SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): December 13, 1999
CADAPULT GRAPHIC SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-21853 87-0475073
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
110 Commerce Drive, Allendale, New Jersey 07401
(Address of principal executive offices)
Registrant's telephone number, including area code: (201) 236-1100
Not applicable
(Former name or former address, if changed since last report.)
1
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
On December 20, 1999, Cadapult Graphic Systems, Inc. submitted a Form 8-K
describing the acquisition of ultraHue, Inc., a New Mexico corporation.
Certain financial statements for the acquired business and pro forma financial
information that were not available at the time of the initial filing on Form
8-K are provided in this Form 8-K/A.
(a) Financial Statements of Businesses Acquired.
Independent Auditor's Report
Balance Sheets for the Nine Months Ended September 30, 1999 and
the Year Ended December 31, 1998
Statement of Income and Retained Earnings for the Nine Months
Ended September 30, 1999 and the Year Ended December 31, 1998
Statement of Cash Flows for the Nine Months Ended September 30, 1999
and the Year Ended December 31, 1998
Notes to Financial Statements
(b) Pro Forma Financial Information.
Pro Forma Financial Data
Pro Forma Consolidated Statement of Operations for the Year Ended
June 30, 1999 (Unaudited)
Notes to Unaudited Pro Forma Statement of Operations
Pro Forma Consolidated Statement of Operations for the Acquisition
for the Six Months Ended December 31, 1999 (Unaudited)
Notes to Unaudited Pro Forma Statement of Operations for the
Acquisition
2
<PAGE>
INDEX TO ULTRAHUE, INC. FINANCIAL REPORT, SEPTEMBER 30, 1999
Independent Auditor's Report F1-2
Balance Sheets for the Nine Months Ended September 30, 1999 and F1-3
the Year Ended December 31, 1998
Statement of Income and Retained Earnings for the Nine Months F1-4
Ended September 30, 1999 and the Year Ended December 31, 1998
Statement of Cash Flows for the Nine Months Ended September 30, 1999 F1-5
and the Year Ended December 31, 1998
Notes to Financial Statements F1-6
F1-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Stockholders of UltraHue, Inc.
We have audited the accompanying balance sheets of UltraHue, Inc. as of
September 30, 1999 and December 31, 1998 and the related statements of income
and retained earnings and cash flows for the nine months ended September 30,
1999 and the year ended December 31, 1998. 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 audits.
We conducted our audits 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 audits provide 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 UltraHue, Inc. at September
30, 1999 and December 31, 1998, and the results of its operations and its
cash flows for the periods indicated above in conformity with generally
accepted accounting principles.
/s/ Wiss & Company, LLP
WISS & COMPANY, LLP
Livingston, New Jersey
January 20, 2000
F1-2
<PAGE>
ULTRAHUE, INC.
BALANCE SHEETS
<TABLE>
Nine Months
Ended Year Ended
September 30, December 31,
ASSETS 1999 1998
------------- -------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 185,023 $ 40,100
Accounts receivable, net of allowance for
doubtful accounts of $5,000 in 1999 397,998 245,607
Inventories 116,665 14,705
Advances to officers - 32,669
Prepaid rent 6,600 -
------------- -------------
Total Current Assets 706,286 333,081
PROPERTY AND EQUIPMENT, NET 29,969 8,777
SECURITY DEPOSIT 1,162 -
------------- -------------
$ 737,417 $ 341,858
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of capital lease obligation $ 2,214 $ -
Accounts payable 21,701 5,550
Accrued expenses 15,610 1,364
------------- -------------
Total Current Liabilities 39,525 6,914
------------- -------------
CAPITAL LEASE OBLIGATION, LESS CURRENT MATURITIES 10,826 -
------------- -------------
COMMITMENTS
STOCKHOLDERS' EQUITY
Common stock, $1.00 par value 30,000 shares authorized,
2,000 shares issued and outstanding 2,000 2,000
Retained earnings 685,066 332,944
------------- -------------
Total Stockholders' Equity 687,066 334,944
------------- -------------
$ 737,417 $ 341,858
============= =============
</TABLE>
See accompanying notes to financial statements.
F1-3
<PAGE>
ULTRAHUE, INC.
STATEMENTS OF INCOME AND RETAINED EARNINGS
<TABLE>
Nine Months
Ended Year Ended
September 30, December 31,
1999 1998
------------- -------------
<S> <C> <C>
NET SALES $ 2,144,283 $ 1,093,677
COST OF GOODS SOLD 554,369 306,542
------------- -------------
GROSS PROFIT 1,589,914 787,135
OPERATING EXPENSES 464,581 329,836
------------- -------------
INCOME FROM OPERATIONS 1,125,333 457,299
INTEREST EXPENSE 542 -
------------- -------------
NET INCOME 1,124,791 457,299
RETAINED EARNINGS, BEGINNING OF PERIOD 332,944 3,645
DISTRIBUTIONS (772,669) (128,000)
------------- -------------
RETAINED EARNINGS, END OF PERIOD $ 685,066 $ 332,944
============= =============
</TABLE>
See accompanying notes to financial statements.
F1-4
<PAGE>
ULTRAHUE, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
Nine Months
Ended Year Ended
September 30, December 31,
1999 1998
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,124,791 $ 457,299
Adjustments to reconcile net income to net cash
flows from operating activities:
Depreciation 5,559 20,757
Provision for bad debts 5,000 -
Changes in operating assets and liabilities:
Accounts receivable (157,391) (227,632)
Inventories (101,960) (11,316)
Prepaid rent (6,600) -
Security deposits (1,162) -
Accrued expenses 14,246 1,364
Accounts payable 16,151 5,183
------------- -------------
Net cash flows from operating activities 898,634 245,655
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (13,030) (28,963)
Advances to officers 32,669 (32,669)
------------- -------------
Net cash flows from investing activities 19,639 (61,632)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions (772,669) (128,000)
Stockholder loans - (37,354)
Capital lease (681) -
------------- -------------
Net cash flows from financing activities (773,350) (165,354)
------------- -------------
NET CHANGE IN CASH 144,923 18,669
CASH, BEGINNING OF PERIOD 40,100 21,431
------------- -------------
CASH, END OF PERIOD $ 185,023 $ 40,100
============= =============
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 542 $ -
============= =============
Income taxes paid $ - $ -
============= =============
Noncash financing and investing activity -
Equipment addition by capital lease $ 13,721 $ -
============= =============
</TABLE>
See accompanying notes to financial statements.
F1-5
<PAGE>
ULTRAHUE, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:
Nature of the Business - UltraHue, Inc. ("UltraHue") is a manufacturer
of solid ink and a distributor of transparencies and toner cartridges for
Tektronix color printers. It's manufacturing facility is located near
Albuquerque, New Mexico and its corporate office is located in Redmond,
Washington.
Estimates and Uncertainties - 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 the reported amounts of revenues
and expenses during the reporting period. Actual results, as determined at a
later date, could differ from those estimates.
Concentration of Credit/Sales Risk - The Company maintains its cash
balances in a financial institution which is insured by the Federal Deposit
Insurance Corporation up to $100,000. At September 30, 1999, the Company has
an uninsured balance, including outstanding checks, totalling approximately
$140,000.
Sales to one customer and two customers comprised approximately 37% in
1999 and 46% in 1998, of the Company's net sales.
Concentration of credit risk with respect to other trade customers is
limited due to the large number of customers.
The Company periodically reviews its trade receivables and if
necessary, establishes an allowance for uncollectible accounts. Management
feels the credit risk beyond the established allowance, if any, is limited.
Inventories - Inventories are stated at the lower of cost (first-in,
first-out method) or market.
Property, Plant and Equipment - Property and equipment are stated at
cost. For financial reporting purposes, the Company provides for
depreciation generally on an accelerated method by charges to income at rates
based upon the estimated recovery periods of 5 to 7 years.
The Company capitalizes, for financial reporting purposes, leased
equipment where the term of the lease results in the transfer to the Company
of substantially all of the benefits and risks of ownership.
Income Taxes - The Company elected under Section 1361 of the Internal
Revenue Code and under New Mexico corporate statues to be taxed as an S
Corporation. Under these provisions, all earnings and losses of the Company
for federal and New Mexico income tax reporting purposes are reported on the
income tax returns of the shareholders. Accordingly, no provisions have been
made for federal or state income taxes. Washington has no state income
taxes.
F1-6
<PAGE>
ULTRAHUE, INC.
NOTES TO FINANCIAL STATEMENTS
Change in Fiscal Year - The Company elected to change from a December 31 to
September 30, fiscal year. Therefore, the accompanying financial statements
include transitional financial statements for the nine months ended September
30, 1999. Unaudited financial data for the nine months ended September 30,
1998 follow which is the corresponding period of the preceding fiscal year.
There were no seasonal factors that affect the comparability of information
or trends reflected.
Net sales $579,717
========
Gross profit $322,159
========
Net income $126,640
========
NOTE 2 - INVENTORIES:
Inventories include the following:
September 30, December 31,
1999 1998
------------- ------------
Raw materials $ 25,382 $ 14,705
Finished goods 91,283 -
------------- ------------
$ 116,665 $ 14,705
NOTE 3 - PROPERTY AND EQUIPMENT:
Property and equipment are summarized as follows:
September 30, December 31,
1999 1998
------------- ------------
Computer equipment $ 37,227 $ 25,739
Furniture and fixtures 5,750 4,208
Machinery and equipment 16,650 2,929
------------- ------------
59,627 32,876
Less: Accumulated depreciation 29,658 24,099
------------- ------------
$ 29,969 $ 8,777
============= ============
NOTE 4 - LEASES:
The Company's machinery and equipment under a capital lease, which is
included in property and equipment, totalled $13,721 less accumulated
depreciation of $2,058.
F1-7
<PAGE>
ULTRAHUE, INC.
NOTES TO FINANCIAL STATEMENTS
Future minimum rental payments required for the capital lease at
September 30, 1999 are as follows:
Year Ending September 30,
-------------------------
2000 $ 3,669
2001 3,669
2002 3,669
2003 3,669
2004 2,446
----------
Total future minimum lease payments 17,122
Less: Amount representing interest 4,082
Present value of minimum lease payments 13,040
Less: Current maturities 2,214
----------
Non-current $ 10,826
==========
The Company leases its office facility on a month-to-month basis for
$2,200 per month and its New Mexico operating facility under a non-
cancellable operating lease which requires monthly payments of $1,350
expiring on June 30, 2000.
Rent expense for operating leases in 1999 and 1998 was $20,381 and
$15,411.
NOTE 5 - SUBSEQUENT EVENT:
On December 13, 1999, the Company sold substantially all of its assets,
subject to its liabilities, for $4,056,473, to Cadapult Graphic Systems, Inc.
("Cadapult") collectible as follows:
Cash $2,340,000
Note receivable 1,160,000
Due from Cadapult 556,473
==========
$4,056,473
The note receivable bears interest at the rate of 7% per annum and is
due on December 13, 2000.
Due from Cadapult is collectible as Cadapult liquidates the receivables
and inventories purchased and satisfies the payables assumed.
F1-8
<PAGE>
INDEX TO PRO FORMA FINANCIAL DATA
Pro Forma Financial Data F2-2
Pro Forma Consolidated Statement of Operations for the Year Ended F2-3
June 30, 1999 (Unaudited)
Notes to Unaudited Pro Forma Statement of Operations F2-4
Pro Forma Consolidated Statement of Operations for the Acquisition F2-5
for the Six Months Ended December 31, 1999 (Unaudited)
Notes to Unaudited Pro Forma Statement of Operations for the F2-6
Acquisition
F2-1
<PAGE>
PROFORMA FINANCIAL DATA
Set forth below are two sets of pro forma financial information and
related notes. The first set presents pro forma financial information for
the acquisitions that Cadapult consummated in fiscal 1999 and the acquisition
of certain assets and its assumption of certain liabilities from ultraHue,
Inc. on December 13, 1999 (the "Acquisitions"). This set includes an
unaudited pro forma consolidated statement of operations of Cadapult for the
year ended June 30, 1999 giving effect to the Acquisitions as if they had
occurred on July 1, 1998 (see Note 1 of Notes to Unaudited Pro Forma
Statement of Operations).
The second set presents pro forma financial information which reflects
the acquisition of certain assets and the assumption of certain liabilities
from ultraHue, Inc. This set includes an unaudited pro forma consolidated
statement of operations of Cadapult for the six month period ended December
31, 1999, giving effect to the Acquisition of ultraHue that Cadapult
consummated on December 13, 1999 as if it had occurred on July 1, 1998.
This pro forma financial information is based on the estimates and
assumptions set forth herein and in the notes thereto and has been prepared
utilizing the financial statements and notes thereto appearing elsewhere in
this prospectus.
The following unaudited pro forma financial information is presented
for informational purposes only and is not necessarily indicative of (i) the
results of operations of Cadapult that actually would have occurred had the
Acquisitions been consummated on the dates indicated or (ii) the results of
operations of Cadapult that may occur or be attained in the future. The
following information is qualified in its entirety by reference to and should
be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and Cadapult's financial
statements, including the notes thereto, and the other historical financial
information appearing elsewhere herein.
F2-2
<PAGE>
CADAPULT GRPHIC SYSTEMS, INC.
PRO FORMA STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1999
(Unaudited)
<TABLE>
Historical Tartan WEB ultraHue Adjustments Pro Forma
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
NET SALES $ 10,227,628 $ 1,365,939 $ 2,656,755 $ 1,093,677 $ (51,000) $ 15,292,999
------------ ------------ ------------ ------------ ------------ ------------
COSTS AND EXPENSES:
Cost of sales 7,442,239 1,089,846 2,186,736 306,542 (51,000) 10,974,363
Selling, general and
administrative expenses 3,069,682 341,792 461,154 329,836 269,894 4,472,358
------------ ------------ ------------ ------------ ------------ ------------
10,511,921 1,431,638 2,647,890 636,378 218,894 15,446,721
------------ ------------ ------------ ------------ ------------ ------------
OPERATING INCOME (LOSS) (284,293) (65,699) 8,865 457,299 (269,894) (153,722)
------------ ------------ ------------ ------------ ------------ ------------
OTHER EXPENSE:
Interest expense, net 160,081 13,765 6,583 - - 180,429
Loss on sale of equipment - 3,369 - - - 3,369
------------ ------------ ------------ ------------ ------------ ------------
160,081 17,134 6,583 - - 183,798
------------ ------------ ------------ ------------ ------------ ------------
INCOME (LOSS) BEFORE
INCOME TAXES (CREDITS) (444,374) (82,833) 2,282 457,299 (269,894) (337,520)
------------ ------------ ------------ ------------ ------------ ------------
INCOME TAXES (CREDITS): - - - - - -
------------ ------------ ------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (444,374) $ (82,833) $ 2,282 $ 457,299 $ (269,894) $ (337,520)
============ ============ ============ ============ ============ ============
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 2,844,819 - - - 131,843 2,976,662
============ ============ ============ ============ ============ ============
NET LOSS PER SHARE OF
COMMON STOCK $ (.16) $ (.11)
============ ============
</TABLE>
See the accompanying notes to pro forma financial statements.
F2-3
<PAGE>
CADAPULT GRAPHIC SYSTEMS, INC.
NOTES TO UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
NOTE 1 - ACQUISITIONS:
On January 7, 1999, Cadapult acquired certain assets and assumed
certain liabilities of Tartan Technical, Inc. ("Tartan"), a Massachusetts
corporation for 185,700 shares of the registrant's common stock. Currently,
92,850 of these shares are held in escrow pursuant to the resolution of a
contingency based on Tartan achieving certain gross profit levels over the
next two years. On June 18, 1999, Cadapult acquired certain assets and
assumed certain liabilities of WEB Associates, Inc. ("WEB") a Pennsylvania
Corporation for $242,200 in cash and 172,380 shares of the registrant's
common stock. Currently 86,190 of theses shares are held in escrow pursuant
to the resolution of a contingency based on WEB achieving certain gross
profit levels over the next two years. On December 13, 1999, Media Sciences,
Inc. ("Media Sciences"), a wholly-owned subsidiary of Cadapult, completed the
acquisition of certain assets and the assumption of certain liabilities of
ultraHue, Inc. for $2,340,000 in cash, a note payable for $1,160,000 bearing
interest at 7% per annum due on the first anniversary of the closing and
$556,473 due to ultraHue as Cadapult liquidates receivables and inventory
purchased and satisfies the payables assumed. Each acquisition was accounted
for under the purchase method of accounting. Under the purchase method of
accounting, the results of operations of an acquired entity are included in
Cadapult's historical financial statements from its acquisition date.
Acquired assets and assumed liabilities have been recorded based on their
fair market value as of the date of acquisition with the excess of the
purchase price over the fair value of the net assets acquired allocated to
goodwill. The financial information of Tartan and WEB reflect the results of
operations of each entity for the interim period from July 1, 1998 to the
date of acquisition. The financial information of ultraHue reflects the
results of operations for the year ended December 31, 1998.
NOTE 2 - PRESENTATION AND PRO FORMA ADJUSTMENTS:
The unaudited pro forma condensed statements of operations for the year
ended June 30, 1999 presented above have been prepared as if the Acquisitions
had been consummated as of July 1, 1998.
Pro forma adjustments have been made for the following:
a) Amortization expense adjustments to reflect amortization of
goodwill over a 15-year period at $27,512 per year for
Tartan and WEB and $234,000 for ultraHue.
b) Depreciation expense adjustments to reflect increased
depreciation over a three year period for the fair value of
fixed assets acquired over book value at $26,648 per year
for Tartan and WEB and $4,000 per year for ultraHue.
c) To eliminate intercompany sales.
NOTE 3 - NET LOSS PER SHARE:
Pro forma net loss per share is calculated by treating all shares of
Common Stock issued to Tartan and WEB as outstanding for the entire year.
The 179,040 shares in escrow will not be included in basic loss per share
until the contingency is resolved. The contingent shares are not required to
be included in the calculation of diluted loss per share until the
contingency is resolved.
F2-4
<PAGE>
CADAPULT GRAPHIC SYSTEMS, INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE ACQUISITION
SIX MONTHS ENDED DECEMBER 31, 1999
(Unaudited)
<TABLE>
Historical ultraHue Adjustments Pro Forma
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET SALES $ 6,110,569 $ 1,403,555 $ (141,000)h $ 7,373,124
----------- ----------- ----------- -----------
COSTS AND EXPENSES:
Cost of sales 4,307,054 350,621 (141,000)h 4,516,675
Selling, general and administrative 1,910,236 486,294 108,000 2,504,530
----------- ----------- ----------- -----------
6,217,290 836,915 (33,000) 7,021,205
----------- ----------- ----------- -----------
OPERATING INCOME (LOSS) (106,721) 566,640 (108,000) 351,919
----------- ----------- ----------- -----------
OTHER EXPENSE (INCOME):
Interest expense, net 118,481 - 29,000 g 147,481
Other income - - - -
----------- ----------- ----------- -----------
118,481 - 29,000 147,481
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME
TAXES (CREDITS) (225,202) 566,640 (137,000) 204,438
INCOME TAXES (CREDITS) (307,000) - 172,000 e (135,000)
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 81,798 $ 566,640 $ (309,000) $ 339,438
=========== =========== =========== ===========
PREFERRED STOCK DIVIDENDS $ 20,112 $ - $ 221,388 $ 241,500
=========== =========== =========== ===========
INCOME (LOSS) APPLICABLE TO
COMMON SHAREHOLDERS $ 61,686 $ 566,640 $ (530,388) $ 97,938
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING:
Basic 3,166,114 3,166,114
=========== ===========
Diluted 3,278,655 3,278,655
=========== ===========
NET INCOME PER SHARE
OF COMMON STOCK:
Basic $ .02 $ .03
=========== ===========
Diluted $ .02 $ .03
=========== ===========
</TABLE>
See the accompanying notes to pro forma financial statements.
F2-5
<PAGE>
CADAPULT GRAPHIC SYSTEMS, INC.
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
REFLECTING THE ACQUISITION
NOTE A - On December 13, 1999, Media Science, Inc. ("Media Sciences"), a
wholly-owned subsidiary of Cadapult, completed the acquisition of certain
assets and the assumption of certain liabilities of ultraHue, Inc. for
$2,340,000 in cash and a note payable for $1,160,000 bearing interest at 7%
per annum due on the first anniversary of the closing.
NOTE B - The acquisition was accounted for under the purchase method of
accounting. Under the purchase method of accounting, the results of
operations of an acquired entity are included in Cadapult's historical
consolidated financial statements from its acquisition date. Under that
method of accounting, the acquired assets are included based on an allocation
of their aggregate purchase price as of their date of acquisition.
The unaudited pro forma statement of operations for the six month period
ended December 31, 1999 has been prepared as if the Acquisition had been
consummated as of July 1, 1998.
Cadapult acquired the operations and equipment of ultraHue. Cash of the
acquired business will remain the property of the seller. Accounts
receivable, inventory and accounts payable will be liquidated by Cadapult and
paid to the Seller. The net equity of ultraHue has been eliminated in
combination.
NOTE C - The purchase price of the Acquisition was $3,500,000, plus
estimated costs of acquisition of approximately $60,000. An estimated
allocation of the purchase price is as follows:
Equipment $ 50,000
Goodwill 3,510,000
----------
$3,560,000
----------
Goodwill will be amortized over 15 years at a rate of $234,000 per year.
NOTE D - Cadapult financed the Acquisition through the use of proceeds from
a private placement of its preferred stock ("the Offering"). The Offering is
on a "best efforts" basis with $5,500,000 the maximum amount. For purposes
of this pro forma financial information, the actual gross proceeds from the
Offering that has thus far been raised is $4,200,000, based on the sale of
420,000 Units at $10.00 per Unit. Expenses of the Offering are estimated to
be $630,000. The estimated net proceeds to Cadapult of $3,570,000 was and
will be used to acquire ultraHue ($2,400,000), finance the No-cap Color
Program ($1,000,000) and to reduce note payable to bank ($170,000).
NOTE E - Income taxes (credits) is a result of the elimination of a
valuation allowance of $307,000 offset by a required tax provision of
$172,000.
F2-6
<PAGE>
CADAPULT GRAPHIC SYSTEMS, INC.
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
REFLECTING THE ACQUISITION
NOTE F - Basic earnings (loss) per common share was calculated by dividing
net income (loss) applicable to common shareholders by the weighted average
number of common shares outstanding during the period. Diluted earnings per
share was calculated by dividing net income by the sum of the weighted
average number of common shares outstanding plus all additional common shares
that would have been outstanding if potentially dilutive securities or common
stock equivalents had been issued. For purposes of diluting earnings per
share, conversion of the Series A Preferred Stock is not assumed as the
effect is anti-dilutive. The dilutive effect of outstanding stock options
and warrants issued by Cadapult is reflected by application of the treasury
stock method.
NOTE G - Pro forma interest expense is increased by $37,000 to account for
7% annual interest on the ultraHue note. Interest expense has also been
reduced by $8,000 for the payoff of $170,000 on the note payable to bank from
the net proceeds of the Offering.
NOTE H - The pro forma statement of operations has been adjusted to
eliminate intercompany sales totalling $141,000 for the period from July 1,
1999 to December 13, 1999.
F2-7
<PAGE>
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.
CADAPULT GRAPHIC SYSTEMS, INC.
Date: February 9, 2000 By: /s/ Michael W. Levin
---------------------------
Michael W. Levin, President
Date: February 9, 2000 By: /s/ Frances Blanco
---------------------------
Frances Blanco, Secretary
