ELECTRONIC PROCESSING INC
SB-2/A, 1997-01-29
COMPUTER PROGRAMMING SERVICES
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<PAGE>
   
    AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 29, 1997
    
 
                                                      REGISTRATION NO. 333-16805
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                           --------------------------
 
   
                                AMENDMENT NO. 2
                                       TO
                                   FORM SB-2
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
    
                            ------------------------
                          ELECTRONIC PROCESSING, INC.
                 (Name of small business issuer in its charter)
 
<TABLE>
<S>                            <C>                            <C>
          MISSOURI                         7389                        48-1056429
(State or Other Jurisdiction   (Primary Standard Industrial         (I.R.S. Employer
             of                   Classification Number)           Identification No.)
      Incorporation or
        Organization)
     Identification No.)
</TABLE>
 
                               501 KANSAS AVENUE
                           KANSAS CITY, KANSAS 66105
                                 (913) 321-6392
         (Address and telephone number of principal executive offices)
 
                                 TOM W. OLOFSON
                CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
                               501 KANSAS AVENUE
                           KANSAS CITY, KANSAS 66105
                                 (913) 321-6392
 (Name, address, including zip code, and telephone number of agent for service)
                           --------------------------
 
                        COPIES OF ALL COMMUNICATIONS TO:
 
<TABLE>
<S>                                   <C>                                    <C>
       LEE R. PETILLON, ESQ.                  ROBERT C. LEVY, ESQ.                  MELODIE R. ROSE, ESQ.
       MARK T. HIRAIDE, ESQ.           SEIGFREID, BINGHAM, LEVY, SELZER &      WILLIAM K. SJOSTROM, JR., ESQ.
         PETILLON & HANSEN                             GEE                        FREDRIKSON & BYRON, P.A.
  21515 HAWTHORNE BOULEVARD, SUITE             2800 COMMERCE TOWER                 900 SECOND AVENUE SOUTH
                1260                             911 MAIN STREET                  1100 INTERNATIONAL CENTRE
     TORRANCE, CALIFORNIA 90503            KANSAS CITY, MISSOURI 64105          MINNEAPOLIS, MINNESOTA 55402
           (310) 543-0500                        (816) 421-4460                        (612) 347-7000
</TABLE>
 
        APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
   As soon as practicable after the Registration Statement becomes effective.
 
    If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering.  / /
 
    If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.  / /
 
    If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box.  / /
                           --------------------------
 
                        CALCULATION OF REGISTRATION FEE
 
<TABLE>
<CAPTION>
                                                                            PROPOSED MAXIMUM
                                                          PROPOSED MAXIMUM     AGGREGATE         AMOUNT OF
       TITLES OF EACH CLASS OF            AMOUNT TO BE     OFFERING PRICE       OFFERING        REGISTRATION
     SECURITIES TO BE REGISTERED         REGISTERED (1)   PER SECURITY (2)     PRICE (2)            FEE
<S>                                     <C>               <C>               <C>               <C>
Common Stock, $0.01 par value.........     1,840,000           $3.75           $6,900,000          $2,091
Underwriter's warrant (3).............      160,000            $50.00             $50                --
Total.................................     2,000,000                           $6,900,050          $2,091
</TABLE>
 
(1) Includes 240,000 shares of Common Stock which may be purchased by the
    Underwriter to cover over-allotments, if any.
(2) Estimated solely for purposes of calculating the registration fee pursuant
    to Rule 457 under the Securities Act of 1933.
(3) To be issued to the Underwriter.
 
    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION (THE
"COMMISSION"), ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
 
- --------------------------------------------------------------------------------
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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
   
                 SUBJECT TO COMPLETION, DATED JANUARY 29, 1997
                                1,600,000 SHARES
    
 
                                     [LOGO]
 
                                  COMMON STOCK
 
    Electronic Processing, Inc. ("EPI" or the "Company") is offering hereby
1,600,000 shares of Common Stock. Prior to this offering (the "Offering"), there
has been no public market for the Common Stock of the Company. It is currently
estimated that the initial public offering price per share will be between $3.25
and $3.75. See "Underwriting" for a discussion of the factors considered in
determining the initial public offering price. The Company has applied to have
the Common Stock approved for inclusion in the Nasdaq SmallCap Market-TM- under
the proposed symbol "EPIQ."
                            ------------------------
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK AND IMMEDIATE
   SUBSTANTIAL DILUTION. SEE "RISK FACTORS"      BEGINNING OF PAGE 6 AND
                             "DILUTION" ON PAGE 11.
                             ---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
 EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
  AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
     ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY  REPRESENTATION TO THE
                        CONTRARY IS A CRIMINAL OFFENSE.
 
<TABLE>
<CAPTION>
                                                         UNDERWRITING        PROCEEDS TO
                                     PRICE TO PUBLIC     DISCOUNT (1)        COMPANY (2)
<S>                                 <C>                <C>                <C>
Per Share.........................          $                  $                  $
Total (3).........................          $                  $                  $
</TABLE>
 
(1) Does not reflect additional compensation to be received by R. J. Steichen &
    Company (the "Underwriter"), in the form of (i) a nonaccountable expense
    allowance equal to 3% of the total Price to Public; and (ii) a warrant to
    purchase up to 160,000 shares of Common Stock at a per share price of 120%
    of the initial offering price, exercisable for a period of four years
    commencing one year from the date of this Prospectus (the "Underwriter's
    Warrant"). In addition, the Company has agreed to indemnify the Underwriter
    against certain liabilities. See "Underwriting."
 
(2) Before deducting expenses of the Offering payable by the Company estimated
    at $485,000 which includes the nonaccountable expense allowance described in
    Note 1 above.
 
(3) The Company has granted to the Underwriter a 45-day option to purchase up to
    240,000 additional shares of Common Stock on the same terms as set forth
    above solely to cover over-allotments, if any. If the Underwriter exercises
    such option in full, the total price to the public will be       , the total
    underwriting discount will be       , and the total proceeds to the Company
    will be       . See "Underwriting."
 
    The shares of Common Stock are offered by the Underwriter named herein on a
"firm commitment" basis, subject to prior sale, when, as and if delivered to and
accepted by it and subject to certain other conditions, including its right to
reject any order in whole or in part. It is expected that delivery of
certificates representing the Common Stock will be made against payment therefor
on or about                 , 1997 in Minneapolis, Minnesota.
 
                             RJ STEICHEN & COMPANY
 
              THE DATE OF THIS PROSPECTUS IS                , 1997
<PAGE>
                                 [PHOTOGRAPHS]
 
GRAPHIC ENTITLED "ADVANCED BANKRUPTCY MANAGEMENT SYSTEMS" DEPICTING CERTAIN
FEATURES OF THE COMPANY'S TCMS PRODUCT: CREDITOR DISTRIBUTION, ELECTRONIC
BANKING, ASSET IMAGING, GOVERNMENT REPORTING, AND ELECTRONIC COURT INTERFACE. A
SEPARATE EMBEDDED GRAPHIC ENTITLED "REVENUE STRUCTURE" DEPICTS THE FOLLOWING:
"EPI LICENSES SOFTWARE AND HARDWARE TO TRUSTEE END-USER; TRUSTEE END-USER
DEPOSITS ASSET PROCEEDS TO PARTNERSHIP BANK; AND PARTNERSHIP BANK; AND
PARTNERSHIP BANK PAYS EPI MONTHLY FEE."
 
                                       2
<PAGE>
                               PROSPECTUS SUMMARY
 
    THE FOLLOWING SUMMARY IS QUALIFIED BY THE MORE DETAILED INFORMATION AND
FINANCIAL STATEMENTS AND THE RELATED NOTES THERETO APPEARING ELSEWHERE IN THIS
PROSPECTUS (THE "PROSPECTUS"). ALL INFORMATION CONCERNING THE COMPANY'S
AUTHORIZED, ISSUED AND OUTSTANDING COMMON STOCK AND ALL FINANCIAL INFORMATION
PRESENTED ON A PER SHARE BASIS REFLECT A SIX-FOR-ONE STOCK SPLIT EFFECTIVE,
THROUGH A STOCK DIVIDEND, AS OF NOVEMBER 4, 1996. UNLESS OTHERWISE INDICATED,
THE INFORMATION IN THIS PROSPECTUS ASSUMES NO EXERCISE OF THE UNDERWRITER'S
OPTION TO PURCHASE FROM THE COMPANY UP TO 240,000 SHARES OF COMMON STOCK TO
COVER OVERALLOTMENTS, IF ANY.
 
                                  THE COMPANY
 
    Electronic Processing, Inc. ("EPI" or the "Company") serves a national
client base with specialty products that facilitate financial and administrative
aspects of bankruptcy management, including legal noticing, claims management,
funds distribution and government reporting. The Company develops, markets,
licenses and supports internally developed and proprietary software products
primarily to trustees under Chapter 7 and Chapter 13 of the Bankruptcy Code of
1978, as amended (the "Bankruptcy Code"), as well as to other users of the
federal bankruptcy system, including trustees in Chapter 11 and Chapter 12. EPI
assimilates software development, network operations, value-added services and
comprehensive post-installation support into an integrated environment that
offers clients a high level of coordinated support. Between 1993 and 1996, the
Company recruited a new operating management team to develop new products and
enter new markets.
 
    Insolvency is an ever-present, integral part of the national economy, and
the Company's revenues increase as the number of cases processed by EPI's
software grows. The last two years have experienced the greatest increase in the
rate of bankruptcy filings in a decade. Industry analysts reported that
bankruptcy filings topped the one million mark for the first time in 1996. The
Company estimates that there are approximately 550,000 active cases pending in
Chapter 13 and approximately $2 billion on deposit from Chapter 7 liquidations.
Bankruptcy proceedings encompass Chapter 7 (liquidation), Chapter 13 (individual
reorganization), Chapter 11 (business reorganization) and Chapter 12 (farm
reorganization).
 
    NationsBank, the fourth largest national banking company, has entered into
an exclusive national marketing arrangement with EPI to promote an integrated
package of banking services and the Company's software. In this strategic
alliance, the Company licenses its proprietary TCMS (Trustee Case Management
System) software to Chapter 7 trustees, who in turn deposit with NationsBank all
cash proceeds from asset sales. These funds are commonly on deposit for several
years. EPI receives a monthly percentage of the total of such deposits from
NationsBank. TCMS is a Windows95-Registered Trademark-/Windows NT
4-Registered Trademark- application and features custom electronic banking
features, court interface functions, and case management tools that were
developed by the Company.
 
    In late 1996, the Company completed testing of CASEPOWER, a new
Windows95/Windows NT 4 product. The Company plans to begin marketing this
product directly to Chapter 13 trustees in early 1997. In addition to standard
licensing fees, the Company generates revenues each month based upon the number
of cases in the trustee's database, which in some instances can exceed 10,000
active cases per trustee. CASEPOWER uses the Oracle7-Registered Trademark-
database engine and may be ported to several key hardware computer platforms.
CASEPOWER incorporates advanced technologies, including document imaging and
scanning, bar coding, speech recognition and video help into an extensive
library of bankruptcy processing functions.
    IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
 
                                       3
<PAGE>
    The Company is implementing a strategic business plan to enter affiliated
markets to build upon its existing proficiency in software development and
insolvency management. Other potential marketing opportunities for the Company
may include complementary lines of business, such as document imaging systems,
database extraction and updating services, bankruptcy petition management,
commercial claims recovery systems, and specialty products for international
insolvency markets.
 
    The Company was incorporated in Missouri on July 15, 1988, when the Company
completed a transaction whereby it acquired all of the assets of an unrelated
predecessor corporation, including the name of the Company. The Company's
executive offices are located at 501 Kansas Avenue, Kansas City, Kansas, 66105,
and its telephone number is (913) 321-6392.
 
                                  THE OFFERING
 
<TABLE>
<S>                                            <C>
Common Stock offered.........................  1,600,000 shares
Common Stock to be outstanding after the
 Offering....................................  3,400,000 shares (1)
Use of Proceeds..............................  Repayment of corporate debt and capital
                                               leases; software development; sales/marketing
                                               expansion; and general corporate purposes,
                                               including working capital.
Proposed Nasdaq SmallCap Market-TM- Symbol...  EPIQ
</TABLE>
 
- ------------------------
(1) Excludes: (i) 270,000 shares of Common Stock reserved for issuance under the
    Company's stock option plan of which 119,500 shares are issuable upon
    exercise of options to be outstanding upon completion of this Offering; and
    (ii) up to 160,000 shares of Common Stock issuable upon exercise of the
    Underwriter's Warrant. See "Management -- Stock Option Plan" and
    "Underwriting."
 
                                       4
<PAGE>
                             SUMMARY FINANCIAL DATA
 
<TABLE>
<CAPTION>
                                                                               FOR THE NINE MONTHS
                                                       FOR THE YEARS ENDED            ENDED
                                                           DECEMBER 31,           SEPTEMBER 30,
                                                      ----------------------  ----------------------
                                                         1994        1995        1995        1996
                                                      ----------  ----------  ----------  ----------
                                                                              (UNAUDITED)
<S>                                                   <C>         <C>         <C>         <C>
STATEMENT OF INCOME DATA:
  Operating revenues................................  $4,984,697  $5,233,959  $3,843,292  $4,638,685
  Cost of goods sold and direct costs...............   2,794,605   2,785,715   2,069,993   2,444,527
                                                      ----------  ----------  ----------  ----------
    Gross profit....................................   2,190,092   2,448,244   1,773,299   2,194,158
  Operating expenses................................   1,800,531   2,035,689   1,446,177   1,780,666
                                                      ----------  ----------  ----------  ----------
    Income from operations..........................     389,561     412,555     327,122     413,492
  Other income(expenses)............................    (283,199)   (261,685)   (193,622)   (200,288)
                                                      ----------  ----------  ----------  ----------
    Net income......................................  $  106,362  $  150,870  $  133,500  $  213,204
                                                      ----------  ----------  ----------  ----------
                                                      ----------  ----------  ----------  ----------
  Pro forma net income (1)..........................  $   52,362  $   82,870  $   74,500  $  123,204
                                                      ----------  ----------  ----------  ----------
                                                      ----------  ----------  ----------  ----------
  Pro forma net income per share (1)................  $      .03  $      .05  $      .04  $      .07
                                                      ----------  ----------  ----------  ----------
                                                      ----------  ----------  ----------  ----------
  Weighted average common shares outstanding (2)....   1,800,000   1,800,000   1,800,000   1,800,000
                                                      ----------  ----------  ----------  ----------
                                                      ----------  ----------  ----------  ----------
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                  SEPTEMBER 30, 1996
                                                                      -------------------------------------------
                                                                                                    AS ADJUSTED
                                                                         ACTUAL     PRO FORMA (3)       (4)
                                                                      ------------  -------------  --------------
<S>                                                                   <C>           <C>            <C>
BALANCE SHEET DATA:
  Total assets......................................................  $  4,378,628   $ 4,385,328    $  6,985,328
  Working capital (deficit).........................................      (366,551)     (510,911)      2,727,394
  Long-term debt and subordinated debt less current portion.........     2,250,093     2,250,093         696,060
  Total stockholders' equity........................................       909,302       482,342       5,082,342
</TABLE>
 
- --------------------------
(1) Pro forma figures are unaudited. For all periods indicated, the Company
    operated as an S Corporation and was not subject to federal and certain
    state income taxes. The Company will terminate its status as an S
    Corporation and become a C Corporation subject to federal and state income
    taxes as of the closing date of this Offering. Pro forma net income figures
    assume an effective corporate tax rate of 39% and include an allowance for
    additional taxes that would have been paid on certain non-deductible
    expenses, assuming the Company had been operating as a C Corporation for all
    periods presented. See note 9 of the financial statements included herein
    and "Prior S Corporation Status."
 
(2) Excludes (i) 270,000 shares of Common Stock reserved for issuance under the
    Company's stock option plan of which 119,500 shares are subject to options
    to be oustanding as of the completion of this Offering and (ii) the
    Underwriter's Warrant. See "Management -- Stock Option Plan" and
    "Underwriting."
 
(3) Pro forma gives effect to a $275,900 provision for income taxes (which
    consists of a $6,700 current asset and a $282,600 long term liability)
    resulting from the tax effect of temporary differences in the tax basis and
    financial statement reporting basis of assets and liabilities at September
    30, 1996 that would have been reflected had the Company's S Corporation
    election terminated at such date. The Company will also declare a final S
    Corporation distribution equal to its previously undistributed earnings only
    since January 1, 1996 through the termination of the S Corporation status.
    This final distribution will not exceed $250,000. For the nine-month period
    January 1, 1996 through September 30, 1996 the Company's undistributed
    earnings were $151,060. Pro forma gives effect to this $151,060 distribution
    that would have occurred if the Company had terminated its status as an S
    Corporation on September 30, 1996. See note 9 of the financial statements
    included herein.
 
(4) As adjusted to give effect to the sale of 1,600,000 shares of Common Stock
    at an assumed initial offering price of $3.50 per share and the application
    of the net proceeds therefrom. See "Use of Proceeds."
 
                                       5
<PAGE>
                                  RISK FACTORS
 
    THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE AND INVOLVE A HIGH
DEGREE OF RISK. PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER, ALONG WITH THE
OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, THE FOLLOWING CONSIDERATIONS AND
RISKS BEFORE PURCHASING THE SHARES OF COMMON STOCK OFFERED BY THIS PROSPECTUS.
 
LACK OF PRODUCT DIVERSIFICATION AND PRODUCT CONCENTRATION
 
    Historically, the Company's revenues have been generated primarily by sales
of its MIDRANGE Chapter 13 product and the accompanying services. In 1996, the
Company introduced a Windows version of its TCMS Chapter 7 product, which
increasingly is contributing to the Company's total revenues. The Company's
Chapter 7 and Chapter 13 bankruptcy software and services are expected to
provide substantially all of its revenues for the foreseeable future. The
Company's results will therefore depend on continued and increased market
acceptance of its products and the Company's ability to meet the needs of its
customers. Any reduction in demand for, or increasing competition with respect
to, these products would have a material adverse effect on the Company's
financial condition and results of operations. See "Business."
 
LIMITED NUMBER OF POTENTIAL CUSTOMERS; HIGHLY COMPETITIVE MARKET
 
    The Company works in an industry with a finite number of Chapter 7 and
Chapter 13 trustees. The Company estimates that there are approximately 550,000
pending Chapter 13 cases being managed by approximately 180 Chapter 13 trustees,
and that there is approximately $2 billion of liquidated asset proceeds on
deposit being managed by approximately 1,200 Chapter 7 trustees. There are
several companies in the market all competing to sell to this finite group of
customers, and some of the Company's competitors have substantially greater
financial and marketing resources than does the Company. For its Chapter 7
product, the Company competes with the Chase Manhattan Bank and Union Bank of
California, as well as other regional competitors in selected markets. For its
Chapter 13 product, the Company competes with DCI Corporation of Memphis,
Tennessee, a private company, and other competitors. Although there are
presently a limited number of firms that offer services that directly compete
with the Company's, there can be no assurance that other firms with resources
significantly greater than the Company's will not enter the Company's industry.
The Company's future financial performance will depend on its ability to
maintain existing customer accounts and to attract business from customer
accounts which are currently using a competitor's software product. See
"Business -- Competition."
 
CUSTOMER CONCENTRATION
 
    Each trustee manages many cases, and the Company's revenues are related to
the number of cases managed by the Company's software. Accordingly, a large
trustee client can comprise an important portion of the Company's operating
revenues, although sales to no one client presently exceed 10% of the Company's
revenues. The Company's future financial performance will be affected by its
ability to retain existing major accounts and to attract new major accounts. The
loss of even a small number of clients would have a substantial detrimental
effect on the Company's financial condition and results of operations.
 
DEPENDENCE ON ON-GOING BANKRUPTCY FILINGS
 
    The Company's business is highly dependent on the number of bankruptcy
filings in the United States. Economic fluctuations in the United States could
impact the number of bankruptcy filings and/or the dollar volume flowing through
the federal bankruptcy system. The Company's financial results depend on the
continual influx of new filings into the national bankruptcy system. A
significant reduction in the number of pending bankruptcy cases would adversely
affect the financial condition and operating results of the Company. See
"Business -- Industry Overview."
 
                                       6
<PAGE>
RELIANCE ON MARKETING ARRANGEMENT
 
   
    Chapter 7 trustees are discouraged from incurring direct administrative
costs for computer expenses. It is therefore important for EPI to align with a
bank or series of banks to earn revenues in Chapter 7. The Company promotes its
Chapter 7 product through an exclusive national marketing arrangement with
NationsBank of Texas, N.A. ("NationsBank"). While both the Company and
NationsBank have expressed a long term commitment to this agreement, either
party has the option to end the agreement upon 90 days' notice. If either party
were to end the marketing arrangement, the Company could experience adverse
financial results while a replacement marketing arrangement or arrangements were
established. Revenues from the NationsBank marketing arrangement presently
represent between 15% to 20% of the Company's total revenues. Although the
Company has other Chapter 7 banking relationships that predate its relationship
with NationsBank, there is no assurance that another marketing arrangement could
be found with terms comparable to those in the NationsBank agreement. See
"Business -- Chapter 7 Marketing Arrangement."
    
 
INTRODUCTION OF NEW CHAPTER 13 PRODUCT
 
    The Company plans to release for general distribution a new major software
product for Chapter 13 trustees in early 1997. Although the Company does not
anticipate any delays in releasing this product, there can be no assurance that
its national release will be timely or completed. In addition, this product is
intended to replace the Company's existing Chapter 13 product, which has
contributed the majority of the Company's revenues to date. Consequently, any
unforeseen problems with this new software product would materially affect the
Company's results of operations and financial position. There can be no
assurance that the market will accept the new product.
 
RAPID TECHNOLOGICAL AND MARKET CHANGE
 
    The software industry and the related market for support services are
characterized by rapidly evolving technology and industry standards. The
introduction of products embodying new technology and the emergence of new
industry standards can rapidly render existing products obsolete and
unmarketable. The Company's future success will depend on its ability to
continue to develop and manufacture new competitive products and to enhance
existing products. See "Business -- New Product Development."
 
NEED FOR PRODUCT COMPLIANCE WITH GOVERNMENT REGULATION; GOVERNMENT REGULATION OF
FEE-BASED PRODUCTS AND SERVICES
 
    Although the Company's products are not directly regulated by the
government, the products must allow trustees to perform their duties within the
applicable legal regulatory guidelines. The United States Department of Justice
and the United States bankruptcy courts both have authority to regulate aspects
of the bankruptcy industry. If the Company's products did not allow trustees to
remain in compliance with the applicable regulations, the Company would be
adversely affected. If any regulatory entity were to restrict or disallow the
types of fee-based products and services that the Company provides to the
bankruptcy market, the Company would be severely adversely affected. See
"Business -- Industry Overview."
 
DEPENDENCE UPON KEY PERSONNEL
 
    The Company's future success will depend in significant part upon the
continued service of certain key technical and senior management personnel and
the Company's continuing ability to attract and retain highly qualified
technical, managerial and sales and marketing personnel. Competition for such
personnel is intense, and there is no assurance that the Company can retain its
key personnel or that it can attract, assimilate and retain such employees in
the future. The Company does not have employment agreements with any of its
executive officers. The Company maintains a $1,500,000 and $1,000,000 key-man
life insurance policy on the Company's Chief Executive Officer
 
                                       7
<PAGE>
and its Executive Vice President/Chief Operating Officer, respectively. The loss
of these persons or other key personnel or the inability to hire or retain
qualified personnel in the future could have a material adverse effect upon the
Company's results of operations. See "Management."
 
DEPENDENCE ON PROPRIETARY TECHNOLOGY
 
    Historically, the Company has not protected its intellectual property rights
through patents or formal copyright registration. The Company believes, however,
that its financial performance will depend more upon the innovation,
technological expertise and marketing abilities of its employees than upon such
protection.
 
    There is no assurance that the Company will be able to protect its trade
secrets or that others will not independently develop substantially equivalent
proprietary information and techniques or otherwise gain access to the Company's
trade secrets. There is no assurance that foreign intellectual property laws
will protect the Company's intellectual property rights. In addition, litigation
may be necessary to enforce the Company's intellectual property rights, to
protect the Company's trade secrets, to determine the validity and scope of the
proprietary rights of others or to defend against claims of infringements. Such
litigation could result in substantial costs and diversion of management and
other resources and could have a material adverse effect on the Company's
business, financial condition and results of operation. See "Business --
Proprietary Rights."
 
REPAYMENT OF DEBT TO AFFILIATE
 
    The Company intends to apply $400,000 of net proceeds of the Offering to
retire a $400,000 subordinated note owned by Tom W. Olofson, the Company's
Chairman and Chief Executive Officer. The note, which bears interest at a rate
of 10%, matures on July 15, 1998. Mr. Olofson has personally guaranteed
substantially all of the Company's outstanding debt. Upon application of the
proceeds of the Offering, Mr. Olofson's guarantees with respect to such debt
will be extinguished. See "Certain Transactions" and "Use of Proceeds."
 
CONTROL BY MANAGEMENT
 
    Following completion of the Offering, the Common Stock currently owned
beneficially by the executive officers, directors and principal stockholders of
the Company and their affiliates will represent approximately 51.8% of the
outstanding Common Stock. Accordingly, such persons, if voting in concert, may
elect the entire Board of Directors, and generally continue to exercise control
over the Company's business and affairs following completion of the Offering.
See "Principal Stockholders."
 
IMMEDIATE DILUTION
 
    Purchasers of Common Stock in the Offering will incur an immediate dilution
of approximately $2.37 in the pro forma per share net tangible book value of
their Common Stock (based on an assumed initial offering price of $3.50 per
share). Additional dilution could result from the exercise of certain options
and the Underwriter's Warrant. See "Dilution" and "Description of Securities."
 
FUTURE CAPITAL NEEDS
 
    The Company's future capital requirements will depend on many factors,
including cash flow from operations, progress in its competing technological and
market developments, and the Company's ability to market its proposed products
successfully. Although the Company currently has no specific plans or
arrangements for financing other than the Offering, any additional equity
financings could result in substantial dilution to the Company's then existing
stockholders. Sources of debt financing may result in higher interest expense.
Any financing, if available, may be on terms unfavorable to the Company. The
Company anticipates that its existing capital resources and cash flow from
operations, together with the net proceeds of the Offering, will be adequate to
satisfy its operating expenses and capital requirements for at least 12 months
after the Offering. However, such projections may prove to be inaccurate. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Business" and Financial Statements.
 
                                       8
<PAGE>
DISCRETION TO REALLOCATE USE OF PROCEEDS
 
    The proposed use of the net offering proceeds described herein represents
the Company's anticipated use of the proceeds based upon current operating plans
and certain assumptions, including those relating to the Company's future
revenue levels and expenditures and assumptions regarding industry and general
economic and other conditions. Future events, including problems, delays,
expenses and complications frequently encountered when developing new products,
as well as changes in competitive conditions affecting the Company's business
and the success or lack thereof of the Company's research and development or
marketing efforts, may make it necessary or advisable for the Company to
reallocate the net proceeds among the specified uses. Any such shifts will be at
the discretion of the Company. See "Use of Proceeds."
 
PUBLIC MARKET RISKS; ABSENCE OF PUBLIC TRADING HISTORY; POSSIBLE FLUCTUATIONS IN
TRADING PRICE
 
    Prior to this Offering, there has been no market for the Company's
securities and there is no assurance that an active trading market will develop
or be sustained following the Offering. The initial public offering price of the
Common Stock will be determined in negotiations between the Company and the
Underwriter and may be greater or less than the price established by market
trading following the Offering. Sales in the public market of substantial
numbers of Common Stock can be expected to affect the price of the Common Stock
and could impair the Company's ability to raise additional capital through
equity offerings. Securities of many companies, in particular, newer and smaller
companies, have experienced substantial fluctuations and volatility that, in
some cases, were unrelated or disproportionate to the performance of the
companies themselves. Any such fluctuations, or general economic or market
trends, could adversely affect the price of the Common Stock. Due to all of the
foregoing factors, it is likely that in some future quarter the Company's
operating results will be below the expectations of public market analysts and
investors. In that event, the price of the Common Stock would likely be
materially adversely affected. Investors in the Offering will also experience
substantial dilution because the initial public offering price of the Common
Stock is greater than the net tangible book value per share of the Company. See
"Shares Eligible for Future Sale" and "Dilution."
 
EFFECTS OF DELISTING FROM NASDAQ SMALLCAP MARKET-TM-
 
    The Company's application for quotation of its Common Stock on the Nasdaq
SmallCap Market is pending approval. There can be no assurance that the Company
will be able to maintain the qualification standards for listing of the Common
Stock on the Nasdaq SmallCap Market. If the Company fails to maintain the
listing criteria, the Common Stock will be subject to delisting. Consequently,
the liquidity of the Company's Common Stock would likely be impaired, not only
in the number of shares which could be bought and sold, but also through delays
in the timing of the transactions, and reduction in security analysts' and the
news media's coverage, if any, of the Company. As a result, prices for the
Company's shares of Common Stock may be lower than might otherwise prevail.
 
APPLICABILITY OF "PENNY STOCK RULES"
 
    Federal regulations under the Securities and Exchange Act of 1934, as
amended (the "Exchange Act") regulate the trading of so-called "penny stocks"
(the "Penny Stock Rules"), which are generally defined as any security not
listed on a national securities exchange or Nasdaq, priced at less than $5.00
per share and offered by an issuer with limited net tangible assets and
revenues. In addition, equity securities listed on Nasdaq which are priced at
less then $5.00 are deemed penny stocks for the limited purpose of Section
15(b)(6) of the Exchange Act. Therefore, if, during the time in which the Common
Stock is quoted on the Nasdaq SmallCap Market, the Common Stock is priced below
$5.00 per share, trading of the Common Stock will be subject to the provisions
of Section 15(b)(6) of the Exchange Act which make it unlawful for any
broker-dealer to participate in a distribution of any penny stock without the
consent of the Securities and Exchange Commission if, in the exercise of
reasonable care, the broker-dealer is aware of or should have been aware of the
participation of a previously sanctioned
 
                                       9
<PAGE>
person. In such event, it may be more difficult for broker-dealers to sell the
Common Stock and purchasers of the shares of Common Stock offered hereby may
have difficulty in selling their shares in the future in the secondary trading
market.
 
    In the event that the Company's Common Stock is delisted from the Nasdaq
SmallCap Market and the Company fails other relevant criteria, trading, if any,
of the Common Stock would be subject to the full range of the Penny Stock Rules.
Accordingly, delisting from the Nasdaq SmallCap Market and the application of
the comprehensive Penny Stock Rules may make it more difficult for
broker-dealers to sell the Company's Common Stock and purchasers of the shares
of Common Stock in the Offering may have difficulty in selling their shares in
the future in the secondary trading market.
 
ABSENCE OF DIVIDENDS
 
    Although the Company made cash distributions prior to the Offering while it
was taxable as an S Corporation, and will pay a final S Corporation distribution
to present stockholders following termination of the Company's S Corporation
status, it does not intend to pay any other cash or stock dividends in the
foreseeable future. The Company intends to retain all earnings, if any, to
invest in the Company's operations. The payment of future dividends is within
the discretion of the Board of Directors and will depend upon the Company's
future earnings, if any, its capital requirements, financial condition and other
relevant factors. See "Dividend Policy" and "Prior S Corporation Status."
 
                           PRIOR S CORPORATION STATUS
 
    The Company elected to be treated as an S Corporation for federal and
certain state income tax purposes commencing July 15, 1988. Unlike a C
Corporation, an S Corporation is generally not subject to income tax at the
corporate level. Instead, the S Corporation's income generally passes through to
the stockholders and is taxed on their personal income tax returns. The Company
will terminate its status as an S Corporation and will become a C Corporation as
of the closing of this Offering (the "Termination Date"). Subsequent to the
Termination Date, the Company will no longer be treated as an S Corporation and
will, accordingly, be fully taxable pursuant to federal and state income tax
laws. The Company will pay a final S Corporation distribution to present
stockholders following termination of the Company's S Corporation status. This
final distribution will represent the Company's previously undistributed
earnings only since January 1, 1996 through the Termination Date. The amount of
this final distribution will not exceed $250,000 and will be payable within 90
days following the Termination Date.
 
                                USE OF PROCEEDS
 
    The net proceeds to be received by the Company from the sale of the
1,600,000 shares of Common Stock offered hereby (assuming an initial offering
price of $3.50 per share, the mid-point of the price range stated on the cover
of this Prospectus) are estimated to be approximately $4,600,000 after deducting
the underwriting discount and other estimated expenses payable by the Company in
connection with the Offering. The net proceeds are intended to be used as
follows:
 
<TABLE>
<S>                                                                      <C>
Retire corporate debt and capital leases...............................  $1,600,000
Repay debt to affiliate................................................     400,000
Sales/marketing expansion..............................................   1,250,000
Software development...................................................     900,000
                                                                         ----------
General corporate purposes, including working capital..................     450,000
                                                                         ----------
Total..................................................................  $4,600,000
                                                                         ----------
                                                                         ----------
</TABLE>
 
                                       10
<PAGE>
    The proposed use of the net offering proceeds described herein represents
the Company's anticipated use of the proceeds based upon current operating plans
and certain assumptions, including those relating to the Company's future
revenue levels and expenditures and assumptions regarding industry and general
economic and other conditions. Future unforeseen events may make it necessary or
advisable for the Company to reallocate the net proceeds among the above uses.
Any such reallocations will be at the discretion of the Company. See "Risk
Factors -- Discretion to Reallocate Use of Proceeds."
 
    The Company plans to use approximately $1,600,000 of the proceeds to retire
certain corporate debt and capital leases. This includes (i) a $250,000 bank
term note with an interest rate of 1% over prime (9.25% at September 30, 1996)
that matures October 18, 1997; (ii) a bank term note that will be in the
approximate amount of $492,300 at the time of this Offering with an interest
rate of 2% over the bank's base lending rate (10.25% at September 30, 1996) on a
five year amortization schedule that matures June 8, 1999; (iii) a bank
equipment note that will be in the approximate amount of $250,000 at the time of
this Offering with an interest rate of 2% over the bank's base lending rate
(10.25% at September 30, 1996) on a three year amortization schedule that
matures June 8, 1998; and (iv) various equipment leases that will be in the
approximate amount of $607,641 at the time of this Offering on three year
amortization schedules with varying interest rates (ranging between 9.23% and
11.45% at September 30, 1996). Tom W. Olofson personally guarantees
substantially all of the Company's outstanding debt. Upon application of the
proceeds of the Offering, Mr. Olofson's guarantee obligations with respect to
such debt will be extinguished. See "Certain Transactions."
 
    The Company intends to retire a $400,000 subordinated note with an interest
rate of 10% that matures July 15, 1998 owned by Tom W. Olofson, Chairman and
Chief Executive Officer. See "Certain Transactions."
 
    The Company plans to use approximately $1,250,000 to expand its sales and
marketing efforts. This may include hiring additional sales/marketing staff,
publishing new advertising and promotional materials, attending additional trade
shows and conventions, and increasing national marketing coverage through more
extensive field sales calls. The Company plans to use approximately $900,000 of
the proceeds for software development. This may include the development of new
applications, enhancement to existing applications, hiring of new development
staff, acquisition of new development technologies and/or training for the
Company's software development staff.
 
    The Company anticipates, based on currently proposed plans and assumptions
relating to its operations, that the net proceeds of the Offering, together with
projected cash flow from operations, will be sufficient to satisfy the Company's
contemplated cash requirements for at least the next 12 months. Pending
application, the net proceeds of the Offering will be invested in short-term,
high-grade interest-bearing savings accounts, certificates of deposit, United
States government obligations, money market accounts or short-term interest
bearing obligations. Any proceeds received upon exercise of the Underwriter's
Warrant, as well as income from investments, will be used for general corporate
purposes.
 
                                DIVIDEND POLICY
 
    The Company does not expect to declare or pay any other cash or stock
dividends in the foreseeable future, with the exception of a final S Corporation
distribution to existing stockholders. The Company currently intends to retain
any earnings for use in the operation and expansion of its business. The payment
of future dividends is within the discretion of the Board of Directors and will
depend upon the Company's future earnings, if any, its capital requirements,
financial condition and other relevant factors. See "Prior S Corporation
Status."
 
                                       11
<PAGE>
                                    DILUTION
 
    At September 30, 1996, the Common Stock had a negative net tangible book
value of ($529,158) or ($0.29) per share. Net tangible book value per share is
equal to the Company's total tangible assets (total assets less intangible
assets, consisting of goodwill, deferred stock issuance costs, and computer
software) less its total liabilities, divided by the number of shares of Common
Stock outstanding. After giving effect to: (i) the sale by the Company of
1,600,000 shares of Common Stock offered hereby (assuming an initial public
offering price of $3.50 per share, the midpoint of the price range stated on the
cover of this Prospectus); (ii) the receipt of the estimated net proceeds
therefrom if the same had occurred on September 30, 1996; (iii) the $275,900
provision to income resulting from the tax effect of temporary differences which
existed at September 30, 1996, and (iv) the final S Corporation distribution
estimated to be $151,060 at September 30, 1996, the net tangible book value of
the Company at such date would have been approximately $3,836,220 or $1.13 per
share. This represents an immediate increase in net tangible book value of $1.42
per share to the existing stockholders and an immediate dilution of $2.37 per
share to new stockholders. Dilution represents the difference between the
initial public offering price paid by the purchaser in the Offering and the net
tangible book value per share immediately after completion of the Offering. The
following table illustrates this per share dilution:
 
<TABLE>
<S>                                                                           <C>        <C>
Assumed initial public offering price per share.............................             $    3.50
  Pro forma negative net tangible book value per share as of
   September 30, 1996.......................................................  $   (0.29)
  Increase per share attributable to new stockholders.......................       1.42
                                                                              ---------
Net tangible book value per share after the Offering........................                  1.13
                                                                                         ---------
Dilution per share to new stockholders......................................             $    2.37
                                                                                         ---------
                                                                                         ---------
</TABLE>
 
    The following table summarizes, as of the date of this Prospectus, the
difference between current stockholders and purchasers of Common Stock in the
Offering with respect to the number of shares of Common Stock purchased from the
Company, the total consideration paid to the Company and the average price paid
per share.
 
<TABLE>
<CAPTION>
                                                   SHARES PURCHASED (1)   TOTAL CONSIDERATION (2)
                                                  ----------------------  ------------------------  AVERAGE PRICE
                                                    NUMBER      PERCENT      AMOUNT       PERCENT     PER SHARE
                                                  -----------  ---------  -------------  ---------  -------------
<S>                                               <C>          <C>        <C>            <C>        <C>
Current stockholders............................    1,800,000      52.9%  $     300,000       5.1%    $    0.17
New investors...................................    1,600,000      47.1%      5,600,000      94.9%    $    3.50
                                                  -----------  ---------  -------------  ---------
Total...........................................    3,400,000     100.0%  $   5,900,000     100.0%
                                                  -----------  ---------  -------------  ---------
                                                  -----------  ---------  -------------  ---------
</TABLE>
 
- ------------------------
 
(1) The foregoing computations do not include: (i) 270,000 shares of Common
    Stock reserved for issuance under the Company's stock option plan of which
    119,500 shares are issuable upon exercise of options to be outstanding upon
    completion of this Offering; and (ii) the Underwriter's Warrant. To the
    extent that any outstanding options or warrants are exercised, there will be
    further dilution to investors. See "Management -- Stock Option Plan" and
    "Underwriting."
 
(2) Does not reflect deduction of the underwriting discount or any other
    expenses incurred in connection with the Offering.
 
                                       12
<PAGE>
                                 CAPITALIZATION
 
    The following table sets forth the capitalization of the Company as of
September 30, 1996 and as adjusted to reflect the issuance and sale of 1,600,000
shares of Common Stock offered by the Company hereby (assuming an offering price
of $3.50 per share, the midpoint of the price range stated on the cover page
hereof), and the application of the net proceeds therefrom as set forth under
"Use of Proceeds."
 
<TABLE>
<CAPTION>
                                                                                  SEPTEMBER 30, 1996
                                                                      -------------------------------------------
                                                                         ACTUAL      PRO FORMA (1)   AS ADJUSTED
                                                                      -------------  -------------  -------------
<S>                                                                   <C>            <C>            <C>
Short-term obligations, including current maturities of long-term
  debt..............................................................  $     697,648   $   697,648   $     251,681
                                                                      -------------  -------------  -------------
                                                                      -------------  -------------  -------------
 
Long-term debt, less current maturities.............................  $   1,850,093   $ 1,850,093   $     696,060
 
Subordinated debt...................................................        400,000       400,000               0
 
Stockholders' equity:
  Common stock, $0.01 par value, 5,000,000 shares authorized;
   1,800,000 shares issued and outstanding (actual) and 3,400,000
   shares as adjusted (2)...........................................         18,000        18,000          34,000
  Additional paid-in capital........................................        282,000       464,342       5,048,342
  Retained earnings.................................................        609,302             0               0
                                                                      -------------  -------------  -------------
    Total stockholders' equity......................................        909,302       482,342       5,082,342
                                                                      -------------  -------------  -------------
  Total capitalization..............................................  $   3,159,395   $ 2,732,435   $   5,778,402
                                                                      -------------  -------------  -------------
                                                                      -------------  -------------  -------------
</TABLE>
 
- ------------------------
 
(1) Pro forma gives effect to a $275,900 provision to income taxes (which
    consists of a $6,700 current asset and a $282,600 long term liability)
    resulting from the tax effect of temporary differences in the tax basis and
    financial statement reporting basis of assets and liabilities at September
    30, 1996 that would have been reflected had the Company's S Corporation
    election terminated at such date. The Company will also declare a final S
    Corporation distribution equal to its previously undistributed earnings only
    since January 1, 1996 through the termination of the S Corporation status.
    This final distribution will not exceed $250,000. For the nine-month period
    January 1, 1996 through September 30, 1996 the Company's undistributed
    earnings were $151,060. Pro forma gives effect to this $151,060 distribution
    that would have occurred if the Company had terminated its status as an S
    Corporation on September 30, 1996. See note 9 of the financial statements
    included herein.
 
(2) Does not include: (i) 270,000 shares of Common Stock reserved for issuance
    under the Company's stock option plan of which 119,500 shares are issuable
    upon exercise of options to be outstanding upon completion of this Offering;
    and (ii) the Underwriter's Warrant. See "Management -- Stock Option Plan"
    and "Underwriting."
 
                                       13
<PAGE>
                            SELECTED FINANCIAL DATA
 
    The following selected financial data should be read in conjunction with the
Financial Statements and related Notes thereto appearing elsewhere in the
Prospectus and "Management's Discussion and Analysis of Financial Condition and
Results of Operations." The selected balance sheet and statements of operation
data as of and for the years ended December 31, 1995 and 1994 and for the nine
months ended September 30, 1996 are derived from financial statements of the
Company which have been audited by Baird, Kurtz & Dobson, independent
accountants, and included herein. The selected balance sheet and statements of
income data as of and for the nine months ended September 30, 1995 have been
derived from unaudited interim financial statements of the Company contained
elsewhere herein. Results of operations for any interim period are not
necessarily indicative of results to be expected for the full fiscal year.
 
<TABLE>
<CAPTION>
                                                                      FOR THE NINE MONTHS
                                              FOR THE YEARS ENDED            ENDED
                                                  DECEMBER 31,           SEPTEMBER 30,
                                             ----------------------  ----------------------
                                                1994        1995        1995        1996
                                             ----------  ----------  ----------  ----------
                                                                     (UNAUDITED)
<S>                                          <C>         <C>         <C>         <C>
STATEMENT OF INCOME DATA:
  Operating revenues.......................  $4,984,697  $5,233,959  $3,843,292  $4,638,685
  Cost of goods sold and direct costs......   2,794,605   2,785,715   2,069,993   2,444,527
                                             ----------  ----------  ----------  ----------
    Gross profit...........................   2,190,092   2,448,244   1,773,299   2,194,158
 
  Operating expenses.......................   1,800,531   2,035,689   1,446,177   1,780,666
                                             ----------  ----------  ----------  ----------
    Income from operations.................     389,561     412,555     327,122     413,492
  Other income (expenses)..................    (283,199)   (261,685)   (193,622)   (200,288)
                                             ----------  ----------  ----------  ----------
    Net income.............................  $  106,362  $  150,870  $  133,500  $  213,204
                                             ----------  ----------  ----------  ----------
                                             ----------  ----------  ----------  ----------
  Pro forma net income (1).................  $   52,362  $   82,870  $   74,500  $  123,204
                                             ----------  ----------  ----------  ----------
                                             ----------  ----------  ----------  ----------
  Pro forma net income per share (1).......  $      .03  $      .05  $      .04  $      .07
                                             ----------  ----------  ----------  ----------
                                             ----------  ----------  ----------  ----------
  Weighted average common shares
   outstanding.............................   1,800,000   1,800,000   1,800,000   1,800,000
                                             ----------  ----------  ----------  ----------
                                             ----------  ----------  ----------  ----------
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                SEPTEMBER 30, 1996,
                                              DECEMBER 31,          --------------------------------------------
                                      ----------------------------                                 AS ADJUSTED
                                          1994           1995          ACTUAL      PRO FORMA (2)       (3)
                                      -------------  -------------  -------------  -------------  --------------
<S>                                   <C>            <C>            <C>            <C>            <C>
BALANCE SHEET DATA:
  Total assets......................  $   3,128,658  $   3,376,760  $   4,378,628   $ 4,385,328    $  6,985,328
  Working capital (deficit).........       (149,022)      (523,484)      (366,551)     (510,911)      2,727,394
  Long-term debt and subordinated
   debt less current portion........      1,416,439      1,416,540      2,250,093     2,250,093         696,060
  Total stockholders' equity........        809,340        758,242        909,302       482,342       5,082,342
</TABLE>
 
- ------------------------
 
(1) Pro forma figures are unaudited. For all periods indicated, the Company
    operated as an S Corporation and was not subject to federal and certain
    state income taxes. The Company will terminate its status as an S
    Corporation and become a C Corporation subject to federal and state income
    taxes as of the closing date of this Offering. Pro forma net income figures
    assume an effective corporate tax rate of 39% and include an allowance for
    additional taxes that would have been paid on certain non-deductible
    expenses, assuming the company had been operating as a C Corporation for all
    periods presented. See note 9 of the financial statements included herein
    and "Prior S Corporation Status."
 
                                       14
<PAGE>
(2) Pro forma gives effect to a $275,900 provision for income taxes (which
    consists of a $6,700 current asset and a $282,600 long term liability)
    resulting from the tax effect of temporary differences in the tax basis and
    the financial statement reporting basis of assets and liabilities at
    September 30, 1996 that would have been reflected had the Company's S
    Corporation election terminated at such date. The Company will also declare
    a final S Corporation distribution equal to its previously undistributed
    earnings only since January 1, 1996 through the termination of the S
    Corporation status. This final distribution will not exceed $250,000. For
    the nine-month period January 1, 1996 through September 30, 1996 the
    Company's undistributed earnings were $151,060. Pro forma gives effect to
    this $151,060 distribution that would have occurred if the Company had
    terminated its status as an S Corporation on September 30, 1996. See note 9
    to the financial statements included herein.
 
(3) As adjusted to give effect to the sale of 1,600,000 shares of Common Stock
    at an assumed initial offering price of $3.50 per share and the application
    of the net proceeds therefrom.
 
                                       15
<PAGE>
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
    The following discussion should be read in conjunction with the Company's
historical financial statements, including the notes thereto included elsewhere
in this Prospectus.
 
OVERVIEW
 
    The Company develops, markets and licenses specialty software products and
support services for Chapter 7 and 13 bankruptcy trustees as well as for other
users of the federal bankruptcy system. The Company is implementing a strategic
plan to increase operating revenues and gross profit through the introduction of
new products and the penetration of new markets. Additionally, the Company is
introducing new higher margin products that the Company believes can be sold to
a broader market. Accordingly, the Company has experienced in the past, and
believes it will continue to experience, a significant shift in product mix that
has affected and will continue to affect operating results.
 
    In early 1996, the Company began marketing a Windows95 version of TCMS
(Trustee Case Management System for Chapter 7), a successor product to the
earlier DOS version. The Company has marketed the TCMS product line in an
exclusive national marketing arrangement with NationsBank since 1994. The TCMS
relationship with NationsBank and the Chapter 7 bankruptcy trustee is structured
as follows: (i) EPI licenses TCMS to a trustee end-user for no fee; (ii) the
trustee deposits proceeds from the sale of assets into accounts at NationsBank;
and (iii) NationsBank pays EPI a monthly fee based on the total dollar amount of
such deposits.
 
    Since early 1996, the Company has had another new Windows95-based product in
beta testing that will be marketed under the trade name, CASEPOWER. This product
is scheduled for general market release during early 1997 and will be licensed
directly to Chapter 13 trustees. An accompanying banking marketing arrangement
is not used or required in Chapter 13 cases. The Company typically receives an
initial licensing fee and conversion charge from the Chapter 13 trustee. It also
receives monthly fees from each Chapter 13 trustee client based on the total
number of cases in that trustee's database and the number of noticing documents
generated. The Company intends to market this product aggressively in 1997 to
generate revenue streams from new clients and to generate upgrade revenues as
MIDRANGE systems are replaced. New Chapter 13 systems sales were relatively flat
during 1995 and 1996 as the development cycle for CASEPOWER progressed.
 
RESULTS OF OPERATIONS
 
    NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH NINE MONTHS ENDED
    SEPTEMBER 30, 1995
 
    Operating revenues for the nine-month period of fiscal 1996 were $4,638,685
compared to $3,843,292 for the similar 1995 period, an increase of 20.7%.
Chapter 7 sales increased $358,719 or 71.7% between years. The introduction of
TCMS for Windows95 in early 1996 helped to penetrate new markets resulting in a
significant increase in revenues. Chapter 13 revenue in the 1996 period compared
to the similar 1995 period increased $310,549 or 10.5%. The additional revenue
experienced in 1996 was due to an increase in caseloads managed by Chapter 13
trustee clients. Also, the number of new bankruptcy filings in 1996 was greater
than in 1995 resulting in increased legal noticing revenue which constituted
33.5% of the total Chapter 13 revenue for the nine months ending September 30,
1996.
 
   
    Processing costs increased to $1,857,034 for the nine-month period of fiscal
1996 from $1,565,594 for the 1995 period or a 18.6% increase. The increase in
1996 resulted principally from an increase in customer service expense,
resulting from hiring additional trainers, hardware installers and other
customer service functions to support the growth of Chapter 7 sales.
Depreciation and amortization increased to $587,493 for the nine-month period of
fiscal 1996 from $504,399 for the 1995 period or a
    
 
                                       16
<PAGE>
   
16.5% increase. This increase relate primarily to the purchase of computer
equipment for the installations of the Company's new Chapter 7 product. Total
cost of goods sold and direct costs increased to $2,444,527 for the nine-month
period of fiscal 1996 from $2,069,993 for the 1995 period or a 18.1% increase.
    
 
    Gross profit increased 23.7% or $420,859 to $2,194,158 during the nine
months ending September 30, 1996 compared to $1,773,299 for the 1995 period.
Gross profit as a percentage of operating revenues increased to 47.3% for the
1996 period from 46.1% for the 1995 period due primarily to TCMS, which has
higher gross margins, comprising a greater percentage of operating revenues in
1996. The Company anticipates the Chapter 7 revenue will continue to grow as the
number of installations of TCMS for Windows95 continues to increase.
 
    Operating expenses as a percentage of operating revenues were 38.4% for the
nine months ended September 30, 1996 compared to 37.6% for the similar period in
1995. Sales and marketing expenses were $559,552 in 1996 compared to $330,361 in
1995. The Company increased its marketing activities in 1996 related to the
introduction of a Windows95 version of TCMS, including costs associated with
trade shows and promotional materials.
 
    Income from operations increased 26.4% to $413,492 for the nine-month period
ended September 30, 1996, compared to $327,122 for the nine-month period ended
September 30, 1995, principally due to increased sales and higher gross profit
margins.
 
    For the nine months ended September 30, 1996, the Company reported net
income of $213,204 compared to net income of $133,500 for the nine months ended
September 30, 1995, a 59.7% increase.
 
    YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994
 
    Operating revenues in 1995 were $5,233,959 and $4,984,697 in 1994, an
increase of $249,262 or 5.0%. Chapter 7 revenues increased by $337,455 or 93.7%
due to the penetration of new markets. Chapter 13 revenues reflected a modest
decrease of $52,989 during 1995 due to the discontinuation of certain low margin
Chapter 13 service business which accounted for $192,268 of operating revenues
in 1994. Also, Chapter 13 equipment sales were lower by $44,426 during 1995 as
less emphasis was placed on MIDRANGE equipment sales as CASEPOWER was in the
final development stages.
 
   
    Processing costs decreased $119,742 or 5.4% during fiscal 1995. This
decrease in costs is attributed to the discontinuing of low margin Chapter 13
services mentioned above which accounted for $97,956 of processing costs in
1994. Depreciation and amortization increased to $687,314 for the year ended
December 31, 1995 from $576,462 for the year ended December 31, 1994. The
Company invested in property and equipment totaling $621,733 and $488,524 for
the year ended 1995 and 1994, respectively, which increased the average
depreciable fixed asset base. The increase in property and equipment purchased
related primarily to the installation of computer equipment for the Company's
new Chapter 7 product. Total cost of goods and direct costs in 1995 were
$2,785,715 and $2,794,605 in 1994, a decrease of $8,890.
    
 
    Gross profit increased 11.8% or $258,152 to $2,448,244 during fiscal 1995
from $2,190,092 in fiscal 1994. Gross profit as a percentage of operating
revenues increased to 46.8% in fiscal 1995 from 43.9% in fiscal 1994. The
increase in gross profit as a percentage of operating revenues was primarily
attributable to an increase in Chapter 7 revenues, which have a higher profit
margin than the low margin Chapter 13 computer services that were discontinued.
 
    Stated as a percentage of operating revenues, operating expenses represent
38.9% of the year ended December 31, 1995 operating revenues versus 36.1% of the
year ended December 31, 1994 operating revenues. The increase resulted primarily
from expanded marketing and promotional costs increasing $114,018 between
periods. The 1995 increase in operating expenses relates principally to the
additional selling efforts associated with the expanded sales program for its
Chapter 7 product.
 
                                       17
<PAGE>
    Income from operations increased 5.9% to $412,555 for the year ended
December 31, 1995 compared to $389,561 for the year ended December 31, 1994,
principally due to increased sales and higher gross profit margins.
 
    For the twelve month period ended December 31, 1995, the Company reported
net income of $150,870, a 41.8% increase, compared to $106,362 during the twelve
month period ended December 31, 1994.
 
LIQUIDITY AND CAPITAL RESOURCES
 
    Net cash provided by operating activities was $1,031,159 in 1995 and
$593,998 in 1994. The net cash provided by operating activities in 1995
consisted primarily of net income of $150,870, depreciation and amortization of
$775,209, and a $75,507 decrease in other receivables.
 
    During the nine months ended September 30, 1996, net cash provided by
operating activities was $773,077 representing principally net income of
$213,204 plus depreciation of $654,303 and an increase in accounts payable of
$149,821 offset primarily by an increase in accounts receivable of $214,453. The
outstanding accounts receivable balance has increased primarily due to the
growth in revenue.
 
    The Company has a $500,000 operating line of credit from a financial
institution, of which $365,000 was outstanding September 30, 1996 and a term
loan with an outstanding balance of $553,729 as of September 30, 1996, from the
same financial institution. The term loan has been reduced by $346,271 since it
originated in July of 1994. The Company may borrow up to 80% of eligible
accounts receivable against this line which is collateralized by substantially
all of the Company's assets. The Company currently expects to repay the term
loan from the proceeds of this Offering and leave the line of credit in place
for working capital purposes. The Company originated a $250,000 loan in June of
1996 to provide additional short term working capital. The Company currently
expects to repay the loan from the proceeds of this Offering. See "Use of
Proceeds."
 
    The Company invested in property and equipment totaling $996,560 for the
nine months ending September 30, 1996, $621,733, and $488,524 for the years
ended 1995 and 1994, respectively, which related principally to the installation
of computer equipment for the Company's new Chapter 7 product. The equipment was
financed through various capital leases and a bank equipment term loan. As of
September 30, 1996, the balances outstanding on capital leases and the bank
equipment loan were $1,154,006 and $214,828, respectively. The Company made
principal payments on capital leases aggregating $321,828, $300,866, and
$274,593 for the nine months ended September 30, 1996 and years ended 1995 and
1994, respectively. As of September 30, 1996, the Company had $404,300 available
for eligible purchases of capital equipment through various equipment lines of
credit and bank commitments. The Company currently expects to repay the
outstanding balances of certain capital leases and term loans from the proceeds
of this Offering. See "Use of Proceeds."
 
    The Company incurred expenditures for software development costs totaling
$364,122, $364,479 and $272,111 for the nine months ended September 30, 1996,
and years ended 1995 and 1994, respectively. These amounts have been capitalized
and are being amortized on a straight line basis over a maximum five year
period. Additionally, the Company anticipates future software development to be
at or above the spending levels of prior years with a portion of the Offering
proceeds being used to partially fund such development.
 
    The Company believes that the net proceeds from this Offering, together with
funds that may be generated from operations, will be sufficient to finance the
Company's currently anticipated working capital and property and equipment
expenditures for at least 12 months following the Offering.
 
                                       18
<PAGE>
                                    BUSINESS
 
    Electronic Processing, Inc. ("EPI" or the "Company") serves a national
client base with specialty products that facilitate financial and administrative
aspects of bankruptcy management, including legal noticing, claims management,
funds distribution and government reporting. The Company develops, markets,
licenses and supports internally developed and proprietary software products
primarily to trustees under Chapter 7 and Chapter 13 of the Bankruptcy Code of
1978, as amended (the "Bankruptcy Code"), as well as to other users of the
federal bankruptcy system, including trustees in Chapter 11 and Chapter 12. EPI
assimilates software development, network operations, value-added services and
comprehensive post-installation support into an integrated environment that
offers clients a high level of coordinated support.
 
    Between 1993 and 1996, the Company concentrated on developing software and
systems compatible with current technologies and recruited a management team
experienced in bankruptcy management and software development. During this time
the Company concentrated on developing and upgrading its Chapter 7 and Chapter
13 products to be compatible with current software operating environments. In
1996, the Company introduced its TCMS Chapter 7 Windows95/Windows NT 4 based
system. In late 1996, the Company completed testing of CASEPOWER, a new PC-based
Windows95/Windows NT 4 Chapter 13 product, designed to replace the Company's
MIDRANGE Chapter 13 product, which was based on IBM mini-computer AS/400
technology.
 
INDUSTRY OVERVIEW
 
    Bankruptcy comprises an ever present, integral part of the national economy.
Industry analysts report that even when certain other national economic
indicators are strong, bankruptcy filings can still grow at record-setting
rates. In 1996, new bankruptcy filings surpassed the one million mark for the
first time. There is a national community of professionals that works in the
bankruptcy industry including trustees, judges, court clerks, attorneys,
accountants, government administrators, and other professionals.
 
    Title 11 of the U.S. Code establishes federal law governing bankruptcies.
The participants in a bankruptcy proceeding include the debtor, the creditors,
and a trustee, as well as the presiding judge. The trustee acts as an
intermediary between the debtor and the creditors and is responsible for
administering the bankruptcy case. The end user clients of the Company's
products are TRUSTEES, not individual debtors or creditors.
 
    The United States Trustee's office, a division of the Justice Department,
oversees bankruptcy trustees and establishes administrative rules concerning
trustees' activities. Local bankruptcy judges also direct trustees' activities
and have a high level of authority in a bankruptcy case. The trustees'
activities are guided by the Bankruptcy Code, the Federal Rules of Bankruptcy
Procedure, the trustee handbooks developed by the United States Trustee, and
local rules established by the courts.
 
    There are five chapters of the Bankruptcy Code that define various
configurations of bankruptcy cases:
 
    - Chapter 7 -- Liquidation
 
    - Chapter 9 -- Reorganization of Municipality
 
    - Chapter 11 -- Reorganization of Corporation
 
    - Chapter 12 -- Reorganization of Family Farm
 
    - Chapter 13 -- Reorganization of Individual Debt
 
    The Company believes that Chapter 7 and Chapter 13 are the most attractive
sectors in the bankruptcy industry to which it can provide service and has
developed a strategic plan accordingly. There are significantly fewer filings in
Chapter 9 and Chapter 12 than in Chapters 7 and 13, and the
 
                                       19
<PAGE>
industry analysts note that Chapter 11 filings have decreased as distressed
organizations increasingly make private arrangements with their creditors for
payment of debt. On the whole, bankruptcy filings have increased significantly
recently, passing the one million mark for the first time in 1996.
 
    Chapter 7 and Chapter 13 bankruptcies serve different purposes and require
different services and information. Chapter 7 of the Bankruptcy Code provides
for liquidation of the assets of the debtor (which can be an individual,
partnership or corporation) and for the disbursement of the resulting cash
proceeds to the creditors. Chapter 13 provides for adjustments of debt whereby
the debtor makes regular payments to the trustee, who in turn disburses the
collected funds to the creditors. Assets are not liquidated in Chapter 13.
 
    Bankruptcy trustees in Chapters 7 and 13 are appointed by the United States
Trustee. A United States Trustee is appointed in most federal court districts
and generally has responsibility for overseeing the integrity of the bankruptcy
system. Bankruptcy trustees in Chapter 7 and Chapter 13 cases are charged with
managing the administrative aspects of liquidation or reorganization
bankruptcies. The trustee's primary responsibilities include collecting funds
from the debtor (Chapter 13) or liquidating the debtor's assets (Chapter 7),
distributing the collected funds to creditors pursuant to the orders of the
bankruptcy court, and preparing regular status reports, including financial
updates, for the United States Trustee and for the bankruptcy court. Trustees
typically are attorneys or certified public accountants and manage many
different bankruptcy cases simultaneously. A trustee client uses an EPI product
to manage an entire caseload; the Company does not contract with trustees to
manage specific individual cases. The Company estimates that Chapter 13 trustees
typically manage over one thousand cases simultaneously and that Chapter 7
trustees can manage over one hundred cases simultaneously. It is possible for a
given individual trustee to have caseloads in both Chapter 7 and Chapter 13
bankruptcies, but normally a trustee will specialize in one or the other.
 
    CHAPTER 7 BANKRUPTCY TRUSTEES
 
    For Chapter 7 liquidation bankruptcy, each region of the country has a
rotating "panel" of trustees. Because Chapter 7 comprises the overwhelming
majority of bankruptcies, multiple trustees are required in most parts of the
country to accommodate the caseload. As assets are liquidated and the first
funds are received in each asset case, the trustee opens bank accounts for the
case. In Chapter 7, each case must have its own bank accounts so that interest
earned can be segregated. Because asset liquidation and litigation regarding the
case may be a lengthy process, the trustee will deposit cash proceeds into an
interest-bearing account for the benefit of the creditors who will eventually
receive distributions. Typically, the trustee makes a single distribution at the
conclusion of the case. The administration of a Chapter 7 case can take several
years.
 
    CHAPTER 13 BANKRUPTCY TRUSTEES
 
    There are fewer filings in Chapter 13 (individual debt reorganization) than
in Chapter 7 (liquidation), so most areas of the country have a single standing
Chapter 13 trustee who administers all Chapter 13 filings rather than the
"panel" configuration associated with Chapter 7. In certain areas of the
country, the trustee is responsible for sending various notices to the debtor,
debtor's attorney, clerk of the court, United States Trustee and each creditor
indicating that the case has been filed. Because the debtor's assets are NOT
liquidated under Chapter 13, the trustee analyzes the debtor's income and
expenses and directs the debtor to make regular cash payments to the trustee
according to the court-approved plan of reorganization. Each month, the trustee
disburses the monies received from the debtor to eligible creditors according to
the plan. The trustee must provide regular status reports to the United States
Trustee. Every six months, the trustee must also prepare a detailed ledger of
financial activity in each bankruptcy case and mail it to each debtor and
debtor's attorney. Chapter 13 reorganizations usually last between thirty-six
and sixty months. Upon conclusion of the case, the trustee must submit a final
report to the bankruptcy court outlining the financial history of the case.
 
                                       20
<PAGE>
MARKET CONDITIONS
 
    The Company estimates that there are approximately $2 billion in cash
proceeds being administered in Chapter 7 by approximately 1,200 trustees. The
Company estimates there are approximately 550,000 cases pending in Chapter 13
managed by approximately 180 standing Chapter 13 trustees.
 
    MARKET CONDITIONS IN CHAPTER 7
 
    The Company believes that there are favorable market conditions for its
Chapter 7 product and services. Since the introduction of TCMS for Windows95 in
January 1996, the Company has successfully entered new key strategic markets,
including California and New York, two of the largest national bankruptcy
markets. The Company has also successfully entered other key metropolitan areas
and believes that these initial accounts will facilitate significant additional
sales. In November 1996, the Company began releasing a new enhanced version of
the software, TCMS version 2.0, that incorporates substantial new features that
the Company believes are unique in the marketplace. These features include an
internal auditor, e-mail enabled import/export, account receivable management, a
rapid posting module and a rapid case set-up module.
 
    MARKET CONDITIONS IN CHAPTER 13
 
    In October 1994, Congress passed the Bankruptcy Reform Act of 1994 (the
"Reform Act"). Among the changes enacted was an increase in the debt ceiling, or
"cap," that establishes an individual's eligibility to file Chapter 13
bankruptcy. The Reform Act raised the debt cap from $350,000 to $1,000,000. If
the cap is exceeded, the individual must file a Chapter 7 liquidation bankruptcy
or a small Chapter 11. The Company believes the increase in the Chapter 13 debt
cap expands the pool of eligible debtors in Chapter 13 and potentially increases
the number of Chapter 13 filings.
 
THE EPI STRATEGY
 
    The Company's objective is to become the leading provider of technology
based insolvency management systems. To achieve this objective, the Company
intends to continue its intensive product development efforts, to increase its
sales, marketing and distribution capabilities and to distinguish itself as a
provider of advanced information processing products. The Company's strategy for
achieving its objectives includes the following:
 
    - SUSTAIN AND DEVELOP RECURRING REVENUE STRUCTURE.  The Company generates
      the majority of its revenues through recurring fees collected from its
      Chapter 7 and Chapter 13 products. In Chapter 13, the Company collects
      fees from the trustee each month based on the number of cases in the
      database and the number of notices generated. In Chapter 7, the Company
      collects fees every month based on the overall funds on deposit. The
      Company believes that this is a favorable structure for the long term
      future and intends to sustain and develop it.
 
    - ATTAIN TECHNICAL SUPERIORITY IN PRODUCT FEATURES.  The Company intends to
      maintain high technical skills for its product development efforts. The
      Company believes that its successes have been partially attributable to
      its technical acumen in software development technologies, including
      Windows95, Windows NT 4, Microsoft Visual FoxPro, Oracle7, and
      PowerBuilder. The Company intends to maintain a detailed knowledge of the
      most current technical tools and to utilize this knowledge to further its
      product development efforts.
 
    - CAPITALIZE ON GROWTH TRENDS IN BANKRUPTCY FILINGS.  The Company perceives
      that bankruptcy is a growing part of the national economy. In recent years
      there has been significant growth in bankruptcy filings. Recent periods
      have experienced the greatest increases in the rate of bankruptcy filings
      in a decade. Bankruptcy filings surpassed the one million mark for the
      first time in 1996. The Company plans to pursue this business vigorously
      and to increase its market penetration significantly.
 
    - CONTINUE TO PENETRATE NEW GEOGRAPHIC MARKETS.  Since the beginning of
      1996, the Company has successfully entered key new geographic markets,
      including California and New York -- two of
 
                                       21
<PAGE>
      the largest national bankruptcy markets -- with its TCMS product. Company
      management intends to further develop the newly entered markets and to
      begin to penetrate additional key metropolitan areas.
 
    - EVALUATE OPPORTUNITIES IN COMPLEMENTARY BUSINESS LINES.  The Company
      believes that it has developed an unusually detailed perspective on the
      national bankruptcy system and a rare combination of skills in commercial
      software development and insolvency management. Using its core line of
      Chapter 7 and Chapter 13 products as a base, the Company intends to
      explore complementary business lines, which may include products and
      services for debtors' attorneys, commercial claims recovery systems, as
      well as specialty products for international insolvency markets.
 
PRODUCTS
 
    The Company's existing products include TCMS (Trustee Case Management
System) for Chapter 7, and MIDRANGE for Chapter 13. The Company plans to begin
selling a new Chapter 13 product, CASEPOWER, in early 1997. The TCMS product can
also track Chapter 11 cases, and the MIDRANGE/ CASEPOWER products can also track
Chapter 12 cases. The Company produces its software applications internally with
a full time staff of professional software developers.
 
CHAPTER 7 PRODUCTS
 
    The Company's Chapter 7 product assists trustees to manage liquidation
bankruptcies, whereby the trustee liquidates the debtor's assets and disburses
the resulting funds to creditors.
 
GRAPHIC ENTITLED "CHAPTER 7" DEPICTING A TRUSTEE RECEIVING ASSETS FROM THE
DEBTOR AND MAKING PAYMENTS TO CREDITORS. SOFTWARE FEATURES IDENTIFIED INCLUDE
ASSET MANAGEMENT, FUNDS ADMINISTRATION, CREDITOR PAYMENTS, AND GOVERNMENT
REPORTING.
 
    CURRENT CHAPTER 7 PRODUCT: TCMS
 
    TCMS (Trustee Case Management System) is a Windows95/Windows NT 4 based
package of proprietary software, computer equipment and support services offered
to Chapter 7 trustees through a national marketing arrangement with NationsBank.
TCMS provides easy-to-use modules for asset management, financial record keeping
and claims administration. An electronic banking link developed by the Company
gives users an automated mechanism for entering banking transactions, and an
electronic court interface allows users to download claim information into the
trustee's database automatically.
 
    A typical TCMS system is provided to the end-user trustee client without
direct charge and includes the following products and services: (i) a license to
use the proprietary TCMS software and subsequent upgrades; (ii) computer
hardware, laser printer, modem, tape backup and operating software, which are
returned to EPI if the trustee's bankruptcy deposits leave the bank designated
by EPI; (iii) database conversion from previous computer system; (iv)
configuration and installation of hardware by EPI personnel; (v) on-site
software training; (vi) customization of reports conforming to local bankruptcy
court regulations; (vii) toll-free customer service; and (viii) remote
diagnostics. The Company's revenues are based upon the total funds kept on
deposit. See "Pricing -- Chapter 7 Pricing."
 
    SOFTWARE FEATURES
 
    The TCMS software streamlines administrative tasks associated with Chapter 7
liquidation bankruptcies. Most trustees use the system on a daily basis for
record keeping and to meet reporting requirements.
 
                                       22
<PAGE>
    - ASSET MANAGEMENT.  As assets are identified, the trustee enters them into
      TCMS through a convenient spreadsheet-like interface. The system
      automatically tracks the remaining values of assets as they are liquidated
      and provides a summary overview of properties within each case.
 
    - BANKING.  An online banking module developed by the Company allows the
      trustee to open and close bank accounts electronically as well as to enter
      funds transfers. Simple to sophisticated financial transactions can be
      recorded on an online computer screen that resembles a personal check
      register. The system prepares MICR encoded laser checks and deposit slips
      on demand.
 
    - CLAIMS ADMINISTRATION.  TCMS categorizes each claim by class and desired
      priority level for distribution. Distribution checks are calculated and
      printed automatically, and all financial ledgers are updated. An extensive
      library of financial reports provides detailed information for each case.
      A proprietary feature allows information to be downloaded from the court
      into the trustee's database.
 
    - CALENDARING AND DOCKETING.  Key events in asset cases are posted
      automatically to a central trustee's calendar that can be printed
      regularly. The software automatically schedules tasks required to close
      cases in a timely fashion.
 
    - CUSTOMIZED DISTRICT REPORTS.  EPI utilizes OLE (object linking and
      embedding) and ActiveX technology and the Microsoft Word for Windows95
      word processing program to custom tailor final reports and final accounts
      for each district where TCMS is marketed. Preparing these documents has
      traditionally been one of the most time consuming tasks in Chapter 7 case
      administration. With TCMS, trustees can quickly generate a fully
      formatted, polished report with all figures calculated and filled in.
 
    - 180 DAY REPORTS.  The United States Trustee requires the trustee to submit
      detailed status reports for each case every six months in a very specific
      reporting format. TCMS prints these reports in compliance with the most
      recent regulations.
 
                                       23
<PAGE>
CHAPTER 13 PRODUCTS
 
    The Company's Chapter 13 products assist trustees to manage individual
reorganization bankruptcies, whereby the debtor makes payments to the trustee,
who in turn disburses the funds to creditors:
 
GRAPHIC ENTITLED "CHAPTER 13" DEPICTING A TRUSTEE RECEIVING PAYMENTS FROM A
DEBTOR AND MAKING PAYMENTS TO CREDITORS. SOFTWARE FEATURES IDENTIFIED INCLUDE
LEGAL NOTICING, CREDITOR DISTRIBUTIONS, CASE MANAGEMENT, AND GOVERNMENT
REPORTING.
 
    CURRENT CHAPTER 13 PRODUCT: MIDRANGE
 
    MIDRANGE is based on IBM mini-computer AS/400 technology and uses the
Company's proprietary software to assist Chapter 13 trustees managing databases
containing from approximately 500 to over 10,000 active bankruptcies
simultaneously. Because Chapter 13 bankruptcy cases typically undergo thirty-six
to sixty consecutive monthly distributions, Chapter 13 is considerably more
transaction intensive and paperwork intensive than Chapter 7, where a single
distribution is normally made at the end of the case. Chapter 13 trustee clients
out-source various activities to EPI to facilitate the preparation of large
output jobs.
 
    Processing and report printing functions are divided between the client-site
AS/400 installation and EPI's data center in Kansas City. The MIDRANGE is
installed in a multi-user configuration that allows each member of the trustee's
office staff to access the database and enter transactions throughout the
business day. The trustee's live database resides in his or her office. The size
of a Chapter 13 trustee's office staff varies proportionally with the caseload
managed. Therefore, MIDRANGE installations vary in size from three workstations
to over twenty workstations.
 
    The trustee's office staff enters financial information into the MIDRANGE,
including cash receipts, financial adjustments and payment instructions for each
claim. EPI's proprietary program logic interprets a wide variety of
court-directed payment scenarios and consolidates them into easy-to-understand
codes that are entered by users. Daily reports and customized inquiries can be
requested and printed inside the trustee's office.
 
    At the end of each month, the trustee forwards a copy of the database to EPI
in Kansas City. EPI prints distribution checks for each eligible creditor and
prepares detailed laser output for every case in the database as a billable
service. Checks and reports are shipped overnight back to the trustee for
inspection, approval and mailout.
 
    In certain parts of the country, the Chapter 13 trustee is responsible for
noticing parties-in-interest of key developments in each bankruptcy case,
including the setting of the mandatory first meeting of creditors. The Company's
MIDRANGE software automates this meeting notice for the trustees. Other events
that may be noticed through the MIDRANGE include motions to dismiss the case,
reset notices, correcting notices and motions to allow claims. The MIDRANGE
software provides an optional noticing module that receives relevant input from
the office staff. Alternatively, trustees may purchase data entry services from
EPI and forward original documents to Kansas City for keying. Each evening,
EPI's data center receives a modem transmission of daily noticing activity from
the client-site AS/400. EPI prints and reviews the notices, inserts them into
envelopes and mails them the next day. Trustees are billed directly for noticing
services based upon the number of documents generated.
 
    Some bankruptcy courts require additional information, such as a photocopy
of the plan of reorganization, to be included with the notice. EPI offers such
document reproduction and assembly services to trustees at an additional charge.
 
                                       24
<PAGE>
    SOFTWARE FEATURES
 
    The MIDRANGE software helps trustees manage administrative aspects of
Chapter 13 bankruptcy. The trustee and office staff typically use the system
each day to monitor activity in their caseload.
 
    - NOTICING.  When new cases are entered on the MIDRANGE system, the EPI data
      center in Kansas City can extract relevant information and prepare
      mandatory first meeting of creditors notices for each case. Subsequent
      forms, such as reset notices, correcting notices, motions to allow claims,
      motions to allow additional claims and motions to dismiss, can also be
      selected and prepared through the system.
 
    - CASE MANAGEMENT.  The MIDRANGE stores and monitors key dates, names,
      addresses and text notes for every case in the system. A variety of
      retrieval mechanisms enable users to view case information from various
      perspectives.
 
    - FINANCIAL HISTORY.  The office staff enters cash receipts and financial
      adjustments in the system as part of the daily bank deposit. The MIDRANGE
      updates the balances in each case and summarizes the day's financial
      transactions. Each month, the MIDRANGE prepares a single-page summary of
      the receipts and disbursements in every case.
 
    - MONTHLY DISTRIBUTION.  The MIDRANGE's advanced distribution logic
      interprets payment orders from the bankruptcy court. Several different
      payment methodologies (e.g., pro rata, fixed monthly payment, per capita,
      etc.) may be spread over 99 separate distribution priority levels.
      Individual checks or voucher checks can be printed for each creditor.
      Claims having objections filed on them can continue to accrue
      distributions without releasing funds until the objection has been
      settled.
 
    - INQUIRY.  Chapter 13 offices receive a multitude of outside inquiries each
      day from creditors' and debtors' attorneys. The Midrange provides
      instantaneous inquiry access to the financial status of each debtor and
      claim in the system. An optional creditor dial-in system gives outside
      parties inquiry access only to the system through a modem connection.
 
    NEW CHAPTER 13 PRODUCT: CASEPOWER
 
    The Company has developed a new PC-based Windows95/Windows NT 4 Chapter 13
product, CASEPOWER, that is intended to replace the existing MIDRANGE
mini-computer-based product. The Company tested this product in a trustee's
office from early 1996 and concluded such testing in the fourth quarter of 1996.
CASEPOWER is scheduled for general release in early 1997. CASEPOWER is
constructed on client-server architecture, whereby intelligent desktop devices
receive and transmit data and applications to and from file servers. The
database uses the Oracle7 database engine. The front end interface runs under
Microsoft Windows95 and therefore takes advantage of a graphical user interface
(GUI), which the Company believes has yet to be introduced in the mass Chapter
13 market.
 
    CASEPOWER incorporates several advanced technologies that the Company
believes enhance its marketability. These include document imaging, bar coding,
audio and video instruction, speech recognition and outside creditor inquiry
dial-in.
 
    With the CASEPOWER product, EPI has further simplified creditor distribution
logic for the trustee and added important functions, including an interactive
on-screen ledger that consolidates an entire bankruptcy case into a single
window and a comprehensive docketing module that manages court appearances and
key status changes in each bankruptcy case.
 
CHAPTER 7 MARKETING ARRANGEMENT
 
    On November 22, 1993, the Company established an exclusive national
marketing arrangement with NationsBank of Texas, N.A. ("NationsBank"), a
subsidiary of NationsBank Corporation, for its Chapter 7 products. In this
marketing arrangement, EPI and NationsBank promote products and
 
                                       25
<PAGE>
services to trustees in all states. Because Chapter 7 trustees are discouraged
from incurring direct costs for computer services, it is essential for EPI to
align with a bank or series of banks to earn revenues in Chapter 7. NationsBank,
headquartered in Charlotte, North Carolina, is the fourth largest national
banking company. The Company works in partnership with the bank's Federal
Government Banking Division based in Atlanta to market TCMS and NationsBank
banking services as a package. Chapter 7 bankruptcy deposits are housed in
Dallas, where NationsBank has established a customer service team to support
trustees using EPI's products.
 
    The agreement with NationsBank does not have an expiration date. The
termination clause stipulates that either party must provide the other 90 days'
notice if it wishes to end the agreement. The Company believes its
representatives have developed positive, close working relationships with their
counterparts at NationsBank, and the Company believes that it will maintain this
relationship. However, were the relationship with NationsBank to end, there is
no assurance that the Company would be able to establish a new banking
relationship or series of relationships with comparable terms.
 
    EPI holds the primary responsibility for developing all facets of the TCMS
system and for driving the national sales and marketing effort. NationsBank
personnel provide additional assistance in the marketing effort and are
responsible for administering the banking services provided to the trustee
clients.
 
    Through this arrangement, EPI has a continual revenue stream from its
Chapter 7 operations. The structure of the marketing alliance assists
NationsBank to build its deposit base in this market.
 
    The Company continues to support a limited number of trustee relationships
through other banks that predate the exclusive agreement with NationsBank.
 
PRICING
 
    CHAPTER 7 PRICING
 
    Unlike Chapter 13, the application of Chapter 7 bankruptcy regulations has
the practical effect of discouraging trustees from incurring direct
administrative costs for computer expenses. All nationally marketed Chapter 7
systems are provided to trustees without direct billing to the trustee because
of traditional market conventions. Clients typically choose systems based upon
the capability of the software and the quality of technical support services.
EPI has aligned with NationsBank to provide computer services to Chapter 7
trustees without direct charges to the Chapter 7 trustee under the following
arrangement:
 
    - EPI licenses its proprietary software to the trustee and furnishes
      hardware, conversion services, training and customer support, all at no
      cost to the trustee;
 
    - The trustee agrees to deposit with NationsBank the cash proceeds from all
      asset liquidations; and
 
    - NationsBank pays the Company a fee each month based upon the total
      deposits in the Chapter 7 bankruptcy portfolio.
 
GRAPHIC DEPICTING REVENUE STRUCTURE OF THE COMPANY'S TCMS PRODUCT. EPI LICENSES
TCMS TO A TRUSTEE; THE TRUSTEE DEPOSITS MONEY WITH THE BANK; AND THE BANK PAYS
EPI A FEE.
 
    CHAPTER 13 PRICING
 
    The Company typically receives an initial licensing fee and conversion
charge from the Chapter 13 trustee. It also receives monthly fees from each
Chapter 13 trustee client based on the total number of cases in that trustee's
database and the number of noticing documents generated. Variables
 
                                       26
<PAGE>
affecting pricing for EPI Chapter 13 clients include the number of cases in the
database, the type of equipment installed, the volume of noticing to be out
sourced to EPI, and the level of support service selected by the trustee. EPI
prepares individualized price quotes for each client.
 
SALES AND DISTRIBUTION
 
    The Company's products and services are marketed directly to trustees
through on-site sales calls by the Company's internal sales department and, in
the case of Chapter 7, by supporting representatives of NationsBank. Trustees
make their own decisions for software and service providers. The Company
believes that the most important factors in attracting business are the quality
of the software products and the quality of the post-installation support.
 
    The Company's national sales manager is in the Kansas City headquarters and
manages the internal sales force and acts as liaison with the NationsBank
representatives. The Company estimates that a typical sales cycle, from
identification of the client to the receipt of a trustee's agreement, lasts from
two to four months.
 
    The Company's Chapter 7 and Chapter 13 service agreements with trustees
typically include provisions for (i) descriptions of the products and services
included in the agreement, (ii) a limited warranty and indemnification clauses,
(iii) the trustee's agreement to deposit funds with NationsBank (applicable in
Chapter 7 only), and (iv) termination information.
 
    The Executive Office of the United States Trustee in Washington, D.C.,
regularly issues a directory of all current bankruptcy trustees. The Company
obtains this directory as it is issued and uses it as its prospect list.
 
    The Company's sales representatives attend approximately eight bankruptcy
trade shows annually. The Company conducts direct mail campaigns and advertises
in trade journals to heighten its exposure and to stimulate sales.
 
COMPETITION
 
    The Company works in an industry with a limited number of Chapter 7 and
Chapter 13 trustees. The Company estimates that there are approximately 550,000
pending Chapter 13 cases being managed by approximately 180 Chapter 13 trustees,
and that there is approximately $2 billion on deposit by approximately 1,200
Chapter 7 trustees. There are several companies in the market all competing for
sales from this finite group of customers, and some of the Company's competitors
have substantially greater financial and marketing resources than does the
Company. For its Chapter 7 product, the Company competes with the Chase
Manhattan Bank and Union Bank of California, as well as other regional
competitors in selected markets. For its Chapter 13 product, the Company
competes with DCI Corporation of Memphis, Tennessee, a private company, and
other competitors. Although the Company believes that the requisite detailed
knowledge of the bankruptcy system makes it difficult for new competitors to
successfully enter the market, and there are presently a limited number of firms
that offer services that directly compete with the Company's, there can be no
assurance that other firms with resources significantly greater than the
Company's will not enter the Company's industry. The Company's future financial
performance will depend on its ability to maintain existing customer accounts
and to attract business from customer accounts which are currently using a
competitor's software product.
 
FUTURE AND ADDITIONAL PRODUCTS
 
    FUTURE PRODUCTS
 
    The Company is committed to developing its presence in the bankruptcy
industry to the greatest possible extent. In addition to the products for
Chapter 7 and Chapter 13 trustees, the Company intends to develop additional
programs and services for debtors, attorneys and creditors. In late 1996, the
Company announced a new business line, EPI DOCUMENT IMAGING SYSTEMS, in which
paper
 
                                       27
<PAGE>
documents are scanned and stored to CD-ROM technology. Optical Character
Recognition (OCR) features allow full-text search of the CD-ROM, each of which
can store at least 12,000 original documents. EPI DOCUMENT IMAGING SYSTEMS can
be used in concert with the Company's other products to achieve high levels of
integration. Additionally, the Company believes that its document imaging
business eventually can be marketed to a broader client base outside the
insolvency industry, including the legal, medical and claims processing
communities.
 
    Other potential marketing opportunities for the Company may include
complementary lines of business, such as database extraction and updating
services, bankruptcy petition management, commercial claims recovery system and
specialty products for international insolvency markets.
 
    CHAPTER 11
 
    Chapter 11 bankruptcy is normally associated with corporate reorganization
but can also be applied to individuals meeting certain criteria. The Company has
developed a mainframe-based Chapter 11 product that performs noticing, claims
administration, funds distribution and creditor ballot tabulations.
Historically, EPI has marketed this product successfully to large companies
undergoing reorganization, including major airlines and other major companies.
EPI believes that Chapter 11 is one part of the bankruptcy system that is
contracting, as more eligible debtors are turning to private turn-arounds and
workouts in lieu of a formal Chapter 11. Additionally, there are a number of
competitors in Chapter 11 computer services. Accordingly, in light of what the
Company considers to be favorable market conditions in Chapters 7 and 13, the
Company has elected to focus its resources in these areas. While the Chapter 11
product is still available, it is not actively marketed.
 
    CHAPTER 12
 
    Chapter 12 bankruptcy is intended specifically for family farmers. A Chapter
12 case closely resembles Chapter 13 in administrative procedure but has
different debt ceilings that are more suitable for farmers. When Chapter 12
cases are filed in a given area, the standing Chapter 13 trustee often assumes
responsibility for them. The EPI Chapter 13 products have been used to manage
Chapter 12 cases as well.
 
NEW PRODUCT DEVELOPMENT
 
    The Company plans to use approximately $900,000 of the proceeds from this
Offering for software development. This may include the development of new
applications, enhancement to existing applications, hiring of new development
staff, acquisition of new development technologies and/ or training for the
Company's software development staff. The Company produces its software
applications internally with its dedicated staff of professional software
developers. See "Use of Proceeds" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
 
PROPRIETARY RIGHTS
 
    Historically, the Company has not protected its intellectual property rights
through patents or formal copyright registration. It has relied on trade secret,
copyright, and trademark law and non-disclosure agreements to establish and
protect its proprietary rights in its products. The Company believes, however,
that its financial performance will depend more upon the innovation,
technological expertise and marketing abilities of its associates than upon such
protection.
 
    There is no assurance that the Company will be able to protect its trade
secrets or that others will not independently develop substantially equivalent
proprietary information and techniques or otherwise gain access to the Company's
trade secrets. There is no assurance that intellectual property laws will
protect the Company's intellectual property rights. In addition, litigation may
be necessary to
 
                                       28
<PAGE>
enforce the Company's intellectual property rights, to protect the Company's
trade secrets, to determine the validity and scope of the proprietary rights of
others or to defend against claims of infringements. Such litigation could
result in substantial costs and diversion of management and other resources and
could have a material adverse effect on the Company's business, financial
condition and results of operation.
 
    This Prospectus also contains trademarks of other companies. The products of
other companies mentioned herein are for reference purposes only and may be
trademarks or registered trademarks of their respective companies.
 
EMPLOYEES
 
    The Company employs approximately 60 full-time employees, distributed as
follows: (i) 6 in senior management; (ii) 14 in information services; (iii) 23
in client services/sales; (iv) 14 in support services; and (v) 3 in accounting.
No Company employees are covered by collective bargaining agreements. The
Company believes its relationships with its employees are good.
 
PROPERTIES
 
    The Company's corporate offices are located in a 30,000-square-foot facility
leased in Kansas City, Kansas. In connection with corporate growth and the
development of new products, this facility has been recently renovated with
additional office space. The Company believes that this facility will be
adequate for use for at least the next full year. The leased facility is
partially owned by a related party. See "Certain Transactions."
 
LEGAL PROCEEDINGS
 
    The Company is not a party to any material litigation, although it
occasionally becomes involved in litigation arising in the normal course of
business. Management believes that any liability with respect to such actions
will not have a material adverse effect on the Company's financial position or
results of operation.
 
                                       29
<PAGE>
                                   MANAGEMENT
 
DIRECTORS AND EXECUTIVE OFFICERS
 
    The executive officers and directors of the Company, their ages as of
September 30, 1996 and their positions are set forth below.
 
   
<TABLE>
<CAPTION>
           NAME                  AGE                                   POSITION
- ---------------------------      ---      ------------------------------------------------------------------
<S>                          <C>          <C>
Tom W. Olofson (1)(2)                54   Chairman, President and Chief Executive Officer
 
Christopher E. Olofson               26   Executive Vice President, Chief Operating Officer, and Director
 
Albert T. Annillo                    45   Senior Vice President
 
Reed A. Eichner                      38   Vice President -- Operations
 
Nanci R. Trutna                      43   Vice President -- Finance
 
Sally D. MacDonald                   49   Vice President -- Human Resources
 
Robert C. Levy *                     49   Secretary and Director
 
W. Bryan Satterlee *                 62   Director
</TABLE>
    
 
- ------------------------
   
*   Member of Audit Committee
    
 
    TOM W. OLOFSON led a private investor group that acquired the Company in
July 1988, and he has served as Chief Executive Officer and Chairman of the
Board since that time. During his business career, Mr. Olofson has held various
management positions with Xerox Corporation and was a Senior Vice President and
member, Office of the President of Marion Laboratories (now Hoechst Marion
Roussel, Inc.). Mr. Olofson is a director of Saztec International, Inc., a
provider of information management services, and also serves as a director of
various private companies in which he is an investor. He earned a BBA from the
University of Pittsburgh in 1963, and is currently a member of the Board of
Visitors of the Katz Graduate School of Business at the University of
Pittsburgh. He is the father of Christopher E. Olofson.
 
    CHRISTOPHER E. OLOFSON joined EPI as a Vice President in June 1993, having
been a part-time employee of the Company since 1988. In January 1994, he was
designated Senior Vice President -- Operations, and became Executive Vice
President and a member of the Board of Directors effective January 1, 1995.
Effective July 1, 1996, Mr. Olofson also assumed the duties of Chief Operating
Officer. He earned an AB degree from Princeton University in 1992, SUMMA CUM
LAUDE. He was designated a Fulbright Scholar where he completed a one-year
program of study at the Stanford University Center in Taipei, Taiwan in 1993. He
is the son of Tom W. Olofson.
 
    ALBERT T. ANNILLO has been Senior Vice President since January 1995. Mr.
Annillo joined the Company in October 1992 as a corporate Vice President. He was
Assistant Director, Executive Office for United States Trustees, Department of
Justice, Washington, D.C. for six years before his association with the Company.
He earned an MBA and an MED from William Patterson College in 1975 and 1979,
respectively.
 
    REED A. EICHNER joined the Company as Vice President -- Sales and Marketing
in September 1995. He became Vice President -- Operations on September 1, 1996.
From May 1991 through August 1995 he served as President and owner of
Connexions, Inc., a company which provided system integration and document
conversion services. He was General Manager of Innovision Systems, Inc. from
September 1989 to May 1991. Mr. Eichner earned a BA from the University of North
Carolina in 1982.
 
                                       30
<PAGE>
    NANCI R. TRUTNA assumed her present position as Vice President -- Finance in
June 1993. She was with Merchants Bank, Kansas City, Missouri from 1981 to June
1993 where she became a Senior Vice President. Ms. Trutna is a Certified Public
Accountant and earned a BSBA in 1975 from the University of North Dakota.
 
    SALLY D. MACDONALD joined the Company as Vice President -- Human Resources
in January 1996. Ms. MacDonald has extensive management experience in the human
resources field. She served as Region Human Resources Manager for Network
General, Inc. from 1992 to 1994, as Manager, Employment with North Supply
Company from 1989 to 1991, and as Manager, Employment and Employee Relations
with Informix Software, Inc. from 1986 to 1989. Ms. MacDonald earned a BS in
Business Administration from the University of San Francisco in 1984.
 
    ROBERT C. LEVY is an attorney who is a director, stockholder and executive
committee member of the law firm of Seigfreid, Bingham, Levy, Selzer & Gee in
Kansas City, Missouri. He has been the Corporate Secretary and a Director of the
Company since July 1988. He earned a BS from Northwestern University in 1968,
and a J.D. from the University of California at Berkeley in 1971. Mr. Levy
formerly was Chairman of the Board of Directors of Blue Cross and Blue Shield of
Kansas City and presently serves as a member of that Board of Directors.
 
    W. BRYAN SATTERLEE was elected to the Company's Board of Directors effective
as of the date of this Prospectus. Mr. Satterlee has been a partner since 1989
in NorthEast Ventures, a consulting firm based in Hartford, Connecticut which
specializes in business development services for and evaluations of
technology-based venture companies. He has extensive general management and
marketing experience in technology-based firms. Mr. Satterlee's background
includes ten years of management experience with IBM, as well as having been a
founder of a computer leasing/software business, telecommunications company and
a venture investment services business. He earned a BS in 1956 from Lafayette
College.
 
EXECUTIVE COMPENSATION
 
    The following table sets forth the cash and other compensation paid in 1995
to the Company's Chief Executive Officer. No other executive officer of the
Company earned in excess of $100,000 in 1995.
 
                           SUMMARY COMPENSATION TABLE
 
<TABLE>
<CAPTION>
                                                                      ANNUAL COMPENSATION
                                                             --------------------------------------    ALL OTHER
                                                              SALARY                 OTHER ANNUAL    COMPENSATION
NAME AND PRINCIPAL POSITION                         YEAR      (1)(2)      BONUS    COMPENSATION (3)     (4)(5)
- ------------------------------------------------  ---------  ---------  ---------  ----------------  -------------
<S>                                               <C>        <C>        <C>        <C>               <C>
Tom W. Olofson, Chairman/CEO....................       1995  $  47,980  $  24,000     $   36,500       $   9,920
</TABLE>
 
- ------------------------
(1) Tom W. Olofson's compensation in 1996 will be approximately the same as it
    was in 1995. Effective January 1, 1997, Mr. Olofson's annual salary will be
    $100,000.
 
(2) Christopher E. Olofson, Executive Vice President and Chief Operating
    Officer, is being paid a base salary of $108,000 in 1996. Effective January
    1, 1997, this annual base salary will be $120,000.
 
(3) Includes $33,452 for payment of annual life insurance premiums on policies
    owned by Tom W. Olofson, which designate Jeanne H. Olofson, his wife, as the
    beneficiary, and $3,048 for personal use of Company automobile.
 
(4) Company benefits which include $8,276 for group insurance and $1,644 for
    Company matching contributions to 401(k) plan.
 
(5) Does not include: (i) fees of $24,658 paid during 1995 for guaranteeing the
    Company's debt or (ii) interest of $40,000 on a subordinated note in 1995 on
    amounts borrowed by the Company from Tom W. Olofson. See "Certain
    Transactions."
 
                                       31
<PAGE>
BOARD OF DIRECTORS COMPENSATION
 
    The Board of Directors compensates its non-employee members at the rate of
$750 per quarter and $750 per meeting attended.
 
    The Company will grant an option to W. Bryan Satterlee for 7,500 shares of
Common Stock at an exercise price equal to the initial public offering price.
 
STOCK OPTION PLAN
 
    On October 17, 1995, the Company adopted a stock option plan ("the "1995
Plan"), which was amended on November 4, 1996. The 1995 Plan provides for the
issuance of options to employees, officers and directors of the Company
("Eligible Participants") to purchase up to an aggregate of 270,000 shares of
Common Stock, subject to adjustment under certain circumstances. Options granted
under the 1995 Plan may be either "incentive stock options" ("ISOs") as defined
by Section 422 of the United States Internal Revenue Code of 1986, as amended
(the "Code") or non-statutory stock options ("NSO's").
 
   
    The 1995 Plan is administered by the Board of Directors. The Board of
Directors has sole discretion and authority, consistent with the provisions of
the 1995 Plan, to grant ISOs or NSOs, determine in good faith the fair market
value of the shares, select the eligible participants to whom options will be
granted under the 1995 Plan, construe and interpret the Plan, promulgate, amend
and rescind rules and regulations for the administration thereof, and make such
other determinations which are necessary and advisable for the 1995 Plan's
administration.
    
 
   
    The exercise price of ISOs granted under the 1995 Plan shall be no less than
the fair market value of a share of Common Stock on the date the option is
granted (110% with respect to ISO optionees who own at least 10% of the
outstanding Common Stock of the Company). As respects NSOs, the exercise price
shall be determined by the Board of Directors and may be less than the fair
market value. The Board of Directors has the authority to determine the time or
times at which options granted under the 1995 Plan become exercisable, but
options expire no later than ten years from the date of grant (five years with
respect to optionees who own at least 10% of the outstanding Common Stock of the
Company). Options are nontransferable, other than by will and the laws of
descent, and generally may be exercised only by an employee while employed by
the Company or within 90 days after termination of employment or one year in the
event of termination by reason of death or disability.
    
 
    The Company has reserved an aggregate of 270,000 shares of the Company's
Common Stock for issuance under the 1995 Plan. There will be outstanding at the
closing of this Offering options to purchase 119,500 shares of Common Stock
exercisable at the Offering price. Options granted under the 1995 Plan are
exercisable in cash or by delivery to the Company of shares of the Company's
Common Stock. The Company will grant an option to Christopher E. Olofson,
Executive Vice President and Chief Operating Officer, for 25,000 shares of
Common Stock at an exercise price equal to 110% of the initial public offering
price. The Company will grant an option to W. Bryan Satterlee, Director, for
7,500 shares of Common Stock at an exercise price equal to the initial public
offering price. Both of these options will be granted on the closing date of
this Offering.
 
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
 
    The Company's by-laws provide that the Company shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit, or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was a
director or officer of the Company (or is or was serving at the request of the
Company as a director or officer of another entity) against expenses, including
attorneys' fees, judgments, fines, and amounts paid in settlement (except that,
in connection with an action by or in the right of the Company, the indemnity
shall be limited to expenses, including attorneys' fees, and amounts paid in
 
                                       32
<PAGE>
settlement) actually and reasonably incurred by him in connection with such
action, suit, or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Company
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful.
 
    To the extent that a director, officer, employee, or agent has been
successful on the merits or otherwise in defense of any action, suit, or
proceeding, or in defense of any claim, he shall be indemnified against
expenses, including attorneys' fees, actually and reasonably incurred by him in
connection with the action, suit, or proceeding. Expenses incurred in defending
a civil or criminal action, suit or proceeding may be paid by the Company in
advance of the final disposition of the action, suit, or proceeding. The
indemnification discussed in this section is not exclusive of any other rights
the party may have seeking indemnification.
 
    The Company believes that it is the position of the Securities and Exchange
Commission that insofar as the foregoing provision may be invoked to disclaim
liability for damages arising under the Securities Act of 1933, as amended (the
"Securities Act"), the provision is against public policy as expressed in the
Securities Act and is therefore unenforceable. Such limitation of liability also
does not affect the availability of equitable remedies such as injunctive relief
or rescission.
 
                              CERTAIN TRANSACTIONS
 
    In July 1988, an unaffiliated venture capital firm purchased a $400,000
subordinated note and a stock purchase warrant from the Company. In October
1991, the Company's Board of Directors deemed it in the best interest of the
Company to purchase the subordinated note and stock purchase warrant from the
venture capital firm. Because the Company could not then complete this
transaction without incurring additional debt, Tom W. Olofson, Chairman and
Chief Executive Officer, purchased the subordinated note and stock purchase
warrant. This subordinated note payable to Mr. Olofson is still outstanding in
the amount of $400,000. The note provides for interest at the rate of 10% with a
maturity date of July 1998. Interest paid to Tom W. Olofson under this agreement
was $40,000 per year for 1996, 1995 and 1994. The stock purchase warrant
provided for the acquisition of 969,228 shares of the Company's Common Stock at
$.4125 per share at any time prior to July 14, 1998 (giving retroactive effect
to the six-for-one stock split). The Company has calculated and recorded a value
of such stock purchase warrant in the amount of $41,000, with the value being
calculated using the difference between net book value and exercise price per
share. In an October 11, 1996 agreement between the Company and Mr. Olofson, it
was agreed that the Company would pay $41,000 to Mr. Olofson on or before
December 31, 1996, at which time the stock purchase warrant would be retired.
The Company intends to repay the $400,000 outstanding face value of the
subordinated note to Mr. Olofson from the proceeds of the Offering. See "Use of
Proceeds."
 
    The Company has a noncancellable operating lease for its corporate
headquarters which expires in February 2001. Tom W. Olofson holds a 50%
interest, as a general partner, in T & J Investment Company, a Kansas general
partnership ("T & J Investment Company") that leases this facility to the
Company. The lease requires the Company to pay all executory costs (property
taxes, maintenance and insurance). Rental expense is scheduled to be $146,625
for the year ended December 31, 1996. Rental expense under a predecessor lease
between the Company and T & J Investment Company was $142,125 and $137,625 for
the years ended December 31, 1995 and 1994, respectively.
 
    Tom W. Olofson personally guarantees substantially all of the Company's
outstanding debt. Fees totaling $24,658 and $23,250 were paid to Mr. Olofson
during 1995 and 1994, respectively, for guaranteeing the Company's debt. Upon
application of the proceeds of the Offering to retire certain corporate debt,
Tom W. Olofson's guarantee obligations with respect to such debt will be
extinguished. See "Use of Proceeds."
 
                                       33
<PAGE>
    During the period February 1993 through March 1995, the Company secured a
line of credit in the amount of $350,000 from Tom W. Olofson. The loan was
evidenced by a line of credit note providing interest at the rate of 10%. The
maximum amount borrowed by the Company during this time period was $310,000 and
the note was paid off in its entirety in June 1994. Interest expense of $10,501
was recognized on the note payable outstanding to Mr. Olofson in 1994.
 
    The Company believes that all prior transactions between the Company and its
officers, directors, or other affiliates of the Company were on terms no less
favorable than could have been obtained from unaffiliated third parties on an
arm's length basis. All future transactions, loans and any forgiveness of loans,
with directors, officers or stockholders holding more than 5% of the Company's
outstanding Common Stock, or affiliates of any such persons, will be made for
bona fide business purposes and will be on terms no less favorable than could be
obtained from an unaffiliated third party and will be approved by a majority of
the independent outside directors who do not have an interest in the
transactions.
 
                             PRINCIPAL STOCKHOLDERS
 
    The following table sets forth certain information regarding the beneficial
ownership of shares of Common Stock as of the date of this Prospectus for (i)
each director and director nominee of the Company; (ii) each person known to the
Company to be the beneficial owner of more than 5% of the outstanding shares;
and (iii) all directors and executive officers as a group. Except pursuant to
applicable community property laws or as otherwise indicated, each stockholder
has sole voting and investment power with respect to the shares beneficially
owned.
 
<TABLE>
<CAPTION>
                                                                          PERCENTAGE BENEFICIALLY OWNED
                                                          NUMBER OF   --------------------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER (1)                   SHARES      BEFORE OFFERING     AFTER OFFERING
- -------------------------------------------------------  -----------  -----------------  -------------------
<S>                                                      <C>          <C>                <C>
Tom W. Olofson (2).....................................    1,620,000          90.0%               47.6%
Christopher E. Olofson.................................      109,500           6.1%                3.2%
Robert C. Levy.........................................       30,000           1.7%                1.0%
W. Bryan Satterlee.....................................            0         --                  --
All directors and executive officers as a group (4
 persons)..............................................    1,759,500          97.8%               51.8%
</TABLE>
 
- ------------------------
 
(1) The address of all of the named individuals is c/o Electronic Processing,
    Inc., 501 Kansas Avenue, Kansas City, Kansas 66105.
 
(2) Excludes 19,500 shares owned by Mr. Olofson's adult son, Scott W. Olofson,
    as to which shares Mr. Olofson disclaims beneficial ownership.
 
                                       34
<PAGE>
                           DESCRIPTION OF SECURITIES
 
COMMON STOCK
 
    The authorized capital stock of the Company consists of 5,000,000 shares,
$0.01 par value. As of November 4, 1996, there were 1,800,000 shares of Common
Stock outstanding held of record by six stockholders. The holders of Common
Stock are entitled to one vote for each share held of record on all matters
submitted to a vote of the holders of Common Stock. The holders of Common Stock
are entitled to receive ratably such dividends as may be declared by the Board
of Directors out of funds legally available therefor. See "Dividend Policy." In
the event of a liquidation, dissolution or winding up of the Company, the
holders of Common Stock are entitled to share ratably in all assets remaining
after payment of liabilities. The holders of Common Stock have no preemptive or
subscription rights and there are no redemption or conversion rights with
respect to such shares. All outstanding shares of Common Stock are fully paid
and non-assessable and the shares of Common Stock to be issued upon completion
of the Offering will be fully paid and non-assessable.
 
UNDERWRITER'S WARRANT
 
    In connection with the Offering, the Company has agreed to issue the
Underwriter a warrant to purchase up 160,000 shares of Common Stock at an
exercise price per share equal to 120% of the Price to Public. The Underwriter's
Warrant is non-transferable for a period of one year following the date of this
Prospectus. Thereafter, the Underwriter's Warrant may not be transferred other
than by will or pursuant to the operation of law, except to a person who is an
officer of the Underwriter. The Underwriter's Warrant is exercisable an any time
during the four year period beginning one year after the date of this
Prospectus.
 
TRANSFER AGENT AND REGISTRAR
 
    The Transfer Agent and Registrar for the Common Stock is Norwest Bank of
Minnesota, N.A.
 
SHARES ELIGIBLE FOR FUTURE SALE
 
    Upon completion of the Offering, the Company will have outstanding 3,400,000
shares of Common Stock. All of the 1,600,000 shares of Common Stock offered
hereby will be freely transferable without restriction or further registration
under the Securities Act, except for any shares purchased by any person who is
or thereby becomes an "affiliate" of the Company, which shares will be subject
to the resale limitations contained in Rule 144 promulgated under the Securities
Act as described below. The remaining 1,800,000 shares of Common Stock currently
outstanding, of which 1,759,500 are held by affiliates of the Company, may not
be sold unless registered under the Securities Act or sold pursuant to an
applicable exemption from registration or pursuant to Rule 144.
 
    In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated), including a person who may be deemed to be an
"affiliate" of the Company as that term is defined under the Securities Act, is
entitled to sell, within any three month period, the number of shares
beneficially owned for at least two years that does not exceed the greater of
(i) one percent of the number of the then outstanding shares of Common Stock; or
(ii) the average weekly trading volume of the Common Stock during the four
calendar weeks preceding such sale. Sales under Rule 144 are also subject to
certain requirements as to the manner of sale, notice and the availability of
current public information about the Company. Furthermore, a person who is not
deemed to have been an affiliate of the Company during the ninety days preceding
a sale by such person and who has beneficially owned such shares for at least
three years is entitled to sell such shares without regard to the volume, manner
of sale or notice requirement.
 
    Up to 160,000 additional shares of Common Stock may be purchased by the
Underwriter through the exercise of the Underwriter's Warrant. The Underwriter's
Warrant will be exercisable at an exercise price equal to 120% of the price to
the public and will be exercisable at any time and from time to time during the
four year period commencing one year from the date of this Prospectus. Any and
all
 
                                       35
<PAGE>
of such shares of Common Stock will be transferable without restriction,
provided that the Company satisfies certain securities registration requirements
in accordance with the terms of the Underwriter's Warrant. See "Underwriting."
 
    Prior to the Offering, no public market for the Company's securities has
existed. Following the Offering, no predictions can be made of the effect, if
any, of future public sales of restricted shares or the availability of
restricted shares for sale in the public market. Moreover, the Company cannot
predict the number of shares of Common Stock that may be sold in the future
pursuant to Rule 144 because such sales will depend on, among other factors, the
market price of the Common Stock and the individual circumstances of the holders
thereof. The availability for sale of substantial amounts of Common Stock could
adversely affect prevailing market prices for the Company's securities.
 
    All of the existing stockholders have entered or are expected to enter into
agreements (the "Lockup Agreements") under which they agree not to sell or
otherwise dispose of their equity securities without the prior written consent
of the Underwriter (which consent may not be unreasonably withheld) for a period
of six months from the date of this Prospectus.
 
    After 90 days from the date of this Prospectus, the Company may file a
registration statement on Form S-8 under the Securities Act to register the
shares issuable to employees, directors and consultants upon exercise of stock
options granted or to be granted under its stock option plan. Upon the
effectiveness of that registration statement, shares that are not otherwise
subject to the Lockup Agreement referred to above will be available for
immediate resale to the public market.
 
                                       36
<PAGE>
                                  UNDERWRITING
 
    The Company has entered into an Underwriting Agreement with R. J. Steichen &
Company (the "Underwriter") pursuant to which the Underwriter has agreed,
subject to the terms and conditions of the Underwriting Agreement, to purchase
from the Company, and the Company has agreed to sell to the Underwriter shares
of Common Stock at the offering price less the underwriting discount set forth
on the cover page of this Prospectus. The Underwriting Agreement provides that
the obligations of the Underwriter to pay for and accept delivery of the
securities offered hereby are subject to the approval of certain legal matters
by their counsel and to certain other conditions. The Underwriter is committed
to take and pay for all of the Common Stock offered hereby (other than those
covered by the over-allotment option described below), if any are taken.
 
    The Underwriter has advised the Company that it proposes to offer the Common
Stock directly to the public at the public offering price set forth on the cover
page of this Prospectus and to certain selected dealers at such price less a
concession not in excess of $.     per share. The Underwriter may allow and such
dealers may reallow a concession not in excess of $.     per share to certain
other dealers. After the initial public offering, the Price to Public,
concession and reallowance may be changed by the Underwriter.
 
    The Company has granted to the Underwriter an option, exercisable within 45
days from the date of this Prospectus, to purchase up to an additional 240,000
shares of Common Stock, at the initial public offering price, solely for the
purpose of covering over-allotments, if any. The Underwriter may exercise this
option only to cover over-allotments in the sale of Common Shares. In addition,
the Company has agreed to pay to the Underwriter at the closing of the Offering
a non-accountable expense allowance of 3% of the aggregate public offering price
to cover expenses incurred by the Underwriter in connection with the Offering,
reduced by amounts advanced by the Company which, as of the date of this
Prospectus, are $10,000.
 
    The Company has agreed to issue the "Underwriter's Warrant" to purchase up
to 160,000 shares of Common Stock. The Underwriter's Warrant will be
exercisable, at a price equal to 120% of the Price to Public, commencing one
year from the date of this Prospectus and will remain excercisable for a period
of four years after such date. The Underwriter's Warrant provides certain rights
to request that the Company register the sale of the shares of Common Stock
underlying the Underwriter's Warrant at such time as the Company is eligible to
use the Securities and Exchange Commission Form S-3 for such registration. The
Underwriter's Warrant is not transferable for one year from the date of this
Prospectus. Thereafter, the Underwriter's Warrant may not be transferred other
than by will or pursuant to the operation of law, except to a person who is an
officer of the Underwriter.
 
    The Underwriter has informed the Company that it does not intend to confirm
sales to accounts over which they exercise discretionary authority.
 
    The Underwriting Agreement provides for reciprocal indemnification between
the Company and the Underwriter against civil liabilities in connection with the
Offering, including liabilities under the Securities Act. Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted pursuant to the foregoing provisions, the Company has been informed
that, in the opinion of the Commission, such indemnification is against public
policy as expressed in such Act and is therefore unenforceable.
 
    The Company and its officers, directors and each holder of Common Stock
outstanding immediately prior to the Offering have agreed with the Underwriter
that, without the Underwriter's consent (which may not be unreasonably
withheld), they will not sell, transfer, or otherwise dispose of any equity
securities of the Company for a period of six months from the date of this
Prospectus.
 
    Prior to the Offering, there has been no public market for the Common Stock
of the Company. The initial public offering price for the Common Stock was
determined by negotiation between the
 
                                       37
<PAGE>
Company and the Underwriter. Among the factors considered in determining the
offering price were the prevailing market conditions, the Company's financial
and operating history and condition, its prospects and the prospects for its
industry in general and the management of the Company. After completion of this
Offering, the market price of the Common Stock is subject to change as a result
of market conditions and other factors.
 
    The foregoing is a brief summary of the provisions of the Underwriting
Agreement and the Underwriter's Warrant and does not purport to be a complete
statement of their terms and conditions. The Underwriting Agreement and the
Underwriter's Warrant have been filed as an exhibit to the registration
statement of which this Prospectus is a part.
 
                                 LEGAL MATTERS
 
    The validity of the securities offered hereby will be passed upon for the
Company by Petillon & Hansen, Torrance, California. Certain legal matters for
the Underwriters will be passed upon by Fredrikson & Byron, P.A., Minneapolis,
Minnesota.
 
                                    EXPERTS
 
    The financial statements for the years ended December 31, 1995 and 1994 and
for the nine months ended September 30, 1996 included in this Prospectus and in
the registration statement have been so included in reliance on the report of
Baird, Kurtz & Dobson, independent accountants, given on the authority of said
firm as experts in auditing and accounting.
 
                             ADDITIONAL INFORMATION
 
   
    Prior to this Offering, the Company has not been subject to the reporting
requirements of the Securities Exchange Act of 1934. The Company has filed with
the Securities and Exchange Commission a registration statement on Form SB-2
("Registration Statement"), together with exhibits thereto, relating to the
securities offered hereby. This Prospectus, which constitutes a part of the
Registration Statement, omits certain of the information set forth in the
Registration Statement. For further information with respect to the Company and
to the securities offered hereby, reference is made to such Registration
Statement. Statements contained in this Prospectus as to the content of any
contract or other document referred to are not necessarily complete, and in each
instance, reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement, each such statement being qualified
by such reference. The Registration Statement and exhibits can be inspected and
copied at the public reference section at the Commission's principal office, 450
5th Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at the
Commission's Regional Offices located at the Northwestern Atrium Center, Suite
1400, 500 West Madison Street, Chicago, Illinois 60661-2511, and 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies may be obtained from the
Commission's principal office upon payment of the fees prescribed by the
Commission. The Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding issuers that file
electronically with the Commission (http://www.sec.gov). Statements contained in
this Prospectus as to the contents of any contract or other document referred to
are not necessarily complete and in each instance reference is made to the copy
of such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified by such reference.
    
 
    The Company intends to furnish its securityholders with annual reports
containing audited financial statements and interim reports containing unaudited
financial statements.
 
                                       38
<PAGE>
                          ELECTRONIC PROCESSING, INC.
 
                          DECEMBER 31, 1994 AND 1995,
                             AND SEPTEMBER 30, 1996
 
                                     INDEX
 
<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
INDEPENDENT ACCOUNTANTS' REPORT...........................................   F-2
 
FINANCIAL STATEMENTS
 
  Balance Sheets..........................................................   F-3
 
  Statements of Income....................................................   F-5
 
  Statements of Changes in Stockholders' Equity...........................   F-6
 
  Statements of Cash Flows................................................   F-7
 
  Notes to Financial Statements...........................................   F-8
</TABLE>
 
                                      F-1
<PAGE>
                        INDEPENDENT ACCOUNTANTS' REPORT
 
Board of Directors
Electronic Processing, Inc.
Kansas City, Kansas
 
    We have audited the accompanying balance sheets of ELECTRONIC PROCESSING,
INC. as of December 31, 1994 and 1995, and September 30, 1996, and the related
statements of income, changes in stockholders' equity and cash flows for each of
the years ended December 31, 1994 and 1995, and the nine months ended September
30, 1996. 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 ELECTRONIC PROCESSING, INC.
as of December 31, 1994 and 1995, and September 30, 1996, and the results of its
operations and its cash flows for each of the years ended December 31, 1994 and
1995, and the nine months ended September 30, 1996, in conformity with generally
accepted accounting principles.
 
                                          BAIRD, KURTZ & DOBSON
 
Kansas City, Missouri
November 8, 1996
 
                                      F-2
<PAGE>
                          ELECTRONIC PROCESSING, INC.
                                 BALANCE SHEETS
                          DECEMBER 31, 1994 AND 1995,
                             AND SEPTEMBER 30, 1996
                                     ASSETS
 
<TABLE>
<CAPTION>
                                                                 DECEMBER 31,               SEPTEMBER 30, 1996
                                                         ----------------------------  ----------------------------
                                                             1994           1995          ACTUAL        PRO FORMA
                                                         -------------  -------------  -------------  -------------
<S>                                                      <C>            <C>            <C>            <C>
CURRENT ASSETS
  Cash and cash equivalents............................  $      62,526  $      26,938  $      13,777  $      13,777
  Accounts receivable, trade, less allowance for
   doubtful accounts of $5,000.........................        432,011        474,796        689,249        689,249
  Other receivables....................................         76,073            566          3,128          3,128
  Prepaid expenses and other...........................        148,247        135,194        146,528        146,528
  Deferred income taxes                                                                                       6,700
                                                         -------------  -------------  -------------  -------------
    Total Current Assets...............................        718,857        637,494        852,682        859,382
                                                         -------------  -------------  -------------  -------------
PROPERTY AND EQUIPMENT, At cost
  Furniture and fixtures...............................        274,972        354,413        366,712        366,712
  Computer equipment...................................      1,815,146      2,322,751      3,048,889      3,048,889
  Office equipment.....................................        337,676        337,676        296,369        296,369
  Leasehold improvements...............................        220,896        253,669        247,494        247,494
  Transportation equipment.............................         14,969         14,969         14,969         14,969
                                                         -------------  -------------  -------------  -------------
                                                             2,663,659      3,283,478      3,974,433      3,974,433
  Less accumulated depreciation........................      1,374,094      1,800,120      1,921,617      1,921,617
                                                         -------------  -------------  -------------  -------------
                                                             1,289,565      1,483,358      2,052,816      2,052,816
                                                         -------------  -------------  -------------  -------------
SOFTWARE DEVELOPMENT COSTS, Net of amortization........      1,017,457      1,044,421      1,182,119      1,182,119
                                                         -------------  -------------  -------------  -------------
INTANGIBLE ASSETS, Net of amortization
  Excess of cost over fair value of net assets
   acquired............................................         67,526         65,512         64,003         64,003
  Organization costs...................................          8,720
                                                         -------------  -------------  -------------  -------------
                                                                76,246         65,512         64,003         64,003
                                                         -------------  -------------  -------------  -------------
OTHER ASSETS
  Deferred stock issuance costs........................                       127,589        192,338        192,338
  Other................................................         26,533         18,386         34,670         34,670
                                                         -------------  -------------  -------------  -------------
                                                                26,533        145,975        227,008        227,008
                                                         -------------  -------------  -------------  -------------
                                                         $   3,128,658  $   3,376,760  $   4,378,628  $   4,385,328
                                                         -------------  -------------  -------------  -------------
                                                         -------------  -------------  -------------  -------------
</TABLE>
 
                       See Notes to Financial Statements
 
                                      F-3
<PAGE>
                          ELECTRONIC PROCESSING, INC.
                           BALANCE SHEETS (CONTINUED)
                          DECEMBER 31, 1994 AND 1995,
                             AND SEPTEMBER 30, 1996
                      LIABILITIES AND STOCKHOLDERS' EQUITY
 
<TABLE>
<CAPTION>
                                                                 DECEMBER 31,               SEPTEMBER 30, 1996
                                                         ----------------------------  ----------------------------
                                                             1994           1995          ACTUAL        PRO FORMA
                                                         -------------  -------------  -------------  -------------
 
<S>                                                      <C>            <C>            <C>            <C>
CURRENT LIABILITIES
  Current maturities of long-term debt.................  $     587,293  $     830,214  $     697,648  $     697,648
  Accounts payable.....................................        217,045        263,197        366,960        366,960
  Accrued expenses.....................................         63,541         67,567        113,625        113,625
  Redeemable stock purchase warrant....................                                       41,000         41,000
  Dividends declared...................................                                                     151,060
                                                         -------------  -------------  -------------  -------------
    Total Current Liabilities..........................        867,879      1,160,978      1,219,233      1,370,293
                                                         -------------  -------------  -------------  -------------
 
LONG-TERM DEBT.........................................      1,016,439      1,016,540      1,850,093      1,850,093
                                                         -------------  -------------  -------------  -------------
 
DEFERRED INCOME TAXES..................................                                                     282,600
                                                         -------------  -------------  -------------  -------------
 
SUBORDINATED DEBT......................................        400,000        400,000        400,000        400,000
                                                         -------------  -------------  -------------  -------------
 
REDEEMABLE STOCK PURCHASE WARRANT......................         35,000         41,000
                                                         -------------  -------------  -------------  -------------
 
STOCKHOLDERS' EQUITY
  Common stock, $.01 par value; authorized 5,000,000
   shares; issued and outstanding 1,800,000 shares.....         18,000         18,000         18,000         18,000
  Additional paid-in capital...........................        282,000        282,000        282,000        464,342
  Retained earnings....................................        509,340        458,242        609,302
                                                         -------------  -------------  -------------  -------------
                                                               809,340        758,242        909,302        482,342
                                                         -------------  -------------  -------------  -------------
                                                         $   3,128,658  $   3,376,760  $   4,378,628  $   4,385,328
                                                         -------------  -------------  -------------  -------------
                                                         -------------  -------------  -------------  -------------
</TABLE>
 
                       See Notes to Financial Statements
 
                                      F-4
<PAGE>
                          ELECTRONIC PROCESSING, INC.
                              STATEMENTS OF INCOME
                   YEARS ENDED DECEMBER 31, 1994 AND 1995 AND
                 NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1996
 
<TABLE>
<CAPTION>
                                                               YEARS ENDED                NINE MONTHS ENDED
                                                               DECEMBER 31,                 SEPTEMBER 30,
                                                       ----------------------------  ----------------------------
                                                           1994           1995                          1996
                                                       -------------  -------------      1995       -------------
                                                                                     -------------
                                                                                      (UNAUDITED)
<S>                                                    <C>            <C>            <C>            <C>
OPERATING REVENUES...................................  $   4,984,697  $   5,233,959  $   3,843,292  $   4,638,685
                                                       -------------  -------------  -------------  -------------
COST OF GOODS SOLD AND DIRECT COSTS
  Processing costs...................................      2,218,143      2,098,401      1,565,594      1,857,034
  Depreciation and amortization......................        576,462        687,314        504,399        587,493
                                                       -------------  -------------  -------------  -------------
                                                           2,794,605      2,785,715      2,069,993      2,444,527
                                                       -------------  -------------  -------------  -------------
GROSS PROFIT.........................................      2,190,092      2,448,244      1,773,299      2,194,158
                                                       -------------  -------------  -------------  -------------
OPERATING EXPENSES
  General and administrative.........................      1,717,238      1,947,794      1,379,843      1,713,856
  Depreciation and amortization......................         83,293         87,895         66,334         66,810
                                                       -------------  -------------  -------------  -------------
                                                           1,800,531      2,035,689      1,446,177      1,780,666
                                                       -------------  -------------  -------------  -------------
INCOME FROM OPERATIONS...............................        389,561        412,555        327,122        413,492
                                                       -------------  -------------  -------------  -------------
OTHER INCOME (EXPENSE)
  Interest income....................................          1,430          1,686          1,678             43
  Interest expense...................................       (236,369)      (262,391)      (194,300)      (201,344)
  Other..............................................        (48,260)          (980)        (1,000)         1,013
                                                       -------------  -------------  -------------  -------------
                                                            (283,199)      (261,685)      (193,622)      (200,288)
                                                       -------------  -------------  -------------  -------------
NET INCOME...........................................  $     106,362  $     150,870  $     133,500  $     213,204
                                                       -------------  -------------  -------------  -------------
                                                       -------------  -------------  -------------  -------------
UNAUDITED PRO FORMA DATA
  Income before income taxes.........................  $     106,362  $     150,870  $     133,500  $     213,204
  Provision for income taxes.........................         54,000         68,000         59,000         90,000
                                                       -------------  -------------  -------------  -------------
PRO FORMA NET INCOME.................................  $      52,362  $      82,870  $      74,500  $     123,204
                                                       -------------  -------------  -------------  -------------
                                                       -------------  -------------  -------------  -------------
PRO FORMA PER SHARE INFORMATION
  Net income.........................................  $         .03  $         .05  $         .04  $         .07
                                                       -------------  -------------  -------------  -------------
                                                       -------------  -------------  -------------  -------------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING...........      1,800,000      1,800,000      1,800,000      1,800,000
                                                       -------------  -------------  -------------  -------------
                                                       -------------  -------------  -------------  -------------
</TABLE>
 
                       See Notes to Financial Statements
 
                                      F-5
<PAGE>
                          ELECTRONIC PROCESSING, INC.
                 STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                     YEARS ENDED DECEMBER 31, 1994 AND 1995
                    AND NINE MONTHS ENDED SEPTEMBER 30, 1996
 
<TABLE>
<CAPTION>
                                                                                        ADDITIONAL
                                                                              COMMON      PAID-IN      RETAINED
                                                                  TOTAL        STOCK      CAPITAL      EARNINGS
                                                               ------------  ---------  -----------  ------------
<S>                                                            <C>           <C>        <C>          <C>
BALANCE, DECEMBER 31, 1993...................................  $    807,662  $  18,000  $   282,000  $    507,662
  Net income.................................................       106,362                               106,362
  Increase in value of redeemable warrant....................       (34,990)                              (34,990)
  Dividends paid on common stock, $.04 per share.............       (69,694)                              (69,694)
                                                               ------------  ---------  -----------  ------------
BALANCE, DECEMBER 31, 1994...................................       809,340     18,000      282,000       509,340
  Net income.................................................       150,870                               150,870
  Increase in value of redeemable warrant....................        (6,000)                               (6,000)
  Dividends paid on common stock, $.11 per share.............      (195,968)                             (195,968)
                                                               ------------  ---------  -----------  ------------
BALANCE, DECEMBER 31, 1995...................................       758,242     18,000      282,000       458,242
  Net income.................................................       213,204                               213,204
  Dividends paid on common stock, $.03 per share.............       (62,144)                              (62,144)
                                                               ------------  ---------  -----------  ------------
BALANCE, SEPTEMBER 30, 1996..................................  $    909,302  $  18,000  $   282,000  $    609,302
                                                               ------------  ---------  -----------  ------------
                                                               ------------  ---------  -----------  ------------
</TABLE>
 
                       See Notes to Financial Statements
 
                                      F-6
<PAGE>
                          ELECTRONIC PROCESSING, INC.
                            STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 1994 AND 1995
               AND NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1996
 
<TABLE>
<CAPTION>
                                                                   YEARS ENDED             NINE MONTHS ENDED
                                                                  DECEMBER 31,               SEPTEMBER 30,
                                                           ---------------------------  ------------------------
                                                               1994           1995         1995         1996
                                                           -------------  ------------  -----------  -----------
<S>                                                        <C>            <C>           <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income.............................................  $     106,362  $    150,870  $   133,500  $   213,204
  Items not requiring (providing) cash:
    Depreciation.........................................        317,830       426,960      308,394      426,370
    Amortization of software development costs...........        321,413       337,515      252,108      226,424
    Amortization of intangible assets....................         20,512        10,734       10,231        1,509
    (Gain) loss on disposal of equipment and software....         47,078           980       (3,809)         382
  Changes in:
    Accounts receivable..................................         25,389       (42,785)     (85,017)    (214,453)
    Other receivables....................................        (19,238)       75,507       18,331       (2,562)
    Prepaid expenses and other assets....................        (32,010)       21,200       (9,674)     (27,618)
    Accounts payable and accrued expenses................       (173,338)       50,178      (17,811)     149,821
    Deferred revenue.....................................        (20,000)
                                                           -------------  ------------  -----------  -----------
      Net cash provided by operating activities..........        593,998     1,031,159      606,253      773,077
                                                           -------------  ------------  -----------  -----------
CASH FLOWS FROM INVESTING ACTIVITIES
  Proceeds from sale of property and equipment...........         25,236                      5,210          350
  Purchase of property and equipment.....................        (46,828)      (72,729)     (19,443)     (94,900)
  Decrease in equipment held for sale....................         26,635
  (Increase) decrease in related party receivable........        (41,468)                    41,468
  Expenditures for software development costs............       (272,111)     (364,479)    (224,347)    (364,122)
                                                           -------------  ------------  -----------  -----------
      Net cash used in investing activities..............       (308,536)     (437,208)    (197,112)    (458,672)
                                                           -------------  ------------  -----------  -----------
CASH FLOWS FROM FINANCING ACTIVITIES
  Net borrowings under line-of-credit agreement..........        150,000       175,000      125,000       40,000
  Proceeds from long-term debt...........................      2,076,000        11,694                   250,000
  Principal payments under capital lease obligation......       (274,593)     (300,866)    (215,998)    (321,828)
  Principal payments on long-term debt...................     (2,132,197)     (191,810)    (141,786)    (168,845)
  Dividends paid.........................................        (69,694)     (195,968)    (155,971)     (62,144)
  Deferred stock issuance costs..........................                     (127,589)     (44,080)     (64,749)
                                                           -------------  ------------  -----------  -----------
      Net cash used in financing activities..............       (250,484)     (629,539)    (432,835)    (327,566)
                                                           -------------  ------------  -----------  -----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.........         34,978       (35,588)     (23,694)     (13,161)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR.............         27,548        62,526       62,526       26,938
                                                           -------------  ------------  -----------  -----------
CASH AND CASH EQUIVALENTS, END OF YEAR...................  $      62,526  $     26,938  $    38,832  $    13,777
                                                           -------------  ------------  -----------  -----------
                                                           -------------  ------------  -----------  -----------
</TABLE>
 
                       See Notes to Financial Statements
 
                                      F-7
<PAGE>
                          ELECTRONIC PROCESSING, INC.
                         NOTES TO FINANCIAL STATEMENTS
               DECEMBER 31, 1994 AND 1995, AND SEPTEMBER 30, 1996
 
NOTE 1:  NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
    NATURE OF OPERATIONS
 
    The Company is engaged primarily in the development and marketing of
advanced proprietary software for electronic management of bankruptcy cases. An
extensive array of support services complements the software. The Company
extends unsecured credit to customers throughout the United States.
 
    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 the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
 
    PROPERTY AND EQUIPMENT
 
    Property and equipment are depreciated on a straight-line basis over the
estimated useful life of each asset as follows:
 
<TABLE>
<S>                                                               <C>
Furniture and fixtures..........................................    10 years
Computer equipment..............................................     5 years
Office equipment................................................  5-10 years
Transportation equipment........................................   3-5 years
</TABLE>
 
    Leasehold improvements are depreciated over the shorter of the lease term or
the estimated useful lives (5-10 years) of the improvements.
 
    SOFTWARE DEVELOPMENT COSTS
 
    Certain internal software development costs incurred in the creation of
computer software products are capitalized once technological feasibility has
been established. Prior to the completion of a detail program design,
development costs are expensed. Capitalized costs are amortized based on current
and future revenue for each product with an annual minimum equal to the
straight-line amortization (5 years) over the remaining estimated economic life
of the product.
 
    INTANGIBLE ASSETS
 
    The excess of cost over fair value of net assets acquired is being amortized
over 40 years. Organizational costs are being amortized over seven years. All
amortization is provided by the straight-line method.
 
    REVENUE RECOGNITION
 
    Revenues for Chapter 13 processing and noticing are recorded monthly at the
completion of the services based on the trustees' month-end caseloads. For
Chapter 7 bankruptcy services, monthly fees are received from a national
financial institution after the product is installed and deposits are
transferred based on the level of trustees' deposits with that institution. All
ancillary fees are recognized as the services have been provided.
 
    INCOME TAX STATUS
 
    The Company, with the consent of its stockholders, has elected under the
Internal Revenue Code to be an S corporation. In lieu of corporation income
taxes, the stockholders are taxed on their
 
                                      F-8
<PAGE>
                          ELECTRONIC PROCESSING, INC.
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
               DECEMBER 31, 1994 AND 1995, AND SEPTEMBER 30, 1996
 
NOTE 1:  NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
        POLICIES (CONTINUED)
proportionate shares of the Company's taxable income. Therefore, these
statements do not include any provision for corporation income taxes. Management
intends to distribute sufficient funds to the stockholders to pay personal taxes
related to flow-through taxable income.
 
    WARRANTS SUBJECT TO REDEMPTION AGREEMENT
 
    Warrants to purchase common stock include a right to require the Company to
purchase such stock, if acquired, at a price based on an agreed-upon formula.
The warrant liability amount is being accrued over the period to the first
exercise date, based on the formula price determined as of the balance sheet
date. Increases in warrant liability are charged to retained earnings in a
manner similar to recognition of dividend liabilities on redeemable preferred
stock. During 1996, the liability amount was fixed by agreement with the
majority shareholder (see Note 5).
 
    CASH EQUIVALENTS
 
    The Company considers all liquid investments with original maturities of
three months or less (primarily money market accounts) to be cash equivalents.
 
    NEW PRONOUNCEMENT
 
    The Financial Accounting Standards Board issued Statement No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of " in March 1995. The new Statement requires that assets to be
held and used be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of the asset in question may not
be recoverable. The Company has determined that no such impairment exists at
September 30, 1996.
 
NOTE 2:  SOFTWARE DEVELOPMENT COSTS
    The following is a summary of software development costs capitalized:
 
<TABLE>
<CAPTION>
                                                                   YEARS ENDED DECEMBER 31,     NINE MONTHS ENDED
                                                                ------------------------------  ------------------
                                                                     1994            1995       SEPTEMBER 30, 1996
                                                                --------------  --------------  ------------------
<S>                                                             <C>             <C>             <C>
Amounts capitalized (net of retirements)......................  $    3,627,068  $    3,991,547   $      2,663,840
                                                                --------------  --------------  ------------------
Accumulated amortization, beginning of year...................      (2,288,198)     (2,609,611)        (2,947,126)
Amortization expense..........................................        (321,413)       (337,515)          (226,424)
Retirements...................................................                                          1,691,829
                                                                --------------  --------------  ------------------
Accumulated amortization, end of year.........................      (2,609,611)     (2,947,126)        (1,481,721)
                                                                --------------  --------------  ------------------
Net software development costs................................  $    1,017,457  $    1,044,421   $      1,182,119
                                                                --------------  --------------  ------------------
                                                                --------------  --------------  ------------------
</TABLE>
 
    Included in the above are development costs relating to products not yet
released. Such costs totaled $173,029, $503,827 and $684,956 at December 31,
1994 and 1995, and September 30, 1996, respectively.
 
                                      F-9
<PAGE>
                          ELECTRONIC PROCESSING, INC.
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
               DECEMBER 31, 1994 AND 1995, AND SEPTEMBER 30, 1996
 
NOTE 3:  NOTES PAYABLE AND LONG-TERM DEBT
    Long-term debt includes the following at December 31, 1994 and 1995, and
September 30, 1996:
 
<TABLE>
<CAPTION>
                                                                          DECEMBER 31,
                                                                  ----------------------------
                                                                      1994           1995       SEPTEMBER 30, 1996
                                                                  -------------  -------------  ------------------
<S>                                                               <C>            <C>            <C>
Note payable, bank (A)..........................................  $     150,000  $     325,000    $      365,000
Note payable, bank (B)..........................................        818,417        674,376           553,729
Note payable, bank (C)..........................................        116,352        184,581           214,828
Note payable, bank (D)..........................................                                         250,000
Other...........................................................         14,132         12,008            10,179
Capital lease obligations.......................................        504,831        650,789         1,154,005
                                                                  -------------  -------------  ------------------
                                                                      1,603,732      1,846,754         2,547,741
Less current maturities.........................................        587,293        830,214           697,648
                                                                  -------------  -------------  ------------------
                                                                  $   1,016,439  $   1,016,540    $    1,850,093
                                                                  -------------  -------------  ------------------
                                                                  -------------  -------------  ------------------
</TABLE>
 
- ------------------------
(A) Note is available in multiple advances with a limit of $500,000. Interest is
    2% in excess of the bank's base lending rate (10.25% at September 30, 1996)
    per annum and is adjusted and payable on a quarterly basis. Principal is due
    on October 1, 1997. The note is collateralized by substantially all assets
    and is personally guaranteed by the majority stockholder.
 
(B) Principal and interest (2% in excess of bank's base lending rate -- 10.25%
    at September 30, 1996) payable in monthly installments of $18,792 with final
    payment due in June 1999; collateralized by substantially all assets and
    personally guaranteed by the majority stockholder.
 
(C) Revolving equipment line of credit of $250,000, with interest (2% in excess
    of bank's base lending rate -- 10.25% at September 30, 1996) payable
    monthly, in addition to monthly principal reductions equal to one
    thirty-sixth of the outstanding principal balance, with the unpaid balance
    being due June 1998; collateralized by substantially all assets and
    personally guaranteed by the majority stockholder.
 
(D) Note and accrued interest (1% in excess of highest prime rate in Wall Street
    Journal, calculated daily -- 9.25% at September 30, 1996); due in October
    1996 (extended after September 30, 1996, to October 1997); personally
    guaranteed by majority stockholder.
 
    The following maturities schedule reflects the payment terms noted above:
 
<TABLE>
<S>                                                      <C>
1997...................................................  $  697,648
1998...................................................   1,397,579
1999...................................................     438,490
2000...................................................      14,024
                                                         ----------
                                                         $2,547,741
                                                         ----------
                                                         ----------
</TABLE>
 
NOTE 4:  LEASES
 
    OPERATING
 
    The Company has a noncancellable operating lease for office space which
expires in February 2001. The majority stockholder of the Company is a partner
in the partnership that leases office space to the Company. The lease requires
the Company to pay all executory costs (property taxes, maintenance and
insurance).
 
                                      F-10
<PAGE>
                          ELECTRONIC PROCESSING, INC.
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
               DECEMBER 31, 1994 AND 1995, AND SEPTEMBER 30, 1996
 
NOTE 4:  LEASES (CONTINUED)
    For the year ended December 31, 1995 and the nine months ended September 30,
1996, an agreement was reached with the partnership whereby the Company was
reimbursed for the property taxes which amounted to approximately $30,000 for
both 1995 and 1996.
 
    Future minimum lease payments at September 30, 1996 are as follows:
 
<TABLE>
<S>                                                        <C>
1997.....................................................  $ 148,125
1998.....................................................    152,800
1999.....................................................    156,900
2000.....................................................    161,200
2001.....................................................     68,000
                                                           ---------
                                                           $ 687,025
                                                           ---------
                                                           ---------
</TABLE>
 
    Rental expense under this lease was $137,624 and $142,125 for the years
ended December 31, 1994 and 1995, respectively, and $109,125 for the period
ended September 30, 1996.
 
    CAPITAL
 
    Capital leases shown in long-term debt (SEE NOTE 3) include leases for the
use of computer equipment for no more than five years expiring in 2001.
 
    Property and equipment include the following property under capital leases:
 
<TABLE>
<CAPTION>
                                                                    YEARS ENDED DECEMBER 31,
                                                                   --------------------------  NINE MONTHS ENDED
                                                                      1994          1995       SEPTEMBER 30, 1996
                                                                   -----------  -------------  ------------------
<S>                                                                <C>          <C>            <C>
Computer equipment...............................................  $   936,279  $   1,163,513    $    1,631,498
Less accumulated depreciation....................................      302,676        355,542           357,546
                                                                   -----------  -------------  ------------------
                                                                   $   633,603  $     807,971    $    1,273,952
                                                                   -----------  -------------  ------------------
                                                                   -----------  -------------  ------------------
</TABLE>
 
    Future minimum lease payments as of September 30, 1996 are as follows:
 
<TABLE>
<S>                                                      <C>
1997...................................................  $  548,036
1998...................................................     480,924
1999...................................................     271,149
2000...................................................      13,359
                                                         ----------
Future minimum lease payments..........................   1,313,468
Less amount representing interest......................     159,464
                                                         ----------
Present value of future minimum lease payments.........   1,154,004
Less current maturities................................     451,625
                                                         ----------
Noncurrent portion.....................................  $  702,379
                                                         ----------
                                                         ----------
</TABLE>
 
NOTE 5:  SUBORDINATED DEBT AND STOCK PURCHASE WARRANT
    The Company has the following subordinated debt outstanding with the
majority stockholder at December 31, 1994 and 1995, and September 30, 1996:
 
<TABLE>
<S>                                                        <C>
10% interest payable monthly, principal balance due July
 1998....................................................  $ 400,000
                                                           ---------
                                                           ---------
</TABLE>
 
                                      F-11
<PAGE>
                          ELECTRONIC PROCESSING, INC.
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
               DECEMBER 31, 1994 AND 1995, AND SEPTEMBER 30, 1996
 
NOTE 5:  SUBORDINATED DEBT AND STOCK PURCHASE WARRANT (CONTINUED)
    Interest expense under this agreement was $40,000 for both the years ended
December 31, 1994 and 1995, and $30,000 for the nine month period ended
September 30, 1996.
 
    The holder of the subordinated note also holds a stock purchase warrant
(originally issued in 1988) to acquire 969,228 shares of the Company's common
stock at $.41 per share (giving retroactive effect to the 6 to 1 stock split
discussed in Note 9) at any time prior to July 14, 1998.
 
    Commencing July 15, 1996, the holder of common stock obtained by exercising
the stock purchase warrant may require the Company to purchase for cash all or
any part of the stock held. Likewise, the Company shall have the right to
purchase for cash all or part of the stock held that was obtained by exercising
the stock purchase warrant. The price in either such event shall be the greater
of, using either the preceding fiscal year-end financial statements or an
average of the two preceding fiscal year financial statements, (1) net book
value per share or (2) a valuation per share computed from a seven times pre-tax
income multiple. As of December 31, 1994 and 1995, the Company has calculated
and recorded a value of such warrants in the amount of $35,000 and $41,000,
respectively. Subsequent to September 30, 1996, the Company reached an agreement
with the principal stockholder to retire the warrant for a price of $41,000.
 
NOTE 6:  RELATED PARTY TRANSACTIONS
    Interest expense of $10,501 was recognized on a note payable outstanding to
the majority stockholder in 1994. Included in other receivables at December 31,
1994 is $41,468 due from related parties. Fees totaling $24,658 and $23,250 were
paid to the majority stockholder during 1995 and 1994, respectively, for
guarantees on Company debt.
 
NOTE 7:  PROFIT SHARING PLAN
    The Company has adopted a 401(k) plan covering substantially all employees.
Company matching contributions to the Plan are discretionary. Such contributions
amounted to $8,194 and $11,847 for the years ended December 31, 1994 and 1995,
respectively, and $9,000 was accrued for the period ended September 30, 1996.
 
NOTE 8:  SIGNIFICANT ESTIMATES AND CONCENTRATIONS
    Generally accepted accounting principles require disclosure of certain
significant estimates and current vulnerabilities due to certain concentrations.
Those matters include the following:
 
    - The Company capitalizes and amortizes costs incurred in the development of
      software products. These costs are being realized over the estimated life
      of the resulting software product, principally five years. Ultimate
      recoverability is dependent upon estimated future revenues over the life
      of the product being realized.
 
    - The majority of the Company's revenues are generated from processing and
      noticing services for Chapter 13 bankruptcy cases. For Chapter 7
      bankruptcy services, the Company has a significant marketing agreement
      with a national financial institution which provides for the generation of
      monthly revenues based on the level of trustees' deposits with that
      institution.
 
NOTE 9:  PLANNED PUBLIC OFFERING (UNAUDITED)
    The Company is currently planning to make a public offering of shares of
common stock. In conjunction with the offering, the Company has increased the
number of authorized common shares to 5,000,000 and declared a 6 to 1 stock
split which became effective, through a stock dividend, on November 4, 1996. In
lieu of historical earnings (loss) per share, pro forma per share amounts
 
                                      F-12
<PAGE>
                          ELECTRONIC PROCESSING, INC.
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
               DECEMBER 31, 1994 AND 1995, AND SEPTEMBER 30, 1996
 
NOTE 9:  PLANNED PUBLIC OFFERING (UNAUDITED) (CONTINUED)
reflecting the effects of the stock dividend retroactively have been provided as
described below. Additionally, the number of shares in the accompanying balance
sheets have been retroactively increased to reflect this stock split.
 
    Upon issuance of common stock to the public, the Company will change its
income tax status to a C corporation. Pro forma earnings information has been
provided to reflect the effects of corporate income taxes on historical
earnings, including the effects of permanent and temporary differences in
reporting income and expenses for tax and financial reporting purposes, as if
the Company has been subject to income taxes for all the periods presented. Pro
forma adjustments reflect the provision for corporate income taxes.
 
    At the time of becoming a C corporation, the Company will accrue an income
tax provision to record the effects of temporary differences between assets and
liabilities presented on the financial reporting basis and the income tax basis.
At September 30, 1996, the deferred tax effects of such differences were as
follows:
 
<TABLE>
<S>                                                               <C>
Deferred tax assets:
  Allowance for doubtful accounts...............................  $   1,900
  Accrued compensated absences..................................      3,500
  Other.........................................................      1,300
                                                                  ---------
                                                                      6,700
Deferred tax liabilities:
  Property and equipment basis difference.......................   (282,600)
                                                                  ---------
Net deferred tax asset (liability)..............................  $(275,900)
                                                                  ---------
                                                                  ---------
</TABLE>
 
    The pro forma provision for income taxes included these components:
 
<TABLE>
<CAPTION>
                                                                      YEARS ENDED            NINE MONTHS ENDED
                                                                      DECEMBER 31,             SEPTEMBER 30,
                                                                ------------------------  -----------------------
                                                                    1994         1995        1995        1996
                                                                ------------  ----------  ----------  -----------
<S>                                                             <C>           <C>         <C>         <C>
Taxes currently payable.......................................  $    291,000  $   95,000  $   79,500  $   126,000
Deferred income taxes.........................................      (237,000)    (27,000)    (20,500)     (36,000)
                                                                ------------  ----------  ----------  -----------
                                                                $     54,000  $   68,000  $   59,000  $    90,000
                                                                ------------  ----------  ----------  -----------
                                                                ------------  ----------  ----------  -----------
</TABLE>
 
    A reconciliation of pro forma income tax provision at the statutory rate to
pro forma income tax expense at the Company's effective rate is shown below:
 
<TABLE>
<CAPTION>
                                                                     YEARS ENDED DECEMBER   NINE MONTHS ENDED
                                                                             31,              SEPTEMBER 30,
                                                                     --------------------  --------------------
                                                                       1994       1995       1995       1996
                                                                     ---------  ---------  ---------  ---------
<S>                                                                  <C>        <C>        <C>        <C>
Computed at statutory rate (34%)...................................  $  36,200  $  51,300  $  45,400  $  72,500
Increase in taxes resulting from:
  Nondeductible expenses...........................................      7,400      8,500      6,300      6,500
  State income taxes, net of federal tax effect and other..........     10,400      8,200      7,300     11,000
                                                                     ---------  ---------  ---------  ---------
Pro forma tax provision............................................  $  54,000  $  68,000  $  59,000  $  90,000
                                                                     ---------  ---------  ---------  ---------
                                                                     ---------  ---------  ---------  ---------
</TABLE>
 
    The Company has reserved 270,000 shares of common stock for issuance of
stock options to employees, officers and directors of the Company. Upon
successful completion of the offering, the
 
                                      F-13
<PAGE>
                          ELECTRONIC PROCESSING, INC.
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
               DECEMBER 31, 1994 AND 1995, AND SEPTEMBER 30, 1996
 
NOTE 9:  PLANNED PUBLIC OFFERING (UNAUDITED) (CONTINUED)
Company will issue options for 119,500 of these shares with the exercise price
being equal to the initial public offering price. The Company will account for
such options in accordance with APB Opinion No 25, "Accounting for Stock Issued
to Employees," and will provide pro forma disclosures as required by Financial
Accounting Standards No. 123 "Accounting for Stock-Based Compensation."
 
    For supplementary purposes pro forma earnings per share would have been $.09
for both the nine months ended September 30, 1996, and for the year ended
December 31, 1995. Such calculations give effect (net of income taxes) to the
repayment of approximately $2,000,000 of the Company's outstanding indebtedness
and resulting reduction of interest expense as if a portion of the proceeds from
this initial public offering had been used to repay the debt at the original
dates of issuance and the number of shares of common stock (whose proceeds are
to be used to retire the debt) were outstanding from the same dates.
 
NOTE 10:  PRO FORMA (UNAUDITED)
 
    In anticipation of the public offering, the Company will declare a final S
corporation distribution to present stockholders. This final distribution will
represent the Company's previously undistributed earnings only since January 1,
1996, through the Termination Date. The amount of this final distribution will
not exceed $250,000 and will be payable within 90 days following the Termination
Date. If the final S corporation distribution were computed based upon 1996
earnings only through September 30, 1996, the amount of that distribution would
be $151,060. Any remaining retained earnings will then be reclassified to
additional paid-in capital. Additionally, the Company has reached agreement with
the majority stockholder to retire the redeemable stock warrant (see Note 5)
prior to the offering with a payment of $41,000.
 
    Pro forma adjustments made to the September 30, 1996 balance sheet include
the effects of the special distribution of $151,060, and the recording of the
net deferred tax liability, but do not include the effects of the net proceeds
from the planned public offering.
 
NOTE 11:  ADDITIONAL CASH FLOWS INFORMATION
 
<TABLE>
<CAPTION>
                                                                           YEARS ENDED
                                                                           DECEMBER 31,
                                                                     ------------------------  NINE MONTHS ENDED
                                                                        1994         1995      SEPTEMBER 30, 1996
                                                                     -----------  -----------  ------------------
<S>                                                                  <C>          <C>          <C>
NONCASH INVESTING AND FINANCING ACTIVITIES
  Capital lease obligation and notes payable
   incurred for equipment..........................................  $   441,696  $   549,004     $    901,660
 
ADDITIONAL CASH INFORMATION
  Interest paid....................................................      232,032      262,391          184,274
</TABLE>
 
                                      F-14
<PAGE>
GRAPHIC ENTITLED "ADVANCED BANKRUPTCY MANAGEMENT SYSTEMS" DEPICTING CERTAIN
FEATURES OF THE COMPANY'S CASE POWER PRODUCT: CREDITOR DISTRIBUTION, LEGAL
NOTICE'S WINDOWS-TM- INTERFACE, BARCODING, AND DOCUMENT IMAGING.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
    NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS. IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE UNDERWRITER. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED
OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO
OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
 
                            ------------------------
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
Prospectus Summary........................................................    3
Risk Factors..............................................................    6
Prior S Corporation Status................................................   10
Use of Proceeds...........................................................   10
Dividend Policy...........................................................   11
Dilution..................................................................   12
Capitalization............................................................   13
Selected Financial Data...................................................   14
Management's Discussion and Analysis of Financial Condition and Results of
 Operations...............................................................   16
Business..................................................................   19
Management................................................................   30
Certain Transactions......................................................   33
Principal Stockholders....................................................   34
Description of Securities.................................................   35
Underwriting..............................................................   37
Legal Matters.............................................................   38
Experts...................................................................   38
Additional Information....................................................   38
Index to Financial Statements.............................................  F-1
</TABLE>
 
    UNTIL            , 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE SECURITIES OFFERED HEREBY, WHETHER OR NOT
PARTICIPATING IN THE OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS
IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
 
                                1,600,000 SHARES
 
                                     [LOGO]
 
                                  COMMON STOCK
 
                             ---------------------
 
                                   PROSPECTUS
 
                             ---------------------
 
                             RJ STEICHEN & COMPANY
 
                                          , 1997
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
                                    PART II
 
ITEM 24.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.
 
    The Company's by-laws provide that the Company shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit, or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was a
director or officer of the Company (or is or was serving at the request of the
Company as a director or officer of another entity) against expenses, including
attorneys' fees, judgments, fines, and amounts paid in settlement (except that,
in connection with an action by or in the right of the Company, the indemnity
shall be limited to expenses, including attorneys' fees, and amounts paid in
settlement) actually and reasonably incurred by him in connection with such
action, suit, or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Company
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful.
 
    To the extent that a director, officer, employee, or agent has been
successful on the merits or otherwise in defense of any action, suit, or
proceeding, or in defense of any claim, he shall be indemnified against
expenses, including attorneys' fees, actually and reasonably incurred by him in
connection with the action, suit, or proceeding. Expenses incurred in defending
a civil or criminal action, suit or proceeding may be paid by the Company in
advance of the final disposition of the action, suit, or proceeding. The
indemnification discussed in this section is not exclusive of any other rights
the party may have seeking indemnification.
 
    The Company believes that it is the position of the Securities and Exchange
Commission that insofar as the foregoing provision may be invoked to disclaim
liability for damages arising under the Securities Act, the provision is against
public policy as expressed in the Securities Act and is therefore unenforceable.
Such limitation of liability also does not affect the availability of equitable
remedies such as injunctive relief or rescission.
 
ITEM 25.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
 
    The estimated expenses for the issuance and distribution of the shares of
Common Stock registered hereby, other than underwriting commissions, are set
forth in the following table. All amounts are estimates except the registration
fee, NASD filing fee and the Nasdaq SmallCap Market listing fee.
 
<TABLE>
<CAPTION>
ITEM                                                                                AMOUNT
- ------------------------------------------------------------------------------  --------------
 
<S>                                                                             <C>
Registration Fee..............................................................  $     2,091.00
NASD Filing Fee...............................................................        1,190.00
Nasdaq SmallCap Market Fee....................................................        6,250.00
Maximum Underwriter's Nonaccountable Allowance................................      180,000.00
Blue Sky Fees and Expenses....................................................       12,000.00
Transfer Agent Fees...........................................................        7,500.00
Legal Fees....................................................................      125,000.00
Accounting Fees...............................................................       48,000.00
Printing and Engraving Costs..................................................       24,000.00
Miscellaneous.................................................................       78,969.00
                                                                                --------------
  Total.......................................................................  $   485,000.00
                                                                                --------------
                                                                                --------------
</TABLE>
 
ITEM 26.  RECENT SALES OF UNREGISTERED SECURITIES
 
    Since November 1, 1992, the Registrant sold and issued the following
unregistered securities:
 
                                      II-1
<PAGE>
   
    The Company intends to grant upon completion of this Offering, pursuant to
its 1995 Stock Option Plan, options to purchase 119,500 shares of the Company's
Common Stock to 6 officers and/or directors and to 46 other employees.
    
 
    On November 4, 1996, the Company issued to its six stockholders a stock
dividend of an aggregate 1,500,000 shares of Common Stock.
 
    All numbers of shares in this Item 26 have been adjusted to reflect the
six-for-one stock split.
 
    The sales and issuances of securities described above were deemed to be
exempt from registration under the Securities Act by virtue of Section 4(2) or
Regulation D promulgated under the Securities Act. The purchasers in each case
represented their intention to acquire the securities for investment only and
not with a view to the distribution thereof. Appropriate legends are affixed to
the stock certificates issued in such transactions.
 
ITEM 27.  EXHIBITS
 
   
<TABLE>
<CAPTION>
  EXHIBIT
  NUMBER                                                  TITLE
- -----------  ------------------------------------------------------------------------------------------------
<C>          <S>
     1.1     Form of Underwriting Agreement.+
     3.1     Restated Certificate of Incorporation as filed with the Missouri Secretary of State.
     3.2     Bylaws.+
     4.1     Form of Underwriter's Warrant.+
     4.2     Form of Common Stock Certificate.
     4.3     1995 Stock Option Plan.
     5.1     Opinion of Petillon & Hansen, a partnership of professional corporations.
    10.1     Agreement for Computerized Trustee Care Management System between the Company and NationsBank of
              Texas, N.A., dated November 22, 1993.**
    10.2     Lease between T&J Investment Company and the Company, dated February 20, 1996.+
    10.3     Subordinated Note to Tom Olofson.+
    10.4     Loan Agreement between Industrial State Bank and the Company, dated June 17, 1996.
    10.4a    Modification to Loan Agreement between Industrial State Bank and the Company, dated October 31,
              1996 (previously filed with Exhibit 10.4).+
    10.5     Loan Agreement between Industrial State Bank and the Company, dated June 8, 1994.+
    10.5a    Modification to Loan Agreement between Industrial State Bank and the Comapny, dated June 17,
              1996 (previously filed with Exhibit 10.5).+
    10.6     Loan Agreement between Industrial State Bank and the Company, dated June 8, 1994.+
    10.6a    Modification to Loan Agreement between Industrial State Bank and the Company, dated June 17,
              1996 (previously filed with Exhibit 10.6).+
    10.7     Loan Agreement between Citizens National Bank and the Company, dated June 18, 1996.+
    10.8     Form of Service Agreement between EPI and Trustee.+
    23.1     Consent of Baird, Kurtz & Dobson, Certified Public Accountants.
    23.2     Consent of Petillon & Hansen (included in the opinion filed as Exhibit 5).
    23.3     Consent of W. Bryan Satterlee, Director Nominee.
    24.0     Power of Attorney (included on signature page).
</TABLE>
    
 
                                      II-2
<PAGE>
<TABLE>
<CAPTION>
  EXHIBIT
  NUMBER                                                  TITLE
- -----------  ------------------------------------------------------------------------------------------------
<C>          <S>
    27.0     Financial Data Schedule+
</TABLE>
 
- ------------------------
+   Previously filed.
 
*   To be filed by amendment.
 
**  Confidential treatment requested.
 
                                      II-3
<PAGE>
ITEM 28.  UNDERTAKINGS
 
    The undersigned Registrant hereby undertakes:
 
        (1) To provide to the Underwriter at the closing specified in the
    underwriting agreement, certificates in such denominations and registered in
    such names as required by the Underwriter to permit prompt delivery to each
    purchaser.
 
        (2) If the Registrant requests acceleration of the effective date of the
    Registration Statement under Rule 461 under the Securities Act, the
    Registrant acknowledges that:
 
            Insofar as indemnification for liabilities arising under the
           Securities Act may be permitted to directors, officers and
           controlling persons of the Registrant pursuant to the foregoing
           provisions, or otherwise, the Registrant has been advised that in the
           opinion of the Commission such indemnification is against public
           policy as expressed in the Securities Act and is, therefore,
           unenforceable.
 
            In the event that a claim for indemnification against such
           liabilities (other than the payment by the Registrant of expenses
           incurred or paid by a director, officer or controlling person of the
           Registrant in the successful defense of any action, suit or
           proceeding) is asserted by such director, officer or controlling
           person in connection with the securities being registered, the
           Registrant will, unless in the opinion of counsel the matter has been
           settled by controlling precedent, submit to a court of appropriate
           jurisdiction the question whether such indemnification by it is
           against public policy as expressed in the Securities Act and will be
           governed by the final adjudication of such issue.
 
        (3) That, for purposes of determining any liability under the Securities
    Act, the Registrant will treat the information omitted from the form of
    Prospectus filed as part of this Registration Statement in reliance upon
    Rule 430A and contained in a form of Prospectus filed by the Registrant
    under Rule 424(b)(1) or (4) or 497(h) under the Securities Act as part of
    this Registration Statement as of the time the Commission declared it
    effective.
 
        (4) That for determining any liability under the Securities Act, the
    Registrant will treat each post-effective amendment that contains a form of
    prospectus as a new registration statement for the securities offered in the
    registration statement, and that offering of the securities at that time as
    the initial bona fide offering of those securities.
 
                                      II-4
<PAGE>
                                   SIGNATURES
 
    In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Kansas City, Kansas, on the 13th day
of January, 1997.
 
                                Electronic Processing, Inc.
 
                                By:              /s/ TOM W. OLOFSON
                                     -----------------------------------------
                                                   Tom W. Olofson
                                        CHAIRMAN AND CHIEF EXECUTIVE OFFICER
 
                               POWER OF ATTORNEY
 
    KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Tom W. Olofson, as his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this registration
statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
foregoing, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitutes, may lawfully do or cause to be done by virtue hereof.
 
    In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
 
<TABLE>
<CAPTION>
                 SIGNATURE                                      TITLE                              DATE
- -------------------------------------------  -------------------------------------------  -----------------------
 
<C>                                          <S>                                          <C>
            /s/ TOM W. OLOFSON               Chief Executive Officer; Chairman of the
    ----------------------------------        Board; President (Principal Executive              January 13, 1997
              Tom W. Olofson                  Officer)
            /s/ NANCI R. TRUTNA              Vice President -- Finance (Principal
    ----------------------------------        Financial Officer and Principal Accounting         January 13, 1997
              Nanci R. Trutna                 Officer)
 
        /s/ CHRISTOPHER E. OLOFSON
    ----------------------------------       Chief Operating Officer; Executive Vice             January 13, 1997
          Christopher E. Olofson              President; Director
 
            /s/ ROBERT C. LEVY
    ----------------------------------       Director                                            January 14, 1997
              Robert C. Levy
</TABLE>
 
                                      II-4

<PAGE>

                              ARTICLES OF INCORPORATION
                                       OF
                                  NEWCO RGLG 1, INC.

The undersigned, being a natural person of the age of eighteen years or more, 
for the purpose of forming a corporation under  The General and Business 
Corporation Law of Missouri , does hereby adopt the following Articles of 
Incorporation:

FIRST.  The Name of the corporation is : Newco RGLG 1, Inc.

SECOND.  The address of its initial registered office in the State of 
Missouri is 2300 City Center Square, P.O. Box 26278, registered agent at such 
address is Marvin L. Rich

THIRD.  The aggregate number of shares which the corporation shall have 
authority to issue shall be one million (1,000,000) shares of common stock, 
each of the par value of one cent ($.01) per share.

FOURTH.  The name and place of residence of the incorporator are as follows:

Name:   Marvin L. Rich

Residence:  6632 Wenonga Road, Mission, Kansas  66208

FIFTH.  The number of directors to constitute the first board of directors of 
the corporation is five (5). Thereafter the number of directors shall be 
fixed by, or in the manner provided in, the bylaws of the corporation.  Any 
change in the number of directors shall be reported to the Secretary of State 
within thirty (30) calendar days of such change. Directors need not be 
shareholders unless the bylaws require them to be shareholders.

The persons to constitute the first board of directors, each of whom shall 
hold office until the first annual meeting of the shareholders or until his 
successor shall have been elected and qualified, are as follows:

                                 Rex Wiggins
                                 Tom Olofson
                                Terry Matlack 
                                  Max Muller

SIXTH.   The duration of the corporation is perpetual.

SEVENTH.  This corporation is formed for the following purposes:

<PAGE>

(a)   To engage in every aspect of ddata processing, creation of date bases, 
communicatins and other computer related acctivities.

(b)   To but, lease, rent or otherwise acquire, own, hold, use, divide, 
partition, develop, improve, operate and sell, lease, mortgage or otherwise 
dispose of, deal in and turn to account real estate, leaseholds and any and 
all interests or estates therein or appertaining thereto; and to construct, 
manage, operate, improve, maintain and otherwise deal with buildings, 
structures and improvements situated or to be situated on any real estate or 
leasehold.

(c)   To engage in any mining, manufacturing, chemical, metallurgical, 
processing or related business, and to buy, lease, construct or otherwise 
acquire, own, hold, use, sell, lease, mortgage or otherwise dispose of, 
plants, works, facilities and equipment therefor.

(d)   To buy, utilize, lease, rent, import, export, manufacture, produce, 
design, prepare, assemble, fabricate, improve, develop, sell, lease, 
mortgage, pledge, hypothecate, distribute and otherwise deal in at wholesale, 
retail or otherwise, and as principal, agent or otherwise, all commodities, 
goods, wares, merchandise, machinery, tools, devices, apparatus, equipment 
and all other personal property, whether tangible or intangible, of every 
kind without limitation as to description, location or amount.

(e)   To apply for, obtain, purchase, lease, take licenses in respect of or 
otherwise acquire, and to hold, own, use, operate, enjoy, turn to account, 
grant licenses in respect of, manufacture under, introduce, sell, assign, 
mortgage, pledge or otherwise dispose of:

1. Any and all inventions, devices, processes and formulae and any 
improvements and modifications thereof;

2. Any and all letters patent of the United States or of any other country, 
state of locality, and all rights connected therewith or appertaining 
thereto.

3. Any and all copyrights granted by the United States or any other country, 
state or locality;
    
4. Any and all trademarks, trade names, trade symbols and other indications 
of origin and ownership granted by or recognized under the laws of the 
United States or of any other county, state or locality; and to conduct and 
carry of its business in any or all of its various branches under any trade 
name or trade names.

  (f) To engage in carry on and conduct research, experiments, investigations, 
analyses, studies and laboratory work, for the purpose of discovering new 
products or to improve products, articles and things, and to buy, construct 
or otherwise acquire,  own, operate, maintain, lease, sell, mortgage or 
otherwise dispose of, laboratories 


<PAGE>

and similar facilities, plants and any and all other establishments, and to 
procure, construct, own, use, hold and dispose of all necessary equipment in 
respect thereof, for the purposes aforesaid.

  (g) To enter into any lawful contract or contracts with persons, firms, 
corporations, other entities, governments or any agencies or subdivisions 
thereof, including guaranteeing the performance of any contract or any 
obligation of any person, firm, corporation or other entity.

  (h) To purchase and acquire, as a going concern or otherwise, and to carry 
on, maintain and operate all or any part of the property or business of any 
corporation, firm, association, entity, syndicate or person whatsoever, 
deemed to be of benefit to the corporation, or of use in any manner in 
connection with any of its purposes; and to dispose thereof upon such terns 
as may seem advisable to the corporation. 

        (i) To purchase or otherwise acquire, hold, sell, pledge, reissue, 
transfer or otherwise deal in, shares of the corporation s own stock provided 
that it shall not use its funds or property for the purchase of its own 
shares of stock when such Use would be prohibited by law, by the articles of 
incorporation or by the bylaws of the corporation; and, provided further, 
that shares of its own stock belonging to it shall not be voted upon directly 
or indirectly.

         (j) To invest, lend and deal with moneys of the corporation in any 
lawful manner, and to acquire by purchase, by the exchange of stock or other 
securities of the corporation, by subscription or otherwise, and to invest 
in, to hold for investment or for any other purpose, and to use, sell, pledge 
or otherwise dispose of, and in general to deal in any interest concerning or 
enter into any transaction with respect to (including  long  and  short  
sales of) any stocks, bonds, notes, debentures, certificates, receipts and 
other securities and obligations of any government, state, municipality, 
corporation, association or other entity, including individuals and 
partnerships and, while owner thereof, to exercise all of the rights, powers 
and privileges of ownership, including, among other things, the right to vote 
thereon for any and all purposes and to give consents with respect thereto.

        (k) To borrow or raise money for any purpose of the corporation and 
to secure any loan, indebtedness or obligation of the corporation and the 
interest accruing thereon, and for that or any other purpose to mortgage, 
pledge, hypothecate or charge all of any part of the present or hereafter 
acquired property, rights and franchises of the corporation, real, personal, 
mixed or of any character whatever, subject only to limitations specifically 
imposed by law.

        (l) to do any or all of the things hereinabove enumerated alone for 
its own account, or for the account of others, or as the agent for others, or 
in association with others or by or through others, and to enter into all 
lawful contracts and undertakings in respect thereof.

<PAGE>

        (m) To have one or more offices, to conduct its business, carry on its 
operations and promote its objects within and without the State of Missouri 
and anywhere in the world, and without restriction as to place, manner or 
amount, but subject to the laws applicable thereto; and to do any or all of 
the things herein set forth to the same extent as a natural person might or 
could do and in any part of the world, either alone or in the company with 
others.

        (n) In general, to carry on any other business in connection with each 
and all of the foregoing or incidental thereto, and to carry on, transact and 
engage in any and every lawful business or other lawful thing calculated to 
be of gain, profit or benefit to the corporation as fully and freely as a 
natural person might do, to the extent and in the manner, and anywhere within 
and without the State of Missouri, as it may from time to time determine; and 
to have and exercise each and all of the powers and privileges, either direct 
or incidental, which are given and provided by or are available under the 
laws of the State of Missouri in respect of general and business corporations 
organized for profit thereunder; provided, however, that the corporation 
shall not engage in any activity for which a corporation may not be formed 
under the laws of the State of Missouri.

   None of the purposes and powers specified in any of the paragraphs of this
Article SEVENTH shall be in any way limited or restricted by reference to or 
inference from the terms of any other paragraphs, and the purposes and powers 
specified in each of the paragraphs of this Article SEVENTH shall be regarded 
as independent purposes and powers. The enumeration of specific purposes and 
powers in this Article SEVENTH shall not be construed to restrict in any 
manner the general purposes and powers of this corporation, nor shall the 
expression of one thing be deemed to exclude another, although it be of like 
nature.  The enumeration of purposes or powers herein shall not be deemed to 
exclude or in any way limit by inference any purposes or powers which this 
corporation has power to exercise, whether expressly by the laws of the State 
of Missouri, now or hereafter in effect, or impliedly by any reasonable 
construction of such laws.

   EIGHTH. (a) Except as may be otherwise specifically provided by 
statute, or the articles or incorporation or the bylaws of the corporation, 
as from time to time amended, all powers of management, direction and control 
of the corporation shall be, and hereby are, vested in the board of directors.

     (b) The bylaws of the corporation may from time to time be altered, 
amended, suspended or repealed, or new bylaws may be adopted, in any of the 
following ways:  (i) by the affirmative vote, at any annual or special 
meeting of the shareholders, or the holders of a majority of the outstanding 
shares of stock of the corporation entitled to vote; or (ii) by resolution 
adopted by a majority of the full board of directors at a meeting thereof, or 
adopted by a majority of the full board of directors at a meeting thereof, or 
(iii) by unanimous written consent of all the shareholders or all 

<PAGE>

the directors in lieu of a meeting; provided, however, that the power of the 
directors to alter, amend, suspend or repeal the bylaws or any portion 
thereof may be denied as to any bylaws or portion thereof enacted by the 
shareholders if at the time of such enactment the shareholders shall so 
expressly provide.

     (c) The corporation may agree to the terms and conditions upon which 
any director, officer, employee or agent accepts his office or position and 
in its bylaws or otherwise may agree to   indemnify and protect any director, 
officer, employee or agent to the extent permitted by the laws of Missouri.

   NINTH. Insofar as it is permitted under the laws of Missouri and except as 
may be otherwise provided by the bylaws of this corporation, no contract or 
other transaction between this corporation and any other firm or corporation 
shall be affected or invalidated solely by reason of the fact that any 
director or officer of this corporation is interested in, or is a member, 
shareholder, director or officer of such other firm or corporation; and any 
director or officer of this corporation, individually or jointly with one or 
more other directors or officers of this corporation, may be a party to, or 
may in interested in, any contract or transaction of this corporation or in 
which this corporation is interested, and no such contract or transaction 
shall be invalidated thereby.

   TENTH. The directors shall have power to hold their meetings and to keep 
the books (except any books required to be kept in the State of Missouri, 
pursuant to the laws thereof) at any place within or without the State of 
Missouri.

   ELEVENTH.  The corporation shall be entitled to treat the registered 
holder of any shares of the corporation as the owner of such shares and of 
all rights derived from such shares for all purposes.  The corporation shall 
not be obligated to recognize any equitable or other claim to or interest in 
such shares or rights on the part of any other person, including but without 
limiting the generality of the term  person,  a purchaser, pledgee, assignee 
or transferee of such shares or rights, unless and until such person becomes 
the registered holder of such shares, and the foregoing shall apply whether 
or not the corporation shall have either actual or constructive notice of the 
interest of such person.

   TWELFTH. The corporation reserves the right to alter, amend or repeal any 
provision contained in its articles of incorporation in the manner now or 
hereafter prescribed by the statutes of Missouri, and all rights and powers 
conferred herein are granted subject to this reservation; and, in particular, 
the corporation reserves the right and privilege to amend its articles of 
incorporation from time to time so as to authorize other or additional 
classes of shares (including preferential shares), to increase or decrease 
the number of shares of any class now or hereafter authorized, to establish, 
limit or deny to shareholders of any class the right to purchase or subscribe 
for any shares of stock of the corporation of any class, whether now or 
hereafter authorized or whether issued for cash, property or services or as a 
dividend or otherwise, or to purchase or subscribe for any obligations, 
bonds, notes, debentures, or securities or 

<PAGE>

stock convertible into shares of stock of the corporation or carrying or 
evidencing any right to purchase shares of stock of any class, and to vary 
the preference, priorities, special powers, qualifications limitations, 
restrictions and the special or relative rights or other characteristics in 
respect of the shares of each class, and to accept and avail itself of, or 
subject itself to, the provisions of any statutes of Missouri hereafter 
enacted pertaining to general and business corporations, to exercise all the 
rights, powers and privileges conferred upon corporations organized 
thereunder or accepting the provisions thereof and to assume the obligations 
and duties imposed therein, upon the affirmative vote of the holders of a 
majority of the shares of stock entitled to vote thereon, or, in the event 
the laws of Missouri require a separate vote by classes of shares, upon the 
affirmative vote of the holders of a majority of the shares of each class 
whose separate vote is required thereon.



      IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 
13th day of July, 1988.


                             /s/ Marvin L. Rich
                             ____________________________
                             Marvin L. Rich 
                             Incorporator

STATE OF MISSOURI )
                   ) ss.
COUNTY OF JACKSON )

    Subscribed and sworn to before me on this 13th day of July, 1988.


                             BARBARA RAGAN
                             Notary Public

My Commission Expires:

July 10, 1991

<PAGE>

               STATE OF MISSOURI...OFFICE SECRETARY OF STATE

                  JAMES C. KIRKPATRICK, Secretary of State


                  AMENDMENT OF ARTICLES OF INCORPORATION
               (To be submitted in duplicate by an attorney)



HONORABLE JAMES C. KIRKPATRICK
SECRETARY OF STATE
STATE OF MISSOURI
JEFFERSON CITY, MO 65101


    Pursuant to the provisions of The General and Business corporation Law of 
Missouri, the undersigned Corporation certifies the following:

    (1) The present name of the Corporation is Newco RGLG 1, Inc.

    The name under which it was originally organized was Newco RGLG 1, Inc.

    (2) An amendment to the Corporation s Articles of Incorporation was adopted 
by the shareholders on July 29, 1988.

    (3) Article #1 is amended to read as follows:

        The name of the corporation is:  Electronic Processing, Inc.

    (4) Of the 300,000 shares outstanding, 300,000 of such shares were 
entitled to vote on such amendment.

    The number of outstanding shares of any class entitled to vote thereon as 
a class were as follows:

    Class             Number of
                      Outstanding Shares

    Common            300,000

    (5) The number of shares voted for and against the amendment was as 
follows:



<PAGE>


    Class             No. Voted For          No. Voted Against

    Common            300,000                0

    (6) If the amendment changed the number or par value of authorized shares 
having a par value the amount in dollars of authorized shares having a par 
value as changed is:

        N/A

    If the amendment changed the number of authorized shares without par 
value, the authorized number of shares without par value as changed and the 
consideration proposed to be received for such increased authorized shares 
without par value as are to be presently issued are:

        N/A

    (7) If the amendment provides for an exchange, reclassification, or 
cancellation of issued shares, or a reduction of the number of authorized 
shares of any class below the number of issued shares of that class, the 
following is a statement of the manner in which such reduction shall be 
effected:

        N/A

    IN WITNESS WHEREOF, the undersigned, Max Muller, President, has executed 
this instrument and its Assistant Secretary, Peggy Mitchell, has affixed its 
corporate seal hereto and attested said seal on the 10th day of August, 1988.

    PLACE
CORPORATE SEAL
    HERE
(IF NO SEAL, STATE "NONE")
    None                                 NEWCO RGLG 1, INC.

ATTEST:

/s/Peggy J. Mitchell                       /s/Max Muller
__________________________________       By_________________________
Peggy J. Mitchell, Asst. Secretary         Max Muller, President


<PAGE>




STATE OF KANSAS    )
                   ) ss.
COUNTY OF JOHNSON  )


    I, WANDA KENDRICK, a notary public do hereby certify that on this 10th 
day of August, 1988, personally appeared before me Max Muller, who, being by 
me first duly sworn, declared that he is the President of Newco RGLG 1, Inc., 
that he signed the foregoing document as President of the corporation, and 
that the statements therein contained are true.


                              WANDA KENDRICK
                              ______________________________
                              Notary Public



My commission expires 1/28/90

<PAGE>

               STATE OF MISSOURI ... OFFICE OF SECRETARY OF STATE
                     AMENDMENT OF ARTICLES OF INCORPORATION
                  (To be submitted in duplicate by an attorney)


SECRETARY OF STATE
STATE OF MISSOURI
P.O. BOX 778
JEFFERSON CITY, MO 65102

    Pursuant to the provisions of The General and Business Corporation Law of 
Missouri, the undersigned Corporation certifies the following:

    1.  The present name of the Corporation is Electronic Processing, Inc.

        The name under which it was originally organized was NEWCO RGLG, I, 
        INC.

    2.  An amendment to the Corporation s Articles of Incorporation was adopted 
        by the shareholders on October 12, 1995.

    3.  Articles Third is amended to read as follows:

        Third.  The aggregate number of shares, class and par value, if 
        any, which the corporation shall have authority to issue shall be 
        3,000,000  shares of common stock, each with a par value of $.01.

        There are no preferences, qualifications, limitations, 
        restrictions, or special or relative rights, including convertible 
        rights, if any, with respect to the authorized shares of stock.

    4.  Of the 300,000 shares outstanding, 300,000 of such shares were entitled 
        to vote on such amendment.

        The number of outstanding shares of any class entitled to vote 
        thereon as a class were as follows:

                 Class              Number Of Outstanding Shares
                 -----              ----------------------------

                 Common                        300,000

    5.  The number of shares voted and against the amendment was as follows:

<PAGE>

                 Class        No. Voted For       No. Voted Against
                 -----        -------------       -----------------

                 Common          300,000                  -0-

    6.  If the amendment changed the number of par value of authorized shares 
        having a par value, the amount in dollars of authorized shares having 
        a par value as changed is : $30,000.00

        If the amendment changed the number of authorized shared without 
        par value, the authorized number of shares without par value as 
        changed and the consideration proposed to be received for such 
        increased authorized shares without par value as are to be 
        presently issued are:   N/A

    7.  If the amendment provides for an exchange, reclassification, or 
        cancellation of issued shares, or a reduction of the number of 
        authorized shares of any class below the number of issued shares of 
        the class, the following is a statement of the manner in which such 
        reduction shall be effected:   N/A

    IN WITNESS WHEREOF, the undersigned, Tom W. Olofson, President, has 
executed this instrument and Robert C. Levy, its Secretary has affixed its 
corporate seal hereto and attested said seal on the 31st day of October, 1995.

    PLACE CORPORATE
    SEAL HERE
                                       ELECTRONIC PROCESSING, INC.




                                       By:  /s/Tom W. Olofson
                                          -------------------------------------
                                           Tom W. Olofson, President



By:  /s/ Robert C. Levy
   ----------------------------------
    Robert C. Levy, Secretary

<PAGE>

STATE OF KANSAS        )
                       ) ss.
COUNTRY OF WYANELETTE  )


    I, the undersigned, a Notary Public, do hereby certify that on this 31st 
day of October, 1995, Tom W. Olofson personally appeared before me who, being 
by me first duly sworn, declared the he is the President of Electronic 
Processing, Inc., and acknowledged the he signed the foregoing document as 
President of the corporation, and that the statement therein contained are 
true.

    NOTARIAL SEAL                       /s/ Judy E. Schuberger
                                       --------------------------------------
                                        Notary Public

My commission expires 4/5/97


<PAGE>

             STATE OF MISSOURI ... OFFICE OF SECRETARY OF STATE
                  AMENDMENT OF ARTICLES OF INCORPORATION
               (To be submitted in duplicate by an attorney)


SECRETARY OF STATE
STATE OF MISSOURI
P.O. BOX 778
JEFFERSON CITY, MO 65102

     Pursuant to the provisions of The General and Business Corporation Law 
of Missouri, the undersigned Corporation certifies the following:

      1.  The present name of the Corporation is Electronic Processing, Inc.

          The name under which it was originally organized was NEWCO RGLG,
          I, INC.

      2.  An amendment to the Corporation s Articles of Incorporation was
          adopted by the shareholders on April 1 , 1996.

      3.  Articles Third is amended to read as follows:

          Third.  The aggregate number of shares, class and par value, if any,
          which the corporation shall have authority to issue shall be 5,000,000
          shares of common stock, each with a par value of $.01.

          There are no preferences, qualifications, limitations, restrictions,
          or special or relative rights, including convertible rights, if any,
          with respect to the authorized shares of stock.

      4.  Of the 300,000 shares outstanding, 300,000 of such shares were
          entitled to vote on such amendment.

          The number of outstanding shares of any class entitled to vote thereon
          as a class were as follows:

              Class                  Number of Outstanding Shares
              -----                  ----------------------------

             Common                                      300,000

      5.  The number of shares voted and against the amendment was as follows:

              Class                 No. Voted For          No. Voted Against
              -----                 -------------          -----------------



<PAGE>



             Common                    300,000                    -0-

      6.  If the amendment changed the number of par value of authorized shares
          having a par value, the amount in dollars of authorized shares having
          a par value as changed is : $50,000.00

          If the amendment changed the number of authorized shared without par
          value, the authorized number of shares without par value as changed
          and the consideration proposed to be received for such increased
          authorized shares without par value as are to be presently issued
          are:   N/A

      7.  If the amendment provides for an exchange, reclassification, or 
          cancellation of issued shares, or a reduction of the number of
          authorized shares of any class below the number of issued shares of
          the class, the following is a statement of the manner in which such
          reduction shall be effected:   N/A

      IN WITNESS WHEREOF, the undersigned, Tom W. Olofson, President, has 
executed this instrument and Robert C. Levy, its Secretary has affixed its 
corporate seal hereto and attested said seal on the 1st day of April, 1996.

      PLACE CORPORATE
      SEAL HERE
                                       ELECTRONIC PROCESSING, INC.


 
          
                                       By:  /s/ Tom W. Olofson  
                                          ----------------------------
                                           Tom W. Olofson, President

ATTEST:


By:/s/ Robert C. Levy
   -----------------------------
     Robert C. Levy, Secretary




<PAGE>





STATE OF MISSOURI       )
                        ) ss.
COUNTRY OF JACKSON      )


      I, the undersigned, a Notary Public, do hereby certify that on this 1st 
day of April, 1995, Tom W. Olofson personally appeared before me who, being 
by me first duly sworn, declared the he is the President of Electronic 
Processing, Inc., and acknowledged the he signed the foregoing document as 
President of the corporation, and that the statement therein contained are 
true.

{Notarial Seal}                               /s/ Judy E. Schuberger   
                                              --------------------------
                                              Notary Public


My commission expires:

      4/5/97  
- ----------------------


<PAGE>

              STATE OF MISSOURI . . . OFFICE OF SECRETARY OF STATE
                     AMENDMENT OF ARTICLES OF INCORPORATION
                  (TO BE SUBMITTED IN DUPLICATE BY AN ATTORNEY)


SECRETARY OF STATE
STATE OF MISSOURI
P. O. BOX 778
JEFFERSON CITY, MO  65102


     Pursuant to the provisions of The General and Business Corporation Law of
Missouri, the undersigned corporation hereby certifies the following:


     1.   The present name of the Corporation is Electronic
          Processing, Inc.

          The name under which it was originally organized was NEWCO
          RGLG I, Inc.


     2.   An amendment to the corporation's Articles of Incorporation
          was adopted by the directors and shareholders on April 1,
          1996.


     3.   Article Third is amended to read as follows:

          THIRD.  The aggregate number of shares, class and par value, if any,
          which the corporation shall have authority to issue shall be 5,000,000
          shares of common stock, each with a par value of $.01.

          There are no preferences, qualifications, limitations, restrictions,
          or special or relative rights, including convertible rights, if any,
          with respect to the authorized shares of stock.


     4.   Of the 300,000 shares of the corporation outstanding,
          300,000 of such shares were entitled to vote on such
          amendment.

          The number of outstanding shares of any class entitled to
          vote thereon as a class were as follows:

               Class               Number of Outstanding Shares
               -----               ----------------------------
               Common                         300,000

<PAGE>

     5.   The number of shares voted for and against such amendment
          were as follows:

          Class               No. Voted For  No. Voted Against
          -----               -------------  ----------------
          Common                 300,000            -0-


     6.   If the amendment changed the number of par value of authorized shares
          having a par value, the amount in dollars of authorized shares having
          a par value as changed is:  $50,000.00.

          If the amendment changed the number of authorized shares without par
          value, the authorized number of shares without par value as changed
          and the consideration proposed to be received for such increased
          authorized shares without par value as are to be presently issued 
          are:  N/A


     7.   If the amendment provides for an exchange, reclassification, or
          cancellation of issued shares, or a reduction of the number of
          authorized shares of any class below the number of issued shares of
          that class, the following is a statement of the manner in which such
          reduction shall be effected:  N/A


     IN WITNESS WHEREOF, the undersigned, Tom W. Olofson, President, has
executed this instrument and Robert C. Levy, its Secretary has affixed its
corporate seal hereto and attested said seal on the 1st day of April, 1996.


     PLACE CORPORATE
        SEAL HERE

                                        ELECTRONIC PROCESSING, INC.



                                                                                
                                        By:
                                           -------------------------------------
                                           Tom W. Olofson, President

ATTEST:

<PAGE>


By:
   ---------------------------
     Robert C. Levy, Secretary

STATE OF MISSOURI   )
                    ) ss.
COUNTY OF JACKSON   )


     I, the undersigned, a Notary Public, do hereby certify that on this 1st day
of April, 1996 Tom W. Olofson personally appeared before me who, being by me
first duly sworn, declared that he is the President of Electronic Processing,
Inc., a Missouri corporation, and acknowledged that he signed the foregoing
document as President of the corporation, and that the statements therein
contained are true.


     {Notarial Seal}

                                        -------------------------
                                        Notary Public


My commission expires:


- ----------------------

<PAGE>

      NUMBER                                                     SHARES
                            EPI ELECTRONIC PROCESSING INC
    COMMON STOCK                                               COMMON STOCK
INCORPORATED UNDER THE LAWS                                   SEE REVERSE FOR
 OF THE STATE OF MISSOURI                                    CERTAIN DEFINITIONS



This Certifies that



is the record holder of


              FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK, 
                          $.01 PAR VALUE PER SHARE, OF

                           ELECTRONIC PROCESSING, INC.

transferable on the books of the Corporation in person or by duly authorized
attorney on surrender of this certificate properly endorsed.  This certificate
shall not be valid until countersigned and registered by the Transfer Agent and
Registrar.
     WITNESS the facsimile seal of the Corporation and the signatures of its
duly authorized officers.
     Dated:


/s/ Robert C. Levy                    [SEAL]                /s/ Tom W. Olofson

     SECRETARY                                                  CHAIRMAN


COUNTERSIGNED AND REGISTERED:
     NORWEST BANK MINNESOTA, N.A.
               TRANSFER AGENT AND REGISTRAR



BY  /S/ L M Kaufman
               AUTHORIZED SIGNATURE


<PAGE>

     The Corporation shall furnish without charge to each stockholder who so 
requests a statement of the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock of the
Corporation or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights.  Such requests shall be made to
the Corporation's Secretary at the principal office of the Corporation.

     The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:


TEN COM   -  as tenants in common
TEN ENT   -  as tenants by the entireties
JT TEN    -  as joint tenants with right of
             survivorship and not as tenants
             in common

UNIF GIFT MIN ACT - ______________Custodian______________
                    (Cust)                    (Minor)
                    under Uniform Gifts to Minors
                    Act__________________________________
                                (State)
UNIF TRF MIN ACT -  _________Custodian (until age_______)
                    (Cust)
                    ______________under Uniform Transfers
                      (Minor)
                    to Minors Act________________________
                                       (State)


     Additional abbreviations may also be used though not in the above list.


FOR VALUE RECEIVED, _________________ hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
    IDENTIFYING NUMBER OF ASSIGNEE

/                                     /

________________________________________________________________________________
                     (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, 
                          INCLUDING ZIP CODE, OR ASSIGNEE)
________________________________________________________________________________

________________________________________________________________________________

__________________________________________________________________________Shares
of the common stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint

________________________________________________________________________Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.

Dated_______________________________

                                    X___________________________________________

                                    X___________________________________________
                            NOTICE:  THE SIGNATURE(S) TO THIS ASSIGNMENT MUST
                                     CORRESPOND WITH THE NAME(S) AS WRITTEN UPON
                                     THE FACE OF THE CERTIFICATE IN EVERY
                                     PARTICULAR, WITHOUT ALTERATION
                                     OR ENLARGEMENT OR ANY CHANGE WHATEVER.


Signature(s) Guaranteed




By____________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN 
ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCK-
BROKERS, SAVINGS AND LOAN ASSOCIATIONS AND 
CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION PROGRAM),
PURSUANT TO S.E.C. RULE 17aD-15.






AMERICAN BANK NOTE COMPANY  JAN 15, 1997 fm
3504 ATLANTIC AVENUE
SUITE 12
LONG BEACH, CA  90807          048462BK
(310)989-2333
(FAX) (310) 426-7450           Proof /s/ DW  NEW
                                    -------
 

<PAGE>

                           ELECTRONIC PROCESSING, INC.
                             1995 STOCK OPTION PLAN
                            ADOPTED OCTOBER 17, 1995
                            AMENDED NOVEMBER 4, 1996
                            AMENDED JANUARY 23, 1997

                                   I. PURPOSE

     The purposes of the Electronic Processing, Inc. 1995 Stock Option Plan (the
"Plan") are to: (1) closely associate the interests of the directors, officers
and all other employees of Electronic Processing, Inc. (the "Corporation") with
the interests of the shareholders by reinforcing the relationship between
participants' rewards and shareholder gains; (2) provide directors, officers and
all other employees with an equity ownership in the Corporation commensurate
with corporate performance, as reflected in increased shareholder value; (3)
maintain competitive compensation levels; and (4) provide an incentive to
officers and all other employees for continuous employment with the Corporation.


                               II. ADMINISTRATION

     (a)  The Plan shall be administered by the Board of Directors of the 
Corporation (the "Board") or a Stock Option Plan Committee ("Committee") of 
the Board. Unless the Committee is composed solely of not less than two 
members of the Board who qualify as "Non-Employee Directors" under Rule 16b-3 
or its successors promulgated under the Securities Exchange Act of 1934, as 
amended ("Rule 16b-3"), all grants of stock options under the Plan to 
officers and directors of the Corporation shall be made by the Board. (The 
administrator of the Plan shall be referred to herein as the "Committee", 
regardless of whether the Plan is administered by the Board or the 
Committee). In addition to its duties with respect to the Plan stated 
elsewhere in the Plan, the Committee shall have full authority, consistent 
with the Plan, to interpret the Plan, to promulgate such rules and 
regulations with respect to the Plan as it deems desirable, to delegate its 
ministerial responsibilities hereunder to appropriate persons and to make all 
other determinations necessary or desirable for the administration of the 
Plan.  All decisions, determinations and interpretations of the Committee 
shall be binding upon all persons.

     (b)  Stock options granted pursuant to the Plan ("Options") shall be 
either incentive stock options ("ISOs") intended to qualify under Section 422 
of the Internal Revenue Code of 1986, as amended (the "Code"), or 
nonqualified stock options ("NSOs") not intended to qualify under Section 422 
of the Code.  References in this Plan to Options shall include both ISOs and 
NSOs.

<PAGE>

     (c)  The Committee shall administer the Plan in a manner necessary to
establish and maintain the Options intended to constitute ISOs as ISOs, and the
Options intended to constitute NSOs as NSOs.  Accordingly, only employees of the
Corporation will be eligible for grants of ISOs.  However, the Corporation makes
no representation that the Options designated as ISOs and the Options designated
as NSOs will qualify at the time of grant as ISOs and NSOs, respectively, or
will continue to qualify as ISOs and NSOs respectively.  Nor does the
Corporation make any representation concerning the tax consequences to any
person upon receipt or exercise of any Option hereunder or the subsequent sale
of Common Stock acquired thereunder.


                         III. SHARES SUBJECT TO THE PLAN

     Shares of Common Stock that may be issued under the Plan shall be the
common stock, one cent ($.01) par value, of the Corporation ("Common Stock").
The aggregate number of shares of Common Stock, subject to adjustment pursuant
to Article XVI, which may be delivered on exercise of the Options is 270,000 and
such amounts of shares of Common Stock shall be, and hereby are reserved for
such purpose.  Such shares may be previously issued shares reacquired by the
Corporation or authorized but unissued shares.  If any Option expires,
terminates or is canceled for any reason, without having been exercised in full,
the shares covered by the unexercised portion of such Option shall again be
available for Options, within the limit specified above.


                                IV. PARTICIPANTS

     All members of the Board, except those serving on the Committee, and all
employees of the Corporation, or, if

                                        2
<PAGE>

applicable, its subsidiaries, including employees who are members of the Board,
shall be eligible to participate in the Plan; provided, however, that only
employees of the Corporation shall be granted ISOs.  Subject to the foregoing,
the Committee shall, from time to time, determine, in its discretion, the
directors and employees, who shall be eligible for participation in the Plan
(the "Participants").  (For purposes of the Plan, the term "Participant(s)"
shall, when appropriate, include any person permitted to exercise an Option in
accordance with the terms of the Plan.)  A member of the Board who is not an
employee of the Corporation shall not be eligible to receive ISOs.


                              V. GRANTS OF OPTIONS

     (a)  The Committee shall in its discretion determine the time or times when
Options shall be granted and the number of shares of Common Stock to be subject
to each Option, except that no Option may be granted more than ten years after
the effective date hereof.

     (b)  The Committee may in its discretion grant to Participants who are
employees of the Corporation either ISOs, NSOs or a combination of both and
shall at the time the Option is granted designate whether the Option is an ISO
or NSO.

     (c)  The Committee may only grant NSOs to Participants who are not
employees of the Corporation.

     (d)  At any given time, a share of Common Stock may be subject to only one
of the two types of Options that may be issued under the Plan.

     (e)  With respect to ISOs granted under the Plan, the aggregate fair market
value (determined as of the date the Option is granted) of the Common Stock with
respect to which ISOs are exercisable for the first time by the Participant
during any calendar year under all stock option plans of the Corporation and its
subsidiaries shall not exceed $100,000.  Notwithstanding the provisions for
acceleration of the date an Option is first

                                        3
<PAGE>

exercisable in Article VII and Article VIII, in no event shall the date that an
ISO is first exercisable be accelerated under this Plan if the acceleration
would cause an ISO of a Participant to exceed the limit set forth in this
paragraph.

     (f)  No Option intended to constitute an ISO shall be granted to an
employee who, at the time the Option is granted, owns (within the meaning of
Section 422(b)(6) of the Code) Common Stock possessing more than 10 percent of
the total combined voting power of all classes of stock of the Corporation or,
if applicable, any of its subsidiaries (hereinafter referred to as a "Ten
Percent Shareholder") unless (1) the purchase price of the Common Stock subject
to such Option shall be, subject to adjustment pursuant to Article XVI, at least
110 percent of the fair market value of the Common Stock on the day the Option
is granted determined in accordance with Article VI which relates to the method
for determining the fair market value of the Common Stock on the date the ISO is
granted, and (2) the Option by its terms is not exercisable after the expiration
of five years from the date such Option is granted.

     (g)  Each Option shall be evidenced by a written Option Agreement which
shall (1) state the terms and conditions of the Option in accordance with the
Plan; and (2) contain such additional provisions as may be required under
applicable laws, regulations, and rules or otherwise consistent with the terms
of the Plan as the Committee may determine.


                                VI. OPTION PRICE

     (a)  The purchase price of a share of Common Stock subject to an NSO shall
be, subject to adjustment pursuant to Article XVI, determined by the Committee
and may be less than the fair market value of the Common Stock on the date the
NSO is granted.

     (b)  Except as provided in paragraph (f) of Article V relating to ISOs
issued to Ten Percent Shareholders, the purchase price of a share of Common
Stock subject to an ISO shall be, subject to adjustment pursuant to Article XVI,
an amount equal to

                                        4
<PAGE>

the fair market value of the Common Stock on the day the ISO is granted.

     (c) The fair market value shall be the closing price at which the Common
Stock is traded on the day the ISO is granted. For this purpose, the closing
price of the Common Stock on any business day shall be (i) if such Common Stock
is listed or admitted for trading on any United States national securities
exchange, or if actual transactions are otherwise reported on a consolidated
transaction reporting system, the last reported sale price of Common Stock on
such exchange or reporting system, as reported in any newspaper of general
circulation, (ii) if the Common Stock is quoted on the National Association of
Securities Dealers Automated Quotations System ("NASDAQ"), or any similar system
of automated dissemination of quotations of securities prices in common use, the
closing bid quotation for such day of the Common Stock on such system, or (iii)
if neither clause (i) or (ii) is applicable, the mean between the high bid and
low ask quotations for the Common Stock as reported by the National Quotation
Bureau, Incorporated if at least two securities dealers have inserted both bid
and ask quotations for the Common Stock on at least 5 of the 10 preceding days.



                       VII. OPTION PERIOD; EXERCISE RIGHTS

     (a)  Except as provided in paragraph (f) of Article V relating to ISOs
issued to Ten Percent Shareholders, each Option shall be exercisable for a term
as the Committee shall determine, but not more than 10 years from the date it is
granted, and shall be subject to earlier termination as provided in Article
VIII.

     (b)  Unless specifically provided by the Committee in its sole discretion,
an Option shall become exercisable upon its grant.

                                        5
<PAGE>

              VIII. EXERCISE RIGHTS UPON TERMINATION OF EMPLOYMENT

     (a)  If a Participant terminates employment on account of becoming
disabled, the Participant may exercise the Option in whole or in part within one
year after the date of disability, but in no event later than the date on which
it would have expired if the Participant had not become disabled.

     For this purpose, a Participant shall be deemed to be disabled if he or she
is determined to be disabled for purposes of meeting any insurance requirements
under policies provided by the Corporation.  If no such policies are in effect,
disability shall have the same meaning as set forth in Section 22(e) of the
Code.

     (b)  If a Participant dies during a period in which he or she is entitled
to exercise an Option (including the periods referred to in paragraphs (a) and
(d) of this Article), the Option may be exercised at any time within its
remaining term as shall be prescribed in the Option Agreement, but in no event
later than the date on which it would have expired if the Participant had lived,
or one year after the Participant's death, whichever date is earlier, by the
Participant's executor or administrator or by any person or persons who shall
have acquired the Option directly from the Participant by will or the laws of
descent and distribution.  The Option may be exercised in whole or in part.

     (c)  If a Participant's employment with the Corporation or a subsidiary
shall be terminated for cause, he or she shall forfeit any and all outstanding
Option rights and such rights shall be deemed to have lapsed for purposes hereof
as of the date of the Participant's termination of service.

     (d)  If a Participant ceases to be employed by the Corporation or a
subsidiary for any reason other than disability, death or termination for cause
during a period in which he or she is entitled to exercise an Option, the
Participant's Option shall terminate three months after the date of such
cessation of employment, but in no event later than the date on which it would

                                        6
<PAGE>

have expired if such cessation of employment had not occurred.  During such
period the Option may be exercised only to the extent that the Participant was
entitled to do so at the date of cessation of employment.  The employment of a
Participant shall not be deemed to have ceased upon his or her absence from the
Corporation or a subsidiary on a leave of absence granted in accordance with the
usual procedures of the Corporation or such subsidiary.

     (e)  No acceleration of the exercise date of an ISO shall occur pursuant to
this Article if such earlier exercise would cause an ISO to violate paragraph
(e) of Article V.


                             IX. METHOD OF EXERCISE

     An Option shall be deemed exercised when (i) the Corporation has received
written notice of such exercise in accordance with the terms of the Option, (ii)
full payment of the aggregate exercise price of the shares of Common Stock as to
which the Option is exercised has been made, and (iii) arrangements that are
satisfactory to the Committee in its sole discretion have been made for the
Participant's payment to the Corporation of the amount that is necessary for the
Corporation to withhold taxes in accordance with applicable Federal, state or
local tax withholding requirements.  The exercise price of any share of Common
Stock purchased, and any required tax payment, shall be paid in cash, by the
tender of shares of Common Stock, or both.  If payment is made in cash, it may
be made by certified or official bank check, personal check or money order. If
payment is made by the tender of shares of Common Stock, the fair market value
of each such share shall be determined as of the day the shares are tendered for
payment, in a manner consistent with the determination of fair market value
under paragraph (b) of Article VI.  Any excess of the value of the tendered
shares over the purchase price will be returned to the Participant as follows:

          (i)  Any whole shares remaining in excess of the purchase price will
     be returned to the Participant in kind,

                                        7
<PAGE>

     and may be represented by one or more certificates as determined by the
     Corporation in its sole discretion.

          (ii) Any partial Shares remaining in excess of the purchase price will
     be returned to the Participant in cash.

No Participant shall be deemed to be a holder of any shares of Common Stock
subject to an Option unless and until a stock certificate or certificates for
such shares are issued to such person(s) under the terms of the Plan.  No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights for which
the record date is prior to the date such stock certificate is issued, except as
expressly provided in Article XVI.


                              X. WITHHOLDING TAXES

     Whenever the Corporation proposes or is required to issue or transfer
shares of Common Stock under the Plan, the Corporation shall have the right to
require the Participant to remit to the Corporation an amount sufficient to
satisfy any Federal, state and/or local withholding tax requirements prior to
the delivery of any certificate or certificates for such shares.  Alternatively,
the Corporation may issue or transfer such shares of Common Stock net of the
number of shares sufficient to satisfy the withholding tax requirements.  For
withholding tax purposes, the shares of Common Stock shall be valued on the date
the withholding obligation is incurred.


                        XI. NONTRANSFERABILITY OF OPTIONS

     Each Option shall be nonassignable and nontransferable by the Participant
other than by will or the laws of descent and distribution.  Each Option shall
be exercisable during the Participant's lifetime only by the Participant.

                                        8
<PAGE>

                    XII. REPURCHASE OF SHARES BY CORPORATION

     The Corporation is under no obligation to repurchase Common Stock acquired
pursuant to the exercise of an Option hereunder.


                              XIII. USE OF PROCEEDS

     The proceeds received by the Corporation from the sale by it of shares of
Common Stock to Participants exercising Options pursuant to the Plan will be
used for the general purposes of the Corporation.

                            XIV. LAWS AND REGULATIONS

     (a)  If any provision of the Plan should be held invalid or illegal for any
reason, such determination shall not affect the remaining provisions hereof, but
instead the Plan shall be construed and enforced as if such provision had never
been included in the Plan.  Without limiting the generality of the foregoing,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3.  To the extent any provision of the Plan or action by
the Committee hereunder is inconsistent with the foregoing requirements, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee.

     (b)  The determinations and the interpretation and construction of any
provision of the Plan by the Committee shall be final and conclusive.  This Plan
shall be governed by the laws of the State of Missouri.  Headings contained in
this Plan are for convenience only and shall in no manner be construed as part
of this Plan.  Any reference to the masculine, feminine, or neuter gender shall
be a reference to such other gender as is appropriate.


                     XV. ISSUANCE OF SHARES OF COMMON STOCK

                                        9
<PAGE>

     As a condition of any sale or issuance of shares of Common Stock upon
exercise of any Option, the Committee may require such agreements or
undertakings, if any, as the Committee may deem necessary or advisable to assure
compliance with any applicable law or regulation include, but not limited to,
the following:

          (a)  a representation and warranty by the Participant to the
     Corporation, at the time any Option is exercised, that the Participant is
     acquiring the shares of Common Stock to be issued for investment and not
     with a view to, or for sale in connection with, the distribution of any
     such shares; and

          (b)  a representation, warranty and/or agreement to be bound by any
     legends that are, in the opinion of the Committee, necessary or appropriate
     to comply with the provisions of any securities law deemed by the Committee
     to be applicable to the issuance of the shares of Common Stock and are
     endorsed upon the share certificates.


                 XVI. ADJUSTMENT UPON CHANGES IN CAPITALIZATION

     (a)  Options granted under the Plan shall be subject to adjustment by the
Committee as to the number and price of shares subject to such Options in the
event of changes in the outstanding shares of Common Stock by reason of stock
dividends, stock splits, recapitalization, reorganizations, mergers,
consolidations, combinations, exchanges, or other relevant changes in
capitalization occurring after the date of grant of any such Option.  In the
event of any such change in the outstanding shares of Common Stock, the
aggregate number of shares available under the Plan shall be approximately
adjusted by the Committee, whose determination shall be conclusive.

     (b)  Except as otherwise expressly provided herein, the issuance by the
Corporation of shares of its capital stock of any class, or securities
convertible into shares of capital stock of any class, either in connection with
a direct sale or upon the exercise of rights or warrants to subscribe therefor,
or upon

                                       10
<PAGE>

conversion of shares or obligations of the Corporation convertible into such
shares or other securities, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or exercise price of the
shares of Common Stock then subject to outstanding Options granted under the
Plan.

     (c)  Without limiting the generality of the foregoing, the existence of
outstanding Options granted under the Plan shall not affect in any manner the
right or power to the Corporation to make, authorize or consummate (i) any or
all adjustments, recapitalizations, reorganizations or other changes in the
Corporation's capital structure or its business; (ii) any merger or
consolidation of the Corporation; (iii) any issue by the Corporation of debt
securities, or preferred or preference stock that would rank above the shares of
Common Stock subject to outstanding Options; (iv) the dissolution or liquidation
of the Corporation; (v) any sale, transfer or assignment of all or any part of
the assets or business of the Corporation; or (vi) any other corporate act or
proceedings, whether of a similar character or otherwise.


                           XVII. NO EMPLOYMENT RIGHTS

     Nothing in the Plan shall confer upon any employee of the Corporation or of
a subsidiary, if applicable, any right to continued employment, or interfere
with the right of the Corporation or a subsidiary to terminate his or her
employment at any time, for any reason.


                  XVIII. TERM OF PLAN; TERMINATION; AMENDMENTS

     (a)  This Plan is effective as of October 17, 1995 (the "Effective Date"),
the date of its original adoption by the unanimous consent of the Board and the
unanimous consent of the Shareholders of the Corporation.  This Plan shall
continue in effect until all Options granted hereunder have expired or been
exercised, unless sooner terminated under the provisions relating

                                       11
<PAGE>

thereto.  No Option shall be granted after 10 years from the Effective Date.

     (b)  The Board may from time to time amend, terminate or suspend the Plan
or an Option, provided, however that, except to the extent provided in Article
XVI, no such amendment may (i) without approval by the Corporation's
shareholders, increase the number of shares of Common Stock reserved for Options
or change the class of persons eligible to receive Options or involve any other
change or modification requiring shareholder approval under Rule 16b-3, (ii)
permit the granting of Options that expire beyond the maximum period described
in Article V, (iii) extend the termination date of the Plan as set forth in
Article V; or (iv) cause the Plan to be ineligible to issue ISOs, (v) reduce the
purchase price of an outstanding ISO, (vi) without approval by the Corporation's
shareholders, materially increase in any other way the benefits accruing to
Participants or (vii) except to the extent otherwise specifically provided in
the Plan, substantially impair any Option previously granted to a Participant
without the consent of such Participant.  Any termination or suspension of the
Plan shall not affect Options already granted and such Options shall remain in
full force and effect as if this Plan had not been terminated or suspended.  No
Option may be granted while the Plan is suspended or after it is terminated.

     (c)  Except as set forth herein, the Board or the Committee, as the case
may be, may at any time or times amend the Plan, or amend any outstanding Option
or Options for the purpose of satisfying the requirements of any changes in
applicable laws or regulations or for any other purpose which at the time may be
permitted by law.  In the event that applicable rules or regulations are
promulgated by the Internal Revenue Service which permit the acceleration of the
date an Option is first exercisable without violating the $100,000 limit
described in paragraph (e) of Article V, the Committee is authorized to act on
behalf of the Board in amending the Plan to permit acceleration in conformity
with such rules or regulations.

                                       12
<PAGE>

     (d)  Nothing contained in this Plan shall be construed to prevent the
Corporation or any subsidiary, if applicable, from taking any corporate action
which is deemed by the Corporation or any such subsidiary to be appropriate or
in its best interest, whether or not such action would have an adverse effect on
the Plan or any award made under the Plan.  No employee, beneficiary, other
person shall have any claim against the Corporation or any subsidiary as a
result of any such action.


                   XIX. INDEMNIFICATION OF COMMITTEE AND BOARD

     The Corporation may, consistent with applicable law, indemnify members of
the Committee against any liability, loss or other financial consequence
suffered by them with respect to any act or omission of the Committee or its
members relating to the Plan to the same extent and subject to the same
conditions as specified in the indemnity provisions contained in the By-Laws of
the Corporation

                               XX. INTERPRETATION

     (a)  If any provision of the Plan should be held invalid or illegal for any
reason, such determination shall not affect the remaining provisions hereof, but
instead the Plan shall be construed and enforced as if such provision had never
been included in the Plan.  Without limiting the generality of the foregoing,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors promulgated under the Securities
Exchange Act of 1934 and, in the case of ISOs, with all applicable conditions of
Section 422 of the Code or its successors and regulations promulgated
thereunder.  To the extent any provision of the Plan or action by the Committee
or Board hereunder is inconsistent with the foregoing requirements, it shall be
deemed null and void.

     (b)  The determinations and the interpretation and construction of any
provision of the Plan by the Committee shall be final and conclusive.

                                       13

<PAGE>






January 28, 1997


Electronic Processing, Inc.
501 Kansas Avenue
Kansas City, Kansas 66105

Gentlemen:

We have assisted in the preparation and filing of a registration statement on
Form SB-2, File No. 333-16805, filed with the Securities and Exchange Commission
on November 26, 1996 (the "Registration Statement") under the Securities Act of
1933, as amended (the "Act"), relating to the public offering of an aggregate of
up to 2,000,000 shares of Common Stock, no par value (the "Shares"), of
Electronic Processing, Inc. (the "Company") (including Common Stock underlying
an overallotment option to purchase from the Company up to 240,000 shares of
Common Stock).

As counsel for the Company and at the Company's request, we have examined such
corporate records, certificates and other documents and such questions of law as
we have considered necessary or appropriate for the purposes of this opinion.

We have assumed that appropriate action will be taken, prior to the offer and
sale of the Shares, to register and qualify the Shares for sale under all
applicable state securities or "blue sky" laws.

We have also assumed the legal capacity to sign and the genuineness of all
signatures of all persons executing instruments or documents examined or relied
upon by us and have assumed the conformity with original documents of all
documents examined by us as copies of such documents.

Based upon the foregoing and upon information furnished to us by the Company's
officers, it is our opinion that the Shares being issued and sold have been duly
and validly authorized and, when issued and sold as described in the 
Registration Statement and in accordance with the terms of the Underwriting 
Agreement, a form of which was filed as an exhibit to the Registration 
Statement, and upon receipt by the Company of payment therefor as provided in 
the Underwriting Agreement, the Shares will be legally issued, fully paid and
non-assessable.



<PAGE>
Electronic Processing, Inc.
January 28, 1997
Page 2


We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the reference to this firm under the caption "Legal
Matters" in the Prospectus contained therein. This consent is not to be
construed as an admission that we are a party whose consent is required to be
filed with the Registration Statement under the provisions of the Act or the
rules and regulations of the Securities and Exchange Commission promulgated
thereunder.

Very truly yours,

PETILLON & HANSEN


/s/ Petillon & Hansen


 

<PAGE>

MODIFICATION AGREEMENT

THIS AGREEMENT is made this 31st day of October 1996, by and between 
Electronic Processing, Inc., a Missouri corporation (hereinafter "Debtor"), 
and INDUSTRIAL STATE BANK, a Kansas banking corporation (hereinafter "Bank");

WHEREAS Debtor did execute and deliver unto Bank its original Promissory Note 
dated June 17, 1996 in the original amount of $500,000.00 made payable to 
Industrial State Bank, and as security therefor did pledge machinery, 
equipment, inventory, accounts receivable, software, contract rights, and the 
personal guarantee of Tom W. Olofson as per the original Security Agreement 
and Guarantee dated June 17, 1996;

WHEREAS Debtor has now requested that Bank change the current maturity date 
from July 1, 1997 to October 1, 1997;

WHEREAS Bank has reviewed Debtor's request and hereby agrees to the same;

NOW THEREFORE, IN CONSIDERATION of the promises and agreements contained 
herein, and other good and valuable considerations, the receipt and sum of 
which is hereby acknowledged and agreed, it is hereby mutually agreed by the 
undersigned that said original Note No. 46359 shall mature October 1, 1997, 
with interest at Industrial State Bank's base lending rate plus two (2) 
percent (10.25%) per annum, paid and adjusted quarterly beginning February 1, 
1997, and on the 1st day of each quarter thereafter until October 1, 1997, 
when the entire unpaid principal balance then outstanding, together with all 
unpaid accrued interest, shall become due and payable in full.  All other 
terms and conditions of the existing obligation described herein shall remain 
unchanged and continue in full force and effect.

IN ADDITION, BY INITIALING BELOW, BOTH DEBTOR AND LENDER AGREE THAT NO 
UNWRITTEN AGREEMENTS EXIST BETWEEN THEM AND THIS AGREEMENT IS THE FINAL 
AGREEMENT BETWEEN THEM.

ADDITIONAL TERMS: NONE

Lender:  Industrial State Bank
            By______________
              President

Debtor: Electronic Processing, Inc.
            By___________________
              Chairman & CEO

All Due: October 1, 1997
Address: 501 Kansas Avenue
Kansas City, Kansas 66105
INDUSTRIAL STATE BANK
(Secured Lender)
By:_____________________
     W. R. Hook
     President


ELECTRONIC PROCESSING, INC.
(Debtor)

By_____________________
     Tom W. Olofson
     Chairman/CEO

     Electronic Processing, Inc.

<PAGE>

     a Missouri corporation
     501 Kansas Avenue
     Kansas City, Kansas 66105
     BORROWERS NAME AND ADDRESS
     "I" includes each borrower above, jointly and severally.

     Industrial State Bank
     32nd & Strong
     P.O. Box 6007
     Kansas City, Kansas 66106
     "You" means the lender, its successors and assigns.

     Loan Number   46359
     Date   JUNE 17, 1996
     Maturity Date  JULY 1, 1997
     Loan Amount $ 500,000.00
     Renewal of 45912
I promise to pay you, or your order, at your address listed above the PRINCIPAL
sum of FIVE HUNDRED THOUSAND DOLLARS AND NO/100 ------------DOLLARS $500,000.00
Single Advance:  I have received all of this principal sum.  No additional 
advances are contemplated under this note.
XX Multiple Advance:  The principal sum shown above is the maximum amount of 
principal I can borrow under this note.  As of today I have received the 
amount of $__________________ and future principal advances are contemplated.
Conditions:  The conditions for future advances are __________________________
XX Open end credit:  You and I agree that I may borrow up to the maximum 
amount of principal more than one time.  This feature is subject to all other 
conditions and expires no later than_____________________. Closed End Credit: 
You and I agree that I may borrow up to the maximum only one time (and 
subject to all other conditions).
PURPOSE:  The purpose of this loan is to provide a line of credit for working 
capital .
INTEREST:  I agree to pay interest (calculated on a 365/actual days basis) on 
the principal balance(s) owing from time to time as stated below.
Fixed Rate:  I agree to pay interest at the fixed, simple rate of ________% 
per year.
XX Variable Rate:  I agree to pay interest at the initial simple rate of 
10.25 % per year.  This rate may change as stated below.
XX  Index Rate:  the future rate will be 2% IN EXCESS OF the following index 
rate:  INDUSTRIAL STATE BANK'S BASE LENDING RATE PER ANNUM. 
No Index:  The future rate will not be subject to any internal or external 
index.  It will be entirely in your control.
XX Frequency and Timing:  The rate on this note may increase as often as 
QUARTERLY. 
An increase in the interest rate will take effect QUARTERLY BEGINNING OCTOBER 
1, 1996 
Limitations:  The rate on this note will not at any time (and no matter what 
happens to any index rate used) go above or below these limits.
Maximum Rate:  The rate will not go above ___________   Minimum Rate:  The 
rate will not go below __________.
Post Maturity Rate:  I agree to pay interest on the unpaid balance of this 
note owing after maturity, and until paid in full, as stated below:
on the same fixed or variable rate basis in effect before maturity (as 
indicated above.) XX at a rate equal to 5% IN EXCESS OF THE OTHERWISE 
APPLICABLE RATE HEREON AT THE TIME OF DEFAULT.
ADDITIONAL CHARGES:  In addition to interest I __ have paid     __ agree to 
pay   the following additional charges ________________.
PAYMENTS:  I agree to pay this note as follows:
XX Interest:  I agree to pay accrued interest QUARTERLY, BEGINNING 
OCTOBER 1, 1996 AND QUARTERLY THEREAFTER AND AT MATURITY.
XX Principal:  I agree to pay the principal AS AVAILABLE, BUT NOT LATER THAN 
JULY 1, 1997.

<PAGE>

Installments:  I agree to pay this note in ____ payments.  The first payment 
will be in the amount of $_______ and will be due __________, ____.  A 
payment of $__________ will be due on the _______ day of each _________ 
thereafter.  The final payment of the entire unpaid balance of principal and 
interest will be due _____________, ____.
Effect of Variable Rate:  An increase in the interest rate will have the 
following effect on the payments. The amount of each scheduled payment will 
be increased.
The amount of the final payment will be increased.
Notice to Borrower:  This written agreement is the final expression of the 
agreement between you and the Lender, and as such it may not be contradicted 
by evidence of any prior oral agreements or of a contemporaneous oral 
agreement between you and the Lender.
ADDITIONAL TERMS:  NONE          INDUSTRIAL STATE BANK
ELECTRONIC PROCESSING, INC.

______________________  _______________________
Chairman (Borrower)     Pres. (Lender)

Affirmation: By signing or initialing here, Borrower & Lender affirm that no 
unwritten oral agreement between them exists.

XX SECURITY:  This note is secured by: MACHINERY, EQUIPMENT, SOFTWARE, 
INVENTORY, ACCOUNTS RECEIVABLE, CONTRACT RIGHTS, AND THE PERSONAL GUARANTEES 
OF TOM W. OLOFSON, ALL AS PER THE ORIGINAL DOCUMENTS OF EVEN DATE.

SIGNATURES:  I agree to the terms of this note (including those on the other 
side).  I have received a copy on today's date.  

ELECTRONIC PROCESSING, INC.
A Missouri Corporation


By:____________________________
   Tom W. Olofson, Chairman/CEO

Signed________________________for Lender, Title PRESIDENT


<PAGE>

             CONSENT OF CERTIFIED INDEPENDENT PUBLIC ACCOUNTANTS



Electronic Processing, Inc.
501 Kansas Avenue
Kansas City, Kansas

We hereby consent to the use in the Prospectus constituting part of this 
Registration Statement on Form SB-2 of our report dated November 8, 1996 
relating to the financial statements of Electronic Processing, Inc., which 
appears in such Prospectus. We also consent to the references to us under the 
headings "Experts" and "Selected Financial Data" in such Prospectus. However, 
it should be noted that Baird, Kurtz & Dobson has not prepared or certified 
such "Selected Financial Data."




                                       /s/ Baird, Kurtz & Dobson
                                       -----------------------------------
                                       BAIRD, KURTZ & DOBSON

Kansas City, Missouri
January 29, 1997




<PAGE>

                                                  Exhibit 23.3

The Board of Directors                                 
Electronic Processing, Inc.





I hereby consent to being named in the Electronic Processing, Inc. registration
statement on Form SB-2 as a director-nominee of the Company.




                                             W. BRYAN SATTERLEE
                                             ---------------------------------
                                             W. Bryan Satterlee



January  20  , 1997
        -----


 


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