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):
March 12, 2002
CAMBEX CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts O-6933 04-2442959
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
360 Second Avenue
Waltham, Massachusetts 02451
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 890-6000
Item 2. Acquisition or Disposition of Assets
On March 12, 2002, Cambex Corporation completed the acquisition of Super PC
Memory, Inc., pursuant to the terms of the Stock Purchase and Sale Agreement
dated as of January 31, 2002.
Effective as of March 12, 2002, Super PC Memory, Inc. is a wholly-owned
subsidiary of Cambex Corporation. The sellers received 560,000 shares of
Cambex Corporation common stock and will receive fifteen percent (15%) of
Super PC Memory, Inc.'s gross profit for the period from March 12, 2002
through December 31, 2004, payable in installment payments pursuant to the
terms of the Stock Purchase and Sale Agreement.
The Company filed a Current Report on Form 8-K on March 27, 2002 to announce
the Stock Purchase and Sale Agreement. The Company is filing this Amendment
to the Form 8-K in order to include financial statements and pro forma
financial information required by Item 7 of Form 8-K.
The Stock Purchase and Sale Agreement was included as Exhibit 2.1 to the
Company's Current Report on Form 8-K dated March 27, 2002, and is
incorporated herein by reference. A copy of Cambex Corporation's press
release announcing the completion of the acquisition was included as Exhibit
99 to the Company's Current Report on Form 8-K dated March 27, 2002, and is
incorporated herein by reference. The foregoing description of such documents
is qualified in its entirety by reference to such Exhibits.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired.
1. Independent Auditors' Report
2. Balance Sheet as of December 31, 2001
3. Statements of Operations for the years ended December 31, 2001
and 2000
4. Statement of Changes in Stockholders' Equity for the years ended
December 31, 2001 and 2000
5. Statement of Cash Flows for the years ended December 31, 2001
and 2000
6. Notes to Financial Statements as of December 31, 2001
(b) Pro Forma Financial Information.
1. Unaudited Pro Forma Combined Financial Information
2. Unaudited Pro Forma Combined Balance Sheet as of December 31, 2001
3. Unaudited Pro Forma Combined Statement of Operations for the year ended
December 31, 2001
4. Notes to Pro Forma Combined Financial Information
2
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of:
Super PC Memory, Inc.
We have audited the accompanying balance sheet of Super PC Memory, Inc. as of
December 31, 2001 and the related statements of operations, change in
stockholders' equity and cash flows for the years ended December 31, 2001 and
2000. 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 audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatements. 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
audits provide 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 Super PC Memory, Inc. as
of December 31, 2001, and the results of its operations and its cash flows
for the years ended December 31, 2001 and 2000, in conformity with accounting
principles generally accepted in the United States of America.
/s/ WEINBERG & COMPANY, P.A.
WEINBERG & COMPANY, P.A.
Los Angeles, California
March 22, 2002
3
SUPER PC MEMORY, INC.
BALANCE SHEET
AS OF DECEMBER 31, 2001
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 54,259
Accounts receivable, net 1,795,882
Inventory 830,487
Prepaid expenses 18,006
Total Current Assets 2,698,634
PROPERTY AND EQUIPMENT - NET 11,880
OTHER ASSETS
Deposits 10,710
Goodwill, net 302,907
Other assets 7,800
Total Other Assets 321,417
TOTAL ASSETS $ 3,031,931
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Cash overdraft $ 240,672
Line of credit payable 1,191,988
Accounts payable 617,695
Accrued expenses 180,497
Total Current Liabilities 2,230,852
LONG-TERM LIABILITIES
Note payable - stockholder 401,863
STOCKHOLDERS' EQUITY
Common stock, no par value, 100,000 shares authorized,
54,902 shares issued and outstanding 411,765
Common stock to be issued 13,726
Less: subscriptions receivable (13,726)
Deficit (12,549)
Total Stockholders' Equity 399,216
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,031,931
See accompanying notes to financial statements.
4
SUPER PC MEMORY, INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
2001 2000
SALES - NET $ 22,555,562 $ 40,944,081
COST OF SALES 16,505,549 34,629,380
GROSS PROFIT 6,050,013 6,314,701
OPERATING EXPENSES
Selling expenses 456,848 422,209
Salaries 3,344,138 3,113,552
Bad debts 1,404,520 95,121
General and administrative expenses 2,551,046 2,143,235
Depreciation and amortization expense 120,159 81,345
Total Operating Expenses 7,876,711 5,855,462
(LOSS) INCOME FROM OPERATIONS (1,826,698) 459,239
OTHER INCOME (EXPENSE)
Interest and other income 4,966 13,714
Interest expense (228,674) (331,348)
Total Other Expense (223,708) (317,634)
NET (LOSS) INCOME $ (2,050,406) $ 141,605
Net (loss) income per common share -
basic and diluted $ (37.35) $ 2.58
Weighted average number of shares outstanding
during the year - basic and diluted 54,902 54,902
See accompanying notes to financial statements.
5
SUPER PC MEMORY, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
Retained
Common Stock Stock To Subscription Earnings Total
Shares Amount Be Issued Receivable (Deficit)
Balance,
January 1, 2000 54,902$411,765 $ - $ - $ 2,176,252 $ 2,588,017
Dividends paid - - - - (250,000) (250,000)
Net income, 2000 - - - - 141,605 141,605
Balance
December 31,2000 54,902 411,765 - - 2,067,857 2,479,622
Dividends paid - - - - (30,000) (30,000)
Stock to be issued - - 13,726 (13,726) - -
Net loss, 2001 - - - - (2,050,406) (2,050,406)
BALANCE,
DECEMBER 31,
2001 54,902$411,765 $ 13,726 $ (13,726)$ (12,549)$ 399,216
See accompanying notes to financial statements.
6
SUPER PC MEMORY, INC.
STATEMENTS OF CASH FLOW
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
2001 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss) Income $ (2,050,406) $ 141,605
Adjustments to reconcile net (loss) income
to net cash provided by operating activities:
Depreciation and amortization 120,159 81,345
Bad debt expense 1,404,520 95,121
Write-down of fixed assets 14,851 -
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable 1,392,411 1,438,682
Inventories 882,283 (399,439)
Prepaid expenses (915) (13,225)
Other assets - (33,666)
Increase (decrease) in:
Accounts payable (62,533) (113,756)
Cash overdraft 170,173 (269,068)
Due to stockholder - 100,000
Accrued expenses 86,570 24,255
Net Cash Provided By Operating Activities 1,957,113 1,051,854
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (2,650) (57,643)
Net Cash Used In Investing Activities (2,650) (57,643)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends (30,000) (250,000)
Payments on line of credit (1,870,204) (744,211)
Net Cash Used In Financing Activities (1,900,204) (994,211)
NET INCREASE IN CASH 54,259 -
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR - -
CASH AND CASH EQUIVALENTS - END OF YEAR $ 54,259 $ -
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for interest $ 228,674 $ 331,348
See accompanying notes to financial statements.
7
SUPER PC MEMORY, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2001
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) Organization and Description of Business
Super PC Memory, Inc. (the "Company") was incorporated in the State of
California in March 1993. The Company assembles and distributes computer
memory chips and sells primarily to wholesalers. The Company's assembling
operations are performed through a related party assembler (See Note 11).
(B) Use of Estimates
In preparing financial statements in conformity with accounting principles
generally accepted in the United States, 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 maturities of three months or less at the
time of purchase to be cash equivalents.
(D) Inventories
Inventories are stated at the lower of cost or market.
(E) Property and Equipment
Property and equipment are stated at cost, less accumulated depreciation.
Expenditures for maintenance and repairs are charged to expense as incurred.
Depreciation is provided using the straight-line method over the estimated
useful lives of the assets which range from five to twelve years.
(F) Intangibles
Goodwill and other intangible assets are amortized on the straight-line basis
over the estimated future periods to be benefited. Goodwill, the excess of
the Company's purchase price over the fair value of the net assets acquired,
is amortized over fifteen years(See Note 1(J)).
(G) Income Taxes
The Company elected to become a subchapter S corporation for federal income
tax purpose and therefore the income is recognized by the shareholders on
their individual tax returns. Under California law, the Company reports
income at the corporate level for state purposes.
8
SUPER PC MEMORY, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2001
(H) Revenue Recognition
The Company recognizes revenues when goods are shipped. The Company's terms
are free on board shipping point and title is considered to have passed once
the carrier picks up the order.
(I) Fair Value of Financial Instruments
Statement of Financial Accounting Standards No. 107, "Disclosures about Fair
Value of Financial Instruments", ("SFAS 107"), requires disclosures of
information about the fair value of certain financial instruments for which
it is practicable to estimate that value. For purposes of this disclosure,
the fair value of a financial instrument is the amount at which the
instrument could be exchanged in a current transaction between willing
parties other than in a forced sale or liquidation.
The carrying amounts of the Company's financial instruments, including
accounts receivable, accounts payable, accrued liabilities, and
notes and loans payable approximates fair value due to the relatively short
period to maturity for these instruments.
(J) Recent Accounting Pronouncements
The Financial Accounting Standards Board has recently issued several new
Statements of Financial Accounting Standards. Statement of Financial
Accounting Standards No. 141, "Business Combinations", ("SFAS 141"),
supersedes APB Opinion 16 and various related pronouncements. Pursuant to
the new guidance in SFAS 141, all business combinations must be accounted for
under the purchase method of accounting; the pooling-of-interests method is
no longer permitted. SFAS 141 also establishes new rules concerning the
recognition of goodwill and other intangible assets arising in a purchase
business combination and requires disclosure of more information concerning a
business combination in the period in which it is completed. This statement
is generally effective for business combinations initiated on or after July
1, 2001.
Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets", ("SFAS 142"), supercedes APB Opinion 17 and related
interpretations. SFAS 142 establishes new rules on accounting for the
acquisition of intangible assets not acquired in a business combination and
the manner in which goodwill and all other intangibles should be accounted
for subsequent to their initial recognition in a business combination
accounted for under SFAS 141. Under SFAS 142, intangible assets should be
recorded at fair value. Intangible assets with finite useful lives should be
amortized over such period and those with indefinite lives should not be
amortized. All intangible assets being amortized as well as those that are
9
SUPER PC MEMORY, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2001
not are both subject to review for potential impairment under Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of", ("SFAS 121").
SFAS 142 also requires that goodwill arising in a business combination should
not be amortized but is subject to impairment testing at the reporting unit
level to which the goodwill was assigned to at the date of the business
combination.
SFAS 142 is effective for fiscal years beginning after December 15, 2001, and
must be applied as of the beginning of such year to all goodwill and other
intangible assets that have already been recorded in the balance sheet as of
the first day in which SFAS 142 is initially applied, regardless of when such
assets were acquired. Goodwill acquired in a business combination whose
acquisition date is on or after July 1, 2001, should not be amortized, but
should be reviewed for impairment pursuant to SFAS 121, even though SFAS 142
has not yet been adopted. However, previously acquired goodwill should
continue to be amortized until SFAS 142 is first adopted.
Statement of Financial Accounting Standards No. 143, "Accounting for Asset
Retirement Obligations", ("SFAS 143"), establishes standards for the initial
measurement and subsequent accounting for obligations associated with the
sale, abandonment, or other type of disposal of long-lived tangible assets
arising from the acquisition, construction, or development and/or normal
operation of such assets. SFAS 143 is effective for fiscal years beginning
after June 15, 2002, with earlier application encouraged.
The adoption of these pronouncements will not have a material effect on the
Company's financial position or results of operations.
NOTE 2 ACCOUNTS RECEIVABLE
Accounts receivable were as follows at December 31, 2001:
Accounts receivable $ 1,815,882
Allowance for doubtful accounts (20,000)
$ 1,795,882
In 2001, the Company wrote off as a bad debt a note receivable of
approximately $1,030,000 due to the insolvency of the debtor.
NOTE 3 INVENTORY
Inventory consisted of the following at December 31, 2001:
Raw materials $ 278,164
Finished goods 552,323
$ 830,487
10
SUPER PC MEMORY, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2001
NOTE 4 PROPERTY AND EQUIPMENT
Property and equipment consisted of the following at December 31, 2001:
Equipment $ 127,500
Machinery and equipment 116,502
Furniture and fixtures 11,542
Automobile 7,987
263,531
Less accumulated depreciation 251,651
$ 11,880
Depreciation expense for the years ended December 31, 2001 and 2000 was
$32,789 and $39,704, respectively.
NOTE 5 NOTE PAYABLE - LINE OF CREDIT
The Company entered into a one year $2,500,000 line of credit
agreement with Manufacturers Bank maturing October 30, 2002.
The agreement calls for an interest rate based on the bank
prime rate or the LIBOR rate at the request date at the
option of the Company. At the time of such agreement, the
bank prime rate was 5.5%. The loan is secured by the assets
of the Company and calls for certain financial ratios to
be maintained including tangible net worth of $1,000,000, debt
to tangible net worth of 3.2 to 1, a current ratio of 1.1,
and avoidance of two quarters of consecutive after tax net
losses. At December 31, 2001 the Company was not in compliance
with such covenants. $ 1,191,988
The Company's shareholders and a related party are guarantors under the
covenants.
During 2002, the Company negotiated with a lender to refinance the
Manufacturers Bank line of credit.
NOTE 6 NOTE PAYABLE STOCKHOLDER
At December 31, 2001 the Company was indebted to a stockholder for
$401,863. The loan calls for interest at 8% and is due on
October 1, 2005.
NOTE 7 INCOME TAXES
California tax statutes allow a corporation to carry forward losses but does
not allow a carry back. For the year 2001 the Company has $2,050,406 of
California losses that it can carry forward to offset future income. Under
the current state rate this represents a deferred tax asset of approximately
$30,800 which has been fully offset by a valuation allowance due to the
uncertainty of its recognition.
11
SUPER PC MEMORY, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2001
NOTE 8 COMMITMENTS
The Company leases equipment and office facilities in Irvine, California from
a related party and a sales office in Westminster, Colorado. All of the
Company's leases are considered operating leases. Rental expense amounted to
$294,989 and $278,589 in 2001 and 2000, respectively. The Company's lease in
Irvine expires on December 31, 2004 and the Colorado lease expires on October
1, 2008.
Minimum future rental payments as of December 31, 2001 are as follows:
Year Amount
2002 $ 295,000
2003 295,000
2004 237,000
2005 218,000
2006 121,000
Thereafter 212,000
$1,378,000
NOTE 9 STOCKHOLDERS' EQUITY
Authorized Common Stock
The Company is authorized to issue 100,000 shares of no par value common
stock. As of December 31, 2001 the Company had 54,902 shares issued and
outstanding. On December 12, 2001 the company entered into a stock
subscription agreement to issue 13,726 shares of common stock to an employee
of the Company for $1 per share (See Note 12).
NOTE 10 EMPLOYEE BENEFIT PLAN
Effective January 1, 2000, the Board of Directors approved a 401(k) savings
plan covering all full-time employees. Subject to the approval by the Board
of Directors, the Company has the discretion to match employee contributions
each plan year. Expense attributable to Company contributions totaled
$17,071 and $7,554 during 2001 and 2000, respectively.
12
SUPER PC MEMORY, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2001
NOTE 11 RELATED PARTY TRANSACTIONS
The Company assembles its products through a related party, which is 100%
owned by a shareholder of the Company. The prices charged to the Company are
based on the lowest price the assembler charges a non-related customer.
Total purchases from the related party charged to cost of goods sold for the
years ended December 31, 2001 and 2000 amounted to $1,653,991 and $2,092,430,
respectively (See Notes 5 and 8 for additional related party transactions).
NOTE 12 SUBSEQUENT EVENTS
On January 31, 2002, the Company's stockholders entered into an agreement
with Cambex Corporation whereby the stockholders of the Company will tender
their shares for 560,000 shares of Cambex common stock. The agreement also
calls for the stockholders of the Company to receive 15% of the gross profit
of the Company through December 31, 2004. The Company will become a wholly
owned subsidiary of Cambex.
During 2002, 13,726 shares were issued to an employee at $1.00 per share
pursuant to a stock subscription agreement (See Note 9).
13
Unaudited Pro Forma Combined Financial Information
On March 12, 2002, Cambex Corporation completed the acquisition of 100% of
the outstanding common stock of Super PC Memory, Inc. and Super PC Memory,
Inc. became a wholly-owned subsidiary of Cambex Corporation (the
Transaction). The aggregate purchase price includes the issuance of 560,000
shares of Cambex common stock and payments based on the gross profit of the
subsidiary through December 31, 2004. The sellers received 560,000 shares of
Cambex Corporation common stock and will receive fifteen percent (15%) of
Super PC Memory, Inc.'s gross profit for the period from March 12, 2002
through December 31, 2004, payable in quarterly installment payments pursuant
to the terms of the Stock Purchase and Sale Agreement. The unaudited pro
forma balance sheet set forth below gives effect to the Transaction as if it
had been consummated on December 31, 2001. The unaudited pro forma statement
of operations gives effect to the Transaction as if it occurred on January 1,
2001. The financial statements for Cambex Corporation as of December 31, 2001
and for the year ended December 31,2001 are derived from the Company's Annual
Report on Form 10-KSB for the fiscal year ended December 31, 2001 and
incorporated herein by reference.
The pro forma adjustments reflecting the consummation of the Transaction are
based upon the purchase method of accounting and upon the assumptions set
forth in the notes hereto. This pro forma information should be read in
conjunction with the audited financial statements and notes that are included
in this document.
The pro forma adjustments do not reflect any operating efficiencies and cost
savings which may be achievable with respect to the combined companies.
These pro forma financial statements do not purport to present results, which
would actually have been obtained if the Transaction had been in effect
during the period covered, or any future results which may in fact be
realized. For purposes of Cambex's financial statements, Cambex will
establish a new basis for Super PC's assets and liabilities based upon the
fair values thereof. A final determination of the fair value of assets and
liabilities, has not yet been made. Accordingly, the purchase accounting
adjustments made in connection with the development of the pro forma combined
financial information are preliminary and have been made solely for purposes
of developing such pro forma combined financial information. Cambex will
undertake a study to determine the fair value of assets and liabilities and
will make appropriate purchase accounting adjustments upon completion of that
study.
14
CAMBEX CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
DECEMBER 31, 2001
ASSETS
CAMBEX SUPER PC PRO FORMA
CORPORATION MEMORY,INC. PURCHASE PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS COMBINED
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 209,573 $ 54,259 $ 263,832
ACCOUNTS RECEIVABLE, net 240,384 1,795,882 2,036,266
INVENTORIES 472,910 830,487(300,042)(A)1,003,355
PREPAID EXPENSES 56,729 18,006 74,735
TOTAL CURRENT ASSETS $ 979,596 $ 2,698,634(300,042) 3,378,188
PROPERTY AND EQUIPMENT, at cost:
MACHINERY AND EQUIPMENT $ 3,052,887 $ 11,880 3,064,767
FURNITURE AND FIXTURES 162,625 - 162,625
LEASEHOLD IMPROVEMENTS 602,092 - 602,092
$ 3,817,604 $ 11,880 3,829,484
LESS - ACCUMULATED DEPRECIATION
AND AMORTIZATION 3,772,186 - 3,772,186
NET PROPERTY AND EQUIPMENT $ 45,418 $ 11,880 57,298
OTHER ASSETS
DEFERRED OFFERING COSTS $ 427,975 $ - 427,975
GOODWILL - 302,907(302,907)(A) 168,070
168,070(A)
OTHER 37,830 18,510 56,340
TOTAL OTHER ASSETS $ 465,805 $ 321,417(134,837) 652,385
TOTAL ASSETS $ 1,490,819 $ 3,031,931(434,879) $4,087,871
15
CAMBEX CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
DECEMBER 31, 2001
LIABILITIES AND STOCKHOLDERS' INVESTMENT
CAMBEX SUPER PC PRO FORMA
CORPORATION MEMORY,INC. PURCHASE PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS COMBINED
CURRENT LIABILITIES:
CASH OVERDRAFT $ - $ 240,672 $ 240,672
LINE OF CREDIT PAYABLE - 1,191,988 1,191,988
LOAN AGREEMENT $ 1,057,991 $ - 1,057,991
NOTES PAYABLE 2,850,000 - 2,850,000
ACCOUNTS PAYABLE 826,852 617,695 1,444,547
OBLIGATIONS FOR TRADE-IN MEMORY 240,000 - 240,000
OTHER LIABILITIES-SHORT
TERM PORTION 2,629,765 - 2,629,765
ACCRUED EXPENSES 1,950,672 180,497 125,000(B)2,256,169
TOTAL CURRENT LIABILITIES $ 9,555,280 $ 2,230,852 125,000 11,911,132
LONG TERM DEBT $ 1,273,730 $ 401,863(401,863)(A)1,273,730
OTHER LIABILITIES-LONG
TERM PORTION 84,642 - 84,642
STOCKHOLDERS' INVESTMENT:
PREFERRED STOCK, $ 1.00 PAR
VALUE PER SHARE
AUTHORIZED - 3,000,000 SHARES
ISSUED - NONE
COMMON STOCK, $ .10 PAR VALUE
PER SHARE
AUTHORIZED - 25,000,000 SHARES
ISSUED $ 1,148,474 $ 411,765(411,765)(A)$ 1,204,474
56,000(A)
CAPITAL IN EXCESS OF PAR VALUE 16,268,677 - 185,200(A) 16,453,877
COMMON STOCK TO BE ISSUED - 13,726 (13,726)(A) -
LESS-SUBSCRIPTIONS RECEIVABLE - ( 13,726) 13,726(A) -
ACCUMULATED OTHER
COMPREHENSIVE INCOME 102,677 - 102,677
RETAINED EARNINGS (DEFICIT) (26,053,690) ( 12,549) 12,549(A) (26,053,690)
LESS - COST OF SHARES HELD
IN TREASURY (888,971) - ( 888,971)
TOTAL STOCKHOLDERS' INVESTMENT $(9,422,833)$ 399,216(158,016) $(9,181,633)
TOTAL LIABILITIES AND
STOCKHOLDERS' INVESTMENT $ 1,490,819 $3,031,931(434,879) $ 4,087,871
16
CAMBEX CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2001
CAMBEX SUPER PC PRO FORMA
CORPORATION MEMORY,INC. PURCHASE PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS COMBINED
REVENUES $ 1,855,011 $22,555,562 $24,410,573
COST OF SALES 892,297 16,505,549 17,397,846
Gross profit $ 962,714 $ 6,050,013 $ 7,012,727
OPERATING EXPENSES:
Research and development $ 1,030,241 $ - $ 1,030,241
Selling 504,399 456,848 961,247
Salaries - 3,344,138 3,344,138
Bad debts - 1,404,520 1,404,520
General and administrative 420,357 2,551,046 2,971,403
Depreciation and amortization - 120,159 120,159
Total operating expenses $ 1,954,997 $ 7,876,711 9,831,708
OPERATING INCOME (LOSS) $( 992,283)$(1,826,698) $(2,818,981)
OTHER INCOME (EXPENSE):
Interest expense (551,000) ( 228,674) ( 779,674)
Interest and other income - 4,966 4,966
INCOME (LOSS) BEFORE INCOME
TAXES AND EXTRAORDINARY ITEMS $(1,543,283)$(2,050,406) $(3,593,689)
Provision for income taxes - - -
INCOME (LOSS) BEFORE
EXTRAORDINARY ITEMS $(1,543,283)$(2,050,406) $(3,593,689)
Extraordinary Items - - -
NET INCOME (LOSS) $(1,543,283)$(2,050,406) $(3,593,689)
OTHER COMPREHENSIVE INCOME,
NET OF TAX:
Foreign Currency translation
Adjustments 212 - 212
OTHER COMPREHENSIVE INCOME $ 212 $ - 212
TOTAL COMPREHENSIVE INCOME(LOSS)$(1,543,071)$(2,050,406) $(3,593,477)
INCOME(LOSS) PER COMMON SHARE $ (0.16) $ (0.34)
Weighted Average Common
Shares Outstanding 9,890,000 560,000(C) 10,450,000
Weighted Average Common and Common
Equivalent Shares Outstanding 9,890,000 560,000(C) 10,450,000
17
CAMBEX CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(1) Description of the Transaction
On March 12, 2002, Cambex Corporation completed the acquisition of 100% of
the outstanding common stock of Super PC Memory, Inc. and Super PC Memory,
Inc. became a wholly-owned subsidiary of Cambex Corporation (the
Transaction). The aggregate purchase price includes the issuance of 560,000
shares of Cambex common stock and payments based on the gross profit of the
subsidiary through December 31, 2004. The sellers received 560,000 shares of
Cambex Corporation common stock and will receive fifteen percent (15%) of
Super PC Memory, Inc.'s gross profit for the period from March 12, 2002
through December 31, 2004, payable in quarterly installment payments pursuant
to the terms of the Stock Purchase and Sale Agreement. The unaudited pro
forma balance sheet gives effect to the Transaction as if it
had been consummated on December 31, 2001. The unaudited pro forma statement
of operations gives effect to the Transaction as if it occurred on January 1,
2001.
(2) Description of Pro Forma Adjustments
(A)The value assigned to goodwill is based on the purchase price over the
amounts assigned to the identifiable assets acquired and liabilities of
Super PC Memory, Inc. The allocation of the purchase price is as follows:
Common Stock(1) $241,200
Add: Transaction costs 125,000
Total Consideration 366,200
Less: Net tangible assets acquired 198,130
Goodwill 168,070
(1) The 560,000 shares of common stock of Cambex Corporation issued in
connection with the Transaction is valued at the closing price on
March 12, 2002, $0.52 per share less an estimated $50,000 cost of
registration of the shares of common stock. Therefore, the allocation
of the common stock issued is $56,000 to common stock for the par
value of shares issued and the balance to capital in excess of par
value.
Reflects the elimination of Super PC Memory, Inc. common stock and retained
earnings in the amount of $411,765 and $(12,549), respectively.
(B) The accrued expense adjustment represents the accrued estimated
transaction costs to be incurred as a result of the Transaction. The costs
are primarily the Company's legal, accounting, stock registration fees and
similar expenses.
(C) Reflects additional shares issued to Super PC Memory, Inc. shareholders.
18
(c) Exhibits.
2.1 Stock Purchase and Sale Agreement dated as of January 31, 2002 by and
among Cambex Corporation, Super PC Memory, Inc., Son T. Pham, Simon Le and
Richard G. Schaefer (included as Exhibit 2.1 to the Company's Current Report
on Form 8-K dated March 27, 2002, and is incorporated herein by reference).
23.1 Consent of Weinberg & Company, P.A.
99 Press Release dated March 25, 2002 (included as Exhibit 99 to the
Company's Current Report on Form 8-K dated March 27, 2002, and is
incorporated herein by reference).
19
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.
CAMBEX CORPORATION
(Registrant)
Date: May 30, 2002 By:/s/Joseph F. Kruy
Joseph F. Kruy
President and Chief Executive Officer
EXHIBIT INDEX
Exhibit
Number Description
2.1 Stock Purchase and Sale Agreement dated as of January 31, 2002 by and
among Cambex Corporation, Super PC Memory, Inc., Son T. Pham, Simon Le and
Richard G. Schaefer (included as Exhibit 2.1 to the Company's Current Report
on Form 8-K dated March 27, 2002, and is incorporated herein by reference).
23.1 Consent of Weinberg & Company, P.A.
99 Press Release dated March 25, 2002 (included as Exhibit 99 to the
Company's Current Report on Form 8-K dated March 27, 2002, and is
incorporated herein by reference).