<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
To
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
March 17, 1998
--------------
Date of Report(date of earliest event reported)
Commission File Number 0-22472
-------
ADAPTIVE SOLUTIONS, INC.
- - -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Oregon 93-0981962
- - -----------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1400 N.W. COMPTON DRIVE, SUITE 340, BEAVERTON, OR 97006
- - -----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(503) 690-1236
- - -----------------------------------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE>
The undersigned Registrant hereby amends the following items, financial
statements, exhibits, or other portions of its Current Report on Form 8-K,
originally filed with the Securities and Exchange Commission on March 17,
1998 (the "Form 8-K") as set forth in the pages attached hereto:
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired.
The following financial statements of the business acquired are attached
hereto:
Report of Independent Accountants F-1
Consolidated Balance Sheet at December 31, 1997 and 1996 F-2
Consolidated Profit and Loss Account for the years ended
December 31, 1997 and 1996 F-3
Consolidated Statement of Cash Flows for the year ended
December 31, 1997 and 1996 F-5
Consolidated Statement of Shareholders' Equity F-6
Notes to Financial Statements F-7
(b) Pro Forma Financial Information.
The following unaudited pro forma consolidated condensed financial
statements are attached hereto:
Unaudited Pro Forma Consolidated Condensed Financial Data
As of and for the year ended December 31, 1997 F-13
Unaudited Pro Forma Consolidated Condensed Balance Sheet
Data December 31, 1997 F-14
Unaudited Pro Forma Consolidated Condensed Statement of
Operations Data Year ended December 31, 1997 F-15
Notes to Unaudited Pro Forma Consolidated Condensed
Financial Data. F-16
<PAGE>
(c) Exhibits.
Exhibit No. Description
23.1 Consent of Barbier Frinault & Autres, Arthur Andersen
28.1* Press Release dated March 9, 1998, relating to the Event.
*Previously filed.
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.
Adaptive Solutions, Inc.
Dated: May 15, 1998 By: /s/ Daniel J. Meub
------------------------
Daniel J. Meub,
President and Chief
Executive Officer
Dated: May 15, 1998 By: /s/ Richard L. Boonstra
------------------------
Richard L. Boonstra,
Corporate Controller and
Secretary (Principal Financial
and Accounting Officer)
<PAGE>
As instructed by you, we have audited the accompanying consolidated financial
statements of Mimetics for the years 1996 and 1997.
We conducted our audit in accordance with the professional standards applied
in France and substantially in accordance with generally accepted auditing
standards in the United States of America. 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 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
audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements give a true and fair
view of the financial position and assets and liabilities of Mimetics and its
subsidiary as of December 31, 1997 and 1996, and of the results of their
operations for the years then ended in accordance with accounting principles
generally accepted in France.
Without qualifying our opinion above, we draw your attention to the following:
- Because of the cash position of Mimetics, support from the shareholders
might be needed to assure the continuation of operations;
- Because of the loss, as of December 31, 1995, of more than half its
capital stock, Mimetics must replenish its equity to a level at least
equal to half the capital stock by December 31, 1998;
- Since Easyreader (the dormant subsidiary of Mimetics) did not bring its
equity back to a level at least equal to half the capital stock by
December 31, 1995, any interested party may file in court for the
winding-up of this company.
"The accompanying consolidated financial statements for 1996 and 1997 have
been translated into English but they have not been fully reformatted to
parallel the form of financial reporting generally used in the United States,
even though a statement of stockholders' equity and a cash flows statement
have been added and notes to the consolidated financial statements have been
expanded to conform with U.S. requirements.
"These financial statements follow French generally accepted accounting
principles and reporting practices. The effects of the differences between
French and United States generally accepted accounting principles are
summarized in note 9 to the consolidated financial statements."
Neuilly-sur-Seine, May 12, 1998
The Statutory Auditor
-------------------------
BARBIER FRINAULT & AUTRES
ARTHUR ANDERSEN
Jean-Francois Ladurelle
<PAGE>
MIMETICS SA (Consolidated)
Balance Sheet
All amounts in FF French Francs
<TABLE>
<CAPTION>
ASSETS 31.12.97 31.12.96
------ ---------- -----------
<S> <C> <C>
Marketable securities 279,359
Cash Banks 67,347 1,173,823
----------- ------------
TOTAL CURRENT ASSETS 346,706 1,173,823
----------- ------------
Inventory 159,725 64,074
Trade Receivable 1,545,509 2,481,596
Provision for bad debts (692,845) (629,280)
Payments on account in advance 14,471 69,135
Uninvoiced Receivables 490,000
----------- ------------
TOTAL RECEIVABLES 1,026,860 2,475,525
----------- ------------
TOTAL OTHER ASSETS 750,912 579,827
----------- ------------
NET FIXED ASSETS 298,489 369,832
----------- ------------
TOTAL ASSETS 2,422,967 4,599,007
----------- ------------
LIABILITIES
LOANS & SIMILAR LIABILITIES
Anvar 1,599,200 2,177,200
Coface 554,817 834,849
Arex 132,000
Convertible debenture loans 3,450,000
Convertible debenture loans interest 143,750
----------- ------------
TOTAL LOANS & SIMILAR LIABILITIES 5,879,767 3,012,049
----------- ------------
TOTAL PAYABLES 2,700,946 3,684,683
----------- ------------
TOTAL ACCRUED EXPENSES 1,758,962 1,674,720
----------- ------------
TOTAL CURRENT LIABILITIES 10,339,674 8,371,452
----------- ------------
TOTAL SHAREHOLDERS EQUITY (7,916,708) (3,772,445)
----------- ------------
TOTAL LIABILITIES & EQUITY 2,422,967 4,599,007
----------- ------------
</TABLE>
F-2
<PAGE>
MIMETICS SA (CONSOLIDATED)
PROFIT AND LOSS ACCOUNT
<TABLE>
<CAPTION>
FOR THE YEAR ENDING 12/31/97 12/31/96
----------- -------------
<S> <C> <C>
OPERATING INCOME
Sales of purchased goods 3,620,990.00 197,443.00
Sales of manufactured goods 3,377,362.00
Sales of services 3,101,446.00 2,457,494.00
-------------- -------------
Net sales 6,722,436.00 6,032,299.00
Trading incentive grants 6,000.00 3,450,400.00
Write-back of provisions and transferred charges 6,434.00 2,530,604.00
Other income 127,928.00 2,317.00
-------------- -------------
TOTAL OPERATING INCOME (I) 6,862,798.00 12,015,620.00
-------------- -------------
OPERATING EXPENSES
Purchases of goods 723,978.00 651,318.00
Variation in stocks of purchased goods (159,725.00) (14,239.00)
Purchases of raw materials and other supplies
Variation in inventory of raw materials and
supplies 0 0
Other purchases and expenses 3,279,887.00 3,186,390.00
Taxes 571,802.00 351,293.00
Wages and salaries 3,904,128.00 3,903,897.00
Social security charges 1,716,334.00 1,685,111.00
Depreciation and provisions 0.00 0.00
On fixed assets : depreciation 168,829.00 2,071,618.00
On fixed assets : provisions 0.00 0.00
On current assets : provisions 369,732.00 262,527.00
For possible and probable liabilities : provisions
Other expenses 144,556.00 1,064,760.00
-------------- -------------
TOTAL OPERATING EXPENSES (II) 10,719,521.00 13,162,675.00
-------------- -------------
OPERATING RESULT ( I - II ) (3,856,723.00) (1,147,055.00)
</TABLE>
F-3
<PAGE>
MIMETICS SA (CONSOLIDATED)
(CONTINUED)
<TABLE>
<CAPTION>
12/31/97 12/31/96
-------------- ------------
<S> <C> <C>
FINANCIAL INCOME
From shares in group companies
From other investments included among fixed assets
Interests and similar income 23,225.00 0.00
Write-back of provisions and charges transferred
Profit on exchange 12,437.00 40,512.00
Net profit on disposals of financial current
investments 48,773.00
--------------- ---------------
TOTAL FINANCIAL INCOME (V) 35,662.00 89,285.00
--------------- ---------------
FINANCIAL EXPENSES
Increase of provisions against financial assets 0.00
Interests payable and similar charges 233,606.00 150,142.00
Loss on exchange 18,617.00 61,410.00
Provision for loss of exchange
--------------- ---------------
TOTAL FINANCIAL EXPENSES (VI) 252,223.00 211,552.00
--------------- ---------------
NET FINANCIAL INCOME/EXPENSES (V-VI) (216,561.00) (122,267.00)
--------------- ---------------
RESULT OF ORD. OPERS BEFORE TAX/PROFIT(I-II+III-IV+V-VI)(4,073,284.00) (1,269,322.00)
--------------- ---------------
TOTAL EXTRAORDINARY INCOME (VII) 329,463.00 477,410.00
--------------- ---------------
TOTAL EXTRAORDINARY EXPENSES (VIII) 400,441.00 63,961.00
--------------- ---------------
RESULT OF EXTRAORDINARY ITEMS (VII-VIII) (70,978.00) 413,449.00
--------------- ---------------
Corporation tax (X) 0.00 25,000.00
Total income (I+III+V+VII) 7,227,923.00 12,582,315.00
Total expenses (II+IV+VI+VIII+IX+X) 11,372,185.00 13,463,188.00
--------------- ---------------
Net Income (consolidated) (4,144,262.00) (880,873.00)
</TABLE>
F-4
<PAGE>
MIMETICS S.A.
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997 1996
MIMETICS SA MIMETICS SA
(consolidated) (consolidated)
--------------- ----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES :
Net Loss (4,144,262) (880,873)
Adjustements to reconcile net loss to net cash provided by
(used) in operating activities (net of effects of acquisition):
Depreciation and amortization (net) 232,394 (74,919)
Acquired in-process research and development
(Gain) loss on sale of assets 149,271 16,912
Amortization of unearned compensation
Reversal of accrued restructuring charges not incurred
Issuance of common stock for services
Changes in assets and liabilities:
Accounts receivable 936,087 1,380,482
Inventory (95,651) (48,236)
Prepaid expenses and other assets (5,289) 970,189
Accounts payable (983,738) (122,392)
Accrued expenses 84,242 (611,440)
Deferred revenue 544,664 965,379
------------ ------------
Net cash provided by (used in)
operating activities (3,282,282) 1,595,102
CASH FLOWS FROM INVESTING ACTIVITIES :
Proceeds from sales of assets
Purchase of fixtures and equipement (243,591) (27,261)
Purchase of long-term investment (168,963) (53,350)
Purchase of short-term investments
Net cash paid in acquisition
------------ ------------
Net cash used in investing activities (412,554) (80,611)
CASH FLOWS FROM FINANCING ACTIVITIES :
Proceeds from issuance of common stock and option exercises 2,391,978
Proceeds from/(payments on) Long-term debt 2,867,718 (3,693,605)
Proceeds from notes payable
Restricted cash
Net cash provided by (used in) financing activities 2,867,718 (1,301,627)
------------ ------------
NET INCREASE (DECREASE) IN CASH (827,118) 212,864
AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 1,173,823 960,959
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF YEAR 346,705 1,173,823
------------ ------------
</TABLE>
F-5
<PAGE>
MIMETICS S.A.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Preferred stock Common stock
--------------------- --------------------- Unearned Accumulated Total stockholders'
Shares Amount Shares Amount compensation Reserve equity
--------- ---------- --------- --------- ------------- -------------- ---------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, December 31, 1994 8,722 872,200 2,806,091 3,678,291
--------- ---------- --------- --------- ------------- -------------- ---------------------
0
Sale of common stock 12,000 1,200,000 1,200,000
Net Loss (10,161,841) (10,161,841)
0
--------- ---------- --------- --------- ------------- -------------- ---------------------
BALANCE, December 31, 1995 0 0 20,722 2,072,200 0 (7,355,750) (5,283,550)
--------- ---------- --------- --------- ------------- -------------- ---------------------
0
Sale of common stock 23,077 2,307,700 84,277 2,391,977
Net Loss (880,873) (880,873)
0
--------- ---------- --------- --------- ------------- -------------- ---------------------
BALANCE, December 31, 1996 0 0 43,799 4,379,900 0 (8,152,346) (3,772,446)
--------- ---------- --------- --------- ------------- -------------- ---------------------
0
Sale of common stock 0
Net Loss (4,144,262) (4,144,262)
0
--------- ---------- --------- --------- ------------- -------------- ---------------------
BALANCE, December 31, 1997 0 0 43,799 4,379,900 0 (12,296,608) (7,916,708)
</TABLE>
F-6
<PAGE>
MIMETICS, SA
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1996
(In thousands French francs (KF), except per share or per unit data)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
OPERATIONS
Mimetics SA, (the Company) develops and markets high accuracy, high speed
data entry recognition software for reading printed documents.
FINANCIAL STATEMENT ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers all highly
liquid investments with an original maturity of three months or less to be
cash equivalents. Cash equivalents consist of listed marketable securities.
ACCOUNTS RECEIVABLE
Accounts receivable are shown net of allowance for doubtful accounts of KF
852 and KF 1.852 at December 31, 1997 and 1996, respectively.
INVENTORY
Inventory is stated at the lower of cost, using the FIFO method, or market.
(Continued)
F-7
<PAGE>
MIMETICS, SA.
NOTES TO FINANCIAL STATEMENTS
(In thousands, except per share or per unit data)
FIXTURES AND EQUIPMENT
Owned equipment is stated at cost. Equipment and software under capitalized
leases is not material. Leasehold improvements are stated at cost.
Maintenance and repairs are expensed as incurred.
Depreciation of owned equipment is provided using the straight-line method
over the estimated useful lives of the assets, generally three to ten years.
REVENUE RECOGNITION
Revenue for product sales is recognized upon shipment. The Company records
funds received from customers but not yet earned under the terms of the
contracts as deferred revenue.
RESEARCH AND DEVELOPMENT COSTS
Research and Development costs are fully amortized.
SOFTWARE DEVELOPMENT COSTS
Under Statement of Financial Accounting Standards (SFAS) No. 86, software
development costs are to be capitalized beginning when a product's
technological feasibility has been established and ending when a product is
made available for general release to customers. To date, the establishment
of technological feasibility of the Company's products has occurred shortly
before general release and, accordingly, all capitalized costs have been
fully amortized.
FOREIGN CURRENCY TRANSACTIONS
Foreign currency transaction gains and losses are included as a component of
other income and expense.
ADVERTISING
The Company expenses the costs of advertising when the costs are incurred.
Advertising, leaflets, and public relations expense was KF835, and KF523 for
the years ended December 31, 1997, and 1996 respectively.
F-8 (Continued)
<PAGE>
MIMETICS, SA.
NOTES TO FINANCIAL STATEMENTS
(In thousands, except per share or per unit data)
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts of cash and cash equivalents, short-term investments,
accounts receivable and accounts payable approximate fair value due to the
short-term nature of these instruments. Fair value estimates are made at a
specific point in time, based on current market values about the financial
instruments when available. These estimates are subjective in nature and
involve uncertainties and matters of significant judgment and, therefore,
cannot be determined with precision. Changes in assumptions could
significantly affect the estimates.
INCOME TAXES
The Company records income taxes when due and does not record any asset in
relation with tax losses available.
STOCK OPTION PLAN
No stock option plan was in force as at 31.12.97 and 96.
NOTE 2: INVENTORY
Inventory, net of reserves for obsolete inventory of KF 160 and KF 0 at
December 31, 1997 and 1996, consists of the following:
<TABLE>
<CAPTION>
December 31,
1997 1996
<S> <C> <C>
Finished goods......... KF 160 KF 64
Inventory, net......... KF 160 KF 64
</TABLE>
F-9 (Continued)
<PAGE>
MIMETICS, SA.
NOTES TO FINANCIAL STATEMENTS
(In thousands, except per share or per unit data)
NOTE 3: FIXTURES AND EQUIPMENT
Fixtures and equipment consist of the following:
<TABLE>
<CAPTION>
December 31,
1997 1996
<S> <C> <C>
KF KF
Equipment 1.644 1.520
Software 239 236
Leasehold improvements 376 662
-------- --------
2.259 2.418
Less accumulated depreciation
and amortization (1.961) (2.048)
Fixtures and equipment, net 298 KF 370 KF
</TABLE>
NOTE 4: INVESTMENT IN EASY READER SA
The Company has an investment in EASY READER SA , a French company, which
developed and marketed high accuracy, high speed data entry recognition
software for reading printed documents. The investment consists of
approximately 99.96% ownership interest or KF1.499 at cost, and KF 699 net
book value at December 31, 1997 and 1996, respectively, which is accounted
for under the cost method and recorded in fixed assets (Shares in
subsidiaries).
Since January first 1997, EASY READER SA is a dormant company. EASY READER
products are marketed by MIMETICS. Against that, EASY READER receives from
MIMETICS a yearly compensation of KF 100.
NOTE 5: ACCRUED EXPENSES
Accrued expenses consist of the following:
<TABLE>
<CAPTION>
December 31,
1997 1996
<S> <C> <C>
KF KF
Accrued vacation and personal leave 252 267
Accrued restructuring expenses 0
Other 1.507 1.962
Accrued expenses 1.759 2.229
</TABLE>
F-10 (Continued)
<PAGE>
MIMETICS, SA.
NOTES TO FINANCIAL STATEMENTS
(In thousands, except per share or per unit data)
NOTE 6: INCOME TAXES
At December 31, 1997, the Company has net operating loss carryforwards of
approximately KF19.955 to offset against future French State income tax
purposes. These carryforwards start expiring in 1999 through 2002. An
amount of KF 7.680 (included in the KF 19.955) has no expiration date.
Current rate of corporation tax in France is now 41%.
At December 31, 1997, the Company did not record any deferred tax asset
position.
NOTE 7: COMMITMENTS
Leases
The present value of future minimum capital lease payments as of December 31,
1997 and future minimum lease payments under noncancelable operating leases
(with initial or remaining lease terms in excess of one year) are:
Operating leases (building)
Year ending December 31:
1998 210KF
1999 210KF
2000 and thereafter : 140KF -
Total minimum lease payments :560KF
Total rental expense for operating leases was KF298, and KF298 for fiscal
year 1997, and 1996 respectively.
Letters of Credit
The Company had no outstanding letters of credit at December 31, 1997 and
1996.
F-11 (Continued)
<PAGE>
MIMETICS, SA.
NOTES TO FINANCIAL STATEMENTS
(In thousands, except per share or per unit data)
NOTE 8: GEOGRAPHIC INFORMATION
Net product and other revenues, by geographic region, were as follows:
Year ended December 31,
1997 1996
France KF 5.507 KF 1.427
Export KF 1.205 KF 2.266
1997 sales include sales of Easyreader's products.
1996 do not
Easyreader sales in 1996 were
France: KF 3.315
Export: KF 710
NOTE 9: DIFFERENCE BETWEEN FRENCH AND U.S. GAAP
Under French GAAP, it is not compulsory to make a provision for indemnities
to employees on the day they retire. Such a provision, under U.S. GAAP would
amount to about KF 200. Pensions themselves are paid to retired employees by
specialized insurance companies. Other differences between French and U.S.
GAAP have a non material effect.
NOTE 10: OTHER
- Because of the cash position of Mimetics, support from the
shareholders might be needed to assure the continuation of operation;
- Because of the loss, as of December 31, 1995, of more than half
its capital stock, Mimetics must replenish its equity to a level at
least equal to half the capital stock by December 31, 1998;
- Since Easyreader (the dormant subsidiary of Mimetics) did not
bring its equity back to a level at least equal to half the capital
stock by December 31, 1995, any interested party may file in court
for the winding-up of this company.
F-12
<PAGE>
ADAPTIVE SOLUTIONS, INC.
Unaudited Pro Forma Consolidated
Condensed Financial Data
As of and for the year ended December 31, 1997
(In thousands, except per share data)
Adaptive Solutions, Inc., an Oregon corporation (the "Registrant"),
purchased all of the outstanding common shares of Mimetics S.A. ("Mimetics"),
a French company, (the "Acquisition")which develops and markets high
accuracy, high speed data entry recognition software for reading printed
documents, in a transaction dated March 2, 1998. Prior to the March 2, 1998
transaction, the Registrant had approximately a 4% ownership interest in
Mimetics. Additionally, the Registrant held $337 in Mimetics convertible
debentures bearing interest at 5% per annum. The consideration paid to
Mimetics shareholders for the outstanding common shares of Mimetics was
304,545 shares of the Registrant's common stock, and warrants to purchase
184,590 shares of the Registrant's Common Stock at $3.00 per share.
Registrant has agreed to register the shares of Common Stock.
The following unaudited pro forma consolidated condensed financial data
has been derived from the respective historical financial statements. The
unaudited pro forma consolidated condensed balance sheet financial data gives
effect to the Acquisition on a purchase basis as if it had been consummated
on December 31, 1997. The unaudited pro forma consolidated condensed
statement of operations financial data gives effect to the Acquisition on a
purchase basis as if it had been consummated on January 1, 1997.
In the opinion of management of the Registrant, all adjustments
necessary to present fairly such unaudited pro forma consolidated condensed
financial data have been made based on the terms and structure of the
Acquisition. These unaudited pro forma consolidated condensed financial data
are not necessarily indicative of what actual results would have been if the
Acquisition had occurred at the beginning of the respective periods nor do
they purport to indicate the results of future operations of the Registrant.
The unaudited pro forma consolidated condensed financial data should be read
in conjunction with the accompanying notes to the pro forma consolidated
condensed financial data and the historical financial statements of the
Registrant and Mimetics.
The adjustments to the unaudited pro forma consolidated condensed
financial data are preliminary and are subject to adjustment.
F-13
<PAGE>
ADAPTIVE SOLUTIONS, INC.
Pro forma Consolidated Condensed Balance Sheet Data
For the year ended December 31, 1997
(unaudited)
(In thousands)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
ASI Mimetics Adjustments References Consolidated
-------- -------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents 1,892 59 1,951
Restricted cash 160 160
Short-term investments 337 (337) C 0
Accounts receivable, net 915 195 1,110
Inventory, net 536 27 563
Prepaid expenses and other assets 72 37 109
-------- -------- ------------
TOTAL CURRENT ASSETS 3,912 318 3,893
-------- -------- ------------
FIXTURES AND EQUIPMENT, net 679 51 730
INTANGIBLE ASSETS 99 545 D 644
OTHER ASSETS 148 44 (140) C 52
-------- -------- ------------
4,838 413 5,319
-------- -------- ------------
-------- -------- ------------
CURRENT LIABILITIES:
Accounts payable 286 460 746
Accrued expenses 452 300 752
Current portion of capital lease obligations 254 254
Deferred revenue 183 183
Notes payable 376 (247) C 129
-------- -------- ------------
TOTAL CURRENT LIABILITIES 1,551 760 2,064
-------- -------- ------------
Long-term debt 1003 (337) C 666
Capital lease obligations, less
current portion 38 247 C 38
-------- -------- ------------
STOCKHOLDERS' EQUITY: 3,249 (1350) 1223 A,B,C,D
(140) C
(678) D 2,551
-------- -------- ------------
4,838 413 5,319
-------- -------- ------------
-------- -------- ------------
</TABLE>
F-14
<PAGE>
ADAPTIVE SOLUTIONS, INC.
Pro forma Consolidated Condensed Statement of Operations
For the year ended December 31, 1997
(In thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
ASI Mimetics Adjustments References Consolidated
-------- -------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Revenues
Net product Revenue 2,711 689 3,400
Research and development revenue 559 0 559
Service revenue 0 569 569
-------- -------- ------------
Total Revenues 3,270 1,258 4,528
Operating costs and expenses:
Cost of product revenue 765 103 868
Research and development 1,266 761 113 D 2,140
Sales and marketing 800 646 1,446
General and administrative 1,000 454 1,454
In-process research and development 216 0 216
Discontinued product lines 456 0 456
-------- -------- ------------
Total operating costs and expenses 4,503 1,964 6,580
Operating loss (1,233) (706) (2,052)
Other Income/(expense) 79 (53) 26
Loss before income taxes (1,154) (759) (2,026)
Income tax expense 0 0 0
Net loss (1,154) (759) (2,026)
Net loss per share
Basic and diluted (0.16) (0.28)
Shares used in calculating net loss per share
Basic and diluted 7,043 7,348
</TABLE>
F-15
<PAGE>
ADAPTIVE SOLUTIONS, INC.
Notes to Pro Forma Consolidated
Condensed Financial Data
(Unaudited)
(In thousands, except share data)
(A) The unaudited pro forma consolidated condensed balance sheet financial
data gives effect to the Acquisition on a purchase basis as if it had been
consummated on December 31, 1997. The unaudited pro forma consolidated
condensed statement of operations financial data gives effect to the
Acquisition on a purchase basis as if it had been consummated on
January 1, 1997.
(B) The Registrant paid the following consideration for the Acquisition:
304,545 shares of the Registrant's common stock valued at $286 and
184,590 Warrants to purchase the Registrant's Common valued at $55.
In addition, $65 of direct and incremental costs were incurred
directly related to the Acquisition and are shown as a pro forma
adjustment to accrued expenses and the purchase price.
(C) In August of 1996, the Registrant purchased a minority interest in
Mimetics for $140 and is shown as a pro forma adjustment to other
assets. Additionally in February of 1997, the Registrant purchased
$337 in Mimetics convertible debentures. The debentures were
partially financed with proceeds from a note payable from certain
unrelated outside investors in the amount of $247. In connection with
the acquisition the debentures were converted to common stock and the
note was paid.
(D) Amounts represent adjustments to the assets acquired and liabilities
assumed based on the allocation of the purchase price: charge related
to in-process research and development; purchased technology relating
to products currently in place; other intangible assets relating to
certain acquired patents; and goodwill related to the excess of the
purchase price over the fair value of the assets acquired. The
purchased technology, will be amortized over three years ratably and
the goodwill and patents will be amortized ratably over five and seven
years, respectively.
(E) The Registrant and the Mimetics estimate that, following the
Acquisition, additional one-time charges to operations will be
incurred associated with integrating the two businesses. However,
these integration costs cannot be currently estimated.
F-16
<PAGE>
ADAPTIVE SOLUTIONS, INC.
Notes to Pro Forma Consolidated
Condensed Financial Data, Continued
(Unaudited)
(In thousands, except share data)
(F) The following table reconciles the number of shares used in the pro forma
per share calculation to the number set forth in the Registrant's historical
statement of operations:
<TABLE>
<CAPTION>
Year Ended
December 31, 1997
-----------------
<S> <C>
Weighted average shares:
Historical - basic and diluted 7,043,320
Share issued 304,545
------------
Pro forma - basic and diluted 7,347,865
------------
------------
</TABLE>
F-17
<PAGE>
Consent of Independent Accountants
We consent to the incorporation by reference of our report dated May 12, 1998
on our audit of the Consolidated Balance Sheet, Consolidated Profit and Loss
Account and related Consolidated Statement of Cash Flows, and Statement of
Shareholders Equity and related schedules for each of the two years ended
December 31, 1997 and 1996, which report is included in this Current Report on
Form 8-K of Adaptive Solutions, Inc.
Neuilly-sur-Seine, May 15, 1998
----------------------------------------
BARBIER FRINAULT & AUTRES
ARTHUR ANDERSEN
Jean-Francois Ladurelle
