SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Date of Report: November 16, 1999
ASA INTERNATIONAL LTD
---------------------
(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-14741 02-0398205
- ---------------------------- -------------- -------------
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification
Number)
10 Speen Street, Framingham, MA 01701
---------------------------------------- ---------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: 508-626-2727
NOT APPLICABLE
- ---------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 7 Exhibit and Financial Statements
(a)(b) Financial Statements and PRO FORMA financial information of
business acquired
The Registrant's Form 8-K as filed with the Securities and Exchange Commission
on November 15, 1999 provides that the financial statements and PRO FORMA
financial information required by this item would be filed by amendment within
sixty days of such date. Such financial statements and PRO FORMA financial
information are provided herein by this amendment following the signature line.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ASA INTERNATIONAL LTD.
By: /S/ TERRENCE C. MCCARTHY
------------------------------
Terrence C. McCarthy,
Vice President and Treasurer
Date: January 18, 2000
<PAGE>
Item 7(a) Financial Statements of Business Acquired
DESIGN DATA SYSTEMS CORPORATION
FINANCIAL STATEMENTS AS OF
AND FOR THE YEAR ENDED DECEMBER 31, 1998
AND
INDEPENDENT AUDITORS' REPORT
<PAGE>
DESIGN DATA SYSTEMS CORPORATION
TABLE OF CONTENTS
- ------------------------------------------------------------------------------
Independent Auditors' Report
Financial Statements as of and for the year ended December 31, 1998:
Balance Sheet
Statement of Operations
Statement of Shareholder's Deficit
Statement of Cash Flows
Notes to Financial Statements
- -------------------------------------------------------------------------------
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholder
DESIGN DATA SYSTEMS CORPORATION
We have audited the accompanying balance sheet of Design Data Systems
Corporation (the "Company") as of December 31, 1998, and the related statements
of operations, shareholder's deficit and cash flows for the year then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those 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 the Company as of December 31,
1998, and the results of its operations and cash flows for the year then ended,
in conformity with generally accepted accounting principles.
The Company, with the consent of its shareholder, has elected under the Internal
Revenue Code to be an S Corporation. In lieu of corporate income taxes, the
shareholders of an S Corporation are taxed on their proportionate share of the
Company's taxable income. Therefore, no provision or liability for income taxes
has been included in these financial statements.
Kingery, Crouse & Hohl, P.A.
Tampa, Florida
January 12, 2000
DESIGN DATA SYSTEMS CORPORATION
BALANCE SHEET AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
ASSETS
CURRENT ASSETS:
<S> <C>
Receivables - net $ 1,531,908
Other current assets
62,782
----------------
TOTAL CURRENT ASSETS 1,594,690
----------------
PROPERTY AND EQUIPMENT:
Leased real estate under capital lease 745,211
Computer equipment 664,428
Office furniture and equipment 172,929
Leasehold improvements 14,245
----------------
1,596,813
Accumulated depreciation and amortization (531,712)
----------------
NET PROPERTY AND EQUIPMENT 1,065,101
----------------
$ 2,659,791
================
LIABILITIES AND SHAREHOLDER'S DEFICIT
CURRENT LIABILITIES:
Accounts payable $ 264,543
Accrued expenses 316,904
Line of credit 455,985
Due to bank 152,891
Customer deposits and deferred revenue 1,621,107
Current maturities of long-term obligations 48,372
----------------
TOTAL CURRENT LIABILITIES 2,859,802
-----------------
LONG-TERM OBLIGATIONS, NET OF CURRENT MATURITIES 740,063
----------------
COMMITMENTS
SHAREHOLDER'S DEFICIT:
Common stock, par value $1.00 per share; 500 shares
authorized, issued and outstanding 500
Deficit (671,563)
Due from affiliate (269,011)
----------------
(940,074)
----------------
$ 2,659,791
================
</TABLE>
See notes to financial statements.
<PAGE>
DESIGN DATA SYSTEMS CORPORATION
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
REVENUES
<S> <C>
Services $ 4,866,348
Product licenses 2,046,683
----------------
NET REVENUE 6,913,031
----------------
COST OF REVENUE
Services 1,795,474
Product licenses and development 1,945,114
-----------------
TOTAL COST OF REVENUE 3,740,588
-----------------
EXPENSES
Marketing and Sales 1,915,762
General and administrative 1,113,254
----------------
TOTAL EXPENSES: 3,029,016
EARNINGS FROM OPERATIONS 143,427
INTEREST EXPENSE (82,288)
INTEREST INCOME 6,855
---------------
NET EARNINGS $ 67,994
===============
BASIC EARNINGS PER COMMON SHARE:
NET EARNINGS $ 135.99
===============
</TABLE>
See notes to financial statements.
<PAGE>
DESIGN DATA SYSTEMS CORPORATION
STATEMENT OF SHAREHOLDER'S DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
COMMON DUE FROM
STOCK DEFICIT AFFILIATE TOTAL
<S> <C> <C> <C> <C>
Balances, December 31, 1997 $500 $(487,358) $ 0 $ (486,858)
Advances to affiliate (269,011) (269,011)
Distributions to Stockholder (252,199) (252,199)
Net earnings 67,994 67,994
--------- --------------- ----------------- -------------
Balances, December 31, 1998 $500 $ (671,563) $(269,011) $ (940,074)
========= =============== ================= =============
</TABLE>
See notes to financial statements.
<PAGE>
DESIGN DATA SYSTEMS CORPORATION
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C>
Net earnings $ 67,994
--------------
Adjustments to reconcile net earnings to net cash provided by operating
activities:
Depreciation and amortization 159,147
Doubtful receivables provision 196,250
Amortization of deferred revenues (1,311,996)
Changes in assets and liabilities, net:
Receivables 91,843
Other current assets 29,241
Accounts payable and accrued expenses 276,553
Due to bank 152,891
Customer deposits and deferred revenue 532,751
--------------
Total adjustments 126,680
--------------
Net cash provided by operating activities 194,674
--------------
CASH USED FOR INVESTING ACTIVITIES -
Additions to property and equipment (210,207)
--------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Reduction in long-term debt and capital lease obligation (912,725)
Increase in long-term debt 59,032
Advances to affiliate (269,011)
Distributions to shareholder (252,199)
Increase in line of credit 455,985
--------------
Net cash used for financing activities (97,918)
--------------
CASH AND CASH EQUIVALENTS:
Net decrease (113,451)
Balance, beginning of year 113,451
--------------
Balance, end of year
$ 0
==============
NON-CASH INVESTING AND FINANCING ACTIVITIES - In August 1998, the Company
acquired $745,211 of property through a capital lease transaction.
</TABLE>
See notes to financial statements.
<PAGE>
DESIGN DATA SYSTEMS CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS DESCRIPTION
Design Data Systems Corporation (the "Company") is a provider of
Oracle-based accounting and business applications to customers located
throughout the United States and in Canada. The Company, which was formed
on December 1, 1988 and is located in Clearwater, FL., designs, develops,
markets and supports computer software products with a variety of uses.
These products include "Financials" (e.g. general ledger, accounts payable,
accounts receivable), "Distribution" (e.g. order entry, purchase order and
inventory management), "Project Management" (e.g. project accounting) and
"Customer Relationship Management" (e.g. sales force automation and
help/service desk). The Company also offers consulting, education and
maintenance and support services in support of its customers' use of its
software products.
CASH EQUIVALENTS
The Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents. On a cash basis,
interest income received approximates the amount reported on the statement
of operations.
CONCENTRATION OF CREDIT RISKS
Concentration of credit risk with respect to trade receivables is limited
due to the large number of customers comprising the Company's customer
base. Customers' financial condition is reviewed on an ongoing basis, and
collateral is not required. The Company maintains reserves for potential
credit losses and such losses, in the aggregate, have not exceeded
management's expectations.
USE OF ESTIMATES
The preparation of financial statements in accordance 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.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation for equipment is
recorded using an accelerated method, based on the estimated useful lives
of the related assets (ranging from 5 to 7 years). Real estate under
capital lease and leasehold improvements are amortized over the shorter of
the lease term or the estimated useful lives of the assets.
ADVERTISING
The Company expenses advertising costs as incurred. Advertising expense was
approximately $537,000 in the year ending December 31, 1998.
REVENUE RECOGNITION
The Company is engaged as a seller and licensor of software. Effective
January 1, 1998, the Company adopted Statement of Position ("SOP 97-2"),
"Software Revenue Recognition" for purposes of recognizing revenue on
software transactions. In accordance with SOP 97-2, revenue is recognized
when all of the following are met: pervasive evidence of an arrangement
exists; delivery has occurred; the vendor's fee is fixed and determinable;
and collectibility is probable. For multiple-element license arrangements,
the license fee is allocated to the various elements based on fair value.
When a multiple-element arrangement includes rights to post-contract
customer support, the portion of the license fee allocated to such support
is recognized ratably over the term of the arrangement. For arrangements to
deliver software that requires significant modification or customization,
revenue is recognized on the percentage-of-completion method. The adoption
of this new standard had no material effect on the Company's financial
position or results of operations.
During 1998, SOP 98-9 was issued. The provisions of SOP 98-9 amend certain
provisions of SOP 98-4 and SOP 97-2. The adoption of these standards had no
material effect on the Company's financial position or results of
operations.
Prior to adoption of SOP 97-2, the Company followed SOP 91-1 for purposes
of recognizing revenue for software transactions. In accordance with SOP
91-1, product license revenue was recognized upon shipment to the client
provided that no significant vendor obligation remained in connection with
software being licensed and the collectibility of the sale was probable.
For arrangements that required significant modification or customization,
revenue was recognized on the percentage of completion method.
Service revenues include post-contract client support, consulting, and
training support. Post-contract client support is generally provided under
self-renewing maintenance agreements. Revenue on these maintenance
agreements is recognized ratably over the contract term. Consulting and
training services revenue is recognized in the period the service is
rendered.
RESEARCH AND DEVELOPMENT
The Company expenses research and development costs as incurred.
INCOME TAXES
The Company has elected to be taxed under Subchapter S of the Internal
Revenue Code, and accordingly, is not subject to income taxed as the
results of operations flow through to the Shareholder for inclusion in his
personal tax return. In 1998, the Company distributed approximately
$252,200 to the Shareholder to enable him to pay federal income taxes
arising from the Company's 1997 taxable income.
COMPREHENSIVE INCOME
In 1998, the Company adopted Statement of Financial Accounting Standards
("SFAS") No. 130 "Reporting Comprehensive Income." SFAS No. 130 establishes
rules for the reporting of comprehensive income and its components. The
adoption of SFAS No. 130 had no impact on the total shareholder's deficit.
EARNINGS PER COMMON SHARE
The Company follows SFAS No. 128 "Earnings per Share". Under SFAS No.
Basic Earnings Per Share excludes the effect of any dilutive options,
warrants or convertible securities and is computed by dividing the net
earnings available to common shareholders by the weighted average number of
common shares outstanding for the period. There were no such options,
warrants, or convertible securities outstanding as of or during the year
ended December 31, 1998; accordingly earnings per common share is based on
the weighted-average number of common shares outstanding during such
period. The weighted-average number of common shares outstanding during the
year ended December 31, 1998 was 500.
B. RECEIVABLES:
Trade $1,648,719
Other 1,118
----------------
1,649,837
Less allowance for doubtful accounts 117,929
----------------
$1,531,908
================
During the year ended December 31, 1998, the provision for doubtful
accounts and write offs approximated $196,000 and $217,000, respectively.
C. NOTES PAYABLE, LONG-TERM OBLIGATIONS AND COMMITMENTS
Term loans $ 44,173
Capital lease obligation 744,262
----------------
788,435
Less current maturities 48,372
----------------
$ 740,063
================
The current carrying value of the term loan approximates its fair market
value. It was not practicable to estimate the fair market value of the
capital lease obligation.
LINE OF CREDIT
The Company had a line of credit for $750,000 (which cannot exceed 75% of
acceptable receivables), of which approximately $294,000 was available at
December 31, 1998. The agreement, which was terminated subsequent to
year-end in connection with the Company's sale of substantially all of its
assets (see Note F), stipulated interest at prime (8.25% at December 31,
1998) plus 1%. Short-term borrowings under the line of credit agreement, at
and for the year ended December 31, 1998 were as follows:
Balance outstanding at December 31 $ 455,985
=========
Maximum amount outstanding during the year $ 714,000
=========
Average amount outstanding during the year $ 238,000
=========
Weighted average interest rate during the year
based on average month-end balances 9.25%
===========
The credit facility was secured by substantially all of the Company's
receivables and the unconditional guarantee of the Company's Shareholder
TERM LOAN
The term loan outstanding at December 31, 1998 stipulated interest at a
fixed rate of 8.75% and required monthly principal and interest payments of
$1,873 through February 26, 2001. The loan was paid subsequent to
December 31, 1998; accordingly the entire balance has been included in
current liabilities in the accompanying balance sheet. The loan was
secured by the equipment purchased with the proceeds of the note and the
unconditional guarantee of the Company's Shareholder.
COMMITMENTS
The Company leases its main facility from an affiliated entity (the
"Affiliate") under a capital lease agreement expiring in October 2018. The
lease, which provides for monthly payments of approximately $16,600
(including sales tax), contains a provision which allows for escalation of
rental payments based on the rate of change in the consumer price index.
Interest paid was approximately $82,200 for the year ended December 31,
1998. Total rent expense charged to operations approximated $112,000 in
1998.
<PAGE>
At December 31, 1998, scheduled maturities of the term loan and minimum
rental commitments (exclusive of sales taxes) under noncancelable operating
and capital leases with initial and/or remaining terms of one year or more,
are as follows:
<TABLE>
<CAPTION>
Operating
Capital Leases Term Loan Leases
-------------------- ------------------- --------------
<S> <C> <C> <C>
1999 $ 153,675 $ 19,364 $ 72,000
2000 153,675 24,809 72,000
2001 153,675 51,500
2002 153,675 33,600
2003 153,675 33,600
Thereafter 2,253,856 498,400
--------------- ------------------- ---------------
3,022,231 44,173 761,100
Less imputed interest 2,277,969
--------------- ------------------- -----------------
$ 744,262 $ 44,173 $ 761,100
=============== =================== =================
</TABLE>
At December 31, 1998, the Company has advanced approximately $269,000 to
the Affiliate. The Company has also guaranteed the Affilate's debt in
connection with such entity's acquisition of the above-mentioned facility,
as well as one other building (such debt approximated $1,976,000 at
December 31, 1998). The advances, which have been reflected as a component
of the Shareholder's deficit in the accompanying balance sheet, were
unsecured, non-interest bearing, and due on demand. Subsequent to December
31, 1998 the advances were forgiven and reflected as distributions to the
Shareholder.
D. PROFORMA NET EARNINGS AS IF THE COMPANY WAS A "C" CORPORATION
If the Company had elected to be taxed as a "C" corporation it would have
been subject to income taxes. The following information presents the
proforma net earnings at December 31 1998 as if the Company was a "C"
corporation. The presentation used is in accordance with Financial
Accounting Standards Statement No. 109, "Accounting for Income Taxes".
Earnings before income taxes $67,994
Income tax expense (26,517)
Benefit for income taxes 26,517
---------
Pro forma net earnings $67,994
=======
A benefit for income taxes has been assumed too offset the proforma
provision for income taxes because of the Company's deficit position. No
benefit in excess of the provision has been assumed because the related
deferred income tax asset would not meet the required asset recognition
standard established by SFAS 109.
E. DEFINED CONTRIBUTION PLAN
The Company maintains a 401(k) Plan under which most full-time and certain
part-time employees are covered, and under which such employees may elect
to contribute up to 15% of their earnings. In addition, the Company makes
contributions to this plan on behalf of all eligible employees. Company
contributions for the year ended December 31, 1998 approximated $26,000.
F. SUBSEQUENT EVENT
Effective September 30, 1999, the Company sold substantially all of its
assets to ASA International Ltd. ("ASA"). Simultaneously, ASA assumed
substantially all of the Company's liabilities. In addition to the
assumption of such liabilities, the transaction resulted in an exchange of
approximately $5,000,000 in cash.
UNAUDITED QUARTERLY INFORMATION
DESIGN DATA SYSTEMS CORPORATION
The following unaudited condensed financial statements of Design Data
Systems Corporation have been prepared in accordance with generally accepted
accounting principles for interim financial information and Item 210.3-02(b) of
Regulation S-X. Accordingly they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included.
BALANCE SHEET
AT SEPTEMBER 30, 1999
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ -
Receivables-net 1,497,228
Other current assets 50,117
-------------
TOTAL CURRENT ASSETS 1,547,345
PROPERTY AND EQUIPMENT-NET 1,014,102
-------------
$ 2,561,447
=============
LIABILITIES & SHAREHOLDERS DEFICIT
CURRENT LIABILITIES:
Revolving Credit & Bank Note $ 408,038
Accrued expenses 598,325
Deferred revenue & customer deposits 1,426,558
Accounts payable 111,449
Other current liabilities 29,853
-------------
TOTAL CURRENT LIABILITIES 2,574,223
LONG-TERM LIABILITIES 742,414
COMMITMENTS AND CONTINGENCY
SHAREHOLDERS' DEFICIT
Common stock 500
Retained Deficit (755,690)
-------------
(755,190)
-------------
$ 2,561,447
=============
<PAGE>
UNAUDITED QUARTERLY INFORMATION
DESIGN DATA SYSTEMS CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
For the nine months ended
September 30,
REVENUES: 1999 1998
-------------------------------
SERVICES $ 3,309,168 $ 3,356,042
PRODUCT LICENSES 1,843,765 1,591,055
-------------- --------------
NET REVENUE 5,152,933 4,947,097
-------------- --------------
COST OF REVENUE:
SERVICES 1,648,303 1,733,858
PRODUCT LICENSES 822,343 865,027
-------------- --------------
TOTAL COST OF REVENUE 2,470,646 2,598,885
EXPENSES:
MARKETING & SALES 1,553,681 1,634,324
GENERAL & ADMINISTRATIVE 780,310 820,812
-------------- --------------
TOTAL EXPENSES 2,333,991 2,455,136
-------------- --------------
EARNINGS (LOSS) FROM OPERATIONS 348,296 (106,924)
Interest Expense (136,935) (22,235)
Interest Income - 6,347
-------------- --------------
NET EARNINGS (LOSS) $ 211,361 $ (122,812)
============== ==============
Basic Earnings (Loss) Per Common Share $ 422.72 $ (245.62)
============== ==============
Basic Weighted Average Shares 500 500
============== ==============
<PAGE>
UNAUDITED QUARTERLY INFORMATION
DESIGN DATA SYSTEMS CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)
For the nine months ended
September 30,
----------------------------
1999 1998
----------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $ 211,362 $ (122,812)
------------ -------------
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization 124,515 121,500
Changes in assets and liabilities (5,298) 120,485
------------- ------------
Total adjustments 119,217 241,985
------------- ------------
Net cash provided by operating
activities 330,579 119,173
------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (73,516) (197,411)
------------ ------------
Net cash used by investing
activities (73,516) (197,411)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in notes payable (214,417) 481,213
Increase (decrease) in long-term debt (16,167) 59,032
Payments of long-term debt - (86,338)
Advances to affiliate - (236,921)
Distribution to shareholder (26,479) (252,199)
------------ -----------
Net cash used by financing activities (257,063) (35,213)
------------ -----------
CASH AND CASH EQUIVALENTS:
Net decrease - (113,451)
Balance, beginning of year - 113,451
------------ ------------
Balance, end of period $ - -
============= ============
<PAGE>
Item 7(b) PRO FORMA Financial Information
PRO FORMA FINANCIAL INFORMATION
ASA INTERNATIONAL LTD. AND SUBSIDIARIES
The accompanying condensed financial statements illustrate the effect
of the acquisition of the business of Design Data Systems Corporation (DDS),
("Pro Forma") on the Company's financial position and results of operations. The
pro forma condensed consolidated balance sheet as of September 30, 1999 is based
on the historical balance sheets of ASA International Ltd and DDS as of that
date. The pro forma condensed consolidated balance sheet assumes the acquisition
took place on September 30, 1999.
The pro forma condensed consolidated statement of operations for the
year ended December 31, 1998 is based on the historical statements of operations
of ASA International Ltd and DDS and assumes the acquisition took place on
January 1, 1998. The pro forma condensed consolidated statement of operations
for the nine months ended September 30, 1999 is based on the historical
statements of operations of ASA International Ltd and DDS and assumes the
acquisition took place on January 1, 1999.
The pro forma condensed consolidated financial statements may not be
indicative of the actual results of the acquisition and there can be no
assurance that the foregoing results will be obtained. In particular, the pro
forma condensed financial statements are based on management's current estimate
of the allocation of the purchase price, the actual allocation of which may
differ.
The accompanying pro forma condensed financial statements should be
read in conjunction with the historical financial statements of ASA
International Ltd, and DDS.
<TABLE>
<CAPTION>
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
AT SEPTEMBER 30, 1999
(Unaudited)
----Pro Forma Adjustments----
Historical DDS (a) Other (b) Pro Forma
------------- --------- ------------- -----------
ASSETS
CURRENT ASSETS:
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 4,907,311 $ - (1) $(5,191,752) $ -
- - (2) 284,441 -
Receivables - net 3,890,089 1,497,228 - 5,387,317
Computer hardware held for resale 210,178 - - 210,178
Other current assets 7,674,992 50,117 - 7,725,109
----------- ---------- ------------ -----------
TOTAL CURRENT ASSETS 16,682,570 1,547,345 (4,907,311) 13,322,604
PROPERTY AND EQUIPMENT - NET 4,866,083 1,014,102 (3) (704,766) 5,175,419
SOFTWARE - NET 802,286 - (4) 5,501,256 6,303,542
COST EXCEEDING NET ASSETS
ACQUIRED - NET 27,185 - - 27,185
OTHER ASSETS 2,967,128 - - 2,967,128
----------- ----------- ------------ -----------
$25,345,252 $ 2,561,447 $ (110,821) $27,795,878
=========== =========== ============ ===========
- ---------------------------------------------------------------------------------------------
(a) To reflect the assets and liabilities of Design Data Systems (DDS) as of
September 30, 1999.
(b) Proforma adjustments are as follows:
(1) to reflect the purchase price payment of $5,191,752.
(2) to reclassify cash exchanged in excess of cash on hand as a liability.
(3) to eliminate capitalized lease asset and related liability.
(4) to record the fair market value of software acquired.
(5) to reflect pay-off of bank debt at acquisition.
(6) to eliminate the equity of DDS.
</TABLE>
ASA INTERNATIONAL LTD. AND SUBSIDIARIES
<TABLE>
<CAPTION>
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
AT SEPTEMBER 30, 1999
(Unaudited)
----Pro Forma Adjustments----
Historical DDS (a) Other (b) Pro Forma
---------- ---------- -------------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
<S> <C> <C> <C> <C> <C>
Revolving credit & bank note $ - $ 408,038 (5) $(408,038) $ -
Notes payable-other 3,200,000 - - 3,200,000
Deferred option & license fees 2,460,000 - - 2,460,000
Accrued expenses 1,625,476 598,325 2,223,801
Taxes-payable and deferred 1,188,412 - - 1,188,412
Deferred revenue & customer
deposits 1,345,452 1,426,558 - 2,772,010
Accounts payable 767,049 111,449 (2) 284,441 1,162,939
Other current liabilities 83,008 29,853 - 112,861
----------- ---------- -------------- -----------
TOTAL CURRENT LIABILITIES 10,669,397 2,574,223 (123,597) 13,120,023
DEFERRED TAXES 432,000 - - 432,000
LONG-TERM DEBT 3,970,188 - - 3,970,188
LONG-TERM LIABILITIES 277,014 742,414 (3) (742,414) 277,014
COMMITMENTS AND CONTINGENCIES - - - -
SHAREHOLDERS' EQUITY:
Preferred stock
Common stock 43,844 500 (6) (500) 43,844
Additional paid-in capital 7,800,081 - - 7,800,081
Retained earnings (deficit) 4,738,514 (755,690) (6) 755,690 4,738,514
Accumulated other comprehensive
loss (38,386) - - (38,386)
----------- ---------- -------------- -----------
12,544,053 (755,190) 755,190 12,544,053
Less: Treasury stock 2,547,400 - - 2,547,400
----------- ---------- -------------- -----------
9,996,653 (755,190) 755,190 9,996,653
----------- ---------- -------------- -----------
$25,345,252 $2,561,447 $(110,821) $27,795,878
=========== ========== ============== ============
- -------------------------------------------------------------------------------------------
(a) To reflect the assets and liabilities of DDS as of September 30, 1999.
(b) Proforma adjustments are as follows:
(1) to reflect the purchase price payment of $5,191,752.
(2) to reclassify cash exchanged in excess of cash on hand as a liability.
(3) to eliminate capitalized lease asset and related liability.
(4) to record the fair market value of software acquired.
(5) to reflect pay-off of bank debt at acquisition.
(6) to eliminate the equity of DDS.
</TABLE>
PRO FORMA FINANCIAL INFORMATION
ASA INTERNATIONAL LTD. AND SUBSIDIARIES
<TABLE>
<CAPTION>
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1998
(Unaudited)
----Pro Forma Adjustments----
Historical DDS (a) Other(b) Pro Forma
---------- ------------ ---------- -----------
REVENUES
<S> <C> <C> <C> <C>
Services $18,217,434 $ 4,866,348 $ - $23,083,782
Product licenses 8,490,301 2,046,683 - 10,536,984
Computer and add-on hardware 8,760,421 - - 8,760,421
----------- ------------ ---------- -----------
NET REVENUE 35,468,156 6,913,031 - 42,381,187
COST OF REVENUE
Services 11,742,580 1,795,474 (1) (29,828) 13,508,226
Product licenses 4,650,739 1,945,114 (1) (32,479) 7,663,625
- - (2) 1,100,251 -
Computer and add-on hardware 7,626,820 - - 7,626,820
----------- ----------- ---------- ------------
TOTAL COST OF REVENUE 24,020,139 3,740,588 1,037,944 28,798,671
EXPENSES
Marketing and sales 5,577,389 1,915,761 (1) (14,582) 7,478,568
General and administrative 4,002,374 1,113,255 (1) (39,495) 5,076,134
Amortization of goodwill 336,183 - - 336,183
----------- ----------- ---------- ------------
TOTAL EXPENSES 9,915,946 3,029,016 (54,077) 12,890,885
EARNINGS FROM OPERATIONS 1,532,071 143,427 (983,867) 691,631
INTEREST EXPENSE (603,299) (78,263) (3) 78,263 (603,299)
INTEREST INCOME 140,837 6,855 - 147,692
OTHER EXPENSE - (4,025) - (4,025)
----------- ----------- ---------- ------------
EARNINGS BEFORE TAXES ON INCOME 1,069,609 67,994 (905,604) 231,999
INCOME TAXES 653,000 - (4) (513,801) 139,199
----------- ----------- ---------- ------------
NET EARNINGS $ 416,609 $ 67,994 $(391,803) $ 92,800
=========== =========== ========== ============
NET INCOME PER SHARE
BASIC $ 0.12 $ - $ - $ .03
=========== =========== ========== ============
DILUTED $ 0.11 $ - $ - $ .03
=========== =========== ========== ============
WEIGHTED AVERAGE SHARES
BASIC 3,456,362 - - 3,456,362
=========== =========== ========== ============
DILUTED 3,634,908 - - 3,634,908
=========== =========== ========== ============
- ------------------------------------------------------------------------------------------
(a) To reflect the profit and loss of DDS for the period.
(b) Proforma adjustments are as follows:
(1) to record adjustments to depreciation expense.
(2) to record amortization of software.
(3) to eliminate interest expense.
(4) to record related income tax provision.
</TABLE>
PRO FORMA FINANCIAL INFORMATION
ASA INTERNATIONAL LTD. AND SUBSIDIARIES
<TABLE>
<CAPTION>
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(Unaudited)
----Pro Forma Adjustments----
Historical DDS (a) Other(b) Pro Forma
---------- ----------- ---------- -----------
REVENUES
<S> <C> <C> <C> <C>
Services $11,077,578 $ 3,309,168 $ - $14,386,746
Product licenses 4,177,661 1,843,765 - 6,021,426
Computer and add-on hardware 3,406,305 - - 3,406,305
------------ ------------ ---------- -----------
NET REVENUE 18,661,544 5,152,933 - 23,814,477
COST OF REVENUE
Services 6,907,673 1,648,303 (1) (14,159) 8,541,817
Product licenses 2,729,983 822,343 (1) (15,418) 4,362,096
- - (2) 825,188 -
Computer and add-on hardware 2,566,531 - - 2,566,531
------------ ----------- ---------- ------------
TOTAL COST OF REVENUE 12,204,187 2,470,646 795,611 15,470,444
EXPENSES
Marketing and sales 3,065,301 1,553,681 (1) (6,922) 4,612,060
General and administrative 2,637,280 780,310 (1) (31,763) 3,385,827
Amortization of goodwill 33,095 - - 33,095
------------ ----------- ---------- ------------
TOTAL EXPENSES 5,735,676 2,333,991 (38,685) 8,030,982
EARNINGS FROM OPERATIONS 721,681 348,296 (756,926) 313,051
INTEREST EXPENSE (285,478) (136,935) (3) 136,935 (285,478)
INTEREST INCOME 205,412 - - 205,412
EQUITY IN LOSS FROM AFFILIATE (16,828) - - (16,828)
OTHER INCOME 3,822,105 - - 3,822,105
------------ ----------- ----------- ------------
EARNINGS BEFORE TAXES ON INCOME 4,446,892 211,361 (619,991) 4,038,262
INCOME TAXES 2,673,000 - (4) (250,043) 2,422,957
------------ ----------- ---------- ------------
NET EARNINGS $ 1,773,892 $ 211,361 $(369,948) $1,615,305
============ =========== ========== ============
NET INCOME PER SHARE:
BASIC $ 0.55 $ - $ - $ .50
=========== =========== ========== ============
DILUTED $ 0.51 $ - $ - $ .47
=========== =========== ========== ============
WEIGHTED AVERAGE SHARES
BASIC 3,243,270 - - 3,243,270
=========== =========== ========== ============
DILUTED 3,457,897 - - 3,457,897
=========== =========== ========== ============
- ------------------------------------------------------------------------------------------
(a) To reflect the profit and loss of DDS for the period.
(b) Proforma adjustments are as follows:
(1) to record adjustments to depreciation expense.
(2) to record amortization of software.
(3) to eliminate interest expense.
(4) to record related income tax provision.
</TABLE>
