<PAGE>
EXHIBIT 99.3
CMPEXPRESS.COM, INC.
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Report of Independent Accountants............................................................. 8
Balance Sheets, at December 31, 1999 and August 31, 2000 (Unaudited).......................... 9
Statements of Operations, for the Year Ended December 31, 1999 and Eight Months Ended
August 31, 1999 and 2000 (Unaudited)......................................................... 10
Statements of Changes in Stockholders' Equity (Deficit), for the Year Ended December 31, 1999
and Eight Months Ended August 31, 2000 (Unaudited)........................................... 11
Statements of Cash Flows, for the Year Ended December 31, 1999 and Eight Months Ended
August 31, 1999 and 2000 (Unaudited)......................................................... 12
Notes to Financial Statements................................................................. 13
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders of
CMPExpress.com, Inc.:
In our opinion, the accompanying balance sheet and the related statement of
operations, changes in stockholders' equity and cash flows present fairly, in
all material respects, the financial position of CMPExpress.com, Inc. at
December 31, 1999 and the results of its operations and its cash flows for the
year then ended, in conformity with accounting principles generally accepted in
the United States of America. These financial statements are the responsibilty
of the Company's management; our responsibility is to express an opinion on
these financial statements based on our audit. We conducted our audit of these
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
March 3, 2000, except for Note 10,
as to which the date is August 16, 2000
8
<PAGE>
CMPEXPRESS.COM, INC.
Balance Sheets
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, AUGUST 31,
1999 2000
---- ----
(unaudited)
Assets
<S> <C> <C>
Current Assets:
Cash and cash equivalents ........................ $ 349 $ 385
Accounts receivable, net ......................... 5,514 5,558
Other current assets ............................. 59 247
-------- --------
Total current assets .......................... 5,922 6,190
Property and equipment, net ........................ 416 843
Other assets ....................................... 33 52
-------- --------
Total assets .................................. $ 6,371 $ 7,085
======== ========
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable ................................. 4,463 6,033
Accrued expenses ................................. 464 513
Line of credit ................................... -- 1,554
Notes payable .................................... -- 930
Refunds due to customers ......................... 406 467
-------- --------
Total current liabilities ..................... 5,333 9,497
Capital lease obligations, excluding current portion -- 106
Other liabilities .................................. -- 1,029
-------- --------
Total liabilities ............................. 5,333 10,632
Stockholders' equity:
Redeemable preferred stock ....................... 2,938 3,140
Common stock ..................................... 8 8
Additional paid-in capital ....................... 163 708
Accumulated deficit .............................. (2,071) (7,403)
-------- --------
Total stockholders' equity .................... 1,038 (3,547)
-------- --------
Total liabilities and stockholders' equity .... $ 6,371 $ 7,085
======== ========
</TABLE>
See accompanying notes to the financial statements.
9
<PAGE>
CMPEXPRESS.COM, INC.
STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
EIGHT MONTHS EIGHT MONTHS
YEAR ENDED ENDED ENDED
DECEMBER 31, AUGUST 31, AUGUST 31,
1999 1999 2000
---- ---- ----
(unaudited) (unaudited)
<S> <C> <C> <C>
Net sales......................................................... $42,836 $28,201 $38,651
Cost of sales..................................................... 39,329 26,147 35,104
------- ------- -------
Gross profit.................................................... 3,507 2,054 3,547
Operating expenses:
Sales and marketing............................................. 2,702 1,620 3,192
General and administrative...................................... 2,742 1,335 3,681
------- ------- -------
Total operating expenses..................................... 5,444 2,955 6,873
------- ------- -------
Loss from operations............................................ (1,937) (901) (3,326)
Other income (expense), net....................................... 46 24 (1,804)
------- ------- -------
Net loss........................................................ $(1,891) $ (877) $(5,130)
======= ======= =======
</TABLE>
See accompanying notes to the financial statements.
10
<PAGE>
CMPEXPRESS.COM, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
REDEEMABLE RETAINED
PREFERRED STOCK COMMON STOCK ADDITIONAL EARNINGS
------------------ ------------------ PAID-IN (ACCUMULATED
SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT) TOTAL
--------- ------- ---------- ------ ------------ ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1998.......................... -- -- 10,000,000 $ 1 $ 20 $ 766 $ 787
Net loss.............................................. -- -- -- -- -- (1,891) (1,891)
Issuance of common stock.............................. -- -- -- 7 143 -- 150
Subchapter S distribution............................. -- -- -- -- -- (820) (820)
Issuance of Series A Preferred Stock.................. 3,000,000 $2,812 -- -- -- -- 2,812
Accretion of Series A Preferred Stock................. -- 126 -- -- -- (126) --
--------- ------ ---------- ------ ------ ------- -------
Balance at December 31, 1999.......................... 3,000,000 2,938 10,000,000 8 163 (2,071) 1,038
Accretion of Series A Preferred Stock (unaudited)..... -- 202 -- -- -- (202) --
Issuance of restricted stock (unaudited).............. -- -- -- -- 545 -- 545
Net loss (unaudited).................................. -- -- -- -- -- (5,130) (5,130)
--------- ------ ---------- ------ ------ ------- -------
Balance at August 31, 2000 (unaudited)................ 3,000,000 $3,140 10,000,000 $ 8 $ 708 $(7,403) $(3,547)
========= ====== ========== ====== ====== ======= =======
</TABLE>
See accompanying notes to the financial statements.
11
<PAGE>
CMPEXPRESS.COM, INC.
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
EIGHT MONTHS EIGHT MONTHS
YEAR ENDED ENDED ENDED
DECEMBER 31, AUGUST 31, AUGUST 31,
1999 1999 2000
---- ---- ----
(UNAUDITED) (UNAUDITED)
------------- -------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss......................................................... $(1,891) $ (877) $(5,130)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation.................................................... 76 45 108
Issuance of common stock grants................................. -- -- 545
(Increase) in operating assets:
Accounts receivable............................................ (3,955) (1,139) (44)
Advance to stockholder......................................... -- 529 --
Other assets and deposits...................................... (73) (50) (207)
(Decrease) increase in operating liabilities:
Accounts payable............................................... 1,900 353 1,570
Accrued expenses and other liabilities......................... 244 (122) 78
Refunds due to customers....................................... 184 86 61
------- ------- -------
Net cash used in operating activities......................... (3,515) (1,175) (3,019)
------- ------- -------
Cash flows from investing activities:
Purchases of property and equipment.............................. (360) (247) (429)
------- ------- -------
Net cash used in investing activities......................... (360) (247) (429)
------- ------- -------
Cash flows from financing activities:
Increase in line of credit....................................... -- -- 1,554
Increase in notes payable........................................ -- -- 930
Issuance of convertible notes payable............................ -- -- 1,000
Sale of common shares............................................ 7 7 --
Payments to stockholder.......................................... 529 -- --
Sale of preferred shares......................................... 2,812 2,837 --
Increase in additional paid in capital........................... 143 143 --
Distributions to shareholders.................................... (820) (820) --
------- ------- -------
Net cash provided by financing activities..................... 2,671 2,167 3,484
------- ------- -------
Net increase (decrease) in cash and cash equivalents.......... (1,204) 745 36
------- ------- -------
Cash and cash equivalents, beginning of period................ 1,553 1,553 349
Cash and cash equivalents, end of period...................... $ 349 $ 2,298 $ 385
======= ======= =======
Supplemental disclosure of cash paid for interest and taxes:
Interest......................................................... $ 2 $ 1 $ 115
======= ======= =======
Taxes............................................................ $ 16 $ 2 $ 3
======= ======= =======
</TABLE>
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS:
During the eight month period ended August 31, 2000, we acquired assets by
incurring capital lease obligations of approximately $139,000.
See accompanying notes to financial statements.
12
<PAGE>
CMPEXPRESS.COM, INC.
NOTES TO FINANCIAL STATEMENTS
Note 1 - The Company
CMPExpress.com, Inc. ("CMP" or the "Company"), an on-line retailer of computer
hardware and software that sells products to businesses, education, government
and consumer end-users, was incorporated in Pennsylvania on April 9, 1987. The
Company operates in a single segment.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturities
of three months or less to be cash equivalents. Cash equivalents are stated at
cost, which approximates market value.
Revenue Recognition
Net sales are comprised of product sales, net of returns and allowances.
Product sales are comprised of computer hardware, software and peripherals
manufactured by third parties and are recognized when the products are shipped
to customers. The Company records a reserve for estimated sales returns at the
time of shipment based on historical return rates.
Property and Equipment
Property and equipment are stated at cost. Depreciation is provided over the
estimated useful life of each class of assets using the straight-line and
accelerated methods. The Company depreciates furniture and fixtures over seven
years; office equipment over five years; and vehicles over five years. Leasehold
improvements are capitalized and amortized on the straight-line basis over the
shorter of their useful life or the term of the lease. Maintenance and repairs
are expensed as incurred. When the property or equipment is retired or otherwise
disposed of, related costs and accumulated depreciation are removed from the
accounts and any resulting gain or loss is included in operations.
Advertising Expense
Advertising costs are expensed as incurred. Advertising expense charged to
operations was $59,855 for the year ended December 31, 1999.
Concentration of Credit Risk
Financial instruments which potentially subject the Company to a
concentration of credit risk principally consist of cash and cash equivalents
and trade accounts receivable. The Company has its cash and cash equivalents
placed with a high quality, creditworthy financial institution. The balances at
such institutions at December 31, 1999 and periodically throughout the year are
in excess of federally insured limits. As part of its cash management process,
the Company performs periodic evaluation of the relative credit standing of
these institutions. Concentrations of credit risk with respect to accounts
receivable are limited, due to the large number of customers comprising the
Company's customer base and their dispersion across may geographies. The Company
generally does not require collateral or other security to support customer
receivables.
13
<PAGE>
CMPEXPRESS.COM, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
Vulnerability Due to Certain Concentrations
The Company is dependent upon two major suppliers of hardware and software
products. At December 31, 1999, 90% of accounts payable were due to these
suppliers as well as 94% of cost of sales that were attributable to the same two
suppliers.
Estimates Utilized in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the dates of the financial statements and
the reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates.
Stock-Based Compensation
Stock-based compensation is recognized using the intrinsic value method
prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock
issued to Employees", and related interpretations. Accordingly, compensation
expense for stock options is measured as the excess, if any, of the fair value
of the Company's stock at the date of grant over the amount an individual must
pay to acquire the stock and amortized over the vesting period. All
transactions, with other than employees in which goods and services are the
consideration received for the issuance of equity instruments, such as stock
options, are expensed based on the fair value of the consideration received or
the fair value of the equity instruments issued, whichever is more reliably
measured. The Company has adopted the disclosure only provisions of Statement of
Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS
123) (see Note 9).
Reporting Comprehensive Income
During 1998, the Company adopted Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income" ("SFAS 130), which establishes
standards for reporting and display of comprehensive income and its components
(revenues, gains and losses) in a full set of general purpose financial
statements. The comprehensive income and related cumulative equity impact of
comprehensive income items are required to be reported in a financial statement
that is displayed with the same prominence as other financial statements. At
December 31, 1999, there were no components of comprehensive income for
disclosure.
Recent Accounting Pronouncements
In June 1998, the FASB issued SFAS 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement establishes accounting and
reporting standards requiring that every derivative instrument be recorded on
the balance sheet as either an asset or liability measured at its fair value.
SFAS 133 also required that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. In June
1999, the FASB issued SFAS No. 137, which defers the effective date of SFAS 133
to fiscal years beginning after June 15, 2000. The Company does not expect the
adoption of SFAS 133 to have a material effect on the Company's results of
operations, financial position or cash flows.
14
<PAGE>
CMPEXPRESS.COM, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
DECEMBER 31,
1999
----
(IN THOUSANDS)
Property and equipment:
Equipment..................................................... $ 477
Furniture and fixtures........................................ 64
Vehicles...................................................... 13
Software...................................................... 14
Leasehold improvements........................................ 19
-------
587
Less accumulated depreciation.................................. (171)
-------
Property and equipment, net................................. $ 416
=======
Depreciation expense for the year ended December 31, 1999 was $75,880.
NOTE 4 - DEBT
During the year ended December 31, 1999, the Company entered into a line-of-
credit agreement with a bank for $3,000,000 that allows borrowings of up to 80%
of the Company's qualified accounts receivable. There was no outstanding balance
at December 31, 1999. The interest rate is equal to the prime rate.
NOTE 5 - ADVANCE TO STOCKHOLDER
The Company periodically advances amounts to the majority stockholder. The
advance bears interest at 6% per annum. The principal balance at December 31,
1999 was $0, and the accrued interest receivable balance at December 31, 1999
was $11,742.
On July 30, 1999, the Company terminated its chapter S status and converted to
a C Corporation (see Note 9). Upon termination, the Company made a distribution
to the stockholder then used the distribution proceeds to repay the $528,825
advance due to the Company.
NOTE 6 - COMMITMENTS AND CONTINGENCIES
Operating Leases:
The Company leases facilities for use in their operations. Total rent expense
for operating leases for the period ended December 31, 1999 amounted to
appoximately $188,213.
15
<PAGE>
CMPEXPRESS.COM, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
The future minimum lease payments for noncancelable operating leases for each
fiscal year ended December 31 are as follows:
(IN THOUSANDS)
2000...................................................... $ 289
2001...................................................... 263
2002...................................................... 103
2003...................................................... 102
2004...................................................... 60
Thereafter................................................ --
------
Total................................................... $ 817
======
NOTE 7 - EMPLOYEE BENEFIT PLAN
Effective February 1, 1998, the CMPExpress.com, Inc. 401 (k) Savings Plan was
established. The plan covers all eligible employees of the Company and allows
participants to make contributions by salary reduction pursuant to Section 401
(k) of the Internal Revenue Code. The Company contributes 50% of the first 6% of
base compensation that a participant contributes to the Plan. Employees may
contribute up to 15% of their annual compensation. Employees vest immediately in
their contributions and vest in the Company's contributions over a six-year
period of service. Expense recognized under the Retirement Plan in fiscal 1999
was $20,434.
NOTE 8 - INCOME TAXES
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at December 31,
1999, are as follows:
(IN THOUSANDS)
Deferred tax assets:
Federal net operating loss carryforwards...................... $ 382
Accounts receivable reserves.................................. 88
-------
470
Valuation allowance........................................... (465)
-------
5
-------
Deferred tax liabilities:
Property, plant and equipment................................. 5
-------
5
-------
Net deferred tax asset........................................ $ --
=======
A reconciliation of the U.S. statutory income tax rate to the effective rate
(excluding the effect of the change in tax status) is as follows:
1999
----
U.S. statutory income tax rate................................. 34.00%
State taxes, net of federal.................................... 6.59%
-----
Effective tax rate............................................. 40.59%
=====
16
<PAGE>
CMPEXPRESS.COM, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
Prior to July 31, 1999, CMPExpress was an S Corporation for federal and state
tax purposes and therefore not subject to federal or state income taxes. After
July 31, 1999, the Company is subject to federal income taxes. Due to losses,
the Company has a net operating loss which may be limited due to ownership
changes under IRC Section 382. Due to the uncertainty of the ownership, changes
and potential ability to use the losses the net deferred asset has a 100%
valuation allowance applied to it.
Note 9 - Stockholders' Equity
Effective July 22, 1998, the Board of Directors declared a 9,500-for-one stock
split effected in the form of a distribution of 9,499 shares of authorized
common stock, no par value per share, for each one outstanding share of common
stock. All common stock share and par value data have been retroactively
adjusted to reflect this change. Additionally, the Board of Directors approved
the adoption of the 1998 Equity Compensation Plan, which provides for the
issuance of a maximum of 500,000 shares of common stock, no par value per share,
pursuant to grants of stock options or restricted stock.
In April 1998, the shareholders authorized an amendment and restatement to the
Company's Articles of Incorporation, changing the name of the Company to
CMPExpress.com, Inc. and authorizing the Company to issue 20,000,000 shares of
common stock, no par value per share, and 10,000,000 shares of preferred stock,
no par value per share. As a result, the 9,500,000 authorized shares of common
stock, $1 par value per share, were converted into the no par value common
stock.
In March 1998, the Company entered into an employment and subscription
agreement with an officer of the Company whereby the officer purchased 500,000
shares of common stock for an aggregate purchase price of $20,000.
STOCK OPTION PLAN:
In July 1998, the Company adopted the 1998 Equity Compensation Plan ("1998
Plan"), as amended. This plan provides for the granting of stock options to
officers, directors, employees and consultants. Grants under this plan may
consist of options intended to qualify as incentive stock options ("ISOs"), or
nonqualified stock options that are not intended to so qualify ("NQSOs"). The
option price of any ISO will not be less than the fair market value on the date
the option is granted (110% of fair value in certain instances). The option
price of a NQSO may be greater than, equal to, or less than the fair market
value on the date the option is granted. The 1998 Plan authorizes a maximum of
500,000 shares of common stock.
The Plan is administered by the board of directors. The board of directors
determines the term of each option, provided, however, that the exercise period
may not exceed ten years from the date of grant, and for ISOs, in certain
instances, may not exceed five years. The options granted under this plan vest
ratably over a five-year period from the date of grant.
If compensation expense had been determined based on the fair value of the
options at the grant dates for those options for which no compensation expense
has been recognized, consistent with the method of SFAS 123, the Company's net
loss would have been:
1999
----
(IN THOUSANDS)
Net loss:
As reported.......................................... $(1,891)
Pro forma............................................ $(1,946)
17
<PAGE>
CMPEXPRESS.COM, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
Such pro forma disclosures may not be representative of future compensation
expense because options vest over several years and additional grants are made
each year.
The fair value of each option grant is estimated on the date of grant using
the Black-Scholes minimum value option valuation model with the following
weighted-average assumptions used for grants in 1998 and 1999, dividend yield of
0%; expected volatility of 0%; risk-free interest rate of 5.29% and 6.43%; and
expected lives of 10 and 5 years.
A summary of the status of the Company's stock option plan as of December 31,
1999 and the change during the year ended is represented below.
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
EXERCISE
SHARES PRICE
------ ---------
<S> <C> <C>
Outstanding, beginning of year................................................ 38,000 $ .10
Granted....................................................................... 1,258,268 2.15
Cancelled/forfeited........................................................... (17,000) .10
---------
Outstanding, end of year...................................................... 1,279,268 2.12
=========
Options exercisable at year-end............................................... (11,242)
=========
Weighted average fair value of options granted during the year................ $ .58
=======
</TABLE>
The following table summarized information about nonqualified options
outstanding at December 31, 1999:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------- -------------------
WEIGHTED
NUMBER AVERAGE WEIGHTED WEIGHTED
RANGE OF OUTSTANDING AT REMAINING AVERAGE AVERAGE
EXERCISE DECEMBER 31, CONTRACTUAL EXERCISE EXERCISE
PRICES 1999 LIFE PRICE SHARES PRICE
------ ---- ---- ----- ------ -----
<S> <C> <C> <C> <C> <C>
$ .10 44,000 8.9 $ .10 5,800 $ .10
2.19 1,235,268 9.6 2.19 5,442 2.19
--------- ------
1,279,268 11,242
========= ======
</TABLE>
Convertible Mandatory Redeemable Preferred Stock:
The holders of the Series A Preferred Stock will accrue dividends at a rate of
8% of the Series A stated value per annum. The dividends are cumulative. On July
31, 2002, all accrued dividends will be paid to the holders of the Series A
Preferred Stock and will be paid thereafter on an annual basis. If the Company
consummates an initial public offering before January 2001, no dividends will be
payable to the holders.
Upon any liquidation, dissolution or winding up of the Company, liquidation
proceeds will be distributed to the holders of the Series A Preferred Stock in
an amount equal to the Series A stated value per share, plus all accrued and
unpaid dividends. The remainder of any assets of the Company available for
distribution will be distributed to the holders of the Series A Preferred Stock
and then to the holders of any classes of stock ranking in liquidation junior to
the Series A Preferred Stock on a pro rata basis.
18
<PAGE>
CMPEXPRESS.COM, INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
Each holder of Series A Preferred Stock has the right to cause the Company to
redeem up to 25% of the shares held commencing on July 30, 2004, and for each of
the three years thereafter. The redemption price is equal to the stated value,
plus all accrued and unpaid dividends. In accordance with terms of the Series A
Preferred Stock agreement, there are other triggering events for mandatory
redemption. If the Company fails to redeem the shares, in accordance with
certain terms, the redemption price will bear interest at the rate of 10% per
annum.
Each holder of Series A Preferred Stock has the right to convert their shares
into common stock determined by multiplying $1.00, plus all accrued and unpaid
dividends per share, by the number of Series A Preferred Stock being converted,
then divide that product by the conversion price $2.1905. The conversion price
is subject to change based on the occurrence of certain events as defined in the
Series A Preferred Stock agreement.
The holders of Series A Preferred Stock have voting rights on a converted
basis equivalent to those of common stockholders on most matters. However, the
approval of a majority of Series A Preferred Stockholders is required for
certain transactions.
On July 30, 1999, the Company sold 3,000,000 shares of Series A Preferred
Stock for $3,000,000. Issuance costs related to the sale were $188,524.
On July 30, 1999, the Board of Directors created a new series of preferred
stock called Series A Convertible Preferred Stock ("Series A Preferred Stock").
The Board authorized 3,000,000 shares with no par value and a stated value $1.00
per share.
Note 10 - Subsequent Event:
In August 2000, the Company issued 2,525,853 shares of restricted stock to
certain members of management. This restricted stock has a one-year vesting
period and accelerated vesting upon a change in control of the Company.
Additionally, in August 2000, the Company issued 350,000 shares of restricted
stock to board members which have immediate vesting. As a result of this
transaction, a charge for approximately $545,000 was recorded in the August 2000
statement of operations.
19
