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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended April 30, 1997. Commission File Number
0-17623.
DATABASE TECHNOLOGIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 02-0429620
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
172 Route 101, Suite No.D-5, Bedford, New Hampshire, 03110
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (603) 472-8222
Securities registered pursuant to Section 12(b) of the Act:
Name of each Exchange on
Title of each Class which registered
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NONE NONE
Securities registered pursuant to Section 12(g) fo the Act:
Common Stock, $.001 par value
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(Title of Class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes _X___. No ____.
The number of shares of the Common Stock of the Registrant outstanding
on June 30, 1997 was 2,466,082. The aggregate market value of voting
stock of the Registrant held by non-affiliates of the Registrant as of
June 30, 1997 was approximately $250,000.
DOCUMENTS INCORPORATED BY REFERENCE
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See Exhibit Description Index on Page 30.
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PART I
ITEM 1. Business
General
The Registrant was incorporated under the laws of the State of Delaware
on November 4, 1988, under the name of Database Technologies, Inc. to
engage in, among other lawful activities, the business of owning and
operating the database which was transferred to it by Pathfinder Data
Group Inc. ("Pathfinder"), a Colorado corporation which is a public
company and has been a reporting company pursuant to the Securities
Exchange Act of 1934.
On December 8, 1988, Pathfinder transferred to Registrant the database
described as follows:
Data stored in a hard disk with tape back-ups classified as
PATHFIND - DMS. The database provides information assisting
insurance property adjusters in replacing insured's losses by
identifying discontinued products and the current like kind and
quality replacement models and replacement values. The database
includes products such as stereo equipment, television, video
equipment, photographic products, and automotive sound
equipment. Included therein is historical reference material
concerning products up to ten years old consisting of over
20,000 models and types. There are over 70,000 features that
describe the various models referenced in the data. The
database is updated monthly with new models as they are
introduced as well as price changes as they occur.
By its action Pathfinder, in transferring to the Registrant the
database, intended to split and divide its current activities.
Pathfinder will remain in the insurance replacement business, and the
Registrant will license its database to insurance companies.
The Pathfinder Board of Directors authorized management to proceed with
a plan to spin off Registrant by means of a distribution to common
shareholders of Pathfinder of all of the outstanding stock of the
Registrant. At the effective time of the distribution, all of the
outstanding capital stock of the Registrant will be distributed to
holders of Pathfinder common stock on a one for one basis without any
consideration being paid by such holders.
On December 8, 1988, Pathfinder requested the Division of Corporation
Finance of the Securities and Exchange Commission to issue a Non-Action
Letter as to the following:
(i) either (a) concur in our view that the Distribution would not
constitute a "sale" of the DTI Common Stock to be distributed to
holders of Pathfinder common stock under Section 2(3) of the
Securities Act of 1933, as amended (the "Securities Act"), or (b)
confirm that it will recommend that no enforcement action be
taken by the Securities and Exchange Commission (the
"Commission") if the Distribution is effected without
registration of the DTI Common Stock under the Securities Act;
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(ii) concur in our view that the shares of DTI Common Stock to be
received by shareholders of Pathfinder in the Distribution would
not be deemed to be "restricted securities" within the meaning of
Rule 144(a)(3) promulgated under the Securities Act, and that,
for purposes of Rule 144(c)(1) promulgated under the Securities
Act, Pathfinder would be deemed to be a predecessor of DTI so
that sales of DTI Common Stock by affiliates of DTI could be made
pursuant to Rule 144 immediately upon the registration of the DTI
Common Stock under Section 12 of the Securities Exchange Act of
1934, as amended (the "Exchange Act");
(iii) either(a) concur in our view that the sale of shares of DTI
Common Stock by an independent agent to provide cash in lieu of
fractional shares would not require registration of such shares
under the Securities Act or (b) confirm that it will recommend
that no enforcement action be taken by the Commission if such
shares are sold without registration under the Securities Act.
By letter dated January 25, 1989, the Division of Corporation Finance
issued its No-Action Letter which provided among other things that:
"Based on the facts presented and noting that recipients of
Database Technologies, Inc. will receive an information statement
containing substantially the information as would be required by
Regulation 14C under the Securities Exhange Act of 1934, and that
a registration statement on Form 10 relating to the common stock
of Database will be filed before the distribution, this Division
will not recommend enforcement action to the Commission if the
Database common stock is distributed to the Company's
stockholders in the manner described without registration under
the Securities Act of 1933.
"The Database common stock distributed will not be 'restricted
securities' within the meaning of the rule 144(a)(3) under the
1933 Act. Sales by the Company's affiliates would be subject to
rule 144, except for the holding period requirement, absent
registration or another exemption. Because the Company's periodic
reports have not contained information specific to Database,
the Division does not agree that the Company should be deemed the
predecessor of Database.As a result,sales in reliance on rule 144
may not begin before satisfaction of the 90-day period specified
in rule 144(c)(1).
"While not necessarily agreeing with your analysis, this Division
will not recommend enforcement action to the Commission if an
independent agent sells shares of common stock without
registration to provide cash for the elimination of fractional
share interests.
"Because these positions are based on the representations made to
the Division in your letter, it should be noted that different
facts or conditions might require different results. Moreover,
the responses regarding registration under the 1933 Act only
represent the Division's position on enforcement action and do
not express any legal conclusions on the questions presented."
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Pursuant to the No-Action Letter, Form 10 was filed with the Securities
and Exchange Commission on April 17, 1989. After comments were made by
the SEC, Registrant filed its Amendments (Form 8) on May 22, 1989. On
May 26, 1989, Registrant was advised by the SEC that the Registration
Statement was deemed completed as of May 26, 1989. Thereafter,
Registrant's shares were distributed by Pathfinder Data Group Inc. to
its shareholders of record as of June 9, 1989. Stock certificates were
mailed to shareholders on July 7, 1989.
The Registrant is engaged in the business of providing data to
insurance companies for claims handling. Pathfinder provides the
replacement of products as a result of insurance losses. Prior to the
transfer of the database to Registrant, Pathfinder performed both
functions. The product replacement service allows insurance companies
to replace merchandise lost through either fire, natural disaster, or
theft with new products. Through agreements with major manufacturers,
Pathfinder has products shipped directly to the insured in settlement
of claims made.
The data provided by the Registrant allows the claim representative to
evaluate a property loss claimed by an insured by using a computer and
comparing the product the insured has lost with a current replacement
model. It illustrates the year, list price and compares the features
of the products and shows the adjuster the discount from list or the
actual replacement cost of that product to the insurance company. This
saves the claim representative time in handling the file and reduces
the severity of loss to the insurance company.
Data is assembled by the Registrant from manufacturers' price sheets
and catalogs and is indexed by a proprietary system developed by the
Registrant.
The insurance industry has never had a single source of product
information to use in processing a claim. Historically they have made
telephone calls to local retailers, used catalogs, etc., but because
the nature of the products and frequent model changes by manufacturers,
the information has been unreliable. Registrant has researched and
developed a database of product information that extends back eighteen
(18) years and presently has over 100,000 products and 125,000
descriptions of those products. By setting parameters of comparison and
standards of evaluation the Registrant has been able to present a
database that is accurate and cost effective for their insurance
customers. Within seconds, using a computer, the claim adjuster can now
obtain reliable information with which to settle the loss.
The Registrant has several methods of marketing its database product.
If the customer has a mainframe computer, the Registrant will provide a
tape quarterly reflecting model and price changes for products
contained therein. An annual fee is charged for this service. At the
present time,there are no clients using the mainframe service.
Another method is for the Registrant to provide the data on diskettes
to an individual claim office for use in their PC. These diskettes are
sent monthly, and the monthly fee is based on the number of PC's in
which the database resides.
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A third method, which is now under development uses the Internet where
the Registrant developed a web page with the domain name, CLAIMLINK.com
and is accessed by typing the following command into the command line
when connected to the world wide web. This allows insurance carriers,
insurance claim adjusters and others needing access to the database and
programs a way to communicate with the Company using their modem and
internet connection. The Company also has E-mail capability to send or
receive messages through a modem via the internet. It is the opinion of
Management this form of communication and access will prove a valuable
tool in the future. A method for developing a revenue stream for the
Registrant using the internet is under development. This will allow an
insurance claim representative to inquire into the main database for
the product information necessary to settle the claim. The customer
pays an access fee for the information but the long distance telephone
costs are not involved because of the path through the internet. At the
present time the system is not being used because the development has
not been completed to allow implementaion and access to the system.
A final method used by the Registrant is to allow a claim adjuster to
call the Registrant over the Registrants WATS lines and the
Registrant's telephone counselors provide the information verbally
followed up with a print-out and an invoice based on a per quote fee of
$4.00. There are certain customers using this method, but they are
insignificant in number and revenue but a trend to increase usage is
developing for this market. Some of the clients who use this method as
their usage increased have converted to the PC based system because of
economic savings associated with the PC system.
The Registrant during the past year started to license replacement
companies to use the database to improve the efficiency of their own
staff. These replacement companies provide a telephone service to both
their local claim offices and in many instances on a national basis. At
this point the service has been well received by these companies and
the Registrant is receiving inquiries from other companies interested
in subscribing.
The Registrant has instituted a new fee structure linked to volume
site discounts for its insurance clients. Initial reaction to the new
fee structure has been favorable, because it allows the insurance
carrier to reduce costs and increase the number of stations available
for use by adjusters. This could adversely impact revenues and
profits for the Registrant in the short term but longer term it should
increase both revenues and profits by reaching a larger base of clients
an developing greater penetration within existing accounts.
To acquire the data the Registrant attends industry trade shows and
maintains relationships with manufacturers and vendors who provide the
raw data.
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In order to manage the data the Registrant uses product specialists to
compare the data and make the changes as necessary. The Registrant
maintains a large PC microcomputer as the host for the data.Using it to
produce diskettes for assembly and distribution to users to download
to PC's.An information systems manager manages all the data storage and
supervises a data entry clerk. The systems manager also develops new
software and systems to increase the efficiency and speed of the system.
Under development is a program of artificial intelligence to automate
the comparison of data records allowing the product specialists to deal
only with exceptions or unusual changes.
Management maintains data integrity programs for its database. As an
example of data integrity, if a particular product from a manufacturer
is discontinued and for various reasons cannot be replaced with a "like
kind and quality" replacement, then it is deemed "No Direct
Replacement", and in the opinion of the Registrant a fit with an
existing model probably would be unsatisfactory to the insured. As a
consequence thereof, the insurance company should pay cash rather than
try to replace the item.
The company has, over the past year, developed a new vendor network to
facilitate local delivery of replacement products to insureds. The
vendor network has expanded over the past year to include a greater
variety of products and sources. Management feels further development
of the replacement vendor network will enhance the value of the data-
base system to its insurance clients.After many years of being involved
with the product replacement business, Management is of the opinion the
best method of delivery is to allow the insured the ability to pick-up
merchandise locally as opposed to having the product shipped to them
from a distant source. This procedure not only reduces the time the
insured is without the product but it also removes shipping from the
replacement process thereby reducing additional costs and the risk of
loss or damage to the merchandise by the common carrier. If the local
source of the product is unavailable, then the alternative of shipping
the merchandise from the manufacturer or distributor is still possible.
The Company backs up the representations made by the system through the
ability to replace the actual items quoted at the replacement prices
through local replacement sources directly to the insureds, or as an
alternative through the development of a system using manufacturers and
distributors,the product is shipped directly to the insured,the Company
is invoiced by the vendor and in turn invoices the insurance company
for the replacement.
Customers
At the present time there are many small insurance company's using the
system. No single user represents more than 21% of the Registrant's
current revenues.
Allstate Insurance Company, formerly represented 50% of Registrant's
revenues, canceled its contract effective October, 1989.
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Farmers Insurance Group, represented 30% of the Registrant's revenues
in the year ended April 30, 1993 did not renew its contract in the year
ended April 30, 1994 year.
The Registrant provides service in the PC configuration to GEICO,
American Family Insurance Co., Arbella Mutual Insurance and many other
insurance carriers. In addition to the property and casualty insurance
carriers, the Registrant provides data services to several major van
lines to assist them in the settlement of cargo losses.
On December 13, 1993, the Registrant signed a Marketing Agreement with
David A Johnson & Associates to market the Registrant's proprietary
merchandise replacement database on a non- exclusive basis along with
David A. Johnson & Associates , Contents Reporting System.
On February 28, 1994, the Registrant signed a License Agreement with
ADP Property Claims Services, Inc. a wholly owned subsidiary of
Automatic Data Processing, Inc., a New York Stock Exchange listed
company for the Registrant's Qwik-Claim and Qwik-Quote programs on
an exclusive basis and the proprietary merchandise replacement computer
database on a non-exclusive basis. This agreement with ADP terminated
on January 30, 1996. During the period of the agreement the Registrant
was of the opinion that ADP did not put forth the necessary marketing
efforts to make the agreement succeed. The small contracts that ADP did
sign will provide a small although insignificant revenue source for the
next two years.
The Registrant also provides data services to replacement companies and
retail electronic chains who have insurance replacement divisions. The
use of the Registrant's systems and data allows them to save time and
increases the efficiency of personel handling the inquiries from their
insurance clients. A further benefit is in the accuracy of the database
which reduces mistakes while producing a uniform product for presenta-
tion to the carrier. The database has become an industry standard for
those firms engaged in the replacement of consumer electonic products,
appliances and tools.
Among the firms using the database for replacement data and pricing are
Ultimate Electronics, Magnolia Hi-Fi, and Comprehensive Replacement
Centers.
Proposals have been made and discussions are continuing with some large
national consumer electronic retailers for expansion of the program on
a national level.
In addition to the consumer electronics database, the Registrant is
considering expansion into other consumer product lines such as home
furnishings, clothing and housewares. Requests from the Registrant' s
insurance clients have prompted investigation into the viability of new
database products. An initial analysis of the market and focus group
meetings with clients have indicated the new products offerings would
gain wide acceptance. The Registrant is now field testing some new
databases with clients to determine market reaction because the search
techniques employed are different from the search techniques of the
present consumer electronic database products.
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Marketing
At the present time the Registrant markets it's software and database
directly to insurance carriers. It is anticipated with the end of the
agreement with ADP the Registrant will increase its own marketing and
as well as its efforts with David A. Johnson & Associates. Additional
resources will be needed to expand the marketing and sale efforts for
its programs.
One very effective marketing method in the past had been the insurance
industry trade show held each Spring. For the past three years at this
seminar the Registrant has invited the replacement vendors using its
systems and software vendors having complimentary and non-competing
types of products to participate in the exhibition as a type of joint
venture through the placement of their displays directly adjacent to
the Registrant's. This proved to a very effective method to increase
the visibility of the participants but also projected an image of size
and credibility a small display would not accomplish. In the future
it is anticipated this program will be expanded as more vendors and
replacement companies use the systems.
The Registrant is presently evaluating several new programs and methods
for delivery of both the claims handling programs and assorted database
products under development. CD rom, imaging technolgy, windows and OS2
are under evaluation as possible new options. Insofar as any of these
options would require new capital investment by our clients to upgrade
or replace their present systems, the Registrant does not intend to
invest in or actively promote these various options until such time as
the client indicates the need and the committment.
Competition
At the present time, to the Registrant's knowledge, there are three
companies providing this type of service to the insurance industry which
allows an insurance claims adjuster to reference a historical database,
which in turn references a current like kind and quality replacement
model with a replacement cost figure indicated. Another company CUC
International has a system that may be accessed over the Compuserve
network, but it lacks the historical database the Registrant has
developed, recently discontinued its services to the insurance industry.
CCC Corp. was the major competitor of the Company, being larger with
greater financial resources than the Registrant, also discontinued the
contents services to the insurance industry. A new system introduced by
a company called ReClaim of Dallas,Texas is in the process of marketing
a similar product to the insurance industry. Several new entrants into
the contents claim systems segment of the insurance industry appeared
during the past year. ACV in Seattle, Washington , Vedder Software from
Schenctady, NY and Boeckh from Milwaukee,WI, all of whom have contents
claim systems but lack the historical database for product referencing
required by insurance carriers. The VIA Group of Denver, CO is the heir
to the former system used by CCC and with a similar historical database.
The contents area of claim solutions appears appears to be attracting a
great deal of interest at this time.
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Government Regulation
Compliance with federal, state, and local provisions which have been
enacted or adopted to regulate the discharge of materials into the
environment or otherwise relating to the protection of the environment,
has not had in the past, and the Registrant believes, will not have in
the future, a material effect upon the capital expenditures, earnings
or competitive position of the Registrant.
Backlog
The Registrant does not have a backlog, but clients have agreements for
services for varying time periods. Some short term agreements have
been renewed by the insurance carriers.The Registrant feels the results
achieved in using the system have been favorable. In the future
it is probable, these agreements will be extended by the insurance
carriers. By using the system, they have experienced a reduction in
severities and a savings of indemnification dollars. As of this time,
Registrant has monthly revenues of approximately $ 11,000. principally
from contracts with different termination dates.
Employees
The Registrant has two full-time employees. There are two programmers
under contract for database development and the support of its systems
in the field.The Registrant's President, Allan S. Wolfe, also serves as
President of Pathfinder Data Group Inc.
ITEM 2. Properties
The Registrant occupies one (1) suite ,as a tenant of space which is
located at 172 Route 101,Suite No.D-5,Bedford,New Hampshire, occupying
approximately 1150 square feet of office space which it leases from a
trust for $350. per month.The Registrant's President is trustee of the
trust but he has no beneficial interest in the trust.
ITEM 3. Legal Proceedings
The Registrant is not involved in any material legal proceeding.
ITEM 4. Submission of Matters to a Vote of Security Holders
Inapplicable.
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PART II
ITEM 5. Market for the Registrant's Common Stock and Related
Securities Holder Matters
(a) The Registrant's Common Stock is traded on the OTC Bulletin Board.
The Common Stock began trading at the beginning of June, 1989. The
prices below represents dealer quotations, do not represent actual
transactions, and do not include retail mark-ups or mark-downs or
commissions. The prices were determined from information obtained from
the National Quotation Bureau Incorporated.
Month Low Bid High Bid
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June, 1989 $.25 $.25
July 31, 1989 .18 .25
October 31, 1989 .06 .18
January 31, 1990 .02 .12
April 30, 1990 .02 .12
July 31,1990 .02 .12
October 31, 1990 .025 .09
January 31, 1991 .025 .09
April 30,1991 .025 .09
July 31, 1991 .025 .09
October 31, 1991 .03 .075
January 31, 1992 .03 .075
April 30, 1992 .03 .075
July 31, 1992 .04 .075
October 31, 1992 .10 .18
January 31, 1993 .12 .18
April 30, 1993 .12 .18
July 31, 1993 .15 .25
October 31, 1993 1/4 3/8
January 31, 1994 1/2 3/4
April 30, 1994 5/8 7/8
July 31, 1994 5/32 1/2
October 31, 1994 1/8 5/16
January 31, 1995 1/8 3/8
April 30, 1995 1/8 3/8
July 31, 1995 1/8 3/8
October 31, 1995 3/32 3/16
January 31, 1996 1/16 3/16
April 30, 1996 3/16 3/8
July 31, 1996 1/8 1/4
October 31, 1996 1/32 1/8
January 31, 1997 1/16 1/4
April 30, 1997 1/16 1/4
June 30, 1997 1/16 1/4
The approximate number of holders of record of the Common Stock of
the Registrant as of June 30, 1997 was 800.
No cash dividends have ever been declared by the Registrant. While the
payment of cash dividends rests within the discretion of the Board of
Directors, the Registrant proposes to retain earnings, if any, in the
foreseeable future for use in the development of its business. It is
not anticipated that cash dividends will be paid in the foreseeable
future. The payment of dividends is contingent upon future earnings,
if any, the Registrant's financial condition and capital requirements,
general business conditions and other factors.
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ITEM 7. Management's Discussion and Final Analysis of Financial
Condition and Result of Operations
REVENUES
The Registrant's revenues for the fiscal year ended April 30, 1997
were $ 98,312 when compared to the prior year ended April 30, 1996
of $188,620 shows a decrease of $90,308 from that prior period.
During the 1997 fiscal year,the loss of a major client two years prior
was still having an impact on the Registrant's revenues. The loss of
revenue has not been offset by the addition of any substantial new
client. There also was a loss of some smaller clients during the year.
The Registrant is trying to increase the marketing and sales efforts in
an attempt to revitalize sales however with the limited resources that
are available to the Registrant it is a difficult task.
The operating loss for the year ended April 30, 1997 was $50,243 which
was $10,080 dollars higher than the operating loss for the same period
ended April 30, 1996. This operating loss was the largest loss from
operations in four years. Unless revenues can be returned to a higher
level the operating losses are likely to continue. The Registrant has
been unable during the last year to sign another major client to offset
this loss of revenue. The client base of the Registrant has eroded
over the past year.
The Registrant signed a licensing and marketing agreement with ADP
Property Claim Services,Inc. during the last quarter of fiscal 1994.
This agreement, it was anticipated, would have given the Registrant's
systems greater exposure in the market than the Registrant could have
achieved by its own marketing efforts. This agreement was terminated on
January 30,1996.During the period it was in effect it failed to produce
the substantial revenues that were expected at the time of signing.
OPERATIONAL EXPENSES
The Registrant's expenses of $115,166 for the fiscal year ended April
30, 1997 were about $17,300 lower than the expenses of $132,464 for
the prior fiscal year ended April 30, 1996. This reduction can be seen
in the Selling expense, lower by $2,025 and General & Administrative
expense which was lower by $15,273. The Registrant anticipates selling
expenses will increase as it begins a new marketing and sales program
in an effort to increase revenues. G & A expenses should remain at the
current level or may decrease slightly.
When expenses are viewed as a percentage of gross revenues in fiscal
year April 30, 1997, because of the decrease in revenues the operating
expenses were 1.17 times the gross revenues generated and resulted in
an operating loss for the period.For the prior year ended April 30,1996
the operating expenses were 70% of the gross revenues therefore the
higher gross revenues reduced the amount of the loss from operations.
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Management does not anticipate any great changes in expenses during the
current fiscal year and expects the total expenses to remain closer to
the last prior fiscal period's expenses rather than the expenses of the
fiscal period ended April 30, 1996.
Interest expense increased by almost $4,000 in the fiscal year ended
April 30, 1997 due to an increase in loans made to the Registrant by
it's principal shareholder/officer during the year. However the rate of
interest on all the outstanding loans has been renegotiated to a much
lower level which should result in a lower interest expense to the
loan outstanding ratio in the next fiscal period.
INCOME TAXES
The Registrant anticipates it will not pay income taxes the next fiscal
year because of a tax loss carryforward. If during the next fiscal year
the Registrant finds profits are being generated to reduce the tax loss
carryforward it will begin making appropriate tax payments for any tax
liabilities it may incur.
LIQUIDITY and CAPITAL RESOURCES
The Registrant anticipates that it will generate sufficient working
capital from a combination of current operations cash flow and debt in
the form of Notes Payable from the principal stockholder/officer to
manage the daily operations of the business. This has been the way cash
flow has been managed over the past two years by the Registrant and the
principal stockholder/officer.
Registrant will not have the ability to pay down some of the debt load
over the next year because the Registrant anticipates cash flow from
the operations will be insufficient to finance operations without the
loans from the principal stockholder/officer. In the past when funds
were required for the operations they were advanced by the principal
stockholder/officer of the Registrant and it is anticipated,if the need
arises again over the next fiscal year funds may be advanced by the
principal stockholder /officer to the company. The Registrant's past
financial condition have prevented Management from using banks as a
source of funds to finance operations.
This is the fourth successive year of negative cash flow the Registrant
has experienced with the fiscal year ended April 30, 1997. Therefore,
the Registrant will defer any debt reduction until cash flow proves
it is sufficient to permit debt retirement without having an adverse
effect on daily operations.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL STATEMENTS
The Registrant made a change in accountants for the audit
period ended April 30, 1997 in an effort to control costs. On
February 28, 1997 the Registrant engaged the accounting firm of
Berry, Dunn, McNeil & Parker of 900 Elm Street, Manchester, NH
03103, as its independent auditor, filing an 8-K with the SEC
with the appropriate letter from its former accounting firm of
Skolnick & Skolnick. The added costs of having an out of town
accounting firm conduct its audit added an unnecessary financial
burden on the Registrant.
There were no disagreements with any of the Registrant's
accountants on any matter of accounting principals or practices,
financial statement disclosure, or auditing scope of procedure,
in connection with the audits of said fiscal year or any such
engagement, which disagreements if not resolved to then
satisfaction of such accountants would have caused such
accountants to make reference in connection with their report
to the subject matter of the disagreement.
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INDEPENDENT AUDITORS' REPORT
The Board of Directors
Database Technologies, Inc.
We have audited the accompanying balance sheet of Database Technologies, Inc.
as of April 30, 1997, and the related statements of operations, changes in
stockholders' deficit,and cash flows for the year then ended. These financial
statements are the responsibility of the Company. Our responsibility is to
express an opinion on these financial statements based on our audit. The
financial statements of Database Technologies, Inc. for the year ended April
30, 1996 were audited by other auditors whose report, dated July 30, 1996,
expressed a qualified opinion on those statements.
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 statements. 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 Database Technologies, Inc.
as of April 30, 1997, and the results of its operations, and its cash flows
for the year then ended, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has suffered recurring
losses from operations and its total liabilities exceed its total assets.
These factors, as discussed in Note 1 to the financial statements, raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 1.
The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
/s/ Berry, Dunn, McNeil & Parker
Manchester, New Hampshire
July 15, 1997
14
</PAGE>
<PAGE>
Report Of Independent Public Accountants
To the Board Of Directors and
Shareholders of Database Technologies,Inc.:
We have audited the accompanying balance sheet of Database Technologies,
Inc. as of April 30, 1996, 1995 and 1994 along with the related statements
of income, retained deficit and cash flows for 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 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.
As discussed in Note 3 to the financial statements, the Company has
reflected the issuance 2,281,192 shares of common stock on July 7, 1989 as
having occurred as of April 30, 1989. In our opinion, the retroactive
treatment of the common issuance is not in accordance with generally
accepted accounting principles.
In our opinion, except for the effects of the common stock issuance
ddiscussed in the above paragraph, the financial statements referred to
above present fairly, in all material respects, the financial position of
Database Technologies,Inc. as of April 30, 1996, 1995 and 1994 along with
the results of its operations and their cash flows for the years then
ended in conformity with generally accepted accounting principles.
/s/ Skolnick & Skolnick
Manchester, New Hampshire
July 30, 1996
</PAGE>
15
<PAGE>
<TABLE>
<CAPTION>
DATABASE TECHNOLOGIES,INC.
Balance Sheets
April 30, 1997 and 1996
ASSETS
1997 1996
----- -----
<S> <C> <C>
Current assets
Cash $ 3,805 $ 8,099
Receivables 9,161 3,749
Other current assets - 422
________ ________
Total current assets 12,966 12,270
________ ________
Equipment,furniture, and fixtures 14,027 14,027
Less accumulated depreciation 14,027 13,938
________ _______
Net equipment,furniture, and fixtures - 89
________ _______
Other assets
Security deposits - 150
Loans and exchanges - 150
________ _______
Total other assets - 300
________ _______
$ 12,966 $ 12,659
========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
16
</PAGE>
<PAGE>
<TABLE>
<CAPTION>
DATABASE TECHNOLOGIES,INC.
Balance Sheets
April 30, 1997 and 1996
LIABILITIES AND STOCKHOLDER'S DEFICIT
1997 1996
----- -----
<S> <C> <C>
Current liabilities
Notes payable-stockholder $ 184,322 $ 127,530
Deferred licensing fee income 8,388 8,388
Accounts payable-trade 7,635 4,243
Customer deposits - 1,663
Line of credit 6,080 -
Accrued payroll 840 688
__________ __________
Total current liabilities 207,265 142,512
__________ __________
Stockholder's deficit
Common stock-$.001 par value,
authorized 2,500,000 shares,
2,466,082 shares outstanding
in 1997 and 1996 (after deducting 25,000 2,466 2,466
shares in treasury in 1997 and 1996)
Additional paid-in-capital 12,179 12,179
Accumulated deficit (208,944) (144,498)
_________ _________
Total stockholders' deficit (194,299) (129,853)
_________ _________
$ 12,966 $ 12,659
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
17
</PAGE>
<PAGE>
<TABLE>
<CAPTION>
DATABASE TECHNOLOGIES,INC.
Statement of Operations Statement of Operations
Years Ended April 30, 1997 and 1996
1997 1996
---- ----
<S> <C> <C>
Revenue
Licensing fee income $ 60,155 $ 188,620
Merchandise sales 38,157 -
________ _________
98,312 188,620
Cost of merchandise sales 33,389 96,319
_________ _________
Gross revenue 64,923 92,301
_________ _________
Operating expenses
Selling expenses 9,475 11,500
General and administrative 105,691 120,964
_______ _______
115,166 132,464
________ ________
Loss from operations (50,243) (40,163)
Nonoperating expense
Interest expense (14,203) (10,829)
_________ ________
Net loss $ (64,446) $ (50,992)
_________ ________
Loss per common share $ (0.03) $ (0.02)
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
18
</PAGE>
<PAGE>
<TABLE>
<CAPTION>
DATABASE TECHNOLOGIES,INC.
Statement of Changes in Stockholders' Deficit
Years Ended April 30, 1997 and 1996
Additional
Common Paid-in Accumulated
Stock Capital Deficit Total
------- ---------- ----------- -------
<S> <C> <C> <C> <C>
Balance, April 30,1995 $2,381 $ 12,154 $ (77,691) $ (63,156)
Increase in retained earnings - - (7,317) (7,317)
Net loss - - (50,992) (50,992)
_______ ________ _________ ________
Balance,April 30,1996 as
previously reported 2,381 12,154 (136,000) (121,465)
Common stock issued
in a prior year 110 - (110) -
Prior period adjustment (25) 25 (8,388) (8,388)
______ _______ __________ ________
Balance, April 30,1996,
as restated 2,466 12,179 (144,498) (129,853)
Net loss - - (64,446) (64,446)
______ ______ __________ _________
Balance,April 30,1997 $ 2,466 $ 12,179 $ (208,944) $(194,299)
======= ======== ========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
19
</PAGE>
<PAGE>
<TABLE>
<CAPTION>
DATABASE TECHNOLOGIES,INC.
Statement of Cash Flows
Years Ended April 30, 1997 and 1996
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities
Net loss $ (64,446) $ (50,992)
Adjustments to reconcile net loss to
net cash used by operating activities
Depreciation and amortization 89 2,374
(Increase)decrease in
Receivables (5,412) 7,747
Other current assets 725 (414)
Increase(decrease) in
Accounts payable-trade 3,392 (8,392)
Customer deposits (1,663) 1,663
Accrued expenses 150 224
__________ _________
Net cash used by operating activities (67,165) (47,790)
__________ _________
Cash flows from investing activities
Equipment,furniture,and fixtures - (1,924)
__________ __________
Cash flows from financing activities
Increase in retained earnings - (7,317)
Notes payable-stockholder 56,792 59,784
Line of credit advance 6,079 -
___________ ___________
Net cash provided by financing activites 62,871 52,467
___________ ___________
Net increase(decrease)in cash and
cash equivalents (4,294) 2,753
Cash,beginning of year 8,099 5,346
___________ ___________
Cash,end of year $ 3,805 $ 8,099
=========== ============
Supplemental Disclosures of Cash Flow Information
Cash paid for interest $ - $ 10,829
========== =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
20
</PAGE>
<PAGE>
DATABASE TECHNOLOGIES,INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 1997 and 1996
BACKGROUND
__________
Database Technologies, Inc. (the Company) was incorporated under the laws of
the State of Delaware on November 4,1988.The company operates a computerized
database containing current prices of certain electronic merchandise from
various vendors. The Company provides this information to assist insurance
company adjusters in processing claims. The Company's sources of revenue are
licensing fees obtained from various insurance companies for the use of its
database and sale of merchandise to its customers for the purposes of
settling claims with their policyholders.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
___________________________________________
REVENUE AND EXPENSE RECOGNITION
__________________________________
The financial statements are prepared on the accrual basis of accounting;
revenue is recognized when earned and expenses are recognized when goods and
services are received. Licensing fee income for the use of its database may
be on an annual, monthly,or per use basis.Revenue is recognized when earned.
Customer payments received but not earned are reflected as deferred licensing
fee income, a current liability.
USE OF ESTIMATES
________________
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
__________________________
For purposes of reporting the statements of cash flows, the Company considers
all cash accounts, which are not subject to withdrawal restrictions or
penalties, and all highly liquid investments with a maturity of three months
or less to be cash equivalents.
EQUIPMENT
_________
Property and equipment purchased is depreciated by the straight-line method
over the estimated useful lives of the respective assets. Equipment acquired
under capital leases is amortized by the straight-line method over the
estimated useful lives of the respective assets.
21
</PAGE>
<PAGE.
DATABASE TECHNOLOGIES,INC.
Notes to Financial Statements
April 30, 1997 and 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Concluded)
______________________________________________________
INCOME TAXES
____________
Deferred income taxes are provided for the expected tax effects of differences
between the financial statement and tax basis of assets and liabilities.
The Company has a deferred tax asset which is attributable primarily to net
operating loss carryforwards. Since it is more probable than not that the
deferred tax asset will not be realized, a valuation allowance for the entire
amount has been recorded as of April 30, 1997 and 1996.
No provision for income taxes was required due to the current year loss. The
following are net operating losses available and their expiration dates.
Year Carryforward
Amount Expires
_______ _________
$13,161 2008
36,149 2009
48,293 2010
62,010 2011
PENSION AND PROFIT SHARING PLANS
________________________________
The Company established a profit sharing plan which covers all employees of
the Company. No contributions were made in fiscal years ended 1997 or 1996.
COMPANY'S FUTURE PLANS
_____________________
The Company's future operations are effected by its current financial position.
Specifically, its low level of cash, total assets and its negative capital.
The Company anticipates operating cash flow will be insufficient to finance
operations. It anticipates cash to be provided from its principal stockholder/
officer,in the form of loans to enable the Company to meet operating cash flow
requirements. The Company intends to explore possible asset sales and/or a
merger transaction.
22
</PAGE>
<PAGE>
DATABASE TECHNOLOGIES,INC.
Note to Financial Statements
April 30, 1997 and 1996
2. Notes Payable - Stockholder
____________________________
Notes payable - stockholder totaled $184,322 and $127,530 as of April 30, 1997
and 1996, respectively. These notes bear interest at 5.85% and 12% for the
years ended April 30, 1997 and 1996, respectively. All notes payable to
stockholder are due April 30, 1998.
3.OPERATING LEASES
__________________
Facilities
__________
The Company leases its facilities from a trust controlled by the majority
stockholder. The lease agreement requires monthly payments of approximately
$350 plus insurance, maintenance,and operating expenses. The initial term of
the lease expires December 1997. Rent expense for the year ended April 30,
1997 amounted to $5,400.
Vehicles and Equipment
______________________
The Company currently leases a vehicle and a computer from the majority
stockholder. The monthly lease payments are $450 and $175, respectively.
Vehicle and equipment lease expenses for the year ended April 30, 1997 are
$5,400 and $1750, respectively, and expire in May 1999 and June 1998,
respectively.
Future minimum lease payments under a noncancelable operating leases as of
April 30, 1997 are:
1998 $5,350
1999 350
4. MAJOR CUSTOMER
________________
The Company had one major cutomer who accounted for 21% of the total revenue
during the year ended April 30, 1997. No major customer accounted for more
than 10% of the total revenue during the year ended April 30, 1996.
5. LICENSING AND MARKETING AGREEMENTS
____________________________________
On February 28, 1994,the Company entered into a licensing agreement with ADP
Property Claims Services, Inc. (ADP). This agreement was to continue in
effect until December 31, 1998. However on October 30, 1995, ADP terminated
the contract with the Company. Under this agreement, ADP was to market the
Company's database products combined with its own products.The companies are
attempting to reach a new agreement.
On December 13, 1993, the Company entered into a marketing agreement with
David A. Johnson & Associates. This agreement will continue in effect until
December 12, 1998 and may be extended for an additional five years. Under
this agreement, David A. Johnson & Associates will market the Company's
database products combined with its own products.
23
</PAGE>
<PAGE>
DATABASE TECHNOLOGIES,INC.
Note to Financial Statements
April 30, 1997 and 1996
6. INCOME (LOSS) PER SHARE
_______________________
The loss per common share for the years ended April 30, 1997 and 1996 has
been computed based on the weighted average number of shares outstanding of
2,466,082.
7. PRIOR PERIOD ADJUSTMENTS
_________________________
The statement of changes in stockholders' deficit contains a 110,000 share
adjustment to common stock. This transaction arose as a result of
litigation settlement in a prior year. The common stock adjustment was not
recorded in that prior year and is reflected in the reconciliation of
stockholders' deficit for the year ended April 30, 1996 and subsequent.
The April 30, 1996 accumulated deficit was restated for a correction of an
error in the prior year's revenue recognition, which caused the Company to
recognize deferred licensing fee income as income instead of a liability.
Additionally, 25,000 shares of treasury stock was acquired in a prior year
at no cost to the Company. Accordingly, common stock, additional paid-in
capital, and accumulated deficit are restated as follows:
Additional
Common Paid-In Accumulated
Stock Capital Deficit
--------- --------- -----------
April 30, 1996,as previously reported $ 2,381 $12,154 $ (136,000)
Correction of error 110 - (8,498)
Treasury stock (25) 25 -
-------- -------- -----------
April 30, 1996, as restated $2,466 $12,179 $ (144,498)
======= ======== ==========
8. LINE OF CREDIT
_______________
The Company has a revolving line of credit in the form of a corporate credit
card with an interest rate of 15.4%. The line of credit was established to
cover the operating expenses of the business. The Company remits minimum
principal and interest payments directly to the credit card company on a
monthly basis. Amounts above the minimum are remitted as cash flow allows.
9. DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
_______________________________________________________
The Company's financial instruments consist of cash, short-term trade
receivables and payables, and short term debt. The carrying value of all
instruments approximates their fair market value.
24
</PAGE>
<PAGE>
PART III
ITEM 10. Directors and Executive Officers
Name Age Position
---- --- --------
Allan S. Wolfe (1) 65 Chairman of the Board,
President and Treasurer
Betty Wolfe 60 Secretary and a Director
Robert A. Boyd 62 Director
Directors are elected to serve one-year terms and until successors are
duly elected and qualified. Officers serve at the discretion of the
Board of Directors. A description of the directors follows:
(1) Mr. Wolfe is the only director and officer who will be actively
engaged on a daily basis in the Registrant's business.
ALLAN S. WOLFE, 65, is the President, Treasurer, Chairman of the Board
of Directors, and majority shareholder of the Registrant and of
Pathfinder Data Group Inc. He was elected a Director of Camelot Corp.
in May 1993 a public corporation headquartered in Dallas, Texas. He has
been Chief Executive Officer of Pathfinder from October, 1984 to present
and President, Treasurer, and Chairman of the Board of the Registrant
since May, 1986; from 1980 to 1984 he was Vice President of Audio of New
England,Inc.,a corporation engaged in the same business as Pathfinder,
as well as the retailing of hi-fi equipment to the public.
BETTY WOLFE, 60, was formerly employed by Pathfinder Database, Inc. and
Pathfinder Data Group Inc. She is the wife of Allan S. Wolfe, President
of the Registrant. Her capacity with Pathfinder Database, Inc. and
Pathfinder Data Group Inc. was that of secretary and bookkeeper. Her
functions were administrative.
ROBERT A. BOYD, 62, is Product Manager of Interealty Corporation. Prior
this position he was Vice President of Product Planning for Realtron
Corporation. Prior to this position he was President of the Reeves Group
Inc., a wholly owned subsidiary of Realtron Corporation which was
engaged in new business development. Prior to that position Executive
Vice President of Realtron Corporation, computer online and publishing
services vendor to the real estate industry. Immediately prior to his
employment with Realtron Corporation, he was a partner of The Roberts
Company, computer systems consultants to Real Estate Boards, Multiple
Listings Services and Multiple Listings Services vendor.
To the fullest extent permitted by Delaware law, the directors of the
Registrant will not be liable to the Registrant or its stockholders for
monetary damages for breaches of their fiduciary duties as directors.
25
</PAGE>
<PAGE>
ITEM 11. Executive Compensation
The following table sets forth information concerning remuneration that
will be paid by the Registrant during the fiscal year ending April 30,
1997. No executive officer of the Registrant will receive in excess of
$60,000 annually.
Name of Individual Capacities in Cash
or number in group which served compensation
------------------ ------------- ------------
Allan S. Wolfe President and Treasurer Not to exceed
$60,000 annually.
ITEM 12. Security Ownership of Certain Beneficial
Owners and Management
Security Ownership of Certain Beneficial Owners
-----------------------------------------------
The following table sets forth information, after distribution, with
respect to each person known to the management of the Registrant who
will be the beneficial owner of more than five percent of the Common
Stock of the Registrant. To the knowledge of the Registrant, each such
stockholder will have sole voting power and sole investment power over
the securities.
Name and Address Amount and Nature Percent
of Beneficial Owner of Beneficial Ownership Of Class
------------------- ----------------------- --------
Allan S. Wolfe 1,313,658 (1) 57.15%
38 Mulberry Lane
Bedford, NH 03110
---------------------------
(1) Includes 1,000 shares in the name of Betty Wolfe, a director of
Registrant and wife of Allan S. Wolfe.
26
</PAGE>
<PAGE>
Security Ownership of Management
--------------------------------
The following table sets forth, after distribution, the number of
shares of Common Stock, $.001 par value per share, of the Registrant
beneficially owned by each director and all directors and officers of
the Registrant as a group. Except as otherwise noted, the named
individual will have sole voting power and sole investment power over
the securities.
Name of Amount and Nature Percent
Beneficial Owner Beneficial Ownership of Class
---------------- -------------------- --------
Allan S. Wolfe 1,312,658 57.15% (2)
Betty Wolfe 1,000 (1)
Robert A. Boyd 19,030 0.83%
All directors and officers 1,332,688 57.98%
as a group (3 persons)
----------------------------
(1) Betty Wolfe, wife of Allan S. Wolfe, owns in her name 1,000
shares of Registrant which formerly was included in the
amount held by Allan S. Wolfe.
(2) The combined percentage interest of Allan S. Wolfe and Betty
Wolfe.
ITEM 13. Certain Relationships and Related Transactions
As previously noted, Registrant obtained from Pathfinder, its principal
asset, the Database. Prior to the proposed distribution, Pathfinder
sold from its treasury 165,000 shares to:(a) Robert and Joanne Olender,
100,000 shares; (b) Sheldon Maschler, 50,000 shares; and (c) Samuel J.
Landau, 15,000 shares. As a result of said sales Pathfinder received
$30,500. All of the individual recipients of shares will have
distributed to them shares of the Registrant at such time as the
distribution becomes effective.
Robert Olender and the Registrant were, at the time of the transfer,
coordinating their efforts to develop a more effective way to handle
insurance replacement. Samuel J. Landau is counsel to both Pathfinder
and the Registrant.
Robert Olender and Joanne Olender received an additional 100,000 shares
as compensation for marketing efforts on behalf of the Company.
27
</PAGE>
<PAGE>
PART IV
Item 14.
Exhibits. Financial Statements Schedules and Reports
on Form 10-KSB.
(a) The financial statements and schedules filed with this
report are as follows:
Database Technologies, Inc.
1. Financial Statements Page
-------------------- ----
Report of Independent Certified
Public Accountant 14-15
Balance Sheet of April 30, 1997 16-17
Statement of Income 18
Statement of Stockholder's Equity 19
Statement of Cash Flows 20
Notes to Financial Statements 21-24
All other schedules have been omitted because they are inapplicable or
the required information is included elsewhere in the Financial
Statements or the notes thereto.
(b) Reports on Form 8-K
--------------------
Form 8-K filed by the Registrant on February 28,1997 reporting Item 9.
Form 8-K/A filed by the Registrant on March 25,1997 reporting Item 9.
(c) Exhibits
--------
Reference is made to the Exhibit Index which begins on page 30 of this
report.
28
</PAGE>
<PAGE>
Signatures
----------
Pursuant to the requirements of Section 13 or 15(d) 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.
DATABASE TECHNOLOGIES INC.
By: s/Allan S. Wolfe
_____________________
Allan S. Wolfe, President
and Treasurer
Date: December 8, 1997
Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed below by the following
persons on behalf of the Registrant and in the capacities and
on the date indicated:
(i) Principal Executive Officer and Principal Financial Officer:
-----------------------------------------------------------
s/Allan S. Wolfe December 8, 1997
---------------------------- -----------------
Allan S. Wolfe - Chairman of the Board, (Date)
President, Chief Executive
Officer and Chief Financial Officer
(ii) A Majority of the Directors
---------------------------
s/Allan S. Wolfe December 8, 1997
---------------------------- -----------------
Allan S. Wolfe (Date)
s/Betty L. Wolfe December 8, 1997
---------------------------- -----------------
Betty Wolfe (Date)
---------------------------- -----------------
Robert A. Boyd (Date)
29
</PAGE>
<PAGE>
INDEX TO EXHIBITS TO
ANNUAL REPORT ON FORM 10-KSB OF
DATABASE TECHNOLOGIES INC.
for the Fiscal Year Ended April 30, 1997
EXHIBIT PAGE
NUMBER EXHIBIT DESCRIPTION NUMBER
------- ------------------- ------
1 Certificate if Incorporation *
of the Registrant
2 Amended Certificate of Incorporation *
of the Registrant
3 By-Laws of the Registrant *
4 Agreement and Assignment between *
Registrant and Pathfinder Data
Group Inc.
5 No-Action Letter from SEC *
6 Agreement between Pathfinder * *
Database inc. and Allstate Insurance
Company dated August 5, 1985
7 Letter from Allstate Insurance * *
Company to Pathfinder Database, Inc.
dated April 24, 1989, canceling
Agreement dated August 5, 1985
8 Memoranda of Understanding between * *
Database Technologies Inc. and
Farmers Insurance Group dated
April 3, 1989, March 29, 1989,
March 29, 1989, February 8, 1989
and July 29, 1988
9 Agreement between Pathfinder * *
Database, Inc. and Aetna Casualty &
Life dated November 29, 1988
10 Agreement between Pathfinder * *
Database, Inc. and Western Mutual
Insurance Company dated October 17,
1988
11 Licensing Agreement between Database
Technologies, Inc. and ADP Property * * *
Claims Services,Inc. dated February 28,
1994.
12 Change in independent auditor dated
February 28, 1997 * * *
------------------------------------------------------------------
* Filed with the Registrant's Registration Statement Form 10
on April 17, 1989, File No. 0-17623, and incorporated
herewith by reference.
* * Filed with the Registrant's Registration Statement Form 8
Amendment No. 1 to Form 10 on May 19, 1989, File No.
0-17623, and incorporated herewith by reference.
* * * Filed with the Registrant's Form 8-K , File No. 0-17623 and
incorporated herewith by reference.
30
</PAGE>
