8-K/A 1 spc8ka.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________ FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ______________ Date of Report (Date of earliest event reported): March 12, 2002 CAMBEX CORPORATION (Exact name of registrant as specified in its charter) Massachusetts O-6933 04-2442959 (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 360 Second Avenue Waltham, Massachusetts 02451 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (781) 890-6000 Item 2. Acquisition or Disposition of Assets On March 12, 2002, Cambex Corporation completed the acquisition of Super PC Memory, Inc., pursuant to the terms of the Stock Purchase and Sale Agreement dated as of January 31, 2002. Effective as of March 12, 2002, Super PC Memory, Inc. is a wholly-owned subsidiary of Cambex Corporation. The sellers received 560,000 shares of Cambex Corporation common stock and will receive fifteen percent (15%) of Super PC Memory, Inc.'s gross profit for the period from March 12, 2002 through December 31, 2004, payable in installment payments pursuant to the terms of the Stock Purchase and Sale Agreement. The Company filed a Current Report on Form 8-K on March 27, 2002 to announce the Stock Purchase and Sale Agreement. The Company is filing this Amendment to the Form 8-K in order to include financial statements and pro forma financial information required by Item 7 of Form 8-K. The Stock Purchase and Sale Agreement was included as Exhibit 2.1 to the Company's Current Report on Form 8-K dated March 27, 2002, and is incorporated herein by reference. A copy of Cambex Corporation's press release announcing the completion of the acquisition was included as Exhibit 99 to the Company's Current Report on Form 8-K dated March 27, 2002, and is incorporated herein by reference. The foregoing description of such documents is qualified in its entirety by reference to such Exhibits. Item 7. Financial Statements and Exhibits (a) Financial Statements of Business Acquired. 1. Independent Auditors' Report 2. Balance Sheet as of December 31, 2001 3. Statements of Operations for the years ended December 31, 2001 and 2000 4. Statement of Changes in Stockholders' Equity for the years ended December 31, 2001 and 2000 5. Statement of Cash Flows for the years ended December 31, 2001 and 2000 6. Notes to Financial Statements as of December 31, 2001 (b) Pro Forma Financial Information. 1. Unaudited Pro Forma Combined Financial Information 2. Unaudited Pro Forma Combined Balance Sheet as of December 31, 2001 3. Unaudited Pro Forma Combined Statement of Operations for the year ended December 31, 2001 4. Notes to Pro Forma Combined Financial Information 2 INDEPENDENT AUDITORS' REPORT To the Board of Directors of: Super PC Memory, Inc. We have audited the accompanying balance sheet of Super PC Memory, Inc. as of December 31, 2001 and the related statements of operations, change in stockholders' equity and cash flows for the years ended December 31, 2001 and 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above, present fairly, in all material respects, the financial position of Super PC Memory, Inc. as of December 31, 2001, and the results of its operations and its cash flows for the years ended December 31, 2001 and 2000, in conformity with accounting principles generally accepted in the United States of America. /s/ WEINBERG & COMPANY, P.A. WEINBERG & COMPANY, P.A. Los Angeles, California March 22, 2002 3 SUPER PC MEMORY, INC. BALANCE SHEET AS OF DECEMBER 31, 2001 ASSETS CURRENT ASSETS Cash and cash equivalents $ 54,259 Accounts receivable, net 1,795,882 Inventory 830,487 Prepaid expenses 18,006 Total Current Assets 2,698,634 PROPERTY AND EQUIPMENT - NET 11,880 OTHER ASSETS Deposits 10,710 Goodwill, net 302,907 Other assets 7,800 Total Other Assets 321,417 TOTAL ASSETS $ 3,031,931 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Cash overdraft $ 240,672 Line of credit payable 1,191,988 Accounts payable 617,695 Accrued expenses 180,497 Total Current Liabilities 2,230,852 LONG-TERM LIABILITIES Note payable - stockholder 401,863 STOCKHOLDERS' EQUITY Common stock, no par value, 100,000 shares authorized, 54,902 shares issued and outstanding 411,765 Common stock to be issued 13,726 Less: subscriptions receivable (13,726) Deficit (12,549) Total Stockholders' Equity 399,216 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,031,931 See accompanying notes to financial statements. 4 SUPER PC MEMORY, INC. STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000 2001 2000 SALES - NET $ 22,555,562 $ 40,944,081 COST OF SALES 16,505,549 34,629,380 GROSS PROFIT 6,050,013 6,314,701 OPERATING EXPENSES Selling expenses 456,848 422,209 Salaries 3,344,138 3,113,552 Bad debts 1,404,520 95,121 General and administrative expenses 2,551,046 2,143,235 Depreciation and amortization expense 120,159 81,345 Total Operating Expenses 7,876,711 5,855,462 (LOSS) INCOME FROM OPERATIONS (1,826,698) 459,239 OTHER INCOME (EXPENSE) Interest and other income 4,966 13,714 Interest expense (228,674) (331,348) Total Other Expense (223,708) (317,634) NET (LOSS) INCOME $ (2,050,406) $ 141,605 Net (loss) income per common share - basic and diluted $ (37.35) $ 2.58 Weighted average number of shares outstanding during the year - basic and diluted 54,902 54,902 See accompanying notes to financial statements. 5 SUPER PC MEMORY, INC. STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000 Retained Common Stock Stock To Subscription Earnings Total Shares Amount Be Issued Receivable (Deficit) Balance, January 1, 2000 54,902$411,765 $ - $ - $ 2,176,252 $ 2,588,017 Dividends paid - - - - (250,000) (250,000) Net income, 2000 - - - - 141,605 141,605 Balance December 31,2000 54,902 411,765 - - 2,067,857 2,479,622 Dividends paid - - - - (30,000) (30,000) Stock to be issued - - 13,726 (13,726) - - Net loss, 2001 - - - - (2,050,406) (2,050,406) BALANCE, DECEMBER 31, 2001 54,902$411,765 $ 13,726 $ (13,726)$ (12,549)$ 399,216 See accompanying notes to financial statements. 6 SUPER PC MEMORY, INC. STATEMENTS OF CASH FLOW FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000 2001 2000 CASH FLOWS FROM OPERATING ACTIVITIES: Net (Loss) Income $ (2,050,406) $ 141,605 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 120,159 81,345 Bad debt expense 1,404,520 95,121 Write-down of fixed assets 14,851 - Changes in operating assets and liabilities: (Increase) decrease in: Accounts receivable 1,392,411 1,438,682 Inventories 882,283 (399,439) Prepaid expenses (915) (13,225) Other assets - (33,666) Increase (decrease) in: Accounts payable (62,533) (113,756) Cash overdraft 170,173 (269,068) Due to stockholder - 100,000 Accrued expenses 86,570 24,255 Net Cash Provided By Operating Activities 1,957,113 1,051,854 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (2,650) (57,643) Net Cash Used In Investing Activities (2,650) (57,643) CASH FLOWS FROM FINANCING ACTIVITIES: Dividends (30,000) (250,000) Payments on line of credit (1,870,204) (744,211) Net Cash Used In Financing Activities (1,900,204) (994,211) NET INCREASE IN CASH 54,259 - CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR - - CASH AND CASH EQUIVALENTS - END OF YEAR $ 54,259 $ - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the year for interest $ 228,674 $ 331,348 See accompanying notes to financial statements. 7 SUPER PC MEMORY, INC. NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2001 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (A) Organization and Description of Business Super PC Memory, Inc. (the "Company") was incorporated in the State of California in March 1993. The Company assembles and distributes computer memory chips and sells primarily to wholesalers. The Company's assembling operations are performed through a related party assembler (See Note 11). (B) Use of Estimates In preparing financial statements in conformity with accounting principles generally accepted in the United States, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. (C) Cash and Cash Equivalents For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. (D) Inventories Inventories are stated at the lower of cost or market. (E) Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is provided using the straight-line method over the estimated useful lives of the assets which range from five to twelve years. (F) Intangibles Goodwill and other intangible assets are amortized on the straight-line basis over the estimated future periods to be benefited. Goodwill, the excess of the Company's purchase price over the fair value of the net assets acquired, is amortized over fifteen years(See Note 1(J)). (G) Income Taxes The Company elected to become a subchapter S corporation for federal income tax purpose and therefore the income is recognized by the shareholders on their individual tax returns. Under California law, the Company reports income at the corporate level for state purposes. 8 SUPER PC MEMORY, INC. NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2001 (H) Revenue Recognition The Company recognizes revenues when goods are shipped. The Company's terms are free on board shipping point and title is considered to have passed once the carrier picks up the order. (I) Fair Value of Financial Instruments Statement of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments", ("SFAS 107"), requires disclosures of information about the fair value of certain financial instruments for which it is practicable to estimate that value. For purposes of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties other than in a forced sale or liquidation. The carrying amounts of the Company's financial instruments, including accounts receivable, accounts payable, accrued liabilities, and notes and loans payable approximates fair value due to the relatively short period to maturity for these instruments. (J) Recent Accounting Pronouncements The Financial Accounting Standards Board has recently issued several new Statements of Financial Accounting Standards. Statement of Financial Accounting Standards No. 141, "Business Combinations", ("SFAS 141"), supersedes APB Opinion 16 and various related pronouncements. Pursuant to the new guidance in SFAS 141, all business combinations must be accounted for under the purchase method of accounting; the pooling-of-interests method is no longer permitted. SFAS 141 also establishes new rules concerning the recognition of goodwill and other intangible assets arising in a purchase business combination and requires disclosure of more information concerning a business combination in the period in which it is completed. This statement is generally effective for business combinations initiated on or after July 1, 2001. Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets", ("SFAS 142"), supercedes APB Opinion 17 and related interpretations. SFAS 142 establishes new rules on accounting for the acquisition of intangible assets not acquired in a business combination and the manner in which goodwill and all other intangibles should be accounted for subsequent to their initial recognition in a business combination accounted for under SFAS 141. Under SFAS 142, intangible assets should be recorded at fair value. Intangible assets with finite useful lives should be amortized over such period and those with indefinite lives should not be amortized. All intangible assets being amortized as well as those that are 9 SUPER PC MEMORY, INC. NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2001 not are both subject to review for potential impairment under Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of", ("SFAS 121"). SFAS 142 also requires that goodwill arising in a business combination should not be amortized but is subject to impairment testing at the reporting unit level to which the goodwill was assigned to at the date of the business combination. SFAS 142 is effective for fiscal years beginning after December 15, 2001, and must be applied as of the beginning of such year to all goodwill and other intangible assets that have already been recorded in the balance sheet as of the first day in which SFAS 142 is initially applied, regardless of when such assets were acquired. Goodwill acquired in a business combination whose acquisition date is on or after July 1, 2001, should not be amortized, but should be reviewed for impairment pursuant to SFAS 121, even though SFAS 142 has not yet been adopted. However, previously acquired goodwill should continue to be amortized until SFAS 142 is first adopted. Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations", ("SFAS 143"), establishes standards for the initial measurement and subsequent accounting for obligations associated with the sale, abandonment, or other type of disposal of long-lived tangible assets arising from the acquisition, construction, or development and/or normal operation of such assets. SFAS 143 is effective for fiscal years beginning after June 15, 2002, with earlier application encouraged. The adoption of these pronouncements will not have a material effect on the Company's financial position or results of operations. NOTE 2 ACCOUNTS RECEIVABLE Accounts receivable were as follows at December 31, 2001: Accounts receivable $ 1,815,882 Allowance for doubtful accounts (20,000) $ 1,795,882 In 2001, the Company wrote off as a bad debt a note receivable of approximately $1,030,000 due to the insolvency of the debtor. NOTE 3 INVENTORY Inventory consisted of the following at December 31, 2001: Raw materials $ 278,164 Finished goods 552,323 $ 830,487 10 SUPER PC MEMORY, INC. NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2001 NOTE 4 PROPERTY AND EQUIPMENT Property and equipment consisted of the following at December 31, 2001: Equipment $ 127,500 Machinery and equipment 116,502 Furniture and fixtures 11,542 Automobile 7,987 263,531 Less accumulated depreciation 251,651 $ 11,880 Depreciation expense for the years ended December 31, 2001 and 2000 was $32,789 and $39,704, respectively. NOTE 5 NOTE PAYABLE - LINE OF CREDIT The Company entered into a one year $2,500,000 line of credit agreement with Manufacturers Bank maturing October 30, 2002. The agreement calls for an interest rate based on the bank prime rate or the LIBOR rate at the request date at the option of the Company. At the time of such agreement, the bank prime rate was 5.5%. The loan is secured by the assets of the Company and calls for certain financial ratios to be maintained including tangible net worth of $1,000,000, debt to tangible net worth of 3.2 to 1, a current ratio of 1.1, and avoidance of two quarters of consecutive after tax net losses. At December 31, 2001 the Company was not in compliance with such covenants. $ 1,191,988 The Company's shareholders and a related party are guarantors under the covenants. During 2002, the Company negotiated with a lender to refinance the Manufacturers Bank line of credit. NOTE 6 NOTE PAYABLE STOCKHOLDER At December 31, 2001 the Company was indebted to a stockholder for $401,863. The loan calls for interest at 8% and is due on October 1, 2005. NOTE 7 INCOME TAXES California tax statutes allow a corporation to carry forward losses but does not allow a carry back. For the year 2001 the Company has $2,050,406 of California losses that it can carry forward to offset future income. Under the current state rate this represents a deferred tax asset of approximately $30,800 which has been fully offset by a valuation allowance due to the uncertainty of its recognition. 11 SUPER PC MEMORY, INC. NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2001 NOTE 8 COMMITMENTS The Company leases equipment and office facilities in Irvine, California from a related party and a sales office in Westminster, Colorado. All of the Company's leases are considered operating leases. Rental expense amounted to $294,989 and $278,589 in 2001 and 2000, respectively. The Company's lease in Irvine expires on December 31, 2004 and the Colorado lease expires on October 1, 2008. Minimum future rental payments as of December 31, 2001 are as follows: Year Amount 2002 $ 295,000 2003 295,000 2004 237,000 2005 218,000 2006 121,000 Thereafter 212,000 $1,378,000 NOTE 9 STOCKHOLDERS' EQUITY Authorized Common Stock The Company is authorized to issue 100,000 shares of no par value common stock. As of December 31, 2001 the Company had 54,902 shares issued and outstanding. On December 12, 2001 the company entered into a stock subscription agreement to issue 13,726 shares of common stock to an employee of the Company for $1 per share (See Note 12). NOTE 10 EMPLOYEE BENEFIT PLAN Effective January 1, 2000, the Board of Directors approved a 401(k) savings plan covering all full-time employees. Subject to the approval by the Board of Directors, the Company has the discretion to match employee contributions each plan year. Expense attributable to Company contributions totaled $17,071 and $7,554 during 2001 and 2000, respectively. 12 SUPER PC MEMORY, INC. NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2001 NOTE 11 RELATED PARTY TRANSACTIONS The Company assembles its products through a related party, which is 100% owned by a shareholder of the Company. The prices charged to the Company are based on the lowest price the assembler charges a non-related customer. Total purchases from the related party charged to cost of goods sold for the years ended December 31, 2001 and 2000 amounted to $1,653,991 and $2,092,430, respectively (See Notes 5 and 8 for additional related party transactions). NOTE 12 SUBSEQUENT EVENTS On January 31, 2002, the Company's stockholders entered into an agreement with Cambex Corporation whereby the stockholders of the Company will tender their shares for 560,000 shares of Cambex common stock. The agreement also calls for the stockholders of the Company to receive 15% of the gross profit of the Company through December 31, 2004. The Company will become a wholly owned subsidiary of Cambex. During 2002, 13,726 shares were issued to an employee at $1.00 per share pursuant to a stock subscription agreement (See Note 9). 13 Unaudited Pro Forma Combined Financial Information On March 12, 2002, Cambex Corporation completed the acquisition of 100% of the outstanding common stock of Super PC Memory, Inc. and Super PC Memory, Inc. became a wholly-owned subsidiary of Cambex Corporation (the Transaction). The aggregate purchase price includes the issuance of 560,000 shares of Cambex common stock and payments based on the gross profit of the subsidiary through December 31, 2004. The sellers received 560,000 shares of Cambex Corporation common stock and will receive fifteen percent (15%) of Super PC Memory, Inc.'s gross profit for the period from March 12, 2002 through December 31, 2004, payable in quarterly installment payments pursuant to the terms of the Stock Purchase and Sale Agreement. The unaudited pro forma balance sheet set forth below gives effect to the Transaction as if it had been consummated on December 31, 2001. The unaudited pro forma statement of operations gives effect to the Transaction as if it occurred on January 1, 2001. The financial statements for Cambex Corporation as of December 31, 2001 and for the year ended December 31,2001 are derived from the Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2001 and incorporated herein by reference. The pro forma adjustments reflecting the consummation of the Transaction are based upon the purchase method of accounting and upon the assumptions set forth in the notes hereto. This pro forma information should be read in conjunction with the audited financial statements and notes that are included in this document. The pro forma adjustments do not reflect any operating efficiencies and cost savings which may be achievable with respect to the combined companies. These pro forma financial statements do not purport to present results, which would actually have been obtained if the Transaction had been in effect during the period covered, or any future results which may in fact be realized. For purposes of Cambex's financial statements, Cambex will establish a new basis for Super PC's assets and liabilities based upon the fair values thereof. A final determination of the fair value of assets and liabilities, has not yet been made. Accordingly, the purchase accounting adjustments made in connection with the development of the pro forma combined financial information are preliminary and have been made solely for purposes of developing such pro forma combined financial information. Cambex will undertake a study to determine the fair value of assets and liabilities and will make appropriate purchase accounting adjustments upon completion of that study. 14 CAMBEX CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED BALANCE SHEET DECEMBER 31, 2001 ASSETS CAMBEX SUPER PC PRO FORMA CORPORATION MEMORY,INC. PURCHASE PRO FORMA HISTORICAL HISTORICAL ADJUSTMENTS COMBINED CURRENT ASSETS: CASH AND CASH EQUIVALENTS $ 209,573 $ 54,259 $ 263,832 ACCOUNTS RECEIVABLE, net 240,384 1,795,882 2,036,266 INVENTORIES 472,910 830,487(300,042)(A)1,003,355 PREPAID EXPENSES 56,729 18,006 74,735 TOTAL CURRENT ASSETS $ 979,596 $ 2,698,634(300,042) 3,378,188 PROPERTY AND EQUIPMENT, at cost: MACHINERY AND EQUIPMENT $ 3,052,887 $ 11,880 3,064,767 FURNITURE AND FIXTURES 162,625 - 162,625 LEASEHOLD IMPROVEMENTS 602,092 - 602,092 $ 3,817,604 $ 11,880 3,829,484 LESS - ACCUMULATED DEPRECIATION AND AMORTIZATION 3,772,186 - 3,772,186 NET PROPERTY AND EQUIPMENT $ 45,418 $ 11,880 57,298 OTHER ASSETS DEFERRED OFFERING COSTS $ 427,975 $ - 427,975 GOODWILL - 302,907(302,907)(A) 168,070 168,070(A) OTHER 37,830 18,510 56,340 TOTAL OTHER ASSETS $ 465,805 $ 321,417(134,837) 652,385 TOTAL ASSETS $ 1,490,819 $ 3,031,931(434,879) $4,087,871 15 CAMBEX CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED BALANCE SHEET DECEMBER 31, 2001 LIABILITIES AND STOCKHOLDERS' INVESTMENT CAMBEX SUPER PC PRO FORMA CORPORATION MEMORY,INC. PURCHASE PRO FORMA HISTORICAL HISTORICAL ADJUSTMENTS COMBINED CURRENT LIABILITIES: CASH OVERDRAFT $ - $ 240,672 $ 240,672 LINE OF CREDIT PAYABLE - 1,191,988 1,191,988 LOAN AGREEMENT $ 1,057,991 $ - 1,057,991 NOTES PAYABLE 2,850,000 - 2,850,000 ACCOUNTS PAYABLE 826,852 617,695 1,444,547 OBLIGATIONS FOR TRADE-IN MEMORY 240,000 - 240,000 OTHER LIABILITIES-SHORT TERM PORTION 2,629,765 - 2,629,765 ACCRUED EXPENSES 1,950,672 180,497 125,000(B)2,256,169 TOTAL CURRENT LIABILITIES $ 9,555,280 $ 2,230,852 125,000 11,911,132 LONG TERM DEBT $ 1,273,730 $ 401,863(401,863)(A)1,273,730 OTHER LIABILITIES-LONG TERM PORTION 84,642 - 84,642 STOCKHOLDERS' INVESTMENT: PREFERRED STOCK, $ 1.00 PAR VALUE PER SHARE AUTHORIZED - 3,000,000 SHARES ISSUED - NONE COMMON STOCK, $ .10 PAR VALUE PER SHARE AUTHORIZED - 25,000,000 SHARES ISSUED $ 1,148,474 $ 411,765(411,765)(A)$ 1,204,474 56,000(A) CAPITAL IN EXCESS OF PAR VALUE 16,268,677 - 185,200(A) 16,453,877 COMMON STOCK TO BE ISSUED - 13,726 (13,726)(A) - LESS-SUBSCRIPTIONS RECEIVABLE - ( 13,726) 13,726(A) - ACCUMULATED OTHER COMPREHENSIVE INCOME 102,677 - 102,677 RETAINED EARNINGS (DEFICIT) (26,053,690) ( 12,549) 12,549(A) (26,053,690) LESS - COST OF SHARES HELD IN TREASURY (888,971) - ( 888,971) TOTAL STOCKHOLDERS' INVESTMENT $(9,422,833)$ 399,216(158,016) $(9,181,633) TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT $ 1,490,819 $3,031,931(434,879) $ 4,087,871 16 CAMBEX CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2001 CAMBEX SUPER PC PRO FORMA CORPORATION MEMORY,INC. PURCHASE PRO FORMA HISTORICAL HISTORICAL ADJUSTMENTS COMBINED REVENUES $ 1,855,011 $22,555,562 $24,410,573 COST OF SALES 892,297 16,505,549 17,397,846 Gross profit $ 962,714 $ 6,050,013 $ 7,012,727 OPERATING EXPENSES: Research and development $ 1,030,241 $ - $ 1,030,241 Selling 504,399 456,848 961,247 Salaries - 3,344,138 3,344,138 Bad debts - 1,404,520 1,404,520 General and administrative 420,357 2,551,046 2,971,403 Depreciation and amortization - 120,159 120,159 Total operating expenses $ 1,954,997 $ 7,876,711 9,831,708 OPERATING INCOME (LOSS) $( 992,283)$(1,826,698) $(2,818,981) OTHER INCOME (EXPENSE): Interest expense (551,000) ( 228,674) ( 779,674) Interest and other income - 4,966 4,966 INCOME (LOSS) BEFORE INCOME TAXES AND EXTRAORDINARY ITEMS $(1,543,283)$(2,050,406) $(3,593,689) Provision for income taxes - - - INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS $(1,543,283)$(2,050,406) $(3,593,689) Extraordinary Items - - - NET INCOME (LOSS) $(1,543,283)$(2,050,406) $(3,593,689) OTHER COMPREHENSIVE INCOME, NET OF TAX: Foreign Currency translation Adjustments 212 - 212 OTHER COMPREHENSIVE INCOME $ 212 $ - 212 TOTAL COMPREHENSIVE INCOME(LOSS)$(1,543,071)$(2,050,406) $(3,593,477) INCOME(LOSS) PER COMMON SHARE $ (0.16) $ (0.34) Weighted Average Common Shares Outstanding 9,890,000 560,000(C) 10,450,000 Weighted Average Common and Common Equivalent Shares Outstanding 9,890,000 560,000(C) 10,450,000 17 CAMBEX CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS (1) Description of the Transaction On March 12, 2002, Cambex Corporation completed the acquisition of 100% of the outstanding common stock of Super PC Memory, Inc. and Super PC Memory, Inc. became a wholly-owned subsidiary of Cambex Corporation (the Transaction). The aggregate purchase price includes the issuance of 560,000 shares of Cambex common stock and payments based on the gross profit of the subsidiary through December 31, 2004. The sellers received 560,000 shares of Cambex Corporation common stock and will receive fifteen percent (15%) of Super PC Memory, Inc.'s gross profit for the period from March 12, 2002 through December 31, 2004, payable in quarterly installment payments pursuant to the terms of the Stock Purchase and Sale Agreement. The unaudited pro forma balance sheet gives effect to the Transaction as if it had been consummated on December 31, 2001. The unaudited pro forma statement of operations gives effect to the Transaction as if it occurred on January 1, 2001. (2) Description of Pro Forma Adjustments (A)The value assigned to goodwill is based on the purchase price over the amounts assigned to the identifiable assets acquired and liabilities of Super PC Memory, Inc. The allocation of the purchase price is as follows: Common Stock(1) $241,200 Add: Transaction costs 125,000 Total Consideration 366,200 Less: Net tangible assets acquired 198,130 Goodwill 168,070 (1) The 560,000 shares of common stock of Cambex Corporation issued in connection with the Transaction is valued at the closing price on March 12, 2002, $0.52 per share less an estimated $50,000 cost of registration of the shares of common stock. Therefore, the allocation of the common stock issued is $56,000 to common stock for the par value of shares issued and the balance to capital in excess of par value. Reflects the elimination of Super PC Memory, Inc. common stock and retained earnings in the amount of $411,765 and $(12,549), respectively. (B) The accrued expense adjustment represents the accrued estimated transaction costs to be incurred as a result of the Transaction. The costs are primarily the Company's legal, accounting, stock registration fees and similar expenses. (C) Reflects additional shares issued to Super PC Memory, Inc. shareholders. 18 (c) Exhibits. 2.1 Stock Purchase and Sale Agreement dated as of January 31, 2002 by and among Cambex Corporation, Super PC Memory, Inc., Son T. Pham, Simon Le and Richard G. Schaefer (included as Exhibit 2.1 to the Company's Current Report on Form 8-K dated March 27, 2002, and is incorporated herein by reference). 23.1 Consent of Weinberg & Company, P.A. 99 Press Release dated March 25, 2002 (included as Exhibit 99 to the Company's Current Report on Form 8-K dated March 27, 2002, and is incorporated herein by reference). 19 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. CAMBEX CORPORATION (Registrant) Date: May 30, 2002 By:/s/Joseph F. Kruy Joseph F. Kruy President and Chief Executive Officer EXHIBIT INDEX Exhibit Number Description 2.1 Stock Purchase and Sale Agreement dated as of January 31, 2002 by and among Cambex Corporation, Super PC Memory, Inc., Son T. Pham, Simon Le and Richard G. Schaefer (included as Exhibit 2.1 to the Company's Current Report on Form 8-K dated March 27, 2002, and is incorporated herein by reference). 23.1 Consent of Weinberg & Company, P.A. 99 Press Release dated March 25, 2002 (included as Exhibit 99 to the Company's Current Report on Form 8-K dated March 27, 2002, and is incorporated herein by reference).