<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): July 22, 1998
IMTEK OFFICE SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-24464-NY 11-2958856
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
8003 CORPORATE DRIVE, SUITE C, BALTIMORE, MARYLAND 21236
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (410) 931-2054
Not applicable
(Former name or former address, if changed since last report.)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On July 22, 1998, Imtek Office Solutions, a Delaware corporation (the
"Registrant") and its direct wholly-owned subsidiary, Imtek Acquisition
Corporation, a Maryland corporation ("Imtek Acquisition"), purchased 600 shares
of capital stock of Barbera Business Systems, Inc., a Maryland corporation
("Barbera"). Three hundred of such shares were purchased from Joseph S. Barbera,
and three hundred of such shares were purchased from Kathleen P. Barbera (the
"Stock Acquisition"), all pursuant to that certain Stock Purchase Agreement and
Plan of Merger (the "Acquisition Document"), which is incorporated into this
Current Report as Exhibit 99.1 from the Current Report filed by the Registrant
on August 13, 1998. The 600 shares of Barbera capital stock acquired by Imtek
Acquisition (the "Acquired Securities") represented, at the time of the Stock
Transaction, and represent on the date of filing of this report, 60% of the
issued and outstanding shares of Barbera.
The Acquisition Document also provides that, on or prior to November 1,
1998 (or December 1, 1998 in the event Imtek Acquisition or the Registrant pays
Joseph P. Barbera and Patricia A. Buddemeyer ("Barbera and Buddemeyer") $2,500
each prior to November 1, 1998), Imtek Acquisition will, subject to the terms
and conditions of the Acquisition Document, acquire the remaining 40% interest
in Barbera held by Barbera and Buddemeyer through a subsequent merger (the
"Merger Transaction" and, together with the Stock Transaction, the "Barbera
Acquisition"). As of the date of this report, the Merger Transaction has not yet
been consummated. The Registrant, however, has paid $5,000 to Barbera and
Buddemeyer, and Barbera and Buddemeyer have agreed to extend the date on which
the Merger Transaction will be consummated for a reasonable period of time.
Following the closing of the Merger Transaction, Imtek Acquisition will be the
successor corporation and will change its name to Barbera Business Systems, Inc.
In the event the Merger Transaction is consummated, (i) Imtek
Acquisition shall succeed to all of the assets and liabilities of Barbera, and
the same shall be automatically vested in Imtek Acquisition, and (ii) all of the
issued and outstanding shares of Barbera capital stock held by Barbera and
Buddemeyer will be automatically canceled, and each of Barbera and Buddemeyer
shall be entitled to receive 100,000 shares of the registrant's common stock,
par value $0.000001 per share, all upon the consummation of the Merger
Transaction.
The assets to be acquired in the Barbera Acquisition include customer
lists, inventory, tools, spare parts and supplies, leasehold and other interests
in machinery and equipment, furniture and other personal property, the Barbera
name, customer and supplier contracts, accounts receivable, prepaid items and
books and records (the "Acquired Assets"). Prior to the Barbera Acquisition, the
Acquired Assets were used in connection with Barbera's sale and leasing of
office products and equipment, and such use will be continued after the closing
of the Stock Transaction and the Merger Transaction.
The aggregate consideration given by the Registrant and Imtek
Acquisition for the Acquired Securities was $1,498,000, of which $10,000 is
being held in escrow pursuant to the Acquisition Documents to satisfy any
liabilities arising out of an IRS audit of Barbera for Barbera's fiscal year
ending June 30, 1995 and any other federal or state audit of Barbera for any
period ending prior to the date of the Stock Acquisition (the "Audit"). The
aggregate consideration to be given by the Registrant for the remaining 40%
interest in Barbera to be acquired in the Merger Acquisition is 200,000 shares
of the Registrant's common stock. The consideration provided and to be provided
was determined by the registrant's management by using management's best
judgement of the value of Barbera to the Registrant and represents a negotiated
compromise of the Registrant's management, on the one hand, and the Barbera
Stockholders, on the other.
The Acquisition Document provides that Barbera and Buddemeyer shall
serve as directors of Barbera until the closing date of the Merger Transaction,
at which time Barbera and Buddemeyer will resign from the Board of Directors of
Barbera.
The funds used by the Registrant to acquire Barbera were funds made
available to the Registrant from Sirrom Capital Corporation, a Tennessee
corporation ("Sirrom"), in accordance with that certain Loan Agreement dated May
29, 1998 by and among Sirrom, the Registrant and the Registrant's subsidiaries,
pursuant to which Sirrom has made a loan the Registrant and its subsidiaries in
the original aggregate principal amount of up to six million dollars
($6,000,000).
2
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Audited Financial Statements of Business Acquired for Fiscal
Year Ended June 30, 1999
Report of Independent Certified Public Accountants
Balance Sheet as of June 30, 1998
Statement of Operations for the Year Ended June 30, 1998
Statement of Stockholders (Deficit) Equity for the Year Ended
June 30, 1998
Statement of Cash Flows
Notes to Audited Financial Statements
3
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
BOARD OF DIRECTORS
BARBERA BUSINESS SYSTEMS, INC.
We have audited the accompanying balance sheet of Barbera Business Systems, Inc.
as of June 30, 1998 and the related statements of operations, stockholders'
deficit 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 financial statements referred to above present fairly, in
all material respects, the financial position of Barbera Business Systems, Inc.
as of June 30, 1998, and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
/s/ Grant Thornton LLP
- -----------------------------------------
Grant Thornton LLP
BALTIMORE, MARYLAND
JANUARY 8, 1999
4
<PAGE>
BARBERA BUSINESS SYSTEMS, INC.
BALANCE SHEET
JUNE 30, 1998
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS
Cash $ 62,585
Accounts receivable 701,829
Inventory 553,715
Other receivables 62,315
Prepaid expenses 9,979
Income taxes recoverable 95,514
-----------
Total current assets 1,485,937
PROPERTY, PLANT AND EQUIPMENT - AT COST
Furniture, fixtures and equipment 103,701
Automobiles 80,810
Leasehold improvements 11,133
Computer and office equipment 195,996
-----------
391,640
Less accumulated depreciation and amortization (301,865)
-----------
89,775
DEFERRED TAX ASSET 67,278
OTHER ASSETS 25,959
-----------
$ 1,669,399
-----------
-----------
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Current maturities of notes payable $ 133,046
Line-of-credit 225,296
Accounts payable 576,777
Accrued expenses 111,743
Deferred maintenance revenue 754,093
-----------
Total current liabilities 1,800,955
NOTES PAYABLE, less current maturities 4,500
COMMITMENTS AND CONTINGENCIES --
STOCKHOLDERS' DEFICIT
Common stock, $1 par value; authorized 100,000
shares; 1,430 issued and outstanding 1,430
Accumulated deficit (137,486)
-----------
(136,056)
-----------
$ 1,669,399
-----------
-----------
</TABLE>
SEE ACCOMPANYING NOTES
6
<PAGE>
BARBERA BUSINESS SYSTEMS, INC.
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1998
<TABLE>
<S> <C>
Revenue
Equipment and supplies $ 4,552,755
Service 1,847,830
-----------
6,400,585
COST OF REVENUE
Equipment and supplies 3,552,511
Service 1,234,879
-----------
4,787,390
-----------
Gross profit 1,613,195
SELLING AND GENERAL EXPENSE 2,027,955
-----------
Loss from operations (414,760)
OTHER INCOME (EXPENSE)
Interest and dividend income 122
Interest expense (16,363)
Other (15,627)
-----------
Other expense, net (31,868)
-----------
Net loss before income taxes (446,628)
INCOME TAX BENEFIT 163,242
-----------
NET LOSS $ (283,386)
-----------
-----------
BASIC AND DILUTED LOSS PER COMMON SHARE $ (198.17)
-----------
-----------
WEIGHTED AVERAGE SHARES OUTSTANDING 1,430
-----------
-----------
</TABLE>
SEE ACCOMPANYING NOTES
7
<PAGE>
BARBERA BUSINESS SYSTEMS, INC.
STATEMENT OF STOCKHOLDERS' DEFICIT
YEAR ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
Retained
earnings
Common Stock (accumulated Stockholders'
Shares Amount Deficit) Deficit
------ ------ -------- -------
<S> <C> <C> <C> <C>
Balance at July 1, 1997 1,430 $ 1,430 $ 145,900 $ 147,330
Net loss -- -- (283,386) (283,386)
--------- --------- --------- ---------
BALANCE AT JUNE 30, 1998 1,430 $ 1,430 $(137,486) $(136,056)
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
SEE ACCOMPANYING NOTES.
8
<PAGE>
BARBERA BUSINESS SYSTEMS, INC.
STATEMENT OF CASH FLOWS
YEAR ENDED JUNE 30, 1998
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(283,386)
Adjustments to reconcile net loss to net
cash provided by operating activities
Depreciation and amortization 64,788
Gain on sale of fixed assets (71,191)
Changes in assets and liabilities
Accounts and other receivables (61,552)
Prepaid assets (9,979)
Accounts payable and accrued expenses 233,027
Inventory 541,992
Other assets 7,738
Deferred income (30,502)
Income taxes recoverable (95,514)
Deferred income taxes (67,728)
---------
Net cash provided by operating activities 227,693
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets (39,894)
Proceeds from sale of fixed assets 139,698
---------
Net cash provided by investing activities 99,804
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from line-of-credit 225,296
Payment on line-of-credit (6,987)
Payments on notes payable (493,631)
---------
Net cash used in financing activities (275,322)
---------
NET INCREASE IN CASH 52,175
CASH AT BEGINNING OF YEAR 10,410
---------
CASH AT END OF YEAR $ 62,585
---------
---------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for interest $ 16,363
SUPPLEMENTAL SCHEDULE OF NONCASH ACTIVITIES:
Inventory acquired with notes payable $ 235,354
</TABLE>
SEE ACCOMPANYING NOTES.
9
<PAGE>
BARBERA BUSINESS SYSTEMS, INC.
NOTES TO AUDITED FINANCIALS
JUNE 30, 1998
NOTE A - SUMMARY OF ACCOUNTING POLICIES
A summary of the significant accounting policies applied in the
preparation of the accompany financial statements follows:
NATURE OF OPERATIONS
Barbera Business Systems, Inc. (the Company) sold, leased and serviced
office equipment and related supplies to end users principally in Maryland and
Washington, D.C.
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, the disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reported period. Actual
results could differ from those estimates.
ACCOUNTS RECEIVABLE
The Company performs ongoing credit evaluations of its customers and
maintains an allowance for potential credit losses. The allowance is based on an
experience factor and review of current accounts receivable. Uncollectible
accounts are written off against the allowance accounts when deemed
uncollectible. At June 30, 1998, management estimates that all of the accounts
receivable are collectible.
INVENTORY
Inventories consist of copy machines, facsimile machines, and
duplicators for sale, and parts and supplies used in the maintenance of office
machines and consumable supplies. Inventories are stated at lower of cost or
market using the first-in, first-out (FIFO) method.
PROPERTY, PLANT AND EQUIPMENT
The Company provides depreciation and amortization for financial
statement purposes over the estimated useful lives of the fixed assets using the
straight-line method. Expenditures for maintenance and repairs are charged to
expense in the period the charges are incurred. Property and equipment is
periodically reviewed to determine the recoverability by comparing comparability
to expected future cash flows.
10
<PAGE>
NOTE A - SUMMARY OF ACCOUNTING POLICIES - CONTINUED
PROPERTY, PLANT AND EQUIPMENT
The estimated service lives used in determining depreciation and
amortization are as follows:
<TABLE>
<S> <C>
Furniture and fixtures, production equipment and
equipment held for leases 5-7 years
Computer equipment and software 5 years
Leasehold improvements 5-10 years
Vehicles 5 years
</TABLE>
REVENUES
Revenue is recognized on equipment sales and supplies when a product is
shipped. Service revenue (under maintenance agreements) is recognized when
service is performed. Revenue from equipment leases is recognized under the
operating lease method over the lease term.
DEFERRED MAINTENANCE REVENUE
Service maintenance contracts are taken into income using the
straight-line method over the life of the related contract, generally twelve
months. Unearned maintenance income is deferred.
INCOME TAXES
Income taxes are provided based on the liability method for
financial reporting purposes. Deferred income taxes are provided for on
temporary differences in the bases of assets and liabilities which are
recognized in different periods for financial and tax reporting purposes.
FINANCIAL INSTRUMENTS
The Company's financial instruments include cash, accounts receivable,
accounts payable, and notes payable. The carrying amount of these financial
instruments approximate their fair market value.
ADVERTISING COSTS
Advertising costs are expensed as incurred. Total advertising and
promotion expense for the year ended June 30, 1998 amounted to $86,427.
EARNINGS PER SHARE
Basic earnings per share amounts have been computed based on the
weighted average number of common shares outstanding. Diluted earnings per share
amounts reflect the increase in weighted average number of common shares
outstanding that would result from the assumed conversion of dilutive
securities. For the year ended June 30, 1998, the Company did not have any
dilutive securities outstanding.
11
<PAGE>
NOTE B - INVENTORY
Inventory consists of the following as of June 30, 1998:
<TABLE>
<S> <C>
Office equipment for sale (See Note E) $312,281
Supplies and parts 241,434
----------------
Total Inventory $553,715
----------------
----------------
</TABLE>
NOTE C - LINE-OF-CREDIT
The Company has a $250,000 working capital line-of-credit. At June 30,
1998, the Company had outstanding $225,296 of advances under the line-of-credit.
Advances under the line-of-credit bear interest at 9.5%. The line-of-credit was
paid in full in July of 1998.
NOTE D - INCOME TAXES
The Company accounts for income taxes on the liability method, as
provided by Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes". Accordingly, liabilities and assets are recognized for the
deferred tax consequences of temporary differences between the book basis and
tax basis of assets and liabilities or carryforwards that will result in net
taxable or deductible amounts in future periods. Deferred tax expense or benefit
is the result of changes in the net asset or liability for deferred taxes. At
June 30, 1998, the Company had a deferred tax asset relating to net operating
loss carryforwards of approximately $67,728. The current year provision for
income taxes relates to the carryback of net operating losses of $95,515
combined with the recording of the net operating loss carryforwards of $67,728.
The net operating tax loss carryforward was generated in 1998 and expires in
2012. Utilization of net operating losses is subject to annual limitations due
to the ownership change limitations provided by the Internal Revenue Code and
similar state provisions. Management does not expect such limitations, if any,
to impact the ultimate utilization of the carryforwards.
The Company's provision for income taxes differs from the anticipated
United States Federal statutory rate. Differences between the statutory rate and
the Company's provisions are as follows at June 30:
<TABLE>
<S> <C>
Tax benefit at statutory rate (34)%
State tax differential (2)
Other (1)
----------
(37)%
----------
----------
</TABLE>
12
<PAGE>
NOTE E - NOTES PAYABLE
Notes payable consist of the following at June 30, 1998:
<TABLE>
<S> <C>
Note payable to CIT Group, due in monthly installments of $1,341, bearing no
interest, collateralized by inventory, due December 25, 1998. $ 8,046
Equipment financing notes payable to MITA Copystar America, Inc., due in monthly
installments ranging from $153 to $8,783, bearing no interest, collateralized by
inventory, due December 1998. 57,880
Equipment financing notes payable to Deutsche Financial Services, due in monthly
installments ranging from $325 to $6,875, collateralized by inventory, due at
various dates through October 1998. 67,120
Note payable to Joseph and Kathleen Barbara a related party, bearing interest at
10%, due May 2001. 4,500
--------
137,546
Less current maturities 133,046
--------
$ 4,500
--------
--------
</TABLE>
NOTE F - COMMITMENTS AND CONTINGENCIES
The Company conducts its operations in a leased facility under a noncancelable
operating lease expiring on December 31, 2001. The lease requires monthly
payments which approximate $7,100.
Vehicles operating leases, which expire at various dates through April
2000, require monthly payments which range from $331 to $450.
Rent expense for the year ended June 30, 1998 was $102,627.
The minimum rental commitments under operating leases are as follows:
<TABLE>
<CAPTION>
Year Ended June 30, Amount
------------------- ------
<S> <C>
1999 $100,890
2000 91,028
2001 88,903
2002 45,044
</TABLE>
The Company is party to a change of control agreement with one of its
employees. In the event of a change of control in the Company, the employee will
receive two times his/her annual earnings (approximately $84,000) (See Note H).
13
<PAGE>
NOTE G - EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
The Company maintains an Employees' Savings and Profit Sharing Plan to
which both the Company and eligible employees contribute. Company contributions
are voluntary and at the discretion of the Board of Directors. Annual
contributions by the Company cannot exceed $30,000 or 25% of annual
compensation, whichever is less. Profit sharing expense for the year ending June
30, 1998 was $11,351.
NOTE H - SUBSEQUENT EVENT
Effective July 1, 1998, the shareholders of the Company sold a 60%
interest in the outstanding common stock of the Company to Imtek Office
Solutions, Inc. (Imtek) for a cash payment of $1,725,119 and the agreement to
acquire the remaining 40% of the outstanding common stock of the Company for
200,000 shares of Imtek common stock.
14
<PAGE>
(b) Pro Forma Financial Information.
Introduction to Proforma Financial Statements
Unaudited Proforma Consolidated Balance Sheet
Unaudited Proforma Statement of Earnings
Notes to Unaudited Proforma Financial Statements
15
<PAGE>
IMTEK OFFICE SOLUTIONS, INC.
PRO FORMA UNAUDITED CONDENSED FINANCIAL STATEMENTS
The following pro forma unaudited condensed statements of earnings have been
prepared by taking the June 30, 1998 balance sheet and the statement of earnings
for the nine month period ended June 30, 1998 of Imtek Office Solutions, Inc.
(the "Company") and giving effect to the acquisition of Barbera Business
Systems, Inc. ("Barbera") by the Company as if it occurred as of October 1,
1997. The revenues and results of operations included in the following pro forma
unaudited condensed statements of earnings are not considered necessarily to be
indicative of anticipated results of operations for periods subsequent to the
transaction, nor are they considered necessarily to be indicative of the results
of operations for the periods specified had the transaction actually been
completed as of October 1, 1997.
These financial statements should be read in conjunction with the notes to the
pro forma unaudited condensed balance sheet and statements of earnings, which
follow.
16
<PAGE>
IMTEK OFFICE SOLUTIONS, INC. AND SUBSIDIARIES
UNAUDITED PROFORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Company Barbera Pro Forma Pro
Historical Historical Adjustments Forma
----------------------------------------------------------
ASSETS
CURRENT ASSETS
<S> <C> <C> <C> <C>
Cash $ 2,949,168 $ 62,585 $ 3,011,753
Escrow deposits 5,054,220 - 5,054,220
Accounts receivable 1,390,302 701,829 2,092,131
Other receivables 151,235 62,315 213,550
Inventory 1,641,309 553,715 2,195,024
Notes recievable - related parties - -
Notes receivable - other - -
Deposit on equipment - -
Deferred tax assets 82,124 82,124
Prepaid Expenses and other current assets 783,480 105,493 888,973
----------- ----------- ----------- -------------
Total current assets 12,051,838 1,485,937 - 13,537,775
PROPERTY AND EQUIPMENT - LESS ACCUMULATED
depreciation and amortization 1,880,888 89,775 1,970,663
OTHER NONCURRENT ASSETS 497,516 93,687 591,203
DEFERRED FINANCING COSTS 361,941 - 361,941
OTHER INTANGIBLE ASSETS 1,732,574 - 1,586,667 (a),(b) 3,319,241
----------- ----------- ----------- -------------
TOTAL ASSETS $16,524,757 $1,669,399 $1,586,667 $19,780,823
----------- ----------- ----------- -------------
----------- ----------- ----------- -------------
</TABLE>
17
<PAGE>
IMTEK OFFICE SOLUTIONS, INC. AND SUBSIDIARIES
UNAUDITED PROFORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Company Barbera Pro Forma Pro
Historical Historical Adjustments Forma
-------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
<S> <C> <C> <C> <C>
Current maturities of notes payable $560,055 $358,342 $ 18,397
Current maturities of obligations under capital lease 234,081 234,081
Accounts payable - trade 644,506 576,777 1,221,283
Accounts payable - related party 795,205 795,205
Accrued expenses 985,473 111,743 1,097,216
Customer escrow accounts 5,054,220 5,054,220
Deferred revenue 168,153 754,093 922,246
Income taxes payable 434,804 434,804
Notes payable - related party -
----------- ----------- ----------- -------------
TOTAL CURRENT LIABILITIES 8,876,497 1,800,955 - 10,677,452
NOTES PAYABLE 3,502,506 4,500 3,507,006
OBLIGATIONS UNDER CAPITAL LEASE 988,578 988,578
DEFERRED TAX LIABILITY 65,490 65,490
PUT OPTION OBLIGATION 335,695 335,695
COMMITMENTS AND CONTINGECIES
- -
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock 674,000 - 674,000
Common Stock 8 1,430 1,438
Additional paid in capital 1,420,548 1,700,000 (a) 3,120,548
Retained earnings 661,435 (137,486) (113,333) (b) 410,616
----------- ----------- ----------- -------------
Total stockholders' equity 2,755,991 (136,056) 1,586,667 4,206,602
----------- ----------- ----------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $16,524,757 $1,669,399 $1,586,667 $19,780,823
----------- ----------- ----------- -------------
----------- ----------- ----------- -------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
IMTEK OFFICE SOLUTIONS, INC. AND SUBSIDIARIES
UNAUDITED PROFORMA STATEMENT OF EARNINGS
(Unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Nine Months Ended June 30, 1998
Company Barbera Pro Forma Pro
Historical Historical Adjustments Forma
--------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue
Equipment and supplies $ 5,854,400 $ 4,800,439 $ -- $ 10,654,839
Merchant banking 21,088,242 -- -- 21,088,242
----------- ----------- ---------- ------------
26,942,642 4,800,439 -- 31,743,081
Cost of revenue
Equipment related costs 3,474,636 3,590,543 -- 7,085,179
Merchant banking 17,943,694 -- -- 17,943,694
----------- ----------- ---------- ------------
Total cost of fees and sales 21,418,330 3,590,543 -- 25,008,873
----------- ----------- ---------- ------------
Gross profit 5,524,312 1,209,896 -- 6,734,208
Selling and General Expense 4,401,575 1,520,966 113,333(a) 8,035,875
----------- ----------- ---------- ------------
Operating income (loss) 1,122,737 (311,070) (113,333) 698,334
Interest expense (income) 121,989 23,901 145,890
----------- ----------- ---------- ------------
Income (loss) before provision for income taxes 1,000,748 (334,971) (113,333) 552,444
Provision for income taxes 397,680 (122,432) -- 275,249
----------- ----------- ---------- ------------
NET income (loss) 603,068 (212,540) (113,333) 277,195
PREFERRED STOCK DIVIDENDS 5,055 -- -- 5,055
----------- ----------- ---------- ------------
INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 598,013 $(212,540) $(113,333) $ 272,140
----------- ----------- ---------- ------------
----------- ----------- ---------- ------------
Earnings (loss) per share:
Basic $ 0.08 $ 0.04
Diluted $ 0.08 $ 0.04
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 7,412,033 7,412,033
Diluted 7,419,789 7,419,789
</TABLE>
19
<PAGE>
NOTES TO PRO FORMA STATEMENT OF EARNINGS
(a) To record the goodwill associated with the transaction.
(b) To amortize the goodwill associated with the transaction based upon a
fifteen-year life.
20
<PAGE>
(c) Exhibits.
<TABLE>
<CAPTION>
Exhibit Index
Number Description
------ -----------
<S> <C>
27 Financial Data Schedule
99 Additional Exhibits
Stock Purchase Agreement And Plan of Merger, as fully
set forth in the Current Report on Form 8-K filed by
Registrant on August 13, 1998 as Exhibit 99.1 to such
Form 8-K, which is hereby incorporated by reference.
</TABLE>
21
<PAGE>
SIGNATURES
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 hereunto duly authorized.
IMTEK OFFICE SOLUTIONS, INC.
(Registrant)
Date: June 15, 1999 BY: /s/ Edwin C. Hirsch
---------------------------------------
Edwin C. Hirsch, President
22
