SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM 8-K/A
Amendment No. 1
to
Form 8-K
as filed on November 8, 2006
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
PAR TECHNOLOGY CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-09720 16-1434688
----------------- --------------------- -------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
PAR Technology Park, 8383 Seneca Turnpike, New Hartford, NY 13413-4991
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (315) 738-0600
--------------
Not applicable
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)
Item 2.01. Acquisition or Disposition of Assets.
PAR Technology Corporation hereby amends its Current Report on Form 8-K
originally filed with the United States Securities and Exchange Commission on
November 8, 2006 relating to the acquisition of SIVA Corporation to include the
financial statements of the business acquired, the pro forma financial
information and related exhibits as set forth below.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
1. The audited consolidated financial statements of SIVA Corporation
as of and for the year ended December 31, 2005 are filed with
this report as Exhibit 99.1.
2. The unaudited interim consolidated financial statements of SIVA
Corporation as of September 30, 2006 for the three and nine
months ended September 30, 2006 and 2005 are filed with this
report as Exhibit 99.2.
(b) Pro forma Financial Information.
1. The unaudited pro forma Consolidated Statements of Income for the
year ended December 31, 2005 and for the nine months ended
September 30, 2006 and the unaudited pro forma Consolidated
Balance Sheet as of September 30, 2006 are filed with this report
as Exhibit 99.3.
(c) Exhibits.
Exhibit
Number Description
------ -----------
99.1 The audited consolidated financial statements of SIVA Corporation
as of and for the year ended December 31, 2005.
99.2 The unaudited interim consolidated financial statements of SIVA
Corporation as of September 30, 2006 and for the three and nine
months ended September 30, 2006 and 2005.
99.3 The unaudited pro forma Consolidated Statements of Income for the
year ended December 31, 2005 and for the nine months ended
September 30, 2006 and the unaudited pro forma Consolidated
Balance Sheet as of September 30, 2006.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PAR TECHNOLOGY CORPORATION
Date: January 18, 2007 By: /s/ Ronald J. Casciano
-------------------------------
Ronald J. Casciano
Vice President, Chief Financial
Officer and Treasurer
EXHIBIT INDEX
Exhibit
Number Description
------ -----------
99.1 The audited consolidated financial statements of SIVA Corporation
as of and for the year ended December 31, 2005.
99.2 The unaudited interim consolidated financial statements of SIVA
Corporation as of September 30, 2006 and for the three and nine
months ended September 30, 2006 and 2005.
99.3 The unaudited pro forma Consolidated Statements of Income for the
year ended December 31, 2005 and for the nine months ended
September 30, 2006 and the unaudited pro forma Consolidated
Balance Sheet as of September 30, 2006.
EX-99.1 The audited consolidated financial statements of SIVA Corporation
as of and for the year ended December 31, 2005.
SIVA CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31, 2005
(GRAPHIC OMITTED)
SIVA CORPORATION
TABLE OF CONTENTS
INDEPENDENT AUDITOR'S REPORT
FINANCIAL STATEMENTS
Consolidated Balance Sheet
Consolidated Statement of Operations
Consolidated Statement of Changes in Stockholders' Deficit
Consolidated Statement of Cash Flows
Notes to Consolidated Financial Statements
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of
SIVA Corporation
We have audited the accompanying consolidated balance sheet of SIVA Corporation
(a C corporation) as of December 31, 2005, and the related consolidated
statements of operations, changes in stockholders' deficit, and cash flows for
the year 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 audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on 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 audit provides 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 SIVA Corporation as of December
31, 2005, and the results of its operations and its cash flows for the year then
ended in conformity with accounting principles generally accepted in the United
States of America.
/s/Kramer Weisman and Associates, LLP
Davie, Florida
December 21, 2006
SIVA CORPORATION
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2005
ASSETS
Current assets:
Cash and cash equivalents .......................................... $ 89,704
Accounts receivable, less allowance for doubtful accounts of $38,494 287,897
Other current assets ............................................... 77,689
------------
Total current assets ........................................ 455,290
Property and equipment, net .................................................. 275,768
Intangible assets, net ....................................................... 1,505,917
Security deposits ............................................................ 22,419
------------
Total assets ................................................ $ 2,259,394
============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Notes payable ...................................................... $ 6,199,197
Accounts payable ................................................... 275,989
Current portion of capital lease obligations ....................... 3,350
Accrued expenses and other current liabilities ..................... 1,017,999
Deferred revenue ................................................... 99,043
------------
Total current liabilities ................................... 7,595,578
Capital lease obligation ..................................................... 10,792
------------
Total liabilities ........................................... 7,606,370
------------
Commitments and contingencies --
Stockholders' deficit:
Series A preferred stock, $0.001 par value
2,475,000 shares authorized, issued and outstanding ............ 2,475
Series B preferred stock, $0.001 par value
10,000,000 shares authorized, 4,547,376
shares issued and outstanding .................................. 4,547
Series C preferred stock, $0.001 par value
12,500,000 shares authorized, 12,360,464
shares issued and outstanding .................................. 12,360
Common stock, $0.001 par value;
250,000,000 shares authorized, 60,077,025
shares issued and outstanding .................................. 60,077
Additional paid-in capital ......................................... 8,545,240
Accumulated deficit ................................................ (13,971,675)
------------
Total stockholders' deficit ................................. (5,346,976)
------------
Total liabilities and stockholders' deficit ................. $ 2,259,394
============
The accompanying notes are an integral part of this consolidated financial
statement.
SIVA CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2005
Revenues:
Software ....................... $ 943,826
Service and support ............ 1,018,399
-----------
Total revenues ......... 1,962,225
-----------
Cost of sales:
Service and support ............ 18,485
-----------
Gross margin ................... 1,943,740
-----------
Operating expenses:
Sales and marketing ............ 247,733
General and administrative ..... 2,992,556
Software development costs ..... 2,329,326
Depreciation and amortization .. 574,257
-----------
Total operating expenses 6,143,872
-----------
Operating loss ........................... (4,200,132)
Interest expense, net .................... (652,967)
-----------
Net loss ................................. $(4,853,099)
===========
The accompanying notes are an integral part of this consolidated financial
statement.
SIVA CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 2005
Common Stock Preferred Stock Additional
--------------------- ------------------------------- Paid-in Accumulated
Shares Amount Series A Series B Series C Capital Deficit Total
---------- --------- -------- -------- -------- ----------- ------------ ----------
Balance at December 31, 2004 59,435,384 $ 59,435 $ 2,475 $ 4,547 $ 12,360 $ 8,468,884 $ (9,118,576) $ (570,875)
Issuance of shares to vendor 641,641 642 -- -- -- 76,356 -- 76,998
Net loss -- -- -- -- -- (4,853,099) (4,853,099) (4,853,099)
------------ -------- -------- -------- --------- ----------- ------------ ----------
Balance at December 31, 2005 60,077,025 $ 60,077 $ 2,475 $ 4,547 $ 12,360 $ 8,545,240 $(13,971,675) $(5,346,976)
============ ======== ======== ======== ========= =========== ============ ===========
The accompanying notes are an integral part of this consolidated financial
statement.
SIVA CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2005
Cash flows from operating activities:
Net loss ....................................................... $(4,853,099)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization ............................ 574,257
Provision for bad debts .................................. 48,020
Changes in assets and liabilities:
Increase in accounts receivable .......................... (276,699)
Increase in other current assets ......................... (44,385)
Increase in security deposits ............................ (15,809)
Increase in accounts payable ............................. 49,508
Increase in accrued expenses and other current liabilities 779,552
Increase in deferred revenue ............................. 34,043
-----------
Net cash used in operating activities ................. (3,704,612)
-----------
Cash flows from investing activities:
Capital expenditures ...................................... (84,160)
Software assets acquired .................................. (6,000)
-----------
Net cash used in investing activities (90,160)
-----------
Cash flows from financing activities:
Principal payments on notes ............................... (913,209)
Proceeds from issuance of short term notes ................ 4,742,391
Payments under capital lease obligations .................. (1,233)
Proceeds from capital lease obligation .................... 15,375
-----------
Net cash provided by financing activities ............. 3,843,324
-----------
Net increase in cash
48,552
Cash, beginning of year ........................................... 41,152
-----------
Cash, end of year ................................................. $ 89,704
===========
Supplemental Schedule of Cash Related Activities:
Interest paid ................................................... $ 19,709
===========
Non- cash activity:
Accounts payable converted to note payable ...................... $ 175,986
===========
Shares of common stock issued to a vendor in lieu of payment .... $ 76,998
===========
The accompanying notes are an integral part of this consolidated financial
statement.
SIVA CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2005
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Consolidation
The consolidated financial statements include the accounts of SIVA
Corporation and its wholly owned subsidiary, Atlas Technology Holdings
Inc., collectively referred to as the "Company." All significant
intercompany balances and transactions have been eliminated in
consolidation.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions. These assumptions, if not realized, could 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 revenue and expenses during the
reporting period. Actual results could differ from those estimates.
Income Taxes
Income taxes are accounted for under the asset and liability method,
in accordance with Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes" (SFAS 109). Deferred tax assets and
liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax
liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets
and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date.
Cash Equivalents
The Company considers all highly liquid investments with original
maturities of three months or less to be cash equivalents. Cash and
cash equivalents in the accompanying consolidated balance sheet were
$89,704 at December 31, 2005.
Stock-based Employee Compensation
In 2001, the Company adopted a stock-based employee compensation plan,
which is more fully described in Note 7. The Company currently
accounts for its stock-based compensation plan using the intrinsic
value method prescribed by Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees. In December 2004, the FASB
issued SFAS 123 (revised 2004), "Share-Based Payment", (SFAS 123R).
SFAS 123R requires measurement of all employee stock-based
compensation awards using a fair-value method and the recording of
such expense in the consolidated financial statements. In addition,
the adoption of SFAS 123R requires additional accounting related to
the income tax effects and disclosure regarding the cash flow effects
resulting from share-based payment arrangements.
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
In January 2005, the SEC issued Staff Bulletin No. 107, which provides
supplemental implementation guidance for SFAS 123R. For non-public
entities FAS 123R is effective as of the beginning of the first annual
reporting period that begins after December 15, 2005. Since the
Company was not required to adopt the fair-value based recognition
provision prescribed under FAS 123R, it has elected only to comply
with the Statement's disclosure requirements. No stock-based employee
compensation cost is reflected in the results of operations, as all
options granted under the Company's plan had an exercise price equal
to the fair value of the common stock on the date of grant.
Property and Equipment
Property, plant and equipment are stated at cost and depreciated using
the straight-line method over their estimated useful lives; five
years. Leasehold improvements are amortized over the life of the lease
or estimated useful lives, whichever is shorter. Equipment under
capital leases are depreciated over the life of the lease. Maintenance
and repairs are charged to expense as incurred, and the costs of
additions and improvements are capitalized. Any gain or loss from the
retirement or sale of an asset is credited or charged to operations.
Advertising Costs
The Company follows the provisions of Statement of Position (SOP)
93-7, "Reporting on Advertising Costs," in accounting for advertising
costs. Advertising costs are charged to expense as incurred and are
included in sales and marketing expenses in the accompanying financial
statements. Total advertising expenses for the year ended December 31,
2005 were $46,192.
Revenue Recognition
The Company accounts for revenue using the guidance from SEC Staff
Accounting Bulletin No. 104, "Revenue Recognition"; SOP 81-1,
"Accounting for Performance of Construction-Type and Certain
Production-Type Contracts" and SOP 97-2, "Software Revenue
Recognition", and other applicable revenue recognition guidance and
interpretations.
The Company recognizes revenue when persuasive evidence of an
arrangement exists, delivery has occurred, the fee is fixed or
determinable, and collectibility is probable. In instances where the
customer specifies final acceptance criteria, revenue is deferred
until all acceptance criteria are met. The Company reduces revenue for
contracted future maintenance services where applicable.
Hardware and Third Party Software
Revenue from hardware and third party software sales is recognized at
the time of shipment.
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Software
The company recognizes the revenue allocable to software licenses and
software maintenance contracts based on delivery, implementation and
customer acceptance criteria. Revenue is recognized as appropriate for
each customer.
Services
Professional service fee revenue is generally recognized when services
are performed and invoiced or, if paid in advance, are recognized in
future periods as performed and invoiced. The percentage of completion
method is used for long-term contracts.
Multiple-element arrangements
The Company enters into transactions that include multiple-element
arrangements, which can include any combination of hardware, software
and/or services. When vendor-specific objective evidence of fair value
of undelivered elements is established and the functionality of
delivered elements is not dependent on the undelivered elements,
revenue for the delivered elements is recognized using the accounting
methods discussed above. Otherwise, revenue is recognized under the
percentage of completion method.
Accounts Receivable
Accounts receivable are due from customers and are generally
unsecured. The carrying amount of accounts receivable is reduced by an
allowance for doubtful accounts that reflects management's best
estimate of the amounts that will not be collected. The Company
provides for credit losses based on management's evaluation of
collectibility including current and historical performance, credit
worthiness and experience with each customer. The allowance for
doubtful accounts at December 31, 2005 was $38,494.
Maintenance and Warranty Liabilities
The Company's products are sold with a standard warranty for defects
and the right to product maintenance upgrades for a standard period of
one year, although the period may vary. The Company defers maintenance
revenue on the sale of software licenses for the period specified in
the contract based on maintenance fees in effect at the time the
contract is executed.
Software Development Costs
The Company does not capitalize costs related to the development of
computer software and expenses all salaries and related costs as
incurred.
Software Purchase Costs
The Company has acquired the full rights to or unlimited licenses for
several key software products that are sold to third parties as part
of the Company's suite of product offerings. The acquisition costs of
these products and licenses are capitalized and amortized over their
useful lives, currently five years.
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Pronouncements
In June 2006, FASB issued FASB Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes - an interpretation of FASB Statement No.
190" (FIN No. 48). FIN No. 48 clarifies the accounting for uncertainty
in income taxes by prescribing a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a
tax position taken or expected to be taken in a tax return. The
interpretation also provides guidance on derecognition,
classification, interest and penalties, accounting during interim
periods and disclosure. FIN No. 48 is effective for fiscal years
beginning after December 15, 2006. The Company is in the process of
evaluating the impact of FIN No. 48 on its financial condition and
results of operations.
In September 2006, FASB issued FASB Statement No. 157 "Fair Value
Measurements" (FAS 157). This new standard provides guidance for using
fair value to measure assets and liabilities. Under FAS 157, fair
value refers to the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market
participants in the market in which the reporting entity transacts. In
this standard, the FASB clarifies the principle that fair value should
be based on the assumptions market participants would use when pricing
the asset or liability. In support of this principle, FAS 157
establishes a fair value hierarchy that prioritizes the information
used to develop those assumptions. The fair value hierarchy gives the
highest priority to quoted prices in active markets and the lowest
priority to unobservable data, for example, the reporting entity's own
data. Under the standard, fair value measurements would be separately
disclosed by level within the fair value hierarchy. The provisions of
FAS 157 are effective for financial statements issued for fiscal years
beginning after November 15, 2007, and interim periods within those
fiscal years. The Company has not yet determined the impact that the
adoption of FAS 157 will have on its consolidated financial position,
results of operations or cash flows.
NOTE 2 NATURE OF BUSINESS AND CONCENTRATION OF CREDIT RISK
The Company derives revenue from proprietary software license fees,
software maintenance fees, professional services, customer support
services and sales of third-party produced hardware and software.
Products
The Company's core product, the iSIVA(TM) point-of-sale and
back-office software suite, is the first enterprise-integrated and
Internet-enabled offering built for the restaurant industry.
Leveraging this core enterprise engine, the Company has engineered a
broad range of innovative products that drive automation and improved
performance at the restaurant and throughout the enterprise
information hierarchy, including the Touchmark(R) point-of-sale
NOTE 2 NATURE OF BUSINESS AND CONCENTRATION OF CREDIT RISK (Continued)
system, IntelliKitchen(R) kitchen management system, POS(2) wireless
ordering system, Pay@Table(TM) wireless payment processing system, and
a number of innovative technologies designed to increase access to
operations intelligence and improve the guest experience. Through a
subsidiary, the Company also sells a middleware product known as X
Message Server targeted at the multi-unit data gathering market. The
Company's technologies provide its customers significant advantages in
the areas of architecture, choice and scope.
The Company believes its technology offers significant competitive
advantages in the areas of architecture, open standards and real-time
business intelligence. Designed in the age of the Internet, Java,
Linux, and low-cost communication infrastructures, the Company's
technologies are built around an enterprise database which provides
centralized configuration and deployment of information to the site as
well as real-time synchronization of transaction information from the
site to the enterprise. The applications are agnostic when it comes to
hardware, database, and operating systems; they operate with any
vendor's hardware offering and virtually any operating system. The
applications also work with any SQL-92 compliant database. Finally,
the Company's applications are built from the ground up to handle the
real-time acquisition and analysis of transactional information.
Market Served
The Company's current market focus is the U.S. foodservice segment of
retail technology. The Company primarily sells through its direct
sales force, but has several resellers and relationships with major
hardware vendors and non-competing service providers who market and
distribute the Company's products and services. These solutions have
widespread application in the greater retail space as well as in
industries as varied as healthcare and banking.
Line of Business
The Company develops and markets technology products for the food
service industry that enable better management of money, materials,
employees and the guest experience in a geographically dispersed
environment, resulting in improved profitability and customer
satisfaction. Focusing on site operations but with corporate-wide
deployment, the Company's enterprise applications improve on
traditional software designs by delivering information throughout the
organization and by reducing the cost and complexity normally
associated with system ownership. The Company primarily sells software
licenses, custom development, professional and installation services,
maintenance and help desk contracts, and in addition provides hosting
services and resells hardware. The Company also has arrangements with
certain hardware and other vendors that pay referral fees and provide
marketing support in specific circumstances.
NOTE 3 PROPERTY AND EQUIPMENT, NET
Property and equipment balances and estimated useful lives were as
follows:
Life
--------
Computers and office equipment. $ 331,021 5 years
Office furniture and fixtures . 27,892 5 years
Software ...................... 20,052 5 years
Other equipment ............... 72,562 5 years
Leasehold improvements ........ 54,559 Lease period
Equipment under capital leases 15,375 4 years
---------
521,461
Less: Accumulated depreciation
and amortization ......... (245,693)
---------
Property and equipment, net ... $ 275,768
=========
Depreciation expense was $123,256 for the year ended December 31,
2005.
NOTE 4 INTANGIBLE ASSETS, NET
Intangible assets consist primarily of computer software assets. The
unamortized balance of intangible assets was $1,505,917 at December
31, 2005 and amortization expense for the year ended December 31, 2005
was $451,001.
Amortization expense is computed using the straight-line method over
the useful life of five years. Amortization expense for the five
succeeding fiscal years and thereafter is as follows:
Future amortization of intangible assets is as follows:
2006 $ 460,000
2007 460,000
2008 425,000
2009 160,000
2010 1,000
Later years --
----------
$1,506,000
==========
NOTE 5 DEBT
Debt consists of the following:
2004 promissory notes; 12% interest due monthly, beginning November
2004; 16% default interest rate per annum; principal payments due
quarterly beginning September 2005; loan is in default. $ 1,089,029
2004 and 2005 secured promissory notes; 15% interest rate per annum;
18% default interest rate per annum; principal and interest due at
maturity; maturity is earlier of May 25, 2005 or the closing of the
sale of the Company; loan is in default. 1,504,418
March 2005 promissory notes; 15% interest rate per annum; 18% default
interest rate per annum; principal and interest due at maturity;
maturity is earlier of December 31, 2005 or the closing of the sale of
the Company; loan is in default. 1,586,493
June 2005 senior subordinated promissory notes; 15% interest due
monthly in arrears, beginning August 1, 2005; 18% default interest
rate per annum; maturity is earlier of June 20, 2006 or the closing of
the sale of the Company; loan is in default. 500,000
September 2005 senior subordinated promissory notes; 18% interest due
monthly in arrears, beginning January 1, 2006; 21% to 24% default
interest rate per annum; maturity is earlier of one year from date of
issuance or the closing of the sale of the Company or a major
refinancing of the Company. 647,222
December 2005 promissory notes; 5% interest rate per annum; 24%
default interest rate per annum; principal and interest due at
maturity; maturity is March 31, 2006. 660,841
December 2005 unsecured promissory note; 6% interest rate per annum;
principal payments of $15,000 due monthly beginning January 10, 2006;
accrued interest due at maturity, December 10, 2006. 175,986
Unsecured promissory notes due from employees; 15% interest rate per
annum. 35,208
NOTE 5 DEBT (Continued)
Various capital leases, interest rates range from 10.5% to 13.97%,
monthly principal and interest payments, leases expire July 2009 to
September 2009. 14,142
------------
6,213,339
Less: current portion (6,202,547)
------------
Long-term debt, net $ 10,792
============
Future maturities on capital lease obligations are as follows as of
December 31, 2005:
2006 $ 3,350
2007 3,765
2008 4,231
2009 2,796
-----------
Total $ 14,142
===========
In connection with the Securities Purchase Agreement entered into on
March 31, 2006 (see note 10), all outstanding debt and accrued
interest at December 31, 2005 was satisfied; except for capital lease
obligations.
Warrants for 112,359,522 shares of Company stock, exercisable at
prices ranging from $0.05 to $0.1667, have been issued in conjunction
with the Company's notes payable.
NOTE 6 ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities include the following:
Interest payable $ 630,719
Other accrued expenses 263,647
Customer deposits payable 73,900
Accrued vacation 49,733
------------
$ 1,017,999
============
NOTE 7 STOCK OPTION PLAN
The Company has reserved 21,220,746 shares under its stock option
plan. Options under this Plan may be issued as incentive stock options
or nonqualified options. Stock options are nontransferable other than
NOTE 7 STOCK OPTION PLAN (Continued)
upon death. Option grants vest over a four year period after the grant
date and expire ten years after the date of the grant. There are
provisions for accelerated vesting in certain cases. Under the plan,
the exercise price of each option equals the estimated market price of
the Company's stock on the grant date. The fair value of each option
grant is estimated on the grant date using an option-pricing model
with the following weighted average assumptions used for grants:
dividend yield of 0%, risk-free interest rate ranging from 3.5% to
4.46% and expected lives of 4 years for the options.
As of December 31, 2005, there were 16,491,750 options outstanding
with exercise prices ranging from $0.05 to $0.12 per share. No shares
have been exercised since the inception of the plan. There were
1,105,000 options granted and 225,000 options forfeited during the
year ended December 31, 2005. At December 31, 2005 there were
4,728,996 options available for future grant.
Stock options outstanding at December 31, 2005 are summarized as
follows:
Exercise Remaining Exercisable
Price Shares Outstanding Contractual Life 12/31/05
-------- ------------------ ---------------- ----------
$0.050 12,131,108 4.8 years 12,131,108
$0.080 7,500 5.4 years 7,500
$0.097 200,000 7.0 years 150,000
$0.100 3,048,142 7.4 years 1,905,089
$0.120 1,105,000 9.5 years 201,146
---------- ----------
16,491,750 14,394,843
========== ==========
Pro forma information regarding net loss as if the Company had
accounted for employee stock options under the fair value method of
SFAS No. 123 is presented below. For purposes of pro forma
disclosures, the estimated fair value of the options is amortized to
expense over the options' vesting period. The effects of applying SFAS
No. 123 for providing pro forma disclosures are not likely to be
representative of the effects on reported net income (loss) for future
years, due to the impact of the staggered vesting periods of the
Company's stock option grants. The Company's pro forma information is
as follows.
Net loss as reported $ 4,853,099
Deduct: Total stock-based employee
compensation expense determined
under fair value based method for all
awards, net of related tax effects 23,630
-------------
Pro forma net loss $ 4,876,729
=============
NOTE 8 CONTINGENCIES
Operating Leases
The Company leases office furniture and equipment under various
operating leases. Lease expense during the year ended December 31,
2005 was $41,775. In addition, the Company rents office space in
Delray Beach, Florida under an operating lease that expires February
28, 2008. Rent expense during the year ended December 31, 2005 was
$226,447.
Future minimum rental payments required under the leases are as
follows:
2006 $ 262,577
2007 270,463
2008 43,786
2009 --
2010 --
Later years --
-----------
$ 576,826
===========
Employment Contracts
The Company has employment agreements with certain executive officers.
These agreements may obligate the Company to a severance amount equal
to one year's compensation should an executive leave the Company under
certain terms of the agreement.
NOTE 9 INCOME TAXES
Deferred tax assets and liabilities represent the future tax return
consequences of differences between the basis of assets and
liabilities for financial statement and income tax purposes, which
will either be deductible or taxable when the assets and liabilities
are recovered or settled. At December 31, 2005 deferred tax assets
relate primarily to the effects of tax loss carryforwards.
Deferred taxes consist of the following at December 31, 2005:
Deferred tax assets (non-current) $ 4,420,000
Valuation allowance (4,420,000)
------------
$ --
============
A valuation allowance of $4,420,000 was established at December 31,
2005 to eliminate the net deferred tax benefit as it was uncertain if
the tax benefits would ever be realized. The accompanying financial
statements do not reflect an income tax benefit from the current year
operating loss. No income taxes were paid by the Company in 2005.
NOTE 9 INCOME TAXES (Continued)
As of December 31, 2005, the Company had net operating loss
carryforwards approximating $13,000,000 that can be deducted against
future taxable income. These federal tax carryforwards expire at
various dates through 2025.
NOTE 10 SUBSEQUENT EVENTS
Securities Purchase Agreement
On March 31, 2006, the Company entered into a Securities Purchase
Agreement with Morganthau Accelerator Fund, L.P. and Jim Melvin
whereby the Company issued 4,926,378 and 656,850 shares of Series B-1
Convertible Preferred Stock, $0.001 par value, for $3.0 million and
$400,000, respectively. In order to close this transaction the Company
recapitalized its outstanding common stock, Series A, B and C
Preferred Stock, and all options and warrants outstanding.
Sale of Business Assets
On November 2, 2006 the Company sold substantially all its assets to
Par Technology Corporation (PAR), a leading provider of integrated
technology solutions to the hospitality industry for approximately
$6.7 million in cash and Par Technology common stock.
At closing, PAR paid the Company $5.65 million in cash and placed $1.1
million of PAR common stock (125,549 shares par value $0.02) into an
escrow account. The escrow amount will be held, invested and
distributed in accordance with an Escrow Agreement. Subject to any
such indemnification claims, the amount in escrow is to be delivered
to the Company on the second anniversary date of the closing.
In addition, PAR may be obligated to pay the Company a contingent
purchase price amount if a certain Software License and Distribution
Agreement of the Company is assumed by PAR during a specified period
of time after the closing. If PAR assumes the contract the Company
could be eligible to receive 15% of revenue collected by PAR under the
agreement, not to exceed $6.0 million.
[GRAPHIC OMITTED]
To the Board of Directors of
SIVA Corporation
We consent to the use of our report dated December 21, 2006, included herein
with respect to the consolidated balance sheet of SIVA Corporation as of
December 31, 2005, and the related consolidated statement of operations,
stockholders' deficit, and cash flow for the year ended December 31, 2005.
[GRAPHIC OMITTED]
/s/Kramer Weisman and Associates, LLP
Davie, Florida
December 21, 2006
EX-99.2 The unaudited interim consolidated financial statements of SIVA
Corporation as of September 30, 2006 and for the three and nine months
ended September 30, 2006 and 2005.
SIVA CORPORATION
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2006
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents ..................................... $ 20,008
Accounts receivable ........................................... 154,258
Other current assets .......................................... 111,081
------------
Total current assets ................................... 285,347
Property and equipment, net ............................................. 255,928
Intangible assets, net .................................................. 1,159,506
Security deposits ....................................................... 29,104
------------
Total assets ........................................... $ 1,729,885
============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Notes payable ................................................. $ 4,050,903
Accounts payable .............................................. 594,231
Current portion of capital lease obligations .................. 3,350
Accrued expenses and other current liabilities ................ 597,793
Deferred revenue .............................................. 494,782
------------
Total current liabilities
5,741,059
Capital lease obligation ................................................ 10,792
------------
Total liabilities ...................................... 5,751,851
------------
Commitments and contingencies ........................................... --
Stockholders' deficit:
Series A-1 preferred stock .................................... 1,565
Series B-1 preferred stock .................................... 2,612
Common stock, $0.001 par value; ............................... 2,508
Additional paid-in capital .................................... 13,681,220
Accumulated deficit ........................................... (17,709,871)
------------
Total stockholders' deficit ............................ (4,021,966)
------------
Total liabilities and stockholders' deficit ............ $ 1,729,885
============
See notes to unaudited interim consolidated financial statements.
SIVA CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the three months For the nine months
ended September 30, ended September 30,
--------------------------------------------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
Revenues:
Software .................... $ 62,475 $ 638,125 $ 936,844 $ 683,667
Service and support ......... 81,248 224,515 258,520 800,001
----------- ----------- ----------- -----------
Total revenues .......... 143,723 862,640 1,195,364 1,483,668
----------- ----------- ----------- -----------
Costs of sales:
Software .................... -- -- -- --
Service and support ......... 343 4,621 235,670 13,863
----------- ----------- ----------- -----------
Total cost of sales ..... 343 4,621 235,670 13,863
----------- ----------- ----------- -----------
Gross margin ................ 143,380 858,019 959,694 1,469,805
----------- ----------- ----------- -----------
Operating expenses:
Sales and marketing ......... 88,908 32,618 241,700 161,121
General and administrative .. 621,847 746,548 1,930,601 1,945,389
Software development costs .. 347,562 632,459 1,542,686 1,868,515
Depreciation and amortization 136,470 136,153 406,934 430,693
----------- ----------- ----------- -----------
Total operating expense . 1,194,787 1,547,778 4,121,921 4,405,718
----------- ----------- ----------- -----------
Operating loss ................... (1,051,407) (689,759) (3,162,227) (2,935,913)
Interest expense, net ............ (160,534) (220,269) (575,969) (458,920)
----------- ----------- ----------- -----------
Loss before provision for
income taxes ................... (1,211,941) (910,028) (3,738,196) (3,394,833)
Provision for income taxes ....... -- -- -- --
----------- ----------- ----------- -----------
Net loss ......................... $(1,211,941) $ (910,028) $(3,738,196) $(3,394,833)
=========== =========== =========== ===========
See notes to unaudited interim consolidated financial statements.
SIVA CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30,
(Unaudited)
2006 2005
------------ -------------
Cash flows from operating activities:
Net loss .................................................. $(3,738,196) $(3,394,833)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization ....................... 406,934 430,693
Provision for bad debts ............................. 190,630 --
Changes in operating assets and liabilities:
Accounts receivable ................................. (56,992) 5,247
Other current assets ................................ (33,389) (6,576)
Security deposits ................................... (6,684) (9,388)
Accounts payable .................................... 318,242 74,197
Accrued expenses and other current liabilities ...... (323,852) 310,510
Deferred revenue .................................... 395,739 (65,000)
----------- -----------
Net cash used in operating activities ............ (2,847,568) (2,655,150)
----------- -----------
Cash flows from investing activities:
Capital expenditures ................................. (40,684) (17,242)
----------- -----------
Net cash used in investing activities ............ (40,684) (17,242)
----------- -----------
Cash flows from financing activities:
Principal advances/(payments) on notes, net .......... 2,818,556 (913,209)
Proceeds from issuance of short term notes ........... -- 3,554,057
----------- -----------
Net cash provided by financing activities ........ 2,818,556 2,640,848
----------- -----------
Net decrease in cash ......................................... (69,696) (31,544)
Cash, beginning of period .................................... 89,704 41,152
----------- -----------
Cash, end of period .......................................... $ 20,008 $ 9,608
=========== ===========
Supplemental Schedule of Cash Related Activities:
Interest paid .............................................. $ 75,803 $ 80,000
=========== ===========
Non-cash activity:
Shares of common stock issued to a vendor in lieu of payment $ -- $ 76,998
=========== ===========
Conversion of debt to equity $ 4,966,851 $ --
=========== ===========
See notes to unaudited interim consolidated financial statements.
SIVA CORPORATION
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying unaudited interim consolidated financial statements
have been prepared by SIVA (the "Company") in accordance with
accounting principles generally accepted in the United States of
America for interim financial statements. Accordingly, these interim
financial statements do not include all information and footnotes
required by accounting principles generally accepted in the United
States of America for complete financial statements. In the opinion of
the Company such unaudited statements include all adjustments (which
comprise only normal recurring accruals) necessary for a fair
presentation of the results for such periods. The results of
operations for the three and nine months ended September 30, 2006 are
not necessarily indicative of the results of operations to be expected
for any future period. The unaudited interim consolidated financial
statements and notes thereto should be read in conjunction with the
audited consolidated financial statements and notes (included in this
SEC Form 8-K/A in Exhibit 99.1) as of and for the year ended December
31, 2005.
2. On November 2, 2006, PAR Technology Corporation (the "Company") and
its wholly owned subsidiary, Par-Siva Corporation (f/k/a PAR Vision
Systems Corporation) (the "Subsidary") acquired substantially all of
the assets and assumed certain liabilities of SIVA Corporation
("SIVA"). The purchase price of the assets was approximately $6.7
million. The purchase price consisted of $1.1 million worth of PAR
common stock (125,549 shares of PAR Technology Corporation common
stock) and the remainder in cash. The agreement provides for
additional contingent purchase price payments based on certain sales
based milestones and other conditions.
SIVA, based in Delray Beach, Florida, is a developer of software
solutions for multi-unit restaurant operations.
EX-99.3 The unaudited pro forma Consolidated Statements of Income for the year
ended December 31, 2005 and for the nine months ended September 30,
2006 and the unaudited pro forma Consolidated Balance Sheet as of
September 30, 2006.
On November 2, 2006, PAR Technology Corporation (the "Company") and
its wholly owned subsidiary, Par-Siva Corporation (f/k/a PAR Vision
Systems Corporation) (the "Subsidary") acquired substantially all of
the assets and assumed certain liabilities of SIVA Corporation
("SIVA"). The purchase price of the assets was approximately $6.9
million including estimated acquisition costs. The purchase price
consisted of $1.1 million worth of PAR common stock (125,549 shares of
PAR Technology Corporation common stock) and the remainder in cash.
The agreement provides for additional contingent purchase price
payments based on certain sales based milestones and other conditions.
SIVA, based in Delray Beach, Florida, is a developer of software
solutions for multi-unit restaurant operations.
PAR TECHNOLOGY CORPORATION AND SIVA CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
Year Ended December 31, 2005
(in thousands except per share amounts)
Acquisition Pro forma
PAR Technology SIVA Pro forma PAR Technology
Corporation Corporation Adjustments Corporation
------------------------------------------------------------------------
Net revenues:
Product $ 91,130 $ 944 $ $ 92,074
Service 58,327 1,018 59,345
Contract 56,182 -- 56,182
----------- ------------ ----------- -------------
205,639 1,962 207,601
----------- ------------ ----------- -------------
Costs of sales:
Product 53,443 -- 53,443
Service 44,205 18 44,223
Contract 52,405 -- 52,405
----------- ------------ ----------- -------------
150,053 18 150,071
----------- ------------ ----------- -------------
Gross margin 55,586 1,944 57,530
----------- ------------ ----------- -------------
Operating expenses:
Selling, general and administrative 30,867 3,364 34,231
Research and development 9,355 2,329 11,684
Amortization of identifiable
intangible assets 1,030 451 (116)(f) 1,365
----------- ------------ ----------- -------------
41,252 6,144 (116) 47,280
----------- ------------ ----------- -------------
Operating income (loss) 14,334 (4,200) 116 10,250
Other income, net 743 743
Interest expense (287) (653) (358)(g) (1,298)
----------- ----------- ----------- -------------
Income (loss) before provision for income taxes 14,790 (4,853) (242) 9,695
(Provision) benefit for income taxes (5,358) -- 1 ,684 (h) (3,674)
----------- ------------ ----------- -------------
Net income (loss) $ 9,432 $ (4,853) $ 1,442 $ 6,021
=========== ============ =========== =============
Earnings per share:
Basic $ .68 $ .43
Diluted $ .64 $ .41
Weighted average shares outstanding
Basic 13,792 126(e) 13,918
=========== =========== ============
Diluted 14,648 126(e) 14,774
=========== =========== ============
See notes to unaudited pro forma consolidated financial statements.
PAR TECHNOLOGY CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
September 30, 2006
(in thousands except share amounts)
Acquisition Pro forma
PAR Technology SIVA Pro forma PAR Technology
Corporation Corporation Adjustments Corporation
------------------------------------------------------------------------
Assets
Current assets:
Cash and cash equivalents $ 2,098 $ 20 $ (20) (a) $ 2,098
Accounts receivable-net 47,900 154 48,054
Inventories-net 34,839 34,839
Income tax refunds 2,353 2,353
Deferred income taxes 4,442 4,442
Other current assets 3,192 111 3,303
------------- ------------- ------------- ------------
Total current assets 94,824 285 (20) 95,089
Property and equipment - net 7,550 256 7,806
Goodwill 20,885 4,810 (c) 25,695
Intangible assets - net 8,902 1,160 764 (c) 10,826
Other assets 2,695 29 2,724
------------- ------------- ------------- ------------
$ 134,856 $ 1,730 $ 5,554 $ 142,140
============= ============= ============= ============
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Current portion of long-term debt $ 129 $ 3 $ (3) (a) $ 129
Borrowings under lines of credit 9,899 4,051 (4,051) (a) 9,899
Accounts payable 12,913 594 (417)(a)(d) 13,090
Accrued salaries and benefits 7,362 -- 7,362
Accrued expenses 2,003 598 (598) (a) 2,003
Customer deposits 3,545 3,545
Deferred service revenue 10,616 495 (104) (c) 11,007
------------- ------------- ------------- ------------
Total current liabilities 46,467 5,741 (5,173) 47,035
------------- ------------- ------------- ------------
Long-term debt 1,889 5,650 (d) 7,539
------------- ------------- ------------- ------------
Deferred income taxes 751 751
------------- ------------- ------------- ------------
Other long-term liabilities 1,649 11 (11) (a) 1,649
------------- ------------- ------------- ------------
Stockholders' equity (deficit):
Preferred stock, $.02 par value,
1,000,000 shares authorized -- 4 (4) (b) --
Common stock, $.02 par value,
29,000,000 shares authorized;
15,959,536 issued and
14,181,232 outstanding 319 3 (3) (b) 319
(Pro forma PAR; 15,959,536 issued;
14,306,781 outstanding)
Capital in excess of par value 37,799 13,681 (13,034)(b)(e) 38,446
Retained earnings 52,338 (17,710) 17,710 (b) 52,338
Accumulated other comprehensive loss (428) (428)
Treasury stock, at cost, 1,778,304 shares (5,928) 419 (e) (5,509)
(Pro forma 1,652,755)
------------- ------------- ------------- ------------
Total stockholders' equity (deficit) 84,100 (4,022) 5,088 85,166
------------- ------------- ------------- ------------
$ 134,856 $ 1,730 $ 5,554 $ 142,140
============= ============= ============= ============
See notes to unaudited pro forma consolidated financial statements.
PAR TECHNOLOGY CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
For The Nine Months Ended September 30, 2006
(in thousands except share amounts)
Acquisition Pro forma
PAR Technology SIVA Pro forma PAR Technology
Corporation Corporation Adjustments Corporation
----------------------------------------------------------------------
Net revenues:
Product $ 63,705 $ 937 $ $ 64,642
Service 43,723 258 43,981
Contract 47,046 -- 47,046
----------- --------- ----------- ----------
154,474 1,195 155,669
----------- ---------- ----------- ----------
Costs of sales:
Product 36,242 -- 36,242
Service 32,937 235 33,172
Contract 43,844 -- 43,844
----------- ---------- ----------- ----------
113,023 235 113,258
----------- ---------- ----------- ----------
Gross margin 41,451 960 42,411
----------- ---------- ----------- ----------
Operating expenses:
Selling, general and administrative 24,510 2,241 38 (k) 26,789
Research and development 8,348 1,543 9,891
Amortization of identifiable intangible assets 922 338 (87) (i) 1,173
----------- ---------- ----------- ----------
33,780 4,122 (49) 37,853
----------- ---------- ----------- ----------
Operating income 7,671 (3,162) 49 4,558
Other income, net 437 437
Interest expense (458) (576) (269) (j) (1,303)
----------- ---------- ----------- ----------
Income (loss)before provision for income taxes 7,650 (3,738) (220) 3,692
(Provision) benefit for income taxes (2,750) -- 1,332 (h) (1,418)
----------- ---------- ----------- ==========
Net income (loss) $ 4,900 $ (3,738) $ 1,112 $ 2,274
=========== ========== =========== ==========
Earnings per share:
Basic $ .35 $ .16
Diluted $ .33 $ .15
Weighted average shares outstanding
Basic 14,168 126 (e) 14,294
=========== ============ ==========
Diluted 14,751 126 (e) 14,877
=========== ============ ==========
See notes to unaudited pro forma consolidated financial statements.
1. Purchase Price Allocation
The total purchase price discussed above is allocated to the tangible and
identifiable intangible assets acquired and liabilities assumed by the
Company based on their estimated fair values as of the closing date of the
acquisition. The following table presents the preliminary estimated fair
values of the assets acquired and liabilities assumed:
(in thousands)
Historical basis of Siva net assets acquired .................. $ 55
Adjustment to step-up assets and liabilities
to fair value:
Deferred service revenue ...................................... 104
-------
Fair value of net assets acquired ............................. 159
Identifiable intangible assets acquired
Software ............................................... 1,025
Customer relationships ................................. 649
Trademark and trade names .............................. 250
Goodwill ...................................................... 4,810
-------
Total estimated purchase price including
acquisition costs ......................................... $ 6,893
=======
The identifiable intangible assets acquired and their estimated useful
lives (based on preliminary third party valuation) are as follows:
(in thousands)
------------
Estimated
Fair Value Useful Life
---------- -----------
Software ................. $ 1,025 5 Years
Customer relationships ... 649 5 Years
Trademarks and trade names 250 Indefinite
-------
$ 1,924
=======
2. Pro forma assumptions
The accompanying unaudited pro forma consolidated balance sheet at
September 30, 2006 and the unaudited pro forma consolidated statements of
income for the nine months ended September 30, 2006 and the year ended
December 31, 2005 give effect to the acquisition referred to above. The pro
forma consolidated statements of income assume the acquisition took place
on January 1, 2005. The pro forma consolidated balance sheet at September
30, 2006 assumes the acquisition took place on September 30, 2006. The pro
forma consolidated balance sheet and statements of income are presented for
illustrative purposes only and do not necessarily reflect the results of
operations that would have occurred had the acquisition actually occurred
during the periods presented.
The accompanying unaudited pro forma consolidated balance sheet and
statements of income are subject to a number of estimates, assumptions and
uncertainties, and do not purport to be indicative of actual results had
the acquisition taken place on the dates indicated, nor do these statements
of income purport to be indicative of the results of operations that may be
achieved in the future.
The unaudited pro forma consolidated balance sheet at September 30, 2006
and the unaudited pro forma consolidated statements of income for the nine
months ended September 30, 2006 and the year ended December 31, 2005 have
been adjusted as discussed in the notes below:
a) To eliminate assets and liabilities not acquired pursuant to the
acquisition agreement.
b) To eliminate SIVA's stockholders' deficit accounts.
c) To record fair value adjustments, identifiable intangibles and
goodwill resulting from the acquisition as detailed in Note 1.
d) To record the debt and acquisition costs incurred in connection with
the acquisition.
e) To record the 125,549 shares of PAR Technology Corporation common
stock issued in connection with the acquisition. The number of shares
issued was determined based on a formula in the purchase agreement.
For purposes of recording the acquisition, these shares were valued
based upon the average value of the Company's common stock based on
the average closing share price for the period of 2 days preceding
through the 2 days following the announcement of the acquisition.
f) To record pro forma amortization of the identifiable intangible assets
with finite lives acquired over the estimated useful life of five
years.
g) To record pro forma interest expense on debt incurred for the year
ended December 31, 2005. Interest expense assumes the entire amount of
debt incurred of $5.6 million was outstanding for all of 2005 at a
borrowing rate of 6.3%.
h) To record pro forma tax benefit using statutory tax rates assuming
results of SIVA combined with PAR Technology Corporation and after
giving effect to the pro forma adjustments.
i) To record pro forma amortization for identifiable intangible assets
with finite lives acquired over the estimated useful life of five
years.
j) To record pro forma interest expense on debt incurred for the nine
months ended September 30, 2006. Interest expense assumes the entire
amount of debt incurred of $5.6 million was outstanding for the first
nine months of 2006 at a borrowing rate for of 6.3%.
k) To record FAS 123R expense for options issued in connection with an
employment agreement relating to the acquisition.