Nevada
|
001-32161
|
91-1696010
|
(State
or Other Jurisdiction of Incorporation)
|
(Commission
File Number)
|
(I.R.S.
Employer Identification Number)
|
6830
Spencer Street
Las
Vegas, Nevada 89119
|
(Address
of principal executive offices)
|
¨ |
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
ý |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14d-2(b)
|
¨
|
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)
|
· |
Independent
Auditors’ Report
|
· |
Audited
consolidated balance sheets as of June 30, 2005 and 2004
|
· |
Audited
consolidated statements of operations, cash flows and changes in
stockholders' equity for the years ended June 30, 2005 and 2004
|
· |
Notes
to audited consolidated financial statements
|
· |
Unaudited
condensed balance sheets as of March 31, 2006 and
June 30, 2005
|
· |
Unaudited
condensed consolidated statements of operations, cash flows and
changes in stockholders' equity for the nine months ended March 31,
2006
and 2005
|
· |
Notes
to unaudited consolidated financial
statements
|
· |
Unaudited
Pro Forma Balance Sheet of March 31,
2006
|
· |
Unaudited
Pro Forma Statements of Operations for the year ended December 31,
2005
and the three months ended March 31,
2006
|
· |
Notes
to Unaudited Pro Forma Financial Statements
|
VENDINGDATA
CORPORATION
|
||
Dated:
September 28, 2006
|
/s/
Mark Newburg
|
|
Mark
R. Newburg, Chief Executive Officer
|
||
DTT
Victoria
ABN
96 080 779 423
180 Lonsdale Street Melbourne VIC 3000 GPO Box 78B Melbourne VIC 3001 Australia DX
111
Tel: +61 (0) 3 9208 7000 Fax: +61 (0) 3 9208 7001 www.deloitte.com.au |
Fiscal
Years Ended June 30,
|
||||||||||
Notes
|
2004
AUD
|
2005
AUD
|
||||||||
Revenue
|
7,479,223
|
7,745,451
|
||||||||
Cost
of sales
|
(5,209,078
|
)
|
(5,582,381
|
)
|
||||||
Gross
profit
|
2,270,145
|
2,163,070
|
||||||||
Selling
expense
|
(172,677
|
)
|
(204,701
|
)
|
||||||
Occupancy
expense
|
(12,739
|
)
|
(24,462
|
)
|
||||||
Administrative
expense
|
14
|
(1,507,806
|
)
|
(1,337,969
|
)
|
|||||
Operating
income
|
576,923
|
595,938
|
||||||||
Interest
income
|
116
|
58
|
||||||||
Income
before provision for income taxes and minority interest
|
577,039
|
595,996
|
||||||||
Provision
for income taxes
|
13
|
(181,382
|
)
|
(158,358
|
)
|
|||||
Minority
interest
|
(277
|
)
|
(306
|
)
|
||||||
Net
income
|
395,380
|
437,332
|
Notes
|
June
30,
2004
AUD
|
June
30,
2005
AUD
|
||||||||
ASSETS
|
||||||||||
Current
Assets
|
||||||||||
Cash
and cash equivalents
|
2
|
7,861
|
23,034
|
|||||||
Accounts
receivable, net
|
3
|
1,273,468
|
1,856,014
|
|||||||
Inventories,
net
|
4
|
128,658
|
283,116
|
|||||||
Investments
|
5
|
4,000
|
4,000
|
|||||||
Other
current assets
|
6
|
4,100
|
-
|
|||||||
Total
current assets
|
1,418,087
|
2,166,164
|
||||||||
Property,
plant and equipment, net
|
8
|
2,881,894
|
2,736,409
|
|||||||
Deferred
tax asset
|
13
|
52,897
|
67,103
|
|||||||
Total
assets
|
4,352,878
|
4,969,676
|
||||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||||
Current
liabilities
|
||||||||||
Accounts
payable
|
414,595
|
595,657
|
||||||||
Accrued
payroll obligations
|
9
|
244,596
|
235,329
|
|||||||
Other
accrued expenses
|
10
|
262,872
|
190,512
|
|||||||
Debt
payable
|
11
|
506,309
|
1,061,515
|
|||||||
Capital
lease obligation, current portion
|
15
|
310,501
|
350,760
|
|||||||
Total
current liabilities
|
1,738,873
|
2,433,773
|
||||||||
Accrued
payroll obligations
|
9
|
44,775
|
46,850
|
|||||||
Capital
lease obligation, net of current portion
|
15
|
766,469
|
424,310
|
|||||||
Total
non-current liabilities
|
811,244
|
471,160
|
||||||||
Total
liabilities
|
2,550,117
|
2,904,933
|
||||||||
Minority
Interest
|
1,707
|
2,112
|
||||||||
Stockholders
equity:
|
||||||||||
Share
capital
|
12
|
12
|
12
|
|||||||
Retained
earnings
|
2,437,455
|
2,703,287
|
||||||||
Shareholder
receivable
|
7
|
(636,413
|
)
|
(640,668
|
)
|
|||||
Total
stockholders’ equity
|
1,801,054
|
2,062,631
|
||||||||
Total
liabilities and stockholders’ equity
|
4,352,878
|
4,969,676
|
Shares
No.
|
Amount
AUD
|
Retained
Earnings
AUD
|
Shareholder
Receivable
AUD
|
TOTAL
AUD
|
||||||||||||
Balance
at June 30, 2003
|
14
|
12
|
2,189,162
|
(562,564
|
)
|
1,626,610
|
||||||||||
Shareholder
receivable
|
-
|
-
|
-
|
(73,849
|
)
|
(73,849
|
)
|
|||||||||
Net
income
|
-
|
-
|
395,380
|
-
|
395,380
|
|||||||||||
Dividends
declared
|
-
|
-
|
(147,087
|
)
|
-
|
(147,087
|
)
|
|||||||||
Balance
at June 30, 2004
|
14
|
12
|
2,437,455
|
(636,413
|
)
|
1,801,054
|
||||||||||
Shareholder
receivable
|
-
|
-
|
(4,255
|
)
|
(4,255
|
)
|
||||||||||
Net
income
|
-
|
-
|
437,332
|
-
|
437,332
|
|||||||||||
Dividends
declared
|
-
|
-
|
(171,500
|
)
|
-
|
(171,500
|
)
|
|||||||||
Balance
at June 30, 2005
|
14
|
12
|
2,703,287
|
(640,668
|
)
|
2,062,631
|
Fiscal
Years Ended June 30,
|
|||||||
2004
AUD
|
2005
AUD
|
||||||
Operating
activities
|
|||||||
Net
income
|
395,380
|
437,332
|
|||||
Adjustments
to reconcile net income to cash provided by operating
activities
|
|||||||
Minority
interest
|
277
|
306
|
|||||
Depreciation
and amortisation
|
362,918
|
332,513
|
|||||
Deferred
taxes
|
(10,619
|
)
|
(14,206
|
)
|
|||
Write
off of fixed assets
|
3,006
|
-
|
|||||
Changes
in operating assets and liabilities
|
|||||||
Accounts
payable and accrued liabilities
|
(540,303
|
)
|
140,551
|
||||
Accrued
payroll obligations
|
99,662
|
7,192
|
|||||
Accounts
receivable
|
7,554
|
(582,546
|
)
|
||||
Inventories
|
6,724
|
(154,458
|
)
|
||||
Net
cash provided by operating activities
|
324,599
|
166,684
|
|||||
Investing
activities
|
|||||||
Repayment
of loans by related parties
|
17,088
|
5,033
|
|||||
Loans
to related parties
|
(2,300
|
)
|
(4,000
|
)
|
|||
Capital
expenditures
|
(385,488
|
)
|
(58,696
|
)
|
|||
Net
cash used in investing activities
|
(370,700
|
)
|
(57,663
|
)
|
|||
Financing
activities
|
|||||||
Repayment
of borrowings
|
(458,018
|
)
|
(659,011
|
)
|
|||
Proceeds
from borrowings
|
305,970
|
736,663
|
|||||
Payment
of dividends
|
(147,087
|
)
|
(171,500
|
)
|
|||
Net
cash used in financing activities
|
(299,135
|
)
|
(93,848
|
)
|
|||
Increase
/ (decrease) in cash and cash equivalents
|
(345,236
|
)
|
15,173
|
||||
Cash
and cash equivalents at beginning of year
|
353,097
|
7,861
|
|||||
Cash
and cash equivalents at end of year
|
7,861
|
23,034
|
|||||
Supplemental
Information:
|
|||||||
Income
taxes paid
|
(12,467
|
)
|
(50,838
|
)
|
|||
Interest
paid
|
(89,889
|
)
|
(129,525
|
)
|
|||
1. |
Organisation
and Summary of Significant Accounting
Policies
|
(a)
|
Basis
of presentation and description of the business—Dolphin Advanced
Technologies Pty Ltd and its majority owned subsidiary Dolphin Products
Pty Ltd. (collectively, the “Company”) manufacture plastic products for
the automotive industry in Australia and casino chips for Australian
casinos. All significant inter-company accounts and transactions
have been
eliminated in consolidation. . The accompanying consolidated financial
statements have been prepared in order to present the Company’s financial
position and its results of operations and cash flows in accordance
with
accounting principles generally accepted in the United States (“U.S.
GAAP”) and have been presented in Australian Dollars (“AUD”).
|
(b)
|
Cash
and Cash Equivalents—The Company considers all highly liquid investments
with the original maturity of three months or less to be cash
equivalents.
|
(c)
|
Inventories—Inventories
are valued at the lower of cost or market. Cost is determined by
the
first−in, first−out (FIFO) method while market is determined by
replacement cost for raw materials and parts and net realizable value
for
work−in−process and finished goods.
|
(d)
|
Equipment
and leasehold improvements—Equipment and leasehold improvements are stated
on the basis of historical cost. Depreciation of equipment is provided
using the straight−line method over the assets’ estimated useful lives,
ranging from three to seven years. Amortization of leasehold improvements
and equipment under capital leases is provided using the straight−line
method over the shorter of the assets’ estimated useful lives or the lease
terms.
|
(e)
|
Revenue
recognition — The Company recognizes revenue from product sales when
persuasive evidence of an arrangement exists, delivery has occurred,
title
has passed, the selling price is fixed or determinable and collection
of
the resulting receivable is reasonably assured. Delivery generally
occurs
when the product is delivered to a common carrier and terms are freight
on
board delivery point. When the arrangement with the customer includes
future obligations or is contingent on obtaining customer acceptance
(generally a new customer or a new product to an existing customer),
revenue is deferred and recognized only when these obligations have
been
met or customer acceptance has been received. The Company's sales
consist
primarily of the sale of equipment.
|
(f)
|
Minority
interests in subsidiaries—The balance sheet amounts in minority interest
at June 30, 2005 represent 0.07% of the equity held by the single
minority
stockholder in Dolphin Products Pty Ltd. Minority interest represents
the
minority stockholder’s proportionate share of equity in those
subsidiaries.
|
(g)
|
Impairment
of long−lived assets—Impairment losses are recorded on long−lived assets
used in operations when an indicator of impairment (significant decrease
in market value of an asset, significant change in extent or manner
in
which the asset is used or significant physical change to the asset)
is
present and the undiscounted cash flows estimated to be generated
by those
assets are less than the assets’ carrying amount.
|
1. |
Organisation
and Summary of Significant Accounting Policies
(cont’d)
|
(g)
|
Impairment
of long−lived assets (cont’d)
|
(h)
|
Use
of estimates—The preparation of financial statements in conformity with
U.S. GAAP requires that management make estimates and assumptions
that
affect the reported amounts of assets and liabilities and disclosure
of
contingent assets and liabilities as of 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.
|
(i)
|
Financial
instruments—At June 30, 2005 and 2004, the Company’s financial instruments
recorded on the balance sheet include cash equivalents and short-term
bank
debt. Because of the short maturity, short−term bank debt approximates
fair value.
|
(j)
|
Recently
issued but not yet adopted accounting
pronouncements
|
1. |
Organisation
and Summary of Significant Accounting Policies
(cont’d)
|
Fiscal
Years Ended June 30,
|
|||||||
2004
|
2005
|
||||||
AUD
|
AUD
|
||||||
2. Cash
and cash equivalents
|
|||||||
Cash
at bank
|
7,861
|
23,034
|
|||||
3. Accounts
receivable
|
|||||||
Trade
receivables
|
1,106,782
|
1,617,366
|
|||||
Less
Provision for doubtful debts
|
(6,000
|
)
|
(6,000
|
)
|
|||
ACIS
Grants receivable
|
172,686
|
244,648
|
|||||
1,273,468
|
1,856,014
|
4. Inventories
|
|||||||
Inventory
balances, net of reserves for excess and obsolete
inventories:
|
|||||||
Raw
materials and parts
|
34,893
|
31,646
|
|||||
Work-in-progress
|
33,108
|
46,448
|
|||||
Finished
goods
|
60,657
|
205,022
|
|||||
128,658
|
283,116
|
5. Investments
|
|||||||
Deposits
|
4,000
|
4,000
|
|||||
6. Other
current assets
|
|||||||
Related
party loans
|
4,100
|
-
|
|||||
Related
party loans are repayable on demand. Related party transactions comprise
expenses incurred by related parties on behalf of the Company.
|
Fiscal
Years Ended June 30,
|
|||||||
2004
AUD
|
2005
AUD
|
||||||
7.
Shareholder Receivable
|
|||||||
Loans
to shareholders
|
|||||||
-
Purton / Sangster Family Trust
|
636,413
|
640,668
|
Shareholder
loans are non-interest bearing and repayable on demand.
|
|||||||
8. Property,
Plant & Equipment
|
|||||||
Property,
plant and equipment balances, net of accumulated
depreciation
|
|||||||
Leasehold
improvements
|
472,719
|
472,719
|
|||||
Plant
and equipment
|
2,847,032
|
2,802,539
|
|||||
Leased
Motor vehicles
|
327,886
|
327,886
|
|||||
Leased
Plant and equipment
|
1,114,252
|
1,217,621
|
|||||
4,761,889
|
4,820,765
|
||||||
Less
accumulated depreciation and amortisation
|
(1,879,995
|
)
|
(2,084,356
|
)
|
|||
2,881,894
|
2,736,409
|
9. Accrued
payroll obligations
|
|||||||
Current
|
|||||||
Superannuation
payable
|
31,817
|
26,002
|
|||||
PAYG
Withholding payable
|
103,548
|
49,667
|
|||||
Provision
for Fringe Benefits Tax
|
9,500
|
8,835
|
|||||
Provision
for Annual Leave
|
66,762
|
83,805
|
|||||
Provision
for Long Service Leave
|
32,969
|
67,020
|
|||||
244,596
|
235,329
|
||||||
Non
Current
|
|||||||
Provision
for Long Service Leave
|
44,775
|
46,850
|
Fiscal
Years Ended June 30,
|
|||||||
2004
AUD
|
2005
AUD
|
||||||
10. Other
Accrued Liabilities
|
|||||||
Other
accrued expenses
|
191,705
|
83,654
|
|||||
Income
taxes
|
64,364
|
45,243
|
|||||
GST
Payable
|
6,803
|
61,615
|
|||||
262,872
|
190,512
|
11. Debt
Payable
|
|||||||
The
Company’s debt payable is summarised as follows:
|
|||||||
Shareholders
loans
|
707
|
3,024
|
|||||
Related
party loans
|
113,854
|
109,854
|
|||||
Bank
overdraft
|
285,128
|
568,420
|
|||||
Loan
- NAB Commercial Loan
|
106,620
|
380,217
|
|||||
506,309
|
1,061,515
|
All
NAB Limited commercial loans are current liabilities. NAB commercial
loan
interest rates are fixed at 7.35%.
|
|||||||
Shareholder
loans and related party loans are repayable on demand. Related party
transactions comprise expenses incurred by related parties on behalf
of
the Company.
|
|||||||
Debt
facilities
|
|||||||
Overdraft
Facility
|
|||||||
Overdraft
limit is AUD700,000 until 31st
May 2006. The interest rate on the overdraft facility is variable,
being
libor plus the customer margin of 2.25% per annum.
|
|||||||
Revolving
Lease / Lease Purchase Facility
|
|||||||
Limit
is AUD2,000,000 and current unused amount is
AUD1,224,390.
|
|||||||
Special
Conditions and Covenants
|
|||||||
The
provision of the above facilities is subject to the
following:
|
|||||||
(i)
Capital Adequacy Ratio, as defined, is to be no less than 40% and
is
reviewed annually.
|
|||||||
The
capital adequacy ratio is defined as Total Net Worth (excluding intangible
assets and intercompany loans) divided by total tangible assets (excluding
Intangible Assets and Intercompany
loans).
|
(ii)
Financial charges cover, as defined, is to be no less than 2.00
times.
|
|||
As
of June 30, 2005, the Company was in compliance with all facility
covenants.
|
|||
Security
The
above facilities are secured by a Guarantee and indemnity for $1,219,645
given by Dolphin Advanced Technologies Pty Ltd and William Westmore
Purton. The guarantee is provided by the parent company to the subsidiary
being Dolphin Products Pty Ltd.
|
|||
DOLPHIN
ADVANCED TECHNOLOGIES PTY LTD
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED 30 JUNE 2005
|
Fiscal
Years Ended June 30,
|
|||||||
2004
AUD
|
2005
AUD
|
||||||
12. Share
Capital
|
12
|
12
|
|||||
Issued
and Paid up capital - 14
|
|||||||
Authorised
capital: 1,000,000 $1 shares.
|
Ordinary
shares participate in dividends and the proceeds on winding up of
the
parent entity in proportion to the number of shares held.
At
shareholder’s meetings each ordinary share is entitled to one vote when a
poll is called otherwise each shareholder has one vote on a show
of
hands.
|
|||||||
13.
Income Tax Expense
|
|||||||
Deferred
tax asset
|
52,897
|
67,103
|
|||||
The
statutory income tax rate reconciled to the DAT’s effective income tax
rate is as follows for the year ended 30 June 2004 and 30 June
2005:
|
|||||||
Statutory
income tax rate for the year
|
30.00
|
%
|
30.00
|
%
|
|||
Expenses
not deductible for tax purposes
|
1.43
|
%
|
-
|
%
|
|||
Amounts
not assessable for income tax purposes
|
-
|
%
|
(3
|
%)
|
|||
Effective
income tax rate
|
31.43
|
%
|
27
|
%
|
Temporary
differences between the tax and accounting bases of assets and liabilities
give rise to the following deferred tax assets at 30 June 2004 and
30 June
2005:
|
Assets
arising from tax effect of:
|
|||||||
Provision
for doubtful debts
|
1,800
|
1,800
|
|||||
Provision
for Annual Leave
|
20,029
|
25,142
|
|||||
Provision
for Long Service Leave
|
23,323
|
34,161
|
|||||
Other
|
7,745
|
6,000
|
|||||
Total
deferred tax assets
|
52,897
|
67,103
|
DOLPHIN
ADVANCED TECHNOLOGIES PTY LTD
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED 30 JUNE 2005
|
Fiscal
Years Ended June 30,
|
|||||||
2004
AUD
|
2005
AUD
|
||||||
14.
Administrative Expense
|
|||||||
Administrative
expenses for the years ended June 30, 2004 and 2005 consisted of
the
following:
|
|||||||
Consultants
fees
|
269,682
|
194,932
|
|||||
Payroll
tax
|
119,421
|
129,720
|
|||||
Telephone
|
40,751
|
34,682
|
|||||
Management
fees
|
77,339
|
81,647
|
|||||
Computer
expenses
|
53,418
|
62,551
|
|||||
Salaries
and wages
|
376,289
|
396,350
|
|||||
Protective
clothing
|
21,542
|
25,512
|
|||||
Fuel
oil and maintenance
|
17,511
|
25,532
|
|||||
Depreciation
and amortisation
|
129,743
|
117,526
|
|||||
Other
general expenses
|
402,110
|
269,517
|
|||||
1,507,806
|
1,337,969
|
||||||
15. Capital
and Operating Lease Commitments
|
|||||||
(a)
Capital
Leases
|
|||||||
Expenditure
Contracted for is payable as follows:
|
|||||||
Payments
due in the year ended June 30,
|
|||||||
2005
|
372,539
|
-
|
|||||
2006
|
396,098
|
396,098
|
|||||
2007
|
463,163
|
463,162
|
|||||
Minimum
lease payments
|
1,231,800
|
859,260
|
|||||
Less
future finance charges
|
(154,830
|
)
|
(84,190
|
)
|
|||
Net
liability
|
1,076,970
|
775,070
|
|||||
Reconciled
to:
|
|||||||
Current
liabilities
|
310,501
|
350,760
|
|||||
Non-current
liabilities
|
766,469
|
424,310
|
|||||
1,076,970
|
775,070
|
||||||
(b) Operating
Lease Expenditure Contracted for is payable as follows:
|
|||||||
Payments
due in the year ended June 30,
|
|||||||
2005
|
604,655
|
-
|
|||||
2006
|
622,795
|
622,795
|
|||||
2007
|
641,480
|
641,480
|
|||||
2008
|
641,480
|
641,480
|
|||||
Total
lease commitment
|
2,510,410
|
1,905,755
|
DOLPHIN
ADVANCED TECHNOLOGIES PTY LTD
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED 30 JUNE 2005
|
15. |
Capital
and Operating Lease Commitments
(cont’d)
|
16. |
Related
Party Transactions
|
Notes
|
9
Months ended
March
31,
2005
AUD
|
9
Months ended
March
31,
2006
AUD
|
||||||||
|
||||||||||
Revenue
|
5,892,963
|
5,655,613
|
||||||||
Cost
of sales
|
(4,468,875
|
)
|
(3,914,594
|
)
|
||||||
Gross
profit
|
1,424,088
|
1,741,019
|
||||||||
Gain
on sale of patent applications
|
2
|
-
|
5,502,680
|
|||||||
General
and administrative expense
|
(1,331,768
|
)
|
(1,383,080
|
)
|
||||||
Foreign
exchange gain
|
-
|
198,026
|
||||||||
Operating
income
|
92,320
|
6,058,645
|
||||||||
Interest
Income
|
29
|
504
|
||||||||
Income
before provision for income taxes
|
92,349
|
6,059,149
|
||||||||
Provision
for income taxes
|
(24,900
|
)
|
(1,660,329
|
)
|
||||||
Minority
interest
|
(65
|
)
|
(2,938
|
)
|
||||||
Net
income
|
67,384
|
4,395,882
|
Notes
|
June
30,
2005
AUD
|
March
31,
2006
AUD
|
||||||||
Current
Assets
|
||||||||||
Cash
and cash equivalents
|
23,034
|
919
|
||||||||
Accounts
receivable, net
|
1,856,014
|
1,519,690
|
||||||||
Inventories
|
283,116
|
599,946
|
||||||||
Other
current assets
|
2
|
4,000
|
1,302,000
|
|||||||
Total
current assets
|
2,166,164
|
3,422,555
|
||||||||
Investment
in VendingData Corporation
|
2
|
-
|
3,896,863
|
|||||||
Property,
plant and equipment, net
|
3
|
2,736,409
|
3,781,275
|
|||||||
Deferred
tax asset
|
67,103
|
54,178
|
||||||||
Total
assets
|
4,969,676
|
11,154,871
|
||||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||||
Current
liabilities
|
||||||||||
Accounts
payable
|
595,657
|
895,205
|
||||||||
Accrued
payroll obligations
|
4
|
235,329
|
363,847
|
|||||||
Other
accrued expenses
|
5
|
190,512
|
1,704,151
|
|||||||
Provision
for dividends payable
|
-
|
2,834,248
|
||||||||
Debt
payable
|
1,061,515
|
976,310
|
||||||||
Current
maturities of capital lease obligation
|
6
|
350,760
|
425,357
|
|||||||
Total
current liabilities
|
2,433,773
|
7,199,118
|
||||||||
Accrued
payroll obligations
|
4
|
46,850
|
4,878
|
|||||||
Capital
lease obligation, net of current portion
|
6
|
424,310
|
516,652
|
|||||||
Total
liabilities
|
2,904,933
|
7,720,648
|
||||||||
Minority
interest
|
2,112
|
2,400
|
||||||||
Stockholders
equity:
|
||||||||||
Share
capital
|
12
|
12
|
||||||||
Retained
earnings
|
2,703,287
|
4,264,921
|
||||||||
Shareholder
receivable
|
(640,668
|
)
|
(833,110
|
)
|
||||||
Total
stockholders’ equity
|
2,062,631
|
3,431,823
|
||||||||
Total
liabilities and stockholders’ equity
|
4,969,676
|
11,154,871
|
Shares
No.
|
Amount
AUD
|
Retained
Earnings
AUD
|
Shareholder’s
Receivable
AUD
|
TOTAL
AUD
|
||||||||||||
Balance
at June 30, 2005
|
14
|
12
|
2,703,287
|
(640,668
|
)
|
2,062,631
|
||||||||||
Shareholder’s
receivable
|
-
|
-
|
(192,442
|
)
|
(192,442
|
)
|
||||||||||
Net
income
|
-
|
-
|
4,395,882
|
-
|
4,395,882
|
|||||||||||
Dividends
declared
|
-
|
-
|
(2,834,248
|
)
|
-
|
(2,834,248
|
)
|
|||||||||
Balance
at March 31, 2006
|
14
|
12
|
4,264,921
|
(833,110
|
)
|
3,431,823
|
||||||||||
9
Months ended
March
31,2005
AUD
|
9
Months ended
March
31,2006
AUD
|
||||||
Operating
activities
|
|||||||
Net
income
|
67,384
|
4,395,882
|
|||||
Adjustments
to reconcile net income to cash provided by operating
activities
|
|||||||
Depreciation
and amortisation
|
271,710
|
222,737
|
|||||
Write
off of fixed assets
|
-
|
16,930
|
|||||
Unrealised
foreign exchange gain
|
-
|
(198,026
|
)
|
||||
Gain
on sale of patent applications
|
-
|
(5,502,680
|
)
|
||||
Minority
interest
|
65
|
2,938
|
|||||
Deferred
taxes
|
10,239
|
12,925
|
|||||
Changes
in operating assets and liabilities
|
|||||||
Accounts
payable and accrued liabilities
|
(314,068
|
)
|
1,387,860
|
||||
Accrued
payroll obligations
|
56,470
|
128,518
|
|||||
Accounts
receivable
|
41,955
|
336,234
|
|||||
Inventories
|
(12,675
|
)
|
(316,830
|
)
|
|||
Net
cash provided by operating activities
|
121,080
|
486,488
|
|||||
Investing
activities
|
|||||||
Repayment
of loans by related parties
|
5,033
|
-
|
|||||
Proceeds
from sale of patent
|
-
|
514,666
|
|||||
Loans
to related parties
|
(4,000
|
)
|
-
|
||||
Capital
expenditures
|
(289,116
|
)
|
(562,933
|
)
|
|||
Net
cash used in investing activities
|
(288,083
|
)
|
(48,267
|
)
|
|||
Financing
activities
|
|||||||
Repayment
of borrowings
|
(169,363
|
)
|
(460,336
|
)
|
|||
Proceeds
from borrowings
|
328,906
|
-
|
|||||
Dividends
paid
|
-
|
-
|
|||||
Net
cash provided by (used in) financing activities
|
159,543
|
(460,336
|
)
|
||||
Decrease
in cash and cash equivalents
|
(7,460
|
)
|
(22,115
|
)
|
|||
Cash
and cash equivalents at beginning of the period
|
7,861
|
23,034
|
|||||
Cash
and cash equivalents at end of the period
|
401
|
919
|
|||||
Supplemental
Information:
|
|||||||
Income
taxes paid
|
(12,467
|
)
|
(50,838
|
)
|
|||
Interest
paid
|
(440,760
|
)
|
(191,685
|
)
|
|||
(a)
|
Basis
of presentation and description of the business—The condensed consolidated
financial statements of Dolphin Advanced Technologies Pty Ltd include
the
accounts of the parent entity and its majority owned subsidiary
Dolphin
Products Pty Ltd. (collectively, the “Company”). All significant
intercompany accounts and transactions have been eliminated in
consolidation. The principal activities of the Company are the
manufacture
of plastic products for the automotive industry in Australia and
manufacture of casino chips for Australian casinos. The financial
statements have been presented in Australian Dollars
(“AUD”).
|
(b)
|
The
accompanying condensed consolidated financial statements as of
March 31,
2006 and June 30, 2005 and for each of the nine months ended March
31,
2006 and 2005 have been prepared by the Company, without audit.
Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These financial statements
should be read in conjunction with the audited consolidated financial
statements and the notes thereto included herein. In the opinion
of
management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position
as of
March 31, 2006 and June 30, 2005, results of operations and cash
flows for
each of the nine months ended March 31, 2006 and 2005 and are not
necessarily indicative of the operating results for the full
year.
|
(c)
|
Available-for-sale
securities - Available-for-sale securities as of March 31, 2006
consist of
shares of VendingData Corporation (“VendingData”). Securities classified
as available-for-sale are required to be reported at fair value
with
unrealized gains and losses, net of taxes, excluded from earnings
and
shown separately as a component of accumulated other comprehensive
income
within stockholders’ equity.
As
of March 31, 2006, the unrealized gain on available-for-sale securities
is
not material.
|
(d)
|
Foreign
currency - Transactions denominated in currencies other than the
functional currency are recorded based on exchange rates at the
time such
transactions arise. Foreign currency-denominated assets and liabilities
are translated into Australian dollars at the exchange rates existing
at
the balance sheet date. Subsequent changes in exchange rates result
in
transactions gains and losses which are reflected in the consolidated
statements of operations.
|
As
Of
June
30,
2005
AUD
|
As
Of
March
31,
2006
AUD
|
3. Property,
Plant & Equipment
|
|||||||
Property,
Plant and equipment balances, net of accumulated
depreciation
|
|||||||
Leasehold
improvements
|
472,719
|
499,332
|
|||||
Plant
and equipment
|
2,802,539
|
3,484,164
|
|||||
Leased
Motor vehicles
|
327,886
|
368,570
|
|||||
Leased
Plant and equipment
|
1,217,621
|
1,749,320
|
|||||
4,820,765
|
6,101,386
|
||||||
Less
accumulated depreciation and amortisation
|
(2,084,356
|
)
|
(2,320,111
|
)
|
|||
2,736,409
|
3,781,275
|
||||||
4. Accrued
payroll obligations
|
|||||||
Current
|
|||||||
Superannuation
payable
|
26,002
|
27,941
|
|||||
PAYG
Withholding payable
|
49,667
|
142,024
|
|||||
Provision
for Fringe Benefits Tax
|
8,835
|
24,165
|
|||||
Provision
for Annual Leave
|
83,805
|
54,574
|
|||||
Provision
for Long Service Leave
|
67,020
|
115,143
|
|||||
235,329
|
363,847
|
||||||
Non
Current
|
|||||||
Provision
for Long Service Leave
|
46,850
|
4,878
|
As
Of and For the Year Ended June 30, 2005
AUD
|
As
Of and For the 9 Months Ended March 31, 2006
AUD
|
||||||
5. Other
Accrued Liabilities
|
|||||||
Other
accrued expenses
|
83,654
|
12,970
|
|||||
Income
taxes
|
45,243
|
1,610,873
|
|||||
GST
Payable
|
61,615
|
80,308
|
|||||
190,512
|
1,704,151
|
||||||
6. Capital
and Operating Lease Commitments
|
|||||||
(a)
Capital
Leasing
|
|||||||
Expenditure
Contracted for is payable as follows:
|
|||||||
2006
|
396,098
|
-
|
|||||
2007
|
463,162
|
463,162
|
|||||
2008
|
-
|
601,142
|
|||||
2009
|
-
|
-
|
|||||
Minimum
lease payments
|
859,260
|
1,064,304
|
|||||
Less
future finance charges
|
(84,190
|
)
|
(122,295
|
)
|
|||
Net
liability
|
775,070
|
942,009
|
|||||
Reconciled
to:
|
|||||||
Current
liabilities
|
350,760
|
425,357
|
|||||
Non-current
liabilities
|
424,310
|
516,652
|
|||||
775,070
|
942,009
|
||||||
(b) Operating
Lease Expenditure Contracted for is payable as follows:
|
|||||||
2006
|
622,795
|
-
|
|||||
2007
|
641,480
|
622,795
|
|||||
2008
|
641,480
|
174,384
|
|||||
Total
lease commitment
|
1,905,755
|
797,179
|
· |
$1,350,000
cash (including
$750,000 paid as a non-refundable deposit in April
2006);
|
· |
2,462,238
shares of VendingData’s common stock (of which 1,000,000 were previously
issued as part of the non-refundable deposit in April 2006). The
2,462,238
shares were valued as follows: the 1,000,000 shares issued in April
2006
as a non-refundable deposit were valued based on the average share
price
for the period two days before and two days after the date of the
terms of
the acquisition were agreed to and announced, and the remaining 1,462,238
shares were valued based on the $3.50 guaranteed value (discussed
further
below); and
|
· |
$5,565,168
fair value of non-interest bearing, convertible notes. The principal
amount of the notes automatically converts into shares of the
VendingData’s common stock at the rate of $3.50 per share (or an aggregate
of 1,652,048 common shares) upon shareholder approval of the conversion
of
the notes (or a determination that shareholder approval is not required).
The principal amount under the notes is otherwise due in cash on
January
7, 2007; and
|
· |
Estimated
direct acquisition costs of $250,000
|
|
Total
Fair Value
|
|||
USD
|
||||
Cash
|
683
|
|||
Receivables
|
1,128,975
|
|||
Shareholder
receivable
|
618,916
|
|||
Inventories
|
445,699
|
|||
Property,
plant, equipment
|
2,809,102
|
|||
Deferred
tax asset
|
54,178
|
|||
Accounts
payable
|
(665,046
|
)
|
||
Accrued
expenses
|
(1,220,337
|
)
|
||
Provision
for dividends payable
|
(2,105,557
|
)
|
||
Contingent
purchase price liability
|
(979,699
|
)
|
||
Debt
and capital lease obligation - current
|
(1,041,296
|
)
|
||
Capital
lease obligation - noncurrent
|
(387,444
|
)
|
||
Minority
interest
|
(1,783
|
)
|
||
Total
|
(1,343,610
|
)
|
||
Purchase
Price
|
15,113,000
|
|||
Goodwill
|
16,456,610
|
VENDINGDATA CORPORATION | ||||||||||||||||
Pro Forma Balance Sheets (Unaudited) | ||||||||||||||||
(3a)
|
(3b)
|
|||||||||||||||
VendingData
3/31/06
|
Dolphin
3/31/06
|
Pro
Forma
|
Pro
Forma
|
|||||||||||||
ASSETS
|
USD
|
Adjustments
|
||||||||||||||
Current
assets:
|
||||||||||||||||
Cash
and cash equivalents
|
$
|
210,709
|
$
|
683
|
$
|
(211,391
|
)
|
(3c
|
)
|
$
|
0
|
|||||
Other
current assets
|
4,368,545
|
2,541,927
|
(967,253
|
)
|
(3d
|
)
|
5,943,219
|
|||||||||
|
||||||||||||||||
Total
current assets
|
4,579,254
|
2,542,609
|
(1,178,644
|
)
|
5,943,219
|
|||||||||||
Goodwill
|
16,772,585
|
(3e
|
)
|
16,772,585
|
||||||||||||
Investment
in VendingData Corporation
|
-
|
2,894,972
|
(2,894,972
|
)
|
(3f
|
)
|
-
|
|||||||||
Other
assets
|
6,809,314
|
2,849,350
|
-
|
9,658,664
|
||||||||||||
$
|
11,388,568
|
$
|
8,286,931
|
$
|
12,698,969
|
$
|
32,374,468
|
|||||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIENCY)
|
||||||||||||||||
Current
liabilities:
|
7,886,961
|
5,348,210
|
1,388,609
|
(3c
|
)
|
14,623,780
|
||||||||||
|
||||||||||||||||
Deferred
revenues, net of current portion
|
169,950
|
-
|
169,950
|
|||||||||||||
Notes
payable, net of current portion
|
11,225,000
|
-
|
5,565,168
|
(3g
|
)
|
16,790,168
|
||||||||||
Contingent
purchase price liability
|
979,699
|
(3h
|
)
|
979,699
|
||||||||||||
Leases
payable, net of current portion
|
340,307
|
387,444
|
727,751
|
|||||||||||||
|
19,622,218
|
5,735,654
|
7,933,476
|
33,291,348
|
||||||||||||
|
||||||||||||||||
|
||||||||||||||||
Minority
equity interest
|
1,783
|
(1,783
|
)
|
(3i
|
)
|
-
|
||||||||||
|
||||||||||||||||
Stockholders'
equity (deficiency):
|
||||||||||||||||
|
||||||||||||||||
Common
stock
|
19,540
|
9
|
2,453
|
(3j
|
)
|
22,002
|
||||||||||
Treasury
Stock 448,053 shares at cost
|
(846,820
|
)
|
-
|
(846,820
|
)
|
|||||||||||
Additional
paid-in capital
|
69,874,251
|
-
|
7,933,223
|
(3k
|
)
|
77,807,476
|
||||||||||
Deferred
Compensation Expenses
|
(2,837,945
|
)
|
(2,837,946
|
)
|
||||||||||||
Shareholder
receivable
|
(618,916
|
)
|
(618,916
|
)
|
||||||||||||
(Accumulated
deficit) / retained earnings
|
(74,442,676
|
)
|
3,168,401
|
(3,168,401
|
)
|
(3l
|
)
|
(74,442,676
|
)
|
|||||||
Total
stockholders' equity (deficiency)
|
(8,233,650
|
)
|
2,549,494
|
4,767,275
|
(916,880
|
)
|
||||||||||
Total
liabilities and stockholders' equity (deficiency)
|
$
|
11,388,568
|
$
|
8,286,931
|
$
|
12,698,969
|
$
|
32,374,468
|
||||||||
|
||||||||||||||||
See
Accompanying Notes to Unaudited Pro Forma Condensed Consolidated
Financial
Statements
|
VENDINGDATA
CORPORATION
|
||||||||||||||||
Pro
forma Statements of Operations
|
||||||||||||||||
Including
3 months of Dolphin
|
||||||||||||||||
(UNAUDITED)
|
||||||||||||||||
(3m)
|
(3n)
|
|||||||||||||||
VendingData
|
DAT
|
Pro
Forma
|
Pro
Forma
|
|||||||||||||
|
3/31/2006
|
3/31/2006
|
Adjustments
|
|||||||||||||
2006
|
USD
|
|||||||||||||||
Gross
Revenue
|
1,000,904
|
1,350,382
|
-
|
2,351,286
|
||||||||||||
Sales
returns and allowances
|
(288,404
|
)
|
-
|
(288,404
|
)
|
|||||||||||
Net
Revenue
|
712,500
|
1,350,382
|
-
|
2,062,882
|
||||||||||||
Operating
expenses:
|
||||||||||||||||
Cost
of sales
|
714,802
|
1,035,175
|
1,749,976
|
|||||||||||||
Selling,
general and administration
|
2,211,756
|
240,613
|
2,452,369
|
|||||||||||||
(Gain)
Loss on disposition of assets
|
(32,805
|
)
|
(3,525,332
|
)
|
3,525,332
|
(3o
|
)
|
(32,805
|
)
|
|||||||
Foreign
exchange gain
|
-
|
(147,236
|
)
|
147,236
|
(3t
|
)
|
-
|
|||||||||
Research
and development
|
222,138
|
-
|
222,138
|
|||||||||||||
3,115,891
|
(2,396,780
|
)
|
3,672,568
|
4,391,679
|
||||||||||||
Income/(loss)
from operations
|
(2,403,391
|
)
|
3,747,162
|
(3,672,568
|
)
|
(2,328,797
|
)
|
|||||||||
Total
interest expense (income), net
|
351,507
|
-
|
108,500
|
(3p
|
)
|
460,007
|
||||||||||
Income
Taxes
|
1,124,148
|
(1,090,150
|
)
|
(3q
|
)
|
33,999
|
||||||||||
Minority
interest
|
(52
|
)
|
52
|
(3i
|
)
|
-
|
||||||||||
Net
income/( loss)
|
$
|
(2,754,898
|
)
|
$
|
2,623,065
|
$
|
(2,690,970
|
)
|
$
|
(2,822,803
|
)
|
|||||
Basic
and diluted eps
|
$
|
(0.16
|
)
|
$
|
(0.14
|
)
|
||||||||||
Total
weighted average shares outstanding
|
17,689,358
|
20,151,596
|
||||||||||||||
See
Accompanying Notes to Unaudited Pro Forma Condensed Consolidated
Financial
Statements
|
VENDINGDATA
CORPORATION
|
||||||||||||||||
Pro
forma Statements of Operations
|
||||||||||||||||
Including
12 months of Dolphin
|
||||||||||||||||
(UNAUDITED)
|
||||||||||||||||
USD
|
||||||||||||||||
(3r)
|
(3s)
|
|||||||||||||||
VendingData
|
Dolphin
|
|||||||||||||||
Twelve
Months
Ended Dec 31, |
Twelve
Months
Ended Dec 31, |
Pro
Forma Adjustments
|
Pro
Forma
|
|||||||||||||
2005
|
2005
|
|||||||||||||||
Gross
Revenue
|
3,100,738
|
5,563,059
|
-
|
8,663,797
|
||||||||||||
Sales
returns and allowances
|
(739,263
|
)
|
-
|
(739,263
|
)
|
|||||||||||
Net
Revenue
|
2,361,475
|
5,563,059
|
-
|
7,924,534
|
||||||||||||
Operating
expenses:
|
||||||||||||||||
Cost
of sales
|
7,736,066
|
4,329,819
|
12,065,885
|
|||||||||||||
Selling,
general and administration
|
9,220,636
|
1,101,375
|
10,322,010
|
|||||||||||||
(Gain)
Loss on disposition of assets
|
(580,382
|
)
|
580,382
|
(3o
|
)
|
-
|
||||||||||
Research
and development
|
1,394,006
|
-
|
1,394,006
|
|||||||||||||
18,350,708
|
4,850,812
|
580,382
|
23,781,902
|
|||||||||||||
Income/(loss)
from operations
|
(15,989,233
|
)
|
712,247
|
(580,382
|
)
|
(15,857,368
|
)
|
|||||||||
Total
interest expense (income), net
|
1,577,996
|
(80
|
)
|
217,000
|
(3p
|
)
|
1,794,916
|
|||||||||
Taxes
|
213,698
|
(239,215
|
)
|
(3q
|
)
|
(25,516
|
)
|
|||||||||
Minority
inetrest
|
(92
|
)
|
92
|
(3i
|
)
|
-
|
||||||||||
Net
income/(loss)
|
$
|
(17,567,230
|
)
|
$
|
498,537
|
$
|
(558,075
|
)
|
$
|
(17,626,768
|
)
|
|||||
Basic
and diluted eps
|
$
|
(1.03
|
)
|
$
|
(0.90
|
)
|
||||||||||
Total
weighted average shares outstanding
|
17,050,398
|
19,512,636
|
||||||||||||||
See
Accompanying Notes to Unaudited Pro Forma Condensed Consolidated
Financial
Statements
|