||||
Basic
and diluted loss per share
|
||||||||
Loss
from continuing operations
|
$ | (0.02 | ) | $ | (0.01 | ) | ||
Income
(loss) from discontinued operations
|
0.00 | (0.00 | ) | |||||
Total
basic and diluted loss per share
|
$ | (0.02 | ) | $ | (0.01 | ) |
See
accompanying notes to (unaudited) consolidated financial
statements.
3
HORNE
INTERNATIONAL, INC.
Consolidated
Statement of Stockholders’ Deficit (Unaudited)
(Dollars
shown in 000’s except share amounts)
Common Stock
|
Additional
|
Accumulated
|
||||||||||||||||||
Shares
|
Amount
|
paid-in capital
|
Deficit
|
Total
|
||||||||||||||||
Balance
as of December 27, 2009
|
42,687,324 | $ | 4 | $ | 79,029 | $ | (79,451 | ) | $ | (418 | ) | |||||||||
Stock-based
compensation
|
517 | 517 | ||||||||||||||||||
Net
loss
|
(548 | ) | (548 | ) | ||||||||||||||||
Balance
as of March 28, 2010
|
42,687,324 | $ | 4 | $ | 79,546 | $ | (79,999 | ) | $ | (449 | ) |
See
accompanying notes to the (unaudited) consolidated financial
statements.
4
HORNE
INTERNATIONAL, INC.
Condensed
Consolidated Statements of Cash Flows (Unaudited)
(Dollars
shown in 000’s except share amounts)
March
28,
|
March
29,
|
|||||||
2010
|
2009
|
|||||||
Cash
flows from operating activities:
|
||||||||
Continuing
Operations
|
||||||||
Net
loss from continuing operations
|
$ | (596 | ) | $ | (248 | ) | ||
Adjustments
to reconcile net loss to net cash flows
|
||||||||
Cash
used in operating activities
|
||||||||
Stock-based
compensation
|
517 | 7 | ||||||
Depreciation
and Amortization
|
8 | 16 | ||||||
Writedown
of Weskem investments to fair value
|
- | (10 | ) | |||||
Decrease
(increase) in balance sheet items
|
||||||||
Receivables,
net
|
440 | 495 | ||||||
Prepaid
expenses
|
(7 | ) | (45 | ) | ||||
Accounts
payable
|
(160 | ) | (120 | ) | ||||
Accrued
expenses
|
(72 | ) | 26 | |||||
Deferred
revenue
|
- | (41 | ) | |||||
Other
assets
|
(2 | ) | (2 | ) | ||||
Net
cash provided by continuing operations
|
128 | 78 | ||||||
Discontinued
Operations
|
||||||||
Net
income from discontinued operations
|
48 | 64 | ||||||
Cash
(used in) provided by discontinued operations
|
(81 | ) | 205 | |||||
Net
Cash (used in) provided by discontinued operations
|
(33 | ) | 269 | |||||
Net
cash provided by operations
|
95 | 347 | ||||||
Cash
flows from investing activities:
|
||||||||
Proceeds
from joint ventures under the equity method
|
- | 43 | ||||||
Net
cash provided by investing activities
|
- | 43 | ||||||
Cash
flows from financing activities:
|
||||||||
Net
cash repayments
|
- | (396 | ) | |||||
Net
cash used in financing activities
|
(32 | ) | (396 | ) | ||||
Net
increase(decrease) in cash and cash equivalents
|
63 | (6 | ) | |||||
Cash
and cash equivalents at beginning of period
|
15 | 22 | ||||||
Cash
and cash equivalents at end of period
|
$ | 78 | $ | 16 | ||||
Supplemental
disclosure of cash flow information:
|
||||||||
Cash
paid for interest
|
$ | 19 | $ | 95 | ||||
Cash
paid for income taxes
|
$ | 2 | $ | 2 | ||||
Transfer
of property and satisfaction of notes payable
|
$ | 1,743 | $ | - |
See
accompanying notes to the (unaudited) consolidated financial
statements.
5
HORNE
INTERNATIONAL, INC.
Notes to
(Unaudited) Consolidated Financial Statements
1.
|
ORGANIZATION
AND NATURE OF BUSINESS AND
UNCERTAINTY
|
Horne
International, Inc. (the “Company” or “Horne”), headquartered in Fairfax,
Virginia, provides program engineering in the areas of environment, energy and
infrastructure.
The
Company decided to cease operations in the Spectrum Sciences & Software,
Inc., and Coast Engine and Equipment Co. subsidiaries during the first quarter
of 2008. These companies represented the entire operations of the
Security Solutions and Repair and Overhaul segments, respectively.
The
Company’s independent accountants stated in their report on the consolidated
financial statements of the Company for the year ended December 27, 2009, that
the Company has had recurring operating losses that raise substantial doubt
about its ability to continue as a going concern. For the three months ended
March 28, 2010, the Company incurred a loss from continuing operations of
approximately $550,000 and had a stockholder deficit of approximately $450,000
as of that date. The consolidated financial statements do not include any
adjustments related to the recovery and classification of recorded assets, or
the amounts and classification of liabilities that might be necessary in the
event the Company cannot continue as a going concern.
The
Company is dependent upon available cash and operating cash flow to meet its
capital needs. The Company is considering all strategic options to improve its
liquidity and provide it with working capital to fund its continuing business
operations which include equity offerings, assets sales or debt financing as
alternatives to improve its cash requirements.
In
December 2009, the Company entered into a two-year receivable noncancellable
financing agreement with Wells Fargo Bank National Association under which the
Company is able to factor certain eligible accounts receivable to a facility
maximum of $1,000,000. The agreement calls for a minimum monthly fee
of $3,000 for the term of the agreement. The Company is able to
receive 85 percent of any invoices factored to the lender.
On March
22, 2010, the Company entered into a strategic partnership with Intelligent
Decisions, Inc. (“Intelligent”). Intelligent is an information technology
services company headquartered in Ashburn, Virginia, servicing both commercial
and government customers. The agreement between the parties will allow the
Company to have a cash line of credit in the amount of $250,000 for
business/projects jointly developed by Intelligent and the Company. This line of
credit will be secured by the Company’s eligible Accounts Receivable on such
projects or the Company’s full-time equivalent employees arising after the
inception of this Agreement that are billed against projects as decided by
Intelligent in its sole discretion. No cash will be advanced by Intelligent
until Intelligent receives a perfected security interest (i.e., first lien on
the orders to be advanced under this cash line of credit).
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
Organization
and Nature of Business
The
accompanying unaudited consolidated financial statements for the three-month
periods ended March 28, 2010, and March 29, 2009, have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and pursuant to the rules and
regulations of the Securities and Exchange Commission for Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the
information and disclosures required by generally accepted accounting principles
for complete financial statements. In the opinion of management, the
accompanying unaudited consolidated financial statements contain all
adjustments, consisting only of normal recurring accruals, considered necessary
for a fair presentation of the Company's financial position, results of
operations, and cash flows as of and for the periods presented.
The
results of operations for the period ended March 28, 2010, are not necessarily
indicative of the results that may be expected for the year. These
interim consolidated financial statements should be read in conjunction with the
consolidated financial statements and related footnotes included in the
Company’s Annual Report on Form 10-K for the year ended December 27,
2009.
Revenue
Recognition
The
Company’s two principal methods of revenue recognition are monthly fixed price
contracts where revenue is recognized ratably over the contract period and time
and materials contracts where revenue is recognized as costs are
incurred.
6
HORNE
INTERNATIONAL, INC.
Notes to
(Unaudited) Consolidated Financial Statements
Income
Taxes
The
Company accounts for income taxes utilizing the asset and liability
method. This approach requires the recognition of deferred tax assets
and liabilities for the expected future tax consequences attributable to
temporary differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax basis and operating
loss and tax credit carry forwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enacted date. Valuation allowances are established when
it is necessary to reduce deferred tax assets to the amount expected to be
realized.
The
Company currently has a net operating loss carry forward of approximately $55
million at March 28, 2010. The Company has not recorded this federal
tax benefit in the accompanying consolidated financial statements, due to the
possibility that the net operating loss carry forward may not be utilized, for
various reasons, including the potential that the Company might not have
sufficient profits to use the carry forward or the carry forward may be limited
as a result of changes in the Company’s equity ownership. The Company
adopted Accounting Standards Codification topic 740, subtopic 10 on January 1,
2007, which requires financial statement benefits to be recognized for positions
taken for tax return purposes when it is more-likely-than-not that the position
will be sustained. There has been no change in our financial position
and results of operation due to the adoption of this standard.
Loss
Per Share
Basic
loss per share is calculated by dividing net loss by the weighted-average number
of common shares outstanding during the reporting period. Diluted
loss per share is computed in a manner consistent with that of basic loss per
share while giving effect to the impact of common stock
equivalents. The Company’s common stock equivalents consist of
employee, director, and consultant stock options to purchase common
stock. Common stock equivalents of 10,544,333 and 365,000 were not
included in the computation of diluted loss per share for the three months ended
March 28, 2010, and March 29, 2009, respectively, as the inclusion of these
common stock equivalents would be anti-dilutive as the Company is in a net loss
position and including such shares would reduce the net loss per
share.
Stock-Based
Compensation
The fair
values of stock option awards are determined using the Black-Sholes
model. The compensation expense is recognized on a straight-line
basis over the vesting period. The Company, beginning in 2006, has
included a vesting period for most options granted. See Note 8 for a
detailed discussion of the Company’s stock-based compensation
plans.
Cash
Equivalents
The
Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents.
Fair
Value of Financial Instruments
The
carrying amount of cash and cash equivalents, receivables, accounts payable and
accrued expenses approximates fair value because of the short-term nature of
those instruments. The carrying amount and fair market value of the
Company’s short-term investments are the same since short-term investments are
recorded at fair value. Debt is recorded at the cash settlement value
of the underlying notes and is not revalued.
Use
of Estimates
The
preparation of financial statements, in conformity with accounting principles
generally accepted in the United States of America, requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the consolidated financial statements and the reported amounts of revenues and
expenses during the reporting period. Accordingly, results could
differ from those estimates and assumptions.
7
Recent
Accounting Pronouncements
In May
2009, the FASB issued accounting guidance on subsequent events which requires
companies to address the accounting and disclosure of events that occur after
the balance sheet date but before the financial statements are issued or
available to be issued. The adoption of the accounting guidance that
was effective January 1, 2009, did not have a material impact on the Company’s
consolidated financial condition or results of operations.
In June
2009, the FASB issued an amendment which requires entities to provide more
information about the sale of securitized financial assets and similar
transactions in which the entity retains some risk related to the assets. This
amendment is effective for fiscal years beginning after November 15, 2009. The
Company does not believe the adoption of the amendment will have a material
impact on its consolidated financial position, results of operations, or cash
flows.
In June
2009, the FASB issued The Accounting Standards Codification and the Hierarchy of
Generally Accepted Accounting Principles (the “Codification”) as the single
source of authoritative nongovernmental United States generally accepted
accounting principles. The Codification did not change generally
accepted accounting principles but rather enhanced the way accounting principles
are organized. The Codification was effective for the Company January
1, 2009, and its adoption did not have a material impact on the Company’s
consolidated financial condition or results of operations.
In
June 2009, the FASB issued an amendment, which changes how a company determines
when an entity that is insufficiently capitalized or is not controlled through
voting (or similar rights) should be consolidated. Under this guidance,
determining whether a company is required to consolidate an entity will be based
on, among other things, an entity’s purpose and design and a company’s ability
to direct the activities of the entity that most significantly impact the
entity’s economic performance. This amendment is effective for fiscal years
beginning after November 15, 2009. The Company does not believe the adoption
will have a material impact on its consolidated financial position, results of
operations, or cash flows.
In
October 2009, the FASB revised the accounting guidance for revenue arrangements
with multiple deliverables. The revision: (1) removes the
objective-and-reliable-evidence-of-fair-value criterion from the separation
criteria used to determine whether an arrangement involving multiple
deliverables contains more than one unit of accounting, (2) provides a hierarchy
that entities must use to estimate the selling price, (3) eliminates the use of
the residual method for allocation, and (4) expands the ongoing disclosure
requirements. This guidance is effective for the Company beginning January 1,
2011, and can be applied prospectively or retrospectively. The Company is
currently assessing the impact of the revised accounting guidance.
3.
|
RECEIVABLES
(000’s)
|
Receivables
primarily comprise of amounts due to the Company for work performed on contracts
directly related to commercial and government customers. The U.S.
Department of Defense (including the Army Environmental Command and the Army
Corps of Engineers), Department of Homeland Security, General Services
Administration (GSA Schedules), and other government agencies are our major
customers.
March
28,
|
December
27,
|
|||||||
Accounts
Receivable
|
2010
|
2009
|
||||||
Billed
AR
|
$ | 667 | $ | 1,119 | ||||
Unbilled
AR
|
71 | 62 | ||||||
Holdbacks
|
48 | 48 | ||||||
Bad
Debt Reserve
|
(1 | ) | (1 | ) | ||||
Total
AR
|
$ | 788 | $ | 1,228 |
Unbilled
receivables represent recoverable costs and estimated earnings consisting
principally of contract revenues that have been recognized for accounting
purposes but are not yet billable to the customer based upon the respective
contract terms.
8
4.
|
PROPERTY
AND EQUIPMENT (000’s)
|
March
28,
|
December
27,
|
|||||||
Property
& Equipment
|
2010
|
2009
|
||||||
Buildings
& Improvements
|
$ | 5 | $ | 5 | ||||
Furniture
& Fixtures
|
11 | 11 | ||||||
Office
Equipment
|
290 | 290 | ||||||
Vehicles
|
38 | 38 | ||||||
Total
|
$ | 344 | $ | 344 | ||||
Accumulated
Depreciation
|
(275 | ) | (267 | ) | ||||
Property
& Equipment, net
|
$ | 69 | $ | 77 |
5.
|
RELATED
PARTY BORROWINGS
|
The
Company’s borrowings, not included in discontinued operations, consist of
related party receivable financing and unsecured notes of approximately
$495,000. The rates on the related party notes are 8 percent and 8.5 percent and
approximately half of these notes are secured against company receivables and a
company settlement award.
Darryl
Horne Notes
On August
6, 2009, Horne International, Inc., entered into an Agreement to Transfer
Property with Darryl K. Horne and The Susott Family Limited Partnership and 91
Hill Avenue, LLC. The Agreement states that Horne International,
Inc., transferred the real property located at 91 Hill Avenue, Fort Walton
Beach, Florida, to 91 Hill Avenue, LLC. In addition, the Company also
issued to 91 Hill Avenue, LLC, two million stock options with a price of the
greater of $0.10 or $0.25 less than the reported stock one day prior to the
exercise of the options. As consideration for the transfer of the
real property and the aforementioned stock options, Darryl K. Horne and the
Susott Family Limited Partnership each forgave certain secured and unsecured
debt owed to each of them by the Company. Darryl K. Horne forgave
both secured and unsecured debt owed to him by the Company in the amount of
$750,000. The Susott Family Limited Partnership forgave secured debt
owed to it by the Company in the amount of $1,000,000.
On August
7, 2009, the real property owned by Horne International, Inc., located at 91
Hill Avenue, Fort Walton Beach, Florida, was transferred to 91 Hill Avenue, LLC,
pursuant to the terms of the Agreement to Transfer Property dated August 6,
2009.
During
2008, the Company entered into three separate loan transactions with Darryl K.
Horne, the Company’s President and Chief Executive Officer. The first
loan permitted the Company to borrow up to $525,000 at 8 percent. The
interest is payable quarterly beginning in July 1, 2008, with principal payable
upon demand. The note is unsecured and is not convertible into any
Company securities. A portion of this loan was settled in connection
with the 91 Hill Avenue transaction described above. As of March 28,
2010, the outstanding balance is $275,000.
In July
2008, the Company entered into a second loan transaction with Mr. Horne, for a
working capital loan to the Company. The terms of the loan provide
that the Company was able to borrow $500,000 at 8 percent interest, with such
interest payable quarterly beginning in October 2008. Principal under
the loan was payable in full at the earlier of (a) twelve (12) months from the
loan closing date and (b) the sale of the Company's Ft Walton Beach, Florida,
commercial property formerly utilized for SSSI's operations (the "SSSI
Property"). The maturity date of the loan could be extended for an
additional six (6) months under certain conditions, including the payment by the
Company of a fee equal to one-half percent of the outstanding principal
balance. Mr. Horne's loan was secured by a second deed of trust on
the SSSI Property, which was junior in priority and subordinate to a first deed
of trust securing the Company's obligations under the Revolving Line of Credit
to Evan Auld-Susott, as agent. The loan was not convertible into any
Company securities. The terms of the loan were approved by the
Company's Board of Directors, including each disinterested
director. This loan was discharged in full in connection with the 91
Hill Avenue transaction described above. There were no amounts
outstanding under this loan at March 28, 2010.
On August
6, 2008, the Company entered into a receivables financing agreement with
Mr. Horne. Under the terms of the agreement, Mr. Horne
agreed to finance specific accounts receivable under a line of credit for up to
$790,000 at an interest rate of 8.5 percent. The Company has taken
draws of $220,000 as of March 28, 2010. The loan is not convertible into any
Company securities.
9
Evan
Auld-Susott Mortgage Note
On April
10, 2008, the Company entered into a binding term sheet with Evan Auld-Susott as
agent for The Susott FLP for the provision to the Company of a revolving line of
credit. Evan Auld-Susott is a member of the Company's Board of
Directors. Under the line of credit, the Company was able to borrow
$1,000,000 at 12.5 percent interest upon the Company's certification to the
lenders that the Company had fully exhausted all funds available to the Company
pursuant to the $500,000 working capital loan from Darryl K. Horne, described
above. Interest on the line of credit was payable quarterly beginning
in October 2008 with principal payable in full at the earlier of (a) twelve (12)
months from the line of credit closing date or (b) the sale of the SSSI
Property. The maturity date of the line of credit could be extended for an
additional six (6) months under certain conditions, including the payment by the
Company of a fee equal to the greater of (i) $2,500 and (ii) one-half percent of
the outstanding principal balance. The lender had a first deed of
trust on the SSSI Property, which was senior in priority and superior to the
second deed of trust in favor of Darryl K. Horne with respect to the working
capital loan described above. The loan was not convertible into any
Company securities. The terms of the line of credit were approved by
the Company's Board of Directors, including each disinterested
director.
In July
2009, the Company deeded the SSSI property against 91 Hill Avenue, LLC, a
limited liability company established by Darryl K. Horne and Evan Auld-Susott to
take title to the property. In return for the property, Evan
Auld-Susott released in full the $1,000,000 debt due under the April 10, 2008,
revolving line of credit.
On
November 12, 2008, the Company entered into a short-term borrowing agreement
with Evan Auld-Susott as agent for The Susott FLP. Under this
agreement, the Company borrowed $70,000 at 8.5 percent interest. This
note is secured by certain receivables of the Company and is not convertible
into any Company securities. This loan was repaid in January
2009.
John
Krobath Notes
On
October 1, 2008, the Company entered into a short-term borrowing arrangement
with John Krobath, the Company’s Chief Financial Officer at such time, under
which the Company borrowed $43,000 at 8.5 percent interest. This loan
is not convertible into any Company securities but is secured by some of the
Company’s real property in Ft. Walton Beach, Florida. The loan and
related interest were repaid in June 2009.
6.
|
LINES
OF CREDIT
|
In
December 2009, the Company entered into a two-year receivable noncancellable
financing agreement with Wells Fargo Bank National Association under which the
Company is able to factor certain eligible accounts receivable. The
agreement calls for a minimum monthly fee of $3,000 for the term of the
agreement. The Company is able to receive 85 percent of any invoices
factored to the lender. For the three months ended March 28, 2010, the Company
received $545,707 on the line of credit and paid off the full amount plus
$32,965 in fees and interest. As of March 28, 2010, the line of
credit balance is zero.
7.
|
STOCK
TRANSACTIONS
|
On March
23, 2010, the Company entered into a strategic partnership with Intelligent
Decisions, Inc. (“Intelligent”). The Company awarded to Intelligent options to
purchase 8,333,333 shares of Company common stock as well as up to 12,500,000
restricted stock units. One half of these options (4,166,667 options) were
exercisable immediately upon grant and the remaining 4,166,666 options shall be
exercisable when the share price of Horne’s stock reaches $0.50 or the Company
achieves annual revenue in the amount of $15,000,000, whichever is earlier. The
options have an exercise price of $0.09 per share, the fair market value of the
Company common stock on the date of grant. The restricted stock units will be
issued in exchange for business support services.
As of
March 28, 2010, the Company recorded stock option expense of $515,885 for the
first half of the options. The remaining options will be expensed if
and when it becomes probable that the Company is on track to meeting either
performance condition. As of March 28, 2010, The Company has
determined as of March 28, 2010 that it is not probable that Horne’s stock will
reach $0.50 or meet its annual revenue target of $15,000,000. The Company will
reassess the probability of whether the terms of the agreement are attainable on
a quarterly basis. The Company will start to recognize expense when achievement
of a performance condition becomes probable.
10
During
2009, the Company had two equity transactions. The first was the
share price settlement with the former owners of CEECO. Under the terms of the
CEECO acquisition agreement from 2005, the 913,242 shares of stock that were
issued to Louis and Marilyn Rogers in March 2008 were subject to a share price
guarantee. Those shares were issued at $0.219 per share. The average
share price, calculated as the ten-day average closing share price centered on
February 28, 2009, was $0.0755. As a result the Company recorded a
payable to the Rogers of $131,050 and reduced additional paid in capital by that
same amount. A payable of $23,550 is outstanding at March 28,
2010.
8.
|
STOCK-BASED
COMPENSATION
|
The
Company has a stock option plan available to compensate employees and directors
as deemed appropriate by senior management. During the first quarter
of 2010, the Company granted no new stock options to employees.
The fair
values of stock option awards are determined using the Black-Sholes
model. The compensation expense is recognized on a straight-line
basis over the vesting period. The Company, beginning in 2006, has
included a vesting period for most options granted.
The table
below summarizes our stock option activity during the three months ended March
28, 2010.
Number of shares
|
Option Price
|
Weighted Average Price
|
|||||||
Options
Outstanding 12/27/2009
|
2,211,000 | ||||||||
Granted
|
8,333,333 | 0.09 | |||||||
Exercised
|
- | ||||||||
Cancelled
|
|||||||||
Options
Outstanding 3/28/2010
|
10,544,333 |
The
following table summarizes information about the Company’s outstanding stock
options at March 28, 2010.
Options
Exercisable & Outstanding
|
||||||||||||
Exercise
|
Shares
|
Shares
|
Weighted
Average
|
|||||||||
Price
|
Outstanding
|
Exercisable
|
Remaining Life (yrs)
|
|||||||||
0.09
|
8,333,333 | 4,166,667 | 7.0 | |||||||||
0.10
|
2,000,000 | 2,000,000 | 2.8 | |||||||||
0.20
|
70,000 | 70,000 | 0.5 | |||||||||
0.35
|
60,000 | 60,000 | 2.3 | |||||||||
0.40
|
6,000 | 6,000 | 0.5 | |||||||||
0.50
|
75,000 | 75,000 | 5.5 | |||||||||
Total
options available to issue
|
32,000,000 | |||||||||||
Total
options outstanding or exercised
|
30,665,533 | |||||||||||
Total
options Remaining
|
1,334,467 |
9.
|
DISCONTINUED
OPERATIONS
|
The
Company made the strategic decision to close the operations of its Spectrum
Sciences and Software, Inc. subsidiary and Coast Engine & Equipment
subsidiary in early 2008. Accordingly, the operating results of these
two entities are included in discontinued operations for all years
presented.
During
2009, the Company deeded one of the two real property sites to creditors who are
affiliated parties in return for the release of $1.75 million of debt owed to
the creditors by the Company. In February 2010, the Company, by
Quitclaim Deed returned the second of the two real property sites to the
mortgagors in return for a release of all obligations and claims under the
Contract for Deed. As of March 28, 2010, the Company has no assets in
discontinued operations.
The
liabilities of discontinued operations at March 28, 2010, primarily consist of a
capital lease obligation and other accrued liabilities. The interest
rate on the capital lease is 7.1 percent.
11
10.
COMMITMENTS AND CONTINGENCIES
Legal
Matters
Our
outstanding legal proceedings are described in Note 16 to our consolidated
financial statements in our Annual Report on Form 10-K for the year ended
December 27, 2009. There have been no material developments regarding
any of our outstanding legal proceedings during the first quarter of 2010 and
through the filing date of this report except as noted below.
On or
about August 23, 2004, Spectrum Sciences & Software, Inc. (SSSI) filed suit
against the United States alleging a breach of express contract, a breach of an
implied in fact contract, and misappropriation of trade
secrets. The complaint arose out of the government’s actions
associated with the procurement of the improved Munitions Assembly Conveyor
(MAC). Based upon SSSI’s previous experience in both utilizing and
producing the MAC, the Government and SSSI entered into a Cooperative Research
and Development Agreement (CRADA) for the purpose of improving munitions support
equipment, including the MAC. As part of the CRADA negotiation, SSSI
identified its prior development, unique modifications, and improvements that
constituted trade secrets and intellectual property owned by
SSSI. Subsequent to the completion of the CRADA, SSSI alleges that
the government deliberately breached its obligations to protect the trade
secrets, intellectual property, and proprietary information identified by SSSI
in the CRADA by disclosing and widely disseminating to the general public SSSI’s
proprietary information.
A trial
on the merits of the case was held in the United States Court of General Claims
on November 13, 2007. The Court did find in favor of Spectrum
Sciences & Software on the merits of several of the counts of the Complaint.
Evidence of damages was heard by the Court on January 14, 2010. The
Court’s decision as to damages is pending.
11. SUBSEQUENT
EVENTS
The Board
of Directors voted unanimously to amend the existing Amended and Restated 2004
Stock Option Plan to increase the number of option shares available for issue
under the plan by two million option shares to thirty two million option shares
available for issue. The 2004 Stock Option Plan was initially adopted
by the Company in March 2004. The initial 2004 Stock Option Plan
provided for ten million option shares to be available for issue. In
April 2004, the 2004 Stock Option Plan was amended and restated to increase the
number of option shares available for issue under the 2004 Stock Option Plan to
thirty million.
12
ITEM 2. MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The
following discussion provides information which management believes is relevant
to an assessment and an understanding of the Company’s operations and financial
condition. This discussion should be read in conjunction with the
attached unaudited consolidated financial statements and accompanying notes as
well as our annual report on Form 10-K for the fiscal year ended December 27,
2009.
FORWARD-LOOKING
STATEMENTS
The
matters discussed in our Annual Report on Form 10-K may constitute
forward-looking statements within the meaning of The Private Securities
Litigation Reform Act of 1995. These statements involve known and
unknown risks, uncertainties, and other factors that may cause our actual
results, activity levels, performance or achievements to be materially different
from any future results, activity levels, performance or achievements expressed
or implied by such forward-looking statements. In some cases, you can
identify these statements by forward-looking words such as “could”, “expect”,
“estimate”, “may”, “potential”, “will”, and “would”, or similar
words. You should read statements that contain these words carefully
because they discuss our future expectations, contain projections of our future
results of operations or of our financial position, or state other
forward-looking information. We believe it is important to
communicate our future expectations to our investors. However, there
may be events in the future that we are not able to predict or control
accurately. The factors listed in the section captioned “Risk
Factors,” contained in our Annual Report of Form 10-K for the fiscal year ended
December 27, 2009, as well as any cautionary language in the Form 10-Q, provide
examples of risks, uncertainties, and events that may cause our actual results
to differ materially from the expectations we describe in our forward-looking
statements.
Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, activity levels, performance or
achievements. You should not place undue reliance on these
forward-looking statements, which apply only as of the date of this Form
10-Q. Subsequent events and developments may cause our views to
change. While we may elect to update the forward-looking statements
at some point in the future, we specifically disclaim any obligation to do
so.
DESCRIPTION
OF THE COMPANY
The
Company provides a variety of services through its wholly-owned subsidiary,
Horne Engineering Services. The Company focuses on providing program
engineering, occupational safety and health, environmental sciences, acquisition
and procurement, business process engineering, and public
outreach. Our primary customer in this segment is the U.S.
Government, with specific focus within the Departments of Homeland Security,
Defense, and Transportation.
CRITICAL
ACCOUNTING POLICIES
Management’s
Discussion and Analysis of Financial Condition and Results of Operations are
based upon our consolidated financial statements that have been prepared in
accordance with accounting principles generally accepted in the United States of
America. The preparation of these financial statements requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and determine whether contingent assets and
liabilities, if any, are disclosed in the financial statements. On an
ongoing basis, we evaluate our estimates and assumptions, including those
related to long-term contracts, product returns, bad debts, inventories, fixed
asset lives, income taxes, environmental matters, litigation, and other
contingencies. We base our estimates and assumptions on historical
experience and on various factors that are believed to be reasonable under the
circumstances, including current and expected economic conditions, the results
of which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other
sources. Actual results may differ materially from our estimates
under different assumptions or conditions.
We
believe that the following critical accounting policies, among others, require
us to make significant estimates and judgments in the preparation of our
financial statements:
Revenue
Recognition
The
Company’s two principal methods of revenue recognition are monthly fixed price
contracts where revenue is recognized ratably over the contract period and time
and materials contracts where revenue is recognized as costs are
incurred.
13
Allowance
for Bad Debts
We
evaluate our accounts receivable through a continuous process of assessing our
portfolio on an individual and overall basis. The majority of our
contracts are with United States Government entities and as such we have minimal
risk of collectability. The few contracts we have with
non-governmental entities we review on a contract-by-contract
basis. During 2007, we recorded a $200,000 bad debt reserve in our
discontinued operations on a contract that we executed as a
subcontractor. We have filed suit related to this contract and the
receivable of $115,346 is fully reserved at March 28, 2010.
Net
Operating Loss Carry-forwards
We have
not recognized the benefit in our financial statements with respect to the
approximately $55 million net operating loss carry-forwards for federal income
tax purposes as of March 28, 2010. This benefit was not recognized due to the
possibility that the net operating loss carry-forwards would not be utilized,
for various reasons; including the potential that we might not have sufficient
profits to use the carry-forwards or that the carry-forwards may be limited as a
result of changes in our equity ownership. We intend to use these carry-forwards
to offset our future taxable income. If we were to use any of these net
operating loss carry-forwards to reduce our future taxable income and the
Internal Revenue Service were to then successfully assert that our
carry-forwards are subject to limitation as a result of capital transactions, we
may be liable for back taxes, interest, and, possibly, penalties.
Off
Balance Sheet Risk
We have
no off-balance sheet arrangements that have or are reasonably likely to have a
current or future material effect on our financial condition, results of
operations, liquidity, capital expenditures, or capital resources.
COMPARISON
OF THREE MONTHS ENDED MARCH 28, 2010, AND MARCH 29, 2009
The
following discussion and analysis should be read in conjunction with the
unaudited financial statements (and notes thereto) and other financial
information of the Company appearing elsewhere in this report.
Consolidated
Overview (000’s)
Three
months ended March,
|
||||||||||||||||
2010
|
2009
|
|||||||||||||||
Total
revenue
|
$ | 994 | 100.0 | % | $ | 950 | 100.0 | % | ||||||||
Gross
Profit
|
296 | 29.8 | % | 328 | 34.5 | % | ||||||||||
Operating
loss
|
(564 | ) | -56.7 | % | (134 | ) | -14.1 | % |
Revenue
was relatively flat and margins decreased due to contract cost
mix. The operating loss increased on a year-over-year basis by $431,
as compared to the quarter ended March 29, 2009, due to Intelligent Decisions
stock option expense.
Services
Segment (000s)
Three
months ended March,
|
||||||||||||||||
2010
|
2009
|
|||||||||||||||
Services
|
||||||||||||||||
Total
revenue
|
$ | 994 | 100.0 | % | $ | 950 | 100.0 | % | ||||||||
Gross
profit
|
296 | 29.9 | % | 328 | 34.5 | % | ||||||||||
Operating
gain
|
264 | 26.6 | % | 284 | 29.9 | % |
Revenue
was relatively flat and margins decreased due to contract cost
mix.
14
Corporate
Expenses (000’s)
Fiscal
Quarter Ended March
|
||||||||
2010
|
2009
|
|||||||
Operating
Loss
|
$ | (830 | ) | $ | (418 | ) |
Corporate
expenses increased on a year-over year basis by $412 or 99 percent for the
quarter ended March 28, 2010, as compared to the quarter ended March 29, 2009,
due to Intelligent Decisions stock option expense.
Discontinued
Operations
During
the first quarter of 2008, the Company made the decision to close two of its
operating subsidiaries, Spectrum Sciences and Software, Inc., and Coast Engine
& Equipment Co. Spectrum operations ceased in May 2008 and CEECO
ceased operations in February 2008. The 2009 discontinued operations
activity relates to income and expenses from the remaining real property assets
located in Ft. Walton Beach, Florida, and costs incurred with respect to our
ongoing litigation issues described in our 2009 Annual Report on Form
10-K.
Liquidity
and Capital Resources
Cash and
cash equivalents totaled approximately $110,000 at March 28,
2010. During the first quarter of 2010, continuing operations
provided approximately $128,000 of cash predominantly due to the payment of a
large receivable from a large contract. Discontinued operations used
$33,000 of cash before debt service. In addition, the Company’s comprehensive
loss of $548,000 is primarily due to the stock option expense of
$517,000.
In
December 2009, the Company entered into a two-year receivable noncancellable
financing agreement with Wells Fargo Bank National Association under which the
Company is able to factor certain eligible accounts receivable. The
agreement calls for a minimum monthly fee of $3,000 for the term of the
agreement. The Company is able to receive 85 percent of any invoices
factored to the lender. As of March 28, 2010, the Company
received $545,707 in line of credit and paid off the full amount plus $32,965 in
fees and interest.
Our
independent registered public accounting firm, issued a “going concern” opinion
in connection with its audit of our financial statements for the year ended
December 27, 2009. This opinion expressed substantial doubt as to our ability to
continue as a going concern. Our ability to continue as a going concern is
dependent upon our ability to obtain additional equity or debt financing, attain
further operating efficiencies, reduce expenditures, dispose of selective
assets, and ultimately generate additional revenue. The accompanying
consolidated financial statements do not include any adjustments that might
result from the outcome of these uncertainties. Accordingly, the
value of the Company in liquidation may be different from the amounts set forth
in our financial statements. The going concern opinion may also limit
our ability to access certain types of financing, prevent us from obtaining
financing on acceptable terms, and limit our ability to obtain new business due
to potential customers’ concern about our ability to deliver products or
services.
The
Company anticipates that funds from operations will not be sufficient to provide
for our 2010 operations and purchases of plant and equipment. While
we continue to seek financing alternatives to fund our 2010 operations, there is
no assurance that we will be able to obtain financing on terms acceptable to the
Company, or at all, and terms of any financing we do undertake may not be
favorable to our shareholders.
The
Company’s working capital position at March 28, 2010, was a deficit of $0.6
million, compared with a deficit of $600,000 at December 29, 2009. The negative
working capital has resulted from our continuing operating
losses. The improvement from year ended 2009 is due to the retirement
of the debt related to the 91 Hill Avenue property as a result of the title
transfer in July 2009.
15
ITEM 3. QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
In
addition to the risks inherent in our operations, we are exposed to financial,
market, political and economic risks. The following discussion
provides additional detail regarding our exposure to interest rates and foreign
exchange rates.
Interest
Rate Risk
At March
28, 2010, the Company had no amounts outstanding under a revolving credit
facility. We have not historically mitigated our exposure to
fluctuations in interest rates by entering into interest rate hedge agreements,
nor do we have any plans to do so in the immediate future.
Foreign
Exchange Risk
We
currently do not have any foreign currency risk and accordingly, estimate that
an immediate 10% change in foreign exchange rates would have no impact on our
reported net loss. We do not currently utilize any derivative
financial instruments to hedge foreign currency risks.
ITEM 4. CONTROLS
AND PROCEDURES
Based on
management’s evaluation (with the participation of our Chief Executive Officer
(CEO) and Interim Chief Financial Officer (CFO)), as of the end of the period
covered by this report, our CEO and CFO have concluded that our disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the Exchange Act)), are effective
to provide reasonable assurance that information required to be disclosed by us
in reports that we file or submit under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in SEC rules and
forms, and is accumulated and communicated to management, including our
principal executive officer and principal financial officer, as appropriate to
allow timely decisions regarding required disclosure.
16
PART
II - OTHER
INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Our
outstanding legal proceedings are described in Note 16 to our consolidated
financial statements in our Annual Report on Form 10-K for the year ended
December 27, 2009. There have been no material developments regarding
any of our outstanding legal proceedings during the first quarter of 2010 and
through the filing date of this report except as noted below.
On
January 14, 2010, the United States Court of Federal Claims heard evidence in
support of a claim for damages payable to Spectrum Sciences & Software,
Inc., in the matter of Spectrum Sciences & Software, Inc. vs. the United
States. The claim alleges a breach of express contract, breach of
implied in fact contract and misappropriation of trade secrets. The
Court has not yet ruled on the claim for damages.
Item
1A. Risk Factors.
We are
subject to several risk factors that could have a direct and material impact on
the operations of the Company and the market price of our common
stock. Those risk factors are disclosed in our 2009 Form
10-K.
17
ITEM 6. EXHIBITS
2.1 Stock
Purchase and Sale Agreement, dated as of January 28, 2005, by and among Spectrum
Sciences & Software Holdings Corp., Coast Engine and Equipment Co., Inc,
Louis T. Rogers and Marilyn G. Rogers (previously filed on Form 8-K, filed with
the Securities and Exchange Commission on March 3, 2005)
2.2 Agreement
and Plan of Merger, dated as of April 14, 2005, by and among Spectrum Sciences
& Software Holdings Corp., Horne Acquisition, LLC, Horne Engineering
Services, Inc., Darryl K. Horne, Charlene M. Horne, and Michael M. Megless
(previously filed on Form 8-K, filed with the Securities and Exchange Commission
on May 17, 2005)
3.1 Certificate
of Incorporation, filed August 28, 1998 (previously filed in registration
statement on Form 10SB12B File No. 1-31710, filed with the Securities and
Exchange Commission on June 10, 2003)
3.2 Certificate
of Renewal and Revival, filed March 24, 2003 (previously filed in registration
statement on Form 10SB12B File No. 1-31710, filed with the Securities and
Exchange Commission on June 10, 2003)
3.3 Certificate
of Amendment of Certificate of Incorporation, filed April 8, 2003 (previously
filed in registration statement on Form 10SB12B File No. 1-31710, filed with the
Securities and Exchange Commission on June 10, 2003)
3.4
Certificate of Merger filed with the Delaware Secretary of State (previously
filed in registration statement on Form 10SB12B File No. 1-31710, filed with the
Securities and Exchange Commission on June 10, 2003)
3.5 Articles
of Merger filed with the Florida Secretary of State (previously filed in
registration statement on Form 10SB12B File No. 1-31710, filed with the
Securities and Exchange Commission on June 10, 2003)
3.6 Amended
Articles of Incorporation of Horne International, Inc. (previously filed on Form
8-K, filed with the Securities and Exchange Commission on September 6,
2006)
3.7 Amended
and Restated Bylaws of Spectrum Sciences & Software Holdings Corp., as
amended (previously filed on Form 10-Q, filed with the Securities and Exchange
Commission on November 14, 2005)
3.8 Amendment
to the Amended and Restated Bylaws of Spectrum Sciences & Software Holdings
Corp., as amended (previously filed on Form 8-K, filed with the Securities and
Exchange Commission on May 2, 2006)
4.1
Specimen Certificate of Common Stock (previously filed on Form 10SB12B File No.
1-31710, filed with the Securities and Exchange Commission on June 10,
2003)
4.2 Registration
Rights Agreement, dated as of May 11, 2005, by and between Spectrum Sciences
& Software Holdings Corp., Darryl K. Horne, Charlene M. Horne and Michael M.
Megless (previously filed on Form 8-K, filed with the Securities and Exchange
Commission on May 17, 2005)
10.1* Employment
Agreement, dated as of May 11, 2005, by and between Spectrum Sciences &
Software Holdings Corp. and Darryl K. Horne (previously filed on Form 8-K, filed
with the Securities and Exchange Commission on May 17, 2005)
10.2* First
Amendment to Employment Agreement, dated as of May 23, 2005, by and between
Spectrum Sciences & Software Holdings Corp. and Darryl K. Horne (previously
filed on Form 8-K, filed with the Securities and Exchange Commission on May 27,
2005)
10.4* 2004
Non-Statutory Stock Option Plan dated March 11, 2004 (previously filed on Form
8-K, filed with the Securities and Exchange Commission on March 12,
2004)
18
10.5* Amended
and Restated Number 1 2004 Non-Statutory Stock Option Plan, dated April 16, 2004
(previously filed on Form 8-K, filed with the Securities and Exchange Commission
on April 21, 2004)
10.6* Amended
and Restated Number 2 2004 Non-Statutory Stock Option Plan, dated November 15,
2004 (previously filed on Form 8-K, filed with the Securities and Exchange
Commission on November 19, 2004)
10.11
Receivables financing agreement, dated August 6, 2008 by and between Horne
International, Inc. and Darryl K. Horne. (previously filed with the Securities
and Exchange Commission on November 6, 2008)
10.20 Agreement,
dated as of March 23, 2010 by and between Horne International, Inc. and
Intelligent Decisions, Inc (filed herewith)
31.1 Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes –Oxley Act of
2002 (filed herewith)
31.2 Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 (filed herewith)
32.1 Certification
of the Chief Executive Officer and the Chief Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
*
Indicates management contract or compensatory arrangement.
19
.
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on this 12th day of May
2010.
HORNE
INTERNATIONAL, INC.
|
||
By:
|
/s/
Darryl K. Horne
|
|
Darryl
K. Horne
|
||
President
and Chief Executive Officer
|
||
By:
|
/s/
Paige E. Shannon
|
|
Paige
E. Shannon
|
||
Interim
Chief Financial Officer
|
20