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Consolidated Statements of Cash Flows

For the Years Ended December 31, 1994, 1995 and 1996

  1994 1995 1996

Cash flows from operating activities:
Net income $1,538,813 $2,027,266 $04,004,272
Adjustments to reconcile net income to net cash provided by operating activities Depreciation
and amortization
150,067 286,705 618,290
Deferred income taxes - - 436,714
Accretion of discount on marketable securities (24,935) (60,377) (193,152)
Changes in assets and liabilities-
Accounts receivable
(455,965) (3,010,742) (2,217,514)
Deferred commissions (158,244) (396,752) (449,301)
Prepaid expenses and other current assets 5,113 (15,582) (153,064)
Accounts payable 28,748 335,950 822,787
Customer deposits - 97,329 41,964
Accrued expenses 330,913 1,019,763 1,656,296
Accrued income taxes - - 227,037
Deferred revenue 2,268,001 4,261,527 6,457,279

 
Net cash provided by operating activities 3,682,511 4,545,087 11,251,608

 
Cash flows from investing activities:
Purchases of property and equipment, net (304,736) (751,850) (2,033,157)
Purchase of marketable securities (1,960,420) (9,171,880) (8,469,888)
Proceeds from sales and maturities of
marketable securities
- 4,718,827 4,962,208

 
Net cash used in investing activities (2,265,156) (5,204,903) (5,540,837)

Cash flows from financing activities:
Distributions to stockholder (1,750,000) (1,121,342) (5,560,197)
Net proceeds of stock offering - - 33,234,053

 
Net cash (used in) provided by
financing activities
(1,750,000) (1,121,342) 27,673,856

 
Net (decrease) increase in cash
and cash equivalents
(332,645) (1,781,158) 33,384,627
Cash and cash equivalents, beginning of year 3,111,370 2,778,725 997,567

 
Cash and cash equivalents, end of year $2,778,725 $0,997,567 $34,382,194

 
Supplemental disclosure of cash flow information:
Cash paid for income taxes $0,018,961 $0,044,893 $00,087,053

 
Supplemental disclosure of
noncash investing and financing activities:
Unrealized gain on available-for-sale securities $ - $0,021,696 $00,036,404

The accompanying notes are an integral part of these consolidated financial statements.