-----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, P1LScExhK0iyvfkAibAbHN/qRrcmJfBR77MtaGktBXdHM9MzfZzKABfgEws3iHzN cjbJ8FtB1IuZJsapUoEfjQ== 0000950116-02-001279.txt : 20020606 0000950116-02-001279.hdr.sgml : 20020606 20020603172727 ACCESSION NUMBER: 0000950116-02-001279 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20020326 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020603 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEOWARE SYSTEMS INC CENTRAL INDEX KEY: 0000894743 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 232705700 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-21240 FILM NUMBER: 02669264 BUSINESS ADDRESS: STREET 1: 400 FEHELEY DR CITY: KING OF PRUSSIA STATE: PA ZIP: 19406 BUSINESS PHONE: 6102778300 MAIL ADDRESS: STREET 1: 400 FEHELEY DR CITY: KING OF PRUSSIA STATE: PA ZIP: 19406 FORMER COMPANY: FORMER CONFORMED NAME: HDS NETWORK SYSTEMS INC DATE OF NAME CHANGE: 19950313 FORMER COMPANY: FORMER CONFORMED NAME: INFORMATION SYSTEMS ACQUISITION CORP DATE OF NAME CHANGE: 19930108 8-K/A 1 eight-ka.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): March 26, 2002 NEOWARE SYSTEMS, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter)
Delaware 000-21240 23-2705700 - ---------------------------------------------------------------------------------------------- (State or other jurisdiction of (Commission File No.) (IRS Employer Identification No.) incorporation or organization)
400 Feheley Drive King of Prussia, Pennsylvania 19406 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Registrant's telephone number including area code) (610) 277-8300 -------------- Item 2. Acquisition or Disposition of Assets. On April 2, 2002, Neoware Systems, Inc., a Delaware corporation ("Neoware"), filed a Current Report on Form 8-K to report Neoware's acquisition of the ThinSTAR thin client product line from Network Computing Devices, Inc., a Delaware corporation ("NCD"), in accordance with an Asset Purchase Agreement, dated March 22, 2002 between Neoware and NCD (the "Purchase Agreement"). The acquisition closed on March 26, 2002. Neoware stated, pursuant to Item 7 of the Report, that it would file the financial statements of the business acquired, as required by Item 7(a), and the pro forma financial information, as required by Item 7(b), by amendment. This amendment is being filed to provide the required financial information. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (a) Financial statements of Business Acquired. The following financial statements of the ThinSTAR thin client product line of NCD required pursuant to Article 3 of Regulation S-X are filed as Exhibit 99.1 to this Form 8-K/A: (i) Report of Independent Certified Public Accountants; Audited Statements of Revenues and Expenses for the years ended December 31, 2001 and 2000; Notes to Audited Financial Statements. (ii) Unaudited Statement of Revenues and Expenses for the three months ended March 31, 2002 and 2001; Notes to Unaudited Financial Statements. (b) Pro Forma Financial Information. The following unaudited pro forma financial information required pursuant to Article 11 of Regulation S-X is filed as Exhibit 99.2 to this Form 8-K. (i) Unaudited Pro Forma Combined Statements of Operations for the year ended June 30, 2001 and for the nine month period ended March 31, 2002 and notes thereto. (c) Exhibits. 23.1 Consent of BDO Seidman, LLP 99.1 Audited financial statements of the ThinSTAR thin client product line for the years ended December 31, 2001 and 2000. 99.2 Unaudited Pro Forma Combined Statements of Operations for the year ended June 30, 2001 and for the nine month period ended March 31, 2002. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned duly authorized. NEOWARE SYSTEMS, INC. Dated: June 3, 2002 By: /S/ MICHAEL G. KANTROWITZ ------------------------- EXHIBITS Exhibit No. Description - ----------- ----------- 23.1 Consent of BDO Seidman, LLP 99.1 Audited Financial Statements of the ThinSTAR Product Line of Network Computing Devices, Inc. for the years ended December 31, 2001 and 2000 and Unaudited Financial Statements of the ThinSTAR Product Line of Network Computing Devices, Inc. for the three months ended March 31, 2002 and 2001. 99.2 Unaudited Pro Forma Combined Statements of Operations for the year ended June 30, 2001 and for the nine month period ended March 31, 2002. EX-23 3 ex23-1.txt EXHIBIT 23.1 Exhibit 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS We hereby consent to the incorporation of our report dated April 30, 2002 relating to the financial statements of the ThinSTAR Product Line of Network Computing Devices, Inc. in the Company's previously filed Registration Statements File No. 33-93942, No. 333-20185 and No. 333-56298. /s/ BDO Seidman, LLP San Francisco, CA June 3, 2002 EX-99 4 ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 Report of Independent Certified Public Accountants Board of Directors Network Computing Devices, Inc. Mountain View, California We have audited the accompanying statement of revenues and expenses of the ThinSTAR product line (the "Carved out Financial Statements") of Network Computing Devices, Inc. ("Company"), for each of the years ended December 31, 2001 and 2000. The statement is the responsibility of the Company's management. The Carved out Financial Statements do not represent a complete set of financial statements prepared in accordance with accounting principles generally accepted in the United States of America; rather, they are intended to conform with certain rules and regulations of the Securities and Exchange Commission. Our responsibility is to express an opinion on this statement based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the schedule of gross sales is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the schedule of gross sales. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall schedule presentation. We believe that our audits provide a reasonable basis for our opinion. The operations covered by the statement of revenues and expenses referred to above have no separate legal status or existence. The accompanying statement was prepared as described in Note 1 to present the revenues and expenses, including certain allocated expenses, directly associated with the ThinSTAR product line and are not intended to be a complete presentation of ThinSTAR product line results. Furthermore, the amounts in the accompanying statement are not necessarily indicative of the costs and expenses that would have resulted if the ThinSTAR product line had been operated as a separate entity. In our opinion, the statement referred to above presents fairly, in all material respects, the revenues and expenses of Network Computing Devices, Inc., for each of the years ended December 31, 2001 and 2000, as carved out between the ThinSTAR product line and the Company's remaining business. San Francisco, California April 30, 2002
Network Computing Devices, Inc. Statement of Revenues and Expenses of the ThinSTAR Product Line Years ended December 31, (thousands) 2001 2000 - ----------------------------------------------------------------------------------------------------------- Net revenues - Hardware products $16,486 $ 17,814 - ----------------------------------------------------------------------------------------------------------- Cost of revenues 14,869 18,968 - ----------------------------------------------------------------------------------------------------------- Gross profit (loss) 1,617 (1,154) - ----------------------------------------------------------------------------------------------------------- Operating expenses: Research and development 788 1,259 Marketing and selling 5,075 7,739 General and administrative 2,225 2,603 Business restructuring - 1,330 - ----------------------------------------------------------------------------------------------------------- Total operating expenses 8,088 12,931 - ----------------------------------------------------------------------------------------------------------- Operating loss (6,471) (14,085) Interest income 15 36 Interest expense (535) (216) Other income, net - 296 - ----------------------------------------------------------------------------------------------------------- Loss before income taxes (6,991) (13,969) - ----------------------------------------------------------------------------------------------------------- Provision for income taxes 10 99 - ----------------------------------------------------------------------------------------------------------- Net loss $(7,001) $(14,068) - ----------------------------------------------------------------------------------------------------------- See accompanying Notes to Statement of Revenues and Expenses
Network Computing Devices, Inc. Notes to Statement of Revenues and Expenses 1. Basis of Presentation On March 26, 2002, Network Computing Devices, Inc. ("Company") sold its Windows-Based Terminal product line ("ThinSTAR") to Neoware Systems, Inc. The assets sold, which had no carrying value on the books as of December 31, 2001 and 2000, consisted principally of customer records, the ThinSTAR trademark and other intellectual property and contract rights used in the business of designing, developing and distributing the ThinSTAR product line. In accordance with paragraph 8.2 of the Asset Purchase Agreement, the Company has prepared financial statements to meet certain requirements of Rule 3.05 of Regulation S-X. The required financial statements include a statement of revenues and expenses which include carved out revenues and expenses of the ThinSTAR product line. Historically, financial statements were not prepared for ThinSTAR, as the Company did not maintain ThinSTAR as a separate business unit. Accordingly, it is impracticable to provide full audited statements for ThinSTAR, including balance sheets and statements of cash flows, or other information regarding operating, investing and financing cash flows. This statement has been developed from the historical accounting records of the Company and represents the revenues of ThinSTAR and expenses, including certain allocated expenses, directly associated with producing those revenues. The statement does not purport to represent all the costs, expenses and results associated with a stand alone, separate entity. All of the estimates in the statement, as described in Note 3, are based on assumptions that Company management believes are reasonable. However, these estimates are not necessarily indicative of the net revenues and costs that would have resulted if ThinSTAR had been operated as a separate entity. 2. Revenue Recognition Hardware revenues consist primarily of revenues from the sale of thin client terminals and related hardware. Hardware revenues are recognized when the products are shipped following receipt of a valid purchase order. With respect to sales through certain international distributors, revenue is recognized when the shipment is made available at a third party logistics center and the buyer is notified of the availability. The Company warrants its hardware products for defects in materials for a period of three years. During this warranty period, the customer may return defective product to the Company for repair or replacement, at the Company's option. In the event the Company is unable to repair or replace the defective product, it may refund the customer the corresponding purchase price. The Company reduces revenues and cost of sales by an amount representing returns estimated by the Company based upon historical experience factors. Warranty costs are accrued based upon actual units sold and historical failure rates. Estimated reductions to revenue for sales and marketing programs including special price quotes, price protection, promotions and marketing development activities and other volume related incentives are recorded throughout the period and fluctuate based on market conditions. If market conditions decline, then the Company may increase these incentives, which would result in additional declines in revenue. The adjustments are charged to income in the period in which the information that gave rise to the adjustment becomes known. An allowance for doubtful accounts is maintained for estimated losses that would result from the customers' inability to make payments. Should the financial condition of the Company's customers deteriorate, additions to the allowance account may be required, which would also result in additional decreases in revenue. 3 3. Assumptions Used In preparation of the Statement of Revenues and Expenses, the Company made a number of assumptions and estimates to allocate certain indirect costs to arrive at the carved out portion. Below is a summary of significant assumptions and estimates used by management. Cost of Goods Sold: The Company uses a standard costing system to manage inventory and cost flow. Variances from actual costs, inventory shrinkage, freight and similar items are allocated to ThinSTAR products based on relative revenues or specific identification to product line. Research and Development: Research and development costs are charged to expense when incurred. Costs are generally comprised of personnel costs. These costs are allocated based on department head count. Marketing and Selling: Costs are principally allocated based on revenue for each of the domestic and international categories. Certain costs for technical support or similar matters is based on rework or repair history. General and Administrative, Business Restructuring, and Interest: Costs are allocated based on revenues. Interest Expense: Costs are allocated based on revenues. 4 Unaudited Statement of Revenues and Expenses For the Three Months Ended March 31, 2002 and 2001 Network Computing Devices, Inc. Unaudited Statement of Revenues and Expenses of the ThinSTAR Product Line
Three months ended March 31, (thousands) 2002 2001 - ----------------------------------------------------------------------------------------------------------- Net revenues - Hardware products $ 2,754 $3,821 - ----------------------------------------------------------------------------------------------------------- Cost of revenues 2,710 2,740 - ----------------------------------------------------------------------------------------------------------- Gross profit 44 1,081 - ----------------------------------------------------------------------------------------------------------- Operating expenses: Research and development 200 183 Marketing and selling 1,145 1,316 General and administrative 653 444 - ----------------------------------------------------------------------------------------------------------- Total operating expenses 1,998 1,943 - ----------------------------------------------------------------------------------------------------------- Operating loss (1,954) (862) Interest expense, net (95) (63) - ----------------------------------------------------------------------------------------------------------- Loss before income taxes (2,049) (925) - ----------------------------------------------------------------------------------------------------------- Provision for income taxes 1 3 - ----------------------------------------------------------------------------------------------------------- Net loss $(2,050) $ (928) - -----------------------------------------------------------------------------------------------------------
See accompanying Notes to Unaudited Statement of Revenues and Expenses 2 Network Computing Devices, Inc. Notes to Unaudited Statement of Revenues and Expenses 1. Basis of Presentation On March 26, 2002, Network Computing Devices, Inc. ("Company") sold its Windows-Based Terminal product line ("ThinSTAR") to Neoware Systems, Inc. The assets sold, which had no carrying value on the books as of December 31, 2001 and 2000, consisted principally of customer records, the ThinSTAR trademark and other intellectual property and contract rights used in the business of designing, developing and distributing the ThinSTAR product line. In accordance with paragraph 8.2 of the Asset Purchase Agreement, the Company has prepared financial statements to meet certain requirements of Rule 3.05 of Regulation S-X. The required financial statements include a statement of revenues and expenses which include carved out revenues and expenses of the ThinSTAR product line. Historically, financial statements were not prepared for ThinSTAR, as the Company did not maintain ThinSTAR as a separate business unit. Accordingly, it is impracticable to provide full audited statements for ThinSTAR, including balance sheets and statements of cash flows, or other information regarding operating, investing and financing cash flows. This statement has been developed from the historical accounting records of the Company and represents the revenues of ThinSTAR and expenses, including certain allocated expenses, directly associated with producing those revenues. The statement does not purport to represent all the costs, expenses and results associated with a stand alone, separate entity. All of the estimates in the statement, as described in Note 3, are based on assumptions that Company management believes are reasonable. However, these estimates are not necessarily indicative of the net revenues and costs that would have resulted if ThinSTAR had been operated as a separate entity. 2. Revenue Recognition Hardware revenues consist primarily of revenues from the sale of thin client terminals and related hardware. Hardware revenues are recognized when the products are shipped following receipt of a valid purchase order. With respect to sales through certain international distributors, revenue is recognized when the shipment is made available at a third party logistics center and the buyer is notified of the availability. The Company warrants its hardware products for defects in materials for a period of three years. During this warranty period, the customer may return defective product to the Company for repair or replacement, at the Company's option. In the event the Company is unable to repair or replace the defective product, it may refund the customer the corresponding purchase price. The Company reduces revenues and cost of sales by an amount representing returns estimated by the Company based upon historical experience factors. Warranty costs are accrued based upon actual units sold and historical failure rates. 3 Estimated reductions to revenue for sales and marketing programs including special price quotes, price protection, promotions and marketing development activities and other volume related incentives are recorded throughout the period and fluctuate based on market conditions. If market conditions decline, then the Company may increase these incentives, which would result in additional declines in revenue. The adjustments are charged to income in the period in which the information that gave rise to the adjustment becomes known. An allowance for doubtful accounts is maintained for estimated losses that would result from the customers' inability to make payments. Should the financial condition of the Company's customers deteriorate, additions to the allowance account may be required, which would also result in additional decreases in revenue. 3. Assumptions Used In preparation of the Statement of Revenues and Expenses, the Company made a number of assumptions and estimates to allocate certain indirect costs to arrive at the carved out portion. Below is a summary of significant assumptions and estimates used by management. Cost of Goods Sold: The Company uses a standard costing system to manage inventory and cost flow. Variances from actual costs, inventory shrinkage, freight and similar items are allocated to ThinSTAR products based on relative revenues or specific identification to product line. Research and Development: Research and development costs are charged to expense when incurred. Costs are generally comprised of personnel costs. These costs are allocated based on department head count. Marketing and Selling: Costs are principally allocated based on revenue for each of the domestic and international categories. Certain costs for technical support or similar matters is based on rework or repair history. General and Administrative, Business Restructuring, and Interest: Costs are allocated based on revenues. Interest Expense: Costs are allocated based on revenues. 4 EX-99 5 ex99-2.txt EXHIBIT 99.2 Exhibit 99.2 Unaudited Pro Forma Combined Statements of Operations for the year ended June 30, 2001 and for the nine-month period ended March 31, 2002. On March 26, 2002, Neoware Systems, Inc., a Delaware corporation ("Neoware"), completed its acquisition of Network Computing Devices, Inc.'s ("NCD") ThinSTAR thin client appliance product line ("Product Line") in accordance with an Asset Purchase Agreement, dated March 22, 2002, between Neoware and NCD (the "Purchase Agreement"). The assets acquired consisted principally of goodwill, an assembled workforce, the ThinSTAR trademark and other intellectual property, and contract rights used in the business of designing, developing, manufacturing, distributing and selling the Windows-based thin client devices marketed under the ThinSTAR brand name. Neoware intends to continue to use the assets for similar purposes. Pursuant to the Purchase Agreement, the purchase price was $4.25 million, $300,000 of which is being held in an escrow account for a minimum of 120 days from the date of the closing to satisfy indemnification claims and certain obligations of NCD, and $250,000 of which is payable in accordance with an earn-out requiring NCD's satisfaction of certain sales targets in Europe, the Middle East and Africa. The purchase price was paid with cash on hand. The amount and type of consideration was determined on the basis of arm's length negotiations between Neoware and NCD. On December 4, 2001, Neoware completed its acquisition of substantially all the assets and certain of the liabilities of Telcom Assistance Center Corporation, a/k/a Activ-e Solutions, a Delaware corporation ("TACC"), in accordance with the Asset Purchase Agreement, dated November 27, 2001, between Neoware and TACC (the "Purchase Agreement"). The assets acquired consisted principally of contract rights, accounts receivable and personal property used in the business of providing managed and professional services, training and products to create server-based computing solutions. Neoware intends to continue to use the assets for similar purposes. Neoware also assumed liabilities which consisted principally of bank debt, trade payables and accrued expenses. Pursuant to the Purchase Agreement, Neoware paid $75,000 in cash, funded with cash on hand, plus 569,727 shares of Neoware's common stock. The amount and type of consideration was determined on the basis of arm's length negotiations between Neoware and TACC. The following presents certain unaudited pro forma combined financial statements of Neoware which were prepared as if the acquisitions took place on July 1, 2000. The financial statements give pro forma effect to the cash paid and shares issued in connection with the acquisitions. No pro forma balance sheet is included since a balance sheet reflecting the impact of the acquisitions was filed by Neoware in its Form 10-Q for the quarter ended March 31, 2002. The unaudited pro forma financial statements are provided for illustrative purposes only, and are not necessarily indicative of the operating results that would have occurred if these transactions had been consummated at the beginning of the periods indicated, nor are they necessarily indicative of any future operating results or financial position. The unaudited pro forma financial statements do not include any adjustments related to any profit improvements or potential costs savings which may result from the transaction. The unaudited pro forma combined financial statements reflect preliminary estimates of the allocation of the purchase price that may be adjusted. Management does not expect such adjustments to be material.
NEOWARE SYSTEMS, INC. UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS Nine Months Ended March 31, 2002 (b) (c) (a) ThinSTAR Pro Forma Neoware ACTIV-e Solutions Product Line Adjustments Combined Net Revenues $20,228,442 $2,222,490 $10,134,000 $ $32,584,932 Cost of revenues 11,862,736 1,613,079 9,155,000 22,630,815 ----------- ---------- ----------- ------------ ----------- Gross profit 8,365,706 609,411 979,000 - 9,954,117 OPERATING EXPENSES: Sales & marketing 4,072,802 325,538 3,417,000 7,815,340 Research and development 1,027,421 - 575,000 1,602,421 General and administrative 1,945,930 405,084 1,976,000 4,327,014 ----------- ---------- ----------- ------------ ----------- Operating expenses 7,046,153 730,622 5,968,000 - 13,744,775 Operating income (loss) 1,319,553 (121,211) (4,989,000) - (3,790,658) Interest income (expense), net 255,746 (49,681) (961,000) - 754,935 ----------- ---------- ----------- ------------ ----------- Net Income (loss) $ 1,575,299 $ (170,892) $(5,950,000) $ - $(4,545,593) =========== ========== =========== ============ =========== Basic EPS $0.15 ($0.41) =========== =========== Diluted EPS $0.14 ($0.38) =========== =========== Weighted average number of shares in basic earnings per share computation 10,573,863 569,727 (d) 11,143,590 =========== ============ =========== Weighted average number of shares in diluted earnings per share computation 11,326,706 569,727 (d) 11,896,433 =========== ============ ===========
(a) For the period July 1, 2001 through the acquisition date of December 4, 2001. (b) For the period July 1, 2001 through the acquisition date of March 26, 2002. (c) The excess purchase price over the net assets acquired has been allocated on a preliminary basis to goodwill. In accordance with SFAS No. 142, "Goodwill and Other Intangible Assets", goodwill is no longer amortized. As such, the Company has not recorded a proforma adjustment for amortization of intangible asets. (d) Represents the effect of the issuance of shares in connection with the acquisition.
NEOWARE SYSTEMS, INC. UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS Year Ended June 30, 2001 (a) (b) (a) ThinSTAR Pro Forma Neoware ACTIV-e Solutions Product Line Adjustments Combined Net Revenues $17,654,825 $6,449,094 $17,771,000 $ $ 41,874,919 Cost of revenues 11,692,775 4,969,527 17,530,000 34,192,302 ----------- ---------- ----------- ------------ ------------ Gross profit 5,962,050 1,479,567 241,000 - 7,682,617 OPERATING EXPENSES: Sales & marketing 3,058,008 916,869 5,661,000 9,635,877 Research and development 955,386 - 1,063,000 2,018,386 General and administrative 2,171,280 1,091,790 2,056,000 5,319,070 Acquisition Costs 245,839 - 245,839 ----------- ---------- ----------- ------------ ------------ Operating expenses 6,430,513 2,008,659 8,780,000 - 17,219,172 Operating income (loss) (468,463) (529,092) (8,539,000) - (9,536,555) Loss on investment (812,000) - - (812,000) Interest income (expense), net 771,695 (123,189) (333,000) - 315,506 ----------- ---------- ----------- ------------ ------------ Net Income (loss) $ (508,768) $ (652,281) $(8,872,000) $ - $(10,033,049) =========== ========== =========== ============ ============ Basic EPS ($0.05) ($0.93) =========== ============ Diluted EPS ($0.05) ($0.93) =========== ============ Weighted average number of shares in basic earnings per share computation 10,226,316 569,727 (c) 10,796,043 =========== ============ ============ Weighted average number of shares in diluted earnings per share computation 10,226,316 569,727 (c) 10,796,043 =========== ============ ============
(a) For the period July 1, 2000 through the June 30, 2001. (b) The excess purchase price over the net assets acquired has been allocated on a preliminary basis to goodwill. In accordance with SFAS No. 142, "Goodwill and Other Intangible Assets", goodwill is no longer amortized. As such, the Company has not recorded a proforma adjustment for amortization of intangible asets. (c) Represents the effect of the issuance of shares in connection with the acquisition. -----END PRIVACY-ENHANCED MESSAGE-----