-----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, FvWIU5JLXNoi+MsMTNaBkJsb+E6MzRFvzRg4c4Wi7lxZnhIh7PbGSDrHGN/uCI2K AOBQo7o6DpZEZiZ0pdQKrQ== 0000931763-98-000055.txt : 19980119 0000931763-98-000055.hdr.sgml : 19980119 ACCESSION NUMBER: 0000931763-98-000055 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971031 ITEM INFORMATION: FILED AS OF DATE: 19980116 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: RADIANT SYSTEMS INC CENTRAL INDEX KEY: 0000845818 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 112749765 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-22065 FILM NUMBER: 98508232 BUSINESS ADDRESS: STREET 1: 1000 ALDERMAN DR STREET 2: STE A CITY: ALPHARETTA STATE: GA ZIP: 30202 BUSINESS PHONE: 7707723000 MAIL ADDRESS: STREET 1: 1000 ALDERMAN DRIVE STREET 2: STE A CITY: ALPHARETTA STATE: GA ZIP: 30202 8-K/A 1 CURRENT REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A AMENDMENT NO. 1 TO CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 Date of Report (Date of earliest event reported) October 31, 1997 ------------------------------ Radiant Systems, Inc. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Georgia 0-22065 11-2749765 - ------------------------------------------------------------------------------- (State or other (Commission File Number) (IRS Employer jurisdiction of Identification No.) incorporation) 1000 Alderman Drive, Alpharetta, Georgia 30005 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (770) 772-3000 ----------------------------- Not applicable - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements of Business Acquired: RAPIDFIRE SOFTWARE, INC. AND EQUILEASE FINANCIAL SERVICES, INC. Report of Independent Public Accountants Combined Balance Sheets--December 31, 1996 and September 30, 1997 Combined Statements of Operations for the year ended December 31, 1996 and for the nine months ended September 30, 1997 Combined Statements of Shareholders' Equity (Deficit) for the year ended December 31, 1996 and for the nine months ended September 30, 1997 Combined Statements of Cash Flows for the year ended December 31, 1996 and for the nine months ended September 30, 1997 Notes to Combined Financial Statements (b) Pro Forma Financial Information: Introduction Pro Forma Combined Balance Sheet as of September 30, 1997 Pro Forma Combined Statements of Operations for the year ended December 31, 1996 and the nine month period ended September 30, 1997 (c) Exhibits: 2.1 - Stock Purchase Agreement, dated as of October 23, 1997, by and among Radiant Systems, Inc., Kevin Eldredge, RapidFire Software, Inc. and Equilease Financial Services, Inc. (Incorporated by reference from the Company's Current Report on Form 8-K dated October 31, 1997) 23.1 Consent of Arthur Andersen LLP -2- REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors of RapidFire Software, Inc. and Equilease Financial Services, Inc.: We have audited the accompanying combined balance sheets of RAPIDFIRE SOFTWARE, INC. (an Oregon S Corporation) AND EQUILEASE FINANCIAL SERVICES, INC. (an Oregon S Corporation) as of December 31, 1996 and September 30, 1997 and the related combined statements of income, changes in stockholder's equity (deficit), and cash flows for the year ended December 31, 1996 and the nine months ended September 30, 1997. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of RapidFire Software, Inc. and Equilease Financial Services, Inc. as of December 31, 1996 and September 30, 1997 and the results of their operations and their cash flows for the year ended December 31, 1996 and the nine months ended September 30, 1997 in conformity with generally accepted accounting principles. /s/ Arthur Andersen LLP Atlanta, Georgia November 13, 1997 -3- RAPIDFIRE SOFTWARE, INC. AND EQUILEASE FINANCIAL SERVICES, INC. COMBINED BALANCE SHEETS DECEMBER 31, 1996 AND SEPTEMBER 30, 1997 ASSETS
1996 1997 ---------- ---------- CURRENT ASSETS: Cash $ 208,385 $ 26,473 Accounts receivable, net of allowance for doubtful accounts of $22,000 and $27,500 in 1996 and 1997, respectively 493,984 369,020 Inventory 360,769 428,493 Current portion of net investment in sales-type leases 220,717 207,919 Prepaid expenses and other assets 35,798 86,801 ---------- ---------- Total current assets 1,319,653 1,118,706 NET INVESTMENT IN SALES-TYPE LEASES, LESS CURRENT PORTION 301,589 304,753 PROPERTY AND EQUIPMENT, net of accumulated depreciation of $149,105 and $176,890 in 1996 and 1997, respectively 413,572 500,811 ---------- ---------- $2,034,814 $1,924,270 ========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT) CURRENT LIABILITIES:
Line of credit $ 0 $ 17,644 Accounts payable 413,019 398,244 Accrued liabilities 232,617 319,522 Current portion of long-term debt 227,716 263,418 Customer deposits and deferred revenue 471,585 642,180 ---------- ---------- Total current liabilities 1,344,937 1,641,008 LONG-TERM DEBT, less current portion 457,113 405,922 ---------- ---------- Total liabilities 1,802,050 2,046,930 ---------- ---------- COMMITMENTS STOCKHOLDER'S EQUITY (DEFICIT): Common stock of RapidFire, no par value; 25,000,000 shares authorized, 10,000,000 shares issued and outstanding in 1996 and 1997 31,480 31,480 Common stock of Equilease, no par value; 10,000 shares authorized, 6,000 issued and outstanding in 1996 and 1997 3,970 3,970 Retained earnings (deficit) 197,314 (158,110) ---------- --------- Total stockholder's equity (deficit) 232,764 (122,660) ---------- --------- $2,034,814 $1,924,270 ========== ==========
The accompanying notes are an integral part of these combined balance sheets. -4- RAPIDFIRE SOFTWARE, INC. AND EQUILEASE FINANCIAL SERVICES, INC. COMBINED STATEMENTS OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1996 AND THE NINE MONTHS ENDED SEPTEMBER 30, 1997
1996 1997 ---------- ---------- REVENUES: System sales $7,170,345 $5,905,753 Customer support, maintenance, and other services 1,225,236 1,231,180 ---------- ---------- Total revenues 8,395,581 7,136,933 ---------- ---------- COST OF REVENUES: System sales 3,771,369 2,935,912 Customer support, maintenance, and other services 1,298,119 1,002,405 ---------- ---------- Total cost of revenues 5,069,488 3,938,317 ---------- ---------- GROSS PROFIT 3,326,093 3,198,616 ---------- ---------- OPERATING EXPENSES: Product development 546,512 621,672 Sales and marketing 871,023 713,395 Depreciation and amortization 76,767 55,185 General and administrative 1,434,515 1,950,077 ---------- ---------- Total operating expenses 2,928,817 3,340,329 ---------- ---------- INCOME (LOSS) FROM OPERATIONS 397,276 (141,713) INTEREST EXPENSE (INCOME), net 10,510 (13,183) OTHER INCOME (94,625) (81,454) ---------- ---------- NET INCOME (LOSS) $ 481,391 $ (47,076) ========== ==========
The accompanying notes are an integral part of these combined statements. -5- RAPIDFIRE SOFTWARE, INC. AND EQUILEASE FINANCIAL SERVICES, INC. COMBINED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY (DEFICIT) FOR THE YEAR ENDED DECEMBER 31, 1996 AND THE NINE MONTHS ENDED SEPTEMBER 30, 1997
RapidFire Equilease Common Stock Common Stock Retained ------------------- -------------- Earnings Shares Amount Shares Amount (Deficit) Total ---------- ------- ------ ------ ---------- --------- BALANCE, December 31, 1995 10,000,000 $31,480 6,000 $3,970 $ 41,090 $ 76,540 Distribution to stockholder 0 0 0 0 (325,167) (325,167) Net income 0 0 0 0 481,391 481,391 ---------- ------- ----- ------ --------- --------- BALANCE, December 31, 1996 10,000,000 31,480 6,000 3,970 197,314 232,764 Distribution to stockholder 0 0 0 0 (308,348) (308,348) Net loss 0 0 0 0 (47,076) (47,076) ---------- ------- ----- ------ --------- --------- BALANCE, September 30, 1997 10,000,000 $31,480 6,000 $3,970 $(158,110) $(122,660) ========== ======= ===== ====== ========= =========
The accompanying notes are an integral part of these combined statements. -6- RAPIDFIRE SOFTWARE, INC. AND EQUILEASE FINANCIAL SERVICES, INC. COMBINED STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1996 AND THE NINE MONTHS ENDED SEPTEMBER 30, 1997
1996 1997 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 481,391 $ (47,076) Adjustments to reconcile net income (loss) to net cash flows from operating activities: Depreciation and amortization 76,767 55,185 Changes in operating assets and liabilities: Accounts receivable (155,911) 124,964 Inventory (24,370) (67,724) Prepaid expenses and other assets (17,378) (51,003) Accounts payable 11,630 (14,775) Accrued liabilities 110,227 86,905 Customer deposits and deferred revenue 119,939 170,595 --------- --------- Net cash provided by operating activities 602,295 257,071 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (120,430) (142,424) Net (increase) decrease in investment in sales-type leases (40,380) 9,634 --------- --------- Net cash used in investing activities (160,810) (132,790) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Payments on long-term debt (281,589) (436,996) Borrowings of long-term debt 320,133 421,507 Payments on line of credit (48,000) 0 Borrowings on line of credit 0 17,644 Distributions to stockholder (325,167) (308,348) --------- --------- Net cash used in financing activities (334,623) (306,193) --------- --------- NET INCREASE (DECREASE) IN CASH 106,862 (181,912) CASH, BEGINNING OF PERIOD 101,523 208,385 --------- --------- CASH, END OF PERIOD $ 208,385 $ 26,473 ========= ========= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid $ 109,749 $ 74,061 ========= ========= The accompanying notes are an integral part of these combined statements.
-7- RAPIDFIRE SOFTWARE, INC. AND EQUILEASE FINANCIAL SERVICES, INC. NOTES TO COMBINED FINANCIAL STATEMENTS DECEMBER 31, 1996 AND SEPTEMBER 30, 1997 1. ORGANIZATION AND BACKGROUND The accompanying combined financial statements include the accounts and operations of the following entities under common ownership and control of Mr. Kevin Eldredge (the "Stockholder"): RAPIDFIRE SOFTWARE, INC. ("RAPIDFIRE")--was incorporated as an Oregon S corporation in February 1993. RapidFire is principally engaged in designing, marketing, and installing point-of-sale computer hardware and software applications, primarily serving customers in the pizza restaurant industry. EQUILEASE FINANCIAL SERVICES, INC. ("EQUILEASE")--was incorporated as an Oregon S corporation in March 1993. Equilease is principally engaged in purchasing equipment from RapidFire and providing lease financing to certain RapidFire customers. RapidFire and Equilease are collectively referred to as the "Company." All significant intercompany amounts have been eliminated. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRESENTATION The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. INVENTORIES Inventories consist principally of computer component parts and are stated at the lower of cost (first-in, first-out method) or market. -8- PROPERTY AND EQUIPMENT Property and equipment are stated at cost and are depreciated and amortized using the straight-line method over the estimated useful lives of five to ten years. Property and equipment at December 31, 1996 and September 30, 1997 consist of the following:
1996 1997 -------- -------- Computers and office equipment $330,439 $369,922 Furniture and fixture 69,116 208,327 Purchased software 163,122 99,452 -------- -------- 562,677 677,701 Less accumulated depreciation and amortization (149,105) (176,890) -------- -------- $413,572 $500,811 ======== ========
PRODUCT DEVELOPMENT AND SOFTWARE DEVELOPMENT COSTS Product development costs consist principally of compensation and benefits paid to the Company's employees. All research and development costs are expensed as incurred. The Company's policy is to capitalize software development costs upon establishing technological feasibility, subject to a periodic assessment of recoverability based on expected future revenues. Costs subsequent to achieving technological feasibility are not significant. Accordingly, the Company has not capitalized any software development costs in the accompanying financial statements. INCOME TAXES The Stockholder has elected for both RapidFire and Equilease to be treated as S corporations for federal and state income tax purposes. Accordingly, there is no provision for income taxes, as income taxes of RapidFire and Equilease are the responsibility of the Stockholder. REVENUE RECOGNITION The Company's revenue is generated primarily through system sales, support and maintenance, and installation and training, as follows: . SOFTWARE AND SYSTEM SALES. The Company sells its products, which include both hardware and software licenses, directly to end users. Revenue from software licenses and system sales is generally recognized as products are shipped, provided that no significant vendor and postcontract support obligations remain, and the collection of the related receivable is probable. . SUPPORT AND MAINTENANCE. The Company offers to its customers postcontract support in the form of maintenance, telephone support, and unspecified -9- software enhancements. Revenue from support and maintenance is generally recognized as the service is performed. . INSTALLATION and TRAINING. The Company offers installation and training services to its customers. Revenues from installation and training are generally recognized at the time the service is performed. Payments received in advance are recorded as customer deposits and deferred revenue in the accompanying balance sheets and are recognized as revenue when the related product is shipped or related revenue is earned. FAIR VALUE OF FINANCIAL INSTRUMENTS The book values of cash, trade accounts receivable, trade accounts payable, and other financial instruments approximate their fair values principally because of the short-term maturities of these instruments. The fair value of the Company's long-term debt is estimated based on the current rates offered to the Company for debt of similar terms and maturities. Under this method, the Company's fair value of long-term debt was not significantly different than the stated value at December 31, 1996 and September 30, 1997. STATEMENT OF CASH FLOWS The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash. CONCENTRATION OF CREDIT RISK Cash is maintained in demand deposit bank accounts, in which balances sometimes exceed Federal Deposit Insurance Corporation limits. Financial instruments which potentially subject the Company to credit risk consist principally of cash and accounts receivable and amounts due under sales-type leases. The Company's trade accounts receivable and amounts due under sales-type leases are mainly with customers in the pizza restaurant industry, dispersed across a wide geographic area, primarily in the United States. The Company extends credit to customers in the ordinary course of business and periodically reviews the credit levels extended to customers. 3. NET INVESTMENT IN SALES-TYPE LEASES The Company leases point-of-sale computer hardware and software applications to customers. These leases are classified as sales-type leases and extend over a period of 36 to 48 months. The net investment in sales-type leases as of December 31, 1996 and September 30, 1997 is as follows: -10-
1996 1997 ---------- ---------- Total minimum lease payments to be received $ 639,187 $ 682,398 Less unearned income (97,881) (150,726) Less allowance for doubtful accounts (19,000) (19,000) --------- --------- Net investment in sales-type leases 522,306 512,672 Less current portion (220,717) (207,919) --------- --------- $ 301,589 $ 304,753 ========= =========
Future minimum lease payments to be received as of September 30, 1997 are as follows:
Year ended September 30: 1998 $207,919 1999 151,131 2000 117,022 2001 36,070 2002 530 -------- $512,672 ========
4. COMMITMENTS OPERATING LEASES The Company leases office space and a phone system under operating leases expiring through February 2002. Rent expense for the year ended 1996 and the nine-months ended September 30, 1997 totaled $125,530 and $180,989, respectively. Approximate future minimum rental commitments for these leases are as follows:
Year ended September 30: 1998 $184,704 1999 184,704 2000 184,704 2001 184,704 2002 79,207
BENEFIT PLAN The Company has established a defined contribution profit-sharing plan. The plan is qualified under Section 401 of the Internal Revenue Code. An employee is eligible to participate in the plan upon completing three months of service. Voluntary contributions by a participant are allowed but shall not exceed 15% of the employee's compensation. RapidFire, at its discretion, makes a contribution to the plan on an annual basis. During 1996 and the nine months ended September 30, 1997, RapidFire made contributions of $14,386 and $0, respectively. -11- 5. LONG-TERM DEBT Long-term debt consists of the following:
1996 1997 Note Payable to Silicon Valley Bank ("SVB"); interest at the prime rate plus 1.5% (10% at September 30, 1997); due in monthly installments of $5,556, including interest; maturing January 2000; secured by accounts receivable, inventory, and fixed assets; guaranteed by the Stockholder $ 0 $163,702 Note Payable to SVB; interest at the prime rate plus 1.5% (10% at September 30, 1997); due in monthly installments of $3,749, including interest; maturing July 2000; secured by accounts receivable, inventory, and fixed assets; guaranteed by the Stockholder 0 98,691 Note payable to Key Bank, interest at the prime rate plus 1.5%, paid in full in February 1997 190,823 0 Notes payable; unsecured; payable in monthly installments of $23,556, including interest between 12% and 19%; maturing from October 1997 to September 2001; guaranteed by the Stockholder 494,006 406,947 -------- -------- Total 684,829 669,340 Less current portion (227,716) (263,418) -------- -------- $457,113 $405,922 ======== ========
In February 1997, RapidFire signed a loan and security agreement (the "Agreement") with SVB to make one or more loans to RapidFire. Under the Agreement, RapidFire can borrow up to $500,000 under an accounts receivable line of credit not to exceed 75% of eligible accounts receivable. The accounts receivable line of credit bears interest at prime plus 1% (9.5% at September 30, 1997) and matures January 31, 1998. At September 30, 1997, $17,644 was outstanding and $482,356 was available under the facility. The Agreement requires the maintenance of certain financial ratios, as defined. Subsequent to September 30, 1997 the Agreement was amended to delete the requirement for the Company to comply with certain financial ratios. Maturities of long-term debt for the year ending September 30 are as follows: 1998 $263,418 1999 219,157 2000 157,575 2001 29,190 -------- $669,340 ========
-12- 6. STOCKHOLDER'S EQUITY (DEFICIT) STOCK SPLIT The directors of the Company declared a 250:1 stock split on RapidFire's common stock in June 1997. The shares outstanding and all other references to shares of common stock reported have been restated to give effect to the stock split. STOCK OPTIONS In July 1997, the Company adopted the 1997 Stock Option Plan (as amended the "Plan"), under which 1,000,000 shares of common stock are authorized and reserved for use in the Plan. The Plan allows the issuance of incentive stock options and nonqualified stock options. The exercise price of nonqualified stock options is determined by the Company's board of directors, but incentive stock options must be granted at an exercise price equal to the fair market value of the Company's common stock as of the grant date. Options generally become exercisable over four years and expire ten years from the date of grant. At September 30, 1997, options to purchase 600,000 shares of common stock were available for future grant under the Plan, and 400,000 options were outstanding at an exercise price of $.38 per share. No shares were exercised or canceled during 1997. The Company has elected to account for its stock-based compensation plan under Accounting Principles Board ("APB") Opinion No. 25; however, the Company has computed for pro forma disclosure purposes the value of all options granted during 1997 using the minimum value option pricing model as prescribed by Financial Accounting Standards Board ("SFAS") No. 123 and using a risk free interest rate of 6%, an expected dividend yield of 0% and an expected life of four years. The total values of the options granted during the nine months ended September 30, 1997 were computed as approximately $32,000, which would be amortized over the vesting period of the options. If the Company had accounted for the plan in accordance with SFAS No. 123, net loss would have increased by approximately $2,000 for the nine months ended September 30, 1997. 7. SUBSEQUENT EVENT On October 31, 1997, Radiant Systems, Inc. ("Radiant") purchased all of the outstanding common stock of RapidFire for 102,230 shares of Radiant common stock, $4.2 million in cash, and a $6 million non-interest bearing note. -13- UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION The accompanying unaudited pro forma condensed combined balance sheet as of September 30, 1997, gives effect to the RapidFire and Equilease (collectively "RapidFire") acquisitions as if they had occurred on that date. The accompanying unaudited pro forma combined statements of operations for the year ended December 31, 1996 and the nine months ended September 30, 1997 have been prepared to reflect adjustments to the Company's historical results of operations to give effect to the acquisitions of PrsymTech, ReMACS and RapidFire as if they had occurred at the beginning of the respective periods. The pro forma adjustments are based upon available information and certain assumptions that management believes to be reasonable. Final purchase adjustments may differ from the pro forma adjustments herein. The accompanying pro forma statements are not necessarily indicative of the results of operations which would have been attained had the acquisitions been consummated on the dates indicated or which may be attained in the future. These pro forma statements should be read in conjunction with the historical combined financial statements of the Company and related notes thereto. -14- UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEETS AS OF SEPTEMBER 30, 1997
ASSETS PRO FORMA PRO FORMA RADIANT(A) RAPIDFIRE(B) ADJUSTMENTS CONSOLIDATED ------------ ------------ ----------- ------------ Current assets Cash and cash equivalents....................................... $54,542,949 $ 26,473 $(4,180,000)(2) $50,389,422 Accounts receivable, net of allowance for doubtful accounts..... 16,762,304 369,020 - 17,131,324 Inventories..................................................... 5,997,156 428,493 - 6,425,649 Loans to shareholders........................................... 340,632 - - 340,632 Current portion of net investment in sales-type leases.......... - 207,919 - 207,919 Other short-term assets......................................... 580,315 86,801 - 667,116 ----------- ---------- ----------- ----------- Total current assets........................................ 78,223,356 1,118,706 (4,180,000) 75,162,062 Property and equipment, net....................................... 3,500,201 500,811 - 4,001,012 Software development costs, net................................... 1,356,072 - - 1,356,072 Intangibles, net.................................................. 4,395,258 - 9,783,845 (1) 14,179,103 (6,750,853)(1) (6,750,853) - - Net investment in sales type leases, less current portion......... - 304,753 - 304,753 Deferred income tax assets........................................ 397,180 - - 397,180 Other assets...................................................... 856,568 - - 856,568 ----------- ---------- ----------- ----------- $88,728,635 $1,924,270 $(1,147,008) $89,505,897 =========== ========== =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) Current liabilities Accounts payable and accrued liabilities........................ $10,460,725 $ 735,410 $ 430,000 (2) $11,626,135 Customer deposits and unearned revenue.......................... 4,948,248 642,180 (150,000)(1) 5,440,428 Current portion of shareholder loans............................ - - - - Current portion of long term debt............................... 602,365 263,418 - 865,783 ----------- ---------- ----------- ----------- Total current liabilities................................... 16,011,338 1,641,008 280,000 17,932,346 Long term debt, less current portion.............................. 91,176 405,922 4,061,036 (2) 4,558,134 ----------- ---------- ----------- ----------- Total liabilities........................................... 16,102,514 2,046,930 4,341,036 22,490,480 ----------- ---------- ----------- ----------- Shareholders' equity (deficit).................................... 72,626,121 (122,660) - 72,503,461 - 1,140,149 (2) 1,140,149 122,660 (3) 122,660 (6,750,853)(3) (6,750,853) - - - ----------- ---------- ----------- ----------- $88,728,635 $1,924,270 $(1,147,008) $89,505,897 =========== ========== =========== ===========
NOTES TO UNAUDITED PRO FORMA COMBINED BALANCE SHEET--RAPIDFIRE (1) Reflects adjustments to record the fair market value of the identifiable assets acquired plus the resulting goodwill related to the excess purchase price over the fair value of net assets acquired. The value associated with the purchase research and development costs is written-off immediately (in thousands). Total consideration and transaction costs........ $ 9,811 Fair value of net assets purchased............... (27) --------- Excess of purchase price over fair value of net liabilities assumed..................... 9,784 Value associated with purchased research and development costs.......................... 6,751 --------- Adjustments to goodwill.......................... $ 3,033 =========
Reflects deferred maintenance revenue of $345,000 at its cost (the cost to service remaining commitment) of $195,000. Remaining amounts in customer deposits and unearned revenue primarily relate to deposits and other payments received in advance for products under development. (2) Reflects (i) issuance of 102,230 shares of Common Stock with an estimated fair value of approximately $1.1 million as of the acquisition date of October 31,1997, adjusted to reflect a discount from market value to account for restrictions common to large holdings of unregistered securities, (ii) issuance of $4.1 million in a non interest bearing note, net of imputed interest of $1.9 million at an interest rate of 6.0%, (iii) issuance of $4.2 million in cash, (iv) involuntary termination benefits and termination costs of $225,000 and (v) transaction related expenses of $200,000. (3) Reflects the elimination of RapidFire and Equilease shareholder deficit of $123,000 and the immediate write-off of purchased research and development costs of $6.8 million. -15- UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
ReMACS Pro Forma Radiant (A) ReMACS (B) Adjustments RapidFire (C) ------------ ------------ ----------- ------------- REVENUES: Systems sales....................................................... $ 42,739,895 $ 959,275 - $5,905,753 Customer support, maintenance and other services.................... 7,770,063 892,848 - 1,231,180 ------------ ------------ ----------- ---------- Total revenues.................................................. 50,509,958 1,852,123 - 7,136,933 COST OF REVENUES: Systems sales....................................................... 22,290,929 89,018 - 2,935,912 Customer support, maintenance and other services.................... 6,938,546 587,288 - 1,002,405 ------------ ------------ ----------- ---------- Total cost of revenues.......................................... 29,229,475 676,306 - 3,938,317 GROSS PROFIT.......................................................... 21,280,483 1,175,817 - 3,198,616 OPERATING EXPENSES: Product development................................................. 4,603,373 609,448 621,672 Purchased research and development costs............................ 19,134,360 - (15,450,282)(10) - 15,450,282 (9) Sales and marketing................................................. 3,567,033 595,560 - 713,395 Depreciation and amortization....................................... 1,565,622 187,575 175,155 (8) 55,185 General and administrative.......................................... 7,232,757 709,791 - 1,950,077 ------------ ------------ ----------- ---------- Total operating expenses........................................ 36,103,145 2,102,374 175,155 3,340,329 INCOME (LOSS) FROM OPERATIONS......................................... (14,822,662) (926,557) (175,155) (141,713) Interest (income) expense, net........................................ (410,598) 2,487 109,349 (7) (13,183) Other income.......................................................... - - - (81,454) ------------ ------------ ----------- ---------- INCOME (LOSS) BEFORE PROVISION (BENEFIT) FOR INCOME TAXES............. (14,412,064) (929,044) (284,504) (47,076) Pro forma income tax benefit.......................................... 1,531,907 - - Income tax provision.................................................. (211,750) - 211,750 (11) - ------------ ------------ ----------- ---------- PRO FORMA INCOME (LOSS) BEFORE EXTRAORDINARY ITEM..................... (15,732,221) (929,044) (496,254) (47,076) EXTRAORDINARY ITEM: Loss from early extinguishment of debt, net of income tax of $82...... 131,370 - - - ------------ ------------ ----------- ---------- PRO FORMA NET INCOME (LOSS)........................................... $(15,863,591) $ (929,044) $ (496,254) $ (47,076) ============ ============ =========== ========== EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE: Income (loss) before extraordinary item............................. $ (1.05) Extraordinary loss on early extinguishment of debt.................. (0.01) ------------ PRO FORMA NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE..................................................... $ (1.06) ============ WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING................................................... 14,907,116 ============
RapidFire Pro Forma Pro Forma Adjustments Consolidated ----------- ------------ REVENUES: Systems sales....................................................... - $ 49,604,923 Customer support, maintenance and other services.................... - 9,894,091 ----------- ------------ Total revenues.................................................. - 59,499,014 COST OF REVENUES: Systems sales....................................................... - 25,315,859 Customer support, maintenance and other services.................... - 8,528,239 ----------- ------------ Total cost of revenues.......................................... - 33,844,098 GROSS PROFIT.......................................................... - 25,654,916 OPERATING EXPENSES: Product development................................................. - 5,834,493 Purchased research and development costs............................ (6,750,853)(16) 19,134,360 6,750,853 (15) Sales and marketing................................................. - 4,875,988 Depreciation and amortization....................................... 324,963 (14) 2,308,500 General and administrative.......................................... - 9,892,625 ----------- ------------ Total operating expenses........................................ 324,963 42,045,966 INCOME (LOSS) FROM OPERATIONS......................................... (324,963) (16,391,050) Interest (income) expense, net........................................ 152,289 (13) (159,656) Other income.......................................................... - (81,454) ----------- ------------ INCOME (LOSS) BEFORE PROVISION (BENEFIT) FOR INCOME TAXES............. (477,252) (16,149,940) Pro forma income tax benefit.......................................... - 1,531,907 Income tax provision.................................................. - - ----------- ------------ PRO FORMA INCOME (LOSS) BEFORE EXTRAORDINARY ITEM..................... (477,252) (17,681,847) EXTRAORDINARY ITEM: Loss from early extinguishment of debt, net of income tax of $82...... - 131,370 ----------- ------------ PRO FORMA NET INCOME (LOSS)........................................... $ (477,252) $(17,813,217) =========== ============ EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE: Income (loss) before extraordinary item............................. $ 1.15 Extraordinary loss on early extinguishment of debt.................. (0.01) ------------ PRO FORMA NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE..................................................... $ (1.16) ============ WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING................................................... 15,323,096 (12)(17) ============
(A) Derived from the September 30, 1997 unaudited financial statements of the Company previously filed on Form 10-Q with the Securities and Exchange Commission. (B) Derived from the April 30, 1997 unaudited financial statements of ReMACS previously filed on Form 8-K/A with the Securities and Exchange Commission. (C) Derived from the September 30, 1997 financial statements of RapidFire and Equilease appearing elsewhere in this document. -16- UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996
PRYSMTECH REMACS PRO FORMA PRO FORMA RADIANT(A) ADJUSTMENTS REMACS(B) ADJUSTMENTS ----------- ----------- ----------- ------------ REVENUES: Systems sales $35,888,342 $ 3,032,431 Customer support, maintenance and other services 5,054,979 2,615,307 ----------- ----------- ----------- ------------ Total revenues 40,943,321 - 5,647,738 - COST OF REVENUES: System sales 22,270,161 638,264 Customer support, maintenance and other services 5,464,533 1,407,517 ----------- ----------- ----------- ------------ Total cost of revenues 27,734,694 - 2,045,781 - GROSS PROFIT 13,208,627 - 3,601,957 - OPERATING EXPENSES: Product development 3,327,630 2,057,998 Purchased research and development costs 3,930,000 (3,900,000)(4) - (15,450,282)(10) 15,450,282 (9) Sales and marketing 1,487,087 1,196,403 Depreciation and amortization 948,385 173,800 (2) 392,228 442,496 (8) General and administrative 5,664,246 2,323,180 ----------- ----------- ----------- ------------ Total operating expenses 15,357,348 (3,726,200) 5,969,809 442,496 ----------- ----------- ----------- ------------ INCOME (LOSS) FROM OPERATIONS (2,148,721) 3,726,200 (2,367,852) (442,496) Interest expense, net 711,848 267,750 (1) (19,127) 276,250 (7) Minority interest in earnings of PrysmTech 628,137 (628,137)(3) - ----------- ----------- ----------- ------------ INCOME (LOSS) BEFORE PROVISION (BENEFIT) FOR INCOME TAXES (3,488,706) 4,086,587 (2,348,725) (718,746) Pro forma income tax benefit (1,333,142) 1,566,278 (5) - (233,136)(11) ----------- ----------- ----------- ------------ PRO FORMA NET INCOME (LOSS) $(2,155,564) $ 2,520,309 $(2,348,725) $ (485,610) =========== =========== =========== ============ PRO FORMA NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE $ (0.19) =========== WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 11,099,532 ===========
RAPIDFIRE PRO FORMA PRO FORMA RAPIDFIRE(C) ADJUSTMENTS CONSOLIDATED ---------- ----------- ------------ REVENUES: Systems sales 7,170,345 $ 46,091,118 Customer support, maintenance and other services 1,225,236 8,895,522 ---------- ----------- ------------ Total revenues 8,395,581 - 54,986,640 COST OF REVENUES: System sales 3,771,369 26,679,794 Customer support, maintenance and other services 1,298,119 8,170,169 ---------- ----------- ------------ Total cost of revenues 5,069,488 - 34,849,963 GROSS PROFIT 3,326,093 - 20,136,677 OPERATING EXPENSES: Product development 546,512 5,932,140 Purchased research and development costs - 30,000 - (6,750,853)(16) (22,201,135) - 6,750,853 (15) 22,201,135 - - Sales and marketing 871,023 3,554,513 Depreciation and amortization 76,767 433,285 (14) 2,466,961 General and administrative 1,434,515 9,421,941 ---------- ----------- ------------ Total operating expenses 2,928,817 433,285 21,405,555 INCOME (LOSS) FROM OPERATIONS 397,276 (433,285) (1,268,878) Interest expense, net 10,510 203,052 (13) 1,450,283 Minority interest in earnings of PrysmTech (94,625) (94,625) ---------- ----------- ------------ INCOME (LOSS) BEFORE PROVISION (BENEFIT)FOR INCOME TAXES 481,391 (636,337) (2,624,536) Pro forma income tax benefit - - - ---------- ----------- ------------ PRO FORMA NET INCOME (LOSS) $ 481,391 $ (636,337) $ (2,624,536) ========== =========== ============ PRO FORMA NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE $ (0.22) ============ WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 11,829,262 (6)(12)(17) ============
(A) Derived from the December 31, 1996 financial statements of the Company previously filed on Form 10-K with the Securities and Exchange Commission. (B) Derived from the October 31, 1996 financial statements of ReMACS as previously filed on Form 8-K with the Securities and Exchange Commission. (C) Derived from the December 31, 1996 financial statements of RapidFire and Equilease appearing elsewhere in this document. -17- NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS--PRYSMTECH LLC (1) Reflects interest expense on the $3.15 million in notes at an annual rate of 8.5% (2) Reflects additional amortization of goodwill of $869,000 over 5 years. (3) Reflects elimination of minority interest in earnings of PrysmTech. (4) Reflects elimination from the pro forma information of one-time, non- recurring charges for purchased research and development costs of $3.9 million. (5) Reflects provision for income taxes for the tax effect of the pro forma adjustments. (6) Weighted average common shares outstanding assumes that the 300,000 shares of Common Stock issued occurred January 1, 1996. In addition, the weighted average common shares outstanding include the dilutive effect of options to purchase 275,000 shares of Common Stock granted to certain employees of PrysmTech below the initial public offering price. NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS--REMACS (7) Reflects interest expense on the $3.25 million in notes at an annual rate of 8.5% (8) Reflects additional amortization of goodwill of $3.1 million over 7 years. (9) Reflects charge of $15.5 million related to the write-off of purchased research and development costs. The allocation to purchased research and development costs represents the estimated fair value related to incomplete projects, determined by an independent appraisal. The development of these projects had not yet reached technology feasibility and the technology has no alternative future use. The technology acquired in the acquisition will require substantial additional development by the Company. (10) Reflects elimination from the pro forma information of one-time, non- recurring charges for purchased research and development costs of $15.5 million which will be recorded by the Company when the acquisition is consummated. (11) Reflects adjustment to provision (benefit) for income taxes, to eliminate any pro forma income tax benefit related to the combined pro forma loss due to the uncertainty regarding realization of deferred tax assets created by the loss. (12) Weighted average common shares outstanding assumes that the 627,500 shares of Common Stock issued occurred at the beginning of the respective periods. NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS--RAPIDFIRE (13) Reflects imputed interest expense on the $6.0 million in notes at an annual rate of 6.0% (14) Reflects additional amortization of goodwill of $3.1 million over 7 years. (15) Reflects charge of $6.8 million related to the write-off of purchased research and development costs. The allocation to purchased research and development costs represents the estimated fair value related to incomplete projects, determined by an independent appraisal. The development of these projects had not yet reached technology feasibility and the technology has no alternative future use. The technology acquired in the acquisition will require substantial additional development by the Company. (16) Reflects elimination from the pro forma information of one-time, non- recurring charges for purchased research and development costs of million which will be recorded by the Company when the acquisition is consummated. (17) Weighted average common shares outstanding assumes that the 102,230 shares of Common Stock issued occurred at the beginning of the respective periods. -18- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. RADIANT SYSTEMS, INC. By /s/ John H. Heyman -------------------------------------- JOHN H. HEYMAN Executive Vice President and Chief Financial Officer Dated: January 14, 1998 -19- EX-23.1 2 CONSENT OF ARTHUR ANDERSEN LLP EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report included in this Form 8-K/A, into the Company's previously filed Registration Statements File Nos. 333-23237, 333-41291 and 333- 41327 on Form 8K. /s/ Arthur Andersen LLP Atlanta, Georgia January 12, 1998 -----END PRIVACY-ENHANCED MESSAGE-----