-----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, V7J6uniOCAQRNVt6GQbckuBCKJaAQVTdEi956x9LQG4NPxU0ExHXI7ABq9r5MYNG RskZS6uuhsfSE1nHAc3dxw== 0001010549-96-000105.txt : 19960607 0001010549-96-000105.hdr.sgml : 19960607 ACCESSION NUMBER: 0001010549-96-000105 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960528 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960530 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: INAV TRAVEL CORPORATION CENTRAL INDEX KEY: 0000714256 STANDARD INDUSTRIAL CLASSIFICATION: 8700 IRS NUMBER: 592219994 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-11808 FILM NUMBER: 96574211 BUSINESS ADDRESS: STREET 1: 2225 EAST RANDOL MILL RD STREET 2: SUITE 323 CITY: ARLINGTON STATE: TX ZIP: 76011 BUSINESS PHONE: 8177928872 FORMER COMPANY: FORMER CONFORMED NAME: TWISTEE TREAT CORP DATE OF NAME CHANGE: 19910220 FORMER COMPANY: FORMER CONFORMED NAME: TWISTEE FREEZ CORP DATE OF NAME CHANGE: 19840917 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K (Amendment No. 1) CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) August 3, 1995 INAV Travel Corporation (Exact name of registrant as specified in its charter) Colorado 0-11808 59-2219994 (State or other jurisdiction (Commission (IRS Employer of incorporation File Number) Identification No.) 2225 E. Randol Mill Road, Suite 305 Arlington, Texas 76011 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (817) 633-9400 Item 2. Acquisition or Disposition of Assets a) ACQUISITION OF ASSETS. On August 3, 1995, INAV Travel Corporation, through its subsidiary Santiago Data Systems, a Nevada corporation ("Santiago Nevada"), acquired the assets and business of Santiago Data Systems, Inc., a California corporation ("Santiago California"), by means of an Asset Purchase Agreement. b) ASSETS AND "BUSINESS" INVOLVED IN THE ACQUISITION. Seller (Santiago California) sold, transferred and conveyed to Purchaser (Santiago Nevada) certain assets rights, benefits, contracts agreements and leases, etc. Such assets include software source code and libraries owned or licensed by Seller, computer equipment, furniture, customer and prospect lists and accounts receivable as of July 31, 1995. Also included were assigned commitments with vendors and processors, as well as proprietary rights to Santiago California's seven trade-marked products. Such assets will be used by Purchaser in the business for much the same purposes as previously utilized by the Seller. Santiago is a developer and marketer of medical and dental automated practice management software and automated information management services. Santiago markets both directly to health care providers and through its network of independent billing centers who market the Santiago products and provide billing and other services to their clients. c) CONSIDERATION AND SOURCES OF FUNDS. Consideration for the above transaction was as follows: 1) forgiveness of $200,000 of loans previously advanced to Seller by Purchaser, 2) payment of $529,000 to Seller in 61 installments, 3) payment of $240,000 to unsecured lenders in 12 monthly installments, 4) assumption of accounts payable in the amount of $95,000, 5) assump- tion of an obligation to Tom Banks of $55,426 and 6) assumption of an obligation to AST Research Property Lease Settlement Agreement in the amount of $91,000. Purchaser intends to satisfy the above-listed financial requirements and obligations from internally generated funds from its INAV medical receivables brokerage business and funds generated by the Santiago business during the payment periods involved. If necessary, additional funds would be sought from loans and/or equity funding. The consideration paid for the assets and business of the Seller was mainly based on 1) Seller's existing debt obligations, 2) obligations to unsecured lenders, payables and others, 3) and the revenue generating nature of the business and size of the customer base, as opposed to the Seller's history of financial performance. RELATIONSHIPS. Purchaser agreed to purchase the above-described business and assets from Seller through its Board of Directors and key shareholders. Thomas Banks, not a Key shareholder of Seller, was president and a director of Seller. He is also president of Santiago Nevada, and such relationship was duly notified to Seller's shareholders, Board of Directors, and noted in Seller's Shareholder Resolution. Mr. Banks will continue as an employee of Purchaser as president and a director of the Santiago subsidiary. Mr. Banks also has the right to become the owner of 25 percent of the stock of the Purchaser's Santiago subsidiary, under the terms of resolutions approved in connection with the organizational meeting of Purchaser's Santiago subsidiary on May 18, 1994. An agreement is in place whereby Banks may exchange his right of ownership in the subsidiary for 300,000 post split shares of INAV, or its successor. 2 Item 7. Financial Statements and Exhibits. It is impracticable to provide the required financial statements for the acquired business at the time this report on Form 8-K is filed. Such financial statements will be filed as soon as practicable. a. Exhibits. The following is a list of exhibits filed as part of this Current Report on Form 8-K. Exhibit Number Description of Exhibit - - ------ ---------------------- 2.1 Asset Purchase Agreement dated as of August 1, 1995, by and between Santiago Data Systems, Inc., a California corporation and Santiago Data Systems, Inc., a Nevada corporation. 2.2 Pro forma Financial Statement dated December 31, 1994 and July 31, 1995. 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 hereunto duly authorized. INAV Travel Corporation Date: May 16, 1996 /s/ Scott A. Haire ----------------------- Scott A. Haire, Chairman of the Board, Chief Executive Officer and President (Principal Financial Officer) 3 INDEX TO EXHIBITS Exhibit Number Description of Exhibit - - ------ ---------------------- 2.1 Asset Purchase Agreement dated as of August 1, 1995, by and between Santiago Data Systems, Inc., a California corporation and Santiago Data Systems, Inc., a Nevada Corporation. 2.2 Pro forma Financial Statement dated December 31, 1994 and July 31, 1995. 4 EX-2 2 EXHIBIT 2.1 - ASSET PURCHASE AGREEMENT Exhibit 2.1 5 ASSET PURCHASE AGREEMENT This Asset Purchase Agreement (this "Agreement"), is dated as of August 1, 1995 and is by and between Santiago Data Systems, Inc., a California corporation ("Seller"), and Santiago Data Systems, Inc. (formerly SDS, Inc.), a Nevada corporation ("Purchaser"). W I T N E S S E T H: WHEREAS, Seller desires to sell, and Purchaser desires to purchase, certain assets of Seller as more specifically set forth herein; NOW, THEREFORE, in consideration of the mutual representations, warranties and convenants herein contained, and on the terms and subject to the conditions herein set forth, the parties hereto agree as follows: ARTICLE I. DEFINITIONS SECTION 1.1. DEFINITIONS. As used in this Agreement, the following terms shall have the meanings set forth below: (a) "Assets" shall mean, with respect to Seller, all of the assets of Seller listed on Schedule A attached hereto. (b) "Closing" shall mean the closing of the transactions contemplated by this Agreement, which shall occur on the Closing Date at such time and place as shall be mutually agreed in writing by parties hereto. (c) "Closing Date" shall mean the date hereof. (d) "Purchase Price" shall have the meaning set forth in Section 2.2. ARTICLE II Purchase and Sale SECTION 2.1. PURCHASE AND SALE OF ASSETS. Subject to and upon the terms and conditions contained herein, at Closing Seller shall, transfer, assign, convey and deliver to Purchaser, and Purchaser shall purchase, accept and acquire from Seller, the Assets. SECTION 2.2. PURCHASE PRICE. The total purchase price for the Assets (the "Purchase Price") shall be (i) forgiveness of $200,000 of loans already advanced to Seller by Purchaser; and (ii) payment of $529,000. All cash payments of the Purchase Price shall be made in readily available funds and in U.S. dollars. SECTION 2.3. PAYMENT OF PURCHASE PRICE. Purchaser shall pay to Seller the cash portion of the Purchase Price pursuant to the terms of Schedule B attached hereto. 6 SECTION 2.4. ADDITIONAL TERMS. (a) The parties hereby agree that Purchaser and Seller will enter into an Assumption Agreement in a mutually acceptable form (the "Assumption Agreement") whereby Seller assumes all of Purchaser's liabilities pursuant to, certain obligations listed in Schedule C. Other than the obligations listed therein, Purchaser shall not assume any liabilities or obligations of Seller. (b) Seller agrees and convenants to use all sums received as the cash portion of the Purchase Price to the extent necessary to retire all of Seller's obligations to the Internal Revenue Service. ARTICLE III. Representations and Warranties of Seller Seller represents and warrants that the following are true and correct as of the date hereof: SECTION 3.1. ORGANIZATION AND GOOD STANDING; QUALIFICATION. Seller is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation, with all requisite corporate power and authority to carry on the business in which it is engaged, to own the properties it owns, to execute and deliver this Agreement and to consummate the transactions contemplated hereby. SECTION 3.2. AUTHORIZATION AND VALIDITY. The execution, delivery and performance by Seller of this Agreement and the other agreements contemplated hereby, and the consummation of the transactions contemplated hereby and thereby, have been duly authorized by Seller. This Agreement and each other agreement contemplated hereby have been duly executed and delivered by Seller and constitute legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms, except as may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors' rights generally or the availability of equitable remedies. SECTION 3.3. NO VIOLATION. Neither the execution, delivery or performance of this Agreement or the other agreements contemplated hereby nor the consummation of the transactions contemplated hereby or thereby will (i) conflict with, or result in a violation or breach of the terms, conditions or provisions of, or constitute a default under, the Articles of Incorporation or Bylaws of Seller or any agreement, indenture or other instrument under which Seller is bound or to which any of the assets are subject, or result in the creation, imposition on continuation, except as permitted herein, of any security interest, lien, charge or encumbrance upon any of the Assets or (ii) violate or conflict with any judgment, decree, order, statute, rule or regulation of any court or any public, governmental or regulatory agency or body having jurisdiction over Seller or the Assets. SECTION 3.4. CONSENTS. No consent, authorization, approval, permit or license of, or filing with, any governmental or public body or authority, any lender or lessor or any other person or entity is required to authorize, or is required in connection with, the execution, delivery and performance of this Agreement or the agreements contemplated hereby on the part of Seller. SECTION 3.5. LITIGATION. There are no material legal actions or administrative proceedings or investigations instituted, or to the best knowledge of Seller threatened, against or affecting, or that could affect, the Assets. Seller is not subject to any continuing court or administrative order, writ, injunction or decree applicable specifically to the Assets. 7 ARTICLE IV. Representations and Warranties of Purchaser Purchaser represents and warrants that the following are true and correct as of the date hereof: SECTION 4.1. ORGANIZATION AND GOOD STANDING. Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation, with all requisite corporate power and authority to carry on the business in which it is engaged, to own the properties it owns, to execute and deliver this Agreement and to consummate the transactions contemplated hereby. SECTION 4.2. AUTHORIZATION AND VALIDITY. The execution, delivery and performance by Purchaser of this Agreement and the other agreements contemplated hereby, and the consummation of the transaction contemplated hereby and thereby, have been duly authorized by Purchaser. This Agreement and each other agreement contemplated hereby have been duly executed and delivered by Purchaser and constitute legal, valid and binding obligations of Purchaser, enforceable against Purchaser in accordance with their respective terms, except as may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors' rights generally or the availability of equitable remedies. SECTION 4.3. NO VIOLATION. Neither the execution, delivery or performance of this Agreement or the other agreements contemplated hereby nor the consummation of the transactions contemplated hereby or thereby will (i) conflict with, or result in a violation or breach of the terms, conditions and provisions of, or constitute a default under, the Articles of Incorporation or Bylaws of Purchaser or any agreement, indenture or other instrument under which Purchaser is bound or (ii) violate or conflict with any judgment, decree, order, statute, rule or regulation of any court or any public, governmental or regulatory agency or body having jurisdiction over Purchaser or the properties or assets of Purchaser. ARTICLE V. Closing Deliveries SECTION 5.1. DELIVERIES OF SELLER. In connection with the Closing, Seller is delivering to Purchaser the following: (a) a bill of sale conveying the Assets to Purchaser; (b) the Assumption Agreement; and (c) such other instrument or instruments of transfer as shall be necessary or appropriate, as Purchaser or its counsel shall reasonably request, to vest in Purchaser good and marketable title to the Assets. SECTION 5.2. DELIVERIES OF PURCHASER. In connection with the Closing, Purchaser is delivering to Seller: (a) that portion of the Purchase Price which is payable at Closing, in immediately available funds; and (b) the Assumption Agreement SECTION 5.3. FURTHER INSTRUMENTS OF TRANSFER. Following the Closing, at the request of Purchaser, Seller shall deliver any further instruments of transfer reasonably requested by Purchaser and take all reasonable action as may be necessary or appropriate to vest in Purchaser good and marketable title to the Assets. 8 ARTICLE VI. Miscellaneous SECTION 6.1. AMENDMENT. This Agreement may be amended, modified or supplemented only by an instrument in writing executed by all the parties hereto. SECTION 6.2. ASSIGNMENT. Neither this agreement nor any right created hereby or in any agreement entered into in connection with the transactions contemplated hereby shall be assignable by any party hereto. SECTION 6.3. PARTIES IN INTEREST; NO THIRD PARTY BENEFICIARIES. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective heirs, legal representatives, successors and assigns of the parties hereto. Neither this agreement nor any other agreement contemplated hereby shall be deemed to confer upon any person not a party hereto or thereto any rights or remedies hereunder or thereunder. SECTION 6.4. ENTIRE AGREEMENT. This Agreement, the Schedules attached hereto and the agreements and documents contemplated hereby constitute the entire agreement of the parties regarding the subject matter hereof, and supersede all prior agreements and understandings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof. SECTION 6.5. SEVERABILITY. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term hereof, such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision never comprised a part hereof; and the remaining provisions hereof shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as part of this Agreement a provision as similar in its terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable. SECTION 6.6. SURVIVAL OF REPRESENTATION, WARRANTIES AND COVENANTS. The representations and warranties contained herein shall survive the Closing. SECTION 6.7. COSTS, EXPENSES AND LEGAL FEES. Each party hereto shall bear its own costs and expenses (including attorneys' fees), except that each party hereto agrees to pay the cost and expenses (including reasonable attorneys' fees and expenses) incurred by the other party in successfully (i) enforcing any of the terms of this Agreement or (ii) proving that the other party breached any of the terms of this Agreement. SECTION 6.8. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS (BUT NOT THE RULES GOVERNING CONFLICTS OF LAWS) OF THE STATE OF TEXAS. SECTION 6.9. CAPTIONS. The captions in this Agreement are for convenience of reference only and shall not limit or otherwise affect any of the terms or provisions hereof. SECTION 6.10. COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. SANTIAGO DATA SYSTEMS, INC., a California corporation 9 SANTIAGO DATA SYSTEMS, INC. a California corporation By: /s/ Tom Banks Its: President SANTIAGO DATA SYSTEMS, INC. (formerly SDS, Inc.), a Nevada corporation By: /s/ Scott A. Haire Its: Secretary 10 EX-2 3 EXHIBIT 2.2 - PRO FORMA FINANCIAL STATEMENTS Exhibit 2.2 11 INAV TRAVEL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 1994 (Unaudited) ASSETS ------
December 31 December 31 1994 1994 INAV Santiago Travel Data Corporation Systems Pro Forma --------------- --------------- --------------- CURRENT ASSETS Cash and cash equivalents $ 6,228 $ - $ 6,228 Trade accounts receivable, less allowance - for accounts of $24,000 in 1993 17,491 155,929 173,420 Inventories 40,732 2,691 43,423 Notes receivable 26,520 - 26,520 Prepaid expenses and other 22,479 25,834 48,313 --------------- --------------- --------------- Total current assets 113,450 184,454 297,904 --------------- --------------- --------------- PROPERTY AND EQUIPMENT, NET 154,544 29,269 183,813 --------------- --------------- --------------- OTHER ASSETS Assets held for sale 435,000 - 435,000 Notes receivable, less current portion 228,434 - 228,434 Software development costs - - - Patents, net of accumulated amortization of $1,784 38,641 - 38,641 Deposits 1,500 980 2,480 --------------- --------------- --------------- Total other assets 703,575 980 704,555 --------------- --------------- --------------- $ 971,569 $ 214,703 $ 1,186,272 =============== =============== ===============
-continued- 12 INAV TRAVEL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - Continued December 31, 1994 LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
December 31, December 31, 1994 1994 INAV Santiago Travel Data Corporation Systems Pro Forma --------------- --------------- --------------- CURRENT LIABILITIES Cash overdraft $ 22,023 $ (10,740) $ 11,283 Notes payable, including $440,328 and $261,750 due to related parties 709,213 473,296 1,182,509 Accounts payable 300,287 123,729 424,016 Accrued liabilities 264,294 118,636 382,930 Other liabilities 115,894 362,938 478,832 Deferred revenue - 89,722 89,722 --------------- --------------- --------------- Total current liabilities 1,411,711 1,157,581 2,569,292 --------------- --------------- --------------- SHAREHOLDERS' EQUITY (DEFICIT) Common stock; $.001 par value; 50,000,000 shares authorized; 49,485,000 shares issued 49,485 6,561,418 6,610,903 Additional paid-in capital 518,722 - 518,722 Retained earnings (deficit) (861,310) (7,504,296) (8,365,606) Treasury stock, at cost; 4,909,577 and 57,518 - shares, respectively (147,039) - (147,039) --------------- --------------- --------------- Total shareholders' equity (deficit) (440,142) (942,878) (1,383,020) --------------- --------------- --------------- $ 971,569 $ 214,703 $ 1,186,272 =============== =============== ===============
13 INAV TRAVEL CORPORATION AND SUBSIDIARIES PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS December 31, 1994 (Unaudited)
INAV Santiago Travel Data Corporation Systems Pro Forma --------------- --------------- --------------- December 31, December 31, 1994 1994 --------------- --------------- --------------- REVENUES Service fee and broker income $ 927,391 $ 927,391 Smart card product sales 350,149 - $ 350,149 Software and maintenance sales 111,762 1,155,834 $ 1,267,596 Other 17,488 - $ 17,488 --------------- --------------- --------------- Total revenues 1,406,790 1,155,834 $ 2,562,624 --------------- --------------- --------------- COST OF REVENUES Cost of service fees and broker income 127,552 - 127,552 Cost of smart card product sales 242,872 - 242,872 Cost of software and maintenance sales 35,300 218,827 254,127 --------------- --------------- --------------- Total cost of revenues 405,724 218,827 624,551 --------------- --------------- --------------- GROSS PROFIT 1,001,066 937,007 1,938,073 --------------- --------------- --------------- OPERATING EXPENSES Selling, general & administrative 1,848,347 1,443,725 3,292,072 Depreciation and amortization 28,585 - 28,585 Loss on write down of assets held for sale 68,294 - 68,294 Loss on disposition of assets held for sale and related 15,268 - 15,268 note receivable --------------- --------------- --------------- Total operating expenses 1,960,494 1,443,725 3,404,219 --------------- --------------- --------------- INCOME (LOSS) FROM OPERATIONS (959,428) (506,718) (1,466,146) OTHER INCOME AND EXPENSE Interest expenses (25,947) - (25,947) Other, net 35,848 - 35,848 --------------- --------------- --------------- Total other income (expense) 9,901 - 9,901 --------------- --------------- --------------- NET INCOME (LOSS) $ (949,527) $ (506,718) $ (1,456,245) =============== =============== =============== Income (loss) per weighted-average common share $ (0.02) $ 0.00 $ (0.02) =============== =============== =============== Weighted-average common shares outstanding 49,485,000 49,485,000 =============== =============== ===============
14 INAV TRAVEL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS July 31, 1995 (Unaudited) ASSETS ------
July 31, July 31, 1995 1995 INAV Santiago Travel Data Corporation Systems Pro Forma --------------- --------------- --------------- CURRENT ASSETS Cash and cash equivalents $ 6,960 $ - $ 6,960 Trade accounts receivable, less allowance - for accounts of $24,000 in 1993 1,061 33,235 34,296 Inventories - - - Notes receivable 20,517 193,103 213,620 Prepaid expenses and other 18,147 17,788 35,935 --------------- --------------- --------------- Total current assets 46,685 244,126 290,811 --------------- --------------- --------------- PROPERTY AND EQUIPMENT, NET 137,188 - 137,188 --------------- --------------- --------------- OTHER ASSETS Assets held for sale 135,000 - 135,000 Notes receivable, less current portion 222,470 - 222,470 Software development costs - - - Patents, net of accumulated amortization of $1,784 38,641 - 38,641 Deposits 1,500 - 1,500 --------------- --------------- --------------- Total other assets 397,611 - 397,611 --------------- --------------- --------------- $ 581,484 $ 244,126 $ 825,610 =============== =============== ===============
-continued- 15 INAV TRAVEL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - Continued July 31, 1995 LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
July 31, July 31, 1995 1995 INAV Santiago Travel Data Corporation Systems Pro Forma --------------- --------------- --------------- CURRENT LIABILITIES Cash overdraft $400 $46,206 $46,606 Notes payable, including $440,328 and $261,750 due to related parties 749,004 425,781 1,174,785 Accounts payable 262,873 171,625 434,498 Accrued liabilities 150,090 747,917 898,007 Other liabilities 77,262 421,345 498,607 Deferred revenue - 100,430 100,430 --------------- --------------- --------------- Total current liabilities 1,239,629 1,913,304 3,152,933 --------------- --------------- --------------- SHAREHOLDERS' EQUITY (DEFICIT) Common stock; $.001 par value; 50,000,000 shares authorized; 49,485,000 shares issued 49,485 6,561,418 6,610,903 Additional paid-in capital 518,722 - 518,722 Retained earnings (deficit) (1,079,313) (8,230,596) (9,309,909) Treasury stock, at cost; 4,909,577 and 57,518 - shares, respectively (147,039) - (147,039) --------------- --------------- --------------- Total shareholders' equity (deficit) (658,145) (1,669,178) (2,327,323) --------------- --------------- --------------- $581,484 $244,126 $825,610 =============== =============== ===============
16 INAV TRAVEL CORPORATION AND SUBSIDIARIES PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS July 31, 1995 (Unaudited)
INAV Santiago Travel Data Corporation Systems Pro Forma --------------- --------------- --------------- July 31, July 31, 1995 1995 --------------- --------------- --------------- REVENUES Service fee and broker income $ 30,592 $ - $ 30,592 Software and maintenance sales 265,864 1,509,652 $ 1,775,516 Other 38,666 - $ 38,666 --------------- --------------- --------------- Total revenues 335,122 1,509,652 $ 1,844,774 --------------- --------------- --------------- COST OF REVENUES Cost of service fees and broker income (145) - (145) Cost of software and maintenance sales 107,810 152,108 259,918 --------------- --------------- --------------- Total cost of revenues 107,665 152,108 259,773 --------------- --------------- --------------- GROSS PROFIT 227,457 1,357,544 1,585,001 --------------- --------------- --------------- OPERATING EXPENSES Selling, general & administrative 267,277 1,906,674 2,173,951 Depreciation and amortization 5,076 14,240 19,316 Loss (Gain) on disposition of assets held for resale and related note receivable 233,136 - 233,136 --------------- --------------- --------------- Total operating expenses 505,489 1,920,914 2,426,403 --------------- --------------- --------------- INCOME (LOSS) FROM OPERATIONS (278,032) (563,370) (841,402) --------------- --------------- --------------- OTHER INCOME AND EXPENSE Interest expenses 4,905 - 4,905 Other, net 36 (800) (764) --------------- --------------- --------------- Total other income (expense) 4,941 (800) 4,141 --------------- --------------- --------------- NET INCOME (LOSS) $ (282,973) $ (564,170) $ (847,143) =============== =============== =============== Income (loss) per weighted-average common share $ (0.02) $ 0.00 $ (0.02) =============== =============== =============== Weighted-average common shares outstanding 49,485,000 49,485,000 =============== =============== ===============
17 INAV TRAVEL CORPORATION AND SUBSIDIARIES NOTES TO PRO FORMS CONSOLIDATED FINANCIAL INFORMATION (Unaudited) The Pro Forma Consolidated Balance Sheet as of December 31, 1994 and Pro Forma Statements of Operations for the year ended December 31, 1994 for INAV Travel Corporation ("INAV") are derived from financial statements previously filed with the securities and Exchange Commission on Form 10-KSB and from audited financial statements contained within this document. The Pro Forma Consolidated Balance Sheet as of December 31, 1994 and Pro Forma Statements of Operations for the year ended December 31, 1994 for Sanitago, SDS, Inc. ("SDS") were prepared by management. The pro forma financial information should be read in conjunction with each Company's historical Financial Statements and Notes thereto as of and for the years ended December 31, 1994. The pro forma information does not purport to be indicative of the results of operations or the financial position which would have actually been obtained of the acquisition transactions had been consummated on the dates indicated. In addition, the pro forma financial information does not purport to be indicative of results of operations or financial positions that may be obtained in the future. 18 SANTIAGO DATA SYSTEMS, INC. FINANCIAL STATEMENTS JUNE 30, 1995 (See Accompanying Notes to Financial Statements and Accountants' Opinion) 19 TABLE OF CONTENTS Page # ------ Balance Sheet - Assets 22 Balance Sheet-Liabilities and Equity 23 Statement of Operations 24 Statement of Cash Flows 25 Notes to Financial Statements 26-27 20 R. ANDREW GATELY & CO. Certified Public Accountant To the Board of Directors & Stockholders' of Santiago Data Systems, Inc. We have audited the accompanying balance sheet of Santiago Data Systems, Inc. (a California Corporation) as of June 30, 1995, and the related statements of income, retained earnings and cash flows for the year 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 audit. We conducted our audit in accordance with generally accepted auditing standards. These standards require that we plan and perform the audit to obtain reasonable assurance about misstatements. 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 audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above fairly, in all material respects, the financial position of Santiago Data Systems, Inc., as of June 30, 1995, and results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. As discussed in Note C to the financial statements, Company's management and stockholders' sold, on August 1, 1995, all of the Company's assets. The accompanying financial statements have been prepared assuming that the Company will continue is a going concern. As discussed in Note F to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency, which raise substantial doubt about its ability to continue as a going concern. Managements plans regarding those matters also are described in Note C. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. R. Andrew Gately & Co. Los Alamitos, California April 8, 1996 - - -------------------------------------------------------------------------------- 5030 Katella Avenue, Suite 224. Los Alamitos, California 90720 (310) 596-2622. (714) 995-6535. FAX (310) 596-4290 21 SANTIAGO DATA SYSTEMS, INC. BALANCE SHEET AS OF JUNE 30, 1995 (See Accompanying Notes to Financial Statements and Accountants' Opinion) ASSETS CURRENT ASSETS Accounts Receivables (Net of 0 Allowance) $ 40,567 Due from MedBanc 200,435 Prepaid Assets & Deposits 17,788 -------- Total Current Assets 258,790 Property Plant & Equipment Equipment, Furniture & Fixtures 424,656 Less Accumulated Depreciation (424,656) -------- Net Property & Equipment 0 -------- TOTAL ASSETS $ 258,790 =========== 22 SANTIAGO DATA SYSTEMS, INC. BALANCE SHEET AS OF JUNE 30, 1995 (See Accompanying Notes to Financial Statements and Accountants' Opinion) LIABILITIES & STOCKHOLDERS' EQUITY CURRENT LIABILITIES Deficit in Cash $ 37,763 Accounts Payable & Accrued Liabilities 162,514 Due to Officer/Stockholder 65,447 Payroll Tax Liability (Note B & C) 747,917 Priority Service Contracts 100,430 Due to MedBanc 168,469 Note to Vendor 91,000 Notes to Stockholders' & Employees (Note D) 360,334 Accrued Interest on Notes 161,876 ------- TOTAL CURRENT LIABILITIES 1,895,750 Contingencies (Note F) STOCKHOLDERS' EQUITY Preferred Stock Series A, No Par Value Authorized Shares - 20,000,000 Issued - 13,333,333 (Note E) 200,000 Preferred Stock Series B, No Par Value Authorized Shares- 40,000,000 Issued - 4,879,623 (Note E) 243,981 Common Stock, No Par Value Authorized Shares - 40,000,000 Issued - 14,258,771 6,117,437 DEFICIT (8,198,378) TOTAL STOCKHOLDERS' EQUITY-DEFICIT (1,636,960) ----------- TOTAL LIABILITIES & EQUITY $ 258,790 ============ 23 SANTIAGO DATA SYSTEMS, INC. STATEMENT OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 1995 (See Accompanying Notes to Financial Statements and Accountants' Opinion) REVENUE Sales To Customers $ 1,403,427 COST & EXPENSES Cost of Items Sold to Customers 142,757 Advertising 75,106 Commissions 39,925 Employee Expenses 27,985 Insurance 46,575 Interest 54,462 Lease Expense 25,158 Marketing 24,142 Payroll and related expenses (Note B) 1,188,565 Postage 44,440 Rent 68,907 Telephone 94,962 Depreciation 14,240 Other 87,355 --------- Total Cost & Expenses 1,934,579 --------- Income tax expense 800 Net Loss (531,952) Deficit - Beginning (7,666,426) ----------- Deficit - Ending $ (8,198,378) 24 SANTIAGO DATA SYSTEMS, INC. STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 1995 (See Accompanying Notes to Financial Statements and Accountants' Opinion) OPERATING ACTIVITIES Net Loss $ (531,952) Adjustments to Revenue Net Loss to Net Cash Used in Operating Activities: Depreciation 14,240 CHANGES IN ASSETS & LIABILITIES Accounts Receivable 115,362 Inventories 2,691 Due from MedBanc (200,435) Deposits & Prepaid 8,046 Accounts Payable & Accrued liabilities 14,286 Due to Shareholders' & Employees 31,483 Payroll Tax Liability 383,812 Due to MedBanc 57,134 Priority Service Container Payable 10,708 Accrued Interest 43,240 Other 24,362 Cash Used In Operating Activities (27,023) Cash Deficit - Beginning (10,740) -------- Cash Deficit - Ending $ (37,763) ========== 25 Santiago Data Systems, Inc. Notes to Financial Statements June 30, 1995 NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General Santiago Data Systems, Inc. (the "Company") primarily develops and markets medical billing systems for use by doctors and medical billing centers. They also offer technical support contracts to their customers. The Company provides electronic data interchange for insurance companies and patient billings. Basis of accounting Revenue from products are recognized when the product is shipped to the customers. Revenue from the technical support contracts are recognized on a pro-rata basis over the coverage period. Expenses and cost are recognized when incurred. Property and equipment are stated at cost. Depreciation is being provided over the estimated useful lives of the assets using accelerated rates. NOTE B-PAYROLL TAXES PAYABLE The Company is delinquent in paying $747,917 of federal and state payroll tax liabilities which includes interest and penalties of $229,667. Included in payroll and related expenses for the year ended June 30, 1995, are approximately $84,000 or penalties and $17,000 of interest, charged by federal and state taxing authorities for the above mentioned delinquencies. NOTE C-SUBSEQUENT EVENTS On August 1, 1995 the Company's management and stockholders' agreed to sell all of the Company's rights, title, interest to all the business property and assets (real and personal), assign certain commitments and trademarks, for approximately $1.2 million. The consideration received was made up a note, forgiveness of debt and the assumption of certain liabilities. In conjunction with the above mentioned sale, an installment agreement was negotiated with the Internal Revenue Service whereby the Company's federal payroll tax liability was reduced to $377,306 which includes an amount of $47,183 for the personal income tax liability of an officer/stockholder of the Company. No such agreement has been reached with the California taxing authorities. 26 Santiago Data systems, Inc. Notes to Financial Statements June 30, 1995 continued NOTE C-SUBSEQUENT EVENTS (continued) Per the Asset Purchase Agreement, the Company agrees to use the cash proceeds from the sale, to the extent necessary, to retire the Company's obligation to the Internal Revenue Service. NOTE D-UNSECURED NOTES PAYABLE TO STOCKHOLDERS' AND EMPLOYEES Unsecured notes payable to stockholders' and employees accrue interest at 12%. NOTE E-PREFERRED STOCK SERIES A AND B Preferred stock series A and B shall be entitled to receive, when declared by the Board of Directors, annual cash dividends of 9/10th of 1 cent ($0.009) per share and $0.01 per share, respectively, in preference to and in priority over dividends for the common stock. In the event of a liquidations, dissolution or winding down of the Company, the holders of series A preferred stock shall be entitled to receive 5/10ths of 1 cent ($0.005) per share and the holders of series B preferred stock shall be entitled to receive 10 cents ($0.10) per share out of the assets of the corporation, plus any accrued and unpaid dividends, in preference to and in priority over dividends for the common stock. NOTE F-CONTINGENCIES Going Concern As shown in the accompanying financial statement, the Company incurred a net loss of $531,952 for the year ended June 30, 1995, and as of that date the Company's current liabilities exceeded its current assets by $1,636,960. These factors create an uncertainty about the Company's ability as a going concern (See Note C). The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. 27 -----END PRIVACY-ENHANCED MESSAGE-----