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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934March 30, 2000 (March 17, 2000)
Date of Report (Date of earliest event reported)ELECTRONIC PROCESSING, INC.
(Exact name of Registrant as specified in its charter)
Missouri
0-22081
48-1056429(State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification Number)
501 Kansas Avenue
Kansas City, KS 66105
(Address of principal executive offices)(913) 621-9500
(Registrant's telephone number, including area code)
Item 7. Financial Statements and Exhibits.
(a) and (b) Financial Statements and Pro Forma Financial Statements.
On March 17, 2000, the Registrant acquired certain assets from PHiTECH, Inc. ("PHiTECH") of San Francisco, California. The aggregate purchase price for PHiTECH was $6,111,585, of which $5,314,356 was paid in cash and $797,229 is deferred and is payable over 49 months, beginning the 13th month after the date of acquisition. See Note 3 of the Notes to Financial Statements included with the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2000, for additional information concerning this acquisition.
The following financial statements for the acquired business are filed with this Amendment:
1. PHiTECH, Inc. Accountants' Report and Financial Statements as of December 31, 1999.
2. Pro Forma Condensed Combined Balance Sheet as of December 31, 1999.
3. Pro Forma Condensed Combined Income Statement for the year ended December 31, 1999.
4. Notes to Pro Forma Condensed Combined Financial Information.
1
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.
ELECTRONIC PROCESSING, INC. | ||||
Date: May 26, 2000 |
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By: |
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/s/ TOM W. OLOFSON |
Name: | Tom W. Olofson | |||
Title: | Chairman of the Board, Chief Executive Officer and Director |
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PHiTECH, Inc.
Accountants' Report and Financial Statements
December 31, 1999
[BKD LOGO]
PHiTECH, INC.
DECEMBER 31, 1999
CONTENTS
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INDEPENDENT ACCOUNTANTS' REPORT |
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1 |
FINANCIAL STATEMENTS |
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Balance Sheet | 2 | |
Statement of Income | 3 | |
Statement of Changes in Stockholders' Equity (Deficit) | 4 | |
Statement of Cash Flows | 5 | |
Notes to Financial Statements | 6 |
Independent Accountants' Report
Board of Directors
PHiTECH, INC.
San Francisco, California
We have audited the accompanying balance sheet of PHiTECH, INC. as of December 31, 1999, and the related statements of income, changes in stockholders' equity (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 audits.
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 PHiTECH, INC. as of December 31, 1999, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
Kansas
City, Missouri
April 27, 2000
PHiTECH, INC.
BALANCE SHEET
DECEMBER 31, 1999
CURRENT ASSETS | |||
Cash | $ | 127,754 | |
Accounts receivable, less allowance for doubtful accounts of $26,010 | 447,420 | ||
Prepaid expenses | 23,800 | ||
Total Current Assets | 598,974 | ||
PROPERTY AND EQUIPMENT | |||
Computer equipment | 127,626 | ||
Office equipment | 21,128 | ||
Automobiles | 9,288 | ||
158,042 | |||
Less accumulated depreciation | 87,831 | ||
70,211 | |||
$ | 669,185 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES | ||||
Accounts payable and accrued expenses | $ | 96,880 | ||
Capital lease obligation | 16,053 | |||
Customer deposits | 249,350 | |||
Deferred revenue | 554,623 | |||
Payable to stockholder | 1,072,824 | |||
Total Current Liabilities | 1,989,730 | |||
DEFERRED REVENUE | 129,600 | |||
CAPITAL LEASE OBLIGATION, Net of current portion | 24,587 | |||
STOCKHOLDERS' EQUITY (DEFICIT) | ||||
Common stock, no par value; 1,000,000 shares authorized, 200,000 issued and outstanding | 193,010 | |||
Accumulated deficit | (1,667,742 | ) | ||
(1,474,732 | ) | |||
$ | 669,185 | |||
See Notes to Financial Statements
2
PHiTECH, INC.
STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1999
OPERATING REVENUES | $ | 2,036,926 | |
COST OF REVENUES | |||
Development and support | 714,500 | ||
Depreciation and amortization | 25,086 | ||
739,586 | |||
GROSS PROFIT | 1,297,340 | ||
OPERATING EXPENSES | |||
General and administrative | 871,711 | ||
Depreciation and amortization | 1,439 | ||
873,150 | |||
INCOME FROM OPERATIONS | 424,190 | ||
INTEREST EXPENSE | 60,369 | ||
NET INCOME | $ | 363,821 | |
NET INCOME PER SHARE INFORMATION | |||
Basic and diluted | $ | 1.82 | |
See Notes to Financial Statements
3
PHiTECH, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
YEAR ENDED DECEMBER 31, 1999
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Total |
Common Stock |
Accumulated Deficit |
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BALANCE (DEFICIT), JANUARY 1, 1999 | $ | (1,838,553 | ) | $ | 193,010 | $ | (2,031,563 | ) | ||
Net income | 363,821 | 363,821 | ||||||||
BALANCE (DEFICIT), DECEMBER 31, 1999 | $ | (1,474,732 | ) | $ | 193,010 | $ | (1,667,742 | ) | ||
See Notes to Financial Statements
4
PHiTECH, INC.
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1999
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net income | $ | 363,821 | ||
Items not requiring (providing) cash: | ||||
Depreciation and amortization | 26,525 | |||
Provision for doubtful accounts | 26,010 | |||
Capitalized interest on shareholder note payable | 49,810 | |||
Changes in: | ||||
Accounts receivable | (203,236 | ) | ||
Prepaid expenses | (16,234 | ) | ||
Accounts payable and accrued expenses | (64,414 | ) | ||
Customer deposits | 249,350 | |||
Deferred revenue | (29,438 | ) | ||
Net cash provided by operating activities | 402,194 | |||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Purchase of property and equipment | (41,318 | ) | ||
Net cash used in investing activities | (41,318 | ) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Principal payments under capital lease | (9,693 | ) | ||
Payment under line of credit agreement | (40,000 | ) | ||
Payment on loan from stockholder | (160,000 | ) | ||
Payment of checks issued in excess of available balance | (23,429 | ) | ||
Net cash used in financing activities | (233,122 | ) | ||
INCREASE IN CASH | 127,754 | |||
CASH, BEGINNING OF YEAR | 0 | |||
CASH, END OF YEAR | $ | 127,754 | ||
ADDITIONAL CASH FLOW INFORMATION | ||||
Noncash Investing and Financing Activities | ||||
Computer equipment acquired under capital lease | $ | 50,333 | ||
Additional Cash Payment Information | ||||
Interest paid | $ | 6,829 | ||
See Notes to Financial Statements
5
PHiTECH, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
PHiTECH, Inc. (the "Company") is a middleware and applications software company engaged in developing, marketing, and supporting its products in the financial, retail, e-commerce and telecommunications markets. The Company operates in a single segment and has concentrated its efforts in the telecommunications marketplace with intelligent switch and enhanced services technologies and has built a worldwide customer base consisting of major banks, financial institutions, retail payment processors, and telecommunications companies.
The Company's current DataExpress product is designated to secure, format and automatically route data in a fault tolerant environment over the internet and private networks using a variety of web-based and legacy communications protocols. The Company also provides value-added services including systems integration, consulting and user education.
On March 17, 2000, the Company sold substantially all of its assets for cash, a note and assumption of substantially all liabilities including amounts due the principal stockholder (see Note 8).
Revenue Recognition
The Company's revenues are derived nearly exclusively from its principal software product, DataExpress. Licensing fees are recorded as revenue following delivery, installation and training. Consulting revenue is recognized in the period in which the services are performed. Maintenance fees are collected in advance and recognized as revenue in the period earned. Enhancement revenue, representing product enhancements for customers under separate contractual arrangements, is recognized using the percentage of completion method of accounting. These contractual agreements are negotiated individually and usually include a fixed fee arrangement. The Company periodically evaluates its progress on each contract and provides for losses, if any, at the time estimated costs to complete a project exceed expected revenues.
Software Development Costs
Certain internal software development costs incurred in the creation of computer software products are capitalized once technological feasibility has been established. Prior to the completion of a detail program design or working model, development costs are expensed. Capitalized costs are amortized based on estimated current and future revenue for each product with an annual minimum equal to the straight-line amortization over the remaining estimated economic life of the product, not to exceed five years.
The Company's current product, DataExpress, was initially developed and capitalized through 1993. The costs of initial development are fully amortized and were removed from the records of the Company in prior periods. The Company expenses the cost of annual enhancements and maintenance releases as incurred.
Research and Development Costs
Research and development costs are charged to operations when incurred and are included in cost of revenues. The Company is currently in the process of developing a new Java TM based product that will be
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offered as a library of reusable software components that can be integrated into third-party systems and as a finished application intended to complement DataExpress. Technological feasibility of this product has not yet been established, so the costs related to this product have been expensed as incurred. The amount of research and development expenses related to this product in 1999 amounted to approximately $190,000.
Property and Equipment
Property and equipment are depreciated on an accelerated basis over the estimated useful life of each asset.
Income Taxes
The Company's stockholders have elected to have the Company's income taxed as an "S" Corporation under provisions of the Internal Revenue Code and a similar section of the state income tax law; therefore, taxable income or loss is reported to the individual stockholders for inclusion in their respective tax returns. No provision for federal and state income taxes is included in these statements.
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.
Net Income Per Share
The Company had a single class of common stock outstanding during all of 1999. The Company has no dilutive instruments outstanding and there were no purchases or sales of stock during the year. Net income per share has been computed based on the number of shares of common stock outstanding during the year.
NOTE 2: NOTES PAYABLE
The Company has a revolving line of credit agreement with a bank with a maturity date of October 2000. The agreement is secured by the personal guarantee of the Company's principal stockholder and marketable securities owned by the stockholder. There was no balance outstanding under this obligation as of December 31, 1999.
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NOTE 3: CAPITAL LEASES
The Company leases certain computer equipment under capital leases expiring in 2002. Aggregate annual payments on capital lease obligations at December 31, 1999 are as follows:
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2000 | $ | 20,034 | |
2001 | 20,034 | ||
2002 | 6,678 | ||
46,746 | |||
Less amount representing interest | 6,106 | ||
Present value of future minimum lease payments | 40,640 | ||
Less current maturities | 16,053 | ||
Noncurrent portion |
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24,587 |
Property and equipment include the following property acquired under capital leases:
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Computer equipment | $ | 50,333 | |
Less accumulated depreciation | 11,185 | ||
$ | 39,148 | ||
NOTE 4: OPERATING LEASE
The Company has a noncancellable operating lease for office space, which expires in September 2001. The lease requires the Company to pay all executory costs including property taxes, utilities, maintenance and insurance. The Company has the right to renew the lease for another five-year term under the same terms and conditions.
Future minimum lease payments as of December 31, 1999 are as follows:
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2000 | $ | 84,189 | |
2001 | 88,381 | ||
2002 | 84,539 | ||
$ | 257,109 | ||
Rental expense under this lease amounted to $79,997 in 1999.
NOTE 5: SIGNIFICANT CUSTOMER
The Company's revenues are derived principally from the licensing of software and providing services to a relatively small number of customers. During 1999, revenues derived from one customer aggregated 31% of total revenues. Amounts receivable from this customer at December 31, 1999 totaled $92,295.
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NOTE 6: RELATED PARTY TRANSACTIONS AND PAYABLE TO STOCKHOLDER
The Company has various arrangements with the Company's principal stockholder. The following schedule summarizes these arrangements and the amounts due to this stockholder as of December 31, 1999:
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Notes payable | $ | 335,000 | |
Accrued interest | 319,365 | ||
Accrued compensation | 418,459 | ||
$ | 1,072,824 | ||
The notes payable represent a series of revolving lines of credit between the Company and the stockholder. These notes are secured by substantially all of the business assets of the Company. The notes originated between 1991 and 1993, have current contractual maturity dates through October 2000, and carry a fixed interest rate of 12%. Interest expense accrued but not paid on these obligations during 1999 amounted to $49,810. The fair value of notes payable to stockholders approximates the carrying value.
Accrued compensation due to the stockholder represents compensation earned in periods prior to January 1, 1999. The stockholder has agreed to defer payment until the Company has available cash resources.
NOTE 7: PROFIT SHARING PLAN
The Company has a 401(k) plan covering all qualified employees. The Company makes discretionary matches of up to 50% of the first 15% of employee contributions to a limit of 6% of the employee's compensation. The Company also has the option of making discretionary contributions. Employees are fully vested in employer contributions after six years. Contributions amounted to $17,653 for the year ended December 31, 1999.
NOTE 8: SUBSEQUENT EVENT
On March 17, 2000, the Company sold substantially all of its net assets to Electronic Processing Inc. ("EPI") for cash, a note and assumption of substantially all of the Company's liabilities, including amounts due to the principal stockholder.
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[BKD LOGO]
ELECTRONIC PROCESSING, INC.
PRO FORMA FINANCIAL INFORMATION
(Unaudited)
ELECTRONIC PROCESSING, INC.
PRO FORMA CONDENSED COMBINING BALANCE SHEET
December 31, 1999
(Unaudited)
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Electronic Processing Inc. |
PHiTECH Inc. |
Combined |
Pro forma Adjustments |
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Pro forma Consolidated |
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CURRENT ASSETS | |||||||||||||||||
Cash and cash equivalents | $ | 1,642,848 | $ | 127,754 | $ | 1,770,602 | $ | (1,546,584 | ) | 1.a.,c. | |||||||
(224,018 | ) | 1.d. | |||||||||||||||
Short-term investments | 3,850,000 | 3,850,000 | (3,850,000 | ) | 1.a. | ||||||||||||
Accounts receivable, trade, net of | |||||||||||||||||
allowance for doubtful accounts | 1,954,806 | 447,420 | 2,402,226 | $ | 2,402,226 | ||||||||||||
Other | 360,753 | 23,800 | 384,553 | 384,553 | |||||||||||||
7,808,407 | 598,974 | 8,407,381 | (5,620,602 | ) | 2,786,779 | ||||||||||||
PROPERTY AND EQUIPMENT, net |
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6,309,520 |
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70,211 |
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6,379,731 |
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(5,323 |
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1.a. |
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6,374,408 |
SOFTWARE DEVELOPMENT COSTS, net |
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2,252,917 |
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2,252,917 |
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361,695 |
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1.a. |
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2,614,612 |
OTHER ASSETS |
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Excess of cost over fair value of net assets acquired | 9,599,893 | 9,599,893 | 5,898,060 | 1.a. | 15,497,953 | ||||||||||||
Other | 251,417 | 251,417 | 50,000 | 1.a. | 301,417 | ||||||||||||
TOTAL ASSETS | $ | 26,222,154 | $ | 669,185 | $ | 26,891,339 | $ | 683,830 | $ | 27,575,169 | |||||||
CURRENT LIABILITIES |
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Current maturities of long-term debt | $ | 42,406 | $ | 16,053 | $ | 58,459 | $ | 58,459 | |||||||||
Accounts payable and accrued expenses | 1,351,147 | 96,880 | 1,448,027 | $ | (23,013 | ) | 1.a.,c. | 1,425,014 | |||||||||
Other | 2,067,566 | 803,973 | 2,871,539 | 2,871,539 | |||||||||||||
3,461,119 | 916,906 | 4,378,025 | (23,013 | ) | 4,355,012 | ||||||||||||
LONG TERM DEBT |
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66,894 |
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1,097,411 |
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1,164,305 |
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797,229 |
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1.a. |
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984,171 |
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95,460 |
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1.a.,b. |
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(1,072,823 | ) | 1.a.,c. | |||||||||||||||
DEFERRED REVENUE |
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1,176,458 |
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129,600 |
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1,306,058 |
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1,306,058 |
DEFERRED INCOME TAXES |
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592,700 |
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592,700 |
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592,700 |
STOCKHOLDERS' EQUITY |
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20,924,983 |
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(1,474,732 |
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19,450,251 |
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1,474,732 |
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1.a. |
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20,337,228 |
(224,018 | ) | 1.d. | |||||||||||||||
(363,737 | ) | 1.a. | |||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 26,222,154 | $ | 669,185 | $ | 26,891,339 | $ | 683,830 | $ | 27,575,169 | |||||||
ELECTRONIC PROCESSING, INC.
PRO FORMA CONDENSED COMBINING STATEMENT OF INCOME
Year ended December 31, 1999
(Unaudited)
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Electronic Processing Inc. |
PHiTECH Inc. |
Combined |
Pro forma Adjustments |
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Pro forma Consolidated |
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OPERATING REVENUES | $ | 14,820,400 | $ | 2,036,926 | $ | 16,857,326 | $ | 16,857,326 | ||||||||
OPERATING EXPENSES |
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General and administrative | 9,902,506 | 1,586,211 | 11,488,717 | 11,488,717 | ||||||||||||
Depreciation and amortization | 2,381,732 | 26,525 | 2,408,257 | $ | 625,132 | 2.c. | 3,033,389 | |||||||||
Acquisition-related expenses | 315,197 | 315,197 | 315,197 | |||||||||||||
Loss on disposal of computer equipment | 230,069 | 230,069 | 230,069 | |||||||||||||
12,829,504 | 1,612,736 | 14,442,240 | 625,132 | 15,067,372 | ||||||||||||
INCOME (LOSS) FROM OPERATIONS | 1,990,896 | 424,190 | 2,415,086 | (625,132 | ) | 1,789,954 | ||||||||||
OTHER INCOME (EXPENSE) | 449,094 | (60,369 | ) | 388,725 | (296,458 | ) | 2.e. | 92,267 | ||||||||
INCOME (LOSS) BEFORE INCOME TAXES | 2,439,990 | 363,821 | 2,803,811 | (921,590 | ) | 1,882,221 | ||||||||||
INCOME TAX PROVISION (BENEFIT) | 944,000 | 944,000 | (356,551 | ) | 2.f. | 728,207 | ||||||||||
140,758 | 2.b. | |||||||||||||||
NET INCOME (LOSS) | $ | 1,495,990 | $ | 363,821 | $ | 1,859,811 | $ | (705,797 | ) | $ | 1,154,014 | |||||
NET INCOME PER COMMON SHARE |
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Basic | 0.32 | 0.25 | ||||||||||||||
Diluted | 0.31 | 0.24 | ||||||||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
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Basic | 4,636,822 | 4,636,822 | ||||||||||||||
Diluted | 4,780,810 | 4,780,810 | ||||||||||||||
ELECTRONIC PROCESSING, INC.
NOTES TO PRO FORMA CONDENSED COMBINING
FINANCIAL STATEMENTS
(Unaudited)
On March 3, 2000, the Company entered into an asset purchase agreement with PHiTECH, Inc., ("PHiTECH"), for cash and the issuance of a long-term obligation. Certain of the cash paid was applied directly to the payment of certain of PHiTECH's liabilities. This transaction was closed on March 17, 2000.
- 1.
- The
pro forma condensed combining balance sheet of the Company and PHiTECH as of December 31, 1999 has been prepared as if these transactions occurred on December 31,
1999 in accordance with the following assumptions:
- a.
- The transaction is accounted for utilizing the purchase method of accounting whereby the net assets acquired and liabilities assumed are adjusted to their fair values. The components of the transaction assumed in the pro forma condensed combining balance sheet are as follows:
Cash paid, including direct costs of $56,074 | $ | 5,492,043 | ||||
Present value of $1,000,000 obligation, discounted at 9% | 797,229 | |||||
Present value of consideration given | 6,289,272 | |||||
Less fair value of net assets acquired |
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Historical negative book value of PHiTECH | $ | (1,474,732 | ) | |||
Liabilities paid concurrent with acquisition | 1,095,835 | |||||
Negative historical book value of net assets acquired | (378,897 | ) | ||||
Adjustments to reflect fair value of assets acquired |
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In-process research and development | 363,737 | |||||
Computer equipment | (5,323 | ) | ||||
Software development costs | 361,695 | |||||
Noncompete agreement | 50,000 | 391,212 | ||||
$ | 5,898,060 | |||||
- b.
- The
acquisition will be financed from the Company's cash resources with any shortfall being funded with borrowings on the Company's line of credit.
- c.
- As
a part of the purchase agreement, the Company agreed to pay PHiTECH's accrued payroll, vacation, certain accounts payable, and notes payable to a bank and to PHiTECH's principal
shareholder. Payment of these liabilities aggregating $1,095,835 is assumed to have occurred on December 31, 1999.
- d.
- The Company incurred certain non-direct costs related to the acquisition of PHiTECH. These costs were expensed as incurred, in accordance with generally accepted accounting principles related to the purchase method of accounting.
- 2.
- The
pro forma condensed statement of operations have been prepared in accordance with the following assumptions:
- a.
- The acquisition occurs on January 1, 1999 and is accounted for using the purchase method of accounting. Accordingly, the operations of PHiTECH are included in the pro forma consolidated results of operations from January 1, 1999 forward.
- b.
- Income
taxes on the 1999 results of operations for PHiTECH, an S-Corporation, have been calculated using the Company's effective 1999 tax rate of 38.7%.
- c.
- The net change in amortization expense is comprised of the following:
Amortization expense of excess of cost over fair value of net assets acquired | $ | 612,632 | |
Amortization expense of the non-compete agreement | 12,500 | ||
Increase in amortization expense | $ | 625,132 | |
- d.
- The
Company incurred non-direct costs related to the acquisition of PHiTECH in the amount of $224,018. In addition, $363,737 of the acquisition price was allocated to In-process
Research and Development Costs.
- e.
- Interest income has been reduced in proportion to the decrease in cash and investments resulting from the purchase. Interest expense has been increased for the accretion of the discount on the $1,000,000 obligation incurred with the acquisition.
- f.
- The income tax effect of these adjustments is calculated using the Company's effective 1999 income tax rate of 38.7%.
The excess of cost over fair value of net assets acquired is being amortized using the straight-line method over ten years.
The non-compete agreement is being amortized using the straight-line method over four years.
Interest expense of PHiTECH has been eliminated due to the notes payable to a bank and PHiTECH's principal shareholder being paid-off by the Company as of the acquisition date.
The pro forma condensed combining financial statements, which have been prepared by the Company's management based upon the historical financial statements of the Company and PHiTECH, INC. should be read in conjunction with the accompanying audited financial statements and notes thereto of PHiTECH, Inc. contained elsewhere in this document. The pro forma condensed combining financial statements are not necessarily indicative of the financial position or the results of operations of the combined entities as they may be in the future or as they might have been if the proposed transaction had been in effect on the dates indicated.
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SIGNATURESPHiTECH, INC. DECEMBER 31, 1999 CONTENTS
PHiTECH, INC. BALANCE SHEET DECEMBER 31, 1999
ASSETS
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
PHiTECH, INC. STATEMENT OF INCOME YEAR ENDED DECEMBER 31, 1999
PHiTECH, INC. STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) YEAR ENDED DECEMBER 31, 1999
PHiTECH, INC. STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 1999
ELECTRONIC PROCESSING, INC. PRO FORMA CONDENSED COMBINING BALANCE SHEET December 31, 1999 (Unaudited)
ELECTRONIC PROCESSING, INC. PRO FORMA CONDENSED COMBINING STATEMENT OF INCOME Year ended December 31, 1999 (Unaudited)