SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): November 1, 1997
IMTEK OFFICE SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-24464-NY 11-2958856
(State or other jurisdiction (Commission(IRS Employer
of incorporation)File Number) Identification No.)
8003 CORPORATE DRIVE, SUITE C, BALTIMORE, MARYLAND 21236
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (410) 931-2054
Not applicable
(Former name or former address, if changed since last report.)
Item 2. Acquisition or Disposition of Assets.
In November 1997, the Registrant, through its wholly-owned subsidiary, Imtek
Corporation, purchased assets consisting of inventory from Office Supply
Line, Inc., a Virginia corporation ("OSL"), pursuant to an Inventory Purchase
and Sale Agreement entered into as of November 1, 1997 between OSL, Imtek
Corporation and Michael L. Lowe (the "OSL Inventory Purchase Agreement").
Also in November 1997, the Registrant issued approximately 465,500 shares of
its common stock in exchange for all the issued and outstanding shares of
common stock of Office Supply Line Holdings, Inc. ("Holdings"). Holdings'
only material asset was the issued and outstanding capital stock of OSL.
Prior to November 1, 1997, OSL was engaged in the business of retail office
supply sales. Pursuant to the OSL Inventory Purchase Agreement, the
Registrant assumed $70,000 in trade accounts payable, issued a note payable
in the amount of $92,000 and paid $75,000 in cash to OSL in exchange for the
purchased inventory. The $92,000 note payable included interest
at 10% per annum and was scheduled to mature in August 1998. This note was
paid in full in September, 1998. The number of shares of the Registrant's
common stock issued to the former stockholders of Holdings pursuant to the
Holdings Exchange Agreement and the consideration paid to OSL by the
Registrant under the OSL Inventory Purchase Agreement represented a
negotiated price.
The assets acquired were used by OSL in its business and continue to be used
after the acquisition by the Registrant in connection with the Registrant's
business of selling, leasing and servicing of photocopy equipment,
typewriters, facsimile machines and other automated office equipment. Michael
L. Lowe, President, Director and majority stockholder of Holdings and OSL,
became a Director, the Vice President and Chief Operating Officer of the
Registrant on November 18, 1997. The funds used by the Registrant to acquire
all of the issued and outstanding stock of Holdings and the inventory and
equipment acquired pursuant to the OSL Inventory Purchase Agreement were
funds from earnings of the Registrant.
2
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Audited Financial Statements of Business Acquired
Report of Independent Certified Public Accountants
Balance Sheets
Statement of Operations
Statement of Stockholders (Deficit) Equity
Statement of Cash Flows
Notes to Audited Financial Statements
3
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Office Supply Line, Inc.
We have audited the accompanying balance sheet of Office Supply Line, Inc. as of
April 30, 1997 and the related statements of earnings, stockholders' (deficit)
equity and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Office Supply Line, Inc. as of
April 30, 1997, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
/s/ Grant Thornton LLP
- ----------------------
Grant Thornton LLP
BALTIMORE, MARYLAND
DECEMBER 16, 1998
4
OFFICE SUPPLY LINE, INC.
BALANCE SHEETS
APRIL 30, 1997 AND OCTOBER 31, 1997
- -------------------------------------------------------------------------------------------------
October 31, 1997
April 30, 1997 (unaudited)
-------------- ----------------
ASSETS
CURRENT ASSETS
Cash $ 3,209 $ 200
Accounts receivable - trade 49,233 53,071
Inventory 123,775 143,633
Prepaid expenses 650 -
-------- --------
Total current assets 176,867 196,904
PROPERTY AND EQUIPMENT
Furniture and fixtures 8,387 8,387
Equipment 12,126 2,126
Vehicles 19,000 19,000
-------- --------
39,513 29,513
Less accumulated depreciation (13,814) (14,387)
-------- --------
25,699 15,126
-------- --------
$202,566 $212,030
-------- --------
-------- --------
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES
Line-of-credit $ 47,000 $ 50,000
Current portion of notes payable 20,324 30,004
Note payable - related party 9,100 9,100
Accounts payable 51,213 46,208
Accrued expenses 8,640 2,934
Income taxes currently payable - 3,962
-------- --------
Total current liabilities 136,277 142,208
NOTES PAYABLE, net of current maturities 77,803 59,054
ACCRUED RENT 10,000 10,000
STOCKHOLDERS' (DEFICIT) EQUITY
Common stock, $1 par value; 5,000 shares
authorized; 100 issued and outstanding 100 100
(Accumulated deficit) retained earnings (21,614) 668
-------- --------
(21,514) 768
-------- --------
$202,566 $212,030
-------- --------
-------- --------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
5
OFFICE SUPPLY LINE, INC.
STATEMENTS OF EARNINGS
YEAR ENDED APRIL 30, 1997 AND SIX MONTH PERIOD ENDED OCTOBER 31, 1997
- ---------------------------------------------------------------------------------------------
October 31, 1997
April 30, 1997 (unaudited)
-------------- ----------------
REVENUE
Equipment and supplies $819,600 $182,257
COST OF REVENUE
Equipment and supplies 523,214 108,354
------- -------
Gross profit 296,386 73,903
OPERATING EXPENSES
Salaries and wages 131,265 29,571
Selling and general 163,092 54,248
------- -------
294,357 83,819
------- -------
Operating income (loss) 2,029 (9,916)
OTHER (EXPENSE) INCOME (12,367) 36,160
------- -------
Operating (loss) income before income
taxes and extraordinary item (10,338) 26,244
INCOME TAXES - 3,962
------- -------
Operating (loss) income before
extraordinary item (10,338) 22,282
EXTRAORDINARY ITEM - FORGIVENESS OF DEBT 12,123 -
------- -------
NET INCOME $ 1,785 $ 22,282
------- -------
------- -------
EARNINGS PER SHARE
Basic $17.85 $222.82
------- -------
------- -------
Diluted $17.85 $222.82
------- -------
------- -------
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 100 100
------- -------
------- -------
Diluted 100 100
------- -------
------- -------
6
OFFICE SUPPLY LINE, INC.
STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY
YEAR ENDED APRIL 30, 1997 AND SIX MONTH PERIOD ENDED OCTOBER 31, 1997
- -------------------------------------------------------------------------------------------------------------------
(Accumulated
Common Stock deficit)
----------------- retained Stockholders'
Shares Amount earnings (deficit) equity
------ ------ ------------ ----------------
BALANCE AT MAY 1, 1996 100 $100 $(23,399) $(23,299)
Net income for the year - - 1,785 1,785
--- ---- -------- --------
BALANCE AT APRIL 30, 1997 100 100 (21,614) (21,514)
Net income for the period (unaudited) - - 22,282 22,282
--- ---- -------- --------
BALANCE AT OCTOBER 31, 1997 (UNAUDITED) 100 $100 $ 668 $ 768
--- ---- -------- --------
--- ---- -------- --------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
7
OFFICE SUPPLY LINE, INC.
STATEMENTS OF CASH FLOWS
YEAR ENDED APRIL 30, 1997 AND SIX MONTH PERIOD ENDED OCTOBER 31, 1997
- -------------------------------------------------------------------------------------------------------------------
October 31, 1997
Increase (Decrease) in Cash April 30, 1997 (unaudited)
-------------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,785 $ 22,282
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 7,904 6,733
Gain on forgiveness of debt (12,123) -
Gain on sale of fixed assets - (36,160)
Accrued rent 1,500 -
Changes in assets and liabilities
Accounts receivable 15,303 (3,838)
Inventory 8,879 (19,858)
Prepaid expenses (650) 650
Accounts payable and accrued expenses (22,766) (10,711)
Income taxes payable - 3,962
--------- ---------
Net cash used in operating activities (168) (36,940)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of fixed assets - 40,000
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable 45,000 -
Proceeds from note payable - related party 9,100 -
Payments on notes payable (63,206) (9,069)
Proceeds from line-of-credit, net 5,000 3,000
--------- ---------
Net cash used in financing activities (4,106) (6,069)
--------- ---------
NET DECREASE IN CASH (4,274) (3,009)
CASH AT BEGINNING OF PERIOD 7,483 3,209
--------- ---------
CASH AT END OF PERIOD $ 3,209 $ 200
--------- ---------
--------- ---------
DISCLOSURE OF CASH FLOW SUPPLEMENTAL INFORMATION:
Cash paid during the year for interest $ 13,123 $ 5,468
8
NOTE A - SUMMARY OF ACCOUNTING POLICIES
A summary of significant accounting policies applied in the preparation of
the accompanying financial statements follows.
DESCRIPTION OF BUSINESS
Office Supply Line, Inc. (the Company), a Virginia corporation, began
operations on June 25, 1995.
The Company is in the business of selling and servicing copiers, facsimile
machines and printers, sales of office supplies, and commercial printing and
copying. The Company conducts business in the Richmond, Virginia
metropolitan area and grants credit to customers in that region.
REVENUE RECOGNITION
The Company recognizes revenue on equipment sales and supplies upon shipment
of the sale. Revenue for servicing of the equipment is recognized at the
time the service is performed.
INVENTORY
Inventories consist of copy machines, facsimile machines, duplicators, and
parts and supplies used in the maintenance of office machines and consumable
supplies. Inventories are stated at lower of cost or market using the
first-in, first-out (FIFO) method.
PROPERTY AND EQUIPMENT
The Company provides depreciation and amortization for financial statement
purposes over the estimated useful lives of the fixed assets, generally 5
years, using the straight-line method. Expenditures for maintenance and
repairs are charged to expense in the period the charges are incurred.
Property and equipment is periodically reviewed to determine recoverability
by comparing the carrying value to expected future cash flows.
USE OF ESTIMATES
In preparing financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the
financial statements and revenue and expenses during the reporting period.
Actual results could differ from those estimates.
FINANCIAL INSTRUMENTS
The Company's financial instruments include cash, accounts receivable,
accounts payable, and notes payable. The carrying amount of these financial
instruments approximates their fair market value.
9
NOTE A - SUMMARY OF ACCOUNTING POLICIES - CONTINUED
INCOME TAXES
Income taxes are provided based on the liability method for financial
reporting purposes. Deferred and prepaid taxes are provided for on temporary
differences in the basis of assets and liabilities which are recognized in
different periods for financial and tax reporting purposes.
EARNINGS PER SHARE
Basic earnings per share amounts have been computed based on the weighted
average number of common shares outstanding. Diluted earnings per share
amounts reflect the increase in weighted average number of common shares
outstanding that would result from the assumed conversion of dilutive
securities. For the year ended April 30, 1997 and the six months ended
October 31, 1997 (unaudited), the Company did not have any dilutive
securities outstanding.
NOTE B - INVENTORY
Inventory consists of the following as of April 30, 1997 and October 31, 1997:
October 31, 1997
April 30, 1997 (unaudited)
-------------- ----------------
Office equipment $ 44,052 $ 57,453
Office supplies 79,723 86,180
-------- --------
$123,775 $143,633
-------- --------
-------- --------
NOTE C - NOTES PAYABLE
Notes payable are as follows:
October 31, 1997
April 30, 1997 (unaudited)
-------------- ----------------
8.75% note payable secured by a first lien on all assets of the
Company; payable in 60 monthly installments of $1,344 to
Crestar Bank, beginning August 1, 1995. $45,500 $39,314
10
NOTE C - NOTES PAYABLE - CONTINUED
October 31, 1997
April 30, 1997 (unaudited)
-------------- ----------------
8.56% note payable secured by a subordinated lien on all
assets of the Company; payable in 60 monthly installments of
$922 to Crestar Bank, beginning March 15, 1997 43,803 40,920
8.00% unsecured note payable to Office Supply, Inc., an
unrelated party, guaranteed by the stockholders of the
Company; payable in 84 monthly installments of $1,169,
beginning January 1, 1996. An addendum dated February 20, 1997
changed the terms as follows: (1) $12,123 was forgiven
(recorded as an extraordinary item); (2) A $45,000 payment was
made February 26, 1997. Final payment of $8,824 was made May
1, 1998. 8,824 8,824
------- -------
Total debt $98,127 $89,058
------- -------
------- -------
Scheduled maturities of notes payable for the next five years follow:
Year Amount
---- ------
1998 $20,324
1999 30,946
2000 24,120
2001 13,844
2002 8,893
NOTE D - NOTE PAYABLE - RELATED PARTY
The Company has a $9,100 unsecured note payable to a stockholder. The note,
dated December 31, 1996 has no specified repayment terms.
NOTE E - COMMITMENTS AND CONTINGENCIES
OPERATING LEASES
The Company conducts its operations in a leased facility. This lease expires
in January 1999 and requires monthly payments ranging from $2,500 to $3,000.
The Company has arranged to lease new space in 1999.
11
NOTE E - COMMITMENTS AND CONTINGENCIES - CONTINUED
OPERATING LEASES - CONTINUED
The Company also leased a vehicle under an operating lease with a term which
expired in June 1997.
The following is a schedule by year of base rentals due on operating leases
that have initial or remaining lease terms in excess of one year as of April
30, 1997.
Year Amount
---- ------
1998 $35,416
1999 27,000
Total rent expense for year ended April 30, 1997 and six months ended
October 31, 1997 (unaudited) was $41,100 and $18,000, respectively.
NOTE F - LINE-OF-CREDIT
The Company had a $50,000 cash line-of-credit issued by Crestar Bank bearing
interest at 9.25% which expired March 1, 1998 and was paid at maturity.
Borrowings on the line amount to $47,000 at April 30, 1997. The line is
collateralized by a security interest in all assets of the Company.
NOTE G - INCOME TAXES
The Company recognizes deferred tax liabilities and assets for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Under this method, deferred tax liabilities and
assets are determined based on the difference between the financial
statement and tax basis of assets and liabilities using enacted tax rates in
effect for the year in which the differences are expected to reverse.
The Company utilized net operating loss carryforwards to offset any income
tax liability for the year ended April 30, 1997, including income from
extraordinary item. The Company had income taxes payable of $3,962 for the
six months period ended October 31, 1997 (unaudited).
12
NOTE G - INCOME TAXES - CONTINUED
Deferred taxes are comprised as follows:
October 31, 1997
April 30, 1997 (unaudited)
-------------- ----------------
Current deferred tax assets
Operating loss carryforward $ 5,364 $ -
Accrued rent 3,862 3,862
------- -------
9,266 3,862
Non-current deferred tax liability
Depreciation and amortization (2,600) (3,516)
------- -------
Net deferred tax asset before valuation allowance $ 6,626 $ 346
------- -------
------- -------
Valuation allowance (6,626) (346)
------- -------
Net deferred tax asset $ - $ -
------- -------
------- -------
The Company's provision for income taxes differs from the anticipated United
States statutory rate. Differences between the statutory rate and the
Company's provisions are as follows:
October 31, 1997
April 30, 1997 (unaudited)
-------------- ----------------
Taxes at statutory rate 34% 34%
Benefit of net operating loss carryforward (10) (18)
Valuation allowance (62) (3)
Nondeductible meals and entertainment 38 2
--- ---
- % 15%
--- ---
--- ---
NOTE H - SUBSEQUENT EVENT
On November 1, 1997, all of the common stock of the Company was sold to Imtek
Office Solutions, Inc. (Imtek) in exchange for 465,000 shares of Imtek's
common stock valued at $65,170 and cash of $217,161.
13
(b) Proforma Financial Information.
Introduction to Proforma Financial Statements
Proforma Unaudited Condensed Balance Sheet
Proforma Unaudited Statement of Earnings
Notes to Proforma Financial Statements
14
IMTEK OFFICE SOLUTIONS, INC.
PRO FORMA UNAUDITED CONDENSED FINANCIAL STATEMENTS
The following pro forma unaudited condensed balance sheet and statement of
earnings have been prepared by taking the balance sheet as of September 30, 1997
and statement of earnings for the year ended September 30, 1997 of Imtek Office
Solutions, Inc. (the "Company") and giving effect to the acquisitions of
Beneficial Assistance, Inc. ("Beneficial"), which was acquired on October 1,
1997, and Office Supply Line, Inc. ("OSL") by the Company as if they had
occurred as of October 1, 1996. The revenues and results of operations
included in the following pro forma unaudited condensed statement of earnings
are not considered necessarily to be indicative of anticipated results of
operations for periods subsequent to the transactions, nor are they
considered necessarily to be indicative of the results of operations for the
periods specified had the transactions actually been completed as of October
1, 1996.
These financial statements should be read in conjunction with the notes to the
pro forma unaudited condensed balance sheet and statements of earnings, which
follow.
15
IMEX OFFICE SOLUTIONS, INC. AND SUBSIDIARIES
UNAUDITED PROFORMA COSNOLIDATED BALANCE SHEET
SEPTEMBER 30, 1997
PRO FORMA
COMPANY BENEFICIAL PRO FORMA INCLUDING OSL
HISTORICAL HISTORICAL ADJUSTMENTS BENEFICIAL HISTORICAL
----------- ----------- ----------- ----------- ---------
ASSETS
Current Assets
Cash $ 29,118 $ 58,082 $ -- $ 87,200 $ 200
Escrow deposits -- 1,279,929 1,279,929
Accounts receivable 393,062 393,062 53,071
Inventory 485,661 485,661 143,633
Notes recievable--related parties 20,466 20,466
Notes receivable--other 5,075 5,075
Deposit on equipment 40,000 40,000
Prepaid Expenses and other current assets -- 109,000 109,000
----------- ----------- ----------- ----------- ---------
Total current assets 973,382 1,447,011 -- 2,420,393 196,904
PROPERTY AND EQUIPMENT-LESS ACCUMULATED DEPRECIATION AND
AMORTIZATION 33,957 10,326 44,283 15,126
OTHER INTANGIBLE ASSETS 1,190,606 (c) 1,190,606
(d)
----------- ----------- ----------- ----------- ---------
TOTAL ASSETS $ 1,007,339 $ 1,457,337 $1,190,606 $ 3,655,282 $ 212,030
----------- ----------- ----------- ----------- ---------
----------- ----------- ----------- ----------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Current maturities of notes payable $ -- $ 16,390 $ -- $ 16,390 $ 80,004
Accounts payable--trade 81,825 17,888 99,713 46,208
Accounts payable--related party 73,063 46,600 119,663
Accrued expenses 35,411 7,089 42,500 12,934
Customer escrow accounts -- 1,279,929 1,279,929
Income taxes payable 20,600 -- 20,600 3,962
Notes payable--related party 22,388 -- 22,368 9,100
----------- ----------- ----------- ----------- ---------
Total current liabilities 233,267 1,367,896 -- 1,601,163 152,208
NOTES PAYABLE -- 56,610 56,610 59,054
COMMITMENTS AND CONTINGECIES -- --
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock 5 -- 5 100
Additional paid in capital 715,700 3,000 1,253,269 (c) 1,971,969
--
Retained earnings 58,367 29,831 (62,663)(d) 25,535 668
----------- ----------- ----------- ----------- ---------
Total stockholders'equity 774,072 32,831 1,190,606 1,997,509 768
----------- ----------- ----------- ----------- ---------
TOTAL LIABILITIES AND STOCKHODLERS' EQUITY $ 1,007,339 $ 1,457,337 $1,190,606 $ 3,655,282 $ 212,030
----------- ----------- ----------- ----------- ---------
----------- ----------- ----------- ----------- ---------
PRO FORMA
INCLUDING
PRO FORMA BENEFICIAL
ADJUSTMENTS AND OSL
----------- -------------
ASSETS
Current Assets
Cash $ 87,400
Escrow deposits 1,279,929
Accounts receivable 446,133
Inventory 629,294
Notes recievable--related parties 20,466
Notes receivable--other 5,075
Deposit on equipment 40,000
Prepaid Expenses and other current assets 109,000
----------- -------------
Total current assets -- 2,617,297
PROPERTY AND EQUIPMENT-LESS ACCUMULATED DEPRECIATION AND
AMORTIZATION 59,401
OTHER INTANGIBLE ASSETS 1,314,096
123,490 (b)
----------- -------------
TOTAL ASSETS $ 123,490 $ 3,990,802
----------- -------------
----------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Current maturities of notes payable $ 96,394
Accounts payable--trade 145,921
Accounts payable--related party 119,663
Accrued expenses 55,434
Customer escrow accounts 1,279,929
Income taxes payable 24,562
Notes payable--related party 31,468
----------- -------------
TOTAL CURRENT LIABILITIES -- 1,753,371
NOTES PAYABLE 115,664
COMMITMENTS AND CONTINGECIES
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock 105
Additional paid in capital 132,311(a) 2,104,280
--
Retained earnings (8,821)(b) 17,382
----------- -------------
Total stockholders'equity 123,490 2,121,767
----------- -------------
TOTAL LIABILITIES AND STOCKHODLERS' EQUITY $ 123,490 $ 3,990,802
----------- -------------
----------- -------------
16
IMTEK OFFICE SOLUTIONS, INC. AND SUBSIDIARIES
PROFORMA STATEMENT OF EARNINGS
(Unaudited)
Pro Forma
Pro Forma Including
Company Beneficial Pro Forma Including OSL Pro Forma Beneficial
Historical Historical Adjustments Beneficial Historical Adjustments and OSL
---------- ---------- ----------- ---------- ---------- ----------- ----------
Revenue
Equipment and supplies...... $2,094,972 $ -- $2,094,972 $629,980 $2,724,952
Merchant banking............ -- 5,423,585 5,423,585 5,423,585
---------- ---------- --------- ---------- -------- -------- ----------
2,094,972 5,423,585 -- 7,518,557 629,680 -- 8,148,537
Cost of revenue
Equipment related costs..... 1,868,703 -- 1,868,703 395,503 2,264,206
Merchant banking............ -- 4,885,776 4,885,776 -- 4,885,776
---------- ---------- --------- ---------- -------- -------- ----------
Total cost of loss and
sales................... 1,868,703 4,885,776 -- 6,754,479 395,503 -- 7,149,982
---------- ---------- --------- ---------- -------- -------- ----------
Gross profit.............. 226,269 537,809 -- 764,078 234,477 -- 998,555
Selling and General Expense... 153,836 502,950 719,449 241,557 8,821 (b) 969,826
62,663
---------- ---------- --------- ---------- -------- -------- ----------
Operating Income (loss)... 72,433 34,859 (62,663) 44,629 (7,080) (8,821) 28,729
Interest expense (income)..... (6,534) 5,028 (1,506) (28,946) (30,452)
---------- ---------- --------- ---------- -------- -------- ----------
Operating income before
income taxes and
extraordinary item........ 78,967 29,831 (62,663) 46,135 21,866 (8,821) 59,181
Provision for income taxes.... 20,600 9,660 30,260 3,302 -- 33,562
---------- ---------- --------- ---------- -------- -------- ----------
Operating income before
extraordinary items....... 58,367 20,171 (62,663) 15,875 18,565 (8,821) 25,619
Extraordinary item - forgiveness
of debt....................... -- -- -- -- 12,123 -- 12,123
---------- ---------- --------- ---------- -------- -------- ----------
Net Income (loss)......... $ 58,367 $ 20,171 $ (62,663) $ 15,875 $ 30,688 $ (8,821) $ 37,742
---------- ---------- --------- ---------- -------- -------- ----------
---------- ---------- --------- ---------- -------- -------- ----------
Earnings (loss) per share:
Basic....................... 0.03 0.00 0.01
Diluted..................... 0.03 0.00 0.01
WEIGHTED AVERAGE SHARES
OUTSTANDING
Basic....................... 2,253,425 1,000,000 3,253,426 465,000 3,718,425
Diluted..................... 2,253,425 1,000,000 3,253,426 465,000 3,718,425
17
NOTES TO PRO FORMA BALANCE SHEET AND STATEMENT OF EARNINGS
(a) To record the goodwill associated with the OSL transaction.
(b) To amortize the goodwill associated with the OSL transaction based upon a
fifteen-year life.
(c) To record the goodwill associated with the Beneficial transaction.
(d) To amortize tghe goodwill associated with the Beneficial transaction
based upon a fifteen year life.
18
(c) Exhibits.
Exhibit Index and Description:
Number Description
------ -----------
27 Financial Data Schedule
99 Additional Exhibits
99.1 Holdings Exchange Agreement dated as of November 1,
1997 between the Registrant, Office Supply Line
Holdings, Inc., Michael L. Lowe and certain other
shareholders of Office Supply Line Holdings, Inc.,
fully set forth as Exhibit 2.4 of the Annual Report
of Registrant filed on Form 10-K on October 13, 1998,
and incorporated herein by reference.
99.2 OSL Inventory Purchase Agreement dated as of November
1, 1997 between the Registrant, Office Supply Line,
Inc., and Michael L. Lowe, fully set forth as Exhibit
2.5 of the Annual Report of Registrant filed on Form
10-K on October 13, 1998, and incorporated herein by
reference. .
19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
IMTEK OFFICE SOLUTIONS, INC.
(Registrant)
Date: June 15, 1999 BY: /s/ Edwin C. Hirsch
--------------------------------------
Edwin C. Hirsch, President
20