SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K/A No. 1
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities and Exchange Act of 1934
Amendment No. 1 to Form 8-K filed on August 6, 1997 (Date of earliest
event reported was July 22, 1997)
INFODATA SYSTEMS INC.
-----------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Virginia 0-10416 16-0954695
--------------------------- ------------ --------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
Number)
12150 Monument Drive
Suite 400
Fairfax, Virginia 22033
---------------------------------------- ----------
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (703) 934-5205
--------------
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Current Report on Form 8-K,
filed on August 6, 1997, as set forth in the pages attached hereto:
Item 7(a) - Financial Statements
Item 7(b) - Pro Forma Financial Information
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
INFODATA SYSTEMS INC.
October 6, 1997 By:/s/Harry Kaplowitz
---------------------
Harry Kaplowitz
President
<PAGE>
The Current Report on Form 8-K of Infodata Systems Inc. (the
"Registrant"), dated July 22, 1997, and filed on August 6, 1997, reported the
acquisition by the Registrant of 100% of the issued and outstanding capital
stock of AMBIA Corporation, a California corporation ("AMBIA"), through the
issuance of 400,000 shares of the Registrant's common stock, par value $.03
per share (the "Common Stock"), to AMBIA's shareholders, Alan Fisher and Razi
Mohiuddin (collectively, the "Shareholders"). Item 7 of the report stated that
the following financial information would be filed not later than 60 days
after the date on which the Form 8-K was required to be filed: (i) the
financial statements required under Item 7(a) of Form 8-K and Rule 3-05(b) of
Regulation S-X and (ii) the pro-forma financial information required under
Item 7(b) of Form 8-K and Article 11 of Regulation S-X. The purpose of this
amendment is to file such financial statements and information.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
a. FINANCIAL STATEMENTS OF AMBIA. The following historical financial
statements of AMBIA (as a division of Software Partners, Inc.) are attached
hereto:
(1) 1996 FINANCIAL STATEMENTS OF AMBIA AS A DIVISION OF SOFTWARE
PARTNERS, INC.:
PAGE
Independent Auditors' Report............................................ 5
Balance Sheet as of December 31, 1996................................... 6
Statement of Loss and Accumulated Deficit for the year
ended December 31, 1996............................................. 7
Statement of Cash Flows for the year ended December 31,
1996................................................................ 8
Notes to Financial Statements........................................... 9
(2) 1995 FINANCIAL STATEMENTS OF AMBIA AS A DIVISION OF SOFTWARE
PARTNERS, INC.:
PAGE
Independent Auditors' Report............................................13
Balance Sheet as of December 31, 1995...................................14
Statement of Loss and Accumulated Deficit for the year
ended December 31, 1995.............................................15
-2-
<PAGE>
PAGE
Statement of Cash Flows for the year ended December
31, 1995...........................................................16
Notes to Financial Statements...........................................17
b. PRO FORMA FINANCIAL INFORMATION. The following pro forma financial
information is attached hereto:
PAGE
Unaudited Pro Forma Consolidated Condensed Balance Sheet dated as of
June 30, 1997.......................................................22
Unaudited Pro Forma Consolidated Condensed Statement of Operations
for the six months ended June 30, 1997.............................24
Unaudited Pro Forma Consolidated Condensed Statement of Operations
for the year ended December 31, 1996...............................26
-3-
<PAGE>
SOFTWARE PARTNERS, INC.
AMBIA DIVISION
FINANCIAL STATEMENTS
DECEMBER 31, 1996
Seiler & Company, LLP
CERTIFIED PUBLIC ACCOUNTANTS
-4-
<PAGE>
Seiler & Company, LLP
CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors
SOFTWARE PARTNERS, INC.
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheet of Software Partners, Inc.
- - Ambia Division as of December 31, 1996 and the related statements of loss
and accumulated deficit and cash flows for the year then ended. The financial
statements are the responsibility of the Corporation's management. Our
responsibility is to express an opinion on the financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. These standards 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. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Software Partners,
Inc. - Ambia Division as of December 31, 1996, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
/s/Seiler & Company, LLP
Redwood City, California
June 3, 1997
1100 Marshall Street, Redwood City, CA 94063-2098
Tel. (415) 365-4646 FAX (415) 368-4055
---------------------------------------------------------------
120 Montgomery Street, Suite 2250, San Francisco, CA 94104-4303
Tel. (415) 392-2123 FAX (415) 392-1720
A member of
HLB INTERNATIONAL
-5-
<PAGE>
SOFTWARE PARTNERS, INC. - AMBIA DIVISION
BALANCE SHEET
DECEMBER 31, 1996
ASSETS
<TABLE>
<S> <C>
CURRENT ASSETS:
Receivables - Ambia Corporation $ 22,244
-------
Total assets $ 22,244
=======
LIABILITIES AND DIVISION CONTROL
CURRENT LIABILITIES:
Inter-division payable $ 867,118
-------
Total current liabilities 867,118
COMMITMENTS AND CONTINGENCIES -------
Total liabilities 867,118
-------
ACCUMULATED DEFICIT (844,874)
-------
Total liabilities and
accumulated deficit $ 22,244
=======
</TABLE>
See accompanying notes.
-6-
<PAGE>
SOFTWARE PARTNERS, INC. - AMBIA DIVISION
STATEMENT OF LOSS AND ACCUMULATED DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<S> <C>
REVENUES:
Consulting income $ 253,438
Product sales 581,430
-------
Subtotal 834,868
Less revenue earned on behalf
of Ambia Corporation 558,127
-------
Total revenues 276,741
-------
EXPENSES:
Wages 960,312
Software development 169,481
Advertising and promotion 70,530
Rent 53,343
Employee benefits 48,134
Telephone 28,378
Services - postage 27,561
Cost of goods sold 23,981
Travel 21,856
Accounting 19,089
Professional services 18,306
Office supplies 16,085
Legal 13,393
Services - shipping 10,409
Amortization 8,371
Bank charges 7,387
Insurance 6,818
Bad debt 3,237
Business meals 1,914
Software 1,784
Data entry 899
Expenses reimbursed by Ambia Corporation (561,325)
-------
Total expenses 949,943
-------
NET LOSS (673,202)
ACCUMULATED DEFICIT, BEGINNING OF YEAR (171,672)
-------
ACCUMULATED DEFICIT, END OF YEAR $(844,874)
=======
</TABLE>
See accompanying notes.
-7-
<PAGE>
SOFTWARE PARTNERS, INC. - AMBIA DIVISION
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(673,202)
Noncash items included in net income:
Amortization 8,371
Decrease in:
Receivables 98,709
Inventories 14,476
Decrease in:
Deferred revenue 103,389
-------
Net cash used by
operating activities (448,257)
-------
CASH FLOWS FROM INVESTING ACTIVITIES:
Intangible assets (8,574)
-------
Net cash used by
investing activities (8,574)
-------
CASH FLOWS FROM FINANCING ACTIVITIES:
Inter-division advances 456,831
-------
Net cash provided by
financing activities 456,831
-------
Net increase in cash -
CASH, BEGINNING OF YEAR -
-------
CASH, END OF YEAR $ -
=======
</TABLE>
-8-
<PAGE>
SOFTWARE PARTNERS, INC. - AMBIA DIVISION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
NOTE 1 - ACCOUNTING POLICIES
A. NATURE OF BUSINESS
Software Partners, Inc. (Company) - Ambia Division (Ambia) develops and
markets Acrobat add-on products for the electronic publishing market in
North America and Europe. Acrobat is a product from Adobe Systems, Inc.
that helps organizations publish documents on multiple platforms from any
software product.
The accompanying financial statements present the financial position of the
Ambia Division, and therefore, do not reflect the financial position of
Software Partners, Inc. as a whole.
Expenses directly identified with a division have been charged to that
division. All other expenses have been allocated between the divisions,
with 60% being allocated to Ambia.
In May 1996, the Company spun off its Ambia Division into a separate
corporation, Ambia Corporation. As a result of the spin-off, all
intellectual property was transferred, at cost, into Ambia Corporation in
exchange for common stock.
B. USE OF ESTIMATES
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 date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
C. INTANGIBLE ASSETS AND DEFERRED CHARGES
Trademarks and patents, stated at cost less accumulated amortization, are
being amortized on the straight-line method over a three year period.
Product design costs, stated at cost less accumulated amortization, are being
amortized on a straight-line method over a two year period.
-9-
<PAGE>
SOFTWARE PARTNERS, INC. - AMBIA DIVISION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
NOTE 1 - ACCOUNTING POLICIES (Continued)
D. RECOGNITION OF INCOME
Ambia recognized income on its products upon shipment. Consulting revenue is
recognized as services are provided. The Company provides a 30-60 day
warranty on its products and services.
E. ADVERTISING COSTS
Ambia expenses advertising production costs as they are incurred and
advertising communication costs the first time advertising takes place.
F. RESEARCH AND DEVELOPMENT
Current operations are charged with all research, engineering and product
development expenses which approximated $35,000.
G. INCOME TAXES
The Company accounts for its income taxes using the Financial Accounting
Standards Board Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" (SFAS No. 109), which requires the
establishment of a deferred tax asset or liability for the recognition of
future deductible or taxable amounts and operating loss and tax credit
carryforwards. Deferred tax expense or benefit is recognized as a result
of the changes in the assets and liabilities during the year. There was
no deferred tax asset or liability at December 31, 1996.
-10-
<PAGE>
SOFTWARE PARTNERS, INC. - AMBIA DIVISION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
NOTE 2 - RELATED PARTY TRANSACTIONS
All income earned and expenses incurred by Ambia Division after May 1, 1996,
are on behalf of Ambia Corporation.
NOTE 3 - OPERATING LEASE OBLIGATIONS
The Company leases office space in Mountain View, California. The lease
expires on May 31, 1998. Rent is allocated to the Ambia Division based on
the number of employees working on the Ambia projects. Estimated future
obligations under the lease are as follows:
<TABLE>
<S> <C>
Year ending
December 31,
------------
1997 $88,116
1998 37,816
</TABLE>
Rent expense for 1996 totaled $75,570.
NOTE 4 - PENSION AND PROFIT-SHARING PLANS
The Company has a I.R.C. 401(k) plan covering all eligible employees.
Employees must complete one year of service and attain age 21 before they
are eligible to participate. The Company does not provide any matching
contributions.
The Company also has a SEP IRA plan. Employees must complete three years of
service and attain age 21 to qualify for this plan. The Company
contributes 15% of each eligible employee's salary. Employees do not
contribute to this plan. SEP IRA expense allocated to Ambia for 1996 was
$25,329.
NOTE 5 - ECONOMIC DEPENDENCY
Ambia earned a substantial portion of its revenue from two customers. During
the year ended December 31, 1996 revenue from these customers totaled
$216,852. At December 31, 1996 no amounts were due from these customers.
-11-
<PAGE>
SOFTWARE PARTNERS, INC.
AMBIA DIVISION
FINANCIAL STATEMENTS
DECEMBER 31, 1995
Seiler & Company, LLP
CERTIFIED PUBLIC ACCOUNTANTS
-12-
<PAGE>
Seiler & Company, LLP
CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors
SOFTWARE PARTNERS, INC.
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheet of Software Partners, Inc.
- - Ambia Division, as of December 31, 1995 and the related statements of loss
and accumulated deficit and cash flows for the year then ended. The financial
statements are the responsibility of the Corporation's management. Our
responsibility is to express an opinion on the financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. These standards 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. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Software Partners,
Inc. - Ambia Division as of December 31, 1995, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
/s/Seiler & Company, LLP
Redwood City, California
June 3, 1997
1100 Marshall Street, Redwood City, CA 94063-2098
Tel. (415) 365-4646 FAX (415) 368-4055
---------------------------------------------------------------
120 Montgomery Street, Suite 2250, San Francisco, CA 94104-4303
Tel. (415) 392-2123 FAX (415) 392-1720
A member of
HLB INTERNATIONAL
-13-
<PAGE>
SOFTWARE PARTNERS, INC. - AMBIA DIVISION
BALANCE SHEET
DECEMBER 31, 1995
ASSETS
<TABLE>
<S> <C>
CURRENT ASSETS:
Receivables $ 233,258
Inventories 14,476
-------
Total current assets 247,734
INTANGIBLE ASSETS 13,183
-------
Total assets $ 260,917
=======
LIABILITIES AND DIVISION CONTROL
CURRENT LIABILITIES:
Deferred revenue $ 25,500
Inter-division payable 407,089
-------
Total current liabilities 432,589
COMMITMENTS AND CONTINGENCIES -------
Total liabilities 432,589
-------
ACCUMULATED DEFICIT (171,672)
-------
Total liabilities and
accumulated deficit $ 260,917
=======
</TABLE>
See accompanying notes.
-14-
<PAGE>
SOFTWARE PARTNERS, INC. - AMBIA DIVISION
STATEMENT OF LOSS AND ACCUMULATED DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<S> <C>
REVENUES:
Consulting income $ 498,800
Product sales 193,189
-------
Total revenues 691,989
-------
EXPENSES:
Wages 525,223
Software development 55,858
Advertising and promotio 53,760
Rent 39,645
Employee benefits 46,209
Office supplies 23,853
Professional services 22,106
Telephone 20,166
Services - shipping 14,771
Travel 14,278
Services - postage 11,000
Software 8,936
Cost of goods sold 7,968
Accounting 6,028
Legal 3,336
Amortization 3,228
Sales commissions 2,400
Business meals 1,915
Bank charges 1,845
Insurance 1,136
-------
Total expenses 863,661
-------
NET LOSS (171,672)
ACCUMULATED DEFICIT, BEGINNING OF YEAR -
-------
ACCUMULATED DEFICIT, END OF YEAR $(171,672)
=======
</TABLE>
See accompanying notes.
-15-
<PAGE>
SOFTWARE PARTNERS, INC. - AMBIA DIVISION
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(171,672)
Noncash items included in net income:
Amortization 3,228
Decrease (increase) in:
Receivables (233,258)
Inventories (14,476)
Increase (decrease) in:
Deferred revenue 25,500
-------
Net cash used by
operating activities (390,678)
-------
CASH FLOWS FROM INVESTING ACTIVITIES:
Intangible assets (16,411)
-------
Net cash used by
investing activities (16,411)
-------
CASH FLOWS FROM FINANCING ACTIVITIES:
Inter-division advances 407,089
-------
Net cash provided by
financing activities 407,089
-------
Net increase in cash -
CASH, BEGINNING OF YEAR -
-------
CASH, END OF YEAR $ -
=======
</TABLE>
See accompanying notes.
-16-
<PAGE>
SOFTWARE PARTNERS, INC. - AMBIA DIVISION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
NOTE 1 - ACCOUNTING POLICIES
A. NATURE OF BUSINESS
Software Partners, Inc. (Company) - Ambia Division (Ambia) develops and
markets Acrobat add-on products for the electronic publishing market in
North America and Europe. Acrobat is a product from Adobe Systems, Inc.
that helps organizations publish documents on multiple platforms from any
software product.
The accompanying financial statements present the financial position of the
Ambia Division, and therefore, do not reflect the financial position of
Software Partners, Inc. as a whole.
Expenses directly identified with a division have been charged to that
division. All other expenses have been allocated between the divisions,
with 50% being allocated to Ambia.
In May 1996, the Company spun off its Ambia Division into a separate
corporation, Ambia Corporation. As a result of the spin-off, all
intellectual property was transferred, at cost, into Ambia Corporation in
exchange for common stock.
B. USE OF ESTIMATES
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 date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
C. INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out method) or
market.
-17-
<PAGE>
SOFTWARE PARTNERS, INC. - AMBIA DIVISION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
NOTE 1 - ACCOUNTING POLICIES (Continued)
D. INTANGIBLE ASSETS AND DEFERRED CHARGES
Trademarks and patents, stated at cost less accumulated amortization, are
being amortized on the straight-line method over a three year period.
Product design costs, stated at cost less accumulated amortization, are being
amortized on a straight-line method over a two year period.
E. RECOGNITION OF INCOME
Ambia recognizes income on its products upon shipment. Consulting revenue is
recognized as services are provided. The Company provides a one-year
warranty on its products and services.
F. ADVERTISING COSTS
Ambia expenses advertising production costs as they are incurred and
advertising communication costs the first time advertising takes place.
G. RESEARCH AND DEVELOPMENT
Current operations are charged with all research, engineering and product
development expenses which approximated $44,000.
H. INCOME TAXES
The Company accounts for its income taxes using the Financial Accounting
Standards Board Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" (SFAS No. 109), which requires the
establishment of a deferred tax asset or liability for the recognition of
future deductible or taxable amounts and operating loss and tax credit
carryforwards. Deferred tax expense or benefit is recognized as a result
of the changes in the assets and liabilities during the year. There was
no deferred tax asset or liability at December 31, 1995.
-18-
<PAGE>
SOFTWARE PARTNERS, INC. - AMBIA DIVISION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
NOTE 2 - INTANGIBLE ASSETS
Intangible assets consist of the following:
<TABLE>
<S> <C>
Trademark and patents $10,496
Product design 5,915
------
16,411
Less accumulated amortization 3,228
------
Total $13,183
======
</TABLE>
Amortization charged to earnings for 1995 was $3,228.
NOTE 3 - OPERATING LEASE OBLIGATIONS
The Company leases office space in Mountain View, California. The lease
expires on May 31, 1998. Rent is allocated to the Ambia Division based on
the number of employees working on the Ambia projects. Estimated future
obligations under the lease are as follows:
<TABLE>
<S> <C>
Year ending
December 31,
------------
1996 $75,570
1997 88,116
1998 37,816
</TABLE>
Rent expense for the year ended December 31, 1995 was $39,645.
-19-
<PAGE>
SOFTWARE PARTNERS, INC. - AMBIA DIVISION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
NOTE 4 - PENSION AND PROFIT-SHARING PLANS
The Company has a I.R.C. 401(k) plan covering all eligible employees.
Employees must complete one year of service and attain age 21 before they
are eligible to participate. The Company does not provide any matching
contributions.
The Company also has a SEP IRA plan. Employees must complete three years of
service and attain age 21 to qualify for this plan. The Company
contributes 15% of each eligible employee's salary. Employees do not
contribute to this plan. SEP IRA expense allocated to Ambia for 1995 was
$3,931.
NOTE 5 - ECONOMIC DEPENDENCY
Ambia earned a substantial portion of its revenue from three customers. During
the year ended December 31, 1995 revenue from these customers totaled
$288,730. At December 31, 1995 amounts due from these customers, and
included in trade accounts receivable, were $84,879.
-20-
<PAGE>
INFODATA SYSTEMS INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION
The following unaudited pro forma consolidated condensed statement of
operations for the six months ended June 30, 1997 and the unaudited pro forma
consolidated condensed balance sheet as of June 30, 1997 are based on the
historical financial statements of Infodata Systems Inc.(the "Company"),
adjusted to give effect to the acquisition of all the issued and outstanding
stock of AMBIA Corporation ("AMBIA"). The following unaudited pro forma
consolidated condensed statement of operations for the year ended December 31,
1996 is based on the historical financial statements of the Company, adjusted
to give effect to the acquisition of all the issued and outstanding stock of
AMBIA.
The unaudited pro forma consolidated condensed statement of operations
for the six months ended June 30, 1997 has been prepared assuming the AMBIA
acquisition occurred as of January 1, 1997. The unaudited pro forma
consolidated condensed statement of operations for the year ended December 31,
1996 has been prepared assuming the AMBIA acquisition occurred as of January
1, 1996. The unaudited pro forma consolidated condensed balance sheet as of
June 30, 1997 has been prepared assuming that the AMBIA acquisition occurred
as of June 30, 1997. The acquisitions and related adjustments are described in
the notes thereto.
The unaudited pro forma consolidated condensed financial statements of
operations do not purport to represent what the Company's results of
operations would actually have been had the transactions in fact occurred on
the aforementioned dates, or to project the Company's results of operations
for any future period. The consolidated condensed pro forma financial
information does not give effect to any matters other than those described in
the notes thereto.
-21-
<PAGE>
<TABLE>
Unaudited Pro Forma Consolidated Condensed Balance Sheet as of June 30, 1997
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
Historical
----------
Infodata AMBIA Pro Forma
Systems Inc. Corporation(2) Adjustments(3) Pro Forma
------------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 629 $ - $ - $ 629
Short-term investments 419 419
Accounts receivable, net of
allowance of $80 1,076 133 1,209
Other current assets 308 7 315
-------------------------------------------------------
Total current assets 2,432 140 0 2,572
Property and equipment , at cost:
Furniture and equipment 2,644 25 (1) 2,669
Less: accumulated depreciation (2,053) (2,053)
-------------------------------------------------------
591 0 25 616
Goodwill, net 259 3,050 (1) 3,309
Other assets 153 13 70 (1) 236
Software development costs, net 63 63
-------------------------------------------------------
Total assets $ 3,498 $ 153 $ 3,145 $ 6,796
=======================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of capital lease
obligations $ 37 $ - $ - $ 37
Short-term debt 176 176
Accounts payable 430 68 498
Accrued expenses 880 880
Deferred revenue 1,070 1,070
Current portion of deferred rent 33 33
-------------------------------------------------------
Total current liabilities 2,626 68 0 2,694
Capital lease obligations 19 19
Deferred revenue 75 75
Deferred rent 3 3
-------------------------------------------------------
Total liabilities 2,723 68 0 2,791
Shareholders' equity:
Common stock 69 12 (1) 81
Additional paid-in capital 9,201 3,218 (1) 12,419
Accumulated earnings (deficit) (8,495) (8,495)
-------------------------------------------------------
Total shareholders' equity 775 0 3,230 4,005
Total liabilities and shareholders'
equity $ 3,498 $ 68 $ 3,230 $ 6,796
=======================================================
</TABLE>
-22-
<PAGE>
The pro forma adjustments to the Unaudited Pro Forma Consolidated Condensed
Balance Sheet as of June 30, 1997 are as follows:
(1) To record the purchase price in connection with the AMBIA
transaction, which consists of 400,000 shares of Company
shares at $7.75 per share as of July 22, 1997. This amounts to
a total purchase price of $3,100,000. Fixed assets were
increased by $25,000, representing the excess of the fair
market value of these assets over their book value. The
remaining life of these assets is generally two years.
Therefore, they will be depreciated over a two-year period.
Other assets include a non-compete covenant valued at $10,000,
and three software products with a combined value of $60,000.
These other assets will be amortized over a two-year period
since this is the duration of the non-compete agreement and
the remaining planning period for the software without new
enhancements. The remainder of the purchase price along with
approximately $130,000 in acquisition costs was allocated to
goodwill to be amortized over 7 years.
(2) This reflects the purchase of AMBIA's assets at their fair
value.
(3) The Company has determined that a discount on the acquisition
price of AMBIA is appropriate, however, no such discount is
reflected in this pro forma balance sheet. This discount will
be reflected on future financial statements subject to the
completion of the valuation process.
-23-
<PAGE>
<TABLE>
Unaudited Pro Forma Consolidated Condensed Statement of Operations
for the Six Months Ended June 30, 1997
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
Historical
----------
Infodata AMBIA Pro Forma
Systems Inc. Corporation(2) Adjustments Pro Forma
------------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues $ 3,997 $ 874 $ 4,871
Cost of revenues 2,416 371 2,787
-------------------------------------------------------
Gross Profit 1,581 503 2,084
Operating expenses:
Research and development 945 204 1,149
Selling, general and administrative 2,502 386 218 (1) 3,106
-------------------------------------------------------
3,447 590 218 4,255
Operating income (loss): (1,866) (87) (218) (2,171)
Interest income 40 40
Interest expense (7) (7)
-------------------------------------------------------
Income (loss) before income taxes (1,833) (87) (218) (2,138)
Provision for income taxes (5) 0 (5)
-------------------------------------------------------
Net income (loss) $ (1,828) $ (87) $ (218) $ (2,133)
=======================================================
Preferred dividends 0 0 0
-------------------------------------------------------
Income (loss) applicable to
common shares $ (1,828) $ (87) $ (218) $ (2,133)
=======================================================
Per share data (primary and fully
diluted):
Net income (loss) per common
share $ (0.69) $ (0.70)
========= =========
Weighted average shares outstanding 2,653 3,053
========= =========
</TABLE>
-24-
<PAGE>
The pro forma adjustments to the Unaudited Pro Forma Consolidated Condensed
Statement of Operations for the Six Months Ended June 30, 1997 are as follows:
(1) To record six months of goodwill amortization.
(2) The proforms financial statements reflect the purchase of
AMBIA's assets at fair market value.
-25-
<PAGE>
<TABLE>
Unaudited Pro Forma Consolidated Condensed Statement of Operations
for the Year Ended December 31, 1996
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
Historical
----------
Infodata AMBIA Pro Forma
Systems Inc. Corporation(2) Adjustments(3) Pro Forma
------------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues $ 9,560 $ 277 $ 9,837
Cost of revenues 5,457 279 5,736
-------------------------------------------------------
Gross Profit 4,103 (2) 4,101
Operating expenses:
Research and development 816 209 1,025
Selling, general and administrative 2,869 462 436 (1) 3,767
-------------------------------------------------------
3,685 671 436 4,792
Operating income (loss): 418 (673) (436) (691)
Interest income 96 96
Interest expense (11) (11)
-------------------------------------------------------
Income (loss) before income taxes 503 (673) (436) (606)
Provision for income taxes 0 0 0
-------------------------------------------------------
Net income (loss) $ 503 $ (673) $ (436) $ (606)
=======================================================
Preferred dividends 58 0 58
-------------------------------------------------------
Income (loss) applicable to common
shares $ 445 $ (673) $ (436) $ (664)
=======================================================
Per share data:
Net income (loss) per common
shares
Primary $ 0.20 $ (0.09)
========= =========
Fully Diluted $ 0.18 $ (0.09)
========= =========
Weighted average common shares
outstanding 2,278 2,678
========= =========
</TABLE>
-26-
<PAGE>
The pro forma adjustments to the Unaudited Pro Forma Consolidated Condensed
Statement of Operations for the Year Ended December 31, 1996 are as follows:
(1) To record twelve months of goodwill amortization.
-27-
