<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington D. C. 20549
- --------------------------
FORM 8-K/A
AMENDMENT TO CURRENT REPORT
Date of Report (Date of earliest event reported): October 18, 1994
- --------------------------
3Com Corporation
(Exact name of registrant as specified in its charter)
California 0-12867 94-2605794
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
5400 Bayfront Plaza 95052
Santa Clara, California (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (408) 764-5000
The undersigned registrant hereby amends the following items of its Current
Reports dated November 1, 1994 on Form 8-K and its Amendment to Current Report
dated December 23, 1994 on Form 8-K/A as set forth in the pages attached hereto:
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
3Com Corporation
(Registrant)
Dated: May 11, 1995 By /s/ Christopher B. Paisley
------------ -------------------------
Christopher B. Paisley
Vice President Finance and
Chief Financial Officer
<PAGE>
3Com Corporation
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Audited financial statements of NiceCom Ltd. for the year ended
December 31, 1993, as amended, are attached hereto and filed herewith as
Exhibit 7.5.
Unaudited financial statements of NiceCom Ltd. for the nine months
ended September 30, 1994 are attached hereto and filed herewith as
Exhibit 7.6.
(c) The following exhibits are attached hereto and filed herewith:
7.5 Audited financial statements of NiceCom Ltd. for the year
ended December 31, 1993, as amended.
7.6 Unaudited financial statements of NiceCom Ltd. for the nine
months ended September 30, 1994.
3Com Corporation
Index to Exhibits
Exhibit Document
- ------- --------
7.5 Audited financial Statements of NiceCom Ltd. for the year ended
December 31, 1993, as amended
7.6 Unaudited financial Statements of NiceCom Ltd. for the nine months
ended September 30, 1994
<PAGE>
REPORT OF SHACHAK & CO.
TO THE SHAREHOLDERS OF NICECOM LTD. (IN LIQUIDATION):
We have examined the Balance Sheet of NICECOM LTD. (IN LIQUIDATION) as of
December 31, 1993 and the statements of Income and Cash Flows for the year then
ended. Our examination was conducted in accordance with generally accepted
auditing standards, including those prescribed under the Auditor's Regulations
(Auditor's Mode of Performance), 1973, which does not differ significantly from
United States generally accepted auditing standards, and accordingly we have
applied such auditing procedures as we considered necessary under the
circumstances.
The financial statements referred to above, were prepared on the basis of
historical cost, adjusted to reflect the changes in the general purchasing power
of the Israeli currency, in accordance with the Opinions of the Institute of
Certified Public Accountants in Israel. Condensed nominal financial statements,
which served as the basis for the adjusted financial statements, are presented
in Note 17.
Information regarding events that occurred subsequent to December 31, 1993
has not been included in these financial statements.
In our opinion, except for the omission of the aforementioned information,
the financial statements referred to above, present fairly, in conformity with
generally accepted accounting principles in Israel, which do not differ in any
material respects pertaining to these financial statements, from generally
accepted accounting principles in the United States, except for the effects of
inflation which have not been eliminated, the financial position of the Company
at December 31, 1993, and the results of its operations and cash flows for the
year then ended (see Note 2(A)(4) of Notes to the Financial Statements).
Pursuant to Section 211 of the Companies Ordinance, we state that we have
obtained all the information and explanations we have required, and that our
opinion on the above Financial Statements is given according to the best of our
information and the explanations received by us and as shown by the books of the
Company.
Without qualifying our opinion on the above mentioned financial Statements,
we would like to draw your attention to Note 1 (D) to the financial statements,
regarding the Company's liquidation commenced in October, 1994.
This opinion is expressed in reliance on our previous opinion, dated April
28, 1994.
Shachak & Co.
Certified Public Accountants (Israel)
Tel Aviv, May 2, 1995
1
<PAGE>
NICECOM LTD. (IN LIQUIDATION)
BALANCE SHEET AS OF DECEMBER 31, 1993
IN DECEMBER 1993 ADJUSTED NEW ISRAELI SHEKELS
<TABLE>
<CAPTION>
NOTE NIS
----- ------------
<S> <C> <C>
Current assets
Cash and cash equivalents.................................................................. 3 423,518
Due from related parties................................................................... 4 15,198
Accounts receivable and income receivable.................................................. 5 731,855
Other receivables and current assets....................................................... 6 834,224
Inventories................................................................................ 149,269
------------
2,154,064
------------
Fixed assets................................................................................. 7 1,092,290
------------
3,246,354
------------
------------
Current liabilities
Bank overdraft............................................................................. 1,878
Accounts payable........................................................................... 8 201,336
Due to related parties..................................................................... 4 74,066
Other payables and current liabilities..................................................... 9 683,718
------------
960,998
------------
Loan from a company that is an interested party.............................................. 10 4,725,943
Liability for the termination of the employee-employer relationship.......................... 11 54,597
------------
Commitments and contingent liabilities....................................................... 13
Capital deficit
Share capital.............................................................................. 12 11,125
Accumulated loss........................................................................... (2,506,309)
------------
(2,495,184)
------------
3,246,354
------------
------------
</TABLE>
David Ben-Ze'ev,
ATTORNEY LIQUIDATOR
May 2, 1995
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
NICECOM LTD. (IN LIQUIDATION)
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1993
IN DECEMBER 1993 ADJUSTED NEW ISRAELI SHEKELS
<TABLE>
<CAPTION>
NOTE NIS
----- -----------
<S> <C> <C>
Revenues from production...................................................................... 1,346,111
Cost of production............................................................................ 14 681,238
-----------
Gross profit................................................................................ 664,873
-----------
Expenses
Research and development costs.............................................................. 15 1,856,041
Marketing expenses.......................................................................... 510,655
Administrative expenses..................................................................... 16 845,728
-----------
3,212,424
-----------
Loss from operations.......................................................................... 2,547,551
Financial income, net......................................................................... (41,242)
-----------
Net loss...................................................................................... 2,506,309
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
NICECOM LTD. (IN LIQUIDATION)
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1993
IN DECEMBER 1993 ADJUSTED NEW ISRAELI SHEKELS
<TABLE>
<CAPTION>
NIS
------------
<S> <C>
Cash flows from current operations:
Net loss.......................................................................................... (2,506,309)
Adjustments required to present cash flows from current operations................................ (655,521)
------------
Net cash flows used in current operations....................................................... (3,161,830)
------------
Cash flows from investment activities:
Acquisitions of fixed assets...................................................................... (1,153,598)
Loan received from a company that is an interested party.......................................... 4,725,943
------------
Net cash flows provided by investment activities................................................ 3,572,345
------------
Cash flows from financing activities:
Issuance of capital............................................................................... 11,125
Credit received from bank corporations............................................................ 1,878
------------
Net cash flows provided by financing activities................................................. 13,003
------------
Increase in cash and cash equivalents............................................................. 423,518
Balance of cash and cash equivalents -- beginning of the year....................................... --
------------
Balance of cash and cash equivalents -- end of the year............................................. 423,518
------------
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
NICECOM LTD. (IN LIQUIDATION)
STATEMENT OF CASH FLOWS
ADJUSTMENTS REQUIRED TO PRESENT CASH FLOWS
FROM CURRENT OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1993
IN DECEMBER 1993 ADJUSTED NEW ISRAELI SHEKELS
<TABLE>
<CAPTION>
NIS
----------
<S> <C>
Income and expenses not involving cash flows:
Depreciation and amortization......................................................................... 61,308
Increase in the liability for the termination of the employee-employer relationship................... 54,597
Changes in assets and liabilities:
Increase in accounts receivable and income receivable................................................. (731,855)
Increase in inventories............................................................................... (149,269)
Increase in other receivables and current assets...................................................... (834,224)
Increase in accounts payable.......................................................................... 201,336
Increase in other payables and current liabilities.................................................... 683,718
Increase in related parties........................................................................... 58,868
----------
(655,521)
----------
----------
</TABLE>
5
<PAGE>
NICECOM LTD. (IN LIQUIDATION)
NOTES TO THE FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1993
NOTE 1 -- GENERAL
A. The Company was incorporated and approved under the Companies Ordinance
on December 28, 1992, and commenced operations in January 1993.
B. These financial statements are the initial audited financial statements
prepared by the Company.
C. The Company develops, manufactures, and sells computer communication
products.
D. In October 1994, a resolution was adopted at an extraordinary meeting of
the shareholders of NICECOM LTD. to liquidate the Company.
NOTE 2 -- ACCOUNTING POLICY
A. MEASUREMENT BASE
1. The financial statements present the financial position as of balance
sheet date, and the results of the Company's operations measured in New
Israeli Shekels of the last month of the reported year (according to the
Consumer Price Index for December 31, 1993, which represents the average
price level for that month, as published in the following month). This
method of presentation conforms with the opinions of the Institute of
Certified Public Accountants in Israel, and is not meant to reflect the
assets, liabilities, capital or the changes therein, including the
results of operations, on a current basis or any other economic basis.
The reported data were prepared in accordance with generally accepted
accounting principles, whereby the the cost of non-monetary assets were
adjusted on the basis of the changes in the Consumer Price Index from the
date of acquisition or payment. Capital resources were adjusted
correspondingly, from the date received until the balance sheet month.
Income Statement items were adjusted according to the changes in the
Consumer Price Index as follows:
- Revenues and expenses, other than financial income and
expenses, were adjusted according to the changes in the
Index from the date the transaction was effected until
December 1993.
- Financial income and expenses include the net erosion in
the value of monetary items.
2. The Company maintains its accounts on a current basis in nominal New
Israeli Shekels. The nominal data were adjusted to NIS of a fixed
purchasing power, as aforesaid. Condensed nominal financial statements,
which served as the basis for preparation of the Company's adjusted
financial statements are presented in Note 17.
3. The balances in these financial statements have all been adjusted for
the changes in the general purchasing power of the Israeli currency,
unless stated otherwise.
4. The financial statements have been prepared in conformity with generally
accepted accounting principles in Israel, which do not differ in any
material respects pertaining to these financial statements, from
generally accepted accounting principles in the United States, except for
the effects of inflation which have not been eliminated.
B. FIXED ASSETS
1. Fixed assets are presented at cost.
6
<PAGE>
NICECOM LTD. (IN LIQUIDATION)
NOTES TO THE FINANCIAL STATEMENTS
NOTE 2 -- ACCOUNTING POLICY (CONTINUED)
2. Depreciation is computed by the straight-line method, at rates
considered sufficient to depreciate the assets over their estimated
useful lives.
C. FOREIGN CURRENCY BALANCES
Foreign currency balances are presented on the basis of the representative
exchange rate prevailing on balance sheet date - NIS 2.986 to the U.S. dollar.
NOTE 3 -- CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash denominated in foreign currency of
NIS 1,345 and marketable certificates of deposit totalling NIS 422,173.
NOTE 4 -- RELATED PARTIES
Balances with related parties bore interest at the level of the increase in
the Consumer Price Index.
NOTE 5 -- ACCOUNTS RECEIVABLE AND INCOME RECEIVABLE
<TABLE>
<CAPTION>
NIS
---------
<S> <C>
Composition as of December 31, 1993:
Open accounts.................................................................... 603,876
Income receivable................................................................ 127,979
---------
731,855
---------
---------
</TABLE>
NOTE 6 -- OTHER RECEIVABLES AND CURRENT ASSETS
<TABLE>
<CAPTION>
NIS
---------
<S> <C>
Composition as of December 31, 1993:
Receivable for participation in development expenses............................. 516,230
Companies tax.................................................................... 29,250
Institutions..................................................................... 288,744
---------
834,224
---------
---------
</TABLE>
NOTE 7 -- FIXED ASSETS
A. Composition as of December 31, 1993:
A. Composition
<TABLE>
<CAPTION>
OFFICE
FURNITURE
AND LEASEHOLD
VEHICLES EQUIPMENT COMPUTERS IMPROVEMENTS
NIS NIS NIS NIS TOTAL NIS
--------- ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Cost Acquisitions for year....................... 579,537 43,614 288,063 242,384 1,153,598
--------- ----------- ----------- ------------- -----------
Less - Accumulated depreciation for year......... 46,766 1,480 13,062 -- 61,308
--------- ----------- ----------- ------------- -----------
Depreciated cost................................. 532,771 42,134 275,001 242,384 1,092,290
--------- ----------- ----------- ------------- -----------
--------- ----------- ----------- ------------- -----------
</TABLE>
7
<PAGE>
NICECOM LTD. (IN LIQUIDATION)
NOTES TO THE FINANCIAL STATEMENTS
NOTE 7 -- FIXED ASSETS (CONTINUED)
B. Annual depreciation rates:
<TABLE>
<S> <C>
Vehicles %
Office furniture and equipment 15
Computers 6 - 10
Leasehold improvements 20
Over the period of the lease
</TABLE>
NOTE 8 -- ACCOUNTS PAYABLE
<TABLE>
<CAPTION>
NIS
---------
<S> <C>
Composition as of December 31, 1993:
Open accounts.......................................................... 191,274
Notes payable.......................................................... 10,062
---------
201,336
---------
</TABLE>
NOTE 9 -- OTHER PAYABLES AND CURRENT LIABILITIES
<TABLE>
<CAPTION>
NIS
---------
<S> <C>
Composition as of December 31, 1993:
Employees and institutions for salaries and related expenses........... 529,010
Institutions........................................................... 683
Expenses payable....................................................... 27,750
Miscellaneous.......................................................... 126,275
---------
683,718
---------
---------
</TABLE>
NOTE 10 -- LOAN FROM A COMPANY THAT IS AN INTERESTED PARTY
The loan is linked to the Consumer Price Index and does not bear interest.
No repayment date has been set. Subsequent to the date of the financial
statements, a portion of the loan equivalent to U.S. $600,000 was converted to
share capital (also see Note 12).
NOTE 11 -- LIABILITY FOR THE TERMINATION OF THE EMPLOYEE-EMPLOYER RELATIONSHIP
The Company's liability for the payment of severance pay to its employees is
computed on the basis of their last salary and their period of employment. The
liability is covered primarily by payments to insurance companies. The balance
of the liability is expressed by this provision.
NOTE 12 -- SHARE CAPITAL
A. Composition as of December 31, 1993
<TABLE>
<CAPTION>
REGISTERED ISSUED AND PAID UP
NIS NIS
----------- ------------------
<S> <C> <C>
Common shares NIS, 0.01 par value......... 10,000 10,000
----------- -------
----------- -------
</TABLE>
B. Subsequent events
1. Pursuant to an agreement dated February 13, 1994, the Company
allocated shares to a group of investors that grant 25% of the rights to
control and ownership in the Company, in consideration for the NIS
equivalent of U.S. five million dollars. In addition, the Company
allocated shares to its parent company, Nice Systems Ltd, and to its
subsidiary, Nice Software (1991) Ltd., in consideration for the NIS
equivalent of US $1,450,000.
8
<PAGE>
NICECOM LTD. (IN LIQUIDATION)
NOTES TO THE FINANCIAL STATEMENTS
NOTE 12 -- SHARE CAPITAL (CONTINUED)
2. The composition of share capital as of the issue date of the
financial statements:
<TABLE>
<CAPTION>
REGISTERED ISSUED AND PAID UP
NIS NIS
------------- ------------------
<S> <C> <C>
Common shares, NIS 0.01 par value...... 20,000,000 14,201,942
------------- ------------------
------------- ------------------
</TABLE>
3. The Company issued 1,133,334 options to its employees. Each
option may be exercised to purchase one ordinary NIS 1 par value share of
the Company in consideration for payment of its par value. The options
may be exercised over a four year period, conditioned upon the terms that
were stipulated.
NOTE 13 -- COMMITMENTS AND CONTINGENT LIABILITIES
The Company signed agreements with the Chief Scientist of the Ministry of
Industry and Trade, according to which the Company receives Government grants
for development programs. Pursuant to the terms of the grants, the Company must
pay royalties to the Government of Israel of 2% of the sales of the products
that result from the development program, until it has repaid a maximum of the
linked amount of the grant of NIS 1,057,157 plus linkage differences (in
accordance with the terms of the grant, products developed with grant funds must
be produced in Israel).
NOTE 14 -- COST OF PRODUCTION
<TABLE>
<CAPTION>
FOR THE YEAR
ENDED DECEMBER
31, 1993
-----------------
<S> <C>
Composition:
Salaries and related expenses............................................ 196,914
Outside projects (includes NIS 412,683 from a company that is an
interested party)....................................................... 426,949
Other production costs................................................... 48,802
Depreciation............................................................. 8,573
--------
681,238
--------
--------
</TABLE>
NOTE 15 -- RESEARCH AND DEVELOPMENT COSTS
<TABLE>
<CAPTION>
FOR THE YEAR
ENDED DECEMBER
31, 1993
-----------------
<S> <C>
Composition:
Salaries and related expenses............................................ 2,653,087
Outside projects......................................................... 26,157
Materials................................................................ 153,407
Other development costs (includes NIS 39,000 from a company that is an
interested party)....................................................... 93,730
Depreciation............................................................. 4,560
-----------------
2,930,941
Less -- the participation of others...................................... (1,074,900)
-----------------
1,856,041
-----------------
-----------------
</TABLE>
9
<PAGE>
NICECOM LTD. (IN LIQUIDATION)
NOTES TO THE FINANCIAL STATEMENTS
NOTE 16 -- GENERAL AND ADMINISTRATIVE EXPENSES
Includes depreciation of NIS 1,409.
NOTE 17 -- CONDENSED NOMINAL FINANCIAL STATEMENTS
A. Balance Sheet as of December 31, 1993:
<TABLE>
<CAPTION>
NIS
------------
<S> <C>
Current assets
Cash and cash equivalents..................................................... 423,518
Due from related parties...................................................... 15,198
Accounts receivable and income receivable..................................... 731,855
Other receivables............................................................. 834,224
Inventories................................................................... 143,571
------------
2,148,366
------------
Fixed assets.................................................................... 1,063,683
------------
3,212,049
------------
------------
Current liabilities
Bank overdraft................................................................ 1,878
Accounts payable.............................................................. 201,336
Due to related parties........................................................ 74,066
Other payables and current liabilities........................................ 683,718
------------
960,998
------------
Loan from a company that is an interested party................................. 4,725,943
------------
Liability for the termination of the employee-employer relationship............. 54,597
------------
Capital deficit
Share capital................................................................. 10,000
Accumulated loss.............................................................. (2,539,489)
------------
(2,529,489)
------------
3,212,049
------------
------------
</TABLE>
B. Income Statement for the year ended December 31, 1993
<TABLE>
<CAPTION>
NIS
------------
<S> <C>
Revenues from production........................................................ 1,293,548
Cost of production.............................................................. 660,284
------------
Gross profit................................................................ 633,264
------------
Expenses
Research and development costs................................................ 1,747,234
Marketing expenses............................................................ 481,358
Administrative expenses....................................................... 826,925
------------
3,055,517
------------
Loss from operations............................................................ 2,422,253
Financial expenses, net......................................................... 117,236
------------
Net loss........................................................................ 2,539,489
------------
------------
</TABLE>
10
<PAGE>
TRANSLATED FROM THE HEBREW ORIGINAL
NICECOM LTD.
CONDENSED BALANCE SHEET AS OF SEPTEMBER 30, 1994
ADJUSTED TO NIS OF SEPTEMBER 1994
<TABLE>
<CAPTION>
AS OF AS OF
SEPTEMBER 30, DECEMBER 31,
1994 1993
(UNAUDITED) (AUDITED)
NIS NIS
------------- -------------
<S> <C> <C>
Current assets...................................................................... 12,146,665 2,380,155
------------- -------------
Fixed assets (Net of depreciation).................................................. 2,634,059 1,206,937
------------- -------------
------------- -------------
14,780,724 3,587,092
------------- -------------
------------- -------------
Current liabilities (includes loan from an interested party company)................ 3,885,735 6,283,844
------------- -------------
Liability for termination of the employee-employer relationship..................... 90,098 60,327
------------- -------------
Shareholders' equity
Share capital..................................................................... 156,281 12,292
Capital reserves.................................................................. 20,034,952 --
Accumulated loss.................................................................. (9,386,342) (2,769,371)
------------- -------------
10,804,891 (2,757,079)
------------- -------------
------------- -------------
14,780,724 3,587,092
------------- -------------
------------- -------------
</TABLE>
<TABLE>
<S> <C>
Benjamin Levin Chanan Meiron
Chairman of the Board Chief Financial Officer
of Directors
</TABLE>
December 6, 1994
Approval date of the financial statements.
The accompanying notes are an integral part of the condensed financial
statements.
1
<PAGE>
TRANSLATED FROM THE HEBREW ORIGINAL
NICECOM LTD.
CONDENSED INCOME STATEMENT
ADJUSTED TO NIS OF SEPTEMBER 1994
<TABLE>
<CAPTION>
FOR THE NINE
MONTHS ENDED
SEPTEMBER 30, 1994
(UNAUDITED)
NIS
------------------
<S> <C>
Revenues from production...................................................................... 1,907,601
Cost of production............................................................................ 1,331,803
----------
----------
Gross profit................................................................................ 575,798
----------
Expenses
Research and development costs.............................................................. 4,543,697
Marketing expenses.......................................................................... 1,397,022
Administrative expenses..................................................................... 847,857
6,788,576
----------
----------
Operating loss................................................................................ 6,212,778
Financial expenses, net....................................................................... 405,226
Other income, net............................................................................. 1,033
----------
6,616,971
----------
----------
</TABLE>
The accompanying notes are an integral part of the condensed financial
statements.
2
<PAGE>
TRANSLATED FROM THE HEBREW ORIGINAL
NICECOM LTD.
CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
ADJUSTED TO NIS OF SEPTEMBER 1994
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE MONTH PERIOD ENDED
-----------------------------------------------------
SEPTEMBER 30, 1994
-----------------------------------------------------
SHARE CAPITAL ACCUMULATED
CAPITAL RESERVES LOSS TOTAL
NIS NIS NIS NIS
--------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Balance at beginning of period........................... 12,292 -- (2,769,371) (2,757,079)
Issuance of stock, net................................... 143,989 20,034,952 -- 20,178,941
Loss for the nine month period........................... -- -- (6,616,971) (6,616,971)
--------- ------------- ------------ -------------
Balance at end of period............................... 156,281 20,034,952 (9,386,342) 10,804,891
--------- ------------- ------------ -------------
--------- ------------- ------------ -------------
</TABLE>
The accompanying notes are an integral part of the condensed financial
statements.
3
<PAGE>
TRANSLATED FROM THE HEBREW ORIGINAL
NICECOM LTD.
CONDENSED STATEMENT OF CASH FLOWS
FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 1994
ADJUSTED TO NIS OF SEPTEMBER 1994
(UNAUDITED)
<TABLE>
<CAPTION>
NIS
--------------
<S> <C>
Cash flows from current operations:
Net loss........................................................................................ (6,616,971)
Adjustments required to present cash flows from current operations.............................. 1,109,362
--------------
Net cash used in current operations........................................................... (5,507,609)
--------------
Cash flows from investment activities:
Fixed Asset acquisitions........................................................................ (1,716,027)
Proceeds from the realization of fixed assets................................................... 16,529
Investment in marketable securities, net........................................................ (8,568,667)
--------------
Net cash used in investment activities........................................................ (10,268,165)
--------------
Cash flows from financing activities:
Proceeds from the realization of capital, net................................................... 15,438,398
Receipt of credit from bank corporations........................................................ 267,178
--------------
Net cash provided by financing activities..................................................... 15,705,576
--------------
--------------
Decrease in cash and cash equivalents............................................................. (70,198)
Balance of cash and cash equivalents -- beginning of period....................................... 467,970
--------------
Balance of cash and cash equivalents -- end of period............................................. 397,772
--------------
--------------
</TABLE>
The accompanying notes are an integral part of the condensed financial
statements.
4
<PAGE>
TRANSLATED FROM THE HEBREW ORIGINAL
NICECOM LTD.
CONDENSED STATEMENT OF CASH FLOWS
ADJUSTMENTS REQUIRED TO PRESENT CASH FLOWS
FROM CURRENT OPERATIONS
FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 1994
ADJUSTED TO NIS OF SEPTEMBER 1994
(UNAUDITED)
<TABLE>
<CAPTION>
NIS
------------
<S> <C>
Revenues and expenses not involving cash flows:
Depreciation...................................................................................... 273,409
Gain from the realization of fixed assets......................................................... (1,033)
Increase in liability for termination of the employee-employer relationship....................... 29,771
Loss from marketable securities................................................................... 106,940
Changes in assets and liabilities:
Increase in accounts receivable and income receivable............................................. (1,263,067)
Increase in inventories........................................................................... (533,312)
Decrease in other receivables and current assets.................................................. 421,396
Increase in other payables and current liabilities................................................ 2,075,258
------------
1,109,362
------------
------------
</TABLE>
31.3.94 -- Non-cash transaction -- Conversion of interested party loans
totalling NIS 4,740,543 into receipts on account of shares.
5
<PAGE>
TRANSLATED FROM THE HEBREW ORIGINAL
NICECOM LTD.
NOTES TO THE FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1994
(UNAUDITED)
NOTE 1 -- GENERAL
A. These financial statements were prepared as of September 30, 1994, and
for the nine month period then ended. These financial statements should
be viewed in conjunction with the annual financial statements and the
accompanying notes of the Company as of December 31, 1993.
B. These interim financial statements were reviewed by the Company's
auditors. The review was limited in scope, in conformity with the
procedures prescribed by the Institute of Certified Public Accountants
in Israel. The review did not constitute an audit in accordance with
generally accepted auditing standards, and therefore, the auditors have
not expressed an opinion thereon.
C. Comparative figures for the nine month period ended September 30, 1994
were not prepared, since the Company's operations were immaterial.
D. Pursuant to an agreement dated February 13, 1994, the Company allocated
shares to a group of investors that grant them 25% of the rights to
control and ownership in the Company, in consideration for the NIS
equivalent of five million US dollars. Furthermore, the Company
allocated shares to its parent company, Nice Systems Ltd. and to Nice
Software (1991) Ltd., in consideration for the NIS equivalent of US
$1,450,000. Subsequent to these allocations, they held 58.2% of the
rights in the company. The remaining shares are held by the Company's
employees.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies applied in the preparation of these
financial statements are identical to those applied in the preparation of the
most recent annual financial statements.
NOTE 3 -- ADJUSTED FINANCIAL STATEMENTS
The financial statements were prepared on the basis of the historical cost
convention, adjusted for the changes in the general purchasing power of the
Israel currency on the basis of the changes in the Consumer Price Index. During
the nine month period ended September 30, 1994, the Consumer Price Index rose
approximately 10.53%.
NOTE 4 -- SUBSEQUENT EVENTS
In October 1994, all of the assets and liabilities of the Company were sold
to a foreign company, in consideration for approximately 53 million US dollars.
The agreement is effective October 18, 1994.
6
<PAGE>
TRANSLATED FROM THE HEBREW ORIGINAL
NICECOM LTD.
AS OF SEPTEMBER 30, 1994
<TABLE>
<S> <C>
Cost of production
Salaries and related expense................................................. 747,739
Engineering projects......................................................... 59,183
Raw materials consumed....................................................... 348,932
Other production expenses.................................................... 62,846
Depreciation................................................................. 113,103
----------
1,331,803
----------
----------
Research and development costs
Salaries and related expenses................................................ 3,779,508
Outside projects............................................................. 907,721
Raw materials................................................................ 1,141,417
Other development costs...................................................... 278,778
Depreciation................................................................. 50,000
----------
6,157,424
Less: participation of others in development costs........................... 1,613,727
----------
4,543,697
----------
----------
Current assets
Cash......................................................................... 397,772
Marketable securities........................................................ 8,461,727
Accounts receivable and income receivable.................................... 2,088,531
Other receivables and current assets......................................... 500,388
Inventories.................................................................. 698,247
----------
12,146,665
----------
----------
Current liabilities
Bank overdraft............................................................... 269,253
Suppliers and other payables*................................................ 3,616,482
----------
3,885,735
----------
----------
- ------------------------
* Includes Nice Systems of................................................... 375,856
----------
----------
</TABLE>
7
