-----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, DNwluLHzOyeRsg4rALjQr60Gv8o0F6nZAQoLmIdcP2p+tz85myAgIEGgMulKtgz/ 3mWP7RPQHejYcW+gup5dIA== 0001035704-98-000513.txt : 19980817 0001035704-98-000513.hdr.sgml : 19980817 ACCESSION NUMBER: 0001035704-98-000513 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980814 SROS: NASD 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: 10QSB SEC ACT: SEC FILE NUMBER: 000-28842 FILM NUMBER: 98688779 BUSINESS ADDRESS: STREET 1: 2425 55TH STREET STREET 2: STE 100 CITY: BOULDER STATE: CO ZIP: 803012 BUSINESS PHONE: 3034490649 MAIL ADDRESS: STREET 1: 2425 55TH STREET STREET 2: STE 100 CITY: BOULDER STATE: CO ZIP: 80301 10QSB 1 FORM 10-QSB FOR QUARTER ENDED JUNE 30, 1998 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from To Commission file number 0-288-42 SPATIAL TECHNOLOGY INC. (Exact name of registrant as specified in its charter) DELAWARE 84-1035353 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2425 55th STREET, SUITE 100, BOULDER, COLORADO 80301 (address of principal executive offices) (Zip Code) (303) 544-2900 (Registrant's telephone number, including area code) Indicate by check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- As of July 1, 1998, there were outstanding 7,782,964 shares of the Registrant's Common Stock (par value $0.01 per share). Transitional Small Business Disclosure Format (check one): Yes No X --- --- 2 SPATIAL TECHNOLOGY INC. INDEX
Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets, December 31, 1997 and June 30, 1998.................................................. 3 Condensed Consolidated Statements of Operations, three and six months ended June 30, 1997 and 1998................................ 4 Condensed Consolidated Statements of Cash Flows, six months ended June 30, 1997 and 1998................................ 5 Notes to Condensed Consolidated Financial Statements..................... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.............................................. 7 PART II. OTHER INFORMATION....................................................... 11 Signatures........................................................................ 12
2 3 SPATIAL TECHNOLOGY INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except shares)
ASSETS December 31, June 30, 1997 1998 ------------ ------------ (Unaudited) Current Assets: Cash and cash equivalents ...................................... $ 5,736 $ 4,625 Accounts receivable, net of allowance of $82 and $66 in 1997 and 1998, respectively ................................... 2,415 3,356 Prepaid expenses and other ..................................... 402 393 ------------ ------------ Total current assets ..................................... 8,553 8,374 Equipment, net ....................................................... 1,112 1,135 Purchased computer software, net ..................................... 670 691 ------------ ------------ $ 10,335 $ 10,200 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable ............................................... $ 209 $ 266 Accrued royalties payable ...................................... 317 372 Other accrued expenses ......................................... 1,172 776 Deferred revenue ............................................... 1,470 1,706 ------------ ------------ Total current liabilities ................................ 3,168 3,120 ------------ ------------ Stockholders' Equity: Common stock, $.01 par value; 22,500,000 shares authorized; 7,741,348 and 7,782,964 shares issued in 1997 and 1998, respectively ............................................. 77 78 Additional paid-in capital ..................................... 24,057 24,139 Accumulated deficit ............................................ (16,852) (17,010) Foreign currency translation adjustment ........................ (115) (127) ------------ ------------ Total stockholders' equity ............................... 7,167 7,080 ------------ ------------ $ 10,335 $ 10,200 ============ ============
See accompanying notes to condensed consolidated financial statements. 3 4 SPATIAL TECHNOLOGY INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share amounts)
Three Months Ended Six Months Ended June 30, June 30, --------------------------- --------------------------- 1997 1998 1997 1998 ----------- ----------- ----------- ----------- Revenue: License fees .................................. $ 956 $ 1,280 $ 1,570 $ 2,001 Royalties ..................................... 532 925 1,299 1,904 Maintenance and other ......................... 697 806 1,406 1,627 ----------- ----------- ----------- ----------- Total revenue ........................ 2,185 3,011 4,275 5,532 ----------- ----------- ----------- ----------- Cost of sales: License fees .................................. 83 69 151 128 Royalties ..................................... 40 4 96 11 Maintenance and other ......................... 59 62 128 137 ----------- ----------- ----------- ----------- Total cost of sales .................. 182 135 375 276 ----------- ----------- ----------- ----------- Gross profit ......................... 2,003 2,876 3,900 5,256 ----------- ----------- ----------- ----------- Operating expenses: Sales and marketing ........................... 977 1,127 1,900 2,256 Research and development ...................... 1,116 1,188 2,004 2,215 General and administrative .................... 820 556 1,394 953 ----------- ----------- ----------- ----------- Total operating expenses ............. 2,913 2,871 5,298 5,424 ----------- ----------- ----------- ----------- Earnings (loss) from operations ...... (910) 5 (1,398) (168) Other income (expense) Interest income ............................... 100 64 207 129 Interest expense .............................. -- -- (1) -- Other, net .................................... (1) (2) (2) (3) ----------- ----------- ----------- ----------- Total other income (expense) ......... 99 62 204 126 ----------- ----------- ----------- ----------- Earnings (loss) before income taxes .. (811) 67 (1,194) (42) Income tax expense (benefit) ..................... (7) 24 21 116 ----------- ----------- ----------- ----------- Net earnings (loss) .................. $ (804) $ 43 $ (1,215) $ (158) =========== =========== =========== =========== Earnings (loss) per common share Basic ...................................... $ (0.11) $ 0.01 $ (0.16) $ (0.02) Diluted .................................... $ (0.11) $ 0.01 $ (0.16) $ (0.02) Shares outstanding Basic ...................................... 7,430 7,783 7,422 7,773 Diluted .................................... 7,430 7,877 7,422 7,773
See accompanying notes to consolidated financial statements. 4 5 SPATIAL TECHNOLOGY INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)
Six Months Ended June 30, ---------------------------- 1997 1998 ------------ ------------ Cash flows from operating activities: Net loss .......................................................... $ (1,215) $ (158) Adjustments to reconcile net loss to net cash used by operating activities: Provision for impairment of purchased computer software ........ 200 -- Depreciation and amortization .................................. 152 236 Changes in operating assets and liabilities: Accounts receivable ......................................... (534) (941) Prepaid expenses and other .................................. (94) 9 Accounts payable ............................................ 25 57 Accrued expenses ............................................ 207 (341) Deferred revenue ............................................ 21 236 ------------ ------------ Net cash used by operating activities .................... (1,238) (902) ------------ ------------ Cash flows from investing activities: Additions to equipment ............................................ (419) (179) Additions to purchased computer software .......................... -- (101) ------------ ------------ Net cash used by investing activities .................... (419) (280) ------------ ------------ Cash flows from financing activities: Proceeds from issuance of stock ................................... 188 83 ------------ ------------ Net cash provided by financing activities ................ 188 83 ------------ ------------ Foreign currency translation adjustment affecting cash ............... (10) (12) ------------ ------------ Net decrease in cash and cash equivalents ................ (1,479) (1,111) Cash and cash equivalents at beginning of period ..................... 8,407 5,736 ------------ ------------ Cash and cash equivalents at end of period ........................... $ 6,928 $ 4,625 ============ ============ Supplemental disclosures: Cash paid for interest ............................................ $ 1 $ -- ============ ============ Cash paid for income taxes ........................................ $ 44 $ 118 ============ ============
See accompanying notes to condensed consolidated financial statements. 5 6 SPATIAL TECHNOLOGY INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) June 30, 1998 A. FINANCIAL STATEMENT PRESENTATION The accompanying audited and unaudited condensed consolidated financial statements of the Company have been prepared by the Company 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. The Company believes the disclosures included in the condensed consolidated financial statements, when read in conjunction with the Company's consolidated financial statements and notes thereto included in the Company's annual report on Form 10-KSB for the year ended December 31, 1997, are adequate to make the information presented not misleading. B. EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed on the basis of the weighted average number of common shares outstanding plus the dilutive effect of potential common stock. Except for the three months ended June 30, 1998, diluted loss per share is the same as basic loss per share, as the effect of potential common stock is antidilutive. The effect of potential common stock for the quarter ended June 30, 1998 is not significant. C. ACCOUNTING POLICIES Revenue Recognition Effective for the fiscal year beginning January 1, 1998, the Company adopted Statement of Position 97-2, "Software Revenue Recognition" ("SOP 97-2") which requires that revenue for licensing, selling, leasing, or otherwise marketing computer software be recognized when certain criteria are met. In March 1998, the AICPA issued Statement of Position No. 98-4 ("SOP 98-4"), "Deferral of the Effective Date of a Provision of SOP 97-2." SOP 98-4 defers, for one year, the application of certain passages in SOP 97-2, which limit what is considered vendor-specific objective evidence necessary to recognize revenue for software licenses in multiple-element arrangements when undelivered elements exist. Additional guidance is expected to be provided prior to adoption of any resulting final amendments related to the deferred provisions of SOP 97-2. The Company does not expect the effect of adopting the remaining provisions of SOP 97-2 will have a material effect on the Company's financial statements given the Company's policy of utilizing standard contracts and allocating revenue to each element in a given contract based on an established price list. Comprehensive Income The Company has adopted the provisions of Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income," effective January 1, 1998. This statement requires the disclosure of comprehensive income and its components in a full set of general-purpose financial statements. Comprehensive income is defined as net income plus revenues, expenses, gains and losses that, under generally accepted accounting principles, are excluded from net income. The components of comprehensive income, which are excluded from net income, are not significant individually or in aggregate, and therefore, no separate statement of comprehensive income has been presented. 6 7 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Except for the historical information contained herein, the following discussion contains forward-looking statements that involve risks and uncertainties. The Company's actual results could differ materially from those presented here. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this section and those discussed in the Company's Form 10-KSB for the year ended December 31, 1997, particularly those contained in "Management's Discussion and Analysis of Financial Condition and Results of Operations". RESULTS OF OPERATIONS Revenue Total revenue for the quarter ended June 30, 1998 increased 38% to $3.0 million from $2.2 million reported for the quarter ended June 30, 1997, reflecting an increase in all revenue categories. License fees increased 34% to $1.3 million for the second quarter of 1998 from $956,000 reported in the second quarter of 1997. Increased license fees in the second quarter of 1998 as compared to the same prior year quarter were primarily due to new license contracts in Europe. Royalties increased 74%, to $925,000 for the second quarter of 1998 versus $532,000 reported for the same quarter in 1997. Increased royalties for the quarter ended June 30, 1998 as compared to the comparable quarter in 1997 was the result of two factors: 1) an increase in the number of the Company's customers shipping ACIS(R)-enabled software applications, and 2) increased non-refundable royalties. Maintenance and other revenue increased 16% to $806,000 for the quarter ended June 30, 1998 as compared to $697,000 reported for the quarter ended June 30, 1997. Total recurring revenue, which is comprised of royalty revenue and maintenance fees, increased 41% from the prior-year period and represented 57% of total revenue during the second quarter of 1998. For the six month period ended June 30, 1998 total revenue increased 29% to $5.5 million as compared to $4.3 million reported for the same six month period in 1997, resulting from increases in all three revenue categories. License fees increased 27% to $2.0 million in the six month period ended June 30, 1998 as compared to $1.6 million reported for the comparable prior year period. The increase in license fees was primarily attributable to an increase in new license contracts in North America and Europe in 1998 as compared to 1997. Royalties increased 47%, growing to $1.9 million for the six month period ended June 30, 1998 versus $1.3 million reported for the six month period ended June 30, 1997. Increased royalties for 1998 as compared to 1997 resulted from an increase in the number of the Company's customers shipping ACIS-enabled software applications. Maintenance and other revenue increased 16% to $1.6 million for the six month period ended June 30, 1998 as compared to $1.4 million reported for the comparable period in 1997 resulting primarily from an increase in renewed maintenance contracts. Geographically, international revenue increased 56% for the quarter ended June 30, 1998 and represented 50% of revenue as compared to 44% for the quarter ended June 30, 1997. Increased international revenue for the second quarter of 1998 reflects an increase in the number of license contracts in Europe. For the six month period ended June 30, 1998 international revenue increased 20% and represented 45% of total revenue as compared to 48% for the comparable prior year period. The decline in the ratio of international revenue for this six month period is a result of the growth in recurring revenue in the United States, including both royalties and maintenance revenue. 7 8 Cost of Sales Cost of sales consists of support costs, royalty payments by the Company to third party developers, manufacturing costs (primarily media duplication, manuals, and shipping) and amortization of purchased computer software. Total cost of sales decreased 26% to $135,000 for the quarter ended June 30, 1998 from $182,000 reported for the quarter ended June 30, 1997. For the six month period ended June 30, 1998 cost of sales decreased 26% to $276,000 from $375,000 reported in the comparable prior year period. The decrease in cost of sales for all periods presented was primarily due to a decrease in royalty expenses to third party developers, partially offset by increased amortization of purchased computer software. Decreased royalty expense in 1998 as compared to 1997 was due to the acquisition of certain intellectual property rights in the fourth quarter of 1997, which resulted in the elimination of a royalty obligation of the Company. In connection with the acquisition of these intellectual property rights, the Company capitalized certain assets as purchased computer software and is amortizing these assets over a period of seven years, which resulted in an increase in amortization in 1998 as compared to 1997. As a percent of total revenue, cost of sales decreased to 4% and 5% for the three and six months ended June 30, 1998, respectively, as compared to 8% and 9% for the comparable periods in 1997, respectively. Operating Expenses Sales and marketing expense increased 15% to $1.1 million for the quarter ended June 30, 1998 as compared to $977,000 reported in the quarter ended June 30, 1997. For the six month period ended June 30, 1998 sales and marketing expense increased 19% to $2.3 million from $1.9 million reported for the six month period ended June 30, 1997. Increased sales and marketing expense in 1998 as compared 1997 was due to increased commissions and travel related costs associated with increased revenue. As a percent of total revenue, sales and marketing expense decreased to 37% and 41% for the three and six month periods ended June 30, 1998, respectively, as compared to 45% and 44% for the comparable periods in 1997, respectively. Research and development expense increased 6% to $1.2 million for the quarter ended June 30, 1998 from $1.1 million reported in the same prior year quarter. For the six month period ended June 30, 1998 research and development expense increased 11% to $2.2 million from $2.0 million reported in the comparable prior year period. Increased research and development expense was due to increased staffing in support of increased development efforts for existing products, as well as for new product offerings, including the ACIS(R) 3D Open Viewer and the ACIS(R) Healing Husk. Further, research and development expense in the second quarter of 1997 included a $200,000 charge for a write-down of purchased computer software, which was due to a change in the Company's development strategy. Excluding this non-recurring charge of $200,000, research and development expense increased 30% and 23% for the three and six month periods ended June 30, 1998, respectively, as compared to the comparable periods in 1997. As a percent of total revenue, research and development expense decreased to 39% and 40% for the three and six month periods ended June 30, 1998, respectively, from 51% and 47% for the comparable prior year periods, respectively. The Company accounts for research and development expense in accordance with Statement of Financial Accounting Standards ("SFAS") No. 86, under which the Company is required to capitalize software development costs after technological feasibility is established. Capitalizable software development costs incurred to date have not been significant; therefore, the Company has expensed all of these costs in the periods incurred. General and administrative expense decreased 32% to $556,000 for the quarter ended June 30, 1998 from $820,000 reported for the same quarter in 1997. For the six month period ended June 30, 1998 general and administrative expense decreased 32% to $953,000 from $1.4 million reported for the comparable prior year period. Decreased general and administrative expense was due to a decrease in staffing and lower professional fees in 1998 as compared to 1997. In addition, general and administrative expense in the second quarter of 1997 included a charge of approximately $198,000 in connection with expenses associated with the resignation of the former president of the Company. Excluding these non-recurring charges, general and administrative expense decreased 11% and 20% for the three and six month periods ended June 30, 1998, respectively, as compared to the comparable periods in 1997. As a percent of total revenue, general and administrative expense decreased to 18% and 17% for the three and six month periods ended June 30, 1998, respectively, as compared to 38% and 33% for the comparable prior year periods, respectively. 8 9 Other Income (Expense), net Other income decreased to $62,000 for the second quarter of 1998 as compared to $99,000 reported for the second quarter of 1997 and to $126,000 for the six month period ended June 30, 1998 from $204,000 for the comparable prior year period. Decreased other income reflects lower interest income, as a result of lower cash balances in 1998 as compared to 1997. Income Tax Expense Income tax expense increased to $24,000 for the fiscal quarter ended June 30, 1998 as compared to a benefit of $7,000 reported for the same quarter in 1997. The benefit recognized in 1997 reflects an adjustment for actual payments less than originally accrued for contracts executed in prior periods. For the six month period ended June 30, 1998 income tax expense increased to $116,000 from $21,000 for the same period in 1997 due primarily to income tax liabilities in Japan. Historically, income tax expense included only withholding taxes on foreign sales. Beginning in 1998, the Company began incurring an income tax liability for its Japanese subsidiary. FLUCTUATIONS IN QUARTERLY RESULTS The Company has experienced in the past and expects to continue to experience in the future significant fluctuations in quarterly operating results due to a number of factors that are difficult to forecast, including, among others, the volume of orders received within a quarter, demand for the Company's products, the product mix purchased by the Company's customers, competing capital budget considerations of the Company's customers, introduction and enhancement of products by the Company and its competitors, market acceptance of new products, reviews in the industry press concerning the products of the Company or its competitors, changes or anticipated changes in pricing by the Company or its competitors and general economic conditions. Due to the foregoing factors, it is possible that the Company's operating results for some future quarters may fall below the expectations of securities analysts and investors. YEAR 2000 CAPABILITY Many currently installed computer systems and software products are coded to accept only two digit entries in the date code field. These date code fields will need to accept four digit entries to distinguish 21st century dates from 20th century dates. As a result, in less than two years, computer systems and/or software used by many companies may need to be upgraded to comply with such "Year 2000" requirements. The Company has evaluated Year 2000 compliance issues and believes that with respect to the Company's products and internal management information systems it will not be materially adversely impacted by such issues. The Company's software products do not incorporate date-sensitive algorithms. Any date codes contained in the Company's software do not affect the functionality of the products. The Company also incorporates third party software with its core product. The Company has concluded that any date codes contained in such third party software will not materially adversely impact the Company's products. In addition, the Company has evaluated whether its management information systems are Year 2000 compliant and has concluded that they are. Moreover, the number of transactions that the Company manages is relatively low because it depends on low volume, high value orders. As a result, the Company believes that any date-sensitive material contained in its software would not have a material adverse effect on the Company's management information systems software. However, to the extent that any of the Company's foregoing assessments are incorrect, there can be no assurance that the cost necessary to update the performance of software will not have a material adverse effect on the Company's business, financial condition and results of operations. Moreover, there can be no assurance that Year 2000 compliance issues affecting the Company's customers products and internal management information systems will not have a material adverse effect on the Company's business, financial condition and results of operations. As an OEM provider the 9 10 Company's products may be incorporated directly into its customers' products, which may contain date-sensitive processes that may affect the ability of the Company's customers to sell end-user products. LIQUIDITY AND CAPITAL RESOURCES As of June 30, 1998, the Company had $4.6 million in cash and cash equivalents. Cash and cash equivalents decreased $1.1 million for the six months ended June 30, 1998, as compared to $1.5 million for the comparable prior year period. Net cash used by operating activities was $902,000 for the six month period ended June 30, 1998 as compared to $1.2 million for the six month period ended June 30, 1997. Net cash used by operations in 1998 was primarily the result of increased accounts receivable and decreased accrued expenses, partially offset by increased deferred revenue. Cash used by operations in the six month period ended June 30, 1997 was primarily due to the net loss, combined with an increase in accounts receivable, partially offset by the non-cash write-down of purchased computer software and increased accrued expenses. Net cash used by investing activities totaling $280,000 for the six month period ended June 30, 1998 reflects $179,000 used for equipment purchases and $101,000 used for purchased computer software, including technology included in certain new product offerings during 1998. Cash used for the comparable period in 1997 totaling $419,000 reflects equipment purchases. Net cash provided by financing activities was $83,000 for the six months ended June 30, 1998, due to proceeds in connection with the Company's employee stock purchase plan. Net cash provided by financing activities in the six month period ended June 30, 1997 was $188,000 reflecting the issuance of stock in connection with the exercise of stock options, as well as the Company's employee stock purchase plan. In August 1998 the Company amended its revolving line of credit with a bank. The amended line of credit provides for maximum borrowings of $1,500,000 through August 2, 1999. The line of credit bears interest at the bank's prime rate. The Company currently has no borrowings under the line of credit. The Company believes that cash generated from operations, together with existing cash, will be sufficient to meet the Company's operating and capital requirements for the foreseeable future including at least the next twelve months. 10 11 PART II. OTHER INFORMATION Item 1. Legal Proceedings: None Item 2. Changes in Securities: None Item 3. Defaults on Senior Securities: Not Applicable Item 4. Submission of Matters to Vote of Security Holders: The Annual Meeting of the Company's Stockholders was held on May 7, 1998 in Boulder, Colorado for the following purposes: a) To approve amendments to the Company's 1996 Equity Incentive Plan to increase the aggregate number of shares of Common Stock authorized thereunder from 1,000,000 to 1,125,000 and to permit the Company under Section 162(m) of the Internal Revenue Code to continue to be able to deduct as a business expense certain compensation attributable to the exercise of stock options. The following votes were cast by the Company's stockholders with respect to the amendment to the Equity Incentive Plan:
Shares Voted For Shares Voted Against Shares Voted Withheld Abstentions Broker Non-Votes ---------------- -------------------- --------------------- ----------- ---------------- 4,414,734 52,093 0 22,050 0
The foregoing votes resulted in the adoption of such proposal. (b) To approve an amendment to the Company's Employee Stock Purchase Plan to increase the aggregate number of shares of Common Stock authorized for issuance thereunder from 100,000 to 175,000. The following votes were cast by the Company's stockholders with respect to the amendment to the Employee Stock Purchase Plan.
Shares Voted For Shares Voted Against Shares Voted Withheld Abstentions Broker Non-Votes ---------------- -------------------- --------------------- ----------- ---------------- 4,442,627 25,050 0 21,200 0
The foregoing votes resulted in the adoption of such proposal. (c) To ratify the selection of KPMG Peat Marwick LLP as the Company's independent auditors for the fiscal year ending December 31, 1998. The following votes were cast by the Company's stockholders with respect to the ratification of the Company's auditors:
Shares Voted For Shares Voted Against Shares Voted Withheld Abstentions Broker Non-Votes ---------------- -------------------- --------------------- ----------- ---------------- 4,461,802 5,675 0 21,400 0
The foregoing votes resulted in the adoption of such proposal. Item 5. Other Information: None Item 6. Exhibits and Reports on Form 8-K: a) Exhibits 10.30 Amendment to Loan and Security Agreement between the Registrant and Silicon Valley Bank, dated as of August 15, 1995, as amended. 27 Financial Data Schedule b) Reports on Form 8-K None None 11 12 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SPATIAL TECHNOLOGY INC. Date August 14, 1998 /s/ R. BRUCE MORGAN --------------- ------------------------------------ R. Bruce Morgan President, Chief Operating Officer, and Director (Principal Financial and Accounting Officer) 12 13 EXHIBIT INDEX Exhibits 10.30 Amendment to Loan and Security Agreement between the Registrant and Silicon Valley Bank, dated as of August 15, 1995, as amended. 27 Financial Data Schedule EX-10.30 2 AMENDMENT TO LOAN & SECURITY AGMT 1 EXHIBIT 10.30 AMENDMENT TO LOAN AND SECURITY AGREEMENT This Amendment to Loan and Security Agreement is entered into as of August 3, 1998 by and between Silicon Valley Bank ("Bank") and Spatial Technology Inc. ("Borrower"). RECITALS Borrower and Bank are parties to an Amended and Restated Loan and Security Agreement dated as of August 15, 1995, as amended from time to time (the "Agreement"). The parties desire to amend the Agreement in accordance with the terms of this Amendment. NOW, THEREFORE, the parties agree as follows: 1. The following definitions contained in Section 1.1 are amended to read as follows: "Committed Line" means One Million Five Hundred Thousand Dollars ($1,500,000). "Revolving Maturity Date" means August 2, 1999. 2. Section 2.3(a) is amended to read as follows: (a) Interest Rate. Except as set forth in Section 2.3(b), any Advances shall bear interest, on the average Daily Balance, at a rate equal to the Prime Rate. 3. Section 6.3 is amended to read as follows: 6.3 Financial Statements, Reports, Certificates. Borrower shall deliver to Bank: (a) as soon as available, but in any event within forty-five (45) days after the end of each fiscal quarter, a company prepared balance sheet and income statement covering Borrower's consolidated operations during such period, certified by a Responsible Officer; (b) as soon as available, but in any event within ninety (90) days after the end of Borrower's fiscal year, audited consolidated financial statements of Borrower prepared in accordance with GAAP, consistently applied, together with an unqualified opinion on such financial statements of an independent certified public accounting firm reasonably acceptable to Bank; (c) within five (5) days upon becoming available, copies of all statements, reports and notices sent or made available generally by Borrower to its security holders or to any holders of Subordinated Debt and all reports on Form 10-K and 10-Q filed with the Securities and Exchange Commission; (d) promptly upon receipt of notice thereof, a report of any legal actions pending or threatened against Borrower or any Subsidiary that could result in damages or costs to Borrower or any Subsidiary of One Hundred Thousand Dollars ($100,000) or more; (e) prompt notice of any material change in the composition of the Intellectual Property Collateral, including, but not limited to, any subsequent ownership right of the Borrower in or to any Copyright, Patent or Trademark not specified in any intellectual property security agreement between Borrower and Bank or knowledge of an event that materially adversely effects the value of the Intellectual Property Collateral; and (f) such budgets, sales projections, operating plans or other financial information as Bank may reasonably request from time to time. Borrower shall deliver to Bank with the quarterly financial statements a Compliance Certificate signed by a Responsible Officer in substantially the form of Exhibit D hereto. 4. Sections 6.9 and 6.10 are amended to read as follows: 6.9 Tangible Net Worth. Borrower shall maintain, as of the last day of each fiscal quarter, a Tangible Net Worth of not less than Four Million Five Hundred Thousand Dollars ($4,500,000). 6.10 Profitability. Borrower must have a net profit of at least One Dollar ($1.00) as of the last day of the fiscal year, provided however, that beginning with the fiscal quarter ended June 30, 1998, Borrower may not suffer a cumulative 2 net loss in the aggregate amount of Five Hundred Thousand Dollars ($500,000) or more for the four (4) consecutive fiscal quarters through June 30, 1999. 5. Section 6.12 is deleted in its entirety. 6. Unless otherwise defined, all capitalized terms in this Amendment shall be as defined in the Agreement. Except as amended, the Agreement remains in full force and effect. 7. Borrower represents and warrants that the Representations and Warranties contained in the Agreement are true and correct as of the date of this Amendment (except such representations and warranties to be expressly true as of a specific date), and that no Event of Default has occurred and is continuing. 8. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. 9. As a condition to the effectiveness of this Amendment, Borrower shall pay Bank a fee of Four Thousand Dollars ($4,000) plus all Bank Expenses incurred in connection with the preparation of this Amendment. IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written. SPATIAL TECHNOLOGY INC. By: /s/ R. BRUCE MORGAN --------------------------------------- Title: President & Chief Operating Officer ----------------------------------- SILICON VALLEY BANK By: /s/ FRANK AMOROSO --------------------------------------- Title: Assistant Vice President ----------------------------------- EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS DEC-31-1998 JAN-01-1998 JUN-30-1998 4,625 0 3,422 (66) 0 8,374 3,277 (2,142) 10,200 3,120 0 0 0 78 7,002 10,200 0 5,532 0 276 5,409 15 126 (42) 116 (158) 0 0 0 (158) (.02) (.02)
-----END PRIVACY-ENHANCED MESSAGE-----