<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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): January 4, 2000
OMTOOL, LTD.
--------------
(Exact name of Registrant as specified in its charter)
Delaware 0-22871 02-0447481
--------------- ------------- --------------
(State or other jurisdiction (Commission (IRS Employer
of Incorporation) File number) Identification No.)
8 INDUSTRIAL WAY, SALEM, NH 03079
----------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (603) 898-8900
<PAGE>
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On January 4, 2000, pursuant to an Agreement for the Sale and
Purchase of Certain Business and Assets between International Presence PLC
("IPP") and Omtool Europe Limited ("Omtool Europe"), Omtool, Ltd.
(collectively with Omtool Europe, "Omtool"), Omtool sold to IPP certain
business assets consisting of intellectual property, goodwill, customer
lists, customer contracts, equipment and other assets related to the
Company's software products and third party hardware products for facsimile
and other communications applications for the IBM AS/400 product line (the
"AS/400 Assets"). The sale price for the AS/400 Assets was $600,000 in cash
payable in four equal installments, with the first payment on January 4, 2000
and the remaining payments in April, July and October of 2000. The purchase
price for the AS/400 Assets was determined through arms' length negotiations
between management of IPP and management of Omtool.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. Not applicable.
(b) PRO FORMA FINANCIAL INFORMATION.
The accompanying pro forma consolidated balance sheet as of
September 30, 1999 assumes that Omtool sold its AS/400 Assets to
IPP on the last reported balance sheet date, September 30, 1999.
The accompanying pro forma consolidated Statements of Operations
for the for the year ended December 31, 1998 and for the nine month
period ended September 30, 1999, assume the sale of the AS/400
Assets took place on January 1, 1998. The pro forma consolidated
Statements of Operation do not include the effect of the loss from
Omtool's sale of the AS/400 Assets to IPP.
The accompanying pro forma information is presented for
illustrative purposes only and is not necessarily indicative of the
financial position or results of operations which would actually
have been reported had the sale of AS/400 Assets occurred during
the periods presented, or which may be reported in the future.
The accompanying pro forma consolidated financial statements should
be read in conjunction with the historical financial statements and
related notes thereto for Omtool.
The following unaudited consolidated pro forma financial statements
are included as Exhibit 99.1 to this report and are incorporated
herein by reference:
Unaudited Pro Forma Consolidated Balance Sheet as of
September 30, 1999
Unaudited Pro Forma Consolidated Statement of Operations
for the nine months ended September 30, 1999
<PAGE>
Unaudited Pro Forma Consolidated Statement of Operations
for the year ended December 31, 1998
Notes to Unaudited Pro Forma Combined Financial Information
(c) EXHIBITS.
EXHIBIT NO. DESCRIPTION
----------- -----------
2.1 Agreement for the Sale and Purchase of Certain
Business and Assets dated December 1999 by and
between International Presence PLC, and Omtool
Europe Limited and Omtool, Ltd.
99.1 Unaudited Pro Forma Consolidated Balance Sheet as
of September 30, 1999
Unaudited Pro Forma Consolidated Statement of
Operations for the nine months ended September 30,
1999
Unaudited Pro Forma Consolidated Statement of
Operations for the year ended December 31, 1998
Notes to Unaudited Pro Forma Combined Financial
Information
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto authorized.
OMTOOL, LTD.
Date: January 19, 2000
By: /s/ Adrian A. Peters
--------------------------
Adrian A. Peters
President, Chief Executive
Officer and Chief
Operating Officer
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
2.1 Agreement for the Sale and Purchase of Certain Business and Assets
dated December 1999 by and between International Presence PLC, and
Omtool Europe Limited and Omtool, Ltd.
99.1 The following unaudited consolidated pro forma financial statements:
Unaudited Pro Forma Consolidated Balance Sheet as of September
30, 1999
Unaudited Pro Forma Consolidated Statement of Operations for the
nine months ended September 30, 1999
Unaudited Pro Forma Consolidated Statement of Operations for the
year ended December 31, 1998
Notes to Unaudited Pro Forma Combined Financial Information
<PAGE>
Exhibit 2.1
DATED December 1999
AGREEMENT
for the sale and purchase
of certain business and assets of
OMTOOL EUROPE LIMITED
and OMTOOL, LTD.
INTERNATIONAL PRESENCE PLC (1)
OMTOOL EUROPE LIMITED (2)
OMTOOL, LTD. (3)
<PAGE>
PARTIES
(1) INTERNATIONAL PRESENCE PLC (No. 3709669) whose registered office is at
100 Gray's Inn Road, London WC1X 8BY ("the Purchaser"); and
(2) OMTOOL EUROPE LIMITED ("Europe") (No. 1998843) whose registered office
is at 76 Coombe Road, Kingston-upon-Thames, Surrey, England and (3)
OMTOOL, LTD. ("Omtool"), a corporation organized under the State of
Delaware whose principal office is at 8 Industrial Way, Salem, NH
03079, United States of America (together "the Vendors").
INTRODUCTION
The Vendors wish to sell and the Purchaser wishes to buy the IBM AS/400
business as defined within this Agreement and the attached Schedules
and it is hereby agreed that the Purchaser shall take over the Business
as a going concern on an "as is/where is basis" upon the terms and
subject to the conditions of this Agreement.
INTERPRETATION
In this Agreement, except where a different interpretation is clear
from or necessary in the context, the following words and expressions
shall have the following respective meanings:
<TABLE>
<S> <C>
the Assets all the following property, records, assets and rights of
the Vendors used in the conduct of the Business comprising
the benefit of the Customer Contracts, the customer list,
the Employees, the Goodwill, the Intellectual Property owned
by the Vendors for use in the Business, and the Plant,
excluding (i) current receivable balance from previous sales
or licenses of IBM AS/400 products, (ii) cash collected
under current customer support contracts, (iii) contracts
with vendors, such as providers of third-party hardware
products, (iv) governmental licenses and permits,
(v) trademarks not specifically listed under "Goodwill" below
and (vi) Vendors' office facilities and, except as listed
under "Plant", equipment.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
the Business the business of the design, development, marketing,
licensing, distribution and support of computer software
products for facsimile and other communication applications
for the IBM AS/400 marketplace together with the respective
resale of related IBM AS/400 third-party hardware products
and the provision of related consulting, customization,
configuration, installation and support services carried on
by the Vendors under the name "Omtool" or "CMA-Ettworth"
Business Day a day other than a Saturday or a Sunday on which the
clearing banks are open for business in the City of London
Completion completion of the sale and purchase of the Assets and
take-over of the Business
Completion 4th January 2000
Customer Contracts the contracts including those listed in schedule 3 between the
Vendors and clients of the Business for the supply of services to such
clients
the Employees those employees of the Vendors engaged in the Business as
exclusively listed in Schedule 1, whose contracts of employment are to be
taken over by the Purchaser.
the Goodwill the goodwill of the Vendors in relation to the Business together
with the exclusive right (so far as the Vendors can grant it) for the
Purchaser to use the names CMA-Ettworth, Telex/Fax/400, Voice Access, IMPS
and IMPS II in succession to, and to the exclusion of, the Vendors
Intellectual Property trade names, rights in logos and get-up, trade secrets,
registered designs, design rights, patents,
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
letters patent, utility models, semi-conductor topographies, all rights of
whatsoever nature in computer software and data in each case only insofar
as relates exclusively to the software products known as Telex/Fax/400,
Voice Access, IMPS and IMPS II, all intangible rights and privileges of a
nature similar to any of the foregoing, in every case in any part of the
world and whether or not registered; and including all granted
registrations and all applications for registration in respect of any of
the same; but excluding any rights to the OMTOOL name;
the Liabilities any liabilities or obligations of any nature of the Vendors
in relation to the Business or attaching to the Business or
Assets incurred or arising in respect of any action,
omission, matter of transactions occurring on or prior to
Completion excluding existing obligations of the Vendors
under the Customer Contracts
the Plant the plant and equipment listed in Schedule 4
the Transfer Regulations the Transfer of Undertakings (Protection of Employment)
Regulations 1981, as amended
</TABLE>
SALE AND PURCHASE OF THE ASSETS AND TRANSFER OF THE BUSINESS
For the consideration price of US $600,000 the Vendors shall sell as
legal and beneficial owner and with full title guarantee and the
Purchaser shall purchase the Business and the Assets on an "as is/where
is basis", to the best of the knowledge of the Vendors free from all
options, liens, charges, encumbrances and all other adverse rights and
interests, with effect from Completion. In the case of any of the
Assets which are capable of transfer by delivery, title to that Asset
shall pass to the Purchaser by delivery. The Vendors make no
representation or warranty, express or implied, as to the Business or
the Assets and all implied covenants (other than as to title) under UK
Sale of Goods or Services legislation are hereby expressly excluded.
The Purchaser shall take over the Business as a going concern upon
Completion.
4
<PAGE>
There shall be excluded from the sale and purchase under this
Agreement:
(a) the Liabilities, other than Liabilities under the Customer
Contracts which are hereby assumed by the Purchaser, and
(b) cash in hand or at bank and current accounts receivable.
OBLIGATIONS OF THE VENDORS PRIOR TO COMPLETION
The Vendors undertake that once this Agreement is signed but prior to
actual completion that they shall:
(a) assist the Purchaser to affect a smooth transfer of the
Business such as the drafting of a letter to all customers
informing them of the transfer, the enclosure of a novation
agreement and invoice for the renewal of any contracts, plus
reasonable access to all databases and information concerning
the Business;
(b) permit a representative of the Purchase to attend at the
offices of the Vendors at Coombe Road, Kingston upon Thames
("the Premises") and the offices of Omtool in the US for the
purpose of novation of the Customer Contracts;
(c) not knowingly enter into any agreements that could be
detrimental to the Business;
(d) work with the Purchaser to effect the transfer and delivery of
all the Plant; and
(e) appoint the Purchaser as an Authorized Reseller for the
product known as Fax Sr subject to the terms and conditions of
a standard reseller agreement and permit the Purchaser to sell
such product under the brand name IMPS II.
OBLIGATIONS OF THE VENDORS AFTER COMPLETION
The Vendors undertake that after Completion that they will use
reasonable efforts to:
(a) continue to give to the Purchaser such information and
reasonable assistance as the Purchaser may reasonably require
in connection with the Business;
(b) execute such further assurances and afford such assistance as
the Purchaser may reasonably require to vest in the Purchaser
(or its nominee) the full and unfettered benefit of the
Business and the Assets; and
(c) inform all persons inquiring about the Business of the
Transfer of the Business to The Purchaser and pass on to the
Purchaser within two Business Days of receipt any
5
<PAGE>
enquiry relating to the Business or for the supply of goods or
in connection with the Business.
OBLIGATION OF THE PURCHASER AFTER COMPLETION
The Purchaser undertakes after Completion that it will:
(a) honor and perform the Customer Contracts, and support the
customers through expiration or termination of the Customer
Contracts; and
(b) hold in trust for the Vendors and promptly transfer and report
to the Vendors any amount received on account of the current
receivable balance being retained by the Vendors.
CONSIDERATION PAYABLE BY THE PURCHASER
The total consideration payable by the Purchaser to the Vendors for the
Assets shall be US$ 600,000 which shall be appointed among the Assets
as follows:
<TABLE>
<CAPTION>
<S> <C>
- ------------------------------------------------------------ ---------------------------------------------------------
ASSET PRICE $
- ------------------------------------------------------------ ---------------------------------------------------------
the Goodwill and Customer List $1.00
- ------------------------------------------------------------ ---------------------------------------------------------
the Intellectual Property $599,998
- ------------------------------------------------------------ ---------------------------------------------------------
Customer Contracts $1.00
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
The consideration payable shall be paid in the following amounts on the
following dates by telegraphic transfer, and time shall be of the
essence.
<TABLE>
<CAPTION>
<S> <C>
- ------------------------------------------------------------ ---------------------------------------------------------
AMOUNT (US$) DATE
- ------------------------------------------------------------ ---------------------------------------------------------
150,000 Completion Date
- ------------------------------------------------------------ ---------------------------------------------------------
150,000 15th April 2000
- ------------------------------------------------------------ ---------------------------------------------------------
150,000 15th July 2000
- ------------------------------------------------------------ ---------------------------------------------------------
150,000 15th October 2000
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
The Purchase guarantees to pay the full consideration regardless of the
performance of the Business after the Completion.
COMPLETION
Completion of the sale and purchase of the Assets and take over of the
Business shall take place of the Completion Date on the Premises.
Upon Completion the Vendors shall deliver of cause to be delivered or
make fully available to the Purchaser:
6
<PAGE>
(a) an assignment of all registered Intellectual Property (if
any);
(b) all Assets capable of transfer by delivery or by physical
transfer; and
(c) all books and records and all contracts, licenses, customer
data and files, and all other documents exclusively concerning
the Business.
EMPLOYEES
The Vendors and the Purchase acknowledge that the transfer of the
Business (so far as it relates to the Employees employed in the United
Kingdom) constitutes a relevant transfer of the whole of the
undertaking of the Business for the purposes of Transfer Regulations.
The Vendors will use all reasonable efforts to assist in the transfer
of the Employees to the employment of the Purchaser and will indemnify
the Purchaser from all actions arising from any person (not being an
Employee) concerning their employment by The Vendor or The Purchaser.
The Purchaser will indemnify the Vendors from all actions against the
Vendors relating to any charges to the terms of employment of the
Employees instituted by the Purchaser after Completion.
COVENANTS
To ensure that the Purchaser receives the full value of the Business
and the full benefit of the goodwill of the Business each of the
Vendors hereby undertakes and covenants with the Purchaser that none of
them, none of their respective holding companies or subsidiaries shall
for a period of one year after the date of this Agreement directly
within the United Kingdom and in the United States:
(a) carry on or be engaged directly in any trade or business
providing facsimile or other communication applications for
the AS/400 or related services in competition with the trade
or business of the Business as currently carried on; or
(b) either on its own behalf or on behalf of any person, firm or
company directly or indirectly have any dealings with or
endeavor to entice away from the Business or solicit or
interfere with any person, firm or company who at that date
does (or, as regards a person, firm or company that he has
been engaged or involved with, at any time during the period
of two years prior to that date shall have been doing)
business with the Business and who the Purchaser reasonably
considers to have been a regular customer, client, supplier or
distributor of the Business for the purpose of assisting any
trade or business which provides facsimile or other
communication applications for the AS/400 or related services
in competition with the Business or
(c) either on its own behalf or on behalf of any person, firm or
company directly or indirectly employ or engage or induce or
seek to induce to leave the service of the Purchaser any
person who at that date shall have been employed by the
Business.
7
<PAGE>
The parties agree that the benefit of the covenants and undertakings
given in this clause shall be assignable in whole or in part by the
Purchaser to, and become enforceable by, any company which is a
subsidiary or holding company of the Purchaser which from time to time
is the owner of the Business or any material part hereof.
After Completion, the Vendors shall not without the Purchaser's express
agreement and save as expressly contemplated by this Agreement hold
itself out as being interested in or in any way connected with the
Business or authorize any person to hold out the Vendors as being so
interested.
GENERAL PROVISIONS
Each party shall pay its own legal, accountancy and other costs,
charges and expenses incurred in connection with this Agreement,
This Agreement and the documents referred to in this Agreement
constitute the whole agreement between the parties in relation to the
subject matter covered. No oral explanation or oral information given
by any party shall alter the interpretation of this Agreement. It is
agreed that:
(a) no party has entered into this Agreement in reliance upon any
representation, warranty or undertaking which is not set out
or referred to in this Agreement;
(b) in the absence of fraud, no party will have any remedy in
respect of any untrue statement, made to it or its
representatives or agents, upon which it or they relied and
such party's only remedy will be for breach of contract; and
(c) this clause shall not exclude any liability for fraudulent
misrepresentation.
This Agreement and all documents supplemental thereto is governed by
and is to be construed in accordance with English law.
8
<PAGE>
SCHEDULE 1
EMPLOYEES
Basil Prestcott - UK
Jean Harler - USA
Mac MacDonald -- USA
9
<PAGE>
SCHEDULE 2
INTELLECTUAL PROPERTY
Telex Fax 400
Voice Access
Imps I
Imps II
10
<PAGE>
SCHEDULE 3
CONTRACTS
As per attached Deferred Income Schedules provided to The Purchaser during Due
Diligence.
11
<PAGE>
SCHEDULE 4
PLANT
1. 2 IBM AS/400's with connected IMPS units (one in Florida USA,
one in Kingston-upon-Thames, UK)
2. Replacement fax and telex boxes.
3. Connected AS/400 Printers.
4. IBM AS 400 for tape production (Boston, USA)
12
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ATTESTATIONS
SIGNED by )
For and on behalf of ) /s/ Glyn Davies
INTERNATIONAL PRESENCE PLC )
in the presence of: )
SIGNED by )
For and on behalf of ) /s/ Darioush Mardan
OMTOOL EUROPE LIMITED )
in the presence of: )
SIGNED by )
For and on behalf of ) /s/ Darioush Mardan
OMTOOL, LTD. )
in the presence of: )
</TABLE>
13
<PAGE>
Exhibit 99.1
OMTOOL, LTD. AND SUBSIDIAIRES
PRO FORMA CONSOLIDATED BALANCE SHEET
(unaudited)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA PRO FORMA
SEPTEMBER 30, 1999 ADJUSTMENTS SEPTEMBER 30, 1999
---------------------- ---------------- -----------------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................ $ 936,037 $(600,000)(a) $ 1,536,037
Short-term investments................................... 17,954,891 - 17,954,891
Accounts receivable, less reserves of $1,855,100 in 1999. 4,077,922 - 4,077,922
Prepaid expenses and other current assets................ 2,208,577 - 2,208,577
Income tax receivable.................................... 1,175,254 - 1,175,254
Deferred tax asset....................................... 697,000 - 697,000
---------------------- ---------------- -----------------------
Total current assets................................... 27,049,681 (600,000) 27,649,681
Property and equipment, net.............................. 1,789,121 65,046 (b) 1,724,075
Other assets, net........................................ 4,725,066 2,939,931 (b) 1,785,135
---------------------- ---------------- -----------------------
Total assets........................................... $33,563,868 $2,404,977 $31,158,891
====================== ================ =======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt........................ $ 27,981 $ - $ 27,981
Accounts payable......................................... 1,780,741 - 1,780,741
Accrued liabilities...................................... 1,509,776 - 1,509,776
Deferred revenue......................................... 3,127,884 - 3,127,884
---------------------- ---------------- -----------------------
Total current liabilities.............................. 6,446,382 - 6,446,382
Deferred tax liability...................................... 388,515 362,515 (b) 26,000
Long-term liabilities....................................... - - -
Contingencies
Stockholders' equity:
Preferred Stock, $.01 par value --
Authorized-- 2,000,000; issued and - - -
outstanding-- none.....................................
Common Stock, $.01 par value --
Authorized -- 35,000,000;
Issued - 13,009,372 in 1999 ........................... 130,093 - 130,093
Additional paid-in capital.................................. 32,222,116 - 32,222,116
Accumulated deficit......................................... (4,410,711) 2,042,462 (c) (6,453,173)
Treasury stock (422,625 shares at cost)..................... (1,209,418) - (1,209,418)
Cumulative translation adjustment........................... (3,109) - (3,109)
---------------------- ---------------- -----------------------
Total stockholders' equity............................. 26,728,971 2,042,462 24,686,509
---------------------- ---------------- -----------------------
Total liabilities and stockholders' equity............. $33,563,868 $2,404,977 $31,158,891
====================== ================ =======================
</TABLE>
<PAGE>
OMTOOL, LTD. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
NINE MONTHS NINE MONTHS
ENDED PRO FORMA ENDED
SEPTEMBER 30, 1999 ADJUSTMENTS SEPTEMBER 30, 1999
----------------- --------------- ------------------
<S> <C> <C> <C>
Revenues:
Software license............................................... $ 9,981,976 $ 720,754(d) $ 9,261,222
Hardware....................................................... 5,490,226 336,426(d) 5,153,800
Service and other.............................................. 5,548,267 940,624(d) 4,607,643
----------------- -------------- ------------------
Total revenues............................................... 21,020,469 1,997,804 19,022,665
----------------- -------------- ------------------
Cost of revenues:
Software license............................................... 768,257 29,063(d) 739,194
Hardware....................................................... 3,424,135 226,790(d) 3,197,345
Service and other.............................................. 2,709,043 124,143(d) 2,584,900
----------------- --------------- ------------------
Total cost of revenues....................................... 6,901,435 379,996 6,521,439
----------------- -------------- ------------------
Gross profit................................................. 14,119,034 1,617,808 12,501,226
----------------- -------------- ------------------
Operating expenses:
Sales and marketing............................................ 9,036,510 194,594(d) 8,841,916
Research and development....................................... 3,809,840 230,059(d) 3,579,781
General and administrative..................................... 4,121,872 938,873(d) 3,182,999
Restructuring costs............................................ 1,128,000 431,756(d) 696,244
----------------- --------------- ------------------
Total operating expenses..................................... 18,096,222 1,795,282 16,300,940
----------------- -------------- ------------------
Income (loss) from operations................................ (3,977,188) (177,474) (3,799,714)
Interest income, net........................................... 509,522 (15,619)(e) 525,141
-----------------------------------------------------
Income (loss) before provision (benefit) for income taxes.... (3,467,666) (193,093) (3,274,573)
Provision (benefit) for income taxes........................... (807,551) (40,776)(f) (766,775)
----------------- -------------- ------------------
Net income (loss) ........................................... $(2,660,115) $(152,317) $ (2,507,798)
================= =============== ==================
Net income (loss) per share:
Basic.......................................................... $(0.21) $(0.19)
================= ==================
Diluted........................................................ $(0.21) $(0.19)
================= ==================
Weighted average number of common shares outstanding:
Basic.......................................................... 12,603,780 12,603,780
================= ==================
Diluted........................................................ 12,603,780 12,603,780
================= ==================
</TABLE>
<PAGE>
OMTOOL, LTD. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
YEAR YEAR
ENDED PRO FORMA ENDED
DECEMBER 31, 1998 ADJUSTMENTS DECEMBER 31, 1998
================= =============== ==================
<S> <C> <C> <C>
Revenues:
Software license......................................... $18,542,007 $1,514,932(g) $17,027,075
Hardware................................................. 6,482,562 754,283(g) 5,728,279
Service and other........................................ 6,087,615 1,144,397(g) 4,943,218
----------- ---------- -----------
Total revenues......................................... 31,112,184 3,413,612 27,698,572
----------- ---------- -----------
Cost of revenues:
Software license......................................... 1,331,068 121,191(g) 1,209,877
Hardware................................................. 3,925,421 430,631(g) 3,494,790
Service and other........................................ 2,950,718 355,932(g) 2,594,786
----------- ---------- -----------
Total cost of revenues 8,207,207 907,754 7,299,453
----------- ---------- -----------
Gross profit........................................... 22,904,977 2,505,858 20,399,119
----------- ---------- -----------
Operating expenses:
Sales and marketing...................................... 12,340,919 507,456(g) 11,833,463
Research and development................................. 5,058,579 390,906(g) 4,667,673
General and administrative............................... 4,755,179 1,538,890(g) 3,216,289
----------- ---------- -----------
Total operating expenses............................... 22,154,677 2,437,252 19,717,425
----------- ---------- -----------
Income (loss) from operations.......................... 750,300 68,606 681,694
Interest income, net........................................ 753,887 (21,418)(h) 775,305
------------ ----------- -----------
Income (loss) before provision for income taxes........ 1,504,187 47,188 1,456,999
Provision for income taxes.................................. 406,435 19,525(j) 386,910
----------- ----------- -----------
Net income (loss)........................................ $ 1,097,752 $ 27,663 $1,070,089
=========== ========== ===========
Net income (loss) per share:
Basic.................................................... $0.09 $0.08
=========== ===========
Diluted.................................................. $0.08 $0.08
=========== ===========
Weighted average number of common shares outstanding:
Basic.................................................... 12,713,169 12,713,169
=========== ===========
Diluted.................................................. 13,414,958 13,414,958
=========== ===========
</TABLE>
<PAGE>
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1999 AND
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED
DECEMBER 31, 1998 AND THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(UNAUDITED)
Note (1) Pro Forma Balance Sheet Adjustments
On January 4, 2000, pursuant to an Agreement for the Sale and Purchase of
Certain Business and Assets between International Presence PLC ("IPP") and
Omtool Europe Limited ("Omtool Europe"), and Omtool, Ltd. (collectively with
Omtool Europe, "Omtool"), Omtool sold to IPP certain business assets
consisting of intellectual property, goodwill, customer lists, customer
contracts, equipment and other assets related to the Company's software
products and third party hardware products for facsimile and other
communications applications for the IBM AS/400 product line (the "AS/400
Assets").
The following pro forma adjustments are required to reflect the Omtool's sale
of the AS/400 Assets to IPP as of September 30, 1999 (the balance sheet date).
<TABLE>
<CAPTION>
Net Amount
----------
<S> <C>
(a) To account for Omtool's net cash received from the sale of the AS/400 Assets to IPP. $600,000
(b) To eliminate the AS/400 Assets.
(c) To reflect the loss on the sale of the AS/400 Assets as follows:
Net proceeds to be received by Omtool $600,000
Less: Value of net assets purchased by IPP (2,642,462)
-----------
$(2,042,462)
</TABLE>
Note (2) Pro Forma Statements of Operations Adjustments
The following pro forma adjustments are required to reflect the pro forma
consolidated statements of operations as a result of the Omtool's sale of the
AS/400 Assets for the periods ended December 31, 1998 and September 30, 1999.
For purposes of the pro forma statements of operations, it is assumed that
the sale of the AS/400 Assets occurred on December 31, 1997 so that the
statements of operations would only include results from continuing
operations.
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1999
------------------
<S> <C>
(d) To eliminate the effects of the AS/400 operations on the consolidated statement
of operations for the nine months ended September 30, 1999.
(e) Total interest income increase for Omtool due to the sale of the AS/400 Assets to IPP. $15,619
(f) Income tax benefit. $40,776
</TABLE>
<TABLE>
<CAPTION>
Year Ended
December 31, 1998
-----------------
<S> <C>
(g) To eliminate the effects of the AS/400 operations on the consolidated
statement of operations for the year ended December 31, 1998.
(h) Total interest income increase for Omtool due to the sale of the AS/400 Assets to IPP $21,418
(i) Income tax benefit. $19,525
</TABLE>
