-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AxTL3+Zk9EB6mU87DtUPE3ehcQbuGyhYJFY4Us4xt/y9lgFNaraaYWtFdwzoLzW0 VYuG+T7gA0WViTO47BY8Gg== 0000931763-99-000076.txt : 19990114 0000931763-99-000076.hdr.sgml : 19990114 ACCESSION NUMBER: 0000931763-99-000076 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19981030 ITEM INFORMATION: FILED AS OF DATE: 19990113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERCEPT GROUP INC CENTRAL INDEX KEY: 0001054930 STANDARD INDUSTRIAL CLASSIFICATION: FUNCTIONS RELATED TO DEPOSITORY BANKING, NEC [6099] IRS NUMBER: 582237359 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-14213 FILM NUMBER: 99505534 BUSINESS ADDRESS: STREET 1: 3150 HOLCOMB BRIDGE ROAD SUITE 200 CITY: NORTCROSS STATE: GA ZIP: 30071 BUSINESS PHONE: 7702489600 MAIL ADDRESS: STREET 1: 3150 HOLCOMB BRIDGE ROAD SUITE 200 CITY: NORTCROSS STATE: GA ZIP: 30071 8-K/A 1 THE INTERCEPT GROUP AMENDMENT NO. 1 TO FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM 8-K/A AMENDMENT NO. 1 CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): October 30, 1998 ---------------- THE INTERCEPT GROUP, INC. ------------------------- (Exact Name of Registrant as Specified in its Charter) Georgia 01-14213 58-2237359 - ----------------- ----------- ------------------ (State or Other (Commission (I.R.S. Employer Jurisdiction of File Number) Identification No.) Incorporation) 3150 Holcomb Bridge Road, Suite 200, Norcross, Georgia 30071 - ------------------------------------------------------ ------ (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (770) 248-9600 -------------- N/A ------------------------------------ (Former Name or Former Address, if Changed Since Last Report) ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. The registrant hereby amends its report on Form 8-K filed on November 13, 1998 by deleting the text under Item 7 and replacing it with the following text. (A) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. Included as Exhibit 99.2 hereto and incorporated herein by reference. (B) PRO FORMA FINANCIAL INFORMATION. Included as Exhibit 99.3 hereto and incorporated herein by reference. (C) EXHIBITS. 2.1 Acquisition and Merger Agreement dated October 30, 1998 by and between ProVesa, Inc., IPA Acquisition Corporation, Item Processing of America, Inc. ("IPA") and certain shareholders of IPA.* 99.1 Press Release dated October 30, 1998.* 99.2 The following financial statements of IPA together with the report by BDO Seidman LLP for the periods stated therein: Balance Sheets as of December 31, 1997 and September 30, 1998 (unaudited). Statements of Income for the years ended December 31, 1996 and 1997 and the nine months ended September 30, 1997 and 1998 (unaudited). Statements of Stockholders' Equity for the years ended December 31, 1996 and 1997 and the nine months ended September 30, 1998 (unaudited). Statements of Cash Flows for the years ended December 31, 1996 and 1997 and the nine months ended September 30, 1997 and 1998 (unaudited). Notes to Financial Statements. 2 99.3 The following unaudited pro forma condensed consolidated financial statements of InterCept and IPA: Pro Forma Balance Sheet as of September 30, 1998. Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 1997. Pro Forma Condensed Consolidated Statement of Operations for the nine months ended September 30, 1998. Notes to Pro Forma Condensed Consolidated Financial Information. - --------- *Previously filed with the registrant's Current Report on Form 8-K filed November 13, 1998. 3 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. THE INTERCEPT GROUP, INC. By: /s/ Scott R. Meyerhoff ------------------------------------- Scott R. Meyerhoff Chief Financial Officer Dated: January 13, 1998 4 EXHIBIT INDEX Exhibit - ------- 2.1 Acquisition and Merger Agreement dated October 30, 1998 by and between ProVesa, Inc., IPA Acquisition Corporation, Item Processing of America, Inc. ("IPA") and certain shareholders of IPA.* 99.1 Press Release dated October 30, 1998.* 99.2 The following financial statements of IPA together with the report by BDO Seidman LLP for the periods stated therein: Balance Sheets as of December 31, 1997 and September 30, 1998 (unaudited). Statements of Income for the years ended December 31, 1996 and 1997 and the nine months ended September 30, 1997 and 1998 (unaudited). Statements of Stockholders' Equity for the years ended December 31, 1996 and 1997 and the nine months ended September 30, 1998 (unaudited). Statements of Cash Flows for the years ended December 31, 1996 and 1997 and the nine months ended September 30, 1997 and 1998 (unaudited). Notes to Financial Statements. 99.3 The following unaudited pro forma condensed consolidated financial statements of InterCept and IPA: Pro Forma Balance Sheet as of September 30, 1998. Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 1997. Pro Forma Condensed Consolidated Statement of Operations for the nine months ended September 30, 1998. Notes to Pro Forma Condensed Consolidated Financial Information. - --------- *Previously filed with the registrant's Current Report on Form 8-K filed November 13, 1998. 5 EX-99.2 2 AUDITED FINANCIAL STATEMENTS EXHIBIT 99.2 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To the Board of Directors Item Processing of America, Inc. Miami, Florida We have audited the accompanying balance sheet of Item Processing of America, Inc. as of December 31, 1997 and the related statements of income, stockholders' equity and cash flows for each of the two years in the period then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our 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 Item Processing of America, Inc. at December 31, 1997, and the results of its operations and its cash flows for each of the two years in the period then ended in conformity with generally accepted accounting principles. BDO Seidman LLP Miami, Florida January 22, 1998
ITEM PROCESSING OF AMERICA, INC. BALANCE SHEETS - ----------------------------------------------------------------------------- SEPTEMBER 30, December 31, 1998 1997 - ----------------------------------------------------------------------------- (UNAUDITED) ASSETS CURRENT Cash $127,101 $ 75,725 Accounts receivable, net of allowance for doubtful accounts of $10,000 in 1998 139,279 136,416 Prepaid expenses 24,183 26,349 - ---------------------------------------------------------------------------- Total current assets 290,563 238,490 - ---------------------------------------------------------------------------- PROPERTY AND EQUIPMENT Computer equipment (Note 2) 382,642 369,877 Furniture and equipment 72,540 74,511 Leasehold improvements 10,528 10,334 - ---------------------------------------------------------------------------- 465,710 454,722 Less accumulated depreciation and amortization 405,869 400,822 - ---------------------------------------------------------------------------- Property and equipment, net 59,841 53,900 - ---------------------------------------------------------------------------- OTHER 6,997 6,957 - ---------------------------------------------------------------------------- $357,401 $299,347 ============================================================================
See accompanying notes to financial statements. 2
ITEM PROCESSING OF AMERICA, INC. BALANCE SHEETS - ----------------------------------------------------------------------------------------- SEPTEMBER 30, December 31, 1998 1997 - ----------------------------------------------------------------------------------------- (UNAUDITED) LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued liabilities $ 73,869 $ 52,685 Deferred revenues 13,950 14,100 Current maturities of long-term debt (Note 2) 5,903 3,390 - ----------------------------------------------------------------------------------------- Total current liabilities 93,722 70,175 CUSTOMER DEPOSITS 22,774 17,774 LONG-TERM DEBT, less current maturities (Note 2) 10,754 3,566 - ----------------------------------------------------------------------------------------- Total liabilities 127,250 91,515 - ----------------------------------------------------------------------------------------- COMMITMENTS AND SUBSEQUENT EVENT (NOTES 4 AND 8) - ----------------------------------------------------------------------------------------- STOCKHOLDERS' EQUITY (NOTE 3) Preferred stock, 8.4% cumulative, $25.00 par value, 12,000 shares authorized, 4,000 and 7,000 shares outstanding, callable at $26 per share 100,000 175,000 Preferred stock, 8% cumulative, $20 par value, 3,000 shares authorized, 0 and 1,978 shares outstanding, each share convertible into 10 shares of common stock, callable at $21 per share - 39,560 Common stock, $1.00 par value, 500,000 shares authorized, 214,840 and 216,530 shares outstanding 214,840 216,530 Additional paid-in capital 41,388 30,678 Deficit (126,077) (253,936) - ----------------------------------------------------------------------------------------- Total stockholders' equity 230,151 207,832 - ----------------------------------------------------------------------------------------- $ 357,401 $ 299,347 =========================================================================================
See accompanying notes to financial statements. 3
ITEM PROCESSING OF AMERICA, INC. STATEMENTS OF INCOME - -------------------------------------------------------------------------------------------------------- Nine months ended September 30, Year ended December 31, ------------------------------- -------------------------- 1998 1997 1997 1996 - -------------------------------------------------------------------------------------------------------- (UNAUDITED) (UNAUDITED) REVENUES $ 864,985 $ 729,197 $1,012,590 $ 846,939 - -------------------------------------------------------------------------------------------------------- OPERATING EXPENSES Salaries and wages 426,663 426,941 567,530 469,212 General and administrative 108,508 78,931 104,168 94,712 Rent 70,735 67,995 90,672 87,037 Equipment maintenance 43,470 41,756 55,741 53,984 Insurance 31,186 34,527 46,819 38,537 Marketing 25,594 31,341 45,151 30,621 Depreciation and amortization 12,325 13,650 33,866 12,307 - --------------------------------------------------------------------------------------------------------- Total operating expenses 718,481 695,141 943,947 786,410 - --------------------------------------------------------------------------------------------------------- OPERATING INCOME 146,504 34,056 68,643 60,529 - --------------------------------------------------------------------------------------------------------- OTHER INCOME (EXPENSE) Dividend income - - - 2,787 Interest expense (857) (831) (1,055) (3,239) Loss on sale of investment (Note 7) - - - (17,000) - --------------------------------------------------------------------------------------------------------- Total other expenses (857) (831) (1,055) (17,452) - --------------------------------------------------------------------------------------------------------- NET INCOME $ 145,647 $ 33,225 $ 67,588 $ 43,077 =========================================================================================================
See accompanying notes to financial statements. 4
ITEM PROCESSING OF AMERICA, INC. STATEMENTS OF STOCKHOLDERS' EQUITY - -------------------------------------------------------------------------------------------------------------------- 8.4% Preferred Stock 8% Preferred Stock Common Stock ------------------------------------------------------------------------ Shares Amount Shares Amount Shares Amount - -------------------------------------------------------------------------------------------------------------------- Balance at December 31, 1995 7,000 $ 175,000 1,978 $ 39,560 216,530 $ 216,530 Net income - - - - - - Dividends - - - - - - - -------------------------------------------------------------------------------------------------------------------- Balance at December 31, 1996 7,000 175,000 1,978 39,560 216,530 216,530 Net income - - - - - - Dividends - - - - - - - -------------------------------------------------------------------------------------------------------------------- Balance at December 31, 1997 7,000 175,000 1,978 39,560 216,530 216,530 Redemption of 8.4% preferred stock (Note 3) (3,000) (75,000) - - - - Redemption of 8% preferred stock (Note 3) - - (416) (8,736) - - Conversion of 8% preferred stock (Note 3) - - (1,562) (30,824) 15,620 15,620 Common stock repurchased (Note 3) - - - - (29,310) (29,310) Stock options exercised (Note 3) - - - - 12,000 12,000 Dividends - - - - - - Net income - - - - - - - -------------------------------------------------------------------------------------------------------------------- Balance at September 30, 1998 (unaudited) 4,000 $ 100,000 - $ - 214,840 $ 214,840 ====================================================================================================================
Additional Paid-in Capital (Deficit) Total - ------------------------------------------------------------------------------------------- Balance at December 31, 1995 $ 30,678 $ (328,873) $ 132,895 Net income - 43,077 43,077 Dividends - (17,864) (17,864) - ------------------------------------------------------------------------------------------- Balance at December 31, 1996 30,678 (303,660) 158,108 Net income - 67,588 67,588 Dividends - (17,864) (17,864) - ------------------------------------------------------------------------------------------ Balance at December 31, 1997 30,678 (253,936) 207,832 Redemption of 8.4% preferred stock (Note 3) (3,000) - (78,000) Redemption of 8% preferred stock (Note 3) - - (8,736) Conversion of 8% preferred stock (Note 3) 15,204 - - Common stock repurchased (Note 3) (1,494) - (30,804) Stock options exercised (Note 3) - - 12,000 Dividends - (17,788) (17,788) Net income - 145,647 145,647 - ------------------------------------------------------------------------------------------ Balance at September 30, 1998 (unaudited) $ 41,388 $ (126,077) $ 230,151 ========================================================================================== See accompanying notes to financial statements.
5
ITEM PROCESSING OF AMERICA, INC. STATEMENTS OF CASH FLOWS - ---------------------------------------------------------------------------------------------------------------------------- Nine Months Ended September 30, Year Ended December 31, ----------------------------- -------------------------- 1998 1997 1997 1996 - ---------------------------------------------------------------------------------------------------------------------------- (Unaudited) (Unaudited) OPERATING ACTIVITIES Net income $ 145,647 $ 33,225 $ 67,588 $ 43,077 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 12,325 13,650 33,866 12,307 Bad debt expense 10,000 - - - Loss on sale of investments - - - 17,000 (Increase) decrease in: Accounts receivable (12,863) (21,776) (6,254) (17,675) Prepaid expenses 2,166 (20,434) (13,988) 1,686 Other (40) 8,000 1,000 (1,193) Increase (decrease) in: Accounts payable and accrued liabilities 15,933 12,212 1,357 1,483 Deferred revenues (150) 1,000 750 (10,200) Customer deposits 5,000 11,500 1,600 (1,400) - ---------------------------------------------------------------------------------------------------------------------------- Net cash provided by operating activities 178,018 37,377 85,919 45,085 - ---------------------------------------------------------------------------------------------------------------------------- INVESTING ACTIVITIES Additions to property and equipment (1,778) (18,265) (16,229) (18,273) Proceeds from sale of investment - - - 25,000 - ---------------------------------------------------------------------------------------------------------------------------- Net cash (used in) provided by investing activities (1,778) (18,265) (16,229) 6,727 - ---------------------------------------------------------------------------------------------------------------------------- FINANCING ACTIVITIES Repurchase of common stock (29,310) - - - Redemption of preferred stock (82,980) - - - Proceeds of issuance of common stock 12,000 - - - Dividends paid (17,788) (13,399) (17,864) (17,864) Principal payments on debt (6,786) (3,133) (4,188) (37,933) - ---------------------------------------------------------------------------------------------------------------------------- Net cash (used in) financing activities (124,864) (16,532) (22,052) (55,797) - ---------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in cash 51,376 2,580 47,638 (3,985) Cash - beginning of period 75,725 28,087 28,087 32,072 - ---------------------------------------------------------------------------------------------------------------------------- Cash - end of period $ 127,101 $ 30,667 $ 75,725 $ 28,087 ============================================================================================================================ SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for interest $ 857 $ 831 $ 1,055 $ 3,239 SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES: Loan obligation incurred for purchase of equipment $ 16,489 - - - Dividends declared $ 5,250 - - - ============================================================================================================================ See accompanying notes to financial statements.
6
ITEM PROCESSING OF AMERICA, INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED WITH RESPECT TO THE PERIODS ENDED SEPTEMBER 30, 1998 AND 1997) - ------------------------------------------------------------------------------------------------------------------ 1. SUMMARY OF SIGNIFICANT Business ACCOUNTING POLICIES -------- The Company provides data processing and other services primarily to financial institutions in South Florida. Estimates --------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Property and Equipment ---------------------- Property and equipment is carried at cost. Depreciation and amortization are computed on the straight-line method over the three to five year estimated useful lives of the assets. Revenue Recognition ------------------- Revenues are recognized as the services are rendered. Interim Financial Statements ---------------------------- The financial statements for the nine months ended September 30, 1998 and 1997 are unaudited. In the opinion of management, such financial statements include all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of financial position and the results of operations. The results of operations for the nine months ended September 30, 1998 are not necessarily indicative of the results to be expected for the full year.
7
ITEM PROCESSING OF AMERICA, INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED WITH RESPECT TO THE PERIODS ENDED SEPTEMBER 30, 1998 AND 1997) - ----------------------------------------------------------------------------------------------------------------------- 2. LONG-TERM DEBT Long-term debt consists of the following: September 30, December 31, 1998 1997 - ----------------------------------------------------------------------------------------------------------------------- Equipment loans payable, imputed interest rate of 13%, principal and interest payable monthly through May 2001 collateralized by certain computer equipment. $ 16,379 $ 4,178 Bank loan payable, interest at 2% over prime (10.25% and 10.5% at September 30, 1998 and December 31, 1997, respectively), principal and interest payable monthly through November 1998, collateralized by certain computer equipment. 278 2,778 --------------------------------------------------------------------------------- Total 16,657 6,956 Less current maturities 5,903 3,390 --------------------------------------------------------------------------------- $ 10,754 $ 3,566 ================================================================================= 3. STOCKHOLDERS' EQUITY As of September 30, 1998, the Company had outstanding options to acquire an aggregate 17,000 shares of its common stock. The options were granted in earlier years to certain executives, employees, and members of the Board of Directors at exercise prices (at or above estimated fair market value at the date of grant) of $1.00 per share. The options expire in December 1998. During the nine months ended September 30, 1998, options to acquire
8
ITEM PROCESSING OF AMERICA, INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED WITH RESPECT TO THE PERIODS ENDED SEPTEMBER 30, 1998 AND 1997) - ------------------------------------------------------------------------------------------------------------------ 12,000 shares of common stock were exercised and options to acquire 1,000 shares of common stock were cancelled. During the nine months ended September 30, 1998, 3,000 shares of 8.4% preferred stock were redeemed at $26 per share. Additionally, 250 shares of 8% preferred stock were redeemed at $21 per share, 166 shares of 8% preferred stock were redeemed at $30 per share, 1,562 shares of 8% preferred stock were converted into 15,620 shares of common stock and the Company repurchased and retired 29,310 shares of common stock for $29,310. 4. COMMITMENTS The Company leases office space under operating leases which expire in 1999. As of September 30, 1998, the approximate future minimum lease payments required under the operating leases are as follows: Twelve months ending September 30, --------------------------------- 1998 $ 19,585 --------------------------------------------------------------------------- $ 19,585 =========================================================================== 5. INCOME TAXES For each of the periods presented in the accompanying financial statements, the Company utilized available net operating loss carryforwards to eliminate taxable income. As of September 30, 1998, the Company has net operating loss carryforwards of approximately $44,000 for income tax purposes expiring through 2009. Realization of any portion of approximate $17,000 deferred tax asset at September 30, 1998, resulting from the available net operating loss carryforward, is not considered more likely than not and, accordingly, a valuation allowance has been recorded for the full amount of such asset. Future utilization of the net operating loss carryforward may be limited due to changes in control of the Company.
9
ITEM PROCESSING OF AMERICA, INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED WITH RESPECT TO THE PERIODS ENDED SEPTEMBER 30, 1998 AND 1997) - ------------------------------------------------------------------------------------------------------------------ 6. RELATED PARTY Included in revenues for the nine months ended September 30, 1998 and the years ended December 31, 1997 and 1996 is approximately $80,000, $64,000 and $48,000, respectively, earned from a financial institution which is a stockholder of the Company. Marketing expense for the nine months ended September 30, 1998, and the years ended December 31, 1997 and 1996, includes approximately $26,000, $45,000 and $26,000, respectively, for services rendered to the Company by two members of the Company's Board of Directors. 7. INVESTMENT During 1996, the Company sold its investment in a privately held entity that provides courier services to the Company for $25,000, resulting in a loss of $17,000 which is included in other expenses in the accompanying statement of income. 8. SUBSEQUENT EVENT On October 31, 1998, the Company entered into an agreement to sell all the outstanding common and preferred stock and options to acquire common stock of the Company to The Intercept Group, Inc. for aggregate cash consideration of $1,255,474.
10 EX-99.3 3 PRO FORMA FINANCIAL STATEMENTS EXHIBIT 99.3 The InterCept Group, Inc. Unaudited Pro Forma Balance Sheet As of September 30, 1998
(a) (b) Historical Item Processing Pro Forma Pro Forma Assets Consolidated of America Eliminations Consolidated ------------ --------------- --------------- ------------ Cash and cash equivalents $ 5,645,631 $127,101 (1,255,474)(c) $ 4,517,258 Accounts receivable, net of allowance for uncollectible accounts 2,777,385 139,279 - 2,916,664 Inventory, prepaid expenses and other 673,916 24,183 - 698,099 Property and equipment, net 5,992,749 59,841 - 6,052,590 Deferred tax assets 698,875 - - 698,875 Notes receivable 37,278 - - 37,278 Intangible assets, net 3,641,394 - 1,025,323 (d) 4,666,717 Other noncurrent assets 574,749 6,997 - 581,746 ----------- -------- ----------- ----------- Total assets $20,041,977 $357,401 $ (230,151) $20,169,227 =========== ======== =========== =========== Liabilities and Shareholders' Equity Current maturities of notes payable $ 92,833 $ 5,903 - 98,736 Line of credit - - - - Accounts payable and accrued liabilities 2,078,695 73,869 - 2,152,564 Accrued income taxes 895,265 - - 895,265 Deferred revenue 1,245,952 13,950 - 1,259,902 Notes payable, less current portion 229,804 10,754 - 240,558 Customer deposits - 22,774 - 22,774 Minority Interest 48,169 - 48,169 Unrealized Gain/Loss 225,000 225,000 Preferred stock - 100,000 (100,000)(e) - Common stock 17,175,797 214,840 (214,840)(e) 17,175,797 Accumulated deficit (1,949,538) (84,689) 84,689 (e) (1,949,538) ----------- -------- ----------- ----------- Total liabilities and shareholders' equity $20,041,977 $357,401 $ (230,151) $20,169,227 =========== ======== =========== ===========
(a) Represents the historical unaudited consolidated balance sheet of the Company as of September 30, 1998 contained in the Company's Quarterly Report on Form 10-Q for the Quarter ended September 30, 1998. (b) Represents the historical unaudited balance sheet of Item Processing of America, Inc. ("IPA") as of September 30, 1998 included herein. (c) Represents cash paid at closing by the Company for the common and preferred stock of IPA. (d) Represents the excess of the purchase price paid by the Company over the net fair market value of IPA. (e) Represents the elimination of current equity accounts. The InterCept Group, Inc. Unaudited Pro Forma Condensed Consolidated Statement of Operations For the Year Ended December 31, 1997
(a) (b) Historical Item Processing Pro Forma Pro Forma ----------- --------------- ---------- ----------- Revenues $23,260,082 $1,012,590 $ - $24,272,672 Cost of services 10,222,651 623,271 - 10,845,922 Selling, general and administrative expense 10,105,317 286,810 - 10,392,127 Depreciation and amortization 1,323,771 33,866 120,000 (c) 1,477,637 Loss on impairment of intangibles 727,500 - - 727,500 Writeoff of purchased research and development cost - - - - ----------- ---------- --------- ----------- Total operating expense 22,379,239 943,947 120,000 23,443,186 ----------- ---------- --------- ----------- Operating Income 880,843 68,643 (120,000) 829,486 Interest expense (770,175) (1,055) - (771,230) Interest and other income, net 121,535 - (62,750) (d) 58,785 ----------- ---------- --------- ----------- Income before provision for income taxes and minority interest 232,203 67,588 (182,750) 117,041 Provision for income taxes 666,125 - - 666,125 Minority interest 38,564 - - 38,564 ----------- ---------- --------- ----------- Net loss before preferred dividends (395,358) 67,588 (182,750) (510,520) Preferred dividends (32,000) - (32,000) ----------- ---------- --------- ----------- Net loss attributable to common shareholders $ (427,358) $ 67,588 $(182,750) $ (542,520) =========== ========== ========= =========== Pro Forma net loss per share $ (0.06) $ (0.08) =========== =========== Pro forma weighted average common and common equivalent shares outstanding 6,750,114 6,750,114 =========== =========== (a) Represents the historical condensed consolidated statement of operations of The InterCept Group, Inc. ("InterCept" or the "Company") for the year ended December 31, 1997 contained in the Company's Registration Statement on Form S-1 (Registration No. 333-47197) as declared effective by the Securities and Exchange Commission on June 9, 1998. (b) Represents the historical statement of operations of Item Processing of America, Inc. ("IPA") for the year ended December 31, 1997 included herein. (c) Reflects the amortization of intangibles related to the acquisition of IPA as if it had occurred on January 1, 1997. (d) Reflects the reduction in interest income related to the acquisition of IPA as if it had occurred on January 1, 1997 due to the use of cash to fund the acquisition.
The InterCept Group, Inc. Unaudited Pro Forma Condensed Consolidated Statement of Operations For the Nine Months Ended September 30, 1998
(a) (b) Historical Item Processing Pro Forma Pro Forma Consolidated of America Eliminations Consolidated ------------- --------------- ------------ ---------------- Revenues $20,483,133 $864,985 $ -- $21,348,118 Cost of services 8,635,678 470,133 -- 9,105,811 Selling, general and administrative expense 7,896,546 236,023 -- 8,132,569 Depreciation and amortization 961,551 12,325 90,000 (c) 1,063,876 ----------- -------- --------- ----------- Total operating expense 17,493,775 718,481 90,000 18,302,256 ----------- -------- --------- ----------- Operating Income 2,989,358 146,504 (90,000) 3,045,862 Interest expense (329,080) (857) -- (329,937) Interest and other income, net 118,844 -- (47,062) (d) 71,782 ----------- -------- --------- ----------- Income before provision for income taxes and minority interest 2,779,122 145,647 (137,062) 2,787,707 Provision for income taxes 1,076,315 -- -- 1,076,315 Minority interest (79,886) -- -- (79,886) ----------- -------- --------- ----------- Net loss before preferred dividends 1,622,921 145,647 (137,062) 1,631,506 Preferred dividends (16,000) -- -- (16,000) ----------- -------- --------- ----------- Net loss attributable to common shareholders $ 1,606,921 $145,647 $(137,062) $ 1,615,506 =========== ======== ========= =========== Pro Forma net loss per share $ 0.20 $ 0.21 =========== =========== Pro forma weighted average common and common equivalent shares outstanding 7,866,960 7,866,960 =========== =========== (a) Represents the historical unaudited condensed consolidated statement of operations of The InterCept Group, Inc. ("InterCept" or the "Company") for the nine months ended September 30, 1998 contained in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998. (b) Represents the historical unaudited statement of operations of Item Processing of America, Inc. ("IPA") for the nine months ended September 30, 1998 included herein. (c) Reflects the amortization of intangibles related to the acquisition of IPA as if it had occurred on January 1, 1998. (d) Reflects the reduction in interest income related to the acquisition of IPA as if it had occurred on January 1, 1998 due to the use of cash to fund the acquisition.
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