UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)______June 16,1998____
Commission File No. 0-5265
SCAN-OPTICS, INC.
(Exact name of registrant as specified in its charter)
Delaware 06-0851857
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
169 Progress Drive, Manchester, CT 06040
(Address of principal executive offices) Zip Code
(860) 645-7878
(Registrant's telephone number, including area code)
Explanatory Note
The Company is filing this Form 8-K/A to amend Item 7, Financial Statements and
Exhibits, of Form 8-K, filed on June 30, 1998, to include historical financial
statements of the business acquired for the interim period that were not
available at the time of filing.
<PAGE>
<TABLE>
<CAPTION>
SOUTHERN COMPUTER SYSTEMS, INC.
Balance Sheet
(Unaudited)
Assets June 15, 1998
-------------
<S> <C>
Current Assets:
Cash $ 106,000
Trade accounts receivable, less allowance for doubtful
accounts of $758,000 and $50,000 at June 15, 1998
and December 31, 1997, respectively 311,000
Inventory
Prepaid expenses 9,000
Other current assets 16,000
-------------
Total current assets 442,000
Equipment, furniture and fixtures, net of accumulated
depreciation of $932,000 and $866,000 at June 15, 1998
and December 31, 1997, respectively 331,000
Investment in Imaging Business Machines, LLC 10,000
Other assets 82,000
-------------
$ 865,000
=============
Liabilities and Stockholders' Equity
Current Liabilities:
Bank overdraft $
Borrowing under the line of credit 871,000
Notes payable to bank 508,000
Notes payable to Scan-Optics,Inc. 486,000
Current portion of long-term debt
Accounts payable 526,000
Accrued expenses 81,000
Deferred revenue 113,000
Other current liabilities 103,000
-------------
Total Current Liabilities 2,688,000
Long-term debt, excluding current portion
-------------
Total Liabilities 2,688,000
Stockholders' equity:
Common stock, $1 par value, authorized and
issued 1,000 shares 1,000
Additional paid-in capital 13,000
Retained earnings (1,632,000)
-------------
(1,618,000)
Cost of 516-2/3 shares of common stock held in
treasury (205,000)
-------------
Net stockholders' equity (1,823,000)
-------------
$ 865,000
=============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SOUTHERN COMPUTER SYSTEMS, INC.
Statements of Operations
(Unaudited)
From January 1, 1998
to June 15, 1998
--------------------
<S> <C>
Net revenues $ 1,761,000
Costs and expenses:
Costs of revenues 2,899,000
Sales and marketing 356,000
Research and development 371,000
General and administrative 247,000
-------------
Total costs and expenses 3,873,000
-------------
(Loss) from operations (2,112,000)
Other income (expense):
Interest expense (41,000)
Other expense (649,000)
-------------
Total other expense (690,000)
-------------
Net (loss) $ (2,802,000)
=============
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SOUTHERN COMPUTER SYSTEMS, INC.
Statement of Cash Flows
(Unaudited)
From January 1, 1998
to June 15, 1998
-------------------
<S> <C>
Reconciliation of net (loss) to net cash provided by
(used in) operating activities:
Net (loss) $ (2,802,000)
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 58,000
Decrease in trade accounts receivable 1,855,000
Decrease in inventory 69,000
Decrease in prepaid expenses 36,000
Decrease in other assets 49,000
Increase in accounts payable 42,000
Decrease in deferred revenue (109,000)
Increase in other current liabilities 103,000
-------------
Total adjustments 2,103,000
-------------
Net cash used in operating activities (699,000)
-------------
Cash flows from investing activities:
Purchase of equipment, furniture and fixtures (84,000)
-------------
Net cash used in investing activities (84,000)
Cash flows from financing activities:
Decrease in bank overdraft (207,000)
Stockholders' distributions (156,000)
Net increase in bank credit line borrowing 786,000
Principal payments on long-term debt (35,000)
Note payable to Scan-Optics, Inc. 486,000
-------------
Net cash provided by financing activities 874,000
-------------
Net increase in cash 91,000
Cash at beginning of year 15,000
-------------
Cash at end of year $ 106,000
=============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Note 1 - Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the period from January 1, 1998 to June 15, 1998 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1998. For further information, refer to the Scan-Optics, Inc.,
Form 10Q/A, filed September 14, 1998, for the period ended June 30, 1998.
Note 2 - Notes Payable and Long-term Debt
The Company has a $750,000 line of credit with the National Bank of Commerce,
which is secured by the Company's trade accounts receivable and inventories and
the personal guarantee of certain Company officers and shareholders. Interest
on the outstanding balance accrues at the bank's prime rate (8.5 percent at June
15, 1998 and 8.0 percent at December 31, 1997). Borrowings under the line of
credit totaled $705,775 and $85,054 at June 15, 1998 and December 31, 1997,
respectively. The line of credit matures on July 2, 1998.
The Company has a term loan with the National Bank of Commerce which bears
interest at the bank's prime rate (8.5 percent at June 15, 1998 and 8.0 percent
at December 31, 1997). The balance of the term loan is $12,601 at June 15,
1998, maturing on May 2, 1999.
The Company has two other lines of credit with National Bank of Commerce which
bear interest at 8.5 percent at June 15, 1998 and 9.0 percent at December 31,
1997, and are secured by certain equipment and fixtures, trade accounts
receivable, inventories and the personal guarantees of certain Company officers.
The balances at June 15, 1998 are $150,000 maturing July 2, 1998, and $500,045
maturing May 2, 1998.
Note 3 - Income Taxes
The Company, with the consent of its stockholders, elected under the Internal
Revenue Code to be taxed as an S Corporation effective March 1, 1987. The
Company is not liable for income taxes as the stockholders of an S Corporation
are taxed on their proportionate share of the Company's taxable income.
<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 thereunto duly authorized.
SCAN-OPTICS, INC.
(Registrant)
Date June 16, 1999 /ss/
James C. Mavel
Chairman, Chief Executive Officer,
President and Director
Date June 16, 1999 /ss/
Michael J. Villano
Chief Financial Officer,
Vice President and Treasurer
