0001161697-15-000410.txt : 20150929 0001161697-15-000410.hdr.sgml : 20150929 20150929122354 ACCESSION NUMBER: 0001161697-15-000410 CONFORMED SUBMISSION TYPE: 10-12G/A PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20150929 DATE AS OF CHANGE: 20150929 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Woodland Holdings Corp CENTRAL INDEX KEY: 0001635965 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 800379897 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-12G/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-55401 FILM NUMBER: 151129548 BUSINESS ADDRESS: STREET 1: 13101 PRESTON ROAD STREET 2: SUITE 510 CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: (888)837-3910 MAIL ADDRESS: STREET 1: 13101 PRESTON ROAD STREET 2: SUITE 510 CITY: DALLAS STATE: TX ZIP: 75240 10-12G/A 1 form_10.htm FORM 10/A AMENDMENT NO. 1 TO REGISTRATION OF SECURITIES

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10 /A

Amendment No. 1


GENERAL FORM FOR REGISTRATION OF SECURITIES

Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934



WOODLAND HOLDINGS CORPORATION

(Exact name of registrant as specified in its charter)



 

 

Delaware

80-0379897

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

 

 

 

 

13101 Preston Road Suite 510, Dallas, Texas

75240

(Address of principal executive offices)

(Zip Code)

 

 

 

 

(Registrant’s telephone number, including area code)

(214) 556-4606

 

 

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

 

 

Title of each class

Name of each exchange on which

to be so registered

each class is to be registered

 

 

                       None                        

                     OTC QB                     

 

 

____________________________

____________________________

 

 

 

 

Securities to be registered pursuant to Section 12(g) of the Act:

 

 

 

Common Stock, $0.01 par value

(Title of class)

 

 

(Title of class)



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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b­2 of the Exchange Act.


 

Large accelerated filer o

Accelerated filer o

 

 

Non-accelerated filer   o (Do not check if a smaller reporting company)

Smaller reporting company þ

 




INFORMATION REQUIRED IN REGISTRATION STATEMENT


ITEM 1.  Business


Overview and Plan of Operation


Company History


CornerWorld Corporation (“CWC”) was incorporated on November 9, 2004, in the State of Nevada. Effective May 2007,  CWC changed its name to CornerWorld Corporation  The purpose of this Registration Statement on Form 10 is to register the common stock of CWC’s wholly owned subsidiary, Woodland Holdings Corporation for the purpose of effectuating a spin-off of Woodland Holdings Corporation from CWC’s operations.  Woodland Holdings Corporation (hereinafter referred to as “Woodland”, the “Company”, “we” “our” or “us”) was incorporated on January 21, 2009, in the State of Delaware.  Our principal executive offices are located at 13101 Preston Road, Suite 510, Dallas, Texas 75240. Our telephone number is (888) 837-3910 and our fiscal year-end is December 31 having recently been changed; prior to December 31, 2013, our fiscal year ended April 30.


The Company was formerly a wholly owned subsidiary of CWC.  The Company is being spun off (the “Spinoff”) from CWC and CWC’s other wholly subsidiaries, pursuant to SEC Staff Legal Bulletin No. 4, to CWC’s existing shareholders in their pro-rata ownership percentages to enable the Company to pursue opportunities in the telecommunications space.  See also Item 2 Management’s Discussion and Analysis for more details with respect to the Spinoff. Woodland continues to be a telecommunications services company creating opportunities from the increased accessibility of content across mobile telecommunications platforms. The Company conducts its business through its main operating subsidiaries as described below.


Woodland provides telephony and internet services through its wholly owned subsidiaries Phone Services and More, L.L.C., doing business as Visitatel (“PSM”) and T2 Communications, L.L.C. (“T2”).  As a provider of Internet and voice over Internet protocol (“VoIP”) services, T2 delivers traditional telecommunications services via VoIP to business customers in Texas. Offerings include: phone lines, internet connections, long distance and toll-free services. T2 is a Competitive Local Exchange Carrier (CLEC) that generates revenues via the sale of long-distance minutes to its customers. T2 also generates commissions from its carrier partners related to the provision of long-distance minutes to its customers.  PSM, also a CLEC, is a wholesale long distance service provider to the carrier community and large commercial users of minutes.  PSM generates revenues via earning commissions from serving as a broker for services provided by T2.   T2 and PSM’s CLEC licenses permit them to operate in the lucrative telecommunications industry but their respective business models do not require any significant investments in property plant and equipment due to the fact that they are able to outsource all switching and technology needs to third parties.


T2 and PSM are small CLEC’s competing in the multi-billion dollar telecommunications services space against large national carriers, such as AT&T and Verizon, who operate extensive networks. T2’s contract currently provides it a competitive advantage over other providers while T2’s and PSM’s CLEC licenses permit them to provide services in the highly regulated telecommunications services space. However, upon expiration of T2’s contract, there can be no guarantee that T2 will be able to renew its current contract or establish a unique product that they can provide to attract new customers. Furthermore, as small CLEC’s, both T2 and PSM are subject to constantly evolving market conditions over which they have no pricing power.  Their competitive position in the industry as a result of their CLEC licenses enables T2 to earn an arbitrage between the rate at which they can purchase minutes and the rates at which it can re-sell those same minutes and enables PSM to earn commissions by brokering T2’s services.  There can be no guarantee that either T2 or PSM will be able to maintain their margins and earn commissions in the future should they lose any key customers. The Company has incurred no costs over the previous three years on research and development activities for either T2 or PSM and has no future plans to incur research and development costs for either of its CLEC’s.


Woodland was the previous owner of S Squared, LLC, doing business in the state of Texas as Ranger Wireless Solutions, LLC (“Ranger”) whose key asset was the patented 611 Roaming ServiceTM from RANGER Wireless Solutions®, which generated revenue by processing approximately 10.2 million calls from roaming wireless customers per year and seamlessly connecting them to their service provider.  The Company divested Ranger on September 30, 2013 and its operating results have been reported as discontinued operations.  See also Note 3, Discontinued Operations, in the financial statements for more information with respect to the sale of Ranger.


- 2 -



TinyDial, LLC (“TinyDial”) was previously a wholly-owned subsidiary of CWC.  Over the three years ended December 31, 2014, CWC spent $308,289 developing TinyDial; CWC has no future plans or funding commitments to continue research and development on TinyDial and CWC will contribute 100% of its ownership of TinyDial stock to the Company effective September 30, 2015 for no consideration as TinyDial has no accounts, no operations and no customers.  TinyDial holds a telecommunications patent and is a development stage company whose core focus is enabling its users to conduct unlimited free conference calls, direct dialing via the use of short codes, instant messaging and contact management, among other mobile telecommunications services.  As of the date of this filing, the buildout of TinyDial has been completed and the application is available in both the iPhone and Android app stores.  TinyDial is an application that is free to its users.  It is anticipated that it will ultimately generate revenues based on a minutes of use (“MOU”) model whereby, as its users make conference calls, they generate MOU’s which TinyDial can then bill to its carrier partners.  At this time, the Company does not have future research and development plans related to TinyDial nor does it plan on investing further resources in the TinyDial mobile application or patent. The TinyDial patent is for 20 years from its March 4, 2014 issuance. While the Company believes it has relevance and value in the telecommunications space, it is carrying the patent at its net realizable value of zero dollars due to the fact that TinyDial has no customers, accounts or operations.


The Company previously provided telecommunications services through its Woodland Wireless Solutions, Ltd. (“WWS”), West Michigan Co-Location Services, L.L.C. (“WMCLS”) and T2 TV, L.L.C. (“T2TV”).  The Company ceased operations in its WWS, WMCLS and T2TV subsidiaries during the fiscal year ended April 30, 2013. Their operating results have been reported as discontinued operations in these financial statements.


Regulatory Matters


Portions of our operations, particularly our CLECs, are highly regulated and subject to a variety of federal and state laws, which require that we obtain various governmental licenses, permits and approvals. Specifically, we must file annual and quarterly reports on form 499 with the Federal Communications Commission to maintain our CLEC licenses, contribute to the Federal Universal Service Fund and we must file annual reports with the state of Texas detailing our operating activities.  We believe we are in material compliance with all applicable licensing and regulatory requirements.


Employees


As of June 30, 2015, the Company has four employees.   None of its employees are represented by collective bargaining agreements and the Company considers it relations with its employees to be good.


Corporate Information


Woodland is a Delaware corporation with principal executive offices located at 13101 Preston Road, Suite 510, Dallas, Texas 75240. Our website address is www.woodlandholdings.net. We will make available on our website, free of charge, all our SEC filings, including our Annual Reports on Form 10-KSB, Quarterly Reports on Form 10-QSB and Current Reports on Form 8-K and any amendments to such reports, as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the SEC.


ITEM 1A.  Risk Factors


Not applicable for a smaller reporting company.


ITEM 2.  Financial Information and Management’s Discussion and Analysis of Financial Condition and Results of Operations


The following selected consolidated financial data should be read in conjunction with our consolidated financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. The consolidated statements of operations data for the three and six month periods ended June 30, 2015 (unaudited), the year ended December 31, 2014, the three months and six month periods ended June 30, 2014 (unaudited), the eight-month period ended December 31, 2013 and the fiscal year ended April 30, 2013 as well as the balance sheet data at December 31, 2014 and 2013 are derived from our audited consolidated financial statements which are included elsewhere in this Registration Statement on Form 10.  The historical results are not necessarily indicative of results to be expected for future periods.


- 3 -



Consolidated Statements of Operations Data:


 

 

For the Three-
Month Period
Ended
June 30,

 

For the Six-
Month Period
Ended
June 30,

 

For the Year
Ended
December 31,

 

For the Three-
Month Period
Ended
June 30,

 

For the Six-
Month Period
Ended
June 30,

 

For the Eight-
Month Period
Ended
December 31,

 

For the Year Ended
April 30:

 

 

 

2015

 

2015

 

2014

 

2014

 

2014

 

2013

 

2013

 

 

 

(unaudited)

 

(unaudited)

 

 

 

(unaudited)

 

(unaudited)

 

 

 

 

 

Revenue

 

$

12,291

 

$

42,912

 

$

130,282

 

$

22,747

 

$

69,059

 

$

11,850

 

$

1,473

 

Costs of goods sold

 

 

5,166

 

 

11,689

 

 

42,206

 

 

10,445

 

 

26,777

 

 

12,044

 

 

374

 

Gross profit (loss)

 

 

7,125

 

 

31,223

 

 

88,076

 

 

12,302

 

 

42,282

 

 

(194

)

 

1,099

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

 

(12,033

)

 

( 67,654

)

 

84,671

 

 

54,325

 

 

81,511

 

 

( 236,685

)

 

26,547

 

Income (loss) from operations

 

 

19,158

 

 

98,877

 

 

3,405

 

 

( 42,023

)

 

( 39,229

)

 

236,491

 

 

( 25,448

)

Other (expense) income, net

 

 

 

 

(176

)

 

 

 

 

 

 

 

(248,159

)

 

 

Income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

 

19,158

 

 

98,701

 

 

3,405

 

 

( 42,023

)

 

( 39,229

)

 

( 11,668

)

 

( 25,448

)

Income from discontinued operations, net of tax

 

 

 

 

15,777

 

 

(50,128

)

 

(5,928

)

 

(17,855

)

 

447,457

 

 

1, 376,097

 

Gain from discontinued operations, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

2,544,258

 

 

 

Net income (loss)

 

$

19,158

 

$

114,478

 

$

(46,723

)

$

(47,951

)

$

(57,084

)

$

2,980,047

 

$

1,350,649

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings (loss) per share from continuing operations

 

$

191.58

 

$

987.01

 

$

34.05

 

$

( 420,23

)

$

( 392.29

)

$

( 116.68

)

$

( 254.48

)

Basic and diluted earnings (loss) per share from discontinued operations

 

$

0.00

 

$

157.77

 

$

(501.28

)

$

(59.28

)

$

(178.55

)

$

29,917.15

 

$

13,760.97

 

Basic and diluted earnings (loss) per share

 

$

191.58

 

$

1,144.78

 

$

(467.23

)

$

(479.51

)

$

(570.84

)

$

29,800.47

 

$

13,506.49

 

Basic and diluted weighted average shares outstanding

 

 

100

 

 

100

 

 

100

 

 

100

 

 

100

 

 

100

 

 

100

 


Consolidated Balance Sheet Data:


 

 

June 30

 

December 31,

 

April 30,

 

 

 

2015

 

2014

 

2013

 

2013

 

 

 

(unaudited)

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

39,777

 

$

3,021

 

$

8,726

 

$

1,110,582

 

Total assets

 

$

52,646

 

$

51,546

 

$

133,979

 

$

7,709,598

 

Long-term obligations

 

$

 

$

 

$

2,383

 

$

9,139

 

Total stockholders’ equity (deficit)

 

$

35,604

 

$

(65,973

)

$

(2,355

)

$

1,473,435

 


Management’s discussion and Analysis of Financial Condition and Results of Operations


Introduction


The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto.


Overview


Woodland is a telecommunication services company providing services for the increased accessibility of content across mobile and Internet platforms. The Company is a holding company whose wholly owned subsidiaries operate in the rapidly changing telecommunications services industry.  The Company has developed a consistent revenue stream and gross margins that supports its administrative and operating costs.


Our key assets are our CLEC’s along with their respective licenses as well as TinyDial, our patented mobile telecommunications application.


- 4 -



Spin-Off


As previously discussed, the Company was originally a wholly owned subsidiary of CWC, a Nevada corporation publicly traded on the OTCQB exchange.  Subsequent to the sale of Ranger and the receipt of the TinyDial patent, CWC’s Board of Directors determined that the best way to leverage opportunities resulting from the TinyDial patent as well as to continue the development of the TinyDial telecommunications application would be to spin-off all of CWC’s telecommunications assets into a separate company.  The Company’s Board of Directors believes it will be more successful in accessing capital markets as investors will have more interest in a single segment operating company focused solely on the telecommunications industry.


CWC’s Board of Directors formally approved the spin-off of the Company on August 13, 2015 for shareholders of record as of September 30, 2015 (the “Record Date”).  For every share owned by CWC shareholders as of the Record Date, those same shareholders will be issued 1 share of the Company’s common stock.   Just prior to the Record Date, the Company will increase its authorized shares to 250,000,000 to accommodate the new issuances of shares and, accordingly, no fractional shares are anticipated to be issued.  Subsequent to regulatory approval, it is anticipated that the Company’s shares will be free trading shares on the OTCQB exchange.


Accordingly, this Registration Statement on Form 10 includes all the accounts of the Company and its wholly owned subsidiaries, all of which are to be spun off.  The financial information for the Company is substantially identical to that of CWC’s telecommunications segment.


Year ended December 31, 2014 Highlights


·

We completed the change of our fiscal year end from April 30 to December 31.

 

 

·

We received the patent for TinyDial.

 

 

·

We completed the development of our TinyDial mobile telecommunications application.


Critical Accounting Policies


Use of Estimates


In preparing our consolidated financial statements, we make estimates, assumptions and judgments that can have a significant effect on our revenues, income (loss) from operations, and net income (loss), as well as on the value of certain assets on our consolidated balance sheets. We believe that there are several accounting policies that are critical to an understanding of our historical and future performance as these policies affect the reported amounts of revenues, expenses and significant estimates and judgments applied by management. While there are a number of accounting policies, methods and estimates affecting our consolidated financial statements, areas that are particularly significant include allowance for doubtful accounts, recoverability of long-lived assets (including goodwill), revenue recognition and stock-based compensation. In addition, please refer to Note 2 to the accompanying consolidated financial statements for further discussion of our accounting policies.


Allowance for Doubtful Accounts


We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The allowance for doubtful accounts is based on an estimate of buckets of customer accounts receivable, stratified by age, that, historically, have proven to be uncollectible; in addition, in certain cases, the allowance estimate is supplemented by specific identification of larger customer accounts and our best estimate of the likelihood of potential loss, taking into account such factors as the financial condition and payment history of major customers. We evaluate the collectability of our receivables at least quarterly. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The differences could be material and could significantly impact cash flows from operating activities.


Impairment of Long-Lived Assets


The Company’s management assesses the recoverability of its long-lived assets by determining whether the depreciation of long-lived assets over their remaining lives can be recovered through projected undiscounted future cash flows. The amount of long-lived asset impairment is measured based on fair value and is charged to operations in the period in which long-lived asset impairment is determined by management.


- 5 -



Revenue Recognition


It is the Company’s policy that revenue from product sales or services will be recognized in accordance with Staff Accounting Bulletin No. 104, “Revenue Recognition” (“SAB No. 104”), which superseded Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” (“SAB No. 101”). SAB No. 101 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product was not delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.


Recent Accounting Pronouncements


There were various accounting standards and interpretations issued during the year ended December 31, 2014, none of which are expected to have a material impact on the Company’s consolidated financial position, operations, or cash flows.


Comparison of the Quarter Ended June 30, 2015 (unaudited) to the Quarter Ended June 30, 2014 (unaudited)


Revenues:


We had revenues totaling $12,291 for the three month period ended June 30, 2015 as compared to $ 22,747 for the corresponding period during the prior year. The decrease in revenue is due to a decrease in carrier access billing at our CLEC resulting from decrease in telecommunications traffic at our CLEC’s largest customer.


Cost of Sales:


We had cost of sales totaling $5,166 for the three month period ended June 30, 2015 as compared to $ 10,445 for the corresponding period during the prior year. The improvement of $ 5,279 or 50.5 % is due to the fact that we re-routed our telecommunications traffic to a significantly cheaper provider.


Selling, General and Administrative Expenses:


We had Selling, General and Administrative Expenses (“SG&A”) totaling a credit of $12,033 for the three month period ended June 30, 2015 as compared to an expense of $ 51,647 for the corresponding period during the prior year. The significant improvement of $ 63,680 is primarily due to the settlement of several accounts payable and accrued liabilities at a discounted rate.


Depreciation and Amortization:


Our communications services segment had depreciation and amortization expenses totaling $0 for the three month period ended June 30, 2015 versus $2,678 for the corresponding period in the prior year.  The decrease is due to all of our telecom assets becoming fully depreciated.


Income (Loss) from Continuing Operations Before Taxes and Net Income (Loss):


Income from Continuing Operations Before Taxes totaled $19,158 for the three month period ended June 30, 2015 as compared to a loss totaling $ 42,023 for the corresponding period in the prior year while Net Income totaled $19,158 for the three month period ended June 30, 2015 as compared to a Net Loss totaling $47,951 for the corresponding period in the prior year. The Net Income improvement of $67,109 is primarily due to the aforementioned settlement of several accounts payable and accrued liabilities at a discounted rate coupled with the absence of prior year’s $5,928 loss from discontinued operations during the three month period ended June 30, 2015 due to the fact that T2’s Michigan operations were divested on March 31, 2015 .


Comparison of the Six Month Period Ended June 30, 2015 (unaudited) to the Six Month Period Ended June 30, 2014 (unaudited)


We had revenues totaling $ 42,912 for the six month period ended June 30, 2015 as compared to $ 69,059 for the corresponding period during the prior year. The decrease in revenue is due to a decrease in carrier access billing at our CLEC resulting from decreases in telecommunications traffic at our CLEC’s largest customer.  It is anticipated that the carrier access billing revenue will recover significantly in the third quarter.


- 6 -



Cost of Sales:


We had cost of sales totaling $ 11,689 for the six month period ended June 30, 2015 as compared to $ 26,777 for the corresponding period during the prior year. The improvement of $ 15,088 or 56.3 % is due to the fact that we re-routed our telecommunications traffic to a significantly cheaper provider.


Selling, General and Administrative Expenses:


We had Selling, General and Administrative Expenses (“SG&A”) totaling a credit of $ 68,561 for the six month period ended June 30, 2015 as compared to an expense of $ 76,156 for the corresponding period during the prior year. The significant improvement of $ 144,717 is primarily due to the reversal of bad debt expense resulting from collections of a long overdue account as well as the aforementioned settlement of certain accounts payable at a discounted rate.


Depreciation and Amortization:


Our communications services segment had depreciation and amortization expenses totaling $907 for the six month period ended June 30, 2015 versus $5,355 for the corresponding period in the prior year.  The decrease is due to all of our telecom assets becoming fully depreciated.


Income (Loss) from Continuing Operations Before Taxes and Net Income (Loss):


Income from Continuing Operations Before Taxes totaled $ 98,701 for the six month period ended June 30, 2015 as compared to a loss totaling $ 39,229 for the corresponding period in the prior year while Net Income totaled $114,478 for the six month period ended June 30, 2015 as compared to a Net Loss totaling $57,084 for the corresponding period in the prior year . As previously noted, the net income improvement of $171,562 is primarily due to the reversal of bad debt expense resulting from collections of a long overdue account and settlements of certain accounts payable at a discount combined with income from discontinued operations totaling $15,777 during the six months ended June 30, 2015 as compared to a loss from discontinued operations of $17,855 in the corresponding period in the prior year .


Comparison of the Year Ended December 31, 2014 (audited) to the Year Ended December 31, 2013 (unaudited)


Revenues:


We had revenues totaling $ 130,282 for the year ended December 31, 2014 as compared to $ 12,509 for the year ended December 31, 2013. The increase in revenue is due to the Company’s ability to generate carrier access billing (“CABs”) at our T2 CLEC.


Cost of Sales:


We had cost of sales totaling $ 42,206 for the year ended December 31, 2014 as compared to $ 12,044 for the corresponding period in the prior year. The increase of $ 30,162 or 250.4 % is due to the  fact that we had to increase our outsourced telecom infrastructure to enable our CLEC to generate CABs billing .


Selling, General and Administrative Expenses:


We had SG&A expenses of totaling of $ 73,962 for the year ended December 31, 2014 as compared to $ (243,825) for the corresponding period in the prior year. The significant increase of $ 317,787 is primarily due to the discounted settlement of a long outstanding account payable during the year ended December 31, 2013 .


Depreciation:


The Company had Depreciation expenses totaling $10,709 for both the year s ended December 31, 2014 and 2013.


Other Income (Expense):


We had no Other Expenses for the year ended December 31, 2014 as compared to $248, 190 for the corresponding period in the prior year. The bulk of the Other Expenses in the year ended December 31, 2013 is the charge of $ 249,000 which was a fee paid to the venture capital firm that brokered the sale of Ranger on September 30, 2013.


- 7 -



Income ( Loss ) from Continuing Operations Before Taxes:


Loss from Continuing Operations Before Taxes totaled $ 3,405 for the year ended December 31, 2014 as compared to a Loss from Continuing Operations Before Taxes totaling $ 14,609 for the year ended December 31, 2013. The improvement of $ 18,014 is primarily due to reductions in SG&A expenses as well the fact that the prior year’s results included settlement and reversal of a large outstanding account payable which was offset, almost entirely, by a $249,000 investment banking fee related to the divestiture of Ranger .


Net Income (Loss):


Net Loss totaled $46,723 for the year ended December 31, 2014 as compared to Net Income of $3,254, 755 for the corresponding period in the prior year. The decrease of $3,301, 478 is due to the fact that current year numbers include a loss from discontinued operations for T2’s Michigan operations totaling $50,128 while prior year Net Income numbers included earnings from discontinued operations relating to both Ranger and T2 totaling $ 725,106 as well as a gain on the sale of discontinued operations from the sale of Ranger totaling $2,544,258.


Liquidity and Capital Resources


As of June 30, 2015, we had positive working capital totaling $35,604 including cash of $39,777.  As of December 31, 2014, we had negative working capital totaling $68,652 including cash of $3,021.  As we have consolidated our telecommunications operations and moved to a model whereby all of our services are outsourced, we have eliminated our need for significant amounts of investing or financing capital.  Accordingly, our operating cash flows are the lone driver and funding sources of our operations.  Our operating cash flows consist entirely of the collection of our billed services revenues offset by the cost of providing these revenues on an outsourced basis.  Furthermore, the Company has settled all its long outstanding payables and receivables and it anticipates the continued ability to generate cash flow from the margins it earns on the provision of wholesale telecommunications minutes to its customers,   As previously noted, due to its small size and limited pricing power, there can be no guarantee the Company will be able to continue to maintain its operating margins.


The Company is currently debt free and has no financial commitments outside of trade payables due in the normal course of business.


Our investing activity for the six months ended June 30, 2015 and the year ended December 31, 2014, totaled $0 and $2,639, respectively, which consisted of the acquisition of fixed assets pursuant to our lone capital lease which was fully paid down as of June 30, 2015.


Our financing activities for the six months ended June 30, 2015 and the year ended December 31, 2014 totaled $13,793 and $24,680, respectively, which consisted of payments pursuant to the aforementioned capital lease as well as capital contributions returned to CWC, the Company’s lone shareholder.


We have no other bank financing or other external sources of liquidity.  There can be no assurance that, going forward, our operations will generate positive operating cash flow.


Contractual Obligations


The following table presents our contractual obligations as of December 31, 2014:


 

 

Payments Due by Period

 

Contractual Obligations

 

Total

 

Less than
1 Year

 

1 – 3
Years

 

3 – 5
Years

 

More than
5 Years

 

Operating and capital leases

 

$

2,662

 

$

2,662

 

$

 

$

 

$

 

Total

 

$

2,662

 

$

2,662

 

$

 

$

 

$

 


Off-Balance Sheet Arrangements


Mr. Beck holds a note receivable from the Company’s former parent, CWC, that is secured by all the assets of the Company.  Should the Company’s former parent CWC default on this note, Mr. Beck could foreclose on all the assets of CWC and, potentially, the Company.  CWC was in technical default on its note payable to Mr. Beck dating back to December 31, 2013.  Mr. Beck, as one of CWC’s largest shareholders, has not called default but he could do so at any time of his choosing.


- 8 -



Inflation


We believe that, for the year ended December 31, 2014, inflation has not had a material effect on our operations.


ITEM 3.  Properties


The Company currently operates out of office space consisting of approximately 3,680 square feet. This office space is leased by the Company’s former parent, CWC, and is located in Dallas, Texas.  The Company has no obligations pursuant to this lease which expires May 31, 2016.  Trusts managed by the control party of the Company’s largest shareholder along with trusts controlled by the family of the Company’s CEO own the building from which the Company currently operates.


ITEM 4.  Security Ownership of Certain Beneficial Owners and Management


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


As previously noted, 100% of the Company’s outstanding shares are owned by its former parent company, CWC.  As of the effective date of the aforementioned spin-off, CWC’s current shareholders will receive pro-rata shares in the ownership in the Company.  Accordingly, the table below sets forth, as of December 31, 2014 (except where otherwise noted), certain information with respect to shares beneficially owned by (i) each person who is known by CWC to be the beneficial owner of more than five percent of CWC’s outstanding shares of Common Stock, (ii) each of the Company’s Directors, (iii) each of the executive officers and (iv) all current Directors and executive officers as a group. Once this registration statement becomes effective and the spin-off is completed, the table below will closely approximate the pro-rata distribution of the Company’s shares.


Beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act. Under this rule, certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire shares (for example, upon exercise of an option or warrant) within sixty (60) days of the date as of which the information is provided; in computing the percentage ownership of any person, the amount of shares is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of such acquisition rights. As a result, the percentage of outstanding shares of any person as shown in the following table does not necessarily reflect the person’s actual voting power at any particular date. As of December 31, 2014, the Directors and executive officers of CWC held a total of 63,125,730 shares of Common Stock entitled to vote, representing 38.7% of the then outstanding shares of Common Stock.


Beneficial Owner

 

Amount of
Common Stock
Beneficially Owned
as of
December 31, 2014 (1)

 

Percentage of
Common Stock
Outstanding
(1)

 

 

 

 

 

Executive Officers and Directors (2)

 

 

 

 

Scott Beck

 

56,787,044

 

34.9%

Marc Blumberg

 

3,138,686

 

1.9%

V. Chase McCrea III (3)

 

3,200,000

 

2.0%

All executive officers and directors as a group (consisting of  3 individuals)

 

63,125,730

 

38.7%

 

 

 

 

 

Other 5% stockholders:

 

 

 

 

IU Holdings II, LP (4)

 

58,314,132

 

37.1%

Total Executive Officers, Directors and Affiliates (2)

 

121,439,862

 

74.2%


(1)

The number of shares of Common Stock outstanding as of December 31, 2014 was 162,937,110. The number of beneficially owned shares includes 200,000 shares issuable pursuant to stock options that may be exercised within sixty (60) days after December 31, 2014.

 

 

(2)

Except as indicated in the footnotes to this table and pursuant to applicable community property laws, the officers and Directors named in the table have sole voting and investment power with respect to all shares of Common Stock. Unless otherwise indicated, the business address of each beneficial owner listed is 13101 Preston Road, Suite 510, Dallas, Texas 75240.


- 9 -




(3)

Includes 200,000 shares issuable upon exercise of stock options exercisable or that vest within 60 days of December 31, 2014.

 

 

(4)

The business address of this entity is 5005 LBJ, Freeway, Suite 370 Occidental Tower Management, Dallas, TX 75244.  See “Certain Relationship and Related Transactions” below for additional information regarding this entity.


ITEM 5.  Directors and Officers


The Company currently has two Directors. The term of each Director expires at the Company’s annual meeting each year. The persons whose names are listed below will serve until the Annual Meeting in 2015 or until his successor has been elected and qualified.  Our Board of Directors is not currently divided into classes.


Name of Director

 

Age

 

Positions with CornerWorld Since

Scott N. Beck

 

41

 

Chief Executive Officer, Chairman and Director, 2007

Marc Blumberg

 

42

 

Director, 2008


Scott N. Beck was appointed Chairman and Chief Executive Officer of CWC after founding CWC in 2007.  Prior to founding CWC, from 2004 to present, Mr. Beck has served as Chairman and President of Beck Ventures, a venture capital firm that he founded.  Prior to founding Beck Ventures, Mr. Beck worked as an Associate Vice-President at JP Morgan Chase and Co’s Lab Morgan where he focused on new business formation and corporate strategy for the bank globally. Prior to joining JP Morgan Chase, Mr. Beck was a member of SG Cowen’s Leveraged Finance Group, where he provided support to clients who access the high yield and leveraged finance capital markets. Preceding SG, Mr. Beck was a senior auditor at Ernst and Young LLP. Mr. Beck received a Masters of Accounting from the McCombs School of Business at the University of Texas at Austin where he completed his B.B.A. Mr. Beck is a member of the Board of Directors of United Texas Bank and is President of Beck Properties Trophy Club. The Board of Directors has determined that Mr. Beck’s prior experience working as an investment banker on Wall Street with both high-tech and public companies make him uniquely qualified to serve as the Chairman of Woodland Holdings.


Marc Blumberg was appointed Director subsequent to CWC’s August 27, 2008 acquisition of Enversa Companies LLC (“Enversa”).  Mr. Blumberg currently is the co-owner and co-founder of Chooze shoes, an entity that is taking advantage of the highly lucrative children’s apparel market.  Mr. Blumberg had previously been with imc2 from 1997 to 2013 where he served as their President. At imc2, he led their clients in developing innovative and effective marketing strategies.  Mr. Blumberg helped build the company from six to a staff of over 500 people providing services to Procter & Gamble, The Coca-Cola Company, and GlaxoSmithKline. Before joining imc2, Mr. Blumberg was a strategy consultant for Gemini Consulting’s MAC Group and for the New England Consulting Group. Mr. Blumberg has spent his professional career consulting with FORTUNE 500 companies. He holds a Bachelor of Science in Economics from the University of Pennsylvania’s Wharton School of Business. The Board of Directors has determined that Mr. Blumberg’s joint experience with imc2 and serving as a consultant to FORTUNE 500 companies adequately qualifies him to serve on the Board of Directors.


The business and affairs of the Company are managed under the direction of the Board of Directors. The Board believes that good corporate governance is a critical factor in achieving business success and in fulfilling the Board’s responsibilities to stockholders. The Board believes that its practices align management and stockholder interests. Highlights of our corporate governance practices are described below.


Additional Executive Officers


V. Chase McCrea III, age 47, has served as our Chief Financial Officer since his appointment September 18, 2009.  Mr. McCrea is a CPA with over 20 years of experience working with and for public companies serving in a variety of capacities.  Until July 2007, Mr. McCrea had served as the Interim Chief Financial Officer and Vice President of Finance of Home Solutions of America, Inc., a publicly traded construction concern. Prior to that, he worked as the Director of Finance for Penson Worldwide, Inc., an international securities clearing firm dating to the summer of 2006, and also as a Manager of SEC Reporting for chemical giant Celanese dating to the summer of 2005. For several years prior to 2005 Mr. McCrea had served as the Director of SEC Reporting for technology company DG Systems (the predecessor company to DG/FastChannel, Inc.) as well as serving as the Director of Finance for approximately five years for a telecommunications provider. Mr. McCrea’s experience includes over eight years working for Big Four accounting firms, where he attained the level of assurance manager. Mr. McCrea holds a Bachelor’s of Science in Accounting from the highly regarded accounting school at the University of Southern California.


It is anticipated that our current directors and officers will maintain their positions in the Company following the spin-off.


- 10 -



Code of Ethics


The Company has not currently adopted a code of ethics.


Director Independence


Our common stock is anticipated to be quoted on the OTCQB as of the effective date of this Registration Statement on Form 10.  It will not be listed on the NASDAQ Stock Market or any other national securities exchange. Accordingly, we are not currently subject to the NASDAQ continued listing requirements or the requirements of any other national securities exchange. Nevertheless, in determining whether a director or nominee for director should be considered “independent” the board utilizes the definition of independence set forth in Rule 5605(a)(2) of the NASDAQ Marketplace Rules. The Company currently does not have an independent director.


Board Meetings


The Board of Directors of the Company’s parent Company, CWC, held one meeting during the year ended December 31, 2014.  Mr. Beck and Mr. Blumberg both attended the meeting.  Directors receive no compensation for meeting attendance.


Board Committees


We do not have an audit, nominating or compensation committee. Due to the small size of the Board of Directors, at this time we do not intend to establish either an audit committee or a compensation committee of our Board of Directors. When we do ultimately establish these committees, we envision that the audit committee will be primarily responsible for reviewing the services performed by our independent auditors and evaluating our accounting policies and our system of internal controls. The compensation committee will be primarily responsible for reviewing and approving our salary and benefits policies (including stock options) and other compensation of our executive officers.  We do not have an audit committee financial expert on our Board because we do not have an audit committee.


Board Structure


Our Board has not chosen to separate the positions of Chief Executive Officer and Chairman of the Board in recognition of the fact that our operations are sufficiently limited that such separation would not serve any useful purpose. Our Chairman and Chief Executive Officer is responsible for setting the strategic direction for our Company and for the day-to-day leadership of our Company, as well as setting the agenda for Board meetings and presiding over meetings of the full Board.


Role of Board in Risk Oversight Process


Management is responsible for the day-to-day management of risk and for identifying our risk exposures and communicating such exposures to our Board. Our Board is responsible for designing, implementing and overseeing our risk management processes. The Board does not have a standing risk management committee, but administers this function directly through the Board as a whole. The whole Board considers strategic risks and opportunities and receives reports from its officers regarding risk oversight in their areas of responsibility as necessary. We believe our Board’s leadership structure facilitates the division of risk management oversight responsibilities and enhances the Board’s efficiency in fulfilling its oversight function with respect to different areas of our business risks and our risk mitigation practices.


Communications with the Board of Directors


Stockholders with questions about the Company are encouraged to contact the Company by sending communications to the attention of the Chief Executive Officer at 13101 Preston Road Suite 510, Dallas Texas 75240.  If stockholders feel that their questions have not been sufficiently addressed through communications with the Chief Executive Officer, they may communicate with the Board of Directors by sending their communications to the Board of Directors, c/o the Chief Executive Officer at the same address.


- 11 -



ITEM 6.  Executive Compensation


SUMMARY COMPENSATION TABLE


The following table sets forth the compensation earned by the Company’s Chief Executive Officer and our Chief Financial Officer for each of the last three fiscal years.  These officers will be responsible for the continuing oversight of the Company as well as the certification of the Company’s financial statements.  The Company does not have any other executive officers who contributed services, were awarded, earned or were paid over $100,000.


Name and principal

position (a)

Period

(b)

Salary

($)(c)

Bonus

($)(d)

Stock

Awards

($)(e)(4)

Option

Awards

($)(f)(5)

All Other

Compensation

($)(i)

Total

($)(j)

Scott N. Beck, Chairman of the Board of Directors, Chief Executive Officer

2014(1)

23,000(6) 

23,000

 

2013(2)

138,417(6) 

138,417

 

2013(3)

250,000

250,000

 

 

 

 

 

 

 

 

V. Chase McCrea III, Chief Financial Officer

2014(1)

165,000

3,000(7)

168,000

 

2013(2)

116,875

41,250(7)

158,125

 

2013(3)

165,000

27,514(7)

192,514


(1)

Amounts in this row are for the year ended December 31, 2014.

 

 

(2)

Amounts in this row are for the eight-month period ended December 31, 2013.

 

 

(3)

Amounts in this row are for the twelve-month period ended April 30 of the respective year

 

 

(4)

The amounts in column (e) reflect the dollar amount recognized for financial statement reporting purposes for the applicable fiscal year, in accordance with ASC Topic 718 (formerly FAS 123[R]) of stock awards granted to each named executive officer, and therefore include amounts from awards granted in and prior to the applicable fiscal year.

 

 

(5)

The amounts in column (f) reflect the dollar amount recognized for financial statement reporting purposes for the applicable fiscal year, in accordance with ASC 718 with respect to outstanding stock options granted to each executive officer, whether granted in that fiscal year or in prior fiscal years.

 

 

(6)

Effective November 1, 2013, Mr. Beck and the Company amended his employment agreement such that his annual base salary was reduced to $18,000; effective January 1, 2014, the Company amended his employment agreement such that his annual base salary was $23,000.

 

 

(7)

This chart reflects the fact that Mr. McCrea’s bonuses have historically been accrued at the end of the reporting period and cash settled immediately subsequent to the end of the reporting period.


Executive Employment Agreements


The Company has no executive employment agreements.  Mr. Beck is employed pursuant to an employment agreement with a subsidiary of CWC, Woodland’s former parent company.  While Mr. Beck will continue to be employed pursuant to his employment agreement at CWC, as one of the larger shareholders in the Company, Mr. Beck’s interests will be closely aligned with the interests of the Company’s other shareholders.  Mr. Beck will contribute his time as necessary, without charge, to the Company, until such time as the Board of Directors deems it necessary to bring in a paid chief executive.  The Company does not believe there are any conflicts of interests with this arrangement.


OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END


None


POTENTIAL PAYMENTS ON TERMINATION OR CHANGE IN CONTROL


None


- 12 -



ITEM 7.  Certain Relationships and Related Transactions and Director Independence


The Company operates at no cost from office space that CWC leases from 13101 Preston Road, LP.   Trusts managed by the control party of the Company’s largest shareholder along with trusts controlled by the family of the Company’s CEO own the building from which the Company currently operates. The lease was originally for five years with minimum future rentals of $31,900 in the next fiscal year, followed by $13,500 in the final year.  CWC paid $15,000 (unaudited), $30,000, $15,000 (unaudited), $20,000 and $106,692 in rent during the six month period ended June 30, 2015, the year ended December 31, 2014, the six month period ended June 30, 2014, the eight-month period ended December 31, 2013 and the fiscal year ended April 30, 2013, respectively.  As of December 31, 2014, CWC also had a $17,500 deposit on the space for this lease.


Policy Regarding Transactions with Related Persons


We do not have a formal, written policy for the review, approval or ratification of transactions between us and any director or executive officer, nominee for director, 5% stockholder or member of the immediate family of any such person that are required to be disclosed under Item 404(a) of Regulation S-K. However, our policy is that any activities, investments or associations of a director or officer that create, or would appear to create, a conflict between the personal interests of such person and our interests must be assessed by our Chief Executive Officer and our Chief Financial Officer and be at arms-length.


ITEM 8.  Legal Proceedings


The Company is occasionally involved in other litigation matters relating to claims arising from the ordinary course of business. The Company’s management believes that there are no claims or actions pending or threatened against the Company, the ultimate disposition of which would have a material adverse effect on our business, results of operations and financial condition.


ITEM 9.  Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters


Market for Common Equity and Related Stockholder Matters


The Company’s common stock is currently not traded as it is wholly owned by one entity, CornerWorld Corporation.   It is anticipated that CWC will spin Woodland Holdings Corporation off in its entirety and CWC’s existing shareholders will receive shares in the Company equal to their pro-rata ownership percentage of CWC.


Subsequent to the effective date of this Registration Statement on Form 10, it is anticipated that the Company’s shares will be traded on the OTC exchange.


Dividends


We have never declared or paid cash dividends on our common stock. We currently anticipate that we will retain all future earnings to fund the operation of our business and do not anticipate paying dividends on our common stock in the foreseeable future.


Penny Stock


The Company’s common stock is subject to provisions of Section 15(g) and Rule 15g-9 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), commonly referred to as the “penny stock rule.” Section 15(g) sets forth certain requirements for transactions in penny stock, and Rule 15g-9(d) incorporates the definition of “penny stock” that is found in Rule 3a51-1 of the Exchange Act. The SEC generally defines a penny stock to be any equity security that has a market price less than $5 per share, subject to certain exceptions. The Company is subject to the SEC’s Penny Stock rules.


Since the Company’s common stock is deemed to be penny stock, trading in the shares is subject to additional sales practice requirements on broker-dealers who sell penny stock to persons other than established customers and accredited investors. “Accredited investors” include persons with assets in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 together with their spouse. For transactions covered by these rules, broker-dealers must make a special suitability determination for the purchase of such security and must have the purchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the first transaction of a risk disclosure document, prepared by the SEC, relating to the penny stock market. A broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements must be sent disclosing recent price information for the penny stocks held in an account and information to the limited market in penny stocks.


- 13 -



Consequently, these rules may restrict the ability of a broker-dealer to trade and/or maintain a market in the Company’s common stock and may affect the ability of the Company’s stockholders to sell their shares.


ITEM 10.  Recent Sales of Unregistered Securities.


None.


ITEM 11.  Description of Registrant’s Securities to be Registered.


The Company’s authorized capital stock consists of 1,000 shares of common stock with a par value of $0.01 per share. As of December 31, 2014, there were 100 shares of common stock issued and outstanding. Immediately after the filing of this Registration Statement on Form 10, the Company anticipates increasing the amount of authorized capital stock to 250,000,000 shares such that it can issue new shares to CWC shareholders as a result of the aforementioned spin-off.


The holders of shares of the Company’s common stock are entitled to one vote per share on matters to be voted upon by the stockholders and are entitled to receive dividends out of funds legally available for distribution when and if declared by our Board.  


The holders of shares of our common stock will share ratably in the Company’s assets legally available for distribution to the stockholders in the event of the Company’s liquidation, dissolution or winding up, after the payment in full of all debts and distributions and after the holders of all series of outstanding preferred stock have received their liquidation preferences in full.


The holders of our common stock have no preemptive, redemption, cumulative voting or conversion rights.  The outstanding shares of our common stock are fully paid and non-assessable.


ITEM 12.  Indemnification of Directors and Officers.


Our Articles of Incorporation contain provisions that indemnify directors and officers of the Company to the full extent permitted by applicable law. These provisions do not limit or eliminate the rights of the company or any stockholder to seek an injunction or any other non-monetary relief in the event of a breach of a director’s or officer’s fiduciary duty. In addition, these provisions apply only to claims against a director or officer arising out of his role as a director or officer and do not relieve a director or officer from liability if he engaged in willful misconduct or a knowing violation of the criminal law or any federal or state securities law.


In addition, the Articles of Incorporation provide for the indemnification of both directors and officers for expenses incurred by them in connection with the defense or settlement of claims asserted against them in their capacities as directors and officers. This right of indemnification extends to judgments or penalties assessed against them. We have limited our exposure to liability for indemnification of directors and officers by purchasing directors and officers liability insurance coverage.


Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, the Company has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.


ITEM 13.  Financial Statements and Supplementary Data


In addition, the Company’s consolidated financial statements and supplementary data are included in pages F-1 through F-13 of this Registration Statement on Form 10.


ITEM 14.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure


Because the Company had never previously been audited as a stand-alone entity, the Company had to conduct a completely new audit of its accounting records.  The Company engaged CWC’s current auditors, Montgomery Coscia and Greilich, LLP (“MCG”) to audit its financial statements, including the Statement of Operations, the Statement of Changes in Stockholders’ Equity and the Statement of Cash Flows for the year ended April 30, 2013.  CWC had previously engaged other auditors to audit these financial statements for its own public filings.


- 14 -



On December 23, 2013, CWC terminated Schumacher and Associates (“Schumacher”) as its independent registered public accounting firm. During the two years prior to its termination, Schumacher’s reports, with respect to CWC, contained no adverse opinions, disclaimer of opinions nor were they qualified or modified as to uncertainty, audit scope, or accounting principles, except that the report contained a modification to the effect that there was substantial doubt as to the Company’s ability to continue as a going concern. The decision to change accountants was approved by CWC’s Chairman of the Board of Directors.


During the two most recent fiscal years prior to CWC’s quarter ended October 31, 2013 and up through the December 23, 2013 termination date, CWC had one disagreement with Schumacher with respect to disclosure of related party transactions that, had it not been resolved to the satisfaction of the former accountant, would have caused it to make reference to the disagreement in the audit report. Specifically, the former accountant required CWC to disclose the exact familial relationship of certain related parties to the Company’s CEO, Scott N. Beck. CWC authorized the former accountant to respond fully to any inquiries of the successor accountant concerning the subject matter of the disagreement. CWC made the disclosures required by the former accountants and the disagreement was resolved to the former accountant’s satisfaction. There were no other disagreements on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.


On December 20, 2013, CWC engaged MCG as its new independent registered public accounting firm. During the previous two year period, the Company did not consult with MCG with respect to any issues nor was there any prior relationship between the Company and MCG.


ITEM 15.  Financial Statements and Exhibits


(a)         The following financial statements are filed as part of this report and incorporated by reference to such financial statements:


Reports of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Stockholders’ Equity (Deficit)

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements


Exhibits:


Exhibit
Numbers

Description

 

 

3.1*

Certificate of Incorporation of Woodland Holdings Corporation dated January 21, 2009.

3.2*

Bylaws of Woodland Holdings Corporation, dated February 23, 2009.

10.1 *

Employment Agreement between CornerWorld Corporation and Scott N. Beck dated August 22, 2008 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q/A, filed July 27, 2010).

10.2**

Telecommunication Services Agreement between T² Communications L.L.C. and S Squared, LLC dated September 30, 2013.

21.1 *

Subsidiaries of Woodland Holdings Corporation.

31.1**

Certification

31.2**

Certification

32.1**

Certification

32.2**

Certification

 

 

*

Previously filed

**

Filed herewith

w

Management plan, compensatory arrangement or employment agreement.


- 15 -



SIGNATURES


Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.



 

Woodland Holdings Corporation

September 29, 2015

 

 

 

By: 

/s/ Scott Beck

 

Scott  Beck

 

Chairman of the Board of Directors and

 

Chief Executive Officer


- 16 -



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Board of Directors

Woodland Holdings Corporation


We have audited the accompanying consolidated balance sheets of Woodland Holdings Corporation as of December 31, 2014 and 2013 and the related consolidated statements of operations, cash flows and stockholders’ equity (deficit) for the year ended December 31, 2014, the eight-month period ended December 31, 2013 and the year ended April 30, 2013. Woodland Holdings Corporation’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.


We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.


In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Woodland Holdings Corporation as of December 31, 2014 and 2013 and the results of their operations and their cash flows for the year ended December 31, 2014, the eight-month period ended December 31, 2013 and the year ended April 30, 2013 in conformity with accounting principles generally accepted in the United States of America.



/s/ MONTGOMERY COSCIA GREILICH, LLP


Dallas, Texas

September 28 , 2015


F-1



Woodland Holdings Corporation

Consolidated Balance Sheets


 

 

June 30, 2015

 

December 31, 2014

 

December 31, 2013

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

Cash

 

$

39,777

 

$

3,021

 

$

8,726

 

Accounts receivable, net

 

 

12,869

 

 

558

 

 

383

 

Prepaid expenses and other current assets

 

 

 

 

40,500

 

 

40,000

 

Assets of discontinued operations held for sale

 

 

 

 

4,788

 

 

43,482

 

Total current assets

 

 

52,646

 

 

48,867

 

 

92,591

 

 

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

 

 

2,677

 

 

13,387

 

Other assets

 

 

 

 

2

 

 

28,001

 

TOTAL ASSETS

 

$

52,646

 

$

51,546

 

$

133,979

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity (Deficit)

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

17,042

 

$

78,180

 

$

94,833

 

Accrued expenses

 

 

 

 

14,790

 

 

 

Lease payable, current portion

 

 

 

 

2,662

 

 

10,704

 

Liabilities of discontinued operations held for sale

 

 

 

 

21,887

 

 

28,414

 

Total current liabilities

 

 

17,042

 

 

117,519

 

 

133,951

 

Long-term liabilities:

 

 

 

 

 

 

 

 

 

 

Lease payable, net of current portion

 

 

 

 

 

 

2,383

 

Total liabilities

 

 

17,042

 

 

117,519

 

 

136,334

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity (deficit):

 

 

 

 

 

 

 

 

 

 

Common stock, $0.01 par value, 1,000 shares authorized; 100 shares issued and outstanding, at June 30, 2015 (unaudited) December 31, 2014 and 2013, respectively

 

 

 

 

 

 

 

Additional paid-in capital

 

 

(12,044,877

)

 

(12,031,976

)

 

(12,015,081

)

Retained earnings

 

 

12,080,481

 

 

11,966,003

 

 

12,012,726

 

Total stockholders’ equity (deficit)

 

 

35,604

 

 

(65,973

)

 

(2,355

)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

$

52,646

 

$

51,546

 

$

133,979

 


The accompanying notes are an integral part of these consolidated financial statements


F-2



Woodland Holdings Corporation

Consolidated Statements of Operations


 

 

Three-month
Period Ended
June 30,

 

Six-month
Period Ended
June 30,

 

For the Year Ended
December 31,

 

Three -month
Period Ended
June 30,

 

Six -month
Period Ended
June 30,

 

Eight-month
Period Ended
December 31,

 

For the Year Ended
April 30,

 

 

 

2015

 

2015

 

2014

 

2014

 

 

2014

 

2013

 

2013

 

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

Sales, net

 

$

12,291

 

$

42,912

 

$

130,282

 

$

22,747

 

$

69,059

 

$

11,850

 

$

1,473

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs of goods sold

 

 

5,166

 

 

11,689

 

 

42,206

 

 

10,445

 

 

26,777

 

 

12,044

 

 

374

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit (loss)

 

 

7,125

 

 

31,223

 

 

88,076

 

 

12,302

 

 

42,282

 

 

(194

)

 

1,099

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

(12,033

)

 

( 68,561

)

 

73,962

 

 

51,647

 

 

76,156

 

 

( 243,825

)

 

15,838

 

Depreciation and amortization

 

 

 

 

907

 

 

10,709

 

 

2,678

 

 

5,355

 

 

7,140

 

 

10,709

 

Total operating expenses

 

 

(12,033

)

 

( 67,654

)

 

84,671

 

 

54.325

 

 

81,511

 

 

( 236,685

)

 

26,547

 

Operating income (loss)

 

 

19,158

 

 

98,877

 

 

3,405

 

 

( 42,023

)

 

( 39,229

)

 

236,491

 

 

( 25,448

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense), net

 

 

 

 

(176

)

 

 

 

 

 

 

 

(248,159

)

 

 

Total other expense, net

 

 

 

 

(176

)

 

 

 

 

 

 

 

(248,159

)

 

 

Income (loss) before income taxes

 

 

19,158

 

 

98,701

 

 

3,405

 

 

( 42,023

)

 

( 39,229

)

 

( 11,668

)

 

( 25,448

)

Income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss)  from continuing operations

 

 

19,158

 

 

98,701

 

 

3,405

 

 

( 42,023

)

 

( 39,229

)

 

( 11,668

)

 

( 25,448

)

Income from discontinued operations, net of tax

 

 

 

 

15,777

 

 

(50,128

)

 

(5,928

)

 

(17,855

)

 

447,457

 

 

1,376,097

 

Gain from disposal of discontinued operations, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

2,544,258

 

 

 

Net income (loss)

 

$

19,158

 

$

114,478

 

$

(46,723

)

$

(47,951

)

$

(57,084

)

$

2,980,047

 

$

1,350,649

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings (loss) per share from continuing operations

 

$

191.58

 

$

987.01

 

$

34.05

 

$

( 420,23

)

$

( 392.29

)

$

( 116.68

)

$

( 254.48

)

Basic and diluted earnings per share from discontinued operations

 

$

 

$

157.77

 

$

(501.28

)

$

(59.28

)

$

(178.55

)

$

29,917.15

 

$

13,760.97

 

Basic and diluted earnings (loss) per share

 

$

191.58

 

$

1,144.78

 

$

(467.23

)

$

(479.51

)

$

(570.84

)

$

29,800.47

 

$

13,506.49

 

Basic and diluted weighted average number shares outstanding

 

 

100

 

 

100

 

 

100

 

 

100

 

 

100

 

 

100

 

 

100

 


The accompanying notes are an integral part of these consolidated financial statements


F-3



Woodland Holdings Corporation

Consolidated Statements of Stockholders’ Equity (Deficit)


 

 

Common Shares

 

Additional
Paid-in

 

Retained

 

Total
Stockholders’

 

 

 

Shares

 

Amount

 

Capital

 

Earnings

 

Equity (Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, May 1, 2012

 

 

100

 

$

 

$

(5,661,040

)

$

7,682,030

 

$

2,020,990

 

Return of capital to shareholder

 

 

 

 

 

 

(1,898,204

)

 

 

 

(1,898,204

)

Net income

 

 

 

 

 

 

 

 

1,350,649

 

 

1,350,649

 

Balance, April 30, 2013

 

 

100

 

$

 

$

(7,559,244

)

$

9,032,679

 

$

1,473,435

 

Return of capital to shareholder

 

 

 

 

 

 

(4,455,837

)

 

 

 

(4,455,837

)

Net income

 

 

 

 

 

 

 

 

2,980,047

 

 

2,980,047

 

Balance, December 31, 2013

 

 

100

 

$

 

$

(12,015,081

)

$

12,012,726

 

$

(2,355

)

Return of capital to shareholder

 

 

 

 

 

 

(16,895

)

 

 

 

(16,895

)

Net loss

 

 

 

 

 

 

 

 

(46,723

)

 

(46,723

)

Balance, December 31, 2014

 

 

100

 

$

 

$

(12,031,976

)

$

11,966,003

 

$

(65,973

)

Return of capital to shareholder

 

 

 

 

 

 

(12,901

)

 

 

 

(12,901

)

Net income

 

 

 

 

 

 

 

 

114,478

 

 

114,478

 

Balance, June 30, 2015 (unaudited)

 

 

100

 

$

 

$

(12,044,877

)

$

12,080,481

 

$

35,604

 


The accompanying notes are an integral part of these consolidated financial statements


F-4



Woodland Holdings Corporation

Consolidated Statements of Cash Flows


 

 

For the
Six-month
Period Ended
June 30,

 

For the
Year Ended
December 31,

 

For the
Six-month
Period Ended
June 30,

 

For the
Eight-month
Period Ended
December 31,

 

For the
Year Ended
April 30,

 

 

 

2015

 

2014

 

2014

 

2013

 

2013

 

 

 

(unaudited)

 

 

 

(unaudited)

 

 

 

 

 

Cash Flows from Operating Activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

114,478

 

$

(46,723

)

$

(57,084

)

$

2,980,047

 

$

1,350,649

 

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

907

 

 

10,709

 

 

5,355

 

 

7,140

 

 

10,709

 

Provision for doubtful accounts

 

 

11,218

 

 

78,137

 

 

37,453

 

 

375

 

 

1,877

 

Changes in operating assets and liabilities, net of acquisitions and divestitures:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

( 23,529

)

 

( 78,312

)

 

( 41,669

)

 

466

 

 

( 3,101

)

Prepaid expenses and other current assets

 

 

40,500

 

 

(500

)

 

 

 

( 40,000

)

 

 

Other assets

 

 

2

 

 

27,999

 

 

1

 

 

(1

)

 

602

 

Accounts payable

 

 

( 61,138

)

 

( 16,653

)

 

17,825

 

 

44,320

 

 

50,513

 

Accrued expenses

 

 

( 14,790

)

 

14,790

 

 

 

 

 

 

 

Changes in assets and liabilities of discontinued operations

 

 

(17,099

)

 

32,167

 

 

41,672

 

 

( 1,978,594

)

 

1,947,688

 

Net cash provided by (used in) operating activities

 

 

50,549

 

 

21,614

 

 

3,553

 

 

1,013,753

 

 

3,358,937

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from the sale of subsidiary

 

 

 

 

 

 

 

 

8,300,000

 

 

 

Fixed assets acquired pursuant to capital lease

 

 

 

 

(2,639

)

 

(2,597

)

 

 

 

( 9,848

)

Net cash provided by (used in) investing activities

 

 

 

 

(2,639

)

 

(2,597

)

 

8,300,000

 

 

( 9,848

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financing fees

 

 

 

 

 

 

 

 

(249,000

)

 

 

Principal payments on debt

 

 

 

 

 

 

 

 

(4,775,000

)

 

(1,160,000

)

Settlement of warrant

 

 

 

 

 

 

 

 

(929,017

)

 

 

Return of capital to shareholder

 

 

(12,901

)

 

(16,895

)

 

(4,479

)

 

(4,455,837

)

 

(1,898,204

)

Payments on capital lease

 

 

(892

)

 

(7,785

)

 

(2,571

)

 

(6,755

)

 

 

Net cash provided by (used in) financing activities

 

 

(13,793

)

 

(24,680

)

 

(7,050

)

 

(10,415,609

)

 

(3,058,204

)

Net increase (decrease) in cash

 

 

36,756

 

 

(5,705

)

 

(6,094

)

 

(1,101,856

)

 

290,885

 

Cash at beginning of period

 

 

3,021

 

 

8,726

 

 

8,726

 

 

1,110,582

 

 

819,697

 

Cash at end of period

 

$

39,777

 

$

3,021

 

$

2,632

 

$

8,726

 

$

1,110,582

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid for:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

$

 

$

 

$

 

$

270,993

 

$

794,531

 

Income taxes

 

$

 

$

 

$

 

$

 

$

 

Non-Cash Financing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition of fixed assets pursuant to capital lease

 

$

 

$

 

$

 

$

 

$

 


The accompanying notes are an integral part of these consolidated financial statements


F-5



Woodland Holdings Corporation

Notes to Consolidated Financial Statements

December 31, 2014


1. Basis of Presentation


Organization


Woodland Holdings Corporation (“the Company”, “Woodland”, “we”, “our” or “us”) was incorporated in the State of Delaware, on January 21, 2009.


The Company is a holding company with three telecommunications services companies as subsidiaries.  The Company’s subsidiaries, as explained in more detail below, seek to take advantage of opportunities created from the increased accessibility of content across mobile, television and internet platforms.


Spinoff


The Company was originally a wholly owned subsidiary of CornerWorld Corporation (“CWC”), a Nevada corporation publicly traded on the OTCQB exchange.   CWC’s Board of Directors determined that the Company’s ability to access capital markets would be increased if its core focus is solely on telecommunications services.  Accordingly, the Company is being spun off from its parent company, CWC, and CWC’s other wholly owned subsidiaries.


Operations


The Company provides telephony and internet services through its wholly owned subsidiaries Phone Services and More, L.L.C., doing business as Visitatel (“PSM”) and T2 Communications, L.L.C. (“T2”).  As a provider of Internet and voice over Internet protocol (“VoIP”) services, T2 delivers traditional telecommunications services via VoIP to business customers in Texas. Offerings include: phone lines, internet connections, long distance and toll-free services. T2 is a Competitive Local Exchange Carrier (CLEC) that generates revenues via the sale of long-distance minutes to its wholesale carrier customers and the provision of dial-tone to its end users for a monthly fee. T2 also generates commissions from its carrier partners related to the provision of long-distance minutes to its customers.  PSM, also a CLEC, is a wholesale long distance service provider to the carrier community and large commercial users of minutes.  PSM generates revenues via earning commissions from serving as a broker for services provided by T2.   T2 and PSM’s CLEC licenses permit them to operate in the lucrative telecommunications industry but their respective business models do not require any significant investments in property plant and equipment due to the fact that they are able to outsource all switching and technology needs to third party providers.    T2 and PSM’s businesses could be adversely impacted should these third party providers change the rates they charge to T2 and PSM or if they ceased operations requiring T2 and PSM to locate other providers.


Woodland was the previous owner of S Squared, LLC, doing business in the state of Texas as Ranger Wireless Solutions, LLC (“Ranger”) whose key asset was the patented 611 Roaming ServiceTM from RANGER Wireless Solutions®, which generated revenue by processing approximately 10.2 million calls from roaming wireless customers per year and seamlessly connecting them to their service provider.  The Company divested Ranger on September 30, 2013 and its operating results have been reported as discontinued operations in these financial statements.  See Note 3, Discontinued Operations, for more information with respect to the sale of Ranger.


TinyDial, LLC (“TinyDial”) was previously a wholly-owned subsidiary of CWC.  CWC will contribute 100% of its ownership of TinyDial stock to the Company effective September 30, 2015 for no consideration as TinyDial has no accounts, no operations and no customers.  TinyDial holds a telecommunications patent and is a development stage company whose core focus is enabling its users to conduct unlimited free conference calls, direct dialing via the use of short codes, instant messaging and contact management, among other mobile telecommunications services.   As of the date of this filing, the buildout of TinyDial has been completed and the application is available in both the iPhone and Android app stores.  TinyDial is a mobile telecommunications application that is free to its users.  It is anticipated that it will ultimately generate revenues based on a minutes of use (“MOU”) model whereby, as its users make conference calls, they generate MOU’s which TinyDial can then bill to its carrier partners.  At this time, the Company does not have future research and development plans related to TinyDial nor does it plan on allocating further resources on the TinyDial mobile application or patent.


The Company previously provided telecommunications services through its Woodland Wireless Solutions, Ltd. (“WWS”), West Michigan Co-Location Services, L.L.C. (“WMCLS”) and T2 TV, L.L.C. (“T2TV”).  The Company ceased operations in its WWS, WMCLS and T2TV subsidiaries during the fiscal year ended April 30, 2013. Their operating results have been reported as discontinued operations in these consolidated financial statements.


F-6



Woodland Holdings Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2014


Change in Fiscal Year


The Company’s year-end is December 31.  On April 29, 2014, the Company announced that it was changing its fiscal year end from April 30 to December 31.  Accordingly, this Registration Statement on Form 10 details the Company’s accounts as of June 30, 2015 (unaudited), December 31, 2014 and 2013 and its results of operations, cash flow and stockholders’ equity (deficit) for the three and six month periods ended June 30, 2015 (unaudited), the year ended December 31, 2014, the three months and six month periods ended June 30, 2014 (unaudited), the eight-month period ended December 31, 2013 and the year ended April 30, 2013.  As it has done so since January 1, 2014, the Company will continue to report its accounts on a more standard calendar reporting basis filing quarterly reports as of March 31, June 30 and September 30 each year and an annual report as of December 31 of each future year.  See Note 10, Transition Period Data (unaudited), for more information with respect to our change in fiscal year end.


2. Summary of Significant Accounting Policies


This summary of significant accounting policies is presented to assist in understanding the Company’s consolidated financial statements. The consolidated financial statements and notes are representations of the Company’s management who is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles (“GAAP”) in the United States of America and have been consistently applied in the preparation of the consolidated financial statements. The consolidated financial statements are stated in United States of America dollars.


Receivables


Accounts receivable include uncollateralized customer obligations due under normal trade terms requiring payment within 30-60 days from invoice date. Payments of accounts receivable are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, are applied to the earliest unpaid invoices.


The carrying amount of accounts receivable is reduced by a valuation allowance for doubtful accounts that reflects management’s best estimate of the amounts that will not be collected based on historical collection trends. The allowance for doubtful accounts was $31,830 (unaudited), $79,440 and $2,261 as of June 30, 2015, December 31, 2014 and 2013, respectively.


Fair Value of Financial Instruments


ASC No. 850 requires disclosure of fair value information about financial instruments when it is practicable to estimate that value. The carrying amount of the Company’s cash and cash equivalents, accounts receivable, accounts receivable-related party, accounts payable, accounts payable-related party and accrued liabilities approximate their estimated fair values due to their short-term maturities. Notes payable are carried at their face value net of their issuance costs which management believes is a reasonable approximation for their fair value. Warrants with put features are carried at their minimum cash put value discounted for the time value of money. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these consolidated financial statements.


Income Taxes


The Company accounts for income taxes in accordance with ASC No. 740 which requires the use of the asset and liability method of accounting of income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. 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.


Basic and Diluted Earnings (Loss) Per Share


In accordance with ASC 260, basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings (loss) per share, if any, is computed similar to basic earnings (loss) per share except that the denominator is adjusted for the potential dilution that could occur if stock options, warrants, and other convertible securities were exercised or converted into common stock.  The Company had no dilutive securities outstanding at any reporting period.


F-7



Woodland Holdings Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2014


Revenue Recognition


The Company recognizes revenue in accordance with Staff Accounting Bulletin (“SAB”) No. 101, “Revenue Recognition in Financial Statements,” as revised by SAB 104. As such, the Company recognizes gross revenue when persuasive evidence of an arrangement exists, the price is fixed or readily determinable and collectability is probable. The Company does not provide sales discounts to its customers.  For PSM and T2, the revenue is derived service contracts for the phone and internet services used by each customer or via the carrier access billing derived from customer minutes being processed through T2’s  outsourced providers. Revenue is recognized as the services are provided.


Use of Estimates


The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results could differ from those estimates.


Cash and Cash Equivalents


The Company considers all highly liquid debt instruments with an original maturity of three (3) months or less to be cash equivalents.


Property and Equipment


Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method as follows:

Computer equipment

3 years

Office furniture

5 years

Computer software packages

3 years

Capitalized software development

3 years

Leasehold improvements

3 years


Expenditures for maintenance and repairs which do not materially extend the useful lives of property and equipment are charged to operations. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations. Management periodically reviews the carrying value of its property and equipment for impairment. The property and equipment had not incurred any impairment loss at June 30, 2015 (unaudited) and December 31, 2014.


Long-Lived Assets


The Company accounts for its long-lived assets in accordance with ASC 360. The Company’s primary long-lived assets are property and equipment. ASC 360 requires a company to assess the recoverability of its long-lived assets whenever events and circumstances indicate the carrying value of an asset or asset group may not be recoverable from estimated future cash flows expected to result from its use and eventual disposition. Management reviews its long-lived assets annually and does not believe its fixed assets are impaired.  


Return of Capital to Shareholder


The Company has never declared or paid dividends of any type. As a wholly-owned subsidiary of CWC, however, the Company contributed to CWC’s operations in the form of cash moved to its former parent in the form of inter-company transactions. On the statement of changes in stockholders’ equity, “Return of Capital to Shareholder” represents cash payments made to CWC by the Company in the form of inter-company transfers.


Warrants


As part of the re-financing of the original Ranger acquisition, CWC issued certain warrants (the “Warrants”) which could be put to CWC in exchange for cash.  The Warrants could be exercised in exchange for CWC common stock but were accounted for


F-8



Woodland Holdings Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2014


as a liability of Company, not equity, due the fact that the put feature constituted a liability under the ASC and because the Warrants were secured by all the assets of the Company.  Consistent with the accounting treatment of being recorded as a liability, the Warrants were settled, in their entirety, for cash on September 30, 2013 when Ranger was sold.


Principles of Consolidation


The accompanying consolidated financial statements include the accounts of Woodland Holdings Corporation, its wholly owned subsidiaries and entities determined to meet the definition of Variable Interest Entities. All significant intercompany transactions and balances have been eliminated in consolidation.


Concentrations of Cash and Cash Equivalents


Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Federal Deposit Insurance Corporation (FDIC) currently insures accounts at each institution for up to $250,000. At times, cash balances may exceed the FDIC insurance limit of $250,000. At June 30, 2015 (unaudited), December 31, 2014 and 2013 the Company had no concentrations that were in excess of that which is insured by the FDIC.


Recent Accounting Pronouncements


There were various accounting standards and interpretations issued during the six months ended June 30, 2015 (unaudited) and the year ended December 31, 2014, none of which are expected to have a material impact on the Company’s consolidated financial position, operations, or cash flows.


Issuance of Stock for Non-Cash Consideration


There were no issuances of the Company’s stock for non-cash consideration.


Reclassifications


Certain prior year accounts have been reclassified to conform to the current year’s presentation.


3.  Discontinued Operations


T2 Communications, LLC


We completed the sale of T2’s Michigan operations on March 31, 2015 for $15,000; we recognized no gain on the sale. T2’s Michigan operations have been reclassified as discontinued operations for its operations up to the date of sale for the six month period ended June 30, 2015 (unaudited), the year ended December 31, 2014, the six month period ended June 30, 2014 (unaudited), the eight-month period ended December 31, 2013 and the fiscal year ended April 30, 2013.   The following is a summary of the operating results of T2’s discontinued operations.


 

 

For the
Six months
Ended
June 30, 2015

 

For the
Year Ended
December 31, 2014

 

For the
Six months
Ended
June 30, 2014

 

For the
Eight-month
Period Ended
December 31, 2013

 

For the
Year Ended
April 30, 2013

 

 

 

(unaudited)

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

Sales, net

 

$

39,185

 

$

113,873

 

$

49,615

 

$

69,348

 

$

174,770

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations before income taxes

 

 

(15,777

)

 

(50,128

)

 

17,855

 

 

(151,219

)

 

(385,491

)

Income taxes

 

 

 

 

 

 

 

 

 

 

 

Net income from discontinued operations

 

$

(15,777

)

$

(50,128

)

$

17,855

 

$

151,219

 

$

(385,491

)


F-9



Woodland Holdings Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2014


The following table represents T2, discontinued assets and liabilities as of:


 

 

June 30, 2015

 

December 31, 2014

 

December 31, 2013

 

April 30, 2013

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

Assets, net

 

$

 

$

4,788

 

$

43,482

 

$

12,897

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities, net

 

 

$

21,887

 

$

28,414

 

26,900

 


S Squared LLC DBA Ranger Wireless Solutions, LLC


We completed the sale of our Ranger business on September 30, 2013 for $7.5 million in cash plus a contingent receivable for $800,000 which we collected in November 2013; we recognized a gain of $2,788,543 on the sale, net of tax. The decision to sell Ranger allowed us to retire substantially all of our secured debt, including debt with loan covenants for which we were previously not in compliance. Our Ranger operations have been reclassified as discontinued operations for its operations up to the date of sale for the eight-month period ended December 31, 2013 and the fiscal year ended April 30, 2013. In addition, all secured debt retired as a result of the divestiture have been reclassified as discontinued operations and interest plus loan discounts from all secured debt directly paid off as a result of the divestiture of Ranger, was allocated to discontinued operations for all periods presented. Finally, the Company’s patent and all of its goodwill, as of April 30, 2013 were part of the assets divested while all revenues related to the Company’s customer concentrations as of December 31, 2013 and April 30, 2013 were also part of the discontinued operations.


The following is a summary of the operating results of Ranger’s discontinued operations:


 

 

For the
Six months
Ended
June 30, 2015

 

For the
Year Ended
December 31, 2014

 

For the
Eight-month
Period Ended
December 31, 2013

 

For the
Year Ended
April 30, 2013

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

Sales, net

 

$

 

$

 

$

2,014,095

 

$

5,256,108

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from discontinued operations before income taxes

 

 

 

 

 

 

598,676

 

 

1,761,588

 

Income taxes

 

 

 

 

 

 

 

 

 

Net income from discontinued operations

 

$

 

$

 

$

598,676

 

$

1,761,588

 


There were no assets and liabilities held for sale , related to Ranger, as of June 30, 2015 (unaudited), December 31, 2014 and 2013.


4. Property and Equipment


Property and equipment is summarized as follows:


 

 

June 30,

 

December 31,

 

 

 

2015

 

2014

 

2013

 

 

 

(unaudited)

 

 

 

 

 

 

 

Computer equipment

 

$

32,128

 

32,128

 

$

32,128

 

Total

 

 

32,128

 

 

32,128

 

 

32,128

 

Less: accumulated depreciation

 

 

( 32,128

)

 

( 29,451

)

 

( 18,741

)

Property and equipment, net

 

$

 

$

2,677

 

$

13,387

 


Depreciation expense for property and equipment for the six months ended June 30, 2015 (unaudited), the year ended December 31, 2014, the six months ended June 30, 2014 (unaudited), the eight-month period ended December 31, 2013 and the year ended April 30, 2013 was $907 (unaudited), $10,709, $5,355 (unaudited), $ 7,140 and $ 10,709 , respectively.


F-10



Woodland Holdings Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2014


5. Leases


The Company also has a capital lease on telecom equipment.  The lease expires on March 1, 2015 and the Company makes monthly payments of $892 pursuant to the terms of this lease.


Future minimum lease payments under non-cancelable leases are as follows:


As of December 31, 2014

 

 

2015

$

2,662

Total lease payments

$

2,662


The Company made the final payment on this capital lease during the quarter ended March 31, 2015.


6. Equity

Common Stock


The Company’s authorized common stock consists of 1,000 shares with a par value of $0.01 per share. As of June 30, 2015 (unaudited) and December 31, 2014, 100 shares of common stock were issued and outstanding and they were completely owned by CWC.


7. Commitments and Contingencies

Litigation


From time to time, the Company is involved in litigation matters relating to claims arising from the ordinary course of business. While the results of such claims and legal actions cannot be predicted with certainty, the Company’s management does not believe that there are claims or actions, pending or threatened against the Company, the ultimate disposition of which would have a material adverse effect on our business, results of operations, financial condition or cash flows.


8. Related Party Transactions


The Company operates at no cost from office space that CWC leases. Trusts managed by the control party of the Company’s largest shareholder along with trusts controlled by the family of the Company’s CEO own the building from which the Company currently operates. The lease was originally for five years with minimum future rentals of $31,900 in the next fiscal year, followed by $13,500 in the final year.  CWC paid $15,000 (unaudited), $30,000, $15,000 (unaudited), $20,000 and $106,692 in rent during the six month period ended June 30, 2015, the year ended December 31, 2014, the six month period ended June 30, 2014, the eight-month period ended December 31, 2013 and the fiscal year ended April 30, 2013, respectively.  As of June 30, 2015 and December 31, 2014, CWC had a $2,500 (unaudited) and $17,500 deposit on the space for this lease, respectively.


9. Income Taxes


The Company accounts for income taxes in accordance with ASC 740. Due to continued losses from operations, since the inception of the Company, no provision for income taxes has been made in these consolidated financial statements.  The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes consists of the following:

 

Year Ended
December 31, 2014

 

Eight-month
Period Ended
December 31, 2013

 

Federal statutory rate

34.00%

 

34.00%

 

Effect of:

 

 

 

 

Valuation allowance

(34.00%

)

(34.00%

)

Effective income tax rate

—%

 

—%

 


The Company is in the process of completing its federal income tax return and does not expect to have an income tax liability due to continued losses from operations.  


F-11



Woodland Holdings Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2014


10. Transition Period Comparative Data


The following tables present certain financial information for the years ended December 31, 2014 and 2013:


 

 

Year Ended December 31,

 

 

 

2014

 

2013

 

 

 

 

 

 

(unaudited)

 

Sales, net

 

$

130,282

 

$

12,509

 

Costs of goods sold

 

 

42,206

 

 

12,044

 

Gross profit

 

 

88,076

 

 

465

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

84,671

 

 

(233,116

)

Operating income ( loss )

 

 

3,405

 

 

233,581

 

 

 

 

 

 

 

 

 

Other income (expense), net

 

 

 

 

(248, 190

)

Income taxes

 

 

 

 

 

Income ( loss ) from continuing operations

 

 

3,405

 

 

( 14,609

)

Income (loss) from discontinued operations, net of tax

 

 

(50,128

)

 

725,106

 

Gain from disposal of discontinued operations, net of tax

 

 

 

 

2,544,258

 

Net income (loss)

 

$

(46,723

)

$

3,254, 755

 

 

 

 

 

 

 

 

 

Basic and diluted earnings (loss) per share from continuing operations

 

$

34,05

 

$

( 146.09

)

Basic and diluted earnings per share from discontinued operations

 

$

(501.28

)

$

32,693.64

 

Basic and diluted earnings (loss) per share

 

$

(467.23

)

$

32 ,547.55

 

Basic and diluted weighted average number shares outstanding

 

 

100

 

 

100

 


The following table presents certain financial information for the eight-month periods ended December 31, 2013 and 2012:


 

 

Eight-month Period Ended December 31,

 

 

 

2013

 

2012

 

 

 

 

 

 

(unaudited)

 

Sales, net

 

$

11,850

 

$

2,830

 

Costs of goods sold

 

 

12,044

 

 

318

 

Gross profit (loss)

 

 

(194

)

 

2,512

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

236,685

 

 

33,435

 

Operating income (loss)

 

 

236,491

 

 

( 30,923

)

 

 

 

 

 

 

 

 

Other income (expense), net

 

 

(248,159

)

 

 

Income taxes

 

 

 

 

 

Loss from continuing operations

 

 

( 11,668

)

 

( 30,923

)

Income from discontinued operations, net of tax

 

 

447,457

 

 

1,106,746

 

Gain from disposal of discontinued operations, net of tax

 

 

2,544,258

 

 

 

Net income

 

$

2,980,047

 

$

1,075,823

 

 

 

 

 

 

 

 

 

Basic and diluted earnings (loss) per share from continuing operations

 

$

( 116.68

)

$

( 309.23

)

Basic and diluted earnings per share from discontinued operations

 

$

29,917.15

 

$

11,067.46

 

Basic and diluted earnings (loss) per share

 

$

29,800.47

 

$

10,758.23

 

Basic weighted average number shares outstanding

 

 

100

 

 

100

 


F-12



Woodland Holdings Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2014


11. Subsequent Events


On August 13, 2015 CWC’s Board of Directors unanimously approved the spin-off 100% of Woodland, along with its wholly owned subsidiaries, to become effective as of September 30, 2015 (the “Record Date”). For each share owned by CWC shareholders as of the Record Date, CWC shareholders will be entitled to receive one share of Woodland.


F-13


EX-10 2 ex_10-2.htm TELECOMMUNICATION SERVICES AGREEMENT

Exhibit 10.2


TELECOMMUNICATION SERVICES AGREEMENT


This Telecommunication Services Agreement (the “Agreement”) is executed on this 30 day of September, 2013 (the “Effective Date”) by and between T² Communications L.L.C., (“”) having offices at 13101 Preston Rd, Suite 510, Dallas TX 75240 and S Squared, LLC, an Illinois limited liability company (“Customer”).


RECITALS


WHEREAS, T² is a Competitive Local Exchange Carrier (“CLEC”) and reseller of telecommunications services;


WHEREAS, Customer desires to purchase telecommunications services from T²;


WHEREAS, Customer and certain affiliates of T² are party to that certain Membership Interests Purchase Agreement dated as of September 30, 2013 (the “Purchase Agreement”) and to that certain Transition Services Agreement dated as of September   30, 2013 (the “TSA”); and


WHEREAS, T² and Customer (each a “Party” and collectively, the “Parties”) desire to enter into this Agreement for the provision of local telephone, long distance telephone and hosting services, as set forth on Exhibit A  (collectively, the “Services”).


NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby mutually agree as follows:


 

1.

Services: T² will provide, and Customer will purchase, the Services set forth on Exhibit A, as may be amended from time to time on mutual agreement of the Parties, during the Term.  T² agrees to acquire services necessary to provide the Services from third party service providers (“Service Providers”) and to provide all Services to Customer.  T² shall ensure that, to the extent technologically achievable, all Service Providers (a) provide Services directly to Customer’s colocation rack and (b) minimize any direct connection between T2’s equipment and Customer’s equipment. For the avoidance of doubt, all parties expressly understand and agree that all telecommunications services, including trunks from underlying Service Providers, shall first pass through T²’s equipment. T² shall ensure to the extent achievable that Customer is a party to all agreements with Service Providers providing Services to Customer.  T² shall manage all contractual relationships with such Service Providers; provided, however, that T² shall not enter into any agreement with a Service Provider to procure products or services to be provided to Customer (each a “Service Provider Agreement”) without: (i) giving Customer a reasonable amount of time to review such Service Provider Agreement and provide T² with comments for T²’s consideration in negotiating such Service Provider Agreement; and (ii) first obtaining Customer’s written approval.  Such Service Provider Agreement shall include, without limitation, agreements having provisions relating to service levels, performance obligations, and warranties for the Services.  Such Service Provider Agreement shall provide that any notice from the Service Provider of breach or default by T², including without limitation, any notification of a late payment, be provided to Customer at least 30 days prior to any right of the Service Provider to terminate the Service Provider Agreement and that: (i) Customer shall have the right to cure any nonpayment or default of T² to avoid such termination (which shall be recoverable from T² hereunder); and (ii) after such default (in addition to the remedies of Customer hereunder), the rights of T² under the Service Provider Agreement will be assigned to Customer solely with respect to the portion of Services used by Customer and the rights of T² under the Service Provider Agreement with respect to the portion of the Services used by T² shall immediately terminate.  Customer shall have no obligation to procure any services through T² other than the Services.   The Service Provider Agreement for inbound traffic will initially be XO Communications, as detailed in Exhibit B but will ultimately change to Sprint as detailed in Exhibit C.  The Service Provider Agreement for outbound long distance and 800 numbers will be Hypercube as indicated in Exhibit D.  Customer shall not unreasonably refuse T²’s written request for access to a call data record (a “CDR”) to the extent that such request sets forth a reasonable basis for T2’s need to access such CDR.  The rates charged by T² to Customer will be pass-through rates (the “Pass-Through Rates”).  For the avoidance of doubt, the Pass-Through Rates shall include the best rates, surcharges, billing/rounding increments, or any other cost that T² is charged as a competitive local exchange carrier or otherwise from the Service Providers.  Should T² be restricted by a Service Provider from providing the Pass-Through Rates for any reason, T² shall, on the following billing cycle, provide a rebate to the Customer of the rate charged the Customer versus the rate T² would have been charged by the Service Provider had T² been the Customer (the “Wholesale Rates”).  It is expressly agreed to by both parties that T² shall at no time be in a position that it is losing money on pass-through costs.


Page 1 of 7



 

2.

Payment Obligations: Upon making payment to a Service Provider for the Services, T² shall provide Customer with an invoice indicating that T² has made such a payment along with documentation evidencing the amount of such payment and the date on which such payment was actually made.  Within 5 business days of receiving such invoice, Customer shall pay the documented amount charged by the Service Provider to T² that is set forth in the invoice.  To the extent technologically achievable, T² shall ensure and contractually require that the Service Provider provide Customer with a copy of any invoice provided to T² at the same time at which such invoice is provided to T².  Notwithstanding the foregoing, T² shall ensure that the Service Provider provides Customer with separate usage and billing statements with respect to the Services utilized by Customer, which shall be separated and distinguished from usage and billing of any services utilized directly by T² or by other customers of T².  To the extent separate usage and billing statements with respect to the Services utilized by Customer are not technologically achievable from a particular Service Provider despite the best efforts of T2, the Parties will engage a mutually agreed upon third party (the “Billing Vendor”) to create separate usage and billing statements for T² and the Customer.  The cost of such Billing Vendor shall be split evenly amongst the Parties.  Should T² obtain other customers that utilize the Billing Vendor, the costs of the Billing Vendor will be split pro-ratably. For the avoidance of doubt, T² shall have no right to mark-up or inflate any fees charged by a Service Provider with respect to any Services utilized by Customer and T² shall have no right to charge Customer any expenses of T² or impose any additional service, handling, management, or other fee on Customer.  However, to the extent that Customer requires T² personnel to provide services, T² will charge and Customer will be obligated to pay, fees for such services consistent with industry standards. For avoidance of doubt, Customer shall not be charged under this Agreement for any services to be provided by T2 under the TSA including, without limitation, any services provided by Robert Reynolds, Gerardo Tonini, or Tim Zeller.

 

 

 

 

3.

Term: The term of this Agreement shall commence on the Effective Date and shall continue until the 3rd anniversary of this Agreement (the “Term”).

 

 

 

 

4.

Termination by Customer: Customer shall have the option in its discretion to terminate this Agreement upon written notice to T² if T² defaults on any obligation (including without limitation a payment obligation) set forth in the Purchase Agreement, TSA, or a Service Provider Agreement.  In the event of such termination, T² shall make best efforts to immediately assign its rights to Customer under all Service Provider Agreements to the extent necessary for Customer to obtain the Services from Service Providers.

 

 

 

 

5.

Provision of Services:  In the event that T² is unable to continue as a going concern, within 90 days of such notice, Customer shall have the option to purchase all or any portion of the business of T² for an aggregate cash purchase price of $1 (the “Purchase”). Customer shall have the option, in its sole discretion, to structure the Purchase as a purchase of either the equity securities of T² or a purchase of all of the assets of T² necessary for, and used in, the provision of the Services hereunder, including all necessary licenses (including without limitation, the CLEC License utilized in the provision of Services), permits and other intangible rights and privileges (the “Business Assets”), or the equity securities or assets of such other related or successor entity then holding the Business Assets.

 

 

 

 

6.

Moves and Disconnection of Service: To disconnect Services, Customer must inform T² in writing of Customer’s desired disconnect date, by letter addressed to Customer Services, T² Communications, 13101 Preston Road, Suite 510, Dallas, Texas 75240. If Customer desires to move Services to another location, Customer shall provide T² at least 45 days’ notice by calling (888) 837-3910. If T² is unable to provide Services at the new location, then Customer may terminate this Agreement. It is expressly understood that Customer may not re-locate the business or equipment from the XO Colocation facility during the term of this contract.

 

 

 

 

7.

Assignment: Neither Party shall have the right to, and each Party covenants that it will not, assign this Agreement without the prior written consent of the other Party, which will not be unreasonably withheld.  This Agreement may not be involuntarily assigned or assigned by operation of law.  The foregoing notwithstanding, both Parties shall have the right to assign this Agreement, without the consent of the other Party, to any affiliate, any entity which results from a merger or consolidation with such Party, or any person or entity which acquires all or substantially all the assets of such Party related to this Agreement, provided the assigning Party gives notice of such assignment and such person or entity assumes all the obligations of the other Party under this Agreement.  Any assignment, delegation or transfer, or attempt at the same, in violation of the foregoing shall be void and without effect.


Page 2 of 7



 

8.

Representations, Warranties, and Covenants:   T² represents and warrants that it has good standing with any and all Service Providers whose products or services will be used to provide the Services and that it will maintain such good standing throughout the Term, as evidenced by T²’s compliance with the terms and provisions of all Service Provider Agreements and prompt payment of any fees due thereunder.  T² covenants that it will not breach any Service Provider Agreement, and that it will timely pay all fees due to Service Providers in connection with the Service Provider Agreements.  T² shall ensure that Customer is given the benefit of all performance warranties and remedies provided to T² under any Service Provider Agreement. Promptly following the Effective Date, the Parties’ mutually agree to develop and finalize a disaster recovery plan with respect to the Services provided hereunder to be implemented by the Parties’ within 90 days of the Effective Date.

 

 

 

 

9.

Limitation of Liability: EXCEPT WITH RESPECT TO A PARTY’S INDEMNIFICATION OBLIGATIONS, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR INDIRECT, SPECIAL CONSEQUENTIAL, OR PUNITIVE DAMAGES OR LOST PROFITS OR REVENUES, ARISING IN ANY WAY OUT OF THIS AGREEMENT.

 

 

 

 

10.

Indemnification:  T² shall ensure that Customer is an indemnified party under all indemnification provided to T² under any Service Provider Agreement relating to the use of the Services, including without limitation, indemnification for infringement of third party intellectual property rights and indemnification for damages suffered as a result of the negligence or willful misconduct of a Service Provider.  T² shall indemnify Customer from and against any and all losses, including, without limitation, reasonable attorneys’ fees, incurred as a result of, arising out of, or in connection with: (i) any breach of any T² representation, warranty, covenant, or other obligation of T² under this Agreement or any Service Provider Agreement; (ii) any negligent or willful acts, errors or omissions by T² or its affiliates in the performance of this Agreement; or (iii) any liability incurred by Customer to a Service Provider arising out of T²’s activities under this Agreement.  Similarly, Customer shall ensure that T² is an indemnified party under all indemnification provided to Customer under any Service Provider Agreement relating to the use of the Services, including without limitation, indemnification for infringement of third party intellectual property rights and indemnification for damages suffered as a result of the negligence or willful misconduct of a Service Provider.  Customer shall indemnify T2 from and against any and all losses, including, without limitation, reasonable attorneys’ fees, incurred as a result of, arising out of, or in connection with: (i) any breach of any Customer representation, warranty, covenant, or other obligation of Customer under this Agreement or any Service Provider Agreement; or (ii) any negligent or willful acts, errors or omissions by Customer or its affiliates in the performance of this Agreement.

 

 

 

 

11.

Applicable Law:  THIS AGREEMENT HAS BEEN SIGNED IN, DELIVERED IN, AND WILL BE INTERPRETED, CONSTRUED, ENFORCED, AND GOVERNED BY AND IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.  THE MANDATORY AND EXCLUSIVE COURTS OF JURISDICTION AND VENUE FOR ANY LITIGATION RELATING TO THIS AGREEMENT OR ANY OTHER DISPUTE BETWEEN THE PARTIES ARE THE STATE DISTRICT COURTS OF DALLAS COUNTY, TEXAS.  THE PARTIES TO THIS AGREEMENT CONSENT TO SUCH JURISDICTION AND VENUE

 

 

 

 

12.

Waiver of Jury Trial:  EACH PARTY WAIVES ANY RIGHT IT MIGHT HAVE TO REQUIRE THAT A JURY PARTICIPATE IN DECIDING ANY OR ALL ISSUES ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER DOCUMENT SIGNED IN CONNECTION WITH THIS AGREEMENT.  THIS WAIVER SPECIFICALLY INCLUDES A WAIVER OF TRIAL BY JURY, APPLIES TO ALL PRESENT AND FUTURE RIGHTS, AND IS MADE TO THE FULLEST EXTENT PERMITTED BY LAW.

 

 

 

 

13.

Alternative Dispute Resolution:  All claims and matters in question arising out of or related to this Agreement or the relationship between the parties created by this Agreement, whether sounding in contract, tort or otherwise, will be resolved by binding, self-administered arbitration pursuant to the applicable rules of the American Arbitration Association (“AAA”).  All such proceedings will be subject to the Federal Arbitration Act.  There will be one arbitrator.  If an arbitrator cannot be agreed upon within thirty (30) days, AAA will select and appoint an arbitrator.  The arbitrator will decide whether a particular dispute is or is not arbitrable.  The cost and expenses of the arbitrator will be divided between the parties.  Only damages allowed pursuant to this Agreement may be awarded.  The prevailing party in arbitration will be entitled to reimbursement of all attorneys’ fees and costs associated with the arbitration from the losing party, unless the “winning” party is awarded less than 20% of its claimed damages (excluding attorneys’ fees and costs).  The arbitrator will have no authority to award special, consequential, punitive, or exemplary damages; the parties by signing this Agreement waive their rights, if any, to recover such damages, either in arbitration or in litigation.  Each party will have the right to apply to a court to enjoin any breach of this Agreement.  The only exceptions to arbitration are: (a) any claim for less than twenty-five thousand dollars, inclusive of attorneys fees (which must be stipulated as a fact in any petition) or (b) the right of a party to seek injunctive relief to prevent irreparable harm pending completion of any arbitration.  All other claims must be arbitrated.


Page 3 of 7



 

 

The arbitration will take place in Dallas, Texas. The arbitrator will coordinate and limit as appropriate all pre-arbitration discovery (e.g., document production, information requests, depositions).  However, the parties agree that the discovery for each party will be limited to:  two depositions of no more than four hours each, twenty-five interrogatories, and ten requests for production.  Within 120 days from the date of the demand, the arbitration will be completed.  At the arbitration, each party will have up to, but not more than four hours to present the party’s case and any rebuttal. Within 10 days of the arbitration, the arbitrator will issue a written decision and award (if any) stating the reasons for the decisions and award.  The decision will be exclusive, final and binding on the parties, their heirs, executors, administrators, successors and assigns. The arbitration decision may be entered and enforced in any court of competent jurisdiction.  

 

 

 

 

14.

General Terms: This Agreement constitutes the entire agreement between the Parties with respect to the Services.  There are no other written or oral understandings, promises or agreements related hereto. No agreement will be accepted by T² that is modified in any way by Customer, including handwritten modifications and strike-outs.  Amendments and waivers to this agreement will be valid only if in writing and executed by an authorized representative of Customer and a T² vice-president. If any provision of this Agreement is found to be unenforceable, the remainder of the Agreement will continue in full force and effect.


IN WITNESS WHEREOF, the Parties, intending to be bound hereby, have executed this Agreement as of the date first set forth above.


T² Communications L.L.C.

S Squared, LLC

 

 

By: _________________________________

By: _________________________________

 

 

Printed Name: ________________________

Printed Name: ________________________

 

 

Title: _______________________________

Title: _______________________________

 

 

Date: _______________________________

Date: _______________________________


Page 4 of 7



Exhibit A TELECOMMUNICATION SERVICES AGREEMENT


T² Communications, L.L.C. AND S Squared, L.L.C. d/b/a RANGER WIRELESS SOLUTIONS, L.L.C.


Number # 1-T2-07182013


This Telecommunication Services Agreement (“Agreement”). dated this 30th day of September, 2013 (the “Effective Date”), is entered Into by and between, T² Communications, L.L.C.,(“T²”), a Michigan Company with offices located at 13101 Preston Rd., Suite 510, Dallas TX 75240, United States of America and S Squared L.L.C. d/b/a Ranger Wireless Solutions (“Ranger”), an Illinois company, having its business offices at _______________, United States of America, (“CUSTOMER’), hereinafter individually referred to as “Party” and collectively referred to as “Parties”.


T² Communications undertakes to furnish communications service pursuant to the Terms and Conditions set forth in the Service Order Agreement its Tariff.  The furnishing of service under this agreement is subject to the availability on a continuing basis of all the necessary facilities and is limited to the capacity of the Company’s facilities as well as facilities the Company may obtain from other carriers to furnish service from time to time as required at the sole discretion of the Company. Service may be provided over facilities owned by the company, leased by the company, bought for resale or a combination of these methods.  The Company’s responsibilities for services is limited to the underlying service, and it assumes no responsibility for any service provided by any other entity to provide the Customer access to the Company network in order to originate or terminate its own services, or to communicate with its own customers. Equipment Hosting is provided by XO Communication’s, and is subject to its policies and SLA which may change.


IN WITNESS WHEREOF, the Parties acknowledge that each of the provisions of this Agreement has been expressly agreed to and each has caused this Agreement to be signed and delivered by its duly authorized officer.



T² Communications L.L.C.

S Squared, LLC d/b/a Ranger Wireless Solutions

 

 

By: _________________________________

By: _________________________________

 

 

Printed Name: ________________________

Printed Name: ________________________

 

 

Title: _______________________________

Title: _______________________________

 

 

Date: _______________________________

Date: _______________________________


Page 5 of 7



Long Distance Monthly Commitment

Long Distance Plan

Monthly Revenue Commitment

Dedicated Interstate Rate

1 + & Toll Free

Texas Intrastate Rate

1 + & Toll Free

*T² Corporate

$0.00

per XO then to be Sprint

per XO then to be Sprint

International LD

N/A

per XO then to be Sprint

N/A

*Rates are for Domestic Dedicated Interstate LD traffic only.  Hawaii and Alaska rates for Toll Free are $.05 per minute. Toll-Free calls originating from Canada will be billed at $.029 per minute. ALL domestic and international Messages are billed in increments currently per XO then to be billed per Sprint.


**Telecom Ancillary Charges

Description

Per 20

Per 40

Per 100

DID Blocks

$5.00

$10.00

25.00

Toll Free

$20.00

$40.00

$100.00


**Signaling Charges (SS7 – per Syniverse contract)

Description

Quantity

Rate

MRC

Circuit Charges

2

$1,029.73

$1,029.73

ISUP Charges

 

$350.00

$350.00

LNP Look up per DIP

Varies Monthly

.00038

Varies Monthly

ESTIMATED MRC TOTAL

 

 

$1,379.73


**Hosting and other Service Charges (per XO, Sprint and CCI)

Description

Quantity

Each

MRC

HOSTING

 

 

 

Cabinet

1

$500.00

$500.00

20 AMP 12 Volt w UPS

1

$200.00

$200.00

20 AMP DC Power

2

$325.00

$650.00

DS1 Cross Connect

0

N/C

N/C

DS3 Cross Connect

0

N/C

N/C

Key Cards

5

INCL

INCL

Strata Timing Source

2

$150.00

$300.00

 

 

 

 

INTERNET ACCESS

 

 

 

1544 Dedicated Internet

1

$275.00

$275.00

Private Network

1

$80.00

$80.00

VOICE ACCESS

 

 

 

Dedicated LD - DS3 Facility

3 (XO, CCI/Hypercube, Sprint)

$450.00

$1,350.00

Toll Free Number Charge

419

$1.00

$419.00

OTHER

 

 

 

Sprint Cross Connect

1

$150.00

$150.00

HyperCube Cross Connect

1

$150.00

$150.00

Access Recovery

1

$290.82

$290.82

Administrative Charge

1

$12.50

$12.50

 

 

 

 

Estimated Signaling MRC

 

 

$1,379.73

Hosting & Other MRC

 

 

$4,377.32

ESTIMATED MRC TOTAL

 

 

$5,757.05

**Charges are based on installed services and LNP charges are billed as used, and in arrears. Additionally, charges are exclusive of Taxes, Fees, and governmental regulated telecommunication charges.


Page 6 of 7



Service Level Agreement (SLA)


T² Communications (T²) DIA Service Level Agreement (“SLA”)


T² Dedicated Internet Access (DIA) Services are backed by specific service level guarantees.


Network Availability Guarantee - 100%


The T² IP Network, as defined in this section, is guaranteed to be available and capable of forwarding IP packets 100% of the time, as averaged over a calendar month. The T² IP network includes the customer’s access port (the port on the T² aggregation router upon which the customer’s circuit terminates) and the T² IP backbone network. The T² IP backbone network includes T² owned and controlled routers and circuits (including any transit connections).


If the Network Availability guarantee is not met in a calendar month, the customer will receive a credit of 1/30th of the Monthly Recurring Charge (MRC) for that month for each full hour of outage in excess of the 100% guaranteed under this SLA. Limits on the credit and the reporting procedures are detailed below.


Latency Guarantee (55 Milliseconds)

The T² IP backbone network (as defined in the previous section) is guaranteed to have an average round trip packet transit time within the T² IP backbone network over a calendar month of 55ms or less. The average latency is measured as the average of 15-minute samples across the T² IP backbone network taken throughout the calendar month.


If the Latency guarantee is not met in a calendar month, the customer will receive a credit of 1/30th of the Monthly Recurring Charge (MRC) for that month for each full 1ms above the 55ms average maximum guaranteed under this SLA. Limits on the credit and the reporting procedures are detailed below.


Packet Loss

The T² IP backbone network (as defined above) is guaranteed to have a maximum average packet loss of less than 1% over a calendar month. The packet loss is measured as the average of 15-minute samples across the T² IP backbone network taken throughout the calendar month.


If the Packet Loss guarantee is not met in a calendar month, the customer will receive a credit of 1/30th of the Monthly Recurring Charge (MRC) for that month for each full 1% above the 1% average maximum guaranteed under this SLA. Limits on the credit and the reporting procedures are detailed below.


Network Jitter Guarantee

The average network jitter delay caused by the T² IP backbone network (as defined above) is guaranteed not to exceed 1ms during any calendar month.


If this Guarantee is not satisfied during a calendar month, the customer will be credited 1/30th of the Monthly Recurring Charge (MRC) for each full millisecond (1ms) exceeding the 1ms average. Limits on the credit and the reporting procedures are detailed below.


Credit Limits and Reporting Procedures

Total credits under this SLA are limited to the Monthly Recurring Charge (MRC) for the affected DIA service for the month in which the service does not meet the guarantees. The above guarantees do not include the local access circuit (e.g. local loop), Customer Premises Equipment (router or CPE) or the customer’s Local Area Network (LAN), scheduled maintenance events, customer caused outages or disruptions, interconnections to or from and connectivity within other Internet Service Provider (ISP) networks, and force majeure events (as defined in the relevant service contract).


Please call T² Customer Care @ 877-825-5550 to request a Dedicated Internet Access (DIA) Service Level Agreement (SLA) credit.


Page 7 of 7


EX-31 3 ex_31-1.htm CERTIFICATION

Exhibit 31.1

 

CERTIFICATION

 

I, Scott Beck, certify that:

 

1. I have reviewed this registration statement on Form 10 of Woodland Holdings Corporation;

 

2. 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;

 

3. 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;

 

4. 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;

 

 

 

 

(b)

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;

 

 

 

 

(c)

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

 

 

 

 

(d)

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

 

5. 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 persons performing the equivalent functions):

 

 

(a)

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

 

 

 

 

(b)

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.

 

Date:  September 29, 2015

By:

/s/ Scott Beck

 

Scott Beck

 

Chief Executive Officer



EX-31 4 ex_31-2.htm CERTIFICATION

Exhibit 31.2

 

CERTIFICATION

 

I, V. Chase McCrea III, certify that:

 

1. I have reviewed this registration statement on Form 10 of Woodland Holdings Corporation;

 

2. 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;

 

3. 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;

 

4. 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;

 

 

 

 

(b)

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;

 

 

 

 

(c)

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

 

 

 

 

(d)

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

 

5. 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 persons performing the equivalent functions):

 

 

(a)

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

 

 

 

 

(b)

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.

 

Date:  September 29, 2015

By:

/s/ V. Chase McCrea III

 

V. Chase McCrea III

 

Chief Financial Officer



EX-32 5 ex_32-1.htm CERTIFICATION

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

 

18 U.S.C. SECTION 1350,

 

AS ADOPTED PURSUANT TO

 

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Registration Statement of Woodland Holdings Corporation (the “Company”) on Form 10 for the year ended December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Scott Beck, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

 

Date:  September 29, 2015

By:

/s/ Scott Beck

 

Scott Beck

 

Chief Executive Officer

 

 

A signed original of this written statement required by Section 906 has been provided to Woodland Holdings Corporation and will be retained by Woodland Holdings Corporation and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.



EX-32 6 ex_32-2.htm CERTIFICATION

Exhibit 32.2

 

CERTIFICATION PURSUANT TO

 

18 U.S.C. SECTION 1350,

 

AS ADOPTED PURSUANT TO

 

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Registration Statement of Woodland Holdings Corporation (the “Company”) on Form 10 for the year ended December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, V. Chase McCrea III, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

 

Date:  September 29, 2015

By:

/s/ V. Chase McCrea III

 

V. Chase McCrea III

 

Chief Financial Officer

 

 

A signed original of this written statement required by Section 906 has been provided to Woodland Holdings Corporation and will be retained by Woodland Holdings Corporation and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.