SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Quarter Ended Commission File Number
December 31, 1997 333-1182
THE ASHTON TECHNOLOGY GROUP, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 22-6650372
(State of Incorporation) (I.R.S. Employer Identification Number)
1900 Market Street, Suite 701, Philadelphia, PA 19103
(Address of principal executive offices)
Issuer's telephone number, including area code: 215-751-1900
Number of shares of common stock outstanding on December 31, 1997: 7,562,500
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
---- ----
<PAGE>
THE ASHTON TECHNOLOGY GROUP, INC.
INDEX - FORM 10-QSB
December 31, 1997
Part I - Financial Information Page
Item 1. Financial Statements
Consolidated Balance Sheets as of December 31, 1997
and March 31, 1997.................................................4
Consolidated Statements of Operations
For the Three and Nine Months Ended December 31, 1997 and 1996.....5
Consolidated Statements of Cash Flows
For the Nine Months Ended December 31, 1997 and 1996...............6
Notes to Unaudited Consolidated Financial Statements...............7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations...............................................9
Part II - Other Information
Item 1. Legal Proceedings..................................................12
Item 2. Changes in Securities and Use of Proceeds.................12
Items 3 through 5 have been omitted since the items are either inapplicable
or the answer is negative
Item 6. Exhibits and Reports on Form 8-K..........................12
Signatures.........................................................15
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<PAGE>
The Ashton Technology Group, Inc. and Subsidiaries
Consolidated Balance Sheets
As of December 31, 1997 and March 31, 1997
ASSETS December 31, 1997 March 31, 1997
----------------- --------------
(UNAUDITED) (AUDITED)
Current Assets:
Cash and cash equivalents $ 853,383 $ 60,841
Contracts receivable, net of 36,843 1,483,163
allowance for doubtful accounts
Notes receivable 100,009 -
Prepayments and other current assets 424,025 98,903
Total Current Assets 1,414,260 1,642,907
Property and equipment, net 711,305 1,041,449
Note receivable - long term 486,090 --
Private placement costs 700,818 --
Development costs 365,640 --
Investment in ECOM, Inc. 105,000 --
Goodwill, net -- 575,581
Other assets 67,605 106,693
----------- -----------
Total Assets $ 3,850,718 $ 3,366,630
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 994,663 $1,937,752
Billings in excess of costs -- 52,722
----------- -----------
Total current liabilities 994,663 1,990,474
Long-term debt 38,000 13,000
----------- -----------
Total liabilities 1,032,663 2,003,474
----------- -----------
Minority Interest -- 300,279
----------- -----------
Commitments and contingencies
Stockholders' Equity:
Preferred stock - $.01 par value 5,485 --
Common stock - $.01 par value 75,625 75,625
Additional paid-in capital 15,255,925 10,482,197
Accumulated deficit (12,518,980) (9,494,945)
----------- -----------
Total stockholders' equity 2,818,055 1,062,877
----------- -----------
Total Liabilities and
Stockholders' Equity $ 3,850,718 $ 3,366,630
----------- -----------
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
The Ashton Technology Group, Inc. and Subsidiaries
Consolidated Statements of Operations
For the Three and Nine Months Ended December 31, 1997 and 1996
(Unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
------------------ ------------------
1997 1996 1997 1996
---- ---- ---- ----
Revenues $505,310 $1,144,977 $3,340,367 $3,426,992
Costs and expenses:
Cost of revenues 431,233 827,121 2,620,896 2,355,816
Development costs 103,018 668,518 306,693 2,643,462
Selling, general and
administrative expenses 892,930 695,432 2,813,757 2,331,783
Depreciation and amortization 120,880 120,384 364,834 361,152
-------- --------- --------- ---------
Total costs and expenses 1,548,061 2,311,455 6,106,180 7,692,213
Loss from operations (1,042,751) (1,166,478) (2,765,813) (4,265,221)
Other costs and revenues:
Cost of corporate
restructuring -- (702,678) -- (702,678)
Interest Income (expense),
net (55,043) 15,105 (142,070) 113,865
Gain on sale of subsidiary 101,992 -- 101,992 --
Private placement costs (55,003) -- (165,005) --
Minority interest in earnings 10,223 (37,085) (11,464) (118,153)
of subsidiary
Loss before provision for
income taxes (1,040,582) (1,891,136) (2,982,360) (4.972,187)
Provision for income taxes 27,749 155,800 41,775 227,300
Net loss $(1,068,331) $(2,046,936) $(3,024,135) $(5,199,487)
Net loss per common share $(.14) $ (.27) $ (.40) $ (.73)
Weighted average number of
common shares outstanding 7,562,500 7,562,500 7,562,500 7,150,416
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
The Ashton Technology Group, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For the Nine Months Ended December 31, 1997 and 1996
(Unaudited)
Nine Months Ended December 31,
------------------------------
1997 1996
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(3,024,135) $(5,199,487)
Adjustments to reconcile net loss to
net cash used by operating activities,
net of acquired business in 1996:
Depreciation and amortization 554,081 253,827
Increase in minority interest of subsidiary 11,464 --
Gain on sale of subsidiary (101,992) --
Changes in operating asset and liabilities
Increase in contracts receivable, net (36,843) (229,469)
Increase in prepayments and other assets (273,568) (236,094)
Decrease in accounts payable and
accrued expenses (464,036) (250,440)
Increase in billings in excess of costs -- 194,043
------------ -------------
Net cash used by operating activities (3,335,029) (5,467,620)
------------ -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Note receivable - sale of subsidiary (586,099) --
Purchase of fixed assets (121,797) (1,012,917)
Cash received from sale of subsidiary 600,000 --
Cash paid for acquisition of CSI(R),
net of cash acquired -- (512,012)
Investment in ECOM, Inc. (105,000) --
Increase in minority interest 118,153
Development costs (365,640) --
Adjustment of net cash for subsidiary sold (45,448) --
------------ -------------
Net cash used in investing activities (623,984) (1,406,776)
------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance costs for private placement (702,997) (1,960)
Issuance costs for initial public offering -- (282,001)
Proceeds from initial pubic offering -- 10,394,709
Proceeds from notes payable -- 250,000
Proceeds from private placement 5,500,000 --
Payment of notes payable -- (2,101,341)
------------ -------------
Net cash provided by financing activities 4,797,003 8,259,407
------------ -------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 837,990 1,385,011
Cash and cash equivalents, beginning of period 15,393 31,021
------------ -------------
Cash and cash equivalents, end of period $ 853,383 $ 1,416,032
============ =============
The accompanying notes are an integral part of these
consolidated financial statements
<PAGE>
THE ASHTON TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements for the
nine months ended December 31, 1997 include the accounts of The Ashton
Technology Group, Inc. ("Ashton") and its subsidiaries, Universal
Trading Technologies Corporation ("UTTC"), and Gomez Advisors, Inc.
("Gomez"). Ashton, together with UTTC and Gomez, is the "Company".
The Company's subsidiary, Computer Science Innovations, Inc.
("CSI(R)"), was sold on November 6, 1997 (see "Sale of Subsidiary"
below). The financial statements for the nine months ended December 31,
1997 include CSI(R) until it was sold. The financial statements for the
year ended March 31, 1997 include CSI(R), but did not include Gomez,
which was formed by Ashton as a wholly-owned subsidiary on May 21,
1997.
The accompanying unaudited consolidated financial statements have been
prepared by the Company in accordance with generally accepted
accounting principles for interim financial statements and in
accordance with the instructions for Form 10-QSB. Accordingly, they do
not contain all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In
the opinion of management, the accompanying unaudited consolidated
financial statements have been prepared on the same basis as the
audited statements and include all adjustments, consisting only of
normal recurring adjustments, which are necessary for a fair statement
of the results of the interim periods presented. These financial
statements should be read in conjunction with the footnotes contained
in the Company's 10-KSB for the fiscal year ended March 31, 1997.
The preparation of interim financial statements, in conformity with
generally accepted accounting principles, also requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities; the disclosure of contingent assets and
liabilities at the date of the interim statements; and the reported
amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
2. SALE OF SUBSIDIARY
On November 6, 1997, Ashton sold CSI(R) to George H. Milligan and
Susanne L. Cavadeas, as Trustees of the Trust Created by The Computer
Science Innovations, Inc. Leveraged ESOP, for $1,723,000, payable as
follows: (1) repayment of $500,000 loan plus interest of $28,875, (2)
$600,000 in cash, and (3) a five year 8 1/4% Note of $594,125. The
Company recognized a gain on the sale of $101,992.
3. PREPAYMENT AND OTHER CURRENT ASSETS
Included in prepayments are $413,980 of legal costs for a lawsuit with
one stockholder. To the extent such costs are not recoverable from the
Company's insurance carrier, Fredric W. Rittereiser, Chief Executive
Officer of Ashton, and The Dover Group, Inc., a stockholder of Ashton,
have agreed to pay such costs.
4. RESTATEMENT OF REVENUES
The 1996 revenues and cost of revenues have been restated to reflect
intercompany eliminations not reflected on the original unaudited
quarterly financial statements. For the nine months and three months
ended December 31, 1997, these intercompany eliminations were
$1,236,340 and $222,358 respectively.
FORWARD-LOOKING STATEMENTS
Certain statements in this Form 10-QSB constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of
1933, as amended, Section 21E of the Securities Exchange Act of 1934,
as amended, and the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause the actual
results, performance or achievements of the Company to differ
materially from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such risks,
uncertainties and other important factors include, among others:
general economic and business conditions; industry trends; competition;
material costs; ability to develop markets; changes in business
strategy or development plans; availability, terms and deployment of
capital; availability of qualified personnel; changes in government
regulation and other factors referenced in this Form 10-QSB. Such
forward-looking statements speak only as of the date of this Form
10-QSB. The Company expressly disclaims any obligation or undertaking
to disseminate any updates or revisions to any forward-looking
statement contained herein to reflect any change in the Company's
expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NINE MONTHS OF FISCAL 1998 COMPARED TO NINE MONTHS OF FISCAL 1997.
For fiscal 1997, all of the Company's revenues, and the related "cost of
revenues", were generated by CSI(R) which was sold on November 6, 1997 (see Note
2 to the Financial Statements), and for fiscal 1998, all but $159,750 of
revenues were generated by CSI(R). The sale of CSI(R) has resulted in
substantially lower revenues from continuing operations. Until the UTS VWAP
trading system ("VTS(TM)") is approved for use by the SEC (see "Rule Change"
below) and becomes operational and obtains substantial market acceptance, the
Company will not be able to generate significant revenues.
On a consolidated basis, the Company had revenues of $3,340,367 for the
nine months ended December 31, 1997 compared to revenues of $3,426,992 for the
nine months ended December 31, 1996.
During the nine months ended December 31, 1997, the Company incurred a net
loss of $3,024,135 as compared to the nine months ended December 31, 1996, in
which the Company incurred a net loss of $5,199,487.
Development Costs
During the nine months ended December 31, 1997, the Company incurred
$672,333 of development costs of which $306,693 was expensed and $365,640 was
capitalized. For the nine months ended December 31, 1996, the Company incurred
development costs of $2,643,462 which was expensed. The December 31, 1996
development costs included $1,618,592 for the Ashton Technology Encryption
Device (ATED) and its associated cryptoserver. The December 31, 1997 development
costs were for enhancements to the VTS(TM) trading system and the design of
future transactional products.
Rule Change
On April 8, 1997, the Company announced that UTTC had completed development
of its "VTS(TM)". Under generally accepted accounting principles, the Company
expenses development costs until the system is ready for commercial use and
thereafter capitalizes any additional development costs. Although the VTS(TM)
system has been operationally ready since April of 1997, trading on the system
can not begin until the Securities and Exchange Commission ("SEC") approves Rule
237 proposed by the Philadelphia Stock Exchange ("PHLX"). An amendment to the
proposed rule, reflecting enhancements made to the system since the SEC first
published the proposed rule in the Federal Register on September 4, 1996, was
submitted by the PHLX to the SEC on October 28, 1997. The SEC approved
re-publishing the proposed rule and amendments in the Federal Register on
December 22, 1997, and the proposed rule and amendments were published in the
Federal Register on December 31, 1997. The notification period will be a minimum
of 35 days and a maximum of 90 days after publication. There can be no assurance
that Rule 237 will be approved or that, if the SEC approves Rule 237, the
Company will be able to generate positive net revenues.
Capital Equipment
During the nine months ended December 31, 1997, the Company spent $121,797
for the acquisition of equipment, as compared to $1,012,917 for the nine months
ended December 31, 1996. The reason capital expenditures during the nine months
ended December 31, 1996 were substantially greater than in the period ended
December 31, 1997 was because the primary computers required for the VTS(TM)
trading system were purchased during the nine months ended December 31, 1996.
Given the rapid advancements in computer technology, the Company is continually
upgrading its systems.
Selling, General and Administrative Expenses
During the nine months ended December 31, 1997, the Company incurred
$2,813,757 of Selling, General and Administrative (SG&A) expenses, as compared
to $2,331,783 for the nine months ended December 31, 1996. On a per company
basis, SG&A costs were $1,591,230 for Ashton, $494,808 for UTTC, $433,083 for
CSI and $294,636 for Gomez. The increase in SG&A expenses is due to the
formation and operation of the new wholly-owned subsidiary of Gomez (which was
formed in April 1997) and to higher legal costs incurred in connection with the
Rosensaft lawsuit, regulatory and listing issues.
Liquidity
At December 31, 1997, the Company had cash and cash equivalents of
$853,383. For a description of an improvement in the Company's liquidity since
that date, see "Subsequent Events" below.
On September 18, 1997 the Company commenced a private offer and exchange
offer pursuant to which it offered to certain investors (i) up to 250,000 shares
of its Series A Convertible PIK Preferred Stock (with a liquidation preference
of $10.00 per share) (the "Series A Preferred"); (ii) up to 250,000 shares of
its Series B Convertible Preferred Stock (with a liquidation preference of
$10.00 per share) ("Series B Preferred"); and (iii) to exchange (the "Exchange
Offer") up to 300,000 shares of its Series B Preferred for up to $3,000,000 of
convertible and non-convertible notes (the "UTTC Notes") issued by UTTC. The
Series A Preferred pays cumulative dividends semi-annually at an annual rate of
$0.50 per share and is payable In additional shares of Series A Preferred until
February 15, 2000. At any time after February 15, 1998, each holder of shares of
Series A Preferred will have the right to convert each share of Series A
Preferred into: (i) ten shares of the Common Stock, par value $0.01 per share,
of Ashton (the "Common Stock"); and (ii) one two-year warrant to purchase three
shares of the Common Stock, par value $0.01 per share, of UTTC (the "UTTC Common
Stock"), with an exercise price of $0.75 per share, subject to adjustment. The
Series B Preferred pays cumulative dividends semi-annually at an annual rate of
$0.90 per share. At any time after June 30, 1998, each holder of shares of
Series B Preferred will have the right to convert each share of Series B
Preferred into: (i) six shares of Common Stock; and (ii) one two-year warrant to
purchase two shares of UTTC Common Stock, with an exercise price of $0.75 per
share, subject to adjustment.
As of December 31, 1997, the Company had received signed Subscription
Agreements for all of the shares of the Series A Preferred offered (250,000
shares) and 5,000 of the shares of Series B Preferred offered. The Series A
transaction was closed on January 15, 1998.
As of December 31, 1997, the Company had received signed Subscription
Agreements for the tender of $2,975,000 of UTTC Notes for which the Company
issued 297,500 shares of Series B Preferred Stock. The Exchange Offer was closed
on January 15, 1998.
The Company has extended its private offer to institutional and accredited
investors of Series B Preferred until May 15, 1998. Such offering of Series B
Preferred will not be registered under Securities Act of 1933, as amended, and
may not be offered or sold in the United States absent registration thereunder
or an applicable exemption from the registration requirements thereunder.
If and when the SEC approves the PHLX's proposed Rule 237 (see "Rule
Change" above, the Company expects to be able to commence the operation of its
VTS(TM) system with the PHLX within a month thereafter.
In addition to the $1,000,000 which the Company raised on January 27, 1998
(see "Subsequent Events" below), the Company expects to raise additional capital
from future private placements and/or other sources by the end of March, 1998.
There can be no assurances, however, that the Company will be able to raise
capital on a timely basis or on terms acceptable to the Company, if at all.
There can be no assurance that the Company's actual cash requirements will
not exceed its anticipated cash requirements or that additional cash
requirements or additional financing will not be required. The Company may
require additional funds to provide working capital and to sustain its
operations until it generates positive cash flow from its operations.
Subsequent Events
On January 27, 1998, the Company completed the sale of 100,000 shares of
the Series "C" Convertible Preferred Stock to a group of foreign investors (the
"Investors"), with a liquidation preference of $10.00 per share (the "Series C
Preferred"), for an aggregate purchase price of $1,000,000 ("Series C Shares").
Holders of the Series C Shares will have the right to convert each Series C
Share into one share of Common Stock at the conversion price which shall be
equal to the following: (i) if the Market Price (as hereinafter defined) on the
Conversion Date (as hereinafter defined) is less than $1.8774, the conversion
price is equal to the lesser of 75% of the Market Price at the Conversion Date
or $1.2516, and (ii) if the Market Price at the Conversion Date is equal to or
greater than $1.8774, the conversion price is equal to $1.2516 plus 50% of the
difference between the Market Price at the Conversion Date and $1.8774. The
"Market Price" shall mean the average of the closing bid prices per share of the
Common Stock over the five consecutive trading days ending on the trading day
immediately preceding the date the holder elects to have the shares of Series C
Preferred Stock converted (the "Conversion Date"). In addition, the Investors
will receive warrants exercisable into an aggregate of 100,000 shares of Common
Stock at an exercise price of 105% of the Market Price for a period of 5 years.
In connection with the sale, the Company has agreed to pay a placement fee to
the placement agent of $50,000 and to transfer to it 5,000 Shares of the Series
C Convertible Preferred Stock and a warrant to purchase 100,000 shares of Common
Stock at an exercise price of 105% of Market Price for a period of 5 years.
The Company has used a substantial portion of the $1,000,000 to reduce its
accounts payable and accrued expenses.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See previous reports in the Company's Form 10-KSB for the fiscal year ended
March 31, 1997 and Form 10-QSB for the quarterly period ended September 30,
1997.
On December 3, 1997, Judge Shira A. Sheindlin entered her decision and
order in Rosensaft v. The Ashton Group, Inc. et al. USDC, SD, NY, 97 Civ. 3138
(SAS) granting plaintiff's Motion for Partial Summary Judgment under plaintiff's
Tenth Claim for Relief against defendants The Dover Group, Inc. and Fredric W.
Rittereiser. Neither Ashton nor UTTC were parties to, or affected by, this
decision.
Alliant Techsystems, Inc. ("Alliant") has notified Ashton of its claim of
approximately $280,000 as the balance allegedly due under its contact with the
Company for the production of certain ATED systems. On October 22, 1997, Ashton
filed a complaint against Alliant in the Court of Common Pleas, County of
Philadelphia, Pennsylvania for damages for failure of Alliant to perform its
obligations under its contract with Ashton. On December 15, 1997, Alliant
Techsystems filed its answer and counterclaims seeking damages in an amount "in
excess of $50,000."
In a letter to the Company dated November 17, 1997, The NASDAQ Stock
Market, Inc. ("Nasdaq") informed the Company that the Nasdaq Listing
Qualifications Panel (the "Panel") granted the Company a conditional exception
to Nasdaq's minimum capital and surplus listing requirement. The Panel required,
however, that the Company make a public filing on or before December 31, 1997
with the SEC and Nasdaq containing a balance sheet and corresponding statement
of operations no older than November 30, 1997 with proforma adjustments for any
significant events or transactions occurring on or before the filing date, and
evidencing a minimum of $4,000,000 in capital and surplus. On January 9, 1998,
in response to the December 30, 1997 request of the Company, the Panel
extended the conditional exception to January 16, 1998, and on January 22, 1998,
the Panel further extended the conditional exception to January 27, 1998, on
which date the Company filed a Form 8-K with the SEC and Nasdaq which contained
a November 30, 1997 balance sheet with proforma adjustments evidencing
compliance with the $4,000,000 capital and surplus requirement set forth in the
Panel's Decision dated January 9, 1998. By letter dated January 29, 1998, Nasdaq
advised the Company that the Company was found to be in compliance with the
terms of its qualifications exception and with all requirements for continued
listing on Nasdaq, and that the hearing file was closed.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
See "Liquidity" and "Subsequent Events" in Item 2 of Part I above.
(Items 3 through 5 have been omitted since the items are either
inapplicable or the answer is negative)
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits
Exhibit 10.1 - Partial Summary Judgment Rosensaft vs. The
Ashton Group, Inc. et al.
Exhibit 11 - Computation of Earnings Per Share.
Exhibit 27 - Financial Data Schedule.
Exhibit 99 - Stock Purchase Agreement, effective as of
the 1st day of November, 1997, by and
among The Ashton Technology Group, Inc.,
George K.Milligan and Susan L. Cavadeas, as
Trustees of the Trust created by the Computer
Science Innovations, Inc., Leveraged ESOP and
Computer Science Innovations, Inc.
(B) Reports on Form 8-K
Form 8-K dated November 6, 1997 was filed pursuant to Item 2
(Disposition of Assets)
Form 8-K dated November 12, 1997 was filed pursuant to Item 5
(Other Events)
Form 8-K dated January 27, 1998 was filed pursuant to Item 5
(Other Events)
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
The Ashton Technology Group. Inc.
---------------------------------
(Registrant)
Date: February 13, 1998 By: /s/ Robert A. Eprile
--------------------------- -------------------------------
Robert A. Eprile
Chairman of the Board
<PAGE>
EXHIBIT INDEX
Exhibit 11 Page
Computation of Earnings Per Share...........................................16
Exhibit 27
Financial Data Schedule.....................................................17
Exhibit 99
Stock Purchase Agreement, effective as of the 1st day of November, 1997, by
and among The Ashton Technology Group, Inc., George K. Milligan and Susan L.
Cavadeas, as Trustees of the Trust created by the Computer Science Innovations,
Inc., Leveraged ESOP and Computer Science Innovations, Inc............18
<PAGE>
<TABLE>
<CAPTION>
Computation of Earnings Per Share
(Unaudited)
Three Months Ended Nine Months Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C>
Weighted average common shares
outstanding 7,562,500 7,562,500 7,562,500 7,150,416
Dilutive effect of common equivalent -- -- -- --
shares(a) --------- -------- -------- --------
Weighted average shares outstanding 7,562,500 7,562,500 7,562,500 7,150,416
========= ========= ========= =========
Net loss $(1,068,331) $(2,046,936) $(3,024,135) $(5,199,487)
=========== =========== =========== ===========
Fully diluted earnings per share(b) $ (.14) $ (.27) $ (.40) $ (.73)
=========== =========== ========== ======
- ---------------------------
(a) Calculates the dilutive effect of outstanding stock options based upon
the "Treasury Stock Method".
(b) As fully diluted earning per share and primary earnings per share
are equal, only fully diluted earnings per share will be disclosed in
the Form 10-QSB.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001003740
<NAME> Ashton Technology Group, Inc.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> OCT-1-1997
<PERIOD-END> DEC-1-1997
<CASH> 853,383
<SECURITIES> 0
<RECEIVABLES> 136,852
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,414,260
<PP&E> 711,305
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,850,718
<CURRENT-LIABILITIES> 994,663
<BONDS> 38,000
0
5,485
<COMMON> 75,625
<OTHER-SE> 2,736,945
<TOTAL-LIABILITY-AND-EQUITY> 3,850,718
<SALES> 3,340,367
<TOTAL-REVENUES> 3,340,367
<CGS> 2,620,896
<TOTAL-COSTS> 6,106,180
<OTHER-EXPENSES> 216,547
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 142,070
<INCOME-PRETAX> (2,982,360)
<INCOME-TAX> 41,775
<INCOME-CONTINUING> (3,024,135)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,024,135)
<EPS-PRIMARY> (.40)
<EPS-DILUTED> (.40)
</TABLE>
STOCK PURCHASE AGREEMENT
AGREEMENT, effective as of the 1st day of November, 1997, by and among
THE ASHTON TECHNOLOGY GROUP, INC., a Delaware corporation ("Ashton" or
"Seller"), GEORGE H. MILLIGAN AND SUSANNE L. CAVADEAS, AS TRUSTEES OF
THE TRUST CREATED BY THE COMPUTER SCIENCE INNOVATIONS, INC. LEVERAGED
ESOP ("CSI Leveraged ESOP" or "Purchaser"), and COMPUTER SCIENCE
INNOVATIONS, INC., a Florida corporation (the "Company").
WHEREAS, Seller owns two million eight hundred forty-one thousand one
hundred forty-four (2,841,144) shares, which sum, as of the date
hereof, represents 83.18% of the total outstanding stock of the
Company; and
WHEREAS, pursuant to the terms and conditions hereof, Seller desires to
sell and Purchaser desires to acquire all of the outstanding stock of
the Company owned by Seller for the consideration set forth
hereinafter.
NOW, THEREFORE, in consideration of the mutual representations,
warranties and covenants contained herein, and intending to be legally
bound hereby, the parties hereto agree as follows:
1. Purchase and Sale of the Company Stock.
At the Closing (as defined in Section 4), Seller shall convey, assign,
transfer and deliver to Purchaser all of Seller's right, title and
interests in and to all of the issued and outstanding shares of stock
of the Company owned by Seller as shown in Exhibit "A" (the "Stock").
Such sale shall be effected by the delivery of certificates and/or
stock endorsed in blank or to the order of Purchaser. Simultaneously
therewith, Purchaser shall deliver to Seller the consideration provided
for in paragraph 2 hereof.
2. Purchase Price.
In consideration for the Company Stock, Purchaser shall pay to Seller a
total purchase price of One Million Seven Hundred Twenty-Three Thousand
Dollars ($1,723,000) (Purchase Price"), as follows:
(A) Purchaser shall pay and shall deliver to the Seller at Closing, by
wire transfer to an account specified by Seller in writing, the amount
of One Million One Hundred Twenty-Eight Thousand Eight Hundred
Seventy-Five Dollars ($1,128,875).
(B) At the Closing, Purchaser shall execute and deliver a promissory
note, ("Promissory Note"), in the amount of Five Hundred Ninety-Four
Thousand One Hundred Twenty-Five Dollars ($594,125) in the form
attached hereto and incorporated herein as Exhibit "B."
3. Grant of Security Interest.
(A) Grant
To secure the Purchaser's prompt, punctual, and faithful performance of
all of the Purchaser's liabilities as set forth in paragraph 2(B)
herein, the Purchaser hereby grants to the Seller a continuing security
interest in and to, and pledges to the Seller, pursuant to the Stock
Pledge Agreement (the "Stock Pledge Agreement") attached and
incorporated herein by reference as Exhibit "C", the following
(hereinafter the "Collateral"):
All rights, title and interest in Nine Hundred Seventy-Nine
Thousand Six Hundred Ninety-Three (979,693) Shares of
common stock of Computer Science Innovations, Inc. Said
Collateral pledged to the Seller consists only of the
number of shares of Company Stock purchased in
consideration for the Promissory Note.
The Collateral shall be held in escrow, pursuant to the terms and
conditions of an Escrow Agreement (the "Escrow Agreement"), attached
and incorporated herein by reference as Exhibit "D."
(B) Duration of Security Interest
Upon each repayment of the principal of the loan, an amount of shares
of Company Stock having a value equal to the amount of such repayment
shall be released from the lien of the Stock Pledge Agreement and
delivered to Purchaser, all as provided therein. Except as aforesaid,
the grant of the security interest shall continue in full force and
effect until all liabilities of the Promissory Note are paid in full.
(C) Guarantee
As additional security to secure the Purchaser's prompt, punctual, and
faithful performance herein, the Company agrees to guarantee to the
Seller the performance and prompt payment to the Seller, when due, of
every obligation that Purchaser is or shall become liable to the Seller
for, in connection with this Agreement or the Promissory Note between
Seller and Purchaser of even date herewith. The Guarantee (the
"Guarantee") shall be in the form attached hereto and incorporated
herein as Exhibit "E."
4. Closing; Effective Date.
The closing of this transaction ("Closing") shall take place on or
before November 1, 1997, at the office of Reinman & Wattwood, P.A., in
Melbourne, Florida, or at such other place and time as may be agreed
upon by the parties hereto ("Closing Date"). The transfer of the
Company Stock and the control of the Company shall be deemed to have
taken place Closing (the "Effective Date").
5. Representations and Warranties of Seller.
The Seller hereby represents and warrants to Purchaser that as of the
date hereof and as of the Effective Date:
(A) Authorization.
Seller has all necessary corporate power and authority to enter into
this Agreement, the Stock Pledge Agreement,, the Escrow Agreement, the
Subordination Agreement and the Indemnification Agreement (the
"Indemnification Agreement"), of even date herewith, with the Company
(collectively, the "Seller Agreements") and has taken all corporate
action necessary to authorize the execution and delivery of each such
agreement and to perform its obligations under each such Agreement.
This Agreement has been duly executed and delivered by Seller.
(B) The Stock.
Seller owns of record and beneficially all of the Company Stock free
and clear of all liens, claims or encumbrances, other than the lien of
the Company under that certain Stock Pledge Agreement of February 18,
1997 (the "Existing Pledge Agreement") by and between Seiler and the
Company, including, without limitation, any agreement, understanding or
restriction affecting the voting rights or other incidents of record or
beneficial ownership pertaining to the Company Stock. Except for the
Existing Pledge Agreement, there are no restrictions upon the voting or
transfer of any shares of the Company Stock pursuant to agreement or
other instrument to which the Seller is a party or by which the Seller
is bound. Upon consummation of the transactions contemplated by this
Agreement, including the, release of the lien of the Company under the
Existing Pledge Agreement as provided in Section 9 hereof, which shall
be deemed to occur simultaneously with the sale of the Company Stock
hereunder, Seller will sell to Purchaser the Company Stock, free and
clear of all liens including the lien of the Company under the Existing
Pledge Agreement.
(C) Enforceability.
Assuming the due execution and delivery of the Seller Agreements by the
other parties thereto, each Seller Agreement is a legal, valid and
binding obligation of Seller, enforceable against Seller in accordance
with its terms.
(D) No Conflict or Violation.
None of the execution and delivery of this Agreement or any other
Seller Agreement nor the consummation of the transactions contemplated
hereby or thereby will result in (a) a violation of or a conflict with
any provision of the Certificate of Incorporation or Bylaws of Seller,
(b) a breach of, a default under, or a right to accelerate with respect
to, any agreement or instrument to which Seller is a party or is
subject or by which Seller or its assets are bound, other than the
Existing Pledge Agreement, or (c) a violation by Seller of any statute,
rule, regulation, ordinance, code, order, judgment, writ, injunction,
decree or award.
(F) Consents and Approvals.
No consent, approval, authorization or other action by, or filing with
or notification to, any governmental or regulatory authority or other
third party is required to be made or obtained by Seller on or prior to
the Closing Date in connection with the execution, delivery and
performance of or any other Seller Agreement and the consummation of
the transactions contemplated hereby or thereby other than the consent
of the Company under the Existing Pledge Agreement.
(F) No Broker or Finder.
No broker's, finder's or any similar fee shall be incurred by, or on
behalf of, Seller in connection with the origin, negotiation, execution
or performance of this Agreement or the transactions contemplated
hereby.
(G) Survival.
All representations and Warranties of Seller shall survive the Closing.
6. Representations and Warranties of Purchaser.
The Purchaser hereby represents and warrants to Seller that as of the
date hereof and as of the Effective Date:
(A) Organization.
Purchaser is an Employee Stock Ownership Plan within the meaning of
Section 4975(c)(7) of the Internal Revenue Code of 1986, as amended
(the "Code"), and is duty organized and existing and in good standing
under the laws of the State of Florida and under all applicable Federal
law, rules and regulations, including, but not limited to, the Employee
Retirement income Security Act of 1974, and as amended ("ERISA").
Without limiting the foregoing, Purchaser is qualified under Section
401(a) of the Code and tax-exempt under Section 501(a) of the Code and
Purchaser complies with all requirements of Section 4975(e)(7) of the
Code, including the applicable provisions of Section 409 of the Code.
(B) Authorization.
Purchaser has all necessary power and authority to enter into this
Agreement, the Promissory Note, the Stock Pledge Agreement, and the
Escrow Agreement (collectively, the "Purchaser Agreements"), and has
taken all action necessary to authorize the execution and delivery
hereof and to perform its obligations hereunder and under each such
agreement and instrument. This Agreement has been duly executed and
delivered by Purchaser.
(C) Bank Commitment.
Purchaser has received an official commitment of SunTrust Bank, Central
Florida, NA. ("Lender"), a true, complete and correct copy of which has
been provided to Seller, to provide credit for the purchase of the
Stock hereunder and for other purposes. Simultaneously with the
execution and delivery of this Agreement, Purchaser is entering into
that certain Loan Modification Agreement, dated as of November 1, 1997
(together with the agreements, documents and instruments referred to
therein, the "Credit Agreement"), with Lender, a true, complete and
correct copy of which also has been provided to Seller, setting forth
the definitive terms of such credit. Such credit, together with other
funds available to Purchaser, will be sufficient to enable Purchaser to
purchase the Stock and to perform its other obligations hereunder.
(D) Enforceability.
Assuming the due execution and delivery of the Purchaser Agreements by
the other parties thereto, each Purchaser Agreement is a legal, valid
and binding obligation of Purchaser, enforceable against Purchaser in
accordance with its terms.
(E) No Conflict or Violation.
None of the execution and delivery of this Agreement or any other
Purchaser Agreement, nor the consummation of the transactions
contemplated hereby or thereby will result in (a) a violation of or a
conflict with any provision of the plan of the Purchaser or its other
constituent documents, (b) a breach of, a default under, or a right to
accelerate with respect to, any agreement or instrument to which
Purchaser is a party or is subject or by which Purchaser or its assets
are bound, including without limitation the Credit Agreement, (c) a
violation by Purchaser of any statute, rule, regulation, ordinance,
code, order, judgment, writ, injunction, decree or award.
(F) Compliance with Code.
The purchase of the Stock by Purchaser complies with Section
4975(d)(13) of the Code and all loans made to Purchaser to finance such
said purchase comply with Section 4975(d)(3) of the Code and the
regulations issued thereunder.
(G) Consents and Approvals.
No consent, approval, authorization or other action by, or filing with
or notification to, any governmental or regulatory authority or other
third party is required to be made or obtained by Purchaser on or prior
to the Closing Date in connection with the execution, delivery and
performance of this Agreement or any other Purchaser Agreement and the
consummation of the transactions contemplated hereby or thereby.
(H) Solvency.
On the Closing Date, after giving effect to the consummation of- t-he
transactions contemplated hereunder, including without limitation the
issuance by the Company of the Guaranty and the guaranty of the
indebtedness of the Purchaser to Seller, (i) the Company will not have,
as of such date, an unreasonably small amount of working capital with
which to conduct its business, and (ii) the Company, according to
Company projections, will be able to pay it debts as they mature. For
purposes of this Section H, "debt" means "liability on a claim" and
"claim" means (i) any right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured, and (ii) a right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or
not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured or unmatured, disputed, undisputed, secured or
unsecured.
(I) Sufficiency of Tax Deductible Contributions.
The Company has previously provided to Seller a schedule of projected
earnings, incorporating projected payroll and proposed ESOP
contributions. The tax-deductible contributions set forth in said
schedule will be sufficient to enable Purchaser to make all payments of
principal of and interest on the Promissory Note and its indebtedness
to the Lender as and when the same are due and payable.
(J) Access to Information; Investment Intent; Restricted Securities.
Purchaser is a sophisticated investor, has had the opportunity to
obtain from Seller and the Company such information regarding Seller,
the Company and the Company's business as it has deemed material to the
purchase of the Company Stock, and is purchasing the Company Stock for
its own account with investment intent and not with a view to or for
resale in connection with any distribution thereof. Purchaser will not
offer or sell the Company Stock except in compliance, with the
Securities Act of 1933, as amended, and any applicable state securities
laws, or pursuant to exemptions therefrom.
(K) No Broker or Finder.
No broker's, finder's or any similar fee shall be incurred by, or on
behalf of, Purchaser in connection with the origin, negotiation,
execution or performance of this Agreement or the transactions
contemplated hereby.
(L) Survival.
All representations and warranties of Purchaser shall survive the
Closing.
7. Representations and Warranties of Company.
The Company hereby represents and warrants to Seller and Purchaser that
as of the date hereof and as of the Effective Date:
(A) Organization.
The Company is a corporation duly organized and existing in good
standing under the laws of the State of Florida.
(B) Authorization.
The Company has all necessary corporate power and authority to enter
into this Agreement, the Guarantee, the Escrow Agreement and the
Indemnification Agreement (collectively, the "Company Agreements") and
has taken all action necessary to authorize the execution and delivery
of each such agreement and to perform its obligations hereunder and
thereunder. Each Company Agreement has been duly executed and delivered
by the Company.
(C) Capitalization.
The issued stock of the Company consists solely of 3,538,984 shares of
common stock $.01 par value. Of said sum, 1,459,889 shares are Class A,
Voting Common, and 2,079,095 shares are Class B, Non-Voting Common. All
of the issued shares of are validly issued, fully paid and
non-assessable. There are no existing options, warrants, calls,
preemptive rights, or commitments of any kind relating to the
authorized and unissued stock of the Company.
(D) Enforceability.
Assuming the due execution and delivery of the Company Agreements by
each of the other parties thereto, each Company Agreement is a legal,
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms.
(E) No Conflict or Violation.
None of the execution and delivery of this Agreement or any other of
the Company Agreements nor the consummation of the transactions
contemplated hereby or thereby will result in (a) a violation of or a
conflict with any provision of the Certificate of Incorporation or
Bylaws, (b) a breach of, a default under, or a right to accelerate with
respect to, any agreement or instrument to which the Company is a party
or is subject or by which Company or its assets are bound, including
without limitation, the guaranty of Purchasers indebtedness to Lender
(the "Unlimited Continuing Guaranty Agreement") of even date hereof, or
(c) a violation by the Company of any statute, rule, regulation,
ordinance, code, order, judgment, writ, injunction, decree or award.
(F) Consents and Approvals.
No consent, approval, authorization or other action by, or filing with
or notification to, any governmental or regulatory authority or other
third party is required to be made or obtained by the Company on or
prior to the Closing Date in connection with the execution, delivery
and performance of this Agreement or any other Company Agreement and
the consummation of the transactions contemplated hereby or thereby,
except for the rights of minority shareholders under Florida law, which
will be timely complied with by November 10, 1997, or sooner.
(G) No Broker or Finder.
No broker's, finder's or any similar fee shall be incurred by, or on
behalf of, the Company in connection with the origin, negotiation,
execution or performance of this Agreement or the transactions
contemplated hereby.
(H) Survival.
All representations and warranties of the Company shall survive the
Closing.
8. Covenants of Company.
Dissenters' Rights. Company agrees to take all actions necessary to
provide notice to all Class A, Voting common shares that the Articles
of Incorporation have been amended simultaneously herewith as required
by Florida Statutes, Chapter 607. Additionally, in the event any
holders of Class A, Voting Common shares exercise their dissenter
rights ("Dissent Rights"), the Company shall take all actions necessary
to pay the dissenting shareholder the fair value of the shares.
9. Prior Relationship of Ashton to Company.
Both parties acknowledge and agree that in addition to an existing
shareholder, parent-subsidiary relationship, Ashton and Company have
previously negotiated and executed a Short-Term Loan Agreement,
Promissory Note, Stock Pledge Agreement and Escrow Agreement, effective
February 18, 1997 (collectively "Short-Term Loan Documents").
Ashton agrees to, simultaneously with the Closing, pay Company the sum
of Five Hundred Twenty-Eight Thousand Eight Hundred and Seventy-Five
Dollars ($528,875) in full satisfaction of its obligations under the
terms of said Short-Term Loan Documents.
Upon receipt of said sum, the Company releases and forever discharges
Ashton of its obligations under the terms of the Short-Term Loan
Documents, which without any further action by the parties (including
the Escrow Agent thereunder) shall be terminated and deemed to be of in
further force and effect.
Additionally, Ashton and Company acknowledge that they are bound by
that certain Tax Allocation Agreement ("Tax Agreement"), dated March
27, 1997, attached and incorporated herein by reference as Exhibit "F".
Ashton and Company specifically agree that simultaneously with the
other transactions hereunder, and without further actions by the
parties thereto, the Tax Agreement shall be terminated as of the
Effective Date. Notwithstanding the above, Ashton and Company shall
comply with and fulfill all of their obligations of the Tax Agreement
related to tax matters occurring on or before the Effective Date.
10. Conditions Precedent to Closing.
(A) Seller's obligations under Section 1 hereof shall be subject to
the fulfillment to Seller's reasonable satisfaction prior to or at the
Closing of the following conditions:
(i) The following transactions shall have been consummated and
deliveries shall have been made, in each case in a manner reasonably
satisfactory to Seller:
(a) Purchaser shall have paid to Seller the amount specified in
Section 2.
(b) Purchaser shall have duly made and delivered to Seller the
Promissory Note.
(c) Purchaser shall have duly executed and delivered to this
Agreement, the Escrow Agreement, and the Pledge. Agreement and shall
have delivered to the Escrow Agent ("Escrow Agent") the Pledged Shares
(as defined in the Pledge Agreement) together with duly executed stock
powers.
(d) The Company shall have duly executed and delivered to Seller
this Agreement, the Escrow Agreement and the Guarantee and shall have
returned to Seller the Existing Promissory Note, marked and
acknowledged by the Company to have been "paid in full."
(e) Seller shall have received a certificate of an authorized
officer of each of Purchaser and the Company, dated the Closing Date,
certifying that the conditions specified in this Section 10(A) have
been fulfilled.
(ii) Seller shall have received an opinion reasonably
satisfactory to Seller, dated the Closing Date, from counsel to the
Purchaser and the Company, covering the sale of the Company Stock, and
such other matters thereto and hereto as Seller shall reasonably
require and otherwise in form and substance (including any limitations
and qualifications) reasonably satisfactory to Seller and its counsel.
(iii) All proceedings and documents in connection with or
incidental to the sale of the company Stock shall be reasonably
satisfactory to Seller and Seller's counsel, and Seller and Seller's
counsel shall have received all such counterpart originals or copies
of such documents as it or they may reasonably request.
(iv) The representations and warranties made by each of Purchaser
and the Company herein and in the Pledge Agreement and the Guaranty
Agreement shall be correct in all material respects at and as of the
time of the Closing.
(v) Each of Purchaser and the Company shall have, performed all
of the agreements and complied with all conditions contained herein
and in the Pledge Agreement and the Guaranty Agreement, in each case
required Eo be performed or complied with by it prior to or at the
Closing, and at the time of the closing no default under any of the
foregoing shall exist.
(B) Purchaser's obligations under Section 2 hereof shall be subject to
the fulfillment to Purchaser's reasonable satisfaction prior to or at
the Closing of the following conditions:
(i) The following transactions shall have been consummated and
deliveries shall have been made, in each case in a manner reasonably
satisfactory to Purchaser:
(a) Seller, in its role as majority shareholder of Company, shall have
taken all action reasonably proposed or requested by the Company, to
convert all of Company's Class B, Non-Voting Shares into Class A,
Voting Common Shares, on a one basis.
(b) Seller shall have duly delivered to Purchaser the Company Stock
together with duly executed stock powers.
(c) Seller shall have duly executed and delivered to Purchaser this
Agreement and the Pledge Agreement.
(d) Seller shall have paid to the Company the amount set forth in
Section 9 hereof.
(e) Purchaser shall have received a certificate of an authorized
officer of Seller, dated the Closing Date, certifying that the
conditions specified in this Section 10(B) have been fulfilled.
(ii) All proceedings and documents in connection with or
incidental to the sale of the Company Stock shall be reasonably
satisfactory to Purchaser and Purchaser's counsel, and Seller and
Seller's counsel shall have received all such counterpart originals or
copies of such documents as it or they may reasonably request.
(iii) The representations and warranties made by Seller herein
shall be correct in all material respects at and as of the time of the
Closing.
(iv) Seller shall have performed all of the agreements and
complied with all conditions contained herein, in each case required
to be performed or complied with by it prior to or at the Closing.
11. Cross Indemnification.
(A) Indemnification by Purchaser.
Provided the sale of the Company Stock hereunder is consummated,
Purchaser shah defend, indemnify and hold harmless Seller and its
officers and directors from and against all losses, claims, demands,
causes of action, suits, deficiencies, judgments, debts, liabilities,
damages and expenses (including reasonable attorneys' fees) resulting
from any misrepresentations, breaches of warranty or nonfulfillment of
any condition or obligation on the part of Purchaser under this
Agreement.
(B) Indemnification by Seller.
Provided the sale of the Company Stock hereunder is consummated, Seller
agrees to defend, indemnify and hold harmless Purchaser and the Company
and the officers and directors of each of them from and against all
losses, claims, demands, causes of actions, deficiencies, suits,
judgments, debts, liabilities, damages and expenses (including
reasonable attorneys' fees) resulting from any misrepresentations,
breaches of warranty or nonfulfillment of any condition or obligation
on the part of Seller under this Agreement.
(C) Indemnification by the Company.
Provided the sale of the Company Stock hereunder is consummated, the
Company agrees to defend, indemnify and hold harmless Purchaser and
Seller and the officers and directors of each of them from and against
all losses, claims, demands, causes of action, deficiencies, suits,
judgments, debts, liabilities, damages and expenses (including
reasonable attorneys' fees) ruling from any misrepresentations,
breaches of warranty or nonfulfillment of any condition or obligation
on the part of the Company under this Agreement.
12. Miscellaneous.
(A) Expenses.
Purchaser, Seller and Company shall each pay their own expenses
incidental to the negotiation, preparation and performance of this
Agreement and the transactions contemplated hereunder, whether or not
such transactions are consummated.
(B) Exhibits and Schedules; Entire Agreement.
All Exhibits and Schedules hereto are incorporated herein by reference
and made a part hereof. This Agreement constitutes the entire agreement
concerning the subject matter hereof. No modification or waiver hereof
shall be binding upon any party unless in writing and signed by or an
behalf of the party against which the modification or waiver is
asserted.
(C) Notices.
Any notice hereunder shall be deemed to be duly given if sent by
prepaid first class registered mail to:
(i) Purchaser at:
George H. Milligan and Susanne L. Cavadeas,
as Trustee of the Trust Created by the
Computer Science Innovations, Inc.
Leveraged ESOP
1235 Evans Road
Melbourne, Florida 32904-2314
Copy to:
Reinman & Wattwood, P.A.
Attention: James L. Reinman, Esquire
Victor S. Kostro, Esquire
1825 S. Riverview Drive
Melbourne, Florida 32901
(ii) Seller at:
Ashton Technology Group, Inc.
Fredric W. Rittereiser, President and CEO
1900 Market Street, Suite 701
Philadelphia, Pennsylvania 19103
Copy to:
Cadwalader, Wickersham & Taft
Attention: Harvey Spear, Esq.
100 Maiden Lane
New York, New York 10038A
or to such place as any party wishing to change its address may from time to
time designate in writing.
(D) Governing Law.
This Agreement shall be construed under and governed by the laws of the
State of Florida.
(E) Successors and Assigns; Other Parties.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, assigns, heirs, and
personal representatives. Except as specifically provided elsewhere
herein, nothing herein shall entitle any person other than the parties
hereto and their respective successors, assigns, heirs and personal
representatives, to any claim, cause of action, remedy or right of any
kind.
(F) Further Assurances.
At any time from time to time after the Closing, the parties shall
execute and deliver such other instruments and take such other action
as may be reasonably required to accomplish the transactions
contemplated by this Agreement.
(G) Resignations.
At the Closing, the Company shall receive the resignations of all its
directors effective as of the Closing.
(H) Counterparts.
This Agreement may be executed in two or more counterparts, any or all
of which shall constitute one and the same agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date and year first above written.
Attest: THE ASHTON TECHNOLOGY GROUP, INC.
/s/ John A. Blohm By: /s/ Fredric W. Rittereiser
John A. Blohm (Name) Fredric W. Rittereiser (Name)
Secretary (Title) President (Title)
GEORGE H. MILLIGAN AND SUSANNE L. CAVADEAS,
AS TRUSTEES OF THE TRUST CREATED BY THE
COMPUTER SCIENCE INNOVATIONS, INC., LEVERAGED ESOP
By: /s/
George H. Milligan, as Trustee
By: /s/
Susanne L. Cavadeas, as Trustee
"CSI Leveraged ESOP" or "Purchaser"
Attest: COMPUTER SCIENCE INNOVATIONS, INC.
/s/
(Name) By: /s/
(Title) George H. Milligan, President
(SEAL)
"Company"
