o |
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
o |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
Delaware
|
84-1108035
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
Title
of each class:
|
Name
of each exchange on which registered:
|
None
|
None
|
Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer o
|
Smaller
reporting company þ
|
Page
|
||
PART
I
|
1
|
|
Item
1.
|
Description
of Business
|
1
|
Item
1A.
|
Risk
Factors
|
12
|
Item
1B.
|
Unresolved
Staff Comments.
|
18
|
Item
2.
|
Properties.
|
18
|
Item
3.
|
Legal
Proceedings
|
19
|
Item
4.
|
Submission
of Matters to a Vote of Securities Holders
|
20
|
PART
II
|
22
|
|
Item
5.
|
Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities.
|
22
|
Item
6.
|
Selected
Financial Data.
|
24
|
Item
7.
|
Management
Discussion and Analysis of Financial Condition and Results of
Operations.
|
24
|
Item
7A.
|
Quantitative
and Qualitative Disclosures about Market Risk.
|
36
|
Item
8.
|
Financial
Statements and Supplementary Data.
|
36
|
Item
9.
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure.
|
36
|
Item
9A(T).
|
Controls
and Procedures
|
37
|
Item
9B.
|
Other
Information
|
37
|
PART
III
|
38
|
|
Item
10.
|
Directors,
Executive Officers and Corporate Governance
|
38
|
Item
11.
|
Executive
Compensation
|
41
|
Item
12.
|
Security
Ownership Of Certain Beneficial Owners And Management and Related
Stockholder Matters.
|
48
|
Item
13.
|
Certain
Relationships and Related Transactions, and Director
Independence
|
50
|
Item
14.
|
Principal
Accounting Fees and Services.
|
52
|
PART
IV
|
53
|
|
Item
15.
|
Exhibits,
Financial Statement Schedules.
|
53
|
56
|
||
INDEX
TO EXHIBITS
|
57
|
·
|
The
sale of business management systems comprised of proprietary software
applications, implementation and training;
and
|
·
|
Providing
subscription-based services, including software support and maintenance,
information (content) products and online services for a
fee.
|
·
|
gradual
growth in the aggregate number of vehicles in
use;
|
·
|
an
increase in the average age of vehicles in
operation;
|
·
|
fewer
new vehicles being purchased due to uncertainty in the economy, especially
available credit;
|
·
|
growth
in the total number of miles driven per vehicle per year;
and
|
·
|
increased
vehicle complexity.
|
1.
|
Business
Management Systems
comprised of the Company’s proprietary software applications,
implementation and training and third-party hardware and
peripherals;
|
2.
|
Information
Products
such as an accessible catalog database related to parts, tires, labor
estimates, scheduled maintenance, repair information, technical service
bulletins, pricing and product features and benefits that are used
by the
different participants in the automotive
aftermarket;
|
3.
|
Online
Services
and products that provide online connectivity between manufacturers,
warehouse distributors, retailers and automotive service providers.
These
products enable electronic data interchange throughout the automotive
aftermarket supply chain between the different trading partners.
They also
enable procurement and business services to be projected over the
Web to
an expanded business audience; and
|
4.
|
Customer
Support, Consulting and Training
that provide phone and online support, implementation and
training.
|
·
|
Phone
and online support. Customers can call dedicated support lines to
speak
with knowledgeable personnel who provide support and perform on-line
problem solving as required.
|
·
|
Implementation,
education and training consulting. Our consulting and training teams
work
together to minimize the disruption to a customer’s business during the
implementation process of a new system and to maximize the customer’s
benefit from the use of the system through
training.
|
·
|
Traditional
Wholesale Channel.
The wholesale channel is the predominant distribution channel in
the
automotive aftermarket. It is characterized by the distribution of
parts
from the manufacturer to a warehouse distributor, to parts stores
and then
to automotive service providers. Warehouse distributors sell to automotive
service providers through parts stores, which are positioned
geographically near the automotive service providers they serve.
This
distribution method provides for the rapid distribution of parts.
The
Company has products and services that meet the needs of the warehouse
distributors, parts stores and the automotive service
providers.
|
·
|
Retail
Channel.
The retail channel is comprised of large specialty retailers, small
independent parts stores and regional chains that sell to “do-it-yourself”
customers. Larger specialty retailers, such as Advance Discount Auto
Parts, AutoZone, Inc., O’Reilly Automotive, Inc. and CSK Auto Corporation
carry a greater number of parts and accessories at more attractive
prices
than smaller retail outlets and are gaining market share. The business
management systems used in this channel are either custom developed
by the
large specialty retailers or purchased from business systems providers
by
small to medium-sized businesses. The Company has products and services
that support the retail channel.
|
·
|
Integrating
all of the Company’s products so that its software solutions work together
seamlessly, thereby eliminating the need to switch between
applications;
|
·
|
Enhancing
the Company’s current products and services to support its changing
customers needs; and
|
·
|
Providing
a migration path to the Company’s business management systems, reducing a
fear that many customers have that changing systems will disrupt
business.
|
·
|
implement
and successfully execute our business and marketing
strategy;
|
·
|
continue
to develop new products and upgrade our existing
products;
|
·
|
respond
to industry and competitive
developments;
|
·
|
attract,
retain, and motivate qualified personnel;
and
|
·
|
obtain
equity and debt financing on satisfactory terms and in timely fashion
in
amounts adequate to implement our business plan and meet our
obligations.
|
·
|
difficulty
in establishing or managing distribution
relationships;
|
·
|
different
standards for the development, use, packaging and marketing of our
products and technologies;
|
·
|
our
ability to locate qualified local employees, partners, distributors
and
suppliers;
|
·
|
the
potential burden of complying with a variety of foreign laws and
trade
standards; and
|
·
|
general
geopolitical risks, such as political and economic instability, changes
in
diplomatic and trade relations, and foreign currency risks and
fluctuations.
|
Item 1B. |
Unresolved
Staff Comments.
|
Item 2. |
Properties.
|
Item 3. |
Legal
Proceedings
|
Item 4. |
Submission
of Matters to a Vote of Securities
Holders
|
1.
|
The
election of five (5) members of our Board of Directors, each to serve
until the next annual meeting of stockholders and until their successors
are elected and qualified or until their earlier resignation or removal;
|
2.
|
The
ratification of the Board’s selection of KMJ Corbin & Company LLP as
the Company’s independent auditors for the fiscal year ending June 30,
2008; and
|
3.
|
The
Company’s 2007 Long-Term Stock Incentive Plan (the “Plan”), designed for
the benefit of the Company’s employees, directors and consultants, and the
employees, directors and consultants of our
affiliates.
|
Votes For
|
Votes Against
|
Abstain
|
||||||||
Election
of Ian Warwick
|
77,585,843
|
1,836
|
0
|
|||||||
Election
of Simon Chadwick
|
77,585,843
|
1,836
|
0
|
|||||||
Election
of Dwight Mamanteo
|
77,585,843
|
1,836
|
0
|
|||||||
Election
of Marcus Wohlrab
|
77,585,843
|
1,836
|
0
|
|||||||
Election
of Frederick Wasserman
|
77,585,836
|
1,843
|
0
|
|||||||
Ratification
of KMJ Corbin & Company LLP
|
77,586,009
|
1,670
|
0
|
|||||||
2007
Long Term Stock Incentive Plan
|
76,475,759
|
1,850
|
0
|
Item 5. |
Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity
Securities.
|
2008
|
2007
|
||||||||||||
|
High
|
Low
|
High
|
Low
|
|||||||||
1st
Quarter ended September 30
|
$
|
0.47
|
$
|
0.20
|
$
|
1.20
|
$
|
1.10
|
|||||
2nd
Quarter December 31
|
$
|
0.30
|
$
|
0.16
|
$
|
1.40
|
$
|
0.51
|
|||||
3rd
Quarter ended March 31
|
$
|
0.45
|
$
|
0.23
|
$
|
0.90
|
$
|
0.48
|
|||||
4th
Quarter ended June 30
|
$
|
0.25
|
$
|
0.10
|
$
|
0.65
|
$
|
0.43
|
Plan category
|
Number of
Securities to be
Issued upon
Exercise of
Outstanding
Options, Warrants
and Rights
|
Weighted Average
Exercise Price of
Outstanding
Options, Warrants
and Rights
|
Number of
Securities
Remaining
Available for
Future Issuance
under the Plan
|
|||||||
(a)
|
(b)
|
(c)
|
||||||||
Equity
compensation plans approved by security
holders(1)
|
1,990,500
|
N/A
|
9,034,107
|
|||||||
Equity
compensation plans not approved by security holders
|
0
|
0
|
0
|
|||||||
Total
|
1,990,500
|
9,034,107
|
(1)
|
Represents
the shares authorized for issuance under the Aftersoft Group Inc.
2007
Long-Term Incentive Plan, which was approved by the Company’s shareholders
at the Annual Meeting held on June 12, 2008. The maximum aggregate
number
of shares of Common Stock that may be issued under the Plan, including
Stock Options, Stock Awards, and Stock Appreciation Rights is limited
to
15% of the shares of Common Stock outstanding on the first trading
day of
any fiscal year, or 12,019,107 for fiscal 2008. On May 13, 2008 the
Compensation Committee of the Board of Directors of the Company approved
restricted stock awards of an aggregate of 2,985,000 shares of its
common
stock to certain employees, a corporate officer and three outside
directors in respect of services previously rendered. The shares
vest as
follows: 34% of the shares vest immediately on the date of grant.
The
remaining 66% of the shares will vest in three equal installments
on each
of the first, second and third anniversaries of the grant date. An
aggregate of 994,500 shares were fully vested on the grant date and
have
been issued.
|
Item 6. |
Selected
Financial Data.
|
Item 7. |
Management
Discussion and Analysis of Financial Condition and Results of
Operations.
|
1.
|
When
customer acceptance can be estimated, expenditures are capitalized
as work
in process and deferred until completion of the contract at which
time the
costs and revenues are recognized.
|
2.
|
When
customer acceptance cannot be estimated based on historical evidence,
costs are expensed as incurred and revenue is recognized at the completion
of the contract when customer acceptance is
obtained.
|
For the Twelve Months Ended
June 30,
|
|||||||||||||
2008
|
2007
|
$ Variance
|
% Variance
|
||||||||||
Research
and development
|
$
|
3,176,000
|
$
|
2,874,000
|
$
|
302,000
|
10.5
|
%
|
|||||
Sales
and marketing
|
2,467,000
|
1,985,000
|
482,000
|
24.3
|
%
|
||||||||
General
and administrative
|
8,438,000
|
2,675,000
|
5,763,000
|
215.4
|
%
|
||||||||
Depreciation
and amortization
|
1,287,000
|
1,462,000
|
(175,000
|
)
|
(12.0
|
)%
|
|||||||
Impairment
of Goodwill
|
8,170,000
|
3,100,000
|
5,070,000
|
163.5
|
%
|
||||||||
Total
Operating Expenses
|
$
|
23,538,000
|
$
|
12,096,000
|
$
|
11,442,000
|
94.6
|
%
|
Years
Ending June 30,
|
||||
2009
|
$
|
641,000
|
||
2010
|
523,000
|
|||
2011
|
497,000
|
|||
2012
|
410,000
|
|||
2013
|
397,000
|
|||
Thereafter
|
4,462,000
|
|||
|
$
|
6,930,000
|
·
|
Business
management systems comprised of our proprietary software applications,
implementation and training and third-party hardware and
peripherals;
|
·
|
Information
products such as an accessible catalog database related to parts,
tires,
labor estimates, scheduled maintenance, repair information, technical
service bulletins, pricing and product features and benefits, which
are
used by the different participants in the automotive
aftermarket;
|
·
|
Online
services and products that connect manufacturers, warehouse distributors,
retailers and automotive service providers via the internet. These
products enable electronic data interchange throughout the automotive
aftermarket supply chain among the different trading partners. They
also
enable procurement and business services to be projected over the
internet
to an expanded business audience. Some UK clients use our information
products on their own websites and intranets; some clients in North
America and the UK use our systems and branded software to obtain
relevant
and up-to-date information via the internet;
and
|
·
|
Customer
support and consulting services that provide phone and online support,
implementation and training.
|
·
|
gradual
growth in the aggregate number of vehicles in
use;
|
·
|
an
increase in the average age of vehicles in
operation;
|
·
|
fewer
new vehicles being purchased due to a slow down in the
economy;
|
·
|
growth
in the total number of miles driven per vehicle per year;
and
|
·
|
increased
vehicle complexity.
|
Item 7A. |
Quantitative
and Qualitative Disclosures about Market Risk.
|
Item 8. |
Financial
Statements and Supplementary
Data.
|
Item 9. |
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure.
|
Item 9A(T). |
Controls
and Procedures
|
(a) |
Evaluation
of disclosure controls and
procedures
|
(b) |
Management’s
report on internal control over financial
reporting
|
(c) |
Changes
in internal control over financial
reporting
|
Item 9B. |
Other
Information
|
Item 10. |
Directors,
Executive Officers and Corporate
Governance
|
Name
|
Age
|
Position
|
||
Ian
Warwick
|
48
|
Chief
Executive Officer and Chairman of the Board of Directors of the
Company
|
||
Charles
F. Trapp
|
59
|
Chief
Financial Officer of the Company
|
||
Simon
Chadwick
|
39
|
Chief
Operating Officer and Director
|
||
Dwight
B. Mamanteo
|
39
|
Director
*
|
||
Marcus
Wohlrab
|
45
|
Director
*
|
||
Frederick
Wasserman
|
54
|
Director
|
||
Gerald
M. Czarnecki
|
68
|
Director
|
Compensation Committee:
|
Audit Committee
|
Governance and
Nomination Committee |
||
Dwight
B. Mamanteo – Chair
|
Dwight
B. Mamanteo
|
Dwight
B. Mamanteo
|
||
Marcus
Wohlrab
|
Marcus
Wohlrab
|
Marcus
Wohlrab – Chair
|
||
Frederick
Wasserman
|
Frederick
Wasserman** – Chair
|
Frederick
Wasserman
|
||
Gerald
M. Czarnecki-ex-officio member
|
Gerald
M. Czarnecki –ex-officio member
|
Gerald
M. Czarnecki – ex-officio member
|
**
|
The
Board of Directors has determined that Frederick Wasserman is a financial
expert as defined in Regulation S-K promulgated under the Securities
Act.
|
Item 11. |
Executive
Compensation
|
· |
Compensation
should be related to performance
|
· |
Our
employees should think like stockholders
|
· |
Incentive
compensation should be a greater part of total compensation for more
senior positions
|
Name and
Principal Position
|
Fiscal
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-
Equity
Incentive
Plan
Compen-
sation
($)
|
Non-
qualified
Deferred
Compen-
sation
Earnings
($)
|
All Other
Compen- sation
($)
|
Total
($)
|
|||||||||||||||||||
Ian Warwick(1)
Chief Executive |
2008
|
349,195
|
–
|
–
|
–
|
–
|
–
|
–
|
349,195
|
|||||||||||||||||||
Officer,
President and Director
|
2007
|
350,682
|
–
|
–
|
–
|
–
|
–
|
–
|
350,682
|
|||||||||||||||||||
Simon
Chadwick(2)
Chief Operating |
2008
|
259,402
|
–
|
–
|
–
|
–
|
–
|
–
|
259,402
|
|||||||||||||||||||
Officer
and Director
|
2007
|
260,507
|
–
|
–
|
–
|
–
|
–
|
–
|
260,507
|
|||||||||||||||||||
Charles
F. Trapp(3)
Vice President, |
2008
|
214,583
|
–
|
25,500
|
(3)
|
–
|
–
|
–
|
–
|
240,083
|
||||||||||||||||||
Finance,
and Chief Financial Officer
|
2007
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
|||||||||||||||||||
Michael
O’Driscoll(4)
Former Chief |
2008
|
93,593
|
–
|
–
|
–
|
–
|
–
|
46,992
|
(4)
|
140,585
|
||||||||||||||||||
Financial
Officer and Director
|
2007
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
|||||||||||||||||||
Michael
Jamieson(5)
Former Chief |
2008
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
|||||||||||||||||||
Operating
Officer
|
2007
|
196,384
|
–
|
–
|
–
|
–
|
–
|
–
|
196,384
|
(1)
|
Reflects
salary paid to Mr. Warwick for services rendered to us and our
subsidiaries during fiscal 2008 and 2007 as Aftersoft’s Chief Executive
Officer and President. Salary was paid in British pounds at an annual
salary of 175,000 GBP. The amounts shown was translated to US dollars
based on a June 30, 2008 currency conversion rate of 1 GBP = $1.9954
and
the June 30, 2007 currency conversion rate of 1 GBP = $2.0039. Mr.
Warwick
did not receive any additional compensation for his services as a
director
on our Board of Directors.
|
(2)
|
Reflects
annual salary paid to Mr. Chadwick for services rendered to us and
our
subsidiaries during fiscal 2008 and 2007 as Aftersoft’s Chief Operating
Officer. Salary was paid in British pounds at an annual salary of
130,000
GBP. The amounts shown was translated to US dollars based on a June
30,
2008 currency conversion rate of 1 GBP = $1.9954 and the June 30,
2007
currency conversion rate of 1 GBP = $2.0039. Mr. Chadwick did not
receive
any additional compensation for his services as a director on Board
of
Directors.
|
(3)
|
Mr.
Trapp was appointed Vice President Finance and Chief Financial Officer
effective as of December 1, 2007. The amount shown in the table reflects
salary in the amount of $134,167 earned for services in these capacities
between December 1, 2007 and June 30, 2008, as well as salary in
the
amount of $80,416 earned for services as an accountant prior to his
appointment as an officer. The salary for fiscal 2008 also includes
$20,500 that was deferred and contributed by Mr. Trapp to the Company’s
plan established under section 401(k) of the Internal Revenue Code
of
1986, as amended. The amount shown in the “Stock Awards” column reflects
the dollar amount recognized for fiscal 2008 financial statement
reporting
purposes of the outstanding stock awards held by Mr. Trapp in accordance
with FAS 123R. Stock award represent an award on May 13, 2008 of
750,000
shares of common stock with a grant date closing price of $0.10 per
share,
of which 34% or 255,000 shares vested immediately on the date of
grant.
The value of the grant was based on the closing market price of $0.10
multiplied by 255,000, the number of vested shares. The remaining
66% of
the shares or 495,000 shares, will vest in three equal installments
of
165,000 shares on each of the first, second and third anniversaries
of the
grant date. The shares were not issued pursuant to any existing
compensation plan. Mr. Trapp held no other stock or option awards
at June
30, 2008.
|
(4)
|
The
2008 salary reflected in the table was earned by Mr. O’Driscoll for
services rendered as our Chief Financial Officer between July 1,
2007 and
November 30, 2007 in the amount of $93,593. The amount shown under
“All
Other Compensation” reflects amounts paid to Mr. O’Driscoll in connection
with the termination of his employment with the Company. The salary
and
termination payments were made in British pounds and were translated
to US
dollars based on the November 30, 2007 currency conversion rate of
1 GBP
=$2.0705.
|
(5)
|
Mr.
Jamieson previously served as our Chief Operating Officer and a Director
on our Board of Directors, but resigned these positions on March
6, 2007.
The amount shown in the table reflects compensation paid to him for
his
services during 2007 as Chief Executive Officer of our subsidiary,
MAM
Software Ltd. The amount shown reflects annual salary paid to Mr.
Jamieson
in British pounds at an annual salary of 98,000 GPB, and was translated
to
US dollars based on June 30, 2007 currency conversion rate of 1 GBP
=
$2.0039.
|
Option Awards
|
Stock Awards
|
|||||||||||||||||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options
(#
Exercisable)
|
Number of
Securities
Underlying
Unexercised
Options
(#
Unexercis-
able)
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested
(#)
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested
($)
|
|||||||||||||||||||
Ian
Warwick
|
||||||||||||||||||||||||||||
Simon
Chadwick
|
||||||||||||||||||||||||||||
Charles
F. Trapp
|
–
|
–
|
–
|
–
|
–
|
495,000
|
(1)
|
$
|
123,750
|
(2)
|
–
|
–
|
||||||||||||||||
Michael
O’Driscoll
|
(1)
|
Stock
awards represent an award on May 13, 2008 to Mr. Trapp of 750,000
shares
of common stock with a grant date fair value of $0.10 per share,
of which
34%, or 255,000 shares, vested immediately on the date of grant.
The
remaining 66% of the shares, the 495,000 shares reflected in the
table,
will vest in three equal installments of 165,000 shares, on each
of the
first, second and third anniversaries of the grant date. The shares
were
not issued pursuant to any existing compensation plan.
|
(2)
|
Based
on the closing price of $0.25 of the Company’s common stock on June 30,
2008.
|
Name
|
Fees Earned
or Paid in
Cash
($)
|
Stock Awards
($)(1)
|
Options
Awards
($)
|
Non-Equity
Incentive Plan
Compensation
($)
|
Non-Qualified
Deferred
Compensation
Earnings
($)
|
All Other
Compensation
($)
|
Total
($)
|
||||||||||||||||||||||||||||||||||||
Ian Warwick
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
||||||||||||||||||||||||||||||||||||
Simon
Chadwick
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
||||||||||||||||||||||||||||||||||||
Dwight
B. Mamanteo
|
29,000
|
850
|
–
|
–
|
–
|
–
|
29,850
|
||||||||||||||||||||||||||||||||||||
Marcus
Wohlrab
|
29,000
|
850
|
–
|
–
|
–
|
–
|
29,850
|
||||||||||||||||||||||||||||||||||||
Frederick
Wasserman
|
28,600
|
850
|
–
|
–
|
–
|
–
|
29,450
|
(1)
|
The
amount shown in the table reflects the dollar amount recognized for
fiscal
2008 financial statement reporting purposes of the outstanding stock
awards held by the directors in accordance with FAS 123R. Stock awards
represent an award on May 13, 2008 to each of Mr. Mamanteo, Wohlrab
and
Wasserman of 25,000 shares of common stock with a grant date closing
price
of $0.10 per share, of which 34% or 8,500 shares, vested immediately
on
the date of grant. The value of the grant was based on the closing
market
price of $0.10 multiplied by 8,500, the number of vested shares.
The
remaining 66% of the shares, or 16,500 shares, will vest in three
equal
installments of 5,500 shares, on each of the first, second and third
anniversaries of the grant date. The shares were not issued pursuant
to
any existing compensation plan. The directors held no other stock
or
option awards at June 30, 2008.
|
Item 12. |
Security
Ownership Of Certain Beneficial Owners And Management and Related
Stockholder Matters.
|
Name and Address of Beneficial Owner
|
Amount and Nature of
Beneficial Ownership
|
Percent of class of
Common Stock(1)
|
|||||
Wynnefield
Capital, Inc.(2)
450 Seventh Ave., Suite 509 New York, NY 10123 |
6,250,004
|
6.52
|
%
|
||||
Lewis
Asset Management Corp.(3)
45 Rockefeller Plaza New York, NY 10111 |
12,805,998
|
12.92
|
%
|
||||
ComVest
Capital LLC(4)
105 S. Narcissus Ave. West Palm Beach, FL 33401 |
8,416,666
|
8.32
|
%
|
||||
Auto
Data Network, Inc.(5)
151 First Avenue 65 New York, NY 10003 |
71,250,000
|
76.83
|
%
|
Name and Address of Beneficial Owner
|
Amount and Nature of
Beneficial Ownership
|
Percent of class of
Common Stock(1)
|
|||||
Directors
and Officers:
|
|||||||
Ian
Warwick(5)
Chief Executive Officer and Chairman |
0
|
0.00
|
%
|
||||
Simon
Chadwick
Chief Operating Officer |
0
|
0.00
|
%
|
||||
Charles
F. Trapp
Chief Financial Officer |
255,000
|
(6)
|
0.28
|
%
|
|||
Frederick
G. Wasserman,
Director |
8,500
|
(6)
|
0.01
|
%
|
|||
Dwight
B. Mamanteo,
Director |
8,500
|
(6)
|
0.01
|
%
|
|||
Marcus
Wohlrab,
Director |
8,500
|
(6)
|
0.01
|
%
|
|||
Gerald
M. Czarnecki,
Director |
0
|
0.00
|
%
|
||||
Executive
Officers and Directors as a group (7 persons)
|
280,500
|
(6)
|
0.30
|
%
|
|||
Former
Officers:
|
|||||||
Michael
Jamieson
|
340,000
|
0.37
|
%
|
||||
Michael
O’Driscoll
|
0
|
0.00
|
%
|
(1)
|
Based
on a total of 92,733,220 shares of Common Stock outstanding. In accordance
with Securities and Exchange Commission rules, each person’s percentage
interest is calculated by dividing the number of shares that person
owns
by the sum of (a) the total number of shares outstanding as of September
25, 2008 plus (b) the number of shares such person has the right
to
acquire within sixty (60) days of September 25,
2008.
|
(2)
|
Includes
3,125,002 shares of common stock and 3,125,002 shares issuable upon
exercise of warrants to purchase shares of common stock, which are
currently exercisable at $1.00 per share and expire July 2, 2013.
Dwight
Mamanteo, one of the Company’s directors, is a securities analyst and
portfolio manager with Wynnefield Capital, Inc. He neither exercises
voting or dispositive control over the shares beneficially owned
by
Wynnefield Capital, Inc. The Company has been informed that Nelson
Obus
exercises voting and investment control over the shares owned by
Wynnefield Capital, Inc.
|
(3)
|
Includes
6,402,999 shares of common stock, and 6,402,999 shares issuable upon
exercise of warrants to purchase shares of common stock, which are
currently exercisable at $1.00 per share and expire July 2, 2013.
The
Company has been informed that Austin Lewis exercises voting and
investment control over the shares owned by Lewis Asset Management
Corp.
|
(4)
|
Includes
(i) 1,000,000 shares issuable upon exercise of warrants to purchase
shares
of common stock, which are currently exercisable at $0.11 per share
and
expire December 31, 2013; (ii) 2,083,333 shares issuable upon exercise
of
warrants to purchase shares of common stock, which are currently
exercisable at $0.3625 per share and expire December 31, 2013; (iii)
2,000,000 shares issuable upon exercise of warrants to purchase shares
of
common stock, which are currently exercisable at $0.11 per share
and
expire December 31, 2013, and (iv) 3,333,333 shares issuable upon
conversion of the $5,000,000 convertible 11% note due December 2010,
convertible at $1.50 per share. The Company has been informed that
Gary
Jaggard exercises voting and investment control over the shares owned
by
ComVest Capital LLC.
|
(5)
|
Mr.
Warwick, as the Chief Executive Officer of ADNW and Aftersoft, has
power
to vote and dispose of the Company’s Common Stock owned by ADNW. Mr.
Warwick disclaims beneficial ownership of the 71,250,000 shares of
Common
Stock held by ADNW.
|
(6)
|
Represents
34% of an award of restricted shares of common stock granted by the
Company for services previously rendered, which vested immediately.
The
remaining 66% of the shares will vest in three equal installments
on each
of the first, second and third anniversaries of the grant date.
|
Item 13. |
Certain
Relationships and Related Transactions, and Director
Independence
|
·
|
From
time to time ADNW advances funds to the Company. As of April 30,
2008, the
balance of such advances was zero. During the year payments totaling
$617,000 were advanced to the Aftersoft Group with repayments of
$219,000,
giving a net effect of $398,000. The Company transferred its note
receivable with a related party known as MAM North America, Inc.
(“MAM
North America”) in the amount of $510,000 to ADNW. ADNW agreed to accept
the assignment for all the issued shares of MAM North America from
the
Company and repaid the $510,000 note receivable on October 1, 2005
by
allowing the Company to reduce its balance of loans due to ADNW.
The
Company sold its 43% shareholder interests in MAM Software North
America,
Inc. in October 2005. As a consequence of the sale ADNW agreed that
MAM
Software Limited could offset the $510,000 note receivable from MAM
Software North America, Inc. against the outstanding debt due ADNW.
The
net book value of the Company’s investment in MAM Software North America,
Inc. prior to the transfer to ADNW was nil. The transactions allowed
the
Company to improve its balance sheet by reducing loans due to the
parent
company. Furthermore MAM North America has indemnified MAM UK against
all
past or current liabilities. In December 2005, the Company sold property
and equipment to a third party for $308,000, who paid the $308,000
directly to ADNW. On June 10, 2006, the Company sold 100% of the
outstanding Common Stock of Euro Soft (which by then had its own
operations) to a different third party for $1,400,000. The proceeds
from
the sale of Euro Soft were paid by this third party purchaser directly
to
ADNW. No prior or subsequent relationship has existed between ADNW
or
Aftersoft with either of these
purchasers.
|
·
|
The
Company has issued the following common stock to ADNW as full
consideration of three
acquisitions:
|
- |
On
December 21, 2005, the Company issued 32,500,000 shares of its common
stock to ADNW for the acquisition of MAM Software Limited and CarParts
Technologies Inc. ADNW is the Company’s parent corporation by virtue of
its ownership of 76.83% of the Company’s common stock. Prior to this
transaction, ADNW owned 100% of MAM Software Limited and CarParts
Technologies, Inc. The approximate dollar value of the 32,500,000
shares
that were issued at the time was $54,925,000, which is based on the
closing price of our stock of $1.69 per share on that date. The
transaction was undertaken as part of the spin-off of businesses
that were
formerly owned by ADNW into what ultimately became Aftersoft Group,
Inc.
|
- |
On
August 25, 2006, the Company issued 28,000,000 shares of its common
stock
to ADNW for the acquisition of EXP. EXP is a former subsidiary of
the
Company, which was sold on November 12, 2007. ADNW is the Company’s parent
corporation by virtue of its ownership of 76.83% of the Company’s common
stock. Prior to this transaction, ADNW owned 100% of EXP. The transaction
was undertaken with ADNW because we believed that the time that EXP
would
prove to be a strategic component of our business in the United States.
The approximate dollar value of the 28,000,000 shares that were issued
at
the time was $30,800,000, which is based on the closing price of
our stock
of $1.10 per share on that date.
|
- |
On
February 1, 2007, the Company issued 16,750,000 shares of its common
stock
to ADNW for the acquisition of DSS. DSS is a former subsidiary of
the
Company, which was sold on November 12, 2007. ADNW is the Company’s parent
corporation by virtue of its ownership of 76.83% of the Company’s common
stock. Prior to this transaction, ADNW owned 100% of DSS. The transaction
was undertaken with ADNW because we believed that the time that DSS
would
prove to be a strategic component of our business in the United States.
The approximate dollar value of the 16,750,000 shares that were issued
at
the time was $15,075,000, which is based on the closing price of
our stock
of $0.90 per share on that date.
|
- |
Transactions
with Auto Data Network, Inc.
|
Balance
due to ADNW as of June 30, 2005
|
$
|
(884,418
|
)
|
|
Transfer
of advances made to MAM Software USA to ADNW
|
510,000
|
|||
Advances
received from ADNW
|
(633,875
|
)
|
||
Payments
made on behalf of ADNW
|
236,183
|
|||
Payment
made from Note Receivable by a third party direct to ADNW
|
450,000
|
|||
Proceeds
from sale of Aftersoft Fixed Assets paid by a third party direct
to
ADNW
|
308,000
|
|||
Balance
due to ANDW as of June 30, 2006
|
(14,110
|
)
|
||
Payments
made by ADNW to third parties for earn-outs on behalf of Aftersoft
|
(2,200,000
|
)
|
||
Payments
made from note receivable by third party direct to ADNW
|
950,000
|
|||
Payments
made on behalf of ADNW
|
1,528,110
|
|||
Balance
due from ADNW as of June 30, 2007
|
264,000
|
|||
Payments
made on behalf of ADNW
|
2,108,000
|
|||
Write
down of advance to net realizable value
|
(800,000
|
)
|
||
16,000,000
shares of ADNW common stock issued in April 2008 by ADNW to the Company
as
payment for advances
|
(1,572,000
|
)
|
||
Balance
at June 30, 2008
|
$
|
0
|
Item 14. |
Principal
Accounting Fees and Services.
|
For the Year Ended June 30,
|
|||||||
2008
|
2007
|
||||||
Audit
fees(1)
|
$
|
153,000
|
$
|
186,000
|
|||
Audit-
related fees(2)
|
79,000
|
32,000
|
|||||
Tax
fees(3)
|
–
|
–
|
|||||
All
other fees
|
–
|
–
|
|||||
Total
fees
|
$
|
232,000
|
$
|
218,000
|
(1)
|
Audit
fees are comprised of annual audit fees and quarterly review
fees.
|
(2)
|
Audit-related
fees for fiscal years 2008 and 2007 are comprised of consent fees
and work
on registration statements, consultation fees on accounting issues,
and
fees related to the restatements of the fiscal 2007 quarterly reports
that
were filed in fiscal 2008.
|
(3)
|
There
are no tax fees which usually comprise of tax compliance and consultation
fees.
|
Item 15. |
Exhibits,
Financial Statement
Schedules.
|
Exhibit
No. |
Description
of Exhibit
|
|
3(i)
|
Certificate
of Incorporation of Aftersoft Group, Inc., as amended (incorporated
by
reference to Exhibit 3(i) to the Company’s Registration Statement on Form
S-1/A filed on July 15, 2008).
|
|
3(ii)
|
By
laws (incorporated by reference to Exhibit 3(ii) to the Company’s Form
10-KSB filed on November 17, 2006).
|
|
4.1
|
Form
of Certificate of Common Stock (incorporated by reference to Exhibit
4.1
to the Company’s Registration Statement on Form SB-2 filed on February 16,
2007).
|
|
5.1
|
Opinion
of Gersten Savage LLP regarding the legality of the securities being
registered (filed herewith).
|
|
10.1
|
Share
Sale Agreement relating to EXP Dealer Software Limited dated August
4,
2006 among Auto Data Network, Inc., Aftersoft Group, Inc. and Aftersoft
Dealer Software Limited (incorporated by reference to Exhibit 10.1
to the
Company’s Current Report on Form 8-K filed on August 31,
2006).
|
|
10.2
|
Share
Sale Agreement relating to Dealer Software and Services Limited dated
February 1, 2007 between Aftersoft Group, Inc. and Auto Data Network,
Inc.
(incorporated by reference to Exhibit 10.1 to the Company’s Current Report
on Form 8-K filed on February 7, 2007).
|
|
10.3
|
Form
of Securities Purchase Agreement (incorporated by reference to Exhibit
10.1 to Aftersoft Group, Inc.’s Current Report on Form 8-K filed July 6,
2007).
|
|
10.4
|
Form
of Common Stock Purchase Warrant (incorporated by reference to Exhibit
10.2 to Aftersoft Group, Inc.’s Current Report on Form 8-K filed July 6,
2007).
|
|
10.5
|
Form
of Registration Rights Agreement (incorporated by reference to Exhibit
10.3 to Aftersoft Group, Inc.’s Current Report on Form 8-K filed July 6,
2007).
|
|
10.6
|
Settlement
and Release Agreement between AFS and McKenna (incorporated by reference
to Exhibit 99.1 to Aftersoft Group, Inc.’s Current Report on Form 8-K
filed August 6, 2007).
|
|
10.7
|
Revolving
Credit and Term Loan Agreement dated as of December 21, 2007, by
and
between ComVest Capital LLC, as Lender, and Aftersoft Group, Inc.,
as
Borrower (incorporated by reference to Aftersoft Group, Inc.’s Current
Report on Form 8-K filed December 31, 2007).
|
|
10.8
|
Revolving
Credit Note, dated December 21, 2007 in the principal amount of $1,000,000
(incorporated by reference to Aftersoft Group, Inc.’s Current Report on
Form 8-K filed December 31, 2007).
|
Exhibit
No. |
Description
of Exhibit
|
|
10.9
|
Convertible
Term Note, dated December 21, 2007 in the principal amount of $5,000,000
(incorporated by reference to Aftersoft Group, Inc.’s Current Report on
Form 8-K filed December 31, 2007).
|
|
10.10
|
Collateral
Agreement dated as of December 21, 2007 by and among Aftersoft Group,
Inc., Aftersoft Network, N.A. Inc., MAM Software Ltd., Aftersoft
Group
(UK) Ltd., AFS Warehouse Distribution Management, Inc., AFS Tire
Management, Inc. and AFS Autoservice Inc., and ComVest Capital LLC
(incorporated by reference to Aftersoft Group, Inc.’s Current Report on
Form 8-K filed December 31, 2007).
|
|
10.11
|
Guaranty
Agreement dated December 21, 2007 by Aftersoft Network, N.A. Inc.,
MAM
Software Ltd., Aftersoft Group (UK) Ltd., AFS Warehouse Distribution
Management, Inc., AFS Tire Management, Inc. and AFS Autoservice Inc.,
in
favor of ComVest Capital LLC (incorporated by reference to Aftersoft
Group, Inc.’s Current Report on Form 8-K filed December 31,
2007).
|
|
10.12
|
Form
of Validity Guaranty (incorporated by reference to Aftersoft Group,
Inc.’s
Current Report on Form 8-K filed December 31, 2007).
|
|
10.13
|
Warrant,
dated as of December 21, 2007, to Purchase 1,000,000 Shares of Common
Stock of Aftersoft Group, Inc. (incorporated by reference to Aftersoft
Group, Inc.’s Current Report on Form 8-K filed December 31,
2007).
|
|
10.14
|
Warrant,
dated as of December 21, 2007, to Purchase 2,000,000 Shares of Common
Stock of Aftersoft Group, Inc. (incorporated by reference to Aftersoft
Group, Inc.’s Current Report on Form 8-K filed December 31,
2007).
|
|
10.15
|
Warrant,
dated as of December 21, 2007, to Purchase 2,083,333 Shares of Common
Stock of Aftersoft Group, Inc. (incorporated by reference to Aftersoft
Group, Inc.’s Current Report on Form 8-K filed December 31,
2007).
|
|
10.16
|
Registration
Rights Agreement dated as of December 21, 2007 by Aftersoft Group,
Inc.
for the benefit of the holders (incorporated by reference to Aftersoft
Group, Inc.’s Current Report on Form 8-K filed December 31,
2007).
|
|
10.17
|
Share
Sale Agreement, dated November 12, 2007, between EU Web Services,
Ltd., as
Purchaser, Aftersoft Group, Inc., as Vendor, and EXP Dealer Software
Ltd.
(incorporated by reference to Aftersoft Group, Inc.’s Current Report on
Form 8-K filed November 16, 2007)
|
|
14
|
Code
of Ethics (incorporated by reference to Exhibit 14 to the Company’s Annual
report on Form 10-K/A for the fiscal year ended June 30, 2007 filed
October 15, 2007.)
|
|
21
|
List
of subsidiaries (incorporated by reference to Exhibit 21 to the Company’s
Registration Statement on Form S-1/A filed on July 15,
2008).
|
Exhibit
No.
|
Description
of Exhibit
|
|
31.1
|
Certification
of Principal Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (filed
herewith).
|
|
31.2
|
Certification
of Principal Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (filed
herewith).
|
|
32.1
|
Certification
of Principal Executive Officer pursuant to 18 U.S.C. Section 1350,
as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(filed
herewith).
|
|
32.2
|
Certification
of Principal Financial Officer pursuant to 18 U.S.C. Section 1350,
as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(filed
herewith).
|
Aftersoft
Group, Inc.
|
||
Date:
September 29, 2008
|
By:
|
/s/
Ian Warwick
|
Ian
Warwick
|
||
Chief
Executive Officer
(Principal
Executive Officer)
|
Aftersoft
Group, Inc.
|
||
Date
: September 29, 2008
|
By:
|
/s/
Ian Warwick
|
Ian
Warwick
|
||
Chief
Executive Officer, Chairman and Director
(Principal Executive Officer) |
||
Date:
September 29, 2008
|
By:
|
/s/
Charles Trapp
|
Charles
Trapp
|
||
Chief
Financial Officer
(Principal
Financial Officer and Principal
Accounting Officer) |
||
Date
: September 29, 2008
|
By:
|
/s/
Simon Chadwick
|
Simon
Chadwick
|
||
Chief
Operating Officer and Director
|
||
Date
: September 29. 2008
|
By:
|
/s/
Frederick Wasserman
|
Frederick
Wasserman
|
||
Audit
Committee Chair and Director
|
||
Date
: September 29, 2008
|
By:
|
/s/
Dwight Mamanteo
|
Dwight
Mamanteo
|
||
Compensation
Committee Chair and Director
|
||
Date
: September 29. 2008
|
By:
|
/s/
Marcus Wohlrab
|
Marcus
Wohlrab
|
||
Governance
Committee Chair and Director
|
||
Date
: September 29. 2008
|
By:
|
/s/
Gerald M. Czarmecki
|
Gerald
M. Czarnecki
|
||
Lead
Director, ex
officio
member of all committees
|
F–2
|
|
Consolidated
Balance Sheets as of June 30, 2008 and 2007
|
F–3
|
Consolidated
Statements of Operations and Comprehensive Loss for the years
ended
June 30, 2008 and 2007 |
F–4
|
Consolidated
Statements of Stockholders’ Equity for the years ended
June
30, 2008 and 2007
|
F–5
|
Consolidated
Statements of Cash Flows for the years ended June 30, 2008 and
2007
|
F–6
|
Notes
to Consolidated Financial Statements
|
F–8
|
June
30,
|
|||||||
2008
|
2007
|
||||||
ASSETS
|
|||||||
Current
Assets
|
|||||||
Cash
and cash equivalents
|
$
|
1,964
|
$
|
583
|
|||
Accounts
receivable, net of allowance of $202 and $227
|
3,233
|
2,851
|
|||||
Investment
in non-marketable securities
|
-
|
688
|
|||||
Inventories
|
615
|
319
|
|||||
Current
assets of discontinued operations
|
-
|
2,587
|
|||||
Prepaid
expenses and other current assets
|
690
|
278
|
|||||
Total
Current Assets
|
6,502
|
7,306
|
|||||
Property
and Equipment, Net
|
592
|
209
|
|||||
Other
Assets
|
|||||||
Goodwill
|
11,878
|
20,030
|
|||||
Amortizable
intangible assets, net
|
4,584
|
5,265
|
|||||
Software
development costs, net
|
1,718
|
1,301
|
|||||
Investments
in available-for-sale securities
|
4,102
|
-
|
|||||
Non-current
assets of discontinued operations
|
-
|
4,742
|
|||||
Other
long-term assets
|
426
|
29
|
|||||
Total
Assets
|
$
|
29,802
|
$
|
38,882
|
|||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
Current
Liabilities
|
|||||||
Accounts
payable
|
$
|
2,372
|
$
|
2,196
|
|||
Accrued
expenses and other
|
3,508
|
1,811
|
|||||
Current
portion of accrued litigation costs
|
-
|
2,000
|
|||||
Payroll
and other taxes
|
933
|
866
|
|||||
Current
portion of long-term debt
|
598
|
1,020
|
|||||
Current
portion of deferred revenue
|
607
|
643
|
|||||
Taxes
payable
|
379
|
391
|
|||||
Current
liabilities of discontinued operations
|
-
|
2,044
|
|||||
Total
Current Liabilities
|
8,397
|
10,971
|
|||||
Long-Term
Liabilities
|
|||||||
Deferred
revenue, net of current portion
|
545
|
753
|
|||||
Deferred
income taxes
|
880
|
880
|
|||||
Accrued
litigation costs, net of current portion
|
-
|
825
|
|||||
Long-term
debt, net of current portion and debt discount
|
4,783
|
679
|
|||||
Other
|
142
|
-
|
|||||
Total
Liabilities
|
14,747
|
14,108
|
|||||
Commitments
and contingencies
|
|||||||
STOCKHOLDERS'
EQUITY
|
|||||||
Preferred
stock:
|
|||||||
Par
value $0.0001 per share; 10,000,000 shares authorized, none issued
and
outstanding
|
-
|
-
|
|||||
Common
stock:
|
|||||||
Par
value $0.0001 per share; 150,000,000 shares authorized, 92,733,220
and
80,127,384 shares issued and outstanding, respectively
|
9
|
8
|
|||||
Additional
paid-in capital
|
31,732
|
26,123
|
|||||
Due
from parent company
|
(2,850
|
)
|
(264
|
)
|
|||
Accumulated
other comprehensive income
|
1,617
|
1,523
|
|||||
Accumulated
deficit
|
(15,453
|
)
|
(2,616
|
)
|
|||
Total
Stockholders' Equity
|
15,055
|
24,774
|
|||||
Total
Liabilities and Stockholders' Equity
|
$
|
29,802
|
$
|
38,882
|
For
the year
|
For
the year
|
||||||
ended
|
ended
|
||||||
June
30,
|
June
30,
|
||||||
2008
|
2007
|
||||||
Revenues
|
$
|
22,463
|
$
|
20,217
|
|||
Cost
of revenues
|
10,429
|
9,357
|
|||||
Gross
Profit
|
12,034
|
10,860
|
|||||
Operating
Expenses
|
|||||||
Research
and development
|
3,176
|
2,874
|
|||||
Sales
and marketing
|
2,467
|
1,985
|
|||||
General
and administrative
|
8,438
|
2,675
|
|||||
Depreciation
and amortization
|
1,287
|
1,462
|
|||||
Impairment
of goodwill
|
8,170
|
3,100
|
|||||
Total
Operating Expenses
|
23,538
|
12,096
|
|||||
Operating
Loss
|
(11,504
|
)
|
(1,236
|
)
|
|||
Other
Income (Expense)
|
|||||||
Gain
on extinguishment of liability
|
-
|
487
|
|||||
Interest
expense
|
(874
|
)
|
(129
|
)
|
|||
Gain
on sale of investments
|
1,312
|
-
|
|||||
Litigation
settlement , net
|
76
|
(2,350
|
)
|
||||
Other,
net
|
57
|
16
|
|||||
Total
other income (expense), net
|
571
|
(1,976
|
)
|
||||
Loss
from continuing operations before provision for income
taxes
|
(10,933
|
)
|
(3,212
|
)
|
|||
Provision
for income taxes
|
873
|
782
|
|||||
Loss
from continuing operations
|
(11,806
|
)
|
(3,994
|
)
|
|||
Income
from discontinued operations, net of tax
|
13
|
884
|
|||||
Loss
on sale of discontinued operations, net of tax
|
(26
|
)
|
(378
|
)
|
|||
Net
Loss
|
(11,819
|
)
|
(3,488
|
)
|
|||
Unrealized
loss on investments in available-for-sale securities
|
(184
|
)
|
-
|
||||
Foreign
currency translation gain
|
278
|
1,899
|
|||||
Total
Comprehensive Loss
|
$
|
(11,725
|
)
|
$
|
(1,589
|
)
|
|
Loss
per share attributed to common stockholders – basic and
diluted
|
|||||||
Net
loss from continuing operations
|
$
|
(0.15
|
)
|
(0.05
|
)
|
||
Discontinued
operations
|
-
|
0.01
|
|||||
Net
Loss
|
$
|
(0.15
|
)
|
(0.04
|
)
|
||
Loss
per share attributed to common stockholders – basic and
diluted
|
|||||||
87,057,391
|
79,828,912
|
Common Stock
|
||||||||||||||||||||||
Shares
|
Amount
|
Additional
Paid-in-
Capital
|
Due To
(From)
Parent
|
Other
Comprehensive
Income (Loss)
|
Retained
Earnings
(Accumulated
Deficit)
|
Total
|
||||||||||||||||
Balance
as of June 30, 2006
|
79,821,167
|
$
|
8
|
$
|
25,564
|
$
|
14
|
$
|
(376
|
)
|
$
|
872
|
$
|
26,082
|
||||||||
Common
stock issued to consultants for services performed
|
6,217
|
-
|
3
|
-
|
-
|
-
|
3
|
|||||||||||||||
Common
stock issued to convert long-term debt
|
300,000
|
-
|
144
|
-
|
-
|
-
|
144
|
|||||||||||||||
Fair
value of warrants issued for litigation costs
|
-
|
-
|
412
|
-
|
-
|
-
|
412
|
|||||||||||||||
Advances
to parent company, net
|
-
|
-
|
-
|
(278
|
)
|
-
|
-
|
(278
|
)
|
|||||||||||||
Foreign
currency translation adjustment
|
-
|
-
|
-
|
-
|
1,899
|
-
|
1,899
|
|||||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
-
|
(3,488
|
)
|
(3,488
|
)
|
|||||||||||||
Balance
as of June 30, 2007
|
80,127,384
|
8
|
26,123
|
(264
|
)
|
1,523
|
(2,616
|
)
|
24,774
|
|||||||||||||
Common
stock issued for cash
|
5,208,337
|
1
|
2,035
|
-
|
-
|
-
|
2,036
|
|||||||||||||||
Common
stock issued to settle litigation
|
1,718,750
|
-
|
825
|
-
|
-
|
-
|
825
|
|||||||||||||||
Litigation
settlement shares returned
|
(1,718,750
|
)
|
-
|
(275
|
)
|
-
|
-
|
-
|
(275
|
)
|
||||||||||||
Fair
value of warrants issued to settle litigation
|
-
|
-
|
152
|
-
|
-
|
152
|
||||||||||||||||
Fair
value of warrants issued to consultant
|
-
|
-
|
27
|
-
|
-
|
-
|
27
|
|||||||||||||||
Fair
value of warrants issued with long-term debt
|
-
|
-
|
910
|
-
|
-
|
-
|
910
|
|||||||||||||||
Common
stock and warrants issued for parent company common stock
|
6,402,999
|
-
|
1,812
|
-
|
-
|
(1,018
|
)
|
794
|
||||||||||||||
Common
stock issued as compensation
|
994,500
|
-
|
99
|
-
|
-
|
99
|
||||||||||||||||
Fair
value of warrants issued to lender
|
-
|
-
|
24
|
-
|
-
|
-
|
24
|
|||||||||||||||
Foreign
currency translation adjustment
|
-
|
-
|
-
|
-
|
278
|
-
|
278
|
|||||||||||||||
Unrealized
loss on investment in available-for-sale securities
|
-
|
-
|
-
|
-
|
(184
|
)
|
-
|
(184
|
)
|
|||||||||||||
Advances
to parent company, net
|
-
|
-
|
-
|
(2,586
|
)
|
-
|
-
|
(2,586
|
)
|
|||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
-
|
(11,819
|
)
|
(11,819
|
)
|
|||||||||||||
Balance
June 30, 2008
|
92,733,220
|
$
|
9
|
$
|
31,732
|
$
|
(2,850
|
)
|
$
|
1,617
|
$
|
(15,453
|
)
|
$
|
15,055
|
For the year
ended
June 30,
2008
|
For the year
ended
June 30,
2007
|
||||||
Cash
Flows from operating activities :
|
|||||||
Net
loss
|
$
|
(11,819
|
)
|
$
|
(3,488
|
)
|
|
Adjustments
to reconcile net loss to net cash (used in) provided by operating
activities:
|
|||||||
Non-cash
revenues
|
-
|
(360
|
)
|
||||
Depreciation
and amortization
|
1,286
|
1,947
|
|||||
Debt
discount amortization
|
412
|
-
|
|||||
Gain
on extinguishment of liability
|
-
|
(487
|
)
|
||||
Loss
on disposition of property and equipment
|
16
|
4
|
|||||
Gain
on sale of investment in non-marketable securities
|
(1,312
|
)
|
-
|
||||
Loss
on settlements of amount due from parent company
|
1,091
|
-
|
|||||
Loss
on sale of discontinued operations
|
26
|
378
|
|||||
Gain
on modification of debt settlement
|
(123
|
)
|
-
|
||||
Fair
value of stock and warrants issued for services and
compensation
|
126
|
3
|
|||||
Fair
value of warrants issued for debt waiver
|
24
|
-
|
|||||
Fair
value of warrants issued for litigation costs
|
-
|
412
|
|||||
Impairment
of goodwill
|
8,170
|
3,100
|
|||||
Changes
in assets and liabilities (net of the effect of acquisitions and
divestitures):
|
|||||||
Accounts
receivable
|
(382
|
)
|
(233
|
)
|
|||
Inventories
|
(37
|
)
|
(75
|
)
|
|||
Prepaid
expenses and other assets
|
(671
|
)
|
(59
|
)
|
|||
Net
advances to parent company relating to operating
activities
|
(2,060
|
)
|
(278
|
)
|
|||
Accounts
payable
|
176
|
884
|
|||||
Taxes
payable
|
151
|
(224
|
)
|
||||
Deferred
revenue
|
172
|
(1,235
|
)
|
||||
Accrued
expenses and other liabilities
|
1,884
|
300
|
|||||
Accrued
litigation costs
|
(2,000
|
)
|
1,805
|
||||
Net
cash (used in) provided by operating activities
|
(4,870
|
)
|
2,394
|
||||
Cash
flows from investing activities :
|
|||||||
Cash
sold in divestitures
|
(157
|
) |
-
|
||||
Purchase
of property and equipment
|
(383
|
)
|
(228
|
)
|
Proceeds
from the sale of investment in non-marketable securities
|
2,000
|
-
|
|||||
Net
advances to parent company relating to investing
activities
|
-
|
(1,250
|
)
|
||||
Capitalized
software development costs
|
(681
|
)
|
(585
|
)
|
|||
Net
cash provided by (used in) investing activities
|
779
|
(2,063
|
)
|
||||
Cash
Flows from financing activities :
|
|||||||
Proceeds
from sale of common stock, net of cash issuance costs
|
2,036
|
-
|
|||||
Proceeds
from long-term debt, net of cash issuance costs
|
4,359
|
-
|
|||||
Payments
on long-term debt
|
(1,062
|
)
|
(84
|
)
|
|||
Net
cash provided by (used in) financing activities
|
5,333
|
(84
|
)
|
||||
Effect
of exchange rate changes
|
57
|
(40
|
)
|
||||
Net
increase in cash and cash equivalents
|
1,299
|
207
|
|||||
Cash
and cash equivalents at beginning of year
|
665
|
458
|
|||||
Cash
and cash equivalents at end of year
|
$
|
1,964
|
$
|
665
|
For
the year
|
For
the year
|
||||||
ended
|
ended
|
||||||
June
30,
|
June
30,
|
||||||
2008
|
2007
|
||||||
Supplemental
disclosures of cash flow information
|
|||||||
Cash
paid during the year for :
|
|||||||
Interest
|
$
|
438
|
$
|
149
|
|||
Income
taxes
|
$
|
873
|
$
|
1,300
|
|||
Non-cash
investing and financing transactions during the year for :
|
|||||||
Settlement
of note receivable by offsetting against amounts due to
Parent
|
$
|
-
|
$
|
950
|
|||
Shares
issued for accrued litigation costs
|
$
|
825
|
$
|
-
|
|||
Value
of shares returned in revised litigation settlement
|
$
|
275
|
$
|
-
|
|||
|
|||||||
Value
of warrants issued in revised litigation settlement
|
$
|
152
|
$ |
-
|
|||
|
|
|
|||||
Earn-out
payments to third parties related to EXP paid by Parent
|
$
|
-
|
$
|
2,200
|
|||
Shares
issued for conversion of long-term debt
|
$
|
-
|
$
|
144
|
|||
Value
of warrants issued related to debt issuance
|
$
|
910
|
$ |
-
|
|||
Shares
exchanged for parent company common stock:
|
|||||||
Value
of parent company shares received
|
$
|
794
|
$
|
-
|
|||
Deemed
dividend to parent company
|
1,018
|
-
|
|||||
Value
of Company shares exchanged
|
$
|
1,812
|
$
|
-
|
|||
Shares
of parent company common stock received in exchange for legal
obligation
|
$
|
484
|
$
|
-
|
|||
Shares
of parent company common stock received in exchange for receivable
from
parent company
|
$
|
2,372
|
$
|
-
|
|||
Divestiture
of Dealer Software and Services Limited (see Notes 2 and
11):
|
|
|
|||||
Accounts
receivable
|
$
|
-
|
$
|
933
|
Goodwill
|
-
|
700
|
|||||
Accounts
payable
|
-
|
(68
|
)
|
||||
Deferred
revenue
|
-
|
(322
|
)
|
||||
Loss
on sale
|
-
|
(378
|
)
|
||||
Note
receivable
|
$
|
-
|
$
|
865
|
|||
Divestiture
of MMI (see Note s 2 and11):
|
|||||||
Cash
|
$
|
157
|
|||||
Accounts
receivable
|
439
|
||||||
Inventory
|
6
|
||||||
Other
|
27
|
||||||
Current
Assets
|
629
|
||||||
Property
and equipment
|
156
|
||||||
Other
long term assets
|
219
|
||||||
Goodwill
|
723
|
||||||
Intangible
assets
|
2,242
|
||||||
Total
Assets
|
3,969
|
||||||
Liabilities
assumed
|
(1,739
|
)
|
|||||
Net
assets divested
|
2,230
|
||||||
Proceeds
received
|
0
|
||||||
Loss
on disposal
|
$
|
2,230
|
|||||
Divestiture
of EXP (see Notes 2 and 11):
|
|||||||
Accounts
receivable
|
$
|
1,050
|
|||||
Investments
in available for sale securities
|
369
|
||||||
Current
Assets
|
1,419
|
||||||
Goodwill
|
1,640
|
||||||
Total
Assets
|
3,059
|
||||||
Liabilities
assumed
|
(1,405
|
)
|
|||||
Net
assets divested
|
1,654
|
||||||
Proceeds
received:
|
|||||||
Investments
in available for sale securities
|
2,334
|
||||||
Receivable
from buyer
|
1,707
|
||||||
Gain
on disposal
|
$
|
2,387
|
|||||
Divestiture
of note receivable of $865,000 for an investment in available for
sale
securities of $682,000 as part of the divestitures of EXP and MMI
(see
Note 3).
|
Cash
|
$
|
64,000
|
||
Other
current assets
|
773,000
|
|||
Property
and equipment
|
177,000
|
|||
Goodwill
|
635,000
|
|||
Amortizable
intangibles
|
2,784,000
|
|||
Current
liabilities
|
(708,000
|
)
|
||
Other
long-term liabilities
|
(807,000
|
)
|
||
Net
assets recorded to stockholders’ equity
|
$
|
2,918,000
|
||
|
||||
The
net assets of DSS at July 1, 2005 consisted of the
following:
|
||||
|
||||
Investment
in non-marketable securities
|
$
|
688,000
|
||
Net
assets recorded to stockholders’ equity
|
$
|
688,000
|
Balance,
July 1, 2006
|
$
|
22,700,000
|
||
Earn
out payback to third parties related to EXP.
|
2,200,000
|
|||
Effect
of exchange rate changes
|
1,293,000
|
|||
Impairment
charges
|
(3,100,000
|
)
|
||
Elimination
of goodwill related to divesting of EXP
|
(700,000
|
)
|
||
Reclassification
of goodwill relating to discontinued operations
|
(2,363,000
|
)
|
||
Balance
June 30, 2007
|
|
20,030,000
|
||
Effect
of exchange rate changes
|
18,000
|
|||
Impairment
charges
|
(8,170,000
|
)
|
||
Balance
June 30, 2008
|
$
|
11,878,000
|
1)
|
When
customer acceptance can be estimated, expenditures are capitalized
as work
in process and deferred until completion of the contract at which
time the
costs and revenues are recognized.
|
2)
|
When
customer acceptance cannot be estimated based on historical evidence,
costs are expensed as incurred and revenue is recognized at the completion
of the contract when customer acceptance is
obtained.
|
2008
|
2007
|
||||||
Numerator
for basic and diluted loss per share:
|
|||||||
Net
loss
|
$
|
(11,819,000
|
)
|
$
|
(3,488,000
|
)
|
|
Deemed
distribution to parent company
|
(1,018,000
|
)
|
-
|
||||
Net
loss available to common shareholders
|
$
|
(12,837,000
|
)
|
$
|
(3,488,000
|
)
|
|
Denominator
for basic and diluted Loss per common share:
|
|||||||
Weighted
average number of shares of common stock outstanding
|
87,057,391
|
79,828,912
|
|||||
$
|
(0.15
|
)
|
$
|
(0.04
|
)
|
June 30, 2008
|
June 30, 2007
|
||||||
Leasehold
improvements
|
$
|
574,000
|
$
|
160,000
|
|||
Computer
and office equipment
|
163,000
|
68,000
|
|||||
Equipment
under capital leases
|
10,000
|
10,000
|
|||||
Furniture
and equipment
|
357,000
|
418,000
|
|||||
|
1,104,000
|
656,000
|
|||||
Less
: Accumulated depreciation
|
512,000
|
(447,000
|
)
|
||||
|
$
|
592,000
|
$
|
209,000
|
June
30, 2008
|
June
30, 2007
|
||||||
Assets
not subject to amortization:
|
|||||||
Goodwill
|
$
|
11,878,000
|
$
|
20,030,000
|
|||
Assets
subject to amortization:
|
|||||||
Completed
software technology (9-10 years useful life)
|
$
|
3,389,000
|
$
|
3,389,000
|
|||
Customer
contracts / relationships (10 years useful life)
|
3,909,000
|
3,909,000
|
|||||
Automotive
data services (20 years useful life)
|
391,000
|
391,000
|
|||||
|
7,689,000
|
7,689,000
|
|||||
Less
: Accumulated amortization
|
(3,105,000
|
)
|
(2,424,000
|
)
|
|||
Amortizable
intangible assets, net
|
$
|
4,584,000
|
$
|
5,265,000
|
|||
|
|||||||
Software
development costs
|
$
|
3,263,000
|
$
|
2,458,000
|
|||
Less
: Accumulated amortization
|
(1,545,000
|
)
|
(1,157,000
|
)
|
|||
Software
development costs, net
|
$
|
1,718,000
|
$
|
1,301,000
|
Years
Ending June 30,
|
|
|||
2009
|
$
|
1,130,000
|
||
2010
|
1,130,000
|
|||
2011
|
760,000
|
|||
2012
|
760,000
|
|||
2013
|
760,000
|
|||
Thereafter
|
1,762,000
|
|||
Total
|
$
|
6,302,000
|
|
June 30, 2008
|
June 30,
2007
|
|||||
ComVest
term loan, net of debt discount of $756,000
|
$
|
4,244,000
|
$
|
-
|
|||
ComVest
revolver
|
500,000
|
-
|
|||||
McKenna
note
|
497,000
|
825,000
|
|||||
Homann
note
|
125,000
|
125,000
|
|||||
Other
notes
|
15,000
|
749,000
|
|||||
|
5,381,000
|
1,699,000
|
|||||
Less
current portion
|
(598,000
|
)
|
(1,020,000
|
)
|
|||
Long
term portion
|
$
|
4,783,000
|
$
|
679,000
|
Years
Ending June 30,
|
||||
$
|
598,000
|
|||
2010
|
1,287,000
|
|||
2011
|
4,252,000
|
|||
Total
|
$
|
6,137,000
|
|
US
Federal
|
|
US
State
|
|
UK
Corporate
|
|
Total
|
|
|||||
2008
|
|||||||||||||
Current
|
$
|
-
|
$
|
-
|
$
|
873,000
|
$
|
873,000
|
|||||
Deferred
|
-
|
-
|
-
|
-
|
|||||||||
Total
|
$
|
-
|
$
|
-
|
$
|
873,000
|
$
|
873,000
|
|||||
2007
|
|||||||||||||
Current
|
$
|
50,000
|
$
|
63,000
|
$
|
669,000
|
$
|
782,000
|
|||||
Deferred
|
-
|
-
|
-
|
-
|
|||||||||
Total
|
$
|
50,000
|
$
|
63,000
|
$
|
669,000
|
$
|
782,000
|
June
30, 2008
|
June
30, 2007
|
||||||
Deferred
tax assets:
|
|||||||
Net
operating loss carry-forwards
|
$
|
2,200,000
|
$ |
6,730,000
|
|||
Deferred
revenue
|
392,000
|
731,000
|
|||||
Reserves
and accruals
|
580,000
|
410,000
|
|||||
Total
deferred tax assets
|
3,172,000
|
7,871,000
|
|||||
Deferred
tax liabilities:
|
|||||||
Other
acquired amortizable intangibles
|
(1,558,000
|
)
|
(2,573,000
|
)
|
|||
Software
development costs
|
(584,000
|
)
|
(455,000
|
)
|
|||
Depreciation
and amortization
|
(100,000
|
)
|
(319,000
|
)
|
|||
State
taxes
|
(56,000
|
)
|
(271,000
|
)
|
|||
Total
deferred tax liabilities
|
(2,298,000
|
)
|
(3,618,000
|
)
|
|||
Valuation
allowance
|
(1,754,000
|
)
|
(5,133,000
|
)
|
|||
Net
deferred tax liabilities
|
$
|
(880,000
|
)
|
$ |
(880,000
|
)
|
|
June
30,
|
||||||
|
2008
|
2007
|
|||||
Taxes
at statutory rates applied to loss from continuing operations before
taxes
|
$
|
(3,717,000
|
)
|
$
|
(1,092,000
|
)
|
|
State
taxes, net of federal effect
|
(180,000
|
)
|
(193,000
|
)
|
|||
Non-deductible
goodwill impairment
|
3,268,000
|
1,240,000
|
|||||
Other
non-deductible expenses
|
2,000
|
40,000
|
|||||
Differential
in UK corporate tax rate
|
(100,000
|
)
|
(209,000
|
)
|
|||
Income
generated in tax-free location
|
(446,000
|
)
|
(294,000
|
)
|
|||
Change
in valuation allowance
|
2,046,000
|
1,290,000
|
|||||
Total
adjustments
|
4,590,000
|
1,874,000
|
|||||
Provision
for income taxes
|
$
|
873,000
|
782,000
|
(1)
|
On
August 1, 2007 the Company and Mr. McKenna entered into an agreement
resolving all outstanding actions by Mr. McKenna against the Company
and
its subsidiaries related to the initial action against CarParts
Technologies, Inc., which is now known as ASNA. The agreement provided
that the Company would pay Mr. McKenna $2,000,000 in cash, $825,000
on a
promissory note with an interest rate of 8% amortized in equal payments
over a 24-month period (see Note 7) and in addition would issue Mr.
McKenna 1,718,750 shares of Common Stock of the Company, which represented
an aggregate number of shares of common stock of the Company that
the
parties determined fairly represented $825,000 (assuming a price
of $0.48
per share of common stock, the closing price of the Company’s common stock
on the date of settlement). Mr. McKenna was also entitled to warrants
to
purchase an equivalent number of shares of common stock at the same
price,
which was valued at $412,000 (using the Black-Scholes valuation model)
and
recorded as an additional litigation cost for the year ended June
30,
2007. Upon entering this agreement all parties agreed to withdraw
all
existing litigation and claims. The Company recorded the settlement
with
McKenna as of June 30, 2007. The shares were issued in fiscal 2008
(see
Note 10). This settlement was amended during fiscal 2008 (see Note
10).
|
(2)
|
Homann
Tire LTD (“Homann”) filed a complaint against the Company’s subsidiary
ASNA (f/k/a CarParts Technologies, Inc.) in California District Court
on
August 11, 2005 regarding the Company’s obligations pursuant to a software
license agreement that it entered into with Homann on October 18,
2002.
|
(3)
|
The
Company was sued by a former officer of W3 Group, Inc. for $37,000
for an
unpaid note and expenses. The Company settled the litigation by paying
$17,500 in fiscal 2008, which was recorded as part of reduction in
litigation settlement in the accompanying consolidated statement
of
operations.
|
Years
Ending June 30,
|
||||
2009
|
$
|
641,000
|
||
2010
|
523,000
|
|||
2011
|
497,000
|
|||
2012
|
410,000
|
|||
2013
|
397,000
|
|||
Thereafter
|
4,462,000
|
|||
$
|
6,930,000
|
Issuance
of warrants in connection with the ComVest Loan Agreement (see Note
7):
|
||||
ComVest
|
5,083,333
|
|||
Other
|
250,000
|
|||
|
5,333,333
|
|||
Issuance
of warrants to a service provider (valued at $27,000)
|
155,549
|
|||
Issuance of
warrants in McKenna settlement (see Note 9 and above)
|
3,437,500
|
|||
Issuance of
warrants to investors in private placement (see above)
|
5,208,337
|
|||
Issuance
of warrants to placement agent in private placement
|
260,417
|
|||
Issuance
of warrants to Lewis Global Funds (see Note 3)
|
6,402,999
|
|||
Total
issued
|
20,798,135
|
Cash
and cash equivalents
|
$
|
82
|
||
Accounts
receivable
|
914
|
|||
Note
receivable
|
865
|
|||
Investment
in available-for-sale securities
|
360
|
|||
Inventories
|
20
|
|||
Other
|
346
|
|||
Current
assets of discontinued operations
|
$
|
2,587
|
||
|
||||
Property
and equipment
|
$
|
150
|
||
Goodwill
|
2,363
|
|||
Amortizable
intangible assets, net
|
2,229
|
|||
Non-current
assets of discontinued operations
|
$
|
4,742
|
||
|
||||
Accounts
payable
|
$
|
492
|
||
Accrued
expenses
|
239
|
|||
Payroll
and other taxes
|
179
|
|||
Current
portion of deferred revenue
|
754
|
|||
Taxes
payable
|
373
|
|||
Other
current liabilities
|
7
|
|||
Current
liabilities of discontinued operations
|
$
|
2,044
|
Cash
|
$
|
157
|
||
Accounts
receivable
|
439
|
|||
Inventories
|
6
|
|||
Other
|
27
|
|||
Current
Assets
|
629
|
|||
Property
and equipment
|
156
|
|||
Other
long term assets
|
219
|
|||
Goodwill
|
723
|
|||
Amortizable
intangible assets, net
|
2,242
|
|||
Total
Assets
|
3,969
|
|||
Liabilities
assumed
|
(1,739
|
)
|
||
Net
assets divested
|
2,230
|
|||
Proceeds
|
0
|
|||
Loss
on disposal
|
$
|
(2,230
|
)
|
Accounts
receivable
|
$
|
1,050
|
||
Investments
in available-for-sale securities
|
369
|
|||
Current
Assets
|
1,419
|
|||
Goodwill
|
1,640
|
|||
Total
Assets
|
3,059
|
|||
Liabilities
assumed
|
(1,405
|
)
|
||
Net
assets divested
|
1,654
|
|||
Proceeds
- value of shares and receivable (see Note 3)
|
4,041
|
|||
Gain
on disposal
|
$
|
2,387
|
Accounts
receivable sold
|
$
|
933
|
||
Goodwill
written off
|
700
|
|||
Accounts
payable assumed
|
(68
|
)
|
||
Deferred
revenue assumed
|
(322
|
)
|
||
Net
assets sold
|
1,243
|
|||
Consideration
received
|
865
|
|||
Loss
on sale of discontinued operations
|
$
|
378
|
|
For
the
Period
July
1,
2007
until
the
Date
of sale
|
For
the
Year
Ended
June
30,
2007
|
|||||
Revenue
|
$
|
1,670
|
$
|
6,561
|
|||
Cost
of sales and operating expenses
|
1,657
|
5,949
|
|||||
Income
from operations
|
13
|
612
|
|||||
Other
expense
|
-
|
(13
|
)
|
||||
Income
taxes
|
-
|
258
|
|||||
Net
income, net of taxes
|
$
|
13
|
$
|
341
|
Revenues
|
$
|
611
|
||
Cost
of sales
|
68
|
|||
Income
from operations
|
543
|
|||
Income
taxes
|
-
|
|||
Income
from discontinued operations, net of tax
|
$
|
543
|
Exhibit
No.
|
Description
of Exhibit
|
|
3(i)
|
Certificate
of Incorporation of Aftersoft Group, Inc., as amended (incorporated by
reference to Exhibit 3(i) to the Company’s Registration Statement on Form
S-1/A filed on July 15, 2008).
|
|
3(ii)
|
By
laws (incorporated by reference to Exhibit 3(ii) to the Company’s Form
10-KSB filed on November 17, 2006).
|
|
4.1
|
Form
of Certificate of Common Stock (incorporated by reference to Exhibit
4.1
to the Company’s Registration Statement on Form SB-2 filed on February 16,
2007).
|
|
5.1
|
Opinion
of Gersten Savage LLP regarding the legality of the securities being
registered (filed herewith).
|
|
10.1
|
Share
Sale Agreement relating to EXP Dealer Software Limited dated August
4,
2006 among Auto Data Network, Inc., Aftersoft Group, Inc. and Aftersoft
Dealer Software Limited (incorporated by reference to Exhibit 10.1
to the
Company’s Current Report on Form 8-K filed on August 31,
2006).
|
|
10.2
|
Share
Sale Agreement relating to Dealer Software and Services Limited dated
February 1, 2007 between Aftersoft Group, Inc. and Auto Data Network,
Inc.
(incorporated by reference to Exhibit 10.1 to the Company’s Current Report
on Form 8-K filed on February 7, 2007).
|
|
10.3
|
Form
of Securities Purchase Agreement (incorporated by reference to Exhibit
10.1 to Aftersoft Group, Inc.’s Current Report on Form 8-K filed July 6,
2007).
|
|
10.4
|
Form
of Common Stock Purchase Warrant (incorporated by reference to Exhibit
10.2 to Aftersoft Group, Inc.’s Current Report on Form 8-K filed July 6,
2007).
|
|
10.5
|
Form
of Registration Rights Agreement (incorporated by reference to Exhibit
10.3 to Aftersoft Group, Inc.’s Current Report on Form 8-K filed July 6,
2007).
|
|
10.6
|
Settlement
and Release Agreement between AFS and McKenna (incorporated by reference
to Exhibit 99.1 to Aftersoft Group, Inc.’s Current Report on Form 8-K
filed August 6, 2007).
|
|
10.7
|
Revolving
Credit and Term Loan Agreement dated as of December 21, 2007, by
and
between ComVest Capital LLC, as Lender, and Aftersoft Group, Inc.,
as
Borrower (incorporated by reference to Aftersoft Group, Inc.’s Current
Report on Form 8-K filed December 31, 2007).
|
|
10.8
|
Revolving
Credit Note, dated December 21, 2007 in the principal amount of $1,000,000
(incorporated by reference to Aftersoft Group, Inc.’s Current Report on
Form 8-K filed December 31,
2007).
|
Exhibit
No.
|
Description
of Exhibit
|
|
10.9
|
Convertible
Term Note, dated December 21, 2007 in the principal amount of $5,000,000
(incorporated by reference to Aftersoft Group, Inc.’s Current Report on
Form 8-K filed December 31, 2007).
|
|
10.10
|
Collateral
Agreement dated as of December 21, 2007 by and among Aftersoft Group,
Inc., Aftersoft Network, N.A. Inc., MAM Software Ltd., Aftersoft
Group
(UK) Ltd., AFS Warehouse Distribution Management, Inc., AFS Tire
Management, Inc. and AFS Autoservice Inc., and ComVest Capital LLC
(incorporated by reference to Aftersoft Group, Inc.’s Current Report on
Form 8-K filed December 31, 2007).
|
|
10.11
|
Guaranty
Agreement dated December 21, 2007 by Aftersoft Network, N.A. Inc.,
MAM
Software Ltd., Aftersoft Group (UK) Ltd., AFS Warehouse Distribution
Management, Inc., AFS Tire Management, Inc. and AFS Autoservice Inc.,
in
favor of ComVest Capital LLC (incorporated by reference to Aftersoft
Group, Inc.’s Current Report on Form 8-K filed December 31,
2007).
|
|
10.12
|
Form
of Validity Guaranty (incorporated by reference to Aftersoft Group,
Inc.’s
Current Report on Form 8-K filed December 31, 2007).
|
|
10.13
|
Warrant,
dated as of December 21, 2007, to Purchase 1,000,000 Shares of Common
Stock of Aftersoft Group, Inc. (incorporated by reference to Aftersoft
Group, Inc.’s Current Report on Form 8-K filed December 31,
2007).
|
|
10.14
|
Warrant,
dated as of December 21, 2007, to Purchase 2,000,000 Shares of Common
Stock of Aftersoft Group, Inc. (incorporated by reference to Aftersoft
Group, Inc.’s Current Report on Form 8-K filed December 31,
2007).
|
|
10.15
|
Warrant,
dated as of December 21, 2007, to Purchase 2,083,333 Shares of Common
Stock of Aftersoft Group, Inc. (incorporated by reference to Aftersoft
Group, Inc.’s Current Report on Form 8-K filed December 31,
2007).
|
|
10.16
|
Registration
Rights Agreement dated as of December 21, 2007 by Aftersoft Group,
Inc.
for the benefit of the holders (incorporated by reference to Aftersoft
Group, Inc.’s Current Report on Form 8-K filed December 31,
2007).
|
|
10.17
|
Share
Sale Agreement, dated November 12, 2007, between EU Web Services,
Ltd., as
Purchaser, Aftersoft Group, Inc., as Vendor, and EXP Dealer Software
Ltd.
(incorporated by reference to Aftersoft Group, Inc.’s Current Report on
Form 8-K filed November 16, 2007)
|
|
14
|
Code
of Ethics (incorporated by reference to Exhibit 14 to the Company’s Annual
report on Form 10-K/A for the fiscal year ended June 30, 2007 filed
October 15, 2007.)
|
|
21
|
List
of subsidiaries (incorporated by reference to Exhibit 21 to the Company’s
Registration Statement on Form S-1/A filed on July 15,
2008).
|
Exhibit
No.
|
Description
of Exhibit
|
|
31.1
|
Certification
of Principal Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002. (filed herewith).
|
|
31.2
|
Certification
of Principal Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
32.1
|
Certification
of Principal Executive Officer pursuant to 18 U.S.C. Section 1350,
as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(filed
herewith).
|
|
32.2
|
Certification
of Principal Financial Officer pursuant to 18 U.S.C. Section 1350,
as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(filed
herewith).
|