<PAGE>


                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:  March 31, 1999

Commission file number:  33-24464-NY

                          IMTEK OFFICE SOLUTIONS, INC.
           ----------------------------------------------------------
             (Exact name of registrant as specified in its charter)

         DELAWARE                                     Tax ID #11-2958856
--------------------------------------------------------------------------------
(State or other jurisdiction                                  (IRS Employer
         of incorporation)                            Identifications No)

            8003 Corporate Drive, Suite C, Baltimore, Maryland 21236
           ----------------------------------------------------------
                    (Address of principal executive offices)

Registrant's telephone number, including area code                (410) 931-2054
                                                                  --------------

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

 -------------------------------------------------------------------------------
                          Yes       No   X  


State the number of shares outstanding of each of the issuer's classes of common
equity as the latest practicable date: 7,538,361 shares as of May 10, 1999.


<PAGE>


                                      INDEX
                          IMTEK OFFICE SOLUTIONS, INC.

<TABLE>
<CAPTION>
<S>               <C>
PART I.           Financial Information

     Item 1.      Financial Statements

                  Consolidated Balance Sheets - March 31, 1999
                  (unaudited) and June 30, 1998 (audited)..........................................................  3

                  Consolidated Statements of Income - Three months
                  and nine months ended March 31, 1999 and 1998....................................................  5

                  Consolidated Statement of Shareholders Equity
                  for the nine months ended March 31, 1999.........................................................  6

                  Consolidated Statements of Cash Flows -
                  nine months ended March 31, 1999 and 1998........................................................  7

                  Notes to Consolidated Financial Statements.......................................................  8

     Item 2       Management's Discussion and Analysis of Results of
                  Operations and Financial Condition and Liquidity................................................. 11

PART II.          Other Information

     Item 1.      Legal Proceedings................................................................................ 18

     Item 6.      Exhibits and reports on Form 8-K................................................................. 18

                  Signature........................................................................................ 19

                  Financial Data Schedule
</TABLE>



                                      -2-
<PAGE>


                          IMTEK OFFICE SOLUTIONS, INC.
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

<TABLE>
<CAPTION>

                                                                   March 31, 1999                   June 30, 1998
                                                                   --------------                   -------------
                                                                     (unaudited)                      (audited)
<S>                                                                <C>                              <C>      
CURRENT ASSETS                                       
Cash                                                                   $   332,571                  $ 2,949,168
Escrow deposit                                                           2,544,350                    5,054,220
Accounts receivable (net)                                                4,442,445                    1,390,302
Other receivables                                                          249,490                      151,235
Inventory                                                                3,464,710                    1,641,309
Deferred tax assets                                                         82,124                       82,124
Prepaid expenses and other current assets                                1,083,380                      783,480
                                                                   ---------------                  -----------
Total current assets                                                    12,199,070                   12,051,838

PROPERTY AND EQUIPMENT -
at cost,less accumulated depreciation and amortization                   3,364,242                    1,880,888

OTHER NONCURRENT ASSETS                                                    335,988                      497,516

DEFERRED FINANCING COSTS, less accumulated amortization                    326,644                      361,941

OTHER INTANGIBLE ASSETS, less accumlated amortization                    6,025,894                    1,732,574
                                                                   ---------------                  -----------
                                                                       $22,251,838                  $16,524,757
                                                                   ---------------                  -----------
                                                                   ---------------                  -----------
</TABLE>


                 See notes to consolidated financial statements

                                      -3-

<PAGE>

                          IMTEK OFFICE SOLUTIONS, INC.
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>


                                                                           March 31, 1999             June 30, 1998
                                                                            (unaudited)                 (audited)
                                                                           -------------              -----------
<S>                                                                        <C>                        <C>    
CURRENT LIABILITIES
Note payable - bank                                                          $ 2,224,876              $        --
Current maturities of notes payable                                              590,000                  560,055
Current maturities of obligations under capital lease                            250,000                  234,081
Accounts payable and accrued expenses                                          3,267,317                1,629,979
Accounts payable - related party                                                 427,646                  795,205
Customer escrow accounts                                                       2,544,350                5,054,220
Deferred revenue                                                               1,412,185                  168,153
Income taxes payable                                                             579,306                  434,804
                                                                           -------------              -----------
Total current liabilities                                                     11,295,680                8,876,497

NOTES PAYABLE, net of current maturities and original issue                                                              
discount                                                                       6,019,471                3,502,506

OBLIGATIONS UNDER CAPITAL LEASE, net of current maturities                       648,371                  988,578

DEFERRED TAX LIABILITY                                                            65,490                   65,490

PUT OPTION OBLIGATION                                                            285,340                  335,695

MINORITY INTEREST                                                                143,424                       --

STOCKHOLDERS' EQUITY
Preferred stock, $100 par value; authorized 75,000 shares;                                                               
liquidation preference of $674,000; issued and outstanding, 8,370                                                        
shares (6,740 shares at June 30, 1998)                                           837,000                  674,000
Common stock, $.000001 par value; authorized 250,000,000 shares;                                                         
issued and outstanding 7,532366 shares in 1998 and 5,000,000                                                             
shares in 1997                                                                         8                        8
Additional paid-in-capital                                                     1,408,703                1,420,548
Retained earnings                                                              1,548,351                  661,435
                                                                           -------------              -----------
                                                                               3,794,062                2,755,991
                                                                           -------------              -----------
                                                                             $22,251,838              $16,524,757
                                                                           -------------              -----------
                                                                           -------------              -----------
</TABLE>


                                      -4-

<PAGE>

                                            IMTEK OFFICE SOLUTIONS, INC.
                                         CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>

                                               QUARTER ENDED                              NINE MONTHS ENDED
                                               -------------                              -----------------
                                    March 31, 1999        March 31, 1998        March 31, 1999        March 31, 1998
                                     (unaudited)           (unaudited)           (unaudited)            (unaudited)
                                  --------------        --------------       ---------------          -------------
<S>                              <C>                   <C>                   <C>                     <C>       
REVENUES
    Equipment & Supplies            $  6,479,657            $2,026,529           $18,014,189            $ 4,867,602
    Merchant Banking                  11,437,390             7,912,213            35,535,143             12,889,107
    Leasing - Net                         41,343                    --                41,343                     --
                                  --------------        --------------       ---------------          -------------
                                      17,958,390             9,938,742            53,590,675             17,756,709
COST OF REVENUES
    Equipment & Supplies               4,391,188               993,003            12,166,856              2,884,247
    Merchant Banking                   8,698,843             6,844,162            26,297,517             10,950,806
                                  --------------        --------------       ---------------          -------------
                                      13,090,031             7,837,165            38,464,373             13,835,053

GROSS PROFIT                           4,868,359             2,101,577            15,126,302              3,921,656

SELLING AND GENERAL EXPENSE            4,559,926             1,488,183            12,845,616              2,778,919
                                  --------------        --------------       ---------------          -------------

OPERATING INCOME                         308,433               613,394             2,280,686              1,142,737

INTEREST EXPENSE                         303,963                21,073               742,255                 21,073
MISCELLANEOUS INCOME                     (35,854)                   --               (85,309)                    --
                                  --------------        --------------       ---------------          -------------

INCOME BEFORE INCOME TAXES AND                                                                                           
  MINORITY INTEREST                       40,324               592,321             1,623,740              1,121,664

MINORITY INTEREST                         29,745                    --               143,424                     --

INCOME TAXES                               4,000               242,850               593,400                462,967
                                  --------------        --------------       ---------------          -------------

NET INCOME                                 6,579               349,471               866,916                658,697
Preferred Stock Dividends                 18,832                    --                52,829                     --
                                  --------------        --------------       ---------------          -------------
Income available to common                                                                                               
Stockholders                        $    (12,253)           $  349,471               834,087            $   658,697
                                  --------------        --------------       ---------------          -------------
                                  --------------        --------------       ---------------          -------------

NET INCOME PER SHARE
                                              --                  $.05                   .11                    .10
                                  --------------        --------------       ---------------          -------------
                                  --------------        --------------       ---------------          -------------
Diluted                                       --                  $.05                   .11                    .10
                                  --------------        --------------       ---------------          -------------
                                  --------------        --------------       ---------------          -------------

WEIGHTED AVG. PER SHARE                7,532,366             7,538,361             7,532,366              6,903,746
                                  --------------        --------------       ---------------          -------------
                                  --------------        --------------       ---------------          -------------
Diluted                                7,646,286             7,538,361             7,633,136              6,903,746
                                  --------------        --------------       ---------------          -------------
                                  --------------        --------------       ---------------          -------------
</TABLE>

                                      -5-

<PAGE>

                          IMTEK OFFICE SOLUTIONS, INC.
                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
               For the period from June 30, 1998 to March 31, 1999

<TABLE>
<CAPTION>
-------------------- ---------------------------- ----------------------------- ------------- ------------- -------------
                           Preferred Stock                Common Stock
-------------------- ---------------------------- ----------------------------- ------------- ------------- -------------
                                                                                  Paid in       Retained    Stockholders
                        Shares        Amount         Shares         Amount        Capital       Earnings       Equity
-------------------- ------------- -------------- -------------- -------------- ------------- ------------- -------------
<S>                  <C>           <C>            <C>            <C>            <C>           <C>           <C>       
Balance -                                                                                                                
June 30, 1998              6,740       $674,000      7,532,361             $8    $1,420,548    $  661,435    $2,755,991
-------------------- ------------- -------------- -------------- -------------- ------------- ------------- -------------
-------------------- ------------- -------------- -------------- -------------- ------------- ------------- -------------
Issuance of                                                                                                              
Preferred Stock            1,630        163,000             --             --       (11,845)           --       151,155
-------------------- ------------- -------------- -------------- -------------- ------------- ------------- -------------
-------------------- ------------- -------------- -------------- -------------- ------------- ------------- -------------
Net Income for the                                                                                                       
period                        --             --             --             --            --       886,916       886,916
-------------------- ------------- -------------- -------------- -------------- ------------- ------------- -------------
-------------------- ------------- -------------- -------------- -------------- ------------- ------------- -------------
Balance -                                                                                                                
March 31, 1999             8,370       $837,000      7,532,361             $8    $1,408,703    $1,548,351    $3,794,062
-------------------- ------------- -------------- -------------- -------------- ------------- ------------- -------------
</TABLE>


                 See notes to consolidated financial statements.


                                      -6-

<PAGE>


                          IMTEK OFFICE SOLUTIONS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOW
                       For the Nine Months Ended March 31,

<TABLE>

                                                                                      1999                  1998
                                                                                   (Unaudited)           (Unaudited)

<S>                                                                                <C>                  <C>     
CASH FLOWS FROM OPERATING ACTIVITIES                                               $    886,916          $   658,697
    Net income
    Adjustments to reconcile net income to net cash
    provided by operating activities
    Depreciation and amortization                                                       523,297               49,269
    Minority interest                                                                   143,424                   --
    Amortization of put option obligation                                               (50,355)                  --
    Changes in assets and liabilities
    Accounts and other receivables                                                   (3,150,398)          (1,633,311)
    Inventory                                                                        (1,823,401)            (129,426)
    Accounts payable and accrued expenses                                             1,269,779            1,016,567
    Deferred revenue                                                                  1,244,032               51,212
    Prepaid expenses                                                                   (299,900)            (373,485)
    Other assets                                                                        161,528              (30,344)
    Income taxes payable                                                                144,502              554,729
                                                                                ---------------          ------------

         Net cash (used) provided by operating activities                              (950,576)             163,908

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase of property and equipment                                               (1,714,354)          (1,624,461)
    Acquisition and intangibles                                                      (4,550,320)            (255,140)
                                                                                ---------------          ------------

         Net cash used in investing activities                                       (6,264,674)          (1,879,601)

CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from notes payable                                                       5,182,839            2,177,916
    Payments on notes payable                                                          (735,341)                  --
    Issuance of preferred Stock - net                                                   151,155                   --
    Change in paid in capital                                                                --              (29,112)
                                                                                ---------------          ------------

         Net cash provided by financing activities                                    4,598,653            2,148,804

         Net (decrease) increase in cash                                             (2,616,597)             433,111

Cash at beginning of period                                                           2,949,168               11,349
                                                                                ---------------          ------------
Cash at end of period                                                              $    332,571          $   444,460
                                                                                ---------------          ------------
                                                                                ---------------          ------------

DISCLOSURE OF CASH FLOW SUPPLEMENTAL INFORMATION

Cash paid for interest                                                             $    742,255          $    21,073
                                                                                ---------------          ------------
                                                                                ---------------          ------------
Cash paid for taxes                                                                $    440,100          $    20,400
                                                                                ---------------          ------------
                                                                                ---------------          ------------
</TABLE>

                 See notes to consolidated financial statements


                                      -7-


<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                March 31, 1999

                          IMTEK OFFICE SOLUTIONS, INC.


NOTE A - SUMMARY OF ACCOUNTING POLICIES

A summary of the significant accounting policies consistently applied in the
preparation of the accompanying financial statement follows:

NATURE OF BUSINESS

         The Company is a regional supplier of equipment products and services
         used by offices to manage information and documents. The Company also
         provides a variety of specialty finance and merchant banking services,
         primarily the purchase and sale of viaticated life insurance policies.
         The Company conducts business in the Baltimore, Maryland, Washington,
         DC, Richmond and Tidewater, Virginia, Atlanta, Georgia and
         Philadelphia, Pennsylvania markets and grants credit to its customers
         in those regions.

         In July, 1998 the Company's Board of Directors and shareholders 
         approved a change in the fiscal-year-end from September 30th to 
         June 30th of each year, effective June 30, 1998.

PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION

         The accompanying consolidated financial statements as of March 31,
         1999, reflect the accounts of the Company, together with the accounts
         of Imtek Corporation, Imtek Services Corporation, Imtek Acquisition
         Corporation and Imtek Capital Corp., all wholly-owned subsidiaries of
         the Company. All inter-company transactions have been eliminated in
         consolidation.

         The accompanying consolidated balance sheets as of March 31, 1999 and
         June 30, 1998, consolidated statements of earnings for the quarter 
         ended and nine months ended March 31, 1999, the statement of 
         shareholders' equity for the period ended March 31, 1999, and the 
         consolidated statement of cash flows for the nine months ended 
         March 31, 1999 and 1998 are unaudited. In the opinion of management, 
         all adjustments, consisting of normal recurring accruals, necessary 
         for a fair presentation of the results of operations for the interim 
         periods presented have been reflected in the accompanying consolidated
         financial statements. The result of operations for interim periods 
         presented herein are not necessarily indicative of the results which 
         may be expected for the entire fiscal year.


                                      -8-

<PAGE>

NOTE B - RESTRICTED CASH AND CUSTOMER ESCROW ACCOUNTS

The company's merchant banking subsidiary attempts to pre-fund certain 
viaticated life insurance purchases with funds received from third party
purchasers. Funds are collected in an escrow account and released to the Company
upon the sale of the policies.

NOTE C - Dependence on Major Vendor

The Company's merchant banking segment purchased viaticated insurance 
policies primarily from one broker. For the quarter ended March 31, 1999, the 
Company purchased $9,846,097 in policies from this broker ($22,016,937 for 
the nine months ended March 31, 1999), representing 86% of the policies 
purchased by the Company during the quarter (62% for the nine months ended 
March 31, 1999).

NOTE D - Segment information

<TABLE>
<CAPTION>
----------------------------------- --------------------- --------------------- -------------------- --------------------
                                         Qtr ended             Qtr ended            Nine month           Nine Months
                                       March 31, '99         March 31, '98         March 31, '99        March 31, '98
----------------------------------- --------------------- --------------------- -------------------- --------------------
<S>                                 <C>                   <C>                   <C>                  <C>       
Sales to unaffiliated customers
----------------------------------- --------------------- --------------------- -------------------- --------------------
Office Solutions                        $ 6,479,657           $ 2,026,529          $18,014,189         $  4,867,602
----------------------------------- --------------------- --------------------- -------------------- --------------------
Merchant Banking                         11,437,390             7,912,213           35,535,143           12,889,107
----------------------------------- --------------------- --------------------- -------------------- --------------------
Specialty Financial Services                 41,343                    --               41,343
                                    --------------------- --------------------- -------------------- --------------------
----------------------------------- --------------------- --------------------- -------------------- --------------------
                                        $17,958,390           $ 9,938,742          $53,590,675         $ 17,756,709
                                    --------------------- --------------------- -------------------- --------------------
----------------------------------- --------------------- --------------------- -------------------- --------------------
Operating Income (Loss)
----------------------------------- --------------------- --------------------- -------------------- --------------------
Office Solutions                        $  (421,210)          $  (214,413)         $  (724,466)        $   (168,054)
----------------------------------- --------------------- --------------------- -------------------- --------------------
Merchant Banking                            755,529               827,807            3,031,038            1,310,791
----------------------------------- --------------------- --------------------- -------------------- --------------------
Specialty Financial Services                (25,886)                   --              (25,886)                  --
                                    --------------------- --------------------- -------------------- --------------------
----------------------------------- --------------------- --------------------- -------------------- --------------------
                                        $   308,433           $   613,394          $ 2,280,686         $  1,142,737
                                    --------------------- --------------------- -------------------- --------------------
----------------------------------- --------------------- --------------------- -------------------- --------------------
Assets
----------------------------------- --------------------- --------------------- -------------------- --------------------
Office Solutions                        $17,034,337           $ 2,842,249          $        --         $         --
----------------------------------- --------------------- --------------------- -------------------- --------------------
Merchant Banking                          5,084,921             5,077,467                   --                   --
----------------------------------- --------------------- --------------------- -------------------- --------------------
Specialty Financial Services                132,580                    --                   --                   --
                                    --------------------- --------------------- -------------------- --------------------
----------------------------------- --------------------- --------------------- -------------------- --------------------
                                        $22,251,838            $7,919,716          $        --         $         --
                                    --------------------- --------------------- -------------------- --------------------
----------------------------------- --------------------- --------------------- -------------------- --------------------
Capital Expenditures
----------------------------------- --------------------- --------------------- -------------------- --------------------
Office Solutions                        $   117,560            $1,318,306          $ 1,616,788         $  1,419,859
----------------------------------- --------------------- --------------------- -------------------- --------------------
Merchant Banking                             95,981                    --               97,566              204,602
----------------------------------- --------------------- --------------------- -------------------- --------------------
Specialty Financial Services                     --                    --                   --                   --
                                    --------------------- --------------------- -------------------- --------------------
----------------------------------- --------------------- --------------------- -------------------- --------------------
                                        $   213,541           $ 1,318,306          $ 1,714,354         $  1,624,461
                                    --------------------- --------------------- -------------------- --------------------
----------------------------------- --------------------- --------------------- -------------------- --------------------
Depreciation and Amount
----------------------------------- --------------------- --------------------- -------------------- --------------------
Office Solutions                        $   192,000           $    28,806          $   496,633         $     34,021
----------------------------------- --------------------- --------------------- -------------------- --------------------
Merchant Banking                             12,000                 8,106               26,664               15,248
----------------------------------- --------------------- --------------------- -------------------- --------------------
Specialty Financing Services                     --                    --                   --                   --
                                    --------------------- --------------------- -------------------- --------------------
----------------------------------- --------------------- --------------------- -------------------- --------------------
                                        $   204,000           $    36,912          $   523,297         $     49,269
                                    --------------------- --------------------- -------------------- --------------------
----------------------------------- --------------------- --------------------- -------------------- --------------------
</TABLE>

                                      -9-

<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.

BACKGROUND

         Imtek Office Solutions, Inc., (the "Company"), as previously 
reported, effectively commenced operations on April 22, 1997. Prior to April 
22, 1997, the Company, and its predecessor, was a development stage company 
with no significant operations. The Company, for the fiscal year ended as of 
September 30, 1997, was primarily engaged in the wholesale and retail sale of 
copiers and facsimile equipment, servicing of office equipment, provision of 
commercial printing and duplicating services and, to a lesser extent, the 
retail sale of office supplies. Effective October 1, 1997, the Company 
commenced operation of its merchant banking business, primarily through 
viatical settlements (the purchase and resale of life insurance policies of 
terminally ill individuals). Additionally, during the third quarter ending 
March 31, 1999, the Company created a third segment. This third segment, 
Specialty Finance, was formerly a component of the Merchant Banking segment, 
with no significant operations. The Company operates principally in the 
Mid-Atlantic region, consisting of Baltimore, Maryland, Philadelphia, 
Pennsylvania, Washington, D.C., Richmond, Virginia, the Tidewater area of 
Southeastern Virginia and the metropolitan Atlanta, Georgia market.

         The Company changed its fiscal year end from September 30 to June 30,
effective June 30, 1998 as previously reported on form 8-K of July 30, 1998,
which is incorporated by reference. Since the Company was in a start-up mode
during 1997 with limited activity during fiscal year ended September 30, 1997 (a
period of five months), and the transition period ended as of June 30, 1998 (a
period of 9 months), comparisons to prior year's results may not provide
meaningful analysis.

         In prior periods, the Company effectively had two operating 
segments. The first segment, representing the historical core business of the 
Company, is the sale at retail and wholesale of office products, copier sales 
and service, and commercial printing and copying services. This segment is 
referred to as Office Solutions. The Office Solution segment, the Company's 
original core component, continues the process of growth through acquisition. 
The strategy consists principally of acquiring smaller office equipment 
dealers located within specific geographic markets. The segment anticipates 
acquiring additional entities which may provide opportunities for expansion 
or enhancement of current products and services. Management can provide no 
assurance that such acquisitions, if any, would provide such beneficial 
services, products, or markets, however. Management continues in the belief 
that adequate acquisition opportunities exist. Management anticipates that 
acquisitions, if any, would be funded principally from issuance of capital 
stock, external financing sources, and to lesser extent, internally generated 
cash flow. The Company's future success with acquisitions generally depends 
upon the timing and size of the acquisition, the ability to integrate the 
acquired company into the Company's operation with a minimum of integration 
costs, and the Company's ability to maintain and enhance its infrastructure 
to accommodate the continued growth.

         The second segment is referred to as Merchant Banking and consists 
principally of viatical settlements. The second segment is referred to as 
Merchant Banking. The Merchant Banking segment consists predominantly of the 
provision of viatical settlement services, including the purchase and resale 
of insurance policies of terminally ill individuals. This segment's business 
consists of two distinct functions. The first is the purchase and resale of 
policies. The second is the provision of document management and production 
services for trustees engaged in the viatical settlement business. Currently, 
the Company is exploring the modification of its business conduct such that 
the purchase and subsequent sale of viatications may be discontinued. The 
segment would likely continue the brokering of viatications, as well as the 
document management services. In the event that management adopts this 
change, it is expected that gross revenue would decrease significantly. 
Management does not however, expect to experience a significant decline in 
the segments' operating income as a result of the contemplated modification. 
The Merchant Banking segment effectively commenced operations during the 
second quarter of the prior year and thus comparisons to the prior year may 
not provide meaningful analysis. Presently, 

                                      -10-

<PAGE>

the Merchant Banking segment markets its product principally through a 
network of brokers, primarily insurance agents, which the segment has 
established over the past year. The Company also is currently investigating 
several marketing alternatives, including offering viaticated insurance 
policies as a "securitized" product. If the Company is successful in offering 
these additional "securitized" products, management believes that the segment 
has the potential to experience a substantial increase in volume. While there 
can be no assurance that this substantial increase in volume can be achieved, 
offering these additional securitized products may allow licensed security 
brokers the opportunity to begin selling this product, thus expanding the 
Segment's sales network. Management intends to invest up to $150,000 during 
the remainder of the current year in designing these products and introducing 
them into the market.

         The Company believes, however, that its viatical settlement 
contracts are not securities subject to regulation under current state 
securities laws. The Company is aware, however, that several states are 
attempting to regulate, or to determine if the viatical settlement business 
or parts of the viatical settlement process should be regulated under state 
securities or "blue sky" laws or such states insurance laws or regulations.

         The Company presently believes that the conduct of its viatical 
business may not be subject to regulation under state securities or insurance 
laws or regulations, as such laws and regulations are now written. The 
Company can provide no assurance, however, that a state regulatory body 
looking into this matter in the future will agree with the Company's position 
in this regard or that if challenged, the Company will prevail in its 
position. Regulation by the states could materially increase regulatory 
compliance costs, disrupt business and potentially have a material adverse 
effect on the Company's viatical business. Even if the Company is correct in 
its position that the viatical business is not currently regulated under 
state securities or insurance laws and regulations, there can be no assurance 
that such laws will not be amended by the states to regulate the Company's 
viatical business in future.

         The Company has received inquiries from several states securities
regulators requesting information to assist them in determining whether
viaticated insurance policies or parts of the viatical settlement process should
be, or is subject to be, regulated under various state securities and insurance
laws and regulations.

         Moreover, the Kansas Securities Commissioner has issued a cease and 
desist order finding that the Company's viatical settlement contracts are 
securities within the meaning of the Kansas Securities Act. The Company has 
ceased all offers and sales of all viatical settlement contracts within the 
State of Kansas. The Company believes that the determination made by the 
Securities Commissioner is incorrect and plans to request a hearing to 
contest the determination. There have been less than 10 purchases of viatical 
settlement contracts by Kansas residents, aggregating approximately $193,000. 
If the Company is unsuccessful in contesting the cease and desist order, the 
Company will be precluded from offering and selling viatical settlement 
contracts in Kansas unless it complies with all applicable provisions of the 
Kansas Securities Act and the regulations promulgated thereunder. 
Additionally, purchasers of the Company's viatical

                                      -11-

<PAGE>

settlement contracts who are Kansas residents will be entitled to rescind their
purchase and receive a refund of the purchase price plus interest at the
statutory rate from the date of sale.

         The third segment, Specialty Finance, consists principally of an 
office equipment leasing facility. This segment essentially acts as a 
intermediary in financing and leasing arrangements of office equipment and 
copiers. Previously, the segment's activities were included with the Merchant 
Banking segment. Because prior activity was immaterial, prior periods have 
not been restated to reflect the change.

MERCHANT BANKING SEGMENT

         As previously reported, the Merchant Banking Segment did not commence
operations until October 1997. Thus, there is no meaningful comparison to the
prior year nine month period.

         During the third quarter and for the nine month period ended as of 
March 31, 1999, the segment accounted for 63.7 and 66.3 percent of the 
Company's consolidated revenues, respectively. Moreover, during the third 
quarter segment revenue increased by approximately $1.4 Million or 14.2% as 
compared to the prior quarter. As compared to the comparable quarter of the 
prior year, segment revenue increased by approximately $3.5 Million, or 
44.6%. The increase during the current quarter as compared to the prior 
quarter relates principally to the segment's decision to increase agent and 
broker commissions. Previously, the segment's commission structure was 
moderately below market rates. Management relied on its quality of service to 
compensate for the lower commission structure. However, as the segment's 
market matured, with increasing competition, this philosophy has yielded 
decreasing results. Thus, by raising the commission structure to match market 
rates, while continuing to offer superior service, the segment experienced 
revenue growth.

         As compared to the comparable quarter of the prior year, revenue growth
was principally in response to the segment's investment in its market network.
Additional contributing factors include the superior service provided to
customers, and general market growth.

         Previously, the segment reported that it anticipated offering the 
additional service of financial brokering of office equipment sales and 
leases. The segment expected to broker this financing through a subsidiary 
corporation, Imtek Capital Corporation. Imtek Capital Corporation has entered 
into an agreement with a financial services company whereby it may facilitate 
financing arrangements. As previously discussed, this activity has been 
carved out of the Merchant Banking Segment and placed into its own segment. 
Prior to the third quarter the specialty financing activities were 
immaterial, and thus no restatement of prior reported financial statements is 
necessary.

         The segment's gross margin during the third quarter declined to 23.9%
from 27.3% in the prior quarter. Although the product mix remained consistent
between the two periods, as discussed above, this decline is principally in
response to the increase in commissions paid during the quarter.

                                      -12-

<PAGE>

         As compared to the comparable quarter of the preceding year, gross
profit and correspondingly gross margin increased to 23.9% as compared to 13.5%,
respectively. This increase is principally in response to the product mix, with
the current quarter viatical term lengthening.

         As previously reported, the Segment's profit margin, within a relevant
range, generally varies by the expected term of viatication. As the viatication
period lengthens, the corresponding profit margin generally increases.
Viatication periods generally run in six month intervals, with a minimum of six
months and a normal maximum of 48 months. These viatication periods are deemed
to be the product mix.

         Moreover, as discussed above, during the quarter the segment 
increased the commission structure paid to agents and brokers. The third 
quarter did not reflect the entire impact of the change. Management 
anticipates that the fourth quarter and periods thereafter will include the 
full affect of this change and management anticipates a proportionate decline 
in the segment's operating margin.

         Selling, general and administrative expense decreased by approximately
$58 thousand in the third quarter of the current year as compared to the prior
quarter. With the revenue growth, these expenses, as a percentage of revenue
declined by approximately 3.1%. This decline relates principally to the previous
quarter's expenses including the annual audit fee and other professional fees,
which were non-recurring during the third quarter.

         Moreover, as compared to the comparable quarter of the preceding 
year, selling, general and administrative expense have significantly 
increased. During the third quarter of the prior year these expenses 
represented slightly more than 6% of gross revenue. This increase is 
principally in response to the previously reported acquisition of a specialty 
financial services marketing group with related increases in payroll and 
fringe benefit costs. Along with directly related expenses of the 
acquisition, such indirect costs as advertising, travel, entertainment, 
postage, and such have also experienced increases. Finally, in concert with 
revenue growth, the segment has experienced proportional expense increase in 
such items as professional fees for legal and accounting, as well as other 
overhead items.

         Income from operations increased by $58 thousand over the prior 
quarter. As compared to the comparable quarter of the prior year, income 
increased by $137 thousand. However, as a percentage of revenue the current 
year's third quarter produced a decline as compared to the prior quarter and 
the comparable quarter of the prior year. Management, as previously reported, 
believes that as the industry matures, with increased competition, the 
operating income margin may experience additional contraction.

SPECIALTY FINANCE SEGMENT

         As previously discussed, the Company during the third quarter created a
third segment called Specialty Finance. This segment, with no previous
operations, consists principally of a 

                                     -13-
<PAGE>

wholly owned subsidiary, Imtek Capital Corporation and provides intermediary 
services in brokering financing and leasing arrangements of office equipment. 
During the third quarter, the segment's first quarter of operations, the 
segment generated $41 thousand of revenue with a resultant loss from 
operations of approximately $26 thousand. Management anticipates this segment 
to report operating profits in the first quarter of the subsequent fiscal 
year. Continued start-up expense and expansion of the segment's 
infrastructure during the fourth quarter of the current year are anticipated 
to consume generated gross profit. Due to the segment's commencement of 
operation during the quarter, there are no comparisons to the previous parter 
of the comparable quarter of the prior year.

OFFICE SOLUTIONS SEGMENT

         The Office Solutions segment generated gross revenue of $6,479,600 and
$18,014,200 for the quarter and nine month period ended as of March 31, 1999
respectively as compared to $2,026,500 and $4,867,600 for the comparable periods
of the prior year. As compared to the prior quarter, gross revenue increased by
$530,900 or 2.95%. This increase is principally in response to previously
acquired companies becoming fully integrated within the Company and to a lesser
extent, the Company's continuing marketing efforts. As compared to the
comparable quarter of the prior year, revenue increased by $4.26 million. This
increase is principally in response to acquisitions.

         Revenue for the quarter and nine month period as compared to the
comparable periods of the prior year on a same store basis was relatively flat.
The lack of same store revenue growth is principally in response to market
conditions whereby the segment has been restricted in its efforts to raise
prices.

         As previously reported, management has implemented a strategy of
revenue growth through acquisitions. The strategy consists principally of
acquiring smaller office equipment dealers located within specific geographic
markets. Management believes that these acquired companies, with similar
products and services, will benefit, after a reasonable assimilation period,
from the Company's centralized management, system of internal control,
additional financial resources, efficiencies associated with certain economics
of scale and expanded marketing resources. Management can provide no assurance
that any such benefits will be realized.

         The segment generated gross profit for the quarter ended as of March 
31, 1999 of approximately $2,088,500 or 32.2% of revenues, as compared to 
$1,979,900 or 33.3% of revenue for the prior quarter. This decrease in margin 
percentage is in response to one division which has a governmental contract 
that requires lower gross margins. Although this contract will have a 
negative affect on gross profit percentages, the expected revenue growth in 
future periods should provide for greater overhead coverage such that other 
sales will provide a greater contribution to the segment's operating income.

         As compared to the quarter ended as of March 31 for the prior year, the
segment substantially increased the gross profit. This increase, in excess of $1
million, is principally in response to acquisitions. However, the gross margin
declined from 51% to 32.2% compared to the same 

                                      -14-

<PAGE>

quarter of the prior year. This decline is principally the result of several
divisions in the prior year completing several large contracts which contained
above average profit margins.

         Selling, general and administrative expenses increased by $195,600 
or 9.2% as compared to the prior quarter. However, as a percent of sales, 
these expenses remained relatively constant at 36%. Compared to the 
comparable quarter of the prior year, selling, general and administrative 
expenses increased by $1,298,600 or in excess of 127%. This increase is 
principally due to acquisitions. The segment's acquisition strategy, in 
conjunction with internally generated growth, has performed as expected in 
that selling and administrative expenses, as a percentage of revenue, 
dramatically declined during the quarter as compared to the comparable 
quarter of the preceding year, in which these expenses were in excess of 50% 
of revenue.

         Additionally, for the nine month period of the current year, as 
compared to the prior year, selling and administrative expenses, although 
increasing by $4.2 Million or 195.4%, represented significantly less as a 
percentage of revenue, declining from 44.4% for the nine month period of the 
prior year to 35.4% for the comparable period of the current year. Again, the 
effective acquisition policy is the principal reason for this positive trend.

         During the fourth quarter management anticipates the design and 
implementation of a cost containment program within the segment. This program 
is intended to eliminate duplication of efforts, reduction of staffing 
levels, and otherwise review and reduce unnecessary operating expenses. 
Management anticipates sharing significant cost savings on an annual basis, 
from reducing the segment's overhead structure.

         Moreover, management is contemplating a modification to its financial
system structure such that the segment's financial system will be decentralized
to a hub basis. The intended product of these modifications is to provide
operational management more timely and specific financial information from which
operational management decisions can be based. With the intended modifications
to the financial system, management believes that the system of internal
controls will be strengthened and operational management will be provided better
tools from which to base decisions and thus should improve operational
efficiencies. Management can provide no assurance that these two programs will
produce their intended results.

         Although the segment experienced positive improvement in revenue 
growth, operating margin declines and continued dollar increases in selling 
and administrative expenses, the segment continues to experience losses from 
operations. The segment produced a loss from operations of $421,200 for the 
quarter, as compared to a loss of $142,200 for the prior quarter. For the 
comparable quarter of the prior year the segment generated a slight operating 
profit of $14,400. As previously discussed this profit was principally due to 
one division's completion of a large project that contained above segment 
norms for gross profit. For the nine month period, as compared to the prior 
year, the segment produced a loss from operations of $724,500 and $168,100, 
respectively. As previously discussed, management is addressing this issue 
with both cost containment actions and expansion of current operations 
management with improved tools and refined marketing efforts. Moreover, as 
previous acquisitions continue the assimilation process, revenue, and 
corresponding profits, should show signs of improvement in subsequent 

                                      -15-

<PAGE>

quarters.


FINANCIAL CONDITION AND LIQUIDITY

Office Solutions Segment

         Total assets for the Office Solution segment increased by $1,431,5000
or 9.35% as compared to the prior quarter and by $9,011,900 as compared to the
prior fiscal year end.

         Accounts receivable increased by approximately $680,000 for the 
quarter as compared to the prior quarter. The increase relates principally to 
material increases in revenue during the last month of the quarter, as well 
as the latter part of February. The increase is also a significant reason for 
the segment's decrease of $207,100 in cash during the quarter.

         Accounts receivable, as compared to the previous year-end also showed
substantial increase. This increase, in addition to the previously discussed
increase, is principally in response to acquisitions during the year.

         Inventories also increased during the current quarter as compared to
the prior quarter. This increase correlates with revenue growth during the
period. Management continues in its efforts to balance the inventory level with
near term customer demands and management's desire to provide the highest
level of service, which is facilitated by controlling stock-outs. As compared to
year-end, inventory levels have generally followed revenue growth.

         Prepaid assets during the quarter, as compared to the prior quarter 
increased in excess of $100,000, or approximately 30%. This increase was in 
response to inventory purchases and payment at quarter-end but which was not 
received and thus not included in inventory at quarter-end. The prepayment of 
this inventory was made to acquire stock items at the largest discount 
possible, and thus buttress the gross margin in the subsequent quarter.

         Corresponding to inventory and accounts receivable increases, the 
segment likewise experienced an increase in accounts payable. For the 
nine-month period, accounts payable also increased in response to 
acquisitions.

         Deferred revenue decreased to $1.4 million from $1.85 million in the 
previous quarter. This decline relates principally to two factors. The first 
is the trend of customers converting maintenance contracts from an annual 
contract to a month-to-month contract. The second factor relates to 
seasonability. Larger customers, including governmental agencies, have 
historically based expenditures upon budgetary cycles such that June and 
December experience large increases as annual contracts are renewed.

         Based upon the above, with other less significant fluctuations, the 
segment experienced a slight decline in the current ratio as compared to the 
prior quarter, decreasing from 1.94 to 1.81. The ratio for the quarter, 
however, remains an improvement over the prior year ratio of 1.77.

                                      -16-

<PAGE>

         Because the segment did not complete an acquisition during the 
quarter, it experienced minimal fluctuation in both non-current assets and 
liabilities. Management continues to anticipate future acquisitions, which 
would be funded from external sources, issuance of additional capital and, to 
a lesser extent, from internally generated cash flow.

Merchant Banking Segment

         Total assets for the Merchant Banking segment increased by 
$1,652,600 as compared to the prior quarter. As compared to the prior year 
end, total assets decreased by approximately $2.1 million. This decrease, as 
previously reported, relates principally to a substantial decrease in 
customer escrowed cash.

         Operating cash for the segment decreased by approximately $1 million
during the quarter and by $100,000 for the nine-month period.

         In concert with the consumption of cash during the quarter, accounts 
receivable increased by approximately $422,500 as compared to the prior 
quarter. This increase is in response to viatications which were completed at 
the end of the quarter but for which the segment had not received payment. 
These viatications were related to retirement assets by which funding is 
received by the retirement account trustee and from which such funding may 
not be completed for a period of 30 to 45 days. Settlements of these 
viatications were completed in April, 1999.

         Corresponding to the increase in accounts receivable, prepaid expenses
also increased. These prepaid expenses consisted principally of commissions paid
to agents in connection with the prefunding of the insurance policies sale. The
segment recognizes commission expense upon policy sale.

         During the quarter, escrowed cash (funds received from third party 
purchasers prior to settlement), increased by approximately $1,800,000 over 
the previous quarter. For the nine-month period, escrowed cash declined by 
approximately $2.2 million. These fluctuations are principally in response to 
the timing of settlements and the subsequent receipt of funds such that 
significant viatications during the last several days may result in increases 
to escrow cash if funding has occurred from third party purchasers prior to 
the period end.

         As the segment continues to grow and expand, expenditures for property,
plant and equipment will be required. During the quarter the segment expanded
approximately $96,000 and for the nine-month period approximately $98,000. These
expenditures consisted principally of office furniture and equipment.

         Specialty Finance Segment

         As previously discussed, the Specialty Finance segment came into
existence during the quarter. Thus, there are no meaningful comparisons to
either the prior quarter or the nine-month period. This segment was primarily
financed by a $150,000 pre-funding arrangement that the Company entered into
with a national leasing entity. Total assets of this segment at March 31, 1999
were $132,600 consisting primarily of cash and approximately $8,000 in accounts
receivable.

YEAR 2000 STATEMENT

         The year 2000 (Y2K) issue is the result of computer programs using a 
two-digit year, such that the computer system may interpret the year 2000 as 
1900. Should this occur, a system-wide failure of computer systems would be 
eminent and could lead to company-wide disruptions. The cost of such 
company-wide disruptions could have a material adverse effect on the 
Company's financial condition and results of operations.

         As previously reported, the Company has implemented its three phase 
plan to address its Y2K issue and has principally completed both phase 1 and 
2 of its plan. A number of applications have been identified as either Y2K 
compliant or that the third party vendor has provided the Company with 
assurance that the application will be Y2K compliant.

         Management does not anticipate significant additional expense in 
future periods associated with any known Y2K issue.

                                      -17-
<PAGE>

PART II.  OTHER INFORMATION.

Item 1.  Legal Proceedings

         In November, 1998 the Company settled a $500,000 lawsuit (which was
reported in Item 3 of the Company's annual report on Form 10 K for the fiscal
year ended June 30, 1998) which alleged certain copyright infringements and
breach of contract damages. Settlement terms called for a payment of $60,000
made in December,1998 and subsequent semi-annual installments made through
December 2000, totaling $82,500.

         On April 16, 1999, the Kansas Securities Commissioner issued a cease 
and desist order against Imtek Funding Corporation d/b/a Beneficial 
Assistance, finding that the Company's viatical settlement contracts are 
securities within the meaning of the Kansas Securities Act. In response, the 
Company has ceased all offers and sales of all viatical settlement contracts 
within the State of Kansas. The Company believes that the determination made 
by the Securities Commissioner is incorrect and plans to request a hearing to 
contest the determination. The Company has sold less than 10 viatical 
settlement contracts to Kansas residents, aggregating approximately $193,000. 
If the Company is unsuccessful in contesting the cease and desist order, the 
Company will be precluded from offering and selling viatical settlement 
contracts in the State of Kansas unless it complies with all applicable 
provisions of the Kansas Securities Act and the regulations promulgated 
thereunder. Additionally, purchasers of the Company's viatical settlement 
contracts who were sold viatical settlement contracts in violation of 
applicable Kansas law may become entitled to rescind their purchases and 
receive a refund of the purchase price plus interest at the statutory rate 
from the date of sale.

Item 6.  Exhibits and Reports on Form 8-K.
         (a)      Exhibit:
         27       Financial Data Schedule

         (b)      Reports on Form 8-K:
                  None




                                      -18-


<PAGE>


                                   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 thereunto duly authorized.

                                         IMTEK OFFICE SOLUTIONS, INC.


                                         By: /s/Edwin C. Hirsch
                                         --------------------------
                                         Edwin C. Hirsch, President
                                         And Chief Executive Officer



                                         By: /s/ Brad Thompson
                                         --------------------------
                                         Financial Officer


Dated: May 17, 1999

                                     -19-