SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report July 23, 1998
(Date of earliest event reported) (July 14, 1998)
RCM TECHNOLOGIES, INC.
(exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation)
1-10245 95-1480559
(Commission File Number) (IRS Employer
Identification Number)
2500 McClellan Avenue, Pennsauken, NJ 08109-4613
(Address of principal executive offices) (Zip Code)
(609) 486 - 1777
(Registrant's telephone number, including area code)
<PAGE>
ITEM 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired
Audited Balance Sheet - March 31, 1988
Audited Statement of Income - Year Ended March 31, 1998
Audited Statement of Changes in Stockholders' Equity
Year ended March 31, 1998
Audited Statement of Cash Flows - Year ended March 31, 1998
Notes to Financial Statements
(b) Pro forma financial information
Unaudited Pro Forma Condensed Combined Balance Sheets
April 30, 1998 and April 03, 1998
Unaudited Pro Forma Condensed Combined Statements of Income
Year Ended October 31, 1997
Twelve Months Ended December 31, 1997
Unaudited Pro Forma Condensed Combined Statements of Income
Six Months Ended April 30, 1998
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RCM Technologies, Inc.
By: /S/ Stanton Remer
Stanton Remer
Chief Financial Officer
(Principal Accounting Officer),
Treasurer and Director
Date: September 16, 1998
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined financial
statements give effect to the acquisition of Software Analysis & Management,
Inc. ("Samco") by RCM Technologies, Inc. ("RCM") pursuant to a purchase
transaction that was completed on July 14, 1998. This pro forma information has
been prepared utilizing the historical financial statements of RCM and Samco.
This information should be read in conjunction with the historical financial
statements and notes thereto of RCM which are incorporated by reference to RCM's
Form 10-K and the historical financial statements of Samco which are
incorporated within this Form 8-K. The pro forma financial data are provided for
comparative purposes only and do not purport to be indicative of the results
which actually would have been obtained if the acquisition had been effected on
the dates indicated, or of the results which may be obtained in the future.
The pro forma financial information is based on the purchase method of
accounting for the acquisition. The pro forma adjustments are described in the
accompanying Notes to Unaudited Pro Forma Condensed Combined Balance Sheet and
Notes to Unaudited Pro Forma Condensed Combined Statements of Income. The
Unaudited Pro Forma condensed combined statement of income for the year ended
October 31, 1997 assumes that the acquisition of Samco had occurred on November
1, 1996 (combining the results for the year ended October 31, 1997 for RCM, and
the twelve months ended December 31, 1997 for Samco). The Unaudited Pro Forma
Condensed Combined Statements of Income for the six months ended April 30, 1998
assumes that the acquisition of Samco had occurred on November 1, 1997
(combining the results for the six months ended April 30, 1998 for RCM and
Samco). The unaudited Pro Forma Condensed Combined Balance Sheet at October 31,
1997 assumes that the acquisition of Samco had occurred on October 31, 1997.
Acquisition
The consideration paid to the former shareholders of Samco consisted of $7.5
million in cash and $4.5 million of contingent consideration payable over three
years upon Samco achieving certain base levels of operating income for each of
the three twelve month periods following the purchase. An additional earn-out
payment shall be made to such former shareholders at the end of each of the
three twelve month periods commencing August 1, 1998 to the extent that
operating income exceeds these base levels.
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS- Continued
Assumptions
Purchase Price Allocation
Although neither RCM nor Samco has complete information at this time as to
the fair value of Samco's individual assets and liabilities, an estimate of the
eventual allocation of the purchase price was made on the basis of available
information. The final allocation of the purchase price will be made on the
basis of appraisals and valuations which give effect to various factors
including the nature and intended future use of assets. It is not anticipated
that any change in the allocation price will be material from the pro forma
adjustments.
For the purpose of pro forma presentations, the excess purchase price over
the fair value of the net assets acquired is being amortized over an estimated
life of forty (40) years.
<PAGE>
RCM Technologies, Inc.
Unaudited Proforma Condensed Combined Balance Sheet
<TABLE>
<CAPTION>
Historical
Historical 04/03/98
04/30/98 Software Analysis Adj. & Proforma
RCMT & Management, Inc. Elim. Combined
---- ------------------ ----- --------
Assets:
<S> <C> <C> <C> <C>
Cash and cash equivalents $424,042 $135,669 A (7,500,000) $33,947,711
D (75,000)
B 50,456,000
C (8,233,000)
F (1,260,000)
Accounts and notes receivable 31,177,039 2,642,877 33,819,916
Prepaid expenses & other current assets 1,017,420 138,957 1,156,377
--------- ------- ---------
Total current assets 32,618,501 2,917,503 68,924,004
Property and equipment-net 1,801,253 327,690 2,128,943
Intangible assets 37,208,703 A 7,500,000 44,783,703
D 75,000
Other Assets 107,650 32,990 140,640
------- ------ -------
Total $71,736,107 $3,278,183 $40,963,000 $115,977,290
=========== ========== =========== ============
Liabilities and Shareholders' Equity:
Current Liabilities
Bank- line of credit $10,062,903 $1,260,000 C ($8,233,000) $1,829,903
G ($1,260,000)
Other current liabilities 10,694,834 1,458,429 E 3,200 12,156,463
---------- --------- ----- ----------
Total current liabilities 20,757,737 2,718,429 13,986,366
---------- --------- ----------
Long Term Liabilities
Income taxes payable 85,305 281,159
Other long term liabilities 195,854
Shareholders' equity 50,893,065 363,900 B 50,456,000 101,709,765
---------- ------- -----------
E (3,200)
Total $71,736,107 $3,278,183 $40,963,000 $115,977,290
=========== ========== =========== ============
NOTES TO UNAUDITED PROFORMA CONDENSED COMBINED BALANCE SHEET
(A) to record initial cash consideration $7,500,000
==========
(B) to record proceeds of June 3, 1998 Public Offering $50,456,000
===========
(C) to reflect reduction of Bank Debt from Public Offering $8,233,000
==========
(D) to reflect estimated acquisition costs $75,000
(E) to accrue for payment of Net Working Capital, as defined $3,200
======
(F) to reflect payment of note payable prior to acquisition $1,260,000
==========
</TABLE>
<PAGE>
RCM TECHNOLOGIES, INC. AND SOFTWARE ANALYSIS & MANAGEMENT, INC. ("SAMCO")
UNAUDITED PROFORMA CONDENSED COMBINED STATEMENT OF INCOME
YEAR ENDED OCTOBER 31, 1997
<TABLE>
<CAPTION>
Historical Pro Forma
---------- ---------
RCM
Technologies, Inc. "SAMCO"
10/31/97 12/31/97
-------- --------
Adjustments Combined
<S> <C> <C> <C>
Revenues $113,959,093 18,854,937 132,814,030
------------ ---------- -----------
Cost and expenses
Cost of services 86,832,348 13,746,983 100,579,331
Selling, general and administrative 18,068,899 4,929,290 (150,000) A 21,040,189
(1,808,000) B
Interest expense (income) 184,645 124,609 (25,000) B 284,254
Depreciation and amortization 572,279 60,882 195,000 C 828,161
------- ------ ------- -------
Total 105,658,171 18,861,764 (1,788,000) 122,731,935
----------- ---------- -----------
Income before income taxes 8,300,922 (6,827) 1,788,000 10,082,095
Income taxes 3,460,989 3,957 750,960 D 4,215,906
--------- ----- ------- ---------
Income from continuing operations 4,839,933 (10,784) 1,037,040 5,866,189
Loss from discontinued operations (362,500) (362,500)
--------- ---------
Net Income 4,477,433 (10,784) 1,037,040 5,503,689
========= ======== ========= =========
Net income per common share $0.70 $0.87
===== =====
Average number of common
shares outstanding 6,361,571 6,361,571
========= =========
NOTES TO UNAUDITED PROFORMA CONDENSED COMBINED STATEMENT OF INCOME
(A) to reflect reduction of expenses attributable to
consolidation of administrative overhead 150,000
(B) to eliminate excess salaries to principals 1,808,000
=========
(C) to eliminate excess interest expense 25,000
======
(B) to provide for amortization on excess purchase price over net assets
acquired based an estimated life of 40 years 195,000
=======
(D) to tax effect adjustments (750,960)
========
</TABLE>
<PAGE>
RCM TECHNOLOGIES, INC. AND SOFTWARE ANALYSIS & MANAGEMENT, INC. ("SAMCO")
UNAUDITED PROFORMA CONDENSED COMBINED STATEMENT OF INCOME
SIX MONTHS ENDED APRIL 30, 1998
<TABLE>
<CAPTION>
Historical Pro Forma
-------------------------------------------------------------------------------
RCM
Technologies, Inc. "SAMCO"
Adjustments Combined
<S> <C> <C> <C>
Revenues $86,174,418 9,270,433 95,444,851
----------- --------- ----------
Cost and expenses
Cost of services 65,414,594 6,843,682 72,258,276
Selling, general and administrative 13,140,370 2,211,631 (150,000) A 14,298,001
(904,000) B
Interest expense (income) 190,624 49,495 (15,000) B 225,119
Depreciation and amortization 593,006 5,414 97,500 C 695,920
------- ----- ------ -------
Total 79,338,594 9,110,222 (971,500) 87,477,316
---------- --------- ----------
Income before income taxes 6,835,824 160,211 971,500 7,967,535
Income taxes 2,839,672 65,679 408,030 D 3,313,381
--------- ------ ------- ---------
Net Income 3,996,152 94,532 563,470 4,654,154
========= ====== ======= =========
Net income per common share $0.48 $0.56
===== =====
Average number of common
shares outstanding 8,288,012 8,288,012
========= =========
NOTES TO UNAUDITED PROFORMA CONDENSED COMBINED STATEMENT OF INCOME
(A) to reflect reduction of expenses attributable to
consolidation of administrative overhead 150,000
(B) to eliminate excess salaries to principals 904,000
=======
(C) to eliminate excess interest expense 15,000
======
(B) to provide for amortization on excess purchase price over net assets
acquired based an estimated life of 40 years 97,500
======
(D) to tax effect adjustments (408,030)
========
</TABLE>
SOFTWARE ANALYSIS & MANAGEMENT, INC.
April 3, 1998
<PAGE>
<TABLE>
<CAPTION>
CONTENTS
<S> <C>
Independent Auditor's Report 1
Balance Sheet 2
Statement of Income and Retained Earnings 3
Statement of Cash Flows 4
Notes to the Financial Statements 5 - 10
Independent Auditor's Report on
Additional Information 11
Schedule of Overhead 12
General and Administrative Expenses 13
</TABLE>
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To Software Analysis & Management, Inc., the Board of Directors,
and Stockholders:
We have audited the balance sheet of Software Analysis & Management, Inc. as of
April 3, 1998 and the related statements of income and retained earnings and
cash flows for the year then ended. 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 audit.
We conducted our audit 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 audit provides a reasonable basis for our opinion.
In our opinion, the April 3, 1998 financial statements referred to above
presents fairly, in all material respects, the financial position of Software
Analysis & Management, Inc. as of April 3, 1998, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
September 9, 1998
Placentia, California /s/McCullough, Ray & Bryan
1
<PAGE>
SOFTWARE ANALYSIS & MANAGEMENT, INC.
BALANCE SHEET
APRIL 3, 1998
<TABLE>
<CAPTION>
ASSETS
CURRENT ASSETS
<S> <C>
Cash $ 34,669
Certificate of deposit 101,000
Accounts receivable (net of
allowance for doubtful accounts of $33,600) 2,642,877
Employee advances 93,101
Prepaid expenses 45,856
2,917,503
PROPERTIES, at cost 452,242
Less: Accumulated depreciation ( 124,552)
- -------
327,690
OTHER ASSETS
Deposits 32,990
TOTAL ASSETS $ 3,278,183
= =========
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank overdraft $ 83,387
Lines of credit 1,260,000
Notes payable - current portion 76,748
Notes payable - affiliate 157,500
Leases payable - current portion 61,133
Accounts payable 576,663
Accrued expenses 332,644
Income taxes payable 20,746
Deferred income taxes 116,391
-------
2,685,212
LONG-TERM LIABILITIES
Notes payable 183,333
Leases payable 12,521
195,854
TOTAL LIABILITIES 2,881,066
STOCKHOLDERS' EQUITY
Common stock, 100,000 shares 43,539
authorized; 51,000 issued and
outstanding
Retained earnings 353,578
397,117
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 3,278,183
= =========
</TABLE>
See accompanying notes.
2
<PAGE>
SOFTWARE ANALYSIS & MANAGEMENT, INC.
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED APRIL 3, 1998
<TABLE>
<CAPTION>
<S> <C> <C>
SALES $ 19,968,977 100.0%
- ---------- -----
COST OF SALES
Labor costs 13,915,761 69.7
Overhead 2,692,626 13.5
--------- ----
16,608,387 83.2
---------- ----
GROSS PROFITS 3,360,590 16.8
GENERAL & ADMINISTRATIVE EXPENSES 3,223,555 16.1
--------- ----
OPERATING INCOME 137,035 0.7
OTHER INCOME/(EXPENSE)
Miscellaneous income 10,000 0.1
Interest expense ( 127,748 ) ( 0.6)
----------------- - ---
( 117,748 ) ( 0.6)
----------------- - ---
NET INCOME BEFORE
INCOME TAXES 19,287 0.1
------ ---
INCOME TAXES
Current 20,746 0.1
Deferred ( 6,343 ) 1.1
- ----- ---
14,403 0.1
------ ---
NET INCOME 4,884 0.0%
----- ===
RETAINED EARNINGS, BEGINNING 348,694
RETAINED EARNINGS, ENDING $ 353,578
= =======
</TABLE>
See accompanying notes.
3
<PAGE>
SOFTWARE ANALYSIS & MANAGEMENT, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED APRIL 3, 1998
<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C>
NET INCOME $ 4,884
- -----
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 60,247
Change in current assets & liabilities:
(Increase) decrease:
Accounts receivable ( 953,059)
Employee advances ( 26,466)
Prepaid expenses ( 22,387)
Deposits ( 7,195)
Increase (decrease):
Accounts receivable 421,263
Accrued expenses ( 151,017)
Income taxes payable 18,946
Deferred taxes payable ( 6,343)
- -----
Total adjustments ( 666,011)
- -------
NET CASH USED BY OPERATING ACTIVITIES ( 661,127)
- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash payments for purchase of property ( 158,121)
- -------
NET CASH USED BY INVESTING ACTIVITIES ( 158,121)
- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 731,606
Proceeds from line of credit 6,576,500
Principal payments on line of credit ( 6,086,500)
Principal payments on long-term debt ( 380,762)
- -------
NET CASH PROVIDED BY FINANCING ACTIVITIES 840,844
-------
NET INCREASE IN CASH 21,596
CASH, BEGINNING 114,073
CASH, ENDING $ 135,669
= =======
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest expense $ 127,552
= =======
Income taxes $ 1,432
= =====
</TABLE>
See accompanying notes.
4
<PAGE>
SOFTWARE ANALYSIS & MANAGEMENT, INC.
NOTES TO THE FINANCIAL STATEMENTS
APRIL 3, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS ACTIVITIES
Software Analysis & Management, Inc., was established in 1985 under the laws of
the State of California. Their primary business purpose is to provide consulting
services to and perform subcontracting work for many different companies and
government organizations. The Company's major customers are in the aerospace and
aviation industries. They have five locations throughout the United States.
ACCOUNTS RECEIVABLE
The Company extends credit to its customers in the normal course of business and
performs ongoing evaluations of its customers, maintaining allowances for
potential credit losses which, when realized, have been within management's
expectations. At the balance sheet date 85% of total receivables are within five
major customers.
FISCAL YEAR
The Company operates on a 52-53 week fiscal year, which ends on the Friday
closest to March 31. The fiscal year ended April 3, 1998 consisted of
fifty-three weeks.
PROPERTIES
Properties and equipment are carried at cost. Depreciation is reported using the
modified accelerated cost recovery system guidelines for assets acquired after
December 31, 1986 for financial reporting, Federal, and State income tax
purposes. The assets have estimated useful lives that range from five to seven
years.
5
<PAGE>
SOFTWARE ANALYSIS & MANAGEMENT, INC.
NOTES TO THE FINANCIAL STATEMENTS
APRIL 3, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (con't)
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.
INCOME TAXES
For tax purposes, the Company was forced to change from the cash method to the
accrual method of accounting. Over the four years ending in 1997, 1998, 1999,
2000, the Company will recognize the deferred income generated by using the cash
method. The annual amount will be $146,097. Due to this timing difference,
deferred income taxes have been reported in these financial statements. This
amount represents the estimated income tax effects of the timing differences in
reporting income and expenses for income tax purposes and financial statement
purposes.
NOTE 2 - PROPERTIES
Properties consist of:
Computer equipment $161,176
Automobiles 233,082
Furniture & fixtures 57,984
452,242
Less: accum deprec. (124,552)
$327,690
Depreciation expense for years ended April 3, 1998 was $60,247.
6
<PAGE>
SOFTWARE ANALYSIS & MANAGEMENT, INC.
NOTES TO THE FINANCIAL STATEMENTS
APRIL 3, 1998
NOTE 3 - LINES OF CREDIT
There are two line of credit agreements with Sanwa Bank. The terms for both
agreements are as follows:
A secured line of credit in the amount of $250,000, maturing on July 31, 1998,
with interest due monthly at a rate of 2.0% over the standard certificate
deposit rate. It is renewable, based on an annual review, and is secured by all
the Company's assets and each of the three stockholders have given a personal
guarantee for $50,000 and pledged certificate of deposit of $100,000. The amount
due at the balance sheet date is $250,000.
An unsecured line of credit in the amount of $1,750,000 is also available for
working capital, maturing on October 31, 1998, with interest due monthly at the
Sanwa Reference Rate plus .75%. There are some restrictive covenants pertaining
to this line that include maintaining a current ratio of 1.10 : 1.00, a net
worth balance of $500,000, and a maximum debt to effective tangible net worth
ratio of not more than 3.00 : 1.00. The amount due at the balance sheet date is
$1,010,000. The company is in violation of the restrictive covenants for this
line of credit.
NOTE 4 - NOTES PAYABLE
<TABLE>
<CAPTION>
Notes payable consists of the following:
Note payable - secured by automobile, at 3.9%, payable
in monthly installments of $732, including interest,
maturing March, 1999. The entire balance is considered
<S> <C>
current. $ 8,572
Note payable - secured by automobile, at 3.9%, payable
in monthly installments of $732, including interest,
maturing March, 1999. The entire balance is considered
current. 8,572
Note payable - secured by automobile, at 7.9%, payable
in monthly installments of $778, including interest,
maturing April, 1999. The entire balance is considered
current. 9,604
Note payable - affiliate - payable to LIL Enterprises, a related party, with
interest accruing at a rate of 10% per annum. The entire balance is due upon
demand and therefore considered current. 157,500
7
<PAGE>
SOFTWARE ANALYSIS & MANAGEMENT, INC.
NOTES TO THE FINANCIAL STATEMENTS
APRIL 3, 1998
NOTE 4 - NOTES PAYABLE (con't)
Note payable - guaranteed by all stockholders, payable in monthly payments of
$4,167, with an interest rate of 2% over the prime interest rate. This note is
payable to the California Economic Development Lending Initiative (CEDLI) for a
term of five years maturing November 1, 1998. This note is subordinate to all
debt owed to Sanwa Bank. The restrictive covenants include a minimum debt
service coverage ratio of 1.10, minimum tangible net worth of $500,000. The
entire balance is considered current. The company has violated the minimum debt
service coverage
ratio. 233,333
-------
$417,581
========
</TABLE>
NOTE 5 - CAPITAL LEASES
The Company has a lease agreement with LIL Enterprises, a related party secured
by computer hardware purchased in March, 1997. The lease qualifies as a capital
lease. The lease is an 18-month term with an interest a rate of 26%. The balance
at April 3, 1998 is $42,967. The entire balance is considered current.
The Company has a lease agreement with NTFC secured by equipment purchased in
November, 1997. The lease qualifies as a capital lease. The lease is a two-year
term with an interest rate of 21.4%. The monthly payment including principal and
interest amounts to $1,919. The balance at April 3, 1998 is $30,687 with $18,166
being current.
NOTE 6 - CONCENTRATIONS
For the year ended April 3, 1998, the Company earned revenues from three major
customers that amounted to approximately 80% of the total sales.
8
<PAGE>
SOFTWARE ANALYSIS & MANAGEMENT, INC.
NOTES TO THE FINANCIAL STATEMENTS
APRIL 3, 1998
NOTE 7 - LEASE COMMITMENTS AND RENT EXPENSE
The company leases two offices located in Orange and Pasadena, California under
two long-term leases expiring April 30, 2001 and March 31, 2002, respectively.
Total rent expense for the year ended April 3, 1998 was $318,385.
The following is a schedule by years of future minimum rental payments required
under the operating lease agreements:
Year Ended Leases
1999 $ 293,163
2000 300,267
2001 262,421
2002 and
thereafter 263,676
$1,119,527
NOTE 8 - INCOME TAX EXPENSE
The Company accounts for income taxes under the provisions of the Financial
Accounting Standards Board Statement No. 109 "Accounting for Income Taxes." This
provision utilizes the asset and liability method which recognizes deferred tax
assets and liabilities determined by the differences between financial statement
and tax bases of assets and liabilities using enacted tax rates.
Valuation allowances are established when necessary to reduce deferred tax
assets to the amount expected to be realized. Income tax expense is the tax
payable or refundable for the period plus or minus the change during the period
in deferred tax assets and liabilities.
Income tax expense for the years ended April 3, 1998 is as follows:
Current - Federal $ 5,861
State 14,885
------
20,746
Deferred (6,343)
------
$ 14,403
========
The deferred liabilities are arising from:
Temporary differences-Cash basis adjustment $116,391
9
<PAGE>
SOFTWARE ANALYSIS & MANAGEMENT, INC.
NOTES TO THE FINANCIAL STATEMENTS
APRIL 3, 1998
NOTE 9 -RETIREMENT PLAN
The Company provides the opportunity for employees to defer
compensation up to $9,500 in a retirement plan under the provisions
of a IRS 401(k) Plan. This is a defined contribution plan. There
are no contributions made by the Company.
NOTE 10 - SUBSEQUENT EVENTS
The stockholders are negotiating to sell their stock to RCM
Technologies, Inc. effective July 14, 1998.
10
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As an independent public accountants, we hereby consent to the
incorporation by reference in the RCM Technologies, Inc. Registration Statements
on Form S-3 (File No. 333-37423) and (Form S-8 File No. 333-48089) of our report
dated September 9, 1998 with respect to the financial statements of Software
Analysis & Management, Inc. included in the RCM Technologies, Inc. Current
Report on Form 8-KA dated September 16, 1998 filed with the Securities and
Exchange Commission.
/s/ McCullough, Ray & Bryan
September 16, 1998
Placentia, CA
