UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 8-K/A
AMENDMENT NO. 2 TO
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
------------------
Date of Report (Date of earliest event reported): FEBRUARY 28, 1995
-------------------
VISTA INFORMATION SOLUTIONS, INC.
(FORMERLY DATAMAP, INC.)
(Exact name of registrant as specified in its charter)
MINNESOTA 0-20312 41-1293754
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
5060 SHOREHAM PLACE, #300, SAN DIEGO, CALIFORNIA 92122
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (619) 450-6100
Item 2. Acquisition or Disposition of Assets.
On February 28, 1995, DataMap Acquisition Corp. ("Acquisition Corp."),
a wholly owned subsidiary of DataMap, Inc. ("DataMap") merged with and into
VISTA Environmental Information, Inc. ("VISTA") pursuant to an Agreement and
Plan of Merger (the "Merger Agreement") dated January 23, 1995, such that VISTA
became a wholly owned subsidiary of DataMap (the "Merger"). VISTA has been
engaged in the business of providing information relating to environmental
conditions on real estate across the United States, and will continue to conduct
such business in conjunction with DataMap's operations.
Under the terms of the Merger, the shareholders of VISTA received
2,643,694 shares of common stock and 646,141 shares of Series C preferred stock,
which are convertible into an aggregate of 6,461,410 shares of common stock.
Option and warrant holders of VISTA were issued options and warrants to purchase
approximately 1,500,000 common equivalent shares of DataMap, at prices ranging
from $0.04 to $2.51, in replacement of their VISTA options and warrants at
exercise prices equal to the pre-merger exercise price adjusted for the
conversion ratio.
The Merger was structured based on the companies having equal value.
Before the Merger, DataMap and VISTA had common and common equivalent shares,
consisting of convertible preferred stock, options and warrants, of
approximately 12,716,000 and 17,594,000 respectively. For purposes of the
conversion, only options and warrants for both companies with exercise prices
below an agreed upon price of $2 were considered. As a result, DataMap issued
approximately 10,600,000 common and common equivalent shares as described above,
resulting in the former VISTA shareholders owning 50% of the combined company.
However, as a condition to the closing of the Merger, DataMap was required to
obtain additional financing of at least $1,500,000. As a result, DataMap sold
112,280 shares of Series D Convertible Preferred Stock ("Series D Preferred")
for $1,500,000, convertible into 1,122,800 shares of common stock. Of the
112,280 shares of Series D Preferred sold, 93,563 were sold to DataMap's then
current preferred shareholders and 18,713 were sold to VISTA preferred
shareholders. Each share of Series D Preferred is convertible into 10 shares of
DataMap Common Stock, and has a liquidation preference of $13.36 per share. The
Series D Preferred has other rights and preferences similar to DataMap's Series
B Convertible Preferred Stock and the Series C Preferred except that the Series
D Preferred shareholders do not have the right to designate a director but
instead vote, on an as-if-converted basis, along with the holders of Common
Stock in the election of directors. Taking into account this transaction, the
DataMap shareholder group owned approximately 52% of the combined company. Due
to this voting control and other considerations, DataMap was determined to be
the accounting acquiror.
In connection with the Merger, Thomas R. Gay, the President and Chief
Executive Officer of VISTA, became the President and Chief Executive Officer of
DataMap, and Gary S. Mertz, the former President and Chief Executive Officer of
DataMap, was named Executive Vice President of Strategic Development for
DataMap. Also as part of the Merger, Martin Kahn, the Chairman of the Board of
VISTA, Mr. Gay and Patrick Rivelli were named to the Board of Directors of
DataMap, while Robert Provost and David Noble resigned from the Board.
As part of the Merger, certain shareholders of VISTA and DataMap
entered into a Shareholder Voting Agreement dated February 28, 1995 whereby the
shareholders agreed to vote in favor of a proposal to (i) amend the Articles of
Incorporation of DataMap to increase the authorized capital stock of DataMap and
to change the Company's name to VISTA Information Solutions, Inc.; (ii) elect
Gary Mertz, James Hovis, Robert Moeller, Steve Fisher (Series B Designee),
Thomas Gay, Martin Kahn (Series C Designee) and Patrick Rivelli (Series C
Designee) to the Board of Directors; and (iii) ratify the adoption of the 1995
DataMap Stock Incentive Plan providing for the grant of options to purchase up
to an aggregate of 2,000,000 shares of Common Stock of DataMap.
Item 7. Financial Statements and Exhibits.
a. Financial Statements of Business Acquired.
Financial statements of VISTA Environmental Information, Inc.
consisting of balance sheets as of December 31, 1994 and 1993, and the related
statements of operations, stockholders' equity (deficit) and cash flows for each
of the three years in the period ended December 31, 1994, and the accountants'
report thereon are included in this Current Report on Form 8-K on pages F-3 to
F-8 and page F-2, respectively.
b. Pro Forma Financial Information.
Unaudited condensed consolidated pro forma financial statements
consisting of a balance sheet as of December 31, 1994 and a statement of
operations for the year ended December 31, 1994 are included in this Current
Report on Form 8-K on pages F-14 to F-18.
c. Exhibits.
2.1 Agreement and Plan of Merger between DataMap, Inc., DataMap
Acquisition Corp. and VISTA Environmental Information, Inc.
dated January 23, 1995, without exhibits (incorporated by
reference to Exhibit 10.1 to the Company's Current Report on
Form 8-K dated January 23, 1995 (File No. 0-20312)).
4.1 Certificate of Designation of the Voting Powers, Preferences
and Rights, and Qualifications, Limitations and Restriction,
of Series C Convertible Preferred Stock (incorporated by
reference to Exhibit 4.1 to the Company's Current Report on
Form 8-K dated January 23, 1995 (File No. 0-20312)).
4.2 Certificate of Designation of the Voting Powers, Preferences
and Rights, and Qualifications, Limitations and Restriction,
of Series D Convertible Preferred Stock (incorporated by
reference to Exhibit 4.2 to the Company's Current Report on
Form 8-K dated January 23, 1995 (File No. 0-20312)).
23.1 Consent of Deloitte & Touche LLP (filed herewith
electronically).
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 thereunto duly authorized.
VISTA INFORMATION SOLUTIONS, INC.
(Registrant)
Dated: July 30, 1996. By: /s/ Thomas R. Gay
-----------------------------------
Thomas R. Gay
Chief Executive Officer
(Principal Executive Officer)
INDEX TO FINANCIAL STATEMENTS
Page
Independent Auditors' Report...........................................F-2
Balance Sheets of VISTA Environmental Information,
Inc. as of December 31, 1994 and 1993..................................F-3
Statements of Operations of VISTA Environmental
Information, Inc. for the years ended December 31, 1994,
1993 and 1992..........................................................F-5
Statements of Stockholders' Equity (Deficit) of
VISTA Environmental Information, Inc. for the years ended
December 31, 1994, 1993 and 1992.......................................F-6
Statements of Cash Flows of VISTA Environmental
Information, Inc. for the years ended December 31, 1994,
1993, and 1992.........................................................F-7
Notes to Financial Statements for VISTA Environmental
Information, Inc. for the years ended December 31, 1994,
1993, and 1992.........................................................F-8
Introduction to Pro Forma Financial Statements........................F-14
Pro Forma Balance Sheet as of December 31, 1994.......................F-15
Pro Forma Statement of Operations for the year ended
December 31, 1994.....................................................F-17
Notes to Pro Forma Financial Statements for DataMap, Inc.
for the year ended December 31, 1994..................................F-18
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders of
Vista Environmental Information, Inc.:
We have audited the accompanying balance sheets of Vista Environmental
Information, Inc. as of December 31, 1994 and 1993, and the related statements
of operations, stockholders' equity (deficit) and cash flows for each of the
three years in the period ended December 31, 1994. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Vista Environmental Information, Inc. as of
December 31, 1994 and 1993, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1994 in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company's excess of current liabilities over current
assets and the recurring losses from operations raise substantial doubt about
its ability to continue as a going concern. Management's plans concerning these
matters are also described in Note 1. The financial statements do no include any
adjustments that might result from the outcome of this uncertainty.
As discussed in Note 8 to the financial statements, effective February 27, 1995,
the Company was acquired by DataMap, Inc.
/s/ Deloitte & Touche LLP
San Diego, California
March 17, 1995
<TABLE>
<CAPTION>
VISTA ENVIRONMENTAL INFORMATION, INC.
BALANCE SHEETS
DECEMBER 31, 1994 AND 1993
ASSETS 1994 1993
---------- ----------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 12,072 $ 18,492
Trade accounts receivable, net of allowances for doubtful
accounts of $195,000 in 1994 and $150,000 in 1993 1,339,811 1,356,903
Prepaid expenses and other current assets 122,064 133,625
---------- ----------
Total current assets 1,473,947 1,509,020
EQUIPMENT, FURNITURE AND LEASEHOLD IMPROVEMENTS:
Computer equipment 561,946 547,807
Furniture and leasehold improvements 309,019 285,155
Capitalized leased equipment 977,576 811,987
---------- ----------
1,848,541 1,644,949
Less accumulated depreciation and amortization 1,065,956 650,472
---------- ----------
782,585 944,477
INTANGIBLE ASSETS:
Environmental database 1,102,363 956,843
Customer lists 216,732 216,732
---------- ----------
1,319,095 1,173,575
Less accumulated amortization 812,940 603,673
---------- ----------
506,155 569,902
DEPOSITS AND OTHER ASSETS 103,753 111,367
---------- ----------
TOTAL $2,893,440 $3,184,766
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) 1994 1993
----------- -----------
<S> <C> <C>
CURRENT LIABILITIES:
Note payable to bank $ 721,297 $ 587,356
Subordinated convertible notes 898,928
Accounts payable and accrued expenses 1,401,903 1,009,507
Deferred contract revenue 23,335 108,200
Current portion of long-term debt 228,407 194,825
----------- -----------
Total current liabilities 3,273,870 1,899,888
DEFERRED RENT CREDIT 82,352 91,664
LONG-TERM DEBT, less current portion 371,545 434,035
COMMITMENTS
STOCKHOLDERS' EQUITY (DEFICIT):
Capital stock, par value $.01 per share
Class A preferred stock:
8,221,821 shares authorized, 7,545,425 shares
outstanding at December 31, 1994 and 1993 75,454 75,454
Class B preferred stock:
6,778,179 shares authorized; 3,257,659 shares
outstanding at December 31, 1994 and 1993 32,577 32,577
Class A common stock:
27,600,000 shares authorized; 4,326,457 shares
outstanding at December 31, 1994 and 1993 43,264 43,264
Class B common Stock:
2,400,000 shares authorized; 8,334 and 0 shares
outstanding at December 31, 1994 and 1993 83
Paid-in capital 6,410,012 6,408,607
Accumulated deficit (7,395,717) (5,800,723)
----------- -----------
Total stockholders' equity (deficit) (834,327) 759,179
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT) $ 2,893,440 $ 3,184,766
=========== ===========
</TABLE>
VISTA ENVIRONMENTAL INFORMATION, INC.
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1994, 1993 AND 1992
1994 1993 1992
----------- ----------- -----------
REVENUE $ 7,353,349 $ 6,486,740 $ 4,755,275
COST OF REVENUE 2,659,128 2,485,565 1,933,750
----------- ----------- -----------
Gross profit 4,694,221 4,001,175 2,821,525
EXPENSES:
General and administrative 1,870,594 1,530,772 1,544,427
Merger related expenses 215,803 368,930
Selling and marketing 3,064,129 2,913,961 2,056,688
Finance and administration 254,065 273,086 289,505
Technical development 641,610 586,600 336,698
----------- ----------- -----------
Total expenses 6,046,201 5,304,419 4,596,248
----------- ----------- -----------
LOSS FROM OPERATIONS (1,351,980) (1,303,244) (1,774,723)
OTHER EXPENSE:
Interest 243,014 102,014 134,745
----------- ----------- -----------
NET LOSS $(1,594,994) $(1,405,258) $(1,909,468)
=========== =========== ===========
The accompanying notes are an integral part of these financial statements.
<TABLE>
<CAPTION>
VISTA ENVIRONMENTAL INFORMATION, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
CLASS A PREFERRED CLASS B PREFERRED CLASS A COMMON
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1992 4,981,677 $49,817
Sale of stock in private stock offering 84,873 $ 849 10,000 100
Shares issued through merger 6,078,748 $60,787 1,457 14
Conversion of long-term debt to equity 800,000 8,000 24,179 242
Sale of preferred stock 1,750,000 17,500
Adjusted to unearned compensation -
termination of options
Net loss
--------- ------- --------- ------- --------- --------
BALANCE, DECEMBER 31, 1992 6,878,748 68,787 1,859,052 18,591 4,993,134 49,931
Sale of stock in private stock offering 1,398,607 13,986
Exchange of Class A common stock for
Class A preferred stock 666,677 6,667 (666,677) (6,667)
--------- ------- --------- ------- --------- --------
BALANCE, DECEMBER 31, 1993 7,545,425 75,454 3,257,659 32,577 4,326,457 43,264
Stock options exercised
Issuance of stock purchase warrants
Net loss
--------- ------- --------- ------- --------- --------
BALANCE, DECEMBER 31, 1994 7,545,425 $75,454 3,257,659 $32,577 4,326,457 $43,264
========= ======= ========= ======= ========= =======
</TABLE>
(WIDE TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
UNEARNED
COMPENSATION-
CLASS B COMMON PAID-IN STOCK ACCUMULATED
SHARES AMOUNT CAPITAL OPTIONS DEFICIT TOTAL
------ ------ ------- ------- ------- -----
<S> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1992 $1,899,787 $(358,203) $(2,485,997) $ (894,596)
Sale of stock in private stock offering 103,924 104,873
Shares issued through merger 853,974 914,775
Conversion of long-term debt to equity 792,000 800,242
Sale of preferred stock 1,732,500 1,750,000
Adjusted to unearned compensation -
termination of options (358,203) 358,203
Net loss (1,909,468) (1,909,468)
----- ---- ----------- ---------- ----------- -----------
BALANCE, DECEMBER 31, 1992 5,023,982 -- (4,395,465) 765,826
Sale of stock in private stock offering 1,384,625 1,398,611
Exchange of Class A common stock for
Class A preferred stock
Net loss (1,405,258) (1,405,258)
----- ---- ----------- ---------- ----------- -----------
BALANCE, DECEMBER 31, 1993 6,408,607 -- (5,800,723) 759,179
Stock options exercised 8,334 $83 333 416
Issuance of stock purchase warrants 1,072 1,072
Net loss (1,594,994) (1,594,994)
----- ---- ----------- ---------- ----------- -----------
BALANCE, DECEMBER 31, 1994 8,334 $ 83 $6,410,012 -- $(7,395,717) $ (834,327)
===== ==== ========== ========== ============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<TABLE>
<CAPTION>
VISTA ENVIRONMENTAL INFORMATION, INC.
STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1994, 1993 AND 1992
1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net loss $(1,594,994) $(1,405,258) $(1,909,468)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 624,751 548,231 471,431
Changes in assets and liabilities:
Trade accounts receivable 17,092 (206,208) (455,781)
Prepaid expenses and other current assets 11,561 (48,721) 83,166
Accounts payable and accrued expenses 392,396 159,842 254,500
Deferred contract revenue (84,865) 45,440 52,815
Deferred rent credit (9,312) (45,022) 72,031
Deposits and other assets (19,386) (87,748) (5,826)
----------- ----------- -----------
Net cash used in operating activities (662,757) (1,039,444) (1,437,132)
----------- ----------- -----------
INVESTING ACTIVITIES:
Expenditures for equipment, furniture and leasehold
improvements (22,647) (163,266) (112,700)
Expenditures for intangible assets (145,520) (244,081) (122,554)
----------- ----------- -----------
Net cash used in investing activities (168,167) (407,347) (235,254)
----------- ----------- -----------
FINANCING ACTIVITIES:
Proceeds from subordinated convertible notes 898,928
Borrowings under long-term debt 106,637 144,951
Payments on long-term debt (209,853) (179,655) (291,383)
Cash proceeds from sales of stock and warrants 1,488 1,398,611 1,854,873
Cash acquired through merger 22,486
Payment on note payable (7,018) (550,000)
Proceeds from note payable 133,941 594,374
----------- ----------- -----------
Net cash provided by financing activities 824,504 1,318,575 1,775,301
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH (6,420) (128,216) 102,915
CASH, BEGINNING OF YEAR 18,492 146,708 43,793
----------- ----------- -----------
CASH, END OF YEAR $ 12,072 $ 18,492 $ 146,708
=========== =========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the year for interest $ 181,582 $ 138,859 $ 115,074
=========== =========== ===========
SUPPLEMENTAL DISCLOSURES OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Acquisition of equipment through capital leases $ 180,945 $ 478,305 $ --
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
VISTA ENVIRONMENTAL INFORMATION, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. As shown
in the financial statements, the Company's current liabilities exceeded
its current assets by $1,799,923 as of December 31, 1994, and during
the years ended December 31, 1994, 1993 and 1992, the Company incurred
net losses of $1,594,994, $1,405,258 and $1,909,468 respectively. These
factors among others may indicate that the Company will be unable to
continue as a going concern for a reasonable period of time.
The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the
amounts and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern. As of
December 31, 1994, as described in Note 3, the Company is not in
compliance with provisions of its note payable agreement and the
balance of such note, $721,297, has been classified as a current
liability. The Company's continuation as a going concern is dependent
upon its ability to generate sufficient cash flow to meet its
obligations on a timely basis, to comply with the terms and covenants
of its financing agreements, to obtain additional financing or
refinancing as may be required, and ultimately to attain profitable
operations. Management is continuing its efforts to obtain additional
financing so that the Company can meet its obligations and sustain
operations.
Description of Business - Vista Environmental Information, Inc.
("Vista") is engaged in selling environmental data reports compiled
form various public sources. During 1992, Vista merged with
Environmental Audit, Inc. in a business combination accounted for as a
purchase (see Note 2). Subsequent to December 31, 1994, Vista became a
wholly owned subsidiary of DataMap, Inc. in a business combination
accounted for as a purchase (see Note 8).
Recognition of Revenue - The Company recognizes revenue from the sales
of environmental data reports when the reports are shipped or
transmitted to the customer.
Concentrations of Credit Risk - Financial instruments that potentially
subject the company to significant concentrations of credit risk
consist principally of cash and trade accounts receivable.
Concentrations of credit risk with respect to trade accounts receivable
are generally diversified due to the large number of entities
comprising the Company's customer base and their dispersion across many
different industries and geographies. The Company's customer base
consists primarily of the industries of banking, legal and
environmental management and consulting, commercial real estate,
investment, insurance, and federal agencies. The Company performs
on-going credit evaluations of its customers' financial condition as
considered necessary.
Equipment, Furniture and Leasehold Improvements - Furniture and
equipment are recorded at cost. Depreciation is calculated using the
straight-lien method over estimated useful lives of 5 to 7 years.
Capitalized leased equipment and leasehold improvements are depreciated
and amortized over the shorter of the estimated useful life or the
lease term. Expenditures for maintenance and repairs are charged to
operations as incurred, whereas major betterments are capitalized.
Intangible Assets - Intangible assets are recorded at cost and are
amortized using the straight-line method over the estimated useful
lives of the assets, as follows:
Environmental database 5 years
Customer lists 1-5 years
The Company assesses the recoverability of such intangible assets on a
periodic basis.
Reclassifications - Certain reclassifications have been made to the
1993 financial statement(s) in order for them to conform to the 1994
financial statements.
2. ACQUISITION
On March 31, 1992, Vista acquired all of the outstanding common and
preferred stock of Environmental Audit, Inc. ("EAI") in exchange for
1,457 shares of common stock and 6,078,748 shares of preferred stock of
Vista. The merger has been accounted for under the purchase method of
accounting, and, accordingly, the operation results of EAI have been
included in the operating results of Vista since the date of
acquisition. The net assets of EAI have been reflected at their fair
values at the date of acquisition, as follows:
Trade accounts receivable $ 369,751
Equipment, furniture and leasehold improvements 472,059
Intangible assets - environmental database 414,624
Long-term debt - capital lease obligations (264,217)
Other, net (77,442)
---------
Value of shares issued through merger $ 914,775
=========
The following summary, prepared on a pro forma basis for the year ended
December 31, 1992, combines the results of operations as if the merger
had occurred on January 1, 1992:
PRO FORMA
---------
(UNAUDITED)
Revenues $ 5,523,000
Net loss $ 2,037,000
The pro forma results are not necessarily indicative of what actually
would have occurred if the merger had occurred on January 1, 1992. In
addition, they are not intended to be a projection of future results
and do not reflect any synergies to be achieved from combined
operations.
3. NOTE PAYABLE TO BANK
The note payable to bank as of December 31, 1994 and 1993 consists of a
bank line of credit, which is collateralized by all assets of the
Company and has an expiration date of April 1995. The line of credit
agreement provides for borrowings of up to the lesser of 75% of
acceptable accounts receivable or $1,000,000 (which may be increased to
$2,000,000 if certain financial covenants are met). Outstanding amounts
bear interest at prime plus 2.5% (11% at December 31, 1994). The
agreement contains certain restrictive covenants, including a
requirement to maintain tangible net worth of not less than $1,100,000
and to attain specified levels of profitability. As of December 31,
1994, the Company was in violation of certain of the restrictive
covenants. The entire balance outstanding, which totals $721,297 as of
December 31, 1994, has been classified as current in the accompanying
balance sheet.
In connection with obtaining this credit line, certain shareholders
provided a $900,000 stand-by credit facility due January 15, 1995,
including warrants to purchase 108,000 shares of Class B preferred
stock at $1.00 per share. As of December 31, 1994, the facility had
been used in its entirety. A portion of the proceeds was allocated to
the issued warrants. Subsequent to December 31, 1994, the outstanding
balance was extended to January 15, 1996 with additional warrants being
issued for the purchase of 90,000 shares of Class B preferred stock at
$1.00 per share. Interest on the outstanding balance accrues at prime
plus 2.5% and is due and payable at the extended due date of the note.
4. LONG-TERM DEBT
Long-term debt at December 31, 1994 and 1993 consists primarily of
capitalized lease obligations of $592,083 and $613,184, respectively.
These obligations bear interest at rates which range from 11.5% to
31.8% and are due during various dates from March 1994 to June 1999.
During 1993, the Company entered into an agreement which provided for a
lease line of up to $500,000 in borrowings, the use of which is limited
to the purchase of office furniture and equipment. At December 31,
1993, the entire lease line was outstanding. In connection with this
lease agreement the lessor was granted warrants to purchase 60,000
shares of Class B preferred stock at $1.00 per share. During 1994, this
lease line was increase to $1,000,000. Additional warrants were granted
to purchase 40,000 shares of Class B preferred stock at $1.50 per
share. As of December 31, 1994, $382,128 remains available for use
under the lease line.
Annual principal payments applicable to long-term debt for the years
subsequent to December 31, 1994 are as follows:
YEAR ENDING DECEMBER 31,
1995 $319,060
1996 300,041
1997 113,011
1998 9,619
1999 2,228
--------
$732,959
Less amount representing interest 144,007
Less current portion 228,407
--------
$371,545
========
5. INCOME TAXES
As of January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109 (FAS 109), "Accounting for Income Taxes."
The adoption did not have a material affect on the Company's financial
statements. The adoption of FAS 109 changed the Company's method of
accounting for income taxes from the deferred method required by
Accounting Principles Board Opinion No. 11, "Accounting for Income
Taxes," to an asset and liability approach. The asset and liability
approach requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of temporary
differences between the carrying amounts and the tax bases of assets
and liabilities using enacted tax rates for the years in which the
differences are expected to reverse.
Deferred tax assets (liabilities) as of December 31, 1994 and 1993
consist of the following:
1994 1993
----------- -----------
Net operating losses $ 2,497,368 $ 1,888,053
Accrued vacation 44,894 32,298
Accrued bonuses 17,499 24,532
Accrued commissions 6,104 9,809
Deferred rent 35,788 39,691
Allowance for doubtful accounts 84,435 64,950
Property 22,936 (1,612)
Intangible assets 152,763 193,777
State taxes (127,049) (102,053)
----------- -----------
Deferred tax asset before
valuation allowance 2,734,738 2,149,445
Valuation allowance (2,734,738) (2,149,445)
----------- -----------
Net deferred tax asset $ 0 $ 0
=========== ===========
Valuation allowances were established to fully offset deferred tax
assets as of December 31, 1994 and 1993, as based on available
evidence, it is more likely than not that such assets will not be
realized.
As of December 31, 1994, the Company has net operating loss
carryforwards for Federal income tax purposes as follows:
EXPIRATION DATE
December 31, 2005 $ 83,000
December 31, 2006 2,147,000
December 31, 2007 1,118,000
December 31, 2008 1,537,000
December 31, 2009 1,576,000
----------
$6,461,000
==========
The Tax Reform Act of 1986 and the California Conformity Act of 1987
impose restrictions on utilization of net operating losses (NOLs) in
the event of an "ownership change" as defined by Section 382 of the
Internal Revenue Code of 1986. The pre-merger NOLs subject to Section
382 limitation total approximately $1,800,000. The amount of such
pre-merger NOLs available for use each year is substantially limited.
In addition, changes in ownership may further limit the availability of
the use of post-merger NOLs. (See Note 8.)
6. COMMITMENTS AND CONTINGENCIES
Operating Lease Commitments - During 1992, the Company's primary office
lease, effective from May 1992 through October 1996, provided for
deferral of certain rent payments through May 1993. In December 1992,
the Company entered into a new primary office lease. Under the new
lease, which expires December 1997, the Company is leasing the same
space covered by the original lease as well as additional space.
Levelized monthly charges to expense in excess of amounts paid related
to these leases have been reflected as a deferred rent credit at
December 31, 1994 and 1993. Office rent expense totalled $410,050,
$265,949 and $137,852 during the years ended December 31, 1994, 1993
and 1992, respectively.
Minimum lease commitments under non-cancelable operating leases having
initial terms of one year or more as of December 31, 1994 are as
follows:
Year Ending December 31,
1995 $ 396,164
1996 330,987
1997 292,938
-----------
$1,020,089
==========
Litigation and Claims - The Company is a defendant in legal actions
arising from activities conducted in the normal course of business.
Management, after consultation with legal counsel, believes that the
ultimate liability, if any, arising from such actions will not have a
material adverse effect on the Company's financial position or results
of operations.
7. CAPITAL STOCK
Classes of Stock - As of December 31, 1994, the Company had four
authorized classes of stock with the following significant rights and
privileges:
* Class A Common - Voting, no conversion privileges or
liquidation preferences.
* Class B Common - Non-voting, no conversion privileges or
liquidation preferences.
* Class A Preferred - Voting, non-cumulative as to dividends,
convertible to Class A common with liquidation rights in
preference to all common shares. At December 31, 1994 such
preference amounted to $7,545,425.
* Class B Preferred - Voting, non-cumulative as to dividends,
convertible to Class A common with liquidation preferences
prior to all other classes of stock in an amount equal to
Class A Preferred plus 6% per annum. At December 31, 1994 such
preference amounted to $3,257,659 with an equal priority to
the Class A Preferred shares plus a 6% cumulative return.
Pursuant to terms of the merger agreement with EAI (Note 2), certain
common stockholders of the Company were given the option to exchange
their shares of Class A common stock for an equal number of shares of
Class A preferred stock. During 1993, 666,677 shares of such stock were
exchanged.
Stock Options - Through the date of the acquisition of EAI, the Company
had in place a stock option plan which provided for the granting of
options to purchase Class B common stock at prices less than the fair
market value of the shares at the date of grant. The resulting unearned
compensation was included as a separate component of stockholders'
equity, and had been amortized to compensation expense over the vesting
periods of the options. This plan was eliminated effective with the
merger, and all outstanding options of the Company and EAI were
canceled. Upon termination of the old plan during 1992, the unamortized
unearned compensation balance of $358,203 was reversed, and a
corresponding decrease in paid-in capital was recorded.
In December 1992, the Company adopted a new stock option plan. Under
the new plan, options to purchase 2,400,000 shares of Class B common
stock were authorized to be granted with exercise prices which
approximate fair market value as determined by the Board of Directors.
Options are exercisable no more than ten years from the date of grant.
Activity in the plans for the years ended December 31, 1994, 1993 and
1992 are summarized as follows:
<TABLE>
<CAPTION>
Shares Options Outstanding
Available -------------------
For Grant Shares Option Price
<S> <C> <C> <C> <C>
Balance at December 1, 1992
(date of plan adoption) 2,400,000
Granted (1,851,603) 1,851,603 $.025-.050
---------- -----------
Balance at December 31, 1992 548,397 1,851,603 .025-.050
Granted (503,000) 503,000 .050
---------- ---------- ---------
Balance at December 31, 1993 45,397 2,354,603 $.025-.050
Granted (140,000) 140,000 .050
---------- ---------- ----------
Exercised (8,334) .05
Expired (61,666) .05
---------- ----------
Balance at December 31, 1994 (94,603) 2,424,603 $.025-.050
========== ========== ==========
</TABLE>
As of December 31, 1994, options granted exceeded options authorized by
94,603. Options for 1,873,727 shares were exercisable as of December
31, 1994.
Warrants - As of December 31, 1994, the Company had warrants
outstanding to purchase 47,730 and 173,931 shares of Class A Preferred
Stock and Class B Preferred Stock at $1.00 per share. Additional
warrants were outstanding to purchase 40,000 shares of Class B
preferred stock at $1.50 per share.
8. SUBSEQUENT EVENT
Subsequent to December 31, 1994, the Company merged with DataMap
Acquisition Corp., a wholly-owned subsidiary of DataMap, Inc.
("DataMap") of Minneapolis, Minnesota, a publicly traded company. As a
result of the merger, which was accounted for as a purchase by DataMap,
each share of Class A and B common stock of the Company was exchanged
for approximately .6 shares of DataMap common stock. Each share of
Class A and Class B preferred stock of the Company has been exchanged
for approximately .06 shares of DataMap Class C preferred stock.
Subject to the merger, each share of DataMap Class C preferred stock
will be convertible into 10 shares of DataMap common stock. Within 90
days of the close of the merger, DataMap is to register up to 3.5
million shares of common stock. Class C preferred stock issued in the
merger is subject to certain registration rights, exercisable after
September 15, 1995.
PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma balance sheet and statements of
operations of DataMap, Inc. ("DataMap") and VISTA Environmental Information,
Inc. ("VISTA") (collectively, "the Pro Forma Statements") were prepared to
illustrate the estimated effects of the merger by and among DataMap Acquisition
Corp., a wholly owned subsidiary of DataMap, and VISTA that occurred on February
28, 1995. As a result of the merger, VISTA became a wholly owned subsidiary of
DataMap. The acquisition has been accounted for as a purchase, and accordingly,
the operating results of VISTA will be included in the operating results of
Company from the date of acquisition. The pro forma statement of operations
reflect the recurring items which are directly attributable to the merger,
primarily amortization of intangible assets. The Pro Forma Statements do not
purport to represent what the companies' financial position or results of
operations would have been if the acquisition had occurred on the date or at the
beginning of the periods indicated or to project the companies' financial
position or results of operations for any future date or period.
The pro forma adjustments are based upon available information and upon
certain assumptions that DataMap believes are reasonable in the circumstances.
The Pro Forma Statements and accompanying notes should be read in conjunction
with the respective historical financial statements of DataMap and VISTA
including the notes thereto.
<TABLE>
<CAPTION>
DATAMAP, INC.
CONDENSED CONSOLIDATED
PRO FORMA BALANCE SHEET (UNAUDITED)
AS OF DECEMBER 31, 1994
(IN THOUSANDS)
VISTA
Environmental
DataMap, Inc. Information, Inc. Adjustments Pro Forma
------------- ----------------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and Cash Equivalents $223,913 $12,072 $ 235,985
Trade Accounts receivable,
less allowance for
doubtful accounts 97,228 1,339,811 1,437,039
Prepaid expenses and other
current expenses 72,617 122,064 194,681
---------- ------- -------
Total current assets 393,758 1,473,947 1,867,705
Equipment and Software, at cost 1,992,256 1,848,541 $(1,065,956)(b) 2,774,841
Less accumulated depreciation
and amortization (1,121,679) (1,065,956) 1,065,956 (b) (1,121,679)
----------- ----------- --------- -----------
Net equipment and software 870,577 782,585 -- 1,653,162
Intangible assets:
Environmental database and lists 1,319,095 (812,940)(b) 506,155
Less accumulated amortization (812,940) 812,940 (b) --
----------- ------- --------
Net intangible assets 506,155 -- 506,155
Valuation Writeup-Purchase 11,600,000 (d) 11,600,000
Deposits and other assets 130,753 130,753
---------- ---------- ---------- --------
TOTAL ASSETS $1,264,335 $2,893,440 $11,600,000 $15,757,775
========== ========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable to bank $ 721,297 $721,297
Subordinated convertible Notes 898,928 898,928
Trade Accounts payable 229,036 1,401,903 1,630,939
Accrued Development Costs 487,500 487,500
Accrued compensation and employee benefits 55,286 55,286
Current maturities of long-term obligations 4,386 228,407 232,793
Deferred contract revenue 23,335 23,335
Other current liabilities 63,102 525,863 (b) 478,775
------ ------ ------- -------
Total current liabilities 839,310 3,273,870 525,863 4,528,853
Deferred Rent Credit 82,352 82,352
Long-term debt obligations,
less current maturities 7,146 371,545 378,691
------- ------- ----------- -------
Total Liabilities $846,456 $3,727,767 $415,673 $4,989,896
</TABLE>
<TABLE>
<CAPTION>
DATAMAP, INC.
CONDENSED CONSOLIDATED
PRO FORMA BALANCE SHEET (UNAUDITED)
AS OF DECEMBER 31, 1994
(IN THOUSANDS)
VISTA
Environmental
DataMap, Inc. Information, Inc. Adjustments Pro Forma
------------- ----------------- ----------- ---------
<S> <C> <C> <C> <C>
STOCKHOLDERS' EQUITY
Preferred Stock, Series A,
Cumulative Convertible, par value $0.01;
redemption value $0, authorized 500,000
shares; 0 shares issued and outstanding,
respectively
Preferred Stock, Series B Convertible,
par value $.01; liquidation value $3,000,000
authorized 200,000 shares; 200,000 shares
issued and outstanding 2,000 2,000
Preferred Stock, Series C Convertible,
par value $.01; authorized 646,141 shares;
646,141 shares issued and outstanding 6,461 (d) 6,461
Common Stock, par value $.01; authorized
19,300,000 shares issued and outstanding
8,322,229 and 7,891,567 shares, respectively 83,222 26,436 (d) 109,658
Class A Preferred Stock: 8,221,821 shares
authorized; 7,545,425 shares outstanding 75,454 (75,454)(a) --
Class B Preferred Stock: 6,778,179 shares
authorized; 3,257,659 shares outstanding 32,577 (32,577)(a) --
Class A Common Stock: 27,600,000 shares
authorized; 4,326,457 shares outstanding 43,264 (43,264)(a) --
Class B Common Stock: 2,400,000 shares
authorized; 8,334 outstanding 83 (83)(a) --
Additional Paid-In Capital 14,502,583 6,410,012 (6,410,012)(a) 24,819,686
10,317,103 (d)
Accumulated Deficit (14,169,926) (7,395,717) 7,395,717 (a) (14,169,926)
------------ ----------- --------- ------------
Total Stockholders' Equity (Deficit) 417,879 (834,327) 11,184,327 10,767,879
---------- ----------- ---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $1,264,335 $2,893,440 $ 6,580,000 $15,757,775
========== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
DATAMAP, INC.
CONDENSED CONSOLIDATED
PRO FORMA STATEMENT OF OPERATIONS (UNAUDITED)
AS OF DECEMBER 31, 1994
(IN THOUSANDS)
VISTA
Environmental
DataMap, Inc. Information, Inc. Adjustments Pro Forma
------------- ----------------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues $943,209 $7,353,349 $8,296,558
Cost of revenues 791,283 2,659,128 3,450,411
------- --------- ----------
Gross margin 151,926 4,694,221 4,846,147
------- --------- ---------
Operating expenses:
Selling, general, and administrative 2,233,724 4,961,965 7,195,689
Research and development 1,418,652 641,610 2,060,262
Depreciation and amortization 167,171 442,626 609,797
Amortization of Valuation Writeup 5,520,000 (c) 5,520,000
------- ------ --------- ---------
Total operating expenses 3,819,547 6,046,201 5,520,000 15,385,748
--------- --------- --------- ----------
Loss from operations (3,667,621) (1,351,980) (5,520,000) (10,539,601)
Other income (expense):
Interest income 56,179 56,179
Interest expense (31,256) 243,014 (274,270)
Other income 60,000 60,000
------ ------ ---------- -------
Net Loss ($3,582,698) ($1,594,994) ($5,520,000) ($10,697,692)
============ ============ ============ ============
Net loss per share ($0.44) ($0.11)
Pro forma net loss per share ($1.00)
Pro forma weighted average common
shares outstanding 10,866,000
Common shares outstanding 8,222,306 2,643,694
</TABLE>
DATAMAP, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
DECEMBER 31, 1994
1. BASIS OF PRESENTATION
On February 28, 1995, DataMap Acquisition Corp., a wholly owned
subsidiary of DataMap, Inc. ("DataMap") merged with and into VISTA
Environmental Information, Inc. ("VISTA") such that VISTA became a
wholly owned subsidiary of DataMap. Under the terms of the Agreement
and Plan of Merger, the Shareholders of VISTA received 2,643,694 shares
of common stock and 646,141 shares of Series C preferred stock, which
are convertible into an aggregate of 6,461,410 shares of the Company's
common stock. The pro forma statement of operations reflect the
recurring items which are directly attributable to the merger,
primarily amortization of intangible assets. The Pro Forma Statements
do not purport to represent what the companies' financial position or
results of operations would have been if the acquisition had occurred
on the date or at the beginning of the periods indicated or to project
the companies' financial position or results of operations for any
future date or period.
2. DETERMINATION AND ALLOCATION OF PURCHASE PRICE
The purchase price for VISTA was determined based on the Market Value
of the Shares issued (including options assumed) in exchange for all
the Shares of VISTA and the book value of liabilities in excess of book
value of assets assumed in the acquisition.
Book value of liabilities in excess of book
value of assets assumed in the acquisition $ 1,123,077
Market value of stock issued 10,097,753
Fair value of assets acquired 11,653,730
The Market Value of the Shares issued was determined by applying a
private placement discount to the average trading price of the stock on
the date of the merger.
The purchase price will be allocated between the identifiable assets
and liabilities based on fair values. In addition to the historical
assets and liabilities of VISTA, the purchase price will be allocated
to intangible assets which include environmental databases, production
technologies and the customer list.
3. PRO FORMA ADJUSTMENTS
(a) To eliminate VISTA's historical equity as of December 31,
1994.
(b) To eliminate VISTA's historical accumulated depreciation.
(c) Amortization of intangibles in connection with the VISTA
merger.
(d) To provide for the DataMap equity issued in connection with
the merger.
INDEX TO EXHIBITS
Item No. Exhibit Method of Filing
2.1 Agreement and Plan of Merger between
DataMap, Inc., DataMap Acquisition Corp. and
VISTA Environmental Information, Inc. dated
January 23, 1995, without exhibits......... Incorporated by reference to
Exhibit 10.1 to the Company's
Current Report on Form 8-K
dated January 23, 1995 (File
No. 0-20312).
4.1 Certificate of Designation of the Voting
Powers, Preferences and Rights, and
Qualifications, Limitations and
Restriction, of Series C Convertible
Preferred Stock............................ Incorporated by reference to
Exhibit 4.1 to the Company's
Current Report on Form 8-K
dated January 23, 1995 (File
No. 0-20312).
4.2 Certificate of Designation of the Voting
Powers, Preferences and Rights, and
Qualifications, Limitations and
Restriction, of Series D Convertible
Preferred Stock............................ Incorporated by reference to
Exhibit 4.2 to the Company's
Current Report on Form 8-K
dated January 23, 1995 (File
No. 0-20312).
23.1 Consent of Deloitte & Touche L.L.P......... Filed herewith electronically
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Amendment No. 2 To Current Report of Vista
Information Solutions, Inc. on Form 8-K/A of our report dated March 17, 1995,
which expresses an unqualified opinion on the financial statements and includes
an explanatory paragraph relating to substantial doubt about Vista Environmental
Information, Inc.'s ability to continue as a going concern.
/s/ Deloitte & Touche L.L.P.
San Diego, California
August 1, 1996
