SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
February 24, 2000
Date of Report
(Date of Earliest Event Reported)
QUINTEK TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in its Charter)
537 Constitution Avenue, Suite B
Camarillo, California 93012
(Address of principal executive offices)
800/482-6874
(Registrant's telephone number)
JUNIPER ACQUISITION CORPORATION
1504 R Street, N.W.
Washington, D.C. 20009
(Former name and former address)
California 0-28541 77-050536
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) Pursuant to an Agreement and Plan of Reorganization
(the "Acquisition Agreement"), Quintek Technologies, Inc. ("Quintek"
or the "Company"), a California corporation, has acquired all the
outstanding shares of common stock of Juniper Acquisition
Corporation ("Juniper"), a Delaware corporation, from the
shareholders thereof in an exchange for an aggregate of 400,000
shares of common stock of Quintek (the "Acquisition"). As a result,
Juniper has become a wholly-owned subsidiary of Quintek.
The Acquisition was approved by the unanimous consent of the
Board of Directors of Quintek on February 18, 2000. The Acquisition
was effective February 24, 2000. The Acquisition is intended to
qualify as a reorganization within the meaning of Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended.
Quintek had 16,491,066 shares of common stock issued and
outstanding prior to the Acquisition and 16,891,066 shares issued
and outstanding following the Acquisition.
Upon effectiveness of the Acquisition, pursuant to Rule
12g-3(a) of the General Rules and Regulations of the Securities and
Exchange Commission, Quintek elected to become the successor issuer
to Juniper for reporting purposes under the Securities Exchange Act
of 1934 and elects to report under the Act effective February 24, 2000.
A copy of the Acquisition Agreement is filed as an exhibit
to this Current Report and is incorporated in its entirety herein.
The foregoing description is modified by such reference.
(b) The following table contains information regarding the
shareholdings of Quintek's current directors and executive officers
and those persons or entities who beneficially own more than 5% of
its common stock (giving effect to the exercise of any warrants held
by each such person or entity exercisable within 60 days of the date
hereof):
Number of Shares of Percent of
Common Stock Beneficially Common Stock
Name Owned (1) Beneficially
Thomas W. Sims
Chairman, President,
Chief Executive Officer
and a Director (3) 1,280,627 7.6%
Catherine Sims
Secretary (3) 1,287,000 7.62%
Kurt Kunz
Vice President, Engineering
and a Director (4) 1,619,000 9.58%
Teresa Kunz
Treasurer (4) 1,619,000 9.58%
Kelly Kunz
Vice President, Manufacturing
and a Director (5) 260,000 1.54%
Thomas Salahub
Vice President, Sales & Marketing
and a Director 470,000 2.78%
Susan Woodruff
Controller 70,000 *
Alex Black
c/o Quintek Technologies, Inc.
537 Constitution Avenue, Suite B
Camarillo, California 93012 (6) 2,300,000 12.31%
Kim Kunz
c/o Quintek Technologies, Inc.
537 Constitution Avenue, Suite B
Camarillo, California 93012 (7) 910,000 5.23%
All officers and directors
as a group
(7 persons) 3,759,627 22.3%
* Less than 1% percent
(1) Includes options and warrants which are exercisable within
60 days of the date hereof.
(2) Based upon 16,891,066 shares outstanding following the
Acquisition.
(3) Includes 1,227,000 shares owned by a family trust for Thomas
W. Sims, Catherine Sims and their children. Catherine Sims
is the spouse of Thomas Sims.
(4) Includes 1,619,000 shares owned by a family trust for Kurt
Kunz, Teresa Kunz and their children. Teresa Kunz is the
spouse of Kurt Kunz.
(5) Includes 260,000 shares owned by a family trust for Kelly
Kunz, his wife and their children.
(6) Includes 500,000 shares and warrants for the purchase of
1,800,000 shares of common stock. Only for the calculation
of the percentage of common stock beneficially owned by Mr.
Black, the exercise of all his warrants is assumed and the
number of shares of common stock outstanding following the
exercise of such warrants is assumed to be 18,691,066 shares.
(7) Includes 400,000 shares and warrants for the purchase of
510,000 shares of common stock owned by family trusts for
Kim Kunz, his wife and their children. Only for the
calculation of the percentage of common stock beneficially
owned by Mr. Kunz, the exercise of all his warrants is
assumed and the number of shares of common stock outstanding
following the exercise of such warrants is assumed to be
17,401,066 shares. Mr. Kunz is the brother of Kurt Kunz and
Kelly Kunz and the brother-in-law of Teresa Kunz, but does
not reside with any of them and is not an officer, director
or employee of the Company.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The consideration exchanged pursuant to the Acquisition
Agreement was negotiated between Juniper and Quintek. In evaluating
the Acquisition, Juniper used criteria such as the value of assets
of Quintek, Quintek's ability to compete in the market place,
Quintek's current and anticipated business operations, and Quintek
management's experience and business plan. In evaluating Juniper,
Quintek placed a primary emphasis on Juniper's status as a reporting
company under Section 12(g) of the Securities Exchange Act of 1934,
as amended, and Juniper's facilitation of Quintek's becoming a
reporting company under the Act.
(b) The Company intends to continue the manufacturing,
marketing and selling of its proprietary equipment for recording
digital images on aperture card media.
BUSINESS
THE COMPANY
Quintek, the successor to Quintek Electronics,
Inc. ("QEI"), was established for the primary purpose
of developing, manufacturing, and distributing the
4300 Aperture Card Imaging System's technology, used
for recording digital images on aperture card media
(the "4300 System"). The 4300 System consists of the
4305 Aperture Card Plotter, the 4303 Universal
Interface, aperture card media, support software, and
related services.
There can be no assurance that the Company
will be able to implement its business plan
successfully and make a profit selling its products.
There can be no assurance that the Company will be
able to continue to manufacture the 4300 System or
that it will be able to produce and sell its products
economically or in sufficient quantities to enable the
Company to continue as a going concern.
APERTURE CARDS
Aperture cards are small, rectangular cards
(about the size of a timecard) each of which contains
a 35mm chip of microfilm. The microfilm is used for
storing visual information and the remainder of the
card is used to identify pertinent aspects of the
microfilmed image. Quintek believes the aperture card
is a preferred media for long term storage of data
because of its long life expectancy and because
microfilm is a well known and established medium.
Quintek estimates that over 500 million master
aperture cards are produced each year worldwide using
the conventional photographic process for imaging and
developing the film. The chemistry and fumes involved
with photographic film development may be hazardous,
and the waste material resulting from the chemical
process may be considered hazardous waste material.
Quintek's 4300 System does not use a chemical process
and does not produce any hazardous waste material.
Aperture cards have been used for permanent
storage of engineering plans and designs for more than
50 years. Although development of electronic data
imaging and storage have vastly improved ways to
manipulate and distribute records, digital media lack
the storage longevity of microfilm. Magnetic media can
degrade over time and information on them can be lost,
even if stored under ideal conditions. In contrast,
microfilm is eye readable and therefore access to the
stored information is not dependent on file formats,
software, computers, drives, and technology.
THE 4300 APERTURE CARD IMAGING SYSTEM
Quintek's principal product is the 4300
System. The 4300 System is comprised of the 4303
Universal Interface ("4303 Interface") and the 4305
Aperture Card Plotter ("4305 Plotter") and related
media and services. The two components operate
together to provide a system for producing aperture
media directly from vector, ASCII, raster and
postscript image files. The 4303 Interface is hosted
on personal computers and functions to interface the
4305 Plotter with the operator and user system.
Quintek's 4303 Interface software can be adapted to
accommodate most user files.
The 4300 System is intended to eliminate the
problems of conventional aperture card manufacturing
by producing aperture card media with a chemical-free
process. Aperture cards produced with the 4300 System
can be used with conventional printing, duplicating
and viewing equipment. The 4300 System aperture
cards have an estimated life expectancy of over 100
years and are manufactured by the Bell & Howell
Corporation using dry silver film supplied by Eastman
Kodak Company which can be developed by application of
heat rather than by a liquid or viscous process. The
4305 Plotter uses a low powered laser to etch the
image on the film chip and a patented heat process to
develop and fix the film. The 4300 System aperture
card media can be used with most standard microfilm
viewers, duplicators, and printers.
Quintek believes that the 4300 System is the
only chemical free aperture card production system
available on the market today, providing a reliable
and "environmentally friendly" alternative to
competitive products. By using the 4300 System, the
customer can eliminate much of the equipment, floor
space, operators, maintenance, and all chemicals
required for conventional card production.
A basic 4300 System, including a 4303
Interface and a 4305 Plotter running at the rate of 20
cards per hour, retails for approximately $50,000. The
Hollerith Punch and Performance Option (40 cards per
hour) can be added for an additional cost of $10,000
each.
MANUFACTURING
Bofors AB currently manufactures the 4305
Plotter units, internal modules, and spare parts at
their factory located in Karlskoga, Sweden. The
production is done on an "as required" basis in
support of Quintek's delivery requirements. Bofors
has at least one vendor for all components and
multiple vendors for most components. The loss of a
supplier for any item manufactured by or purchased
only from such vendor could have an adverse effect on
the Company's operations. The 4303 Interface is based
on the standard personal computer platform and
consists of a combination of standardized and
customized hardware and software modules. With the
exception of the Greensheet Interface Board (which
links a computer with the 4305 Plotter), Quintek has
several sources for all purchased components within
the 4303 Interface configuration. Quintek currently
has one reliable vendor for the Greensheet Board, Ikon
Corp., and plans to eliminate this board in the near
future by developing a new feature to allow the 4305
Plotter to be plugged into the printer connector of a
standard personal computer. Until the development of
this technology, loss of the supplier of the
Greensheet Board could have a materially adverse
effect on the Company's operations.
A continued supply of aperture card media is
crucial to the success of Quintek's business. Without
aperture cards, Quintek's customers are not able to
use the equipment, services and software supplied by
Quintek. The loss of the supply of aperture cards and
dry silver film would have a material adverse effect
on the Company's operations.
MARKETING
Companies which require engineering drawings,
documents, or records to be stored for over seven
years are considered prime prospects for the 4300
System, regardless of the type of system used for
creating or accessing the information. Quintek
believes the market for the 4300 System is sizeable as
manufacturing companies generate engineering drawings
and have requirements for long term storage of
critical information. Quintek believes the need for
long term storage of documentation will continue to
grow as advances in technology continue. Quintek's
customers are generally large manufacturers or utility
companies that produce complex mechanical and
electrical products in industries, including the
automobile, aerospace, shipbuilding, gas and oil,
railroad, defense, and road construction industries.
Many of these companies use aperture cards to maintain
and store the drawings used in maintenance and
production of their products. There is no assurance
that Quintek is accurate in its beliefs.
SUBSIDIARIES
Qtek Aperature Card AB, a 49%-owned subsidiary
of the Company incorporated in Sweden, maintains
relations with Bofors AB, the manufacturer of certain
of Quintek's equipment, distributes and provides
customer support for Quintek's European customers, and
produces aperture cards for customers using the 4300
System. Qtek Aperature Card AB maintains offices at
Bofors AB's facilities in Karlskoga, Sweden, and has
two full-time employees who are its majority
shareholders and one part-time employee. Quintek may
consider selling its stake in Qtek Aperature Card AB
in the future.
CUSTOMERS
Existing customers include Morgan
Construction, TRW, SCGC, the United States Navy,
Pacific Gas & Electric, Southern California Gas
Company, Lockheed-Martin, Smiths Industries, Zenith
Electronics, Mallory Controls, York International,
Dresser Industries, Caltrans, Duke Power, the Canadian
Department of Defense, Aqua-Chem, Aramco, and National
Machinery.
During the last half of 1999, Quintek expanded
its customer base to include NASA, Whirlpool
Corporation, Lufkin Industries, Baltimore Gas &
Electric, Document Management Solutions, and Salt
River Project. However, there can be no assurance
that the Company will continue to attract customers,
or that existing customer relationships will continue.
WARRANTY AND SERVICE
Quintek provides a 90 day warranty on all of
its products. Thereafter extended maintenance
contracts are offered at typical rate of 10% of retail
price per year. Maintenance service typically
includes phone support, preventative maintenance,
spare parts, software upgrades, and on-site service
calls.
In most cases, Quintek provides spare parts,
phone support, software upgrades and technical support
and relies on a third party technical representative
to provide on-site service. Quintek has contracted
with Anacomp Corporation to provide local service
through Anacomp's nationwide network of service centers.
COMPETITION
Quintek faces both indirect and direct
competition. Indirect competition presents itself in
the form of paper plotters, cameras, keypunch
equipment and any other product which can be used as
part of the conventional aperture card production
process.
Direct competitors are manufactures of
equipment which produce aperture cards directly from a
digital data source. These include Wicks and Wilson
Limited (produced in England), LaserScan (produced in
England), and Microbox (produced in Germany). The
aperture card plotters manufactured by these companies
use chemicals for film development and Quintek
believes that their products are more complex, larger,
heavier, less reliable, and more expensive than the
4300 System.
CD-ROM technology is considered both
competitive and complementary to the 4300 System. It
is competitive in the sense that drawing information
can be digitized and stored on optical disk instead of
aperture card. It is complementary because aperture
cards provide a means to make optical disk information
available to the outside world in an eye-readable
format. Many early users of Electronic Image
Management systems now believe there are drawbacks
with respect to long term survival of digital data on
optical disk (e.g. some drives and media used seven
years ago are no longer available). Quintek believes
that users of electronic media must plan on evolution
of new media types which will need to be supported by
new drives, hardware controllers, standards,
specifications, and software modules. Further, Quintek
believes that paper and microfilm will not easily
become obsolete because the interpretation of
information on paper and microfilm is independent of
advances in new technology. However, there can be
no assurance that new technology will not be developed
that will supplant Quintek's products and eliminate
their market.
REGULATION
Quintek's business is not subject to any
special regulatory regime, other than general laws and
regulations, such as employment and safety
regulations, that apply generally to manufacturers and
distributors of industrial equipment. United States
and Swedish laws and regulations regarding
importation, exportation, and customs will apply to
any units imported from Sweden.
EMPLOYEES
As of February 22, 2000, the Company had 12
full time employees and 8 part-time employees.
PATENTS, TRADEMARKS AND LICENSES
The original patents covering the 4300 System
technology were issued to NCR Corporation, an
unaffiliated company, in the late 1980s. All patents
originally issued expired due to failure to pay
maintenance fees. Quintek applied to the United
States Patent Office for reinstatement of these
patents and has recovered three patents to date. There
can be no assurance that efforts to recover the
remaining patents will be successful, or that failure
to recover the patents will not have a material
adverse effect on the Company's business. The
following provides a summary of the recovered patents:
Patent Number Expiration Date Name/Description
4,794,224 04/09/07 Dry Film Developer for
an Aperture Card Printer
4,818,950 04/24/07 Low Jitter
Phase-Locked Loop (internal
circuit board)
4,841,343 03/25/08 Dry Film Development
Process for an Aperture Card Printer
Quintek received Registration Number 1,930,949
on October 31, 1995 from the United States Patent and
Trademark Office on the mark "Quintek." The trademark
expires on October 31, 2001 unless renewed.
OFFICES
Quintek leases 3,120 square feet for executive
offices at 537 Constitution Avenue, Suite B,
Camarillo, California. Its telephone number is
800/482-6874 and its telecopy number is 805/482-6874.
The lease expires April 30, 2002, with an option to
extend for three years. The lease rate, as of
September 30, 1999, was $2,531 per month.
Quintek leases 1,800 square feet of office and
warehouse space at 720 North 4th Street, Montpelier,
Idaho, to store parts, conduct engineering operations,
and perform small scale assembly and administrative
tasks in support of the 4300 System. The lease rate,
as of September 30, 1999, was $750 per month. Quintek
has an option to purchase the property for $105,000
before July 31, 2000.
Quintek leases 1,110 square of office space at
12500 Fair Lakes Circle, Suite 140, Fairfax, Virginia,
for sales and marketing activities. The lease expires
April 2002. The lease rate, as of September 30, 1999,
was $2,599 per month.
Quintek maintains an Internet Web site at
www.quintek.com.
LEGAL PROCEEDINGS
Quintek is not involved in any lawsuits other
than routine litigation incidental to ongoing business.
DESCRIPTION OF SECURITIES
The authorized capitalization of the Company
consists of 50,000,000 shares of common stock and
10,000,000 shares of preferred stock. Upon
consummation of the Acquisition, the Company had
16,891,066 shares of its common stock and no shares of
preferred stock issued and outstanding.
The Company has issued common stock purchase
warrants as follows:
Class A - 1,456,955 warrants with a strike price of
$1.00 per share, expiring on January 14, 2000.
Class B - 1,791,736 warrants with a strike price of
$2.00 per share, expiring on January 14, 2000.
Class C - 1,791,756 warrants with a strike price of
$3.00 per share, expiring on January 14, 2001.
Class D - 1,791,756 warrants with a strike price of
$4.00 per share, expiring on January 14, 2001.
Class E - 799,044 warrants with a strike price of
$1.00 per share, expiring on October 1, 2000.
Class F - 811,544 warrants with a strike price of
$2.00 per share, expiring on October 1, 2000.
Class G - 811,544 warrants with a strike price of
$3.00 per share, expiring on October 1, 2001.
Class H - 811,544 warrants with a strike price of
$4.00 per share, expiring on October 1, 2002.
Class I - 2,636,868 warrants with a strike price of
$1.00 per share, expiring on July 1, 2000.
Class J - 1,142,500 warrants with a strike price of
$1.00 per share, expiring on January 14, 2004.
Stock issued in respect of Classes A through D
warrants are for free-trading shares. Stock issued in
respect of Classes E through J warrants are for
restricted shares. There is no public trading market
for the warrants. Exercise of the warrants could
result in substantial dilution of existing common
stockholders.
The proceeds to the Company upon exercise of
the Class A warrants through February 23, 2000 was
$1,189,248. The Company has extended the Class A and
Class B warrants until March 14, 2000 at a strike
price of $2.00 per share.
MARKET FOR THE COMPANY'S SECURITIES
The common stock of Quintek is traded
over-the-counter ("OTC") on the NASD OTC Bulletin
Board under the symbol "QTEK." The market for OTC
common stock is often characterized by low volume and
broad price and volume volatility. Quintek cannot
give any assurance that a stable trading market will
develop for its stock or that an active trading market
will be sustained. Moreover, the trading price of
Quintek's common stock could be subject to wide
fluctuations due to such factors as quarterly
variations in operating results, competition,
announcements of new products by Quintek or its
competitors, product enhancements by Quintek or its
competitors, regulatory changes, differences in actual
results from those expected by investors and analysts,
changes in financial estimates by securities analysts,
and other events or factors.
The Company has been a non-reporting publicly
traded company with certain of its securities exempt
from registration under the Securities Act of 1933.
The Nasdaq Stock Market has implemented a change in
its rules requiring all companies trading securities
on the NASD OTC Bulletin Board to become reporting
companies under the Securities Exchange Act of 1934.
Quintek acquired all the outstanding shares of Juniper
to become successor issuer to it pursuant to Rule
12g-3 of the Securities and Exchange Commission in
order to comply with the Eligibility Rule for the OTC
Bulletin Board.
The following table represents the recent
trading history of the Company common stock:
MONTH HIGH LOW VOLUME
February 1999 3.250 0.500 31,600
March 1999 2.000 0.750 25,000
April 1999 1.125 0.750 19,100
May 1999 1.562 0.937 79,200
June 1999 1.437 0.500 220,100
July 1999 2.406 0.968 2,125,000
August 1999 2.250 1.500 1,121,700
September 1999 2.125 1.187 538,700
October 1999 2.000 1.062 2,182,300
November 1999 1.687 1.125 1,063,700
December 1999 1.562 1.218 1,839,700
January 2000 1.750 1.062 2,553,200
February 2000* 1.875 0.875 1,670,900
*Through February 22, 2000
The market price of the Company's common
stock over the last 52 weeks has ranged from $0.50 to
$2.40. On February 23, 2000, the high was $1.343 and
the low $1.281 with a volume of 80,400 shares.
TRANSFER AGENT
The Company's transfer agent is Interwest
Transfer Company, Salt Lake City, Utah.
MANAGEMENT
Name Age Position
Thomas W. Sims 49 Chairman, President,
Chief Executive Officer, Director
Thomas Salahub 59 Vice President, Sales and
Marketing, Director
Kurt S. Kunz 40 Vice President, Engineering,
Director
Kelly Kunz 46 Vice President, Manufacturing,
Director
Teresa Kunz 38 Treasurer
Catherine Sims 49 Secretary
Susan Woodruff 47 Controller
All directors hold office until the next annual
meeting of shareholders or until their successors are
duly elected and qualified. Officers serve at the
pleasure of the board of directors. Set forth below
is a summary description of the business experience of
each director and executive officer of the Company.
THOMAS W. SIMS, Chairman, President, Chief
Executive Officer and Director of the Company. Mr.
Sims was a co-founder of the Company in 1991. Prior
to founding the Company, Mr. Sims was employed at
Bunker Ramo, Eaton, Alpharel and PMT from 1973 to
1991. Mr. Sims received a Bachelors of Science degree
in Electronics Engineering and Technology from
Southern Colorado State University in 1973.
THOMAS SALAHUB, Vice President, Sales and
Marketing and Director of the Company. Mr. Salahub
joined the Company as Vice President, Sales and
Marketing in May, 1998. From July, 1991 through
May, 1998, Mr. Salahub was Vice President of
CBIS/DynCorp. From 1965 to 1991, Mr. Salahub was
employed in technical, sales and executive management
positions. Mr. Salahub attended Long Beach College,
Pierce College and Los Angeles Valley College between
1963 and 1966.
KURT KUNZ, Vice President, Engineering and
Director of the Company. Mr. Kunz was a co-founder of
the Company and served as Vice President, Engineering
and Director since inception in 1991. Prior to QEI,
Mr. Kunz was employed as a software and mechanical
engineer at QED Systems, Alpharel, and PMT. Mr. Kunz
received a Bachelors of Science degree in Mechanical
Engineering from the University of Utah in 1986. Mr.
Kunz is the brother of Kelly Kunz and the husband of
Teresa Kunz.
KELLY KUNZ, Vice President, Manufacturing and
Director of the Company. Mr. Kunz joined the Company
as Vice President, Manufacturing in June, 1997. From
1988 to 1997, Mr. Kunz taught mathematics,
electronics, physics and computer science in the Bear
Lake School District in California. Prior thereto,
Mr. Kunz was an electrician and technician at BYU
Motion Picture Studios, AC Electronics, Lane TV, and
NE Wolf. Mr. Kunz received a Bachelor of Science
Degree in Electrical Engineering from Idaho State
University in 1989. Mr. Kunz is the brother of Kurt
Kunz and brother-in-law of Teresa Kunz.
CATHERINE SIMS, Secretary of the Company.
Ms. Sims was Secretary of the Company from 1991 until
1997. Ms. Sims is a licensed registered nurse and
received an Associate's Degree in Nursing in 1985 from
Ventura College. Since 1995, Ms. Sims has been
employed by St. John's Medical Center in Oxnard,
California. Ms. Sims is the wife of Thomas W. Sims.
TERESA KUNZ, Treasurer of the Company. Ms.
Kunz served as Treasurer of the Company since its
inception in 1991. Ms. Kunz received an Associate of
Arts degree in accounting from Ricks College in 1981.
Ms. Kunz is the wife of Kurt Kunz and sister-in-law of
Kelly Kunz.
SUSAN WOODRUFF, Controller of the Company.
Ms. Woodruff served as Controller of the Company since
October, 1998. Ms. Woodruff held positions of Senior
Accountant, Controller, and Firm Administrator for
Zivetz, Schwartz & Saltsman from May, 1997 to October,
1998, and was Controller/Firm Administrator for Deems
and Carpenter from October 1997 to April 1997. Prior
thereto, she held accounting and administrative
positions with Jack Rouse & Son and MENU Corporation.
Ms. Woodruff attended Colorado State University and
Emporia State University and is a California Certified
Income Tax Preparer. Ms. Woodruff was a director of
the Los Angeles Business Counsel from 1995 to 1996 and
also served as Chairwoman of the Business and Finance
Committee from 1995 to 1997. Ms. Woodruff also served
as President of the California CPA Society Firm
Administrators Association for 1990.
The Company has no audit, compensation or
executive committees. There is a key man life
insurance policy on Thomas W. Sims, in the amount of
one million dollars, payable to the Company as
beneficiary. No other policies of this nature are in
effect at this time with respect to any other
directors, officers or control persons.
RELATED TRANSACTIONS
Pacific Diagnostics Technologies, Inc. ("PDX")
was a designer and developer of the Stat-K Analyzer, a
device used to measure the potassium level in blood.
On December 15, 1997 PDX ceased operations and filed
for protection under Chapter 11 of the United States
Bankruptcy Code. A Plan of Reorganization was
confirmed by the Bankruptcy Court on January 14, 1999
(the "Plan"). Under the Plan, all assets of QEI were
sold to PDX, all PDX management resigned, QEI's
management and business became the management and
business of PDX, and the name of the combined company
was changed to Quintek Technologies, Inc. Quintek
does not intend to restart production and distribution
of the Stat-K product line. However, management is
seeking a company in the medical industry to license
or purchase the Stat-K assets and technology.
Quintek has made unsecured loans to certain
officers and directors. These loans are due on June
30, 2019, and bear interest at 4% per annum. The
terms of the loans call for each officer to pay $100
per month, plus yearly interest payments, until the
loan matures. The loan balance must be paid on or
before June 30, 2019. As of September 30, 1999, a
total of $282,275 in principal and interest was
outstanding.
EXECUTIVE COMPENSATION
No officer or employee of the Company earned
in excess of $100,000 in the year ended
December 31, 1999.
SUMMARY OF UNAUDITED FINANCIAL INFORMATION
Quintek incurred net losses for the years
ended June 30, 1999 and 1998 of ($2,097,345) and
($1,138,923) on sales of $638,526 and $328,494,
respectively and during the nine months ended
September 30, 1999, the Company incurred a net loss of
($391,655) on sales of $120,084. As of September 30,
1999, the Company had current assets of $518,070 and
current liabilities of $1,258,442. If losses
continue, the Company may need to raise additional
capital through the placement of its securities or
from debt or equity financing. If the Company is not
able to raise such financing or obtain alternative
sources of funding, management may be required to
curtail operations. The figures given in this
paragraph have not been audited. The Company is
required to file audited financial statements within
75 days following the Acquisition, and reference
should be made to those financial statements when filed.
RISK FACTORS
HISTORY OF LOSSES. The Company has
experienced substantial losses and there can be no
assurance that future operations will be profitable.
Revenues and profits, if any, will depend upon various
factors, including market acceptance of its concepts,
market awareness, its ability to expand its customer
base, dependability of its advertising and recruiting
network, and general economic conditions. There is no
assurance that the Company will achieve its goals and
the failure to achieve such goals would have an
adverse impact on it.
QUINTEK MAY NEED ADDITIONAL FINANCING. Future
events, including the problems, delays, expenses and
difficulties frequently encountered by companies, may
lead to cost increases that could make the Company's
funds insufficient to support the Company's
operations. The Company may seek additional capital,
including an offering of its equity securities, an
offering of debt securities or obtaining financing
through a bank or other entity. The Company has not
established a limit as to the amount of debt it may
incur nor has it adopted a ratio of its equity to a
debt allowance. If the Company needs to obtain
additional financing, there is no assurance that
financing will be available from any source, that it
will be available on terms acceptable to the Company,
or that any future offering of securities will be
successful. The Company could suffer adverse
consequences if it is unable to obtain additional
capital when needed.
LOSS OF THE COMPANY KEY EMPLOYEES MAY
ADVERSELY AFFECT GROWTH OBJECTIVES. The Company's
success in achieving its growth objectives depends
upon the efforts of Thomas W. Sims, President of the
Company, and other Company management members. The
loss of the services of any of these individuals may
have a material adverse effect on the Company
business, financial condition and results of
operations. There is no assurance that the Company
will be able to maintain and achieve its growth
objectives should it lose any or all of these
individuals' services.
FAILURE TO ATTRACT OR RETAIN QUALIFIED
PERSONNEL. A change in labor market conditions that
either further reduces the availability of employees
or increases significantly the cost of labor could
have a material adverse effect on the Company's
business, financial condition and results of
operations. The Company's business is dependent upon
its ability to attract and retain highly sophisticated
research and development personnel, sales personnel,
business administrators and corporate management.
There is no assurance that it will be able to employ a
sufficient number of such personnel in order to
accomplish its growth objectives.
THE COMPANY'S PRODUCTS ARE MANUFACTURED BY
OUTSIDE VENDORS. The Company's manufacturing
operations are conducted by companies not affiliated
with the Company. The Company has no direct control
over the quality of work, suppliers, labor relations,
or financial condition of these companies. In
addition, two manufacturers are each located in
Sweden, and the Company may encounter problems arising
from international currency exchange, laws,
regulations, treaties or internal conditions in Sweden.
THE COMPANY IS DEPENDENT ON ITS SUPPLIERS.
The Company is dependant on a steady supply of
hardware components, aperture card stock and dry
silver film. There are only a limited number of
suppliers of these products, and there can be no
assurance that suppliers will timely meet the
Company's requirements. Furthermore, there can be no
assurance that the Company's suppliers will remain in
the business of manufacturing these products, or
maintain their relationship with the Company.
THE COMPANY'S TECHNOLOGY MAY BECOME OBSOLETE.
The Company is in the business of supplying long-term
storage solutions based on aperture cards. New
technology could be developed and supplant aperture
cards, or a more preferable method of producing
aperture cards could be developed, which could lead to
an erosion in the Company's market for its products.
ADVERSE ECONOMIC CONDITIONS OR A CHANGE IN
GENERAL MARKET PATTERNS. A weak economic environment
could adversely affect the Company sales efforts. Many
factors beyond the Company's control may decrease
overall demand for the Company's products including,
among other things, decrease in the entry costs by
other similarly situated companies, increase in the
overall unemployment rate, additional government
regulation or a downturn in engineering projects by
civilian, governmental or military entities. There can
be no assurance that the general market
demand for long-term storage and related fields will
remain the same or will not decrease in the future.
ISSUANCE OF FUTURE SHARES MAY DILUTE INVESTORS
SHARE VALUE. The Company is authorized to issue
50,000,000 shares of common stock and 10,000,000
shares of preferred stock. The future issuance of all
or part of the remaining authorized common stock may
result in substantial dilution in the percentage of
the Company's common stock held by the its then
existing shareholders. Moreover, any common or
preferred stock issued in the future may be valued on
an arbitrary basis by the Company. The issuance of
the Company's shares for future services or
acquisitions or other corporate actions may have the
effect of diluting the value of the shares held by
investors, and might have an adverse effect on a
trading market for the Company's common stock.
SHARES AVAILABLE FOR FUTURE SALE. The market
price of the Company's common stock could drop if
substantial amounts of shares are sold in the public
market or if the market perceives that such sales
could occur. A drop in the market price could
adversely affect holders of the stock and could also
harm the Company's ability to raise additional capital
by selling equity securities. The Company has
outstanding options and warrants, including
convertible warrants exercisable at a price below that
of the recent market price. The exercise of these
warrants and options at a price less than the market
price could dilute the value of outstanding shares and
depress the market price. The perception that these
instruments may be exercised for or converted into
common stock that could be sold into the public market
could adversely affect the market price of the
Company's common stock. In addition, shares issued by
the Company in private transactions over the past two
years will become eligible for sale into the public
market under SEC Rule 144.
PENNY STOCK REGULATION. Penny stocks
generally are equity securities with a price of less
than $5.00 per share other than securities registered
on certain national securities exchanges or quoted on
the Nasdaq Stock Market, provided that current price
and volume information with respect to transactions in
such securities is provided by the exchange or system.
The Company's securities may be subject to "penny
stock rules" that impose additional sales practice
requirements on broker-dealers who sell such
securities to persons other than established customers
and accredited investors (generally those with assets
in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 together with their spouse). For
transactions covered by these rules, the broker-dealer
must make a special suitability determination for the
purchase of such securities and have received the
purchaser's written consent to the transaction prior
to the purchase. Additionally, for any transaction
involving a penny stock, unless exempt, the "penny
stock rules" require the delivery, prior to the
transaction, of a disclosure schedule prescribed by
the Commission relating to the penny stock market.
The broker-dealer also must disclose the commissions
payable to both the broker-dealer and the registered
representative and current quotations for the
securities. Finally, monthly statements must be sent
disclosing recent price information on the limited
market in penny stocks. Consequently, the "penny
stock rules" may restrict the ability of
broker-dealers to sell the Company's securities. The
foregoing required penny stock restrictions will not
apply to the Company's securities if such securities
maintain a market price of $5.00 or greater. There can
be no assurance that the price of the Company's
securities will reach or maintain such a level.
THIRD-PARTY MARKET PRICE MANIPULATIONS. The
shares of the Company's common stock are traded on the
NASD OTC Bulletin Board. Share price quotations for
the Company's stock may reflect inter-dealer prices,
without retail mark-up, without retail mark-up,
mark-down or commissions, and may not represent actual
transactions. In addition, from time to time, persons
not affiliated with the Company may seek to manipulate
the market price of the Company's common stock in a
manner unknown to the Company, which may cause a
drastic change in the price of the Company's common
stock unrelated to any activity by the Company. Any
rapid change in the Company's stock price should be
viewed with caution.
THE COMPANY HAS NOT BEEN AUDITED BY
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS. Although the
Company is required to file audited financial
statements no later than 60 days from the date that
this Current Report is required to be filed, no such
audited financial statements have been prepared or are
available for inspection as of the date hereof.
Consequently, there can be no assurance that any
representations as to the financial condition or
assets of the Company are as stated herein.
QUINTEK MAY NOT BE ABLE TO PROTECT ITS
PATENTS, TRADE OR SERVICE MARKS. The Company cannot
be certain that it will be able to prevent the
misappropriation of its patents, trade or service
marks. The Company has applied to the United States
Patent Office for reinstatement of four patents which
have expired. There can be no assurance that these
patents will be reinstated, or that failure to hold
these patents will not have a material adverse effect
on the Company's business.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
Successor Issuer Election.
Pursuant to Rule 12g-3(a) of the General Rules
and Regulations of the Securities and Exchange
Commission, the Company elected to become the
successor issuer to Juniper for reporting purposes
under the Securities Exchange Act of 1934 and elects
to report under the Act effective February 24, 2000.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE
OFFICERS
The sole officer and director of Juniper
resigned effective upon completion of the Acquisition.
ITEM 7. FINANCIAL STATEMENTS
No financial statements are filed herewith.
The Registrant is required to file audited financial
statements no later than 60 days after the date that
this Current Report must be filed.
ITEM 8. CHANGE IN FISCAL YEAR
Not applicable.
EXHIBITS
2.1. Agreement and Plan of Reorganization between
Quintek Technologies, Inc. and Juniper
Acquisition Corporation.
*27.1. Financial Data schedule.
_______
*To be filed by amendment
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused
this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
QUINTEK TECHNOLOGIES, INC.
/s/ Thomas W. Sims, President
Date: February 24, 2000
AGREEMENT AND PLAN OF REORGANIZATION among QUINTEK
TECHNOLOGIES, INC., a California corporation ("Quintek"), JUNIPER
ACQUISITION CORPORATION, a Delaware corporation ("Juniper") and the
persons listed in Exhibit A hereof (collectively the
"Shareholders"), being the owners of record of all the issued and
outstanding stock of Juniper.
Whereas, Quintek wishes to acquire and the Shareholders
wish to transfer all of the issued and outstanding securities of
Juniper in a transaction intended to qualify as a reorganization
within the meaning of Section368(a)(1)(B) of the Internal Revenue
Code of 1986, as amended (the "Exchange").
Now, therefore, Quintek, Juniper, and the Shareholders
adopt this plan of reorganization and agree as follows:
1. EXCHANGE OF STOCK
1.1. NUMBER OF SHARES. The Shareholders agree to
transfer to Quintek at the Closing (defined below) the number of
shares of common stock of Juniper, $0.0001 par value per share,
shown opposite their names in Exhibit A, in exchange for an
aggregate of 400,000 shares of voting common stock of Quintek, $.01
par value per share.
1.2. EXCHANGE OF CERTIFICATES. Each holder of an
outstanding certificate or certificates theretofore representing
shares of Juniper common stock shall surrender such certificate(s)
for cancellation to Quintek, and shall receive in exchange a
certificate or certificates representing the number of full shares
of Quintek common stock into which the shares of Juniper common
stock represented by the certificate or certificates so surrendered
shall have been converted. The transfer of Juniper shares by the
Shareholders shall be effected by the delivery to Quintek at the
Closing of certificates representing the transferred shares endorsed
in blank or accompanied by stock powers executed in blank.
1.3. FRACTIONAL SHARES. Fractional shares of
Quintek common stock shall not be issued, but in lieu thereof
Quintek shall round up fractional shares to the next highest whole
number.
1.4. FURTHER ASSURANCES. At the Closing and from
time to time thereafter, the Shareholders shall execute such
additional instruments and take such other action as Quintek may
request in order more effectively to sell, transfer, and assign the
transferred stock to Quintek and to confirm Quintek's title thereto.
2. CLOSING
2.1. DATE AND PLACE. The Closing contemplated
herein shall be held at the offices of the Exchange Agent provided
for herein without requiring the meeting of the parties hereof. All
proceedings to be taken and all documents to be executed at the
Closing shall be deemed to have been taken, delivered and executed
simultaneously, and no proceeding shall be deemed taken nor
documents deemed executed or delivered until all have been taken,
delivered and executed. The date of Closing may be accelerated or
extended by agreement of the parties.
2.2. EXECUTION OF DOCUMENTS. Any copy, facsimile
telecommunication or other reliable reproduction of the writing or
transmission required by this agreement or any signature required
thereon may be used in lieu of an original writing or transmission
or signature for any and all purposes for which the original could
be used, provided that such copy, facsimile telecommunication or
other reproduction shall be a complete reproduction of the entire
original writing or transmission or original signature.
3. UNEXCHANGED CERTIFICATES. Until surrendered, each
outstanding certificate that prior to the Closing represented
Juniper common stock shall be deemed for all purposes, other than
the payment of dividends or other distributions, to evidence
ownership of the number of shares of Quintek common stock into which
it was converted. No dividend or other distribution shall be paid
to the holders of certificates of Juniper common stock until
presented for exchange at which time any outstanding dividends or
other distributions shall be paid.
4. REPRESENTATIONS AND WARRANTIES OF JUNIPER
Juniper represents and warrants as follows:
4.1. CORPORATE ORGANIZATION AND GOOD STANDING. Juniper is a
corporation duly organized, validly existing, and in good standing
under the laws of the State of Delaware, and is qualified to do
business as a foreign corporation in each jurisdiction, if any, in
which its property or business requires such qualification.
4.2. REPORTING COMPANY STATUS. Juniper has filed with the
Securities and Exchange Commission a registration statement on Form
10-SB which became effective pursuant to the Securities Exchange Act
of 1934 and is a reporting company pursuant to Section12(g) thereunder.
4.3. REPORTING COMPANY FILINGS. Juniper has timely filed and
is current on all reports required to be filed by it pursuant to
Section13 of the Securities Exchange Act of 1934.
4.4. CAPITALIZATION. Juniper's authorized capital stock
consists of 100,000,000 shares of common stock, $.0001 par value, of
which 5,000,000 shares are issued and outstanding, and 20,000,000
shares of non-designated preferred stock of which no shares are
designated or issued.
4.5. ISSUED STOCK. All the outstanding shares of its common
stock are duly authorized and validly issued, fully paid and
non-assessable.
4.6. STOCK RIGHTS. Except as may be set out by attached
schedule, there are no stock grants, options, rights, warrants or
other rights to purchase or obtain Juniper Common or Preferred Stock
issued or committed to be issued.
4.7. CORPORATE AUTHORITY. Juniper has all requisite
corporate power and authority to own, operate and lease its
properties, to carry on its business as it is now being conducted
and to execute, deliver, perform and conclude the transactions
contemplated by this agreement and all other agreements and
instruments related to this agreement.
4.8. AUTHORIZATION. Execution of this agreement has been
duly authorized and approved by Juniper's board of directors.
4.9. SUBSIDIARIES. Except as may be set out by attached
schedule, Juniper has no subsidiaries.
4.10. FINANCIAL STATEMENTS. Juniper's financial statements
dated October 31, 1999, copies of which will have been delivered by
Juniper to Quintek prior to the Closing (the "Juniper Financial
Statements"), fairly present the financial condition of Juniper as
of the date therein and the results of its operations for the
periods then ended in conformity with generally accepted accounting
principles consistently applied.
4.11. ABSENCE OF UNDISCLOSED LIABILITIES. Except to the
extent reflected or reserved against in the Juniper Financial
Statements, Juniper did not have at that date any liabilities or
obligations (secured, unsecured, contingent, or otherwise) of a
nature customarily reflected in a corporate balance sheet prepared
in accordance with generally accepted accounting principles.
4.12. NO MATERIAL CHANGES. Except as may be set out by
attached schedule, there has been no material adverse change in the
business, properties, or financial condition of Juniper since the
date of the Juniper Financial Statements.
4.13. LITIGATION. Except as may be set out by attached
schedule, there is not, to the knowledge of Juniper, any pending,
threatened, or existing litigation, bankruptcy, criminal, civil, or
regulatory proceeding or investigation, threatened or contemplated
against Juniper or against any of its officers.
4.14. CONTRACTS. Except as may be set out by attached
schedule, Juniper is not a party to any material contract not in the
ordinary course of business that is to be performed in whole or in
part at or after the date of this agreement.
4.15. TITLE. Except as may be set out by attached schedule,
Juniper has good and marketable title to all the real property and
good and valid title to all other property included in the Juniper
Financial Statements. Except as set out in the balance sheet
thereof, the properties of Juniper are not subject to any mortgage,
encumbrance, or lien of any kind except minor encumbrances that do
not materially interfere with the use of the property in the conduct
of the business of Juniper.
4.16. TAX RETURNS. Except as may be set out by attached
schedule, all required tax returns for federal, state, county,
municipal, local, foreign and other taxes and assessments have been
properly prepared and filed by Juniper for all years for which such
returns are due unless an extension for filing any such return has
been filed. Any and all federal, state, county, municipal, local,
foreign and other taxes and assessments, including any and all
interest, penalties and additions imposed with respect to such
amounts have been paid or provided for. The provisions for federal
and state taxes reflected in the Juniper Financial Statements are
adequate to cover any such taxes that may be assessed against
Juniper in respect of its business and its operations during the
periods covered by the Juniper Financial Statements and all prior
periods.
4.17. NO VIOLATION. Consummation of the Exchange will not
constitute or result in a breach or default under any provision of
any charter, bylaw, indenture, mortgage, lease, or agreement, or any
order, judgment, decree, law, or regulation to which any property of
Juniper is subject or by which Juniper is bound.
5. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
The Shareholders, individually and separately, represent and
warrant as follows:
5.1. TITLE TO SHARES. The Shareholders, and each of them, are
the owners, free and clear of any liens and encumbrances, of the
number of Juniper shares which are listed in the attached Exhibit A
and which they have contracted to exchange.
5.2. LITIGATION. There is no litigation or proceeding
pending, or to each Shareholder's knowledge threatened, against or
relating to shares of Juniper held by the Shareholders.
6. REPRESENTATIONS AND WARRANTIES OF QUINTEK
Quintek represents and warrants as follows:
6.1. CORPORATE ORGANIZATION AND GOOD STANDING. Quintek is a
corporation duly organized, validly existing, and in good standing
under the laws of the State of California and is qualified to do
business as a foreign corporation in each jurisdiction, if any, in
which its property or business requires such qualification.
6.2. CAPITALIZATION. Quintek's authorized capital stock
consists of 50,000,000 shares of common stock, $.01 par value, of
which 16,891,066 shares are issued and outstanding, and 10,000,000
shares of preferred stock, $.01 par value, of which no shares are
issued and outstanding.
6.3. ISSUED STOCK. All the outstanding shares of its common
stock are duly authorized and validly issued, fully paid and
non-assessable.
6.4. STOCK RIGHTS. Except as may be set out by attached
schedule, there are no stock grants, options, rights, warrants or
other rights to purchase or obtain Quintek Common or Preferred Stock
issued or committed to be issued.
6.5. CORPORATE AUTHORITY. Quintek has all requisite
corporate power and authority to own, operate and lease its
properties, to carry on its business as it is now being conducted
and to execute, deliver, perform and conclude the transactions
contemplated by this agreement and all other agreements and
instruments related to this agreement.
6.6. AUTHORIZATION. Execution of this agreement has been
duly authorized and approved by Quintek's board of directors.
6.7. SUBSIDIARIES. Except as may be set out by attached
schedule, Quintek has no subsidiaries.
6.8. FINANCIAL STATEMENTS. Quintek's financial statements
dated as of September 30, 1999, copies of which will have been
delivered by Quintek to Juniper prior to the Exchange Date (the
"Quintek Financial Statements"), fairly present the financial
condition of Quintek as of the date therein and the results of its
operations for the periods then ended in conformity with generally
accepted accounting principles consistently applied.
6.9. ABSENCE OF UNDISCLOSED LIABILITIES. Except to the
extent reflected or reserved against in the Quintek Financial
Statements, Quintek did not have at that date any liabilities or
obligations (secured, unsecured, contingent, or otherwise) of a
nature customarily reflected in a corporate balance sheet prepared
in accordance with generally accepted accounting principles.
6.10. NO MATERIAL CHANGES. Except as may be set out by
attached schedule, there has been no material adverse change in the
business, properties, or financial condition of Quintek since the
date of the Quintek Financial Statements.
6.11. LITIGATION. Except as may be set out by attached
schedule, there is not, to the knowledge of Quintek, any pending,
threatened, or existing litigation, bankruptcy, criminal, civil, or
regulatory proceeding or investigation, threatened or contemplated
against Quintek or against any of its officers.
6.12. CONTRACTS. Except as may be set out by attached
schedule, Quintek is not a party to any material contract not in the
ordinary course of business that is to be performed in whole or in
part at or after the date of this agreement.
6.13. TITLE. Except as may be set out by attached schedule,
Quintek has good and marketable title to all the real property and
good and valid title to all other property included in the Quintek
Financial Statements. Except as set out in the balance sheet
thereof, the properties of Quintek are not subject to any mortgage,
encumbrance, or lien of any kind except minor encumbrances that do
not materially interfere with the use of the property in the conduct
of the business of Quintek.
6.14. TAX RETURNS. Except as may be set out by attached
schedule, all required tax returns for federal, state, county,
municipal, local, foreign and other taxes and assessments have been
properly prepared and filed by Quintek for all years for which such
returns are due unless an extension for filing any such return has
been filed. Any and all federal, state, county, municipal, local,
foreign and other taxes and assessments, including any and all
interest, penalties and additions imposed with respect to such
amounts have been paid or provided for. The provisions for federal
and state taxes reflected in the Quintek Financial Statements are
adequate to cover any such taxes that may be assessed against
Quintek in respect of its business and its operations during the
periods covered by the Quintek Financial Statements and all prior
periods.
6.15. NO VIOLATION. Consummation of the Exchange will not
constitute or result in a breach or default under any provision of
any charter, bylaw, indenture, mortgage, lease, or agreement, or any
order, judgment, decree, law, or regulation to which any property of
Quintek is subject or by which Quintek is bound.
7. CONDUCT OF JUNIPER PENDING THE CLOSING. Juniper
covenants that between the date of this agreement and the Closing:
7.1. No change will be made in Juniper's certificate of
incorporation or bylaws.
7.2. Juniper will not make any change in its authorized or
issued capital stock, declare or pay any dividend or other
distribution or issue, encumber, purchase, or otherwise acquire any
of its capital stock other than as provided herein.
7.3. Juniper will use its best efforts to maintain and
preserve its business organization, employee relationships, and
goodwill intact, and will not enter into any material commitment
except in the ordinary course of business.
8. CONDUCT PENDING THE CLOSING
Quintek, Juniper and the Shareholders covenant that between
the date of this agreement and the Closing as to each of them:
8.1. No change will be made in the charter documents,
by-laws, or other corporate documents of Quintek or Juniper.
8.2. Juniper and Quintek will use their best efforts to
maintain and preserve their business organization, employee
relationships, and goodwill intact, and will not enter into any
material commitment except in the ordinary course of business.
8.3. None of the Shareholders will sell, transfer, assign,
hypothecate, lien, or otherwise dispose or encumber the Juniper
shares of common stock owned by them.
9. CONDITIONS PRECEDENT TO OBLIGATION OF JUNIPER AND THE
SHAREHOLDERS
Juniper's and the Shareholders' obligation to consummate the
Exchange shall be subject to fulfillment on or before the Closing of
each of the following conditions, unless waived in writing or by
acceptance of Quintek's shares by the Shareholders:
9.1. QUINTEK'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Quintek set forth herein shall be
true and correct at the Closing as though made at and as of that
date, except as affected by transactions contemplated hereby.
9.2. QUINTEK'S COVENANTS. Quintek shall have performed all
covenants required by this agreement to be performed by it on or
before the Closing.
9.3. BOARD OF DIRECTOR APPROVAL. This Agreement shall have
been approved by the Board of Directors of Quintek.
9.4. SUPPORTING DOCUMENTS OF QUINTEK. Quintek shall have
delivered to Juniper and the Shareholders supporting documents in
form and substance reasonably satisfactory to Juniper and the
Shareholders, to the effect that:
(a) Quintek is a corporation duly organized, validly
existing, and in good standing;
(b) Quintek's authorized capital stock is as set forth herein;
(c) Certified copies of the resolutions of the board of
directors of Quintek authorizing the execution of this agreement and
the consummation hereof;
(d) Secretary's certificate of incumbency of the officers and
directors of Quintek;
(e) Quintek's Financial Statements and unaudited financial
statement from the date of Quintek's Financial Statements to close
of most recent fiscal quarter; and
(f) Any document as may be specified herein or required to
satisfy the conditions, representations and warranties enumerated
elsewhere herein.
10. CONDITIONS PRECEDENT TO OBLIGATION OF QUINTEK
Quintek's obligation to consummate the Exchange shall be
subject to fulfillment on or before the Closing of each of the
following conditions, unless waived in writing or by acceptance of
Juniper's shares by Quintek:
10.1. JUNIPER'S AND THE SHAREHOLDERS' REPRESENTATIONS AND
WARRANTIES. The representations and warranties of Juniper and the
Shareholders set forth herein shall be true and correct at the
Closing as though made at and as of that date, except as affected by
transactions contemplated hereby.
10.2. JUNIPER'S AND THE SHAREHOLDERS' COVENANTS. Juniper and
the Shareholders shall have performed all covenants required by this
agreement to be performed by them on or before the Closing.
10.3. BOARD OF DIRECTOR APPROVAL. This Agreement shall
have been approved by the Board of Directors of Juniper.
10.4. SHAREHOLDER EXECUTION. This Agreement shall have been
executed by the required number of shareholders of Juniper.
10.5. SUPPORTING DOCUMENTS OF JUNIPER. Juniper shall have
delivered to Quintek supporting documents in form and substance
reasonably satisfactory to Quintek to the effect that:
(a) Juniper is a corporation duly organized, validly
existing, and in good standing;
(b) Juniper's capital stock is as set forth herein;
(c) Certified copies of the resolutions of the board of
directors of Juniper authorizing the execution of this agreement and
the consummation hereof;
(d) Secretary's certificate of incumbency of the officers and
directors of Juniper;
(e) Juniper's Financial Statements and unaudited financial
statements for the period from the date of the Juniper's Financial
Statements to the close of the most recent fiscal quarter; and
(f) Any document as may be specified herein or required to
satisfy the conditions, representations and warranties enumerated
elsewhere herein.
11. SHAREHOLDERS' REPRESENTATIVE. The Shareholders hereby
irrevocably designate and appoint Cassidy & Associates, Washington,
D.C. as their agent and attorney in fact ("Shareholders'
Representative") with full power and authority until the Closing to
execute, deliver, and receive on their behalf all notices, requests,
and other communications hereunder; to fix and alter on their behalf
the date, time, and place of the Closing; to waive, amend, or modify
any provisions of this agreement, and to take such other action on
their behalf in connection with this agreement, the Closing, and the
transactions contemplated hereby as such agent or agents deem
appropriate; provided, however, that no such waiver, amendment, or
modification may be made if it would decrease the number of shares
to be issued to the Shareholders hereunder or increase the extent of
their obligation to indemnify Quintek hereunder.
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties
of Juniper, the Shareholders and Quintek set out herein shall
survive the Closing.
13. ARBITRATION
13.1. SCOPE. The parties hereby agree that any and all claims
(except only for requests for injunctive or other equitable relief)
whether existing now, in the past or in the future as to which the
parties or any affiliates may be adverse parties, and whether
arising out of this agreement or from any other cause, will be
resolved by arbitration before the American Arbitration Association
within the District of Columbia.
13.2. CONSENT TO JURISDICTION, SITUS AND JUDGEMENT. The
parties hereby irrevocably consent to the jurisdiction of the
American Arbitration Association and the situs of the arbitration
(and any requests for injunctive or other equitable relief) within
the District of Columbia. Any award in arbitration may be entered
in any domestic or foreign court having jurisdiction over the
enforcement of such awards.
13.3. APPLICABLE LAW. The law applicable to the arbitration
and this agreement shall be that of the State of Delaware,
determined without regard to its provisions which would otherwise
apply to a question of conflict of laws.
13.4. DISCLOSURE AND DISCOVERY. The arbitrator may, in its
discretion, allow the parties to make reasonable disclosure and
discovery in regard to any matters which are the subject of the
arbitration and to compel compliance with such disclosure and
discovery order. The arbitrator may order the parties to comply
with all or any of the disclosure and discovery provisions of the
Federal Rules of Civil Procedure, as they then exist, as may be
modified by the arbitrator consistent with the desire to simplify
the conduct and minimize the expense of the arbitration.
13.5. RULES OF LAW. Regardless of any practices of
arbitration to the contrary, the arbitrator will apply the rules of
contract and other law of the jurisdiction whose law applies to the
arbitration so that the decision of the arbitrator will be, as much
as possible, the same as if the dispute had been determined by a
court of competent jurisdiction.
13.6. FINALITY AND FEES. Any award or decision by the
American Arbitration Association shall be final, binding and
non-appealable except as to errors of law or the failure of the
arbitrator to adhere to the arbitration provisions contained in this
agreement. Each party to the arbitration shall pay its own costs
and counsel fees except as specifically provided otherwise in this
agreement.
13.7. MEASURE OF DAMAGES. In any adverse action, the parties
shall restrict themselves to claims for compensatory damages and\or
securities issued or to be issued and no claims shall be made by any
party or affiliate for lost profits, punitive or multiple damages.
13.8. COVENANT NOT TO SUE. The parties covenant that under no
conditions will any party or any affiliate file any action against
the other (except only requests for injunctive or other equitable
relief) in any forum other than before the American Arbitration
Association, and the parties agree that any such action, if filed,
shall be dismissed upon application and shall be referred for
arbitration hereunder with costs and attorney's fees to the
prevailing party.
13.9. INTENTION. It is the intention of the parties and their
affiliates that all disputes of any nature between them, whenever
arising, whether in regard to this agreement or any other matter,
from whatever cause, based on whatever law, rule or regulation,
whether statutory or common law, and however characterized, be
decided by arbitration as provided herein and that no party or
affiliate be required to litigate in any other forum any disputes or
other matters except for requests for injunctive or equitable
relief. This agreement shall be interpreted in conformance with
this stated intent of the parties and their affiliates.
13.10. SURVIVAL. The provisions for arbitration
contained herein shall survive the termination of this agreement for
any reason.
14. GENERAL PROVISIONS.
14.1. FURTHER ASSURANCES. From time to time, each party will
execute such additional instruments and take such actions as may be
reasonably required to carry out the intent and purposes of this
agreement.
14.2. WAIVER. Any failure on the part of either party hereto
to comply with any of its obligations, agreements, or conditions
hereunder may be waived in writing by the party to whom such
compliance is owed.
14.3. BROKERS. Each party agrees to indemnify and hold
harmless the other party against any fee, loss, or expense arising
out of claims by brokers or finders employed or alleged to have been
employed by the indemnifying party.
14.4. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given if
delivered in person or sent by prepaid first-class certified mail,
return receipt requested, or recognized commercial courier service,
as follows:
If to Quintek, to:
Quintek Technologies, Inc.
537 Constitution Avenue
Suite B
Camarillo, California 93012
If to Juniper, to:
Juniper Acquisition Corporation
1504 R Street, N.W.
Washington, D.C. 20009
If to the Shareholders, to:
Cassidy & Associates
1504 R Street N.W.
Washington, D.C. 20009
14.5. GOVERNING LAW. This agreement shall be governed by and
construed and enforced in accordance with the laws of the State of
Delaware.
14.6. ASSIGNMENT. This agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their successors and
assigns; provided, however, that any assignment by either party of
its rights under this agreement without the written consent of the
other party shall be void.
14.7. COUNTERPARTS. This agreement may be executed
simultaneously in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one
and the same instrument. Signatures sent by facsimile transmission
shall be deemed to be evidence of the original execution thereof.
14.8. EXCHANGE AGENT AND CLOSING DATE. The Exchange Agent
shall be Cassidy & Associates, Washington, D.C. The Closing shall
take place upon the fulfillment by each party of all the conditions
of the Closing required herein, but not later than 15 days following
execution of this agreement unless extended by mutual consent of the
parties.
14.9. REVIEW OF AGREEMENT. Each party acknowledges that it
has had time to review this agreement and, as desired, consult with
counsel. In the interpretation of this agreement, no adverse
presumption shall be made against any party on the basis that it has
prepared, or participated in the preparation of, this agreement.
14.10. SCHEDULES. All schedules attached hereto, if any,
shall be acknowledged by each party by signature or initials thereon.
14.11. EFFECTIVE DATE. This effective date of this
agreement shall be February 23, 2000.
SIGNATURE PAGE TO AGREEMENT AND PLAN OF REORGANIZATION
AMONG QUINTEK, JUNIPER AND THE SHAREHOLDERS OF JUNIPER
IN WITNESS WHEREOF, the parties have executed this agreement.
QUINTEK TECHNOLOGIES, INC.
By___________________________________
JUNIPER ACQUISITION CORPORATION
By___________________________________
SHAREHOLDERS:
TPG CAPITAL CORPORATION
By___________________________________
