<PAGE>   1
                                                                Exhibit 99
                   PHARMACEUTICAL BUYERS, INC.

                   FINANCIAL STATEMENTS
                   AS OF DECEMBER 31, 1998 AND 1997
                   TOGETHER WITH REPORT OF INDEPENDENT
                    PUBLIC ACCOUNTANTS



<PAGE>   2





                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To the Stockholders of
    Pharmaceutical Buyers, Inc.:

We have audited the accompanying balance sheets of PHARMACEUTICAL BUYERS, INC.
(an Arkansas corporation) as of December 31, 1998 and 1997, and the related
statements of income, stockholders' deficit and cash flows for the years 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 Pharmaceutical Buyers, Inc. as
of December 31, 1998 and 1997, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.



                                                      ARTHUR ANDERSEN LLP


Denver, Colorado, 
   March 5, 1999.


<PAGE>   3
                           PHARMACEUTICAL BUYERS, INC.


                                 BALANCE SHEETS

                           DECEMBER 31, 1998 AND 1997

<TABLE>
<CAPTION>



                                   ASSETS                                                1998              1997
                                   ------                                                ----              ----
<S>                                                                                <C>               <C>    
CURRENT ASSETS:
    Cash and cash equivalents (Note 2)                                             $   1,653,112    $  1,190,409
    Available-for-sale investments (Note 2)                                                    -         506,085
    Receivables (Note 2)                                                               1,239,571       1,290,784
    Income taxes receivable                                                               13,214               -
    Other current assets                                                                  41,460          33,313
                                                                                    ------------     -----------
              Total current assets                                                     2,947,357       3,020,591

PROPERTY AND EQUIPMENT, net of accumulated depreciation
    of $183,803 and $215,842, respectively (Note 2)                                      144,514         161,976

DEFERRED INCOME TAXES (Note 5)                                                            25,148         107,721

OTHER ASSETS, net (Note 2)                                                               468,607         712,254
                                                                                    ------------     -----------

              Total assets                                                         $   3,585,626     $ 4,002,542
                                                                                    ============     ============

                   LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
    Accounts payable                                                               $      41,449     $    20,163
    Accrued expenses                                                                     212,026         243,547
    Deferred revenue (Note 2)                                                            287,752         293,338
    Income taxes payable                                                                       -          31,977
    Current deferred income taxes (Note 5)                                                68,061         293,559
    Current portion of notes payable and other long-term payables (Note 4)             1,125,802         185,290
                                                                                    ------------     ----------- 
              Total current liabilities                                                1,735,090       1,067,874

NOTES PAYABLE AND OTHER LONG-TERM PAYABLES (Note 4)                                    5,216,071       6,985,320
                                                                                    ------------     ----------- 
              Total liabilities                                                        6,951,161       8,053,194
                                                                                    ------------     ----------- 

COMMITMENTS AND CONTINGENCIES (Note 9)

STOCKHOLDERS' DEFICIT (Note 3) :
    Class A common stock, $.01 par value, 500 shares authorized,
       66 shares issued and outstanding                                                        1               1
    Class B common stock, $.01 par value, 500 shares authorized,
       84 shares issued and outstanding                                                        1               1 
    Additional paid-in capital                                                         5,766,681       5,766,681
    Retained earnings                                                                  3,467,782       2,782,665
    Treasury stock                                                                   (12,600,000)    (12,600,000)
                                                                                    ------------     ----------- 
              Total stockholders' deficit                                             (3,365,535)     (4,050,652)
                                                                                    ------------     ----------- 
              Total liabilities and stockholders' deficit                          $   3,585,626    $  4,002,542
                                                                                    ============     ===========
</TABLE>


                 The accompanying notes to financial statements
                 are an integral part of these balance sheets.


<PAGE>   4




                           PHARMACEUTICAL BUYERS, INC.


                              STATEMENTS OF INCOME

                 FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997

<TABLE>
<CAPTION>




                                                                                   1998              1997
                                                                                ----------        ----------
<S>                                                                             <C>               <C>  
REVENUE:
    Administrative fees                                                         $4,884,483        $4,893,479
    Membership fees                                                                702,344           745,462
                                                                                ----------       ----------- 
             Total revenue                                                       5,586,827         5,638,941
                                                                                ----------       ----------- 
EXPENSES:
    Operating                                                                    1,434,088         1,436,791
    Selling, general and administrative                                          1,040,680         1,076,546
    Depreciation and amortization                                                  249,067           289,136
                                                                                ----------       ----------- 
             Total expenses                                                      2,723,835         2,802,473
                                                                                ----------       -----------
Income from operations                                                           2,862,992         2,836,468
                                                                                ----------        ----------  
OTHER INCOME (EXPENSE):
    Interest expense-related parties (Note 4)                                     (732,600)         (826,176)
    Other income, net                                                               61,216           105,285
                                                                                ----------        ----------  
              Total other expense, net                                            (671,384)         (720,891)
                                                                                ----------        ----------  
INCOME BEFORE INCOME TAX PROVISION                                               2,191,608         2,115,577

INCOME TAX PROVISION (Note 5)                                                     (806,491)         (808,914)
                                                                                ----------        ----------  
NET INCOME                                                                      $1,385,117        $1,306,663
                                                                                ==========        ==========
</TABLE>



                 The accompanying notes to financial statements
                    are an integral part of these statements.


<PAGE>   5
                           PHARMACEUTICALBUYERS, INC.

                       STATEMENTS OF STOCKHOLDERS' DEFICIT

                 FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997

<TABLE>
<CAPTION>
                                        Common Stock        Additional                 
                                    -----------------         Paid-In        Retained        Treasury
                                    Shares       Amount       Capital        Earnings          Stock          Total
                                    ------       ------     ----------       ---------        ---------      -------
<S>                                  <C>           <C>        <C>           <C>             <C>              <C>
BALANCES,
    December 31, 1996                  150          $ 2        $5,766,681    $ 2,076,002     $(12,600,000)   $(4,757,315)
       Net income                        -           -             -           1,306,663            -          1,306,663
       Dividends paid                    -           -             -            (600,000)           -           (600,000)
                                      ----          ---        ----------    -----------     ------------    -----------
BALANCES,
    December 31, 1997                  150           2          5,766,681      2,782,665      (12,600,000)    (4,050,652)
       Net income                        -           -             -          1,385,117            -           1,385,117
       Dividends paid                    -           -             -           (700,000)           -            (700,000)
                                      ----          ---        ----------    -----------     ------------    -----------
BALANCES,
    December 31, 1998                  150          $ 2        $5,766,681    $ 3,467,782     $(12,600,000)   $(3,365,535)
                                      ====          ===        ==========    ===========     ============    ===========
</TABLE>


                                      
                The accompanying notes to financial statements
                  are an integral part of these statements.


<PAGE>   6
                           PHARMACEUTICAL BUYERS, INC.


                            STATEMENTS OF CASH FLOWS

                 FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997

<TABLE>
<CAPTION>
                                                                                  1998               1997
                                                                              -----------         ----------
<S>                                                                          <C>                  <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                                               $  1,385,117        $ 1,306,663
                                                                              ------------        -----------
     Adjustments to reconcile net income to net cash
        provided by operating activities-
     Depreciation and amortization                                                 287,925            289,136
     Loss on sales of investments, net                                              15,212                  -
     Loss on disposals of property and equipment                                    11,689                  -
     Deferred income tax benefit                                                  (142,925)           (53,679)
     Other                                                                              -            (20,163)
     Changes in assets and liabilities-
       Decrease (increase) in receivables                                           51,213            (33,545)
       Increase in income taxes receivable                                         (13,214)             -
       Decrease in other assets                                                        651             71,496
       Increase (decrease) in accounts payable                                      21,286            (28,734)
       (Decrease) increase in accrued expenses                                     (31,521)            35,669
       (Decrease) increase in deferred revenue                                      (5,586)            47,429
       Decrease in income taxes payable                                            (31,977)          (634,980)
                                                                              ------------        -----------
         Net cash provided by operating activities                               1,547,870            979,292
                                                                              ------------        -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Additions to property and equipment                                           (47,303)           (71,619)
     Proceeds from sales and maturity of investments                               490,873              -
                                                                              ------------        -----------
Net cash provided by (used in) investing activities                                443,570            (71,619)
                                                                              ------------        -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Dividends paid                                                               (700,000)          (600,000)
     Payments on notes payable and other long-term payables                      ( 828,737)        (1,194,775)
                                                                              ------------        -----------
             Net cash used in financing activities                              (1,528,737)        (1,794,775)
                                                                              ------------        -----------
NET INCREASE (DECREASE) IN CASH AND
     CASH EQUIVALENTS                                                              462,703           (887,102)

CASH AND CASH EQUIVALENTS, at beginning of year                                  1,190,409          2,077,511
                                                                              ------------        ----------- 
CASH AND CASH EQUIVALENTS, at end of year                                     $  1,653,112        $ 1,190,409
                                                                              ============        ===========
SUPPLEMENTAL CASH FLOW INFORMATION:
     Cash paid for interest                                                   $    699,100        $   798,550
                                                                              ------------        -----------
     Cash paid for income taxes                                               $    994,607        $ 1,497,573
                                                                              ============        ===========



</TABLE>

                 The accompanying notes to financial statements
                    are an integral part of these statements.


<PAGE>   7


      
                          PHARMACEUTICAL BUYERS, INC.


                          NOTES TO FINANCIAL STATEMENTS

                            AS OF DECEMBER 31, 1998



(1) ORGANIZATION

Pharmaceutical Buyers, Inc. ("PBI" or the "Company"), is a group purchasing
organization. PBI aggregates buying power for its members in order to negotiate
favorable contracts with pharmaceutical and medical supply manufacturers and
distributors. PBI's members include long-term care providers, home infusion
providers, home medical equipment dealers, medical distributors and other
healthcare providers. The Company's revenue is derived from membership fees paid
by members and administrative fees paid by manufacturers and distributors.

(2) SIGNIFICANT ACCOUNTING POLICIES

    Use of Estimates 

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions.
Such estimates and assumptions affect the reported amounts of assets and 
liabilities, disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and expenses during 
the reporting period. Actual results could differ from those estimates.

     Basis of Accounting

The accompanying financial statements have been prepared using the accrual 
method of accounting.



<PAGE>   8

                                      -2-


       Cash and Cash Equivalents and Available-For-Sale Investments
 
Cash and cash equivalents consist of highly liquid investments with original
maturities of three months or less at the time of purchase and which are not
subject to significant risk from changes in interest rates. Available-for-sale
investments include those investments expected to be held between three and
twelve months. At December 31, 1997, all investments were classified as
available-for-sale and, therefore, were accounted for at fair market value. The
carrying value of all investments approximated fair market value.

       Property and Equipment

Property and equipment is stated at cost. Depreciation and amortization are
charged to operations using primarily accelerated depreciation methods over the
estimated useful lives of the various classes of assets, which vary from 5 to 39
years.

The components of property and equipment as of December 31 are as follows:

<TABLE>
<CAPTION>


                                                                                    1998                  1997
                                                                                  ---------            ---------
       <S>                                                                        <C>                  <C>      
       Office furniture and equipment                                             $ 255,153            $ 316,713
       Software                                                                      27,939               15,880
       Leasehold improvements                                                        45,225               45,225
                                                                                  ---------             --------
                                                                                    328,317              377,818   
       Less: Accumulated depreciation                                              (183,803)            (215,842)
                                                                                  ---------            ---------  
                 Total property and equipment
                                                                                  $ 144,514            $ 161,976
                                                                                  =========            =========
</TABLE>



                                                                                
       Non-Compete Agreements
 
Non-compete agreements have been recorded by the Company as a result of the
Recapitalization discussed in Note 3. Such intangible assets are being amortized
over a four-year period from the date of the Recapitalization (November 30,
1995). At December 31, 1998 and 1997, non-compete agreements of $783,965 are
recorded, net of accumulated amortization of $587,974 and $391,983,
respectively. The non-compete agreements are included in other assets in the
accompanying balance sheets.

       
       Debt Issuance Costs


<PAGE>   9

                                      -3-


Costs associated with the debt transactions discussed in Note 4 are being
amortized over the term of the related debt, which approximates the effective
interest method of amortization. At December 31, 1998 and 1997, deferred debt
issuance costs of $388,584 is recorded, net of accumulated amortization of
$116,570 and $77,712, respectively, and is included in other assets in the
accompanying balance sheets.

                                                                               
       Income Taxes 

The current provision for income taxes represents actual or estimated amounts
payable on tax return filings each year. Deferred tax assets and liabilities are
recorded for the estimated future tax effects of temporary differences between
the tax basis of assets and liabilities and amounts reported in the accompanying
balance sheets. The change in deferred tax assets and liabilities for the period
measures the deferred tax provision or benefit of the period. Effects of changes
in enacted tax laws on deferred tax assets and liabilities are reflected as
adjustments to the tax provision or benefit in the period of enactment.


                                                                                
       Receivables and Deferred Revenue

The Company derives its revenue primarily from two sources. The Company charges
annual membership dues to its members. Membership dues are billed in advance
throughout the year depending on the members anniversary date and are recognized
on a straight-line basis over the membership period. The Company also receives
contract administrative fees from medical supply and pharmaceutical
manufacturers and distributors. These fees are usually paid monthly or
quarterly, in arrears, depending on the supplier. The amounts paid to the
Company by manufacturers and distributors are based on the volume of purchases
by the Company's members.



<PAGE>   10

                                      -4-


                                                                                
At December 31, 1998 and 1997, the Company had recorded approximately $1,238,000
and $1,279,000, respectively, of administrative fees receivable. This amount is
based on Company estimates of the volume of purchases by its members based on
information provided by manufacturers and distributors. Management believes that
all administrative fees receivable are fully collectible. Additionally, as of
December 31, 1998 and 1997, approximately $288,000 and $293,000, respectively,
of membership dues have been received in advance, and are recorded in the
accompanying balance sheets as deferred revenue, to be recognized ratably over
their one year membership period.


                                                                                
       Advertising Costs

Advertising costs are expensed as incurred and are included in selling, general
and administrative expenses in the accompanying statements of income. The
Company does not incur any direct-response advertising costs. Advertising
expense totaled $56,628 and $29,833 in 1998 and 1997, respectively.

                                                                               
      Asset Impairment

The Company reviews its assets for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. For assets which are held and used in operations, the asset would
be considered impaired if the undiscounted future cash flows related to the
asset did not exceed the net book value.


                                                                                
      Comprehensive Income

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income," ("SFAS
130"). SFAS 130 establishes standards for reporting and displaying comprehensive
income and loss and its components in a financial statement that is displayed
with the same prominence as other financial statements. Effective January 1,
1998, the Company adopted SFAS 130. For the years ended December 31, 1998 and
1997, the Company's net income equaled its comprehensive income.


<PAGE>   11

                                      -5-

                                      
      Fair Value Financial Instruments 

Financial instruments include cash and cash equivalents, receivables, accounts
payable, accrued liabilities, and notes payable and other long-term payables.
The carrying amounts for cash and cash equivalents, receivables, accounts
payable and accrued liabilities approximate fair value because of the short
maturity of those instruments. The carrying amount of the notes payable and
other long-term payables approximate fair value as the pricing and terms of
those instruments are indicative of the Company's current credit risk.

      
      Recent Accounting Pronouncements 

In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position ("SOP") No. 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use," which provides guidance on
accounting for the cost of such software. SOP No. 98-1 is effective for
financial statements for fiscal years beginning after December 15, 1998. The
Company does not expect that the adoption of SOP No. 98-1 will have a material
impact on its financial statements.

In June 1998, the FASB issued SFAS No. 133 "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133"). The Company is required to
adopt SFAS No. 133 in the year ended December 31, 2000. SFAS No. 133 establishes
methods of accounting for derivative financial instruments and hedging
activities related to those instruments as well as other hedging activities. To
date, the Company has not entered into any derivative financial instruments or
hedging activities.



      Reclassifications

Certain reclassifications have been made to prior year financial statements in
order to conform to the current year presentation.

<PAGE>   12
                                      -6-


(3) RECAPITALIZATION

On November 30, 1995, the Company completed the Recapitalization. As a result of
this Recapitalization, the Company: (1) sold shares of its Class A common stock
and Class B common stock for $6,000,000, (2) repurchased shares of its Class A
common stock for $12,600,000, and (3) borrowed $6,450,000 through Senior Secured
Notes and $1,300,000 through Senior Secured Convertible Notes from Massachusetts
Mutual Life Insurance Company and affiliates ("Mass Mutual"), due in November
2005 (Note 4). Also, as part of the Agreement, the Company entered into
non-compete agreements with the two original stockholders to be paid over a
period ending October 1999 (Note 4).

                                                                                
(4) NOTES PAYABLE AND OTHER LONG-TERM PAYABLES 

Notes payable and other long-term payables at December 31 are as follows:

<TABLE>
<CAPTION>
                                                                                               1998               1997
                                                                                               ----               ----
     <S>                                                                                   <C>                 <C>
     Senior Secured Notes, payable to a stockholder (Mass Mutual);
         collateralized by substantially all assets of the Company; interest
         payable semi-annually at 10.5%; annual principal payments commencing
         November 30, 1999, of $921,429 until paid in full by November 2005;
         available for prepayment subject to a maximum annual and aggregate
         prepayment amount, as defined; certain amounts were prepaid in 1998 and 1997.      $ 4,837,500        $5,450,000


     Senior Secured Convertible Notes, payable to a stockholder (Mass Mutual);
         collateralized by substantially all assets of the Company; interest
         payable semi-annually at 10.5%; due November 30, 2005; available for
         prepayment subject to a maximum annual and aggregate prepayment amount,
         as defined; convertible into 26 Class A common shares at $50,000 per share.          1,300,000         1,300,000

     Non-compete agreements payable; noninterest bearing
         installments (discounted using 10.5% rate); due in semi-annual
         installments through October 1999.                                                     204,373           420,610
                                                                                            -----------        ----------
                                                                                              6,341,873         7,170,610
     Less:  Current portion                                                                  (1,125,802)         (185,290)
                                                                                            -----------        ----------
                                                                                            $ 5,216,071        $6,985,320
                                                                                            ===========        ==========
</TABLE>



<PAGE>   13
                                      -7-


Principal repayments of notes payable and other long-term payables at December
31, 1998, are summarized as follows:

<TABLE>
                  <S>                                                                     <C>   
                  1999                                                                     $1,125,802
                  2000                                                                        921,429
                  2001                                                                        921,429
                  2002                                                                        921,429
                  2003                                                                        921,429
                  Thereafter                                                                1,530,355
                                                                                           ----------
                                                                                           $6,341,873
                                                                                           ==========
</TABLE>


The Company is required under the terms of its notes payable to comply with
certain financial and nonfinancial covenants. At December 31, 1998 and 1997, the
Company was in compliance with all such covenants.

(5)    INCOME TAXES

The income tax provision consists of the following for the years ended December
31:


<TABLE>
<CAPTION>


                                                                                       1998              1997
                                                                                  -------------      ------------

                                                                            
                  <S>                                                              <C>                <C>   
                  Current:
                     Federal                                                        $ 812,987          $735,661
                     State                                                            136,429           126,932
                                                                                     --------           -------
                                                                                      949,416           862,593
                                                                                     --------           -------
                  Deferred:
                     Federal                                                         (122,487)          (50,824)
                     State                                                            (20,438)           (2,855)
                                                                                     --------           -------
                                                                                     (142,925)          (53,679)
                                                                                     --------           -------
                  Income tax provision                                              $ 806,491          $808,914
                                                                                     ========           =======
</TABLE>





<PAGE>   14
                                      -8-


Through December 31, 1997, the Company prepared its tax returns under the cash
basis. Effective January 1, 1998, the Company changed its basis for tax
reporting purposes to the accrual method. As a result, the Company is required
to recognize approximately $730,000 into taxable income over the next four
years, relating mainly to administrative fees receivable.

The significant components of the Company's net deferred tax liability at
December 31 are as follows:

<TABLE>
<CAPTION>
                                                                                     1998                1997
                                                                                   --------            --------
                   <S>                                                           <C>                  <C>   
                  Current deferred tax assets (liabilities):
                     Administrative fees receivable                              $   -                $(477,155)
                     Accounts payable                                                -                    7,521
                     Accruals                                                        -                   85,993
                     Deferred revenue                                                -                  109,415
                     Other                                                           -                  (19,333)
                     Amortization of change to accrual
                        basis for tax                                              (68,061)                -
                                                                                 ---------            ---------
                           Net current deferred tax liabilities                  $ (68,061)           $(293,559)
                                                                                 =========            =========

                  Long-term deferred tax assets (liabilities):
                     Amortization of non-compete agreements                        160,831              107,721
                     Amortization of change to accrual
                         basis for tax                                            (135,683)               -
                                                                                 ---------            ---------
                           Net long-term deferred tax assets                     $  25,148            $ 107,721
                                                                                 =========            =========
</TABLE>


The following table reconciles the federal statutory income tax rate to the
Company's effective income tax rate:

<TABLE>


                                                                                 1998            1997
                                                                               --------        --------
         <S>                                                                   <C>            <C>  
         Provision for income taxes at federal statutory rate                    34.0%          34.0%
         State income taxes, net of federal benefit                               3.8            3.6
         Nondeductible expenses                                                   0.7            0.7
         Nontaxable investment income                                            (0.5)          (0.5)
         Other                                                                   (1.2)           0.4
                                                                                 ----           ----
         Effective income tax rate                                               36.8%          38.2%
                                                                                 ====           ====
</TABLE>



<PAGE>   15

                                      -9-


(6)    RELATED PARTY TRANSACTIONS

The Company leases certain office space from a stockholder. The Company's
management believes that the transaction is arms length and reflects market
rates for similar space. Payments made for this lease were $91,485 and $90,231
for the years ended December 31, 1998 and 1997, respectively. The lease is
noncancellable and expires May 31, 2000.

During November 1995, in connection with the Recapitalization discussed in Note
3, the Company entered into a consulting agreement with one of the Officers for
two years with annual payments of $150,000. This agreement expired on November
30, 1997.

(7)    EMPLOYEE BENEFIT PLANS

       Deferred Contribution Plan

In August 1996, the Company adopted a 401(k) plan for its employees, effective
January 1, 1996. Under this plan, employees, who are at least 21 years old and
have completed one year of service, as defined, are eligible to participate in
the plan. The Company may contribute a discretionary matching contribution equal
to a percentage of each employee's contribution plus an additional discretionary
amount as determined by the Company. The Company matched 100% of the employees'
contributions totaling approximately $44,000 and $45,000 during 1998 and 1997,
respectively. No additional discretionary payments were made.

       Defined Benefit Plan

In August 1996, the Company terminated its defined benefit pension plan, and in
June 1997, all of the plan's obligations were settled. The accounting effect of
terminating the plan was not significant. Prior to its termination, the terms of
the plan stated that in order to be eligible for benefits under the plan, the
employee must be 21 years of age or older, have completed 20 months of service,
and recorded 1,000 hours of service during each year. The plan was subject to
the provisions of the Employee Retirement Income Security Act of 1974. The
Company made contributions to the plan in accordance with actuarial projections,
subject to the requirements of the Internal Revenue Code, as amended.

<PAGE>   16

                                      -10-


(8)    CONCENTRATION OF CREDIT RISK

The Company earns administrative fees primarily from large pharmaceutical and
medical supply manufacturers and distributors within the United States.
Historically, the Company has not experienced any significant administrative
fees receivable write-offs. Management believes all administrative fees
receivable are fully collectable.

PBI's significant customers which individually comprised more than 10% of total
administrative fees for the years ended December 31, 1998 and 1997 are as
follows:

<TABLE>
<CAPTION>

                                                                               1998               1997
                                                                                ----               ----

                                                                         
                  <S>                                                          <C>              <C>
                  Customer A                                                     28%              26%
                  Customer B                                                     13               10
                  Customer C                                                     10                5


Receivables from PBI's significant customers which comprised greater than 10% 
of total administrative fee receivables are as follows:

<CAPTION>
                                                                               1998               1997
                                                                               ----               ----


                  <S>                                                          <C>              <C>
                  Customer A                                                    27%                27%
                  Customer B                                                     7                 29
                  Customer C                                                    10                 15
</TABLE>

  

The Company believes that these customers will continue to represent a
substantial portion of the Company's total revenue in the future. However,
should any of these customers terminate their relationship with the Company, the
results of operations would be materially affected.



<PAGE>   17

                                      -11-


(9)    COMMITMENTS AND CONTINGENCIES

The Company leases office space and other equipment through noncancellable
operating leases. Certain of the leases are with related parties (Note 6).
Rental expense under operating leases was approximately $93,000 and $115,000 for
the years ended December 31, 1998 and 1997, respectively.

Minimum rental payments under these leases with initial or remaining terms of
one year or more at December 31, 1998 are as follows:

<TABLE>


              <S>                                      <C>                                     
              1999                                    $ 95,681
              2000                                      42,092
              2001                                       2,930
              2002                                       2,930
              2003                                         977
                                                       -------
                                                      $144,610
                                                       =======

</TABLE>


The Company is currently a defendant in a lawsuit which arose in the normal
course of business, whereby the Company, a pharmaceutical manufacturer and other
group purchasing organizations have been accused of damaging certain retail
pharmacies by not allowing them memberships in buying organizations such as the
Company, which would allow them to receive reduced prices on pharmaceuticals.
Management believes that the outcome of this matter will not have a material
impact on the financial position of the Company or its results of operations.

(10)   SUBSEQUENT EVENTS

In February 1999, the Company's board of directors authorized and declared a
$700,000 cash dividend to the shareholders of record on that date. The dividend
was paid on February 25, 1999.



<PAGE>   18
                                      -12-

In January 1999, the Company purchased a 5% voting equity interest in Medical
Equipment Distributors, Inc. ("Med Group") at net book value for approximately
$103,000. Med Group is a group purchasing organization whose members include
rehabilitation providers and home medical equipment dealers. Until July 2000,
the Company has a right of first refusal to participate in any future equity
offerings of Med Group or any event whereby a Med Group stockholder elects to
sell or transfer more than 50% of the outstanding shares of Med Group to a third
party.