-----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, S+9oC3kz/utivOjsNYOZTYiOhH/fh+TknxbiXjp/alNVCxC6UeC53WeAtuh/iB3i lCDhFz63+LDsXegTMnyDww== 0000950109-97-004773.txt : 19970630 0000950109-97-004773.hdr.sgml : 19970630 ACCESSION NUMBER: 0000950109-97-004773 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970523 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970627 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: 1934 Act SEC FILE NUMBER: 000-22065 FILM NUMBER: 97631968 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 DATE OF REPORT: MAY 23, 1997 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 May 23, 1997 Date of Report (Date of earliest event reported)________________________________ 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 30202 ________________________________________________________________________________ (Address of principal executive offices) (Zip Code) (770) 772-3000 Registrant's telephone number, including area code _____________________________ Not applicable ________________________________________________________________________________ (Former name or former address, if changed since last report) ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements of Business Acquired: RESTAURANT MANAGEMENT AND CONTROL SYSTEMS, INC. Report of Independent Public Accountants Balance Sheets--October 31, 1995 and 1996 and April 30, 1997 (unaudited) Statements of Operations for the years ended October 31, 1995 and 1996 and for the six months ended April 30, 1996 and 1997 (unaudited) Statements of Shareholders' Deficit for the years ended October 31, 1995 and 1996 and for the six months ended April 30, 1997 (unaudited) Statements of Cash Flows for the years ended October 31, 1995 and 1996 and for the six months ended April 30, 1996 and 1997 (unaudited) Notes to Financial Statements (b) Pro Forma Financial Information: Introduction Pro Forma Combined Balance Sheet as of March 31, 1997 (unaudited) Pro Forma Combined Statements of Operations for the year ended December 31, 1996 and the three month period ended March 31, 1997 (unaudited) (c) Exhibits: 2.1 Agreement and Plan of Merger, dated as of May 15, 1997, by and among Radiant Systems, Inc., ReMACS Acquisition Corporation, Restaurant Management and Control Systems, Inc., and each of the Shareholders of Restaurant Management and Control Systems, Inc. (incorporated by reference from the Company's Current Report on Form 8-K dated May 23, 1997) 23.1 Consent of Arthur Andersen LLP REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To Restaurant Management and Controls Systems, Inc.: We have audited the accompanying balance sheets of RESTAURANT MANAGEMENT AND CONTROL SYSTEMS, INC. (a California corporation) as of October 31, 1995 and 1996 and the related statements of operations, shareholders' deficit, and cash flows for each of the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our 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 Restaurant Management and Control Systems, Inc. as of October 31, 1995 and 1996 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. /s/ Arthur Andersen LLP Atlanta, Georgia June 20, 1997 F-1 RESTAURANT MANAGEMENT AND CONTROL SYSTEMS, INC. BALANCE SHEETS
OCTOBER 31, ------------------------ APRIL 30, 1995 1996 1997 ----------- ----------- ----------- (UNAUDITED) ASSETS CURRENT ASSETS: Cash and cash equivalents............. $ 819,329 $ 1,192,288 $ 391,404 Accounts receivable, net of allowances for doubtful accounts of $112,500, $125,000, and $125,000 in 1995, 1996, and 1997, respectively............... 1,080,140 1,172,632 864,735 Inventories........................... 61,045 222,714 172,099 Other................................. 16,221 42,790 45,942 ----------- ----------- ----------- Total current assets................ 1,976,735 2,630,424 1,474,990 PROPERTY AND EQUIPMENT, net of accumulated depreciation of $347,293, $435,482, and $506,323 in 1995, 1996, and 1997, respectively................. 340,586 411,345 430,555 SOFTWARE DEVELOPMENT COSTS, net of accumulated amortization of $104,053, $321,433, and $442,886 in 1995, 1996, and 1997, respectively................. 164,451 363,840 358,734 OTHER ASSETS............................ 16,001 0 0 ----------- ----------- ----------- $ 2,497,773 $ 3,405,609 $ 2,263,469 =========== =========== =========== LIABILITIES AND SHAREHOLDERS' DEFICIT CURRENT LIABILITIES: Accounts payable...................... $ 207,299 $ 378,825 $ 122,418 Accrued liabilities................... 848,412 1,689,333 718,222 Customer deposits and deferred revenue.............................. 2,465,086 4,582,064 5,706,064 Current portion of long-term debt..... 66,364 124,500 128,288 ----------- ----------- ----------- Total current liabilities........... 3,587,161 6,774,722 6,674,992 Long-term debt, less current portion.. 102,288 171,288 71,641 ----------- ----------- ----------- Total liabilities................... 3,689,449 6,946,010 6,746,633 ----------- ----------- ----------- COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' DEFICIT: Common stock, no par value; 100,000 shares authorized; 1,050 shares issued and outstanding in 1995 and 1996................................. 1,050 1,050 1,050 Accumulated deficit................... (1,192,726) (3,541,451) (4,484,214) ----------- ----------- ----------- (1,191,676) (3,540,401) (4,483,164) ----------- ----------- ----------- $ 2,497,773 $ 3,405,609 $ 2,263,469 =========== =========== ===========
The accompanying notes are an integral part of these balance sheets. F-2 RESTAURANT MANAGEMENT AND CONTROL SYSTEMS, INC. STATEMENTS OF OPERATIONS
FOR THE YEARS FOR THE SIX MONTHS ENDED OCTOBER 31, ENDED APRIL 30, ----------------------- ---------------------- 1995 1996 1996 1997 ---------- ----------- ---------- ---------- (UNAUDITED) REVENUES: Software sales............... $1,955,898 $ 3,032,431 $1,502,629 $1,080,206 Customer support, maintenance, and other services.................... 2,325,772 2,615,307 1,581,688 907,991 ---------- ----------- ---------- ---------- Total revenues............. 4,281,670 5,647,738 3,084,317 1,988,197 ---------- ----------- ---------- ---------- COST OF REVENUES: Software sales............... 250,801 638,264 372,113 114,283 Customer support, maintenance, and other services.................... 1,508,779 1,407,517 794,696 657,288 ---------- ----------- ---------- ---------- Total cost of revenues..... 1,759,580 2,045,781 1,166,809 771,571 ---------- ----------- ---------- ---------- GROSS PROFIT.................. 2,522,090 3,601,957 1,917,508 1,216,626 ---------- ----------- ---------- ---------- OPERATING EXPENSES: Product development.......... 1,052,186 2,057,998 958,172 699,345 Sales and marketing.......... 1,202,452 1,196,403 515,790 685,108 Depreciation and amortization................ 154,145 392,228 186,527 185,262 General and administrative... 1,019,130 2,323,180 638,566 591,903 ---------- ----------- ---------- ---------- Total operating expenses... 3,427,913 5,969,809 2,299,055 2,161,618 ---------- ----------- ---------- ---------- LOSS FROM OPERATIONS.......... (905,823) (2,367,852) (381,547) (944,992) INTEREST EXPENSE (INCOME), NET.......................... 22,763 (19,127) (14,462) (2,229) ---------- ----------- ---------- ---------- NET LOSS...................... $ (928,586) $(2,348,725) $ (367,085) $ (942,763) ========== =========== ========== ==========
The accompanying notes are an integral part of these statements. F-3 RESTAURANT MANAGEMENT AND CONTROL SYSTEMS, INC. STATEMENTS OF SHAREHOLDERS' DEFICIT
COMMON STOCK ------------- ACCUMULATED SHARES AMOUNT DEFICIT TOTAL ------ ------ ----------- ----------- BALANCE, October 31, 1994.............. 1,050 $1,050 $ (264,140) $ (263,090) Net loss.............................. 0 0 (928,586) (928,586) ----- ------ ----------- ----------- BALANCE, October 31, 1995.............. 1,050 1,050 (1,192,726) (1,191,676) Net loss.............................. 0 0 (2,348,725) (2,348,725) ----- ------ ----------- ----------- BALANCE, October 31, 1996.............. 1,050 1,050 (3,541,451) (3,540,401) Net loss.............................. 0 0 (942,763) (942,763) ----- ------ ----------- ----------- BALANCE, April 30, 1997 (Unaudited).... 1,050 $1,050 $(4,484,214) $(4,483,164) ===== ====== =========== ===========
The accompanying notes are an integral part of these statements. F-4 RESTAURANT MANAGEMENT AND CONTROL SYSTEMS, INC. STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED FOR THE SIX MONTHS ENDED OCTOBER 31 APRIL 30 ----------------------- -------------------------- 1995 1996 1996 1997 ---------- ----------- ------------ ------------ (UNAUDITED) CASH FLOWS FROM OPERATING ACTIVITIES: Net loss................ $ (928,586) $(2,348,725) $ (367,085) $ (942,763) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization.......... 154,145 392,228 186,527 185,262 Changes in assets and liabilities: Accounts receivable... (892,243) (84,054) (188,228) 307,897 Inventories........... (37,455) 45,797 10,565 50,615 Other assets.......... (8,844) (19,006) (29,678) (3,152) Accounts payable...... 117,806 171,526 41,889 (212,796) Accrued liabilities... 677,990 840,921 (500,554) (971,113) Customer deposits and deferred revenue..... 1,996,787 2,116,978 1,129,253 1,124,002 ---------- ----------- ------------ ------------ Net cash provided by (used in) operating activities.......... 1,079,600 1,115,665 282,689 (462,048) ---------- ----------- ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment.......... (247,910) (245,326) (58,537) (86,051) Capitalized software development costs...... (23,098) (417,050) (253,294) (113,315) ---------- ----------- ------------ ------------ Net cash used in investing activities.......... (271,008) (662,376) (311,831) (199,366) ---------- ----------- ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings under long- term debt.............. 4,482 0 0 0 Repayments of long-term debt................... (53,400) (80,330) (31,447) (139,470) ---------- ----------- ------------ ------------ Net cash used in financing activities.......... (48,918) (80,330) (31,447) (139,470) ---------- ----------- ------------ ------------ INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS............. 759,674 372,959 (60,589) (800,884) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD............... 59,655 819,329 819,329 1,192,288 ---------- ----------- ------------ ------------ CASH AND CASH EQUIVALENTS, END OF PERIOD.................. $ 819,329 $ 1,192,288 $ 758,740 $ 391,404 ========== =========== ============ ============ SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for interest.... $ 22,763 $ 12,908 $ 6,454 $ 11,382 ========== =========== ============ ============ Cash paid during the period for income taxes.................. $ 0 $ 0 $ 0 $ 0 ========== =========== ============ ============ NONCASH INVESTING AND FINANCING ACTIVITIES: Inventory purchase under note payable obligation............. $ 0 $ 207,466 $ 0 $ 0 ========== =========== ============ ============
The accompanying notes are an integral part of these statements. F-5 RESTAURANT MANAGEMENT AND CONTROL SYSTEMS, INC. NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1995 AND 1996 AND APRIL 30, 1997 1. ORGANIZATION AND BACKGROUND Restaurant Management and Control Systems, Inc. ("ReMACS") provides a full suite of management and control technology solutions to the restaurant industry throughout the United States. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Presentation The preparation of the 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 disclosures 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. Revenue Recognition ReMACS's revenue is generated primarily through software, support and maintenance, and installation and training: . Software Sales. Revenue from software licenses 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. ReMACS offers to its customers postcontract support in the form of maintenance, telephone support, and unspecified software enhancements. Revenue from support and maintenance is generally recognized as the service is performed. . Installation and Training. ReMACS offers installation and training services to its customers. Revenue from installation and training is generally recognized at the time the service is performed. As discussed in Note 6, the Company entered into a custom development arrangement during fiscal 1995. Revenue under the arrangement is being recognized based on percentage-of-completion method using cost-to-cost measures. 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. Inventories Inventories consist principally of software media and are stated at the lower of cost (first-in, first-out method) or market. Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation and amortization. Depreciation and amortization are provided using the straight-line method over estimated useful lives of three to five years. F-6 RESTAURANT MANAGEMENT AND CONTROL SYSTEMS, INC. NOTES TO FINANCIAL STATEMENTS--(CONTINUED) Property and equipment at October 31, 1995 and 1996 are summarized as follows:
1995 1996 --------- --------- Computers and office equipment......................... $ 600,644 $ 750,740 Furniture and fixtures................................. 87,235 96,087 --------- --------- 687,879 846,827 Less accumulated depreciation and amortization......... (347,293) (435,482) --------- --------- $ 340,586 $ 411,345 ========= =========
Software Development Costs Capitalized software development costs consist principally of salaries and certain other expenses directly related to development and modification of software products. Capitalization of such costs begins when a working model has been produced as evidenced by the completion of design, planning, coding, and testing such that the product meets its design specifications and has thereby established technological feasibility. Capitalization of such costs ends when the resulting product is available for general release to the public. Amortization of capitalized software development costs is provided at the greater of the ratio of current product revenue to the total of current and anticipated product revenue or on a straight-line basis over the estimated economic life of the software, which ReMACS has determined is not more than three years. 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 ReMACS's long-term debt is estimated based on the current rates offered to ReMACS for debt of similar terms and maturities. Under this method, ReMACS's fair value of long-term debt was not significantly different than the stated value at October 31, 1996. Statement of Cash Flows ReMACS considers all highly liquid investments purchased with a maturity of three months or less to be cash. Significant Customer Concentration A majority of ReMACS's customers operate within the food service industry, and a significant portion of the net sales of ReMACS is made to a limited number of customers. During the years ended October 31, 1995 and 1996, the following clients individually accounted for more than 10% of the ReMAC's revenue:
OCTOBER 31, ------------ 1995 1996 ----- ----- Customer A..................................................... 24.8% 44.0% Customer B..................................................... 12.4% *
* Accounted for less than 10% of total revenues for the period indicated. At October 31, 1996, 15.1% of ReMAC's accounts receivable related to Customer A. F-7 RESTAURANT MANAGEMENT AND CONTROL SYSTEMS, INC. NOTES TO FINANCIAL STATEMENTS--(CONTINUED) Long-Lived Assets ReMACS periodically reviews the values assigned to long-lived assets, such as property and equipment and software development costs, to determine if any impairments are other than temporary. Management believes that the long-lived assets in the accompanying balance sheets are appropriately valued. Interim Financial Information The accompanying financial statements as of April 30, 1997 and for the six- month periods ended April 30, 1996 and 1997 are unaudited. In the opinion of the management of ReMACS, these financial statements reflect all adjustments, consisting only of normal and recurring adjustments, necessary for a fair presentation of the financial statements. The results of operations for the six-month period ended April 30, 1997 are not necessarily indicative of the results that may be expected for the full year. 3. PRODUCT DEVELOPMENT EXPENDITURES Product development expenditures for the years ended October 31, 1995 and 1996 are summarized as follows:
1995 1996 ---------- ---------- Total development expenditures..................... $1,075,284 $2,475,048 Less additions to capitalized software development costs prior to amortization....................... (23,098) (417,050) ---------- ---------- Product development expense........................ $1,052,186 $2,057,998 ========== ==========
The activity in the capitalized software development account during 1995 and 1996 is summarized as follows:
1995 1996 ---------- ---------- Balance at beginning of period, net................ $ 196,006 $ 164,451 Additions.......................................... 23,098 417,050 Amortization expense............................... (54,653) (217,661) ---------- ---------- Balance at end of period, net...................... $ 164,451 $ 363,840 ========== ==========
All capitalized software development costs at October 31, 1996, were subject to amortization as products were available for general release. 4. LONG-TERM DEBT Long-term debt, including obligations under capital leases, consists of the following:
OCTOBER 31, ---------------------- 1995 1996 ---------- ---------- Note payable to vendor, interest at 7%, due in quarterly installments of $5,000 to $21,500 through January 1999, secured by certain inventory......................................... $ 0 $ 193,500 Capital lease obligations, interest at 10.25%, payable monthly through 1998, secured by equipment......................................... 168,652 102,288 ---------- ---------- 168,652 295,788 Less current portion............................... 66,364 124,500 ---------- ---------- $ 102,288 $ 171,288 ========== ==========
F-8 RESTAURANT MANAGEMENT AND CONTROL SYSTEMS, INC. NOTES TO FINANCIAL STATEMENTS--(CONTINUED) ReMACS has a $500,000 line of credit that bears interest at the prime rate plus 1% (8.25% at October 31, 1996). The line of credit expires in July 1997 and is secured by substantially all of ReMACS's assets and is personally guaranteed by ReMACS's shareholders. At October 31, 1996, $0 was outstanding and $500,000 was available under the facility. At October 31, 1996, aggregate maturities of long-term debt are as follows: 1997.................................................... $ 124,500 1998.................................................... 128,288 1999.................................................... 43,000 ----------- $ 295,788 ===========
5. INCOME TAXES The sources of the difference between the financial accounting and the tax bases of ReMACS's assets and liabilities which give rise to the deferred tax assets and liabilities and the tax effects of each are as follows as of October 31, 1995 and 1996:
1995 1996 --------- ----------- Deferred tax asset (liability): Net operating loss ("NOL") carryforwards.... $ 455,457 $ 1,222,429 Accrued liabilities......................... 89,600 215,600 Allowance for doubtful accounts............. 45,000 60,000 Capitalized software........................ (65,780) (145,536) --------- ----------- Net deferred tax assets................... 524,277 1,352,493 Valuation allowance........................... (524,277) (1,352,493) --------- ----------- $ 0 $ 0 ========= ===========
ReMACS's NOL carryforwards expire beginning 2007. For financial reporting purposes, a valuation allowance has been recognized to offset the deferred tax assets at October 31, 1995 and 1996, as realization of these assets is uncertain. Utilization of existing NOL carryforwards may be limited in future years, if significant ownership changes occur (see Note 7). The following summarizes the components of the income tax provision (benefit):
FOR THE YEARS ENDED OCTOBER 31, ----------------------- 1995 1996 --------- ----------- Current..................................... $ 0 $ 0 Deferred.................................... (355,112) (828,216) Valuation allowance......................... 355,112 828,216 --------- ----------- Income tax provision (benefit).............. $ 0 $ 0 ========= ===========
A reconciliation from the federal statutory rate to the tax provision (benefit) is as follows:
1995 1996 --------- ----------- Statutory federal tax rate.................... (34.0)% (34.0)% State income taxes, net of federal tax bene- fit.......................................... (6.1) (6.1) Other......................................... .5 .3 Valuation allowance........................... 39.6 39.8 --------- ----------- 0% 0% ========= ===========
F-9 RESTAURANT MANAGEMENT AND CONTROL SYSTEMS, INC. NOTES TO FINANCIAL STATEMENTS--(CONTINUED) 6. COMMITMENTS AND CONTINGENCIES Leases ReMACS leases office space, equipment, and certain vehicles under noncancelable operating lease agreements expiring on various dates through July 2001. At October 31, 1996, future minimum rental payments for noncancelable leases with terms in excess of one year were as follows: 1997............................................................. $144,678 1998............................................................. 100,806 1999............................................................. 21,568 2000............................................................. 15,048 2001............................................................. 9,232
Total rent expense under operating leases was $119,026 and $95,122 for the years ended October 31, 1995 and 1996, respectively. Benefit Plan ReMACS has a 401(k) profit-sharing Plan (the "Plan") available to all employees of ReMACS who have completed three months of service and have attained age 21. The Plan includes a salary deferral arrangement pursuant to which employees may contribute a minimum of 2% and a maximum of 15% of their salary on a pretax basis. ReMACS may make both matching and additional contributions at the discretion of the board of directors. During 1995 and 1996, ReMACS made contributions of $5,839 and $24,664, respectively. Legal Proceedings ReMACS is subject to legal proceedings and claims that arise in the ordinary course of business. In the opinion of management, there are no such claims outstanding that would have a material adverse effect on ReMACS's financial position or results of operations. Long Term Contract In 1995, ReMACS entered into an agreement whereby ReMACS was advanced approximately $3.0 million during fiscal years 1995 and 1996 in custom development fees. The Company is using the percentage-of-completion method of accounting to recognize revenue under this agreement. At October 31, 1996, ReMACS has deferred approximately $1.7 million based on its estimates of total costs to complete the contract development. 7. SUBSEQUENT EVENT On May 23, 1997, Radiant Systems, Inc. ("Radiant") purchased all of the outstanding common stock of ReMACS for 627,500 shares of Radiant common stock, $3.25 million in cash and $3.25 million in notes. F-10 UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION The accompanying unaudited pro forma condensed combined balance sheet as of March 31, 1997, gives effect to the ReMACS acquisition as if it had occurred on that date. The accompanying unaudited pro forma combined statements of operations for the years ended December 31, 1996 and the three months ended March 31, 1997 have been prepared to reflect adjustments to the Company's historical results of operations to give effect to the acquisitions of PrsymTech and ReMACS as if it they had occurred at the beginning of the respective periods. The accompanying pro forma combined balance sheet as of March 31, 1997 has been prepared as if the ReMACS acquisition had occurred as of that date. 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, which are included elsewhere in this Prospectus. F-11 UNAUDITED PRO FORMA COMBINED BALANCE SHEET AS OF MARCH 31, 1997
PRO FORMA PRO FORMA RADIANT(A) REMACS(B) ADJUSTMENTS COMBINED ----------- ----------- ------------ ------------ ASSETS Current assets Cash and cash equiva- lents................. $12,487,487 $ 391,404 $ (3,250,000)(2) $ 9,628,891 Accounts receivable, net of allowance for doubtful accounts .... 7,141,465 864,735 -- 8,006,200 Inventories............ 4,767,021 172,099 -- 4,939,120 Other short-term as- sets.................. 445,311 45,942 -- 491,253 ----------- ----------- ------------ ------------ Total current assets... 24,841,284 1,474,180 (3,250,000) 23,065,464 Property and equipment, net.................... 1,821,225 430,555 -- 2,251,780 Software development costs, net............. 852,261 358,734 (358,734)(1) 852,261 Intangibles, net........ 957,255 -- -- 957,255 18,547,757 (1) 18,547,757 (15,450,282)(1) (15,450,282) Deferred income tax as- sets................... 397,180 -- -- 397,180 Other assets............ 561,306 -- -- 561,306 ----------- ----------- ------------ ------------ $29,430,511 $ 2,263,469 $ (511,259) $ 31,182,721 =========== =========== ============ ============ LIABILITIES AND SHARE- HOLDERS' EQUITY (DEFI- CIT) Current liabilities Accounts payable and accrued liabilities... $ 6,807,842 $ 840,640 $ 150,000 (2) 7,798,482 Customer deposits and unearned revenue...... 2,516,295 5,706,064 (180,000)(1) 8,042,359 Current portion of shareholder loans..... -- -- -- -- Current portion of long term debt............. 528,231 128,288 -- 656,519 ----------- ----------- ------------ ------------ Total current liabili- ties.................. 9,852,368 6,674,992 150,000 16,497,360 Shareholder loans, less current portion........ -- -- 3,250,000 (2) 3,250,000 Long term debt, less current portion........ 231,601 71,641 -- 303,242 ----------- ----------- ------------ ------------ Total liabilities...... 10,083,969 6,746,633 3,400,000 20,050,602 ----------- ----------- ------------ ------------ Shareholders' equity (deficit).............. 19,346,542 (4,483,164) -- 14,863,378 (15,450,282)(4) (15,450,282) 4,483,164 (4) 4,483,164 7,235,859 (2) 7,235,859 ----------- ----------- ------------ ------------ $29,430,511 $ 2,263,469 $ (511,259) $ 31,182,721 =========== =========== ============ ============
- -------- (A) Derived from the March 31, 1997 unaudited financial statements of the Company appearing elsewhere in this Prospectus. (B) Derived from the April 30, 1997 unaudited financial statements of ReMACS appearing elsewhere in this Prospectus. NOTES TO UNAUDITED PRO FORMA COMBINED BALANCE SHEET--REMACS (1) Reflects adjustments to record the fair market value of the identifiable intangible 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 purchased research and development costs is written-off immediately (in thousands). Total consideration and transaction costs........................ $13,886 Fair value of net liabilities assumed............................ 4,303 ------- Excess of purchase price over fair value of net liabilities as- sumed........................................................... 18,548 Value associated with purchased research and development costs... 15,450 ------- Adjustments to goodwill.......................................... $ 3,098 =======
Reflects deferred maintenance revenue of $300,000 at its cost (the cost to service remaining commitment) of $120,000. 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 627,500 shares of Common Stock with an estimated fair value of approximately $7.2 million as of the acquisition date of May 23, 1997, adjusted to reflect a discount from market value to account for restrictions common to large holdings of unregistered securities, (ii) issuance of $3.25 million in notes, (iii) issuance of $3.25 million in cash, and (iv) transaction related expenses of $150,000. (3) Reflects the elimination of ReMAC's shareholder deficit of $4.5 million and the immediate write-off of purchased research and development costs of $15.4 million. F-12 UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE FIRST QUARTER ENDED MARCH 31, 1997
PRO FORMA PRO FORMA RADIANT (A) REMACS (B) ADJUSTMENTS COMBINED ----------- ---------- ----------- ----------- REVENUES: Systems sales.......... $10,742,270 $ 548,838 -- $11,291,108 Customer support, maintenance and other services.............. 1,818,057 468,227 -- 2,286,284 ----------- ---------- ----------- ----------- Total revenues......... 12,560,327 1,017,065 -- 13,577,392 COST OF REVENUES: Systems sales.......... 6,278,136 47,117 -- 6,325,253 Customer support, maintenance and other services.............. 1,748,773 324,369 -- 2,073,142 ----------- ---------- ----------- ----------- Total cost of revenues.............. 8,026,909 371,486 -- 8,398,395 GROSS PROFIT............ 4,533,418 645,579 -- 5,178,997 OPERATING EXPENSES: Product development.... 1,153,155 252,590 -- 1,405,745 Purchased research and -- -- (15,450,282)(10) (15,450,282) development costs..... 15,450,282 (9) 15,450,282 Sales and marketing.... 871,334 384,409 -- 1,255,743 Depreciation and amortization.......... 367,211 101,115 110,624 (8) 578,950 General and administrative........ 1,689,318 312,554 -- 2,001,872 ----------- ---------- ----------- ----------- Total operating expenses.............. 4,081,018 1,050,668 110,624 5,242,310 INCOME (LOSS) FROM OPERATIONS............. 452,400 (405,089) (110,624) (63,313) Interest expense, net... 209,165 2,752 69,063 (7) 280,980 ----------- ---------- ----------- ----------- INCOME (LOSS) BEFORE EXTRAORDINARY ITEM AND PROVISION (BENEFIT) FOR INCOME TAXES........... 243,236 (407,841) (179,687) (344,293) Pro forma income tax benefit................ (211,750) -- 211,750 (11) -- ----------- ---------- ----------- ----------- PRO FORMA INCOME (LOSS) BEFORE EXTRAORDINARY ITEM................... 454,986 (407,841) (391,437) (344,293) =========== ========== =========== =========== PRO FORMA NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE BEFORE EXTRAORDINARY ITEM................... $ 0.03 $ (0.03) =========== =========== WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING..... 13,125,239 13,752,739(12) =========== ===========
- -------- (A) Derived from March 31, 1997 unaudited financial statements of the Company appearing elsewhere in this Prospectus. (B) Derived from the three months ended April 30, 1997 unaudited financial statements of ReMACS. For purposes of the above presentation, the results for the three months ended January 31, 1997 have been omitted. Revenues and net loss for the three months ended January 31, 1997 were approximately $971,000 and $535,000, respectively. F-13 UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996
PRYSMTECH REMACS PRO FORMA PRO FORMA PRO FORMA RADIANT(A) ADJUSTMENTS REMACS(B) ADJUSTMENTS COMBINED ----------- ----------- ----------- ------------ ------------ REVENUES: Systems sales........... $35,888,342 $ -- $ 3,032,431 $ -- $ 38,920,773 Customer support, maintenance and other services............... 5,054,979 -- 2,615,307 -- 7,670,286 ----------- ----------- ----------- ------------ ------------ Total revenues......... 40,943,321 -- 5,647,738 -- 46,591,059 COST OF REVENUES: Systems sales........... 22,270,161 -- 638,264 -- 22,908,425 Customer support, maintenance and other services............... 5,464,533 -- 1,407,517 -- 6,872,050 ----------- ----------- ----------- ------------ ------------ Total cost of revenues.............. 27,734,694 -- 2,045,781 -- 29,780,475 GROSS PROFIT............ 13,208,627 -- 3,601,957 -- 16,810,584 OPERATING EXPENSES: Product development..... 3,327,630 -- 2,057,998 -- 5,385,628 Purchased research and development costs...... 3,930,000 (3,900,000)(4) -- -- 30,000 (15,450,282)(10) (15,450,282) 15,450,282 (9) 15,450,282 -- Sales and marketing..... 1,487,087 -- 1,196,403 -- 2,683,490 Depreciation and amortization........... 948,385 173,800 (2) 392,228 442,496 (8) 1,956,909 General and administrative......... 5,664,246 -- 2,323,180 -- 7,987,426 ----------- ----------- ----------- ------------ ------------ Total operating expenses.............. 15,357,348 (3,726,200) 5,969,809 442,496 18,043,453 ----------- ----------- ----------- ------------ ------------ INCOME (LOSS) FROM OPERATIONS............. (2,148,721) 3,726,200 (2,367,852) (442,496) (1,232,869) Interest expense, net... 711,848 267,750 (1) (19,127) 276,250 (7) 1,236,721 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) (2,469,590) Pro forma income tax (benefit) provision ... (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) $ (2,469,590) =========== =========== =========== ============ ============ PRO FORMA NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE.................. $ (0.19) $ (0.21) =========== ============ WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING..... 11,099,532 11,727,032 (6)(12) =========== ============
(A) Derived from the December 31, 1996 financial statements of the Company appearing elsewhere in this Prospectus. (B) Derived from the October 31, 1996 financial statements of ReMACS appearing elsewhere in this Prospectus. F-14 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. F-15 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. /s/ John H. Heyman By___________________________________ JOHN H. HEYMAN Executive Vice President and Chief Financial Officer Dated: June 27, 1997 EX-23 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 Statement File No. 333-23237 on Form S-8. /s/ Arthur Andersen LLP Atlanta, Georgia June 27, 1997 -----END PRIVACY-ENHANCED MESSAGE-----