- --------------------------------------------------------------------------- Net cash provided (used) by operating activities (5,373) 413 (356) - --------------------------------------------------------------------------- Cash flows from investing activities: Capital expenditures (13) - - Purchase of assets of Possible Dreams and Columbia National Corporation (net of cash acquired of $764) (16,296) - -
- --------------------------------------------------------------------------- Net cash provided (used) by investing activities (16,309) - - - ---------------------------------------------------------------------------
INVENTORIES Inventories, comprised of finished goods, are valued at the lower of cost or market, with cost being determined by the first-in, first-out method("FIFO").
Mr. Larry M. Karren ("Karren"), the Vice President and Treasurer of Security Capital, the Controller of FIS and the Vice President and Chief Financial Officer of FIM, has entered into an agreement (the "Participation Agreement") with Britt, FIS and FIM whereby Karren will be entitled to receive from FIS, after payment in full of the FIM Fee (as defined in the Buy-Sell Agreement), a bonus payment equal to 10% of the net pre-tax income of FIS until the occurrence of either (i) the exercise by Britt of the Put Option under the Buy-Sell Agreement or (ii) the sale of a majority of the stock or assets of FIS to a party other than Karren, FIS or FIM. In the case of (i), Karren will be entitled to purchase for nominal consideration approximately 10% of the stock of, or an interest in, FIS. In the case of (ii), Karren will be entitled to receive a portion of the net proceeds of any such sale described in (ii) otherwise distributable to Britt.
An affiliate of Security Capital is a party to several legal actions arising in the ordinary course of its business. In management's opinion, the Company has adequate legal defenses to these actions, and they should have no material adverse effect on the operations or financial condition of the Company.
FEDERAL INCOME TAXES Income taxes are the responsibility of each partner.
FIXED ASSETS Property and equipment are carried at cost. Depreciation is computed using the straight line method over the estimated useful lives of the assets. Fixed assets are comprised of the following:
The lease agreement on the Company's office space was for a six year term effective January 1, 1993. The landlord required that certain officers of FIS and BMD execute individual, as well as corporate, guarantees. During the end of fiscal year 1994, the Company leased additional office space adjacent to its current space. The landlord paid for all the costs of leasehold improvements and the Company agreed to extend the term of the original lease by one year. The original lease had a buy-out option at the end of the fifth year, which allowed the Company to terminate the sixth year of the lease if the Company reimbursed the landlord for the unamortized leasehold improvements and the pro rata broker commissions. With the lease of the additional space, the option year was transferred to the seventh year of the lease agreement. The Company leased more adjacent space in January 1995 and November 1995. The landlord paid for substantially all costs of leasehold improvements and there was no extension of the lease required. For the year ended September 30, 1996, rentals were approximately $395,000 for the fiscal year pursuant to these lease agreements. Periodic lease rentals under these agreements through the years ending September 30, 2000 are as follows: