<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
MARK ONE [1]
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ............ to .............
Commission File Number 0-8345
---------------------------
4FRONT SOFTWARE INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 84-0675510
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5650 Greenwood Plaza Blvd., Suite 107
Englewood, Colorado 80111
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 721-7341
---------------------------
Securities registered pursuant to Section 12(b) of the Act: None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, PAR VALUE $.001 PER SHARE
(TITLE OF CLASS)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
----- -----
The number of shares outstanding of each of the Registrant's classes of Common
Stock at May 8, 1997 was 6,514,747 shares of Common Stock, no par value.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
4FRONT SOFTWARE INTERNATIONAL, INC. AND SUBSIDIARIES
THREE MONTH PERIOD ENDED APRIL 30, 1997
TABLE OF CONTENTS
PAGE
NUMBER
CONSOLIDATED FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets as of January 31, 1997
and April 30, 1997 (unaudited) 1
Condensed Consolidated Statements of Operations for the
three months ended April 30, 1996 and 1997 (unaudited) 3
Condensed Consolidated Statements of Changes in Stockholders'
Equity for the three months ended April 30, 1997 (unaudited) 4
Condensed Consolidated Statements of Cash Flows for the
three months ended April 30, 1996 and 1997 (unaudited) 5
Notes to the Condensed Consolidated Financial Statements 6
<PAGE>
4FRONT SOFTWARE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
JANUARY 31, APRIL 30,
1997 1997
----------- -----------
(UNAUDITED)
CURRENT ASSETS:
Cash $ 6,652,888 $ 6,703,947
Accounts receivable, net of allowance
for doubtful accounts of $273,205 and
$309,211 respectively 15,365,270 13,919,520
Deposits 30,843 31,230
Inventories 7,132,470 7,826,231
Prepaid expenses 904,838 1,052,781
Income taxes receivable 32,122 26,190
Other current assets 230,410 187,014
----------- -----------
Total current assets 30,348,841 29,746,913
PROPERTY AND EQUIPMENT, net 2,050,485 2,075,722
INVESTMENT IN AND ADVANCES
TO EQUITY INVESTEE 143,422 145,221
RECEIVABLE, RELATED PARTY 644,356 644,356
INTANGIBLE ASSETS, net 7,777,448 7,682,183
DEFERRED INCOME TAX 973,511 837,690
OTHER ASSETS 83,332 84,375
----------- -----------
TOTAL ASSETS $ 42,021,395 $ 41,216,460
----------- -----------
----------- -----------
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
- 1 -
<PAGE>
4FRONT SOFTWARE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
JANUARY 31, APRIL 30,
1997 1997
----------- -----------
(UNAUDITED)
CURRENT LIABILITIES:
Accounts payable $ 13,057,511 $ 11,567,220
Accrued liabilities 2,483,160 2,089,154
Stockholder advances 504,105 504,105
Lines of credit-bank 1,176,848 3,383,035
Capital lease obligations, current portion 545,903 416,411
Income taxes payable 493,495 562,260
Deferred revenue 6,503,043 4,895,259
----------- -----------
Total current liabilities 24,764,065 23,417,444
CAPITAL LEASE OBLIGATIONS, less current
portion 488,795 421,333
----------- -----------
TOTAL LIABILITIES 25,252,860 23,838,777
----------- -----------
COMMITMENTS AND CONTINGENCIES:
STOCKHOLDERS' EQUITY:
Preferred stock, par value $.001, 5,000,000
shares authorized. No shares issued or
outstanding - -
Common stock, par value $.001, 30,000,000
shares authorized 6,514,747 and 6,514,747
shares issued and outstanding, respectively 22,988,088 22,988,088
Accumulated (deficit) (6,222,386) (5,591,710)
Cumulative foreign currency translation
adjustment 2,833 (18,695)
----------- -----------
Total stockholders' equity 16,768,535 17,377,683
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 42,021,395 $ 41,216,460
----------- -----------
----------- -----------
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
- 2 -
<PAGE>
4FRONT SOFTWARE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
APRIL 30, 1996 APRIL 30, 1997
--------------- --------------
(UNAUDITED) (UNAUDITED)
REVENUES
Products $ 7,328,339 $ 10,427,687
Services 3,221,899 8,196,598
---------- ----------
10,550,238 18,624,285
---------- ----------
Cost of Products 6,002,795 8,880,689
Cost of Services 1,276,346 4,148,921
---------- ----------
7,279,141 13,029,610
---------- ----------
GROSS PROFIT
Products 1,325,544 1,546,998
Services 1,945,553 4,047,677
---------- ----------
3,271,097 5,594,675
---------- ----------
OPERATING EXPENSES
Selling, general and administrative
expenses 2,712,078 4,354,626
Depreciation 80,959 195,166
Amortization 61,870 210,481
---------- ----------
Total operating expenses 2,854,907 4,760,273
---------- ----------
INCOME BEFORE INTEREST, INCOME
TAXES, AND SHARE OF RESULTS IN
EQUITY INVESTEE: 416,190 834,402
Interest income 3,841 77,644
Interest expense (103,614) (71,145)
---------- ----------
INCOME BEFORE INCOME TAXES AND
SHARE OF RESULTS IN EQUITY
INVESTEE: 316,417 840,901
SHARE OF OPERATING (LOSS) OF
EQUITY INVESTEE (52,173) -
---------- ----------
INCOME BEFORE INCOME TAXES 264,244 840,901
INCOME TAXES 66,061 210,225
---------- ----------
NET INCOME $ 198,183 $ 630,676
---------- ----------
NET INCOME PER COMMON SHARE (BASIC) $ 0.07 $ 0.10
NET INCOME PER COMMON SHARE (DILUTED) $ 0.05 $ 0.09
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
-3-
<PAGE>
4FRONT SOFTWARE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Foreign
Common Stock Currency
------------------------ Accumulated Translation
Shares Amount (Deficit) Adjustment Total
------ ------ ----------- ---------- -------
<S> <C> <C> <C> <C> <C>
BALANCE, JANUARY 31, 1997 6,514,747 $ 22,988,088 $ (6,222,386) $ 2,833 $ 16,768,535
Net income for
period (unaudited) - - 630,676 - 630,676
Foreign currency
translation adjustment - - - (21,528) (21,528)
--------- ---------- ----------- -------- -----------
BALANCE, APRIL 30, 1997 6,514,747 $ 22,988,088 $ (5,591,710) $(18,695) $ 17,377,683
(UNAUDITED) --------- ---------- ----------- -------- -----------
--------- ---------- ----------- -------- -----------
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
- 4 -
<PAGE>
4FRONT SOFTWARE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
APRIL 30, 1996 APRIL 30, 1997
-------------- --------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 198,183 $ 630,676
Adjustments to reconcile net income to net cash
provided (used) by operating activities
Depreciation 80,959 195,166
Amortization 61,870 210,481
Share of operating loss of equity investee 52,173 -
Gain on disposal of fixed assets (19,448) (22,752)
(Increase) decrease in accounts receivable (387,936) 1,445,750
Decrease (increase) in deposits 3,086 (387)
(Increase) in inventories (498,943) (693,761)
Decrease (increase) in prepaid expenses 81,520 (147,943)
Increase in income taxes 53,467 74,697
(Increase) decrease in other current assets (20,424) 43,396
Decrease in deferred income tax - 135,821
Increase (decrease) in accounts payable 382,614 (618,955)
(Decrease) in accrued liabilities (152,869) (394,006)
(Decrease) in deferred revenue (427,109) (1,607,784)
---------- -----------
Net cash used by operating activities (592,857) (749,601)
---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment (101,762) (223,429)
Proceeds from disposal of equipment 28,894 25,778
Acquisition of subsidiaries - (986,552)
Investment in and advances to equity investee (43,250) (1,799)
Decrease (increase) in other assets 30,214 (1,043)
---------- -----------
Net cash used by investing activities (85,904) (1,187,045)
---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in lines of credit-bank 535,228 2,206,187
Repayment of notes payable (394,169) -
(Increase) in deferred offering costs (232,524) -
Payments of capital lease obligations (23,559) (196,954)
Net proceeds from exercise of share options 536 -
---------- -----------
Net cash from (used by) financing activities (114,488) 2,009,233
---------- -----------
Effect of exchange rate changes on cash (36,985) (21,528)
---------- -----------
NET (DECREASE) INCREASE IN CASH (830,234) 51,059
Cash at beginning of period 1,391,644 6,652,888
---------- -----------
Cash at end of period $ 561,410 $ 6,703,947
---------- -----------
---------- -----------
Cash paid for interest expense $ 103,614 $ 71,145
---------- -----------
---------- -----------
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
- 5 -
<PAGE>
4FRONT SOFTWARE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - NATURE OF BUSINESS
4Front Software International, Inc. and subsidiaries (the "Company" or "4Front")
is a UK based specialized computer services company. The Company provides key
elements of distributed computing, including systems development and
integration, storage and client-server solutions and products, as well as
hardware and software support and help desk services.
NOTE 2 - BASIS OF PRESENTATION
The accompanying interim unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, the accompanying interim unaudited condensed
consolidated financial statements contain all material adjustments consisting
only of normal recurring adjustments necessary to present fairly the financial
condition, the results of operations, the changes in stockholders' equity and
cash flows of 4Front Software International Inc. for the interim periods
presented.
The results of the three months ended April 30, 1997 are not necessarily
indicative of the results of operations for the full year. These interim
unaudited condensed consolidated financial statements and related footnotes
should be read in conjunction with the financial statements and footnotes
thereto included in the Company's Form 10-K and its Annual Report to
Shareholders for the year ended January 31, 1997.
NOTE 3 - ADOPTION OF NEW STANDARDS
SFAS No. 128, EARNINGS PER SHARE, was issued in February 1997. This Statement
simplifies the standards for computing earnings per share previously found in
APB Opinion No. 15, Earnings per Share, and makes them more comparable to
international EPS standards. Statement 128 replaces the presentation of primary
EPS with a presentation of basic EPS. In addition, the Statement requires dual
presentation of basic and diluted EPS on the face of the income statement for
all entities with complex capital structures and requires a reconciliation of
the numerator and denominator of the basic EPS computation to the numerator and
denominator of the diluted EPS computation. The Group has adopted Statement 128
for its financial statements.
The Company has adopted SFAS 128 EARNINGS PER SHARE, and in accordance with that
standard is showing basic and fully diluted earnings per share.
The computation for basic earnings per share is based on the net income divided
by the weighted average number of common shares outstanding for the period.
The Computation for diluted earnings per share is based on the Treasury Stock
Method.
- 6 -
<PAGE>
4FRONT SOFTWARE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
NOTE 3 - ADOPTION OF NEW STANDARDS (CONTD)
FOR THE MONTHS ENDED
--------------------
APRIL 30, 1996 APRIL 30, 1997
-------------- --------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
BASIC EARNINGS PER SHARE
Net income 198,183 630,676
--------- ---------
Weighted Average Number of Common Shares
outstanding 3,011,068 6,514,747
--------- ---------
Net income per Common Share Basic $0.07 $0.10
--------- ---------
--------- ---------
DILUTED EARNINGS PER SHARE
Net income 198,183 630,676
--------- ---------
Weighted Average Number of Common Shares
outstanding 3,011,068 6,514,747
Additional Shares to be Issued upon Assumed
Exercise of Options and Warrants 2,941,850 487,000
Shares Hypothetically Repurchased at the Average
Market Price with the Proceeds of Exercise (2,255,345) (306,049)
--------- ---------
Adjusted Shares for Dilution 3,697,573 6,695,698
--------- ---------
Net income per Common Share Diluted $0.05 $0.09
--------- ---------
--------- ---------
NOTE 4 - INVENTORIES
Inventories consist of the following: JANUARY 31, 1997 APRIL 30, 1997
---------------- --------------
(UNAUDITED)
Computer hardware $ 6,949,121 $ 7,693,409
Computer software 83,097 31,312
Work in progress 100,252 101,510
--------- ---------
$ 7,132,470 $ 7,826,231
--------- ---------
--------- ---------
</TABLE>
- 7 -
<PAGE>
4FRONT SOFTWARE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 - INCOME TAXES
The Company files a separate U.S. federal income tax return for its domestic
operations and a UK income tax return for its foreign operations. The United
Kingdom subsidiaries compute taxes at rates in effect in that country and
become payable when assessed by the Inland Revenue. Deferred federal income
taxes are not provided on the undistributed earnings of its foreign
subsidiaries to the extent the Company intends to permanently reinvest such
earnings in the United Kingdom.
The Company has provided income tax for the three months ended April 30,
1997 of $210,225 on the profits of its operations, and for the three months
to April 30, 1996 $66,061.
- 8 -
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
The Company is a UK based specialized computer services company which
provides a wide range of high-end Information Technology solutions and
services, principally to Financial Times UK Top 500 companies and government
authorities. The Company provides key elements of distributed computing,
including systems development and integration, storage and client-server
solutions and products, as well as extensive hardware and software support,
including help desk support services. The Company believes it has a
competitive advantage as a single-source, multivendor, multiple service
solution provider to a broad range of corporate computing needs.
Effective August 15, 1996, the Company acquired Hammer Distribution Limited
("Hammer"). Hammer is a supplier of storage solutions and computer
sub-systems. The Company believes that the acquisition of Hammer will assist
the Company in consolidating a leading position within the UK market for high
end storage solutions and sub-systems.
Effective October 11, 1996 the Company acquired Datapro Computers Group
Limited ("Datapro"). Datapro is a supplier of specialized services including
systems integration, hardware and software maintenance and systems support,
and other technology enabling services. The Company believes that the
acquisition of Datapro will assist the Company in strengthening its position
in the independent hardware maintenance industry.
RESULTS OF OPERATIONS
Because of the effect upon the Company's results of operations for the year
ended January 31, 1997 of acquisitions made during that period and
restructuring and reorganization, direct comparison of the Company's results
of operations for the periods ended April 30, 1996 and April 30, 1997 will
not, in the view of management of the Company, prove meaningful. Instead, a
summary of the elements which management of the Company believes essential to
an analysis of the results of operations for such periods is presented below.
THREE MONTHS ENDED APRIL 30, 1997 COMPARED WITH THE THREE MONTHS ENDED
APRIL 30, 1996
REVENUES
Revenues for the three months ended April 30, 1997 were $18.6 million, an
increase of $8.0 million, or approximately 76.5% compared to $10.6 million
for the three months ended April 30, 1996. Revenues from products were
$10.4 million, or 56% of the total revenue, with revenues from the supply of
services at $8.2 million, or 44% of the total revenues. In the comparable
period of the prior year, Product revenues were 69.5% of the total revenues
and supply of services were 30.5 % of the total revenues.
GROSS PROFIT
Gross profit for the three months ended April 30, 1997 was $5.6 million, an
increase of $2.3 million, or 71.0% compared to $3.3 million for the three
months ended April 30, 1996. Gross margin decreased from 31.0% for the three
months ended April 30, 1996 to 30.0% for the three months ended April 30,
1997. Gross profit for products increased 16.7% from $1.3 million for the
three months ended April 30, 1996 to $1.5 million for the three months to
April 30, 1997. Gross profit for services increased 108.0% from $1.9 million
for the three months ended April 30, 1996 to $4.0 million for the three
months ended April 30, 1997.
- 9 -
<PAGE>
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses were $4.4 million, an increase
of $1.7 million, or 60.5% compared to $2.7 million for the three months ended
April 30, 1996. As a percentage of revenues, selling, general and
administrative expenses decreased to 23.4% from 25.7% in the three months
ended April 30, 1996. Selling general and administrative expenses increased
primarily as a result of a growth in infrastructure necessary to support the
expansion of the Company's businesses.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization expense for the three months ended April 30,
1997 was $406,000, an increase of $263,000, or 64.7% compared to $143,000 for
the three months ended April 30, 1996. This increase arose principally from
the acquisitions of Hammer and Datapro acquired in August 1996 and October
1996, respectively. Depreciation was $195,000, an increase of $114,000 or
141.1%, from $81,000 for the prior period. Amortization of goodwill from
acquisitions was $210,000, an increase of $148,000, or 240.2%, from $62,000
for the prior period. An amortization period of ten years is utilized with
respect to acquisitions.
INCOME BEFORE INTEREST EXPENSE, INCOME TAXES AND SHARE OF RESULTS IN EQUITY
INVESTEE
Income before interest expense, income taxes and share of results in equity
investee ("IBITI") for the three months ended April 30, 1997 was $834,000, a
increase of $418,000, or 100.4%, as compared to $416,000 for the three months
ended April 30, 1996. As a percentage of revenues, IBITI increased to 4.5%
in the three months ended April 30, 1997 as compared to 3.9% for the three
months ended April 30, 1996.
IBITI before depreciation and amortization increased for the three months
ended April 30, 1997 to $1.24 million from $559,000 for the three months
ended April 30, 1996 an increase of $681,000 or 121.8%. As a percentage of
revenues, IBITIDA increased to 6.6% for the three month period ended April
30, 1997 from 5.3% for the comparable period ended April 30, 1996.
EQUITY INVESTEE LOSS
Equity investee loss was $52,000 for the three months ended April 30, 1996
reflecting the Company's proportion attributable to the ActionTrac Joint
Venture. There was no such loss during the three months ended April 30, 1997
as the Company ceased its participation in the ActionTrac Joint Venture due
to the bankruptcy of the other party to the Joint Venture.
INTEREST
Interest expense for the three months ended April 30, 1997 was $71,000 a
decrease of $33,000 or 31.3% compared to $104,000 for the three months ended
April 30, 1996, arising from lower utilization of bank lines of credit during
the period. Interest income increased from $4,000 for the three months ended
April 30, 1996 to $78,000 an increase of $74,000, arising from larger cash
balances on hand during the quarter.
LIQUIDITY AND CAPITAL RESOURCES
From inception until June 1996, the Company's sources of capital had been
cash flows from operations, private placements of securities, primarily from
its controlling stockholders and related parties, and borrowings from banks.
On June 19, 1996, the Company completed a public offering (the "Offering") of
3,000,000 shares of the Company's Common Stock at a price of $5.75 per share.
On July 9, 1996 the Company completed the sale of a further 450,000 shares,
pursuant to the underwriters' over-allotment option. As a result of this
offering the Company raised net proceeds of $16.0 million.
As of April 30, 1997, the Company had lines of credit with UK banks in the
amount of L2.3 million ($3.8 million). As of April 30, 1997 $3.4 million was
outstanding.
- 10 -
<PAGE>
The outstanding credit facilities are secured by the assets of the Company
and are periodically reviewed by the issuing institution. Management expects
to be able to maintain these credit arrangements for the foreseeable future,
although no assurance can be given.
Outstanding advances from stockholders are shown on the Company's balance
sheet as stockholder advances. Outstanding advances as of April 30, 1997
were $504,105. These outstanding advances do not bear interest, and are
payable on demand.
The Company's working capital increased from $5.6 million surplus at January
31, 1997 to a surplus of $6.3 million at April 30, 1997.
Net cash used by operating activities during the three months ended April 30,
1997 was $750,000, which reflected the net effect of a decrease in accounts
payable, accrued liabilities, accounts receivable and deferred revenue and an
increase in inventories. Net cash used by investing activities was $1.2
million, for the three months ended April 30, 1997, primarily reflecting cash
used for the payment of contingent amounts due on the Hammer acquisition and
for the purchase of equipment. Net cash provided by financing activities was
$2.0 million for the three months ended April 30, 1997, resulting primarily
from increase of bank lines of credit and payments of outstanding obligations.
The Company believes that the net cash flows from operations and borrowing
availability under its credit facilities, will satisfy the Company's
anticipated working capital requirements through at least the next twelve
months. To the extent the Company raises additional capital by issuing
equity or convertible debt securities, ownership dilution to the Company's
stockholders will result. In the event that adequate funds are not
available, the Company's business may be adversely affected.
INFLATION
Inflation has not had a material effect upon the Company's results of
operations to date. In the event the rate of inflation should accelerate in
the future, it is expected that costs in connection with the provision by the
Company of its services and products will increase, and, to the extent such
increased costs are not offset by increased revenues, the operations of the
Company may be adversely affected.
- 11 -
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable
Item 2. Change In Securities
Not Applicable
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Stockholders was held on February 5, 1997
(b) The following directors were re-elected at the Annual Meeting of
Stockholders:
Anil Doshi
Mark Ellis
Kenneth Newell
Craig Kleinman
Arthur Keith Ross
Brian V. Murray
(c) Such directors received the votes indicated:
FOR WITHELD
--- -------
Anil Doshi 5,079,963 27,188
Mark Ellis 5,079,965 27,186
Kenneth Newell 5,084,965 22,186
Craig Kleinman 5,083,965 23,186
Arthur Keith Ross 5,084,928 22,223
Brian V. Murray 5,084,922 22,229
Approval of the Company's Re-Incorporation in Delaware was
approved by the vote indicated:
FOR AGAINST ABSTAIN NOT VOTED
--- ------- ------- ---------
3,644,010 234,019 1,552 1,227,570
Approval of the Company's 1996 Equity Incentive Plan was approved
by the vote indicated:
FOR AGAINST ABSTAIN NOT VOTED
--- ------- ------- ---------
3,393,053 473,002 13,526 1,227,570
Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K
Not Applicable
- 12 -
<PAGE>
4FRONT SOFTWARE INTERNATIONAL, INC. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed by the undersigned,
thereunto duly authorized.
May 10, 1997 4FRONT SOFTWARE
INTERNATIONAL, INC.
By: /s/ Stephen McDonnell
-------------------------
Stephen McDonnell
Chief Financial Officer
- 13 -
