4NET SOFTWARE INC

CIK:0000812149|SEC Filings

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($)	3 Months Ended		9 Months Ended
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($)	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Net Sales	$ 11,489,491	$ 10,317,136	$ 30,530,819	$ 30,400,766
Cost of sales	8,514,012	7,700,107	22,094,746	22,170,043
Gross profit	2,975,479	2,617,029	8,436,073	8,230,723
Operating expenses:
Selling	1,257,061	1,082,977	3,582,303	3,347,164
General and administrative	1,166,319	1,032,462	3,478,487	3,023,524
Amortization of intangible assets	300,000	331,344	900,000	943,079
Total operating expenses	2,723,380	2,446,783	7,960,790	7,313,767
Operating income	252,099	170,246	475,283	916,956
Other income (expense):
Other income	48,182	32,064	231,014	151,643
Interest expense	(88,958)	(78,530)	(219,965)	(193,227)
Interest income	6,345	6,345	19,035	18,831
Other income (expense)	(34,431)	(40,121)	30,084	(22,753)
Income before income taxes	217,668	130,125	505,367	894,203
Income tax expense	49,820	19,235	119,574	193,147
Net income	167,848	110,890	385,793	701,056
Less income allocated to noncontrolling interest	7,369	3,586	15,319	31,835
Income attributable to common stockholders	160,479	107,304	370,474	669,221
Distributions to certain noncontrolling interests		(16,729)		(63,664)
Income available to common stockholders	$ 160,479.00	$ 90,575.00	$ 370,474.00	$ 605,557.00
Income per common share- basic and diluted	$ 0.13	$ 0.07	$ 0.29	$ 0.48
Weighted average common shares outstanding - basic and diluted (in shares)	1,274,603	1,274,603	1,274,603	1,274,603

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities:
Net income	$ 385,793	$ 701,056
Adjustments to reconcile net income to net cash (used) provided by operating activities:
Stock based compensation	40,556	41,798
Depreciation and amortization	194,283	126,728
Amortization of debt issuance costs	18,859	18,859
Amortization of intangibles	900,000	943,079
Deferred income taxes	(32,390)	(54,950)
Unrealized loss (gain) on investments	3,721	(63,064)
Gain on sale of equipment	(4,006)
Change in inventory obsolescence reserve	41,500	6,500
Changes in operating assets and liabilities:
Accounts receivable	(2,002,482)	(1,402,277)
Inventories	(553,008)	(331,946)
Costs and estimated earnings in excess of billings on uncompleted contracts	(1,337,128)	(1,398,039)
Prepaid expenses and other assets	11,352	(262,685)
Accounts payable	1,172,096	728,626
Accrued expenses and other current liabilities	(266,664)	(193,706)
Billings in excess of costs and estimated earnings on uncompleted contracts	419,756	1,161,629
Net cash (used) provided by operating activities	(1,007,762)	21,608
Cash flows from investment activities:
Purchase of equipment	(339,571)	(387,519)
Business acquisitions		(203,216)
Equipment sales proceeds	5,700	25,000
Sale (purchase) of short- term investments	142,393	(234,302)
Net cash used by investment activities	(191,478)	(800,037)
Cash flows from financing activities:
Distribution to noncontrolling interest	(17,910)	(55,861)
Borrowings from line of credit, net	1,741,043	1,033,880
Payments under subordinated term note	(187,500)
Net cash provided by financing activities	1,535,633	978,019
Net increase in cash and cash equivalents	336,393	199,590
Cash and cash equivalents at beginning of period	5,207,517	4,353,567
Cash and cash equivalents at end of period	5,543,910	4,553,157
Cash paid for:
Income taxes	185,000	91,000
Interest	$ 212,000	179,000
Noncash transactions:
Accrued distribution to noncontrolling interest		$ 22,000

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Current Assets:
Cash and cash equivalents	$ 5,543,910	$ 5,207,517
Short-term investments	2,048,103	2,194,216
Accounts receivable, net of allowance for doubtful accounts	9,776,046	7,773,564
Inventories, net	1,675,374	1,163,866
Costs and estimated earnings in excess of billings on uncompleted contracts	2,666,768	1,329,640
Prepaid expenses and other current assets	410,601	478,859
Total current assets	22,120,802	18,147,662
Equipment, net	1,171,406	1,027,812
Right-of-use assets-leases	1,218,163	0
Intangible assets, net	2,500,000	3,400,000
Goodwill	3,045,481	3,045,481
Deferred income taxes	381,729	349,339
Other assets	354,079	297,174
Total assets	30,791,660	26,267,468
Current Liabilities:
Accounts payable	2,667,645	1,495,549
Accrued expenses and other current liabilities	528,500	806,281
Line of credit	4,432,419	2,691,376
Current portion of lease liability	429,829	0
Current portion of senior subordinated note	28,680	28,680
Current portion of subordinated term note	250,000	250,000
Billings in excess of costs and estimated earnings on uncompleted contracts	934,998	515,242
Total current liabilities	9,272,071	5,787,128
Lease liability	788,334	0
Senior subordinated note, net	239,388	220,529
Subordinated term note	2,000,000	2,187,500
Total liabilities	12,299,793	8,195,157
Stockholders' equity:
Preferred stock, issued and outstanding-none	0	0
Common stock, issued and outstanding-1,274,603 shares	13	13
Additional paid-in capital	20,469,489	20,428,933
Accumulated deficit	(1,812,802)	(2,183,276)
Total Regional Brands, Inc. stockholders' equity	18,656,700	18,245,670
Noncontrolling interest in consolidated subsidiary	(164,833)	(173,359)
Total stockholders' equity	18,491,867	18,072,311
Total liabilities and stockholders' equity	$ 30,791,660	$ 26,267,468