-----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, KxaDVNiG1R0y8yGalGekY8s/6S/C0exGvTk1G9kPy7Gy0xUJqL8/TffgLpBD7pcu 8D+1XaN+00njItuv5ziwPQ== 0000950134-99-008223.txt : 19990914 0000950134-99-008223.hdr.sgml : 19990914 ACCESSION NUMBER: 0000950134-99-008223 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990913 ITEM INFORMATION: FILED AS OF DATE: 19990913 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPATIAL TECHNOLOGY INC CENTRAL INDEX KEY: 0000852437 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 841035353 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-28842 FILM NUMBER: 99710488 BUSINESS ADDRESS: STREET 1: 2425 55TH STREET STREET 2: STE 100 CITY: BOULDER STATE: CO ZIP: 80301 BUSINESS PHONE: 3034490649 MAIL ADDRESS: STREET 1: 2425 55TH STREET STREET 2: STE 100 CITY: BOULDER STATE: CO ZIP: 80301 8-K/A 1 AMENDMENT NO. 1 TO FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ----------- FORM 8-K/A AMENDMENT NO. 1 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): September 13, 1999 SPATIAL TECHNOLOGY INC. -------------------------------------------------- (Exact Name of Registrant as Specified in Charter) DELAWARE 0-288-42 84-1035353 (State of Incorporation) (Commission File Number) (IRS Employer Identification No) 2425 55TH STREET, SUITE 100 BOULDER, COLORADO 80301 (303) 544-2900 (Address of Principal Executive Offices and telephone number, including area code)
2 SPATIAL TECHNOLOGY INC. AMENDMENT NO. 1 The undersigned hereby amends the following items, financial statements, exhibits or other portions of its Current Report on Form 8-K filed with the Commission, event date July 14, 1999 (the "Current Report"), as set forth herein relating to the acquisition of Sven Technologies, Inc. ("Sven") by Spatial Technology Inc. ("Spatial" or the "Company"). The Current Report is hereby amended by deleting Item 7 thereof and replacing it in its entirety with the following: ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements (1) Audited financial statements of Sven Technologies, Inc. as of December 31, 1997 and 1998 and for the years then ended and the independent auditors' report of Hood & Strong LLP. (2) Unaudited interim financial statements of Sven Technologies, Inc. as of June 29, 1999 and for the six months ended June 30, 1998 and June 29, 1999. 2 3 SVEN TECHNOLOGIES, INC. ================================================================================ FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT DECEMBER 31, 1997 AND 1998 3 4 INDEPENDENT AUDITORS' REPORT MR. ISAAC K. KATO SVEN TECHNOLOGIES, INC. Palo Alto, California We have audited the accompanying balance sheet of SVEN TECHNOLOGIES, INC. as of December 31, 1997 and 1998, and the related statements of operations, stockholders' equity (deficit) and cash flows for 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 statements 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 Sven Technologies, Inc. as of December 31, 1997 and 1998 and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles. HOOD & STRONG LLP Menlo Park, California August 20, 1999 4 5
SVEN TECHNOLOGIES, INC. BALANCE SHEETS December 31, 1997 1998 - ------------------------------------------------------------------------------------------------------------------------- ASSETS CURRENT ASSETS: Cash $ - $ 18,526 Accounts receivable 4,408 10,878 Prepaid expenses 2,280 3,640 Inventory 1,500 2,915 - ------------------------------------------------------------------------------------------------------------------------- Total current assets 8,188 35,959 - ------------------------------------------------------------------------------------------------------------------------- FIXED ASSETS, net of accumulated depreciation 56,579 24,728 DEPOSIT 4,790 4,790 OTHER ASSETS, net of accumulated amortization 16,481 15,131 - ------------------------------------------------------------------------------------------------------------------------- $ 86,038 $ 80,608 ======================================================================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES: Cash overdraft $ 1,349 $ - Accounts payable 34,833 43,587 Accrued wages 54,618 56,992 Accrued interest 8,459 29,228 - ------------------------------------------------------------------------------------------------------------------------- Total current liabilities 99,259 129,807 - ------------------------------------------------------------------------------------------------------------------------- LONG-TERM LIABILITIES Notes payable to stockholders 300,482 409,990 - ------------------------------------------------------------------------------------------------------------------------- Total liabilities 399,741 539,797 - ------------------------------------------------------------------------------------------------------------------------- STOCKHOLDERS' EQUITY (DEFICIT) Common stock, 10,000,000 shares authorized; 2,222,222 shares issued and outstanding 22,222 22,222 Preferred stock, 5,000,000 shares authorized; 166,890 and 501,102 shares issued and outstanding in 1997 and 1998, respectively 300,400 617,900 Retained earnings (deficit) (636,325) (1,099,311) - ------------------------------------------------------------------------------------------------------------------------- Total stockholders' equity (deficit) (313,703) (459,189) - ------------------------------------------------------------------------------------------------------------------------- $ 86,038 $ 80,608 ========================================================================================================================
The accompanying notes are an integral part of this statement. 5 6
SVEN TECHNOLOGIES, INC. STATEMENT OF OPERATIONS Years Ended December 31, 1997 1998 - ------------------------------------------------------------------------------------------------------------------------ REVENUE $ 28,623 $ 147,009 - ------------------------------------------------------------------------------------------------------------------------ COST OF GOODS SOLD Manuals and packaging 15,246 24,235 Other costs 1,192 2,019 - ------------------------------------------------------------------------------------------------------------------------ 16,438 26,254 - ------------------------------------------------------------------------------------------------------------------------ Gross profit 12,185 120,755 - ------------------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES: Office salary 145,395 135,524 Marketing and promotion 37,316 71,523 Officers' salary 83,764 68,050 Rent 37,772 62,940 Advertising 23,234 56,372 Depreciation expenses 27,822 31,851 Printing and reproduction 4,899 25,202 Legal and professional fees 51,445 24,126 Payroll taxes 20,457 16,114 Postage and delivery 2,097 12,600 Travel 10,482 10,608 Telephone 14,022 8,879 Outside service 1,534 8,660 Supplies 3,007 6,368 Equipment rental 678 3,744 Dues and subscriptions 2,912 3,113 Employee benefits 56 2,770 Meals 614 2,536 Educational seminar 861 2,500 Computer supplies 2,601 2,264 Bad debt - 1,464 Amortization 1,350 1,350 Office expenses 587 1,218 Insurance 562 905 Bank charges 1,009 670 Workers compensation insurance 1,119 515 - ------------------------------------------------------------------------------------------------------------------------ 475,595 561,866 - ------------------------------------------------------------------------------------------------------------------------ Loss from operations (463,410) (441,111) - ------------------------------------------------------------------------------------------------------------------------ OTHER INCOME (EXPENSE): Interest income 969 - Interest expense (8,459) (20,769) Other, net 1,494 (306) - ------------------------------------------------------------------------------------------------------------------------ (5,996) (21,075) - ------------------------------------------------------------------------------------------------------------------------ Loss from operations before provision for income taxes (469,406) (462,186) PROVISION FOR INCOME TAXES 800 800 - ------------------------------------------------------------------------------------------------------------------------ NET LOSS $ (470,206) $ (462,986) ========================================================================================================================
The accompanying notes are an integral part of this statement. 6 7 SVEN TECHNOLOGIES, INC. STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) ================================================================================ Years Ended December 31, 1997 and 1998 - -----------------------------------------
Retained Common Stock Preferred Stock Earnings (Deficit) Total ------------------------------------------------------------------------------------------ Balance, December 31, 1996 $ 22,222 $ 175,200 $ (166,119) $ 31,303 Issuance of stock 125,200 125,200 Net (loss) (470,206) (470,206) - ---------------------------------------------------------------------------------------------------------------------------------- Balance, December 31, 1997 $ 22,222 $ 300,400 $ (636,325) $ (313,703) Issuance of stock 317,500 317,500 Net (loss) (462,986) (462,986) - ---------------------------------------------------------------------------------------------------------------------------------- Balance, December 31, 1998 $ 22,222 $ 617,900 $ (1,099,311) $ (459,189) ==================================================================================================================================
The accompanying notes are an integral part of this statement. 7 8
SVEN TECHNOLOGIES, INC. STATEMENT OF CASH FLOWS Year Ended December 31, 1997 1998 - --------------------------------------------------------------------------------------------------------------------- OPERATING ACTIVITIES: Cash received from customers $ 24,215 $ 140,539 Cash paid to suppliers (17,938) (27,669) Cash paid for operating expenses (412,034) (519,203) Income taxes paid - (800) Interest income received 969 - - --------------------------------------------------------------------------------------------------------------------- Net cash used for operating activities (404,788) (407,133) - --------------------------------------------------------------------------------------------------------------------- INVESTING ACTIVITIES: Purchase of fixed assets (24,851) - - --------------------------------------------------------------------------------------------------------------------- Net cash used for investing activities (24,851) - - --------------------------------------------------------------------------------------------------------------------- FINANCING ACTIVITIES: Loans from stockholders 219,562 109,508 Issuance of preferred stock 125,200 317,500 Cash overdraft 1,349 (1,349) - --------------------------------------------------------------------------------------------------------------------- Net cash provided from financing activities 346,111 425,659 - --------------------------------------------------------------------------------------------------------------------- NET (DECREASE) INCREASE IN CASH (83,528) 18,526 CASH - Beginning of year 83,528 0 - --------------------------------------------------------------------------------------------------------------------- CASH - End of year $ - $ 18,526 ===================================================================================================================== RECONCILIATION OF NET LOSS TO NET CASH USED FOR OPERATING ACTIVITIES: NET LOSS $ (470,206) $ (462,986) - --------------------------------------------------------------------------------------------------------------------- ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH USED FOR OPERATING ACTIVITIES: Depreciation and amortization 29,172 33,201 Increase in accounts receivable (4,408) (6,470) Increase in prepaid expenses (2,280) (1,360) Increase in inventory (1,500) (1,415) Decrease in deposits 723 - Increase in other assets (5,948) - Increase in accounts payable 18,963 8,754 Increase in accrued wages 22,237 2,374 Increase in accrued interest 8,459 20,769 - --------------------------------------------------------------------------------------------------------------------- Total adjustments 65,418 55,853 - --------------------------------------------------------------------------------------------------------------------- Net cash used for operating activities $ (404,788) $ (407,133) =====================================================================================================================
The accompanying notes are an integral part of this statement. 8 9 SVEN TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS ================================================================================ NOTE 1 - NATURE OF BUSINESS Sven Technologies, Inc. (the Company) develops and markets 3D computer graphics software applications, SurfaceSuite Pro, an application that enables mapping and warping of multiple photorealistic textures onto complex 3D objects, and AvatarMaker 3D, a 3D avatar creation application. The Company is specifically targeting the high end of the market, licensing to the large game companies and the 3D chip manufacturers. NOTE 2 - Summary of Significant a. Estimates Accounting Policies The preparation of financial statements in accordance with generally accepted accounting principals requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and revenues and expenses, as well as, contingent assets and liabilities during the reporting period. Actual results could differ from those estimates. b. Revenue Recognition The Company recognizes revenue from software sales upon shipment. c. Inventory Inventory is stated at the lower of cost or market, with cost being determined on the first-in, first-out method. d. Fixed Assets Fixed assets are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives ranging from five to seven years. e. Other Assets Patents are amortized on the straight-line method over 15 years. Organization costs are amortized on the straight-line method over 5 years. 9 10 SVEN TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ NOTE 2 - Summary of Significant f. Bad Debts Accounting Policies Receivables are written-off using (Continued) the direct write-off method. g. Income Taxes The Company has loss carryforwards of approximately $870,000 through December 31, 1998 that may be offset against future taxable income. h. Advertising The Company expenses advertising costs as they are incurred. NOTE 3 - FIXED ASSETS Fixed assets consisted of the following at December 31:
1998 1997 -------------------------------------------------------------- Computer equipment and software $ 89,502 $ 89,502 Furniture and equipment 6,050 6,050 -------------------------------------------------------------- 95,552 95,552 Less accumulated depreciation 70,824 38,973 -------------------------------------------------------------- $ 24,728 $ 56,579 ==============================================================
NOTE 4 - OTHER ASSETS Other assets consisted of the following at December 31:
1998 1997 -------------------------------------------------------------- Patents, net of accumulated amortization of $2,246 for 1998 and $1,123 for 1997 $ 14,600 $ 15,723 Organization costs, net of accumulated amortization of $605 for 1998 and $378 for 1997 531 758 -------------------------------------------------------------- $ 15,131 $ 16,481 ==============================================================
10 11 SVEN TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ NOTE 5 - RELATED PARTY The Company has notes payable to stockholders for money borrowed at various dates throughout 1997 and 1998. Principal and interest at 10% per annum are payable on or before various dates in 2000 and 2001. The aggregate principal balance of the notes as of December 31, 1998 was $409,990, of which $269,558 is payable in 2000 and $140,432 is payable in 2001. The aggregate principal balance of the notes of December 31, 1997 was $300,482. Accrued interest payable on the notes as of December 31, 1998 and 1997, respectively was $29,228 and $8,459. The Company also accrued wages of $54,618 in 1997 for officers who are also stockholders of the Company. These wages are still outstanding and included in accrued wages at December 31, 1998. NOTE 6 - STOCKHOLDERS' Sven Technologies, Inc. has EQUITY authorized the issuance of 5 million shares of preferred stock. At December 31, 1998 and 1997, the Company had 166,890 outstanding shares of Series A Convertible Preferred Stock ("Series A"). At December 31, 1998, the Company also has 334,212 outstanding shares of Series B Convertible Preferred Stock ("Series B"). The stocks have stated at liquidation preference values of $300,400 and $317,500, respectively. Each share of Preferred Stock will be convertible into one share of Common Stock. Holders of the Preferred Stocks have the same voting rights as Common Stock holders on an as-converted basis. Dividends on the Series A are payable in cash at the rate of $0.108 per share and holders of Series B are entitled to noncumulative dividends equal of 6% of the purchase price if declared by the Company's Board of Directors. NOTE 7 - LEASE COMMITMENT The Company has a lease for office space expiring in October 1999. Future minimum lease payments are approximately $45,000 for 1999. 11 12 SVEN TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ NOTE 8 - SUBSEQUENT EVENTS The Company borrowed $200,000 from a stockholder in January 1999. The note payable to the stockholder calls for principal and interest at 10% per annum to be paid on or before January 20, 2002. On June 29, 1999, certain assets and liabilities of the Company were purchased in exchange for cash and stock of the purchasing corporation. The Company's intent is to eventually liquidate its remaining assets and liabilities and cease operations. 12 13 SVEN TECHNOLOGIES, INC. CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
PAGE ---- Financial Statements: Balance Sheet, as of June 29, 1999.............................................................. 14 Statements of Operations, six months ended June 30, 1998 and June 29, 1999...................... 15 Statements of Cash Flows, six months ended June 30, 1998 and June 29, 1999...................... 16 Notes to Financial Statements................................................................... 17
13 14 SVEN TECHNOLOGIES, INC. CONDENSED BALANCE SHEETS (UNAUDITED)
June 29, 1999 ------------ ASSETS Current Assets: Cash and cash equivalents ................................................. $ 36,093 Accounts receivable, net .................................................. 14,359 Prepaid expenses and other ................................................ 10,230 ------------ Total current assets .................................................. 60,682 Equipment, net ................................................................. 21,569 Other assets ................................................................... 20,643 ------------ $ 102,894 ============ LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities: Accounts payable .......................................................... $ 13,703 Accrued expenses .......................................................... 81,863 ------------ Total current liabilities ............................................. 95,566 ------------ Notes payable to stockholders .................................................. 627,759 ------------ Stockholders' Deficit: Common stock, 10,000,000 shares authorized; 2,222,222 shares issued and outstanding ................................................ 22,222 Preferred stock, 5,000,000 shares authorized; 501,102 shares issued and outstanding ................................................ 617,900 Accumulated deficit ....................................................... (1,260,553) ------------ Total stockholders' deficit ........................................... (620,431) ------------ $ 102,894 ============
See accompanying notes to condensed financial statements. 14 15 SVEN TECHNOLOGIES, INC. CONDENSED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT (UNAUDITED)
Six Months Ended ------------------------------- June 30, 1998 June 29, 1999 ------------- ------------- Revenue ..................................... $ 41,275 $ 113,923 Cost of goods sold .......................... 12,449 7,798 ----------- ----------- Gross profit ................................ 28,826 106,125 ----------- ----------- Operating expenses: Sales and marketing .................... 42,561 53,136 Research and development ............... 120,759 158,341 General and administrative ............. 24,482 55,070 ----------- ----------- Total operating expenses ........... 187,802 266,547 ----------- ----------- Loss from operations ............... (158,976) (160,422) Other income ................................ 1,669 -- ----------- ----------- Loss before income taxes ........... (157,307) (160,422) ----------- ----------- Income tax expense .......................... -- 820 ----------- ----------- Net Loss ........................... $ (157,307) $ (161,242) Accumulated deficit: Beginning of period ................ (616,935) (1,099,311) ----------- ----------- End of period ...................... $ (774,242) $(1,260,553) =========== ===========
See accompanying notes to condensed financial statements. 15 16 SVEN TECHNOLOGIES, INC. CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended ------------------------------- June 30, June 29, 1998 1999 ----------- ----------- Cash flows from operating activities: Net loss................................................................ $ (157,307) $ (161,242) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation and amortization......................................... 13,926 13,077 Changes in operating assets and liabilities: Accounts receivable................................................. (6,530) (3,481) Prepaid expenses and other.......................................... (15,319) (4,397) Accounts payable.................................................... (16,791) (29,884) Accrued expenses.................................................... 9,751 (4,357) ----------- ----------- Net cash used by operating activities............................. (172,270) (190,284) ----------- ----------- Cash flows from investing activities: Additions to equipment.................................................. (3,486) (9,918) ----------- ----------- Cash flows from financing activities: Proceeds from notes payable to stockholders............................. 99,502 217,769 Proceeds from issuance of preferred stock............................... 280,000 -- ----------- ----------- Net cash provided by financing activities......................... 379,502 217,769 ----------- ----------- Net increase in cash and cash equivalents......................... 203,746 17,567 Cash and cash equivalents at beginning of period........................... -- 18,526 ----------- ----------- Cash and cash equivalents at end of period................................. $ 203,746 $ 36,093 =========== =========== Supplemental disclosures: Cash paid for income taxes.............................................. $ -- $ 820 =========== ===========
See accompanying notes to condensed financial statements. 16 17 SVEN TECHNOLOGIES INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) A. FINANCIAL STATEMENT PRESENTATION The accompanying unaudited condensed financial statements of Sven Technologies, Inc ("Sven") have been prepared by Sven pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. Sven believes the disclosures included in the condensed financial statements, when read in conjunction with Sven's financial statements as of December 31, 1997 and 1998 and for the years then ended and notes thereto included elsewhere in the Current Report on Form 8-K of Spatial Technology Inc. dated September 13, 1999 are adequate to make the information presented not misleading. The accompanying unaudited financial information as of June 29, 1999 and for the six month periods ended June 30, 1998 and June 29, 1999 has been prepared in accordance with generally accepted accounting principles for interim financial information. All significant adjustments, consisting of only normal and recurring adjustments, which in the opinion of management, are necessary for a fair presentation of the results for the six months ended June 30, 1998 and June 29, 1999 have been included. Operating results for the six month period ended June 29, 1999 are not necessarily indicative of the results that may be expected for the full year. B. NOTES PAYABLE TO STOCKHOLDERS During 1998 and 1999 Sven issued notes payable to certain stockholders which bear interest at 10% per annum and are due on various dates through 2001. 17 18 (b) Pro forma financial information (1) Pro forma condensed combined statements of operations for Spatial and Sven for the year ended December 31, 1998, and the six months ended June 29, 1999 as if the acquisition had occurred on January 1, 1998. SPATIAL TECHNOLOGY INC. UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS Effective June 29, 1999 the Company acquired substantially all of the net assets of Sven for consideration of $1.0 million, including $500,000 cash and 96,931 shares of common stock. . In addition, the Company issued an additional 96,930 shares of common stock (the "Earnout Shares") and a warrant to purchase 250,000 shares of common stock at an exercise price of $12.50 per share (the "Warrant"). Pursuant to the purchase agreement, the Earnout Shares and Warrant are being held in escrow, and will be released to Sven only upon attainment of certain performance objectives. The acquisition was accounted for using the purchase method of accounting. The following unaudited pro forma condensed combined financial statements are presented for illustrative purposes only and do not purport to be indicative of the results of operations for future periods or the results that actually would have been realized had the Company and Sven been combined during the periods presented. The unaudited pro forma condensed combined financial statements, including the notes thereto, are qualified in their entirety by reference to, and should be read in conjunction with the historical consolidated financial statements and the notes thereto of the Company which were previously reported in the Company's Report on Form 10-KSB for the year ended December 31, 1998 and the Quarterly Reports on Form 10-QSB for the quarters ended March 31, 1999 and June 30, 1999, and the financial statements and the notes thereto of Sven as of December 31, 1997 and 1998 and for the years then ended, and as of June 29, 1999 and for the six months ended June 30, 1998 and June 29, 1999 (unaudited), included elsewhere in this Current Report on Form 8-K. The Unaudited Pro Forma Condensed Combined Statements of Operations of the Company for the six months ended June 30, 1999 and the year ended December 31, 1998, assume that the acquisition of Sven was completed on January 1, 1998. A pro forma condensed combined balance sheet has not been provided as the acquisition of Sven by the Company is reflected in the Company's condensed consolidated balance sheet as of June 30, 1999 included in the Company's Report on Form 10-QSB for the quarter ended June 30, 1999. The Company believes that the accompanying unaudited pro forma condensed combined financial information contains all adjustments necessary to fairly present the results of operations of the Company for the six months ended June 30, 1999 and the year ended December 31, 1998, as if the acquisition of Sven was completed on January 1, 1998. 18 19 SPATIAL TECHNOLOGY INC. UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1999 (Amounts in thousands, except per share amounts)
PRO FORMA PRO FORMA SPATIAL SVEN ADJUSTMENTS SPATIAL ------- ------- ----------- --------- Revenue: License fees $ 2,956 $ 114 $ -- $ 3,070 Royalties 2,359 -- -- 2,359 Services 2,339 -- -- 2,339 ------- ------- ------- ------- Total revenue 7,654 114 -- 7,768 ------- ------- ------- ------- Cost of sales License fees 283 8 36 (a) 327 Royalties 9 -- -- 9 Services 243 -- -- 243 ------- ------- ------- ------- Total cost of sales 535 8 36 579 ------- ------- ------- ------- Gross profit 7,119 106 (36) 7,189 ------- ------- ------- ------- Operating expenses Sales and marketing 2,675 53 -- 2,728 Research and development 3,430 158 -- 3,588 General and administrative 966 55 -- 1,021 Acquired in-process research and development 500 -- -- 500 ------- ------- ------- ------- Total operating expenses 7,571 266 -- 7,837 ------- ------- ------- ------- Loss from operations (452) (160) (36) (648) Other income 82 -- -- 82 ------- ------- ------- ------- Loss before income taxes (370) (160) (36) (566) Income taxes 175 1 -- 176 ------- ------- ------- ------- Net loss $ (545) $ (161) $ (36) $ (742) ======= ======= ======= ======= Loss per common share: Basic ($0.06) ($0.08) Diluted ($0.06) ($0.08) Weighted average number of shares outstanding: Basic 9,284 97 (c) 9,381 Diluted 9,284 97 (c) 9,381
19 20 SPATIAL TECHNOLOGY INC. UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1998 (Amounts in thousands, except per share amounts)
PRO FORMA PRO FORMA SPATIAL SVEN ADJUSTMENTS SPATIAL -------- -------- ----------- --------- Revenue: License fees $ 6,253 $ 147 $ -- $ 6,400 Royalties 3,922 -- -- 3,922 Services 4,175 -- -- 4,175 -------- -------- -------- -------- Total revenue 14,350 147 -- 14,497 -------- -------- -------- -------- Cost of sales License fees 461 64 72 (a) 597 Royalties 39 -- -- 39 Services 264 -- -- 264 -------- -------- -------- -------- Total cost of sales 764 64 72 900 -------- -------- -------- -------- Gross profit 13,586 83 (72) 13,597 -------- -------- -------- -------- Operating expenses Sales and marketing 5,213 105 -- 5,318 Research and development 5,678 309 -- 5,987 General and administrative 2,416 110 -- 2,526 Acquired in-process research and development -- -- 500 (b) 500 -------- -------- -------- -------- Total operating expenses 13,307 524 500 14,331 -------- -------- -------- -------- Earnings (loss) from operations 279 (441) (572) (734) Other income (expense) 238 (21) -- 217 -------- -------- -------- -------- Earnings (loss) before income taxes 517 (462) (572) (517) Income taxes 316 1 -- 317 -------- -------- -------- -------- Net earnings (loss) $ 201 $ (463) $ (572) $ (834) ======== ======== ======== ======== Earnings (loss) per common share: Basic $0.02 ($0.09) Diluted $0.02 ($0.09) Weighted average number of shares outstanding: Basic 9,199 97 (c) 9,296 Diluted 9,307 97 (c) 9,404
20 21 SPATIAL TECHNOLOGY INC NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS YEAR ENDED DECEMBER 31, 1998 AND SIX MONTHS ENDED JUNE 30, 1999 (a) Adjustment to reflect the additional amortization of intangible assets from the Sven acquisition. The acquisition of certain assets and liabilities of Sven resulted in approximately $508,000 of intangible assets, which are being amortized over their estimated useful lives of seven years. (b) Adjustment to reflect a $500,000 charge for acquired in-process research and development expense pursuant to the acquisition of Sven. (c) Adjustment to reflect shares of common stock issued in connection with the acquisition of Sven. 21 22 (c) Exhibits Exhibit Description Number of Document ------- ----------- 23.1 Consent of Hood & Strong LLP 22 23 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. SPATIAL TECHNOLOGY INC. Date: September 13, 1999 /s/ TODD S. LONDA ----------------------------------- Todd S. Londa Vice President, Administration and Corporate Controller 23 24 EXHIBIT INDEX Exhibit Description Number of Document ------- ----------- 23.1 Consent of Hood & Strong LLP EX-23.1 2 CONSENT OF HOOD & STRONG LLP 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS The Board of Directors and Stockholders Spatial Technology Inc.: We consent to the use of our report dated August 20, 1999 with respect to the financial statements of Sven Technologies, Inc. included in this Current Report on Form 8-K. HOOD & STRONG LLP /s/ HOOD & STRONG LLP Menlo Park, California September 13, 1999 -----END PRIVACY-ENHANCED MESSAGE-----