| PROSPECTUS SUPPLEMENT NO. 9 To Prospectus dated May 9, 2008 |
Filed Pursuant to Rule 424(b)(3) Registration No. 333-129842 |
Computer Software Innovations, Inc.
14,435,472 SHARES OF COMMON STOCK
This Prospectus Supplement supplements the Prospectus dated May 9, 2008, 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 Company’s Form 8-K dated September 24, 2008 filed with the Securities and Exchange Commission on September 24, 2008.
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 9, 2008, as supplemented on June 4, 2008, July 2, 2008, July 16, 2008, July 17, 2008, August 5, 2008, August 25, 2008, September 17, 2008 and September 17, 2008, which Prospectus 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 9, 2008, 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. 9 is September 24, 2008.
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) September 24, 2008
COMPUTER SOFTWARE INNOVATIONS, INC.
(Exact name of registrant as specified in its 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
(Registrant’s 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 various locations to 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 |
Description | |
| Exhibit 99.1 | PowerPoint Investor Presentation (September 2008) | |
Forward-Looking and Cautionary Statements
This report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Among other things, these statements relate to our financial condition, results of operations and future business plans, operations, opportunities and prospects. In addition, we and our representatives may from time to time make written or oral forward-looking statements, including statements contained in other filings with the Securities and Exchange Commission and in our reports to stockholders. These forward-looking statements are generally identified by the words or phrases “may,” “could,” “should,” “expect,” “anticipate,” “plan,” “believe,” “seek,” “estimate,” “predict,” “project” or words of similar import. These forward-looking statements are based upon our current knowledge and assumptions about future events and involve risks and uncertainties that could cause our actual results, performance or achievements to be materially different from any anticipated results, prospects, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are not guarantees of future performance. Many factors are beyond our ability to control or predict. You are accordingly cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date that we make them. We do not undertake to update any forward-looking statement that may be made from time to time by or on our behalf.
In our most recent Form 10-K, we have included risk factors and uncertainties that might cause differences between anticipated and actual future results. We have attempted to identify, in context, some of the factors that we currently believe may cause actual future experience and results to differ from our current expectations regarding the relevant matter or subject area. The operations and results of our software and systems integration businesses also may be subject to the effects of other risks and uncertainties, including, but not limited to:
| • | a reduction in anticipated sales; |
| • | an inability to perform customer contracts at anticipated cost levels; |
| • | our ability to otherwise meet the operating goals established by our business plan; |
| • | market acceptance of our new software, technology and services offerings; |
| • | an economic downturn; and |
| • | changes in the competitive market place and/or customer requirements. |
2
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: September 24, 2008
 Computer Software Innovations, Inc. OTC BB: CSWI Investor Presentation September 2008 1 Exhibit 99.1 |
 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 CSI’s products and engineering services, competitive pricing pressures and the availability of necessary financing. In addition, other risks are more fully described in CSI’s 2007 Form 10-K 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. Safe Harbor 2 |
 CSI,
Inc. Overview OTCBB:CSWI Headquarters: Easley, SC 225 Employees 4 offices Provider of software and technology solutions to southeast education and government markets Customer base: 600+ K-12 school districts, colleges/universities, city/county governments, non-profit organizations Solutions Proprietary SmartFusion® software suite • Accounting, billing, payroll, workflow Connected Classroom • Interactive white boards, video conferencing, Microsoft web portal Network infrastructure & end-devices • Design, installation, hardware, computing, printing, imaging Convergence applications • IP telephony, IP video Network management • Disaster recovery, archiving, identity lifecycle, performance 3 |
 Founded 1989 Released Financial Management Software 1999 Released CSI Accounting+Plus for Windows 2007 Released SmartFusion Microsoft.Net/SQL 1999 Added Technology Div. Selling Computer & Network Hardware 2001 Added IP Telephony 2003 Added IP Surveillance 2003 Added Interactive Whiteboards 2004 Added Classroom Audio 2005 Added Network Security 2006 Added Storage and Disaster Recovery 2005 Created Publicly Traded Company: CSWI 2007 Acquired McAleer Computer Associates/ Alabama 2008 Acquired ICS/ North Carolina 4 Company Timeline 2008 Acquired Version3/ South Carolina |
 Recognition 2008, 2007, 2006, 2005, 2004 VAR Business 500 2004, 2003, 2002 Elliott Davis: SC Fastest Growing Companies 2005 VAR Business: Government 100 2004 VAR Business: 50 Fastest Growing Technology Companies 2004 VAR Business: Technology Innovator Award-Application Development 2003 CRN: Top 5 Rising Stars 2003 Ingram Micro: Nation’s Fastest Growing K-12 Sector 5 |
 6 ($ in millions) FY 2007 (12.31.07) Year/Year Growth State of the Business 1 EBITDA is a non-GAAP financial measure. See reconciliation to GAAP measure provided
in Financial section. |
 7 ($ in millions) Q2 2008 Year/Year Growth State of the Business 1 EBITDA is a non-GAAP financial measure. See reconciliation to GAAP measure provided
in Financial section. |
 Strong Gross Margins Software 44.6%; Technology 20.2% Recurring Revenue Stream (50% of Software Revenue) Stable Public Sector Markets Excellent collection history Ongoing technology budgets Accelerated Market Share Growth via Acquisitions ICS (Greensboro, NC) April 2008 • Gained 85 municipal customers, expanded NC territory McAleer (Mobile, AL) in January 2007 • Gained 180 K12 school districts; created footprint in new markets State of the Business 8 |
 Market Demand For Connected Classroom Increase Customer Base In Existing Markets Leverage Solution Portfolio: – Sell CSI Solutions To Customers Gained In Acquisitions – Cross-Sell Existing Customers Continue Expanding Into New Geographies Growth Drivers 9 Growth Drivers |
 School rooms with Internet access 1 1994: 3% 2005: 93% Public schools providing handheld computers to students or teachers 1 2003: 10% 2005: 19% K12 enrollment in South region projected to grow 17% through 2016– highest growth in the country 1 U.S. has highest growth rate for interactive white boards 2 55% in 2007 Grow via demand for connected classroom 10 1 Source: Dept. of Education- Nat’l Center for Education Statistics 2 Source: Decision Tree Consulting 2008 Study Growth Components |
  South
Carolina Classrooms ² : 16,712 Potential: $69 - $94 million Grow via demand for connected classroom North Carolina Classrooms ² : 78,042 Potential: $320 - $437 million 11 New School Spending AL/NC/SC 1 $2.6 billion +23% y/y vs. +8% total U.S. Alabama Classrooms ² : 24,414 Potential: $100 - $137 million 1 Source: Dept. of Education- Nat’l Center for Education Statistics $489 - $668 million potential in CSI Promethean states 2 2 Source: Dept. of Education- Nat’l Center for Education Statistics. Classrooms already equipped by CSI have been excluded from the base used to project remaining potential. State Prospects |
 Grow via increasing customer base in existing markets CSI Core Markets 12 Opportunities in Core Markets Matching CSI Target Profile 408 ...county governments 1 2,664 ...city governments 2 439 ...library systems 1 476 ...colleges/universities 3 595 ...K12 school districts 3 8,295 ...K12 schools 3 Core Market Opportunity Sources: 1 Dept. of Census 2 Nat’l League of Cities 3 Dept. of Education- Nat’l Center for Education Statistics |
  Grow
via leveraging solution portfolio Sell CSI Solutions to Acquired Customers 180 K12 school districts 85 city governments Cross-Sell Existing Customers Network Infrastructure & End-Devices SmartFusion® Proprietary Software Suite Connected Classroom Network Management Convergence Applications 13 CSI Solutions |
 Grow via continued expansion into new geographies CSI Core Markets Total U.S. 3,100 County Governments 1 36,000 City Governments 2 14,000 School Districts 3 Total U.S. 14 1 Source: Dept of Census 2 Source: National League of Cities 3 Source: Dept. of Education- National Center for Education Statistics Nationwide Prospects |
 Successful “Beachhead” Strategy 2007 McAleer Acquisition 1. Acquisition creates beachhead Immediate revenue & positive cash flow 2. Sell CSI solutions to acquired accounts 3. Use CSI solutions to attract new customers 4. Expand sales force into contiguous territories Grow via continued expansion into new geographies 15 Expansion Strategy |
 Summary of Capitalization as of 9.1.08 Common Shares Outstanding 1 7.1 M F/D Shares Outstanding 12.3 M Full Potential Diluted 20.5 M Warrant Conversion Yields $ 8.7 M 52 Wk Trading Range $ 0.85 - $1.70 Current Share Price $ 0.95 Current Market Cap $ 5.9 M Management/Board
Ownership 2.2 Million Shares= 31% of Common outstanding; 16% outstanding shares (common & preferred) Select Financials 16 Key Statistics YTD thru 6.30.08 Fiscal Year Ends Dec 31 EPS (Fully Diluted) $ 0.12 Revenue FY 2007 $ 55.2 M Total Assets $ 24.5 M Revenue TTM 2 $ 56.1 M Total Debt EBITDA 3 FY 2007 $ 4.8 M With Sub-Debt $ 6.4 M EBITDA 3 TTM 2 $ 5.2 M Without Sub-Debt $ 4.4 M 3 EBITDA is a non-GAAP financial measure. See reconciliation to GAAP measure provided
in Financial section. 2 TTM: Trailing Twelve Months is a sum of the past 12 month timeframe. 1 Common shares outstanding includes 0.8 M shares held in trust related to Version3
acquisition. |
 Select Financials ($ in millions) 1 EBITDA is a non-GAAP financial measure. See reconciliation to GAAP measure provided
in Financial section. 17 Income Statement 3-Year Trend |
 Select Financials ($ in millions) 18 Balance Sheet 3-Year Trend 1 Includes deferred revenue, such as revenue from recurring support agreements.
|
 EBITDA 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 in the following slide. 19 |
 Reconciliation of EBITDA Amounts in Thousands $ Three Months Ended June 30 Year Ended December 31 TTM Ended June 30 2008 2007 2007 2006 Reconciliation of Net income (loss) per GAAP to EBITDA: Net income (loss) per GAAP $ 1,012 $ 903 $ 1,741 $ (880) $ 1,993 Adjustments: Income tax expense 674 776 855 (98) 855 Interest expense, net 131 152 549 406 528 Depreciation and amortization of fixed assets and trademarks 180 129 525 338 609 Amortization of software development costs 314 259 1,109 709 1,208 EBITDA $ 2,310 $ 2,219 $ 4,779 $ 475 $ 5,193 20 1 TTM: Trailing Twelve Months is a sum of the past 12 month timeframe. 1 |
 Nancy
K. Hedrick • CEO & President • 27 yrs in IT • President of CSI since 1989 Thomas P. Clinton • Sr. VP of Strategic Partnerships • 22 yrs in IT • VP at CSI since 1999 David Dechant, CPA • Chief Financial Officer • 22 yrs in Finance (including Conso Int’l Corp & Warner-Lambert) • CFO at CSI since 2005 Beverly N. Hawkins • Sr. VP of Software Development, Implementation & Support • 21 yrs in IT • VP of CSI since 1989 William J. Buchanan • Sr. VP of Delivery & Support • 22 yrs in IT • VP at CSI since 1999 Senior Management Team 21 |
 Advantages of business model – Strong gross margins – Recurring revenue stream – Focused on public sector markets with stable budgets Positioned for continued growth – Market demand for connected classroom solutions – Customer base growth in existing markets – Leverage solution portfolio with newly acquired and existing customers – Continue expanding into new geographies Investment Summary 22 |
 Company Contact David Dechant, CFO ddechant@csioutfitters.com Telephone: 864.855.3900 Company Website: www.csioutfitters.com Investor Contact Alliance Advisors, LLC Mark McPartland markmcp@allianceadvisors.net Telephone: 910.221.1827 23 Contact Us |