-----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, V7Xup8qNbxMQjXJfiQGVxNGPgA5SHPhy6PCFNok6KnQmIYOxUQu9BstZmoXbf1QW dlyxoiUsm6Qcp2EPhZmHDg== 0001095811-00-000518.txt : 20000314 0001095811-00-000518.hdr.sgml : 20000314 ACCESSION NUMBER: 0001095811-00-000518 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000131 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000313 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALPHA MICROSYSTEMS CENTRAL INDEX KEY: 0000352869 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 953108178 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-10558 FILM NUMBER: 568103 BUSINESS ADDRESS: STREET 1: 2722 SOUTH FAIRVIEW STREET CITY: SANTA ANA STATE: CA ZIP: 92704 BUSINESS PHONE: 7149578500 MAIL ADDRESS: STREET 1: 2722 SOUTH FAIRVIEW STREET CITY: SANTA ANA STATE: CA ZIP: 92704 8-K/A 1 AMENDMENT TO FORM 8-K 1 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) January 31, 2000 ---------------- Alpha Microsystems - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) California 0-10558 95-3108178 - ----------------------------- ------------ ------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 2722 South Fairview Street, Santa Ana, California 92704 - ------------------------------------------------- ------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (714) 957-8500 --------------- Not Applicable - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report.) 2 EXPLANATORY NOTE: This filing is made to amend and restate in its entirety the Registrant's Form 8-K Current Report dated February 15, 2000. The pro forma adjustment to selling, general and administrative expenses included in the 1999 Nine Month Pro Forma Condensed Consolidated Statement of Operations has been reduced by $887,000 to a total of $3,981,000 from the previously reported amount of $4,868,000. Item 2. Acquisition or Disposition of Assets On January 31, 2000, Alpha Microsystems (the "Company") completed the sale of substantially all of the assets associated with its Alpha Micro Services Division ("AMSO") and its Alpha Micro Operating System ("AMOS") computer hardware manufacturing division (collectively the "Business") to R.E. Mahmarian Enterprises, LLC ("REM") for consideration of approximately $3.2 million, consisting primarily of liabilities of the Business that were assumed by REM. The Company also received a ten percent contingent interest upon the occurrence of certain liquidity events involving REM following its acquisition of the Business. REM is owned by Richard E. Mahmarian, a current member of the Company's Board of Directors. The financial terms of the transaction were negotiated by management of the Company and REM, and the sale of the Business to REM was approved by a special committee of the Company's Board of Directors. In addition, the Company received an opinion from an investment banking firm that the consideration received in the transaction was fair from a financial point of view. Assets of the Business sold to REM include certain accounts receivable, prepaid expenses, other current and non-current assets, inventories, fixed assets, IT service contracts and capitalized software development costs. The Company has granted REM the right to use the name Alpha Microsystems, all trade names, logos and trademarks associated with AMSO and AMOS and has entered into a five-year license agreement providing REM the right to use the Company's AlphaCONNECT technology currently being utilized by the Business for REM's internal use in continuing operations of the Business. Additionally, the Company has agreed to sublease to REM the portion of the Santa Ana, California facility presently occupied by the Business. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (b) Pro Forma Financial Information: Unaudited Pro Forma Condensed Consolidated Financial Statements (c) Exhibits: 10.1 -- Asset Purchase Agreement dated as of December 31, 1999, incorporated herein by reference to Exhibit 10.1 of Form 8-K Current Report dated January 14, 2000. 10.2 -- Amendment No. 1 to Asset Purchase Agreement dated January 31, 2000. 99.1 -- Press release dated February 1, 2000. 2 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. Date: March 13, 2000 ALPHA MICROSYSTEMS By: /s/ Robert O. Riiska --------------------------------- Robert O. Riiska Chief Financial Officer 3 4 UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS On January 31, 2000, Alpha Microsystems (the "Company") completed the sale of substantially all of the assets associated with its Alpha Micro Services Division ("AMSO") and its Alpha Micro Operating System ("AMOS") computer hardware manufacturing division (collectively the "Business") to R.E. Mahmarian Enterprises, LLC ("REM") for consideration of approximately $3.2 million, consisting primarily of liabilities of the Business that were assumed by REM. The Company also received a ten percent contingent interest upon the occurrence of certain liquidity events involving REM following its acquisition of the Business. REM is owned by Richard E. Mahmarian, a current member of the Company's Board of Directors. The financial terms of the transaction were negotiated by management of the Company and REM, and the sale of the Business to REM was approved by a special committee of the Company's Board of Directors. In addition, the Company received an opinion from an investment banking firm that the consideration received in the transaction was fair from a financial point of view. In a separate transaction dated November 18, 1999, and as previously reported, the holder of the Company's outstanding redeemable preferred stock, Hampshire Equity Partners, II, purchased an additional $5.0 million of exchangeable redeemable preferred stock on essentially the same terms as the currently outstanding redeemable preferred stock that is included in shareholders' equity as of September 30, 1999. The preferred holder also received warrants to purchase an additional 2,971,620 shares of common stock at $2.50 per share. The following pro forma financial data of the Company consists of an Unaudited Pro Forma Condensed Consolidated Balance Sheet, a 1999 Nine Month Unaudited Pro Forma Condensed Consolidated Statement of Operations (the "1999 Nine Month Pro Forma Statement of Operations"), a 1998 Ten Month Transition Period Unaudited Pro Forma Condensed Consolidated Statement of Operations (the "1998 Ten Month Transition Period Pro Forma Statement of Operations"), and together the "Pro Forma Statements". The Unaudited Pro Forma Condensed Consolidated Balance Sheet is presented as if both the sale of certain assets to REM and the issuance of $5.0 million of exchangeable redeemable preferred stock occurred on September 30, 1999. The 1999 Nine Month Pro Forma Statement of Operations is presented as if the respective transactions were consummated on December 31, 1998. The 1998 Ten Month Transition Period Pro Forma Statement of Operations is presented as if the respective transactions were consummated on February 22, 1998. The Pro Forma Statements reflect preliminary estimates of the value of assets sold, the consideration received and transaction costs associated with the sale of certain assets to REM, as well as costs associated with the issuance of $5.0 million of exchangeable redeemable preferred stock. The Pro Forma Statements should be read in conjunction with the historical financial statements of the Company, the related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the Company's Quarterly Report on Form 10-Q for the period ended September 30, 1999 and the Company's Transition Report on Form 10-K for the ten month transition period ended December 31, 1998. The Pro Forma Statements are based upon currently available information and upon certain assumptions that the Company believes are reasonable under the circumstances. The Pro Forma Statements do not purport to represent what the Company's financial position or results of operations would actually have been if the aforementioned transactions in fact had occurred on such date or at the beginning of the periods indicated or to project the Company's financial position or results of operations at any future date or for any future periods. 4 5 ALPHA MICROSYSTEMS UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (In thousands, except share data)
Pro forma Pro forma Pro forma September 30, Adjustments Adjustments September 30, 1999 Investment Sale 1999 ------------ ---------- ----------- ------------ ASSETS Current assets: Cash and cash equivalents $ 517 $ 4,950(a) $ -- $ 5,467 Restricted cash 300 -- -- 300 Accounts receivable, net of allowance for doubtful accounts of $657 7,604 -- (1,860)(d) 5,744 Prepaid expenses and other current assets 1,152 -- (549)(d) 603 -------- -------- -------- -------- Total current assets 9,573 4,950 (2,409) 12,114 Property and equipment, net of accumulated depreciation of $9,963 5,341 -- (3,126)(d) 2,215 Goodwill, net 8,060 -- -- 8,060 IT service contracts, net 637 -- (637)(d) -- Software development costs, net 582 -- (287)(d) 295 Other intangibles, net 170 -- -- 170 Other assets 487 -- (34)(d) 453 -------- -------- -------- -------- $ 24,850 $ 4,950 $ (6,493) $ 23,307 ======== ======== ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Bank borrowings $ 2,250 $ -- $ -- $ 2,250 Accounts payable 2,577 -- -- 2,577 Accrued compensation 1,028 -- (272)(e) 756 Deferred revenue 3,814 -- -- 3,814 Other accrued liabilities 1,074 -- (13)(e) 1,501 440 (f) -------- -------- -------- -------- Total current liabilities 10,743 -- 155 10,898 Long-term debt 530 -- (30)(e) 500 Other long-term liabilities 134 -- -- 134 Redeemable preferred stock, no par value; 2,501 issued and outstanding, liquidation value $2,556 2,170 -- -- 2,170 Shareholders' equity: Redeemable preferred stock, no par value, 5,000,000 shares authorized; 12,500 issued and outstanding, 17,500 pro forma; liquidation value $12,781 actual, $17,781 pro forma 10,693 4,059(b) -- 14,752 Common stock, no par value; 40,000,000 shares authorized, 11,629,820 shares issued and outstanding 32,825 -- -- 32,825 Warrants 1,764 891(b) -- 2,655 Accumulated deficit (34,046) -- (6,618)(g) (40,664) Accumulated other comprehensive income 37 -- -- 37 -------- -------- -------- -------- Total shareholders' equity 11,273 4,950 (6,618) 9,605 -------- -------- -------- -------- $ 24,850 $ 4,950 $ (6,493) $ 23,307 ======== ======== ======== ========
5 6 ALPHA MICROSYSTEMS 1999 NINE MONTH PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (In thousands, except per share data)
Pro forma Nine Months Ended Nine Months Ended September 30, Pro forma September 30, 1999 Adjustments 1999 ----------------- ----------- ------------- Net sales: IT Services $ 24,050 $(12,380)(h) $ 11,670 Product 3,578 (3,393)(h) 185 -------- -------- -------- Total net sales 27,628 (15,773) 11,855 -------- -------- -------- Cost of sales: IT Services 17,936 (9,937)(h) 7,999 Product 2,632 (2,619)(h) 13 -------- -------- -------- Total cost of sales 20,568 (12,556) 8,012 -------- -------- -------- Gross margin 7,060 (3,217) 3,843 Operating expenses: Selling, general and administrative 8,414 (3,981)(h) 4,433 Engineering, research and development 949 (800)(h) 149 -------- -------- -------- Total operating expenses 9,363 (4,781) 4,582 -------- -------- -------- (Loss) income from operations (2,303) 1,564 (739) Other expense (income): Interest income (60) -- (60) Interest expense 133 -- 133 Other expense (income), net (196) -- (196) -------- -------- -------- Total other expense (income) (123) -- (123) -------- -------- -------- (Loss) income before taxes (2,180) 1,564 (616) Income tax expense 50 -- 50 -------- -------- -------- (Loss) income from continuing operations $ (2,230) $ 1,564 $ (666) ======== ======== ======== Computation of (loss) income from continuing operations to common shares: (Loss) income from continuing operations $ (2,230) $ 1,564 $ (666) Dividends on Redeemable Preferred Stock (1,012) (338)(c) (1,350) Accretion of redemption value on Redeemable Preferred Stock (66) -- (66) -------- -------- -------- (Loss) income from continuing operations attributable to common shares $ (3,308) $ 1,226 $ (2,082) ======== ======== ======== Basic and diluted (loss) income from continuing operations per share $ (0.29) $ (0.18) ======== ======== Number of shares used in computing basic and diluted per share amounts 11,594 11,594 ======== ========
6 7 ALPHA MICROSYSTEMS 1998 TEN MONTH PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (In thousands, except per share data)
Pro forma Ten Months Ended Ten Months Ended December 31, Pro forma December 31, 1998 Adjustments 1998 ---------------- ----------- --------------- Net sales: IT Services $ 20,072 $(12,224)(h) $ 7,848 Product 4,068 (3,824)(h) 244 -------- -------- -------- Total net sales 24,140 (16,048) 8,092 -------- -------- -------- Cost of sales: IT Services 17,222 (10,590)(h) 6,632 Product 3,772 (2,899)(h) 873 -------- -------- -------- Total cost of sales 20,994 (13,489) 7,505 -------- -------- -------- Gross margin 3,146 (2,559) 587 Operating expenses: Selling, general and administrative 8,674 (4,103)(h) 4,571 Engineering, research and development 1,173 (1,032)(h) 141 Impairment of long-lived assets 2,438 (978)(i) 1,460 -------- -------- -------- Total operating expenses 12,285 (6,113) 6,172 -------- -------- -------- Loss from operations (9,139) 3,554 (5,585) Other expense (income): Interest income (88) -- (88) Interest expense 106 -- 106 Other expense (income), net 370 -- 370 -------- -------- -------- Total other expense (income) 388 -- 388 -------- -------- -------- Loss before taxes (9,527) 3,554 (5,973) Income tax expense 15 -- 15 -------- -------- -------- Loss from continuing operations $ (9,542) $ 3,554 $ (5,988) ======== ======== ======== Computation of loss from continuing operations to common shares: Loss from continuing operations $ (9,542) $ 3,554 $ (5,988) Dividends on Redeemable Preferred Stock (364) (375)(c) (739) Accretion of redemption value on Redeemable Preferred Stock (72) -- (72) -------- -------- -------- Loss from continuing operations attributable to common shares $ (9,978) $ 3,179 $ (6,799) ======== ======== ======== Basic and diluted loss from continuing operations per share $ (0.90) $ (0.62) ======== ======== Number of shares used in computing basic and diluted per share amounts 11,029 11,029 ======== ========
7 8 ALPHA MICROSYSTEMS NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Purchase of Additional Exchangeable Redeemable Preferred Stock On November 18, 1999, pursuant to Amendment No. 3 to the Securities Purchase Agreement dated as of August 7, 1998, the holder of the Company's outstanding redeemable preferred stock, Hampshire Equity Partners, II, purchased an additional $5.0 million of exchangeable redeemable preferred stock on essentially the same terms as the currently outstanding redeemable preferred stock that is included in shareholders' equity as of September 30, 1999. The preferred holder also received warrants to purchase an additional 2,971,620 shares of common stock at $2.50 per share. (a) Receipt of gross proceeds of $5.0 million, net of direct transaction costs of $50,000. (b) The preliminary application of net proceeds to redeemable preferred stock and warrants results in the following: Redeemable preferred stock $4,059 Warrants 891 ------ Proceeds, net of direct transaction costs $4,950 ====== (c) To record dividend on redeemable preferred stock to compute net income allocable to common shareholders. 2. Sale of Certain Assets to R.E. Mahmarian Enterprises, LLC On January 31, 2000, Alpha Microsystems (the "Company") completed the sale of substantially all of the assets associated with its Alpha Micro Services Division ("AMSO") and its Alpha Micro Operating System ("AMOS") computer hardware manufacturing division (collectively the "Business") to R.E. Mahmarian Enterprises, LLC ("REM") for consideration of approximately $3.2 million, consisting primarily of liabilities of the Business that were assumed by REM. The Company also received a ten percent contingent interest upon the occurrence of certain liquidity events involving REM following its acquisition of the Business. REM is owned by Richard E. Mahmarian, a current member of the Company's Board of Directors. (d) Assets sold to REM include the following at historical book value: Accounts receivable $1,860 Prepaid expenses and other current assets 549 Property and equipment, net 3,126 IT service contracts, net 637 Software development costs, net 287 Other assets 34 ------ $6,493 ====== (e) Consideration received from REM includes the assumption of the following liabilities of the Business: Deferred revenue $2,932 Accrued compensation 272 Other accrued liabilities 13 Long-term debt 30 ------ $3,247 ====== The deferred revenue amount noted above remains as a liability of the Company on the date of the transaction and will be amortized over the remaining lives of the underlying customer contracts. Prepaid commissions relating to the deferred revenue will be expensed over the remaining lives of the applicable customer contracts. 8 9 In accordance with SEC Staff Accounting Bulletin 81 "Gain Recognition on the Sale of a Business or Operating Assets to a Highly Leveraged Entity", no value has been ascribed to the Company's ten percent contingent interest upon certain liquidity events involving REM following its acquisition of the Business. (f) Direct transaction costs, restructuring charges and rent concessions to buyer are preliminarily estimated to be approximately $440,000. (g) To record the estimated loss on disposition. (h) To eliminate the operating results of the Business. (i) To reverse the charge for impairment of long-lived assets relating to the Business. 3. Per share calculations The aggregate weighted average common share amounts represent the weighted average common shares of the Company. Common stock equivalents have not been included in the calculations as they are anti-dilutive. 9 10 EXHIBIT INDEX Exhibit Number Description ------- ----------- 10.1 -- Asset Purchase Agreement dated as of December 31, 1999, incorporated herein by reference to Exhibit 10.1 of Form 8-K Current Report dated January 14, 2000. 10.2 -- Amendment No. 1 to Asset Purchase Agreement dated January 31, 2000. 99.1 -- Press release dated February 1, 2000. EX-10.2 2 AMENDMENT #1 TO ASSET PURCHASE AGRMT DATED 1/31/00 1 EXHIBIT 10.2 AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT THIS AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT is entered into as of January 31, 2000, by and between ALPHA MICROSYSTEMS, a California corporation doing business as AlphaServ.com (the "Seller") and R.E. MAHMARIAN ENTERPRISES, LLC, a California limited liability company (the "Buyer") (collectively the "Parties"). RECITALS WHEREAS, the Parties entered into an Asset Purchase Agreement dated December 31, 1999 (the "Agreement") and they now desire to amend the Agreement. WHEREAS, unless otherwise defined herein, all capitalized terms have the same meaning as defined in the Agreement. NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree to amend the Agreement as follows: AMENDMENTS 1. Section 2.01 of the Agreement is hereby amended to read in full as follows: The Closing. The closing of the transactions contemplated by this Agreement ("Closing") shall occur on or before January 31, 2000 (or such earlier date as the third party consents are obtained), unless a later date is agreed to by the Buyer and Seller ("Closing Date"). At least two (2) Business Days prior to the Closing Date, Seller shall deliver all of the updated Schedules to Buyer. The Closing shall take place at the offices of Seller, 2722 South Fairview St., Santa Ana, California 92704, commencing at 5:00 p.m. California time (or such earlier time agreed to by the Parties) on the Closing Date. 2. Section 2.02(a)(iv) of the Agreement is hereby amended to read in full as follows: Consents. All of the governmental or third-party notices, consent, waivers and approvals set forth in Schedule 2.02, which are required for the valid transfer of the Acquired Assets. Provided, however, that, unless otherwise agreed to by the Parties, to the extent, if any, that third-party consents to the assignment of Contracts are not delivered at the Closing, the Buyer shall assume and perform the obligations of Seller under such Contracts (which performance by Buyer shall be in the capacity of a subcontractor with respect to Contracts that relate to service or maintenance obligations of the AMSO division of the Business) until such Contracts expire or are otherwise duly terminated, and the failure to deliver consents to the assignments of such Contracts shall not constitute a breach of this Agreement. 2 3. Section 2.02(a)(v) of the Agreement is hereby amended to read in full as follows: Books and Records. All of the Seller's books, records and files relating to the Acquired Assets and the Business; provided, however, that Seller, in its sole discretion, shall retain such books, records and files as Seller deems necessary or appropriate to retain in connection with the preparation of Seller's audited or other periodic financial statements or as otherwise Seller may deem necessary or appropriate for it to retain in connection with its status as a publicly traded corporation (all such retained records collectively the "Retained Records"). Buyer shall have continuing access to any such Retained Records for inspection and copying with any such copying to be at Seller's expense. 4. Section 2.03(e) of the Agreement is hereby amended to read in full as follows: Consents. Unless otherwise agreed to by the Parties the following shall occur: (i) with respect to any Contract the assignment of which is not consented to on the Closing Date and which Contract is not a contract for service or maintenance, Seller shall maintain until the expiration of the term of such Contract, the contractual relationship established therein, to the extent reasonably practicable; (ii) with respect to any Contract the assignment of which is not consented to on the Closing Date and which Contract is a contract for service or maintenance, Seller shall maintain to the extent reasonably practicable, the contractual relationship established therein for a one (1) year period following the Closing Date unless such Contract expires earlier in accordance with its terms or is otherwise terminated other than by Seller; and (iii) to the extent, if any, that third-party consents to the assignment of Contracts are not delivered at the Closing, the Buyer shall assume and perform the obligations of Seller under such Contracts (which performance by Buyer shall be in the capacity of a subcontractor with respect to Contracts that relate to service or maintenance obligations of the AMSO division of the Business) until such Contracts expire or are otherwise duly terminated. IN WITNESS WHEREOF, the Parties have executed this Amendment No. 1 to the Agreement as of the date first above written and all other terms and conditions of the Agreement not herein deleted or amended remain as stated in the original Agreement. SELLER: BUYER: ALPHA MICROSYSTEMS, R.E. MAHMARIAN ENTERPRISES, LLC, a California corporation a California limited liability company By: By: --------------------------------- ---------------------------------- Douglas J. Tullio Richard E. Mahmarian Chief Executive Officer Managing Member 2 EX-99.1 3 PRESS RELEASE DATED FEBRUARY 1, 2000 1 EXHIBIT 99.1 ALPHASERV.COM FINALIZES AGREEMENT TO SELL MANAGED SERVICES AND PROPRIETARY HARDWARE BUSINESS DIVISIONS Company To Focus on Expanding its Internet and Professional IT Services Divisions SANTA ANA, Calif., Feb. 01, 2000 - AlphaServ.com (NasdaqNM: ALMI), announced today that it has completed the transaction with California-based R. E. Mahmarian Enterprises LLC ("REM") for the sale of its managed services division, which includes its proprietary hardware manufacturing group, on substantially the terms described in the company's news release issued on January 4, 2000. As previously announced, REM will have use of the Alpha Microsystems name, in addition to all trade names, logos and trademarks associated with the acquired businesses. "The finalization of this transaction signifies the consummation of our strategic business plan to focus on our two highest potential businesses - the Internet technology division and the IT professional services group," said Douglas J. Tullio, AlphaServ.com's chairman, chief executive officer and president. "We can now concentrate on expanding the sales and marketing efforts of our Internet division, soon to be operating under the name, NQL Solutions Inc.," continued Tullio. "We plan on growing our technical development group within this division as well as identifying and evaluating potential strategic partnership opportunities. Our recent announcement of the NQL Virtual VCR function and the availability of our Network Query Language (NQL) on the wireless Palm Computing platform has been very well received and we plan to take a more aggressive approach in the Internet market." "The completion of this transaction also enables us to now focus on growing our professional services division through the expansion of services to customers primarily in the vertical markets in which we specialize, such as the major accounting firms, financial institutions, hospitals and pharmaceutical companies located in the northeastern U.S." Tullio added, "At the same time, we will continue pursuing strategic acquisitions in this area to further enhance our professional services offering and increase our market share." About AlphaServ.com AlphaServ.com, the d.b.a. name for Alpha Microsystems, is a premier provider of professional services to the IT marketplace. The company's services include Internet and Intranet consulting and networking as well as onsite network support for customers primarily located in the northeastern U.S. For more information, visit the company's Web site at www.alphaserv.com. The Internet division of AlphaServ.com, which will be marketing its technologies under the NQL Solutions name, is the premier provider of intelligent agent technologies to the global marketplace. This division develops and deploys enabling software technologies based on its Network Query Language to partner systems integrators that create information solutions for today's e-businesses, as well as to organizations developing software applications and Internet services. For more information, visit www.NQLsolutions.com or call 888.785.3370. Certain statements in this press release, including statements regarding the company's plans to grow its technical development group, to take a more aggressive approach in the Internet market and to continue pursuing acquisitions to further enhance its professional services offering and increase its market share, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks and uncertainties, including (i) the company's ability to identify and fund acquisitions in the professional services area (ii) the company's ability to fund and retain the necessary personnel to continue technical development in the Internet division (iii) the ability of the company to identify and obtain additional funding for its NQL Solutions subsidiary and other factors. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. # # # -----END PRIVACY-ENHANCED MESSAGE-----