Balance Sheet Information. (a) Sellers have delivered to Purchaser a copy of the audited balance sheet of Sellers (the "Audited Balance Sheet") as of December 31, 1997 (the "Audited Balance Sheet Date"), together with the notes thereto, accompanied by the reports thereon of Deloitte & Touche LLP, independent public accountants. The Audited Balance Sheet, together with the notes thereto, was prepared in accordance with GAAP applied on a consistent basis throughout the year covered thereby (except to the extent disclosed therein or required by changes in GAAP), and presents accurately (x) the information purported to be presented therein and (y) the financial position of Sellers as of the Audited Balance Sheet Date and for the year then ended. Reserves are reflected on the Audited Balance Sheet against assets in amounts that have been established on a basis consistent with past practice and in accordance with GAAP. There have been no changes in reserves of the Sellers since the Audited Balance Sheet Date other than changes in such reserves consistent with past practice in such amounts as would not in the aggregate have a Material Adverse Effect.
Balance Sheet Information. Property, Plant, and Equipment Balances of major classes of assets and accumulated depreciation and amortization consist of the following: Predecessor Successor 2006 (as restated) 2007 Land and building $ 8,709,224 $ 13,360,000 Furniture and fixtures 434,809 287,410 Machinery and equipment 3,692,167 3,746,557 Computer equipment and software 2,294,089 2,261,116 Leasehold improvements 127,401 138,700 Total 15,257,690 19,793,783 Less: accumulated depreciation and amortization 1,658,484 985,649 Property, plant, and equipment, net $ 13,599,206 $ 18,808,134 Depreciation and amortization expense was $678,447, $300,778 and $986,651 for the year ended December 31, 2006, the period from January 1, 2007 to April 11, 2007 and the period from January 29, 2007 to December 31, 2007, respectively. Performance Share Plan At the time of the Cambium acquisition, the Company agreed to pay for a long-term incentive plan for Sopris West employees. The Company recorded a liability at fair value on the date of acquisition due to the commitment being fixed. The Company paid $220,865 in 2006 and the aggregate amount accrued as of April 11, 2007 and paid on June 30, 2007 under this plan was $7,558,990. No further amounts are due at December 31, 2007. Cambium Learning, Inc. (Predecessor) and VSS-Cambium Holdings, LLC (Successor) Notes to Consolidated Financial Statements (continued)
Balance Sheet Information. (IN THOUSANDS) ----------------------- 1993 1992 ----------------------- INVENTORIES Finished goods and parts................................ $ 32,410 $ 35,064 Work in process......................................... 23,683 22,873 Raw materials and purchased parts....................... 35,801 33,106 ---------- ---------- PROPERTY, PLANT AND EQUIPMENT $ 91,894 $ 91,043 ========== ========== Land.................................................... $ 7,926 $ 7,799 Buildings............................................... 95,393 89,211 Machinery and equipment................................. 281,116 269,189 ---------- ---------- 384,435 366,199 Less accumulated depreciation........................... (199,626) (180,202) ---------- ---------- OTHER ASSETS Intangibles, at cost: $ 184,809 $ 185,997 ========== ========== Patents................................................ $ 28,083 $ 27,993 Excess of cost over net assets acquired................ 15,976 18,767 Other acquired intangibles............................. 40,284 39,127 Less accumulated amortization.......................... (46,358) (38,980) ---------- ---------- 37,985 46,907 Investments............................................. 23,755 19,919 Other................................................... 14,047 22,441 ---------- ---------- $ 75,787 $ 89,267 ========== ========== Patents are being amortized on a straight-line basis over 7 to 14 years. The ex- cess of cost over net assets acquired is being amortized on a straight-line ba- sis over 20 to 30 years. Other acquired intangibles are being amortized on a straight-line basis over 2 to 30 years. ACCRUED LIABILITIES Accrued employee compensation and benefits.............. $ 19,109 $ 19,657 Resizing and restructuring.............................. 24,471 -- Accrued interest........................................ 4,928 5,744 Other................................................... 39,343 28,579 ---------- ----------
Balance Sheet Information. (a) Attached hereto as Schedule 4.7(a) (i) is a copy of the unaudited balance sheet of ADMI with respect to the Telecom Business (the "Telecom Balance Sheet") as of July 31, 1999 (the "Balance Sheet Date"). Attached hereto as Schedule 4.7(a)(ii) is a copy of the unaudited balance sheet of ADMI relating to the Slingshot Assets (the "Slingshot Balance Sheet" and, together with the Telecom Balance Sheet, the "Balance Sheet") as of the Balance Sheet Date. The Balance Sheets were prepared in accordance with GAAP applied on a consistent basis (except to the extent disclosed therein or required by changes in GAAP), and fairly present (x) the information presented therein to the extent such information relates to or is derived from periods after March 16, 1999 (or July 12, 1999, with respect to information concerning PSI), (y) to the knowledge of ADMI, the information presented therein that relates to or is derived from periods prior to March 16, 1999 (or July 12, 1999, with respect to information concerning PSI) and (z) the financial position of the Telecom Business and the Digital Media Business, as the case may be, as of July 31, 1999 and for the period then ended. The reserves that are reflected on the Balance Sheets and that were established since March 16, 1999 (and, to the knowledge of ADMI, the reserves that are reflected on the Telecom Balance Sheet that were established prior to March 16, 1999 (or July 12, 1999, with respect to information concerning PSI)) against assets are in amounts that have been established on a basis consistent with past practice and in accordance with GAAP. There have been no changes in reserves of ADMI relating to the Telecom Business or the Digital Media Business since the Balance Sheet Date other than changes in such reserves consistent with past practice in such amounts as would not in the aggregate reasonably be expected to have a Material Adverse Effect.
