Delaware
|
13-3899021
|
(State of incorporation)
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(IRS Employer
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Identification No.)
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Large accelerated filer
|
[ ]
|
Accelerated filer
|
[ ]
|
|
Non-accelerated filer
|
[ ]
|
Smaller reporting company
|
[X]
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PART I.
|
FINANCIAL INFORMATION
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PAGE
|
||
Item 1.
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Financial Statements
|
|||
Item 2.
|
||||
Item 3.
|
||||
Item 4.
|
||||
PART II.
|
OTHER INFORMATION
|
|||
Item 1.
|
||||
Item 1A.
|
||||
Item 2.
|
||||
Item 3.
|
||||
Item 4.
|
||||
Item 5.
|
||||
Item 6.
|
||||
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|
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GraphOn Corporation
|
||||||||
Condensed Consolidated Balance Sheets
|
||||||||
(Unaudited)
|
||||||||
Assets
|
September 30, 2011
|
December 31, 2010
|
||||||
Current Assets:
|
||||||||
Cash
|
$ | 7,847,500 | $ | 1,891,000 | ||||
Accounts receivable, net
|
755,000 | 1,015,900 | ||||||
Prepaid expenses
|
98,000 | 84,100 | ||||||
Total Current Assets
|
8,700,500 | 2,991,000 | ||||||
Capitalized software, net
|
345,300 | 237,700 | ||||||
Property and equipment, net
|
46,800 | 69,900 | ||||||
Patents, net
|
— | 39,300 | ||||||
Other assets
|
5,600 | 8,100 | ||||||
Total Assets
|
$ | 9,098,200 | $ | 3,346,000 | ||||
Liabilities and Stockholders’ Equity (Deficit)
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable and accrued expenses
|
$ | 983,300 | $ | 669,000 | ||||
Deferred revenue
|
2,490,100 | 2,058,300 | ||||||
Total Current Liabilities
|
3,473,400 | 2,727,300 | ||||||
Deferred revenue
|
491,300 | 640,200 | ||||||
Warrants liability
|
4,727,200 | — | ||||||
Total Liabilities
|
8,691,900 | 3,367,500 | ||||||
Commitments and contingencies
|
||||||||
Stockholders' Equity (Deficit):
|
||||||||
Common stock, $0.0001 par value, 195,000,000 shares authorized, 81,706,625 and 45,981,625 shares issued and outstanding at September 30, 2011 and December 31, 2010, respectively
|
8,200 | 4,600 | ||||||
Additional paid-in capital
|
61,207,400 | 58,902,000 | ||||||
Accumulated deficit
|
(60,809,300 | ) | (58,928,100 | ) | ||||
Total Stockholders' Equity (Deficit)
|
406,300 | (21,500 | ) | |||||
Total Liabilities and Stockholders' Equity (Deficit)
|
$ | 9,098,200 | $ | 3,346,000 |
Condensed Consolidated Statements of Operations
|
||||||||||||||||
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
Revenue
|
$ | 1,717,500 | $ | 1,771,900 | $ | 4,818,700 | $ | 5,777,900 | ||||||||
Costs of revenue
|
101,500 | 224,400 | 379,500 | 699,400 | ||||||||||||
Gross profit
|
1,616,000 | 1,547,500 | 4,439,200 | 5,078,500 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Selling and marketing
|
576,900 | 528,900 | 1,646,300 | 1,604,000 | ||||||||||||
General and administrative
|
788,700 | 762,200 | 2,139,300 | 2,287,600 | ||||||||||||
Research and development
|
628,500 | 533,800 | 1,707,100 | 1,807,100 | ||||||||||||
Total operating expenses
|
1,994,100 | 1,824,900 | 5,492,700 | 5,698,700 | ||||||||||||
Loss from operations
|
(378,100 | ) | (277,400 | ) | (1,053,500 | ) | (620,200 | ) | ||||||||
Other expense - change in fair value of warrants liability
|
(826,500 | ) | — | (826,500 | ) | — | ||||||||||
Other income, net
|
— | 1,100 | 300 | 2,400 | ||||||||||||
Loss before provision for income tax
|
(1,204,600 | ) | (276,300 | ) | (1,879,700 | ) | (617,800 | ) | ||||||||
Provision for income tax
|
700 | 700 | 1,500 | 2,600 | ||||||||||||
Net loss
|
$ | (1,205,300 | ) | $ | (277,000 | ) | $ | (1,881,200 | ) | $ | (620,400 | ) | ||||
Loss per share – basic and diluted
|
$ | (0.02 | ) | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.01 | ) | ||||
Average weighted common shares outstanding – basic and diluted
|
56,168,582 | 45,981,625 | 49,430,160 | 45,971,017 |
Condensed Consolidated Statements of Cash Flows
|
||||||||
Nine Months Ended September 30,
|
||||||||
2011
|
2010
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Cash Flows Provided By (Used In) Operating Activities:
|
||||||||
Net Loss
|
$ | (1,881,200 | ) | $ | (620,400 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
183,700 | 434,800 | ||||||
Stock-based compensation expense
|
71,400 | 66,400 | ||||||
Change in fair value of warrants liability
|
826,500 | — | ||||||
Changes to allowance for doubtful accounts
|
(6,000 | ) | (4,100 | ) | ||||
Revenue deferred to future periods
|
3,161,700 | 2,601,000 | ||||||
Recognition of deferred revenue
|
(2,878,800 | ) | (2,743,100 | ) | ||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
266,900 | 119,100 | ||||||
Prepaid expenses
|
(13,900 | ) | (11,700 | ) | ||||
Accounts payable and accrued expenses
|
119,300 | (282,000 | ) | |||||
Other long term assets
|
2,500 | 6,700 | ||||||
Net Cash Used In Operating Activities
|
(147,900 | ) | (433,300 | ) | ||||
Cash Flows Used In Investing Activities:
|
||||||||
Capitalized software development costs
|
(208,200 | ) | (274,000 | ) | ||||
Capital expenditures
|
(19,000 | ) | (25,300 | ) | ||||
Net Cash Used In Investing Activities
|
(227,200 | ) | (299,300 | ) | ||||
Cash Flows Provided By (Used In) Financing Activities:
|
||||||||
Proceeds from private placement of common stock and warrants, net of issuance costs
|
6,331,600 | — | ||||||
Proceeds from sale of common stock - employee stock purchase plan
|
— | 400 | ||||||
Proceeds from exercise of stock options
|
— | 5,000 | ||||||
Net Cash Provided By Financing Activities
|
6,331,600 | 5,400 | ||||||
Net Increase (Decrease) in Cash
|
5,956,500 | (727,200 | ) | |||||
Cash - Beginning of Period
|
1,891,000 | 2,852,900 | ||||||
Cash - End of Period
|
$ | 7,847,500 | $ | 2,125,700 |
|
|
|
|
Beginning Balance
|
Charge Offs
|
Recoveries
|
Provision
|
Ending Balance
|
||||||||||||||||
Three Months Ended September 30,
|
||||||||||||||||||||
2011
|
$ | 28,400 | $ | — | $ | — | $ | (1,600 | ) | $ | 26,800 | |||||||||
2010
|
27,900 | — | — | — | 27,900 | |||||||||||||||
Nine Months Ended September 30,
|
||||||||||||||||||||
2011
|
$ | 32,800 | $ | — | $ | — | $ | (6,000 | ) | $ | 26,800 | |||||||||
2010
|
32,000 | — | — | (4,100 | ) | 27,900 |
Estimated Volatility
|
Annualized Forfeiture Rate
|
Expected Option Term (Years)
|
Estimated Exercise Factor
|
Risk-Free Interest Rate
|
Dividends
|
|||||||||||||||||||
September 1, 2011
|
198 | % | — | 5.00 | 10 | 0.90 | % | — | ||||||||||||||||
September 30, 2011
|
198 | % | — | 4.92 | 10 | 0.96 | % | — |
September 1, 2011 fair value of the warrants liability at issuance
|
$ | 3,900,700 | ||
Change in fair value of warrant liability recorded in other expense
|
826,500 | |||
September 30, 2011 fair value of the warrants liability
|
$ | 4,727,200 |
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
Statement of Operations Classification
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Costs of revenue
|
$ | 300 | $ | 2,100 | $ | 2,300 | $ | 4,700 | ||||||||
Selling and marketing expense
|
(6,200 | ) | 5,600 | 2,700 | 21,500 | |||||||||||
General and administrative expense
|
28,700 | 4,500 | 46,300 | 21,900 | ||||||||||||
Research and development expense
|
14,000 | 7,900 | 20,100 | 18,300 | ||||||||||||
$ | 36,800 | $ | 20,100 | $ | 71,400 | $ | 66,400 |
Estimated Volatility
|
Annualized Forfeiture Rate
|
Expected Option Term (Years)
|
Estimated Exercise Factor
|
Risk-Free Interest Rate
|
Dividends
|
|
2011
|
180% - 185%
|
2% - 5%
|
7.5 – 10.0
|
15 - 20
|
2.41% - 3.24%
|
—
|
2010
|
175%
|
2%
|
10.0
|
20
|
3.72%
|
—
|
Number of Shares
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contractual Terms (Years)
|
Aggregate Intrinsic Value
|
|||||||
For the Three Months Ended September 30, 2011
|
||||||||||
Outstanding – June 30, 2011
|
8,387,333 | $ | 0.23 | |||||||
Granted
|
2,000,000 | 0.25 | ||||||||
Exercised
|
(133,685 | ) | (0.06 | ) | ||||||
Forfeited or expired
|
(315,337 | ) | 0.07 | |||||||
Outstanding - September 30, 2011
|
9,938,311 | $ | 0.23 |
6.21
|
$ 520,200
|
For the Nine Months Ended September 30, 2011
|
||||||||||
Outstanding - December 31, 2010
|
7,322,933 | $ | 0.27 | |||||||
Granted
|
3,246,000 | 0.19 | ||||||||
Exercised
|
(133,685 | ) | 0.06 | |||||||
Forfeited or expired
|
(496,937 | ) | 0.32 | |||||||
Outstanding - September 30, 2011
|
9,938,311 | $ | 0.24 |
6.21
|
$ 520,200
|
Three Months Ended September 30,
|
2011 Over (Under) 2010
|
|||||||||||||||
Revenue
|
2011
|
2010
|
Dollars
|
Percent
|
||||||||||||
Software Licenses
|
||||||||||||||||
Windows
|
$ | 685,200 | $ | 621,100 | $ | 64,100 | 10.3 | % | ||||||||
Unix
|
243,300 | 321,200 | (77,900 | ) | -24.3 | % | ||||||||||
928,500 | 942,300 | (13,800 | ) | -1.5 | % | |||||||||||
Intellectual property licenses
|
— | 225,000 | (225,000 | ) | -100.0 | % | ||||||||||
Software Service Fees
|
||||||||||||||||
Windows
|
436,100 | 341,000 | 95,100 | 27.9 | % | |||||||||||
Unix
|
265,000 | 258,600 | 6,400 | 2.5 | % | |||||||||||
701,100 | 599,600 | 101,500 | 16.9 | % | ||||||||||||
Other
|
87,900 | 5,000 | 82,900 | 1,658.0 | % | |||||||||||
Total Revenue
|
$ | 1,717,500 | $ | 1,771,900 | $ | (54,400 | ) | -3.1 | % |
Nine Months Ended September 30,
|
2011 Over (Under) 2010
|
|||||||||||||||
Revenue
|
2011
|
2010
|
Dollars
|
Percent
|
||||||||||||
Software Licenses
|
||||||||||||||||
Windows
|
$ | 1,817,400 | $ | 1,932,500 | $ | (115,100 | ) | -6.0 | % | |||||||
Unix
|
831,700 | 1,117,800 | (286,100 | ) | -25.6 | % | ||||||||||
2,649,100 | 3,050,300 | (401,200 | ) | -13.2 | % | |||||||||||
Intellectual property licenses
|
— | 875,000 | (875,000 | ) | -100.0 | % | ||||||||||
Software Service Fees
|
||||||||||||||||
Windows
|
1,205,800 | 987,200 | 218,600 | 22.1 | % | |||||||||||
Unix
|
811,300 | 810,400 | 900 | 0.1 | % | |||||||||||
2,017,100 | 1,797,600 | 219,500 | 12.2 | % | ||||||||||||
Other
|
152,500 | 55,000 | 97,500 | 177.3 | % | |||||||||||
Total Revenue
|
$ | 4,818,700 | $ | 5,777,900 | $ | (959,200 | ) | -16.6 | % |
Three Months Ended September 30,
|
2011 Over (Under) 2010
|
|||||||||||||||
2011
|
2010
|
Dollars
|
Percent
|
|||||||||||||
Software service costs
|
$ | 33,200 | $ | 114,100 | $ | (80,900 | ) | -70.9 | % | |||||||
Software product costs
|
68,300 | 26,500 | 41,800 | 157.7 | % | |||||||||||
Intellectual property licenses - contingent legal fees
|
— | 83,800 | (83,800 | ) | -100.0 | % | ||||||||||
$ | 101,500 | $ | 224,400 | $ | (122,900 | ) | -54.8 | % |
Nine Months Ended September 30,
|
2011 Over (Under) 2010
|
|||||||||||||||
2011
|
2010
|
Dollars
|
Percent
|
|||||||||||||
Software service costs
|
$ | 222,100 | $ | 321,400 | $ | (99,300 | ) | -30.9 | % | |||||||
Software product costs
|
157,400 | 39,900 | 117,500 | 294.5 | % | |||||||||||
Intellectual property licenses - contingent legal fees
|
— | 338,100 | (338,100 | ) | -100.0 | % | ||||||||||
$ | 379,500 | $ | 699,400 | $ | (319,900 | ) | -45.7 | % |
September 30, 2011
|
December 31, 2010
|
|||||||
Software development costs
|
$ | 487,700 | $ | 277,800 | ||||
Accumulated amortization
|
(142,400 | ) | (40,100 | ) | ||||
$ | 345,300 | $ | 237,700 |
September 30, 2011
|
December 31, 2010
|
|||||||
Patents
|
$ | 2,839,000 | $ | 2,839,000 | ||||
Accumulated amortization
|
(2,839,000 | ) | (2,799,700 | ) | ||||
$ | — | $ | 39,300 |
Gross cash proceeds
|
$ | 7,100,000 | ||
Less:
|
||||
Gross proceeds allocated to warrants liability - investors
|
(2,999,700 | ) | ||
Gross proceeds allocated to additional paid-in capital and common stock
|
4,100,300 | |||
Cash issuance costs (Note 11)
|
||||
Placement Agent fee and expenses
|
(766,500 | ) | ||
Legal and accounting fees
|
(196,900 | ) | ||
Non-cash issuance costs
|
||||
Warrants liability – Placement Agent fees
|
(901,000 | ) | ||
Recorded in additional paid-in capital and common stock
|
$ | 2,235,900 |
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
Revenue
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Software
|
$ | 1,717,500 | $ | 1,546,900 | $ | 4,818,700 | $ | 4,902,900 | ||||||||
Intellectual Property
|
— | 225,000 | — | 875,000 | ||||||||||||
Consolidated Revenue
|
$ | 1,717,500 | $ | 1,771,900 | $ | 4,818,700 | $ | 5,777,900 |
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
Income (Loss) From Operations
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Software
|
$ | (258,500 | ) | $ | (120,500 | ) | $ | (625,500 | ) | $ | (352,700 | ) | ||||
Intellectual Property
|
(119,600 | ) | (156,900 | ) | (428,000 | ) | (267,500 | ) | ||||||||
Consolidated Revenue
|
$ | (378,100 | ) | $ | (277,400 | ) | $ | (1,053,500 | ) | $ | (620,200 | ) |
Long-Lived Assets
|
Cost Basis
|
Accumulated Depreciation /Amortization
|
Net, as Reported
|
|||||||||
Software
|
$ | 1,817,300 | $ | (1,425,200 | ) | $ | 392,100 | |||||
Intellectual Property
|
2,839,000 | (2,839,000 | ) | — | ||||||||
Unallocated
|
5,600 | — | 5,600 | |||||||||
$ | 4,661,900 | $ | (4,264,200 | ) | $ | 397,700 |
·
|
placement agent fees and expenses, excluding placement agent warrants, of approximately $766,500;
|
·
|
legal, accounting and miscellaneous filing fees paid or accrued of approximately $196,900.
|
·
|
GO-Global Host:
Host products allow access to applications from remote locations and a variety of connections, including the Internet and dial-up connections. Such access allows applications to be run via a Web browser, over many types of data connections, regardless of the bandwidth or operating system. Web-enabling is achieved without modifying the underlying application’s code or requiring costly add-ons.
Host family products include GO-Global Windows Host 4 and all currently available versions of our legacy GO-Global products (GO-Global for Windows 3.2 and GO-Global for UNIX 2.2).
|
·
|
GO-Global Cloud:
Cloud products offer a centralized management suite that gives users the ability to access and share applications, files and documents on Windows, UNIX and Linux computers via simple hyperlinks. They give administrators extensive control over user rights and privileges, and allow them to monitor and manage clusters of GO-Global Hosts that support thousands of users. GO-Global Cloud products give application developers the ability to integrate Windows, UNIX and Linux applications into their Web-based enterprise and workflow applications. GO-Global Cloud products include GO-Global Host capabilities. We released GO-Global Cloud for Windows in March 2011 and expect to release GO-Global Cloud for UNIX in the first half of 2012.
|
·
|
GO-Global Client:
We plan to develop Client products for portable and mobile devices. We released GO-Global iPad Client, our first product within this product family, during June 2011.
|
2011 Over (Under) 2010
|
||||||||||||||||
Revenue
|
2011
|
2010
|
Dollars
|
Percent
|
||||||||||||
Software Licenses
|
||||||||||||||||
Windows
|
$ | 685,200 | $ | 621,100 | $ | 64,100 | 10.3 | % | ||||||||
Unix
|
243,300 | 321,200 | (77,900 | ) | -24.3 | % | ||||||||||
928,500 | 942,300 | (13,800 | ) | -1.5 | % | |||||||||||
Intellectual property licenses
|
— | 225,000 | (225,000 | ) | -100.0 | % | ||||||||||
Software Service Fees
|
||||||||||||||||
Windows
|
436,100 | 341,000 | 95,100 | 27.9 | % | |||||||||||
Unix
|
265,000 | 258,600 | 6,400 | 2.5 | % | |||||||||||
701,100 | 599,600 | 101,500 | 16.9 | % | ||||||||||||
Other
|
87,900 | 5,000 | 82,900 | 1,658.0 | % | |||||||||||
Total Revenue
|
$ | 1,717,500 | $ | 1,771,900 | $ | (54,400 | ) | -3.1 | % |
2011 Over (Under) 2010
|
||||||||||||||||
Revenue
|
2011
|
2010
|
Dollars
|
Percent
|
||||||||||||
Software Licenses
|
||||||||||||||||
Windows
|
$ | 1,817,400 | $ | 1,932,500 | $ | (115,100 | ) | -6.0 | % | |||||||
Unix
|
831,700 | 1,117,800 | (286,100 | ) | -25.6 | % | ||||||||||
2,649,100 | 3,050,300 | (401,200 | ) | -13.2 | % | |||||||||||
Intellectual property licenses
|
— | 875,000 | (875,000 | ) | -100.0 | % | ||||||||||
Software Service Fees
|
||||||||||||||||
Windows
|
1,205,800 | 987,200 | 218,600 | 22.1 | % | |||||||||||
Unix
|
811,300 | 810,400 | 900 | 0.1 | % | |||||||||||
2,017,100 | 1,797,600 | 219,500 | 12.2 | % | ||||||||||||
Other
|
152,500 | 55,000 | 97,500 | 177.3 | % | |||||||||||
Total Revenue
|
$ | 4,818,700 | $ | 5,777,900 | $ | (959,200 | ) | -16.6 | % |
2011 Over (Under) 2010
|
||||||||||||||||
Description
|
2011
|
2010
|
Dollars
|
Percent
|
||||||||||||
Software service costs
|
$ | 33,200 | $ | 114,100 | $ | (80,900 | ) | -70.9 | % | |||||||
Software product costs
|
68,300 | 26,500 | 41,800 | 157.7 | % | |||||||||||
$ | 101,500 | $ | 140,600 | $ | (39,100 | ) | -27.8 | % |
2011 Over (Under) 2010
|
||||||||||||||||
Description
|
2011
|
2010
|
Dollars
|
Percent
|
||||||||||||
Software service costs
|
$ | 222,100 | $ | 321,400 | $ | (99,300 | ) | -30.9 | % | |||||||
Software product costs
|
157,400 | 39,900 | 117,500 | 294.5 | % | |||||||||||
$ | 379,500 | $ | 361,300 | $ | 18,200 | 5.0 | % |
Three Months Ended September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
Income (Loss) From Operations
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Software
|
$ | (258,500 | ) | $ | (120,500 | ) | $ | (625,500 | ) | $ | (352,700 | ) | ||||
Intellectual Property
|
(119,600 | ) | (156,900 | ) | (428,000 | ) | (267,500 | ) | ||||||||
Consolidated Income (Loss) From Operations
|
$ | (378,100 | ) | $ | (277,400 | ) | $ | (1,053,500 | ) | $ | (620,200 | ) |
September 30, 2011
|
December 31, 2010
|
|||||||
Software Segment
|
$ | 1,817,300 | $ | 1,588,400 | ||||
Accumulated depreciation/amortization
|
(1,425,200 | ) | (1,280,800 | ) | ||||
392,100 | 307,600 | |||||||
Intellectual Property Segment
|
2,839,000 | 2,839,000 | ||||||
Accumulated depreciation/amortization
|
(2,839,000 | ) | (2,799,700 | ) | ||||
— | 39,300 | |||||||
Unallocated
|
5,600 | 8,100 | ||||||
Total Long-Lived, net
|
$ | 397,700 | $ | 355,000 |
·
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Engage additional technical resources to assist in the analysis of complex transactions or regulatory filings
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·
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Hire an additional skilled staff accountant in order to further spread the work load among company personnel
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GraphOn Corporation
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(Registrant)
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Date:
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November 14, 2011
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Date:
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November 14, 2011
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By:
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/s/ Robert Dilworth
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By:
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/s/ William Swain
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Robert Dilworth
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William Swain
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Chief Executive Officer and
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Chief Financial Officer
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Chairman of the Board
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(Principal Financial Officer and
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(Principal Executive Officer)
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Principal Accounting Officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of GraphOn Corporation (“registrant”);
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or person performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Robert Dilworth
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Robert Dilworth
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Chief Executive Officer
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Chairman of the Board
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1.
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I have reviewed this quarterly report on Form 10-Q of GraphOn Corporation (“registrant”);
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or person performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ William Swain
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William Swain
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Chief Financial Officer
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