10QSB

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-QSB

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Quarter Ended March 31, 2006
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 0-11336

CIPRICO INC.

(Exact name of Registrant as specified in its charter)

DELAWARE	41-1749708
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)

17400 Medina Road

Plymouth, Minnesota 55447

(Address of principal executive offices)

Registrant’s telephone number, including area code: (763) 551-4000

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes  ý   No  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  o   No  ý

The number of shares outstanding of the registrant’s Common Stock, $.01 par value, as of May 1, 2006 was 4,947,047 shares.

Transitional Small Business Disclosure Format (Check one): Yes  o   No  ý

CIPRICO INC.

FORM 10-QSB

INDEX

		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Balance Sheet at March 31, 2006	3
	Condensed Statements of Operations for the Three and Six-Month Periods Ended March 31, 2006 and 2005	4
	Condensed Statements of Cash Flows for the Six-Month Periods Ended March 31, 2006 and 2005	5
	Notes to Condensed Financial Statements	6-10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10-12
Item 3.	Controls and Procedures	12
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	13
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 3.	Defaults Upon Senior Securities	13
Item 4.	Submission of Matters to a Vote of Security Holders	13
Item 5.	Other Information	13
Item 6.	Exhibits	14
SIGNATURES		14
EXHIBITS		15-18

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

CIPRICO INC.

CONDENSED BALANCE SHEET

(Unaudited)

(In thousands)	March 31, 2006
ASSETS
Current assets:
Cash and cash equivalents	$	7,043
Marketable securities and short term investments	5,679
Accounts receivable, less allowance	1,107
Inventories	1,969
Other current assets	137
Total current assets	15,935
Property and equipment, net of depreciation	171
Non-current marketable securities	1,037
Goodwill	2,784
Other intangibles, net of amortization	186
Other assets	47
	$	20,160
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,328
Acquisition note payable	100
Other accrued expenses	1,245
Deferred revenue	92
Total current liabilities	2,765
Stockholders’ equity:
Capital stock	49
Additional paid-in capital	35,687
Retained deficit	(18,341		)
Total stockholders’ equity	17,395
	$	20,160

See accompanying notes to condensed financial statements.

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CIPRICO INC.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended March 31,						Six Months Ended March 31,
(In thousands, except per share amounts)	2006			2005			2006			2005
NET SALES	$	2,912		$	3,008		$	6,423		$	6,026
Cost of sales	1,836			2,017			3,993			3,941
GROSS PROFIT	1,076			991			2,430			2,085
OPERATING EXPENSES:
Research and development	990			818			1,876			1,658
Sales and marketing	756			672			1,542			1,245
General and administrative	451			539			988			785
Restructuring	—			285			—			(181		)[1]
Total operating expenses	2,197			2,314			4,406			3,507
LOSS FROM OPERATIONS	(1,121		)	(1,323		)	(1,976		)	(1,422		)
Other income, primarily interest	172			141			333			261
LOSS BEFORE INCOME TAXES	(949		)	(1,182		)	(1,643		)	(1,161		)
Income taxes	—			—			—			—
NET LOSS	$	(949	)	$	(1,182	)	$	(1,643	)	$	(1,161	)
Shares used to calculate net loss per share:
Basic and diluted	4,892			4,753			4,842			4,748
NET LOSS PER COMMON SHARE:
Basic and diluted	$	(0.19	)	$	(0.25	)	$	(0.34	)	$	(0.24	)

[1] Amount represents an adjustment to previously recorded lease abandonment charges associated with a sublease agreement executed during the period.

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CIPRICO INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended
	March 31,
(In thousands)	2006			2005
Cash flows from operating activities:
Net loss	$	(1,643	)	$	(1,161	)
Depreciation and amortization	166			252
Changes in operating assets and liabilities	(293		)	(1,381		)
NET CASH FLOWS USED IN OPERATING ACTIVITIES	(1,770		)	(2,290		)
Cash flows from investing activities:
Equipment purchases	(40		)	(91		)
Purchases of marketable securities	(2,949		)	(9,043		)
Proceeds from sale or maturity of marketable securities	8,231			11,054
Cash paid for business acquisition	(914		)	(1,412		)
NET CASH FLOWS PROVIDED BY INVESTING ACTIVITIES	4,328			508
Cash flows from financing activities:
Proceeds from issuance of common stock	391			44
NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES	391			44
Net increase (decrease) in cash and cash equivalents	2,949			(1,738		)
Cash and cash equivalents at beginning of period	4,094			4,394
Cash and cash equivalents at end of period	7,043			2,656
Marketable securities, current	5,679			14,935
Marketable securities, long-term	1,037			—
Total cash, cash equivalents and marketable securities	$	13,759		$	17,591

See accompanying notes to condensed financial statements.

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CIPRICO INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

March 31, 2006

(Unaudited)

NOTE A – DESCRIPTION OF BUSINESS

Ciprico Inc. designs, manufactures and markets appliances, services and solutions for digital media applications. Our solutions combine storage, networking and computing technologies to improve the productivity of customer workflows for the capture, creation, manipulation, archival, management and distribution of digital assets. Our storage appliances are designed primarily for visual computing applications ranging from high-speed image data capture, through processing and analysis, to real-time playback at sustained performance levels within our target markets: content creation (including both pre-media and video), post production (including digital cinema), broadcast, military and government and other rich media application markets.

NOTE B – BASIS OF PRESENTATION

Critical Accounting Policies and Estimates- Note 1 of the Notes to the Consolidated Financial Statements included in the Annual Report on Form 10-K includes a summary of the significant accounting policies and methods used in the preparation of our Financial Statements.

In the opinion of management, the accompanying unaudited condensed financial statements contain all necessary adjustments and disclosures to present fairly the financial position as of March 31, 2006 and the results of operations for the three and six-month periods ended March 31, 2006 and 2005, and the cash flows for the six-month periods ended March 31, 2006 and 2005. The results of operations for the three and six-months ended March 31, 2006 are not necessarily indicative of the results for the full year. These condensed financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company’s Form 10-K filed on December 6, 2005.

In preparation of the Company’s financial statements, management is required to make estimates and assumptions that affect reported amounts of assets and liabilities and related revenues and expenses. Actual results could differ from the estimates used by management.

NOTE C – ACQUISITION

On January 31, 2005, Ciprico Inc. completed the acquisition of substantially all of the assets (primarily the MediaVaultä product line) of Huge Systems, Inc. (“Huge”). Huge was a privately held company based in Agoura Hills, California, and a leading supplier of data storage solutions for graphic and video content creation marketplace.

The purchase price included an initial amount paid of approximately $1.4 million, a promissory note in the original principal amount of $300,000 payable quarterly through September 2006, and a contingent consideration amount based upon certain performance of the business through January 31, 2006. Also included as part of the total purchase price were acquisition costs of approximately $175,000. At March 31, 2006, the remaining amount due on the promissory note of $100,000 is included in the Acquisition payable line item on the balance sheet. This note bears interest at a rate of 5% per annum. Based on performance of the business through January 31, 2006, the Company has paid $1.5 million in contingent consideration, there is no additional contingent consideration to be paid.

In conjunction with the acquisition, Ciprico also entered into employment agreements with the two principals of Huge and issued certain warrants to purchase an aggregate of 30,000 shares of Ciprico common stock at a price of $5.00 per share to certain stockholders of Huge. The warrants become exercisable ratably over the course of the next four years and terminate five years from the date of issuance.

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The total transaction cost of approximately $3.4 million has been allocated as follows (in thousands):

PURCHASE PRICE ALLOCATION

Assets
Tangible assets
Accounts receivable	$	402
Inventories	94
Prepaids & other	68
Property & equipment	32
Intangible assets
RAID technology	170
Noncompete agreements	135
Goodwill	2,784
Assets acquired	$	3,685
Liabilities assumed
Accounts payable	(241		)
Net assets acquired	$	3,444

As part of the analysis of the acquisition, it was determined there was no material in-process research and development at the date of acquisition.

NOTE D – GOODWILL AND INTANGIBLE ASSETS

In accordance with SFAS No. 142, goodwill and other intangible assets with indefinite lives are not amortized, they are instead tested for impairment annually or whenever events or changes in circumstances indicate that the asset may be impaired. Intangible assets with finite lives that are subject to amortization are listed in the table below as of March 31, 2006 (in thousands):

	Estimated Life (in years)	Estimated Value		Accumulated Amortization			Net
RAID technology	3	$	170	$	(67	)	$	103
Noncompete agreements	3	135		(52		)	83
		$	305	$	(119	)	$	186

Estimated amortization expense for the fiscal years ending September 30, 2006, 2007 and 2008 are $102,000, $102,000 and $34,000, respectively.

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NOTE E – MARKETABLE SECURITIES

The Company has invested its excess cash in commercial paper and other asset-backed investments. These investments are classified as held-to-maturity given the Company’s intent and ability to hold the securities to maturity and are carried at amortized cost. Investments that have maturities of less than one year have been classified as current marketable securities.

At March 31, 2006, amortized cost approximates the fair value of held-to-maturity investments, which consist of the following (in thousands):

	March 31,
	2006
Current marketable securities:
Commercial paper	$	1,524
Asset-backed investments	4,155
	5,679
Non-current marketable securities:
Commercial paper	1,037
	$	6,716

NOTE F – INVENTORIES

Inventories are stated at the lower of cost or replacement market. Cost is determined using an average cost method. Inventory costs include outside assembly charges, allocated manufacturing overhead and direct material costs. As of March 31, 2006, inventory consists of the following (in thousands):

	March 31,
	2006
Finished Goods	$	724
Work-in-Process	745
Raw Materials	500
	$	1,969

NOTE G – WARRANTY COSTS

The Company estimates future warranty claims based on historical experience and anticipated costs to be incurred. Warranty expense is accrued at the time of sale with an additional accrual for specific items after the sale when their existence is known and amounts are determinable.

The following represents a reconciliation of changes in the Company’s accrued warranty as of March 31, (in thousands):

	Balance at		Charged to Costs and				Balance at
Year	September 30		Expenses		Deductions		March 31
2005	$	240	$	111	$	146	$	205
2006	$	220	$	72	$	67	$	225

NOTE H – RESTRUCTURING

In the second quarter of fiscal 2005, the Company recorded a charge of $285,000 for restructuring related to a workforce reduction in March.

In December 2004, the Company entered into an agreement to sub-lease a portion of its headquarter facility. For the period ended December 31, 2004, the Company recorded a restructuring adjustment of

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$466,000 to reduce a portion of the lease abandonment charges previously recorded in fiscal 2004 based upon expected future rental income, net of any costs associated with the sub-lease agreement.

As of March 31, 2006, restructuring charges of $140,000 related to the headquarters facility will be paid out through October 2007.

NOTE I – STOCKHOLDERS’ EQUITY

Stock Option Plan

The Company has a stock option plan under which officers, directors, employees and consultants have been or may be granted incentive and nonqualified stock options to purchase the Company’s common stock at fair market value on the date of grant. The options become exercisable over varying periods and expire up to 10 years from the date of grant. The Company applies APB Opinion 25, Accounting for Stock Issued to Employees, and related interpretations in accounting for its plans. No stock-based employee compensation cost is reflected in net income, as all options granted under this plan had an exercise price equal to the market value of the underlying common stock on the date of the grant.

The Financial Accounting Standards Board (“FASB”) issued FASB Statement No. 123 (revised 2004), Share-Based Payment, on December 16, 2004.  This statement supersedes APB Opinion 25 and requires the compensation cost relating to share-based payment transactions to be recognized in a company’s financial statements.  That cost will be measured based on the fair value of the equity or liability instruments issued.   The Company is not required to adopt Statement 123(R) until the fiscal year that begins after December 15, 2005. The Company has not completed its evaluation of Statement 123(R).

The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of FASB Statement 123, Accounting for Stock-Based Compensation, to stock-based employee compensation.

	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2006			2005			2006			2005
Net loss, as reported	$	(949	)	$	(1,182	)	$	(1,643	)	$	(1,161	)
Deduct: Total stock-based employee compensation expense determined under fair value based method for awards granted, modified, or settled, net of related tax effects	(53		)	(76		)	(107		)	(143		)
Pro forma net loss	$	(1,002	)	$	(1,258	)	$	(1,750	)	$	(1,304	)
Loss per share
Basic and Diluted – as reported	$	(0.19	)	$	(0.25	)	$	(0.34	)	$	(0.24	)
Basic and Diluted – pro forma	$	(0.20	)	$	(0.26	)	$	(0.36	)	$	(0.27	)

Additional Paid In Capital

During the six-months ended March 31, 2006, Additional Paid In Capital increased $390,000 due to the exercise of stock options and $395,000 related to the issuance of Restricted Stock Awards.

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Deferred Compensation From Restricted Stock

During the six-months ended March 31, 2006 there were Restricted Stock Awards of 68,500 shares and $15,300 of expense was recognized related to outstanding Restricted Stock Awards. The vesting period for these awards currently ranges from one to two years. Those that vest over a one-year period vest without other conditions. Those that vest over a two-year period vest only if certain performance criteria are met.

NOTE J – NET LOSS PER SHARE

The Company’s basic earnings per share amounts have been computed by dividing net loss by the weighted average number of outstanding common shares. Diluted loss per share is computed by dividing net loss by the weighted average number of outstanding common shares and common share equivalents attributable to the assumed exercise of stock options, if such effects are dilutive.

NOTE K – SIGNIFICANT CUSTOMERS

Sales to significant customers as a percentage of sales for the six-month period ended March 31, are shown in the chart below.

	2006		2005
Customer A	33	%	1	%
Customer B	20		2
Customer C	15		27
Customer D	14		1
	82	%	31	%

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

FORWARD-LOOKING STATEMENTS

Certain statements in this Form 10-QSB are forward-looking and should be read in conjunction with cautionary statements in Ciprico’s other SEC filings, reports to stockholders and news releases. Such forward-looking statements, which reflect our current view of product development, adequacy of cash and other future events and financial performance, involve known and unknown risks that could cause actual results and facts to differ materially from those expressed in the forward-looking statements for a variety of reasons. These risks and uncertainties include, but are not limited to: (i) competitive factors, including pricing pressures; (ii) variability in quarterly sales; (iii) economic trends generally and in various markets; (iv) general economic conditions; (v) market acceptance and unanticipated risks associated with introducing new products and features; (vi) sales and distribution issues, (vii) dependence on suppliers, (viii) limited backlog and (vi) other events and important factors disclosed previously and from time to time in our filings with the SEC. Investors should take such risks into account when making investment decisions. Future SEC filings, future press releases and oral or written statements made by us or with our approval, which are not statements of historical fact, may also contain forward-looking statements. Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date on which they were made, and except as required by law, we assume no obligation to update any forward-looking statements. Although we believe that the expectations reflected in these statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We do not intend to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

 OVERVIEW

Ciprico Inc. designs, manufactures and markets appliances, services and solutions for digital media applications. Our solutions combine storage, networking and computing technologies to improve the productivity of customer workflows for the capture, creation, manipulation, archival, management and distribution of digital assets. Our storage appliances are designed primarily for visual computing applications ranging from high-speed image data capture, through processing and analysis, to real-time playback at sustained performance levels within our target markets: content creation (including both pre-media and video), post production (including digital cinema), broadcast, military and government and other rich media application markets.

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The following discussion and analysis of the financial condition and results of operations of Ciprico Inc. should be read in conjunction with the Condensed Financial Statements and the Notes thereto, included elsewhere in Part I, Financial Information.

RESULTS OF OPERATIONS

Three and Six-Month Period Ended March 31, 2006

Sales of $2.9 million for the three-month period ended March 31, 2006 were fairly consistent with the second quarter of the prior fiscal year. Sales of $6.4 million for the six-month period ended March 31, 2006 increased $397,000 or 7% over the comparable prior year period. Sales for the current fiscal year are primarily of the MediaVault™ and DiMeda® product lines, which grew almost 50% over the previous year quarter. The MediaVault product line was purchased in the second quarter of the prior year and sales related to this product line for the first six months of fiscal 2006 were $3.5 million. Current year results also include revenue related to custom engineering work done for customers of the FlexSTORE™ services platform. Legacy product sales continue to decline and as a result most of the current quarter revenue is from products introduced in the last 24 months. We continue to experience increased penetration into the content creation marketplace as well as other related sectors of the digital media workflow. Sales continued to weaken in the Broadcast and Military & Government markets.

Our revenue growth is dependent on the growing use of our products in customer applications, market acceptance of new products, expansion of products into new applications within targeted market segments and the success of programs that specify Ciprico products. Recent product introductions have been received well by the market and we are investing to bring more product innovations to market.

Gross profit, as a percentage of net sales, was 37% and 33% for the three-month period ended March 31, 2006 and 2005, respectively. For the six-month period ended March 31, 2006 and 2005, gross profit, as a percentage of net sales, was 38% and 35%, respectively. This increase can be primarily attributed to the sales of the MediaVault™ product line, which carries higher margins, as well as margin related to the engineering work done for certain customers of the FlexSTORE™ services platform.

Total operating expenses for the quarter were $2.2 million compared to $2.3 million for the same period in the prior year, which included a restructuring charge of $285,000. Operating expenses for the six-months ended March 31, 2006 were $4.4 million compared to $3.5 million for the prior year period, which included a favorable restructuring adjustment of $466,000 as a result of the sub-lease of a portion of our headquarter facility as well as the restructuring charge noted above. The favorable adjustment was recorded to reduce a portion of the lease abandonment charges previously recorded in fiscal 2004 based upon expected future rental income, net of any costs associated with the sub-lease agreement.

Research and development expenses were $990,000 and $818,000 for the three-month period ended March 31, 2006 and 2005, respectively. Research and development expenses were $1.9 million and $1.7 million for the six-month period ended March 31, 2006 and 2005, respectively. This reflects an increase in headcount and expense related to the MediaVault™ product line, additional investments in both the DiMeda® product family and the FlexSTORE™ platform, offset by drastic reductions in expense related to legacy products.

Sales and marketing expenses were $756,000 and $672,000 for the three-month period ended March 31, 2006 and 2005, respectively. Sales and marketing expenses were $1.5 million and $1.2 million for the six-month period ended March 31, 2006 and 2005, respectively. The increase between comparable periods is primarily the result of our reinvestment into sales and marketing as new products are being brought to market.

General and administrative expenses were $451,000 and $539,000 for the three-month period ended March 31, 2006 and 2005, respectively. General and administrative expenses were $988,000 and $785,000 for the six-month period ended March 31, 2006 and 2005, respectively. In addition to increasing costs for insurance, professional fees related to an increasing regulatory environment, the comparison is affected by several accounting adjustments that favorably impacted the prior year first quarter costs.

Other income is primarily interest income and is up over the previous year’s second quarter, despite lower invested balances, due to market conditions and aggressive management of our investments.

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Net loss for the three-month period ended March 31, 2006 was ($949,000) or ($0.19) a share. For the comparable prior year period, the Company had net loss of ($1.2 million) or ($0.25) per share. Net loss for the six-month period ended March 31, 2006 was ($1.6 million) or ($0.34) a share compared to a loss of ($1.2 million) or ($0.24) for the first six months of fiscal 2005, which included a favorable restructuring reversal of $466,000 or $0.10 a share as well as the restructuring charge recorded in March 2005.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2006, we had cash, cash equivalents and marketable securities totaling $13.8 million compared to $16.1 million at September 30, 2005. The decrease is directly related to funding of the loss for the quarter and payments related to the MediaVault™ product line acquisition. Cash flows used in operating activities were $1.8 million for the six-months ended March 31, 2006 compared to a use of $2.3 million for the same period last year.

The acquisition of the MediaVault™ product line included a contingent consideration component as well as a promissory note. Through March 31, 2006, the Company has paid $1.5 million in contingent consideration and there is no additional contingent consideration to be paid. At March 31, 2006 there is a remaining balance of $100,000 on the promissory note. This note bears interest at a rate of 5% per annum and requires quarterly payments through September 2006.

We believe our available cash and cash equivalents are adequate to fund: operations, anticipated capital expenditures and obligations related to the acquisition, as well as any possible future acquisitions.

Item 3. Controls and Procedures

Ciprico management, including the Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness of disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(f). Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the disclosure controls and procedures are effective in ensuring that all information required to be disclosed by the Company in reports that it files under the Exchange Act is recorded and reported within the time period covered by this report. There have been no significant changes in the Company’s internal control over financial reporting that occurred during the period covered by this report that have materially affected or are reasonably likely to materially affect the Company’s control over financial reporting.

Management of Ciprico is responsible for establishing and maintaining effective internal control over financial reporting as is defined in Exchange Act Rule 13a-15(f).  The financial statements and other information presented in this report have been prepared in accordance with accounting principles generally accepted in the United States.  Ciprico’s internal control system is designed to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published financial statements.  Disclosure controls and procedures, no matter how well designed and implemented, can provide only reasonable assurance of achieving an entity’s disclosure objectives.  The likelihood of achieving such objectives is affected by limitations inherent in disclosure controls and procedures.  These include the fact that human judgment in decision-making can be faulty and that breakdowns in internal control can occur because of human failures such as simple errors or mistakes or intentional circumvention of the established process.  Management will continue to review our disclosure controls and procedures periodically to determine their effectiveness and to consider modifications or additions to them.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to a Vote of Security Holders

(a)Meeting

The Annual Meeting of Stockholders of the Company was held on January 26, 2006 and the number of voting shares outstanding as of the record date was 4,788,382.

(b)Election of Directors

The two nominees for director were elected to a term expiring in 2009 by a vote of Stockholders as follows:

	Affirmative Votes	Votes Withheld
Mark D. Griffiths	4,274,754	317,507
James D. Gerson	4,398,722	193,539

In addition to the directors elected above, the Company’s Board of Directors includes the following continuing directors with terms expiring in 2007 or 2008: James W. Hansen, Thomas F. Burniece, Michael M. Vekich and Gary L. Hokkanen.

(c)Other Matters

Setting the number of members of the Board of Directors at six (6) was approved by a vote of Stockholders as follows:

Affirmative votes	4,400,583
Negative votes	183,838
Abstentions	7,840

Item 5. Other Information

None

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Item 6. Exhibits

31.1	Certification of the Chief Executive Officer Pursuant to 17 C.F.R Section 240.13a-14(a)(Section 302 of the Sarbanes-Oxley Act of 2002)
31.2	Certification of the Chief Financial Officer Pursuant to 17 C.F.R Section 240.13a-14(a)(Section 302 of the Sarbanes-Oxley Act of 2002)
32.1	Certification of the Chief Executive Officer Pursuant to 18 U.S.C Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)
32.2	Certification of the Chief Financial Officer Pursuant to 18 U.S.C Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)

SIGNATURES

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

CIPRICO INC.
Dated: May 12, 2006	/s/ James W. Hansen
	James W. Hansen,
	Chief Executive Officer
Dated: May 12, 2006	/s/ Monte S. Johnson
	Monte S. Johnson,
	Chief Financial Officer

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EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

C.F.R SECTION 240.13a-14(a)

(SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002)

I, James W. Hansen, Chief Executive Officer of Ciprico Inc. (“the Company”), certify that:

1.I have reviewed this report on Form 10-QSB of Ciprico Inc.;

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 Company as of, and for, the periods presented in this report;

4.The Company’s other certifying officer 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)) for the Company 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 Company, is made known to us by others within the Company, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the Company’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

(c) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors:

(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 Company’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 Company’s internal control over financial reporting.

Dated: May 12, 2006	Signature:	/s/ James W. Hansen
			James W. Hansen
			Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

C.F.R SECTION 240.13a-14(a)

(SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002)

I, Monte S. Johnson, Chief Financial Officer of Ciprico Inc.(“the Company”), certify that:

1.I have reviewed this report on Form 10-QSB of Ciprico Inc.;

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 Company as of, and for, the periods presented in this report;

4.The Company’s other certifying officer 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)) for the Company 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 Company, is made known to us by others within the Company, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the Company’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

(c) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors:

(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 Company’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 Company’s internal control over financial reporting.

Dated: May 12, 2006	Signature:	/s/ Monte S. Johnson
			Monte S. Johnson
			Chief Financial Officer

EX-32.1

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 Quarterly Report of Ciprico Inc. (the “Company”) on Form 10-QSB for the quarter ended March 31, 2006 as filed with the Securities and Exchange Commission (the “Report”), I, James W. Hansen, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

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

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

Dated: May 12, 2006	/s/ James W. Hansen
		James W. Hansen
		Chief Executive Officer

EX-32.2

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 Quarterly Report of Ciprico Inc. (the “Company”) on Form 10-QSB for the quarter ended March 31, 2006 as filed with the Securities and Exchange Commission (the “Report”), I, Monte S. Johnson, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

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

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

Dated: May 12, 2006	/s/ Monte S. Johnson
	Monte S. Johnson
	Chief Financial Officer