-----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, O4OHtfl3qK1RYqmZyajaciCJW9b9tVx6yfw2tA/7jLOdGG0h7WaUBYFOZvrm9s8M LdXVYUp7QETw2yUC/VvjRQ== 0000950109-96-003754.txt : 19960629 0000950109-96-003754.hdr.sgml : 19960629 ACCESSION NUMBER: 0000950109-96-003754 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960328 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960611 DATE AS OF CHANGE: 19960627 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DATAWARE TECHNOLOGIES INC CENTRAL INDEX KEY: 0000875942 STANDARD INDUSTRIAL CLASSIFICATION: 7372 IRS NUMBER: 061232140 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-21860 FILM NUMBER: 96579754 BUSINESS ADDRESS: STREET 1: 222 THIRD ST CITY: CAMBRIDGE STATE: MA ZIP: 02142 BUSINESS PHONE: 6176210820 8-K/A 1 FORM 8-K/A SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K/A AMENDMENT TO FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 AMENDMENT NO. 1 Date of Report (Date of earliest event reported): March 28, 1996 Dataware Technologies, Inc -------------------------- (Exact name of registrant as specified in its charter) Delaware 0-21860 06-1232140 - - ------------------------------------------------------------------------------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File number) Identification No.) 222 Third Street, Cambridge MA 02142 - - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (617) 621-0820 ----------------------------- 1 The undersigned registrant hereby amends the following items, financial statements, exhibits or portions of its Current Report on Form 8-K (Date of Report: January 10, 1996) as set forth in the pages attached hereto: ITEM 7. Financial Statements and Exhibits (a) Financial Statements of Business Acquired ----------------------------------------- This item is amended to include the following: 1. Report of Independent Accountants 2. Balance Sheets at March 28, 1996 (unaudited), March 31, 1995 and January 31, 1994 and 1993 3. Statements of Operations for the period from April 1, 1995 to March 28, 1996 (unaudited), February 1, 1994 to March 31, 1995 and for the years end January 31, 1994 and 1993 4. Statements of Stockholders' Equity for the period from April 1, 1995 to March 28, 1996 (unaudited), February 1, 1994 to March 31, 1995 and for the years ended January 31, 1994 and 1993 5. Statements of Cash Flow for the period from April 1, 1995 to March 28, 1996 (unaudited), February 1, 1994 to March 31, 1995 and for the years ended January 31, 1994 and 1993 6. Notes to Financial Statements for the period from April 1, 1995 to March 28, 1996 (unaudited), February 1, 1994 to March 31, 1995 and for the years ended January 31, 1994 and 1993 (b) Pro Forma Financial Information ------------------------------- 1. Introductory Information 2. Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 1995 3. Unaudited Pro Forma Consolidated Statement of Operations for the year ended December 31, 1995 4. Notes to Unaudited Pro Forma Consolidated Financial Statements (c) Exhibits: None Status/IQ Limited (formerly Harwell Computer Power Limited) Annual report for the year ended 31 January 1994 Pages Directors and advisers 1 Directors' report 2 Report of the auditors 5 Profit and loss account 6 Balance sheet 7 Cash flow statement 8 Notes to the financial statements 10 Status/IQ Limited (formerly Harwell Computer Power Limited) Directors and advisers Directors Registered auditors C T Edge (Chairman) Coopers & Lybrand A R Lowrey 9 Greyfriars Road J Tuck Reading Berkshire RG1 1JG Secretary and registered office Bankers R J Rosedale Barclays Bank plc Sutton House Marcham Road 174 Milton Park Abingdon Abingdon Oxon OX14 1UB OX14 4SE Status/IQ Limited (formerly Harwell Computer Power Limited) Directors' report for the year ended 31 January 1994 The directors present their report and the audited financial statements for the year ended 31 January 1994. Change of name On 1 February 1994 the company changed its name from Harwell Computer Power Limited to Status/IQ Limited. Principal activities The principal activity of the company is unchanged from last year, and is the marketing and technical support of computer software and computer technology in the field of information management, or text retrieval, and the development of new products and related consultancy services. Review of business and future developments The company made an operating profit of (POUNDS)73,000 before research and development costs which gave rise to an overall loss of (POUNDS)406,000 for the year. These overall losses continued for the first half of the new financial year. However, following the appointment of a new Chairman and management team, the company has undergone a thorough reappraisal. Further significant investment funds have been raised enabling the company to further exploit its products strengths and market position. This was completed in early November. The company continues to develop its product base. UK sales growth is being maintained and overseas sales are particularly strong since the release of foreign language versions of the company's products. The company is trading profitably and has good prospects for continuing to do so. The company will continue to capitalise on its commercial strengths and to invest in a new generation of information retrieval software. Status/IQ Limited (formerly Harwell Computer Power Limited) Directors The directors who served during the year were as follows: P B Plant (Chairman) (appointed 16 September 1993) J M T Dawson P I Groves (Mrs)(resigned 5 November 1993) D J Kendall (resigned 30 July 1993) K A B Payne (resigned 18 May 1993) R G Sowden (resigned 30 September 1993) Since the year end the following changes have taken place: On 23 June 1994 Ms M Towner was appointed a director and resigned on 12 August 1994 On 6 July 1994 Mr C T Edge was appointed Chairman and Mr P B Plant resigned as a director On 22 July 1994 Mr A R Lowrey was appointed a director On 13 September 1994 Mr J M T Dawson resigned as a director On 6 December 1994 Mr J Tuck was appointed a director Directors' interests None of the directors serving at 31 January 1994 had any interest in the share capital of the company at that date. Insurance of directors The company maintains insurance for the directors in respect of their duties as directors. Directors' responsibilities The directors are required by UK company law to prepare financial statements for each financial year that give a true and fair view of the state of affairs of the company as at the end of the financial year and of the profit or loss for that period. The directors confirm that suitable accounting policies have been used and applied consistently and reasonable and prudent judgements and estimates have been made in the preparation of the financial statements for the year ended 31 January 1994. The directors also confirm that applicable accounting standards have been followed and that the financial statements have been prepared on the going concern basis for the reasons set out in note 20. The directors are responsible for keeping proper accounting records, for taking reasonable steps to safeguard the assets of the company and to prevent and detect fraud and other irregularities. Status/IQ Limited (formerly Harwell Computer Power Limited) Auditors A resolution to reappoint the auditors, Coopers & Lybrand, will be proposed at the annual general meeting. By order of the board R J ROSEDALE Secretary 31 January 1995 Report of the auditors to the members of Status IQ Limited (formerly Harwell Computer Power Limited) We have audited the financial statements on pages 6 to 21. Respective responsibilities of directors and auditors As described on page 3 the company's directors are responsible for the preparation of financial statements. It is our responsibility to form an independent opinion, based on our audit, on those statements and to report our opinion to you. Basis of opinion We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the company's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. Basis of preparation of financial statements The financial statements have been prepared on a going concern basis. In forming our opinion we have considered the adequacy of disclosures made in note 20 to the financial statements regarding financing. In view of the significance of the uncertainty referred to therein we consider that note 20 should be drawn to your attention but our opinion is not qualified in this respect. Opinion In our opinion the financial statements give a true and fair view of the state of the company's affairs at 31 January 1994 and of its loss and cash flows for the year then ended and have been properly prepared in accordance with the Companies Act 1985. Coopers & Lybrand Chartered Accountants and Registered Auditors Reading 22 February 1995 Status/IQ Limited (formerly Harwell Computer Power Limited) Profit and loss account for the year ended 31 January 1994 Notes 1994 1993 (pounds) (pounds) Continuing operations Turnover 2 1,874,299 1,610,155 Exceptional income 3 -- 151,000 Operating expenses 4 (2,270,190) (1,807,008) ----------- ----------- Operating loss (395,891) (45,853) Interest (expense)/income 5 (10,522) 6,666 ---------- ----------- Loss on ordinary activities before taxation 6 (406,413) (39,187) Tax on ordinary activities 9 -- 6,888 ----------- ----------- Loss for the financial year 16 (406,413) (32,299) =========== ===========
The company has no recognised gains and losses other than the losses shown above and therefore no separate statement of total recognised gains and losses had been presented. There is no difference between the loss on ordinary activities before taxation and the retained loss for the year stated above, and their historical cost equivalents. Status/IQ Limited (formerly Harwell Computer Power Limited) Balance sheet at 31 January 1994 1994 1993 Notes (pounds) (pounds) Fixed assets Tangible assets 10 194,473 217,420 Investment in subsidiary 11 2 2 --------- --------- 194,475 217,422 --------- --------- Current assets Debtors 12 603,441 671,289 Cash at bank and in hand 300,109 141,420 --------- --------- 903,550 812,709 --------- --------- Creditors: amounts falling due within one year 13 (928,839) (582,979) --------- --------- Net current (liabilities)/assets (25,289) 229,730 --------- --------- Total assets less current liabilities 169,186 447,152 --------- -------- Creditors: amounts falling due after more than one year 14 (133,751) (5,304) --------- --------- Net assets 35,435 441,848 ========= ========= Capital and reserves Called up share capital 15 1,550,000 1,550,000 Profit and loss account (deficit) 16 (1,514,565) (1,108,152) ---------- ---------- Shareholders' funds 35,435 441,848 ========== ==========
The financial statements on pages 6 to 21 were approved by the board of directors on 31 January 1995 and were signed on its behalf by: A R LOWREY C T EDGE Director Director Status/IQ Limited 8 (formerly Harwell Computer Power Limited) Cash flow statement for the year ended 31 January 1994
Note 1994 1993 (Pounds) (Pounds) Net cash outflow from operating activities (187,067) (20,149) --------- -------- Returns on investments and servicing of finance Interest received 1,199 16,738 Interest paid (10,726) (8,502) Interest paid on finance leases (995) (1,570) --------- -------- Net cash (outflow)/inflow from returns on investments and servicing of finance (10,522) 6,666 --------- --------- Taxation Corporation tax recovered/(paid) 6,888 (6,888) -------- -------- Investing activities Purchase of tangible fixed assets (60,881) (52,693) Sale of tangible fixed assets 2,168 3,500 ---------- -------- Net cash outflow from investing activities (58,713) (49,193) ---------- --------- Net cash outflow before financing (249,414) (69,564) --------- --------- Financing Issue of debentures 175,000 - Other loans 204,286 - Repayment of loan - (50,000) Payment of principal under finance leases (4,872) (4,243) -------- ---------- Net cash inflow/(outflow) from financing 374,414 (54,243) -------- ---------- Increase/(decrease) in cash and cash equivalents 18 125,000 (123,807) ======= =======
Status/IQ Limited (formerly Harwell Computer Power Limited) Reconciliation of operating loss to net cash outflow from operating activities
1994 1993 (Pounds) (Pounds) Operating loss (395,891) (45,853) Depreciation of tangible fixed assets 82,050 83,693 (Profit)/loss on sale of fixed assets (390) 2,245 Decrease/(increase) in debtors 60,960 (7,851) Increase/(decrease) in creditors 66,204 (52,383) ------- ------ Net cash outflow from operating activities (187,067) (20,149) ------- ------ ------- ------
Status/IQ Limited (formerly Harwell Computer Power Limited) Notes to the financial statements for the year ended 31 January 1994 1 Principal accounting policies The financial statements have been prepared in accordance with applicable Accounting Standards in the United Kingdom. A summary of the more important accounting policies which have been applied consistently, is set out below. Basis of accounting and consolidation The financial statements are prepared in accordance with the historical cost convention. The financial statements of the subsidiary have not been consolidated because the amounts involved are not material, and to do so would be of no real value to shareholders. Research and development Research and development expenditure is written off in the period it is incurred where it does not meet the accepted criteria for deferral to future periods. Tangible fixed assets Tangible fixed assets are stated at their purchase cost, and are depreciated over their estimated useful lives at the following annual rates of depreciation provided on a straight line basis: Office equipment and furniture 10%-33% Computer hardware 20% Computer software 33% Finance and operating leases Costs in respect of operating leases are charged on a straight line basis over the lease term. Leasing agreements which transfer to the company substantially all the benefits and risks of ownership of an asset, are treated as if the asset had been purchased outright. The assets are included in fixed assets and the capital element of the leasing commitments is shown as obligations under finance leases. The lease rentals are treated as consisting of capital and interest elements. The capital element is applied to reduce the outstanding obligations and the interest element is charged against profit in proportion to the reducing capital element outstanding. Assets held under finance leases depreciated over the shorter of the lease terms and the useful lives of equivalent owned assets. Status/IQ Limited (formerly Harwell Computer Power Limited) Foreign currency amounts Transactions denominated in foreign currencies are translated into sterling at exchange rates ruling at the date of the transactions. Foreign currency assets and liabilities are translated into sterling at the rates ruling at the date of the balance sheet. All exchange differences are taken to the profit and loss account in the year in which they arise. Turnover Income (exclusive of value added tax) is recognised on the following bases: Direct software sales are recognised when a program is delivered and invoiced, a licence agreement has been signed where appropriate and, where applicable, the program has been accepted by the customer. Royalty income from distributors is recognised on the basis of returns made by distributors for the grant of sub-licences within the relevant financial period. Maintenance income is recognised by reference to the period over which it is earned, future income being carried forward as deferred revenue. Consultancy and other income is recognised over the period over which it is earned in a manner appropriate to the risk and stage of completion of each contract. Deferred taxation Deferred taxation, computed under the liability method, is provided for to the extent that it is probable that a liability will crystallise. Contributions to pension funds Charges to the profit and loss account in respect of contributions are made in accordance with the recommendations of actuaries. 2 Turnover The analysis of turnover by geographical area has not been given. Status/IQ Limited (formerly Harwell Computer Power Limited) 3 Exceptional income
1994 1993 (pounds) (pounds) Communication of future royalty income -- 90,000 Compensation for cancellation of a trading agreement -- 61,000 ---------- --------- -- 151,000 ========== =========
4 Operating expenses
1994 1993 (pounds) (pounds) Distribution and marketing costs 830,495 699,005 Administrative expenses 960,255 656,003 Research and development costs 479,440 452,000 ---------- ---------- 2,270,190 1,807,008 ========== ==========
5 Interest (expense)/income
1994 1993 (pounds) (pounds) Bank interest receivable 1,199 16,738 Less: Interest payable On bank overdraft repayable within 5 years not by installments (4,684) (1,210) On medium term loan repayable within 5 years by installments (1,250) (7,292) On loan stock (4,792) -- On finance leases (995) (1,570) ---------- ---------- Interest/(expense) income (10,522) 6,666 ========== ==========
Status/IQ Limited (formerly Harwell Computer Power Limited) 6 Loss on ordinary activities before taxation Loss on ordinary activities before taxation is stated after charging:
1994 1993 (Pounds) (Pounds) Depreciation of tangible fixed assets 82,050 83,693 Auditors' remuneration - for audit 13,750 10,750 - for other services 4,763 18,189 Hire of plant and machinery - operating leases 116,036 97,142 Hire of other assets - operating leases 77,233 88,400
7 Directors' emoluments The remuneration of the directors (including pension contributions) comprises:
1994 1993 (Pounds) (Pounds) Fees 22,500 12,035 Other emoluments 132,962 156,388 Compensation for loss of office 7,500 -- -------- -------- 162,962 168,423 ======== ========
Remuneration includes amounts paid to shareholder representatives and third parties for making available the services of persons as directors. Fees and other emoluments (excluding pension contributions) include amounts paid to:
1994 1993 (Pounds) (Pounds) The chairmen 35,000 9,805 ======== ======== The highest-paid director 45,317 56,503 ======== ========
Status /IQ Limited (formerly Harwell Computer Power Limited) 7 Directors' emoluments - continued The number of directors (including the chairmen and highest paid director) who received fees and emoluments (excluding pension contributions) in the following ranges was:
1994 1993 Number Number (pounds)0 to (pounds)5,000 -- 3 (pounds)5,001 to (pounds)10,000 2 2 (pounds)15,001 to (pounds)20,000 1 -- (pounds)20,001 to (pounds)25,000 1 -- (pounds)25,001 to (pounds)30,000 1 (pounds)40,001 to (pounds)45,000 2 (pounds)45,001 to (pounds)50,000 1 -- (pounds)55,001 to (pounds)60,000 1
8 Employee information
1994 1993 Number Number Average weekly number of persons (including executive directors) employed during the year 30 34 == ==
1994 1993 (pounds) (pounds) Staff costs (for the above persons): Wages and salaries 762,772 752,925 Social security costs 76,022 89,788 Other pension costs (see note 23) 42,501 45,931 -------- -------- 881,295 888,644 ======== ========
Status/IQ Limited (formerly Harwell Computer Power Limited) 9 Tax on ordinary activities
1994 1993 (pounds) (pounds) United Kingdom corporation tax at 33% (1993: 33%) Current -- 6,888 -------- -------- Credit for the year -- 6,888 ======== ========
At 31 January 1994 unabsorbed tax losses (which are subject to agreement with the Inland Revenue) estimated to amount to (pounds)825,000 (1993: (pounds)445,000) are carried forward for future relief against profits from the same trade. There is no actual or potential liability for deferred taxation at 31 January 1994 or 1993, timing differences at those dates resulting in unrecognised assets. 10 Tangible fixed assets
Office equipment Computer and furniture equipment Total (pounds) (pounds) (pounds) Cost At 1 February 1993 182,695 434,327 617,022 Additions 10,302 50,579 60,881 Disposals (50,455) (50,455) ------- ------- ------- At 31 January 1994 192,997 434,451 627,448 ------- ------- ------- Depreciation At 1 February 1993 93,560 306,042 399,602 Charge for year 23,322 58,728 82,050 Disposals -- (48,677) (48,677) ------- ------- ------- At 31 January 1994 116,882 316,093 432,975 ------- ------- ------- Net book value At 31 January 1994 76,115 118,358 194,473 ======= ======= ======= At 31 January 1993 89,135 128,285 217,420 ======= ======= =======
The net book value of tangible fixed assets includes an amount of (pounds)5,433 (1993: (pounds)11,744) in respect of assets held under finance leases. Status/IQ Limited (formerly Harwell Computer Power Limited) 11 Investment in subsidiary company
1994 1993 (Pounds) (Pounds) Shares at cost 2 2 ======== ========
The company owns the whole of the issued share capital of Harwell Computer Research Limited, which is incorporated in the United Kingdom. The subsidiary is not consolidated because it is dormant, and its net assets only amount to (Pounds)2. 12 Debtors
1994 1993 (Pounds) (Pounds) Amounts falling due within one year Trade debtors 497,110 573,498 Prepayments and accrued income 106,331 90,903 Corporation tax recoverable -- 6,888 -------- -------- 603,441 671,289 ======== ========
13 Creditors: amounts falling due within one year
1994 1993 (Pounds) (Pounds) Bank overdraft (secured) 33,689 -- Debenture loans (secured) 175,000 -- Other loans 95,535 25,000 Obligations under finance leases 5,049 4,617 Trade creditors 124,540 202,087 Other taxation and social security payable 137,491 67,622 Other creditors 151,795 97,580 Deferred revenue 205,740 186,073 -------- -------- 928,839 582,979 ======== ========
Status/IQ Limited (formerly Harwell Computer Power Limited) 13 Creditors: amounts falling due within one year-continued The bank overdraft and debenture loans are secured by fixed and floating charges over the assets of the company. Debenture loans were redeemable at par on 31 August 1994 and bore interest at 10% per annum. Since the year end the debenture holders have confirmed to the company that it is not their intention to enforce repayment of the principal (including a further (Pounds)75,000 taken up after the year end) up to 31 December 1995 and that payment of interest will only be requested subject to there being sufficient liquid cash flow. However, they expressly reserve their rights under the Trust Deed to make immediate demand in respect of all monies and liabilities owing upon the happening of any other specified event of default under the Trust Deed and additionally reserve these rights in the event of a sale of 30% or more of the issued share capital. Other loans, including those that fall due after more than one year (see also note 14), which were owed to a former shareholder, were repayable in twelve equal monthly instalments of (Pounds)19,107 commencing on 7 September 1994 and bore interest at 2% above National Westminster Bank plc's base rate. Since the year end these loans have been waived. 14 Creditors: amounts falling past due after more than one year
1994 1993 (Pounds) (Pounds) Other loans owed to a former shareholder (repayable between one and two years) 133,751 - Obligations under finance losses - 5,304 ------- ----- 133,751 5,304 ======= ===== The net finance lease obligations to which the company is committed are: 1994 1993 (Pounds) (Pounds) In one year or less 5,049 4,617 Between one and two years - 5,304 ----- ----- 5,049 9,921 ===== =====
Status/IQ Limited (formerly Harwell Computer Power Limited) 15 Called-up share capital
1994 1993 (Pounds) (Pounds) Authorised Ordinary shares of (pounds)1 each 900,000 900,000 Cumulative redeemable preference shares of (pounds)1 each 1,100,000 1,100,000 --------- --------- 2,000,000 2,000,000 ========= ========= Alloted, called up and fully paid Ordinary shares of (Pounds)1 each 450,000 450,000 Cumulative redeemable preference shares of (Pounds)1 each 1,100,000 1,100,000 --------- --------- 1,550,000 1,550,000 ========= =========
The company shall be entitled to redeem at par all or any of the preference shares. The preference shares in issue of (pounds)1,100,000 were due for redemption on 31 December 1993 but have been carried forward for redemption at an appropriate time without affecting the adequacy of working capital. In each year commencing 1 August 1989 the holders of preference shares shall be entitled to be paid out of the profits of the company available for dividend a fixed preferential dividend of 10% per annum in priority to any other shareholders, such dividend being paid half yearly, the first payment falling due on 31 January 1990. Due to insufficiency of profits available for dividend these could not be paid, and therefore the cumulative arrears of dividend at 31 January 1994 amounted to (pound)605,428 (1993:(pound)446,873). 16 Profit and loss account (deficit)
(pounds) At 1 February 1993 (1,108,152) Loss for the year (406,413) ---------- At 31 January 1994 (1,514,565) =========
Status/IQ Limited (formerly Harwell Computer Power Limited) 17 Reconciliation of movements in shareholders' funds
1994 1993 (pounds) (pounds) Opening shareholders' funds 441,848 474,147 Loss for the financial year (406,413) (32,299) ------- ------- Closing shareholders' funds 35,435 441,848 ======= =======
18 Cash at bank and in hand
1994 1993 (pounds) (pounds) Changes during the year: At 1 February 1993 141,420 265,227 Net cash inflow/(outflow) 125,000 (123,807) ------- ------- At 31 January 1994 266,420 141,420 ------- -------
19 Analysis of changes in financing during the year
1994 1993 Loans and Loans and finance lease finance lease obligations obligations (pounds) (pounds) At 1 February 1993 34,921 89,164 Repayments of principal on finance leases (4,872) (4,243) Loan repayments - (50,000) Loans advanced 379,286 - ------- ------- At 31 January 1994 409,335 34,921 ======= ======
20 Financing As set out in Note 13, since the year end the debenture holders have confirmed their intention not to seek repayment of the principal of (pounds)250,000 up to 31 December 1995 and to defer requests for payment of interest. Both principal and interest are repayable on demand only in certain circumstances. Other loans amounting to (pounds)229,286 have been waived. A new (pounds)190,000 20% 1996 debenture stock facility has been taken up to provide additional working capital, of which (pounds)120,000 has been drawn to date. The company meets its day to day working capital requirements through debenture stock and an overdraft facility (which is repayable on demand) which has been agreed through to 31 January 1996. Status/IQ Limited (formerly Harwell Computer Power Limited) 20 Financing-continued The company is operating within these agreed overall facilities and the directors, on the basis of cashflow projections, expect it to be able to continue doing so for the next twelve months. However, the margin of facilities over requirements in the short term is not large. Whilst the directors recognise this, based on the company's plans and continued deferment of debenture repayments, they consider it appropriate to prepare the financial statements on the going concern basis. The financial statements do not include any adjustments that would result from a withdrawal of the overdraft facility by the company's bankers or a demand for immediate repayment of the debenture loan of (pounds)250,000 and accrued interest. 21 Capital commitments
1994 1993 (pounds) (pounds) Capital expenditure that has been contracted for but has not been provided for in the financial statements 15,000 - ======== ======= Capital expenditure that has been authorised by the directors but has not yet been contracted for 248,000 - ======= =======
22 Pension commitments The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension scheme charge represents contributions payable by the company to the scheme and amounted to (pounds)42,501(1993:(pounds)45,931). No contributions were payable to the scheme at either year end. Status/IQ Limited (formerly Harwell Computer Power Limited) 23 Financial commitments
At 31 January 1994 the company had annual commitments under non-cancellable operating leases as follows: 1994 1993 Land and Other Land and Other buildings buildings (Pounds) (Pounds) (Pounds) (Pounds) Expiring within one year 12,500 27,276 88,400 25,000 Expiring between two and five years inclusive -- 69,356 -- 69,353 --------- -------- --------- -------- 12,500 96,632 88,400 94,353 ========= ======== ========= ========
24 Ultimate parent company The holding company of Status/IQ Limited is Entrust Nominees Limited which holds the shares in Status/IQ Limited on trust for and on behalf of the New Court Ventures Fund. The New Court Ventures Fund is an unauthorised closed end unit trust which is ultimately owned by a number of pension funds. STATUS/IQ LIMITED ----------------- DIRECTORS' REPORT AND ACCOUNTS ------------------------------ FOR THE PERIOD ENDED -------------------- 31ST MARCH 1995 --------------- M. J. Ventham & Co., CHARTERED ACCOUNTANTS ----------------------- 63 Lincoln's Inn Fields, London, WC2A 3JX ------------------------ STATUS/IQ LIMITED ----------------- DIRECTORS: C.T. Edge - Chairman (Appointed 6.7.94) - - --------- A.R. Lowrey - (Appointed 22.7.94) J. Tuck - (Appointed 6.12.94) M. Towner - (Appointed 23.6.94, Resigned 12.8.94) P.B. Plant - (Resigned 6.7.94) J.M.T. Dawson - (Resigned 13.9.94) SECRETARY: R.J. Rosedale - - ---------
REGISTERED OFFICE: Sutton House, 174 Milton Park, Abingdon, OX14 4JE. - - ----------------- INDEX -----
Page ---- Directors' Report 1 - 2 Auditors' Report 3 Balance Sheet 4 Profit and Loss Account 5 Cash Flow Statement 6 Notes to the Accounts 7 - 21
STATUS/IQ LIMITED ----------------- DIRECTORS' REPORT ----------------- The directors have pleasure in submitting their annual report and the audited accounts for the period ended 31st March, 1995. DIRECTORS' RESPONSIBILITIES - - --------------------------- Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing those financial statements, the directors are required to: . select suitable accounting policies and then apply them consistently; . make judgements and estimates that are reasonable and prudent; . comply with applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; . prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for maintaining proper accounting records which disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. CHANGES IN PRESENTATION OF THE FINANCIAL STATEMENTS - - --------------------------------------------------- Following the introduction of Financial Reporting Standard No. 4, "Capital Instruments", changes in the presentation of the financial statements have been made to conform with the new requirements. Shareholders' funds have been analysed between equity interests and non-equity interests, and dividends on redeemable preference shares have been accrued for. PRINCIPAL ACTIVITY - - ------------------ The principal activity of the company continued to be that of marketing and technical support of computer software and computer technology in the field of information management, or text retrieval, and the development of new products and related consultancy services. REVIEW OF BUSINESS - - ------------------ A summary of the results of the years trading is given on page 5 of the accounts. The directors are disappointed with the loss for the period. Turnover has risen marginally but restructuring costs have inhibited the profits of the company. There has been a clinical review of the procedures adopted throughout the company with the implementation of measures to improve efficiency in all areas. The last two years have been extremely difficult, but the foundations which have been laid should enable the company to face the future with optimism. -1- STATUS/IQ LIMITED ----------------- DIRECTORS' REPORT ----------------- (Continued) ----------- RESULTS AND DIVIDENDS - - --------------------- The net loss for the period after taxation was (Pounds)586,785 (1994:Loss (Pounds)406,413). This has been taken to reserves. FIXED ASSETS - - ------------ Details of the movements in the company's fixed assets are set out in note 2 of the accounts. INSURANCE EFFECTED FOR OFFICERS - - ------------------------------- The company has maintained professional indemnity insurance for the directors during the period. DIRECTORS' INTERESTS - - -------------------- None of the directors serving at 31st March, 1995 had any interest in the share capital of the company at that date. AUDITORS - - -------- The company's previous auditors, Messrs. Coopers & Lybrand, resigned during the period. Messrs. M.J. Ventham & Co. were appointed to fill the vacancy. They have signified their willingness to continue in office and a resolution to re-appoint them will be proposed at the annual general meeting. Signed on behalf of the board R. J. Rosedale 27th March, 1996 Secretary - - ---------------- --------- -2- STATUS/IQ LIMITED ----------------- AUDITORS' REPORT TO THE SHAREHOLDERS ------------------------------------ We have audited the financial statements on pages 4 to 21 which have been prepared following the accounting policies set out on pages 7 and 8. RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS - - ----------------------------------------------------- As described on page 1, the company's directors are responsible for the preparation of financial statements. It is our responsibility to form an independent opinion, based on our audit, on these statements and to report our opinion to you. BASIS OF OPINION - - ---------------- We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the company's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. Fundamental Uncertainty-Going Concern In forming our opinion, we have considered the adequacy of the disclosures made in the financial statements concerning the going concern position of the company. As stated in note 1A the validity of the company's going concern position is dependent on the financial support and intentions of the potential purchasers of the share capital and debenture stock. If the sale should not proceed then the going concern assumption is dependent on the continued support of the company's bankers and existing debenture holders, together with the ongoing profitability of the company. In view of the significance of these uncertainties we consider that note 1A should be drawn to your attention but our opinion is not qualified in this respect. OPINION - - ------- In our opinion the financial statements give a true and fair view of the state of the company's affairs as at 31st March, 1995 and of its loss for the period then ended and have been properly prepared in accordance with the Companies Act 1985. 27th March, 1996 - - ---------------- M. J. Ventham & Co., 63 Lincoln's Inn Fields, London, CHARTERED ACCOUNTANTS WC2A 3JX. and Registered Auditors - - ----------------------- ----------------------- -3- STATUS/IQ LIMITED ----------------- BALANCE SHEET AS AT 31ST MARCH, 1995 ------------------------------------
Note 1995 1994 ---- ---- ---- FIXED ASSETS - - ------------ Tangible Assets 1D & 2A 211,071 194,473 Investment in Subsidiary 2C 2 2 ------- ------- 211,073 194,475 CURRENT ASSETS - - -------------- Debtors 3 366,576 603,441 Cash at Bank and in Hand 2,372 300,109 ----- ------- 368,948 903,550 CREDITORS:amounts falling 4 (761,371) (928,839) - - --------- ------- ------- due within one year NET CURRENT (LIABILITIES) (392,423) (25,289) - - ------------------------- ------- ------ TOTAL ASSETS LESS CURRENT LIABILITIES (181,350) 169,186 - - ------------------------------------- CREDITORS: amounts falling due - - --------- after more than one year 5 (370,000) (133,751) (pounds)(551,350) (pounds)35,435 ======= ====== CAPITAL AND RESERVES - - -------------------- Called Up Share Capital 9 1,550,000 1,550,000 Profit and Loss Account (2,101,350) (1,514,565) --------- --------- SHAREHOLDERS' FUNDS 19 (pounds)(551,350) (pounds) 35,435 - - ------------------- ------- ------- Analysed As: Equity Interests (2,666,255) (1,669,993) Non-Equity Interests 2,114,905 1,705,428 --------- --------- (pounds)(551,350) (pounds) 35,435 ========= =========
Signed on behalf of the board J. Tuck, Esq. ) ) Directors C. T. Edge, Esq. ) These accounts were approved by the board of directors on 27th March, 1996. -4- STATUS/IQ LIMITED ----------------- PROFIT AND LOSS ACCOUNT ----------------------- FOR THE PERIOD ENDED 31ST MARCH, 1995 -------------------------------------
1.2.94 1.2.93 to to Note 31.3.95 31.1.94 ---- ------- ------- As Restated Turnover 1J & 10 1,941,713 1,874,299 Operating Expenses 11 (2,452,161) (2,270,190) --------- --------- Operating Loss 12 & 13 (510,448) (395,891) Interest Receivable -- 1,199 Interest Payable and Similar Charges 17 (76,337) (11,721) --------- --------- (76,337) (10,522) --------- --------- Loss on Ordinary Activities before Taxation (586,785) (406,413) Taxation 8 -- -- --------- --------- Loss on Ordinary Activities after Taxation (586,785) (406,413) Dividends Attributable to Non-Equity Interests 25 (209,477) (158,555) -------- -------- Loss for the Financial Year 20 (Pounds)(796,262) (Pounds)(564,968) ======== ========
CONTINUING OPERATIONS - - --------------------- None of the company's activities were acquired or discontinued during the above two financial years. TOTAL RECOGNISED GAINS AND LOSSES - - --------------------------------- The company has no recognised gains or losses other than the profit or loss for the above two financial years. 5 STATUS/IQ LIMITED CASH FLOW STATEMENT FOR THE PERIOD ENDED 31ST MARCH 1995 --------------------------------------------------------
1.2.94 1.2.93 to to Note 31.3.95 31.1.94 ---- ------- ------- NET CASH OUTFLOW FROM - - --------------------- OPERATING ACTIVITIES 21 (352,796) (187,067) -------------------- RETURNS ON INVESTMENTS - - ---------------------- AND SERVICING OF FINANCE ------------------------ Interest Received -- 1,199 Interest Paid (6,950) (10,726) Interest Element of Finance Lease Rental Payments (188) (995) -------- -------- NET CASH OUTFLOW FROM - - --------------------- RETURNS ON INVESTMENTS ---------------------- AND SERVICING OF FINANCE (7,138) (10,522) ------------------------ TAXATION - - -------- Corporation Tax Refunded -- 6,888 TAX REFUNDED -- 6,888 - - ------------ INVESTING ACTIVITIES - - -------------------- Purchase of Tangible Fixed Assets (166,246) (60,881) Sale of Tangible Fixed Assets 10,691 2,168 ------- -------- NET CASH OUTFLOW FROM - - --------------------- INVESTING ACTIVITIES (155,555) (58,713) -------------------- -------- -------- NET CASH OUTFLOW BEFORE FINANCING (515,489) (249,414) - - --------------------------------- FINANCING - - --------- Issue of Debentures 195,000 175,000 Other Loans -- 204,286 Finance Lease and Hire Purchase Repayments (5,049) (4,872) ------- -------- NET CASH INFLOW - - --------------- FROM FINANCING 189,951 374,414 -------------- -------- -------- (DECREASE/INCREASE IN CASH - - -------------------------- AND CASH EQUIVALENTS 22,23 (Pounds)(325,538) (Pounds)(125,000) -------------------- ======== ========
STATUS/IQ LIMITED ----------------- NOTES TO THE ACCOUNTS --------------------- 1. ACCOUNTING POLICIES ------------------- (A) These accounts have been prepared under the historical cost convention and in accordance with applicable accounting standards. The financial statements have been prepared on the going concern basis which assumes that the company will continue in operational existence for the foreseeable future having adequate funds to meet its obligations as they fall due. The shareholders are presently in final negotiations with a third party to sell the ordinary and preference share capital together with the debenture stock. The completion is imminent and the company's continued existence is dependent on the future financial support and intentions of the potential purchaser. If the sale should not proceed then the validity of the going concern assumption is dependent on: (i) The continued support of the company's principal bankers and debenture holders, full details of which are shown in note 6. (ii) The cessation of operating losses and a return to profitability. If the company were unable to continue in operational existence, adjustments would have to be made to reduce the balance sheet values of assets to their recoverable amounts and to provide for further liabilities which might arise. Additionally, further adjustments would have to be made to reclassify fixed assets and long term liabilities as current assets and current liabilities respectively. Although the outcome of the matters set out above remains inherently uncertain, the directors have considered the adequacy of working capital facilities available to the company and are satisfied that it is appropriate for the financial statements to be prepared on the going concern basis at this time. Nonetheless, there can be no assurance that the company will not be forced into liquidation. (B) The company has adopted the provisions of FRS 4 "Capital Instruments". Accordingly, the amount of shareholders' funds attributable to equity and non-equity interests has been separately disclosed. A prior year adjustment has been made for the accrued dividend payable on the redeemable preference shares issued by the company and they have been classified as non-equity interests. The dividend payable on the preference shares has been charged to the profit and loss account in accordance with this Standard; and credited to the profit and loss reserve as it will not be paid in the foreseeable future. (C) Research and development expenditure is written off in the period it is incurred where it does not meet the accepted criteria for deferral to future periods. - 7 - STATUS/IQ LIMITED ----------------- NOTES TO THE ACCOUNTS --------------------- (Continued) 1. ACCOUNTING POLICIES - Continued ------------------------------- (D) Depreciation is calculated to write off the cost less estimated residual value of fixed assets on a straight line basis over their estimated useful lives using the following rates per annum:- Office Equipment, Furniture, Fixtures and Fittings 10% - 30% Computer Hardware 20% Computer Software 33% (E) Deferred tax is provided in respect of the tax effect of all timing differences, to the extent that it is probable that a liability or asset will crystallise in the foreseeable future, at the rates of tax expected to apply when the timing differences reverse. (F) Assets obtained under finance leases are capitalised in the balance sheet and are depreciated over the shorter of the lease terms and their useful lives. The capital element of future lease payments is included in creditors and the interest element is charged to the profit and loss account over the period of the leases in proportion to the balance of capital repayments outstanding. Rentals payable under operating leases are charged to the profit and loss account on a straight line basis over the lease terms. (G) Contributions to employees' personal pension schemes are charged to the profit and loss account to the period in which they relate. (H) Transactions denominated in foreign currencies are translated into sterling at exchange rates ruling at the date of the transactions. Foreign currency assets and liabilities are translated into sterling at the date of the balance sheet. All exchange differences are taken to the profit and loss account in the year in which they arise. (I) The accounts present information about Status/IQ Limited as an individual undertaking and not as the parent of a group. The company is exempt under Section 229(2) of the Companies Act 1985 from the requirement to prepare group accounts on the grounds that inclusion is not material. - 8 - STATUS/IO LIMITED ----------------- NOTES TO THE ACCOUNTS --------------------- (Continued) 1. ACCOUNTING POLICIES - Continued ------------------------------- (J) Turnover (exclusive of value added tax and trade discounts) is recognised on the following bases: Direct software sales are recognised when a programme is delivered and invoiced, a licence agreement has been signed where appropriate, and, where applicable, the programme has been accepted by the customer. Royalty income from distributors is recognised on the basis of returns made by distributors for the grant of sub-licences within the relevant financial period. Maintenance income is recognised by reference to the period over which it is earned, future income being carried forward as deferred revenue. Consultancy and other income is recognised over the period over which it is earned in a manner appropriate to the risk and stage of completion of each contract. 2. FIXED ASSETS ------------ (A) TANGIBLE
Office Equipment Furniture, Fixtures & Computer COST Fittings Equipment Total ---- --------------------------- ----- At 1.2.94 192,997 434,451 627,448 Additions 25,978 140,268 166,246 Disposals (121,946) (168,824) (290,770) -------------------------- ------- At 31.3.95 97,029 405,895 (Pounds)502,924 ========================== ======= DEPRECIATION ------------ At 1.2.94 116,882 316,093 432,975 Provided in these Accounts 24,940 76,199 101,139 Provided on Disposals (90,918) (151,343) (242,261) -------------------------- ------- At 31.3.95 50,904 240,949 (Pounds)291,853 ========================== ======= NET BOOK VALUE -------------- At 1.2.94 76,115 118,358 (Pounds)194,473 ========================== ======= At 31.3.95 46,125 164,946 (Pounds)211,071 ========================== =======
-9- STATUS/IO LIMITED ----------------- NOTES TO THE ACCOUNTS --------------------- (Continued) --------- 2. FIXED ASSETS - Continued ------------------------ (A) TANGIBLE - Continued -------------------- The net book value of tangible fixed assets includes items held under finance leases and hire purchase contracts to the sum of (Pounds)Nil (1994:(Pounds)5,433). (B) DEPRECIATION ------------ The charge for the year has been adjusted in respect of the profit on sale of fixed assets. The amount involved is as follows:-
1995 1994 ---- ---- Provided in these Accounts (Note 2A) 101,139 82,050 Loss on Disposal 37,818 (390) ------- ------ (Pounds)138,957 (Pounds)81,660 ======= ======
(C) INVESTMENT IN SUBSIDIARY COMPANY --------------------------------
1995 1994 ---- ---- Shares at Cost (Pounds)2 (Pounds)2 = =
The company owns the whole of the issued share capital of Harwell Computer Power Limited, which is registered in England and Wales. The subsidiary is not consolidated because it is dormant and its net assets amount to (Pounds)2. - 10 - STATUS/IQ LIMITED ----------------- NOTES TO THE ACCOUNTS --------------------- (Continued) --------- 3. DEBTORS -------
1995 1994 ---- ---- Due within one year Trade Debtors 310,603 497,110 Prepayments and Accrued Income 55,973 106,331 ------- ------- (Pounds)366,576 (Pounds)603,441 ======= =======
4. CREDITORS: amounts falling due within one year ----------------------------------------------
1995 1994 ---- ---- Bank Loans and Overdrafts (Note 6) 61,490 33,689 Debenture Loans (Note 6) - 175,000 Other Loans - 95,535 Trade Creditors 229,097 124,540 Other Creditors including Taxation and Social Security:- Other Taxes and Social Security 52,174 137,491 Obligations under Finance Leases and Hire Purchase Contracts (Note 7) - 5,049 Accruals and Deferred Income 418,610 357,535 ------- ------- (Pounds)761,371 (Pounds)928,839 ======= =======
5. CREDITORS: amounts falling due after more than one year -------------------------------------------------------
1995 1994 ---- ---- Other Loans owed to a Former Shareholder (repayable between one and two years) - 133,751 Debenture Loans (Note 6) 370,000 - ------- ------- (Pounds)370,000 (Pounds)133,751 ======= =======
- 11 - STATUS/IQ LIMITED ----------------- NOTES TO THE ACCOUNTS --------------------- (Continued) --------- 6. BANK OVERDRAFT AND DEBENTURE LOANS ---------------------------------- The bank overdraft and debenture loans are secured by fixed and floating charges over the assets of the company. Debenture loans consist of: (Pounds)250,000 10% Redeemable at par on 31st August, 1994 (Pounds)120,000 20% Redeemable at a premium of 16.66% on 9th November, 1996 During the year (Pounds)75,000 of 10% Redeemable debenture stock was issued at par together with (Pounds)190,000 20% Redeemable debenture stock at par of which only (Pounds)120,000 was subscribed to. The holders of the debenture stocks have confirmed to the company that it is not their intention to enforce repayment of the principal up to 31st December, 1996 and that payment of interest will only be requested subject to there being sufficient liquid cash flow. However, they expressly reserve their rights under the Trust Deed to make immediate demand in respect of all monies and liabilities owing upon the happening of any other specified event or default under the Trust Deed, and additionally reserve these rights in the event of a sale of 30% or more of the issued share capital. The present shareholders are currently in discussions with potential buyers and payment of the debenture stock may crystallise prior to 31st December, 1996. Under the draft sale agreement the new shareholders would purchase the existing loan stock and it is considered that repayment would not be sought until 31st December, 1996. As such they have been shown as payable after 31st March, 1996. The bank overdraft has been renewed until 31st January, 1997. Analysis of debt maturity:
1995 1994 ---- ---- Bank Bank Debenture Loans & Debenture Loans & & Other Overdrafts Loans Total Overdrafts Loans Total ---------- ----- ----- ---------- ----- ----- Amounts payable: In one year or less or on demand 61,490 - 61,490 33,689 270,535 304,224 Between one and two years - 370,000 370,000 - 133,751 133,751 ------ ------- ------- ------ ------- ------- 61,490 370,000 (Pounds)431,490 33,689 404,286 (Pounds)437,975 ====== ======= ======= ====== ======= =======
STATUS/IQ LIMITED ----------------- NOTES TO THE ACCOUNTS --------------------- (Continued) ----------- 7. OBLIGATIONS UNDER LEASES AND HIRE PURCHASE CONTRACTS ---------------------------------------------------- (A) Obligations under finance leases and similar hire purchase contracts are as follows:-
1995 1994 ---- ---- Due within one year - 4,861 Less: Finance Charges allocated ---- to future periods - 188 ------------- ------------- (Pounds) - (Pounds)5,049 ============= ============= Hire Purchase Contracts and Finance Leases shown as:- Current Obligations (Note 4) (Pounds) - (Pounds)5,049 ============= =============
(B) The company was committed to make lease payments under operating leases during the twelve months following the period end as follows:-
1.2.94 1.2.93 to to 31.3.95 31.1.94 ------- ------- Land and Land and Buildings Other Buildings Other --------- ----- --------- ----- On leases which expire: Within one year - 41,571 12,500 27,276 In the second to fifth years - - - inclusive 30,600 16,908 - 69,356 ------ ------ ------ ------ 30,600 58,479 (Pounds)12,500 (Pounds)96,632 ====== ====== ====== ======
STATUS/TO LIMITED ----------------- NOTES TO THE ACCOUNTS --------------------- (Continued) --------- 8. TAXATION -------- At 31st March, 1995 the company has substantial tax losses which can be carried forward for future relief from the same trade. There is no actual or potential liability for deferred taxation at 31st March, 1995 or at 31st January, 1994, timing differences at these dates resulting in unrecognised assets. 9. CALLED UP SHARE CAPITAL -----------------------
1995 1994 ---- ---- Authorised ---------- Ordinary Shares of (Pounds)1 each 900,000 900,000 Cumulative Redeemable Preference Shares of (Pounds)1 each 1,100,000 1,100,000 --------- --------- (Pounds)2,000,000 (Pounds)2,000,000 ========= ========= Issued and Fully Paid --------------------- Ordinary Shares of (Pounds)1 each 450,000 450,000 Cumulative Redeemable Preference Shares of (Pounds)1 each 1,100,000 1,100,000 --------- --------- (Pounds)1,550,000 (Pounds)1,550,000 ========= =========
The company is entitled to redeem at par all or any of the preference shares The preference shares in issue of (Pounds)1,100,000 were due for redemption on 31st December, 1993 but have been carried forward for redemption at an appropriate time without affecting the adequacy of working capital. In the event of winding up the company, the preference shares rank first and would be paid the original subscription price plus any arrears of dividend. They have no voting rights. -14- STATUS/IQ LIMITED ----------------- NOTES TO THE ACCOUNTS --------------------- (Continued) ----------- 9. CALLED UP SHARE CAPITAL - Continued ----------------------------------- In each year commencing 1st August, 1989 the holders of preference shares are to be paid out of the profits of the company available for dividend a fixed preferential dividend of 10% per annum in priority to any other shareholders, such dividend being paid half yearly, the first payment having fallen due on 31st January, 1990. Due to insufficiency of profits available for dividend these could not be paid, and therefore the cumulative arrears of dividend at 31st March, 1995 amounted to (Pounds)814,905 (1994: (Pounds)605,428). 10. SEGMENTAL INFORMATION ---------------------
1.2.94 1.2.93 to to 31.3.95 31.1.94 ------- ------- Turnover to: United Kingdom 1,497,726 1,874,299 Rest of Europe 203,052 - Other Markets 240,935 - --------- --------- (Pounds)1,941,713 (Pounds)1,874,299 ========= =========
The turnover, loss after taxation and net liabilities are all attributable to the principal activity. 11. OPERATING EXPENSES ------------------
1.2.94 1.2.93 to to 31.3.95 31.1.94 ------- ------- Distribution Costs 684,964 830,495 Administrative Expenses 1,396,812 960,255 Research and Development Costs 370,385 479,110 --------- --------- (Pounds)2,452,161 (Pounds)2,270,190 ========= =========
- 15 - STATUS/IQ LIMITED ----------------- NOTES TO THE ACCOUNTS --------------------- (Continued) 12. OPERATING RESULT ----------------
This is stated after charging: 1.2.94 1.2.93 to to 31.3.95 31.1.94 ------- ------- Directors' Emoluments (Note 15) 209,200 162,962 Auditors' Remuneration Audit Services 7,700 13,750 -Non-audit Services - 4,763 Depreciation (Note ID & 2B) 138,957 81,660 Operating Lease Rentals -Land and Buildings 111,086 116,036 -Other 115,703 77,233 Research and Development 370,385 479,440 ======= =======
13. EXCEPTIONAL ITEMS ----------------- During the period other loans which were owed to a former shareholder totalling (Pounds)229,286 were waived as part of the company's financial restructuring. Reorganization costs were also incurred totalling (Pounds)103,328. 14. STAFF COSTS -----------
1.2.94 1.2.93 to to 31.3.95 31.1.94 ------- ------- Wages and Salaries 932,584 762,772 Social Security Costs 94,674 76,022 Other Pension Costs (Note 18) 45,483 42,501 --------- -------- (Pounds)1,072,741 (Pounds)881,295 ========= =======
This includes remuneration paid to the directors. -16- STATUS/IQ LIMITED ----------------- NOTES TO THE ACCOUNTS --------------------- (Continued) ----------- 15. DIRECTORS' EMOLUMENTS ---------------------
1.2.94 1.2.93 to to 31.3.95 31.1.94 ------- ------- For Services as Directors 20,440 22,500 For Other Services 188,760 132,962 Compensation for Loss of Office - 7,500 ------- ------- (Pounds)209,200 (Pounds)162,962 ======= =======
Remuneration includes an amount of (Pounds)187,560 paid to shareholder representatives and third parties for making available the services of persons as directors. Analysis, excluding pension scheme contributions:- Chairman (Pounds)65,559 (Pounds)35,000 ====== ====== Highest Paid Director (Pounds)66,549 (Pounds)45,317 ====== ====== Others:-
Number ------ (Pounds)0 - (Pounds)5,000 1 - (Pounds)5,001 - (Pounds)10,000 - 2 (Pounds)15,001 - (Pounds)20,000 2 1 (Pounds)20,001 - (Pounds)25,000 - 1 (Pounds)25,001 - (Pounds)30,000 - 1 (Pounds)30,001 - (Pounds)35,000 1 - (Pounds)45,001 - (Pounds)50,000 - 1 === ===
- 17 - STATUS/IQ LIMITED ----------------- NOTES TO THE ACCOUNTS --------------------- (Continued) ----------- 16. EMPLOYEE INFORMATION -------------------- The average weekly number of persons employed by the company including directors during the period was as follows:-
Number ------ 1.2.94 1.2.93 to to 31.3.95 31.1.94 ------- ------- Management 3 3 Consultants 8 7 Technical and Development 13 11 Administration 3 2 Sales 8 7 --- --- 35 30 == ==
17. INTEREST PAYABLE AND SIMILAR CHARGES ------------------------------------
1.2.94 1.2.93 to to 31.3.95 31.1.94 ------- ------- On bank overdraft repayable within 5 years not by instalments 6,950 4,684 On medium term loan repayable within 5 years by instalments - 1,250 On Loan Stock 69,199 4,792 On Finance Leases 188 995 (Pounds)76,337 (Pounds)11,721 ====== ======
18. PENSION SCHEME -------------- The company pays pension contributions in respect of employee's personal pension schemes. The pension cost charge represents contributions payable by the company and amounted to (Pounds)45,483 (1994: (Pounds)42,501). There were no outstanding or prepaid contributions at the balance sheet date. - 18 - STATUS/IQ LIMITED ----------------- NOTES TO THE ACCOUNTS --------------------- (Continued) ----------- 19. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS --------------------------------------------------
1995 1994 ---- ---- Loss for the Period (586,785) (406,413) Opening Shareholders' Funds 35,435 441,848 -------- -------- Closing Shareholders' Funds (Pounds)(551,350) (Pounds) 35.435 ======== ========
20. PROFIT AND LOSS RESERVE -----------------------
1995 ---- At 1st February, 1994 as Previously Reported (1,514,565) Prior Year Adjustment: Dividends Attributable to Non-Equity Interests Charged to Profit and Loss Account (605,428) Dividend Attributable to Non-Equity Shares Credited to Profit and Loss Reserve 605,428 ---------- (1,514,565) Retained Loss for the Period (796,262) Dividend on Non-Equity Shares 209,477 ---------- At 31st March, 1995 (Pounds)(2,101,350) ==========
21. RECONCILIATION OF OPERATING PROFIT TO ------------------------------------- NET CASH OUTFLOW FROM OPERATING ACTIVITIES ------------------------------------------
1995 1994 ---- ---- Operating Loss (510,448) (395,891) Depreciation Charges 101,139 82,050 Loss/(Profit) on Sale of Tangible Assets 37,818 (390) Decrease in Debtors 236,865 60,960 Increase in Creditors 11,116 66,204 Loan Written Off (229,286) - ------- ------- Net Cash Outflow from Operating Activities (Pounds)(352,796) (Pounds)(187,067) ======= =======
- 19 - STATUS/IQ LIMITED ----------------- NOTES TO THE ACCOUNTANTS ------------------------ (Continued) ----------- 22. ANALYSIS OF MOVEMENTS IN CASH AND CASH EQUIVALENTS -------------------------------------------------- DURING THE PERIOD -----------------
1995 1994 ---- ---- Balance at 1st February, 1994 266,420 141,420 Net Cash (Outflow)/Inflow (325,538) 125,000 ------- ------- Balance at 31st March, 1995 (Pounds)(59,118) (Pounds)266,420 ====== =======
23. ANALYSIS OF THE BALANCES OF CASH AND CASH ----------------------------------------- EQUIVALENTS AS SHOWN IN THE BALANCE SHEET -----------------------------------------
Change 1995 1994 In Period ---- ---- --------- Cash at Bank and in Hand 2,372 300,109 (297,737) Bank Overdraft (61,490) (33,689) (27,801) ------ ------ ------- (Pounds)(59,118) (Pounds)266,420 (Pounds)(325,538) ====== ======= =======
24. ANALYSIS OF CHANGES IN FINANCING DURING THE PERIOD --------------------------------------------------
1995 1994 ---- ---- Loans and Finance Lease Obligations:- Balance at 1st February, 1994 409,335 34,921 Repayments of Principal on Finance Leases (5,049) (4,872) Debentures Issued 195,000 379,286 Loans Written Off (229,286) - ------- ------- Balance at 31st March, 1995 (Pounds)370,000 (Pounds)409,335 ======= =======
- 20 - STATUS/IQ LIMITED ----------------- NOTES TO THE ACCOUNTS --------------------- (Continued) ----------- 25. DIVIDENDS ---------
1995 1994 ---- ---- As Restated ----------- Dividend on Non-Equity Shares: Preference 10% - Charged to the Profit and Loss Account (Pounds)209,477 (Pounds)158,555 ======= =======
26. CAPITAL COMMITMENTS -------------------
1995 1994 ---- ---- Capital expenditure that has been contracted for but has not been provided for in the financial statements (Pounds)NIL (Pounds)15,000 === ====== Capital expenditure that has been authorised by the directors but has not yet been contracted for (Pounds)NIL (Pounds)248,000 === =======
27. ULTIMATE PARENT UNDERTAKING --------------------------- The parent company of Status/IQ Limited is Entrust Nominees Limited "D" account, a company registered in England and Wales, which holds the shares in Status/IQ Limited on trust for and on behalf of the New Court Ventures. New Court Ventures is an unauthorised closed end unit trust which is ultimately owned by a number of pension funds. - 21 - STATUS/IQ LIMITED ----------------- TRADING AND PROFIT AND LOSS ACCOUNT ----------------------------------- FOR THE PERIOD ENDED 31ST MARCH, 1995 -------------------------------------
1.2.94 1.2.93 to to 31.3.95 31.1.94 ------- ------- SALES 1,941,713 - - ----- LESS: COST OF SALES - - ------------------- Authoring 17,177 Royalties 10,545 Education 673 General 38,391 Sub-contracts 11,826 Computer Consumables 29,940 Product Development 67,834 Software Costs 9,204 Consultants 521,503 Discounts Receivable (2,000) ------- ------- 705,093 ------- ------- GROSS PROFIT - - ------------ 1,236,620 LESS OVERHEADS - - -------------- DIRECTORS - - --------- Renumeration 187,000 State Contributions 668 Pension Scheme 1,000 ------- ------- 188,668 ------- ------- PREMISES - - -------- Rent and Rates 116,869 Insurance 17,702 Power, Light and Heat 11,879 Repairs and Renewals 5,100 Building Security 15,589 Cleaning 11,771 ------- ------- 178,910 ------- -------
STATUS/IQ LIMITED ----------------- TRADING AND PROFIT AND LOSS ACCOUNT ----------------------------------- FOR THE PERIOD ENDED 31ST MARCH, 1995 ------------------------------------- (Continued) ---------
1.2.94 1.2.93 to to 31.3.95 31.1.94 ------- ------- ADMINISTRATION - - -------------- Salaries 385,780 Postage, Printing, Stationery and Advertising 42,468 Telephone 25,450 Sundry Expenses 7,117 Subscriptions 4,087 Software Maintenance 12,390 Hardware Maintenance 16,123 Maintenance Contracts 4,333 Seminars/Conferences 2,411 Life Insurance 3,704 Temporary Staff 10,297 Recruitment/Termination 64,674 Staff Training 8,350 ------- ------- 587,184 ------- ------- SELLING - - ------- Salaries 358,166 Motor Expenses and Travelling 283,348 Entertaining 2,560 Marketing 43,450 ------- ------- 687,524 ------- -------
STATUS/IQ LIMITED Annual report for the period ended 28 March 1996 Registered no: 2013859 STATUS/IQ LIMITED Interim report for the period ended 28 March 1996 Pages Directors' report 1 - 2 Profit and loss account 4 Balance sheet 5 Cash flow statement 6 - 7 Notes to the financial statements 8 - 20 STATUS/IQ LIMITED 1 Directors' report for the period ended 28 March 1996 The directors present their report and the audited financial statements for the period ended 28 March 1996. Principal activities The profit and loss account for the period is set out on page 4. The principal activities of the company are the marketing and technical support of computer software and computer technology in the field of information management, of text retrieval and the development of new products and related consultancy services. Dividends and transfers to reserves The directors do not recommend the payment of a dividend. The loss for the financial year of (Pounds)196,849 (1995: loss of (Pounds)796,262) will be transferred to reserves. Directors The directors of the company during the period are listed below: C T Edge (resigned 28 March 1996) A R Lowrey (resigned 28 March 1996) J Tuck K L Coleman (appointed 28 March 1996) J O Nyweide (appointed 28 March 1996) Directors' interests None of the directors had any interest in the shares of the company at 28 March 1996 or at any time during the period. STATUS/IQ LIMITED 2 CHANGES IN FIXED ASSETS The movements in fixed assets during the period are set out in notes 9 and 10 to the financial statements. POST BALANCE SHEET EVENTS Details of post balance sheet events are given in note 22 to the financial statements. INSURANCE OF DIRECTORS The company maintains insurance for the directors in respect of their duties as directors of the company. DIRECTORS' RESPONSIBILITIES The directors are required by UK company law to prepare financial statements for each financial year that give a true and fair view of the state of affairs of the company as at the end of the financial period and of the loss of the company for that period. The directors confirm that suitable accounting policies have been used and applied consistently and reasonable and prudent judgements and estimates have been made in the preparation of the financial statements for the period ended 28 March 1996. The directors also confirm that applicable accounting standards have been followed and that the financial statements have been prepared on the going concern basis. The directors are responsible for keeping proper accounting records, for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. AUDITORS During the period, M J Ventham & company resigned as auditors of the company and Coopers & Lybrand were appointed in their place. A resolution to confirm the appointment of Coopers & Lybrand will be proposed at the annual general meeting. BY ORDER OF THE BOARD K L Coleman Company secretary STATUS/IQ LIMITED 3 Profit and loss account for the period ended 28 March 1996
1 April 1 February 1995 to 1994 to 28 March 31 March 1996 1995 (Pounds) (Pounds) Turnover 1,355,429 1,941,713 Net Operating expenses (1,431,939) (2,452,161) ---------- ---------- Operating loss (76,510) (510,448) Interest payable and similar charges (114,541) (76,337) ---------- ---------- Loss on ordinary activities before taxation (191,051) (586,785) Tax on loss on ordinary activities - - ---------- ---------- Loss on ordinary activities after taxation (191,051) (586,785) Dividends attributable to non-equity interests (191,491) (209,477) ---------- ---------- Loss for the financial period (382,542) (796,262) ========== ==========
All figures included in the profit and loss account are derived from continuing operations. The company has no recognized gains and losses other than the losses above and therefore no separate statement of total recognized gains and losses has been presented. There is no difference between the loss on ordinary activities before taxation and the retained loss for the period stated above, and their historical cost equivalents. STATUS/IQ LIMITED 4
Balance sheet at 28 March 1996 1996 1995 (Pound) (Pound) Fixed assets Tangible assets 134,571 211,071 Investments in subsidiaries - 2 ---------- ---------- 134,571 211,073 Current assets Debtors 438,658 366,576 Cash at bank and in hand 1 2,372 ---------- ---------- 438,659 368,948 ---------- ---------- Creditors: amounts falling due within one year (1,315,631) (761,371) ---------- ---------- Net current liabilities (876,972) (392,423) ---------- ---------- Total assets less current liabilities (742,401) (181,350) ---------- ---------- Creditors: amounts falling due after more than one year - (370,000) ---------- ---------- Net liabilities (742,401) (551,350) ========== ========== Capital and reserves Called up share capital 1,550,000 1,550,000 Profit and loss account (2,292,401) (2,101,350) ---------- ---------- Deficit on shareholders' funds (742,401) (551,350) ========== ========== Equity shareholders' funds (2,666,255) Non-equity shareholders' funds 2,114,905 ---------- ---------- (742,401) (551,350) ========== ==========
STATUS/IQ LIMITED 5 Cash flow statement for the period ended 28 March 1996
1 April 1 February 1995 to 1994 to 28 March 31 March 1996 1995 (Pound) (Pound) Net cash inflow from continuing operating activities 3,219 (353,796) (reconciliation to operating profit on page 7) ---------- -------- Returns on investments and servicing of finance Interest received - Interest paid (5,337) (6,950) Interest paid on finance leases (188) ---------- -------- Net cash outflow from returns on investments and servicing of finance (5,337) (7,138) ---------- -------- Taxation UK corporation tax paid - - ---------- -------- Investment activities Purchase of tangible fixed assets (8,022) (166,246) Sale of tangible fixed assets 4,104 10,691 ---------- -------- Net cash outflow from investment activities (3,918) (155,555) ---------- -------- Net cash (outflow)/inflow before financing (6,126) (515,489) ---------- -------- Financing Issue of debentures - 195,000 Repayment of principal under finance leases - (5,049) ---------- -------- (Decrease) in cash and cash equivalents (6,126) (325,538) ========== ========
STATUS/IQ LIMITED 6 Reconciliation of operating profit to net cash inflow from operating activities
1 April 1 February 1995 to 1994 to 28 March 31 March 1996 1995 (Pounds) (Pounds) Continuing operating activities Operating (loss) (76,510) (510,448) Depreciation on tangible fixed assets 72,220 101,139 Loss on sale of tangible fixed assets 8,199 37,818 (Increase)/decrease in debtors (66,284) 236,865 Increase/(decrease) in creditors 65,505 11,116 Loan written off - (229,286) ------- -------- Net cash inflow from continuing operating activities 3,129 (352,796) ======= ========
STATUS/IQ LIMITED 7 Notes to the financial statements for the period ended 28 March 1996 1 Principal accounting policies The financial statements have been prepared in accordance with applicable Accounting Standards in the United Kingdom. A summary of the more important accounting policies, which have been applied consistently, is set out below. The financial statements of the Company for the period from April 1, 1995 to March 28, 1996 and related footnote information are unaudited. All adjustments (consisting only of normal recurring adjustments) have been made, which in the opinion of management, are necessary for a fair presentation. Results of operations for the period from April 1, 1995 to March 28, 1996, are not necessarily indicative of the results that may be expected for any future period. Basis of accounting The financial statements are prepared in accordance with the historical cost convention. The cost of tangible fixed assets is their purchase cost, together with any incidental costs of acquisition. Depreciation is calculated so as to write off the cost of tangible fixed assets, less their estimated residual values, on a straight line basis over the expected useful economic lives of the assets concerned. The principal annual rates used for this purpose are: % Office Equipment, furniture, fixtures and fittings 10 - 30 Computer hardware 20 Computer software 33 Cash flow statement The company qualifies as a small company under the terms of Section 247 of the Companies Act 1985. As a consequence it is exempt from the requirements to publish a cash flow statement. Finance and operating leases Costs in respect of operating leases are charged on a straight line basis over the lease term. Leasing agreement which transfer to the company substantially all the benefits and risks of ownership of an asset are treated as if the asset had been purchased outright. The assets are included in fixed assets and the capital element of the leasing commitments is shown as obligations under finance leases. The leases rentals are treated as consisting of capital and interest elements. The capital element is applied to reduce the outstanding obligations and the interest elements is charged against profit on proportion to the reducing capital element outstanding. Assets held under finance leases are depreciated over the shorter of the lease terms and the useful lives of equivalent owned assets. STATUS/IQ LIMITED 8 Turnover Turnover, which excludes value added tax and trade discounts, represents the invoiced value of goods and services supplied. Deferred taxation Provision is made for deferred taxation, using the liability method, on all material timing differences to the extent that it is probable that a liability or asset will crystallise. Full provision is made for deferred taxation on timing differences arising from the provision of employees pensions. Pension scheme arrangements The company pays contribution in respect of employees' personal pension schemes. Contributions paid by the company are disclosed in note 5. The company provides no other post retirement benefits to its employees. Research and development expenditure These expenses are written off in the period it is incurred where it does not meet the accepted criteria for deferral to future periods. Foreign exchange Transactions denominated in foreign currencies are translated into sterling at exchange rates ruling at the date of the transaction. Foreign currencies assets and liabilities are translated into sterling at the balance sheet date. Exchange differences are taken to the profit and loss account in the year in which they arise. STATUS/IQ LIMITED 9 Creditors: amounts falling due within one year
28 March 31 march 1996 1995 (Pounds) (Pounds) Bank loan and overdrafts 64,245 61,490 Debenture loans 370,000 - Trade creditors 84,385 229,097 Amount due to parent company 84,868 - Other taxation and social security 53,388 52,174 Other creditors 29,783 - Accruals and deferred income 628,962 418,610 --------- -------- 1,315,631 761,371 ========= ========
The bank loans and overdrafts and debenture loans are secured by fixed and floating charges over the assets of the company. Debenture loans consist of: (Pounds)250,000 10% Redeemable at par on 31 August 1994 (Pounds)120,000 20% Redeemable at a premium of 16.66% on 9 November 1996 See note 22 for details of the post balance sheet event involving the debenture loans. Other creditors relate to amounts advanced from Barclays Bank Plc under a factoring agreement for certain trade debts with full recourse. Separate presentation of the amounts involved has therefore been made. Factoring costs are charged at 2.5% of the value of the debts factored and amounted to (Pounds)744 in the period. Creditors: amounts falling due after more than one year
28 March 31 March 1996 1995 (Pounds) (Pounds) Debenture loan secured by a fixed and floating charges over the assets of the company (notes 12,22) . 370,000 ======== ========
STATUS/IQ LIMITED 10 24 Ultimate parent company The directors regard Dataware Technologies Inc., a company registered in the United States of America as the ultimate parent company. DATAWARE TECHNOLOGIES, INC. PRO FORMA FINANCIAL INFORMATION ------------------------------- UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1995 UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1995 DATAWARE TECHNOLOGIES, INC. PRO FORMA FINANCIAL STATEMENTS ------------------------------ On March 28, 1996, Dataware Technologies, Inc., ("Dataware") consummated the merger of STATUS/I.Q. Limited; The merger was accounted as purchase. The unaudited pro forma consolidated balance sheet was prepared as of December 31, 1995 and the unaudited pro forma consolidated statement of operations was prepared for the year ended December 31, 1995. The numbers presented in the Dataware and Status/I.Q., Limited columns of the pro forma financial statements are unaudited reported numbers prior to the combination of the two companies. The unaudited pro forma financial information was prepared utilitizing the accounting policies of the respective companies. Any adjustments to conform Status/I.Q. Limited to reflect the accounting policies of Dataware are shown in the adjustments columns of the pro forma financial statements. For the purposes of this presentation, therefor pro forma adjustments have been made to the results of operations and balance sheet to provide information as to how the acquistation might have affected the statement of operations and financial position. This unaudited pro forma financial information does not purport to be indicative of the results of operations that would have been obtained if the operations had been combined as of the beginning of the periods presented, and is not intended to be a projection of future results. Dataware Technologies, Inc. Pro Forma Consolidated Balance Sheet December 31, 1995 (dollars in thousands, unaudited)
Pro Forma Consolidated Dataware Status/IQ Adjustments(1) Pro Forma ------------- ------------ ------------- ------------ ASSETS Current assets: Cash and cash equivalents $ 7,734 $ - $ (764) $ 6,970 Accounts receivable 10,063 661 (147) 10,577 Other current assets 3,070 - 3,070 ------------- ------------ ------------- ------------ Total current assets 20,867 661 (911) 20,617 Property and equipment 5,543 206 (9) 5,740 Computer software costs 3,002 175 3,177 Marketable securities 8,908 8,908 Other assets 3,646 3,646 ------------- ------------ ------------- ------------ Total assets $ 41,966 $ 867 $ (745) $ 42,088 ------------- ------------ ------------- ------------ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current portion of notes, license 189 663 (663) 189 payable, and capital leases Demand note payable 50 50 Accounts payable 1,963 129 53 2,145 Accrued expenses 1,396 175 450 2,021 Accrued Compensation 1,690 82 (82) 1,690 Income taxes payable 1,928 - 213 1,928 Deferred revenue 2,530 961 (691) 2,800 ------------- ------------ ------------- ------------ 9,746 2,010 (933) 10,823 Notes and software licenses payable 4 4 Common stock 62 2,368 (2,343) 87 Additional paid-in capital 36,782 - 213 36,995 Retained earnings (accumulated deficit) (4,445) (3,511) 2,318 (5,638) Cummulative translation adjustment (209) (209) Unrealized gain on marketable securities 26 26 ------------- ------------ ------------- ------------ Total stockholders' equity 32,216 (1,143) 188 31,261 ------------- ------------ ------------- ------------ Total liabilities and stockholders' equity $ 41,966 $ 867 $ (745) $ 42,088 ============= ============ ============= ============
Dataware Technologies, Inc. Pro Forma Consolidated Statement of Operations For the Year End December 31, 1995 (in thousands except per share data, unaudited)
Pro Forma Consolidated Dataware Status/IQ Adjustments Pro Forma ------------- ------------ ------------- ------------ Revenues: Software license fees $ 19,996 - $ 19,996 Services 18,871 $ 2,064 20,935 Systems integration 2,257 - 2,257 ------------- ------------ ------------- ------------ Total revenues 41,124 2,064 43,188 Cost of revenues Software license fees 3,125 (2)175 3,300 Services 10,133 10,133 Systems integration 1,790 1,790 ------------- ------------ ------------- ------------ Total cost of revenues 15,048 175 15,223 ------------- ------------ ------------- ------------ Gross margin 26,076 2,064 27,965 Operating expenses: Sales and Marketing 13,754 - 13,754 Product development 5,040 241 5,281 General and administrative 5,337 1,949 7,286 Merger costs 171 - 171 ------------- ------------ ------------- ------------ Total operating expenses 24,302 2,190 26,492 ------------- ------------ ------------- ------------ Income (loss) from operations 1,774 (126) 1,473 Interest income 611 611 Oter income (expenses), net 61 (468) (3)175 (232) ------------- ------------ ------------- ------------ Income (loss) before income taxes 2,446 (594) 1,852 Provision (benefit) for income taxes 733 - 733 ------------- ------------ ------------- ------------ Net Income (loss) $ 1,713 $ (594) $ 1,119 ============= ============ ------------- ============ Net income per common share $ 0.26 $ 0.17 ============= ------------- ============ Weighted average number of common and common equivalent shares 6,511 (4)25 6,536 ============= ------------- ============
DATAWARE TECHNOLOGIES, INC. NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS AND BALANCE SHEET (1) Adjustment to reflect the estimated allocation of the purchase price to the net assets of Status I.Q.. (2) Adjustment to amortize the cost of completed technology purchased. (3) Adjustment to eliminate interest expense for debt considered to be paid at the beginning of the year from the proceeds of the buyer. (4) Adjustment to include in the weighted average shown outstanding the shares issued in connection with this acquisition. (5) Note: Dataware Technologies, Inc. expensed the cost of incomplete technology in the amount of $1,193,000 during its three month interim period ended March 31, 1996. This adjustment has not been reflected in these pro forma financial statements. The Registrant's Form 8-K as filed April 11, 1996 is hereby amended as follows: Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. - - ---- ------------------------------------------------------------------ (a) Financial Statements of Business Acquired. The required financial ----------------------------------------- statements are included following this page. (b) Pro Forma Financial Information. The required information is ------------------------------- included following this page. (c) Exhibits: See Exhibit Index -------- SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: June 11, 1996 DATAWARE TECHNOLOGIES, INC. By: /s/ Christopher E. Lorch --------------------------------- Christopher E. Lorch, Controller EXHIBIT INDEX Exhibit No. Description --- ----------- 2 Agreement - Sale of Shares, dated March 28, 1996, betweeen Entrust Nominees Limited "D" Account and Dataware Technologies, Inc. Filed as Exhibit 2.2 to Dataware's Form 10-K for 1995 and incorporated herein by reference. 99 Dataware Technologies, Inc. press release dated April 1, 1996. Filed as Exhibit 99 to the Registrant's April 11, 1996 8-K and incorporated herein by reference. -----END PRIVACY-ENHANCED MESSAGE-----