-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MAO43tx9UX2Ue0Z2M8oqQcbrJCzc8rnjonDCQGfSKcXzri3KajyJZ3SR1JldFp3/ l1zGtBcBdt9+ANuWQay5ZQ== 0000950135-96-003604.txt : 19960816 0000950135-96-003604.hdr.sgml : 19960816 ACCESSION NUMBER: 0000950135-96-003604 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMPUTER IDENTICS CORP /MA/ CENTRAL INDEX KEY: 0000023023 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER PERIPHERAL EQUIPMENT, NEC [3577] IRS NUMBER: 042443539 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11704 FILM NUMBER: 96612018 BUSINESS ADDRESS: STREET 1: 5 SHAWMUT RD CITY: CANTON STATE: MA ZIP: 02021 BUSINESS PHONE: 6178210830 MAIL ADDRESS: STREET 1: 5 SHAWMUT ROAD CITY: CANTON STATE: MA ZIP: 02021 10-Q 1 COMPUTER IDENTICS CORPORATION 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 ------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to _________________________________ Commission File Number 0-11704 ------- COMPUTER IDENTICS CORPORATION ----------------------------- (Exact name of registrant as specified in its charter) Massachusetts 04-2443539 - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5 Shawmut Road, Canton, Massachusetts 0202l ------------------------------------------- (Address of principal executive offices) (Zip Code) (617) 821-0830 ---------------------------------------------------- (Registrant's telephone number, including area code) ---------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at June 30, 1996 - ---------------------------- ---------------------------- Common Stock, $.l0 par value 10,872,293 2 COMPUTER IDENTICS CORPORATION TABLE OF CONTENTS ----------------- Page PART 1. FINANCIAL INFORMATION - ------------------------------- ITEM 1. FINANCIAL STATEMENTS.................................... 1 Condensed Consolidated Balance Sheets -- June 30, 1996, and December 31, 1995.................... 1 Condensed Consolidated Statements of Operations -- Three and Six Months ended June 30, 1996, and June 30, 1995........................................... 2 Condensed Consolidated Statements of Cash Flows -- Six Months ended June 30, 1996, and June 30, 1995........................................... 3 Notes to Condensed Consolidated Financial Statements ... 4 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS .......... 5 PART II. OTHER INFORMATION - --------------------------- ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..... 8 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K........................ 9 3 COMPUTER IDENTICS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS JUNE 30, 1996 AND DECEMBER 31, 1995 (UNAUDITED)
JUNE 30, December 31, (IN THOUSANDS, EXCEPT SHARE AMOUNTS) 1996 1995 - ------------------------------------------------------------------------------------------- ASSETS Current Assets: Cash and cash equivalents $ 1,668 $ 1,752 Accounts receivable (less allowance for doubtful accounts of $270 in 1996 and $225 in 1995) 5,730 6,062 Inventory 4,001 3,625 Other 476 380 - ------------------------------------------------------------------------------------------- Total current assets 11,875 11,819 - ------------------------------------------------------------------------------------------- Property and equipment: Equipment 3,518 3,674 Furniture and fixtures 318 324 Leasehold improvements 46 64 - ------------------------------------------------------------------------------------------- Total property and equipment 3,882 4,062 Less accumulated depreciation and amortization (2,726) (3,133) - ------------------------------------------------------------------------------------------- Net property and equipment 1,156 929 - ------------------------------------------------------------------------------------------- Total assets $13,031 $12,748 =========================================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes payable to bank 813 1,002 Obligation under capital lease 17 15 Accounts payable 2,775 2,402 Accrued compensation and related benefits 972 1,063 Accrued income taxes 16 29 Other current liabilities 562 684 Deferred revenue 627 289 - ------------------------------------------------------------------------------------------- Total current liabilities 5,782 5,484 - ------------------------------------------------------------------------------------------- Long-term capital lease obligation 49 57 - ------------------------------------------------------------------------------------------- Stockholders' equity : Common stock, $.10 par value - authorized 25,000,000 shares at June 30, 1996 and 14,000,000 shares at December 31, 1995, issued and outstanding 10,872,293 shares at June 30,1996 and 10,856,793 shares at December 31,1995 1,087 1,086 Additional paid-in capital 24,017 24,005 Deferred compensation (47) (60) Accumulated deficit (17,882) (17,889) Cumulative translation adjustments 25 65 - ------------------------------------------------------------------------------------------- Total stockholders' equity 7,200 7,207 - ------------------------------------------------------------------------------------------- Total liabilities and stockholders' equity $13,031 $12,748 ===========================================================================================
See notes to consolidated financial statements. 1 4 COMPUTER IDENTICS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995 (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED (IN THOUSANDS. EXCEPT PER SHARE AMOUNTS) JUNE 30, JUNE 30, - ---------------------------------------------------------------------- --------------------- 1996 1995 1996 1995 ------- ------- -------- -------- Revenues: Net product sales $5,400 $5,945 $11,536 $11,914 Customer support services 1,084 815 2,214 1,626 - ---------------------------------------------------------------------- -------------------- Total revenues 6,484 6,760 13,750 13,540 - ---------------------------------------------------------------------- -------------------- Cost and expenses: Cost of products sold 2,948 2,788 6,441 5,789 Cost of customer support services 418 351 867 660 Selling, general and administrative 2,684 2,681 5,262 5,154 Research and development 524 673 1,153 1,388 - ---------------------------------------------------------------------- -------------------- Total costs and expenses 6,574 6,493 13,723 12,991 - ---------------------------------------------------------------------- -------------------- Income (loss) from operations (90) 267 27 549 Interest income 18 6 34 14 Interest expense 17 6 39 9 - ---------------------------------------------------------------------- -------------------- Income (loss) before provision for income taxes (89) 267 22 554 Provision for income taxes 8 23 14 53 - ---------------------------------------------------------------------- -------------------- Net income (loss) $ (97) $ 244 $ 8 $ 501 ====================================================================== ==================== Net income (loss) per share $(0.01) $ 0.02 $ 0.00 $ 0.05 ====================================================================== ==================== Weighted average number of common and common equivalent shares outstanding 10,870 10,983 10,971 10,845 ====================================================================== ====================
2 5 COMPUTER IDENTICS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995 (UNAUDITED)
SIX MONTHS ENDED (IN THOUSANDS) JUNE 30, - ----------------------------------------------------------------------------------- 1996 1995 ------ ------ OPERATING ACTIVITIES: Net income $ 8 $ 501 Adjustments to reconcile net income to net cash provided by (used for) operating activities: Depreciation and amortization 270 205 Non-cash compensation 13 37 Increase (decrease) in cash from: Accounts receivable 301 658 Inventory (448) (846) Other current assets (103) (71) Accounts payable 401 243 Accrued compensation and related benefits (66) (170) Accrued income taxes (13) 67 Other current liabilities (74) (384) Deferred revenue 337 134 - ----------------------------------------------------------------------------------- Total adjustments 618 (127) - ----------------------------------------------------------------------------------- Cash provided by operating activities 626 374 - ----------------------------------------------------------------------------------- INVESTING ACTIVITIES: Acquisition of property and equipment (503) (361) Decrease in other assets - 3 - ----------------------------------------------------------------------------------- Net cash used for investing activities (503) (358) - ----------------------------------------------------------------------------------- FINANCING ACTIVITIES Notes payable to bank (134) - Principal payments under capital lease obligations (7) (23) Proceeds from exercise of stock options 13 226 - ----------------------------------------------------------------------------------- Net cash provided by financing activities (128) 203 - ----------------------------------------------------------------------------------- Effect of exchange rate changes on cash and cash equivalents (79) 35 - ----------------------------------------------------------------------------------- Net increase in cash and cash equivalents (84) 254 - ----------------------------------------------------------------------------------- Cash and cash equivalents, beginning of year 1,752 755 - ----------------------------------------------------------------------------------- Cash and cash equivalents, end of period $1,668 $1,009 =================================================================================== SUPPLEMENTAL INFORMATION: Cash paid for interest $ 39 $ 9 - ----------------------------------------------------------------------------------- Cash paid for income taxes $ 27 $ 6 ===================================================================================
See notes to consolidated financial statements. 3 6 COMPUTER IDENTICS CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The Notes to the Condensed Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1995, contain information pertinent to the accompanying financial statements. There has been no material change in the information contained in such notes except as set forth below. The Balance Sheet at June 30, 1996, the Statements of Operations for the three and six months ended June 30, 1996 and 1995 and the Statements of Cash Flows for the six months ended June 30, 1996 and 1995, are unaudited. However, in the opinion of management, all adjustments (consisting only of normal recurring accrual entries) necessary for a fair presentation of such financial results have been included. 1. PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of Computer Identics Corporation (the Company) and its wholly-owned subsidiaries, Computer Identics N.V./S.A. (CINV), Computer Identics Ltd., Computer Identics GmbH, Computer Identics S.A., and Computer Identics, Inc. 2. RECLASSIFICATION Certain amounts in the prior year have been reclassified to conform to the 1996 presentation. 3. NET INCOME (LOSS) PER SHARE Net income (loss) per common share is computed based on the weighted average number of common and the dilutive effect of common equivalent shares outstanding for the period. 4. INVENTORY Inventory is recorded at the lower of cost (first in, first out method) or market. At June 30, 1996 and December 31, 1995, inventory consisted of the following:
(In thousands) June 30, 1996 December 31, 1995 ------------- ------------- ----------------- Raw Materials $2,034 $1,821 Work-In-Process 271 336 Finished Goods 1,696 1,468 ------ ------ Total $4,001 $3,625 ------ ------
4 7 5. INCOME TAXES The provisions for income taxes for the second quarter were $8 in 1996 versus a provision of $23 in 1995. The provisions for income taxes for the six months ended June 30 were $14 in 1996 versus a provision of $53 in 1995. Due to the Company's ability to use its U.S. net operating loss carryforwards, the provision for income taxes is comprised primarily of state and foreign income taxes for which net operating loss carryforwards are not available. 6. SUBSEQUENT EVENTS RVSI (Robotic Vision Systems, Inc.) and Computer Identics Corporation jointly announced on July 24, 1996 that they have signed a definitive merger agreement whereby RVSI would acquire all of Computer Identics' outstanding stock. The transaction is intended to be completed as a tax free reorganization and to be accounted for as a pooling of interests. To effect the merger transaction RVSI would issue 0.1778052 shares of its common stock for each Computer Identics share or approximately 1,927,000 shares of RVSI common stock in exchange for all Computer Identics' outstanding shares. In addition, Computer Identics' outstanding stock options and warrants would be exchanged for options on RVSI's common stock in the same 0.1778052 to one ratio. The exchange ratio is subject to limited adjustment based upon certain changes in the market price of RVSI common stock. Consummation of the merger transaction is subject to conditions customary for transactions of this nature, including approval by stockholders of Computer Identics. Item 2. Management's Discussion and Analysis of Financial Condition and --------------------------------------------------------------- Results of Operations For the Three Months Ended June 30, 1996 and 1995. - ----------------------------------------------------------------------- Revenue for the second quarter of 1996 was 4% below the comparable 1995 period. The 1996 revenue decline was reflected in two geographic areas of the Company, North America and Europe. North America and Europe declined by 13% and 9%, respectively for the second quarter 1996 compared to the same period in 1995. Sales in these two geographic areas reflected sales results that did not meet the Company's expectations. Rest of World more than doubled for the same comparable periods. Product sales for the second quarter 1996 compared to the comparable period in 1995 declined by 9% while service revenue for the same period increased by 33%. Product sales declined due to lower sales in North America and Europe previously noted. The increase in service revenue reflects a stronger emphasis on the Company's service business, increased pricing and revenue from service contracts for newer products which are coming off their warranty period. Second quarter bookings decreased 9% for 1996 compared to the same quarter in the prior year. Backlog decreased from $3.5 million at December 31, 1995, to $3.0 million at June 30, 1996. The $3.0 million in backlog is lower than the comparable second quarter 1995 total of $3.7 million. Sales by the Company's four European subsidiaries and exports to Rest of World were 60% of total revenue for the second quarter of 1996 compared to 56% for 1995. Since over half the Company's revenue was derived from foreign sources, its operating results can be sensitive to foreign currency fluctuations. In the second quarter of 1996, these foreign currency fluctuations had no impact while in the comparable 1995 period the foreign currency fluctuations worked in the Company's favor. The Company does have available a program 5 8 to hedge its foreign denominated accounts receivable in an effort to minimize foreign currency exposure. At June 30, 1996, the Company did not have any hedging contracts outstanding. The Company may utilize limited hedging in the future should the Company foresee the need. Gross Margin from product and services was 48% compared to 54% for the second quarters of 1996 and 1995, respectively. Product gross margin decreased from 53% in 1995 to 45% in 1996 primarily reflecting higher manufacturing costs from the implementation of a new cell manufacturing strategy and a new MIS/MRP system, a higher percentage of lower margin sales from ROW, a change in distribution strategy in North America from direct to lower margin indirect channels, and the lack of a favorable foreign currency impact due to a stronger dollar. This product gross margin percent will not improve unless the Company can achieve material and labor cost reductions in manufacturing which more than offset the effect of the larger mix of international revenues and the change in distribution strategy in North America, both of which have lower margins. Service gross margin increased in 1996 to 61% from 57% in 1995, reflecting two factors: elimination from our service base of those older products we have removed from our current product offerings, coupled with continued cost reductions. Selling, General and Administrative expenses as a percentage of revenue were 41% in the second quarter of 1996 versus 40% in the comparable 1995 period, reflecting a continued emphasis on controlling gross spending. Research and Development expenses were 8% and 10% of revenues in the second quarter of 1996 and 1995, respectively as the Company continued its planned program to invest in its future by improving performance of existing products, expanding its overall product line, and exploring new technology. As a result of the foregoing, net income (loss) for the second quarter of 1996 and 1995 was ($97,000) and $244,000, respectively. For the Six Months Ended June 30, 1996 and 1995 - ----------------------------------------------- Revenue for the first six months of 1996 was 2% above the comparable 1995 period for the reasons noted above. Revenue for North America and Europe declined by 3% while Rest of World increased by over 50% for the first six months of 1996 compared to the same period in 1995. Product sales for the first six months of 1996 compared to the same period in 1995 declined by 3% while service revenue for the same period increased by 36% for the reasons noted above. First half bookings decreased 6% for 1996 compared to the prior year. Sales by the Company's four European subsidiaries and exports to Rest of World were 62% and 60% of the total revenue for the first six months of 1996 and 1995, respectively. Since over half the Company's revenue was derived from foreign sources, its operating results can be sensitive to foreign currency fluctuations. In the first half of 1996, these foreign currency fluctuations did not work in the Company's favor, while the comparable period of 1995 reflected favorable currency fluctuations. Gross Margin from product and services was 47% compared to 52% for the first six months of 1996 and 1995, respectively. Product gross margin decreased to 44% in 1996 from 51% in 1995, primarily reflecting higher manufacturing costs from the implementation of a new cell manufacturing strategy and a new MIS/MRP system, a change in distribution strategy in North America from direct to lower margin indirect channels, and the lack of a favorable foreign currency impact due to a stronger dollar. Service gross margin increased in 1996 to 61% from 53% in 1995 for the reasons noted above. Selling, General and Administrative expenses as a percent of revenue were 38% in the first half of 1996 and 1995. Overall, the Company has, through it ongoing cost containment program, minimized increases in Selling, General and Administrative spending. 6 9 Research and Development expenses were 8% and 10% of revenues in the first half of 1996 and 1995, respectively as the Company continued its planned program to invest in its future by improving performance of existing products, expanding its overall product line, and exploring new technology. For the first half of 1996, the Company reported net income of $8,000 as compared with a 1995 six month income of $501,000. This decline is directly related to a reduction in gross margin as a percent of revenue. Liquidity and Capital Resources - ------------------------------- Management believes that cash generated from operations and the current level of working capital are sufficient to finance its needs through 1997. From a capital expenditures viewpoint, in the first half of 1996 the Company completed the acquisition of a new management information system which cost approximately $200,000.
June 30, December 31, 1996 1995 ---------------------------- Working Capital $6,093,000 $6,335,000 Current Ratio 2.1 to 1 2.2 to 1 Total Liability to Net Worth Ratio .8 to 1 .8 to 1
Each of the liquidity factors listed have remained relatively stable over the two periods listed. Working capital has decreased by $242,000 during the first six months of 1996 compared to December 31, 1995, primarily resulting from increases in inventory of $376,000, accounts payable of $373,000, and a decrease in accounts receivable of $332,000. The Company currently has two bank lines of credit available. A small line of credit is held with a Belgium bank for 5 million Belgium Francs (approximately $170,000). The principal line of credit of $2 million is held with a commercial bank. Computer Identics GmbH, a wholly owned German subsidiary, has $800,000 in DM of this line of credit outstanding. Therefore the Company still has available $1.2 million of this credit line. 7 10 PART II ------- OTHER INFORMATION ----------------- Item 4. Submission of Matters to a Vote of Security Holders --------------------------------------------------- The Annual Meeting of Stockholders was held on May 14, 1996. The following are the results of the voting conducted at that meeting. As of the record date for the Annual Meeting, 10,866,793 shares were outstanding and eligible to vote. The following table details the results of the shareholder voting: PROPOSAL # 1 - ELECTION OF DIRECTORS All six directors were re-elected, namely, Richard Close, John Hill, Tomas Kohn, Jan Smolders, Edward J. Stewart, III, and Richard Wilcox. NOMINEE FOR AGAINST ------- --- ------- 1. Close, Richard 9,125,461 551,500 2. Hill, John 9,125,561 551,400 3. Kohn, Tomas 9,125,561 551,400 4. Smolders, Jan 9,648,986 27,975 5. Stewart, Edward J, III 9,648,986 27,975 6. Wilcox, Richard 9,648,786 28,175 PROPOSAL # 2 - APPROVAL OF COMPUTER IDENTICS CORPORATION RESTATED ARTICLES OF ORGANIZATION, AS AMENDED, TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF VOTING COMMON STOCK FROM 14,000,000 TO 25,000,000 At the Annual Meeting of Stockholders, Proposal No. 2, to amend the Company's Restated Articles of Organization, as amended, (the "Articles of Organization") to increase the number of authorized shares of Voting Common Stock, $.10 par value (the "Common Stock") from 14,000,000 to 25,000,000 was approved by stockholders as follows: SHARES ------ FOR 8,791,770 AGAINST 693,200 ABSTAIN 10,491 BROKER NON-VOTE 181,500 PROPOSAL # 3 - APPROVAL OF 1996 STOCK INCENTIVE PLAN: At the Annual Meeting of Stockholders, Proposal No. 3 to approve the Company's 1996 Stock Incentive Plan was approved by stockholders as follows: 8 11 SHARES ------ FOR 9,239,692 AGAINST 240,669 ABSTAIN 13,600 BROKER NON-VOTE 183,000 Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits 3.1 Restated Articles of Organization effective December 21, 1984, and Amendment thereto effective June 1, 1987, as further amended by Amendment thereto effective June 12, 1996. 3.2 By-laws of the Company (filed as Exhibit 3.4 to Registration Statement No. 2-85807, and incorporated herein by reference). 4.1 Copy of Common Stock Certificate (filed a Exhibit 4.1 to Registration Statement No. 2-85807, and incorporated herein by reference). 11. Statement regarding computation of per share earnings. (See footnote 3 to Notes to Consolidated Financial Statements). 27. Financial Data Schedule. (b) Reports on Form 8-K None 9 12 SIGNATURES ---------- 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. COMPUTER IDENTICS CORPORATION ----------------------------- Registrant DATE: August 14, 1996 - ---------------------- /s/ Jeffrey A. Weber -------------------------------------------- Jeffrey A. Weber Duly Authorized Officer and Chief Financial Officer (Senior Vice President, Operations and Finance and Chief Financial Officer) 10 EX-3.1 2 RESTATED ARTICLES OF ORGANIZATION 1 Exhibit 3.1 THE COMMONWEALTH OF MASSACHUSETTS FEDERAL IDENTIFICATION MICHAEL JOSEPH CONNOLLY NO. 04-2443539 Secretary of the Commonwealth ONE ASHBURTON PLACE, BOSTON, MASS: 02108 RESTATED ARTICLES OF ORGANIZATION General Laws, Chapter 155B, Section 74 This certificate must be submitted to the Secretary of the Commonwealth within sixty days after the date of the vote of stockholders adopting the restated articles of organization. The fee for filing this certificate is prescribed by General Laws. Chapter 156B, Section 114. Make checks payable to the Commonwealth of Massachusetts. __________ We. David J. Collins ,President and Rickart A. Connole ,Assistant Clerk of COMPUTER IDENTICS CORPORATION (Name of Corporation) located at 5 Shavmut Road, Canton, MA 02021 do hereby certify that the following restatement of the articles of organization of the corporation was duly adopted on November 13, 1984, by unanimous consent of the Directors. 1. The name by which the corporation shall be known is: Computer Identics Corporation 2. The purposes for which the corporation is formed are as follows: To engage generally in the business of buying, selling, servicing, renting, leasing, manufacturing, pledging, mortgaging and otherwise dealing in and with all kinds and manner of devices, machines, processes, inventions, patents and personal property used in connection with the identification and control of moving objects, and to carry on any business permitted by the laws of the Commonwealth of Massachusetts to a corporation organized under Chapter 156B. NOTE: Provisions for which the space provided under articles 2, 4, 5, and 6 is not sufficient should be set out on continuation sheets to be numbered 2A, 2B, etc. Indicate under each article where the provision is set out. Continuation sheets shall be on 8 1/2 wide by 11" high paper and must have a left-hand margin 1 inch wide for binding. Only one side should be used. 2 3. The total number of shares and the par value, if any, of each class of stock which the corporation is authorized to issue is as follows:
WITHOUT PAR VALUE WITH PAR VALUE ----------------- ------------------------------ CLASS OF STOCK NUMBER OF SHARES NUMBER OF SHARES PAR VALUE - -------------- ---------------- ---------------- --------- Preferred Common 7,000,000 $.10 Non-voting Common 600,000 $.01
*4. If more than one class is authorized, a description of each of the different classes of stock with, if any, the preferences, voting powers, qualifications, special or relative rights or privileges as to each class thereof and any series now established: See attachment pages 4A through 4B *5. The restrictions, if any, imposed by the articles of organization upon the transfer of shares of stock of any class are as follows: None *6. Other lawful provisions, if any, for the conduct and regulation of the business and affairs of the corporation, for its voluntary dissolution, or for limiting, defining, or regulating the powers of the corporation, or of its directors or stockholders, or of any class of stockholders: The Directors may make, amend or repeal the By-Laws in whole or in part, to the extent and in the manner therein provided, except with respect to any provision thereof which by law or the By-Laws requires action by the stockholders. Meetings of the stockholders of the corporation may be held anywhere in the United States. *If there are no such provisions, state "None". 3 Continuation Pages for Article 4 -------------------------------- (a) Liquidation: In the event of any liquidation, dissolution, or winding up of this Corporation, whether voluntary or involuntary, the holders of Common Stock and Non-voting Common Stock shall be entitled to receive, ratably, all of the assets of the Corporation. A consolidating or merger of the Corporation with or into any other corporation or corporations shall not be deemed to be a liquidation, dissolution, or winding up, within the meaning of this clause. (b) Automatic Conversion of Non-voting Common Shares: Upon the sale, transfer or other disposition by the First National Bank of Boston ("FNBB") or its nominee of any shares of Non-Voting Common Stock held by it to any transferee (other than an affiliate of FNBB), such shares shall, by virtue of such sale, transfer or other disposition and without any further action on any party's part, be automatically converted into an equal number of shares of Common Stock. Any such transferee shall be entitled, upon presentation to the Corporation of a certificate or certificates (duly endorsed or accompanied by stock powers duly endorsed by FNBB or its nominee) representing the shares of Non-Voting Common Stock so transferred, to receive a certificate or certificates representing an equal amount of Common Stock. Registration on the Corporation's books and records of such shares of Common Stock in the name of the transferee prior to the record date fixed for a stockholders' vote shall be a pre-condition of such transferee's exercising the voting rights of such shares. (c) Preemptive Rights: Except for the conversion of the Non-Voting Common Stock into Common Stock as above provided, and except as set forth in subsection (e), no holder of any class of stock of the Corporation shall be entitled as of right to subscribe for, purchase, or receive any part of any new or additional shares of any class, whether now or hereafter authorized, or of bonds, debentures, or other evidences of indebtedness convertible into or exchangeable for shares, but all such new or additional shares of any class, or bonds, debentures, or other evidences of indebtedness convertible into or exchangeable for shares, may be issued and disposed of by the Board of Directors on such terms and for such consideration, so far as may be permitted by law, and to such person or persons as the Board of Directors in their absolute discretion may deem advisable. (d) Issuance: The Board of Directors is authorized and empowered to cause the issuance at any time or from time to time for cash or any other lawful consideration, and on such terms, conditions or prices consistent with the provisions of law, the Articles of -4A- 4 Organization and the By-Laws of the Corporation as from time to time amended, any of the shares of the Corporation's Non-Voting Common Stock, par value $.01 per share, and shares of Common Stock, par value $.10 per share, provided, however, that no shares of Non-Voting Common Stock shall be issued by the Corporation from authorized shares of Non-Voting Common Stock which become available for issuance by virtue of the conversion of such shares into Common Stock. (e) Miscellaneous: In addition to the rights and privileges set forth above pertaining to the Common Stock, the holders of the Common Stock shall have all the rights and privileges normally accorded to holders of common stock in corporations organized pursuant to Chapter 156B of the General Laws of the Commonwealth of Massachusetts except that a vote of a majority of each class of stockholders outstanding and entitled to vote shall be necessary to approve any merger, consolidation or sale of substantially all the assets of the Corporation. The holders of shares of Non-Voting Common Stock shall have all of the rights and privileges accorded to holders of Common Stock, including without limiting the generality of the foregoing, the right to share pro-rata with holders of Common stock in any stock-split or stock or cash dividend and any distributions of stock, cash or property or any recapitalization or reclassification with respect to Common Stock, except that shares of Non-Voting Common stock shall be (including any shares of Non-Voting Common Stock issued by way of stock dividend or stock split) non-voting in all respects except as expressly provided herein or under the Massachusetts Business Corporation Law. So long as any Non-Voting Common Stock is outstanding, in the event the Corporation desires to sell shares of Common Stock at a price per share less than $1.50 (except (a) upon conversion of Non-Voting Common Stock, or (b) in connection with the grant of stock options to, or the exercise of stock options by, officers and employees of the Corporation for the purchase of not more than 150,000 shares of Common Stock), the Corporation shall give FNBB prior written notice setting forth the number of Common Shares intended to be sold and the price per share at which such shares are intended to be sold, and FNBB shall have the right, upon written notice to the Corporation not more than 20 days thereafter, to buy all or any part of the Common Stock intended to be sold at the intended price. If FNBB does not elect to purchase any shares of Common Stock, or if it elects to purchase only a part of such shares intended for sale, the Corporation may thereafter sell all such shares, or the remaining balance, as the case may be, as the Corporation may see fit but not for a price per share less than that specified in its written notice to FNBB as the intended sale price. -4B- 5 "We further certify that the foregoing restated article of organization effect no amendment to the articles of organization of the corporation as heretofore amended, except amendments to the following articles: None. (If there are no such amendments, state "None".) Briefly describe amendments in space below: IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names this 13th day of November in the year 1984. /s/ Donald J. Collins President ________________________________ /s/ Rickart A. Connole Assistant Clerk ________________________________ 6 THE COMMONWEALTH OF MASSACHUSETTS RESTATED ARTICLES OF ORGANIZATION (General Laws, Chapter 156B, Section 74) I hereby approve the within restated articles of organization and, the filing fee in the amount of $150.00 having been paid, said articles are deemed to have been filed with me this 21st day of December, 1984. /s/ MICHAEL JOSEPH CONNOLLY ------------------------------- MICHAEL JOSEPH CONNOLLY Secretary of the Commonwealth State House, Boston, Mass. TO BE FILLED IN BY CORPORATION PHOTO COPY OF RESTATED ARTICLES OF ORGANIZATION TO BE SENT TO: Lawrence J. Davidson Jr., Esquire .......................................................... Sherburne, Powers & Needham .......................................................... One Beacon Street, Boston, MA 02108 .......................................................... Telephone (617) 523-2700 ................................................ Copy Mailed DEC 28 1984 7 Form CD-72-30M-4/86-808851 THE COMMONWEALTH OF MASSACHUSETTS OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE JM FEDERAL IDENTIFICATION - ------ MICHAEL JOSEPH CONNOLLY, Secretary Examiner ONE ASHBURTON PLACE, BOSTON, MASS. 02108 NO. 04-2443539 ------------------- ARTICLES OF AMENDMENT General Laws, Chapter 156B, Section 72 This certificate must be submitted to the Secretary of the Commonwealth within sixty days after the date of the vote of stockholders adopting the amendment. The fee for filing this certificate is prescribed by General Laws, Chapter 156B, Section 114. Make check payable to the Commonwealth of Massachusetts. --------------- We, Frank J. Wezniak , President/xxxxx and James Pollock , Clerk/xxxxxxxxx of Computer Identics Corporation ------------------------------------------------------------------------ (Name of Corporation) located at 5 Shawmut Road, Canton, MA 02021 -------------------------------------------------------------------- - ----------- Name do hereby certify that the following amendments to the articles of Approved organization of the corporation were duly adopted at a meeting held on May 28, 1987, by vote of #1 3,836,646 shares of Common Stock out of 5,298,731 shares --------- -------------- --------- outstanding, (Class of Stock) #2 3,744,873 shares of Common Stock out of 5,298,731 shares --------- -------------- --------- outstanding and, (Class of Stock) shares of out of shares outstanding --------- ------------- --------- (Class of Stock) Amendment #1 being at least a majority of each class outstanding and entitled to vote thereon:-* Cross Out Amendment #2, being two-thirds of each class outstanding and entitled to vote thereon and Inapplicable of each class or series of stock whose rights are adversely affected Clause thereby:-** C / / P / / M / / * For amendments adopted pursuant to Chapter 156B, Section 70 ** For amendments adopted pursuant to Chapter 156B, Section 71 Note: If the space provided under any Amendment or item on this form is insufficient, additions shall be set forth on separate 8 1/2 x 11 sheets of paper leaving a left hand margin of at least 1 4 inch for binding. Additions to more than one Amendment may be - ----- continued on a single sheet so long as each Amendment requiring P.C. each such addition is clearly indicated. 8 Amendment #1 TO CHANGE the number of shares and the par value, if any, of each class of stock within the corporation fill in the following: The total presently authorized is:
NO PAR VALUE WITH PAR VALUE PAR KIND OF STOCK NUMBER OF SHARES NUMBER OF SHARES VALUE - ----------------- ---------------- ---------------- ----- COMMON 7,000,000 .10 Non-Voting Common) 600,000 .01 PREFERRED)
CHANGE the total to:
NO PAR VALUE WITH PAR VALUE PAR KIND OF STOCK NUMBER OF SHARES NUMBER OF SHARES VALUE - ----------------- ---------------- ---------------- ----- COMMON 14,000,000 .10 Non-Voting Common) 600,000 .01 PREFERRED)
9 Amendment #2 ------------ There shall be added to Article 6, the following: No director shall be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director notwithstanding any provision of law imposing such liability, provided, however, that, to the extent provided by applicable law, this provision shall not eliminate the liability of a director (i) for any breach of the director's duty of loyalty to the Company or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 61 or 62 or successor provisions of the Massachusetts Business Corporation Law or (iv) for any transaction from which the director derived an improper personal benefit. This provision shall not eliminate the liability of a director for any act or omission occurring prior to the date upon which this provision becomes effective. No amendment to or repeal of this provision shall apply to or have any effect on the liability or alleged liability of any director for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal. The foregoing amendment will become effective when these articles of amendment are filed in accordance with Chapter 156B, Section 6 of The General Laws unless these articles specify, in accordance with the vote adopting the amendment, a later effective date not more than thirty days after such filing, in which event the amendment will become effective on such later date. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names this 28th day of May, in the year 1987. /s/ Frank J. Wezniak President ........................................... /s/ James Pollock Clerk ........................................... 10 THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF AMENDMENT (General Laws, Chapter 156B, Section 72) I hereby approve the within articles of amendment and, the filing fee in the amount of $3,575.00 having been paid, said articles are deemed to have been filed with me this 1st day of June, 1987. /s/ Michael J. Connolly ________________________ MICHAEL JOSEPH CONNOLLY Secretary of State TO BE FILLED IN BY CORPORATION PHOTO COPY OF AMENDMENT TO BE SENT TO: James Pollock Sherburne, Powers & Needham One Beacon Street Boston, MA 02108 Telephone 523-2700 11 FEDERAL IDENTIFICATION NO. 04-2443539 ------------------ THE COMMONWEALTH OF MASSACHUSETTS William Francis Galvin Secretary of the Commonwealth One Ashburton Place, Boston, Massachusetts 02108-1512 ARTICLES OF AMENDMENT (General Laws, Chapter 156B, Section 72) We, Richard C. Close , *President, -------------------------------------------- and Steven R. London , *Clerk, ----------------------------------------------------------------- of Computer Identics Corporation , -------------------------------------------------------------------------- (Exact name of corporation) located at: 5 Shawmut Road, Canton, MA 02021 , ----------------------------------------------------------------- (Street address of corporation in Massachusetts) certify that these Articles of Amendment affecting articles numbered: 3 - ----------------------------------------------------------------------------- (Number those articles 1, 2, 3, 4, 5, and/or 6 being amended) of the Articles of Organization were duly adopted at a meeting held on May 14, ------ 1996, by vote of: -- 8,791,770 shares of Voting Common of 10,866,793 shares - --------- ------------------------------ ---------- (type, class & series, if any) outstanding, shares of of shares - --------- ------------------------------ ---------- (type, class & series, if any) outstanding, and shares of of shares - --------- ------------------------------ ---------- (type, class & series, if any) outstanding. **being at least a majority of each type, class or series outstanding and entitled to vote thereon: *Delete the inapplicable words. **Delete the inapplicable clause. (1) For amendments adopted pursuant to Chapter 156B, Section 70. (2) For amendments adopted pursuant to Chapter 156B, Section 71. Note: If the space provided under any article or item on this form is insufficient, additions shall be set forth on one side only of separate 8 1/2 x 11 sheets of paper with a left margin of at least 1 inch. Additions to more than one article may be made on a single sheet so long as each article requiring each addition is clearly indicated. 12 To change the number of shares and the par value (if any) of any type, class or series of stock which the corporation is authorized to issue, fill in the following: The total presently authorized is:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS - ------------------------------- ----------------------------------------------------- TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE - ---- ---------------- ---- ---------------- --------- Common: Common: 14,000,000 $.10 (Non-voting Common) 600,000 $.01 Preferred: Preferred:
Change the total authorized to:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS - ------------------------------- ----------------------------------------------------- TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE - ---- ---------------- ---- ---------------- --------- Common: Common: 25,000,000 $.10 (Non-voting Common) 600,000 $.01 Preferred: Preferred:
13 The foregoing amendment(s) will become effective when these Articles of Amendment are filed in accordance with General Laws, Chapter 156B. Section 6 unless these articles specify, in accordance with the vote adopting the amendment, a later effective date not more than thirty days after such filing, in which event the amendment will become effective on such later date. Later effective date: __________________________ SIGNED UNDER THE PENALTIES OF PERJURY, this 12th day of June, 1996. ---- ---- ---- /s/ Richard C. Close * President ________________________________________________ /s/ Steven R. London * Clerk ________________________________________________ * Delete the inapplicable words. 14 THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF AMENDMENT (General Laws, Chapter 156B, Section 72) I hereby approve the within Articles of Amendment, and the filing fee in the amount of $11,000 having been paid, said article is deemed to have been filed ------- with me this 12th day of June, 1996. ---- ---- -- Effective date: ______________________________ /s/ William Francis Galvin __________________________ WILLIAM FRANCES GALVIN Secretary of the Commonwealth TO BE FILLED IN BY CORPORATION Photocopy of document to be sent to: Steven R. London, Esq. Brown, Rudnick, Freed & Gesner One Financial Center Boston, MA 02111 Tel: (617)856-8200 EX-27 3 FINANCIAL DATA SCHEDULE
5 6-MOS DEC-31-1996 JUN-30-1996 1,668,000 0 6,000,000 270,000 4,001,000 11,875,000 3,882,000 2,726,000 13,031,000 5,782,000 0 1,087,000 0 0 6,113,000 13,031,000 11,536,000 13,750,000 6,441,000 13,723,000 (34,000) 0 39,000 22,000 14,000 8,000 0 0 0 8,000 (.00) (.00)
-----END PRIVACY-ENHANCED MESSAGE-----