<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-----------
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): September 13, 1999
<TABLE>
<S> <C> <C>
SPATIAL TECHNOLOGY INC.
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-288-42 84-1035353
(State of Incorporation) (Commission File Number) (IRS Employer Identification No)
2425 55TH STREET, SUITE 100
BOULDER, COLORADO 80301
(303) 544-2900
(Address of Principal Executive Offices
and telephone number, including area code)
</TABLE>
<PAGE> 2
SPATIAL TECHNOLOGY INC.
AMENDMENT NO. 1
The undersigned hereby amends the following items, financial
statements, exhibits or other portions of its Current Report on Form 8-K filed
with the Commission, event date July 14, 1999 (the "Current Report"), as set
forth herein relating to the acquisition of Sven Technologies, Inc. ("Sven") by
Spatial Technology Inc. ("Spatial" or the "Company").
The Current Report is hereby amended by deleting Item 7 thereof and
replacing it in its entirety with the following:
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
(1) Audited financial statements of Sven Technologies, Inc. as of
December 31, 1997 and 1998 and for the years then ended and
the independent auditors' report of Hood & Strong LLP.
(2) Unaudited interim financial statements of Sven Technologies,
Inc. as of June 29, 1999 and for the six months ended June 30,
1998 and June 29, 1999.
2
<PAGE> 3
SVEN TECHNOLOGIES, INC.
================================================================================
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS' REPORT
DECEMBER 31, 1997 AND 1998
3
<PAGE> 4
INDEPENDENT AUDITORS' REPORT
MR. ISAAC K. KATO
SVEN TECHNOLOGIES, INC.
Palo Alto, California
We have audited the accompanying balance sheet of SVEN TECHNOLOGIES, INC. as of
December 31, 1997 and 1998, and the related statements of operations,
stockholders' equity (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 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 statements 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 Sven Technologies, Inc. as of
December 31, 1997 and 1998 and the results of its operations and its cash flows
for the years then ended, in conformity with generally accepted accounting
principles.
HOOD & STRONG LLP
Menlo Park, California
August 20, 1999
4
<PAGE> 5
<TABLE>
<CAPTION>
SVEN TECHNOLOGIES, INC.
BALANCE SHEETS
December 31, 1997 1998
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ - $ 18,526
Accounts receivable 4,408 10,878
Prepaid expenses 2,280 3,640
Inventory 1,500 2,915
- -------------------------------------------------------------------------------------------------------------------------
Total current assets 8,188 35,959
- -------------------------------------------------------------------------------------------------------------------------
FIXED ASSETS, net of accumulated depreciation 56,579 24,728
DEPOSIT 4,790 4,790
OTHER ASSETS, net of accumulated amortization 16,481 15,131
- -------------------------------------------------------------------------------------------------------------------------
$ 86,038 $ 80,608
========================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Cash overdraft $ 1,349 $ -
Accounts payable 34,833 43,587
Accrued wages 54,618 56,992
Accrued interest 8,459 29,228
- -------------------------------------------------------------------------------------------------------------------------
Total current liabilities 99,259 129,807
- -------------------------------------------------------------------------------------------------------------------------
LONG-TERM LIABILITIES
Notes payable to stockholders 300,482 409,990
- -------------------------------------------------------------------------------------------------------------------------
Total liabilities 399,741 539,797
- -------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, 10,000,000 shares authorized;
2,222,222 shares issued and outstanding 22,222 22,222
Preferred stock, 5,000,000 shares authorized;
166,890 and 501,102 shares issued and outstanding
in 1997 and 1998, respectively 300,400 617,900
Retained earnings (deficit) (636,325) (1,099,311)
- -------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity (deficit) (313,703) (459,189)
- -------------------------------------------------------------------------------------------------------------------------
$ 86,038 $ 80,608
========================================================================================================================
</TABLE>
The accompanying notes are an integral part of this statement.
5
<PAGE> 6
<TABLE>
<CAPTION>
SVEN TECHNOLOGIES, INC.
STATEMENT OF OPERATIONS
Years Ended December 31, 1997 1998
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
REVENUE $ 28,623 $ 147,009
- ------------------------------------------------------------------------------------------------------------------------
COST OF GOODS SOLD
Manuals and packaging 15,246 24,235
Other costs 1,192 2,019
- ------------------------------------------------------------------------------------------------------------------------
16,438 26,254
- ------------------------------------------------------------------------------------------------------------------------
Gross profit 12,185 120,755
- ------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
Office salary 145,395 135,524
Marketing and promotion 37,316 71,523
Officers' salary 83,764 68,050
Rent 37,772 62,940
Advertising 23,234 56,372
Depreciation expenses 27,822 31,851
Printing and reproduction 4,899 25,202
Legal and professional fees 51,445 24,126
Payroll taxes 20,457 16,114
Postage and delivery 2,097 12,600
Travel 10,482 10,608
Telephone 14,022 8,879
Outside service 1,534 8,660
Supplies 3,007 6,368
Equipment rental 678 3,744
Dues and subscriptions 2,912 3,113
Employee benefits 56 2,770
Meals 614 2,536
Educational seminar 861 2,500
Computer supplies 2,601 2,264
Bad debt - 1,464
Amortization 1,350 1,350
Office expenses 587 1,218
Insurance 562 905
Bank charges 1,009 670
Workers compensation insurance 1,119 515
- ------------------------------------------------------------------------------------------------------------------------
475,595 561,866
- ------------------------------------------------------------------------------------------------------------------------
Loss from operations (463,410) (441,111)
- ------------------------------------------------------------------------------------------------------------------------
OTHER INCOME (EXPENSE):
Interest income 969 -
Interest expense (8,459) (20,769)
Other, net 1,494 (306)
- ------------------------------------------------------------------------------------------------------------------------
(5,996) (21,075)
- ------------------------------------------------------------------------------------------------------------------------
Loss from operations before provision for income taxes (469,406) (462,186)
PROVISION FOR INCOME TAXES 800 800
- ------------------------------------------------------------------------------------------------------------------------
NET LOSS $ (470,206) $ (462,986)
========================================================================================================================
</TABLE>
The accompanying notes are an integral part of this statement.
6
<PAGE> 7
SVEN TECHNOLOGIES, INC.
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
================================================================================
Years Ended December 31, 1997 and 1998
- -----------------------------------------
<TABLE>
<CAPTION>
Retained
Common Stock Preferred Stock Earnings (Deficit) Total
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance, December 31, 1996 $ 22,222 $ 175,200 $ (166,119) $ 31,303
Issuance of stock 125,200 125,200
Net (loss) (470,206) (470,206)
- ----------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997 $ 22,222 $ 300,400 $ (636,325) $ (313,703)
Issuance of stock 317,500 317,500
Net (loss) (462,986) (462,986)
- ----------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998 $ 22,222 $ 617,900 $ (1,099,311) $ (459,189)
==================================================================================================================================
</TABLE>
The accompanying notes are an integral part of this statement.
7
<PAGE> 8
<TABLE>
<CAPTION>
SVEN TECHNOLOGIES, INC.
STATEMENT OF CASH FLOWS
Year Ended December 31, 1997 1998
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES:
Cash received from customers $ 24,215 $ 140,539
Cash paid to suppliers (17,938) (27,669)
Cash paid for operating expenses (412,034) (519,203)
Income taxes paid - (800)
Interest income received 969 -
- ---------------------------------------------------------------------------------------------------------------------
Net cash used for operating activities (404,788) (407,133)
- ---------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Purchase of fixed assets (24,851) -
- ---------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (24,851) -
- ---------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Loans from stockholders 219,562 109,508
Issuance of preferred stock 125,200 317,500
Cash overdraft 1,349 (1,349)
- ---------------------------------------------------------------------------------------------------------------------
Net cash provided from financing activities 346,111 425,659
- ---------------------------------------------------------------------------------------------------------------------
NET (DECREASE) INCREASE IN CASH (83,528) 18,526
CASH - Beginning of year 83,528 0
- ---------------------------------------------------------------------------------------------------------------------
CASH - End of year $ - $ 18,526
=====================================================================================================================
RECONCILIATION OF NET LOSS TO NET CASH
USED FOR OPERATING ACTIVITIES:
NET LOSS $ (470,206) $ (462,986)
- ---------------------------------------------------------------------------------------------------------------------
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH USED
FOR OPERATING ACTIVITIES:
Depreciation and amortization 29,172 33,201
Increase in accounts receivable (4,408) (6,470)
Increase in prepaid expenses (2,280) (1,360)
Increase in inventory (1,500) (1,415)
Decrease in deposits 723 -
Increase in other assets (5,948) -
Increase in accounts payable 18,963 8,754
Increase in accrued wages 22,237 2,374
Increase in accrued interest 8,459 20,769
- ---------------------------------------------------------------------------------------------------------------------
Total adjustments 65,418 55,853
- ---------------------------------------------------------------------------------------------------------------------
Net cash used for operating activities $ (404,788) $ (407,133)
=====================================================================================================================
</TABLE>
The accompanying notes are an integral part of this statement.
8
<PAGE> 9
SVEN TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================
NOTE 1 - NATURE OF BUSINESS Sven Technologies, Inc. (the
Company) develops and markets 3D
computer graphics software
applications, SurfaceSuite Pro,
an application that enables
mapping and warping of multiple
photorealistic textures onto
complex 3D objects, and
AvatarMaker 3D, a 3D avatar
creation application. The Company
is specifically targeting the
high end of the market, licensing
to the large game companies and
the 3D chip manufacturers.
NOTE 2 - Summary of Significant a. Estimates
Accounting Policies
The preparation of financial
statements in accordance with
generally accepted accounting
principals requires management to
make estimates and assumptions
that affect the reported amounts
of assets and liabilities, and
revenues and expenses, as well as,
contingent assets and liabilities
during the reporting period.
Actual results could differ from
those estimates.
b. Revenue Recognition
The Company recognizes revenue
from software sales upon shipment.
c. Inventory
Inventory is stated at the lower
of cost or market, with cost being
determined on the first-in,
first-out method.
d. Fixed Assets
Fixed assets are stated at cost,
net of accumulated depreciation.
Depreciation is calculated using
the straight-line method over the
estimated useful lives ranging
from five to seven years.
e. Other Assets
Patents are amortized on the
straight-line method over 15
years. Organization costs are
amortized on the straight-line
method over 5 years.
9
<PAGE> 10
SVEN TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
NOTE 2 - Summary of Significant f. Bad Debts
Accounting Policies Receivables are written-off using
(Continued) the direct write-off method.
g. Income Taxes
The Company has loss carryforwards
of approximately $870,000 through
December 31, 1998 that may be
offset against future taxable
income.
h. Advertising
The Company expenses advertising
costs as they are incurred.
NOTE 3 - FIXED ASSETS Fixed assets consisted of the
following at December 31:
<TABLE>
<CAPTION>
1998 1997
--------------------------------------------------------------
<S> <C> <C>
Computer equipment
and software $ 89,502 $ 89,502
Furniture and equipment 6,050 6,050
--------------------------------------------------------------
95,552 95,552
Less accumulated depreciation 70,824 38,973
--------------------------------------------------------------
$ 24,728 $ 56,579
==============================================================
</TABLE>
NOTE 4 - OTHER ASSETS Other assets consisted of the
following at December 31:
<TABLE>
<CAPTION>
1998 1997
--------------------------------------------------------------
<S> <C> <C>
Patents, net of accumulated
amortization of $2,246 for
1998 and $1,123 for 1997 $ 14,600 $ 15,723
Organization costs, net of
accumulated amortization
of $605 for 1998 and $378
for 1997 531 758
--------------------------------------------------------------
$ 15,131 $ 16,481
==============================================================
</TABLE>
10
<PAGE> 11
SVEN TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
NOTE 5 - RELATED PARTY The Company has notes payable to
stockholders for money borrowed
at various dates throughout 1997
and 1998. Principal and interest
at 10% per annum are payable on
or before various dates in 2000
and 2001. The aggregate principal
balance of the notes as of
December 31, 1998 was $409,990,
of which $269,558 is payable in
2000 and $140,432 is payable in
2001. The aggregate principal
balance of the notes of December
31, 1997 was $300,482. Accrued
interest payable on the notes as
of December 31, 1998 and 1997,
respectively was $29,228 and
$8,459.
The Company also accrued wages of
$54,618 in 1997 for officers who
are also stockholders of the
Company. These wages are still
outstanding and included in
accrued wages at December 31,
1998.
NOTE 6 - STOCKHOLDERS' Sven Technologies, Inc. has
EQUITY authorized the issuance of 5
million shares of preferred
stock. At December 31, 1998 and
1997, the Company had 166,890
outstanding shares of Series A
Convertible Preferred Stock
("Series A"). At December 31,
1998, the Company also has
334,212 outstanding shares of
Series B Convertible Preferred
Stock ("Series B"). The stocks
have stated at liquidation
preference values of $300,400 and
$317,500, respectively. Each
share of Preferred Stock will be
convertible into one share of
Common Stock. Holders of the
Preferred Stocks have the same
voting rights as Common Stock
holders on an as-converted basis.
Dividends on the Series A are
payable in cash at the rate of
$0.108 per share and holders of
Series B are entitled to
noncumulative dividends equal of
6% of the purchase price if
declared by the Company's Board
of Directors.
NOTE 7 - LEASE COMMITMENT The Company has a lease for
office space expiring in October
1999. Future minimum lease
payments are approximately
$45,000 for 1999.
11
<PAGE> 12
SVEN TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
NOTE 8 - SUBSEQUENT EVENTS The Company borrowed $200,000
from a stockholder in January
1999. The note payable to the
stockholder calls for principal
and interest at 10% per annum to
be paid on or before January 20,
2002.
On June 29, 1999, certain assets
and liabilities of the Company
were purchased in exchange for
cash and stock of the purchasing
corporation. The Company's intent
is to eventually liquidate its
remaining assets and liabilities
and cease operations.
12
<PAGE> 13
SVEN TECHNOLOGIES, INC.
CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Financial Statements:
Balance Sheet, as of June 29, 1999.............................................................. 14
Statements of Operations, six months ended June 30, 1998 and June 29, 1999...................... 15
Statements of Cash Flows, six months ended June 30, 1998 and June 29, 1999...................... 16
Notes to Financial Statements................................................................... 17
</TABLE>
13
<PAGE> 14
SVEN TECHNOLOGIES, INC.
CONDENSED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
June 29,
1999
------------
<S> <C>
ASSETS
Current Assets:
Cash and cash equivalents ................................................. $ 36,093
Accounts receivable, net .................................................. 14,359
Prepaid expenses and other ................................................ 10,230
------------
Total current assets .................................................. 60,682
Equipment, net ................................................................. 21,569
Other assets ................................................................... 20,643
------------
$ 102,894
============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable .......................................................... $ 13,703
Accrued expenses .......................................................... 81,863
------------
Total current liabilities ............................................. 95,566
------------
Notes payable to stockholders .................................................. 627,759
------------
Stockholders' Deficit:
Common stock, 10,000,000 shares authorized; 2,222,222 shares
issued and outstanding ................................................ 22,222
Preferred stock, 5,000,000 shares authorized; 501,102 shares
issued and outstanding ................................................ 617,900
Accumulated deficit ....................................................... (1,260,553)
------------
Total stockholders' deficit ........................................... (620,431)
------------
$ 102,894
============
</TABLE>
See accompanying notes to condensed financial statements.
14
<PAGE> 15
SVEN TECHNOLOGIES, INC.
CONDENSED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
-------------------------------
June 30, 1998 June 29, 1999
------------- -------------
<S> <C> <C>
Revenue ..................................... $ 41,275 $ 113,923
Cost of goods sold .......................... 12,449 7,798
----------- -----------
Gross profit ................................ 28,826 106,125
----------- -----------
Operating expenses:
Sales and marketing .................... 42,561 53,136
Research and development ............... 120,759 158,341
General and administrative ............. 24,482 55,070
----------- -----------
Total operating expenses ........... 187,802 266,547
----------- -----------
Loss from operations ............... (158,976) (160,422)
Other income ................................ 1,669 --
----------- -----------
Loss before income taxes ........... (157,307) (160,422)
----------- -----------
Income tax expense .......................... -- 820
----------- -----------
Net Loss ........................... $ (157,307) $ (161,242)
Accumulated deficit:
Beginning of period ................ (616,935) (1,099,311)
----------- -----------
End of period ...................... $ (774,242) $(1,260,553)
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
15
<PAGE> 16
SVEN TECHNOLOGIES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
-------------------------------
June 30, June 29,
1998 1999
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss................................................................ $ (157,307) $ (161,242)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization......................................... 13,926 13,077
Changes in operating assets and liabilities:
Accounts receivable................................................. (6,530) (3,481)
Prepaid expenses and other.......................................... (15,319) (4,397)
Accounts payable.................................................... (16,791) (29,884)
Accrued expenses.................................................... 9,751 (4,357)
----------- -----------
Net cash used by operating activities............................. (172,270) (190,284)
----------- -----------
Cash flows from investing activities:
Additions to equipment.................................................. (3,486) (9,918)
----------- -----------
Cash flows from financing activities:
Proceeds from notes payable to stockholders............................. 99,502 217,769
Proceeds from issuance of preferred stock............................... 280,000 --
----------- -----------
Net cash provided by financing activities......................... 379,502 217,769
----------- -----------
Net increase in cash and cash equivalents......................... 203,746 17,567
Cash and cash equivalents at beginning of period........................... -- 18,526
----------- -----------
Cash and cash equivalents at end of period................................. $ 203,746 $ 36,093
=========== ===========
Supplemental disclosures:
Cash paid for income taxes.............................................. $ -- $ 820
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
16
<PAGE> 17
SVEN TECHNOLOGIES INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
A. FINANCIAL STATEMENT PRESENTATION
The accompanying unaudited condensed financial statements of Sven
Technologies, Inc ("Sven") have been prepared by Sven pursuant to the
rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in the
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such
rules and regulations. Sven believes the disclosures included in the
condensed financial statements, when read in conjunction with Sven's
financial statements as of December 31, 1997 and 1998 and for the years
then ended and notes thereto included elsewhere in the Current Report
on Form 8-K of Spatial Technology Inc. dated September 13, 1999 are
adequate to make the information presented not misleading.
The accompanying unaudited financial information as of June 29, 1999
and for the six month periods ended June 30, 1998 and June 29, 1999 has
been prepared in accordance with generally accepted accounting
principles for interim financial information. All significant
adjustments, consisting of only normal and recurring adjustments, which
in the opinion of management, are necessary for a fair presentation of
the results for the six months ended June 30, 1998 and June 29, 1999
have been included. Operating results for the six month period ended
June 29, 1999 are not necessarily indicative of the results that may be
expected for the full year.
B. NOTES PAYABLE TO STOCKHOLDERS
During 1998 and 1999 Sven issued notes payable to certain stockholders
which bear interest at 10% per annum and are due on various dates
through 2001.
17
<PAGE> 18
(b) Pro forma financial information
(1) Pro forma condensed combined statements of operations for
Spatial and Sven for the year ended December 31, 1998, and the
six months ended June 29, 1999 as if the acquisition had
occurred on January 1, 1998.
SPATIAL TECHNOLOGY INC.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Effective June 29, 1999 the Company acquired substantially all of the
net assets of Sven for consideration of $1.0 million, including $500,000 cash
and 96,931 shares of common stock. . In addition, the Company issued an
additional 96,930 shares of common stock (the "Earnout Shares") and a warrant to
purchase 250,000 shares of common stock at an exercise price of $12.50 per share
(the "Warrant"). Pursuant to the purchase agreement, the Earnout Shares and
Warrant are being held in escrow, and will be released to Sven only upon
attainment of certain performance objectives. The acquisition was accounted for
using the purchase method of accounting. The following unaudited pro forma
condensed combined financial statements are presented for illustrative purposes
only and do not purport to be indicative of the results of operations for future
periods or the results that actually would have been realized had the Company
and Sven been combined during the periods presented.
The unaudited pro forma condensed combined financial statements,
including the notes thereto, are qualified in their entirety by reference to,
and should be read in conjunction with the historical consolidated financial
statements and the notes thereto of the Company which were previously reported
in the Company's Report on Form 10-KSB for the year ended December 31, 1998 and
the Quarterly Reports on Form 10-QSB for the quarters ended March 31, 1999 and
June 30, 1999, and the financial statements and the notes thereto of Sven as of
December 31, 1997 and 1998 and for the years then ended, and as of June 29, 1999
and for the six months ended June 30, 1998 and June 29, 1999 (unaudited),
included elsewhere in this Current Report on Form 8-K.
The Unaudited Pro Forma Condensed Combined Statements of Operations of
the Company for the six months ended June 30, 1999 and the year ended December
31, 1998, assume that the acquisition of Sven was completed on January 1, 1998.
A pro forma condensed combined balance sheet has not been provided as the
acquisition of Sven by the Company is reflected in the Company's condensed
consolidated balance sheet as of June 30, 1999 included in the Company's Report
on Form 10-QSB for the quarter ended June 30, 1999.
The Company believes that the accompanying unaudited pro forma
condensed combined financial information contains all adjustments necessary to
fairly present the results of operations of the Company for the six months ended
June 30, 1999 and the year ended December 31, 1998, as if the acquisition of
Sven was completed on January 1, 1998.
18
<PAGE> 19
SPATIAL TECHNOLOGY INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1999
(Amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
SPATIAL SVEN ADJUSTMENTS SPATIAL
------- ------- ----------- ---------
<S> <C> <C> <C> <C>
Revenue:
License fees $ 2,956 $ 114 $ -- $ 3,070
Royalties 2,359 -- -- 2,359
Services 2,339 -- -- 2,339
------- ------- ------- -------
Total revenue 7,654 114 -- 7,768
------- ------- ------- -------
Cost of sales
License fees 283 8 36 (a) 327
Royalties 9 -- -- 9
Services 243 -- -- 243
------- ------- ------- -------
Total cost of sales 535 8 36 579
------- ------- ------- -------
Gross profit 7,119 106 (36) 7,189
------- ------- ------- -------
Operating expenses
Sales and marketing 2,675 53 -- 2,728
Research and development 3,430 158 -- 3,588
General and administrative 966 55 -- 1,021
Acquired in-process research and development 500 -- -- 500
------- ------- ------- -------
Total operating expenses 7,571 266 -- 7,837
------- ------- ------- -------
Loss from operations (452) (160) (36) (648)
Other income 82 -- -- 82
------- ------- ------- -------
Loss before income taxes (370) (160) (36) (566)
Income taxes 175 1 -- 176
------- ------- ------- -------
Net loss $ (545) $ (161) $ (36) $ (742)
======= ======= ======= =======
Loss per common share:
Basic ($0.06) ($0.08)
Diluted ($0.06) ($0.08)
Weighted average number of shares outstanding:
Basic 9,284 97 (c) 9,381
Diluted 9,284 97 (c) 9,381
</TABLE>
19
<PAGE> 20
SPATIAL TECHNOLOGY INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
(Amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
SPATIAL SVEN ADJUSTMENTS SPATIAL
-------- -------- ----------- ---------
<S> <C> <C> <C> <C>
Revenue:
License fees $ 6,253 $ 147 $ -- $ 6,400
Royalties 3,922 -- -- 3,922
Services 4,175 -- -- 4,175
-------- -------- -------- --------
Total revenue 14,350 147 -- 14,497
-------- -------- -------- --------
Cost of sales
License fees 461 64 72 (a) 597
Royalties 39 -- -- 39
Services 264 -- -- 264
-------- -------- -------- --------
Total cost of sales 764 64 72 900
-------- -------- -------- --------
Gross profit 13,586 83 (72) 13,597
-------- -------- -------- --------
Operating expenses
Sales and marketing 5,213 105 -- 5,318
Research and development 5,678 309 -- 5,987
General and administrative 2,416 110 -- 2,526
Acquired in-process research and development -- -- 500 (b) 500
-------- -------- -------- --------
Total operating expenses 13,307 524 500 14,331
-------- -------- -------- --------
Earnings (loss) from operations 279 (441) (572) (734)
Other income (expense) 238 (21) -- 217
-------- -------- -------- --------
Earnings (loss) before income taxes 517 (462) (572) (517)
Income taxes 316 1 -- 317
-------- -------- -------- --------
Net earnings (loss) $ 201 $ (463) $ (572) $ (834)
======== ======== ======== ========
Earnings (loss) per common share:
Basic $0.02 ($0.09)
Diluted $0.02 ($0.09)
Weighted average number of shares outstanding:
Basic 9,199 97 (c) 9,296
Diluted 9,307 97 (c) 9,404
</TABLE>
20
<PAGE> 21
SPATIAL TECHNOLOGY INC
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998 AND SIX MONTHS ENDED JUNE 30, 1999
(a) Adjustment to reflect the additional amortization of intangible assets from
the Sven acquisition. The acquisition of certain assets and liabilities of
Sven resulted in approximately $508,000 of intangible assets, which are
being amortized over their estimated useful lives of seven years.
(b) Adjustment to reflect a $500,000 charge for acquired in-process research
and development expense pursuant to the acquisition of Sven.
(c) Adjustment to reflect shares of common stock issued in connection with the
acquisition of Sven.
21
<PAGE> 22
(c) Exhibits
Exhibit Description
Number of Document
------- -----------
23.1 Consent of Hood & Strong LLP
22
<PAGE> 23
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.
SPATIAL TECHNOLOGY INC.
Date: September 13, 1999 /s/ TODD S. LONDA
-----------------------------------
Todd S. Londa
Vice President, Administration and
Corporate Controller
23
<PAGE> 24
EXHIBIT INDEX
Exhibit Description
Number of Document
------- -----------
23.1 Consent of Hood & Strong LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Spatial Technology Inc.:
We consent to the use of our report dated August 20, 1999 with respect to the
financial statements of Sven Technologies, Inc. included in this Current Report
on Form 8-K.
HOOD & STRONG LLP
/s/ HOOD & STRONG LLP
Menlo Park, California
September 13, 1999
