<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Amendment No. 2)
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended:
March 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NO. 0-23049
SVI HOLDINGS, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Nevada 84-1131608
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
12707 High Bluff Drive, Suite 335
San Diego, CA 92130
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(Address of principal executive Zip Code
offices)
Registrant's telephone number including area code (858) 481-4404
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Securities registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock, $0.0001 par value American Stock Exchange
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Securities registered under Section 12(g) of the Act:
Indicate by check mark whether the registrant (1) 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
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.____
The aggregate market value of the voting stock (Common Stock) held by
non-affiliates* as of June 12, 2000 was approximately $88.3 million, based on
the closing sale price on the American Stock Exchange on that date.
The number of shares outstanding of the registrant's Common Stock was 33,855,884
on June 30, 2000.
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* Excludes the Common Stock beneficially held by executive officers, directors
and stockholders whose beneficial ownership exceeds 10% of the Common Stock
outstanding at June 30, 2000.
<PAGE>
PART II
ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Our common stock is listed on the American Stock Exchange under the
symbol "SVI" and has traded on that exchange since July 8, 1998. The following
table indicates the high and low sales prices for our shares for each quarterly
period for each of our two most recent fiscal years.
YEAR ENDED MARCH 31, 2000 HIGH LOW
First Quarter $14.750 $11.500
Second Quarter $13.188 $12.813
Third Quarter $14.875 $ 7.250
Fourth Quarter $14.375 $ 9.000
YEAR ENDED MARCH 31, 1999 HIGH LOW
First Quarter $ 5.063* $ 3.906*
Second Quarter $ 8.500 $ 4.688*
Third Quarter $ 7.875 $ 6.000
Fourth Quarter $15.375 $ 7.375
* High and low bid information as reported on the OTC Bulletin Board.
We have never declared any dividends. We currently intend to retain any
future earnings to discharge indebtedness and finance the growth and development
of the business. We therefore we do not anticipate paying any cash dividends in
the foreseeable future. Any future determination to pay cash dividends will be
at the discretion of the board of directors and will be dependent upon the
future financial condition, results of operations, capital requirements, general
business conditions and other factors that the board of directors may deem
relevant.
As of June 30, 2000, there were 33,855,884 shares of our common stock
outstanding, which were held by approximately 110 stockholders of record.
During the quarter ended March 31, 2000, we issued the following
securities without registration under the Securities Act of 1933:
o an aggregate of 115,000 shares of common stock to
non-employees upon exercise of outstanding options for an
aggregate exercise price of $211,500;
o 56,718 shares of common stock to Softline Limited, our
majority stockholder, upon exercise of outstanding options for
an aggregate exercise price of $113,436;
o 46,774 shares of common stock to Softline, valued at $213,406,
as reimbursement for a portion of the purchase price for
Triple-S Computers pursuant to our agreement with Softline as
of May 27, 1998;
o 93,023 shares of common stock to the former stockholder of
MarketPlace Systems Corporation, valued at an aggregate of
$1,000,000, as partial consideration for the acquisition of
the assets of that company; and
o an aggregate of 344,948 shares of common stock sold to Amro
International, S.A., for gross proceeds of $3,000,000. 7,500
of such shares were issued to the purchaser in lieu of a
commission.
The foregoing securities were offered and sold without registration
under the Securities Act to sophisticated investors who had access to all
information which would have been in a registration statement, in reliance upon
the exemption provided by Section 4(2) under the Securities Act and Regulation D
thereunder, and an appropriate legend was placed on the shares.
ITEM 6. SELECTED FINANCIAL DATA
The following selected financial data should be read in conjunction
with our consolidated financial statements and related notes and with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations". The selected consolidated financial data presented below under the
captions "Statement of Operations Data" and "Balance Sheet Data" for, and as of
the end of, each of our last six fiscal years (including the six months ended
March 31, 1998) are derived from the consolidated financial statements of SVI
Holdings, Inc. The consolidated financial statements as of March 31, 2000, March
31, 1999, March 31, 1998 and September 30, 1997 and the independent auditors'
reports thereon, are included elsewhere in this report.
1
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<TABLE>
<CAPTION>
Six Months
Ended
Year Ended March 31, March 31, Year Ended September 30,
----------------------- ----------- ----------------------------------
2000 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ----
(IN THOUSANDS EXCEPT FOR PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales $ 36,114 $ 17,487 $ 11,198 $ 10,434 $ 673 $ 580
Cost of sales 10,970 5,347 3,869 3,037 100 100
----------- ----------- ----------- ----------- ----------- ----------
Gross profit 25,144 12,140 7,329 7,397 573 480
----------- ----------- ----------- ----------- ----------- ----------
Expenses:
Product development 4,877 - - - - -
Depreciation and amortization 7,942 2,395 939 1,178 54 53
Selling, general and administrative 18,235 7,603 4,611 4,706 1,035 718
----------- ----------- ----------- ----------- ----------- ----------
Total expenses 31,054 9,998 5,550 5,884 1,089 771
----------- ----------- ----------- ----------- ----------- ----------
Income (loss) from operations (5,910) 2,142 1,779 1,513 (516) (291)
Other income (expense) (556) 1,227 359 464 647 (170)
Gain on disposals of Softline Limited
shares - - 4,388 3,974 - -
----------- ----------- ----------- ----------- ----------- ----------
Income (loss) before provision for
income taxes (6,466) 3,369 6,526 5,951 131 (461)
Provision (benefit) for income taxes (2,412) 1,671 1,849 1,103 - -
----------- ----------- ----------- ----------- ----------- ----------
Income (loss) from continuing
operations (4,054) 1,698 4,677 4,848 131 (461)
Income (loss) from discontinued operations - 3,887 1,142 - 16 (271)
----------- ----------- ----------- ----------- ----------- ----------
Net income (loss) $ (4,054) $ 5,585 $ 5,819 $ 4,848 $ 147 $ (732)
=========== =========== =========== =========== =========== ===========
Basic earnings (loss) per share:
Income (loss) from continuing
operations $ (0.12) $ 0.06 $ 0.17 $ 0.35 $ 0.01 $ (0.04)
Income (loss) from discontinued
operations - 0.14 0.04 - - (0.03)
----------- ----------- ----------- ----------- ----------- ----------
Net income (loss) $ (0.12) $ 0.20 $ 0.21 $ 0.35 $ 0.01 $ (0.07)
=========== =========== =========== =========== =========== ===========
Diluted earnings (loss) per share:
Income (loss) from continuing
operations $ (0.12) $ 0.05 $ 0.15 $ 0.31 $ 0.01 $ (0.04)
Income from discontinued operations - 0.12 0.04 - - (0.03)
----------- ----------- ---------- ----------- ----------- ----------
Net income (loss) $ (0.12) $ 0.17 $ 0.19 $ 0.31 $ 0.01 $ (0.07)
=========== =========== ========== =========== =========== ===========
Weighted average common shares:
Basic 32,459 28,600 27,768 13,971 11,902 10,320
Diluted 32,459 33,071 31,046 15,618 13,470 10,320
BALANCE SHEET DATA:
Working capital $ 1,019 $ 26,138 $ 9,763 $ 596 $ (1,844) $ (3,159)
Total assets $ 94,083 $ 52,374 $ 46,481 $ 19,230 $ 5,006 $ 2,266
Long-term obligations $ 21,586 $ 2,043 $ 771 $ 545 $ 1,947 $ -
Stockholders' equity (deficit) $ 53,497 $ 45,270 $ 37,075 $ 10,885 $ 347 $ (1,757)
</TABLE>
2
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD-LOOKING STATEMENTS
THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS. THESE STATEMENTS
RELATE TO FUTURE EVENTS OR OUR FUTURE FINANCIAL PERFORMANCE. IN SOME CASES, YOU
CAN IDENTIFY FORWARD-LOOKING STATEMENTS BY TERMINOLOGY SUCH AS THE WORDS MAY,
WILL, SHOULD, EXPECT, PLAN, ANTICIPATE, BELIEVE, ESTIMATE, PREDICT, POTENTIAL OR
CONTINUE, OR THE NEGATIVES OF SUCH WORDS OR OTHER COMPARABLE TERMINOLOGY. THESE
STATEMENTS ARE ONLY PREDICTIONS. ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY.
IMPORTANT FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE
FORWARD-LOOKING STATEMENTS ARE DESCRIBED IN THE SECTION ENTITLED "RISK FACTORS"
IN ITEM 1 IN THIS REPORT, AND OTHER RISKS IDENTIFIED FROM TIME TO TIME IN OUR
FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, PRESS RELEASES AND OTHER
COMMUNICATIONS.
ALTHOUGH WE BELIEVE THAT THE EXPECTATIONS REFLECTED IN THE
FORWARD-LOOKING STATEMENTS ARE REASONABLE, WE CANNOT GUARANTEE FUTURE RESULTS,
LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS. WE ARE UNDER NO OBLIGATION TO
UPDATE ANY OF THE FORWARD-LOOKING STATEMENTS AFTER THE FILING OF THIS REPORT TO
CONFORM SUCH STATEMENTS TO ACTUAL RESULTS OR TO CHANGES IN OUR EXPECTATIONS.
OVERVIEW
We are a leading provider of end-to-end solutions for enterprise
retailers and retail chains. Our products link retail management information,
including merchandising, planning and financial analysis, with point-of-sale
information, automating the full operations of a retailer and providing
centralized access to information throughout a chain of retail stores. We also
provide consulting, project management, application training, technical support
and other services to our retail industry customers. Our training products
division develops and distributes computer courseware and computer skills
testing products.
Our recent growth has primarily been through acquisitions. The largest
and most important of these acquisitions have been:
o Applied Retail Solutions, Inc. (ARS) in July 1998 for
aggregate consideration of $7.9 million in cash and stock paid
to the former stockholders; and
o Island Pacific Systems Corporation in April 1999 for $35
million cash.
ARS is a leading provider of store software systems that now form the
core of our SVI-POST solutions. Island Pacific is a leading provider of retail
management systems that now form the core of our SVI-HOST solutions.
We accounted for both the ARS and Island Pacific acquisitions using
purchase accounting, which has resulted in the addition of significant goodwill
and capitalized software assets on our balance sheet. We are amortizing
capitalized software and goodwill from both of these acquisitions over ten
years, which has and will continue to impact reported net income and earnings
per share.
Subsequent to fiscal year end, we consolidated ARS and Island Pacific
into SVI Retail, Inc. During the fiscal year we began promoting the full suite
of retail software solutions created by the combination of the ARS and Island
Pacific products with some of our other retail software products under the brand
name "The Total Point of Business". We have commenced an active campaign to
cross-sell solutions to those retailers who utilize less than our full suite of
products. During fiscal 2000, we also commenced an active product development
program to more fully integrate of our SVI-POST and SVI-HOST products, to
develop versions of our products in other programming languages, to eliminate
dependency on client/server architecture, and to develop new components and
applications of our end-to-end solution. We plan to continue our product
development program through fiscal 2001 and beyond, subject to the availability
of operating or outside capital.
3
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We currently derive the majority of our revenues from the sale of
software licenses and the provision of related consulting and support services.
Software license fees are for the most part dependent upon the number of
locations in which the customer plans to install and utilize the software. As
the customer adds additional locations, we charge additional license fees. We
typically charge for support, maintenance and software updates on an annual
basis pursuant to renewable service contracts. We typically charge for
consulting, implementation and project management services on an hourly basis.
Our sales cycles typically run four to twelve months, which causes our revenues
to fluctuate significantly from period to period.
We typically recognize software license revenues as products are
shipped. If the sale involves significant production, modification or
customization, we recognize the license revenues ratably based on percentage of
completion. We generally recognize revenues for service contracts over the life
of the contract, and for consulting, implementation and project management
services as the services are provided.
We sold our IBIS Systems Limited subsidiary effective January 1, 1999
to Kielduff Investments Limited, a company affiliated with IBIS's management
team. The consideration was $2.25 million cash, SVI common stock valued at $2.1
million and a promissory note representing a net obligation to us of $13.6
million. IBIS (which subsequent to disposition was acquired by a subsidiary of
Integrity Software, Inc.) provided financial and business software applications
for the building, leasing and general financial industries, primarily in the
United Kingdom. We originally acquired IBIS in October 1997 as part of an
integrated transaction through which Softline Limited became our majority
stockholder. The operations of IBIS are shown in our financial statements as
discontinued operations for the fiscal year ended March 31, 1999 and the
transitional fiscal year ended March 31, 1998.
Our operations are conducted principally in the United States, the
United Kingdom and Australia. Prior to our sale of Triple-S in October 1999, we
had operations in South Africa.
We offer similar products in each geographical region and we evaluate
local operations primarily based on total revenues and operating income. We also
manage long-lived assets by geographic region. The geographic distribution of
our revenues and long-lived assets for the fiscal years ended March 31, 2000,
March 31, 1999, March 31, 1998 (six months) and September 30, 1997 is as follows
(in thousands):
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2000 MARCH 31, 1999 MARCH 31, 1998 SEPT. 30, 1997
-------------- -------------- -------------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net Sales:
United States $22,819 $ 5,010 $ 414 $ 801
Australia 8,372 10,706 10,784 9,633
South Africa 1,091 1,770 - -
United Kingdom 3,832 - - -
United Kingdom (discontinued
operations) - 12,403 5,156 -
-------- -------- -------- --------
Total net sales $36,114 $29,889 $16,354 $10,434
======== ======== ======== ========
Long-lived assets:
United States $62,518 $10,773 $ 3,703 $ 108
Australia 11,471 11,152 10,309 5,264
South Africa - - - 1,779
United Kingdom 75 13 - -
United Kingdom (discontinued
operations) - - 14,070 3,683
-------- -------- -------- --------
Total long-lived assets $74,064 $21,938 $28,082 $10,834
======== ======== ======== ========
</TABLE>
We classify operations into two divisions, retail software solutions
and training products. As revenues, earnings and assets related to the training
division are below the threshold established for segment reporting, we consider
our business to consist of one reportable operating segment.
4
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RECENT DEVELOPMENTS
In May 2000, we announced that we are in discussions with Softline
Limited concerning a possible business combination between Softline and SVI.
Softline is a global software and services group focused on the development,
implementation and support of business and accounting software applications.
Softline currently beneficially owns approximately 56% of SVI's common shares.
Softline is the largest accounting and payroll software vendor in South Africa
and one of the largest in Australia, and also markets accounting software
applications in the United States, United Kingdom and other jurisdictions. SVI
and Softline have no binding agreement and have not yet established terms of a
potential transaction. Any such transaction will be subject to governmental
approvals by United States and South African authorities. Any transaction may
also be subject to approval of the stockholders of SVI and/or Softline. Any
business combination between SVI and Softline will have a material impact on our
operations and future prospects.
During the second quarter of fiscal 2000, we sold certain technology
rights to an unrelated third party for $3.5 million. We initially recorded this
transaction as revenue during the second quarter, but we subsequently determined
that the revenue from the sale should have been deferred until the time of
payment. We received payment of the first $1.8 million during the first quarter
of fiscal 2001 and expect to receive the balance during the second or third
quarter of fiscal 2001. This revenue will increase earnings for the periods in
which the payments are received, but is of a non-recurring nature. The sale of
these rights is not expected to otherwise impact results of operations.
RESULTS OF OPERATIONS
PRESENTATION OF RESULTS OF OPERATIONS
Following the close of our fiscal year ended September 30, 1997, we
changed our fiscal year end to March 31, commencing with the fiscal year ended
March 31, 1998.
Our Consolidated Statements of Operations, Stockholders' Equity and
Cash Flows included in this report show results for the following periods:
o the fiscal year ended March 31, 2000;
o the fiscal year ended March 31, 1999;
o the twelve months ended March 31, 1998 (unaudited);
o the six months ended March 31, 1998; and
o the fiscal year ended September 30, 1997.
The six month period ended March 31, 1998 and the twelve month period
ended September 30, 1997 are not comparable to the fiscal years ended March 31,
2000 and 1999. Accordingly, the discussion and analysis below compares fiscal
2000 to fiscal 1999, and fiscal 1999 to the comparable unaudited twelve month
period ended March 31, 1998, which includes the results for the transitional six
month fiscal year ended March 31, 1998 plus the last two quarters of the fiscal
year ended September 30, 1997.
5
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The following table sets forth, for the periods indicated, the relative
percentages that certain income and expense items bear to net sales.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
TWELVE MONTHS ENDED MARCH 31,
-------------------------------------------------------------------------------
2000 1999 1998
(UNAUDITED)
PERCENTAGE PERCENTAGE PERCENTAGE
AMOUNT OF REVENUE AMOUNT OF REVENUE AMOUNT OF REVENUE
------ ---------- ------ ---------- ------ ----------
(in thousands except for percentages)
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 36,114 100% $ 17,487 100% $ 17,702 100%
Cost of Sales 10,970 30% 5,347 31% 5,753 32%
------------------------- ------------------------- -------------------------
Gross Profit 25,144 70% 12,140 69% 11,949 68%
------------------------- ------------------------- -------------------------
Expenses:
Product development 4,877 14% - 0% - 0%
Depreciation and amortization 7,942 22% 2,395 14% 1,947 11%
Selling, general and administrative 18,235 50% 7,603 43% 7,108 40%
------------------------- ------------------------- -------------------------
Total expenses 31,054 86% 9,998 57% 9,055 51%
------------------------- ------------------------- -------------------------
Income (loss) from operations (5,910) -16% 2,142 12% 2,894 17%
Other income (expense) (556) -2% 1,227 7% 532 3%
Gain on disposals of Softline Limited shares - 0% - 0% 8,210 46%
------------------------- ------------------------- -------------------------
Income before provision (benefit)
for income taxes (6,466) -18% 3,369 19% 11,636 66%
Provision (benefit) for income taxes (2,412) -7% 1,671 10% 2,674 15%
------------------------- ------------------------- -------------------------
Income (loss) from continuing operations (4,054) -11% 1,698 10% 8,962 51%
Discontinued operations
Income from discontinued operations,
net of taxes - 3,613 1,142
Gain on disposal of discontinued
operations, net of applicable taxes - 274 -
------------- ------------- -------------
Income from discontinued operations - 3,887 1,142
------------- ------------- -------------
NET INCOME (LOSS) $ (4,054) $ 5,585 $ 10,104
============= ============= =============
</TABLE>
FISCAL YEAR ENDED MARCH 31, 2000 COMPARED TO FISCAL YEAR ENDED MARCH 31, 1999
NET SALES
Net sales increased by $18.6 million, or 106%, to $36.1 million in the
fiscal year ended March 31, 2000 from $17.5 million in the fiscal year ended
March 31, 1999. The increase in net sales was primarily due to the following:
o Inclusion of $19.0 million in sales from Island Pacific, which
was acquired at the beginning of fiscal year 2000.
o Increase of $2.4 million in sales from ARS. ARS was acquired
in July 1998; therefore, the results in the fiscal year ended
March 31, 1999 included only nine months of operations.
o Offset in part by a decrease of $3.0 million in sales from
Australian operations due to a downturn in demand for software
licenses and related consulting and support services in
Australia.
We experienced a decline in demand for software licenses during the
last six months of calendar year 1999. We believe this was due to deferred
purchasing decisions related to the millennium change and anticipation of new
products to be announced at industry trade shows in early calendar year 2000.
This decline in demand continued to negatively affect sales of software licenses
during our fourth quarter. Because our sales cycles tend to range from four to
twelve months, we remain cautious about our expectations for sales of software
licenses and related services in near term future periods due to the
interruption in sales cycles. We are not able to predict whether the decreased
demand we have experienced will continue to affect sales in the longer term.
6
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COST OF SALES
Cost of sales increased by $5.7 million, or 108%, to $11.0 million in
the fiscal year ended March 31, 2000 from $5.3 million in the fiscal year ended
March 31, 1999. This increase was primarily due the inclusion of cost of sales
from Island Pacific.
GROSS PROFIT
Gross profit increased by $13.0 million, or 106%, to $25.1 million in
the fiscal year ended March 31, 2000 from $12.2 million in the fiscal year ended
March 31, 1999. Gross profit, as a percentage of total revenues, increased to
70% in fiscal year 2000 from 69% in fiscal year 1999. This increase was
primarily due to the inclusion of high profit margin sales from Island Pacific.
Island Pacific's sales generally do not involve lower margin hardware sales.
PRODUCT DEVELOPMENT EXPENSES
Product development expenses for the fiscal year ended March 31, 2000
were $4.9 million or 14% of net sales. There were no product development
expenses in the comparative period. In conjunction with the acquisition of
Island Pacific, we commenced an active integration and product development
program to ensure compatibility between our point-of-sale (SVI-POST) and retail
management (SVI-HOST) products. Additionally, we are developing versions of our
products in other program languages to reduce hardware dependencies. We expect
to continue or increase the present level of spending on product development for
the foreseeable future as we continue to integrate, develop and enhance our
products to address the evolving needs of the retail industry.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased by $10.6
million, or 139%, to $18.2 million in the fiscal year ended March 31, 2000 from
$7.6 million in the fiscal year ended March 31, 1999. The increase was due to
the following:
o Inclusion of selling, general and administrative expenses of
$8.8 million from Island Pacific, which was acquired at the
beginning of the fiscal year 2000.
o Increase of $0.6 million in selling, general and
administrative expenses from ARS.
o Increase of $1.2 million in selling, general and
administrative expenses to expand marketing and investor
relations activities.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization increased by $5.5 million, or 229%, to
$7.9 million in the fiscal year ended March 31, 2000 from $2.4 million in the
fiscal year ended March 31, 1999. The increase was primarily due to the
acquisition of $42.6 million in intangible assets in the acquisition of Island
Pacific. These intangible assets are being amortized over estimated lives not
exceeding ten years.
OTHER INCOME (EXPENSE)
Other income (expense) decreased by $1.8 million, or 150%, to $(0.6)
million in the fiscal year ended March 31, 2000 from $1.2 million in the fiscal
year ended March 31, 1999. The decrease was primarily due to an increase of $1.4
million in interest expense in fiscal year 2000 and life insurance proceeds of
$0.5 million received in the prior fiscal year. The increase in interest expense
was due to the $20.8 million in notes payable obtained in fiscal year 2000 to
acquire Island Pacific.
DISCONTINUED OPERATIONS
Effective January 1, 1999, we sold our IBIS Systems Limited subsidiary
for $18 million. We recorded a gain of $0.3 million, net of applicable income
taxes of $0.8 million. Accordingly, the results of operations of IBIS for fiscal
1999 are shown as discontinued operations.
7
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FISCAL YEAR ENDED MARCH 31, 1999 COMPARED TO TWELVE MONTHS ENDED MARCH 31, 1998
NET SALES
Net sales decreased by $0.2 million, or 1%, to $17.5 million in the
fiscal year ended March 31, 1999 from $17.7 million in the comparable period
ended March 31, 1998. The decrease in net sales was due to a decrease of $4.4
million in sales from Australian operations. This decrease resulted from the
completion in March 1998 of several large contracts with a major retail group in
Australia, which included significant hardware sales. The decrease in net sales
was offset by the inclusion of $3.6 million in revenues from ARS, which was
acquired in July 1998, and an increase of $0.5 million in sales from our
training products division.
COST OF SALES
Cost of sales decreased by $0.5 million, or 9%, to $5.3 million in the
fiscal year ended March 31, 1999 from $5.8 million in the twelve months ended
March 31, 1998. The decrease was primarily due to a decrease of $1.7 million in
cost of sales from Australian operations, offset by the inclusion of $1.2
million in cost of sales from ARS.
GROSS PROFIT
Gross profit increased by $0.3 million, or 3%, to $12.2 million in the
fiscal year ended March 31, 1999 from $11.9 million in the twelve months ended
March 31, 1998. Gross profit, as a percentage of total revenues, increased to
69% in the fiscal year ended March 31, 1999 from 68% in the comparable 1998
period. The increase was due to a change in the sales mix away from lower margin
hardware sales toward higher margin software licenses and related services.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased by $0.5 million,
or 7%, to $7.6 million in the fiscal year ended March 31, 1999 from $7.1 million
in the twelve months ended March 31, 1998. Increase in selling, general and
administrative expenses was due to the inclusion of $1.6 million in selling,
general and administrative expenses from ARS, which was acquired in July 1998,
and an increase of $0.4 million in corporate-level general expenses. This
increase was offset by a decrease of $1.7 million in selling, general and
administrative expenses from the decrease in sales from Australia.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization increased by $0.5 million, or 26%, to
$2.4 million in the fiscal year ended March 31, 1999 from $1.9 million in the
twelve months ended March 31, 1998. Increase in depreciation and amortization
was primarily due to $0.4 million of depreciation and amortization from
intangible assets recorded in the acquisition of ARS, which was acquired in July
1998.
OTHER INCOME
Other income increased by $0.7 million, or 140%, to $1.2 million in the
fiscal year ended March 31, 1999 from $0.5 million in the twelve months ended
March 31, 1998. This increase was primarily due to life insurance proceeds of
$0.5 million received in the fiscal year 1999.
GAIN ON SALE OF SOFTLINE LIMITED SHARES
During the twelve months ended March 31, 1998, we reported a gain of
$8.2 million on the sale of Softline Limited shares yielding net proceeds of
$12.0 million. We have no further equity holdings in Softline Limited.
DISCONTINUED OPERATIONS
Income from discontinued operations consisted of income from IBIS,
which we acquired effective October 1, 1997 and which we sold effective January
1, 1999. Income from discontinued operations increased by $2.5 million, or 227%,
to $3.6 million in the fiscal year ended March 31, 1999 from $1.1 million in the
twelve months ended March 31, 1998. The increase was due to the inclusion of
IBIS results in discontinued operations for three quarters of fiscal 1999
compared to two quarters of the comparable 1998 period, and to a shift within
IBIS from lower margin hardware sales to higher margin software sales.
8
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
During the fiscal year ended March 31, 2000, we financed our operations
through internally generated cash, proceeds from bank and other loans, a loan
from a related party, proceeds from the sale of common stock and the exercise of
options, and a bank line of credit. During the fiscal year ended March 31, 1999,
we financed our operations primarily through internally generated cash and
proceeds from the exercise of options. During the transitional fiscal year ended
March 31, 1998 and the fiscal year ended September 30, 1997, we financed our
operations primarily through internally generated cash, proceeds from the sale
of common stock and proceeds from the sale of shares of Softline Limited common
stock. Cash and cash equivalents at March 31, 2000 were $4.8 million, a decrease
of $8.2 million from $13.0 million at March 31, 1999.
We continue to hold a $14.1 million (including accrued interest at
March 31, 2000) note receivable obtained in connection with our sale of IBIS
Systems Limited. To secure this receivable, we obtained a security interest in
the stock of IBIS. The purchaser did not repay the note on the original due date
of October 1, 1999 because it had not yet completed a reorganization that was
intended to serve as the source of funds to repay the note. The due date of the
note has been extended to November 15, 2000. We permitted the purchaser to
proceed with its reorganization with a wholly-owned subsidiary of Integrity
Software, Inc., a publicly traded company with prices quoted on the National
Quotation Bureau Pink Sheets under the symbol "INTY". The purchaser exchanged
all of the outstanding IBIS stock for 1,536,000 common shares of Integrity,
representing approximately 11% of Integrity's outstanding shares at March 20,
2000. We agreed to substitute our security interest in the IBIS shares for a
security interest in the purchaser's Integrity shares. We also obtained the
right to convert all or any portion of the unpaid indebtedness under the note to
Integrity shares valued at $12.50 per share and limited rights to require
Integrity to register such shares for resale under the Securities Act. Integrity
bid quotations have ranged from $7.00 to $22.00 per share from January 10, 2000
to June 23, 2000, but the market for Integrity shares has been limited. These
quotations may not represent actual transactions.
To our knowledge, the purchaser's only asset is the Integrity shares it
holds. The purchaser's ability to pay is therefore entirely dependent on its
ability to sell the Integrity shares. The purchaser is an affiliate of
Integrity, and its ability to sell the Integrity shares will be limited by law
and by market conditions. A recent third-party valuation of the Integrity shares
securing the note supports the carrying value of the note receivable on our
balance sheet at March 31, 2000. However, we do not know when or if the
purchaser of IBIS or we will be able to realize liquidity from the Integrity
shares, as the legal and practical ability of both the purchaser and us to
resell such shares is limited by applicable securities laws and market
conditions. We cannot guarantee that the value of the Integrity shares will
remain high enough to support the carrying value of the note receivable, and we
may be required to impair the value of the note receivable should the value of
the Integrity shares decline. Any such impairment would adversely affect our
results of operations during the period or periods in which it occurs.
We have reclassified this note receivable as a long-term asset due to
the uncertainty of the marketability of the Integrity shares and the dependence
on such marketability for collection.
We purchased all of the outstanding stock of Island Pacific in June
1999 for $35 million cash. We paid the purchase price using cash on hand, cash
acquired from the sale of our IBIS Systems Limited subsidiary, cash acquired
from the exercise of options by Softline, two bank loans totaling $18.5 million
and $2.3 million in other loans, including $1.5 million from a major
stockholder.
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The bank loans are secured by all of our stock in and all of the assets
of our U.S. retail software subsidiaries, and 65% of our stock in our Australian
retail software subsidiary. One loan was in the amount of $3.5 million and was
fully amortizing over two years. The other loan required interest-only payments
until maturity at December 3, 1999. We expected to retire the $15 million loan
on or before maturity using proceeds from the $13.6 million note receivable
obtained in connection with the sale of IBIS; however, our agreement with the
bank permitted us to convert the $15 million loan to a two-year fully amortizing
term loan subject to certain terms and conditions. Because the $13.6 million
note receivable was not paid on its original due date, we were not able to
retire the $15 million bank loan as anticipated. Rather than convert the loan,
we negotiated extensions of the due date of the $15 million obligation while we
searched for a replacement source of capital to retire the loan. We made a $2
million principal payment on this loan in May 2000 using proceeds from the sale
of common stock in a private placement. In May and June 2000, we agreed to
consolidate the approximately $14.75 million balance of the two loans into a
single loan and to terminate the conversion option. In July 2000, Softline
Limited loaned us $10 million for the purpose of making a $10 million principal
payment on this loan.
In July 2000, we refinanced the $4.75 million balance due on the bank
loan. Under the amended loan agreement, we are required beginning August 1, 2000
to pay $200,000 per month toward reduction of principal plus interest on the
outstanding balance at the rate of 5% over the bank's prime rate, increasing to
6.25% over the bank's prime rate after December 31, 2000. We are also required
to pay to the bank as a reduction of principal one half of amounts received from
a certain $1.75 million contract receivable from a one-time sale, any amounts we
receive from the sale of the shares of common stock of Integrity Software, Inc.
which secure the related note receivable for $14.1 million, and any amounts we
receive from the issuance of debt or equity securities other than stock option
exercises. We also maintain a $3 million line of credit with this bank, and the
line is subject to the provisions and restrictions of the amended loan
agreement. The entire remaining balance of the consolidated bank loan and the
lines of credit, if any, will be due and payable April 1, 2001. If we make no
principal prepayments on the consolidated loan amount other than the required
monthly payments, the balance at the maturity date would be $3.15 million plus
the amount outstanding on our credit lines. The loans are subject to certain
financial covenants and contain limitations on acquisitions, investments and
other borrowings. We plan to obtain replacement financing for the entire amount
owing to the bank prior to the maturity date. However, there can be no guarantee
that replacement financing will be available on acceptable terms and conditions,
or at all.
The $10 million loan from Softline obtained to reduce the bank
indebtedness is due August 1, 2001. The loan is subordinated to the bank
obligations and bears interest at 10% per annum payable monthly. We intend to
use proceeds we might receive from payment of the $14.1 million note receivable
or from sale of the shares of the common stock of Integrity Software, Inc. (into
which such note is convertible and which secure such note) to repay the loan
from Softline. We cannot guarantee that we will be able to resell sufficient
Integrity shares to repay this loan. We may have to use any proceeds from the
sale of these shares first to satisfy the remaining bank obligation. If we are
not able to repay some or all of the Softline loan through these means, we will
likely be required to seek outside debt or equity financing. We currently have
no commitments for such financing, and we cannot guarantee that such financing
will be available on acceptable terms and conditions, or at all.
In connection with our acquisition of Island Pacific, we also borrowed
$2.3 million with no stated maturity date from three entities. $1.5 million of
such amount was borrowed from a major stockholder. The balance due on these
loans at June 30, 2000 was $1.2 million. The loans bear interest at the prime
rate.
We have $3.65 million of credit lines to support working capital
requirements. $3.0 million of this amount is subject to the amended loan
agreement concerning the consolidated loan obtained to acquire Island Pacific
described above, and the then outstanding balance is due and payable on April 1,
2001, if not sooner retired. As of June 30, 2000, the outstanding balance on all
of our lines is $3.4 million.
We have been using operating income, cash received from the sale of
common stock and cash received from the exercise of options to discharge the
payments due on the bank loans and lines of credit. We used $10 million borrowed
from Softline to pay $10 million due on the bank loan in July 2000.
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During the year ended March 31, 2000, Softline exercised options to
purchase shares of SVI common stock for net proceeds of $4.8 million. The
proceeds were used to pay a portion of the Island Pacific purchase price, the
deferred portion of the purchase price for our Triple-S subsidiary (which was
sold to Softline in October 1999) and for working capital.
In March 2000, we sold common stock to one investor in a private
placement for net proceeds of $2.9 million. We agreed to register the resale of
such shares under the Securities Act. We also granted the investor a repricing
right through which the investor may receive additional shares of common stock.
The number of additional shares to be issued will be determined based on the
following formula:
Number of additional shares = (($8.89-P) x 337,448)/P, where P = 0.86 x
the average of the closing price of our stock on the American Stock
Exchange for the five days preceding the effective date of a
registration statement registering the resale of such share under the
Securities Act.
Other than cash and cash equivalents and the unused portion of the line
of credit, we have no material unused sources of liquid assets.
Cash provided by (used for) operating activities in the periods ended
March 31, 2000, 1999 and 1998 were $(2.3) million, $2.0 million and $8.5
million, respectively. Cash used for operating activities during fiscal year
2000 primarily resulted from a $4.1 million net loss, a $4.6 million increase in
accounts receivable and other receivables, a $0.6 million decrease in accounts
payable and accrued expenses, a $0.8 million increase in interest receivable, a
$2.6 million decrease in income tax payable, and a $2.6 million increase in
deferred income taxes liability; offset in part by $7.9 million of non-cash
depreciation and amortization expense and a $5.0 million increase in deferred
revenue. Cash provided by operating activities in fiscal year 1999 resulted from
$5.6 million in net income, $2.9 million of depreciation and amortization, and a
$1.7 million increase in income taxes payable; offset in part by a $4.6 million
increase in accounts receivable and other receivables, a $2.6 million decrease
in accounts payable and accrued expenses and a $1.0 million gain on disposal of
IBIS . Cash provided by operating activities in the twelve months ended March
31, 1998 resulted from $10.1 million in net income, $2.8 million of depreciation
and amortization, $0.8 million of non-cash compensation expense, a $2.6 million
increase in accounts payable and accrued expenses, and a $2.4 million increase
in income taxes payable, offset in part by an $8.2 million gain on disposal of
Softline Limited shares and a $1.6 million decrease in accounts receivable.
Accounts receivable increased during fiscal year 2000 primarily due to
inclusion of Island Pacific accounts receivable of $4.0 million at March 31,
2000 and a $3.3 million receivable associated with the non-recurring sale of
technology rights by our Australian subsidiary. Revenue recognition from this
sale was deferred until payment expected in fiscal year 2001. Accounts
receivable increased during fiscal year 1999 primarily due to inclusion of ARS
accounts receivable of $0.8 million and an increase in receivables from our
Australian subsidiary. Accounts receivable balances fluctuate significantly due
to a number of factors including acquisitions and dispositions, seasonality,
shifts in customer buying patterns, contractual payment terms, the underlying
mix of products and services sold, and geographic concentration of revenues.
Cash provided by (used for) investing activities in the periods ended
March 31, 2000, 1999 and 1998 were $(36.5) million, $(3.3) million and $4.4
million, respectively. Investing activities during fiscal year 2000 included a
$33.8 million net cash payment for the acquisition of Island Pacific, $1.8
million in purchase of software and capitalized software development costs and
$0.8 million in capital expenditures. Investing activities in fiscal year 1999
included $1.4 million in net cash payments for the acquisition of ARS, $0.8
million in net cash payments for other acquisitions related to our former IBIS
subsidiary and $3.3 million in capital expenditures, offset by $2.2 million in
net proceeds from the sale of IBIS. Investing activities in the twelve months
ended March 31, 1998 included $12.0 million in net proceeds from sale of
Softline Limited shares, $0.7 million in proceeds from maturity of certificates
of deposit, and $0.5 million net cash acquired from the acquisition of Divergent
Technologies Pty. Ltd., offset in part by a $6.5 million net cash payment for
the acquisition of assets related to our former IBIS subsidiary, $2.1 million in
purchases of software and capitalized software development costs and $0.5
million in capital expenditures.
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Cash provided by (used for) financing activities in the periods ended
March 31, 2000, 1999 and 1998 were $30.9 million, $(0.02) million and $1.6
million, respectively. Financing activities during fiscal year 2000 included
$20.5 million in proceeds from loans obtained to acquire Island Pacific, $9.2
million in proceeds from the exercise of options and private sale of common
stock and $2.3 million in proceeds from lines of credit, offset in part by $1.5
million in loan payments. Financing activities in fiscal year 1999 included $1.0
million in cash payments to repurchase common stock, offset in part by $0.7
million proceeds from the exercise of options. Financing activities in the
twelve months ended March 31, 1998 included $9.3 million in proceeds from
issuance of common stock and $1.1 million in proceeds from an affiliate, offset
by a $4.5 million decrease in amounts due to stockholders and $4.3 million in
payments on lines of credit.
Changes in the currency exchange rates of our foreign operations had
the effect of reducing cash by $0.3 million, $0.4 million and $0.3 million in
the period ended March 31, 2000, 1999 and 1998, respectively. We did not enter
into any hedging transactions to manage foreign currency risk during any of the
reported periods.
We believe we have sufficient cash and will generate sufficient
revenues from operations to meet our cash needs through fiscal 2001. We may
however be required to reduce expenditures on certain product development
activities if normal sales cycles, impacted by the millennium change and other
factors, do not resume as expected. While such reductions would impact our
long-term strategy of enhancing and integrating our existing products and
developing new products, we do not believe they would impact short-term results
of operations. We may require outside sources of debt or equity financing to
discharge the then outstanding bank indebtedness due April 1, 2001 and the note
payable to Softline due August 1, 2001. We are considering various alternatives
for equity financing to retire some or all of our outstanding indebtedness and
to pursue further product development initiatives. At this time, we have no firm
commitments for such outside financing, and there is no guarantee that such
financing will be available on acceptable terms and conditions, or at all.
We expect to continue our strategy of seeking acquisition opportunities
within our target profile of companies with advanced technologies and market
leadership in the enterprise retail solutions sector. We cannot guarantee that
any such acquisition opportunities will be available on acceptable terms, or
that any such acquisitions will ultimately be consummated. To the extent that
the terms of any such acquisitions call for payment in cash, we will likely need
to seek an outside source of capital. We have not identified any sources for
such capital, and there can be no guarantee that such capital will be available
on acceptable terms and conditions, or at all.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (SFAS 133). SFAS 133, as amended by
statement of Financial Accounting Standards No. 137, requires companies to
recognize all derivatives as either assets or liabilities with the instruments
measured at fair value and is effective for fiscal years beginning after June
15, 2000. The accounting for changes in fair value gains and losses depends on
the intended use of the derivative and its resulting designation. We have not
yet completed the process of evaluating the impact that will result from the
adoption of SFAS No. 133; however, on a preliminary basis, we do not believe the
eventual adoption of SFAS 133 will have a significant impact on our consolidated
financial statements.
In December 1999, the SEC issued Staff Accounting Bulletin (SAB) No.
101, "Revenue Recognition in Financial Statements". SAB 101 provides the SEC
staff's views in applying generally accepted accounting principles to selected
revenue recognition issues, including software revenue recognition. We will be
required to adopt SAB 101 in the fourth quarter of the 2001 fiscal year. We do
not expect the adoption of SAB 101 will have a material effect on our financial
position or results of operations.
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YEAR 2000
As of July 3, 2000, our products, computing and communications
infrastructure systems have operated without Year 2000 related problems and
appear to be Year 2000 ready. We are not aware that any of our major customers
or third-party suppliers have experienced significant Year 2000 related
problems. We believe all our critical systems are Year 2000 ready. However,
there is no guarantee that we have discovered all possible failure points. We
will address any Year 2000 problems experienced by our customers through normal
maintenance and warranty procedures. Year 2000 compliance costs were not
material in any prior period and were funded from working capital. As discussed
above, we believe that concern over potential Year 2000 problems impacted sales
and the normal commencement of sales cycles for our software licenses during the
second half of calendar year 1999. These effects may continue to adversely
affect our revenues until normal sales cycles resume.
EURO CURRENCY
In January 1999, participating European Economic and Monetary Union
(EMU) countries introduced the ECU or "Euro" as a new currency. During 2002, all
participating EMU countries are expected to convert to the Euro as their single
currency. During the next two years, participating EMU countries will conduct
business in both the existing national currency and the Euro. Companies
operating in or conducting business in these EMU member countries will need to
ensure that their financial and other software systems are capable of processing
transactions and properly handling these currencies, including the Euro. We
believe that all of our internal financial and software systems can accommodate
the dual currency system and the full conversion to the Euro. Our retail
software products are designed to operate in any foreign currency, including the
Euro. We cannot guarantee however that our products will operate without
modification through full conversion to the Euro or meet all of the Euro
currency requirements. If our software products do not meet all the Euro
currency requirements, our business, operating results and financial condition
could be materially adversely affected. We have not had and do not expect a
material impact on our results of operations from foreign currency gains or
losses as a result of the transition to the Euro as the functional currency for
our operations in EMU countries.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Financial statements and financial statement schedules
Independent Auditors' Report of Deloitte & Touche LLP............. F-1
Report of Independent Certified Public Accountants
of Singer Lewak Greenbaum & Goldstein LLP......................... F-2
Consolidated Balance Sheets as of March 31, 2000 and 1999......... F-3
Consolidated Statements of Operations for the Periods ended
March 31, 2000, March 31, 1999, March 31, 1998
(twelve months unaudited), March 31, 1998 (six months)
and September 30, 1997............................................ F-4
Consolidated Statements of Stockholders' Equity for the Years
Ended March 31, 2000, March 31, 1999 and March 31, 1998
(six months) .....................................................F-5-6
Consolidated Statements of Cash Flows for the Periods Ended
March 31, 2000, March 31, 1999, March 31, 1998
(twelve months unaudited), March 31, 1998 (six months)
and September 30, 1997............................................F-7-8
Notes to Consolidated Financial Statements.......................F-9-30
All schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under the
related instructions or are not considered necessary and therefore have been
omitted.
(b) Reports on Form 8-K.
During the quarter ended March 31, 2000, we did not file any reports on
Form 8-K.
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(c) Exhibits
Exhibit Description
------- -----------
2.1 Share Purchase Agreement dated November 4, 1996 as amended
among SVI Holdings, Inc. (the "Company") and Hookmond Pty.,
Ltd. and Landreef Pty. Ltd., incorporated by reference to
exhibit 10.4 to the Company's Form 10-KSB for the fiscal year
ended September 30, 1996.
2.2 Technology Purchase Agreement dated November 4, 1996 as
amended between the Company and New Hope Trading Limited,
incorporated by reference to exhibit 10.5 to the Company's
Form 10-KSB for the fiscal year ended September 30, 1996.
2.3 Asset Purchase Agreement dated as of April 28, 1997, among the
Company, Divergent Technologies Pty. Ltd., Colin Bruce
Chapman, Chapman Computers Pty. Ltd. and The Chapman Computers
Unit Trust, incorporated by reference to exhibit 2.1 to the
Company's Form 8-K filed on August 11, 1997.
2.4 Sale of Shares Agreement between Softline Limited and the
Company for the acquisition of IBIS Systems Pty. Ltd.,
incorporated by reference to exhibit 1 to the Company's Form
8-K filed on December 19, 1997.
2.5 Share Swap Agreement between the Company and Softline Limited,
incorporated by reference to exhibit 2 to the Company's Form
8-K filed on December 19, 1997.
2.6 Renunciation Agreement among the Company, Hosken Consolidated
Investments Limited and Softline Limited, incorporated by
reference to exhibit 3 to the Company's Form 8-K filed on
December 19, 1997.
2.7 Agreement among the Company, Hosken Consolidated Investments
Limited and Softline Limited, incorporated by reference to
exhibit 5 to the Company's Form 8-K filed on December 19,
1997.
2.8 Agreement between Multisoft Financial Systems Limited and the
Sage Group Plc., and IBIS Systems Limited, incorporated by
reference to exhibit 10.21 to the Company's Form 8-K filed on
March 24, 1998.
2.9 Amendment Agreement between Multisoft Financial Systems
Limited and The Sage Group Plc., and IBIS Systems Pty. Ltd.,
incorporated by reference to exhibit 10.22 to the Company's
Form 8-K filed on March 24, 1998.
2.10 Agreement of Merger and Plan of Reorganization dated as of
July 1, 1998 among the Company and its wholly-owned
subsidiary; Applied Retail Solutions, Inc.; and the
shareholders of Applied Retail Solutions, Inc., incorporated
by reference to exhibit 2.1 to the Company's Form 8-K filed on
September 16, 1998.
2.11 First Amendment to the Agreement and Plan of Reorganization
dated January 28, 1999 among the Company and its wholly-owned
subsidiary; Applied Retail Solutions, Inc.; and the
shareholders of Applied Retail Solutions, Inc., incorporated
by reference to exhibit 2.1 to the Company's Form 10-QSB for
the quarter ended December 31, 1998.
2.12 Second Amendment to the Agreement and Plan of Reorganization
dated May 24, 1999 among the Company and its wholly-owned
subsidiary; Applied Retail Solutions, Inc.; and the
shareholders of Applied Retail Solutions Inc., incorporated by
reference to exhibit 2.12 to the Company's Form 10-KSB for the
fiscal year ended March 31, 1999.
2.13 Share Sale Agreement effective December 31, 1998 between
Kielduff Investments Limited and the Company, incorporated by
reference to exhibit 10.2 to the Company's Form 8-K filed on
May 14, 1999.
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2.14 Stock Purchase Agreement dated June 1, 1999 among the Company,
Island Pacific Systems Corporation, and the shareholders of
Island Pacific Systems Corporation, incorporated by reference
to exhibit 2.1 to the Company's Form 8-K filed on June 18,
1999.
2.15 Asset Purchase Agreement dated March 16, 2000 among the
Company, MarketPlace Systems Corporation and Jay Fisher
(included herewith).
3.1 Articles of Incorporation, incorporated by reference to
exhibit 3.1 to the Company's Form 10-KSB for the fiscal year
ended December 31, 1993.
3.2 Amended and Restated Bylaws (included herewith).
4.1 Form of Stock Certificate (included herewith).
10.1 Incentive Stock Option Plan, as amended April 1, 1998,
incorporated by reference to exhibit 10.1 to the Company's
Form 10-QSB for the quarter ended September 30, 1998.
10.2 Employment Agreement of Barry M. Schechter dated effective
October 1, 1997, incorporated by reference to exhibit 10.15 to
the Company's 10-KSB for the fiscal year ended September 30,
1997.
10.3 Assignment and Assumption of Acquisition Agreement dated April
1, 1998 among Softline Limited, Softline Holdings (Pty)
Limited, Triple-S Computers (Pty) Limited, Divergent S.A.
(Pty) Limited and the shareholders of Triple-S Computers (Pty)
Limited, incorporated by reference to exhibit 10.2 to the
Company's Form 10-QSB for the quarter ended June 30, 1998.
10.4 Description of Agreement between Softline Limited and SVI
Holdings, Inc. regarding sale of Triple-S Computers (Pty)
Limited (included herewith).
10.5 1998 Incentive Stock Plan, incorporated by reference to
exhibit 10.2 to the Company's Form 10-QSB for the quarter
ended September 30, 1998.
10.6 Employment Agreement of Sam Pickard dated as of August 27,
1998, incorporated by reference to exhibit 2.3 to the
Company's Form 8-K filed on September 16, 1998.
10.7 Employment Agreement of Larry Lahodny dated as of August 27,
1998, incorporated by reference to exhibit 2.4 to the
Company's Form 8-K filed on September 16, 1998.
10.8 Promissory Note dated October 13, 1998 between the Company and
Softline Limited, incorporated by reference to exhibit 10.1 to
the Company's Form 10-QSB for the quarter ended December 31,
1998.
10.9 Pledge Agreement dated October 13, 1998 between the Company
and Softline Limited, incorporated by reference to exhibit
10.2 to the Company's Form 10-QSB for the quarter ended
December 31, 1998.
10.10 Promissory Note dated December 31, 1998 executed by Kielduff
Investments Limited in favor of the Company, incorporated by
reference to exhibit 10.3 to the Company's Form 8-K filed on
May 14, 1999.
10.11 Pledge Agreement effective December 31, 1998 between Kielduff
Investments Limited and the Company, incorporated by reference
to exhibit 10.4 to the Company's Form 8-K filed on May 14,
1999.
10.12 Settlement and Release Agreement effective December 31, 1998
among Kielduff Investments Limited, the Company, Softline
Limited, Systems for Business Incorporated and IBIS Systems
Limited, incorporated by reference to exhibit 10.5 to the
Company's Form 8-K filed on May 14, 1999.
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10.13 Amendment to Note between the Company and Kielduff Investments
Limited, incorporated by reference to exhibit 2.1 to the
Company's Form 8-K filed November 1, 1999.
10.14 Agreement and Amendment to Note, Pledge Agreement and
Settlement and Release Agreement among the Company, Softline
Limited, Kielduff Investments Limited, Systems For Business,
Inc., IBIS Systems Limited and Jyris Group, incorporated by
reference to exhibit 10.24 to the Company's Form 10-Q/A filed
July 11, 2000 for the quarter ended December 31, 1999.
10.15 Registration Rights Agreement between the Company and
Integrity Holdings, Ltd., incorporated by reference to exhibit
10.25 to the Company's Form 10-Q filed February 14, 2000.
10.16 Term Loan Agreement dated June 3, 1999 between the Company and
Union Bank of California, N.A., incorporated by reference to
exhibit 10.1 to the Company's Form 8-K filed on June 18, 1999.
10.17 Term Loan A Note dated June 3, 1999 between the Company and
Union Bank of California, N.A., incorporated by reference to
exhibit 10.2 to the Company's Form 8-K filed on June 18, 1999.
10.18 Term Loan B Note dated June 3, 1999 between the Company and
Union Bank of California, N.A., incorporated by reference to
exhibit 10.3 to the Company's Form 8-K filed on June 18, 1999.
10.19 Pledge Agreement dated June 3, 1999 between the Company and
Union Bank of California, N.A., incorporated by reference to
exhibit 10.4 to the Company's Form 8-K filed on June 18, 1999.
10.20 Security Agreement by the Company in favor of Union Bank of
California, N.A., incorporated by reference to exhibit 10.5 to
the Company's Form 8-K filed on June 18, 1999.
10.21 Security Agreement by Applied Retail Solutions, Inc. in favor
of Union Bank of California, N.A., incorporated by reference
to exhibit 10.6 to the Company's Form 8-K filed on June 18,
1999.
10.22 Security Agreement by Island Pacific Systems Corporation in
favor of Union Bank of California, N.A., incorporated by
reference to exhibit 10.7 to the Company's Form 8-K filed on
June 18, 1999.
10.23 Letter Agreement between the Company and Union Bank of
California, N.A., incorporated by reference to exhibit 10.26
to the Company's Form 10-Q/A filed on July 11, 2000.
10.24 Amendment No. 1 to Term Loan Agreement between the Company and
Union Bank of California, N.A. (included herewith).
10.25 Revolving Note between the Company and Union Bank of
California, N.A. (included herewith).
10.26 Amendment No. 2 to Term Loan Agreement between the Company and
Union Bank of California, N.A. (included herewith).
10.27 Term Loan Note of the Company in favor of Union Bank of
California, N.A. (included herewith).
10.28 Common Stock Purchase Agreement between the Company and AMRO
International S.A. dated March 13, 2000 (included herewith).
10.29 Registration Rights Agreement between the Company and AMRO
International S.A. dated March 13, 2000 (included herewith).
10.30 Common Stock Option Agreement dated May 24, 1999 between the
Company and Softline Limited (included herewith).
10.31 Software Sale and Use Agreement dated September 16, 1999
between Divergent Technologies (Pty) Limited and Resource
Control Management Limited (UK), as amended (included
herewith).
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10.32 Promissory Note of the Company in favor of Softline Limited
(included herewith).
21 List of Subsidiaries (included herewith).
23.1 Consent of Deloitte & Touche LLP (included herewith).
23.2 Consent of Singer Lewak Greenbaum & Goldstein LLP (included
herewith).
27 Financial Data Schedule.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
SVI HOLDINGS, INC., A NEVADA CORPORATION
By: /s/ David L. Reese
-----------------------------------
Date: August 17, 2000 David L. Reese
Chief Financial Officer
Signing on behalf of the registrant
and as principal accounting officer.
17
