Delaware | 3577 | 33-0676350 |
(State or other jurisdiction | (Primary Standard Industrial | (I.R.S. employer |
of incorporation or organization) | Classification Code Number) | Identification No.) |
Title of each Class of Securities to be Registered | Dollar Amount to be Registered | Proposed Maximum Offering PriceShare1 | Proposed Maximum AggregateOffering Price1 | Amount ofRegistration Fee |
Common Stock, par value $.001 per share | $ 600,000 | $0.15 | $450,000 | $57.01 |
| ||
&nb sp; Page
SUMMARY INFORMATION | 4 |
RISK FACTORS | 7 |
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS | 16 |
USE OF PROCEEDS | 17 |
SELLING SECURITY HOLDERS | 17 |
PLAN OF DISTRIBUTION | 18 |
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS | 19 |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | 22 |
DESCRIPTION OF OUR COMMON STOCK | 23 |
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES | 24 |
ORGANIZATION WITHIN LAST FIVE YEARS | 24 |
OUR BUSINESS | 24 |
WHERE YOU CAN FIND MORE INFORMATION | 26 |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 26 |
Results of Operations/Comparison of the Nine months Ended October 31, 2003 and 2002 | 26 |
Liquidity and Capital Resources | 28 |
Critical Accounting Policies and Estimates | 30 |
Recent Accounting Pronouncements | 30 |
Results of Operations: Comparison of the Years Ended January 31, 2003 and January 31, 2002 | 31 |
Results of Operations: Comparison of the Years Ended January 31, 2002 and January 31, 2001 | 33 |
Liquidity and Capital Resources | 36 |
EXPERTS | 38 |
DESCRIPTION OF PROPERTY | 38 |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS | 38 |
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS | 38 |
EXECUTIVE COMPENSATION | 40 |
CONSOLIDATED FINANCIAL STATEMENTS | F-1 |
FINANCIAL STATEMENTS FOR THE PERIOD ENDED OCTOBER 31, 2003 | F-2 |
CONSOLIDATED BALANCE SHEETS OCTOBER 31, 2003 AND JANUARY 31, 2003 | F-2 |
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) THREE AND NINE MONTH ENDED OCTOBER 2003 AND 2002 | F-3 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | F-4 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | F-5 |
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS | F-6 |
FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JANUARY 31, 2003 | F-7 |
CONSOLIDATED BALANCE SHEETS JANUARY 31, 2003 AND 2002 | F-8 |
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE FISCAL YEARS ENDED JANUARY 31, 2001, 2002, 2003 | F-9 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED JANUARY, 2003, 2002 and 2001 | F-10 |
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JANUARY 31, 2003-2001 | F-11 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF JANUARY 31, 2003 | F-12 |
PART II | 80 |
INFORMATION NOT REQUIRED IN PROSPECTUS | 80 |
INDEMNIFICATION OF DIRECTORS AND OFFICERS | 80 |
OTHER EXPENSES OF ISUANCE AND DISTRIBUTION | 81 |
EXHIBITS | 81 |
UNDERTAKINGS | 83 |
SIGNATURES | 84 |
Shares of Common Stock Offered: | 3,000,000 shares of common stock. |
Use of Proceeds: | We do not own any of the shares being offered and so we will not receive any cash proceeds from the sale of the shares. |
OTCBB Symbol: | ESAN |
For the Nine Months Ended | For the Fiscal Year Ended | |||||||||||||||
October 31, | January 31, | |||||||||||||||
2003 | 2002 | 2003 | 2002 | 2001 | ||||||||||||
Operating Data: | (Unaudited) | (Unaudited) | ||||||||||||||
Revenue | ||||||||||||||||
Product | $ 4,927 | $ 9531 | $ 12,243 | $ 10,125 | $ 24,606 | |||||||||||
Services | 765 | 1,117 | 1,388 | 3,138 | 1,051 | |||||||||||
Total Revenues | $ 5,692 | $ 10,648 | $ 13,631 | $ 13,263 | $ 25,657 | |||||||||||
Selling and Marketing | 390 | 633 | 830 | 3,438 | 5,239 | |||||||||||
Engineering, research and development | 941 | 853 | 1,172 | 6,499 | 6,860 | |||||||||||
General & administrative expenses | 1,220 | 1,587 | 2,139 | 4,035 | 2,913 | |||||||||||
Other operating expenses | 341 | 360 | 480 | 1,741 | 6,875 | |||||||||||
Non-recurring one time charges | - | - | - | 248 | - | |||||||||||
Total operating expenses | $ | 2,892 | $ | 3,433 | $ | 4,621 | $ | 15,961 | $ | 21,887 | ||||||
Net income (loss) | $ | (543 | ) | $ | 1,367 | $ | 1,742 | $ | (7,249 | ) | $ | (21,129 | ) | |||
Net income (loss) per share | $ | (0.04 | ) | $ | 0.11 | $ | 0.14 | $ | (0.66 | ) | $ | (2.98 | ) | |||
Weighted average shares outstanding | 13,402 | 12,755 | 12,801 | 10,994 | 7,083 | |||||||||||
As of October 31, | As of January 31, | |||||||||||||||
2003 | 2003 | 2002 | 2001 | |||||||||||||
(Unaudited) | ||||||||||||||||
Balance Sheet Data: | ||||||||||||||||
Current assets | $ | 4,657 | $ | 6,267 | $ | 7,301 | $ | 20,461 | ||||||||
Total assets | 5,348 | 7,671 | 9,439 | 22,944 | ||||||||||||
Current liabilities | 1,104 | 2,761 | 6,174 | 12,677 | ||||||||||||
Long-term liabilities | - | - | 27 | 131 | ||||||||||||
Stockholders' equity | 4,244 | 4,910 | 3,238 | 10,136 | ||||||||||||
Working capital | $ | 3,553 | $ | 3,506 | $ | 1,127 | $ | 7,784 |
Name of Selling Shareholder SBI Brightline IV, LLC Trilogy Investment Fund I, LLC | Shares of Common Stock Owned PriortoOffering (1) 1,500,000 1,500,000 | Number of Shares to beOffered forSale (2) 1,500,000 1,500,000 | Number of Shares of Common Stock OwnedafterOffering (2) 0 0 |
Name | Age | Position |
Kanwar J.S. Chadha | 57 | Chairman, President, Chief Executive Officer, Director |
Davinder Sethi | 56 | Vice Chairman, Chief Financial Officer, Director (i) |
Leonard Hecht | 67 | Director (ii)(iii) |
Rohit Phansalkar | 58 | Director (ii)(iv) |
Raymond Ngan | 30 | Director (ii) |
(i) Member of Compensation Committee, (ii) Member of Audit and Compensation Committees, (iii) Chairman of Audit Committee, (iv) Chairman of Compensation Committee
Title of Class | Name and Address of Beneficial Owner | Amount and Nature of Beneficial Owner | Percent of Class |
Common | Springboard Harper | 741,249 shares | 5.3% |
Number of | Percentage of | ||
Title of Class | Name of Beneficial Owner (A) | Shares | Outstanding (H) |
Common | Kanwar J.S. Chadha 12 Morgan, Irvine, CA 92618 | 1,171,769 (B) | 8.0% |
Common | Leonard N. Hecht 12 Morgan, Irvine, CA 92618 | 311,621 (C) | 2.2% |
Common | Rohit Phansalkar 12 Morgan, Irvine, CA 92618 | 421,833 (D) | 3.0% |
Common | Davinder Sethi 12 Morgan, Irvine, CA 92618 | 1,237,823 (E) | 8.5% |
Common | Raymond Ngan | 311,534 (F) | 2.2% |
All Directors and Executive Officers as a group | 3,454,580 | 21.6% | |
We have agreed to indemnify the selling shareholders and they have agreed to indemnify us against certain losses, claims, damages, liabilities or expenses under the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and any other federal or state statutory law or regulation, or at common law or otherwise.
The following table presents, at October 31, 2003, our obligations and commitments to make future payments under contracts and contingent commitments. | |||||||||||||||||||
Payment Due by Period as of October 31, 2003 | |||||||||||||||||||
Less than | 1-3 | 4-5 | After 5 | ||||||||||||||||
Contractual Obligations | Total | 1Year | Years | Years | Years | ||||||||||||||
(In thousands) | |||||||||||||||||||
Short Term Debt | $ | 246 | $ | 246 | $ | - | $ | - | $ | - | |||||||||
Capital Lease Obligations | - | - | - | - | - | ||||||||||||||
Operating Lease Commitments | 29 | 29 | - | - | - | ||||||||||||||
Total Contractual Cash Obligations | $ | 275 | $ | 275 | $ | - | $ | - | $ | - |
Results of Operations: Comparison of the Years Ended January 31, 2003 and January 31, 2002
Item | Amount(millions) | Description |
Inventory impairment | $ 2.2 | This adjustment records a full reserve against the cost basis of Sync’s inventory based upon the intent to abandon the inventory. This assumes that as a discontinued operation, the inventory value is zero as the need to dispose of inventory would result in minimal return. |
Severance | 1.1 | This adjustment records the costs associated with the termination of our employees and assumes the elimination of all of the Sync employees: 45 people including 8 change of control/contract personnel. |
Vendor payables | 1.1 | We recorded an accrual for costs due and payable under the termination provisions of an agreement with a contract manufacturing vendor. |
Lease termination accrual | 0.7 | We recorded an accrual for the remaining lease costs and lease related costs for the physical location of the discontinued operations, net of sub lease income. |
Goodwill impairment | 4.3 | Assumes 4.2 million shares at $2.75 per share offset by the valuation of Sync Research of $8.4 million at August 30, 2000 with the addition of $1.1 million merger expenses. |
Fixed asset impairment | 1.0 | This adjustment assumed that the Sync fixed asset book value would be fully reserved as a discontinued operation due to the abandonment of fixed assets. |
Total Loss | $10.4 | |
The following table presents, at January 31, 2003, our obligations and commitments to make future payments under contracts and contingent commitments. | ||||||||||||||||
Payment Due by Period as of January 31, 2003 | ||||||||||||||||
(In thousands) | Less than | 1-3 | 4-5 | After 5 | ||||||||||||
Contractual Obligations | Total | 1Year |
|
| Years |
|
| Years |
|
| Years | |||||
Short Term Debt | $ | 474 | $ | 474 | $ | - | $ | - | $ | - | ||||||
Capital Lease Obligations | 68 | 68 | - | - | - | |||||||||||
Operating Leases | 1,482 | 632 | 850 | - | - | |||||||||||
Total Contractual Cash Obligations | $ | 2,024 | $ | 1,174 | $ | 850 | $ | - | $ | - |
Fiscal 2003 | High | Low |
Quarter from February 1, 2002 to April 30, 2002 | $0.25 | $0.09 |
Quarter from May 1, 2002 to July 31, 2002 | $0.35 | $0.16 |
Quarter from August 1, 2002 to October 31, 2002 | $0.19 | $0.06 |
Quarter from November 1, 2002 to January 31, 2003 | $0.05 | $0.26 |
Fiscal 2004 | ||
Quarter from February 1, 2003 to April 30, 2003 | $0.40 | $0.20 |
Quarter from May 1, 2003 to July 31, 2003 | $0.37 | $0.19 |
Quarter from August 1, 2003 to October 31, 2003 | $0.23 | $0.14 |
Quarter from November 1, 2003 to January 31, 2004 | $0.21 | $0.11 |
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) | Weighted-Average Exercise price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | ||||||||
Plan category | ||||||||||
Equity Compensation Plans Approved by Security Holders | 2,974,806 | $ | 1.11 | 1,348,208 | ||||||
Equity Compensation Plans Not Approved by Security Holders * | 575,757 | $ | 0.74 | - | ||||||
Total | 3,550,563 | $ | 1.05 | 1,348,208 |
Annual Compensation | Long-Term Compensation | |||||||||
Other | Restricted | Securities | Long-Term | All | ||||||
Annual | Stock | Underlying | Incentive | Other | ||||||
Fiscal | Salary | Bonus | Compensation | Award(s) | Options | Plan | Compensation | |||
Name and Principal Position | Year | ($) | ($) | ($) | ($) | (#) | Payouts | ($) | ||
Kanwar J.S. Chadha, Ph.D., | 2003 | $257,942 | $- | $- | $100,000 | $- | $- | $- | ||
Chairman, CEO, | 2002 | 211,110 | - | - | - | 160,000 | - | - | ||
President, Director | 2001 | 141,038 | 92,625 | - | - | 500,000 | - | - | ||
Davinder Sethi, Ph.D. | ||||||||||
Vice Chairman, CFO, | 2003 | 180,000 | - | - | 50,000 | - | - | - | ||
Director | 2002 | 35,805 | - | - | - | 500,000 | - | - | ||
2001 | $- | $- | $- | $- | $- | $100,000 | - |
Page | |
Financial Statements for the period ended October 21, 2003, 2002 | |
Consolidated Balance Sheets, October 31, 2003 (Unaudited) and January 31, 2003 | F-2 |
Consolidated Statements of Operations, Three Months and Nine Months Ended October 31, 2003 and 2002 (Unaudited) | F-3 |
Condensed Consolidated Statements of Cash Flows, Nine Months Ended October 31, 2003 and 2002 (Unaudited) | F-4 |
Notes to Condensed Consolidated Financial Statements as of October 31, 2003 | F-5 – F-14 |
Financial Statements for the period ended January 31, 2003, 2002 and 2001 | |
Report of Independent Certified Public Accountant | F-15 |
Consolidated Balance Sheets as of January 31, 2003 and 2002 | F-16 |
Consolidated Statements of Operations for the years ended January 31, 2003, 2002 and 2001 | F-17 |
Consolidated Statements of Stockholders' Equity for the years ended January 31, 2003, 2002 and 2001 | F-18 |
Consolidated Statements of Cash Flows for the years ended January 31, 2003, 2002 and 2001 | F-19 |
Notes to Consolidated Financial Statements | F- 20 to F-36 |
F- 1 | ||
ENTRADA NETWORKS, INC. | |||||||
(In Thousands) | |||||||
October 31, | January 31, | ||||||
2003 | 2003 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and equivalents | $ | 229 | $ | 808 | |||
Short-term Investments | 57 | 45 | |||||
Accounts receivable, net of allowance for doubtful | |||||||
Accounts of $67 and $212, respectively | 495 | 1,329 | |||||
Inventory, net of reserves of $3,453 and $3,809, respectively | 3,531 | 3,576 | |||||
Prepaid expenses and other current assets | 345 | 509 | |||||
TOTAL CURRENT ASSETS | 4,657 | 6,267 | |||||
PROPERTY AND EQUIPMENT, NET | 652 | 1,073 | |||||
OTHER ASSETS | |||||||
Deposits | 39 | 31 | |||||
Restricted cash | - | 300 | |||||
TOTAL OTHER ASSETS | 39 | 331 | |||||
TOTAL ASSETS | $ | 5,348 | $ | 7,671 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable | 289 | 810 | |||||
Other current and accrued liabilities | 569 | 1,409 | |||||
Short-term debt | 246 | 474 | |||||
Capital lease obligations | - | 68 | |||||
TOTAL LIABILITIES | $ | 1,104 | $ | 2,761 | |||
STOCKHOLDERS' EQUITY | |||||||
Preferred stock, $.001 par value, 2,000 shares authorized, no shares outstanding | - | - | |||||
Common stock, $.001 par value; 50,000 shares authorized; 13,901 shares | |||||||
Issued and outstanding at October 31, 2003; 12,937 shares issued | |||||||
and outstanding at January 31, 2003 | 13 | 13 | |||||
Additional paid-in capital | 52,001 | 52,001 | |||||
Accumulated other comprehensive income (loss) | 4 | - | |||||
Accumulated deficit | (47,646 | ) | (47,104 | ) | |||
Treasury Stock (402,616 shares at cost) | (128 | ) | - | ||||
TOTAL STOCKHOLDERS' EQUITY | 4,244 | 4,910 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 5,348 | $ | 7,671 | |||
See accompanying notes to consolidated financial statements. |
ENTRADA NETWORKS, INC. | |||||||||||||
AND SUBSIDIARIES | |||||||||||||
(In Thousands, except per share amounts) | |||||||||||||
Three months ended | Nine months ended | ||||||||||||
October 31, | October 31, | ||||||||||||
2003 | 2002 | 2003 | 2002 | ||||||||||
NET REVENUES | |||||||||||||
Product | $ | 695 | $ | 3,731 | $ | 4,927 | $ | 9,531 | |||||
Services | 236 | 328 | 765 | 1,117 | |||||||||
TOTAL NET REVENUES | 931 | 4,059 | 5,692 | 10,648 | |||||||||
COST OF REVENUE | |||||||||||||
Product | 481 | 1,894 | 3,099 | 5,504 | |||||||||
Services | 77 | (22 | ) | 247 | 99 | ||||||||
TOTAL COST OF REVENUE | 558 | 1,872 | 3,346 | 5,603 | |||||||||
GROSS PROFIT | 373 | 2,187 | 2,346 | 5,045 | |||||||||
OPERATING EXPENSES | |||||||||||||
Selling and marketing | 80 | 206 | 390 | 633 | |||||||||
Engineering, research and development | 260 | 285 | 941 | 853 | |||||||||
General and administrative | 258 | 569 | 1,220 | 1,587 | |||||||||
Other operating expenses | - | 120 | 341 | 360 | |||||||||
TOTAL OPERATING EXPENSES | 598 | 1,180 | 2,892 | 3,433 | |||||||||
INCOME (LOSS) FROM OPERATIONS | (225 | ) | 1,007 | (546 | ) | 1,612 | |||||||
OTHER CHARGES | |||||||||||||
Interest expense, net | (5 | ) | (57 | ) | (12 | ) | (156 | ) | |||||
Other income (expense) | - | (85 | ) | 15 | (89 | ) | |||||||
TOTAL OTHER CHARGES | (5 | ) | (142 | ) | 3 | (245 | ) | ||||||
NET INCOME (LOSS) | $ | (230 | ) | $ | 865 | $ | (543 | ) | $ | 1,367 | |||
INCOME (LOSS) PER COMMON SHARE: | |||||||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | |||||||||||||
BASIC | 13,901 | 12,937 | 13,402 | 12,755 | |||||||||
DILUTED | 13,901 | 12,973 | 13,402 | 12,823 | |||||||||
BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE | |||||||||||||
BASIC | $ | (0.02 | ) | $ | 0.07 | $ | (0.04 | ) | $ | 0.11 | |||
DILUTED | $ | (0.02 | ) | $ | 0.07 | $ | (0.04 | ) | $ | 0.11 | |||
See accompanying notes to consolidated financial statements. |
ENTRADA NETWORKS, INC. | |||||||
AND SUBSIDIARIES | |||||||
Nine Months Ended | |||||||
(In Thousands) | October 31, | ||||||
2003 | 2002 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net income (loss) | $ (543) | $ 1,367 | |||||
Adjustments to reconcile net income (loss) to net cash provided by | |||||||
Operating activities: | |||||||
Depreciation and amortization | 425 | 468 | |||||
Non-cash change in short-term investment | (8) | (4) | |||||
Accounts receivable and inventory reserve changes | (500) | 52 | |||||
Gain or (loss) on sale of property and equipment | - | 149 | |||||
Issuance of common stock in payment of liabilities | - | 89 | |||||
Changes in assets and liabilities net of effects of business entity acquisition: | |||||||
(Increase) decrease in accounts receivable | 979 | 39 | |||||
(Increase) decrease in inventories | 401 | (370) | |||||
(Increase) decrease in prepaid and other current assets | 456 | 11 | |||||
Increase (decrease) in accounts payable | (524) | (1,256) | |||||
Increase (decrease) in accrued expenses | (501) | (1,352) | |||||
Increase (decrease) in other current liabilities | (336) | 80 | |||||
NET CASH USED IN OPERATING ACTIVITIES: | (151) | (727) | |||||
CASH FLOWS USED IN INVESTING ACTIVITIES: | |||||||
Purchase of treasury stock | (128) | - | |||||
Investment in marketable securities | - | (49) | |||||
Purchase of property and equipment | (4) | (11) | |||||
NET CASH USED IN INVESTING ACTIVITIES | (132) | (60) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Increase (repayment) of short-term debt | (228) | 618 | |||||
Repayment of capital lease obligations | (68) | (22) | |||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | (296 | ) | 596 | ||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (579 | ) | (191 | ) | |||
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 808 | 698 | |||||
CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | 229 | $ | 507 | |||
See accompanying notes to consolidated financial statements. |
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
Three Months Ended October 31, | Nine months Ended October 31, | ||||||||||||
2003 | 2002 | 2003 | 2002 | ||||||||||
Net income (loss) as reported: | $ | (230 | ) | $ | 865 | $ | (543 | ) | $ | 1,367 | |||
Add: Stock based employee compensation expense | - | - | - | - | |||||||||
Deduct: Total stock based employee compensation | |||||||||||||
expense determined under fair value method | (16 | ) | (10 | ) | (221 | ) | (611 | ) | |||||
Pro forma income (loss) per share: | $ | (246 | ) | $ | 855 | $ | (764 | ) | $ | 756 | |||
Basic and diluted EPS as reported | $ | (0.02 | ) | $ | 0.07 | $ | (0.04 | ) | $ | 0.11 | |||
Pro forma basic and diluted EPS | $ | (0.02 | ) | $ | 0.07 | $ | (0.06 | ) | $ | 0.06 |
October 31, 2003 | January 31, 2003 | ||||||
Raw material | $ | 3,410 | $ | 3,736 | |||
Work in process | 164 | 163 | |||||
Finished goods | 3,410 | 3,486 | |||||
6,984 | 7,385 | ||||||
Less: valuation reserve | (3,453 | ) | (3,809 | ) | |||
Net Inventories | $ | 3,531 | $ | 3,576 | |||
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
Three Months Ended October 31, | Nine months Ended October 31, | ||||||||||||
2003 | 2002 | 2003 | 2002 | ||||||||||
Net income (loss) available to common | |||||||||||||
Stockholders used in basic and diluted EPS | $ | (230 | ) | $ | 865 | $ | (543 | ) | $ | 1,367 | |||
Weighted average number of common shares | |||||||||||||
used in basic EPS | 13,900,720 | 12,936,774 | 13,402,474 | 12,754,649 | |||||||||
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
Three Months Ended October 31, | Nine months Ended October 31, | ||||||||||||
2003 |
|
| 2002 |
|
| 2003 |
|
| 2002 |
| |||
Net income (loss) available to common | |||||||||||||
Stockholders used in basic EPS | $ | (230 | ) | $ | 865 | $ | (543 | ) | $ | 1,367 | |||
Weighted average number of common shares used in basic EPS | 13,900,720 | 12,936,774 | 13,402,474 | 12,754,649 | |||||||||
Effect of dilutive securities: | |||||||||||||
Stock benefit plans | - | 36,005 | - | 67,930 | |||||||||
Weighted average number of common shares | |||||||||||||
and dilutive potential common stockused in diluted EPS | 13,900,720 | 12,972,779 | 13,402,474 | 12,822,579 | |||||||||
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
October 31, | October 31, | ||||
2003 | 2002 | ||||
Cisco | 77.8% | 33.8% | |||
U. S. Navy | - | 29.4% |
Three months ended October 31, | Nine months ended October 31, | ||||||||||||
2003 |
|
| 2002 |
|
| 2003 |
|
| 2002 | ||||
Net Revenues: | |||||||||||||
United States | $ | 833 | $ | 3,847 | $ | 5,297 | $ | 9,967 | |||||
Europe | 98 | 212 | 395 | 681 | |||||||||
Other | -- | -- | -- | -- | |||||||||
Total net revenues | $ | 931 | $ | 4,059 | $ | 5,692 | 10,648 |
Three months ended October 31, | Nine months ended October 31, | ||||||||||||
| 2003 | 2002 | 2003 | 2002 | |||||||||
Net Revenues: | |||||||||||||
Network adapter cards | $ | 578 | $ | 3,574 | $ | 4,535 | $ | 9,121 | |||||
Frame relay network products | 117 | 157 | 392 | 410 | |||||||||
Service and support | 236 | 328 | 765 | 1,117 | |||||||||
Total net revenue | $ | 931 | $ | 4,059 | $ | 5,692 | $ | 10,648 | |||||
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
Rixon Networks |
|
| Sync Research |
|
| Torrey Pines Networks |
|
| Total | ||||
Quarter ended October 31, 2003 | |||||||||||||
Total Revenues | $ | 578 | $ | 353 | $ | - | 931 | ||||||
Net Income (loss) | (390 | ) | 249 | (89 | ) | (230 | ) | ||||||
Depreciation and amortization expense | 71 | 13 | 41 | 125 | |||||||||
Inventory reserve additions | - | - | - | - | |||||||||
Capital asset additions | - | - | - | - | |||||||||
Total Assets | $ | 3,933 | $ | 740 | $ | 675 | $ | 5,348 |
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
Rixon Networks | Sync Research | Torrey Pines Networks | Total | ||||||||||||||||
Nine months ended October 31, 2003 | |||||||||||||||||||
Total Revenues | $ | 4,535 | $ | 1,157 | $ | - | $ | 5,692 | |||||||||||
Net Income (loss) | (720 | ) | 453 | (276 | ) | (543 | ) | ||||||||||||
Depreciation and amortization expense | 262 | 40 | 123 | 425 | |||||||||||||||
Inventory reserve additions | - | - | - | - | |||||||||||||||
Capital asset additions | 4 | - | - | 4 | |||||||||||||||
Total Assets | $ | 3,933 | $ | 740 | $ | 675 | $ | 5,348 |
Rixon Networks |
|
| Sync Research |
|
| Torrey Pines Networks |
|
| Total |
| |||
|
|
|
|
|
| ||||||||
| Quarter ended October 31, 2002 | ||||||||||||
Total Revenues | $ | 3,574 | $ | 485 | $ | - | $ | 4,059 | |||||
Net income (loss) | 740 | 168 | (43 | ) | 865 | ||||||||
Depreciation and amortization expense | 100 | 16 | 40 | 156 | |||||||||
Inventory reserve additions | (133 | ) | (4 | ) | - | (137 | ) | ||||||
Capital asset additions | - | - | 11 | 11 | |||||||||
Total Assets | $ | 7,159 | $ | 1,302 | $ | 498 | $ | 8,959 |
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
Rixon Networks | Sync Research | Torrey Pines Networks | Total | |||||||||||||
| ||||||||||||||||
Nine months ended October 31, 2002 | ||||||||||||||||
Total Revenues | $ | 9,121 | $ | 1,527 | $ | - | $ | 10,648 | ||||||||
Net income (loss) | 1,194 | 302 | (129 | ) | 1,367 | |||||||||||
Depreciation and amortization expense | 253 | 51 | 164 | 468 | ||||||||||||
Inventory reserve additions | (133 | ) | (4 | ) | - | (137 | ) | |||||||||
Capital asset additions | - | - | 11 | 11 | ||||||||||||
Total Assets | $ | 7,159 | $ | 1,302 | $ | 498 | $ | 8,959 |
/s/ BDO Seidman, LLP |
BDO Seidman, LLP |
Los Angeles, California |
March 28, 2003 |
ENTRADA NETWORKS, INC. | |||||||
AND SUBSIDIARIES | |||||||
(In Thousands) | |||||||
January 31, 2003 |
|
| January 31, 2002 | ||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and equivalents | 808 | 698 | |||||
Short-term investments | 45 | - | |||||
Accounts receivable, net (Note R) | 1,329 | 1,977 | |||||
Inventory, net (Notes B, and R) | 3,576 | 4,099 | |||||
Prepaid expenses and other current assets | 509 | 527 | |||||
TOTAL CURRENT ASSETS | 6,267 | 7,301 | |||||
PROPERTY AND EQUIPMENT, NET (Note C) | 1,073 | 1,807 | |||||
OTHER ASSETS | |||||||
Deposits | 31 | 31 | |||||
Restricted Cash | 300 | 300 | |||||
331 | 331 | ||||||
TOTAL ASSETS | $ | 7,671 | $ | 9,439 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable | 810 | 2,713 | |||||
Other current and accrued liabilities (Note E) | 1,409 | 2,660 | |||||
Short-term debt (Note D) | 474 | 686 | |||||
Current maturities of long term debt and capital leases (Note G) | 68 | 115 | |||||
TOTAL CURRENT LIABILITIES | 2,761 | 6,174 | |||||
Long-term debt and capital lease obligations (Notes G and H) | - | 27 | |||||
TOTAL LIABILITIES | 2,761 | 6,201 | |||||
COMMITMENTS AND CONTINGENCIES (Notes H and I) | |||||||
STOCKHOLDERS' EQUITY (Note J) | |||||||
Common stock, $.001 par value; 50,000 shares authorized; 12,937 shares | |||||||
issued and outstanding at January 31, 2003; 11,579 shares issued | |||||||
and outstanding at January 31, 2002 | 13 | 12 | |||||
Additional paid-in capital | 52,001 | 52,072 | |||||
Accumulated deficit | (47,104 | ) | (48,846 | ) | |||
TOTAL STOCKHOLDERS' EQUITY | 4,910 | 3,238 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 7,671 | $ | 9,439 | |||
ENTRADA NETWORKS, INC. | |||||||||||||
AND SUBSIDIARIES | |||||||||||||
(In Thousands, except per share amounts) | |||||||||||||
Years Ended January 31, | |||||||||||||
2003 | 2002 | 2001 | |||||||||||
NET REVENUES | |||||||||||||
PRODUCT | $ | 12,243 | $ | 10,125 | $ | 24,606 | |||||||
SERVICES | 1,388 | 3,138 | 1,051 | ||||||||||
TOTAL NET REVENUES | 13,631 | 13,263 | 25,657 | ||||||||||
COST OF REVENUE | |||||||||||||
PRODUCT | 6,909 | 6,868 | 20,812 | ||||||||||
SERVICES | 206 | 889 | 302 | ||||||||||
TOTAL COST OF REVENUE | 7,115 | 7,757 | 21,114 | ||||||||||
GROSS PROFIT | 6,516 | 5,506 | 4,543 | ||||||||||
OPERATING EXPENSES | |||||||||||||
Selling and marketing | 830 | 3,438 | 5,239 | ||||||||||
Engineering, research and development | 1,172 | 6,499 | 6,860 | ||||||||||
General and administrative | 2,139 | 4,035 | 2,913 | ||||||||||
Other operating expenses | 480 | 1,741 | 6,875 | ||||||||||
Non-recurring one-time charges (Note F) | - | 248 | - | ||||||||||
TOTAL OPERATING EXPENSES | 4,621 | 15,961 | 21,887 | ||||||||||
INCOME (LOSS) FROM OPERATIONS | 1,895 | (10,455 | ) | (17,344 | ) | ||||||||
OTHER CHARGES | |||||||||||||
Interest expense, net | (69 | ) | (195 | ) | (384 | ) | |||||||
Other expense | (84 | ) | - | - | |||||||||
TOTAL OTHER CHARGES | (153 | ) | (195 | ) | (384 | ) | |||||||
INCOME (LOSS) FROMCONTINUING OPERATIONS | $ | 1,742 | $ | (10,650 | ) | $ | (17,728 | ) | |||||
INCOME (LOSS) ON DISCONTINUEDOPERATIONS (Note A) | $ | - | $ | 3,401 | $ | (3,401 | ) | ||||||
NET INCOME (LOSS) | $ | 1,742 | $ | (7,249 | ) | $ | (21,129 | ) | |||||
INCOME (LOSS) PER COMMON SHARE (Note M): | |||||||||||||
BASIC AND DILUTED | |||||||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 12,801 | 10,994 | 7,083 | ||||||||||
NET INCOME (LOSS) PER COMMON SHARE: | |||||||||||||
CONTINUING OPERATIONS | $ | 0.14 | $ | (0.97 | ) | $ | (2.50 | ) | |||||
DISCONTINUED OPERATIONS | $ | - | $ | 0.31 | $ | (0.48 | ) | ||||||
BASIC AND DILUTED NET LOSS PER COMMON SHARE | $ | 0.14 | $ | (0.66 | ) | $ | (2.98 | ) | |||||
ENTRADA NETWORKS, INC. | ||||||||||||||||
AND SUBSIDIARIES | ||||||||||||||||
(In Thousands) | ||||||||||||||||
| COMMON |
| ADDITIONAL |
|
|
|
| TOTAL |
| |||||||
| STOCK |
| PAID IN |
|
| ACCUMULATED |
|
| STOCKHOLDERS' |
| ||||||
|
| Shares |
|
| Amount |
|
| CAPITAL |
|
| DEFICIT |
|
| EQUITY | ||
Balance at January 31, 1998 | 1 | $ | 1 | $ | 5,761 | $ | (13,365 | ) | $ | (7,603 | ) | |||||
Net loss | - | - | - | (3,716 | ) | (3,716 | ) | |||||||||
Balance at January 31, 1999 | 1 | 1 | 5,761 | (17,081 | ) | (11,319 | ) | |||||||||
Net loss | - | - | - | (3,387 | ) | (3,387 | ) | |||||||||
Balance at January 31, 2000 | 1 | 1 | 5,761 | (20,468 | ) | (14,706 | ) | |||||||||
Stock option exercises (Note K) | 73 | - | 169 | - | 169 | |||||||||||
Private placement ofcommon stock (Note A) | 2,432 | 2 | 8,023 | - | 8,025 | |||||||||||
Reverse acquisition of Entrada (Note A) | 8,487 | 8 | 12,300 | - | 12,308 | |||||||||||
Amount due to former parent contributed in merger (Note A) | - | - | 25,469 | - | 25,469 | |||||||||||
Net loss | - | - | - | (21,129 | ) | (21,129 | ) | |||||||||
BALANCE AT JANUARY 31, 2001 | 10,993 | 11 | 51,722 | (41,597 | ) | 10,136 | ||||||||||
Silicon Valley Bank Warrants | - | - | 42 | - | 42 | |||||||||||
Beneficial conversion feature of convertible note (Note G) | - | - | 229 | - | 229 | |||||||||||
Stock issuance program | 586 | 1 | 79 | - | 80 | |||||||||||
Net Loss | (7,249 | ) | (7,249 | ) | ||||||||||||
BALANCE AT JANUARY 31, 2002 | 11,579 | 12 | 52,072 | (48,846 | ) | 3,238 | ||||||||||
Stock issuance program | 1,358 | 1 | 188 | - | 189 | |||||||||||
Acquisition of beneficial conversionfeature (Note G ) | - | - | (259 | ) | - | (259 | ) | |||||||||
Net income | - | - | - | 1,742 | 1,742 | |||||||||||
BALANCE AT JANUARY 31, 2003 | 12,937 | $ | 13 | $ | 52,001 | $ | (47,104 | ) | $ | 4,910 | ||||||
See accompanying notes to consolidated financial statements. |
ENTRADA NETWORKS, INC. | ||||||||||
AND SUBSIDIARIES | ||||||||||
(In Thousands) | 2003 | 2002 | 2001 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||
Net income (loss) | $ | 1,742 | $ | (7,249 | ) | $ | (21,129 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||||||||||
Long-lived asset valuation allowances (Note B) | - | - | 6,550 | |||||||
Depreciation and amortization | 606 | 2,700 | 1,642 | |||||||
Non cash write off | 1,062 | - | - | |||||||
Non cash interest | 104 | - | - | |||||||
Write off of fixed assets | 153 | - | - | |||||||
Accounts receivable and inventory impairment (Note R) | - | 2,412 | 4,816 | |||||||
Warrants issued in conjunction with credit facility | - | 42 | - | |||||||
Gain on extinguishment of convertible note | (134 | ) | ||||||||
Issuance of common stock in payment of liabilities | 100 | 80 | - | |||||||
Changes in assets and liabilities net of effects of business entity acquisition: | ||||||||||
(Increase) decrease in accounts receivable | 648 | 2,720 | 911 | |||||||
(Increase) decrease in due from affiliates | - | - | 753 | |||||||
(Increase) decrease in inventories | (538 | ) | (1,582 | ) | 317 | |||||
(Increase) decrease in prepaid and other current assets | 17 | 65 | 390 | |||||||
Increase (decrease) in accounts payable | (1,722 | ) | (722 | ) | (2,246 | ) | ||||
Increase (decrease) in accrued expenses | (1,474 | ) | (2,620 | ) | 1,231 | |||||
Increase (decrease) in other current liabilities | 196 | - | (1,917 | ) | ||||||
NET CASH PROVIDED BY (USED IN) CONTINUING OPERATING ACTIVITIES | 760 | (4,154 | ) | (8,682 | ) | |||||
CASH FLOWS USED IN INVESTING ACTIVITIES: | ||||||||||
Proceeds from (purchase of) property and equipment | (26 | ) | (2,055 | ) | (1,627 | ) | ||||
Net assets acquired in merger | - | - | 7,636 | |||||||
Short-term investments | (45 | ) | - | - | ||||||
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | (71 | ) | (2,055 | ) | 6,009 | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||
Acquisition of beneficial conversion feature (Note G) | (259 | ) | - | - | ||||||
Advances from former parent company, net of repayments | - | - | 3,700 | |||||||
Proceeds from issuances of common stock (Note J) | 4 | 8,025 | ||||||||
Net proceeds from short-term debt (Note D) | (211 | ) | (2,882 | ) | 1,304 | |||||
Proceeds (repayment) from long-term debt, net (Note G) | 30 | 250 | - | |||||||
Repayment of capital lease obligations (Note H) | (143 | ) | (414 | ) | (384 | ) | ||||
Net change in restricted cash | - | - | (300 | ) | ||||||
Proceeds from exercise of stock options (Note K) | - | - | 169 | |||||||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | (579 | ) | (3,046 | ) | 12,514 | |||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 110 | (9,255 | ) | 9,841 | ||||||
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR | 698 | 9,953 | 112 | |||||||
CASH AND CASH EQUIVALENTS - END OF YEAR | $ | 808 | $ | 698 | $ | 9,953 | ||||
See accompanying notes to consolidated financial statements. |
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
Item | Amount (millions) | Description |
Inventory impairment | $ 2.2 | This adjustment records a full reserve against the cost basis of Sync’s inventory based upon the intent to abandon the inventory. This assumes that as a discontinued operation, the inventory value is zero as the need to dispose of inventory would result in minimal return. |
Severance | 1.1 | This adjustment records the costs associated with the termination of our employees and assumes the elimination of all of the Sync employees: 45 people including 8 change of control/contract personnel. |
Vendor payables | 1.1 | We recorded an accrual for costs due and payable under the termination provisions of an agreement with a contract manufacturing vendor. |
Lease termination accrual | 0.7 | We recorded an accrual for the remaining lease costs and lease related costs for the physical location of the discontinued operations, net of sub lease income. |
Goodwill impairment | 4.3 | Assumes 4.2 million shares at $2.75 per share offset by the valuation of Sync Research of $8.4 million at August 30, 2000 with the addition of $1.1 million merger expenses. |
Fixed asset impairment | 1.0 | This adjustment assumed that the Sync fixed asset book value would be fully reserved as a discontinued operation due to the abandonment of fixed assets. |
Total Loss | $10.4 | |
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
2003 | 2002 | ||||||
Raw material | $ | 3,736 | $ | 6,599 | |||
Work in process | 163 | 27 | |||||
Finished goods | 3,486 | 2,932 | |||||
Total Inventory | 7,385 | 9,558 | |||||
Less: Valuation reserve | (3,809 | ) | (5,459 | ) | |||
Total Net Inventory | $ | 3,576 | $ | 4,099 | |||
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
Fiscal Year | ||||||||||
| 2003 | 2002 | 2001 | |||||||
Net income (loss) As reported: | $ | 1,742 | $ | (7,249.00 | ) | $ | (21,129.00 | ) | ||
Add: Stock based employee compensation expense | - | - | - | |||||||
Deduct: Total stock based employee compensation expense determined under fair value method | $ | (5 | ) | $ | (836.00 | ) | $ | (287.00 | ) | |
Pro forma Income (loss) per share: | $ | 1,727 | $ | (8,085.00 | ) | $ | (21,416.00 | ) | ||
Basic and diluted EPS as reported | $ | 0.14 | $ | (0.66) | ) | $ | (2.98 | ) | ||
Pro forma basic and diluted EPS | $ | 0.13 | $ | (0.74 | ) | $ | (3.02 | ) |
New Accounting Pronouncements
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
2003 | 2002 | ||||||
Manufacturing, engineering and plant equipment and software | $ | 8,471 | $ | 8,547 | |||
Office furniture and fixtures | 275 | 299 | |||||
Leasehold and building improvements | 249 | 523 | |||||
Less: Accumulated depreciation and amortization | (7,922 | ) | (7,562 | ) | |||
Total property and equipment | 8,995 | 9,369 | |||||
Net book value | $ | 1,073 | $ | 1,807 |
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
2003 | 2002 | ||||||
Floating interest rate loan based on 2.5% over lender’s | |||||||
prime rate secured by all of our tangible assets | $ | 474 | $ | 686 | |||
Fiscal Year | |||||||
|
| 2003 |
|
| 2002 | ||
Payroll and employee benefits | $ | 202 | $ | 765 | |||
Severance | - | 150 | |||||
Deferred revenue | - | 325 | |||||
Deferred maintenance | 559 | 336 | |||||
Legal | - | 125 | |||||
Office lease | 257 | 386 | |||||
Other | 391 | 573 | |||||
Total | $ | 1,409 | $ | 2,660 | |||
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
2003 | 2002 | ||||||
$250 senior convertible note bearing interest at | |||||||
10% per annum due January 29, 2004. Monthly | |||||||
interest payments with principal due upon maturity. The | |||||||
note was convertible into 1,923,077 shares of our common stock | |||||||
at $0.13 per share. The issuance of warrants with the debt which | |||||||
was convertible into 1,923,077 shares of our common | |||||||
stock at $0.13 per share expiring January 29, 2007 resulted | |||||||
in a beneficial conversion feature to the note holder. We | |||||||
recorded the debt net of a discount of $229 resulting from | |||||||
the value attributed to the warrants issued with the note | |||||||
and the beneficial conversion feature. We repaid the note | |||||||
on January 17,2003. | $ | - | $ | 21 | |||
Obligations under finance leases (See Note H) | 68 | 121 | |||||
Sub Total | 68 | 142 | |||||
Less: Current portion | 68 | 115 | |||||
$ | - | $ | 27 | ||||
Capital | Operating | ||||||
Leases | Leases | ||||||
2004 | $ | 68 | $ | 632 | |||
2005 | - | 544 | |||||
2006 | - | 306 | |||||
Thereafter | - | - | |||||
Total | 68 | $ | 1,482 | ||||
Less: Amount representing interest | 1 | ||||||
Present value of minimum annual rentals | $ | 67 | |||||
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
50,000,000 shares of Common Stock ($.001 par value) | |
2,000,000 shares of Preferred Stock ($.001 par value) |
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
Weighted Average | |||||||
Number of Shares | Exercise Price | ||||||
Shares under option at January 31, 2000 | - | $ | - | ||||
Deemed granted due to merger (Note A) | 646,902 | $ | 3.65 | ||||
Granted | 2,974,350 | $ | 4.08 | ||||
Exercised | ( 72,506 | ) | $ | 2.24 | |||
Canceled | ( 141,399 | ) | $ | 3.06 | |||
Shares under option at January 31, 2001 | 3,407,347 | $ | 4.08 | ||||
Granted | 1,376,400 | $ | 0.61 | ||||
Canceled | (1,777,981 | ) | $ | 3.39 | |||
Shares under option at January 31, 2002 | 3,005,766 | $ | 2.89 | ||||
Granted | 85,500 | $ | 0.14 | ||||
Cancelled | (1,584,524 | ) | $ | 3.59 | |||
Shares under option at January 31, 2003 | 1,506,742 | $ | 2.65 | ||||
Outstanding | Exercisable | |||||||||||||||
| Weighted Average | Weighted Average | ||||||||||||||
Exercise PricePer Share | Shares | Life (Years | ) | Exercise Price | Shares | Exercise Price | ||||||||||
$0.10 - $0.11 | 263,250 | 8.67 | $ | 0.11 | 219,532 | $ | 0.11 | |||||||||
$0.15 - $0.15 | 450,000 | 8.75 | $ | 0.15 | 175,000 | $ | 0.15 | |||||||||
$0.17 – $3.19 | 302,692 | 7.79 | $ | 1.53 | 237,276 | $ | 1.87 | |||||||||
$4.00- $5.00 | 439,300 | 7.60 | $ | 4.57 | 439,263 | $ | 4.57 | |||||||||
$5.63 - $20.00 | 51,500 | 4.87 | $ | 9.24 | 51,500 | $ | 9.24 | |||||||||
|
|
|
| |||||||||||||
$0.10 - $20.00 | 1,506,742 | 8.07 | $ | 2.02 | 1,122,571 | $ | 2.65 | |||||||||
2003 | 2002 | |
Risk free interest rate | 4.1% | 5.0% |
Stock volatility factor | 196% | 190% |
Weighted average expected option life | 8.07 years | 8.82 years |
Expected dividend yield | 0.0% | 0.0% |
Fair value of options granted | $0.01 to $0.16 | $0.01 to $2.94 |
Weighted average fair value of options granted | $0.13 | $0.61 |
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
2003 | 2002 | 2001 | ||||||||
Net income (loss) available to common shareholders used in basic EPS | $ | 1,742 | $ | (7,249 | ) | $ | (21,129 | ) | ||
Average number of common shares used in basic EPS | 12,800,555 | 10,994,240 | 7,082,659 |
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
2003 |
|
| 2002 |
|
| 2001 | |||||||
Net income (loss) available to common shareholders | |||||||||||||
used in basic EPS | $ | 1,742 | $ | (7,249 | ) | $(21,129) | |||||||
Average number of common shares used in basic EPS | 12,800,555 | 10,994,240 | 7,082,659 | ||||||||||
Effect of dilutive securities: stock benefit plan | 84,134 | - | - | ||||||||||
Average number of common shares and dilutive | |||||||||||||
potential common stock used in diluted EPS | 12,884,689 | 10,994,240 | 7,082,659 |
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
Percent net revenues | Percent net receivables | ||||||||||||||||||
Fiscal years ended January 31, | Fiscal years ended January 31, | ||||||||||||||||||
Description | 2003 | 2002 | 2001 | 2003 | 2002 | 2001 | |||||||||||||
Cisco | 56.9 | % | 19.6 | % | 40.0 | % | 45.9 | % | 47.0 | % | 37.0 | % | |||||||
MCI WorldCom | - | - | - | 31.9 | - | - | |||||||||||||
Ingram Micro | - | - | - | 10.9 | - | - | |||||||||||||
Wells Fargo Bank - | - | - | - | 14.2 | - | ||||||||||||||
Solectron | - | 11.3 | 25.2 | - | 11.7 | - | |||||||||||||
Avnet | - | - | - | - | - | 12.6 | |||||||||||||
Motorola | - | - | - | - | - | 12.1 |
ENTRADA NETWORKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, except share and per share amounts) |
Balance at January 31, 2000 | $ | 2,026 | ||
Additions charged to costs and expenses | 3,288 | |||
Amounts used during year | (1,974 | ) | ||
Balance at January 31, 2001 | 3,340 | |||
Additions charged to costs and expenses | 2,200 | |||
Amounts used during year | (81 | ) | ||
Balance at January 31, 2002 | 5,459 | |||
Additions charged to costs and expenses | 1,062 | |||
Amounts used during year | (2712 | ) | ||
Balance at January 31, 2003 | $ | 3,809 | ||
Balance at January 31, 2000 | 449 | |||
Additions charged to costs and expenses | 1,528 | |||
Amounts used during year | ( 1,577 | ) | ||
Balance at January 31, 2001 | 400 | |||
Additions charged to costs and expenses | 692 | |||
Amounts used during year | ( 335 | ) | ||
Balance at January 31, 2002 | 757 | |||
Additions charged to costs and expenses | 16 | |||
Amounts used during year | ( 561 | ) | ||
Balance at January 31, 2003 | 212 | |||
____________________________________ ____________________________________ We have not authorized any dealer, sales person or other person to give any information or represent anything contained in this prospectus. You must not rely on any unauthorized information. This prospectus is not an offer to sell, or a solicitation of an offer to buy, securities in any jurisdiction where it is unlawful. The information contained in this prospectus is current as of February 4, 2004 _______________________________________ _______________________________________ | _______________________________ _______________________________ 3,000,000 Shares ENTRADA NETWORKS, INC. Common Stock _______________ PROSPECTUS _______________ February_____, 2004 ______________________________ ______________________________ |
Item | Amount | |||
Securities and Exchange Commission Registration Fee | $ | 57.01 | ||
Printing and Engraving Expenses | $ | 5,000.00 | ||
Accountants' Fees and Expenses | $ | 15,000.00 | ||
Legal Fees and Expenses | $ | 15,000.00 | ||
Miscellaneous | $ | 1,000.00 | ||
Total | $ | 36,057.01 |
_____________________________________________________________________________ |
_____________________________________________________________________________ |
By:/s/ Kanwar J.S. Chadha |
Kanwar J.S. Chadha, Ph.D., |
Chief Executive Officer |
_____________________________________________________________________________ |
Signature | Title | Date |
By:/s/ Kanwar J.S. Chadha | Chairman, President, Director, | February 9, 2004 |
Kanwar J.S. Chadha, Ph.D. | Chief Executive Officer | |
By:/s/ Leonard Hecht | Director | February 9, 2004 |
Leonard Hecht | ||
By:/s/ Rohit Phansalkar | Director | February 9, 2004 |
Rohit Phansalkar | ||
By:/s/ Davinder Sethi | Vice Chairman, CFO, | February 9, 2004 |
Davinder Sethi, Ph.D. | Principal Accounting Officer, | |
Director | ||
By: | Director | February 9, 2004 |
Raymond Ngan |