-----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, G0wyX715Cmn0j7K2hk8L/8+pr27EAMjsbT36mtdigvH0PYqrh3rcJN1JS6j58qKV cPJSYp4KuUZWiXoNOCba4Q== 0000903893-97-000055.txt : 19970122 0000903893-97-000055.hdr.sgml : 19970122 ACCESSION NUMBER: 0000903893-97-000055 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19961107 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970121 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DATAWATCH CORP CENTRAL INDEX KEY: 0000792130 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 020405716 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-19960 FILM NUMBER: 97508516 BUSINESS ADDRESS: STREET 1: 234 BALLARDVALE ST CITY: WILMINGTON STATE: MA ZIP: 01887 BUSINESS PHONE: 5089889700 8-K/A 1 AMENDMENT NO. 1 TO FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A AMENDMENT NO. 1 TO FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): November 7, 1996 -------------------- DATAWATCH CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 0-19960 02-0405716 -------- ------- ---------- (State or other jurisdiction of (Commission file (I.R.S. Employer incorporation or organization) number) Identification No.) 234 Ballardvale Street, Wilmington, MA 01887 -------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code: (508) 988-9700 ------------------ No change since last report -------------------------------------------------------------- (Former name or address, if changed since last report) The undersigned registrant hereby amends the following items, financial statements, exhibits or other portions of its Current Report on Form 8-K dated November 7, 1996 as set forth in the pages attached hereto: (1) Item 7. Financial Statements and Exhibits (2) Exhibit Index (3) Filing of Additional Exhibits Datawatch Corporation (the "Company") hereby amends its Current Report on Form 8-K dated November 7, 1996 (the "Current Report") by deleting Item 7(a), Item 7(b) and Item 7(c) of the Current Report and replacing it with the following new Items 7(a), 7(b) and 7(c) so that as so amended said Items 7(a), 7(b) and 7(c) shall read in their entirety as follows: (1) Item 7. Financial Statements and Exhibits. (a) Financial Statements of Business Acquired. The following audited financial statements of Guildsoft Holdings Limited ("Guildsoft Holdings"), together with the manually signed Auditors' Report of Deloitte & Touche, Chartered Accountants and Registered Auditors, are filed as Exhibit 99.1 to this report and incorporated herein by reference: Profit and Loss Account for the year ended September 30, 1996 Balance Sheet dated as of September 30, 1996 Notes to the Accounts for the year ended September 30, 1996 The following audited financial statements of Guildsoft Limited, a wholly owned subsidiary of Guildsoft Holdings, together with the manually signed Auditors' Report of Deloitte & Touche, Chartered Accountants and Registered Auditors, are filed as Exhibit 99.2 to this report and incorporated herein by reference: Profit and Loss Account for the year ended September 30, 1996 Balance Sheet dated as of September 30, 1996 Notes to the Accounts for the year ended September 30, 1996 (b) Unaudited Pro Forma Combined Financial Information On November 7, 1996, the Company acquired (the "Acquisition") all of the outstanding capital stock of Guildsoft Holdings Limited, a corporation organized under the laws of England and Wales ("Guildsoft Holdings"), which in turn owns all of the -2- outstanding capital stock of Guildsoft Limited, a corporation organized under the laws of England and Wales ("Guildsoft"), in exchange for an aggregate of 125,000 shares of the Company's Common Stock, $.01 par value per share. The Acquisition has been accounted for as an asset purchase. The unaudited pro forma combined balance sheet as of September 30, 1996 gives effect to the Acquisition as if it had been consummated on September 30, 1996 and the unaudited pro forma combined statements of operations for the year ended September 30, 1996 gives effect to the Acquisition as if it had been consummated on October 1, 1995. The financial statements of Guildsoft Holdings and Guildsoft have been translated in accordance with Statement of Financial Accounting Standards No. 52. In the opinion of management, all adjustments necessary to fairly present this pro forma information have been made. The accompanying unaudited pro forma combined financial statements, which are filed as Exhibit 99.3 to this report and incorporated herein by reference, should be read in conjunction with the audited statements included in the Company's Annual Report on Form 10-K for the year ended September 30, 1996, and with the financial statements of Guildsoft Holdings and Guildsoft filed as Exhibits 99.1 and 99.2, respectively, to this report. The pro forma information is not necessarily indicative of the results that would have been reported had the Acquisition occurred on the dates indicated, nor is it indicative of the Company's future results. (c) Exhibits. *2.1 Share Sale and Purchase Agreement, dated November 7, 1996, among Datawatch Corporation and the individuals named on Schedule 1 contained therein, who constitute the holders of all of the outstanding shares of capital stock of Guildsoft Holdings Limited. 23.1 Consent of Deloitte & Touche, Chartered Accountants and Registered Auditors (Guildsoft Holdings Limited) 23.2 Consent of Deloitte & Touche, Chartered Accountants and Registered Auditors (Guildsoft Limited) 99.1 The following audited financial statements of Guildsoft Holdings Limited, together with the manually signed Auditors' Report of Deloitte & Touche, Chartered Accountants and Registered Auditors: Profit and Loss Account for the year ended September 30, 1996 -3- Balance Sheet dated as of September 30, 1996 Notes to the Accounts for the year ended September 30, 1996 99.2 The following audited financial statements of Guildsoft Limited, together with the manually signed Auditors' Report of Deloitte & Touche, Chartered Accountants and Registered Auditors: Profit and Loss Account for the year ended September 30, 1996 Balance Sheet dated as of September 30, 1996 Notes to the Accounts for the year ended September 30, 1996 99.3 The following unaudited pro forma condensed combined financial statements: Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 1996 Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended September 30, 1996 Notes to Unaudited Pro Forma Condensed Combined Balance Sheet Notes to Unaudited Pro Forma Condensed Combined Statement of Operations ----------------------- * Previously filed with the Company's Current Report on Form 8-K dated November 7, 1996 filed on November 21, 1996. -4- (2) Exhibit Index. The Company hereby amends its Current Report by adding the following information to the Exhibit Index in the Current Report. Exhibit Number Exhibit -------------- ------- 23.1 Consent of Deloitte & Touche, Chartered Accountants and Registered Auditors (Guildsoft Holdings Limited) 23.2 Consent of Deloitte & Touche, Chartered Accountants and Registered Auditors (Guildsoft Limited) 99.1 The following audited financial statements of Guildsoft Holdings Limited, together with the manually signed Auditors' Report of Deloitte & Touche, Chartered Accountants and Registered Auditors: Profit and Loss Account for the year ended September 30, 1996 Balance Sheet dated as of September 30, 1996 Notes to the Accounts for the year ended September 30, 1996 99.2 The following audited financial statements of Guildsoft Limited, together with the manually signed Auditors' Report of Deloitte & Touche, Chartered Accountants and Registered Auditors: Profit and Loss Account for the year ended September 30, 1996 Balance Sheet dated as of September 30, 1996 Notes to the Accounts for the year ended September 30, 1996 99.3 The following unaudited pro forma condensed combined financial statements: Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 1996 Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended September 30,1996 Notes to Unaudited Pro Forma Condensed Combined Balance Sheet Notes to Unaudited Pro Forma Condensed Combined Statement of Operations -5- (3) Filing of Additional Exhibits. The Company hereby amends its Current Report by filing the additional exhibits attached hereto and as listed in (2) above. -6- 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. DATAWATCH CORPORATION By: /s/ Bruce R. Gardner -------------------------------- Bruce R. Gardner Executive Vice President Dated: January 21, 1997 -7- EXHIBIT INDEX Exhibit No. Description ----------- ----------- *2.1 Share Sale and Purchase Agreement, dated November 7, 1996, among Datawatch Corporation and the individuals named on Schedule 1 contained therein, who constitute the holders of all of the outstanding shares of capital stock of Guildsoft Holdings Limited. 23.1 Consent of Deloitte & Touche, Chartered Accountants and Registered Auditors (Guildsoft Holdings Limited) 23.2 Consent of Deloitte & Touche, Chartered Accountants and Registered Auditors (Guildsoft Limited) 99.1 The following audited financial statements of Guildsoft Holdings Limited, together with the manually signed Auditors' Report of Deloitte & Touche, Chartered Accountants and Registered Auditors: Profit and Loss Account for the year ended September 30, 1996 Balance Sheet dated as of September 30, 1996 Notes to the Accounts for the year ended September 30, 1996 99.2 The following audited financial statements of Guildsoft Limited, together with the manually signed Auditors' Report of Deloitte & Touche, Chartered Accountants and Registered Auditors: Profit and Loss Account for the year ended September 30, 1996 Balance Sheet dated as of September 30, 1996 Notes to the Accounts for the year ended September 30, 1996 99.3 The following unaudited pro forma condensed combined financial statements: Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 1996 Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended September 30, 1996 Notes to Unaudited Pro Forma Condensed Combined Balance Sheet Notes to Unaudited Pro Forma Condensed Combined Statement of Operations - ----------------------------- * Previously filed with the Company's Current Report on Form 8-K dated November 7, 1996 filed on November 21, 1996. -8- EX-23.1 2 CONSENT OF DELOITTE & TOUCHE EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement No. 33-65786 of Datawatch Corporation on Form S-8 of our report on Guildsoft Holdings Limited dated 17 December 1996, appearing in this Form 8-K/A Amendment No. 1 to the Form 8-K Current Report dated January 21, 1997. /s/ Deloitte & Touche DELOITTE & TOUCHE January 20, 1997 -9- EX-23.2 3 CONSENT OF DELOITTE & TOUCHE EXHIBIT 23.2 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement No. 33-65786 of Datawatch Corporation on Form S-8 of our report on Guildsoft Limited dated 20 January 1997, appearing in this Form 8-K/A Amendment No. 1 to the Form 8-K Current Report dated January 21, 1997. /s/ Deloitte & Touche DELOITTE & TOUCHE January 20, 1997 -10- EX-99.1 4 FINANCIAL STATEMENTS OF GIULDSOFT HOLDINGS LIMITED EXHIBIT 99.1 Company Registration No. 2887429 GUILDSOFT HOLDINGS LIMITED REPORT AND FINANCIAL STATEMENTS 30 SEPTEMBER 1996 Deloitte & Touche Queen Anne House 69-71 Queen Square Bristol BS1 4JP GUILDSOFT HOLDINGS LIMITED REPORT AND FINANCIAL STATEMENTS 1996 CONTENTS Page Officers and professional advisers 1 Directors' report 2 Statement of directors' responsibilities 3 Auditors' report to the members 4 Profit and loss account 5 Balance sheet 6 Notes to the accounts 7 GUILDSOFT HOLDINGS LIMITED REPORT AND FINANCIAL STATEMENTS 1996 OFFICERS AND PROFESSIONAL ADVISERS DIRECTORS J F Cave S J Cave M A Holman SECRETARY J F Cave REGISTERED OFFICE The Software Centre East Way Lee Mill Industrial Estate Ivybridge Nr Plymouth PL21 9PE BANKERS Barclays Bank Plc 19 Princess Street Plymouth Devon PL1 2HA SOLICITORS Foot and Bowden 70-76 North Hill Plymouth Devon PL4 8HH AUDITORS Deloitte & Touche Queen Anne House 69-71 Queen Square Bristol BS1 4JP 1 GUILDSOFT HOLDINGS LIMITED DIRECTORS' REPORT The directors present their annual report and the audited financial statements for the year ended 30 September 1996. ACTIVITIES The principal activity of the company continues to be the letting of a commercial building. The principal activity of the subsidiary continues to be the import and sale of computer software. DIRECTORS AND THEIR INTERESTS The present membership of the Board is set out on page 1 The directors' beneficial interests in the ordinary shares of the company at 1 October 1995 and at 30 September 1996 were: 1996 1995 J F Cave 1,000 1,000 S J Cave 1,000 1,000 M A Holman 1,000 1,000 AUDITORS A resolution for the reappointment of Deloitte & Touche as auditors of the company is to be proposed at the forthcoming Annual General Meeting. Advantage has been taken in the preparation of this report of the special exemptions applicable to small companies under Part II of Schedule 8 to the Companies Act 1985. Approved by the Board of Directors and signed on behalf of the Board /S/ J F Cave J F Cave Secretary 2 GUILDSOFT HOLDINGS LIMITED STATEMENT OF DIRECTORS' RESPONSIBILITIES Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company as at the end of the financial year and of the profit or loss of the company for that period. In preparing those financial statements, the directors are required to - select suitable accounting policies and then apply them consistently; - make judgements and estimates that are reasonable and prudent; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. 3 DELOITTE & TOUCHE - ---------- ----------------------------------------------------------- CHARTERED ACCOUNTANTS Deloitte & Touche Telephone: National 0117 921 1622 Queen Anne House International +44 117 921 1622 69-71 Queen Square Fax (Gp.3): 0117 929 2801 Bristol BS1 4JP AUDITORS' REPORT TO THE MEMBERS OF GUILDSOFT HOLDINGS LIMITED We have audited the financial statements on pages 5 to 9 which have been prepared under the accounting policies set out on page 7. RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS As described on page 3 the company's directors are responsible for the preparation of financial statements. It is our responsibility to form an independent opinion, based on our audit, on those statements and to report our opinion to you. BASIS OF OPINION We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the company's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. OPINION In our opinion the financial statements give a true and fair view of the state of the company's affairs as at 30 September 1996 and of its profit for the year then ended and have been properly prepared in accordance with the provisions of the Companies Act 1985 applicable to small companies. /s/ Deloitte & Touche 17 December 1996 Chartered Accountants and Registered Auditors - --------------- Aberdeen, Bath, Belfast, Birmingham, Bodmemouth, DELOITTE TOUCHE Bracknell, Bristol, Cambridge, Cardiff, Crawley, TOHMATSTI Dartford, Edinburgh, Glasgow, Leeds, Leicaster, INTERNATIONAL Liverpool, London, Manchester, Milton Keynes, Newcastle - --------------- upon Tyne, Nottingham, St Albans and Southhampton. Pricipal place of business at which a list of partners' names is availible: Stonecutter Court, 1 Stonecutter Street, London EC4A 4TR. Authorized by the Institute of Chartered Accountants in England and Wales to carry on investment business. 4 GUILDSOFT HOLDINGS LIMITED PROFIT AND LOSS ACCOUNT Year ended 30 September 1996
Note 1996 1995 (pound) (pound) TURNOVER: continuing operations 43,666 49,203 Administrative expenses (13,128) (10,722) ------ ------ OPERATING PROFIT: continuing operations 30,538 38,481 Income from fixed asset investments 2 163,275 37,500 Interest payable and similar charges (30,190) (30,697) ------ ------ PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 3 163,623 45,284 Tax on profit on ordinary activities (33,567) (9,411) ------ ------ PROFIT FOR THE FINANCIAL YEAR 130,056 35,873 Dividends paid and proposed 4 (130,620) (30,000) ------- ------- Retained loss/profit for the financial year (564) 5,873 ======= =======
There are no recognised gains or losses in the current and previous year other than those recognised in the profit and loss account and accordingly no statement of recognised gains and losses is required. 5 GUILDSOFT HOLDINGS LIMITED BALANCE SHEET 30 September 1996
Note 1996 1995 (pound) (pound) FIXED ASSETS Tangible assets 5 319,550 322,775 Investments 6 2,998 2,998 ------- ------- 322,548 325,773 ------- ------- CURRENT ASSETS Debtors: Amounts due from subsidiary 115,620 - Cash at bank and in hand 2,353 5,809 ------- ----- 117,973 5,809 ------- ----- CREDITORS: amounts falling due within one year Bank loans 5,200 5,021 Other creditors 192,770 63,246 Amounts due to subsidiary - 15,000 ------- ------ (197,970) (83,267) ------- ------ NET CURRENT LIABILITIES (79,997) (77,458) -------- ------- TOTAL ASSETS LESS CURRENT LIABILITIES 242,551 248,315 CREDITORS: amounts falling due after more than one year 7,8 234,180 239,380 ------- ------- 8,371 8,935 ======= ======= CAPITAL AND RESERVES Called up share capital 9,10 3,000 3,000 Profit and loss account 5,371 5,935 ----- ----- TOTAL EQUITY SHAREHOLDERS' FUNDS 10 8,371 8,935 ===== =====
Advantage has been taken in the preparation of these accounts of the special exemptions available to small companies under Part 1 of schedule 8 to the Companies Act 1985. In the opinion of the directors of the company is entitled to these exemptions on the grounds that it has met the qualifications for a small company specified in sections 246 and 247 of the Companies Act 1985. These financial statements were approved by the Directors on 11 December 1996 Signed on behalf of the Board of Directors /s/ J F Cave J F Cave Director 6 GUILDSOFT HOLDINGS LIMITED NOTES TO THE ACCOUNTS Year ended 30 September 1996 1. ACCOUNTING POLICIES The particular accounting policies adopted are described below. Accounting convention The financial statements are prepared under the historical cost convention. Consolidation The company is exempt from preparing group accounts under section 248 of the Companies Act 1985 as the group qualifies as a small group. Accordingly the financial statements present information about the company not the group. Tangible fixed assets Depreciation is not provided on freehold land. On other assets it is provided on cost in equal annual instalments over the estimated lives of the assets. The rates of depreciation are as follows: Freehold buildings 2% per annum Fixtures and fittings 10% straight line Investments Investments held as fixed assets are stated at cost less provision for permanent diminution in value. Deferred taxation Deferred taxation is provided at the anticipated tax rates on differences arising from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the financial statements to the extent that it is probable that a liability or asset will crystallise in the future. 2. INCOME FROM FIXED ASSET INVESTMENTS
1996 1995 (pound) (pound) Income from unlisted fixed asset investments 163,275 37,500 ======= ======
3. PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION Profit on ordinary activities before taxation is after charging:
1996 1995 (pound) (pound) Depreciation written off tangible fixed assets: Own assets 7,573 7,515 Auditors' remuneration 587 587 ===== =====
4. DIVIDENDS
1996 1995 Per share Total Per share Total (pound) (pound) (pound) (pound) Dividend paid and proposed 43.54 130,620 10 30,000 ===== ======= == ======
7 GUILDSOFT HOLDINGS LIMITED NOTES TO THE ACCOUNTS Year ended 30 September 1996 5. TANGIBLE FIXED ASSETS
Land & Fixtures buildings & fittings Total (pound) (pound) (pound) Cost At 1 October 1995 300,725 35,000 335,725 Additions 4,348 - 4,348 ------- ------ ------- At 30 September 1996 305,073 35,000 340,073 ------- ------ ------- Accumulated depreciation At 1 October 1995 5,950 7,000 12,950 Charge in year 4,073 3,500 7,573 ------ ------ ------ At 30 September 1996 10,023 10,500 20,523 ------ ------ ------ Net book value At 30 September 1996 295,050 24,500 319,550 ======= ====== ======= At 30 September 1995 294,775 28,000 322,775 ======= ====== =======
6. INVESTMENTS The company's investment in the subsidiary undertaking represents the cost of acquisition of 100% of the ordinary share capital of Guildsoft Limited of 3,000 shares of (pound)1 each, a company registered in England and Wales which imports and sells computer software. At 30 September 1996, the aggregate value of share capital and reserves of the subsidiary undertaking was (pound)102,437 and its loss for the year was (pound)148,054. 7. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
1996 1995 (pound) (pound) Bank loans 234,180 239,380 ======= =======
8. BORROWINGS
1996 1995 (pound) (pound) Bank loans 239,380 244,401 ======= ======= Due within one year 5,200 5,021 Due after more than one year 234,180 239,380 ------- ------- 239,380 244,401 ======= =======
8 GUILDSOFT HOLDINGS LIMITED NOTES TO THE ACCOUNTS Year ended 30 September 1996
8. BORROWINGS (continued) 1996 1995 (pound) (pound) Analysis of loan repayments: Bank loans Within one year or on demand 5,200 5,021 Between one and two years 5,200 5,927 Between two and five years 15,600 28,476 After five years 213,380 210,977 ------- ------- 239,380 244,401 ======= ======= Amounts repayable by instalments some of which fall due after five years: Bank loans Total amount 239,380 244,401 Instalments due after five years 213,380 210,977 ======= =======
Bank loans are secured on the freehold land and buildings. 9. SHARE CAPITAL
No (pound) Authorised Ordinary shares of(pound)1 3,000 3,000 ----- ----- Allotted and fully paid Ordinary shares of(pound)1 3,000 3,000 ----- -----
10. COMBINED RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS AND STATEMENT OF MOVEMENTS ON RESERVES
Called Profit up share and loss Total Total capital account 1996 1995 (pound) (pound) (pound) (pound) At the beginning of the year 3,000 5,935 8,935 3,062 Profit attributable to members of the company - 130,056 130,056 35,873 Dividends - (130,620) (130,620) (30,000) ------ ------- ------- ------ At the end of the year 3,000 5,371 8,371 8,935 ====== ======= ======= ======
11. EVENT OCCURRING AFTER THE END OF YEAR The land, building, fixtures and fittings were all sold on 7 November 1996 realising a small profit and the loan secured on the property was discharged at book value. The ordinary shares of the company were acquired on 7 November 1996 by the Datawatch Corporation. 9 EX-99.2 5 FINANCIAL STATEMENTS OF GUILDSOFT LIMITED EXHIBIT 99.2 Company Registration No. 2567531 GUILDSOFT LIMITED Report and Financial Statements 30 September 1996 Deloitte & Touche Queen Anne House 69-71 Queen Square Bristol BS1 4JP GUILDSOFT LIMITED REPORT AND FINANCIAL STATEMENTS 1996 CONTENTS Page Officers and professional advisers 1 Directors' report 2 Statement of directors' responsibilities 3 Auditors' report 4 Profit and loss account 5 Balance sheet 6 Notes to the accounts 7 Additional information 11 GUILDSOFT LIMITED REPORT AND FINANCIAL STATEMENTS 1996 OFFICERS AND PROFESSIONAL ADVISERS DIRECTORS J F Cave S J Cave (resigned 7 November 1996) M A Holman (resigned 7 November 1996) B Gardner (appointed 7 November 1996) SECRETARY J F Cave REGISTERED OFFICE The Software Centre East Way Lee Mill Industrial Estate Ivybridge Nr Plymouth PL21 9PE BANKERS Barclays Bank Plc 19 Princess Street Plymouth Devon PL1 2HA AUDITORS Deloitte & Touche Queen Anne House 69-71 Queen Square Bristol BS1 4JP GUILDSOFT LIMITED DIRECTORS REPORT The directors present their annual report and the audited financial statements for the year ended 30 September 1996. ACTIVITIES The principal activity of the company continues to be the import and sale of computer software. DIRECTORS AND THEIR INTERESTS The present membership of the Board is set out on page 1. The directors held no beneficial interests in the company during the year. Their interest in the ultimate parent company, Guildsoft Holdings Limited, are shown in the financial statements of that company. None of the directors had an interest in any material contract during the year relating to the business of the company. AUDITORS A resolution for the reappointment of Deloitte & Touche as auditors of the company is to be proposed at the forthcoming Annual General Meeting. Advantage has been taken in the preparation of this report of the special exemptions applicable to small companies under Part II of Schedule 8 to the Companies Act 1985. Approved by the Board of Directors and signed on behalf of the Board /s/ J F Cave - ------------ J F Cave Secretary GUILDSOFT LIMITED STATEMENT OF DIRECTORS' RESPONSIBILITIES Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company as at the end of the financial year and of the profit or loss of the company for that period. In preparing those financial statements, the directors are required to __ select suitable accounting policies and then apply them consistently; __ make judgements and estimates that are reasonable and prudent; __ prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. -------------------------------------------------------------- Chartered Accountants Deloitte & Touche Telephone: National 0117 921 1622 Queen Anne House International + 44 117 921 1622 69-71 Queen Square Fax (Gp.3): 0117 929 2801 Bristol BS1 4JP AUDITORS' REPORT TO THE MEMBERS OF GUILDSOFT LIMITED We have audited the financial statements on pages 5 to 10 which have been prepared under the accounting policies set out on page 7. RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS As described on page 3 the company's directors are responsible for the preparation of financial statements. It is our responsibility to form an independent opinion, based on our audit, on those statements and to report our opinion to you. BASIS OF OPINION We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the company's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. OPINION In our opinion the financial statements give a true and fair view of the state of the company's affairs as at 30 September 1996 and of its loss for the year then ended and have been properly prepared in accordance with the provisions of the Companies Act 1985 applicable to small companies. /s/ Deloitte & Touche 20 January 1997 Chartered Accountants and Registered Auditors PROFIT AND LOSS ACCOUNT YEAR ENDED 30 SEPTEMBER 1996 GUILDSOFT LIMITED
Note 1996 1995 (pound) (pound) TURNOVER: continuing operations 2 1,223,948 1,204,523 Cost of sales (633,413) (502,874) -------- -------- Gross profit 590,535 701,649 Distribution costs (47,574) (49,915) Administrative expenses (585,815) (501,870) -------- -------- OPERATING (LOSS)/PROFIT: continuing operations (42,854) 149,864 Interest receivable and similar income 2,456 1,582 Interest payable (21) (11) --------- -------- (LOSS)/PROFIT ON ORDINARY ACTIVITIES 3 (40,419) 151,435 BEFORE TAXATION Tax on (loss)/profit on ordinary activities 4 380 (42,160) -------- -------- (LOSS)/PROFIT FOR THE FINANCIAL YEAR (40,039) 109,275 Dividends paid and proposed 5 (130,620) (30,000) -------- -------- Retained (loss)/profit for the financial year 10 (170,659) 79,275 -------- --------
There are no recognized gains and losses for the current financial year and preceding financial year, other than as stated in the profit and loss account. Accordingly, no statement of total recognized gains and losses has been given. GUILDSOFT LIMITED BALANCE SHEET 30 SEPTEMBER 1996
Note 1996 1995 (pound) (pound) FIXED ASSETS Tangible assets 6 54,631 49,532 -------- -------- CURRENT ASSETS Stocks 142,785 93,317 Debtors 7 327,118 254,584 Cash at bank and in hand 88,672 94,498 -------- -------- 558,575 442,399 -------- -------- CREDITORS: amounts falling due within one year Trade creditors 317,501 127,220 Other creditors including taxation and social security 8 188,080 85,330 Accruals and deferred income 27,793 28,890 -------- -------- (533,374) (241,440) -------- -------- NET CURRENT ASSETS 25,201 200,959 -------- -------- NET ASSETS 79,832 250,491 -------- -------- CAPITAL AND RESERVES Called up share capital 9 3,000 3,000 Profit and loss account 76,832 247,491 -------- -------- TOTAL EQUITY SHAREHOLDERS' FUNDS 10 79,832 250,491 -------- --------
Advantage has been taken in the preparation of these accounts of the special exemptions available to small companies under Part 1 of Schedule 8 to the Companies Act 1985. In the opinion of the directors of the company is entitled to these exemptions on the grounds that it has met the qualifications for a small company specified in sections 246 and 247 of the Companies Act 1985. These financial statements were approved by the Directors on 20 January, 1997. Signed on behalf of the Board of Directors /s/ J F Cave - ------------- J F Cave Director GUILDSOFT LIMITED NOTES TO THE ACCOUNTS Year ended 30 September 1996 1. ACCOUNTING POLICIES The financial statements are prepared in accordance with applicable accounting standards. The particular accounting policies adopted are described below. Accounting convention The financial statements are prepared under the historical cost convention. Tangible fixed assets Depreciation is provided on cost in equal annual installments over the estimated lives of the assets. The rates of depreciation are as follows: Equipment 25% straight line Fixtures and fittings 20% straight line Stocks Stocks are stated at the lower of cost and net realisable value. Cost represents materials, direct labour and appropriate production overheads. Deferred taxation Deferred taxation is provided at the anticipated tax rates on differences arising from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the financial statements to the extent that it is probable that a liability will crystallise in the future. Foreign exchange Transactions denominated in foreign currencies are translated into sterling at the rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the rates ruling at that date. These translation differences are dealt with in the profit and loss account. GUILDSOFT LIMITED NOTES TO THE ACCOUNTS Year ended 30 September 1996 2. TURNOVER Turnover comprises the invoiced value of goods and services supplied by the company to third parties net of value added tax. 3. (LOSS)/PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION (Loss)/profit on ordinary activities before taxation is after charging: 1996 1995 (pound) (pound) Depreciation written off tangible fixed assets: Own assets 27,686 27,176 Directors' remuneration 88,455 74,250 Auditors' remuneration 5,400 4,750 Loss on disposal of fixed assets 788 843 -------- -------- 4. TAX ON (LOSS)/PROFIT ON ORDINARY ACTIVITIES 1996 1995 (pound) (pound) United Kingdom corporation tax at 24.5% (1995 - 25%) (380) 42,160 based on the (loss)/profit for the year -------- --------
5. DIVIDENDS 1996 1995 Per share Total Per share Total (pound) (pound) (pound) (pound) Dividends paid and proposed 43.54 130,620 10 30,000 --------- ------- --------- -------
6. TANGIBLE FIXED ASSETS Fixtures Equipment & fittings Total (pound) (pound) (pound) Cost at 1 October 1995 75,289 30,102 105,391 Additions 33,563 -- 33,563 Disposals (3,622) (1,877) (5,499) --------- --------- --------- at 30 September 1996 105,230 28,225 133,455 --------- --------- --------- Accumulated depreciation at 1 October 1995 44,182 11,677 55,859 Charge in year 22,041 5,645 27,686 Disposals (3,622) (1,099) (4,721) --------- -------- -------- at 30 September 1996 62,601 16,223 78,824 --------- -------- -------- Net book value at 30 September 1996 42,629 12,002 54,631 --------- -------- -------- at 30 September 1995 31,107 18,425 49,532 --------- -------- -------- GUILDSOFT LIMITED NOTES TO THE ACCOUNTS Year ended 30 September 1996 7. DEBTORS 1996 1995 (pound) (pound) Due within one year: Trade debtors 231,856 228,368 Other debtors 12,291 -- Prepayments and accrued income 49,963 11,216 Due from holding company -- 15,000 ACT recoverable 25,155 -- Corporation tax recoverable 7,853 -- -------- -------- 327,118 254,584 -------- -------- 8. OTHER CREDITORS INCLUDING TAXATION AND SOCIAL SECURITY 1996 1995 (pound) (pound) This heading includes: Taxation and social security 33,715 32,968 Corporation tax 32,655 42,187 Directors' current accounts 6,090 10,175 Due to holding company 115,620 -- -------- -------- 188,080 85,330 -------- -------- 9. SHARE CAPITAL 1996 No (pound) Authorised Ordinary shares of(pound)1 each 3,000 3,000 -------- -------- Allotted and fully paid Ordinary shares of(pound)1 each 3,000 3,000 -------- -------- GUILDSOFT LIMITED NOTES TO THE ACCOUNTS Year ended 30 September 1996 10. COMBINED RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS AND STATEMENT OF MOVEMENTS ON RESERVES
Called up share Profit and loss capital account Total 1996 Total 1995(pound) (pound) (pound) (pound) At the beginning of the year 3,000 247,491 250,491 171,216 (Loss)/profit attributable to members - (40,039) (40,039) 109,275 of the company Dividends paid and proposed - (130,620) (130,620) (30,000) ------------ --------- --------- ------------ At the end of the year 3,000 76,832 79,832 250,491 ============ ========= ========= ============
11. OPERATING LEASE COMMITMENTS At 30 September 1996 the company was committed to making the following payments during the next year in respect of operating leases: Land and buildings 1996 1995 (pound) (pound) Leases which expire: Within one year - - Within two to five years - - After five years 27,500 27,500 ------ ------ 27,500 27,500 The land and buildings are leased from Guildsoft Holdings Limited, the ultimate parent company. 12. ULTIMATE PARENT COMPANY The ultimate parent company is Guildsoft Holdings Limited, which is registered in England and Wales. Copies of the financial statements of Guildsoft Holdings Limited can be obtained from Companies House, Cardiff. 13. EVENT OCCURRING AFTER THE END OF YEAR The ordinary shares of the parent company Guildsoft Holdings Limited were acquired on 7 November 1996 by the Datawatch Corporation. GUILDSOFT LIMITED ADDITIONAL INFORMATION The additional information on pages 12 and 13 has been prepared from the accounting records of the company. While it does not form part of the statutory financial statements, it should be read in conjunction with them and the auditors' report thereon. GUILDSOFT LIMITED DETAILED TRADING, PROFIT AND LOSS ACCOUNT Year ended 30 September 1996 1996 1995 (pound) (pound) Turnover 1,012,447 937,415 Less: Cost of sales Opening stock 93,317 70,613 Purchases 682,881 525,578 ------- ------- 776,198 596,191 Less: Closing stock 142,785 93,317 ------- ------ 633,413 502,874 ------- ------- Gross profit 379,034 434,541 Commission income 211,501 267,108 Interest received 2,456 1,582 ------- ------- 592,991 703,231 Less: Overheads Selling and distribution costs 47,574 49,915 Administrative expenses 585,815 501,870 Interest payable 21 11 ------- ------- 633,410 551,796 Net (loss)/profit for the year (40,419) 151,435 ======== ======= GUILDSOFT LIMITED DETAILED TRADING, PROFIT AND LOSS ACCOUNT Year ended 30 September 1996 1996 1995 (pound) (pound) SELLING & DISTRIBUTION COSTS Carriage and packaging costs 47,574 49,915 ------ ------ ADMINISTRATIVE EXPENSES Directors' remuneration 88,455 74,250 Directors' employers NIC 8,988 7,573 Office wages 172,180 160,854 Rent 27,500 27,500 Rates and water 3,163 6,852 Light and heat 3,942 4,962 Insurance 11,903 8,672 Telephone and fax 18,573 11,787 Repairs and renewals 8,138 6,462 Motor, travelling and subsistence 28,683 29,389 Postage and stationery 27,019 22,507 Advertising and marketing expenses 84,917 86,667 Training costs 2,167 3,961 Sundry expenses 7,955 7,030 Accountancy and audit 5,400 4,750 Professional fees 4,469 (28) Bad debts 8,000 2,268 Provision against debtors 22,605 - Keyman insurance 2,795 2,795 Credit card charges 16,720 3,743 Bank charges 3,779 1,837 Depreciation 27,686 27,196 Loss on sale of fixed assets 778 843 -------- -------- 585,815 501,870 EX-99.3 6 UNAUDITED PRO FORMA CONDENSED COMB. FIN. STMTS. EXHIBIT 99.3 DATAWATCH CORPORATION UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET YEAR ENDED SEPTEMBER 30, 1996
COMBINED COMPANY COMPANY AS GUILDSOFT GUILDSOFT GUILDSOFT GUILDSOFT BEFORE PRO FORMA REPORTED HOLDINGS LIMITED ADJUSTMENTS COMBINED ADJUSTMENTS ADJUSTMENTS COMBINED - ------------------------------------------------------------------------------------------------------------------------------------ Cash and equivalents $ 1,696,349 $ 3,682 $ 138,772 $ 142,454 $ 1,838,803 ($75,547) 2 $ 1,763,256 Short-term investments 792,665 4,692 (4,692) 792,665 792,665 Accounts receivable-net 7,767,748 394,380 394,380 8,162,128 (128,808) 1 8,033,320 Due from subsidiary 180,945 (180,945) Inventories 480,758 223,459 223,459 704,217 704,217 Prepaid advertising & other 1,264,798 117,560 117,560 1,382,358 (17,437) 2 1,364,921 ---------------------------------------------------------------------------------------------------- Total current assets 12,002,318 189,319 874,171 (185,637) 877,853 12,880,171 (221,792) 12,658,379 ---------------------------------------------------------------------------------------------------- Property & equipment 3,534,759 532,214 208,857 741,071 4,275,830 4,275,830 Less: accumulated depreciation (1,737,733) (32,119) (123,360) (155,479) (1,893,212) (1,893,212) ---------------------------------------------------------------------------------------------------- Property & equipment, net 1,797,026 500,095 85,497 585,592 2,382,618 2,382,618 ---------------------------------------------------------------------------------------------------- Other assets 400,062 400,062 400,062 Excess if cost over net assets 1,041,165 1,041,165 865,889 2 1,907,054 ---------------------------------------------------------------------------------------------------- Total assets $ 15,240,571 $689,414 $ 959,668 ($185,637) $1,463,445 $16,704,016 $ 644,097 $ 17,348,113 ==================================================================================================== Accounts payable 2,914,952 301,685 496,889 798,574 3,713,526 3,713,526 Accrued expenses 1,063,129 156,896 156,896 1,220,025 (128,808) 1 1,091,217 Due to holding 180,945 (180,945) Deferred revenue 1,946,473 1,946,473 1,946,473 Current portion of long-term debt 867,307 8,138 8,138 875,445 875,445 ---------------------------------------------------------------------------------------------------- Total current liabilities 6,791,861 309,823 834,730 (180,945) 963,608 7,755,469 (128,808) 7,626,661 ---------------------------------------------------------------------------------------------------- Long-term obligations 209,824 366,492 366,492 576,316 576,316 ---------------------------------------------------------------------------------------------------- Common stock 89,659 47 47 (47) 47 89,706 1,203 2 90,909 Additional paid-in capital 18,665,402 4,648 4,648 (4,648) 4,648 18,670,050 900,352 2 19,570,402 Accumulated earnings (deficit) (10,538,117) 10,013 119,747 129,760 (10,408,357) (129,760) 2 (10,538,117) Cumulative translation adjustment 21,942 (1,609) 496 3 (1,110) 20,832 1,110 2 21,942 ---------------------------------------------------------------------------------------------------- Total equity 8,238,886 13,099 124,938 (4,692) 133,345 8,372,231 772,905 9,145,136 ---------------------------------------------------------------------------------------------------- Total liabilities & shareholders equity $15,240,571 $689,414 $959,668 ($185,637) $1,463,445 $ 16,704,016 $ 644,097 $17,348,113 ====================================================================================================
DATAWATCH CORPORATION UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS YEAR ENDED SEPTEMBER 30, 1996
COMBINED COMPANY COMPANY AS GUILDSOFT GUILDSOFT GUILDSOFT GUILDSOFT BEFORE PRO FORMA REPORTED HOLDING LIMITED ADJUSTMENTS COMBINED ADJUSTMENTS ADJUSTMENTS COMBINED - ------------------------------------------------------------------------------------------------------------------------------------ Net sales $30,022,122 $ 326,419 $ 1,930,594 ($ 43,377)$ 2,213,636 $ 32,235,758 ($ 327,984) 1 $31,907,774 Cost of sales 4,516,456 999,114 999,114 5,515,570 5,515,570 Engineering & product development 2,338,724 2,338,724 2,338,724 Selling, general & administrative 22,039,420 20,707 999,076 (43,377) 976,406 23,015,826 (204,286) 1,2 22,811,540 --------------------------------------------------------------------------------------------------- Income (loss) from operations 1,127,522 305,712 (67,596) 238,116 1,365,638 (123,698) 1,241,940 Interest expense (96,184) (47,620) (33) (47,653) (143,837) (143,837) Other income-primarily interest 49,162 3,874 3,874 53,036 53,036 Foreign currency transaction gain (loss) 11,860 11,860 11,860 --------------------------------------------------------------------------------------------------- Net income (loss) before tax 1,092,360 258,092 (63,755) 194,337 1,286,697 (123,698) 1,162,999 Income tax (benefit) provision (33,000) 52,947 (599) 52,348 19,348 19,348 =================================================================================================== Net income (loss) $ 1,125,360 $ 205,145 ($ 63,156) $ 141,989 $ 1,267,349 ($ 123,698) $ 1,143,651 =================================================================================================== Net income (loss) per share $ .13 $ 1.14 $ .14 $ .13 =================================================================================================== Weighted average shares 8,943,862 125,000 9,068,862 9,068,862 ===================================================================================================
DATAWATCH CORPORATION NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET 1. To eliminate accounts receivable and accounts payable between Datawatch and Guildsoft Limited. 2. To record the disbursement of cash and issuance of common stock to Guildsoft Holdings Limited, had the purchase taken place on September 30, 1996. NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS 1. To eliminate commissions and management fee expense and revenue between Datawatch and Guildsoft Limited. 2. To include the amortization, over a period of seven years, of the excess of cost over fair value of net assets of Guildsoft Holdings Limited. -----END PRIVACY-ENHANCED MESSAGE-----