AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 15, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

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POMEROY SELECT INTEGRATION SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

DELAWARE 7373 61-1337096
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification
organization) Number)

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1020 PETERSBURG ROAD, HEBRON, KENTUCKY 41048
(606) 586-0600

(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

STEPHEN E. POMEROY
PRESIDENT AND CHIEF EXECUTIVE OFFICER
POMEROY SELECT INTEGRATION SOLUTIONS, INC.
1020 PETERSBURG ROAD
HEBRON, KENTUCKY 41048
(606) 586-0600

(Name, address, including zip code, and telephone number, including area code,
of agent for service)

------------------------------

COPIES TO:

WILLIAM G. KOHLHEPP, ESQ. DAVID J. SORIN, ESQ.
ELIZABETH A. HORWITZ, ESQ. ANDREW P. GILBERT, ESQ.
CORS & BASSETT BUCHANAN INGERSOLL PROFESSIONAL
CORPORATION
537 E. PETE ROSE WAY, SUITE 400 500 COLLEGE ROAD EAST
CINCINNATI, OHIO 45202 PRINCETON, NEW JERSEY 08540
(513) 852-8200 (609) 987-6800

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APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC: AS SOON
AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / __________________

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / __________________

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / __________________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /

CALCULATION OF REGISTRATION FEE

PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED PRICE(1) REGISTRATION FEE

Class A Common Stock, $0.01 par value per share................................... $57,500,000 $15,985
(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act.

------------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.

PROSPECTUS (Not Complete)
Issued: January 15, 1999

[LOGO]

CLASS A COMMON STOCK
----------------

Pomeroy Select Integration Solutions, Inc. is offering shares of its Class A
Common Stock in a firmly underwritten offering. This is Pomeroy Select's initial
public offering and no public market currently exists for Pomeroy Select's
shares. Pomeroy Select anticipates that the initial public offering price for
its shares of Class A Common Stock will be between $ and $ per share.
After the offering, the market price for Pomeroy Select's shares of Class A
Common Stock may be outside of this range.

The Company has two classes of authorized Common Stock, the Class A Common
Stock, par value $0.01 per share, offered hereby and Class B Common Stock, par
value $0.01 per share. The rights of the holders of Class A Common Stock and
Class B Common Stock are substantially identical, except with respect to voting,
conversion and transfer. Each share of Class A Common Stock entitles its holder
to one vote, and each share of Class B Common Stock entitles its holder to ten
votes, on all matters submitted to a vote of stockholders. The Company is
currently wholly owned by Pomeroy Computer Resources, Inc. ("PCR") which,
immediately after the consummation of the offering, will continue to
beneficially own 100% of the 10,000,000 shares of outstanding Class B Common
Stock of the Company. At such time (assuming the Underwriters do not exercise
their right to purchase additional shares in this offering to cover any
over-allotments), the outstanding shares of Class B Common Stock will represent
approximately % of the combined voting power of the Company. As a result of
such ownership, PCR will be able to control the vote on all matters submitted to
a vote of stockholders, including the election of Directors and the approval of
extraordinary corporate transactions. Shares of Class B Common Stock are
convertible, subject to certain conditions, into shares of Class A Common Stock
on a share-for-share basis at the option of PCR and automatically upon certain
transfers by PCR or first public trade. See "Risk Factors," "Relationship with
PCR," "Principal Stockholders" and "Description of Capital Stock."
------------------------

Application has been made for quotation of the Company's Class A Common
Stock on the Nasdaq National Market under the symbol "PSIS."

INVESTING IN THE CLASS A COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE
"RISK FACTORS" BEGINNING ON PAGE 10.
---------------------

PER SHARE TOTAL
------------------ ------------------

Offering Price $ $
Discounts and Commissions to Underwriters $ $
Offering Proceeds to Company $ $

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

Pomeroy Select has granted the Underwriters the right to purchase up to an
additional shares of Class A Common Stock to cover any over-allotments. The
Underwriters can exercise this right at any time within thirty days after the
offering. NationsBanc Montgomery Securities LLC expects to deliver the shares of
Class A Common Stock to investors on or about , 1999.

NATIONSBANC MONTGOMERY SECURITIES LLC

J. C. BRADFORD & CO.

WHEAT FIRST UNION
------------------------

_______ __, 1999

Inside Front Cover

[LOGO]

A circular photo of a technician LIFE CYCLE SERVICES
repairing an open computer system - Technology Deployment
- Multi-Vendor Repair and Maintenance
- Install, Move, Add or Change ("IMAC")
- Redeployment and Mobile Systems Management
- Asset Discovery and Tracking
- Asset End-Of-Life Services

A circular photo of systems engineers INTERNETWORKING SERVICES
integrating a rack-mounted server - Project Management
solution - Network Design
- Network Integration
- Network Management
- Network Migration
- Network Support
- Cabling

A circular photo of a help desk END-USER SUPPORT SERVICES
employee assisting a customer - Custom Help Desk
- Internet-Based Training
- Video/Teleconferencing
- Ancillary Services

PROSPECTUS SUMMARY

THIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS.
IT IS NOT COMPLETE AND MAY NOT CONTAIN ALL OF THE INFORMATION THAT YOU SHOULD
CONSIDER BEFORE INVESTING IN THE CLASS A COMMON STOCK. YOU SHOULD READ THE
ENTIRE PROSPECTUS CAREFULLY, INCLUDING THE "RISK FACTORS" SECTION AND THE
FINANCIAL STATEMENTS AND THE NOTES TO THOSE STATEMENTS. THIS PRELIMINARY
PROSPECTUS IS SUBJECT TO COMPLETION PRIOR TO THIS OFFERING.

THE COMPANY

Pomeroy Select is a single-source provider of integrated desktop management
and network services that help corporate clients manage their information
technology ("IT") assets. We provided IT services to more than 2,100 customers
in the nine months ended October 5, 1998. Our customers generally range from
mid-sized organizations to Fortune 500 companies in a wide variety of
industries. We deliver our services nationally through over 900 technical and
engineering personnel located in 30 offices. Over the four-year period ended
January 5, 1998, our revenue grew at a compounded annual growth rate of 51.0%
and for the nine-month period ended October 5, 1998, our revenue grew by 61.1%
over the comparable nine-month period for the prior year.

We offer three categories of services: life cycle services, internetworking
services and end-user support services. Our life cycle services include a full
range of IT services designed to help our customers manage and maintain their
distributed asset base of computer and networking equipment throughout their
product life cycles. Our technical personnel provide customized configuration of
software and hardware for workstations and servers and perform technology
deployment at customer sites. We also service and repair equipment at customer
sites and provide drop-off repair service at our service depot. For customers
with large fleets of laptop PCs, we offer mobile systems management by providing
storage, reconfiguration and rapid exchange services. We also offer asset
discovery and tracking services to help our customers track and evaluate their
current IT asset base and end-of-life services to dispose economically of
obsolete IT equipment. Our support service is available 24 hours a day, seven
days a week, depending on the needs of the customer.

Our internetworking services enable our customers to meet their increasing
need for network connectivity by helping them effectively utilize an increasing
number of IT solutions. We design, manage and integrate local and wide area
networks for our customers. We also help them migrate from older systems to
newer network platforms such as Microsoft Windows NT. For larger projects, such
as deployment of a new network or large-scale migrations, we offer services
ranging from project management services to turn-key cabling services which help
our customers build their network infrastructure.

Our end-user support services include customized help desk services,
Internet-based training on many popular software packages and
video/teleconferencing services. These services enable our customers to maximize
the use of their IT assets and increase productivity.

The recent growth in demand for our services has been driven by increased
needs for IT solutions by our customers who are becoming more dependent on the
use of IT as a competitive tool to improve service, lower costs, increase
productivity and shorten time to market. These business needs have been driving
the continued proliferation of IT solutions, including network-enabled
applications and related internetworking equipment. Internetworking environments
are often characterized by multi-vendor products and services, multi-protocol
technologies and rapid technological innovation, all of which require complex
system design and integration. For many organizations, this increasingly complex
IT infrastructure has created demands that often exceed the capabilities and
capacity of internal management information systems departments. As a result,
many organizations increasingly elect to outsource some or all of their design,
management, maintenance and implementation requirements to independent IT
services providers.

We deliver cost-effective, flexible, consistent, reliable and comprehensive
solutions to meet our customers' IT service requirements related to their
distributed asset base of computer and network equipment. By maintaining a
highly qualified staff of technical professionals who are certified by multiple
IT vendors, we are able to customize solutions to meet specific customer needs.
In addition, we have excellent relationships with industry-leading vendors,
enabling us to integrate and support technology from multiple hardware
manufacturers and software developers.

Our objective is to be the leading single-source provider of integrated
desktop management and network services. To achieve our objective, we pursue the
following strategies:

LEVERAGE STRONG CUSTOMER RELATIONSHIPS. We have developed strong
relationships with our existing customers by offering a flexible implementation
approach while emphasizing high-quality services. We seek to leverage these
strong customer relationships to provide additional services to existing
customers and to gain access to new customers.

MAINTAIN AND ENHANCE TECHNICAL EXPERTISE. We seek to maintain and enhance
our technical expertise by hiring and training highly qualified technicians and
systems engineers. We utilize our in-house recruiting capabilities to
continually identify qualified candidates for service technician and systems
engineer positions. In addition to a comprehensive training program, we use our
incentive programs, advancement opportunities and recognition programs to
motivate, reward and retain our employees.

EXPAND SALES AND MARKETING ACTIVITIES. We are actively seeking to expand
the size and enhance the quality of our direct sales force. By hiring additional
highly qualified sales personnel, we intend to increase direct sales, build
market awareness, establish name recognition and promote our reputation as a
high-quality, single-source IT services provider. In addition, our agreement
with PCR provides PCR's sales force with performance-based commissions and
bonuses for continuing to generate IT services revenue for us. We also intend to
establish alternative sales channels which may include strategic relationships
with a variety of hardware manufacturers and vendors.

BROADEN SERVICE OFFERINGS. We regularly offer, and intend to continue to
offer, new services which respond to evolving customer needs.

LEVERAGE STRATEGIC RELATIONSHIPS WITH INDUSTRY LEADERS. We have alliances
with and authorizations from industry-leading hardware, software and
internetworking product vendors, such as Bay Networks, Cisco Systems, Compaq,
Computer Associates, Hewlett-Packard, IBM, Microsoft, Novell and 3Com. We
believe that these authorizations provide a competitive advantage through
enhanced credibility and access to a broader market. We have made, and intend to
continue to make, the investments in employee training and marketing necessary
to obtain or maintain a wide array of service authorizations with such industry
leaders.

PURSUE ACQUISITIONS. We intend to pursue acquisitions of IT services
businesses to broaden our service offerings, add technical or sales personnel,
increase our presence in existing markets, expand into new geographic markets,
improve operating efficiencies through economies of scale, establish strategic
relationships and obtain desirable customer relationships. We believe that
acquisitions will continue to be an effective means to supplement our internal
growth.

THE OFFERING

Class A Common Stock offered by
the Company..................... shares

Common Stock to be outstanding
after the offering:

Class A Common Stock............ shares(1)

Class B Common Stock............ 10,000,000 shares(2)

Voting rights..................... The Class A Common Stock and Class B Common Stock vote
as a single class on all matters, except as otherwise
required by law, with each share of Class A Common Stock
entitling its holder to one vote and each share of Class
B Common Stock entitling its holder to ten votes. All of
the outstanding shares of Class B Common Stock are owned
by PCR. After the offering, PCR will own shares of Class
B Common Stock having approximately % of the
combined voting power of the outstanding shares of
Common Stock. See "Principal Stockholders" and
"Description of Capital Stock."

Use of proceeds................... We intend to use approximately $ of the net
proceeds to repay indebtedness under our credit
facility. We expect to use the remaining proceeds for
working capital, capital expenditures and general
corporate purposes, including expanding sales and
marketing activities and possible acquisitions. See "Use
of Proceeds."

Risk factors...................... Investing in the Class A Common Stock involves a high
degree of risk. See "Risk Factors."

Proposed Nasdaq National Market
symbol.......................... PSIS

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(1) Excludes, as of January 14, 1999, (i) 620,000 shares of Class A Common Stock
issuable upon the exercise of outstanding stock options under the Company's
1999 Stock Plan with an exercise price per share equal to the initial public
offering price and (ii) 2,380,000 shares of Class A Common Stock reserved
for issuance upon the exercise of options available for grant under the 1999
Stock Plan. See "Risk Factors -- Shares Eligible for Future Sale; Potential
Adverse Impact of the Distribution" and "Management -- 1999 Stock Plan."

(2) Shares of Class B Common Stock are convertible, subject to certain
conditions, into shares of Class A Common Stock on a share-for-share basis
at the option of PCR and automatically upon certain transfers by PCR or
first public trade. See "Risk Factors -- Shares Eligible for Future Sale;
Potential Adverse Impact of the Distribution," "Relationship with PCR,"
"Principal Stockholders" and "Description of Capital Stock."

SUMMARY SELECTED HISTORICAL FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)

NINE MONTHS ENDED
YEARS ENDED JANUARY 5, OCTOBER 5,
----------------------------------------------------- ---------------------
1994 1995 1996 1997 1998 1997 1998
----------- ----------- ------- ------- ------- ----------- -------
(UNAUDITED) (UNAUDITED) (UNAUDITED)

STATEMENT OF INCOME DATA:
Revenue......................................... $8,706 $13,103 $17,243 $26,396 $45,209 $31,903 $51,401
Gross profit.................................... 4,252 5,798 7,120 9,909 18,072 13,485 20,768
Operating income................................ 1,192 1,485 1,833 3,372 6,033 4,476 7,592
Net income...................................... $ 507 $ 833 $ 1,010 $ 1,919 $ 3,743 $ 2,752 $ 4,599
Pro forma net income per share.................. $ 0.37 $ 0.46
Pro forma weighted average shares(1)............ 10,000 10,000

AS OF JANUARY 5, AS OF OCTOBER 5, 1998
-------------------- ------------------------
1997 1998 ACTUAL PRO FORMA AS
--------- --------- --------- ADJUSTED(2)
-------------
(UNAUDITED)

BALANCE SHEET DATA:
Working capital................................................. $ 100 $ 2,497 $ 4,146 $
Total assets.................................................... 17,682 24,702 37,185
Bank note payable............................................... 731 1,630 7,409
Due to parent................................................... 6,614 6,588 6,158
Stockholder's equity............................................ 4,270 8,013 12,612

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(1) Assumes that all 10,000,000 shares of Class B Common Stock issued to PCR on
January 6, 1999 were outstanding for the entire period. See "Prospectus
Summary -- Summary of Relationship with PCR."

(2) Gives pro forma effect to the transfer of the assets, liabilities, business,
operations and personnel from PCR to the Company on January 6, 1999, as
adjusted to give effect to the consummation of the offering and the
application of the net proceeds therefrom. See "Use of Proceeds,"
"Relationship with PCR" and Notes 13 and 14 of Notes to Financial
Statements.

SUMMARY OF RELATIONSHIP WITH PCR

The Company was incorporated in Delaware on December 14, 1998. On January 6,
1999, PCR contributed the assets, liabilities, business, operations and
personnel comprising its IT services business to Pomeroy Select in exchange for
10,000,000 shares of Pomeroy Select's Class B Common Stock.

OWNERSHIP OF OUR CLASS B COMMON STOCK BY PCR. Pomeroy Select is currently a
wholly-owned subsidiary of PCR. Upon completion of this offering, PCR will own
100% of the outstanding shares of Pomeroy Select's Class B Common Stock,
representing approximately % of the voting power of Pomeroy Select
(approximately % of the voting power if the Underwriters exercise in full
their right to purchase additional shares in this offering to cover
over-allotments).

CONDUCT OF BUSINESS OF POMEROY SELECT. Prior to January 6, 1999, our
business was conducted within PCR and PCR provided all administrative,
management and support services. PCR will continue to provide most of these
services pursuant to the Administrative Services and Marketing Agreement (the
"Services Agreement"). See "Relationship with PCR."

CONTRIBUTION AGREEMENT. On January 6, 1999, PCR and Pomeroy Select entered
into a Contribution Agreement which provided for, among other things, the
transfer from PCR to Pomeroy Select of the assets, business and personnel
comprising the business of Pomeroy Select and the assumption by Pomeroy Select
of the liabilities relating to its business as agreed to by PCR and Pomeroy
Select.

OPERATIONAL AND ADMINISTRATIVE AGREEMENTS. Our agreements with PCR also
govern our various interim and ongoing relationships. All of the agreements with
PCR were made in the context of a parent-subsidiary relationship and were
negotiated in the overall context of our separation from PCR. The terms of these
agreements may be more or less favorable to us than if they had been negotiated
with unaffiliated third parties. See "Risk Factors -- Potential Conflicts of
Interest between the Company and PCR" and "Relationship with PCR."

Our agreements with PCR include:

- Services Agreement: PCR has agreed to continue to provide various
administrative, management, marketing and support services to us. In
addition, the Services Agreement provides that: (i) Pomeroy Select and PCR
shall not compete with each other; (ii) PCR shall give us a right of first
refusal to participate in all services sales opportunities which come to
the attention of PCR; and (iii) we shall give PCR a right of first refusal
to participate in all hardware sales opportunities which come to our
attention. Further, we have agreed with PCR to joint market and cross-sell
our respective offerings. PCR's sales force can earn performance-based
commissions and bonuses for continuing to generate services revenue for
us;

- Space Sharing Agreement: Pomeroy Select and PCR have agreed to share
certain office facilities, including the Company's headquarters and branch
offices;

- Indemnification Agreement: Pomeroy Select and PCR have agreed to indemnify
each other and their respective directors, officers, employees, agents and
representatives for certain liabilities; and

- Stock Registration Agreement: We have granted to PCR rights which may
require us to register, under certain circumstances, the shares of Class A
Common Stock beneficially owned by PCR. See "Description of Capital Stock
-- Registration Rights of PCR."

CREDIT FACILITY. We have entered into an agreement for an interim credit
facility with Deutsche Financial Services Corporation, the primary lender to
PCR. This credit facility allows us to borrow up to the lesser of $20.0 million
or the maximum borrowing capacity as calculated under the credit facility. The
borrowing capacity, interest rate and other terms of our credit facility are
dependent upon the continued satisfaction of certain terms and conditions by
PCR. PCR has also guaranteed the entire

amount of the credit facility which is secured by all of the assets of PCR. Upon
consummation of this offering, we intend to replace the interim credit facility
with a permanent credit facility. We cannot assure you that we will be able to
obtain a new credit facility or that any new credit facility will be available
on terms acceptable to us. See "Risk Factors -- Absence of PCR Financial
Support; Limited Borrowing Capacity," "Use of Proceeds" and "Management's
Discussion and Analysis of Financial Condition and Results of Operation --
Liquidity and Capital Resources."

POSSIBLE DISTRIBUTION. Following completion of this offering, PCR intends
to consider its options regarding its ownership interest in Pomeroy Select,
including whether to retain such ownership interest, sell all or a portion of
its shares of Class B Common Stock to the public in another public offering or
to a strategic investor or make a distribution of the shares to its stockholders
(the "Distribution"). If the Class B Common Stock is transferred in a manner
other than the Distribution or a sale of a controlling interest involving at
least 50% of the Class B Common Stock, the shares of Class B Common Stock
automatically convert to shares of Class A Common Stock. If the Distribution is
made, the Class B Common Stock will automatically convert upon first transfer by
the distributees. As a result, the Class B Common Stock will never trade in the
public markets. The occurrence of the Distribution is only one possibility and
is not a certainty. For a Distribution by PCR to occur, the Board of Directors
of PCR must conclude, at the time that the Distribution may be considered, that
the Distribution is in the best interests of the stockholders of PCR. PCR has
advised Pomeroy Select that such determination may be conditioned upon the
receipt of a favorable ruling from the Internal Revenue Service (the "IRS") as
to the tax-free nature of the Distribution. PCR has not applied for such a
ruling as of the date of this offering. PCR has agreed with the Underwriters
that it will not transfer or distribute shares of Class B Common Stock for a
period of at least 180 days from the consummation of this offering. See "Risk
Factors -- Shares Eligible for Future Sale; Potential Adverse Impact of the
Distribution" and "Description of Capital Stock -- Common Stock."

THIS PROSPECTUS CONTAINS CERTAIN "FORWARD-LOOKING STATEMENTS" CONCERNING THE
COMPANY'S OPERATIONS, PERFORMANCE AND FINANCIAL CONDITION, INCLUDING ITS FUTURE
ECONOMIC PERFORMANCE, PLANS AND OBJECTIVES AND THE LIKELIHOOD OF SUCCESS IN
DEVELOPING AND EXPANDING ITS BUSINESS. THESE STATEMENTS ARE BASED UPON A NUMBER
OF ASSUMPTIONS AND ESTIMATES WHICH ARE SUBJECT TO SIGNIFICANT UNCERTAINTIES,
MANY OF WHICH ARE BEYOND THE CONTROL OF THE COMPANY. THE WORDS "MAY," "WOULD,"
"COULD," "WILL," "EXPECT," "ANTICIPATE," "BELIEVE," "INTEND," "PLAN," "ESTIMATE"
AND SIMILAR EXPRESSIONS ARE MEANT TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS.
ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY SUCH
FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY INCLUDE, BUT ARE NOT LIMITED TO, THOSE SET FORTH IN "RISK FACTORS."

Readers are cautioned not to place undue reliance on these forward-looking
statements which reflect our views only as of the date of this Prospectus. The
Company undertakes no obligation to update such statements or publicly release
the result of any revisions to these forward-looking statements which it may
make to reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.

In this Prospectus, "Pomeroy Select," the "Company," "we," "us" and "our"
each refers to Pomeroy Select Integration Solutions, Inc. and "PCR" refers to
Pomeroy Computer Resources, Inc. and its consolidated subsidiaries other than
the Company. The data presented has been derived by the Company using various
allocation methodologies to reflect the historical balance sheets, results of
operations and cash flows of PCR's IT services business for each respective
period; however, it does not reflect potential changes that may occur in our
operations and funding as a result of our becoming a stand-alone company. Our
fiscal year is a 12-month period ending January 5. For more information, you
should read the "Risk Factors -- Absence of History as a Stand-Alone Company,"
"-- Limited Relevance of Historical Financial Information," "Selected Historical
Financial Data" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" sections of this Prospectus.

Unless otherwise stated, all information in this Prospectus assumes that the
Underwriters will not exercise their right to purchase additional shares of
Class A Common Stock in this offering.

The Company's principal executive offices are located in the Greater
Cincinnati area at 1020 Petersburg Road, Hebron, Kentucky 41048, and its
telephone number is (606) 586-0600.

RISK FACTORS

IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS, YOU SHOULD
CAREFULLY CONSIDER THE FOLLOWING FACTORS IN EVALUATING WHETHER TO INVEST IN THE
SHARES OF CLASS A COMMON STOCK. THE RISKS AND UNCERTAINTIES DESCRIBED BELOW ARE
NOT THE ONLY ONES FACING OUR COMPANY. ADDITIONAL RISKS AND UNCERTAINTIES NOT
PRESENTLY KNOWN TO US OR THAT WE CURRENTLY DEEM IMMATERIAL MAY ALSO IMPAIR OUR
BUSINESS OPERATIONS AND FINANCIAL RESULTS.

IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS, FINANCIAL
CONDITION OR RESULTS OF OPERATIONS COULD BE MATERIALLY ADVERSELY AFFECTED. IN
SUCH CASE, THE TRADING PRICE OF OUR CLASS A COMMON STOCK COULD DECLINE AND YOU
MAY LOSE ALL OR PART OF YOUR INVESTMENT.

THIS PROSPECTUS ALSO CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS
AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
ANTICIPATED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS,
INCLUDING THE RISKS DESCRIBED BELOW AND ELSEWHERE IN THIS PROSPECTUS.

ABSENCE OF HISTORY AS A STAND-ALONE COMPANY

After this offering and prior to the Distribution, if any, or other sale or
transfer of shares of the Class B Common Stock held by PCR, if any, we will
continue to be a subsidiary of PCR but will operate as a stand-alone company.
The IT services business of PCR commenced in 1981 and has been operated as part
of PCR since that time. On January 6, 1999, PCR transferred the assets,
liabilities, business, operations and personnel of its IT services business to
us. We have never operated as a stand-alone company and have limited name
recognition. An investor in our Class A Common Stock must consider the risks and
uncertainties frequently encountered by companies in the early stages of
development, particularly those faced by companies in the highly competitive and
rapidly evolving market to provide IT services. These risks include our:

- Reliance on PCR for referrals, sales opportunities and marketing
functions;

- Need to expand our sales, marketing and support organizations;

- Reliance on strategic relationships;

- Ability to compete with IT services providers with greater name
recognition and greater resources;

- Need to manage changing operations;

- Dependence on key and technical personnel; and

- Ability to independently operate and manage the Company as a result of
PCR's control.

To compete in the IT services market, we believe that we must devote
substantial resources to expand our sales and marketing activities, broaden our
service offerings, maintain and enhance our technical expertise and pursue
acquisitions. Although our revenue has increased in recent years, we cannot be
certain that we can sustain continued revenue growth or that we will remain
profitable on a quarterly or annual basis in the future.

In addition, the IT services component of PCR's business was operated within
the context of a significantly larger, integrated IT hardware and services
company. We cannot assure you that the separation of our services business from
the hardware business retained by PCR or that our contractual relationships with
PCR will be successful. Further, most of our administrative functions, including
our payroll, accounting, human resources, management information systems
("MIS"), legal and marketing functions, will continue to be provided by PCR
pursuant to our Services Agreement. We intend, over time, to develop our own
administrative infrastructure. We cannot assure you that we will be able to

develop adequate administrative functions in a timely and cost effective manner.
See "Relationship with PCR."

LIMITED RELEVANCE OF HISTORICAL FINANCIAL INFORMATION

The historical financial information included in this Prospectus has been
prepared based upon certain estimates and assumptions by PCR and us with respect
to allocations of costs of sales, gross profit and general and administrative
expenses. These estimates, allocations and assumptions were necessary because
PCR did not account for us as, and we were not operated as, a single stand-alone
business or a separate division for any of the periods presented. We believe the
historical financial data presented in this Prospectus reflects the historical
results of operations and cash flows of PCR's IT services business for each
respective period; however, it does not reflect potential changes that may occur
in our funding and operations as a result of becoming a stand-alone company. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." Therefore, the historical financial information included in this
Prospectus may not reflect our results of operations and financial condition had
we been a separate, stand-alone, publicly-held entity during the periods
presented or be indicative of our future results of operations and financial
condition.

RELIANCE ON REFERRALS FROM PCR; NEED TO EXPAND SALES AND SUPPORT ORGANIZATIONS

Historically, PCR's approximately 300-person sales staff generated
substantially all of our sales leads. Although we currently have 24 direct sales
people and are continuing to build our own direct sales force, we expect that
PCR's sales staff will continue to generate the majority of our sales leads for
the foreseeable future. The Services Agreement provides us with the right of
first refusal to perform IT services for PCR's customers.

We need to substantially expand our direct and indirect sales activities to
build market awareness, establish name recognition and sell our services. Our
services require a sophisticated sales effort targeted at professionals at
different levels within our prospective customers' organizations. Competition
for qualified IT sales personnel is intense, and we may not be able to hire the
quality and number of sales people we are targeting. We also intend to establish
alternative sales channels which may include strategic relationships with a
variety of hardware manufacturers and vendors. We cannot be certain that we will
be able to successfully expand our sales staff or that we will be able to
successfully promote our existing or future service offerings. See "Business --
Strategy" and "-- Sales and Marketing."

COMPETITIVE MARKET FOR TECHNICAL PERSONNEL

Our future success depends to a significant extent on our ability to
attract, train and retain highly skilled technical personnel, particularly
service technicians, systems engineers and other senior technical personnel. We
believe that there is a worldwide shortage of, and significant competition for,
professionals with the advanced technical skills necessary to perform the
services we offer. This makes it difficult for us to hire the quality and number
of technical personnel we require. In addition, it makes it more expensive to
hire those personnel we can attract. Such competition has adversely affected,
and is likely to continue to adversely affect, our gross profits, margins and
results of operations. Our business, financial condition, operating results and
growth prospects could decline significantly if we are unable to hire and retain
qualified technical personnel that are necessary to conduct and expand our
operations successfully. We cannot assure you that we will be successful in
attracting and retaining the technical personnel required. See "Business --
Strategy" and "-- Employees."

SUBSTANTIAL VARIABILITY OF QUARTERLY OPERATING RESULTS

Our revenue, gross profit, operating income and net income may vary
substantially from quarter to quarter due to a number of factors. Many factors,
some of which are not within our control, may contribute to fluctuations in
operating results. These factors include the following:

- Variations in billing margins and personnel utilization rates;

- Short-term nature of customers' commitments;

- Patterns of IT-oriented capital spending by customers;

- Seasonal impact on projects for customers;

- Our hiring patterns;

- Timing, size and mix of product and service orders and deliveries by PCR
and other product vendors;

- Timing and size of new projects, including projects for new customers and
changes to existing projects;

- Pricing changes in response to customer demand and various competitive
factors;

- Fluctuations in selling and operating expenses based on our allocated
portion of expenses shared with PCR;

- Costs associated with fixed-price contracts;

- Market factors affecting the availability or costs of qualified technical
personnel;

- Timing and customer acceptance of our new service offerings;

- Changes in trends affecting outsourcing of IT services;

- Length of sales cycle;

- Effect of acquisitions and new branch office openings;

- Changes in personnel, parts inventory and other operating costs; and

- Industry and general economic conditions.

Historically, our revenue growth generally has been lower in the fourth
quarter due to reduced activity during the holiday season and fewer working days
for those customers who curtail operations during such period. We anticipate
that our business will continue to be subject to such seasonal variations.

Many of our costs, such as personnel and facilities costs, are relatively
fixed in nature. Our expense levels are based in part on expectations of future
revenue. As a result, our operating results have been and in the future will
continue to be impacted by changes in technical personnel billing and
utilization rates. Technical personnel utilization rates have been and are
expected to continue to be adversely affected during periods of rapid and
concentrated hiring. In addition, during such periods, we are likely to incur
greater technical training costs. Depending upon the availability of qualified
technical personnel, during periods of rapid growth we have utilized, and are
likely to continue to utilize, contract personnel, which also adversely affects
gross margins. Due to these and other factors, if we are successful in expanding
our service offerings and revenue, periods of variability in utilization are
likely to occur. We believe, therefore, that past operating results and
period-to-period comparisons should not be relied upon as an indication of
future operating performance. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Selected Quarterly Results of
Operations" and "Relationship with PCR."

DEPENDENCE ON INDUSTRY ALLIANCES AND RELATIONSHIPS; CONTINUED AUTHORIZATION TO
PROVIDE MANUFACTURER-AUTHORIZED SERVICES

Our future success depends largely on our relationships with leading
hardware and software vendors and on our status as an authorized service
provider. We maintain service authorizations with many industry-leading
hardware, software and internetworking product vendors, including Bay Networks,
Cisco Systems, Compaq, Computer Associates, Hewlett-Packard, IBM, Microsoft,
Novell and 3Com. Without such authorizations, we would be unable to provide our
current range of services, including warranty services. Since we utilize our
authorizations as a marketing tool, any negative change in these relationships
could adversely affect our financial condition and results of operations while
we seek to establish alternative relationships. Also, we intend to establish
additional alliances and relationships to keep pace with changes in technology
and enhance our service offerings. In general, authorization agreements between
the Company and manufacturers include termination provisions, some of which are
immediate. We cannot assure you that manufacturers will continue to authorize us
as an approved service provider. In addition, we cannot assure you that
companies which introduce new products will authorize us as an approved service
provider for such new products. See "Business -- Strategy."

INTENSE COMPETITION

We compete in rapidly changing markets that are intensely competitive and
highly fragmented. We compete, directly and indirectly, with a variety of
national and regional service providers, including services organizations of
established computer product manufacturers, value added resellers ("VARs"),
systems integrators, internal corporate MIS staffs and, to a lesser extent,
consulting firms, aggregators and distributors.

Many of our current and potential competitors have longer operating
histories and substantially greater financial, marketing, technical and other
resources than we do. As a result, our competitors may be able to adapt more
quickly to changes in customer needs or to devote greater resources to the
provisioning of IT services. Such competitors may attempt to increase their
presence in our markets by forming strategic alliances with other competitors or
our customers, offering new or improved products and services to our customers
or increasing their efforts to gain and retain market share through competitive
pricing. In addition, competition for quality technical personnel has continued
to intensify, resulting in increased personnel costs. Such competition has
adversely affected, and is likely to continue to adversely affect, our gross
profits, margins and results of operations. Furthermore, we believe the barriers
to entry into our markets are relatively low, which enable new competitors to
offer competing services.

We believe that the principal competitive factors in the market for IT
services include technical expertise, the availability of skilled technical
personnel, breadth of service offerings, reputation, financial stability and
price. To be competitive, we must respond promptly and effectively to the
challenges of technological change, evolving standards and our competitors'
innovations by continuing to enhance our service offerings and expand our sales
channels. Any pricing pressures, reduced margins or loss of market share
resulting from our failure to compete effectively could materially adversely
affect our business. See "Business -- Competition."

POTENTIAL LIABILITY TO CUSTOMERS

Many of our projects are critical to the operations of our customers'
businesses and provide benefits that are difficult to quantify. Any material
failure in a customer's computer system could result in a claim for substantial
damages against us, regardless of our responsibility for such failure. We
attempt to contractually limit our liability for damages arising from errors,
mistakes, omissions or negligent acts performed while rendering our services.
However, the limitations of liability set forth in our contracts may not be
enforceable in all instances or may not otherwise protect us from liability for

damages. Additionally, we do not have written contracts with many of our
customers, and therefore we have no contractual limitation of liability. We do
not carry errors and omissions insurance. We intend to pursue such coverage.
However, we cannot assure you that such coverage will be available on terms
acceptable to us. Our business, financial condition and operating results could
decline if customers successfully assert one or more large claims that exceed
available insurance coverage, if any, against us.

MANAGEMENT OF GROWTH

We have experienced substantial growth in revenue, employees and customers
during the past five years. Any future growth is expected to continue to place
significant and increasing demands on our management, operational infrastructure
and technical resources. Our future performance will depend in part on our
ability to finance and manage expanding operations and to adapt our information
systems to changes in our business. If we fail to manage our growth effectively,
it could adversely affect our business, financial condition and results of
operations. Historically, and in the foreseeable future, our management,
operational and other infrastructure resources have been and will continue to be
provided, in large part, by PCR. For the near term, our ability to manage our
growth effectively will depend, in part, upon PCR's timely and complete
performance of its obligations to provide such management, operational and other
infrastructure resources. Over the long term, our ability to manage growth will
depend on our ability to develop independent internal operational, financial and
other systems, as well as our own business development capabilities. In
addition, our ability to maintain and renew existing service contracts and
obtain new business will depend, in large part, on our ability to attract, train
and retain technical personnel with the skills that keep pace with continuing
changes in IT, evolving industry standards and changing customer preferences.
Further, we must train and manage our growing employee base, requiring an
increase in the level of responsibility for both existing and new management
personnel. It is uncertain whether the management skills and systems currently
in place will be adequate or that we will be able to assimilate new employees
successfully. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Overview."

ABSENCE OF PCR FINANCIAL SUPPORT; LIMITED BORROWING CAPACITY

Prior to January 6, 1999, the assets, liabilities, business, operations and
personnel associated with our business did not reside in a single independent
legal entity but were distributed within PCR and our business was operated
within a larger public company. As such, PCR provided all cash and capital
resources required to operate our business. Consequently, we have not
independently maintained or managed any cash or been responsible for obtaining
external sources of financing. Any of our capital requirements in excess of
internally generated funds were financed by PCR internally or through PCR's
equity offerings or credit facilities. While our agreements with PCR permit
intercompany loans, PCR is not obligated to provide cash for our operations.

We have obtained an interim credit facility from Deutsche Financial Services
Corporation. This credit facility is terminable at will by either party. In
addition, we cannot be certain that the credit facility will be sufficient to
meet our current or future needs. The borrowing capacity, interest rate and
other terms of our credit facility are dependent upon the continued satisfaction
of certain terms and conditions by PCR. Upon consummation of this offering, we
intend to replace the interim credit facility with a permanent credit facility.
However, we cannot assure you that we will be able to obtain a new credit
facility or that a new credit facility will be available on terms acceptable to
us. Consequently, our borrowing costs may be higher in the future than is
reflected in our historical financial statements. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources" and "Relationship with PCR."

RISKS ASSOCIATED WITH RAPID TECHNOLOGICAL CHANGE

The market for our services is characterized by rapidly changing technology
and frequent new service introductions. The development and commercialization of
new technologies and the introduction of new services could render our existing
services obsolete or unmarketable. Our continued success will depend on our
ability to attract and retain highly capable technical personnel, to enhance
existing services and to develop, integrate and introduce new service offerings
on a timely and cost-effective basis that keep pace with technological
developments and address increasingly sophisticated customer requirements. We
cannot assure you that we will be successful in identifying, developing,
marketing or implementing new services necessary to keep pace with technological
change. In addition, we may experience contractual or technical difficulties
that could delay or prevent our successful deployment of such new services. See
"Business -- Industry Background."

DEPENDENCE ON KEY PERSONNEL

Our future performance depends to a significant degree upon the continued
service of the key members of our management team, as well as marketing, sales
and technical personnel, and our ability to attract and retain new management
and other personnel. We are particularly dependent upon David B. Pomeroy, II,
Chairman of the Board, Stephen E. Pomeroy, President and Chief Executive
Officer, and Larry H. Lokey, Vice President of Sales, because of their industry
knowledge, marketing skills and relationships with our major vendors, customers
and employees. The loss of the services of any one of them could materially
adversely affect us. We intend to enter into employment agreements with each
executive officer which contain non-competition covenants that extend for a
period of up to one year following termination of employment. Substantially all
of our salespersons and technical personnel have entered into agreements which
contain non-disclosure, non-solicitation and non-competition provisions.
Although we have entered into such agreements, we cannot guarantee that such
agreements are enforceable. In any case, such agreements do not ensure continued
service by such individuals. We cannot be certain that we will retain our key
employees or that the departure of one or more of them would not materially
adversely affect us. Furthermore, we cannot guarantee that we will be successful
in attracting and retaining the new or additional managerial personnel we
require to conduct our operations or to manage growth successfully. We intend to
apply for, maintain, and be the beneficiary of, a life insurance policy on the
life of Stephen E. Pomeroy in the amount of $500,000. We do not intend to
maintain key person life insurance on any of our other executive officers,
salespersons or technical personnel. See "Management -- Key Person Insurance."

RISKS ASSOCIATED WITH NEW SERVICE OFFERINGS

During 1998, we began to offer new services to our clients, including asset
discovery and tracking and advanced UNIX services. All such services constitute
only a small percentage of our total revenue and remain in an early stage of
marketing and customer acceptance. In 1999, we plan to offer additional
services, including advanced systems management. We have had limited previous
experience in developing, marketing or providing new services. In certain cases,
offering new services requires additional training of existing technical
personnel or the hiring of new personnel with the requisite skills. As a result,
we may not be able to develop such capabilities, or such capabilities may not be
developed in a timely and profitable manner. Furthermore, it is uncertain
whether we will be able to successfully market such services to new and existing
clients, or whether we will be able to integrate and manage the additional
technical personnel required to deliver such services or meet client
expectations. See "Business -- Strategy."

POSSIBILITY OF OVER-RUNS ON FIXED-PRICE CONTRACTS

An increasing number of our future projects may be fixed-price contracts
rather than contracts billed on a time-and-materials basis. Currently, many of
our cabling services contracts are fixed-price

contracts. We bear the risk of cost over-runs and inflation in connection with
fixed-price projects. If we fail to: (i) estimate accurately the resources and
time required for a fixed-price project, or (ii) complete the services within
the time frame committed, our business and results of operations could suffer.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations."

DEPENDENCE ON PCR AND OTHER THIRD-PARTY SUPPLIERS AND VENDORS

Our business depends upon the adequate and timely supply to our customers of
hardware and software products from third parties at competitive prices and on
reasonable terms. To date, we have elected to procure substantially all of the
products we use on customer projects from PCR, given our historic relationship
with PCR. We have not entered into any long-term supply contracts with PCR or
other distributors. However, under the Services Agreement, PCR has the right of
first refusal to evaluate and participate in any sales opportunities for
microcomputer hardware and related products which come to our attention. From
time to time, PCR and other third-party suppliers may not be able to supply us
or our customers with products in a timely manner. Any material disruption in
the supply of products from third-party vendors could adversely affect our
results of operations. In addition, we are also dependent on PCR to provide us
with sales leads. If PCR's sales force does not continue to provide us with
sales opportunities, our financial condition and results of operations will be
materially adversely affected. See "Relationship with PCR."

RISKS ASSOCIATED WITH GOVERNMENT CONTRACTS

We derive a portion of our revenue from contracts with state and local
governments and government agencies. In the event of a dispute, we would have
limited recourse against the government or government agency. Furthermore,
future statutes and/or regulations may reduce the profitability of such
contracts. In addition, certain of our government contracts have no contractual
limitation of liability for damages resulting from the provision of our
services. See "Risk Factors -- Potential Liability to Customers."

RISKS ASSOCIATED WITH POTENTIAL ACQUISITIONS

As part of our growth strategy, we intend to pursue acquisitions of IT
services businesses to broaden our service offerings, add technical or sales
personnel, increase our presence in existing markets, expand into new geographic
markets, improve operating efficiencies through economies of scale, establish
strategic relationships and obtain desirable customer relationships. If we buy a
company, selected assets or technologies, we could have difficulty assimilating
acquired personnel, operations, customers or vendors. In addition, one or more
of such personnel, customers or vendors may decide not to work for or continue
to do business with us. These difficulties could disrupt our ongoing business,
distract our management and employees and increase our expenses. Although we
conduct due diligence reviews with respect to all acquisition candidates, we may
not successfully identify all material liabilities or risks related to a
potential acquisition candidate. Furthermore, we may have to incur debt or issue
equity securities to pay for any future acquisitions, the issuance of which
could be dilutive to our existing stockholders. See "Business -- Strategy."

POTENTIAL CONFLICTS OF INTEREST BETWEEN THE COMPANY AND PCR

Our relationship with PCR could create conflicts of interest in a number of
areas including:

- PCR's ability to control our management and affairs;

- Shared sales and marketing functions;

- Indemnification obligations of each of PCR and Pomeroy Select;

- PCR's right to require us to register its shares of our Class A Common
Stock;

- Sales or distributions by PCR of its remaining shares of our Class A or
Class B Common Stock;

- Differing financing needs or goals adversely affecting our borrowing terms
or ability; and

- Differing operational, financial and employee benefit objectives.

Conflicts of interest which may develop between PCR and the Company may not
be resolved in our favor. Pursuant to the Services Agreement with PCR, PCR has
agreed not to engage in activities which are competitive with Pomeroy Select.
This agreement is terminable on relatively short notice. However, PCR's
agreement not to compete with us shall survive for the longer of two years from
the date of the Services Agreement or one year from the date of termination of
the Services Agreement. There can be no assurance that this agreement will
prevent PCR from engaging in competitive activities with us or that we will not
compete with PCR regarding activities not currently engaged in by either
company.

For purposes of governing and defining our ongoing relationship, we have
entered into a number of agreements with PCR which became effective on January
6, 1999. As a result of PCR's ownership interest in Pomeroy Select, the terms of
these agreements were not, and the terms of any future amendments to those
agreements will not be, the result of arm's-length negotiations. Our agreements
with PCR include:

- Space Sharing Agreement: Pomeroy Select and PCR have agreed to share
certain office facilities, including the Company's headquarters and branch
offices;

- Indemnification Agreement: Pomeroy Select and PCR have agreed to indemnify
each other and their respective directors, officers, employees, agents and
representatives for certain liabilities and financial obligations; and

It is our policy and the policy of PCR that services provided to us by PCR
will generally be provided on terms and conditions comparable to those granted
to an unaffiliated third party for similar services. However, because these
agreements were negotiated in the context of a parent-subsidiary relationship,
we cannot guarantee that these agreements, or the transactions with PCR
contemplated by such agreements, will be effected on terms as favorable to us as
could have been obtained from unaffiliated third parties.

Additionally, two of our Directors, David B. Pomeroy, II and Stephen E.
Pomeroy, are also directors of PCR. As a result, such Directors may have
conflicts of interest with respect to matters potentially or actually involving
or affecting Pomeroy Select and PCR. Conflicts of interest and the lack of
arm's-length transactions with PCR could adversely affect our business,
financial condition and results of operations. See "Management" and
"Relationship with PCR."

BROAD DISCRETION IN USE OF PROCEEDS

The primary purposes of this offering are to repay indebtedness under our
credit facility, increase our working and equity capital, create a public market
for the Company's Class A Common Stock, facilitate future access to public
markets, provide incentives for our current and future employees pursuant to our
stock option program and increase our visibility and credibility in our markets.
We currently intend to use approximately $ of the net proceeds of this
offering to repay indebtedness under our credit facility. As of the date of this
Prospectus, we have no specific plans with respect to the use of the remaining
proceeds of this offering. As a consequence, we will have the discretion to
allocate a large percentage of such proceeds to uses that the stockholders may
not deem desirable, and there can be no assurance that the proceeds can or will
be invested to yield a significant return. See "Use of Proceeds."

YEAR 2000 RISKS

BACKGROUND. Many computer programs and embedded chips in other forms of
technology use only the last two digits to identify a year in a date field. As a
result of this design decision, some of these systems could fail to operate or
fail to produce correct results if "00" is interpreted to mean 1900, rather than
2000. These problems are widely expected to increase in frequency and severity
as the year 2000 approaches and are commonly referred to as the "Year 2000
Problem."

ASSESSMENT. We believe our exposure to Year 2000 problems lies primarily in
two areas: (i) our reliance upon PCR's internal operating systems; and (ii) Year
2000 compliance by third parties with whom we have a material relationship. We
have worked with PCR to complete an assessment of its principal internal
systems. However, we are continuing to assess our Year 2000 exposure with
respect to third parties. While the costs of these assessment efforts are not
expected to be material to our financial position or any year's results of
operations, we cannot assure you that this will be the case.

INTERNAL OPERATING SYSTEMS. We have determined that our principal internal
systems are or we believe will be Year 2000 compliant. We are in the process of
testing the Year 2000 compliant versions of the software used in our principal
IT modules and systems. Upon completion of the testing, we will implement the
conversion of the existing software to the Year 2000 compliant versions. In
addition, some of our non-critical applications may not be Year 2000 compliant.
We are conducting a program to identify and resolve any such exposure. Although
the costs related to these efforts are not expected to be material to our
business, financial condition or results of operations, we cannot assure you
that this will be the case.

THIRD-PARTY RELATIONSHIPS. The failure of a supplier to deliver timely Year
2000 compliant products to our customers could jeopardize our ability to meet
our obligations to our customers. We are conducting a program to identify and
resolve Year 2000 exposure from third parties. Any failure of third parties with
whom we have a material relationship to resolve Year 2000 problems with their
products in a timely manner could materially adversely affect our business,
financial condition or results of operations.

RISKS OF OUR YEAR 2000 ISSUES. We expect to identify and resolve all Year
2000 problems that could materially adversely affect our business, financial
condition or results of operations. However, we believe that it is not possible
to determine with complete certainty that all Year 2000 problems affecting us
have been identified or corrected. In addition, we may experience difficulties
with the conversion of our existing software to the Year 2000 compliant
versions. Further, we cannot accurately predict how

many failures related to the Year 2000 Problem will occur or the severity,
duration or financial consequences of such failures. As a result, we expect that
we could possibly suffer the following consequences:

- A significant number of operational inconveniences and inefficiencies for
us and our customers that may divert our time and attention and financial
and human resources from our ordinary business activities; and

- A lesser number of serious system failures that may require significant
efforts by us, our customers or our vendors to prevent or alleviate
material business disruptions.

OUR CONTINGENCY PLANS. We believe our plans for addressing the Year 2000
Problem are adequate. We do not believe we will incur a material financial
impact from system failures, or from the costs associated with assessing the
risks of failure, arising from the Year 2000 Problem. Consequently, we do not
intend to create a detailed contingency plan. In the event that we do not
adequately identify and resolve our Year 2000 issues, the absence of a detailed
contingency plan may materially adversely affect our business, financial
condition and results of operations. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Year 2000 Issues."

POTENTIAL ADVERSE EFFECT ON VALUE AND LIQUIDITY OF CLASS A COMMON STOCK FROM
DISPARATE VOTING RIGHTS OF CLASS A COMMON STOCK AND CLASS B COMMON STOCK

The different voting rights of the Class A Common Stock and Class B Common
Stock both prior to and following the Distribution, if any, could adversely
affect the value of the Class A Common Stock to the extent that investors or any
potential future purchaser of the Class A Common Stock attributes value to the
superior voting rights of the Class B Common Stock. The holders of Class A
Common Stock and Class B Common Stock generally have identical rights except
that (i) holders of Class A Common Stock are entitled to one vote per share
while holders of Class B Common Stock are entitled to ten votes per share on all
matters to be voted on by stockholders, and (ii) holders of Class A Common Stock
are not eligible to vote on any alteration of the powers, preferences, or
special rights of the Class B Common Stock that would not adversely affect the
holders of Class A Common Stock. Holders of Class A Common Stock and Class B
Common Stock are entitled to class votes on amendments to the Certificate of
Incorporation that would alter or adversely affect the powers, preferences or
special rights of the shares of their respective class. See "Description of
Capital Stock."

CONTROL BY PCR; ANTI-TAKEOVER CONSIDERATIONS

Upon completion of this offering, PCR will own 100% of our outstanding Class
B Common Stock ( % of the combined voting power of Pomeroy Select, or % if
the Underwriters exercise in full their right to purchase additional shares in
this offering). As a result, PCR will have the ability to continue to exercise
control with respect to the election of the members of our Board of Directors
and all other corporate actions requiring stockholder approval. See "Principal
Stockholders."

We have an authorized class of shares of undesignated Preferred Stock which
may be issued by the Board of Directors on such terms and with such rights,
preferences and designations as the Board of Directors may determine without
further stockholder action. Issuance of such Preferred Stock, depending upon the
rights, preferences and designations thereof, may have the effect of delaying,
deterring or preventing a change in control of the Company. See "Description of
Capital Stock -- Preferred Stock" and "-- Anti-Takeover Effects of Certain
Certificate of Incorporation and Bylaw Provisions."

Our Certificate of Incorporation and the Delaware General Corporation Law
(the "DGCL") contain provisions that may deter unsolicited takeover proposals or
delay or prevent changes in control or management of the Company, if such
proposals do occur. In addition, these provisions may limit the ability of
stockholders to approve transactions that they may deem to be in their best
interests. The

DGCL also contains provisions preventing certain stockholders from engaging in
business combinations with us, subject to certain exceptions. Furthermore, PCR's
voting control of us means that it must consent to any change in control of the
Company or our Board of Directors.

These provisions have the potential to reduce the value of your shares
because they may:

- Prevent takeover transactions in which stockholders would otherwise
receive a premium over the then-current market price of their shares;

- For so long as PCR continues to own a controlling interest, prevent, and
thereafter, may discourage potential acquirors from making a bid for
Pomeroy Select, including bids at prices above the then-current market
value of the shares; and

- Generally cause a lower valuation of the shares because stockholders
realize the potential for an acquisition at above-market prices is
reduced.

See "Description of Capital Stock -- Anti-Takeover Effects of Certain
Certificate of Incorporation and Bylaw Provisions" and "-- Delaware Law and
Certain Certificate of Incorporation and Bylaw Provisions."

ABSENCE OF PUBLIC MARKET AND POSSIBLE VOLATILITY OF STOCK PRICE

There has not been a public market for the Class A Common Stock prior to
this offering, and we cannot guarantee you that an active trading market in the
Class A Common Stock will develop or, if one develops, that it will be
sustained. The initial public offering price of the Class A Common Stock was
determined through negotiations among Pomeroy Select, PCR and the
representatives of the Underwriters, and may not reflect the price at which the
Class A Common Stock will trade after this offering. In addition, the
possibility of the Distribution, the occurrence of the Distribution or the non-
occurrence of the Distribution could have an effect on the market price of the
Class A Common Stock. The market price of the Class A Common Stock could
fluctuate in response to various factors such as:

- Anticipated quarterly results;

- Changes in earnings estimates by securities analysts;

- Announcements of material events by us, our major customers, our vendors
or our competitors; and

- General industry or economic conditions.

In addition, the stock prices for many technology-related companies,
including IT services providers, have experienced wide fluctuations which often
have been unrelated to operating performance. These broad fluctuations may
adversely affect the market price of the Class A Common Stock. As a result of
any of the reasons listed above, you may be unable to resell your shares of
Class A Common Stock at or above the offering price. See "Risk Factors --
Substantial Variability of Quarterly Operating Results" and "Underwriting."

SHARES ELIGIBLE FOR FUTURE SALE; POTENTIAL ADVERSE IMPACT OF THE DISTRIBUTION

The Distribution, if it occurs, or future sales of substantial amounts of
Class A Common Stock (including shares issuable upon the exercise of stock
options), or the perception that the Distribution or such sales may or may not
occur, could cause the market price of our Class A Common Stock to drop.
Additional shares of Class A Common Stock may become eligible for future sale
under the following circumstances:

- A new offering of Class A Common Stock by us;

- Exercise of options granted under our 1999 Stock Plan; or

- Registration of the shares of Class A Common Stock underlying the Class B
Common Stock owned by PCR or a subsequent holder of such shares.

Upon completion of this offering, we will have shares of Class A
Common Stock outstanding, all of which will be freely tradable by persons other
than "affiliates" of the Company without restriction or further registration
under the Securities Act. All of the outstanding 10,000,000 shares of Class B
Common Stock will be held by PCR. Although such shares may not be sold by PCR
absent registration under the Securities Act or an exemption from such
registration, PCR has advised us that it contemplates that the Distribution, if
it occurs, could be effected without registration under the Securities Act and
that the shares of Class A Common Stock underlying such distributed shares of
Class B Common Stock would thereafter be freely tradable by persons other than
"affiliates" of Pomeroy Select. In addition, following this offering, PCR will
have the contractual right to require us to register under the Securities Act
all shares of Class A Common Stock beneficially owned by PCR. Shares of Class B
Common Stock will not trade publicly because they automatically convert to
shares of Class A Common Stock on any sale or other transfer other than the
Distribution and certain other permitted transfers. See "Description of Capital
Stock -- Common Stock." Pomeroy Select, its Directors and officers, and PCR have
agreed not to offer, sell or otherwise dispose of any shares of Common Stock
(other than any shares issued by the Company pursuant to acquisitions of
businesses) for a period of 180 days after the date of this Prospectus without
the prior written consent of NationsBanc Montgomery Securities LLC. See
"Principal Stockholders," "Shares Eligible for Future Sale" and "Underwriting."

IMMEDIATE AND SUBSTANTIAL DILUTION

The offering price of shares of the Class A Common Stock is substantially
higher than the book value per share of the Class A Common Stock. As a result,
purchasers of shares of the Class A Common Stock in this offering will incur
immediate and substantial dilution. See "Dilution."

ABSENCE OF DIVIDENDS

We have never paid cash dividends and do not anticipate paying any cash
dividends on our Common Stock for the foreseeable future. Our interim credit
facility restricts our ability to pay cash dividends. See "Dividend Policy."

USE OF PROCEEDS

The net proceeds to the Company from the sale of the shares of Class
A Common Stock being offered hereby are estimated to be approximately $
($ if the Underwriters exercise in full their over-allotment option),
assuming an initial public offering price of $ per share, after deducting
the underwriting discounts and commissions and estimated offering expenses
payable by the Company.

The primary purposes of this offering are to repay indebtedness under the
Company's credit facility, increase the Company's working and equity capital,
create a public market for the Company's Class A Common Stock, facilitate access
to public markets, provide incentives for our current and future employees
pursuant to the Company's stock option programs and increase the Company's
visibility and credibility in its markets. The Company currently intends to use
approximately $ of the net proceeds to repay indebtedness under the
Company's credit facility with Deutsche Financial Services Corporation. The
Company's credit facility carries an interest rate equal to the prime rate minus
1.25% per annum, subject to adjustment based on PCR's aggregate monthly
borrowing volume under its Distribution Financial Facility with Deutsche
Financial Services Corporation. At January 6, 1999, the interest rate was 6.50%
per annum and the outstanding balance was approximately $18.0 million. The
Company utilizes the credit facility primarily for working capital. The
anticipated repayment of debt will increase the availability of bank credit for
future working capital needs and general business purposes. The Company expects
to use the remaining net proceeds from the offering for working capital and
other general corporate purposes, including expansion of the Company's sales and
marketing and customer support activities and capital expenditures. Other than
the repayment of debt, the Company currently has no specific plans for the use
of the proceeds of the offering. See "Risk Factors -- Broad Discretion in Use of
Proceeds."

The Company may also use a portion of the net proceeds to finance
acquisitions that complement the Company's business. Currently, however, the
Company does not have any understandings, commitments or agreements with respect
to any such acquisitions. Pending application of the net proceeds for the
purposes described above, the Company intends to invest such funds in
short-term, investment-grade, interest bearing securities.

DIVIDEND POLICY

The Company has never declared or paid any cash dividends on its Common
Stock. The Company currently anticipates that it will retain any future earnings
to fund future growth and development of its business and, therefore, does not
anticipate paying any cash dividends in the foreseeable future. Payment of
future dividends, if any, will be at the discretion of the Company's Board of
Directors after taking into account various factors, including the Company's
earnings, financial condition, operating results and current and anticipated
cash needs, as well as any economic conditions the Board of Directors may deem
relevant. The Company's interim credit facility with Deutsche Financial Services
Corporation restricts our ability to pay cash dividends. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources."

CAPITALIZATION

The following table sets forth, as of October 5, 1998, (i) the pro forma
capitalization of the Company adjusted to give effect to the transfer of certain
assets and liabilities of PCR to the Company and the issuance of 10,000,000
shares of Class B Common Stock by the Company to PCR on January 6, 1999, and
(ii) as adjusted for the sale by the Company of shares of Class A Common
Stock offered hereby, assuming an initial public offering price of $ per
share, after deducting underwriting discounts and commissions and estimated
offering expenses payable by the Company and the application of the estimated
net proceeds therefrom. You should read this table in conjunction with "Selected
Historical Financial Data," our historical financial statements, including the
notes thereto, and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" which appear elsewhere in this Prospectus.

AS OF OCTOBER 5, 1998
------------------------
PRO FORMA
PRO FORMA AS ADJUSTED
----------- -----------
(IN THOUSANDS)
(UNAUDITED)

Short-term debt(1)........................................................................ $ 18,315 $
Long-term debt(2)......................................................................... 207
Stockholder's equity(3):
Class A Common Stock: $0.01 par value, 30,000,000 shares authorized; no shares issued
and outstanding, shares issued and outstanding pro forma as adjusted(4)........... -
Class B Common Stock: $0.01 par value, 15,000,000 shares authorized 10,000,000 shares
issued and outstanding................................................................ 100
Preferred Stock: $0.01 par value, 5,000,000 shares authorized; no shares issued and
outstanding........................................................................... -
Additional paid-in capital................................................................ 12,512
Retained earnings......................................................................... -
----------- -----------
Total stockholder's equity............................................................ 12,612
----------- -----------
Total capitalization(5)............................................................... $ 31,134 $
----------- -----------
----------- -----------

- ------------------------

(1) Short-term debt includes the current portion of notes payable and bank note
payable. Bank note payable represents the impact of the actual contribution
of the short-term debt to the Company by PCR which occurred on January 6,
1999 as if it had occurred on October 5, 1998.

(2) Represents the Company's allocated share of PCR's debt related to
acquisitions consummated by PCR prior to January 6, 1999.

(3) Reflects the incorporation of the Company on December 14, 1998.

(4) Excludes 620,000 shares subject to outstanding options to purchase Class A
Common Stock granted on January 6, 1999 at an exercise price per share equal
to the initial public offering price per share.

(5) Consists of short-term debt, long-term debt and total stockholder's equity.

DILUTION

The pro forma net tangible book value of the Company as of October 5, 1998
was $5.8 million, or $0.58 per share of Common Stock. Pro forma net tangible
book value per share is determined by dividing the Company's pro forma tangible
net worth (tangible assets less liabilities), by the number of shares of pro
forma Common Stock outstanding. After giving effect to the sale of the shares of
Class A Common Stock offered by the Company hereby (at an assumed initial public
offering price of $ per share) and after deducting the underwriting
discounts and commissions and estimated offering expenses payable by the
Company, the pro forma net tangible book value of the Company as of October 5,
1998 was $ per share of Common Stock. This represents an immediate increase
in such pro forma net tangible book value of $ per share to existing holders
and immediate dilution of $ per share to new investors purchasing shares in
this offering. The following table illustrates the per share dilution.

Assumed initial public offering price per share........... $
Pro forma net tangible book value per share as of
October 5, 1998....................................... $ 0.58
Increase per share attributable to this offering........
---------
Pro forma net tangible book value per share after this
offering................................................
---------
Dilution per share to new investors....................... $
---------
---------

The following table summarizes, on a pro forma basis as of October 5, 1998,
the total number of shares of Common Stock purchased from the Company, the total
consideration paid and the average consideration per share paid by the
stockholder and by new investors purchasing shares offered by the Company
hereby, at an assumed initial public offering price of $ per share:

TOTAL CONSIDERATION
SHARES PURCHASED
------------------------ ---------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
----------- ----------- --------- ----------- -------------

Existing stockholder(1)............................ % $ % $
New investors...................................... % % $
----------- ----- --------- -----
Total.......................................... 100.0% $ 100.0%
----------- ----- --------- -----
----------- ----- --------- -----

- ------------------------

(1) Excludes 620,000 shares subject to outstanding options to purchase Class A
Common Stock granted on January 6, 1999 at an exercise price per share equal
to the initial public offering price per share.

SELECTED HISTORICAL FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

The following selected historical financial data with respect to the
Company's statements of income for the years ended January 5, 1996, 1997 and
1998 and for the nine months ended October 5, 1998 and with respect to the
Company's balance sheets as of January 5, 1997, January 5, 1998 and October 5,
1998 have been derived from the Company's Financial Statements which have been
audited by Grant Thornton, LLP, independent accountants, which appear elsewhere
in this Prospectus. The selected financial data as of January 5, 1994 and 1995,
and for the years then ended, and as of October 5, 1997, and for the nine-month
period then ended, are derived from unaudited financial statements of the
Company. In the opinion of management, the unaudited results of operations for
such periods include all adjustments, consisting only of normal recurring
accruals, necessary for a fair presentation of the information. The results of
operations for the nine months ended October 5, 1998 are not necessarily
indicative of the results that may be expected for the full year. The selected
historical financial data reflects the results of operations, financial position
and cash flows of the business transferred to the Company from PCR. The selected
historical data is presented as if the Company had existed as a corporation
separate from PCR during the periods presented and includes the historical
assets, liabilities, sales and expenses directly related to the Company's
operations that were either specifically identifiable or allocable using
methodologies which took into consideration the ratio of the Company's gross
profit contribution to the consolidated gross profit of PCR and other
appropriate factors. The following information is qualified by reference to, and
should be read in conjunction with, "Capitalization," "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and the Company's
audited financial statements and notes thereto and the unaudited condensed
financial statements and notes thereto included elsewhere herein.

NINE MONTHS ENDED
YEARS ENDED JANUARY 5, OCTOBER 5,
--------------------------------------------------------- ----------------------
1994 1995 1996 1997 1998 1997 1998
----------- ----------- --------- --------- --------- ----------- ---------
(UNAUDITED) (UNAUDITED) (UNAUDITED)

STATEMENT OF INCOME DATA:
Revenue................................ $ 8,706 $ 13,103 $ 17,243 $ 26,396 $ 45,209 $ 31,903 $ 51,401
Cost of revenue........................ 4,454 7,305 10,123 16,487 27,137 18,418 30,633
----------- ----------- --------- --------- --------- ----------- ---------
Gross profit....................... 4,252 5,798 7,120 9,909 18,072 13,485 20,768
Operating expenses:
Selling, general and administrative
expenses............................. 2,984 4,167 5,089 6,199 11,457 8,634 12,439
Depreciation and amortization.......... 76 146 198 338 582 375 737
----------- ----------- --------- --------- --------- ----------- ---------
Total operating expenses........... 3,060 4,313 5,287 6,537 12,039 9,009 13,176
----------- ----------- --------- --------- --------- ----------- ---------
Operating income................... 1,192 1,485 1,833 3,372 6,033 4,476 7,592
Other expense, net..................... 331 85 133 130 110 121 292
----------- ----------- --------- --------- --------- ----------- ---------
Income before provision for income
taxes................................ 861 1,400 1,700 3,242 5,923 4,355 7,300
Provision for income taxes............. 354 567 690 1,323 2,180 1,603 2,701
----------- ----------- --------- --------- --------- ----------- ---------
Net income......................... $ 507 $ 833 $ 1,010 $ 1,919 $ 3,743 $ 2,752 $ 4,599
----------- ----------- --------- --------- --------- ----------- ---------
----------- ----------- --------- --------- --------- ----------- ---------
Pro forma net income per share......... $ 0.37 $ 0.46
Pro forma weighted average shares(1)... 10,000 10,000

AS OF JANUARY 5, AS OF OCTOBER 5,
----------------------------------------------------------- ----------------------
1994 1995 1996 1997 1998 1997 1998
----------- ----------- ----------- --------- --------- ----------- ---------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)

BALANCE SHEET DATA:
Working capital (deficit)........... $ (85) $ 477 $ 1,076 $ 100 $ 2,497 $ 1,801 $ 4,146
Total assets........................ 4,359 7,432 8,500 17,682 24,702 28,546 37,185
Bank note payable................... 1,464 1,410 1,651 731 1,630 785 7,409
Due to parent....................... - 750 - 6,614 6,588 12,774 6,158
Stockholder's equity................ 508 1,340 2,351 4,270 8,013 7,022 12,612

- --------------------------
(1) Assumes that all 10,000,000 shares of Class B Common Stock issued to PCR on
January 6, 1999 were outstanding for the entire period. See "Prospectus
Summary -- Summary of Relationship with PCR."

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Pomeroy Select is a single-source provider of integrated desktop management
and network services that help corporate clients manage their IT assets. Pomeroy
Select provided IT services to more than 2,100 customers in the nine months
ended October 5, 1998. The Company's customers generally range from mid-sized
organizations to Fortune 500 companies in a wide variety of industries. We
deliver our services nationally through over 900 technical and engineering
personnel located in 30 offices. For the nine months ended October 5, 1998, none
of the Company's customers represented more than 5% of the Company's revenue.
Over the four-year period ended January 5, 1998, the Company's revenue grew at a
compounded annual growth rate of 51.0%, principally due to expansion of our
geographic markets, increased business with existing customers, increased demand
for life cycle services, acquisitions and, to a lesser extent, increased demand
for internetworking services. For the nine-month period ended October 5, 1998,
the Company's revenue grew by 61.1% over the comparable nine-month period for
the prior year, principally due to expansion of our geographic markets and
increased demand for internetworking and life cycle services by both new and
existing customers.

The Company's services range from single engagements to long-term projects
involving multiple personnel. The Company provides these services to its
customers primarily on a time-and-materials basis and pursuant to written
contracts or purchase orders. The Company's arrangements can be terminated with
limited advance notice, typically not more than 30 days, upon payment of fees
due to and expenses incurred by the Company through the date of termination. The
Company also provides some of its services under fixed-price contracts rather
than contracts billed on a time-and-materials basis. Fixed-price contracts are
used when the Company believes it can clearly define the scope of services to be
provided and the cost of providing those services. See "Risk Factors --
Possibility of Over-runs on Fixed-Price Contracts." Revenue is recognized as
services are performed or ratably over the term of the particular contract. The
Company generally bills its customers monthly for services provided by its
technical personnel at contracted rates. In some cases, the Company bills in
advance on a quarterly, semi-annual or annual basis for maintenance, extended
service and certain other service contracts. Where contractual provisions
permit, customers also are billed for reimbursement of expenses incurred by the
Company on the customer's behalf.

The Company's most significant cost is technical personnel payroll. Thus,
the Company's financial performance is based primarily upon billing margin
(billable hourly rate less the cost to the Company of a technician or systems
engineer on an hourly basis) and personnel utilization rates (actual billable
hours divided by available work hours.)

The Company is actively seeking to expand the size and enhance the quality
of its direct sales force which currently consists of 24 persons. By hiring
additional highly qualified sales personnel, the Company intends to establish
name recognition and promote its reputation as a high-quality, single-source IT
services provider. The Company also has a right of first refusal on all services
business generated by sales personnel of PCR. The Company's agreement with PCR
provides PCR's sales force with performance-based commissions and bonuses for
continuing to generate IT services revenue for the Company. The Company's
inability to expand its independent sales and marketing activities may adversely
impact the Company's future growth.

general management, occupancy, marketing, insurance, information management and
other miscellaneous services. In addition, other expenses such as depreciation,
amortization and bad debt reserve were allocated based on management's best
estimate of actual expenses.

Since the transfer of the assets, liabilities, business, operations and
personnel comprising the Company on January 6, 1999 (the "Formation
Transaction"), except as set forth in "Relationship with PCR," the Company has
managed the various required administrative functions using its own resources or
contracted with third parties to perform these services. In addition, the
Company is now responsible for the costs and expenses associated with the
management of a publicly traded corporation.

Since January 6, 1999, certain expenses such as payroll relating to PCR
branch managers, utilities, property taxes, insurance premiums and other
applicable taxes, licenses and fees have been allocated by the Company and PCR
based on the ratio of the Company's gross profit contribution to the
consolidated gross profit of PCR and its subsidiaries, including the Company. In
addition, the Company and PCR have agreed to allocate the consolidated sales
commissions of PCR and its subsidiaries, including the Company. The Company's
portion of such sales commissions is based on the average of (i) the ratio of
the Company's gross profit contribution to the consolidated gross profit of PCR
and its subsidiaries, including the Company, and (ii) the ratio of the Company's
net revenue contribution to such consolidated net revenue. As a result, in the
event that the Company's share of gross profit and revenue relative to that of
PCR changes, the Company's operating expenses may increase or decrease in a
manner that is not directly related to the Company's financial performance. In
addition, PCR provides certain administrative services such as MIS, accounting,
marketing, legal and insurance services to the Company for an annual fee equal
to the greater of $450,000 or 0.45% of the Company's annual revenue. See
"Relationship with PCR."

With respect to income taxes, historically, all tax returns have been filed
by PCR. For historical periods, the Company's share of the tax expense has been
allocated to the Company based on the effective tax rate for the PCR
consolidated group and may not reflect the tax expense that would have been
incurred if the Company had operated as a stand-alone, publicly-held entity.
However, the Company believes that the difference would not have been material
had the income tax expense for the Company been calculated on a separate basis.
Upon completion of this offering, we anticipate that the Company will not be
eligible to file as part of the PCR consolidated group for federal income tax
purposes and with respect to some states.

Although the Company believes that the allocations and charges for the
expenses shared between the Company and PCR are reasonable, these costs are not
necessarily indicative of the costs that would have been incurred if the Company
had operated as a stand-alone, publicly-held entity, and may not be indicative
of the actual expenses that would have been incurred by the Company. As a
result, the financial information included herein may not necessarily reflect
what the results of operations, financial position and cash flows would have
been had the Company been a separate, stand-alone, publicly-held entity during
the periods presented or be indicative of the results of operations, financial
position and cash flows of the Company in the future. The financial information
included herein also does not reflect potential changes that may occur in the
operations and funding of the Company as a result of and subsequent to the
Formation Transaction and this offering.

RESULTS OF OPERATIONS

The following table sets forth for the periods indicated certain financial
data as a percentage of revenue:

PERCENTAGE OF REVENUE
---------------------------------------------------------
NINE MONTHS ENDED
YEARS ENDED JANUARY 5, OCTOBER 5,
------------------------------- ------------------------
1996 1997 1998 1997 1998
--------- --------- --------- ------------- ---------
(UNAUDITED)

Revenue......................................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of revenue............................... 58.7 62.5 60.0 57.7 59.6
--------- --------- --------- ----- ---------
Gross profit................................ 41.3 37.5 40.0 42.3 40.4

Operating expenses:
Selling, general and administrative
expenses.................................... 29.5 23.5 25.4 27.1 24.2
Depreciation and amortization................. 1.1 1.2 1.3 1.2 1.4
--------- --------- --------- ----- ---------
Total operating expenses.................... 30.6 24.7 26.7 28.3 25.6
--------- --------- --------- ----- ---------
Operating income............................ 10.7 12.8 13.3 14.0 14.8

Other expenses (income), net:
Interest expense.............................. 0.9 0.7 0.2 0.3 0.7
Other expense (income)........................ (0.1) (0.2) 0.0 0.1 (0.1)
--------- --------- --------- ----- ---------
Total other expenses........................ 0.8 0.5 0.2 0.4 0.6
--------- --------- --------- ----- ---------
Income before provision for income taxes........ 9.9 12.3 13.1 13.6 14.2
Provision for income taxes...................... 4.0 5.0 4.8 5.0 5.3
--------- --------- --------- ----- ---------
Net income.................................. 5.9% 7.3% 8.3% 8.6% 8.9%
--------- --------- --------- ----- ---------
--------- --------- --------- ----- ---------

NINE MONTHS ENDED OCTOBER 5, 1997 COMPARED TO NINE MONTHS ENDED OCTOBER 5,
1998

REVENUE. Revenue increased by 61.1%, or $19.5 million, from $31.9 million
for the nine months ended October 5, 1997 to $51.4 million for the nine months
ended October 5, 1998. The increase in revenue resulted principally from
expansion of the Company's geographic markets and increased demand for
internetworking and life cycle services by both new and existing customers.

GROSS PROFIT. Cost of revenue consists primarily of salaries for billable
technical professionals. Costs associated with providing the Company's services
are recorded when incurred. Cost of revenue increased by 66.3%, or $12.2
million, from $18.4 million for the nine months ended October 5, 1997 to $30.6
million for the nine months ended October 5, 1998. This increase was primarily
attributable to increased personnel costs resulting from the hiring of
additional technical personnel to support the increased demand for the Company's
services. The Company's gross profit increased by 54.0%, or $7.3 million, from
$13.5 million for the nine months ended October 5, 1997 to $20.8 million for the
nine months ended October 5, 1998. Gross profit margin decreased from 42.3% of
revenue during the nine months ended October 5, 1997 to 40.4% of revenue for the
nine months ended October 5, 1998. The decrease in gross profit margin was
attributable primarily to the implementation of a strategic decision during the
1998 period to increase sales by aggressively pricing certain service offerings
resulting in lower billing margins.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses consist primarily of sales and sales management
compensation, administrative salaries, and other operating costs, principally
rent, utilities and marketing. Selling, general and administrative expenses
increased by

44.1%, or $3.8 million, from $8.6 million for the nine months ended October 5,
1997 to $12.4 million for the nine months ended October 5, 1998, but decreased
as a percentage of revenue from 27.1% for the nine months ended October 5, 1997
to 24.2% for the nine months ended October 5, 1998. The increase in total
dollars of selling, general and administrative expenses was primarily
attributable to an increase in those expenses which vary directly with revenue,
such as commissions. The decrease of selling, general and administrative
expenses as a percentage of revenue was a result of revenue increasing at a
faster rate than such expenses.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization consist of
depreciation expense related to furniture, fixtures and equipment and
amortization of intangibles. Depreciation and amortization increased by 96.5%,
or $362,000, from $375,000 for the nine months ended October 5, 1997 to $737,000
for the nine months ended October 5, 1998 and increased as a percentage of
revenue from 1.2% for the nine months ended October 5, 1997 to 1.4% for the nine
months ended October 5, 1998. These increases were due to depreciation for
equipment additions and increased amortization of goodwill related to
acquisitions.

OTHER EXPENSE (INCOME), NET. Other expense (income), net consists primarily
of interest expense. Interest expense was allocated to the Company from PCR
based on the working capital and operating needs of the Company. Other expense,
net increased by 141.3%, or $171,000 from $121,000 for the nine months ended
October 5, 1997 to $292,000 for the nine months ended October 5, 1998.

PROVISION FOR INCOME TAXES. The provision for income taxes was based on the
Company's proportionate share of the tax expense based on the effective tax rate
for the PCR consolidated group. Provision for income taxes increased by 68.5%,
or $1.1 million, from $1.6 million for the nine months ended October 5, 1997 to
$2.7 million for the nine months ended October 5, 1998. This increase was
primarily a result of higher income before provision for income taxes. The
effective income tax rate increased from 36.8% for the nine months ended October
5, 1997 to 37.0% for the nine months ended October 5, 1998.

YEAR ENDED JANUARY 5, 1997 COMPARED TO YEAR ENDED JANUARY 5, 1998

REVENUE. Revenue increased by 71.3%, or $18.8 million, from $26.4 million
for the year ended January 5, 1997 to $45.2 million for the year ended January
5, 1998. This increase resulted principally from expansion of our geographic
markets, increased business with existing customers and increased demand for
internetworking and life cycle services.

GROSS PROFIT. Cost of revenue increased by 64.6%, or $10.7 million, from
$16.5 million for the year ended January 5, 1997 to $27.1 million for the year
ended January 5, 1998 as a result of increased personnel costs resulting from
the hiring of technical personnel to support the increased demand for the
Company's services. The Company's gross profit increased by 82.4%, or $8.2
million, from $9.9 million for the year ended January 5, 1997 to $18.1 million
for the year ended January 5, 1998. Gross profit margin increased from 37.5% of
revenue for the year ended January 5, 1997 to 40.0% of revenue for the year
ended January 5, 1998. The increase in gross profit margin was primarily
attributable to a combination of improved billing margins and greater billable
personnel utilization.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased by 84.8%, or $5.3 million, from $6.2 million
for the year ended January 5, 1997 to $11.5 million for the year ended January
5, 1998, and increased as a percentage of revenue from 23.5% for the year ended
January 5, 1997 to 25.4% for the year ended January 5, 1998. These increases
were primarily due to growth in sales commissions as revenue increased and a
higher level of administrative staffing and related personnel costs necessary to
manage the Company's revenue growth.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased by
72.2%, or $244,000, from $338,000 for the year ended January 5, 1997 to $582,000
for the year ended January 5, 1998, and increased as a percentage of revenue
from 1.2% for the year ended January 5, 1997 to 1.3% for the year ended January
5, 1998. These increases were due to depreciation for equipment additions and
increased amortization of goodwill related to acquisitions.

OTHER EXPENSE (INCOME), NET. Other expense (income), net remained
relatively constant at $130,000 and $110,000, for each of the years ended
January 5, 1997 and 1998, respectively.

PROVISION FOR INCOME TAXES. Provision for income taxes increased by 64.8%,
or $857,000, from $1.3 million for the year ended January 5, 1997 to $2.2
million for the year ended January 5, 1998. The increase was primarily due to
substantially higher income before provision for income taxes for the year ended
January 5, 1998. The effective tax rate decreased from 40.8% for the year ended
January 5, 1997 to 36.8% for the year ended January 5, 1998. This decrease was
due to a lower effective tax rate for the PCR consolidated group resulting
primarily from state tax credits.

YEAR ENDED JANUARY 5, 1996 COMPARED TO YEAR ENDED JANUARY 5, 1997

REVENUE. Revenue increased by 53.1%, or $9.2 million, from $17.2 million
for the year ended January 5, 1996 to $26.4 million for the year ended January
5, 1997. This increase resulted principally from expansion of our geographic
markets, increased business with existing customers, increased demand for life
cycle services and acquisitions.

GROSS PROFIT. Cost of revenue increased by 62.9%, or $6.4 million, from
$10.1 million for the year ended January 5, 1996 to $16.5 million the year ended
January 5, 1997. This increase was primarily attributable to increased personnel
costs resulting from the hiring of additional technical personnel to support the
increased demand for the Company's services. The Company's gross profit
increased by 39.2%, or $2.8 million, from $7.1 million for the year ended
January 5, 1996 to $9.9 million for the year ended January 5, 1997. Gross profit
margin decreased from 41.3% for the year ended January 5, 1996 to 37.5% for the
year ended January 5, 1997. This decrease was primarily attributable to the
increased costs for technical personnel and lower utilization rates during a
period of concentrated hiring.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased by 21.8%, or $1.1 million, from $5.1 million
for the year ended January 5, 1996 to $6.2 million for the year ended January 5,
1997 but decreased as a percentage of revenue, from 29.5% for the year ended
January 5, 1996 to 23.5% for the year ended January 5, 1997. The decrease as a
percentage of revenue was as a result of revenue increasing at a faster rate
than such expenses.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased by
70.7%, or $140,000, from $198,000 for the year ended January 5, 1996 to $338,000
for the year ended January 5, 1997, and increased as a percentage of revenue
from 1.1% for the year ended January 5, 1996 to 1.2% for the year ended January
5, 1997. These increases were primarily due to increased amortization of
goodwill related to acquisitions.

OTHER EXPENSE (INCOME), NET. Other expense (income), net remained
relatively constant at $133,000 and $130,000 for each of the years ended January
5, 1996 and 1997, respectively.

PROVISION FOR INCOME TAXES. Provision for income taxes increased by 91.7%,
or $633,000, from $690,000 for the year ended January 5, 1996 to $1.3 million
for the year ended January 5, 1997, while the effective tax rate for the PCR
consolidated group increased from 40.6% for the year ended January 5, 1996 to
40.8% for the year ended January 5, 1997.

SELECTED QUARTERLY RESULTS OF OPERATIONS

The following table presents certain condensed unaudited quarterly financial
information for each of the seven quarters ended October 5, 1998. This
information is derived from unaudited financial statements of the Company that
include, in the opinion of the Company, all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation of results of
operations for such periods, when read in conjunction with the financial
statements of the Company and notes thereto appearing elsewhere in this
Prospectus.

QUARTER ENDED
-----------------------------------------------------------------------------------
APRIL 5, JULY 5, OCTOBER 5, JANUARY 5, APRIL 5, JULY 5, OCTOBER 5,
1997 1997 1997 1998 1998 1998 1998
----------- --------- ----------- ----------- --------- --------- -----------
(IN THOUSANDS)

Revenue............................. $ 9,101 $ 10,277 $ 12,524 $ 13,306 $ 14,787 $ 16,781 $ 19,833
Cost of revenue..................... 5,492 5,785 7,320 8,540 9,299 10,271 11,064
----------- --------- ----------- ----------- --------- --------- -----------
Gross profit...................... 3,609 4,492 5,204 4,766 5,488 6,510 8,769

Operating expenses:
Selling, general and
administrative expenses......... 2,350 2,748 3,165 3,194 3,406 4,090 4,943
Depreciation and amortization..... 126 131 151 173 188 231 317
----------- --------- ----------- ----------- --------- --------- -----------
Total operating expenses........ 2,476 2,879 3,316 3,367 3,594 4,321 5,260
----------- --------- ----------- ----------- --------- --------- -----------
Operating income.................. 1,133 1,613 1,888 1,399 1,894 2,189 3,509
Other expense, net.................. 22 60 4 24 63 132 97
----------- --------- ----------- ----------- --------- --------- -----------

Income before provision for income
taxes............................. 1,111 1,553 1,884 1,375 1,831 2,057 3,412
Provision for income taxes.......... 409 572 693 506 678 761 1,262
----------- --------- ----------- ----------- --------- --------- -----------
Net income........................ $ 702 $ 981 $ 1,191 $ 869 $ 1,153 $ 1,296 $ 2,150
----------- --------- ----------- ----------- --------- --------- -----------
----------- --------- ----------- ----------- --------- --------- -----------

AS A PERCENTAGE OF TOTAL REVENUE:
Revenue............................. 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of revenue..................... 60.3 56.3 58.5 64.2 62.9 61.2 55.8
----------- --------- ----------- ----------- --------- --------- -----------
Gross profit...................... 39.7 43.7 41.5 35.8 37.1 38.8 44.2
Operating expenses:
Selling, general and
administrative expenses......... 25.8 26.7 25.2 24.0 23.0 24.4 24.9
Depreciation and amortization..... 1.4 1.3 1.2 1.3 1.3 1.4 1.6
----------- --------- ----------- ----------- --------- --------- -----------
Total operating expenses........ 27.2 28.0 26.4 25.3 24.3 25.8 26.5
----------- --------- ----------- ----------- --------- --------- -----------
Operating income.................. 12.5 15.7 15.1 10.5 12.8 13.0 17.7
Other expense, net.................. 0.3 0.6 0.1 0.2 0.4 0.7 0.5
----------- --------- ----------- ----------- --------- --------- -----------
Income before provision for income
taxes............................. 12.2 15.1 15.0 10.3 12.4 12.3 17.2
Provision for income taxes.......... 4.5 5.6 5.5 3.8 4.6 4.6 6.4
----------- --------- ----------- ----------- --------- --------- -----------
Net income........................ 7.7% 9.5% 9.5% 6.5% 7.8% 7.7% 10.8%
----------- --------- ----------- ----------- --------- --------- -----------
----------- --------- ----------- ----------- --------- --------- -----------

The Company's historical operating results have varied substantially from
quarter to quarter, and the Company expects that they will continue to do so.
Due to the relatively fixed nature of certain of the Company's costs, including
technical personnel payroll and facilities costs, a decline in revenue in any
fiscal quarter would result in lower profitability in that quarter. Many
factors, some of which are not within our control, may contribute to
fluctuations in operating results. These factors include the following:

- Variations in billing margins and personnel utilization rates;

- Short-term nature of customers' commitments;

- Patterns of IT-oriented capital spending by customers;

- Seasonal impact on projects for customers;

- Hiring patterns by the Company;

- Timing, size and mix of product and service orders and deliveries by PCR
and other product vendors;

- Timing and size of new projects, including projects for new customers and
changes to existing projects;

- Pricing changes in response to customer demand and various competitive
factors;

- Costs associated with fixed-price contracts;

- Fluctuations in selling and operating expenses based on our allocated
portion of expenses shared with PCR;

- Market factors affecting the availability or costs of qualified technical
personnel;

- Timing and customer acceptance of our new service offerings;

- Changes in trends affecting outsourcing of IT services;

- Length of sales cycle;

- Effect of acquisitions and new branch office openings;

- Changes in personnel, parts inventory and other operating costs; and

- Industry and general economic conditions.

The Company believes, therefore, that past operating results and
period-to-period comparisons should not be relied upon as an indication of
future performance. Historically, growth of the Company's revenue generally has
been lower in the fourth quarter due to reduced activity during the holiday
season and fewer working days for those customers who curtail operations during
such period. The Company anticipates that its business will continue to be
subject to such seasonal variations.

BACKLOG

The Company generally enters into written contracts or purchase orders with
its customers at the time it commences work on a project. However, the Company
does not generally believe it is appropriate to characterize such arrangements
as creating backlog. These arrangements often can be terminated with limited
advance notice and without penalty. The Company, therefore, does not believe
that projects in process at any one time are a reliable indicator or measure of
expected future revenue. In the event that a customer terminates a project, the
customer remains obligated to pay the Company for services performed and any
expenses incurred through the date of termination.

LIQUIDITY AND CAPITAL RESOURCES

Prior to the completion of this offering, PCR provided all cash and capital
resources required to operate the Company's business. Consequently, the Company
has not independently maintained or managed any cash or been responsible for
obtaining external sources of financing. Any of the Company's capital
requirements in excess of internally generated funds were financed by PCR
internally or through PCR's equity offerings or credit facilities. See
"Relationship with PCR -- Contractual Arrangements." Upon consummation of this
offering, the Company will need to meet its cash needs from internal operations,
access to credit and the proceeds of this offering.

Prior to January 6, 1999, when the Company's business was still operated
within PCR, PCR's credit facility provided for the working capital needs related
to the Company's business. In connection with the Formation Transaction, a
portion of the outstanding indebtedness under the PCR credit facility was
assumed by the Company. As a result of obtaining an interim credit facility with
Deutsche Financial Services Corporation, the Company's assets no longer
collateralize PCR's credit facility. However, substantially all of the Company's
assets now collateralize its interim credit facility with Deutsche Financial
Services Corporation.

Effective January 6, 1999, the Company entered into an agreement for an
interim credit facility with Deutsche Financial Services Corporation, the
primary lender to PCR. The credit facility is terminable at will by either
party. This credit facility allows the Company to borrow up to the lesser of
$20.0 million or the maximum borrowing capacity as calculated under the credit
facility. PCR has agreed to reserve certain of its assets to serve as collateral
in order to maintain the Company's maximum borrowing capacity of $20.0 million.
Absent such agreement, at January 6, 1999, the Company's maximum borrowing
capacity under the credit facility would have been $10.0 million. The Company's
outstanding balance under such credit facility as of January 6, 1999 was
approximately $18.0 million. The Company's credit facility carries an interest
rate equal to the prime rate minus 1.25% per annum; provided, however, that if
at any time the aggregate monthly volume under the Distribution Finance Facility
between PCR and Deutsche Financial Services Corporation is less than $20.0
million per month for a three-month consecutive period, then for the following
month and for every month thereafter until the month after such aggregate volume
again exceeds $20.0 million per month for a three-month consecutive period, the
interest rate shall equal the prime rate minus 0.50% per annum. At January 6,
1999, the interest rate was 6.50% per annum. PCR has also guaranteed the entire
amount of the credit facility which is secured by all of the assets of PCR. In
addition, certain of the financial covenants are determined on a consolidated
basis.

Upon consummation of this offering, the Company intends to replace the
interim credit facility with a permanent credit facility. There can be no
assurance that the Company will be able to obtain a new credit facility or that
any new credit facility will be available on terms acceptable to the Company.

The Company's working capital was $2.5 million and $4.1 million as of
January 5, 1998 and October 5, 1998, respectively.

The Company's operating activities used cash of $1.9 million for the year
ended January 5, 1997, provided cash of $1.1 million for the year ended January
5, 1998 and used cash of $1.3 million for the nine months ended October 5, 1998.
The fluctuation in each period resulted from variations in working capital
requirements.

The Company's investing activities used cash of $254,000 for the year ended
January 5, 1997, $1.0 million for the year ended January 5, 1998 and $261,000
for the nine months ended October 5, 1998. Cash used in the Company's investing
activities for each period related to capital expenditures.

The Company's financing activities provided cash of $2.1 million for the
year ended January 5, 1997, used cash of $99,000 for the year ended January 5,
1998 and provided cash of $1.6 million for the

nine months ended October 5, 1998. Cash provided by the Company's financing
activities for all periods
was principally the result of intercompany borrowings from PCR.

The foregoing cash flows are not necessarily indicative of the cash flows
that would have resulted if the Company were a stand-alone, publicly-held
entity.

The Company believes that cash flows expected to be generated from
operations, together with access to credit facilities and the net proceeds of
this offering, will be sufficient to satisfy its current and planned operations
for at least the next twelve months.

YEAR 2000 ISSUES

ASSESSMENT. The Company believes its exposure to Year 2000 problems lies
primarily in two areas: (i) its reliance upon PCR's internal operating systems;
and (ii) Year 2000 compliance by third parties with whom the Company has a
material relationship. The Company has worked with PCR to complete an assessment
of its principal internal systems. However, the Company is continuing to assess
its Year 2000 exposure with respect to third parties. While the costs of these
assessment efforts are not expected to be material to our financial position or
any year's results of operations, the Company cannot assure you that this will
be the case.

INTERNAL OPERATING SYSTEMS. The Company has determined that its principal
internal systems are or it believes will be Year 2000 compliant. The Company is
in the process of testing the Year 2000 compliant versions of the software used
in its principal IT modules and systems. Upon completion of the testing, the
Company will implement the conversion of the existing software to the Year 2000
compliant versions. In addition, some of the Company's non-critical applications
may not be Year 2000 compliant. The Company is conducting a program to identify
and resolve any such exposure. Although the costs related to these efforts are
not expected to be material to the Company's business, financial condition or
results of operations, no assurance can be made that this will be the case.

THIRD-PARTY RELATIONSHIPS. The failure of a supplier to deliver timely Year
2000 compliant products to the Company's customers could jeopardize the
Company's ability to meet its obligations to its customers. The Company is
conducting a program to identify and resolve Year 2000 exposure from third
parties. Any failure of third parties with whom the Company has a material
relationship to resolve Year 2000 problems with their products in a timely
manner could materially adversely affect the Company's business, financial
condition or results of operations.

RISKS OF THE COMPANY'S YEAR 2000 ISSUES. The Company expects to identify
and resolve all Year 2000 problems that could materially adversely affect the
Company's business, financial condition or results of operations. However, the
Company believes that it is not possible to determine with complete certainty
that all Year 2000 problems affecting it have been identified or corrected. In
addition, the Company may experience difficulties with the conversion of its
existing software to the Year 2000 compliant versions. Further, the Company
cannot accurately predict how many failures related to the Year 2000 Problem
will occur or the severity, duration or financial consequences of such failures.
As a result, the Company expects that it could possibly suffer the following
consequences:

- A significant number of operational inconveniences and inefficiencies for
the Company and the Company's customers that may divert the Company's time
and attention and financial and human resources from the Company's
ordinary business activities; and

- A lesser number of serious system failures that may require significant
efforts by the Company, its customers or vendors to prevent or alleviate
material business disruptions.

THE COMPANY'S CONTINGENCY PLANS. The Company believes its plans for
addressing the Year 2000 Problem are adequate. The Company does not believe it
will incur a material financial impact from system failures, or from the costs
associated with assessing the risks of failure, arising from the Year 2000
Problem. Consequently, the Company does not intend to create a detailed
contingency plan. In the event that the Company does not adequately identify and
resolve its Year 2000 issues, the absence of a detailed contingency plan may
materially adversely affect its business, financial condition and results of
operations. See "Risk Factors -- Year 2000 Risks."

RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, Reporting Comprehensive Income ("SFAS
No. 130") with an effective date for fiscal years beginning after December 15,
1997. SFAS No. 130 establishes standards for the reporting of comprehensive
income in a company's financial statements. Comprehensive income includes all
changes in a company's equity during the period that result from transactions
and other economic events other than transactions with its stockholders.

In the fourth quarter of 1997, the Company elected to adopt early SFAS No.
130 retroactive to January 6, 1997. The adoption of SFAS No. 130 did not affect
the financial reporting in the accompanying consolidated financial statements
because the Company does not presently have any comprehensive income other than
net income.

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, Disclosures about Segments of an
Enterprise and Related Information ("SFAS No. 131") with an effective date for
fiscal years beginning after December 15, 1997. A reportable segment, referred
to as an operating segment, is a component of an entity about which separate
financial information is produced internally, that is evaluated by the chief
operating decision-maker to assess performance and allocate resources. The
Company does not presently believe that it operates in more than one
identifiable segment.

In February 1998, the Accounting Standards Executive Committee issued SOP
98-1, Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use. SOP 98-1 establishes the accounting for costs of software
developed or purchased for internal use, including when such costs should be
capitalized. The Company does not expect SOP 98-1, which is effective for the
Company beginning January 6, 1999, to have a material effect on the Company's
financial condition or results of operations.

BUSINESS

GENERAL

Pomeroy Select is a single-source provider of integrated desktop management
and network services that help corporate clients manage their IT assets. The
Company offers three categories of services: life cycle services,
internetworking services and end-user support services. Life cycle services
include technology deployment, warranty and non-warranty repair and maintenance,
a full range of install, move, add or change ("IMAC") services, redeployment and
mobile systems management, asset discovery and tracking and end-of-life
services. Internetworking solutions include project management; network design,
integration, management, migration and support; and cabling services. End-user
support services include customized help desk services, Internet-based training
on many popular software packages and video/teleconferencing services. The
Company delivers its services nationally through over 900 technical and
engineering personnel located in 30 offices in 14 states throughout the
Southeast and Midwest United States. The Company provided IT services to more
than 2,100 customers in the nine months ended October 5, 1998. The Company's
customers generally range from mid-sized organizations to Fortune 500 companies
in a wide variety of industries. None of the Company's customers represented
more than 5% of the Company's revenue for the nine-month period ended October 5,
1998. Over the four-year period ended January 5, 1998, the Company's revenue
grew at a compounded annual growth rate of 51.0%. For the nine-month period
ended October 5, 1998, the Company's revenue grew by 61.1% over the comparable
nine-month period for the prior year.

INDUSTRY BACKGROUND

PROLIFERATION OF IT SOLUTIONS. Organizations are increasingly dependent on
the use of IT as a competitive tool in today's business environment. Companies
rely upon IT solutions to improve service, lower costs, increase productivity
and shorten time to market. These business needs have been driving the continued
proliferation of IT solutions, including network-enabled applications and
related internetworking equipment. Historically, the rapid growth of IT
solutions has resulted primarily from the migration from mainframe environments
to distributed computing environments. More recently, the proliferation of IT
solutions has been driven by increased internetworking resulting from:

- Demand for Internet/intranet/extranet connectivity;

- Increased use of Internet and Web-based applications for corporate
communications and business-to-business transactions;

- Convergence of voice, video and data services;

- Increasingly mobile workforces;

- Use of pre-packaged and enterprise-wide software solutions; and

- Continued advances in computing and communications technologies.

INCREASED COMPLEXITY OF CORPORATE COMPUTER NETWORKS. As a result of the
above trends, internetworking environments are often characterized by
multi-vendor products and services, multi-protocol technologies and rapid
technological innovation, all of which require complex system design and
integration. In response to the explosive increase in network traffic, IT
vendors continue to introduce products and solutions to integrate disparate
systems and maximize performance, security and reliability. As organizations
rely more heavily on IT and as end-users demand the latest technologies,
companies must frequently deploy new technology with minimal downtime or
interruption of service. Although these emerging technologies offer faster, more
functional and more flexible IT solutions, their design, implementation and
maintenance present major challenges. As a result, companies need on-going and
immediate access to technical professionals with expertise in many diverse
technologies and

architectures to provide continual support and services including designing,
implementing, upgrading and maintaining IT solutions.

OUTSOURCING TRENDS. For many organizations, this increasingly complex IT
infrastructure has created demands that often exceed the capabilities and
capacity of internal MIS departments. As organizations evaluate alternatives for
providing enhanced levels of service and support to end-users, they increasingly
elect to outsource some or all of their design, management, maintenance and
implementation requirements to independent IT services providers. One key reason
for this decision is the recognition by many organizations of the importance of
focusing internal resources on their core competencies, such as product design,
marketing and operations. In addition, the trend toward outsourcing IT functions
is driven by the significant costs and practical limitations associated with
developing, training and maintaining a full-service internal MIS staff. Industry
sources estimate that the U.S. market for desktop and network operations
outsourcing was $7.4 billion in 1997 and will be $17.3 billion in 2002. Industry
sources also estimate that the total U.S. market for IT services was $139
billion in 1997 and is expected to increase to $273 billion by 2002.

CHALLENGES IN FINDING THE RIGHT IT SERVICES PROVIDER. As organizations
outsource their IT service requirements, they seek to maximize the quality,
consistency and cost effectiveness of the services they receive. Many
organizations also seek to minimize the number of providers they employ. IT
services are offered by numerous companies, ranging from small independent
consultants to global service providers. Customers can retain several IT
services providers, each offering a relatively narrow range of specialized
services, or a single-source provider offering a comprehensive range of
services. A single-source provider can leverage its comprehensive knowledge of
the organization's distributed asset base of computers and networking equipment
to enhance efficiency, improve quality and reduce costs. In addition,
organizations desire a flexible, customer-driven approach to implementation. The
use of multiple service providers requires that an organization coordinate the
efforts of the various providers resulting in increased time, cost and
management effort. By failing to identify and retain a single-source provider
which can rapidly deliver high-quality, flexible solutions, organizations risk
business interruption, inconsistent service delivery, less dependable
information infrastructure and management diversion, resulting in increased
costs and loss of competitive advantage.

THE POMEROY SELECT APPROACH

The Company is a single-source provider of integrated desktop management and
network services including life cycle services, internetworking services and
end-user support services. The Company seeks to build strong, long-term
relationships with its customers by focusing on their specific business needs
and by providing solutions tailored to their requirements. The Company delivers
cost-effective, flexible, consistent, reliable and comprehensive solutions to
meet customers' distributed asset base and IT infrastructure service
requirements. By maintaining a highly qualified staff of technical professionals
who are certified by multiple IT vendors, the Company is able to customize
solutions to meet specific customer needs. In addition, the Company has
developed excellent relationships with industry-leading vendors, enabling it to
integrate and support technology from multiple hardware manufacturers and
software developers. Based upon direct feedback from customers, the Company
regularly adds new services such as mobile systems management, hardware
redeployment and Internet-based training. The Company believes that its approach
has resulted in a high level of customer satisfaction.

STRATEGY

The Company's objective is to be the leading single-source provider of
integrated desktop management and network services. To achieve its objective,
the Company pursues the following strategies:

LEVERAGE STRONG CUSTOMER RELATIONSHIPS. The Company seeks to achieve a high
degree of customer satisfaction by offering a flexible implementation approach
while emphasizing high quality services. By

customizing IT solutions to the specific needs of its customers, the Company
develops strong customer relationships. These strong relationships, coupled with
interaction with multiple decision makers within customer organizations, keep
the Company informed of evolving customer IT needs. The Company seeks to use
this knowledge to offer additional IT services to existing customers. For
example, after the Company successfully completed a technology deployment
project for a financial institution, the customer retained the Company to
perform an additional project consisting of server installations and data
migrations at 90 locations. The Company also leverages its experiences with, and
uses references from, existing customers to demonstrate its capabilities when
seeking new customers.

MAINTAIN AND ENHANCE TECHNICAL EXPERTISE. The Company seeks to maintain and
enhance its technical expertise by hiring and training highly qualified
technicians and systems engineers. The Company utilizes its in-house recruiting
capabilities to continually identify qualified candidates for service technician
and systems engineer positions. In addition to a comprehensive training program,
the Company uses its incentive programs, advancement opportunities and
recognition programs to motivate, reward and retain its employees. As of January
6, 1999, the Company employed 613 service technicians, up approximately 120%
from January 5, 1997, and 340 systems engineers, up approximately 218% over the
same period.

EXPAND SALES AND MARKETING ACTIVITIES. The Company is actively seeking to
expand the size and enhance the quality of its sales force which currently
includes 24 direct sales representatives. By hiring additional highly qualified
sales personnel, the Company intends to increase direct sales, build market
awareness, establish name recognition and promote Pomeroy Select's reputation as
a high-quality, single-source IT services provider. A portion of the proceeds of
this offering will be used to increase the direct sales force and to establish
and build the Pomeroy Select name. In addition, the Company intends to continue
to use PCR's sales force to generate sales leads for the Company. Under the
Services Agreement, PCR's sales force can earn performance-based commissions and
bonuses for generating services revenue for the Company. The Company also
intends to establish additional alternative sales channels which may include
strategic relationships with a variety of hardware manufacturers and vendors.

BROADEN SERVICE OFFERINGS. The Company regularly offers new services which
respond to evolving customer needs. For example, in response to a customer's
need to service and support remote sales representatives, the Company created a
mobile systems management solution to provide overnight exchanges of laptops
with the customer's standard image and configuration anywhere in the United
States with complete asset tracking and reporting and repair services. In
addition, the Company began offering asset discovery and tracking and advanced
UNIX services in 1998 and intends to introduce advanced systems management in
1999.

LEVERAGE STRATEGIC RELATIONSHIPS WITH INDUSTRY LEADERS. The Company has
alliances with and authorizations from industry-leading hardware, software and
internetworking product vendors, such as Bay Networks, Cisco Systems, Compaq,
Computer Associates, Hewlett-Packard, IBM, Microsoft, Novell and 3Com. These
authorizations permit the Company to provide a range of services unavailable to
service providers without such authorizations. The Company believes that these
authorizations provide a competitive advantage through enhanced credibility and
access to a broader market. With respect to many of these industry leaders, the
Company maintains the highest levels of service authorizations awarded. The
Company has made, and intends to continue to make, the investments in employee
training and marketing necessary to obtain or maintain a wide array of service
authorizations with such industry leaders. The Company intends to continue to
pursue strategic alliances and authorizations to expand its offerings further
and to remain a leading edge IT services provider.

PURSUE ACQUISITIONS. The Company intends to pursue acquisitions of IT
services businesses to broaden its service offerings, add technical or sales
personnel, increase its presence in existing markets,

expand into new geographic markets, improve operating efficiencies through
economies of scale, establish strategic relationships and obtain desirable
customer relationships. In the past, acquisitions have contributed significantly
to the growth of its business. For example, over the last three years, the
Company has acquired a network service provider, two network integrators and a
systems integrator. The Company believes that the acquired operations, business,
employees and customers have been successfully integrated into the Company's
business. The Company believes that acquisitions will continue to be an
effective means to supplement its internal growth. The Company also believes
that acquisitions create opportunities to establish "centers of expertise,"
comprised of highly experienced personnel who can provide highly specialized IT
solutions, without regard to customer location.

SERVICES OFFERED

The Company is a single-source provider of integrated desktop management and
network services including life cycle services, internetworking services and
end-user support services:

LIFE CYCLE SERVICES INTERNETWORKING SERVICES END-USER SUPPORT SERVICES

- Technology deployment - Project management - Custom help desk
- Multi-vendor repair and - Network design - Internet-based training
maintenance - Network integration - Video/teleconferencing
- Install, move add or - Network management - Ancillary services
change ("IMAC") - Network migration
- Redeployment and mobile - Network support
systems management - Cabling
- Asset discovery and
tracking
- End-of-life services

LIFE CYCLE SERVICES

The Company provides its customers with a full range of IT services
throughout the life cycle of a customer's distributed asset base of computer and
networking equipment. Most customers rely on the Company's ability to provide
dispatched on-site services in response to customer requests. Such support is
available 24 hours a day, seven days a week, depending on the needs of the
customer. The Company's systems engineers and technicians provide customized
configuration of software and hardware for workstations and servers and perform
technology deployment at customer sites. The Company also services and repairs
equipment at the Company's facility pursuant to its depot, or drop-off, service.
The Company tracks service requests through its customer database which
maintains current status reports and historical logs of customer communications.

The Company is authorized and its technical personnel are certified to
provide services by many industry-leading manufacturers, including Bay Networks,
Cisco Systems, Compaq, Computer Associates, Hewlett-Packard, IBM, Microsoft,
Novell and 3Com. The Company offers a warranty upgrade program to provide faster
response and repair times, additional hours of coverage, warranty extensions and
warranty administration services for customers who desire broader service
offerings than those offered by the manufacturer or reseller. Most of the
technicians employed by the Company are "A+ Certified." The A+ Certification
Program is sponsored by the Computer Technology Industry Association (CompTIA)
and is recognized by leading manufacturers as the industry-wide standard of
professional competency for technical personnel. The Company's systems engineers
and technicians service and support a wide variety of IT products including
desktop and laptop PCs, printers and LAN/WAN infrastructure products such as
hubs, routers and switches.

REPRESENTATIVE LIFE CYCLE SERVICES PROJECT. The Company provides mobile
systems management services for the computing equipment used by the 3,000
person sales force of a large Midwestern insurance company with 250 offices
throughout North America. Services offered by the Company in this project
include:

- Custom configuration;

- Exchanges of inoperable equipment within 24 hours;

- Laptop repair and maintenance; and

- Preparation and delivery of detailed asset-tracking reports.

These services minimize downtime and business interruption for our customer,
ensuring on-going productivity of the customer's sales force. The Company
has successfully leveraged its relationship with this customer by
cross-selling a broad range of other services, including:

- Pre-deployment technology planning;

- Multi-vendor repair and maintenance of PCs, printers and servers;

- Technology deployment and maintenance; and

- End-of-life services relating to mobile equipment.

INTERNETWORKING SERVICES

The Company's systems engineers and technicians provide customers with a
wide array of internetworking services, including project management; network
design, integration, management, migration and support; and cabling services.
When requested by a customer, the Company provides network management and
support coverage 24 hours a day, seven days a week. As part of internetworking
service engagements, the Company may also provide:

- LAN/WAN performance analyses;

- Network upgrade services;

- New technology feasibility and impact analyses; and

- End-user group needs analyses.

The Company provides advanced network services and support, utilizing
products of many industry-leading manufacturers, including Bay Networks, Cisco
Systems, Compaq, Computer Associates, Hewlett-Packard, IBM, Microsoft, Novell
and 3Com. The Company's systems engineers and technicians have knowledge and
experience in LAN/WAN platforms including Microsoft Windows NT, Novell NetWare
and AIX.

As part of its strategy to offer customers a single-source solution to their
IT requirements, the Company provides a broad range of cabling services through
its CommTec division. Certain of the Company's cabling employees hold
certifications from one or more of the following organizations: NORDX/CDT,
Lucent Systimax and Building Industry Consulting Services International (BICSI).
The CommTec division provides turnkey design, installation, certification and
support services for data, voice, audio and video cabling systems.

REPRESENTATIVE INTERNETWORKING SERVICES PROJECT. The Company provided a
turnkey network solution for a supplier of electrical distribution,
industrial control and automation products, systems and services with over
150 offices throughout North America. Key elements of the Company's service
offering included:

- Development of a project plan;

- Pre-design planning and administration including gathering physical
plant information;

- Design of optimal network infrastructure for over 150 offices;

- Computer-generated documentation of the physical infrastructure designs
to support ongoing maintenance;

- Installation, configuration, testing and verification of all network
components including workstations, servers, printers, hubs and routers;
and

- Installation, testing and verification of LAN and WAN cabling.

The project was executed by a team consisting of 24 technical personnel,
three administrative personnel and a project leader who provided a single
point-of-contact to communicate regularly with the customer regarding
project status. The Company's personnel completed this project under budget
within a tight time constraint of only four months.

END-USER SUPPORT SERVICES

The Company offers a wide spectrum of end-user support services to its
customers, including customized help desk, Internet-based training and video and
teleconferencing services.

The Company's customized help desk services include software and network
support performed either on site or from the Company's premises. Help desk
services include:

- Call response and logging;

- Problem determination and source identification; and

- Call tracking, escalation and resolution.

The Company offers third-party developed Internet-based training programs,
including tailored packages, that deliver on-demand, interactive, multi-media
training. The training programs are platform independent and accessible on
popular browsers from any location. The current course catalog includes over 140
topics, including Microsoft Windows 95 and NT, Office 95 and 97, Netscape
Navigator, Internet Explorer, WordPerfect, Lotus Notes 4.0 and 4.5, and ACT!
3.0.

The Company offers a variety of ancillary services such as network security
consulting, including the implementation of firewalls, web design and hosting
and teleconferencing services.

CUSTOMERS

The Company performs IT services for customers ranging from mid-sized
organizations to Fortune 500 companies in a wide variety of industries. During
the nine months ended October 5, 1998, the Company had more than 2,100
customers, with approximately 50 customers purchasing at least $150,000 of the
Company's services. No single customer accounted for more than 5% of the
Company's total revenue in the years ended January 5, 1996 and 1997 or the nine
months ended October 5, 1998. Set forth below is a representative list of the
Company's larger customers:

BANKING STATE GOVERNMENT
- ----------------------------------------- -----------------------------------------

Bank of America State of Florida
Norwest Mortgage, Inc. State of North Carolina
Star Bank, N.A.

EDUCATION TECHNOLOGY AND ENGINEERING
- ----------------------------------------- -----------------------------------------
University of Cincinnati Lexmark International, Inc.
Indianapolis Public Schools Square D Company
University of Kentucky
West Virginia Department of Education

HEALTHCARE UTILITIES
- ----------------------------------------- -----------------------------------------
Alliant Health System KN Energy, Inc.
The Health Alliance of Greater Cincinnati Knoxville Utilities Board
Mid-American Energy Company

INSURANCE
- -----------------------------------------
Principal Mutual Life Insurance Company
Providian Corporation
Western-Southern Life Insurance Company

The Company seeks to achieve a high degree of customer satisfaction by
offering a flexible implementation approach while emphasizing high quality
services. By customizing IT solutions to the specific needs of its customers,
the Company develops strong customer relationships. These strong relationships,
coupled with interaction with multiple decision makers within its customers'
organizations, keep the Company informed of its evolving customer IT needs. The
Company leverages its experiences with, and uses references from, existing
customers to demonstrate its capabilities when seeking new customers.

The Company has ongoing service contracts with many of its customers to
provide warranty and non-warranty repair. These contracts are typically for
one-year periods but are terminable upon relatively short notice. The Company
also enters into contracts for project-based services, such as desktop and
software migrations, technology deployment and IMAC services, which usually
provide for the services to be performed over a defined period ranging from 30
days to two years. Most of the Company's contracts are performed on a
time-and-materials basis. Fixed-price contracts are used when the Company
believes it can clearly define the scope of services to be provided and the cost
of providing those services. For many customers, services are not provided under
contract, but rather are procured on a purchase-order basis, based on a proposal
submitted by the Company. There can be no assurance that the Company's customers
will continue to enter into service contracts with the Company or that existing
contracts will not be terminated.

SALES AND MARKETING

The Company's marketing efforts include networking with existing customers
and developing relationships with new customers through referrals, requests for
proposals, responses to customer-initiated

contacts and Company-initiated contacts with desired customers. The Company
focuses its marketing efforts in the geographic reach of its 30-branch office
network located in 14 states throughout the Southeast and Midwest United States.
The Company is seeking to expand the size and enhance the quality of its sales
force, which currently includes 24 direct sales representatives. By hiring
additional highly qualified sales personnel, the Company intends to increase
direct sales, build market awareness, establish name recognition and promote
Pomeroy Select's reputation as a high-quality, single-source IT services
provider. A portion of the net proceeds of this offering will be used to
increase the Company's direct sales force and to establish and build recognition
of the Pomeroy Select name. In addition, the Company intends to continue to use
PCR's sales force to generate sales leads for the Company. See "Relationship
with PCR." The Company's agreement with PCR provides PCR's sales force with
performance-based commissions and bonuses for continuing to generate IT services
revenue for the Company. The Company also intends to establish additional
alternative sales channels which may include strategic relationships with a
variety of hardware manufacturers and vendors.

The length of the sales cycle varies depending on the type of service and
size of customer, typically ranging from approximately one to six months. The
sales representative or account executive works with the technical team to
define the scope, deliverables, assumptions and execution strategies for a
proposed project; develop project estimates; prepare pricing in accordance with
corporate guidelines and margin analyses; and finalize sales proposals. Branch
and services managers review and approve the proposal, which is then presented
to the prospective customer. Sales and branch management personnel remain
actively involved in the project through the execution phase. The Company
believes that its direct sales strategy, coupled with its branch office support,
leads to better account penetration and management, better communication and
long-term relationships with its clients, and more opportunities for follow-on
sales of services to its existing client base.

The Company's direct sales representatives typically have college degrees as
well as three or more years of sales experience in the IT services industry.
Territory assignments are based on skill, experience and demonstrated sales
results. Compensation programs for direct sales representatives include salary,
commission and other incentive compensation awards. Commissions are based on
volume, gross profits, type of service sold and strategic importance of the
sale. The Company provides additional incentives in the form of contests to
encourage the representatives to sell various services.

TECHNICAL CAPABILITIES

As of January 6, 1999, the Company employed 613 service technicians, up
approximately 120% from January 5, 1997, and 340 systems engineers, up
approximately 218% over the same period. The Company's technical staff is
authorized by many industry-leading manufacturers and service providers,
including Bay Networks, Cisco Systems, Compaq, Computer Associates,
Hewlett-Packard, IBM, Microsoft, Novell and 3Com. These authorizations enable
the Company to provide advanced hardware and network services and support for
each vendor's products and services. The Company's technical personnel currently
have an aggregate of more than 200 Microsoft certifications, more than 300
Novell certifications, 33 Bay Networks Specialist certifications, five Bay
Networks Expert certifications, 17 IBM Professional Service Expert
certifications, 19 Compaq Accredited Systems Engineer certifications, 15 HP
Network Technical Professional certifications, nine Citrix Certified
Administrator certifications, five certified Cisco Internetworking Engineer
certifications, four Computer Associates Certified Unicenter Engineer
certifications, and one of each of the following certifications: Cisco Design
Specialist, Protean Router, Network General Sniffer, Fore Systems and Oracle
Advanced SQL.

The Company seeks to maintain and enhance its technical expertise by hiring
and training highly qualified technicians and systems engineers. The Company
utilizes its in-house recruiting capabilities to continually identify qualified
candidates for service technician and systems engineer positions. In addition to
a comprehensive training program, the Company uses its incentive systems,
advancement opportunities and recognition programs to motivate, reward and
retain its employees. The Company's ability

to maintain and renew existing service contracts and obtain new business will
depend, in large part, on its ability to attract, train and retain technical
personnel with the skills necessary to keep pace with continuing changes in IT,
evolving industry standards and changing customer preferences.

In an effort to retain technical personnel, the Company's employees
participate in PCR's Texcellence program, which rewards and recognizes the
Company's technical personnel. Under the Texcellence program, technical
personnel can earn stock options and participate in deferred compensation
programs after certain periods of service. In addition to longevity awards, the
Company offers performance-based awards and advancement opportunities.

COMPETITION

The Company competes in rapidly changing markets that are intensely
competitive and highly fragmented. The Company competes, directly and
indirectly, with a variety of national and regional service providers, including
services organizations of established computer product manufacturers, VARs,
systems integrators, internal corporate MIS staffs and, to a lesser extent,
consulting firms, aggregators and distributors.

Many of the Company's current and potential competitors have longer
operating histories and substantially greater financial, marketing, technical
and other resources than the Company. As a result, our competitors may be able
to adapt more quickly to changes in customer needs or to devote greater
resources to the provisioning of IT services. Such competitors may attempt to
build their presence in the Company's markets by forming strategic alliances
with other competitors or the Company's customers, offering new or improved
products and services to the Company's customers or increasing their efforts to
gain and retain market share through competitive pricing. In addition,
competition for quality technical personnel has continued to intensify,
resulting in increased personnel costs. Such competition has adversely affected,
and is likely to continue to adversely affect, the Company's gross profits,
margins and results of operations. Furthermore, the Company believes the
barriers to entry into its markets are relatively low, which enable new
competitors to offer competing services.

The Company believes that the principal competitive factors in the market
for IT services include technical expertise, the availability of skilled
technical personnel, breadth of service offerings, reputation, financial
stability and price. To be competitive, the Company must respond promptly and
effectively to the challenges of technological change, evolving standards and
its competitors' innovations by continuing to enhance its service offerings and
expand its sales channels. Any pricing pressures, reduced margins or loss of
market share resulting from the Company's failure to compete effectively could
materially adversely affect the Company's business.

The Company believes that it competes successfully by providing a
single-source solution for its customers' integrated desktop management and
network services needs. The Company delivers cost-effective, flexible,
consistent, reliable and comprehensive solutions to meet customers' distributed
asset base and IT infrastructure service requirements. The Company also believes
that it distinguishes itself on the basis of its technical expertise,
competitive pricing and our ability to understand our customers' needs.

FACILITIES

The Company does not own or directly lease or sublease any real property.
The Company currently is permitted to occupy and use all of its office space
pursuant to the terms of the Space Sharing Agreement with PCR. The Company's
principal executive offices are located in the Greater Cincinnati area at 1020
Petersburg Road, Hebron, Kentucky. The Company's headquarters includes
sufficient space for certain of its sales and technical staffs and its
marketing, administrative, finance and management personnel. The Company
maintains offices in the following locations:

ALABAMA FLORIDA GEORGIA INDIANA
- -------------- -------------------------- ---------------------- -----------

Birmingham Jacksonville Atlanta Evansville
Montgomery Orlando Indianapolis
Miami
Tallahassee
Tampa

IOWA KENTUCKY NORTH CAROLINA OHIO
- -------------- -------------------------- ---------------------- -----------
Hebron (Greater
Cedar Rapids Cincinnati) Charlotte Cleveland
Des Moines Lexington Raleigh Columbus
High Point
Louisville (Greensboro)

OKLAHOMA SOUTH CAROLINA TENNESSEE TEXAS
- -------------- -------------------------- ---------------------- -----------
Oklahoma City Columbia Knoxville Dallas
Tulsa Memphis
Nashville

VIRGINIA WEST VIRGINIA
- -------------- --------------------------
Richmond Charleston
Morgantown

The Company believes that its existing facilities are adequate to meet its
current needs and that suitable additional or alternative space will be
available in the future on reasonable terms as needed.

EMPLOYEES

As of January 6, 1999, the Company employed 1,086 persons of whom 24 were
engaged in sales, 953 were engaged in providing the Company's technical services
and training, 72 were engaged in services support and 37 were engaged in
management functions. Of the Company's 1,086 employees, 66 were added as a
result of an acquisition which was completed in December 1998. A substantial
portion of the Company's finance and administrative services are provided by PCR
pursuant to the Services Agreement.

None of the Company's employees are covered by a collective bargaining
agreement. Substantially all of the Company's employees have executed
non-competition agreements. In addition, the Company requires that all new
employees execute such agreements as a condition of employment by the Company.
The Company believes there is a worldwide shortage of, and significant
competition for, professionals with the advanced technical skills necessary to
perform the services offered by the Company. The future success of the Company
will depend, to a significant extent, on its ability to attract, train and
retain highly qualified personnel, particularly technical personnel. The Company
considers its relationships with its employees to be good.

INTELLECTUAL PROPERTY RIGHTS

The Company does not rely on registered trademarks or patents to protect its
proprietary information. Instead, the Company relies primarily on a combination
of copyright and trademark laws, trade secrets, confidentiality procedures and
contractual provisions. Although the Company's various dealer agreements do not
generally allow the Company to use the trademarks and trade names of these
various manufacturers, the agreements do permit the Company to refer to itself
as an "authorized dealer" of the products of those manufacturers and to use
their trademarks and trade names for marketing purposes. The Company considers
the use of these trademarks and trade names in its marketing efforts to be
important to its business.

LEGAL PROCEEDINGS

There are currently no material legal proceedings pending to which the
Company is a party or to which any of its property is subject.

MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES

The Directors, executive officers and key employees of the Company are as
follows:

NAME AGE POSITION(S)
- ----------------------------------------------------- --- -----------------------------------------------------

David B. Pomeroy, II(1).............................. 49 Chairman of the Board and Director
Stephen E. Pomeroy(2)................................ 30 President, Chief Executive Officer and Director
Larry H. Lokey....................................... 50 Vice President of Sales
Mark P. Schwarz...................................... 43 Chief Financial Officer, Secretary and Treasurer
Curtis R. Dunseath................................... 32 Director of Service Operations
Kenneth R. Waters (1)(2)............................. 47 Director
Gerald L. Von Deylen (1)(2).......................... 56 Director

- ------------------------

(1) Member of Compensation Committee.

(2) Member of Audit Committee.

All Directors hold office until the next annual meeting of stockholders or
until their successors have been elected and qualified. All executive officers
of the Company are elected annually by the Board of Directors and serve at the
discretion of the Company's Board of Directors and until their successors are
elected and qualified.

DAVID B. POMEROY, II has served as Chairman of the Board and Director of the
Company since its formation in December 1998. Mr. Pomeroy founded PCR and has
served as its Chairman of the Board, President and Chief Executive Officer since
February 1992.

STEPHEN E. POMEROY has served as President, Chief Executive Officer and a
Director of the Company since its formation in December 1998. He served as Chief
Financial Officer of PCR from May 1997 to January 1999 and has been a director
of PCR since February 1998. Prior to that time, Mr. Pomeroy was the Vice
President of Marketing and Corporate Development for PCR from September 1996 to
May 1997, the Director of New Market Development of PCR from June 1994 to
September 1996 and an Account Executive for PCR from February 1992 to June 1994.
Mr. Pomeroy was employed by PCR's predecessor from January 1985 until PCR's
formation in February 1992.

LARRY H. LOKEY has been the Vice President of Sales of the Company since its
formation in December 1998. Prior to that, he served in various management
capacities for PCR, including Vice President of Services and Director of
Services Marketing from January 1996 to December 1998. From mid-1993 to January
1996, Mr. Lokey served as PCR's Account Executive for Procter & Gamble. From
1977 to mid-1993, Mr. Lokey was employed by IBM in various marketing positions
from Marketing Representative to Unit Marketing Manager.

MARK P. SCHWARZ has been the Chief Financial Officer, Secretary and
Treasurer of the Company since its formation in December 1998. Prior to that, he
was employed by PCR as Manager -- Acquisitions from November 1996 to December
1998 and as PCR's Assistant Controller from December 1995 to November 1996. From
1993 until 1995, Mr. Schwarz was a Financial Analyst with Quantum Chemical
Company, a chemical manufacturer. From 1988 until 1993, Mr. Schwarz was
Accounting Manager with Thriftway Foods, a retail food and drug company.

CURTIS R. DUNSEATH has been the Director of Services Operations for the
Company since its formation in December 1998. Prior to that, he was employed by
PCR since June 1988 in various capacities

including Director of Services Operations (October 1997 to December 1998),
Services Marketing Manager (March 1996 to October 1997), Business Services
Manager (September 1993 to March 1996) and Account Executive (June 1988 to
September 1993).

KENNETH R. WATERS has been a Director of the Company since December 1998.
Mr. Waters was a director of PCR from April 1997 until his resignation in
January 1999. Mr. Waters has worked in the computer industry since 1978. Most
recently, he has been an industry consultant, serving as such from February 1995
until present as well as from April 1993 to August 1993 and from January 1991 to
August 1992. Mr. Waters has provided consulting services to PCR since January
1997. From September 1993 to January 1995, Mr. Waters was the President of
MicroAge, Inc., a computer reseller. From September 1992 to March 1993, Mr.
Waters was the President and CEO of Power Up Software, a software manufacturer.
From July 1978 to September 1988, Mr. Waters was employed by Vanstar (then known
as ComputerLand), holding various management positions, with his last position
being the CEO. Mr. Waters was also a director of Vanstar from September 1987 to
July 1989.

GERALD L. VON DEYLEN has been a Director of the Company since December 1998.
Mr. Von Deylen is a certified public accountant and has been engaged in private
practice as a business and financial consultant, specializing in nontraditional
services since September 1996. Mr. Von Deylen was a partner with Arthur Andersen
from 1979 through August 1996. He started his career with Arthur Andersen in
1968 and served the firm in various professional capacities.

Other than David B. Pomeroy, II and Stephen E. Pomeroy, who are father and
son, there are no other family relationships among the Company's Directors and
executive officers.

The Board of Directors has a Compensation Committee, which approves salaries
and incentive compensation for executive officers of the Company and administers
the Company's stock plan, and an Audit Committee, which reviews the results and
scope of the audit and other services provided by the Company's independent
accountants.

DIRECTORS' COMPENSATION

Each member of the Board of Directors who is not an officer or an owner or
the representative of an owner of more than 5% of the outstanding Common Stock
will receive annual compensation of $5,000 for attending three or more Board
meetings and will receive $500 for each committee meeting attended. The Company
also will reimburse Directors for any expenses incurred in attending meetings of
the Board of Directors and the committees thereof. On January 6, 1999, each
non-employee Director was granted options to purchase 10,000 shares of the Class
A Common Stock. Such options will be exercisable at the initial public offering
price of the Class A Common Stock. On January 6 of each year thereafter, each
non-employee Director will be granted an option to purchase 5,000 shares of
Class A Common Stock at the fair market value on the date of such grants.

EXECUTIVE COMPENSATION

The following table sets forth certain information concerning compensation
for services in all capacities awarded to, earned by or paid to the Company's
chief executive officer and each of the other executive officers of the Company
whose aggregate compensation exceeded $100,000 during the year ended January 5,
1999 (collectively, the "Named Executives").

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION(1) LONG-TERM COMPENSATION
---------------------------------------- AWARDS(2)
ALL OTHER ANNUAL ----------------------- ALL OTHER
NAME AND PRINCIPAL POSITION(S) SALARY BONUS(3) COMPENSATION(4) STOCK OPTIONS COMPENSATION(5)
- -------------------------------- ---------- --------- ----------------- ----------------------- ----------------

Stephen E. Pomeroy
President and Chief Executive
Officer....................... $ 125,000 $ 52,000 - 45,000 $ 39,016
Larry H. Lokey
Vice President of Sales....... $ 95,000 $ 18,000 $ 1,000 4,000 $ 35,028

- ------------------------

(1) All compensation reflects compensation paid by PCR.

(2) Long-term compensation awards reflect grants by PCR of options to purchase
shares of PCR's common stock.

(3) Excludes annual bonuses payable to be determined pursuant to PCR's 1998
year-end financial results.

(4) Includes 401(k) contributions paid by the Company to the Named Executive.

(5) Includes deferred compensation paid by PCR to and life insurance premiums
paid on behalf of the Named Executive.

The Company did not grant stock options to any of the Named Executives
during 1998. The Company has never granted any stock appreciation rights.

1999 STOCK PLAN

The 1999 Stock Plan was adopted by the Board of Directors on January 5, 1999
and approved by PCR, as sole stockholder of the Company, on January 13, 1999.
The 1999 Stock Plan was effective as of January 6, 1999 and shall terminate ten
years from such date, unless terminated earlier by the Board of Directors. A
total of 3,000,000 shares of Class A Common Stock have been reserved for
issuance upon the exercise of options granted thereunder. Those eligible to
receive stock option grants under the 1999 Stock Plan shall include employees,
non-employee Directors and consultants. The 1999 Stock Plan shall be
administered by the Compensation Committee of the Board of Directors of the
Company.

Subject to the provisions of the 1999 Stock Plan, the administrator of the
1999 Stock Plan shall have the discretion to determine the optionees and/or
grantees, the type of options to be granted (incentive stock options ("ISOs") or
non-qualified stock options ("NQSOs")), the vesting provisions, the terms of the
grants and other related provisions as are consistent with the 1999 Stock Plan.
The exercise price of an ISO may not be less than the fair market value per
share of the Class A Common Stock on the date of grant or, in the case of an
optionee who beneficially owns 10% or more of the voting power of all classes of
capital stock of the Company, not less than 110% of the fair market value per
share on the date of grant. The exercise price of a NQSO may not be less than
85% of the fair market value per share of the Class A Common Stock on the date
of grant or, in the case of an

optionee who beneficially owns 10% or more of the voting power of all classes of
capital stock of the Company, not less than 100% of the fair market value per
share on the date of grant. Fair market value is determined by the Board of
Directors in good faith. The Company anticipates that following consummation of
this offering, fair market value shall be determined in accordance with the
closing sale price of its Class A Common Stock as quoted on the Nasdaq National
Market. In addition, the 1999 Stock Plan allows for the grant of stock purchase
rights. The purchase price of shares issued pursuant to stock purchase rights
may not be less than 50% of the fair market value of such shares as of the offer
date of such rights.

The options terminate not more than ten years from the date of grant,
subject to earlier termination upon or after a fixed period following the
optionee's death, disability or termination of employment with the Company. The
term of any options granted to a holder of more than 10% of the capital stock
may be no longer than five years. Options granted under the 1999 Stock Plan to
employees of the Company will vest in the manner determined by the Board of
Directors. Options are not assignable or otherwise transferable except by will
or as per the laws of descent and distribution. In the event of a merger or
consolidation of the Company with or into another corporation or the sale of all
or substantially all of the Company's assets in which the successor corporation
does not assume outstanding options or issue equivalent options, the Board of
Directors of the Company is required to provide accelerated vesting of
outstanding options.

Effective as of January 6, 1999, the Company granted the following options
to purchase shares of Class A Common Stock under the 1999 Stock Plan, all of
which are exercisable at the initial public offering price: (i) David B.
Pomeroy, II was granted a NQSO to purchase 200,000 shares; (ii) Stephen E.
Pomeroy was granted a NQSO to purchase 400,000 shares; (iii) Kenneth R. Waters
was granted a NQSO to purchase 10,000 shares; and (iv) Gerald L. Von Deylen was
granted a NQSO to purchase 10,000 shares. Contingent upon the following persons
entering into employment agreements with the Company, the Company anticipates
that it will grant the following options to purchase shares of Class A Common
Stock, all of which will be exercisable at the initial public offering price:
(i) Larry H. Lokey will be granted an ISO to purchase 50,000 shares; (ii) Mark
P. Schwarz will be granted an ISO to purchase 25,000 shares; and (iii) Curtis R.
Dunseath will be granted an ISO to purchase 25,000 shares. The options granted
to David B. Pomeroy, II, Kenneth R. Waters and Gerald L. Von Deylen vested
immediately. One half of the options granted to Stephen E. Pomeroy vested
immediately and the remainder of such options will vest ratably over a
three-year period. One half of the options expected to be granted to Larry H.
Lokey, Mark P. Schwarz and Curtis D. Dunseath will vest immediately and the
remainder of such options will vest ratably over a three-year period.
Notwithstanding the immediate vesting of certain of the forgoing options, each
of the aforementioned persons have each entered into lock-up agreements with the
Underwriters which will prevent them from selling or otherwise transferring
shares of Class A Common Stock issuable upon exercise of any vested options for
a period of 180 days from the date of this Prospectus. See "Shares Eligible for
Future Sale," "Principal Stockholders" and "Underwriting."

No stock options were granted, exercised or outstanding during the year
ended January 5, 1999.

EMPLOYMENT AGREEMENTS

The Company intends to enter into employment agreements with each of the
Named Executives and certain other key employees of the Company. Such employment
agreements prohibit each of the respective officers and key employees from
competing with the Company for the term of the agreement and for a period of one
year after termination of employment.

The Company has entered into an employment agreement with Stephen E. Pomeroy
effective January 6, 1999. Mr. Pomeroy's employment agreement has a term of
three years, which is extended on a daily basis resulting in a perpetual three
year term. Mr. Pomeroy's employment agreement provides

for an annual base salary of $175,000 during the year ending January 5, 2000 and
for each subsequent year unless modified by the Compensation Committee. Under
the employment agreement, Mr. Pomeroy may earn bonuses of up to $200,000 in the
year ending January 5, 2000 in the event the Company meets certain quarterly and
annual goals. Thereafter, the amount of such bonuses and the goals will be
established annually by the Compensation Committee.

Pursuant to his employment agreement, on January 6, 1999, Mr. Pomeroy was
granted an option to purchase 400,000 shares of Class A Common Stock with an
exercise price equal to the initial public offering price of the Class A Common
Stock. One half of such options vested immediately and the remainder of such
options will vest ratably over a three-year period.

The Company intends to enter into an employment agreement with Larry H.
Lokey prior to this offering. The Company expects that the agreement will be for
an initial term of one year and will be extended annually for additional
one-year periods unless either party gives 30 days written notice of
termination. The agreement will provide for a base salary of $95,000, certain
incentive compensation, incentive deferred compensation and additional stock
option awards upon meeting predetermined goals as determined by the Compensation
Committee. The base salary in any renewal period shall be determined by the
Compensation Committee. Upon entering into the agreement, Mr. Lokey will be
granted an option to purchase 50,000 shares of Class A Common Stock with an
exercise price equal to the initial public offering price. One half of such
options will vest immediately and the remainder of such options will vest
ratably over a three-year period.

The Company intends to enter into an employment agreement with Mark P.
Schwarz prior to this offering. The Company expects that the agreement will be
for an initial term of one year and will be extended annually for additional
one-year periods unless either party gives 30 days written notice of
termination. The agreement will provide for a base salary of $75,000, certain
incentive compensation, incentive deferred compensation and additional stock
option awards upon meeting predetermined goals as determined by the Compensation
Committee. The base salary in any renewal period shall be determined by the
Compensation Committee. Upon entering into the agreement, Mr. Schwarz will be
granted an option to purchase 25,000 shares of Class A Common Stock with an
exercise price equal to the initial public offering price. One half of such
options will vest immediately and the remainder of such options will vest
ratably over a three-year period.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During the year ending January 5, 1999, the compensation of executive
officers of the Company was determined by the Board of Directors. The
Compensation Committee was established by the Board of Directors on January 6,
1999. The Compensation Committee consists of David B. Pomeroy, II, Kenneth R.
Waters and Gerald L. Von Deylen. There are no Compensation Committee Interlocks.

Pomeroy Investments, LLC ("Pomeroy Investments"), a Kentucky limited
liability company controlled by David B. Pomeroy, II, owns the headquarters
facility and distribution facility which are leased by PCR. The total base rent
to be paid by PCR to Pomeroy Investments under the lease for all types of uses
is $863,000 per year (plus pass-through costs such as taxes and insurance). The
rental terms were determined on the basis of a fair market rental opinion given
to PCR by an unrelated third party. The Company shares space with PCR in the
headquarters facility and distribution facility pursuant to the Space Sharing
Agreement. See "Relationship with PCR."

PCR, from time to time, has made advances without interest obligations to
Pomeroy Investments to satisfy Pomeroy Investments' working capital needs. The
Company currently does not anticipate making advances to Pomeroy Investments.

Kenneth R. Waters, a Director of the Company since December 1998, provides
consulting services to PCR on an ongoing basis. Mr. Waters is paid $1,500 per
month for such consulting services.

KEY PERSON INSURANCE

The Company intends to apply for, maintain, and be the beneficiary of, a
life insurance policy on the life of Stephen E. Pomeroy in the amount of
$500,000. The Company does not intend to maintain key person life insurance on
any of its other executive officers, sales persons or technical personnel.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company's Certificate of Incorporation and Bylaws provide that the
Company is authorized to provide indemnification of Directors and officers to
the fullest extent authorized under the DGCL. The Company intends to enter into
indemnification agreements with each of its Directors and officers providing for
indemnification of such Directors and officers to the fullest extent permitted
by applicable law. The Company believes that such indemnification will assist
the Company in continuing to attract and retain talented Directors and officers
in light of the growing risk of litigation against directors and officers of
publicly-held corporations.

RELATIONSHIP WITH PCR

OWNERSHIP OF COMMON STOCK

Upon completion of this offering, PCR will own 100% of the outstanding Class
B Common Stock, representing approximately % of the voting power in the
Company (approximately % of the voting power if the Underwriters exercise in
full their over-allotment option).

Accordingly, PCR will continue to have the ability to elect all of the
members of the Board and otherwise control the management and affairs of the
Company. In addition, two of the four current Directors of the Company are also
directors of PCR. While transactions between PCR and the Company will require
approval by the Board of Directors of the Company, they may not require the
separate approval of the independent Directors who are not also directors of
PCR. Certain provisions of the Company's Certificate of Incorporation, Bylaws
and applicable law also facilitate PCR's ability to exercise control of the
Company. The ability of PCR to control the Company could have an adverse effect
on the market price of shares of Class A Common Stock. See "Management,"
"Principal Stockholders" and "Description of Capital Stock."

CONTRACTUAL ARRANGEMENTS

For purposes of governing and defining our ongoing relationship, the Company
has entered into a number of agreements with PCR which became effective on
January 6, 1999. As a result of PCR's ownership interest in the Company, the
terms of such agreements were not, and the terms of any future amendments to
those agreements will not be, the result of arm's-length negotiations.

The following discussion of agreements between the Company and PCR is
qualified in its entirety by reference to such agreements, which have been filed
as exhibits to the Registration Statement of which this Prospectus forms a part.
See "Available Information."

SERVICES AGREEMENT. The Company and PCR have entered into a Services
Agreement pursuant to which PCR will continue to provide to the Company, at the
Company's request, certain administrative services, including the following:

- Payroll services, including the use of PCR's common paymaster;

- Accounting services, including reporting, account reconciliation, cash
management, bank account services, preparation of financial statements,
invoicing of customer accounts, collection of accounts receivable and
payment of accounts payable;

- Insurance and risk management services, including insurance coverage and
administration of risk management;

- Tax services, including preparation and filing of all tax returns,
assistance with tax compliance and accounting for taxes, and supervision
of audits and other proceedings and litigation;

- Human resources services, including advice and assistance relating to
employee benefits, employee screening, recruitment and training of
personnel, facilitation of government/regulatory reporting and assistance
with compliance issues;

- MIS services, including operational and technical support for telephones
and voice mail;

- Legal services, including contract review, drafting and negotiation,
litigation coordination and SEC compliance;

- Marketing services, including preparation and production of promotional
materials; and

- Employee benefit plan design, qualification and administration.

The Services Agreement provides for the allocation between the Company and
PCR of various joint expenses, such as payroll costs for shared employees,
utilities costs, equipment expenses, taxes and supplies, plus the payment by the
Company to PCR of an annual fee equal to the greater of $450,000 or 0.45% of the
Company's annual revenue. This fee is to be paid to PCR by the Company in
monthly installments based on the Company's revenue for the previous month.

PCR and the Company have agreed to joint market and cross-sell their
respective offerings. In addition, the Services Agreement requires PCR to
provide the Company with the right of first refusal to evaluate and participate
in service opportunities which come to PCR's attention. The Company is required
to provide a similar right of first refusal regarding any sales opportunities
for microcomputer hardware and related products which come to the Company's
attention. The Company and PCR have agreed to allocate the consolidated sales
commissions of PCR and its subsidiaries, including the Company. The Company's
portion of such sales commissions is based on the average of (i) the ratio of
the Company's gross profit contribution to the consolidated gross profit of PCR
and its subsidiaries, including the Company, and (ii) the ratio of the Company's
net revenue contribution to such consolidated net revenue. During the term of
the Services Agreement, and until the later of (i) one year after termination of
the Services Agreement or (ii) two years from the effective date of the Services
Agreement, PCR is restricted from engaging in activities which are competitive
with the services business transferred to the Company and the Company is
restricted from engaging in activities which are competitive with the
microcomputer hardware and related products business retained by PCR.

The initial term of the Services Agreement is for a period of one year
beginning on January 6, 1999. The Services Agreement shall automatically renew
for additional one-year periods unless either party gives notice of its intent
not to renew at least 30 days prior to the end of any term. The Services
Agreement can be terminated by either party upon 90 days written notice and
shall automatically terminate in the event of the Distribution or in the event
that PCR no longer owns a majority of the voting power of the Company.

Except for the services provided by PCR pursuant to the Services Agreement
and the other agreements described below, the Company will be responsible for
providing or otherwise obtaining all of the necessary administrative, management
and support services required to conduct its business, all of which were
previously provided or obtained by PCR.

SPACE SHARING AGREEMENT. The Company and PCR have entered into a Space
Sharing Agreement providing for the sharing by the Company and PCR of certain
office facilities, including the office facilities located in Hebron, Kentucky
at which the Company's and PCR's principal executive offices are located (the
"Headquarters Facility"). Under the Space Sharing Agreement, the costs
associated with leasing and maintaining facilities are, in general, allocated
between the Company and PCR on the basis of the ratio of the Company's gross
profit contribution to the consolidated gross profit of PCR and its subsidiaries
including the Company. The Company's rights to use portions of the shared
facilities (including the Headquarters Facility) leased from third parties, and
the corresponding obligations to

pay for such use, may be terminated as to any such facility by either the
Company or PCR on 90 days prior written notice. The Headquarters Facility is
leased by PCR from Pomeroy Investments, LLC. See "Management -- Compensation
Committee Interlocks and Insider Participation."

INDEMNIFICATION AGREEMENT. The Company and PCR have also entered into an
Indemnification Agreement. The Indemnification Agreement provides that each
party thereto (the "Indemnifying Party") will indemnify the other party thereto
and its directors, officers, employees, agents and representatives (the
"Indemnified Party") for liabilities that may be incurred by the Indemnified
Party relating to, resulting from or arising out of (i) the businesses and
operations conducted or formerly conducted, or assets owned or formerly owned,
by the Indemnifying Party and its subsidiaries (except, in the case where PCR is
the Indemnifying Party, the businesses, operations and assets of the Company) or
(ii) the failure by the Indemnifying Party to comply with any agreements
executed between the Company and PCR and those agreements executed in connection
with this offering.

STOCK REGISTRATION AGREEMENT. Pursuant to the terms of a Stock Registration
Agreement with PCR, the Company has provided PCR with certain registration
rights, including demand registration rights and certain "piggy-back"
registration rights, with respect to the shares of Class A Common Stock
underlying the shares of Class B Common Stock owned by PCR after this offering.
The Company's obligation is subject to certain limitations relating to a minimum
amount of Common Stock required for registration, the timing of registration and
other similar matters. The Company is obligated to pay all expenses incidental
to such registration, excluding underwriters' discounts and commissions and
certain legal fees and expenses. See "Risk Factors -- Shares Eligible for Future
Sale; Potential Adverse Impact of the Distribution" and "Description of Capital
Stock -- Registration Rights of PCR."

CREDIT FACILITY. The Company has entered into an agreement for an interim
credit facility with Deutsche Financial Services Corporation, the primary lender
to PCR. This credit facility allows the Company to borrow up to the lesser of
$20.0 million or the maximum borrowing capacity as calculated under the credit
facility. PCR has agreed to reserve certain of its assets to serve as collateral
to maintain the Company's maximum borrowing capacity of $20.0 million. Absent
such agreement, as of January 6, 1999, the Company's maximum borrowing capacity
under the credit facility would have been $10.0 million. The Company's
outstanding balance under such credit facility as of January 6, 1999 was
approximately $18.0 million. The Company's credit facility carries an interest
rate equal to the prime rate minus 1.25% per annum; provided, however, that if
at any time the aggregate monthly volume under the Distribution Finance Facility
between PCR and Deutsche Financial Services Corporation is less than $20.0
million per month for a three-month consecutive period, then for the following
month and for every month thereafter until the month after such aggregate volume
again exceeds $20.0 million per month for a three-month consecutive period, the
interest rate shall equal the prime rate minus 0.50% per annum. At January 6,
1999, the interest rate was 6.50% per annum. PCR has also guaranteed the entire
amount of the credit facility which guarantee is secured by all of the assets of
PCR. In addition, certain of the financial covenants are determined on a
consolidated basis. The Company intends to replace the interim credit facility
with a permanent credit facility after the consummation of this offering. There
can be no assurance that the Company will be able to obtain a new credit
facility or that any new credit facility will be available on terms acceptable
to the Company.

CONFLICTS OF INTEREST

Conflicts of interest may arise between the Company and PCR in a number of
areas, including:

- PCR's ability to control the Company's management and affairs;

- Shared sales and marketing functions;

- Indemnification obligations of each of PCR and Pomeroy Select;

- PCR's right to require us to register its shares of the Company's Class A
Common Stock;

- Sales or distributions by PCR of its shares of the Company's Class A or
Class B Common Stock;

- Differing financing needs or goals adversely affecting the Company's
borrowing terms or ability; and

- Differing operational, financial and employee benefit objectives.

Conflicts of interest which may develop, now or in the future, between PCR
and the Company may not be resolved in favor of the Company. Pursuant to the
Services Agreement, PCR has agreed not to engage in activities which are
competitive with Pomeroy Select. The Services Agreement is terminable on
relatively short notice. However, PCR's agreement not to compete with the
Company shall survive for the longer of two years from the date of the Services
Agreement or one year from the date of termination of the Services Agreement.
There can be no assurance that this agreement will prevent PCR from engaging in
such competitive activities or that the Company will not compete with PCR
regarding activities not currently engaged in by either company. Under the
Services Agreement, the Company may not engage in the distribution and direct
sales of hardware and software products in which PCR is engaged. In addition,
PCR may not to engage in the business of providing integrated desktop management
and network solutions, except through its ownership of the Company's Common
Stock. However, circumstances could arise in which the Company and PCR would
engage in activities in competition with one another.

The Company and PCR may enter into material transactions and agreements in
the future in addition to those described above. The Company has been advised by
PCR that it intends that, for so long as PCR owns a majority of the voting power
of the Company, the terms of any future transactions and agreements between the
Company and PCR or its affiliates will be at least as favorable to the Company
as could be obtained from unrelated third parties. The Board will utilize such
procedures in evaluating the terms and provisions of any material transactions
between the Company and PCR or its affiliates as the Board may deem appropriate
in light of its fiduciary duties under state law. Depending on the nature and
size of the particular transaction, in any such evaluation, the Board may rely
on management's statements and opinions and may or may not utilize outside
experts or consultants or obtain independent appraisals or opinions.

Two of the four Directors of the Company are also directors of PCR. Such
Directors are PCR's Chairman and Chief Executive Officer, David B. Pomeroy, II,
and Stephen E. Pomeroy, President and Chief Executive Officer of the Company.
Directors of the Company who are also directors of PCR will have conflicts of
interest with respect to matters potentially or actually involving or affecting
the Company and PCR, such as acquisitions, financing and other corporate
opportunities that may be suitable for the Company and PCR. To the extent that
such opportunities arise, such Directors may consult with their legal advisors
and make a determination after consideration of a number of factors, including
whether such opportunity is presented to any such Director in his capacity as a
Director of the Company, whether such opportunity is within the Company's line
of business or consistent with its strategic objectives and whether the Company
will be able to undertake or benefit from such opportunity. In addition,
determinations may be made by the Board, when appropriate, by the vote of the
disinterested Directors only. Notwithstanding the foregoing, there can be no
assurance that conflicts will be resolved in favor of the Company.

PRINCIPAL STOCKHOLDERS

The following table sets forth as of January 6, 1999, and as adjusted to
give effect to the sale of Class A Common Stock offered hereby, certain
information regarding beneficial ownership of the Company's Class A Common Stock
by (i) each person the Company expects to be the beneficial owner of more than
5% of the outstanding shares of Common Stock, (ii) each Director, (iii) each of
the Named Executives and (iv) all Directors and executive officers as a group.

PERCENTAGE(3)
----------------------------------
NAME(1) NUMBER(2) PRIOR TO OFFERING AFTER OFFERING
- ------------------------------------------------------------------- ------------ ----------------- ---------------

Pomeroy Computer Resources, Inc.(4)................................ 10,000,000 100.0%
David B. Pomeroy, II(5)............................................ 10,200,000 100.0%
Stephen E. Pomeroy(6).............................................. 200,000 2.0%
Larry H. Lokey(7).................................................. - *
Mark P. Schwarz(8)................................................. - *
Kenneth R. Waters(9)............................................... 10,000 *
Gerald L. Von Deylen(10)........................................... 10,000 *
All executives officers and Directors as a group (6 persons)(11)... 10,420,000 100.0%

- ------------------------

* Less than 1%.

(1) The address of Pomeroy Computer Resources, Inc. and all persons who are
executive officers or Directors of the Company is in care of the Company,
1020 Petersburg Road, Hebron, Kentucky 41048.

(2) The number of shares beneficially owned by each stockholder is determined
under rules promulgated by the Securities and Exchange Commission (the
"Commission") and the information is not necessarily indicative of
beneficial ownership for any other purpose. Under such rules, beneficial
ownership includes any shares as to which the individual or entity has sole
or shared voting power or investment power and also any shares which the
individual or entity has a right to acquire within 60 days after this
offering through the exercise of any stock option, warrant or other right.
The inclusion herein of such shares, however, does not constitute an
admission that the named stockholder is a direct or indirect beneficial
owner of such shares. Unless otherwise indicated, each person or entity
named in the table has sole voting power and investment power (or shares
such power with his or her spouse) with respect to all shares of capital
stock listed as owned by such person or entity.

(3) Applicable percentage of ownership is based on an aggregate of 10,000,000
shares of Common Stock outstanding on January 6, 1999 (consisting of no
shares of Class A Common Stock and 10,000,000 shares of Class B Common
Stock) and an aggregate of shares of Common Stock outstanding after
the completion of this offering (consisting of shares of Class A
Common Stock and 10,000,000 shares of Class B Common Stock).

(4) Represents 10,000,000 shares of Class A Common stock underlying the
10,000,000 shares of Class B Common Stock held by PCR.

(5) Includes 10,000,000 shares of Class A Common Stock underlying the Class B
Common Stock held by PCR. David B. Pomeroy, II, as Chairman, CEO and
beneficial owner of approximately 21.1% of the outstanding stock of PCR, may
be deemed to be the beneficial owner of such shares. David B. Pomeroy, II
disclaims beneficial ownership of such shares in excess of his pro rata
ownership of the common stock of PCR. Includes 200,000 shares of Class A
Common Stock issuable upon immediately exercisable options granted to David
B. Pomeroy, II as of January 6, 1999.

(6) Includes 200,000 shares of Class A Common Stock issuable upon immediately
exercisable options granted to Stephen E. Pomeroy as of January 6, 1999.

(7) Excludes 25,000 shares of Class A Common Stock issuable upon immediately
exercisable options expected to be granted to Mr. Lokey prior to the
consummation of this offering, contingent upon Mr. Lokey entering into an
employment agreement with the Company.

(8) Excludes 12,500 shares of Class A Common Stock issuable upon immediately
exercisable options expected to be granted to Mr. Schwarz prior to the
consummation of this offering, contingent upon Mr. Schwarz entering into an
employment agreement with the Company.

(9) Includes 10,000 shares of Class A Common Stock issuable upon immediately
exercisable options granted to Mr. Waters as of January 6, 1999.

(10) Includes 10,000 shares of Class A Common Stock issuable upon immediately
exercisable options granted to Mr. Von Deylen as of January 6, 1999.

(11) Includes 420,000 shares of Class A Common Stock issuable upon immediately
exercisable options granted to the officers and Directors of the Company as
of January 6, 1999.

DESCRIPTION OF CAPITAL STOCK

GENERAL

The authorized capital stock of the Company consists of 30,000,000 shares of
Class A Common Stock, par value $0.01 per share, 15,000,000 shares of Class B
Common Stock, par value $0.01 per share, and 5,000,000 shares of undesignated
preferred stock, par value $0.01 per share (the "Preferred Stock"). The
following statements are brief summaries of certain provisions with respect to
the Company's capital stock contained in its Certificate of Incorporation and
Bylaws, copies of which have been filed as exhibits to the Registration
Statement. The following summary is qualified in its entirety by reference
thereto.

COMMON STOCK

VOTING RIGHTS

The holders of Class A Common Stock and Class B Common Stock generally have
identical rights, except that holders of Class A Common Stock are entitled to
one vote per share while holders of Class B Common Stock are entitled to ten
votes per share on all matters to be voted on by stockholders. Holders of shares
of Class A Common Stock and Class B Common Stock are not entitled to cumulate
their votes in the election of Directors. Generally, all matters to be voted on
by stockholders must be approved by a majority (or, in the case of election of
Directors, by a plurality) of the votes entitled to be cast by the holders of
Class A Common Stock and Class B Common Stock present in person or represented
by proxy, voting together as a single class, subject to any voting rights
granted to holders of any Preferred Stock. Except as otherwise provided by law
or in the Certificate of Incorporation, and subject to any voting rights granted
to holders of any outstanding Preferred Stock, amendments to the Certificate of
Incorporation must be approved by a majority of the votes entitled to be cast by
the holders of Class A Common Stock and Class B Common Stock, voting together as
a single class. However, amendments to the Certificate of Incorporation that
would alter or change the powers, preferences or special rights of the Class A
Common Stock or the Class B Common Stock so as to affect them adversely also
must be approved by a majority of the votes entitled to be cast by the holders
of the shares affected by the amendment, voting as a separate class.
Notwithstanding the foregoing, any amendment to the Certificate of Incorporation
to increase the authorized shares of any class of capital stock of the Company
requires the approval only of a majority of the votes entitled to be cast by the
holders of Class A Common Stock and Class B Common Stock, voting together as a
single class.

DIVIDENDS

Holders of Class A Common Stock and Class B Common Stock will share ratably
on a per share basis in any dividend declared by the Board of Directors, subject
to any preferential rights of any outstanding Preferred Stock. Dividends payable
in shares of Common Stock may be paid only as follows: (i) shares of Class A
Common Stock may be paid only to holders of Class A Common Stock, and shares of
Class B Common Stock may be paid only to holders of Class B Common Stock; and
(ii) the number of shares so paid will be equal on a per share basis with
respect to each outstanding share of Class A Common Stock and Class B Common
Stock.

The Company may not reclassify, subdivide or combine shares of either class
of Common Stock without at the same time proportionally reclassifying,
subdividing or combining shares of the other class.

CONVERSION

Each share of Class B Common Stock is convertible while held by PCR at the
option of PCR into one share of Class A Common Stock. Following a Distribution
of Class B Common Stock to stockholders of PCR (whether or not a Distribution is
intended to qualify as a tax-free distribution), if any, shares of Class B
Common Stock will no longer be convertible into shares of Class A Common Stock
at the option of the stockholder but will convert automatically upon the first
transfer by the distributees. Each share of Class B Common Stock shall
automatically convert into one share of Class A Common Stock if, at any time
prior to a Distribution, the number of outstanding shares of Class B Common
Stock owned by PCR or a Class B Transferee, as defined in the Certificate of
Incorporation, as the case may be, is less than 50% of the aggregate number of
all shares of Common Stock then outstanding.

The occurrence of a Distribution is not a certainty. For a Distribution to
occur, the Board of Directors of PCR must conclude, at the time that the
Distribution may be considered, that the Distribution is in the best interests
of the stockholders of PCR. PCR has advised Pomeroy Select that such
determination may be conditioned upon the receipt of a favorable ruling from the
IRS as to the tax-free nature of the Distribution. PCR has not applied for such
a ruling as of the date of this offering.

Except for shares distributed through a Distribution or certain other
transfers permitted by the Certificate of Incorporation, upon the sale or other
transfer of shares of Class B Common Stock, such shares of Class B Common Stock
will be automatically converted into shares of Class A Common Stock on any other
transfer or sale. PCR has agreed with the Underwriters that it will not transfer
or distribute shares of Class B Common Stock for a period of at least 180 days
from the consummation of this offering.

OTHER RIGHTS

Unless approved by a majority of the votes entitled to be cast by the
holders of each class of Common Stock, voting separately as a class, in the
event of any reorganization or consolidation of the Company with one or more
corporations or a merger of the Company with another corporation in which shares
of Common Stock are converted into or exchangeable for shares of stock, other
securities or property (including cash), all holders of Common Stock, regardless
of class, will be entitled to receive the same kind and amount of shares of
stock and other securities and property (including cash).

On liquidation, dissolution or winding up of the Company, after payment in
full of the amounts required to be paid to holders of Preferred Stock, if any,
all holders of Common Stock, regardless of class, are entitled to receive the
same amount per share with respect to any distribution of assets to holders of
shares of Common Stock.

No shares of either class of Common Stock are subject to redemption or have
preemptive rights to purchase additional shares of Common Stock or other
securities of the Company.

Upon completion of this offering, all of the issued and outstanding shares
of Class A Common Stock and Class B Common Stock will be validly issued, fully
paid and nonassessable.

As of January 6, 1999, there were (i) no shares of Class A Common Stock
issued or outstanding, (ii) 10,000,000 shares of Class B Common Stock issued and
outstanding, (iii) one (1) stockholder of record and (iv) outstanding options to
purchase an aggregate of 620,000 shares of Class A Common Stock, 420,000 of
which were immediately exercisable. See "Management -- 1999 Stock Plan."

PREFERRED STOCK

The Preferred Stock is issuable from time to time in one or more series and
with such designations, preferences and other rights for each series as shall be
stated in the resolutions providing for the

designation and issue of each such series adopted by the Board of Directors of
the Company. The Board of Directors is authorized by the Certificate of
Incorporation to determine, among other things, the voting, dividend,
redemption, conversion, exchange and liquidation powers, rights and preferences
and the limitations thereon pertaining to such series. The Board of Directors,
without stockholder approval, may issue Preferred Stock with voting and other
rights that could adversely affect the voting power of the holders of the Common
Stock and that could have certain anti-takeover effects. The Company has no
present plans to issue any shares of Preferred Stock. The ability of the Board
of Directors to issue Preferred Stock without stockholder approval could have
the effect of delaying, deferring or preventing a change in control of the
Company or the removal of existing management.

ANTI-TAKEOVER EFFECTS OF CERTAIN CERTIFICATE OF INCORPORATION AND BYLAW
PROVISIONS

GENERAL

Certain provisions of the Certificate of Incorporation and Bylaws summarized
below may be deemed to have an anti-takeover effect and may delay, deter, or
prevent a tender offer or takeover attempt that a stockholder might consider to
be in its best interest, including offers or attempts that might result in a
premium being paid over the market price for the shares held by stockholders.

BOARD OF DIRECTORS

The Certificate of Incorporation and Bylaws provide that the number of
Directors of the Company shall be fixed from time to time exclusively by
resolution adopted by the affirmative vote of not less than 66 2/3% of the
entire Board of Directors, but shall not be less than three nor more than nine
Directors. In addition, the Bylaws provide that any vacancies will be filled by
the affirmative vote of a majority of the remaining Directors, even if less than
a quorum, or by a sole remaining Director, or by stockholders if such vacancy
was caused by the action of stockholders (in which event such vacancy may not be
filled by the Directors or a majority thereof).

The Bylaws provide that Directors may be removed from office by the
affirmative vote of the holders of at least a majority of the voting power of
the Company entitled to vote generally in the election of Directors, voting
together as one class. Notwithstanding the foregoing, whenever holders of
outstanding shares of one or more series of Preferred Stock are entitled to
elect Directors of the Company pursuant to the provisions applicable in the case
of arrearages in the payment of dividends or other defaults contained in the
resolution or resolutions of the Board of Directors providing for the
establishment of any such series, any such Director of the Company so elected
may be removed in accordance with the provision of such resolution or
resolutions.

ADVANCE NOTICE PROCEDURES

The Bylaws provide for an advance notice procedure for the nomination, other
than by or at the direction of the Board of Directors, of candidates for
election as Directors, as well as for other stockholder proposals to be
considered at annual meetings of stockholders. In general, notice of intent to
nominate a Director or raise matters at such meetings will have to be received
in writing by the Company at least 150 days prior to the anniversary of the
previous year's annual meeting of stockholders, and must contain certain
information concerning the person to be nominated or the matters to be brought
before the meeting and concerning the stockholder submitting the proposal.

SPECIAL MEETINGS AND ACTION BY WRITTEN CONSENT

The Bylaws provide that, unless otherwise provided by law, special meetings
of stockholders may be called only by (i) the Chairman, (ii) the Board of
Directors pursuant to a resolution approved by a majority of the Directors, or
(iii) the holders of at least two-thirds of the Company's issued and outstanding
capital stock entitled to vote at such special meeting of stockholders. In
addition, the

Certificate of Incorporation provides that on or after the date on which neither
PCR nor a Class B Transferee, as defined therein, continues to beneficially own
50% or more of the total voting power of all classes of Common Stock,
stockholders of the Company may not act by written consent in lieu of a meeting
of stockholders.

AMENDMENT

Amendments of a number of the foregoing provisions, including the
Certificate of Incorporation and Bylaw provisions with respect to stockholder
action by written consent, stockholder right to call special meetings, advance
notice procedures, board classification and removal provisions, require approval
by holders of at least 66 2/3% of all of the outstanding shares of all classes
of capital stock of the Company entitled to cast votes in the election of
Directors, voting together as a single class. The Bylaws may also be amended by
action of the Board of Directors.

CONDUCT OF CERTAIN AFFAIRS OF THE CORPORATION

The Company's Certificate of Incorporation provides that, except as
otherwise agreed to in writing by PCR and the Company, in the event that a
Director or officer of the Company who is also a director or officer of PCR
acquires knowledge of a matter which may be a corporate opportunity for both the
Company and PCR, such Director or officer shall have fully fulfilled his
fiduciary duties to the Company and its stockholders so long as the Director or
officer acts in accordance with the following policy: (i) a corporate
opportunity offered to an officer of the Company who is a director (but not an
officer) of PCR belongs to the Company; (ii) a corporate opportunity offered to
a person who is a Director (but not an officer) of the Company and who is a
director or officer of PCR shall belong to the Company only if expressly offered
to such person in writing solely in his capacity as an officer of the Company;
and (iii) a corporate opportunity offered to any person who is an officer of
both the Company and PCR shall belong to the Company only if expressly offered
to such person in writing solely in his capacity as an officer of the Company.

DELAWARE LAW AND CERTAIN CERTIFICATE OF INCORPORATION AND BYLAW PROVISIONS

Section 203 of the DGCL, as amended ("Section 203"), provides that, subject
to certain exceptions specified therein, an "interested stockholder" of a
Delaware corporation shall not engage in any business combination, including
mergers or consolidations, asset sales or other transactions, with the
corporation for a three-year period following the date at which the stockholder
becomes an "interested stockholder" unless (i) prior to such date, the board of
directors of the corporation approved either the business combination or the
transaction which resulted in the stockholder becoming an "interested
stockholder," (ii) upon consummation of the transaction which resulted in the
stockholder becoming an "interested stockholder," the interested stockholder
owned at least 85% of the voting stock of the corporation outstanding at the
time that the transaction commenced (excluding certain shares), or (iii) on or
subsequent to such date, the business combination is approved by the board of
directors of the corporation and authorized at an annual or special meeting of
stockholders by the affirmative vote of at least 66 2/3% of the outstanding
voting stock which is not owned by the "interested stockholder." Except as
otherwise specified in Section 203, an "interested stockholder" is defined to
include (i) any person which is the owner of 15% or more of the outstanding
voting stock of the corporation, or is an affiliate or associate of the
corporation and was the owner of 15% or more of the outstanding voting stock of
the corporation at any time within three years immediately prior to the relevant
date and (ii) the affiliates and associates of any such person. The Company's
stockholders, by adopting an amendment to its Certificate of Incorporation or
Bylaws, may elect not to be governed by Section 203, effective immediately upon
adoption of such amendment. Neither the Certificate of Incorporation nor the
Bylaws presently exclude the Company from the restrictions imposed by Section
203.

These and other provisions could have the effect of making it more difficult
to acquire the Company by means of a tender offer, proxy contest or otherwise or
to remove the incumbent officers and Directors of the Company. These provisions
may discourage certain types of coercive takeover practices and encourage
persons seeking to acquire control of the Company to first negotiate with the
Company.

LIMITATIONS ON DIRECTORS' LIABILITY

The Certificate of Incorporation provides that no Director of the Company
shall be liable to the Company or its stockholders for monetary damages for
breach of fiduciary duty as a Director, except for liability (i) for any breach
of the Director's duty of loyalty to the Company or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) in respect of certain unlawful dividend payments
or stock redemptions or repurchases as provided in Section 174 of the DGCL or
(iv) for any transaction from which the Director derived an improper personal
benefit. The effect of these provisions will be to eliminate the rights of the
Company and its stockholders (through stockholders' derivative suits on behalf
of the Company) to recover monetary damages against a Director for breach of
fiduciary duty as a Director (including breaches resulting from grossly
negligent behavior), except in the situations described above. The Company's
Certificate of Incorporation and Bylaws provide that the Company is authorized
to provide indemnification of Directors to the fullest extent authorized under
the DGCL. The Company intends to enter into indemnification agreements with each
of its Directors providing for indemnification of such Directors to the fullest
extent permitted by applicable law. The Company believes that such
indemnification will assist the Company in continuing to attract and retain
talented Directors in light of the growing risk of litigation directed against
directors of publicly-held corporations.

REGISTRATION RIGHTS OF PCR

Pursuant to the terms of the Stock Registration Agreement, the Company has
provided PCR with certain registration rights, including demand registration
rights and certain "piggy-back" registration rights, with respect to the shares
of Class A Common Stock underlying the shares of Class B Common Stock owned by
PCR after this offering. The Company's obligation is subject to certain
limitations relating to a minimum amount of Common Stock required for
registration, the timing of registration and other similar matters. The Company
is obligated to pay all expenses incidental to such registration, excluding
underwriters' discounts and commissions and certain legal fees and expenses. See
"Risk Factors -- Shares Eligible for Future Sale; Potential Adverse Impact of
the Distribution."

LISTING

Application has been made to have the Company's Class A Common Stock
approved for quotation on the Nasdaq National Market under the symbol "PSIS."

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Class A Common Stock is The Fifth
Third Bank, N.A.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, the Company will have shares of
Class A Common Stock outstanding and 10,000,000 shares of Class B Common Stock
outstanding. Of these shares, the shares of Class A Common Stock sold
in the offering (plus any additional shares sold upon exercise of the
Underwriters' over-allotment option) will be freely transferable by persons
other than "affiliates" of the Company without restriction or further
registration under the Securities Act. The 10,000,000 shares of Class B Common
Stock held by PCR, and the 10,000,000 shares of Class A Common Stock underlying
the Class B Common Stock held by PCR, will be "restricted securities" (the
"Restricted Shares") within the meaning of Rule 144 under the Securities Act and
may not be sold in

the absence of registration under the Securities Act unless an exemption from
registration is available, including an exemption afforded by Rule 144.

The Company, its officers and Directors, and PCR each have entered into
"lock-up" agreements with a Representative of the Underwriters, providing that,
subject to certain exceptions, they will not offer, sell or otherwise dispose of
any shares of Common Stock for a period of 180 days after the date of this
Prospectus without the prior written consent of NationsBanc Montgomery
Securities LLC, acting as a Representative of the Underwriters. NationsBanc
Montgomery Securities LLC may release any of such shares in its sole discretion
at any time and without prior notice. In the event of a Distribution, the shares
of Class A Common Stock underlying the distributed shares of Class B Common
Stock will be freely transferable by such distributees. PCR has agreed with the
Underwriters that it will not transfer or distribute shares of Class B Common
Stock for a period of at least 180 days from the consummation of this offering.
Following expiration of the "lock-up" period, all of the Restricted Shares will
become eligible for sale at various times commencing January 7, 2000 pursuant to
Rule 144, subject to certain limitations described below. In addition, the
Restricted Shares may be sold earlier if PCR or a subsequent transferee
exercises any available registration rights or following a Distribution. PCR has
the right in certain circumstances to require the Company to register under the
Securities Act all of the shares of Class A Common Stock beneficially owned by
PCR. See "Description of Capital Stock -- Registration Rights of PCR."

Rule 144, as currently in effect, provides that an affiliate of the Company
or a person (or persons whose sales are aggregated) who has beneficially owned
Restricted Shares for at least one year is entitled to sell, commencing 90 days
after the date of this Prospectus, within any three-month period, a number of
shares that does not exceed the greater of 1% of the then outstanding shares of
Class A Common Stock (an aggregate of shares of Class A Common Stock
will be outstanding immediately after this offering) or the average weekly
trading volume in the Class A Common Stock during the four calendar weeks
preceding such sale. Sales under Rule 144 also are subject to certain
manner-of-sale provisions, notice requirements and the availability of current
public information about the Company. However, a person who is not an
"affiliate" of the Company at any time during the three months preceding a sale,
and who has beneficially owned Restricted Shares for a least two years, is
entitled to sell such shares under Rule 144 without regard to the limitations
described above.

As of the date of this Prospectus, there were outstanding options to
purchase an aggregate of 620,000 shares of Class A Common Stock. Giving effect
to vesting provisions limiting the exercisability of all of the outstanding
options and the "lock-up" period applicable to certain option holders, none of
these shares will become available for sale in the public market pursuant to
Rules 144 and 701 under the Securities Act (relating to the sale of shares
issuable under certain compensatory stock plans) until at least 180 days after
completion of this offering. 420,000 of such shares will become available for
resale at the expiration of the "lock-up" period. The Company may register on a
Form S-8 registration statement under the Securities Act, during the 180-day
lock-up period, the resale of 3,000,000 shares of Class A Common Stock issuable
upon the exercise of outstanding options or reserved for issuance under the 1999
Stock Plan. See "Management -- 1999 Stock Plan."

Since there has been no public market for shares of the Class A Common Stock
prior to this offering, the Company is unable to predict the effect that sales
made pursuant to Rules 144 or 701 under the Securities Act, or otherwise, may
have on the prevailing market price of the shares of the Class A Common Stock.
Sales of a substantial amount of the Class A Common Stock in the public market,
or the perception that such sales could occur, could adversely affect market
prices. See "Risk Factors -- Shares Eligible for Future Sale; Potential Adverse
Impact of the Distribution."

UNDERWRITING

The Underwriters named below (the "Underwriters"), represented by
NationsBanc Montgomery Securities LLC, J.C. Bradford & Co. and Wheat First
Union, a division of Wheat First Securities, Inc., (the "Representatives"), have
severally agreed, subject to the terms and conditions set forth in the
Underwriting Agreement, to purchase from the Company the number of shares of
Class A Common Stock indicated below opposite their respective names at the
initial public offering price less the underwriting discount set forth on the
cover page of this Prospectus. The Underwriting Agreement provides that the
obligations of the Underwriters to pay for and accept delivery of the shares of
Class A Common Stock are subject to certain terms and conditions precedent, and
that the Underwriters are committed to purchase all of such shares, if any are
purchased.

UNDERWRITER NUMBER OF SHARES
- --------------------------------------------------------------------------- -----------------

NationsBanc Montgomery Securities LLC......................................
J.C. Bradford & Co.........................................................
Wheat First Securities, Inc................................................

-----------------
TOTAL..................................................................
-----------------
-----------------

The Representatives have advised the Company that the Underwriters initially
propose to offer the shares of Class A Common Stock to the public on the terms
set forth on the cover page of this Prospectus. The Underwriters may allow to
selected dealers a concession of not more than $ per share, and the
Underwriters may allow, and such dealers may reallow, a concession of not more
than $ per share to certain other dealers. After, but not prior to the
completion of this offering, the offering price and concessions and reallowances
to dealers may be changed by the Representatives. The shares of Class A Common
Stock are offered subject to receipt and acceptance by the Underwriters and to
certain other conditions, including the right to reject orders in whole or in
part.

The Company has granted an option to the Underwriters, exercisable during
the 30-day period after the date of this Prospectus, to purchase up to an
aggregate maximum of additional shares of Class A Common Stock to cover
over-allotments, if any, at the same price per share as the initial
shares to be purchased by the Underwriters. To the extent that the Underwriters
exercise this option, each of the Underwriters will be committed, subject to
certain conditions, to purchase such additional shares in approximately the same
proportion as set forth in the above table. The Underwriters may purchase such
shares only to cover over-allotments made in connection with this offering.

The Company's officers and Directors, certain option holders and PCR, who
immediately following this offering (assuming no exercise of the over-allotment
option) collectively will beneficially own shares of Class A Common
Stock and 10,000,000 shares of Class B Common Stock, have agreed not to directly
or indirectly sell, offer, contract or grant any option to sell, pledge,
transfer, establish an open put equivalent position or otherwise dispose of any
rights with respect to any shares of Common Stock, any options to purchase
Common Stock, or any securities convertible or exchangeable for Common Stock,
owned directly by such holders or with respect to which they have the power of
disposition for a period of 180 days after the date of this Prospectus without
the prior written consent of NationsBanc Montgomery Securities LLC. In addition,
the Company has agreed not to sell, offer to sell, contract to sell or otherwise
sell or dispose of any shares of Common Stock or any rights to acquire Common
Stock, other than options for shares granted pursuant to its stock plan, shares
issued upon the exercise of outstanding options, and shares issued pursuant to
acquisitions of business of

businesses, for a period of 180 days after the date of this Prospectus without
the prior written consent of NationsBanc Montgomery Securities LLC. NationsBanc
Montgomery Securities LLC may, in its sole discretion and at any time without
notice, release all or any portion of the securities subject to the Lock-up
Agreements. See "Shares Eligible for Future Sale."

The Underwriting Agreement provides that the Company and PCR will indemnify
the several Underwriters against certain liabilities, including civil
liabilities under the Securities Act, or will contribute to payments the
Underwriters may be required to make in respect thereof.

Prior to this offering, there has been no public market for the Class A
Common Stock. Consequently, the initial public offering price has been
determined by negotiations among the Company, PCR and the Representatives. Among
the factors considered in such negotiations were the history of, and prospects
for, the Company and the industry in which it competes, an assessment of the
Company's management, the Company's past and present operations, its past and
present financial performance, the prospects for future earnings of the Company,
the present state of the Company's development, the general condition of the
securities markets at the time of the offering and the market prices of and
demand for publicly traded common stock of comparable companies in recent
periods, and other factors deemed relevant.

Certain persons participating in this offering may engage in transactions
that stabilize, maintain or otherwise affect the price of the Class A Common
Stock offered hereby. Such transactions may include stabilizing, the purchase of
Class A Common Stock to cover syndicate short positions and the imposition of
penalty bids. A stabilizing bid means the placing of any bid or the effecting of
any purchase for the purpose of pegging, fixing or maintaining the price of the
Class A Common Stock. A syndicate covering transaction means the placing of any
bid on behalf of the underwriting syndicate or the effecting of any purchase to
reduce a short position created in connection with the offering. A penalty bid
means an arrangement that permits the Underwriters to reclaim a selling
concession from a syndicate member in connection with the offering when shares
of Class A Common Stock sold by the syndicate member are purchased in syndicate
covering transactions. Such transactions may stabilize or maintain the market
price of the Class A Common Stock at a level above that which otherwise might
prevail in the open market and, if commenced, may be discontinued at any time.

The Representatives have informed the Company that the Underwriters do not
expect to make sales in excess of 5% of the number of shares of Class A Common
Stock offered hereby to accounts over which they exercise discretionary
authority.

LEGAL MATTERS

The validity of the shares of the Class A Common Stock offered hereby will
be passed upon for the Company by Cors & Bassett, Cincinnati, Ohio. Certain
legal matters in connection with the offering will be passed upon for the
Underwriters by Buchanan Ingersoll Professional Corporation, Princeton, New
Jersey.

EXPERTS

The financial statements of the Company at October 5, 1998, January 5, 1998
and January 5, 1997 and for the nine months ended October 5, 1998 and for each
of the three years in the period ended January 5, 1998, appearing in this
Prospectus and Registration Statement have been audited by Grant Thornton LLP,
independent auditors, as set forth in their report thereon appearing elsewhere
herein, and are included in reliance upon such report given upon the authority
of such firm as experts in accounting and auditing.

AVAILABLE INFORMATION

The Company has filed with the Commission a Registration Statement on Form
S-1 (the "Registration Statement") under the Securities Act, with respect to the
shares of Class A Common Stock offered hereby. This Prospectus, which forms a
part of the Registration Statement, does not contain all the information set
forth in the Registration Statement and the exhibits and schedules filed
therewith. For further information with respect to the Company and the shares of
Class A Common Stock offered hereby, reference is made to the Registration
Statement and to such exhibits and schedules filed therewith. Statements
contained herein as to the content of any contract or other document are not
necessarily complete and, in each instance, reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement, and each such statement shall be deemed qualified in its entirety by
such reference.

The Registration Statement and the exhibits and schedules thereto may be
inspected without charge at the principal office of the Commission at the Public
Reference Section of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the Commission located at
Seven World Trade Center, Suite 1300, New York, New York 10048 and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511.
Copies of such documents may be obtained from the Public Reference Section of
the Commission, at prescribed rates. This material also may be accessed
electronically by means of the Commission's website on the Internet at
http://www.sec.gov. Information regarding the operation of the Public Reference
Room may be obtained by calling the Commission at 1(800) SEC-0330.

The Company intends to furnish its stockholders with annual reports
containing financial statements certified by its independent accountants and
make available quarterly reports containing unaudited financial information for
the first three quarters of each year. In addition, PCR is subject to the
information requirements of the Securities Exchange Act of 1934, as amended, and
in accordance therewith files reports and other information with the Commission.
Such reports and other information may be inspected and copied at the locations
set forth above.

POMEROY SELECT INTEGRATION SOLUTIONS, INC.
INDEX TO FINANCIAL STATEMENTS

PAGE
---------

Report of Independent Certified Public Accountants....................................................... F-2
Balance Sheets........................................................................................... F-3
Statements of Income..................................................................................... F-4
Statements of Stockholder's Equity....................................................................... F-5
Statements of Cash Flows................................................................................. F-6
Notes to Financial Statements............................................................................ F-7

F-1

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholder
Pomeroy Select Integration Solutions, Inc.

We have audited the accompanying balance sheets of Pomeroy Select
Integration Solutions, Inc. as of January 5, 1997 and 1998 and October 5, 1998,
and the related statements of income, equity, and cash flows for each of the
three years in the period ended January 5, 1998 and the nine months ended
October 5, 1998. 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 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 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 Pomeroy Select Integration
Solutions, Inc. at January 5, 1997 and 1998 and October 5, 1998, and the results
of its operations and its cash flows for each of the three years in the period
ended January 5, 1998 and the nine months ended October 5, 1998 in conformity
with generally accepted accounting principles.

Grant Thornton LLP

/s/ Grant Thorton LLP

Cincinnati, Ohio
December 9, 1998, except for
Notes 1, 9 and 14 as to which the
date is January 6, 1999.

F-2

POMEROY SELECT INTEGRATION SOLUTIONS, INC.

BALANCE SHEETS

(IN THOUSANDS)

AS OF AS OF
JANUARY 5, OCTOBER 5, 1998
-------------------- ----------------------
1997 1998 ACTUAL
--------- --------- --------- PRO FORMA
-----------
(UNAUDITED)

ASSETS

CURRENT ASSETS:
Accounts receivable:
Trade, less allowance of $52 and $50 at January 5, 1997 and 1998
and $59 at October 5, 1998, respectively........................ $ 7,453 $ 11,008 $ 13,145 $ 13,145
Vendor receivables, less allowance of $158 and $330 at January 5,
1997 and 1998 and $247 at October 5, 1998, respectively......... 2,315 2,135 8,273 8,273
Other............................................................. 28 87 168 168
--------- --------- --------- -----------
Total receivables............................................... 9,796 13,230 21,586 21,586
--------- --------- --------- -----------
Inventories......................................................... 3,280 5,246 6,037 6,037
Other............................................................... 283 595 889 231
--------- --------- --------- -----------
Total current assets............................................ 13,359 19,071 28,512 27,854
--------- --------- --------- -----------
FURNITURE, FIXTURES AND EQUIPMENT:
Furniture, fixtures and equipment................................... 1,416 2,426 2,758 2,758
Less accumulated depreciation....................................... 404 678 1,047 1,047
--------- --------- --------- -----------
Net furniture, fixtures and equipment........................... 1,012 1,748 1,711 1,711
--------- --------- --------- -----------
Goodwill and other intangible assets.................................. 3,153 3,800 6,854 6,854
Other assets.......................................................... 158 83 108 -
--------- --------- --------- -----------
Total assets.................................................... $ 17,682 $ 24,702 $ 37,185 $ 36,419
--------- --------- --------- -----------
--------- --------- --------- -----------

LIABILITIES AND STOCKHOLDER'S EQUITY

CURRENT LIABILITIES:
Current portion of notes payable.................................... $ 63 $ 166 $ 246 $ 246
Trade accounts payable.............................................. 2,543 2,848 5,486 -
Bank note payable................................................... 731 1,630 7,409 18,069
Due to parent....................................................... 6,614 6,588 6,158 -
Deferred revenue.................................................... 2,318 3,503 4,059 4,059
Accrued liabilities................................................. 990 1,839 1,008 1,226
--------- --------- --------- -----------
Total current liabilities....................................... 13,259 16,574 24,366 23,600
--------- --------- --------- -----------
Notes payable......................................................... 153 115 207 207
STOCKHOLDER'S EQUITY:
Preferred Stock, $0.01 par value, 5,000 authorized; none authorized,
issued and outstanding at January 5, 1997 and 1998 and October 5,
1998; pro forma, none issued and outstanding...................... - - - -
Class A Common Stock, $0.01 par value, 30,000 authorized; none
authorized, issued and outstanding at January 5, 1997 and 1998 and
October 5, 1998; pro forma, none issued and outstanding........... - - - -
Class B Common Stock, $0.01 par value, 15,000 authorized; none
authorized, issued and outstanding at January 5, 1997 and 1998 and
October 5, 1998; pro forma, 10,000 shares issued and
outstanding....................................................... - - - 100
Additional paid-in-capital.......................................... - - - 12,512
Stockholder's net investment........................................ 4,270 8,013 12,612 -
--------- --------- --------- -----------
Total stockholder's equity...................................... 4,270 8,013 12,612 12,612
--------- --------- --------- -----------
Total liabilities and stockholder's equity...................... $ 17,682 $ 24,702 $ 37,185 $ 36,419
--------- --------- --------- -----------
--------- --------- --------- -----------

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

F-3

POMEROY SELECT INTEGRATION SOLUTIONS, INC.

STATEMENTS OF INCOME

(IN THOUSANDS)

NINE MONTHS ENDED
YEARS ENDED JANUARY 5, OCTOBER 5,
------------------------------- ----------------------
1996 1997 1998 1997 1998
--------- --------- --------- ----------- ---------
(UNAUDITED)

Revenue...................................... $ 17,243 $ 26,396 $ 45,209 $ 31,903 $ 51,401
Cost of revenue.............................. 10,123 16,487 27,137 18,418 30,633
--------- --------- --------- ----------- ---------
Gross profit............................. 7,120 9,909 18,072 13,485 20,768

Operating expenses:
Selling, general and administrative
expenses................................. 5,089 6,199 11,457 8,634 12,439
Depreciation and amortization.............. 198 338 582 375 737
--------- --------- --------- ----------- ---------
Total operating expenses................. 5,287 6,537 12,039 9,009 13,176
--------- --------- --------- ----------- ---------
Operating income 1,833 3,372 6,033 4,476 7,592
Other expenses (income), net:
Interest expense........................... 149 180 94 96 339
Other expense (income)..................... (16) (50) 16 25 (47)
--------- --------- --------- ----------- ---------
Total other expense...................... 133 130 110 121 292
--------- --------- --------- ----------- ---------
Income before provision for income taxes..... 1,700 3,242 5,923 4,355 7,300
Provision for income taxes................... 690 1,323 2,180 1,603 2,701
--------- --------- --------- ----------- ---------
Net income............................... $ 1,010 $ 1,919 $ 3,743 $ 2,752 $ 4,599
--------- --------- --------- ----------- ---------
--------- --------- --------- ----------- ---------

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

F-4

POMEROY SELECT INTEGRATION SOLUTIONS, INC.
STATEMENTS OF STOCKHOLDER'S EQUITY
(IN THOUSANDS)

COMMON STOCK ADDITIONAL STOCKHOLDER'S
---------------------- PAID-IN NET TOTAL
SHARES AMOUNT CAPITAL INVESTMENT EQUITY
--------- ----------- ----------- ----------- ---------

Balances at January 5, 1995................. - $ - $ - $ 1,341 $ 1,341
Net income................................ - - - 1,010 1,010
--------- ----- ----------- ----------- ---------
Balances at January 5, 1996................. - - - 2,351 2,351
Net income................................ - - - 1,919 1,919
--------- ----- ----------- ----------- ---------
Balances at January 5, 1997 - - - 4,270 4,270
Net income................................ - - - 3,743 3,743
--------- ----- ----------- ----------- ---------
Balances at January 5, 1998................. - - - 8,013 8,013
Net income................................ - - - 4,599 4,599
--------- ----- ----------- ----------- ---------
Balances at October 5, 1998................. - - - 12,612 12,612
Pro forma issuance of Class B Common Stock
upon incorporation of the Company
(unaudited)............................. 10,000 100 12,512 (12,612) -
--------- ----- ----------- ----------- ---------
Pro forma balances at October 5, 1998
(unaudited)............................... 10,000 $ 100 $ 12,512 $ - $ 12,612
--------- ----- ----------- ----------- ---------
--------- ----- ----------- ----------- ---------

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

F-5

POMEROY SELECT INTEGRATION SOLUTIONS, INC.
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

NINE MONTHS ENDED
YEARS ENDED JANUARY 5, OCTOBER 5,
------------------------------- ----------------------
1996 1997 1998 1997 1998
--------- --------- --------- ----------- ---------
(UNAUDITED)

Cash flows from operating activities:
Net income.................................. $ 1,010 $ 1,919 $ 3,743 $ 2,752 $ 4,599
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation............................ 112 167 274 198 370
Amortization............................ 86 171 308 177 367
Changes in working capital accounts, net of
effects of acquisitions:
Accounts receivable..................... (299) (2,239) (2,975) (6,431) (1,700)
Inventories............................. (163) (156) (1,723) (1,967) (281)
Trade payables.......................... (80) (752) 37 167 (3,596)
Deferred revenue........................ 648 (418) 1,031 892 473
Other, net.............................. 57 (582) 359 (334) (1,575)
--------- --------- --------- ----------- ---------
Net operating activities................ 1,371 (1,890) 1,054 (4,546) (1,343)
--------- --------- --------- ----------- ---------
Cash flows from investing activities:
Capital expenditures.................... (236) (254) (955) (663) (261)
--------- --------- --------- ----------- ---------
Net investing activities................ (236) (254) (955) (663) (261)
--------- --------- --------- ----------- ---------
Cash flows from financing activities:
Net decrease in notes payable........... (26) (993) (219) (154) (480)
Net increase (decrease) in bank note
payable............................... 241 (920) 899 54 5,779
Net increase (decrease) in due to
parent................................ (1,350) 4,057 (779) 5,309 (3,695)
--------- --------- --------- ----------- ---------
Net financing activities................ (1,135) 2,144 (99) 5,209 1,604
--------- --------- --------- ----------- ---------
Increase (decrease) in cash................. - - - - -
Cash:
Beginning of period..................... - - - - -
--------- --------- --------- ----------- ---------
End of period........................... $ - $ - $ - $ - $ -
--------- --------- --------- ----------- ---------
--------- --------- --------- ----------- ---------

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

F-6

POMEROY SELECT INTEGRATION SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED JANUARY 5, 1996, JANUARY 5, 1997, JANUARY 5,
1998 AND NINE MONTHS ENDED OCTOBER 5, 1998

1. FORMATION AND OPERATIONS

Pomeroy Select Integration Solutions, Inc. (the "Company") was incorporated
on December 14, 1998 as a wholly-owned subsidiary of Pomeroy Computer Resources,
Inc. ("PCR"). The financial statements presented relate to the information
technology ("IT") services business of PCR. On January 6, 1999, PCR contributed
the assets, liabilities, business, operations and personnel of its IT services
business to the Company in exchange for 10,000,000 shares of the Company's Class
B Common Stock.

The Company is a single-source provider of integrated desktop management and
network services that help corporate clients manage their IT assets. The Company
offers three categories of services: life cycle services, internetworking
services and end-user support services. Life cycle services include technology
deployment, warranty and non-warranty repair and maintenance, a full range of
install, move, add or change services, redeployment and mobile systems
management, asset discovery and tracking and end-of-life services.
Internetworking solutions include project management; network design,
integration, management, migration and support; and cabling services. End-user
support services include customized help desk, Internet-based training and
video/teleconferencing services.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION -- The accompanying financial statements consist of
the financial statements of the Company as described in Note 1. These statements
are presented as if the Company had existed as a corporation separate from PCR
and include the Company's historical assets, liabilities, sales and expenses
directly related to the Company's operations that were either specifically
identifiable or allocable using methods which took into consideration the ratio
of the Company's gross profit contribution to the consolidated gross profit of
PCR and other appropriate factors.

As part of PCR's central cash management system, all cash generated from and
cash required to support the Company's operations were deposited and received
through PCR's corporate operating cash accounts. As a result, there were no
separate bank accounts or accounting records for the Company's transactions.
Accordingly, the amounts represented by the caption "Due to parent" and "Bank
note payable" on the Company's Financial Statements represent the net effect of
all cash transactions for the Company.

For the periods presented, certain general and administrative expenses
reflected in the financial statements include allocations of certain corporate
expenses from PCR. These allocations took into consideration the ratio of the
Company's gross profit contribution to the consolidated gross profit of PCR and
other appropriate factors and generally include administrative expenses related
to general management, insurance, information management, occupancy, marketing
and other miscellaneous services. Allocations of corporate expenses are
estimates based on management's best estimate of actual expenses. It is
management's opinion that the expenses charged to the Company are reasonable.

Interest expense shown in the financial statements reflects interest expense
associated with Bank note payable allocated based on the weighted average
interest rate under PCR's credit facility agreement (see Note 5). Management
believes that such an allocation is reasonable.

The financial information included herein may not necessarily reflect the
financial position, results of operations or cash flows of the Company in the
future or what the balance sheets, results of

F-7

POMEROY SELECT INTEGRATION SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED JANUARY 5, 1996, JANUARY 5, 1997, JANUARY 5,
1998 AND NINE MONTHS ENDED OCTOBER 5, 1998

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
operations or cash flows of the company would have been if it had been a
separate, stand-alone, publicly-held corporation during the periods presented.

FISCAL YEAR -- The Company's fiscal year is a 12-month period ending January
5.

REVENUE AND COST RECOGNITION -- Revenue is recognized as services are
performed or ratably over the term of the particular contract. Fixed-price
contracts are recognized on the percentage-of-completion method. Contract costs
are recognized as incurred. Any possible losses on contracts are recognized when
known or estimatable.

FURNITURE, FIXTURES AND EQUIPMENT -- Furniture, fixtures and equipment,
which are specifically identifiable to the business of the Company, are stated
at cost. Depreciation on furniture, fixtures and equipment is computed using the
straight-line method over estimated useful lives, principally three to seven
years. Expenditures for repairs and maintenance are charged to expense as
incurred and additions and improvements that significantly extend the lives of
assets are capitalized. Upon sale or retirement of depreciable property, the
cost and accumulated depreciation are removed from the related accounts and any
gain or loss is reflected in the results of operations.

GOODWILL AND OTHER INTANGIBLE ASSETS -- Goodwill represents specifically
identifiable amounts and allocations from PCR relating to the Company's share of
each of PCR's historical acquisitions. The allocations took into consideration
each acquisition's IT services component and the Company's proportionate share
of income before provision for income taxes. Management believes that such
allocations are reasonable. Goodwill is being amortized on a straight-line basis
over the expected period to be benefited, generally fifteen to twenty-five
years. In accordance with Statement of Financial Accounting Standards ("SFAS")
No. 121, Accounting for The Impairment of Long-Lived Assets, the Company
evaluates its goodwill on an ongoing basis to determine potential impairment by
comparing the carrying value to the undiscounted estimated expected future cash
flows of the related assets. Other intangible assets are amortized using the
straight-line method over periods up to ten years.

INCOME TAXES -- The provision for income taxes is based on the Company's
proportionate share of the tax expense based on the effective tax rate for the
PCR consolidated group. The provision for income taxes would not have been
materially different had the provision for the Company been calculated on a
separate return basis.

Deferred tax assets and liabilities are recognized for the estimated future
tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
in effect for the year in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.

VENDOR INCENTIVE FUNDS -- Certain vendors provide incentive funds to perform
training and advertising activities. The Company recognizes these funds when it
has completed its obligation to perform under the specific incentive
arrangement. Incentive funds are recorded as reductions of selling, general and
administrative expenses.

F-8

POMEROY SELECT INTEGRATION SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED JANUARY 5, 1996, JANUARY 5, 1997, JANUARY 5,
1998 AND NINE MONTHS ENDED OCTOBER 5, 1998

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVENTORIES -- Inventories, which are specifically identifiable to the
business of the Company, are stated at the lower of cost or market. Cost is
determined by the average cost method.

EARNINGS PER COMMON SHARE -- There are no earnings per common share because
at October 5, 1998, the Company had no shares of common stock issued and
outstanding.

USE OF ESTIMATES IN FINANCIAL STATEMENTS -- In preparing financial
statements in conformity with generally accepted accounting principles,
management makes estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and liabilities at
the date of the financial statements, as well as the reported amounts of revenue
and expenses during the reporting period. Actual results could differ from those
estimates.

FAIR VALUE DISCLOSURES -- The fair value of financial instruments
approximates carrying value.

NEW PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
Reporting Comprehensive Income, with an effective date for fiscal years
beginning after December 15, 1997. SFAS No. 130 established standards for the
reporting of comprehensive income in a company's financial statements.
Comprehensive income includes all changes in a company's equity during the
period that result from transactions and other economic events other than
transactions with its stockholders.

In the fourth quarter of 1997, the Company elected to early adopt SFAS No.
130 retroactive to January 6, 1997. The adoption of SFAS No. 130 did not affect
the financial reporting in the accompanying financial statements because the
Company does not presently have any comprehensive income other than net income.

In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
Disclosures about Segments of an Enterprise and Related Information, with an
effective date for fiscal years beginning after December 15, 1997. A reportable
segment, referred to as an operating segment, is a component of an entity about
which separate financial information is produced internally, that is evaluated
by the chief operating decision-maker to assess performance and allocate
resources. The Company does not believe that it operates in more than one
identifiable segment.

In February 1998, the Accounting Standards Executive Committee issued SOP
98-1, Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use. SOP 98-1 established the accounting for costs of software
developed or purchased for internal use, including when such costs should be
capitalized. The Company does not expect SOP 98-1, which is effective for the
Company beginning January 6, 1999, to have a material effect on the Company's
financial condition or results of operations.

F-9

POMEROY SELECT INTEGRATION SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED JANUARY 5, 1996, JANUARY 5, 1997, JANUARY 5,
1998 AND NINE MONTHS ENDED OCTOBER 5, 1998

3. ACCOUNTS RECEIVABLE

The following table summarizes the activity in the allowance for doubtful
accounts for the years ended January 5, 1996, 1997 and 1998, and the nine months
ended October 5, 1998.

TRADE OTHER
----- ---------
(IN THOUSANDS)

Balance January 5, 1995....................................................... $ 9 $ 32
Provision 1995................................................................ 13 57
Accounts written-off.......................................................... (12) (62)
Recoveries.................................................................... 18 2
--- ---------
Balance January 5, 1996....................................................... 28 29
Provision 1996................................................................ 35 144
Accounts written-off.......................................................... (35) (85)
Recoveries.................................................................... 24 70
--- ---------
Balance January 5, 1997....................................................... 52 158
Provision 1997................................................................ 18 626
Accounts written-off.......................................................... (84) (496)
Recoveries.................................................................... 64 42
--- ---------
Balance January 5, 1998....................................................... 50 330
Provision 1998................................................................ - 402
Accounts written-off.......................................................... (42) (509)
Recoveries.................................................................... 51 24
--- ---------
Balance October 5, 1998....................................................... $ 59 $ 247
--- ---------
--- ---------

4. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and other intangible assets consist of the following as of the end
of the periods indicated net of accumulated amortization of $400,000 as of
January 5, 1997, $671,000 as of January 5, 1998 and $779,000 as of October 5,
1998, respectively (See Note 8):

AS OF AS OF
JANUARY 5, OCTOBER 5,
-------------------- -----------
1997 1998 1998
--------- --------- -----------
(IN THOUSANDS)

Goodwill....................................................... $ 2,838 $ 3,584 $ 6,676
Other.......................................................... 315 216 178
--------- --------- -----------
$ 3,153 $ 3,800 $ 6,854
--------- --------- -----------
--------- --------- -----------

F-10

POMEROY SELECT INTEGRATION SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED JANUARY 5, 1996, JANUARY 5, 1997, JANUARY 5,
1998 AND NINE MONTHS ENDED OCTOBER 5, 1998

5. BORROWING ARRANGEMENTS

For purposes of the financial statements presented herein, Bank note payable
represents the Company's allocated share of PCR's credit facility necessary to
fund the Company's operations and acquisitions. These amounts have been
classified as current based on the terms of PCR's credit facility. Amounts Due
to parent represent intercompany borrowings to fund additional working capital
needs.

Interest expense was calculated using the weighted average interest rate on
PCR's credit facility agreements for the current and prior years. These rates
were 8.7%, 8.2%, 7.3% and 7.5% for the years ended January 5, 1996, 1997 and
1998, and the nine months ended October 5, 1998, respectively. No interest
expense was charged to the Company on intercompany borrowings.

In July 1998, PCR finalized a $120 million credit facility with Deutsche
Financial Services Corporation. This credit facility provides a credit line of
$60 million for inventory financing and $60 million for accounts receivable
financing. The inventory financing portion of the credit facility utilizes
thirty day notes and provides interest free financing due to subsidies by
manufacturers. The credit facility can be amended, with proper notification, if
the thirty day interest free subsidies provided by manufacturers are revised.
The accounts receivable portion of the credit facility carries a variable
interest rate based on the prime rate less 125 basis points. The credit facility
is collateralized by substantially all of the assets of PCR, except those assets
that collateralize certain other financing arrangements.

Substantially all of the assets of the Company have been pledged as
collateral on PCR's credit facility. Prior to January 6, 1999, the Company
anticipates obtaining its own credit facility with Deutsche Financial Services
Corporation (see Note 14).

6. INCOME TAXES

The provision for income taxes consists of the following:

NINE MONTHS ENDED
YEARS ENDED JANUARY 5, OCTOBER 5,
------------------------------- ----------------------
1996 1997 1998 1998
--------- --------- --------- ---------
1997
-----------
(UNAUDITED)
(IN THOUSANDS)

Current:
Federal............................ $ 489 $ 974 $ 2,124 $ 1,502 $ 2,462
State.............................. 141 332 218 148 204
--------- --------- --------- ----------- ---------
Total current...................... 630 1,306 2,342 1,650 2,666
--------- --------- --------- ----------- ---------
Deferred:
Federal............................ 46 14 (138) (39) 32
State.............................. 14 3 (24) (8) 3
--------- --------- --------- ----------- ---------
Total deferred..................... 60 17 (162) (47) 35
--------- --------- --------- ----------- ---------
Total income tax provisions........ $ 690 $ 1,323 $ 2,180 $ 1,603 $ 2,701
--------- --------- --------- ----------- ---------
--------- --------- --------- ----------- ---------

F-11

POMEROY SELECT INTEGRATION SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED JANUARY 5, 1996, JANUARY 5, 1997, JANUARY 5,
1998 AND NINE MONTHS ENDED OCTOBER 5, 1998

6. INCOME TAXES (CONTINUED)
The approximate tax effect of the temporary differences giving rise to the
Company's deferred income tax assets (liabilities) are:

AS OF JANUARY 5,
-------------------- AS OF OCTOBER 5,
1997 1998 1998
--------- --------- -----------------
(IN THOUSANDS)

Deferred tax assets:
Bad debt provision....................................... $ 86 $ 140 $ 113
Depreciation............................................. - 73 28
Deferred compensation.................................... 50 123 160
--------- --------- -----
Total deferred tax assets.................................. 136 336 301
--------- --------- -----
Deferred tax liabilities:
Depreciation............................................. (35) - -
Accounts receivable...................................... - (73) (73)
--------- --------- -----
Total deferred tax liabilities............................. (35) (73) (73)
--------- --------- -----
Net deferred tax asset..................................... $ 101 $ 263 $ 228
--------- --------- -----
--------- --------- -----

The Company's effective income tax rate differs from the Federal statutory
rate as follows:

YEARS ENDED JANUARY 5,
------------------------------- NINE MONTHS ENDED
1996 1997 1998 OCTOBER 5, 1998
--------- --------- --------- ---------------------

Tax at Federal statutory rate................. 34.0% 34.0% 35.0% 35.0%
State taxes................................... 6.3 6.6 4.7 4.5
Kentucky relocation credits................... - - (2.2) (2.0)
Other......................................... 0.3 0.2 (0.7) (0.5)
--- --- --- ---
Effective tax rate............................ 40.6% 40.8% 36.8% 37.0%
--- --- --- ---
--- --- --- ---

7. EMPLOYEE BENEFIT PLANS

The Company will participate in PCR's existing employee benefit plans, which
among others, include a savings plan intended to qualify under sections 401(a)
and 401(k) of the Internal Revenue Code. The plan covers substantially all
employees of the Company. The Company did not contribute to the plan for the
years ended January 5, 1997 and 1998. Beginning January 6, 1998 the Company made
contributions to the plan based on a participant's annual pay. Contributions
made by the Company for the nine months ended October 5, 1998 were approximately
$44,000.

F-12

POMEROY SELECT INTEGRATION SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED JANUARY 5, 1996, JANUARY 5, 1997, JANUARY 5,
1998 AND NINE MONTHS ENDED OCTOBER 5, 1998

8. ACQUISITIONS

During the years ended January 5, 1997 and 1998, and the nine months ended
October 5, 1998, PCR completed several acquisitions. The goodwill allocated to
the Company related to these acquisitions was $2.8 million in 1996, $1.0 million
in 1997, and $3.4 million in 1998. The acquisitions were accounted for as
purchases, accordingly the purchase price was allocated to assets and
liabilities based on their estimated value as of the dates of acquisition. The
results of operations of the acquisitions are included in the statement of
income from the dates of acquisition.

In the year ended January 5, 1997, PCR acquired certain assets of The
Computer Supply Store, Inc. ("TCSS") a privately held computer reseller located
in Des Moines, Iowa, AA Microsystems, Inc. ("AA Micro"), a network service
provider located in Birmingham, Alabama, and Communications Technology, Inc.
("DILAN"), a privately held network integrator located in Hickory, North
Carolina . The Company recorded $1.7 million, $407,000 and $729,000 of goodwill
in connection with those acquisitions, respectively.

In the year ended January 5, 1998, PCR acquired certain assets of Magic Box,
Inc. ("Magic Box"), a privately held network integrator located in Miami,
Florida, and Micro Care, Inc. ("Micro Care"), a privately held systems
integrator located in Indianapolis, Indiana. A wholly owned subsidiary of PCR,
Pomeroy Computer Resources of South Carolina, Inc., acquired all the assets and
liabilities of The Computer Store Inc., a network integrator located in
Columbia, South Carolina. The Company recorded $420,000, $462,000 and $93,000 of
goodwill in connection with those acquisitions, respectively.

In the nine months ended October 5, 1998, PCR acquired certain assets of
Commercial Business Systems, a privately held systems integrator in Richmond,
Virginia and Global Combined Technologies, Inc., a privately held systems
integrator located in Oklahoma City, Oklahoma. The Company recorded $607,000 and
$2.8 million of goodwill in connection with those acquisitions, respectively.

The following table summarizes, on an unaudited pro forma basis, the
estimated combined results of the Company including the acquisitions assuming
the acquisitions had occurred at the beginning of the year of acquisition and
the preceding year. These results include certain adjustments, primarily
goodwill amortization and interest expense, and are not necessarily indicative
of what results would have been had the Company owned these businesses during
the periods presented:

YEARS ENDED JANUARY
5,
-------------------- NINE MONTHS ENDED
1997 1998 OCTOBER 5, 1998
--------- --------- ------------------
(IN THOUSANDS)

Revenue............................................. $ 35,016 $ 57,266 $ 52,011
Net income.......................................... $ 2,526 $ 3,922 $ 4,531

9. LEASE OBLIGATIONS

The Company has entered into a Space Sharing Agreement with PCR (see Note
14). Per the Agreement, the Company is permitted to lease space in PCR
facilities. The Company's right to lease space in PCR facilities shall terminate
upon 90 days written notice from either the Company or PCR, or upon termination
of the applicable PCR lease. Rent charged to the Company will be based on the
ratio of the Company's gross profit contribution to consolidated gross profit of
PCR. The Company's

F-13

POMEROY SELECT INTEGRATION SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED JANUARY 5, 1996, JANUARY 5, 1997, JANUARY 5,
1998 AND NINE MONTHS ENDED OCTOBER 5, 1998

9. LEASE OBLIGATIONS (CONTINUED)
expected future minimum lease payments for the year ending January 5, 2000,
under the Space Sharing Agreement, is approximately $810,000.

Rent expense for the years ended January 5, 1996, 1997, 1998 and for the
nine months ended October 5, 1998 was $237,000, $352,000, $587,000 and $634,000,
respectively.

10. SUPPLEMENTAL CASH FLOW DISCLOSURES

As a result of the Company participating in PCR's central cash management
system, the Company made no cash payments for interest and income taxes. The
Company's non-cash activities were as follows:

YEARS ENDED JANUARY NINE MONTHS ENDED
5, OCTOBER 5,
-------------------- ----------------------
1997 1998 1997 1998
--------- --------- ----------- ---------
(UNAUDITED)
(IN THOUSANDS)

Details of investing activities:
Allocation of goodwill................ $ 2,843 $ 975 $ 883 $ 3,421
--------- --------- ----------- ---------
--------- --------- ----------- ---------
Business acquisitions accounted for as
purchases:
Assets acquired....................... $ 6,509 $ 1,523 $ 1,301 $ 9,672
Liabilities assumed................... $ (2,752) $ (461) $ (203) $ (5,788)
Note payable.......................... $ (1,199) $ (309) $ (247) $ (620)
--------- --------- ----------- ---------
Due to parent......................... $ 2,558 $ 753 $ 851 $ 3,264
--------- --------- ----------- ---------
--------- --------- ----------- ---------

11. LITIGATION

The Company is not a party to any legal proceedings. PCR is a party to
various legal actions arising in the normal course of its business, some of
which may involve the business or operations of the Company but none of which,
in the opinion of management would have a material adverse effect on the
Company's financial position or results of operations.

12. DEPENDENCE ON VENDOR AUTHORIZATIONS

The Company is required to have authorizations from manufacturers in order
to service their products. The loss of a significant vendor's authorization
could have a material adverse effect on the Company's business.

13. PRO FORMA INFORMATION (UNAUDITED)

The pro forma amounts on the financial statements of the Company as of
October 5, 1998 represent the impact of the actual contribution of the assets
and liabilities to the Company by PCR expected to occur on January 6, 1999 as if
it had occurred on October 5, 1998. Only specifically identifiable assets and
liabilities will be contributed to the Company. The Company intends to obtain
its own credit

F-14

POMEROY SELECT INTEGRATION SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED JANUARY 5, 1996, JANUARY 5, 1997, JANUARY 5,
1998 AND NINE MONTHS ENDED OCTOBER 5, 1998

13. PRO FORMA INFORMATION (UNAUDITED) (CONTINUED)
facility with Deutsche Financial Services Corporation in the amount of the bank
note payable. PCR's existing credit facility will be reduced by the same amount.
The pro forma amounts also include the shares to be issued to PCR on January 6,
1999, as if the issuance of shares had occurred on October 5, 1998. (See Note
14)

14. SUBSEQUENT EVENTS

On January 6, 1999, the Company's Board of Directors authorized management
to file a registration statement with the Securities and Exchange Commission
(the "SEC") with respect to an initial public offering of the Company's Class A
Common Stock.

The Company entered into a number of agreements with PCR which became
effective on January 6, 1999. As a result of PCR's ownership interest in the
Company, the terms of such agreements were not, and the terms of any future
amendments to those agreements will not be, the result of arm's-length
negotiations.

ADMINISTRATIVE SERVICES AND MARKETING AGREEMENT. The Company and PCR have
entered into an Administrative Services and Marketing Agreement (the "Services
Agreement") pursuant to which PCR will continue to provide to the Company, at
the Company's request, certain administrative services, including the following:

- Payroll services, including the use of PCR's common paymaster;

- Insurance and risk management services, including insurance coverage and
administration of risk management;

- Tax services, including preparation and filing of all tax returns,
assistance with tax compliance and accounting for taxes, and supervision
of audits and other proceedings and litigation;

- MIS services, including operational and technical support for telephones
and voice mail;

- Legal services, including contract review, drafting and negotiation,
litigation coordination and SEC compliance;

- Marketing services, including preparation and production of promotional
materials; and

- Employee benefit plan design, qualification and administration.

F-15

POMEROY SELECT INTEGRATION SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED JANUARY 5, 1996, JANUARY 5, 1997, JANUARY 5,
1998 AND NINE MONTHS ENDED OCTOBER 5, 1998

14. SUBSEQUENT EVENTS (CONTINUED)
or 0.45% of the Company's annual revenue. This fee is to be paid to PCR by the
Company in monthly installments based on the Company's revenue for the previous
month.

In addition, the Services Agreement requires PCR to provide the Company with
the right of first refusal to evaluate and participate in service opportunities
which come to PCR's attention. The Company is required to provide a similar
right of first refusal regarding any sales opportunities for microcomputer
hardware and related products which come to the Company's attention. The Company
and PCR have agreed to allocate the consolidated sales commissions of PCR and
its subsidiaries, including the Company. The Company's portion of such sales
commission is based on the average of (i) the ratio of the Company's gross
profit contribution to the consolidated gross profit of PCR and its
subsidiaries, including the Company, and (ii) the ratio of the Company's net
revenue contribution to such consolidated net revenue. During the term of the
Services Agreement, and until the later of (i) one year after termination of the
Services Agreement or (ii) two years from the effective date of the Services
Agreement, PCR is restricted from engaging in activities which are competitive
with the services business transferred to the Company and the Company is
restricted from engaging in activities which are competitive with the
microcomputer hardware and related products business retained by PCR.

SPACE SHARING AGREEMENT. The Company, PCR and two other PCR Subsidiaries
have entered into a space sharing agreement (the "Space Sharing Agreement")
providing for the sharing by the Company and PCR of certain office facilities,
including the office facilities located in Hebron, Kentucky at which the
Company's and PCR's principal executive offices are located (the "Headquarters
Facility"). Under the Space Sharing Agreement, the costs associated with leasing
and maintaining facilities are, in general, allocated between the Company and
PCR on the basis of the ratio of the Company's gross profit contribution to the
consolidated gross profit of PCR and its subsidiaries including the Company. The
Company's rights to use portions of the shared facilities (including the
Headquarters Facility) leased from third parties, and the corresponding
obligations to pay for such use, may be terminated as to any such facility by
either the Company or PCR on 90 days prior written notice.

The Headquarters Facility is owned by Pomeroy Investments, LLC ("Pomeroy
Investments"), a Kentucky limited liability company controlled by David B.
Pomeroy, II (Chairman of the Board of the Company). The rental terms of the
Headquarters Facility between Pomeroy Investments and PCR were determined on the
basis of a fair market rental opinion given to PCR by an unrelated third party.

F-16

POMEROY SELECT INTEGRATION SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED JANUARY 5, 1996, JANUARY 5, 1997, JANUARY 5,
1998 AND NINE MONTHS ENDED OCTOBER 5, 1998

14. SUBSEQUENT EVENTS (CONTINUED)
TAX ALLOCATION AGREEMENT. The Company, PCR and three other PCR subsidiaries
have entered into a Tax Allocation Agreement to provide for (i) the allocation
of payments of taxes for periods during which the Company and PCR (or any of its
affiliates other than the Company) are included in the same consolidated group
for federal income tax purposes or the same consolidated, combined or unitary
returns for state, local or foreign tax purposes, (ii) the allocation of
responsibility for the filing of tax returns, (iii) the conduct of tax audits
and the handling of tax controversies, and (iv) various related matters. As a
result of the ownership of Class A Common Stock by investors in this offering,
upon the completion of this offering, the Company and PCR will not be able to be
included in the same consolidated group for federal income tax purposes.
Accordingly, the Company will be responsible for the filing of federal, state,
local and foreign tax returns and related liabilities for itself and its
subsidiaries for all periods, to the extent not included in PCR's combined or
consolidated tax returns. For any periods during which the Company is included
in PCR's consolidated federal income tax returns or any state consolidated,
combined or unitary tax returns, the Company will be required to pay to PCR its
allocable portion of the consolidated federal income and state tax liability,
and will be entitled to receive from PCR its allocable share of any tax benefit
attributable to the use of the Company's losses, if any. Notwithstanding the Tax
Allocation Agreement, under federal income tax law, each member of a
consolidated group for federal income tax purposes is also jointly and severally
liable for the federal income tax liability of each other member of the
consolidated group. Similar rules apply under some state income tax laws. In the
event that PCR or members of its consolidated tax group (other than the Company)
do not comply with the provisions of the Tax Allocation Agreement and the
Company is required to make payments in respect of the tax liabilities allocated
to PCR or other members of the group thereunder, such payments could adversely
affect the business, results of operations and financial condition of the
Company.

F-17

POMEROY SELECT INTEGRATION SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED JANUARY 5, 1996, JANUARY 5, 1997, JANUARY 5,
1998 AND NINE MONTHS ENDED OCTOBER 5, 1998

14. SUBSEQUENT EVENTS (CONTINUED)
CREDIT FACILITY. Effective January 6, 1999, the Company entered into an
agreement for an interim credit facility with Deutsche Financial Services
Corporation, the primary lender to PCR. The credit facility is terminable at
will by either party. This credit facility allows the Company to borrow up to
the lesser of $20 million or the maximum borrowing capacity as calculated under
the credit facility. PCR has agreed to reserve certain of its assets to serve as
collateral in order to maintain the Company's maximum borrowing capacity of $20
million. Absent such agreement, at January 6, 1999, the Company's maximum
borrowing capacity under the credit facility would have been $10.0 million. The
Company's outstanding balance under such credit facility as of January 6, 1999
was approximately $18.0 million. The Company's credit facility carries an
interest rate equal to the prime rate minus 1.25% per annum; provided, however,
that if at any time the aggregate monthly volume under the Distribution Finance
Facility between PCR and Deutsche Financial Services Corporation is less than
$20.0 million per month for a three-month consecutive period, then for the
following month and for every month thereafter until the month after such
aggregate volume again exceeds $20.0 million per month for a three-month
consecutive period, the interest rate shall equal the prime rate minus 0.50% per
annum. At January 6, 1997, the interest rate was 6.50% per annum. PCR has also
guaranteed the entire amount of the credit facility which is secured by all of
the assets of PCR. In addition, certain of the financial covenants are
determined on a consolidated basis. The Company intends to replace the interim
credit facility with a permanent credit facility after the consummation of this
offering. There can be no assurance that the Company will be able to obtain a
new credit facility or that any new credit facility will be available on terms
acceptable to the Company.

Prior to January 6, 1999, when the Company's business was still operated
within PCR, PCR's credit facility provided for the working capital needs related
to the Company's business. In connection with the Formation Transaction, a
portion of the outstanding indebtedness under the PCR credit facility was
assigned to the Company. The portion of such indebtedness assigned to the
Company represents the Company's allocated share of PCR's credit facility
necessary to fund the Company's operations. As a result of obtaining the interim
credit facility with Deutsche Financial Services Corporation, the Company's
assets no longer collateralize PCR's credit facility. However, substantially all
of the Company's assets now collateralize its interim credit facility with
Deutsche Financial Services Corporation.

COMMON STOCK. The Company has the authority to issue up to 30,000,000
shares of Class A Common Stock and 15,000,000 shares of Class B Common Stock.
The holders of Class A Common Stock and Class B Common Stock generally have
identical rights, except that holders of Class A Common Stock are entitled to
one vote per share while holders of Class B Common Stock are entitled to ten
votes per share on all matters to be voted on by stockholders.

PREFERRED STOCK. The Company has the authority to issue up to 5,000,000
shares of Preferred Stock in one or more series and to fix and determine the
relative rights, preferences and limitations of each class or series so
authorized without any further vote or action by the stockholders. The Board of
Directors may issue Preferred Stock with voting and conversion rights which
could adversely affect the

F-18

POMEROY SELECT INTEGRATION SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED JANUARY 5, 1996, JANUARY 5, 1997, JANUARY 5,
1998 AND NINE MONTHS ENDED OCTOBER 5, 1998

14. SUBSEQUENT EVENTS (CONTINUED)
voting power of the holders of the Company's Common Stock and have the effect of
delaying or preventing a change in the control of the Company. At January 6,
1999, no shares of Preferred Stock were outstanding and the Company has no
current intention to issue any shares of Preferred Stock.

ACQUISITION. In December 1998, PCR acquired certain assets of Access
Technologies, Inc. ("Access"), a Memphis, TN telecommunications and computer
networking provider. The total consideration paid consisted of $8.5 million in
cash, a subordinated note of $1.2 million and stock of $0.8 million. Interest on
the subordinated note is payable quarterly while principal is payable in two
equal annual installments. The acquisition will be accounted for as a purchase,
accordingly the purchase price will be allocated to assets and liabilities based
on their estimated values as of the date of acquisition.

The Company will include Access' results of operations for its IT services
business in the statement of income from the date of acquisition. If the
acquisition had occurred on October 5, 1998, the pro forma operations of the
Company would not have been materially different than that reported in the
accompanying statements of income. The Company has not determined the allocable
portion of goodwill from this acquisition.

STOCK PLAN. Effective January 6, 1999, the Company's Board of Directors
adopted the 1999 Stock Plan. The 1999 Stock Plan provides certain employees,
non-employee members of the Board and consultants of the Company with options to
purchase Class A Common Stock of the Company through options at an exercise
price equal to the following:

(i) In the case of an Incentive Stock Option

(a) granted to an employee who owns stock representing more than 10% of
the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the per share exercise price shall be no less than
110% of the fair market value per share on the date of the grant.

(b) granted to any employee, the per share price shall be no less than
the fair market value on the date of the grant.

(ii) In the case of a Non-Qualified Stock Option

(a) granted to a person who owns stock representing more than 10% of the
voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per share exercise price shall be no less than 100%
of the fair market value per share on the date of the grant.

(b) granted to any person, the per share price shall be no less than 85%
of the fair market price per share on the date of the grant.

3,000,000 shares of the Class A Common Stock of the Company will be reserved
for issuance under the plan. The plan will terminate ten years from the date of
adoption. Such options granted under the plan are exercisable in accordance with
various terms as authorized by the Board of Directors. To the extent not
exercised, options will expire not more than ten years after the date of grant.

F-19

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Pomeroy Select has not authorized any person to give you information that
differs from the information in this Prospectus. You should rely solely on the
information contained in this Prospectus. This Prospectus is not an offer to
sell these securities, and we are not soliciting offers to buy these securities
in any state where the offer or sale of these securities is not permitted. The
information in this Prospectus is accurate only as of the date of this
Prospectus, even if the Prospectus is delivered to you after the Prospectus
date, or you buy the Class A Common Stock after the Prospectus date.

------------------------

TABLE OF CONTENTS

------------------------

PAGE
----

Prospectus Summary........................................................ 3
Risk Factors.............................................................. 10
Use of Proceeds........................................................... 22
Dividend Policy........................................................... 22
Capitalization............................................................ 23
Dilution.................................................................. 24
Selected Historical Financial Data........................................ 25
Management's Discussion and Analysis of Financial Condition and Results of
Operations.............................................................. 26
Business.................................................................. 36
Management................................................................ 47
Relationship with PCR..................................................... 52
Principal Stockholders.................................................... 56
Description of Capital Stock.............................................. 58
Shares Eligible for Future Sale........................................... 62
Underwriting.............................................................. 64
Legal Matters............................................................. 65
Experts................................................................... 65
Available Information..................................................... 66
Index to Financial Statements............................................. F-1

------------------------

Until , 1999, all dealers that buy, sell or trade the Class A
Common Stock may be required to deliver a prospectus, regardless of whether they
are participating in the offering. This is in addition to the dealers'
obligations to deliver a prospectus when acting as underwriters and with respect
to their unsold allotments or subscriptions.

[LOGO]

CLASS A COMMON STOCK

------------------------

PROSPECTUS

------------------------

NATIONSBANC MONTGOMERY
SECURITIES LLC
J.C. BRADFORD & CO.
WHEAT FIRST UNION

, 1999

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

PART II

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable in connection with the sale and
distribution of the securities being registered. All amounts are estimated
except the Securities and Exchange Commission registration fee. All of the
expenses below will be paid by the Company.

ITEM AMOUNT
- ----------------------------------------------------------------------------------- ---------

Securities and Exchange Commission Registration fee................................ $ 15,985
NASD filing fee.................................................................... 6,250
Nasdaq National Market listing (entry) fee......................................... *
Blue Sky fees and expenses......................................................... 2,000
Printing and engraving expenses.................................................... *
Legal fees and expenses............................................................ *
Accounting fees and expenses....................................................... *
Transfer Agent and Registrar fees.................................................. *
Miscellaneous...................................................................... *
---------
Total.......................................................................... $ *
---------
---------

- ------------------------

* To be completed by amendment

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Subsection (a) of Section 145 of the Delaware General Corporation Law
empowers a corporation to indemnify any person who was or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.

Subsection (b) of Section 145 empowers a corporation to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to best interests of the corporation and except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all of the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.

II-1

Section 145 further provides that to the extent a director or officer of a
corporation has been successful in the defense of any action, suit or proceeding
referred to in subsection (a) and (b) or in the defense of any claim issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith; that the
indemnification provided by Section 145 shall not be deemed exclusive of any
other rights to which the indemnified party may be entitled; and that the scope
of indemnification is extended to directors, officers, employees or agents of a
constituent corporation absorbed in consolidation or merger and persons serving
in that capacity at the request of the constituent corporation for another.
Section 145 also empowers the corporation to purchase and maintain insurance on
behalf of a director or officer of the corporation against any liability
asserted against him or incurred by him in any such capacity or arising out of
his status as such whether or not the corporation would have the power to
indemnify him against such liabilities under Section 145.

Article Thirteenth of the Company's Certificate of Incorporation and Article
IX of the Company's Bylaws specify that the Company shall indemnify its
Directors, officers, employees and agents because he or she was or is a
Director, officer, employee or agent of the Company or was or is serving at the
request of the Company as a director, officer, employee or agent of another
entity to the full extent that such right of indemnity is permitted by the laws
of the State of Delaware. These provisions are deemed to be a contract between
the Company and each Director and officer who serves in such capacity at any
time while such provision and the relevant provisions of the Delaware General
Corporation Law are in effect, and any repeal or modification thereof shall not
offset any action, suit or proceeding theretofore or thereafter brought or
threatened based in whole or in part upon any such state of facts. The
affirmative vote of the holders of at least 66 2/3% of the voting power of all
outstanding shares of the capital stock of the Company is required to adopt,
amend or repeal such bylaws provisions.

The Company intends to enter into indemnification agreements with each of
its officers and Directors pursuant to which the Company will agree to indemnify
such parties to the full extent permitted by law, subject to certain exceptions,
if such party becomes subject to an action because such party is a Director or
officer of the Company.

Section 102(b)(7) of the Delaware General Corporation Law enables a
corporation in its certificate of incorporation to limit the personal liability
of members of its board of directors for violation of a director's fiduciary
duty of care. This Section does not, however, limit the liability of a director
for breaching his duty of loyalty, failing to act in good faith, engaging in
intentional misconduct or knowingly violating a law, or from any transaction in
which the director derived an improper personal benefit. This Section also will
have no effect on claims arising under the federal securities laws. The
Company's Certificate of Incorporation limits the liability of its directors as
authorized by Section 102(b)(7). The affirmative vote of the holders of at least
66 2/3% of the voting power of all outstanding shares of the capital stock of
the company is required to amend such provisions.

The Company is currently covered under a policy of liability insurance
obtained by PCR for the benefit of its Directors and officers that provides
coverage of losses of Directors and officers for liabilities arising out of
claims against such persons acting as Directors or officers of PCR or the
Company (or any of their subsidiaries) due to any breach of duty, neglect,
error, misstatement, misleading statement, omission or act done by such
Directors and officers, except as prohibited by law. The Company intends to
obtain its own directors and officers liability insurance policy.

At present, there is no pending litigation or proceeding involving a
Director or officer of the Company as to which indemnification is being sought
nor is the Company aware of any threatened litigation that may result in claims
for indemnification by any officer of Director. The form of Underwriting
Agreement filed as Exhibit 1 to this Registration Statement provides for
indemnification by the

II-2

Underwriters of the Company and its Directors and officers, and by the Company
of the Underwriters, for certain liabilities arising under the Securities Act,
as amended or otherwise.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

Prior to this offering, the Company issued the following unregistered
securities:

On January 6, 1999, the Company issued 10,000,000 shares of Class B Common
Stock to PCR in exchange for the assets, liabilities, business, operations and
personnel comprising the Company's business. In addition, effective January 6,
1999, the Company granted stock options to purchase an aggregate of 620,000
shares of Class A Common Stock to its Directors, officers and certain employees
under the 1999 Stock Plan.

The Company believes that the foregoing described issuances of securities,
if they constitute sales, are exempt from registration under the Securities Act
by virtue of exemption provided by Section 4(2) thereof for transactions, not
involving a public offering or Rule 701 under the Securities Act as transactions
made pursuant to a written compensatory plan or pursuant to a written contract
relating to compensation. The sales of securities were made without the use of
an underwriter and the certificates evidencing the shares bear a restrictive
legend permitting the transfer thereof only upon registration of the shares or
an exemption under the Securities Act. All recipients had adequate access to
information about the Company.

II-3

ITEM 16. EXHIBITS AND FINANCIAL STATEMENTS

(a) Exhibits

EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- --------- ----------------------------------------------------------------------------------------------------

1 Form of Underwriting Agreement.

3.1 Certificate of Incorporation of the Company, as amended.

3.2 Bylaws of the Company.

* 5 Form of Opinion of Cors & Bassett.

+10.1 Contribution Agreement by and among PCR, Global Combined Technologies, Inc., Pomeroy Computer
Resources of South Carolina, Inc. and the Company dated as of January 6, 1999.

* 10.2 Administrative Services and Marketing Agreement by and between PCR and the Company dated as of
January 6, 1999.

10.3 Space Sharing Agreement by and among PCR, Global Combined Technologies, Inc., Pomeroy Computer
Resources of South Carolina, Inc. and the Company dated as of January 6, 1999.

10.4 Stock Registration Agreement by and between PCR and the Company dated as of January 6, 1999.

* 10.5 Indemnification Agreement by and between PCR and the Company dated as of January 6, 1999.

10.6 Form of Indemnification Agreement by and between the Company and each of its Directors and executive
officers.

* 10.7 Employment Agreement by and between the Company and Stephen E. Pomeroy dated as of January 6, 1999.

* 10.8 Employment Agreement by and between the Company and Larry H. Lokey dated as of January 6, 1999.

* 10.9 Employment Agreement by and between the Company and Mark P. Schwarz dated as of January 6, 1999.

10.10 1999 Stock Plan.

+10.11 Business Credit and Security Agreement between the Company and Deutsche Financial Services
Corporation dated as of January 6, 1999.

23.1 Consent of Grant Thornton LLP.

* 23.2 Consent of Cors & Bassett (contained in the opinion filed as Exhibit 5 to the Registration
Statement).

24 Powers of Attorney of certain officers and Directors of the Company (contained on the signature page
of this Registration Statement).

27 Financial Data Schedule.

- ------------------------

* To be filed by amendment. All other exhibits are filed herewith.

+ The schedules or exhibits to this document are not being filed herewith
because the Company believes that the information contained therein should
not be considered material to an investment decision in the Company or such
information is otherwise adequately disclosed in this Registration

II-4

Statement on Form S-1. The Company agrees to furnish supplementally a copy
of any schedule or exhibit to the Commission upon request.

(b) Financial Statement Schedules

None.

ITEM 17. UNDERTAKINGS

The Company hereby undertakes that:

(1) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted as to Directors, officers and controlling persons of the
Company pursuant to the provisions described in Item 14, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a Director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding) is asserted
by such Director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

(2) For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus as filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Company pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

(3) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

(4) At the closing, specified in the Underwriting agreement, Company shall
provide the Underwriters certificates in such denominations and registered in
such names as required by the Underwriters to permit prompt delivery to each
purchaser.

II-5

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Company has duly caused this Registration Statement on Form S-1 to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Hebron,
State of Kentucky, on the 14th day of January, 1999.

POMEROY SELECT INTEGRATION SOLUTIONS, INC.

By: /s/ STEPHEN E. POMEROY
-----------------------------------------
Stephen E. Pomeroy,
PRESIDENT AND CHIEF EXECUTIVE OFFICER

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature
appears below hereby constitutes and appoints Stephen E. Pomeroy and Mark P.
Schwarz, and each of them, their true and lawful attorneys-in-fact and agents,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement
and a related registration statement that is to be effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and in
each case, to file the same with all exhibits thereto, and all documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------

/s/ DAVID B. POMEROY, II
- ------------------------------ Chairman of the Board of January 14, 1999
David B. Pomeroy, II Directors

President, Chief Executive
/s/ STEPHEN E. POMEROY Officer and Director
- ------------------------------ (Principal Executive January 14, 1999
Stephen E. Pomeroy Officer)

Chief Financial Officer,
/s/ MARK P. SCHWARZ Secretary and Treasurer
- ------------------------------ (Principal Financial and January 14, 1999
Mark P. Schwarz Accounting Officer)

/s/ KENNETH R. WATERS
- ------------------------------ Director January 14, 1999
Kenneth R. Waters

/s/ GERALD L. VON DEYLEN
- ------------------------------ Director January 14, 1999
Gerald L. Von Deylen

II-6