UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 10-Q
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ý
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED December 31, 2009 .
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ______________.
Commission file number 1-11900
Integrated Security Systems, Inc.
(Exact name of small business issuer as specified in its charter)
Delaware
75-2422983
(State of Incorporation)
(I.R.S. Employer Identification No.)
2009 Chenault Drive, Suite 114, Carrollton, TX
75006
(Address of principal executive offices)
(Zip Code)
(972) 444-8280
(Issuer’s telephone number)
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes o No x
Indicate by check mark whether the registrant is a (See definitions in Rule 12b-2 of the Exchange Act:
Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ý
As of January 31, 2010, 560,764,951 shares of the registrant’s common stock were outstanding.
Page 1 of 17
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INTEGRATED SECURITY SYSTEMS, INC.
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets at December 31, 2009 (unaudited) and June 30, 2009
3
Consolidated Statements of Operations (unaudited) for the three months and six months ended December 31, 2009 and 2008
4
Consolidated Statements of Cash Flows (unaudited) for the six months ended December 31, 2009 and 2008
5
Notes to Financial Statements
6
Item 2. Management’s Discussion and Analysis or Plan of Operation
12
Item 4. Controls and Procedures
14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
15
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
15
Item 3. Defaults upon Senior Securities
15
Item 4. Submission of Matters to a Vote of Security Holders
15
Item 5. Other Information
15
Item 6. Exhibits
15
SIGNATURES
16
Page 2 of 17
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
INTEGRATED SECURITY SYSTEMS, INC.
Consolidated Balance Sheets
December 31,
June 30,
2009
2009
ASSETS
Unaudited
Current assets:
Cash and cash equivalents
$
23,092
$
30,944
Short term investments
40,525
56,000
Accounts receivable, net of allowances of $219,432 and $204,803, respectively
1,130,398
1,487,175
Inventory, net of reserves
325,819
314,430
Other current assets
254,033
242,509
Total current assets
1,773,867
2,131,058
Property and equipment, net
21,580
28,884
Goodwill
1,707,953
1,707,953
Other assets
162,454
218,199
Total Assets
$
3,665,854
$
4,086,094
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
978,956
$
1,252,517
Accrued liabilities
744,540
923,537
Demand note payable
362,615
287,985
Current portion of long-term debt
8,033
7,657
Liabilities related to discontinued operations
15,612
20,892
Total current liabilities
2,109,756
2,492,588
Long-term debt
11,187
15,299
Equity:
Convertible preferred stock, $0.01 par value, 750,000 shares authorized; 22,500 shares issued and outstanding ($450,000 of liquidation value)
225
225
Common stock, $0.01 par value, 800,000,000 shares authorized; 561,043,473 and 559,126,805 shares issued, respectively
5,610,435
5,591,268
Treasury stock, at cost, 278,522 common shares
(125,606)
(125,606)
Additional paid in capital
37,947,058
37,888,178
Accumulated deficit
(41,864,994)
(41,780,971)
Accumulated other comprehensive loss; (available for sale security)
(28,289)
(12,000)
Total stockholders’ equity
1,538,829
1,561,094
Noncontrolling interest
6,082
17,113
Total equity
1,544,911
1,578,207
Total liabilities and equity
$
3,665,854
$
4,086,094
