<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
AMENDMENT TO APPLICATION OR REPORT
FILED PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: FEBRUARY 27, 1998
IMAGE GUIDED TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
COLORADO 001-12189 84-1139082
(State or other jurisdiction (Commission file number) (IRS Employer
of incorporation or organization) Identification No.)
5710-B FLATIRON PARKWAY, BOULDER, CO 80301
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 447-0248
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items, financial
statements, exhibits, or other portions of its current report dated December
29, 1997 on Form 8K as set forth in the pages attached hereto:
(List all such items, financial statements, exhibits, or other portions
amended)
Item 2. and Item 7a. and b.
<PAGE>
Item 2. Acquisition or Disposition of Assets
On December 12, 1997, Image Guided Technologies, Inc. (the "Company")
finalized the acquisition of all the outstanding stock of Brimfield Precision,
Inc. ("Brimfield") for a purchase price of approximately $9,847,000. The
purchase price was paid with a combination of approximately $8,572,000 in cash
and 579,710 shares of the Company's common stock.
Brimfield sells surgical instruments and orthopedic implants to OEM
medical device companies. Brimfield's products are used for spinal
surgery, orthopedic surgery and minimally invasive surgical procedures. Prior
to its sale to the Company, Brimfield was owned by William and Matthew Lyons.
William Lyons will continue to act as President of Brimfield and has been
elected as a director of the Company.
The Company obtained the cash for the acquisition from bank financing
and its own funds. The Company has entered into a secured loan agreement
with Imperial Bank whereby Imperial Bank has loaned the Company $4,000,000
pursuant to a three-year term loan (payable in thirty-six equal installments
of principal) and up to $2,000,000 (the actual amount to be determined by a
collateral audit) pursuant to a revolving loan payable on or before June 30,
1999. In connection with the loan agreement, the Company has agreed to raise
$1,000,000 in equity by March 15, 1998. The Company paid Cruttenden Roth,
Inc. ("Cruttenden") a $300,000 finder's fee for introducing the Company to,
and advising the Company in negotiations with, Imperial Bank. The Company
has issued a one-year $500,000 subordinated note to Cruttenden to pay the
finder's fee plus an additional $200,000 advisory fee owed to Cruttenden. In
connection with the loan and subordinated note, the Company issued a seven-year
warrant for 160,000 shares of the Company's common stock with an exercise price
of $2.92 per share to Imperial Bank and a seven-year warrant for 100,000 shares
of the Company's common stock with an exercise price of $2.92 per share to
Cruttenden.
Item 7. Financial Statements and Pro Forma Financial Information
(a) Financial Statements of Business Acquired
<TABLE>
Page
----
<S> <C>
Report of Independent Accountants................................................. 3
Balance Sheet - October 31, 1996.................................................. 4
Statement of Operations and Retained Earnings -- Year Ended October 31, 1996...... 5
Statement of Cash Flows -- Year Ended October 31, 1996............................ 6
Notes to Financial Statements..................................................... 7
</TABLE>
The financial statements of Brimfield Precision, Inc. as of and for the
year ended October 31, 1997 were previously filed on December 29, 1997 on
Form 8-K.
(b) Pro Forma Financial Information (Unaudited) for Image Guided
Technologies, Inc. ("Image Guided" or "IGTI") and Brimfield Precision, Inc.
("Brimfield" or "BPI")
<TABLE>
Page
----
<S> <C>
Pro Forma Combined Balance Sheet as of September 30, 1997......................... 12
Notes to Pro Forma Combined Balance Sheet......................................... 13
Pro Forma Combined Statement of Operations for the Year Ended
December 31, 1996 (IGTI) and the Year Ended October 31, 1996 (BPI).............. 14
Pro Forma Combined Statement of Operations for the Nine Months Ended
September 30, 1997 (IGTI) and the Nine Months Ended July 31, 1997 (BPI)......... 15
Notes to Pro Forma Combined Statements of Operations.............................. 16
</TABLE>
2
<PAGE>
To the Board of Directors
BRIMFIELD PRECISION, INC.
Brimfield, Massachusetts
Independent Auditors' Report
We have audited the accompanying balance sheet of Brimfield Precision, Inc. (an
S Corporation) as of October 31, 1996 and the related statements of operations
and retained earnings and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Brimfield Precision, Inc. as
of October 31, 1996, and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting
principles.
/s/ Aubrey, Dixon, Riley, Turgeon & Schultz, LLC
Holyoke, MA
January 13, 1998
3
<PAGE>
BRIMFIELD PRECISION, INC.
BALANCE SHEET
OCTOBER 31, 1996
<TABLE>
ASSETS
- ------
<S> <C>
Current assets
Cash and cash equivalents $ 568,667
Accounts receivable 1,405,454
Inventory 949,921
Prepaid expense 43,115
----------
Total current assets 2,967,157
Property and equipment, net of accumulated
depreciation of $2,558,276 at October 31, 1996 2,713,958
Other assets 150,058
----------
Total assets $5,831,173
----------
----------
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities
Accounts payable $ 375,067
Accrued liabilities 234,859
Income taxes payable 72,381
Current portion of long-term debt 222,918
Current portion of note payable - officer 15,300
Current portion of long-term capital lease obligations 151,670
----------
Total current liabilities 1,072,195
Long-term debt 588,167
Note payable - officer 173,400
Long-term capital lease obligations 524,282
----------
Total liabilities 2,358,044
----------
Stockholders' equity
Common stock, no par value, 100 shares
authorized and issued, 43 shares outstanding 10,500
Retained earnings 3,810,629
----------
3,821,129
Less 57 shares of treasury stock - at cost (348,000)
----------
Total stockholders' equity 3,473,129
----------
Total liabilities and stockholders' equity $5,831,173
----------
----------
</TABLE>
See accountants' audit report and accompanying notes to financial statements.
4
<PAGE>
BRIMFIELD PRECISION, INC.
STATEMENT OF OPERATIONS AND RETAINED EARNINGS
YEAR ENDED OCTOBER 31, 1996
<TABLE>
<S> <C>
Revenue $12,967,877
Cost of goods sold 8,168,536
-----------
Gross profit 4,799,341
-----------
Operating expense
Selling and marketing 479,178
Research and development 165,246
General and administrative 1,528,978
-----------
Total operating expense 2,173,402
-----------
Income from operations 2,625,939
-----------
Other income (expense):
Interest and other expense (148,101)
Interest and other income 68,346
-----------
Total other expense (79,755)
-----------
Net income before income taxes 2,546,184
Income taxes 72,529
-----------
Net income 2,473,655
Retained earnings - beginning of year 3,263,142
Less dividends 1,926,168
-----------
Retained earnings - end of year $ 3,810,629
-----------
-----------
</TABLE>
See accountants' audit report and accompanying notes to financial statements.
5
<PAGE>
BRIMFIELD PRECISION, INC.
STATEMENT OF CASH FLOWS
YEAR ENDED OCTOBER 31, 1996
<TABLE>
<S> <C>
Cash flows from operations
Net income $ 2,473,655
Non-cash items included in net income
Depreciation and amortization 438,243
Gain on disposition of property and equipment (4,500)
Other changes in operating assets and liabilities
Accounts receivable 465,259
Inventory (58,624)
Prepaid expense 17,123
Federal tax deposit (72,347)
Other assets (10,914)
Accounts payable (193,581)
Accrued liabilities (209,956)
Income taxes payable 52,245
-----------
Net cash provided by operations 2,896,603
-----------
Cash flows from investing activities
Acquisition of property and equipment (432,599)
Proceeds on disposition of property and equipment 4,500
-----------
Net cash used by investing activities (428,099)
-----------
Cash flows from financing activities
Payments on long-term debt (202,378)
Payments on note payable - officer (15,300)
Payments on long-term capital lease obligations (113,469)
Payment of dividends (1,926,168)
-----------
Net cash used by financing activities (2,257,315)
-----------
Net increase in cash and cash equivalents 211,189
Net cash and cash equivalents - beginning of year 357,478
-----------
Net cash and cash equivalents - end of year $ 568,667
-----------
-----------
</TABLE>
See accountants' audit report and accompanying notes to financial statements.
6
<PAGE>
BRIMFIELD PRECISION, INC.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. NATURE OF BUSINESS: Brimfield Precision, Inc. manufactures specialized
medical instruments and medical equipment.
b. ACCOUNTS RECEIVABLE: The Company accounts for uncollectible accounts
receivable using the direct write-off method. Generally accepted
accounting principles require that the allowance method be used to account
for bad debts. The effects of this departure from generally accepted
accounting principles on financial position, results of operations, and
cash flows have been determined to be not material.
c. INVENTORY: Inventory is valued at the lower of cost, determined on the
first-in, first-out (FIFO) method, or market.
d. PROPERTY AND EQUIPMENT: Property and equipment are carried at cost.
Depreciation is computed on both the straight-line and accelerated methods
based on the estimated useful lives of the related assets. Depreciation
expense was $432,398 for the year ended October 31, 1996.
e. CASH AND CASH EQUIVALENTS: The Company considers all highly liquid
debt instruments purchased with a maturity of three months or less to be
cash equivalents.
f. USE OF ESTIMATES: The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
g. ADVERTISING: The Company expenses advertising costs as incurred.
Advertising expense was $53,115 in 1996.
h. INCOME TAXES: Effective November 1, 1986 the Company, with the consent
of its stockholders, elected to be treated as an S Corporation. In this
status, the corporation is generally not a taxable entity and elements of
income and expense flow through and are taxed to the stockholders on an
individual basis.
Effective for years ending on an after December 31, 1988, the Commonwealth
of Massachusetts imposes an income tax on S Corporations whose gross
receipts exceed $6,000,000.
Massachusetts Investment Tax Credits are accounted for using the
flow-through method which reduces income tax expense for the current year
in which the credits are utilized.
i. AMORTIZATION: The costs of intangible assets are amortized on a
straight-line basis over a period of 5 to 17 years. Amortization expense
was $5,845 for the year ended October 31, 1996.
2. TRANSACTIONS WITH RELATED PARTIES
Note payable - officer of $188,700 at October 31, 1996, is due in monthly
principal installments of $1,275, plus interest at 8%. An additional
final principal payment of $159,375 is due October, 1998.
The Company leases a facility and land in Brimfield, Massachusetts on a
month to month basis which is owned by a former stockholder of the
Company. In addition, the Company has constructed a building on the
leased property. Rental expense for the building and land in 1996 amounted
to $108,000.
7
<PAGE>
BRIMFIELD PRECISION, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1996
3. NOTE PAYABLE - BANK
At October 31, 1996 the Company had no borrowings under a line of credit
agreement with a bank. The agreement provides for interest at the bank's
prime lending rate, and is secured by all assets of the Company. The
maximum available credit on this note was $750,000 at October 31, 1996.
4. LONG-TERM DEBT
Long-term debt at October 31, 1996 consisted of the following:
<TABLE>
<S> <C>
Note payable to a bank, at prime, payable in monthly installments of
$12,500 plus interest, secured by all assets of the Company, maturing
in June, 2000. $562,500
Note payable to a bank, at prime plus 1/4%, payable in monthly installments
of $2,167 plus interest, secured by machinery, maturing in October, 2000. 106,167
Note payable to a bank, at prime plus 1/4%, payable in monthly installments
of $2,833 plus interest, secured by machinery, maturing in August, 2000. 131,667
Note payable to a finance company at 8%, payable in monthly installments
of $807 plus interest, secured by a motor vehicle. This note was paid
off in September, 1997. 10,751
--------
811,085
Less current portion 222,918
--------
Total long-term debt $588,167
--------
--------
</TABLE>
Aggregate maturities on long-term debt are as follows:
<TABLE>
Years Ending
October 31, Amount
------------ --------
<S> <C>
1997 $222,918
1998 210,000
1999 210,000
2000 168,167
--------
$811,085
--------
--------
</TABLE>
8
<PAGE>
BRIMFIELD PRECISION, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1996
5. LEASE COMMITMENTS
The gross amount of the capitalized leased assets and the accumulated
depreciation are included in property and equipment as reported on the
balance sheet. The amortization of these leases are included in
depreciation expense.
<TABLE>
Equipment Under
Capitalized Lease
Agreements
-----------------
<S> <C>
Equipment $820,244
Less accumulated amortization 98,873
--------
$721,371
--------
--------
</TABLE>
Future minimum payments on leases in effect at October 31, 1996 are as
follows:
<TABLE>
Years Ending
October 31, Amount
------------ --------
<S> <C> <C>
1997 $202,041
1998 202,041
1999 202,041
2000 160,826
2001 48,160
--------
Total minimum lease payments $815,109
Less amount representing interest 139,157
--------
Net present value 675,952
Less current portion 151,670
--------
Long-term capital lease obligations $524,282
--------
--------
</TABLE>
6. CONCENTRATION OF CREDIT RISK
Substantially all of the Company's accounts receivable are due from companies
in the high technology medical industry located throughout the United States.
Four of the Company's customers accounted for approximately $9,655,128 of
total sales in 1996. One customer accounted for approximately $434,805 of
accounts receivable at October 31, 1996.
The Company performs regular credit reviews of its significant customers'
financial condition. Receivables generally are collected within 60 days.
The Company maintains its operating accounts in certain financial
institutions, which balances are insured by the Federal Deposit Insurance
Corporation up to $100,000. At times, the Company may maintain operating
account balances which exceed $100,000.
7. INVENTORY
Inventory consisted of the following at October 31, 1996.
<TABLE>
<S> <C>
Raw materials $277,850
Work in process 153,466
Finished goods 518,605
--------
Total inventory $949,921
--------
--------
</TABLE>
9
<PAGE>
BRIMFIELD PRECISION, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1996
8. INCOME TAXES
The components of income tax expense related to continuing operations at
October 31, 1996 are as follows:
<TABLE>
<S> <C>
Tax computed at statutory rates $118,608
Investment tax credit taken currently (46,079)
--------
Total provision for income taxes $ 72,529
--------
--------
</TABLE>
9. DISCLOSURES FOR CASH FLOW STATEMENT
<TABLE>
CASH PAID DURING THE YEAR FOR: 1996
--------
<S> <C>
Interest $140,513
--------
--------
Income taxes $ 20,284
--------
--------
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Capital lease obligations for new equipment $393,177
--------
--------
</TABLE>
10. RETIREMENT PLAN
Effective June 1, 1991 the Company implemented the Brimfield Precision, Inc.
401(k) Savings and Retirement Plan covering substantially all employees.
Employees may contribute from 2% up to 15% of total salary, not to exceed
Internal Revenue Service limits. The Company does not make matching
contributions.
11. SUBSEQUENT EVENT
In November, 1997 the stockholders entered into a purchase and sale
agreement to sell 100% of the outstanding stock of the Company. On
December 12, 1997 the sale of 100% of the Company stock was finalized.
10
<PAGE>
Item 7 (b). Pro Forma Financial Information (Unaudited) for Image Guided
Technologies, Inc. ("Image Guided") and Brimfield Precision, Inc. ("Brimfield").
On December 12, 1997, Image Guided purchased all the outstanding shares of
Brimfield stock. The transaction was accounted for using the purchase method
of accounting. The pro forma combined balance sheet as of September 30, 1997
which follows gives effect to the purchase accounting and estimated fair market
value allocation of the net assets acquired in the acquisition of Brimfield as
if the transaction had occurred on that date. The pro forma combined
statements of operations for the fiscal year 1996 and the nine months ended
September 30, 1997 (Image Guided) and July 31, 1997 (Brimfield) which follow
give effect to the impact of the acquisition of Brimfield as if the transaction
had occurred at the beginning of those periods.
In the opinion of the Company's management, all adjustments necessary to
present fairly such pro forma combined financial statements have been made.
These unaudited pro forma financial statements are not necessarily indicative
of what actual results would have been had the transactions occurred at the
beginning of the respective periods nor do they purport to indicate the results
of future operations of the Company. These unaudited pro forma financial
statements should be read in conjunction with the accompanying notes and the
historical financial statements and notes thereto of Brimfield Precision, Inc.
and Image Guided Technologies, Inc.
11
<PAGE>
PRO FORMA COMBINED BALANCE SHEET
SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
ASSETS Pro Forma Pro Forma
Image Guided Brimfield Adjustments Combined
------------ ---------- ----------- ---------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $4,729,000 $ 245,000 $(2,545,000) (a) $ 2,429,000
Accounts receivable, net 986,000 1,684,000 2,670,000
Inventories, net 416,000 1,093,000 1,509,000
Other current assets 96,000 276,000 372,000
----------- ---------- ----------- -----------
Total current assets 6,227,000 3,298,000 (2,545,000) 6,980,000
Property and equipment, net 363,000 3,777,000 271,000 (a) 4,411,000
Goodwill, net 5,789,000 (a) 5,789,000
Other assets 16,000 124,000 140,000
----------- ---------- ----------- -----------
Total assets $6,606,000 $7,199,000 $ 3,515,000 $17,320,000
----------- ---------- ----------- -----------
----------- ---------- ----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 281,000 $ 583,000 $ 277,000 (a) $ 1,141,000
Accrued liabilities 224,000 174,000 398,000
Current portion of debt and capital leases 40,000 518,000 500,000 (b) 1,058,000
----------- ---------- ----------- -----------
Total current liabilities 545,000 1,275,000 777,000 2,597,000
Long-term portion of debt and capital leases 73,000 1,732,000 5,023,000 (b) 6,828,000
----------- ---------- ----------- -----------
Total liabilities 618,000 3,007,000 5,800,000 9,425,000
----------- ---------- ----------- -----------
Commitments and contingencies
Shareholders' equity (deficit):
Common Stock, no par value 8,771,000 10,000 1,275,000 (c) 10,056,000
Shareholders' equity (accumulated deficit) (2,783,000) 4,182,000 (3,560,000) (d) (2,161,000)
----------- ---------- ----------- -----------
Total shareholders' equity (deficit) 5,988,000 4,192,000 (2,285,000) 7,895,000
----------- ---------- ----------- -----------
Total liabilities and shareholders' equity $ 6,606,000 $7,199,000 $ 3,515,000 $17,320,000
----------- ---------- ----------- -----------
----------- ---------- ----------- -----------
</TABLE>
See accompanying notes to pro forma combined balance sheet.
12
<PAGE>
NOTES TO PRO FORMA COMBINED BALANCE SHEET
(UNAUDITED)
Note 1 - Acquisition
On December 12, 1997, Image Guided finalized the acquisition of all the
outstanding stock of Brimfield for a purchase price of approximately
$9,847,000, including expenses related to the acquisition. The purchase
price was paid with a combination of approximately $8,572,000 in cash and
579,710 shares of the Company's common stock. The Company obtained the cash
for the acquisition from bank financing and its own funds. In conjunction
with the bank financing, the Company issued two seven-year warrants for a
total of 260,000 shares of the Company's common stock.
Note 2 - Pro Forma Adjustments
(a) The total estimated purchase price was as follows:
<TABLE>
<S> <C>
Stock acquired ...................................... $3,787,000
Step-up in valuation of assets acquired ............. 271,000
Goodwill ............................................ 5,789,000
----------
Total acquisition cost ........................... $9,847,000
----------
----------
</TABLE>
The total acquisition cost was funded as follows:
<TABLE>
<S> <C>
Cash from Image Guided ............................. $2,545,000
Cash from bank financing, net of discount .......... 5,523,000
Issuance of warrants ............................... 227,000
Issuance of Image Guided common stock .............. 1,275,000
Accrued expenses related to acquisition ............ 277,000
----------
Total sources of funding ........................ $9,847,000
----------
----------
</TABLE>
(b) Represents debt acquired to finance a portion of the purchase price.
(c) Represents 579,710 shares of Image Guided common stock issued to finance
a portion of the purchase price.
(d) Represents the equity of Brimfield on the date of acquisition less the
value of warrants issued to finance a portion of the purchase price.
13
<PAGE>
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED
(UNAUDITED)
<TABLE>
December 31, October 31,
1996 1996
Image Guided Brimfield Adjustments Combined
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue $4,080,000 $12,968,000 $17,048,000
Cost of goods sold 1,836,000 8,169,000 $ 45,000 (a) 10,050,000
---------- ----------- --------- -----------
Gross profit 2,244,000 4,799,000 (45,000) 6,998,000
---------- ----------- --------- -----------
Operating expenses:
Research and development 618,000 165,000 783,000
Selling and marketing 554,000 479,000 1,033,000
General and administrative 705,000 1,529,000 289,000 (b) 2,523,000
---------- ----------- --------- -----------
Total operating expenses 1,877,000 2,173,000 289,000 4,339,000
---------- ----------- --------- -----------
Operating income (loss) 367,000 2,626,000 (334,000) 2,659,000
Other income (expense) (12,000) (80,000) (551,000)(c) (643,000)
---------- ----------- --------- -----------
Net income before income taxes 355,000 2,546,000 (885,000) 2,016,000
Income taxes -- 72,000 72,000
---------- ----------- --------- -----------
Net Income $ 355,000 $ 2,474,000 $(885,000) $ 1,944,000
---------- ----------- --------- -----------
---------- ----------- --------- -----------
Pro forma earnings per share $0.15 $0.61
Pro forma weighted average
common shares outstanding 2,324,979 839,710 (d) 3,164,689
</TABLE>
See accompanying notes to pro forma combined statements of operations.
14
<PAGE>
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED
(UNAUDITED)
<TABLE>
September 30,
1997 July 31, 1997
Image Guided Brimfield Adjustments Combined
------------ ------------- ----------- --------
<S> <C> <C> <C> <C>
Revenue $3,829,000 $7,544,000 $11,373,000
Cost of goods sold 1,670,000 5,127,000 $ 34,000 (a) 6,831,000
---------- ---------- --------- -----------
Gross profit 2,159,000 2,417,000 (34,000) 4,542,000
---------- ---------- --------- -----------
Operating expenses:
Research and development 786,000 90,000 876,000
Selling and marketing 481,000 221,000 702,000
General and administrative 825,000 928,000 217,000 (b) 1,970,000
---------- ---------- --------- -----------
Total operating expenses 2,092,000 1,239,000 217,000 3,548,000
---------- ---------- --------- -----------
Operating income (loss) 67,000 1,178,000 (251,000) 994,000
Other income (expense) 176,000 (172,000) (288,000)(c) (284,000)
---------- ---------- --------- -----------
Net income before income taxes 243,000 1,006,000 (539,000) 710,000
Income taxes --- --- ---
---------- ---------- --------- -----------
Net Income $ 243,000 $1,006,000 $(539,000) $ 710,000
---------- ---------- --------- -----------
---------- ---------- --------- -----------
Pro forma earnings per share $ 0.07 $ 0.16
Pro forma weighted average
common shares outstanding 3,549,047 839,710 (d) 4,388,757
</TABLE>
See accompanying notes to pro forma combined statements of operations.
15
<PAGE>
NOTES TO PRO FORMA COMBINED STATEMENTS OF OPERATIONS
(UNAUDITED)
(a) Additional depreciation related to a step-up in valuation of Brimfield
assets of $271,000, depreciated over six years at $45,000 per year.
(b) Amortization of goodwill over twenty years at $289,000 per year.
(c) Interest expense related to debt financing and amortization of debt
discount related to issuance of warrants.
(d) Represents 579,710 shares together with 260,000 shares underlying
warrants of Image Guided issued in connection with the acquisition.
16
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned hereunto duly authorized.
IMAGE GUIDED TECHNOLOGIES, INC.
(Registrant)
February 27, 1998 /s/ Paul L. Ray
-------------------------------------------------
Paul L. Ray
Chairman of the Board, President and
Chief Executive Officer
February 27, 1998 /s/ Jeffrey J. Hiller
-------------------------------------------------
Jeffrey J. Hiller
Vice President and Chief Financial Officer
(Principal Accounting Officer)
