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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
March 22, 2000
Date of Report
---------------------------------
(Date of Earliest Event Reported)
QUIK PIX, INC.
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(Exact Name of Registrant as Specified in its Charter)
7050 Village Drive, Suite F
Buena Park, California 90621
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(Address of principal executive offices)
714/522-8255
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(Registrant's telephone number)
Baroque Corporation
1504 R Street, N.W.
Washington, D.C. 20009
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(Former name and former address)
Nevada 0-26407 33-0198595
- --------------- ------------ -------------------
(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"), Quik Pix, Inc. ("Quik Pix" or the "Company"), a Nevada
corporation, has acquired all the outstanding shares of common stock of Baroque
Corporation ("Baroque"), a Delaware corporation, from the shareholders thereof
in an exchange for an aggregate of 410,510 shares of common stock of (the
"Acquisition"). As a result, Baroque has become a wholly-owned subsidiary of
Quik Pix.
The Acquisition was approved by the unanimous consent of the Board of
Directors of Quik Pix on March 21, 2000. The Acquisition was effective March 22,
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.
Quik Pix had 8,503,462 shares of common stock issued and outstanding
prior to the Acquisition. Immediately after the Acquisition, Quik Pix had
8,913,972 shares issued and outstanding. As of the date of this Current Report,
the Company has 9,897,305 shares issued and outstanding.
Pursuant to Rule 12g-3(a) of the General Rules and Regulations of the
Securities and Exchange Commission, Quik Pix is the successor issuer to Baroque
for reporting purposes under the Securities Exchange Act of 1934, as amended
(the "Act").
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<PAGE>
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 Quik Pix'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 which are exercisable within 60 days hereof):
<TABLE>
<CAPTION>
Number of shares of Percent of
Common Stock Beneficially Common Stock
Name Owned (1) Beneficially Owned (2)
<S> <C> <C>
John Capie 3,521,121 35.6%
President, Chief Executive Officer,
Chairman, Director
7050 Village Drive, Suite F
Buena Park, California 90621
Software Technology, Inc. (3) 2,500,000 25.3%
STI, #501
Dong Woo Building, 784-13
Weok Smdong
Kang Anm Gu
Seoul, Korea 135-080
Ed Youngman 17,778 *
Secretary, Treasurer, Director
7050 Village Drive, Suite F
Buena Park, California 90621
Lee Finger 54,445 *
Director
7050 Village Drive, Suite F
Buena Park, California 90621
Brian Bonar 0 0%
Director
2428 Oak Canyon Place
Escondido, California 92025
Chris McKee 0 0%
Director
1792 Old Canyon Drive
Hacienda Heights, California 91745
All executive officers and directors 3,593,344 35.6%
of the company as a group (5 persons)
</TABLE>
* Less than 1%
(1) Includes options and warrants which are exercisable within 60 days of the
date hereof.
(2) Based upon 9,897,305 shares of the Company's common stock issued and
outstanding.
(3) Mr. Woo Young Kim, of Seoul , Korea, is President and controlling
shareholder of Software Technology, Inc. and may be deemed a beneficial
owner of these securities.
2
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The consideration exchanged pursuant to the Acquisition Agreement
was negotiated between Baroque and Quik Pix. In evaluating the Acquisition,
Baroque used criteria such as the value of assets of Quik Pix, Quik Pix's
ability to compete in the marketplace, Quik Pix's current and anticipated
business operations, and Quik Pix management's experience and business plan. In
evaluating Baroque, Quik Pix placed a primary emphasis on Baroque's status as a
reporting company under Section 12(g) of the Securities Exchange Act of 1934, as
amended, and Baroque's facilitation of Quik Pix's becoming a reporting company
under the Act.
(b) The Company intends to achieve its expansion objectives by
maintaining growth at its existing facilities, using multiple media consumer
education marketing efforts, and establishing name recognition and consumer
familiarity with the Company's products and services.
BUSINESS
Company
Quik Pix, Inc., doing business as Quality Photographic Imaging, is a
publicly held company located in Buena Park, California. The Company was
established in 1982 with the purpose of capitalizing on its patented
Photomotion(TM) technology and its commercial applications. The common stock of
the Company is traded on the NASD OTC Bulletin Board under the symbol "QPIX."
The Company offers a spectrum of services allowing a client to produce
color visuals (digital and photographic) according to parameters as specified by
a client. The process allows a combination of three or more images into a single
color transparency that changes as a viewer moves past the image. The Company's
services include a full range of Photomotion(TM) technology related client
support, technical and customer service.
The Company has limited finances and requires additional funding in
order to accomplish its growth objectives and marketing of its products and
services. There is no assurance that the Company will have revenues in the
future or that it will be able to secure other funding necessary for its future
growth and expansion. There is also no assurance that the Company's technology
will perform as intended or that potential customers will show sufficient
interest in the Company's product and related services. See ITEM 2, "RISK
FACTORS"
Products
The Company's principal product is a patented technology for adding
multiple images to backlit static displays that appear to change as the viewer
passes by the image. The process is called Photomotion(TM) and uses existing
original art to create an illusion of movement. This color medium uses existing
originals and allows for three to five distinct images to be displayed within an
existing light box. Images appear to change or "morph" as the viewer passes the
display. The Company's ability to put multiple images in a single space allows
the user to create an active and entertaining display using existing originals
and fixtures. The illusion is optical and requires no special equipment. This
process of "pop and display" advertising is intended to capture the targeted
audience for a longer period of time and to increase visual effectiveness.
Several large companies and services providers have selected PhotoMotion(TM) as
part of their marketing campaigns.
Operations
The Company currently operates at a loss. The Company's management
expects losses to continue for the foreseeable future. The Company requires
additional funding to achieve its growth objectives. If the Company does
not receive additional funding, it will not be able to pursue the intended
marketing plan and, in such case, may not be able to successfully conduct its
operations. There is no assurance that the Company will be successful in
development or marketing of its product or in generating any meaningful revenues
from operations.
3
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The Company intends to acquire other related businesses in exchange for
cash or issuance of securities. To date, no acquisitions have been consummated
and there can be no assurance that any future acquisitions will be consummated.
Furthermore, no assurance can be given that the Company will be able to effect
any aspects of its business plan or to maintain the operations that it has
currently established. The Company will need additional capital either through
financing or through operations to meet its business goals. There is no
assurance that the Company can reverse its operating losses or that it can raise
additional capital to allow it to expand its planned operations.
Marketing
The Company intends to employ a variety of marketing techniques to
attract potential consumers of its products. In addition to trade shows,
conferences and conventions, the Company intends to mount an integrated
marketing campaign targeting Fortune 1000 companies, distributors and other
related channels for the Company's products. To that end, the Company has
employed a marketing consultant to establish and expand its presence into
alternative markets. To date, the Company has not launched any such marketing
efforts.
As part of its promotional campaign, the Company has begun a direct
mailing and Internet initiative.
There is no assurance that the Company will be able to successfully
market and distribute its product to any of its intended customers.
Trademarks and Patents
In July, 1999, the Company was issued a patent by the United States
Patent Office for its "Back Lit Multi Image Transparency" (Photomotion)
technology. The United States patent number is 5,782,026. The Company has
registered "Photomotion"as a trademark.
Property
The Company's main executive and administrative offices are located in
the Village Business Park, in the City of Buena Park, California. There are two
facilities. The first is a 8,600 square foot facility occupying 2 suites. This
facility houses the primary color labs, the digital imaging equipment,
retouching, and finishing operations. It also provides production capabilities
for mounting, shipping and dispatching, as well as housing the administrative
offices, customer service, and marketing. The Company leases this facility at a
rate of $5,500.00 per month. The lease term is three years which may be
terminated after May 1, 2003.
The Company's second facility, a 1,750 square foot facility, is located
less than 1 mile away and is dedicated to manufacturing support capabilities.
This facility provides finished substrate mountings, custom displays, full scale
models, trade show support, and custom crate manufacturing from raw materials.
The Company leases this space at a rate of $1,750.00 per month. The lease term
is three years which may be terminated after May 1, 2003.
In November, 1999, Quik Pix announced an upgrade to its leased facility
in Buena Park. Included in the upgrade is the addition of new staff and
equipment.
The Company's mailing address is 7050 Village Drive, Suite F, Buena
Park, California 90621. Its telephone number is 800/734-0432 and its facsimile
number is 714/521-1745. Its e-mail address is [email protected]. The Company
maintains an Internet Web site located at http://www.qpivisuals.com..
Suppliers
The Company uses a variety of vendors for its film and manufacturing
processes. Presently, there are no contractual arrangements between the Company
and its suppliers. Purchase orders are written to request parts on a "as
required" basis. There is no assurance that the Company will maintain a
sufficient number of suppliers for film and manufacturing processes in the
foreseeable future.
4
<PAGE>
Employees
The Company currently employees 20 full-time and no part-time
employees.
Litigation
There is no current outstanding litigation in which the Company is
involved and the Company is unaware of any pending actions or claims against it.
Description of Securities
The authorized capitalization of the Company consists of 50,000,000
shares of common stock, $.001par value per share, and no shares of preferred
stock. Quik Pix had 8,503,462 shares of common stock issued and outstanding
prior to the Acquisition. Immediately after the Acquisition, Quik Pix had
8,913,972 shares issued and outstanding. As of the date of this Current Report,
the Company has 9,897,305 shares issued and outstanding.
Market for the Company's Securities
The common stock of the Company is traded on the NASD OTC Bulletin
Board under the symbol "QPIX." The market for OTC securities is characterized
frequently by low volume and broad price and volume volatility. The Company
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 the Company'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 the Company or its competitors, product
enhancements by the Company 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, as amended. The NASD 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. Quik Pix
acquired all the outstanding shares of Baroque to become successor issuer to it
pursuant to Rule 12g-3(a) in order to comply with the Eligibility Rule for the
NASD OTC Bulletin Board.
The following is the last 12-month trading history for the Company's
common stock:
Date High Low Volume
March,1999 0.220 0.020 1,400
April,1999 0.020 0.020 1,600
May,1999 0.718 0.020 64,400
June,1999 0.125 0.070 15,600
July,1999 0.250 0.070 19,500
August,1999 0.070 0.150 -
September,1999 0.230 0.070 9,800
October,1999 0.312 0.070 1,600
November,1999 0.312 0.070 22,500
December,1999 0.650 0.070 4,100
January,2000 0.500 0.070 3,100
February,2000 2.687 0.070 763,200
March, 2000 1.750 0.500 180,100
April, 2000* 0.875 0.250 25,800
- ----------
As of April 19th, 2000
The market price of the Company's common stock over the last 52 weeks
has ranged from $0.02 to $2.68. On April 17th, the high was $0.625 and the low
$0.250 with a volume of 3,600 shares.
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<PAGE>
Transfer Agent
The Company's transfer agent is Atlas Stock Transfer, 5899 State
Street, Salt Lake City, Utah 84107.
Management
Name Age Title
John Capie 53 President, Chief Executive Officer, Chairman
Ed Youngman 68 Secretary, Treasurer, Director
Lee Finger 57 Director
Brian Bonar 52 Director
Chris McKee 51 Director
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 officer of the Company.
John Capie has been President of the Company since its inception in
1982. Mr. Capie's employment history includes employment at various managerial
positions in New York-based photographic labs. Mr. Capie has also had extensive
experience in Point of Purchase Displays and Trade Show exhibit building. Over
the last twelve years he has been on the Board of Directors for corporations
including Exhibitronix Inc., Modular Display Systems, Inc., Tabery Corporation,
Delta Transport, American Distributing Company.
Ed Youngman has served as Controller and Secretary/Treasurer of the
Company since 1987. Mr. Youngman has held numerous senior executive roles at
Litton, Sargent Industries and HN Bailey Associates.
Lee Finger has been a Director of the Company since 1982 to present. He
is a founder of the Company. Mr. Finger has been retired for the past 5 years.
He has no formal educational background.
Brian Bonar has been a Director of the Company since February, 2000.
Mr. Bonar has served since April, 1998 as a CFO of Imaging Technologies, San
Diego, California, a software and hardware company. Mr. Bonar and has been a
Director since 1992 and recently became Chairman of the Board. From 1991 to
1992, Mr. Bonar was Vice President of Worldwide Sales and Marketing for Bezier
Systems, Inc., a San Jose, California-based manufacturer and marketer of laser
printers. From 1990 to 1991, he was a Worldwide Sales Manager for Adaptec, Inc.,
a San Jose-based laser printer controller developer. From 1988 to 1990, Mr.
Bonar was Vice President of Sales and Marketing for Rastek Corporation, a laser
printer controller developer located in Huntsville, Alabama. From 1984 to 1988,
Mr. Bonar was employed as Executive Director of Engineering at QMS, Inc., an
Alabama-based developer and manufacturer of high-performance color and
monochrome printing solutions. Prior to these positions, Mr. Bonar was employed
by IBM U.K. Ltd. for approximately 17 years.
Chris McKee has been a Director of the Company since February, 2000.
Mr. McKee also has served since August, 1998 as Senior Vice President of Finance
and Operations for Imaging Technologies, San Jose, California, a software and
hardware company. Prior to joining the Company, Mr. McKee spent 23 years with
Flowserve Corporation and its predecessor company, BW/IP, Inc., in various
financial management positions, including most recently as its Director of
Information Technology and Baan Implementation. Mr. McKee holds a Masters in
Business Administration degree from Pepperdine University in 1979.
Executive Compensation
The Company has no audit, compensation or executive committees. No
officers of the Company earned more than $100,000 a year during any of the last
three fiscal years. There is no key man life insurance on any director or
officer.
6
<PAGE>
Related Transactions
In May, 1999, the Company and YARC Systems Corporation entered into
discussions regarding the possible acquisition of the Company by YARC Systems, a
company located in Camarillo, California. In February, 2000, all such
discussions with YARC Systems were formally ended.
RISK FACTORS
Uncertainty as to the Continuation of the Company as a Going Concern.
The audited financial statements of the Company show that the Company incurred a
net loss for the year ended September 30, 1998 of ($1,533,705) on net sales of
$1,853,024 and a net loss for the year ended September 30, 1999 of ($582,188) on
net sales of $1,216,449. As of September 30, 1999, the Company had current
assets of $249,752 and current liabilities of $1,264,737. These conditions raise
substantial doubt about the Company's ability to continue as a going concern and
if substantial additional funding is not acquired or alternative sources
developed to meet the Company's working capital needs, management will be
required to curtail its operations.
The Company is Currently Operating at a Loss. The Company has
historically operated at a loss. If losses continue, the Company may need to
raise additional capital through the sale 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 will be required to curtail
operations. The Company's operations are subject to the risks and competition
inherent in the establishment of a business enterprise in the competitive field
of technology companies. 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 network of participating distributors and customers, dependability of
its advertising and recruiting network, and general economic conditions. There
is no assurance that the Company will achieve its expansion goals and the
failure to achieve such goals would have an adverse impact on it.
Uncertainty of Future Transactions. The Company's operations are
subject to the risks and competition inherent in operating a business enterprise
in the competitive field of technology companies. 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 products, market
awareness, its ability to expand its network of participating distributors and
customers, dependability of its advertising and recruiting network, and general
economic conditions. There is no assurance that the Company will achieve its
expansion goals and the failure to achieve such goals would have an adverse
impact on it.
The Company 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
fund the Company's proposed 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, or 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.
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, 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.
Issuance of Future Shares May Dilute Investors' Share Value. The
Company is authorized to issue 50,000,000 shares of common 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
7
<PAGE>
shareholders. Moreover, any common 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 any trading market, should a trading market for the Company's common
stock develop.
Shares Available For Future Sale May Affect Market Price. 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.
Adverse Economic Conditions or a Change in General Market Patterns. A
weak economic environment could adversely affect the Company sales and
promotional efforts. General economic conditions may impact demand and interest
for the Company's technology may decline at any time, especially during
recessionary periods. Many factors beyond the Company's control may decrease
overall demand for the Company's technology including, among other things,
decrease in the entry costs by other similarly situated companies, better and
more efficient technology, increase in the overall unemployment rate, and
additional government regulation. There can be no assurance that the general
market demand for the Company's technology will remain the same or will not
decrease in the future.
The Company May Fail to Generate Sufficient Interest in its Products.
The Company must undertake substantial effort to market its technology in the
United States and other markets. There is no assurance that the Company will be
able to generate sufficient interest in and to create and maintain steady demand
for its products over time.
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 John Capie, President of the Company, as well as other key
management personnel. The loss of the services of these individuals could 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 of its key management
members' services.
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.
Competition from Larger and More Established Companies May Hamper
Marketability. The competition in the high technology industry is intense. Large
and highly fragmented, these industries host a number of well-established
competitors, including national, regional and local companies possessing greater
financial, marketing, personnel and other resources than the Company. There is
no assurance that the Company will be able to market or sell its product if
faced with direct product and services competition from these larger and more
established companies.
The Company's Technology May Become Obsolete. The technology which the
Company intends to market could become obsolete as a result of superior
technology developed by a third-party designer or by discovering a more
efficient and speedier way of providing the results that the Company's
technology is intended to deliver. Either or both of those events, upon
occurrence, could lead to an erosion in the Company's ability to market its
product as well as an erosion of potential customer base.
Trademark Protection and Proprietary Marks. There is no assurance that
the Company will be able to prevent competitors from using its trade marks or
trade names or similar names, marks, concepts or appearances or that it will
have the financial resources necessary to protect its marks against infringing
use.
8
<PAGE>
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 NASD 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 maintain such a level.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
Successor Issuer.
Pursuant to Rule 12g-3(a) of the General Rules and Regulations of the
Securities and Exchange Commission, the Company is the successor issuer to
Baroque for reporting purposes under the Securities Exchange Act of 1934.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
The sole officer and director of Baroque resigned effective upon
completion of the Acquisition.
ITEM 7. FINANCIAL STATEMENTS
The audited financial statements for Quik Pix for the fiscal year ended
September 30, 1999 are filed herewith.
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QUIK PIX, INC.
FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1999 AND 1998
10
<PAGE>
QUIK PIX, INC.
CONTENTS
--------
PAGE 1 INDEPENDENT AUDITORS' REPORT
PAGES 2 - 3 BALANCE SHEETS AS OF SEPTEMBER 30, 1999
PAGE 4 STATEMENTS OF OPERATIONS FOR THE YEARS ENDED
SEPTEMBER 30, 1999 AND 1998
PAGE 5 STATEMENTS OF CHANGES IN STOCKHOLDERS'
DEFICIENCY FOR THE YEAR ENDED SEPTEMBER 30, 1999
PAGES 6 - 7 STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED
SEPTEMBER 30, 1999 AND 1998
PAGES 8 - 15 NOTES TO FINANCIAL STATEMENTS
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of:
Quik Pix, Inc.
We have audited the accompanying balance sheet of Quik Pix, Inc. as of September
30, 1999 and 1998 and the related statements of operations, changes in
stockholders' deficiency and cash flows for the years 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 consolidated 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 financial statements referred to above present fairly in all
material respects, the financial position of Quik Pix, Inc. as of September 30,
1999 and 1998 and the results of its operations and its cash flows for the years
then ended in conformity with generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 9 to the
financial statements, the Company's recurring losses from operations, working
capital deficiency and stockholders' deficiency raise substantial doubt about
its ability to continue as a going concern. Management's Plan in regards to
these matters is also described in Note 9. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
WEINBERG & COMPANY, P.A.
Boca Raton, Florida
April 19, 2000
<PAGE>
<TABLE>
QUIK PIX, INC.
BALANCE SHEETS
SEPTEMBER 30, 1999 AND 1998
---------------------------
ASSETS
------
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
CURRENT ASSETS
Cash
Trade accounts receivable (net of allowance for
doubtful accounts of $72,000 and $42,000,
respectively) $ 208,040 $ 228,976
Inventories 30,000 30,000
Prepaid expenses and other assets 8,097 8,946
------------ ------------
Total Current Assets 249,752 271,887
------------ ------------
PROPERTY & EQUIPMENT - NET
Digital equipment 486,262 486,262
Machinery equipment 489,952 489,952
Furniture and fixtures 98,800 98,800
Leasehold improvements 70,839 70,839
Transportation equipment 42,282 42,282
------------ ------------
1,188,135 1,188,135
Accumulated depreciation (1,188,135) (1,071,572)
------------ ------------
Net Property and Equipment - 116,563
------------ ------------
OTHER ASSETS
Goodwill 305,499 452,163
Multi-image technology (net of accumulated
amortization of $8,400 and $6,720,
respectively) 16,800 18,480
Other receivables 4,000 -
Deposits 5,335 3,780
------------ ------------
Total Other Assets 331,634 474,423
------------ ------------
TOTAL ASSETS $ 581,386 $ 862,873
============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
QUIK PIX, INC.
BALANCE SHEETS
SEPTEMBER 30, 1999 AND 1998
---------------------------
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
----------------------------------------
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 635,090 395,628
Accrued interest 453,940 404,380
Payroll payable 49,284 61,460
Income taxes payable 1,600 1,600
Current portion of long-term debt 74,000 101,000
------------ ------------
Total Current Liabilities 1,213,914 946,068
LONG-TERM LIABILITIES 1,264,737 1,213,882
------------ ------------
TOTAL LIABILITIES 2,478,651 2,177,950
------------ ------------
COMMITMENTS - -
STOCKHOLDERS' EQUITY
Common stock, $.001 par value, 100,000,000 shares
authorized, 6,003,462 shares issued and outstanding 6,003 6,003
Additional paid in capital 225,603 225,603
Accumulated deficit (2,128,871) (1,546,683)
------------ ------------
Total Stockholders' Deficiency (1,897,265) (1,315,077)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIENCY $ 581,386 862,873
============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
QUIK PIX, INC.
STATEMENTS OF OPERATIONS
YEARS ENDED SEPTEMBER 30, 1999 AND 1998
---------------------------------------
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
SALES - NET $ 1,216,449 $ 1,853,024
COST OF SALES 961,944 1,290,901
------------ ------------
GROSS PROFIT 254,505 562,123
SELLING AND GENERAL
ADMINISTRATIVE EXPENSES 730,918 1,804,914
------------ ------------
LOSS FROM OPERATIONS (476,413) (1,242,791)
OTHER INCOME (EXPENSE)
Miscellaneous income (expense) (2,144) 5,923
Interest expense (107,119) (146,791)
------------ ------------
Net Other Expense (104,975) (140,868)
------------ ------------
LOSS BEFORE PROVISION FOR
INCOME TAXES (581,388) (1,383,659)
PROVISION FOR INCOME TAXES 800 150,046
------------ ------------
NET LOSS $ (582,188) $(1,533,705)
- -------- ============ ============
Net loss per share - basic $ (.10) $ (.26)
============ ============
Weighted average number of shares
outstanding during the year - basic 6,003,462 6,003,462
============ ============
</TABLE>
See accompanying notes to financial statements
2
<PAGE>
<TABLE>
QUIK PIX, INC.
STATEMENTS OF OPERATIONS
YEARS ENDED SEPTEMBER 30, 1999 AND 1998
---------------------------------------
<CAPTION>
ADDITIONAL RETAINED
COMMON STOCK PAID-IN EARNINGS
SHARES AMOUNT CAPITAL (DEFICIT) TOTAL
------ ------ ------- --------- -----
<S> <C> <C> <C> <C> <C>
Balance, October 1, 1997 6,003,462 $ 6,003 $ 225,603 $ (12,978) $ 218,628
Net loss for the year ended
September 30, 1998 - - - (1,533,705) (1,533,705)
--------- ----- ------- ---------- ----------
Balance, September 30, 1998 6,003,462 6,003 225,603 (1,546,683) (1,315,077)
Net loss for the year ended
September 30, 1999 - - - (582,188) (582,188)
--------- ----- ------- ---------- ----------
BALANCE, SEPTEMBER
30, 1999 6,003,462 $ 6,003 $ 225,603 $ (2,128,871) $ (1,897,265)
========= ======== ========= ============ ============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
<TABLE>
QUIK PIX, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 1999 AND 1998
-----------------------------------------------
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $ (582,188) $(1,533,705)
Adjustments to reconcile net loss to net
cash provided (used) by operating
activities:
Depreciation 264,907 1,272,411
Provision for doubtful accounts 30,000 20,000
Changes in operating assets and
liabilities:
Increase (decrease) in:
Trade accounts receivable (9,064) 92,448
Inventories - 64,820
Prepaid expenses 849 (1,358)
Deferred tax assets - 141,023
Accounts payable and accrued expenses 239,462 (70,510)
Payroll taxes payable (12,176) (3,173)
Accrued interest 49,560 90,370
------------ ------------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (18,650) 72,326
------------ ------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Deposit (1,555) 404
------------ ------------
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES (1,555) 404
------------ ------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Due from officer and employees (4,000) 8,820
Payments on long-term debt (90,000) (79,798)
Borrowings on long-term debt 113,855 -
------------ ------------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 19,855 (70,978)
------------ ------------
NET INCREASE (DECREASE) IN
CASH (350) 1,752
------------ ------------
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 3,965 2,213
------------ ------------
CASH AND CASH EQUIVALENTS
AT END OF YEAR $ 3,615 $ 3,965
============ ============
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
<TABLE>
QUIK PIX, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 1999 AND 1998
-----------------------------------------------
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
-----------------------------------------------------------------------
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Equipment acquired under capital lease $ - $ 30,341
============ ============
Cash paid during the year ended September 30:
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Interest $ 57,560 $ 56,421
============ ============
Taxes $ 1,600 $ 1,600
============ ============
</TABLE>
See accompanying notes to financial statements
5
<PAGE>
QUIK PIX, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1999 AND 1998
---------------------------------
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
- ------ -----------------------------------------------------------
(A) Organization
----------------
Quik Pix, Inc. was incorporated under the laws of the State of
California on November 4, 1980. The Company is a custom color
laboratory specializing in visual marketing through the production of
single image and digital multi-image color photography.
In October 1986, the original stockholders entered into a contract for
the sale of the Company through a leverage buyout arrangement with
another corporation, QPI Group, Inc., incorporated under the laws of
the State of California on August 22, 1986. (See Note 3) QPI, Group,
Inc. was incorporated specifically for the purpose of acquiring the
original Quik Pix, Inc. Subsequent to the acquisition, QPI Group, Inc.
changed its name to Quik Pix, Inc.
In September 1987, the new Quik Pix, Inc. entered into a letter of
intent with Redwood Financial, Inc. (a Nevada Corporation), whereby it
agreed to exchange all of its issued and outstanding shares of common
stock for 14,000,000 shares of Redwood Financial, Inc.'s common stock.
This transaction was completed in December 1987, and 13,000,000 shares
were outstanding. Subsequent to the merger, Redwood Financial, Inc.,
the surviving corporation, changed its name to Quik Pix, Inc. (the
"Company"). For financial reporting purposes this transaction was
reflected as a recapitalization of the Company and reverse merger with
Redwood Financial, Inc.
On October 1997, the Company had a 1 for 3 reverse split of its common
stock and all share and per share data in the accompanying financial
statements has been retroactively restated to give effect to the
reverse split.
(B) Use of Estimates
--------------------
In preparing financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and the disclosure of contingent assets and liabilities at the date of
the financial statements and revenues and expenses during the reported
period. Actual results could differ from those estimates.
(C) Cash and Cash Equivalents
-----------------------------
For purposes of the cash flow statements, the Company considers all
highly liquid investments with original
6
<PAGE>
QUIK PIX, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1999 AND 1998
---------------------------------
maturities of three months or less at the time of purchase to be cash
equivalents.
(D) Property and Equipment
--------------------------
Property and equipment are stated at cost. When retired or otherwise
disposed of, the related cost and accumulated depreciation is
eliminated from the respective accounts and the net difference, less
any amount realized from disposition, is reflected in earnings.
(E) Capital Leases
------------------
Capital leases which were transferred to the Company substantially all
of the benefits and risks incidental to ownership of the property are
capitalized at the fair market value of the property at the inception
of the lease. Under this method of accounting for leases, the asset is
depreciated over its estimated useful life using an accelerated method
and the obligation, including interest, is amortized over the life of
the lease. Payments on all non-capital leases are expensed as incurred.
(F) Amortization
----------------
In 1986, goodwill was recorded as a result of the leveraged buyout (see
Note 1(A)), and was being amortized using the straight-line method over
a period of 40 years. In 1998, the estimated for economic life was
changed to 15 years. Multi-image technology is amortized using the
straight-line method over a period of 15 years. When an intangible
asset exceeds associated expected operating flows it is considered
impaired and is written down to net fair market value.
(G) Depreciation
----------------
Depreciation is computed using straight-line and accelerated methods
over the estimated useful lives of the assets as follows:
7
<PAGE>
QUIK PIX, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1999 AND 1998
---------------------------------
Machinery and equipment 5 years
Furniture and fixtures 3 - 5 years
Leasehold improvements 5 years
Transportation equipment 3 - 5 years
All fixed assets are fully depreciated.
(H) Deferred Taxes
Deferred taxes are recognized for differences between the bases of
assets and liabilities for financial reporting and income tax purposes.
The differences relate primarily to the non-deductibility of current
franchise taxes, the allowance for doubtful accounts, and related party
accruals.
(I) Earnings Per Share
The Company computes basic earnings per share by the weighted average
method. There were no common stock equivalents at September 30, 1999
and 1998.
NOTE 2 INVENTORIES
- ------ -----------
Inventories are stated at the lower of cost (first in first out method)
or market and consist of raw film and other photo processing stock.
NOTE 3 GOODWILL
- ------ --------
In October 1986, a leveraged buyout of the Company's original
stockholders was completed. The leveraged buyout agreement called for a
purchase price of $2,625,000 which was in excess of the book value of
the Company. As a result, goodwill was established. The economic life
was changed in 1998 (See Note 1(F)). This change in the estimated life
of the goodwill has the
8
<PAGE>
QUIK PIX, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1999 AND 1998
---------------------------------
effect of decreasing net income for 1998 by $1,000,707 ($.17 per
share). The following is a summary of the determination of goodwill and
resulting balance as of September 30, 1999 and 1998.
1999 1998
------------- ------------
Purchase price $ 2,625,000 $ 2,625,000
------------- ------------
Less net book value at
the date of acquisition 425,091 425,091
------------- ------------
Goodwill 2,199,909 2,199,909
Accumulated
amortization through (1,894,410) (1,747,746)
------------- ------------
September 30 $ 305,499 $ 452,163
NOTE 4 MULTI-IMAGE TECHNOLOGY
- ------ ----------------------
During 1994, the Company purchased the rights to a photo process called
"multi-image". This process permits up to five images to be displayed
in sequence. The original cost of purchasing this technology was
capitalized and is being amortized. (See Note 1(F)) Consulting fees and
other cost relating to the implementation of this technology are
expenses as incurred. As of the date of these financial statements, the
Company was in the process of obtaining a patent for this technology.
NOTE 5 NOTES PAYABLE AND CAPITALIZED LEASE OBLIGATIONS
- ------ -----------------------------------------------
Long-term notes payable and capitalized lease obligations consist of
the following:
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Bank line, due May 2000, interest at $ 45,411 $ 47,755
prime plus 2.25%, guaranteed by an
officer of the Company
Convertible subordinated debentures, 813,597 843,016
secured by certain of the issued and
outstanding stock of the Company,
interest payable monthly at 6.47% per
annum, maturing September 2005.
</TABLE>
9
<PAGE>
QUIK PIX, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1999 AND 1998
---------------------------------
<TABLE>
<S> <C> <C>
Convertible subordinated debentures, 7,918 7,918
secured by certain of the issued and
outstanding stock of the Company, with
no stated interest rate, maturing
September 2005. (See below)
Note payable to stockholder, unsecured, 80,529 53,529
interest at 10% per annum, principal
due on demand
Note payable, unsecured, interest 37,500 37,500
payable at 10% per annum, maturing
September 1995. (As of the date
of issuance of these financial
statements, the principal balance
was unpaid.)
Note payable to stockholder, 14,209 14,209
unsecured, interest payable at 10%
per annum, maturing September 1995
(As of the date of issuance of these
financial statements the principal
balance was unpaid.)
Note payable to stockholder, 145,000 45,000
unsecured, interest at 12% per annum,
maturing December 2000
Capitalized lease obligation, finance 23,350 29,823
company, secured by digital equipment,
payable in monthly installments of $831
including interest at 18.8% per annum,
</TABLE>
10
<PAGE>
QUIK PIX, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1999 AND 1998
---------------------------------
<TABLE>
<S> <C> <C>
maturing July 2002. At September 30,
1999 the cost and accumulated
depreciation of the leased equipment
was $31,000 and $12,000, respectively.
Capitalized lease obligation, finance 3,113 12,465
company, secured by digital equipment,
payable in monthly installments of $856
including interest at 21.3% annum,
maturing February 2000. At September 30,
1999, the cost and accumulated depreciation
of the leased equipment was $32,540 and
$31,200, respectively.
Capital lease obligation, finance 4,516 9,193
company, secured by machinery and equipment,
payable in monthly installments of $486
including interest at 16.25% per
annum, maturing July 2000. At
September 30, 1999 the cost and
accumulated depreciation of the leased
equipment was $20,411 and $19,000,
respectively.
Capitalized lease obligation, finance 35,903 52,453
company, secured by digital equipment,
payable in monthly installments of $2,016
including interest at 16.3% per annum,
maturing August 2001. At September
30, 1999, the cost and accumulated
</TABLE>
11
<PAGE>
QUIK PIX, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1999 AND 1998
---------------------------------
<TABLE>
<S> <C> <C>
depreciation of the leased equipment
was $78,394 and $64,000 respectively.
Capitalized lease obligation, finance 34,827 50,180
company, secured by digital equipment,
payable in monthly installments of $2,050
including interest at 20.1% per annum,
maturing August 2001. At September
30, 1999, the cost and accumulated
depreciation of the leased equipment
was $72,464 and $60,000, respectively.
Capitalized lease obligation, finance 20,693 30,342
company, secured by digital equipment,
payable in monthly installments of $959
including interest at 15.7% per annum
maturing July 2001. At September 30, 1999,
the cost and accumulated depreciation of
the leased equipment was $39,988 and $33,000,
respectively.
Capitalized lease obligation, finance 481 3,433
company, secured by telephone equipment,
payable in monthly installments of $202
including interest.
Notes payable, finance company, (comprised 2,155 11,420
of 3 identical notes), secured by
transportation equipment, payable in cumulative
</TABLE>
12
<PAGE>
QUIK PIX, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1999 AND 1998
---------------------------------
<TABLE>
<S> <C> <C>
equipment, payable in cumulative monthly
installments of $1,092 including interest
at 10.25% per annum, maturing August 1999.
Notes payable to stockholders, unsecured, 69,535 66,646
interest payable at 12% per annum, principal
due on demand.
----------- -----------
1,338,73 1,314,88
7 2
Less current portion (74,000) (101,000)
----------- -----------
$ 1,264,73 $ 1,213,88
7 2
=========== ===========
</TABLE>
Notes and capitalized leases mature as follows:
2000 $ 68,000
2001 54,000
2002 10,000
Thereafter 1,200,700
---------
$1,338,700
The convertible subordinated debentures were issued in connection with
the leveraged buyout of the Company in October 1996. The debentures
were scheduled to mature on 1991, however, the Company, in accordance
with the terms of the debentures, extended the maturity of the
debentures to September 2005. At any time prior to the maturity of the
debentures, they may be converted at 50% of the face value of the
debentures into shares of the Company's common stock. At no time can
the conversion exceed 3% of the outstanding shares of the Company. The
conversion price is specified in the terms of the debentures. (As of
the date of the auditors' report these debentures were unpaid and none
have been converted to common stock.)
13
<PAGE>
QUIK PIX, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1999 AND 1998
---------------------------------
NOTE 6 INCOME TAXES
- ------ ------------
Components of the provision (credit) for income taxes are as follows:
<TABLE>
<CAPTION>
1999 1998
-------------------- -------------------
<S> <C> <C>
Taxes currently paid or $ 800 $ 800
payable
===================== ===================
</TABLE>
Deferred income taxes consist of the following:
<TABLE>
<CAPTION>
1999 1998
-------------------- -------------------
<S> <C> <C>
Deferred tax asset $ 720,000 $ 521,000
Valuation allowance (720,000) (521,000)
-------------------- -------------------
$ - $ -
===================== ====================
</TABLE>
The Company has a net operating loss of approximately $2,177,000 that
may be used to offset future income through 2018
NOTE 7 LEASE COMMITMENTS
- ------ -----------------
The Company conducts its operations from facilities that are leased
under an operating lease which expires June 2000. The base rent is
currently $5,441 per month, adjustable by the increase in the consumer
price index, not to exceed 6% per annum. Under the terms of the lease,
the Company is obligated for its allocated share of operating costs as
defined in the lease agreement. Total payments made under this lease
for each of the years ended September 30, 1999 and 1998 were $65,289.
The Company also conducts operations from facilities leased under an
operating lease expiring September 2001. At September 30, 1999, the
base rent was $2,035. Under the terms of the lease, the Company is
obligated for repairs and maintenance. Total payments made under this
lease for the years ended September 30, 1999 and 1998 was $24,420.
The Company also leases office and transportation equipment under
operating leases which expire on various
14
<PAGE>
QUIK PIX, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1999 AND 1998
---------------------------------
dates in 1998 and 2000.
The following is a schedule, by year, of future minimum lease payments
for all non-cancelable operating leases:
YEAR ENDING SEPTEMBER
30,
---------------------
2000 $ 52,079
2001 24,420
------------------------------
$ 76,499
==============================
NOTE 8 CONCENTRATIONS OF CREDIT RISK
- ------ -----------------------------
Financial instruments that potentially subject the Company to
concentrations of credit risk consist of trade accounts receivable. The
Company routinely assesses the financial strength of its customers and,
as a consequence, believes that its trade accounts receivable credit
risk exposure is limited.
NOTE 9 GOING CONCERN
- ------ -------------
As reflected in the accompanying financial statements, the Company has
had continuing losses, and at September 30, 1999, has a working capital
deficiency of $964,162 and a stockholders' deficiency of $1,897,265.
The ability of the Company to continue as a going concern is dependent
on the Company's ability to raise additional capital and implement its
business plan. The financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going
concern.
The Company anticipates an increase in revenues during 2000 and intends
to continue raising additional capital during 2000. Management believes
that actions presently taken to improve its future operations and
obtain additional funding provide the opportunity for the Company to
continue as a going concern (See Note 10).
15
<PAGE>
QUIK PIX, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1999 AND 1998
---------------------------------
NOTE 10 SUBSEQUENT EVENTS
- ------- -----------------
Subsequent to September 30, 1999, the Company entered into an agreement
with the principal stockholder of Baroque Corporation (see below)
whereby the principal stockholder will provide certain stipulated
services with regard to the Company becoming a Securities and Exchange
Commission reporting company. The consideration paid was $225,000.
On March 21, 2000 pursuant to an agreement and plan of reorganization
(the "Acquisition") the Company acquired all the outstanding shares of
common stock of Baroque Corporation, a Delaware Corporation from the
shareholder thereof in exchange for an aggregate of 410,510 shares of
common stock of the Company. As a result, Baroque became a wholly-owned
subsidiary of the Company. The Acquisition was effective on March 22,
2000 and was intended to qualify as a reorganization within the meaning
of Section 368(A)(1)(b) of the Internal Revenue Code of 1986, as
amended. Upon effectiveness of the Acquisition, pursuant to 12g-3(a) of
the General Rules and Regulations of the Securities and Exchange
Commission, the Company became the successor issuer to Baroque for
reporting purposes under the Securities and Exchange Act of 1934. The
Company had 8,503,462 shares of common stock issued and outstanding
prior to the Acquisition, and 8,913,972 shares issued and outstanding
immediately following the Acquisition period.
Subsequent to September 30, 1999, the Company issued 3,483,333 common
shares for cash of $500,000.
16
<PAGE>
ITEM 8. CHANGE IN FISCAL YEAR
Baroque's fiscal year ends December 31. The Company intends to keep its
fiscal year which ends September 30.
EXHIBITS
2.1* Agreement and Plan of Reorganization between Quik Pix, Inc. and Baroque
Corporation.
* Previously filed
17
<PAGE>
QUIK PIX, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1999 AND 1998
---------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Current Report to be signed on its behalf by
the undersigned hereunto duly authorized.
Quik Pix, Inc.
By /s/ John Capie
---------------------------
John Capie
President
Date: April 21, 2000.
18
