<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
TO
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
May 23, 1997
Date of Report (Date of earliest event reported)________________________________
Radiant Systems, Inc.
________________________________________________________________________________
(Exact name of registrant as specified in its charter)
Georgia 0-22065 11-2749765
________________________________________________________________________________
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
1000 Alderman Drive, Alpharetta, Georgia 30202
________________________________________________________________________________
(Address of principal executive offices) (Zip Code)
(770) 772-3000
Registrant's telephone number, including area code _____________________________
Not applicable
________________________________________________________________________________
(Former name or former address, if changed since last report)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired:
RESTAURANT MANAGEMENT AND CONTROL SYSTEMS, INC.
Report of Independent Public Accountants
Balance Sheets--October 31, 1995 and 1996 and April 30, 1997 (unaudited)
Statements of Operations for the years ended October 31, 1995 and 1996
and for the six months ended April 30, 1996 and 1997 (unaudited)
Statements of Shareholders' Deficit for the years ended October 31, 1995
and 1996 and for the six months ended April 30, 1997 (unaudited)
Statements of Cash Flows for the years ended October 31, 1995 and 1996
and for the six months ended April 30, 1996 and 1997 (unaudited)
Notes to Financial Statements
(b) Pro Forma Financial Information:
Introduction
Pro Forma Combined Balance Sheet as of March 31, 1997 (unaudited)
Pro Forma Combined Statements of Operations for the year ended December
31, 1996 and the three month period ended March 31, 1997 (unaudited)
(c) Exhibits:
2.1 Agreement and Plan of Merger, dated as of May 15, 1997, by and among
Radiant Systems, Inc., ReMACS Acquisition Corporation, Restaurant
Management and Control Systems, Inc., and each of the Shareholders of
Restaurant Management and Control Systems, Inc. (incorporated by
reference from the Company's Current Report on Form 8-K dated May 23,
1997)
23.1 Consent of Arthur Andersen LLP
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Restaurant
Management and Controls Systems, Inc.:
We have audited the accompanying balance sheets of RESTAURANT MANAGEMENT AND
CONTROL SYSTEMS, INC. (a California corporation) as of October 31, 1995 and
1996 and the related statements of operations, shareholders' deficit, and cash
flows for each of the years 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 audits.
We conducted our audits 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 audits provide 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 Restaurant Management and
Control Systems, Inc. as of October 31, 1995 and 1996 and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ Arthur Andersen LLP
Atlanta, Georgia
June 20, 1997
F-1
<PAGE>
RESTAURANT MANAGEMENT AND CONTROL SYSTEMS, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
OCTOBER 31,
------------------------
APRIL 30,
1995 1996 1997
----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents............. $ 819,329 $ 1,192,288 $ 391,404
Accounts receivable, net of allowances
for doubtful accounts of $112,500,
$125,000, and $125,000 in 1995, 1996,
and 1997, respectively............... 1,080,140 1,172,632 864,735
Inventories........................... 61,045 222,714 172,099
Other................................. 16,221 42,790 45,942
----------- ----------- -----------
Total current assets................ 1,976,735 2,630,424 1,474,990
PROPERTY AND EQUIPMENT, net of
accumulated depreciation of $347,293,
$435,482, and $506,323 in 1995, 1996,
and 1997, respectively................. 340,586 411,345 430,555
SOFTWARE DEVELOPMENT COSTS, net of
accumulated amortization of $104,053,
$321,433, and $442,886 in 1995, 1996,
and 1997, respectively................. 164,451 363,840 358,734
OTHER ASSETS............................ 16,001 0 0
----------- ----------- -----------
$ 2,497,773 $ 3,405,609 $ 2,263,469
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable...................... $ 207,299 $ 378,825 $ 122,418
Accrued liabilities................... 848,412 1,689,333 718,222
Customer deposits and deferred
revenue.............................. 2,465,086 4,582,064 5,706,064
Current portion of long-term debt..... 66,364 124,500 128,288
----------- ----------- -----------
Total current liabilities........... 3,587,161 6,774,722 6,674,992
Long-term debt, less current portion.. 102,288 171,288 71,641
----------- ----------- -----------
Total liabilities................... 3,689,449 6,946,010 6,746,633
----------- ----------- -----------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' DEFICIT:
Common stock, no par value; 100,000
shares authorized; 1,050 shares
issued and outstanding in 1995 and
1996................................. 1,050 1,050 1,050
Accumulated deficit................... (1,192,726) (3,541,451) (4,484,214)
----------- ----------- -----------
(1,191,676) (3,540,401) (4,483,164)
----------- ----------- -----------
$ 2,497,773 $ 3,405,609 $ 2,263,469
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these balance sheets.
F-2
<PAGE>
RESTAURANT MANAGEMENT AND CONTROL SYSTEMS, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE YEARS FOR THE SIX MONTHS
ENDED OCTOBER 31, ENDED APRIL 30,
----------------------- ----------------------
1995 1996 1996 1997
---------- ----------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
REVENUES:
Software sales............... $1,955,898 $ 3,032,431 $1,502,629 $1,080,206
Customer support,
maintenance, and other
services.................... 2,325,772 2,615,307 1,581,688 907,991
---------- ----------- ---------- ----------
Total revenues............. 4,281,670 5,647,738 3,084,317 1,988,197
---------- ----------- ---------- ----------
COST OF REVENUES:
Software sales............... 250,801 638,264 372,113 114,283
Customer support,
maintenance, and other
services.................... 1,508,779 1,407,517 794,696 657,288
---------- ----------- ---------- ----------
Total cost of revenues..... 1,759,580 2,045,781 1,166,809 771,571
---------- ----------- ---------- ----------
GROSS PROFIT.................. 2,522,090 3,601,957 1,917,508 1,216,626
---------- ----------- ---------- ----------
OPERATING EXPENSES:
Product development.......... 1,052,186 2,057,998 958,172 699,345
Sales and marketing.......... 1,202,452 1,196,403 515,790 685,108
Depreciation and
amortization................ 154,145 392,228 186,527 185,262
General and administrative... 1,019,130 2,323,180 638,566 591,903
---------- ----------- ---------- ----------
Total operating expenses... 3,427,913 5,969,809 2,299,055 2,161,618
---------- ----------- ---------- ----------
LOSS FROM OPERATIONS.......... (905,823) (2,367,852) (381,547) (944,992)
INTEREST EXPENSE (INCOME),
NET.......................... 22,763 (19,127) (14,462) (2,229)
---------- ----------- ---------- ----------
NET LOSS...................... $ (928,586) $(2,348,725) $ (367,085) $ (942,763)
========== =========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
F-3
<PAGE>
RESTAURANT MANAGEMENT AND CONTROL SYSTEMS, INC.
STATEMENTS OF SHAREHOLDERS' DEFICIT
<TABLE>
<CAPTION>
COMMON STOCK
------------- ACCUMULATED
SHARES AMOUNT DEFICIT TOTAL
------ ------ ----------- -----------
<S> <C> <C> <C> <C>
BALANCE, October 31, 1994.............. 1,050 $1,050 $ (264,140) $ (263,090)
Net loss.............................. 0 0 (928,586) (928,586)
----- ------ ----------- -----------
BALANCE, October 31, 1995.............. 1,050 1,050 (1,192,726) (1,191,676)
Net loss.............................. 0 0 (2,348,725) (2,348,725)
----- ------ ----------- -----------
BALANCE, October 31, 1996.............. 1,050 1,050 (3,541,451) (3,540,401)
Net loss.............................. 0 0 (942,763) (942,763)
----- ------ ----------- -----------
BALANCE, April 30, 1997 (Unaudited).... 1,050 $1,050 $(4,484,214) $(4,483,164)
===== ====== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
<PAGE>
RESTAURANT MANAGEMENT AND CONTROL SYSTEMS, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED FOR THE SIX MONTHS ENDED
OCTOBER 31 APRIL 30
----------------------- --------------------------
1995 1996 1996 1997
---------- ----------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss................ $ (928,586) $(2,348,725) $ (367,085) $ (942,763)
Adjustments to reconcile
net loss to net cash
provided by (used in)
operating activities:
Depreciation and
amortization.......... 154,145 392,228 186,527 185,262
Changes in assets and
liabilities:
Accounts receivable... (892,243) (84,054) (188,228) 307,897
Inventories........... (37,455) 45,797 10,565 50,615
Other assets.......... (8,844) (19,006) (29,678) (3,152)
Accounts payable...... 117,806 171,526 41,889 (212,796)
Accrued liabilities... 677,990 840,921 (500,554) (971,113)
Customer deposits and
deferred revenue..... 1,996,787 2,116,978 1,129,253 1,124,002
---------- ----------- ------------ ------------
Net cash provided by
(used in) operating
activities.......... 1,079,600 1,115,665 282,689 (462,048)
---------- ----------- ------------ ------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchases of property
and equipment.......... (247,910) (245,326) (58,537) (86,051)
Capitalized software
development costs...... (23,098) (417,050) (253,294) (113,315)
---------- ----------- ------------ ------------
Net cash used in
investing
activities.......... (271,008) (662,376) (311,831) (199,366)
---------- ----------- ------------ ------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Borrowings under long-
term debt.............. 4,482 0 0 0
Repayments of long-term
debt................... (53,400) (80,330) (31,447) (139,470)
---------- ----------- ------------ ------------
Net cash used in
financing
activities.......... (48,918) (80,330) (31,447) (139,470)
---------- ----------- ------------ ------------
INCREASE (DECREASE) IN
CASH AND CASH
EQUIVALENTS............. 759,674 372,959 (60,589) (800,884)
CASH AND CASH
EQUIVALENTS, BEGINNING
OF PERIOD............... 59,655 819,329 819,329 1,192,288
---------- ----------- ------------ ------------
CASH AND CASH
EQUIVALENTS, END OF
PERIOD.................. $ 819,329 $ 1,192,288 $ 758,740 $ 391,404
========== =========== ============ ============
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW
INFORMATION:
Cash paid during the
period for interest.... $ 22,763 $ 12,908 $ 6,454 $ 11,382
========== =========== ============ ============
Cash paid during the
period for income
taxes.................. $ 0 $ 0 $ 0 $ 0
========== =========== ============ ============
NONCASH INVESTING AND
FINANCING ACTIVITIES:
Inventory purchase under
note payable
obligation............. $ 0 $ 207,466 $ 0 $ 0
========== =========== ============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
F-5
<PAGE>
RESTAURANT MANAGEMENT AND CONTROL SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995 AND 1996 AND APRIL 30, 1997
1. ORGANIZATION AND BACKGROUND
Restaurant Management and Control Systems, Inc. ("ReMACS") provides a full
suite of management and control technology solutions to the restaurant
industry throughout the United States.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Presentation
The preparation of the 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
disclosures 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.
Revenue Recognition
ReMACS's revenue is generated primarily through software, support and
maintenance, and installation and training:
. Software Sales. Revenue from software licenses sales is generally
recognized as products are shipped, provided that no significant vendor
and postcontract support obligations remain, and the collection of the
related receivable is probable.
. Support and Maintenance. ReMACS offers to its customers postcontract
support in the form of maintenance, telephone support, and unspecified
software enhancements. Revenue from support and maintenance is generally
recognized as the service is performed.
. Installation and Training. ReMACS offers installation and training
services to its customers. Revenue from installation and training is
generally recognized at the time the service is performed.
As discussed in Note 6, the Company entered into a custom development
arrangement during fiscal 1995. Revenue under the arrangement is being
recognized based on percentage-of-completion method using cost-to-cost
measures. Payments received in advance are recorded as customer deposits and
deferred revenue in the accompanying balance sheets and are recognized as
revenue when the related product is shipped or related revenue is earned.
Inventories
Inventories consist principally of software media and are stated at the
lower of cost (first-in, first-out method) or market.
Property and Equipment
Property and equipment are recorded at cost, less accumulated depreciation
and amortization. Depreciation and amortization are provided using the
straight-line method over estimated useful lives of three to five years.
F-6
<PAGE>
RESTAURANT MANAGEMENT AND CONTROL SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
Property and equipment at October 31, 1995 and 1996 are summarized as
follows:
<TABLE>
<CAPTION>
1995 1996
--------- ---------
<S> <C> <C>
Computers and office equipment......................... $ 600,644 $ 750,740
Furniture and fixtures................................. 87,235 96,087
--------- ---------
687,879 846,827
Less accumulated depreciation and amortization......... (347,293) (435,482)
--------- ---------
$ 340,586 $ 411,345
========= =========
</TABLE>
Software Development Costs
Capitalized software development costs consist principally of salaries and
certain other expenses directly related to development and modification of
software products. Capitalization of such costs begins when a working model
has been produced as evidenced by the completion of design, planning, coding,
and testing such that the product meets its design specifications and has
thereby established technological feasibility. Capitalization of such costs
ends when the resulting product is available for general release to the
public. Amortization of capitalized software development costs is provided at
the greater of the ratio of current product revenue to the total of current
and anticipated product revenue or on a straight-line basis over the estimated
economic life of the software, which ReMACS has determined is not more than
three years.
Fair Value of Financial Instruments
The book values of cash, trade accounts receivable, trade accounts payable,
and other financial instruments approximate their fair values principally
because of the short-term maturities of these instruments. The fair value of
ReMACS's long-term debt is estimated based on the current rates offered to
ReMACS for debt of similar terms and maturities. Under this method, ReMACS's
fair value of long-term debt was not significantly different than the stated
value at October 31, 1996.
Statement of Cash Flows
ReMACS considers all highly liquid investments purchased with a maturity of
three months or less to be cash.
Significant Customer Concentration
A majority of ReMACS's customers operate within the food service industry,
and a significant portion of the net sales of ReMACS is made to a limited
number of customers. During the years ended October 31, 1995 and 1996, the
following clients individually accounted for more than 10% of the ReMAC's
revenue:
<TABLE>
<CAPTION>
OCTOBER 31,
------------
1995 1996
----- -----
<S> <C> <C>
Customer A..................................................... 24.8% 44.0%
Customer B..................................................... 12.4% *
</TABLE>
* Accounted for less than 10% of total revenues for the period indicated.
At October 31, 1996, 15.1% of ReMAC's accounts receivable related to
Customer A.
F-7
<PAGE>
RESTAURANT MANAGEMENT AND CONTROL SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
Long-Lived Assets
ReMACS periodically reviews the values assigned to long-lived assets, such
as property and equipment and software development costs, to determine if any
impairments are other than temporary. Management believes that the long-lived
assets in the accompanying balance sheets are appropriately valued.
Interim Financial Information
The accompanying financial statements as of April 30, 1997 and for the six-
month periods ended April 30, 1996 and 1997 are unaudited. In the opinion of
the management of ReMACS, these financial statements reflect all adjustments,
consisting only of normal and recurring adjustments, necessary for a fair
presentation of the financial statements. The results of operations for the
six-month period ended April 30, 1997 are not necessarily indicative of the
results that may be expected for the full year.
3. PRODUCT DEVELOPMENT EXPENDITURES
Product development expenditures for the years ended October 31, 1995 and
1996 are summarized as follows:
<TABLE>
<CAPTION>
1995 1996
---------- ----------
<S> <C> <C>
Total development expenditures..................... $1,075,284 $2,475,048
Less additions to capitalized software development
costs prior to amortization....................... (23,098) (417,050)
---------- ----------
Product development expense........................ $1,052,186 $2,057,998
========== ==========
</TABLE>
The activity in the capitalized software development account during 1995 and
1996 is summarized as follows:
<TABLE>
<CAPTION>
1995 1996
---------- ----------
<S> <C> <C>
Balance at beginning of period, net................ $ 196,006 $ 164,451
Additions.......................................... 23,098 417,050
Amortization expense............................... (54,653) (217,661)
---------- ----------
Balance at end of period, net...................... $ 164,451 $ 363,840
========== ==========
</TABLE>
All capitalized software development costs at October 31, 1996, were subject
to amortization as products were available for general release.
4. LONG-TERM DEBT
Long-term debt, including obligations under capital leases, consists of the
following:
<TABLE>
<CAPTION>
OCTOBER 31,
----------------------
1995 1996
---------- ----------
<S> <C> <C>
Note payable to vendor, interest at 7%, due in
quarterly installments of $5,000 to $21,500
through January 1999, secured by certain
inventory......................................... $ 0 $ 193,500
Capital lease obligations, interest at 10.25%,
payable monthly through 1998, secured by
equipment......................................... 168,652 102,288
---------- ----------
168,652 295,788
Less current portion............................... 66,364 124,500
---------- ----------
$ 102,288 $ 171,288
========== ==========
</TABLE>
F-8
<PAGE>
RESTAURANT MANAGEMENT AND CONTROL SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
ReMACS has a $500,000 line of credit that bears interest at the prime rate
plus 1% (8.25% at October 31, 1996). The line of credit expires in July 1997
and is secured by substantially all of ReMACS's assets and is personally
guaranteed by ReMACS's shareholders. At October 31, 1996, $0 was outstanding
and $500,000 was available under the facility.
At October 31, 1996, aggregate maturities of long-term debt are as follows:
<TABLE>
<S> <C>
1997.................................................... $ 124,500
1998.................................................... 128,288
1999.................................................... 43,000
-----------
$ 295,788
===========
</TABLE>
5. INCOME TAXES
The sources of the difference between the financial accounting and the tax
bases of ReMACS's assets and liabilities which give rise to the deferred tax
assets and liabilities and the tax effects of each are as follows as of
October 31, 1995 and 1996:
<TABLE>
<CAPTION>
1995 1996
--------- -----------
<S> <C> <C>
Deferred tax asset (liability):
Net operating loss ("NOL") carryforwards.... $ 455,457 $ 1,222,429
Accrued liabilities......................... 89,600 215,600
Allowance for doubtful accounts............. 45,000 60,000
Capitalized software........................ (65,780) (145,536)
--------- -----------
Net deferred tax assets................... 524,277 1,352,493
Valuation allowance........................... (524,277) (1,352,493)
--------- -----------
$ 0 $ 0
========= ===========
</TABLE>
ReMACS's NOL carryforwards expire beginning 2007. For financial reporting
purposes, a valuation allowance has been recognized to offset the deferred tax
assets at October 31, 1995 and 1996, as realization of these assets is
uncertain. Utilization of existing NOL carryforwards may be limited in future
years, if significant ownership changes occur (see Note 7). The following
summarizes the components of the income tax provision (benefit):
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
OCTOBER 31,
-----------------------
1995 1996
--------- -----------
<S> <C> <C>
Current..................................... $ 0 $ 0
Deferred.................................... (355,112) (828,216)
Valuation allowance......................... 355,112 828,216
--------- -----------
Income tax provision (benefit).............. $ 0 $ 0
========= ===========
</TABLE>
A reconciliation from the federal statutory rate to the tax provision
(benefit) is as follows:
<TABLE>
<CAPTION>
1995 1996
--------- -----------
<S> <C> <C>
Statutory federal tax rate.................... (34.0)% (34.0)%
State income taxes, net of federal tax bene-
fit.......................................... (6.1) (6.1)
Other......................................... .5 .3
Valuation allowance........................... 39.6 39.8
--------- -----------
0% 0%
========= ===========
</TABLE>
F-9
<PAGE>
RESTAURANT MANAGEMENT AND CONTROL SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
6. COMMITMENTS AND CONTINGENCIES
Leases
ReMACS leases office space, equipment, and certain vehicles under
noncancelable operating lease agreements expiring on various dates through
July 2001. At October 31, 1996, future minimum rental payments for
noncancelable leases with terms in excess of one year were as follows:
<TABLE>
<S> <C>
1997............................................................. $144,678
1998............................................................. 100,806
1999............................................................. 21,568
2000............................................................. 15,048
2001............................................................. 9,232
</TABLE>
Total rent expense under operating leases was $119,026 and $95,122 for the
years ended October 31, 1995 and 1996, respectively.
Benefit Plan
ReMACS has a 401(k) profit-sharing Plan (the "Plan") available to all
employees of ReMACS who have completed three months of service and have
attained age 21. The Plan includes a salary deferral arrangement pursuant to
which employees may contribute a minimum of 2% and a maximum of 15% of their
salary on a pretax basis. ReMACS may make both matching and additional
contributions at the discretion of the board of directors. During 1995 and
1996, ReMACS made contributions of $5,839 and $24,664, respectively.
Legal Proceedings
ReMACS is subject to legal proceedings and claims that arise in the ordinary
course of business. In the opinion of management, there are no such claims
outstanding that would have a material adverse effect on ReMACS's financial
position or results of operations.
Long Term Contract
In 1995, ReMACS entered into an agreement whereby ReMACS was advanced
approximately $3.0 million during fiscal years 1995 and 1996 in custom
development fees. The Company is using the percentage-of-completion method of
accounting to recognize revenue under this agreement. At October 31, 1996,
ReMACS has deferred approximately $1.7 million based on its estimates of total
costs to complete the contract development.
7. SUBSEQUENT EVENT
On May 23, 1997, Radiant Systems, Inc. ("Radiant") purchased all of the
outstanding common stock of ReMACS for 627,500 shares of Radiant common stock,
$3.25 million in cash and $3.25 million in notes.
F-10
<PAGE>
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The accompanying unaudited pro forma condensed combined balance sheet as of
March 31, 1997, gives effect to the ReMACS acquisition as if it had occurred
on that date. The accompanying unaudited pro forma combined statements of
operations for the years ended December 31, 1996 and the three months ended
March 31, 1997 have been prepared to reflect adjustments to the Company's
historical results of operations to give effect to the acquisitions of
PrsymTech and ReMACS as if it they had occurred at the beginning of the
respective periods. The accompanying pro forma combined balance sheet as of
March 31, 1997 has been prepared as if the ReMACS acquisition had occurred as
of that date. The pro forma adjustments are based upon available information
and certain assumptions that management believes to be reasonable. Final
purchase adjustments may differ from the pro forma adjustments herein.
The accompanying pro forma statements are not necessarily indicative of the
results of operations which would have been attained had the acquisitions been
consummated on the dates indicated or which may be attained in the future.
These pro forma statements should be read in conjunction with the historical
combined financial statements of the Company and related notes thereto, which
are included elsewhere in this Prospectus.
F-11
<PAGE>
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
RADIANT(A) REMACS(B) ADJUSTMENTS COMBINED
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equiva-
lents................. $12,487,487 $ 391,404 $ (3,250,000)(2) $ 9,628,891
Accounts receivable,
net of allowance for
doubtful accounts .... 7,141,465 864,735 -- 8,006,200
Inventories............ 4,767,021 172,099 -- 4,939,120
Other short-term as-
sets.................. 445,311 45,942 -- 491,253
----------- ----------- ------------ ------------
Total current assets... 24,841,284 1,474,180 (3,250,000) 23,065,464
Property and equipment,
net.................... 1,821,225 430,555 -- 2,251,780
Software development
costs, net............. 852,261 358,734 (358,734)(1) 852,261
Intangibles, net........ 957,255 -- -- 957,255
18,547,757 (1) 18,547,757
(15,450,282)(1) (15,450,282)
Deferred income tax as-
sets................... 397,180 -- -- 397,180
Other assets............ 561,306 -- -- 561,306
----------- ----------- ------------ ------------
$29,430,511 $ 2,263,469 $ (511,259) $ 31,182,721
=========== =========== ============ ============
LIABILITIES AND SHARE-
HOLDERS' EQUITY (DEFI-
CIT)
Current liabilities
Accounts payable and
accrued liabilities... $ 6,807,842 $ 840,640 $ 150,000 (2) 7,798,482
Customer deposits and
unearned revenue...... 2,516,295 5,706,064 (180,000)(1) 8,042,359
Current portion of
shareholder loans..... -- -- -- --
Current portion of long
term debt............. 528,231 128,288 -- 656,519
----------- ----------- ------------ ------------
Total current liabili-
ties.................. 9,852,368 6,674,992 150,000 16,497,360
Shareholder loans, less
current portion........ -- -- 3,250,000 (2) 3,250,000
Long term debt, less
current portion........ 231,601 71,641 -- 303,242
----------- ----------- ------------ ------------
Total liabilities...... 10,083,969 6,746,633 3,400,000 20,050,602
----------- ----------- ------------ ------------
Shareholders' equity
(deficit).............. 19,346,542 (4,483,164) -- 14,863,378
(15,450,282)(4) (15,450,282)
4,483,164 (4) 4,483,164
7,235,859 (2) 7,235,859
----------- ----------- ------------ ------------
$29,430,511 $ 2,263,469 $ (511,259) $ 31,182,721
=========== =========== ============ ============
</TABLE>
- --------
(A) Derived from the March 31, 1997 unaudited financial statements of the
Company appearing elsewhere in this Prospectus.
(B) Derived from the April 30, 1997 unaudited financial statements of ReMACS
appearing elsewhere in this Prospectus.
NOTES TO UNAUDITED PRO FORMA COMBINED BALANCE SHEET--REMACS
(1) Reflects adjustments to record the fair market value of the identifiable
intangible assets acquired plus the resulting goodwill related to the
excess purchase price over the fair value of net assets acquired. The
value associated with the purchased research and development costs is
written-off immediately (in thousands).
<TABLE>
<S> <C>
Total consideration and transaction costs........................ $13,886
Fair value of net liabilities assumed............................ 4,303
-------
Excess of purchase price over fair value of net liabilities as-
sumed........................................................... 18,548
Value associated with purchased research and development costs... 15,450
-------
Adjustments to goodwill.......................................... $ 3,098
=======
</TABLE>
Reflects deferred maintenance revenue of $300,000 at its cost (the cost to
service remaining commitment) of $120,000. Remaining amounts in customer
deposits and unearned revenue primarily relate to deposits and other
payments received in advance for products under development.
(2) Reflects (i) issuance of 627,500 shares of Common Stock with an estimated
fair value of approximately $7.2 million as of the acquisition date of May
23, 1997, adjusted to reflect a discount from market value to account for
restrictions common to large holdings of unregistered securities, (ii)
issuance of $3.25 million in notes, (iii) issuance of $3.25 million in
cash, and (iv) transaction related expenses of $150,000.
(3) Reflects the elimination of ReMAC's shareholder deficit of $4.5 million
and the immediate write-off of purchased research and development costs of
$15.4 million.
F-12
<PAGE>
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE FIRST QUARTER ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
RADIANT (A) REMACS (B) ADJUSTMENTS COMBINED
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES:
Systems sales.......... $10,742,270 $ 548,838 -- $11,291,108
Customer support,
maintenance and other
services.............. 1,818,057 468,227 -- 2,286,284
----------- ---------- ----------- -----------
Total revenues......... 12,560,327 1,017,065 -- 13,577,392
COST OF REVENUES:
Systems sales.......... 6,278,136 47,117 -- 6,325,253
Customer support,
maintenance and other
services.............. 1,748,773 324,369 -- 2,073,142
----------- ---------- ----------- -----------
Total cost of
revenues.............. 8,026,909 371,486 -- 8,398,395
GROSS PROFIT............ 4,533,418 645,579 -- 5,178,997
OPERATING EXPENSES:
Product development.... 1,153,155 252,590 -- 1,405,745
Purchased research and -- -- (15,450,282)(10) (15,450,282)
development costs..... 15,450,282 (9) 15,450,282
Sales and marketing.... 871,334 384,409 -- 1,255,743
Depreciation and
amortization.......... 367,211 101,115 110,624 (8) 578,950
General and
administrative........ 1,689,318 312,554 -- 2,001,872
----------- ---------- ----------- -----------
Total operating
expenses.............. 4,081,018 1,050,668 110,624 5,242,310
INCOME (LOSS) FROM
OPERATIONS............. 452,400 (405,089) (110,624) (63,313)
Interest expense, net... 209,165 2,752 69,063 (7) 280,980
----------- ---------- ----------- -----------
INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM AND
PROVISION (BENEFIT) FOR
INCOME TAXES........... 243,236 (407,841) (179,687) (344,293)
Pro forma income tax
benefit................ (211,750) -- 211,750 (11) --
----------- ---------- ----------- -----------
PRO FORMA INCOME (LOSS)
BEFORE EXTRAORDINARY
ITEM................... 454,986 (407,841) (391,437) (344,293)
=========== ========== =========== ===========
PRO FORMA NET INCOME
(LOSS) PER COMMON AND
COMMON EQUIVALENT SHARE
BEFORE EXTRAORDINARY
ITEM................... $ 0.03 $ (0.03)
=========== ===========
WEIGHTED AVERAGE COMMON
AND COMMON EQUIVALENT
SHARES OUTSTANDING..... 13,125,239 13,752,739(12)
=========== ===========
</TABLE>
- --------
(A) Derived from March 31, 1997 unaudited financial statements of the Company
appearing elsewhere in this Prospectus.
(B) Derived from the three months ended April 30, 1997 unaudited financial
statements of ReMACS. For purposes of the above presentation, the results
for the three months ended January 31, 1997 have been omitted. Revenues and
net loss for the three months ended January 31, 1997 were approximately
$971,000 and $535,000, respectively.
F-13
<PAGE>
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
PRYSMTECH REMACS
PRO FORMA PRO FORMA PRO FORMA
RADIANT(A) ADJUSTMENTS REMACS(B) ADJUSTMENTS COMBINED
----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
REVENUES:
Systems sales........... $35,888,342 $ -- $ 3,032,431 $ -- $ 38,920,773
Customer support,
maintenance and other
services............... 5,054,979 -- 2,615,307 -- 7,670,286
----------- ----------- ----------- ------------ ------------
Total revenues......... 40,943,321 -- 5,647,738 -- 46,591,059
COST OF REVENUES:
Systems sales........... 22,270,161 -- 638,264 -- 22,908,425
Customer support,
maintenance and other
services............... 5,464,533 -- 1,407,517 -- 6,872,050
----------- ----------- ----------- ------------ ------------
Total cost of
revenues.............. 27,734,694 -- 2,045,781 -- 29,780,475
GROSS PROFIT............ 13,208,627 -- 3,601,957 -- 16,810,584
OPERATING EXPENSES:
Product development..... 3,327,630 -- 2,057,998 -- 5,385,628
Purchased research and
development costs...... 3,930,000 (3,900,000)(4) -- -- 30,000
(15,450,282)(10) (15,450,282)
15,450,282 (9) 15,450,282
--
Sales and marketing..... 1,487,087 -- 1,196,403 -- 2,683,490
Depreciation and
amortization........... 948,385 173,800 (2) 392,228 442,496 (8) 1,956,909
General and
administrative......... 5,664,246 -- 2,323,180 -- 7,987,426
----------- ----------- ----------- ------------ ------------
Total operating
expenses.............. 15,357,348 (3,726,200) 5,969,809 442,496 18,043,453
----------- ----------- ----------- ------------ ------------
INCOME (LOSS) FROM
OPERATIONS............. (2,148,721) 3,726,200 (2,367,852) (442,496) (1,232,869)
Interest expense, net... 711,848 267,750 (1) (19,127) 276,250 (7) 1,236,721
Minority interest in
earnings of PrysmTech.. 628,137 (628,137)(3) -- -- --
----------- ----------- ----------- ------------ ------------
INCOME (LOSS) BEFORE
PROVISION (BENEFIT) FOR
INCOME TAXES........... (3,488,706) 4,086,587 (2,348,725) (718,746) (2,469,590)
Pro forma income tax
(benefit) provision ... (1,333,142) 1,566,278(5) -- (233,136)(11) --
----------- ----------- ----------- ------------ ------------
PRO FORMA NET INCOME
(LOSS)................. $(2,155,564) $ 2,520,309 $(2,348,725) $ (485,610) $ (2,469,590)
=========== =========== =========== ============ ============
PRO FORMA NET INCOME
(LOSS) PER COMMON AND
COMMON EQUIVALENT
SHARE.................. $ (0.19) $ (0.21)
=========== ============
WEIGHTED AVERAGE COMMON
AND COMMON EQUIVALENT
SHARES OUTSTANDING..... 11,099,532 11,727,032 (6)(12)
=========== ============
</TABLE>
(A) Derived from the December 31, 1996 financial statements of the Company
appearing elsewhere in this Prospectus.
(B) Derived from the October 31, 1996 financial statements of ReMACS appearing
elsewhere in this Prospectus.
F-14
<PAGE>
NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS--PRYSMTECH LLC
(1) Reflects interest expense on the $3.15 million in notes at an annual rate
of 8.5%
(2) Reflects additional amortization of goodwill of $869,000 over 5 years.
(3) Reflects elimination of minority interest in earnings of PrysmTech.
(4) Reflects elimination from the pro forma information of one-time, non-
recurring charges for purchased research and development costs of $3.9
million.
(5) Reflects provision for income taxes for the tax effect of the pro forma
adjustments.
(6) Weighted average common shares outstanding assumes that the 300,000
shares of Common Stock issued occurred January 1, 1996. In addition, the
weighted average common shares outstanding include the dilutive effect of
options to purchase 275,000 shares of Common Stock granted to certain
employees of PrysmTech below the initial public offering price.
NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS--REMACS
(7) Reflects interest expense on the $3.25 million in notes at an annual rate
of 8.5%
(8) Reflects additional amortization of goodwill of $3.1 million over 7
years.
(9) Reflects charge of $15.5 million related to the write-off of purchased
research and development costs. The allocation to purchased research and
development costs represents the estimated fair value related to
incomplete projects, determined by an independent appraisal. The
development of these projects had not yet reached technology feasibility
and the technology has no alternative future use. The technology acquired
in the acquisition will require substantial additional development by the
Company.
(10) Reflects elimination from the pro forma information of one-time, non-
recurring charges for purchased research and development costs of $15.5
million which will be recorded by the Company when the acquisition is
consummated.
(11) Reflects adjustment to provision (benefit) for income taxes, to eliminate
any pro forma income tax benefit related to the combined pro forma loss
due to the uncertainty regarding realization of deferred tax assets
created by the loss.
(12) Weighted average common shares outstanding assumes that the 627,500
shares of Common Stock issued occurred at the beginning of the respective
periods.
F-15
<PAGE>
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.
RADIANT SYSTEMS, INC.
/s/ John H. Heyman
By___________________________________
JOHN H. HEYMAN Executive Vice
President and Chief Financial
Officer
Dated: June 27, 1997
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report included in this Form 8-K/A, into the Company's previously filed
Registration Statement File No. 333-23237 on Form S-8.
/s/ Arthur Andersen LLP
Atlanta, Georgia
June 27, 1997
