Exhibit 99.1
Report of Independent Certified Public Accountants
Board of Directors and Stockholders
Ibertech, Inc. and Subsidiaries
We have audited the accompanying consolidated balance sheets of Ibertech, Inc. and subsidiaries (the Company) as of September 26, 2003 and September 27, 2002, and the related consolidated statements of earnings and comprehensive earnings, stockholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Ibertech, Inc. and subsidiaries, as of September 26, 2003 and September 27, 2002, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
/s/ Grant Thornton LLP
Dallas, Texas
March 11, 2004
Ibertech, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
| September 26, 2003 | September 27, 2002 | |||||||
| ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 4,738,214 | $ | 5,303,550 | ||||
Accounts receivable, less allowances for doubtful accounts and returns of $400,019 and $296,517 in fiscal years 2003 and 2002, respectively | 3,915,728 | 3,605,091 | ||||||
Inventories | 58,032 | 83,079 | ||||||
Prepaid expenses and other | 381,426 | 344,338 | ||||||
Total current assets | 9,093,400 | 9,336,058 | ||||||
Property and equipment, net | 676,164 | 731,865 | ||||||
Capitalized software costs, net | 2,632,376 | 1,790,669 | ||||||
Other assets, net | 28,211 | 8,707 | ||||||
Total assets | $ | 12,430,151 | $ | 11,867,299 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Current portion capital leases payable | $ | 82,980 | $ | 93,172 | ||||
Current debt | 10,000 | — | ||||||
Accounts payable | 315,579 | 496,417 | ||||||
Accrued expenses | 2,420,791 | 1,149,522 | ||||||
Deferred revenue | 5,260,133 | 3,683,726 | ||||||
Total current liabilities | 8,089,483 | 5,422,837 | ||||||
CAPITAL LEASES PAYABLE | 63,582 | 147,121 | ||||||
STOCKHOLDERS’ EQUITY | ||||||||
Common stock, no par value, 20,000,000 shares authorized, 15,463,925 shares issued and outstanding at September 26, 2003 and September 27, 2002 | 43,086 | 43,086 | ||||||
Accumulated other comprehensive loss | (40,996 | ) | (24,517 | ) | ||||
Retained earnings | 4,274,996 | 6,278,772 | ||||||
Total stockholders’ equity | 4,277,086 | 6,297,341 | ||||||
Total liabilities and stockholders’ equity | $ | 12,430,151 | $ | 11,867,299 | ||||
The accompanying notes are an integral part of these statements.
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Ibertech, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS
| Years ended | ||||||||
| September 26, 2003 | September 27, 2002 | |||||||
Revenues | ||||||||
Software license fees and hardware sales | $ | 12,041,985 | $ | 10,729,664 | ||||
Services and support revenue | 11,790,309 | 8,990,194 | ||||||
Total revenue | 23,832,294 | 19,719,858 | ||||||
Operating costs and expenses | ||||||||
Cost of software license fees and hardware sales | 991,449 | 727,647 | ||||||
Costs of services | 3,835,082 | 2,646,917 | ||||||
Software development costs | 4,484,352 | 4,813,865 | ||||||
Sales and marketing | 5,558,672 | 4,674,392 | ||||||
General and administrative | 4,822,410 | 3,155,862 | ||||||
Depreciation and amortization | 1,000,635 | 1,148,754 | ||||||
Total operating costs and expenses | 20,692,600 | 17,167,437 | ||||||
Other income | 2,101,900 | — | ||||||
Interest income | 46,767 | 22,103 | ||||||
Net earnings | 5,288,361 | 2,574,524 | ||||||
Other comprehensive losses - foreign currency translation adjustments | (16,479 | ) | (24,517 | ) | ||||
Comprehensive earnings | $ | 5,271,882 | $ | 2,550,007 | ||||
The accompanying notes are an integral part of these statements.
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Ibertech, Inc. and Subsidiaries
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
Years ended September 26, 2003 and September 27, 2002
| Common stock | Accumulated other comprehensive loss | Retained earnings | Total stockholders’ equity | ||||||||||||||
| Shares | Amount | ||||||||||||||||
Balances at September 28, 2001 | 15,000,000 | $ | 24,529 | $ | — | $ | 4,904,248 | $ | 4,928,777 | ||||||||
Stock options exercised | 463,925 | 18,557 | — | — | 18,557 | ||||||||||||
Distributions to stockholders | — | — | — | (1,200,000 | ) | (1,200,000 | ) | ||||||||||
Comprehensive earnings | (24,517 | ) | 2,574,524 | 2,550,007 | |||||||||||||
Balances at September 27, 2002 | 15,463,925 | 43,086 | (24,517 | ) | 6,278,772 | 6,297,341 | |||||||||||
Distributions to stockholders | — | — | — | (7,292,137 | ) | (7,292,137 | ) | ||||||||||
Comprehensive earnings | — | — | (16,479 | ) | 5,288,361 | 5,271,882 | |||||||||||
Balances at September 26, 2003 | 15,463,925 | $ | 43,086 | $ | (40,996 | ) | $ | 4,274,996 | $ | 4,277,086 | |||||||
The accompanying notes are an integral part of these statements.
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Ibertech, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Years ended | ||||||||
| September 26 2003 | September 27, 2002 | |||||||
Cash flows from operating activities | ||||||||
Net earnings | $ | 5,288,361 | $ | 2,574,524 | ||||
Adjustments to reconcile net earnings to net cash provided by operating activities | ||||||||
Depreciation | 418,421 | 505,106 | ||||||
Amortization | 582,214 | 643,648 | ||||||
Provision for uncollectible accounts receivable | 150,347 | 109,896 | ||||||
Changes in operating assets and liabilities | ||||||||
Accounts receivable | (460,984 | ) | (582,488 | ) | ||||
Inventories | 25,047 | 33,312 | ||||||
Prepaid expenses and other assets | (69,734 | ) | (73,542 | ) | ||||
Accounts payable and accrued expenses | 1,090,432 | 276,326 | ||||||
Customer deposits | — | (148,352 | ) | |||||
Deferred revenue | 1,576,406 | 1,704,924 | ||||||
Net cash provided by operating activities | 8,600,510 | 5,043,354 | ||||||
Cash flows from investing activities | ||||||||
Acquisition of software | (279,500 | ) | — | |||||
Development of software | (1,044,421 | ) | (481,691 | ) | ||||
Purchases of property and equipment | (349,578 | ) | (66,665 | ) | ||||
Net cash used in investing activities | (1,673,499 | ) | (548,356 | ) | ||||
Cash flows from financing activities | ||||||||
Distributions to stockholders | (7,292,137 | ) | (1,200,000 | ) | ||||
Payments on debt | (90,000 | ) | — | |||||
Payments on capital leases | (93,731 | ) | (123,374 | ) | ||||
Exercise of stock options | — | 18,557 | ||||||
Net cash used in financing activities | (7,475,868 | ) | (1,304,817 | ) | ||||
Effect of exchange rate changes on cash | (16,479 | ) | (24,517 | ) | ||||
Net increase in cash and cash equivalents | (565,336 | ) | 3,165,664 | |||||
Cash and cash equivalents at beginning of year | 5,303,550 | 2,137,886 | ||||||
Cash and cash equivalents at end of year | $ | 4,738,214 | $ | 5,303,550 | ||||
Supplemental cash flow information | ||||||||
Cash paid during the year for: | ||||||||
Interest | $ | 16,380 | $ | 31,023 | ||||
Income taxes | $ | — | $ | — | ||||
Noncash transactions: | ||||||||
Purchase of software through debt | $ | 100,000 | $ | — | ||||
Purchase of computer equipment through capital leases | $ | — | $ | 76,577 | ||||
The accompanying notes are an integral part of these statements.
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Ibertech, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 26, 2003 and September 27, 2002
NOTE A - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business
Ibertech, Inc. and Subsidiaries (the “Company”) develops and markets proprietary software systems primarily to the restaurant and hospitality industries across the United States of America, Europe, South America and Asia. The Company’s software applications consist principally of point-of-sale (POS) systems, back office systems and management reporting systems, which are sold separately or are integrated with hardware from third-party vendors. The Company was incorporated in 1992 in the state of Texas.
Principles of Consolidation
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany accounts have been eliminated.
Cash Equivalents
Cash equivalents consist of short-term highly liquid investments with original maturities of three months or less.
Accounts Receivable
The majority of the Company’s accounts receivable are due from retail customers. Credit is extended based on evaluation of a customers’ financial condition. Accounts receivable are due within 30 days (90 days for select customers) and are stated at amounts due from customers net of an allowance for doubtful accounts. Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and the industry as a whole. The Company writes-off accounts receivable when they become uncollectible.
Inventories
Inventories are stated at a lower of cost or market and are comprised primarily of computer equipment. Cost is determined using the specific identification method.
Property and Equipment
Property and equipment are stated at cost. Depreciation on computer and office equipment and furniture and fixtures is calculated using the straight-line method over the estimated useful lives of the assets, ranging from four to five years. Leasehold improvements are amortized straight-line over the shorter of the lease term or estimated useful life of the asset, ranging from five to six years.
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Ibertech, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 26, 2003 and September 27, 2002
NOTE A - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
Revenue Recognition
Revenue from software license fees is recognized when the following criteria have been met:
| (a) | a written contract or purchase order is executed; |
| (b) | the software has been delivered to the customer; |
| (c) | the license fees are fixed and determinable; and |
| (d) | collection is probable. |
Revenue from sales of hardware products is recognized upon shipment. Reserves from estimated sales returns and allowances are recorded in the same period as the related revenues.
Postcontract customer support or maintenance revenues combined with software license fees are unbundled based on vendor specific evidence of fair value and recognized ratably over the service period. Service revenues are derived from the Company’s consulting services. These revenues primarily relate to time and material contracts, which are recognized as services are performed.
Deferred revenue represents billings on annual maintenance and support agreements with customers. Customer deposits represent advances from customers for future services or future delivery of products.
Translation of Foreign Currencies
Assets and liabilities recorded in functional currencies other than U.S. dollars are translated into U.S. dollars at the year-end rate of exchange. Revenue and expenses are translated at the weighted-average exchange rates for the year. The resulting translation adjustments are charged or credited to other comprehensive income. Translation adjustments were $16,479 and $24,517 for the years ended September 26, 2003 and September 27, 2002, respectively. Gains or losses from foreign currency transactions, such as those resulting from the settlement of receivables or payables denominated in foreign currency, are included in net earnings.
Capitalized Software and Software Development Cost
Research and development expenses, other than certain software development costs, are charged to expense as incurred. In accordance with the provisions of Statement of Financial Accounting Standards No. 86, “Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed” (“Statement No. 86”), the Company capitalizes certain software development costs upon achieving technological feasibility, as defined by Statement No. 86. Capitalization of such costs ceases upon commercial release of the related software product.
Capitalized software development costs are amortized on a straight-line basis over five years or the ratio of current product revenue to anticipated product revenue, whichever is greater. Software development costs of $1,044,421 and $481,691 were capitalized in fiscal years 2003 and 2002, respectively.
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Ibertech, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 26, 2003 and September 27, 2002
NOTE A - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
Acquired software and other intangibles are amortized on a straight-line basis ranging from three to five years.
The Company evaluates the recoverability of acquired software and other intangibles whenever significant events or changes occur which might impair recovery of recorded costs, net of amortization.
Fair Value of Financial Instruments
Statement of Financial Accounting Standards (“SFAS”) No. 107, “Disclosures about Fair Value of Financial Instruments,” requires disclosure of fair value information about financial instruments, whether or not recognized in the accompanying consolidated financial statements. Considerable judgment is required in interpreting market data to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. The carrying amounts of the Company’s financial instruments, which include cash, receivables and obligations under accounts payable and debt instruments, approximate their fair values, based on similar instruments with similar risks.
Stock Based Compensation
The Company applies the provisions of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (APB 25) and the related interpretations in accounting for its stock options granted to employees using the intrinsic value method. Compensation cost for stock options granted to employees is measured as the excess, if any, of the fair market value of the Company’s common stock at the date of the grant over the amount an employee must pay to acquire the stock.
If compensation costs for these plans had been determined based on the fair value at the grant dates for awards under the plans consistent with the method of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”) and Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure: an amendment of FASB Statement 123” (“SFAS 148”), the Company’s net earnings would have been the pro forma amounts indicated below:
| Fiscal Year | ||||||
| 2003 | 2002 | |||||
Net earnings | ||||||
As reported | $ | 5,288,361 | $ | 2,574,524 | ||
Less: pro forma compensation determined under the fair value method | 583,501 | 227,733 | ||||
Pro forma | $ | 4,704,860 | $ | 2,346,791 | ||
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Ibertech, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 26, 2003 and September 27, 2002
NOTE A - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
The pro forma compensation cost for the fair value of options granted was estimated on the date of grant using the following assumptions:
| 2003 | 2002 | |||||
Dividend yield | — | % | — | % | ||
Average risk-free interest rate | 3.8 | 3.6 | ||||
Expected term in years | 7.0 | 7.0 | ||||
Volatility | 84 | % | 84 | % |
Shipping and Handling Fees
Shipping and handling fees are included as a component of cost of software license fees and hardware sales.
Advertising Costs
Advertising costs are expensed as incurred. Advertising expense was $470,837 and $326,857 in 2003 and 2002, respectively.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. These estimates include allowance for doubtful accounts and sales returns. Actual results could differ from those estimates.
Income Taxes
Income taxes on net earnings are payable personally by the stockholders pursuant to an election under subchapter S of the Internal Revenue Code. Accordingly, no provision has been made for federal income taxes.
Fiscal Year
The Company uses a 52-53 week year end, ending on the Friday closest to September 30. Fiscal 2003 and 2002 were 52-week fiscal years.
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Ibertech, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 26, 2003 and September 27, 2002
NOTE B - ACCOUNTS RECEIVABLE
Trade receivables relate to sales of software, customer support and maintenance, for which credit is extended based on the customer’s credit history.
Changes in the Company’s allowance for doubtful accounts are as follows:
| 2003 | 2002 | |||||||
Beginning balance | $ | 202,564 | $ | 160,798 | ||||
Bad debt provision | 150,347 | 109,896 | ||||||
Accounts written-off | (80,627 | ) | (68,130 | ) | ||||
Ending balance | $ | 272,284 | $ | 202,564 | ||||
NOTE C - PROPERTY AND EQUIPMENT
Property and equipment at September 26, 2003 and September 27, 2002 consists of the following:
| 2003 | 2002 | |||||||
Computer and office equipment | $ | 2,422,779 | $ | 2,087,285 | ||||
Furniture and fixtures | 449,694 | 444,903 | ||||||
Leasehold improvements | 18,166 | 18,166 | ||||||
| 2,890,639 | 2,550,354 | |||||||
Less accumulated depreciation | (2,214,475 | ) | (1,818,489 | ) | ||||
| $ | 676,164 | $ | 731,865 | |||||
Property and equipment under capital lease had a carrying value of $124,293 and $216,944 as of September 26, 2003 and September 27, 2002, respectively.
NOTE D - CAPITALIZED SOFTWARE COSTS
Capitalized software costs at September 26, 2003 and September 27, 2002 consists of the following:
| 2003 | 2002 | |||||||
Capitalized software costs | $ | 6,429,430 | $ | 5,005,509 | ||||
Less accumulated amortization | (3,797,054 | ) | (3,214,840 | ) | ||||
| $ | 2,632,376 | $ | 1,790,669 | |||||
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Ibertech, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 26, 2003 and September 27, 2002
NOTE E - RELATED PARTIES
The Company has entered into transactions with two related entities, Exigency LLC and Sapience LLP. The Company’s principal stockholders are the principal owners of Exigency LLC and Sapience LLP. Exigency LLC serves as general partner for Sapience LLP. At September 26, 2003 and September 27, 2002, the Company had a receivable from Sapience LLP of $-0- and $11,382, respectively.
Sapience LLP leases a building to the Company under an operating lease, which expires in 2005 with minimum annual payments of $652,020. Rent expense was $709,733 and $654,957 for the fiscal years ended September 26, 2003 and September 27, 2002, respectively. The lease agreement requires the parties to mutually agree to annual lease payments based on prevailing market rates that are not expected to be less than $652,020.
In January 2003, the Financial Accounting Standards Board issued Interpretation 46,Consolidation of Variable Interest Entities (“FIN 46”), which is effective for the Company’s fiscal year ending September 2006. The Company has not determined whether the leases with the related entity will qualify under FIN 46, nor has it determined the impact FIN 46 will have on its financial position or its results of operations.
NOTE F - COMMITMENTS
In addition to the Company’s operating lease for its facilities, the Company has capital leases for certain equipment.
Future minimum payments, by year and in the aggregate, under capital and operating leases consisted of the following at September 26, 2003:
| Capital | Operating | ||||||
2004 | $ | 89,001 | $ | 652,020 | |||
2005 | 68,312 | 652,020 | |||||
Future minimum lease payments | 157,313 | $ | 1,304,040 | ||||
Amounts representing interest | (10,751 | ) | |||||
Present value of minimum lease payments | 146,562 | ||||||
Less current portion | (82,980 | ) | |||||
| $ | 63,582 | ||||||
Rent expense was $751,396 and $734,652 for the fiscal years ended September 26, 2003 and September 27, 2002, respectively.
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Ibertech, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 26, 2003 and September 27, 2002
NOTE G - 401(k) PLAN
The Company has a 401(k) salary deferral plan that covers all employees who have reached the age of 21 years and have been employed by the Company for at least six months. The covered employees may elect to have an amount deducted from their wages for investment in a retirement plan. The Company makes contributions to the plan equal to 50% of each participant’s salary reduction contributions to the plan up to 6% of the participant’s compensation. The Company’s matching contribution to the plan was $171,079 and $158,639 for 2003 and 2002, respectively.
NOTE H - CONCENTRATION OF CREDIT RISK
The Company sells its software and related services to the restaurant and hospitality industry. Accordingly, economics in this industry could have a negative impact on the Company. The Company requires no collateral from its customers; however, management performs ongoing credit evaluations of its customers’ financial condition. During 2002 and 2003, no customer accounted for 10% or more of the Company’s revenues.
NOTE I - STOCK OPTIONS
At September 26, 2003, the Company had two stock-based compensation plans: the Stock Option Plan of Ibertech, Inc. adopted on October 1, 1996 (the “1996 Plan”) and the 2001 Stock Option Plan of Ibertech, Inc. (the “2001 Plan”). Under the 1996 Plan, the Company may grant options to Ibertech, Inc.’s key employees, including officers and directors, for up to 1,875,000 shares of the Company’s common stock. Under the 2001 Plan, the Company may grant options for up to 3,000,000 shares of the Company’s common stock to key employees, including officers and directors, of Ibertech, Inc. and Aloha Technologies, LTD, a limited partnership of which Ibertech, Inc. is the general partner. Under both plans, the exercise price of each option shall not be less than the fair market value of the Company’s common stock at the time of grant. Under the 1996 Plan and 2001 Plan, the option’s maximum term is 15 and 10 years, respectively. Under both plans the options granted generally vest within a five year period. The compensation committee of the Board of Directors administers the plans.
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Ibertech, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 26, 2003 and September 27, 2002
NOTE I - STOCK OPTIONS - Continued
A summary of the status of the Company’s plans as of September 26, 2003 and September 27, 2002 and changes during those years is presented below:
| 1996 Plan | 2001 Plan | ||||||||||
| Shares | Weighted average exercise price | Shares | Weighted average exercise price | ||||||||
Outstanding at September 28, 2001 | 1,183,932 | $ | 0.70 | — | $ | — | |||||
Granted (weighted average fair value $2.28) | — | — | 208,000 | 2.96 | |||||||
Exercised | (463,925 | ) | 0.04 | — | — | ||||||
Forfeited | (120,007 | ) | 0.43 | — | — | ||||||
Outstanding at September 27, 2002 | 600,000 | 1.26 | 208,000 | 2.96 | |||||||
Granted (weighted average fair value $2.57) | — | — | 220,000 | 3.34 | |||||||
Exercised | — | — | — | — | |||||||
Forfeited | — | — | — | — | |||||||
Outstanding at September 26, 2003 | 600,000 | $ | 1.26 | 428,000 | $ | 3.15 | |||||
Options vested at | |||||||||||
September 27, 2002 | 300,000 | 50,000 | |||||||||
September 26, 2003 | 487,500 | 50,000 | |||||||||
Options available for future grants at | |||||||||||
September 26, 2003 | 811,075 | 2,572,000 | |||||||||
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Ibertech, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 26, 2003 and September 27, 2002
NOTE I - STOCK OPTIONS - Continued
Information about stock options outstanding at September 26, 2003 is summarized as follows:
Options outstanding | Options exercisable | |||||||||||
Range of exercise price | Number outstanding | Weighted average remaining contractual life | Weighted average exercise price | Number exercisable | Weighted average exercise price | |||||||
1996 Plan | ||||||||||||
$0.33 to $0.75 | 187,500 | 5.5 | $ | 0.58 | 187,500 | $ | 0.58 | |||||
$1.00 to $1.41 | 187,500 | 5.5 | 1.25 | 187,500 | 1.25 | |||||||
$1.67 to $2.00 | 225,000 | 5.5 | 1.84 | 112,500 | 1.67 | |||||||
2001 Plan | ||||||||||||
$2.70 | 123,000 | 8 | $ | 2.70 | 50,000 | $ | 2.70 | |||||
$3.32 to $3.34 | 305,000 | 8.7 | 3.35 | — | — | |||||||
NOTE J - OTHER INCOME
During March of 2003 the Company received a settlement for litigation. The net proceeds to the Company after attorney’s fees and out of pocket expenses was $2,101,900.
NOTE K - SUBSEQUENT EVENTS
On January 13, 2004, the Company sold substantially all of its assets to Radiant Systems, Inc. The purchase price consisted of $11 million in cash, a five-year note in the principal amount of $19 million (subject to a post-closing adjustment) bearing interest at the prime rate as published in The Wall Street Journal plus one percentage point, a one-year note in the principal amount of $1.7 million bearing interest at the same rate, 2,353,946 shares of the acquirer’s restricted common stock and the assumption of the Company’s accounts payable, contractual obligations and other certain liabilities.
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