PROSPECTUS SUPPLEMENT NO. 14 | Filed Pursuant to Rule 424(b)(3) | |
To Prospectus dated May 14, 2007 | Registration No. 333-129842 |
Computer Software Innovations, Inc.
14,435,472 SHARES OF COMMON STOCK
This Prospectus Supplement supplements the Prospectus dated May 14, 2007, as amended and supplemented, relating to the offer and sale by the selling stockholder identified in the Prospectus of up to 14,435,472 shares of common stock of Computer Software Innovations, Inc. (the Company).
This Prospectus Supplement includes the Companys Form 8-K filed with the Securities and Exchange Commission on December 5, 2007.
The information contained in the report included in this Prospectus Supplement is dated as of the period of such report. This Prospectus Supplement should be read in conjunction with the Prospectus dated May 14, 2007, as supplemented on May 25, 2007, June 1, 2007, June 27, 2007, August 14, 2007, September 14, 2007, October 3, 2007, October 5, 2007, October 11, 2007, October 24, 2007, November 13, 2007, November 20, 2007, and December 3, 2007, which supplements are to be delivered with this Prospectus Supplement. This Prospectus Supplement is qualified by reference to the Prospectus except to the extent that the information in this Prospectus Supplement updates and supersedes the information contained in the Prospectus dated May 14, 2007, including any supplements or amendments thereto.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this Prospectus Supplement No. 14 is December 5, 2007.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) December 4, 2007
COMPUTER SOFTWARE INNOVATIONS, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware
(State or other jurisdiction of incorporation)
000-51758 | 98-0216911 | |
(Commission File Number) | (IRS Employer Identification No.) |
900 East Main Street, Suite T, Easley, South Carolina | 29640 | |
(Address of principal executive offices) | (Zip Code) |
(864) 855-3900
(Registrants telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01. | Regulation FD Disclosure. |
Computer Software Innovations, Inc. (the Company) is furnishing as Exhibit 99.1 a PowerPoint presentation to be presented in meetings with various interested persons. The presentation contains certain forward-looking financial information concerning the Company.
Item 9.01. | Financial Statements and Exhibits. |
(c) | Exhibits. |
The following exhibit is furnished as part of this report:
Exhibit Number |
Description | |
Exhibit 99.1 | PowerPoint Presentation (December 4, 2007) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
COMPUTER SOFTWARE INNOVATIONS, INC. | ||
By: | /s/ David B. Dechant | |
Name: | David B. Dechant | |
Title: | Chief Financial Officer |
Date: December 5, 2007
EXHIBIT INDEX
Exhibit Number |
Description | |
Exhibit 99.1 | PowerPoint Presentation (December 4, 2007) |
Computer
Software Innovations, Inc. OTC BB: CSWI December 2007 Investor Presentation |
Safe
Harbor This presentation contains forward-looking statements that is, statements related to future, not past, events. In this context, forward looking statements often address our expected future
business and financial performance, and often contain words such as may, could, should, expect, believe, seek, estimate, predict, or project. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties arise from economic health of
the software and technology industry, demand for CSIs products and engineering services, competitive pricing pressures and the availability of necessary financing. In addition, other risks are more fully described
in CSIs 2006 Form 10- KSB and other filings with the Securities and Exchange Commission. These uncertainties may
cause our actual results to be materially different from those expressed in our
forward-looking statements. We do not undertake to update our
forward-looking statements. |
Company
Overview Computer Software Innovations, Inc. (OTCBB:CSWI), CSI: Technology
Outfitters, is a full service software and technology solutions company
working primarily with public sector organizations. The software solutions include financial management, billing and revenue management, school activity accounting, lesson planning and automated workflow. The technology solutions include IP telephony, IP video surveillance, visual communications, interactive classrooms, network security and traffic monitoring,
infrastructure design, wireless solutions, network management, engineering services, disaster recovery and hardware solutions. CSI's client base includes school districts, higher education, municipalities, county governments, and other non-profit organizations. Currently, more than 600
public sector organizations utilize CSI's software systems and network integration services. |
Highlights Horizontal Growth Business Model Easily Scalable and Replicable to Other Regions Projected $51M+ Business which Expanded from 3 State Territory to 8 State Territory following January 2007 Acquisition (est. for year ending 2007). Competitive Proprietary Software Vertical Growth Loyal Customer Base Software Client Retention Rate > 90% Additional Technology Solution Sell-Through Financial Strengths Strong Gross Margins (YTD 07 Software = 43.8% Technology = 16.8%) Recurring Revenues Public Sector Good Collection History & Ongoing Technology Budgets Return to profitability in 2007 primarily as business reaches critical mass with emphasis on higher margin software business. 2007 Projection $4.3M EBITDA* and Net Income over $1.0M * EBITDA is a non-GAAP measure. Net Income is the nearest GAAP measure. See slides subsequent for discussions of EBITDA, which should not be used in lieu of or separate from GAAP measures, and regarding reconciling
EBITDA to GAAP Net Income. |
Company
History Founded in 1989 in Easley, SC Financial Management Software 1989 Released CSI Accounting+Plus (Microsoft Windows platform) - 1999 Released SmartFusion (Microsoft.Net/SQL platform) 2007 Technology Division added in 1999 Computer & Network Hardware 1999 IP Telephony 2001 IP Surveillance 2003 Interactive Whiteboards 2003 Classroom Audio Augmentation 2004 Network Security 2005 Storage and Disaster Recovery 2006 2005 Created Publicly Traded Company: CSWI Acquisition of McAleer Computer Associates Jan, 2007 |
Select
Financials Summary of Capitalization as of 9/30/07 Common Shares Outstanding: 3.8 M F/D Shares Outstanding: 13.3 M Full Potential Diluted: 18.0 M Warrant Conversion Yields: $ 8.7M Current Market Cap: $5.32 Million Management/Board
Ownership 2.17 Million Shares or 61% of Common outstanding; 20% outstanding shares (common & preferred) Key Statistics as of 9/30/07 (except share price data) Fiscal Year Ends December 31 Current Share Price (11/12/07) $1.50 2006 Revenues $28.5M Total Current Assets $9.9M 9 Months 2007 Revenues $44.1M Total Assets $22.6M 52 Week Trading Range (thru 11/12/07): $.75 - $1.70 Total Debt $6.0M (w/sub debt) $3.8M (w/o sub debt) |
Horizontal Growth - Organic & Acquisition Strategy Replicate successful Southeast Regional business model into other regions with CSI sales force or through acquisition Target companies with complimentary products and/or complimentary footprint |
Horizontal Growth Through BEACHHEAD Strategy McAleer Expansion with January, 2007 Acquisition 1. Establish Beachhead With Immediate, Significant Revenue Growth, while Yielding Positive Cash Flow 2. Cross-Sell Acquired Accounts, 5-10%+ Growth Goal 3. Penetrate Market, Securing New Accounts Throughout Expanded Footprint, 30%+ Growth Goal 4. Continue Expanding the Beachhead and Replicate all 3 steps with each Additional Strategic Acquisition |
County
Government 3,100 County Governments Municipal/City Government 36,000 Municipalities/City Governments School Districts 14,000 School Districts Horizontal Growth Opportunity - US Target Markets 1 2 3 1. Per U.S. Dept of Census 2. Per National League of Cities 3. Per National Center for Education Statistics 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 County Governments Municipalities/City Governments School Districts |
Vertical
Growth - The Total Technology Solution Outfitters |
Horizontal Growth - Competitive Proprietary Software Products - Accounting+Plus/Smart Fusion/NextGen - 28 Different Modules - Curriculator Our People - Our Experience: - Financial Management Software Expertise - K12 and Local Government Experience Competitive with Nationally Marketed Products Software Client Retention >90% An outfitters job is to equip the person or organization with the tools to
become successful. Ledger Budget Preparation Audit Reporting Claims Reimburse- ment Purchasing Accounts Payable Inventory Fixed Assets Accounts Receivable Check Reconciliation Payroll Insurance & Benefits Absent Employee Personnel Cost Allocation Hospitality Fees Business License Construction Permits Cash Collections Cash Drawer Interface Utility Billing Property Tax Collection Handheld Interface Utility Billing Work Orders Available Subs Applicant Tracking Warehouse Requisitions Food Service Reporting |
Vertical
Growth - Technology Solutions Interactive Classroom Technologies Interactive Whiteboards Interactive Assessment and Selection Device Classroom Audio Augmentation Consulting Services Project Management Deployment Services Network Services and Converged Technologies Analysis Design Integration Implementation Support Services Hardware Network Convergence Certified Reseller for Cisco, HP and other major vendors |
Company
Awards and Recognitions 2004, 2005, 2006 & 2007 VAR Business 500 2005 Government VAR 100 2004 VAR Business 50 Fastest Growing Technology Companies 2004 VAR Business Technology Innovator Award-Application Development 2003 CRN Top 5 Rising Stars 2002, 2003, 2004 SC Fastest Growing Companies Award 2003 Ingram Micro National Fastest Growing K-12 Sector 2002 Ingram Micro Southeast Region Fastest Growing K-12 Sector
|
Financial Strengths Strong Gross Margins Software = 43.8% Technology = 16.8% Recurring Revenue Approximately 50% of Software Revenues Increased Emphasis on Technology Support Contracts Advantages of Public Sector Focus Good Collection History Little bad debt write-offs Ongoing Technology Budgets |
Financial
Summary Non-GAAP Financial Measure: Explanation and Reconciliation of
EBITDA EBITDA is a non-GAAP financial measure used by management, lenders and certain
investors as a supplemental measure in the evaluation of some aspects of a
corporation's financial position and core operating performance. Investors
sometimes use EBITDA as it allows for some level of comparability of profitability trends between those businesses differing as to capital structure and capital intensity by removing the
impacts of depreciation and amortization. EBITDA does not include changes
in major working capital items such as receivables, inventory and payables,
which can also indicate a significant need for, or source of, cash. Since decisions regarding capital investment and financing and changes in working capital components can have a
significant impact on cash flow, EBITDA is not a good indicator of a
business's cash flows. We use EBITDA for evaluating the relative underlying performance of the Company's core operations and for planning purposes, including a
review of this indicator and discussion of potential targets in the
preparation of annual operating budgets. We calculate EBITDA by adjusting net income or loss to exclude net interest expense, income tax expense or benefit and
depreciation and amortization, thus the term "Earnings Before Interest,
Taxes, Depreciation and Amortization" and the acronym "EBITDA."
EBITDA is presented as additional information because management believes it to be a useful supplemental analytic measure of financial performance of our core business, and as it is frequently
requested by sophisticated investors. However, management recognizes it is
no substitute for GAAP measures and should not be relied upon as an
indicator of financial performance separate from GAAP measures (as discussed further below). When evaluating EBITDA, investors should consider, among other things, increasing and
decreasing trends in the measure and how it compares to levels of debt and
interest expense, ongoing investing activities, other financing activities
and changes in working capital needs. Moreover, this measure should not be construed as an alternative to net income (as an indicator of operating performance) or cash flows (as a measure of liquidity) as determined in accordance with GAAP. While some investors use EBITDA to compare between companies with different investment
and capital structures, all companies do not calculate EBITDA in the same
manner. Accordingly, the EBITDA presented below may not be comparable to
similarly titled measures of other companies. A reconciliation of net income reported under GAAP to EBITDA is provided after the
following two slides. |
Income Statement Data (in thousands) Quarter Ending 09-30-07 Quarter Ending 09-30-06 Quarter Ending 09-30-05 Net sales $15,352 $7,128 $6,951 Gross profit $3,047 $1,671 $1,432 Operating income $1,043 $186 $179 Net income (loss) $691 ($39) $788 EBITDA (a non-GAAP measure see reconciliation which follows the next slide) $1462 $441 $1,543 Reverse Merger, Acquisition & Compliance Related Costs Warrant Accounting - Gain $143 $169 $161 $1,191 Balance Sheet Data (in thousands) Quarter Ending 09-30-07 Quarter Ending 09-30-06 Quarter Ending 09-30-05 Current Assets $9,910 $5,455 $7,305 Total Assets $16,476 $7,834 $8,548 Current Liabilities $11,035 $7,311 $14,848 Total Liabilities $14,517 $7,551 $14,848 Total Interest Bearing Debt $6,010 $3,005 $4,021 Stockholders Equity (Deficit) $1,959 $283 ($6,300) Historical Financials Quarterly |
Income Statement Data (in thousands) Year to Date 09-30-07 Year Ending 12-31-06 Year Ending 12-31-05 Net sales $44,105 $28,554 $24,287 Gross profit $9,603 $6,373 $6,546 Operating income (loss) $3,453 ($243) ($186) Net income (loss) $1,879 ($880) ($756) EBITDA (a non-GAAP measure see reconciliation which follows this slide) $4,626 $475 $76 Reverse Merger, Acquisition & Compliance Related Costs Warrant Accounting - Loss $519 $1,703 $329 $2,371 $414 Balance Sheet Data (in thousands) Year to Date 06-30-07 Year Ending 12-31-06 Year Ending 12-31-05 Current Assets $9,910 $6,497 $6,156 Total Assets $16,476 $9,460 $7,574 Current Liabilities $11,035 $9,359 $8,098 Total Liabilities $14,517 $9,564 $8,098 Total Interest Bearing Debt $6,010 $2,565 $3,951 Stockholders Equity (Deficit) $1,959 ($104) ($525) Historical Financials Annual |
Explanation and Reconciliation of EBITDA Table Amounts in Thousands $ Quarter Ended September 30 Nine Months Ended September 30 2007 2006 2007 2006 Reconciliation of Net income (loss) per GAAP to EBITDA: Net income (loss) per GAAP $ 691 $ (39) $1,879 $ (68) Adjustments: Income tax expense 229 120 1,167 91 Interest expense, net 123 106 407 292 Amortization of loan fees -- -- -- 17 Depreciation and amortization of fixed assets and trademarks 132 82 387 245 Amortization of software development costs 287 171 786 529 EBITDA $ 1,462 $ 441 $ 4,626 $ 1,106 Management forecasted EBITDA for the year is $4.3 million, most comparable GAAP measure
of forecasted net income has been given as over $1.0 million. Larger gap
between the two measures than historical is anticipated due to increased
depreciation and amortization from assets, tangible and intangible, acquired in the McAleer acquisition. |
Senior
Management Team Management Ownership = 59% outstanding common shares; 19%
outstanding shares (common & preferred) Nancy K. Hedrick CEO & President 27 Yrs in IT Field President of CSI since 1989 Thomas P. Clinton Sr. Vice President of Strategic Partnerships 22 Yrs in IT Field (including The Computer Group & IKON) VP at CSI since 1999 David Dechant, CPA Chief Financial Officer 22 Yrs in Finance (including Conso Intl Corp & Warner-Lambert) CFO at CSI since 2005 Beverly N. Hawkins Sr. Vice President of Product Development 21 Yrs in IT Field VP of CSI since 1989 William J. Buchanan Sr. Vice President of Delivery & Support 22 Yrs in IT Field (including The Computer Group & IKON) VP at CSI since 1999 |
Investment Highlights Diverse product offerings targeting schools, governments and small business Representing a more than $9B Market Opportunity in the U.S. * Strong Horizontal Growth Potential Through Beachhead Strategy Business Model Easily Scalable and Replicable to Other Regions 3 State, $28M business, expanded to 8 States, with $51M+ business by YE 2007 Market Competitive Proprietary Software Applications Excellent Vertical Growth Opportunities Loyal Customer Base Software Client Retention Rate Greater than 90% Additional Technology Solution Sell-Through Leveraging Relationships for Cross Selling Financial Strengths Strong Gross Margins (Software = 43.8% Technology = 16.8%) Recurring Revenue Model for Engineering Services and Software Updates Public Sector = Good Collection History & Ongoing Technology Budgets Historically profitable up to Going Public (2005). Projected return to profitability in 2007 as costs related to going public normalize. (07 est. $4.3M EBITDA** and >$1.0M Net Income.) * per IDC, a subsidiary of International Data Group, Inc. (the parent company of IDG
News Service) ** EBITDA is a non-GAAP measure. Net Income is the
nearest GAAP measure. See prior slides for discussions of EBITDA, which should not be used in lieu of or separate from GAAP measures, and regarding reconciling EBITDA
to GAAP Net Income. |
Company Contact David Dechant, CFO ddechant@csioutfitters.com 864.855.3900 Company Website: www.csioutfitters.com Investor Contact Alliance Advisors, LLC Mark McPartland markmcp@allianceadvisors.net 910.221.1827 |