UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2005
Commission file number 0-26598
PAPERCLIP SOFTWARE, INC.
(Exact name of Small Business Issuer as specified in its Charter)
DELAWARE
(State of incorporation)
22-3137907
(IRS Employer ID number)
611 Route 46 West
HASBROUCK HEIGHTS, NJ 07604
(Address of principal executive offices) (Zip Code)
(201)329-6300
(Issuer's telephone number)
(Applicable only to Corporate Issuers)
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Class November 10, 2005
Common Stock, $.01 par value 8,196,521
Transitional Small Business Disclosure Format (check one):
Yes ___ No X
PAPERCLIP SOFTWARE, INC.
INDEX
Page #
Part I. Financial Information
Item 1. Financial Statements
Condensed Balance Sheet 1
Condensed Statements of Operations 2
Condensed Statements of Cash Flows 3
Notes to Condensed Financial Statements 4
Item 2. Management's Discussion and Analysis
or Plan of Operation 6
Item 3. Controls and Procedures 10
Part II Other Information
Item 6. Exhibits 11
Signatures 12
PAPERCLIP SOFTWARE, INC.
BALANCE SHEET
SEPTEMBER 30,2005
(UNAUDITED)
September 30
2005
ASSETS -------------
CURRENT ASSETS:
Cash and cash equivalents $ 278,807
Accounts receivable (net of
allowance for doubtful accounts of $75,000) 170,238
Other current assets 49,296
-------------
Total Current Assets 498,341
-------------
EQUIPMENT, FURNITURE AND FIXTURES:
Computer and office equipment 94,842
Furniture and fixtures 210,914
Leasehold improvements 12,000
-------------
317,756
Less- Accumulated depreciation 278,590
-------------
Equipment, Furniture, and Fixtures, Net 39,166
-------------
OTHER ASSETS 22,006
DEFERRED FINANCING COSTS 42,376
-------------
Total assets $ 601,889
=============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 425,179
Taxes payable 13,500
Deferred revenue 312,400
Notes payable 129,691
Loans payable 250,000
-------------
Total Current Liabilities 1,130,770
-------------
Accrued compensation- related party 844,672
-------------
STOCKHOLDERS' DEFICIENCY:
Convertible Series A, preferred stock, authorized
10,000,000 shares; $.01 par value; 3,649,543 shares
issued and outstanding 36,495
Common stock, authorized 30,000,000
shares; $.01 par value; issued and
outstanding 8,196,521 shares 81,965
Additional paid-in capital 19,450,318
Accumulated deficit (20,942,331)
-------------
Total Stockholders' Deficiency (1,373,553)
-------------
Total liabilities and stockholders'deficiency $ 601,889
=============
See notes to condensed financial statements
-1-
PAPERCLIP SOFTWARE, INC.
CONDENSED STATEMENTS OF OPERATIONS
UNAUDITED
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2005 2004 2005 2004
---------- ------------- ------------ -----------
NET SALES $436,400 $389,620 $1,289,118 $1,061,572
---------- ------------- ------------ -----------
OPERATING EXPENSES:
Research and development expenses 108,800 98,643 369,361 294,798
Selling expenses 165,449 219,433 617,730 555,160
General and administrative expenses 173,283 114,299 445,791 374,786
---------- ------------- ------------ -----------
Total operating expenses 447,532 432,375 1,432,882 1,224,744
---------- ------------- ------------ -----------
LOSS FROM OPERATIONS (11,132) (42,755) (143,764) (163,172)
---------- ------------- ------------ -----------
OTHER INCOME (EXPENSE):
Extinguishment of debt (net of expenses) - - - -
Extinguishment of accounts payable - - 4,100 8,566
Interest expense (18,462) (3,900) (40,724) (11,700)
Interest income 245 176 538 584
---------- ------------- ------------ -----------
Total other income(expense),net (18,217) (3,724) (36,086) (2,550)
---------- ------------- ------------ -----------
NET LOSS BEFORE
PROVISION FOR INCOME TAXES (29,349) (46,479) (179,850) (165,722)
Provision for income taxes - - - -
---------- ------------- ------------ -----------
NET LOSS ($29,349) ($46,479) ($179,850) ($165,722)
========== ============= ============ ===========
BASIC AND FULLT DILUTED
LOSS PER COMMON SHARE (0.00) (0.01) (0.02) (0.02)
========== ============= ============ ===========
WEIGHTED AVERAGE NUMBER
COMMON SHARES OUTSTANDING 8,196,521 8,196,521 8,196,521 8,196,521
========== ============= ============ ===========
See notes to condensed financial statements
-2-
PAPERCLIP SOFTWARE, INC.
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
UNAUDITED
2005 2004
--------------- ------------
OPERATING ACTIVITIES:
Net loss $ (179,850) $ (165,722)
Adjustments to reconcile net loss
to net cash provided by (used for)
operating activities-
Depreciation and amortization 5,880 3,150
Extinguishment of accounts payable (4,100) -
Increase in accrued compensation to related party 40,961 70,515
Interest on loan payable 29,124 -
(Increase) decrease in:
Accounts receivable (9,607) 108,719
Other current assets (64,296) -
Other assets (8,506) -
Increase (decrease) in:
Accounts payable and accrued expenses (11,166) (69,584)
Accrued interest on convertible debt 11,800 11,700
Taxes payable - (15,400)
Deferred revenues (106,000) 123,650
------------- ------------
Net cash (used for) provided by
operating activities (295,760) 67,028
------------- ------------
INVESTING ACTIVITIES-Purchases of
equipment, furniture and fixtures (17,864) (17,746)
------------- ------------
FINANCING ACTIVITIES:
Proceeds from loans payable 250,000 -
Deferred finance cost (32,500) -
------------- ------------
Net cash provided by financing activities 217,500 -
------------- ------------
(DECREASE) INCREASE IN CASH (96,124) 49,282
CASH AND CASH EQUIVALENTS
Beginning of period 374,931 353,008
------------- ------------
End of period $ 278,807 $ 402,290
------------- ------------
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION
Interest paid - -
------------- ------------
See notes to condensed financial statements
-3-
PAPERCLIP SOFTWARE, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2005
NOTE A - NATURE OF THE BUSINESS AND BASIS OF PRESENTATION
PaperClip Software, Inc. (formerly known as PaperClip Imaging Software,
Inc.) located in Hasbrouck Heights, New Jersey, ("PaperClip" or the "Company"),a
Delaware corporation, incorporated in October, 1991, is engaged in the
development and distribution of computer software for document management and
transport of electronic document packages across the public Internet or a
private Intranet with interoperability, security and tracking capabilities. The
Company's systems allow users of personal computer networks to scan, file,
retrieve, display, print and route documents and other software objects (such as
word processing files, spreadsheets and electronic mail), while continuing to
use their existing application software. The systems can be integrated with many
personal computer applications with little or no programming and can file and
retrieve documents without the time consuming step of manually labeling or
indexing each document.
The accompanying unaudited condensed financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information, the instructions to
Form 10-QSB and Regulation S-B. Accordingly, they do not include all the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for fair
presentation have been included. The results of operation for such interim
periods are not necessarily indicative of results of operation for a full year
or for any other period. The unaudited financial statements should be read in
conjunction with the audited financial statements and notes thereto and
management's discussion and analysis of financial conditions included in the
Company's Annual Report on Form 10-KSB for the year ended December 31, 2004 as
filed with the Securities and Exchange Commission (the "SEC").
NOTE B - Summary of Significant Accounting Policies
The significant accounting policies followed by the Company are set forth
in Note 2 to the Company's financial statements in the December 31, 2004 Form
10-KSB.
NOTE C - NET INCOME (LOSS) PER COMMON SHARE
Income(loss) per common share-basic is computed based upon the weighted
average number of common shares and common share equivalents outstanding, if
dilutive, during the period.
Income (loss) per common share-fully diluted is computed based upon the
weighted average number of common shares, common share equivalents and Series A
Preferred Stock outstanding, if dilutive, during the period.
-4-
NOTE D - GOING CONCERN
As shown in the accompanying financial statements, the Company has a
history of significant operating losses and as of September 30, 2005, current
liabilities exceeded current assets by $632,429 and total liabilities exceed
total assets by $1,373,553. These factors as well as uncertain conditions the
Company faces regarding continued negative trends for sales, operating income,
net income and cash flows, raise substantial doubt about the Company's ability
to continue as a going concern.
NOTE E - LOANS PAYABLE
On March 30, 2005 and April 8, 2005, the Company received funds from a
group of accredited investors in the amounts of $100,000 and $57,500,
respectively, in anticipation of the execution of definitive documentation with
such investors. Documents had been fully negotiated in anticipation of a
financing for gross proceeds of between $500,000 and $1,200,000. While the
Company executed certain documents prior to its receipt of the funds, the
documents were to be held in escrow pending a final transaction and the Company
never received countersigned agreements from the investors. Under the terms of
the negotiated transaction, the invested funds were to be in the form of a two
year loan, secured by a lien on the Company's assets, with interest at the rate
of 12% per annum prepaid for the entire period, and financing fees due to Sloan
Securities Corp. (together with its affiliates, "Sloan") in an aggregate amount
equal to 13% of the gross proceeds raised. Warrants to purchase 200,000 shares
and 50,000 shares were also to be issued to the investors and Sloan,
respectively, for each $100,000 of the financing. One half of such warrants were
to be exercisable at $0.20 per share, and the other half of such warrants were
to be exercisable at $0.25 per share. In a letter agreement dated March 31,
2005, Sloan and the investors agreed that they would not enforce their
registration rights related to shares of common stock issuable upon exercise of
the warrants until such time as the Company has received an aggregate of
$500,000 of gross proceeds through the issuance of notes. The Company has
recorded a $250,000 loan payable on its September 30, 2005 balance sheet based
on its understanding of the intent of the parties that such $157,500 aggregate
amount represents net proceeds to the Company, after prepaid interest and
financing costs, of a $250,000 loan to the Company by such investors. The
Company has also reserved 625,000 shares for issuance upon exercise of the
warrants that were to be issued in connection with the $250,000 financing. The
Company has been unable to obtain executed documents from the investors or Sloan
or definitive confirmation of their intent regarding the funds. Accordingly,
there can be no assurance that the investors will not seek to treat the funding
as an incomplete investment and demand return of the funds. The Company has
accounted for the loan as short-term indebtedness, pending the receipt of
executed definitive documentation.
Note F - Reclassifications
The Statement of Operations for the three and nine months ended September
30, 2004 include reclassifications of expenses to conform to the classification
for the three and nine months ended September 30,2005.
Note G - Commitments
The Company has entered into an agreement to rent office space in
Hackensack, New Jersey, starting January, 2006, with no rent payable for the
first two months, and annual rent starting March 1, 2006 to February, 2011 to be
between approximately $48,000 and $50,000.
-5-
PAPERCLIP SOFTWARE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Certain information included in this Quarterly Report may be deemed to
include forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, that involve risk and uncertainty, such as information
relating to the acceptance and sale of the Company's products, the Company's
ability to successfully market and distribute its products, the Company's
ability to generate sufficient cash flow from the sale of its products to meet
the Company's cash requirements and to pay its liabilities when due, the
Company's ability to raise capital, the Company's ability to protect its
proprietary property and the Company's ability to attract and retain key
employees. Further, the results of operation for the third quarter period are
not necessarily indicative of results of operation for a full year or any other
period. In addition, certain statements may involve risk and uncertainty if they
are preceded by, followed by, or that include the words "intends," "estimates,"
"believes," expects," "anticipates," "should," "could," or similar expressions,
and other statements contained herein regarding matters that are not historical
facts. Although we believe that our expectations are based on reasonable
assumptions, we can give no assurance that our expectations will be achieved. We
do not undertake any obligation to release publicly any revisions to such
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
Results of Operations
Three Months and Nine Months Ended September 30, 2005 Compared with Three Months
and Nine Months Ended September 30, 2004
Net sales of the Company increased by $46,780 or 12% to $436,400 for the
three months ended September 30, 2005 from $389,620 for the three months ended
September 30, 2004 and increased by $227,546 or 21% to $1,289,118 for the nine
months ended September 30, 2005 from $1,061,572 for the nine months ended
September 30, 2004. The increases were primarily due to an increase in revenues
from annual support and upgrade assurances and an increase in sales of the
Company's products.
-6-
Research and development expenses increased by $10,157 or 10% to $108,800
for the three months ended September 30, 2005 from $98,643 for the three months
ended September 30, 2004 and increased by $74,563 or 25% to $369,361 for the
nine months ended September 30, 2005 from $294,798 for the nine months ended
September 30, 2004. The increases were due to an increase in research and
development personnel.
Selling expenses decreased by $53,984 or 25% to $165,449 for the three
months ended September 30, 2005 from $219,433 for the three months ended
September 30, 2004 and increased by $62,570 or 11% to $617,730 for the nine
months ended September 30, 2005 from $555,160 for the nine months ended
September 30, 2004. The decrease for the three months ended September 30, 2005
was due to a decrease in training expenses. The increase for the nine months
ended September 30, 2005, resulted from an increase in sales personnel and
increases in expenses for trade shows, partially offset by a decrease in
training expenses.
General and administrative expenses increased by $58,984 or 52% to $173,283
for the three months ended September 30, 2005 from $114,299 for the three months
ended September 30, 2004 and increased by $71,005 or 19% to $445,791 for the
nine months ended September 30, 2005 from $374,786 for the nine months ended
September 30, 2004. The increases were primarily due to an increase in
professional fees.
Other (expense) income increased by $14,493 to ($18,217) for the three
months ended September 30, 2005 from ($3,724) for the three months ended
September 30, 2004, and increased by $33,536 to ($36,086) for the nine months
ended September 30, 2005 from ($2,550) for the nine months ended September 30,
2004. The increases were primarily due to an increase in interest expense
resulting from loans payable to a group of investors. The increase for the nine
month period in 2005 as compared to the corresponding 2004 period was also due
to the inclusion in the first quarter of 2004 of a gain from the extinguishment
of accounts payable, due to expiration of the statute of limitations relating
thereto, that was $4,466 greater than the gain from the similar extinguishment
of accounts payable in the first quarter of 2005.
For the three and nine months ended September 30, 2005 and for the three
and nine months ended September 30, 2004, there was no provision for income
taxes, as the Company had a net operating loss in each such period.
Net loss decreased by $17,130 to ($29,349) for the three months ended
September 30, 2005 from ($46,479) for the three months ended September 30, 2004
and increased by $14,128 to ($179,850) for the nine months ended September 30,
2005 from ($165,722) for the nine months ended September 30, 2004. The increases
were due to increases in research and development and sales personnel, an
increase in professional fees, an increase in interest expense, partially offset
by increases in revenues.
-7-
Liquidity and Capital Resources
September 30, 2005 Compared with December 31, 2004
As of September 30, 2005, the Company had an accumulated deficit of
$20,942,331. The Company had negative working capital of $632,429 and $454,674
as of September 30, 2005 and December 31, 2004, respectively. Included in
current liabilities are deferred revenues of approximately $312,400 and
$418,400, as of September 30, 2005 and December 31, 2004, respectively, such
amounts representing liabilities that will not require the use of cash. If such
non-cash amounts were not included in current liabilities, then current
liabilities would exceed current assets by approximately $320,029 and $36,274,
as of September 30, 2005, and December 31, 2004, respectively.
Presently, the Company funds working capital from revenues it receives from
the sale of its products. For the remainder of 2005, the Company anticipates
that it will need approximately $500,000 in order to fund its operations. The
Company's management believes that the Company will be able to meet its
anticipated cash requirements through the end of the year through a combination
of cash from the sale of its products, cost reduction initiatives to be
implemented as necessary (which initiatives the Company expects would be
primarily related to the Company's sales and marketing activities), investments
from outside investors, and cash on hand. The Company's ability to fund its
operations is subject to broader acceptance of its product lines, its ability to
raise capital, its ability to continue to realize revenues from its customers,
product performance, competitive forces, sales efforts of resellers, the absence
of unanticipated expenses and other factors identified herein. There can be no
assurance that the Company will generate enough cash from the sale of its
products or the raising of additional capital, or that the Company will be
successful in implementing any cost reduction initiatives that may be
undertaken, to meet its anticipated cash requirements for the remainder of 2005.
If the Company does not generate enough cash to meet its requirements for the
remainder of 2005, the Company will not have sufficient working capital to
satisfy its liabilities, develop new products or implement its marketing and
sales initiatives, which may result in a loss of sales and would have a material
adverse effect on the Company.
As of September 30, 2005, the Company had aggregate liabilities of
approximately $1,975,442. Such amount of aggregate liabilities includes (i)
$312,400 in annual support contracts, which are recorded as deferred revenue, a
non-cash item, for accounting purposes and reclassified on a pro rata basis to
sales as such contracts expire and income is earned, (ii) $438,679 in accounts
payable, accrued expenses, and taxes payable (iii) $129,691 in notes payable
which were issued more than six years ago, and (iv) loans payable in the
principal amount of $250,000. Such liabilities also include accrued
compensation-related party, which relates to deferred compensation of
approximately $844,672 payable to Mr. Weiss. Mr. Weiss has entered into a
written agreement with the Company in which he agreed not to demand payment on $
844,672 of his deferred compensation until subsequent to October 1, 2006.
-8-
On March 30, 2005 and April 8, 2005, the Company received funds from a
group of accredited investors in the amounts of $100,000 and $57,500,
respectively, in anticipation of the execution of definitive documentation with
such investors. Documents had been fully negotiated in anticipation of a
financing for gross proceeds of between $500,000 and $1,200,000. While the
Company executed certain documents prior to its receipt of the funds, the
documents were to be held in escrow pending a final transaction and the Company
never received countersigned agreements from the investors. Under the terms of
the negotiated transaction, the invested funds were to be in the form of a two
year loan, secured by a lien on the Company's assets, with interest at the rate
of 12% per annum prepaid for the entire period, and financing fees due to Sloan
Securities Corp. (together with its affiliates, "Sloan") in an aggregate amount
equal to 13% of the gross proceeds raised. Warrants to purchase 200,000 shares
and 50,000 shares were also to be issued to the investors and Sloan,
respectively, for each $100,000 of the financing. One half of such warrants were
to be exercisable at $0.20 per share, and the other half of such warrants were
to be exercisable at $0.25 per share. In a letter agreement dated March 31,
2005, Sloan and the investors agreed that they would not enforce their
registration rights related to shares of common stock issuable upon exercise of
the warrants until such time as the Company has received an aggregate of
$500,000 of gross proceeds through the issuance of notes. The Company has
recorded a $250,000 loan payable on its September 30, 2005 balance sheet based
on its understanding of the intent of the parties that such $157,500 aggregate
amount represents net proceeds to the Company, after prepaid interest and
financing costs, of a $250,000 loan to the Company by such investors. The
Company has also reserved 625,000 shares for issuance upon exercise of the
warrants that were to be issued in connection with the $250,000 financing. The
Company has been unable to obtain executed documents from the investors or Sloan
or definitive confirmation of their intent regarding the funds. Accordingly,
there can be no assurance that the investors will not seek to treat the funding
as an incomplete investment and demand return of the funds. The Company has
accounted for the loan as short-term indebtedness, pending the receipt of
executed definitive documentation.
Outlook
The Company has been marketing a new document management and work flow
product which has been customized for the mortgage broker industry. The
Company's sales from this product were approximately $100,000 for the nine
months ended September 30, 2005, compared to approximately $25,000 for fiscal
year 2004. The Company believes that this product may represent a promising
opportunity for its business, although there are competitors in this business
and there can be no assurance that the Company can generate meaningful revenues
from this product.
-9-
Item 3. Controls and Procedures
Disclosure Controls and Procedures
The Chief Executive Officer/Principal Financial Officer of the Company has
concluded, based on his evaluation as of the end of the fiscal period covered by
this Report, that the Company's disclosure controls and procedures are effective
to ensure that information required to be disclosed by the Company in the
reports filed or submitted by it under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), is recorded, processed, summarized and reported
within the time periods specified in the SEC's rules and forms, and include
controls and procedures designed to ensure that information required to be
disclosed by the Company in such reports is accumulated and communicated to the
Company's management, including the Chief Executive Officer/Principal Financial
Officer, as appropriate to allow timely decisions regarding required disclosure.
Internal Control over Financial Reporting.
During the quarter ended September 30, 2005, there has been no change in
the Company's internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting.
-10-
PART II
OTHER INFORMATION
Item 6. Exhibits
10.1 Agreement, dated October 1, 2005, by and between PaperClip Software,
Inc. and William Weiss.
31.1 Certification Pursuant to Rule 13a-14(a) Promulgated under the
Securities Exchange Act of 1934.
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
-11-
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
PAPERCLIP SOFTWARE, INC.
BY /s/ William Weiss
William Weiss, Chief Executive
Officer and Principal
Financial Officer
Date: November 11, 2005
-12-
EXHIBIT 10.1
WILLIAM WEISS
October 1, 2005
PaperClip Software, Inc.
611 Route 46 West
Hasbrouck Heights, NJ 07604
Reference is hereby made to the $844,672 in "accrued compensation-related
party" recorded on the balance sheet appearing in the Quarterly Report on Form
10-QSB of PaperClip Software, Inc for the quarter ended September 30, 2005. Such
payables relate to deferred compensation for services previously performed by
William Weiss ("Weiss") as an officer of the Company pursuant to an oral
employment arrangement and are payable to Weiss and/or his affiliated company.
Weiss hereby agrees that neither Weiss nor such affiliated company shall demand
payment of such payables prior to October 1, 2006.
Sincerely,
BY /s/ William Weiss
William Weiss
-13-
Exhibit 31.1
CERTIFICATION
I, William Weiss, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of PaperClip
Software, 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 small business
issuer as of, and for, the periods presented in this report;
4. The small business issuer'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)) for the small
business issuer 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 small business issuer,
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) Evaluated the effectiveness of the small business issuer'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) Disclose in this report any change in the small business issuer's
internal control over financial reporting that occurred during the small
business issuer's most recent fiscal quarter (the small business issuer's fourth
fiscal quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the small business issuer's internal
control over financial reporting; and
5. The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer'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 small business issuer'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 small business issuer's internal
control over financial reporting.
Date: November 11, 2005 By: /s/ William Weiss
William Weiss
Chief Executive Officer
Principal Financial Officer
EXHIBIT 32.1
CERTIFICATION OF
CHIEF EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER OF
PAPERCLIP SOFTWARE, INC.
(Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code)
The undersigned, William Weiss, Chief Executive Officer and Principal
Financial Officer of PaperClip Software, Inc. (the "Company"), certifies that:
The Quarterly Report on Form 10-QSB of the Company for the three months
ended September 30, 2005 fully complies with the requirements of Section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
The information contained in the Quarterly Report on Form 10-QSB of the
Company for the three months ended September 30, 2005 fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
November 11, 2005 BY /s/ William Weiss
William Weiss
Chief Executive Officer and
Principal Financial Officer