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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________ to __________
Commission File Number 0-23152
@POS.com, Inc.
(Name of small business issuer in its charter)
DELAWARE 33-0253408
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3051 NORTH FIRST STREET, SAN JOSE, CALIFORNIA 95134
___________________________________________________
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (408) 468-5400
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.001 par value
Common Stock Purchase Warrants
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will 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-KSB
or any amendment to this Form 10-KSB. [ ]
Issuer's revenues for its most recent fiscal year: $8,099,524
The aggregate market value of the common stock held by non-affiliates computed
based on the average bid and asked closing price of the Registrant's Common
Stock on August 30, 2000 was approximately $6,224,000. As of August 30, 2000,
there were approximately 4,583,000 shares of the Registrant's common stock, par
value $.001 per share, outstanding.
Documents incorporated by reference (to the extent indicated herein): Items 9,
10, 11 and 12 of Part III incorporated by reference information from
registrant's Proxy Statement to be filed with the Securities and Exchange
Commission in connection with the solicitation of proxies for the registrant's
2000 Annual Meeting of Stockholders to be held December 8, 2000.
Transitional Small Business Disclosure Format [ ] Yes [x] No
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PART I
THIS ANNUAL REPORT ON FORM 10-KSB AND THE DOCUMENTS INCORPORATED HEREIN BY
REFERENCE CONTAIN FORWARD-LOOKING STATEMENTS THAT HAVE BEEN MADE PURSUANT TO THE
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH FORWARD
LOOKING STATEMENTS ARE BASED ON CURRENT EXPECTATIONS, ESTIMATES AND PROJECTIONS
ABOUT @POS.COM'S INDUSTRY, MANAGEMENT'S BELIEFS AND CERTAIN ASSUMPTIONS MADE BY
@POS.COM'S MANAGEMENT. WORDS SUCH AS "ANTICIPATES," "EXPECTS," "INTENDS,"
"PLANS," "BELIEVES," "SEEKS," "ESTIMATES," OR VARIATIONS OF SUCH WORDS AND
SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS.
THESE STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND ARE SUBJECT TO
CERTAIN RISKS, UNCERTAINTIES AND ASSUMPTIONS THAT ARE DIFFICULT TO PREDICT;
THEREFORE, ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED OR
PROJECTED IN ANY SUCH FORWARD-LOOKING STATEMENTS. SUCH RISKS AND UNCERTAINTIES
INCLUDE, BUT ARE NOT LIMITED TO, THOSE RISKS DISCUSSED BELOW, THOSE NOTED IN THE
DOCUMENTS INCORPORATED HEREIN BY REFERENCE, AS WELL AS IN THE EXTENT TO WHICH
THE POS DEVICE MARKET ACCEPTS OUR PRODUCTS, OUR ABILITY TO DEVELOP NEW PRODUCTS
IN LIGHT OF TECHNOLOGICAL ADVANCEMENTS IN THE INDUSTRY, OUR DEPENDENCE ON LARGE
CUSTOMERS AND COMPONENT MANUFACTURERS AND SUPPLIERS, UNCERTAINTIES ASSOCIATED
WITH CHANGES IN PATENT LAWS, AND THE RISKS SET FORTH BELOW UNDER ITEM 6,
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS - FACTORS THAT MAY AFFECT THE COMPANY'S BUSINESS, OPERATING RESULTS
AND FINANCIAL CONDITION."
PARTICULAR ATTENTION SHOULD BE PAID TO THE CAUTIONARY LANGUAGE IN THE SECTIONS
ENTITLED "BUSINESS" AND "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS." THESE FORWARD-LOOKING STATEMENTS SPEAK
ONLY AS OF THE DATE HEREOF. THE COMPANY EXPRESSLY DISCLAIMS ANY OBLIGATION OR
UNDERTAKING TO RELEASE PUBLICLY ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING
STATEMENTS CONTAINED HEREIN TO REFLECT ANY CHANGE IN THE COMPANY'S EXPECTATIONS
WITH REGARD THERETO, OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES IN
WHICH ANY SUCH STATEMENT IS BASED. HOWEVER, READERS SHOULD CAREFULLY REVIEW THE
RISK FACTORS SET FORTH IN OTHER REPORTS OR DOCUMENTS THE COMPANY FILES FROM TIME
TO TIME WITH THE SECURITIES AND EXCHANGE COMMISSION, PARTICULARLY THE QUARTERLY
REPORTS ON FORM 10-QSB AND ANY CURRENT REPORTS ON FORM 8-K.
ITEM 1. BUSINESS
BUSINESS DEVELOPMENT
MobiNetix Systems, Inc., a Delaware corporation, was incorporated in 1992 and,
effective June 29, 1999, changed its name to @POS.com, Inc. ("@POS.com" or "the
Company"). The Company has developed technologies that allow merchants to
web-enable the point-of-sale ("POS") environment. By web-enabling POS
transaction terminals, the Company's customers can or expect to be able to run
advertisements, promotions and surveys at the POS, retrieve receipts via a
personal computer utilizing a consumer-focused web-site and provide other
one-to-one marketing services. The Company intends to further develop this
technology to allow merchants to create and maintain web-based relationships
with customers. The Company changed its name to @POS.com, Inc., in order to
establish a brand image that is consistent with its business strategy and
overall corporate re-branding and marketing strategies.
The Company's wholly owned subsidiary, PenWare, Inc. ("PenWare") was
incorporated in 1983. PenWare previously developed, sold and licensed products
such as the PenWare 1100, the PenWare 1500 signature capture device and the
PenWare 3100, an interactive point-of-transaction terminal for paperless
environments. This activity has now become the primary activity of @pos.com.
In January 1999, the Company established MobiNetix Systems (Pvt.) Ltd, a then
100% owned software research and development center in Sri Lanka, in an effort
to reduce research and development expenses and use human resources available in
software development in the Asian Pacific countries.
In January 2000, the Company split into two business entities and announced the
formation of a wholly owned subsidiary, ReceiptCity.com, Inc. ("ReceiptCity").
The strategic spin-off allows ReceiptCity to focus on its own business model and
product development, and establish a different customer base, as well as
separate funding. @POS.com continues to advance
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its POS technology in web-enabling the retailer's transaction process and
enhancing the customer's shopping experience. ReceiptCity provides merchants and
consumers with a Web portal for secured electronic receipt storage and retrieval
and presents personalized e-messages online and at the POS.
Upon the completion of the separation, @POS.com transferred approximately 10% of
its tangible assets, 100% of MobiNetix Systems (Pvt.) Ltd., and some
intellectual property, including 12 patents, to ReceiptCity. Employee resources
were also split between the two companies.
As of June 30, 2000, @POS.com owned approximately 86% of ReceiptCity's Common
Stock. Subsequent to June 30, 2000, ReceiptCity issued Series B Convertible
Preferred Stock in a private offering reducing @POS.com's ownership to
approximately 46% (31% after reflecting the exercise of all options and
warrants). See Note 11 Subsequent Event to the Financial Statements.
BUSINESS OF THE COMPANY
PRODUCTS AND SERVICES: The Company's product family includes the iPOS TC, a
web-based transaction-processing terminal with an interactive marketing
message-display functionality. The iPOS 3100 can be used for signature capture
and personal identification number input, as well as promotion message and line
item display. In addition, the Company produces the PenWare1500, a signature
capture device that has helped to extend the useful life of retailer's front-end
legacy systems. Although the Company will no longer produce these products
directly, it has licensed the devices based on the @POS.com technology and may
generate revenues from consulting services provided to the licensee partners for
product development and differentiation.
RECEIPTCITY. ReceiptCity e-Services infrastructure gives "bricks and mortar"
merchants a means to improve their understanding of shoppers, achieve
real-time intimacy with shoppers, and to compete at Internet speed. At the data
center, ReceiptCity hosts' POS data, allows shopper registration, and responds
in real-time with targeted advertisements and special offers. Retailers benefit
from ReceiptCity's electronic receipt storage retrieval system by reducing their
dependence on paper receipts, improving operational efficiency, and accessing
valuable marketing information available in receipts. ReceiptCity provides
services to make shopper receipts accessible from a merchant's Web site, which
can increase Web traffic, resulting in opportunities to up-sell and cross-sell
by utilizing ReceiptCity's online services and one-to-one marketing. ReceiptCity
expects to collect software license fees through @POS.com from manufacturers of
Web-based payment terminals or kiosks that license ReceiptCity software.
CUSTOMER BASE: During fiscal 2000, the Company's three largest customers for
direct shipments of products were IBM, American Express and Direct Source, Inc.,
which combined for approximately 58% of the Company's net revenues. During
fiscal 1999, the Company's three largest customers were IBM, Federated
Department Stores, Inc., and Direct Source, Inc., which represented
approximately 76% of the Company's net revenues. In addition to direct sales of
products, the Company realized $617,000 in license revenues during fiscal 2000
from its channel partners, including $581,000 from Hand Held Products, a Welch
Allyn affiliate ("HHP-Welch Allyn").
As the Company fully implements its new business model, it anticipates its
revenue base to become more and more dependent on license fees derived from its
strategic partners (namely HHP-Welch Allyn, VeriFone, a division of
Hewlett-Packard Company ("HP Verifone"), and IVI Checkmate). Cancellation of
orders from any of these channel partners' customers, termination of licensing
agreements, inability to obtain new partners as well as inability to assist its
partners
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in successfully developing new markets for its products could adversely impact
the Company's financial condition and results of operations.
MARKET STRATEGIES: In January 2000, the Company entered into licensing
agreements with HHP-Welch Allyn and HP-VeriFone. On May 9, 2000, the Company
entered into an additional licensing agreement with IVI Checkmate. Under these
contracts, @POS.com receives prepaid fees and royalty payments. The licensees
are entitled to manufacture the devices under their private label, and sell and
support the Internet-based payment solution and the secured electronic signature
capture terminal based on @POS.com technology. While continuing to develop
strategic relationships with companies such as HP-Verifone, IVI Checkmate and
HHP-Welch Allyn, the Company intends to focus on developing and licensing future
secure interactive technology for the POS and point-of-presence ("Pop").
COMPETITION: Competition in the e-transaction market is increasing. The Company
competes with a number of other companies, including Hypercom. Some of the
competitors have greater financial, technical, and marketing resources than the
Company. The Company believes its ability to compete successfully depends on a
number of factors both within and outside its control. These factors include
product pricing, quality and performance, success in developing new products,
effectiveness of sales and marketing resources and strategies, strategic
relationships with business partners, system integrators, value-added retailers
and major accounts, availability of components for its licensed products, timing
of new product introductions by the Company and its competitors, general market
and economic conditions, and government actions throughout the world. Management
believes it competes favorably with respect to these factors.
PATENTS: The Company depends to a great extent on certain technologies
underlying its products. It has received patents and has applied for patents in
seeking protection for its intellectual property. The Company relies primarily
on trade secrets for protection of its intellectual property and, in certain
cases, exclusive licensing agreements. The Company previously filed applications
for 12 patents, which it transferred to ReceiptCity. While the Company is
seeking certain patent or other similar protection, there is no assurance that
it will be able to protect its trade secrets or that others will not
independently develop substantially equivalent proprietary information and
techniques or otherwise gain access to the Company's trade secrets. The
electronics and software industries are characterized by frequent litigation
regarding patent and other intellectual property rights, and litigation may be
necessary to enforce the Company's intellectual property rights, to protect the
Company's trade secrets, to determine the validity and scope of the proprietary
rights of others or to defend against claims of patent infringement. The Company
has received letters of inquiry accusing the Company of patent infringements.
The inquiries have been under analysis, and no legal actions are currently
pending. There can be no assurance that the Company will not receive other such
notices in the future. As the number of competing electronic transaction, data
collection and related software products increases and the functionality of
these products further overlaps, manufacturers of such products, including the
Company, could become increasingly subject to patent infringement claims.
EMPLOYEES. As of June 30, 2000, the Company, through PenWare, ReceiptCity and
MobiNetix Systems (Pvt) Ltd. in Sri Lanka, employed 119 full time or part time
employees.
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RESEARCH AND DEVELOPMENT: The Company spent $6.8 million and $4.3 million on
research and development in fiscal 2000 and 1999, respectively.
ITEM 2. PROPERTIES
The Company's operations, including engineering, administration and other
internal functions, are based in a 23,000 square foot facility in San Jose,
California. The Company entered into a six-year lease agreement for this
facility in August 1999.
The Company out-sources its manufacturing and repair work to independent
companies in Fremont and Sunnyvale, California.
The Company also leases a 5,000 square foot facility in Sri Lanka to house its
software development center.
The Company does not currently own any real property.
ITEM 3. LEGAL PROCEEDINGS
The Company is not, and during the periods covered by this report, was not,
involved in any material legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Common Stock of the Company was traded on the OTC Bulletin Board under the
symbol NETX, from January 1997 to July 1999. In July 1999, the Company's stock
symbol was changed to EPOS in association with the change of the name of the
Company to @POS.com, Inc. The Common Stock continues to be traded on the OTC
Bulletin Board under the new symbol.
The following table sets forth market prices for the Company's Common Stock. The
table reflects the high and low bid prices for the Company's Common Stock as
reported on the OTC Bulletin Board for the periods indicated.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
1999
<S> <C> <C>
First Quarter $ 5.25 $3.25
Second Quarter 3.38 1.63
Third Quarter 4.56 3.00
Fourth Quarter 12.00 2.81
2000
First Quarter 7.00 2.62
Second Quarter 3.03 1.31
Third Quarter 7.03 2.12
Fourth Quarter 6.38 2.59
</TABLE>
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The quotations set forth above reflect market prices between dealers, without
retail mark-up, markdown, or commission and may not represent actual
transactions. As of June 30, 2000, the Company's Common Stock was held by
approximately 1500 stockholders of record.
The Company has never paid a dividend and does not anticipate paying any
dividends in the foreseeable future. The Company currently intends to retain
future earnings, if any, to fund business growth and development.
In June 1998, the Company received $6,875,000 from the issuance of shares of the
Company's Series D Preferred Stock to Welch Allyn, Inc. This issuance was made
pursuant to or Rule 506 of Regulation D, promulgated under the Securities Act of
1933, as amended.
On March 31, 2000, @POS.com received $3.059 million from the subscription of
shares of the Company's Common Stock. On May 12, 2000, the Company issued
683,333 shares of @POS.com Common Stock to certain officers and directors of the
Company and U.S. Venture L.P. pursuant to Section 4(2) of the Securities Act of
1933, as amended. In addition to the private placement of shares of the
Company's Stock, @POS.com also received proceeds from exercises of employee
stock options and warrants.
During fiscal 2000, the Company issued warrants to purchase Common Stock in
connection with certain business transactions pursuant to Section 4(2) of the
Securities Act of 1933, as amended as follows:
In December 1999, the Company issued to American Express a warrant to purchase a
total of 400,000 shares of the Company's Common Stock in connection with
American Express' order for units of iPOS TC. The warrant is exercisable in four
equal blocks of 100,000 shares for specified exercise dates from February 15,
2000 through August 15, 2001. The warrant was valued at $416,196 based on a
Black-Scholes method of calculation, and this amount is amortized as a sales
discount as shipments are made under the agreement. As of June 30, 2000,
American Express had not exercised the warrant.
On January 27, 2000, the Company issued warrants to purchase 133,000 shares of
the Company's Common Stock to Imperial Credit Corporation in connection with the
establishment of a bridge loan. The fair value of the warrants, as calculated
under the Black-Scholes method, was approximately $497,000. The Company recorded
this amount as a charge to interest expense on the date of the repayment of the
bridge loan on March 16, 2000.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following analysis of the Company's financial condition, capital resources
and operating results should be reviewed in conjunction with the accompanying
Consolidated Financial Statements, including the notes thereto. When used in
this discussion, the words "expects," "anticipates," "estimates," and similar
expressions are intended to identify forward-looking statements. These
statements, which include statements as to the Company's and ReceiptCity's mix
of licensing and other revenues, expenditure levels, timing of product
introductions, cash flows, adequacy of capital resources and growth in
operations, are subject to certain risks and uncertainties that could cause
actual results to differ materially from those projected. These risks and
warranties include, but are not limited to, those risks discussed below, as well
as the risks set forth below under Item 6, "Factors that May Affect the
Company's Business, Operating Results and Financial Condition." These
forward-looking statements speak only as of the date hereof. The Company
expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained herein to
reflect any change in the Company's expectations with regard thereto, or any
change in events, conditions or circumstances in which any such statement is
based.
OPERATING RESULTS
Revenues during fiscal 2000 were $8.1 million, down 64% from $22.3 million in
fiscal 1999. The decrease was mainly attributable to a change in the Company's
business model which was implemented during the third quarter of fiscal 2000.
Prior to that time, the Company's revenues was derived almost exclusively from
the manufacture, distribution and sale of its interactive electronic transaction
terminals directly to retail customers. In January 2000, the Company entered
into initial manufacturing license and distribution agreements as part of a
sales and marketing strategy to expand the presence of its product line. At the
same time, it split its sales force in conjunction with the formation of
ReceiptCity. Management believes that these events and subsequent activities
relating to the transition of the Company's business significantly reduced the
sales effort during the second half of fiscal 2000. Revenues during fiscal 2000
included $617,000 from product licensing compared to $119,000 during fiscal
1999. The Company believes that revenues from
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licensing fees are expected to constitute an increasing percentage of the
Company's revenues in future periods.
Gross margin for fiscal 2000 was 33% compared to 46% in fiscal 1999. The
decrease was partly due to higher component costs. The margins for fiscal 2000
were also negatively impacted by an increase in inventory reserves and the
effect of higher volume sales discounts given to certain customers. Inventory
reserves charged to cost of revenues amounted to $386,000 as management chose to
discontinue manufacturing some products, thus reducing the net realizable value
of some inventories. In addition, discounts were given to certain customers in
return for their signing up for future e-commerce service offerings by the
Company.
Operating expenses totaled $15.2 million during fiscal 2000, an increase of $5.4
million or 56% from fiscal 1999. The higher expenses primarily reflect the
impact of increases in research and development and administrative personnel
relating to developing the infrastructure of ReceiptCity, 86% of the Common
Stock of which was held by the Company as of June 30, 2000. ReceiptCity
accounted for $4.0 million or 26% of the total consolidated operating expenses
during fiscal 2000.
Selling, general and administrative expenses increased to $8.3 million in fiscal
2000 from $5.4 million in fiscal 1999, an increase of 54%. In addition to higher
personnel expenses incurred to support business development and the expenses
relating to ReceiptCity, expenses for legal and other outside professional
consultants also increased significantly during fiscal 2000. Increased spending
has been focused on the Company's expanding internet business initiatives along
with the establishment of ReceiptCity. The Company increased its spending on
activities designed to establish and support its channels and product marketing
groups, and to create market awareness of its e-commerce business and a brand
identity that is consistent with its business strategy.
Research and development expenses increased 58% to $6.8 million in fiscal 2000
from $4.3 million in fiscal 1999. Of the total R&D expense, approximately $2.0
million was attributable to ReceiptCity. The increase in research and
development expense is primarily attributable to increases in personnel,
particularly key engineering talent. Expenses for technology consulting,
materials and non-recurring engineering activities also increased significantly.
The research activities of both @POS.com and ReceiptCity were focused primarily
on the development of the advanced iPOS TC web-enabling technology and related
internet services.
Interest expense and other non-operating expenses, net of interest income,
totaled $678,000 in fiscal 2000 compared to income of $114,000 in fiscal 1999.
The change was mainly attributable to the issuance of warrants in January 2000
to Imperial Credit Corporation to purchase 133,000 shares of the Company's
common stock in connection with the establishment of a bridge loan. Using the
Black-Scholes method of valuation, the warrants were valued at $497,000 and was
recorded as a charge to interest expense by the Company on the date of the
repayment of the loan. In addition, interest paid in cash during fiscal 2000
amounted to $257,000 compared to $47,000 in fiscal 1999.
LIQUIDITY AND CAPITAL RESOURCES
During fiscal 2000, the Company's operating activities consumed approximately
$5.4 million compared to $4.4 million in fiscal 1999. Net loss from operations
(including Minority Interest's share), after adjustments to reflect the impact
of non-cash charges, together with the reduction of accounts payable and prepaid
expenses, reduced cash by approximately $13.3 million. This outflow was partly
offset by cash inflow of $7.9 million from the collection of account
receivables, reduction in inventories, increase in accrued liabilities and
receipt of deferred revenues from customer prepayments.
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Cash used for investment activities for fiscal 2000 consisted primarily of
purchases of property, plant and equipment totaling $890,000, the investment
in a $125,000 time certificate of deposit required to secure a letter of credit
with Imperial Bank, and partly offset by $139,000 received from the disposal of
equipment.
The Company and ReceiptCity financed their operations and capital expenditures
primarily from proceeds of a bridge loan and note payable from a commercial bank
and from the proceeds of private placements of both companies' common and
preferred stock.
The Company obtained short-term loans from its commercial bank as a temporary
measure pending receipt of proceeds from private placements of common and
preferred stock. In January 2000, @POS.com obtained a $2.0 million bridge loan
for the purpose of paying down its bank line of credit. This loan was
subsequently repaid in March 2000 from the proceeds of common stock
subscriptions discussed below. In May 2000, ReceiptCity entered into a loan
agreement with a bank under which it could borrow up to $2.0 million at prime
interest rate plus 3.0% (a total of 12.5% at June 30, 2000). The loan was
collateralized by substantially all of ReceiptCity's tangible and intangible
assets. The loan had a balance of $2.0 million at June 30, 2000 and was
subsequently repaid in August 2000 (see Notes 7 and 10 to Consolidated Financial
Statements under Part II, Item 7 of this report).
The Company also obtained funding from the sale of preferred and common stock to
investors in private placements. In January 2000, ReceiptCity received
approximately $2.7 million for the sale of shares of Series A preferred stock
(convertible into 938,383 shares of its common stock). In March 2000, @POS.com
received $3.1 million from the subscription of 683,333 shares of its common
stock which were subsequently issued in May 2000, along with warrants to
purchase 1,161,667 shares of ReceiptCity common stock currently held by
@POS.com. Both companies also received funds from the exercise of employee stock
options and warrants.
As described in Note 10 to Consolidated Financial Statements included in Part
II, Item 7 of this filing, ReceiptCity received $16.45 million in August 2000
from the issuance of approximately 8.4 million shares of its Series B
convertible preferred stock. As a result of this financing the ownership of
ReceiptCity by @POS decreased to 46% (31% after reflecting the exercise of all
options and warrants). ReceiptCity is no longer a subsidiary of @POS.
The Company believes that current cash, investment, and future cash flows will
be sufficient to support its current operating needs through June 30, 2001 based
on the current operations and its projected revenue growth. The Company believes
that the assumptions regarding the projected revenue growth are reasonable and
appropriate. If the Company is unsuccessful in achieving its projected revenue
growth, the Company may have to change its current structure of operations and
projected spending requirements, explore alternative financing solutions, or
look for new strategic partners.
FACTORS THAT MAY AFFECT THE COMPANY'S BUSINESS, OPERATING RESULTS AND FINANCIAL
CONDITION
In addition to other information in this Form 10-KSB, investors evaluating the
Company and its business should carefully consider the following factors that
may have a significant impact on the Company's business, operating results and
financial condition. The factors set forth below and elsewhere in this Form
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10-KSB could cause actual results to differ materially from any forward-looking
statements. These risk factors include but are not limited to the following:
LIMITED LIQUIDITY RESOURCES. The Company continues to pursue other debt or
equity transactions that could provide additional financing for future
expansion. However, there is no assurance that additional funding will be
obtained. If the Company is unsuccessful in raising additional capital,
alternative sources of financing may be sought at significantly less favorable
terms, if at all.
UNPREDICTABLE AND FLUCTUATING OPERATING RESULTS. The Company has yet to sustain
consistent profitability, and sales trends are inherently difficult to predict
at this stage of development. Sales forecast shortfalls, delayed product
introductions, and manufacturing and financing constraints, together with other
risk factors, could lead to fluctuations in revenues and profits in any
particular quarter.
HIGHLY COMPETITIVE MARKETS AND RAPIDLY DEVELOPING AND CHANGING TECHNOLOGIES AND
MARKET CONDITIONS. The POS device market is constantly changing. These changes
include, among others: rapid technological advances; evolving industry standards
in electronic fund transfer and point-of-sale products; changes in customer
requirements; and frequent new product introductions and enhancements. The
Company may not successfully keep up with the new products and technological
advances. If the Company is not able to develop and market new products and
product enhancements that achieve market acceptance on a timely and cost
effective basis, it could materially and adversely affect the Company's
business, financial condition and results of operations.
DEPENDENCY ON LARGE CUSTOMERS. The Company currently relies upon a few large
retail customers and three main strategic partners for a significant percentage
of its revenues. While the Company continues in its efforts to expand its
customer base, the Company's revenues will decrease significantly if it loses a
large customer. Furthermore, there are no assurances the Company will be
successful in attracting new customers.
CLAIMS OF INFRINGEMENT ON OTHERS' PROPRIETARY RIGHTS. The Company can not
prevent someone else from asserting a claim against the Company for violating
their technology rights. Third parties making infringement claims may have
significantly greater resources than the Company does to pursue litigation, and
the Company cannot be certain that it would prevail in an infringement action.
The Company has received letters of inquiry accusing the Company of patent
infringements. The inquiries have been under analysis, and no legal actions are
currently pending. There can be no assurance that the Company will not receive
other such notices in the future. As the number of competing electronic
transaction, data collection and related software products increases and the
functionality of these products further overlaps, manufacturers of such
products, including the Company, could become increasingly subject to patent
infringement claims. Litigation may be necessary in the future to defend against
claims of infringement or invalidity, to enforce any patents the Company may
receive and other intellectual property rights, to protect the Company's trade
secrets, or to determine the validity and scope of the proprietary rights of
others, and the Company may not prevail in any litigation. Any such litigation
could be costly, could harm the Company's reputation and could divert the
efforts and attention of its management and technical personnel from normal
business operations. Adverse determinations in litigation could result in the
loss of the Company's proprietary rights and other intellectual property,
subject the Company to significant liabilities, require the Company to seek
licenses from third parties or prevent the Company from licensing its
technology, or practicing its technology, including making, using or selling its
products, any or all of which could harm the Company's business.
SINGLE COMPONENT MANUFACTURER/SUPPLIERS. The Company depends on other
manufacturers and suppliers for some of its products and certain components used
in its products. The components it obtains from other manufacturers and
suppliers are only available from a limited number of sources. Certain
components and products are currently purchased from single supplier. The
failure to obtain these products or components in sufficient quantity and in a
timely manner could adversely affect the Company.
ABILITY TO ATTRACT AND RETAIN KEY PERSONNEL. The Company's future performance
depends upon the continued service of a number of senior management and key
technical personnel. The loss or interruption of the services of one or more key
employees could have a material adverse effect on the company's business,
financial condition and results of operations. The Company's future also will
depend upon its ability to attract and retain highly skilled technical,
managerial and marketing personnel. Competition for qualified personnel is
significant and intense, and is likely to intensify in the future. The Company
competes for qualified personnel against numerous companies, including larger,
more established companies with significantly greater financial resources than
-8-
<PAGE> 10
the Company's. If the Company is unable to hire and retain qualified personnel
in the future, it could materially and adversely affect its business, financial
condition and results of operations.
ITEM 7. FINANCIAL STATEMENT
@POS.COM, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<S> <C>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 10
CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2000, AND 1999 11
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
YEARS ENDED JUNE 30, 2000, AND 1999 12
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED JUNE 30, 2000, AND 1999 13
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS
ENDED JUNE 30, 2000, AND 1999 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 15
</TABLE>
-9-
<PAGE> 11
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To @POS.com, Inc.:
We have audited the accompanying consolidated balance sheets of @POS.com, Inc.
(a Delaware corporation) and subsidiaries as of June 30, 2000 and 1999, and the
related consolidated statements of operations, stockholders' equity (deficit)
and cash flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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, the financial statements referred to above present fairly, in
all material respects, the financial position of @POS.com, Inc. and subsidiaries
as of June 30, 2000 and 1999, and the results of their operations and their cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States.
ARTHUR ANDERSEN LLP
San Jose, California
August 25, 2000
-10-
<PAGE> 12
@POS.COM, INC.
CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
ASSETS
June 30, 2000 June 30, 1999
--------------- ---------------
<S> <C> <C>
Current assets:
Cash and equivalents $ 2,891,692 $ 2,174,854
Accounts receivable (net of allowance
for bad debts of $50,116 at 6/30/00
and $218,262 at 6/30/99) 771,597 6,253,113
Inventories 140,559 1,580,394
Prepaid expenses and other current
assets 445,742 222,792
------------ ------------
Total current assets 4,249,590 10,231,153
------------ ------------
Property and equipment 2,617,648 1,843,422
Less: Accumulated depreciation (1,207,695) (562,989)
------------ ------------
Property and equipment, net 1,409,953 1,280,433
------------ ------------
Other long-term asset 125,000 -
------------ ------------
Total assets $ 5,784,543 $ 11,511,586
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 440,220 $ 2,077,114
Notes payable 2,000,000 800,000
Bank Overdraft 73,386 630,483
Accrued liabilities 595,004 584,521
Capital lease obligations, current 175,308 121,524
Deferred revenues 721,120 -
Other current liabilities 267,475 -
------------ ------------
Total current liabilities 4,272,513 4,213,642
------------ ------------
Capital lease obligations, non-current 675,258 613,463
------------ ------------
Total Liabilities 4,947,771 4,827,105
Minority Interest 2,196,187 -
Shareholders' equity:
Series B Convertible Preferred Stock, par value $0.001, 882,353 shares
authorized; liquidation preference of $7,5000,000; Issued and outstanding
461,220 shares in 2000, 662,337 shares in 1999
461 662
Series C Convertible Preferred Stock, par value $0.001, 28,125 shares
authorized; liquidation preference of $2,250,000; Shares
issued and outstanding, none in 2000, 28,125 in 1999 - 28
Series D Convertible Preferred Stock, par value $0.001; Liquidation preference
of $7,000,000; 1,273,149 shares authorized, issued and
outstanding in 2000 and 1999 1,273 1,273
Common stock, par value $0.001; 12,000,000 shares authorized; Shares issued
and outstanding, 4,574,821 in 2000 and 2,019,069 in 1999
4,575 2,019
Additional paid-in capital 19,754,208 15,126,410
Accumulated deficit (21,119,932) (8,445,911)
------------ ------------
Total stockholders' equity (deficit) (1,359,415) 6,684,481
------------ ------------
Total liabilities and stockholders' equity $ 5,784,543 $ 11,511,586
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-11-
<PAGE> 13
@POS.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE FISCAL YEARS ENDED JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Revenues $ 8,099,524 $ 22,321,275
Cost of revenues 5,421,350 12,095,152
------------ ------------
Gross profit 2,678,174 10,226,123
------------ ------------
Operating expenses:
Selling, general and administrative 8,324,558 5,408,534
Research and development 6,833,051 4,320,247
------------ ------------
Total operating expenses 15,157,609 9,728,781
------------ ------------
Operating income (loss) (12,479,435) 497,342
Interest expenses and other (766,777) (82,659)
Interest income 89,129 197,075
------------ ------------
Income (loss) before income taxes (13,157,083) 611,758
Provision for income taxes - (45,553)
Minority Interest share in subsidiary loss 483,062 -
------------ ------------
Net income (loss) $(12,674,021) $ 566,205
============ ============
Net income (loss) per share - Basic $ (3.84) $ 0.29
Net income (loss) per share - Diluted $ (3.84) $ 0.09
Weighted average shares outstanding:
Basic 3,296,266 1,940,774
Diluted 3,296,266 6,235,605
</TABLE>
The accompanying notes are an integral part of these financial
statements.
-12-
<PAGE> 14
@POS.COM, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE FISCAL YEARS ENDED JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
SERIES B SERIES C SERIES D
PREFERRED STOCK PREFERRED STOCK PREFERRED STOCK
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AS OF JUNE 30, 736,756 736 28,125 28 1,273,149 1,273
1998
CONVERSIONS OF SERIES
B PREFERRED STOCK (74,419) (74) - - - -
ISSUANCE OF COMMON
STOCK PURCHASE WARRANTS - - - - - -
OPTIONS EXERCISED - - - - - -
NET INCOME - - - - - -
--------- ------- -------- ------- --------- -------
BALANCE AS OF JUNE 30, 662,337 662 28,125 28 1,273,149 1,273
1999
ISSUANCE OF COMMON
STOCK TO INVESTORS - - - - - -
CONVERSIONS OF SERIES
B & C PREFERRED STOCK (201,117) (201) (28,125) (28) - -
ISSUANCE OF COMMON
STOCK PURCHASE WARRANTS - - - - - -
OPTIONS EXERCISED - - - - - -
NET LOSS - - - - - -
--------- ------- -------- ------- --------- -------
BALANCE AS OF JUNE 30, 461,220 $461 - $- 1,273,149 $1,273
2000 ========= ======= ======== ======- ========= =======
</TABLE>
<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON STOCK PAID IN ACCUMULATED STOCK-HOLDER'S
SHARES AMOUNT CAPITAL DEFICIT EQUITY (DEFICIT)
------ ------ ------- ------- ----------------
<S> <C> <C> <C> <C> <C>
BALANCE AS OF JUNE 30, 1,868,925 $1,869 $14,950,443 $(9,012,116) $5,942,233
1998
CONVERSIONS OF SERIES
B PREFERRED STOCK 148,838 149 (75) - -
ISSUANCE OF COMMON
STOCK PURCHASE WARRANTS - - 176,040 - 176,040
OPTIONS EXERCISED 1,306 1 3 - 3
NET INCOME - - - 566,205 566,205
--------- ------- ----------- ------------- ----------
BALANCE AS OF JUNE 30, 2,019,069 2,019 15,126,410 (8,445,911) 6,684,481
1999
ISSUANCE OF COMMON
STOCK TO INVESTORS 683,333 683 3,058,317 - 3,059,000
CONVERSIONS OF SERIES
B & C PREFERRED STOCK (1,555,766 1,556 (1,327) - -
ISSUANCE OF COMMON
STOCK PURCHASE WARRANTS - - 949,618 - 949,618
OPTIONS EXERCISED 316,653 317 621,190 - 621,506
NET LOSS - - - (12,674,021) (12,674,021)
--------- ------- ----------- ------------- -----------
BALANCE AS OF JUNE 30, 4,574,821 $4,575 $19,754,208 $(21,119,932) $(1,359,415)
2000 ========= ======= =========== ============ ===========
</TABLE>
The accompanying notes are an integral part of these financial
statements.
-13-
<PAGE> 15
@POS.COM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE FISCAL YEARS ENDED JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net income/(loss) $(12,674,021) $ 566,205
Adjustments to reconcile net income/(loss) to net cash used in
operating activities:
Depreciation and amortization 693,713 207,027
Provision for bad debts 33,992 155,899
Issuance of Common Stock Purchase Warrants 949,618 176,040
Loss on disposal of equipment 14,791 -
Minority interest share in subsidiary losses (483,062) -
Changes in operating assets and liabilities:
Accounts receivable 5,447,524 (5,747,516)
Inventories 1,439,835 962,972
Prepaid expenses and other current assets (222,950) (1,430)
Accounts payable (1,563,508) (194,599)
Accrued liabilities 270,957 669,954
Deferred revenues 721,120 (1,152,450)
------------ -----------
Net cash used in operating activities (5,371,991) (4,357,898)
------------ -----------
Cash flows from investing activities:
Investment in Long-term CD (125,000) -
Purchases of property and equipment (890,062) (442,954)
Disposal of property and equipment 139,717 -
------------ -----------
Net cash used in investing activities (875,345) (442,954)
------------ -----------
Cash flows from financing activities:
Borrowings 5,280,276 800,000
Repayments (4,595,180) (290,195)
Proceeds from issuance of Common Stock 3,609,131 3
Proceeds from issuance of ReceiptCity Preferred and Common
Stocks 2,669,948 -
------------ -----------
Net cash provided by financing activities 6,964,175 509,808
------------ -----------
Net increase/(decrease) in cash 716,838 (4,291,044)
Cash and cash equivalents at beginning of year 2,174,854 6,465,898
------------ -----------
Cash and cash equivalents at end of year $ 2,891,692 $ 2,174,854
============ ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes - 45,553
Cash paid for interest 257,094 47,298
Non-cash investing and financing activities:
Capital equipment leases - 734,988
Conversion of Series B Preferred to Common - 74
Issuance of Subsidiary common stock 6,125
</TABLE>
The accompanying notes are an integral part of these financial
statements.
-14-
<PAGE> 16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
ORGANIZATION AND OPERATIONS
@POS.com, Inc., formerly known as MobiNetix Systems, Inc. ("@POS.com" or the
"Company"),is a Delaware Corporation. The Company develops certain technologies
that allow merchants to web-enable at the point-of-sale ("POS") environment. By
web-enabling POS transaction terminals, the Company's customers will be able to
run advertisements, promotions and surveys at the POS, retrieve receipts via a
personal computer utilizing a consumer-focused web-site and provide other
valuable one-to-one marketing services.
The Company's wholly owned subsidiary, PenWare, Inc. ("PenWare") was
incorporated in 1983. It develops, sells and licenses products such as the
PenWare 1100 and the PenWare 1500 signature capture devices, the PenWare 3100,
an interactive point-of-transaction terminal for paperless environments and the
interactive point-of-sale Transaction Computer ("iPOS TC") the first
Web-enabled, interactive POS transaction computer for the retail industry.
In January 1999, the Company established MobiNetix Systems (Pvt.) Ltd, a then
100% owned software research and development center in Sri Lanka, in an effort
to reduce research and development expenses and use the human resources
available in software development in the Asian Pacific countries.
In January 2000, the Company split into two business entities and announced the
formation of a wholly owned subsidiary, ReceiptCity.com, Inc. ("ReceiptCity").
The strategic spin-off allows ReceiptCity to focus on its own business model and
product development, and establish a different customer base, as well as
separate funding. @POS.com continues to advance its POS technology in
web-enabling the retailer's transaction process and enhancing the customer's
shopping experience. ReceiptCity provides merchants and consumers with a Web
portal for secured electronic receipt storage and retrieval and presents
personalized e-messages online at the POS.
Upon the completion of the separation, @POS.com transferred approximately 10% of
its tangible assets, 100% of MobiNetix Systems (Pvt.) Ltd., and elements of
intellectual property, including 12 patents, to ReceiptCity. Employee resources
were also split between the two companies. Each business entity seeks to work
with strategic partners to expand the market for web-enabled POS products and
services, and to deliver increasingly valuable services to retailers.
As of June 30, 2000, @POS.com owned approximately 86% of ReceiptCity's common
stock. The Company believes that current cash, investments, and future cash
flows will be sufficient to support its current operating needs through June 30,
2001 based on the current operations and its projected revenue growth. The
Company believes that the assumptions regarding the projected revenue growth are
reasonable and appropriate. If the Company is unsuccessful in achieving its
projected revenue growth, the Company may have to change its current structure
of operations and projected spending requirements, explore alternative financing
solutions, or look for new strategic partners.
The Company is subject to a number of risks common to companies at a similar
stage of development. This includes the need to obtain adequate financing,
competition from firms that have greater financial resources than the Company,
reliance on channel partners and contract manufacturers and a history of
operating losses.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The consolidated financial statements are prepared in conformity with generally
accepted accounting principles. These principles require 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.
-15-
<PAGE> 17
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
ReceiptCity. All inter-company accounts and transactions have been eliminated.
The minority ownership in the voting shares of ReceiptCity is separately shown
on the Company's balance sheet as Minority Interest.
CASH AND CASH EQUIVALENTS
For purpose of the statement of cash flow, the Company considers all highly
liquid investment with an original maturity of three months or less to be cash
equivalents. Cash equivalents at June 30, 2000 consisted principally of money
market accounts.
REVENUE RECOGNITION
Revenue from sales of hardware products is recognized upon shipment. A provision
for estimated warranty costs is provided for upon shipment. Software product
revenues are recognized when the related products are shipped, provided there
are no significant post-delivery obligations, payment is probable, and payment
is due within one year in accordance with SOP 97-2 Software Revenue Recognition.
Payments received from customers for which the related products have not been
shipped are recorded as deferred revenues until shipped. Revenue from services
is generally recognized as the services are performed. The Company licenses its
software to original equipment manufacturers ("OEMs") and channel partners under
the terms of its development and licensing agreements. Royalty revenues derived
from sales of products by OEMs and channel partners to end-users are recognized
when the OEM advises the Company that the products have been shipped to the
customers.
Cost of revenues for hardware sales consists mainly of purchased electronic
components and contract assembly labor.
RESEARCH AND DEVELOPMENT
Research and development costs are generally expensed as incurred. Statement of
Financial Accounting Standards ("SFAS") 86, "Accounting for the Costs of
Computer Software to be Sold, Leased, or Otherwise Marketed," requires
capitalization of certain software development costs subsequent to the
establishment of technological feasibility. In the Company's case,
capitalization would begin upon completion of a working model. As of June 30,
2000 and 1999, such costs were insignificant. Accordingly, the Company has
charged all such costs to research and development expense in the accompanying
consolidated statements of operations.
INVENTORIES
Inventories are carried at the lower of cost or market, as determined on a
first-in, first-out basis. As of the dates indicated, the Company's inventories
were as follows:
<TABLE>
<CAPTION>
June 30, 2000 June 30, 1999
--------- -----------
<S> <C> <C>
Raw materials $ 439,390 $ 1,394,265
Work in process - 253,197
Finished goods 58,070 -
Inventory reserve (356,901) (67,068)
--------- -----------
Total $ 140,559 $ 1,580,394
========= ===========
</TABLE>
PROPERTY AND EQUIPMENT
-16-
<PAGE> 18
Property and equipment are stated at cost and depreciated using the
straight-line method over the estimated useful lives of the assets, generally
three to five years. As of the dates indicated, the Company's property and
equipment were as follows:
<TABLE>
<CAPTION>
June 20, 2000 June 30, 1999
------------- -------------
<S> <C> <C>
Office equipment $ 312,053 $ 346,775
Engineering and production
equipment 298,241 291,403
Computer equipment and
software 1,732,235 1,085,523
Furniture and fixtures 53,316 31,048
Leasehold improvement 221,803 88,673
----------- -----------
Subtotal 2,617,648 1,843,422
Less Accumulated depreciation (1,207,695) (562,989)
----------- -----------
Total $ 1,409,953 $ 1,280,433
=========== ===========
</TABLE>
COMPREHENSIVE INCOME
As of July 1, 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive
Income"("SFAS 130"). SFAS 130 establishes standards for reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. The objective of SFAS No. 130 is to report a measure of
all changes in equity of an enterprise that results from transactions and other
economic events of the period other than transactions with shareholders
("comprehensive income"). Comprehensive income is the total of net income and
all other non-owner changes in equity. For the years ended June 30, 2000 and
1999, the Company's comprehensive income was equal to the net income or loss for
each of the two years respectively.
NET INCOME/(LOSS) PER SHARE
Basic net income/(loss) per share is computed by dividing net income/(loss)
available to common stockholders (numerator) by the weighted average number of
common shares outstanding (denominator) during the period and excludes the
dilutive effect of stock options and convertible securities. Diluted net
income/(loss) per share gives effect to all dilutive common shares and other
dilutive securities outstanding during the period, including the assumed
conversion of the Preferred Stock into Common Stock using the if converted
method. In computing diluted net income per share, the average stock price for
the period is used in determining the number of shares assumed to be purchased
from exercise of stock options.
The following table sets forth the computation of basic and diluted earnings per
share for the years ended June 30, 2000 and 1999 as follows:
<TABLE>
<CAPTION>
Year ended June 30
-------------------------
2000 1999
-------------------------
<S> <C> <C>
Numerator for basic and diluted earnings per share -
net income/(loss) $(12,674,021) $ 566,205
------------ ----------
Denominator for basic earnings per share -
weighted average Common shares 3,296,266 1,940,774
Effect of dilutive securities
Series B Preferred Stock - 1,444,388
Series C Preferred Stock - 1,150,307
Series D Preferred Stock - 1,273,149
Employee stock options and
warrants - 446,845
------------ ----------
Denominator for diluted earnings per share
</TABLE>
-17-
<PAGE> 19
<TABLE>
<S> <C> <C>
adjusted weighted average shares 3,296,266 6,235,605
------------ ----------
Income/(loss) per share
Basic $(3.84) $ 0.29
Diluted $(3.84) $ 0.09
Potentially dilutive securities excluded from
computations as the effect would be
antidilutive 3,513,286 -
</TABLE>
STOCK BASED COMPENSATION
SFAS 123, "Accounting for Stock-Based Compensation," which became effective in
fiscal 1997, establishes a fair value based method of accounting for stock-based
compensation plans, while also permitting an election to continue following the
requirements of APB Opinion ("APB") No. 25, "Accounting for Stock Issued to
Employees" with disclosures of pro forma net income and earnings per share under
the new method. The Company has elected to continue to measure compensation
costs for its employee stock compensation plans using the method of accounting
prescribed by APB No. 25 while providing the additional disclosure requirements
set forth in SFAS 123.
MINORITY INTEREST
During January 2000, ReceiptCity received $2,770,000 for Series A Preferred
Stock convertible into 938,983 shares of its $.001 par value common stock. In
addition, options for 380,000 common shares, valued at $90,000, were granted to
and exercised by a ReceiptCity's advisor and by one of the members of its board
of directors. In May 2000, additional 20,416 common shares valued at $6,125 were
issued to two ReceiptCity management employees, bringing the total minority
shareholdings in ReceiptCity to 1,339,399 equivalent shares of common stock. The
net proceeds from this funding amounted to approximately $2,670,000 after
incurring issuance costs of approximately $190,000. These issuances correspond
to approximately 14% of the subsidiary's common shares, while its parent,
@POS.com, Inc. continued to own 8,000,000 shares, or approximately 86% of its
total voting shares as of June 30, 2000.
The value of the Minority Interest of $2,196,187, as presented in the
accompanying balance sheet, represents the net proceeds of the minority
shareholders' investment in ReceiptCity's Series A Preferred Stock, less their
share in the subsidiary's loss. The accompanying income statement reflects the
minority shareholder's share of $483,062 in the subsidiary's loss during the
five and a half month period based on the percentage of their holdings in the
subsidiary's total outstanding common stock at June 30, 2000.
SEGMENT INFORMATION
During fiscal 2000, the Company adopted SFAS No. 131, "Disclosures About
Segments of an Enterprise and Related Information." SFAS No. 131 requires a new
basis of determining reportable business segments (i.e., the management
approach). This approach requires that business segment information used by
management to assess performance and manage company resources be the source of
information disclosure. The following information regarding the performance of
@POS.com and ReceiptCity is presented for this purpose:
Selected Performance Statistics for the Year Ended June 30, 2000 ($000)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
In $ Thousands @POS.com ReceiptCity Eliminations Consolidated
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue 8,104 450 454 8,100
-------------------------------------------------------------------------------------
Operating Income
(Loss) (8,905) (3,574) - (12,479)
-------------------------------------------------------------------------------------
Net Assets 3,487 2,952 (654) 5,785
-------------------------------------------------------------------------------------
</TABLE>
-18-
<PAGE> 20
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133 ("SFAS 133"), "Accounting for Derivative Instruments and Hedging
Activities," which the Company will be required to adopt for fiscal year 2001.
This statement establishes a new model for accounting for derivatives and
hedging activities. Under FAS 133, all derivatives must be recognized as assets
and liabilities and measured at fair value. The Company has not determined the
impact of the adoption of this new accounting standard on its consolidated
financial position or results of operations.
2. INCOME TAXES
The Company accounts for income taxes in accordance with SFAS 109, "Accounting
for Income Taxes," whereby deferred tax assets and liabilities reflect the
future income tax effects of temporary differences between the financial
statement carrying amounts of assets and liabilities and their respective basis
for taxation. Deferred tax liabilities and assets are determined on the basis of
enacted tax laws and rates applicable to the periods in which the taxes become
payable
Significant components of the Company's deferred tax assets and liabilities are
as follows:
<TABLE>
<CAPTION>
June 30,
2000 1999
------------ -----------
<S> <C> <C>
Net operating loss carry forwards $ 9,390,895 $ 4,576,807
Tax credit carry forwards 1,191,688 141,538
Deferred revenue - -
Accrued expenses and other 538,397 915,121
Capitalized start-up cost 779,721
------------ -----------
Gross deferred tax asset 11,900,701 5,633,466
Deferred tax liability:
Valuation allowance (11,900,701) (5,633,466)
------------ -----------
$ - $ -
============ ===========
</TABLE>
A valuation allowance has been established against the deferred tax asset
because such asset does not meet the criteria for recognition included in SFAS
109.
As of June 30, 2000, the Company had net operating loss carry forward for
Federal and State income tax reporting purposes of about $24.9 million and $11.9
million, respectively. A substantial portion of the Company's net operating loss
carryover and tax credit carry forwards are subject to the Section 382
limitation and the Section 383 limitation, respectively, and may not be
utilized. The Federal net operating loss and other credit carry forwards expire
on various dates through 2020. The state net operating loss carry forward will
expire on various dates through 2005.
There is no provision for income taxes due to the fact that Company has suffered
a loss in fiscal year 2000.
-19-
<PAGE> 21
The provision for income taxes for 1999 consisted of the following:
<TABLE>
<CAPTION>
Year ended June 30, 1999 Federal State Total
------- ------- -------
<S> <C> <C> <C>
Current $27,690 $17,863 $45,553
Deferred
------- ------- -------
Net $27,690 $17,863 $45,553
======= ======= =======
</TABLE>
The provision for income taxes differs from the expected tax provision/(benefit)
amount computed by applying the statutory Federal income rate of 34% to income
(loss) before taxes for the year ended June 30, 1999 as follows:
<TABLE>
<CAPTION>
1999
-------
<S> <C>
Federal statutory rate 34.0%
State taxes, net of federal benefit 5.8
Change in valuation allowance (32.8)
------
7.0%
======
</TABLE>
3. CONCENTRATION OF CREDIT RISK
Financial instruments that potentially subject the Company to a concentration of
credit risk consist primarily of cash and trade receivables. The Company places
its cash with high quality financial institutions.
The Company's accounts receivable are concentrated with a few customers
primarily in the retail, security identification and field sales/services
industries. The Company maintains an allowance for uncollectible accounts based
upon expected collectibility of individual customer accounts receivable. The
Company does not generally require collateral.
4. PREFERRED STOCK
The Company sold and issued 894,358 shares of Series B Preferred Stock in a
series of private placements and bridge loan conversions during fiscal 1996 and
1997. Each share of Series B Preferred Stock is convertible into Common Stock at
a rate of 1:2.02864, and is adjustable similar to Series C Preferred Stock. In
fiscal year 2000 and 1999, 201,117 and 74,419 shares of Series B Preferred Stock
were converted into 405,454 and 148,838 shares of Common Stock, respectively.
The Series B Preferred Stock has voting rights equal to an equivalent number of
shares of Common Stock into which it is convertible and a liquidation preference
of $7.5 million. Dividends for Series B Preferred Stock are non-cumulative and
payable upon declaration by the Company's board of directors.
The Company's Series C Preferred Stock is convertible into Common Stock at a
rate of 1 to 40.8998, which is adjustable in the event of certain issuances of
additional Common Stock, including stock dividends, options, and securities
convertible to Common Stock. In fiscal year 2000, 28,125 shares of Series C
Preferred Stock were converted into 1,150,312 shares of Common Stock. Series C
Preferred Stock had voting rights equal to an equivalent number of shares of
Common Stock into which it is convertible and a liquidation preference of $2.25
million. Dividends for Series C Preferred Stock were non-cumulative and payable
only upon declaration by the Company's board of directors.
The Company sold and issued 1,273,149 shares of Series D Preferred Stock in a
private placement for net proceeds of $6,851,855 in June 1998. Each share of
Series D Preferred Stock is convertible into Common Stock at a rate of 1:1 and
has voting rights equal to an equivalent number of shares of Common Stock into
which it is convertible. The Series D Preferred Stock has a liquidation
preference of $7.0 million. Dividends for Series D Preferred Stock are
non-cumulative and payable only upon declaration by the Company's board of
directors.
-20-
<PAGE> 22
On January 26, 2000, ReceiptCity received approximately $2.7 million for the
sale of shares of Series A Preferred Stock convertible into 938,983 of
ReceiptCity common stock. The net proceeds from this sale are included as
Minority Interest in the Balance Sheet.
All series of the Company's Preferred Stock are subject to automatic conversion
into Common Stock at the current rate upon (1) the closing of the sale of the
Company's Common Stock in an underwritten public offering registered under the
Securities Act of 1933 with proceeds greater than $6 million, or (2) by written
elections of holders of majority of each Series of Preferred Stock outstanding.
Preferred stockholders have voting rights based on the number of shares of
Common Stock into which they can be converted.
5. COMMON STOCK
Approximately 1,084,275 shares were issued to management for cash in December
1995 at a price of $0.001 per share. Fifty percent of these shares vested
immediately and the remaining shares vest on a 1/48 basis for each month
thereafter. As of June 30, 1998, 67,767 shares remain unvested.
As of June 30, 2000, approximately 950,720 Common Stock Purchase Warrants were
outstanding. The exercise price of these warrants range from $1.75 to $3.75 per
share with an average of $3.42 per share. These warrants can be exercised at
various dates through November 2004.
On March 31, 2000, @POS.com received $3.059 million from the subscription of
common shares in the Company. On May 12, 2000, the Company issued 683,333 shares
of @POS.com common shares and warrants to purchase 1,161,667 shares of
ReceiptCity common stock currently held by @POS.com. In addition to the private
placement of common shares, @POS.com also received proceeds from exercise of
employee stock options and warrants.
During the fiscal 2000, the Company issued Common Stock Purchase Warrants in
connection with certain transactions. In December 1999, the Company issued
American Express a warrant to purchase a total of 400,000 common shares of
@POS.com in connection with their order for units of iPOS TC. The warrant is
exercisable in four equal blocks of 100,000 shares for specified exercise dates
from February 15, 2000 through August 15, 2001. The warrant was valued at
$416,196 based on a Black-Scholes method of calculation. This amount is
amortized as a sales discount as shipments are made under the agreement. As of
June 30, 2000, American Express had not exercised the warrant.
On January 27, 2000, the Company also issued warrants to purchase 133,000 shares
of the Company's Common Stock to Imperial Credit Corporation in connection with
the establishment of a bridge loan. The fair value of the warrants, as
calculated under the Black-Scholes method, was approximately $497,000. The
Company recorded this amount as a charge to interest expense on the date of the
repayment of the bridge loan on March 16, 2000.
As of June 30, 2000, the Company had reserved the following shares of authorized
but unissued Common Stock:
<TABLE>
<S> <C>
Conversion of Series B Preferred Stock 935,649
Conversion of Series D Preferred Stock 1,273,149
Exercise of Common Stock Purchase Warrants 950,720
Stock options outstanding and remaining to
be granted under the Stock Plans 2,503,072
---------
Total shares reserved 5,662,590
=========
</TABLE>
-21-
<PAGE> 23
6. EMPLOYEE STOCK OPTIONS
Under the terms of the Company's 1992 and 1996 Stock Plans ("the Plans"),
incentive common stock options may be granted at prices not lower than the fair
market value at the date of grant. Nonqualified stock options may be granted at
prices not lower than 85% of the fair market value at the date of the grant.
Options granted under the 1992 Plan generally vest 12.5% after six months with
the remaining options vesting monthly on a pro rata basis over the following 42
months. Options granted under the 1996 Plan generally vest 25% after one year,
with the remaining options vesting monthly on a pro rata basis over the
following 36 months. Options generally expire after 10 years under both Plans.
Activity relating to the plans is as follows:
<TABLE>
<CAPTION>
Shares Number of Average
Available Options Exercisable
For Grant Outstanding Price
---------- ---------- ----------
<S> <C> <C> <C>
Balances, June 30, 1998 220,875 1,150,266 $ 2.194
Share authorized 1,450,000 - -
Options granted (526,966) 526,966 $ 3.328
Options exercised - (1,306) $ 0.004
Options cancelled 198,585 (198,585) $ 2.636
---------- ---------- ----------
Balances, June 30, 1999 1,342,494 1,477,341 $ 2.650
Options granted (1,256,956) 1,256,956 $ 3.182
Options exercised - (316,653) $ 1.737
Options cancelled 668,551 (668,551) $ 3,494
---------- ---------- ----------
Balances, June 30, 2000 754,089 1,749,093 $ 2.802
========== ========== ==========
</TABLE>
As of June 30, 2000, 811,210 options were exercisable at prices ranging from
$0.013 to $5.875 per share. All options under the 1992 plan were granted by
PenWare and were converted into options to purchase shares of @POS.com. All
options granted during fiscal 2000 were made by @POS.com under the 1996 Plan.
The following table summarizes additional information with respect to stock
options outstanding as of June 30, 2000:
<TABLE>
<CAPTION>
Options outstanding Options exercisable
------------------- ---------------------
Weighted Weighted Number of Weighted
Number of Average Average Options Average
Options Contractual Exercise Exercisable Exercisable
Exercise Prices at 6/30/99 Life (yrs) Price at 6/30/99 Price
------------------------- -------------- --------------- ------------ --------------- --------------
<S> <C> <C> <C> <C> <C>
$0.013 to $0.200 1,250 5.4 $ 0.200 1,250 $ 0.200
$1.375 to $2.000 454,605 6.8 1.461 405,381 1.412
$2.220 to $3.313 813,590 9.4 2.645 103,978 2.559
</TABLE>
-22-
<PAGE> 24
<TABLE>
<S> <C> <C> <C> <C> <C>
$3.375 to $5.000 408,580 8.4 4.112 249,408 4.022
$5.125 TO $5.875 71,068 8.5 2.802 51,193 5.834
------------- -----------
$0.013 to $5.875 1,749,093 8.4 $ 2.802 811,210 $ 2.638
============= ===========
</TABLE>
The fair value of the grants has been estimated on the date of the grant using
the Black-Scholes option-pricing model with the following weighted average
assumptions used for grants:
<TABLE>
<CAPTION>
Year ended June 30
2000 1999
---- ----
<S> <C> <C>
Risk-free interest rate 5.5% 6.0%
Expected dividend yield 0% 0%
Expected lives 5 years 5 years
Expected volatility 70% 105%
</TABLE>
If the Company had accounted for its stock-based compensation plans in
accordance with SFAS 123, the Company's net income/(loss) and net income/(loss)
per share for the fiscal years ended June 30, 2000 and 1999 would approximate
the pro forma disclosures below:
<TABLE>
<CAPTION>
June 30, 2000 June 30, 1999
As reported Pro forma As reported Pro forma
------------ ----------- ------------- ------------
<S> <C> <C> <C> <C>
Net income/(loss) $(12,674,021) $(13,086,471) $566,205 $(773,541)
Net income/(loss) per
share $(3.84) $(3.97) $0.09 $(0.40)
</TABLE>
7. NOTE PAYABLE
In May 2000, ReceiptCity entered into a bridge loan agreement with a bank under
which the Company could borrow up to $2 million at a rate of prime plus 3%
(12.5% at June 30, 2000). The bridge loan was collateralized by substantially
all of ReceiptCity's tangible and intangible assets. The outstanding balance as
of June 30, 2000 was $2 million, which was repaid in August 2000.
ReceiptCity agreed to grant to the lender a warrant to purchase $250,000 in
shares of its Series B mandatorily convertible preferred stock at an initial
exercise price equal to the average of the effective per share prices of the
Series A and B mandatorily convertible preferred stocks. The Company determined,
based on the Black-Scholes pricing model, that the value of this warrant was
immaterial; therefore, no expense was recorded.
8. SIGNIFICANT CUSTOMERS
Customers representing more than 10% of total revenues are summarized below for
fiscal 2000 and 1999:
<TABLE>
<CAPTION>
2000 1999
-------- --------
<S> <C> <C>
IBM 19% 11%
Direct Source, Inc. 22% 12%
Federated Department Stores, Inc. - 53%
American Express 17% -
</TABLE>
-23-
<PAGE> 25
9. RELATED PARTY
During fiscal 2000, the Company realized $581,000 in license revenue from Hand
Held Product, a Welch Allyn affiliate. A senior executive of the Hand Held
products division is a member of the Company's Board of Directors.
10. COMMITMENTS & CONTINGENCIES
In July 1999, the Company entered into a lease for office and operating
facilities in San Jose, California, which expires in August 2005. The office
space lease provides for monthly rent payments plus a share of taxes, insurance
and maintenance on the properties. The Company has also entered into certain
other capital leases for computers and equipment. The annual minimum lease
payments under these leases are as follows:
<TABLE>
<CAPTION>
Year ending June 30, Operating Lease Capital Leases
-------------- ----------------
<S> <C> <C>
2001 $ 415,710 $ 258,381
2002 432,342 258,381
2003 449,632 258,381
2004 467,622 252,135
2005 486,320 30,256
----------- ----------
Total minimum lease
Payments $ 2,251,626 1,057,534
===========
Less imputed interest (206,968)
----------
Present value of net
minimum lease payments $ 850,566
==========
</TABLE>
Rent expense was approximately $544,000 and $174,000 for the years ended June
30, 2000 and 1999, respectively.
On May 18, 2000, the Company opened a standby letter of credit with Imperial
Credit Corporation for $125,000 to secure a future lease financing contract with
a leasing company. The letter of credit is secured by a time certificate of
deposit for $125,000 which matures and is automatically renewed every 90 days
until all future lease obligations are extinguished. The financing commitment is
for a maximum of $250,000 payable in two years and was granted to the Company in
connection with its purchase of office cubicles and furniture which were
subsequently installed in July 2000.
The Company has received letters of inquiry accusing the Company of patent
infringements. The inquiries have been under analysis, and no legal actions are
currently pending.
11. SUBSEQUENT EVENT
In August 2000, ReceiptCity had completed a round of financing for its Series B
mandatorily convertible Preferred Stock. The net proceeds from the stock
offering were approximately $16 million. Proceeds were partly used to pay off
ReceiptCity's $2 million bridge loan. The remainder will be used for working
capital. With this additional funding, @POS.com's ownership of ReceiptCity was
reduced to approximately 46% (31% after reflecting the exercise of all options
and warrants). Accordingly @POS.com will no longer consolidate the results of
ReceiptCity, but instead will account for its investment in ReceiptCity under
the equity method.
-24-
<PAGE> 26
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
The Company has had no change in or disagreements with its accountants on
accounting and financial disclosure during the period covered by this report.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OF THE
REGISTRANT
The information required by this item is incorporated by reference from the
information under the captions "Election of Directors" and "Executive Officers"
is contained in the Company's Proxy Statement to be filed with the Securities
and Exchange Commission in connection with the solicitation of proxies for the
Company's 2000 Annual Meeting of Stockholders to be held on December 8, 2000
(the "Proxy Statement").
ITEM 10. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference from the
information under the captions "Election of Directors-Compensation of
Directors" and "Executive Officers-Executive Compensation" contained in the
Proxy Statement.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is incorporated by reference from the
information under the captions "Election of Directors-Compensation of
Directors" and "Executive Officers-Executive Compensation" contained in the
Proxy Statement.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is incorporated by reference from the
information under the caption "Certain Transactions" contained in the Proxy
Statement.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) The exhibits listed in this exhibit index following this item are filed as
part of this Annual Report.
(b) Reports on Form 8-K filed during the three months ended June 30, 2000.
None.
-25-
<PAGE> 27
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT:
------- -------
<S> <C>
2.1(G) Agreement and Plan of Reorganization dated June 10, 1996 among
Penultimate, Inc., PenWare, Inc., and the common and preferred
stockholders of PenWare, Inc.
3.1 Restated Certificate of Incorporation of the Company.
3.2(H) Certificate of Amendment of Certification of Incorporation.
3.3 By-laws of the Company.
4.1(C) Specimen certificate for Common Stock of the Company.
4.2(C) Specimen certificate for Common Stock Purchase Warrants.
4.3(B) Investor Rights Agreement, date April 24, 1998 among the Company and
the purchaser of shares of Series D Preferred Stock.
10.1(A)* 1992 Incentive and Statutory Stock Option Plan of the Company.
10.2(A)* Form of Incentive Stock Option under 1992 Incentive and Statutory
Stock Option Plan of the Company.
10.3(A)* Form of Nonstatutory Stock Option under 1992 Incentive and Statutory
Stock Option Plan of the Company.
10.4(D) Lease agreement for premises located at 500 Oakmead Parkway,
Sunnyvale, California, 94086.
10.5(E)* 1996 Stock Option Plan of the Company and related agreements.
10.6(F) Software Development and License Agreement, dated March 16, 1998
between the Company and Federated Department Stores, Inc.
10.7(F) Systems Acquisition Agreement, dated March 16, 1998, as amended March
20, 1998 between the Company and Federated Department Stores, Inc.
10.8(F) Common Stock Purchase Warrant Agreement between the Company and
Federated Department Stores, Inc.
10.9(B) Series D Preferred Stock Purchase Agreement between the Company and
Welch Allyn, Inc. dated April 24, 1998.
10.10(H) Lease agreement for premises located at 3051 North First Street, San
Jose, California, 95134.
10.11 Common Stock Purchase Warrant Agreement between the Company and
American Express.
10.12 Common Stock Purchase Warrant Agreement between the Company and
Imperial Credit Corporation.
10.13* Confidential Resignation Agreement and General Release of Claims
Between the Company and David Licurse dated February 29, 2000.
10.14* Stock and Warrant Purchase Agreement between the Company and the
persons listed on Exhibit A thereto dated as of May 12, 2000, and
form of Warrant to Purchase Common Stock of ReceiptCity.com, Inc.
dated May 12, 2000.
21 List of Subsidiaries of the Company.
23 Consent of Arthur Anderson LLP, Independent Public Accountants.
</TABLE>
-26-
<PAGE> 28
* Indicates management contract or compensatory plan or arrangement. (a)
Incorporated herein by reference to the Company's Registration Statement on Form
SB-2, File No. 33-67534-LA, as filed with the Commission on August 16, 1993.
(b) Incorporated herein by reference to the Company's Report on Form 10-KSB
dated September 29, 1998 and file with the Commission on September 29, 1998.
(c) Incorporated herein by reference to Amendment No. 2 to the Company's
Registration Statement on Form SB-2, File No. 33-67534-LA, as filed with the
Commission on October 1, 1993.
(d) Incorporated herein by reference to the Company's Report on Form 10-KSB
dated September 30, 1996 and filed with the Commission on September 30, 1996.
(e) Incorporated herein by reference to the Company's Report on Form 10-QSB
dated February 13, 1997 and filed with the Commission on February 14, 1997.
(f) Incorporated herein by reference to the Company's Report on Form 10-QSB
dated May 15, 1998 and filed with the Commission on May 15, 1998.
(g) Incorporated herein by reference to Amendment No. 3 to the Company's Report
on Form 8-KSB dated June 10, 1996 and filed with the Commission on June 25,
1996.
(h) Incorporated herein by reference to the Company's Report on Form 10-KSB
dated September 29, 1999 and file with the Commission on September 30, 1999.
-27-
<PAGE> 29
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.
@POS.COM, INC.
Date: September 28, 2000 By: /s/ MICHAEL DORSEY
--------------------------------------------
Michael Dorsey
Acting Chief Executive Officer
Pursuant to the requirements of the Exchange Act, the following persons on
behalf of the registrant and in the capacities and on the dates indicated have
signed this report below.
Date: September 28, 2000 By: /s/ MICHAEL DORSEY
--------------------------------------------
Michael Dorsey
Chairman of the Board and Acting Chief
Executive Officer (principal
executive officer)
Date: September 28, 2000 By: /s/ GARY RUMMELHOFF
--------------------------------------------
Gary Rummelhoff
Chief Financial Officer and Vice
President Operations (principal
accounting officer)
Date: September 28, 2000 By: /s/ AZIZ VALLIANI
--------------------------------------------
Aziz Valliani
Director
Date: September 28, 2000 By: /s/ ROBB WILMOT
--------------------------------------------
Robb Wilmot
Director
By:
--------------------------------------------
Kevin Jost
Director
-28-
