-----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, U3BUgnRO+Fy2Gk/Ki9Yf5g2ZrzQIbJdICypr6xrp2LvSF7NCNLGddUBRYsRe2alW 4uE7o6pSsn6sez741ZtkyA== 0001050502-99-000544.txt : 19990806 0001050502-99-000544.hdr.sgml : 19990806 ACCESSION NUMBER: 0001050502-99-000544 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990805 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTEGRATED SPATIAL INFORMATION SOLUTIONS INC /CO/ CENTRAL INDEX KEY: 0000783284 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS, NEC [3679] IRS NUMBER: 840868815 STATE OF INCORPORATION: CO FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-14273 FILM NUMBER: 99678389 BUSINESS ADDRESS: STREET 1: 13119 PROFESSIONAL DRIVE STREET 2: SUITE 200 CITY: JACKSONVILLE STATE: FL ZIP: 32225 BUSINESS PHONE: 9043461319 MAIL ADDRESS: STREET 1: 13119 PROFESSIONAL DRIVE STREET 2: SUITE 200 CITY: JACKSONVILLE STATE: FL ZIP: 32225 FORMER COMPANY: FORMER CONFORMED NAME: INTEGRATED SPATIAL INFORMATION SYSTEMS INC DATE OF NAME CHANGE: 19980710 FORMER COMPANY: FORMER CONFORMED NAME: DCX INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: DOUGLAS COUNTY INDUSTRIES INC DATE OF NAME CHANGE: 19860109 10QSB 1 FORM 10-QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1999. 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 0-14273 INTEGRATED SPATIAL INFORMATION SOLUTIONS, INC. ---------------------------------------------- (Exact name of registrant as specified in its charter) COLORADO 84-0868815 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1597 Cole Boulevard, Suite 300B, Golden, CO 80401 ------------------------------------------------- (Address of principal executive offices) (Zip Code) (303) 274-8708 -------------- (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. [X] Yes [ ] No 12,013,190 Common Shares were outstanding as of June 30, 1999. Number of pages in this report is 23. Table of Contents Part I Financial Information 3 Consolidated Balance Sheet 3 Consolidated Statement of Operations 5 Consolidated Statements of Cash Flow 6 Notes to Consolidated Financial Statements 7 Management Discussion and Analysis 10 Part II Other Information 13 Signature Page 14 Exhibits: Services Agreement 15 Consulting Agreement 19 2 Part 1 Financial Statements Integrated Spatial Information Solutions, Inc., and Subsidiary Condensed and Consolidated Balance Sheet (Unaudited) June 30, 1999 ------------- Assets Current: Cash and Cash Equivalents $ 283,297 Accounts receivable (net of allowance) 1,907,928 Restricted cash 100,000 Prepaid expenses and other 120,890 ----------- Total current assets 2,412,115 ----------- Property and Equipment: Land and building under capital lease - related party 1,866,667 Equipment and furniture 540,660 Leased assets 289,234 ----------- 2,696,561 Less accumulated depreciation (643,967) ----------- Net property and equipment 2,052,594 ----------- Other Assets Goodwill, net of accumulated amortization 4,691,117 Other 82,795 ----------- Total other assets 4,773,912 ----------- $ 9,238,621 =========== See accompanying notes to financial statements 3 Integrated Spatial Information Solutions, Inc., and Subsidiary Condensed and Consolidated Balance Sheet (Unaudited) June 30, 1999 ------------- Liabilities and Stockholders' Equity Current liabilities: Notes payable - current portion $ 217,894 Obligations under capital leases - related party - current 154,882 Accounts payable 661,367 Accrued expenses 605,297 Deferred revenue 54,372 Client prepayment 158,209 ------------ Total current liabilities 1,852,021 ------------ Long-term liabilities: Notes payable, less current maturities 257,888 Obligations under capital leases - related party 1,845,080 ------------ Total long-term liabilities 2,102,968 ------------ Total liabilities 3,954,989 ------------ Commitments and Contingencies Stockholders' Equity Cumulative convertible preferred stock, $.001 par value, 20,000,000 shares authorized, 590 shares issued and outstanding 1 Common stock, no par value, 2,000,000,000 shares authorized, 12,013,190 shares issued and outstanding 12,700,961 Additional paid-in capital 3,721,718 Accumulated deficit (11,139,048) ------------ Total stockholders' equity 5,283,632 ------------ $ 9,238,621 ============ See accompanying notes to financial statements 4
Integrated Spatial Information Solutions, Inc., and Subsidiary Condensed and Consolidated Statements of Operations (Unaudited) Nine months ended Three months ended June 30, June 30, -------------------- -------------------- 1999 1998 1999 1998 ---- ---- ---- ---- Revenues $ 6,216,323 $ 5,891,818 $ 2,250,444 $ 2,217,437 Cost of sales Salaries and employee benefits 3,791,035 3,738,619 1,232,351 1,257,247 Direct contract costs 1,086,308 966,088 456,041 344,664 Other operating costs 1,878,304 2,725,769 648,425 981,097 ------------ ------------ ------------ ------------ Total costs and expenses 6,755,647 7,430,476 2,336,817 2,583,008 ------------ ------------ ------------ ------------ Operating loss (539,324) (1,538,658) (86,373) (365,571) ------------ ------------ ------------ ------------ Other income (expense): Interest expense (359,120) (311,396) (69,336) (112,743) Other income (expense) 246 114,093 (1,018) 26,634 Gain on sale of assets 173,905 -- 173,905 Gain on litigation settlement 414,312 -- -- -- ------------ ------------ ------------ ------------ Total other income (expense) 229,343 (197,303) 103,551 (86,109) ------------ ------------ ------------ ------------ Net income (loss) from continuing operations (309,981) (1,735,961) 17,178 (451,680) Income (loss) from discontinued operations -- (42,215) -- (413) ------------ ------------ ------------ ------------ Net income (loss) (309,981) (1,778,176) 17,178 (452,093) ------------ ------------ ------------ ------------ Preferred stock dividends (36,723) (14,910) (12,241) -- Deemed preferred stock dividends -- (83,333) -- -- ------------ ------------ ------------ ------------ Income (loss) attributable to common stockholders ($ 346,704) ($ 1,876,419) $ 4,937 ($ 452,093) ============ ============ ============ ============ Basic income ( loss) per common share: Income (loss from continuing operations attributable to common stockholders (.03) (.18) -- (.04) Income (loss) from discontinued operations -- -- -- -- ------------ ------------ ------------ ------------ Income (loss) attributable to common stockholders (.03) (.19) -- (.04) ------------ ------------ ------------ ------------ Weighted average number of shares of common stock outstanding 11,786,734 9,863,072 11,970,226 11,441,759 ============ ============ ============ ============ Diluted income ( loss) per common share: Income (loss from continuing operations attributable to common stockholders (.03) (.18) -- (.04) Income (loss) from discontinued operations -- -- -- -- ------------ ------------ ------------ ------------ Income (loss) attributable to common stockholders (.03) (.19) -- (.04) ============ ============ ============ ============ Weighted average number of shares of common stock outstanding 11,786,734 9,863,072 20,553,452 11,441,759 ============ ============ ============ ============ See accompanying notes to financial statements 5
Integrated Spatial Information Solutions, Inc., and Subsidiary Condensed and Consolidated Statements of Cash Flow (Unaudited) For the Nine months ended June 30, 1999 1998 - ---------------------------------- ---- ---- Operating activities: Net loss $ (309,981) $(1,778,176) Adjustment to reconcile net loss to net cash used in operating activities: Depreciation and amortization 596,123 580,982 Stock options and warrants issued for services performed 45,211 412,577 Gain on litigation settlement (414,312) -- Gain on sale of assets (173,905) -- Decrease in land and building held for resale 1,083,522 -- Write off accumulated depreciation due to discontinued operations -- (129,002) Decrease (increase) in accounts receivable 660,795 (8,905) Decrease in accrued settlement liability (64,685) (42,003) Decrease in other assets 55,024 64,892 Decrease in accounts payable (20,513) (598,490) Decrease in accrued expenses (253,027) (179,347) Decrease in deferred revenue (58,674) (14,475) Increase in client prepayments 158,209 -- ----------- ----------- Net cash generated (used) by operating activities 1,303,787 (1,691,947) ----------- ----------- Investing activities: Purchase of equipment (94,301) (57,722) Book value of assets sold (1,091,843) -- Receipt from sale of assets 1,254,126 1,104,125 ----------- ----------- Net cash (used) provided by investing activities 67,982 1,046,403 ----------- ----------- Financing activities: Payments on checks written against future deposits (207,650) (269,587) Proceeds of borrowings 60,000 -- Payment of debt (959,144) (464,873) Dividends on preferred stock (36,723) -- Issuance of common stock -- 758,174 Issuance of convertible preferred stock -- 212,500 ----------- ----------- Net cash used by financing activities (1,143,517) 236,214 ----------- ----------- Net increase (decrease) in cash 228,252 (409,330) Cash and cash equivalents, beginning of period 55,045 582,326 ----------- ----------- Cash and cash equivalents, end of period $ 283,297 $ 172,996 =========== =========== See accompanying notes to financial statements 6
Integrated Spatial Information Solutions, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) Condensed Consolidated Financial Statements The condensed consolidated financial statements included herein have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The Company believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company's consolidated financial position as of June 30, 1999, the consolidated results of its operations for the nine-month periods ended June 30, 1999, and 1998 and statements of cash flows for the nine-month periods then ended. The accounting policies followed by the Company are set forth in the annual report of September 30, 1998, filed on Form 10-KSB, as amended, and the audited consolidated financial statements therein with the accompanying notes thereto. While management believes the procedures followed in preparing these consolidated financial statements are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the Company later in the year. The consolidated results of operations for the three and nine-month period ended June 30, 1999, are not necessarily indicative of the results to be expected for the full year ending September 30, 1999. (2) Accounts Receivable Accounts receivable contains amounts computed under the cost-to-cost method to determine percentage of completion as described in the Form 10-KSB for September 30, 1998. (3) Provision for Income Taxes At the beginning of the fiscal year the Company had net operating loss carry-forwards of $6.0 million with expirations through 2018. At June 30, 1999, the amount of the net operating loss carry-forward balance is estimated at $6.4 million. The Company expects to incur a minimal amount of alternative minimum tax for the fiscal year. Since the Company is unable to determine that deferred tax assets exceeding tax liabilities are more likely than not to be realized, it will record a valuation allowance equal to the excess deferred tax assets at fiscal year end. (4) Litigation Subsequent to the end of the quarter, former consultants to the Company, Transition Partners Limited, a Colorado Corporation, filed a claim for an amount in excess of $2 million on July 16, 1999 in District Court for Boulder County, Colorado, alleging, inter alia, breach of contract, nonpayment of certain services provided, misrepresentation and wrongful termination of a contractual arrangement. The Company believes the claim is without merit and intends to put forth a vigorous defense against the alleged claims. (See also Item 1, Legal Proceedings, below.) (5) Lease Obligations The Company leases various equipment as well as facilities under capital leases that expire through the year 2011 as noted in Note 7 to the Financial Statements in Form 10-KSB, as amended, September 30, 1998. 7 (6) Subsequent Events Dispute with Former Executive. On July 1, 1999 the Board of Directors terminated Mr. Stephen Carreker as Chairman and Chief Executive Officer under the provisions of his employment agreement allowing termination for cause. As previously reported on Form 8-K, dated July 1, 1999, the Company subsequently filed a civil action against Mr. Carreker. The Company's complaint, filed on July 2, 1999, in the District Court of Denver, Colorado, alleges that Mr. Carreker made false statement to, and concealed information from, the Board of Directors and other regarding the Company's operations. The Company seeks compensatory and punitive damages in unspecified amounts as well as pre- and post-judgement interest and award of legal cost, expense and attorneys' fees. Through his attorney, Mr. Carreker has asserted that he is entitled to severance compensation, bonus payment, and has rights to stock options for both vested and non-vested performance stock option grants as if he were terminated for reasons other than death, disability, cause, voluntary resignation or expiration of the term of his agreement. Mr. Carreker has filed a demand for arbitration pursuant to his employment contract with the American Arbitration Association. The Company intends to vigorously contest all claims asserted by Mr. Carreker, including claims regarding the alleged rights to performance related stock option grants for which performance goals were not met. Nothing in this report should be construed to limit or otherwise affect the Company's claims against Mr. Carreker, including claims with respect to his entitlement to certain equity grants and alleged bonus payments. Agreement with New Chairman. Effective July 6, 1999 the Company entered into an Agreement for Services with Mr. Gary S. Murray wherein he is retained as the Chairman of the Board of Directors. The term of the Agreement begins July 1, 1999 and ends the earlier of June 30, 2001 or the date upon which he is not elected as a Director or is removed as a Director. Annual base compensation for Mr. Murray is set at $50,000, payable in equal monthly installments of the Company's common stock priced at the average price for the five business days preceding the date of the Agreement, or $0.2906, and options to purchase 175,000 shares per annum of the Company's common stock at $0.31 per share vesting in quarterly installments and exercisable for three years from the date of the Agreement. In addition, Mr. Murray received incentive options to acquire 688,235 shares of the Company's common stock fully vested and immediately exercisable at an exercise price of $0.2906 per share. He exercised the stock options and on July 13, 1999 submitted payment to the Company. The Company has agreed to file a registration statement with the Securities and Exchange Commission as soon as practicable to register the public sale of the common stock underlying the options granted under the Agreement. Common stock held by the Chairman, even though registered, will be subject to the SEC Rule 144 restrictions imposed on affiliates of the Company. The rights and duties under the Agreement are not assignable, except that Mr. Murray may assign options issuable to an entity of which he owns more than 50% of the voting power and such entity which has received the options may assign them to Mr. Murray. The Agreement for Services is made a part of this report as Exhibit 10.7 and appears at page 15. Related Party Agreement with HumanVision LLC. Mr. Murray is the principal owner and executive officer of HumanVision LLC, an organization that entered into a consulting agreement with the Company on July 6, 1999. The agreement ends upon the earlier of June 30, 2001; the date upon which Mr. Murray is not elected as a Director or is removed as a Director; and the date upon which he does not own more than 50% of the voting power of HumanVision. Under the agreement, HumanVision will provide certain services related to developing and implementing actions to increase shareholder value through articulation of a vision for the Company, identifying and reviewing merger and acquisition candidates, obtaining capital (debt or equity) to finance mergers and acquisitions, and recruiting and evaluating candidates for senior executive and director position. Compensation for these services consists of performance options in two quantities of 322,581 each to acquire common stock of the Company at an exercise fee of $0.31 per share if the market capitalization of the Company exceeds $30 million for the first quantity and $60 million for the second quantity for 20 of 30 consecutive business days at any time prior to June 30, 2002. The Company will issue each performance option granted within 30 days of the date the respective performance goal is achieved and the option will be exercisable for a period of three years from the date of issue. The Company is obligated to register the public sale of the underlying common stock as soon as practicable after the options become exercisable. The agreement also provides for a success fee of 1.5% of the transaction value in the event the Company successfully completes a merger with 8 or into another entity or completes any acquisition of stock or assets during the term of the agreement. The fee, which applies only to those activities outside the normal course of business and only to entities other than existing subsidiaries of the Company, is to be paid in the currency of the applicable transaction for which it is earned. The Consulting Services Agreement is made a part of this report as Exhibit 10.8 and appears at page 20. 7. Accounting for Preferred Stock Convertible at a Discount to the Market. The prior year statement of operations gives effect to a discount of 25% of the common stock which would result and be deemed to be additional dividend to the holders of the Company's 6% convertible preferred stock sold on October 14, 1997. That convertible preferred stock was convertible into common stock at a 25% discount to the five day average market price of the common stock immediately preceding the conversion date which was lower than the five day average market price at the date of placement. This difference, $83,333 for the prior year first quarter, on the first possible date of conversion is an imputed discount and is deemed to be additional dividend available to the holders of the preferred stock which reduced prior year first quarter income available to common stock shareholders. Accordingly, it was deducted from cumulative net income to arrive at net income attributable to common shareholders. All of the convertible preferred stock from the October 1997 placement has since been converted into common stock. 8. Earnings Per Share. Earnings per share are calculated in accordance with the provisions of Statement of Financial Accounting Standard No. 128 --"Earnings per Share" (SFAS Nor. 128). SFAS No. 128 provides for the calculation of "Basic" and "Diluted" earnings per share. Basic earnings per share includes no dilution for unissued shares and is computed by dividing income or loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution attributable to the potential issue of additional securities that could share in the earnings of an entity and known as fully diluted earnings per share. No computation of diluted loss per share is displayed when such computation would result in a reduced net loss per share for a period. Calculation of basic and diluted earnings per share for the periods presented are displayed below:
Nine Months Ended Three Months Ended June 1999 June 1998 June 1999 June 1998 --------- --------- --------- --------- Basic Earnings (loss) per common share: Numerator: Income (loss) from continuing operations $ (309,981) $ (1,735,961) $ 17,178 $ (451,680) Income (loss) from dis- continued operations -- (42,215) -- (413) Preferred stock dividends (36,723) (14,910) (12,241) -- Deemed preferred stock dividends -- (83,333) -- -- ------------ ------------ ------------ ------------ Income (loss) attributable to common shareholders $ (346,704) $ (1,876,419) $ 4,937 $ (452,093) ============ ============ ============ ============ Denominator: Weighted average common shares outstanding 11,786,734 9,863,072 11,970,226 11,441,759 ============ ============ ============ ============ Per share amounts: Income (loss) from continuing operations $ (0.03) $ (0.18) $ -- $ (0.04) Income (loss) from dis- continued operations -- -- -- -- ------------ ------------ ------------ ------------ Basic earnings (loss) $ (0.03) $ (0.15) $ -- $ (0.04) ============ ============ ============ ============ Table continues on next page. 9 Nine Months Ended Three Months Ended June 1999 June 1998 June 1999 June 1998 --------- --------- --------- --------- Diluted earnings (loss) per common share: Numerator Income (loss) from continuing operations $ (309,981) $ (1,735,961) $ 17,178 $ (451,680) Income (loss) from dis- continued operations -- (42,215) -- (413) ------------ ------------ ------------ ------------ Income (loss) attributable to common shareholders $ (346,704) $ (1,876,419) $ 4,937 $ (452,093) ============ ============ ============ ============ Denominator: Weighted average common shares outstanding 11,786,734 9,863,072 11,970,226 11,441,759 Effect of dilutive securities: Stock options -- -- 4,397,930 -- Warrants -- -- 1,493,039 -- Conversion of convertible preferred stock outstanding -- -- 2,672,257 -- ------------ ------------ ------------ ------------ Weighted average of common Shares and assumed conver- sions outstanding 11,786,734 9,863,072 20,553,452 10,4441,759 ============ ============ ============ ============ Per share amounts: Income (loss) from continuing operations $ (0.03) $ (0.18) $ -- $ (0.04) Income (loss) from dis- continued operations -- -- -- -- ------------ ------------ ------------ ------------ Income (loss) attributable to common shareholders $ (0.03) $ (0.19) $ -- $ (0.04) ============ ============ ============ ============
PART 1, ITEM 2: MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OPERATIONS Forward-Looking Statements. This quarterly report contains certain forward-looking statements that describe the future business, prospects, actions and possible results of Integrated Spatial Information Solutions, Inc. (the "Company") and the expectations of the Company and its management which are not historical facts and therefore constitute forward-looking statements as contemplated in the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth. As a result, there also can be no assurance that the forward-looking statements included herein will prove to be accurate or that the objectives and plans of the Company will be achieved. Financial Condition: - -------------------- Liquidity. Cash increased $228,252 to a total of $283,297 from $55,045 at September 30, 1998. The increase was primarily from increased cash generated from operations. At June 30, 1999 the Company has working capital of approximately $560,000 versus negative working capital of $573,000 a year prior. The principal reasons for this improvement are the sale of the Company's real property in Franktown, Colorado, the favorable settlement of litigation with the federal government and a private placement of preferred stock in August 1998. The sale of the real 10 property resulted in additional current assets of approximately $174,000 and the litigation was settled for $414,000 less than the amount reserved in previously issued financial statements with a positive impact on working capital of a like amount. The preferred stock sale resulted in $463,000 of additional current assets. The Company's current ratio of total current assets to current liabilities increased to 1.30:1 from .60:1 a year ago and 1.20:1 at September 30, 1998. As a result of losses from operations and limited working capital, the Company's ability to timely meet payment due dates could be in question. Management's plan to continue the operation of the Company includes: negotiation of an asset based line of credit, the negotiation of a credit facility for additional acquisition and operating capital needs; negotiation of more manageable payment schedules with preferred vendors and service providers, and raising funds through additional debt or equity instruments, of which there can be no assurance. The Company further believes it will experience increased cashflows from new contract awards on which revenue producing work has begun; and that it will be able to reduce the cost of operations and improve cash flows to insure the viability of the Company. Capital Resources. During the fourth quarter of the FY 1998 the Company sold 700 shares of convertible preferred stock in a private offshore transaction which resulted in net funding of approximately $463,000. On February 9, 1999 the Company was advised by a representative of a lending institution that the institution was withdrawing its previous commitment letter for a line of credit. The Company is in discussions with other possible sources for an asset based source of working capital. Accordingly, management believes it will be able to secure a credit facility large enough to support its near term working capital requirements. The Company's long-term liquidity requirements may be significant in order to implement its acquisition plans. The Company has established strong relations with investment banking entities and management believes it may be able to secure equity and credit facilities to support its acquisition program. There can be no guarantee sufficient funds can be secured to achieve these plans. Results of Operations: - ---------------------- Nine Months of Fiscal Year 1999 - ------------------------------- Revenue for the first nine months of FY 1999 aggregated $6,216,000, an increase of 5.5% over the first nine months of FY 1998, and was generated entirely by the Company's operating subsidiary whose primary activity is in the area of geographic information systems. Total consolidated costs and expenses were $6,756,000 or 108.7% of revenue. Approximately $887,000 of this amount was related to parent company general and administrative costs, down from $1,582,000 during the prior year period. Included in parent company expenses is approximately $294,000 of amortization of goodwill resulting from the acquisition of its operating subsidiary. The remaining $5,869,000 is related to the subsidiary's GIS operations and is essentially unchanged from the costs incurred for the same period during the prior year. Interest expense increased over that of the prior year by $48,000 as a result of higher interest costs related to the Company's Franktown property, which sold in April 1999. Accordingly, interest expense is expected to decrease in the ensuing quarters. Other income decreased by $114,000 as the Franktown facility ceased generating rent income in June, 1998 when the lessor initiated negotiations to purchase the facility pursuant to an option to purchase the land and building. The consummation of the sale of the Franktown facility resulted in a gain of $174,000 during the period. Settling litigation with the federal government resulted in a gain of $414,000 in the period. 11 There were no transactions from discontinued operations during the period. Third Quarter of Fiscal Year 1999 - --------------------------------- Revenue of $2,250,000 for the third quarter of FY 1999 resulted entirely from the Company's operating subsidiary, PlanGraphics, Inc., engaged in geographic information systems activities. This level of current quarter revenue represents an increase of 1.5% over the same period of the prior year. The Company's total costs and expenses were $2,337,000 or 103.8% of revenue. This represented a decrease of $247,000 from the prior year, an improvement of 9.5 %. Salaries and employee benefits remained essentially unchanged, direct contract costs increased by $111,000 (approximately 33%) and other operating costs decreased by $333,000 (approximately 33%). Expenses at the parent company were about $245,000 lower than the comparable period in the prior year while expenses remained essentially flat at the subsidiary level. The operating loss decreased by $280,000 to $86,000 from last fiscal year's third quarter of $366,000 reflecting management's efforts to improve operations. Interest expense decreased by $44,000 as a result of the sale (and payment of the related mortgage) of the Company's Franktown facility and the continuing reduction of debt at the subsidiary. Other income decreased by $27,000 reflecting the absence of rent income from the Franktown facility. The sale of the Franktown facility resulted in a gain of $174,000 in the current period. There were no transactions from discontinued operations during the period. Nine Months of Fiscal Year 1998 - ------------------------------- Revenue for the nine months of FY 1998 amounted to $5,892,000 and was generated entirely by the Company's operating subsidiary in geographic information systems and is not comparable with restated revenue of nil for the first half of the prior fiscal year. This level of current period revenue reflects a decline of about 12% from the subsidiary's revenue for the same period of the prior year. This decline from the subsidiary's prior year level of operations for the same quarter resulted from the winding down of a significant long-term contract and a delay in the commencement of work on replacement contract activity. Concurrently, the Company's operating subsidiary generated net profits in each of the months during the current quarter. Total consolidated costs and expenses reached $7,430,000 or 126.1% of revenue. Approximately $2,344,000 was related to parent company general and administrative costs and is not comparable to reported costs for the prior year which resulted from discontinued operations of the Company. Of this amount, approximately $375,000 was related to actions resulting from acquisition activities; and $294,000 of acquisition amortization expenses were also recorded. The balance was related to GIS operations and reflected a decrease of approximately 10% from the costs for the same period a year prior which were not publicly reported. The decline in GIS related costs resulted from management actions to reduce operating costs in response to the temporary decline in revenue. Interest expense increased over the prior year by $210,000 as a result of the interest costs added from the GIS subsidiary acquired late in the fourth quarter of FY 1997. However, trend analysis of both parent and subsidiary interest expenses for the current period compared to interest expenses for the same period of FY 1997 reveals a decrease of 27% for the parent company due to certain leased manufacturing equipment costs no longer occurring because of the divestiture of manufacturing assets; the retirement of the SBA-held note; and a decrease of about 15% in subsidiary generated interest expenses resulting from retirement of certain debt. Insurance proceeds and other income decreased from prior year totals because the prior year totals included receipt of proceeds amounting to $400,000 from keyman life insurance policies carried on a former officer and director of the Company. No such proceeds were received during the nine months of fiscal 1998. 12 Discontinued operations total reflects a small increase in expenses related to the discontinued manufacturing operations. Third Quarter of FY 1998. - ------------------------- Revenue for the third quarter of FY 1998 amounted to $2,217,000 and was generated entirely by the Company's operating subsidiary in geographic information systems and is not comparable with restated revenue of nil for the third quarter of the prior fiscal year (Fiscal year 1997). This level of current quarter revenue reflects an increase of approximately 13% from the subsidiary's revenue for the same period of the prior year. Total costs and expenses reached $2,583,000 or 116.5% of revenue. Approximately $365,000 was related to parent company general and administrative costs and is not comparable to reported costs for the prior year which resulted from discontinued operations of the Company. Of this amount, approximately $223,000 was related to actions resulting from acquisition activities; and another $98,000 of acquisition amortization expenses were recorded also. The balance was primarily related to GIS operations and reflected a slight increase from costs for the same period a year prior which were not publicly reported. The increase in GIS related costs resulted from increased compensation, increased proposal costs and subcontracting costs. Interest expense increased over that of the prior year by $81,000 as a result of the interest costs added from the GIS subsidiary acquired late in the fourth quarter of FY 1997. However, trend analysis of both parent company interest ($23,000) and subsidiary interest ($148,000) for the current quarter compared to interest expenses for the same period of FY 1997 reveals a decrease of 27% for the parent company due to certain leased equipment costs no longer occurring because of the divestiture of manufacturing assets and due to the retirement of the SBA-held note and a decrease of about 10% in subsidiary generated interest expenses resulting from retirement of certain debt. Discontinued operations total reflects a decrease in expenses related to the discontinued manufacturing operations. Contract Backlog - ---------------- The Company's has reported a backlog of GIS contracts and work assignments totaling approximately $6.1 million compared to $7.7 million of uncompleted work in the backlog for the prior year. Management believes the decrease in backlog and work assignments is principally related to timing issues in sales cycles. PART II- OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Former consultants to the Company, Transition Partners Limited, a Colorado Corporation, filed a claim for an amount in excess of $2 million on July 16, 1999 in District Court for Boulder County, Colorado. The claim alleges, inter alia, breach of contract, nonpayment for certain services provided, misrepresentation and wrongful termination of a contractual arrangement. The Company believes the claim is without merit and intends to put forth a vigorous defense against the alleged claims. (See also Note 4 to the Financial Statements.) 13 ITEM 2. CHANGES IN SECURITIES Not Applicable. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not Applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not Applicable. ITEM 5. OTHER INFORMATION. Not Applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8K. a. Index of Exhibits. The following list of exhibits is made a part of this report and the exhibits are attached to this report. Exhibit 10.7 Agreement for Services between the Company and Gary S. Murray, dated July 6, 1999. Exhibit 10.8 Consulting Services Agreement between the Company and HumanVision LLC, dated July 6, 1999. b. Reports on Form 8-K filed since the beginning of the current quarter: Current Report on Form 8-K, dated July 1, 1999 reporting the Company had established a record date of July 30, 1999 for shareholders eligible to vote at the annual shareholders' meeting on September 2, 1999; the appointment of a new chairman; and a civil action taken against a former officer of the Company. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Integrated Spatial Information Solutions, Inc. Dated: August 4, 1999 /S/ Fred Beisser ---------------- Frederick G. Beisser Vice President-Finance & Administration, Secretary & Treasurer and Principal Financial Accounting Officer 14 EX-10.7 2 EXHIBIT 10.7 AGREEMENT FOR SERVICES This agreement ("Agreement") is made effective July 6, 1999, between Integrated Spatial Information Solutions, Inc., a Colorado corporation (the "Company") and Gary S. Murray (the "Executive"). In consideration of the mutual benefits and obligations in this Agreement, and intending to be legally bound, the Company and Executive agree as follows: 1. OFFICE AND DUTIES a. Executive shall be retained as the Chairman of the Board of Directors of the Company. The Executive shall have the duties specified in the Bylaws of the Company, and such other duties as may be assigned by the Board of Directors from time to time. b. Executive agrees to devote as much of his time and effort as reasonably necessary to the performance of the duties of the office. Executive may have interests in other business that do not compete with the Company or its subsidiaries, and may render services for such other business interests, provided such service does not prevent Executive from performing his duties under this Agreement. c. The Company agrees to nominate Executive for election as a member of the Board of Directors at each meeting of stockholders for the election of Directors during his employment as Chairman. 2. TERM OF SERVICES The term of services as Chairman of the Board of Directors shall begin July 1, 1999 and end upon the earlier of (a) June 30, 2001, and (b) the date upon which he is not elected as a Director or is removed as a Director. 3. COMPENSATION The Company shall compensate Executive for services as Chairman as follows: a. Base Compensation. The annual base compensation payable to Executive upon commencement of this Agreement shall be: (1) $50,000, payable in equal monthly installments in shares of the Company's common stock. The common stock shall be priced at $.2906 per share, which is the five day average immediately prior to the date of this Agreement; and (2) Options to purchase 175,000 shares per annum of the Company's common stock. The Options will be issued under the Company's Equity Compensation Plan, vested in quarterly installments, exercisable for 3 years from the date of this Agreement at the price of $.31 per share. b. Incentive Options. In recognition of the importance of the position, and the challenges accepted by him, Executive shall receive an Incentive Bonus consisting of a stock option grant to purchase 688,235 shares of the Company's common stock fully vested and immediately exercisable. The Incentive Options are exercisable at $.2906 per share, which is the five day average price immediately prior to the date of this agreement. 15 c. Registration. The Company agrees to file a registration statement with the Securities and Exchange Commission as soon as practicable to register the public sale of the common stock underlying the stock options granted under this Agreement. d. Reimbursement. The Company shall reimburse Executive for all reasonable out of pocket expenses incurred by Executive in connection with performance of his duties upon submission of vouchers, subject to such guidelines and policies as may be promulgated by the Company. 4. TRADE SECRETS AND CONFIDENTIAL INFORMATION a. As a material inducement to the Company to enter into this Agreement and to pay Executive the compensation stated in this Agreement, Executive covenants and agrees that Executive shall not, at any time, directly or indirectly, use, disseminate, or disclose for any purposes other than for the purposes of the Company's business, any of the Company's confidential information or trade secrets, unless such disclosure is compelled in a judicial proceeding. Upon termination of this employment, all documents, records, notebooks, and similar repositories of records containing information relating to any trade secrets or confidential information then in the Executive's possession or control, whether prepared by him or by others, shall be left with the Company or returned to the Company upon its request. This section shall not restrict the Executive from using his General Knowledge (the ideas, concepts, know-how and other industry information that is part of his common knowledge) from pursuit of livelihood subsequent to any termination of this Agreement. b. During the term of this Agreement and for a period of one (1) year following the termination of the Agreement, the Executive shall not pursue business opportunities with or serve as a Consultant or member of the staff in any capacity to any other companies with whom the Company has had a primary or subcontractor role during the prior year of employment, without the prior written permission of the Company. For one year following termination of employment, the Executive confirms that he will not, without prior written consent, perform work that the Company or any of its subsidiaries holds in backlog or is pursing at the time of termination, whether by independent contract, through a competitor, or by direct employment with client or prospect. c. This covenant of non-disclosure has been negotiated and agreed to by and between the Company and Executive with the full knowledge of and pursuant to the Colorado Trade Secrets Act and is deemed by both parties to be fair and reasonable. 5. INDEMNIFICATION So long as Executive is not found by a court of law to be guilty of a willful and material breach of this Agreement, or to be guilty of gross misconduct, he shall be indemnified from and against any and all losses, liability, claims and expenses, damages, or causes of action, proceeding or investigations, or threats thereof (including reasonable attorney fees and expenses of counsel satisfactory to and approved by Executive) incurred by Executive, arising out of, in connection with, or based upon Executive's services and the performance of his duties pursuant to this Employment Agreement, or any other matter contemplated by this Employment Agreement, whether or not resulting in any such liability subject to such limitations as are provided by the Colorado Business Corporations Act; and Executive shall be reimbursed by the Company as an when incurred for any reasonable legal and other 16 damage, liability, action proceeding, investigation or threat thereof, or producing evidence, producing documents or taking any other action in respect thereto (whether or not Executive is a defendant in or target of such action, proceeding or investigation), subject to such limitations as are provided by the Colorado Business Corporations Act. 6. OTHER MATTERS a. Successors. The rights and duties of a party hereunder shall not be assignable by that party; provided, however, that this Agreement shall be binding upon and inure to the benefit of any successor of the Company, and any such successor shall be deemed substituted for the Company under the terms of this Agreement. The term successor shall include any person, firm, corporation or other business entity which at any time, by merger, purchase or otherwise, acquires all or substantially all of the assets or business of the Company. Executive may assign Options issuable under paragraph 3a(2) to an entity of which the Executive owns more than 50% of the voting power ("Permitted Transferee"), provided that any options assigned by the Executive shall be void if the Executive ceases to own more than 50% of the voting power of the entity holding such options. A Permitted Transferee may transfer such Options to the Executive at any time prior to the expiration of the Options. b. Entire Agreement. With respect to the matters specified herein, this Agreement contains the entire agreement between the parties and supersedes all prior oral and written agreements, understandings and commitments between the parties. This Agreement shall not affect the provisions of any other compensation, retirement or other benefits program of the Company to which Executive is a party or of which he is a beneficiary. No amendments to this Agreement may be made except through a written document signed by both parties. c. Validity. In the event that any provision of this Agreement is held to be invalid, void or unenforceable, the same shall not affect, in any respect whatsoever, the validity of any other provision of the Agreement. d. Paragraphs and Headings. Paragraphs and other headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. e. Notice. Any notice or demand required or permitted to be given under this Agreement shall be made in writing and shall be deemed effective upon the personal delivery thereof is delivered or, if by express delivery service, 24 hours after placing in the control of the express delivery service; or if mailed, 48 hours after having been deposited in the United States mail, postage prepaid, and addressed to the respective party as follows: To the Company: Integrated Spatial Information Solutions, Inc. Attention: President 112 East Main Street, Frankfort, KY 40601-2314 To the Executive: Garry S. Murray 6305 Ivy Lane, Suite 410, Greenbelt, MD 20770 Either party may change the address to which such notices are to be addressed by giving the other party notice in the manner set forth in this Agreement. f. Attorney's Fees and Costs. In any action at law or in equity to enforce any of the provisions or rights under this Agreement, the unsuccessful party to such litigation, as determined by the Court in a final judgment or decree, shall 17 pay the successful party or parties all costs, expenses and reasonable attorneys' fees incurred therein by such parry or parties (including without limitation such costs, expenses and fees on any appeals), and if such successful party or parties shall recover judgment in any such action or proceeding, such costs, expenses and attorneys' fees shall be included a part of such judgment. Notwithstanding the foregoing provision, in no event shall the successful party or parties be entitled to recover any amount from the unsuccessful party for costs, expenses and attorneys' fees that exceed the unsuccessful party's costs, expenses and attorneys' fees in connection with the action or proceeding. g. Applicable Law and Dispute Resolution. To the full extent controllable by stipulation of the parties, this Agreement shall be interpreted under Colorado law. All disputes arising out of this Agreement will be settled by binding arbitration in Denver, Colorado, under the rules of the American Arbitration Association. Integrated Spatial Information Solutions, Inc. /s/ John C. Antenucci /s/ Gary S. Murray - --------------------- ------------------ By: John Antenucci, President By: Gary S. Murray 18 EX-10.8 3 EXHIBIT 10.8 CONSULTING SERVICES AGREEMENT This consulting services agreement ("Agreement") is made effective July 6, 1999, between Integrated Spatial Information Solutions, Inc., a Colorado corporation (the "Company") and HumanVision, LLC, a Maryland limited liability company (the "Consultant"). WHEREAS, the Company seeks to increase shareholder value through growth in revenues and earnings, and WHEREAS, the Company desires to utilize the experience and services of the Consultant to achieve its goals because the Consultant, through its principal executive officer, has experience in developing and implementing actions to increase shareholder value, THEREFORE, In consideration of the mutual benefits and obligations in this Agreement, and intending to be legally bound, the Company and Consultant agree as follows: 1. RETENTION OF CONSULTANT a. The Company retains the Consultant to provide the services specified in this Agreement, and agrees to pay the Consultant the compensation specified in this Agreement for such services. The Consultant agrees to assign Gary S. Murray ("Murray"), its principal executive officer, to undertake all of the requested services. b. Consultant agrees to direct and permit Murray to devote as much of his time and effort as reasonably necessary to the performance of the duties required by this Agreement. Consultant may have interests in other business that do not compete with the Company or its subsidiaries, and may render services for such other business interests, provided such service does not prevent Consultant from performing his duties under this Agreement. 2. CONSULTING PERIOD a. The term of this Agreement shall begin July 6, 1999 and end upon the earlier of: (1) June 30, 2001; (2) the date upon which Murray is not elected as a Director or is removed as a Director of the Company; and (3) the date upon which Murray does not own more than 50% of the voting power of the Consultant. b. In recognition of the fact that the results of Consultant's efforts may not be manifested until after the services are rendered, the right to compensation specified in paragraph 4a shall expire on the earlier of (1) June 30, 2002, and (2) 12 months after the termination of this Agreement. 3. DUTIES OF CONSULTANT a. Consultant shall provide the following professional services to the Company: (1) Assist the Company in defining and articulating a vision for the Company within a three year time horizon; (2) Assist the Company in identifying and reviewing prospective merger and acquisition candidate firms; (3) Participate in the due diligence review of prospective merger and acquisition candidate firms; (4) Participate in the negotiation of agreements with prospective merger and acquisition candidate firms and the owners/shareholders; 19 (5) Assist the Company in obtaining capital (debt and/or equity) to finance merger and acquisition activity; (6) Assist the Company in recruiting and evaluating candidates for senior executive and director positions; and (7) Such other matters as may be assigned by the Board of Directors and accepted by the Consultant from time to time. b. Consultant shall deliver reports to the Company's Board of Directors, from time to time and as requested, and keep the Board advised of the services and activities performed by the Consultant under this Agreement. 4. COMPENSATION The Company shall compensate Consultant for services under this Agreement as follows: a. Performance Option. In order to promote goals that may increase shareholder value, the Consultant shall be eligible to receive Performance Options as follows: (1) The Consultant is granted options to purchase 322,581 shares of the Company's common stock at $.31 per share (which is the per share market price on the date of this Agreement); provided such options are only exercisable if the Company's market capitalization exceeds $30 million on 20 of 30 consecutive business days at any time prior to June 30, 2002; (2) In addition to the Options in paragraph 4a(1), the Consultant is granted options to purchase 322,581 shares of the Company's common stock at $.31 per share; provided such options are only exercisable if the Company's market capitalization exceeds $60 million on 20 of 30 consecutive business days at any time prior to June 30, 2002; (3) Each Performance Option shall be issued within 30 days following the date the respective performance goal is achieved, and shall be exercisable for a period of 3 years from the date of issue; (4) For purposes of this Agreement, market capitalization on any given day shall be equal to the number of common shares issued and outstanding times the average of the per share closing bid and ask prices for the common stock as reported on the primary market where the common stock is traded; and (5) The Company agrees to file a registration statement with the Securities and Exchange Commission, as soon as practicable after the options become exercisable, to register the public sale of the common stock underlying the Performance Options granted under this Agreement. b. Success Fee. In the event the Company successfully completes any merger with or into another entity (other than an existing subsidiary of the Company), or any acquisition of stock or assets (other than in the ordinary course of business and other than with an existing subsidiary of the Company) during the term of this Agreement, the Company will pay the Consultant a success fee equal to one and one-half percent (1.5%) of the transaction value. The success fee shall be paid in the currency of the deal unless otherwise agreed. For example, if the Company issues securities in the transaction, the success fee will be paid to Consultant by the issue of the corresponding amount of such securities. The transaction value shall be the cost of the transaction as reflected on the financial records of the Company, or the total dollar value received by all shareholders of the Company in the case of a merger into another entity. 20 c. Reimbursement. The Company shall reimburse Consultant for all reasonable out of pocket expenses incurred by Consultant in connection with performance of the assigned duties upon submission of vouchers, subject to such guidelines and policies as may be promulgated by the Company. 5. TRADE SECRETS AND CONFIDENTIAL INFORMATION a. As a material inducement to the Company to enter into this Agreement and to pay Consultant the compensation stated in this Agreement, Consultant covenants and agrees that: (1) Consultant shall hold any of the Company's confidential information or trade secrets in a confidential manner; and (2) Consultant shall not, at any time, directly or indirectly, use, disseminate, or disclose for any purposes other than for the purposes of the Company's business, any of the Company's confidential information or trade secrets, unless such disclosure is compelled in a judicial proceeding. Upon termination of this Agreement, all documents, records, notebooks, and similar repositories of records containing information relating to any trade secrets or confidential information then in the Consultant's possession or control, whether prepared by it or by others, shall be left with the Company or returned to the Company upon its request. This section shall not restrict the Consultant from using its General Knowledge (the ideas, concepts, know-how and other industry information that is part of its common knowledge) from pursuit of business subsequent to any termination of this Agreement. b. For one year following termination of employment, the Consultant confirms that it will not, without prior written consent, perform work that the Company or any of its subsidiaries holds in backlog or is pursing at the time of termination, whether by independent contract, through a competitor, or by direct employment with client or prospect. c. This covenant of non-disclosure has been negotiated and agreed to by and between the Company and Consultant with the full knowledge of and pursuant to the Colorado Trade Secrets Act and is deemed by both parties to be fair and reasonable. 6. INDEMNIFICATION So long as Consultant is not found by a court of law to be guilty of a willful and material breach of this Agreement, or to be guilty of gross misconduct, it shall be indemnified from and against any and all losses, liability, claims and expenses, damages, or causes of action, proceeding or investigations, or threats thereof (including reasonable attorney fees and expenses of counsel satisfactory to and approved by Consultant) incurred by Consultant, arising out of, in connection with, or based upon Consultant's services and the performance of its duties pursuant to this Agreement, or any other matter contemplated by this Agreement, whether or not resulting in any such liability, subject to such limitations as are provided by the Colorado Business Corporations Act. Consultant shall be reimbursed by the Company as an when incurred for any reasonable legal and other damage, liability, action proceeding, investigation or threat thereof, or producing evidence, producing documents or taking any other action in respect thereto (whether or not Consultant is a defendant in or target of such action, proceeding or investigation), subject to such limitations as are provided by the Colorado Business Corporations Act. 7. OTHER MATTERS a. Successors. The rights and duties of a party hereunder shall not be assignable by that party; provided, however, that this Agreement shall be binding upon and inure to the benefit of any successor of the Company, and any such successor shall be deemed substituted for the Company under the terms of this Agreement. The term successor shall include any person, firm, corporation or other business entity which at any time, by merger, purchase or otherwise, acquires all or substantially all of the assets or business of the Company. 21 b. Entire Agreement. With respect to the matters specified herein, this Agreement contains the entire agreement between the parties and supersedes all prior oral and written agreements, understandings and commitments between the parties. No amendments to this Agreement may be made except through a written document signed by both parties. c. Validity. In the event that any provision of this Agreement is held to be invalid, void or unenforceable, the same shall not affect, in any respect whatsoever, the validity of any other provision of the Agreement. d. Paragraphs and Headings. Paragraphs and other headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. e. Notice. Any notice or demand required or permitted to be given under this Agreement shall be made in writing and shall be deemed effective upon the personal delivery thereof is delivered or, if by express delivery service, 24 hours after placing in the control of the express delivery service; or if mailed, 48 hours after having been deposited in the United States mail, postage prepaid, and addressed to the respective party as follows: To the Company: Integrated Spatial Information Solutions, Inc. Attention: President 112 East Main Street, Frankfort, KY 40601-2314 To the Consultant: HumanVision, LLC. Attention: Garry S. Murray 6305 Ivy Lane, Suite 410, Greenbelt, MD 20770 Either party may change the address to which such notices are to be addressed by giving the other party notice in the manner set forth in this Agreement. f. Attorney's Fees and Costs. In any action at law or in equity to enforce any of the provisions or rights under this Agreement, the unsuccessful party to such litigation, as determined by the Court in a final judgment or decree, shall pay the successful party or parties all costs, expenses and reasonable attorneys' fees incurred therein by such parry or parties (including without limitation such costs, expenses and fees on any appeals), and if such successful party or parties shall recover judgment in any such action or proceeding, such costs, expenses and attorneys' fees shall be included a part of such judgment. Notwithstanding the foregoing provision, in no event shall the successful party or parties be entitled to recover any amount from the unsuccessful party for costs, expenses and attorneys' fees that exceed the unsuccessful party's costs, expenses and attorneys' fees in connection with the action or proceeding. 22 g. Applicable Law and Dispute Resolution. To the full extent controllable by stipulation of the parties, this Agreement shall be interpreted under Colorado law, without application of choice of law principles. All disputes arising out of this Agreement will be settled by binding arbitration in Denver, Colorado, under the rules of the American Arbitration Association. Integrated Spatial Information Solutions, Inc. HumanVision, LLC /s/ John C. Antenucci /s/ Gary S. Murray - --------------------- ------------------ By: John Antenucci, President By: Gary S. Murray, President 23 EX-27 4 FINANCIAL DATA SCHEDULE
5 9-MOS SEP-30-1999 OCT-01-1998 JUN-30-1999 283,297 0 1,907,928 0 0 2,412,115 2,696,561 (643,967) 9,238,621 1,852,021 0 1 0 12,700,961 (7,417,330) 9,238,621 0 6,216,323 0 6,755,647 0 0 359,120 309,981 309,981 309,981 0 0 0 309,981 (.03) (.03)
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