<PAGE>
FORM 10-SB/A
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
UNDER SECTION 12(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934
INTERNATIONAL COMPUTEX, INC.
(Name of Small Business Issuer in its Charter)
GEORGIA 58-1938206
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5500 INTERSTATE NORTH PARKWAY
SUITE 507
ATLANTA, GEORGIA 30328
(Address of principal executive offices)(Zip Code)
Issuer's telephone number: (770) 953-1464
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered: each class is to be registered:
NONE NONE
Securities to be registered under Section 12(g) of the Act:
COMMON STOCK, $.001 PAR VALUE
-----------------------------
Title of Class
<PAGE>
PART F/S
Financial statements of Registrant for the fiscal years ended December 31,
1994, 1995 and 1996, audited by Habif, Arogeti & Wynne, P.C., 1073 West
Peachtree Street, N.E., Atlanta, Georgia 30309-3837, immediately follow as a
supplement to, and not in place of, the information contained in this
Registration Statement as originally filed.
2
<PAGE>
[LETTERHEAD OF HABIF, AROGETI & WYNNE, P.C. APPEARS HERE]
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Board of Directors and Stockholders of
International CompuTex, Inc.
We have audited the accompanying balance sheets of INTERNATIONAL COMPUTEX,
INC. [an S corporation] as of December 31, 1996 and 1995, and the related
statements of income, changes in stockholders' equity, and cash flows for the
years ended December 31, 1996, 1995, and 1994. 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 audits 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 INTERNATIONAL COMPUTEX, INC.
as of December 31, 1996 and 1995 and the results of its operations and its
cash flows for the years ended December 31, 1996, 1995, and 1994 in conformity
with generally accepted accounting principles.
Atlanta, Georgia
January 24, 1997, except for the second paragraph of Note J, as to which the
date is February 7, 1997.
F-1
<PAGE>
INTERNATIONAL COMPUTEX, INC.
BALANCE SHEETS
DECEMBER 31,
<TABLE>
<CAPTION>
ASSETS
------
<S> <C> <C>
1 9 9 6 1 9 9 5
---------- --------
Current assets
--------------
Cash $ 119,750 $ 80,969
Accounts receivable, net of allowance for doubtful
accounts of $24,082 for 1996 and $-0- for 1995 1,020,319 807,370
Prepaid expenses 13,738 5,543
---------- --------
Total current assets 1,153,807 893,882
Property and equipment, net 168,178 86,709
----------------------
Other assets
------------
Software development costs 276,372
Deferred offering costs 22,424
Miscellaneous assets 230 1,489
---------- --------
$1,621,011 $982,080
========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities
-------------------
Accounts payable $ 45,260 $ 34,620
Current portion of long-term debt 4,189
---------- --------
Total current liabilities 49,449 34,620
Long-term debt, net of current portion 18,935
--------------- ---------- --------
Total liabilities 68,384 34,620
---------- --------
Stockholders' equity
--------------------
Common stock, $.001 par value,
20,000,000 shares authorized;
2,125,000 shares issued and outstanding 2,125 2,125
Retained earnings 1,550,502 945,335
---------- --------
Total stockholders' equity 1,552,627 947,460
---------- --------
$ 1,621,011 $ 982,080
=========== =========
</TABLE>
See auditors' report and accompanying notes
F-2
<PAGE>
INTERNATIONAL COMPUTEX, INC.
STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Operating revenues $ 3,891,034 $ 2,875,872 $ 1,246,414
- ------------------ --------- --------- ---------
Expenses
- --------
Operating 1,833,939 1,611,066 694,791
General and administrative 239,778 150,699 126,876
--------- --------- ---------
2,073,717 1,761,765 821,667
--------- --------- ---------
Income from operations 1,817,317 1,114,107 424,747
Other income
- ------------
Interest income 3,067 4,798 2,548
--------- --------- ---------
Net income - historical 1,820,384 1,118,905 427,295
Pro forma provision for
income taxes [Note A] 686,000 422,000 161,000
--------- ---------- ---------
Pro forma net income $ 1,134,384 $ 696,905 $ 266,295
========= ========= =========
Pro forma earnings per
share [Note A] $ .50 $ .30 $ .12
========= ========= ==========
Weighted average shares
outstanding 2,287,855 2,287,855 2,287,855
========= ========= =========
</TABLE>
See auditors' report and accompanying notes.
F-3
<PAGE>
INTERNATIONAL COMPUTEX, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
<TABLE>
<CAPTION>
Common Retained Treasury
Stock Earnings Stock
------ ---------- --------
<S> <C> <C> <C>
Balances, December 31, 1993 $ 2,355 $ 217,814 $[2,300]
Net income 427,295
Retirement of treasury stock [ 230] [ 2,070] 2,300
Distributions paid [ 137,903]
----- ----------- -----
Balances, December 31, 1994 2,125 505,136 -0-
Net income 1,118,905
Distributions paid [ 678,706]
----- ----------- -----
Balances, December 31, 1995 2,125 945,335
Net income 1,820,384
Distributions paid [1,215,217]
----- ----------- -----
Balances, December 31, 1996 2,125 1,550,502
Pro Forma Distribution of
S corporation earnings [1,528,902]
----- ----------- -----
Pro Forma Balances, December 31,
1996 $ 2,125 $ 21,600 $ -0-
===== ========= =====
</TABLE>
See auditors' report and accompanying notes
F-4
<PAGE>
INTERNATIONAL COMPUTEX, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31,
Increase [Decrease] In Cash
<TABLE>
<CAPTION>
1 9 9 6 1 9 9 5 1 9 9 4
---------- --------- ---------
<S> <C> <C> <C>
Cash flows from operating activities
- ------------------------------------
Net income $ 1,820,384 $1,118,905 $ 427,295
--------- --------- -------
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 31,518 20,007 6,261
Provision for bad debt 24,082
Changes in assets and liabilities
Increase in accounts receivable [ 237,031] [ 483,252] [ 132,388]
Decrease [Increase] in prepaid
expenses [ 8,195] 3,225 [ 7,756]
Decrease [Increase] in
miscellaneous assets 1,029 [ 1,029]
Increase in accounts payable 10,640 21,979 8,352
--------- -------- --------
Total adjustments [ 177,957] [ 439,070] [ 125,531]
--------- -------- --------
Net cash provided by
operating activities 1,642,427 679,835 301,764
--------- -------- --------
Cash flows from investing activities
- ------------------------------------
Acquisition of property and equipment [ 88,257] [ 59,228] [ 36,553]
Software development costs capitalized [ 276,372]
--------- -------- --------
Net cash used by investing activities [ 364,629] [ 59,228] [ 36,553]
--------- -------- --------
Cash flows from financing activities
- ------------------------------------
Stockholder distributions paid [1,215,217] [ 678,706] [ 137,903]
Principal payments on long-term debt [ 1,376]
Deferred offering costs [ 22,424]
--------- -------- --------
Net cash used by financing activities [1,239,017] [ 678,706] [ 137,903]
--------- -------- --------
Net increase [decrease] in cash 38,781 [ 58,099] 127,308
Cash, beginning of year 80,969 139,068 11,760
--------- -------- --------
Cash, end of year $ 119,750 $ 80,969 $ 139,068
========= ========= =========
NON-CASH FINANCING AND INVESTING ACTIVITIES
- -------------------------------------------
Acquisition of property and equipment
by long-term debt $ 24,500
</TABLE>
See auditors' report and accompanying notes
F-5
<PAGE>
INTERNATIONAL COMPUTEX, INC.
NOTES TO FINANCIAL STATEMENTS
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
------------------------------------------
General:
-------
INTERNATIONAL COMPUTEX, INC., a Georgia corporation, was formed for the
purpose of development and sale of computer software and computer consulting
services.
Revenue Recognition:
-------------------
Revenue consists primarily of computer consulting services. Revenue is
primarily recognized as the services are performed and invoiced.
Property and Equipment:
----------------------
Property and equipment are carried at cost. Expenditures for maintenance and
repairs are expensed currently, while renewals and betterments that
materially extend the life of an asset are capitalized. The cost of assets
sold, retired, or otherwise disposed of, and the related allowance for
depreciation, are eliminated from the accounts, and any resulting gain or
loss is recognized.
Depreciation is provided using the straight-line method over the estimated
useful lives of the assets, which are as follows:
Leasehold improvements 5 years
Computer equipment 5 years
Business office equipment 5 years
Vehicle 5 years
Other Assets:
------------
Organization costs are recorded at cost and amortized on a straight-line
basis over a five-year period.
Income Taxes:
------------
The Company had elected to be treated as an S Corporation pursuant to the
Internal Revenue Code for federal and state income tax purposes. The income
of an S Corporation is taxable to the individual stockholders. Such income
is distributable to the stockholders without any further tax consequences.
The stockholders will revoke the S Corporation status immediately prior to
the closing of the proposed public offering, and the Company will be taxable
as a C corporation from that date forward. The Company will account for
income taxes using the liability method and will accrue deferred tax assets
and liabilities for differences in the timing of income and expense items
between financial statement and tax return reporting.
F-6
<PAGE>
INTERNATIONAL COMPUTEX, INC.
NOTES TO FINANCIAL STATEMENTS [CONTINUED]
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: [Continued]
------------------------------------------
Income Taxes: [Continued]
------------
A pro forma provision for income taxes has been presented which represents
income taxes which would have been provided had the Company operated as a C
Corporation.
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 certain assets, liabilities,
and disclosures. Accordingly, the actual amounts could differ from those
estimates. Any adjustments applied to estimated amounts are recognized in
the year in which such adjustments are determined.
Pro Forma Earnings Per Share:
----------------------------
Pro forma earnings per share is computed using the weighted average number
of shares outstanding during the period including common stock equivalents
which are accounted for using the treasury stock method. Common stock
equivalents granted by the Company at a price below the proposed public
offering price per common share have been included in the common shares
outstanding as if they were outstanding for all periods presented using the
treasury stock method, and the proposed public offering price, anticipated
at a range of $8 to $10 per share.
Historical earnings per share data has not been presented.
Financial Instruments:
---------------------
The carrying value of cash, accounts payable and notes payable approximates
fair value because of the short-term maturity of those instruments. For
other debt instruments, the carrying value approximates fair value based on
stated interest rates.
Software Development Costs:
--------------------------
In accordance with Statement of Financial Accounting Standards No. 86,
"Accounting for the Costs of Computer Software to be Sold, Leased, or
Otherwise Marketed," initial costs are charged to operations as research
prior to the development of a detailed program design or a working model.
Thereafter, the Company capitalizes the direct costs and allocated overhead
associated with the development of software products. Costs incurred
subsequent to the product release, and research and development performed
under contract, are charged to operations.
F-7
<PAGE>
INTERNATIONAL COMPUTEX, INC.
NOTES TO FINANCIAL STATEMENTS [CONTINUED]
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: [Continued]
------------------------------------------
Software Development Costs: [Continued]
--------------------------
Capitalized costs are amortized over the estimated product life (seven
years) on the straight-line basis. Amortization will begin when the product
is available for general release to customers. Unamortized costs are carried
at the lower of book value or net realizable value.
B. CASH - CONCENTRATION OF CREDIT RISK:
-----------------------------------
As of December 31, 1996, the Company maintained deposits in one institution
which exceeded the Federal Deposit Insurance Corporation limit by
approximately $600,000. The difference between this amount and the amount of
cash per the Company's records is primarily due to stockholder distributions
paid in December 1996 that were outstanding as of December 31, 1996.
C. PROPERTY AND EQUIPMENT, NET:
---------------------------
Property and equipment consist of the following:
<TABLE>
<CAPTION>
December 31,
1996 1995
-------- --------
<S> <C> <C>
Leasehold improvements $ 5,785 $ -0-
Computer equipment 177,649 102,677
Business office equipment 11,317 11,317
Vehicle 32,000 -0-
-------- --------
226,751 113,994
Accumulated depreciation [ 58,573] [ 27,285]
-------- --------
Net $168,178 $ 86,709
======== ========
</TABLE>
Depreciation expense for the years ended December 31, 1996, 1995, and 1994
amounted to $31,288, $19,777 and $6,031, respectively.
D. LEASES AND COMMITMENTS AND CONTINGENCIES:
----------------------------------------
The Company maintains operating leases for office space. Rent expense for
the years ended December 31, 1996, 1995, and 1994 totaled $79,496, $57,497,
and $17,063, respectively. Leases expire in March, 1997 and May, 2000.
F-8
<PAGE>
INTERNATIONAL COMPUTEX, INC.
NOTES TO FINANCIAL STATEMENTS [CONTINUED]
D. LEASES AND COMMITMENTS AND CONTINGENCIES: [Continued]
----------------------------------------
The future minimum lease commitments are as follows:
December 31, Amount
----------- ------
1997 $ 41,701
1998 27,985
1999 28,710
2000 11,962
-------
$110,358
=======
E. LONG-TERM DEBT:
---------------
Long-term debt consists of the following:
Amount
------
Note payable, due in monthly installments
of $507 including principal and interest
at 8.75% per annum through September
2001, secured by vehicle. $ 23,124
Less amount due within one year [ 4,189]
-------
$ 18,935
=======
Maturity of long-term debt is as follows:
December 31, Amount
------------ ------
1997 $ 4,189
1998 4,571
1999 4,987
2000 5,441
2001 3,936
-------
$ 23,124
=======
F. EMPLOYEE BENEFIT PLANS:
----------------------
Effective July 1, 1995, the Company adopted a qualified deferred
compensation plan, under Section 401(k) of the Internal Revenue Code. Under
the plan, employees may elect to defer up to fifteen percent (15%) of their
salary, subject to Internal Revenue Service limits. The Company contributes
a matching fifty percent (50%) of the first five percent (5%) of employee
contributions. In addition, the plan allows for the Company to make
discretionary contributions based on the participant's salary. The Company
made no profit sharing contribution for 1996. The Company contributed
$29,143 to the Deferred Compensation Plan for 1996.
F-9
<PAGE>
INTERNATIONAL COMPUTEX, INC.
NOTES TO FINANCIAL STATEMENTS [CONTINUED]
F. EMPLOYEE BENEFIT PLANS: [Continued]
----------------------
The Company adopted the 1995 Restricted Nonqualified Incentive Stock Option
Plan (the "1995 Plan"), effective August 1, 1995, for officers and key
employees, which provided for non-qualified stock options. Options to
purchase 173,311 shares of common stock have been granted at $.543 per share
and are outstanding under the 1995 Plan.
The Company adopted the 1996 Stock Option Plan, effective December 20, 1996
(the "1996 Plan"). Under the 1996 Plan, which provides for issuance of
either incentive stock options or nonqualified stock options, the maximum
number of shares of common stock for which options may be granted is 500,000
shares reduced by the number of shares outstanding under or issued pursuant
to stock options granted under the 1995 Plan. As of December 31, 1996, no
options had been granted under the 1996 Plan. The 1995 Plan was terminated,
prospectively, effective December 20, 1996.
G. STOCK SPLITS:
------------
Effective January 23, 1996, the Board of Directors authorized a 1,000 for 1
forward stock split of the Company's common stock, to be effected in the
form of a stock dividend. Effective December 20, 1996, the Board of
Directors authorized a 2.7597 for 1 forward stock split to be effected in
the form of a stock dividend. After these splits, a total of 2,125,000
shares of common stock was issued and outstanding. Retroactive effect has
been given to these splits.
H. MAJOR CUSTOMER INFORMATION:
--------------------------
During the years ended December 31, 1996, 1995, and 1994, revenue from one
major customer totaled approximately $2,740,000, $2,340,000, and $810,000,
respectively. These amounts accounted for 70%, 81% and 65% of total
revenues, respectively. The amount due from the customer, included in
accounts receivable, totaled approximately $600,000 and $703,000 at December
31, 1996 and 1995, respectively.
I. SOFTWARE DEVELOPMENT COSTS:
--------------------------
Unamortized balance, January 1, 1996 $ -0-
Current year (1996):
Total expenditures 276,372
Less research and development expense -0-
----------
Net capitalized costs $ 276,372
==========
F-10
<PAGE>
INTERNATIONAL COMPUTEX, INC.
NOTES TO FINANCIAL STATEMENTS [CONTINUED]
I. SOFTWARE DEVELOPMENT COSTS: [Continued]
--------------------------
In management's opinion, the net realizable value of future sales exceeds
the carrying value of unamortized software development costs; therefore, no
adjustment to carrying value is required. Research and development costs for
1995 and 1994 totaled approximately $111,000 and $13,000, respectively.
J. SUBSEQUENT EVENTS:
-----------------
In January, 1997, the Company received proceeds from the sale of Senior
Debentures in the amount of $1,115,000. Interest accrues at 6% per annum,
payable semi-annually, and the principal amount is due in January 2000.
Purchasers of the Senior Debentures received Warrants from the stockholders
of the Company to purchase up to 250,000 shares of common stock held by
these stockholders at an exercise price of 60% of the initial public
offering price. The Company is required to prepay the Senior Debentures in
whole, without penalty, if the Company receives at least $5,000,000 gross
proceeds from a public offering or a private placement of its common stock.
As part of the issuance of the Senior Debentures, the Company incurred a
closing cost of approximately $133,000 which has been capitalized and will
be written off over the life of the loan.
Subsequent to the sale of the Senior Debentures, the Company was informed
that as a result of misunderstandings in the placement of the Senior
Debentures certain inaccurate statements may have been made to purchasers of
the Senior Debentures regarding their ability to resell the Common Stock
that could be acquired upon exercise of their Warrants. As a result, the
Company has made a rescission offer to each purchaser of the Senior
Debentures. The Company has agreed to include the shares of Common Stock
that may be purchased under the Warrants in the registration statement for
an initial public offering of its Common Stock. The Company also has agreed
to maintain the effectiveness of the registration statement with respect to
those shares of Common Stock for a minimum of 30 days, subject to a one-year
"lock up" of those shares. After the lock-up period, which extends for one
year after the effective date of the initial public offering registration
statement, the shares of Common Stock would be freely tradeable if the
Warrants are exercised during the period in which the registration statement
was effective. If the Warrants are exercised after that time, the shares of
Common Stock received upon exercise of the Warrants would be restricted
stock, subject to resale under Rule 144 after they have been held for a
minimum of two years.
F-11
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
Registrant caused this Amended Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized.
February 13, 1997 INTERNATIONAL COMPUTEX, INC.
BY: /s/ Haim E. Dahan
---------------------------------------
HAIM E. DAHAN, CHIEF EXECUTIVE
OFFICER AND CHIEF FINANCIAL OFFICER
